Raymonds marketing case study

Raymond's Marketing Case Study

A brief history of Color Plus
Launched in 1993, Color Plus created a niche in the
ready to wear market in India with a premium range of
clothing for men. With focus on product innovation and
unique use of colors it has today come a long way since it
was incepted in 1993.

The brand in no time has become the choice of the up
market, trend-savvy, sophisticated and discerning Indian
man and changed the way he dressed. With flagship
stores in the best locations and international service,
Color Plus brought in an International shopping
experience to the country.

The nation saw one of the first retail brands of
international quality grow, attain national acclaim. Our
distribution channel spread not only all over the country
but crossed borders to the Middle East; it continues to
grow with each year with now over 350 shopping
destinations across the country. Today, the brand is part
of the Raymond group.

A brief history of Color Plus
 Color Plus has always used highest quality fabrics
and product engineering techniques that give the user
the unique comfort and tactile feel which no other brand
offers. This is clubbed with the use of colors to give the
sophisticate, yet colorful look that is unique to the Brand.

To ensure that customers get the best product from us,
we have pioneered the techniques like Golf Ball Wash,
Cone Dyed Casuals and Thermo-fused buttoning to
name a few.

These innovations have taken our collection to a whole
new level, making it synonymous with the words "Luxury
& Style".

As a part of the initiative to reward our premium
customers, Color Plus has launched ‘Spectrum’, an
exclusive membership to a plethora of benefits.
Spectrum offers its members reward points on every
purchase, which can be redeemed at any of our outlets
and a host of other benefits and privileges.

Thus Color Plus today is a complete lifestyle brand
complementing every facet of your personality: be it at
work, leisure or those special moments.

Marketing product
Defining Product
Parameters Color Plus Competition
Technical Basic Need, Protection from Loose fabric for local
weather factors stitching.
Local Unbranded Ready to
wear.

Functional Wrinkle Free, Thermo Big Bazaar, West Side,
Buttons, Shoppers Stop owned
Easy to wash, good clothes.
comfort. Koutoun’s, Peter England,
John Players.

Emotional Status, style & Fashion Allen solly, Arrow, Black
Berry, Louis Philippe’s,
Provogue, Zodiac, Wills
Life style

Aggregate Market Factors
Market Size & Growth: Indian Branded apparel market is approximated 2 billion.

 Stages in product life cycle:
Sales turnover is in growth phase with rise of
economy & working class. In India more than 3
lakh family with annual income of 10L plus is
growing at the rate of 10 to 15%. Globally china
is leading producer of fabrics in Asian region.
Indian market is also favorite destination for
major players due to low cost of labor and raw
material.

Sales Cyclicity
Indian ready to wear market, like other sectors,
is affected by sales Cyclicity due to some
factors. Major reasons are Indian culture and
 Total estimated market size for ready to wear
mind set, natural climate like winter (sales of
premium-organized sector is 9000 CR with
warm cloth increases), shopping season during
annual growth rate of 15 to 20% annually.
Diwali etc.
Color Plus turn over during period of 2008-
Profits
2009 with formal ready to wear growth 10% (
There is a global trend of shrinking profit margin
launched color purple club in 2001) & casual
due to fierce competition due to sectoral
ready to wear 15% ( launched 1993).
problems like Inventory carrying cost.

Category Factors
 Buyer Power
Majority of buyers in the industry are individual
consumers. Shoppers are tending to be more loyal to
specific retailers rather than specific brands. This is
more so because the awareness of Indian shoppers
towards brands is moderate. Again, co-existence of
different retailers in the market tends to lower the
customer switching costs. With the growing emergence
of high quality trendy apparels with low-costs offered by
the major retail giants, the customer preferences are
changing for the better.

 New Entrants
The Indian menswear apparel retail industry is growing significantly and thus, this industry is attracting national as well as
international players to step in the arena. Along with them are competing the leading retail giants like Raymond’s, Future
group, Raheja group, Trent. The menswear sector includes diverse product lines, which provide retailers and brands to
identify a point of differentiation in the product lines they offer, which in turn gives significant opportunity for new entrants.
The industry requires low capital outlay, more so in India because the organized retail sector still is in the budding stage;
this increases in turn the ease of setting up independent apparel retail stores. Potential international players need to
understand and adapt to Indian culture and fashion sense. However, low switching costs of the customers imply that they
can at any time easily switch from the existing to a new entree in the apparel store. These all make the threat of entrance of
new players into the market high.

Category Factors- Industry
 Supplier Power  Category Capacity
Key suppliers in this industry include apparel Casual menswear is the fastest growing segment in
manufacturers, wholesalers and raw material
the apparels category. It is growing 25 per cent
suppliers. Such suppliers are mostly small to annually. Since Indian men are becoming sensitive to
medium sized enterprises. With an option to fashion trends, there is a huge scope of expanding the
choose from a number of retailers coupled category of casual menswear by providing diversity
with a rise in raw materials and inventory through differentiation. Currently the category already
costs and also threat to the quality of has various sub categories like knitted shirts & t-shirts,
apparels manufactured by the suppliers fashion shirts, designer t-shirts, v-neck tees, round
for branded clothing, the supplier power
tees etc.
gets strengthened. Also though cost of labour
is low, suppliers of manpower have strong
supplier power. Supplier-switching costs are
also high for the retailers and brands. Thus,
the overall supplier power is hence
moderately high in this industry.

 Substitutes
Substitutes of casual menswear retail stores might include purchases made directly from manufacturers, custom-
made garments tailored and online sales. However, the socio-economic environment of the country does not
see a considerable amount purchases made from manufacturers or from online, due to insignificant levels of
popularity of the concept of online shopping in India coupled with the touch-and-feel purchase psychology of
consumers who can be fulfilled easily by the availability of retail stores. The option for tailor-made clothing is
comparatively cheap in India, but due to increased emergence of retailers specializing in menswear and
bespeaking attitude and panache, more people seem to prefer retailers to fulfill their shopping needs. Thus, the
overall threat from substitutes of menswear sector in India is perceived to be low.

Category Factors- Shrinking Profit

 Rivalry
The Indian apparel retail sector is quite fragmented.
Thus, it is easy for retailers specializing in menswear
to diversify and extend their product lines to enter
women’s ear and kids’ wear segment.
The low fixed costs and operational and maintenance
costs make it easy for new players to enter the
market thus intensifying the rivalry. Also, due to
changing trends in style and fashion, menswear is
highly diverse in it’s product assortment and product
width. With increasing emphasis on style by today’s
Indian male population, every brand and retailer vies
to attain customer stickiness by competing on price,
quality, product width and depth, designs, store
There is a global trend of shrinking
ambience etc.
All these factors intensify the rivalry all the more. This profit margin due to fierce competition
all makes the overall rivalry high. due to sectoral problems like Inventory
carrying cost.

Customer Analysis
 Segmentation  Consumer Behavior

Casual men’s wear segment is identified as: The buying power of today’s shopper is
increasing with an increase in his
disposable income. This is facilitated by
1. 25-45 years professionals who buy branded the prudent combinations of fiscal and
clothing monetary policies in the country’s
2. Income : >35,000 per month. economy. Men’s shopping pattern of
3. Urban fashion conscious men who look for style garments is thus reflecting their
and functional comfort. individualism and style more than ever
before. This is reflected in his shopping
preference, which in the wider perspective
is reflected in the country’s revenue
earned from menswear retail sector.

Targeting  Positioning
Fashion /
The segment is attractive due to the potential Price High Low
growth and the increase in buying power of
Indians.
High ColourPlus

Low

Environmental Factors
 Technological  Political Economic
India’s garment sector is highly The garment industry faced Indian Textile and Clothing industry is
fragmented and is intense competition both currently one of the largest and most
characterized by varying levels domestically and important industries in the Indian
of technology use. Technology internationally from other low- economy in terms of output, foreign
has been a major factor in cost exporting countries that exchange earnings and employment.
deciding the quality of Fabric also largely depended on the The industry contributes 4% to the
for Colour Plus and has made performance of their textile and country’s GDP, 14% to the country’s
it one of the dominant players apparel sector for economic industrial production and around 12% to
in the Fashion World. The growth. The action taken by the country’s foreign exchange earnings.
sophistication employed in the government to reduce tariffs During the period April – December, 2008
cloth making with the and provide incentives to Colour Plus missed the expected growth
achievement of technology potential investors and targets on account of economic
improvement has helped exporters to promote trade and slowdown of exports. Color Plus exports
Colour Plus to stand out as a investment in the Industry its products to the Middle East and
niche brand. The firm also helped Raymond (Colour Plus) European markets. The export turnover
benefits from a large pool of to expand its sales. is less than 10 per cent of the total
skilled workers and competent turnover of the company, As a result,
technical and managerial production also declined during the same
personnel. Labor is period as against the estimated levels.
inexpensive thus provides an Decline in production also negatively
added advantage to the cost influenced employment.
factor.

Environmental Factors
 Social  Legal
Colour Plus captures the niche Legal environmental factors
segment of youth and the include compliance to the
medium and high-income different laws under which the
group. Status symbol is the firm operates as well as
driving line of the product. With abiding by the Indian law. Also
increase in the number of the number of entry into the
working women and the rising industry may be governed by
influence of the western regulatory bodies that would
culture, the effect is felt on the keep a check on the number of
clothing market with the overall major players and others and
increase in formal, semi formal their governance . So is the
and casual western wears. case for Colour Plus.

Company and Competitor Analysis- Product
Feature Matrix

Color Allen Black
Plus solly Arrow berry Provogue Zodiac Louis Philippe’s Wills Life Style
Golf ball wash
cone dyed casuals
thermo fused
buttoning
Color
Fashionable
Wrinkle resistance
Soft
Breathable
natural fabric
Stain resistant
Odor Resistance
Moisture
management

** Red: High Competition; Yellow: Moderate Competition; Green: Low Competition

Objectives- Strategies- Marketing Mix

 Objectives  Strategies
To be synonymous of Luxury & Style, in Branded fabrics and apparel will continue to
apparel industry. be the core focus area.
Color Plus must complement every Within fabrics, shirting fabric segment
facet of customer personality: be it at identified for rapid growth.
work, leisure or those special moments. Current capacity 11.5 mn meters p.a. to be
increased to 21.6 mn meters.
Aggressive retail thrust – Last year initiated a
plan to add 289 stores by 2011.
Consolidation across group for synergy
benefits.

 Marketing Mix

Product Ready to wear men’s casuals a name of Quality and style .
Price Premium brand high end price.
Place Retail specialized outlets for color plus brand.
Promotion Advertisement through fashion magazine, news paper & TV.

Value Chain & Diff Advantage

Color Allen Arro Black Louis Wills Life
Plus solly w berry Provogue Zodiac Philippe’s Style
New
products H H H H M M M H
Service M H M H M M M H
Market M H H H H H H H
Finance H H H H M H H H
Manage H M L H M H M H
H-High, M-Medium, L-Low

Expected Future strategies- Assumptions in
Planning Process

 Capacity expansion, market penetration, consolidation across group
for synergy benefit.

 Market potential  Forecast Assumptions
Colour Plus has garnered a 35 per cent a) There is an observed upward mobility in
market share .It is an established brand in the urban areas where people come and
the metros and major cities in India. However buy branded class.
since the pricing of Colour Plus is in the b) The upper middle class of India
medium range- neither too high nor too low, constitutes around 30% of the total
to sustain its market growth it would need to population.
further expand its business in the tier 2 and 3 c) With time the market for casual clothing is
cities. It needs more consumers since the gradually increasing and catching the
margin is less as compared to top brands imagination of the youth and middle class
and higher than the lower end brands. Thus audience in the range of age from 18 to
it is imperative for Colour Plus to increase its 30 who now have a strong appetite for
brand awareness in the smaller cities where casual and trendy clothing.
the consumer preference has increased due d) This trend is set to grow in India as the
to the rise in the purchasing power of the country is growing at an average rate of
people residing there. 8% over the last six years and is
assumed to grow at a similar rate in the
next 10 years.

Marketing Objective
Volumes & Profits  Customer Targets – The product would be a
The sales last year was 32 million and the premium one for youngsters varying from
profit was 6.2 million for Color plus. teenagers to people till mid -30s for casual
We have fixed our new target as 20 percent wears. This product would appeal to higher end
increase in net sales with constant marketing of mid income and high income population.
contribution.
Value Proposition - The pricing would be
Time frame such that it would be lower than the high end
The time duration for the above target is brands to attain a competitive edge and higher
around two years. than the mid end products for the improvement
in brand image. Also the product features will
Customer Retention differentiate Color Plus from its competitors.
As a part of the initiative to reward our
premium customers, Color Plus has launched Competitor targets – The various competitors
‘Spectrum’, an exclusive membership to a of Color Plus also target the same audience
plethora of benefits. Spectrum offers its group of mid income and high income groups.
members reward points on every purchase
which can be redeemed at any of our outlets
and a host of other benefits and privileges.
Established in early 90s the brand today has
come a long way and has a presence in 400
retail destinations across India and abroad.

Product & Service Strategy
Product Strategy: Western informal
Product/service features – premium wear, priced lower than
other premium wears to target the
Stylish and Trendy upper middle class and the high
Style with innovative and abstract designs, earning class.
bright colored that would stand out distinctly
in shops in malls where other brands are
also displayed to attract young crowd.
Could also design elegant clothes for the age Implementation
group of 30 and above.
oAvailable at malls – positioning of the
product in the middle section and front
Comfort and Quality
sections.
Good quality product providing greater Premium outlets
comfort as compared to its competitors. oAvailability for young crowd and middle
Better stitch quality and smoothness. aged men as well
Durable Quality and great finishing
Availability Products return facility within 5 days as
promotional strategy to attract
Available in the major shopping malls and
customers.
displayed in the front line of clothes
Available in abundance and in different sizes oProduct Positioning: Identification with
thus providing the customers a variety to the current trend in fashion and appeal to
chose from. young and middle aged middle and high
income groups as well as non earning
teenagers.

Marketing Programmes
Awareness Interest Desire Action

Advertising
Somewhat Effective Somewhat Effective Very Effective Very Effective
Public
Relations
Somewhat Effective Somewhat Effective Not Effective Not Effective

Sales
Promotion
Very Effective Very Effective Somewhat Effective Somewhat Effective

Personal
Selling
Somewhat Effective Somewhat Effective Very Effective Very Effective

We will increase the expenditure on Advertising and Sales Promotion.
Advertising : Hoardings, increased spending on print ads with ads in Men’s fashion
magazines, Newspapers will be done.

Sales Promotion, Bi-yearly discount sales will be held in all stores to increase
effectiveness of the Sales Promotion. Our key message will be that Colour Plus is a
lifestyle brand complementing every facet of the customer’s personality: be it at work,
leisure or those special moments.

Pricing
Premium Strategy: Will be
for our technologically
Price advanced products like
Thermo buttons, Wrinkle
Premium Strategy High Value Strategy Super Value Strategy Free etc. and will be
targeted at the high end
buyers.

Quality
Overcharging Medium Value Good Value Strategy
Strategy Strategy

Rip-off Strategy False Economy Economy Strategy High Value: Will be for our
Strategy
base products like plain
shirts/t-shirts etc. which are
The pricing strategy will be to price the products at the bought plainly for the brand
lower end of the premium segment so as to target both the value and fabric quality.
High-end customers and the mid-level segment looking for
premium clothing. On the above Matrix, we want to place
This will be targeted at
our products on the Premium and Medium Level. upper end of middle-
income group customers
who buy Colour Plus for it’s
status value.

Channel & Customer Mgmt
Channels used for Marketing will be Customer Initiated:
Customer can walk into the retail
Direct Stores: This will be done through outlets and talk to Sales personnel for
Retail stores.
information / help on styling etc. Also,
Multibrand Mega Stores : We will move
Customer Service number is available
to premium Super Stores like for customers to find details of stores
Shopper’s Stop and Central. etc.

Internet: Ads, pages on Social Company Initiated:
Networking Media will be used to tap For company initiated customer
the younger generation. management we plan to have our
CRM system. This will be useful in
tracking the customers and manage
the data and complaints etc. well.

Marketing Contribution and budget control

 Color Plus needs to retain its marketing
strategy in situation of low failure and low
impact (market share and profitability).In
case of High/medium failure Vs
High/medium impact Color plus needs to
modify its current Positioning planning

Thanking You Amit Kumar
amitxl.srivastava@gmail.com , Dt: 2010/Aug

Raymonds marketing case study

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