Bo concept india

Market economist 2009Mec 2v4

A Final Exam Project

on

Submitted by: Guidance by:

Ali Adiyaman Charles David Mpengula

Gurudatta Lamichhane

(Keynotes:83 350)

The AP Degree in Marketing Management

Niels Brock Business College

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Hand in: 1st December 2009

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Executive summary

BoConcept is an international retail-oriented concept. It has large and attractive product range

comprising design furniture and lifestyle products for household furniture. The luxury,

sophisticate and comfortable furniture indicate its brand. Focuses on development, support and

supply global franchise based retail chain which operates in 47 countries with 247 brand store

and 109 BoConcept studios, with its core competences.

Recently company has entered some new markets in Asia Pacific countries, China, Singapore

and the next is India in December 2009. The problem under study describes the strategies

BoConcept can adopt to enter Indian market.

The report objective set to identify competitive level of furniture and households industry in

Mumbai and consumer behaviour.

In this research both primary and secondary data have been used through descriptive and

explorative research design. Researchers focused on Mumbai County but since the primary data

was very difficult to reach (because of the distance), secondary data are mostly gathered.

In addition different marketing model were used to analyse both external and internal factors for

BoConcept. These were SWOT analysis (price, product, promotion, and place), Competitor

analysis, Growth strategies and Consumer behaviour analysis. Internal analysis was consisting of

the activities within the company like, production, company organizational structure, and support

activities. SWOT analysis described both internals as well as external analysis of the company.

Competitor analysis was set to identify the competitors both domestic and international major

players and to know about what their position, strategy, weaknesses and further what kind of

threat can be expected from them. Consumer analysis made through questionnaire by internet

with the Indian who live in India and with the Indian who live in Denmark. The researchers tried

to find out whether there are possibilities for BoConcept to expand it is market in Mumbai and

in the other major cities of India or not and that’s made through the analysis mentioned.

According to researches growing stability of the Indian economy, Indian young and well

educated population, income and the consumer behavioural developments make India possible

for BoConcept as mentioned in conclusion of the report.

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Acknowledgement

We hereby our kind regards and thanks to our guidance teacher Charles David Mpengula who

provides us valuable suggestions in regard to guidance of our project work. Our sincere thanks

to all the Indian respondents, who participate in our online survey and send their valuable

answers.

We would like to thanks all the Indian resident who are currently living in Copenhagen and

giving their valuable opinions in regards to our face to face interview.

Our special thanks to Morton and Christian from BoConcpet, Denmark who gave us information

regarding BoConcept India.

Yours Sincerely

Group Members

Ali Adiyaman

Gurudatta Lamichhane

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Contents1.0. Introduction..........................................................................................................................6

2.0. Problem field........................................................................................................................7

2.1. Problem formulations...........................................................................................................7

2.2. Research objectives..............................................................................................................8

2.3. Demarcations and interpretation of the problem formulation..............................................8

2.3.1. Research method........................................................................................................9

3.0. Methodology.......................................................................................................................10

3.1. Theories...........................................................................................................................10

3.1.1. Porter`s industry competition..................................................................................10

3.1.2. Porters Generic strategies........................................................................................11

3.1.3. SWOT theory...........................................................................................................11

3.1.4. Intermediate entry modes........................................................................................11

3.1.5. Growth strategy (The Ansoff Matrix).....................................................................11

3.1.6. PEST theory.............................................................................................................11

3.1.7. Consumer behaviour theory.....................................................................................12

3.2. Primary Data...................................................................................................................12

3.3. Secondary Data...............................................................................................................12

3.3.1. Company internal analysis.......................................................................................13

3.3.2. SWOT Analysis for BoConcept..............................................................................16

3.3.3. Intermediate entry mode: Franchising.....................................................................17

3.4. External Analysis............................................................................................................22

3.4.1. Macro Environment: PEST Analysis......................................................................22

3.5. Micro Environment: Industry Analysis..........................................................................26

3.5.1. Trends......................................................................................................................27

3.5.2. Competition Analysis (Porters five forces).............................................................28

3.5.3. BoConcept market growth stragety.........................................................................31

3.5.4. Competitive advantage (Porters Generic strategies)...............................................32

3.5.5. Market Structure In Mumbai...................................................................................32

3.5.6. Competitors analysis................................................................................................33

3.5.7. Sum up from Competitors’ profiling.......................................................................39

3.6. Consumer pattern............................................................................................................41

4.0. Empirical Data and findings analysis.................................................................................42

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4.1. Primary Data Analysis....................................................................................................42

4.2. Understanding the consumer..........................................................................................49

4.3. OT ------> PEST............................................................................................................50

5.0. Evaluation...........................................................................................................................51

5.1. Industry competition.......................................................................................................51

5.2. Consumer behaviour.......................................................................................................52

5.3. BoConcept Indian market (A perceptual map)...............................................................53

6.0. Suggestions for solutions....................................................................................................54

6.1. Marketing strategy to adopt in the future........................................................................54

6.1.1. Product strategy:......................................................................................................54

6.1.2. Price strategy:..........................................................................................................54

6.1.3. Promotion strategy:..................................................................................................55

6.1.4. Place (Distribution) strategy....................................................................................55

7. Conclusion.............................................................................................................................56

8. Bibliography..........................................................................................................................58

9. Table of enclosure.................................................................................................................59

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1.0. Introduction

BoConcept Holding A/S is international furniture retail Company. The company was formerly

known as Denka Holding A/S and changed its name to BoConcept Holding A/S in 2006. The

company is founded in 1952 in Denmark. The head quarter of the company is located in

Herning, Denmark.

Current president and CEO in the company is Viggo Mølholm who is also group president.

Viggo Mølholm described BoConcept as ''international global design" suited to any

cosmopolitan area populated by world travelers.

The company is producing furniture and lifestyle products for private homes. It has core

competencies in design, branding, store management, sales model optimisation and supply chain

management where company concentrates on developing, providing support to and supplying

goods to its global franchise-based retail chain.

Mainly BoConcept holding focuses on market expansion globally through franchisee.

BoConcept holding a/s has 138 franchisee and those franchisee are driving 247 brand stores and

109 studios in 50 countries. Company has about more than 2.000 staffs.

Basically BoConcept Holding A/S operates a chain of retail furniture stores or studios worldwide

primarily under the ‘BoConcept’ brand name. The company designs, develops, manufactures,

and sells various types of furniture. Its products include wall systems, wall mount units,

TV/stereo units, coffee tables, occasional tables, sofas, sofa beds, armchairs, footstools, dining

tables, dining chairs, bar stools, sideboards, cabinets, beds, night stands, wardrobes, mattresses,

mirrors, shelves and book cases, chests of drawers, home office furniture, and a range of

accessories. 1

1 Information gathered from www.boconcept.com

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2.0. Problem field

BoConcept is an international retail-oriented concept. It has large and attractive product range

comprising design furniture and lifestyle products for household furniture. The luxury,

sophisticate and comfortable furnitures indicate its brand. Every year it explored new market in

different geography. BoConcept furniture and accessories are designed with the 'urban-minded

customer' in mind and created to satisfy individual customer needs. According to company

growth strategy, this year Boconcept has got three new market in Mexico, Singapore and India.

India is one of the biggest market leaders in the south Asia. The Indian economy weathered the

financial turbulence well and grew at 6.7 per cent in 2008/09. The manufacturing growth is

increasing. Although the world economic crisis has effect in 2007/8, the Indian market is

slightly going to positive and market share is increasing.

BoConcept has decided to lunch their business through franchising. Recently they are going to

launch their market share in Mumbai, India in December 2009. Mumbai is one of the top city of

India. Boconcept is strengthening its market position. Boconcept`s survival strategy has been to

expand its offerings and cut prices - by up to 25% on some products.

2.1. Problem formulations

We define the problem questions for BoConcept in India as follows:

What strategy should BoConcept follow to be able to

compete in India?

To support main question we have formulate some sub questions. They are as follows:

How do Indian consumers buy their household furniture?

How can BoConcept expand its market by understanding this

buying behaviour?

What factors makes India possible for BoConcept?

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2.2. Research objectives

Primary purpose of research is to submit to our college as a final project. As a final project we

have supposed to include most of the problem regarding to the main problem. The research what

we did is providing following objectives.

o To analysis BoConcept´s competitive level of furnishing in Indian market and identify its

competitors and their weaknesses. Hence BoConcept can use these weaknesses as their

strength to penetrate the market.

o To analysis the business and consumer trend in India. So that BoConcept can run its

business through this perspective.

o BoConcept assesses the factors that influence the buying behaviour of the target group

for example decision maker who influences the buying decision.

o To analysis and find out how to promote BoConcept products.

o The determine the price levels in Indian local market.

o To know which category furniture should be supplied more to the Indian market.

2.3. Demarcations and interpretation of the problem formulation

BoConcept is A/S is an international retail-oriented concept holder with a full product range

comprising furniture and life style products for private homes. With its core competencies the

company concentrates on developing providing support to and supplying good to its franchise

based retail chain. The company expanding its market around the world through franchise based

retail chain. By adopting this strategy BoConcept expects to be able to reach the groups supply

and quality objectives and provide a flexible and cost effective supply set up as a basis for future

growth and expansion without having to invest more heavily in capacity increases.

India is one of the biggest market in the Asia pacific and world. The economy has grew very fast

recently in India and also GDP per capita has increased significantly despite the financial crises

around the world, so when we look at the picture we can see that the number of companies wants

to invest in India growing every day, and probably all the global minded company have some

plan for a huge market like India which has second largest population in the world today, and

BoConcept is one of the company that will invest in this market. The company open its first

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store in December 2009 in Mumbai so that our study will focus mostly on that area. The target

group is all the people from 19 to over 60 who live in Mumbai and we will try to find out what

are the possibilities for BoConcept in Mumbai and to see, will BoConcept be able to grow its

market during the coming years and which growth strategy will they follow in order to expand

the other major cities in India or which growth strategy will they follow and so on…

Today Mumbai is the largest city of India and considered the financial capital of country as it

generates 5% of GDP. It serves as an economic hub of India and has witnessed and economic

boom since the liberalization of 1991, the finance boom in the mid- nineties and the IT, export,

services and outsourcing boom in 2000s. Mumbai has been ranked as 48 th on the worldwide

centres of commerce index 2008. In April 2008 Mumbai was ranked 7th in the list of ‘top ten

cities billionaires’ by Forbes magazine.

Furthermore this report seeks to find out what are the possibilities for BoConcept in India, will

they be able to compete in this market, who are the competitors what are their strategies how is

the consumer behaviour in India.

2.3.1. Research method

- Limitations

- Weaknesses

To enable the report and make more consistent, we have used primary research method to collect

Data. This means it is more consistent with our research questions and research objectives.

Since we had limited time and lack of budget; the project work could not be taken up to details.

However the necessary data required for the project have been collected through primary and

secondary Data research method to have reasonable understanding of the project.

Since we are students studying in Denmark, it was really complex to get primary data from

Denmark to India. However we tried to reach Indian people throughout different research

methods.

One major weakness in the quality and scope of information gathered through primary data

sources is that we were fully dependent on the willingness and ability of respondents.

Furthermore we are dependent on secondary research through the E-tools, such as different

business websites, newspapers, magazines,blogs etc.

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3.0. Methodology

This section of the report is just giving some roughly information about the stages that we went

through while writing the thesis. This report tries to identify the Data we gathered about

company BoConcept and the market they are entering in and finally how we gathered them as

primary Data, secondary Data (desk research).

As we know BoConcet is expanding its market around the world and in December 2009 they are

going to open their first store in India (Mumbai) which is one of the biggest market in the Asia

pacific.

First of all we have conducted a survey through internet to reach the Indians live in India and

face to face with the Indian who are living in Denmark. We want to find out about the

dimensions of buying behaviours, how Indian consumer are buying, who is important in the

buying decision, what are their choice criteria, where do they buy, when do they buy.

Furthermore we are going to discuss briefly Macro environment (PEST analysis), Micro

environment (customers, competitors, distributors suppliers), SWOT and competitor analysis of

the company regarding to Indian marked throughout secondary data. In this report we are using

both exploratory (unstructured) and descriptive (structured) as research design. We use

descriptive because the problem is clear and well understood and we use exploratory because we

gathered a lot of information from secondary research Data.

3.1. Theories

3.1.1. Porter`s industry competition

Porter's industry competition (Five Forces model) provides suggested points under each main

heading, by which we can develop a broad and sophisticated analysis of competitive position, as

might be used when creating strategy, plans, or making investment decisions about a business or

organization.

The Porter´s model enables us to find out about the competition situation in Mumbai, and to

know how attractive the industry is, what are the challenges, what are the opportunities etc.

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3.1.2. Porters Generic strategies

A ways of achieving a competitive advantage

Differentiation strategies are usually associated with premium price and higher than average cost

for the industry due to the extra value for the customer.

3.1.3. SWOT theory

The swot matrix theory helps visualize the analysis. When executing this analysis it is important

to understand how these elements works together. When an organization matched internal

strengths to external opportunities, it creates core competencies in meeting the needs of its

customers. In addition, an organization should act to convert internal weaknesses into strengths

and external threats into opportunities.

In order to set our marketing strategy in Mumbai according to competition, we are going through

SWOT analysis. To know industry`s strengths, weaknesses, opportunities and threats. And how

can BoConcept strengths their weaknesses and turn the threats to the opportunities according to

the industries.

3.1.4. Intermediate entry modes

There are several market intermediate entry modes such as export, licensing, joint venture,

partnership, franchising etc. Among them BoConcept has chosen intermediate through

franchisee to establish its new market in Mumbai, India.

3.1.5. Growth strategy (The Ansoff Matrix)

Ansoff`s product/market gird strategy is very popular theory in order to business growth

opportunities. BoConcept is also used this strategy to enter into new market. BoConcepts takes

use of different growth strategies over the years. BoConcept develop new market in order to

expand its business. Company introduces its existing products in new foreigner markets.

3.1.6. PEST theory

Before announce market in the new country, it is always have to analysis the country`s different

factors and make research.

Through the pest analysis we are analysing the political, economic, social, technological, legal

and environmental factor in India.

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3.1.7. Consumer behaviour theory

The field of consumer behaviour is enormous, and highlights the importance of the customer at

the centre of the marketer's universe. Each consumer is unique with different needs and wants

and buying choices and habits are influenced by habit, and choice that are in turn tempered by

psychological and social drivers that affect purchase decision processes. It is a complex multi

dimensional variable.

Knowledge of consumer behaviour is critical for influencing when making decision to purchase

a product. The general structure and concept of consumer behaviour is fragmented into four

major categories external influence, internal influence, self concept and lifestyle decision

making. External influences include culture, subculture, demographics, social status, reference

group, marketing activities and family. Internal influences include perception, learning, memory,

motives, personality emotions, and attitude. The self concept and lifestyle produce needs and

desire, many of which consumption decision to specify.

3.2. Primary Data

For this research report we chose Qualitative and Quantitative research method to gather

information required. Primary data is collected through face to face interviews and online survey.

We have prepared 12 questions (open and closed ended questions) and asked through online

survey and face to face interview randomly. We have asked questionnaires to consumer to

understand their need level, expectation, behavior. The conducted survey represents whole India.

To collect more and more people we have consider big size area. Still we have focused people

from Maharastra region, which is regional area and covered several big cities for example:

Mumbai, Chhenai, Pune, Satara, Solapur, Sangli and Kolhapur. But unfortunately we could not

find a lot people from Mumbai.

3.3. Secondary Data

The information for the desk research was gathered from different websites, blogs and

magazines.

We have gathered Data in order to find out what are the possibilities for the BoConcept in Indian

market. To find out consumer requirements, the researchers want to search information to find

out the competitive advantage within the target groups and how are those groups buying

behaviour. Those information was gathered from different websites: Euromonitor, Datamonitor,

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Indiastat, Boconcept, OECD, several Indian WebPages, several business and economics

WebPages, Wikipedia and books etc.

The researcher gathered information about Indian consumer trend to get competitive level on the

furniture industries.

Through the desk research the researcher got a lot information which led us to concrete and

focused to the research problem area. We have interviewed through telephone and emailed with

company regional director of Bo Concept A/S, Denmark.

3.3.1. Company internal analysis

BoConcept has full product range comprising furniture and lifestyle products for private homes.

With its core competencies in design, branding, store management, sales model optimisation and

supply chain management, the company concentrates on developing, providing support to and

supplying goods to its global franchise-based retail chain, which at the latest consisted of 138

franchisee driving 247 brand stores and 109 studios in 50 countries. As of April 30, 2007, it

operated 350 brand stores and 150 studios.

This is the structure where and how company operates its business: Company name ´´BoConcept

Holding A/S´´, brand name ´´BoConcept´´. Currently company operates 1 production unit, 3

distribution unit and 7 subsidiaries. 2

2 Source: Information gathered from www.boconcept.com , www.boconceptholding.com (annual report, business base, vision/mission, presentations)

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Figur 1. Source: BoConcept annual report 2007/08

- Product range, sourcing and supply chain management

BoConcept is oriented to urban design. BoConcept`s product range comprises furniture and

lifestyle products. Its activities include design, branding, store management, sales model

optimization and supply chain management (SCM). It concentrates on developing and providing

support to and supplying goods to its global franchise-based retail chain. Through its brand

stores and studios, it has a presence on approximately 51 markets worldwide. In 2008 and 2009,

the Company entered six new markets: Egypt, Mexico, Singapore, Qatar, Italy and Switzerland.

It mainly operates through wholly owned subsidiary BoConcept A/S, which specializes in the

development, production and distribution of furniture and accessories, through its seven

subsidiaries: BoConcept Retail UK Ltd, BoConcept France Sarl, BoConcept Retail Poland sp. z

o.o., BoConcept Japan KK, BoConcept North America Inc, BoConcept Germany GmbH and

BoConcept Danmark A/S. BoConcept committed to satisfy the target group`s wishes through its

product range and design.

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It has unique products with ambitious target. BoConcept works closely with suppliers and its

own production facilities in the development and creation of new collections. BoConcept's

manufacturing and sourcing strategy is to maintain a competitive own-production output in core

production areas while purchasing other processes from subcontractors.

BoConceopt develop and keep business relationships with suppliers who are ensure a critical

mass and show up close integration of interest.

By adopting this strategy, BoConcept expects to be able to reach the group's supply and quality

objectives and provide a flexible and cost effective supply setup as a basis for future growth and

expansion without having to invest more heavily in capacity increases etc. BoConcept's own

production output includes board furniture from its production facilities in Ølgod and Herning.

BoConcept is continuing to invest in technology and organization. It has group's own board

furniture production facilities in order to maintain competitiveness. It has a flexible supply chain

and increase capacity as the number of Brand Stores increases and group revenue rises.

- BoConcept University

Focus on career and educational opportunities via BoConcept University:

The centre for chain staff training and development is a key to improving customers' shopping

experience and thus increasing same-store-sales. Customised training programmes for

salespeople, store managers and retail operations managers have been set up and are continually

being improved. BoConcept University holds regular courses in brand value, sales and service,

product knowledge, interior design assistance, human resources management and store

management.

- Mission and vision

Vision

To make BoConcept® no. 1 brand within urban interiors.

Mission

Through passionate and persistent performance we make customised and coordinated design

furniture and accessories affordable to the urban-minded customer

- UN Global Compact

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BoConcept has joined and supports the UN Global Compact and its ten principles relating to

human rights, employee rights, respect for the environment and a prohibition against corruption.

3.3.2. SWOT Analysis for BoConcept

Strengths

o Global brand focused on franchise

o Fast growing company more than 216 stores in 51 markets

o Good service and innovative products

o Every year new collection

o Ambitious targets: to be no. 1 brand in urban design and interior.

o The campaigns reach the consumers in every market with help of marketing-employee on

each market

o The promotion is developed in Denmark and shown in the whole world

o Wide selection, which suits every home

o Direct & targeted dialogued with the customers

o Professional webpage to sell their products with local languages and developing webpage

over the next years

o Good and modern designing and good positioning on market

o Same target group all over the world

o Franchisee is more involved in Franchise conference.

o Trained and educated employees

o Bigger market share, better than expectation

o Three distributions centres in secure and modern countries: Ølgod and Herning

(Denmark), New Jersey (USA) and Tokyo (Japan) and opening next Shanghai (China)

o Home delivery gives better service and delivered on time

o Close partnership between BoConcept and supplier

Weakness

o Expensive products

o To many costs connected to the value chain

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o To many medias to reach target group

o Expensive logistic cost

o Geographically distance between stores and distribution centres which is costly

o To depended on the internet

o Franchise contracts is difficult to cancel

o 3 – 5 million kroner to open a BoConcept Franchise

o If the stores franchise does not sell enough BoConcept lose money.

o Different price level in every country

o Little collection

o The design is made a year before they are introduced to the market

Opportunities

o Satisfied customers who write on blogs on the internet

o 1/3 of those who visit the homepage has searched on ”design sofa”, and got aware of

BoConcept

o More and more invent on design and quality

o New investors are ready to open new BoConcept stores in new markets

o Focused on e-commerce, where India is also far behind on IT technology

o Market expansion in another big cities and possibilities in SAARC countries

Threats

o Heavy competition from organised and unorganised sector

o Well established local competitors such as: Bombay swadeshi store, Bombay dyeing,

Godrej, Welspun, Style spa

o Threats from new foreign competitors who are entering into Indian market such as: from

China, Malaysia, Italy, Germany, Singapore

o The Financial-crises who threat with a decline

As we can see that BoConcept have strength along with opportunity, so that they have to use

their strength to catch these opportunity. So that BoConcept have to focus on overcome or

minimize weakness and avoid their threats.

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3.3.3. Intermediate entry mode: Franchising

Franchising is a part of intermediate entry mode for BoConcept, which is very huge.

Franchise is an effective form of business for companies that want growth on a secure rational,

effective and in a business economic way. Besides that franchising is one of the most stabile

methods for business-development.

The method of the business is based on the best of both parts on the negotiation table. If

franchising is used right it is the realization of the ideal for about the best co-operation is when

both parts feel like winners.

The people who have rights for the concept can on terms hand over the copyright to run a

business according to the line of directions that has shown to be a success according to the

concept. Both parts are common to archive success.

Boconcept has unique franchising model. It`s business development is through franchising

around the world. It has ambitious aim to be No. 1 brand within urban interiors. Its franchise

model is a well-tested and successful concept. It has close screening, evaluation and selection of

potential franchisees.

The selection process goes by choosing a potential franchisee through among many, taking into

consideration factors where all the individual skills and competencies of the franchisee are

evaluate, assessing and approving their business plan of the particular unit, its location and

financial status. On the process to selecting franchisee, there is mutual commitment and

acceptance of the concept, trading terms and focus on earning of the brand stores. Where there is

a franchise agreement between BoConcept and an applicant, roll-out of the individual project

plan will commence according to a set procedure. The agreement is normally has five years with

the option for renewal and other things. There is state entrance fee and marketing agreement

between two parties.

In addition, it is the franchisee's obligation to invest in setting up a Brand Store in accordance

with guidelines dictated by BoConcept. The franchisee is the one who holds the lease. Franchise

rights are granted in accordance with a cluster strategy in which franchisees are typically granted

the right to a geographical area with a potential of two to five Brand Stores.

BoConcept's franchise model is very attractive indeed, and this is supported by the fact that an

increasing number of BoConcept current franchisees are planning to open additional Brand

Stores. One of the reasons for this is that the stores have a positive cash flow from day one, as

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customers make prepayments for goods sold, and the franchisees are granted credit on shipments

from BoConcept. The typical store will break even in its first year, and it will generate a profit in

its second year. BoConcept's target is for 90% of its stores to have an operating margin of 10%

by the end of the third year. The intention is to reach this target through a large-scale support

organisation for franchisees concentrated around the retail operations managers (ROMs), who

are organised in regional market organisations and who also offer support to the stores' ERP

system, Axapta, and control the national and regional marketing effort. 3

There are some advantages and disadvantages with this

Advantages Disadvantages

- BoConcept themselves controller

- the marketing strategy have to

be implemented

- Control the target group

- More possibilities for profit

- BoConcept have to pay all the

marketing costs

- a big sales organization

- have all the risk

Timeline BoConcept franchising model:

3 www.boconcept.com

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Figure 2, Source: BoConcept public presentation 2008

Supports BoConcept to franchisee:

Following supports are provided by BoConcept to franchisee

o Coordinated product and accessories program with centralized warehouse handling

offering millions of product combinations to customers

o Centralized branding and marketing platform – Catalogue and web-site (decoration and

trend inspiration)

- Store design and planning

- Events and campaigns

- Ads and newsletters

- PR and communication platform

o Yearly retail conference (BiC) with introduction of new product range, new concepts,

marketing activities, workshops etc.

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o Continued training and education of sales staff via BoConcept University

o Full IT platform

o Dedicated local Retail Operation Manager (ROM) to ensure ongoing optimal operational

performance (store report, budgeting, action plans, best practice sharing)

Requirement for the stores:4

BoConcept Brand Stores are typically between 5,000 - 6,000 sq. ft. The first Brand Store opened

in Paris, France in 1993. Now there are more than 380 sales units around the world of which

more than 220 are Brand Stores.

There are several benefits to be a franchisee with BoConcept. Where BoConcept stands as:

o Proven and certified franchise concept

o Experienced and solid franchisor

o Local supporting market organization

o Carefully defined target group

o Brand and traffic-generating marketing kit

o Store fronts and layout combining inspiration and turnover

o A product collection characterized by its customized and coordinated design affordable to

the urban-minded shopper

o A BoConcept University department creating the education platform for BoConcept staff

o Value-based leadership style with a focus on education, service and personal

development

o Efficient operation systems and tools

o One stop shopping – one stop shipping

o High turnover per square foot and high gross margin = profitability

4 www.boconcept.com

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3.4. External Analysis

India is a dynamic country with divers in regional and cultural differences. It is a country with

second biggest population in the world. India is a democratic country with economic

liberalization in 1991. Which led India toward economic growth, closer relation to North

America and Western Europe.

According to the statistics, Indian economy has not been as affected by the global economic

downturn as other countries; the government faces a challenging task in terms of speeding up

reforms and encouraging growth.

Economic reforms previously initiated in 1991 have led to robust growth in the economy. The

gross domestic product (GDP growth in India has averaged 8.4% during 2003–08, significantly

higher than that of the 5.7% per annum experienced during the 1980s and 1990s. In recent times,

the services sector has slightly decline due to the global economic downturn, from 15.7% in

2007 to 12.5% in 2008.

Indeed, 2007 saw the largest ever foreign direct investment (FDI) and portfolio investment

inflows. The outflows were also substantial, as Indian companies went on an acquisition spree in

the global markets. Indian companies are now establishing a global footprint, which is evident

from acquisitions such as Tata Steels' purchase of UK-based company Corus.

India ranked 128 on the list of 177 countries in human development in 2007, and this ranking has

declined continuously over the last two years, when the economy has grown at its highest rates.

India has an exhaustive legal framework governing all aspects of business. The regulatory

regime in India has comprehensive laws that have been amended from time to time, which has

benefited business entities, although the implementation of these regulations continues to be a

major issue.

India is endowed with rich biodiversity, and maintains a comprehensive regulatory framework

and institutions for the protection of the environment. However, implementation remains

sluggish.

3.4.1. Macro Environment: PEST Analysis

India

Political/Legal Factors

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o India is the biggest democratic country in the World. The government type is federal

republic.

o Based on English common law; judicial review of legislative acts; accepts compulsory

ICJ jurisdiction with reservations; separate personal law codes apply to Muslims,

Christians, and Hindus.

o The political Situation in the country is more or less stable.

o India is fighting several times with Pakistan for the reason of geography and terrorism.

That is not impressive in order to attract new foreigner markets. This led foreigner trade

not investing in business.

o Low access to banking facilities.

o Government is facing pressure to liberalize the duty structure.

o India still involves more legal fulfilments.

o Changes in laws and regulations, including changes in accounting standards, taxation

requirements (including tax rate changes, new tax laws and revised tax law

interpretations) and environmental laws in domestic or foreign jurisdictions.

o Without limitation, competitive product and pricing pressures and their ability to gain or

maintain share of sales in the global market as a result of action by competitors.

o Political conditions, especially in international markets, including civil unrest,

government changes and restrictions on the ability to transfer capital across borders.

o Furniture imports into India have to pass through the procedure of Customs clearance as

they cross the Indian border. The goods are examined, appraised, assessed, evaluated and

then allowed to be taken out of the charge of the customs by the importer. The importers

need to present Originals of Commercial invoice, packing List, Certificate of Origin, and

Bill of Lading.

Sum up

o Strong democratic setup

o Stable macroeconomic policies

o Improved relationships with Europe and North America

o Problem with Pakistan and terrorism

Economic Factors

25

o Economic indicators improving annually, gross domestic product of India had

experienced a growth rate of 8.7% percent. In financial year 2007, per capita gross

domestic product of India, with respect to purchasing power parity, was $2,600. As

of financial year 2007, 17.8 percent of India's gross domestic product was contributed by

agricultural sector and 29.4 percent came from industrial sector. (economywatch.com)

o Rate of inflation in India is an important economic indicator. As of financial year 2008,

projected rate of inflation in India is lower than financial year 2007, when an inflation

rate of 5.77 percent had been predicted. As per wholesale price index, rate of inflation in

India was 8.75 percent in 2007. (CIA)

o During 2005 the country's unemployment rate stood at 6%. Unemployment rate in 2007

as estimate is 7.2%. (CIA)

o India has the third highest GDP in terms of purchasing power parity just ahead Japan and

behind U.S. and China.

o There is a continuous growth in per capita income; India’s per capita income is 797

dollars in 2006-07. This will lead to higher buying power in the Hands of the Indian

consumers. There is a continuous growth in inflation. It was 6.4% in 2007 and 8.3% in

2008. Consumer expenditure is significantly increasing each year. (earthtimes)

o The Indian economy witnessed robust growth during 2007–08 and this was the third year

in succession when the Indian economy grew by 9% or above. However, the global

economic downturn has caused GDP growth to decline to 7.1% in 2008–09. (rbi.org-

Reserve Bank of India)

o Foreign direct investment rose in the fiscal year ended March 31 2007 to about $16

billion from just $5.5 billion a year earlier. (The new work times:nytimes)

o The government of India imposes an income tax on the taxable income of individuals,

Hindu Undivided Families (HUFs). Income is taxed at a flat rate of 30% for Indian

companies, with a 10% surcharge applied on companies with gross turnover of more than

Rs10 million. Foreign companies pay 40% of their gross turnover.

o The country is unequal in infrastructure and development. Some cities are very rich and

some town are very poor. There is huge percentage of unemployment in the country.

o Despite the unequal economic balance, India has improving economic factors and its

growth rate.

o Increasing GDP and PPP, rise in employment, education, income, consumer consumption

power and expenditure.

26

o Imports of furniture were liberalized in April 1998 and importers in India require no

license or prior permission to import furniture.

o Income distribution: gap between rich and poor

o Level of labour cost: low

Sum up

o Inherent strength of the economy

o Largest working age population pool in the world

o Highly favoured FDI destination

o Higher demands for various products

o Markets are more attractive

o Unemployment

o Poor infrastructure

Socio/Demographic factor

o India has a multi-cultural ethnic society. Second big population country in the world with

an approximate population of over 1.1 billion people. This population is divided in the

following age structure: 0-14 years – 31.8%, 15-64 years – 63.1% and 65 years and

above – 5.1%.

o Approximately 72% of the population lives in rural areas, a major proportion of this

population migrates to urban areas to look for job opportunities. India’s population is

young, with a median age of 25.3 years.

o Growth in dual income – due to more and more women working today

o Changing tend – use of luxury products, more clothing, expensive services

o Unequal social class- rich becoming richer, poor are still poor.

o Public health investment comparatively low. India ranks a poor 66th among 88

developing and transitional countries on the 2008 Global Hunger Index.

o Changes in tastes and buying patterns

Sum up

o Growing percentage of young population

o Rapid urbanization

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o Improving literacy rate

o Poor health care

o Weak social security

o Low human development index

Technological factor

o India is developing its technology very smoothly. Significant increase of technology

institutions and number of patents approved in the country. Telecoms and the IT factors

are improving its services and recognizing internationally. It has already started in the

biotech sector and established a strong global reputation.

o A strong knowledge base and low costs well supported by government policies making

India an attractive R&D destination.

o The government is flexible on the contents of growth in the technology sector.

Government policy on technology has been pro-development, with a significantly higher

allocation for the development of the technology knowledge base and industries.

o However, the education system in India is still not productive and skilful; it is more based

on knowledge. Most of the science and engineering graduates require further training before

they can begin work.

Sum up

o Strong knowledge base

o Cost advantage

o Even finish education need vocational training

3.5. Micro Environment: Industry Analysis

According to the secondary research we made that Furniture and furnishing sales in India grew

more than 15% in 2008, to Rs351 billion. The massive expansion of housing stock during much

of the review period and in early 2008, in particular, fuelled the growth of this channel.

Competition is fierce, not so much against other similar stores but against the vast unorganized,

localized stores specific to cities and even localities. Furniture and furnishing stores sales are

expected to grow by an 11% CAGR over the forecast period, to reach Rs592 billion at constant

2008 prices and after.

28

The key factor driving demand for furniture and furnishings is the expansion of housing in both

the major and smaller cities in India. Fuelled by the ready accessibility of loans, which has

caused people to purchase larger homes, leading to rising household incomes, demand for

furniture and furnishings reflective of status has been high. The competition for share of

spending on furniture and furnishings remains fierce, not just amongst the organized players but

also from roadside retailers. Bombay Dyeing and Manufacturing Co Ltd led in terms number of

outlets in 2008, with a 1% share, but it was Godrej & Boyce, through its brand Interior, which

led in value terms, with a 3% retail sales share, compared to 2% for Bombay Dyeing and

Manufacturing While Bombay Dyeing has more outlets and a larger total selling space than &

Boyce, & Boyce is able to realize a higher yield per square meter than Bombay Dyeing. This is

essentially because & Boyce has diversified into household and commercial furniture, whereas

Bombay Dyeing has remained in the home furnishings market. Other retailers have seen their

sales increase, but Godrej & Boyce has clearly capitalized more on the real estate and housing

boom seen during the review period, and has seen its share of sales increase significantly. Brand

values have increasingly played a vital role in consumer purchase decision in furniture and

furnishing. International retailers have mainly entered in the high-end kitchen market, through

joint ventures with Indian retailers and manufacturers. They have targeted the upper class for

these turnkey solutions. Key new entrants to watch are Welspun Retail (Spaces) as well as

@Home, Reliance and Home Town, from The Future Group. Both retailers have considerable

experience in large format retailing, and for both the diversification into furniture and

furnishings retailing fits into their overall strategies in the retailing market. Their entry is likely

to limit the opportunities for other retailers to raise prices, while at the same time contributing to

a decrease in the share unorganized retailers in the immediate vicinity of their outlets. The entry

of organized retailers in furniture and furnishings has created a ripple effect of greater quality

consciousness and investment by manufacturers. For instance, the rapid expansion of companies

has spurred their largest supplier of furniture, to ramp up capacity and technology, along with the

offer of new designs at regular intervals. This impact is likely to be very beneficial for the whole

furniture and furnishings retailers sector as a whole. The continued expansion of housing stock,

office and commercial spaces across India will remain the key driver of growth. On the back of

these factors, furniture and furnishings store sales are expected to grow at an 11% CAGR over

the forecast period, to Rs592 billion at constant recently prices. More diversified retailers, which

offer home furnishing solutions and concepts, rather than piece-meal sales, will garner more

value from the customer than others. With this in mind, brands like Interio and @Home are

likely to coantinue to invest heavily in brand building.

29

3.5.1. Trends

According to our secondary research, estimates that 85% of furniture demands in India is being

by met by made-to-order furniture through local carpenters. So the Rs53 billion in retail sales of

ready- made furniture is only about 15% of the total market in India. Sales of these products are

currently restricted to urban India.

In India furniture was the most dynamic subsector in home furnishing, growing 185% over the

review period. An important factor that spurred growth was the presence of better quality ready-

made important furniture in the retail market. This happened as the government reduced import

duties from 300% to just 38% in 2005. In India most of the domestic product is underdeveloped,

with imports taking up most of the demand and furniture sales are generally from specialized

furniture retailers, which are mostly available in the urban areas like major city of India

(Bombay, New Delhi).

Sum up:

- The Indian Furniture market value is about US$ 8 billion.

- Constitutes 0.5% of the total GDP

- Employs 300,000 people

- Highly unorganised – only about 15% in organized sector

- Organised sector growing at 30% CAGR

- There are about 5000 firms in the domestic organised sector, and nearly 10500 importers

of furniture. Products are classified based on material used, and consumer segment.

Wooden Home furniture is the biggest segment. Household furniture designs are region-

specific. The trend of import furniture is increasing in prosperous households.

- Major countries which are importing furniture: China, Italy, Germany, Spain, Malaysia

3.5.2. Competition Analysis (Porters five forces)

Why is it relevant to our research?

We are using this model in order to find out how the competitive situation in Mumbai is, what

are the opportunities and threats for company and what challenges that company will have to

face in the future. In order to find out how attractive and competitive the industry is, we will go

through Porter’s Five Forces. As emphasized before that BoConcept expand around the world

30

and recently company has entered several Pacific Asia countries like China, Singapore, Malaysia

and December 2009 entering India (Mumbai).

Entry barriers

Liberalization of the Indian economy is continues rapidly with the trade barriers largely

removed, and a young, urban population with disposable income is driving demand. Seeing the

opportunities, major players in India and overseas are entering. The market new regulation that

introduced by government is to encourage global branding companies to enter the market, and

BoConcept is a global brand and company focuses on urban designed product.

Determinant of Supplier

BoConcept is supplying it is own product from Denmark from the company owned fabric and

company own production board furniture and all other production sourced primarily from

Eastern Europe and China. Company is increasing sources and improving productivity in order

to maintain its gross margin every year. Increasing production cost and labor cost in Eastern

Europe and also the distance between production place and seller can be can be a serious

problem in the coming years, but in order to less the cost of production and distance, company is

working on a new project to produce the product for Asian market in China. BoConcept will also

close its board furniture in Herning and concentrate on production on Ølgod facility to ensure

future cost- efficient operation and also will focus utilizing capacity and introduce a more

technology advanced production process, by doing that company can strength its competitive

advantage in Europe as well as in the other market.

Determinant of Buyer

BoConcept is focusing on designed and urban minded product with affordable price which

means all the middle income consumer can afford to buy it. In order to be able compete in Indian

market BoConcept will set up its product price strategy according to local price. Mumbai is one

of the largest city in the world with its huge number of consumer and consumer buying behavior

changed a lot recently, they are more looking for modern and designed product which means the

probability that BoConcept will success in this market is quite high but it need time because the

brand is very new in this market and it will not be so easy for consumer to switch.

Determinant of Substitutes

31

The competition in furniture industry in Mumbai is very big as mentioned before there many

company in this market and many product to substitute for the consumer. As seen in the picture

there are many options for consumer to choose from. Consumer shopping habits are changing

and urban shoppers are increasing with increasing income, they become more brand and

designed focused that gives competitive advantage to BoConcept since the company is urban

minded and design focused in the furniture sector, however since there are many local and

international furniture company in Mumbai, it will be easy for consumer to find substitute

product the propensity is very high but to avoid from that situation there is a need to make

unique good designed and affordable product and that’s what BoConcept is focusing on.

Determinants of rivalry

The extra ordinary growth of Indian economy has provided more space for international brands

and modern retailers to grow their business; much of the growth has been concentrated on the

metropolises like Mumbai and New Delhi. Most of these players are very aggressive in the

market especially local companies which are known very well by consumer and they are

competing for years. The major international furniture companies are from Italy, Germany,

Spain, and Malaysia. Some of the competitors have variety of products where they sell all kind

of household products as well as textile, so consumer can see their furniture while they are

buying other household products and that’s give competitor advantage to the competitors,

consider Indian consumer are loyal to the companies they can buy for long time from same

company without looking other companies product.

Sum up

Growing number of consumer and consumer income level makes the Indian industry one of the

most attractive market in the world, for domestic as well as foreigner company, the government

has taken several steps to open up the Indian industry to foreign investment and has many

profitable public- private partners ships. Especially the new regulations that government has

introduced, and highly changing buying behaviour which is more aware of design, quality, style

makes the industry very attractive for international company as well as local companies. There

are some opportunities and challenges as follows.

Opportunities:

o Demographic changes and their implications

o Manufacturing competitiveness in several sectors

32

o Regulations and laws are progressively more open and business friendly

o Organized markets is at emerging stage hence potential growth is very high

Challenges:

o Differences within customers groups

o Tax laws

o Infrastructures

o Reduced availability of manpower for retails operations

o Restriction on foreign ownership of retail operations

3.5.3. BoConcept market growth stragety

According to Ansoff growth matrix, BoConcept uses this strategy to develop new market in

order to expand business. Primarily company introduces its existing products in new foreigner

markets.

Market development

1) Franchising to enter in new market

2) New use of existing products to new customers

As BoConcept product deployment strategy, they develop their products annually. The last

couple of years BoConcept has introduced new stream of products every year to reach more

consumers in their target group or to get their target group to replace their furniture.

Product development

1) Innovative

2) Extend existing product lines

3) Product replacement annually

4) New collection with new design

After successful entering, they will have to step to market penetration. BoConcept uses Market

penetration as market expansion in their existing markets by open more franchise stores and

studios.

Penetration or expansion

33

1) Winning competitors’ customers by promotion,

2) Expanding more franchisee and brand stores

Sum up: BoConcept has this strategy to be globalizing its brand and image. This chain is

increasing and getting success as well.

3.5.4. Competitive advantage (Porters Generic strategies)

Differentiation: (higher cost in broad market)

This section of the report focuses on competitive advantage. How can BoConpt gain competitive

advantage, should they focus on cost or focus on differentiation or should they focus on both cost

and differentiation?

This strategy is usually associated with premium price and higher than average cost for the

industry due to the extra value for the customer. As BoConcept's revenue increases, an ever-

increasing share of the product range will be sourced from suppliers in the Far East and Eastern

Europe, who are extremely competitive with respect to price, quality and delivery times.

BoConcept furniture and accessories are designed with the 'urban-minded customer' in mind and

created to satisfy individual customer needs. In 2008/2009 the product range is divided into three

new styles: Mystery Mood, Global Ground and Dimension Delight, which are colour co-

ordinated and match with respect to wood types and design within and across the styles.

Focusing attention on the choice of materials, design content and quality, all styles reflect

BoConcept's strategy of anticipating customer desires and securing itself a clear position in the

market distinct from the more competitive mid-level segment. From 2008/2009 collection,

BoConcept is very much focuses on striking the right balance between image-creating icon

products and commercial products that generate revenue and traffic.

Hence BoConcept focuses on cost as well as differentiation. They focus on cost in order to set

their product price where local consumer can be able to afford, and they focus on differentiation

to gain competitive advantage among competitors. Mainly companies producing quality and

design product and selling on affordable price due to the extra value for the customer.

3.5.5. Market Structure In Mumbai

Like many other sectors small and local company has dominated the furniture industry sector in

Mumbai. Nearly, 85% of the home furnishing industry is in the unorganized sector and

remaining 15% is in the organised sector and is made up of manufactures and importers catering

34

to the various segment of the industry. Some of the major segments in furniture industry are

residential, office, contract and institutional. There are other segments also based on the

application (kitchen, bathroom, bedroom, and others) or on the raw material (wooden, plastic,

metal, bamboo, and others).

From the figure 3, we can see that there are many companies and most of the companies are

unorganised so there is perfect competiton in

generall India and Mumbai in the furniture sector.

Perfect competition is where there so many

company competing in one market , in general a

perfectly competitive market is charecterized by the

fact that no single firm has influence over the price

of the product it sells. Because the conditions for

perfect competitons is very strict and they are the

price takers not makers.

Figure 4 shows that the Indian furniture market structure. Where 15% markets are organized and

85% markets are unorganized.

Figure 4, Source: www.commerce.nic.in

3.5.6. Competitors analysis

Competitive landscape

Today home furnishing sales are highly fragmented, with the leading brands and consumer tastes

in house wares and home furnishings are becoming more sophisticated, as potential purchasers

35

Figure 3, Source: www.commerce.nic.in

now pay more attention to design, style and quality. This has an impact on many subsectors and

including furnishing sector, where the availability of more stylish quality products has stimulated

growth in furnishing sectors in India as well as in the other part of the world. The major furniture

player in Mumbai and around is listed as below with their shares by value from 2005-2008.

Furniture and Furnishings Stores Brand Shares by Value 2005-2008

Company 2005 2006 2007 2008

Godrej & Boyce Manufacturing Co Ltd - 2.8 2.9 3.2

Bombay Dyeing & Manufacturing Co Ltd 2.0 1.8 1.7 1.8

Fabindia Overseas Pvt Ltd 0.6 0.9 0.9 0.9

Durian Industries Ltd 0.7 0.8 0.8 0.8

Style Spa Furniture Ltd 0.4 0.4 0.4 0.4

Home Stores India Ltd 0.6 0.5 0.3 0.3

Furniturewalla 0.1 0.1 0.1 0.1

Godrej & Boyce Manufacturing Co Ltd 0.7 - - -

Others 94.8 92.7 92.9 92.5

Total 100.0 100.0 100.0 100.0

Table: 1, Furniture and furnishing stores brand shares,

Source: Euromonitor

In this part of our report we focused on the major furniture companies in Mumbai, about the

market conditions, their market position, their product chain, profiles, strategies, strengths and

weaknesses in order to find out the possibilities for BoConcept in Mumbai.

3.5.6.1. Bombay Swadeshi Store Ltd

Company background

The Bombay Swadeshi Stores, formerly Bombay Swadeshi Co-operative Stores, was founded in

1905. Bombay Swadeshi Store operates retail store offering products such as apparels, fashion

accessories including jewellery, footwear, and scarves.

It also offers personal care products, food and beverages, home accessories, soft furnishings, and

stationery products such as handmade paper products and desktop accessories. The company

primarily operates in India, where it is headquartered in Mumbai

Company strategy

36

The company primarily offers the following product lines: apparels, fashion accessories,

personal

care products, home accessories, soft furnishings and stationery. The company recently has

offered sale up to 70% to increase the sales in the global recession. Bombay store has very vide

of product chain today and company is India premier business association with a direct member

ship of almost 7500 organization from the private as well as sectors. Partnership with over 120

NGOs across the country carry forward Bombay store initiatives in integrated and inclusive

development which include health education livelihood diversity management, skill development

and water.

Competitive positioning

Bombay store is competing several different categories because company own different product

lines. in the in Mumbai as well as in the other major cities of India. Their product line is personal

care products, food and beverages, home accessories, soft furnishings, and stationery products

such as handmade paper products and desktop accessories. Today the main competition

concentrates in Mumbai since there a lot of local and international investors making business

there.

3.5.6.2. Bombay Dyeing

Company background

The company established 23rd August 1879. Bombay Dyeing & Manufacturing manufactures

markets of home furnishing and household textiles products. It is product includes furnishing,

bed linen, towels and apparels. the company operates primarily in US, European union ,

Australia and New Zealand. It is headquartered in Mumbai and employs more than 1000 people.

The company recorded revenues of INR $, 985.9 million (approximately $110.4 million) in the

fiscal year ended March 2007. It is net profit was INR359.3 million (approximately $7.9 million)

in the year 2007.

Company strategy

In order to turnaround sales trends, Bombay Dyeing & Manufacturing is likely to be more

aggressive in developing its furniture sales as well as in the other sectors they compete in, in the

coming years. For example company also Holding vast tracts of mill land in central Mumbai,

where property prices are among the highest in the world, let alone India. Mixed-use

37

development of this land – residential and commercial – will probably lead to Bombay Dyeing

seeing cash surpluses.


The information we got from secondary research shows that the company performance is not so

good in last recession that among the competitors but It is still among the leading players in

household textiles in India, although in the last three years its share declined marginally. Its vast

retail network is helping it retain its strong position, but it is under imminent threat. Bombay

Dyeing has not shown much innovation to stay ahead of competition in the last few years; rather

it reacted to competition and was a late entrant into various niche markets. However, it is well

placed in a high-growth subsector and also has a vast retail network. These strengths could help

the company overcome the current setbacks, and retain its leading position.

3.5.6.3. Godrej & Boyce Manufacturing Co Ltd

Company background

Established in 1897, the privately-owned Godrej & Boyce Manufacturing Co Ltd is part of the

Godrej Group, one of the most trusted corporate groups in India. Over the years, Godrej &

Boyce has grown into a diverse, multi-business enterprise, with interests in appliances; home and

office furniture and furnishings; locks and kitchen accessories; security equipment and solutions;

office equipment; storage solutions; material handling equipment; industrial products; process

plant and equipment; construction and real estate development; and electrical and electronic

systems. In 2006, the company consolidated all its furniture brands under a single umbrella

brand, Godrej Interio, and changed the name of the furniture division to Interio.

Company strategy

Sales of furniture and furnishings are predicted to grow by an 11% CAGR in constant value

terms over the forecast period, and Godrej & Boyce is expected to be one of the main drivers of

this growth in the sector in 2009. The company will attempt to accelerate sales growth and wrest

share from the unorganized sector through multiple measures expanding its chain into smaller

cities, providing personalized value-added services in select large city outlets, and offering a

more diverse portfolio of furniture and decor products. Godrej & Boyce plans to increase access

to consumers in smaller cities, by investing Rs2 billion over the forecast period on a nationwide

expansion, which will chiefly focus on tier-II and III cities. It will extend its personalization

38

concept, branded Mood space, in its Life space outlets in five major cities: Hyderabad, Mumbai,

Kolkata, Bangalore and Chennai.


Godrej & Boyce held the number one position among furniture and furnishings retailers in 2008,

with a value share of slightly over 3%. With accelerated sales growth of 25% in that year,

stemming from a steady increase in outlet count, the company was able to retain its leadership

position. The steady expansion in outlets to newer markets during the past two years has yielded

growth of over 20% in the company sales revenue. In 2008, Godrej & Boyce introduced a

concept of design-led services within its stores, branded Mood space, with a strong thrust on

personalization. Mood space is to be implemented in select stores in large urban centers, and is

an attempt to establish an emotional connection with consumers, and collaboratively create

interior design for their homes. This initiative will enable the company to recommend products

from its portfolio to its consumers that are most compatible with their home decor, laying a

strong foundation for repeat business. With a large number of middle class families in the

country buying furniture from unbranded and independent stores, Godrej Life space is positioned

more as offering affordable home furnishing solutions than as a premium outlet. Within the

highly fragmented market environment in furniture and furnishings, Godrej Life space has

opportunities to increase its value share from the current 3%. With rising disposable incomes and

growing quality consciousness, an increasing number of Indian consumers are expected to shift

from unbranded to branded furniture. Godrej Lifespace is expected to initiate measures to

encourage consumers to upgrade from unbranded furniture, and maintain its value growth even

as competition levels in the sector increase

3.5.6.4. Welspun India Ltd

Company background

Welspun India Ltd is part of the Welspun Group and is a public limited company, where the

promoters hold a 34% share Its business grew as a third-party supplier to large retailers

worldwide. The company claims to be Asia’s larger manufacturer of home furnishing and house

wares and among the top five companies in the world. Its business to grew as a third party

supplier to large retailers worldwide . the company recently more focused on the domestic home

furnishing market,. It developed the spaces brand the premium end of the Indian market.


39

Today company core business is furnishing but also textiles and company has a presence in

metropolitan cities like Mumbai and other major cities. The company policy shows that looking

to gain the advantage of being one of the first branded home furnishing manufacturer in India.

3.5.6.5. Trent Ltd - House wares and Home

Furnishings

Company background

Trent Ltd is part of the Tata Group, and owns the retail fascia Westside, through which it retails

its private label of clothing, household textiles and soft furnishings. By March 2007, there were

26 Westside stores.

Trent Ltd also operates one hypermarket under the Star India Bazaar banner, and bought a 76%

stake in the Landmark chain of book and music stores. There were seven Landmark stores as of

March 2007.

Company strategy

The company is expected continue to enjoy growth from retailing, as its expand its chain of

Westside stores. I n the latest earning announcement trend declared net sales growth of 28% for

the quarter ending recently compared to the same quarter the previous year, and net profit growth

of 67% for the same time period. Trent faces competition from domestic players as well the

possible entry of international companies. The company has recently has introduced new

designed products with new price strategy for positive and profitable future.

Competitive position

Furnishing retailing is Westside main income earner but apparel is also an important part. The

company has a wide range of furnishings and textiles including all housing products from

kitchen to bedroom from gardening to bathroom. The company has organized retailing all

around India caters to the upper end of the overall market. However among organized retailers

and large fascia, Westside is regarded as a sensible “family” brand. Unlike the competitors,

which is aggressive in their promotions and price cuts, Westside creates excitement around the

store through a carnival- like atmosphere, with activities for children, like face painting and

magic shows. Westside held a 1% share of home furnishings and its share grew slightly

recently. The introduction of new designs, and collections every quarter, and overall good

quality of products brings many customers back.

40

3.5.6.6. Raymond LTD

Company background

The company was incorporated in 1925, and belongs to the Raymond Group. The key business

of the company are furnishings textiles garments, retailing.

Virtually Raymond’s brands are private label products, as they are produced by the company

under perpetual license. However, this is different from the typical concept private label products

in the retail industry, as Raymond’s primarily business activity is manufacturing its own brands.

Company strategy

Raymond’s vision is to be the leader in the life style segments of furnishing and accessories in

India. To achieve this goal the company plan to segments its brands into sub-brands determined

by demographic attributes like different product and different price segments. It will also

introduce new style western products with new design under existing products and emphasize the

premium positioning of its brands. The company will concentrates penetrating the other areas in

India and other pacific markets.


The Data we got from our secondary research determines that the Raymond’s is one of the

leading company in the furnishing sector in Mumbai and around in 2008. Raymond continued

with its efforts to improve the customer experience in its stores in Mumbai and expand to other

major cities of India. Market conditions in India became more challenging in the last quarter of

2008. However, as Raymond’s customer profile I mainly in the upper-middle segment, demand

for its brands may not be seriously affected. The company is also enlarging its product range. It

has relaunched Be Home stores, which offer premium home décor and home furnishing items,

initially in major cities.

3.5.7. Sum up from Competitors’ profiling

Competitors’ strengths factors

Diverse and multi- business enterprise

Well known local market, huge market

Availability of large varieties quality wood made products

Cheap labor and raw materials

41

Availability of young and productive labor

Small restrictions from government compare to restrictions to foreigner companies

Cost competitiveness

Competitors’ weakness factors

Unorganized industry and fragmented industry

Lack of trained & skill work force

Small supply of specialize professional

Lack of spirits of entrepreneurship, patriotisms and leadership skill

Lack of effective & execution framework

Lack of effective management models

Lack of trained & skill work force

Small supply of specialize professional

Lack of leadership skill

Weak rupee against other strong currencies

Lacking to generate economies of scale

Absence of greater technology impetus

Rush of getting high marks not Development

Lack of modern technology and machinery

Lack of designed and stylished products

Competitor`s opportunities factors

Fast growing economy

One of the largest consumer marked and increase in the number of house holds

Growing urbanization and greater awareness about designed and styled household goods

and brand sensitivity.

Increased disposable income and purchasing power of Indian customer opens new market

development .

Product development and diversification to cater global needs.

Competitor´s threats factors

The challenges during the last recession

Growing foreign investors

High risk and uncertainty of future

42

High cost of imported products

Need to improve working conditions

Competition in Domestic Market and international market, especially China.

Geographical disadvantages.

International labor and environmental laws.

Balance between price and quality and balance between demand and supply.

3.6. Consumer pattern

Understanding the customer is the first step in business. Without knowing customer we cannot

make any plan and strategy.

India is one of the huge country in the world with area 3,166,830 km 2 and total population

1,154 million. India is divided into 28 states, over one billion people and 120 dialects/languages.

From the market perspective, people of India comprise different segments of consumers, based

on class, status, and income.

The Indian consumers are noted for the high degree of value orientation. Such orientation to

value has labelled Indians as one of the most discerning consumers in the world. Even, luxury

brands have to design a unique pricing strategy in order to get a foothold in the Indian market.

Indian consumers have a high degree of family orientation. This orientation in fact, extends to

the extended family and friends as well. Brands with identities that support family values tend to

be popular and accepted easily in the Indian market.

Apart from psychology and economics, the role of history and tradition in shaping the Indian

consumer behavior is quite unique. Perhaps, only in India, one sees traditional products along

side modern products.

Fashion is increasingly playing a part in consumers’ lives and interior design is also considered

something that needs to be updated in this global marketing. For this reason today most of the

company in India and all around the world are very much focusing on design, quality and eco

friendly product and investing a lot on research and development. As mentioned above Indian

economy has grew significantly the main reason is that Indian government has lowered the entry

barriers to for foreign investors and has introduced some new economic policies which has

encouraged foreign investor to entry the marked. The introduction of the foreign companies has

43

lowered unemployment rate of India significantly and consumer income has rose significantly as

well.

Increase high competition of domestic and international retailers makes consumer to get cost

effective and quality product. Hence increase in consumer awareness led to focused more on

branding, designed, styled goods to the consumers.

Changing trends in Indian consumer

Urbanisation is taking place in India at a dramatic pace and is influencing the life style and

buying behaviour of the consumers. The popular growing shopping trend among urbanities is

purchasing from super markets to hyper stores.

The current urban middle and upper class Indian consumer buying behaviour to a large extent

has western influence. There is an increase in positive attitude towards western trends. The

Indian consumer has become much more open-minded and experimental in their perspective.

There is now an exponential growth of western trend reaching the Indian consumer by way of

the media and Indians working abroad.

Foreign brands have gained wide consumer acceptance in India. Foreign brands vie increasingly

with domestic brands for the growing market in India. Foreign made furniture is well accepted

by the Indian consumers. Malaysian, Chinese, Italian furniture are growing in popularity in

India. Indian consumers have also developed lifestyles which have emerged from changing

attitudes and mind sets; exposure to western influences and a need for self-gratification.

4.0. Empirical Data and findings analysis

4.1. Primary Data Analysis

Online survey:

We have sent questionnaire about 120 people who are currently living in India. Among them we

got 50 responses where 31 are male and 19 are female. Through the different blogs etc.

According to appendix-2, the consumer age 24-50 are buying furniture. It means marriage

average is about 24 and they start new way of life, means separate from parents, finished their

degree and start jobs and some business people they have more consumption power. The survey

44

showed also the male people are more participated, it means our online survey is based on

internet. So male are more ahead than female.

According our survey, It seems that their average annual income is about IRs. 61.000-1000.000

where more people giving their opinion. Question 4 shows almost 65% people normally buy

furniture whenever they needed. About 15% saying they will buy when there are new design are

available. So there is no any exact time, how often they replace furniture.

As in our survey question 5, the people showed their different interest spending on furniture.

Most of them are spending like 10000-40000 per year. That means the people normally do not

buy or replace furniture annually.

In question 6, we have asked ``which priority comes first when you are planning to buy

furniture?`` About 33% giving priority on Price, Quality and Design selection. Some of them are

giving opinion on store location, service, brand and economical furniture which we did not

mentioned in our survey options. Very few people 6% are giving priority especially on price. It

means people are looking for more customer value products.

As question 7 shows, the buying decision is depends on whole family agreement. More than 55%

people make buying decision when the whole family is agreed. Around 36% people are make

decision self, it means they might be single. Very few people give their buying decision on wife.

Family is really high priority on Indian society.

Question 8 shows, what kind of furniture are their choice, about 43% people have chosen as

modern and about 33% chosen as causal. Still huge percentages of people are wishing mixed

design that means it is between traditional and modern. Only few people are still in interest of

traditional furniture. The main reason can be the urban people are influences by western lifestyle.

To find out the competitors we have asked to respondent in question 9 as ´´Which furniture store

will come across your mind, when you are about to buy furniture?``. The respondent responded

as different view on selecting their favorite store. Most of them are writing as; Furniturewalla,

Godrej, Bombay swadeshi store, Bombay deying, Style spa, Durian, Raymond, Space design

group etc. Some respondent writing more than two brand stores as well.

In question 10, ``we have asked how do you get to know if there is new furniture on market?``

responsed answered about 23% from shops/stores, about 11% from newspaper and again 11%

from television. About 40% answered as other option. They have put their opinion as: through

friends, society, exhibition, relatives etc.

45

Our question 11 was, how do you rate western furniture as per quality, price, comfort and

design? Where we have put 1-5 rating and 5 was the highest. Among them we have got the

responses as about 45% in quality with rate 4; about 45% in price with rate 3; about 51% in

comfort with rate 4; and about 47% in design with rate 4. Where most of the people are rating

western furniture are as comfortable and with good design. It looks respondents are rating price

as low. It looks the consumer have positive attitude toward western furniture.

We were wondering if the Indian people have heard about BoConcept already. For that reason

we have asked if they heard about it. Almost they didn`t hear about it. About 70% did not hear,

and 30% heard about BoConcept. The people who heard about it were found information

through internet, business magazines, friends who are in western countries etc.

Face to face interview:

As we decided to make interview with some Indian people who are living in Copenhagen,

Denmark, we got 45 respondents through face to face interview. Our survey consist with

different age group, different categories people, most of them were students, some of them

business persons and some of them were job holders. The main purpose of the survey is to study

of consumer behaviour.

We have asked questions in different streets, Indian shops, Indian restaurants and some Indian

friends in Copenhagen. We have asked extra questions to get more details information about

consumer and their choice area.

According to appendix 3, we are going to analyse different aspects in order to understand

consumer.

All the respondents are very high family oriented every individual is a part of many different

groups based on their common interest. It looks respondents are very well aware of emerging

trends and are a fashion conscious people. They are aware of various domestic as well as

international brands available and the designs. More exposure to television and internet has

further contributed in increasing the awareness. They have a great influence on their choice of

brand and quality of apparels. In most cases they were brand loyal and preferred big

multinational brands.

In our sample size, there were 36% female and 64% male. The reason seems that a lot of male

travel abroad to get education, make business, find job as well.

46

Female Male

36%

64%

Gender distribution.Total

Figure 5, Gender distribution. Source: Appendix 3 (Researcher’s findings)

As shown in fig. 6, the potential buying age is 24-42. There are 40% of age group 24-29, 27% of

age group 30-35 and 16% of age group 36-42.

19-2313%

24-2940%

30-3527%

36-4216%

43-504%

Buying age group

Figure 6, Buying age group, Source: Appendix 3 (Researcher’s findings)

As shown in fig. 7, we have tried to get information about what age group people spend on

furniture. Most of the age between 24 to 42 spending a lot on furniture.

47

19-23 24-29 30-35 36-42 43-50

2%

36%33%

20%

9%

Spending by age group

Figure 7, Spending by age groups, Source: Appendix 3 (Researcher’s findings)

As below shown in fig. 8, Indian people often buy their needs whenever they needed. They do

now have any fix timing. Normally if they influence by someone or something, they wish to

have the products. So that in our findings the huge percentage 40% are buy furniture whenever

they needed. So far 22% of them buy new furniture when new designs are available in the

markets. 20% of them buy furniture once a year.

I do not buy7%

Once a year20%

Twice a year11%

When new design are avaliable

22%

Whenever needed

40%

How often do buy

Figure 8: How often do buy. Source: Source: Appendix 3 (Researcher’s findings)

Figure 9 shows, what is their priority if they consider buying new furniture. 35% choose Price,

quality and design are most important things, 18% focused on price, 16% focused on quality,

13% on brand and 11% choose design selection as their priority.

48

All above(Price, quality, design)

35%

Brand13%

Design selection11%

Price18%

Quality16%

Service7%

Buying priority

Figure 9: Buying priority Source: Appendix 3 (Researcher’s findings)

Figure 10 shows, Indian consumer preferable furniture styles. Mostly age group 24-29 and 30-36

prefer modern and casual furniture styles. All the age groups are still interested to mix design.

Causal Mix design Modern Traditional

0%

4%

9%

0%

11%

7%

20%

2%2%

9%

16%

0%2%

9%

2% 2%2% 2%0% 0%

Furniture style vs age group19-23 24-29 30-35 36-42 43-50

Figure 10, Prefer furniture style vs age group, : Appendix 3 (Researcher’s findings)

According to our findings given in appendix 3 and below figure 10, we found that the most

important things for Indian people is family. If they have to find something, the decision will

make by all the family members. Data shows 60% people make decisions according to whole

family decisions. 24% makes self decision. And almost 11% housewife makes self decisions.

49

Television is the most influencer media to get information about product and services. 29% gets

information about furniture in television. 13% -gets from internet and newspapers, 11% -friends,

relatives and magazine. Very low percentages get information from store or exhibitions.

My husband My wife Myself Whole family0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Decision makers vs media/influencers

ExibitionFriendsInternetMazagineNewspaperRelativesSocietyStor/shopsTelevision

Figure 11: Decision maker vs media/influencer, Source: Appendix 3 (Researcher’s findings)

The following figure 11 shows that Style spa, Furniturewalla and Godrej are leading furniture

market by 54%. 13% people buy form Bombay Swadeshi Store.

Bombay deying7%

Bombay Stor13%

Duran2%

Furniturewalla18%Godrej

18%Homemakers4%

Raymond9%

Space design2%

Style spa18%

Welspun9%

Brand names

Figure 12: Brand names, Source: Appendix 3 (Researcher’s findings)

50

Figure 12 shows, how is Indian people`s attitude towards western furniture. Their total rating is

as 29% on design, 27% as quality, 26 as comfort and 18% as price.

Sum of Design

rate28%

Sum of Qual-ity rate

27%

Sum of Com-fort rate

26%

Sum of Price rate18%

Western furniture rating %

Figur 13: Western furniture rating. Source: Appendix 3 (Researcher’s findings)

In figure 13 shows that the percentage of people who has already heard about BoConcpt.

No60%

Yes40%

Have you heard BoConcept?

Figure 14: Have you heard about BoConcept?, Source: Appendix 3 (Researcher’s findings)

4.2. Understanding the consumer

A marketer is act as consumers while them purchasing any goods or services, and try to market

that product to an ultimate consumer. So, marketing is starts with consumer and ends with

consumer. To understand this value we have focused our primary research as consumer buying

51

behaviour. Although the consumer behaviour is a huge part of marketing research, we were able

to collect some certain points.

When we talk about consumer decision, those questions always arise to understand their

behaviour.

o Who buy the products?

o How do they buy?

o When do they buy?

o Where do they buy?

o Why do they buy?

o How often they buy?

According to euro monitor consumer report; over the years, the expenditure on non-food items

has grown faster that the expenditure on food items. India is witnessing a great change in the

lifestyles and buying patterns of consumers. Convenience foods like instant coffee and noodles

are now very popular. The number of modern gadgets like washing machines in the number of

house holds is now on the increase. Yesterday’s luxuries are now becoming today’s necessities.

The Indian consumer has more money and is now using it more liberally than ever before. Food

and drink have acquired a greater fun image. Because of the TV and the booming media, even

the economically lower class of the Indian population craves for a lifestyle like the well-to-do

people they see on the TV.

To understand those patterns, we focused our research on understanding consumer behaviour.

According to our primary and secondary research, we found that the consumers were really

aware on brand and extra value of the products. The people often buy furniture whenever they

needed, they use television, internet, and newspaper as media tools, and friends and relatives are

also big influencer, young people and who have good income they spend on buying,

By the reason of rapidly increasing urbanization and modernization, liberated political policies,

changing social lifestyle, increase of youth forces, increase in ratio of working women, increase

in jobs, urban India adopting a global lifestyle, increase in technology, intellectual resources etc.

4.3. OT ------> PEST

(Opportunities, Threats vs PEST India)

52

Opportunities are abundant. As BoConcept focuses on specific areas to pursue those

opportunities where effectiveness is possible. Weaknesses of competitors are also opportunities

for BoConcept.

External threats arise from political, economic, social, technological (PEST) factors.

Technological developments may make offerings obsolete. Market changes may result from the

changes in the customer needs, competitors' moves, or demographic shifts. The political situation

determines government policy and taxation structure.

Along with the opportunities and threats for the BoConcept, they have difficulties on growth

stage. They need to be patient to accumulate their potential customers by appropriate promotion.

By exploiting opportunities and adopting threats in new market makes competitiveness. Mainly

the situation of country plays a big role. If there are obstacles from the rivalry in industries,

company cannot growth easily. But by analyzing the current situation in India, there are

opportunities to gain competitiveness throughout differentiation.

5.0. Evaluation

5.1. Industry competition

Environment:

Regarding the Macro environment; a foreign company entering in a new market can affect my

policy, economy, socio cultural and technology factor. Those factors can affect to develop new

market and penetrate. By evaluating Indian market, we can find there are always opportunities

for the marketers who wants establish business. The economic growth, improved political

situation and legal factors, increasing social welfare, invention of new technologies directly

affect to the business. Hence the improving Indian situation makes positive opportunities and

encourages investment in the country.

53

http://www.1000ventures.com/business_guide/business_environment.html

http://www.1000ventures.com/business_guide/opportunities_pursuing.html

http://www.1000ventures.com/business_guide/opportunities_pursuing.html

Internal factor including; motivations, communication of the company also can affect the quality

of services. To strength those factors; BoConcept management, company policy, marketing

strategy, which are superior resources sustain the quality of products and expand market shares.

Competition:

As big giants are involving in furniture industries can increase threats for BoConcept. Pantaloon,

Shoppers’ Stop, Trent, RPG, Vishal Retail, Reliance and Tata group are also joining in the

furniture retailing. Others included is Godrej & Boyce manufacturing Co Ltd, Style Spa,

Furniture Concepts, Furniturewala, Bombay deying, Bomboy store have high competition in the

market.

These players along with some regional players have been advertising through billboards,

cinema halls, print and even some television advertisements as in the case of Nilkamal and

Godrej among others. Hyper-malls and chains too have been advertising some of the discounted

and special offers on furniture by way of city specific print ads, handouts and billboards.

By analysing micro environment; competitors can affect BoConcept´s policy but product value,

design and quality level still can be out of their access.

5.2. Consumer behaviour

By analysing primary and secondary Data, we can evaluate the consumer behaviour as follows:

Age- Age between 24-50 is the highest spending on furniture. This age group prefer modern, mix

and casual furniture styles. Since the country is follows its traditions and culture. The consumers

are highly family orientated.

Brand- Respondents usually prefers to have branded products available in the market;

Respondents choose the brand for the value of product and comfort level.

Quality- All the respondents were keen about the quality. Respondents were aware about quality

than price.

Price- Price level must be negotiable and affordable to get consumer. As respondent rate shows

very low percentage of people are rated western furniture as expensive price.

54

Income: It was observed that the respondents` average income is Rs 45955 and their average

spending on furniture is Rs 29622. This means the consumers are spending money to the

furniture merrily.

Family values: It was observed that for the Indian consumer family is the most important thing.

Their family value and lifestyle is observed by social prestige and status. For this reason they are

changing their trends. They were very close to the family and seek advice for their purchasing. A

huge percentage of consumers make decision according to their family´s needs.

Media: All the respondents were taking their purchase decisions based on the brand presence in

media either in electronic media / Print media/ TV. They all were very keen about the new

arrival of the brand presence in the media. Also respondents impressed by their friends and

society and their lifestyles.

5.3. BoConcept Indian market (A perceptual map)

Throughout all the perspectives we analysed, we can place BoConcpet in Indian market at the

beginning stage. The perceptual map shows the BoConcept in Indian market.

Figure 15 Source: researcher analysis

55

High Price

Low Price

High Image

Low Image

Mass market

Middle market

Affordable market

Aff. Luxary market

Luxary market

6.0. Suggestions for solutions

6.1. Marketing strategy to adopt in the future ´´no limits in colours. no limits in size. no limits in taste. no limits in cool design. no limits in

customisation. no limits in BoConcept´´.

BoConcpet in India, can use marketing mix strategy for the future prosper. By keeping their

current image, they even can offer more extra value to the costumers. For example: by reducing

distributions cost, haring Indian cheaper manpower, segmenting customers as their status, and by

making segment of their product lines etc. They can adopt following strategy.

6.1.1. Product strategy:With increasingly (expect financial downturn duration) annual revenue more than 1 billion;

producing full product range comprising furniture and lifestyle products for private homes.

BoConcept products are including these features: quality, features, options, style, brand name,

packaging, sizes, after-sales services, warranties, returns, etc. BoConcept products are really

strong brand with high quality. The products are convenient which are based on urban design.

The products are in different colors, different design and different size so that consumer can

choose as their wish with wide selection. BoConcept products are multi functional as well for

example: sofas can use for seat and bed which indicates uniqueness. Products are environmental

friendly with awareness with environment and climates. By using BoConcept product, consumer

can feel pleasure and luxury of lifestyle. BoConcept products are innovative and satisfactory.

Although India has traditional heritage and cultural country, time led Indian huge development

in information technology and increasing literacy and employment rate. As people becoming

more sophisticated and wishing luxury life in city areas. More than 50% people in India are

wishing modern, qualities and sophisticated furniture. Hence BoConcpet can use its premier

product strategy for the smart customers. That leds to product differentiate on the market.

6.1.2. Price strategy:Pricing is basically setting a specific price for a product or service offered. The pricing strategy

depends on its product position in the market. The company may use various pricing strategies

such as penetration, skimming, competitive pricing, psychological pricing, price wars, etc.

Normally company uses penetration prices if its product is entirely new to the market so it may

charge low prices to increase market share.

Setting a price is not something simple. The general law that a low price will attract more

customers. If the franchisee or retailers will sets the price too high, that does not attract

56

customers. If the price sets too low , company can`t reach its profit and may customers can think

negative; like it is low quality product. Hence setting the price is very essential. The price should

be affordable according to quality of product by considering consumer income status and their

buying behaviour. So BoConcept has to set up its competitive pricing strategy to attract

consumer in Mumbai market.

BoConcept has to attract its middle and high class people by setting appropriate price, it must not

be like lower than local retailers and not higher than those targeted customers could not

purchase. That keeps brand image as always standard.

6.1.3. Promotion strategy:Once the communication objective is identified, then it is imperative to analyse the message and

the promotional mix that is used by the company including advertisement, sales promotion,

publicity and personnel selling.

For instant India is very communicative country with huge percentage of IT sector. There are

several option to promote BoConcept products. By advertising on TV-channels is most effective,

newspapers, magazines and posters are mostly common way. E-commerce and M-commerce is

highly increasing, that means BoConcept can offer and promote its services through those

means.

In Mumbai there are several public places where business can promote through PR (Public

relation). BoConcept can held different programme and events to promote company’s image.

Press relations, public relations, events, exhibition centres are also common means in Mumbai.

Personal selling is also one of the reputed media in India. Face to face interaction with customers

(oral communication), sales consultants, sales assistant, sales by phone can use to prompt

products.

Direct marketing where BoConcept can select some potential customers in the area and start

direct mails, internet marketing and telemarketing.

6.1.4. Place (Distribution) strategySince Mumbai is a big financial city of India which is overcrowded and with high traffic area.

Mumbai driven by high trading volumes for equities and good presence of global banking and

financial services firms, Mumbai has grabbed a place in the world's top 10 financial flow hubs

list. Mumbai is the centre city for shipment as well.

57

BoConcept products Denmark to Mumbai will deliver through shipment. The products will

shipped from the European Distribution Centre (EDC) located in Ølgod, Denmark as it is a

international collection which is being QC'ed by BoConcept. It is a far way to reach.

But the good thing is by the end of next year the Asia Distribution centre (ADC) will be opened,

which is located in Shanghai. It will make easier to distribute products to Asia Pasific, this will

make shorter lead-time for the customers in India. It will minimize the cost of distribution as

well. Hopefully it will be success.

7. Conclusion

In this research we have found out that India has had one of the consistently highest GDP growth

rates of the last few years and further liberalization of economy has led foreigner and domestic to

invest. We can say that the stability is getting higher in India with it is huge and young consumer

and those factors are making India one of the most popular country to invest for future. Today

Indian consumers are increasingly welcoming modern environments over the traditional. So to

question of whether there are opportunities to create significant businesses out of these changes;

the answer is yes!

These behavioral developments have attracted the attention of both domestic and international

consumer-goods companies and retailers. Consumers in India are becoming more design, quality

and brand focused and they are welcoming foreign brands especially in the major cities like

Mumbai, New Delhi and others. But in order to success in this market there are some facts and

strategies that company should follow.

First of all the industry is getting more competitive day by day and there are a lot of domestic as

well as foreign companies competing in this market as mentioned before, in order to be able to

compete in Mumbai, BoConcept should create differential advantage by focusing on competitor

weaknesses and perceive the consumer by providing value for them above competitors and use

marketing mix more effectively, for example produce differentiated, quality product and sell it

with affordable price. Company should set their price according to consumer income level, not

so low because it can damage the company image, by doing that BoConcept need to promote

their products well and keep the cost low and so that BoConcept chose franchising as entry

58

mode. Franchising entry mode is with low costs, less risk hence perfect knowledge about the

market gives competitive advantage to the franchisor (BoConcept). BoConcept is going to start

produce in China and sell all the pacific market which means cheaper labor with closer resources

will respond the demand in very short time and expand it is market to other major Cities then

Mumbai.

When it is business it is important to know about consumer, their buying behavior, their buying

culture, and it is important to know; how, where, when and what do they buy? Knowing about

these factors leads the company to take right action at the right time without wasting so much

time and money for the next step. According to research a very low percentage of people know

about BoConcept in Mumbai but changing buying behaviors, increasing income and number of

well educated, modern thinking people make us say YES! There are possibilities for BoConcept

in India

59

8. Bibliography

Books:

David Jobber, Principles and Practice of Marketing, (5th edition 2007)

Svend Hollensen, Global Marketing – a decision-oriented approach, (4th edition 2007)

John Sloman: Economics (6th Edition 2006)

Pervez Ghauri,Kjell Grønhaug: Research Methods in business studies (3rd edition)

India, Indian economy, consumers and furniture companies:

http://www.euromonitor.com

http://www.marketlineinfo.com

http://www.oecd.org

http://www.economywatch.com/gdp/world-gdp/india.html

http://www.earthtimes.org/articles/show/136583.html

https://www.cia.gov/library/publications/the-world-factbook/print/in.html

http://www.nytimes.com/2007/04/19/business/worldbusiness/19iht-fdi.2.5352972.html

http://economictimes.indiatimes.com/Indicators/Consumer_prices_rise_by_55_pc_in_October/articleshow/2572646.cms

http://www.businessworld.in/bw/2009_11_12_Industry_Grows_9_Adds_To_Stimulus_Debate.html

http://www.indiastat.com/economy/8/stats.aspx

http://www.thisismyindia.com/about_mumbai/mumbai-geography.html

Articles about BoConcept:

http://www.boconcept.com

http://arabnews.com/?page=9&section=0&article=128526&d=17&m=11&y=2009

http://www.boston.com/yourlife/home/articles/2005/06/16/a_furniture_crossroads_in_cambridge_has_a_trio_of_takes_on_contemporary/

http://www.euroinvestor.co.uk/news/story.aspx?id=10571396

60

http://www.euroinvestor.co.uk/news/story.aspx?id=10571396



http://arabnews.com/?page=9&section=0&article=128526&d=17&m=11&y=2009

http://www.thisismyindia.com/about_mumbai/mumbai-geography.html

http://www.indiastat.com/economy/8/stats.aspx





http://www.nytimes.com/2007/04/19/business/worldbusiness/19iht-fdi.2.5352972.html

https://www.cia.gov/library/publications/the-world-factbook/print/in.html

http://www.earthtimes.org/articles/show/136583.html

http://www.economywatch.com/gdp/world-gdp/india.html

http://www.marketlineinfo.com/library/ClientMessage.aspx?code=403

http://www.euromonitor.com/

http://www.hfbusiness.com/article/bo-concept-rolls-out-3d-imaging-software-for-consumers-33459_1.html

http://furniture-home.myakka.co.uk/?p=460

http://www.franchise.org/BoConcept_USA_Inc_franchise.aspx

Online survey questionnaires:

http://FreeOnlineSurveys.com/rendersurvey.asp?sid=h2ooegde1cip4er675251

9. Table of enclosure

Appendix 1- Email from BoConcept

Appendix 2- Results for BoConcept Furniture (Online survey)

Appendix 3- Results from Face to face interview

Appendix 4- Home furnishing Database

Appendix 5- Questionnaires

61

http://www.franchise.org/BoConcept_USA_Inc_franchise.aspx

http://furniture-home.myakka.co.uk/?p=460



Bo concept india

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consumer analysis

boconcept indian market

consumer behaviour analysis

strategies boconcept

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introduction boconcept

competitor analysis

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