[COMFY SHOE] January 24, 2011

LAUNCHING OF DRIVING SHOES

DRIVING SHOES

Adil Hijaz……………..084332-088

Waqas Kamal….………084332-107

Nishwa Munawar………104732-071

Naurin zafar……………104732-102

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In the name of Allah the most gracious and

the most merciful

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Contents
ACKNOWLEDGEMENT.................................................................................................................................5

Executive Summary.....................................................................................................................................6

Introduction............................................................................................................................................7

Industry report........................................................................................................................................7

Our Product Description..........................................................................................................................8

Innovation...............................................................................................................................................9

Professional driver...............................................................................................................................9

Regular driver......................................................................................................................................9

Medicated driver (older)......................................................................................................................9

Pest Analysis..............................................................................................................................................10

Political..................................................................................................................................................10

Economic...............................................................................................................................................11

Social.....................................................................................................................................................12

Technological.........................................................................................................................................13

Industry Analysis........................................................................................................................................14

Porters Model:.......................................................................................................................................14

Buyers Bargaining Power: High..........................................................................................................14

Suppliers Bargaining Power: Medium................................................................................................14

Threat of Substitutes: low..................................................................................................................14

Threat of new Entrants: High.............................................................................................................14

Overall Rivalry: High..........................................................................................................................15

Competitor Analysis..................................................................................................................................16

Dominant Force of the industry.................................................................................................................16

WHICH Force will become the most dominant?........................................................................................16

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How to gain competitive edge:..............................................................................................................16

Concentration index:.................................................................................................................................17

Key Success Factors:..............................................................................................................................17

Gap Identification......................................................................................................................................18

SWOT analysis...........................................................................................................................................20

STP.............................................................................................................................................................22

Segmentation........................................................................................................................................22

Market size........................................................................................................................................22

Targeting...............................................................................................................................................23

Positioning.............................................................................................................................................24

Growth potential...................................................................................................................................25

Barrier to growth...............................................................................................................................25

Customer priorities............................................................................................................................25

Marketing mix...........................................................................................................................................26

PRICING STRATEGY................................................................................................................................26

Sale and distribution strategy:...............................................................................................................26

Advertising strategy & Promotional Strategies......................................................................................27

Positioning.............................................................................................................................................27

Packaging...............................................................................................................................................28

Levels of packaging............................................................................................................................28

Package life cycle...............................................................................................................................28

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ACKNOWLEDGEMENT

All praises belong to almighty Allah who is the supreme authority knows
the ultimate relations underlying all sorts of phenomenon going on in this
universe and whose blessings and exaltation flourished our thoughts, our
ambitions and our modest efforts in launching the DRIVING SHOES in
Pakistan. We also offer our humblest thanks to HOLY PROPHET HAZRAT
MUHAMMAD (PBUH) who is the forever torch of guidance and knowledge
for humanity as a whole.

We deem it our utmost pleasure to avail this opportunity to express

gratitude and deep sense of obligation to our respected Sir Mobeen ul haq
for his valuable and dexterous guidance, scholarly criticism, untiring help,
compassionate attitude, kind behavior and moral support. Through the
Project he helped us and guided us in every aspect, as that was a very new

experience for us.

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Executive Summary

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Introduction
Industry report
Foot wear industry is one of the Pakistan’s rapidly growing industries. According
to FBR, a footwear manufacturer registered under Factories Act having annual
turnover of Rs. 50 million or more.in this industry usually SMEs are involved and
there is a huge competition on every level.
PFMA is a Trade Association representing Pakistani footwear manufacturers,
exporters, importers and traders. It is an Association duly approved by the Ministry
of Commerce, Government of Pakistan, registered with Directorate General Trade
Organizations, incorporated under the Companies Ordinance 1984 with Securities
and Exchange Commission of Pakistan and a member of Federation of Pakistan
Chambers of Commerce and Industry (FPCCI). The Association has been formed
to protect and safeguard the interests of Footwear manufacturers and traders by
applications, deputation, delegations, petitions and memoranda to the Government
of Pakistan or the Provincial governments. It is to assist the members by
investigating problems peculiar to the industry and trade with a view to cause
improvements and progress.
Pakistan’s share in the international market is hovering at about 1.5% from the last
five years, earning an average foreign exchange of US$ 681 million per annum.
According to Federal Bureau of Statistics data, Pakistan exports for the year 2001
were about US$ 763 million. Out of total leather exports, leather footwear accounts
for 50.93%, which makes leather footwear extremely significant. Total footwear
production in 1994 in Pakistan was 205 million pairs. The largest concentration of
units for footwear production is in Lahore where 306 units are located, which is

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nearly 59% of the total number of units in Pakistan. The second largest is Karachi
where about 8% of the total numbers of units are located.

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Our Product Description

We are launching an innovative product in the form of driving shoes “. By launching this product
we are going to take our customers a step further in level of comfort. Our product has the class
and will be highly appreciated by our customers as it is made according to their demand.

Value Proposition

We will give value to the customers by fulfilling their physical and psychological needs. We has
coated its price with special consideration regarding value. The class we are targeting will
consider companies product as of great value to them when they will compare its cost against
benefits. The basic formula for value is given below

Value= Benefits- Cost.

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Innovation
The categories that we have launched in the driving shoes are:
 Professional driver
 Regular driver
 Medicated driver(older)
Here is the further explanation of features of these categories
Professional driver
This category is especially for the business class and professionals, teachers, sales persons etc….
As their work is for the professional field so for full filling their requirements of the dress look
this category will make them feel smart.
Regular driver
In this category we have focused on the daily need’s requirements of an ordinary individual. This
category we have introduced the casual walking shoes for both men and women that comprises
of both youth and mature class.
Medicated driver (older)
Here the prime focus is on the health issues of senor citizens and the foot disease persons. These
shoes contain the specialty of pressure points and extra soft massaging mold inner and outer
soles.

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Pest Analysis
PEST Analysis is a simple, useful and widely-used tool that helps you understand the "big
picture" of your Political, Economic, Socio-Cultural and Technological environment. As such, it
is used by business leaders worldwide to build their vision of the future.

Political factors Economics factors

 Government strategy  Foreign investment
 trade barriers for new entrants  Structure of competition
 Taxation  Growth of market
 Import policy  Raw material availability
 Association’s regulations

Social factors Technological factors

 Trend of buyers  R&D
 Improve stander of living  Industrialization
 public opinion  Advancement of technology
 Socio-Cultural changes  The Radicalization challenge
 Impact on cost structure

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Political

The political environment has not been very favorable for footwear industry. The instability in
prices of raw material such as chemicals and soles as well as high excise and import duties on
these is causing thoughtful problem for the industry. The political decisions about the energy
are affecting a lot the industry especially in the manufacturing capacity area.
Political environment has significant impacts on businesses in countries like Pakistan
where government is not stable. Changing governments normally leads to change in strategies
e.g. new tax system, spending on businesses. In these circumstances we need to be able to cop
with the continuously changing environment by making flexible strategies and contingency
plans.
In our case same roles apply. We need to watch environment carefully and keep margin
to deal with any change. According to news published in Jang on 13 th November Currently PPP
government has not providing any relief to businessmen and it is even highly taxing them. Their
undercover policy to cut short electricity and gas supply in Punjab as compared to Sindh gives
us clue to use alternative source of energy for production. This also puts entrepreneur in our
country under enormous pressure because they had to survive in 24% inflation rate and scarce
supply of energy.

Economic

The issue of inflation and de valuation of currency has been a main concern facing the industry.
Inflation, as compared to year 2009 of 20.3 has jumped to 13.6 in 2010 but so high then the
previous year’s value of 2.9 %(2004). The foreign investment in the particular sector is very
slow. The availability of the raw material is not much difficult but there is need to exploit the
new resources to increase the growth rate of 1.5% to the attractive figures.
Economic condition of Pakistan is miserable. Inflation rate is 24% which adds on to expensive
raw material supply, higher transportation costs, and higher utilities bills and higher wage rates
etc. All these factors lead towards higher product costs which will lead to higher prices and
lower value for consumers. It also reduces the buying power of consumers.

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Loan rate is currently 14% which disheartens businesses to get loan as it makes this
option too risky. This is an indicator of suppressed business situation. Government is not even
giving any sort of subsides to any industry and even taxes are being applied on them. Pakistan’s
exports for the last year were ½ to that of imports (financial times, august 23).foreign
investment is also going down. Moreover the EIU expects real GDP growth to slow noticeably in
2009 from 6% to4.1%, before slowly picking up again over the next 5 years. As a result, the
government fiscal deficit will narrow significantly after 2010, but it will remain at more than 5%
of GDP for the next 2 years. Government investment will be constrained, as a result.

Social
Population growth rate = 2%
The stander of living in Pakistan is increasing day by day people are very conscious about there
dressings and their looks with this comfort and style is also their demand to full fill the norms of
society. The society of Pakistan is dynamic and therefore ever-changing, and its patterns are
changing transforming from time to time. And media is also playing an important role in
changing the cultural values and have enormous impact on minds of pubic.
Social concerns are relatively more delicate to handle .our literacy rate among men
and female is 50.5% and 27.6% respectively which shows that awareness is increasing in
society. Population is growing at 1.7% which demands a creative solution to handle these huge
masses of people. CPI is growing at 13% which shows miserable picture of our society. Threat of
terrorism is too high. Lives are not safe due to which frustration and aggression is being
developing among people.
Recently flood has eroded millions of peoples life so businesses have social responsibility to
keep in mind those people and serve them by giving quality ,value and low price
products/services because the soul purpose of entrepreneur is to serve humanity by fulfilling
their needs and providing quality to life.
Another aspect is the diversity issue. Today masses are spread around cities in suburbs and in
nearby areas. Population is huge and scattered so entrepreneurs have an opportunity to get
profit from them as well as serve them. By getting proper knowledge of the demographic and
psychographic trends one can plan better strategies to ensure higher returns.

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Technological

Industrialization revolution in footwear industry brought a lot of changes in this sector.

The local manufacturer prefer hand stitching and semi technology for manufacturing other then
plant made molds and upper stitching through applying TQM. The technology in this sector are
based on the raw material types used especially leather type and sole material and farma
available. Basically we can divide it in three types
 Manual manufacturing(use of semi machine)
 Plant made
 Mixture of both
It comes from research whether it is basic or applied. Businesses can improve almost in all fields
by doing research. Technology have numerous benefits .it can reduce costs by applying fewer
labor. It can improve quality. It can reduce error. It can produce efficiency. It can enhance
effectiveness. It can aid humans and lot more.
Automation can lead to productivity and efficiency both. Today businesses are getting
competitive advantage by applying technology. It can even help in making better decisions and
better awareness of the environment. Our total capacity of energy is 19574MW which demand
other innovative technologies that are fuel efficient to fill the gap.

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Industry Analysis

Porters Model:

Buyers Bargaining Pow er

Power

Suppliers BBargaining
argaining Pow er
Power

Threat of Substitutes

Threat of new
new Entrants

O verall Rivalry
Overall

Buyers Bargaining Power: High

The bargaining power of buyers is strong. Switching cost of customer is a low, as they can easily
switch to the other brands.

Suppliers Bargaining Power: Medium

Our raw materials include leather, rubber, thread and sole. In our case pressure points or crape
molded souls are required which are only available by few firms in Pakistan and their patents are
registered .Thread is also imported so we can say that bargaining power of suppliers is medium
not much high not low because in the case of non availability we can switch to local products or
any other technology.

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Threat of Substitutes: low

There is no any substitute of the products so there is no possible threat of substitutes. Some
people argue that the joggers and the casual shoes are the substitutes but they are not categories
in term of walking shoe. Canvas can be a threat but again that is a different category.

Threat of new Entrants: High

The technology advancement in industry and lack of skilled labour has made the barriers high.
There is also need of huge capital and brand identification to entre in. But the distribution
channels are open to use. Differentiation between the offerings of incumbents is high. Retail
channels and have gaps to b filled.

Overall Rivalry: High

The overall rivalry in this industry is strong and bossiness conditions are pretty much tough
The rivalry among the companies is high as the exit barriers are high and the fixed cost relate
with the industry is also high and the competitors are roughly evenly balanced.

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Competitor Analysis
Foot wear industry is one of the Pakistan’s rapidly growing industries. According to FBR, a
footwear manufacturer registered under Factories Act having annual turnover of Rs. 50 million
or more are earning more than 50 millions rupees. In this industry, usually SMEs are involved
and there is a huge competition at every level. There are a number of footwear manufacturers but
very few of them are actually producing high quality leather shoes of international standards for
the formal and informal use. Some of these brands of the footwear industry are operating under
the name of
 Elegant shoe  Bata
 Urban sole  EPCOT
 Prime Naalain.  Star Let
 Servis  Hush puppy
Focus:

We are focusing the regional players of the footwear industry in Pakistan especially in the area of
Lahore.

Product:

Our product is formal leather shoes of high price.

Customers:

We are taking the general public the end user of the product as our customer.

Quality:

Quality is determined in term of durability, fashion and price with extra comfort.

The combination of all these things provides the high quality product.

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HUSH PUPPIES
INTRODUCTION:
Hush Puppies brand was founded in 1958. Hush Puppies is an international brand of
contemporary, casual footwear for men, women and children. The shoes have been described as
"the classic American brushed-suede shoes with the lightweight crepe sole". It’s a division
of Wolverine Worldwide, Hush Puppies is headquartered in Rockford, Michigan. Wolverine
markets or licenses the Hush Puppies name for footwear in over 120 countries throughout the
world. In addition, the Hush Puppies name is licensed for non-footwear fashion categories,
including clothing, eyewear and plush toys.

COMPANY’S LOGO
Hush Puppies use a Basset Hound as its logo.

4P’S OF MARKETING

PRICE:
Price of Hush puppies shoes starts from Rs 1500 to Rs 6000 and above. They are expensive
shoes but people like to wear them because of their durability and comfort.

PRODUCT:
Hush puppies have casual shoes variety. Company doesn’t focus solely on fashion but works on
comfort level of their customers. They have got limited models of shoes but these shoes are
famous among people because of their high quality and durability.

PROMOTION:
Company has a brand position of “world’s most comfortable shoes”. Whenever people think of
Hush puppies the only idea that comes in their mind is “COMFORT. In the local market Hush
puppies don’t advertise much but as company has a strong brand image and position so it exists
in market as one of the best companies.

PLACE:
Hush puppies have numerous outlets in local market. Mostly these outlets are cozy and very are
painted in white n brown colors. They make one or two big outlets in every city. These big
outlets contain their latest variety. Rest of the outlets is small but they contain their mostly sold
shoes. Hush puppies sell value to their customers through comfort and casual style.

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TECHNOLOGIES
Hush Puppies’ history is rooted in innovation from inventing the first truly casual shoes to
developing dozens of patented technologies that make shoes more comfortable, lightweight and
worry-free. Various technologies are used for manufacturing shoes and some are as follows

 BOUNCE: Hush Puppies patented Bounce technology reduces the stress on feet by
absorbing the energy generated while walking. It then distributes and releases the energy
to put a bounce in step.

 ZERO G: These are light weight materials and absorb shocks. ZeroG combines a
lightweight shock absorbing midsole with athletic construction for instant and lasting
comfort. They are almost weightless.

 COMFORT CURVE: They give curved groove.flexes. Hush Puppies Comfort Curve
shoes are made with a curved flex groove that releases tension in the sole, allowing for
proper weight transfer & giving greater flexibility.

 WAVEREFLEX: Hush Puppies WaveReflex uniquely designed outsoles with reverse

action waves provide extreme flexibility for immediate comfort. It combines natural latex
rubber and unique reverse action waves for complete freedom of movement for feet.

 WATERPROOF: Seams that are sealed and waterproofed leathers enable customers to
confidently make their way through the day without the worry of soggy feet or messy
Shoe

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Urban sole:
Year of Establishment: 1998

No. of Retail Outlets: 15

No. of Dealers: 48

urbansole was launched as national brand by Shafi (Pvt.) Limited. We are committed to bring
perfection in quality through designing the distinguished and innovative products by acquiring
the external sources in order to achieve the international standards and customer delight.

urbansole shoe is worn by those who approach life with intensity and passion. Sophisticated,
confident, knowledgeable and powerful, the urbansole male demands quality craftsmanship
and incomparable leather quality for his shoes

As all the best dressed people will tell you, attention to detail can make all the difference when
it comes to sartorial success. urbansole shoe is the ultimate finish on any ensemble, classically
designed and elegantly styled, the urbansole shoe takes the man from indoor to outdoor.

Pierre Cardin trademark is considered one of the most powerful in the world and has 900
Licensees spread out though 140 countries. The urbansole is licensee for Pierre Cardin (Paris)
in Pakistan, and has GMP of international standards to meet customer satisfaction with strong
and consistent Marketing follow-up

Pierre Cardin trademark is considered one of the most powerful in the world and has 900
Licensees spread out though 140 countries. The urbansole is licensee for Pierre Cardin (Paris)
in Pakistan, and has GMP of international standards to meet customer satisfaction with strong
and consistent Marketing follow-up

PRICE:
Price of shoes starts from Rs 1000 and above. They are expensive shoes durability and comfort.

PRODUCT:
Urban sole have casual shoes variety. Company focus solely on fashion but works on comfort.
they have got limited models of shoes.

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PROMOTION:
Entitles to an exiting line-up of promotional offers and privileges that have been specially
designed to suit urban life style . Enjoy expressing sense of style through Urbansole range of
trendy shoes that are comfortable enough to wear every day.

PLACE:
Have numerous outlets in local market. They make one or two big outlets in every city. These
big outlets contain their latest variety. Urbansole sells value to their customers through comfort
and casual style.

Servis Industries Limited:

SIL is a public limited company listed on the stock exchanges of Pakistan. It has annual revenue
of USD 80 million. It is the largest manufacturer of footwear and tyres & tubes for two-
wheelers, and has been the largest exporter of footwear from Pakistan for the last 10 years.

The company employs more than 5,000 people in its facilities located in Gujarat and Muridke.
The company's products are exported primarily to Germany, Italy, France and UK.

Vision Statement

To be a market leader providing quality footwear, tyres & tubes and allied products. To strive
for excellence and global recognition by continuous improvement, innovation, dedication and
growth.

Mission Statement

To be a result oriented and profitable Company by consistently improving market share,

quality, diversity, availability, presentation, reliability and customer acceptance.

To emerge as a growth oriented concern ensuring optimum return and value addition to its
shareholders to ensure cost consciousness in decision-making and operations without
compromising the commitment to quality.

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To create an efficient resource management and conducive business environment. Evolving an

effective leadership by creating a highly professional and motivated management team fully
equipped to meet any challenge.

To keep abreast with modern technology and designs to optimize production and enhance
brand image to attain international recognition for the Company's products. To set up highly
ethical business standards and be a good corporate citizen, contributing towards the
development of the national economy and assisting charitable causes to adopt appropriate
safety rules and environment friendly policies.

Marketing Strategy:

Part of SC marketing strategy is based on location and distribution. SC is located in a trendy

malls and busy product markets that receive abundant walk-through traffic. This location costs
a premium and is not directly linked to the marketing budget as rent has been categorized
under general overhead.

The management believes in smart strategic moves, thus they are utilizing the network of Servis
mega stores. It has helped in reducing the distribution cost as well as the rental cost. Currently
there are 15 super market Servis stores where along with other brands soul collection is
displayed as a separate brand.They are focusing on differentiation strategy because the
marketing objective is to become quality leader

Pricing:

Servis shoe pricing is designed to be competitive to the other fashion shoe retailers.

Distribution:

Distribution is made through personal outlets of Servis shoe located in the town in different
parts.

Advertising and Promotion:

Location, targeted advertising on the localized cable network, magazines and Hoardings.

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PRIME NAALAIN
INTRODUCTION:

Prime Tanning Industries (Pvt) Ltd, established in 1989 with a mission to produce finest quality
leather. Prime is famous for making cow and buffalo leather for shoes, handbags and other
leather products. Prime is working with all the prestigious brands all over the world and has
offices all over Europe, China, India, Hong Kong and many other countries. Prime has a long
history behind it. Before 1989 it was known for Firdous Tannery. Firdous was the biggest
tannery all over Asia and at that time was exporting raw hide and wet blue leather. Now next
generation established its name in making complete finished Leather and they are one of the
biggest suppliers of finished leather all over Pakistan.

Prime has a shoe factory with a name Prime Naalain (Pvt) Ltd. It has a production capacity of
2000 pairs per day and exporting shoes all over America, Europe and many other countries. It
also has a big network in local market with many retail outlets, wholesale and working with
some big brands in local market.

TANNERY:

Prime Tannery has 16 acres of area equipped with all modern machines. It has the Capacity of
2 million sqft per month. Prime has measurement standards of all kind of products at 0%.
Quality Control standards in Prime are outstanding and has the system of checking quality at
every process

PRODUCT:

Prime produces its different products in cow and buffalo leather from the material available in
domestic market. It also imports raw material from other countries, depending on customer’s
requirement. Prime has big range of cow and buffalo articles like Analine, Milled, Nubuck, Pull
Up and Burnish articles available in any color and type required by the customer. End products
are shoes of various colors and designs. They mostly produce formal wear. Prime launch its
season with catalog twice a year for summer and winter. Summer season mostly focus on colors
and fashion. Winter season usually focus on classic articles.

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PRICE:

Charge high price fore its formal shoes.

PROMOTION:

Prime Naalain don’t advertise on electronic media. Basically company exports its high quality
shoes. Prime Naalain focuses on quality and robustness. Their brand has an image of long
lasting shoes with high quality and latest designs.

PLACE:

Prime naalain has various outlets in local market but these outlets are located in posh areas
and this people with high income group can access it. There outlets have an elegant look. They
shine like crystal and have a look of a high quality brand shop.

EPCOT SHOES
INTRODUCTION: Epcot shoes were founded in 1945.
EPCOT Private Limited formerly known as (East Pakistan Chrome Tannery) is the largest
manufacturer and exporter of both of finished leather and leather shoes in Pakistan. The
company was originally founded by Mr. Muhammad Usman, Chairman of Ayesha group of
Industries in 1947. The founding purpose of the company was to export goat napa to the
American and European market under the brand name “EPCOT”. In 1978 company established
its own dying unit. In 1985 an in house finishing department was organized thus laying the
foundation of a company. In 1992 the EPCOT set up a composite shoe manufacturing unit
targeted to the European market soon to dominate world market. Since 1947 the company has
grown 10 fold with sales touching 3 billion Pak Rupees and as a result has become the
undisputed market leader.

4P’S OF MARKETING

PRODUCT:
Company produces many high quality shoes. It also make shoes for Zara, Boss and many other
brands. Epcot shoes have classic look. They focus on style and quality.

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PRICE:
Pricing is designed to be competitive to the other fashion shoe retailers.

PROMOTION:
Company advertises its shoes in the local and international market. Generally EPCOT shoes are
positioned as high quality formal wear shoes with high prices. This brand is for people of high
income group.

PLACE:
Company outlets are mostly in upper class and middle class markets. Outlets are neat and clean
with trained staff. They give wide variety of formal wear and some casual shoes. Outlets are
bright and vibrant.

ELEGANT SHOES
INTRODUCTION:
Company started its journey from Lahore and has serviced the world global footwear industry
for more than 15 years. It’s one of the biggest exporters of leather shoes in Pakistan and has
been associated with the leather industry since 1948. Elegant (Pvt) Limited was established in
1994 to manufacture footwear for global market. Company has strived hard to develop R&D
department and continuously brought innovative products for their clients. Elegant shoes
mainly focus on quality and comfort. Whole plan has been imported from Italy and Italy is
famous for its high quality shoes. Company export shoes and also play in local market.

4P’S OF MARKETING

PRICE:
Company claims to have economic shoes and price of different ranges

PLACE:
Company is involved in whole sale, retailing and exports of its shoes. Company has its own
outlets through out the country and also sells its products to other retailers. Outlets are formal
and subtle tones are used to provide comforting atmosphere. Staff is trained and wide range of
products could bee seen in any outlet.

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PRODUCT:
Company produces the finest shoes in the market. They use different materials for their shoes
and produce TPR, PU and PVC soles. They focus on compatibility and durability with latest
designs. They have both formal wear and casual wear shoes.

PROMOTION:
Company focuses on its exports and promotes its brand as quality conscious with comfort. They
claim that they only use pure leather in their product and don’t compromise on quality. High
focus on quality and having quality check from various international companies has promoted
this brand as one of the best Pakistan’s export brand.

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CPM:

KSFs Weigh Hush Weight Urban Weigh Servis Weigh

t age puppy age sole t age Ranking t age
Rankin Ranking
g
Price and Quality 3 3 0.43 2.5 0.34 2 0.24
Out look of the 1.5 1 0.14 1 0.14 1.5 0.18
outlets
Fashionable 2 0.5 0.07 1 0.14 2 0.24
designs
Well-trained 1 1 0.14 1 0.14 0.7 0.08
employees
Research & 0.5 0.5 0.07 0.4 0.05 0.3 0.04
Development
Product 2 1 0.14 1.5 0.20 2 0.24
availability

total 10 7 1 7.4 1 8.5 1

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Major Companies:
There is no any major competitor of our product in the industry but there are indirect
competitors like the casual wear industry making joggers which are not basically walking shoes
but the sport shoes

Dominant Force of the industry

The most dominant force of the industry is effective awareness and Promotion campaigns, which
is considered to very critical in confectionery industry.

WHICH Force will become the most dominant?

The emergence of new type of distribution channels like online purchasing as well as price cut
strategy buy launching unique promotions and marketing of the product in the right way can lead
toward the better future.

Number of companies five years downs the road

Number of companies after five year will be larger as compared to what is today, since the
process by which shoes are produced is not very complex number of companies are involving in
the production of shoes leading to emergence medium producer in the confectionery industry.but
the use of latest technology and R&D will help us in it.

How to gain competitive edge:

Customer satisfaction: -

Produce everything according to customers’ requirements consistently and continuously strive to

produce new, besides adhering to legal / regulatory requirements.

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Continuous improvement: -

Strive continuously to improve the quality of all articles, reduce costs of best quality, reduce
delivery time, and continually improve the quality management system and achieving quality
objectives.

Employee participation: -

Empower, educate and train employees so that they are able to take decisions themselves
regarding improving the quality and efficiency of their work.

These few factors if are worked upon can help a firm gain competitive edge on the others.

Concentration index:

Casual leather shoes: high price

Bata + service + hush puppy + urban sole + EPCOT + Starlet

Bata: 5-10%

Servis: 30%

Hush puppy: 25-30%

Urban sole: 10%

Leaders are hush puppy and Servis having the shares 60% so we can say that market is less
fragmented and concentration index is high.

Concentration index is determined on basis of market share. Greater the market share the market
will be more concentrated and less fragmented. These three companies hold 70% market share it
mean these are the major market players while considering the brand recognition and even in
production. All these companies hold very strong brand names in the industry and larger market
share. It means their concentration index is substantially high.

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Key Success Factors:

Confectionary business largely depends on the effectiveness of distribution network: however,

following factors are found to be imperial implications for the success of business with the help
of five forces analysis. Strength and weakness tell us about the competitive edge of any
company. These can only be evaluated when we know about the KSFs of the industry.
For the footwear industry the main KSFs are
 successful product designs
 Supply chain is the core competency
 Inventory turn
 Fashionable designs.
 Efficient service
 Well-trained employees.
 Research & Development
 Out look of the outlets
 Customer Awareness
 Product availability
 Price and Quality

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Gap Identification

Need Gap Analysis

GAP Analysis is all about what customer needs and how company is fulfilling that gap. So for
this reason we conducted research in the market to find that what customers are thinking
about the driving shoes. Largely, people were not satisfied with the regular shoes because of
higher prices of shoes; the comfortable shoes are expensive, all low quality available in the
market. So in order to meet customer requirements regarding walking shoes, we are launching
comfy shoes that will fill the gap that restricts the product to meet the requirements of
customers. And provide the quality walking shoes at reasonable cost.

How does our product/service fulfill this need?

Our product is serving customers because of different features in walking shoes as required by
the market. So our product is satisfying the requirement of our customer and satisfying them.
Secondly regarding our services, we are providing appropriate walking shoes with an ease of
environment according to the requirements of Customer. we are trying to give healthy
environment in which every customer will be given necessary information. The customers can
contact us through our telephone numbers and the calls will be free of cost. Hence our product
is designed to meet the requirements of the customers and it will provide value to them.

Justification of Innovation Based on Need Gap Analysis

Our basic focus is to give consumer quality, comfort, design and durability. Customers want to
buy quality at affordable price .So to meet the standards of customers; we are bringing
innovation in shoes with different features. So based on our analysis we are providing different
product in market for creating difference from other shoe sellers, As people are familiar with
tradition one type of shoes that are simple and far more expensive than our product. So we are
pretty much sure that our innovation will have worth and people will purchase it like hotcakes.
The gap which was created in a market segment consists of those people who have money to
buy walking shoes but do not purchase because of highly expensive and the increasing prices of
regular shoes or pads. Those people will also afford to buy our walking shoe.

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STP

Segmentation
Segment is main part of the strategy changing the segment is actually the change in strategy .To
improve segment it is necessary to take combination of different factors to define your segment.
Market includes all the potential customers to dividing customers to whom we can serve well so
we take different demographic indicators to identify our segment. Our segment include following
areas.

Age: 16 to above

Gender: male and females (both)

Family Income bracket: 40000 or above

Occupation: Student, Businessmen, professionals

Geographical Area: Lahore (DHA, Gulberg, Model town)

Buying behavior: quality and comfort conscious and brand conscious.

Market size
Pakistan total population is about 169,708,303 while the population of the Lahore is
approximately 10 million and in this 10 million the areas we are going to target have population
of is

 DHA= 660931
 Model town= 100000
 Gulberg= 700000

It is about the 15% of the Lahore total population. While the segment we are focusing is 62.2%
of this population. And about 69 % approximately people fall in our income bracket in these
areas.

10000000*15%*62%*69%=641700

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And we want to take 30% of this market which is about 200000 customers

Targeting
While studying the demographics of Pakistani people we came to know that six social classes
exist here .Our target market is those families who earn monthly income RS 40000 and above.
This gives us market of upper middle, lower upper and upper class. The description of upper
middle is that these are involved in successful businesses and other professional fields. Lower
upper class consists of nouveau riche, highly successful business and professional and those who
had acquired these positions through wealth. Upper class consists of elite social class with
inherited social position. All these peoples buying behavior shows that they can buy shoe costs
2000 and above. So, that the company’s demographically target main area of Gulberg, Defence,
Model town because the upper middle and upper-upper class lives in these areas. And the major
age group we target is of age 16 to 40 and above.

Categories Teen Man Women Over

agers aged

Professional driver X X

Regular driver X X X X

Medicated driver X

canvas X X X X

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Positioning

Positioning is offering in market place.in other words

we can say the value we are providing to our
customers is positioning. Why you chose the product?
How you position things in the mind of customers.

“We provide high quality leather walking shoes of

best design and quality to make you comfort. Our
product is for all those persons who are in any
profession, student, businessmen and old age”

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Growth potential
It can be achieved in two ways

a) Market expansion

b) Entering in new market or market expansion

In our case we can expand our market by offering new designs and varieties .We can even offer
customized products but it needs careful handling by the management otherwise it leads to
higher costs. When our business will expand and costs would be under our control we can even
further expands our market segments an increase sales but at the beginning it may not be that
applicable.

Barrier to growth
Since driving shoes can be copied and it can leads to more competitors and eventually smaller
market shares for all. Some firms have competitive advantage in the form of brand names which
can be a barrier too. Other barriers include entry into the business.

Customer priorities
On the basis of questionnaire and SPSS results we conclude that 4 major segments exist. Cross
tabs observations showed that 27% people are quality conscious,67% are price sencitive,34% are
brand conscious and 74% are outlook conscious. From the following we can select our area of
interest.

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Marketing mix
PRICING STRATEGY (price skimming)

We are introducing a new product in the market so we will skim the market by setting high
prices. In this area we concluded by our calculations that we can charge Rs.2000 to Rs.5000 for
each pair of shoes and these would be off course for the innovators of the product life cycle
which are 2.5% typically. Then we have to lower our prices because other competitors would
come into the business and higher prices would lasts longer. In that phase of our business when
our product will move towards growth stage we will reduce price relatively and in maturity stage
we will try to differentiate our product and set price that is lower enough to give us reasonable
profits and value to our customers.

The company uses the psychological pricing method. The company will charge 1995 instead of
2000. The logic behind is that the customers have a psychological price threshold and will group
prices in broad brands for comparison purpose. The company will also offer sale prices
according to company policy on special events like Eid, Ramzan etc.

Also on the start we will offer a discount of 10% for a week and later own the discount will be
associated with the order like if any firm contact with us and want to buy in bulk .we will also
use the strategy of price cut on the old stock or out fashion designs.

Sale and distribution strategy: (Place)

We are going to open our retail shops and factory outlets also we will franchise our product and
display it on different stores like hyper star, metro, macro etc. there will also a moving shop in a
container that will also prompt our selling campaigns our shops will be in such a area where the
people traffic is very high we will establish our shops in Gulberg, DHA, Model town. Fro
delivering our product we will use a van that distributes the product to our stores. We will store
our inventory in our warehouse and then distribute it from there our supply chain depart will
check the inventory requirement at the end of every week.as this is the age of IT so we will also
make a website so the customers can easily see our products and can place the order while sitting
at home

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Advertising strategy & Promotional Strategies

Below the line (BTL) that believes in unconventional brand-building strategies such as direct
mail and printed media (usually involve no motion graphics).

So the Company will adopt below the line strategy.

 Display stands
 Flex stands
 Broachers
 Bill boards

The company uses these materials for the advertising and promotion to tell the customers about
the product, we will also use our personal relations and the customer relations to prompt our
brand.

Positioning

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Packaging

There are different levels of packaging which Ikea use. These levels are described below with the
help of figure.

Levels of packaging

Package life cycle

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SWOT analysis

Strengths
 Quality
 Design
 Innovation
 Comfort & durability
 Market leader

Weakness
 no sustainable competitive advantage
 lesser distribution points
 not well established brand name
 weak financial muscle
 less experience of management

Opportunities
 Can expand market if idea clicks
 Can entre in new product line
 Can explore new markets

Threats
 Substitutable products
 Retaliation
 Copy cats
 Strong competition

Brand name
It is crucial in shoe industry of Pakistan because there is a trend towards branded products. Brand
reorganization and awareness is high. People that are sensitive and specially women’s go after
the brand without checking their quality or any other variable which they had heard well
previously. An established brand name can make consumer not to switch to the other brand and
travel to search its outlets .Remember this is shopping product and customer is willing to select
among different alternatives. Brand name restricts him to switch and that is why companies are

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thinking these days to treat brand name as assets which truly depicts its significance.People are
crazy about the look of their accessories whatever they wear. Society is surrounded by
ostentation. People do not just compare price or quality variable before their purchases but also
out luck of their foot wear. Nice design can be a CA for firm in this industry.

Distribution channel
As we know that shoes are shopping products in which people compare different brands in terms
of quantity, price, comfort etc. so in this case distribution is very important. Consumer may
switch due to non availability of specific brand in major locations. Here if logistics system is
efficient than one can even create competitive advantage out of it.

USP
The Unique selling proposition of the company is that the company uses the innovative
technique of selling through a moving shop. There is not any single company who is using that
channel of distribution for selling the product.

Cheap raw material availability

This is another important factor because in shoe industry entry is very easy and in this situation
the key is to offer the required product on lower prices than others and this will lead to the vary
basic concept of marketing that value comes out of the value chain i.e. cheap availability of raw
material which leads to lower cost of production and ultimately provides value to the customers.

Technology
Today specialized shoes are being made for example: running shoes, walikg shoes and shoes
with pressure points to control sugar. In these circumstances technology plays crucial role
because shoes made with a specialized purpose may be totally designed differently for example:
Sole with pressure points is the outcome of technology. Even in designing software technology is
involved .like air shocks cannot be made with hands or normal shoe making procedures.

Continuous innovation
Life style is changing rapidly which leads to changing needs. Especially in society like ours
where showoff is practiced Change is very important which can come through continuous
improvement. This lays heavy burden on entrepreneur to creatively sense the changing needs of
masses and respond to it before the competitors. In our case designs and leather quality are the
major source of innovation so capable designers are very crucial for us with other technical
innovations.

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IFE/EFE Matrix

key internal factors weightage rating weighte

d score
Strengths: 1-4
Quality 0.1 3 0.3
Design 0.15 4 0.6
Innovation 0.15 4 0.6
Comfort & durability 0.1 4 0.4
Market leaders 0.1 4 0.4
Weaknesses:
Low capital 0.1 1 0.1
Not well establish brand 0.1 2 0.2
No outlet 0.1 1 0.1
Inexperience 0.1 2 0.2
management
=1 2.9

1) major weakness 2) minor weakness 3) minor

strength 4) major strength

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EFE Matrix

key internal factors weightag rating weighted

e score
Opportunities: 1-4
Can expand 0.15 4 0.6
New product line 0.15 3 0.45
New markets 0.15 4 0.6
Threats:
Substitutable products 0.1 1 0.1
Retaliation 0.1 1 0.1
Copy cats 0.15 1 0.15
Strong competition 0.15 2 0.3
1 =2.3

1) poor 2) below average 3)above

average 4)superior

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