Sitaram Textiles Ltd.

Submitted By:
Group 4

Introduction
State owned textile mill with a product line of cotton
fabric
Located in Trichur, Kerala
Product mix consisting of yarn and varieties of cotton
textiles including mulls, poplins, etc.
Capacity utilization was low for processing cloth
Stiff competition from power loom sector in weaving
process
Company was working in traditional distribution chain
of agent, wholesaler and retailer
One agent in Tamil nadu, one agent in Andhra
Pradesh, three agents in Kerala

Sector wise production of fabrics

25000
20000
15000
10000
5000
0

Mill Sector
Handloom Sector
Powerloom Sector

Fabric production
20000
18000
16000
14000
12000
10000
8000
6000
4000
2000
0

Cotton
Blended
100% Non - Cotton

Problem Identification
Poplin not generating adequate sales
Break even at 190 million
Current sales is 131.4 million
Competition from unorganized sector in low cost
segments
Competition from organized players in premium
clothing
Competition from blended fabrics, as substitutes

Product Line Analysis

Existing product lines consist of poplins, mulls and
printed cotton varieties
Poplins

Major product line of Sitaram Textiles

Substantial quality difference
Not significant price difference
Strong presence in South India, women in South India are the
major users of underskirts

Cotton
In rural areas preference was high for well known brands
Support from advertisements for branded bed sheets and lungies
School administrators are in favor of mill products
Potential market for industrial workers
Higher income groups are having greater preference for branded
items
Dealer preference for brand name and quality

Various Channel Options

Agent Wholesaler Distributor
Traditional Approach
Direct supply to distributor
One distributor in an area instead of multiple
wholesalers
Use of distributor chain
Direct contact with schools/ institutions

Competing Products
Poplins
High
Quality
Dhoties
Uniform
Suiting
Uniform
Shirting

Fabrics
for
brassiers
Bedsheet
s and
Lungies
Nighties

Intro Into Blended Fabrics

Blended fabrics were mainly used for outer wear
whereas cotton was for both
Used in
Nighties
Chudidars
School uniforms(shirts and suitings)
Low cost items about 30% cheaper than premium
products
High difference in quality

Analysis of Blended
Products
Nighties
Available at
cheap prices
from Mumbai
and Kolkata
at Rs.3050/piece
Not made in
Kerala
Demand not
very high
Changing
taste

Chudidars
Cheaper
garments
from
Ahmedabad
and Mumbai
Wholesale
and retail
needs to
keep more
stock for
blends
compared to
garments

School
Shirtings and
Suitings
Focus on
Quality
Purchased by
school
administratio
n and
organisations
for industrial
workers
(50%)

Internal Analysis
Strengths
High Quality
Quality standards approved by SITARA
Brand awareness
50% of wholesalers
30% of retailers
Well spread out distribution network
including agents->whole sellers->retailers
Weakness
Low capacity utilization
Company in Loss

Internal Analysis (Contd.)

Area

Comment

No. of agents

Mangalore

High brand awareness

No competition from unorganized
players

1 Same for NK

North Kerala

No competition from unorganized

players

2, 1 covers CK

Andra Pradesh

Drop in demand

South Kerala

No established Network

Tamil Nadu

C&F agent

1, Same for CK
1

Market Analysis
Blended clothes a high growth area (Appendix 6)
Major volume for cotton is in

Dhoties
Ladies dress material
Lungies
Bed sheets

Major Volumes for blends

Coating
Suiting/drill
Shirting
Ladies dress material

In cotton better quality poplins and poplins of 1.5 m width

drivers
Demand for dhoties on the decrease

Cotton
Product

Fabric

Quality

Competition

Price(Rs)

Underskirts

Poplins
(1.5m)

Very High

Low

Premium
High

Dhoti

Cotton

High

High Brand
Loyalty

Fine cloth

Cambrics

Very High

Low

Na

Bedsheet and
Lungies

Cotton fabric
with or
without
printing

Medium

Low cost player

from Erode

Very low

Branded Lungis
and Bed sheet
Thin soft cloth

Cotton fabric
with or
without
printing
Good
Mulls

Medium

Organized
players
HIgh

High
(supported
by
advertisem
ent)
Low

Recommendations- Short
Term
Product
Poplin
Produce 1.5 m variety more than .9m variety

Printed Clothes

Price
Keep the price at same level

Promotion
Push the cotton products by giving turnover discounts
Capacity utilization can be increased

PoP advertising in premium areas

Reduce the turnaround time to retailers and

Place
Push premium products in North Kerala and Manglore
Create a separate dealer for TN, rather than a C&F
Since dealers pay a critical role in sales

Analysis - Blended
Product
Underskirts

Fabric
blends 1040%

Quality

Competition

Price(Rs)

Both blend
Low, Demand not
met

Brassieres Bizzi Lizi (PV) Medium

23 - 31

Salwar
Nightie
Dhoti

all
three/blends
Bizzi Lizi (PV)
Chiffon Blend

High

High, from low cost

players North
Single Player
High

Blend

Low

High

18 to 35/m
High
Very low
(50%)

Uniform
shirting

PC(68-32)
blends

Medium

Mills
Process house

25-27.5
20

Uniform
suiting

Blends
Blends

Medium

Low cost players

from Surat

20
20

Recommendation-Long term
Company should get into blended fabrics
Bizzi Lizi (PV)
PC

Develop a sales team to sell to institutional

customers
Company can act as a supplier to branded
players as they have good quality
Pull out of Mulls market
Company should position itself as a premium
player supplying to branded players and
institutions along with retailers