Impact of Changing
Business Dynamics
to Domestic Market
Basics
What business are we in?
• Who is our target customer? – Age group,
area, socio-economic class etc
• What are we selling? - product, benefit –
real/psychological, service, solution, or
combination of the above?
• All subsequent slides need to be analyzed
considering above parameters.
Major Changes in Business
Dynamics
World is becoming one market.
• Political factors – bilateral trade agreements,
custom duties, exchange rate , balance of trade
compulsions post economic crisis etc
• Consumer awareness through media, internet,
telecom revolution, travel etc
• Technology competes across border.
• Competition need not be from same product
category but diverse universal product basket.
Curtain should compete with all window covering
products or Bath-mat with other floor covering
products.
Commodity Boom
• Prices fluctuating and mostly going up across most
commodities.
• Time for reengineering products to ensure that
popular price points are adhered to.
• Look at alternative technology, supplier, fiber and
so on.
• ASP may go up and quantity may come down
• Composition of share of wallet may change.
Changing Face of India
• Macro factors - growth rate of GDP, rise in Income
level, housing boom, retail revolution
• Infrastructure –
▫ Transport – road, railway, air
▫ Banking, communication
• Legal – GST – making India as one country
Despite all the above, Unity in Diversity has not
Changed.
Consumer is changing
Consumer has more money.
• Consumer was always rich and now getting richer
at all income levels.
• Consumer has more money to spend to upgrade
lifestyle if marketer is willing.
• Consumer durables have garnered big money from
consumers. It is time for textile companies to create
value and garner big money.
India is young country.
• India is young country and young customers are
expected to be different.
▫ Brand conscious
▫ Lalitaji does not work any more. Surf using “Daag
Achche Hai”
▫ Informed customer - Internet and social communities
- the way consumer communicate to each other has
changed
Housing Boom
• New homes is big occasion and big reason to buy all
new home products.
• Smaller homes metro – products for small home
• Nuclear family
Channel for Sales
Changing Face of Retail
• Modern trade:
▫ From Chandni Chowk to Select Saket Mall
▫ From street shopping to air-conditioned luxury
centers
▫ Week-end family outing destination
• Organized Retail expected to be 15% by 2013.
Misleading as it is already higher in lifestyle
category in big metro and mini-metro markets.
Changing Face of organized retailers
• After economic crisis, consolidation, all retailers are
back on aggressive growth path. Expansion also in
B and C category towns. Retailers are achieving
critical scale. Private labels and imports becoming
more viable.
• During retail evolution process–
▫ MRP going up
▫ cost to MRP multiple becoming favorable.
▫ Consumer willing to buy at higher prices.
• Display will generate new demand as well as
convert latent demand in actual demand.
Value Segment
▫ Value retailing was cheap poor quality products at
one time.
▫ Now, Value retailers are upgrading products.
▫ Many value retailers offer lifestyle experience and
also sell same products that premium stores sell.
▫ Premium – Department store and Hyper – value are
definition of text-books. Consumer may not follow
the same.
▫ Value need to be seen by benchmark of Indian
customers and not by Western markets.
Home Retail
• Increase in space by leading players – Home
Center, Home Stop, @home, Home town
• Other home retailers on block – Evok, Reliance
Living, Houseful, Home Store etc.
• Soft furnishing – one of the most profitable area for
home retailers – advantage – textile -Other product
not easy to get higher price and margin.
• One of the large retail group – Soft furnishing
group beat apparel for 12 weeks continuously and
they changed plans for category.
Unconventional Channel of Sales
• TV Shopping –
▫ Product presentation luxury
▫ 70% sales coming from non-metro towns. Latent
demand and underserved.
• Internet
Marketers/Retailers
• Create new demand for product categories
• Watch your competition and respond suitably.
Portico Experience
Targeting the youth
• Major chunk of Indian population is young
• Sports is big thing.
• Foot-ball becoming extremely popular with
premium youth customers. Foot-ball is cool.
• The biggest sporting event - FIFA tournament in
2010
• Introduced product at Rs. 1999/- single bed sheet
set
Product
Cashing on Football mania
• Typical display
Display
Wedding Collection
Trousseau
• Portico had introduced wedding collection of silk
yarn dyed jacquard bedding of 13 piece set at MRP
Rs.20000/• Designs from exporter who sold same products to
leading brands of Italy
• Did not do well and difficult to sell at even Rs.
10000/-
Marigold- The Wedding collection
• A proper wedding gifting solution
• A noble idea of reusable packaging
• Huge expenditure in weddings
Marigold- Comforter set
27
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Duvet Set and towel set
Marketing Initiative-Marigold collection
• Print ads- Newspaper and Magazines
• Ad in Matrimonial classified(Targeting the right
customers)
• Contest on Internet
▫ Shaadi.com
▫ Bharatmatrimony.com
Marigold-print ad
Contest on Shaadi.com
Packaging Innovation
Packaging
•
•
•
•
Plastic was becoming expensive.
Eco movement becoming bigger.
Lot of wastage of small bits at stitching plant.
Modern retail did not require product to be packed
in plastic.
Eco-Friendly Cushion Packaging
Creative Portico (India)
Pvt. Ltd.
34
Result
• Solution to make cushion cover from waste –
▫
▫
▫
▫
Saving of cost
More eco friendly
More value to consumer
Consumer can experience look and feel of product
better and so on.
• Got the award for “Innovation in Packaging” by Du
Pont, USA and “India Star award” for packaging.
You are most welcome to give me feedback now or send to
rajiv@porticoindia.com
or
rajivmerchant@hotmail.com
Thank You