This assignment is submitted in partial fulfilment of the marketing planning unit. I have been asked to conduct macro-environmental and micro environmental marketing audit to identify the current and key issues facing the organization & I propose to launch a Fabindia store in Milan, Italy.
The report outlines reasons for undertaking the audit and appraises the processes, models and techniques used for the audit. It also assesses the external and internal marketing environment for the organisation and summarises the impact of this analysis for the organisations marketing plan and marketing mix. Finally have proposed a marketing plan & details about how it can be executed.
The first Fabindia outlet was set up in 1961 by John Bissell to provide a platform
for traditional artisans and printers to market their produce & to showcase diverse
craft traditions of India.
1.2 Current Philosophy:
Eco-friendly, ethical & hand crafted Indian products.
Traditional, ethnic products creating sustainable employment for craftsmen and
artisans in rural India.
1.3 Current Target Audience:
Age Group: Not specific
Sex: Male & Female
Economic Class: Upper and higher middle class.
Geographical Places: Metros, tier 2 & tier 3 cities.
Heritage hotels, resorts & corporate houses.
1.4 Current Product Range:
Garments for men and women, Accessories, Home Linen and Furnishings,
Home Products, Floor Coverings, Body Care Products and more recently, Organic
Food Products and ethnic jewellery.
1.5 Timeline of its stores:
1976 – 1st retail outlet, New Delhi.
By 2001 – 6 stores concentrated in the metro cities.
By the end of 2004 – 20 stores.
By the end of 2007 – 75 retail stores across India and in addition, stores in Dubai,
Rome and Guangzhou in China.
By 2008 – 99 stores.
By 2009 – 108 stores.
By 2011 – Target of having 250 stores.
Fabindia: Retail Snapshot
- 108 stores across 40 cities
- 6 stores abroad. – Dubai, UAE, Bahrain (three stores), Doha, Qatar and in Rome, Italy.
- Online Shopping & Exports to 34 countries
1.6 Sales & Revenue:
2000-01 : Turnover of 36 crore rupees
2005-06 : Turnover of Rs 130 crore.
2007-08 : Revenue of Rs 257 crore
2008-2009 : Revenue of Rs 300 crore. but growth more than halved to 17% from
40% in 2007-08.
By 2011: Target turnover Rs 1000 crore.
1.7 Future Plans:
Leveraging the Organic Products section, children’s market.
Expand nationally & internationally.
100,000 shareholders and five-fold increase in skilled jobs in the rural sector.
Reduce the number of defects in the products to a minimal which include bleeding of colours, shrinkage etc.
2. Internal Audit:
2.1 SWOT Analysis:
Diverse product mix,
Eco-friendly, ethical, natural & stylish,
Showcases diverse Indian craft traditions – contemporary styles,
Creates employment for craftsmen in rural India,
Different categories of stores,
Products – all age groups &
variety of economic strata,
Constant development &
innovations – product line,
Partnering – suppliers & sourcing from 21 states across India,
Big distribution network,
Manifold growth of most artisan suppliers linked exclusively to Fabindia.
No awareness about the brand,
Limited channels of business,
Sourcing strategy skewed towards suppliers,
Competition from brands having similar product range,
Inconsistent quality of products.
Time-lines and Delivery schedules dependent on too many variables,
Monitoring and Supervision – contemporarising and bench marking of traditional skills based products,
Building Capacity – time and resource intensive,
Not in touch with Fashion Trends,
Competition from leading Italian brands & stores.
In store merchandising,
Promoting e-business channel,
Interactive website for customized designing
Organic foods market,
Customer acquisition Strategies,
Growth in demand : eco-friendly products,
Growing interest – Indian
culture, handicrafts & textiles,
Milan – host for 1 of world’s most prestigious furniture and design fairs.
Milan – one of world’s major financial & business centres,
World’s 26th richest city by
3. External Audit:
3.1 PESTEL Analysis:
Change in implementation of rules & regulations with introduction of new government.
Eg No foreign collaborations, no foreign goods and products coming in the Italian market.
Changes in policies by existing Indian government. Refer RESEARCH final.doc5.1.1
Changes due to economical descend.
Eg. Reduction in employment rate & purchasing power of
people, resulting in low sales.
Social acceptance towards certain colors might vary according to
different cultures and stratas of society.
Eg: Products in bright colors which are popular in India is not
socially accepted in Milan. Refer RESEARCH final.doc5.1.3
Utilizing technology & infrastructure of international standards.
Eg. CRM software implemented in stores will help in
maintaining centralized database.
This will help Fabindia in retaining customers by building lasting
relationships & improving Loyalty.
Material used for making products not approved & allowed by
Eg. If products are found to be made of materials hazardous to
the environment the Italian government can take strict actions
against the company under the Environmental Protection Law.
Difference in manufacturing standards , process , trading etc.
Eg. Conformity to European standards and “CE” marking.
Taxes for businesses in Italy. Refer RESEARCH final.doc5.1.6
3.2 Impact of Porter’s 5 Forces :
Threat of Subsitutes:
There should not be threat of substitute to the products of Fabindia since they are eco-friendly & organic products which have replaced the ordinary conventional products & are in huge demand.
4. Market Segmentation :
All age groups.
Male & Female
- Fabindia intends to continue expanding internationally & currently – 6 stores abroad.
- Milan – very important city in Italy &one of world’s major financial & business centres.
- Main goal of Fabindia – to promote vast & diverse craft traditions of India.
- Since there is a growing interest among Europeans about Indian handcrafted products, Indian textiles, art& cultures, Fabindia holds lot of potential in European market.
- Fabindia – very ethical & eco-friendly company which supports many causes & Europeans like being part of such endeavours.
- Fabindia does not target any specific age group or any specific economic strata, has something for every one.
- Fiera Milano – city’s ExhibitionCenter and Trade Fair complex is one of most important in the world & Milan is one of fashion capitals of the world. Fabindia wants to increase its global reach, & since lot of international buyers visit Milan, it can prove to be great opportunity for it.
- The employment rate in Milanis 95-96%& therefore the spending power of people is very high.
Thus opening a store at Milan should prove to be beneficial.
5. Proposed Marketing Mix:
- They should carry out extensive market research, study kind of products established stores are selling. Meetings with designers & artisans can be conducted – designers give inputs on current market trends and emerging designs to weavers & brainstorm innovative techniques.
- They can design stylish products emphasizing on Indian craftsmanship & explore rich Indian fabrics with numerous surface ornamentation techniques.
- Range will be exclusively designed for the Milan market.
- They can take customer feedback through their online website & know preferences of their customers & design accordingly.
- Farmers will supply Fabindia with organic varieties from places like Himachal Pradesh, Punjab, Coorg, Tamil Nadu.
- They believe – giving farmers fair price for their produce, and supplying very highest quality food to their customers.
Product range – fine combinations of Indian aesthetics and western design sensibility.
Products – different price ranges. Products will be affordable, will give ‘value for money’. It hasexpanded its range- to provide something for all its customers.
Type of Products
PriceRange ( Euros)
Textile-based product range
Home Products range
5.3 Place :
- Fabindia should be strategically located at Sesto San Giovanni – full of commerce, restaurants, hotels, malls, rail station, red line of Metro. Brand Zara home is located there & Habitat is near by.
- 2 eco hotels Hotel la Residenza – Via Scialoia or Hotel Ariston, Galeria del Corso near Sesto San Giovanni can be considered.
- Piazza del Duomo is also very good location which attracts lot of people – boutiques, bookstores & big stores to indulge in elegant and cultural shopping.
- They can haveconcept stores or premium stores located in famous historical landmarks and renowned big heritage for convenience of potential buyer and creation of overall awareness.
- With help of Search Office Space (SOS), can find appropriate
- FREE Service – They are paid by advertisers.
- Impartial Advice – Their mission is to find space that meets YOUR requirements.
- They provide with tailor made options that match your specifications.
- They take care of entire search – show options, help create a shortlist, arrange for
you to view space, compare prices, make your final selection and arrange your move-in date.
- Promoting its products, mostly through posters, word of mouth and events.
- Placing ads in local newspapers about ongoing events organized in store & to increase awareness about store locations, usinglot of in-store posters to create consumer awareness about products and rural suppliers etc., putting up hoardings, creating awareness – social causes which they represent & associate with, promote through website.
- GlobalCom PR-Network is – worldwide group of full service PR and Marketing Communications agencies. It – more than 40 partners and affiliated agencies cover all member states of European Union. Their strength is their local expertise in all European market.
- Portfolio includes:
- Public & Analyst Relations
- Marketing Communications
- Online Marketing
- Market Research
- Media Training
- By engaging professional PR agency – conversant with Italian Market environment, different strategies can be devised to promote store.
5.5 Process :
It believes: “Delighted Customer is our Best BrandAmbassador”. It should focus on customer retention & build loyal customer base.
- It should implement CRM software – aims to help maintain centralized database to keep records of customers, details about past purchases, preferences or by having Value Customer Card – gives history & customer details each time, card is swiped.
- They should have interactive events for customers with design team, customers can get style tips, Feedback sessions between Fabindia designers & customers & loyal customers can be given certain privileges & get special invites to events organized by Fabindia like exhibitions, concerts. & will help it in retaining customers & improving loyalty.
5.6 Physical Evidence:
By endorsing and sponsoring events- creative communication tools & innovative activities – attract customers & gaining maximum publicity possible.
- Having in store posters to create consumer awareness about dyes used in products, products and where they come from, i.e. rural suppliers
- Having décor and layouts – highlight traditional and natural focus, having catalogues giving details – current merchandise, LCD screens playing how artisans work & manufacture, brochures informing – Fabindia events lined up, Indianised eco-friendly stylish carry bags with personalized thank you cards, leaflets informing – causes Fabindia supports & eco-friendly practices it follows.
- People working with and for Fabindia – representatives of Fabindia. They should be aware of all its products, be knowledgable, friendly, helpful, attentive, speak lot of languages and develop good customer relations.
- Store personnel – encouraged to wear clothes that reflect Fabindia ethos of traditional and natural look.
- Fabindia should register on website of recruiting agency – help it to find its potential employees.
- Fabindia should train people with required knowledge and customer service.
- People working in store can attend regular training programmes.
6. Ansoff’s Grrowth Strategy:
6.1 MARKETING STRATEGY FOR FABINDIA MILAN USING ANSOFF’S GRID
- Milan – potential market with growing interest among Europeans about Indian handcrafted products, Indian textiles & cultures & Fiera Milano – city’s Exhibition Center – one of most important in world – visited by manyinternational buyers, great opportunity for Fabindia & help increase global reach.
- Fabindia – very ethical & eco-friendly company, supports many causes & Europeans like being part of such endeavours.
- Currently Fabindia store in Rome, Italy has been doing well.
- Fabindia – expand internationally & to create brand awareness in new place, to launch itself in different parts it should use Market Development Strategy .
- Fabindia – very popular for its fashion apparels – mostly made of homespun cotton. But one cannot wear cotton due to climatic conditions in Milan.
- The colors of Fabindia products – mostly very colourful, but due to gloomy weather in Milan larger population prefer pastels & mid tones of all colors – summers and winters black n brown rules.
- Milan – fashion capital & houses leading brands, famous for their innovative designs.
- It is important for Fabindia to have its merchandise designed & their range planned as per market in Milan & I strongly suggest Product Development Strategy.
- Core values of Fabindia – to provide quality natural products, reflect the unique Indian culture& hence Isuggeststore can be located infamous historical landmark & have layouts – highlight traditional and natural focus.
- Store showcases rich legacy of India’s traditional weavers, offering wide array of styles – contemporary and sophisticated, must create distinct image & location must be chosen with utmost care.
- Fabindia very ethical & eco-friendly brand & Ariston hotel – first ecological hotel of Italy- perfect place for exclusive Fabindia store.
- Ariston hotel – situated in heart of Milan, 500 metres from the Duomo, monuments ,few steps from Via Torino shopping area.
- With privileged position compared to other 3-star, & near Piazza del Duomo andsubwaystops(to New Fair). Very well serviced bytram, bus.
- Very strategic location connected to all important places – renowned museums, monuments famous shopping streets, restaurants, pizzerias & movie theaters near the Duomo & awareness could be created through advertising & physical evidences.
- Since new market & no awareness, needs to carry out lot of promotional activities. Can organize events like authentic Indian food festivals, , interactive workshops with Indian designers, showcasing the rich Indian culture.
- Fabindia – associated with social causes, create awareness about involvement and brand. · Can organize social events , sponsorships, advertise in magazines, hoardings, posters to create consumer awareness,Know what you wear – Workshop. Makes customers more aware of work put in for their fabric and helps them with association with brand FabIndia.
- Lot of competition – leading established brands in Milan selling similar products.They need to create distinct image & come up – product range exclusively for Milan after doing a detailed market research, products with innovative ecofriendly stylish designs with
Indianised touch. Lot of importance – laid on aesthetic appeal & good quality.
- Should focus on customer retention & work on strategies to build a loyal customer base.
These are my recommendations for launching Fabindia in Milan.
Mystery Shopper Program:
- In mystery shopper program, person hired by management goes to every store and shops there and then give feedback according to customer perspective.
- Store people never come to know or suspect anyone whether he is a mystery shopper or not. Detailed feedback is given to every individual shop. It consists of minute details – signages outside, restrooms, behavior of staff.
- So it serves as a tool to provide better customer satisfaction.
Feedback registers & Feedback questionnaire to be filled on the website:
- Customer feedback by maintaining visitors’ register to record customer views or through questionnaires filled online.
- Store managers can prepare report, periodically reviewed by Product Selection Committee to know about buying pattern among consumers.
CRM software & Value Customer Card:
- CRM software can be implemented – to maintain centralized database to keep customer record details or by having the Value Customer Card – history & details of customer each time, card is swiped.
- Can get to know – fast & slow moving products, popular styles & can accordingly do range planning.
- Can have meeting every month to review performance & discuss measures to be taken to improve sales & increase consumer satisfaction.