Buying Behaviour

Published on June 2016 | Categories: Documents | Downloads: 52 | Comments: 0 | Views: 534
of 56
Download PDF   Embed   Report

Comments

Content

Minor Project: Critical Analysis of Consumer Brand Preference for Apparel & Accessories

Research & Compiled by: A ansha Choudhary M/FMS/08/03 Bhavi Gandhi M/FMS/08/10 Sunil Ker etta M/FMS/08/31

C:\Users\Bhavi \Des top\minor spss\New Ads\18-adidas_logo.gif C:\Users\Bhavi \Des top\New Folder\ads\gap.jpg C:\Users\Bhavi \Des top\minor spss\New Ads\Levis_logo_svg.png C:\Users\Bhavi \Des top\minor spss\New Ads\Lacoste_Logo.jpg C:\Users\Bhavi \Des top\minor spss\New Ads\Hilfiger_tommy_logo1.jpg C:\Users\Bhavi \Des top\minor spss\New Ads\Lee_logo.gif Batch: 2008 10 Master of Fashion Management DEPARTMENT OF FASHION MANAGEMENT STUDIES NATIONAL INSTITUTE OF FASHION TECHNOLOGY MUMBAI C:\Users\Bhavi \Des top\minor spss\New Ads\Mango-Logo_000.gif C:\Users\Bhavi \Des top\minor spss\New Ads\VanHeusenLogoBLACK.jpg C:\Users\Bhavi \Des top\minor spss\New Ads\Rb _400.gif C:\Users\Bhavi \Des top\minor spss\New Ads\Wrangler_logo_2.jpg C:\Users\Bhavi \Des top\minor spss\New Ads\untitled.bmp C:\Users\Bhavi \Des top\minor spss\New Ads\Grasim%20Logo_4446.jpg

 

     

   

 

   

   

 

 

     

   

 

   

   

 

 

 

 

 

C:\Users\Bhavi \Des top\minor spss\New Ads\peterengland.jpg C:\Users\Bhavi \Des top\minor spss\New Ads\nautica_logo.jpg C:\Users\Bhavi \Des top\minor spss\New Ads\ni e.bmp C:\Users\Bhavi \Des top\minor spss\New Ads\d ny-logo.gif C:\Users\Bhavi \Des top\minor spss\New Ads\450_big.gif ginijony_logo Monte Carlo India C:\Users\Bhavi \Des top\minor spss\New Ads\esprit.jpg Secondary Data Source

Statistics Tool

 

 

           

           

Certificate CERTIFICATE FROM GUIDE REGARDING COMPLETION OF WORK This is to certify that the Project entitled Critical Analysis of Consumer Brand Preference for Apparel & Accessories submitted towards the partial fulfilled of t he Degree in by A ansha Choudhary (M/FMS/08/03) Bhavi Gandhi (M/FMS/08/10) Sunil Ker etta (M/FMS/08/31) is their original wor under my guidance and the results are based on the resear ch done by them. (_________________________) Name of Guide/Designed Date: Place:

 

 

 

 

ACKNOWLEDGEMENT We are grateful to NIFT for providing us an opportunity to do research wor on Cr itical Analysis of Consumer Brand Preference for Apparel & Accessories . We express our whole hearted than s to our guide Mr. Amit Aggarwal for his encouragement and mo ral support in organizing my wor and giving us valuable tips for ma ing it presenta ble. We will be failing in our duty if we do not mention the name of our CC Mr. Sushi l Raturi and Ms. Garima Srivastava for their help in our Minor Project. We are also than ful to Mr. N. Muthu Ganesh for providing us the details of cond ucting the research and SPSS from its inception. We are appreciative of Mr. Bandi who allowed me to get access to the library and for motivated us to finish the study on time. Lastly, we are also obliged to people of Mumbai & Navi Mumbai for providing us t heir valuable feedbac to the questionnaire used to compile our primary data. NAME:_____________________ ADDRESS:__________________ Master of Fashion Management Date of submission:

 

 

 

 

   

Contents Certificate..................................................................... ................................................. 2 ACKNOWLEDGEMENT ................................................................ .............................. 3 Introduction ................................................................... ..................................................... 5 About Brands and Fashion ....................................................... .................................. 6 Literature Review .............................................................. ............................................... 8 Brand .......................................................................... .................................................... 9 Fashion & its relation with brand .............................................. ................................ 12 Mar eting communication applied to fashion products............................. ............... 12 The brand image in the mar eting communication process ......................... ............ 13 The store image in mar eting communication process ............................. ................ 14 Qualitative research ........................................................... ........................................ 15 Statistics Tools ............................................................... ............................................. 16 Objectives ..................................................................... ................................................... 17 Consumer confidence and consumer mar et in India ............................... ........... 19 Consumer Confidence ............................................................ ................................... 19 Consumer Mar ets ............................................................... ..................................... 21 Environment for the apparel and retail sector in India ......................... ................. 22 ATKearney Report ............................................................... ..................................... 22 Ernst & Young Report ........................................................... ................................... 25 Understanding buying pattern of consumers in India ............................. .............. 26 Consumer Preference for apparel brands ......................................... ..................... 28 Primary Data Analysis with help of SPSS ........................................ ...................... 32 Sample Analysis................................................................. ....................................... 33 Shopping Preference Time Period & Format of store .............................. ............. 34 Customer spending & its relation with average frequency of spending ............ ....... 35 Types of Media Influence for Fashion Brands on people .......................... ............... 36 Influence of Celebrity endorsement for fashion brand ........................... .................. 37 Relative Preference of consumer while selecting garment & accessories .......... ...... 38 Impulse Buying Vs. Planned Buying, Indian Brands Vs. International Brands ...... . 39

 

 

 

 

 

Selection of one brand over other .............................................. ............................... 40 Consumer stand on Emergence of Women & Kid s wear brand .......................... .... 41 Conclusion ..................................................................... .............................................. 41 Appendix ....................................................................... .................................................... 42

C:\Users\Bhavi \Des top\minor spss\New Ads\esprit_ad1.jpg C:\Users\Bhavi \Des top\New Folder\ads\1.jpg C:\Users\Bhavi \Des top\New Folder\ads\117.jpg C:\Users\Bhavi \Des top\New Folder\ads\IP_Esha_Deol_and_Saif_ali_Khan_For_Prvogu eEsha_Deol_and_Saif_ali_Khan_Prvogue_(1).jpg C:\Users\Bhavi \Des top\New Folder\ads\raymonds\2006052500140203.jpg C:\Users\Bhavi \Des top\New Folder\ads\rates_armani.jpg C:\Users\Bhavi \Des top\New Folder\ads\2f.jpg C:\Users\Bhavi \Des top\New Folder\ads\Tommy%20Hilfiger%20%20Fall-Winter%202008% 20Ad%20Campaign2.jpg C:\Users\Bhavi \Des top\New Folder\ads\hriti _john-players_004.jpg G:\New Folder\lee_wor .jpg G:\New Folder\gucci_2.jpg C:\Users\Bhavi \Des top\minor spss\New Ads\DonnaKaran.jpg G:\New Folder\1996%20LEVIS%20%7C%20Interactive%20Kios %20(02.%20Splash).jpg C:\Users\Bhavi \Des top\minor spss\New Ads\guess_logo.jpg G:\sssssssss\ashton- utcher-pepe-jeans.jpg G:\sssssssss\21902_3.jpg G:\sssssssss\adidas.jpg Introduction

 

 

 

 

                     

                     

About Brands and Fashion Consumers are evolving entities. Their aspirations & expectations are continuously changing. Today s shoppers are more intelligent, discerning & tuned to their individual preference. They are increasingly fashion and brand conscious and select labels which define who they are or who they want to be. The biggest challenge for all the brands is to create loyal consumer who love them. Shopper s Stop Ltd 1 India represents an economic opportunity on a massive scale, both as a global base and as a domestic mar et. Indian consumer mar ets are changing fast, with rapid growth in disposable incomes, the development of modern urban lifestyles, and the emergence of the ind of trend-conscious consumers that India has not seen in the past. 3 Apparel and fashion industry in India is in its growth stage. Using consumer sal es promotion to differentiate one.s offer has become an order of the day in matured urban mar ets. More and more budget is allocated to these activities in order to the lure the consumers. In such a scenario, it is very essential to study how consumers ma e their choices in Apparel & Fashion category where there are several brands in the consideration set of a consumer. The financial ris being high consumers do switch from one brand to another due to sales promotion offers and personal comfort zone. Hence it would of interest to a mar eter to learn about the consumer preferences with respect to sales promotion offer; what schemes do consumer prefer for what ind of brands, which media do they prefer to now about the brand, product, and related schemes, who prefers the branded apparel and fashion products, the price range of the fashion products. These are the questions which consumer considers while choosing a brand. Similarly even a manager has to consider while introducing a product or brand. Brands build customer loyalty by delivering excellent value no matter the price point-high, low, or medium. Value includes styling, durability, quality fabrics, and consistent fit. To the consumer, a brand name represents familiarity, consistenc y, and confidence in performance. Brand names when lin ed with lifestyle, selfexpression, and aspirations epitomize intangibles that are desirable to the consumer. Consumers consider fashion as part of an overall budgetary spend, so apparel purchases now compete directly with other choices from the technology, entertainment, beauty and general lifestyle categories for the discretionary rup ee.

 

 

 

 

 

 

 

 

 

 

Today.s global apparel environment is tougher than ever for brands. There are many reasons for the emergence of this challenging climate; . . . . . . . . From a proliferation of brands fierce competition from retailers acting as brands smarter consumers the consolidation of department stores mass retailers redefining themselves luxury designers creating for mass the demand for luxury goods the growth of the discount sector fact: those brands that brea through the noise

and communicate their message to the consumer directly and clearly in a way that means something to them. Rising costs of living around the world cause consumers to stretch their incomes more thinly, meaning necessities are being weighed against apparel. Fashion must have value and purpose and truly resonate to the consumer. Strong brands with consistent powerful messages can create loyalty and a sense of worth that transcends the burden of choice. 2 Fashion is direct and individual communication. It also nourishes industries wit h high research requirements due to its present characteristics: . Fast mutation of its specificities . It time to mar et . Obsolescence of the product The understanding of consumer.s desires, behavior, and of purchase process of fashion products is extremely important to design products collections as well a s to placement of these products in mar et. Considering a mar eting approach, a fashion product must satisfy the demand target, so the main idea (message) behind the brand (sender) must reach the consumer (receiver). 4 Notes: 1. Annual report of Shopper.s Stop Ltd is available on www.shoppersstop.com & pa ge 17 2. The global branding report 2007 by Stacy Bac er, chapter 1 Introduction 3. KPMG Consumer Mar ets in India The next big thing Executive summary 4. Paper - Branding of Fashion product : a communication process, a mar eting ap proach, by Graca Guedes, Universidade Do Minho (Portugal), Paula da Costa Soares, Instituto Polit ecnico do Porto ESIEG (Portugal).

 

 

 

 

 

All of this adds up to one star

 

 

 

C:\Users\Bhavi \Des top\minor spss\New Ads\esprit_ad1.jpg C:\Users\Bhavi \Des top\New Folder\ads\1.jpg C:\Users\Bhavi \Des top\New Folder\ads\117.jpg C:\Users\Bhavi \Des top\New Folder\ads\IP_Esha_Deol_and_Saif_ali_Khan_For_Prvogu eEsha_Deol_and_Saif_ali_Khan_Prvogue_(1).jpg C:\Users\Bhavi \Des top\New Folder\ads\raymonds\2006052500140203.jpg C:\Users\Bhavi \Des top\New Folder\ads\rates_armani.jpg C:\Users\Bhavi \Des top\New Folder\ads\2f.jpg C:\Users\Bhavi \Des top\New Folder\ads\Tommy%20Hilfiger%20%20Fall-Winter%202008% 20Ad%20Campaign2.jpg C:\Users\Bhavi \Des top\New Folder\ads\hriti _john-players_004.jpg G:\New Folder\lee_wor .jpg G:\New Folder\gucci_2.jpg C:\Users\Bhavi \Des top\minor spss\New Ads\DonnaKaran.jpg G:\New Folder\1996%20LEVIS%20%7C%20Interactive%20Kios %20(02.%20Splash).jpg C:\Users\Bhavi \Des top\minor spss\New Ads\guess_logo.jpg G:\sssssssss\ashton- utcher-pepe-jeans.jpg G:\sssssssss\21902_3.jpg G:\sssssssss\adidas.jpg Literature Review

 

 

 

 

                     

                     

Building a strong brand requires careful planning and a great deal of long term investment. At the heart of great brand is a great product or service bac ed by creatively designed and executed mar eting Kotler & Keller1

Brand Brand2 according to (American Mar eting Association) is A name, term, sign, symbol, or design, or combination of them, intended to identify the goods and services of one seller or group sellers and to differentiate them from those of competitors.. Branding thus is a means to distinguish one product from another and these differences may be functional, rational, or tangible related to produc t performance of the brand. Brand equity2 is added value endowed to products and services. This value may be reflected in how consumers thin , feel, and act with respect to the brand, as well as the prices, mar et share, profitability that the brand commands for the firm. Brand equity is an important intangible asset that has psychological and financial value to the firm. Customer based brand equity2 can be defined as the differential effect that brand nowledge has on the consumer response to the mar eting of that brand. Positive customer based brand equity is when consumer react more favorably to a product. Brand nowledge2 consists of all the thoughts, feelings, images, experiences, beliefs, and so on that become associated with the brand. In particular, brands must create, strong, favorable, and unique brand associations with customers, for example Ruf & Tuf jeans were introduced as youthful and sturdy brand. Brand Equity model Aa er Model2 Professor David Aa er views brand equity as a set of five categories of brand assets and liabilities to a brand th at add to or subtract from the value provided by a product or service to a firm and /or to that firm.s customers. These categories of brand assets are: 1. Brand loyalty 2. Brand awareness 3. Perceived quality 4. Brand associations 5. Other proprietary assets such as patents, trademar s, and channel relationships. Brand Equity model Brand resonance2 The brand resonance model also views brand building as an ascending, sequential series from bottom to top:

 

 

 

 

 

 

 

 

 

 

 

1. Identity -Ensuring identification of the brand with customers and an associations of the brand in customers' mind with a specific product class or customer need 2. Meaning -firmly establishing the totality of brand meaning in the mind of customers by strategically lin ing a host of tangible and intangible brand associations 3. Response -eliticiting the proper customer responses in terms of brand related judgement and feelings 4. Relationship -converting brand response to create active loyalty relationship between customer and brand. G:\New Folder\brand res.jpg Brand resonance model

Brand Salience relates to how often and easily the brand is evo ed under various purchase or consumption situations. Brand performance relates to how the product or service meets customers. functional needs. Brand imagery deals with the extrinsic properties of the product or service, including the ways in the brand attempts to meet customers. psychological or social needs. Brand judgments focus on customers. own personal opinions and evaluations.

 

 

Brand feelings are customers. emotional responses & reactions with respect to the brand. Brand resonance refers to the nature of the relationship that customers have wit h the brand and the extent to which customers feel that they are insync with the brand.

Fashion begins and ends with the customers

Stephen Frings4

Fashion & its relation with brand As per Graca Guedes5 ,to the three components of fashion style, acceptance and styling, announced by authors li e Frings, Pac ard et al and Wolse, a fourth element has been added. Those three components orient this new element the brand, but they are also determined by it. From this new trend, with social and economic implication, emerge 2 different concepts of fashion products: the fashion global product and the mar et segment fashion product. Mar eting communication applied to fashion products

Mar eting Communication

Direct Mar eting Promotion Public Relation Advertising

Special Events Fashion shows

Sales force The mar et of fashion products is highly competitive mar et whose main characteristics is the similar positioning of a large number of brands and, in t his respect the brand.s image developed by mar eting communications can influence the adoption process of the products. This process, the mar eting stimuli, a side with the intention to influence the purchase decisions must transmit similar messages in all communication support. The harmony of this complex process must consider such aspects as the brand awareness and the brand image, both determined by the characteristics of consumers. perception. Visual merchandising

 

 

 

 

 

 

 

 

   

Store The image is a mental representation of the brand or product attributes and benefit. It is a multi dimensional phenomenon that depends on the perception of those attributes and benefits. In fashion products, both mental representation a nd its perception are built in a continuous way, and developed through the image of fashion transmitted by each seasonal collection and by all activities of mar eti ng communication. The overall effect of fashion product branding depends on the

 

integration of all the components of the mar eting communication plan, including visual merchandizing, with the product design. All these three elements have an impact over the adoption process and a similar final goal: to influence the purchase option of fashion products through the satisfaction of a certain fashio n image demand. The brand image in the mar eting communication process

Brand awareness Idea Brand Identity

Brand Image Brand Personality

Product Characteristic

Benefits

User This system reinforces the need to develop of the brands. image considering the implications over the brand identity and awareness of what confirms the importance of fashion products branding. The brand may benefit from a greater reputation and higher proximity to its buyers if the design of each collection t a es in consideration the following aspects: Attributes . In order to eep or develop the value of the symbolic speech of the products, the brands. image management should be focused in one particular style; . The consumer buys or uses fashion products of different types and styles; . An effective fashion image developed through the seasonal collections, allows the brand to achieve image coherence and to capitalize on it in the

 

 

 

 

mar et by building global brand. The adoption process of fashion products reflects the great influence of the image of fashion that it transmits as well as its inherent identification potent ial (social, cultural and economic), besides its basic functions to protect the body . Recognizing this, consumer searches for fashions that more nearly fit his/her own needs and wants, rather than those of the idealized people who in the past have appeared in advertisements and commercials.

 

The store image in mar eting communication process

Image store

Idea

Visual Merchandising Geographic Location

other Interior design Exterior Design The store image development is established through its geographical location, the commercial zone where it occupies & its external design, as well as by the product that it offers and their representation in the internal space of the sto re. The combination of these factors defines the store atmosphere of loo or the personality of the store, which image of itself should match customers impressions of the store. Space design Display & Fixture Windows Lightening & music Signs Sales assistant Pac age Architecture LAYOUT

 

 

 

Qualitative research It is necessary to assess the strength as well as understand nature of the brand .s equity relative to competitive brands, and to trac it over time. Assessing the strength of brand equity3 according to Richard Elliot & Larry Percy can be done by finding Brand awareness & salience, Brand preference and Brand users. Brand awareness according to Sroll reflects the extent to which people can either remember or recognize a brand. When people thin about brands in a product category, those come to mind represent recall brand awareness; they are recalled based only upon a category cue. If someone is shown a list of brand names or pictures of pac ages, those that can be identified represents recognition brand awareness. Brand salience depends upon awareness, but reflects the relative strength of that awareness in relation to the target mar et.s awareness of other brands in t he category. This relationship will be reflected in the relative relationship betwe en what is nown as top-of-mind. awareness and all the other brands in the category of which someone is aware. Brand preference, li e brand salience, can be an indicator of the strength of brand equity. Brands that are preferred are li ely to enjoy greater equity than those that are not. Preference for a niche brand may be high in its mar et segment, but relatively low in the mar et as a whole. Brand users or category understanding is one of the primary function of quantitative research and specifically users of a brand vs. users of competitive brands. Based upon this, one is able to profile. various user segments.

 

 

 

 

 

 

 

 

 

Statistics Tools

. Tabulation The collected data is arranged in the form of rows and columns that is in the tabulation form. The purpose is to simplify the presentation and to ma e comparisons. . Percentage analysis The collected data which is present in the form of percentage will help us to get the clear cut picture of the contribution of various responses. . Co-relation analysis Co-relation between two attributes have been computed to understand the relation between each other and how one attribute affects the other. SPSS & Microsoft Office Excel 2007 SPSS Statistical Pac age for Social Science is the ey software used to prepare complex graph, to do various analysis li e correlation, regression, ran

correlation etc. which are used in Minor project. Microsoft Office Excel 2007 The primary data collected was input in excel sheet and with the help of various formula it was easy to do data analysis. Simp le bar graph, pie chart, doughnut chart etc are outcome of Microsoft office Excel 2007. Notes 1. Mar eting management Kevin lane Keller & Phillip Kotler, 12th Edition, Chapte r 9 Page No 273 2. Mar eting management Kevin lane Keller & Phillip Kotler, 12th Edition, Chapte r 9 Page No 274 onwards 3. Strategic brand management Richard Elliot & Larry Percy, Indian Edition, Chap ter 6 Auditing and Measuring Brand equity, Page no. 110 4. Fashion From consumer to concept Stephen Frings, 6th Edition chapter2 page no .31 5. Paper - Branding of Fashion product : a communication process, a mar eting ap proach, by Graca Guedes, Universidade Do Minho (Portugal), Paula da Costa Soares, Instituto Polit ecnico do Porto ESIEG (Portugal).

 

 

 

 

 

 

 

 

C:\Users\Bhavi \Des top\minor spss\New Ads\esprit_ad1.jpg C:\Users\Bhavi \Des top\New Folder\ads\1.jpg C:\Users\Bhavi \Des top\New Folder\ads\117.jpg C:\Users\Bhavi \Des top\New Folder\ads\IP_Esha_Deol_and_Saif_ali_Khan_For_Prvogu eEsha_Deol_and_Saif_ali_Khan_Prvogue_(1).jpg C:\Users\Bhavi \Des top\New Folder\ads\raymonds\2006052500140203.jpg C:\Users\Bhavi \Des top\New Folder\ads\rates_armani.jpg C:\Users\Bhavi \Des top\New Folder\ads\2f.jpg C:\Users\Bhavi \Des top\New Folder\ads\Tommy%20Hilfiger%20%20Fall-Winter%202008% 20Ad%20Campaign2.jpg C:\Users\Bhavi \Des top\New Folder\ads\hriti _john-players_004.jpg G:\New Folder\lee_wor .jpg G:\New Folder\gucci_2.jpg C:\Users\Bhavi \Des top\minor spss\New Ads\DonnaKaran.jpg G:\New Folder\1996%20LEVIS%20%7C%20Interactive%20Kios %20(02.%20Splash).jpg C:\Users\Bhavi \Des top\minor spss\New Ads\guess_logo.jpg G:\sssssssss\ashton- utcher-pepe-jeans.jpg G:\sssssssss\21902_3.jpg G:\sssssssss\adidas.jpg Objectives

 

 

 

 

                     

                     

The Indian Economy is soaring. I thin Indian people love brands. There isn t another American designer on this soil, may be because they don t now it, may be because they don t understand it, may be because they don t care. I care about it. I am excited about it and I feel very positive that we are going to build a wonderful lifestyle business here. Tommy Hilfiger, International fashion icon4 The objectives behind our minor project Critical analysis of brand preference for apparel and accessories are:

with respect to brands with the help to

 

1. To study the consumer confidence 2. To study the environment for the 3. To understand the buying pattern 4. To find out consumer preferences secondary data. 5. To find out consumer preferences primary data and SPSS.

and consumer mar et in India. apparel & retail sector in India. of the consumers in India. with respect to brands with the help of

 

 

Consumer confidence and consumer mar et in India

Consumer Confidence - AC Nielsen report1 According to AC Nielsen.s Consumer Confidence, Concerns, Spending and Attitude to recession, the definitive gauge of consumer sentiment around economic and social concerns across 51 countries After months of speculation and uncertainty around the global economy, it appears the penny has finally dropped for the world.s consumers. Consumer confidence worldwide has fallen to its lowest level in several years.

46 percent of global consumers claim they put their spare cash into savings, up 4percent in the last six months. The world.s most avid savers have always hailed from Asia Pacific, where an average of 57 percent of consumers chooses to build their nest eggs. Holidays and vacations continue to be a popular choice, with 34 percent of consumers across the globe planning to spend on a well-earned vacation. One in three (32%) consumers chooses to buy new clothes, up 2 percent from six months ago. (fig on next page)

 

Bullish Denmar , India and Indonesia lead the charge, with four in five (79%) of consumers optimistic about the size of their wallets.

 

Consumer Mar ets KPMG report2 Indian consumer mar ets are changing fast, with rapid growth in disposable incomes, the development of modern urban lifestyles. Indian consumers are becoming increasingly sophisticated and nowledgeable about products; media channels that allow companies to communicate with consumers are growing in diversity and reach. Foreign brands remain very powerful in India, especially in clothing and personal care products, but increasingly brands have to be associated with value. India.s consumer mar ets are unique. India has more people living in poverty than any other country. Its population is less urbanized than almost every other comparable economy. Literacy rates are lower than in most Asian competitors and income is less well distributed across the whole population than in most Asian competitors. The mar et is also highly regional. A patchwor of cultures and languages, federal India also has a highly uneven pattern of wealth. Average state incomes in Punjab, Gujarat and Maharashtra are around five times the level in Bihar, for example. Some urban areas continue to be richer on average, while large rural areas of Bihar, Jhar and, Uttar Pradesh and Orissa are officially destitute. According to recent data from India.s Mar eting Whiteboo by BusinessworldIndia has around 208 million households. Of these only a little ove r six million are affluent. that is, with household income in excess of INR215,000. Another 75 million households are in the category of well off. immediately below the affluent, earning between INR45,000 and INR215,000.

 

 

 

 

 

 

 

 

 

Environment for the apparel and retail sector in India

ATKearney Report According to The 2008 AT Kearney3 Global Retail Development IndexTM - India continues to be among the most attractive countries for global retailers. At 511 billion $ in 2008, its retail mar et is larger than ever and drawing both global and local retailers. Organized retail which still accounts for less than 5% of the mar et, is expecte d to grow at Compound Annual Growth Rate (CAGR) of 40% from 20 Billion $ in 2007 to 107 billion $ by 2013. India.s overall retail sector is expected to rise to 833 Billion $ by 2013 and to 1.3 trillion $ by 2018, at a CAGR of 10%. Consequently, as a democratic country with a high growth rates, India.s retail mar et opportunity is unchallenged. Consumer s spending has risen sharply as the youth population (more than 33% of the country is below the age of 15) has been a significant increase in its disposable income. In the past 4 years alone consumers spending rose an impressive 75%. But challenges have emerged that could potentially slow the pace of growth for new global entrants stifling regulations, soaring real estate costs and fiercely competitive domestic retailer groups. In addition, shopping mall projects are running resource constraints that are delaying completions and destructing many retailer entries strategies. Global retailers, hungry to enter this mar et, continue to frustrate by restrict ive government regulation. Under India.s current laws which the government relaxed somewhat in 2006, single brand retailer can own a 51% majority sta e in joint venture with a local partner. Such relaxed regulation does not extend to multi brand retailer such as Wal-Mart , Tesco and Carrefour, which must operate through franchise or cash & carry wholesale format. Accordingly, Wal-Mart recently joined forces with Indian telecom giant Bharti enterprises. Bharti will own retail shop under the Wal-Mart franchise and Wal Mart will operate logistic, procurement and storage activities . In the past couple of years, numerous retailers including the SPAR group, Carrefour, Mar s & Spencer and Nautica have entered the mar et. Earlier entrants, including Wal-Mart and Metro, have plans for a blitz across the countr y. Tesco and Kroger will feel additional pressure as the situation grows more competitive. Local hypermar et retailers are moving aggressively to get ahead of further loosening of foreign investment regulation. Ta ing their cue from success of hypermar et in china local retailer such as Pantaloon, the Tata group.s Trent, RPG enterprises, K Raheja Corporation and Reliance have all ta en an early

 

 

 

 

 

 

 

 

 

 

 

lead due to ambitious expansion plans. Season business such as Reliance & Aditya Birla are loc ing at the upstream value chain (farms, logistics and stora ge) to better their positions once they begin competing directly with the li es of W alMart. As the retail industry in India matures, companies are pursueing new business models. For example, Reliance restructured and is now pursuing joint venture opportunities with international retailers such as Office Depot, Mar s & Spencer and Neiman Marcus. The industry is also beginning to consolidate with Aditya Birla acquiring Trinethra Superretail, the Wadhawan Group acquiring small regional retailers, and Actis investing in the supermar et chain Nilgiris. The real estate costs are prohibitive and the cost to acquire to train and retai n wor ers has increased as more lucrative wor opportunities emerged. Although the wor force continues grow rapidly (with more women and farmers entering), it cannot eep up with the growth across all the business sectors in India. Still, large retail outlets hold a strong appeal for customers even though they place India.s 4 million to 6 million mom-and-pop shops at ris . This is causing concern over the pace of change and could be another speed bump on the road to India.s 1.2 billion consumers. The Global Retail Apparel Index 2008

Country Absolute mar et size Growth prospects Consumer affluence Score 1 Brazil 45 33 42 48 2 China 74 22

 

Ran

 

 

 

 

 

 

   

   

36 47 3 India 57 37 31 47 4 Tur ey 29 37 59 46 5 Chile 22 47 44 46 6 Romania 21 54 34 45 7 Argentina 21 44

 

39 41 8 Thailand 22 25 57 40 9 Russia 52 22 39 39 10 UAE 31 42 28 38

ATKearney Retail Apparel Index analysis evaluates more than 30 apparel mar ets to identify the top 10 countries in terms of mar et size, growth prospects and consumer affluence. . The retail apparel index is comprised of mar et indicators 55% and growth indicators 45%. . Mar et indicators include total clothing sales and imports, total and youth population & clothing sales per capita.

 

 

 

 

. Growth indicators include total clothing sales, compound annual growth rate (CAGR) in clothing imports and clothing sales per capita, population growth and CAGR of GDP per capita. . Within each metric, a country is assigned points based on its value on the metric against the largest sample. For example, china has the largest total sales at $ 93.5 billion, so its scores 100 points in the metric, Brazil has $ 76 Billion in total clothing sales, so it sco res 81.4 points (76 divided by 93.5 times 100) Apparel is India s second largest retail category (behind food & grocery), representing 10% of retail mar et. Projected to reach $ 37 billion for 2008, apparel will be among the highest growth categories, with a CAGR of between 12 to 15%. In 2008, organized retail will represent roughly 10% of the total mar et. The ra pid growth is supported by the burgeoning Indian middle class. Mean Annual disposable income is growing at more than 6% CAGR, consumer spending is expected to increase 8% per year. Other factors supporting these bris growth rates include . . . . more apparel focused shopping malls continued penetration of credit cards organized apparel retailing in tier 2 and tier 3 cities the popularity of ready-to-wear clothing and western fashion for women.

Still, India s apparel mar et is highly fragmented. The top 7 competitors represent less than 10% of total mar et. Customers tend to be loyal to a specific retailer Shopper s Stop, Westside & Pantaloon instead of any particular apparel brand. This has led to a thriving private label apparel mar e t for ready-to-wear clothes and more competition. However, brands as Benetton, Louis Phillipe, Van Heusen and Esprit are capturing a strong following among Indian consumer. There is a flurry of activity across all price points, with new concepts and bra nds being launched almost every month. Madura Garment joined Peter England People, a mass mar et family store modeled after GAP and Old Navy. Discounter Koutons has opened nearly 1000 stores in the past few years. A ey challenge for apparel retailer in India is to induce customer to purchase quic ly, which means sales promotion tactics are important, including end of season sales, festival promotion and special events. Local firms such as Future Group are having sales of $ 845 million. It has more than 5 million sq feet of retail space in roughly 450 stores across 40 cities. I ts principal formats include pantaloon, a departmental store chain & Big Bazaar, a hypermar et chain. Shopper.s Stop has 5 million sq feet of retail across 88 stor es in 12 cities. The group plan 6 million square feet of retail space by 2011.

 

   

 

 

 

 

 

 

 

Ernst & Young Report According to Ernst & Young retail report4 the organized retail in the year 2002 is of 1075 $ million and is expected to grow with CAGR of 16%. The clothing segment (2005) is positioned for further organized retail penetrati on due to the high level of branding activities by apparel retailers and merchandis ing spread across formats such as department stores, hypermar ets, own retail outlets and franchises.

 

Understanding buying pattern of consumers in India According to Ernst & Young report4 Indian consumers. lifestyle and profile is al so evolving rapidly. India has one of the youngest populations in the world with 54% of the population below the age of 25. Discretionary spending has seen a 16% rise for the urban upper and middle classes and the number of high income households has grown by 20% year on year since 1995-96. There is an increasing shift from price consideration to design and quality, as there is a greater focus on loo ing and feeling good (apparel as well as fitness). At the same time, the new Indian consumer is not beguiled by retailed products which are high on price but commensurately low on value or functionality. There is an easier acceptance of luxury and an increased willingness to experiment with mainstream fashion. This results in an increased tendency towards disposability and casting out -from apparel to cars to mobile phones to consumer durables. The self-employed segment of the population has replaced the employed salaried segment as the mainstream mar et. 40% of primary wage earners in the top 2-3 social classes in towns with a population of 1 million or more are s elf employed professionals and businessmen. This has driven growth in consumption of productivity goods, especially mobile phones and two and fourwheelers. Finally, credit friendliness, drop in interest rates and easy availability of fi nance have changed mindsets. Capital expenditure (jewellery, homes, cars) has shifted to becoming redefined as consumer revenue expenditure, in addition to consumer durables and loan credit purchases. The 4 major organized retail sectors are . . . . Food & Grocery Clothing Consumer Durables Boo s & Music

In 2003-04, private consumption expenditure in India amounted to Rs 1,690,000 crores (USD 375 billion) of which, retail sales constitute about 61% (USD 230 billion).

 

 

 

Food & Grocery (USD154 billion) contributes about 41% of private consumption expenditure and about 77% of total retail sales. However, this segment is largel y controlled by the unorganized small outlet sector -penetration of organized reta il is about 1% in this segment. This is one of the primary reasons for India.s low organized retail penetration rate. The sector is defined by low gross margins, but there is a tremendous growth potential in the organized sector in the form of hypermar ets, supermar ets and hard discount chains. In such a scenario, pricing and networ will be the ey to success. Clothing is the second largest segment in terms of retail sales.

 

 

 

 

Consumer Preference for apparel brands India devotes roughly the same share of their income to apparel as do Chinese and Brazilian. But the countries lower per capita income levels means overall spending on apparels is significantly lower, and the habit of Indian shopper present intriguing challenges for multinationals eyeing the mar et. For starters , nearly 40% of mass-mar et Indian shoppers McKinsey5 surveyed said that their most important shopping occasions revolved around special events such as weddings and annual religious festivals a figure dramatically higher than the one for shoppers in the other emerging mar ets McKinsey studied. Furthermore, to a greater extent than else were shopping is a family activity in India, nearl y 70% of its shopper.s always go to stores with their family, and 74% - more than twice than average of Brazil, China and Russia view shopping as the best way to spent time with family. The preference for family oriented shopping is consistent across age groups, income segments, regions and city sizes. As in many mar ets, in India women are the primary decision ma ers in apparel purchases for the entire family. But India.s men also have an important role indeed, half of McKinsey survey respondent said that their husband had a major influence on which stores they frequented a proportion far higher than Brazil (3%), China (8%) and Russia (18%). What.s more, India is unusual in that the mar et for men.s apparel is larger than women.s mar et, where traditional Indian apparel still dominates. Mass mar et apparel retailer must therefore find formats and merchandising approaches that will attract shopper.s see ing apparel not only for special occasion but also appealing to entire family. According to McKinsey5 survey young Indian aged 18 24 years strongly trust brands from their own country but also believe that foreign brands are of higher quality than local brand. In India, rather than using only income bands to define category of consumers, we use the socioeconomic class code established by the Mar et Research Society of India, high-end or global consumers are those in socioeconomic class (SEC A), mass-mar et consumers are those in SECs B and C, and struggling consumers are represented by SECs D and E. In addition to household income the class code incorporate the levels of education and occupation.

 

 

 

 

 

 

 

 

 

 

 

It is evident from research that in 6 months Indian.s spent 59 (Rs. 4838) which is lowest in BRIC countries, but 38% of Indians buy clothes for special events l i e festivals and weddings. Most of Indians shop with family and friends which is 68% highest among BRIC countries.

 

Young generation (Youngistan) frequently goes for the shopping of apparels which is average of 4.5 trips per six months and average spending is also much higher than the average spending. This is why the apparel brands are targeting the youth in BRIC countries including India. Age groups of 18 24 years and 25 34 years would li e to spend more on apparel if their income increases instead of saving. Most of the youngster belie ve that domestic brands can compete with the foreign brands but they would li e to purchase foreign brands.

 

 

In India 23% people buy clothes for going out with family and friends, 10% for going to wor , 26% for all purpose use, 25% in order to wear at home, and majority of 38% for special occasions. According to Nielsen survey6, Indian.s are in the list of top 10 countries which disagree that designer brands are of significantly higher than standard brands.

 

Primary Data Analysis with help of SPSS Sample Design A sample design is a definite plan for the obtaining a sample from a given population. A majority of patrons in a sample were selectively chosen to ma e the sample represent the universal population as closely as possible. Sample Unit The sample unit consists of people of age group ranging from 18 years to 55 years & above. The sample consists of students, government employees, employees, doctor, engineers, service category, manager, professors and housewives. Sample Size The sample size of the survey is 116 people. A conscious effort is made to cover each and every type of category of people and to cover almost all the region of Mumbai. Male: 65 Students: 34 Female: 51 Salaried: 82 Primary Data Collection The primary data is that which is collected for the first time, and thus happen to be original in character. For this study questionnaire method and interview method has been adopted. Clearly and understandably set of questions had been printed and got filled by 116 people for their valuable response. Limitations: The duration of survey and its geographical extent is one of the limitations. Fo r more authentic and relevant results a larger sample size with a greater geographical reach can be considered at later stage.

 

0 10 20 30 40 50 60 15 -24 25 -34 35 -44 45 -54 55 & more No. of people Age in years Demographic Classification -SampleAge Groups Sample Analysis

7% 38% 31% 16% 8% Shopping Time Period

every month every 3 month every 6 month every year 0 10 20 30 40 50 60 70 EBO MBO Discount Store Street Shop Internet No. of People 15 65 27 7

 

every wee

0 No. of people Retail format preference Shopping Preference Time Period & Format of store

It is evident from the pie chart that 38% of the total population prefers to sho p every month.

Multi Brand outlet leads the preference of retail formats followed by discount stores, exclusive brand outlets, and street shop. In India internet shopping is not so popular, out of 116 samples no one preferred internet shopping for garment and accessories.

< Rs. 10009% Rs. 1000 -200041% Rs. 2000 -300035% > Rs. 300015% Customer Average Spending Customer spending & its relation with average frequency of spending

Average spending of customer

< Rs. 1000 Rs. 1000 2000

Rs 2000-3000 >Rs. 3000 Frequency of shopping

2 2 2 2 Every month 5 19 17 3

 

Every wee

 

41% of the consumer spends between Rs 1000 2000 whenever garments and accessories. SPSS analysis tool (Reports 123 Summaries) enables us to between the average spending of the customer and frequency be concluded that majority of the consumers who spends Rs. shops either every month or every 3 months.

they shop now the relation of shopping. It can 1000 to 2000

Every 3 months 1 18 13 4 Every 6 months 2 6 6 5 Every year 1 2 3 3

0 5 10 15 20 25 30 35 40 Newspaper Magazine Television Hoardings Movies Internet 39 28 23 16 7 3 No. of People Media Media Preferred for Fashion Brands Types of Media Influence for Fashion Brands on people

Out of 116 people, 39 notice the fashion brands in newspaper followed by 28 people in the magazine. From SPSS Population pyramid graph, the most preferred media for the male is Newspaper and Television and for female is Magazine and Newspaper, internet and movies are not much popular media.

Agree9% Somewhat agree28% Indifferent25% Somewhat disagree10% Disagree28% Do Celebrity endorsement influence brand selection? Influence of Celebrity endorsement for fashion brand

The various fashion brands are being promoted by celebrities such as: . Actors: Shahru h Khan (Belmonte), Amitabh Bachann (Reid & Taylor), Saif Ali Khan (Provogue), A shay Kumar (Levis 501), Kangana Ranawat (Levis), Esha Deol (Provogue), Abhishe Bachann (Flying Machine), Hrithi Roshan (John Players) etc.

. Sport stars: Mahendra Singh Dhoni (Siyaram), Yuvraj Singh (Donear), Maria Sharapova (Ni e), Sunil Gavas ar (Dinesh), etc.

. Models & Designer: Milind Soman (Excaliber), Rohit Bal (Linen Club) etc.

. Celebrities in Movies: Louis Phillipe (Don Shahru h Khan), Van Heusen (Ghajini Amir Khan), Spy ar Jeans (Golmaal), Pantaloon (Na tum Jano na hum), Reebo (Shah Ru h Khan Main hoon Na), Polo Sport (Shah Ru h Khan Kuch Kuch Hota Hai) etc.

 

 

 

   

 

 

 

 

 

 

3.99 4.46 4.64 4.09 1.81 1.99 0 0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 Brands Design Quality Price Store Ambience Store Proximity More the score, prefered the most (best is 6) Relative Preference of consumer while selecting garment & accessories

From the chart it is clear that Indian.s give first priority to Quality while se lecting the garment and accessories. Indian.s are not so brand conscious and brand loyal. Design is the second attribute preferred while selecting the garment and accessories. Indian consumers are price conscious as it ran s third among all the attributes.

 

Unli ely in America and Europe people are brand and fashion conscious but here people need value for money , which means the product should be of best quality, latest design and price should be affordable. Brand comes fourth in ran ing according to the survey. Attributes of store such as proximity of store and ambience of store comes last in the priority of Indian consumer. Consumers do shopping on an average for every 3 months, so proximity of store does not play important role. Shopping and mall visit is the most preferred pass time for the Indian consumer. Ambience of store does not matter in consumer buying preference directly but it helps in impulse buying and increasing foot falls.

 

 

Do consumer plan brand, color, type of merchandise etc before buying? Impulse Buying Planned Buying Indian Brands52% International Brands48% Does Indian Fashion Brands have standards that of International Brands? Impulse Buying Vs. Planned Buying, Indian Brands Vs. International Brands

Selection of one brand over other

Consumers who purchase the fashion products from Exclusive brand outlet prefer shopping one brand over another only because of the brand image of the particular brand. In multi brand outlet, majority of male select a particular brand over another d ue to brand image but majority of female purchase a particular brand over another brand due to shopping experience. Overall preference for one brand over another is the shopping experience for a particular brand. Celebrity endorsement is not much considered while choosing one brand over another.

0 20 40 60 80 100 120 Possitive Move Not Possitive Move Emergence of Women & Kids wear in India Consumer stand on Emergence of Women & Kid s wear brand

Conclusion In India the branding in the garments and accessories is in the growth phase. Consumers have started identifying and preferring branded products over unbranded products due to growth in retail sector. Another observation is that Indian consumer is quality and price conscious rather than brand conscious which means there are very few brand loyal customers. Thus proper category management and catchment can improve branding and brand loyalty in India. Notes: 1.Consumer Confidence concerns, Spending and attitude to recession, a global Nie lsen report June 2008. (www.nielsen.com) 2.Conumer Mar ets in India the next big thing? KPMG report September 2005. (www. pmg.com) 3.Emerging opportunities for Global Retailers The 2008 AT Kearney Global Retail Development Index (www.at earney.com) 4.The Great Indian Retail Story Ernst & Young Report 2006 (www.ey.com/india) 5.The Mc insey Quaterly How half the world shops: Apparel in Brazil, China, and India. 2007 (www.mc insey.com)

 

 

 

   

Appendix Name:_________________________________Age: _____ Gender:_________ Email Id:______________________________ Occupation:_________________ 1. Please Tic how often do you shop clothes & accessories?

Once in a month

Once in 3 month

Once in 6 month

Once in a year

2. How much do you spend on an average for shopping for clothes & accessories? < Rs 1000

Rs 1000 - 2000

Rs 2000 - 3000

> Rs 3000

3. Where do you shop apparels often? (Please tic any one) EXCLUSIVE BRAND OUTLET

 

 

Once A wee

 

MULTI BRAND OUTLET

DISCOUNT STORES

STREET SHOP

INTERNET

4. Where do you notice Fashion brands maximum (often)? (Please tic any one) Newspaper

Magazine

Television

Hoardings

Movies

Internet

5. Does a celebrity endorsement influence your brand selection? Agree

Somewhat agree

 

Indifferent

Somewhat disagree

Disagree

Brand

Price

Design

Ambience of Store

Quality

Proximity of Store

7. Do you plan particular brand, color, type of merchandise etc before shopping? yes

no

 

6. Which attribute matters most while selecting apparels? Ran (1 is most preferred and 6 is least preferred)

your preference.

8. Do Indian Fashion Brands have standards (quality, design) that of Internation al Fashion Brands? yes

no

yes

no

10. What will you consider while choosing a particular brand over another brand of similar product quality and price range? Brand image

Celebrity Endorsement

Shopping Experience

 

9. Is the entry and emergence of women and move in India?

ids wear brands in India a positive

Sponsor Documents

Or use your account on DocShare.tips

Hide

Forgot your password?

Or register your new account on DocShare.tips

Hide

Lost your password? Please enter your email address. You will receive a link to create a new password.

Back to log-in

Close