Apex Final 2

Dealing With Competition In Readymade Wear Industry
Table of Contents
Executive Summary...........................................................................................................5
Men’s Wear..................................................................................................................6
Madura Garments.........................................................................................................6
Strategies for Market Leader.......................................................................................6
1. Introduction....................................................................................................................8
1.1 Changing Consumer perceptions..............................................................................8
RTW Revolution ..............................................................................................................8
The Branded Wear Market..............................................................................................9
2. Porter’s Model..............................................................................................................10
..................................................................................................................................10
2.1 Segment rivalry........................................................................................................11
2.2 Threat of new entrants.............................................................................................11
2.3 Buyer power.............................................................................................................12
2.4 Threat of substitutes................................................................................................12
2.5 Supplier power.........................................................................................................12
3. Industry Concept of Competition...............................................................................13

3.1 Number of Sellers and degree of Differentiation....................................................13
Pre 90s........................................................................................................................13
Post 90s......................................................................................................................13
Entry, Mobility and Exit Barriers..................................................................................13
Entry Barriers.............................................................................................................13
Mobility Barriers:.......................................................................................................14
Exit barriers................................................................................................................15
Cost Structure................................................................................................................16
Degree of Vertical Integration......................................................................................17
Backward Integration.................................................................................................17
Forward Integration...................................................................................................17
Outsourcing................................................................................................................17
Degree of Globalization................................................................................................18
4. Market Concept of Competition.................................................................................19

Basic need..................................................................................................................19
Secondary need..........................................................................................................19
5. Segmentation of Readymade Wear Market .............................................................20
Marketing Management 2 Application Exercise

5.1 Women’s Wear.........................................................................................................20

Size of Market............................................................................................................20
Problems associated with women’s wear..................................................................20
Factors influencing buying behavior of women........................................................20
Market Segments.......................................................................................................21
Perceptual Map of Women’s Wear............................................................................23
5.1.1 Major Players in Women’s Wear Market.........................................................25
5.2 Kid’s Wear...............................................................................................................26
5.3 Men’s Wear.............................................................................................................29
Size of Market............................................................................................................29
Perceptual Map of Men’s Wear......................................................................................31

FORMALS SEMI FORMALS CASUALS.........................................................31
6. Overview of major players in men’s wear ................................................................32

6.1 Madura Garments...................................................................................................33
Company Growth.......................................................................................................33
Brands of Madura Garments......................................................................................33
Some of the other brands of Madura Garments are...................................................36
Current Scenario........................................................................................................37
6.2 Arvind Mills.............................................................................................................37
Brands of Arvind Mills..............................................................................................37
History........................................................................................................................39
1980-1993: Launch of Flying Machine –Market Broadening...................................39
1993-1997: Launch of Arrow - Frontal Attack..........................................................39
1997-2002..................................................................................................................40
Competitive Position: Favorable................................................................................40
6.2.1 Market Challenger Strategies of Arvind Mills vis a vis Arrow........................41
6.3 Raymonds................................................................................................................43
Brands of Raymonds..................................................................................................43
History........................................................................................................................43
Reaction pattern: Tiger Competitor...........................................................................44
Entry Level Strategies................................................................................................44
Marketing strategies adopted by Raymond’s.............................................................45
Challenges .................................................................................................................45
Marketing Research results by Lintas........................................................................46
6.4 Indus League...........................................................................................................48
History........................................................................................................................48
Salient Features..........................................................................................................48
Brands .......................................................................................................................48
Company’s strategies.................................................................................................49
The future...................................................................................................................52

7. Strategies of Madura Garments.................................................................................53

7.1 Launch and Entry Strategy......................................................................................54
Pre 1989.....................................................................................................................54
1989 – mid 90s: Market Challenger...........................................................................54
Mid-90s onwards: Market Leader..............................................................................54
Emotional Positioning Strategy.....................................................................................56
7.3 Retail Strategy.........................................................................................................57
Operational Strategies...................................................................................................58
7.5 Strategy framework for a Market Leader................................................................59
7.6 Future Strategies for Madura Garments.................................................................63
7.6.1 Analyzing Current Position...............................................................................63
7.6.2 Choice of Target market...................................................................................64
7.6.3 Strategies for new market entry........................................................................65
8. Unorganized market....................................................................................................73
8.1 How they bleed the organized sector?.....................................................................73
8.2 Strategies to handle the unorganized sector:..........................................................74
Presently followed strategies.....................................................................................74
Suggested strategies...................................................................................................74
Appendix 1: Segmentation in Global Apparel Market................................................75
Appendix 2: Timeline of major brands..........................................................................76
Appendix 3: Levels of Competition................................................................................79
Appendix 4: Results of ORG MARG Survey................................................................80

Branded Womens Wear.............................................................................................80
Appendix 5: Untapped Opportunities............................................................................83

Saris............................................................................................................................83
Salwar Kameez..........................................................................................................83
Maternity wears........................................................................................................83
Lingerie and Intimate Clothing .................................................................................84
Children’s Wear.........................................................................................................84
School uniforms.........................................................................................................84
Infant Clothing...........................................................................................................84
Bibliography.....................................................................................................................86
WebLinks.......................................................................................................................86

Executive Summary
Indian apparel industry is estimated to be worth over Rs 43,000 crores. The ready to wear
segment as a subset of the whole industry is pegged at 22%. The branded segment within
this ready to wear industry holds a meager 20% market, with the majority 80%
dominated by the unorganized sector. Readymade garments are expected to fetch Rs
30,000 crores during 2001-2002.
Porter’s analysis of the industry reveals that there is very intense rivalry in the
industry; buyers are in a strong bargaining position whereas the suppliers are not. The
threat from new entrants is high but the threat from substitutes is considerably low.
Pre 90s: In the pre-1990 era, the ready-to-wear category was not evolved and people
preferred to buy cloth and have it stitched, by tailors, according to customized fittings.
Few textile giants like Raymonds, Bombay Dyeing, S Kumar’s, Mafatlal etc were the
main industry competitors in this period.
In the late 80s, the old economy giants sensed a change in consumer aspirations
and made a drift towards the readymade wear segment. Raymonds launched Park Avenue
and Bombay Dyeing came out with Vivaldi. In 1989, Madura Garments became the first
company to bring in a foreign brand, Louis Philippe, into the Indian market.
The 90s: With liberalization and improved standards of living, this period saw the
emergence of a large number of brands in the ready-to-wear category. New market
leaders like Madura Garments and Arvind Mills cashed on the changed consumer psyche.
In India, the readymade wear market is highly fragmented due to the presence of a large
number of brands and a huge unorganized market. The current analysis is based on the
segmentation of the market into 3 categories viz. Women’s, Kid’s and Men’s wear. The
men’s wear market has been dealt with in details for the purpose of competitive strategy
analysis.

Men’s Wear
The total men’s wear market in India is pegged at Rs.19, 800 crore. It contributes a little
over 46% of the total apparel market. Out of this, men’s ready to wear clothing
constitutes approximately Rs. 11, 000 crores. The branded segment contributes Rs. 5, 300
crores. The growth rate of this segment for the year 2000-01 was 21.7%.
Numerous brands have come into this segment leading to intense competition and
a lot of cluttering. For the purpose of analysis, the men’s wear market has been
segmented mainly into 3 categories viz. formals, semi formals and casuals. These are
further sub divided on the basis of their perception as premium, mid priced and economy.
The major players in this category are Madura Garments, Arvind Mills,
Raymonds and Indus League. There are also a large number of players with a limited
range of apparel like Zodiac, Color Plus, Benetton etc. The competitive strategies
employed by Arvind Mills, Raymonds, Indus League have been discussed in the report.
Madura Garments
Madura Garments is presently the overall Market Leader in the branded wear market
with leading brands like Louis Philippe, Van Huesen, Allen Solly, Peter England,
Elements, San Frisco and Byford. Its major competitors in the premium formal shirt
category are Arrow (Arvind Mills), Zodiac, Park Avenue (Raymonds) and Givo.
The strategies employed by Madura Garments, which enabled it to reach the
market leader position have been analyzed from various perspectives. The launch and
positioning strategies of all its brands along with the unique emotional aspects that each
brand touches upon has been studied in detail.
Strategies for Market Leader
Based on the strategies employed by Madura Garments and other brands, a general
framework of the strategies applicable to a market leader has been arrived upon. The
appropriateness of the strategies for the market leader and challenger are evaluated
depending on the following parameters:

• Primary objective of the firm.

• Market size and its customer’s characteristics.
• Number and strength of competitors in the market.
• Firm’s own characteristics, resources and competencies.
Future strategies for Madura Garments
Though Madura Garments is the overall market leader in the readymade wear industry, it
is a challenger in some segments. The future growth strategies in these segments as well
as the new markets, which have good growth potential, have been chalked out. The
parameters based on which these strategies are determined remain the same as described
above. The potential for expansion in the economy segment has also been analyzed with
reference to the strong presence of unorganized sector.

1. Introduction
The total Indian textile market encompassing fabric manufacture and ready made
clothing is estimated to be Rs. 87,000 crores. The ready to wear industry as a subset of
the whole textile industry is pegged at 22% of the total industry size. The branded
segment within this ready to wear industry holds a meager 20% market share. The current
market share of branded apparel, although currently very low, is now picking up pace and
growing at around 10 – 15 % per year.
The apparel industry is one of India's largest foreign exchange earners, accounting
for nearly 16% of the country's total exports. The Indian apparel industry is dominated by
sub-contractors and consists mainly of small units of 50 to 60 machines. The supply base
is medium quality. It has been estimated that India has approximately 30,000 readymade
garment-manufacturing units and around 3 million people are working for the industry.
1.1 Changing Consumer perceptions
The consumer today wants much more than just a garment. Today he looks for a wider,
complete range coupled with round the clock availability. Price, quality and perceived
value are becoming increasingly important to consumers. If these are not carefully
balanced, loyalty to the store or a brand quickly diminishes. The consumer wants new
products at shorter intervals , shopping ambience, faster service and above all
convenience.
RTW Revolution
Traditionally, Indians preferred custom-made clothing and the concept of ready-to-wear

is a relatively recent one. The customized tailoring outfits have always been a major
source of clothing for the domestic market. In the past, the customized tailoring units
were localized to the township or city that they were located in and catered exclusively to
domestic demand. Consumer awareness of styling issues and the convenience afforded by
ready-to-wear helped the RMG industry make small inroads into the domestic market in

the 80s. The growth of the RMG industry in subsequent years was fueled by a growing
share of younger consumers in the spending population, who are most open to converting
to ready-to-wear. Increasing exposure to various media also provided an impetus in terms
of greater access to fashion trends from outside the country. At the manufacturing end,
improvements in the availability and quality of fabrics for apparel assisted in catering to
the growing demand.
The Branded Wear Market
The branded wear market has shown a substantial growth (about 20percent per annum) in
recent times and is expected to generate a revenue of more than Rs. 9000 crore in this
fiscal,( about 30 percent of the total ready-made market).

2. Porter’s Model
New Entrants
Brand recognition essential

Extensive distribution needed
Huge size of market with
evident gaps
Liberalization and multi-fiber
agreement
HIGH THREAT OF
ENTRANTS
Buyers Industry Competitors Suppliers
Price conscious market Presence of large number of Switching costs of suppliers

Relatively undifferentiated brands in each segment and firms in the industry is
product Frequent price and low
Highly involved consumer Advertising wars Possibility of backward
Customer responds quickly to Large unorganized sector integration
purchase convenience
HIGH BARGAINING POWER HIGH INTENSITY OF LOW BARGAINING POWER

OF BUYERS RIVALRY OF SUPPLIERS
Substitutes
Ready to Stitch for primary

needs
Accessories for secondary
needs
LOW THREAT OF
SUBSTITUTES

2.1 Segment rivalry
The ready made industry frequently witnesses price and advertising wars by all the
companies in order to gain a higher market share. The garment industry is characterized
by high profit margins. The market as such is highly segmented and there is an existence
of large number of brands in each segment. Each company is facing intense competition
from its rivals present in the segment. Adding on, continuous modifications and
innovations are evident in the trends and fashion perspective and all companies are
fighting hard to keep up with the pace. This industry also witnesses a substantial
investment in formulating strategies to edge ahead of its rivals.
2.2 Threat of new entrants
The garment industry runs on a local as well as national scale with equal vigor. While the
entry barriers for local garment manufacturers is not high, the companies operating on a
much higher scale have to have an extensive distribution network and also have to work a
lot in gaining brand recognition among the potential customers.
The Indian market is very huge and a large part of it is untapped. Many small-
scale companies have come up in the casual and semi-formal range of clothing competing
in terms of variety and low costs.
The foreign MNCs are eyeing the Indian market with its large population and
increasing buying power as a very potential expansion base. With the liberalization
policies carried out by the government and especially with the recently signed multi-fiber
agreement, the entry of foreign brands has become easier. Chinese garment
manufacturers are planning a major attack on the Indian market with their price
advantage. A hoard of brands from the US is ready to enter the western wear segment and
grab its market share.
Thus overall, the threat of new entrants in the industry is very high. The segment
has high, unstable returns.

2.3 Buyer power
The buyer power in this industry is high. The product is relatively undifferentiated in
terms of primary usage. The customer is very price conscious and has substantial
bargaining power as the industry runs more on volume sales. The buyer is highly
involved in the purchase of a garment and the purchase is again dependant on the his
mood and behavior. He has the tendency to buy responding primarily to good price or
purchase convenience.
2.4 Threat of substitutes
The substitutes to the ready to wear industry can be the fabric manufacturers who
produce ready-to-stitch clothing. These include the old economy textile manufacturing
giants like Bombay Dyeing, Mafatlal, Digjam etc. But with increasing buying power and
awareness, the young Indian consumer is rapidly shifting away from the ready-to-stitch
clothing and opting for readymade wear. This has resulted in reducing the threat from the
substitutes.
2.5 Supplier power
The suppliers in this case can be classified in three groups:

1 Fabric manufacturers: The fabric is mostly procured globally and the number of
suppliers is very large. The entire lot of the fabric for one brand is outsourced
from one supplier to ensure uniformity. The supplier power is not high.
2 Suppliers of trims: The accessories like buttons, zippers, tags etc are all procured
as a lot for the whole year in one go. The contract is given to one supplier and
generally there are no problems faced at the time of delivery.
3 Tailors: Generally the company appoints franchised tailors; exclusive to a brand
but numbers is not a constraint. Hence they do not have much power.

3. Industry Concept of Competition
3.1 Number of Sellers and degree of Differentiation

Pre 90s
The pre-1990 era depicts the age of old economy in case of the garment industry. This
age was marked by the rule of fabric manufacturers. The ready-to-wear category was not
evolved and people preferred to buy cloth and have it stitched by individual tailors
according to customized fittings. Few textile giants like Raymonds, Bombay Dyeing, S
Kumar’s, Mafatlal etc were the main industry competitors. The product, fabric in this
case, was partially differentiable in terms of quality and price. The market structure was
that of a differentiated oligopoly.
There were a few well-known brands of readymade clothing like Zodiac but were
not able to create that much of an impact. But Zodiac managed to showcase the huge
potential ready to be grabbed in India and paved the path for entry of other ready-made
brands in India. The old economy giants sensed a change in consumer aspirations and
made a drift towards the readymade wear segment. Raymonds launched Park Avenue in
1986 and Bombay Dyeing came out with Vivaldi in 1988. In 1989, Madura Garments
was the first company to bring in a foreign brand, Louis Philippe, into the Indian market.
Post 90s
This period saw the arrival of a large number of brands in the ready-to-wear category.
With liberalization and improved standard of living, the people have shifted to ready
made clothing. New market leaders like Madura Garments and Arvind Mills cashed on
the changed consumer psyche.
Entry, Mobility and Exit Barriers

Entry Barriers
1. Distribution costs: Companies mostly employ 2 or 3 tier system in distribution of
garments in India. The company incurs the cost of delivering goods to retailers and
dealers. The distribution network is a very critical factor for sales in this industry and
all companies strive very hard to build up an extensive network.

2. Brand recognition: In the organized segment brand image plays a very important role
in the consumer purchase decision, as the customer is highly involved in the
purchase. A new player will need to establish uniqueness of its product in the
consumers mind to lure consumers to buy them. Companies incur a high cost during
brand building exercises.
3. Capital: Companies have to invest capital in setting up their manufacturing bases.
Along with that a high capital has to be invested in retail activities if the companies
opt for establishing exclusive showrooms and factory outlets to sell their product.
4. Knowledge of Fashion Concept and Cycle: While entering into any segment of this
industry, it is important to first have knowledge about the fashion and trends in vogue
currently and to identify for how long would this fashion style hold.
5. Product Differentiation: To enter into the market, the company has to be able to
provide a product offering which can differentiate it from other competitors. This
differentiation can be in terms of tangible aspects like quality, price etc or can also be
in terms of brand projecting a unique image.
6. Knowledge of Regional Preferences: Indian market is highly differentiated in terms
of regions. The people have varied preferences and tastes across regions. Hence it is
very important to understand the customer behaviour and preferences of the zone
wherein the firm is operating.
Mobility Barriers:
The companies normally face the following barriers while shifting towards a different
market segment from their existing segment.
1. Distribution: For a company wishing to shift from one segment to another e.g.
popular to premium, it has to make a change both in the type and number of
distribution channels. E.g. A company operating in the casual economy garment
industry would have been focusing on a 3-tier distribution system, but when it wants
to enter the premium market, it has to invest in opening exclusive showrooms and
other distribution channels.
2. Brand Perception: If the segment being entered is relatable to the segment in which
the company already is in, then its brand can be instantly recognized in the new
segment due to similar image fit. But otherwise, the firm has to invest again in

building a name for its brand in the entered segment. E.g. When Allen Solly entered
the women’s official wear market, its already established image of semi-formal wear
carried on.
3. Existing Competition: A company has to analyze the current market potential and the
market share of all firms already operating in the target segment. E.g. When Madura
garments wants to enter the children’s wear market, it would face a heavy
competition from existing firms like Osh Kosh B’gosh, Weekender Kids etc.
4. Customer Preferences: The knowledge of current fashion in the targeted segment as
well as the customer preferences in the segment have to be analyzed and compared
with the existing product mix to infer the changes required in the product offering
before entering into that segment
5. Technical Knowledge: Entry into some highly niche markets like institutional wear
requires some technical knowledge of the requirements of that niche market. E.g. the
manufacturer has to understand the situations in which the Indian soldiers have to
work before choosing the fabric and stitching style for their clothes.
6. Sourcing: The firm has to start from the initial phase of identifying the institutions for
sourcing in that new segment. Each segment has its unique requirements for which
new sources need to be identified.
7. Import/Export Duties and sales tax: Import duties are also applicable for procuring
raw material and exporting product. Companies would not prefer to go to an export
production business due to high duties.
8. Quantity Restrictions: Restrictions are imposed on the quantity of goods exported to
various countries.
Exit barriers
The following are the barriers against a firm that tries to exit from the industry,
1. Franchisees: A company appoints a number of franchisees for retailing as well as
manufacturing purposes. Contractual obligations of the company with dealers or
distributors will require outflow of funds in case the company wants to exit the
market.
2. Sunk capital costs: Along with the manufacturing units owned by the firm, the costs
incurred in marketing, brand building and establishing distribution channels are also

sunk. Distribution channels like exclusive showrooms involve high capital, which
would pose as a liability to the company while exiting.
3. Inventory: This sector produces a high amount of inventory in all its stage of
production. The industry average of stalking inventory of finished goods is 2 months.
Disposal of inventory would pose a problem to a company offering to exit the sector.
The exit barriers in the segment are also low as compared to other sectors. This sector
invests less on manufacturing and large factory establishments. There is a growing trend
of outsourcing the manufacturing, which further helps in reducing the capital stuck up in
the process.
Cost Structure
The costs incurred by a company operating in the garment industry can be split up in the
following structure:
1. Cost of raw materials: the major cost incurred in the operation is that of fabric
procurement. The cost of fabric is 65-70% of total manufacturing costs is the fabric
cost while 10% is the cost of accessories and trims.
2. Dyeing and Printing: the cost of these activities comes to 4-5% of the total
manufacturing cost.
3. Cost of Cutting, Manufacturing and Trims (CMT): is 8-10% of the total cost.
4. Finishing and Packaging: is 5% of total mfg. cost
5. Distribution Costs: 15% is the total distribution cost out of the manufacturing cost.
Though no concrete data is available regarding the dealer/ distributor margins
prevalent in the industry, wide variations are reported. These margins range from 20-
25% across the range of brands. The quantum of the margins is determined to a large
extent by the marketing strategy of the brand. These costs form a substantial part of
the cost structure of the company.
6. Tax Structure: The tax being paid to the government is divided in terms of excise
duty and octroi duty. Normally the excise duty is pegged at 12% and 15% of the total
sales have to be paid as octroi duty.

7. Promotional/Marketing and Brand Building Costs: Brand sensitivity has grown, and
Yuppies are conscious of being seen in a brand they identify with. Retaining past
mind share and winning more, though, is an ongoing effort. Ad agencies have a large
role to play in ensuring the consistency of the brand personalities and companies are
paying astronomical amounts to gain visibility. With a budget of Rs 39 crore in 2000-
01, Madura spends some 12 per cent of its turnover on advertising.
Degree of Vertical Integration

Backward Integration
A company can follow the backward integration strategy by foraying into the
manufacturing of its garments and production of the fabric itself. The move is to get an
edge over the competitors in terms of quality and pricing. Also the company does not
have to rely on the other manufacturers for delivery on time. But this is not preferred
nowadays because it is very capital intensive and companies are moving towards
converting themselves into an asset-free model and are focusing more on branding and
distribution. The costs of establishment of mills as well as dyeing, printing and finishing
units involve a huge investment of capital. Hence companies do not prefer to opt for
backward integration. The current trend is that the companies are moving towards an
asset free model.
Forward Integration
A company can also follow forward integration by venturing into the marketing and
distribution of their own as well as other brands. We are thus seeing an increasing
number of players, laying stress on forward integration by taking the initiative of selling
its own product thru its own retail outlets. Arvind mills started off as a textile
manufacturer but is now also focusing on distribution and branding of its products as well
as bringing in new brands from US.
Outsourcing
The current trend prevailing in the industry is that companies prefer to outsource the
manufacturing of garments rather than producing them in-house. This enables them to

maintain their focus on branding and distribution as core activities. And also reduces the
capital invested in business.
Degree of Globalization
The industry is highly dependent on events happening globally. Normally in India, all the
companies follow the fashion trends happening in other fashion conscious countries like
US and all international fashion shows. They have to compete against local as well as
globally recognized brands. There as been a growing trend in intra-regional garment trade
among the countries in North America, Europe and East Asia, which has begun to impact
the exports from other developing countries regardless of the price advantage of the
latter. Such growth has been largely motivated by:
1. Proximity to the markets in developed countries, where the garments assembled from
the material inputs from these countries can be exported.
2. Regional trading Blocks i.e. EU and NAFTA.
With the liberalization, the competition has intensified on global scale-for example in
child market there was absolutely no branding, but Osh Kosh B’gosh entered in to this
segment and started the trend of branded wear in children segment.

4. Market Concept of Competition
Basic need
The ready made wear industry caters to the basic need of man for clothing. This basic
need of clothing can also be satisfied by the ready-to-stitch industry. The customers can
buy cloth from the market and have it stitched by private tailors, customized to their
respective fitting and comfort. The textile and fabric manufacturing firms like Mafatlal,
Bombay Dyeing etc had control of a large chunk of the market before all the foreign
ready-made brands came into India. Even today the readymade wear industry faces a
substantial bit of competition from this sector.
Secondary need
The other reason why a person prefers to wear one special brand is because he sees his
personality in sync with the brand. He wants to portray a certain lifestyle or image
statement, which he feels, should be delivered through the brand of cloth he wears. This
kind of social need can be fulfilled by many other product categories. So the garment
industry faces competition from watch manufacturers, jewelry makers, cigarettes,
sunglasses, the automobile industry etc. in terms of luring the person to buy clothes rather
than invest in buying some other commodity (Appendix 3).

5. Segmentation of Readymade Wear Market
Globally the apparel market has been segmented as shown in Appendix 1. In India, the
readymade wear market is highly fragmented due to the presence of a large number of
brands and a huge unorganized market. The analysis is based on the segmentation of the
market into 3 categories viz. Women’s, Kid’s and Men’s wear. The report does not deal
with the unorganized sector.
5.1 Women’s Wear

Size of Market
The total women’s wear market in India is pegged at Rs.16, 000 crore. It contributes a
little over 37 percent of the total apparel market. However, women’s wear contributes
only 8 percent of the branded apparel market, in spite of the fact that there exists a huge
market for ready to wear in this segment. The branding that has been done till now is in
synthetic sarees and extensive branding has been done by big stores like Nallis’. There is
negligible branding penetration in western wear and Indian ethnic wear segment.
Problems associated with women’s wear
• Standardization of fits – Women expect customization in terms of fit. Hence a ladies

tailor in every boutique plays a very important role in modifying the fit to the body
shape and the styles of the women.
• Exclusivity: Women in India are not brand driven but functionality driven. Indian
women want exclusive outfits and do not prefer mass produced garments.
• Manageable SKUs – Due to the overwhelming variety of dresses available in the
women’s casual and traditional wear segment, companies find it tough to mass
manufacture and promote all categories.
Factors influencing buying behavior of women

1. Monthly Household Income: There seems to be a high correlation of monthly
household income with the level of westernization of attitudes. Most of the premium
brands target financially independent women with monthly income greater than Rs

8000. The lower income households usually show a preference towards Indian
clothing, and this demand is catered to by the unorganized sector.
2. Age: Most brands target women in the age group 18-30, since the women in this age
group is more brand conscious. Most of the western formal wear is targeted at women
in the age group 22-30, as this is the normal age for working for Indian women. The
everyday wear as well as the party wear, however, is targeted for a younger segment
starting from around 15-22.
3. Working Place: The ambience and the working environment also determine the type
of clothes a woman buys. Nowadays in most of the metros western wear is acceptable
but in small cities ethnic wear is the preferred choice.
4. Ambience of store: The store ambience and attitude of the sales team are far more
important in women’s wear as compared to men’s wear. Presentation is also very
important.
Market Segments
The women’s apparel market in India may be divided first into the Ethnic and western
wear market. Within these segments, there exist the ready-made and tailored segments
1. Ethnic
a. Sarees
b. Traditional ethnic wear (Salwar Kameez, churidar sets, lehangas etc.)
2. Western wear
a. Formals
b. Casuals
Premium Middle Economy

Western Casual Benetton, Numero Uno
Wearhouse,
weekender
Western Formal Allen Solly
women’s (MD)
Sculler’s Women
(Indus League),

Annabelle
(Pantaloons), Deal
Clothing Company
Ethnic BE (raymonds), Srishti (pantaloons)
1. Ethnic
There is negligible branding penetration in Indian ethnic wear.
 Sarees: Saree is the largest selling women’s apparel item and contribute about 44 per
cent of the total spend on women's wear. At a growth rate of 9 per cent per annum, it
has outpaced the men's and kids wear segments. Sarees fetched about Rs 71 billion in
the year 2001-02 of which 30 per cent was from branded sarees. With about 197
million people going for saree purchases this year the total consumption will be
roughly 315 million pieces. Companies operating in the industry include Garden,
Kunwar Ajay, Roop Milan, Parag, Vipul, Prafful and Vimal. Large saree chains
include brands like Nalli's, Ramesh Chandra Krishan Chandra and La Affair.
 Salwar Kameez: Women's ethnic wear has seen the largest growth among all
women's outerwear categories. In 1997-98 its market size was a little over Rs. 25
billion and in the current fiscal this segment is projected at Rs. 35 billion. Indian
ethnic wear comprises 40% of total RTW market, yet no national brand exists. Some
brands like Be from Raymonds and Srishti from Pantaloon have entered into it but
they have found it difficult to give customized service to each and every customer at
their retail stores.
2. Western wear
 Formals: The McKinsey report says that branded Western women swear is about Rs
60 crore at the moment. This segment is trying to take advantage of the increase in
the number of working women in this country over the last couple of years, because it
translates to more women wearing western formals to work.
 Casuals: This segment of women wear has the large number of players. There is lot of
brand consciousness amongst women in this area. The flip side is that the new status-
conscious, brand-aware Indian is not particularly brand loyal; the move is towards
branded wear, not any specific brand. Most of the competitive activity owes to the

smaller players, with a concentration in premium casuals. Casual wear is a new, high-
growth market that gets all the attention. Most of brands that are in this segment are
extension of the mens wear already present in the market. International chains such as
GAP, NEXT and Tommy Hilfiger have also entered into casuals.
Perceptual Map of Women’s Wear

PREMIUM Dealing With Competition In Readymade Wear Industry
Allen Solly
BE
Benetton
(Raymonds)
Scullers
Levis
Annabelle Lee
Pepe
Wearhouse
Deal Clothing
Weekender
MID PRICE
Srishti
ECONOMY
NumeroUno
WESTERN FORMAL
WESTERN CASUAL ETHNIC
5.1.1 Major Players in Women’s Wear Market
Allen Solly (For women) – Mobile defense (market broadening)

Allen Solly introduced the line of ready-made apparel for working women in December
2001. Through this extension, Allen Solly was looking to redefine the concept of
women's wear. Allen Solly has now achieved high recognition as a brand that represents
'unconventional' and 'relaxed' formal wear. The women's wear is positioned in much the
same way as the men's wear is. The original proposition of comfort along with fashion
seems to be underlined.
In case of Allen Solly Women's wear, the company has used target positioning by
focusing on the specific segment of urban, working women. For this strategy to work, a
target position should cause the people in the target to perceive the brand as superior in
meeting their particular needs. Allen Solly is meeting the "utility" need by providing the
Indian women greater choice in terms of the fits available. At the same time, it is
satisfying to the "ego" and the "self esteem" need of the Indian women by emphasizing
the empowerment and independence of the working women in their advertising
campaign.
Allen Solly differentiates itself as a formal wear for Women unlike unisex casual-
wear brands like Benetton and Weekender. The product line represents the
'unconventionality at work place' of the parent brand.
Be: (Raymonds)
Opened in July, with the first Be launch at Delhi, the company is moving ahead with
expansion plans. Raymond’s decision to eschew brand extension and create a whole new
retail brand also implies substantial future investments in brand building. Be: will have to
lure the average buyer of unbranded salwar kameez as well as the boutique shoppers —
both very discerning customers. Just to be on the safe side, Be: has been positioned more
broadly as a "fashion wear" brand, with a limited range of ethnic and western wear for
men as well. It also has an in-house line. This brand constitutes not only western but
ethnic and fusion as well.

Deal Clothing Company

Deal is a women’s wear brand that has been trying to mould western pub wear to the
Indian context. Launched in November 2000, the brand caters to the young college going
crowd. . Currently the brand is being retailed through 55 outlets in Mumbai and Gujarat
with a total retail space of 10,000 sq. ft.
Boutiques
Boutiques cater to niche market and provide personalized service to their clients.
Boutiques have been very successful because of their ability to provide designer wear at
affordable prices and special fitting for every woman. With all these they have moved on
to create thriving operations that together add up to a sizeable chunk of the women's wear
market. The Rs 50 lakhs MonaPali brand, which was available through exclusive stores
in Calcutta, Delhi and Ahmedabad, is now available at Westside stores across the
country.
Retail stores
Retail stores like shoppers stop and pantaloon are coming with their own private brands
especially in women wear. They have wide variety and they have tailors who sit there and
alter the garments according to the need of the customers. These stores have an
advantage as they already have exposure about the consumer preferences. They can take
out different ranges according to their location. A lot of customers who visit these stores
buy premium or mid priced garments. If these stores don’t stock the brands then a big
purchase point for the brands will be lots. But retail chains have to focus and spend on
attracting quality footfalls before spending on their private label promotions. Building
brand-equity is an expensive affair in the readymade garment market. For the destination
stores, conversion of footfalls into purchases is important to get the bottomline right.
5.2 Kid’s Wear
Size of Market
The total size of the kids wear market is Rs 6,000 crore. Out of this clothing for boys and
girls contribute 60% and 40% of the total market respectively. The kids wear market

comprises of clothing from infants to children till the age of twelve. The branded segment
constitutes less than 10% of the domestic kids wear market. Giny & Jony and Personality
are the leaders in the domestic industry.
The infant wear market is mostly in the unorganized sector, with only a few branded
products, like those offered by Welfit group.
Reasons for the initial flop of branded wear in kids wear

The foremost reason for all companies not to enter into the kids wear market was that
people had a psychological reluctance of not investing a lot of money in buying a
garment of such small size. Also because kids grow very fast during their younger years,
the clothes would not be of any use in a short period of time. Thus while the success of
mid price brands like the Rs. 30 crore Giny & Jony unearthed the large untapped
potential of this segment, at the same time, the premium brands like Osh Kosh B’ Gosh
failed miserably.
Re-emergence of Branded Kids Wear market

But the scenario has changed drastically as the social status and concerns of health have
made an influence into the buying behavior of customers. In the current times, the last
thing that parents compromise on is spending on their children. The spending includes
not just tuitions and education-related activity, but also so-called lifestyle expenditure.
Parents want to make sure their children have what every other child has, which is true
even with SEC-C households. Parents want to be contemporary and provide beyond just
nutrition, health and nurturing. Often, parents justify pure indulgence expenditure as
development.
Children these days are not just impulsive decision makers, but informed decision
makers. The clout they wield is tremendous.
Entrance of multinational players

Overseas companies are drawn by the latent potential of the Indian market. Most of the
multinational tie-ups have been for getting the licensing rights of famous cartoon
characters The most significant tie-ups of recent times have been –

 Warner Bros + Weekender kids (from Personality) has acquired the license for
promoting Harry Potter apparel and eight other cartoon characters.
 Hang Ten (US) + Gini & Jony Apparel of Mumbai – for Garfield
 King Syndicate (Australia)+ Pantaloon – for Popeye
 Walt Disney + Pantaloon - for Disney cartoons
 VF Corporation (US) + Arvind Mills – for Healthtex kids wear brand
Available brands
Age group (yrs) Brand Company Price range
0-12 Healthtex Arvind mills 199 to 700
4-12 Lacoste Lacoste 450+
0-8 Adams Adams 200 to 700
4-12 Lee kids (Lee pipes) Arvind mills 695 to 795
4-12 Freelook Freelook 195+
4-12 Weekender kids Personality 200+
0-16 Osh Kosh B’ 400 (average)
Gosh
Marketing Strategies
Advertising is primarily targeted towards the kids. The companies try to focus on
channels like “cartoon network”, which have a high viewership amongst children. The
brands also take innovative shapes and colors. With little to differentiate the various
offerings in the market, the design teams are exploring ways to make the products a little
different.
Pricing is a matter of important concern as the kids wear segment is mostly
dominated by the unorganized sector. In India, people are still interested in buying the
kids’ stuff from the footpath. The branded products are mostly sold in the range of Rs
200-Rs 700.
The domestic market is still evolving. It is now at a stage branded mens wear
segment was at ten years ago.

Relevance of value pricing

The kids wear segment is dominated by the unorganized sector. The typical
Indian psyche is that price of a product depends on its size; therefore they can’t accept
high prices for kids wear. The typical reference price in the minds of the Indian customer
is 150 –200 Rs.
If marketers could provide value at a lower price point consumers are likely to
upgrade to these products. The consumer should perceive a lower-end offering as better
than the existing substitutes. The manufacturer should however be cautious against the
building up of excess capacities.
5.3 Men’s Wear

Size of Market
The total men’s wear market in India is pegged at Rs.19, 800 crore. It contributes a little
over 46% of the total apparel market. Out of this men’s ready to wear clothing market
size is approximately Rs. 11, 000 crores. The branded segment contributes Rs. 5, 300
crores. The growth rate of the branded men’s wear market for the year 2000-01 was
21.7%.
Growth of branded men’s wear market
6000
5300
5000
Value (Rs. crores)
4000 4000
3500
3000 3000
2000
1000
0
1998-1999 1999-2000 2000-2001 2001-2002
Year
A lot of brands have come into men’s wear segment leading to intense competition . Due
to the resultant cluttering the identification of the segments has become difficult. This
report segments this market in 4 categories viz. formals, semi formals, casuals and sports

wear. These are further sub divided on the basis of their perception as premium, mid
priced and economy.
Premium Mid Priced Economy

Formals • Madura-Louis • Madura-Peter • Madura
Philippe, Van England • Arvind Mills
Heusen • Arvind Mills- • Regional brands
• Arvind Mills- Excalibur Double Bull
Arrow • Bombay Dyeing (Delhi), Turtle
• Zodiac, Givo, - Vivaldi (Kolkata),
Park Avenue • S Kumars- John Cambridge
Miller (Mumbai) and
Serro (Chennai),
Dash Cambridge,
Double Bull, Dash
Semi-Formals • Madura- Allen • Indigo Nation
Solly • Raymonds-Park
• Arvind Mills- Avenue
Arrow • Provogue
• Color Plus, • TNG
Provogue
Casuals • Madura • Madura- • Madura
• Arvind Mills- Elements • Arvind Mills-
Lee, Wrangler • Arvind Mills- Newport
• Levi’s, Killer Flying Machine, • Ruff & Tuff
• Benetton, Ruggers,
• Pepe • Indus League-
Scullers
• Raymonds- Parx
• Free look,
• Warehouse
-Weekender
• Live-in,
• Pantaloons
Crocodile
Sports Nike, Reebok, Adidas, Proline Unbranded
ITC Wills Sport, Duke Regional brands

Perceptual Map of Men’s Wear

Louis Phillipe
Color Plus
Benetton
Zodiac
Allen Solly Lee
Arrow Levis
Pepe
PREMIUM
Van Huesen
Givo
Provogue
Killer
Indigo nation
Provogue
Parx
FM
Scullers Free look
Excalibur
Park Avenue Weekender
John Miller
MID PRICE
TNG Ruggers
Elements
Peter England Pantaloon
Vivaldi Live-in
Double Bull Newport
Dash
ECONOMY
Cambridge
FORMALS
Marketing Management SEMI FORMALS CASUALS
Application Exercise
31
6. Overview of major players in men’s wear
The men’s segment consists of myriad players with each competing fiercely against
others. The major players are Madura Garments, Arvind Mills, Raymonds and Indus
League. Then there are a number of players with a limited range of apparel but which are
into niche segments like Zodiac, Color Plus, Benetton etc. The complete timeline for all
the major brands launched in the market is enclosed as Appendix 2. Based on a survey
conducted by org-marg, the position of various brands is shown in Appendix 4. The
major players in the premium shirt category and there sales figures are as shown in the
figure below.
250
200
150
Sales
100
50
0
Louis Van Zodiac Arrow Givo Park
Phillipe Huesen Avenue

6.1 Madura Garments
Madura Garments is presently the overall Market Leader in the branded wear market.
Company Growth
Year Operating Turnover Shirts Trousers
profit (Rs. (Rs. Crore) (Units) (Units)
Crore)
2000-2001 12.5 325.5 4.7 million 1.2 million
shirts trousers
2001-2002 - 500 (expected) - -
Brands of Madura Garments

Marketing Mix elements and related Louis Philippe
aspects
Product High quality Premium formal and semi
formal shirts launched in 1989
• The Permapress collection
• The Italia Collection
• The Bespoke Collection
• The Protocol collection
Target segment • The arrived, rich, status-conscious man
in the 30 to 45-age group
Positioning • Positioned on the status symbol
platform, use of the upper crest
Price • Basic range: Rs 999 to Rs 2145
• Permapress: Rs. 1895
• Protocol: Rs 2595
• Dress shades: Rs 1495
Promotion • TV & print media
• Sales promotions: infrequent and based
on special events
Competition • Few prominent players like Arrow, Van
Heusen, Park Avenue

Distribution • Exclusive showrooms

• Mega multi branded outlets &
departmental stores
• Online: magiccart.com, indiainfo.com
Marketing Mix elements and related Van Heusen

aspects
Product • Business shirt targeted at the fast-track
corporate executive.
• It was launched in 1990.
• Called as the Master Shirt Maker.
• Very good style, quality and variety
Target segment • The arrived, rich, status-conscious man

in the 30 to 45-age group
Positioning • Very costly and it is perceived as a
social status symbol
• Brand speaks of Masculinity
• Loyal customers
Price • Over 840
Promotion • TV & print media
Competition • Few prominent players like Arrow,

Zodiac, color plus
Distribution • Exclusive showrooms
• Mega multi branded outlets &
departmental stores
Marketing Mix elements and related Peter England

aspects
Product • High quality readymade formal shirt

designed in exclusive company design

studios.

Target Segment • 20-40 year old office going male
belonging to the middle income or the
lower-middle income household with
high aspirations.
Positioning • 'Honest Shirt', that offers the maximum
possible quality at a particular price,
'value brand'.
• Akin to a premium brand at mid-

market price.
Price
• 395 and above
Promotion • Both print and media advertisements.

Advertisements are aimed at driving
home the point of value offered by the
brand to the customer with a focus on
the 'honest prices' offered by the brand
Competition • 'Vivaldi', 'John Miller' and 'Trendz'.
Stiff competition from regional brands
in different regions e.g. 'Double Bull' in
Delhi, 'Turtle' in Kolkata, 'Cambridge'
in Mumbai and 'Serro' in Chennai
Distribution • Multi-branded retail outlets (initially),
now also through few exclusive
showrooms

Marketing Mix elements and related Allen Solly

aspects
Product • High quality readymade semi-formal
shirt

Target Segment • 20-40 year old office going male
belonging to the middle income group.
Positioning • It has been positioned using the concept
of Friday Dressing.
Price
• Around 800 and above
Promotion • Both print and media advertisements.
Competition • Arrow (Arvind Mills), Color Plus,

Provogue
Distribution • Multi-branded retail outlets
Some of the other brands of Madura Garments are

• Elements: It is casual Peter England sub-brand launched in 1999. It is positioned at
the older lot of youngsters.
• Byford: It is targeted at trendy youngster.
• San Frisco: It was launched in 1998. It is positioned as a 'trouser specialist'. It was
launched for fighting Dockers and other new brands for which a dedicated brand was
required. It is also targeted at trendy youngster.

• Elysee
Current Scenario
• President, Madura Garments: Prakash Nedungadi
• In December 2001, a fully-owned subsidiary of Indian Rayon, Aditya Vikram Global
Trading House, acquired the global rights for Louis Philippe, Allen Solly (barring
North America) and Peter England (except in the UK and Ireland) from Coats
Viyella, for a mere $2.3 million.
• All in all, Madura's brands have taken the Indian apparel market higher up the
sophistication curve. Retaining past mind share and winning more, though, is an
ongoing effort. With a budget of Rs 39 crore in 2000-01, Madura spends some 12 per
cent of its turnover on advertising, with HTA handling Van Heusen, O&M handling
Louis Philippe and Alien Solly and Mudra handling Peter England.
• Each brand has a core value, and care is taken to see that the creative portrays the
brand essence. The company uses TV for vivid brand characterization and attitude
portrayal, while print draws attention to other brand properties.
• Madura Garments, after its acquisition by Indian Rayon in January 2000, has placed
special emphasis on retailing along with sprucing up its supply chain management
and product innovation. By the year 2003 the retail presence of Madura Garments is
expected to touch the mark of 200 urban markets in India.
6.2 Arvind Mills
Arvind Mills is presently the Market Challenger in the branded wear market.
Brands of Arvind Mills
Year of Brands Perception of the Brand Price range Competitors

Launch
1980 Flying Jeans and casual wear, Over 600/- -
machine which apparently became
very popular.
1993 Arrow • Etiquette of global
Over 895 Louis Philippe,
Power Dressing Van Heusen,

• Truly American
Zodiac,
Premium-Wear Brand
• Loyal customers Park Avenue
1995 Lee Authentic jeans. American Over 995/- -
aspirational, pseudo, non-
conformist, usage of teen
psychological price barrier.
1995 Newport "Good jeans for less", was Over 499/- -
the motto that ‘Newport’
jeans carried and became
an instant success. Today,
Newport is by far, the
largest selling jeans brand
in India. Mid price
segment.
1997 Excalibur King Aurther’s collection- 595 and Rs695 -
evening wear shirts.
Excalibur is targeted at
mobile executives who are
looking for things that fit
the demanding lifestyle.
The ‘easy care’ range is cut
to the latest international
styles.
2000 Wrangler The authentic western - -

jeans
- Ruggers Adventure wear - -
Casual wears
- Ruff & "Ruff and Tuff" is a Over 450/- -
Tuff product range of ready-to-
wear denim jeans
Gabardines, Cotton

Trousers, Shirts and T-

Shirts. It’s a combination
of Quality, and Fit at a
very affordable price.
- Bay Semi Formals - -
Island
History
Established by Lalbhai Group in 1931 in Ahmedabad, western India, Arvind Mills used
to produce traditional cotton fabrics and garments for domestic consumption. But when,
in the 1980s, low-cost power looms began flooding the market with cheap cotton fabrics,
the company had to change in order to survive.
Arvind Mills is today one of a new breed of ‘Third World Transnational
Corporations’. It is the third-largest manufacturer of denim in the world and the largest
outside the US. It exports over 150 varieties to 66 countries and is used by many big
brand names including Lee, Wrangler, Lee Cooper, Gap, Marks & Spencer, JC Penny
and C&A.
Currently Arvind Mills is the second largest Branded Garment Manufacturer in
India. Presently Arvind Brands retails its products through its 300 exclusive brand outlets
and its 24 Megamarts. The company has three channels of distribution - the exclusive
brand stores, the multi brand outlets and the department stores.
1980-1993: Launch of Flying Machine –Market Broadening

Arvind reckoned denim was a fabric that would never go out of style. So it dismantled all
its disorganized mills – which made nearly 250 different products, from saris to
handkerchiefs – and concentrated on denim. Thus it went in for Planned Contraction
(i.e strategic withdrawl) and started off in the denim market with the launch of Flying
machine in 1980. The market for denim was booming and Arvind Mill quickly captured a
leadership position in the denim market.
1993-1997: Launch of Arrow - Frontal Attack

In 1993 Arvind Mill came out with Arrow to counter Louis Philippe and Van Heusen
which had been launched earlier by Madura garments.

For most of the 1990s, it looked as if Arvind Mills' Arrow, from 'America's shirt
maker', would capture the top-end with its dual strategy of deploying immaculately
exclusive showrooms, combined with an interesting ad campaign that explained the
detailed etiquette of global Power Dressing (cuffs half-an-inch out of the jacket sleeve, no
more, no less etc.).
It also came out with Lee in the premium segment and Newport in the economy
segment in 1995 to tap the growing denim market. With the launch of these two brands, it
established a vertical linkage within its own value chain. It then came out with Excalibur
in the mid-price segment in 1997 to counter the threat, which Peter England from Madura
Garments posed. Arvind Mills grew at the rate of 15 to 20 percent in this period.
1997-2002
It launched wrangler in 2000 to have another product in the premium jeans segment. But
due to inability to communicate the difference in the premium segment well and due to
weak brand management, the expected growth did not materialize.
The turnover in march 2002 was 275 cr and expected growth in 2002-2003 is 15%.
Competitive Position: Favorable

Arvind Mills has a favorable position in the readymade wear market with its large range
of shirts and jeans.
Reaction pattern: Selective Competitor

Arvind Mills has always been a selective competitor. It reacted to the launch of Louis
Phillepe and Van Heusen with the launch of Arrow brand of premium shirts, but then it
did not respond to the new range of shirts introduced by Madura Garments under Louis
Phillepe and Van Heusen. Instead it relied on the brand equity of Arrow to capture the
market.
Premium shirts (Arrow): Challenger

Arvind's initial business strategy for Arrow centered on the brand's legacy and premium
identity. It deftly used Arrow's restricted availability to generate customer pull. One of

Arrow's early campaigns said it all: ``Finding an Arrow shirt isn't easy. After all, they
aren't run-of-the-mill.''
6.2.1 Market Challenger Strategies of Arvind Mills vis a vis Arrow
General Attack Strategies

• Frontal attack Arvind Mills entered into premium shirt segment with the launch of
Arrow in 1993 when Louis Philippe and Van Heusen from Madura Coats were setting
a new trend in formal wear. So basically it attacked the market leader through a
frontal attack.
Specific Attack Strategies

• Product Proliferation: Arvind Mills realized the need to introduce more ranges in
shirts and trousers and so launched a special anniversary collection of two-ply 100
percent cotton shirts under the Arrow brand. The Newport trousers brand was also
extended into a shirt brand.
Denims: Market Leader

Arvind Mills, the third largest manufacturer of denim in the world expects demand to
exceed supply. Arvind Mills is expected to benefit the most from the resurgence of
denim, which was expected to grow by over 15 percent in 2001.
Arvind mills is currently the market leader in denims and has a strong base in it.
Market Expansion strategies: New users (Ruff & Tuff):

• Arvind launched Ruff & Tuff brand of jeans. Arvind Mills found that aspirational
levels of consumer groups in semi-urban towns with regard to the product category
were high but their affordability only permitted them to buy jeans, which were
clones/duplicates of well-known brands and of inferior quality. There was a need for
a good quality jeans brand at affordable prices. Ruff and Tuff was hence launched
with a celebrity and the brand followed this up with a campaign, which emphasized
the ethnicity of the brand.

• The company is also launching several ranges under the Lee brand, which today has
managed around 33% market share.
Overall Strategies
• Internal restructuring: One of the fallouts of building some of the bigger brands
(like arrow) was that some of the not-so-big brands in bottom line or topline terms
were undernourished and under nurtured. Hence the nine brands have been divided
into four clusters. Arrow forms one cluster, Lee the second one. Wrangler and
Ruggers have been clubbed together to form the third cluster whereas Excalibur, Bay
Island, Flying Machine and Newport form the fourth cluster and a business head has
been assigned to each one of them. With such senior people looking at much smaller
portfolios, they should be able to look at the brands in great depth and give them due
attention.
Problems
• In 1986, the company forecasted an extremely bright future for denim and initiated a
huge expansion programme that resulted in capacity going from 3.6 million meter per
annum in 1986 to 110 MMPA now. This was financed through heavy borrowings.
Unfortunately, the actual growth did not measure up to expectations and the denim
industry went through a phase of over-capacity and growth saturation. In 1999-2000,
the company was unable to service its debt obligations.
• The latest financials are not encouraging. Sales fell 1.53 per cent to Rs 1,197 crore for
the year ending March 2001 from Rs 1,215.97 crore the previous year. Operating
profits fell 24 per cent to Rs 119.62 crore from Rs 158.05 crore. Interest costs went
up by 22 per cent to Rs 322.63 crore.

6.3 Raymonds
Raymonds is presently the Market Challenger in the branded wear market.
Brands of Raymonds
Year of Brands Positioning Price range Competitors
Launch
1986 Park Avenue Etiquette of global Over 1000 Louis Philippe,
Power Dressing Van Heusen,
Truly American Zodiac
Premium-Wear Brand
Loyal customers
1999 Parx Semi formal office 600 – 1400 Flying
dressing Machine, Live-
Cottons and denims in, Free Look,
Pantaloon
2000 Manzoni Super premium - -
segment
High quality,
international style
2001 Be: Affordable designer 600-6000 Retail shops
wear like Shoppers
Western, ethnic and Stop, Pantaloon
fusion styles etc.
History
Raymonds started off in 1925 as a manufacturer of woolen textiles. Over the years, it has
established itself as a leading player in the readymade apparel market.

Raymonds has a favorable position in the readymade wear market with its large range of
shirts and jeans.

Reaction pattern: Tiger Competitor

Raymonds has always hit back its competitors. It changed the image of Park Avenue
from formals to semi-formals to capture the market from its competitors. It also launched
Parx to tap on the growing casual wear market.
Entry Level Strategies

Launch of Park Avenue in 1986 – market pioneer – took pioneering lead to cater to
changing “desired states”.
Initially Raymonds launched Park Avenue in 1986 as formal wear for the young
corporate. It entered the market much before other brands (in 1989). The only other
branded shirt of repute available at this point of time was Vivaldi from Bombay Dyeing.
1990s
Park avenue is presently the market leader in the Mid Price formal shirts segment. It
enjoys a dominant position due to the highest sale in this category.
Repositioning of Park Avenue: Semi Formal

Realizing the aspirations of the '90s manager, in 1996 it came out with a `get real'
campaign. The positioning line at that point of time for the brand was `real formal, real
easy'. Park Avenue was repositioned as the complete `wardrobe brand' after the
introduction of Parx in 1999.
Launch of Parx in 1999

The range of casual wear that existed under the Park Avenue label was shifted to the
newly launched casual wear brand, Parx. Parx was a casual, semi-formal wardrobe brand
that reflected a shift towards casual dressing, indicating the demand for cotton and
denim-based products. Parx comfort wear was aimed at the young office-goer, who
should feel comfortable as he works his way up the corporate ladder.
Raymond conceived an image shift by attempting to make available the latest
international fashion trends in the Indian market at an affordable price. Parx is priced
between Rs 600 and Rs 1,400. In April 2000, `Parx' sales revenue was Rs 30 crore.

Marketing strategies adopted by Raymond’s

Park Avenue adopted the positioning line of ‘Start Something New'
Product Innovation: The idea was to make the brand more modern and contemporary.
Research showed there was something in people's minds, which was not being
articulated. There was a desire to break away from the old traditional ways to start
something new.''
A new `corporate Columbus' was emerging _ ``someone with vision, ideas, ability to
work and the confidence to quit his job to take on a new venture''. And, Park Avenue
realized it had to address this particular individual.
Extensive Distribution :In the year 2000, Raymond embarked upon a new strategy to
increase its market share. The strategy focused on revamping its retail and distribution
chain across the country. The Group aims to expand the existing network of 260
Raymond shops to over 350 outlets by the year 2003. The company also plans to increase
the number of its exclusive Parx and Park Avenue outlets from 13 to 100 in the next one-
and-a-half years.
Challenges
Declining demand for Fabrics: One of Raymond's biggest problems is the falling demand
for fabrics, with the market saturated. Another threat is the advent of the World Trade
Organization (WTO) agreement in April 2004. This will allow fabrics to be imported for
domestic use.
Change in customer preferences: Customers are moving to readymade garments, which

are more convenient. Therefore the only real driver of growth is the readymade garments
division. The key is value-addition. So, while it might constitute a smaller proportion of
the turnover, its contribution to profits is substantially larger. The company hopes to
boost its bottom line through this segment.

However, the competition is intense in the readymade garment sector with several brands
already crowding the market place. The key in readymade garments is to have a portfolio
with products across the board, ranging from casual-mid-range pricing to formal wear
and premier goods without losing Raymond's brand equity.
Raymond's main strength is its large national distribution network. To really have an
impact on the bottom line, readymade garments need to contribute to at least 10 per cent
of the turnover. This can happen only if the growth is rapid. There are two ways to grow:
Organically, by increasing market share of its own brands or, inorganically, by
acquiring some established brands. As Raymonds has the resources, the second might be
a viable and faster option.
Marketing Research results by Lintas

A research by Pathfinders, the market research outfit of Lintas, revealed the following
about the current perception of Park Avenue:
• It was seen as a strongly formal/official brand with premium quality connotations;
• Younger consumers viewed it as less fashionable and lower in status compared to its
competitors (Arrow, Van Heusen and Allen Solly)
• The older, current consumers kept the brand at par and also higher on status and
admitted that it was not as fashionable/contemporary as its competitors.
• It was perceived to be for an oldish consumer _ someone who was
successful/achieved in life, but is conservative and conventional.
Launch of Manzoni (2000) – image building

A super premium range of men's shirts and ties was launched in April 2000. The brand
has already been established in the market and has raced to the popularity charts in its
category, acknowledged for its high quality and international styling. Manzoni also
launched a range of very high quality men's suits recently.
Launch of Be (2001)- foray into niche segment (market broadening)

Be is Raymond's exclusive prêt-a- porter line of ready to wear affordable designer wear.
It includes an eclectic mix of formal wear and evening wears for women and men in
western, ethnic and fusion styles. It aims at making affordable designer wear easily
available to fashion conscious women & men in 2001.
Sales Promotion: To commemorate its 75th anniversary, Raymond will also launch a new
Rs 20-crore campaign. Out of this amount, around Rs 10 crore will be given out as prizes
to the consumers participating in a contest.
Alliance: The company has tie ups with two Italian firms Marzotto and Piacenza for
enhancing design and quality of its textiles. This can help the company in coming up with
innovative product designs in future.

6.4 Indus League

Indus League is presently the Market Challenger in the branded wear market. The
company calls itself a lifestyle brand marketing concern.
History
It began in 1997 with the exit of Sriram Srinivasan, the company's first president, widely
considered the architect of the premium readymade menswear market. The exodus of
seven other high-profile professionals two years later, to join hands with Srinivasan in
Indus-League, a venture capital funded lifestyle clothing company, was definitely a
watershed. Indus-League, which mopped up Rs 27 crore in the latter half of 1999-2000,
is expected to cross Rs 100 crore in the current fiscal.
Salient Features
• First clothing company started with venture capital
• First clothing company to offer employee stock options
• First clothing company to use IT extensively, and one of the
• First ready-to-wear garment brands made in India to be launched internationally
Brands
Indus-League is now in the market with two original brands - Indigo Nation and
Scullers.
Indigo Nation is positioned as one that cuts across markets and product segments,
targeting a wider customer base, a citizenship to Indigo Nation, and aims to become a
Gap in India. The name and everything is oriented towards it, the product is premium, the
pricing is surprisingly low.
Indigo Nation, positioned as a `clothing expert for a modern man', is up against Zodiac,
Park Avenue and Van Heusen. Conceived on trends sweeping the global marketplace, the
brand is reportedly for the young, successful, urban male and gives him the assurance of
being well-dressed, in tune with the times, and the confidence that the quality is as good
as the best.
Indigo Nation is targeted at the young Indian executive and the professional with a global
outlook. With its contemporary designs, colours and fabrics, the brands' pitch is quality
delivered with value, as compared to the other mid-priced and premium brands of

menswear. The price ranges from Rs 399 to Rs 699 for shirts, and from Rs 599 to Rs 899
for trousers.
Scullers is positioned as a brand full of energy, it ``includes clothes which you wear in an
international workplace'', where men and women work together. This premium menswear
brand faces the likes of Colour Plus and Provogue in the market. Scullers, on the price
front, starts at Rs 599 for shirts, Rs 799 for trousers and Rs 399 for ties.
Touted as clothes to wear to work and ``just as good to relax with the gang afterwards'',
the brand's imagery is drawn from sculling and rowing (like the legendary races of
Harvard-Yale and Cambridge-Oxford), the spirit of bonhomie and the energy of
teamwork in a workplace. The rich imagery, which is truly international, is most
effectively captured in print campaigns.

Indus League has a favorable position in the readymade wear market with its range of
differentiated shirts.
Company’s strategies
Attack strategy: Bypass attack by creating a new segment and using modern technology
to its advantage in creating a new customer base.
Specific attack strategies:
Zero Asset Model: Indus-League doesn't manufacture anything in-house, but has
dedicated people who are working for them under their manufacturing supervision. The
largest team of the company hails from manufacturing field. They work with people with
good factories and flexible manufacturing and very high quality merchandising. The
manufacturing team works on giving productivity up and quality up so his cost stays
down so that they can offer value proposition to his customers.
Low Manufacturing Cost: The company's access to international sources makes its raw
material cost one of lowest in the business. At a lowest manufacturing cost the company
can deliver the best products at a much lower cost to the consumer. That's how value
proposition is delivered.

Good R&D: The company has a great marketing and merchandising team to understand
what the market is looking for.
Product Proliferation: The company is conceived on trends sweeping global market

place and believes in providing a larger variety of products focussing on high
performance fabrics, vibrant colours, new textures and a softer comfortable feel that are
replacing the traditional look.
No cannibalization: The company wants doesn’t want any of it’s new brands to compete
with it’s existing brand. They want to create new customer base.
Use of Technology: Indus-League is creating a whole new segment. That is basically

what they are trying to do with the two brands launched now. The top departmental stores
in Mumbai and elsewhere have done extremely well with brands that too without any
advertising support for them. Indus-League uses the services of information technology
to drive these four elements. The company has an exceptional supply team management.
Shorter Learning Curve: Normally when a new company is setup, there is a huge
learning curve, but here the learning curve has been shortened considerably due to
starting team. Put together, team would have at least 100 man-years in the garment
business. That is why the kind of reaction the company got in the market of Pune or
Madras, is not the typical reaction, a new company would get.
Distribution: Indus-League is not going for a wide distribution. They would have limited
distribution in shop-n-shops, best multi-brand outlets, in large departmental stores. The
brands are already into all Shopper's Shop stores in India, Piramid at Crossroads, Life
Styles in Madras, and will be in all large Pantaloons stores. The company is also planning
to have exclusive Indigo Nation showrooms.
This strategy of limited distribution, by not spreading itself thin across many
outlets, will enable the retailer to grow with the company. The company will be putting
its resources in visual merchandising and other instore promotional activities. The ratio of

multi-brand outlets to exclusive shops is likely to be very fair. But the number of retailers
per market would be very judiciously thought. It will be very optimal.
The company will service these outlets through distributors who would primarily
be stock points in each state. Products will be strongly supported by advertisement;
Indus-League is looking at a combined spent of 12 crores on both the brands.
Promotion: As far as brand building is concerned, the company plans to be as big a

spender as any other big brand in the country as their pockets are deep enough for that.
The company has already launched a campaign for Indigo Nation; the Scullers campaign
is about to be released. In Tamil Nadu, the media plan has already been launched - multi
language prints, outdoors, and on Raj TV. Their ads feature only foreign faces. Scullers
and Indigo Nation are talking to the global Indian, who is youthful and contemporary and
the clothing caters to this lifestyle of work, leisure and party. Indus League is a prime
example of a company that built good products and fairly good distribution but did not
have enough resources to create top-of-mind recall for its Indigo Nation and Scullers
brands.
Demand Pull Strategy: The company believes that multi-brand retailers should be treated
properly because these outlets have been under pressure because of the margins. The
company is giving higher margins to multi-brand outlets. Indus-League will give support
to the dealers so that they give the customer a better service; a better ambience and they
also make money at the end of the day. The company believes that the whole value chain
has to make money - the retailer, the distributor, the company - to become a strong long-
term supply chain.
Segmentation: Indus-League is not selling purely on demographics. The company is

selling on life styles, selling on attitude. No sharp line is drawn about who is the
customer, but the core customer has been defined. The customer is not a perfect
customer. He or she doesn't feel that I should fall into only this segment. You can't force
customers to be segmented. They behave differently at different point of time. But the
Indian ready-to-wear market also has indiscernible traps that could kill any idea, any

strong conviction, any powerful vision, any overwhelming strategy .The company had
launched in Piramyd at Crossroads, Shopper's Stop and Pantaloons stores. It is quite
successful in Tamil Nadu and Mumbai
The future
Changing Consumer preferences: The consumers are now becoming more adventurous
in what they wear. Friday Dressing has revolutionized the office wear. The comfort of
cotton has replaced traditional blended fabrics. Indus-League strongly believes that
consumers of future will adopt new fashion faster than they have done before. And the
company creates for the future.
Company’s Focus: Indus-League will have a set of multi-product national and

international brands delivering strong values to a variety of customers. The company is
focused on the four basic premises that the customer is looking for - fashion, quality,
service and value.
Market Broadening: Foray into women's & children's wear Indus-League sees a very
special opportunity to redefine the largely unorganized women's wear market by
establishing merchandise quality. There are very few brands that produce quality and do
some brand building in this market, and even they are far between. With the acceptance
of western wear and ready-made Indian clothes, a transition has happened in the ladies
wear segment. Indus-League sees this segment as an open field with little competition
from top brands.
Future Plans: Ironwood is the third brand in progress. This brand, inspired by the game
of golf, is expected to be introduced soon .Ironwood, which would be in Scullers price
points, will feature classic and sport shirts to washed khaki trousers, bermudas, knits and
unstructured jackets.

7. Strategies of Madura Garments
Madura garments is the undisputed leader in the menswear segment. The major reason
for the success that Madura garments achieved is a strong focus on people, whether
customers or its employees, and a strong belief in its brands. Madura Garments' biggest
achievement has been the way it has used its understanding of the Indian Yuppie to
outshine the premium shirt brands of the 1980s.
Louis
HIGH PRICE
Philli
SENSUAL
pe
Van Allen
Heuse Solly
n
Peter Eleme
UTILITARIAN
LOW PRICE
Engla nts
nd
FORMAL CASUAL

7.1 Launch and Entry Strategy
Pre 1989
The 1980s saw the first move towards readymade menswear in urban India, as brand
consciousness and the need for convenience surfaced. Bombay Dyeing’s Vivaldi
appealed to the musical soul, Zodiac’s Zodiac turned the gaze upwards and Raymond’s
Park Avenue took Indian aspirations to New York. At this point in time, Madura
garments did not have any major presence in the market.
1989 – mid 90s: Market Challenger

• Launch of the “King” Louis Philippe – flank attack
Madura launched Louis Philippe in 1989, with its 'Upper Crest' crown logo embroidered
into the cuff as a mark of distinction, as a top-end formal shirt for the arrived, style-
conscious gentleman.
Louis Philippe was priced higher than the existing brands and succeeded in
delivering value at a higher price point. The higher price added to its royal image. It also
took shirt quality, packaging and merchandising to a higher plane. The brand signified
grace and style and was meant for use by high corporate executives as a status symbol on
social occasions. It is advertised as a brand “beyond the reach of lesser men”.
• Launch of “rook” Van Huesen – flank defense
Madura launched Van Heusen in 1990 as a business shirt targeted at the fast-track
corporate executive. It was meant to fill the gap Louis Philippe had left uncatered to in
the pure formal wear category when it had positioned itself slightly away from regular
office wear. It thus acted as a flank defense to protect the king – ‘Louis Phillipe’.
Over the years Van Huesen has become markedly less stiff collared and has
become more experimentative with colours. Van Huesen came up with the concept of
colourful office wear through its recently launched ‘Purple Collection’.
Mid-90s onwards: Market Leader

• Launch of “Queen” Allen Solly – mobile defense
Allen Solly introduced the concept of ‘Friday dressing’, which clubbed relaxed attire
with regular formalwear. It grew to become a subtle, but strong, attitude statement in
menswear.

Allen Solly was positioned in the semi-formal segment, thus enticing the casual
segment customers, without deviating much from the original target segment of premium
formal segment. Allen Solly was sold in exclusive showrooms with a more useful retail
ambience.
With the help of Allen Solly, Madura Garments was able to stretch its domain
over new territories. It was able to broaden its market base by catering to an underlying
generic need for comfort and easy dressing, without shifting from its original forte in the
premium formal wear segment.
Thus, by targeting various segments, Madura came closer to its objective of
becoming the market leader in the Mens Wear segment.
• Launch of “Knight” Peter England – Market penetration strategy
Madura launched Peter England in 1997 to achieve volume sales by targeting the mass
market. This enabled Madura Garments to make a substantial foray into semi-urban and
rural markets.
Like a ‘Knight’ it managed to leap over the price barrier and still was able to
project an image of an admirable personality. Hence, the brand did not dilute the image
of Madura Garments as a marketer of premium shirts. The brand was a runaway hit, and
managed to penetrate deep into the urban Indian market through its own chain of
showrooms (noticeably less glitzy) and retail stores.
It is presently the largest selling brand in the formal menswear segment, with its
checked patterns doing exceptionally well.
• Launch of “Bishop” Allen Solly Women’s – Market broadening
The concept of ‘Friday dressing’ was extended to the women’s segment when Allen
Solly launched its women’s version. The brand was targeted specifically for the working
women class. The working class has the buying power and is expected to be a very active
buyer for the segment. So its brand could play the Bishop, going diagonally across
existing perceptions (with formality on the X axis and sensuality on the Y), to deliver
unique styles.
• The trouser market - Expanding market share
Around 2000-2001 there was a rapid shift in consumer preference from denim to Khakis
and Trousers. Further the trouser was expected to boom in the coming years due to a

consumer shift from tailored to readymade trousers. It actually cam true with the total
RTW trousers growing to 24 million pieces in 2002 from 12 million pieces in 2001,sub-
premium segment registering maximum growth. Madura Garments launched Peter-
England brand of trousers retaining the brand proposition ‘honest trousers’. As a part of
its strategy to have a straddled presence in domestic non-premium market, Madura
Garments moved its exclusive trouser brand ‘San Frisco’ to a higher price point so that
the gap created would be occupied by Peter England trousers. San Frisco was initially
priced at Rs. 595-795.
• Entry into jeans market - Frontal attack
Madura Garments, entered the jeans wear market with the launch of 'SF Jeans' for the
youth in September 2002.Targeted at the 15 to 24 age group, estimated to account for 45
per cent of the jeans wear market in India, SF Jeans are available in several styles,
treatments and washes in the Rs 895 to Rs 1395 price range. The product is differentiated
from others in that the SF Jeans brand, offers text, images and laser patterns scorched on
the fabric, and this range was being introduced in India for the first time
Emotional Positioning Strategy
• Madura Garments launched Louis Philippe as a shirt for the ‘Upper Crest’. Madura
identified the shift in the consumers’ aspirations, with a distinct preference for foreign
brands. Madura targeted this gap in the premium formal segment and positioned its
Louis Philippe brand as a ‘king’. Thus it was able to differentiate itself from its
competitors Park Avenue and Zodiac.
• Van Huesen was launched with the punch line 'Underline your presence', with a thick
red line under the name added for emphasis, showed that it was a brand meant for the
confident young executive who wanted to make his mark at work.
• Madura launched Allen Solly to capture instant attention of young Indian Sophisticate
who yearned for relief from straight jacketed formality but still wanted well groomed
office wear.

• Peter England projected its selling proposition as ‘virtue of modesty’ and positioned
itself as ‘The Honest Shirt’. It managed to deliver a value much higher than the price at
which it sold, and thus avoided being viewed as cheap.
7.3 Retail Strategy
Exclusive Showrooms
Exclusive Showrooms
Exclusive Franchisee Retail Outlets

Exclusive Franchisee Retail Outlets
Department Stores
Department Stores
Malls
Malls
Malls Exclusive Franchisee

Malls Exclusive Franchisee
Planet Fashion Exclusive Showrooms

Planet Fashion Exclusive Showrooms
Madura Conventional
Garments Retail Strategy
Madura Garments has always had a strong belief in the success of its brands. Hence, it
has had the confidence to follow a retail strategy diametrically opposite to the one
conventionally used. It has invested in exclusive showrooms for its brands right from
their launch, and it is only after the brands have made a dent in the market that they have
diversified into franchise outlets, departmental stores and malls. The latest addition to this

network is Planet Fashion, which is an exclusive mall for Madura products and brings the
Madura retail policy to a full circle.
Operational Strategies
• Preemptive defense: To counter the vagaries of fashion, Madura uses a

combination of strategies. High fashion items are produced in anticipation of sales
on the basis of hunches and insights (a high-risk, high-return business). In contrast,
sales in other categories are forecast on the basis of real-offtake inputs from
retailers and malls such as Shoppers' Stop.
• Supply chain strategy: As the business turns complex, Madura is employing
differential supply chain strategies to service different customer groups (dealers and
distributors). Priority is given to posh 'large trade outlets' that grant Madura plenty
of shop space. The average 'turnaround order time' is just six days. "A web
interface with our agents is our biggest strength/' says Krishna Kumar, general
manager, sourcing and logistics. This way, even ordinary stores are offered
supplies every fortnight (three months is the industry norm). Madura also has a
policy of quick and continuous liquidation of stocks. Clearance sales are organized
so that no stocks pile up, outlast their product lifecycles and gather dust.
• Innovation: Madura is relying heavily on innovation. Whether it is fabric, style or
fits, each brand must have something new and desirable to offer, every now and
then. In fact, given all the feature-play, apparel is beginning to look more like a hi-
tech category. Ice touch is a new fabric it launched under the Van Huesen head
which keeps the body cool.
• Madura runs a clockwork operation that's the envy of other players. But these other
players are looking to it for leadership not just on operational and branding issues,
but in planning for the future. This issue gains currency from the changes that the
WTO is bringing about. India's barriers to foreign-made clothes are coming down,
even as Asian apparel makers get ready to storm into the West once it drops its own
barriers put up by the Multi Fibre Agreement (MFA).

• Global Expansion: As the business globalizes, Indian players might want to source
fabric from East Asia and turn it into shirts for export. Madura is already working
out a pan-Asian sourcing strategy, designed to optimize cost and quality. As for
export markets, West Asia offers the biggest immediate promise, since the brands
hold recognition there.
7.5 Strategy framework for a Market Leader
From the analysis of strategies followed by Madura Garments, a broad framework of

strategies which are applicable to a market leader at different situations can be derived.
A market leader might employ the following strategies in a growth-market:

• Fortress or position defense strategy
• Flanker strategy
• Confrontation strategy
• Market expansion or mobile strategy
• Contraction or strategic withdrawal strategy
From the strategies applied by Madura Garments for its different brands in Premium
Formal and Semi-formal segments and mid-priced formal segment (where it is a market
leader) the following criteria can be derived to be amenable to above strategies.
Strategies followed by Arvind mills who is a market challenger, but a leader in casual
segment has been used to derive criteria for confrontation strategy.
There might be cases in which all the situational variables of a particular strategy
given below may not be relevant to a particular company. In this case, the strategy for
which maximum number of situational variables matches with the situation of the
company can be applied.
Situational Fortress defense Flanker Confrontation Mobile Strategic

Variables Defense / withdrawal

Market
expansion
Increase Protect against Protect against Increase ability Increase ability
Primary
Objective satisfaction, loss of specific loss of share by to attract new to attract new
loyalty and segment of meeting or customers by customers in
repeat purchase current beating a head- developing new selected high
Build on customers by to-head product offering growth
existing developing a competitive or line segments by
strengths second entry offering; extensions focusing
Appeal to late that covers a improve ability aimed at a offerings and
adopter with weakness in to win new variety of new resources on
same attributes original customers who applications and those segments;
and benefits offering; might otherwise user segments; withdraw from
offered to early improve ability be attracted to improve ability smaller or
adopters. to attract new competitor’s to retain current slower growing
customers with offering. customers as segments to
specific needs market conserve
and purchase fragments. resources.
criteria different
from those of
early adopters.

Market Strong Market Relatively multiple product heterogeneous

characteristics preference segments with homogenous uses requiring market with
among largest distinctive need market with different product growth
segment of the or purchase respect to attributes. potential
customers. criteria exists. customer’s multiple
needs and product uses
purchase requiring
criteria; little different
preference/loyal product
ty towards attributes.
leader’s product
among largest
segment of
customers.
Competitor’s Current and One or more One or more Current and One or more
characteristics potential current and current and potential current and
competitors potential potential competitors potential
have relatively competitors competitors have relatively competitors
limited have sufficient have sufficient limited have sufficient
resources and resources and resources and resources and resources and
competencies. competencies to competencies to competencies, competencies
effectively effectively particularly with to present a
implement a implement a marketing. strong
differentiation head-to-head challenge in
strategy. strategy. one or more
growth
segments.

Firm’s Current product Current product Current product No current Current product
characteristics offering enjoys offering offering suffers offering in one offering suffers
high awareness perceived as low awareness or more low awareness,
and preference weak on at least and loyalty potential preference and
among major one attribute by among major application loyalty among
segment of a major segment of segments; firm current and
current and segment of current and has R&D and potential
potential current or potential marketing customers in
customers; potential customers; firm resources equal one or more
firm’s customers; firm had marketing to or more than growth
marketing and has sufficient and R&D competitors. segments;
R&D resources R&D and resources and firm’s
and marketing competencies marketing and
competencies resources to equal to or R&D resources
equal to or introduce and greater than any and
greater than any support a current or competencies
current or second offering potential are limited
potential aimed at the competitor. relative to one
competitor. disaffected or more current
segment. or potential
competitor.
Applied: For Louis Using Van By NewPort Using Allen Used by Arvind
Phillippe Huesen Solly and Peter Mills
England
Segment Premium Premium Casual Premium Semi- Saree and
Formal Formal economy formal and Mid handkerchief
–Priced Formal segment.

7.6 Future Strategies for Madura Garments

From the knowledge gained on the strategies to be applied by the market leader, an
attempt is made to suggest the future growth strategies for the present leader, Madura
garments.
7.6.1 Analyzing Current Position

PREMIUM
LOUIS
PHILIPPE
??
VAN HUESEN ALLEN

SOLLY
ECONOMY
PETER
ELEMENTS
ENGLAND
?? ??
FORMAL CASUAL
The positioning map shows how Madura garments has positioned its brands in the
menswear segment over the years. Each new offering has catered to a different segment
of the market, differentiated by price and style. From its current position, Madura
Garments has the option of going in for a new offering in the following sections:
• Formal and Economy
• Casual and Economy
• Casual and Premium

7.6.2 Choice of Target market

The following evaluation matrix divides all the market segments in terms of their future
market attractiveness and present competitive position. The shaded areas indicate the
strengths of Madura garments and it should continue to target them as their primary point
of focus.
The casual premium wear segment is medium in terms of market attractiveness.
Additionally there is a lot of brand clutter and the whole market is captured by Arvind
Mills and reputed foreign brands.
The economy segment is high in terms of market attractiveness mostly because of
its huge potential customer base. There is lesser influence of other brands in these
segments and currently the unorganized market caters to maximum demand. Hence there
is a huge opportunity for Madura garments to enter this segment. Considering the past
Madura brand positioning and that the formal segment has been its area of strength, it is
recommended that Madura should first target the formal economy segment and then
expand towards the casual economy
Madura garments is a market challenger in the casual mid price segment with
Elements and Byford. This market also has high market attractiveness and therefore use
challenger strategies to counter the competition.

MARKET ATTRACTIVENESS
COMPETITIVE POSITION
Protect Position Invest to build Build Selectively
Strong Medium Weak
Mid Price Formal Mid Price Casual Casual-Economy

(PETER ENGLAND) (ELEMENTS)
Formal Economy
High
Build Selectively Manage for earnings Limited expansion or
harvest
Premium Formal Casual Premium
(VAN HUESEN)
Medium
Mid Price Semi Formal
(ALLEN SOLLY)
Premium Semi-Formal
(LOUIS PHILIPPE)
Protect and refocus Manage for earnings Divest
Low
7.6.3 Strategies for new market entry
Branding Strategy
The economy segment is not a new segment per-se and already has a few competitors.
Madura Garments does not have its presence in that segment till now and so according to
the matrix, the best strategy would be to start a new brand line targeted at the formal
economy segment.

Casual &
formal economy
segment
New-to-world
New Brand line product
Newness to the company
Add to existing
Brand line
Repositions /
improvements
Low
Cost Reductions Repositionings
Low
NEWNESS TO THE FIRM
Penetration Strategy

Situational Mass Penetration Niche Penetration Market Skimming

Variables
Market  Large  Large potential  Limited potential
Characteristics Potential demand demand
demand
 Fragmented  Long adoption
 Relatively market process
homogeneous
needs  Short adoption  Demand price-
process inelastic
 Short
diffusion
Process
Competitor’s  Few  Many potential  Many potential

characteristics potential competitors competitors
competitors
 Some  Some competitors
 Competitor competitors have have substantial
s have limited substantial resources resources
resources
Firm’s  Strong  Limited product  Strong basic R&D

characteristics product engineering skills skills
engineering
skills  Limited  Good sales and
marketing skills and promotional skills
 Strong resources
marketing skills  Limited financial
and resources  Insufficient and organizational
financial and resources
 Sufficient organizational
financial and resources
organizational
resources
Short term  Maximize  Maximize  Maximize number
objectives number of number of adopters of adopters within
adopters in total in target segment limited investment
market
Intermediate  Attempt to  Maintain  Maximize ROI
objectives preempt leading position in
competition target segment

Long term  Maximize  Maximize ROI  Withdraw

objectives ROI
Recommendat
ion
√ X X
Pricing and promotion strategies

Objective: Increase customer’s awareness and willingness to buy
1. Heavy advertising to generate awareness among customers in the mass market
2. Extensive sales force efforts to win new adopters and possible use of incentives to
encourage new product sales
3. Advertising and sales appeals stress generic benefits of the new product.
Objective: To increase customer’s ability to buy

1. Penetration pricing
2. Extended credit terms to retailers to encourage initial purchases
3. Heavy use of trade promotions aimed at gaining extensive distribution
Suggested new product launch

The new product must be launched in order to tap the large potential in the urban
economy segment as well as the rural segment. The market of the branded apparel is still
just 20% of the total market and so a huge potential can in be tapped if the product is
positioned, priced and promoted appropriately so that customers from the unbranded
segment can be attracted.
Madura is known to provide value at all price points and launching a product
priced lower than Peter England might dilute its brand equity and may even lead to
cannibalization. In order to counter this possibility, we suggest that the new brand be
named in hindi, the language of the masses. It should place itself at as a product meant
for strivers, the people who are determined to succeed.

The typical reference price for an unbranded economy shirt is approximately Rs.
150. Madura should price the new product close to this reference price in order to appeal
to the target segment.
The initial focus should be on increasing market share and building volumes
while the long objective can be profitability.
Suggestions
Brand name: Ajeya
ESP: “For the winner” (“Jo humesha jeetega….”)
Price range: Rs. 199 to Rs. 299
Target segment: Urban economy segment and Rural segment.
Marketing strategy: Low price, Heavy promotion
Promotion channels: Doordarshan, Regional Newspapers, Radio, local Cable
channel
Distribution channels: Peter England network + one more tier dedicated to
penetrate the rural segment.
Warning: the company should avoid excess capacity and overestimating demand in
order to avoid failure like Ruff n Tuff Jeans.

Market Challenger Strategy

An overall market leader can be a challenger in some segments for example Madura
Garments is a challenger in casual wear segment. The following framework of market
challenger strategies is taken up to analyze the future course of action that can be
followed by Madura garments with respect to this segment. This can serve as an example
of challenger strategies in such specific situations.
Situational Frontal Leapfrog Flank Encirclement Guerrilla

Variables Attack Attack Attack
Primary Capture Induce current Attract Attract a Capture a
Objective substantial customers in substantial substantial modest share of
repeat / mass market to share of new share of new repeat /
replacement replace their customers in customers in replacement
purchases from current brand one or more a variety of purchases in
target with superior major segments smaller, several market
competitor’s new offering; where specialized segments or
current attract new customers’ segments territories;
customers; customers by needs are where attract a share
attract new providing different from customers’ of new
customers enhanced those of early needs or customers in a
among late benefits. adopters in the preferences number of
adopters by mass market. differ from existing
offering lower those of segments.
price or more early
attractive adopters in
features. the mass
market.
Market Relatively Relatively Two or more Relatively Relatively

characteristics homogeneous homogeneous major segments heterogeneous heterogeneous
market with market with with distinct market with market with
respect to respect to needs and number of number of
customers needs customers’ purchase small, larger
and purchase needs and criteria; needs specialized segments; needs
criteria; purchase of customers in segments; needs and preferences
relatively little criteria; but at least one and preferences of customers in
preference or some needs or segment not of customers in most segments
loyalty for criteria not currently met some segments currently
existing brands. currently met by existing not currently satisfied by
by existing brands. satisfied by competing
brands. competing brands.
brands.

Competitor’s Target One or more Target One or more A number of

characteristics competitor has current competitor has competitors competitors
relatively competitors relatively strong have relatively have relatively
limited have relatively resources and strong strong
resources and strong resources competencies marketing; R & marketing; R &
competencies and particularly in D resources and D resources and
particularly in competencies in marketing and competencies competencies
marketing and marketing, but R & D; would and / or lower and / or lower
R & D; would relatively probably be costs; could costs; could
probably be unsophisticated able to probably probably
vulnerable to technology and withstand withstand a withstand a
direct attack. limited R & D direct attack. direct attack. direct attack.
competencies.
Firm’s Firm has Firm has Firms’ Firm has Firm has
characteristics stronger proprietary resources and marketing R & relatively
resources and technology competencies D and limited
competencies superior to that are limited, but production marketing R &
in R & D and of competitors; sufficient to resources and D and /or
marketing and / firm has effectively competencies production
or lower necessary penetrate and necessary to resources and
operating costs marketing and serve at least serve multiple competencies;
than target production one major smaller firm has
competitor. resources to market segments; decentralized
stimulate and segment. firm has and adaptable
meet primary decentralized management
demand for new and adaptable structure.
generation of management
products. structure.
Recommende
d for the
casual mid
price segment
X √
(Elements,
Byford)
Encirclement Strategy
An encirclement strategy involves targeting several smaller untapped or underdeveloped
parts in the segment simultaneously. The idea is to surround the leader’s brands with a
variety of offerings aimed at several peripheral segments.
Accordingly, Madura should introduce varied line of sub-brands with features
tailored to the needs of the different segments within the casual mid price sector. These
sub-brands could be launched bringing in new or different fashions, trends and styles

within the segment. The casual segment is so vast in terms of fashion and style, that it can
be considered a full-fledged market in itself.

8. Unorganized market
The brand boom that has hit India has translated into the domestic-apparel market
growing at the rate of 15-17% per annum. This should make the people behind the Lees,
Arrows, Levi's, and Nikes very happy, but in reality they aren’t because branded apparel
makers are losing a huge chunk of revenues to counterfeiters. The unorganized sector
forms about 80% of the Rs 43,000 crores apparel industry.
There are four main kinds of threats from the unorganized sector
1. Counterfeited branded product (Poor copies of the original passed off as the real
thing)
2. Piracy - apparel piracy is when suppliers use original material and standard
designs, without the company’s consent. He says these copies are near replicas of
the original, and are priced much lower
3. Unbranded local products
4. Clones – e.g. Ropa for Rupa, Woodband for Woodland, Peter India for Peter
England etc.
The primary advantages with the unorganized sector are:

• Ability to provide products at a very low price – with a discount on quality.
• Counterfeiters can offer substantially lower prices because they do not have to pay
taxes and excise duties that manufacturers of genuine goods have to (Branded apparel
makers have to pay 12% excise and 15% octroi, besides 20 to 25% as dealer
commissions).
• High demand for fakes in brand-conscious metros such as Mumbai and Delhi.
• Clones fulfill the aspirational needs of the low-income segments.
8.1 How they bleed the organized sector?
Apparel makers such as Levi Strauss (India) lose about 15% of revenues to counterfeiting
Post purchase dissatisfaction in case of low quality clones and counterfeits.

A survey carried out by us personally at Bangalore’s posh Brigade market revealed that
most of the shops stocked more than 50% of unbranded products. Investigations revealed
that they get very good margins on sale of unbranded products
8.2 Strategies to handle the unorganized sector:

Presently followed strategies
• Use of holograms to distinguish counterfeit products (not very successful)
• Sale of the brand in select showrooms (not always practical)
• Counterfeit detection cells working in co-ordination with law enforcement agencies –
Arvind brands and Nike have successfully employed this strategy.
Suggested strategies
• Start an industry wide forum (on the lines of BSA-Nasscom alliance) to fight apparel
counterfeiting. This will lead to pooling of costs and higher efficacy.
• Offer a product at a lower price point to graduate the consumer from the unorganized
sector to the organized sector. This strategy has been successfully adopted by HLL
(tiger biscuits) and Arvind Mills (Ruf-n-Tuf). To an extent Peter England also drew
customers from the unorganized sector.
• Extensive advertising of the mass products (low priced) to create consumer awareness
– in order to make the consumers more discerning.
• Increased interaction and more incentives to retailers and distributors – as is
successfully done by Indus League.

Appendix 1: Segmentation in Global Apparel Market

The pyramid in the figure shows the structure of the apparel market. The tip of the
pyramid, although very small in size, is a high price segment primarily dominated by the
apparel designers such as Georgio Armani, Versace, Ritu Beri, etc. These products can be
classified as high value added products. The base of the pyramid depicts the low-end
discount stores such as K-mart and Walmart, etc, where the need of the international
buyers is quantity with limited consideration to quality of the product. These buyers in
the apparel market segment can be classified as commodity buyers. The movement from
the top to bottom of the pyramid results in increased volumes and decreases in unit price
realization.
Haute
Couture
Designer Shops
Department
Stores
Mass
Market
Discount Low-
end
Chain Stores

Appendix 2: Timeline of major brands

Company / Growth in
Year Brand Sales (in Rs. Crore)
Marketer %
99-00 00-01
1954 Zodiac Zodiac 125 150 20
1980 Flying machine Arvind Mills 23 32 40
1983 Proline Proline 10 22 22
1986 Park Avenue Raymond 165 200 21
1988 Vivaldi Bombay dyeing 65 80 23
1989 Louis Philippe Madura Garments 95 120 26
1989 Pepe Pepe 35 45 29
1990 Van Heusen Madura Garments 65 90 38
1990 Oxemberg Oxemberg 52 65 25
1990 Uni Style (USI) Uni Style (USI) 13 17 31
1991 Blackberry’s Blackberry’s 32 45 41
1993 Arrow Arvind Mills 48 55 15
1993 Allen Solly Madura Garments 55 85 55
1993 Lacoste Lacoste 35 45 29
1995 Lee Arvind Mills 60 68 13
1995 Newport Arvind Mills 60 67 12

Ambattur Clothing
1995 Color Plus 37 54 69
(m)
1995 Levi’s Levi’s 38 45 18
1997 Excalibur Arvind Mills 21 40 90
1997 Peter England Madura Garments 70 90 29
1997 Freelook Polki Garments (m) 28 42 50
1997 Givo Givo 28 42 50
1998 TNG TNG 40 60 50
1998 San Frisco Madura Garments - - -
1999 Scullers Indus League 26 100 385

Indus League
1999 Indigo Nation
1999 Parx Raymond 55 75 36
1999 Crocodile Crocodile 19 26 37
1999 Easies Easies 22 37 68
1999 Provogue Provogue 21 50 138
1999 Elements Madura Garments
2000 Wrangler Arvind Mills - 10 -
2000 Manzoni Raymond - - -
2000 Wills Sport ITC 5 -
2001 Be: Raymond - - -

- Lee Cooper Lee Cooper
32 40 25

- Pantaloon Pantaloon 9 12 33
- Weekender Weekender 40 45 12
- Woodland Woodland 28 40 43
- Elysee Madura Garments
- Byford Madura Garments
- Ruggers Arvind Mills
- Ruff & Tuff Arvind Mills

Indus League
- Ironwood

Appendix 3: Levels of Competition

This figure shows how a customer tries to satisfy his secondary needs of making a
lifestyle statement. At the outer level once he has chosen garments, he follows a series of
steps to arrive at a decision: whether to go for branded or unbranded wear.
GARMENTS ORNAMENTS
WATCHES
READY TO STITCH
FORMAL SEMI FORMAL
ETHNIC SPORTSWEAR
HIGH LOW
PRICE PRICE
BRANDED
UNBRANDED
MID PRICE
KNITWEAR DESIGNER WEAR
UNDERGARMENTS CASUAL
READY TO WEAR
FOOTWEAR SUN GLASSES CAR

Appendix 4: Results of ORG MARG Survey
The tables and the graphs shown below have been drawn based on the perception of
people from actual surveys.
Segment Leader (Rank 1) Challenger (Rank 2) Challenger (Rank 3) Size (Rs Cr.)
Branded Womens Wear
Western wear Benetton Lee Allen Solly -
Branded jeans Lee Levis’ Pepe 83.8
Branded Kidswear
Kidswear Weekender Benetton Gini & Jony 545
Branded MensWear
Shirts Allen Solly Peter England Louis Philippe 2,016
Trousers Allen Solly Lee Park Avenue 675
Jeans Lee Levis’ Killer 691
Suits Park Avenue Raymond Givo -
Branded SportsWear
T-Shirts Adidas Lee Nike -



Appendix 5: Untapped Opportunities

There is huge untapped market mainly among the women’s wear and kid’s wear. A
potential growth of 40 to 60% in almost all segments of women’s wear just through
branding can be achieved. There is negligible branding penetration in Indian ethnic wear
segment.
Categories with considerable potential in womens’ wear:

• Saris and Salwar Kameez (Indian ethnic wear)
• Lingerie and intimate clothing
• Maternity wear
Saris
• Market estimated to be worth Rs 7,100 Crores, of which branded 30%
• Account for 44% in value terms of total spent in women’s wear.
• Indian women, despite adding on contemporary apparel, will buy more saris
Salwar Kameez
• Current market estimated to be Rs. 1,900 Crores
• Potential for branded segment to be worth over Rs. 1000 Crores
• Room for 4 to 5 national brands, each worth Rs. 50 – 100Crores
Maternity wears
• Estimated market size is Rs.1000 Crores p.a (calculated at 3.3 million SEC A
pregnant women spending Rs. 3000 on apparel during pregnancy
• )
• Product benefits sought by consumers conducive to branding (comfort, quality,
emotional involvement)
• Attractive from brand perspective (standardization, manageable SKUs, mass
manufacturing)

Lingerie and Intimate Clothing

• Women’s inner wear is the highest growing apparel category across all income
groups
• Market for ready made lingerie and intimate wear is valued at Rs. 1500 Crores, of
which Rs.350 Crores is branded.
• Currently, lack of specialized and organized retail ambience and efforts to educate
and upgrade consumers.
• Product benefits sought by consumers conducive to branding (fashion, comfort,
quality and performance, element of fantasy)
• Opportunity from brand perspective (standardization, manageable SKUs, mass
manufacturing)
Children’s Wear
• Total market size for children’s wear estimated to be Rs. 7200 Crores, of which
the branded segment accounts for Rs. 550 Crores.
• Very few national brands
• Categories with considerable potential:
o School uniforms
o Infant clothing
School uniforms
Current market size estimated to be Rs.1750 Crores. Assuming a 30% conversion into
branded wear, the potential market can be worth Rs.500 to 600 Crores.
• No fashion related unpredictability
• Opportunity of offering consistent and good quality products at a good price (with
maintenance service as a differentiation)
Infant Clothing
• Estimated market size for branded infant clothing is Rs. 1000 Crores (calculated at
Rs. 3000 over two years X 3.3million infants born in SEC A families

• ).
• Market dominated by small retailers, with hardly any national brand
• Brand and quality consciousness among parents for surrogate products (diapers, toys)
indicative of a ready market.
• Product attributes sought by parents (comfort, quality, emotional involvement)
conducive to branding.
• Attractive from the brand perspective (standardization, value and quality
propositions, mass manufacturing)
There there is opportunity in branded women’s wear and children’s wear for Rs 6200
crores waiting to be tapped
..

Bibliography
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Boyd, Jean-Claude Larreche, Irwin.
6. Competitive Advantage, by Michael E. POrter, Collier Macmillan Publishers
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Dealing With Competition In Readymade Wear Industry

3. Industry Concept of Competition...............................................................................13

4. Market Concept of Competition.................................................................................19

5. Segmentation of Readymade Wear Market .............................................................20

Marketing Management 2 Application Exercise

5.1 Women’s Wear.........................................................................................................20

Perceptual Map of Men’s Wear......................................................................................31

6. Overview of major players in men’s wear ................................................................32

Marketing Management 3 Application Exercise

7. Strategies of Madura Garments.................................................................................53

Appendix 1: Segmentation in Global Apparel Market................................................75

Appendix 2: Timeline of major brands..........................................................................76

Appendix 3: Levels of Competition................................................................................79

Appendix 4: Results of ORG MARG Survey................................................................80

Appendix 5: Untapped Opportunities............................................................................83

Marketing Management 4 Application Exercise

Marketing Management 5 Application Exercise

Strategies for Market Leader

Marketing Management 6 Application Exercise

• Primary objective of the firm.

Future strategies for Madura Garments

Marketing Management 7 Application Exercise

1.1 Changing Consumer perceptions

Traditionally, Indians preferred custom-made clothing and the concept of ready-to-wear

Marketing Management 8 Application Exercise

The Branded Wear Market

Marketing Management 9 Application Exercise

Brand recognition essential

Buyers Industry Competitors Suppliers

Price conscious market Presence of large number of Switching costs of suppliers

HIGH BARGAINING POWER HIGH INTENSITY OF LOW BARGAINING POWER

Ready to Stitch for primary

Marketing Management 10 Application Exercise

2.1 Segment rivalry

2.2 Threat of new entrants

Marketing Management 11 Application Exercise

2.3 Buyer power

2.4 Threat of substitutes

2.5 Supplier power

The suppliers in this case can be classified in three groups:

Marketing Management 12 Application Exercise

3. Industry Concept of Competition

3.1 Number of Sellers and degree of Differentiation

Entry, Mobility and Exit Barriers

Marketing Management 13 Application Exercise

Marketing Management 14 Application Exercise

Marketing Management 15 Application Exercise

Marketing Management 16 Application Exercise

Degree of Vertical Integration

Marketing Management 17 Application Exercise

Marketing Management 18 Application Exercise

4. Market Concept of Competition

Marketing Management 19 Application Exercise

5. Segmentation of Readymade Wear Market

5.1 Women’s Wear

Problems associated with women’s wear

• Standardization of fits – Women expect customization in terms of fit. Hence a ladies

Factors influencing buying behavior of women

Marketing Management 20 Application Exercise

Premium Middle Economy

Marketing Management 21 Application Exercise

Marketing Management 22 Application Exercise

Perceptual Map of Women’s Wear