1. 1
Retail Scenario – India
The retail scenario in India is unique. Much of it is in unorganized sector, with
over 12 million retail outlets of various sizes and formats. Almost 96% of these outlets
are less than 500 Sq.ft. in size, the per capita retail space in India being 2 sq.ft compared
to the US figure of 16sq.ft. India’s per capita retailing space is thus the lowest in the
world.
With more than 9 outlets per 1,000 people, India has the largest number in the
world. Most of them are independent and contribute as much as 96% to the retail sales.
Because of increasing number of nuclear families, working women, greater work
pressure and increased commuting time, convenience has become a priority for Indian
consumers. They want everything under one roof for easy access and multiplicity of
choice.
The growth and development of organized retailing in India is driven by 2 main
factors-lower prices and benefits the consumers can’t resist. India is rapidly evolving into
a competitive marketplace with potential target consumers in the niche and middle class
segments. The market trends indicate tremendous growth opportunities. Global majors
too are showing a keen interest in the Indian retail market.
Fabindia
For decades, Fabindia has been committed to retail craft products through
collaboration with artisans in rural areas. Their endeavor is to provide customers with
hand crafted products which help support and encourage good craftsmanship. Their
products are sourced from villages all over India. Fabindia works closely with artisans by
providing various inputs including design, quality control, access to raw materials and
production coordination.
Over the years the focus of Fabindia marketing shifted from exports to the local
Indian retail market. What started as an export house has today become a successful retail
business presenting Indian textiles in a variety of natural fibers, and home products
including furniture, lights and lamps, stationery, home accessories, pottery and cutlery.
Extending this partnership to the farmers in rural areas, Fabindia has launched its organic
food products range. Fabindia Sana, the company’s authentic body care products range is
also being launched at all Fabindia outlets
The vision continues to be to maximize the hand made element in their products,
whether it is hand-woven textiles, hand block printing, hand embroidery or handcrafting
home products.
Fabindia launched its organic food products range in 2004 it sells its organic products
under three basic categories:
2. 2
Green: Fully certified organic farm. No chemicals used for a long time .The product is
Fully certified by external accredited organic certifying agency.
Blue: In conversion no chemicals used. The product is from farm in conversion for
organic certification.
Yellow: Farmed naturally without any history of chemical use. None of the products
contain any synthetic additives, preservatives, colours or flavors.
Tresorie
At Trésorie one is spoilt for choice with rich and beautiful collections from all
across the country and world over. It has four floors of display area covering
approximately 8000 sq. ft with a wide range of unique, classy and extra ordinary
designed home décor products. Trésorie is housed in a five storied building which looks
from outside like a Treasure House / Treasure Trove well tucked in from the road.
The store’s product mix included designer clothing and personal accessories for
men & women, matched by an entire home line consisting of home accessories &
products, bed-linen, table-linen, carpets, rugs, durries, frames, furniture, et al. Gradually
with its growth over the years and to cater to its customer needs for achieving customer
satisfaction, additional weight-age is now given towards home décor products & home
accessories including premier furnishings, made-ups, designer furniture, elegant vases,
crystal, crockery, kitchen items, personal accessories - semi precious designer jewelry
and purses etc. which are very extra ordinary and exclusive in nature. These are procured
from all corners of the country and world over.
Goodearth
It was established in 1996, with its first store in Mumbai, GOOD EARTH is today
recognized as a trend setting design house, which has created a unique aesthetic reflecting
contemporary Indian Style. At GOODEARTH the focus is on living, with a range of
stylish, exclusively designed products for Dining & Entertaining, Bed Linen, Cushions
and Home Decor. It has recently launched 2 distinct brands Good earth Verandah which
showcases unique collection of cohesive furniture, unusual lights and Objects D Arts
from designers across the world and Amritam home spa which offers a range of oils,
hydrosols, and soaps of the highest purity levels.
3. 3
Bombay Stores
Bombay Swadeshi Co-operative Stores Co. Ltd. came into existence on 14th December,
1905. The year 1963 was a landmark in the history of the company, as it became the first
retail organization to be listed on the Bombay Stock Exchange. It then came to be known
as Bombay Swadeshi Stores Ltd. In the present day of globalization, the swadeshi
movement has little significance. As the store now caters to an audience with a
contemporary mindset the brand was re-christened in 1995 as 'The Bombay Store’. The
company exports to small retailers in various countries like Australia, Japan, United
Kingdom, United States, Canada and Mexico. As part of a value-added service, the
company also exports individual purchases made by customers at its different outlets.
The products that are been exported include candles, candle-stands, terracotta and
ceramic wind chimes, wood and metal handicrafts, etc.
The company is also capable of exporting apparel, soft furnishings, and other products
that belong to the handicraft and handloom sectors.
Market Research
Market research is defined as systematic and objective process of generating
information to aid in making marketing decisions. This process includes specifying what
information is required, designing method for collecting information, managing and
implementing the collection of data and analyzing the results and communicating the
findings and their implications.
It is a decision making tool used to fulfill the marketing managers need for
knowledge of market. Market search is a mean for implementing the marketing concepts
and total quality management programs. It helps in development and implementation of
marketing strategy.
New
Products
Market research can show
unmet needs and provide
an understanding of
unfamiliar markets
Market research can
measure customer
satisfaction to find out
how to maintain a
competitive edge
Market research can find
new territories for product
or services
Existing Markets New Markets
Market research
can show the
likelihood of
adoption of new
product
Existing Markets
Existing
Products
4. 4
Market Research Process
Problem
Discovery
Selection of
Exploratory
Research Technique
Problem
Definition
Selection of Basic
Research Method
Historical
Data
Experience
Survey
Case
Study
Pilot
Study
Survey
Interview
Questionnaire
Experiment Secondary
Data
Study
Observation
6. 6
Primary Research
1. Defining The Problem
“Understanding Market scenario and analyzing the market potential for luxury & lifestyle
products at Mumbai”
2. Research Objective
Þ To find out the market potential for luxury and lifestyle products
Þ To analyze consumer buying behavior w.r.t luxury & lifestyle products
3. Designing the Research Plan
Type of research – exploratory research
Information pertaining to retail industry specially luxury and lifestyle products was
collected from internet, magazines, journals and books. In course of research the
researcher administered a questionnaire personally.
4. Kind of Data Used
Þ Primary
Þ Secondary
Primary Data
We have generated structured questionnaire and collected information exclusively for our
purpose of analyzing the market potential for luxury and lifestyle by observing the
product’s sale & consumption pattern
Secondary Data
We have tried to understand the customer behavior, retail industry in India from book
extracts and from internet.
5. Population Framework
I) Individuals
a) Households
b) Office going professionals
c) Youth (College Students)
II) Store Managers & Merchandisers
7. 7
6. Sampling Method
Þ Convenience Sampling Method
7. Sampling Area
Þ Fabindia Colaba
Þ Fabindia Santacruz
Þ Fabindia Inorbit Mall Malad
Þ Fabindia Nirmal Lifestyle Mulund
8. Collection of Data
Interview
Structured Questionnaire
Þ Open ended questions
Þ Close ended questions
Þ Objective questions
Þ Likert scale questions
Separate questionnaire were drafted for store managers & merchandisers and for
customers/ individuals.
Questionnaire for individuals
These questions deal with consumption frequency & preference related specific category
of product and finds out customer’s views and preferences, awareness, effect of
marketing strategies. It tends to capture the overall consumption pattern and buying
behavior.
Questionnaire for Store Managers& Merchandisers
These questions deal with finding out the stock sales ratio, inventory status, and turnover,
finding out the stock keeping units and understanding the selling trends.
8. 8
Performa Questionnaire
1. For Customer
1. Luxury products make what percentage of your spending
[ ] < 5 % [ ] 5-10 % [ ] 10-20 % [ ] >20%
2. Luxury products form what percentage of your festival shopping
[ ] < 5 % [ ] 5-10 % [ ] 10-20 % [ ] >20%
3. What is your frequency of buying luxury products?
[ ] Monthly [ ] Quarterly [ ] six monthly [ ] yearly
4. When was the last time you bought an luxury item?
[ ] this week [ ] this month [ ] 2-3 months [ ] > 6 months
5. To which product category does it belong?
[ ] household [ ] lifestyle [ ] personal care [ ] jewelry
6. What was the approx price of that product?
[ ] 500 [ ] 500- 2000 [ ] 2000-5000 [ ] >5000
7. Does the price band affect your decision while shopping for luxury goods?
[ ] Yes [ ] No
8. If the luxury products are priced at a lower band will it affect your frequency of
buying?
[ ] Yes [ ] No
9. 9
2. For Store Manager
(1)Which of the following according to you is the best buying season?
(a) June-Sept (b) Oct- Feb (c) March-May
(2)What is the approximate space of your store?
(3) What is the customer traffic per day
(a) 100-200 (b) 200-300 (c) 300 above
(4) What is the customer to buyer conversion ratio?
_____________________________________
(5) Which time slots turn out to be profitable?
(a) 11-1 (b) 1-3 (c) 3-6 (4) 6-10
(6) Average sales per transaction?
(a) 500-1000 (b) 1000-2000 (c) 2000-5000 (d) 5000 above
(7) Product mix displayed in the store
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(8)Which product in your store has the maximum sales per day?
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(9) What is the approximate stock to sales ratio of your store?
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(10) What are the ranges of products the customers tend to buy more?
(a) <500 [ ] (b) 500-1000 [ ] (c) 1000-2000 [ ] (d) >2000 [ ]
(11) What are the age groups of the customers that generally visit your store?
(a) > 12 [ ] (b) 12-19 [ ] (c) 20-35 [ ] (d) 35-55 [ ] (e) >55 [ ]
10. 10
(12) Which income group does your store target for its maximum sales?
(a) Middle class (b) Upper class (c) The Rich (d) The Premium
(13) How do you promote the brand name of your store?
_____________________________________________
(14) How do you attract the customers during different seasons and do you find
discounts as a viable option for it?
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(15) Spending budget allotted for promotional activities during season?
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(16) What percentage of customers gives revisit?
(a) 5-10 % [ ] (b) 10-20 % [ ] (c) 20-30% [ ] (d) >30% [ ]
(17) What kind of Customer retention programs/policies do you have?
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(18) What is the Return /exchange policy?
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(19) What are the net sales per full time employee?
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(20) Do you employee brand specific CR executives?
(a)Yes (b) No
(21) What is the average sales target allotted per executive?
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(22) What is the average stock price?
____________________________________________
11. 11
Demographic Survey
Fabindia has become a successful retail business presenting Indian textiles in diverse
natural fibers. Determined to showcase Indian handloom textiles while providing
equitable employment to traditional artisans, Fabindia was established in order to fuse the
best aspects of East/West collaboration.
Fabindia Strategy
Fabindia has a unique company policy. The company does not believe in having
franchisee nor does it get into much of promotional campaigns for its brand promotion.
Fabindia has created its own brand name by delivering quality products to their
customers. Even the products which are displayed in the various stores across the country
are manufactured by the company itself and that too keeping in mind the various need
and wants of the customers.
Some of the promotional strategies include providing discounts, offers etc. for e.g.
In Fabindia if a customer tends top buy regularly he is treated as a loyal customer
providing him discounts on various sections in the store or providing a straight discount
of 10% on purchases above Rs.40, 000.
Fabindia strategy involves finding remote craftsmen and designing commercially
appealing products. This has also enabled it to generate meaningful employment for these
artisans. Even the logistics are handled by Fabindia i.e. the products are delivered from
manufacturing plant to the retails under Fabindia rather than using private transport.
Fabindia marketing channel
For a sustainable level of business, Fabindia chooses locations with over ten lacs
population for its stores and mainly targeting the emerging middle class who want to try
traditional but innovative products which Fabindia promises to deliver. Fabindia also
have a few selected stockiest who are allowed to can keep the various range of products
but under its brand-name. This helps to target different sections by providing spread over
price setups, for e.g. clothing, stationary, artifacts and textile products (bed, kitchen, and
table and bath linen).
12. 12
Fabindia tries to maximize the handmade proportion in its products, using hand-
woven, hand block-printed fabrics and vegetable dyes as far as possible. The handloom
process and techniques of production gives the textile a unique character. In addition,
handloom fabrics breathe well, are cool in summer and retain body warmth in the winter.
However, if a fabric which has been made using a power loom is used, it is decorated
using hand processes such as block printing, embroidery, or embellishing.
Locations Analysis
Fabindia maintains its own product outlets. Within India, it merchandises and
distributes its products through company owned stores. Keeping in mind the number of
customers visiting the store and the range of products to be displayed the store sizes vary
for different locations. For e.g.
Location Customer Traffic / Day Space Rent ( Rs in Lacks)
Colaba 15000 48
Powai (Hiranandani ) 100-200 1200 3
Mulund 100-150 3000 3.6
Malad (Inorbit) 150-200 1000 1.8
Santacruz 150-200 5000 16
The store size to some extent are influenced by the buying behavior of the
customers because in certain locations people buy more of garments and accessories
which require less space rather than furniture which takes more space for its display
FEEDBACK
MANUFACTURES
CUSTOMERS
13. 13
Product Mix
Fabindia provide a unique product mix consisting of Garments, Jewelry, Organic foods,
Body care products and Furniture. The Fabindia product range includes ready-to-wear
garments and accessories for men, women and children; bed, bath, table and kitchen
linen; floor covering, upholstery fabric and curtains
CLOTHING
Garments
Men’s Wear
Shirts
Kurtas
Pajamas
Ties
Women’s Wear
Cotton Sarees
Silk Sarees
Kurtis
Chudidars
Salvars
Duppatas / strolls /
scarf’s
Skirts
Shirts
Shawls
Boy
Pants
Shirts
Traditional Wear
Girl
Skirts
Tops
Traditional Wear
16. 16
Customer Behavior and Relationship
1) % Turn Out
There is huge number of turn outs in Fabindia. However, it is actually difficult
to decide who turn out to be potential buyers. The percentage of turn out can thus be
calculated on the basis of the total number of bills wrt the total number of walk-ins. This
can be mathematically stated as:
% of turn out = Total no of bills
Total no of walk-ins
By using the above expression for Fabindia we get an approximate ration of
30-40 percentages. That is 30-40% of customers tend out to be the buyers out of all
visitors.
2) Revenue Generating Hours
Fabindia has developed a Customer Traffic Summary (CTS) which monitors the
different customers visiting the stores. This helps then to keep a check on their regular
customers as well as the potential customers that can make a purchase in near future.
The most profitable time slot for Fabindia was found out to be 6-10 in the evening
where most of the customer belong to working class who prefer to shop after there office
hours. While the other profitable time slot is 3-6 where most customers are the
college students who visit the store for buying stationeries, imitations and garments.
3) Average Sales Per Transaction
Location Price (Rs.)
Colaba above 3000
Powai 1300-1500
Mulund 800-1100
Malad 1000-1200
Santacruz 1300-1600
From the above data out of the total number of product sections the garment
was found out to be more profitable in which women’s traditional dress being the major
contributor to it.
The customers who turn out in huge number in Fabindia are there loyal
customers who believe in the products supplied to them. Other than normal customers
who visit the stores Fabindia also provide there organic food and Body care products to
the hospitality industry with major customers being the Taj hotels.
17. 17
Trésorie
Product Mix
Product Range (INR) Images
Elegant and premium
furnishings
Rs. 300 to Rs. 800
per meter
Linen, lamp shades,
decorative flowers,
and home accessories
Rs. 200 to Rs.
10,000
Designer furniture and
décor items
Rs. 1,000 to Rs.
50,000
Candle stands, paintings,
photo frames,
vases, and gift items
Rs. 100 to Rs.
15,000
19. 19
Customer Demographics
Number of respondents: 12
Age Structure
25%
50%
17%
8%
<20 years
21-35 years
36-55 years
>55 years
Yearly Household Income
17%
49%
17%
17%
<4 lakhs
4-8 lakhs
8-12 lakhs
>12 lakhs
Proffession
8%
25%
50%
17%
Businessmen
Private Executives
Government Executives
Service Class
20. 20
Customer Survey Results
%of luxury products in total spendings
17%
49%
17%
17%
<5%
5-10%
10-20%
>20%
% festival shopping as luxury products
33%
33%
17%
17%
<5%
5-10%
10-20%
>20%
frequency of buying luxury product
17%
17%
17%
49%
monthly
quarterly
six monthly
yearly
