CHAPTER – 1

MARKETING MANAGEMENT – AN INTRODUCTION

Introduction
Marketing Management is a business discipline which is focused on the practical application of
marketing techniques and the management of a firm's marketing resources and activities. Rapidly
emerging forces of globalization have compelled firms to market beyond the borders of their home
country making International marketing highly significant and an integral part of a firm's
marketing strategy. Marketing managers are often responsible for influencing the level, timing, and
composition of customer demand accepted definition of the term. In part, this is because the role of
a marketing manager can vary significantly based on a business' size, corporate culture, and
industry context. For example, in a large consumer products company, the marketing manager may
act as the overall general manager of his or her assigned product To create an effective, cost-
efficient Marketing management strategy, firms must possess a detailed, objective understanding
of their own business and the market in which they operate. In analyzing these issues, the
discipline of marketing management often overlaps with the related discipline of strategic
planning.

Evolution of Marketing

Earlier orientations namely, the production orientation, the product orientation and the selling
orientation gave rise to marketing orientation based on the changing circumstances.

a) Production Orientation: Till 1950s, a firm focused on producing as much as possible of a

given product or service. Thus, this signifies a firm exploiting economies of scale, until the
minimum efficient scale is reached. A production orientation may be deployed when a high
demand for a product or service exists, coupled with a good certainty that consumer tastes do not
rapidly alter.

b) Product Orientation: In the next stage the manufacturer not only concentrated on economies
of scale but also the quality of the Product. A firm would also assume that as long as its product
was of a high standard, people would buy and consume the product.

c) Selling Orientation: In 1960’s the orientation has been focused primarily on the
selling/promotion of a particular product, and not determining new consumer desires as such.
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Consequently, this entails simply selling an already existing product, and using promotion
techniques to attain the highest sales possible. Such an orientation may suit scenarios in which a
firm holds dead stock, or otherwise sells a product that is in high demand, with little likelihood
of changes in consumer tastes diminishing demand.

d) Marketing Orientation: From 1970 on wards business man started realizing the value of
marketing. It involves a firm essentially basing its marketing plans around the marketing
concept, and thus supplying products to suit new consumer tastes. As an example, a firm would
employ market research to gauge consumer desires, use R&D to develop a product attuned to the
revealed information, and then utilize promotion techniques to ensure persons know the product
exists.

e) Customer Orientation: Recent approaches in marketing is the relationship marketing with

focus on the customer, the business marketing or industrial marketing with focus on an
organization or institution and the social marketing with focus on benefits to the society. New
forms of marketing also uses the internet and are therefore called internet marketing or more
generally e-marketing, online marketing, search engine marketing, desktop advertising or
affiliate marketing. It tries to perfect the segmentation strategy used in traditional marketing. It
targets its audience more precisely, and is sometimes called personalized marketing or one-to-
one marketing.

Marketing Defined
The term Marketing has been defined in various ways. There are many definitions of marketing.
The better definitions are focused upon customer orientation and satisfaction of customer needs.

The Chartered Institute of Marketing define marketing as 'The management process responsible
for identifying, anticipating and satisfying customer requirements profitably'.

A close look at this definition in detail shows that Marketing is a management responsibility and
should not be solely left to junior members of staff. Marketing requires co-ordination, planning,
implementation of campaigns and a competent manager(s) with the appropriate skills to ensure
success. Marketing objectives, goals and targets have to be monitored and met, competitor
strategies analysed, anticipated and exceeded. Through effective use of market and marketing
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research an organisation should be able to identify the needs and wants of the customer and try to
delivers benefits that will enhance or add to the customers lifestyle, while at the same time
ensuring that the satisfaction of these needs results in a healthy turnover for the organisation.

Philip Kotler defines marketing as 'satisfying needs and wants through an exchange process'.
Within this exchange transaction customers will only exchange what they value (money) if they
feel that their needs are being fully satisfied; clearly the greater the benefit provided the higher
transactional value an organisation can charge.

Adcock defines marketing as ‘The right product, in the right place, at the right time, at the right
price’

According to Palmer ‘Marketing is essentially about marshalling the resources of an organization

so that they meet the changing needs of the customer on whom the organization depends.’ This
is a more recent and very realistic definition that looks at matching capabilities with needs.

Bartles defines Marketing as ‘the process whereby society, to supply its consumption needs,
evolves distributive systems composed of participants, who, interacting under constraints -
technical (economic) and ethical (social) - create the transactions or flows which resolve market
separations and result in exchange and consumption.’ This definition considers the economic
and social aspects of marketing.

Peter Drucker says ‘Marketing is not only much broader than selling, it is not a specialized
activity at all It encompasses the entire business. It is the whole business seen from the point of
view of the final result, that is, from the customer's point of view. Concern and responsibility for
marketing must therefore permeate all areas of the enterprise.’

Barwell’s view of marketing is ‘customer focused philosophy is known as the 'marketing

concept'. The marketing concept is a philosophy, not a system of marketing or an organizational
structure. It is founded on the belief that profitable sales and satisfactory returns on investment
can only be achieved by identifying, anticipating and satisfying customer needs and desires.’

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According to Jobber marketing is all about achievement of corporate goals through meeting and
exceeding customer needs better than the competition.

The term marketing has changed and evolved over a period of time, today marketing is based
around providing continual benefits to the customer, these benefits will be provided and a
transactional exchange will take place.

Scope of Marketing
Marketing people are involved in marketing 10 types of entities: goods, services, experiences,
events, persons, places, properties, organizations, information, and ideas.

i) Goods. Physical goods constitute the bulk of most countries’ production and marketing effort.
The United States produces and markets billions of physical goods, from eggs to steel to hair
dryers. In developing nations, goods—particularly food, commodities, clothing, and housing—
are the mainstay of the economy.

ii)Services. As economies advance, a growing proportion of their activities are focused on the
production of services. The U.S. economy today consists of a 70–30 services-to-goods mix.
Services include airlines, hotels, and maintenance and repair people, as well as professionals
such as accountants, lawyers, engineers, and doctors. Many market offerings consist of a variable
mix of goods and services.

iii)Experiences. By orchestrating several services and goods, one can create, stage, and market
experiences. Walt Disney World’s Magic Kingdom is an experience; so is the Hard Rock Cafe.

iv)Events. Marketers promote time-based events, such as the Olympics, trade shows, sports
events, and artistic performances.

v)Persons. Celebrity marketing has become a major business. Artists, musicians, CEOs,
physicians, high-profile lawyers and financiers, and other professionals draw help from celebrity
marketers.

vi) Places. Cities, states, regions, and nations compete to attract tourists, factories, company
headquarters, and new residents. Place marketers include economic development specialists, real
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estate agents, commercial banks, local business associations, and advertising and public relations
agencies.

vii) Properties. Properties are intangible rights of ownership of either real property (real estate)
or financial property (stocks and bonds). Properties are bought and sold, and this occasions a
marketing effort by real estate agents (for real estate) and investment companies and banks (for
securities).

viii)Organizations. Organizations actively work to build a strong, favorable image in the mind of
their publics. Philips, the Dutch electronics company, advertises with the tag line, “Let’s Make
Things Better.” The Body Shop and Ben & Jerry’s also gain attention by promoting social
causes. Universities, museums, andperforming arts organizations boost their public images to
compete more successfully for audiences and funds.

ix) Information. The production, packaging, and distribution of information is one of society’s
major industries.6 Among the marketers of information are schools and universities; publishers
of encyclopedias, nonfiction books, and specialized magazines; makers of CDs; and Internet
Web sites.

x) Ideas. Every market offering has a basic idea at its core. In essence, products and services are
platforms for delivering some idea or benefit to satisfy a core need.

It can be seen that the scope of marketing is widening day by day which is adopting
various promotional trends to improve business are gaining significant importance in the era of
Globalization in order to sustain in the Global Market. A firm in the market economy survives by
producing goods that persons are willing and able to buy.

A formal approach to this customer-focused marketing is known as SIVA (Solution,

Information, Value, and Access). This system is basically the four Ps renamed and reworded to
provide a customer focus. The SIVA Model provides a demand/customer centric version
alternative to the well-known 4Ps supply side model (product, price, placement, promotion) of
marketing management.

Product → Solution

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 Promotion → Information

Price → Value

Placement → Access

Figure 1.1 - SIVA Model

From the above discussion it can be understood that the trader is compelled to use marketing
concepts in order to reach the targets and survive in this global market.

Importance of Marketing
To describe the importance of marketing, one need not look further than this quote from Regis
McKenna,
“Marketing is everything, and everything is marketing.”
Everyone is exposed to marketing everyday, even when they don’t know it. Billboards surround
the nation’s roads. Logos appear everywhere from t-shirts to the center field of the “Tostitos”
Fiesta Bowl. When a teenager is begging his dad to use the family car, he is in fact, marketing
himself to his father for the exchange of the keys. And that is what marketing is about.

Trying to create exchanges that satisfy and benefit both parties. No consumer can escape from
marketing campaigns, and no business should be operating without a marketing plan to identify
potential customers, meet their needs and wants, and keep them coming back for more. The
important elements of a marketing plan. How your future customers are identified and place
between the cross-wires with marketing research and target marketing. To get a specific message
to a specific customer, one must be familiar with direct marketing. Internet marketing is one of
more recent trends that many organizations are looking at. Overall this section should help you
learn about the importance for small businesses to implement marketing plans

Marketing is a very important aspect in business since it contributes greatly to the success of the
organization. Production and distribution depend largely on marketing. Many people think that
sales and marketing are basically the same. These two concepts are different in many aspects.
Marketing covers advertising, promotions, public relations, and sales. It is the process of
introducing and promoting the product or service into the market and encourages sales from the
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buying public. Sales refer to the act of buying or the actual transaction of customers purchasing
the product or service.

The traditional selling concept emphasizes selling existing products. The philosophy here is that
if a product is not selling, more aggressive measures must be taken to sell it—e.g., cutting price,
advertising more, or hiring more aggressive (and obnoxious) sales-people. The marketing
concept, in contrast, focuses on getting consumers what they seek, regardless of whether this
entails coming up with entirely new products.

The marketing process involves ways that value can be created for the customer by creating
Form Utility which involves the idea that the product is made available to the consumer in some
form that is more useful than any commodities that are used to create it (Product), Place Utility
which refers to the idea that a product made available to the customer at a preferred location is
worth more than one at the place of manufacture (Place), Time Utility that involves the idea of
having the product made available when needed by the customer (Promotion) and Possession
Utility involves the idea that the consumer can go to one store and obtain a large assortment of
goods from different manufacturers during one shopping occasion at reasonable rates(Price).

The 4 Ps—product, place (distribution), promotion, and price—represent the variables that are
within the control of the firm (at least in the medium to long run). These four P’S are the basic
elements of the Marketing Mix.

Since the goal of marketing is to make the product or service widely known and recognized to
the market, marketers must be creative in their marketing activities. In this competitive nature of
many businesses, getting the product noticed is not that easy.

Strategically, the business must be centered on the customers more than the products. Although
good and quality products are also essential, the buying public still has their personal
preferences. If you target more of their needs, they will come back again and again and even
bring along recruits. If you push more on the product and disregard their wants and the benefits
they can get, you will lose your customers in no time. The sad thing is that getting them back is
the hardest part.

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Marketing Promotes Product Awareness to the Public
It has already been mentioned in the previous paragraph that getting the product or service
recognized by the market is the primary goal of marketing. No business possibly ever thought of
just letting the people find out about the business themselves, unless you have already
established a reputation in the industry. But if you are a start-out company, the only means to be
made known is to advertise and promote. Your business may be spending on the advertising and
promotional programs but the important thing is that product and company information is
disseminated to the buying public.

Various types of marketing approaches can be utilized by an organization. All forms of

marketing promote product awareness to the market at large. Offline and online marketing make
it possible for the people to be educated with the various products and services that they can take
advantage of.

A company must invest in marketing so as not to miss the opportunity of being discovered. If
expense is to be considered, there are cost-effective marketing techniques a company can embark
on such as pay-per-click ads and blogging.

Marketing Helps Boost Product Sales

Apart from public awareness about a company’s products and services, marketing helps boost
sales and revenue growth. Whatever your business is selling, it will generate sales once the
public learns about your product through TV advertisements, radio commercials, newspaper ads,
online ads, and other forms ofmarketing. The more people hear and see more of your
advertisements, the more they will be interested to buy.

If your company aims to increase the sales percentage and double the production, the marketing
department must be able to come up with effective and strategic marketing plans.

Marketing Builds Company Reputation

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In order to conquer the general market, marketers aim to create a brand name recognition or
product recall. This is a technique for the consumers to easily associate the brand name with the
images, logo, or caption that they hear and see in the advertisements.

For example, McDonalds is known for its arch design which attracts people and identifies the
image as McDonalds. For some companies, building a reputation to the public may take time but
there are those who easily attract the people. With an established name in the industry, abusiness
continues to grow and expand because more and more customers will purchase the products or
take advantage of the services from a reputable company.

Types of Markets
A market is simply a combination of buyers and sellers. These two groups can meet in a physical
place (a shop, for example) or can meet across miles, aided by telecommunications
(increasingly, the internet). They meet to buy and sell goods or services. The term “Market”
is simply a short hand for “any place or situation where two or more people meet to
exchange goods or services”.
In the study of marketing, it is essential to consider the different types of market that exist.
Markets can be analysed via the product itself, or end-consumer, or both. The most
common distinction is between consumer and industrial markets.

a) Consumer Markets: Consumer markets are the markets for products and services bought by
individuals for their own or family use. Goods bought in consumer markets can be categorised in
several ways:
i) Fast-moving consumer goods (“FMCG's”): These are high volume, low unit value,
fast repurchase. – Examples include: Ready meals; Baked Beans; Newspapers
ii) Consumer durables : These have low volume but high unit value. Consumer
durables are often further divided into:
– White goods (e.g. fridge-freezers; cookers; dishwashers; microwaves)
– Brown goods (e.g. DVD players; games consoles; personal computers)
iii) Soft goods – Soft goods are similar to consumer durables, except that they wear out
more quickly and therefore have a shorter replacement cycle. – Examples include clothes, shoes
iv) Services (e.g. hairdressing, dentists, childcare)
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b) Industrial Markets:
Industrial markets involve the sale of goods between businesses. These are goods that are not
aimed directly at consumers. Industrial markets include
• Selling finished goods, – Examples include office furniture, computer systems
• Selling raw materials or components, – Examples include steel, coal, gas, timber
• Selling services to businesses, – Examples include waste disposal, security, accounting
& legal services
Industrial markets often require a slightly different marketing strategy and mix. In particular, a
business may have to focus on a relatively small number of potential buyers (e.g. the IT Director
responsible for ordering computer equipment in a multinational group). Whereas consumer
marketing tends to be aimed at the mass market (in some cases, many millions of potential
customers), industrial marketing tends to be focused.

Functions of Marketing

The mission of marketing is satisfying customer needs. In developed societies marketing is

needed in order to satisfy the needs of society's members. Industry is the tool of society to
produce products for the satisfaction of needs.

A. Connective Function: Marketing has a connective function in society. It connects

supply and demand or production and consumption. At micro-level, marketing builds and
maintains the relationship between producer and consumer. At business unit level, marketing can
have an integrative function. It integrates all the functions and parts of a company to serve the
markets.

B. The societal Function: In modern society production and consumption are apart from
each other. Marketing connects them. From the societal point of view, marketing is a philosophy
which shows how to create effective production systems and consequently prosperity.

Business is a subsystem of society, which has both a social and an economic role. Thus, a
company must operate in a way that will make possible the production of benefits for society
and, at the same time, produce profits for the company itself. The role of marketing in society
means also responsibilities. In addition to economic and social responsibility, ecological

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responsibility is now days emphasized. According to some definitions, environmental
responsibility is part of social responsibility. Improvement of marketing is related to the
changing emphases of economic, social and environmental responsibility.

Goodpaster and Matthews (1982) analyse three patterns of thought which can be distinguished
for a company's social responsibility. They are as under:

1. The invisible hand view concludes that the only social responsibilities of business
organizations are to make profits and to obey laws. Free and competitive market-place will
ensure the moral behaviour of companies. The common good is best served when individuals
and organizations pursue competitive advantage.

2. The hand of government view concludes that companies are to pursue rational and
purely economic objectives. It is the regulatory hand of the law and political process which
guides these objectives towards common good.

3. The hand of management view would put the responsibility of a company's actions into
the hands of the company itself. It is concluded that the moral responsibilities of an individual
may be projected into an organization, and that the concepts of an individual's responsibility and
a company's responsibility are largely parallel. Therefore, organizations should be no less or no
more responsible than ordinary persons. The development of marketing is clearly related to
adopted values which may be seen in the patterns of thought mentioned above.

C. Traditional and Integrating Function: Traditionally, marketing has been seen as a

link between production and customer. The situation could be captured better by using the term
selling. Selling is associated to the so- called "Production and Sales Eras of Marketing". Slogans:
"Make what you can make" and "Get rid of what you have made" describe the traditional view of
marketing/selling. Figure shows the role of traditionally oriented marketing in (traditionally
oriented) management.

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 Figure: 1.2 : The traditional functions of Marketing

Marketing was born out of a need to take better into consideration the demand factors in
production planning. The function of marketing is to channel information of consumer needs to
the production and satisfaction of needs to consumers. The basic power of marketing is the
aspiration to produce and sell only that kind of products which have demand. Marketing
integrates the whole company to serve this demand. Marketing aims at effective production
systems, where information is transmitted effectively between production and consumption.

Figure : 1.3 : The Integrating Function of Marketing

According to McKenna (1991) marketing must become both knowledge-based and experience-
based.

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Knowledge-based marketing requires the company to master a scale of knowledge: of the
technology in which it competes; of its competition; of its customers; of new sources of
technology that can alter its competitive environment; and of its own organization, capabilities,
plans and ways of doing business.

Experience-based marketing emphasizes interactivity, connectivity and creativity.

Companies must spend time with customers, constantly monitor competitors and develop a
feedback-analysis system that turns this information from market into new product intelligence.
At the same time, these companies must evaluate their own technology and cooperate with other
companies to create a mutually advantageous systems and solutions. The functions of marketing
are summed up in Figure 1.5

Figure: 1.4 : The Functions of Marketing Management in Broad Sense

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 CHAPTER - 2
THE DESIGN OF THE STUDY
Introduction
Marketing Management is an important functional area of management without which the
operating cycle of a manufacturing concern will be incomplete and without it being active the
whole operating cycle will collapse leading to the closure of the business. It is not sufficient if a
business firm is able to manufacturing the product, it should also be able to sell it. Marketing is
a necessary activity that encompasses the entire business and is vitally important to sound
business health. It is viewing the entire business from the customer's viewpoint takes into
account every aspect of the marketing mix from the product to price, distribution channels and
marketing communications. All these factors affect the customer's response to a product or
service.

"Marketing is the process of planning and executing the conception, pricing, promotion and
distribution of ideas, goods and services to create exchanges that satisfy individual (customer)
and organizational objectives". The concept of marketing as a business philosophy defines
marketing as a process that is intended to find, satisfy and retain customers while business makes
a profit. But central to all these definitions is the role of the customer and his relationship to the
product (i.e. whether he considers the product or service to meet a need or want). That is where
the marketing management comes into the picture. Therefore, Marketing Management is
concerned with the activities involved in bringing the product from the place of manufacturing to
the place of consumption and make the customer delightful.

Need for the of study

The importance of marketing management needs no emphasis. What type of products or services
would be profitable to introduce in the market? How a business is able to decide the 4 or 6 Ps of
its marketing management? How it is able to plan, organize, and control its marketing activities?
How it is able to promote its products? What is the influence of the habits, culture, economic
status, etc., on the sales of its products and how it is tackling them? Whether its has to make any
changes in the product or its packing or price etc.,? How does it carry out its marketing research
activities? And finally, how it is able to sell its product and keep its customers delightful and

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retain them? These questions call for an empirical study. To all these questions a cloth business
in general and the retail cloth business in particular is no exception.

Statement of the Problem

Hyderabad is a cosmopolitan city with a history of 400 plus years and providing living and
livelihood to the people with different religions, cultural backgrounds, customs, traditions,
habits, occupations, economic status, etc., and is one of the major cities of our Country.
Hyderabad is also a representative of the other major cities of country. Any business in
Hyderabad should cater to the needs of all these people to be successful. With this backdrop the
present study is conceived to study The Trends in Retail Cloth Business in Hyderabad. .

Objectives of the Study

The specific objectives of the present study is multifold. It aims toare :
• To study the present status of retail cloth business in Hyderabad.
• To analyze retail cloth business in Hyderabad in respect of
o the recent promotional trends in retail cloth business in Hyderabad.
o the implementation of the sales promotion and advertising in order to increase the
cloth business in Hyderabad.
• To examine the importance of promotional trends on
o Buyers
o Retailers
o Society
• To offer suggestions for the improvement of the retail cloth business in Hyderabad.

Hypothesis
To arrive at the logical conclusions the following hypotheses are formulated and the same would
be tested with the empirical data collected.
1) Different trends used in promoting the cloth business and increasing its contribution to
National Income and GDP.

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 2) Promotional trends in cloth business offers multiple choices in variety of dresses at
competitive prices
3) Recent promotional trends help retail trade to enhance their turnover and thereby
increasing the productivity of the commodity.

Methodology
Survey method of research is adopted. The required data is collected from
• the primary sources, i.e., A structure schedule of questions is administered on the sample
respondents and in some cases personal interviews were also conducted to collect the
data
• the secondary sources, include, related websites, journals, magazines and other published
data.

Sampling
Though actual number of retail cloth outlets in Hyderabad believed to be exceeding 2500, only
1512 retail cloth merchants have registered with the retail cloth association statistics as regular
retail merchants. A sample of 126 retail cloth outlets is drawn on random sampling basis for this
study. The sample retail cloth respondent shops are listed as per different locations of
Hyderabad. elected.

Tools for collecting the data

A structured schedule of questions was used for collection the required data from the sample
respondents. The questions are carefully framed to cover the entire retail business with out
antagonizing the retailer who is running the business. The design of the schedule is by and large
a comprehensive one to get the relevant data required for the study. As the number of questions
is fairly large in number and run into forty, enough care is exercised to adopt a friendly
conversational style in order to put the busy retailer in a comfortable stance to give correct
answers readily.

The above aspect is felt very important since quite a number of questions are inter-dependant and
one answer influences the other answer, proper care is taken to bring correlation between
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different answers given by the in charge of the shop. Adequate importance has been given to the
convenience of the retailer by visiting them during relatively less rush hours of the day.
Tools for analyzing the data
Statistical tools such as averages, percentages, ratios and quotients have been extensively used
for analysis.

Geographical area covered & Limitation of the Study

The scope of study is limited to geographical area of Hyderabad. On the random basis of
sampling 126 responding shops were selected for the purpose of survey.

Limitations of the study

• It is quite likely that some of the persons might have deliberately given wrong answers
and semi correct answers. The limitation of the study is therefore the possibility of the
incorrect answers that may have a bearing on the outcome. However, as stated above, the
limitation was overcome by proper persuasion in soliciting the correct answers.
• In view of the convincing approach with an assurance of confidentiality and clarity of
the purpose i.e. research apart from an assurance that their replies are not legally binding
on them, the answers are taken to be true to a greater extent.

Chapterization
The present study is divided into 5 Chapters.
• Chapter 1 provides A Theoretical Back Drop On Marketing Management.
• Chapter 2 presents The Design Of The Study
• Chapter 3, gives A Profile Of Retail Cloth Business In Hyderabad.
• Chapter 4 analyzes The Trends In The Retail Cloth Business In Hyderabad.
• Chapter 5 summarizes the Findings and Offers Suggestions in the light Of Findings
for the improvement.

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 CHAPTER -3
A PROFILE OF CLOTH BUSINESS
Cloth Business – An International Scenario
Germany is Europe's number one fashion market. With retail sales of around € 55bn, Germany
takes the lead before the UK, Italy and France. The German fashion retail market offers not only
a big market, but one marked by a great variety. Big chain stores, international chains and
discounters have been increasing their presence in Germany for years and meanwhile dominate a
big part of the market, but Germany is still home to a large number of independent multiple
retailers from small to large.

No other European country has a retail environment as varied and complex. On the one hand,
competition is forcing companies to focus on few, strong brands, on the other hand, assortments
need to be attractive. That makes retailers in Germany particularly open to new and interesting
collections.

Italy is a major center of European fashion. Italians are chic. Even people in small towns spend a
great deal of money on their wardrobes and dress well at all times. They dress elegantly but
conservatively. Jackets and ties are required in better restaurants. Old, torn, dirty clothing are
seldom seen and not appreciated. Men and women dress conservatively and formally for
business (men: suits and ties; women: dresses or suits).

The Italian textile and clothing industry is unique, lively, innovative, and leader in the world. Its
innovation ability represents its main and most lasting competitive advantage. The “mission” of
the Italian fashion system lies in offering original, and very distinctive products, which
meanwhile answer to consumer’s taste and meet his needs. This also implies a continuous
improvement in technical performances of fibres, yarns, fabrics, and finishing. The success of
the whole chain - from the first processes on fibres to fabrics, finishing operations, and final
products for the market - is favoured by the interaction of a sophisticated manufacturing
network, where the strength of each element is at the same time a condition and a function of the
vitality of the whole system. This dynamic combination of productive, creative, and managing

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activities involves about 67,500 industrial companies with large, medium, and even very small
scale operations. This unique mix still turns out to be the main point of strength of Italian Textile
and Clothing industry, whose about 540,000 employees contribute to roughly 10% of the
manufacturing sector’s added value. The strong export trend of the Textile and Clothing industry
is shown by the turnover share totalized abroad, amounting to 62% of total sales. The significant
flow of exports ensures a foreign trade surplus of about 12 billion Euros, which compensate, to a
large extent, the country’s deficit in energy and agriculture. Besides the value which can be
measured in figures, Italian fashion, strongly founded on Textile and Clothing, has enormously
contributed to the definition of the ideas of Italian “good taste” and “life quality”, with positive
effects on Italian products all over the world.

The international success of Italian Textile and Clothing has been favoured by the co-existence,
on an equal status and importance basis, of large companies and SMEs. The innovation ability as
well as the attention to the quality of materials and processes characterize large concerns, whose
brand names can be found in the shops all over the planet. Medium-sized enterprises are often
world leaders in particular market niches, while small companies are specialized and excel in one
or more specific production stages. The whole chain is made of about 67,500 enterprises, of
which roughly 90% with less than 15 employees.

The Italian Textile and Clothing industry is strongly export-oriented: actually, more than 62% of
the total turnover is achieved thanks to foreign markets. The figure of 26.6 billion Euros in
foreign sales totalized last year represents 10% of the whole Italian manufacturing industry’s
export value. In 2004 net export reached 11.7 billion Euros, i.e. 31% of the whole manufacturing
industry’s trade surplus. Other fashion related products (such as shoes, goldsmithery, leather
products, cosmetics and glasses) accounted for a further 10 billion Euros surplus. That’s to say
that the “Oil of Italy” can roughly completely compensate for the country’s deficit in energy,
food and agriculture. In 2004, the flows of Italian Textile and Clothing products towards
European Union markets (15 countries) raised by 1.4%, while those towards the 10 new
members decreased by 13%. Outside EU25 (which absorbed 54% of total Italian Textile and
Clothing foreign sales), exports to USA (third largest market for Italian fashion system) recorded
a drop of 2.6%, Japan lost 8.5%, while Russia (tenth biggest customer) was the most dynamic
market (+11,2%). A significant increase was also recorded by exports to Hong Kong (+5,1%).
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On import side, China has furthermore consolidated its leadership position among top Italy’s
suppliers (+13.7%). In 2003 Italy was the third world’s exporter of textile products (about 8% of
the total amount), after China and USA, recording a CAGR loss (1995-2003) of roughly 1%. In
2003 among the main clothing exporters our country was placed just behind China, however
showing a CAGR drop near to 2%.

This heritage of specialization and this network of relationship find a special form of
organization in the so-called “industrial districts”, the Italian contribution to industrial
organization models. Actually, the Italian fashion industry is located into an archipelago of
specialized districts: Como for silk fabrics, Biella, Prato, and Vicenza for wool yarns and fabrics,
Castelgoffredo for women’s stockings, Carpi and Treviso for knitwear, Empoli for leatherwear,
Pesaro for denim apparel, Grumello for buttons, Brescia for socks producing machinery, and so
on. The close interactions between different companies, which in most cases are located in
specialized districts, are case studies at the main universities and business schools all over the
world as a model of successful industrial organization. Industrial districts are particular
manufacturing structures, merging advanced technical and organisational solutions with the
craftsman tradition which represents an important springboard for creativeness, allowing the
quick production of prototypes, small production lots, and a large number of product variants. In
some of these specialized districts, the Textile and Clothing industry is a fundamental element of
social relations, local culture and, of course, business practice.

The industry’s attention to the consumer’s behaviour was favoured in Italy by the existence of an
articulated retail system, with a significant presence of independent retailers. The need to
modernize retail outlets is leading to a rapid evolution of the retail system towards more highly
structured models with larger sales areas. The retail system of the early 21st century requires a
stronger producer - retailer - consumer interaction, a new technology in communication as well
as a new organisation of the Textile and Clothing production cycle from the first yarn processing
to the point of sale. In this direction is moving the huge flow of investments and reorganization
projects underway in Italian companies all over the production pipeline.

20
The Retail value of Italian Textile and Clothing industry focused on technology, innovation,
quality and price. It turned technology into art in order to transmit to consumers an unique
image.

AMERICA - Typical Business Plan of an American Cloth Manufacturer : New Look, Inc.

a) Market Description : Apparel sales are driven by economic conditions, demographic trends,
and pricing. Fashion, while important for an individual company, plays a limited role in
overall market demand. Sales of apparel at the retail level rose approximately 4.7% in 1998,
according to NPD Group, Inc., a market research firm located in Port Washington, New
York.

In 1998, Americans purchased approximately $215 billion of apparel and footwear. According to
NPD Group Inc., approximately $177 billion was spent on clothing in 1998. The remaining $38
billion was used to purchase more than 1.1 billion pairs of shoes, based on data from Footwear
Market Insights (FMI), a market research firm based in Nashville, TN. With the U.S. population
at 270 million, this works out to roughly $800 a year per capita spent on apparel and footwear.

The apparel and footwear industries are highly competitive, and both have attempted to lower
manufacturing costs by moving production to such places as Mexico, Central America, and Asia.
As a result, employment levels for U.S. manufacturing industry employees fell to 713,000 in
February 1999, according to the Department of Labor. This was down 10% from the year-earlier
level and 52% from 1970. The number of domestic non-rubber footwear employees declined
15%, year to year, in 1998, and 86% since 1968, according to the Footwear Industries of
America, an industry trade group based in Washington, D.C.

b) The Apparel Industry : The U.S. apparel industry is large, mature, and highly fragmented.
Apparel sold in the United States is produced both domestically and in foreign locations.
According to estimates from the American Apparel Manufacturers Association (AAMA), an
industry trade group based in Arlington, Virginia, the dollar value of domestic apparel
production was $39 billion at the wholesale level in 1997 (latest available), which was less than
the $46 billion (U.S. wholesale value) of goods imported into the United States. In addition, $15
billion of goods were produced in both the United States and other countries.
21
The U.S. apparel market can be divided into two tiers: national brands and other apparel.
National brands are produced by approximately 20 sizable companies and currently account for
some 30% of all U.S. wholesale apparel sales. The second tier, accounting for 70% of all apparel
distributed, comprises small brands and store (or private-label) goods.

Apparel is sold at a variety of retail outlets. Based on data from NPD Group, discount stores, off-
price retailers, and factory outlets accounted for 30% of 1998 apparel sales, while specialty
stores and department stores accounted for 22% and 18%, respectively. Another 17% were sold
at major chains, and direct mail/catalogs accounted for 6%. The remaining 7% of apparel sales
occurred through other means of distribution.

c) Market Segmentation: The company plans to target males between the ages of 20 and 40
with a combined household income of more than $40,000. Within this group, there are no
color barriers, and customers have diverse backgrounds. The New Look customer is a
versatile man who can fit into any environment and is willing to pay a high price for
quality clothing.

The company's target group is seen as having enough disposable income to spend on high priced
quality clothing. From 1984 to 1991, for example, disposable personal income grew at a healthy
average annual of 7.0%. Apparel and footwear expenditures increased at a strong .2% annual rate
during the same period. In the 1990s, however, growth in personal income slowed somewhat and
so did apparel expenditures. From 1991 to 1998, disposable personal income rose at an average
annual rate of 4.7%, while apparel and footwear expenditures grew 4.5% per year.

According to S & P's, in the men's apparel segment, much of the growth in spending is being
driven by consumers with annual household incomes of more than $60,000. Spending in this
segment increased by approximately 13% in 1998. Apparel purchases by men from households
with incomes between $40,000 and $59,999 grew by 7% in 1998. Men's apparel sales at
department stores and off-price retailers grew at double-digit rates in 1998.

As growth slows in the mature U.S. apparel and footwear markets, companies are increasingly
looking overseas for growth opportunities. American brands translate well internationally, and

22
many expanding economies overseas are interested in buying U.S. products. International
business has therefore become a focus of some U.S. companies.

Many apparel and footwear manufacturers see Europe, with a population of 350 million, as an
attractive market. Tommy Hilfiger and Polo Ralph Lauren recently opened flagship stores in
London in an effort to build up their brands in Europe. Expansion in Asia, however, has been
sidelined by economic troubles. In other parts of the world, footwear company Payless Shoe
Source Inc., has been performing well in Canada and South America.

Table 3.1 Statement showing the Market Analysis

Market Analysis
2000 2001 2002 2003 2004
Potential Customers Growth CAGR
Males Aged 20 - 40 15% 2,500,000 2,875,000 3,306,250 3,802,188 4,372,516 15.00%
Males Under 20 10% 1,500,000 1,650,000 1,815,000 1,996,500 2,196,150 10.00%
Males Over 40 10% 1,250,000 1,375,000 1,512,500 1,663,750 1,830,125 10.00%
Other 0% 250,000 250,000 250,000 250,000 250,000 0.00%
Total 11.98% 5,500,000 6,150,000 6,883,750 7,712,438 8,648,791 11.98%

Figure: 3.1 - Market Analysis (Pie)

d) Distribution Strategy: New Look plans to use a direct sales force, retailers, and the Internet
to reach its markets. These channels are most appropriate because of time to market, reduced
capital requirements, and fast access to established distribution channels. The manufacture of
denim is expected to take place in Mexico. Sweaters will be manufactured locally at first, and
will later take place in Italy and Hong Kong. Upon arrival, the clothing will be placed in a
23
warehouse. Initially, the company plans to use a consolidated warehouse before acquiring a
warehouse of its own.

As companies in these mature industries continually look for ways to compete effectively, U.S.
apparel and footwear manufacturers have increasingly moved their production facilities to lower-
cost locations outside of the United States. Although some manufacturers have moved operations
completely offshore, others are retaining a few production facilities in the United States to
manufacture products requiring a quick turnaround time.

While manufacturing in Asia remains substantial, the growth of apparel manufacturing in

Mexico and the Caribbean has been significant due to the North American Free Trade
Agreement (NAFTA) and the lowering of tariffs. Apparel assembled in Mexico and the
Caribbean nations from fabric formed and cut in the United States accounted for 27% of all
apparel imports in 1998, up from 9% in 1990.

With an improved economic outlook, Asian currencies have strengthened against the U.S. dollar
over the past year. For example, the Thai bhat and Korean won appreciated 13% and 20%,
respectively, from June 1998 to June 1999. While this has benefited U.S. exports somewhat, it
has put pricing pressures on imported Asian goods. For the vast amount of goods manufactured
in China, however, no such benefit is currently expected, as this country's currency has remained
fixed in value versus the U.S. dollar.

e) Market Trends: After several years of inventory build-ups, the apparel industry's inventory-
to-sales ratio declined steeply in 1996, and through 1998 it remained near its lowest
levels in 16 years. According to the U.S. Department of Commerce, the inventory-to-
sales ratio was 1.49 as of May 1999, significantly below the 1.74 of a year earlier.

After several difficult years and many bankruptcies in the early 1990s, the apparel industry is
relatively healthier overall, and its lower inventory levels are a sign of that. Despite the lean
inventories, however, prices of women's apparel declined in the first 6 months of 1999,
compared with year-earlier levels, after rising slightly in 1998. S&P's still expects some degree
of apparel pricing pressure to persist in the near future. Intensifying competition doesn't bode
well for apparel manufacturers' ability to raise prices. Companies are continually searching
24
around the globe for cheaper sourcing and are looking for ways to cut operating costs.
Consumers are also very value conscious-they want quality merchandise at the lowest possible
price. This trend is evident in the successful growth of off-price retail stores.

As with most mature industries, the apparel and footwear industries are experiencing intense
competition and pricing pressures, while facing the need for constant product innovation.
However, these industries are enjoying a great economic cycle, with low interest rates, low
unemployment, strong consumer confidence, and a low savings rate. Consumers are continuing
to spend at a healthy clip. As a result, S&Ps expects sales for the apparel industry to rise about
4% in 1999. We believe that maker's with strong brand recognition and those that are closely in
tune with consumers' needs will enjoy average growth. The footwear industry faces a tougher
environment, however, considering the still-high inventory levels and low-margin price points.

Although S&P's doesn't expect the economy and consumer spending to sustain growth forever,
we expect the overall apparel industry to continue to post-modest gains through 1999. Among
apparel makers, we expect the best performances to come from companies with strong brand
recognition, such as Tommy Hilfiger Inc., Gap, Abercrombie & Fitch, and Jones Apparel Group
Inc. As more and more companies have adopted casual attire in the workplace, the trend toward
casual dressing continues. This has sustained the need for men and women to establish new
wardrobes or alter their existing ones. S&P's believes this has had more of an effect in the men's
segment, as evidenced by the higher growth rate in sales of that segment in the past year.
Eventually, the casual trend will slow to a level of demand that satisfies basic replenishment
needs, but for now we expect heightened consumer confidence to encourage spending beyond
basic needs. Current career offerings have less structured looks, and consumers have favorably
received these.

S & P's expects the branded apparel companies that sell to the department store channel of
distribution to grow somewhat faster than the overall industry. In addition to favorable
demographic trends, this segment is benefiting from its strength in design and marketing, which
has led to a high consumer awareness of and demand for branded apparel. Nonetheless, because
there's little pent-up demand for apparel, the need for freshness is still a vital part of keeping
customers interested.

25
In response to a challenging and saturated domestic market with slower growth prospects, S&P's
expects that companies with strong brands will increasingly turn to international markets for
growth. Companies are hoping that the international consumer's interest in the U.S. lifestyle will
translate into sales of brands that represent that lifestyle. Many companies as a significant growth
area see Europe, and Asia appears to be recovering from the economic turmoil experienced in the
past couple of years.

Apparel companies have been quick to recognize the importance of the youth market and have
started to establish product lines to target this group. Generation Y--those individuals between
four and 21 years of age--is a large demographic group with considerable spending power. This
group is also significant in setting styles and trends that influence the styles for older consumers.

The current environment of abundant supply, consolidation, and intense competition has forced
companies to maximize profits, not only for growth but for survival as well. Companies are
constantly searching for ways to maximize efficiencies, cut costs, and increase sales. S&P's
believes this improved condition of apparel companies has positioned the successful ones for a
greater degree of growth and should serve to develop a healthier industry.

In the past, consumers purchased apparel and footwear for the upcoming season when retail
stores decided it was best to carry the merchandise, usually months in advance. Times are
changing, however, consumers are buying apparel and footwear closer to or during the season.
The industry has had to adjust to this trend, or risk losing sales and carrying unwanted inventory.
Companies have had to shorten design, development, production, and distribution cycles.

In order to stay in tune with consumer needs and trends and to aid in product planning,
companies have established internal teams or have hired firms to gather feedback from relevant
consumer groups. For example, Tommy Hilfiger recently established what it calls Quick
Response Capsules (QRC), teams of designers and production staff to work in collaboration with
retail stores to bring out fresh, new fashions within a month. When Nike recently reorganized its
apparel division, it created a strategic response division to monitor consumer trends. Other
companies are doing this as well.

26
S&P's believes that the abbreviated production cycles brought about by this "buy now, wear
now" phenomenon has caused companies to re-evaluate their manufacturing processes. With
more and more production taking place offshore, the turnaround time for garments can be
lengthy. Shortened cycles call for production sites in closer proximity to distribution points.

At the moment, a few apparel companies are using domestic plants to fulfill small orders for
fresh products. Although indications now are that most merchandise will continue to be sources
offshore, some seasonal/special items may need to be produced domestically. If such demand
increases, there may be some benefit to the rapidly shrinking domestic production industry. This
buy now, wear now trend is a manifestation of the power that consumers now have in the mature
apparel and footwear industries. Consumers dictate price, location, styles, and time of purchase
more, something we don't see changing anytime soon.

In a market where consumers are barraged by advertising and marketing campaigns delivering an
onslaught of lifestyle and fashion messages, a brand name is a powerful weapon. Brands have
become an increasingly significant factor in apparel and footwear. Many consumers have less
time to shop an are spending their disposable income more carefully. Established brand names,
with their quality image, make the shopping experience easier and faster for many consumers.
For manufacturers, brands build consumer loyalty, which translates into repeat business.

Many established brand manufacturers, such as Tommy Hilfiger, Polo Ralph Lauren Corp.,
Jones Apparel, Liz Claiborne Inc., and Nautica Enterprises Inc., are leveraging their existing
brand names by adding various accessory lines, such as sunglasses, watches, fragrances, wallets,
and footwear. Jones Apparel's recent acquisition of shoe retailer Nine West Group Inc. was a
strategic move aimed at broadening the company's product lines and creating opportunities to
cross-sell products between the two brands. However, most companies choose to extend their
product lines through licensing. Most recently, Tommy Hilfiger announced new licensing deals
to market jewellery, hosiery and, most notably, watches through Movado.

A company with an impressive brand name must exercise caution when entering into licensing
agreements. If a new product line doesn't live up to the quality standards that consumers have
come to expect from the brand name, the brand's image can be tarnished. It remains to be seen

27
how consumers will react to this onslaught of new brand name product introductions. To date
consumers have embraced the extended product lines.

Cloth Business in ASIA

JAPAN - Uniqlo brand strategy, fashion brand, Japanese brand
Uniqlo, a name formed by the fusion of two words Unique and Clothing, is usually referred to as
Japanese version of GAP. Founded in 1995 by Tadashi Yanai, Uniqlo has become the number
one brand among the Japanese retailers with more than 700 stores and a revenue totaling US$3.5
billion in 2005. In its bid to become one of the global giants in apparel, the company started to
expand globally. In 2001 it entered the UK market and in late 2005 entered the US market.

The Uniqlo story is different and interesting at the same time because of its underlying
philosophy of people before brand. What does it mean and what are its implications for the
brand?

Literally every sector of the industry is proliferated with brands - regional, national and
international - and the apparel industry is no exception. The US apparel industry is probably one
of the most competitive apparel markets in the world. This ultra competition makes it a perfect
place for brands to thrive.

One of the main reasons for the tremendous success of branding and also the presence of a great
many number of brands in the apparel industry is because apparels are very self-expressive
products. People use clothing as a major avenue to express their sense of self to the world.
Coincidentally, one of the main functions of a successful brand is to provide a channel for the
consumer to express himself. As such, branding becomes more important in the apparel sector
than in many other sectors as the symbolic value is very high.

If Uniqlo's brand philosophy is analyzed in this background, it makes for a really intriguing case.
When the brand entered the US market in late 2005, it did that by opening three stores in a New
Jersey mall. The brand created the initial awareness in the market place by using news paper
inserts that displayed its variety of clothes and the low price. But to create a distinctive position
the brand follows a position where it puts the customer before the brand. The CEO of Uniqlo
USA Nobuo Domae says: "We are selling jeans, not style, we don't want to push our brand logo,
28
and you can combine our clothing with other brands". This is very different from what one hears
in the industry. By not emphasizing the brand image and identity aspects, Uniqlo might be
making a mistake.

Playing in a sector where self expression, fashion, symbolic value and self-expression are sky
high, brands and strong brand identities provide a channel for consumers to achieve all of the
above parameters. Uniqlo, by emphasizing low price and high quality is hoping to win the race.
Time will tell whether this strategy will be successful and can sustain pressure from new brands
and tough competition.

HONGKONG - Strategic Marketing of Giordano

Giordano Hong Kong is one of the world's leading fashion and clothing line companies in terms
of profit and sales volume. The company has also the widest presence among all international
companies. This is made possible through a positioning strategy of global networking of
distributors.

Giordano Hong Kong uses the name of both the company and its mainstream fashion labels,
and this strategy has allowed the company to pursue an integrated marketing approach directly
related to the company name. There are also a variety of marketing strategies available that
Giordano Hong Kong could make use of in order to control all of their promotional activities.
When used appropriately, these marketing strategies will be able to help to consistently
disseminate the valuable information that they want to convey to their valued consumers.

However, certain points have to be taken into consideration by Giordano Hong Kong
regarding marketing strategies. Since their income is relatively higher than most of their
competitors, the time for implementation of their chosen marketing strategies would
take longer than usual, aside from being expensive. But since the goal of Giordano
Hong Kong is towards a long-term dominance and stability in the fashion industry, then
the pursuit of these promotional campaigns will be beneficial for the company in the
long run.

29
Giordano Hong Kong SWOT Analysis
Strengths
• Giordano Hong Kong has products that boast of a very powerful retail. This includes a
reputation for value of money, convenience and a wide variety of products
• Giordano Hong Kong has grown significantly over the years, and has experienced
global expansion.
• Giordano Hong Kong’s main competence lies on the use of information technology
(IT) to fully support its international logistics system. Therefore, the company can see how their
individual products perform within the Philippines, or even at stores at a glance. IT also supports
Giordano Hong Kong’s efficient procurement.
• Giordano Hong Kong is able to deliver good customer care, as the limited amount of
work would mean plenty of time to devote to customers.
• Giordano Hong Kong’s lead consultants have established a strong reputation within the
market.
• Giordano Hong Kong can afford to change direction quickly if its management finds
that the company’s marketing strategy is not effective.
• Giordano Hong Kong has little deficits and overheads. Therefore the company can
offer good value to customers on a consistent basis.

Weaknesses
• Giordano Hong Kong is one of the world's largest companies in clothing lines but has a
weak control of its empire, despite its IT advantages. This could lead to a decrease in
productivity in some areas where they have the least control of.
• Since Giordano Hong Kong sell products across many sectors, the company may lack
the flexibility that some of its more focused competitors possess.
• Giordano Hong Kong operates globally, but its presence is located in only relatively
few countries worldwide.
• Some of the company’s weaker branches lack market presence or reputation
• Some of the company’s personnel still lack the essential skills base in many areas.
• The company is still vulnerable to the temporary losses of its vital staff (e.g. being sick,
leaving).

30
 • The company’s cash flow is unreliable especially in the early stages of a new product
development.

Opportunities
• Taking over, merging, or forming strategic alliances with other fashion companies while
focusing on strong markets like Europe or the Greater China Region.
• The branches of Giordano Hong Kong operate only on trade in a relatively small
number of countries all over the world. Thus, this would open the opportunities for future
businesses in expanding various consumer markets, such as those in China and India.
• The opening of new locations and branches offer Giordano Hong Kong the
opportunities to exploit market development. This could lead to the diversification of the
company’s branches from large super centers to local-based sites.
• Opportunities exist for Giordano Hong Kong to continue with its current strategy of
establishing large branches worldwide.
• Giordano Hong Kong is continuously expanding, with plenty of future opportunities to
exploit for success.
• The local councils of Giordano Hong Kong are in the process of encouraging local
businesses with work whenever possible.
• The competitors of Giordano Hong Kong may be slow to adapt to new luxury goods
especially the ones that the company releases.

Threats
• Being number one means that Giordano Hong Kong is the target of competition, the
company to beat, both locally and globally.
• Being a global retailer means that Giordano Hong Kong might be exposed to political
problems in the countries where the company has operations.
• The production costs of most consumer products have the tendency to fall because of
lower manufacturing costs. Manufacturing costs fall because of outsourcing to low-cost regions
around the globe. This phenomenon could lead to competition in prices, which in turn would
result in the deflation of prices in various ranges. Intense price competition must definitely be
considered a threat (Rosenberg, 1984).

31
 • The latest developments in information technology which could possibly change the
markets might challenge the company’s ability to adapt to these changes
• A slight shift in focus of a large competitor might wipe out any market position that
Giordano Hong Kong has achieved over the years. This could force the company to specialize
in rapid response but good value services to local businesses. This would put so much pressure
on the company’s consultancy staff to keep informed with the latest changes in technology where
possible.

Marketing Mix Analysis

A. Product: Giordano Hong Kong’s dedication to quality for almost three decades now
has led to the satisfaction of millions and millions of its customers worldwide. Giordano
Hong Kong was created by a group of people who pursued the best quality and
craftsmanship in terms of fashionable clothing lines. The Giordano clothing line that its
customers wear today is still being manufactured using nothing but the original and
unparalleled raw materials discovered three decades ago by Jimmy Lai. Giordano’s
delicate yet strong fabrics, bright colors and cost-effectiveness are obtained by using
only the purest raw materials.

The raw materials used in the production of Giordano clothing are able to meet
the high quality standards and specifications. The packaging materials where Giordano
clothing is sold are also being subjected to strict quality standards.

In line to Giordano Hong Kong's policies in product safety, appropriate measures

are taken in the manufacturing process of Giordano and all of its brands to prevent the
possible corruption of the products. Giordano manufacturing plants implement the
principles of the HACCP (Hazard Analysis and Critical Control Points) system as a
testament to their dedication to quality.

B. Price: Giordano Hong Kong bases its pricing strategies on several key trends that
continuously shape the global marketplace of fashionable clothing. One particular trend is
labeled as “premium-tization” (1991). This phenomenon causes the polarization of different
markets. This would then trigger the consumers to demand and pay much higher prices for

32
perceived quality. However, discounting in prices is also simultaneously taking place, therefore
squeezing out the middle range. More often than not, clothing companies undergo
internationalization which leads to a tighter squeeze for shelf space. This will in turn leave
Giordano Hong Kong as a winner. It is for this reason why Giordano Hong Kong values the
“premise sector” so much because this would allow consumers can to try their brands at low risk
and price.

In terms of market segments, premium and specialty clothing of Giordano Hong Kong have a
disproportionate share of volume growth at an estimated 4-5% per year, as against the 2-3%
overall growth rate. These rates come up as a result of both the rise in GDP among developing
markets and consumer demands for higher value propositions, which is obviously dominated by
international brands. Therefore, Giordano Hong Kong has to increase its portfolio and operate
globally to overcome the home market. Giordano Hong Kong practically operates on a
relatively fragmented market, with the top four clothing companies accounting for 22% of global
volume five years ago and only about 28% today.

C. Promotion: Giordano Hong Kong has been able to maintain its reputation as one of
the world's leading clothing companies for more than 2 years now. It is able to face the
challenges in many of its markets directly. This is made possible by the effective
promotional and positional strategies aimed to deliver not only profit growth, but also
on building down the foundation of Giordano’s brands and business.

The promotional campaigns and strategies of Giordano Hong Kong are focused mainly
on driving the growth of its brands and improving the company’s financial performance.
These campaigns have also helped secure significant acquisitions and partnerships. And
more importantly, these campaigns have led to the release of the potentials of the
company’s employees, thus building a quality performance- based culture.

The promotional strategies of Giordano’s local products are practically reinforced by

the local employees themselves. These moves certainly allow the company to improve
even more without the costs of introducing new technologies. These efforts have
resulted in increased financial gains for the company and have allowed the

33
establishment of distribution networks for both the local and international Giordano
products.

D. Place: Giordano has grown and expanded virtually around the entire globe. This
was made possible by their strong efforts to acquire smaller breweries and firms from
other countries. Over the years and decades, Giordano has slowly but surely established
an empire, with strong segment markets established in Asia Pacific, Australia and the
Middle East.

In the Philippines for instance, Giordano Hong Kong was able to achieve a broad
market leadership through various acquisition deals over the years. The company also
exerts efforts to communicate with their customers in every local culture about
Giordano products and their impressions. And this is no easy thing because Filipinos
have different tastes in fashion and clothing. For example, some Filipinos from remote
provinces are still so accustomed to their ancestral native clothing. Therefore, Giordano
clothing might not really have an appeal to them. This critical information gathered by
Giordano Hong Kong paves the way for them to make the right decision regarding the
appropriate strategies to pursue.

Giordano Hong Kong has even solidified its empire by adding Malaysia as one of its
markets in the Asia Pacific Region just recently. And this move is a sure sign that there
will be more acquisitions and mergers that Giordano Hong Kong will be involved in the
coming years.

Ethical Issues
It is a common knowledge that the fashion industry is still a relatively new industry in Hong
Kong and is still in its early stages of development. However, it has shown signs of rapid growth
and it is being estimated that there will be more than a million fashion products that will be
shipped within the year. And it is further being expected that within the next years the
tremendous growth and technological advancements will continue in the fashion industry.
Mobile commerce and multimedia terminals are just some of the technological advancements
already being expected. Therefore, the continued growth and development will also make it

34
imperative for localization to occur in the fashion industry in Hong Kong in the years to come
(1981).

The development of style for the Giordano clothing line in Asia certainly will become the target
for localization because of its dynamism. There are still plenty of styles and designs that
Giordano can use. But since development cycles are much shorter in the fashion world, Giordano
may need to rush the release of its localized versions of clothing. By doing this measure, they
will be the first to launch Giordano signature fashion wears in various Asian markets, thus
putting more pressure on the localization process. Also, the redesigning and streamlining of both
clothing development and the localization process will become imperative if this scenario
happens.

A majority of the localization projects of Giordano for its Asian clothing lines are part of various
deals. Giordano Hong Kong often partners with smaller companies to ship its fashion products.
Hence the huge customer influence on localization projects and fashion design is undeniable.
Changes are also frequently made to the documentations and the overall look of the signature
clothes. Therefore, this will require the localization process to be a lot more flexible than in other
situations localizers are used to dealing with.

There is also an issue of Giordano’s lack of experience in dealing with the Asian consumers in
both the fashion and localization industries. Thus, there is still no knowledge base from where to
get the troubleshooting tips. Since most projects require both the fashion and localization
industries to sign non- disclosure agreements, fashion designers who are working on a project
and encounter problems won’t be able to go outside Giordano to ask for assistance. Thus, they
would have to find answers and solutions to their problems by themselves. Their solutions also
may never be shared with others. Clearly, there is an immediate need for a knowledge base that
will guide all those in this field.

Above points bring out the necessity of having cooperation between Giordano and the Asian
localization vendors. Both should strive hard in order to establish streamlined processes for
localization. Close collaboration will help guarantee successful localization for Giordano
clothing lines.

35
INDIA
History
The history of textile is almost as old as that of human civilization. In India the culture of silk
was introduced in 400AD . modern textile industry took birth in India in the early
nineteenth century The first cotton textile mill of Bombay was established in 1854 during
the year 1900 the cotton textile industry was in bad state After independence, the cotton
textile industry made rapid strides under the Plans.

Overview
Multi-fiber Arrangement (MFA) has significantly altered the institutional rules of trade in the
textile and clothing industry With the elimination of all remaining quotas on apparel from
January 1 2005, Buyers are, thus, free to source textile and apparel in any amount from
any Country The textile and clothing sector is now fully integrated into the regulatory
framework of the General Agreement on Tariffs and Trade (GATT) of the World Trade
Organization (WTO) This finding suggests, on the face of it, that China and India’s
combined export share in the US apparel market could be a staggering 65% post-MFA,
compared to their combined share of 20% in 2003.

Pre 1991
Pre 1991 First, the Indian textile and clothing industry has become increasingly integrated into
global markets since the late-1980s and 1990s, emerging as one of the top ten global exporter By
2003, India exported more than $13.5 billion worth of textile and apparel, up fifteen-fold from
the $0.9 billion it exported in 1985rs of textiles and clothing after 1998 The external sector
reforms of 1991 deepened this process of integration that began in the mid-1980s.

Growth Drivers
A late start First and second wave of global outsourcing in the1970s and 1980s established
strong apparel export platforms across the world. An extensive domestic fibre and fabric base.
India has an extensive fibre base—largely in cotton. India is the third largest global producer of
cotton yarn the second largest producer of silk 5th largest producer of synthetic fiber/yarn.
Barriers to global integration. India has integrated relatively slowly in the global apparel and
textile market compaire to many of its comparators. Quota constraints have played a role in
36
slowing India’s export volumes in certain product categories Policy turnaround: deregulation and
external sector reforms Structural break in the mid-1980s Domestic deregulation as the critical
turning point. Emerging Firm Strategies Three major paths of global integration are discernable
among Indian textile and clothing firms: Flexible, small-batch production Scaling up Customized
mass production

SWOT Analysis

• Strengths: Indian Textile Industry is an Independent & Self-Reliant industry. Abundant

Raw Material availability. Availability of Low Cost and Skilled Manpower. Availability
of large varieties of cotton fiber.
• Weaknesses: Indian Textile Industry is highly Fragmented Industry. Industry is highly
dependent on Cotton. Lack of Technological Development. Infrastructural Bottlenecks.
Unfavorable labor Laws.
• Opportunities: Growth rate of Domestic Textile Industry is 6-8% per annum. Large,
Potential Domestic and International Market. Market is gradually shifting towards
Branded Readymade Garment. Increased Disposable Income and Purchasing Power
Emerging Retail Industry and Malls. Greater Investment and FDI opportunities are
available.
• Threats: Competition from other developing countries, especially China. Continuous
Quality Improvement is need of the hour Threat for Traditional Market for Powerloom
and Handloom International labor and Environmental Laws. To make balance between
price and quality.

India, the world’s third-largest producer of cotton and second-largest producer of cotton yarns
and textiles. Indian textile industry contributes about 22 % to the world spindleage and about 6
% to the world rotor capacity installed . India contributes to about 25% share in the world trade
of cotton yarn. India has second highest spindleage in the world after China with an installed
capacity of 38.60 Million Total consumption of cotton/ man-made fibers and filament yarns is
5155 Million Kg (2004-05) Textile industry contributes about 61% of the world loomage. It
contributes about 12% to the world production of textile fibers and yarns.

37
Several Government Initiatives targeted to Attract Investments
Several government initiatives targeted to attract investments Technology Upgradation Fund
Scheme Policy related to foreign investment Upgrading infrastructure Scheme launched in 1999
to provide firms access low interest loans for technology upgradation and setting up new units
with state-of-art technology Scheme has disbursed INR 91.61 bn till 31st December 2005 Upto
100% foreign direct investment allowed in textile and apparel manufacturing industry, with
approval of the Foreign Investment Promotion Board (FIPB) ~ USD 1.02 bn of FDI in the sector
approved between 1991 and 2004 Companies free to set up fully-owned offices, as well as
operations “Scheme for Integrated Textile Parks” (SITP), based on public-private partnership
model to build world class infrastructure facilities Product specific “Cluster Approach” targeting
development of 100 additional clusters in textiles Technology Mission on Cotton (TMC),
focusing on cotton R&D, dissemination of technology to farmers, improvement of market
infrastructure and modernisation of ginning and pressing sector

Foreign players
Many foreign players have also entered India Top 10 buyers in India (Gap, Wal-Mart, Li &
Fung, The Children’s Place, JC Penny, H&M, Federated, Fifth Avenue, Carrefour and Synergies
India) account for 35% of total textiles sourced from India Other major companies include El
Corte, Ecko, Kellwood, VF Corporation, Tesco, Next, Karstadt-Quelle Buying and liaison
offices Brand licensing - Hugo Boss, Tommy Hilfiger, Mango, Lovable, Nike, Lacoste Master
franchisee - Marks & Spencer, Crocodile Brand licensing/ franchising Manufacturing/
manufacturing cum retailing VF Arvind Brands - joint venture between Arvind Brands and VF
Corporation to manufacture and sell latter’s brands in India Benetton Levi Strauss Reebok
Carreman Michel Thierry.

Key players in India

Key players in India Large industry conglomerate, with turnover of USD 279 million and
presence in textiles, retail, engineering goods, personal care and prophylactics Textile products -
worsted fabrics, wool and blended fabrics, specialty ring colour and stretch denim fabric, cotton
and linen shirting fabric, readymade garments, woolen blankets and home furnishings One of the
oldest textile companies in the country, having turnover of USD 231 million Produces sittings,

38
shirtings, sarees, towels, bed linen and men’s apparel; significant exporter of polycotton blended
fabrics and made ups One of the largest producers of denim in the world, having turnover of
USD 338 million and exports to more than 70 countries Produces denim fabric, cotton and
blended fabric, knitted fabric, voiles, apparel.

One of the largest textile business houses in India, having turnover of USD 400 million
Significant presence in acrylic fibre, cotton, synthetic and blended spun yarns, grey and
processed fabrics, cotton and synthetic sewing threads India’s largest exporter of readymade
garments, having turnover of USD 180 million Supplies to more than 100 retailers and fashion
brands across 39 countries Leading producer of silk yarns and fabric (mainly for decorative and
bridal use), with annual turnover of USD 32 million Other businesses include retailing of home
furnishings in India and manufacture of bed linen products for domestic and export market

Advantage India
Advantage India Large raw material base India has a rich raw material base, especially cotton
which has seen improved productivity in the country under the Cotton Technology Mission Wide
variety of cotton produced India, making India capable of catering to various segments of world
trade Indian industry has ability to handle different materials - cotton, wool, silk and jute with
equal skill Positive developments in the Textile Policy Reservation for small scale sector,
especially key segments removed over last few years Fiscal anomalies in terms of excise duty
structure removed. Flexibility in production Capabilities across the entire value chain within the
country reduces lead time for production and reduces intermediate shipping time Indian
companies have flexibility and skilled manpower to handle small orders with complex designs
Product development and design capabilities Several institutes in India for textile development,
the major one being National Institute of Fashion Technology (NIFT) Several leading colleges
also offer courses in Textile Engineering.

Retail Cloth Business In Hyderabad

Retail in India is still at a very early stage. Most retail firms are companies from other industries
that are now entering the retail sector on account of its amazing potential. There are only a
handful of companies with a retail background. One such company is Nilgiri’s from Bangalore

39
that started as a dairy and incorporated other areas in its business with great success. Their
achievement has led to the arrival of numerous other players, most with the backing of large
groups, but usually not with a retail background. Most new entrants to the India retail scene are
real estate groups who see their access to and knowledge of land, location and construction as
prime factors for entering the market.

New retail stores have traditionally started operations in cities like Mumbai and Delhi where
there has been an existing base of metropolitan consumers with ready cash and global tastes. The
new perspective to this trend is that new entrants to the retail scenario should first enter smaller
cities rather than focusing entirely on the metro’s. Spending power in India is not concentrated
any more in just the 4 metros (Delhi, Mumbai, Chennai, Kolkata). Smaller but upcoming cities
like Chandigarh, Coimbatore, Pune, Ahmedabad, Baroda, Trivandrum, Cochin, Ludhiana, Simla
etc will fast be catching up to the metro’s in their spending capacity.
Cities in south India have taken to the supermarket style of shopping very eagerly and so far the
maximum number of organized grocery and department stores are in Chennai, Bangalore and
Hyderabad. The north has a long way to go to come up to par. International stores now prefer to
gauge the reaction of the public in these cities before investing heavily in a nation-wide
expansion. Milou, the Swiss children’s wear retailer, recently opened up its first store in
Chennai, bypassing Delhi and Mumbai.

Besides the urban market, India’s rural market has just started to be seen as a viable option and
companies who understand what the rural consumer wants will grow to incredible heights. The
bulk of India’s population still live in rural areas and to be able to cater specifically to them will
mean generating tremendous amounts of business. Business, specifically retail business must
focus on the most important factor in the Indian mind-set----Value for Money. Indian consumers
are ready to pay almost any amount of money for a product or service as long as they feel they
are getting good Value for Money. This is often misconstrued as being tight fisted or interested
in lower priced and/or lower quality products.

In the past decade, international companies entering India (Levi’s, Pepe, Tommy Hilfiger, Marks
and Spencer, Mango) have generally offered moderately priced to expensive items. They have

40
aimed for the upper-middle and rich classes of Indian society. These are consumers who travel
abroad often and can buy these items overseas quite easily. Instead, international companies
should be focusing on the lower and lower-middle classes of India. This is where the real
potential is, the aspirational class of consumers who want to lead a better lives and believe in
education, hard work and absorb knowledge from every possible angle. The phenomenal success
of Big Bazaar, Pantaloons version of Wal-Mart, is proof that there is enormous potential in
providing products and services to this class of consumers.

Indians are very curious by nature and will try everything at least once before rejecting it. The
initial success of KFC in India proved that Indians could make a success of most new ventures
entering India but reject a concept once they have tried and tested the offering and found nothing
worth going back for. The menu at KFC was rather boring and insipid to the Indian consumer
who is used to the innumerable combinations and permutations of street food. For their second
run in India, KFC re-thought its menu and has been very successful marketing at specific groups
within India, like the Punjabi’s who have quite a history of loving the Chicken leg and have
made the Chandigarh outlet a huge success!

A company entering India cannot have just one game plan to apply to the entire country as the
people, their tastes, the lifestyle, the budgets etc are all too divergent. International entrants must
enter each market specifically focusing only on that area to be successful. Metros: Delhi,
Mumbai, Chennai and Kolkata. Second rung but will soon outpace metros: Hyderabad,
Bangalore, Ahmedabad, Gurgaon, Pune, Baroda. Small and developing fast: Chandigarh,
Coimbatore, Trivandrum, Faridabad, Ludhiana, Cochin, Simla, Mysore

About Hyderabad - India:

Hyderabad city is the capital city of the Indian state of Andhra Pradesh, in the region of
Telangana.

It lies on the Deccan Plateau, 541 meters (1776 ft) above sea level, over an area of 625 km² (244
mile²).

41
The city has an estimated population of around 8 million, making it 4th largest city in India ,
while the population of the metropolitan area was estimated above 9 million. Religiously and
culturally, the city is united with Hindus, Muslims and Christians.

Hyderabad city is known for its rich history, food and its multi-lingual culture, both
geographically and culturally.

Founded in the year 1591 by fifth Qutb Shahi Ruler Muhammad Quli Qutb Shah.

The original city of Hyderabad was founded on the banks of river Musi. Now known as the
historic old city, home to the Charminar, Falaknuma Palace, Chowmallah Palace and Makkah
Masjid, it lies on the southern bank of the river.

Hyderabad and Secunderabad are twin cities, separated by the Husain Sagar (bound by the 'Tank
Bund'), a man made lake made during the time of Ibrahim Qutb Shah in 1562.

Overview of Hyderabad India

Name of the city: Hyderabad

Name of the state: Andhra Pradesh
Area: 625 km² (241 sq mi)
Time Zone: IST (UTC+5:30)
From Delhi - 1499 km
From Mumbai - 711 km
Distance(s): From Bangalore - 562 km
From Chennai - 688 km
From Kolkatta - 1516 km
Region: Telangana
Founded: 1591
Muhammad Quli Qutb Shah
Founder:
Fifth Qutb Shahi Ruler
Population: 8893640 (Year 2008)
Country code of India: 0091 or +91
City code / STD code of Hyderabad: 040
42
Languages: Urdu, Telugu, Hindi and English
Currency of Hyderabad India: Indian Rupees

Necklace Road Garden, Hyderabad INDIA

People and Language

What makes Hyderabad such a special destination is its multi-cultural mix of people.

Language
Hyderabad India
There are four languages in Hyderabad: Hindi, Deccani-Urdu, Telugu and English. English is the
language of business and administration, and is widely spoken and understood. Most
Hyderabadis are bilingual, and speak their mother tongue as well as English.

Religion & Safety

With this mixture of people, Hyderabad is also a mixture of religions. Hyderabad’s skyline
boasts the distinctive minarets of mosques, intricate figurines of Hindu temple gods, beautiful
Churches and distinctive architecture of Gurudwaras. The main religions are Hinduism, Islam,
Christianity and Sikhism.
Security & Safety
43
Hyderabad India
Hyderabad has a well-founded reputation as one of the safest cities in the world. Crime rates are
very low and the streets are safe to walk in any time of the day or night. However, I do
recommend that visitors to my city take the normal precaution of keeping their valuables in a
safe place at all times.

The Andhra Pradesh Government has and will continue to be vigilant in ensuring that Hyderabad
remains safe. It has stepped up security measures at key installations and other sensitive places.
The Government has also made it known that extremism originating from religion or race has no
place in Hyderabad and it will not hesitate to take action against any extremist or terrorist groups
or individuals.

Hyderabad – Dress Culture

Wine & Dine

Hyderabad’s multicultural population is reflected in the wide variety of excellent restaurants
offering a diversity of cuisine from around the world.

44
Tipping

Tipping is not encouraged as most hotels and restaurants in Hyderabad

already levy a service charge on customers' bills. Tipping is not a
way of life in Hyderabad and the practice is not encouraged.

Driving

Minimum age is 18 years with a valid state/provincial driver's license. An

international driver's license is required for visits beyond one month.
Cars are right-hand drive; driven on the left-hand side of the road.

Emergency Numbers

Hyderabad India

Police 100

Fire 101

Ambulance 102

These are the numbers in Hyderabad, but they are usually the same in
other cities of India.

Passport

According to law, you must have your passport with you at all times. To
check into a hotel you must show your passport to the hotel clerk
and fill out a form with your passport and visa information. If the
police ask to see your passport, you must show it to them. They have
the right to ask you for it at any time, for no reason.

Electric Current

45
Hyderabad India

Standard voltage is 220-240 volts AC 50 cycles per second. Most hotels are
equipped with transformers for 110-120 volts AC, 60 cycles per
second appliances. This is different from America and England, so to
use your tape recorder, etc., you need a converter and an adapter for
your plug, which you can get at certain Indian appliance stores in
your own country. Socket sizes in India vary, so it is a good idea to
get a universal adapter which is available at airports and at special
travel stores. Sockets have three round pins, which is similar to the
ones used in Europe. European plugs will go into the sockets, but the
Indian pins are a little thicker and the plug will be a little loose, so the
connection may not be so good.

NOTICE: There are many power failures in India. So it is a good idea to have a good flashlight
(torch).

Smoking
Smoking is prohibited in public buses, elevators, theaters, cinemas, air-conditioned restaurants,
shopping centers and government offices.

What to Wear
Hyderabad has a moderate temperature ranging from 15 to 40 degrees. Light and summer
clothing made from natural fabrics like cotton is best for everyday wear. Casual dress is
acceptable for most situations and occasions but some establishments may require a more formal
dress code. It is always advisable to check beforehand on dress regulations, if any.
Acceptable Dress
Inf you are well dressed, you will usually be treated better in Hyderabad - India, especially when
you are doing official business. When going to religious places you should dress very
conservatively.
Women Travelers

46
Hyderabad India
It is best for women not to travel alone, especially if they have never been to India before. Many
men in India think western women to be easy. Women are often subjected to being stared at,
handled, peaked at through a hole in a hotel room door, and may receive obscene comments.
These situations are not usually a serious threat.
It is important that women dress modestly. Women in India do not normally show their shoulders
or knees, or wear tight fitting clothes, or shorts. It is best not to wear clinging, or low cut clothes.
The bra-less look should be avoided.
Women usually do not shake hands with men, and certainly any physical contact beyond this is
asking for trouble. Having a casual conversation with a man is considered a reason for a man to
proceed further. Indian women and men who don’t know each other, unless they are highly
educated, just don’t talk with each other in India. If you feel that a man is coming into your
space, more than likely he is. Usually you can just request them to stay away from you. If
someone touches you apparently innocently, it usually isn’t.

If you have a problem on a train or bus, approach the ticket collector and ask them politely
to help you. If the ticket collector won’t help you, ask to see the conductor of the train. The
conductor is usually a well-educated man, who you should speak to respectfully, and who
will usually be helpful.Groping is a normal thing. It is standard for women to be groped
(handled) on the local trains. That is why there are separate compartments for women.
Even just walking in the station, women can be handled. If a woman goes into a very
crowded situation with many men, such as a bus, especially if she is by herself, it is not
unusual for her to be groped. This happens with Indian ladies too.

If you are a woman traveling alone, it could be a good idea to travel by air-conditioned or
first-class. There are much less passengers on these carriages, and they usually have had
more contact with foreigners, so they are easier to deal with.Women can request a ladies
compartment in a 2nd class carriage of a train. Many trains have such a compartment.
Also, most of the time there is a special ladies’ queue (line) for purchasing train tickets.
This means that ladies can go to the front of a queue to purchase tickets for trains and no
one will say anything. Most railway stations have ladies’ waiting rooms.

47
Begging

Hyderabad India

There are beggars, and then there are sadhus or saintly persons who accept donations. I do
not think it is a good idea to give anything to the average beggar, unless you give them
food. Giving to a saintly person is actually to the benefit of the giver. The difficulty with
giving to a saintly person is to know who is actually saintly.

One problem about giving to beggars by temples or holy places, especially if they are
children, is that if you give to one, you may have a hundred persons surround you and ask
you for money. Also, it is a bad policy to give any money to small children, because they
usually give all the money to their parents or some other adult. In this way the parents do
not have to work, nor is it profitable for the parents to give their children an education.

Indian Culture

Hyderabad India

1. Don’t overload your plate, you are expected to finish everything.

2. Never put objects on a temple or someone’s personal altar in their home or on sacred
items, such as a religious book.

3. Never point the soles of your feet towards an altar in a temple, other people, or holy sites.
4. Remove your shoes when entering someone’s home, even if they tell you it is all right to
wear your shoes. It is almost never all right.
5. Don’t take photograph without permission.

Credit Cards
American Express, Diners Club, Mastercard and Visa are widely accepted.

48
Banking & Money Changing

Hyderabad India

Banks throughout Hyderabad generally open at 9.30am and close at 3.30pm Mondays to
Fridays, and 9.30am to 12.30am on Saturdays for transactions of travellers' cheques and
other financial matters. For convenience, Automated teller machines (ATM) are open
round-the-clock, offering the MAESTRO or CIRRUS network system. Apart from the
convenience of exchanging money at all banks and hotels, money can also be exchanged
wherever the sign "Licensed Money Changer" is displayed. Most shopping complexes have
a licensed money changer. Visitors are discouraged from changing money with unlicensed
money changers.

Office Hours
Business / government offices are usually open from Monday to Friday, 9am - 5pm and
Saturday, 9am - 1pm. Offices and shops are usually closed on Sunday, but can be closed on
a different day depending on the town.
Shopping Hours
Hyderabad India
Shops open from 10am to 9pm daily. You needn't keep a sharp eye on your watch when you're
shopping in Hyderabad. Our city also enjoys the reputation of being one of the safest places to be
in, so provided basic precautions are taken, you can have peace of mind to shop and walk around
well into the night.

City Center Shopping Mall at Banjara Hills, Hyderabad INDIA

Communications / Mobile Phones

Hyderabad is the center of telecommunications in India with 24-hour telex, international direct
dial (IDD) telephone, telegram and facsimile services. Telephone country code is +91 and city
code is 040. There are many telephone service providers – AirTel, Idea, Reliance, Vodafone and
BSNL.
49
Travel and Health Insurance
I strongly recommend that you take out insurance policies to cover medical and travel expenses.
If necessary, consult your travel agent.

Drug Abuse
Drug abuse is viewed seriously in Hyderabad. Illicit traffic in narcotic drugs and psychotropic
substances is strictly prohibited.

Hitech Hyderabad India

Hyderabad is one of the most developed city in India. It is an emerging information technology
(or IT) and biotechnology hub of India.

Hyderabad has witnessed a remarkable growth in the real estate business, thanks to a
predominantly information technology-driven boom in the 1990s and the retail industry growth
over the last few years which have spurred hectic commercial activity. A number of mega malls
have come up and are being built in the city.

The rapid growth of the city, along with the growth of Secunderabad and neighboring
municipalities has resulted in a large metropolitan area.

Hyderabad is the financial and economic capital of the state. The city is the largest contributor to
the state's gross domestic product, state tax and excise revenues.

The infrastructural facilities for basic research in Hyderabad are some of the best in the
country, hosting a large academic population from all over the country and beyond.

Retail Cloth Business in Hyderabad - Concept of “Under One Roof” in Hyderabad

Following are the some of the giant retail malls emerged in Hyderabad under the concept of
everything under one roof. Hyderabadi shoppers are receiving these stores well.
• Big Bazaar is one of the formats of Pantaloon Retail India P. Ltd. Big Bazaar offers you
all daily need products ranging from garments, electronics, food items etc in less than the
50
 MRP rate. Maheshwari Palace Mall, Palace Talkies Compound, #4-1- 833, Abids,
Hyderabad - 500 001

• The Bombay Store is one of the leading stores in Hyderabad which offers Apparel,
Accessories, Personal Care, Food and Beverages, Home Accessories, Soft Furnishing and
Stationery products. http://www.bombaystore.com/ Road No.10, Charan Pahadi,
Banjara Hills, (Next to 'Our Place' Restaurant). Hyderabad - 500 034 Tel:+(91)-(40) –
55996666
• Suvasa Located in West of Hyderabad Suvasa is a popular store in the region which
provide Apparel and Furniture products under one roof. Sindhu Chopra Residency 8-2-
684/3/11, Road No.12, Near Ohri's Banjara, Banjara Hills, Hyderabad - 500 034

• Fabindia a popular retail chain provides fibers, and home products including furniture,
lights and lamps, stationery, home accessories, pottery and cutlery. etc under one roof.
http://www.fabindia.com/ Uma Enclave, Rd No.9, Banjara Hills, Hyderabad - 500 034

• Tel:+(91)-(40) - 23353956, 23353956

• D cCube Located in West of Hyderabad, Dcube specialises in wide variety of designer
furnishing, accessories and apparels. http://www.dcube.in/ Plot No. 560 A, Phase III,
First Floor, Road No. 92, Jubilee Hills, Hyderabad - 500 033 Tel:+(91)-(40) – 23543323

• Co-Optex is a showroom which offers Textile and Furniture products under one roof.
Ground Floor, Shop No.15, Minerva Complex, S.D Road, Secunderabad - 500 003

• Tel:+(91)-(40) – 27898960
• Max an exclusive store in the City Center Mall provide clothing apparel, footwear, home
furnishing and more. City Center Mall, Banjara Hills, Hyderabad - 500 034. Tel:+(91)-
(40) – 66633322 Tel:+(91)-(40) - 66101021, 23303965

51
Following are the some of the areas in Hyderabad turning out to be the hubs of the retail
business, especially retail cloth business
• Abids
• Amberpet
• Ameerpet
• Bala Nagar
• Banjara Hills
• Begumpet
• Dilsukh Nagar
• ECIL
• GachiBowli
• Himayathnagar
• Jubilee Hills
• Kukatpally
• Kondapur
• Koti
• LB Nagar
• Madhapur
• Malkajgiri
• Mehdipatnam
• Miyapur
• Mushirabad
• Nampally
• Narayanaguda
• Panjagutta
• Pathan Cheruvu
• Ram Nagar
• SR Nagar
• Secunderabad
• Somajiguda
• Uppal
• Yousufguda

Shopping ' Hyderabad' Shopping

Some of the important shopping malls in Hyderabad
• Hyderabad Central

52
• GVK One

53
• City Center

54
• Inorbit Mall, Hyderabad

• Life Style

• Big Bazaar

55
• CMR Family Shopping Mall

• Reliance Mart
• Shoppers Stop
• Ashoka Metropolitan
• Babu Khan Mall
• Sanali Mall
• Prasads IMax Hyderabad
• MPM Mall
• Metro
• ANR Center

56
 • CMR Family Shopping Mall

CHAPTER – 4
RETAIL CLOTH BUSINESS IN HYDERABAD – AN ANALYSIS

Introduction
Hyderabad is a fast growing city with about 90 Lakh population as per the census conducted
during 2010. In addition to local Telugu speaking people, large no of people from different parts
of the country are living either permanently or temporarily because of their jobs or business. The
Govt. of Andhra Pradesh declared "Municipal Corporation of Hyderabad" as "Greater Hyderabad
Municipal Corporation" by annexing all the nearby suburbs and some small villages. When the
full pledged Greater Hyderabad comes into full operation, probably Greater Hyderabad will be
the largest geographical city of our Country. Hyderabad offers a panoramic view all around the
city with historical monuments like - Charminar, Golconda etc,. Ramoji Film City like nationally
important places are attracting tourists from all over the country making Hyderabad looking
more full and crowded. Hyderabad being centrally situated city, people from all over the state
also visit Hyderabad every now and then either for shopping, or for official work in Government
offices.

Population- preferences and fashions

57
As the population across the city is Cosmopolitan in nature, their desires and requirements are
also on a mini-country scale, covering the traditional and cultural fabrics of almost each and
every part of the country in addition to the fashion imports from Westerns and Americans. It is
very important for any successful retail trader to maintain the range to attract all the people with
heterogeneous requirements. From the phenomenal growth recorded in retail cloth business it is
clear that the retail business men learnt the trick of the trade and caught the pulse of people
properly.

Profile of the sample Retail cloth outlets

In order to cover the city of Hyderabad, a sample of 126 retail cloth outlets are drawn on random
basis from various locations of the city. A humble attempt is made to provide a detail profile of
the sample respondents covering various aspects, such as form of the business, type of the outlet,
variety of cloth dealt, investment, turnover, sources of funds, profitability, etc., here.
Location
It can be observed from the location pattern of the sample retail cloth outlets ( see table 3.24.1),
that retail cloth business is concentrated in the some areas of Hyderabad, like, Dilsukhnagar
Secunderabad, Malkajgiri, Sultan Bazar, Koti, and so on. Earlier the retail cloth market was
concentrated in only Sultan bazaar, Koti and Secunderabad. The sample respondents expressed
that the retail cloth business in Hyderabad has grown a lot due to the growth of the soft ware and
informational technology businesses in the recent past. With the expansion of these industries
the city of Hyderabad has also expanded on all sides. As a result the retail cloth market has also
spread over various allnew areas, like, Kukatpally, Malkajgiri, Dilsukhnagar, Chikkadapally,
Ameerpet, Chaitanyapuri, etc.,.
Table : 3.24.1 showing the Areas in Hyderabad covered under this study

Area No. Of Outlets % to total

A.S.Rao nagar 5 4
Chaitanyapuri 7 6
Dilsukhnagar 21 17
Habsiguda 6 5
Himaytnagar 5 4
Jama masjid 6 5
Kothapet 8 6
Koti 9 7

58
 Kukatpally 9 7
Malakpet 4 3
Malkajigiri 11 9
Ramanthapur 5 4
Sainikpuri 4 3
Secunderabad 15 12
Sultan Bazar 8 6
TirumalGiri 3 2
TOTAL 126 100

However, it is spreading very fast in Dilsukhnagar and growing further to Chaitanyapuri, where
it can be observed that the shops are found in a row. This segment emerging out to be the most
crowded retail market for cloth business of Hyderabad which is having not only the branded
national and international showrooms but also the number of chain shops and leading retail
outlets are also situated.

AREA WISE DETAILS A.S.Rao nagar

Chaitanyapuri
Dilsukhnagar
Habsiguda
Himaytnagar
Jama masjid
Kothapet
Koti
kukatpally
Malakpet
Malkajigiri
Ramanthapur
Sainikpuri
Secunderabad
Sultan Bazar
TirumalGiri

Figure: 34.1.2 Areas covered under this study

Similarly, it is evident in the above table that Secunderabad and Malkajigiri have occupied
second and third positions. which is an absolute reality reflecting in the market place. The
respondents are of opinion that another important reason for this decentralized growth of the
retail cloth market is that the entry of competing giant retail cloth show rooms in some prime
areas of Hyderabad, which are also opening their branches in some developing areas. Because
of this, the small retail cloth outlets in those areas have to shift to other developing areas on the

59
outskirts of the city.

Type of the Ownerships of the sample units

On the basis of the forms of the business/ownership, we find that most of the sample retail cloth
businesses are proprietary form of business. Out of 126 sample units, 97 units are Sole trading
firms, forming around 77 percent, 16 units are Partnership firms forming around 13 percent and
13 units are Limited Companies forming around 10 percent to total.

Table 34.2 .3 showing the Profile Sample Respondents on the basis of

Forms of Business

CATEGORY TOTAL OUTLETS % SHARE

Ownership (proprietary) 97 77
Partnership 16 13
Limited Company 13 10
Total 126 100

Category
Type of Outlets

Ltd Company
13

Partnership
16

Ownership
97

0 20 40 60 80 100 120
No of Outlets

Figure: 34.23 Form of business wise classification of Sample Respondents

The Table 3.34.2 shows that the Hyderabad retail cloth business is run more as an ownership
(proprietary) business rather than other listed categories of businesses. During survey, it was
60
observed that the ownership concerns are by and large family business, in nature belonging to a
particular community. In other words, the confidence in investing in retail cloth business is on
increasing, as he is personally running it. It is very interesting to observe that in recentthis
decade, certain competing limited companies have become main players of retail cloth market in
brand leaders virtually synonyms of cloth business of entire Hyderabad, e.g.: M/s Chandana
Brothers, M/s R.S.Brothers, R S Brothers, J S Brothers etc.

Nature of Retail outlets

It was also observed during the survey, that those who have started their business as a retail
outlet continued to be retailers. Certain outlets started as stockiest and distributors over a period
of time switched over to exclusive retail businesses while a few of them started retail outlets in
addition to their stockiest and distributorships. This phenomenon implies that the retail cloth
business is more attractive and dependable than being stockiest and distributor. This can be
observed in the following table 3.4.3 It is clear that 99 retail cloth outlets have started as retail
cloth businesses and continued in the same type of the business, while 11 sample respondents
have started as stockiest, 10 sample respondents started as distributors, and switched over to
retail cloth business after some time. 10 sample respondents and 6 sample respondents started
as retail chin outlets have also switched over to retail cloth business.

Table 3.44.3 showing the Sample Respondents on the basis of Types Of Outlets
PRESENT
TYPE OF OUTLET STARTING LEVEL LEVEL

Retailer (RT) 99 126

Stockiest(ST) 11 0

Distributor(DT) 10 0

Retail Chain Outlet (RCO) 6 0

126 126

61
 T y p e o f O u tle t

140
120
100

No of outlets
80 S e ries 1
60 S e ries 2
40
20
0
R et a ile rs S t oc k ie s ts D is t rib u to rsR e ta il C h a in
O u tle t
T y p e o f o u tl e t

Figure 4.3.4 Types of outlets- Nature of business of the Sample Respondents

However, it was understood from the discussions with the different exclusive outlets keepers,
that the current trend is the result of the need for keeping separate outlets for different genders
and age groups of the customers. The sample respondents are also showing inclination towards
the expansion of the business by introducing different customer oriented products in order to pull
larger crowds instead of remaining as exclusive operators for specific categories. Therefore, in
recent times, more retail outlets have opened exclusively for men, women, teens, kids, etc.,.

When this trend of opening different retail outlets for different types of customers is observed we
find that it is still in its initial stages and at present the outlets dealing with all types of clothes
forms around 32 percent of sample respondents, while the outlets dealing with women’s wear
form around 21 percent of the sample respondents and the outlets dealing with men’s wear form
around 13 percent of the sample respondents, (see table 3.54..4). The women consumers seem
to be preferring exclusive showrooms for themselves and therefore they are on the increasing
trend.

Table 3.54.4 showing the sample respondents on the basis of the specialization of their
outlets
Outlet No of Outlets % Share
Men’s Wear 16 13
Women’s Wear 27 21
62
 Kids Wear 11 9
Men’s and Women’s wear 11 9
Women’s & Kids Wear 10 8
Men’s & Kid’s Wear 11 9
All Types 40 32
TOTAL 126 100
Type of outlet
40
30
No of outlets20
10
0
MW WW KW M&W W&K M&K ALL
Series2 13 21 9 9 8 9 32
type of outlet

Figure 3.54.4 classification of the sample respondents on the basis of -product

specialization
In line with the trend of making the retail outlets as general convenience stores some of the
corporate chain retailers have also started gold, silver, wrist watches, cosmetics etc. as a kind of a
line extension. A different study on the subject of line extension only will give us the result of
this experiment by shop owners.

As it is otherwise also observed the trend is towards maintaining all varieties; including designer
readymade dresses which are offering not only different varieties but also various colours and
designs. One distinct advantage observed is that proper fitting of the dress is possible with
readymade dresses since sizes are available at a variant of 2cms between size to size. In
addition, majority of the exclusive readymade outlets are also offering custom made sizes of
their existing range to suit and fit the specific customer by cutting the length, reducing/increasing
the waistline measurement etc. It is clear that such an additional service can be attributed to a
marketing strategy of offering convenience. Probably the above multiple facilities reflected in
the results also with 36 percent (22 + 14) of Readymade & hosiery outlets, the number of which
is higher than the multipurpose ( see Table 3.64.5).
Figure 3.64.5 showing the sample respondents on the basis of Variety of Cloth Materials
dealing

Variety of Material No. % Share

63
 Dress Material 15 12

All Varieties 65 52
Hosiery 18 14
Ready made 28 22
Total: 126 100

The data indicates that multiple product models appears to be the order of the day since many
outlets are preferring to stock more than one variety in order to attract large number of customers
rather than remaining to be an exclusive showroom. It is also observed that the exclusive show
rooms available in the city are by and large relate to branded, corporate companies like
Raymond, Bombay dyeing , Arvind, etc., The impact of globalization is distinctly felt with the
influx of multinational branded show rooms as well like Levis, Lee, Koutans, Peter England etc.
It noticed that a kind of competitive fights are going on between stores dealing in all varieties
and exclusive showrooms, like, wherever M/S Chandana Brothers establishes a showroom in a
popular locality, there competitors M/S J S Brothers, M/S R S Brothers, M/S Bommana
Brothers, M/S Charmas, etc., would locate their show rooms around. .

At the moment, majority of the market is controlled by all variety showrooms. But it is too early
to come to a conclusion since the student folk, young executives and house wives from rich
families have been regularly patronizing branded dresses.

Investment profile
A comparison is made between initial investment and present investment (see Table 4.6). The
conclusions drawn from the above data is very interesting, highly informative and provides a
number of clues for further scope of investigation and study.

Table 3.74.6 showing the Sample Respondent on the basis of the initial Investment and
present investment

INVESTMENT INITIAL % Share PRESENT % Share

Below 10 lks 64 51 8 6
10-50 lks 27 21 56 44
64
 50 lks-1 Cro 12 10 31 25
1 – 5 Cro 11 9 12 10
5 – 10 Cro 6 5 11 9
10 Crs and above 6 5 8 6
Total 126 100 126 100

A look at the pattern of investment it gives a very interesting conclusion that quite a number of
people are starting their business with a very low investment. Most of them are moving into high
investment category over a period of time. Virtually it is showing a pyramidal structure wherein
more number of people is at the base of the pyramid with less investment; but moving towards
top of the pyramid the number of people are reducing and the volume of investment is
increasing.

From the Table 4.6 shows that there are 64 people who have started their business by investing
less than Rs.10 lakhs . Today out of 64 only 8 people are continuing at the level of less than 10
Lakh investment. Obviously 56 people have gone in to a higher level of investment. It is
observed at every stage people moved from their starting level to next higher level, indicating
their progress in the venture started by them. The percentage variation is indicative of the
progressive value enhancing pyramidal structure as seen in the following numbers.

65
 INVESTMENTDETAILS

NO OF OUTLETS
70
60
50
40
30
20
10
0
Below 10-50 50lks- 1- 5 5- 10 10Crs
10lks lks 1Crs Crs Crs and
above
Investment

Series2 Series1

Figure 3.74.6 Investment-initial and present

A look at the pattern of investment it gives a very interesting conclusion that quite a number of
people are starting their business with a very low investment. Most of them are moving into high
investment category over a period of time. Virtually it is showing a pyramidal structure wherein
more number of people is at the base of the pyramid with less investment; but moving towards
top of the pyramid the number of people are reducing and the volume of investment is
increasing.

From the graph it can be seen that there are 64 people who have started their business by
investing less than Rs.10 lakhs (see Table 3.7). Today out of 64 only 8 people are continuing at
the level of less than 10 Lakh investment. Obviously 56 people have gone in to a higher level of
investment. It is observed at every stage people moved from their starting level to next higher
level, indicating their progress in the venture started by them. The percentage variation is
indicative of the progressive value enhancing pyramidal structure as seen in the following
numbers.

From Rs.10 lakhs to Rs.50 lakhs with 44% increase and from Rs.50 lakhs to Rs.100 lakhs with
66
25% increase and from Rs.100 lakhs to Rs.500 lakhs with 10% increase and from Rs.500 lakhs
to Rs.1000 lakhs with 9% increase and establishments jumping the Rs.1000 lakhs mark with 6%
increase is indeed phenomenal.

It can be seen that people who have started with low investments, because of their good work in
creating demand and the favourable market conditions, they have grown and have moved into
higher brackets of investment. Due to availability of sufficient capital and encouraging profits
margins, more number of shops got added in the initial stages of the trade and more volume
growth is taking place as they reach on to the top of the pyramid. As the time passes, business is
growing; along with the business number of establishments is also growing with higher
employment opportunities and increased turnover.

It was also evident from the discussions of some of the traders that Hyderabad is a upcoming
metro city and the opportunities in Hyderabad appear to have been growing much faster than
many other cities in our country. The graph indicates that the growth in the business has been
attracting more number of new entrants into this trade. The people who have come into the
business probably have not regretting as the pattern of the growth is good and appreciable profits
are also achieved.

Turnover
In respect of turn-over, the data so obtained doesn't give full satisfaction since the quantity and
quality of the information is mixed in nature. This study suffers from the apprehension in the
minds of many sample respondents to give their financial data. In addition to that they do not
readily possess the financial data pertaining to last four years. As a result, certain portion of the
data given by some retailers is only an approximate number and it may not reflect an accurate
figure and thereby the conclusion.

However, in the background of the given situation, whole turnover is classified into five
categories. Category 1: Below 25 lakhs, Category 2: 25 Lakhs -50 lakhs, Category 3: 50 lakhs-1
crore, Category 4 :1Crore - 10 crores, Category 5: Above 10 crores. But here a good pattern is
emerging. The turnover is showing a very good increase indicating more number of times of

67
rotation of the business in a given financial year. It indicates that the turn over may be hovering
above 4-5 times of the investment made by retailers. From the above data it reveals that nearly
76 % of the total retailers are playing between 25 lakhs to 10 crores. There is an increase
above 10 crores number. People who have already invested upto 10 crores their turnover is also
increasing proportionately. Turnover that is less than 25 lakhs is almost becoming extinct from
this group because, lesser the turnover lesser the profit and makes the retailer least interested in
the business. From a situation of up to 64 retailers who have invested upto 10 lakhs, a situation
of only 5 retailers whose turnover is less than 25 lakhs emerged. It is also an indication of the
increase in the business and people are able to encash through their increased turnover.

Table 3.8 shows that

Table 34..87 showing the sample respondents on the basis of their Turnover Table

Particulars Turnover(2008-2009) % Share

Below 25 Lkhs 5 4
25 lkhs - 50 Lkhs 42 33
50Lkhs - 1 Crore 32 25
1 crore - 10 Crores 24 19
Above 10 Crores 23 18
126 100

50

40

30

20

10

0
Below 25 lk hs - 50Lk hs -1 crore - Ab ove
25 Lk hs 50 Lk hs 1 Crore 10 10
Turnover(2008-2009) 5 42 32 24 23
% Share 4 33 25 19 18

Figure 3.84. 7 the sample respondents on the basis of their Turnover

68
Sources of funds
It was understood from the interviews with the sample respondents, gathered tthat the people
who have their family businesses started by first and second generations are able to expand their
businesses with owned capital. employed exclusively own funds in their business mostly fall
under the category of hereditary cloth business wherein the business empire is built by first and
second generation forefathers. This category of retailers are successful in retail business and
therey do not are no borrowed funds, by and large. Profits earned them are ploughed back for
re-investing as working capital and for further investment of future expansions.

In fact the number of retailers who have raised substantial loans both from the banks and private
parties are the important segment of the retail trade, as they are very optimistic about this
business and their success. It is also understood that many banks are readily come forward to
advance loans to textile segment indicating is also indicative of the level of confidence of
bankers on these borrowers that their amountloans will be recovered with out any problem,
provided the business is run with reasonable efficiency and care. This is indicative from the
table 4.8 chart sincethat the retail cloth merchants relying on private loanees form only are just
only six 6 percent when compared to 42 percent of them those who depends on have taken loan
from banks loans. which is 42%.

Table 4.8 3.9 showing the sample respondents on the basis of their Sources of Capital
TOTAL
SOURCE OF FUNDS NUMBER % share
Own Funds 30 24
Bank Loan 53 42
Private Loan 8 6
Public Issues 0 0
Bank Loan & Own Funds 35 28
Total: 126 100

69
 Ow n Funds

Bank Loan

Private Loan

Public Issues

Bank Loan & Ow n

Funds

Figure 3.94.8 the profile of sample respondents on the basis of Sources of Capital Funds

Profitability
The sample respondents were hesitant in sharing the data relating to their profitability, and
however they have given an average rate of profits for a period of 5 years. The table 4.9 shows
the average rate of profits earned by the sample respondents for a Researcher experienced non
cooperation of most of the retailers, while answering the question relating profitability data
pertaining to 2004-05, 2005-06, 2006-07, 2007-08. However data given for the year 2008-09
appears to be of higher percentage of accuracy. To have an indication of their growth in business
most of the retailers have given their percentage of profit over a period of 5 years. instead of
actual numbers. Conclusion are drawn based up on the average profitability over 5 yrs given by
the retailers.
Table 3.104.9 Showing The Average Profitability Of The Sample Respondents For Five
Years
Profit % No. of units % Share
10 to 15% 26 21
15 to 20% 19 15
20 to 25% 28 22
25 to 30% 32 25
30 & above 21 17
Total 126 100

70
 Rate of return

35
30
25
20
No of outlets
15
Series1
10
Series2
5
0
10 t0 15 to 20 to 25 to 30 &
15% 20% 25% 30% above
% of return

Figure 3.104.9 Distribution of the sample respondents on average Profitability

On going little deep into the data and also during the personal discussion with the retailers it is
revealing that the people whose investment is low, the turnover is also low yet their percentage
of profit is high. It appears these people are doing business with higher profit margins. This
kind of a situation is arriving out of two reasons .one is they are in the out of market area of the
city where in people do not readily consider to buy products from them. Secondly, these people
may be offering a credit facility to the customers for which they are compelled to pay more for
the product. The higher prices may not show an impact on the buying habits as the customer is
not out of pocket immediately. The spread of repayment is the benefit for the extra price paid.
Obviously the number of people who have been taking Least percentage of profit that is 10-15%
are those people whose investment is very high and whose turnover is also very high.

Many a times it is also observed that some of the retailers when people buy in bulk offer some
kind of a rebate or a kind of a discount in order to protect the relationships with the customers.
More over it is very important for the top retailers to compete with rest of the retailers in order to
run their business with more number of customers visiting them and increasing their turn over.
So to maintain the high turnover obviously they have to reduce the percentage of profitability so
that they may be able to attract more number of customers in their counters.

71
Product Category specialisation
Like many other retail businesses the retail cloth business also experiences fluctuations in
different components of their range of products during different periods of time. For the purpose
of this study four standard categories are taken, which contribute around 90% of the total
business.
1. Men’s wear
2. Women’s wear
3. Kids wear
4. All types put together
Analysis of this data indicates distinctly clear conclusion that the kids wear is the most
fluctuating component of retail cloth business. While the fluctuation is least seen in ‘all types of
categories sold’ under one roof. An attempt is made to connect this inference to the reasons as to
why the retail trade is fast switching over to multi category business profile instead of remaining
as an exclusive outlet.

In multi variety retail business even if some fluctuation is seen in one of the components the
impact is not felt severely as it gets compensated because of the rest of the components selling to
the normal tune. In other words, the fluctuation in one segment is being compensated by the
better performance in the other segments.

Table 4.10 Showing The Product Type-Wise Classification Of The Sample Respondents

Group No. Of Outlets % Share

Mens wear 13 10
Womens wear 28 22
Kids wear 75 60
All 10 8

72
 Total 126 100

Fluctuating Market

80
70
60
No of Outlets

50
40 S eries1
30
20
10
0
Mens wear W omens Kids wear All
wear
Type of outlet

Figure 4.10 Product type-wise classification of the Sample Respondents

Different retail traders gave different reasons for such a trend in specialization to all at one place
model. A consolidation thereof may be summarized as under.
1. Kids wear being highly fluctuating of this business is understandable, as at the time of
opening the schools after summer vacations it records probably a highest sale for the
entire year. It is observed that not only the school uniforms are bought but also routine
casual wear and night dresses of kids are also bought at one time, preferably in the
beginning of the academic year in order to equip the child with adequate dresses required
for the entire year.
2. Certain important festivals like Ganesh Chaturthi and Dusshera to male kids, Sankranthi
and Festivals falling in the month of sravana are for girls; similarly, Ramzan and
Christmas are the festivals for both sexes are very important events to boost up the sale of
kids wear. How ever in India, round the year one or the other festival coming to help sell
the kids wear. Surprisingly in between the above events the demand for kids wear is
significantly low.
By and large Women’s wear also shows fluctuations depending on different
festivals falling in the year. How ever the difference between womens wear and kids

73
 wear is significant.
As can be seen, the seasonal element of a variety is not common and therefore the sales
of retail outlets dealing in all varieties would ensure continuously uniform sales for the
outlet as a whole.

Table 4.112 showing the number of sample respondents having Steady business segment
GROUP No. Of Outlets % Share
Mens wear 52 41
Womens wear 33 26
Kids wear 9 7
All 32 25
Total 126 100

Outlets having Steady Market

60
50
No of Outlets

40
30 Series1
20
10
0
Mens wear Womens Kids wear All
wear
Cate gory

Figure 4.211 Steady business of segment Graph

Uniformly all the retailers agreed that mens' wear is very steady business component of their
shop. Month to month fluctuations are not seen much in this component. Next to men’s wear
consistency of sales round the year is also seen for women’s wear. Kids wear being just seven
percent is further proving that the component undergoes a high proportion of fluctuation. The
percentages obtained under all types don’t give specific indications as they are the mixture of all
the three components chosen by the shop keeper.

74
For example, in some shops though they come under all types, they are predominantly oriented
to women’s wear. Some other sets of shops are oriented to kids wear. Therefore the individual
retailers opinion is also fluctuating based upon their experience. It is directly related to the type
of stock he is keeping in the shop.
.
It is observed by many shop keepers that lot of impulsive purchases are seen in this segment.
Attraction of new colours, new designs and patterns is said to be one of the main reasons
therefor. In addition to this as a marketing strategy most of the retail outlets employ skilled sales
personnel to decorate the dress on the lady personally by reflecting her image in multiple mirror
images. This technique may be considered as hard selling strategy that tempts the client to buy
the material. Creative approaches chosen by different outlets are also paying rich dividends by
tempting the women folk to make spot decisions for possessing the dress material.

Frequency of changes in preferences

The table and graph given below are self explanatory, where in 41% of retailers shared their
experience and informed that the Kid's wear is one which undergoes highest change very
frequently because of customers changing preferrences and tastes. After kid's wear women's
wear occupies the second position with 36%. Men's wear is the most standard and consistent
business with least changes expected from the customers.

From this it is clear that most of the parents look forward to dress their kids differently in a
variety of dresses and enjoy as they are appreciated by many of the on-lookers. The reasons
appear to be quite different in case of women-folk. The ladies fashions undergo very fast changes
not only internationally, but also in India because of the influence of Hindi and Telugu film
heroinsheroines who change their dresses very frequently in sequential scenes of a picture.

Table 4.12 showing the sample respondents on Segmental change of tastes and
preferences
Tastes and preferences as criteria

75
 GROUP No. Of Outlets % Share
Mens wear 4 3
Womens wear 45 36
Kids wear 52 41
All 25 20
Total 126 100
Figure 4.13(a) Segmental change of tastes and preferences Table

Frequent changes in tastes and preferences

60
50
No of Outlets

40
30 Series1
20
10
0
Mens wear W omens Kids wear All
wear
Ca te gory

Figure 4.132 (b) Distribution of sample respondents on the basis of Segmental change of
tastes and preferences Graph

Price structure changes

It is obvious, once again kids' and women's wears are leading with highest fluctuations in their
price structures. As and when patterns, designs, colors and fashions are changing; it calls for
creativity from the manufacturers, for which the industry should employ experts at higher wages.
In addition, as the fashions are dynamic, there is a possibility of some stock designed with earlier
models may remain unsold, bringing loss to the manufacturer. It is a fact of business to provide
cushions for un-anticipated losses, by fixing the price at a higher level. Added to that any new
fashion is commended as a premium product only when it is priced high; because most of the
customers perceive quality of any product only when they are priced high. The standard nature

76
is protected even in this aspect for Men's wear with only 4%.
FigureTable 4.413 High Price Fluctuations
Frequent Price Fluctuations
GROUP No. Of Outlets % Share
Mens wear 5 4
Womens wear 46 37
Kids wear 48 38
All 27 21
Total 126 100

F re q ue n t P rice F lu ctua tio n s

50
40
30
No. Of O utl ets
20
S eries1
10
0
M ens W o m ens K ids All
wear wear wear
O utl et Type

Figure 4.413 High Price Fluctuations Graph

Distribution & logistics
The interesting feature of this trade is that even retailers have an access to the manufacturers
directly and get their stock at whole sale prices. This point is adequately demonstrated from the
answers of the retailers chosen for this study. Some of the ready-mades and most of the kids
wear are technically secondary in their origin, since different manufacturers of ready mades buy
cloth in the whole sale market and make their dresses as per the designs by combining two or
more varieties. Otherwise excepting big manufacturers like Raymonds, Gwalior etc who only
supply to certain listed shops in addition to their exclusive show rooms; rest of the varieties can
be obtained direct from manufacturers. Women's wear, particularly Kanchi, Dharmavaram,
Guntur etc sarees can be obtained from the manufacturers. How ever when large quantities are
77
required, there are certain contractors who work as middlemen and decide the rate of supply
depending upon the quantities lifted by the retailers.
FigureTable 4.514 - showing the sample respondents on Distribution and Logistics of
products
Distribution of logistics
Direct
Direct Through import &
Type of Factory % Stockiest & % other %
Outlet supply Share distributors Share sources Share
Mens
wear 43 54 31 39 8 10
Women
s wear 49 62 5 6 26 33
Kids
Wear 19 24 36 45 8 10

Distribution of Logistics
70
60
Number of Outlets

50
40
30
20
10
0
DFS % Share S&D % Share DI&FS % Share
Different sources of supply

Mens wear Womens wear Kids Wear

Figure 4.514 Distribution and Logistics of products

Customer Profile
Table 4.615 showing the profile of the Customers of the sample respondents

Profile of the Customers

78
 Type of
Outlet Average Age Economic Status Visiting Hours
Ric
Teens Adults S.C. h M.C. E.B.* Morn Afn Eve
Mens
wear 41 65 20 38 77 11 15 30 81
Womens
wear 45 71 10 49 62 15 11 13 102
Kids
Wear 33 78 15 36 81 9 14 13 99
SC- Senior Citizens; MC- Middle Class; EB- Economically Backward; Morn- Morning
Afn-Afternoon; Eve- Evening

Profile of the Customers

120
100
No of Outlets

80
60
40
20
0
Ts Ads S.C Rich Mdl EB Mrg AN Evg
Various factors influencing purchase

Mens wear W om ens wear Kids W ear

Figure 4.6 15 Customers’ profile of the sample respondents

Average age
An attempt is made to find out that which age group of people visits the retail outlet most and
who are all the people in the family who will take the final decision in buying the products. It is
also very important from the point of view of developing advertisements keeping the most
visited age group as TARGET AUDIENCE, and for highlighting their needs and introducing
varieties of dresses impressive and suitable to them. In men's wear, women's wear and kid's
wear, Adults are emerging as the dominant group who not only visit the shops but also take the
79
final buying decision.
Economic status
Predominantly, middle class people are dominating in their numbers. It should obviously so,
since the society itself is composed of large number of middle class people. It is an encouraging
trend to observe that the economically backward class people are visiting even big retail show
rooms to an extent of about 10%. Of this the number of womenfolk out number, mainly because
of improved economic conditions and their urge to utilize the services available to them.

Visiting Hours
The shops in the city appear full mainly during evening hours. Since large number of
womenfolk visit the retail cloth show rooms. The main reason attributed for the behaviour is
their convenient time is the busy rush hour of the shops also. It is understandable that the
womenfolk are busy during both morning and after noon and visit mostly in the evening time.

Advertisement & Sales Promotion

The new generation retail show rooms, which are in offing have started advertising to project
their image as shops with availability of multi-product range like -- all varieties of clothes
including ready mades and hosiery, gold, silver, wrist watches, perfumes, bangles, bindis, ladies
hand bags and a host of other novelty utility items. It appears that the entire retail trade is looking
for convincingly favourable results so that they also follow in suit. The leading exclusive show
rooms are also concerned about this development and trying to protect their market share from
drifting in favour of these multi product shops.

In addition to the regular promotional activities of the trade, the above development is also
causing concern to every one in the trade. In fact many of the leading retail show rooms have
stepped up their sales promotional and advertising activities by allocating higher percent of
budget.

Under the circumstances, the pattern of retailers answers are also speaking in favour of
Advertisement and sales promotional activities. It is no wonder that a highest of 36% was
favoured by retailers who are stocking all varieties of products, followed by kid's wear which is

80
28%.
Table 4.716 showing the Requirement of advertisement and sales promotion of the
sample respondents

Type of Outlet No.Of Outlets % Share

Men’s Wear 18 14
Women’s Wear 28 22
Kids Wear 35 28
All varieties 45 36
126 100

Requi rem e nt of Prom otion

All

KW
Typ e o f
outle t WW

MW

0 10 20 30 40 50

No Of out let s

Figure 4.16 .7 Requirement of advertisement and sales promotion

Effective Advertisement Media
An attempt is made to elicit information as to what according to the businessmen the effective
advertisement media is. The table below shows the responses.

Table 4.817 showing the media of Advertisement of the sample Respondents

Media of Advertisement No. % Share

Insertions in Newpapers 10 8
Advertisements in Magazines 32 25

81
 Electronic Media 40 32
Mouth Publicity 44 35
126 100

Media of Advertisement

Insertions in Newpapers

Advertisements in Magazines

Electronic Media

Mouth Publicity

Figure 4.817 Advertisement media used by the sample respondents

The pattern of answers is not indicating any trend of the trade. It looks as though the answers are
casual or the traders do not carry any specific idea of advertisements. In reality also the tendency
of the traders is to copy or imitate the leading retailer of the trade who is very successful in
attracting crowds.
From the available data - by word of mouth the message appears to have been spreading fast
according to 35% of traders. Their idea is in accordance to the age old saying of "one satisfied
customer will bring ten new customers". It means selling quality products at reasonable prices
will bring not only repeat customers but also new customers, as the satisfied customers are
openly talk in appreciation of them in presence of their neighbours etc.,

Advertising in Electronic media stands second with 32%. However they said that the electronic
media attracts good crowds, most of them are not into electronic media. It appears that it is their
feeling not an experience. The fact remains that advertising in electronic media is very
expensive, not really in the reach of any average sized retailer. All the advertisements in e-media
are inserted by only a handful of retailers who are really leading in the market.
82
Advertising in Magazines and news papers is found to be in the reach of above average sized
retailers. Quite a few advertisements from this segment are seen in the news media. Mostly the
advertisements are inserted to inform about the discount offers, free offers etc., Product related
advertisements and Institution oriented establishment promotional advertisements are not seen.
All these advertisements are only one time advertisements appear for two or three times in a
news papers. They do not insert feature promotion or service promotion oriented advertisements
in series.

Preferred effective promotional activity

The data collected is analyzed to work out the preferred trend of advertisement.
Figure 4.189 showing the effectiveness of Sales Promotion Activities

Type Of Promotion No.Of Outlets % Share

Personal Selling 21 17
Advertisement 40 32
Sales Promotion 47 37
All the three 18 14
126 100
Promotional Tools

50
40
No of Outlets

30
20
10
0
P.S Advt S.P All
Type of Promotion

Series1 Series2

Figure 4.918 Effectiveness of Sales Promotional activities of the sample respondents

The data obtained while administering the scheduler is in accordance with their practices
observed and the ground level reality in the market place.

83
According to 37% of the retailers Sales promotional activities are considered as the most
preferred method of getting the sales in a given year. Advertisement was considered as the
second best with 32%. Roughly about 70% of the retailers depend on both sales promotion and
advertisement.

Though personal selling is considered as a third option by 17% of the retailers, the role of sales
personnel who play a vital role in canvassing and convincing the customer to buy the products of
their choice cannot be ignored. Certain salesmen do not allow the customers coming out of the
shop without buying any product.

By and large it appears that the retailers are very clear of what they have to do and what they are
doing.

The preferences of the retail trade is no different from what they have recommended. The
following types of preferences are enlisted with certain creative ideas floated by individual shop
in-charges.

• One retailer preferred to quote his price on the product and by encouraging the customer
to bargain for a price of his choice, so that the sale is closed with a via media price
between the quoted price and the bargained price.
• Most of the customers wanted to give a rebate in an attractive % between 10 - 50%
during special occasions of festivals and social events. They wanted this rebate scheme is
to be widely publicized in electronic media, News print and through hand bills etc.
• A few retailers wanted to run gift schemes and free offers; particularly when the stock
holding is piled up and the products are becoming old beyond a limit. Certain others felt
that when the products are becoming out of fashion and the current season is turning into
a different one, the earlier product must be sold providing room for new seasonal
decoration by selling with a scheme of one piece free on a purchase of one piece.
Obviously the shop keeper doesn't lose any money since moderate profits are worked out
by revising the selling prices.
84
• The shop keeper is always at an advantage since there is no fixed price concept in the
trade, unless it is a company run show room. In addition to that, it is very difficult to the
common man to estimate the quality of the product in relation to its price. Govt. controls
are also not seen to help the buying public from being cheated by avaricious traders
• Most of the traders did mention about the pivotal role played by the sales staff to wards
taking a positive buying decision by the visiting customer..

Offering Sales promotional schemes

Organized information of specific promotional offers given in a specific period of time is not
forthcoming for want of record maintained by the retailers. It was therefore difficult to study the
impact of different offers during different parts of the year.
How ever, relevant data was obtained regarding different promotional activities conducted by
various retailers and broad based periods of the year.

The information obtained from various retailers is tabulated as per the tables given below:
1. Promotional Pattern
Table 4.109 showing the pattern of the Promotional schemes

Effective Promotional Activity No.Of Outlets % Share

Discount Sales 39 31
Ashadham sale 12 10
Festival Offers 25 20
Buy one get many 18 14
Lucky Draws & Caartoon
Characters 10 8
Gift coupons 22 17
126 100

2. Seasonal impact
Table 4.1120 Showing the Seasonal discount period of the sample respondents

Discount period No. Of Outlets % Share

December - March 39 31
April - June 17 14
July - November 62 49

85
 All through the year 8 6
126 100

Promotional Pattern
The overall promotional activities of the retailers are divided into six categories -
• Discount sale
• Ashadham sale
• Festival offers
• Buy one and get many
• Lucky draws& cartoon characters
• Gift coupons
• Discount sale: This is charecterized by quoting an attractive percentage of discount in
the price labeled on the material. Ex:- If the displayed price of a sari is Rs. 1000/- they
declare an attractive 30% discount on it and sells at Rs.700 + taxes. Similar discount
structures related to different types of products available in the shop are displayed right in
the shop by hanging danglers and fixing posters etc. In addition certain shops print hand
bills and distribute to people in person by putting them into their hands. Certain shops
insert advertisements in the news papers, Electronic media advertisements. scrolling in
news channels, showing slides and short films in regular theatres before and in between
main cinema shows etc.,

This discount sale is responsible for 31% of the total sales which is the highest among the
sale taken place through promotional activities.

• Ashadham sales: Ashadham is a Telugu month which falls generally during July and
August of Roman Calendar. Ashadham in Andhra pradesh is considered as not so very
auspicious month during which Hindus do not perform any arranged functions like -
Marriages, Upanayanams etc., In fact Ashadham is known for its peculiar practise of
newly wedded daughters-in-law and mothers-in-law do not prefer to live under one roof
for the whole month. Generally during Ashadham people do not venture to do any new
things including buying new clothes and wearing them. During the month of Ashadham

86
 traditionally the cloth business used to be very dull with the income coming down to an
all time low of the year.

Significantly some two decades back one bright marketing idea clicked in the retail cloth
market, changing the situation from very low sale of clothes to fairly good sale of clothes
during Ashadham month also. The earlier peak & valley fluctuation in the business has
been tamed to a low curved position giving a kind of a uniform return on their
investment. The Idea is to give a very special "Ashadham sale" offer by attracting the
buying public with even upto 50% and more on the declared prices. They extensively
publicize the Special Ashadham sale. It was indeed a kind of clearance sale to the retailer
to get rid off the shop soiled, out of fashioned and defective items of clothing.

Now a days certain retailers started advertising as "Real Ashadham Sale" even after the
month of Ashadham is turned and Sravanam entered. The impact visa vis sentiments
will make an interesting study. About 10% of the sale takes place during this month.
• Festival Offers: It is in line with the traditions of the country that people would like to
enjoy life by eating well, dressing well and spending time in a joyous way during the
festival time. It is clearly seen that the religion plays a vital role in this aspect.

During the festivals like Sankranti, Dussehra and Deepavali among Hindus; Christmas
and Ramjan among Christians and Muslims are popular occassions to boost up the sale of
clothing.
20% of the sale obtained through promotion comes during these festival days.

• Buy one and get Many: Of-late a sales gimmick is widely employed by the retail cloth
merchants to attract crowds by announcing 'buy one article and take two articles free'.
This gimmick is played in different combinations and permutations for various articles
including Silk saries. This trick is making lot of people rush to shops and buying products
irrespective of their real requirements.
14% of sale is coming through this method.

87
 • Lucky draws & cartoon characters: 17% of the business is estimated to have been
obtaining through this method. Using this lottery system of lucky draws is some times
deployed as an absolutely independant method while some times it is used in association
with Festival offers etc.,
They extensively publisise that on the occassion of the Annual day of the establishment lucky
draw will be conducted on those purchases which are for more than Rs.1000/- at a time. They
issue tickets @ one ticket for every thousand and ensure the customer fills up his name address
and phone no and drop in a sealed box. A dignitary or a film star is invited to draw the lucky
ticket on the day which was announced.

The most attractive part of the whole issue is that some of the shop owners put expensive cars to
be won free on becoming the owner of that lucky ticket drawn by the dignitary or film star. For
the entire period the cars and other expensive and attractive house hold amenities are displayed
in the shop it self, so that the people who have come for shopping to have a glance at them and
dream to possess by winning them.

Seasonal Impact
The time during which most of the festivals fall and the most profitable season of the year to
cloth merchants is July to November. 49% of the total sales get turned during these three months.
Similarly During December to March 31% of sales turn over takes place in the retail cloth
business. It means that during the six months period starting from July and ending in March
about 80% of the business is taking place.

Orientation of promotional strategy

Figure 4.121 showing the orientation of the Promotional activities of the sample
respondents

Orientation No.Of Outlets % Share

Customer Oriented 81 64
Product Oriented 35 28
Establishment Oriented. 10 8
126 100
88
 Type of Promotion

Customer Oriented
Product Oriented
Establishment Oriented.

Figure 4.12 Promotional orientation Graph

Generally organizations with strategic promotional plans dedicate their advertisement campaigns
to one of the following aspects:
• Customer oriented
• Product oriented
• Market oriented
• Establishment oriented (Image Building)

From the data ( 64% ) available with us it is very clear that the advertisement campaigns are
aimed at attracting customers towards the establishments during specific periods of special offers
etc., Here the predominant customer orientation is meant to attract specific customers like
women, children etc., To build customer opinion about the special offer periods. To attract
people to invest a minimum of certain amount so that they become eligible to participate in the
lucky dips etc., In this type of campaigns even the names of certain product range is mentioned
they do not highlight about the products by describing their superior quality, exclusive features
or benefits. The total effort is put in only towards drawing crowds to their establishments.

28% of money is spent on product oriented advertisements. In this type they highlight the
arrivals of new designs new patterns etc., through certain advertisements either combined with
others or exclusively also occasionally.
89
The 8% of establishment oriented advertisements is a very tricky figure. In fact in all the
customer oriented advertisements the establishment orientation is built in. In bold letters they
write the name of the establishment and repeatedly write about "Available only at" .....(the name
of the establishment.)....... Though technically the orientation is not towards the image building
exercise the purpose is served more than required for the Organization.

Impact of the promotional activity

Table 4.1322 showing the Impact of Sales Promotional activities of the sample
respondents
Promotional
Expenditure %
Type of as % of Increase
Promotional promotional sales in sales
Methods activity Turnover turnover % Share
Personal Selling 25 5 to 10 15 to 20 20
Advertisement 53 15 to 20 25 to35 42
Sales Promotion 48 15 to 20 20 to 25 38
Total 126 100

There was a little resistance from the shop keepers while answering queries touching upon the
profit figures with reference to their books of accounts. However, there was no hesitation to give
an approximate idea about the figures. After collecting the entire data it gives a feeling that the
figures given by them are realistic in nature though they are not precise as per records.

There is a unanimous agreement that promotion is a very important exercise in this business
without which business cannot progress and prosper for long time. The figures given by them
also convincingly proved that every body got profited from the promotional activities without
any exception. From the conversation with retailers reveal that one has to be very bold in taking
certain decisions regarding promotional programmes and finalizing the expenditure for the year.

One other thing is very clear that the senior and well established shops ventured to invest huge
money on upkeeping of the shops and running big promotional programmes by spending good
90
amount on advertisement and sales promotion to get commensurately big profits out of their
investment.
Figure 4.1423 showing the Average promotional expenses of the sample respondents
Average Promotional
Expenses per year No. of outlets % Share
Less than 50,000 55 44
50,000 - 1,00,000 23 18
1,00,000 - 5,00,000 18 14
5,00,000 and above 15 12
Advt by Company 15 12

Chart showing Advertisement Expenses

Less than 50,000

50,000 - 1,00,000
1,00,000 - 5,00,000
5,00,000 and above
Advt by Company

Figure 4.23 Average promotional expenses of the sample respondents

Retailers expressed that experimentation of established and standard methods and techniques
will give enough experience and knowledge to earn good profits as expected.

The above data shows that about 44% of the merchants have allocated very low budget for
promotional activities. The reasons mainly attributed are:
• The size of the establishment is very small and could not venture investing large amounts
to wards promotion.
• The establishment is very recent one or new in its inception and the inability to invest.
• People running the business would not have studied the impact of promotion on the
business due to lack of knowledge and experience.

91
• Previous failure experience on promotional programmes, even if was due to various
reasons including adopting wrong methods in communicating to customers.
• Basically very conservative and timid attitude against "thinking big and acting big"

One other point that emerges is that those people who are investing money in promotional
programmes, with all the required professional care are getting huge benefits from their efforts
and expenditure. This further justifies as to why the entire world is spending huge amount of
money and advertisement and sales promotion.

Impact of giant retail cloth outlets/Multiple branches

There are a few big establishments like –M/s. Chandana, R.S. Brothers, Kalanjali, Kalaniketan
etc., who have opened up giant retail-chain shops in very important locations of Hyderabad city
in addition to other cities like Vijayawada, Visakhapatnam, Rajahmundry etc., In addition to
getting these shops located in busy markets, they deliberately indulge in window dressing in such
a way that no passers-by miss these decorative attractions. All most all of the giant players in the
retail business diversified their activities by expanding their operations by extensively stocking
Gold, Silver, Fancy goods mostly used by women folk, Wrist watches etc., in the same shops
apart from making available a host of varieties of clothing including ready mades and hosiery.

The presence of these giant shops has proved a definite threat to the rest of the retailers operating
on lower scale of operations running the business in a conventional and conservative style. The
general feed back from retailers is reflected in the following list:

• Conventional establishments are already feeling the heat under their collars, as some of
their clientele got converted by these multi product shops.
• Majority of the small time retailers expressed that these giant shops are reaping the
economies of large scale operations, by virtually dictating terms to the manufacturers and
getting products at concessional prices by offering to lift large volume of stocks at one
time and thereby offer heavy discounts in prices. These giants are operating on thin profit
margins and concentrate on sales in larger volumes. In this context the small timers are
compelled to buy stock at higher prices and sell at lower prices than the giant shops.
92
• In fact the sales figures of certain shops located in the vicinity where the giant shops are
situated have recorded a low sale while some of them have not recorded any growth in
the sales.
• Hyderabad is a place where the business given by the floating population is quite
significant. People who do not know much of Hyderabad city get carried away by the
prominence of these establishments, which are erecting big hoardings in and around Bus
stands and Railway stations etc., and directly going to those shops for their special
purchases.
• Majestic out look, arresting window dressings, gigantic hoardings and very extensive
advertising campaigns have indeed become a threat of stiff competition.

Labour intensity & related problems

Table 4.1524 statement showing the Labour intensity of the sample respondents
Type of Outlet No. Of Outlets % Share
Mens wear 9 7
Womens wear 39 31
Kids wear 52 41
All 26 21
Total 126 100

Chart Showing Labour Oriented Segment

All
Type of Outlet

Kids wear
Series1
Womens wear

Mens wear

0 10 20 30 40 50 60
Number of Outlets

Figure 4.1524 Labour Intensity of the sample respondents

Kids wear and women’s wear are obviously occupying first and second positions with a
93
combined percentage of 72%.

The reasons are not beyond any body's guess since these two segments of clothing involve
intensive selection process by more number of customers very frequently. In addition these two
segments are also high profit yielding segments in the same order of merit.
Table - 4.16 25 showing the Labour problem of the sample respondents

Problems No.Of Outlets

Frequent demand for salary
Hike 17
Frequent absence from work 25
Improper Communication 25
Lack of patience 31
Late coming 18
None 10
126

The Problems highlighted by retailers are very common problems generally associated with un-
trained and disorganised workers of any Industry. Surprisingly there are no Union related
problems and collective bargaining issues are seen in workers of this trade segment. Compared
to the contemporary working environment of different Industries, retail cloth trading is
absolutely in favour of the owners of the business. There is no Organised system among workers.
The boss can sack the worker at any time since specific negotiated norms or rules are in vogue.
Though these people come under "Shops and Establishments Act" because of high competition
and dearth of employment, unionised activities are not seen.

• Frequent demand for salary hike: The attrition ratio is noted to be high with respect to
the experienced staff. Salaries are not very attractive. Some of the senior workers who
have picked up the work and doing a good job are being noted by other shop owners who
are in need of good workers. They attract such workers by offering little high salary. At
that time the existing shop owner has no option to retain him without giving the amount
demanded by him, if he wants to keep him. Other wise he can leave him and recruit a
fresh worker who will be available readily.
• Frequent absence from work Lower middle class living, health problems of self and
94
 members of the family and working till late hours in the shop are few contibutory factors
for this problem.
• Improper Communication : Low level of education, inexperience in moving and
dealing with people belonging to higher level of society are responsible for this problem
in addition to lack of job training
• Lack of Patience : Long hours of work (10 to 12), Inadequate training, some times the
behaviour of the visiting customers; in addition to their personal problems appear to be
the causes.
• Late Coming : Besides personal problems; distances to be covered during the heavy
traffic hours in the morning, Over working in the shop late in the night etc.

Mode of payment of salary (Remuneration)

Table 4.1726 showing the mode of the Payment of salary of the sample respondents

Remuneration No.Of Outlets % Share

Fixed Salary 46 36
Salary + Commission 55 44
Salary + Incentives 25 20
126 100

D e ta ils o f R e m u n e ra tio n

60
50
40
M o o f O u tle 30
ts
20 S eries 1
10 S eries 2
0
F ix ed S alary + S alary +
S alary C om m is s ionInc e ntives
T y p e o f R e m u n e ra tio n

95
 Figure 4. 1726 mode of Payment of the sample respondents
It appears about 64% of the shops are rewarding to workers based upon their individual
contribution to the Organisation or extraordinary productivity compared to rest of the workers.
That is to say that almost 2/3rd of the sample units pay extra either by way of incentives or
commissions apart from salary. This is only to motivate the staff to keep the sales high. This
also ensures proper behaviour with the customers and service to them. This has the benefit of
repeat clientele without much effort on the part of the owner. In way, it was expressed that the
incentive or commission is also viewed as promotional expenses.

Nature of labor
Table 4.1827 showing the Nature of labour in the sample respondents
Requirement of Labour
Nature of Labour No.Of Outlets % Share
Organised Regular Labour 30 24
Unorganised regular labour 79 63
Casual labour 17 13
126 100

R e q u ire m e n t o f L a b o u r

80
70
60
50
No of Units

40
30
20
10
0
O rganis ed U norganis ed C as ual labour
R egular Labour
regular labour
T yp e o f L a b o u r

S eries 1 S eries 2

Figure 4.18 Nature of labour in the sample respondents units

Here the classification of workers as - 1. Organised regular labour 2. Un organised regular

96
labour and 3. Casual labour is based upon the following facts:
• Organised regular labour: These are the workers who are in the rolls of the
Organization as permanent employees and getting all the benefits pre-decided by the
organization to its workers. The names of these employees are registered in the books of
Labour commissioner, Govt. of Andhra Pradesh.
• Un-organised regular labour: This category of workers do not have any permanent
employment status in the organization. They are a kind of Probationers/Trainees. As
such there is no threat to their employment as long as they do their assigned job. It takes
more time for the authorities to confirm him as a permanent employee with a letter of
appointment. These people are not casual, as they get their monthly salaries.
• Casual labour: The need for casual labour is occasional. Therefore they are paid a fixed
wage on a daily basis on all working days. If the special purpose for which they are
employed is completed, they are no longer required by the shop owner.

Only one fourth of the workers appear to be the permanent full time workers while 63% of the
workers are on a kind of temporary employment, working under the mercy of the management
and need based.

Seasonality of business
Analysis of data regarding the seasonality of the business show the trends as indicated in figure
4.28.
Table 4.1926 showing the Seasonality of Business
Seasonality of the Business
Men’s Women’s Kid’s All
wear Wear wear
Round the Year 106 75 48 52
Specific period 5 8 51 5
Rebate period 4 18 5 31
Festival period 11 25 22 38

97
 Seasonality of the Business

52

31

38
5
Period of Purchase
3

48

51

22
5
2

75

18

25
8
106
1

11
5
4
0 20 40 60 80 100 120 140

Round the Year No of Outlets

Specific period Rebate period Festival period

Figure 4.1928 Seasonality of Business of the sample respondents

The above chart is self explanatory in assessing the seasonality of different types of clothing
normally stocked and sold by retailers.
The above data is very well in line with the earlier findings regarding the market behaviour of all
the three types of clothing specialties.
• Men's wear: As observed before, it is a business which is enjoyed by the shops through
out the year without any significant deviations in spite of temptations by way of various
offers. Men's wear is an ideal round the year business.
• Women's Wear: It is being a high volume component of the cloth business is also by
and large maintaining uniformity through out the year. How ever, it is one business which
is showing higher level of response during the rebate period. It speaks about two things
clearly - one, the demand for the product is fairly uniform through out the year because of
extensive shoping habits of the women folk and some offer or other given by some shop
keepers through out the year to attract the women folk into shopping habits. Secondly,
festivals, rebate offers certainly have a special influence over the womenfolk in
purchasing their attires.
• Kid's wear: During our analytical discussions we observed that the Kid's wear is a
highly flexible product with its business confining to specific periods like - after summer
vacations at the time of starting schools and during festival periods. Once again the same

98
 thing is found with highest % of sales coming during specific periods like school opening
period and during festival times.

Expansion and diversification

An attempt was made to elicit information on future plans of expansion and diversification.
About 55% of the shops are looking for ward to bring necessary changes in improving their
market share. The response does not really indicate any set direction.
Table - 4.209 showing the Preparedness to Expansion of the sample respondents

Expansion & Diversification % No.Of Outlets

Yes 54.76 69
No 45.24 57
126

Expansion and Diversification are two inevitable developments that should take place eventually
in any business for its existence and continuity. Expansion of business is seen as not only taking
a share from the growth of the market that is regularly happening in cloth business, but also
losing their existing share to competitors or new entrants of the business.

As far as their plans are concerned, some people are adopting the method of wait and watch with
reference to diversifications like starting unrelated commodity stocking and selling etc. Most of
the people are of the opinion that they have plans to spend a fixed percent of their property
towards expansion by way of improving the shop and stocking different products. It is also a fact
that some of them were expressed slightly negative opinions regarding their continuation in this
highly competitive and investment oriented business.
Table 4.2301 showing the Areas of diversification of the sample respondents

Areas of Diversification
Diversification No.Of Outlets % Share
Jewellery 18 14
Cosmetics 8 6
Footwear 8 6
Jewellery & Cosmetics 11 9
Jewellery,Cosmetics & Footwear 10 8
None 71 56
126 100
99
 Areas of Diversification

Jewellery

Cosmetics

Footwear

Jewellery & Cosmetics

Jewellery,Cosmetics & Footwear

None

Figure 4.2130 Areas of diversification of the sample respondents

By the time this survey is conducted the multi product diversification process is in fluid state. No
single shop owner had given any positive signal about their diversification with reasonably good
profits.

The existing Status: People who have started both gold and silver articles had invested heavy
finance into the business in order to maintain different varieties of ornaments and utility items.
Initially every body who was visiting the cloth shop were going round the jewellery section
mainly for window shopping only. It took quite some time for the people slowly to get convinced
about the purity of gold and silver and the standard of the prices maintained in bullion market.
Added to this the traditional bullion merchants increased their advertisement campaigns and also
started whispering campaigns about the new outlets putting the customers in a kind of confusion.
The new incumbents had a positive signal from the International behaviour of the bullion prices.
As the bullion prices increased, some of the people who have stocked heavily during low price
time got good benefit.

Presently the cloth merchants with jewelry sections are looking forward to consolidate the
situation in the back ground of their newly acquired knowledge and experience. To draw any
conclusion about the experimentation, probably it will take some more time.

Factors of success

100
 Figure 4.2231 showing the Success factors of the sample respondents
Key to Success No.Of Outlets % Share
Hard work 67 53
Team work 15 12
Increased Investment 36 29
Novel Promotion Activities 8 6
126 100

Reasons for Successs

Novel Promotion Activities

Reasons

Increased Investment

Team work

Hardwork

0 10 20 30 40 50 60 70

Series1 Series2

Figure 4.22 31 Success factors of the sample respondents

The data aptly reflects the reality of any business in any market. All the shop owners recognized
the hard work of their predecessors and themselves in bringing up the business to this present
level of achievements and prosperity. They have also not missed the facts of life and the value of
money in bringing positive changes in the business.

90% of the people expressed their unpreparedness to suggest techniques for improvement of
retail cloth business in Hyderabad. Some people have suggested that there must be a good Govt.
agency to over view the pricing structure of the entire retail trade for at least on certain standard
items if not a kind of price control order. They feel that the prices will come down to much lower
level so that the clothing becomes more affordable even to economically very poor class of
people.

101
 CHAPTER – 5
A SUMMARY OF FINDINGS AND SUGGESTIONS

Introduction
Marketing Management is an important functional area of management without which the
operating cycle of a manufacturing concern will be incomplete and without it being active the
whole operating cycle will collapse leading to the closure of the business. It is not sufficient if a
business firm is able to manufacturing the product, it should also be able to sell it. Marketing is
a necessary activity that encompasses the entire business and is vitally important to sound
business health. It is viewing the entire business from the customer's viewpoint takes into
account every aspect of the marketing mix from the product to price, distribution channels and
marketing communications. All these factors affect the customer's response to a product or
service.

"Marketing is the process of planning and executing the conception, pricing, promotion and
distribution of ideas, goods and services to create exchanges that satisfy individual (customer)
and organizational objectives". The concept of marketing as a business philosophy defines
marketing as a process that is intended to find, satisfy and retain customers while business makes
a profit. But central to all these definitions is the role of the customer and his relationship to the
product (i.e. whether he considers the product or service to meet a need or want). That is where
the marketing management comes into the picture. Therefore, Marketing Management is
concerned with the activities involved in bringing the product from the place of manufacturing to
the place of consumption and make the customer delightful.

Need for the of study

The importance of marketing management needs no emphasis. What type of products or services
would be profitable to introduce in the market? How a business is able to decide the 4 or 6 Ps of
its marketing management? How it is able to plan, organize, and control its marketing activities?
How it is able to promote its products? What is the influence of the habits, culture, economic
status, etc., on the sales of its products and how it is tackling them? Whether its has to make any
changes in the product or its packing or price etc.,? How does it carry out its marketing research
activities? And finally, how it is able to sell its product and keep its customers delightful and
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retain them? These questions call for an empirical study. To all these questions a cloth business
in general and the retail cloth business in particular is no exception.

Statement of the Problem

Hyderabad is a cosmopolitan city with a history of 400 plus years and providing living and
livelihood to the people with different religions, cultural backgrounds, customs, traditions,
habits, occupations, economic status, etc., and is one of the major cities of our Country.
Hyderabad is also a representative of the other major cities of country. Any business in
Hyderabad should cater to the needs of all these people to be successful. With this backdrop the
present study is conceived to study The Trends in Retail Cloth Business in Hyderabad. .

Objectives of the Study

The specific objectives of the present study are :
• To study the present status of retail cloth business in Hyderabad.
• To analyze retail cloth business in Hyderabad in respect of
o the recent promotional trends in retail cloth business in Hyderabad.
o the implementation of the sales promotion and advertising in order to increase the
cloth business in Hyderabad.
• To examine the importance of promotional trends on
o Buyers
o Retailers
o Society
• To offer suggestions for the improvement of the retail cloth business in Hyderabad.

Hypothesis
To arrive at the logical conclusions the following hypotheses are formulated and the same would
be tested with the empirical data collected.
4) Different trends used in promoting the cloth business and increasing its contribution to
National Income and GDP.

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 5) Promotional trends in cloth business offers multiple choices in variety of dresses at
competitive prices
6) Recent promotional trends help retail trade to enhance their turnover and thereby
increasing the productivity of the commodity.

Methodology
Survey method of research is adopted. The required data is collected from
• the primary sources, i.e., A structure schedule of questions is administered on the sample
respondents and in some cases personal interviews were also conducted to collect the
data
• the secondary sources, include, related websites, journals, magazines and other published
data.

Sampling
Though actual number of retail cloth outlets in Hyderabad believed to be exceeding 2500, only
1512 retail cloth merchants have registered with the retail cloth association statistics as regular
retail merchants. A sample of 126 retail cloth outlets is drawn on random sampling basis for this
study. The sample retail cloth respondent shops are listed as per different locations of
Hyderabad. elected.

Tools for collecting the data

A structured schedule of questions was used for collection the required data from the sample
respondents. The questions are carefully framed to cover the entire retail business with out
antagonizing the retailer who is running the business. The design of the schedule is by and large
a comprehensive one to get the relevant data required for the study. As the number of questions
is fairly large in number and run into forty, enough care is exercised to adopt a friendly
conversational style in order to put the busy retailer in a comfortable stance to give correct
answers readily.

The above aspect is felt very important since quite a number of questions are inter-dependant and
one answer influences the other answer, proper care is taken to bring correlation between
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different answers given by the in charge of the shop. Adequate importance has been given to the
convenience of the retailer by visiting them during relatively less rush hours of the day.
Tools for analyzing the data
Statistical tools such as averages, percentages, ratios and quotients have been extensively used
for analysis.

Geographical area covered & Limitation of the Study

The scope of study is limited to geographical area of Hyderabad. On the random basis of
sampling 126 responding shops were selected for the purpose of survey.

Limitations of the study

• It is quite likely that some of the persons might have deliberately given wrong answers
and semi correct answers. The limitation of the study is therefore the possibility of the
incorrect answers that may have a bearing on the outcome. However, as stated above, the
limitation was overcome by proper persuasion in soliciting the correct answers.
• In view of the convincing approach with an assurance of confidentiality and clarity of
the purpose i.e. research apart from an assurance that their replies are not legally binding
on them, the answers are taken to be true to a greater extent.

Findings
To arrive at the logical conclusions the hypotheses formulated are tested with the empirical data
collected.

Hypothesis 1:
“Different trends used in promoting the cloth business and increasing its contribution to
National Income and GDP.”

The Indian retail industry is the fifth largest in the world. Comprising of organized and
unorganized sectors, India retail industry is one of the fastest growing industries in India,

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especially over the last few years. Though initially, the retail industry in India was mostly
unorganized, however with the change of tastes and preferences of the consumers, the industry is
getting more popular these days and getting organized as well. With growing market demand, the
industry is expected to grow at a pace of 25-30% annually. The India retail industry is expected
to grow from Rs. 35,000 crore in 2004-05 to Rs. 109,000 crore by the year 2010.

According to the 8th Annual Global Retail Development Index (GRDI) of AT Kearney, India
retail industry is the most promising emerging market for investment. In 2007, the retail trade in
India had a share of 8-10% in the GDP (Gross Domestic Product) of the country. In 2009, it rose
to 12%. It is also expected to reach 22% by 2010.

According to a report by Northbride Capita, the India retail industry is expected to grow to US$
700 billion by 2010. By the same time, the organized sector will be 20% of the total market
share. It can be mentioned here that, the share of organized sector in 2007 was 7.5% of the total
retail market.

The retail industry in India is currently growing at a great pace and is expected to go up to US$
833 billion by the year 2013. It is further expected to reach US$ 1.3 trillion by the year 2018 at a
CAGR of 10%. As the country has got a high growth rates, the consumer spending has also gone
up and is also expected to go up further in the future. In the last four year, the consumer spending
in India climbed up to 75%. As a result, the India retail industry is expected to grow further in
the future days. By the year 2013, the organized sector is also expected to grow at a CAGR of
40%.

Role of Textile Industry in India GDP

Role of Textile Industry in India GDP has been quite beneficial in the economic life of the
country. The worldwide trade of textiles and clothing has boosted up the GDP of India to a great
extent as this sector has brought in a huge amount of revenue in the country.

In the past one year, there has been a massive upsurge in the textile industry of India. The
industry size has expanded from USD 37 billion in 2004-05 to USD 49 billion in 2006-07.
During this era, the local market witnessed a growth of USD 7 billion, that is, from USD 23

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billion to USD 30 billion. The export market increased from USD 14 billion to USD 19 billion in
the same period.

The textile industry is one of the leading sectors in the Indian economy as it contributes nearly
14 percent to the total industrial production. The textile industry in India is claimed to be the
biggest revenue earners in terms of foreign exchange among all other industrial sectors in India.
This industry provides direct employment to around 35 million people, which has made it one of
the most advantageous industrial sectors in the country.

Some of the important benefits offered by the Indian textile industry are as follows:

• India covers 61 percent of the international textile market

• India covers 22 percent of the global market
• India is known to be the third largest manufacturer of cotton across the globe
• India claims to be the second largest manufacturer as well as provider of cotton yarn and
textiles in the world
• India holds around 25 percent share in the cotton yarn industry across the globe
• India contributes to around 12 percent of the world's production of cotton yarn and
textiles

The Role of Textile Industry in India GDP had been undergoing a moderate increase till the year
2004 to 2005. But ever since, 2005-06, Indian textiles industry has been witnessing a robust
growth and reached almost USD 17 billion during the same period from USD 14 billion in 2004-
05. At present, Indian textile industry holds 3.5 to 4 percent share in the total textile production
across the globe and 3 percent share in the export production of clothing. The growth in textile
production is predicted to touch USD 19.62 billion during 2006-07. USA is known to be the
largest purchaser of Indian textiles.

Following are the statistics calculated as per the contribution of the sectors in Textile industry in
India GDP:

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 • India holds 22 percent share in the textile market in Europe and 43 percent share in the
apparel market of the country. USA holds 10 percent and 32.6 percent shares in Indian
textiles and apparel.
• Few other global countries apart from USA and Europe, where India has a marked
presence include UAE, Saudi Arabia, Canada, Bangladesh, China, Turkey and Japan
• Ready made garments accounts for 45 percent share holding in the total textile exports
and 8.2 percent in export production of India
• Export production of carpets has witnessed a major growth of 42.23 percent, which
apparently stands at USD 654.32 million during 2004-05 to USD 930.69 million in the
year 2006-07. India holds 36 percent share in the global textile market as has been
estimated during April-October 2007
• The technical textiles market in India is assumed to touch USD 10.63 billion by 2007-08
from USD 5.09 billion during 2005-06, which is approximately double. It is also assumed
to touch USD 19.76 billion by the year 2014-15
• By 2010, India is expected to double its share in the international technical textile market
• The entire sector of technical textiles is estimated to reach USD 29 billion during 2005-
2010

The Role of Textile Industry in India GDP also includes a hike in the investment flow both in the
domestic market and the export production of textiles. The investment range in the Indian textile
industry has increased from USD 2.94 billion to USD 7.85 billion within three years, from 2004
to 2007. It has been assumed that by the year 2012, the investment ratio in textile industry is
most likely to touch USD 38.14 billion.

Thus said, it can be seen that the data analysed clearly indicate that there is only growth of cloth
retail business. From the graph at 4.7(b) in Chapter 4, it can be seen that there are 64 people
who have started their business by investing less than Rs.10 lakhs. Today out of 64 only 8
people are continuing at the level of less than 10 Lakh investment. Obviously 56 people have
gone in to a higher level of investment. It is observed at every stage people moved from their
starting level to next higher level, indicating their progress in the venture started by them. The
percentage variation is indicative of the progressive value enhancing pyramidal structure as seen

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in the following numbers.

From Rs.10 lakhs to Rs.50 lakhs with 44% increase and from Rs.50 lakhs to Rs.100 lakhs with
25% increase and from Rs.100 lakhs to Rs.500 lakhs with 10% increase and from Rs.500 lakhs
to Rs.1000 lakhs with 9% increase and establishments jumping the Rs.1000 lakhs mark with 6%
increase is indeed phenomenal.

There is no dispute about the consistent increase in the retail cloth business. The investment
increase and profitability also is consistently recorded growth. The percentage contribution of
Retail trade to the GDP as seen from the above discussion is about 22% by the year 2010.
Therefore it can be inferred that the hypotheses true that different trends used in promoting the
cloth business and increasing its contribution to National Income and GDP.

Hypotheses 2 & 3::

“Promotional trends in cloth business offers multiple choices in variety of dresses at
competitive prices”

Hypotheses 3: “Recent promotional trends help retail trade to enhance their turnover and
thereby increasing the productivity of the commodity.”

On going little deep into the data and also during the personal discussion with the retailers it is
revealing that the people whose investment is low, the turnover is also low yet their percentage
of profit is high. It appears these people are doing business with higher profit margins. This
kind of a situation is arriving out of two reasons .one is they are in the out of market area of the
city where in people do not readily consider to buy products from them. Secondly, these people
may be offering a credit facility to the customers for which they are compelled to pay more for
the product. The higher prices may not show an impact on the buying habits as the customer is
not out of pocket immediately. The spread of repayment is the benefit for the extra price paid.
Obviously the number of people who have been taking Least percentage of profit that is 10-15%
are those people whose investment is very high and whose turnover is also very high.

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A look at figure 4.10 (a) and 4.10(b) shows that out of the sample more than 64% units earn a
decent profit percentage of more than 20%.
More than 83% units put to use various promotional tools to achieve the business goals.
Promotional strategy shown in Figure 4.12 clearly indicate that the orientation of promotion is
the customer is 64% as against 28% on product orientation. This again clearly indicate the focus
of the retail cloth business is on the customer and the same is achieved by using various
promotional tools and marketing tools.

whole turnover is classified into five categories. Category 1: Below 25 lakhs, Category 2: 25
Lakhs -50 lakhs, Category 3: 50 lakhs-1 crore, Category 4 :1Crore - 10 crores, Category 5:
Above 10 crores. But here a good pattern is emerging. The turnover is showing a very good
increase indicating more number of times of rotation of the business in a given financial year. It
indicates that the turn over may be hovering above 4-5 times of the investment made by retailers.
From the above data it reveals that nearly 76 % of the total retailers are playing between 25 lakhs
to 10 crores. Figure at 4.8(a) clearly show this phenomenon. From the above analysis it can be
inferred that both the hypotheses stand proved.

Other findings:
• The data collected indicate that majority players are proprietary concerns, meaning
concentration of family business. Apparel sales are driven by economic conditions,
demographic trends, and pricing. Fashion, while important for an individual company,
plays a limited role in overall market demand.

• The retail cloth business is highly competitive, and both have attempted to lower
manufacturing costs. New Look plans to use a direct sales force, retailers, and the
Internet to reach its markets. These channels are most appropriate because of time to
market, reduced capital requirements, and fast access to established distribution channels.

• Apparel companies have been quick to recognize the importance of the youth market and
have started to establish product lines to target this group. Generation Y--those
individuals between four and 21 years of age--is a large demographic group with
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 considerable spending power. This group is also significant in setting styles and trends
that influence the styles for older consumers.

• It was the common opinion of the retailers interviewed that to stay in tune with consumer
needs and trends and to aid in product planning, companies have to establish internal
teams or hire firms to gather feedback from relevant consumer groups.
• In a market where consumers are barraged by advertising and marketing campaigns
delivering an onslaught of lifestyle and fashion messages, a brand name is a powerful
weapon. Brands have become an increasingly significant factor in apparel and footwear.
Many consumers have less time to shop and are spending their disposable income more
carefully. Established brand names, with their quality image, make the shopping
experience easier and faster for many consumers. For manufacturers, brands build
consumer loyalty, which translates into repeat business.
• A word of caution is that a company with an impressive brand name must exercise
caution when entering into licensing agreements. If a new product line doesn't live up to
the quality standards that consumers have come to expect from the brand name, the
brand's image can be tarnished. It remains to be seen how consumers will react to this
onslaught of new brand name product introductions.
• The Retail Textile and Clothing industry need to focus on technology, innovation, quality
and price. Uniqlo story of Japan succeeded with its underlying philosophy of people
before brand.
• Playing in a sector where self expression, fashion, symbolic value and self-expression
are sky high, brands and strong brand identities provide a channel for consumers to
achieve all of the above parameters.
• Unanimous opinion of the retailers is that they recognize the importance of marketing.
And to that end, they plan to promote retail business with an ambitious, targeted
marketing campaign, which will include a grand opening event, local media coverage,
print advertising and a direct-mail campaign.

Target Customer

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Retail cloth industry is a business-to-consumer retail company model. In such a context, clarity
of the target customer is essential. Introduction of peripheral products or other products like gold
and silver etc, is necessary to market the major product line.

Trends

The retail fashion industry is a solid business with ever-changing styles and ever-present
consumer demand. While super-centres and mega stores ruled the past two decades, more and
more consumers are looking for change. They’re searching for a more serene and customer-
friendly shopping experience.

Working out of strategy based on a philosophy and the systematic implementation of the same is
essential.

Identification Of Marketing Strategy

Strong marketing backgrounds and recognition of the significance of effective marketing help
draw consumers into the retail outlets. It is a good idea to hire PR firm to help develop and
implement a strategic marketing plan and guide publicity efforts in a cost-effective manner.
Importance of allocation of marketing budget cannot be undermined. Judicious expenditure on
local print and broadcast media coverage, traditional advertising, signage, a direct mail
marketing campaign and networking would fetch better results even while keeping the budget
low.

Suggestions

conclusion

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