Apex Final 2

Dealing With Competition In Readymade Wear Industry

Table of Contents

Executive Summary.............................................................................................................7

Men’s Wear.................................................................................................................8Madura Garments........................................................................................................8Strategies for Market Leader.......................................................................................8

1. Introduction..............................................................................................................10

1.1 Changing Consumer perceptions......................................................................10

1.2 RTW Revolution.................................................................................................10

1.3 The Branded Wear Market................................................................................11

2. Porter’s Model.........................................................................................................12

2.1 Segment rivalry..................................................................................................13

2.2 Threat of new entrants.......................................................................................13

2.3 Buyer power.......................................................................................................14

2.4 Threat of substitutes...........................................................................................14

2.5 Supplier power...................................................................................................14

3. Industry Concept of Competition...........................................................................15

3.1 Number of Sellers and degree of Differentiation...............................................15Pre 90s.......................................................................................................................15Post 90s......................................................................................................................15

3.2 Entry, Mobility and Exit Barriers......................................................................15Entry Barriers.............................................................................................................15Mobility Barriers:......................................................................................................16Exit barriers...............................................................................................................17

3.3 Cost Structure....................................................................................................18

3.4 Degree of Vertical Integration...........................................................................19Backward Integration.................................................................................................19Forward Integration...................................................................................................19Outsourcing................................................................................................................19

3.5 Degree of Globalization....................................................................................20

4. Market Concept of Competition.............................................................................21

Basic need..................................................................................................................21Secondary need..........................................................................................................21

5. Segmentation of Readymade Wear Market..........................................................22

5.1 Women’s Wear...................................................................................................22

Marketing Management Application Exercise2


Size of Market............................................................................................................22Problems associated with women’s wear..................................................................22Factors influencing buying behavior of women........................................................22Market Segments.......................................................................................................23Perceptual Map of Women’s Wear5.1.1 Major Players in Women’s Wear Market

255.1.1 Major Players in Women’s Wear Market..................................................265.1.1 Major Players in Women’s Wear Market..................................................27

5.2 Kid’s Wear.........................................................................................................28

5.3 Men’s Wear........................................................................................................31Size of Market............................................................................................................31

Perceptual Map of Men’s Wear6. Overview of major players in men’s wear........33

6. Overview of major players in men’s wear.............................................................34

6.1 Madura Garments..............................................................................................35Company Growth.......................................................................................................35Brands of Madura Garments......................................................................................35Some of the other brands of Madura Garments are...................................................39Current Scenario........................................................................................................39

6.2 Arvind Mills.......................................................................................................40Brands of Arvind Mills..............................................................................................40History.......................................................................................................................411980-1993: Launch of Flying Machine –Market Broadening...................................421993-1997: Launch of Arrow - Frontal Attack..........................................................421997-2002..................................................................................................................42Competitive Position: Favorable...............................................................................436.2.1 Market Challenger Strategies of Arvind Mills vis a vis Arrow.................43

6.3 Raymonds...........................................................................................................46Brands of Raymonds..................................................................................................46History.......................................................................................................................46Competitive Position: Favorable...............................................................................46Reaction pattern: Tiger Competitor...........................................................................47Entry Level Strategies................................................................................................47Marketing strategies adopted by Raymond’s............................................................48Challenges..................................................................................................................48Marketing Research results by Lintas........................................................................49

6.4 Indus League......................................................................................................51History.......................................................................................................................51Salient Features..........................................................................................................51Brands........................................................................................................................51Competitive Position: Favorable...............................................................................52Company’s strategies.................................................................................................52The future...................................................................................................................55



7. Strategies of Madura Garments.............................................................................56

7.1 Launch and Entry Strategy................................................................................57Pre 1989.....................................................................................................................571989 – mid 90s: Market Challenger..........................................................................57Mid-90s onwards: Market Leader.............................................................................57

7.2 Emotional Positioning Strategy.........................................................................59

7.3 Retail Strategy...................................................................................................60

7.4. Operational Strategies.......................................................................................61

7.5 Strategy framework for a Market Leader..........................................................62

7.6 Future Strategies for Madura Garments...........................................................667.6.1 Analyzing Current Position.......................................................................667.6.2 Choice of Target market............................................................................677.6.3 Strategies for new market entry.................................................................68

8. Unorganized market................................................................................................76

8.1 How they bleed the organized sector?...............................................................76

8.2 Strategies to handle the unorganized sector:....................................................77Presently followed strategies.....................................................................................77Suggested strategies...................................................................................................77

Appendix 1: Segmentation in Global Apparel Market................................................78

Appendix 2: Timeline of major brands.........................................................................78

Appendix 2: Timeline of major brands.........................................................................79

Appendix 3: Levels of Competition................................................................................82

Appendix 4: Results of ORG MARG Survey................................................................82

Appendix 4: Results of ORG MARG Survey................................................................83

Branded Womens Wear.............................................................................................83

Appendix 5: Untapped Opportunities...........................................................................86

Saris...........................................................................................................................86Salwar Kameez..........................................................................................................86Maternity wears........................................................................................................86Lingerie and Intimate Clothing..................................................................................86Children’s Wear.........................................................................................................87School uniforms.........................................................................................................87Infant Clothing...........................................................................................................87

Bibliography.....................................................................................................................89



WebLinks.......................................................................................................................89



Executive Summary

Indian apparel industry is estimated to be worth over Rs 43,000 crores. The ready to wear

segment as a subset of the whole industry is pegged at 22%. The branded segment within

this ready to wear industry holds a meager 20% market, with the majority 80%

dominated by the unorganized sector. Readymade garments are expected to fetch Rs

30,000 crores during 2001-2002.

Porter’s analysis of the industry reveals that there is very intense rivalry in the

industry; buyers are in a strong bargaining position whereas the suppliers are not. The

threat from new entrants is high but the threat from substitutes is considerably low.

Pre 90s: In the pre-1990 era, the ready-to-wear category was not evolved and people

preferred to buy cloth and have it stitched, by tailors, according to customized fittings.

Few textile giants like Raymonds, Bombay Dyeing, S Kumar’s, Mafatlal etc were the

main industry competitors in this period.

In the late 80s, the old economy giants sensed a change in consumer aspirations

and made a drift towards the readymade wear segment. Raymonds launched Park Avenue

and Bombay Dyeing came out with Vivaldi. In 1989, Madura Garments became the first

company to bring in a foreign brand, Louis Philippe, into the Indian market.

The 90s: With liberalization and improved standards of living, this period saw the

emergence of a large number of brands in the ready-to-wear category. New market

leaders like Madura Garments and Arvind Mills cashed on the changed consumer psyche.

In India, the readymade wear market is highly fragmented due to the presence of a large

number of brands and a huge unorganized market. The current analysis is based on the

segmentation of the market into 3 categories viz. Women’s, Kid’s and Men’s wear. The

men’s wear market has been dealt with in details for the purpose of competitive strategy

analysis.



Men’s Wear

The total men’s wear market in India is pegged at Rs.19, 800 crore. It contributes a little

over 46% of the total apparel market. Out of this, men’s ready to wear clothing

constitutes approximately Rs. 11, 000 crores. The branded segment contributes Rs. 5, 300

crores. The growth rate of this segment for the year 2000-01 was 21.7%.

Numerous brands have come into this segment leading to intense competition and

a lot of cluttering. For the purpose of analysis, the men’s wear market has been

segmented mainly into 3 categories viz. formals, semi formals and casuals. These are

further sub divided on the basis of their perception as premium, mid priced and economy.

The major players in this category are Madura Garments, Arvind Mills,

Raymonds and Indus League. There are also a large number of players with a limited

range of apparel like Zodiac, Color Plus, Benetton etc. The competitive strategies

employed by Arvind Mills, Raymonds, Indus League have been discussed in the report.

Madura Garments

Madura Garments is presently the overall Market Leader in the branded wear market

with leading brands like Louis Philippe, Van Huesen, Allen Solly, Peter England,

Elements, San Frisco and Byford. Its major competitors in the premium formal shirt

category are Arrow (Arvind Mills), Zodiac, Park Avenue (Raymonds) and Givo.

The strategies employed by Madura Garments, which enabled it to reach the

market leader position have been analyzed from various perspectives. The launch and

positioning strategies of all its brands along with the unique emotional aspects that each

brand touches upon has been studied in detail.

Strategies for Market Leader

Based on the strategies employed by Madura Garments and other brands, a general

framework of the strategies applicable to a market leader has been arrived upon. The

appropriateness of the strategies for the market leader and challenger are evaluated

depending on the following parameters:



Primary objective of the firm.

Market size and its customer’s characteristics.

Number and strength of competitors in the market.

Firm’s own characteristics, resources and competencies.

Future strategies for Madura Garments

Though Madura Garments is the overall market leader in the readymade wear industry, it

is a challenger in some segments. The future growth strategies in these segments as well

as the new markets, which have good growth potential, have been chalked out. The

parameters based on which these strategies are determined remain the same as described

above. The potential for expansion in the economy segment has also been analyzed with

reference to the strong presence of unorganized sector.



1. Introduction

The total Indian textile market encompassing fabric manufacture and ready made

clothing is estimated to be Rs. 87,000 crores. The ready to wear industry as a subset of

the whole textile industry is pegged at 22% of the total industry size. The branded

segment within this ready to wear industry holds a meager 20% market share. The current

market share of branded apparel, although currently very low, is now picking up pace and

growing at around 10 – 15 % per year.

The apparel industry is one of India's largest foreign exchange earners, accounting

for nearly 16% of the country's total exports. The Indian apparel industry is dominated by

sub-contractors and consists mainly of small units of 50 to 60 machines. The supply base

is medium quality. It has been estimated that India has approximately 30,000 readymade

garment-manufacturing units and around 3 million people are working for the industry.

1.1 Changing Consumer perceptions

The consumer today wants much more than just a garment. Today he looks for a wider,

complete range coupled with round the clock availability. Price, quality and perceived

value are becoming increasingly important to consumers. If these are not carefully

balanced, loyalty to the store or a brand quickly diminishes. The consumer wants new

products at shorter intervals , shopping ambience, faster service and above all

convenience.

1.2 RTW Revolution

Traditionally, Indians preferred custom-made clothing and the concept of ready-to-wear

is a relatively recent one. The customized tailoring outfits have always been a major

source of clothing for the domestic market. In the past, the customized tailoring units

were localized to the township or city that they were located in and catered exclusively to

domestic demand. Consumer awareness of styling issues and the convenience afforded by

ready-to-wear helped the RMG industry make small inroads into the domestic market in



the 80s. The growth of the RMG industry in subsequent years was fueled by a growing

share of younger consumers in the spending population, who are most open to converting

to ready-to-wear. Increasing exposure to various media also provided an impetus in terms

of greater access to fashion trends from outside the country. At the manufacturing end,

improvements in the availability and quality of fabrics for apparel assisted in catering to

the growing demand.

1.3 The Branded Wear Market

The branded wear market has shown a substantial growth (about 20percent per annum) in

recent times and is expected to generate a revenue of more than Rs. 9000 crore in this

fiscal,( about 30 percent of the total ready-made market).



2. Porter’s Model


Buyers

Price conscious marketRelatively undifferentiated productHighly involved consumerCustomer responds quickly to purchase convenience

HIGH BARGAINING POWER OF BUYERS

Substitutes

Ready to Stitch for primary needs

Accessories for secondary needs

LOW THREAT OF SUBSTITUTES

Industry Competitors

Presence of large number of brands in each segmentFrequent price and Advertising warsLarge unorganized sector

HIGH INTENSITY OF RIVALRY

Suppliers

Switching costs of suppliers and firms in the industry is lowPossibility of backward integration

LOW BARGAINING POWER OF SUPPLIERS

New Entrants

Brand recognition essentialExtensive distribution neededHuge size of market with evident gapsLiberalization and multi-fiber agreement

HIGH THREAT OF ENTRANTS


2.1 Segment rivalry

The ready made industry frequently witnesses price and advertising wars by all the

companies in order to gain a higher market share. The garment industry is characterized

by high profit margins. The market as such is highly segmented and there is an existence

of large number of brands in each segment. Each company is facing intense competition

from its rivals present in the segment. Adding on, continuous modifications and

innovations are evident in the trends and fashion perspective and all companies are

fighting hard to keep up with the pace. This industry also witnesses a substantial

investment in formulating strategies to edge ahead of its rivals.

2.2 Threat of new entrants

The garment industry runs on a local as well as national scale with equal vigor. While the

entry barriers for local garment manufacturers is not high, the companies operating on a

much higher scale have to have an extensive distribution network and also have to work a

lot in gaining brand recognition among the potential customers.

The Indian market is very huge and a large part of it is untapped. Many small-

scale companies have come up in the casual and semi-formal range of clothing competing

in terms of variety and low costs.

The foreign MNCs are eyeing the Indian market with its large population and

increasing buying power as a very potential expansion base. With the liberalization

policies carried out by the government and especially with the recently signed multi-fiber

agreement, the entry of foreign brands has become easier. Chinese garment

manufacturers are planning a major attack on the Indian market with their price

advantage. A hoard of brands from the US is ready to enter the western wear segment and

grab its market share.

Thus overall, the threat of new entrants in the industry is very high. The segment

has high, unstable returns.



2.3 Buyer power

The buyer power in this industry is high. The product is relatively undifferentiated in

terms of primary usage. The customer is very price conscious and has substantial

bargaining power as the industry runs more on volume sales. The buyer is highly

involved in the purchase of a garment and the purchase is again dependant on the his

mood and behavior. He has the tendency to buy responding primarily to good price or

purchase convenience.

2.4 Threat of substitutes

The substitutes to the ready to wear industry can be the fabric manufacturers who

produce ready-to-stitch clothing. These include the old economy textile manufacturing

giants like Bombay Dyeing, Mafatlal, Digjam etc. But with increasing buying power and

awareness, the young Indian consumer is rapidly shifting away from the ready-to-stitch

clothing and opting for readymade wear. This has resulted in reducing the threat from the

substitutes.

2.5 Supplier power

The suppliers in this case can be classified in three groups:

1 Fabric manufacturers: The fabric is mostly procured globally and the number of

suppliers is very large. The entire lot of the fabric for one brand is outsourced

from one supplier to ensure uniformity. The supplier power is not high.

2 Suppliers of trims: The accessories like buttons, zippers, tags etc are all procured

as a lot for the whole year in one go. The contract is given to one supplier and

generally there are no problems faced at the time of delivery.

3 Tailors: Generally the company appoints franchised tailors; exclusive to a brand

but numbers is not a constraint. Hence they do not have much power.



3. Industry Concept of Competition

3.1 Number of Sellers and degree of Differentiation

Pre 90s

The pre-1990 era depicts the age of old economy in case of the garment industry. This

age was marked by the rule of fabric manufacturers. The ready-to-wear category was not

evolved and people preferred to buy cloth and have it stitched by individual tailors

according to customized fittings. Few textile giants like Raymonds, Bombay Dyeing, S

Kumar’s, Mafatlal etc were the main industry competitors. The product, fabric in this

case, was partially differentiable in terms of quality and price. The market structure was

that of a differentiated oligopoly.

There were a few well-known brands of readymade clothing like Zodiac but were

not able to create that much of an impact. But Zodiac managed to showcase the huge

potential ready to be grabbed in India and paved the path for entry of other ready-made

brands in India. The old economy giants sensed a change in consumer aspirations and

made a drift towards the readymade wear segment. Raymonds launched Park Avenue in

1986 and Bombay Dyeing came out with Vivaldi in 1988. In 1989, Madura Garments

was the first company to bring in a foreign brand, Louis Philippe, into the Indian market.

Post 90s

This period saw the arrival of a large number of brands in the ready-to-wear category.

With liberalization and improved standard of living, the people have shifted to ready

made clothing. New market leaders like Madura Garments and Arvind Mills cashed on

the changed consumer psyche.

3.2 Entry, Mobility and Exit Barriers

Entry Barriers

1. Distribution costs: Companies mostly employ 2 or 3 tier system in distribution of

garments in India. The company incurs the cost of delivering goods to retailers and

dealers. The distribution network is a very critical factor for sales in this industry and

all companies strive very hard to build up an extensive network.



2. Brand recognition: In the organized segment brand image plays a very important role

in the consumer purchase decision, as the customer is highly involved in the

purchase. A new player will need to establish uniqueness of its product in the

consumers mind to lure consumers to buy them. Companies incur a high cost during

brand building exercises.

3. Capital: Companies have to invest capital in setting up their manufacturing bases.

Along with that a high capital has to be invested in retail activities if the companies

opt for establishing exclusive showrooms and factory outlets to sell their product.

4. Knowledge of Fashion Concept and Cycle: While entering into any segment of this

industry, it is important to first have knowledge about the fashion and trends in vogue

currently and to identify for how long would this fashion style hold.

5. Product Differentiation: To enter into the market, the company has to be able to

provide a product offering which can differentiate it from other competitors. This

differentiation can be in terms of tangible aspects like quality, price etc or can also be

in terms of brand projecting a unique image.

6. Knowledge of Regional Preferences: Indian market is highly differentiated in terms

of regions. The people have varied preferences and tastes across regions. Hence it is

very important to understand the customer behaviour and preferences of the zone

wherein the firm is operating.

Mobility Barriers:

The companies normally face the following barriers while shifting towards a different

market segment from their existing segment.

1. Distribution: For a company wishing to shift from one segment to another e.g.

popular to premium, it has to make a change both in the type and number of

distribution channels. E.g. A company operating in the casual economy garment

industry would have been focusing on a 3-tier distribution system, but when it wants

to enter the premium market, it has to invest in opening exclusive showrooms and

other distribution channels.

2. Brand Perception: If the segment being entered is relatable to the segment in which

the company already is in, then its brand can be instantly recognized in the new

segment due to similar image fit. But otherwise, the firm has to invest again in



building a name for its brand in the entered segment. E.g. When Allen Solly entered

the women’s official wear market, its already established image of semi-formal wear

carried on.

3. Existing Competition: A company has to analyze the current market potential and the

market share of all firms already operating in the target segment. E.g. When Madura

garments wants to enter the children’s wear market, it would face a heavy

competition from existing firms like Osh Kosh B’gosh, Weekender Kids etc.

4. Customer Preferences: The knowledge of current fashion in the targeted segment as

well as the customer preferences in the segment have to be analyzed and compared

with the existing product mix to infer the changes required in the product offering

before entering into that segment

5. Technical Knowledge: Entry into some highly niche markets like institutional wear

requires some technical knowledge of the requirements of that niche market. E.g. the

manufacturer has to understand the situations in which the Indian soldiers have to

work before choosing the fabric and stitching style for their clothes.

6. Sourcing: The firm has to start from the initial phase of identifying the institutions for

sourcing in that new segment. Each segment has its unique requirements for which

new sources need to be identified.

7. Import/Export Duties and sales tax: Import duties are also applicable for procuring

raw material and exporting product. Companies would not prefer to go to an export

production business due to high duties.

8. Quantity Restrictions: Restrictions are imposed on the quantity of goods exported to

various countries.

Exit barriers

The following are the barriers against a firm that tries to exit from the industry,

1. Franchisees: A company appoints a number of franchisees for retailing as well as

manufacturing purposes. Contractual obligations of the company with dealers or

distributors will require outflow of funds in case the company wants to exit the

market.

2. Sunk capital costs: Along with the manufacturing units owned by the firm, the costs

incurred in marketing, brand building and establishing distribution channels are also



sunk. Distribution channels like exclusive showrooms involve high capital, which

would pose as a liability to the company while exiting.

3. Inventory: This sector produces a high amount of inventory in all its stage of

production. The industry average of stalking inventory of finished goods is 2 months.

Disposal of inventory would pose a problem to a company offering to exit the sector.

The exit barriers in the segment are also low as compared to other sectors. This sector

invests less on manufacturing and large factory establishments. There is a growing trend

of outsourcing the manufacturing, which further helps in reducing the capital stuck up in

the process.

3.3 Cost Structure

The costs incurred by a company operating in the garment industry can be split up in the

following structure:

1. Cost of raw materials: the major cost incurred in the operation is that of fabric

procurement. The cost of fabric is 65-70% of total manufacturing costs is the fabric

cost while 10% is the cost of accessories and trims.

2. Dyeing and Printing: the cost of these activities comes to 4-5% of the total

manufacturing cost.

3. Cost of Cutting, Manufacturing and Trims (CMT): is 8-10% of the total cost.

4. Finishing and Packaging: is 5% of total mfg. cost

5. Distribution Costs: 15% is the total distribution cost out of the manufacturing cost.

Though no concrete data is available regarding the dealer/ distributor margins

prevalent in the industry, wide variations are reported. These margins range from 20-

25% across the range of brands. The quantum of the margins is determined to a large

extent by the marketing strategy of the brand. These costs form a substantial part of

the cost structure of the company.

6. Tax Structure: The tax being paid to the government is divided in terms of excise

duty and octroi duty. Normally the excise duty is pegged at 12% and 15% of the total

sales have to be paid as octroi duty.



7. Promotional/Marketing and Brand Building Costs: Brand sensitivity has grown, and

Yuppies are conscious of being seen in a brand they identify with. Retaining past

mind share and winning more, though, is an ongoing effort. Ad agencies have a large

role to play in ensuring the consistency of the brand personalities and companies are

paying astronomical amounts to gain visibility. With a budget of Rs 39 crore in 2000-

01, Madura spends some 12 per cent of its turnover on advertising.

3.4 Degree of Vertical Integration

Backward Integration

A company can follow the backward integration strategy by foraying into the

manufacturing of its garments and production of the fabric itself. The move is to get an

edge over the competitors in terms of quality and pricing. Also the company does not

have to rely on the other manufacturers for delivery on time. But this is not preferred

nowadays because it is very capital intensive and companies are moving towards

converting themselves into an asset-free model and are focusing more on branding and

distribution. The costs of establishment of mills as well as dyeing, printing and finishing

units involve a huge investment of capital. Hence companies do not prefer to opt for

backward integration. The current trend is that the companies are moving towards an

asset free model.

Forward Integration

A company can also follow forward integration by venturing into the marketing and

distribution of their own as well as other brands. We are thus seeing an increasing

number of players, laying stress on forward integration by taking the initiative of selling

its own product thru its own retail outlets. Arvind mills started off as a textile

manufacturer but is now also focusing on distribution and branding of its products as well

as bringing in new brands from US.

Outsourcing

The current trend prevailing in the industry is that companies prefer to outsource the

manufacturing of garments rather than producing them in-house. This enables them to



maintain their focus on branding and distribution as core activities. And also reduces the

capital invested in business.

3.5 Degree of Globalization

The industry is highly dependent on events happening globally. Normally in India, all the

companies follow the fashion trends happening in other fashion conscious countries like

US and all international fashion shows. They have to compete against local as well as

globally recognized brands. There as been a growing trend in intra-regional garment trade

among the countries in North America, Europe and East Asia, which has begun to impact

the exports from other developing countries regardless of the price advantage of the

latter. Such growth has been largely motivated by:

1. Proximity to the markets in developed countries, where the garments assembled from

the material inputs from these countries can be exported.

2. Regional trading Blocks i.e. EU and NAFTA.

With the liberalization, the competition has intensified on global scale-for example in

child market there was absolutely no branding, but Osh Kosh B’gosh entered in to this

segment and started the trend of branded wear in children segment.



4. Market Concept of Competition

Basic need

The ready made wear industry caters to the basic need of man for clothing. This basic

need of clothing can also be satisfied by the ready-to-stitch industry. The customers can

buy cloth from the market and have it stitched by private tailors, customized to their

respective fitting and comfort. The textile and fabric manufacturing firms like Mafatlal,

Bombay Dyeing etc had control of a large chunk of the market before all the foreign

ready-made brands came into India. Even today the readymade wear industry faces a

substantial bit of competition from this sector.

Secondary need

The other reason why a person prefers to wear one special brand is because he sees his

personality in sync with the brand. He wants to portray a certain lifestyle or image

statement, which he feels, should be delivered through the brand of cloth he wears. This

kind of social need can be fulfilled by many other product categories. So the garment

industry faces competition from watch manufacturers, jewelry makers, cigarettes,

sunglasses, the automobile industry etc. in terms of luring the person to buy clothes rather

than invest in buying some other commodity (Appendix 3).



5. Segmentation of Readymade Wear Market

Globally the apparel market has been segmented as shown in Appendix 1. In India, the

readymade wear market is highly fragmented due to the presence of a large number of

brands and a huge unorganized market. The analysis is based on the segmentation of the

market into 3 categories viz. Women’s, Kid’s and Men’s wear. The report does not deal

with the unorganized sector.

5.1 Women’s Wear

Size of Market

The total women’s wear market in India is pegged at Rs.16, 000 crore. It contributes a

little over 37 percent of the total apparel market. However, women’s wear contributes

only 8 percent of the branded apparel market, in spite of the fact that there exists a huge

market for ready to wear in this segment. The branding that has been done till now is in

synthetic sarees and extensive branding has been done by big stores like Nallis’. There is

negligible branding penetration in western wear and Indian ethnic wear segment.

Problems associated with women’s wear

Standardization of fits – Women expect customization in terms of fit. Hence a ladies

tailor in every boutique plays a very important role in modifying the fit to the body

shape and the styles of the women.

Exclusivity: Women in India are not brand driven but functionality driven. Indian

women want exclusive outfits and do not prefer mass produced garments.

Manageable SKUs – Due to the overwhelming variety of dresses available in the

women’s casual and traditional wear segment, companies find it tough to mass

manufacture and promote all categories.

Factors influencing buying behavior of women

1. Monthly Household Income: There seems to be a high correlation of monthly

household income with the level of westernization of attitudes. Most of the premium

brands target financially independent women with monthly income greater than Rs



8000. The lower income households usually show a preference towards Indian

clothing, and this demand is catered to by the unorganized sector.

2. Age: Most brands target women in the age group 18-30, since the women in this age

group is more brand conscious. Most of the western formal wear is targeted at women

in the age group 22-30, as this is the normal age for working for Indian women. The

everyday wear as well as the party wear, however, is targeted for a younger segment

starting from around 15-22.

3. Working Place: The ambience and the working environment also determine the type

of clothes a woman buys. Nowadays in most of the metros western wear is acceptable

but in small cities ethnic wear is the preferred choice.

4. Ambience of store: The store ambience and attitude of the sales team are far more

important in women’s wear as compared to men’s wear. Presentation is also very

important.

Market Segments

The women’s apparel market in India may be divided first into the Ethnic and western

wear market. Within these segments, there exist the ready-made and tailored segments

1. Ethnic

a. Sarees

b. Traditional ethnic wear (Salwar Kameez, churidar sets, lehangas etc.)

2. Western wear

a. Formals

b. Casuals

Premium Middle Economy

Western Casual Benetton,

Wearhouse,

weekender

Numero Uno

Western Formal Allen Solly

women’s (MD)

Sculler’s Women

(Indus League),



Annabelle

(Pantaloons), Deal

Clothing Company

Ethnic BE (raymonds), Srishti (pantaloons)

1. Ethnic

There is negligible branding penetration in Indian ethnic wear.

Sarees: Saree is the largest selling women’s apparel item and contribute about 44 per

cent of the total spend on women's wear. At a growth rate of 9 per cent per annum, it

has outpaced the men's and kids wear segments. Sarees fetched about Rs 71 billion in

the year 2001-02 of which 30 per cent was from branded sarees. With about 197

million people going for saree purchases this year the total consumption will be

roughly 315 million pieces. Companies operating in the industry include Garden,

Kunwar Ajay, Roop Milan, Parag, Vipul, Prafful and Vimal. Large saree chains

include brands like Nalli's, Ramesh Chandra Krishan Chandra and La Affair.

Salwar Kameez: Women's ethnic wear has seen the largest growth among all

women's outerwear categories. In 1997-98 its market size was a little over Rs. 25

billion and in the current fiscal this segment is projected at Rs. 35 billion. Indian

ethnic wear comprises 40% of total RTW market, yet no national brand exists. Some

brands like Be from Raymonds and Srishti from Pantaloon have entered into it but

they have found it difficult to give customized service to each and every customer at

their retail stores.

2. Western wear

Formals: The McKinsey report says that branded Western women swear is about Rs

60 crore at the moment. This segment is trying to take advantage of the increase in

the number of working women in this country over the last couple of years, because it

translates to more women wearing western formals to work.

Casuals: This segment of women wear has the large number of players. There is lot of

brand consciousness amongst women in this area. The flip side is that the new status-

conscious, brand-aware Indian is not particularly brand loyal; the move is towards



branded wear, not any specific brand. Most of the competitive activity owes to the

smaller players, with a concentration in premium casuals. Casual wear is a new, high-

growth market that gets all the attention. Most of brands that are in this segment are

extension of the mens wear already present in the market. International chains such as

GAP, NEXT and Tommy Hilfiger have also entered into casuals.

Perceptual Map of Women’s Wear




WESTERN FORMAL WESTERN CASUAL ETHNIC

MID

PR

ICE

PR

EM

IUM

EC

ON

OM

Y

BE (Raymonds)

NumeroUno

Benetton

Srishti

Scullers

Allen Solly

Annabelle

Deal ClothingWeekender

Wearhouse

LeeLevis

Pepe


5.1.1 Major Players in Women’s Wear Market

Allen Solly (For women) – Mobile defense (market broadening)

Allen Solly introduced the line of ready-made apparel for working women in December

2001. Through this extension, Allen Solly was looking to redefine the concept of

women's wear. Allen Solly has now achieved high recognition as a brand that represents

'unconventional' and 'relaxed' formal wear. The women's wear is positioned in much the

same way as the men's wear is. The original proposition of comfort along with fashion

seems to be underlined.

In case of Allen Solly Women's wear, the company has used target positioning by

focusing on the specific segment of urban, working women. For this strategy to work, a

target position should cause the people in the target to perceive the brand as superior in

meeting their particular needs. Allen Solly is meeting the "utility" need by providing the

Indian women greater choice in terms of the fits available. At the same time, it is

satisfying to the "ego" and the "self esteem" need of the Indian women by emphasizing

the empowerment and independence of the working women in their advertising

campaign.

Allen Solly differentiates itself as a formal wear for Women unlike unisex casual-

wear brands like Benetton and Weekender. The product line represents the

'unconventionality at work place' of the parent brand.

Be: (Raymonds)

Opened in July, with the first Be launch at Delhi, the company is moving ahead with

expansion plans. Raymond’s decision to eschew brand extension and create a whole new

retail brand also implies substantial future investments in brand building. Be: will have to

lure the average buyer of unbranded salwar kameez as well as the boutique shoppers —

both very discerning customers. Just to be on the safe side, Be: has been positioned more

broadly as a "fashion wear" brand, with a limited range of ethnic and western wear for

men as well. It also has an in-house line. This brand constitutes not only western but

ethnic and fusion as well.



Deal Clothing Company

Deal is a women’s wear brand that has been trying to mould western pub wear to the

Indian context. Launched in November 2000, the brand caters to the young college going

crowd. . Currently the brand is being retailed through 55 outlets in Mumbai and Gujarat

with a total retail space of 10,000 sq. ft.

Boutiques

Boutiques cater to niche market and provide personalized service to their clients.

Boutiques have been very successful because of their ability to provide designer wear at

affordable prices and special fitting for every woman. With all these they have moved on

to create thriving operations that together add up to a sizeable chunk of the women's wear

market. The Rs 50 lakhs MonaPali brand, which was available through exclusive stores

in Calcutta, Delhi and Ahmedabad, is now available at Westside stores across the

country.

Retail stores

Retail stores like shoppers stop and pantaloon are coming with their own private brands

especially in women wear. They have wide variety and they have tailors who sit there and

alter the garments according to the need of the customers. These stores have an

advantage as they already have exposure about the consumer preferences. They can take

out different ranges according to their location. A lot of customers who visit these stores

buy premium or mid priced garments. If these stores don’t stock the brands then a big

purchase point for the brands will be lots. But retail chains have to focus and spend on

attracting quality footfalls before spending on their private label promotions. Building

brand-equity is an expensive affair in the readymade garment market. For the destination

stores, conversion of footfalls into purchases is important to get the bottomline right.

5.2 Kid’s Wear

Size of Market

The total size of the kids wear market is Rs 6,000 crore. Out of this clothing for boys and

girls contribute 60% and 40% of the total market respectively. The kids wear market



comprises of clothing from infants to children till the age of twelve. The branded segment

constitutes less than 10% of the domestic kids wear market. Giny & Jony and Personality

are the leaders in the domestic industry.

The infant wear market is mostly in the unorganized sector, with only a few branded

products, like those offered by Welfit group.

Reasons for the initial flop of branded wear in kids wear

The foremost reason for all companies not to enter into the kids wear market was that

people had a psychological reluctance of not investing a lot of money in buying a

garment of such small size. Also because kids grow very fast during their younger years,

the clothes would not be of any use in a short period of time. Thus while the success of

mid price brands like the Rs. 30 crore Giny & Jony unearthed the large untapped

potential of this segment, at the same time, the premium brands like Osh Kosh B’ Gosh

failed miserably.

Re-emergence of Branded Kids Wear market

But the scenario has changed drastically as the social status and concerns of health have

made an influence into the buying behavior of customers. In the current times, the last

thing that parents compromise on is spending on their children. The spending includes

not just tuitions and education-related activity, but also so-called lifestyle expenditure.

Parents want to make sure their children have what every other child has, which is true

even with SEC-C households. Parents want to be contemporary and provide beyond just

nutrition, health and nurturing. Often, parents justify pure indulgence expenditure as

development.

Children these days are not just impulsive decision makers, but informed decision

makers. The clout they wield is tremendous.

Entrance of multinational players

Overseas companies are drawn by the latent potential of the Indian market. Most of the

multinational tie-ups have been for getting the licensing rights of famous cartoon

characters The most significant tie-ups of recent times have been –



Warner Bros + Weekender kids (from Personality) has acquired the license for

promoting Harry Potter apparel and eight other cartoon characters.

Hang Ten (US) + Gini & Jony Apparel of Mumbai – for Garfield

King Syndicate (Australia)+ Pantaloon – for Popeye

Walt Disney + Pantaloon - for Disney cartoons

VF Corporation (US) + Arvind Mills – for Healthtex kids wear brand

Available brands

Age group (yrs) Brand Company Price range

0-12 Healthtex Arvind mills 199 to 700

4-12 Lacoste Lacoste 450+

0-8 Adams Adams 200 to 700

4-12 Lee kids (Lee pipes) Arvind mills 695 to 795

4-12 Freelook Freelook 195+

4-12 Weekender kids Personality 200+

0-16 Osh Kosh B’

Gosh

400 (average)

Marketing Strategies

Advertising is primarily targeted towards the kids. The companies try to focus on

channels like “cartoon network”, which have a high viewership amongst children. The

brands also take innovative shapes and colors. With little to differentiate the various

offerings in the market, the design teams are exploring ways to make the products a little

different.

Pricing is a matter of important concern as the kids wear segment is mostly

dominated by the unorganized sector. In India, people are still interested in buying the

kids’ stuff from the footpath. The branded products are mostly sold in the range of Rs

200-Rs 700.

The domestic market is still evolving. It is now at a stage branded mens wear

segment was at ten years ago.



Relevance of value pricing

The kids wear segment is dominated by the unorganized sector. The typical

Indian psyche is that price of a product depends on its size; therefore they can’t accept

high prices for kids wear. The typical reference price in the minds of the Indian customer

is 150 –200 Rs.

If marketers could provide value at a lower price point consumers are likely to

upgrade to these products. The consumer should perceive a lower-end offering as better

than the existing substitutes. The manufacturer should however be cautious against the

building up of excess capacities.

5.3 Men’s Wear

Size of Market

The total men’s wear market in India is pegged at Rs.19, 800 crore. It contributes a little

over 46% of the total apparel market. Out of this men’s ready to wear clothing market

size is approximately Rs. 11, 000 crores. The branded segment contributes Rs. 5, 300

crores. The growth rate of the branded men’s wear market for the year 2000-01 was

21.7%.

A lot of brands have come into men’s wear segment leading to intense competition . Due

to the resultant cluttering the identification of the segments has become difficult. This

report segments this market in 4 categories viz. formals, semi formals, casuals and sports



wear. These are further sub divided on the basis of their perception as premium, mid

priced and economy.

Premium Mid Priced Economy

Formals Madura-Louis Philippe, Van Heusen

Arvind Mills- Arrow

Zodiac, Givo, Park Avenue

Madura-Peter England

Arvind Mills- Excalibur

Bombay Dyeing - Vivaldi

S Kumars- John Miller

Madura Arvind Mills Regional brands

Double Bull (Delhi), Turtle (Kolkata), Cambridge (Mumbai) and Serro (Chennai), Dash Cambridge, Double Bull, Dash

Semi-Formals Madura- Allen Solly

Arvind Mills- Arrow

Color Plus, Provogue

Indigo Nation Raymonds-Park

Avenue Provogue TNG

Casuals Madura Arvind Mills-

Lee, Wrangler Levi’s, Killer Benetton, Pepe

Madura-Elements

Arvind Mills- Flying Machine, Ruggers,

Indus League- Scullers

Raymonds- Parx Free look, Warehouse -

Weekender Live-in, Pantaloons

Crocodile

Madura Arvind Mills-

Newport Ruff & Tuff

Sports Nike, Reebok, Adidas,

ITC Wills Sport, Duke

Proline Unbranded

Regional brands


Ruggers


Perceptual Map of Men’s Wear


MID

PR

ICE

PR

EM

IUM

EC

ON

OM

Y

Louis Phillipe

Vivaldi

Givo

Peter England

John Miller

Color Plus

Excalibur

Zodiac

Arrow

Van Huesen

Double Bull

Dash

Cambridge

Allen Solly

Park Avenue

Provogue

Provogue

Indigo nation

Elements

TNG

Pepe

Killer

Lee

Benetton

Levis

Free look

Weekender

FM

Parx

Live-in

Pantaloon

Scullers

Newport

FORMALS SEMI FORMALS CASUALS


6. Overview of major players in men’s wear

The men’s segment consists of myriad players with each competing fiercely against

others. The major players are Madura Garments, Arvind Mills, Raymonds and Indus

League. Then there are a number of players with a limited range of apparel but which are

into niche segments like Zodiac, Color Plus, Benetton etc. The complete timeline for all

the major brands launched in the market is enclosed as Appendix 2. Based on a survey

conducted by org-marg, the position of various brands is shown in Appendix 4. The

major players in the premium shirt category and there sales figures are as shown in the

figure below.



6.1 Madura Garments

Madura Garments is presently the overall Market Leader in the branded wear market.

Company Growth

Year Operating

profit (Rs.

Crore)

Turnover

(Rs. Crore)

Shirts

(Units)

Trousers

(Units)

2000-2001 12.5 325.5 4.7 million

shirts

1.2 million

trousers

2001-2002 - 500 (expected) - -

Brands of Madura Garments

Marketing Mix elements and related aspects

Louis Philippe

Product High quality Premium formal and semi

formal shirts launched in 1989

The Permapress collection

The Italia Collection

The Bespoke Collection

The Protocol collection

Target segment The arrived, rich, status-conscious man

in the 30 to 45-age group

Positioning Positioned on the status symbol

platform, use of the upper crest

Price Basic range: Rs 999 to Rs 2145

Permapress: Rs. 1895

Protocol: Rs 2595

Dress shades: Rs 1495

Promotion TV & print media

Sales promotions: infrequent and based

on special events



Competition Few prominent players like Arrow, Van

Heusen, Park Avenue

Distribution Exclusive showrooms

Mega multi branded outlets &

departmental stores

Online: magiccart.com, indiainfo.com


Van Heusen

Product Business shirt targeted at the fast-track

corporate executive.

It was launched in 1990.

Called as the Master Shirt Maker.

Very good style, quality and variety

Target segment The arrived, rich, status-conscious man

in the 30 to 45-age group

Positioning Very costly and it is perceived as a

social status symbol

Brand speaks of Masculinity

Loyal customers

Price Over 840

Promotion TV & print media

Competition Few prominent players like Arrow,

Zodiac, color plus



Distribution Exclusive showrooms

Mega multi branded outlets &

departmental stores


Peter England

Product High quality readymade formal shirt

designed in exclusive company design

studios.


Target Segment 20-40 year old office going male

belonging to the middle income or the

lower-middle income household with

high aspirations.

Positioning 'Honest Shirt', that offers the maximum

possible quality at a particular price,

'value brand'.

Akin to a premium brand at mid-

market price.

Price 395 and above

Promotion Both print and media advertisements.

Advertisements are aimed at driving

home the point of value offered by the

brand to the customer with a focus on

the 'honest prices' offered by the brand

Competition 'Vivaldi', 'John Miller' and 'Trendz'.

Stiff competition from regional brands

in different regions e.g. 'Double Bull' in



Delhi, 'Turtle' in Kolkata, 'Cambridge'

in Mumbai and 'Serro' in Chennai

Distribution Multi-branded retail outlets (initially),

now also through few exclusive

showrooms


Allen Solly

Product High quality readymade semi-formal

shirt


Target Segment 20-40 year old office going male

belonging to the middle income group.

Positioning It has been positioned using the concept of Friday Dressing.

Price Around 800 and above

Promotion Both print and media advertisements.

Competition Arrow (Arvind Mills), Color Plus,

Provogue



Distribution Multi-branded retail outlets

Some of the other brands of Madura Garments are

Elements: It is casual Peter England sub-brand launched in 1999. It is positioned at

the older lot of youngsters.

Byford: It is targeted at trendy youngster.

San Frisco: It was launched in 1998. It is positioned as a 'trouser specialist'. It was

launched for fighting Dockers and other new brands for which a dedicated brand was

required. It is also targeted at trendy youngster.

Elysee

Current Scenario

President, Madura Garments: Prakash Nedungadi

In December 2001, a fully-owned subsidiary of Indian Rayon, Aditya Vikram Global

Trading House, acquired the global rights for Louis Philippe, Allen Solly (barring

North America) and Peter England (except in the UK and Ireland) from Coats

Viyella, for a mere $2.3 million.

All in all, Madura's brands have taken the Indian apparel market higher up the

sophistication curve. Retaining past mind share and winning more, though, is an

ongoing effort. With a budget of Rs 39 crore in 2000-01, Madura spends some 12 per

cent of its turnover on advertising, with HTA handling Van Heusen, O&M handling

Louis Philippe and Alien Solly and Mudra handling Peter England.

Each brand has a core value, and care is taken to see that the creative portrays the

brand essence. The company uses TV for vivid brand characterization and attitude

portrayal, while print draws attention to other brand properties.

Madura Garments, after its acquisition by Indian Rayon in January 2000, has placed

special emphasis on retailing along with sprucing up its supply chain management



and product innovation. By the year 2003 the retail presence of Madura Garments is

expected to touch the mark of 200 urban markets in India.

6.2 Arvind Mills

Arvind Mills is presently the Market Challenger in the branded wear market.

Brands of Arvind Mills

Year of

Launch

Brands Perception of the Brand Price range Competitors

1980 Flying

machine

Jeans and casual wear,

which apparently became

very popular.

Over 600/- -

1993 Arrow Etiquette of global

Power Dressing

Truly American

Premium-Wear Brand

Loyal customers

Over 895 Louis Philippe, Van Heusen, Zodiac,

Park Avenue

1995 Lee Authentic jeans. American

aspirational, pseudo, non-

conformist, usage of teen

psychological price barrier.

Over 995/- -

1995 Newport "Good jeans for less", was

the motto that ‘Newport’

jeans carried and became

an instant success. Today,

Newport is by far, the

largest selling jeans brand

in India. Mid price

segment.

Over 499/- -

1997 Excalibur King Aurther’s collection- 595 and Rs695 -



evening wear shirts.

Excalibur is targeted at

mobile executives who are

looking for things that fit

the demanding lifestyle.

The ‘easy care’ range is cut

to the latest international

styles.

2000 Wrangler The authentic western

jeans

- -

- Ruggers Adventure wear

Casual wears

- -

- Ruff &

Tuff

"Ruff and Tuff" is a

product range of ready-to-

wear denim jeans

Gabardines, Cotton

Trousers, Shirts and T-

Shirts. It’s a combination

of Quality, and Fit at a

very affordable price.

Over 450/- -

- Bay

Island

Semi Formals - -

History

Established by Lalbhai Group in 1931 in Ahmedabad, western India, Arvind Mills used

to produce traditional cotton fabrics and garments for domestic consumption. But when,

in the 1980s, low-cost power looms began flooding the market with cheap cotton fabrics,

the company had to change in order to survive.

Arvind Mills is today one of a new breed of ‘Third World Transnational

Corporations’. It is the third-largest manufacturer of denim in the world and the largest

outside the US. It exports over 150 varieties to 66 countries and is used by many big



brand names including Lee, Wrangler, Lee Cooper, Gap, Marks & Spencer, JC Penny

and C&A.

Currently Arvind Mills is the second largest Branded Garment Manufacturer in

India. Presently Arvind Brands retails its products through its 300 exclusive brand outlets

and its 24 Megamarts. The company has three channels of distribution - the exclusive

brand stores, the multi brand outlets and the department stores.

1980-1993: Launch of Flying Machine –Market Broadening

Arvind reckoned denim was a fabric that would never go out of style. So it dismantled all

its disorganized mills – which made nearly 250 different products, from saris to

handkerchiefs – and concentrated on denim. Thus it went in for Planned Contraction

(i.e strategic withdrawl) and started off in the denim market with the launch of Flying

machine in 1980. The market for denim was booming and Arvind Mill quickly captured a

leadership position in the denim market.

1993-1997: Launch of Arrow - Frontal Attack

In 1993 Arvind Mill came out with Arrow to counter Louis Philippe and Van Heusen

which had been launched earlier by Madura garments.

For most of the 1990s, it looked as if Arvind Mills' Arrow, from 'America's shirt

maker', would capture the top-end with its dual strategy of deploying immaculately

exclusive showrooms, combined with an interesting ad campaign that explained the

detailed etiquette of global Power Dressing (cuffs half-an-inch out of the jacket sleeve, no

more, no less etc.).

It also came out with Lee in the premium segment and Newport in the economy

segment in 1995 to tap the growing denim market. With the launch of these two brands, it

established a vertical linkage within its own value chain. It then came out with Excalibur

in the mid-price segment in 1997 to counter the threat, which Peter England from Madura

Garments posed. Arvind Mills grew at the rate of 15 to 20 percent in this period.

1997-2002

It launched wrangler in 2000 to have another product in the premium jeans segment. But

due to inability to communicate the difference in the premium segment well and due to

weak brand management, the expected growth did not materialize.



The turnover in march 2002 was 275 cr and expected growth in 2002-2003 is 15%.

Competitive Position: Favorable

Arvind Mills has a favorable position in the readymade wear market with its large range

of shirts and jeans.

Reaction pattern: Selective Competitor

Arvind Mills has always been a selective competitor. It reacted to the launch of Louis

Phillepe and Van Heusen with the launch of Arrow brand of premium shirts, but then it

did not respond to the new range of shirts introduced by Madura Garments under Louis

Phillepe and Van Heusen. Instead it relied on the brand equity of Arrow to capture the

market.

Premium shirts (Arrow): Challenger

Arvind's initial business strategy for Arrow centered on the brand's legacy and premium

identity. It deftly used Arrow's restricted availability to generate customer pull. One of

Arrow's early campaigns said it all: ``Finding an Arrow shirt isn't easy. After all, they

aren't run-of-the-mill.''

6.2.1 Market Challenger Strategies of Arvind Mills vis a vis Arrow

General Attack Strategies

Frontal attack Arvind Mills entered into premium shirt segment with the launch of

Arrow in 1993 when Louis Philippe and Van Heusen from Madura Coats were setting

a new trend in formal wear. So basically it attacked the market leader through a

frontal attack.

Specific Attack Strategies

Product Proliferation: Arvind Mills realized the need to introduce more ranges in

shirts and trousers and so launched a special anniversary collection of two-ply 100



percent cotton shirts under the Arrow brand. The Newport trousers brand was also

extended into a shirt brand.

Denims: Market Leader

Arvind Mills, the third largest manufacturer of denim in the world expects demand to

exceed supply. Arvind Mills is expected to benefit the most from the resurgence of

denim, which was expected to grow by over 15 percent in 2001.

Arvind mills is currently the market leader in denims and has a strong base in it.

Market Expansion strategies: New users (Ruff & Tuff):

Arvind launched Ruff & Tuff brand of jeans. Arvind Mills found that aspirational

levels of consumer groups in semi-urban towns with regard to the product category

were high but their affordability only permitted them to buy jeans, which were

clones/duplicates of well-known brands and of inferior quality. There was a need for

a good quality jeans brand at affordable prices. Ruff and Tuff was hence launched

with a celebrity and the brand followed this up with a campaign, which emphasized

the ethnicity of the brand.

The company is also launching several ranges under the Lee brand, which today has

managed around 33% market share.

Overall Strategies

Internal restructuring: One of the fallouts of building some of the bigger brands

(like arrow) was that some of the not-so-big brands in bottom line or topline terms

were undernourished and under nurtured. Hence the nine brands have been divided

into four clusters. Arrow forms one cluster, Lee the second one. Wrangler and

Ruggers have been clubbed together to form the third cluster whereas Excalibur, Bay

Island, Flying Machine and Newport form the fourth cluster and a business head has

been assigned to each one of them. With such senior people looking at much smaller

portfolios, they should be able to look at the brands in great depth and give them due

attention.



Problems

In 1986, the company forecasted an extremely bright future for denim and initiated a

huge expansion programme that resulted in capacity going from 3.6 million meter per

annum in 1986 to 110 MMPA now. This was financed through heavy borrowings.

Unfortunately, the actual growth did not measure up to expectations and the denim

industry went through a phase of over-capacity and growth saturation. In 1999-2000,

the company was unable to service its debt obligations.

The latest financials are not encouraging. Sales fell 1.53 per cent to Rs 1,197 crore for

the year ending March 2001 from Rs 1,215.97 crore the previous year. Operating

profits fell 24 per cent to Rs 119.62 crore from Rs 158.05 crore. Interest costs went

up by 22 per cent to Rs 322.63 crore.



6.3 Raymonds

Raymonds is presently the Market Challenger in the branded wear market.

Brands of Raymonds

Year of

Launch

Brands Positioning Price range Competitors

1986 Park Avenue Etiquette of global

Power Dressing

Truly American

Premium-Wear Brand

Loyal customers

Over 1000 Louis Philippe,

Van Heusen,

Zodiac

1999 Parx Semi formal office

dressing

Cottons and denims

600 – 1400 Flying

Machine, Live-

in, Free Look,

Pantaloon

2000 Manzoni Super premium

segment

High quality,

international style

- -

2001 Be: Affordable designer

wear

Western, ethnic and

fusion styles

600-6000 Retail shops

like Shoppers

Stop,

Pantaloon etc.

History

Raymonds started off in 1925 as a manufacturer of woolen textiles. Over the years, it has

established itself as a leading player in the readymade apparel market.


Raymonds has a favorable position in the readymade wear market with its large range of

shirts and jeans.



Reaction pattern: Tiger Competitor

Raymonds has always hit back its competitors. It changed the image of Park Avenue

from formals to semi-formals to capture the market from its competitors. It also launched

Parx to tap on the growing casual wear market.

Entry Level Strategies

Launch of Park Avenue in 1986 – market pioneer – took pioneering lead to cater to

changing “desired states”.

Initially Raymonds launched Park Avenue in 1986 as formal wear for the young

corporate. It entered the market much before other brands (in 1989). The only other

branded shirt of repute available at this point of time was Vivaldi from Bombay Dyeing.

1990s

Park avenue is presently the market leader in the Mid Price formal shirts segment. It

enjoys a dominant position due to the highest sale in this category.

Repositioning of Park Avenue: Semi Formal

Realizing the aspirations of the '90s manager, in 1996 it came out with a `get real'

campaign. The positioning line at that point of time for the brand was `real formal, real

easy'. Park Avenue was repositioned as the complete `wardrobe brand' after the

introduction of Parx in 1999.

Launch of Parx in 1999

The range of casual wear that existed under the Park Avenue label was shifted to the

newly launched casual wear brand, Parx. Parx was a casual, semi-formal wardrobe brand

that reflected a shift towards casual dressing, indicating the demand for cotton and

denim-based products. Parx comfort wear was aimed at the young office-goer, who

should feel comfortable as he works his way up the corporate ladder.

Raymond conceived an image shift by attempting to make available the latest

international fashion trends in the Indian market at an affordable price. Parx is priced

between Rs 600 and Rs 1,400. In April 2000, `Parx' sales revenue was Rs 30 crore.



Marketing strategies adopted by Raymond’s

Park Avenue adopted the positioning line of ‘Start Something New'

Product Innovation: The idea was to make the brand more modern and contemporary.

Research showed there was something in people's minds, which was not being

articulated. There was a desire to break away from the old traditional ways to start

something new.''

A new `corporate Columbus' was emerging _ ``someone with vision, ideas, ability to

work and the confidence to quit his job to take on a new venture''. And, Park Avenue

realized it had to address this particular individual.

Extensive Distribution :In the year 2000, Raymond embarked upon a new strategy to

increase its market share. The strategy focused on revamping its retail and distribution

chain across the country. The Group aims to expand the existing network of 260

Raymond shops to over 350 outlets by the year 2003. The company also plans to increase

the number of its exclusive Parx and Park Avenue outlets from 13 to 100 in the next one-

and-a-half years.

Challenges

Declining demand for Fabrics: One of Raymond's biggest problems is the falling demand

for fabrics, with the market saturated. Another threat is the advent of the World Trade

Organization (WTO) agreement in April 2004. This will allow fabrics to be imported for

domestic use.

Change in customer preferences: Customers are moving to readymade garments, which

are more convenient. Therefore the only real driver of growth is the readymade garments

division. The key is value-addition. So, while it might constitute a smaller proportion of

the turnover, its contribution to profits is substantially larger. The company hopes to

boost its bottom line through this segment.



However, the competition is intense in the readymade garment sector with several brands

already crowding the market place. The key in readymade garments is to have a portfolio

with products across the board, ranging from casual-mid-range pricing to formal wear

and premier goods without losing Raymond's brand equity.

Raymond's main strength is its large national distribution network. To really have an

impact on the bottom line, readymade garments need to contribute to at least 10 per cent

of the turnover. This can happen only if the growth is rapid. There are two ways to grow:

Organically, by increasing market share of its own brands or, inorganically, by

acquiring some established brands. As Raymonds has the resources, the second might be

a viable and faster option.

Marketing Research results by Lintas

A research by Pathfinders, the market research outfit of Lintas, revealed the following

about the current perception of Park Avenue:

It was seen as a strongly formal/official brand with premium quality connotations;

Younger consumers viewed it as less fashionable and lower in status compared to its

competitors (Arrow, Van Heusen and Allen Solly)

The older, current consumers kept the brand at par and also higher on status and

admitted that it was not as fashionable/contemporary as its competitors.

It was perceived to be for an oldish consumer _ someone who was

successful/achieved in life, but is conservative and conventional.

Launch of Manzoni (2000) – image building

A super premium range of men's shirts and ties was launched in April 2000. The brand

has already been established in the market and has raced to the popularity charts in its

category, acknowledged for its high quality and international styling. Manzoni also

launched a range of very high quality men's suits recently.

Launch of Be (2001)- foray into niche segment (market broadening)

Be is Raymond's exclusive prêt-a- porter line of ready to wear affordable designer wear.

It includes an eclectic mix of formal wear and evening wears for women and men in



western, ethnic and fusion styles. It aims at making affordable designer wear easily

available to fashion conscious women & men in 2001.

Sales Promotion: To commemorate its 75th anniversary, Raymond will also launch a new

Rs 20-crore campaign. Out of this amount, around Rs 10 crore will be given out as prizes

to the consumers participating in a contest.

Alliance: The company has tie ups with two Italian firms Marzotto and Piacenza for

enhancing design and quality of its textiles. This can help the company in coming up with

innovative product designs in future.



6.4 Indus League

Indus League is presently the Market Challenger in the branded wear market. The

company calls itself a lifestyle brand marketing concern.

History

It began in 1997 with the exit of Sriram Srinivasan, the company's first president, widely

considered the architect of the premium readymade menswear market. The exodus of

seven other high-profile professionals two years later, to join hands with Srinivasan in

Indus-League, a venture capital funded lifestyle clothing company, was definitely a

watershed. Indus-League, which mopped up Rs 27 crore in the latter half of 1999-2000,

is expected to cross Rs 100 crore in the current fiscal.

Salient Features

First clothing company started with venture capital

First clothing company to offer employee stock options

First clothing company to use IT extensively, and one of the

First ready-to-wear garment brands made in India to be launched internationally

Brands

Indus-League is now in the market with two original brands - Indigo Nation and

Scullers.

Indigo Nation is positioned as one that cuts across markets and product segments,

targeting a wider customer base, a citizenship to Indigo Nation, and aims to become a

Gap in India. The name and everything is oriented towards it, the product is premium, the

pricing is surprisingly low.

Indigo Nation, positioned as a `clothing expert for a modern man', is up against Zodiac,

Park Avenue and Van Heusen. Conceived on trends sweeping the global marketplace, the

brand is reportedly for the young, successful, urban male and gives him the assurance of

being well-dressed, in tune with the times, and the confidence that the quality is as good

as the best.

Indigo Nation is targeted at the young Indian executive and the professional with a global

outlook. With its contemporary designs, colours and fabrics, the brands' pitch is quality

delivered with value, as compared to the other mid-priced and premium brands of



menswear. The price ranges from Rs 399 to Rs 699 for shirts, and from Rs 599 to Rs 899

for trousers.

Scullers is positioned as a brand full of energy, it ``includes clothes which you wear in an

international workplace'', where men and women work together. This premium menswear

brand faces the likes of Colour Plus and Provogue in the market. Scullers, on the price

front, starts at Rs 599 for shirts, Rs 799 for trousers and Rs 399 for ties.

Touted as clothes to wear to work and ``just as good to relax with the gang afterwards'',

the brand's imagery is drawn from sculling and rowing (like the legendary races of

Harvard-Yale and Cambridge-Oxford), the spirit of bonhomie and the energy of

teamwork in a workplace. The rich imagery, which is truly international, is most

effectively captured in print campaigns.


Indus League has a favorable position in the readymade wear market with its range of

differentiated shirts.

Company’s strategies

Attack strategy: Bypass attack by creating a new segment and using modern technology

to its advantage in creating a new customer base.

Specific attack strategies:

Zero Asset Model: Indus-League doesn't manufacture anything in-house, but has

dedicated people who are working for them under their manufacturing supervision. The

largest team of the company hails from manufacturing field. They work with people with

good factories and flexible manufacturing and very high quality merchandising. The

manufacturing team works on giving productivity up and quality up so his cost stays

down so that they can offer value proposition to his customers.

Low Manufacturing Cost: The company's access to international sources makes its raw

material cost one of lowest in the business. At a lowest manufacturing cost the company

can deliver the best products at a much lower cost to the consumer. That's how value

proposition is delivered.



Good R&D: The company has a great marketing and merchandising team to understand

what the market is looking for.

Product Proliferation: The company is conceived on trends sweeping global market

place and believes in providing a larger variety of products focussing on high

performance fabrics, vibrant colours, new textures and a softer comfortable feel that are

replacing the traditional look.

No cannibalization: The company wants doesn’t want any of it’s new brands to compete

with it’s existing brand. They want to create new customer base.

Use of Technology: Indus-League is creating a whole new segment. That is basically

what they are trying to do with the two brands launched now. The top departmental stores

in Mumbai and elsewhere have done extremely well with brands that too without any

advertising support for them. Indus-League uses the services of information technology

to drive these four elements. The company has an exceptional supply team management.

Shorter Learning Curve: Normally when a new company is setup, there is a huge

learning curve, but here the learning curve has been shortened considerably due to

starting team. Put together, team would have at least 100 man-years in the garment

business. That is why the kind of reaction the company got in the market of Pune or

Madras, is not the typical reaction, a new company would get.

Distribution: Indus-League is not going for a wide distribution. They would have limited

distribution in shop-n-shops, best multi-brand outlets, in large departmental stores. The

brands are already into all Shopper's Shop stores in India, Piramid at Crossroads, Life

Styles in Madras, and will be in all large Pantaloons stores. The company is also planning

to have exclusive Indigo Nation showrooms.

This strategy of limited distribution, by not spreading itself thin across many

outlets, will enable the retailer to grow with the company. The company will be putting

its resources in visual merchandising and other instore promotional activities. The ratio of



multi-brand outlets to exclusive shops is likely to be very fair. But the number of retailers

per market would be very judiciously thought. It will be very optimal.

The company will service these outlets through distributors who would primarily

be stock points in each state. Products will be strongly supported by advertisement;

Indus-League is looking at a combined spent of 12 crores on both the brands.

Promotion: As far as brand building is concerned, the company plans to be as big a

spender as any other big brand in the country as their pockets are deep enough for that.

The company has already launched a campaign for Indigo Nation; the Scullers campaign

is about to be released. In Tamil Nadu, the media plan has already been launched - multi

language prints, outdoors, and on Raj TV. Their ads feature only foreign faces. Scullers

and Indigo Nation are talking to the global Indian, who is youthful and contemporary and

the clothing caters to this lifestyle of work, leisure and party. Indus League is a prime

example of a company that built good products and fairly good distribution but did not

have enough resources to create top-of-mind recall for its Indigo Nation and Scullers

brands.

Demand Pull Strategy: The company believes that multi-brand retailers should be treated

properly because these outlets have been under pressure because of the margins. The

company is giving higher margins to multi-brand outlets. Indus-League will give support

to the dealers so that they give the customer a better service; a better ambience and they

also make money at the end of the day. The company believes that the whole value chain

has to make money - the retailer, the distributor, the company - to become a strong long-

term supply chain.

Segmentation: Indus-League is not selling purely on demographics. The company is

selling on life styles, selling on attitude. No sharp line is drawn about who is the

customer, but the core customer has been defined. The customer is not a perfect

customer. He or she doesn't feel that I should fall into only this segment. You can't force

customers to be segmented. They behave differently at different point of time. But the

Indian ready-to-wear market also has indiscernible traps that could kill any idea, any



strong conviction, any powerful vision, any overwhelming strategy .The company had

launched in Piramyd at Crossroads, Shopper's Stop and Pantaloons stores. It is quite

successful in Tamil Nadu and Mumbai

The future

Changing Consumer preferences: The consumers are now becoming more adventurous

in what they wear. Friday Dressing has revolutionized the office wear. The comfort of

cotton has replaced traditional blended fabrics. Indus-League strongly believes that

consumers of future will adopt new fashion faster than they have done before. And the

company creates for the future.

Company’s Focus: Indus-League will have a set of multi-product national and

international brands delivering strong values to a variety of customers. The company is

focused on the four basic premises that the customer is looking for - fashion, quality,

service and value.

Market Broadening: Foray into women's & children's wear Indus-League sees a very

special opportunity to redefine the largely unorganized women's wear market by

establishing merchandise quality. There are very few brands that produce quality and do

some brand building in this market, and even they are far between. With the acceptance

of western wear and ready-made Indian clothes, a transition has happened in the ladies

wear segment. Indus-League sees this segment as an open field with little competition

from top brands.

Future Plans: Ironwood is the third brand in progress. This brand, inspired by the game

of golf, is expected to be introduced soon .Ironwood, which would be in Scullers price

points, will feature classic and sport shirts to washed khaki trousers, bermudas, knits and

unstructured jackets.



7. Strategies of Madura Garments

Madura garments is the undisputed leader in the menswear segment. The major reason

for the success that Madura garments achieved is a strong focus on people, whether

customers or its employees, and a strong belief in its brands. Madura Garments' biggest

achievement has been the way it has used its understanding of the Indian Yuppie to

outshine the premium shirt brands of the 1980s.

Louis

Philli

pe

Van

Heuse

n

Allen

Solly

Peter

Engla

nd

Eleme

nts


FORMAL CASUAL

LO

W P

RIC

EH

IGH

PR

ICE

SE

NS

UA

LU

TIL

ITA

RIA

N


7.1 Launch and Entry Strategy

Pre 1989

The 1980s saw the first move towards readymade menswear in urban India, as brand

consciousness and the need for convenience surfaced. Bombay Dyeing’s Vivaldi

appealed to the musical soul, Zodiac’s Zodiac turned the gaze upwards and Raymond’s

Park Avenue took Indian aspirations to New York. At this point in time, Madura

garments did not have any major presence in the market.

1989 – mid 90s: Market Challenger

Launch of the “King” Louis Philippe – flank attack

Madura launched Louis Philippe in 1989, with its 'Upper Crest' crown logo embroidered

into the cuff as a mark of distinction, as a top-end formal shirt for the arrived, style-

conscious gentleman.

Louis Philippe was priced higher than the existing brands and succeeded in

delivering value at a higher price point. The higher price added to its royal image. It also

took shirt quality, packaging and merchandising to a higher plane. The brand signified

grace and style and was meant for use by high corporate executives as a status symbol on

social occasions. It is advertised as a brand “beyond the reach of lesser men”.

Launch of “rook” Van Huesen – flank defense

Madura launched Van Heusen in 1990 as a business shirt targeted at the fast-track

corporate executive. It was meant to fill the gap Louis Philippe had left uncatered to in

the pure formal wear category when it had positioned itself slightly away from regular

office wear. It thus acted as a flank defense to protect the king – ‘Louis Phillipe’.

Over the years Van Huesen has become markedly less stiff collared and has

become more experimentative with colours. Van Huesen came up with the concept of

colourful office wear through its recently launched ‘Purple Collection’.

Mid-90s onwards: Market Leader

Launch of “Queen” Allen Solly – mobile defense

Allen Solly introduced the concept of ‘Friday dressing’, which clubbed relaxed attire

with regular formalwear. It grew to become a subtle, but strong, attitude statement in

menswear.



Allen Solly was positioned in the semi-formal segment, thus enticing the casual

segment customers, without deviating much from the original target segment of premium

formal segment. Allen Solly was sold in exclusive showrooms with a more useful retail

ambience.

With the help of Allen Solly, Madura Garments was able to stretch its domain

over new territories. It was able to broaden its market base by catering to an underlying

generic need for comfort and easy dressing, without shifting from its original forte in the

premium formal wear segment.

Thus, by targeting various segments, Madura came closer to its objective of

becoming the market leader in the Mens Wear segment.

Launch of “Knight” Peter England – Market penetration strategy

Madura launched Peter England in 1997 to achieve volume sales by targeting the mass

market. This enabled Madura Garments to make a substantial foray into semi-urban and

rural markets.

Like a ‘Knight’ it managed to leap over the price barrier and still was able to

project an image of an admirable personality. Hence, the brand did not dilute the image

of Madura Garments as a marketer of premium shirts. The brand was a runaway hit, and

managed to penetrate deep into the urban Indian market through its own chain of

showrooms (noticeably less glitzy) and retail stores.

It is presently the largest selling brand in the formal menswear segment, with its

checked patterns doing exceptionally well.

Launch of “Bishop” Allen Solly Women’s – Market broadening

The concept of ‘Friday dressing’ was extended to the women’s segment when Allen

Solly launched its women’s version. The brand was targeted specifically for the working

women class. The working class has the buying power and is expected to be a very active

buyer for the segment. So its brand could play the Bishop, going diagonally across

existing perceptions (with formality on the X axis and sensuality on the Y), to deliver

unique styles.

The trouser market - Expanding market share

Around 2000-2001 there was a rapid shift in consumer preference from denim to Khakis

and Trousers. Further the trouser was expected to boom in the coming years due to a



consumer shift from tailored to readymade trousers. It actually cam true with the total

RTW trousers growing to 24 million pieces in 2002 from 12 million pieces in 2001,sub-

premium segment registering maximum growth. Madura Garments launched Peter-

England brand of trousers retaining the brand proposition ‘honest trousers’. As a part of

its strategy to have a straddled presence in domestic non-premium market, Madura

Garments moved its exclusive trouser brand ‘San Frisco’ to a higher price point so that

the gap created would be occupied by Peter England trousers. San Frisco was initially

priced at Rs. 595-795.

Entry into jeans market - Frontal attack

Madura Garments, entered the jeans wear market with the launch of 'SF Jeans' for the

youth in September 2002.Targeted at the 15 to 24 age group, estimated to account for 45

per cent of the jeans wear market in India, SF Jeans are available in several styles,

treatments and washes in the Rs 895 to Rs 1395 price range. The product is differentiated

from others in that the SF Jeans brand, offers text, images and laser patterns scorched on

the fabric, and this range was being introduced in India for the first time

7.2 Emotional Positioning Strategy

Madura Garments launched Louis Philippe as a shirt for the ‘Upper Crest’. Madura

identified the shift in the consumers’ aspirations, with a distinct preference for foreign

brands. Madura targeted this gap in the premium formal segment and positioned its

Louis Philippe brand as a ‘king’. Thus it was able to differentiate itself from its

competitors Park Avenue and Zodiac.

Van Huesen was launched with the punch line 'Underline your presence', with a thick

red line under the name added for emphasis, showed that it was a brand meant for the

confident young executive who wanted to make his mark at work.

Madura launched Allen Solly to capture instant attention of young Indian Sophisticate

who yearned for relief from straight jacketed formality but still wanted well groomed

office wear.

Peter England projected its selling proposition as ‘virtue of modesty’ and positioned

itself as ‘The Honest Shirt’. It managed to deliver a value much higher than the price at

which it sold, and thus avoided being viewed as cheap.



7.3 Retail Strategy

Madura Garments has always had a strong belief in the success of its brands. Hence, it

has had the confidence to follow a retail strategy diametrically opposite to the one

conventionally used. It has invested in exclusive showrooms for its brands right from

their launch, and it is only after the brands have made a dent in the market that they have

diversified into franchise outlets, departmental stores and malls. The latest addition to this

network is Planet Fashion, which is an exclusive mall for Madura products and brings the

Madura retail policy to a full circle.


Exclusive ShowroomsExclusive Showrooms

MallsMalls

Department StoresDepartment Stores

Exclusive FranchiseeExclusive Franchisee

Planet FashionPlanet Fashion

Exclusive ShowroomsExclusive Showrooms

MallsMalls

Exclusive FranchiseeExclusive Franchisee

Retail OutletsRetail Outlets

Madura Garments

Conventional Retail Strategy


7.4. Operational Strategies

Preemptive defense: To counter the vagaries of fashion, Madura uses a

combination of strategies. High fashion items are produced in anticipation of sales

on the basis of hunches and insights (a high-risk, high-return business). In contrast,

sales in other categories are forecast on the basis of real-offtake inputs from

retailers and malls such as Shoppers' Stop.

Supply chain strategy: As the business turns complex, Madura is employing

differential supply chain strategies to service different customer groups (dealers and

distributors). Priority is given to posh 'large trade outlets' that grant Madura plenty

of shop space. The average 'turnaround order time' is just six days. "A web

interface with our agents is our biggest strength/' says Krishna Kumar, general

manager, sourcing and logistics. This way, even ordinary stores are offered supplies

every fortnight (three months is the industry norm). Madura also has a policy of

quick and continuous liquidation of stocks. Clearance sales are organized so that no

stocks pile up, outlast their product lifecycles and gather dust.

Innovation: Madura is relying heavily on innovation. Whether it is fabric, style or

fits, each brand must have something new and desirable to offer, every now and

then. In fact, given all the feature-play, apparel is beginning to look more like a hi-

tech category. Ice touch is a new fabric it launched under the Van Huesen head

which keeps the body cool.

Madura runs a clockwork operation that's the envy of other players. But these other

players are looking to it for leadership not just on operational and branding issues,

but in planning for the future. This issue gains currency from the changes that the

WTO is bringing about. India's barriers to foreign-made clothes are coming down,

even as Asian apparel makers get ready to storm into the West once it drops its own

barriers put up by the Multi Fibre Agreement (MFA).

Global Expansion: As the business globalizes, Indian players might want to source

fabric from East Asia and turn it into shirts for export. Madura is already working

out a pan-Asian sourcing strategy, designed to optimize cost and quality. As for

export markets, West Asia offers the biggest immediate promise, since the brands

hold recognition there.



7.5 Strategy framework for a Market Leader

From the analysis of strategies followed by Madura Garments, a broad framework of

strategies which are applicable to a market leader at different situations can be derived.

A market leader might employ the following strategies in a growth-market:

Fortress or position defense strategy

Flanker strategy

Confrontation strategy

Market expansion or mobile strategy

Contraction or strategic withdrawal strategy

From the strategies applied by Madura Garments for its different brands in Premium

Formal and Semi-formal segments and mid-priced formal segment (where it is a market

leader) the following criteria can be derived to be amenable to above strategies.

Strategies followed by Arvind mills who is a market challenger, but a leader in casual

segment has been used to derive criteria for confrontation strategy.

There might be cases in which all the situational variables of a particular strategy

given below may not be relevant to a particular company. In this case, the strategy for

which maximum number of situational variables matches with the situation of the

company can be applied.

Situational

Variables

Fortress defense Flanker Confrontation Mobile

Defense /

Market

expansion

Strategic

withdrawal

Primary Objective

Increase

satisfaction,

Protect against

loss of specific

Protect against

loss of share by

Increase ability

to attract new

Increase ability

to attract new



loyalty and

repeat purchase

Build on

existing

strengths

Appeal to late

adopter with

same attributes

and benefits

offered to early

adopters.

segment of

current

customers by

developing a

second entry

that covers a

weakness in

original

offering;

improve ability

to attract new

customers with

specific needs

and purchase

criteria different

from those of

early adopters.

meeting or

beating a head-

to-head

competitive

offering;

improve ability

to win new

customers who

might otherwise

be attracted to

competitor’s

offering.

customers by

developing new

product offering

or line

extensions

aimed at a

variety of new

applications and

user segments;

improve ability

to retain current

customers as

market

fragments.

customers in

selected high

growth

segments by

focusing

offerings and

resources on

those segments;

withdraw from

smaller or

slower growing

segments to

conserve

resources.

Market

characteristics

Strong

preference

among largest

segment of the

customers.

Market

segments with

distinctive need

or purchase

criteria exists.

Relatively

homogenous

market with

respect to

customer’s

needs and

purchase

criteria; little

preference/loyal

ty towards

leader’s product

among largest

segment of

customers.

multiple product

uses requiring

different product

attributes.

heterogeneous

market with

growth

potential

multiple

product uses

requiring

different

product

attributes.



Competitor’s

characteristics

Current and

potential

competitors

have relatively

limited

resources and

competencies.

One or more

current and

potential

competitors

have sufficient

resources and

competencies to

effectively

implement a

differentiation

strategy.

One or more

current and

potential

competitors

have sufficient

resources and

competencies to

effectively

implement a

head-to-head

strategy.

Current and

potential

competitors

have relatively

limited

resources and

competencies,

particularly with

marketing.

One or more

current and

potential

competitors

have sufficient

resources and

competencies

to present a

strong

challenge in

one or more

growth

segments.



Firm’s

characteristics

Current product

offering enjoys

high awareness

and preference

among major

segment of

current and

potential

customers;

firm’s

marketing and

R&D resources

and

competencies

equal to or

greater than any

current or

potential

competitor.

Current product

offering

perceived as

weak on at least

one attribute by

a major

segment of

current or

potential

customers; firm

has sufficient

R&D and

marketing

resources to

introduce and

support a

second offering

aimed at the

disaffected

segment.

Current product

offering suffers

low awareness

and loyalty

among major

segment of

current and

potential

customers; firm

had marketing

and R&D

resources and

competencies

equal to or

greater than any

current or

potential

competitor.

No current

offering in one

or more

potential

application

segments; firm

has R&D and

marketing

resources equal

to or more than

competitors.

Current product

offering suffers

low awareness,

preference and

loyalty among

current and

potential

customers in

one or more

growth

segments;

firm’s

marketing and

R&D resources

and

competencies

are limited

relative to one

or more current

or potential

competitor.

Applied: For Louis

Phillippe

Using Van

Huesen

By NewPort Using Allen

Solly and Peter

England

Used by

Arvind Mills

Segment Premium

Formal

Premium

Formal

Casual

economy

Premium Semi-

formal and Mid

–Priced Formal

Saree and

handkerchief

segment.



7.6 Future Strategies for Madura Garments

From the knowledge gained on the strategies to be applied by the market leader, an

attempt is made to suggest the future growth strategies for the present leader, Madura

garments.

7.6.1 Analyzing Current Position

The positioning map shows how Madura garments has positioned its brands in the

menswear segment over the years. Each new offering has catered to a different segment

of the market, differentiated by price and style. From its current position, Madura

Garments has the option of going in for a new offering in the following sections:

Formal and Economy

Casual and Economy

Casual and Premium


??

??

??

FORMAL CASUAL

PR

EM

IUM

EC

ON

OM

Y

LOUIS

PHILIPPE

VAN HUESEN

PETER

ENGLAND

ALLEN SOLLY

ELEMENTS


7.6.2 Choice of Target market

The following evaluation matrix divides all the market segments in terms of their future

market attractiveness and present competitive position. The shaded areas indicate the

strengths of Madura garments and it should continue to target them as their primary point

of focus.

The casual premium wear segment is medium in terms of market attractiveness.

Additionally there is a lot of brand clutter and the whole market is captured by Arvind

Mills and reputed foreign brands.

The economy segment is high in terms of market attractiveness mostly because of

its huge potential customer base. There is lesser influence of other brands in these

segments and currently the unorganized market caters to maximum demand. Hence there

is a huge opportunity for Madura garments to enter this segment. Considering the past

Madura brand positioning and that the formal segment has been its area of strength, it is

recommended that Madura should first target the formal economy segment and then

expand towards the casual economy

Madura garments is a market challenger in the casual mid price segment with

Elements and Byford. This market also has high market attractiveness and therefore use

challenger strategies to counter the competition.



Protect Position

Mid Price Formal

(PETER ENGLAND)

Invest to build

Mid Price Casual

(ELEMENTS)

Build Selectively

Casual-Economy

Formal Economy

Build Selectively

Premium Formal

(VAN HUESEN)

Mid Price Semi Formal

(ALLEN SOLLY)

Premium Semi-Formal

(LOUIS PHILIPPE)

Manage for earnings

Casual Premium

Limited expansion or

harvest

Protect and refocus Manage for earnings Divest

7.6.3 Strategies for new market entry

Branding Strategy

The economy segment is not a new segment per-se and already has a few competitors.

Madura Garments does not have its presence in that segment till now and so according to

the matrix, the best strategy would be to start a new brand line targeted at the formal

economy segment.


Strong Medium Weak

Low

High

Medium

COMPETITIVE POSITION

MA

RK

ET

AT

TR

AC

TIV

EN

ES

S


Penetration Strategy


New Brand line

Cost Reductions

Repositions / improvements

Add to existing Brand line

New-to-world product

Repositionings

Casual & formal economy segment

NEWNESS TO THE FIRM

NE

WN

ES

S T

O T

HE

CO

MPA

NY

Low

Low


Situational

Variables

Mass Penetration Niche Penetration Market Skimming

Market

Characteristics

Large Potential demand

Relatively homogeneous needs

Short diffusion Process

Large potential demand

Fragmented market

Short adoption process

Limited potential demand

Long adoption process

Demand price-inelastic

Competitor’s

characteristics

Few potential competitors

Competitors have limited resources

Many potential competitors

Some competitors have substantial resources

Many potential competitors

Some competitors have substantial resources

Firm’s

characteristics

Strong product engineering skills

Strong marketing skills and resources

Sufficient financial and organizational resources

Limited product engineering skills

Limited marketing skills and resources

Insufficient financial and organizational resources

Strong basic R&D skills

Good sales and promotional skills

Limited financial and organizational resources

Short term

objectives

Maximize number of adopters in total market

Maximize number of adopters in target segment

Maximize number of adopters within limited investment

Intermediate

objectives

Attempt to preempt competition

Maintain leading position in target segment

Maximize ROI



Long term

objectives

Maximize ROI

Maximize ROI Withdraw

Recommendat

ion X X

Pricing and promotion strategies

Objective: Increase customer’s awareness and willingness to buy

1. Heavy advertising to generate awareness among customers in the mass market

2. Extensive sales force efforts to win new adopters and possible use of incentives to

encourage new product sales

3. Advertising and sales appeals stress generic benefits of the new product.

Objective: To increase customer’s ability to buy

1. Penetration pricing

2. Extended credit terms to retailers to encourage initial purchases

3. Heavy use of trade promotions aimed at gaining extensive distribution

Suggested new product launch

The new product must be launched in order to tap the large potential in the urban

economy segment as well as the rural segment. The market of the branded apparel is still

just 20% of the total market and so a huge potential can in be tapped if the product is

positioned, priced and promoted appropriately so that customers from the unbranded

segment can be attracted.

Madura is known to provide value at all price points and launching a product

priced lower than Peter England might dilute its brand equity and may even lead to

cannibalization. In order to counter this possibility, we suggest that the new brand be

named in hindi, the language of the masses. It should place itself at as a product meant

for strivers, the people who are determined to succeed.



The typical reference price for an unbranded economy shirt is approximately Rs.

150. Madura should price the new product close to this reference price in order to appeal

to the target segment.

The initial focus should be on increasing market share and building volumes

while the long objective can be profitability.

Suggestions

Brand name: Ajeya

ESP: “For the winner” (“Jo humesha jeetega….”)

Price range: Rs. 199 to Rs. 299

Target segment: Urban economy segment and Rural segment.

Marketing strategy: Low price, Heavy promotion

Promotion channels: Doordarshan, Regional Newspapers, Radio, local Cable

channel

Distribution channels: Peter England network + one more tier dedicated to

penetrate the rural segment.

Warning: the company should avoid excess capacity and overestimating demand in

order to avoid failure like Ruff n Tuff Jeans.



Market Challenger Strategy

An overall market leader can be a challenger in some segments for example Madura

Garments is a challenger in casual wear segment. The following framework of market

challenger strategies is taken up to analyze the future course of action that can be

followed by Madura garments with respect to this segment. This can serve as an example

of challenger strategies in such specific situations.

SituationalVariables

FrontalAttack

Leapfrog FlankAttack

Encirclement GuerrillaAttack

Primary Objective

Capture substantial repeat / replacement purchases from target competitor’s current customers; attract new customers among late adopters by offering lower price or more attractive features.

Induce current customers in mass market to replace their current brand with superior new offering; attract new customers by providing enhanced benefits.

Attract substantial share of new customers in one or more major segments where customers’ needs are different from those of early adopters in the mass market.

Attract a substantial share of new customers in a variety of smaller, specialized segments where customers’ needs or preferences differ from those of early adopters in the mass market.

Capture a modest share of repeat / replacement purchases in several market segments or territories; attract a share of new customers in a number of existing segments.

Market characteristics

Relatively homogeneous market with respect to customers needs and purchase criteria; relatively little preference or loyalty for existing brands.

Relatively homogeneous market with respect to customers’ needs and purchase criteria; but some needs or criteria not currently met by existing brands.

Two or more major segments with distinct needs and purchase criteria; needs of customers in at least one segment not currently met by existing brands.

Relatively heterogeneous market with number of small, specialized segments; needs and preferences of customers in some segments not currently satisfied by competing brands.

Relativelyheterogeneous market with number of larger segments; needs and preferences of customers in most segments currently satisfied by competing brands.



Competitor’s characteristics

Target competitor has relatively limited resources and competencies particularly in marketing and R & D; would probably be vulnerable to direct attack.

One or more current competitors have relatively strong resources and competencies in marketing, but relatively unsophisticated technology and limited R & D competencies.

Target competitor has relatively strong resources and competencies particularly in marketing and R & D; would probably be able to withstand direct attack.

One or more competitors have relatively strong marketing; R & D resources and competencies and / or lower costs; could probably withstand a direct attack.

A number of competitors have relatively strong marketing; R & D resources and competencies and / or lower costs; could probably withstand a direct attack.

Firm’s characteristics

Firm has stronger resources and competencies in R & D and marketing and / or lower operating costs than target competitor.

Firm has proprietary technology superior to that of competitors; firm has necessary marketing and production resources to stimulate and meet primary demand for new generation of products.

Firms’ resources and competencies are limited, but sufficient to effectively penetrate and serve at least one major market segment.

Firm has marketing R & D and production resources and competencies necessary to serve multiple smaller segments; firm has decentralized and adaptable management structure.

Firm has relatively limited marketing R & D and /or production resources and competencies; firm has decentralized and adaptable management structure.

Recommended for the casual mid price segment (Elements, Byford)

X

Encirclement Strategy

An encirclement strategy involves targeting several smaller untapped or underdeveloped

parts in the segment simultaneously. The idea is to surround the leader’s brands with a

variety of offerings aimed at several peripheral segments.

Accordingly, Madura should introduce varied line of sub-brands with features

tailored to the needs of the different segments within the casual mid price sector. These

sub-brands could be launched bringing in new or different fashions, trends and styles



within the segment. The casual segment is so vast in terms of fashion and style, that it can

be considered a full-fledged market in itself.



8. Unorganized market

The brand boom that has hit India has translated into the domestic-apparel market

growing at the rate of 15-17% per annum. This should make the people behind the Lees,

Arrows, Levi's, and Nikes very happy, but in reality they aren’t because branded apparel

makers are losing a huge chunk of revenues to counterfeiters. The unorganized sector

forms about 80% of the Rs 43,000 crores apparel industry.

There are four main kinds of threats from the unorganized sector

1. Counterfeited branded product (Poor copies of the original passed off as the real

thing)

2. Piracy - apparel piracy is when suppliers use original material and standard

designs, without the company’s consent. He says these copies are near replicas of

the original, and are priced much lower

3. Unbranded local products

4. Clones – e.g. Ropa for Rupa, Woodband for Woodland, Peter India for Peter

England etc.

The primary advantages with the unorganized sector are:

Ability to provide products at a very low price – with a discount on quality.

Counterfeiters can offer substantially lower prices because they do not have to pay

taxes and excise duties that manufacturers of genuine goods have to (Branded apparel

makers have to pay 12% excise and 15% octroi, besides 20 to 25% as dealer

commissions).

High demand for fakes in brand-conscious metros such as Mumbai and Delhi.

Clones fulfill the aspirational needs of the low-income segments.

8.1 How they bleed the organized sector?

Apparel makers such as Levi Strauss (India) lose about 15% of revenues to counterfeiting

Post purchase dissatisfaction in case of low quality clones and counterfeits.



A survey carried out by us personally at Bangalore’s posh Brigade market revealed that

most of the shops stocked more than 50% of unbranded products. Investigations revealed

that they get very good margins on sale of unbranded products

8.2 Strategies to handle the unorganized sector:

Presently followed strategies

Use of holograms to distinguish counterfeit products (not very successful)

Sale of the brand in select showrooms (not always practical)

Counterfeit detection cells working in co-ordination with law enforcement agencies –

Arvind brands and Nike have successfully employed this strategy.

Suggested strategies

Start an industry wide forum (on the lines of BSA-Nasscom alliance) to fight apparel

counterfeiting. This will lead to pooling of costs and higher efficacy.

Offer a product at a lower price point to graduate the consumer from the unorganized

sector to the organized sector. This strategy has been successfully adopted by HLL

(tiger biscuits) and Arvind Mills (Ruf-n-Tuf). To an extent Peter England also drew

customers from the unorganized sector.

Extensive advertising of the mass products (low priced) to create consumer awareness

– in order to make the consumers more discerning.

Increased interaction and more incentives to retailers and distributors – as is

successfully done by Indus League.



Appendix 1: Segmentation in Global Apparel Market

The pyramid in the figure shows the structure of the apparel market. The tip of the

pyramid, although very small in size, is a high price segment primarily dominated by the

apparel designers such as Georgio Armani, Versace, Ritu Beri, etc. These products can be

classified as high value added products. The base of the pyramid depicts the low-end

discount stores such as K-mart and Walmart, etc, where the need of the international

buyers is quantity with limited consideration to quality of the product. These buyers in

the apparel market segment can be classified as commodity buyers. The movement from

the top to bottom of the pyramid results in increased volumes and decreases in unit price

realization.


Haute Couture

Designer Shops

Department Stores

Mass Market

Discount Low-endChain Stores


Appendix 2: Timeline of major brands

Year BrandCompany /

MarketerSales (in Rs. Crore)

Growth in

%

99-00 00-01

1954 Zodiac Zodiac 125 150 20

1980 Flying machine Arvind Mills 23 32 40

1983 Proline Proline 10 22 22

1986 Park Avenue Raymond 165 200 21

1988 Vivaldi Bombay dyeing 65 80 23

1989 Louis Philippe Madura Garments 95 120 26

1989 Pepe Pepe 35 45 29

1990 Van Heusen Madura Garments 65 90 38

1990 Oxemberg Oxemberg 52 65 25

1990 Uni Style (USI) Uni Style (USI) 13 17 31

1991 Blackberry’s Blackberry’s 32 45 41

1993 Arrow Arvind Mills 48 55 15

1993 Allen Solly Madura Garments 55 85 55

1993 Lacoste Lacoste 35 45 29

1995 Lee Arvind Mills 60 68 13

1995 Newport Arvind Mills 60 67 12



1995 Color PlusAmbattur Clothing

(m) 37 54 69

1995 Levi’s Levi’s 38 45 18

1997 Excalibur Arvind Mills 21 40 90

1997 Peter England Madura Garments 70 90 29

1997 Freelook Polki Garments (m) 28 42 50

1997 Givo Givo 28 42 50

1998 TNG TNG 40 60 50

1998 San Frisco Madura Garments - - -

1999 Scullers Indus League 26 100 385

1999 Indigo Nation Indus League

1999 Parx Raymond 55 75 36

1999 Crocodile Crocodile 19 26 37

1999 Easies Easies 22 37 68

1999 Provogue Provogue 21 50 138

1999 Elements Madura Garments

2000 Wrangler Arvind Mills - 10 -

2000 Manzoni Raymond - - -

2000 Wills Sport ITC 5 -

2001 Be: Raymond - - -



- Lee Cooper Lee Cooper 32 40 25

- Pantaloon Pantaloon 9 12 33

- Weekender Weekender 40 45 12

- Woodland Woodland 28 40 43

- Elysee Madura Garments

- Byford Madura Garments

- Ruggers Arvind Mills

- Ruff & Tuff Arvind Mills

- Ironwood Indus League



Appendix 3: Levels of Competition

This figure shows how a customer tries to satisfy his secondary needs of making a

lifestyle statement. At the outer level once he has chosen garments, he follows a series of

steps to arrive at a decision: whether to go for branded or unbranded wear.


GARMENTS ORNAMENTSWATCHES

FOOTWEAR SUN GLASSES CAR

READY TO STITCH

READY TO WEAR

FORMAL SEMI FORMAL

ETHNIC SPORTSWEAR

KNITWEAR DESIGNER WEAR

UNDERGARMENTS CASUAL

HIGH LOW PRICE PRICE

MID PRICE

BRANDED

UNBRANDED


Appendix 4: Results of ORG MARG Survey

Segment Leader (Rank 1) Challenger (Rank 2) Challenger (Rank 3) Size (Rs Cr.)

Branded Womens Wear

Western wear Benetton Lee Allen Solly -

Branded jeans Lee Levis’ Pepe 83.8

Branded Kidswear

Kidswear Weekender Benetton Gini & Jony 545

Branded MensWear

Shirts Allen Solly Peter England Louis Philippe 2,016

Trousers Allen Solly Lee Park Avenue 675

Jeans Lee Levis’ Killer 691

Suits Park Avenue Raymond Givo -

Branded SportsWear

T-Shirts Adidas Lee Nike -

The tables and the graphs shown below have been drawn based on the perception of

people from actual surveys.







Appendix 5: Untapped Opportunities

There is huge untapped market mainly among the women’s wear and kid’s wear. A

potential growth of 40 to 60% in almost all segments of women’s wear just through

branding can be achieved. There is negligible branding penetration in Indian ethnic wear

segment.

Categories with considerable potential in womens’ wear:

Saris and Salwar Kameez (Indian ethnic wear)

Lingerie and intimate clothing

Maternity wearSarisMarket estimated to be worth Rs 7,100 Crores, of which branded

30%

Account for 44% in value terms of total spent in women’s wear.

Indian women, despite adding on contemporary apparel, will buy more saris

Salwar Kameez

Current market estimated to be Rs. 1,900 Crores

Potential for branded segment to be worth over Rs. 1000 Crores

Room for 4 to 5 national brands, each worth Rs. 50 – 100Crores

Maternity wears

Estimated market size is Rs.1000 Crores p.a (calculated at 3.3 million SEC A

pregnant women spending Rs. 3000 on apparel during pregnancy)

Product benefits sought by consumers conducive to branding (comfort, quality,

emotional involvement)

Attractive from brand perspective (standardization, manageable SKUs, mass

manufacturing)

Lingerie and Intimate Clothing

Women’s inner wear is the highest growing apparel category across all income

groups

Market for ready made lingerie and intimate wear is valued at Rs. 1500 Crores, of

which Rs.350 Crores is branded.



Currently, lack of specialized and organized retail ambience and efforts to educate

and upgrade consumers.

Product benefits sought by consumers conducive to branding (fashion, comfort,

quality and performance, element of fantasy)

Opportunity from brand perspective (standardization, manageable SKUs, mass

manufacturing)

Children’s Wear

Total market size for children’s wear estimated to be Rs. 7200 Crores, of which the

branded segment accounts for Rs. 550 Crores.

Very few national brands

Categories with considerable potential:

o School uniforms

o Infant clothingSchool uniformsCurrent market size estimated to be Rs.1750

Crores. Assuming a 30% conversion into branded wear, the potential market can

be worth Rs.500 to 600 Crores.No fashion related unpredictability

Opportunity of offering consistent and good quality products at a good price (with

maintenance service as a differentiation)

Infant Clothing

Estimated market size for branded infant clothing is Rs. 1000 Crores (calculated at

Rs. 3000 over two years X 3.3million infants born in SEC A families).

Market dominated by small retailers, with hardly any national brand

Brand and quality consciousness among parents for surrogate products (diapers, toys)

indicative of a ready market.

Product attributes sought by parents (comfort, quality, emotional involvement)

conducive to branding.

Attractive from the brand perspective (standardization, value and quality

propositions, mass manufacturing)

There there is opportunity in branded women’s wear and children’s wear for Rs 6200

crores waiting to be tapped



..



Bibliography1. Marketing Management, Millennium Edition, by Philip Kotler, Prentice Hall of India.

2. Marketing Strategy: Planning and Implementation, by Orville C. Walker, Jr., Harper

W. Boyd,Jr., Jean-Vlaude Larreche, Irwin

3. Competitive Strategies, Michael E. Porter

4. Garment industry in South Asia, Rags or Riches? , by Gopal Joshi, ILO Delhi.

5. Marketing Strategy:Planning and Implementation, Orville C. walker, Harper W.

Boyd, Jean-Claude Larreche, Irwin.

6. Competitive Advantage, by Michael E. POrter, Collier Macmillan Publishers

7. Competitor Intelligence, by Andrew Polland, Pitman Publishing

WebLinks

1. http://www.edenim.com/jeans/lee.htm

2. http://www.mii.ie/education/courses/course302.asp

3. http://www.vormit.nl/nyenrode/uittreksel%20MS.doc

4. http://www.jeansoasis.com/

5. http://www.indiaapparelfair.com/overview.html

6. http://www.fibre2fashion.com/trends/brands/major_brands2.html

7. http://www.blonnet.com/bline

8. http://www.indian-express.com/ie/daily

9. http://imagesfashion.com

10. http://www.aandm.com

11. http://crisinfac.org/

12. http://www.blonnet.com/up/200002/00020440.pdf

13. http://www.indusleague.com

14. http://apparel.indiamart.com/index.html

15. http://www.imagesfashion.com/New collections.htm

16. http://www.expresstextile.com/20020912/corporate3.shtml

17. http://shop.indiainfo.com/layouts/templates/ default/midhome.asp?storeid=595

18. http://www.just-style.com/features_detail.asp?art=418



19. http://www.domain-b.com/companies/companies_i/indian_rayon/

19991223indian_rayon_madura.html

20. http://www.hinduonnet.com/thehindu/2000/ 10/08/stories/0608000a.htm

21. http://www.business2media.com/home/ pressrelease.asp?b2mid=1479

22. http://www.blonnet.com/businessline/2001/ 09/30/stories/143069q1.htm

23. http://www.adityabirla.com/adityabirla/group/news/001221.htm

24. http://www.business2media.com/home/pressrelease.asp?b2mid=996

25. http://www.deccanherald.com/deccanherald/sept10/yh7.htm

26. http://www.responservice.com/archives/feb2002_issue1/ business/retail.htm

27. http://www.imagesfashion.com - Business of Fashion Online

28. http://www.arvindmills.com/

29. http://www.expresstextile.com/20020912/corporate2.shtml

30. http://www.blonnet.com/blnus/02311506.htm

31. http://www.ourindia.com/oi-news/nw4.htm

32. http://www.asiannet.com/asia/page1/oa17.htm

33. http://www.financialexpress.com/fe/daily/ 20000707/fco07084.html

34. http://www.icfaipress.org/Jan02/CF.htm

35. http://www.domain-b.com/people/profiles/ 20001025sriram_srinivasan.htm

36. http://www.people-one.com/hub/topdownvision/ topdownvision-sriram.asp

37. http://www.indigonation.com/contact.html

38. http://www.indusleague.com

39. http://www.projectstoday.com/archivelist.asp?m=8&y=2000

40. http://www.indian-express.com/ie/daily/19990921/ibu21127.html

41. http://www.responservice.com/archives/jun2002_issue2/ media/newsmkr.htm

42. http://www.brand-comm.com/clients.htm

43. http://www.businessworldindia.com/archive/200417/mktg1.htm

44. http://www.raymondsboats.com


Apex Final 2

Documents