FINAL REPORT
MARKETING In
Submitted to: SIR REHAN SHAUKAT
Submitted by: MUZAMMIL SHAHID F005-BBA-010 IFZAL AHMED
F005-BBA-009
GROUP PROJECT
PRINCIPLES OF MARKETING
EHSAN CHAPPAL STORE
December 27, 2006
ACKNOWLEDGMENT
We thank The God Almighty, who gave us power and ability to accomplish the task assigned to us. We also want to thank Manager Mr. Amir Mehmood of EHSAN CHAPPAL STORE, who gave us valuable information about our project. All The staff provided us every possible help in completing this report. We have learned a lot from them. Shaukat, who We are also grateful to Course Instructor Rehan Shaukat, has taught us so well that Marketing of any company is not a difficult task for us any more. In the end, we want to thank every individual, who helped us during this project.
Group Members MUZAMMIL SHAHID (010) IFZAL AHMED (09)
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CONTENTS SCOPE OF PAPER………………………………………………………….4 MARKETTING ANALYSIS (4 C’s)……………………………………….5 Company Customer Competitor Context MARKETING MIX (4 P’s)……………………………….………………...9 Product Place Price Promotion XS ECS………………………………………………………………….….12 THE ECS CATALOG……………………………………………………..13 SWOT ANALYSIS………………………………………………………..14 Strength Weakness Opportunity Threat PROBLEMS……………………………………………………………….16 PICTURE AND LOGO………………………………………………......17
SCOPE OF THE PAPER Methodology and Areas that have been looked-in for this project
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Apart from other concerns, our main focus was on the marketing activities of the company. The areas which we have analyzed are as follows: •
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First of all, we have done our analysis by doing a research on the 5 C’s of the company; their target customers’ needs and requirements - what kind of customization customers ask for in the company’s products, the company’s capabilities to meet those needs – how effectively and efficiently, competition the company faces in the market – their main competitors, their market shares, the collaborators they have and the context in which they are operating. For this t his purpose, we have conducted many surveys, interviews and discussions as our primary mode of research. A SWOT analysis was then conducted to find out the company’s internal strengths and weaknesses and external opportunities and threats. A profile analysis has also been designed and constructed to have a better picture of the weaknesses and strengths and to identify the problematic areas of the company The possible problems have been identified in the next stage. Then we have analyzed their marketing mix; the 4 P’s of the marketing mix. Since, it is one of those well-established brands which started from scratch, and just in the last 8 years, has reached new heights of success and popularity in the market, our main focus was on the third P; i.e. the Promotion activities. So that we could study and examine what promotion steps they took and why, and what were the results they got, what promotion strategies fail and how did they plan new ones. A primary research has been conducted on how the company plans and organizes its marketing activities; their marketing objectives, the opportunities they avail and the problems they face. For this purpose we engaged in holding face-to-face meetings with the management of the company. A little research through primary research surveys has also be conducted to identify how the company designs its pricing policies, what prices do the customers want and how does its implementation affects the promotion activities of the company.
Mainly, the mode of our research had been Primary; we visited the head office of the company to have meetings with managers to gather information about their strategies. However, for the marketing trend and context analysis we have also used the available (secondary) online resources.
MARKETING ANALYSIS OF THE COMPANY COMPANY INTRODUCTION INTRODUCTION
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A large family-owned chain of ladies footwear and accessories retail outlets. ‘For latest in ladies footwear’ is footwear’ is their slogan. The Company is involved in imports of raw materials, shoes and bags, manufacturing, retailing, retailing, wholesale, and exports. Imports and exports are relatively new vistas and now the management is paying much attention to improve both. For this, new contacts are being made and visits to potential buyers and suppliers are being undertaken systematically. systematically. All the products are sold under the brand name of ECS. This brand, its logo, and the name Ehsan Chappal Store are the property of Ehsan Chappal Store (Pvt.) Ltd. The company is managed by Mr. Ehsan Rab Siddiqui (Chairman) and his three sons, Mr. Imran Siddiqui (Director), Mr. Salman Siddiqui (Director) and Mr. Usman Siddiqui (Director). (Director). Mr. Imran looks after the production and procurement While Mr. Salman is responsible for marketing. Mr. Usman lends his personality to sales. All three directors have a degree in either business management or commerce. With the help of well trained staff the company is run through the principles of delegation and solidarity.
CUSTOMERS (Target Market/Segmentation) Through our surveys, as a mode of primary research, we found that almost 99% of ECS customers are female. An ECS manager told that they segment their customers on the income basis; they choose to open outlets in those areas of any city where they hope to encounter maximum customers from only upper-middle and upper class females. And most of them belong to the upper-middle and upper class families of the city. And due to ECS’s trendy and fashionable products, customers customers are usually of age between 16 to 40 years.
COMPETITORS As such the only competitor against ECS in the market right now is Stylo. Stylo started its operations later than ECS but got immense success in a shorter period of time. It has more outlet branches in the country than ECS. Currently, ECS has 8 branches countrywide whereas Stylo has 15+ branches; almost double than ECS. This has been a major reason for throwing such a hard competition to ECS. The ECS manager told us the estimated current market shares of these two companies, which are as follows:
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A profile analysis was also conducted using a sample set of 50 customers, of these two competing companies, and the results are shown below:
ECS
STYLO
Well-known Brand
8
8
Conveys confidence
7
7
High Quality
7
7
Products’ durability
7
7
Reasonably Priced
6
7
Formal Shoes
7
7
Casual Shoes
7
7
Sandals
7
8
Slippers
7
7
Sports Shoes
6
6
Handbags
7
7
Promotional Offers
6
6
Size availability
8
8
Good range in product lines
7
7
After-sales services
6
6
Uniqueness
6
7
Stylish
7
7
Comfortable
7
7
Colors multiplicity
7
7
Fashion sense
7
7
Seasonal Variety
7
7
6
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Product warranty
5
6
Store Accessibility
7
7
Customer care in stores
7
8
Highlighted are those variables in which ECS is lagging behind Stylo. So it could be clearly seen how closely these two companies are competing with each other in almost every aspect. Whether it comes to different products of the companies or to the different attributes associated with the company or its services, competition is too tight. People perceive both of them as equally good. There is no clear distinction made by them in any area. From this data, two further analyses were undertaken; company and product analysis of these two companies and the results are elaborated graphically for better understanding. understanding.
9 So it could be clearly seen that the attributes of both companies are marked almost same in all aspects by the general public. Both competitors possess an equally well-known brand, their high quality products conveys confidence in customers, both maintain a wellstructured product line with reasonably good after sales services, both have a fashion sense and seasonal variety in their stores and customers are well regarded in stores of both companies.
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9 Same is the case with the attributes that are associated with the products. All products are considered equally good in the eyes of the customers.
CONTEXT The context in which ECS is operating also seems to be supportive, in future as well. There come many religious and traditional festivals and ceremonies throughout the year, also with every change in the season, preferences and tastes of the consumers also changes, and every time they want something new. So these factors keep the company’s sales steady and constant throughout the year. It has also been observed that population statistics act as one of the primary reasons which affects the sales in positive manner; as the population is increasing every year, the number of customers of ECS is also increasing. So, the planning management at ECS also keeps this issue in mind, while predicting future flows. Some population statistics are given below that shows the relation between the growing progress of ECS and the role of population increase in it:
s t n i
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The highlighted figures show the (potential) target customers of ECS, and it is clearly seen that the population is ever-increasing ever-increasing in urban areas, and so is the number of customers of ECS and so is its sales. There are many collaborators available to ECS who are helping the sales of ECS to increase, one way or another. Some of them are given above. But the thing is that many of them are associated with XS ECS; it is a membership card of ECS that brings its holder lots of benefits which is described later in promotional promotional activities.
MARKETING MIX PRODUCT
ECS products include all sort of ladies footwear. Sandals, slippers, heels, thongs, flip-flops, moccasins, dress shoes, bridals and now also kid’s shoes and ladies purses. Most of the shoes are made in their local factory by their own skilled craftsmen. The rest are either
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sourced from Karachi or imported from Thailand. In addition to shoes they now proudly display an extensive range of ladies handbags and shoulder bags. They sell their exclusive designers elements’ , children shoes under footwear under the brand ‘ECS elements’, ‘e-circles’, ladies handbags under the brand ‘ECS the brand ‘e-circles’, effects’ and there are yet more to come soon .
PLACE (DISTRIBUTION (DISTRIBUTION CENTERS/OUTLETS) CENTERS/OUTLETS)
The first outlet was opened in the then newly-constructed Bano Bazaar in Lahore’s famous market Anarkali in 1953. The idea was to give the customers good value for money. Soon it became famous for its wide range of comfortable and durable ladies chappals (sandals and slippers). The success followed slowly but surely. In a few years, the name Ehsan Chappal Store (ECS) became a synonym for fairly-priced comfortable and durable ladies sandals. Not only chappals but every kind of ladies footwear is on its display. For over five decades, it has been a bustling place ever-crowded with the ladies of Lahore trying to find the best match for their feet from a wide range of designs. In 1997 a new branch was opened in Liberty Market, Gulberg to cater the needs of the growing city of Lahore. Liberty Market is now the largest and most posh market in the city. And Ehsan Chappal Store was an instant success there. Afterwards ECS entered the markets of Y-Block Defence, Peco Road Township and the Mall Road Lahore. An extraordinary branch was opened in 2001 in Defense. Defense. It is a four story stand-alone building, building, unrivalled by any other shoe store in the entire country. This store is a milestone in the retailing history of Pakistan. This fact has been acknowledged by both the shoe industry gurus and the national newspapers. And then it turned its focus on to the national market. In 2001, ECS opened its biggest outlet in Rawalpindi, Rawalpindi, and shortly after that, it entered the markets of Islamabad. Its success did not slow down there. It opened its outlets in Faisalabad and Gujranwala in 2003. And the response was same from everywhere; magnificent success. Right now, the management of ECS of ECS is planning to expand the business in many other cities and into the international market as well. The business was incorporated in the year 2000.
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PRICING Amir mehmood, ECS manager told in his interview that ECS being confident of its strategies and its product do not fall into competitive pricing pricing.. No doubt ECS keep on announcing different discount and cuts in prices to attract more customers. But it set price level using cost as bases. Price = cost + margin. Different types of price cuts that are offered to members of ECS are discussed in XS ECS.
PROMOTION (ADVERTISING CAMPAIGNS) ECS has always spent vigorously in such campaigns. They have designed their own transport trucks with very attractive banners of their brand to serve as an advertising agent. In girl’s colleges, they advertise a lot by pasting permanent stickers of their logos and colors on the benches and roofs. Furthermore, they also hold stalls in girl’s colleges of their latest shoe variety to promote their products into the population. On the last page, pictures of Kinnaird College and Home Economics College are given for demonstration. Also they advertise in fashion magazines as well, like FAQ, G&G, etc. They get a good response from many fashion institutes who see this brand in fashion magazines. Over the period of time, they have changed their logo so many times. Just like Pepsi Co., who in 1996 spent USD500 million just to change the color of its logo. This was for education. e ducation. Coke would never reach its stage right now if they were not educating the customer about their product. Pepsi Co., were willing to spent that huge sum just to ensure that their customer was not swept away by Coca-Cola, where the latter was hosting the Olympics Games at the home-town of Coke in Atlanta, Georgia, USA. The mass logo color change by Pepsi is a way of educating the customer that Pepsi is still around and was not out of sight. In the same way ECS also keeps its way to better and improved features in all aspects. They have experimented and maintained a lot of logos and got different results every time; like readability problem, etc. Change of logo also comes with great financial charges to change that logo on every pad, every show, every bag, every outlet, etc. However, now ECS thinks that they have come-up with a stable brand logo this time. On the opening of new outlets, special invitation cards, flyers and offers are sent to thousands of existing customers.
XS ECS (Excellent promotional activity of ECS)
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It is a membership card of ECS which is made free-of-cost to any customer. It has been ranked as the most popular rewards program in the retail industry. XSECS card allows its customers to take advantage of the best in-house deals for ECS at all of its outlets. The benefits of being a card holder continuously keep on coming your way. ECS has and is providing its customers with gift and discount certificates of their affiliate businesses in different cities. These Vouchers can be picked from any of ECS outlets upon the presentation of your XSECS card at the counter. It is the rewarding experience that the company evolved for its customers - as their valued customer; after all, the company has been satisfying its customer’s needs above any known standard for the past fifty years. XSECS rewards program was created as way for ECS to bring extra (excess) value to their very best customers. In their eyes, it’s a way of saying thank you for using the card and shopping at ECS. The XSECS customers get many benefits including; early invitations to sales just for their registered customers, exclusive promotions such as discount vouchers, news and promotions promotions from your favorite shoe and accessory store, big savings on all products and services of our affiliates, valuable gifts, etc. Currently, ECS has around 25,000+ XSECS members in total, who are enjoying its unlimited benefits. It works like this – for instance, if you are a XSECS member, and shop at NIRALA sweets for Rs. 500 and at the same time shop at ECS for shopping of worth Rs. 1000, you get a free gift of worth Rs. 500. Members also get amazing discounts at various places, such as, at dupilex beauty clinic, XSECS members get 15% discount, at New look they get 20% discount, at aroshi embroidered embroidered classics, they they get 10% discount, at jamin jamin java, members get a free tea or an ice-cream or simply a discount on their products. A lady using Mobilink Jazz Ladies First Package also gets 5% discount and a free dust bag on every shop. Furthermore, members also get 10% discount on every shop exceeding Rs. 3000 or if the customers accumulate receipts of worth Rs. 3000. A sample XSECS card is attached at the end. This was much about the functioning of XSCES. Q-Mart in Sargodha and The Shoe Planet in Lahore and Karachi are also in the list of collaborator of ECS. Shoe Planet is the flagship, mega store of Serves, one of Pakistan's leading footwear manufacturing and marketing organizations. organizations. It is a new concept that offers an exciting range of the world's best brands - Nike, CAT, Puma, Clarks, Diesel and many more, under one roof. They have successfully maintained stock of ECS at their displays and the demand for more stock is always recorded increased.
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Some fashion magazines also, like FAQ, they also a lso collaborate with ECS; they offer ECS free advertising in their mass selling fashion magazine, free-of-cost, on the condition if they provide them with pretty shoes and sandals for their super-models. This has also been proved a good way of advertising. The impact of all these collaborators has always been recorded very positive.
THE CHRONICLES – the ECS catalog
ECS plans to launch its own Brand catalog in the coming year. Plans are being worked out. But few hurdles are still in the way that needs to be managed. As ECS is growing day by day and reaching the position where it can entertain its customers the most, it is looking forward to establish its own catalog by the name name of “Chronicles”. “Chronicles”. It will be issued issued on seasonal basis and will include the description description of new bags and shoes formal and informal ones. This includes comparison of product features, advising related products and alternative products and services. Catalog printing is a popular way to market a company’s offerings. An attractive, well-designed catalog can sell products or services for any business. Businesses of all sizes often use catalogs in their marketing plans. Distributing Distributing catalogs is a highly effective way to boost sales. A range of products and services can be effectively and attractively showcased with well-designed, informative catalogs. To reap the maximum benefit, careful planning should go into catalog printing and time should be spent on creating the best possible marketing tool.
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This catalog known as “Chronicles” is 100% for the benefit of users, as it will make the decision making process very easy, enable their customers to choose among their present designs while sitting homes. It will not only only help users to buy easily but also let them know what to choose? What new designs are present in the market? And will give more more decision making making time. On stores, while while shopping some times it becomes quite difficult for people to decide or because of shortage of time or mismatches of timings the decision making process is quite difficult, but ECS as it always put its customers first have solved this problem, although it is a time consuming process and capital will be invested where returns at first will not be high but customers will be entertained at high level. When you weigh the advantages and disadvantages of catalog printing for your particular business, never forget major drawbacks of such catalog. It will help competitors to know about the updates coming from ECS ECS and copying that design design will become become very easy. It will also be very costly to print and distribute them because they are planning to charge nothing for Chronicle. Chronicle. The development of online catalogues and open catalogues with multimedia multimedia capabilities, have opened complete new horizons. In the end, the point is that Chronicles is a very brave step which we will see after few months. And ECS will be the first in this business launching its own catalog. There are some advantages and disadvantages of Chronicle but as ECS say customer convenience first, they surely are proving it.
The SWOT Analysis Now that we have studied the current scenario of the company so far, we are able to draw SWOT analysis on the basis of our primary and secondary research. Primary research methods: extensive surveys, interviews, etc.
STRENGTHS •
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ECS Brand-Image – in the eyes of customers it is top of all brands present in the market. When questioned that what brand comes to your mind when it comes to buy shoes; majority of them replied, ECS. Excellent Range in Product Lines – a well-structured product line and range. Quality
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•
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•
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PRINCIPLES OF MARKETING
EHSAN CHAPPAL STORE
Promotional Offers - XS ECS – this is playing a vital role in their business these days. As there is no membership fee and everyone is invited to join this circle, more and more members are joining this, affecting sales of the company in quite a positive manner. Large number of Collaborators – there is a considerable big number of collaborators who are motivating the sales of ECS by one way or another. Effective Advertising Campaigns – campaigns in girl’s colleges have always brought fruitful results for the company. Competitive Pricing Motivated Workforce – staff is highly motivated. They are regularly appraised and are rewarded often on their performance. They work on commission base system.
WEAKNESSES •
•
•
No clearly defined marketing strategy – though they are working successfully in the market but still there is no clearly defined or preplanned marketing strategy for ECS. Lesser number of Outlets – as compared to its main competitor Stylo, they are operating through lesser number of outlets. Lack of managerial staff.
OPPORTUNITIES • •
•
•
New developing Local societies & Cities Internationally-held Internationally-held Fashion Shows – ECS has participated in few internationally-held fashion shows and have gained honor in them. The company got many orders from these shows. Launch of the Chronicles – this shoe-catalog would be a totally different idea in the country’s market in this business. Therefore after thoughtful planning, launch of it could bring fruits for the company. Economic Environment Environment – steady and encouraging rate of inflation in the country, population growth trend in urban areas and increase in per capita income; brings more and more customers customers in the ECS’s segment, segment, this of course is is good for the company.
THREATS •
•
Emergence of Cheap China Products – this could be a threat to ECS, since China is well-known for its similar but low priced products worldwide. Therefore if it enters the market, customers of ECS could switch towards it. Stylo’s innovative marketing marketing and promotional activities.
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PROBLEMS From all this marketing and SWOT analysis, we come to identify following problem: Due to similarity of products, ECS is on the exactly same level in different attributes of the products and company, as compared to its competitors. This means that customers won’t get any attraction or incentive to move towards ECS if Stylo is offering the same products on the same level of attributes. Amir Mehmood, manager at head office told us that lack of professional managerial managerial staff is also a major problem this is why release of “Chronicle” “Chronicle” is being delayed. •
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SUGGESTIONS Since the problem is in the first ‘P’; product, therefore we will only manipulate it. The solution to the above stated problem is that ECS should introduce differentiated products in the market, products that customer really find them different and unique from that of the competitors. For this reason currently ECS is working to add new product lines. They are also a lso now recruiting more managers to improve there marketing activities.
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Stalls held at Girls College.
Changes in LOGO of ECS.
XS ECS Card sample.
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