marketing

SILK SCARVES

Anamika Dham(IED 2010)

MARKETING ANALYSIS

Friday 1 October 2010

PROJECT

The aim is to export silk scarves by Indian manufacturers into Europe.


EXECUTIVE SUMMARY

India is one of the biggest and the main manufacturer for silk fabric in the world and with its developing economy, the indian sector is increasing its exports for its silk products in the international market.

In this project we have set out strategies of our company that intends to appear in international exports. After a lot of research and various factors, we have come to define our country that has the best characteristics for the export of our product. The country has been able to switch to a more detailed analysis of the export market, its risks and its opportunities.Then outlining the ways in which the country will operate in the new market, finally with a statement of P & L analysis coming up with the economic feasibility of the strategy concerned.


COMPANY

• Javid Trading Pvt. Ltd. was established in 2006. Based in Delhi it is one of the leading manufacturers, exporters and suppliers of shawls, Stoles, Scarves, Paper Mache products, etc. The company also deals in a huge range of Kashmiri handicrafts. Today, our collection is most sought after by domestic and overseas clients because of its exclusive and intricate designs.

From crafting traditional designs to modern prints, and our ability to blend traditional motifs with contemporary designs and the ability to adapt to changing fashion demands, we have won admirers from global fashion-conscious buyers. Clients from all over the world rely on us for refreshingly new and unique shopping experience. Our international market base spread over several countries across Europe, America and Middle East.

JAVID TRADING PVT. LIMITED


PRODUCT

• THE PRODUCT IS SILK SCARVES BEING MANUFACTURED FROM INDIA. THE SCARVES CAN BE CUSTOMIZED ACCORDING TO THE BUYERS NEEDS.

• WE ARE PRODUCING SOMETHING DIFFERENT THAN THE OTHER SILK MANUFACTURERS IN ORDER TO MEET THE BUYERS NEEDS AND WE KEEP CHANGING THE STYLES WITH THE CHANGE IN TREND EVERY SEASON.

• CAN BE USED BY BOTH MEN AND WOMEN IN WINTERS AS WELL AS SUMMER.

• DIFFERENT COLORS, BEADED OR EMBROIDERED.


PRODUCTION CHAIN

raw material(100%quality silk fiber)

yarns(spinning, twisting, weaving, knitting and

weaving)

fabric

dyeing colorsembroidery, beads, threads or

other materials for customizing

Finishing

finished and packaging SILK SCARF

design of the scarf

IN HOUSE PRODUCTION


EXPORTING DATA

... partner India

reporter value in euros(product) Similar articles of silk or silk waste

Belgium value in euros 21

Germany value in euros 1171

Spain value in euros 1913

EU27 value in euros 202858

France value in euros 147888

United Kingdom value in euros 5408

Greece value in euros

Italy value in euros 33833

Portugal value in euros

Sweden value in euros 6712


IMPORTING DATA

... partner India

Reporter value in euros(product) Similar articles of silk or silk waste

Belgium value in euros 72009

Germany value in euros 3633438

Spain value in euros 2467044

EU27 value in euros 21789709

France value in euros 3301733

United Kingdom value in euros 3290876

Greece value in euros 353835

Italy value in euros 3705203

Portugal value in euros 124418

Sweden value in euros 235439


BER ANALYSIS

VARIABLES UK ITALY GERMANY FRANCE

GDP real growth rate

-4.6%(3.5) -5.1%(1) -4.9%(2) -2.5%(10)

GDP PPP $ 34,800(10) $ 29,900(1) $ 34,100(9) $ 32,600(5)

RATE OF INFLATION

2.2%(10) 0.8%(7) 0.3%(2.5) 0.1%(1)

GDP purchasing power

$2.19Trillion(8)

$1.739 Trillion(1)

$2.81 Trillion(10)

$2.097 Trillion(7)

MACRO-ENVIRONMENT FACTORS


VARIABLES UK ITALY GERMANY FRANCE

IMPORTS$486 BILLION

(2.5)$410.2

BILLION(1)$966.9

BILLION(10)$538.9

BILLION(4)0

EXPORTS$357.3

BILLION(1)$412.9

BILLION(1.5) $1.159

TRILLION(10)

$472.7 BILLION(2)

AGE (16-64) 67.1%(10) 66.3%(6) 66.1%(5) 65%(1)

VAT (TAXES) 17.5(1) 20(10) 19(6) 19.6(8)

TARIFF( DUTIES)

6.4% 6.4% 6.4% 6.4%

MARKET OPPORTUNITIES


• GERMANY

• 4TH LARGEST BY NOMINAL GDP REAL GROWTH RATE IN THE WORLD

• LARGEST NATIONAL ECONOMY

• 5TH LARGEST IN GDP PPP


SILK SCARVES IN GERMANY

AFTER LOOKING AT GERMANY’S IMPORTS AND THE DATA, WE HAVE FIGURED OUT THAT THE BEST MARKET TO EXPORT OUR SCARVES TO WOULD BE GERMANY.GERMANS IN GENERAL LOVE TO WEAR SCARVES, WEATHER ITS OUTDOOR OR INDOOR, A STUDY RESEARCH SAYS THAT GERMANS LOVE THEIR NECK SCARFS, THEY ARE WORN BY WOMEN, MEN, OLD, YOUNG , CONSERVATIVES , ALTERNATIVES AND EVERYONE IN BETWEEN. THEY VARY IN SIZES AND ARE MOSTLY WORN ALL YEAR ROUND.


CONSUMER PROFILE

• DEMOGRAPHIC INDICATORS: The per capita income of germany is in one of the top 25 countries of the world and they have had a steady growth in their population for the last few years. Their rate of urbanization from(2005-2010 est) is 0.1 % and now about 74% of them is urban population.

• PURCHASING POWER: Germany’s annual GDP purchasing power rate is est 1.4%.Their annual growth rate has increased over the last 3 years,(2006) 2.7%; (2007) 2.5%; (2008) 1.7%; ,exception for the year (2009 est.) -5%. The percentage of the household income or consumption for higher 20% is pretty high compared to the lower 10%. And they have one of the highest importing from international countries in different sectors and since they have a large number of population in age range between 16-64(mostly employed), hence they are most likely to have good amount of buyers who like to spend on fashion items.


• GERMAN FASHION: In fashion terms Germany has in the space of a few years discarded its developing country status and created a thriving and unique fashion industry whose heart beats in Berlin.German fashion relies on individuality, expression and character, is sometimes witty, sometimes elegant. German designers achieve success abroad and German fashion labels attract customers with quality products. And the Berlin look has a magnetic attraction for trend scouts.And they love to have something which is unique and made according to their tastes and can be used in all climates.


CONSUMER(Ideal)

Production of the product

Needs or solutions proposed

Groups of buyers


• everyday life, formal events or elegant wear

• natural fiber fabrics

• hand sewed, customized, color coordination

• single buyers, unisex

• 16-64 age group

• high quality, easily available

Examining the similarities between both the consumer analysis and ideal consumer, we notice that the german market has a large number of

age range what we are looking at for our ideal customer, it also has a large number of people who in their fashion look for elegance and they

want something which is unique and hence with the above mentioned we can conclude that our ideal customer matches the consumer profile of the

german market.


DISTRIBUTION• EXCLUSIVE DISTRIBUTION:

EXCLUSIVE DISTRIBUTION is when a company chooses only one distributor in one market area and the distributor will sell only that brand in the market.

we are choosing this particular strategy because our product is mostly known for its quality, uniqueness, image and since we are one company who make customized scarves with high quality fabrics. We are going to sell our product to our distributor as they are the client, completely finished and we want guarantee that it will have rapid delivery and no modifications being made because we will make the product according to our buyers needs. we want to have a local distributor/agent or importer that will be responsible with the regulations.

The distance between India and Germany will give us high transportation costs, there would be tariff duties on all the products we export which would be 6.4% and then the shipment cost or the airfare cost would be additional.

CHANNEL:

DistributorEnd User

Manufacturer

Transportation cost

Shipment/airfare cost

Point of sales


DISTRIBUTION strategy

PRODUCER ANSWER STRATEGY

concentrate totally on production at the most competitive cost and delegate the marketing function entirely to the

distributor

we have chosen this particular strategy since we are a small manufacturing company in India, we want to totally concentrate to produce our product and make it completely according to the buyers needs and not get much into the marketing it in the new market, We want to have a distributor, who will make all the market function, and deliver the goods in the expected time and be able to sell all our products in order for profits for

the company. For us, The distributor will be our client.


PROMOTION• Indian silk is known worldwide, and everyone is aware of the high quality

silk fabric produced in India. With the promotion, our main aim would be to communicate to the consumers about our scarves which are of high quality, hand made out of the strongest natural fiber and they can be customized according to the consumer needs for increasing sales and the number of clients.

• Promotion strategy:TEMPORARY SALES EVENT

• we are going to participate in the trade fair show (bread and butter) in german markets for our company, This we are going to be able to do by the local distributor’s help which we have chosen for our company as he would be aware of the market, he is going to get all the possible clients and buyers. We are going to pay for the participation in the trade fair show, but when we get buyers, our distributor would be the one dealing with the relations with the buyers and us. We are choosing this way because last few years B&B’s have exceeded its expectation with atleast 60.000 visitors and growing rapidly every year, increase in number of people, buyers, and our product would be known by so many in the german market.


• we are also going to have an advertisement on our company, so the people are aware of the company and know about it before becoming our clients, The advertisement will have just a brief description of our products and how we produce them in order to ensure high quality unique products.

• Since our cost would not be that high and we are a small company, we will not want a very big stall at the fair and alot of advertising for it. we would suggest, 30% for advertising and the rest for the trade fair show stand.


COMPETITORS ANALYSIS


COMPETITORS ANALYSIS

... Reporter Germany

Partner Product/Indicators Value in Euros

France Similar articles of silk and silk waste

5124566

united Kingdom Similar articles of silk and silk waste

722799

Italy Similar articles of silk and silk waste

4555789

Portugal Similar articles of silk and silk waste

10618

Sweden Similar articles of silk and silk waste

21771

... Reporter Germany

Partner Product/Indicators QTY in 100 kgs

France Similar articles of silk and silk waste

49

united Kingdom Similar articles of silk and silk waste

98

Italy Similar articles of silk and silk waste

141

Portugal Similar articles of silk and silk waste

0

Sweden Similar articles of silk and silk waste

1

Main competitors- France and Italyvalue for France- 104582.9value for Italy-32310.56

After analyzing the data from eurostat, and seeing the amount of imports from other EU countries to germany for silk scarves, we see that our two main competitors are France

and Italy.The value of imports from France is a lot higher than that of italy and india.

India’s value of imports to germany is 5615.8 for 100 kgs, Hence we see that, since germany has a huge market, the buyers will be price sensitive and they would want a

cheaper price than that of France and Italy.Italy’s cost of import is high because they also produce silk, and they are the 3rd largest producer and they have higher quality silk, but even india produces high quality silk

and we customize the scarves according to customer needs.Hence we would keep the pricing as low as possible because we will also have a lot of

transportation costs additional to the production.

France- High and normal qualityItaly- High and best qualityIndia- medium-low and high

quality


COMPETITIVE ADVANTAGE

In the german market, India has a competitive advantage over the main two competitors.

we can see that through the data we analyzed before and with the internal competitive advantage which is mostly based on production, management cost

control. In this we see, that we have higher productivity level and we are resistant with competitors with diminishing prices.

India will have lower prices and that would be an advantage for them as the german market is a huge market and the buyers will be a bit price sensitive if they are

getting the same product with high quality in cheaper price


PRICESince we use a simple production chain our production cost will not be that high as we are in house producers and manufacturers. Germany has a high per capita income but their annual purchasing power rate has lowered in the last year, so they would be price sensitive about their costs, Hence our cost would be lower compared to the prices of scarfs exported from italy or france.Since our production cost is not high, so keeping the pricing low would not harm our profit, It would be advantageous for us, as germany being a big market will take in more our products with lesser price than one from france or italy.According to us the lower price would have a direct impact on company’s profitability, the buyers level of demand and our company to get a place in the german marketWe are going to use the strategy for price with competitors objective, in order to lower the chances of the competitor to get in the market before us.we will stabilize the prices at competitors level.Our products price is going to be medium low as italy and france both have high prices for their products.


SWOT ANALYSISStrengths

- in house manufacturer and producer- high quality production- leading companies in India- one distributor only- customized - customer you find will be most likely to be loyal.

Weaknesses

- Less innovation- sales would depend on type of product- since being shipped from india, their might be a delay in delivery- poor access to distribution

Opportunities

- Add new features to your product- regular buyers-changing customer needs-inexpensive - technological advances

Threats

- price sensitive-product sensitive- taxes and duties cost-if the distributor chooses another company over ours.


P & L ANALYSIS

Financial year 2010

Revenue per unit ¢60

Total revenue from sales 25660.02

Vat(19%) 4875.4

Total revenue 20784.62

Costs

Promotion 5060.79

Tariffs 359.412

Production cost 37.115

Total cost

Profit 15327.3


MARKETING PLAN• Our main aim is to enter the German Market , Our main mission in the market would be to

distribute high quality silk scarves to the crowd.

• Our Ideal client would be anyone and everyone with simple,elegant or classic lifestyle and wanting uniqueness or exclusivity in their fashion sense.

• For our distribution, our main strategy would be exclusive strategy, which is basically we will have only one local distributor in the german market who will distribute the products to the end users

• We will promote the company and the product by having a stand in the local trade fair show and having few advertisements on the company to make the people more aware of our intrinsic designs and exclusivity.

• Since we have a in house production and manufacturing process,The competitive advantage that we would have are internal advantages because of high productivity level, exclusivity,uniqueness in your product and low pricing.

• German market is a huge market in fashion, and our company believes in changing the products with each new trend and since our pricing would be medium-low, we would have more loyal customers and have more buyers for our inexpensive high quality product.

• After analyzing all the data, strategies and the estimated calculated price, we see that the company will undergo a profit.


THANK YOU


marketing

Documents

euros 1913eu27 value

euros 2467044eu27 value

silk wastebelgium value

france value

germany value

spain value

greece value

portugal value