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Retail MarketingProf. B. K. Kumar
Term III
PGDBM Program AY 2012 14
(July Batch)
Mohit Daga
Sec H
20thMay2013
A COMPARATIVE STUDY -:
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TABLE OF CONTENT
1 .SAMSONITE BACKGROUND
2.VIP BACKGROUND
3 . 7P S INTRODUCTION
PRODUCT
PRICE
PROMOTION
PLACE
PEOPLE
PACKAGING
POSITIONING
4. A STUDY ON SAMSONITE & VIP
5. G LOBAL LUGG AGE IND USTRY.
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Founded in 1910, Samsonite has kept itsheritage of more than 100 years, to createstylish and high quality solutions for the
world traveler intact.
Samsonite Corporation started its
India operations in 1996 as SamsoniteSouth Asia Pvt. Ltd. It is a 60:40 joint
venture formed with the esteemed
Tainwala family. Currently, Samsonites Asia operations
span SAARC, China, East Africa. Samsonite is the leading worldwide brand
in superior travel bags, luggage and
accessories, combining notable style with
the latest design technology and utmost
attention to quality and durability.
FACTS-:1. Year of first store launch: 2000
2. Total number of outlets at
present: 232 (Malls: 42; High-
Street: 190)
3. Total number of outlets
expected by 2012: Companyowned: 90; Franchised: 200+
4. Target consumers: 25 to 50,
SEC A1 mid to senior level
executives/ entrepreneurs
5. Region with strongestpresence: South
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Established in 1971, VIP Industries Limitedis the flagship company
of the Dilip G PiramalGroup. Since its inception, VIP luggage has
sold over 60million piecesaround the worldand has today become
an epic brand synonymous with the word travel in India. It is today the largest luggage brand in Asia and the second
largest manufacturer of moulded luggage in the world.
In the organized Indian luggage market, VIP leads all other
brands with a dominant 60% market share with its products
reaching over 8000 retail outletsacross the countryand over 1300
outlets spread across 5 continents in 27 countries.
VIP acquired the brand Carlton in 2004 (presence in 65 countries),which is the chosen vehicle for global expansion.
FACTS
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Once you've developed your
marketing strategy, there is a
"Seven P Formula" you should
use to continually evaluateand reevaluate your business
activities. These seven are:
product, price, promotion,
place, packaging, positioning
and people.
As products, markets,
customers and needs change
rapidly, you must continuallyrevisit these seven Ps to make
sure you're on track and
achieving the maximum
results possible for you in
today's marketplace.
PRODUCT PEOPLE
PRICE PLACE
PROMOTION PACKAGING
POSITIONING5
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It must provide value to a
customer but does not
have to be tangible at the
same time. Basically, it
involves introducing NEW
PRODUCTS OR IMPROVISING
THE EXISTING PRODUCTS
VIPcreate thoughtful , stylish & innovative
products to make travel more joyful and
simple. With a very short history as
compared to Samsonite, VIP has still
managed to grab the 2nd
the position ofworlds 2nd largest luggage manufacturer.
Stylish products with excellent features built
into a brilliant design, made VIP a much
sought after brand in the expanding luggage
market.
Samsonite has embedded its
place at the forefront of the travel
world with a number of industry
firsts. Showing commitment to
innovation every step.
A wide spectrum of business,
casual and personal accessoryproducts in upholding Samsonites
position as a market leader and
trendsetter. Always looking
forward by identifying trends and
the continuing evolution of global
traveler's needs, Samsonitemaintains a worldwide vision that
continues to enable travelers to
travel further, with ever lighter,
stronger and more innovative
products at his side.
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Samsonite operatesin the mid to high-end segment
(with its range starting from Rs
5,500 and going up to as high as
Rs 85,000), while its second
brand, American Tourister,
caters to the 'mass with a class'
or those masses that don't mind
paying a little extra for better
quality (the brand's range starts
at Rs 2,700).
VIPhas wide range of products and serves
across the world specially the south Asian
region under various brand name
VIP(mid-range product ranging from Rs.
325 to Rs. 8900), CARLTON(premium range
product ranging from Rs. 2200 toRs.17000), ARISTOCRAT ,SKYBAGS, ALFA
etc.
The price is very
important as it determines
the companys profit andhence, survival. Adjusting
the price has a profound
impact on the marketing
strategy
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Promotion represents all of the
methods of communication that a
marketer may use to provide
information to different partiesabout the product.SAMSONITE, campaign using 360
degree model. Our flagship brand
Samsonite operates in the premium
consumer segment while American
Tourister is for the mid-level consumer.
A consumer buys Samsonite because
he wants Samsonite. That is why in all
our campaigns, we do not talk about
any features or strengths of our
product. But American Tourister
consumers want an assurance from the
brand about what they are buying and
so there is more rational advertising.
Carlton is a distinct product which
is designed for the European
market. With this brand we are
targeting the premium end of the
market. VIPis in the middle of the
market. This is in the mass
premium segment as well as in the
popular market. We are looking to
target younger consumers in
various ways. SKYBAGS is the
stylish offering.Aristocratis our
value for money product. People
have bought it as it is a big brandwith strong equity.
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SAMSONITE, associated with the
FILM my name is khan in the past
and oo7 recently. The company is
also looking at online brandingseriously, including branding on
travel sites, technology/gadget
oriented sites (which the business
traveler may frequent).
To reach out to young customers
who don't mind paying a slightpremium for their travel gear,
Samsonite and American Tourister
have created pages on social
networking sites such as Facebook
and Orkut and also have their
presences on Twitter. Our channelmix is changing.
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VIP recently launched a niche
eco-friendly bag called Acura.
People are getting conscious
about carbon footprint. Acura
range in partnership with Du-
Pont is very eco-friendly. We are
also launching new
polycarbonate range under VIP
and Skybags.The co. is also looking to launch
a range of luggage for women
called Diva, given the rise in
women travelers. These are
lightweight bags specially
designed for women travelers.As a market leader, we are
looking to enter more niche
markets and in due course make
them bigger.
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Place refers to providing the
product at a place which is
convenient for consumers toaccess. Place is synonymous
with distribution. Various
strategies such as intensive
distribution, selective
distribution, exclusive
distribution & franchising canbe used by the marketer to
complement the other
aspects of the marketing mix
VIP has operations across the globe in 5continents. It has offices in the USA,
South Asia, Middle East, Africa and
Europe. Worldwide,
VIP products are sold across 1300 retail
outlets in 27 countries.Brand Carlton has a presence in 65
countries across the globe and has its
offices at London, Dubai & Hong Kong.
The Hong Kong office is also the product
development and sourcing office for
domestic as well as internationalbusiness.
There are 17 exclusive stores in
Bangalore.
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There are 38 authorized dealers
in Bangalore.
In 2010, our products were
sold in more than 37,000
points of sale in over 100
countries through a variety of
wholesale and retail
distribution channels.Our market-leading position
results from our strong
international brand presence,
our significant scale, our
robust investment on
advertising and product
innovation, our scalable
distribution and sourcing
ability, and our market-
leading, high quality products.
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There are people
inside and outside
of your business
who are
responsible forevery element of
your sales and
marketing strategy
and activities
Improving the terms of trade and business
relationships with certain key third-party
suppliers to achieve a reduction in the
price of products sourced from them; and
negotiating lower freight prices, with
efficient executives . To create a competitive advantage,
Samsonite is now spending 9% of its saleson sales and marketing and $10 million a
year on product designing.
VIP focusing on creating barriers to entrythrough brand building, R&D and
Economies of Scale and Scope.
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People form their first impression
about the product within the first
30 seconds of seeing you or some
element of your company. Small
improvements in the packaging orexternal appearance of your
product or service can often lead
to completely different reactions
from your customers.
SAMSONITE -simple ,easy to use anddurable but the technology used is
sophisticated.
For example -: Curvtechnology is an
advanced impact-resistant, lightweightmaterial. Samsonite has
formulated the process to create the
ultra strong material by weaving fibres of
durable
polypropylene together, transforming
them into individual sheets which arequickly
reinforced and fused together to form
Cosmolites outer shell.
VIPit focuses one brand at a time
and innovates. The co. targets the
youth with its colorful and durable
Skybags, lures the business segment
with finesse leather bags.
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How do people think and
talk about you when
you're not present? How
do people think and talk
about your company?What positioning do you
have in your market, in
terms of the specific
words people use when
they describe you and
your offerings to others?
Skybags have come up with a clearpositioning, that of projecting your baggage
as a fashion accessory, making a statement
of its own. Samsonite comes up with Step
Out with Samsonite. This positioning talks
about encouraging travel, which is sort of
awkward, because baggages are dependenton travel and not the other way around.
Skybags positioning is also more youth-
centred compared to Samsonite, and inour county, that can never be wrong.
An interesting thing common to both
the campaigns is that both talk about
the need of the product as an
indispensable part of the consumers
life. They dont discuss functionality
or craftsmanship at all. I am not sure
whether this market has evolved
enough to move away from
functionality.
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A STUDY ON SAMSONITE AND VIP
Samsonite is the second largest luggage
brand in India trailing behind the marketleader VIP. Samsonite is known for its
premium luggage with major attribute
being the strength and sturdiness.
The Indian luggage market is huge with a
market size of Rs 2000 crore. But majorityof the market is dominated by unbranded
local players. The organised luggage
market is only Rs 950 crores.
VIP has a commanding market share of
80 % in the organized segment and
Samsonite is having around 15-20%
share.
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When Samsonite was launched in India, it took on the fight directly with VIP by making
the brand affordable to the Indian consumer. But in 2005, the brand took a major
repositioning exercise by positioning the brand as a luxury brand. The repositioning was
done using a series of print campaigns in leading magazines. The product portfolio was
also rejigged by the inclusion of lot of bold colors and shapes.
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The global luggage market has been forecast to hit a market value of US$50 billion by
2018, driven by the recovery in travel and tourism around the world. Growth is likely to
be fuelled by emerging economies, owing to the increase in both leisure and business
travel.
The popularity for outdoor sports, tourism, and adventure travel is increasing the demand
for specialty luggage products that augment comfort, convenience, and utility to sportstravel experience.
Moreover, luggage makers are enhancing their product lines by using faux leather and
microfiber for manufacturing purposes, and offering them in sophisticated colors such as
burgundy, blue, orange, and lime green.
Luggage manufacturers across the globe are increasingly focusing on targeted advertising
and promotion activities as well as on research, development, and designing of new
products. Further, luggage as a fashion accessory has recently become a norm in the
global market leading to its increased usage.
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This in turn has encouraged the global suppliers of luggage to constantly innovate
in order to meet the evolving needs of consumers. Moreover, lately, the need forbetter and expanded distribution network with new points of sale has also gained
importance. Samsonite luggage
Competition in majority luggage markets worldwide is based on the finest brand
name, product quality, product design, and price. Other important parameters
include consumer advertising, product differentiation, innovation, and customerservice.
Entry barriers for competitors in the soft-side luggage market are comparatively
lower than the hard-side market as hard-side luggage production is more capital
intensive, while soft-sided is labor-intensive.
Samsonite remains the undisputed leader in the global luggage market, followed
by VF Corporation, Tumi, Ace, Delsey, VIP, and Rimowa, among others. Major
players including Samsonite, are continuously engaged in developing luggage with
sophisticated technology, focusing on lightweight and solidity, security and storage
features.