Marketing challenges faced by FabIndia: Location – The market can handle large volumes of standardized homogenous textile products but the production base is scattered, and the product less standardized. The firm has to achieve the variety and volume of products needed in the marketplace without compromising on the unique production process followed by each artisan. FabIndia tackles this challenge by sharing a color palette with the artisans to retain variety and some amount of standardization. Survival in a westernized marketplace – The apparel market is highly influenced by western apparel . Also, generally local shops and tailors are preferred when it comes to buying traditional clothes. Fabindia has however created a unique space for itself by competing in a niche market by creating brand value.
Marketing strategy used by Fabindia: Building brand value and Positioning – FabIndia’s brand identity is strongly linked with the designs and origin of the producers and artisans. It builds its brand value in a very innovative manner. First, it creates a brand identity of the unique style and art used by the producer. Then it builds a brand for itself by means of its communication and outlets. Another dimension that it explores is the socio-cultural environment by linking the artisans to values of equity and a sustainable livelihood; and the urban consumers' aspirations and memories of an old-world charm and responsibility towards the society and environment. In this way it is able to create brand value across multiple spaces and thus differentiate itself in a market being consumed by westernization. Fabindia has positioned itself as an exclusive cultural brand ambassador that promotes the traditional handloom trade and sustainable living among artisans. Customer Relationship– FabIndia does not chose to target any specific demographic or age profile. However it majorly competes in a very niche segment of the handicrafts marketplace. It typically attracts urban customers who wish to support arts and craft and are environmentally conscious. The products give the customer a feeling of uniqueness and this enables FabIndia to
build a loyal customer base, which doesn't mind paying a premium and is not price-sensitive. Often it is found that loyal customers of FabIndia do not tell other people where they bought the product from, as they want to experience a feeling of exclusivity that comes with using FabIndia products. FabIndia follows the customer retention strategy rather than customer acquisition as it believes that ''A delighted customer is our best brand ambassador''. The company thus lays great importance on satisfying its customers and maintains a customer feedback register which is reviewed by the Product Selection Committee. It also has a Mystery Shopper program wherein mystery shoppers pose as normal customers and report their experience to the management. Fabindia is also in the initial stages of implementing a CRM system in a move towards using information technology to better understand its customers. Product Bundling and Launching strategy– A unique practice that Fabindia follows is launching complementary products together, which is made possible by its diverse portfolio. For instance, if a new line of apparel is launched, then jewelry or accessories that go with it are also launched at the same time, thus requiring no separate promotion of its own. This also ensures that the customers get a complete shopping experience when they visit a store.
Marketing mix: Product diversification – FabIndia has indulged in product diversification over the years and today has a rich product portfolio that includes Garments, Home Furnishings, Organic Foods and Body Care products with a good depth of products under all these categories. The products speak for themselves and Fabindia does not give packaging much of an importance. The packaging however does at times include product information as to where the product is sourced from and the process of manufacturing etc. Pricing – Fabindia has products in a wide price range from Rs. 200 to over Rs. 2000, thus attracting customers from all income segments. It aims to integrate affordability with quality and value for money. Even with products in a lower range, most of Fabindia mainly follows a premium pricing
strategy as its products are unique and the customers do not mind paying a premium to own them. It does not hold any sales or offer discounts to clear out its stock, but it does offer EMI options on high-end products like furniture collections. Fabindia follows the oldest pricing strategy in the book, which is pricing with the number 9. All its prices end in '90', for instance, Rs. 1890, Rs. 890 etc., thus giving the illusion of a lower price to the customer. Promotion – Fabindia has traditionally never spent on promotional or marketing strategies. It only relies on word-of-mouth and customer referrals for promotions and believes in letting the product do the talking. The only thing it promotes is the location of its stores by using tools like Mobile Marketing and advertising in newspapers about its store locations. Place – Fabindia has always been competent in its upstream activities, with its unique model of sourcing and logistics. With the center of gravity and competitive advantage of most businesses shifting downstream, Fabindia has started to pay attention to how it sells the product to the different segments of customers and is deploying better customer service strategies like implementing CRM etc. It mainly sells its products via the following channels of business, Retail stores: The retail stores are well-established all over India as well as abroad. Wholesale exports: Realizing the potential of the wholesale market, Fabindia launches a special collection twice a year for exporting to around 34 countries, which it displays in exhibitions and handicrafts' fairs. Institutional sales: It also provides customized interior designing solutions to high-end institutional clients like heritage hotels and business houses. In-store strategy – Fabindia has stores in around a 100 locations all over India and abroad as well. It sells through premium, concept, regular and online stores. The stores are differentiated according to the product range displayed, some stores only stock apparels and others only home furnishings. However often, stores that stock jewelry and apparels are either the same or close by, so that shoppers find it convenient to purchase complementary items at the same time. Online stores help
them to tap the tier – II and tier – III city markets. Fabindia creates what is called the look-touch-feel in-store experience by creating a comfortable and calm atmosphere wherein shoppers can take their own sweet time to try out clothes. The store decor and ambiance highlights the natural organic theme that runs through its products. So even with a major chunk of sales coming from online stores, loyal customers still love the experience of shopping in a Fabindia store. The stores have hoardings to increase awareness about the artisans from whom the products are sourced. The stores also give great importance to shelf display and ensure that products which compliment each other and are aesthetically appealing are next to each other.
Limitations of the marketing strategies used: Promotion – The lack of a promotional strategy and over-dependence on word of mouth can be responsible for less than the potential sales in the future, as their competitors might become more powerful and promote aggressively to gain greater market share. Changing shopping trends – As people shift to online shopping in the future, the uniqueness of the Fabindia stores would lose their value, taking away some of the exclusivity associated with its stores. Fabindia might lose some of its competitive advantage due to this. Sourcing – The number of stores has increased a lot over the past few years and sourcing and backend operations need to be strengthened. Fabindia needs enhanced mean of predicting customer demands, as a few times, their stock has had to be carried to the next season owing to lack of demand for a particular type of product.
References: 1. Annapurna M., ''Transitioning Markets: Transcending Consumption'', Economic and Political Weekly, Vol. 41, No. 31 (Aug. 5-11, 2006), pp. 3388-3393 2. B. Syamasundari and Seemanthini Niranjana, ''Valuing the Non-Market'', Economic and
Political Weekly, Vol. 41, No. 31 (Aug. 5-11, 2006), pp. 3394-3398 3. Savita Modak, ''Weaving Customers' Dreams'', Economic and Political Weekly, Vol. 41, No. 31 (Aug. 5-11, 2006), pp. 3367-3368 4. Fabindia – Crafting Success, Businessweek http://www.businessweek.com/stories/2008-10-01/fabindia-crafting-successbusinessweek-businessnews-stock-market-and-financial-advice
