A A

Major Project Study Report On Major Project Study Report On

TitledTitled

“A Study of Brand Preference towards Men’s Wear” A Study of Brand Preference towards Men’s Wear”

(Special Reference to Pant & Shirt(Special Reference to Pant & Shirt)

Submitted in partial fulfillment for the Submitted in partial fulfillment for the

Award of degree of Award of degree of

Master of Business AdministrationMaster of Business Administration

Submitted toSubmitted to

Rajasthan Technical University, KotaRajasthan Technical University, Kota

(www.rtu.ac.in)(www.rtu.ac.in)

Session 2008-2010Session 2008-2010

Under the Guidance of:Under the Guidance of: Submitted By:Submitted By:

Nisha JainNisha Jain Gaurav Kumar TiwariGaurav Kumar Tiwari

Project Guide & FacultyProject Guide & Faculty MBA IVMBA IVthth Sem. Sem.

Vision School of ManagementVision School of Management (Affiliated to Rajasthan Technical University & Approved by A I C T E)(Affiliated to Rajasthan Technical University & Approved by A I C T E)

Udaipur Road, Chittorgarh (Raj.)Udaipur Road, Chittorgarh (Raj.)

E-mail: E-mail: vision_mgmt@yahoo.comvision_mgmt@yahoo.com

Website: Website: www.visionmanagement.orgwww.visionmanagement.org

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PrefacePreface

MRP is prepared as the partial fulfillment for Two-Year degree

Program of MBA curriculum of Rajasthan Technical University, Kota. It is

expected from an MBA to possess a good communication & effective presentation

skills.

Objectives of the project report are:-

To study brand preference.

To study the consumer behavior.

The research provides an opportunity to a student to demonstrate application of his/her knowledge,

skill and competencies required during the technical session. Research also helps the student to devote

his/her skill to analyze the problem to suggest alternative solutions, to evaluate them and to provide

feasible recommendations on the provided data.

Although I have tried my level best to prepare this report an error free report every

effort has been made to offer the most authenticate position with accuracy.

This report contains a number of additional features.

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DECLARATIONDECLARATION

This is to certify that Market Research Project Report on “A Study of Brand Preference towards MenA Study of Brand Preference towards Men

Wear Special Reference to Pant & ShirtWear Special Reference to Pant & Shirt” submitted by me in Masters of Business Administration

Program from Vision School Of Management, Chittorgarh [Rajasthan technical university, Kota] is

my original work and the project report has not formed the basis for the award of any diploma,

degree, associate ship, fellowship or similar other titles. It embodies the original work done by me

under the able guidance and supervision of Nisha Jain (Guide & Faculty) Vision School of

Management, Chittorgarh.

------------------------------ ----------------------------

Nisha Jain Gaurav Kumar Tiwari

Project Guide M.B.A. IV Sem.

Date--------------------- Date-------------------

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ACKNOWLEDGEMENT

The successful completion of a Market Research Project Report requires guidance & help

from a number of people. I was fortunate to have all the support from my teachers. I therefore

take this opportunity to express my profound sense of gratitude to the all those who extended

their whole hearted help and support to me in completing the project study report work on

A Study of Brand Preference towards Men WearA Study of Brand Preference towards Men Wear

Special Reference to NimbaheraSpecial Reference to Nimbahera

I also express my deep sense of gratitude to Nisha Jain (Guide & Faculty), who has helped

us to do our project. We also thank to other faculty of VSM & respondents for his valuable

help in each stage of the project. Because of his co-operation and continuous guidance

successful completion of this project study report was made possible.

I am sincerely thankful to Dr. A.L. Jain (Director, Vision School of Management) for

allowing me to undertake the report and making available all facilities for the successful

completion of the report besides guiding me to pursue the study on proper line.

I also express my deep sense of gratitude towards Mr. Mukesh Kumawat, Mr. Vibhor

Paliwal, Mr. Rahul Jain, Ms. Pratibha Pagaria, Ms. Shobhika Tyagi (Faculty), P.L.

Dashora (Librarian) & all faculty members.

No Acknowledge would suffice for the support my family members, my training colleagues,

classmates & friends. Lastly, I extend my thanks to all those whose name have not been

mentioned way in successfully carrying out the project report.

ThankingYou:

Gaurav Kumar Tiwari

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EXECUTIVE SUMMARYEXECUTIVE SUMMARY

The project have to learn both the art and science of retailing by closely following how the other parts

of the world are organizing, managing, and coping up with new challenges in an ever-changing

marketplace. In the project use innovative retail formats to enhance shopping experience and try to

understand the regional variations in consumer attitudes to branded garments. In report put the efforts

in the following aspect to improve its Brand Image:

1. Advertising, promotions, and campaigns to attract customers have to bedesigned and

executed to build loyalty by identifying regular shoppers and offering benefits to them.

2. Efficient management of high-value customers is vital.

3. Monitoring customer needs constantly must be done with long-term relationships in view.

4. It must improve its brand image from discounted good

Retailing sector of India can be split into two segments. They are the informal and the formal retailing

sector. The informal retailing sector is comprised of small retailers. For this sector, it is very difficult

to implement the tax laws. There is widespread tax evasion. It is also cumbersome to regulate the

labour laws in this sector. As far as the formal retailing sector is concerned, it is comprised of large

retailers. Stringent tax and labour laws are implemented in this sector. If the retail industry is divided

on the basis of retail formats then it can be split into the modern format retailers and the traditional

format retailers. The modern format retailers comprise of the supermarkets, Hypermarkets,

Departmental Stores, Specialty Chains and company owned and operated retail stores The traditional

format retailers comprise of Kiranas, Kiosks, Street Markets and the multiple brand outlets. The retail

industry can also be subdivided into the organized and the unorganized sector. The organized retail

sector occupies about 3% of the aggregate retail industry in India.

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Table of ContentTable of Content

Certificate I

Preface II

Declaration III

Acknowledgement IV

Executive Summary V

Table of Contents VI

Chapter No. TITLE PAGE NO.

1 Industry Introduction 1-32

Company Profile & Their Products 33-46

2 Conceptual Framework 47-75

3 Review of Literature 76-86

4 Research Methodology 87-90

Data Analysis & Interpretation 91-105

Finding & Conclusion 106

Suggestion 107

Bibliography 108

Annexure 109-110

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Chapter No.: 01

Indian Textile Industry

The textile industry is the largest industry of modern India. It accounts for over 20 percent of

industrial production and is closely linked with the agricultural and rural economy. It is the

single largest employer in the industrial sector employing about 38 million people. If

employment in allied sectors likes ginning, agriculture, pressing, cotton trade, jute, etc. are

added then the total employment is estimated at 93 million. The net foreign exchange

earnings in this sector are one of the highest and, together with carpet and handicrafts,

account for over 37 percent of total export earnings at over US $ 10 billion. Textiles, alone,

account for about 25 percent of India’s total for ex earnings.

India’s textile industry since its beginning continues to be predominantly cotton based with

about 65 percent of fabric consumption in the country being accounted for by cotton. The

industry is highly localized in Ahmedabad and Bombay in the western part of the country

though other centers exist including Kanpur, Calcutta, Indore, Coimbatore, and Sholapur.

The structure of the textile industry is extremely complex with the modern, sophisticated and

highly mechanized mill sector on the one hand and the hand spinning and hand weaving

(handloom) sector on the other. Between the two falls the small-scale power loom sector.

The latter two are together known as the decentralized sector. Over the years, the

government has granted a whole range of concessions to the non-mill sector as a result of

which the share of the decentralized sector has increased considerably in the total production.

Of the two sub-sectors of the decentralized sector, the power loom sector has shown the faster

rate of growth. In the production of fabrics the decentralized sector accounts for roughly 94

percent while the mill sector has a share of only 6 percent. Being an agro-based industry the

production of raw material varies from year to year depending on weather and rainfall

conditions. Accordingly the price fluctuates too. India's trade in textiles and its share in

world trade can be categorized as follows:

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India’s Trade in Textiles

(1998)

Type India's Share in

World Trade

Yarn 22%

Fabrics 3.2%

Apparel 2%

Made-ups 9%

Over-all 2.8%

Global Scenario

The textile and clothing trade is governed by the Multi-Fibre Agreement (MFA) which

came into force on January 1, 1974 replacing short-term and long-term arrangements of

the 1960’s which protected US textile producers from booming Japanese textiles exports.

Later, it was extended to other developing countries like India, Korea, Hong Kong, etc.

which had acquired a comparative advantage in textiles. Currently, India has bilateral

arrangements under MFA with USA, Canada, Australia, countries of the European

Commission, etc. Under MFA, foreign trade is subject to relatively high tariffs and

export quotas restricting India’s penetration into these markets. India was interested in

the early phasing out of these quotas in the Uruguay Round of Negotiations but this did

not happen due to the reluctance of the developed countries like the US and EC to open

up their textile markets to Third World imports because of high labour costs. With the

removal of quotas, exports of textiles have now to cope with new challenges in the form

of growing non-tariff / non-trade barriers such as growing regionalisation of trade

between blocks of nations, child labour, anti-dumping duties, etc.

Nevertheless, it must be realised that the picture is not all rosy. It is now being admitted

universally and even officially that the year 2005 AD is likely to present more of a

challenge than opportunity. If the industry does not pay attention to the very vital needs of

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Compound Annual Growth Rate (CAGR) of different segments

Type CAGR (1993-98)

Yarn 31.79%

Fabric 9.04%

Made-ups 15.18%

modernisation, quality control, technology upgradation, etc. it is likely to be left behind.

Already, its comparative advantage of cheap labour is being nullified by the use of

outmoded machinery.

With the dismantling of the MFA, it becomes imperative for the textile industry to take on

competitors like China, Pakistan, etc., which enjoy lower labour costs. In fact the

seriousness of the situation becomes even more apparent when it is realised that the non-

quota exports have not really risen dramatically over the past few years. The continued

dominance of yarn in exports of cotton, synthetics, and blends, is another cause for worry

while exports of fabrics is not growing. The lack of value added products in textile

exports do not augur well for India in a non-MFA world.

Textile exports alone earn almost 25 percent of foreign exchange for India yet its share in

global trade is dismal, having declined from 10.9 percent in 1955 to 3.23 percent in 1996.

More significantly, the share of China in world trade in textiles, in 1994, was 13.24 percent,

up from 4.36 percent in 1980. Hong Kong, too, improved its share from 7.06 percent to

12.65 percent over the same period. Growth rate, in US$ terms, of exports of textiles,

including apparel, was over 17 percent between 1993-94 to 1995-96. It declined to 10.5

percent in 1996-97 and to 5 percent in 1997-98. Another disconcerting aspect that reflects

the declining international competitiveness of Indian textile industry is the surge in imports

in the last two years. Imports grew by 12 percent in dollar terms in 1997-98, against an

average of 5.8 percent for all imports into India. Imports from China went up by 50 percent

while those from Hong Kong jumped by 23 percent.

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Global factors influencing textile industry

The history of the textile and clothing industry has been replete with the use of

various bilateral quotas, protectionist policies, discriminatory tariffs, etc. by the developed

world against the developing countries. The result was a highly distorted structure, which

imposed hidden costs on the export sectors of the Third World. Despite the fact that GATT

was established way back in 1947, the textile industry, till 1994, remained largely out of its

liberalization agreements. In fact, trade in this sector, until the Uruguay Round, evolved in

the opposite direction. Consequently, since 1974 global trade in the textiles and clothing

sector had been governed by the Multi-fibre agreement, which was the sequel to an

increasingly pervasive quota regime that began with the Short-term arrangement on cotton

products in 1962 and followed by the Long-Term arrangement. After the successful

conclusion of the Uruguay Round in 1994, the MFA was replaced by the Agreement on

Textiles and Clothing (ATC), which had the same MFA framework in the context of an

agreed, ten year phasing out of all quotas by the year 2005. The section that follows takes a

brief look at the history of these protectionist regimes as also a more detailed look at the

MFA and the ATC.

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Multi–Fibre Agreement (MFA)

On January 1st, 1974, the Arrangement Regarding the International Trade in Textiles,

otherwise known as the MFA came into force. It superseded all existing arrangements that

had been governing trade in cotton textiles since 1961. The MFA sought to achieve the

expansion of trade, the reduction of barriers to trade and the progressive liberalisation of

world trade in textile products, while at the same time ensuring the orderly and equitable

development of this trade and avoidance of disruptive effects in individual markets and on

individual lines of production in both importing and exporting countries. Though it was

supposed to be a short-term arrangement to enable the adjustment of the industry to a free

trade regime, the MFA was extended in 1974, 1982, 1986, 1991, and 1992. Because of the

quotas allotted, the MFA resulted in a regular shift of production from quota restricted

countries to less restricted ones as soon as the quotas began to cause problems for the traders

in importing countries. The first three extensions of the MFA, instead of liberalising the trade

in textiles and clothing, further intensified restrictions on imports, specifically affecting the

developing country exporters of the textile and clothing products. Increased usage of several

MFA measures tended to further erode the trust which developing countries had originally

placed in the MFA.

The MFA set the terms and conditions for governing quantitative restrictions on textile and

clothing exports of developing countries either through negotiations or bilateral agreements

or on a unilateral basis. The bilateral agreements negotiated between importing and

exporting country’s contained provisions relating to the products traded but they differed in

the details. The restraints under the MFA were often negotiated, or unilaterally imposed at

relatively short intervals, practically annually. The quotas could be either by function or fibre

Under the MFA, product coverage was extended to include textiles and clothing made of

wool and man-made fibres (MMF), as well as cotton and blends thereof. With regard to

applications of safeguard measures, import restrictions could be imposed unilaterally in a

situation of actual market disruption in the absence of a mutually agreed situation. However,

in situations involving a real risk of market disruption only bilateral restraint agreements

were possible. The Textile Surveillance Body (TSB) was set up to monitor disputes regarding

actions taken in response to market disruptions.

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The MFA permitted certain flexibility in quota restrictions for the exporters so that they could

adjust to changing market conditions, export demands and their own capabilities. The MFA

also provided for higher quotas and liberal growth for developing countries whose exports

were already restrained. The MFA asked the participants to refrain from restraining the trade

of small suppliers under normal circumstances. In general, developed countries, under MFA,

chose not to impose restrictions on imports from other developed countries

The TSB ensured compliance by all parties to the obligations of bilateral agreements or

unilateral agreements. It called for notification of all restrictive measures. A Textiles

Committee – established as a management body consisting of all member countries – was the

final arbiter under the MFA and worked as a court of appeal for disputes that could not be

resolved under TSB.

Unsatisfactory experience with several extension protocols of the MFA, retention clauses,

such as “good will”, “exceptional cases”, and “anti-surge” and other trade related factors led

the developing countries to press for the inclusion of the textile issue in the agenda of the

GATT Ministerial meeting.

The eventual outcome of prolonged negotiations was the Agreement on Textiles and

Clothing.

Agreement on Textiles and Clothing (ATC)

The ATC calls for a progressive phasing out of all the MFA restrictions and other

discriminatory measures in a period of 10 years. In contrast to the MFA, the ATC is

applicable to all members of the WTO.

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Four Steps over 10 Years

Steps Percentage of products to

be brought under GATT

(including removal of

quotas)

How fast remaining

quota should open

up, if 1994 rate was

6%

Step 1

1st Jan 1995 – 31st Dec 1997

16 percent (minimum

taking 1990 imports as base)

6.96 percent

annually

Step 2

1st Jan 1998 – 31st Dec 2002

17 percent 8.70 percent

annually

Step 3

1st Jan 2002 – 31st Dec 2004

18 percent 11.05 percent

annually

Step 4

1st Jan 2005

Full integration into GATT and

final elimination of quotas ,

ATC terminates

49 percent (maximum) No quotas left

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Top 10 Exporters (Textile)

Country 1990 1997

Billion US$ % share Billion US$ % share

Hong Kong 7.99 7.68 14.6 9.42

China 7.10 6.82 13.83 8.92

South Korea 6.04 5.81 13.35 8.61

Germany 14.00 13.46 13.05 8.42

Italy 9.80 9.43 12.9 8.32

Taiwan 6.13 5.90 12.73 8.21

USA 5.03 4.83 9.19 5.93

France 7.21 4.65 5.86 5.64

Belgium-

Luxembourg

6.54 6.29 7.01 4.52

Japan 5.88 5.65 6.75 4.35

Total (Top 10) 74.36 71.5 110.62 71.37

World 104.00 100.00 155.00 100.00

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Top 10 Exporters (Apparel)

Country 1990 1997

Billion US$ % share Billion US$ % share

China 9.41 9.14 31.8 21.06

Hong Kong 15.37 14.92 23.11 15.30

Italy 12.07 11.72 14.85 9.83

USA 2.57 2.49 8.68 5.75

Germany 7.82 7.59 7.29 4.83

Turkey 3.44 3.34 6.7 4.44

France 4.65 4.51 5.34 3.54

UK 3.08 2.99 5.28 3.50

South Korea 8.11 7.87 4.19 2.77

Thailand 2.86 2.78 3.77 2.50

Total (top 10) 69.38 67.36 111.01 73.52

World 103.00 100.00 151.00 100.00

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EU Top Ten Suppliers of MFA Clothing: Rank Price

(AGR 1994-96)

1995Ranks and

Average Price

1996Ranks and

Average Price

Rank Price

CAGR 1994-96

Country Rank in

Value

Rank in

Volume

Avg.

Price,

Ecu/Kg

Rank in

Value

Rank in

Volume

Avg. Price,

Ecu/Kg

China 2 1 9 1 1 8 3

Turkey 1 2 2 2 2 6 7

Hong Kong 3 3 6 3 3 5 9

Tunisia 4 7 3 4 6 3 4

Morocco 5 6 5 5 7 4 2

Poland 6 8 2 6 8 1 8

India 7 5 7 7 5 9 10

Bangladesh 8 4 10 8 4 10 5

Romania 9 10 4 9 10 2 1

Indonesia 10 9 8 10 9 7 6

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Post-MFA / ATC Scenario

It is generally believed that quota phase-out can only be beneficial for the industry. In 1993,

a study of seven countries found that the price of cotton yarn per kilo, was cheapest in India

at US$ 2.79, compared to US$ 3.30 in Brazil, US$ 4.19 in Japan, and US$ 3.10 in Thailand.

This was because overall labour and raw material costs are cheaper in India.

However, it should be realised that the opposite can also happen. Removal of quotas may

open new frontiers but will also close captive markets. The EU and the US will no longer be

restrained in buying as much as they want from the cheapest possible sources. Some argue

that the ending of quotas will result in cut-throat competition between developing countries.

Coupled with this is erosion in the growth of markets in industrial countries. Apparent

consumption of textile products, in real terms, remained stagnant during the decade 1985-95.

Purchases become discretionary and fashion-driven. As a result, fashion cycles got shorter

and order-cycles compressed. Retailers order requirements on short-order cycle term and

demand rapid responses to in-season ordering. Hence, they are compelled to secure their

supplies of top-up orders from those in close vicinity.

There is, therefore, a propensity towards sourcing from low-cost countries in the

neighbourhood as also a growth of offshore processing by manufacturers in developed

countries. Regional integration reinforces this.

Further exporters in India fear that freer imports could lead to dumping of low-cost fabrics

from China and other Southeast Asian countries. Thus, the industry needs restructuring on all

fronts. Although the policy framework can be blamed partially for its ills, internal factors are

equally important.

Recent studies indicate that India is beginning to lose out to its rivals. In one survey of US

textile and apparel imports, China and Hong Kong had higher market shares than India. In

certain categories, other Asian low cost producers like Pakistan and Indonesia had higher

market shares and had emerged as close competitors to India. Because many of these

countries depend on imports, however, India can take advantage of home production.

Further, formation of NAFTA means direct competition from the Latin American countries.

The United States has farmed-out offshore processing work to enterprises in Mexico and the

Caribbean Base Initiative countries. Similar relocation has taken place in Europe with

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manufacturers shifting base to Eastern Europe, which provides similar advantages of cheap

labour and proximity.

According to projections by TECS, EU imports of ready-made fabrics will double between

1994 and 2004, as a result of the elimination of quotas. US imports are expected to treble

over the same period.

According to another prediction, apparel output could more than double (i.e. expand by

241%) between 1995 and 2005, compared to an increase of only 114%, without the

agreement on textiles and clothing.

By increasing market access, the ATC will generate multiplier effects in the Indian

economy, eventually feeding back into the textile industry itself. The rise in demand for

exports could increase output and employment in the textile industry. This in turn will

stimulate the agricultural sector to meet the rising demand for cotton. As profits rise, so will

wages, which will act as further stimulus. The export boom in the textile and clothing

industry will also generate considerable foreign exchange.

Given India’s high quota growth rates during the phase-out period, its competitive product

niches and established links with retailers and importers in developed countries, it should

experience vigorous growth in the future. The World Bank predicts a growth rate of 16% per

annum in the coming decade.

Ultimately, the extent that India will benefit from trade liberalisation depends on its current

cost competitiveness, its ability to increase productivity and upgrade quality.

Implications on Indian Exports (Optimistic Scenario)

Yarn

+ Garment exports of Bangladesh increase leading to increase in consumption

of Indian fabric and yarn

+ Exports of Far-East & ASEAN increase further

+ Rationalization in duties of MMF leading to increase in processing of fibres in

India

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Fabric/Made-ups

+ Garmenting dereserved leading to entry of large textile players ensuring

efficient sourcing and increase in the margins

+ Increase in investment for processing

+ Improvement in SAPTA trade

Garments

+ Garmenting and Knitting de-reserved to allow the units to grow bigger to be

able to service large orders and large clients

+ Labor laws in India become industry friendly

+ Garment parks come up in key regions giving a boost to exports

+ Successful Quota Phase-out without exports getting restricted by QRs

Fig in US $ Mn

1994 1998 2002 2005* 2010*

Yarn 590 1780 2333 2701 3131

Made-ups 851 1498 2620 4527 11266

Fabric 1214 1716 2512 3530 7100

Garments 3713 4829 6510 10794 21711

Total 6368 9823 14035 21552 43208

* Projections

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Implications on Indian Exports (Pessimistic Scenario)

Yarn

- Change works to the advantage for S. Korea/ASEAN/Far-East

- Demand for packages increases

- EEC other garment supply countries invest in back-end processes

Fabric/Made-ups

- Environmental Clause impacts

- Investment in processing does not happen

- Blends and synthetic fabrics dominate reducing advantage of Indian cotton

Garments

- Social clause impact leading to ban on some categories, etc.

- SSA is a reality impacting exports of garments from India to USA and EU

- FTA becomes a reality

- Other projectionist measures come up

As opposed to the optimistic scenario, the pessimistic scenario shows a shortfall of nearly US

$4000 mn of exports in year 2005 and the exports are not likely to be much higher than the

present figures. It would also lead to development of textile and clothing industry in the other

nations and India would lose out as a significant player in the industry. This would also stifle

the domestic textile industry which would be in a very weak position to compete with

imports. (These are expected to become cheaper with import duty rationalization as per

international treaties and cost competitiveness of overseas players). Some of the subsidies

currently extended by the Indian government to promote exports which are sector specific

(TUF, 80 HHC) or region specific (EPZS, EOUS) may also need to be withdrawn.

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Fig in US $ Mn

1994 1998 2002 2005* 2010*

Yarn 590 1780 2003 2126 2022

Made-ups 851 1498 2038 2427 3098

Fabric 1214 1716 1931 2050 2154

Garments 3713 4829 5435 5939 6885

Total 6368 9823 11408 12542 14159

* Projections

Conclusions

To effectively tackle the situation India needs to invest in research and development to

develop new products, reduce transaction costs, reduce per unit costs, and finally, improve its

raw material base. India needs to move from the lower-end markets to middle level value-for-

money markets and export high value-added products of international standard. Thus the

industry should diversify in design to ensure quality output and technological advancement.

The weakest links in the entire chain are the power looms and the processing houses. The

latter especially are very important because they are responsible for the highest value addition

in the manufacturing line. A power loom co-operative structure could be evolved for pooling

of common services and functions such as quality testing, marketing, short-term financing,

etc. Further, because of the geographical proximity enjoyed, a cluster approach can be

adopted.

The government also needs to make policy changes like dereserving the small-scale sector so

that it can achieve economies of scale and adopt a synergistic approach.

Handlooms by their very nature can adopt a strategy of "niche” marketing. In this respect,

export promotion, common credit and marketing facilities and more significantly publicity

are important areas for co-operation. Here too, a co-operative structure would be useful

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though government agencies should be involved because of their outreach. Newer and more

innovative forms of involvement are required where decentralisation should be a key

element.

India has made little attempt to forge partnerships – in equity, technology and distribution in

overseas markets. The newer nuances of global apparel trade demand joint control of brand

positioning, distributing and quality assurance systems.

The Indian textile industry has recognised the need for a cradle-to-grave approach when

tackling environmental issues i.e. eco prescription should be applied right from the stage of

cultivation to spinning to weaving to chemical processing to packaging. Here especially

there is great scope for private -public partnerships.

A great deal of work has been done by Indian trade and industry to comply with ecological

and environmental regulations, and so Indian garments can adopt an appropriate label

signifying a distinct quality.

Efficiency and output of handloom and powerloom sectors also needs to be increased. The

clothing sector needs the support of high quality and cost-effective cloth processing facilities.

Modernisation of mills is a must. Human resource is another area of focus. The workforce

must be trained and oriented towards high productivity.

The business environment of the future will be intensely competitive. Countries will want their

own interests to be safeguarded. As tariffs tumble, non-tariff barriers will be adopted. New

consumer demands and expectations coupled with new techniques in the market will add a new

dimension. E-commerce will unleash new possibilities. This will demand a new mindset to

eliminate wastes, delays, and avoidable transaction costs. Effective entrepreneur-friendly

institutional support will need to be extended by the Government, business and umbrella

organisations.

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Opportunities for Indian cotton textile firms

Yarn

India is the leading supplier of cotton yarns to Mauritius, catering to almost 62% of the US$

123 mn worth total cotton yarn imports of Mauritius in 2003. The Mauritian import market

for cotton yarn has witnessed a downward trend in the last few years. Its cotton yarn imports

declined by 6.2% from 1998 to 2003. While Mauritius’ imports of cotton yarns from India

have slided during this period, imports from neighbouring countries South Africa and Zambia

have risen.

Fabrics

Mauritius imports of woven fabrics have declined considerably since 1998 and were worth

almost US$ 70 mn in 2003. India ranked fourth in this market in 2003, with a market share of

6%. While Chinese dominate the Mauritian import market for woven fabrics, South Africa

and Hong Kong are the other major players giving close competition to India in this market.

Indian exporters can focus on improving their competitiveness in exports of dyed fabrics and

knitted fabrics, which are the main items of cotton fabric imports of Mauritius.

Made-ups

Contrary to imports of yarns and fabrics, Mauritius imports of made-ups have risen during

the period 1998-2003. However, made-ups imports are very small in terms of value - worth

US$ 2 mn in 2003. During the period 1998-2003, China emerged as the most dominant

supplier of made-ups to Mauritius. China has been able to displace the erstwhile top suppliers

viz. France and India and accounted for 60% market share in 2003. India ranked fourth in

2003 with a market share of 6%.

If the efforts of the Mauritian Government to revive the domestic textiles industry are

successful, Indian exporters might have an opportunity in this market in the medium term. In

order to increase India’s market share, the following strategy could be adopted:

Improve performance and presence in terms of quality, cost, delivery and after sales service.

Plan strategic tie-ups with Mauritian RMG companies to supply yarn and fabrics.

Strengthen logistics and supply chain management to provide competitive supply

terms to Mauritian buyers.

Promote Indian textiles by developing strong relationships with importers, buying

agents and quality inspectors.

Look at reducing lead times to ensure on-time delivery.

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FOREIGN DIRECT INVESTMENT IN INDIAN RETAIL SECTORFOREIGN DIRECT INVESTMENT IN INDIAN RETAIL SECTOR

INTRODUCTION:

The Indian economy was opened to the world in 1990s with the implementation of economic

reforms necessitated by an economic ruin caused by a rigid economic policy.

After that foreign capital has started flowing into the country in the form of foreign direct

investments and foreign institutional investments. In spite of the fears expressed from various

counters India has managed to do well and has been seeing a very respectable growth rates in

its GDP over the last decade.

Though Foreign Direct Investments were allowed by the Indian government in many sectors

the Indian government still keeps the entry of foreign capital restricted in certain sensitive

sectors like agriculture, railways, atomic energy, retail etc. Of these sectors retail sector is

considered to be the most promising and profitable by the foreign investors.

THE PROBLEM AND THE OBJECTIVE

It is widely thought that it is high time that the Indian government remove the restrictions

placed on the FDI in Retail sector to reap the rich benefits it is going to bring as in the case of

other developing countries like China. On the other hand there are widespread fears and

opposition expressed by the local players in the Indian retail sector. In this paper a detailed

analysis is made on the various factors related with the introduction of foreign direct

investment in Indian retail sector and its probable impact on Indian economy over short and

long run. An attempt is also made to suggest the suitable mechanism for introduction of

foreign capital in retail sector in the form of FDIs.

THE CURRENT SCENARIO OF THE INDIAN RETAIL SECTOR

Before discussing the matter of allowing the FDI in the Indian retail sector let us take a look

at the following points that give a detailed account of the current Indian retail sector – its

strengths significance and contribution to the Indian economy.

The volume of retail turnover is estimated at 4 lakh crore rupees a year, constituting

10% of our GDP. After agriculture, the retail sector is estimated to be the largest

single sector, both in terms of turnover as well as employment.

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The share of organized retailing in India, at around 2%, is abysmally low,( In fact,

only 4% of Indian retail outlets occupy an area of more than 500 sq ft.) compared to

80% in the USA, 40% in Thailand, Brazil or 20% in China, thus leaving the huge

market potential largely untapped.

The recent spurt in the growth of retail sector my be attributed to Mounting earning

levels, education and an international exposure.

Retailing all the way through non-traditional channels such as Fuel Stations, Direct

Selling and Home Shopping Television is on the rise.

Contemporary organized retail is petite and fragmented with cast list not being able to

harvest economies of scale.

However, retailing through formats such as supermarkets, hypermarkets, department

stores and other forte chains are escalating. Top business houses in the country are

investing in the sector. This includes Foodworld, Shopper’s Stop, Crossroads, Globas,

Pyramid and other such outlets.

FDI in retail trading is not encouraged in any form. However, a few overseas retail

names appearing in the marketplace in the nature of franchisee. In February the

government has announced the entry of FDI in single brand outlets with a cap of 49%

India has a hefty middle class of 350 million and sophisticated personnel to lever

diverse significant functions like merchandising, sales promotion, inventory

management, purchasing and marketing.

India also possesses IT skills in the area of supply chain management, database

management and inventory management

EXPERIENCE OF OTHER DEVELOPING NATIONS EXPERIENCE OF OTHER DEVELOPING NATIONS

A look at how the other developing nations of the world have dealt with the issue of FDI in

retail trade will give a fair idea of the problem and the various possibilities.

The sector is booming in Eastern Europe and a growing number of other emerging markets.

Growth is particularly strong in the new EU members and Asia, including China, Malaysia

and Viet Nam. It also extends to countries like Chile, Brazil, Turkey, Morocco, Saudi Arabia

and South Africa.

In many of these emerging markets, growth is fuelled by an expanding urban class with rising

household incomes. While consumption patterns, income, market size and structure vary

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across countries, generally speaking, those with modern and globalized retail sectors are

seeing more competition and concentration across the board. The benefits abound in these

countries, as UNCTAD research shows. Other benefits include substantial productivity

enhancements in retailing, particularly in supply chain management and in-country logistics.

Brazilian producers, for example, are now part of the global supply chains of Carrefour and

Wal-Mart, lower prices for food and clothing have apparently helped curb inflation. In China,

the introduction of global retailers has not only stimulated demand for local goods to stock

hypermarket shelves but has also provided new conduits for exports, by integrating Chinese

producers into multinational supply chains. Wal-Mart alone plans to hire 150,000 employees

in China over the next five years. , China's agriculture exports to the US nearly trebled from

$3.86bn in 1999 to $9.96bn last year. India, on the other hand has made only a marginal

progress, with its farm exports to America rising from $3.19bn in 1999 to just $4.28bn.

In Viet Nam, the market presence of global retailers has helped raise the quality of goods

provided by local suppliers to international standards. In Saudi Arabia and other Gulf

countries, modern retailing has been associated with the building and operation of large

shopping malls, with knock-on benefits for the local construction and security sectors. Pick´n

Pay, South Africa´s largest supermarket chain, reportedly provides training to small retailers

setting up their own Pick´n Pay Family Stores. It apparently helps local producers comply

with quality standards and invests 7% of its net profits in corporate social responsibility In

many of the developing nations Labour has been retrenched, but re-tooled and made more

productive. That is what happened with development in Thailand, South Korea and now in

China.

The following table gives a comparative view of the three of the worlds important retail

markets India , China and U.S.

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WHY FDI IN RETAIL TRADE IS NEEDED FOR INDIA

In the following section we will analyze the various factors that make the case for FDI in

Indian retail sector attractive. We will also bring forth how most of the fears expressed by the

Indian politicians and local players in the Indian retail market can be safely negotiated.

FDI in retail trade would contribute to a multiplier impact on the economy not only in the

retail sector but also in many other activities such as manufacturing, food processing,

packaging and logistic services. They further point out that far from leading to an influx of

imported goods, foreign companies would source most of their items domestically and would

in fact, use quality Indian products to stock thousands of their outlets in foreign countries,

thus giving a fillip to our manufacturing as well as export.

One of the biggest fear expressed by the opponents of FDI in retail trade is the loss of

employment of millions of small Indian traders. Organised retailing would generate

employment, both direct and indirect, as notwithstanding the capital intensity of modern retail

business, it continues to be labour intensive as well. The above point is substantiated by the

figures given in the figure where by comparing the employment data of India with China and

U.S. (Both the countries have a larger percentage of their labour force employed in the retail

sector.) It would also lead to creation of indirect employment in support activities throughout

the supply chain, starting from producers to packaging, storage, transport and other logistic

services. Further modern retailers are a major source of relatively secure employment,

particularly for women and low-skilled workers. Unlike the informal retail sector, many of

these jobs involve regular working hours and a number of social benefits.

Another argument against FDI is that the larger Multinational retailers will wipe out the small

Indian retailers. However there is no empirical evidence for such a fear. India is not an

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integrated homogeneous market; it is a hierarchy of markets catering to people of many

different income levels and tastes. Entry of sophisticated branded products affects the

unbranded mass market only marginally in a vast poor country such as India. Moreover, in

malls where the large retail chains set up their stores, typically, there will also be many small

shops which will attract people.

Further, the street-corner shops will have some advantages over big stores located many

miles away in shopping plazas. In India, transportation and parking are big problems for

people who want to visit shopping malls.

For them, it is more convenient and cost-effective to purchase many of their daily

requirements from the neighbourhood stores, especially as these establishments stock goods

that are in particular demand in the locality. Hence, the pop-and-mom street corner shops can

very well survive. A comparison between the food and beverage sector and the retail sector

will show this clearly. The existence of hotels, restaurants and food malls has in no measure

taken away the clientele of roadside dhabas and thelawallahs. Both continue to co-exist and

flourish.

Another argument that is pitted against the FDI is that the Multinational retailers will with

their monopsonic powers will sqeeze out the local suppliers and farmers. But International

experience has demonstrated that the only way that farmers can get better prices for their

products is through improvement of the value added food chain The agricultural sector in

India is characterized by poverty. If there is one segment of our society that toils to provide

basic needs, and yet languishes on a pittance it is the agricultural segment. In spite of the fact

that farmers are responsible for putting food on our plates the typical Indian farmer is a poor

man. It is only when food processing and packaging takes off in a big way that we can hope

to give the agriculturist his due. The one concerning backward linkages with the agriculture

sector, efficiency in supply chain that foreign retailers can bring and the huge opportunity in

farm exports. India can attain huge savings by merely improving the supply chain. Some 20-

40% of all fruits and vegetables grown in the country goes waste due to poor transportation,

storage and handling infrastructure. Also, for every rupee that an Indian consumer spends, the

farmer gets only 20-22 paise, as against 70-80 paise in developed markets. If large retailers,

whether domestic or foreign, directly source through farmers, realisations will go up for the

farmers, consumers will have to pay less and the retailers will get higher margins. This can be

seen from the following example of the China.The global retailers taken together buy about

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$60 billion of goods each year from China for exports. Contrast this with India where less

than $1 billion of exports are accounted for by global retailers (mostly metro dairy farm).

HOW SHOULD WE GO ABOUT IT

In the above discussions we have explored various aspects of introducing the foreign direct

investment in the Indian retail sector. However the government should not introduce the

foreign capital in the retail sector all at a sudden. There are many considerations that have to

be taken into account while letting the foreign capital into the Indian retail market.

India can follow the Chinese model, which took 12 years to open and provided infant-

industry-protection to domestic retailers. China first allowed FDI in retail in 1992. The initial

FDI cap was 26 per cent. It took China 10 years to raise the limit to 49 per cent. The 100 per

cent foreign-owned retail stores were allowed only from 2004. Further the foreign chains

were initially permitted to set up stores only in some select cities and local retailers were

encouraged to become big by mergers so that they could compete with the international

groups. India can also devise a roadmap, whereby FDI entry happens in a phased manner,

whereby the process get completed in 8-10 years.

The Indian government could selectively allow FDI in food, dairy and grocery segments of

retail trade. In other areas such as readymade garments and various industrial consumer

goods, the government should make sure that only big domestic retailers are allowed to

compete with small local retailers. Even when FDI is to be allowed in retail food and grocery

sectors, the government would like to put a cap on foreign ownership.

Another strategy would be as follows. Foreigners — if they want to enter — will have to take

local partners to start with. Once the local partners and other local players learn by doing, the

FDI cap can be raised gradually. Foreigners can be allowed to set up 100 per cent foreign-

owned retail chains only after the local players are able to muster enough capital, experience

and expertise to compete with established global giants.

In addition to the above the Indian government and the industry should take adequate steps to

weed out the following deficiencies of the retail sector and make it really attractive.

o Regulations restricting real estate purchases, and cumbersome local laws.

o Absence of developed supply chain and integrated IT management.

o Lack of trained work force.

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o Low skill level for retailing management.

o Intrinsic complexity of retailing – rapid price changes, constant threat of product

o Obsolescence and low margins.

In this connection it is noteworthy to consider the draft ICRIER report that advocated for

49% FDI in retail and opening up of the sector in a phased manner over a period of five

years. Fears about large-scale loss of jobs in the unorganized retail sector due to inflow of

FDI was unfounded, said the study.

Textiles have historically formed an important part of India's economy. Weaving had always

been regarded as one of the major occupations, and India’s cotton and silk production were

among the highest in the world. Colonization brought an end to India’s glorious past, in

textiles as well as other areas. Since this report is for internal consumption, and IEPH has

familiarized us all with this part of India’s textile history, I’ll skim over it. The net result was

that India, once one of world’s leading exporters of textiles, was now forced to become a net

importer. However, by the 1850's Indian enterprise and capital using modern imported

technology had set up its own mills, which by 1875 were exporting modern textiles to

Lancashire. Thus the textile industry was the first in India to actually deserve the label

‘industry’. This overturning of tables also led to the side effect of the English manufacturers

to demand that the newly introduced Factory Acts, to protect industrial labour in Britain,

should also be adopted by India. This agitation succeeded, and with the 1881 factory act India

introduced the labour laws which today are among the biggest stumbling blocks in front of

the Indian industry.

Post independence, in the hey day of Indian planning, the government of India provided

favorable and protective taxes and other regulations to the small-scale sector, as it assumed

that this sector created more employment. Limits on total capacity of mills, lists reserving

certain products for the small scale sector, discriminatory price controls and taxation regimes

etc all contributed to restriction of Large-scale production. However, in following this aim,

the Govt. did not realize the negative impacts in terms of decreased productivity and reduced

competitiveness vis-à-vis the global market. The liberalisation being carried in the 1990’s

also ushered in a new era for India’s textile industry. It led to the relaxation of many of the

constraints previously imposed on the textile sector. Licensing was removed in the early 90`s

by the Statement of Industrial Policy and the Textile Development and Regulation Order. In

1995, India signed the General Agreement of Tariffs and Trade bringing some of its policies

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at par with those at an international level. However, a number of limiting regulations(the

differential taxation for larger mills for eg.) stayed in place till very recently, and some, like

the labour laws, are still in place.

At present, the single biggest factor influencing the textile industry appears to be the end of

the textile quota regime of quantitative import restrictions under the multi-fibre arrangement

(MFA) on 1st January, 2005 under the World Trade Organisation (WTO) Agreement on

Textiles and Clothing. The removal of quotas, seen as an opportunity by many, including the

government, is driving investment and liberalisation in the textile space. In the next section, I

will discuss the problems that face the Indian textile industry in making full use of this

opportunity.

The industry, hamstrung by years of regulation, is sorely lacking in technological

advancement, and scale of operations, both areas which are critical in bagging a large share

of the world trade in textiles. Overall, there is a low level of modernisation in India in most

elements of the clothing and textiles value chain, especially in weaving and in garmenting.

Among powerlooms, which produce nearly 60% of the fabric output, less than 1% were

shuttleless looms as few as four years back. Even among the organized mill sector, less than

6% have shuttleless looms. These levels are much below those of several developed and

developing countries, which have seen a high replacement rate of old looms with modern

shuttleless looms; more than 80% of looms in Taiwan, Korea and the U.S. are shuttleless.

Even in Pakistan, 62% of looms are shuttleless. This has obvious implications for quality and

efficiency. Also with the years of government policy favouring the small scale sector, the

textile industry in India is of a very fragmented nature. With taxation regimes favouring

smaller units,, Indian garment factories are nowhere close to having the kind of capacities

that exist elsewhere. The larger Indian factories have only 10-20% of the number of machines

found in otherwise comparable Chinese factories. In the quota days this was construed to be

an advantage by some, as Indian industry could cater to niche demands. Post 2005 however,

it has emerged(as expected) as one of the reasons holding India’s textile industry back. There

are other problems in addition to those already pointed out. Infrastructure, a bottleneck which

plagues most Indian industry today is a stumbling block for the textile industry as well.

Chinese companies have the advantage of lower power costs and better power availability

over Indian companies, and they also enjoy shorter lead time to the US, which is an

advantage other countries like Mexico and Turkey which have more efficient port systems or

more favourable locations also possess. The labour laws which prevent retrenchment of

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workers from sick units are another hurdle in the path of competitiveness. Even with all

these problems, Indian textile exports have grown post the 2005 removal of quotas, but this

growth has been a modest 10-11%. During the same period, textile exports from China have

grown at rates in excess of 20%, and from a larger base at that.

The export markets however, still present a considerable opportunity which the Indian

industry should be able to tap. The Chinese threat, while very real, has been offset to some

extent by recent developments. The extremely high growth of Chinese textile exports to the

U.S has resulted in quotas being reinstated for Chinese goods in certain segments. The

European union too has reached an agreement with china which has seen china agreeing to

curtail exports. A school of thought also exists which maintains that companies in the U.S

would prefer to spread out their suppliers, as placing all their eggs in the Chinese basket may

be somewhat risky. The Indian government has also not been entirely blind, introducing

measures such as the national technology upgradation fund and removing the differential

taxation scheme which discriminated against large units. They have also allowed textile units

to build and operate captive power plants, which should ease the power problem. Some

companies are also making use of the SEZ’s to get around labour laws. The domestic market

too, is projected to grow in the coming years. On the whole, indications for the textile

industry are largely positive. But as is the case with every industry, only the well run

companies will be able to make use of this scenario to the fullest.

Welspun India is Asia's largest terry towel manufacturer and fourth largest in the

world. It supplies to leading global retailers, meeting 15 per cent of Wal-Mart's terry

towel requirements, 85 per cent of Tom Hilfiger's and 100 per cent of Shopko's. It has

plans to double its terry towelling capacity to 23830 TPA, enhance yarn capacity by

25000 spindles and introduce bed linen with a 35 million metres capacity and has

earmarked a Rs 6 billion budget for its expansion plans. Its sales in the year 2005-06

were in the range of 630 crores, growing by around 35% compared to the last year.

Alok Industries has the largest processing capacity in India and offers fully integrated

facilities for yarn texturising, weaving, knitting, processing, made-ups and garments.

It has initiated plans to expand capacities across all segments by investing Rs 10

billion. It is focusing on home textiles and garments, which will contribute to nearly

50 per cent of its revenues by 2007. It has already got an impressive client list that

includes brandnames such as JC Penney, Tommy Hilfiger, TARGET, Wal-Mart and

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international buying houses such as Britannica Home Fashions, Elite Home Products,

etc. Their sales were in 05-06 were 1285 crores, up by 15% from last year.

Arvind Mills boasts of a wide product range in value added fabric, from fabric to

garments in denim, shirting and knits. It is a supplier to brands such as GAP, Marks &

Spencer, Levis, Tommy Hilfiger and Nike and is upgrading its garment capacities to

14.3 million pieces per annum. Arvind Mills dominates the Indian denim market with

a 72 per cent share of the estimated 80 million metres denim market. They posted

sales of 1600 crores in 05-06, and while this figure was a decline compared to the

previous year, they have shown an improvement in their operating performance,

leading to a higher PBT.

Gokaldas exportshas more than 40 factories spreading in 37 locations in India,

manufacturing more than 2.4 million garments per month. The principle source of

revenue for the Company is from export of garments and related products. Almost

95% of their revenues come from exports. Their sales too, saw a growth of 20% to

end the 05-06 financial year at 860 crores

Other major players like Raymond, Siyaram silk mills, mahavir spinning mills etc. have

also shown strong performance in the past two years.

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Colorful fashion trends of IndiaColorful fashion trends of India

With the end of the 20th century came the end of all hype which has created a more practical

and pragmatic environment and has given a more stable picture of the fashion business.

In the 50s, 60s and 70s, the Indian fashion scenario wasn't exactly colorless. It was exciting,

stylish and very graceful. There were no designers, models, star or fashion design labels that

the country could show off. The value of a garment was judged by its style and fabric and not

by who made it.

It was regarded as ever so chic and fashionable to approach any unfamiliar tailor, who could

make a garment for a few rupees, providing the perfect fit, finish and style. The high society

lady, who wore it, was proud for getting a good bargain and for giving her name to the end

result.

In 60s, tight 'kurtas', 'churidars' and high coiffures were a trend among ladies. It was an era

full of naughtiness and celebration in arts and music and cinema, manifested by liberation

from restriction and acceptance of new types of materials such as plastic film and coated

polyester fabric.

The 70s witnessed an increase in the export of traditional materials outside the country as

well as within. Hence, international fashion arrived in India much before the MTV culture

with the bold colors, flower prints and bell-bottoms. Synthetics turned trendy and the disco

culture affected the fashion scenario.

It was in the early 80s when the first fashion store 'Ravissant' opened in Mumbai. At that time

garments were retailed for a four-figure price tag. The '80s was the era of self consciousness

and American designers like Calvin Klein became popular. In India too, silhouettes became

more masculine and the 'salwar kameez' was designed with shoulder pads.

With the evolution of designer stores in Mumbai, the elegant fashion design culture was a

trend among Indians along with their heavy price tags. No doubt that a garment with a heavy

price tag was at the bottom stage of fashion. But clients immediately transformed into the

high fashion fold where they were convinced that that the word 'elegant fashion design

culture' means, it had to have a higher price tag.

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Garments were sold at unbelievable prices only because the designers had decided to get

themselves noticed by making showy outfits and getting associated with the right shows,

celebrities and events.

Later, fashion shows shifted to competitive events each attempting to out-do the other in

theme, guest list and media coverage. For any newcomer, the fashion business was the

number one professional art that time.

In the 90's, the last decade of the millennium, a move towards the drastic pairing down

returned with ethnic wears (Today, ethnic wear market in India is accounted to Rs. 9000

crore). This led to the decline and the recession, the push to sell at any cost and keep staying

in the limelight. With heavy cut throat competition and sound awareness of the client, the

inevitable occurred. The price tags, which had once reached at a peak, began their downside

journey.

At those times the downturn was not only being experienced in the price tags of the garments,

but also in the business of fashion shows. More models, choreographers, make-up men,

hairstylists and designers streamed down into their business.

The fun and party time in the Indian fashion scenario had not ended with this, but continued.

It was a point, where it reached at a certain steady level and from there, in the beginning of

the 21st centaury, with new designers and models and some sensible designing; the fashion

hype accelerated its speed.

Indian fashion industry spreads its wings globally

For the global fashion industry, India is a very big exporter of fabrics and accessories. All

over the world, Indian ethnic designs and materials are considered as a significant facet for

the fashion houses and garment manufacturers. In fabrics, while sourcing for fashion wear,

India also plays a vital role as one of the biggest players in the international fashion arena.

India's strengths not only depend on its tradition, but also on its raw materials. World over,

India is the third largest producer of cotton, the second largest producer of silk and the fifth

largest producer of man-made fibres.

In the international market, the Indian garment and fabric industries have many fundamental

aspects that are compliant, in terms of cost effectiveness to produce, raw material, quick

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adjustment for selling, and a wide ranges of preference in the designs in the garments like

with sequin, beadwork, aari or chikkon embroidery etc, as well as cheaper skilled work force.

India provides these fashion garments to the international fashion houses at competitive

prices with shorter lead time and an effective monopoly in designs which covers elaborated

hand embroidery - accepted world over.

India has always been considered as a default source in the embroidered garment segment,

but the changes of rupee against dollar has further decreased the prices, thereby attracting

buyers. So the international fashion houses walk away with customized stuff, and in the end

crafted works are sold at very cheap rates.

As far as the market of fabrics is concerned, the ranges available in India can attract as well

as confuse the buyer. A basic judgmental expectation in the choosing of fabrics is the present

trend in the international market. Much of the production tasks take place in parts of the small

town of Chapa in the Eastern state of Bihar, a name one would have never even heard of.

Here fabric making is a family industry, the ranges and quality of raw silks churned out here

belie the crude production methods and equipment used- tussars, matka silks, phaswas, you

name it and they can design it. Surat in Gujarat, is the supplier of an amazing set of

jacquards, moss crepes and georgette sheers - all fabrics utilized to make dazzling silhouettes

demanded world over. Another Indian fabric design that has been specially designed for the

fashion history is the "Madras check" originally utilized for the universal "Lungi" a simple

lower body wrap worn in Southern India, this product has now traversed its way on to

bandannas, blouses, home furnishings and almost any thing one can think of.

Recently many designers have started using traditional Indian fabrics, designs and cuts to

enhance their fashion collections. Ethnic Indian designs with batik cravat, tie-and-dye or

vegetable block print is 'in' not just in India but all across the world.

In India, folk embroidery is always associated with women. It is a way of their self

expression, and they make designs that depict their native culture, their religion and their

desires. Women embroider clothes for their personal use, and the people linked with the

pastoral profession prepare embroidered animal decorations, decorative covers for horns and

foreheads and the Rabaris of Kutch in Gujarat do some of the finest embroidery.

Embroidered pieces are made during the festivals and marriages, which are appliqué work

called 'Dharaniya'. One of the significant styles of Saurashtra is 'Heer' embroidery, which has

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bold geometric designs, woven on silks. The Mutwa women of the Banni area of Kutch have

a fascinating embroidery where they make fine embroidery works with designed motifs and

mirrors in the size of pinheads, the Gracia jats use geometric designs on the yoke of long

dresses. Moreover, the finest of quilts with appliqué work are also made in Kutch.

Garments embellishment with bead work is another area where it in demand in the

international market. Beads are used to prepare garlands and other accessory items like belts

and bags and these patterns now available for haute couture evening wear too.

According to a survey, in recent times Indian women have given up their traditional sari for

western wears like t-shirts and shorts, as they feel more comfortable in skirts and trousers

instead of saris and salwar kameez. It's been noted that women spend just $165 million on

trousers and skirts against 1.74 billion dollars spent by men on trousers. With more women

coming out to work, the (combined) branded trouser and skirts market has been increasing at

a whopping 27 per cent in sales terms. Women feel that Western clothing is more suitable,

particularly when working or using public tran ation. Many corporate offices are also in favor

of their employees wearing Western wear.

In India, Western inspiration is increasing due to the influence of TV and films. Besides,

shopping malls selling branded clothes have also mushroomed in India and are fascinating

the youngsters. Recently, designer wear is being promoted through store chains such as

Shopper's Stop, Pantaloons, Westside, etc. Companies such as Raymond and TCNS have also

set up their exclusive stores for designer wear.

The market of India fashion industry

Recently, a report stated that the Indian fashion industry can increase from its net worth of Rs

200 crore to Rs 1,000 crore in the next five to ten years. Currently, the worldwide designer

wear market is amounted at $35 billion, with a 9 per cent growth rate, with the Indian fashion

industry creating hardly 0.1 per cent of the international industry's net worth.

According to approximations, the total apparel market in India is calculated to be about Rs

20,000 crore. The branded apparel market's size is nearly one fourth of this or Rs 5,000 crore.

Designer wear, in turn, covers nearly about 0.2 per cent of the branded apparel market.

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At present, the largest sales turnover within the designer wear segment is about Rs25 crore,

with other well-known names having less turnovers of Rs10-15 crore. In view of the

prospects of the Indian fashion industry for growth, the figures are not very hopeful.

The figure of fashion industry

The organized market for designer apparel is about Rs 250 crore

Designer wear calculates to less than 1 per cent of the apparel market

The global market for designer wear is 5 per cent of total apparel market

The global market for designer wear industry is largely dependent on the small-scale

sector

Consumers for designer wear have a yearly household income of Rs 10 lakh-plus.

There are 3 lakh such households developing at 40-45 per cent

Designer wear industry is projected to increase to Rs 1,000 crore by 2015.

More than 81 per cent of the population below 45 years of the age is fashion

conscious.

Many fashion designers and management experts foresee an average growth of about 10-12

per cent for the Indian fashion industry in the coming years. Though, the growth rate could be

more than 15 per cent, if infrastructural and other logistical bottlenecks and drawbacks are

over come.

India needs more effort to overcome

However, despite the benefits available in India there are also some disadvantages. India is

not a remarkable player in the global market with reference to brands because of its inability

to add value to products. This is observed by the fact that nearly 50 per cent of its exports are

apparel and made-ups where value addition is essential. Likewise, 75 per cent of domestic

apparel market is commoditized and unbranded and very few Indian brands do survive in the

foreign markets. Evidently, the Indian market has not made a strong stand and hence it is

difficult to make Indian brands that can compete with global brands in India.

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Company Profile & ProductsCompany Profile & Products

Koutons Retail India Ltd.

Koutons Retail India Ltd. is the leading retailer of

readymade and fashion wear brand in the country

today. With more than 1400 outlets across India, it has

a wide range of apparel designs suited for all segments

including corporate, formal and casual dressings.

Koutons aptly creates the conducive environment for a family outing, making family

shopping the best experience at an affordable price - all at one place.

Koutons was born in 1991 as Charlie Creations and are now Koutons Retail India Ltd.

Koutons started primarily as a denim brand but are today manufacturing and selling complete

men, women and kids wardrobe under the brand name Koutons, Les Femme and Koutons

Junior respectively. Another brand from the stable of Koutons is Charlie Outlaw, which

caters to the teens of the country with apparels including jeans, T- shirts, jackets etc. Koutons

Brand is catering to the Upper & Upper Middle Class of Society with a vast target age group

between 18-60 years.

"Value for Money and High on Fashion" being their USP, Koutons has given the brand an

extension delving into specific consumer segments. The garments are made keeping in view

the overall need of the niche market and the basic/fashion demand of the Indian masses. Our

product range also caters to the tastes of all segments. Our Brand is placed as the most

dynamic brand of India.

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ProductsProducts

KOUTONS MENSWEAR

The well known apparel house, Koutons Retail India

Ltd. has unveiled their latest collection of menswear.

This collection offers a wide range of formal and

informal clothing for men for the age group of 18

years and above. Known for their comfort and

durability the brand has become synonymous with

'fashion and quality' at affordable price'. The

collection caters to men which includes the working

professionals.

The collection includes the shirts, T-shirts, pull overs, sweat shirts ,denim and non-denim

trousers, cargo and shorts for men in trendy yet formal shades the collection also offers a

variety of fabrics to choose from. The basic formal shirts are available in linen and cotton

fabrics. The range is also available in blended fabrics. The special product range wrinkle

resistant flaunts ten to twelve colors to choose from. Using wrinkle-resistant technology the

company has sought to introduce a new breed of weaved hundred percent cotton fabric and

blended cotton.

The latest collection of Koutons menswear is a range created for today's generation of men

who wear what they like and firmly believe in themselves. The collection is for those who

like to blend comfort with style.

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KOUTONS

Peter England : Honestly ImpressivePeter England : Honestly Impressive

Peter England was initially positioned as an “Honest Shirt”. It was a very precise campaign

that categorically told the TG that the brand is of

good quality and honest- to – goodness price. The

strategy clicked and has to click because the product

was very good and the price was excellent. It just fit

in to ones budget. The TG for the brand was the 24-

28 ambitious and career oriented youth.

In order to make sure that the excitement remains, Peter England came out with various

ranges and varieties of shirts. The brand also extended to trousers with the same positioning.

Although some of the variants like English Cottons compromised on quality , the brand still

enjoys a good equity in the TG’s mind.

In 2002 the brand made a slight makeover. The positioning changed to “Honestly

Impressive”. The aim is to make the brand more than just value for money proposition but

also as a lifestyle brand. It has maintained its value proposition unchanged.

Peter England is a brand that clearly shows a marketer that it is possible to sell... Honestly.

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Cotton CountyCotton County

History of the Company

The parent company Cotton County Retail Ltd. is a wholly owned subsidiary of Nahar

Industrial Enterprises which was set up in 1949.

The promoters' belief of "Where commitment leads, achievement follows" has led to

tremendous growth with the company involved in spinning weaving, processing and

garmenting and supplies to some of the biggest brands in the world like Marks and Spencer,

GAP, Tommy Hilfiger and Armani. Nahar Industrial Enterprises Limited is an "Integrated

Textiles Player". The company is engaged in manufacturing right from yarn, griege (?) fabric

to processed fabric to readymade garments in the domestic market. Processed fabric is sold to

companies/brands like Madura garments, Raymond's Color Plus, Allen Solly, Louis Philippe,

Provogue, Pantaloon. In the export market, NIEL's clientele includes names like GAP,

Oshkosh, Ann Taylor, M&S, Liz Claiborne, Timberland, Algle (?), Tommy Hilfiger etc.

In NIEL.., a wholly owned subsidiary Cotton County Retail Ltd. was set up for its foray into

retailing. The Brands Cotton County, Femme, Tazo etc. are retailed through Executive Brand

Outlets under the name and style of Cotton County and as on... there were.600.. outlets,

located across India in.425..cities and 21.states & 1 Union Territory. The retail network is

largely operated through Franchisees.

Company Profile

Nahar Industrial Enterprises Limited is an “Integrated Textile Player”. The company is

engaged in manufacturing right from yarn to griege fabric to processed fabric to readymade

garments in the domestic market. Processed fabric is sold to companies/brands like Madura

Garments, Raymond’s Color Plus, Allen Solly, Louis Philippe, Provogue, Pantaloon. In the

export market, NIEL’s clientele includes names like GAP, Oshkosh, Ann Taylor, M&S, Liz

Claiborne, Timberland, Algle, Tommy Hilfiger etc.

Nahar Industrial Enterprises has floated a wholly owned subsidiary Cotton County Retail

Ltd. for its foray into retailing.

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The parent company is already involved in spinning, weaving, processing and garmenting

and supplies to some of the biggest brands in the world like Marks and Spencer, GAP,

Tommy Hilfiger and Armani.

Quality

Unlike many other enterprises and business organizations, Quality is not just an ordinary

word with very little or no meaning. For Cotton County, Quality has a significant importance

of its own which can describe the potential of the company in no time. We believe ‘If the

quality is good, there is room for Cotton County to survive in this corporate world. However,

if little attention is paid on Quality, then survival for Cotton County in this competitive era

will be a lot difficult.’

Hence, without giving any second thoughts, we have given Quality, our top priority. Today

Quality is something that is evident in all the spheres of the Company – even the products it

sells, the work culture, and the various departments of the Company. Our Parent Company,

Nahar Industrial Enterprises Limited has been awarded ISO 9002/IS 14002 Certification and

Okotex Certification.

For us, Quality is the ability of our products to be able to satisfy our users. And to ensure this,

the garment goes through various Quality checks in order to ensure utmost customer

satisfaction

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Quality can be mainly seen in 3 different spheres of the Company :

1. Customers

• We aim to do everything that satisfies our customer needs and expectations.

• We make only those commitments that we fully understand and we believe we can meet

than .

• Also, meeting our commitments made with customers on time.

2. Performance Driven

• We confirm that all our garments meet the agreed requirements.

• We constantly monitor and improve our business’s garments, services, organization and

employee   performance.

• We make sure that we achieve the goals set by us for the future.

• We confirm that our working environment is 100% employee friendly.

In short, Our Commitments are towards our customers, business and society.

Mission/Vision

Mision

We aim to meet the aspirations of our customers through our offerings of contemporary

fashion and international quality at affordable prices. We look at every Indian as our

customer and will operate on a Pan-India basis in Metro, Tier I, Tier II and Tier III cities and

towns. We will create a leadership position in this field by growing faster than competition.

We will achieve our goals of customer satisfaction through product excellence and our

growth objective through employee motivation and prudent financial policies for investor

satisfaction.

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Vision

To be pro-active in assessing customer needs and to deliver

quality products.

To grow as a leader ahead of the competition through internal

performance achievements.

To stand by our commitments to our Vendors, Franchisees and

Employees.

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ESS AAY Fashion India Pvt. Ltd. Clothing

company was founded in 2001 by Sanjay Tayal

and Ajay Tayal after taking extensive training in

the field of garment production, fashion and

quality.

There was an air of optimism in the industry and it saw the brand charly outlaw as one of the

emerging new labels.

Charly outlaw initially launched with formals , after indepth research and market response it

gradually moved on to casuals and clubwear with stylized slim fits.

The Key Factor is that the dous at Charly outlaw are constantly re-inventing and developing

new styles in a way of patters and fits. The fabrics and accessories are usually sourced from

different parts across the country and are exclusively programmed for charly outlaw. The

brand has a complete over block printing, screen printing and embroidery. It gives every style

exclusivity.

The Aim of Charly outlaw has always been to design leading edge clothing and to be able to

manage their stores at a reasonable price.

The Price factor is very competitive in their stores.

The Brand currently has its presence in market with almost 50 stores it aims to reach out to

more consumers through all stores across the major metros in maharashtra, delhi, haryana,

punjab, west bengal, bihar etc.

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ESS AAY Fashion India Pvt. Ltd. Clothing company was

founded in 2001 by Sanjay Tayal and Ajay Tayal after

taking extensive training in the field of garment

production, fashion and quality.

There was an air of optimism in the industry and it saw

the brand allen cooper as one of the emerging new labels.

Allen Cooper initially launched with formals , after indepth research and market response it

gradually moved on to casuals and clubwear with stylized slim fits.

The Key Factor is that the dous at Allen Cooper are constantly re-inventing and developing

new styles in a way of patters and fits. The fabrics and accessories are usually sourced from

different parts across the country and are exclusively programmed for allen cooper. The

brand has a complete over block printing, screen printing and embroidery. It gives every style

exclusivity.

The Aim of Allen Cooper has always been to design leading edge clothing and to be able to

manage their stores at a reasonable price.

The Price factor is very competitive in their stores.

The Brand currently has its presence in market with almost 50 stores it aims to reach out to

more consumers through all stores across the major metros in maharashtra, delhi, haryana,

punjab, west bengal, bihar etc.

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Priknit Retails Limited- A Profile

OVERVIEW

Priknit is one of the leading men’s wear integrated apparel manufacturing and retail

companies of India. Priknit has established itself in the business of designing, manufacturing

and retail of apparels under the Priknit brands through a network of 152 plus exclusive brand

outlets across 141 cities in India. The Company clocked a turnover of 290 crores in financial

year 2008-2009 which is a growth of over 70 % over last year sale. Priknit Retail Limited, led

by its founder and Managing Director, Sh. Vijay Kumar Ghai is one of North’s leading

business houses with multiple businesses spanning across the consumption space. While

retail forms the core business activity of Priknit retail, company is also present in,

manufacturing & trading of knitted cloths, woolen garments etc. Started in 1983 when

founder Sh. Vijay Kumar Ghai set up a small hosiery unit .From the inception in 1983 Priknit

was eying big and now in year 2009 it has established a manufacturing unit (having a

capacity to manufacture approximately 2.5 million pieces of apparel per annum). Since then

our manufacturing and finishing capacity has increased significantly. Currently the Company

has in-house manufacturing/finishing units and warehouses which are spread across various

locations in and around Ludhiana.

Company has also entered into fabricating agreements with various manufacturing units to

which we outsource stitching of certain apparels. Our manufacturing and finishing facilities

are backed by adequate facilities for product testing, apparel development, design studio and

sampling infrastructure to ensure high quality apparels for our customers. Brand Priknit have

grown significantly in the recent past & has become a house hold name in the northern &

eastern markets... The strength of brand Priknit has significantly contributed to the success of

its business. Priknit brand is positioned as a brand in the middle to high fashion segment,

offering a complete range of a man’s wardrobe (in the age group of 18 to 45 years) ranging

from semi formal to casual and party wear. Priknit is also present in women segment as a

casual brand targeted at fashion conscious young women in the age group of 18 to 35 years

and is positioned as a fashionable and contemporary, value for money brand. Priknit as of

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now is well positioned to capture considerable growth opportunities in India’s apparel

manufacturing and retail sectors, because of our following key strengths:

EXCLUSIVE BRAND OUTLETS. ,

Priknit operate on a model of marketing its apparels directly through a chain of exclusive

brand outlets and thus are independent of external marketing pressures attributable to the

national chain stores, multi brand outlets and other intermediaries. This enables it to focus its

strategies and efforts towards quality maintenance and customer satisfaction without the

interference of any external agency. This model also enhances the brand equity and recalls

value of brand and also allows us to undertake line extensions, as the shelf space on each of

the exclusive brand outlets is controlled by the company.

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MONTE CARLO

A “ never-seen-before” range of half, rollup sleeve shirts is

highlight of the Monte Carlo’s latest collection – “Spring summer 2010” that was unveiled

recently. Promising a soothing sense of style and fashion, the new range comprises elegantly

designed trousers, the vibrant T shirts, the striking sandos and a wide variety of tracksuits and

Bermudas.

For the fashion enthusiast men, the Monte Carlo’s S/ S 10 range is there to add both

‘ethnicity and authenticity’ to men wardrobe. The range not only contains a romantic,

spiritual and poetic appeal to the silhouettes but virtually offers a style therapy for the season.

Spokesperson of the company says the new range has a fresh “taste for fashion” and is bound

to cater to every need of fashion enthusiasts. “While drawing this summer collection we

concentrated mainly on presenting a “never-seen -before” collection.

In T-Shirts category the latest collection comprises variety of colour, style detailing and

graphics and is further subdivided into sinker and pique T -shirts, all available in solid

colours, bright auto stripes. To capture the interest of both modern and classic fashion

enthusiasts while slim fit crew neck range has a shade card ranging from off whites and light

beiges to bright raspberry and tomato reds , the subtle duo tone stripe T-shirts with patch

work are there for those wanting classic trends . The range is further supplemented by bold

coloured auto stripes having woven details as well as graphic chest prints. “We hope it would

in any case capture everyone's style and imagination”, said the spokesperson.

Yet another category of collar T shirts and Polo ‘T’ shirts offers a range that has been drawn

after a variety of experimentation with colours. Horizontal stripes make it for the most sought

after “Indigo collection”, the leisure or casual, moods are flows vividly in combo of ‘Off

White and Pale Plum’, ‘Raspberry and Black’. Also available in latest collection are full and

half placketed, round neck, V neck, contrast collared with hoods – all set to take style and

fashion to next level.

The spokesperson said the company has sought to introduce a new article in “never out of

stock” range available in trousers section. The men could choose from among the wrinkle

free cotton linen trouser as well as denims. “With our formal trouser range we aimed at

50 | P a g e

young achievers and upscale urbanites. In addition sports lower can match their sporty mood

with denim cargo shorts made up from stylish quality fabrics”, she / he added.

Another highlight of the summer range is tracksuits and Bermuda sets. Be it placketed, full

zipped, half zipped, round neck, collared or raglan sleeve with chest prints , all is there in

new range . “In other words you name it and there you find it in collection”. Furthermore, the

collection of sandos stands out as it offers fashion icons a perfect balance of style, fashion

and sensibility. For the fashion enthusiast men, the Monte Carlo’s S/ S 10 range is there to

add both ‘ethnicity and authenticity’ to men wardrobe. The range not only contains a

romantic , spiritual and poetic appeal to the silhouettes but virtually offers a style therapy for

the season.

Latest among all the new range has sought to redefine slim denims with a new addition of

purple, grey, deep red, pinks to the classics in the leg wear segment. Sequins and

embellishments have been given exclusivity, prints highlighted with little touchups and satins

and georgettes have been added to impart all new look to the pleated, ruffled, tuck detailed

tops. “This year designers have laid special emphasis on reaching perfection in detailing,

finishing’s there by leaving no room for vagueness”, said company spokesperson.

Adding variety to the Alpha Collection S/S 10 Wardrobe, Indian Kurtis in block printed

details enriched with brocade and laces are there to cater to men having keenness for

Indianinised wardrobe designed in a variety of colours including Green, mauves, blues, deep

red , refined shades of wine and pink , and all time essentials – the Black and white.

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companies given below & enquire.

52 | P a g e

Chapter - 02Chapter - 02

Conceptual Frame WorkConceptual Frame Work

ALL ABOUT BRANDING

The term brand means different things to the different roles of buyer and seller, with buyers

generally associating brand with a product or service, and merchants associating brand with

identity. Brand can also identify the company behind the specific product -- that's not just a

biscuit, that's Britannia biscuit. This use of brand puts a "face" behind the name, so to speak,

even if the "face" is the result of advertising copy and television commercials. This use of

brand also says nothing of quality, just the buyer's exposure to the brand's PR and media

hype. For the typical merchant, branding is a way of taking everything that is good about the

company -- positive shopping experience, professionalism, superior service, product

knowledge, whatever the company decides is important for a customer to believe about the

company -- and wrapping these characteristics into a package that can be evoked by the brand

as signifier.

Introduct ion to Branding

The American Marketing Association defines a brand as “A name, term, sign, symbol or

design or a combination of them, intended to identify the goods and services of one seller or

group and to differentiate them to those for competitors”. A brand is thus a product or service

that’s adds a Dimension that differentiates it in some way from other products or services

designed to satisfy the same need. These differences may be functional, rational, or tangible-

relate to product performance of the brand.

Branding has been around for centuries as a means to distinguish the goods of one producer

to those of another. The earliest signs of branding can be traced to Europe where the

medieval guilds required that craftsmen put trademarks on their product to protect themselves

and producer against inferior quality substitutes. Also in fine arts branding began with artists

signing their works. Brands today play a number of important roles that improve the

consumer’s lives and enhance the financial value of firms.

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Brands identify the source or maker of the product and allow consumers-either individual or

organizations- to assign responsibility to a particular manufacturer or distributor. Consumers

may evaluate the identical product differently depending how it is branded. Consumers lean

about the brand with its past experience and the marketing program. As consumers lives

becomes more complicated, time starved the ability of brand to simplify decision making is

invaluable. Brands also perform valuable functions for the firm. First they simplify the

product handling and tracing. Brands help to organize inventory and accounting records. The

brand name can be protected registered trademarks. The intellectual property rights ensure

that the firm can safely invest in the brand and can reap the benefits over a long period of

time.

Brands can signal a certain level of quality so that satisfied buyers can easily choose the

product again. Brand loyalty provides predictability and security of demand for the firm and

creates barriers to entry that makes it difficult for other firms to enter the market. This brand

loyalty can translate into willingness to pay higher price. In this sense branding can be seen

as powerful means to secure a competitive advantage. Brands represent enormously valuable

pieces of legal property that can influence consumer’s behavior. Strong brand results in better

earnings and profit performance for firms, which in turn, creates greater value for

shareholders.

How do you “BRAND” a product? Although firms provide the impetus to brand creation

through marketing programs and other activities, ultimately a brand is something that resides

in the mind of the consumers. A brand is a perpetual identity that is rooted in reality but

reflects the perceptions and perhaps even the ultimate choice of the consumers. Branding is

endowing products and services with the power of brands. To brand a product, it is necessary

to teach the consumers “who” the product-by giving a name. Branding involves creating

mental structures and helping consumers organize their knowledge about products and

services in a way that clarifies their decision making and in process provides value to the

firm.

Branding can be applied virtually anywhere a consumer has a choice. It is possible to brand:

A physical good (Nestle soup, Pantene shampoo or Maruti Swift),

A service (Kingfisher Airlines, TATA AIG medical insurance),

A store (Big Bazaar, BATA stores,etc),

A place (The state of Kerala, Pushkar Mela),

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A person (Shahrukh Khan, Sachin Tendulkar),

An organization (UNICEF or BCCI),

Brand is the proprietary visual, emotional, rational, and cultural image that you associate with

the company or a product. When you think of Volvo, you think of safety. When you think of

Nike, you think of Michael Jordon or ‘Just Do It’. When you think of IBM, you think of ‘Big

Blue’. The fact that you remember the brand name and have positive associations with that

brand makes your product selection easier and enhances the value and satisfaction you get

from product.

While Brand X cola or even Pepsi-Cola may win blind taste tests over Coca-Cola, the fact is

that more people buy Coke than any other Cola. The fond memories of childhood and

refreshment that people have when they drink Coke is often more important than a little bit

better cola taste. It I this emotional relationship with brands that make them so powerful.

Purpose of Branding

The purpose of branding is to create a powerful and lasting emotional connection with

customers and other audiences. A brand is a set of elements or “brand assets” that in

combination create a unique, memorable, unmistakable, and valuable relationship between an

organization and its customers. The brand is carried by a set of compelling visual, written and

vocal tools to represent the business plan and intentions of an organization.

Branding is the voice and image that represents your business plan to the outside world. What

your company, products and services stand for should all be captured in your branding

strategy, and represented consistently throughout all your brand assets and in your daily

marketing activities

The brand image that carries this emotional connection consists of the many manageable

elements of branding system, including both visual image assets and language assets. The

process of managing the brand to the business plan is important not only in “big change

situation” where the brand redefinition is required, but also in the management of routine

marketing variables and tactics. This does not have to be a “ground-up” situation where there

are wholesale changes to the business. Rather it is more common that specific changes to the

changes to the business plan are incremental and the work of the brand strategist and designer

is to interpret these changes and revise the branding strategy and resulting brand assets and

define their use in the full range of marketing variables.

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Brand Identity

Brand Identity includes brand names, logos, positioning, brand associations, and brand

personality, brand toons etc. A good brand name gives a good first impression and evokes

positive associations with the brand. A positioning statement tells what business the company

is in, what benefits it provides and why it is better than the completion? Brand personality

adds emotion, culture and myth to brand identity by the use of a famous spokesperson (Bill

Cosby-Jello), a character (Pink Panther), an animal (the Merrill lynch bull) etc.

Brand associations are the attributes that costumer thinks of when they hear or see the brand

name. McDonalds television are a series of one brand association after another, starting in

yellow arches in the low right corner of the screen and following with associations of Big

Mac, Ronald MacDonald, kids, happy meal, food quality etc. The first step in creating a

brand for your company is branding workshop.

How do we determine our Brand Identity?

Brand has been called the most powerful idea in commercial world, yet few companies create

a brand identity. Do you want your company’s brand identity created for you by competitors

and unhappy customers? Of course not. Our advice to executives is to research their

customers and find the top ranked reasons that the customers buy their product rather than

their competitors. Then, pound that message in every ad, in every news release, in

communications with employees and in every sales call or media interview. By continuous

repetition of messages customer will think of your product and then buy it.

Tools for Building Brand Identity

Brand builders use a set of tools to strengthen and project the brand image; Strong brands

typically exhibit an owned word, a slogan, a color, a symbol, and set of stories.

Owned Word

A strong brand name should trigger another word, a favorable one. Here is the list of brands

that own a word:

Slogan

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Many companies successfully added a slogan or tagline to their brand name which is repeated in every ad they

use. Here are some well-known brands slogans, which people on the street may easily recall or recognize:

COMPANY SLOGAN

British Airways

Ford

LIC

“The world’s favorite airline”

“Quality is our number one job”

“Jeevan ke saath bhi jeevan ke baad bhi”

Colors

It helps for a company or a brand to use a consistent set of color to and in the brand

recognition. Caterpillar paints all its construction equipments yellow. Yellow is the color of

Kodak film. IBM uses blue in its publications, and IBM is called “Big Blues”.

Symbols and Logos

Companies would be wise to adapt a symbol or logo to use in their communications. Many

companies hire a well-known spokesperson, hoping that his or her quality transfer to the

brand. Nike uses Michael Jordon who has worldwide recognition and likableness, to advertise

its shoes. Sporting goods manufacturers sign contracts with top athletes to serve as their

symbols, even naming the product after them.

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Cartoons and Animations

A less expensive approach is to develop a character, animated, to etch the brand’s image into customer’s mind.

The advertising agency Leo Burnett has successfully created a number of memorable animated characters. Here

are some well known brand cartoons which people may recognize:

Company Cartoon or Animation

ICICI Prudential

Amul Butter

McDonalds

All Out mosquito Repellent

Pillsbury

7 Up

Chintamani

Utterly Butterly Girl

Ronald

Louis

Doughboy

Fido Dido

Objects

Still another approach is to choose an object to represent a company or brand. The travelers’

insurance company uses an umbrella, suggesting that buying insurance is equivalent to

having an umbrella available when it rains. The prudential insurance company features the

rock of Gibraltar, suggesting that buying an insurance is equivalent to “owing a peace of rock

“which is of course, solid ad dependable. Companies have developed many logos or

abstracts, which are easily remembered by people. Even the way the brand name is written

makes a brand recognizable and memorable.

Brand Effectiveness

With an increase in global competition, branding has become a source of competitive

advantage. In rapidly evolving market for consumer, and industrial products and services, the

source of next generation competency will be branding. In this briefing we demonstrate how

to calculate the brand strength, the price premium associated with the products categories,

and type of customers attracted to the “Premium Products”. Marketers who match their brand

with customers needs will have a sustainable competitive advantage.

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Measuring Brand Effectiveness

There are many metrics to measure the potential of and actual effectiveness of brands. The

simplest way is to apply the concept of what we call the 4 D’s of Branding; differentiation,

distinctiveness, defendable, digit-able.

Distinctiveness : your brand should be distinct when compared to your competitors

and to all spoken and visual communications to which your target audiences will be

exposed. The more unique and distinct your communications, the wider the filed of

effective competitive strength it will have. There are simple means to apply to test the

distinctiveness of your brand.

Differentiation: the brand strategy and brand assets must set you’re offering apart

and clearly articulate the specific positioning intent of your offering.

Defendable: you will be investing in creating your brand assets and in all cases your

brand must have proprietary strength to keep others from using close approximations.

This applies to your trade names and other proprietary words as well as to your logos,

symbols and other visual assets.

Digit-able : in most businesses there is strong and growing element of electronic

communications and commerce that dictate all brand assets be leveraged effectively

in tactile and electronics form. This goes for all brand assets.

Much of the brand manager’s work is to build a brand image. But its job doesn’t stop there.

The rand manager needs to make sure that brand experience matches the brand image. Much

can go wrong. A fine brand of canned soup described in a full page color ad may be found in

dented and dusty condition in the bottom shelf of a supermarket. The ad describing a gracious

hotel chain is belied by the behavior of a surly concierge.

Building brand therefore calls for more than brand image building. It calls for managing

every brand contact that customer might have with brand. Since all the employees,

distributors and dealers can affect brand experience.

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Brand and Reputation

A brand exists in the mind, or not at all. The mind it exists in may be that of a customer, a

potential customer, an interested observer, a disinterested observer... or almost anybody.

Awareness of a brand may be irrelevant to any purchasing decision that an individual may

make. People are aware of the Mercedes car brand, but cannot envisage any circumstance

under which they would (could!) buy a Mercedes. They are aware of Marlboro (and scores of

other cigarette brands) but as a non-smoker they will never convert their awareness into

purchase. Male with no children are not targeted by Pampers or Huggies but still are aware of

the brands.

People wear many hats. But are or not a potential customer. People may be an employee, an

investor, a citizen, a husband and so on. They hate McDonald’s hamburgers but might love

their stock market record and therefore be a potential customer for their stock. They will

never buy a Boeing 777 but might be impressed by the aircraft and favor an airline that flies

them. They have no idea what an Intel chip is, but might be persuaded that it is a good thing

to have in my PC and therefore buy a computer from a company that uses them.

Brand Aware argues that there is no difference between "Brand" and "Reputation". Some

conventional wisdoms state that customers buy brands, but that investors buy reputations.

Those potential employees join companies because of their reputation, that the media and

other "stakeholders" judge a company on its reputation in some way as a distinct concept

from its brand. This part argues that such distinctions are fallacious for all companies, but

especially for single brand companies such as a McDonalds, a Coca-Cola, a Compaq or a

Shell. These companies’ reputations are part and parcel of their brand. Their brands are their

reputation.

The Brand

To any individual a brand (in his mind) is a complex combination of experiences, beliefs,

perceptions and associations that have grown up over time. For example Coca-Cola is a

company brand, a product brand, a service brand and a brand with a long history. It is a brand

which may represent (to any one individual) diversity, internationality, technical excellence,

financial strength etc. etc. It may also mean insensitivity, environmental pollution, abuse of

power and other negative perceptions.

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Perceiving the brand:

An individual builds up his perceptions of a brand via a wide range of communications

channels. They are as follows:

Experience: The most powerful influence is experiential. This is when the

individual actually has a "Brand experience". The most obvious are: -

He visits a McDonald’s restaurant or a Shell petrol station.

He buys a Coca-Cola branded product or service.

He views a Coca-Cola bottler's facility.

He visits a corporate website.

He attends an interview at the company.

He contacts the company office for information.

He meets an employee of the company.

He buys a share in the company, etc.

Advertising: Over time an individual who lives in a country in which the

company/brand is active, or travels to one on business or vacation, will be

exposed to their advertising. This advertising may be in a wide range of media:

TV commercials for products and services

Recruitment ads inviting employment applications

"Corporate" TV commercials promoting the company's "reputation"

Web based advertising

An ad for the company’s branded products or services in a wide variety of print

media.

Billboards on highways

Radio

Point of sale etc.

Media reports and stories: Individuals will be exposed to a wide variety of

reports about companies in the media (print and broadcast) where the editorial

content is only partly influence able by the company (in some cases) or not at

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all (in most cases). These stories will come from a variety of primary and

secondary sources: -

Press releases

Press conferences

Reporting of "events"

Investigative journalism

Stories passed to the media by third parties (Non governmental organizations

etc.)

Professional/business interest : For some individuals to interface

professionally, or from a specific business need, with famous companies (or to

observe them) is part of their job. They will usually procure their information

from a variety of sources and via a variety of channels of communication.

These individuals have a special interest in the companies and they include: -

Financial analysts and journalists with an interest in share performance

Existing or potential suppliers of products and services

Existing or potential industrial/commercial customers

Building the Brand

The art of marketing is largely art of brand building. When something is not a brand, it will

probably be viewed as a commodity. Then price is the thing that counts. When price is the

only thing that counts then the low cost producer wins. But just having a brand is not enough.

What does the brand name mean? What associations, performances and expectations does it

evoke? What degree of preferences does it create?

Choosing a Brand Name

A brand name first must be chosen then its various meanings and promises must be built up

through brand identity work. In choosing a brand name, it must be consistent with the value

positioning of the brand. In naming a product or service the company may face many

possibilities: it could choose name of the person (Honda, Calvin Klein), location (American

airlines), quality (Safety stores, Healthy choice), or an artificial name (Exxon, Kodak).

Among the desirable qualities of a brand name. Some are:

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It should suggest something about the product benefits.

It should suggest product qualities such action or color

It should be easy to pronounce, recognize and remember; short names help a lot

to recognize the product to the customers.

It should be distinctive.

It should not carry poor meanings in other countries and languages etc.

Building Positive Associations

The best known brand names carry associations. For example, here is a list of words that

people say they associate with McDonalds:

Kids

Fun

Happy Meal

Ronald Mc. Donald

Quality

Toys

In trying to build a rich set of positive associations for a brand, the brand builder should

consider five dimensions that can communicate meaning:

Attributes: A strong brand should trigger in buyers mind certain attributes. Thus a

Mercedes automobile attributes a picture of well-engineered car that is durable,

rugged and expensive. If a car brand does not trigger any attribute, then it would be a

weak brand.

Benefits: A strong brand should suggest benefits, not just features. Thus Mercedes

triggers the idea of well performing car that is enjoyable to drive and prestigious to

own.

Company Values : A strong brand should connote values that the company holds.

Thus Mercedes is proud of its engineers and engineering innovations and is very

organized and efficient in its operations. The fact that it is a German company adds

more pictures in the mind of the buyers about the character and the culture of the

brand.

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Personality : A strong brand should exhibit some personality traits. Thus if Mercedes

were a person we would think of someone who is middle age, serious, well-organized

and somewhat authoritarian. If Mercedes were an animal we might think of lion or its

implied personality.

Users: A strong brand should suggest the type of people who buy the brand. Thus we

would expect Mercedes to draw buyers who are older, affluent and professional.

In summary, brands when their very name connotes positive attributes, benefits, company

values, personality and users in the buyer’s mind. The brand builder’s job is to create a brand

identity that builds on those dimensions.

Choosing Brand Elements

Brand elements are those trademarks devices that serve to identify and differentiate the brand.

Most strong brands employ multiple brand elements. Nike has distinctive “swoosh” logo, the

empowering “Just Do It” slogan and the mythological “Nike” name based on the winged

goddess of victory.

Brand element can be chosen to build as much as brand equity as possible. The test of the

brand building ability of these elements is what consumers think or feel about the product if

they only knew about the brand element. A brand element provides positive contribution to

brand equity.

Brand Element Choice Criteria

There are six criteria in choosing brand element. The first three can be characterized by brand

building in terms of how brand equity can be build through judicious choice of brand

element. The latter three are more defensive and are concerned with how the brand equity

contained in the brand element can be leveraged and preserved in the face of various

opportunities and constraints.

Memorable : How easily is the brand element recalled? How easily recognized? Is

this true at both purchase and consumption? Short brand name like tide, Nike can

help.

Meaningfu l : To what extent is brand element credible and suggestive of the

corresponding category? Does it suggest something about a product ingredient or a

type of person who might use the brand?

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Likeability : How aesthetically appealing does consumers find the brand element? Is

it inherently likeable visually, verbally, and in other ways? Concrete brand names

such as Wheel, Sunsilk etc evoke much imagery.

Transferable : Can a brand element be used to introduce new products in the same or

different categories? To what extent does the brand element add to brand equity

across geographic boundaries and market segments?

Adaptable : How adaptable and updatable is the brand element? Betty corker received

8 makeovers through the years-although she is 75 yrs old, she doesn’t look a day over

35.

Protectable : How legally protectable is the brand element? How competitively

protectable? Can it be easily copied? It is important that names that become

synonymous with product categories such as Kleenex, Xerox, Jell-O, etc retain their

trademarks rights and not become generic.

Brand elements can play a number of roles. If consumers do not examine much information

in making their product decisions, brand elements should be easily recognized and recalled

and inherently descriptive and persuasive. Memorable or meaningful brand elements can

reduce the burden on marketing communications to build awareness and link brand

associations. The different associations that arise from likeability and appeal of the brand

elements may also play a critical role in the equity of brand.

What is Brand Equity?

There is no universally accepted definition of brand equity. The term means different things

for different companies and products. However, there are several common characteristics of

the many definitions that are used today. From the following examples it is clear that brand

equity is multi-dimensional. There are several stakeholders concerned with brand equity,

including the firm, the consumer, the channel, and some would even argue the financial

markets. But ultimately, it is the consumer that is the most critical component in defining

brand equity. Some researchers in the field of marketing have defined brand equity as

follows:

Lance Leuthesser, et al (1995) writes that "… brand equity represents the value (to a

consumer) of a product, above that which would result for an otherwise identical

product without the brand's name. In other words, brand equity represents the degree

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to which a brand's name alone contributes value to the offering (again, from the

perspective of the consumer)."

The Marketing Science Institute (1988) defines brand equity as, "The set of

associations and behaviors on the part of the brand's customers, channel members,

and parent corporations that permit the brand to earn greater volume or greater

margins than it could without the brand name and that gives the brand a strong,

sustainable, and differentiated advantage over competitors."

Brand equity can be defined as three distinct elements:

The total value of a brand as a separable asset -- when it is sold or included on a

balance sheet.

A measure of the strength of consumers' attachment to a brand.

A description of the associations and beliefs the consumer has about the brand.

Of those three concepts, the first can be classified as "brand valuation," the second "brand

loyalty," and the third "brand description." Brand loyalty will be a factor that affects the

overall brand value, and brand description will usually affect or explain some of the brand

loyalty. Because of the importance of each of these elements of brand equity, they will each

be briefly explained.

Brand Equity as Brand Value.

Brand value involves actually placing a dollar or rupee value on a brand name. The reasons

for doing this are usually to set a price when the brand is sold and also to include the brand as

an intangible asset on a balance sheet (a practice which is not used in some countries). While

there are many methods for making this measurement, some of which will be described

shortly, it is important to note that there is a significant difference between an "objective"

valuation created for balance sheet purposes, and the actual price that a brand may get when

sold?

A brand is likely to have a much greater value to one purchaser than another depending on

the synergy that exists. For acquisitions, the value of a brand to a certain purchaser is often

estimated through scenario planning. This involves determining what future cash flows the

company could achieve if it owned and took advantage of the brand.

What this means is that there is no such thing as an absolute value for a brand, and brand

value needs to be considered as only one component of the overall equity of a brand.

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Brand Equity as Brand Loyalty

Loyalty is a core dimension of brand equity and is a way to gauge the strength of a brand. It

represents a barrier to entry, a basis for a price premium, and time to respond to competitive

innovations. The variety of measures used for brand loyalty usually is a combination of one

or more of the following:

Price/demand measures--focus on a brand's ability to command a higher price or

make consumers less sensitive to price increases than price increases for competing

brands.

Behavioral measures--focus on consumers' behavior.

Attitudinal measures--focus on general evaluative measures such as 'liking' or

'disliking.'

Awareness measures--focus on identifying a brand as being associated with a product

category.

Brand Loyalty and Equity refer to the notion that some brands are "stronger" or better

than others.

An example of this sort of belief is:

“If the businesses were split up, I would take the brands, trademarks and goodwill, and you

could have all the bricks and mortar - and I would fare better than you.”

The optimism for the concept can be stated on the fact that when one would say as a

predictor of future financial performance, brand equity, if reported, would be valuable for

capital marketers and shareholders. Brand equity has the potential to become the set of

measures of business performance that matter most.

The motivation for brand equity comes from the observation that many marketing efforts

"realize" benefits; such as sales or profit and these are accounted for in the firm’s profit and

loss figures. However, there is the possibility that management might choose between taking

realized benefits and "storing" them future. One of the most common times this argument is

used is when discussing the role of advertising versus sales promotion. You could spend lots

of money on advertising, see no immediate effects, but you could save your job by saying

that you had "built the brand". At least one advertising agency offers to partner companies in

this sort of activity.

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So marketing strategies could be putting money into (or out of) the brand equity bank

account. But the question is as always how do we know? That is are we actually building the

brand with all our advertising (or other brand building 4 p’s decisions e.g., limited / premium

distribution rights, high price, fancy packing, after sales service, extended warranties).So,

hopefully you have got the idea - theories about brand loyalty and equity are used to represent

aspects of brand strength.

This "strength" can take a number of forms, e.g., consumers predominantly buying your

brand, which might be represented by a high share of category requirements, or high

proportion of sole-buyers.

Consumers saying good things about your brand, e.g., having a positive brand Attitude, it

might be the ability to charge a price premium. It might be the ability to not be substituted

when out of stock. Future strength might be in terms of some sort of long-term competitive

advantage or the ability to sustain brand extensions.

One of the things is that as with many concepts in marketing, is that there are many different

definitions and viewpoints on what exactly brand equity is and how to measure it. So that is a

problem. We need to be clear just what people mean when they talk about brand equity or

brand loyalty, or building brands.

Brand loyalty / Equity advocates

One of the ruses used by proponents of brand equity or loyalty is to claim that these measures

do not capture all the important aspects of brands strength. But this is an evasion. We want to

be able to detect that our efforts are doing something to the brand, and so we need to know

ways that this might show up in.

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Brand Equity as Brand Description

Brand description, the final component of brand equity, concerns the actual attributes of the

brand. These attributes or associations are major creators of brand loyalty. A wide variety of

techniques exist for matching consumer associations with perceptions of a brand. These

techniques can be both qualitative and quantitative. They work by getting the respondent to

link each brand with pictures or words. These attributes then can be measured with multi-

dimensional scaling to position the attributes relative to one another.

Qualitative Measures of Brand Equity

The Brand Equity Ten are ten sets of measures grouped into five categories, which attempt to

gauge the strength of a brand. The first four categories represent customer perceptions of the

brand along the four dimensions of brand equity- loyalty, perceived quality, associations and

awareness. The fifth includes two sets of market behavior measures.

Loyalty

Price Premium: A basic indicator of loyalty is the amount a customer will pay for a

product in comparison to other comparable products. A price premium can be

determined by simply asking consumers how much more they would be willing to pay

for the brand.

Customer Satisfaction: A direct measure of customer satisfaction can be applied to

existing customers. The focus can be the last use experience or simply the use

experience from the customer's view.

Perceived Quality and Leadership Measures

Perceived Quality is one of the key dimensions of brand equity and has been shown

to be associated with price premiums, price elasticities, brand usage and stock return.

It can be calculated by asking consumers to directly compare similar brands.

Leadership/Popularity has three dimensions. First, if enough consumers are buying

into the brand concept it must have merit. Second, leadership often taps innovation

within a product class. Third, leadership taps the dynamics of consumer acceptance.

Namely, people are uneasy swimming against the tide are a likely to buy a popular

product. This can be measured by asking consumers about the product's leadership

position, its popularity and its innovative qualities.

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Associations/ Differentiation Measures

Perceived Value: This dimension simply involves determining whether the product

provides good value for the money and whether there are reasons to buy this brand

over competitive brands.

Brand Personality: This element is based on the brand-as-person perspective. For

some brands, the brand personality can provide links to the brands emotional and self-

expressive benefits.

Organizational Associations: This dimension considers the type of organization that

lies behind the brand.

Awareness Measures

Brand awareness reflects the salience of the product in the consumer's mind and

involves various levels including recognition, recall, brand dominance, and brand

knowledge and brand opinion.

Market Behavior Measures

Market Share: The performance of a brand as measured by market share often

provides a valid and dynamic reflection of the brand's standing with customers.

Price and Distribution indices: Market share can prove deceptive when it increases

as a result of reduced prices or promotions. Calculating market price and distribution

coverage can provide or more accurate picture of the product's true strength. Relative

market price can be calculated by dividing the average price at which the product was

sold during the month by the average price at which all the brands were sold.

Managing Brand Equity

Consistency is the key to successfully building and managing brand equity. Having a long-

term outlook and projecting a consistent image of your brand to the customer will maximize

the results of building brand equity. It is critical for managers to realize that brand equity can

have positive as well as negative effects on a product or company. In the end, it is the

customer that truly defines what brand equity means.

If management feels it is necessary to change the direction of a brand or change a product it

must be careful not to change too quickly. There are many examples of companies that have

changed a product or brand too much or too quickly. On these occasions, consumers met

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changes with adverse reactions. The most famous example is Coca-Cola. They changed the

formula of their flagship product Coke, and consumers reacted so poorly to the new product

that the old formula was reintroduced and the new formula eventually was discontinued. The

consumer through the product experiences brand equity. The product has certain attributes or

characteristics that deliver the equity to the consumer. If any of these attributes are changed

or eliminated, the equity delivered to the consumer is also changed.

Managing brand equity is a continual process with long-term implications. Unfortunately,

many brand managers are forced to focus on short-term goals such as market share and

profits. Many programs that are implemented to boost short-term sales or market share may

be detrimental to the long-term viability of the brand. For example, Proctor & Gamble has

started to test market a program to move away from using coupons to a system of every day

low prices. This is, in part, because consumers may become loyal to the coupon or promotion

and not to the product itself. Constant promotional programs erode margins and eventually

brand loyalty. Ultimately, brand equity is damaged.

In 1988, Graham Phillips, Chairman of Ogilvy and Mather Worldwide, said, "I doubt that

many would welcome a commodity marketplace in which one competed solely on price,

promotion and trade deals, all of which can be easily duplicated by competition. This would

lead to ever decreasing profits, decay, and eventual bankruptcy. About the only aspect of the

marketing mix that cannot be duplicated is a strong brand image." This quote clearly

demonstrates the importance of managing brand equity. In many categories, brand equity is

the only point of differentiation between products.

Many people may think that building and maintaining brand equity is solely the responsibility

of brand managers, but it is actually a cross-functional team effort. Financial managers are

important because they can fully analyze the costs of maintaining and building brand equity.

For example, launching a new brand is extremely consuming in terms of money and time. It

may be more cost effective to extend a current brand than introduce a new brand. Marketing

research is critical for many obvious reasons. It develops most, if not all, of the research and

data that companies will use for deciding strategic issues. Marketing research can also help

determine how brand equity is actually measured. Once a definition of brand equity is

established, the responsibility of tracking.

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The World Strongest Brand Share 10 Attributes

The brand excels at delivering the benefits consumers truly desire.

The brand stays relevant.

The pricing strategy is based on consumer perceptions of value.

The brand is properly positioned.

The brand is consistent.

The brand portfolio and hierarchy makes sense.

The brand makes use of and co-ordinates a full repertoire of marketing activities to

build equity.

The brand is given proper, sustained support.

The brand’s manager understands what the brand means to customers.

The company monitors source of brand equity.

Branding benefits buyers as well as sellers in the following manner

To Buyer:

Help buyers identify the product that they like/dislike.

Identify marketer

Helps reduce the time needed for purchase.

Helps buyers evaluate quality of products especially if unable to judge products

characteristics.

Helps reduce buyers’ perceived risk of purchase.

Buyer may derive a psychological reward from owning the brand, i.e., Rolex or

Mercedes.

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To Seller:

Differentiate product offering from competitors

Helps segment market by creating tailored images, i.e., Contact lenses

Brand identifies the companies’ products making repeat purchases easier for

customers.

Reduce price comparisons

Brand helps firm introduce a new product that carries the name of one or more of its

existing products...half as much as using a new brand, lower co. designs, advertising

and promotional costs. Example, BPL telephones.

Easier cooperation with intermediaries with well known brands

Facilitates promotional efforts.

Helps foster brand loyalty helping to stabilize market share.

Firms may be able to charge a premium for the brand.

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Consumer is a broad label that refers to any individuals or households that use

goods and services generated within the economy

What is Consumer Buying Behavior?

Introduction to Consumer Behaviors

The study of Consumer Behaviors is quite complex, because of many variables involved and

their tendency to interact with & influence each other. These variables are divided into three

major sections that have been identified as the most important general influences on

Consumer Behaviors. Imagine three concentric circles, one at the outer most, one in the

middle & one at the inner most, and they represent the following:

External Environmental Variables Influencing Behaviour : These are the factors

controlled by external environments like the following form the basis of external

influences over the mind of a customer (outer circle) :

1. Culture, and Sub-culture,

2. Social Class, and Social Group,

3. Family, and Inter-Personal Influences,

4. Other Influences (which are not categorized by any of the above six, like

geographical, political, economical, religious environment, etc.).

Individual Determinants of Behavior: Major individual determinants of Consumer

Behavior are portrayed in the middle ring. These are the human mind and its

attributes. These variables are personal in nature and they are influenced by the above

set of external factors and in turn influence the way consumers proceed thro’ a

decision making process regarding products & services. They are:

1. Personality & Self-concept,

2. Motivation & Involvement,

3. Perception & Information Processing,

4. Learning & Memory,

5. Attitudes.

The Consumer Decision Making Process: The buying decision comes as a product of

the complex interaction of the external factors and the personal attributes. The inner

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most circle denotes the consumer decision making process regarding products &

services, whose major steps are :

1. Problem Recognition,

2. Information Search,

3. Evaluation of Application,

4. Purchase Decision,

5. Post-Purchase Behavior.

Marketers are frequently uncertain about the variables that are at play influencing &

affecting consumers. Sometimes this occurs because they don’t clearly understand the

extent of variables that might be having an influence. The details of all external,

internal, environmental, economical etc. are discussed above. Sometimes some

variables are not directly observable. Other times variables are known to the

marketers but their exact nature & relative strength of influence is not apparent. In

these circumstances, it is useful to understand the above mentioned concepts and how

the consumers behave, so that their decision making process can be predicted to a

reasonable extent. The human mind being as complex as it is, the understanding of the

buying behavior of the consumers becomes a continuous activity of application of

various theories & concepts by the marketers.

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The Consumer Behaviors Theory

An understanding of how the theory of consumer behavior and its application tools

evolved over the years will enable us to appreciate the validity of the theory and give us a

guidance in its practical application. Consumer behavior, like all human behavior is very

complex. But the consumer behavior theory, like all theories is a simplified & abstract

representation of reality. The more simplified picture of consumers provided by the

theory helps us enormously to understand the consumers. It not only helps us to think

about consumers, but also provides us with a language to talk about them. This language

is very useful, because to be effective in an organization – for profit or non-profit – one

has to persuade others to accept his ideas. And in fact, lack of this language has been one

of the greatest drawback of the modern marketers.

Market Research or Marketing Research (MR) has been developing since

“MARKETING” which brings together all customer elements, grew out of the concept of

“SALES” in the early fifties. The theory of consumer behavior draws heavily upon the

famous psychologist Sigmund Freud, particularly with respect to the emotional,

psychological, mental, subjective or non-utilitarian aspects of buying decision or behavior

of a consumer. The theory represents the hidden order in this very complex activity,

which we call consumer behavior. On the surface, this highly complex & varied display

of behavior by consumers seems essentially unexplained. But slowly as the theory

develops.

Now, what is the magic stuff called consumer behavior theory that does all these

wonderful things. It’s not just a theory, as explained earlier, but more than that. It helps us

to make better marketing decisions for profit & non-profit organizations. Thus we can

examine the characteristics of a theory that enables us to do so. Researchers G Zaltman

and M Wallendorf have came out with the most important attributes of a good & sound

theory, after very close and careful thought.

These are the following :

A theory which does both: explains how consumers buy & predicts what consumers

will buy.

It unifies previously unrelated areas of knowledge, for example, it relates to

information that consumers get from advertising so as to decide what brands they buy.

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The theory is simple. If not, it can be so complex that we can’t understand well

enough to apply it to our practical problems.

It is testable so that we can verify whether the theory is valid and therefore

dependable.

Implied in the previous characteristic, it is supported by the facts. This means, to lay

the theory up against data describing how consumers buy in the market and thereby

determine if the facts confirm the theory. If they don’t, then either the theory should

be modified till the facts do verify it or abandon the theory.

The theory is general, which means that it can be applied to a wide range of products

& services. If it is not, then it won’t be very useful.

It has heuristic value, meaning that it poses new questions for us that had not been

previously asked. While trying to answer these questions, new knowledge is created

and that becomes the part of the theory.

It is internally consistent. This means that the theory is internally free from logical in

congruencies or else the prediction will be doubtful & flawed. Lack of this quality

will make the theory a dangerous tool.

It is original. If not, it adds little to the existing knowledge.

It is plausible. If not, it can’t be seen by others as making any sense, and hence, they

will not likely to accept the theory and so it won’t be useful.

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Definitions:

Consumer Behavior (or Buyer Behavior) is broadly defined by various scholars & researchers

as:

It’s the behavior displayed by the consumers during the acquisition, consumption and

disposition of products, services, time and ideas by decision making units.

It is the body of knowledge which studies various aspects of purchase and

consumption of products and services by individuals with various social and

psychological variables at play.

The behavior that the consumers display in searching for, purchasing, using,

evaluating and disposing of products and services that they expect will satisfy their

needs.

The process and activities people engage in when searching for, selecting, purchasing,

using, evaluating, and disposing of products and services so as to satisfy their needs

and desires.

The activities directly involved in obtaining, consuming, and disposing of products

and services, including the decision processes that precede and follow these actions.

The American Marketing Association (AMA) defines consumer behavior as “The

dynamic interaction of cognition, behavior & environmental events by which human

beings conduct the exchange aspect of their lives.

The study of consumer behavior involves search, evaluation, purchase, consumption and

post purchase behavior of the consumers and includes the disposal of purchased products

keeping environment and personal characteristics in mind.

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Definition of Buying Behavior:

Buying Behavior is the decision processes and acts of people involved in buying and using

products.

Need to understand:

• Why consumers make the purchases that they make?

• What factors influence consumer purchases?

• The changing factors in our society.

Consumer Buying Behavior refers to the buying behavior of the ultimate consumer. A firm

needs to analyze buying behavior for:

Buyer’s reactions to a firms marketing strategy has a great impact on the firm’s

success.

The marketing concept stresses that a firm should create a Marketing Mix (MM) that

satisfies (gives utility to) customers, therefore need to analyze the what, where, when

and how consumers buy.

Marketers can better predict how consumers will respond to marketing strategies.

Factors influencing consumer behavior

Consumer purchases are influenced strongly by or there are four factors.

01. Cultural Factor

02. Social Factor

03. Personal Factor

04. Psychological Factor.

01. Cultural Factor:-

• Cultural factor divided into three sub factors (i) Culture (ii) Sub Culture (iii) Social

Class

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Culture:-

The set of basic values perceptions, wants, and behaviors learned by a member of

society from family and other important institutions. Culture is the most basic

cause of a person’s wants and behavior. Every group or society has a culture, and

cultural influences on buying behavior may vary greatly from country to country.

Sub Culture :-

A group of people with shared value systems based on common life experiences

and situations.

Each culture contains smaller sub cultures a group of people with shared value

system based on common life experiences and situations. Sub culture includes

nationalities, religions, racial group and geographic regions. Many sub culture

make up important market segments and marketers often design products.

Social Class:- A

Almost every society has some form of social structure; social classes are

society’s relatively permanent and ordered divisions whose members share

similar values, interests and behavior.

Social Factors:-

A consumer’s behavior also is influenced by social factors, such as the (i)

Groups (ii) Family (iii) Roles and status

Groups :-

Two or more people who interact to accomplish individual or mutual goals.

A person’s behaviors are influenced by many small groups. Groups that have a direct

influence and to which a person belongs are called membership groups.

Some are primary groups includes family, friends, neighbors and coworkers. Some

are secondary groups, which are more formal and have less regular interaction. These

include organizations like religious groups, professional association and trade unions.

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Family:- Family members can strongly influence buyer behavior. The family

is the most important consumer buying organization society and it has been

researched extensively. Marketers are interested in the roles, and influence of

the husband, wife and children on the purchase of different products and

services.

Roles and Status :-

A person belongs to many groups, family, clubs, and organizations.

The person’s position in each group can be defined in terms of both role and status.

o For example. M & “X” plays the role of father, in his family he plays the role

of husband, in his company, he plays the role of manager, etc. A Role consists

of the activities people are expected to perform according to the persons

around them.

Personal Factors:-

It includes

i) Age and life cycle stage

ii) Occupation

iii) Economic situation

iv) Life Style

v) Personality and self concept.

Psychological Factors:-

It includes these Factors.

i) Motivation

ii) Perception

iii) Learning

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Chapter - 03Chapter - 03

Review of LiteratureReview of Literature

Brand Preference

“Customers buying products are buying utility, function, and performance as much as

image and status” (Terpstra and Sarathy, 1997, p. 375). Actually, Customer merchandise has

implications more than their utilitarian, functional, and commercial significance

(Czikszentmihalyi and Rochberg-Halton, 1981; Ericksen, 1996; Leigh and Gabel, 1992;

Levy, 1959; Mick, 1986). Consumers do not “consume products for their material utilities but

consume the symbolic meaning of those products as portrayed in their images” (Elliot, 1997,

p. 286). Therefore, the acquired goods are not only “bundles of attributes that yield particular

benefits” (Holt, 1995, p. 1) but also indications of symbolic meanings to the public.

Consumers are more likely to use brands to express how they are either similar to or different

from people of their in-group (Markus and Kitayama, 1991).

Bhat and Reddy (1998) also reported that brands have practical and emblematic

importance for consumers. The emblematic importance, which is attached to brands, is often

broadcasted via the use and consumption of brands (Gottdeiner, 1985; McCracken, 1986).

Consequently, there seems to be a noteworthy relationship between brand images, consistent

with the emblematic importance of brands, and consumers’ self images (Zinkham and Hong,

1991). Individuals are more likely to buy brands whose personalities intimately match their

own self images (Schiffman and Kanuk, 2000). Similarly, consumers express themselves by

selecting brands whose personalities are recognized to be consistent with their own

personalities (Aaker, 1999; Kassarjian, 1971; Sirgy, 1982).

In many circumstances, consumers’ self image influences his/her purchase decisions

(Zinkham and Hong, 1991) In other words, consumers use products to illustrate, maintain,

and reinforce their self concepts to themselves (Sirgy, 1982; Wallendorf and Arnould, 1988;

Zinkham and Hong, 1991). Therefore, “purchase and consumption are good vehicles for self-

expression” (Jamal and Goode, 2001, p. 483).

Previous research indicated that self image/self expression affect consumers’ product

preferences and their purchase intentions (Ericksen, 1996; Mehta, 1999). For example,

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Ericksen (1996) found a significant relationship between self image and intention to buy an

American automobile (Ford Escort). Based on this finding, it might be inferred that

“individuals prefer brands that have images compatible with their perceptions of self” (Jamal

and Goode, 2001, p. 483; Belk, et. al., 1982; Ericksen, 1996; Solomon, 1983; Zinkham and

Hong, 1991). Moreover, this self image consistency strengthen positive attitude toward

products and brands (Ericksen, 1996; Sirgy, 1982, 1985, 1991; Sirgy, et. al., 1997).

Specifically, “the more similar a consumer’s self-image is to the brand’s image, the more

favorable their evaluations of that brand should be” (Graeff, 1996, p. 5).

Brand Personality

Contrary to product-related attributes, which refer to be performance-oriented for

customers, brand personality seems to be representative/self-expressive oriented (Keller,

1993). Brand personality refers to “the set of human characteristics associated with a brand”

(Aaker, 1997, p. 347). Moreover, researchers found that brand personality facilitates a

consumer to articulate his/her self (Belk, 1988), an ideal self (Malhotra, 1988), or exact

aspects of the self (Kleine, Kleine, and Kerman, 1993) via the use of a brand. Additionally,

this concept was the essential determinant of consumer preference and usage (Biel, 1993).

Brand personality can be shaped and influenced by any direct/indirect contact that the

consumer has with the brand (Plummer, 1985). The direct influences included the brand’s

user imagery, which is defined as “the set of human characteristics associated with the typical

user of a brand” (Aaker, 1997, p. 348); the firm’s workers and/or boss; and the brand’s

endorsers. On the other hand, the indirect influences contained product-related features,

product category relationships, brand name, mark or emblem, and other marketing mix

elements (Batra, Lehmann, and Singh, 1993).

Moreover, according to Levy (1959, p. 12), brand personality consisted of

demographic characteristics such as gender (“Usually it is hard to evade thinking of

inanimate things as male or female”), age (“Just as most, people usually recognize whether

something is addressed to them as a man or a woman, so are they sensitive to symbols of

age”), and class (“The possession of mink is hardly a matter of winter warmth alone”). Some

examples are provided as follows. First, in the tobacco industry, “Virginia Slims tends to be

thought of feminine, whereas Marlboro tends to perceived as masculine” (Aaker, 1997, p.

348). Second, in the pc business, “Apple is considered to be young, and IBM is considered to

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be older” (Aaker, 1997, p. 348). Third, based on the various pricing policies in relation to

different department stores, “Saks Fifth Avenue is perceived as upper class, whereas K-mart

is perceived as blue collar” (Aaker, 1997, p. 348).

Customer Perceived Value

Value has been recognized as “the fundamental basis for all marketing activity”

(Halbrook, 1994, p. 22). Value has also been stated as “a cognitive-based construct which

captures any benefit-sacrifice discrepancy in much the same way disconfirmation does for

variations between expectations and perceived performance” (Patterson and Spreng, 1997, p.

421). Therefore, it is the outcome of a cognitive assessment procedure. Moreover, it is an

affective evaluative reaction (Oliver, 1996).

Customer perceived value in commerce marketplace was defined as “the trade-off

between the multiple benefits and sacrifices of a supplier’s offering, as perceived by key

decision-makers in the customer’s organization, and taking into consideration the available

alternative suppliers’ offerings in a specific use situation” (Eggert and Ulaga, 2002, p. 110).

That is, there existed three elements in this definition: “(1) the multiple components of value,

(2) the subjectivity of value perceptions and (3) the importance of competition” (Eggert and

Ulaga, 2002, p. 109).

First of all, the multiple benefits refer to a mixture of product/service attributes and/or

technological support available related to a specific use condition (Monroe, 1990). The

multiple sacrifices were occasionally illustrated in monetary forms (Anderson, et al., 1993).

Secondly, customers’ perceived value is subjective, not objective (Kortge and Okonkwo,

1993). In other words, different customers might have a variety of perceived values for

consuming the same product/service. Thirdly, customers’ perceived value is associated with

competition on the market. Competitors generate sustainable competitive advantage by

means of bringing a better trade-off between utilities and sacrifice in a merchandise/service.

Alternatively, customer perceived value was consisted of a “take” factor- the benefits

a purchaser obtained from the vendor’s contribution- and a “give” factor- the buyer’s costs

(financial and/or non-monetary) of receiving the offering (Dodds, 1991; Zeithmal, 1988).

Even much of the precedent studies have emphasized product quality as the primary “take”

factor and price as the “give” factor (Grewal et al., 1998; Lichtenstein, Netemeyer, and

Burton, 1990; Zeithmal, 1988). But, “service is also a logical driver of perceived value”

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(Parasuraman and Grewal, 2000, p. 169). For the reason that outstanding before/after sale

services provided by the seller really increase the benefits obtained (the take factor) and also

“decrease the buyer’s non-monetary costs, such as time, effort, and mental stress” (the give

factor) (Parasuraman and Grewal, 2000, p. 169). Consequently, customer perceived value

was composed of “service quality, product quality, and price” (Parasuraman and Grewal,

2000, p. 169).

1. Service quality

Perceived service quality was defined as the discrepancy between “expected quality

and experienced quality” (Gronroos, 2000, p. 67). Expected quality refers to the expectations

of the customer; experienced quality is “the outcome of a series of internal decisions and

activities” (Gronroos, 2000, p. 101). In other words, customers’ subjectivity has a significant

influence on perceived service.

Based on a concrete background of empirical and conceptual research, Gronroos

(2000, p. 81) provided a list of The Seven Criteria of Good Perceived Service Quality:

“professionalism and skills” (i.e., service providers have required knowledge to offer skills in

order to solve customers’ problems in a professional way), “attitudes and behavior” (i.e.,

service providers are considerate of/friendly to customers), “accessibility and flexibility” (i.e.,

service providers are easy and adaptive for customers to reach), “reliability and

trustworthiness” (i.e., service providers are dependable and honorable), “service recovery”

(i.e., service providers are willing to correct mistakes as soon as they can), “serviscape” (i.e.,

customers feel comfortable in the environment related to the service process), “reputation and

credibility” (i.e., service providers can be trusted by customers).

2. Product quality

Generally speaking, people buy products to satisfy needs and wants. That is,

consumers would like to obtain a mixture of utilities when they procure items for

consumption, and different customers seem to acquire a variety of benefits from the same

kind of goods. In order to supply the benefits for consumers, marketers need to successfully

incorporate the components that constitute a product. These components include “product

features (quality, design, branding, and packaging) and customer service (purchase services

and usage services)” (Bearden, Ingram, and LaForge, 2001, p. 185). Product quality refers to

“how well a product does what it is supposed to do as defined by the customer” (Bearden,

Ingram, and LaForge, 2001, p. 186).

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3. Price

The price of a product/service can be analyzed associated with customers’ quality

expectations and/or their past experiences. If the price is judged too expensive, consumers

might not purchase. A low price policy causes poor positioning and neglected opportunities.

However, price appears to be a standard for quality in some circumstances. “A higher price

level equals a better quality in the minds of customers, especially when the service is highly

intangible” (Gronroos, 2000, p. 80).

Conduct a Review of the Branding Literature relating to brand imageConduct a Review of the Branding Literature relating to brand image

Brand Image

Introduction

The concept of brand image has been very significant to consumer behaviour from post

1950’s. As Aaker and Keller confirmed in Hsieh’s study that, “brand image has been

considered a vital part of a firm’s marketing program, not only because it serves as a

foundation for tactical marketing mix issues but also because it plays an integral role in

building long term brand-equity” (1990).

Definition

Earlier definitions of brand image are presented in broad terms by Dobni (1990) who put

forward the following writers understanding of brand image. Newman stated it as “everything

the people associate with the brand” (1957). Reynolds (1965) confirms that an image was

centred on drawing a few key beliefs from a vast variety of sources, thus creating your own

impression based on the brand. Herzog’s concurs that brand image was “the sum of the total

impressions.” (1973). Indeed, such definitions all concur together; echoed by the words of

Levy who stated that “a brand image is a constellation of pictures and ideas in people’s minds

that sum up their knowledge of the brand and their main attitudes towards it” (1978). A more

recent insight into brand image was added by Woodside who “defined image as the degree of

positive or negative affect associated with psychological object” (Reid, 2001).

From these definitions a clear trend is appearing with regard to the perception of brand image

with key figures around the mid-nineteen hundreds, supporting a collective view that an

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individual takes in a collaboration of ideas that the company puts forward as a representation

of themselves. This allows them to draw a clear conclusion of a company from a few certain

points which strike a cord with the individuals.

Theory behind brand image

According to Tyler (1957), there are three approaches to brand image: Subjective, Objective

and Literal.

The first type, is a subjective image, this is when a potential customer hears or sees the brand

name/logo and feel obliged to purchase the product or service, despite a lack of

understanding as to why this is the case. The case simply relates to how the brand is

perceived as significant to an individual’s self-consciousness.

The second type of brand image is the objective form which is the attempt to generate an

emotional need for the product, leaving you with the feeling that you need to purchase the

product so as to satisfy this need.

The third is literal image, i.e. a logo which represents a company. This implies that upon

seeing this picture/logo, the name of the company does not need to be uttered as the picture

tells the consumer the whole story e.g. Nike with the tick or McDonalds with the golden

arches. Evidently, the approach used to obtain and sustain a brand image will vary upon

several factors as reflected by the analysis presented by Tyler.

Oxenfeldt and Swann’s idea was that the brand image should allow the company to establish

its position within its market segment, protecting it from competition, thus allowing them to

build upon this with market share growth (Park et al, 1986).

Moreover Park et al (1986) put forward in Bhat’s article that the importance of establishing a

brand image relevant to its market segment in which it is based, is significant so as to

ascertain a strong brand position, help create a barrier to entry for potential competitors: thus

raise the brands performance in the market.

Further, Meenaghan stated that “at the product/brand level the components of identity are in

effect the elements of the marketing mix, which combine to form the image of the brand in

the mind of the consumer” (1995). From this, it is clear that to gain a strong brand image, one

needs to exploit all areas of the marketing mix to achieve what Oxenfeldt and Swann stressed

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and that brand image is the key component in establishing market dominance. Also,

Krishman (1996) in Faircloth’s assessment with the aid of the Landor survey discovered that

there is a strong correlation between brand equity and brand image. The stronger the brand

equity, the stronger the brand image and vice versa.

Reid’s (2001) understanding of brand image concerns the product of interaction involving the

consumer’s specific experience with a certain brand, helped by advertising which reveals

how the brand is to be understood and used, predominantly for brands that contend at parity.

Another contemporary understanding of brand image was put forward by Hsieh (2002), who

felt that building a brand image based on the identified benefit-based image dimensions

consisted of a set of benefit brand associations. This helped consumers understand with

clarity what a brand can do for them-symbolically, economically, sensorial or as a utility.

White and Hsieh (2002) seem to recognise the key importance that advertising plays in

promoting the elements of a brand image thus differentiating the brand from rival brands,

giving them a competitive advantage.

To summarise, it is plain to see that these academics are in complete agreement that one of

the key attributes of a company, if not the key attribute, is the brand image. It is evident that

there is a clear link between brand image and market share, as depicted by Krishman’s

research. In addition, establishing a strong brand image is indeed a powerful way of

developing market power, which consequently helps to create a tight control over its position

within the market. Due to barriers to entry, a rounded marketing plan focussing on all aspects

of the marketing mix; this also helps to retain a consistent consumer interest.

Brand image: practical example

In this section we will relate how brand image is encompassed in modern organisations and

how they use this as a comparative advantage over there rivals to ensure that they keep there

competitive edge.

Manchester United

In the Brand Strategy journal, the players’ were seen to be key to any clubs brand image. The

actions of players’ and the perception by supporters is hence key to brand image. For

example, ex-Man Utd David Beckham opened the Manchester Commonwealth Games

wearing an Adidas sweatshirt. These images were then broadcast across the globe and this

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was much more powerful then his endorsement through advertising. (Brand Strategy briefing:

Saving face of sponsorship).

These sort of images enable organisation’s such as Man Utd to develop into icons which

according to Douglas B. Holt is one step further than brand image, as ‘they succeed because

they forge a deep connection with the culture. In essence, they compete for culture share.’

This can clearly be applied to industries, like, the football industries, as many fans have a

strong link between them and their club i.e. it is part of their culture.

Analysis of Manchester United’s Brand

Introduction

Manchester United has excelled in the modern game of Football and its activities away from

the pitch. It has existed for over a century now and has grown during this period from a small

club into a global phenomenon. The strategy of Manchester United in building and

sustaining its brand image has been achieved by focusing on the premier football team, which

sits at the centre of the business. Indeed, it is crucial that all areas of the marketing mix are

exploited to help establish strong market dominance and a sustainable brand image, hence

this marketing principle will be central to the analysis of Manchester United’s brand image.

Manchester United’s brand image will be critically assessed, paying particular attention to the

way in which they have utilised various marketing communications to sustain their image.

Moreover, by presenting a timeline of Manchester United’s marketing practices will allow to

discriminate as to whether they have been successful or not.

Marketing Mix

Promotion:

Manchester United has established a range of global, commercial partnerships with certain

blue chip firms such as Vodafone and Nike. Indeed this has helped put Manchester United on

the global scene. Nike has launched their new Cool Motion double layer kit, promoted by

many of the players such as Scholes and Ferdinand, wearing Nike Boots, which have helped

connect the famous market leader with this Premier Football team. Further, legends such as

Cantona have helped create this maverick image for Manchester United, but also having such

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a combination of powerful sponsors has brought the team a reputable image. (ManUtd.com,

2004a).

The extent of success related to brand image will now be explored.

Nike

Worldwide sports giant Nike have become the shirt sponsors of Man United since 2002. The

deal is unique in terms of its value (£300 million), length (13 years) and structure. The

‘literal’ image of the Nike “tick” presented to customers on the Man United replica shirts has

helped boost shirt sales over the last four years. The relationship between the two

companies’, centres on combining the core activity of Football and the strength of United’s

global fan base with Nike’s expertise in sports product and integrated marketing campaigns.

Chairman Sir Roy Gardener feels that ‘this partnership with Nike will undoubtedly increase

the brand equity of Manchester United and thus enhance the brand image of the club

globally.’(ManUtd.com, 2004b). By associating itself with companies who are perceived as

leaders in their respective markets has allowed an increase in brand awareness as well as a

boost in brand equity. As referred by Krishman (1996) who cited the strong correlation

between brand equity and brand image.

Nike however have been criticised for a lack of human rights in many of its factories in South

East Asia. In particular, Oxfam in March 2000 alleged that Nike had not conformed to a code

of conduct in their subcontracted Par Garment factory in Thailand. Although Nike denies

accusations, ignoring cases and not realising the crisis of poverty and underpaid children; the

result has been a bad outlook for Nike. Consequently, such negativity has damaged the

relationship with Manchester United and their relationship with their customers. Moreover, in

October 2000, Paul Kenyon reported in the BBC that two girls were found in a factory in

Cambodia under the legal working age of 15. Despite recent attempts in October 2003 to

organise unionisation in Sri Lanka, Nike are still under the spotlight which could tarnish the

prosperity of their influential brand image with Manchester United.

Media

Indeed, the annual report (Man Utd Annual PLC Report, 2003) included that “the business of

Manchester United is built on three strong foundations of football, fans, and media. Football

is the core activity; the fans are the greatest asset and the media the most effective means of

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bringing the two together.” This comment is an indication of the paramount importance the

media has played in building and sustaining the Manchester United brand. In 2003, the

media contributed 37% towards total revenue (Man United Annual Report, 2003). However,

if Manchester United’s partnerships with the likes of Nike are in controversy, this can

determinately affect the image Manchester United want to sustain.

Product

Merchandise

In the early nineties, the extent of the United range was very narrow (consisting of goods

such as scarves, mugs and hats), but now the product line is inexhaustible, including

everything possible from wallpaper in children’s bedrooms to cuddly toys, soft drinks and

underwear.

As the popularity of the Internet has come to prominence, this has acted as a further

opportunity of extending the brand image around the globe, providing new found supporters

in East-Asia and America with the opportunity to purchase their goods. Manchester United

have proposed tactics to sell their brand image in countries where popularity is however

limited, such as America and the Far-East.

Place

Old Trafford Club Stadium

The club recognised at an early stage in the brand’s development, the potential earning power

of the club’s home ground, Old Trafford with 68,000 supporters walking through the gates on

any given match day. Currently shown in Manchester United financial data is that 36% of the

club’s revenue is generated from match days. (ManUtd.com, 2004c). Reid (2001) stressed

that the brand has to be experienced, therefore by providing a well equipped stadium, this

helps attract a greater influx of foreign visitors.

Price

The use of price can be viewed as the sole negative factor of Manchester United brand image.

Exploitation is evident in the form of the fans that pay outrageous prices for gate admissions

(£34) and replica shirts (£45) and via their business partners, the exploitation of children in

the sweatshops of Asia as exposed by the BBC’s current affairs flagship Panorama. While the

clubs players such as Ferdinand, Giggs and Keane are paid so handsomely to wear the

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products of leading sports manufacturers the workers in the sweatshops of Indonesia and

other Asian countries are earning 72 pence for 24 hours of work. (Skynews.com, 2002). The

enormous difference between what the goods cost to manufacture and their price is the reason

behind the clubs huge profits and enormous transfer kitty. It is clear that there is a large

disparity between with the wealth of Manchester United and the workers who make the

products so crucial to the global spread of the brand image.

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Chapter - 04Chapter - 04

RESEARCH METHODOLOGYRESEARCH METHODOLOGY

INTRODUCTIONINTRODUCTION

Research refers to a search for knowledge. It is a systematic method of collecting and

recording the facts in the form of numerical data relevant to the formulated problem and

arriving at certain conclusions over the problem based on collected data.

Thus formulation of the problem is the first and foremost step in the research process

followed by the collection, recording, tabulation and analysis and drawing the conclusions.

The problem formulation starts with defining the problem or number of problems in the

functional area. To detect the functional area and locate the exact problem is most important

part of any research as the whole research is based on the problem.

According to Clifford Woody research comprises defining and redefining problems,

formulating hypothesis or suggested solutions: collecting, organizing and evaluating data:

making deductions and reaching conclusions: and at last carefully testing the conclusions to

determine whether they fit the formulating hypothesis.

Research can be defined as “the manipulation of things, concepts or symbols for the

purpose of generalizing to extend, correct or verify knowledge, whether that knowledge aids

in construction of theory or in the practice of an art”

In short, the search for knowledge through objective and systematic method of finding

solution to a problem is research.

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DRAFTING QUESTIONNAIREDRAFTING QUESTIONNAIRE

The questionnaire is considered as the most important thing in a survey operation. Hence it

should be carefully constructed. Structured questionnaire consist of only fixed alternative

questions. Such type of questionnaire is inexpensive to analysis and easy to administer. All

questions are closed ended.

S. No. Particulars Description

1. Project Title A Study of Brand Preference towards MenA Study of Brand Preference towards Men

Wear Special Reference to NimbaheraWear Special Reference to Nimbahera

2. Sample Size 50

3. Sample Unit Shopkeeper, Service men, students,

transporter etc.

4. Area Covered Nimbahera

5. Sampling Procedure Random Sampling

6. Research Design Exploratory

7. Data Collection Method Survey

8. Research Instrument Questionnaire

9. Type of Questionnaire Structured

10. Type of Questions Close Ended, Open Ended Questions

11. Method of Survey Sample Survey

12. Type of Sampling Judgement Sampling

SAMPLINGSAMPLING

It was divided into following parts:

Sampling universeSampling universe

All the employees are the sampling universe for the research.

Sampling techniqueSampling technique

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Judgmental sampling Judgmental sampling

Sample was taken on judgmental basis. The advantage of sampling are that it is much less

costly, quicker and analysis will become easier. Sample size taken was 100 employees.

DATA COLLECTIONDATA COLLECTION

The task of data collection begins after the research problem has been defined and

research design chalked out. While deciding the method of data collection to be used for

the study, the researcher should keep in mind two types of data viz. Primary and

secondary data.

Primary DataPrimary Data

The primary data are those, which are collected afresh and for the first time and

thus happen to be original in character. The primary data were collected through well-

designed and structured questionnaires based on the objectives.

Secondary Data:Secondary Data:

The secondary data are those, which have already been collected by someone else

and passed through statistical process. The secondary data required of the research was

collected through various newspapers, and Internet etc.

Importance of research work:Importance of research work:

The purpose of this study is to examine the impacts of demographic Factors and

footwear benefits sought on consumer purchasing outcomes in the urban market.

Research results show that age, household size, education, occupation and income

significantly affect amount of money spent, pairs of footwear purchased and purchase

plans, but not average price paid. Gender and residence of respondent were not

significantly related to purchasing outcomes.

The study identified two groups of shoppers seeking significantly different benefits

in purchasing footwear products: the functional shoppers and the alpha shoppers. As

compared to the functional shoppers, alpha shoppers purchased more pairs of

footwear, paid higher price for footwear and spent larger HRK1 amount on footwear.

The results are indicative for the segmentation strategy in the footwear market.

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The research also helps footwear manufacturers and retailers to better target their

consumer segments

RESEARCH OBJECTIVERESEARCH OBJECTIVE

The research study tends to follow and achieve specific objectives.

The objectives of this particular study are:-

To know the personal views of “Nimbahera” people regarding choices among various

branded wear.

To study which branded wear is mostly preferred by people as per their choices.

Comparison between various branded wear..

Find out factor influencing the people at the time of purchasing Branded cloth.

QUALITY, DURABILITY, VARIETY, PRICE.

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Data Analysis & InterpretationData Analysis & Interpretation

1.1. Do you buy branded Pant & Shirts?

SR.NO. PARTICULARS NO. OF RESPONDENTS PERCENTAGE1 Yes 48 96%

3 No 2 4%

5 Total 50 100%

INTERPRETATION:

The above table indicates that, 96% people wearing branded cloth & 4% people not

choose branded cloths.

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1. Classification of users based on Annual Income.

SR.NO. PARTICULARS NO. OF RESPONDENTS

PERCENTAGE

1 Less than Rs. 1Lac 15 30%

3 Rs. 1 – 3 Lac 35 70%

5 Total 50 100%

       

INTERPRETATION:

The above table indicates that, 30% people earn in a year 1 lacs rupee and 70% people

are earn 1 to 3 lacs per annum.

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2. Type of men’s clothing is likely to be purchased.

SR.NO. PARTICULARS NO. OF RESPONDENTS

PERCENTAGE

1 Shirt 14 28%

2 Pant 12 24%

3 T-Shirt 5 10%

4 Trouser 8 16%

5 Jeans 8 16%

6 Cargo Jeans 2 4%

7 Nero Jeans 1 2%

8 Total 50 100%

INTERPRETATION:

The above table indicates that, 24% people purchase Pant, 28% purchase shirt, 16%

purchase Jeans, 16% purchase Trouser, 4% Purchase Cargo Jeans & 2% purchase Nero Jenas.

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3. Brand you would prefer.

SR.NO. PARTICULARS NO. OF RESPONDENTS PERCENTAGE1 KOUTONS 17 34%

2 PETER ENGLAND 12 24%

3 ALLEN COOPER 6 12%

4 CHARLY OUTLOW 7 14%

5 JOHN PLAYER 3 6%

6 PRIKNIT 2 4%

7 COTTON COUNTY 1 2%

8 MONTE CARLO 2 4%

9 Total 50 100%

INTERPRETATION:

The above table indicates that, 35% people prefer KOUTONS, 25% prefer PETER

ENGLAND, 13% prefer ALLEN COOPER, 15% prefer CHARLY OUTLOW, 6% prefer

JOHN PLAYERS.

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4. How long have you been using this brand?

SR.NO. PARTICULARS NO. OF RESPONDENTS PERCENTAGE1 0 – 1 Yrs. 8 16%

2 1 – 2 Yrs. 11 22%

3 2 – 3 Yrs. 27 54%

4 3 – 4 Yrs. 3 6%

5 Above 4 Yrs 1 2%

6 Total 50 100%

INTERPRETATION:

The above table indicates that, 54% people use the brand 2-3 yrs., 22% use 1-2 yrs.,

16% use 0-1 yrs., 6% use 3-4 yrs., 2% use above 4 yrs.

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5. Price range, you shop in this brand.

SR.NO. PARTICULARS NO. OF RESPONDENTS PERCENTAGE1 Below 1000 4 8%

2 1000-2000 18 36%

3 2000-3000 16 32%

4 3000 – 4000 8 16%

5 Above 4000 4 8%

6 Total 50 100%

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INTERPRETATION:

The above table indicates that, the different price rang which are purchased by

customer like below 1000 purchase 8%, 1000-2000 purchase 36%, 2000-3000 purchase 32%,

3000-4000 purchase 16% and above 4000 purchase 8% of the price.

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6. Brand Preference and Top of the Mind Awareness for cloth brand.

SR.NO. PARTICULARS NO. OF RESPONDENTS

PERCENTAGE

1 Extremely Satisfied 8 16%

2 Satisfied 33 66%

3 Neither Satisfied nor Dissatisfied

5 10%

4 Dissatisfied 3 6%

5 Extremely Dissatisfied 1 2%

6 Total 50 100%

INTERPRETATION:

The above table indicates that, 66% people satisfied with brand,16% people extremely

satisfied, 10% people neither satisfied nor dissatisfied, 6% people dissatisfied & 2% people

extremely dissatisfied.

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7. Factors influencing brand preference.

SR.NO. PARTICULARS NO. OF RESPONDENTS PERCENTAGE

1 Advertisement 9 18%

2 Services 17 34%

3 Quality 21 42%

4 Good words of Mouths 3 6%

5 Total 50 100%

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INTERPRETATION:

The above table indicates that, 34% people influencing through services, 18% through

advertisement, 42% through quality & 6% people influencing through good words of mouths.

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8. You feel about the product quality.

SR.NO. PARTICULARS NO. OF RESPONDENTS PERCENTAGE1 Very Good 29 58%

2 Very Poor 1 2%

3 Poor 2 4%

4 Can be improved 18 36%

5 Total 50 100%

INTERPRETATION:

The above table indicates that, 58% people feel that product is very good, 4% feel

poor, 2% feel very poor, 36% feel that can be improvement in product.

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9. How often do you change the brand preference?

SR.NO. PARTICULARS NO. OF RESPONDENTS PERCENTAGE1 Very Often 0 0%

2 Occasionally 27 54%

3 Rarely 6 12%

4 Never 17 34%

5 Total 50 100%

INTERPRETATION:

The above table indicates that, 54% people change the brand occasionally, 34%

people never change, 12% people may rarely change the product.

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10. Importance of buying a name brand.

SR.NO. PARTICULARS NO. OF RESPONDENTS PERCENTAGE1 Quality 13 26%

2 Attractive 7 14%

3 Reliable 12 24%

4 Advertisement 2 4%

5 Services 15 30%

6 Various Offers 1 2%

7 Total 50 100%

INTERPRETATION:

The above table indicates that, 26% people buying through product quality, 24%

through product reliable, 4% through company advertisement, 30% through services of

company & 2% through various offers.

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11. Consumer intention towards replacing their existing brand of Cloth.

SR.NO. PARTICULARS NO. OF RESPONDENTS PERCENTAGE1 To replace 42 84%

2 Not to replace 8 16%

3 Total 50 100%

INTERPRETATION:

The above table indicates that, 84% people want to replace the current product line &

16% people not to replace.

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12. Which brand would be your First choice?

SR.NO. PARTICULARS NO. OF RESPONDENTS PERCENTAGE1 KOUTONS 22 44%

2 PETER ENGLAND 9 18%

3 ALLEN COOPER 6 12%

4 CHARLY OUTLOW 4 8%

5 JOHN PLAYER 3 6%

6 PRIKNIT 2 4%

7 COTTON COUNTY 3 6%

8 MONTE CARLO 1 2%

9 Total 50 100%

INTERPRETATION:

The above table indicates that, 44% peoples prefer to Koutons, 18% to peter England,

4% priknit, 8% charly outlaw, 6% john player, 6% cotton county.

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13. You choose above brand.

SR.NO. PARTICULARS NO. OF RESPONDENTS PERCENTAGE1 Cloth Feting 14 28%

2 Cloth Quality 28 56%

3 Good Stitching 8 16%

4 Washing Machine Washable 0 0%

9 Total 50 100%

INTERPRETATION:

The above table indicates that, 28% choose through cloth feting, 56% through cloth

quality, 16% through good stitching.

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14. I would recommend above brand to others.

SR.NO. PARTICULARS NO. OF RESPONDENTS PERCENTAGE

1 Strongly Agree 6 12%

2 Agree 15 30%

3 Neither Agree nor Disagree 28 56%

4 Disagree 1 2%

5 Strongly disagree 0 0%

6 Total 50 100%

INTERPRETATION:

The above table indicates that, 56% people neither agrees not disagree to recommend

to other, 30% agree with above statement, 12% strongly agree & 2% people disagree.

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Finding & ConclusionFinding & Conclusion

KOUTONS has a good brand image in the existing market.

Low sales as compared to market potential,.

Peter England, Allen Cooper, Cotton County have maximum market share’s viz.

Less advertisement of the product as compared to other company.

Lack of self – enthusiasm Customer Satisfactions.

Many facilities are available to customer.

There is a need of a proper information, encouragement & motivation related to

customer.

There is a complaint from the side of retailers is that dealers deal customer directly

and sell wears on lower price, due to this customer does not go to retailers and

purchase from dealers.

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SuggestionSuggestion

The product quality must be improved

Company must reform its marketing strategies.

Company may go for reposition its brand image.

In research we found that all the costumer are accepting the repositioning of kouton to

family store

All above company must increase its range of products

All company should put effort in creating brand image by stopping the offer like buy

1 and get 4.

All company must change its image from discounted good to superior goods.

Company must makes strategies for rural market.

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BibliographyBibliography

Books Referred:

Kothari C. R. (2005) ‘RESEARCH METHODOLOGY’ New Age International

Limited, Fifth Edition

Kotler Philip & Keller Kevin. MARKETING MANAGEMENT: Pearson Prentice

Hall, New Delhi, 2006

Parry, Mark E., STRATEGIC MARKETING MANAGEMENT: Means-End

Approach, New Delhi, McGraw-Hill, 2002

Saxena Rajan, MARKETING MANAGEMENT: Tata Mcgraw, New Delhi, 2006

Kotler Philip, KOTLER ON MARKETING: Free Press, New York

Websites:-

www.koutons.com

www.peterengland.com

www.scribd.com

www.allencooper.net

www.johnplayer.com

www.cottoncounty.com

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AnnexureAnnexure

1. Do you buy branded Pant & Shirts?

Yes [ ]

No [ ]

2. Classification of users based on Annual Income.

Less than Rs. 1Lac [ ]

Rs. 1 – 3 Lac [ ]

3. What type of men’s clothing is likely to be purchased?

Shirt [ ] Pant [ ] T-Shirt [ ]

Trouser [ ] Jeans [ ] Cargo Jeans [ ]

Nero Jeans [ ]

4. Which brand you would prefer?

KOUTONS [ ] PETER ENGLAND [ ]

ALLEN COOPER [ ] CHARLY OUTLOW [ ]

JOHN PLAYER [ ] PRIKNIT [ ]

COTTON COUNTY [ ] MONTE CARLO [ ]

5. How long have you been using this brand?

0 – 1 Yrs [ ] 1 – 2 Yrs [ ]

2 – 3 Yrs [ ] 3 – 4 Yrs [ ]

Above 4 Yrs [ ]

6. What is the price range, you shop in this brand?Below 1000 [ ] 1000 – 2000 [ ]

2000 – 3000 [ ] 3000 – 4000 [ ]

Above 4000 [ ]

7. Brand Preference and Top of the Mind Awareness for cloth brand?Extremely Satisfied [ ]

Satisfied [ ]

Neither Satisfied nor Dissatisfied [ ]

Dissatisfied [ ]

Extremely Dissatisfied [ ]

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8. Factors influencing brand preference?

Advertisement [ ] Services [ ]

Quality [ ] Good words of Mouths [ ]

9. What do you feel about the product quality?

Very Good [ ] Poor [ ]

Very Poor [ ] Can be improved [ ]

10. How often do you change the brand preference?

Very Often [ ] Occasionally [ ]

Rarely [ ] Never [ ]

11. What is Importance of buying a name brand?

Quality [ ] Attractive [ ]

Reliable [ ] Advertisement [ ]

Services [ ] Various Offers [ ]

12. Consumer intention towards replacing their existing brand of Cloth?

To replace [ ] Not to replace [ ]

13. Which brand would be your First choice?

KOUTONS [ ] PETER ENGLAND [ ]

ALLEN COOPER [ ] CHARLY OUTLOW [ ]

JOHN PLAYER [ ] PRIKNIT [ ]

COTTON COUNTY [ ] MONTE CARLO [ ]

14. Why you choose above brand?

Cloth Feting [ ]

Cloth Quality [ ]

Good Stitching [ ]

Washing Machine Washable [ ]

15. I would recommend above brand to others.

Strongly Agree [ ]

Agree [ ]

Neither Agree nor Disagree [ ]

Disagree [ ]

Strongly disagree [ ]

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