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SEPTEMBER 5, 2016

MARKETING STRATEGY ANALYSIS

MARKETING PROJECT – TERM I


6550 words

Aman Jain Garvit Goenka Neel Verma Nidhi Goyal Salil Shukla Vishal Tyagi
16P066 16P080 16P093 16P094 16P106 16P119
Executive Summary

The purpose is of the project was to summarize the business model of the Company
FabIndia, which has its product line as ethnic wears, home décor products etc. The
ethnic wear line of the company was chosen for analysis. The project helped us gain
in depth knowledge of how the marketing concepts can be used to analyze and
judge the growth as well as working prospects of a company and its product. This
product line was chosen as for this and other products, the company has a unique
business approach in terms of its shareholder model which focuses on inclusive
capitalism by setting up wholly owned subsidiary – supply regional companies
(SRC). This unconventional approach has helped the company generate profit
constantly. Throughout the course of this project, a thorough analysis of the
company was done. The tools used for the analysis were:

 SWOT analysis

 PEST analysis

 Porter’s 5 forces analysis

Through these tools, the study of the marketing strategy and its effectiveness was
done. Through these analysis, we tried to identify the reasons that have led to the
success and the threats that the company faces. After conducting the detailed
analysis, we came up with certain recommendations that the company can adopt so
as to boost the sales further.

A literature review was also done to understand the theoretical concepts related to
marketing research. After studying that a survey was done keeping in mind the
theoretical concepts to gather information about the consumer behavior of FabIndia.
We tried to gauge what motivates the customer to buy from FabIndia. The survey
had questions like percentage of ethnic clothes in the wardrobe, preferred place of
buying, important factors while making the buying decision etc. Through these
questions we tried to map the consumer behaviour and preferences. The data
collected was then represented graphically for better understanding.

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Further an interview with Mr. Venkatraman Narayanswami, Head Franchising at
Fabindia Overseas Pvt. Ltd., was done. We tried to gain first hand insights from him
about his company and how the company has formulated its marketing strategies
thorough the course of time. He has an experience of about 19 years so he was able
to give us a lot of valuable insights. He was asked questions like the differentiating
factor for FabIndia, Pull factor for the company, positioning strategy, sourcing
structure, expansion strategies etc. from these questions we got an understanding of
what strategies the company applies and how has it evolved over time and their
future outlook.

Finally to study the segmenting, targeting and positioning strategies, ALEXA.COM, a


website which surveys the traffic on any given website was referred to for collection
of data. The data collected was analyzed by our group to study the customer traffic
on fabindia.com. Through this source we were able to observe the real time traffic on
the site

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Contents

TOPIC PAGE #
Purpose of the project 4
 Objective 4
 Significance and Justification 5
 Project Outline 6
Introduction 7
Marketing Analysis 8
 SWOT Analysis 8
 PEST Analysis 11
 Porter’s 5 Forces 13
Literature Review and Survey 15
 Marketing Research Process 15
 Methodology Adopted 18
 Data Collection and Analysis 20
Interview with Mr. Venkat – Franchising Head, Fabindia 24
Alexa.com – Brand Positioning Analysis 26
Segmentation | Targeting | Positioning 30
Conclusion 32
References 32

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Purpose of the project

The purpose is to summarize the business model of a particular product. It will help
us gain in depth knowledge of how the marketing concepts can be used to analyse
and judge the growth as well as working prospects of a company and its product. It
will let us explore the various methodologies that can be used to research about the
product. At the end of the project, we aim at developing an insight how a product
uses its opportunities to its advantage and build on its USP and at the same time,
learn to handle its threats.

Objective

 To study the in depth business model of a particular product/brand



 To understand the basic marketing concepts and apply those concepts to
understand the working of the particular brand.

 To understand the growth path and model adopted by the company.

 To do an analysis of the consumer behavior by analyzing the market factor
that influence the buying decision

 To study the factors that influence the success or decline of the product such
as opportunities realized or missed, threat, USP, etc.

 To understand how a product makes its way to become a brand.

 To do a concluding analysis and give suggestions based on our research and
understanding.

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Significance and Justification

Textile Industry in India is one of the most profitable sectors in terms of exports
as India holds a huge comparative advantage in the same along with very cheap
labor participation. Indian handloom sector plays a vital role with a contribution of
up to 14% of the total industrial production index, earns 30% of countries total
export revenue and employs almost 65 lakhs people.

WHY FABINDIA?

It has a unique business approach in terms of its shareholder model which


focuses on inclusive capitalism by setting up wholly owned subsidiary - supply
regional companies (SRC). Also, despite having huge competition from brands
such as pantaloons, biba, global desi, etc FabIndia still stands strong. During
2014-15 the ethnic wear firm posted a 12% rise in consolidated sales at Rs
1148cr with 36% increase in profit before exceptional items at Rs 112cr.

In this cut throat competition in the garment retail which tries to keep itself afloat
by giving unbelievable discounts, FabIndia not just survives but steers through in
full throttle without any such offers. To know about this unique strategy and to get
to understand how it manages its brand without the least of marketing has what
has compelled us to take up this brand as our marketing project.

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Project outline

 After deciding upon the company and the product to be chosen, we plan to
firstly look at the how was the need for the product created.

 Looking at the history, we will track the business model as well as the
evolution of the same.

 Studying the strengths, weaknesses and framework through SWOT and
PEST analysis.

 Do an in depth analysis of how the supply chain mechanism work.

 How the consumer base was developed and what were the factors that the
company used to its advantage.

 Methodology used – Use theoretical as well as practical tools to develop in
depth knowledge about the company and the product.

 Finally, we aim at giving suggestions based on the research done using
various statistical and graphical analysis.

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Introduction

Founded in 1960 by John Bissell, Fabindia started out as a wholesale export house
and has since established itself as the biggest retail company in India. The
company’s philosophy is to showcase India’s enormous wealth in handloom textile
and rural craft.With a pan India presence, Fabindia is the largest private platform for
products that derive from traditional crafts and knowledge. A large proportion of
these are sourced from villages across India where the company works closely with
the artisans, providing various inputs including design, quality control, access to
finance and raw materials.

Fabindia was founded with the strong belief that there was a need for a vehicle for
marketing the vast and diverse craft
1976 Fabindia opens its first store in
Greater Kailash, New Delhi. traditions of India and thereby help fulfil
the need to provide and sustain rural
1980’s Fabindia has become a known employment.
brand for garments made from
hand woven and hand printed
fabrics. Fabindia sources its products from over
15000 craft persons and artisans
2000 The non-textile range is added. across India. It helps artisan by
providing various inputs including
2004 Organic foods, which formed a
design, quality control, access to raw
natural extension of Fabindia’s
commitment to traditional materials and production coordination.
techniques and skills is added.
The major portion of Fabindia’s product
2006 Personal care products added.
range is textile based. The textile-based
product range includes ready-to-wear
2008 Handcrafted jewellery was
introduced. garments and accessories for men,
women, teenagers and children; bed,

bath, table and kitchen linen; floor coverings, upholstery fabric and curtains. Cotton,
silk, wool, grass, linen and jute are the basic fibres used.The vision continues to be
to maximize the handmade element in our products, whether it is hand-woven
textiles, hand block printing, hand embroidery or handcrafting home products.

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Marketing Analysis

1. SWOT ANALYSIS

S W
• Regularised supply • Low production
chain efficiency due to
• Poitive Image of the lobour focussed
brand approach
• Brand MDI not
leveraged to its
potential

O T
• Audience in awe • Huge competition and
with this kind of competitors always
targeting - urban thinking to evolve the
heritage basic idea
• Tremendous growth • Retail sector hugely
potential dependent on real
estate prices

STRENGTH

 Regularized supply chain: The company has setup Supply region companies
that are responsible for the complete supply chain in the region where they
operate

 Elimination of middle men: the presence of supply region companies eliminate
the need of middlemen who are the ones that generally exploit the suppliers
and reduce the margins.

 Fabindia stores are managed by the company itself and they don’t issue
franchise to outside players. The rationale behind this is that they want to
position the brand in the market appropriately and dilution of their brand
image won’t happen as everything is centrally controlled

 Inclusion of artisans into the business by making them shareholders so loyalty
with the company is maintained. The supply region companies act as the
mechanism through which the suppliers can be added as the shareholders in

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the company

Employees are also shareholders of the company (in 2010 which was the 50 th
year of Fabindia, all employees were made shareholders of the company).
 This improves employee satisfaction which in turn helps the company [1]
 Positive image as the products are helping develop rural India. The local
craftsmen and artisans have been provided a regular source of income and
this has helped create a positive image about the company

 Healthy balance sheet means raising of debt easy for Fabindia [2]

 Has acquired UK based ethnic wear retail chain EAST so expansion in UK
market possible. EAST has 77 stores through which the sale of fabindia
products is possible.

WEAKNESS

 The complete manufacturing of products is manual so they cannot achieve


production efficiency and increasing supply volumes would also be difficult

 Growth opportunity limited as they don’t go for franchise in retail. As the
company tries to manage the stores centrally the rate of expansion is slow

 The prices of the commodities sold is very high so if they want to increase
their sales the prices need to be controlled

 Fabindia has not been able to capitalize on the brand image that it is having.
According to a survey, general public was asked about the estimated net
worth of the company. The company was valued in that survey to be 11 times
its actual worth. This proves that it is having a positive brand image in public
but they have not capitalized upto the potential.

OPPORTUNITIES

 Young people have started appreciating the cultural authenticity in the


products they use and since India has more than 65% below the age of 35, so
Fabindia can target this a group.

 Since the economy of India is growing, Fabindia can target tier-2 cities.

 They can increase awareness by advertising and encouraging people to buy
handloom products.

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 In a report by Dasra, India's share in $400 billion global market is just 2%. So,
there is a tremendous scope for growth in the sector.

THREATS

 Many retailers, both domestic and global, have entered the market of ethnic
clothing and hence their price-cutting strategy can force Fabindia to follow suit
and hence can affect their bottom-line

 It will be tough for Fabindia to decide between the interests of artisans and
private equity firms which have invested in it.

 Khadi & Village Industries Commission (KVIC) is a government entity which
can reap the benefits of subsidies

 Real Estate prices leading to slow retail outlet expansion

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2. PEST ANALYSIS
POLITICAL

 As all Fabindia products are manufactured in India by the local artisans it


directly supports Make in India Initiative. It also exports its products to over
33 countries

 Fabindia also manufactures organic food items and personal care products.
Its products meet organic certification standards set by National Program for
Organic Producers (NPOP) which follow the guidelines of International
Federation of Organic Agriculture (IFOAM).

 Currently each state has its own sales tax policies and 5% VAT is levied on
sales of ready-made garments in India

 Now GST will ease procurement of goods and raw material. It will help reduce
the transit inventory by providing a favorable environment for supply chain.
This will be helpful fabindia as it has its suppliers and stores all over India.

 Recently govt. of India has removed restrictions under the Incremental
Exports Incentivisation Scheme. This will improve cash flow of the importers
and promote export of made-ups to Australia and New Zealand[3]
ECONOMIC

 Indian handloom sector plays a vital role with a contribution of up to 14% of


the total industrial production index, earns 30% of country’s total exports
revenue and employs almost 65 lakh people engaged in weaving and allied
activities. Within this sector cotton weavers contribute to almost 90% of the
total production. [4]

 The textile industry is the 2nd largest employment generation sector in India.
The handloom sector has a very special character in which control is spread
not just in the hands of a few but production is dispersed.

 Fabindia has a 1000 employee and 86000 artisans under in SRCs and this all
comes under its Corporate Social Responsibility initiative.

 This sector also focusses on equity participation and so is prescribed both by
the MSME Ministry and the Competition Commission of India.

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 Though Fabindia started off as an export house from 1994 onwards it has
focused primarily on the National Retail outlets and so exchange rates
fluctuation do not play a major role as both production and retail is domestic.
SOCIAL

 India has the world’s best demographic dividend and with the coming back of
ethnic fashion trends Fabindia has a target audience of all not just aged
people but the youth too. This point is further highlighted by the recent lifestyle
trends and the refocus on Indian sanskritization.

 Fabindia as a brand has gained tremendous popularity without any focus on
marketing and advertisements. Brand development through word of mouth
happens only if the product quality is unmatchable and consistent.

 The focus of the company has always been equitable growth and has
been rightly acclaimed as the perfect model for poverty alleviation.

 Social benefits by accommodating artisans as shareholders not only enhances
employee retention but attaches a bond with company and its artisans.

 It runs various CSR (expenditure for 2014 on CSR was Rs 1.51cr) schemes
with major focus areas on

o Promotion of education and vocational skills- Bali, Rajasthan
o Rural development project- Bali, Rajasthan

o Disaster Management- Srinagar, Kashmir [5]
TECHNOLOGICAL

 Fabindia has a very innovative approach to maintain its supplier network. It has
introduced a concept of Supplier Region Companies or SCR’s. this is based on
the idea of ownership within the company. The local artisans are part owners of
SCR’s, through which they indirectly own a part of fabindia. There are currently
16 SCR’s which employ about 86,000 artisans in fabindia’s network [4]

 Fabindia sells its products across various range through an online portal
which offers facility of home delivery and cash on delivery

 Fabindia has also tied up which major e-commerce companies such as
amazon.com, flipkart.com and myntra.com for the sale of its products.

 Company also protects the intellectual property right of the artisans by
implication of geographical indicators

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3. PORTER’S FIVE FORCES ANALYSIS:
Fabindia operates as a
‘sustainable luxury retail store’ Threat of New
Entrants

which is a niche sector in itself


but it is heavily influenced by the
overall Indian wear retail
industry. Porters five forces Supplier
Power
Internal
Competition
Buyer Power

analysis has been done and the


outcomes have been listed
below-
Threat of
Substitution

1. Threat of new entrant: Barriers


to entry are low due to-

 Low investment: This is not a capital intensive business and also the cycle
time for required for manufacturing of the product for setting up a business,
so, the threat from new entrants is high.

 Labor: The labor employed is generally the village craftsmen or local
handicrafts workers so they are cheap and readily available. Once a network
of craftsmen is setup, there is easy availability of labor


2. Buyer Power:
Buyer power is high due to-

 Availability of options: The buyers have many options available. They can
switch to western wear and even in the ethnic wear they have many other
options like Khadi Gram bhandar. BIBA etc.

 Readily available Choices: Generally all companies sell their products through
multi brand retail stores but FabIndia sells through exclusive stores so the
buyers might prefer visiting multi brand stores.


3. Threat of Substitutes:
There is substantial threat from the substitutes as-

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 Large number of substitutes available: buyers have option to choose non-
ethnic wear and there are immense options available. Even if they choose to
buy ethnic wear, many other substitutes are available

 Cheaper substitutes available: The products from FabIndia are priced on the
higher side so the consumers have other cheaper options available.


4. Supplier Power:
In case of Fabindia the supplier power is low as-
 Strong network of producers: FabIndia has developed a big and a loyal
manufacturing base. They have brought business to the craftsmen for years
so they are loyal to the company and hence the company has advantage in
this respect.

 Large demand of craftsmen: FabIndia is in need of expanding its operations
and is looking to rope in more suppliers. Also the suppliers are in high
demand by the other companies so they have an upper hand in bargaining


5. Competition:
Competition is high in retail industry but the niche area in which Fabindia
operates i.e. Indian wear manufactured by local weavers or the sustainable
luxury retail there are substantially less no. of competitors-
 Indian wear made by local weavers: there are a very few companies operating
in this domain. A few examples are khadi gram udyog and good earth.

 Options in non-ethnic wear: There are numerous competitors present. If the
buyer is not fixated on buying ethnic cloths, too many options are available at
similar or lower costs. Companies already operating: Raymond, Peter
England, Zara, Forever 21.

 Competition in ethnic wear: In the ethnic wear as well, the suppliers have
many options available. Companies like Biba, Meena Bazar, Nalli are already
well placed in the market.

So it can be seen from the Porter’s 5 forces analysis that the entry into the textile
retail industry is relatively easier. Also the options

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Literature Review

THE MARKETING RESEARCH PROCESS

To take advantage of all the resources and practices available, good marketers
adopt a formal marketing research process that follows the six steps shown in
the figure. We explain the steps below:

STEP 1: DEFINE THE PROBLEM

Formulating a problem is the first step in the research process. In many ways,
research starts with a problem that management is facing. A management problem
must first be translated into a research problem. Once you approach the problem
from a research angle, you can find a solution.

For example, “sales are not growing” is a management problem. Management


problems focus on an action. Do we advertise more? Do we change our advertising
message? Do we change an under-performing product configuration?

If so, how?

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Research problems, on the other hand, focus on providing the information you need
in order to solve the management problem.

Marketing managers must be careful not to define the problem too broadly or too
narrowly for the marketing researcher.

STEP 2: DEVELOP THE RESEARCH PLAN

To design a research plan, we need to make decisions about the data sources,
research approaches, research instruments, sampling plan, and contact methods.

Data Sources

The researcher can gather secondary data or primary data, or both. Secondary data
are data that were collected for another purpose and already exist somewhere.
Primary data are data freshly gathered for a specific purpose or project.

Research approaches

Marketers collect primary data in five main ways: through observation, focus groups,
surveys, behavioral data, and experiments.

Research instruments

Marketing researchers have a choice of three main research instruments in collecting


primary data: questionnaires, qualitative measures, and technological devices.

Sampling Plan

After choosing the research approach and instruments, the marketing researcher
must design a sampling plan. This calls for three decisions:

 Sampling unit: Whom should we survey?



 Sample size: How many people should we survey?

 Sampling procedure: How should we chose the respondents?

Contact methods

Now the marketing researcher must decide how to contact the subjects by mail, by
telephone, in person, or online.

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STEP 3: COLLECT THE INFORMATION

This is generally the most expensive and error prone phase of marketing research.
Some respondents will be away from home, offline, or otherwise inaccessible; they
must be contacted again or replaced. Others will refuse to cooperate or will give
biased or dishonest answers.

STEP 4: ANALYZE THE INFORMATION

The next to last step in the process is to extract findings by tabulating the data and
developing summary measures. The researchers now compute the averages and
measures of dispersion for the major variables and apply some advance statistical
techniques and decision models in the hope of discovering additional findings. They
may test different hypotheses and theories, applying sensitivity analysis to test
assumptions and the strength of the conclusion.

STEP 5: PRESENT THE FINDINGS

The marketing research process culminates with the research report. This report will
include all of your information, including an accurate description of your research
process, the results, conclusions, and recommended courses of action. The report
should provide all the information the decision maker needs to understand the project.

It should also be written in language that is easy to understand. It’s important to find
a balance between completeness and conciseness. You don’t want to leave any
information out; however, you can’t let the information get so technical that it
overwhelms the reading audience.

STEP 6: MAKE THE DECISION

The marketing managers in the final phase weigh the evidence mentioned in the
research report. If their confidence in the findings is low, they may decide against the
planned course of action. Some organizations use marketing decision support
system to help their marketing managers make better decisions.

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Methodology Adopted

The analysis to be
The impact and focus A consumer behaviour
linked with the
areas to be researched survey to be floated and
changing trends and
have to identified and responses of different
new ideas and products
appropriate consumer demographics to be
to be in sync with these
behaviour pattern to be recorded and later
consumer behaviour
recognised analysed
patterns

• Step I : The impact and focus areas to be researched have to identified


and appropriate consumer behaviour pattern to be recognised

• Step II : A consumer behaviour survey to be floated and responses of different


demographics to be recorded and later analysed

• Step III : The analysis to be linked with the changing trends and new
ideas and products to be in sync with these consumer behaviour patterns

The questions put in the survey were focused on gauging what “FabIndia must
be taking into account while deciding its product”.

 The survey captured the gender of the people who filled the survey so that an
idea can be derived how differently men and women behaved.

 Another question was to determine the type of buyers FabIndia has acquired
with its various categorization in the apparel segment.

 Yet another question was to determine the challenges FabIndia might have to
face for having a specialized outlet for selling its products as these days
people visit multi brand outlets considering their ease while shopping.

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ETHNIC WEAR SURVEY

 Then there were questions to gain insights on what should be the area of
focus for FabIndia so that it sells its products despite having a price on the
higher side. From this an insight can be gained into whether the strategy
adopted by FabIndia of having high price but high quality product is correct.

 Finally as FabIndia is involved in betterment activities for the rural suppliers, a
question was put to judge whether their involvement in such activities actually
influence the customer’s decision to buy their product.

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Data collection and Analysis

Data was collected using google forms. The survey form had 7 multiple choice
questions for analysis of behavior patterns of consumer of Fabindia products. A
total of 134 responses were recorded from men and women of age group 20-30.

The data collected was analyzed through excel and pie charts and bar charts were
made for responses of each question to visualize the data. On basis of the analysis
of data interpretations were made about consumer behavior.

The following has been derived from the data and further these have led to us to
frame certain inferences:

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S

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ANALYSIS APPROACH FOLLOWED

With respect to the data we have acquired, we tried to come up with certain
inferences and how the product and services could be altered to meet the demands
of the customers in a much more effective way.

I. The 1st inference was regarding the priorities customers have while choosing
their apparel and more importantly in the ethnic brand section. Almost 50% of
the people surveyed cited “Quality” as the most determining factor leading to
their purchases. This shows that though price remains a major targeting factor,
people nowadays have started placing quality on an equally high pedestal.
II. Also the connect with native roots also plays a determining factor and thus
this tells us that there is a lot of scope and potential for indigenized
handicrafts and local artisans as the saskritization culture is slowly propping
back again among the youth.

III. The 2nd major inference was regarding the fact how consumers have their
shopping planned out. We had two options :
a. Planned out shopping
b. Impulsive Shopping
Through the survey it was found out that most of the women have a
planned outing for buying ethnic clothes while men have both planned and
impulsive shopping habits. This can also be attributed to women being more
particular about their choices.

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Keeping this in mind, the men section need not be updated very frequently as
the core sells the maximum with defined colours and patterns, while the
women section needs updated designs to keep customers engaged and so
that their footfall frequency keeps pace with the changing demands.

IV. The last inference was related to the social responsibility angle where we
asked people whether their buying preference or the priority brand changes if
the brand is taking up social responsibility and is concerned with the overall
welfare of the society. We were pleased to know that it does play a part and a
good percentage of people did count this as a major factor of why they placed
FabIndia as their 1st choice brand. Thus this soft power status of the brand
has also helped it grow and expand and it should continue to leverage this
aspect in the future also where it is both concerned about the growth of the
company and the overall social benefit or the welfare of the society.

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Interview with Venkatraman Narayanswami

Venkatraman Narayanswami (now referred as Mr. Venkat) is currently Head


Franchising at Fabindia Overseas Pvt. Ltd. He is a dynamic and result driven
professional with 19+ years of experience in Retail, Apparel Exports and Consumer
Durables. He has proven expertise in Retail Strategy, Business Planning, Brand
Expansion, Sales Leadership, Store Launch, Market Reach, Channel Sales and
Distribution, Merchandising and Pricing Architecture, Franchise Management with an
aim to achieve organizational goals. Prior to working with Fabindia, Venkat was
working as the Regional Head – North (Peter England) with Madura Fashion and
Lifestyle (Aditya Birla Group).

Aman – Sir, What do you think is so different about FabIndia or whats the factor that
has been the differentiator in its segmentation and positioning strategy?
Mr. Venkat – FabIndia is a very different brand as it caters to a very niche segment,
(1) because it has a brand legacy as it is a 50 year old company and (2) as its punch
line says “Celebrating India” as it sources and procures fabrics, apparel from the local
GI artisans and more than 70% are handcrafted keeping in mind the quality
standards. Fabindia also showcases the largest platform for Indian handicrafts and
handloom sector, connected with 50,000+ artisans. One platform for all not like the
state specific ones. Also there was been more professionalization in terms of
management change where in new minds have been roped in from different
companies like Madura Garments, Tata, Arvind, Biba, etc. Also they have started
focussing on channel sales and the turnover is expected to touch 1000cr this year
from 400cr in 2012-13. This shows quantitatively how Fabindia is progressing as in
the garment retail sector brands are not growing at more than 10% whereas Fabindia
is growing at 22-23% YOY for last 3 years.

Aman – Do you think the social connect Fabindia develops in the customers has
been a great pull factor for the company?
Mr. Ventak – Fabindia has a social connect with all its customers and it helps people
relate with Indian ethnicity. Fabindia has a lot of loyal customers even without giving

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away any promotional discounts the growth is unbelievable. The trend is such that
people who care about quality and substance do not think about promotions if they
are satisfied with what they have.

Aman – What is the sourcing structure of FabIndia and what are the future
expansion strategies?
Mr. Venkat – Fabindia has close to 10 procurement hubs, all the rural clusters
consolidate at those procurement hubs thereby having a formal structuring of supply
chain and also leading to one cost one price throughout the country. Fabindia has
90% company owned company operated, almost 220 stores out of a total of 250
stores throughout the country. We started franchises 2 years ago mainly for the Tier
II and Tier III cities. We might look at opening up wall spaces in stores like Shoppers
Stop and Lifestyle but as of now we are focussing on smaller cities as the franchise
models like the ones recently opened in Meerut, Haldwani, Ghaziabad, etc. In
smaller markets, franchise brings lots a value because of their better understanding
of the market and the behaviour and we are targeting opening about 200 franchise
stores in the next 5 years.

Section B | Group IX Page 25


Alexa.com – Brand Positioning Analysis

To evaluate the behavior of a Fabindia customer we took help of ALEXA.COM, a


website which surveys the traffic on any given website and the data obtained from it
was analyzed by our group. Given below is the analysis of online traffic data of
fabindia.com

(Source: Alexa.com)

FabIndia is one of the popular apparel brands in India and it is able to generate
40.75% traffic on its site organically i.e. without spending anything on promotions. It
is a well-recognized brand and most people search fabindia for purchasing apparel.
It can also be observed that out of top 15 keyword searches that lead to fabindia
page 9 are related to apparels. Fabindia kurta is iconic in itself.

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Given below is a comparative study of type of sources of traffic from different
websites which play in the same domain as Fabindia. Some of the bellow mentioned
brands also have their offline stores. The graph clearly shows that Fabindia has the
highest organic searches out of all, which is the direct indicator of its popularity
among the masses and its edge over the other brands.

It can also be observed that it has a pretty decent social media presence and is able
to generate 14.03% of traffic through social media platforms.On the map of global
presence it can be observed that Fabindia is not a widely global brand as 90% of the
visitors are Indians but it has a minor presence in US (4.5%), Singapore, UAE and
Canada.

FABINDIA’S COMPARISON WITH OTHER PLAYERS IN SAME DOMAIN

(Source: Alexa.com)

The data given above shows the demographics to which Fabindia caters to. The results
have been obtained by comparing total internet population with the audience of
fabindia.com. Here it can be clearly seen that the brand is equally popular between
males and females. It does not divide its audience on the basis of gender and has been
able to maintain an image of unisex brand. On the basis of education, it can be

Section B | Group IX Page 27


observed that most of the people who buy from Fabindia are well educated. This is
mostly due to its prominent presence in urban areas and metropolises, also most of
the stores of Fabindia are located in posh locations of the city.

DEMOGRAPHICS OF FABINDIA CUSTOMER

(Source: Alexa.com)

The results have been obtained by comparing total internet population with the
audience of fabindia.com. Here it can be clearly seen that the brand is equally
popular between males and females. It does not divide its audience on the basis of
gender and has been able to maintain an image of unisex brand. On the basis of
education, it can be observed that most of the people who buy from Fabindia are well
educated. This is mostly due to its prominent presence in urban areas and
metropolises, also most of the stores of Fabindia are located in posh locations of the
city. Fabindia is famous among youngsters as well as the elderly. Most of the visitors
of Fabindia are 18-34 years of age. There is also a substantial population of 55-64
year olds who visit Fabindia. The company uses all natural fabrics and natural
organic colours which look and feel sober. This makes it the clothing of the
intellectual class of India and the same makes it popular among the older population.

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Fabindia clothes are perfectly priced to cater to middle and upper middle class
sections of India. It can be seen from the data available that most customers of
Fabindia earn between $0 - $60,000 annually. The consumer has a unique brand
image of Fabindia that it is ethnic, natural, simple, not - flashy and connected to the
Indian roots. In one instance when Fabindia tried to offer its customers designer
wear through a store in khan market, New Delhi it failed as even the high class
customers of Fabindia demanded the regular clothing line of the company as that is
what made the brand unique. People walk into a Fabindia store to buy handcrafted,
natural, daily wear clothes.

Section B | Group IX Page 29


Segmentation | Targeting | Positioning

SEGMENTATION
Segmentation means to divide the marketplace into parts, or segments, which are
definable, accessible, actionable, and profitable and have a growth potential. In other
words, a company would find it impossible to target the entire market, because of
time, cost and effort restrictions. It needs to have a 'definable' segment - a mass of
people who can be identified and targeted with reasonable effort, cost and time.

Segmentation allows a seller to closely tailor his product to the needs, desires, uses
and paying ability of customers. It allows sellers to concentrate on their resources,
money, time and effort on a profitable market, which will grow in numbers, usage and
value. [9]
There are various criteria for segmentation such as geography, demography,
behaviour, gender, personality etc. A company may segment the population for
better targeting and positioning of the product and it also helps the firm sell
differentiate the market and chose a target market for its different product lines.

In case of Fabindia the segmentation can be considered as follows:

1. Geography:
The core customers of the company is the urban Indian living in metropolises
almost 90% of the 220 stores of fabindia are based in metros. So company
does not really segment the market on basis of geography it has a clear cut
strategy of catering to the affluent urban population of India

2. Gender:
Some of the company’s products are gender neutral but being into clothing
business there is segmentation based on gender. It has a separate clothing line
for men and women and cater to their specific needs. Women have options of
sarees, skirts and kurtas while Nehru jackets and kurtas are proffered by men.
3. Socio-economic status:
Fabindia devides its customers into middle class and the upper middle class.
While the clothing line is priced such that it caters to both middle and upper
middle class some other products of the brand such as personal care and

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furniture are priced a little higher and would be in reach of mostly the upper
middle class or the affluent. Also the customers of the Fabindia are well
educated i.e. at least graduates. the company lays emphasis of organic
fabrics and simple colors something which is reflected throughout the product
line of Fabindia, whether it is personal care, furniture or organic foods.
Fabindia is often considered the ‘brand for the intellectual’.
TARGETING
Targeting is the actual selection of the segment that the company would want to
serve. The target market is the group of people or organizations whose needs the
product is specifically designed to satisfy and most likely buy the product.

Fabindia targets the well-educated, affluent urban population of India. It targets both
Male and female by proving them differentiated and customised clothing lines. Most
of its clothes are unisex and can be worn by both genders alike. There is separate
clothing line for children. The company seller similar clothes to people 18 and above.
Although Fabindia has introduced new designer clothing line for women which is
priced higher than general clothing line.

POSITIONING
Fabindia has positioned itself as the an Indian ethnic, simple, elegant, organic
material, handmade and natural colour brand. It is same in the sense to other Indian
ethnic wear brands as it sells kurtas and sarees but what differentiates itself from its
competition is that it makes ethnic clothes for daily and casual wear and not for
parties. 70% of Fabindia’s clothes are handmade and it lays special emphasis on
using natural fabrics like cotton and silk. It has positioned the brand in such a way
that it has created a niche for itself in the clothing and retail industry. Its customers
are willing to pay an extra premium on the clothes for their quality and appeal and
the brand is very famous among the affluent urban intellectual Indian and most of the
Fabindia customers are strong loyalists.

Final Positioning Statement

“TARGET AUDIENCE SHOULD BE THE URBAN MIDDLE – HIGHER MIDDLE CLASS WHO VALUE
ORGANIC AND SOCIAL INVOLVEMENT AND ARE WILLING TO PAY A PREMIUM FOR SUCH PRODUCTS”

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Conclusion

Fabindia has a very different growth story compared to any other company not just in
the retail textile sector. Doing this project and studying and researching about the
company and customer preferences we got first-hand experience as a sales and
marketing consultant. Starting from the marketing analysis through SWOT analysis,
Porter’s 5 forces and PEST analysis we moved ahead with Alexa.com analysis and
ended with our own input of how the company is placed and what according to us
should be its segmentation and positioning strategy.

From our analysis we found out that segmentation can be done on the basis of
geography, demography and socio-economic classification. Next we concluded
that the target audience should be the urban middle – higher middle class who
value organic and social involvement and are willing to pay a premium for
such products.

In the end we would like to thank our Professor In-change Dr. Kapil Kanwal Nayan
for giving us this opportunity to learn through live examples and set up a strong base
for future marketing courses.

References

 [1] https://en.wikipedia.org/wiki/Fabindia

 [2] ‘Govt eases garment export incentives’, Business Standard, May 7, 2016

 [3] "How Fabindia's William Bissell is changing the rulebook of business". Economic
Times. Nov 2, 2012.

 [4] http://www.fibre2fashion.com/industry-article/2269/handloom-industry-
in-india?page=1

[5] CSR Report of Fabindia-
http://martjackstorage.azureedge.net/inresources/bd5c1517-8d80-48d7-8e8e-
365433ad124f/Images/userimages/PDF/CSR_Annexure-I.pdf
 [6] https://alexa.com

  [7] Marketing Management, Philip Kotler & Kevin Lane Keller


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