Traditional Footwear

Introduction to the product

As per the traditional and modern demands of the people, footwear is made in various designs.
The traditional footwear, e.g. chappal and shoes is made according to the market trend and
requirements of the customers. This type of chappal and shoes which serves multi-purpose
needs.

This chappal and shoes is prepared with leather/velvet upper. Embroidery work is done on the
upper which is stitched on to the leather sole. This is without lace so it is easy to wear and
remove. It is famous among the people of Rajasthan and is known as “Jodhpuri chappals”.
Similarly other regions have their special designs. According to the liking and demands of
customers, various colors and designs of these chappals and shoes are made. Wearing these
chappals and shoes has become fashion, including special occasions like marriages and festivals.

Our mantra is “INNOVATION AND CUSTOMER SATISFACTION LEAD TO

SUCCESS”.

A product is not only a product it is a bundle of qualities and services, our shoes will be
environmental friendly as we will use those materials which will bio degrade self.
We are also trying to target health as it is always said that “health is wealth” so in our shoe pads
there will have acupressure points and magnetic points so that customer will not suffer from
blood pressure problems. So we will add this quality in our product.
For school boys/girls we will provide points for height growth, we also notice that some people
suffer from over foot sweating these pads will try to stop the sweating from the leg because of
which the shoe will become more comfortable for the user for day long.

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 All about the chappal & shoe
Sole

The bottom of a chappals and shoe is named the sole.

Insole

The insole is the interior bottom of a shoe, which sits directly beneath the foot. Many shoes have
removable and replaceable insoles, and extra insoles are often added for comfort or health
reasons.

Outsole

The outsole is the layer in direct contact with the ground. The material of the outsole depends on
the function, dressiness, and quality of the chappals and shoe, but is generally very durable
material, since it experiences the most stress.

Heel

The bottom rear part of a shoe is the heel. These come in a variety of sizes and are usually made
to support the large stresses applied to the heel of the foot. They are often made of the same
material as the sole of the shoe. This part can be high to make the person look taller, or flat.

Vamp, or upper

Any shoe has an upper part that helps hold the shoe onto the foot. In the simplest cases, such as
sandals , this may be nothing more than a few straps for holding the sole in place.

Market Potential
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At present, there is heavy demand for this item in the market. This item is also convenient for
agro-work. The villagers, therefore, like to wear them. As it is also a fancy wear, embroidery
work is done to make it more attractive and appealing. There is a lot of demand for this item in
Haryana, Punjab, Uttar Pradesh, Madhya Pradesh, etc. other than its home state Rajasthan. In
order to exploit the said market potential, some units can also be started in States like Kerala,
Gujarat.

Competition analysis

Comparison with competitors

BATA

: High quality, comfortable and stylish shoes.

: Available in Europe and leading stores of Asia & the middle east.

: Range for men, women and kids.

: Using modern technology.

: Diversity with ranges in running, training, court, basketball, football and Outdoor

ACTION

: Experience in footwear industry.

: It is synonymous with quality shoes.

: Range for whole family i.e. men, women and kids.

: Diversity with ranges from casuals to formals; from daily wear to sports wear and from an
elegant collection for ladies to a fun range for kids.

: The latest technology go into the making of Action footwear.

: Available in Delhi, Haryana, Himachal Pradesh and Daman etc.

: Action group endorses the principles of social responsibility

LAKHANI
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: The Lakhani Group – one of the largest footwear manufacturers in India.

: Lakhani Vardaan is a market leader today, in beach & casual/sports footwear in India.

: Uses latest technology.

: Available for men, women and kids.
: Known for good quality.

LIBERTY
: Their main foray is in men’s shoes and children’s school shoe.
: The company has created a range of 10 brands to exclusively cater to specific target groups.
: 3 exclusive men brands, 2 exclusive women brands, 1 exclusive brand for children, 3 unisex
brands of which 2 are sports shoes brands and one is a safety shoe brand for industrial workers.
: The company has also expanded their product range to cater to the entire family (men, women
and kids).
: Company is known for its quality and soothe.

REEBOK
: Reebok is known as one of the leading innovators of athletic shoe.

: Known for its design and superior technology.

: Popular for aerobic, fitness and tennis styles.

: Mostly preferred styles are Reebok Classics and the cutting edge style of Rbk.

NIKE
: Nike produces a wide range of sports equipment.

: Started with Track running shoes and basketball shoes.

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: Also available in Wide range of sports shoes including track & field, football, baseball, tennis,
soccer, lacrosse, cricket, and golf

: Nike is positioned as a premium-brand, selling well-designed and expensive products.

: Available in wide range for men, women and children.

Marketing Mix
PRODUCT

FEATURES
 Acupressure in built in the pad
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  Magnetic pads- to control the blood pressure
 Different color schemes & designs
 Range for male, female, children (above 15 years)
 Light weight

BRAND
 FREG

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 (Embroidery chappal)

(valvet shoe)

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 SERVICES PROVIDED TO THE CUSTOMERS

Warranty period:-

The Showrooms also offer warranty for the footwear ranging from 6 months to almost 1
½ years depending upon the shoes price.

After sales services:-

Freg Footwear also provides their customers with a satisfactory after sales services.
They give complementary gifts to the customers on a specified purchase made by them. It
includes shoe polish, shoe shiner, belts and other accessories too.

Special discount offer:-

Freg Footwear generally provides special discount offers to the customers which mostly
includes 12% discount on the purchase made. They also give discounts on special
occasions such as ganpati, diwali, dusshera.

Shoe mela:-

Ethnic Footwear also conducts shoe mela at various cities where they sell there shoes at
discounted rate. They have conducted shoe mela at Hyderabad, Chennai, Bangalore and
many more.

PRICE
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Price of Freg shoes is totally based on the relative prices of the other available brands in the
market.

 Lakhani
 Action
 Liberty
 Bata
 M&B
 Nike
 Reebok
 Addidas
 Red tape
 Lomani
 Wood land
 Puma
 Austin, etc.

Out pricing polices will be based on value based pricing and competitive based pricing, we
wont be using price skimming technique as it is only for the technical products.

PLACE

WHERE WE ARE LOCATED

The plant can be located at suitable place keeping in view the marketing convenience,
availability of raw materials, ingredients, power, water and skilled manpower. We located in
Surat near sachin industries area zone.

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 PLANT LAYOUT

Finished Goods
Supervisor
Quarter

E
Plant office
N

T
Machine 1 Machine 2 Machine 3
R

Material handling
Equipments Raw-material stock

MARKET COVERAGE

 Targeting 70%of total customers

 Mainly outlets in urban and sub urban areas

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LOCATIONS ( for distribution)- trying to cover major urban and sub urban areas of:-

• Delhi
• U.P
• Maharastra
• Bihar
• West Bengal
• Andhra Pradesh
• Tamil nadu
• Madhya Pradesh
• Rajasthan
• Karnataka
• Gujarat
• Orrisa
• Kerala
• Punjab
• Harana
• Chhattisgarh
• Uttaranchal
• Goa
• Arunachal Pradesh
• Mizoram
• Pondicherry
• Chandigarh

PROMOTION

ADVERTISING

• Posters and Hoardings

• Printed –( Newspapers, magazines )
• Radios(All FM radio channels.)

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 Pre launch and launch day:

We will show half advertisement 2 months before through different mediums of promotion.

In order to create curiosity in buyers. On big retails outlets Big bazaar, Iscon Mall, etc. We will
put sample shoes for sale so that feedback can be taken properly of the buyers and subsequent
changes can be bringing about it.

Our adds will be very simple sober showing standard life with showing all qualities. To sell a
product it is necessary to create a big brand image. Secondly our competitors are multinationals
with lots of money, brand image and quality so it is necessary to hit the market on right time and
right place. We wont be launching our shoes near to off season or seasonal sales time as this time
prices of our competitors.

On the day of launch we will hire trucks and busses and show stage shows in mall roads where
there is a big public gathering.

For shows we will target in big cities so that our target customers that are middle upper middle
and high class persons.

PACKAGING
 Black box in the shape of shoe made up of hard board
 Logo is printed on the top leaf of the box with red color
 Using paper and jute bags for final distribution
 No usage of poly bags either inside for packing and for disposing off to the customers

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 PEOPLE
 segmentation / target marketing

SEGMENTATION PROCEDURE
“SEGMENT” – A market segment consists of a group of customers who share a similar set
wants.

The marketer does not create the segments; the marketer’s task is to identify the segments and
decide which one to target. We at Freg shoes believe that we can create a more fine-tuned
product or service offering and price it appropriately for the target segment.

Basis of segmentation

SEGMENTATION FOR FREG

1) GEOGRAPHIC SEGMENTATION: Calls for dividing the market into different

geographical units, such as states, regions, cities or neighborhoods. We will be operating
basically in the Urban and Suburban areas and tend to slowly and steadily expand
business.

2) DEMOGRAPHIC SEGMENTATION: In this the market is divided into groups on the

basis of variables such as age, family size, family life cycle, gender, income , occupation,
religion, generation, nationality and social class. We are basically catering to children
above 15years of age and adults.

3) PSYCHOGRAPHIC SEGMENTATION: In psychographic segmentation, buyers are

divided on the basis of lifestyle or personality or values. People within the same
demographic group can exhibit very different psychographic profiles.

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 Basis and Presumption
1) The unit will work for 300 days per annum on a single shift basis.

2) The unit can achieve its full capacity utilization during the 2nd year of operation.

3) The wages for skilled workers are taken as per prevailing rates.

4) Interest rate for total capital investment is calculated @ 12% per annum.

5) The unit would use a rented building.

6) Costs of machinery are based on average prices of machinery manufacturers.

Implementation schedule
Project implementation will take a period of 6 months. Break-up of the activities and relative
time for each activity is shown below:

Scheme preparation and approval 01 month

SSI provisional registration 1-2 months
Sanction of financial supports etc 2-5 months
Installation of machinery and power connection 3-4 months
Trial run and production 01 month

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 Technical Aspects

Salient Features of Process / Technology

First of all the pattern is cut according to the size for preparing such footwear. According to the
pattern, foam velvet is cut and design is made and embroidery work is done. After embroidery
work goat leather is stitched at lower side and cut. After preparing the upper sole is cut according
to the pattern. After cutting the sole and upper these are placed at inner portion of sole and hand
stitching is done by thread. A small piece of leather is stitched on the back portion of the chappal
stitching the upper chappal putting chappal last. After finishing it is inspected and packed.

Quality Specification: At present there are no quality specifications for such traditional
footwear. But for exports, specifications are provided by the buyers. The raw materials should
have good quality of uppers and soft sole. Care should be taken to click the right components
from the right portion of the leather. Before taking different components to the closing section,
inspection is to be done to ensure quality. Good quality thread is to be used to ensure proper
stitches between different components.

Production Capacity
Quantity 22,500 pairs
Installed capacity 32,000 pairs
Optimum capacity utilization 70%
Working days 300
Manpower 18

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 Financial Aspects
Fixed Capital

(a) Land & Building Amount (Rs. lakh)

Particulars Amount
Land 100 sq.m, on rent
Built up area 80 m 2
Total cost of land and building Nil

(b)Machinery and Equipment Amount (Rs. lakh)

Description Amount
Flat Bed Sewing Machine with Motor, Stand & Table Clutch Type- 3.80
2; Combined Finishing Machine-1, Stapling Machine-1, Plastic for
Chappal-100 pairs, Tools, equipment,
Erection & electrification of machinery & equipment @10% cost 0.38
Office furniture & fixtures 0.32
Total 4.50

© Pre-operative Expenses Amount (Rs. lakh)

Consultancy fee, project report, 0.50

training, deposits with
electricity department etc

Total Fixed Capital Amount (Rs. lakh) Rs. a b c

5.00 lakh

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 Recurring Expenses Per Annum

Personnel Amount (Rs. lakh)

Designation No. Salary Amount

Per
month
Footwear Production Manager 1 20,000 02.40
Designer 2 15,000 03.60
Supervisor 1 10,000 01.20
Accounts/Office Assistant 2 08,000 01.92
Storekeeper 1 07,000 00.84
Technician 1 06,000 00.72
Skilled workers 5 05,000 03.00
Semi skilled workers 5 04,000 02.40
Unskilled workers 3 03,000 01.08

Partner salary 3 15,600 05.62

Perquisites @15 % 04.02

Total 24 26.80

Raw Material including packaging materials Amount (Rs. lakh)

Particulars Qty (t) Rate/t (Rs.) Amount

Velvet 1620 m 160/m 02.60
Goat leather 111600 dcm 9/dcm 10.04
Sole 5.4 t 2,00,000/t 10.80
Canvas 1.08 km 1,00,000/km 01.08
Embroidery 22,500 pairs 9.50/pair 02.14
Grindery items 22,500 pairs 8.00/pair 01.80
Total 28.46

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Utilities Amount (Rs. lakh)

Particulars Amount
Power 00.92
Water 00.08
Total 01.00

Other Contingent Expenses Amount (Rs. lakh)

Particulars Amount
Repairs and maintenance @10% 00.45
Consumables & spares, others 00.42
Transport & travel 00.48
Publicity, postage, telephone 01.40
Insurance @1% 00.05
Rent @ Rs.20.000/ P.M. 02.40
Total 05.20

Total Recurring Expenditure Amount (Rs. lakh) Rs. 61.46 lakh

Working Capital Amount (Rs. lakh)

Recurring expenses for 3 months 15.00

Total Capital Investment Amount (Rs. lakh)

Fixed capital 05.00

Working capital 15.00
Total 20.00

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 Financial Analysis
Cost of Production (per annum) Amount (Rs. lakh)

Recurring expenses 61.46

Depreciation on building @ 5% -
Depreciation on machinery @10% 00.40
Depreciation on furniture @ 15% 00.05
Interest on Capital Investment @ 12% 02.40
Total 64.42

Sale Proceeds (Turnover) per year Amount (Rs. lakh)

Item Qty Rate/pair Amount

(Rs.)
Chappals &shoe 22,500 pairs 330 74.25

Net Profit per year

= Sales - Cost of production

= 74.25 – 64.42
= Rs. 9.83 lakh

Net Profit Ratio

Net profit x 100

= --------------------
Sales
9.83 X 100
= ----------------
74.25
= 13.24 %

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Rate of Return on Investment

Net profit x 100

= --------------------
Capital Investment
9.83 X 100
= ----------------
20
= 49.15%

Annual Fixed Cost Amount (Rs. lakh)

All depreciations 00.45

Interest 02.40
40% of salary, wages, utility, contingency 12.72
Insurance 00.05
Total 15.62

Break even Point

Annual Fixed Cost x100

= ----------------------------
Annual Fixed Cost + Profit
15.62 X 100
= ----------------
15.62+9.83

1562
= -------------
25.45

= 62.37 %

SWOT Analysis

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STRENGTHS:-

 The strength of the company’s production with in its captive facilities

allows Freg Footwear to produce aesthetically designed, sturdy and
durable shoes.
 As they are more into traditional shoes so youngsters are more attracted.

WEAKNESSES:-

 Freg Footwear is certainly not for people who desire to keep on changing
their footwear frequently having been fed up with the same design.
 We can only focus on traditional footwear not any other.
 The price offered by Freg Footwear shoes is quite expensive.

OPPORTUNITIES:-

 We can expand our market more by covering and focusing on developing

areas such as Navi Mumbai, surat, Ahmadabad.
 We can also have a great scope to expand their market in other verity
footwear.
 We can also target higher middle class people by launching new range of
shoes between Rs. 750 to Rs. 1000.
 We mainly deal in leather shoes , velvet shoes & chapels so, we can also
enter into manufacturing of all seasons shoes especially water proof shoes.
 We should increase the number of production units to earn more profits.

THREATS:-

 Freg Footwear shoes face a big threat from organized as well as

unorganized sector.
 In organized sector following are the brands:-
• Metro
• Bata
• Red tape
• Liberty
• Lee cooper.
 In unorganized sector following are the brands:-
• Trekking
• Nicholas

Addresses of Machinery & Equipment Suppliers

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1. M/s. Leather & Packing Machinery Corporation,
1/23B, Asaf Ali Road,
New Delhi 110 02

2. M/s. Harman Sales Union,

24, Kala Bhavan, Mathew Road,
Mumbai 400 004

3. M/s. Srinivasan,
No. 32, Bishop Garden,
Chennai 600 028

4. M/s. NSIC Technical Services Centre,

Sector B.24, Guindy Indl. Estate, Eakkatuthangal Post,
Chennai 600 097

5. M/s. Solar,
Atur House, Worli Nagar,
Mumbai 400 018

6. M/s. Raj Machine Home,

35/118-D, Lashkarpur, Near Kamla Nagar,
Agra 282 005

7. M/s Twin Star Engineering,

No.2, Thiruneer Malai Road, Pammal,
Chennai – 600075

8. M/s. Sanghvi Shoe Accessories Pvt. Ltd.,

3, Hari Kripa, 10th Road,Chembur,
Mumbai 400 071

9. Apparel & Leather Technics Pvt Ltd,

515, Avanashi Road, Tirpur – 641602

10. M/s. Valliappa Leather Corporation,

3/5&6, Narayana Chetty Street, Periamet, Chennai 600 003

11. M/s. T. Abdul Wahid & Co., 26,

Veppery High Road,
Chennai 600 003

12. M/s. Synthokem Industries,

5, Hindi Parachar Sabha Street,
Chennai 600 017

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13. M/s. Bharani Agencies,
126, Thanmbuchetty Street,
Chennai 600 001

Addresses of Raw materials Suppliers

1. Pushpa Enterprises
Products manufacturing, base oil products exporting, finished leather, goat leather

Address: 2/180, Mogappair East, Anna Nagar, Chennai - 600037, Tamil Nadu, India

Phone: 91-44-26567539
Fax: 91-44-26567539

2. Sheep leather, cow leather, goat leather, leather jackets, leather...

Products manufacturing and exporting, sheep leather, cow leather, goat leather, Opp. Janta Ice
Cream, Chouta Pool, Surat - 395001, Gujarat, India ...
www.tradeindia.com/Seller/.../Children-Clothing30.

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