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Footwear Industry

INDIAN FOOTWARE
INDUSTRY
 The Indian footwear retail  As footwear retailing in
market is expected to India remain focused on
grow at a CAGR of over men's shoes, there exists
20% for the period
spanning from 2008 to a plethora of
2011. opportunities in the
 Footwear is expected to exclusive ladies' and
comprise about 60% of kids' footwear segment
the total leather exports  The Indian footwear
by 2011 from over 38%
in 2006-07. market scores over other
 Presently, the Indian footwear markets as it
footwear market is gives benefits like low
dominated by Men's cost of production,
footwear market that
accounts for nearly 58% abundant raw material,
of the total Indian and has huge
footwear retail market. consumption market.
 By products, the Indian  The footwear component
footwear market is
dominated by casual industry also has
Business environment
Athletic footwear industry
Just do it
The Journey
 1960s-Phillip Knight(CEO) & William Bowerman
partnered to
sell running shoes to athletes.
Headquarters- Washington

 1978- BRS, Inc. officially renamed itself to Nike

 2008- revenue in excess of $18.6 billion USD.


Marketing Strategy
 Nike's marketing strategy is an important
component of the company's success.
 Nike is positioned as a premium-brand, selling
well-designed and expensive products.
 Nike lures customers with a marketing strategy
centering around a brand image which is attained
by distinctive ‘swoosh’ logo and the advertising
slogan: "Just do it". 
 Nike promotes its products by sponsorship
agreements with celebrity athletes, professional
teams and college athletic teams.
Nike's marketing mix
contains many
elements besides
promotion.

4. Advertising

6. Beatles song

8. Horror ad

4. Pretty ad
Brand
Ambassadors
STRENGTHS WEAKNESSES

•Competitive •Major income source-


• Self confidence footwear
•Employs more than 30,000
people worldwide
•Belongs to Fortune 500 •Exploit cheap workforce
companies which 2007 total
revenue exceeded 16 b. USD •Employees child labor
•Large scale operation occasionally
•Strong and innovative marketing
strategy OPPURTUNITIES THREAT

    •Financial crisis may lead to job


•There is also the opportunity to shortages in a number of Nike’s
develop products other than worldwide subsidiaries;
shoes such as sportswear,
jewellery, clothing, etc. Such • The market for sports shoes and
higher value items tend to bring clothing is very competitive
higher profits. 
•  Nike is vulnerable to the
international nature of trade
NEW MODELS
COMPANY PROFILE
 Adidas Ltd is a German sports apparel
manufacturer and part of the Adidas Group,
which consists of Reebok sportswear company,
TaylorMade-adidas golf company, and Rockport
.
 The company is the largest sportswear
manufacturer in Europe and the second largest
sportswear manufacturer in the world.[2]
 The company revenue for 2006 was listed at €
10.084 billion, or about US $13.625 billion and
the 2007 figure was listed at €10.299 billion, or
about $15.6 billion.
 MISSION: Our mission is to become the best
sports brand in the world. To that end, we will
Products Of Adidas Group
Adidas
Footwear, apparel, and hardware such as
bags and balls
Reebok
Footwear, apparel and hardware
Rockport
Footwear
TaylorMade-adidas Golf
Golf Equipment: metalwoods, irons putters,
golf balls, footwear, apparel and
accessories
Operating Regions

More than 170 subsidiaries guarantee


marketplace presence for adidas products
around the world.

Sales and distribution of adidas products is


grouped in four regions worldwide:
Europe/Emerging Markets, North America,
Asia/Pacific and Latin America.

Today, adidas is Europe’s biggest supplier


of athletic footwear and sports apparel.
STRENGTHS WEAKNESSES
Adidas is popular in Europe Negative image portrayed by
among soccer and athletic fans . poor working conditions in its
Reebok appeals to US fans of overseas factories
basketball and football. It has E-commerce is limited to USA
become the biggest rival to the The direct sale to consumers is
world leader NIKE. creating conflicts with its own
They have has global presence. resellers
Adidas focuses on performance
development and technology
development while Reebok is
OPPORTUNITIES THREAT
purely sales driven
 Increasing demand in the Economic downturn in North
industry for products available America and Asian Countries
online Increase in the price of providing
Increase female participation in technological solutions (e-
athletics commerce)
E-commerce will reduce the cost Strong competition from some of
of goods sold thus improving the its major challengers in all
"bottom line" branches of the business
New technology and innovation Increase in the Price of Raw
to stay on top of market need. materials
Collaborate with other online Nike's strong reputation in the
retailers to offer Adidas products footwear and apparel industry
Marketing Strategies of
Adidas
 Adidas believes that  Cooperate with
marketing is much reference groups
more important
because shoe is in the
“shopping goods”  Cooperate with
category. famous designers

 Adidas outsources its  Change the


production and focuses traditional image of
on marketing sport
 Adidas launched
 It also partnered with
several campaigns like
in 2004 IMPOSSIBLE MTV.
IS NOTHING
CAMPAIGN’,MATCH
CENTRE CAMPAIGN
4P’s OF ADIDAS
PRODUCT PRICE

Attracting competitors' Increasing present customers'


customers. rate of usage.
Increasing the units of sales.
Sharper product differentiation. Special price
packages/cross‑selling products
Finding other products' uses. Reduction in price.
Price incentive for increased use
Increasing promotional effort.
PROMOTION PLACE

Attracting other market New geographical markets.


segments.
National market expansion.
Seeking other distribution
channels. Regional market expansion.

Advertising in other media. Export market expansion.


 
Bata Shoe Organization
Bata Industrials
Worldwide Bata India Limited
 Bata Industrials is a  Incorporated as Bata Shoe
specialized division of the Company Private Limited in
World’s largest shoe 1931, the company was set up
manufacturer: the Bata Shoe initially as a small operation in
Organization (BSO)
Konnagar (near Calcutta) in
1932.
 Today, Bata Industrials is one
of world’s largest
manufacturer & marketer of  Bata India is the largest
Safety footwear The company company for the Bata Shoe
headquarters is located in Organization in terms of sales
Best, the Netherlands. pairs and the second largest in
terms of revenues.
 Bata Industrials has operations
and production facilities in
most of the Countries  Bata India Limited is the
worldwide. largest footwear retailer in
India.
BATA – Wrong Target

 In the early 1990s, Bata decided to embrace the


high-end segments of the Indian shoe market as a
part of its target market.
 The segment constituted a mere 5 to 10 per cent of
the footwear market in India.
 This segment was not sizable for a company like
Bata and the segment did not gel with Bata’s
distinctive competence.
 The top end of the market suddenly became the
main focus of the company and it forgot its bread-
and-butter shoes that had given the company its
identity.
 The year 1995 saw the company running a loss of
Rs. 42 crores.
 After learning the lesson the hard way, Bata did an
Marketing Strategy
 Bata is reinventing itself
and has introduced the
concept of flagship stores
to provide complete and
unique shopping experience
at par with their stores
abroad.
 International trends, relaxed
ambience, great products,
and courteous staff at the
new-look Flagship store are
all a part of Bata’s new
marketing strategy.
 Reposition brand 'Bata' -
High brand recall for
consumer lead to higher
footfalls and better
conversions
 Target new market (ladies
and kids) - Filling the
missing 45% pie of footwear
market
 Improving shoe line -
95 Paise Price Tags
 It was a strategy to
begin sales talk with
buyers curious about
price like Rs 299.95.
 It would automatically
create interest in the
product. And from
there salesmen can
start their talk.
 The Bata price also
had a psychological
impact on the
prospective buyers as
it fell short of an
amount that might
have looked like a high
price.
 The price tag was
devised to
Bata Overview
Market segment low to medium priced
footwear for the common
person across the globe
Local Strategy Bata runs semi-autonomous
companies targeted at the
low to medium end of the
scale.
Marketing Approach Bata clusters countries
geographically into groups;
the expatriate would build
regional specialization &
training activities would be
more relevant on a regional
basis for similar counties
International strategy Bata follows a multi domestic
strategy. It stands for low
integration across country
units & high local
responsiveness
Bata’s Offerings
History
 Established in the year 1954 by Mr. D P Gupta,
Mr. P D Gupta and Mr. R K Bansal

 Liberty Shoes Ltd. is a leading leather shoes


brand and is engaged in the manufacturing,
supplying and exporting of the same.

 It is the only Indian leather shoe brand that


occupies fifth ranking among the top shoes
manufacturing companies in the world
Liberty-Quality Footwear
 Liberty has been  The products are
awarded several times quality tested and it
by prestigious also has management
awards such as: systems and tools in
 2005 – 2006 Export place such as :
Award  In the year 2000,
 Golden Peacock KAIZEN was
Innovation Award in implemented and is
the year 2005&2007  practiced throughout
 It the organization.
has a patented
technology  The concept of 5S was
"HUMANTECH" which introduced in the
states the company’s company in the year
philosophy of the 2001 and presently it
optimum utilization of is in matured stage
human craftsmanship and is followed
and technological religiously.
excellence.  It have received ISO
 SAP was used first 9001:2000
Marketing Strategy
Liberty has an  The company is broadening their product
extensive range from need based shoes to lifestyle
distribution shoes.
channel which  Liberty Shoes is increasing their presence in
has enabled the high end market through concept stores
them to called "Revolutions”.
develop a firm  Revolutions’ strategy is to target women and
grip over the children to increase footfalls.
market.  Apart from having presence in malls,
02 Overseas Revolutions is also expanding its reach
Offices through the Shop in Shop concept.
14 Branch  In September 2005, Liberty Shoes and
Offices Pantaloon Retail entered in to a joint
20 Overseas
venture for the business of footwear retailing.
Showrooms  Another significant market that Liberty Shoes
addresses is the institutional market. They
300 Liberty
manufacture safety shoes for industrial
Exclusive workers. 9% of their revenues came from this
Distributors segment
375 Retail  ‘Sapne Hue Apne’ the entire look of the
Stores (10 campaign was thoughtfully stylized to strike
Sales through different channels of distribution
PRICING STRATEGY
 Liberty’s strategy is to  Liberty's strategy of
scale up in all directions, introducing various price
i.e.to widen customer points to cater to different
base by introducing income groups will help
products for all categories them in garnering a greater
of customers, through market share.
different channels of  Moving up the value chain
distribution. by introducing brands to
 Liberty wants to create cater to higher income
foothold in the domestic groups as well as putting
and export market. up retail shops in malls will
 With the implementation of auger well for the
VAT at a flat rate of 12%, company.
the company has taken a  This strategy will help
long term view of their establish their brands as
pricing strategy which has well as increase margins.
been revised from the April  Another interesting aspect
SCALING IN ALL DIRECTIONS
Action Shoes
 Action is headquartered in Delhi.

 Quality shoes for the whole family-ranging from


casuals to formals.

 Most Action offerings are in the mid - range


price segments.

 COMPLETE FAMILY FOOTWEAR

 A backward integration strategy

 A forward integration strategy


Action Shoes
 Quality commitment.
 Manufacturing excellence.
 Quality people.
 Quality customers.
 Social responsibility.
 "Lala Muni Lal Mange Charitable Trust"
since 1977. Today it is engaged in various
kinds of charitable activities.
 Marketing strategy.
 Wide consumer base.
 Wide price products.
RELAXO
Relaxo
 Relaxo stepped into the footwear industry in
1976 .

 It started off with the manufacture of Hawaii


slippers and subsequently diversified into
manufacturing casuals, joggers, school and
leather shoes.

 From a modest sale of around Rs. 1 million in


the year 77-78, it has today crossed the Rs.
2000 million+ figure.

 Relaxo has the capacity to manufacture over


100 million pairs, per annum.

 customer base of around 100 million people.


The
Relaxo Quality
advantage

Respo
Producti
nse
on
assura
capacity
nce
Marketing strategy
 Economies of scale.

 Outsourcing for
many companies.

 Hitting customer
base in lower and
middle class.

 Slippers & School


shoes

 Low price products


with good quality
COMPARISON OF
COMPANIES
COMPANIES AVERAGE GROWTH
RATE (2005 – 2008)
NIKE 10.7 %

ADIDAS 22.46 %

BATA 7.8 %

LIBERTY 11.16 %
COMPARISON OF THE COMPANIES
(PORTER’S MODEL)
BASIS OF NIKE ADIDAS RELAXO ACTION BATA LIBERTY
COMPARI
SON
BARRIER ABSENT ABSENT ABSENT ABSENT ABSENT ABSENT
S TO
ENTRY
BARGANI LOW LOW HIGH HIGH HIGH HIGH
NG
POWER
OF
BUYERS
BARGAIN LOW LOW HIGH HIGH HIGH HIGH
POWER
OF
SUPPLIER
THREATS OF HIGH HIGH HIGH HIGH HIGH HIGH
SUBSTITUTE
S

RIVALRY HIGH HIGH HIGH HIGH HIGH HIGH


AMONG THE
EXISTING
COMPITITOR
S
COMPANIES TARGETING THE CONSUMERS BASED ON INCOME
PER ANNUM

RICH CLASS
PUMA, NIKE
ADIDAS

UPPER MIDDLE
ACTION, LIBERTY,
CLASS
NIKE, ADIDAS

LOWER MIDDLE
BATA, ACTION, LIBERTY,
CLASS
NIKE, ADIDAS, RELAXO

BATA, ACTION, RELAXO


LOWER INCOME
GROUP
REVENUE COMPARISON

0.25

0.2
REVENUE (BILLION US $)

0.15

BATA
LIBERTY

0.1

0.05

0
2005 2006 2007 2008
YEARS
Got your Choos?
Premium pricing (as in the case of luxury
items) ensures that the item is not
available to a wide market segment.
Jimmy Choo shoes are a fine example of a
successful premium priced item
Premium pricing not only implies good
quality but also ‘exclusivity’
Choos are also known for their uniqueness
Jimmy Choos are priced so that not many
people can afford them – only a certain
‘segment’ of the market wears them
This patented pair costs £44

Approx 99, (approx Rs. 31,300)


800

This one costs a mere £465.00

(approx Rs. 33,000)


THE MOST EXPENSIVE
SHOES
THE CINDERELLA
SLIPPERS
How much could a pair of
shoes cost?

Well, the world's most


expensive pair of women's
shoes costs a cool $2
million!

The one-of-a-kind 4½-inch


stiletto sandals are studded
with 565 platinum-set Kwiat
diamonds (which include 55
GROUP 5
NAVEEN
NAKUL
KRANTI
MILAN
NEHA GULATI