A CASE STUDY ON EXPANSION ENIGMA FACED BY
CASE PRESENTED BY :
Tarang Textiles -Company Profile
• Tarang is a manufacturer and marketer of fabrics for suitings and shirtings .
• Two decades old company.
• Turnover of 225 crores in 1995-1996.
% shares of fabrics
Current Market Share
tarang market share rest of the other players
Company’s Brands In The Market
Parameters Climbers SettlersAge 25-35 33-45
Income 5000 4000-8000
Family 5 5
Working as Executive in small and medium companies
Mid range banks /PSU’s
Experience 4-12 years
Hobbies Reading magazines and watching TV
Concentration 40% south and 23% west
Mainly southern cities and towns
Profile Of Existing Customers
Other features Durability, price and crease resistanceAmbitiousAspirationHardworkingPerseveranceDrive towards material was of significant value
Durability, price, easy availability.Concern for children’s education, savings for retired life [priority] Loyalty to Tarang –non availability of other brand as reason for choosing Tarang
Segmentation & Target markets Segment Brand
Children Spoorthy Twinkle TrousersCasuals
Youngsters Live well Thirst TrousersCasualsShirts
Excellence Pinnacle TrousersCasualsShirts
Analysis of existing branded Shirts Market :
• Branded shirts range from 150-1100
• Three premium brands were of the same company and accounted for 40% share.
• All other companies had market share less than 10%.
• Popular end had only two major brands: Prize and Rans
• Prize was national brand with no exclusive outlets and operating in at a price range of 150 - 225 with more presence in north and west India
• ‘Rans’ is a regional brand well entrenched in southern cities with 4 exclusive showrooms and operating in a price range of 175-225
Our Target Market Segment
Focusing on Middle and Economy class
Characteristics of this segment High Market Potential. Pricing is a crucial factor. Low input cost and high profit margin. Comparatively lower brand image required. Minimal product differentiation required.
National brand Regional brand
Showrooms No exclusive showrooms; distribution through retail chain (dense in north and west india-65%)
Exclusive showrooms in 4 major cities in south India
Analysis of potential competitors
Why No to Premium Segment?
No experience. Head on competition. Strong Brand Image Required. Huge upfront promotional investments.
•Tarang is operating for 20 years and has developed good market share in fabrics.
•Known among customers for durability and price.
•Largest contribution to sales-20% school and corporate uniform.
• It has about 530 exclusive retail outlets across 248 towns, with south and west accounting for 65% of them.
Strengths . . .
Lacks brand personality. Less presence in northern and eastern part of
India. Customers were not aware of sub-brand
existence. No advertising and promotional activities to
improve its brand image and expand its customer base.
Branded readymade shirts has a market of Rs. 800 crores
which is a very huge market opportunity.
Readymade shirts segment growing at 25% since last 3 years.
Focus on middle and economy class consumers who are already aware of Tarang.
Competitors at lower price ranges are weak.
growth rate per annum
growth rate per annum
Prize and Rans are competitors.
People are not loyal to a particular brand. Hence the biggest challenge is to develop a brand.
1. Tarang should enter men’s readymade because : Growth of fabric entry industry is only 3-5% while that of ready
made segment is 25 % per annum for the last three years. The readymade market is valued Rs. 800 Cr today and even a
marginal share will boost Tarang’s turnover by 20 percent every year.
2. Tarang should target : Economy and Middle class.
3. Operation ghost shoppers reveals the fact that : Don’t compromise on quality. Variety of shirts to be produced.
Provide fabrics to other players in the ready made industry.
Geographic segmentation – Need to mark presence in Northern and Eastern India.