Table of Contents Market Review:...........................................................................................................4 Review:...........................................................................................................4 Market Trends & Opportunities................................................................................4 Opportunities ................................................................................4 PEST of Retail Industry...............................................................................................5 Industry ...............................................................................................5 Political....................................................................................................................5 Political ....................................................................................................................5 Regulations in your industry....................................................................................7 industry ....................................................................................7 •
National Business Environment.....................................................................7 Environment .....................................................................7
Environmental.........................................................................................................9 Environmental .........................................................................................................9 •
what the government says and what market say..........................................9 say ..........................................9
Social................... Social ....................................... ........................................ ....................................... ....................................... ................................... ...................11 ....11 •
Related to your industry..............................................................................11 industry ..............................................................................11
•
A view of the services market......................................................................11 market ......................................................................11
•
Lack of standardization................................................................................12 standardization ................................................................................12
•
Free entry and unemployment unemployment.....................................................................12 .....................................................................12
•
Deficiency of trained HR..............................................................................12 HR ..............................................................................12
Socio Cultural:.......................................................................................................13 Cultural: .......................................................................................................13 •
Westernization.............................................................................................13 Westernization .............................................................................................13
•
Brand Consciousness...................................................................................13 Consciousness...................................................................................13
Technological:.................... Technological: ........................................ ........................................ ........................................ ..................................... ........................13 .......13 Research and development...................................................................................14 development...................................................................................14 Customer needs, AIOD & migration trends...............................................................15 trends ...............................................................15 AIOD:.....................................................................................................................15 AIOD: .....................................................................................................................15 Psychographic Market:.......................................................................................15 Market:.......................................................................................15 PORTER’S POR TER’S MODEL MODEL..................................................................................................18 ..................................................................................................18 •
THREATS THREAT S OF NEW ENTRANTS.......................................................................18 ENTRANTS .......................................................................18
•
THREATS THREAT S OF SUBSTITUES SUBSTITUES................... ....................................... ....................................... ......................................18 ...................18
•
RIVALRY RIVALR Y AMONG EXISTING FIRM..................................................................19 FIRM ..................................................................19
•
BARGAINING POWER OF SUPPLIERS.............................................................19 SUPPLIERS.............................................................19
•
BARGAINING POWER OF BUYERS.................................................................19 BUYERS .................................................................19
Competitive landscape, SWOT SWOT:: .................................................................................20 COMPETITOR ANALYSIS:........................................................................................20 ANALYSIS:........................................................................................20 BAREEZE:........................................................................................................... BAREEZE: ........................................................................................................... ...21
IDEAS....................................................................................................................25 IDEAS ....................................................................................................................25 •
STRENGTHS:................................................................................................25 STRENGTHS: ................................................................................................25
•
WEAKNESS:..................................................................................................25 WEAKNESS: ..................................................................................................25
•
OPPORTUNITIES:..........................................................................................26 OPPORTUNITIES: ..........................................................................................26
•
THREATS:.....................................................................................................26 THREATS: .....................................................................................................26
SWOT EXPLANATION EXPLANATION::............................................................................................26 •
STRENGTHS:................................................................................................26 STRENGTHS: ................................................................................................26
•
WEAKNESS:..................................................................................................27 WEAKNESS: ..................................................................................................27
•
OPPORTUNITIES:..........................................................................................28 OPPORTUNITIES: ..........................................................................................28
•
THREATS:.....................................................................................................29 THREATS: .....................................................................................................29
BRAND PERCEPTION INDEX:.....................................................................................31 INDEX: .....................................................................................31 VISUAL:................. VISUAL: ..................................... ........................................ ....................................... ....................................... .................................. ..................31 ....31 Verbal:...................................................................................................................33 Verbal: ...................................................................................................................33 Tagline:................... Tagline: ....................................... ........................................ ........................................ ....................................... ........................ ..... ........34 Advertisement:.................. Advertisement: ...................................... ........................................ ........................................ ..................................... .....................34 ....34 Word of mouth:..................................................................................................34 mouth:..................................................................................................34 EXPERIANTIAL:.................... EXPERIANTIAL: ........................................ ........................................ ....................................... ....................................... ........................ .... 36 Store outlook:.....................................................................................................36 outlook:.....................................................................................................36 Customer care:.................. care:...................................... ........................................ ........................................ ..................................... .....................36 ....36 Quality/ Durability Durability:: .............................................................................................36 Financial Review.......................................................................................................38 Review .......................................................................................................38 •
Company performance—Gul Ahmed...............................................................38 Ahmed...............................................................38
Sales Channel performance-IDEAS........................................................................39 performance-IDEAS........................................................................39 Waiting time.......................................................................................................39 time.......................................................................................................39 Location.............................................................................................................39 Location .............................................................................................................39 Product variety...................................................................................................40 variety...................................................................................................40 HOME IMPROVEMT:................................................................................................40 IMPROVEMT:................................................................................................40 Kitchen:..............................................................................................................41 Kitchen: ..............................................................................................................41 Bath:..................................................................................................................41 Bath: ..................................................................................................................41 Home furniture:..................................................................................................42 furniture:..................................................................................................42 GIFT IDEAS:........................................................................................................43 IDEAS:........................................................................................................43 Personal Wear.......................................................................................................44 Wear.......................................................................................................44 Menswear:..........................................................................................................44 Menswear: ..........................................................................................................44 Women' Wome n's s wear we ar :....................................... ........................................................... ........................................ .................................. ................. ... ...45 Product performance (IDEAS)............................................................................. (IDEAS) ............................................................................. ...46
Forecasting for next 3 quarters:.........................................................................46 Analysis of Projections:..........................................................................................47 Corporate Strategy...................................................................................................49 Vision.....................................................................................................................49 Financial Outlook:.....................................................................................................50 Growth...................................................................................................................51 Growth rate:.......................................................................................................51 Product Strategy.......................................................................................................53 Target Market & customers....................................................................................53 PLACEMENT........................................................................................................53 PROMOTION.......................................................................................................... .53 PLC & BCG................................................................................................................56 BCG:......................................................................................................................56 Product Theme and Pricing.......................................................................................57 •
Brand Elements analysis:................................................................................57
The colors:........................................................................................................ .....57 The Text:.......................................................................................................... ......57 The symbol:..................................................................................................... ......58 PRICE............................................................................................................ .........58 Product Roadmap.....................................................................................................60 Quarterly Deliverables...........................................................................................61 Products and Features...........................................................................................61 References................................................................................................................62
Market Review: Market Trends & Opportunities The industry that we have chosen is basically retail industry of Pakistan. In the recent year we have experienced a noticeable growth in this sector. From little shops to departmental stores the trend has changed to malls, mega malls, arcades and so on. Almost all the world class brands have realized the market potential in Pakistan and opened up their retail outlets here. This
segment alone, projected to grow by 17 million people by the year end 2010. 1
Not only that, numerous local brands have sprung up and they are doing exceptionally well. The unprecedented growth of this industry is owed to the awareness that has been spread by the globalization. People have become more fashion savvy and brand conscious. The growth is so tremendous that people have started to consider it as a status symbol. There are certain stores that are considered to be prestigious and expensive and people take a lot of pride in making it public that they shop from a specific store, which is a part of an international or a local brand. Albeit, we are suffering an economic crunch, but this industry is still blooming and more international chain have opened up their stores. A recent example is of metro store. This is maybe because the disposable income of the people of Pakistan lets them afford such a life style, as we have a wide
1
http://ajc.sagepub.com/cgi/content/abstract/2/2/137
middle and upper middle class and the status awareness is increasing by the day. Now taking into consideration the latest trends of one shop stop home concept, where buyers can purchase all the household items from clothes to toiletries, decorations, apparels, furniture, beddings etc at a single store. In the past few years some major brands have launched stores of this sort locally and have also expanded it internationally. These include Chen One of Chenab Group, Bareeze of Sefam Pvt. Ltd and Ideas owned by Gul Ahmed. For the purpose of this project the brand under consideration is Ideas. The project provides a detailed review and analysis of the chosen company along with the competitors
PEST of Retail Industry Political The global economic slowdown of 2007-082 initially triggered by the subprime mortgage crises in the U.S, as a result was which the U.S. Dollar suffered huge depreciation against major currencies; coupled with the phenomenal hike in oil and food prices, sent shock waves around the world, throwing up enormous challenges for most economic managers. Pakistan was no exception.3 Heavy reliance on imported fuel and food commodities
2
http://www.sdpi.org/help/research_and_news_bulletin/jan_feb_06/textiles_and_clothing.htm
3
http://www.epb.gov.pk/docs/others/trade_policy_initiative_2008-09.pdf
like wheat and sugar placed huge pressure on our balance of payment reserves as our import bill soared. As far as the garment production4 in Pakistan is concerned, the highest value-added product among the textile group, but the price we are getting for our products is less compared to other countries. According to one estimate 70 percent of these units are in the unorganized sector, producing cotton-made articles. These units do not have modern machinery and use the non-mill made cotton cloth. This may be one of the reasons that the price we fetch for our apparel exports is low compared to other countries. As apparels/garments provides the highest value added product among the textile items. Maximum focus should be towards the units producing garments. Our producers in this particular industry should try to adopt (just like in the West) the “Demand for Market Oriented Strategy” i.e., to increase their market power by producing high price fashion clothing. They should go for product differentiation through the promotion of brand names and advertising. And they should also try to increase the efficiency of distribution. With an increase in market power they can easily transfer rising cost to consumer in the form of rising prices.
4
http://www.pide.org.pk/Research/Report180.pdf
Regulations in your industry National Business Environment
Pakistan’s national business environment is characterized by abundance of semi-skilled and low wage labor, moderate natural resources, poor infrastructure, high rates of corruption, poor governance, moderate level of university-industry collaboration and low scientific research on the factor side. The context of firm strategy & rivalry can be described as highly regulated, bureaucratic business environment, high tariffs, no substantial presence of foreign companies and static corporate culture. The textile industry has been the driving force behind the manufacturing sector growth of Pakistan. This sector accounts for nearly 60% of total exports for Pakistan, 46% of total manufacturing produce and employs 38% of the total manufacturing labor force. Textile trade is classified into two broad categories i.e textile which include yarn, fabric and madeups and clothing which represents ready-made garments. The largest growing sector within the global textiles trade has been the apparel sector – trade in this sector in 1999 accounted for 53% of the total value of global textile trade. Over the last decade, the apparel trade5 has surpassed the trade in textile products such as yarns and fabrics. In the year 2000 total trade in textiles was $157 billion and trade in clothing was $199 billion. There was a switch in trade patterns after 1985 when clothing 5
http://www.smeda.org/business-development/sector-briefs.html
became more significant as compared to textiles. This sector lies at the pinnacle of the textile value chain, which begins with cotton and synthetic fibers. South Asian countries have established themselves as the most important players in the textile sector.
source: isc.hbs6
6
http://www.isc.hbs.edu/pdf/Student_Projects/Pakistan_TextileCluster_2007.pdf
Environmental what the government says and what market say
Pakistan is one of the emerging economies of the world. It has shown great economic growth due to dynamism in its industrial, agriculture and services sectors. The services sector alone has continued to perform strongly and has averaged growth of over 8% per annum since 2000. Services sector contribution to real GDP growth Pakistan’s economic growth7 is broad-based and is shared by all the major sectors of the economy. However, a major contribution towards growth has come from the services sector, which has emerged as a growth powerhouse over the past few years. The commodity producing sectors (agriculture and industry) have contributed two-fifths while the services sector contributed
7
http://www.smeda.org/downloads/AppendixI-TradeinServices.pdf
the remaining three-fifths of the 2006-07 real GDP growth of 7.0%. Agriculture and industry contributed 30.2%, or 2.9% percentage points, while the remaining 59.8%, or 4.2 percentage points, came from the services sector. Within the commodity producing sectors, agriculture contributed 1.1 percentage points or 15.1% to overall growth, while industry contributed 1.8 percentage points or 22.7%. The services sector has contributed the bulk of GDP growth for some time.
source referenced from smeda 8
http://www.smeda.org/downloads/AppendixI-TradeinServices.pdf
Social Related to your industry
Pakistan’s reliance on agriculture is minimizing with the passage of time. It is encouraging to note that the contribution of wholesale and retail trade is increasing. It contributed 19.4% or 1.4 percentage points to GDP in 2006-07. This sector is highly labor-intensive and this higher growth may have contributed to the rise in employment and income levels of people attached to the sector.
A view of the services market
“While dealing with a service giver, I am constantly gripped by a fear of being cheated. I have to play extra vigilant; as the fear is not just about the conscious wrong doing on the part of a service giver but also about his skill and ability to deliver the right quality stuff”.
These issues are reflected below: Lack of standardization
Services are not standardized. Legislation protecting consumers is still at a very early stage and there are no strong traditions to support customers seeking recompense or damages from a services deliverer. International quality certifications are systems-based requiring a lot of documentation, besides being expensive. There is a need for a simple but effective mechanism, at the level of the sectoral or professional associations, to certify the quality of services and thereby ensure adherence to a consistent set of quality standards. Free entry and unemployment
With rising unemployment, services businesses requiring a minimum level of skill, a small capital outlay and virtually no registration are an easy option for investment to earn a living. With scores of people entering the lower end of the market, competition is high and the range of pricing limited. Therefore, livelihoods are squeezed from the thin margin left after meeting all costs and overheads. Expecting such a market to be quality conscious is an illusion. Deficiency of trained HR
Apart from a few organized sub sectors, like banking, medicine and engineering, there are no credible training institutions offering courses in the skills required for the services sector. Resultantly, most of the artisans in
trades like electricians, mechanics, drivers, tailors, barbers, cooks, masons, etc, are trained on the job. The level and quality of skill acquired by them is inconsistent and uneven depending on the source and environment of learning.
Socio Cultural: The product made by Gul Ahmed is in sync with the socio cultural aspects of the region. The dresses usually worn by the women and men here are of that material. Gul Ahmed however is not catering to the changing social trends for example the move towards more westernized clothing like Bareeze is doing with ‘Leisure club’. This change in the social and cultural trends can affect Gul Ahmed and it will have to keep re inventing itself to keep up with the times. Plus there is a change towards more acceptability of working women in the society. The firm will have to keep in mind that too because not ladies have time to get the clothes elaborately stitched now. Westernization
Due to media proliferation and exposure to the western culture the younger generations in Pakistan is becoming more and more westernized. This change in the society has worked in favor of fashion store like Chen One and Bareeze that sell trendy western and eastern outfits for both men and women but for Ideas by Gul Ahmed, this is a territory yet to enter. Brand Consciousness
People are becoming more and more brand conscious. Reliance on foreign brands is increasing. Therefore the Pakistani brands by portraying a hip and
a trendy image like the west can capture the interest of people.
Technological: On the national level, Gul Ahmed is enjoying technological edge over all the others players in the industry. The technology that is in use in the industry has a lot of room to be improved. It is necessary that the industry undertakes an up gradation in the technology being used. Also, there is lack of efficient R&D and training. The textile machinery used in Pakistan is imported mainly from countries like Japan, Switzerland, Germany, China and Belgium. Gul Ahmed unlike the other mills and factories of Pakistan is equipped with far better technology which helps them to be far more efficient and maintain good quality. But, on the Global scenario the costs of inputs in Pakistan are more than any of the competing countries like India and china. Gul Ahmed has to be more efficient in production and if possible, install more technology in order to meet its aim of becoming international brand. Whereas in IDEAS; they have incorporated Management Information system with incorporation of oracle based inventory management system. This helps them retain, analyze and forecast the inventory in store and demand that is in market for a particular product.
Research and development To facilitate the textile industry, government has granted 6 percent Research and Development support to garment exports (both knits and woven). Research and Development support to export of dyed/printed and
White, Home Textile at 3 percent and dyed/printed textile at 5 percent of the FOB. The scheme has been discontinued from June 30, 2008. As per the estimates provided by the State Bank of Pakistan, the government has doled out Rs 40 billion to textile exporters of the country
Customer needs, AIOD & migration trends AIOD: Psychographic Market:
The main psychographic market for Ideas is young/ adult males and females. Although there is a lot of variety for kids as well but they are not the direct target market for kids, as they rarely make it a point to choose where they would like to shop for their clothes only. The main competitor is Chen one in every target market. The main activities, interest, opinion and demographics of which are explained as below: Benefits Activities One shop stop Housewives, for
buying
households
Interest Home décor,
Opinion Status
and
Demographics Urbanite,
conscious,
working women
Shopping
who take care
family
of
home,
the
whole
for and
household,
making
family
reflect
the house,
television,
interest in home
26
the home and onwards,
the women of Upper watching
men who take
aged
middle
class, having a good income
social social lifestyle,
acceptance important
is half/full/empty nest,
(because
reading
they
can
fashion/home
recently
magazines
married, started
be
or a
late
family, or kids are
already
married
or
reached
the
adult)
Latest
clothes
Students,
Following
and a shopping
(high
latest trends,
experience at a
college,
good store
university)
school,
male/female Urbanite,
Status conscious,
aged 16-26, Shopping themselves,
working (part/full time)
the
Sports,
for
Good looks and clothes
are
single or
essential
for
Engaged
being and for
popular
not yet married
social
like a separate
Fashion,
acceptance,
Music,
Liberal view of upper living
Latest happenings,
but
family
and
middle
class
dressing up etc male/female
The consumer trend and migration for Ideas is basically for the metropolitan cities of Lahore, Karachi and Islamabad. The reason is not only that a lot of educated and upper middle class belongs to these cities but also the fact that people go to these cities for specifically for shopping as they are famous for the variety they offer. The consumers flock to these cities mainly during the summer vacations and also the winter holidays. The trend for consumers migrating to these cities has been noticed to be what is called the “wedding season”.
So, Ideas can cash on the
opportunity of increasing their stock and variety during these peak seasons and times of the year.
PORTER’S MODEL
According to the porters approach retail industry analysis is as follows THREATS OF NEW ENTRANTS
The threat of new entrants in the retail industry keeping in view the brands that we have chosen is low. As the scope of the business of ChenOne, Bareeze and Ideas is providing a vast category of products under one roof. The new entrants face several barriers which primarily includes the high costs involved in starting this business. Secondly the product offered by them is highly differentiated product which also discourages new entrants. With such established brands it becomes very difficult for the new entrants to make a position in the market or capture market share. Thirdly the cost involved in having an exclusive distribution is very high which also serves as a barrier to entry. THREATS OF SUBSTITUES
In case of the retail industry that we are analyzing the threat of substitute can be classified into the following category of people •
Brand conscious
•
Not brand conscious
If the people are brand conscious then the threat of substitute is medium to low. People might switch brands if they think due to any reason the brand is not providing satisfaction. But on the other hand people who are brand loyal would not think of any substitute. For the people to whom brands don’t matter the treat of substitutes is pretty high. These people rather than buying from an expensive branded store would rather
prefer buying from local stores which would satisfy their need as a less expensive substitute.
RIVALRY AMONG EXISTING FIRM
The rivalry among the firms of the retail industry is high both in the local market and also the branded market. In case of the local market the number of competitors is very large and all moves are competitive. Majority of them are even located in same areas challenging each others positions, taking sales from each other. Due to a lot of fragmentation the suppliers are also exploitative. The branded market is also on the competitive moves. Launch of new product by any brand impacts the other brands like the recent launch of Ideas impacted the sales of ChenOne and Bareeze. BARGAINING POWER OF SUPPLIERS
The bargaining power of suppliers is high in retail industry as the suppliers can supply to any firm they want. Ideas, bareeze, ChenOne have their own suppliers and therefore have great impact on the running of their business. The products at these stores are differentiated and therefore the switching costs involved are very high. Alongside the substitutes in case of suppliers is also not viable as brand equity is also very important. BARGAINING POWER OF BUYERS
The bargaining power of buyers is high in the retail industry when local stores are considered but in case of branded stores it is low. The reason for the high bargaining power in local market is •
Plentiful alternate suppliers
•
Product not differentiated
•
Access to substitutable products
•
Plentiful options for consumers
On the other hand in case of the branded stores the bargaining power of buyers is low because •
Less alternatives
•
Differentiated product
•
Changing supplier costs high to the seller
•
Brands justify high pricing
Competitive landscape, SWOT: COMPETITOR ANALYSIS: Chen One is one of the 3 projects launched by Chenab Group. Chenab
Group started its retail chain of fashion stores under the brand name of Chen One, with the concept of a family mega store dealing in home textile, fashion garments, furniture and other accessories. Starting from Islamabad, the capital of Pakistan, their outlets spread to other cities. Chen One is a subsidiary of Chenab Group of industries. It has been in operation since its inception in 1997. The name Chen One is an integration of two words; Chen comes from Chenab, its parent company, and one comes from its number one undisputed position. Chen One has eight outlets in Pakistan and after their success at the Motexha spring exhibition in the Middle East they set up five stores in the
region. All Chen One stores are located in exclusive places in Karachi, Lahore, Islamabad, Rawalpindi, Peshawar, Faisalabad and Rahim Yar Khan and its outlets can now be found in the best locations of Dubai, Ajman, Abu Dhabi, Makkah, Sharjah and Bahrain. The catch phrase used by Chen One for marketing purposes i.e. changing lifestyles fits very well with the innovative approach of its managers. Today Chen One is holds a unique position in the market in the sense that we don’t get to see too many stores offering a variety of products under one roof and that too with a strong brand name and image. Chen One is the leaders in home linen, garments and furnishing fabric market. Looking at the increasing market demand and the good quality that Chenab was producing they decided to start their own brand, this was the only source of getting themselves recognize in Pakistan. Else for recognition they also wanted to establish a brand that could carter to the needs and demand of the local consumers, customers who seek good quality.
BAREEZE:
Bareeze is a sister concern of Sarena industries and owend by Sefam Pvt ltd. The firm is in business since late 1980,s. product range includes; crisp cottons, luxurious silks, sheer organza, chic chiffons, textile embroidery. Bareeze brand and stores:
Leisure club: Every garment at Leisure Club contributes to the mainstream fashion scene. Our styles identify with the contemporary tastes, colors offering a wide range of stylized outfit. Minnie Minors: A colorful range of fashionable classics for newborns through to pre-school. We manufacture high quality garments designed with the choicest of fabrics with an innovative range of soft toys, furniture, jewelry and accessories for babies. Chinyere: Bareeze‘created an exclusive casual, semi-formal and formal wardrobe. Our garments are designed in step with global fashions and in keeping with tradition. This caters to the women as well as men. Home expressions: Elegant soft furnishing, bed sets and home linen are fashioned from the versatile Bareeze‘fabrics at par with local and global trends.9 Compan
Strengths
Weaknesses
Opportunities
Threats
y Ideas
Brand name, sub Too much under the A brand
of
“Gul
influence
of
parent
segment by making
offering
Ideas
diverse
more
create a tagline for
designs and charge
range.
personalization.
quicker
more, Increase ATL
Competition
ranks
Established target
High prices but not
promotions.
higher
being
market.
outlet
association,
exclusive
of apperal.
http://www.bareeze.com/demo/CompanyProfile.php
exclusive
a
High emphasis on
mouth.
9
Competition
brand,
Word
to
niche
Ahmed”.
Strong
Needs
new
product
on
exclusive, (Chenone, products
Bareeze only
on
outlet)
Chenone
Brand name
Criticized
Company’s
Prices,
market
Goodwill
Outdoor
yearly
Product Quality
Advertisement
discounts.
Product Variety in
sometimes
household
amorous appeals,
International
Static target market
expansion
and
personal wear Strong Management Low
Employee
Turnout Technological Edge
being
the
Chenab group Elegant Creative
and Designs
in the readymade wear
for
high
use
Increase
target by
having
exclusive
Competition, Related
unrelated
diversification Improving policies
HR
Bareeze
Strong
brand
Poor service,
name Strong
market
presence Preference
of
No Tvcs yet
customer
To
diversify
portfolio very
its Direct
being
strong
a
brand
indirect
competitors (aroshi, wrinkle,
batools,
and capitalizing on
chen one, ideas, out
the
fitters,
market
share
crossroads,
consumers
and the mind share
imperial
Readymade
that it has achieved
furniture shops)
collection in great
Related
Brand
variety
diversification
Variety
in
the
material used that
introduction
:
bareeze sweaters
silk,
To be the first mover
chiffon,
organza
in coming up with a TVC
Building brands of its
own
like
chinyere,
leisure
club,
Minnie
minors. International presence. Competitive quality of product in terms of stuff, embroidery
and
durability High
prices,
Catering
to
different
market
equity
and
maintenance of its
of image
include
and velvet.
store,
Political instability in the country Inflation
causing
increase in cost of production
segments. Accessibility
due
to its retail outlets everywhere
IDEAS STRENGTHS: •
strong brand name that it carries as its parent brand
•
People across the country trust the brand Gul Ahmed for it quality, novelty and eminence. Especially in the clothing line their quality is considered to be superior to their competitors.
•
Positive Impact of its personal wear on home products and gifts
•
Offering personalization on some of their products i.e. order taking
•
not many competitors on the basis of one shop stop
•
capitalizing on the increasing awareness of diversion between income and economic classes and recognizing shopping from good branded stores and malls has become a status symbol WEAKNESS:
•
there is not complete exclusive distribution for Ideas
•
Marketing not rigorously
OPPORTUNITIES: •
One of the major opportunities that await Ideas is the fact that they can expand their business greatly. This expansion can be both: Locally and Internationally
•
Local expansion in the unexplored cities of Pakistan
•
Internationally there is a huge potential for them to setup their stores
•
Another diversification that holds a lot of opportunity is to invest and venture into cosmetics market THREATS:
•
Political Instability
•
Rising production costs
•
Competitors
SWOT EXPLANATION: STRENGTHS:
The major strength Ideas has currently is the strong brand name that it carries as its parent brand. It banks heavily on the brand name “Gul Ahmed”. People across the country trust the brand Gul Ahmed for it quality, novelty and eminence. Especially in the clothing line their quality is considered to be superior to their competitors. Consequently the loyal customers of Gul Ahmed would want to buy or try other product range that is being offered by Gul Ahmed. Apart from the regular customers of Gul Ahmed clothing a lot of people who would want to
buy other households might want to try ideas because of the mere fact that it belongs to Gul Ahmed. The fact that they are offering personalization on some of their products makes them different from their competitors. For instance they are offering to embroider on the bed sheets etc according to the individual customers. This is giving them an edge over their competitors. Another Strength is that they don’t have many competitors, so if they market tactfully they can make a mark within no time. The concept of having a one shop stop is relatively increasing as people find it convenient to buy all the household stuff from a single store. Although it is becoming a popular concept but they don’t have many competitors in the market as the market is not very saturated. One of the major strength they bank on is the increasing awareness of diversion between income and economic classes. Shopping from good branded stores and malls has become a trend. So, shopping from these big stores is becoming a status symbol. Now is the right time to make the most out of this strength which is at its peak right now.
WEAKNESS:
There are a few weaknesses that Ideas has to take into consideration and work on for the improvement of its business: One of the major weaknesses is that they are overpriced for the variety they are offering. Although it is competitive to their other competitors but the
overall pricing is a bit too high given the fact that the clothing prints and the material they are selling on other shops at a lower price are being sold at a higher price in the ideas outlet. So, taking the clothing line specifically, the items that are being sold at Ideas are also being sold at other shops so there is no exclusive distribution for Ideas. In comparison to this the competitors have exclusive distribution for their stores. The products offered there are not being sold anywhere else. Another weakness is that they are not marketing themselves currently rigorously as compared to Chen one and Bareeze which are their competitors. They don’t have a television advertisement at all and they don’t usually advertise through print media as such. Only a few bill boards are displayed around the town, which does not really give them visibility or make their presence felt. So they really need to work on their marketing to make them known. As opposed to this their competitors pay special attention to their marketing campaign and design them well. Another weakness is their display of items. It is too cluttered and shabby. Their outlets in different cities have different ways of displays i.e. there is no coherence. Even the individual outlet is not well displayed as compared to their competitors who have a very clear display and each section is differentiated in a lucid manner. OPPORTUNITIES:
One of the major opportunities that await Ideas is the fact that they can expand their business greatly. This expansion can be both:
•
Locally
•
Internationally
Locally there are many cities that are still unexplored but they do have a lot of potential. Apart from that they can also participate in different business festivals where they can put their stalls and displays. So taking part in such activities would not only bring awareness for their brand but also make it easier for them to enter the markets that are still untapped by them. Internationally there is a huge potential for them to setup their stores. For instance Chen one is doing exceptionally well in Dubai, so that shows that there is a huge market for such stores. What needs to be considered is that they need to open their stores in markets where there is potential and the right kind of consumers that would be able to shop from this brand. Another diversification that holds a lot of opportunity is to invest and venture into cosmetics market. As they are a reliable brand and offering a home concept shop, offering cosmetics would also be successful. Cosmetics market is huge with little local players. People would consider their cosmetics range reliable and of good quality because of the mere factor that their parent company has a great name as far as quality and reliability hold. They can give their cosmetics a different brand name but can display them on ideas outlets. They are already making perfumes so making a complete range of cosmetics would only help them. THREATS:
The dominant threats to Ideas currently are:
•
Political Instability
•
Rising production costs
•
Competitors
The major threat to any business currently is the political situation in the country. Strikes, riots and other instabilities are increasing by the day. It affects the businesses adversely. It not only affects the sales of the store but may also cause damage to the outlet itself. Secondly, the rising costs of production that includes the costs from materials to all the overhead costs are making it difficult for the textiles industry to sustain. Although there is no threat of sustaining the business but it does increase the cost of production which in turn increases the price. So, the current economic crunch is also a threat for them to develop more efficient ways and means of manufacturing and commuting their products to their outlets. Last but not the least the threat is from their competitors. Chen one is famous for their grand sales, discounts and the offerings that they have for their prestige customers. They also have a long established their name in this business of selling almost all the households at one shop. But if they make the most of their strengths and take up the opportunities that they have, it won’t take them long to match up to their competitors in the market.
BRAND PERCEPTION INDEX: VISUAL: There were many factors that we thought are most essential but we chose the following three and gave them the maximum weight age. These are listed as follows; The logo: the logo or emblem is one of the very first things that a customer recalls when he thinks of a particular product. Therefore it should be considered an important visual depicting the overall theme of the company. Since our culture is a high context culture, we love to make perceptions about things. Therefore we thought that a logo is of significance here and hence we gave it a weight of 35%. Product range: this entails the entire number of offerings that are present at these retail outlets. Note that quality is an attribute that one gets to experience so we cannot categorize it in visual. By product range we mean the different types of product meant for different target market. This is an extremely important aspect of a retail outlet of this sort because it is often synonymous with “one stop shop”. Therefore the group unanimously decided that the most weight should be given to this and we finalized at 40%. Innovation: by innovation we mean the novelty of design that is incorporated in each of the offerings. This innovation should be visibly there. For e.g. how uniquely different the products are from competition. Innovation is
something that not all people appreciate however. We as a nation are very skeptic people; we like to go by norms, by the books. The middle income group is evolving yet people like to live a conventional style of living. Therefore despite being really influential, we made a deliberate effort to give this factor the lowest weight of 25% eyeing from the perspective of an average target audience.
Idea
Chen
Baree
s
One
ze
VISUAL
scor weig
score
weig
logo
e 4
5
ht 0.35
ht 0.35
1.4
1
score
weig
3
ht 0.35
.75 product
1 .05
3
0.4
1.2
4
0.4
1.6
2
0.4
0.8
5
0.25
1
4
0.25
1
3
0.25
0
Total
.25 3
total
.75 2.6
range innovation
.85
Total
4 .35
Idea takes the lead in terms of innovation of its products. The designs are absolutely unique in terms of idea as well as execution. However it lags behind in two other important visuals. Talking about the logo, Chenone takes the lead because its logo comes with its very catchy tagline i.e “changing Lifestyles”. On the other hand Ideas’ logo goes a bit over the board in claiming that it is “by Gul Ahmed”. The brand makes little effort through the logo, to build its own identity. On the whole, it is lagging behind Chenone while clearly surpassing Bareeze.
Verbal: Following are the drivers that we have sorted out for the verbal side of measuring BPI: •
Tagline
•
Advertisement
•
Word of Mouth
Tagline:
Tagline plays a pivotal role in the brand recall. It is our opinion that many a great brands were created or enhanced through the use of a wonderful taglines, and that taglines are a necessary part of creating a new company's brand image as well as sustaining it for the life of the product of service offering itself. Hence we have given it the weight age of 20%. Advertisement:
Nowadays, advertising has an extreme importance in our society, as it is omnipresent and one cannot help bumping into it. Besides, its techniques are more and more sophisticated, thus appealing people more easily. People would have a good standard of living even if they wouldn’t buy so many things. Ads, however, make them anxious to get more and more things, to buy more and more although they may feel they don’t need those things. This is clearly illustrated by the fact that people always want more and consume more than they need, which originates today’s consumer society. Hence we are giving it a weight age of 35%
Word of mouth:
Word of mouth can be an extremely powerful driver of new business.The massive growth of the textile sector in Pakistan led by the economic uplift in the social infrastructure meant that new range of products in this sector were promoted exclusively by people telling each other how perfect the range is and how large the variety is. Whatever we do, good or bad, people will talk about your business. All our hard work with a particular customer or group of customers can be blown away in an instant by a bad-tempered member of staff insulting them, being cheeky, or just not dealing with their query efficiently or treating them in the right way. And in this particular sector where our mothers, aunts and all like to talk about the shopping experience, product range and the sensatory gain they had by shopping from a particular outlet makes word of mouth the most important verbal driver. Hence we have given it a weight age of 45%.
Idea
Cheno
Baree
VERBAL
s scor weig
ne score
weig
ze score
weig
tagline
e 4
ht 0.2
0.8
5
ht 0.2
1
1
ht 0.2
0.2
advertising
3
0.35
1
5
0.35
1
4
0.35
1.4
5
0.45
2.25
total
3.85
.05 word
of 4
0.45
1.8
.75 3
0.45
1
Total
.35 4.1
mouth total
3 .65
Here again, we find ideas to be following Chenone closely but still, it is behind. Since the parent brand is so strong, therefore the brand had maintained a good word of mouth, however sometimes people do complain that as the products are not exclusive, the prices shouldn’t be. Here we are particularly referring to the G women and Men collection, which are available at retail outlets at the same price. This problem could be overcome, if the company keeps some very exclusive prints, with premium prices, only at the Ideas outlet and nowhere else. This would obviously create more interest to visit the outlet, at the same a very new market segment can be created, appropriately a niche, which includes those people who are willing to pay some extra amount only for exclusive prints. Thus ideas would become a brand in its own right. Currently the company is not engaged in quite a lot of BTL (below the line) promotion with competitors definitely surpassing it . “Ideas” has very catchy brochures though.
EXPERIANTIAL: Following drivers are being selected; Store outlook:
The store layout and the entire ambience that is there play an important role in the consumer decision making process. If the colors and design is such that it appeals to the senses than a positive response maybe stimulated which eventually results in purchase or at least revisits. We gave it a weight of 40% indicating high level of importance. Customer care:
This is another important factor in shaping up the entire customer experience. It includes the behavior and interaction of employees with customers on the time of
purchase as well as dealing with the post purchase inquiries. How deep the company goes into establishing a one to one relationship of employees and customers and also maintaining a distance so as not to intrude in their privacy is also important. A weight of 30% was hence allotted. Quality/ Durability:
As explained earlier, quality is something that a consumer often make a preconceived about, but he actually understands it after the trial of the product. Quality is a very important factor for customer retention so we gave it a weight of 30%.
Idea
Chen
Baree
EXPERIANTI
s scor
weig
one score
ze score
weig
AL store
e 4
ht 0.4
1.2
5
4
weig
1.6 5
ht 0.4
2
3
ht 0.4
0.3
1.5 3
0.3
0.9
4
0.3
1.2
0.3 total
1.2 5 4.3
0.3 Total
1.5 4.4
3
0.3 Total
0.9 3.3
outlook customer care quality
Here the brand is clearly ahead of competition in terms of the “customer care”. The fact that the company goes a step ahead to identify the needs of customer and tries to fulfill those is evident. Ideas has this very unique department of “ embroidery and
design ” to listen to the particulars of each customer and personalize the order
accordingly.
Financial Review Company performance—Gul Ahmed Gul Ahmed Textile Mills is one of the biggest names in the Pakistan textile industry. It is leading exporter of home textiles. It also manufactures lawn fabric for the domestic market. The Gul Ahmed Group began trading in textiles in the early 1900s. In 1953, the group decided to enter the field of manufacturing under the name Gul Ahmed Textile Mills Limited, and was incorporated as a privately limited company in 1972.10 Super brands Ltd. is an independent organization that promotes the discipline of branding by paying tribute to exceptional brands throughout the world, and it chose Gul Ahmed as a Super brand from the top 100 brand names from all business sectors in Pakistan, based on its exceptional performance, quality products, good governance, and over 5 decades of excellence in the field of textiles. 11 Thank You customers! Considering the growing trend towards the retail industry in Pakistan; Gul Ahmed launched a retail outlet by the name of IDEAS in 2003. ‘Ideas’ offers a range of home textiles and furnishings for the bedroom, kitchen and bathroom, as well as men's and women's apparel. It also provides in-house embroidery and tailor-made services. Ideas® strives to be an international brand that cares for its customers and fulfills their home and personal needs. Their aim is to ‘provide a distinctive cozy
10
www.gulahmed.com
11
www.wikipedia/ideas at gulahmed/
shopping environment with attractive décor, a consistent availability of high quality products and new product innovations’ 12. Gul Ahmed is an expensive and stylish brand which is always trying to keep up with the forever evolving fashion trends. In the company’s own words, ‘Gul Ahmed is fashion’13. Apart from Ideas, Gul Ahmed has even a complete online shopping store which can be easily accessed and stuff can be easily bought. What differentiates Gul Ahmed from its competitors is the focus on customers. It caters a lot to its customers and looks after their needs and convenience which has earned it a very a loyal customer base.
Sales Channel performance-IDEAS Channel marketing proves to be a “fit” if the process better responds to the desires of the target market than the organization could do alone. An organization must answer the question, “Will our customers or clients be better served by channel members rather than having us performs these functions?” Gul Ahmed in this regards, tend to offer its product through both its company owned retail outlets i.e. IDEAS and through other retailers that offer all types of varieties of clothing from apparel industry. Waiting time
It is the speed of providing faster service may be magnified through the systems that channel members offer. Ideas tend to present exclusive variety of its clothing range that is not available anywhere in market on the introductory phase. This 12
www.gulahmedfashion.com
13
www.gulahmed.com/magazine
means that original prints and clothing range first gets to IDEAS then to any other outlet of mix retail stores. Location
Getting the product in the right place and time is important. Arranging for “authorized dealerships” throughout a wide geographic area allows products to be conveniently and affordably accessible to customers. In this regards, Gul Ahmed has worked extensively to build and maintain its channel distribution networks. IDEAS solely serve the major purpose of bringing out all the products that fall under Gul Ahmed brand umbrella. Product variety
The ability to purchase other products from a retail store may enhance the sales and/or margins of all products offered by attracting customers who appreciate the variety of products. And this is what IDEAS is doing. They are hedging upon an exclusive market segment in Pakistan that is more brands conscious and is willing to pay more for better quality, exclusive designs and product range. The company distinctively identifies its product line into various categories. These are as follows; •
For home
•
Gift ideas
•
Personal wear
HOME IMPROVEMT: Bedding:
Bedding entails Adult Bedding , Kids and Teens , Infants Bedding , Bed Basics, Cushion Covers. In each of these sub categories the main features are; ○
Intricate stitching styles add an extra touch of sophistication.
○
Use of satin trims, piping, pleating and embroidery enhance the luxury of the 100% cotton fabric.
When it comes to kids and infants the design team is again triumphant by coming up with really bubbly, lively colors. However one of their designs prepared for teens particularly seems too hard to be convincing. This is shown in the picture of their bed quilt as follows which reads as “cool” and “babe”. People now are becoming image conscious. They want their outlook to convey out rightly the fact they are modern ad hip rather then this thing pasted on their accessories.
Kitchen:
Currently the company doesn’t have kitchen accessories to sell off however as a truly caring company, it provides its customers with short and crisp tips of making their kitchen ornamented.
Bath:
Ideas extensive range of towels, robes, shower curtains, curtain hooks, bathroom sets and accessories are an example of how well the companies knows the importance of personalization makes the customer satisfaction experience a real enduring one. Moreover the attention to detail is such that the company offers its customers to pick from over 100 types of embroidery designs for their towels. It calls it as the “monogramming facility” 14. Moreover there is a variety of other stuff such as bath robes, bath mats, shower curtains, bathroom sets etc.
Home furniture:
This is another personalized area where the company deals with adults, kids and teens differently. The company makes a sound depiction of its name through its entire product range. For instance would you ever imagine a “ flower chair” or a “lip seat” if their physical existence is in the literal meanings of the names? Very 14
http://www.ideas.com.pk/html/bath.htm
creative to imagine right? But at ideas, creativity gets out of the covers of
abstraction and blossoms by taking a tangible state. The same goes for the teen’s furniture. The company comes up with unique ideas such as “car chair” and “hand chair” etc so as to appeal to this market as well. Moreover as we know that children have a very important role to play in the purchase decision so the company takes care of that as well.
GIFT IDEAS:
The company is really sensitive to the changing trends and demands of today’s consumer. Time management for instance was a phenomenon really crucial for the
west but now as the boundaries are blurring, people in east value their time equally. Moreover the trend of socializing is increasing now. These two facts are taken care by the company well enough. It has come up with a wide range of gifts for its diversified target market. It has offerings for New born, Kids, Teens and gifts for all Occasions. Moreover the company has a separate department of “Monogramming and embroidery” which has the following features; 1. Custom monogramming and Embroidery motifs 2. Available in 100 styles and 15 thread colors. 3. Due to their personalized nature, monogrammed items are not returnable 15
4.
Personal Wear Menswear:
A smart collection of loose fabric in 7-meters packing with unique colors is available in the following fabric qualities: Latha, Poplin, Cambric, Satin, Leno cambric, and embroidered latha, Khaddar, Dobby and Leno. In addition to this unstitched collection, the company also has ready to wear for men.
15
http://www.ideas.com.pk/html/monogramming_embroidry.htm
Women's wear: The company has a diversified range of clothing available for ladies of all ages. Also there are some smart kurtis and casual tops available. The fashion line for women comprises of finest quality fabrics for each season. The summer and midsummer collections have an exquisite range of fine quality printed cotton lawns, voiles, 100% silk chiffons with jacquards and embellishments, embroidered cottons and fine quality yarn-dyed fabrics, while the winters fabrics to dress up the women of today
bring the best of printed linen
Product performance (IDEAS) Forecasting for next 3 quarters: Net cash used in/generated
from
operating activities
329,39 1-Mar-07
4 205,02 1-Sep-07 1-Dec-07
8 20,433 -853,74
1-Mar-08
5 -1,132, 1-Sep-08
270 -451,26 1-Dec-08
4 Forecasted
-209,4 1-Mar-09
28 -655,1 1-Sep-09
94 -812,4 1-Dec-09
26
Analysis of Projections: The graph shows a downward trend in projection. This is not because the company has a decline in sales; rather the company is involved into more and more expansion of its operational units in Pakistan. Hence more money is spent on reinvestment thereby showing a negative trend of profits. On the other hand the
company also right off a loss of 105million Rs due to money swap issue arising due the depreciation of Rupees vs. Dollar. Dollar. But it can be clearly seen from the sales itself that the revenues are increasing each year due to higher customer demand and the strategic product portfolio offerings in this Retail outlet for its target market audience.
Corporate Strategy Vision “Ideas® strives to be an international brand that cares for its customers and fulfills their home and personal needs. Consumer and professional channels will recognize us as the leader in exclusive, high quality, modern designs as well as impeccable service with courteous, informed and well-groomed sales consultants. Our aim is to provide a distinctive cozy shopping environment with attractive décor, a consistent availability of high quality products and new product innovations.” The vision of Ideas begins with an inspiration of being an international brand. This is a symbol of their growth plan. They are not only focusing on expansion in land but their vision clearly clearly states their future plans of going internationa internationall with their brand. So, we expect the international expansion as one of their major growth plan. It is also stated in their statement that they want to build and image in the minds of their consumers that they give their consumers utmost priority and value. This is both associated with the experiential brand perception (the brand name Gul Ahmed) and the real products itself. Another major focus they have laid upon in their vision is the relation that they have with their customers and professional channels. That means that this statement is not for the consumers only but for anybody who is directly or indirectly related to Gul Ahmed. Their main focus is also on the employees and staff that they have which signifies that they train and guide their staff and employees well, to help the customers when they ask for. Your Your employees are the face of your organization or in this case the retail store, it is the service and helpfulness of the staff that would
mak make the the expe experi rien ence ce of the the cust custom omer er worth worthwh whil ile. e. They They also also ment mentio ione ned d the the import importanc ance e they they give give to qualit quality y and innova innovatio tion; n; this this is true true becaus because e they they offer offer services (customization) that no other store offers presently. presently. The vision statement of the Ideas follows a holistic approach. It shows their concern not only for their customers but also defines their growth plans, employee training and concern for quality and concern. So, they have put in a nut shell all which the company believes in and gives importance to in simple words for everybody to understand it and know Ideas better.
Financial Outlook:
Growth Growth rate:
Initial year 2003 & Final year 2008: Y=Y°×(1+G)t 11650=5448(1+G)6 116505448=(1+G)6 log2.13=log(1+G)6 0.7566= ln(1+G) G=0.134 or 13.4% This shows significant growth rate over the years from 2003 till end of 2008.
Product Strategy Target Market & customers PLACEMENT
Ideas is a store by Gul Ahmed and therefore it follows exclusive distribution. The products by Gul Ahmed are available at its store that is located in the major cities of Pakistan like •
Karachi
•
Lahore
•
Islamabad
•
Hyderabad
At these stores customers get the entire range of Gul Ahmeds products including home products, gifts and personal wear. Along with its physical presence it has also maintained its online shopping facility for its consumers. The consumers can log on to the website and can order online. The online presence has helped it gain the international consumers and in this way it has buit has brand internationally.
PROMOTION Ideas follows integrated marketing communication in which it uses a number of advertising mediums to communicate its personality and positioning to the consumers. Its IMC includes the following advertising mediums •
Billboards
•
Banners
•
Magazine
•
News paper
•
Internet
Ideas has its own magazine that it uses to communicate its new offerings to its target market. The magazine is published twice a year with the changing variety due to the change in the season. Complete information is given with images about its product range including home products, gifts and personal wear. Different celebrity endorsements are used to enhance the effectiveness of the brand. It has also been given the title of SUPER BRANDS in Pakistan. Billboards are used to increase the brand visibility in Lahore, Hyderabad, Karachi and Rawalpindi. Competitors have also placed billboards. New happenings are mostly communicated through banners and newspapers. It has also maintained its online presence through its website which also offers subscription and the consumers are updated through mails also. Ideas also care about its corporate social responsibility. It has taken steps to make sure that the environment remains clean. For this the company has installed a state of art water recycling plant to biologically treat its processing waters and gas turbine unit to produce energy at a low carbon emission. Some of the areas that they focus include: •
Re-using water
•
Re-using energy
•
Adopting efficient ways of producing energy
•
Disposing industrial water after proper filtration treatment
PLC & BCG
BCG:
Product Theme and Pricing Brand Elements analysis:
The colors: The logo of “ideas” is very straightforward and simple. The use of only two colors which synchronize in effortlessly depicts the fact that it is kept simple. The color green is symbolic of eternity, family, harmony, peace, exclusivity etc. these are important characteristics of the brand. For e.g. providing a wide range of accessories fulfilling the needs of a broad target market from infants to adults, men women etc. it stands out as a brand meant for all. Moreover the prices are exclusive. Not everyone can afford to buy the products offered by “ideas”. Looking from another perspective a subliminal message that the brand might want to communicate to its audience can be that it is a nationalist brand. As both the colors are of our national flag. One Criticism however can be that the colors lack in innovative appeal. These two colors are seen together quite a lot and the consumer might complaint that there’s not much new to see. Probably the emblem taken from the parent brand i.e. Gul Ahmed could have been colorized. This is because when we go through the entire product range, we as a general target audience come
across a lot of vibrant and striking colors and so expect that to be revealed in the logo.
The Text: The main text which is the brand name is in bold format. This is an indicator of strength which might be in any of their core competency particularly quality. Variety and exclusiveness are some of the other strengths. The appeal of the text is quite bubbly. “by Gul Ahmed” written in the end serves two purposes; •
Firstly it shows synchronization with the parent company
•
Another important thing that it should be concerned with is that sometimes sub brands come to much under the influence of the umbrella brand to the extent that their original personality is underplayed. So it should take care of this fact for future.
The symbol: There are two symbols in the logo. Firstly there is a pattern of petals taken from Gul Ahmed’s logo. This is fair enough as Gul Ahmed is the founder as well as the umbrella brand and association at any point in time cannot be denied. The other symbol is “®” which ensures that it is a registered company with all rights reserved.
PRICE The pricing strategy for any brand is a bit high which is also justified being a brand. The pricing strategy at Ideas is exclusive as it has been positioned as an exclusive brand for the consumers. After complete market analysis, the marketing department at ideas has segmented its market and targeted the upper and elite class for which the high prices are fair enough. They also charge higher prices when
the demand of a specific product is very high. The target market pays for the value that they desire from their brand and describe their personality. Gul Ahmed has positioned itself as a high quality product and therefore the prices are very high. The brand uses its high price to signal high quality. Gul Ahmed along with its exclusive pricing also follows competitive pricing. The prices of Chen One, Bareeze and Ideas is almost the same in each product category. Ideas also offer discounts at the end of every season. The discounts are usually given twice a year for a specific period of time that is almost a month time. The discounts are given according to the demand for each product category like more discounts on less demanded products to trigger sales of those specific products.
Product Roadmap Growth in apparel and retail industry has led to a farfetched demand and a gap in the market for high quality products that meet the needs of a specific segment in the urban centers of Pakistan, who are willing to pay more for extra exclusive designs and product offerings in this regards. With a clear plan for future products in apparel and clothing industry, Gul Ahmed led an initial round of funding and began to expand the company into its retail outlets i.e. IDEAS. As they began to follow-on rounds, a potential driver in the market opened a further niche’ i.e. their branding may apply to other sectors, particularly the men’s wear, furniture and cosmetics. Once this switch was made, the growth of IDEAS became fruitful, because the market was large and growing, and the product direction was clear. The current fiscal year 2008-2009 is expected to be difficult due to uncertainties and discouraging economic scenario. • Domestic economic slowdown • All time high inflation • Phenomenal increase in borrowing cost • Unprecedented increase in gas tariff • Increase in the minimum wage by 30% • Continuous decline in the value of Pak Rupee • R&D support has not been extended by the Government beyond June 30, 2008 • Adverse economic conditions, looming recession and banking meltdown in the developed world and worldwide economic gloom
Their regular and aggressive modernization and upgrading of production facilities and the strong local presence with the newly developed retail base will help in riding through this rough period. In this difficult environment they need to intensify their efforts to optimize costs without compromising quality. They need to be aggressive, focused and need to be innovative in marketing including retail outlet expansion to extend their customer reach. They also need measures to reduce large exposure in a single area. So through enlargement of the sales mix they will be less exposed to risk and a more diverse sales mix will lead to less dependence on a single area. Thus these measures would also give them more flexibility and have ample opportunities to maneuver to generate profits both through a combination of economies of scale and flexibility.
Quarterly Deliverables In this regards, IDEAS need to improvise its home improvement product category. This is so because of varying demands in different season, especially in winter when the demand for dowry is high due to higher rate of weddings. Therefore IDEAS need to strategically forecast its quarterly deliverables that are required when needed and as per demand inflation.
Products and Features More products are needed to be included in the men’s fashion wear category and Gul Ahmed through IDEAS can clearly hedge upon to a high demand category of shoes and leather apparel too. This would further expand their product portfolio and hence through proper branding techniques, it will enable IDEAS to outshine its competitors such as ChenOne and Bareeze’
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•
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