Fab india Case study - Positioning
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Fabindia is a retailer known for its high quality handloom fabrics that was founded in 1960. It has faced increasing competition from e-retailers, domestic brands, and international brands. To address problems of low brand awareness and changing consumer habits, Fabindia plans to advertise creatively, launch a youth brand, use brand ambassadors, and improve store layout and displays. It has established best practices such as personal relationships with suppliers, improving craftsmen's livelihood, customizing products, and diversifying its business model.
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Fab india Case study - Positioning
- 1. By: Achyut Razdan Gaurav Sharma Milind Singh Pranav Kakkar Samjukta Paul Sonia Kerkar GROUP 5
- 2. Introduction • Fabindia, name signifies “the Fabric of India” and its quality handloom fabric • Founded by John Bissell in 1960 • Personalised relationships suppliers • Exporter incorporated Retail • Capitalised on “Fabindia look” • Social conscience • Achieved benchmarks in record time
- 3. Problems • High competition E-retailers Domestic / Private brands International brands • Low brand awareness • Reduced brand loyalty • Changing clothing habits • Consumer perception • Consumer shopping experience
- 4. Solutions • Know what customer really wants • Convenient locations • Skilled staff for each segment of customer • Advertise in creative locations such as metros, buses, and popular Web sites • Loyalty benefits : Personalized card / vouchers rewarding points on transaction • Launch Youth centric label : Casual / Fusion wear • Youth icon as Brand ambassador • Keeping the store well lit and clear demarcation between sections • Updating the show window regularly to make sure customers know the new line of designs
- 5. Best Practices • Personalised relationships with suppliers • Established AIACA improving craft market and living conditions of craftsmen • Customizing product as per the target audience • Fabindia philosophy : Not returning defective merchandise to suppliers • Alteration of compensation structure • Reconfiguring vertical integration : minimizing hierarchy, optimising cost and resource management • Diversification
- 6. THANK YOU
Editor's Notes
- John Bissell aimed at maintaining a great rapport with his suppliers by gestures such as providing them with loans against their invoices in small instalments to encourage expansion. Though Fabindia started off as an exporter, but soon after the helms were in William’s hands, the company concentrated on incorporating retail business in the domestic market. Capitalised on ideologically trendy ethnic looks. Aimed at providing a sustainable livelihood for rural artisans. Achieved record growth in a very short span of time, opened stores aggressively in several locations throughout the country.
- Lack of proper advertising led to low brand awareness. Advertisements were limited to openings of new stores Choice of apparels amongst youngsters changed with every changing occasions. They had a lifestyle to match, which made them naturally disloyal to a particular brand because for them variety had to be the key. Taste of apparels amongst youngsters changed, thereby creating more bias towards fusion clothes rather than towards ethnic Indian clothes. Consumers started perceiving Fabindia’s designs as middle-aged. Congested stores, lack of demarcation between sections led to poor consumer shopping experience.(from exhibit 20)
- By conducting surveys and market research, Fabindia should try to get to know more about customer sentiments and their needs. Setting up more number of stores in convenient locations like malls will give them more visibility rather than just concentrating on setting up stores in heritage buildings. Sales staff should be properly trained and they should be skillful enough to communicate and cater to customer queries, thereby providing a better consumer shopping experience. To ensure customer loyalty, the company can start giving out personalized cards/ vouchers which would be loaded with reward points every time a customer makes a purchase. Launch Indo-western/fusion wear which is currently a hit amongst youngsters and use a Bollywood youth icon to promote this new line. Well lit and clear demarcation between sections improves customers’ shopping experience.
- Showed a huge sense of social responsibility and conscience by working towards establishing AIACA which aims at improving the living conditions of the rural artisans. Customized products : Customized shirts for stores in Delhi and Mumbai depending upon customer taste. Also, restyled Nehru jacket in a lighter fabric with the same cut for stores in Bombay. They didn’t believe in returning defective merchandise to the suppliers which depicts their commitment towards creating a positive rapport with their suppliers. Altered the compensation structure and based the new one on job scope rather than on seniority. Optimized the supply chain management by dividing the entire process under 4 verticals , each of which had its own set of functionalities which in turn led to a better management. Company that started off as an exporter, later moved into a retailer of a number of items viz. apparels, furniture, home furnishings, lifestyle products, organic food.