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Retail Scenario – India The retail scenario in India is unique. Much of it is in unorganized sector, with over 12 million retail outlets of various sizes and formats. Almost 96% of these outlets are less than 500 Sq.ft. in size, the per capita retail space in India being 2 sq.ft compared to the US figure of 16sq.ft. India’s per capita retailing space is thus the lowest in the world. With more than 9 outlets per 1,000 people, India has the largest number in the world. Most of them are independent and contribute as much as 96% to the retail sales. Because of increasing number of nuclear families, working women, greater work pressure and increased commuting time, convenience has become a priority for Indian consumers. They want everything under one roof for easy access and multiplicity of choice.

The growth and development of organized retailing in India is driven by 2 main factors-lower prices and benefits the consumers can’t resist. India is rapidly evolving into a competitive marketplace with potential target consumers in the niche and middle class segments. The market trends indicate tremendous growth opportunities. Global majors too are showing a keen interest in the Indian retail market.

Fabindia

For decades, Fabindia has been committed to retail craft products through collaboration with artisans in rural areas. Their endeavor is to provide customers with hand crafted products which help support and encourage good craftsmanship. Their products are sourced from villages all over India. Fabindia works closely with artisans by providing various inputs including design, quality control, access to raw materials and production coordination.

Over the years the focus of Fabindia marketing shifted from exports to the local Indian retail market. What started as an export house has today become a successful retail business presenting Indian textiles in a variety of natural fibers, and home products including furniture, lights and lamps, stationery, home accessories, pottery and cutlery. Extending this partnership to the farmers in rural areas, Fabindia has launched its organic food products range. Fabindia Sana, the company’s authentic body care products range is also being launched at all Fabindia outlets

The vision continues to be to maximize the hand made element in their products, whether it is hand-woven textiles, hand block printing, hand embroidery or handcrafting home products.

Fabindia launched its organic food products range in 2004 it sells its organic products under three basic categories:

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Green: Fully certified organic farm. No chemicals used for a long time .The product is Fully certified by external accredited organic certifying agency.

Blue: In conversion no chemicals used. The product is from farm in conversion for organic certification.

Yellow: Farmed naturally without any history of chemical use. None of the products contain any synthetic additives, preservatives, colours or flavors. Tresorie At Trésorie one is spoilt for choice with rich and beautiful collections from all across the country and world over. It has four floors of display area covering approximately 8000 sq. ft with a wide range of unique, classy and extra ordinary designed home décor products. Trésorie is housed in a five storied building which looks from outside like a Treasure House / Treasure Trove well tucked in from the road. The store’s product mix included designer clothing and personal accessories for men & women, matched by an entire home line consisting of home accessories & products, bed-linen, table-linen, carpets, rugs, durries, frames, furniture, et al. Gradually with its growth over the years and to cater to its customer needs for achieving customer satisfaction, additional weight-age is now given towards home décor products & home accessories including premier furnishings, made-ups, designer furniture, elegant vases, crystal, crockery, kitchen items, personal accessories - semi precious designer jewelry and purses etc. which are very extra ordinary and exclusive in nature. These are procured from all corners of the country and world over. Goodearth It was established in 1996, with its first store in Mumbai, GOOD EARTH is today recognized as a trend setting design house, which has created a unique aesthetic reflecting contemporary Indian Style. At GOODEARTH the focus is on living, with a range of stylish, exclusively designed products for Dining & Entertaining, Bed Linen, Cushions and Home Decor. It has recently launched 2 distinct brands Good earth Verandah which showcases unique collection of cohesive furniture, unusual lights and Objects D Arts from designers across the world and Amritam home spa which offers a range of oils, hydrosols, and soaps of the highest purity levels.

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Bombay Stores

Bombay Swadeshi Co-operative Stores Co. Ltd. came into existence on 14th December, 1905. The year 1963 was a landmark in the history of the company, as it became the first retail organization to be listed on the Bombay Stock Exchange. It then came to be known as Bombay Swadeshi Stores Ltd. In the present day of globalization, the swadeshi movement has little significance. As the store now caters to an audience with a contemporary mindset the brand was re-christened in 1995 as 'The Bombay Store’. The company exports to small retailers in various countries like Australia, Japan, United Kingdom, United States, Canada and Mexico. As part of a value-added service, the company also exports individual purchases made by customers at its different outlets. The products that are been exported include candles, candle-stands, terracotta and ceramic wind chimes, wood and metal handicrafts, etc. The company is also capable of exporting apparel, soft furnishings, and other products that belong to the handicraft and handloom sectors.

Market Research Market research is defined as systematic and objective process of generating information to aid in making marketing decisions. This process includes specifying what information is required, designing method for collecting information, managing and implementing the collection of data and analyzing the results and communicating the findings and their implications. It is a decision making tool used to fulfill the marketing managers need for knowledge of market. Market search is a mean for implementing the marketing concepts and total quality management programs. It helps in development and implementation of marketing strategy.

New Products

Market research can show unmet needs and provide

an understanding of unfamiliar markets

Market research can measure customer

satisfaction to find out how to maintain a competitive edge

Market research can find new territories for product

or services

Existing Markets

New Markets

Market research can show the likelihood of adoption of new product

Existing Markets

Existing Products

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Market Research Process

Problem Discovery

Selection of Exploratory Research Technique

Problem Definition

Selection of Basic Research Method

Historical Data

Experience Survey

Case Study

Pilot Study

Survey Interview Questionnaire

Experiment Secondary Data Study

Observation

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Selection of Sample Design

Collection Of Data

Editing and Coding Data

Data Processing

Interpretation Of Findings

Report

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Primary Research 1. Defining The Problem “Understanding Market scenario and analyzing the market potential for luxury & lifestyle products at Mumbai” 2. Research Objective

⇒ To find out the market potential for luxury and lifestyle products ⇒ To analyze consumer buying behavior w.r.t luxury & lifestyle products

3. Designing the Research Plan Type of research – exploratory research Information pertaining to retail industry specially luxury and lifestyle products was collected from internet, magazines, journals and books. In course of research the researcher administered a questionnaire personally. 4. Kind of Data Used

⇒ Primary ⇒ Secondary

Primary Data We have generated structured questionnaire and collected information exclusively for our purpose of analyzing the market potential for luxury and lifestyle by observing the product’s sale & consumption pattern Secondary Data We have tried to understand the customer behavior, retail industry in India from book extracts and from internet. 5. Population Framework I) Individuals a) Households b) Office going professionals c) Youth (College Students) II) Store Managers & Merchandisers

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6. Sampling Method

⇒ Convenience Sampling Method 7. Sampling Area

⇒ Fabindia Colaba ⇒ Fabindia Santacruz ⇒ Fabindia Inorbit Mall Malad ⇒ Fabindia Nirmal Lifestyle Mulund

8. Collection of Data Interview Structured Questionnaire

⇒ Open ended questions ⇒ Close ended questions ⇒ Objective questions ⇒ Likert scale questions

Separate questionnaire were drafted for store managers & merchandisers and for customers/ individuals. Questionnaire for individuals These questions deal with consumption frequency & preference related specific category of product and finds out customer’s views and preferences, awareness, effect of marketing strategies. It tends to capture the overall consumption pattern and buying behavior. Questionnaire for Store Managers& Merchandisers These questions deal with finding out the stock sales ratio, inventory status, and turnover, finding out the stock keeping units and understanding the selling trends.

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Performa Questionnaire 1. For Customer

1. Luxury products make what percentage of your spending [ ] < 5 % [ ] 5-10 % [ ] 10-20 % [ ] >20%

2. Luxury products form what percentage of your festival shopping

[ ] < 5 % [ ] 5-10 % [ ] 10-20 % [ ] >20% 3. What is your frequency of buying luxury products? [ ] Monthly [ ] Quarterly [ ] six monthly [ ] yearly 4. When was the last time you bought an luxury item? [ ] this week [ ] this month [ ] 2-3 months [ ] > 6 months 5. To which product category does it belong? [ ] household [ ] lifestyle [ ] personal care [ ] jewelry 6. What was the approx price of that product? [ ] 500 [ ] 500- 2000 [ ] 2000-5000 [ ] >5000 7. Does the price band affect your decision while shopping for luxury goods? [ ] Yes [ ] No

8. If the luxury products are priced at a lower band will it affect your frequency of buying? [ ] Yes [ ] No

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2. For Store Manager

(1)Which of the following according to you is the best buying season?

(a) June-Sept (b) Oct- Feb (c) March-May (2)What is the approximate space of your store?

(3) What is the customer traffic per day

(a) 100-200 (b) 200-300 (c) 300 above

(4) What is the customer to buyer conversion ratio? _____________________________________ (5) Which time slots turn out to be profitable? (a) 11-1 (b) 1-3 (c) 3-6 (4) 6-10

(6) Average sales per transaction?

(a) 500-1000 (b) 1000-2000 (c) 2000-5000 (d) 5000 above

(7) Product mix displayed in the store ---------------------------------------------------

(8)Which product in your store has the maximum sales per day?

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(9) What is the approximate stock to sales ratio of your store?

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(10) What are the ranges of products the customers tend to buy more?

(a) <500 [ ] (b) 500-1000 [ ] (c) 1000-2000 [ ] (d) >2000 [ ]

(11) What are the age groups of the customers that generally visit your store?

(a) > 12 [ ] (b) 12-19 [ ] (c) 20-35 [ ] (d) 35-55 [ ] (e) >55 [ ]

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(12) Which income group does your store target for its maximum sales? (a) Middle class (b) Upper class (c) The Rich (d) The Premium

(13) How do you promote the brand name of your store? _____________________________________________

(14) How do you attract the customers during different seasons and do you find discounts as a viable option for it?

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(15) Spending budget allotted for promotional activities during season?

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(16) What percentage of customers gives revisit? (a) 5-10 % [ ] (b) 10-20 % [ ] (c) 20-30% [ ] (d) >30% [ ] (17) What kind of Customer retention programs/policies do you have?

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(18) What is the Return /exchange policy? ------------------------------------------------------------------

(19) What are the net sales per full time employee? ----------------------------------------------------------------

(20) Do you employee brand specific CR executives?

(a)Yes (b) No

(21) What is the average sales target allotted per executive?

--------------------------------------------------------------- (22) What is the average stock price? ____________________________________________

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Demographic Survey

Fabindia has become a successful retail business presenting Indian textiles in diverse natural fibers. Determined to showcase Indian handloom textiles while providing equitable employment to traditional artisans, Fabindia was established in order to fuse the best aspects of East/West collaboration. Fabindia Strategy Fabindia has a unique company policy. The company does not believe in having franchisee nor does it get into much of promotional campaigns for its brand promotion. Fabindia has created its own brand name by delivering quality products to their customers. Even the products which are displayed in the various stores across the country are manufactured by the company itself and that too keeping in mind the various need and wants of the customers. Some of the promotional strategies include providing discounts, offers etc. for e.g. In Fabindia if a customer tends top buy regularly he is treated as a loyal customer providing him discounts on various sections in the store or providing a straight discount of 10% on purchases above Rs.40, 000. Fabindia strategy involves finding remote craftsmen and designing commercially appealing products. This has also enabled it to generate meaningful employment for these artisans. Even the logistics are handled by Fabindia i.e. the products are delivered from manufacturing plant to the retails under Fabindia rather than using private transport. Fabindia marketing channel For a sustainable level of business, Fabindia chooses locations with over ten lacs population for its stores and mainly targeting the emerging middle class who want to try traditional but innovative products which Fabindia promises to deliver. Fabindia also have a few selected stockiest who are allowed to can keep the various range of products but under its brand-name. This helps to target different sections by providing spread over price setups, for e.g. clothing, stationary, artifacts and textile products (bed, kitchen, and table and bath linen).

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Fabindia tries to maximize the handmade proportion in its products, using hand-woven, hand block-printed fabrics and vegetable dyes as far as possible. The handloom process and techniques of production gives the textile a unique character. In addition, handloom fabrics breathe well, are cool in summer and retain body warmth in the winter. However, if a fabric which has been made using a power loom is used, it is decorated using hand processes such as block printing, embroidery, or embellishing. Locations Analysis Fabindia maintains its own product outlets. Within India, it merchandises and distributes its products through company owned stores. Keeping in mind the number of customers visiting the store and the range of products to be displayed the store sizes vary for different locations. For e.g.

Location Customer Traffic / Day Space Rent ( Rs in Lacks) Colaba 15000 48

Powai (Hiranandani ) 100-200 1200 3 Mulund 100-150 3000 3.6

Malad (Inorbit) 150-200 1000 1.8 Santacruz 150-200 5000 16

The store size to some extent are influenced by the buying behavior of the customers because in certain locations people buy more of garments and accessories which require less space rather than furniture which takes more space for its display

FEEDBACK

MANUFACTURES

CUSTOMERS

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Product Mix Fabindia provide a unique product mix consisting of Garments, Jewelry, Organic foods, Body care products and Furniture. The Fabindia product range includes ready-to-wear garments and accessories for men, women and children; bed, bath, table and kitchen linen; floor covering, upholstery fabric and curtains CLOTHING

Garments

Men’s Wear

Shirts

Kurtas

Pajamas

Ties

Women’s Wear

Cotton Sarees

Silk Sarees

Kurtis

Chudidars

Salvars

Duppatas / strolls / scarf’s

Skirts

Shirts

Shawls

Boy

Pants

Shirts

Traditional Wear

Girl Skirts

Tops

Traditional Wear

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HOUSEHOLD PRODUCTS

Household products

Furniture

Tables

Beds

Dining tables

Chairs

Dressing tables

Chest

Textiles

Curtains

Bed linen

Pillow covers

Cushions

Mats

Kitchen linen

Napkins & Towels

Lighting

Lamps

Shades

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PERSONAL PRODUCTS

Miscellaneous products

Fabindia Organics

Cereals

Spices

Pulses

Sugar

Tea

Coffee

Honey Preservatives Herbs

Body Care

Soaps

Shampoos Aromatic oils Moisturizers Scrubs Face packs Conditioners Skin care products

Artifacts

Candles

Jute baskets

Soap dispensers

Accessories

Mojaris

Stationary

Jewelry

Hand bags Wallets

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Customer Behavior and Relationship

1) % Turn Out

There is huge number of turn outs in Fabindia. However, it is actually difficult to decide who turn out to be potential buyers. The percentage of turn out can thus be calculated on the basis of the total number of bills wrt the total number of walk-ins. This can be mathematically stated as: % of turn out = Total no of bills Total no of walk-ins By using the above expression for Fabindia we get an approximate ration of 30-40 percentages. That is 30-40% of customers tend out to be the buyers out of all visitors.

2) Revenue Generating Hours

Fabindia has developed a Customer Traffic Summary (CTS) which monitors the different customers visiting the stores. This helps then to keep a check on their regular customers as well as the potential customers that can make a purchase in near future. The most profitable time slot for Fabindia was found out to be 6-10 in the evening where most of the customer belong to working class who prefer to shop after there office hours. While the other profitable time slot is 3-6 where most customers are the college students who visit the store for buying stationeries, imitations and garments.

3) Average Sales Per Transaction Location Price (Rs.) Colaba above 3000 Powai 1300-1500 Mulund 800-1100 Malad 1000-1200 Santacruz 1300-1600 From the above data out of the total number of product sections the garment was found out to be more profitable in which women’s traditional dress being the major contributor to it. The customers who turn out in huge number in Fabindia are there loyal customers who believe in the products supplied to them. Other than normal customers who visit the stores Fabindia also provide there organic food and Body care products to the hospitality industry with major customers being the Taj hotels.

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Trésorie Product Mix Product Range (INR) Images

Elegant and premium furnishings

Rs. 300 to Rs. 800 per meter

Linen, lamp shades, decorative flowers, and home accessories

Rs. 200 to Rs. 10,000

Designer furniture and décor items

Rs. 1,000 to Rs. 50,000

Candle stands, paintings, photo frames, vases, and gift items

Rs. 100 to Rs. 15,000

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Crystal, crockery, artifacts, bath and kitchen accessories

Rs. 100 to Rs. 20,000

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Customer Demographics Number of respondents: 12

Age Structure

25%

50%

17%8%

<20 years

21-35 years

36-55 years

>55 years

Yearly Household Income

17%

49%

17%

17%<4 lakhs

4-8 lakhs

8-12 lakhs

>12 lakhs

Proffession

8%

25%

50%

17%Businessmen

Private Executives

Government Executives

Service Class

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Customer Survey Results

% of luxury products in total spendings

17%

49%

17%

17%

<5%

5-10%

10-20%

>20%

% festival shopping as luxury products

33%

33%

17%

17%

<5%

5-10%

10-20%

>20%

frequency of buying luxury product

17%

17%

17%

49%

monthly

quarterly

six monthly

yearly

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Product Category Bought

33%

17%25%

25%

household

lifestyle

personal care

jew elry

Price Bracket Bought

28%

27%27%

18%

500

500-2000

2000-5000

>5000

Effect of price on buying

92%

8%

yes

no