Impact of Changing Business Dynamics to Domestic Market

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Impact of Changing Business Dynamics to Domestic
Market
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Basics
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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.

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Major Changes in Business Dynamics
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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.

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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.

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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.

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Consumer is changing
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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.

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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

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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

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Channel for Sales
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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.

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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.

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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.

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Home Retail

• Increase in space by leading players Home
  Center, Home Stop, _at_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.

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Unconventional Channel of Sales

• TV Shopping
• Product presentation luxury
• 70 sales coming from non-metro towns. Latent
  demand and underserved.
• Internet

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Marketers/Retailers

• Create new demand for product categories
• Watch your competition and respond suitably.

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Portico Experience
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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

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Product
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Cashing on Football mania

• Typical display

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Display
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Wedding Collection
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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/-

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Marigold- The Wedding collection

• A proper wedding gifting solution
• A noble idea of reusable packaging
• Huge expenditure in weddings

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Marigold- Comforter set
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Duvet Set and towel set
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Marketing Initiative-Marigold collection

• Print ads- Newspaper and Magazines
• Ad in Matrimonial classified(Targeting the right
  customers)
• Contest on Internet
• Shaadi.com
• Bharatmatrimony.com

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Marigold-print ad
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Contest on Shaadi.com
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Packaging Innovation
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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.

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Eco-Friendly Cushion Packaging
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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.

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You are most welcome to give me feed-back now or
send to rajiv_at_porticoindia.com or
rajivmerchant_at_hotmail.com
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Thank You