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Marketing Management > Leather Marketing project -By Meheer Thakare .

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_____ Our Team (Grp no.2) _____

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Name Sourabh Bagree Sharan Bhalla Altaf Bhayani Vikram Rajput Rohit Salesha Sanjay Sadanand Ankit Shah

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Meheer Thakare

Points under consideration:

1)

Scanning the Environment.

2)

The different products and variations we are going to offer.

3)

Choosing an appropriate Brand name.

4)

Deciding the Labeling strategy.

5)

Deciding the Packaging of the products.

6)

Deciding the Pricing strategy.

7)

Deciding the Advertising and Promotion Strategy and justifying it.

8)

Studying our product and comparing it competitors. How can we differentiate our product?

with

9)

Deciding the Distribution network and justifying the same.

10) Deciding and justifying the geographic location. Which geographic location will we target more? Why?

11) What time of the year will we introduce the product in the market? Justifying the same.

Overview: Leather Industry in India, occupies a place of prominence in the Indian economy, in view of its massive potential for employment, growth and exports. There are a large number and variety of leather products available and sold in India. First and foremost this includes footwear, which constitutes the majority of the leather market. There after there is leather furniture, garments, fashion jewellery, Men and Women Leather Accessories etc

Features of Leather Sector in India:


Employs nearly 2.5 million persons. A large part (nearly 60-65%) of the production is in the Small/Cottage Sector. Annual export value is about to touch about 2 billion US dollars. Amongst top 8 export earners for India. Endowed with 10% of the world raw material and export constitutes about 2% of the world trade. Has enormous potential for future growth.

There are also numerous types of leather available in India. But the ones most commonly used and preferred in Indian climate are Dry Mill, Cow Softy, Sheep Napa and Buff Calf. The process of making leather is as follows. The raw animal hide is sent to the tanneries, where it is cleaned, processed, dyed, dried and polished, after which it is available and ready for further use. Various Leather product companies buy leather in bulk from these tanneries and then use them in their respective products.

About our product range: We are marketing a range of exquisite Leather accessories for men. To start with this range would include premium quality leather belts, leather wallets, Portfolios (Mens Office Bags) and leather key chains. Finer details of our product range are explained in the following pages.

1) Scanning the Environment:

1] There are a number of products available in the leather accessories range. For e.g. Leather bags, purses, wallets, belts, goggle cases, business organizers, passport covers, credit card holders, key holders and key chains, jewellery boxes, picture frames, brief cases, back packs and desk accessories to name a few. 2] The highest selling products in the mens accessories range in the descending order are leather belts, wallets, portfolios and key chains etc 3] There are many players in the mens leather accessories in the market and there is stiff competition among them. Following is a summary of major players in each product segment along with their price range.

Belts: Sr.n o 1 2 3 4 5 6 7 Brand Name Allen Solly Van Heusen Bullchee Marco Ricci State Express Leather Plus Le Buck Starting Price (Rs.) 599.00 599.00 395.00 495.00 450.00 175.00 250.00

Wallets:

Sr.n o 1 2 3 4 5 6 7

Brand Name Wenz Bullchee Hidesign Easun State Express La Salle Remo

Starting Price (Rs.) 200.00 350.00 445.00 395.00 400.00 425.00 399.00

Portfolios: Sr.n o 1 2 3 4 Brand Name Samsonite Hidesign La Salle Unbranded Starting Price (Rs.) 3700.00 4295.00 3000.00 2750.00

Key Chains: Sr.n Brand Name o 1 Unbranded Starting Price (Rs.) 50.00

4] These leather products are available in all different Organized Retail Merchandise Store chains like Shoppers Stop, Life Style, and Pantaloons etc. These stores have separate corner for leather accessories. Apart from these stores, leather accessories are available in leather boutiques and gift shops.

2) Product Range & Variety:

1] As briefed earlier, our product range would include:

a} Leather Belts b} Leather Wallets c} Leather Portfolios d} Leather Key Chains

2] We chose these products out of the entire leather accessories range because they are the highest selling products in the order. Although, the ladies purse segment also makes very high sales, if we were to survive in this segment, we would have to keep a very large variety and mix of designs, which is not possible for us as a new entrant in the market. Hence we have kept limited variations and designs to start with.

3] Before giving the variations, we shall explain the features of most commonly used leathers.

Sr.N Leather Type o 1 Dry Mill 2 Cow Softy 3 Buff Calf

Features Strong, Sturdy, Soft, Granular Strong, Very Soft, Plain Very Strong, Sturdy, Thick, Hard

Sheep Napa

Delicate, Very Soft, Thin

4] Depending on the feature of the product and leather we have decided to keep the following product variety:

Belts:

Variety No. 1 2 3 4

Leather Italian Italian Buff Calf Buff Calf

Type Formal Formal Casual Casual

Colour Black / Brown Black / Cherry Black Brown

Within these 4 types there would 3 different types of buckles

Wallets:

Variety No. 1 2 3

Leather Dry Mill Dry Mill Cow Softy

Colour Black Brown Black

4 5 6 7 8

Cow Softy Sheep Napa Sheep Napa Buff Calf Buff Calf

Brown Black Brown Black Brown

Portfolios:

Variety No. 1 2 3 4 5 6 7 8

Leather Buff Calf Buff Calf Buff Calf Buff Calf Cow Softy Cow Softy Cow Softy Cow Softy

Design 1 1 2 2 1 1 2 2

Colour Black Brown Black Brown Black Brown Black Brown

Key Chains:

Variety No. 1 2 3 4 5 6 7

Leather Cow Softy Cow Softy Cow Softy Cow Softy Buff Calf Buff Calf Buff Calf

Design 1 1 2 2 Double Photo Double Photo Double Photo

Colour Black Brown Black Brown Black Brown Cherry

3) Brand Name: Klasse

1] The essentials in any brand name are:

a} It should be distinctive and easily remembered. b} It should not offend any particular section of the society. c} It should depict the features of the product.

Leather products that people use, is usually their fashion statement. It symbolizes their sense of style, their class. We were looking for a brand name which would appeal to our target costumers and satisfy their styling ego. Our products are truly a class apart and each of our product is a classic,. Thus the brand name (Klasse), truly fits and complements the product.

4) Labeling: 1] The labeling of the product should be such that it is visible till the product lasts. 2] It should remind of the brand name each time the customer looks at it. 3] At the same time, it should be silent and not too bold. 4] We would be labeling our different products as follows:

Belts: We would be doing gold emboss printing on the tail of both sides (in case of formal belts) and on the inner side (in case of casual belts) of

the belt because it is permanent, has good visibility and is seen every time the customer wears and removes it. Also because it is at his tail, it is not seen when the person is wearing it. Wallets: On wallets we would be doing blank embossing on the inner left side of the wallet, so that every time the person opens his wallet to take out money, he sees the brand name. It is permanent, visible and at the same time not striking to the eyes, as most people do not like printing done on the wallet. Port Folios: On port folios which have zip openings we would be doing silver metal labeling (which have the brand name encrypted on them) on the bottom right corner and one those which have opening flaps, on top of the lock. Such labeling would be ideal for the bags, as such small metal accessories look good on the body, it adds value, makes it look rich, and at the same has permanent visibility to the user and others as well. It is a constant reminder of the brand. Key Chain: On key chains we would be doing blank embossing on the centre of the reverse side. If we do it on the front side, it spoils the elegance of the product. The labeling here would be permanent although silent.

5) Packaging: Packaging of a product plays a vital role in determining its sales. It has to be attractive, so that it catches the eyes of the customer. Also at the same time, it has to be strong and sturdy because it has to travel long distances. Mostly in case of leather goods, when the products are on display they are not kept with their packaging, but naked. This is because a person wants to feel, check the product again and again before buying it. However when the customer buys it, it is given to him

packed in a worthy box or appropriate packing. A person might buy a leather product for him self or to gift some one. If he buys for himself, the packaging is not of much use to him but if he has to gift it to someone he definitely opts for a one which has a good packing. Keeping in mind the above points, we have decided the packaging of our various products as follows. Belts: Belts would be coiled vertically and packed in thin hard board boxes with the front side upper half having a transparent plastic window, from where we can see the product. The lower half of the front side would have a white label stuck on which the following details would be printed: code number, style number, Colour, size, M.R.P. The two sides would have the Brand name and the photographs of our other products printed on the box. This would be a good medium for advertising, as the one who buys or receives it also becomes aware of our entire product range. The back side would have our company details such as the name and address printed. The base colour of the box would be gold.

Wallets: The Wallets would be packed in hardboard boxes. The bottom and the sliding cover would be separate. The bottom would have case / groove in which the wallet would fit. The cover which slides in would be made of thick transparent plastic through which we can see the actual wallet. The Back of the box would contain the Brand name, product details and the photographs of our other products. The base colour of the box would be gold.

Port Folios: Portfolios would have a comparatively simple packaging as they are too huge and bulky to be packed in boxes. They would be packed comfortably in cream coloured soft cotton bags of the appropriate size. The brand name would be printed in bold letters on the bag. We would not print the photos on these bags as photo printing on cloth becomes quite expensive. This bag can afterwards be used for any other purpose. No body would throw a cotton bag and thus it would be a permanent reminder of the brand name.

Key Chains: Key chains would be packed in small boxes of appropriate sizes similar to the wallet. The sliding boxes would have a transparent cover on the top and the details printed on the back. Here we would not be providing the photos on the back of the box as the space available is too less.

6) Pricing Strategy: To survive and carve a niche in a competitive market it is very important that the pricing strategy is rightly decided. In our case we have made a close study of the prices prevailing in the market. We want a brand image to be built hence we do not want the prices to be very low at the same time we want the customers to buy out product without thinking much about the price, so we have kept the prices quite moderate. In case of any brand, until and unless it is from a recognized corporate house, which is launching its products for the first time in the market, the prices have to be kept moderate, especially when the target market consists of middle class. It is only when the brand is recognized and develops a strong image, that it can

command a price. Keeping these things in mind we have decided to keep our prices as follows: Sr.no 1 2 3 4 Product Belts Wallets Portfolios Key Chains Price Range (Rs.) 350 to 450 230 to 350 2750 to 3250 50 to 80

These would be the suggestive MRPs of our products. However the rates would drastically differ in case our corporate marketing (which is discussed in details in the following page).

7) Advertising & Promotion Strategy: 1] The leather products which we are marketing have a demand not only in the retail market but also in demand by big corporate houses for gifting purposes. 2] We would have a separate corporate marketing cell, within the company along with the retail marketing force. We would give equal importance to both the divisions as in one, we get the price and in the other we get the quantity. 3] We would be retailing our products through Organized Retail Merchandise Store chains like Shoppers Stop, Life Style, Pantaloons etc. and also through leather boutiques and gift shops. We would also be doing corporate marketing of our products in companies from different sectors like Pharmaceuticals, IT, Cement, Engineering, Auto, Oil & Petrochemicals, Lubricants, Banks, Paints and Publication houses. As companies in these sectors have continuous and huge requirement of gifts, where leather products fit ideally. 4] For our retail promotion, we would:

a} Give exciting trade schemes to our stores and distributors, so that they give us more display space and place our products at the right and prominent place in their stores. b} Put up signages in the form of translites displaying our product photographs and brand name in exclusive stores and put up stylish boards displaying our brand name in gift shops and boutiques to create a brand awareness. As Jagdeep Kapoor has rightly said, Jo Dikhta Hai, Woh Bikta Hai

c} Carry out desk promotions in huge stores where in for an inaugural period, we would be giving free gifts with our products. For e.g. we would gift a leather wallet free with a Port Folio, or an elegant watch in which our branding is done, free with the portfolio. A key chain free with a wallet or a belt. An elegant pen free with a key chain. d} Tie up with other renowned brands of perfumes or clothing, to give our products free with their products. For e.g. a wallet free with YSL Mens perfume or a belt free with an Allen Solly trouser. e} Take part in National Consumer Exhibitions like Times Utsav, MITF, Indian Consumer Exhibition etc . which take place during festive seasons and attract huge audiences. The participants make very good sales in such fairs.

5] For our Corporate Promotion, we would: a} Take part in Trade Fairs such as Giftex and Gifts India, which basically attracts all gift traders, gift shop owners, and companies which have huge gifting requirement. These are a very good platform for the exposure of our products in the corporate gifting world. Here we would come in direct contact with people who are interested in buying our products

(Company representatives and Gift shop owners) and also those who are interested in selling our products (Traders), because it is not practical for us to reach to all prospective buyers in different parts of India. b} Send our companys marketing representatives to various afore-mentioned companies for a presentation of our products by prior appointment with the concerned person and do the required follow up. These companies buy gifts in bulk and their quantities range from 500 to 15,000 pcs. Although it is impossible to get the rate which we get in the retail market, the quantity compensates for more than that.

c} Send our product catalogue as mailer to different companies where we cannot reach directly. This would give them an idea of our products and in case they have a requirement, they can contact us for the same.

8) Studying our product, comparing and differentiating it with competitors product: Our products have many salient features which differentiates them from the rest. They are as follows: 1] Quality: Quality would be our winning point. When a person buys a leather product, he definitely looks for quality and long lastingness. Quality also includes finishing, stitching, lining and accessories. Let us explain each of them separately: a} Lining: Lining means the cloth which is used behind the leather. We would use the best quality cloth which is attractive at the same time sober, which gives rich look to the product. Generally many of our competitors do not give much importance to the lining as they feel only the visible outside of the product should be of good quality.

b} Accessories: This includes the zips, metal plates for branding, and buckles for belts. The accessories would be of the best quality. They would be rust proof. The buckles would be imported in complete lotts so that our competitors cannot imitate our buckles. These are not given much attention by our competitors and they start wearing off after some time.

c} Leather Quality: The quality of leather determines, the look and the life of the product. We would be doing no compromise with the same. Some of our competitors make some adulteration in the leather by mixing it with leatherite. This reduces the life of the product. d} Stitching: Stitching is a very vital part of a leather product. It can either make it look very rich or sub standard. The neatness of stitching, colour of the thread would be taken proper care of. Some competitors use all materials of good quality but are unable to stitch the product properly. It is here that they lose their customer. 2] Pricing: Our pricing is nor too expensive nor very reasonable. It is very moderate. Most of our heavy competitors are much more expensive than us, in case of all products. Few low quality ones are also cheaper than us. They are expensive because they very well established brands and have very high overheads. We being a new entrant in the market do not have many over heads to start with. Thus if we are giving good quality products at moderate prices, people should definitely like and buy them. 3] Availability: Our products would be made available to all top departmental and Mens Wear stores, leather boutiques and gift shops. Most of our competitors do not have such a wide reach to the market. Either they are only limited to big showrooms or the less known brands are only limited to small shops.

4] Packaging: The packaging provided by us especially for the port folios and key chains is very unique; no other competitor provides such packaging.

Also a very unique thing about our packaging is that, where ever possible, we have given the photographs of our other products on the box of the product. This is a very good medium of displaying and advertising for our products. None of our competitors have tried this with their packaging till now. 5] Advertising and Promotion: The advertising and promotion techniques used by us (as discussed earlier) are very unique and have not been used by any of our competitors in the past. This is where we prove to be more creative and hopefully more successful in a short span of time.

9) Deciding the distribution network and justifying it: Our distribution network would be very simple. There would not by many intermediaries. We are basically targeting Metros and Second Metros as our target Market.

We would be supplying directly to stores like Shoppers Stop, Life Style, Pantaloons, D-Mart, Big Bazaar, Cross Roads, Archies, Hall Mark, because these stores have centralized purchase system. So there is no point in having any intermediary here. Also the stores want to procure directly from the manufacturer. Also in case of corporate marketing, we would be supplying directly to the companies which are accessible to us.

However, it is not practical to reach to all possible clients. For this reason, we would be tying up with traders, who go to the clients, where we cannot. Now to reach out to small gift shops, Exclusive Mens wear stores, and leather boutiques in different cities, it is not possible to supply to them individually. Hence, we would be having one distributor in each city who would be supplying further to the small stores. This distributor would stock our material and would cater to the small and regular requirements of these stores. As far as the terms of sale are concerned, we would be selling to the big stores which have centralized buying, on consignment basis. This is because; none of the stores in India buy outright, as they do not want to take the risk on them selves. However, the distributors in various cities would be given material on outright basis. It is their look out to sell the material, they buy from us. We would recommend them the stores in which they can supply as per our knowledge and data base. However, the discretion to sell the material is entirely on the distributor.

10)Which geographic location will we target more? Why? The products we are manufacturing and marketing are actually life style products. These products are not necessities. They symbolize the class, taste and style of a person. Also our target audience is Urban Males in the age group of 16 to 60

years. Most of these people would be office going and would be from a middle or upper middle class back ground.

It is quite obvious that people of such characteristics cannot be found in rural areas. Thus marketing our products in rural areas is out of question. However such people can be found in large numbers in metro and second metro cities, where there is a huge office work force, who have the willingness to use and ability to pay for our products. To begin with we would start our operations in the following 14 cities: New Delhi, Mumbai, Kolkatta, Chennai, Chandigarh, Jaipur, Ahmedabad, Pune, Nagpur, Bangalore, Hyderabad, Indore, Raipur, Lucknow.

11)What time of the year will we introduce the product in the market? Why?

We would introduce our product range before Diwali i.e. somewhere in September when people usually start their purchasing for the festive season. This is the season when people generally buy new clothes and accessories for themselves and also for gifting to others. This season is followed by Christmas and New Year which is also a great time for buying gifts for near and dear ones. Also the rainy season ends by September, during which the sales are down. So, the product range gets entire 8 months before the next rainy season to establish it self in the market. Thus we feel September would be the right time to introduce our product range in the market.

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