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Impact of Changing Business Dynamics to Domestic Market. Basics. What business are we in?. Who is our target customer? – Age group, area, socio-economic class etc What are we selling? - product, benefit –real/psychological, service, solution, or combination of the above?
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What business are we in? • Who is our target customer? – Age group, area, socio-economic class etc • What are we selling? - product, benefit –real/psychological, service, solution, or combination of the above? • All subsequent slides need to be analyzed considering above parameters.
World is becoming one market. • Political factors – bilateral trade agreements, custom duties, exchange rate , balance of trade compulsions post economic crisis etc • Consumer awareness through media, internet, telecom revolution, travel etc • Technology competes across border. • Competition need not be from same product category but diverse universal product basket. Curtain should compete with all window covering products or Bath-mat with other floor covering products.
Commodity Boom • Prices fluctuating and mostly going up across most commodities. • Time for reengineering products to ensure that popular price points are adhered to. • Look at alternative technology, supplier, fiber and so on. • ASP may go up and quantity may come down • Composition of share of wallet may change.
Changing Face of India • Macro factors - growth rate of GDP, rise in Income level, housing boom, retail revolution • Infrastructure – • Transport – road, railway, air • Banking, communication • Legal – GST – making India as one country Despite all the above, Unity in Diversity has not Changed.
Consumer has more money. • Consumer was always rich and now getting richer at all income levels. • Consumer has more money to spend to upgrade lifestyle if marketer is willing. • Consumer durables have garnered big money from consumers. It is time for textile companies to create value and garner big money.
India is young country. • India is young country and young customers are expected to be different. • Brand conscious • Lalitaji does not work any more. Surf using “Daag Achche Hai” • Informed customer - Internet and social communities - the way consumer communicate to each other has changed
Housing Boom • New homes is big occasion and big reason to buy all new home products. • Smaller homes metro – products for small home • Nuclear family
Changing Face of Retail • Modern trade: • From Chandni Chowk to Select Saket Mall • From street shopping to air-conditioned luxury centers • Week-end family outing destination • Organized Retail expected to be 15% by 2013. Misleading as it is already higher in lifestyle category in big metro and mini-metro markets.
Changing Face of organized retailers • After economic crisis, consolidation, all retailers are back on aggressive growth path. Expansion also in B and C category towns. Retailers are achieving critical scale. Private labels and imports becoming more viable. • During retail evolution process– • MRP going up • cost to MRP multiple becoming favorable. • Consumer willing to buy at higher prices. • Display will generate new demand as well as convert latent demand in actual demand.
Value Segment • Value retailing was cheap poor quality products at one time. • Now, Value retailers are upgrading products. • Many value retailers offer lifestyle experience and also sell same products that premium stores sell. • Premium – Department store and Hyper – value are definition of text-books. Consumer may not follow the same. • Value need to be seen by benchmark of Indian customers and not by Western markets.
Home Retail • Increase in space by leading players – Home Center, Home Stop, @home, Home town • Other home retailers on block – Evok, Reliance Living, Houseful, Home Store etc. • Soft furnishing – one of the most profitable area for home retailers – advantage – textile -Other product not easy to get higher price and margin. • One of the large retail group – Soft furnishing group beat apparel for 12 weeks continuously and they changed plans for category.
Unconventional Channel of Sales • TV Shopping – • Product presentation luxury • 70% sales coming from non-metro towns. Latent demand and underserved. • Internet
Marketers/Retailers • Create new demand for product categories • Watch your competition and respond suitably.
Targeting the youth • Major chunk of Indian population is young • Sports is big thing. • Foot-ball becoming extremely popular with premium youth customers. Foot-ball is cool. • The biggest sporting event - FIFA tournament in 2010 • Introduced product at Rs. 1999/- single bed sheet set
Cashing on Football mania • Typical display
Trousseau • Portico had introduced wedding collection of silk yarn dyed jacquard bedding of 13 piece set at MRP Rs.20000/- • Designs from exporter who sold same products to leading brands of Italy • Did not do well and difficult to sell at even Rs. 10000/-
Marigold- The Wedding collection • A proper wedding gifting solution • A noble idea of reusable packaging • Huge expenditure in weddings
Marketing Initiative-Marigold collection • Print ads- Newspaper and Magazines • Ad in Matrimonial classified(Targeting the right customers) • Contest on Internet • Shaadi.com • Bharatmatrimony.com
Packaging • Plastic was becoming expensive. • Eco movement becoming bigger. • Lot of wastage of small bits at stitching plant. • Modern retail did not require product to be packed in plastic.
Creative Portico (India) Pvt. Ltd. Eco-Friendly Cushion Packaging
Result • Solution to make cushion cover from waste – • Saving of cost • More eco friendly • More value to consumer • Consumer can experience look and feel of product better and so on. • Got the award for “Innovation in Packaging” by Du Pont, USA and “India Star award” for packaging.
You are most welcome to give me feed-back now or send to rajiv@porticoindia.com or rajivmerchant@hotmail.com
