ContentsINTRODUCTION...........................................................................................................................................3

HISTORY OF COUNTRY SELECTED................................................................................................................4

CULTURAL ANALYSIS....................................................................................................................................5

SOCIAL INSTITUTIONS..................................................................................................................................5

Family..........................................................................................................................................................5

Education levels in USA...............................................................................................................................6

Education level Statistics.....................................................................................................................6

Political........................................................................................................................................................7

LEGAL SYSTEM OF USA................................................................................................................................8

TRADING WITH THE UNITED STATES...........................................................................................................8

Taxes, duty and legal considerations for exports to the United States.........................9

US duty and taxes.........................................................................................................................9

PATENTS PROCESS.......................................................................................................................................9

SOCIAL ORGANIZATIONS.............................................................................................................................9

BUSINESS CUSTOMS..................................................................................................................................12

RELIGION IN THE UNITED STATES OF AMERICA.........................................................................................14

HOUSING TYPES.........................................................................................................................................15

LANGUAGE................................................................................................................................................17

ECONOMIC ANALYSIS................................................................................................................................18

Median age.......................................................................................................................................19

Age structure:..................................................................................................................................19

Birth rate..........................................................................................................................................19

Death rate.........................................................................................................................................19

Immigration.....................................................................................................................................19

Net migration rate...........................................................................................................................19

Life expectancy at birth(2009 est.)..................................................................................................19

Unemployment rate.........................................................................................................................20

Nationality........................................................................................................................................20

Transportation in USA...............................................................................................................................23

1GLOBAL EXPANSION OF FABINDIA

Rail transport.........................................................................................................................................23

Amtrak Train Service............................................................................................................................23

Cargo.....................................................................................................................................................24

Air transportation...................................................................................................................................24

Water transportation............................................................................................................................24

WORKER INTERACTIONS............................................................................................................25

INTERNATIONAL TRADE STATISTICS..........................................................................................................26

TRADE RESTRICTIONS................................................................................................................................27

CHANNEL DISTRIBUTION...........................................................................................................................28

Media........................................................................................................................................................31

MARKET AUDIT..........................................................................................................................................33

Introduction..........................................................................................................................................33

GLOBAL EXPANSION OF FABINDIA IN USA.................................................................................................35

Evaluation of the product as an Innovation as intended by the US market...............................................35

INTERNATIONAL COMPETITOR’S...............................................................................................................36

IMPLEMENTING THE GLOBAL MARKETING PLAN..................................................................................37

SWOT for FABINDIA in USA.......................................................................................................................41

Strengths...............................................................................................................................................41

Weaknesses...........................................................................................................................................41

Opportunities........................................................................................................................................41

Threats...................................................................................................................................................41

CONCLUSION.............................................................................................................................................42

BIBILIOGRAPHY:.........................................................................................................................................43

2GLOBAL EXPANSION OF FABINDIA

INTRODUCTION

FabIndia was first started as a village-based industry by John Bissell in 1960. Bissell, previously

working as a buyer for Macy's New York left his position and worked as a consultant for the

Ford foundation where he was given a two-year grant to instruct Indian villagers in making

goods for export. He firmly believed in the emerging Indian textile industry and was determined

to showcase Indian handloom textiles with a way to provide employment to traditional artisans.

The first retail store of Fabindia was opened in 1976 in New Delhi, India.

Started as an export house, Fabindia, under the guidance of current managing director William

Bissell (1993-), has emerged as a successful retail business in India, with 111 retail outlets within

the country and 6 abroad. Fabindia sells a variety of products ranging from textiles, garments,

stationery, furniture, home accessories, organic foods, and bodycare products.

Fabindia sources its products from over 15000 craft persons and artisans across India. They

support the craft traditions of India by providing a market and thereby encourage and sustain

rural employment. Today they have retail outlets in all major cities of India - 85 at last count - in

addition to international stores in Rome, Italy; Dubai, UAE and Guangzhou, China.

The products that are to be exported to the US are the textile-based product range which

include ready-to-wear garments and accessories for men, women, teenagers and children, bed,

bath, table and kitchen linen; floor coverings, upholstery fabric and curtains. Cotton, silk, wool,

grass, linen and jute are the basic fibres used. 

The Home Products range carries furniture, lighting, stationery, tableware, cane baskets

and a selection of handcrafted utility items.

3GLOBAL EXPANSION OF FABINDIA

HISTORY OF COUNTRY SELECTED

The United States of America (also referred to as the United States, the U.S., the USA,

the States, or America) is a federal constitutional republic comprising fifty states and a federal

district. The country is situated mostly in central North America, where its forty-eight

contiguous states and Washington, D.C., the capital district, lie between the Pacific and Atlantic

Oceans, bordered by Canada to the north and Mexico to the south. The state of Alaska is in the

northwest of the continent, with Canada to the east and Russia to the west across the Bering

Strait. The state of Hawaii is an archipelago in the mid-Pacific. The country also possesses

several territories in the Caribbean and Pacific.

At 3.79 million square miles (9.83 million km2) and with over 309 million people, the United

States is the third or fourth largest country by total area, and the third largest both by land

area and population. It is one of the world's most ethnically diverse and multicultural nations, the

product of large-scale immigration from many countries. The U.S. economy is the world's largest

national economy, with an estimated 2009 GDP of $14.3 trillion.

The indigenous peoples of the U.S. mainland, including Alaska Natives, are most commonly

believed to have migrated from Asia. They began arriving at least 12,000 and as many as 40,000

years ago. Some, such as the pre-Columbian Mississippian culture, developed advanced

agriculture, grand architecture, and state-level societies.

4GLOBAL EXPANSION OF FABINDIA

CULTURAL ANALYSIS

SOCIAL INSTITUTIONS

Family

The family unit is generally considered the nuclear family, and is typically small (with

exceptions among certain ethnic groups). Extended family relatives live in their own homes,

often at great distances from their children.

Individualism is prized, and this is reflected in the family unit. People are proud of their

individual accomplishments, initiative and success, and may, or may not, share those sources of

pride with their elders.

America’s 89.6 million singles head over half of America’s households - 50.3%, according to the

2006 US Census - and they have a love of media and socializing that can reward marketers who

realistically depict the unmarried lifestyle.

More racially diverse than the overall population, singles are also younger - 57% are less than 45

years old, and four in ten are younger than 35, according to “Singles in the US: the New Nuclear

Family”.

Unmarried adults - those never-married, divorced, widowed, or separated - share generational

similarities: Younger singles are comfortable with technology, for example, while older singles

focus on luxury.

About a quarter of singles are Boomers - “a lucrative and receptive market for a variety of

products, especially experience-oriented travel, luxurious or anti-aging personal care products,

spas and mind-body services, and products for their grandchildren,” according to the report.

The most significant unmarried sub-group, single parents enjoy shopping and sharing their

children’s entertainment, according to the report. And single moms, despite earning a whopping

66% less than their male counterparts concentrate more on providing for their kids materially and

emotionally.

5GLOBAL EXPANSION OF FABINDIA

Singles are more likely than married adults to watch TV, especially cable. Also, they are much

more likely to go to the movies frequently and buy or rent DVDs. They are highly receptive

towards advertising on TV, and single parents are especially open to marketing and advertising.

Education levels in USA

Education in the United States is mainly provided by the public sector, with control and funding

coming from three levels: federal, state and local. Child education is compulsory.

Public education is universally available. School curricula, funding, teaching, and other policies

are set through locally elected school boards with jurisdiction over school districts with many

directives from state legislatures..

The ages for compulsory education vary by state. It begins from age’s five to eight and ends

from ages fourteen to eighteen.

Post-secondary education, better known as "college" in the United States, is generally governed

separately from the elementary and high school system

Education level Statistics

Among the country's adult population, over 85 percent have completed high school and

27 percent have received a bachelor's degree or higher.

The average salary for college or university graduates is greater than $51,000, exceeding

the national average of those without a high school diploma by more than $23,000,

according to a 2005 study by the U.S. Census Bureau. 

The 2010 unemployment rate for high school graduates was 10.8%; the rate for college

graduates was 4.9%.

The country has a reading literacy rate at 98% of the population over age 15, while

ranking below average in science and mathematics understanding compared to other

developed countries. 

Political

6GLOBAL EXPANSION OF FABINDIA

The United States is a federal constitutional republic, in which the President of the United

States (the head of state and head of government),Congress, and judiciary share powers reserved

to the national government, and the federal government shares sovereignty with

the state governments. Federal and state elections generally take place within a two-party system,

although this is not enshrined in law.

Political parties

The modern political party system in the United States is a two-party system dominated by

the Democratic Party and the Republican Party. These two parties have won every United States

presidential election since 1852 and have controlled the United States Congress since at least

1856. Several other third parties from time to time achieve relatively minor representation at the

national and state levels.

 

OVERVIEW OF THE UNITED STATES POLITICAL SYSTEM

The US is the oldest continuous democracy in the world. It was established in 1789, although not all features of the system were as democratic as they are now.

Key Facts

7GLOBAL EXPANSION OF FABINDIA

The US is a Federal system. This means that power is divided between a central/national government and the States. The national government is referred to as the Federal Government.

There are 50 States. A complete list is here. The list of original 13 States is here. The Federal Government has three branches/arms:

o Legislative Brancho Executive Brancho Judicial Branch

LEGAL SYSTEM OF USA

LllThe United States is renowned for having one of the most sophisticated judicial systems in the

world. Every day thousands of people, including law enforcement officers, lawyers, judges,

government officials and even accused criminals, take part in this system, hoping to settle

disputes and work for justice. What makes this system even more remarkable is that it is able to

operate successfully in a country as large and diverse as the United States. One of the keys to this

success is a balanced and carefully ordered hierarchy: Several different federal courts control

issues relating to federal law and each state has its own set of courts that can adapt to the needs

of its people.

TRADING WITH THE UNITED STATES

8GLOBAL EXPANSION OF FABINDIA

Taxes, duty and legal considerations for exports to the United States

US duty and taxes

Products may be liable to import duty. The level of duty varies for different products. Responsibility for US duty and taxes will depend on what have been agreed with the customer. To compete with local suppliers, exporter may have to quote a fully inclusive price (i.e. including all US duties) and arrange delivery to their premises.

In general, exporters do not have to pay any additional US taxes on export sales to US customers. However, if exporter establish a presence in the US, e.g. by opening a local office, exporter may become liable to US taxation. Also, if the exporter uses a local distributor their sales of his products will be subject to any state sales tax. As this is a complex area, he should take advice from an accountant with experience of US taxes. 

PATENTS PROCESS

SOCIAL ORGANIZATIONS

9GLOBAL EXPANSION OF FABINDIA

TradeMark Basics

Search Marks

File Forms Online

Check Status

Renew a Registeration

View Fee Schedule

TradeMark and appeal Board

Assignments

USA BUSINESS LIFE

The population of the United States is 300 million people of mixed races and heritage. Although the

population is predominantly of European descent, the country has been a welcoming beacon to

immigrants from virtually every country and culture in the world. English is the predominant language,

although languages from many foreign countries are spoken within cultural enclaves throughout the

U.S. The majority of American's (U.S.) are Christian.

The United States of America consists of 50 states governed on a federal level, as well as a state level.

Laws are written at both levels, and when doing business in the United States one must make sure to

meet the requirements mandated by these laws. The country is very litigious so legal resources are

available and specialists can be found to assist with any transaction.

The culture and geographic location of an area will influence how business is done. Traditionally, the

East Coast is more conservative and formal in their dress and manners than the West Coast. That

is not to say a West Coast meeting carries any less importance. The climate and lifestyle are just more

relaxed, which is reflected in the pace and informality.

Appearance

Business suit and tie are appropriate in all major cities. Wear dark colored business suits in

classic colors of gray and navy. For an important formal meeting, choose a white dress shirt, for

less formal a light blue shirt will still give you a conservative appearance.

Women should wear a suit or dress with jacket in major cities. Wearing classic clothing and

classic colors of navy, gray, ivory, and white will ensure you give a confident and conservative

appearance.

Rural areas and areas with extremely warm summers have more informal wardrobe

requirements.

Women may wear a business dress, or skirt and blouse, in rural areas.

Men may conduct business without wearing a jacket and/or tie in rural areas.

The formality of a meeting, even in rural areas, may dictate a sports jacket and tie for men. The

10GLOBAL EXPANSION OF FABINDIA

same formality will require a woman to wear a dress, possibly with a jacket.

Casual clothing is appropriate when not attending a work related meeting/dinner. Building a

casual wardrobe using classic lines and colors (navy, gray, camel, ivory and white) will give you

a look that is stylish and professional even when you are relaxing.

Clothing, whether formal or casual, should be clean and neat in appearance.

Men may generally wear jeans or khaki pants with a shirt for casual attire.

Women may wear comfortably fitting slacks with a casual shirt. Wearing jeans or shorts, even in

a casual setting, may be inappropriate for the city. It is better to err on the conservative side if

you are not sure.

Behavior 

Business conversation may take place during meals. However, many times you will find more

social conversation taking place during the actual meal.

Business meetings may be arranged as breakfast meetings, luncheon meetings, or dinner

meetings depending on time schedules and necessity. Generally a dinner, even though for

business purposes, is treated as a social meal and a time to build rapport.

Gift giving is discouraged or limited by many US companies. A gracious written note is always

appropriate and acceptable.

If you do give a gift, it should not appear to be a bribe.

An invitation for a meal or a modest gift is usually acceptable.

If you are someplace with a line or queue, go to the end and wait your turn.

Do not use or chew on a toothpick in public.

Many public places and private homes do not allow smoking. In some areas laws have been

passed to prevent smoking in public places.

11GLOBAL EXPANSION OF FABINDIA

BUSINESS CUSTOMS

American business culture is very task centered. Americans are direct and will say "no" if they

want to. It's normal for them to criticize work, performance, or persons in public so don't feel

embarrassed if you find yourself in the receiving end.

Furthermore, punctuality is considered sacred in American business culture. People are expected

to attend meetings and appointments on time and deadlines are expected to be met on the dot. Failure to

do so is often frowned upon and is seen as highly disrespectful. Being punctual and meeting deadlines

are further emphasized due to the "time is money" philosophy which is practiced by the general business

community.

Americans are willing to work long hours and overtime due to their work ethic. Office/business

hierarchy is also being practiced with stress being given on company organizational structure. However,

because of individualism in American society and business culture, the working environment is highly

competitive with emphasis on personal competence, professionalism, and individual accountability.

With regards to some business etiquettes, firm handshakes signal the start and end of business

meetings. Show of sincerity and interest is shown by maintaining direct eye contact during the initial

greeting and during important parts of a conversation. Exchanging business cards is viewed as an

ordinary or casual activity and follows no formal rules.

When you do business in the US, it is important that one pays attention to guidelines and rules

dictated by business policies, procedures, and laws. Be careful when giving gifts, since the practice is

often discouraged by many companies since the gesture can easily by misinterpreted as a bribe.

 

12GLOBAL EXPANSION OF FABINDIA

BUSINESS ETIQUETTE AND PROTOCOL

Business Dress

What is considered appropriate business attire varies by geographic region, day of the

week and industry.

In general, people in the East dress more formally, while people in the West are known

for being a bit more casual.

Executives usually dress formally regardless of which part of the country they are in.

Casual Friday is common in many companies. High technology companies often wear

casual clothes every day.

For an initial meeting, dressing conservatively is always in good taste. Women can wear

business suits, dresses or pantsuits. Men should wear a business suit unless you know the

firm to be quite casual.

It is quite common for the recipient to put your card in their wallet, which may then go in

the back pocket of their trousers. This is not an insult.

Business Meetings

Arrive on time for meetings since time and punctuality are so important to Americans. In the

Northeast and Midwest, people are extremely punctual and view it as a sign of disrespect for

someone to be late for a meeting or appointment. In the Southern and Western states, people may

be a little more relaxed, but to be safe, always arrive on time, although you may have to wait a

little before your meeting begins.

Meetings may appear relaxed, but they are taken quite seriously. If there is an agenda, it will be

followed. At the conclusion of the meeting, there will be a summary of what was decided, a list

of who will implement which facets and a list of the next steps to be taken and by whom. If you

13GLOBAL EXPANSION OF FABINDIA

make a presentation, it should be direct and to the point. Visual aids should further enhance your

case. Use statistics to back up your claims, since Americans are impressed by hard data and

evidence.

With the emphasis on controlling time, business is conducted rapidly. Expect very little small

talk before getting down to business. It is common to attempt to reach an oral agreement at the

first meeting. The emphasis is on getting a contract signed rather than building a relationship.

The relationship may develop once the first contract has been signed.

RELIGION IN THE UNITED STATES OF AMERICA

 * WORLD FACTBOOK 2002

The predominant religion in the United States is Christian at 56%, and when added to Catholic

practitioners (28%) , the total practice of Christianity within the US is 84%. (We have defined a

predominantly Christian country as over 50% of the population practicing some form of

Christianity, other than Catholicism

In analyzing Predominantly Christian countries, the primary correlation between religion and the

Geert Hofstede Dimensions is a high Individualism (IDV) ranking. This indicates that

predominantly Christian countries have a strong belief in individuality, with individual rights

14GLOBAL EXPANSION OF FABINDIA

being paramount within the society. Individuals in these countries may tend to form a larger

number of looser relationships.

HOUSING TYPES

The types of homes in the USA that are desirable to foreign investors have increased

substantially. With the weak dollar, and the collapse of the housing market, the inventory of

houses for sale in the US has skyrocketed, while prices have plummeted. For foreigners looking

to invest, or to find a vacation home within the states, there has never been a better time to look

into the US real estate market.

Here are the three types of homes in the USA:

1. Residential Single Family Homes: This has always been the most popular choice with foreign

buyers, as well as domestic purchasers. A recent survey done by the National Association of

Realtors showed that 69% of international buyers bought detached, single family homes in the

United States.

2. Condominiums/Apartments: These are the second most popular types of homes for

international buyers, accounting for 18% of all foreign real estate purchases.

3. Townhouses: Townhomes come in third popular for foreign investors. Only 8.9% of

international buyers end up buying these. One reason for this is that there simply aren't as many

of them as compared to single family homes or apartments and condominiums in the United

States.

FAMILY DWELLING

Most of the people in USA live in single family dwelling. Many of these homes come with a

yard, some with a garage and some with a swimming pool. With a single family home you will

generally have to do your own yard work and maintenance or pay somebody to do this.

15GLOBAL EXPANSION OF FABINDIA

RECREATION, SPORTS AND OTHER LEISURE ACTIVITES

Sports in the United States are an important part of the American culture. However, the

sporting culture of the U.S. is unique from that of many other countries. Compared to any other

nation, American preferences for sports differ from the rest of the world. For example,

professional soccer is not as popular in the United States as it is in many parts of the world, but it

has been growing in recent decades.

Basketball is another major sport, represented professionally by the National Basketball

Association. It was invented in Springfield, Massachusetts 1891, by Canadian-born physical

education teacher James Naismith.

American football, known in many Anglophone countries as gridiron, is widely considered to be

the most popular sport in the United States.

Many Americans recognize a fourth sport - Ice hockey. Always a mainstay of Great

Lakes and New England-area culture, the sport gained tenuous footholds in regions like the

American South in recent years, as the National Hockey League pursued a policy of expansion.

16GLOBAL EXPANSION OF FABINDIA

LANGUAGE

English is the de facto national language. Although there is no official language at the federal

level, some laws—such as U.S. naturalization requirements—standardize English.

In 2006, about 224 million, or 80% of the population aged five years and older, spoke only

English at home.

Spanish, spoken by 12% of the population at home, is the second most common language and the

most widely taught second language.. Both Hawaiian and English are official languages in

Hawaii by state law.

While neither has an official language, New Mexico has laws providing for the use of both

English and Spanish, as Louisiana does for English and French. Other states, such as California,

mandate the publication of Spanish versions of certain government documents including court

forms.

17GLOBAL EXPANSION OF FABINDIA

ECONOMIC ANALYSIS

1. Introduction:

The United States has a total resident population of 310,249,000. It is a very urbanized

population, with 81% residing in cities and suburbs as of mid-2005 (the worldwide urban rate

was 49%). California and Texas are the most populous states, as the mean center of United States

population has consistently shifted westward and southward.

The total fertility rate in the United States estimated for 2009 is 2.05 children per woman, which

is slightly lower than the replacement level of 2.1. However, U.S. population growth is among

the highest in industrialized countries, since the vast majority of these have below-replacement

fertility rates and the U.S. has higher levels of immigration.

18GLOBAL EXPANSION OF FABINDIA

People under 20 years of age made up over a quarter of the U.S. population (27.6%), and people

age 65 and over made up one-eighth (12.6%) in 2008.

The national median age was 36.7 years. Racially, the U.S. has a White American majority.

Minorities compose just over one-third of the population (102.5 million in 2007), with Hispanic

and Latino Americans and African Americans as the largest minority groups, by ethnicity and

race, respectively.

Hispanic and Latino Americans accounted for almost half (1.4 million) of the national population

growth of 2.9 million between July 1, 2005, and July 1, 2006. Immigrants and their U.S.-born

descendants are expected to provide most of the U.S. population gains in the decades ahead.

2. Population

Total population:

305,689,000

Median age

36.7 years (2009 est.)

Age structure:

0–14 years: 20.2%(male 31,639,127/female 30,305,704)

19GLOBAL EXPANSION OF FABINDIA

15–54 years: 67.0%(male 102,665,043/female 103,129,321)

55 years and over: 12.8%(male 16,901,232/female 22,571,696)

Birth rate

13.5 births/ 1,000 population/ year (Provisional Data for 2009). This is the lowest in a

century. There were 4,136,000 births.

Death rate

8.38 deaths/1,000 population/year (2009 est.)

Immigration

13% of the population was foreign-born in 2009.

Net migration rate

4.32 migrants/1,000 population (2009 est.)

Life expectancy at birth(2009 est.)

total population: 78.11 years male: 75.65 years female: 80.69 years

Unemployment rate

All workers: 5.8% Adult men: 6.1% Adult women: 5.4% White: 5.2% Black or African American: 10.1% Hispanic or Latino ethnicity: 7.6% Asians: 4.0%

Nationality

American

20GLOBAL EXPANSION OF FABINDIA

Ethnic groups:

White: those having origins in any of the original peoples of Europe, the Middle East, or

North Africa.

Black or African American: those having origins in any of the Black racial groups of

Africa.

American Indian or Alaska Native, also called Native Americans: those having origins in

any of the original peoples of North, Central and South America, and who maintain tribal

affiliation or community attachment.

Asian, also called Asian American: those having origins in any of the original peoples of

the Far East, Southeast Asia, and the Indian subcontinent; frequently specified as Chinese

American, Korean American, Indian American, Filipino American, Vietnamese

American, Japanese American, etc.

Native Hawaiian or Other Pacific Islander: those having origins in any of the original

peoples of Hawaii, Guam, Samoa, or other Pacific Islands; see also Pacific Islander

American.

Geographic area:

Total 3,717,813 sq mi

9,629,090 km2

Land 3,536,294 sq mi

9,158,960 km2

Water 181,519 sq mi

470,131 km²

21GLOBAL EXPANSION OF FABINDIA

Latitude 38°0' N Longitude 97°0'W

3. Economic statistics and activity:

Current Economic Indicators

September 14, 2010 (Close of Day)

Indicator ValueInflation % 1.30GDP Growth % 1.60Unemployment % 9.60Gold $/oz 1,265.50Oil $/bbl 76.60Prime % 3.25

(A) GDP:

The Gross Domestic Product (GDP) in the United States expanded at an annual rate of 1.60 percent in the last reported quarter. From 1947 until 2010 the United States' average quarterly GDP Growth was 3.31 percent reaching an historical high of 17.20 percent in March of 1950 and a record low of -10.40 percent in March of 1958. The economy of the United States is the largest in the world. The United States is a market-oriented economy where private individuals and business firms make most of the decisions. The federal and state governments buy needed goods and services predominantly in the private marketplace. This page includes: United States GDP Growth Rate chart, historical data and news.

Country Interest Rate

Growth Rate Inflation Rate

Jobless Rate Current Account

Exchange Rate

United States

0.25% 1.60% 1.20% 9.60% -109 82.9200

(B)AVERAGE FAILY INCOME:

22GLOBAL EXPANSION OF FABINDIA

Bottom range -- $5,500 -$18,500

Middle range -- $20,500-$55,000

Top Range -- $77,500-$350,000

(C) DISTIBUTION OF WEALTH:

Households Persons, age 25 or

older with earnings

House hold income by race

All

househ

olds

Dual

earner

househ

olds

Per

househ

old

memb

er

Male Fema

les

Both

sexes

Asia

n

Whit

e

Hispa

nic

Blac

k

$46,32

6

$67,34

8

$23,53

5

$39,4

03

$26,5

07

$32,1

40

$57,5

18

$48,9

77

$34,4

241

$30,1

34

Transportation in USA

Rail transport

Today, most rail transport in the United

States is based in freight train shipments. The

U.S. rail industry has experienced repeated

convulsions due to changing U.S. economic

needs and the rise of automobile, bus, and air

transport. Despite the difficulties, U.S.

railroads carried 427 billion ton-miles of

23GLOBAL EXPANSION OF FABINDIA

Mode of intercityfreight transport

Ton-miles (millions)

Percent

Air 15,731 0.35%

Truck 1,293,326 28.50%

Railroad 1,733,777 38.21%

Domestic water transportation

591,276 13.03%

Coastwise 263,464 5.81%

Lakewise 51,924 1.14%

Internal 274,367 6.05%

Intraport 1,521 0.03%

Pipeline 903,811 19.92%

Oil and oil products 572,000 12.60%

Natural Gas 331,811 7.31%

cargo annually in 1930. This increased to 750 billion ton-miles by 1975 and doubled to 1.5

trillion ton-miles in 2005. In the 1950s, the U.S. and Europe moved roughly the same percentage

of freight by rail; but, by 2000, the share of U.S. rail freight was 38% while in Europe only 8%

of freight traveled by rail. In 1997, while U.S. trains moved 2,165 billion ton-kilometers of

freight, the 15-nation European Union moved only 238 billion ton-kilometers of freight

Amtrak Train Service

The Amtrak Rail Service is a recent transportation model which offers a higher quality

service then Greyhound and it is cheaper than the airlines. Sometimes you can get really good

deals on flights (e.g. coast to coast flights, roundtrip Los Angeles - Florida $150-200 or lower

with last minute trips, which is cheaper than Amtrak). But riding the train is fun. You can see lot

more than from the plane. So if we have the time and want to see America then Amtrak can be

an option.

Cargo

The trucking industry (also referred to as the transportation or logistics industry) involves the

transport and distribution of commercial and industrial goods using commercial motor

vehicles (CMV). In this case, CMVs are most often trucks; usually semi trucks, box trucks,

or dump trucks. A truck driver (commonly referred to as a "trucker") is a person who earns a

living as the driver of a CMV.

The trucking industry provides an essential service to the American economy by transporting

large quantities of raw materials, works in process, and finished goods over land—typically from

manufacturing plants to retail distribution centers. Trucks in America are responsible for the

majority of freight movement over land, and are vital tools in the manufacturing,

transportation, and warehousing industries.

Air transportation

The United States has advanced air transportation infrastructure which utilizes

approximately 5,000 paved runways. In terms of passengers, seventeen of the world's thirty

busiest airports in 2004 were in the U.S., including the world's busiest, Hartsfield-Jackson

Atlanta International Airport.

24GLOBAL EXPANSION OF FABINDIA

In terms of cargo, in the same year, twelve of the world's thirty busiest airports were in

the U.S., including the world's busiest, Memphis International Airport.

Due to the geography of the United States and the generally large distances between major cities,

air transportation is the preferred method of travel for trips over 300 miles, such as for business

travelers and long distance vacation travelers

Water transportation

Water transport is largely used for freight. Fishing and pleasure boats are numerous, and

passenger service connects many of the nation's islands and remote coastal areas, crosses lakes,

rivers, and harbors, and provides alternative access to Alaska which bypasses Canada. Several

major seaports in the United States include New York to the east, Houston and New Orleans on

the gulf coast, Los Angeles to the west.

WORKER INTERACTIONS

Workers such as waiters, store employees, receptionists, and government employees, should

be spoken to with civilities such as "please" and "thank you." Snapping fingers, calling out

loudly, waving money, or whistling for an employee's attention are not appropriate.

While clerks and customers often address each other with terms such as: hon, dear, sweetie,

darling, doll, honey, etc. (particularly in the American South), judgment should be exercised

as visitors from other regions may perceive such sentimentalities as patronizing,

condescending, or unprofessional. Proper terms are "Sir", "Ma'am," or "Madam", or if the

name is known, Mr./Mrs./Miss/Ms. [Last name].

One should never attempt to guess the gender or use gender-specific pronouns if a clerk or

customer service representative is working in a situation in which the gender cannot be seen

or known. Doing so could cause a male with a feminine voice or a female with a masculine

voice to take great offense.

25GLOBAL EXPANSION OF FABINDIA

Mainindustries petroleum, steel, motorvehicles,aerospace, telecommunications,chemicals, creative

industries,electronics, food processing, consumer goods, lumber, mining,defense

INTERNATIONAL TRADE STATISTICS

Exports $1.057 trillion f.o.b (2009 est.)

Export

goods

agricultural products (soybeans, fruit, corn) 9.2%, industrial supplies (organic

chemicals) 26.8%, capital goods (transistors, aircraft, motor vehicle parts,

computers, telecommunications equipment) 49.0%, consumer goods (automobiles,

medicines) 15.0% (2009)

Main

export

partners

Canada, 13.2%; Mexico, 8.3%; China, 4.3%; Japan, 3.3%. (2009)

Imports $1.558 trillion c.i.f. (2009 est.)

Import

goods

agricultural products 4.9%, industrial supplies 32.9% (crude oil 8.2%), capital

goods 30.4% (computers, telecommunications equipment, motor vehicle parts,

office machines, electric power machinery), consumer goods 31.8% (automobiles,

clothing, medicines, furniture, toys) (2009)

26GLOBAL EXPANSION OF FABINDIA

Main

import

partners

China, 15.4%; Canada, 11.6%; Mexico, 9.1%; Japan, 4.9%; Germany, 3.7%. (2009)

TRADE RESTRICTIONS

Tariffs, taxes on imports, raise the price of imported goods, which increases the demand and

price for the same goods produced by domestic suppliers. Revenues from tariffs are collected by

the domestic government.

Despite the substantial tariff reduction and elimination agreed in the Uruguay Round, the U.S.

retains a number of significant duties and tariff peaks in various sectors including food products,

textiles, footwear, leather goods, jewellery and costume jewellery, ceramics, glass, trucks and

railway cars.

Quotas put a legal limit on the amount that can be imported, creating shortages which cause

prices to rise. A quota benefits domestic producer in the same way a tariff does, but the

additional money expended on foreign goods goes to the foreign producers, not the domestic

government.

A particular problem in the U.S. is the relatively low level of use, or even awareness, of

standards set by international standardizing bodies.

Embargoes prohibit trade with other nations. They bar a foreign nation's imports or ban exports

to that nation or both.

27GLOBAL EXPANSION OF FABINDIA

Licenses may be required of importers of foreign goods so that imports can be restricted by

limiting the number of licenses issued. Export licenses may be required in order to implement

partial embargoes on trade with specific nations.

Standards are laws or regulations establishing health and safety standards for imported goods,

frequently much stricter than those applied to domestically produced goods.

Subsidies are payments made by governments to their domestic producers to enable them to

compete with foreign competitors. They are usually intended to be temporary, allowing domestic

producers to acquire new technology or to survive a short-term problem, but they frequently

linger on for many years. It is difficult to dislodge entrenched special interests. Taxpayers bear

the costs of subsidy payments.

LABOR FORCE:

About 146 million people in the United States were working in paid jobs, with another 7 million

unemployed, the 153 million total makes up the world's third largest labor force, after China's

and India's. Nearly two-thirds of U.S. working-age people participate in the labor force. Males

and females each account for about half. About 15 percent of them are foreign born. Some 5 to 6

percent of them work more than one job.

UNEMPLOYMENT RATE: 9.6%in Aug 2010

INFLATION RATES:

Current inflation rate of USA (2010) is 1.2352%

CHANNEL DISTRIBUTION

The term ‘distribution system’ refers to that complex of agents, wholesalers and retailers through

which manufacturers move products to their intended markets. Marketing channels are usually

made up of independent firms who are in business to make a profit. These are known as

28GLOBAL EXPANSION OF FABINDIA

marketing intermediaries or middlemen. Distribution outlets can include combinations of owned

and independent outlets or arrangements like franchising.

Direct versus indirect systems

In designing a distribution system, a manufacturer must make a policy choice between selling

directly to customers and employing salespeople and using intermediaries i.e. selling through

agents, wholesalers and retailers. Initially, the decision is usually based on cost factors:

Distribution costs are largely a function of:

1 the number of potential customers in the market;

2 how concentrated or dispersed they are;

3 how much each will buy in a given period;

4 costs associated with the practical side of the distributive operation (e.g. transport,

warehousing and stockholding all of which are dealt with in detail in Chapter 10).

If the manufacturer has a large enough potential sales volume, there may be a strong case for

selling direct and employing a sales force.

Most often, manufacturers will sell to wholesalers who, in turn, break bulk, add on a mark-up

and sell to retailers. However, with the increased size and power of the large food multiples,

manufacturers sell direct to them and they perform their own wholesaling function. Whether

selling through retail chains, or wholesalers then retailers, the important point is that the

manufacturer relies on these middlemen for ultimate marketing success, as it is these

intermediaries who have the responsibility of taking the product to the ultimate consumer.

Strategic elements of channel choice

An important consideration for marketing management in formulating channel policy and the

number of marketing intermediaries used is the degree of market exposure sought by the

company for its products.

29GLOBAL EXPANSION OF FABINDIA

Three distribution strategies, resulting in varying degrees of market exposure, can be

distinguished.

Intensive distribution

Products, when viewed by consumers in their totality, are seen as a bundle of attributes or

satisfactions including possession utilities and time and place utilities. Producers of convenience

goods and certain raw materials aim to stock their products in as many outlets as possible (i.e. an

intensive distribution strategy). The dominant factor in the marketing of such products is their

place utility. Producers of convenience goods such as pens, confectionery and cigarettes try to

enlist every possible retail outlet, ranging from multiples to independent corner shops, to create

maximum brand exposure and maximum convenience to customers. With such products, every

exposure to the customer is an opportunity to buy, and the image of the outlet used is of less

significant factor in the customer’s mind than the impression of the product.

Exclusive distribution

For some products, producers deliberately limit the number of intermediaries handling their

products. They may wish to develop a high quality brand image. Exclusive distribution to

recognised official distributors can enhance the prestige of the product. Exclusive (or solus)

distribution is a policy of granting dealers exclusive rights to distribute in a certain geographical

area. It is often used in conjunction with a policy of exclusive dealing, where the manufacturer

requires the dealer not to carry competing lines.. By granting exclusive distribution, the

manufacturer gains more control over intermediaries regarding price, credit and promotional

policies, greater loyalty and more determined selling of the company’s products.

Selective distribution

This policy lies somewhere between the extremes just described. The manufacturing firm may

not have the resources to adequately service or influence the policies of all the intermediaries

who are willing to carry a particular product. Instead of spreading its marketing effort over the

whole range of possible outlets, it concentrates on the most promising of outlets.

30GLOBAL EXPANSION OF FABINDIA

Channel members should have certain facilities in order to store and market products effectively,

for example, frozen food products require that intermediaries have adequate deep freeze display

facilities. Specialised resources may be necessary, for example, certain ethical pharmaceutical

products require that intermediaries are capable of offering advice as to the use and limitations of

the product, so such products might be restricted to pharmacies. The product may have a

carefully cultivated brand image that could be damaged by being stocked in limited line discount

outlets where products are displayed in a functional way to reduce overheads and the final price.

Selective distribution is used where the facilities, resources or image of the outlet can have a

direct impact on customers’ impressions of the product. An example here is ‘up market’ brands

of perfume.

Media

Number of Daily Newspapers: 1,476

Total Circulation: 55,945,000

Circulation per 1,000: 264

Total Newspaper Ad Receipts: 48,700 (US$ millions)

As % of All Ad Expenditures: 33.10

Number of Television Stations: 1,500

Number of Television Sets: 219,000,000

Television Sets per 1,000: 787.6

Number of Cable Subscribers: 70,991,360

Cable Subscribers per 1,000: 252.1

Number of Satellite Subscribers: 16,000,000

Satellite Subscribers per 1,000: 57.5

31GLOBAL EXPANSION OF FABINDIA

Number of Radio Stations: 10,322

Number of Radio Receivers: 575,000,000

Radio Receivers per 1,000: 2,067.9

Number of Individuals with Computers: 161,000,000

Computers per 1,000: 579.0

Number of Individuals with Internet Access: 95,354,000

Internet Access per 1,000: 342.9

Advertising expenditures:

22%

8%

25%9%

36%

Advertaising Expenditures(US$ MN)

news papersmagzinestelevisionradiocinema

32GLOBAL EXPANSION OF FABINDIA

MARKET AUDIT

Introduction

Fabindia is India's largest private platform for products that are made from traditional

techniques, skills and hand-based processes. 

Fabindia links over 40,000 craft based rural producers to modern urban markets, thereby creating

a base for skilled, sustainable rural employment, and preserving India's traditional handicrafts in

the process. 

Fabindia was first started as a village-based industry by John Bissell in 1960. Bissell, previously

working as a buyer for Macy's New York left his position and worked as a consultant for the

Ford foundation where he was given a two-year grant to instruct Indian villagers in making

goods for export. He firmly believed in the emerging Indian textile industry and was determined

to showcase Indian handloom textiles with a way to provide employment to traditional artisans.

The first retail store of Fabindia was opened in 1976 in New Delhi, India.

Started as an export house, Fabindia, under the guidance of current managing director William

Bissell (1993), has emerged as a successful retail business in India, with 111 retail outlets within

the country and 6 abroad.[1] Fabindia sells a variety of products ranging from textiles, garments,

stationery, furniture, home accessories, organic foods, and body care products. It launched its

jewelry line in August 2008.

Fabindia's products are natural, craft based, contemporary, and affordable.

33GLOBAL EXPANSION OF FABINDIA

FAB INDIA PRODUCTS

The major portion of Fabindia’s product range is textile based. Non- textile introductions to this

range are Home Products (introduced in October 2000), Organic Food Products (introduced in

July 2004) & Fabindia’s range of authentic Personal care products (introduced in March 2006).

We are planning to export the textile-based product range that includes ready-to-wear garments

and accessories for men, women, teenagers and children; bed, bath, table and kitchen linen, floor

coverings, upholstery fabric and curtains. Cotton, silk, wool, grass, linen and jute are the basic

fibres used.

Along with the textiles we are also planning to export a selection of handcrafted utility items.

34GLOBAL EXPANSION OF FABINDIA

GLOBAL EXPANSION OF FABINDIA IN USA

Evaluation of the product as an Innovation as intended by the US market

Relative advantage

o Products are Natural and eco friendly, when compared to other fabrics.

o These fabrics are never considered as in or out of fashion and have a great

international appeal, as khadi is a brand which speaks for itself.

Compatibility

o Majority of the US population tend to prefer new fashion.

o These products gives a touch of Indian culture which is preferred by Indian

residents which is nothing but domestic extension.

o Due to the globalize fashion trend and the open mind of the consumer behavior

helps a company like fab india to have a good opportunity in casual and formal

dressing.

Complexity

o As the product is eco friendly it is suitable for all kinds of climatic conditions and

the customers can easily use them.

Trialability

o The product is easily affordable by all income groups. So, every customer can

have a trial and can decide whether it suits them or not, because the product is not

so costly.

Observability

o As said in the earlier points the product is very eco-friendly, affordable, suitable

for all occasions. These are the benefits which are easily communicated to the

consumer.

Problems and resistances to product acceptance based on the above evaluation

Lack of awareness

As it is hand made product most of the customers will be worried about the quality of the

product( Stitching, etc).

35GLOBAL EXPANSION OF FABINDIA

As per the data of the Ministry of textile the opportunity of handmade handloom and handicrafts

is quiet good in North America, then may be a possibility of touching South America also. Some

states like Texas, Califonia have a good no of Indian Origin people. Therefore, we can also make

extension of our business apart from adaptation.

The main objective is to export and set up retailing stores under an autonomous

subsidiary in some of the major cities of USA and also establish some stitching units. But the

textile will be imported from the parent Fabindia company.

If the own retailing format is not possible than the company can operate on franchise

basis

INTERNATIONAL COMPETITOR’S

US market is primarily dominated by Chinese imported goods which are offered at very

low price. There are many international companies like UBC, Vanity Fair group, the retail giants

like Wall Mart and Carriefour are also in the USA market.

Major Chinese Companies

o Shuilam Internation Ltd

o Queen International textile Limited

o Kaiya Textile Limited

36GLOBAL EXPANSION OF FABINDIA

IMPLEMENTING THE GLOBAL MARKETING PLAN

PRODUCT AND TARGET MARKET

Generally Khadi is used by Indian people as traditional wear. As mainly the product attributes

depends on the history of India. The target market is the US youth and singles who prefer to

wear presence of Indian population in USA and other Indians living in countries Canada,

Mexico, Caribbean Island. We also focus on the American population who mainly look for the

attributes such as longevity, durability and eco-friendly. We also target the American youth who

have got tremendous liking for new fashions. We also focus on the Hotel industry as a major

market because they require a large amount of handicrafts for the purpose of interior designing

and also home linen material(bed sheets, curtains,etc.,)

PROMOTION STRATEGIES

Strategy 1 – USE THE RIGHT TRANSLATOR

The company needs various translators for putting into the right from and it should not be

addressed by the right meaning, it should be in the form of zest of the total message. For this

reason, we like to hire a local advertising agency for promotion.

Strategy 2 – TRADE EXHIBITIONS

To create brand awareness we try to participate in the trade exhibitions conducted by the ITPO

International Trade Promotion Offer). Apart from this as majority of people use internet we also

like to promote on web for example advertising in social networking sites.

37GLOBAL EXPANSION OF FABINDIA

Strategy 3 – ADVERTISING THROUGH MEDIA

In Media, both News papers and Television are found to have a major impact on the customers.

Therefore, we like to advertise in them by highlighting the features such as eco friendly, durable

etc., We also plan to advertise through mobile marketing which is considered to be a having a

major role.

Apart from this we also like to advertise in blogs and social networking sitesas it is the easy way

of communicating to the youth.

Strategy 4 – INCENTIVES AND COMMISSIONS

As the company’s products are mainly sold through franchisees and other retailers we also like to

give them some discounts and incentives so that they promote our product well.

Strategy 5 – BRAND RECOGNITION

Though the product is from India, the brand should have an appeal that it is the product of

America as most of them a feeling of Ethnocentrism.

We also like to promote the brand in the movies as it can be clearly seen that 36% of the

population are influenced by films.

Strategy 6 – BE CULTURALLY SENSITIVE

From the cultural analysis it is found that most of western citizens prefer formal wear and eastern

citizens prefer causal wear. Based upon this we promote more of formal wear in western part

and casual wear in eastern part.

38GLOBAL EXPANSION OF FABINDIA

Strategy 7 -- JOINT VENTURE

We try to form a joint venture with any of the retail outlets like Wal-Mart as it helps the

company to have easy recognition.

Strategy 8 – PRODUCT CUSTOMIZATION

We are also planning to provide the facility of product customization where customers have a

choice of choosing their own color, size etc.

DISTRIBUTION STRATEGY

We have planned for two types of distribution strategies in this region. In USA, the local agents

play a major role. So dealing business without them is very impossible. In this situation we like

to run the business on franchise model.

Another format is the Intensive distribution system- selling through a specific retailer in the

major cities ( Joint Venture). Here the consumers can avail the product directly from their city

and it helps to create brand awareness about the apparels.

And in small states, states where there is no much potential for the market we like to sell the

product through a established retailer in that region.

PRICING STRATEGY

Pricing is one of the most important elements of the marketing mix. If pricing is not done

properly, it might have a huge impact on both the profits and the sales volume. Effective pricing

helps us in creating opportunities like providing discounts to suppliers etc.,

39GLOBAL EXPANSION OF FABINDIA

One important point that has to be taken into consideration is that the Indian rupees are valued in

terms of dollars.

The rate of custom duty and other tax is around 18%. This means that the price of the product

will be around 25- 30 % high compared to that of Indian price taking into consideration the

transportation and other charges.

Therefore, our pricing strategy is as follows:

Product Indian price (Rs.) International price(Rs.)

Duppatta 350-800 450-900

Tie 150-250 450-700

Shirts 250-1000 350-1500

Kurta 175-350 250-450

Bed Sheet 450-1500 1000-2500

Saree

Tassar Silk 300-350 450-650

Matka Silk 450-550 550-850

Woolen Khadi 200-250 450-650

Pure Silk Saree 850-1250 1500-2500

Baluchari Saree 4000-4500 6000-7500

Katha Work Saree 3650-4000 4500-7000

40GLOBAL EXPANSION OF FABINDIA

SWOT for FABINDIA in USA

Strengths

Eco-Friendly Reflects Indian Culture Versatility of Khaki Economic Growth Low cost Employment generation Fashion

Weaknesses

Lack Of Appreciation Labor-Intensive Lack of infrastructure Lack of training in

business methodologies Lack of awareness

Opportunities

Potential for exports Emerging trend Capturing an untapped

markets Generation of

employment Growing consumer

preference

Threats

Competition Survival in fast-growing

technology Legislative impact

41GLOBAL EXPANSION OF FABINDIA

CONCLUSION

International business success depends upon various parameters. The test marketing and

marketing research may give only a glance of market. Generally, if a company can earn 20% of

its investment then the rate of success is pretty high to meet the breakeven point within 5-7 years.

In this time duration, the company can build a top of mind awareness as a brand in textile and

handicrafts. This helps the company to promote its other businesses like PICKLES, ORAGANIC

PRODUCTS and other FMCG products like personal care such as cosmetics as there is a huge

demand in US.

The company should have a Hawkeye on the changing trends, tastes and preferences of the

customers. However, apart from these the company should also have its focus on the changing

culture, economy and the political systems which help the company to have a better forecast,

gain good profits and establish a sustainable global business.

42GLOBAL EXPANSION OF FABINDIA

BIBILIOGRAPHY:

1. http://www.bea.gov/newsreleases/glance.htm 2. http://retailindustry.about.com 3. http://www.plunkettresearch.com/Industries/Retailing/tabid/210/Default.aspx 4. http://www.forecast-chart.com/forecast-inflation-rate.html 5. http://www.tradingeconomics.com 6. http://in.finance.yahoo.com/currency/convert?amt=1&from=INR&to=USD&submit=Convert 7. http://www.x-rates.com/d/USD/table.html 8. http://culturalpolitics.net/popular_culture/ 9. http://www.dol.gov/ 10. http://www.bls.gov/ 11. http://www.usatrans.com/ 12. http://www.publictransportation.org/ 13. http://www.galbithink.org/ad-spending.htm 14. www.fabindia.com 15. www.google.com 16. www.wikipedia.com

43GLOBAL EXPANSION OF FABINDIA