Final Marketing Plan for Industrie Clothing Pty Ltd - Case Study Example

Competition Industrie Clothing Pty Ltd’s faces competition from numerous sources. These include: Small Retail Shops These are typically small shopsthat stock a variety of products in small scale and are usually locally owned. These have limited capacities to attract customers from far away regions and characteristically target nationals at the community level. Most products sold by retail shops are locally made and the quality of product they offer are widely untested for quality. Most of these rely on traditional marketing methods and their brands are not widely known. Some of these firms offer products that are cheaper in price but of lower quality. Their marketing strategies in most cases do not go beyond the use of posters and word of mouth advertising. Most local retail shops stagnate in growth. Retail shops generally target the poor and middle-class in India. Department Stores These typically specialize in particular types of products such as textiles. Departmental stores usually have huge stocks of products. Most department stores are found in India’s urban areas, are well decorated and therefore serve a wider area. These in many cases are owned and operated by foreign companies. Departmental stores use a variety of means to market their products but very few engage in online trade. Supermarkets Supermarkets are found mainly in urban areas and offer a wide variety of products under one roof. Most often than not, they are managed by professionals and engage in vigorous and proactive marketing. Products sold by supermarkets vary widely in quality as different brands are available – both from local manufacturers and from foreign companies. While specializing in retail, supermarkets also sell products in wholesale. While supermarkets target the average national, hypermarkets target the rich. Apart from online marketing, supermarkets promote their businesses through local newspapers, magazines and other print media, television and radio. Hyper-Markets More like supermarkets, hypermarkets are well established businesses that mainly target the upper middle-class and the rich in India’s society. Hypermarkets generally offer high quality products usually at highly inflated prices and are therefore shunned by poor nationals. Most of India’s hypermarkets are foreign owned and engage in online marketing and trade. They also promote their businesses through local newspapers, magazines and other print media, television and radio. Internet Retailers Internet retailers operate more like departmental stores and generally offer products to any person that can afford the efficiency of online ordering. India has quite a number of internet retailers which are spread across different parts of the country. These companies usually stock moderately and their products and brands include local and foreign-made products. Competitor Growth and Share Analysis The following table shows the different competitors and their respective growth rate and market shares: Competitor Growth rate Market share Hypermarkets 4% 7% Supermarkets 20% 24 Retail shops 56% 34% Departmental stores 58% 35% Product Offering Industrie Clothing Pty Ltd which will own a chain of departmental stores will offer a wide selection of textile products. These will especially be for males across ages; mainly catering for the needs of males between zero to 30 years of age. The company’s products include formal and casual wear for children, youths and adults. In other words, the company stocks clothes that can be worn for practically all occasions. In particular, its products include shirts, t-shirts, tops, denim, jackets, short, and singlets. Industrie Clothing will offer products under its unique “Industrie” brand name. Industrie Clothing will be differentiated from its competitors by its high quality imported branded products packaged in beautiful and attractive branded bags. The company will be committed to shipping ordered products and availing them for collection within ten days from the date of ordering. Further, the organization will employ a staff that is knowledgeable in fashion trends and who are qualified enough to meet needs of discerning clients and their high expectations. In terms of pricing and quality, Industrie Clothing will qualify as one of the most attractive retail and wholesale store within the country. Sales Promotion Objectives The following will be the objectives of Industrie Clothing. Financial objectives 1. To make sales at least an equivalent of 1,000, 000 US dollars by the end of the first trading year in India. Marketing Objectives 1. To create good visibility and reputation for the store in India 2. To create an annual sales growth in India of at least 13 percent and increase average per transaction revenue 3. To penetrate the market and capture at least 57 percent of its targeted consumer market in India 4. To generate at least 1,000 referral and repeat sales within the first year of trading in India Sales Promotions Radio, Television and Print Media Several promotional tools are often used by businesses in India. India currently has well over 700 radio and television stations that adequately serves the country. With such a huge number of broadcasting stations, the cost of advertising by media definitely goes low owing to stiff competition. Three leading radio stations that enjoy a national audience in the country include Radio City, Red FM and Radio Mirchi. In terms of popularity, Radio Mirchi comes first followed closely by Red FM (Chaudhuri, 2008). The three stations charge slightly higher advertising rates compared to other stations which are less popular. Advertising charges on radio and television usually vary depending on the number of adverts ordered for, the time of airing, and the duration the advert takes. Industrie Clothing will mainly rely on radio advertising, placing its adverts on the three main radio stations. India also has quite a number of major print media companies including ET Reality, The Times of India, Delhi Times, Bombay Times and The Economic Times that organizations may effectively use to advertise their products. Newspapers have proved to be a worthy form of advertising in the country as it falls second in effectiveness after radio advertising. Apart from advertising through radio, television and print media, Industrie Clothing will promote its products, brands and services through its active and well designed website. Further, Industrie Clothing Pty Ltd will take advantage of as many networking sites as possible; using them to market the business at all levels. Pay per click advertising will be employed to attract as many potential clients as possible to the company’s chain of stores. One special occasion, the company will give customer discount coupons and premiums to its customers. These shall be offered depending on the occasion and season of trade. These will encourage consumers to make purchases with a hope of wining presents. Personal Selling Personal selling is one of the most common means used to promote business in India. Through personal selling, clients get in touch with sales people and can easily get to make further enquiries about a product or service. Through good customer service, businesses receive repeat sales and referrals. In order to capture as big as a market as possible, the company will engage in personal selling. During special occasions, the company’s sales team will go out to meet clients in different parts of the company and engage in business outside of the business’ premises. This strategy will in effect target clients that would otherwise have opted for competitors’ products. Other Promotional Tools Other promotional tools will be used strategically at special occasions. These will include giving of free samples, sweepstakes, rebates and cash refunds and advertising specialties. Occasionally, patronage rewards will be issued to customers under well planned loyalty programs. Also, the company will use direct-mail campaigns that will especially target those who have had a shopping experience with the company. Through these campaigns, clients will be encouraged to make more visits to the company’s outlets. These campaigns will also be used to keep clients of new products in stock. Distribution Port Selection India is served by several major terminals and ports which is of great importance if goods are to be transported in bulk. India’s ports are commonly used by business people importing or exporting bulk products. Like in other parts of the world, business people in India perceive transportation by sea to be cheap although slow. This means that most goods needed urgently from distant places are preferably transported through other modes which are in turn relatively expensive. India has several public and private owned sea ports that can be used by businesses as container terminals. Major terminals and ports in India include Vishakhapatnam, Nehru, Chennai, Jawaharal, Haldia, New Mangalore, Bombay, Kandla, Calcutta and Mormugao. Among these, Bombay port and container terminal has proved most reliable and therefore is most preferred by businesses and organizations that engage in importation and exportation of products. In order to ensure that transportations costs are kept to the minimum, Industrie Clothing will rely on transporting its products in bulk using containers by sea. Given that Industrie Clothing will get its supplies from Germany to India by sea owing to the low transportation costs involved, the company will rely on at least one port at which point the products will be cleared for entry into the country. Bombay port being one of the country’s biggest ports serves great numbers of ships on daily basis. The port is well equipped and is known to be more reliable than other ports in India. The port is also served by a reliable modern railway line which is useful in transporting merchandise to different parts of the country and even beyond at relatively lower costs. Owing to its size and reliability, the port serves many clients per day and occasionally delays may be experienced in loading and offloading of containers as a result of system faults, and excess customer demands. Such delays however come occasionally but are usually sorted within short periods of time. Documentation Required In order to gain product clearance at any port in India at any one time, both importers and exporters must be in possession of a number of documents. For importers, these include a bill of lading, certificate of origin, cargo release order, commercial invoice, inspection report, customs import declarations, packing list, terminal handling receipts and health/technical certificate. In order to export products from Australia, the exporting company must have a certificate of origin, packing declaration, commercial invoice, packing list, and a dangerous-good declaration form These documents may be acquired in a timely manner by hiring the services of clearing and forwarding companies which effectively facilitate the processing of some of these documents. Freight Forwarder Industrie Clothing will employ the services of a freight forwarder to ensure that its products are fast cleared for entry into the country and reach the stores in a timely manner. In particular, KSR India will be contracted to provide these services.KSR India which has been in the market for over ten years has over the years proved reliable in its service delivery to clients. The freight forwarder will also be contracted to provide warehousing, packing, shipping, road freight, ocean freight, inland transportation and other cargo related services for Industrie Clothing whenever necessary. The company’s trucks will be used to collect goods from the port in case cheaper railway transport fails to apply. Channels of Distribution (Macro Analysis) In general, there has been a significant increase in distribution channels in India. According to the Government of India, most established companies in India use the traditional distribution structure which consists of redistribution stockiest, retailers and wholesalers. In the textile industry, India has a relatively big competitive base. Statistics indicate that just about four billion US dollars (14%) out of 29 billion US dollars apparel market is offered for sale through modern retail outlets. This means that any strategy that specifically targets the Indian market should ultimately be focused on traditional retail. The company will supply its products directly to supermarkets, departmental stores, wholesale stores and hypermarkets, and indirectly to retailers. This will ensure that the products reach consumers at all levels. Distribution shall be accomplished mainly through intermediaries and distributors. Also, products will be distributed to the company’s chain of departmental stores that will be established at strategic points within the country. The store shall receive orders by phone or online through emails and through its website. Once necessary cash deposits have been made, the orders shall be made with the parent company that is based in Australian and delivered to the store. Retailers India’s retail distribution outlets are approximated at over 12 million with apparel retail outlets being among the fastest growers. The apparel sector has indeed proved to have the highest number of foreign and domestic brands venturing into the market. The sector has also seen growing consumer willingness to pay for quality and product brands. In 2008, the industry grew by close to ten percent. This is a considerable amount of growth taking into consideration the phases of negative growth in many countries. The figure below shows how the apparel market has progressively grown over the years. Figure1: Numbers of Indian apparel markets by years. Courtesy of Technopak, 2009. Warehousing Considering the high costs involved in the construction and maintenance of a warehouse every month, it will be more economical for the company to contract a reputable company to provide warehouse services at reasonable costs. Import/export Agents India is actively involved in international trade and therefore imports and exports goods and services. The country, in fact has a huge market for many of its products overseas. India exports petroleum products, machinery and agricultural products to different countries and continents. While the country exports textile products, it also imports branded apparels from countries such as the United States, Canada and members of the European Union. The importance of import and export agents cannot be undervalued. The company will constantly use their vital services and compensate them depending on agreements made for the delivery of specific services. Cost of Transport, Handling and Shipment of Goods The organization shall incur shipment costs that are directly related to some extent to quantity of goods transported among other factors. With an aim of minimizing its costs, the company will transport products in bulk and will hire only reliable and affordable service providers. The country’s well developed railroad network covers which covers a total of 63,330 kilometers will be quite useful in transporting goods to different warehouses located in different parts of the country. In places not served by railway lines, the organization will use road transport. A contract will be signed with a well established and reliable road transport service provider to complement those offered by the company’s trucks. Insurance Costs The company will ensure that its products are safe on transit and at every point of sale. Through this means, the company will be shielded to a great extend from serious losses. While necessary preventative measures will be taken to lower the risk of destruction, theft and loss, it is a fact that these can be compromised. In order to prevent losses that may occur due to various reasons and sources, the company will insure its products and premises against risks such as theft, motor vehicle accidents, shipping risks and fires. While India has several insurance companies that may offer valuable insurance services, Industrie Clothing will rely only on well established and trustable service providers. The company will basically rely on two insurance companies both of which must have been in existence for at least ten years, reputable and offering its products at affordable costs. Import taxes India’s foreign trade policy was changed in April 2008 with an aim of reducing import duty under the EPCG scheme to three percent down from five percent. This was done in order to promote the export of services as well as encourage modernization of manufacturing industries (Indian Government, 2009). This change will be greatly beneficial to companies that manufacture products such as those that make textile products using outdated machinery. Apart from excise tax, organizations in India have to remit value added tax which is usually a percentage of what the company sells its products. Typically the amount of VAT is set at 12.5%. Wholesale and Retail Mark-Ups and Discounts Giving customers discounts is a great means to attract and retain customers. Discounts also ensure that customers endeavor to pay their debts in time with an aim of capitalizing on their benefits. Cash discounts shall be given to bulk buyers who pay their bills within stated periods of time. Only approved regular customers will be given opportunities to take products on credit and pay for them within a limited period of time. Accordingly, trade discounts will be given to customers who buy products in bulk. Trade discounts will be a 4% percentage of the total cost of goods sold above a certain amount. Retail mark-ups will generally be set at 40% while wholesale markups will be set at 35%. Price Determination Product Prices The company’s pricing strategy is based on offering customers high value compared to other businesses offering similar products in the market. The company’s prices will vary depending on the particular product’s quality, size, timeliness in acquiring the product and convenience. The company will consistently offer prices that are below those offered by hypermarkets, supermarkets and most department stores while higher than those offered by retail shops whose products are usually of lower quality. In India, the company will cut for itself a special niche by maintaining its current products and offering these at prices that are affordable to the majority of locals. The company shall price its products in such a way that it retains a gross margin of 33% per product. Terms of Sale While the company will take necessary measures to ensure that its products are of high quality and that they meet all customer expectations, products will be sold on “as is” basis. Also, since market conditions keep changing, the company will have the right to determine product availability and pricing without prior notice to its customers. Sale of products will purely be based on willing buyer-willing seller basis. Product once sold will be may be reaccepted subject to certain conditions: The goods must be in excellent condition, unworn and unwashed. Upon receiving returned goods, they shall be inspected and if acceptable, the customer will receive a full refund. Methods of Payment Owing to advancements in technology, buying of products using debit and credit cards has become a norm in India. In the country, all major supermarkets, hypermarkets and departmental stores accept payment by major credit and debit cards. Most local retail stores and numerous smaller departmental stores and supermarkets still do not enjoy the benefits of effecting cashless transactions. Yet another form of payment for organizations in India involves electronic check conversion which involves the electronic processing of checks. This form of payment, while offering room for fast transfer of money, is still quite new and is widely unknown by most locals. Only a few well established organizations currently use the systems. The company will institute measures to ensure that electronic check, and credit and debit card transactions are possible to give greater convenience to customers who are increasingly in need of better means of transferring money. Online transactions will also be made possible considering that India has a well established internet infrastructure with many people spread across the country having access to the internet. Read More