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Footwear industry

  2. 2. 2 PREFACEResearch project is the bridge for the student that takes him from his theoretical knowledgeworld to practical industrial world. The advantage of this sort of integration (research programme), which promotes guided to corporate culture, functional, social and norms along with formalteaching are numerous. The main aim is: To bridge the gap between theory and practical To help the students to develop the better understandings of concepts and question already raised or to be raised subsequently during their research period.The present research report gives a detailed view of CUSTOMER SATISFACTIONREGARDING HIGH END BRANDED SHOE INDUSTRY WITH SPECIAL REFRENCE TO(ADIDAS, PUMA, NIKE AND LIBERTY)
  3. 3. 3 ACKNOWLEDGEMENTPreservation, inspiration and motivation have always played a key role in the success of anyventure. In the present world of cut throat competition project is likely a bridge betweentheoretical and practical working, willingly I have prepared this particular project.Firstly, I would like to extend my sincere thanks to Miss Pallavi dua (Asst. prof.) andProf.(Dr.) S C Aggarwal (director) for his able guidance, regular counseling, keen interest andconstant encouragement, without this support the project would not have a successful end. I amhighly thankful to her for his helpful attitude, regular coaching and inspiration.I sincerely thank to all faculty members and the staff associated for their support given to metime to time. Also, I would like to thank to all my friends and family members for their supportgiven to me time to time. I don’t have words to express my thanks, but still my heart is full ofgratitude for the favors received by me from every person. (Zubin Sehgal)
  4. 4. 4 DECLARATIONI, Zubin sehgal the undersigned, hereby declare that this report entitled” is a genuine andbonafied work prepared by me under the guidance of Miss Pallavi dua (Asst. Prof.), and is myoriginal work. The matter in this report is not copied from any source.This work is humbly submitted to AIMT for the award of degree of Master of BusinessAdministration.Place:Date: (Zubin sehgal)
  5. 5. 5 TABLE OF CONTENTSTopic Page NoChapter No – 1INTRODUCTION 6-30 Footwear IndustryChapterNo - 2RESEARCH METHODOLOGY 31 Objective of the Study 32 Types of study 33 Limitation of the Study 34Chapter No - 3DATA ANALYSIS AND INTERPRETATION 35-54Chapter No - 4FINDINGS, CONCLUSION & SUGGESION 55-57 Findings 55 Suggestion 56 Conclusion 57BIBLIOGRAPHY 58-59APPENDIX 60-65
  6. 6. 6 Indian Shoe MarketThe Indian footwear market is estimated to be worth USD 3.94 billion and is growing at acompounded annual rate of 15% to be worth USD 6.89 billion by 2015.The global footwear market size is estimated to be USD 181.9 billion growing at a CAGR ofnearly 5%.India is the world’s second largest footwear producing country, second to China andthe third largest market.Even though the per capita shoe consumption in India has gone up from 1.4 shoes a year in 2004to 2.5shoes per year in 2012, it is still much below the average per capita income shoeconsumption of five, in developed countriesIndia is a major supplier of medium- and low pricedFootwear.Several footwear majors source parts of their production and purchase from India. Further,reputed global brands such as Florsheim, Nunn Bush, Stacy Adams, Gabor,Clarks, Reebok, Ecco, Deichmann, Elefanten , StMichaels, Hasley, Salamander and Colehaanaremanufactured under licensed in India.India has a booming garment and shoe market. In various cities there, new shopping malls havesprung up one after another and sellers compete to exhibit latest products while consumersexhibit eager demand for brand products.Many brands expand their businesses through franchised operation, particularly garment andshoe brands. By 2012, franchised operation is expected to hit 6% in growth rate, amounting toUSD 17 billion in total value. This means that this market will create substantial opportunitiesrelated to franchised operation.India is witnessing a rapid growth in its retail, attracting many international brands, most ofwhich come from Europe and USA. After Tommy Hilfiger opened up store in India recently, it isreported that Esprit is to enter this market in summer 2005.
  7. 7. 7According to CY Pal, president of India Franchise Association, half of the retail activities inUSA is conducted in the form of franchised operation while only 2% of the retail activities inIndia is associated with franchised operation.However, franchised operation has been rapidly growing in India at the annual growth rate of30-40%, especially 4 or 5 years ago.According to Pal, research indicates that the success rate for franchised operation is as high as90% while that for non-franchised operation is as low as 10%. Major players are opening morestores to capture the growing consumer market.Further, an increasing number of players are delving into Tier II and Tier III cities as well as thegrowing ruralmarket to tap growing opportunity. According to media reports, thenon-metro market accounts for nearly 55% of the overall footwearindustry.According to For, an online footwear retailer,37% of the traffic comes from urbanareas, while an equal numbercomes from towns with a population of less than half a million.*Recently, Reebok announced that it would make a one-dollar shoe for India. This will enablethem to capture the largely untapped rural market.Online shoe shopping is a significant segment that is fast emerging in terms of footwear sales.According to reports, it accounts for about8% of the overall industry and is expected to reachabout 20% by 2015.Retailers need to localise their product offerings to cater to varying consumer demands. Ittherefore becomes imperative to understand target consumer demands.Styles and colours vary from region to region.Bright colours may be demand in northern Indiawhile white and muted colours sell well in south India. In fact, to overcome this, some largeRetailers like Nike and Reebok are offering customising options such as selecting the design,Colours, etc. on their websites.According to an ASSOCHAM survey, women are in general more concerned about the style andLooks and do not mind buying from the local market. On the other hand, men are concerned
  8. 8. 8About the quality and price of the product and prefer branded shoes.Growing competition will see innovation become key to differentiating between products in theMarket and gaining consumers. Players are innovating around materials, design, etc in order toImpart varying attributes to the footwear-like insoles that can modulate the heat released, solesto which varying weight may be attached to vary the stamina of the workout, etc.Nike has launched a new line, Nike Flyknit. The shoe has a sock attached within. Further, thewarp and weft of the shoe’s texturised knit opens up the possibility for interesting colourcombinations.Total revenue of footwear industry in india
  9. 9. 9The Indian footwear industry has developed substantial links in the global production network.But, this industry is still dominated by firms that cater largely to the domestic market through theartisanal production system. Specific footwear centres and sections of firms in traditionalfootwear clusters have established strong relations with the export market. Still, there are onlyfew firms (e.g., Lotus Footwear Ltd., Apache Footwear Ltd. Etc.) that are directly involved in theglobal production chain of multinational corporation (MNC) in the sports footwearcategory..Apart from TATA, no large domestic corporate firm is involved in the footwearproduction neither for export or in the domestic market.The marketing system of export and domestic markets can be aptly compared in thetheoretical framework of transaction cost economics (Tesfom et. al, 2003). The key elements ofthis framework are asset specificity, uncertainty and frequency.In this low technology industry entry barrier is low and asset specificity is largely related tomarket information.In export market, the market research is largely undertaken by importers (wholesalers, retailchain stores,departmental stores etc.). In the absence of organised market research bywholesalers (along withlow development of retail chain stores) direct entry into domestic marketrequires substantialresources.Second, greater uncertainty exists in the domestic market in the sense of marketvolatility – lackof information on evolving fashion requirement, demand in particular marketand less availabilityof assurance instruments (letter of credit, agents, quality inspection etc.).Third, importers place relatively larger orders in specific frequency (seasons) whereas domesticwholesalers order in small batches and at less regular frequency.In this scenario, the size of market, type and quality of product to be manufactured broadlydetermines the choice of production technology in different market segments. However, theprocess of technology adoption and technical change therein is influenced by the existinginstitutions with its specific incentive and disincentive structures which are embedded in theculture (caste specificity of traditional footwear production) and other institutions that are
  10. 10. 10Historical realities (You, 1995). The size distribution of firms and changes in it is the outcome ofate interplay of these various factors and institutions.This study is organised in the following fashion. First, we discuss the footwear industryin India in the global context. Second, we present three case studies to get a complete picture ofthe complexity and dynamism of this industry. Last, we pinpoint issues that have implication onthe employment size distribution of firms.Most of the exporting firms concentrate on men’s and women’s footwear and only few ofThey specialize in children footwear. Children footwear requires larger variation in size, colourAnd stringent norms of different chemicals used. Most of the raw materials are sourced fromlocal merchants and only in few cases leather and other accessories are imported. In largeexportunits production goes on almost throughout the year but however the peak period last forsix months as footwear supplied go for summer and autumn season.The leather industry is one of the oldest traditional industries. It has several components liketanning, footwear & leather products including garments.Modern leather industry began with British governments direct encouragements.First modern tanning was established in 1857(Kumar, 1997).The first modern footwear industry was started in 1887. However, the footwear industry waslargely based on traditional artisan mode. In the industrial policy of 1967, the leather industryincluding footwear was reserved for small scale sector.In late 1970s and early1980s, 100 per cent export-oriented footwear industries in larger scalewere promoted and that Allowed larger scale industries to get established afresh.Only in the month of June in 2001, the Leather industries were de-reser
  11. 11. 11Rapid growth in high and medium-end shoe marketOrganized retail scale in India only occurs recently. According to Pal, Bata is one of the firstbrands to implement franchised operation and currently, almost all sports shoe brands, includingPuma, Adidas and Nike, are operated in this mode. Indian high-end sports shoe and garmentmarket is expected to achieve 20% growth rate this year.As indicated by Sushil Dungarwal, executive president of The Loft (forerunner in brand shoestores), current market is shifting from low-price shoes to medium and high-end products, thusattracting a lot of foreign shoe brands to open stores in India. Recently, Clarks opened itsexclusive shoe store in India and other brands such as Lotto, Marco Ricci, Valis and TommyHilfiger have achieved outstanding performance. Loft is operating more than 130 Indian andinternational prestigious shoe brands, becoming a platform for most international brands to enterIndian market.Most international shoe brands enter Indian market through different retail channels, includingexclusive stores and stores dealing in multiple brands. According to Dungarwal, Clarks has itsexclusive store and has formulated its marketing strategy; Tommy Hilfiger also launches seriesshoes through its exclusive store. Other brands such as Ecko may also market their productsthrough two types of stores. As indicated by Dungarwal, Indian high quality shoe marketpromises great potential. India has a population of one billion. If every Indian buys a pair ofUSD 15.5 shoes, this makes a huge market. He believes thousands of shoe stores will be openedin India in the next 5-10 years.
  12. 12. 12Top ten footwear consumption all over the worldSports shoe market is also experiencing a booming growth. Many international brands such asPuma, Adidas and Nike are planning to expand market in India. Holding 47% market share inIndian high-end sports shoe market, Puma already has about 130 stores there and is planning toopen a new store every week to fully cover large and small cities in India. India is also the largestmarket for Adidas in Southeast Asia. This brand has opened 80 franchised stores in variousregions in India. Italian brand United Coloursof Benetton that has maintained a low-key attitudein past years is planning to expand its market in India and will update and expand their existingstores.
  13. 13. 13 POLICY IMPLICATIONS . Innovative Quality: There should be more stylish feature added by the companies so that it provide unique advantage to the customer Time saving facility for high income group: The company should make effort to save the time of high income group that the can stay with the brand. Discount during season time: The companies should introduce new schemes and offers to customer to attract the min season time, so that everyone can purchase during season time More advertisement: The companies should adopt the strategies to increase the awareness among the customers by putting extra efforts on commercial advertisement so they can be more successful in future.
  14. 14. 14FAMOUS BRAND OF SHOES IN INDIANikeNike is the largest seller of athletic footwear and apparel worldwide by sales. The companyspecializes in the development and sale of athletic footwear, apparel and equipment, whichtogether totaled approximately $19.2 billion in sales during Nikes fiscal 2009. Footwear isNikes largest product category, representing 53.7% of the companys revenue. In addition to itsnamesake Nike brand, the company also develops and markets footwear and apparel productsunder the Cole Haran, Converse, Hurley International, and Umbro Inc. brand names. Nike sellsits products in over 180 countries worldwide through its company-owned retail stores andinternet sites, as well as through retailers like Foot Locker (FL) and Dicks Sporting Goods(DKS). The company divides its sales into four regions across the globe- the United States,Europe, Middle East and Africa (EMEA), Asia Pacific, and Central and South America. In 2009,these regions accounted for 34.1%, 28.7%, 17.3%, and 6.7% of Nikes revenue, respectively. 1964 Nikes predecessor, Blue Ribbon Sports, is incorporated in Oregon. 1971 The Swoosh first appears on Nike shoes 1978 Tennis bad boy John McEnroe is signed by Nike to an endorsement contract. 1981 BRS, Inc. merges into Nike, Inc. on December 31, and the company officially becomes known as Nike, Inc. 1986 Corporate revenues surpass $1 billion for the first time.
  15. 15. 15 1989 Nike enters the European football market, signing a kit deal with Paris Saint- German .Corporate governanceCurrent members of the board of directors of Nike are: Mark Parker, Timothy D. Cook, Ralph D.DeNunzio, John G. Connors, Jill Ker Conway, Alan B. Graf, Douglas G. Houser, Jeanne P.Jackson, Philip Knight, Orin C. Smith, and John Thompson.Rivalry and competitionBecause Nike creates goods for a wide range of sports, they have competition from every sportsand sports fashion brand. Initially, Nike had no direct competitors because there was no singlebrand which could compete directly with Nikes range of sports and non-sports oriented gearuntil Reebok came along in the 1980s. Reebok now has merchandising contracts with with theNational Football League and the National Hockey League in the United States, and waspurchased in 2006 by Adidas.TrademarksThe legendary swoosh symbol, a Nike trademark, was designed by a graphic artist student atPortland State University named Carolyn Davidson for $35. She did, however, later receive Nikestock and a golden swoosh ring.
  16. 16. 16INTRODUCTION TO ADDIDASAdidas is a German sports apparel manufacturer, part of the Adidas Group, which is the secondlargest sportswear manufacturer worldwide. The company was named after its founder, Adolf(Ad) Dassel, who started producing shoes in the 1920s in Herzogenaurach near Nuremberg withthe help of his brother Rudolf Dossier who later formed rival shoe company PUMA AG. Itregistered as adidas AG on 18 August 1949 (with lower-case lettering). The companys clothingand shoe designs typically feature three parallel stripes, and this same motif is incorporated intoAdidass current official logo. The company revenue for 2005 was listed at 6.6 billion euro, orabout 8.4 billion U.S. dollars.Corporate historyThe Tapie affairAfter a period of serious trouble following the death of Adolf Dasslers son Horst Dassler in1987, the company was bought in 1990 by French industrialist Bernard Tapie, for 1.6 billionFrench francs (now €243.918 million), which Tapie borrowed. Tapie was at the time a famousspecialist of rescuing bankrupt companies, a business on which he built his fortune.Tapie decided to move production offshore to Asia. He also hired Madonna for promotion. In1992, Tapie was unable to pay the interest from his loan. He mandated the Crédit Lyonnais bankto sell Adidas, and the bank subsequently converted the outstanding debt owed into equity of theenterprise, which was unusual for then-current French banking practice. Apparently, the state-owned bank had tried to get Tapie out of dire financial straits as a personal favour to Tapie,reportedly because Tapie was a minister of Urban Affairs in the French government at the time.
  17. 17. 17Robert Louis-Dreyfus became the new CEO of the company. He is also the president of theOlympique de Marseille football team, a team Tapie owned until 1993. Tapie filed for personalbankruptcy in 1994. He was the object of several lawsuits, notably related to match fixing at thefootball club. He spent 6 months in La Santé prison in Paris in 1997 after being sentenced to 18.Post-Tapie eraFrom left to right: The classic trefoil, modern performance and sport style (fashion) logos usedby Adidas.In 2003, Adidas filed a lawsuit in British court challenging Fitness World Tradings use of a two-stripe motif similar to Adidass three stripes. The court ruled that despite the simplicity of themark, Fitness Worlds use was infringing because the public could establish a link between thatuse and Adidass mark.In September 2004, top English fashion designer Stella McCartney launched a joint-venture linewith Adidas, establishing a long-term partnership with the corporation. This line is a sportsperformance collection for women called "Adidas by Stella McCartney", and it has beencritically acclaimed.Also in 2005, on May 3, Adidas told the public that they sold their partner company SalomonGroup for €485 mn to Amer Sports of Finland.
  18. 18. 18CriticisIn April 2006, Adidas came under fire from Asian-American groups for releasing a limitededition Y1-HUF shoe that contained a typical early 1900s Asian caricature. Adidas responded bylabeling the criticisms as a serious misinterpretation, and refused to withdraw the line of shoes.The artist, Barry McGee, is himself half Chinese and had drawn the caricature intending it as ayounger self portrait. McGee thought it would be cool to have a picture of himself on a shoe.Other Adidas sponsorshipsAdidas are the apparel sponsors for two clubs in the Australian Football League - the AdelaideFootball Club and the Collingwood Football Club. The guernsey design for both of these clubs israther technologically advanced for AFL clubs, with the material designed to reduce sweat. Theguernseys do not feature the three-stripe design as such, although Adelaides jumper designfeatures three colors in repeated horizontal stripes, and Collingwoods design features three whiteverticle stripes on a black background."Impossible is nothing""Impossible is nothing" is the current mainstream marketing slogan for Adidas.
  19. 19. 19INTRODUCTION TO PUMAPUMA is a German-based shoe company that produces sportswear and specializes in makingathletic shoes. It employs nearly 8,000 people and its products reach as many as 80 countriesaround the world. PUMA sponsors many individual athletes, such as Olympic champion UsainBolt of Jamaica and also sponsors a large number of national and club teams in sports rangingfrom soccer to cricket.Puma, also known as Puma Aktiengesellscaft Rudolf Dassler Sport, is a German footwear,apparel, and accessories manufacturer. Puma has retailers, department stores, and boutiques inover 80 countries and has opened several Concept stores in metropolitan cities. The roots ofPuma brand stretch back to the mid 1920s when Adi and Rudolph registered their family shoeenterprise in Herzogenaurach, Germany, but after World War II, during which Rudi Dassler hadspent time in a POW camp, the Dassler brothers began a legendary feud, causing Rudolph toleave the company and found a rival company across town. Rudi Dassler named his companyPuma Aktiengesellscaft Rudolf Sport (Puma) while brother Adi incorporated as Adidas.In 1948, Puma released their first shoe, the PUMA Atom to the market and to the West Germanfootball team. By 1950 Puma had established export ties to the United States, and in 1958PUMAs signature formstripe was introduced. This would begin the intense battle between Pumaand Adidas to get their shoes onto the feet of world-class athletes that would span the nextseveral decades. More
  20. 20. 201969Joe Namath, quarterback for the New York Jets, goes to Super Bowl III wearing Puma shoes.1970Pele wins a third World Cup title, wearing the Puma King.1976Puma introduces its S.P.A. technology.1981Marcus Allen of the Oakland Raiders is one of many NFL stars to play in Puma shoes.1982Armin A. Dassler invents the Puma Duoflex sole.1986Puma goes public and company stock is offered on the Munich and Frankfurt stock exchanges.1989Rudi Dasslers sons sold Puma to the Cosa Lievermann Group who in turn sell the majority staketo the Aritmos Group of Sweden.1989Puma launches the "Trinomic" sport shoe system.1990Puma introduces a system for childrens shoes with a midsole window which allows growth to bemonitored.In 1993 Jochen Zeitz was appointed as CEO & Chairman of the Board and the German factorieswere closed. Over the next few years, Zeitz redefined Pumas focus on regaining control ofvarious markets. A high-power management team was recruited and a three year business planwas introduced. In Phase I and II, a solid financial foundation was established. After Phase I andII were completed, Puma had 1 billion Euros in sales and moved into Phase III ahead ofschedule. Phase IIIs goal was to explore the potential of Puma brand and generate profitablegrowth of the company.. A substantial amount of their profits is invested in relationships and
  21. 21. 21surroundings. Pumas major technological innovation came in 1996 in the formed of Puma Cell,a structural arrangement of hexagonal cells like a honeycomb in a beehive. Track champion Lynford Christie (Britain) was the first sponsored athlete to put the Puma Cell to the test duringtraining.Brand Strategy"To be the brand that mixes the influences of sports, lifestyle, and fashion."Brand Mission"To become the most desirable Sport lifestyle brand by fusing the creative influences from theworld of sport, lifestyle and fashion."Famous Puma ProductsPuma Roma, Puma Suede, Puma Sky II, Puma Basket, Puma Clyde, Puma Speed Cat, and PumaEasy Rider.Customer Satisfaction“Satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing aproduct’s perceived performance in relation to his or her expectation “As the definition makes it clear, satisfaction is a function of perceived performance andexpectations. If the performance falls short of the expectations of the customer, the customer isdissatisfied.If the performance exceeds the expectations, the customer is highly satisfied or delighted.Many companies are aiming for high satisfaction because customers who are just satisfied stillfind it easy to switch, when a better offer comes along. Those who are highly satisfied are muchless ready to switch. High satisfaction or delight creates an emotional affinity with the brain, notjust a rational preference. The result is high customer loyalty.In this highly competitive world customers plays a very important role. Thus, if a companywants to survive then it should look forward to the determinants of customer satisfaction.
  22. 22. 22Though it is a very subjective issue that differs from individual to individual yet, identifyingsome basic parameters of customer satisfaction is important.Satisfaction is a person’s feeling of pleasure and disappointment resulting from comparing aproduct’s perceived performance in relation to his or her expectations. It is only the customerdelight that marketer aims for.
  23. 23. 23Liberty Shoes Limited (LSL) is an Indian shoe company, based in mathura, UttarPradesh.Established in 1954, today the company through its six manufacturing units collectivelyproduces, 50,000 pairs of footwear a day, sold through 6,000 multi-brand outlets and 350exclusive showrooms, and has a presence in 25 countries, with 50 showrooms outsideIndia.Tejpal Singh became the CEO of LSL in 2012, the year when the company celebrated itsgolden jubilee, the company had two Executive Directors, Tejpa sigh and Bhavana Sharma .HistoryLiberty Shoes Ltd. was established on the 25th of December, 1954 in Mathura, Uttar Pradesh(India) .It was predominantly focused in the export of shoe uppers till the early 80s, when the Indiandomestic market started to show promise, that is when in 1982, the company set up a unit toexclusively manufacture footwear for the domestic market, at an investment of Rs 3 crores. Itssport shoes range manufactured using polyurethane technology, though eventually set aprecedent for the domestic market was initially considered a risky proposition as it was priced atRs 300 a pair, compared with conventional canvas shoes selling at Rs 50. However, by 2010Liberty had become a Rs 35-crore company.Force 10, Libertys first sub-brand, was launched in August 1990, a time when a casual footwearwave sweeping the Indian market. By 1994-95, Force 10 became Libertys flagship brand invalue, notching up sales of Rs 32 crore, it the coming years, it not only help the companyestablish its name the domestic footwear market, but also paved the way for nine other sub-brands and a firm foothold the mass family footwear segment, till now led by Bata, now Libertywas the countrys second largest footwear company after it.
  24. 24. 24The company saw major expansion in the 2000s, both in retail and manufacturing bases, leadingto a sharp growth, in the year 2002-03, the company posted a retail turnover of Rs 400 crore.Also in April 2003, the Liberty Group underwent an important restructuring and its productportfolio was also revamped. As a part of the restructuring process, the company split itsmanufacturing and retail business in January 2004, with Liberty Shoes as the holding companyfor its shoe business and a subsidiary Liberty Retail Revolution Ltd for its retail business, whichestablished a new retail channel through "Revolutions Stores", which were set up at in Mumbai,Kolkata, Hyderabad and Chennai. At the same time it ventured into high fashion, by tying upwith fashion designers including Rohit Bal, Rajesh Pratap Singh, Rina Dhaka, Rohit Gandhi,Ashish Soni and Suneet Verma to develop footwear to match their clothing linesLSL produces more than 50,000 pairs of footwear a day covering virtually every age group andincome category. Products are marketed across the globe through 150 distributors, 350 exclusiveshowrooms and over 6000 multi-brand outlets, and sold in thousands every day in more than 25countries. After 50 years of its existence, today Liberty produces footwear for the all age groups.Currently, LSL is headed by Mr. Adesh Gupta as its CEO. It is a part of the Liberty Groupwhich includes other associate companies - Liberty Retail Revolutions Limited and LibertyWhiteware.ManufacturingLibertys manufacturing base includes six facilities spread across the numerous states, two inmathura (Uttar pradesh) where its primary and the largest manufacturing units are situated,Paonta Sahib, (Himachal Pradesh) with two units and Roorkee (Uttarakhand). The company hasavoided locations in the conventional Indian shoe manufacturing locations such as Agra, Kanpur,Noida, Chennai etc.Brands FOR MEN: Coolers, Fortune, Force 10, Gliders and Windsor FOR WOMEN: Force 10, Gliders, Senorita and Tiptopp FOR KIDS: Footfun, Force 10, Gliders, Prefect SAFETY SHOES: Freedom, Warrior and Workman
  25. 25. 25 NIKE VS ADIDAS VS PUMAThe shoe and athletic apparel market is dominated by three major companies. Nike, Puma andAdidas feature premium athletic apparel designed to enhance the performance of athletes in allthe major sports. The companies battle each year for consumers and market share, as well asspend millions in research and development to better their products.Pro LevelNike, Puma and Adidas offer athletic apparel to professional athletics. All three companies areinvolved in shoe wars for the services of professional basketball players, which providemarketability and exposure to massive audiences. Basketball shoes comprise a significantpercentage of market share, and these companies will spare no expense to sign the latest andgreatest basketball star. The companies also supply pro football and baseball players with gear,along with a burgeoning golf division for Nike and Adidas.NikeNike is recognized internationally as a leading manufacturer of innovative footwear andperformance enhancing apparel. Phil Knight, Nikes founder and CEO, has been especiallysupportive of his alma mater, the University of Oregon. The Knights and Nike have initiatedseveral philanthropic initiatives to enhance the services, equipment and apparel provided toOregon student-athletes. This, in turn, has given Nike even greater visibility and exposure amonghigh level athletes. Oregons equipment is cutting edge, and its athletic teams constantly employtrend-setting designs and features.AdidasAdidas has long been considered an international brand but has made significant strides in theU.S. Their golf apparel division has enhanced its offerings, and now produces clothing, shoesand accessories for many touring professionals. This has seen a great trickle-down effect into theamateur game. Adidas has also signed major endorsement contracts with many U.S. colleges,including the University of Michigan and the University of Notre Dame, to play and promote thecompanys apparel.PumaPuma has struggled at different times with Nike and Adidas beginning to differentiatethemselves, but the company has made a push by focusing on its professional basketball, footballand hockey equipment. Puma hockey has several innovations that bolster its usage rate in theNational Hockey League and minor pro leagues, while Puma football is on a similar upswing.The NBA appeals to most sneaker consumers, and Puma has made a push in this area as well,with several shoes endorsed by the top level players.
  26. 26. 26Definition of Customer There are two distinct types of customers as the point of view of an organisation.i.e. External and internal.Internal customers are within the company-the colleagues working together for delivering a service or productfor the external customer.An external customer may be an individual or an enterprise that hires or purchases the product(s) or service(s)from another person or business in exchange of money. To capture customers, a business must try to find outwhat people want, how much and how often they will buy and how their post-purchase satisfaction will beensured. In this highly competitive world customers plays a very important role.Customer ReinforcementReinforcement is a term in behavior analysis for the process of increasing the rate or probabilityof a behavior (e.g. pulling a lever more frequently) by the delivery or emergence ofa stimulus (e.g. a candy) immediately or shortly after the response. Reinforcement increases thelikelihood of behavior such as a purchase being repeated.Customer satisfaction is at the heart of the selling process. One estimate is that it costs five timesas much to attract new customers as it does to keep an existing one. The relationship between thecustomer and the organization is, therefore, an important one.Building customer relationships can be seen as moving up a ladder. At the top rung of the ladderare your loyal customers.
  27. 27. 27 REINFORCEMENT POSITIVE NEGATIVEPositive Reinforcement is an increase in the future frequency of a behavior due to the addition ofa consequence immediately following a response. It is a pleasent or desired consequence for anyorganisation. Because reinforcement increases the likelihood bof behavior such as a purchasebeing repeated. I. Negative Reinforcement is an increase in the future frequency of a behavior when the consequence is the removal of an aversive ( negative) stimulus.
  28. 28. 28SWOT analysis of Indian footwear industrySTRENGTHS1.Existence of more than sufficient productive capacity in tanning.2.Easy availability of low cost of labour.3.Exposure to export markets.4Managements with business background become quality and environmentconscious.5 Presence of qualified leather technologists in the field.6. Comfortable availability of raw materials and other inputs. Massive institutional support fortechnical services, designing, manpower development and marketing.WEAKNESSES1.Low level of modernization and up gradation of technology, and the integration of developedtechnology is very slow.2.Low level of labour productivity due to inadequate formal training / unskilled labour.Horizontal growth of tanneries.3. Less number of organised product manufacturers.4.Lack of modern finishing facilities for leather. Highly unhygienic environment.5.Unawareness of international standards by many players as maximum number of leatherindustries are SMEs. Difficulties in accessing to testing, designing and technicalservices. 6. Environmental problems. Non availability of quality footwear components Lack of freshinvestment in the sector.7. Uneconomical size of manufacturing units.
  29. 29. 298.Competition among units vying for export orders leading toundercutting. Little brand image.9.Poor labour productivity.10.Lack of awareness about consistent inplant training and retraining- Inconsistent quality high rejectionrate Low machine and material productivity.11. Lack of quality job work units Delayeddeliveries and Weak support infra- structure for exportsOPPORTUNITIES1.Abundant scope to supply finished leather to multinationals setting upshop in India.2.Growing fashion consciousness globally.3.Use of information technology and decision support software to helpeliminate the length of the production cycle for different products4.Product diversification - There is lot of scope for diversificationinto other products, namely, leather garments, goods etc.5.Growing international and domestic markets.6.Exposure to newer markets through Fairs/ BSMs7.Retain customers through quality supplies and timely deliveries8.Aim to present the customer with new designs, infrastructure, country& company profiles.9,Use of modern technology10.Exhibit strengths in manufacturing, for example, strengths in classicshoe manufacturing, hand crafting etc.11.De-reservation of the footwear sector.
  30. 30. 30THREATS1.Entry of multinationals in domestic market.2.Stiff competition from other countries.(The performance of globalcompetitors in leather and leather products indicates that there areat least 5 countries viz, China, Indonesia, Thailand, Vietnam andBrazil, which are more competitive than India.)3.Non- tariff barriers - Developing countries are resorting to more andmore non – tariff barriers indirectly.4. Improving quality to adapt the stricter international standards.5. Fast changing fashion trends are difficult to adapt for the Indian
  31. 31. 31RESEARCH METHODOLOGYResearch DesignA research design is the arrangement of conditions for collection and analysis of data in amanner that aims to combine relevance to the research purpose with economy in procedureResearch Design is the conceptual structure within which research is conducted. It is the overalloperational pattern or framework of the project that stipulates what information is to be collectedfrom which sources by which procedure. TYPES OF RESEARCH DESIGN EXPLORATORY DESCRIPTIVE EXPERIMENTAL & RESEARCH RESEARCH DIAGNOSTIC DESIGN DESIGN RESEARCH DESIGN1. Exploratory Research :- To gain familiarity with a phenomena or to achieve new in sightinto it. Studies with this object in view are termed as exploratory or formularize researchstudies.
  32. 32. 322. Descriptive Research: To portray accurately the characteristics of particular individual ,situation of a group. Studies with this object are view is known as descriptive research studies3. Experimental Research: To determine the frequently with which something occur or with itis associate with sometime else. Studies with this object in view are known as diagnosticresearch studies.Considering the importance of decision areas, it was decided to undertake an exploratory survey.Exploratory research is concerned with discovering the general nature of the problem and thevariables that relates to itOBJECTIVES OF THE STUDYIn this era of cut throat competition, no company can even survive in the market place withoutknowing its and its products strengths and weaknesses. It has to fortify itself against threats fromthe environment and exploit its strengths or increase profits. And in order to do so, the companyhas to conduct regular surveys to know the customer’s opinions, needs, and preferencesPrimary Objective: To find out the decision making process of individual while purchasing sports shoe. To find out the attributes which affect the purchasing decision of individual. To find out repetition level of customer after the purchase of the brand. To find out the brand loyalty of customer towards their brand.Secondary Objectives: To understand the Consumer Awareness regarding different brands of sports shoe. To understand the Consumer’s Sphere of Knowledge To find out the buying behavior of customer To find out the consideration which one take in to mind while purchasing a product. To find out media which influence the customer decision process.
  33. 33. 33Type of the studyThe present study is Exploratory in nature, as it seeks to discover ideas and insight to bring outnew relationship. Research design is flexible enough to provide opportunity for consideringdifferent aspects of problem under study.DATA COLLECTIONAfter the research problem has been defined and the research design has been chalked out, thetask of data collection begins. The data can be collected mainly through primary sources, but itwas supplement with secondary data.Primary data collection:Primary data is the data which is collected through observation or direct communication with therespondent in one form or another. These are several methods for primary data collection likeObservation Method, Interview Method, through schedules, through questionnaires and so on.Secondary data collection methods:Secondary data is collected through Magazines Journals Newspapers WebsitesSAMPLING DESIGNIt includes size of sample & the technique that we used for selecting the different items from thesample. A sampling design is a definite plan for obtaining a sample from a given population. Itrefers to the technique that the researcher adopts in selecting items for the sample.
  34. 34. 34It should be ensured in the sampling process itself that the sample selected is representative ofthe population.Sample sizeBy sample size we mean that the number of people to be selected from the population to make asample. A sample size should be sufficient enough that can serve our purpose.It should have Flexibility, and Reliability, Availability.My sample size is of 100 people of Ambala those are using the Sports shoes.Sample areaSample area is individual customer of Ambala whose Post purchase satisfaction has to beexamined.LIMITATIONS OF THE STUDYAlthough sincere efforts were made to collect maximum and authentic informationfrom the respondents, even then this report is subject to limitations and problems.There were following constraints of the study which can be explained as:-Time availability:- The time of research was short, due to which many fact remaineduntouched.Small area: The Area undertaken in research was Ambala only. But to do a complete research awide area is required, so the area is also a constraint of the study.Sample Size : The secondary limitation was the small size of customer so due to small samplesout of big universe the results may not be completely correctBiased responses:- While collecting data some of the consumers did not fill the questionnaireas their true behavior. This was also be a constraint of the study.
  35. 35. 35Economic Constraints:- Resources available with me were limited in respect of time andmonetary terms.
  36. 36. 36DATA ANALYSIS AND INTERPRETATIONCONSUMER PROFILEQ.1 Name _________________________________________________ Sex______________________________________________Age No of respondent18-25 3426-40 2841-55 2056 and above 18 40 35 30 25 20 Series 1 15 10 5 0 18-25 26-40 41-55 56 and aboveINTERPRETATIONFrom the above table it is found that out of 100 respondents 34 are between age of 18-25, 28respondents are 26-40 age, 20 respondents are 41-55 and 10 respondent are above 56
  37. 37. 37Q.2 what is your occupation?Occupation No of respondentBusinessman 20Professional 16Service man 6Agriculturist 10Any other 48 60 50 40 30 Series 1 20 10 0 businessman professional agriculturist service person any otherINTERPRETATIONFrom the above table it is found that out of 100 respondents 20 are businessman,16 areprofessionals,10 are agriculturist,6 are service person and remainins are related to others kind ofbusiness.
  38. 38. 38Q.3 What is your annual Income?Option No of respondentBelow 50000 050000-100000 6100000-150000 24150000-200000 30Above 200000 40 45 40 35 30 25 20 Series 1 15 10 5 0 below50000 50000 to 100000 100000 to 150000 above200000Interpretation:From the above table it is prove that 6 respondents are having the income of between 50000-100000,24 respondents are having the income of between 100000-150000,30 respondents arehaving the income of above 200000.and no one is below the income of 50000 rs per annum
  39. 39. 39Q.4 which brand of sports shoes you own?Brand name No. of respodentNike 28Addidas 34Puma 18Other 20 40 35 34 30 28 25 20 Series 1 20 18 Column1 15 Column2 10 5 0 nike adidas puma otherInterpretation:From the above table it is found that 28 respondent choose shoe of nike brand, 20 respondentchoose the shoe of puma,18 respondent choose the other company shoe but most of the customerare more loyal to the shoe of addidas
  40. 40. 40Q.5 What is the most important factor while you purchase sports shoes?Factors No of respondentPrice 24Brand name 20Availability 32Design 15Scheme 9 Factors 35 32 30 25 24 20 20 15 15 No. of respodent 9 10 5 0 price brand name availability design schemeInterpretation:10 respondent prefer price ,14 respondent prefer brand name,8 respondent prefer avilability and10 respondent prefer design,8 respondent prefer scheme.
  41. 41. 41Q.6 Which of the following members play key role in decision making of purchase ofsports shoes?Factors No of respondentFriends 32Family 25Coach 20Salesperson 30Other 12 35 32 30 30 25 25 20 20 15 Series 1 12 10 5 0 friends family caoach salesperson otherINTERPRETATIONKey role in decision making-32 influence by friends,20 coach,30 sales person and 12 others.
  42. 42. 42Q.7 Which of the following influence you in buying a particular brand of sports shoes ?Factors No of respondentCoupon 36Discount 20Free gift 8Warranty 38Other 6 40 38 36 35 30 25 20 20 Series 1 15 10 8 6 5 0 coupon discount free gift warranty otherINTERPRETATIONInfluence by other persons in buying sport shoes-36 coupon, 20 discount, 8freegift, 38 warrantyand 6 others.
  43. 43. 43Q8. To what extent price tag influences your purchase decision of sports shoes?Factors No of respondentFully satisfy 36Satisfied 20Dissatisfied 16Fully dissatisfied 12Neutral 16 40 35 30 25 20 Series 1 15 10 5 0 fully satisfy satisfied neutral dissatisfied fully dissatisfiedInterpretation-The price tag influence purchase decision 36respondent says fully satisfied, 20says satisfied, 16 neutral,16 dissatisfied and12 fully dissatisfied.
  44. 44. 44Q.9 Are you satisfied with comfort level of your sports shoes?Factors No of respondentFully satisfied 40Satisfied 36Dissatisfied 8Full dissatisfied 4Neutral 12 45 40 35 30 25 20 Series 1 15 10 5 0 fully satisfied satisfied neutral dissatisfied fully dissatisfiedInterpretation-comfort level of sports shoes 40 respondent says fully satisfied, 36 satisfied, 12neutral, 8 dissatisfied and 4 fully dissatisfied.
  45. 45. 45Q.10 What factor may influence you to switch over to some other brand?Factors No of respondentPrice 32Brand name 36Reference group 20Promotional scheme 12 40 36 35 32 30 25 20 20 Series 1 15 12 10 5 0 price brand name reference group promotional schemesInterpretation-factor influence switch over other brand 32 respondents says price, 36 says brandname, 20 reference group, 12 promotional schemes.
  46. 46. 46Q.11 how is your post purchase experience with your sports shoes?Factors No of respondentExcellent 28Very good 32Good 24Average 10Poor 6 35 32 30 28 25 24 20 15 Series 1 10 10 6 5 0 excellent very good good average poorInterpretation-post purchase experience with sports shoes 28 respondent says excellent, 32 verygood, 24 good, 10 average and 6 poor.
  47. 47. 47Q.12 you prefer to purchase sports shoes onFactors No of respondentSale discount period 54Normal period 46 54 52 50 48 46 44 42 sales/discount normal period periodInterpretation-prefer purchase sports shoes 54 respondents say discount period,46 on normalperiod
  48. 48. 48Q.13 Are you satisfied with the durability of your shoes?Factors No of respondentYes 74No 26 80 74 70 60 50 40 Column1 30 20 10 0 yes noInterpretation-satisfaction with durability 74 says yes, 26 says no.
  49. 49. 49Q.14 which source of Advertisement is influence to buy a particular brand of sports shoes?Media No of respondentMagazine 14Newspaper 10Television 32Internet 12Other 32 35 30 25 20 15 Series 1 10 5 0 magazine newspaper television internet otherInterpretation-the advertisement influence 14 respondent says magazine, 10 news paper, 32television, 12 internet, 32 others.
  50. 50. 50Q.15 would you recommend your sports shoes to others?Factors No of respondentDefinitely yes 48Probably yes 34Definitely no 4Probably no 14 60 50 40 30 20 10 0 definitly yes probably yes definitely no probably noInterpretation-82 respondent says they suggest shoes to others, 18 says no.
  51. 51. 51Q.16 would you like to give any suggestion for the improvement of your preferred sportsshoesOption No of respondentYes 70%No 30%70%of the respondent were interested in giving suggestion regarding their preferred sports shoeand 30% of the respondents were not interested.
  52. 52. 52Q. 17 if yes than what would you like to change in the preferred shoe?Option No of respondentQuality 24Design 12Color 10Price 24 25 20 15 24 24 Series 1 10 12 10 5 0 Quality Design Colour PriceInterpretation From the above diagram it is found that 24 out of 70 people are want to change inquality, 12 want to change in design of the shoes, 10 want to change in color of the shoes andremaining want to change in price of the preferred shoe.
  53. 53. 53Q18.Give the rank to the factors according to their preference while you selecting the shoe?Particulars No of respondentColor 30Design 40Price 10Brand 20 No of respodent No of respodent colour Design Price BrandINTERPRATATION according to this table 30% select color preference 40% Designpreference is their 10% for price and 20% for band.
  54. 54. 54Q19.Do you think India have a great potential in the shoe market?Particulars No of respondentsYes 88%No 12% No of respodent 88% 90% 80% 70% 60% 50% No of respodent 40% 30% 12% 20% 10% 0% Yes NoInterpretationFrom the above diagram 88 percent people think that india have great potential in the shoemarket and remaining are not in favors of potential of shoe market in india
  55. 55. 55Q20.Do you think that Indian footwear industry have a need of R&D programs?Particulars No of respondentYes 79%No 21% No of respodent 79% 80% 60% 40% 21% No of respodent 20% 0% No of respodent Yes NoInterpretationFrom the above diagram 79 percent people are think that Indian footwear industry have a need ofr &d programs in the development of the whole market. And remaining are not in favour ofR&D.
  56. 56. 56 FINDINGS 1. Mostly people are influenced by television to buy branded shoe. 2. In India first preference of the customers is price of the shoes. 3. India have a great potential in the footwear industry but India are not fully utilize their potential 4. Customer want to improve in price and quality of shoe in India 5. Most of the customer are not fully satisfied with their existing shoe and company should provide the special offers to the customers for increasing their goodwill. 6. The competition is very intense and the increase of the research development and the advertising can be very highly expensive. 7. In the survey it has been found that addidas is the market leader. 8. Businessman, serviceman and professionals prefer to wear formal shoes because of status and students like to wear only sports and casual branded shoes. 9. Some customers are not aware about the existing shoe brand so companies should expense on marketing strategy. 10. No of outlet of the famous brands are limited so companies should expend the number of outlet. 11. The athletic footwear industry is a strong, market driven industry.
  57. 57. 57 CONCLUSION NIKE has been the major competitor for ADDIDAS. The new stuff of the adidas is attracting the consumers more which might led adidas at the top spot in the pack in coming financial year. The preference towards ADDIDAS gas decreased over the last few years. Only 8% of the market is coverd by adidas which is miserable as per the brands standards There is restrictive manufacturing in India of branded products and the branded products are quite expensive as compared to European products. India has huge potential in the footwear industry. Companies should expand their outlets for making the goodwill. And Indian customers are more price sensitive rather than other countries so compnies should provide the less price shoe with high quality if they want to increase their productivity. So in the end we can say footwear industry is on growing trends.
  58. 58. 58 SUGGESTIONS 1. Department stores are the prime sales and marketing channel for branded shoes. In addition, store decorations 2. Product displays should be designed to create a strong first impression. 3. Seasonal promotion campaigns, like special discounts and advertisements, could be employed. 4. New lines of collections should be introduced for festivals. 5. The prices of branded shoes must be reduced to increase sales. BibliographyBOOKS: 1. J. Rabolt Nancy, R.Solomon Michael. “Consumer Behaviour In Fashion 2. Sekaren Uma14, “Research Methods For Business” 3. Kothari C.R. “Research Methodology Methods and Techniques” 4. Jain T.R ., “Statistics for MBA” 5. Jain P.C, Bhatt Monika “Consumer Behaviour” 6. Assael Henry, “Consumer Behaviour-A Strategic Approach (2005 Indian Edition)”
  59. 59. 59 7. I Hawkins Del, J Best Roger, Amit Mookerjee, “Consumer Behaviour-Building Marketing Strategy.” 8. David L. Loudon And Abert J. Della Bitta, “Consumer Behaviour And Concepts And Applications” 9. Kotler Philip11, “Marketing Management” 10. Evans Martin, Jamal Ahmad, Foxall Gordan,“Consumer Behaviour” 11. Kotler Philip, Keller Lane Kevin, Koshy Abraham and Jha mithileshwar),“Marketing Management” 12. Leon G. Schiff man and Lesli Lazar kanauk“Consumer Behaviour” 13. Woodruffe Helen,“ Service Marketing” 14. K.Rama Mohan Rao,“Service Marketing” 15. Kotler Philip, Keller Lane Kevin, Koshy Abraham and Jha mithileshwar),“Marketing Management”Websites 16. satisfaction-in-industrial-distribution-channels.html 17. htpp://www.Textile%20and%20apparel%20industry%20sees%20three- fold%20growth%20%20Apparel%20and%20textile%20news%20&%20analysis.htm 18. 19.
  60. 60. 60 20. 21. 22. 23. _cost 24. 25.
  61. 61. 61 ANNEXURE
  62. 62. 62 QuestionnaireQ.1 Name _________________________________________________ Sex______________________________________________ Age li) 18-25 ii) 26-40 iii) 41-55 iv) 56 and aboveQ.2 Occupation i) Businessmen ii) Professional iii) Service Person iv) Agriculturist v) Any otherQ.3 Income (Yearly Family income in Rs.) i) Below 50000 ii) 50001 to 100000 iii) 100001 to 150000 iv) 150001to 200000 v) Above 200000
  63. 63. 63Q.4 Which brand of sports shoes you own? Nike Adidas puma OtherQ.5 What is the most important factor you consider to purchase sports shoes? Price Brand name Availability Design SchemeQ.6 Which of the following members play key role in decision making of purchase of sportsshoes? Friends Coach Salesperson OtherQ.7 Which of the following influence you in buying a particular brand of sports shoes ? Discount Free gift Warranty OtherQ.8 Rank the following factors according to their influence on your purchase of sportsshoes? (Rank-1 = Highest influence) Price Brand name Availability Design SchemeQ.9. To what extent price tag influences your purchase decision of sports shoes?
  64. 64. 64 Fully satisfy Satisfied Neutral Dissatisfied Fully dissatisfiedQ.10 Are you satisfied with comfort level of your sports shoes? Fully satisfy Satisfied Neutral Dissatisfied Fully dissatisfiedQ.11 What factor may influence you to switch over to some other brand? Price Brand name Reference group Promotional schemesQ.12 How is your post purchase experience with your sports shoes? Excellent Very good Good Average PoorQ.13 You prefer to purchase sports shoes on Sale/ discount period Normal periodQ.14 Are you satisfied with the durability of your shoes? Yes NoQ.15 Advertisement in which of the following influence you most to buy a particular brand ofsports shoes? Magazine Newspaper Television Internet OtherQ.16 Would you recommend your sports shoes to others? Definitely yes probably yes Definitely no Probably no
  65. 65. 65