Marketing Strategy of Khadims Group 7

Prepared by Group 7

Telecom sector

Marketing Strategy of Khadims

Contents
................................................................................................................ 1 Contents............................................................................................................................... 2 1.INTRODUCTION:................................................................................................................. 3 3.The Marketing Mix of Khadims..........................................................................................7 a)Product :......................................................................................................................... 7 b)Pricing:........................................................................................................................... 8 c) Promotion:..................................................................................................................... 9 d)Place(Distribution):.......................................................................................................13 4.Brand Positioning:............................................................................................................16 5.Consumers :.................................................................................................................... 17 6.Competition and Challenges:...........................................................................................18 7.Milestones:...................................................................................................................... 19 8. ACHIVEMENTS:............................................................................................................... 20 9.Conclusion:...................................................................................................................... 21

Telecom sector

Marketing Strategy of Khadims

1.INTRODUCTION:
A name now synonymous with the shoes that India walks in, Khadim's made giant strides into the world of footwear in the year 1965 when Mr. Satya Prasad Roy Burman took over a small shop in Chitpur and turned it to a major brand. Khadim India Limited operates as a footwear retailer in India under the brand Khadims. It also engages in the manufacture and sale of footwear. The company operates approximately 620 retail outlets in 22 states. It also operates two retail stores under the brand Khadims Egaro, which offer garments, footwear, jewellery, gold, and groceries. The company was formerly known as S.N. Footwear Industries Private Limited and changed its name to Khadim Chain Stores Private Limited in 1998. Later, it changed its name to Khadim Chain Stores Limited in June 2005 and to Khadim India Limited in August 2005. The company is based in Kolkata, India. Khadim's journey into Gold Jewellery business dates to January 07, 2005 opening its first Gold Jewellery retail unit in its own lifestyle large format retail store, at Kanchrapara, 50 km from Kolkata with the name of "SONA KHAZANA". It was the first jewellery brand to bring Hallmark Jewellery in 24 Parganas (N) District. It has four such stores. In 2004,Khadim's forayed into the business of superstores by launching 30,000 sq ft Khadim's Khazana at Kanchrapara. Located at about 60 Kms from Kolkata and easily accessible from 24 Parganas (N), Nadia and Hoogly, the idea behind this endeavor was to introduce one stop shopping experience to the people residing in the suburbs. The sprawling four-storied centrally air-conditioned superstore has different sections like apparels, cosmetics, jewellery, footwear, homefurnishing and grocery. It also offers Khadim's footwear, the flagship brand and Sona Khazana, finely crafted hallmarked gold jewellery from Khadim's

Telecom sector

Marketing Strategy of Khadims

2.SUMMARY OF THE INDUSTRY:

RETAIL: India has topped the AT Kearneys annual Global Retail Development Index (GRDI) for the third consecutive year, maintaining its position as the most attractive market for retail investment. The Indian retail market -- one of India's fastest growing industries -- is expected to grow from US$ 350 billion to US$ 427 billion by 2010. According to Euromonitor International, the Indian Retail market will grow in value terms by a total of 39.6 per cent between 2006 and 2011, averaging growth of almost 7 per cent a year. Modern retail accounts for about 4 per cent of the total retail market in India. This share is expected to increase to about 15 -20 per cent with the entry of a number of corporates into the segment. Modern retail formats have grown by 25-30 per cent in India in the last year and could be worth US$ 175-200 billion by 2016. Retail space: Retailers in India are the most aggressive in Asia in expanding their businesses, thus creating a huge demand for real estate. Their preferred means of expansion is to increase the number of outlets in a city, and also expand to other regions, revealed the Jones Lang LaSalle third annual Retailer Sentiment Survey-Asia. Driven by changing lifestyles, strong income growth and favourable demographic patterns, Indian retail is expanding at a rapid pace. The country may have 600 new shopping centres by 2010. Mall space, from a meagre one million square feet in 2002, is expected to touch 40 million square feet by end-2007 and an estimated 60 million square feet by end-2008. Size of the Indian Retail Sector: The Indian retail sector is estimated to have a market size of about $ 180 billion; but the organized sector represents only 2% share of this market. Currently, Indian retail distribution is completely fragmented with about 12 million players. The majority of these are very small players operating from small shops (below 50 square feet in size) and handcarts. These retail outlets are spread across the country in over 5,000 towns and 600,000 villages. Most of the organized

Telecom sector

Marketing Strategy of Khadims

retailing in the country has just started recently, and has been concentrated mainly in the metro cities. India is the last large Asian economy to liberalize its retail sector. In Thailand, more than 40% of all consumer goods are sold through the super markets and departmental stores. A similar phenomenon has swept through all other Asian countries. Organized retailing in India has a huge scope because of the vast market and the growing consciousness of the consumer about product quality and services.

Telecom sector

Marketing Strategy of Khadims

Footwear Industry: Footwear is a necessity to every person and at the same time is now a lifestyle as also a performance enhancement product; and is thus a segment with vast potential. The India footwear market is estimated to be worth Rs. 137,500 Million and constitutes just about one percent of Indian retail. India is the second largest footwear producer in the world after China. About 37.8 percent of Footwear retail is the organized segent, which qualifies it as the second most organized retail category in India, next only to Watches. The footwear market can be segmented into a number of categories: Premium/High-end, Medium priced, low priced and plastic slippers/leather strapped one. Again, organized footwear retail has a number of segments like sports footwear, semi-formal/casual footwear, and formalwear and utility footwear. In terms of number of units sold in 2005-06, Casual comprises more than 50 percent of the organized branded footwear market in India, followed by mass/economy range at about 20% and Sports/active wear and Premium leather footwear at 7-10 percent each. The booming Indian economy offers the prospect of higher disposable incomes and a change in consumer preferences leading to a probable increase in per capita footwear ownership. Even as India's share of the global footwear trade has been insignificant with a share of less than 3%, it could soon change due to a migration in installed capacities from developed to developing countries on account of high wages and environmental issues. In the 2006 Union Budget, the rate of excise duty on footwear with an MRP between Rs. 250 and Rs. 750 was reduced from 16% to 8%, which has helped footwear manufacturers address competition from the unorganized sector and imports. The imposition of an anti-dumping duty by the European Union on imports of certain footwear categories from China and Vietnam created an opportunity for Indian exporters. The Indian footwear industry has witnessed a metamorphosed growth with the advent of new retail brands and formats in the Indian markets. The Industry has grown by leaps and bounds in the last decade with the introduction of new technologies and inflow of investments. The Industry both at manufacturing and marketing sides continues to be fragmented into multiple regions. This is largely because of the large size of the country resulting in local preferences due to the economic, social and seasonal factors and absence of a proper distribution network.

Telecom sector

Marketing Strategy of Khadims

3.The Marketing Mix of Khadims

a)Product : Khadims offers a wide variety of products to its customers. It is the 3rd largest footwear retailer in India in terms of organized footwear retailing. Provides men,women,kids footwear. variety of footwear including ladies, gents & children slippers and sandals, school shoes, sport shoes, hawai chappals and belly shoes. Subrands-Pro,Pedro,Schooldays(kids),softtouch(women), Turk,Pro,Lazard(men)
.Leather accessories like belts, ladies handbags etc Other Business Division- Khadims Sona Khazana for jewellery: 22/22 carat gold certified by

Hallmark Centre (Bureau of India Standards). Wide range of gold jewellery to offer starting from solid gold, meena work, jewellery with precious stone and kundan to name a few.
LFR/SUPERSTORE: apparels, cosmetics, jewellery, footwear, homefurnishing and grocery. It

also offers Khadim's footwear, the flagship brand and Sona Khazana, finely crafted hallmarked gold jewellery from Khadim's

Telecom sector

Marketing Strategy of Khadims

b)Pricing: A comparison of pricing strategies of three brands available in market of eastern India: BATA PRICE RANGE DURABILTY DESIGNS QUALITY OF LEATHER Rs 89- 5499 Higher Less Pure SHREE LEATHERS Rs. 79-799 Medium Medium Not pure leather KHADIMS Rs. 2002000 Less Higher Pure(Pakka)

Less Variety of COLOUR OF Less THE Variety(Black,White Variety(Black,White Colors PRODUCTS & Brown) & Brown)

It offers competitive and affordable prices over the entire range of products.

Telecom sector

Marketing Strategy of Khadims

c) Promotion: Khadims aims to establish itself as a close second to Bata in the market. It advertises heavily in print media, sponsors events. The company addressed the psychological block with aggressive advertising, merchandising and promotional activities. Aggressive marketing has ensured high brand recall amongst customers.

Telecom sector

Marketing Strategy of Khadims

Telecom sector

Marketing Strategy of Khadims

Telecom sector

Marketing Strategy of Khadims

Telecom sector

Marketing Strategy of Khadims

d)Place(Distribution):

Supply chain management Supply chain management involves planning, merchandizing, sourcing, standardization, vendor management, production, logistics, quality control, pilferage control, replacement and replenishment. It provides us flexibility to adapt to changing patterns in consumer behaviour and our ability to add value at various steps/levels. In particular, it enhances our ability to undertake in-house manufacturing, designing and development of contemporary footwear. Logistics and distribution network Distribution and logistics network comprises of three distribution centers i.e. Kolkata, Delhi and Chennai comprising of seven warehouses, five in Kolkata and one each in Delhi and Chennai. Distribution and logistics set up is well networked and allows to fulfill the store requisition within a shortest period of time from generation and receipt of order, which has helped us to optimize in-store availability of merchandise and minimize transportation costs. Strong distribution and logistics network has enabled us to minimize the requirement of a dedicated storage space at every store and instead undertake periodical replenishment of depleted stock. This provides assistance in maintaining an optimum working capital level and thereby minimizing carrying cost. An experienced management team which is complemented by a committed workforce. Our management team comprises of talented professionals who are highly experienced in footwear and retail sector. This has assisted in effective management of the business.

Telecom sector

Marketing Strategy of Khadims

STRATEGY Khadims intend to pursue the following strategies in order to consolidate position as one of the leading operators in the footwear and lifestyle retail segments in India.Growth strategy is based on: Continue to expand retail operations with Flexible Expansion Program Khadims intends to further expand our retail footwear operations by leveraging existing sales and distribution network and apply innovative retail marketing initiatives. They already have a substantial presence in Eastern and Southern markets.They are now in the process of expanding our presence in the growing Western and Northern markets. Strategy in the lifestyle retail segment is to target initially the metros and big towns in West Bengal to expand our lifestyle brand Khadims Egaro. As the brand Khadims is already very popular and enjoys excellent brand equity in these locations, we are confident to leverage the same for our growth in this segment. The same strategy can be replicated in Eastern India and subsequently to other parts of the Country. They also intend to increase our footwear brand and product visibility and sales and distribution network through strategic stores and outlets that will enable to benefit from an increased store density through a lower capital outlay. These smaller outlets will enable to offer our product aimed at the customer demography of the specific outlet and enable frequent renewal of our inventory. They intend to continue to develop our existing network of independent footwear outlets in various cities that sell our products through the appointment of additional distributors for various cities and towns. Expand In New Regions Although Khadims have a pan India presence in the footwear segment, still there are many regions where they have a huge potential to grow. They now have to stretch our presence to these regions also. They will focus on maintaining and reinforcing the image of existing exclusive brand outlets and also introduce footwear to new geographic areas and consumer sectors that are presently less familiar with the brand. Khadims has an established network in east/ south India and are rapidly consolidating network in western and northern India.

Telecom sector

Marketing Strategy of Khadims

Distribution Channels

Khadim has a pan India retail presence marked by owned outlets, excusive dealers supported by other dealers spread across all states. Khadims footwear products are sold through the following channels: Owned Retail outlets: Khadim has its own footwear retail stores across the country. All these stores maintain the same decor and interiors so that the customers have the same feel irrespective of the stores they are visiting. The kind of stock depends on the location and the profile of the people in the particular location. Exclusive Dealers: There are dedicated exclusive dealer outlets spread throughout the county. An exclusive dealer procures its entire product requirement from Khadim and sells the same at the companys M.R.P. Such outlets are in the name of Khadims and are identical in terms of its look and feel as any of its owned outlets. The exclusivity remains in the fact that these dealers have contractual obligation to sell exclusively Khadims product from the premises to which the contract relates and also to comply with the terms and conditions and policies of the company. Under the exclusive dealership agreements, the dealers operate the stores. The expenditure of establishing the stores and holding the inventory is incurred by the dealers. Dealers: like exclusive dealers, these stores also deal mainly in Khadims footwear. Such dealers procure their product requirements from Khadim directly. Multi-brand dealers: These stores sell footwear of various brands and make along with Khadim products. Distributors: Distributors are an integral part of Khadims supply chain. Khadim directly supplies to many exclusive dealers and other dealers. Distributors provide Khadim footwear to dealers and multibrand stores at places where Khadim do not find it feasible to set up their own distribution channels due to factors like own demand. However, these distributors do not supply directly to customers through stores or outlets. Industrial/Institutional: Large industries and private or public institutions who need to buy footwear for their workers can approach Khadim directly for their requirement.

Telecom sector

Marketing Strategy of Khadims

4.Brand Positioning:
The presence of the Khadims brand across user segments has been growing steadily over the period of time. The shift from the unorganized to the organized market is on the rise and the brand Khadims has been a beneficiary of the same. We have centered our brand building exercise on the theme of emotional bonding, which has created the foundation of the Khadims brand. Over the years, Khadims has reinforced emotional connect between the consumer and the product through the following initiatives: A distinctive positioning of the product for the growing middle-class around the unbeatable price value proposition. A responsible extension to the virtues of authenticity and affordability extending from positioning to product to store presentation, leading to a credible recall. A comprehensive exposure across the print, outdoor and electronic media to capture consumer attention A prudent visibility at major entry and exit points of towns helping the brand identify with the floating target population

Telecom sector

Marketing Strategy of Khadims

5.Consumers :
Suman Roy Barman, president, Khadims,claims "we offer our customers the same quality that Bata offers at 60 per cent the prices, We are for the middle class. Our customers are the daily office goers, students and any other daily user of footwear coming and going to his or her workplace." Khadims is the only other footwear company in the country after Bata, which offers products for all ages and all uses such as daily wear, party wear, sports, formal office wear etc. The particular store concept being adopted by Khadim's is to make it suitable to a semi-urban target audience with an ethnic quotient. Khadims basically targets urban and semi-urban population by strategic location of stores in tier 2 and tier 3 towns.They have a very wide range of target customers. Almost all people of any age are their target customers if looked product wise. But their pricing strategy have a very great role in choosing their target customers. The pricing is very normal in other words we can say cheap. So it can be easily understood that their target customers are basically the people who actually belong to middle class or mostly saying the lower middle class of people. If looked age wise children, young, matured and senior citizens are their target customers.

Telecom sector

Marketing Strategy of Khadims

6.Competition and Challenges:

The main competitor of Khadims in footwear is Sreeleather. Because the price of Khadims is just a little higher than of Sreeleathers. Bata is also there but in terms of pricing Bata is much ahead of Sreeleathers. Their target customers are either of higher middle or higher income group of people whether Khadims mostly targets lower and middle income group. Smaller and local companies trying to upscale their brand presence with marketing and by ensuring quality to the customer are posing stiff competition to khadims. The company has finally decided that their legacy systms are not enough to grow bigger and also to combat smaller companies. To achieve this, the company has decided to go ahead with SAP implementation.This is also going to allow the board of directors to access real time information on the quantity of raw material bought, at each location, the price paid for it, the credit offered for it, the time it took to process it, the time it took to reach the shelves of retailers, the time it took to sell it, the credit offered to the retailer and finally the addition to the bottomline from each location. In fact, if the company organises a loyalty programme for its customers, it can also determine where each shoe landed up and how long was it used for what purpose before a new one went from the Khadims factory to replace that shoe. However, owing to its across the spectrum presence it has eroded its product position in the marketing department. Looking closely it appears to be an OEM than a shoe maker. Its high time they took a stand. Also, an increasingly worrying situation for khadims now is the problem of imitation Khadims, who have mushroomed, and are threatening to destroy the 70-year-old brand and goodwill in the customers' hearts. They are devising a special plan to counter this menace and will put it into operation soon. Khadims State-Of-the-art manufacturing facility at Kolkata's newly developed Industrial Estate has been in operation since June 2001. Every stage of product evolution - design, stringent quality control, roundthe-clock production and the practice of the latest technology, under expert designers have further increased the company's competition edge.

Telecom sector

Marketing Strategy of Khadims

7.Milestones:
2011 2010 Opens 600th exclusive showroom Operations begin from the 1,00,000 sqft Central Distribution Centre, Bantala 2009 2008 2004 2001 Implementation of SAP. ISO 9001 : 2008 certification from TUV NORD Opens 300th exclusive showroom ISO 9001 : 2000 certification for the manufacturing facility Started manufacturing of footwear & accessories. Integrated software implemented to automate the entire organization 2000 1993 1981 1965 South Indian operations begin through 4 exclusive retail outlets First retail outlet opens in Kolkata First corporate entity of the group was formed Khadim's Brand acquired by Mr S P Roy Burman, the present Chairman

Telecom sector

Marketing Strategy of Khadims

8. ACHIVEMENTS:
Khadim's - Most Purchased Footwear Brand of Bengal during Puja As per recent revelations of Puja Power, a Brandwatch Bengal Series by Anandabazar Patrika, in the Footwear category, Khadim's has emerged as themost purchased brand during Festival Period 2010 in Kolkata UA and both rural and urban markets in Rest of Bengal, way ahead of other branded players.

Khadim's has emerged as the top footwear brand in West Bengal, as revealed by Brandwatch Bengal, a detailed research report released by Anandabazar Patrika Group, covering 4000 respondents in urban Bengal and over 950 brands.

Khadim's has been ranked as the third most trusted footwear brand in India, behind Bata and Paragon, as per the Brand Trust Report, India Study, 2011. It is ranked at 79 in East Zone, and 237 overall, in the All India Brand Trust Ranking of Top 300 brands of India across different sectors. The Brand Trust Report, India Study, 2011, is published by Trust Research Advisory (TRA). The book is a result of a syndicated primary research on Brand Trust that generated 10,00,000 data points and 16,000 unique brands from over 10,000 hours of fieldwork conducted across 2310 corporate respondents in 9 cities. TRA's study partners in this research were Indian Statistical Institute (ISI) and eNxt Financials, a Tata Enterprise.

Khadim's has won the " Most Admired Footwear Retailer From East India" award in the East India Retail Summit 2011 held at Oberoi Grand Kolkata on 7 & 8 January 2011.

Telecom sector

Marketing Strategy of Khadims

9.Conclusion:

Khadims has focused on quality and pricing and this has been its main unique selling proposition

Demand for Khadims products has been relatively stable as inferred from the sales figures over the past two years

Khadims has been perceived as a brand that is targeting middle aged adults ;however this is set to change with the company launching newer products aimed at younger consumers

Khadims must be wary of intensifying competition from sreeleathers in its core market of in and around Kolkata and smaller local manufacturing units.

Duplicate and imitated products are a cause of great worry.