Description
PROJECT ON INDIAN LUGGAGE INDUSTRY
[MARKETING MANAGEMENT] December 15, 2007
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Travel Equipment Market
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[MARKETING MANAGEMENT] December 15, 2007
Acknowledgement Executive Summary Indian Luggage Market ritical !iew o" t#e Luggage Indu$try &er %997 &o$t %997 Environmental Scanning
!.! Tech ological E "iro me t !# !.$ %ocial E "iro me t !# !.& Eco omic E "iro me t !# !.# 'olitical E "iro me t !(
07 09 %% %' %( %)
&orter$ Model Ma+or &layer$ in t#e ,rgani-ed Sector !.I.&
!.( 'ro)*ct 'ortfolio !.+ ,bjecti"es $!.. %egme tatio $/ !.- 0istrib*tio $/ Net1or2
%* '' '(
$#
!./ 'ro)*ct 0iffere tiatio !.!3 !.!! !.!$
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'ositio i g &3 %trateg4 &! %5,T A al4sis &+
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[MARKETING MANAGEMENT] December 15, 2007
ompetition "rom Sam$onite / t#e 0norgani-ed Sector
!.!& 6ritical Aspects #$
(1
Sam$onite
!.!# !.!( !.!+ !.!. !.!!.!/ !.$3 !.$! 7ra ) 'ortfolio ## 'ro)*cts 8i es a ) 5i)th #( 0istrib*tio #'ositio i g #/ %egme tatio #/ 'ro)*ct 0iffere tiatio #/ 7*si ess %trateg4 of %amso ite (3 %1ot A al4sis of %amso ite (3 Net1or2
)(
SA2A3I &roduct$ / &ricing
!.$$ !.$& !.$# !.$(
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4' 4'
'ac2s ($ 8*ggage ($ 7*si ess Gear (& %ho*l)er 7ags (#
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!.$+ !.$. !.$!.$/
Tote 7ags (# 'laces a ) 'romotio s (( '*sh strateg4 (( '*ll %trateg4 ((
3e"erence$
4*
Executive Summary
B
rief Insight into Indian Luggage Industry
The luggage industry in India is currently undergoing a consolidation hase! "om etition in the sector is e# ected to intensi$y %ith the entry o$ $oreign layers li&e Delsey o$ 'rance! "om anies %ith good research and de(elo ment $acilities are
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e# ected to sur(i(e %hile others may end u as contract manu$acturers $or the bigger layers! The luggage mar&et com rises o$ three segments namely the premium segment %ith 15* o$ total mar&et share, the popular segment and the standard segment! Samsonite +International, and -IP are the dominant layers in the remium segment %ith a mar&et share o$ 52* in the o ular segment! -!I!P! industries and .ni(ersal dominate the lo%/end standard segment! The luggage market is dominated by the unorganized sector with 50% market share. Northern and western India are the biggest markets in the country. V.I. . and !amsonite are focusing on de"elo#ing their distribution networks. $oth #layers are also into e%#orts. V.I. .&s e%#ort touched 's.()* million in (++,-+. and is mainly targeted at /ulf and 0est 1uro#ean 2arkets. !amsonite #osted an e%#ort turno"er of 's.(50 million for the year ended 3ecember &+.. Luggage manufacturers4 #articularly V.I. . ha"e slashed #rices following decline in #rices of raw materials. The organized sector 5.%6 is growing at a lesser #ace when com#ared to the unorganized sector 575%6. The organized sector will ha"e to face the reality that #layers in this sector may become organized and come out with branded #roducts emerging as com#etitors to the e%isting #layers in the organized sector. The organized sector has to be cautious of the de"elo#ing grey market.
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Indian Luggage Market The Indian luggage market is worth nearly one thousand crores. 8 considerable #ortion of the market is unorganized. The table below gi"es the distribution of the market between the branded sector and the unbranded sector. Market Si-e9 's. +00 crores
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:rganized !ector uncture4 the aggressi"e iramal grou# took o"er pecte) Retaliatio 9; ? 3# anding o$ the distribution net%or& by the e#isting layer! ? 6ccessibility o$ roduct! ? Price cuts 8 discount!
3,
E tr4 )etermi i g price 9; =i(en the strong brand 8 mar&et resence o$ the e#isting layers 8 their %ell established distribution net%or& the ne% entrant %ill ha(e to lan $or hea(y initial in(estment in order to ma&e his re(ailing resence $elt! This %ill ha(e to be done under the rice structure ta&ing into account retaliation $rom
the e#isting layers
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Thus the returns may not be as soon as e# ected %hich itsel$ may $orm a barrier to enter into the industry!
),
7argai i g 'o1er ,f %*ppliers9; liers 8 lac& o$ substitute roducts!
? Dominance o$ $e% su
? 6lthough there is an additional ca acity o$ the ra% materials re9uired $or the moulded luggage, there is limited to the 9uality o$ the a(ailable material! There is no substitute ra% material to the material used at 6BS! This shi$ts the bargaining 6lthough Aeliance has the their roduction 8 su ly! resent i!e! Poly ro ylene 8 liers o$ o%er to%ards the su rocess to su
the ra% materials! Aa% materials ma&e u $or 50* o$ the cost! ly 9uality ra% material the (olumes o$ the luggage industry do not 4usti$y
5,
%*ppliers9; Aa% materials used $or moulded luggage are mainly Poly ro ylene 8 BDP3 6crylonitrile Butadine Styrene +6BS,! These are by roducts o$ etroleum! There are lenty o$ su liers! Coreo(er the materials can be
im orted as PP is under the >=D because o$ %hich com anies li&e Samsonite 8 -IP im orts their ra% material! There has been no shortage in the su ly o$ the material! Due
to the e#cessi(e ca acity 8 the South 3ast 6sian "risis the
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rices o$ the ra% material ha(e dro last t%o years!
ed by about )0* in the
Thus in the scenario o$ enhanced com etition in the moulded luggage industry the di(ersity o$ su bargaining o%er o$ the su local sellers! liers 8 o(er ca acity %ithout the sco e o$ $or%ard integration has limited the liers! The unorganiEed sector sources its ra% materials +recycled lastic, $rom a number o$
0,
7argai i g 'o1er ,f 7*4ers9; The organiEed sector has $e% buyers com ared to the su o$ ra% material, %hich is a(ailable in lenty! The ra% material $orms 50* o$ the total cost o$ the roduct! There is no restricti(e sale olicy by the go(ernment as regards to the ra% materials! Bence buyers can ha(e resource to the international mar&et! The ra% materials are under the o en general license %hich can im ort $reely! In the unorganiEed sector the su to the buyers! There is no sco e o$ bac&%ard integration by the buyer because o$ the number o$ su liers 8 the $ree im ort olicy! There is no roduct di$$erentiation o$ the ra% materials! liers o$ the ra% material liers
+recycled lastic, are many 8 this shi$ts the bargaining o%er
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I te sit4 of ri"alr4 amo g e>isti g competitors 9; The moulded luggage industry can be di(ided into 3 segments7/
? Standard ? Po ular ? Premium In each segment there are 2/3 com etitors! -IP is the leader o(erall but in each segment there is intense com etition as each com any tries to ma#imiEe its mar&et share!
1,
%lo1 I )*str4 Gro1th9; The gro%th in the moulded luggage industry has been sluggish 8 the com etition is getting intense! "om ared to the gro%th rate o$ so$t luggage mar&et or 25* the gro%th rate o$ moulded luggage is about 1/10*, %hich is relati(ely slo%!
2,
0iffere tiatio intense
? %1itchi g 6ost9; le(els! Product di$$erentiation e#ists
There is a lac& o$ s%itching costs in this industry leading to com etition amongst the layers in the standard and o ular segments!
10,
0i"erse 6ompetitors9;
Di(ersity in terms o$ strategy origins triggers o$$ intense ri(alry! In this industry the com etitors are into the mar&et %ith di$$erent means o$ ca turing the mar&et! This leads to intense
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com etition es ecially during the season o$ marriage 8 tra(elling %hich are considered eriods o$ ea& sales!
11,
E>it 7arriers9;
3#it barriers may be economic strategic or emotional in nature! The s ecialiEed machinery used in the manu$acture o$ luggage the in(estment com anies ma&e in terms o$ roduction human resource, building u distribution net%or& are enormous 8 layer trying to ma&es it di$$icult $or the com any to e#it! This then intensi$ies the ri(alry among com etitors %ith each o timiEe utiliEation o$ assets!
12,
%*bstit*te 'ro)*cts9; rice ad(antages ut a
The resence o$ substitutes %hich er$orm $unctions essentially similar to the e#isting one 8 o$$ering ca acity on the ro$its o$ the industry! The luggage industry can be di(ided into the hard moulded luggage 8 the so$t luggage! The so$t luggage is a er$ect substitute $or the moulded luggage! Fith a gro%th rate higher than the moulded luggage there is a ca acity to the e#tent the hard luggage mar&et gro%th! 6lso the $le#ibility o$ the so$t luggage in terms o$ siEe design rice etc! ma&es it a otential threat to the hard moulded luggage mar&et!
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MA@,R '8AAER% IN TBE ,RGANICE0 %E6T,R • -!I!P! • Samsonite • 6ristocrat • Sa$ari • =iordano • Delsey • 6merican Tourister • Aimo%a • Gi ling • ;ans ort • Blue 8 Blues • ;ang • 'iorelli • >thers
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V.I.'.
-IP Industries Dtd! is the $lagshi com any o$ the D= Piramal =rou ! 3stablished in 1271, it is a leading luggage manu$acturing com any, %hich manu$actures strollys, suitcases, e#ecuti(e cases, bac& ac&s and other hard and so$t/sided luggage! It o%ns re uted brands such as -IP, 6l$a, 'ootloose and Buddy! It has t%o manu$acturing units in India and (arious subcontract o erations in "hina and Indonesia! "urrently, it has a %or&$orce o$ nearly 2000 eo le! -IP is a %ell/&no%n and re uted brand name in India!-IP has been increasing its resence in %orld mar&ets in the luggage industry! The com any has o erations across the globe in $i(e continents! It has o$$ices in the .S6, South 6sia, Ciddle 3ast, 6$rica and 3uro e, Forld%ide,
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-IP
roducts are sold across 1300 retail
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outlets in 27 countries! "urrently, it e# orts its countries!
roduct to Fest
6sia, 3uro e, the .S6, and select 6$rican and South 3ast 6sian
'ro)*ct 'ortfolio The roduct ort$olio o$ -IP Industries Dtd! today includes a
di(erse range o$ hard/sided and so$t/sided luggage! The range includes strollys, suitcases, du$$les and o(ernight tra(el solutions, e#ecuti(e cases, bac& ac&s, and e(en school bags! -IP Industries
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Dtd! has reno%ned brands li&e -IP, 6l$a, 'ootloose, and Buddy co(ering the entire s ectrum o$ tra(el Dtd! has a license and mar&ets Delsey S66A" These roducts! -IP Industries roducts in India and countries! roducts reach o(er 1000 retail outlets across the country!
>utside India, %e ha(e a net%or& o$ o(er 1300 retailers across 27 countries! >ur range includes in4ection moulded PP casesH (acuum $ormed 6BS cases as %ell as so$t/side luggage in nylon, olyester and 3-6 material! 8*ggage Bar) s*itcase, soft s*itcase, har) *pright, soft *pright, cabi Tra"el 7ags 7ac2pac 2s E>ec*ti" e bag D l*ggage. Totes, tra"el bag, tre22i g bag, trolle4 tote. %chool bag, tre22i g bag, laptop bac2pac2. 7riefcase, soft e>ec*ti"e bag, trolle4, messe ger bag N4lo , s4 thetic Efoam:, pol4*retha e, leather. 'ol4prop4le e, pol4carbo ate, A7% 4lo . N4lo , leather N4lo
'ortfolio laptop bag, 8aptop
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7elts
'*re 8eather Re"ersal belt 1ith re"ersible b*c2le ? reg*lar b*c2le Reg*lar belt 1ith fa c4 b*c2le ? reg*lar b*c2le 6as*al belts '*re 8eather & to !3 cre)it car) hol)er 1ith poc2ets for coi s a ) i)e tit4 car) 6ar) hol)er 1ith poc2ets for coi s Cip poc2ets, $ fol) 1allet 1ith poc2ets for coi s a ) car)s & fol) 1allets 1ith poc2ets for coi s a ) car)s 6re)it car) hol)er 1ith !3 to $3 poc2ets %ec*rit4 leg 1allet, ec2 safe po*ch,
8eather
5allets
8eather
Tra"el ies
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Accessor hip mo e4 belt,
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secret 1allet, shoe bags, passport co trol 1ith . compartme ts, ha )s free 60 case, M'& pla4er case, i'o) case, e4e glass hol)er, cell po*ch, fol)able bag, 2e4 loc2, *mber loc2, l*ggage tag, tra"el pillo1, toilet 2it, l*ggage strap, 2e4 po*ch, tra"el sec*rit4 1ith Ba )ba gs *mber loc2 etc ,ffice D E"er4)a4 bag, mess bag, shoppi g bag, leather bag, leather p*rses, leather 1allets, je1el bag, fa c4, "a it4 har), "a it4 soft 8eather, N4lo
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The
com any 7
entered
the
nineties
%ith
$our
sub/brands,
segmented on $orm and customer
ro$ile! Market Positioning
• S&ybags / so$t luggage range, $or the business tra(eler!
•
6l$a / economy range, $or the $irst/time buyer or the u grader to the branded segment!
• -IP range /
riced t%ice as much as 6l$a, $or the
stereoty ical Indian luggage customer! • >dyssey / $or the e#clusi(e, li$estyle buyer! -IP Industry is 6sia@s largest luggage manu$acturers 8 %orld@s second largest luggage manu$acturer! It has some o$ the $inest brands 8 has been ran&ed second in the recent brand a%areness sur(ey! The gro%th rate and sales in each o$ these brands in 1222 indicate the s&e%ed gro%th to%ards the u
BA6
er end o$ the mar&et!
=ro%th Aate +*, 35 3 10 30
"ontribution to sales +*,
S&ybags 6l$a -IP range >dyssey
10 )0 35 15
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These all brands are $ound in the lo%er segment! It has manu$acturing $acilities in :asi&, :ag ur, ;algaon 8 Sinner! It ro oses to start manu$acturing units in Sri Dan&a 8 other S66A" countries! -IP manu$actures 210 models! The manu$acturing long/ term ob4ecti(e ca acity is 12000 units )000 dealer net%or& in lace! 8o g Term ,bjecti"es9 ? To achie(e 50* o$ the turn o(er $rom e# orts 8 become a ma4or layer in the International mar&et by the year 2005! ? To get a ma4or chun& o$ the unorganiEed sector through their roduct IC6:TA6@! %hort Term ,bjecti"es9 ? To ha(e a (olume 8 (alue gro%th o$ 15*! er day! -IP has a strong
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%egme tatio -IP is catering to income grou o$ 5000/10000 $or the standard 8 o ular segment an income grou Eones! roduct 8 their remium roduct is targeted to o$ 10000J! They are catering to all the $our
0istrib*tio
Net1or2 ro#imately
-IP has 21 branches 8 a strong dealer net%or& o$ a 5000! Car&et Distribution K in India Sales "hannel 6rmy canteens Duggage sho s Share +*, 30/)0* 00*
Car&et Distribution K Forld o(er Sales channel De artment Stores Duggage sho s "atalogue stores -ariety stores
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Share +*, )1 21 10 15 2 5
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Cail order >thers
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'ro)*ct 0iffere tiatio -IP has made a dent into the unorganiEed sector as the only branded roduct resent in the standard segment! ? 'remi*m %egme t 9; There is hardly any di$$erentiation in the Product is almost same as to the roduct o$$ered by -IP!
roduct o$ their com etitors
Samsonite in $eatures! The di$$erentiation is only in terms o$ rices +-IP is L 20* chea er than Samsonite!, ? 'op*lar %egme t9; It is the segment %here -IP ma&es money! This segment ro(ides a better margin! The luggage is o$ the $rameless ty e 8 the com any has a large mar&et share! The roduct is romoted as sturdy 8 enduring hard &noc&s o$ tra(el in India! ? %ta )ar) %egme t9; Product has the bare minimum $eatures 8 is di$$erentiated on lo% rices! Product is romoted as (alue $or money!
'ositio i g
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It
ositions itsel$ as an A-Z luggage company %ithout di$$usion o$
the mother brand! -!I!P! is loo&ing at ta ing the lucrati(e 3uro ean mar&et %here
eo le are buying more luggage
%trateg4 -IP has established itsel$ in the Indian mar&et using to introduce Mnon re(ersible multi sa$e loc&N, so$t gri together %ith brand building made -IP a mar&et leader! roduct handle,
inno(ations, stress on 9uality and brand building! -IP %as the $irst dual action loc& and central loc&ing system! These inno(ations
Then -IP $aced the into the
roblem $aced by most o$ the giants7 the share o$ the com any!
brand becoming generic to the category and local brands eating In 1227 came a $ormidable threat to -IP K Samsonite! Fith in short time Samsonite established its segment, it had no resence in the lu#ury segment o$ the mar&et! Fhile -IP %as (ery dominant in the mid/ resence in the lu#ury segment! Samsonite eriod o$ time! This osed a ma4or threat to -IP and garnered a mar&et share o$ about 35* in the luggage mar&et %ithin a short $orced -IP to seriously reconsider its mar&eting strategy! To counter the threat o$ Samsonite, -IP launched 3lanEa range o$ remium luggages! Samsonite mean%hile also %anted to enter the
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o ular segment +100/ 2000 range,! It launched the brand
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M6merican Tourister Mto enter this segment contem orary loo& and a %hich %as not
osing a ma4or threat
to the mar&et leader! Core o(er Samsonite had an international ealed to the ne% generation than -IP ercei(ed as a (ibrant brand!
In order to attract the ne% generation and create a ne% brand identity, -IP embar&ed on a rebranding e#ercise! The usual ads o$ -IP %as a a ealing to the middle class and $ocusing more on o%er$ul and emotion! The MGal Bhi, 6a4 BhiN ads %ere (ery
ealed to the middleclass! But since the consumers changed, in
order to succeed, the brand had to ha(e a contem orary loo&! The ne% strategy o$ -IP is $ocusing on ca turing or o%ning the conce t the ne% o$ MTra(elN! The logo %as changed to a more contem orary logo and the ads %ere changed to communicate ositioning! The agency thought o$ the most a ro riate moments o$ tra(el and decided that the Mtime o$ de arture Mare the most critical constituents o$ tra(el! The ads aimed to tie the brand to Tra(el! Thus originated the MBye/ Bye Mcam aign %ith a (ery youth$ul imagery that a attem ting to o%n ealed more the ne% generation y 4ourneyN thus o$ tra(eling! roducts! conce t tra(elers! The baseline %as changed to MBa the
The ne% cam aigns %ere su 'rance, to ca ture the
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orted by ne% ranges o$
The sub brands o$ -IP include Delsey +international brand $rom remium segment, 'ootloose7 the trendy
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bags $or the youth, Buddy7 school bags and 6l$a7 (alue $or money segment! -IP is a mar&et leader that is trying hard to retain its leadershi osition! It had $ailed to create barriers $or com etition by &ee ing many categories o en $or com etition to enter!
% also leather bag category is no% seeing lot o$ action %ith big layers li&e Bidesign ta&ing the lead! -IP does not ha(e a resence in this segment! But %ith its strong brand e9uity and ability to change %ith the consumer trends %ill hel -IP in its $uture battles!
A)"ertisi g %trateg4 Their ad(ertising strategy is to romote image o$ sturdiness,
(alue $or money 8 toughness! Plan to s end AS 20 cr! $or the same! Its rice ranges $rom AS 225 to As!1000! The com any has also been in $resh tal&s %ith 'rench com any Delsey, $or mar&eting the latterOs remium luggage range! 'rici g %trateg4 Car&et Segmentation Segme nt Price range +As, Premiu 1500J m Car&et share +*, 15
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Po ula r
700/ 1500
30 55 o$ the rung in India! It is remium segment, the
Standa 300/700 rd The
remium segment is at the to
$ollo%ed by the
o ular segment %hich is slightly larger than the
remium segment but smaller than the
latter segment is the largest and contributes to ma#imum sales in de(elo ing countries! In contrast, the standard segment in the de(elo ed countries is (ery small! Such constitution o$ the customer ro$ile is aiding the
unorganiEed sector in India %hich manu$actures lo% cost goods! The high 9uality manu$acturers are $inding it di$$icult to enetrate the mar&et due to high roduction costs! The target customers at the high end + remium segment, $orm 4ust 15* o$ the total customers %hile the lo% end standard segment constitutes 55*! The remium segment is controlled by the 6 ollo grou +.S,
com any, Samsonite +I,! The
o ular segment is dominated by
the domestic giant, -IP Industries! The standard segment, the largest segment, is ser(iced by -IP Industries and .ni(ersal! The unorganiEed iece! 6 art $rom com etition and undercutting by the unorganiEed sector, the moulded industry is $acing a tough $ight $rom the so$t luggage segment as %ell! This segment has caught customer
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layers
rice their
roducts at around As 300
er
[MARKETING MANAGEMENT] December 15, 2007
$ancy in the last $e% years! 3(en though the so$t luggage segment $orms 4ust 15/20* o$ the total industry! It is gro%ing at the rate o$ 25* %hich is much higher than the moulded luggage segment gro%th! The industry ma4ors di$$er in o inion on the gro%th rate o$ hard luggage or moulded luggage! -IP Industries o timistically uts the gro%th rate at 10* %hile the multinational Samsonite says the hard luggage mar&et has shrun& by )*! But, both the com anies are not ready to ignore the hard luggage mar&et $or so$t luggage! 6broad, most o$ the luggage manu$acturers are into both hard and so$t luggages! In India too, -IP and Samsonite manu$acture both so$t and hard luggage! .ni(ersally, the luggage business is seasonal in nature! In India, luggage sales de ends on t%o $actorsPtourism de(elo ment and on the marriage season! The marriage season e#tends $rom Carch K ;une and $rom >ctober K December! These months see good luggage sales! 6lso, the domestic tourists usually During this lan their yearly tri s during the holiday season bet%een 6 ril K ;une! eriod, there is $ierce com etition among the luggage manu$acturers to grab the mar&et share! Bo%e(er, socio/ olitical turmoil in the last $e% years has a$$ected the Indian tourism industry! Car&et sources say all such roblems ha(e retarded the cumulati(e annual gro%th rate o$ the moulded luggage industry to 5*! Bo%e(er the Gargil issue at Gashmir has %orsened the chances o$ re(i(al o$ the Indian tourism industry,
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thereby reducing the chances o$ im ro(ement in the gro%th rate o$ the luggage industry!
%5,T A al4sis !. %tre gths9; • -ery high brand a%areness +2nd in India,!
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• 52* mar&et share in organiEed sector +largest in 6sia,! • 11* through .ni(ersal luggage! • 'orm 31 years it has been in this mar&et! • It has 21 branches 8 a strong dealer net%or& o$ about 5000 outlets! • Do% ra% materials cost! • Aeal -alue $or money! • Coney o%er 8 aggressi(e management! • 6ll lants are IS> "erti$ied +go(ernment recogniEed A 8 D unit
in :asi&,! $. 5ea2 ess9; • Dess Aesearch 8 De(elo ment e# enditure! &. ,pport* ities9; • Sco e to increase e# orts! • 3conomy is re(i(ing! • .nta ed lo%er segment area!
#. Threats9; • Forsening situation in Gashmir $or tourism!
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• .norganiEed sectors are chea er by 25* due to less amount o$ e#cise duty! • 3#cess ca acity in the South 3ast 6sian countries! • The layers in the unorganiEed sector getting them organiEed
and coming out %ith branded roducts!
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6ompetitio
from %amso ite ? the F orga iGe) %ector
The Indian moulded luggage industry at the unorganiEed sector is ha(ing an u
resent 4uncture is
%itnessing a bitter battle among the com etitors! Bo%e(er, the er hand grabbing a larger o%er and an arentage, share %hene(er the mar&et gro%s! -IP has money money o%er and A 8 D su
aggressi(e management! Samsonite has a reliable on lo% cost
ort! The unorganiEed sector relies
roducts $or their good sales! The su$$erers are those o%er %hich does not allo% them to s end on
lac&ing in money
ad(ertisements and A 8 D! In the long run, com anies %ith sound A 8 D are e# ected to sustain com etition! Fhile -IP s ends 2/3* o$ its turno(er on A 8 D, com etitor Samsonite does not s end anything in India! The arent com any s ends 2* o$ its turno(er in A8 D! This %ill hel Samsonite introduce ne% roducts eriodically! In $act, Samsonite ro oses to reduce its rice range $rom the resent As!1500/1700 range to the As!1000 J category! >n the other hand, -IP lans to introduce roducts both in the remium and lo%er end segments! But both the com anies are &ee ing their cards close to their chest! The $ight is e# ected to become $iercer %hen the %orld number $our Delsey +o$ 'rance, also ma&es an a earance in India! Internationally, the com anies are trying to enter $ast gro%ing areas because o$ (ery lo% gro%th in the de(elo ed mar&ets! Ta&e
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[MARKETING MANAGEMENT] December 15, 2007
the case o$ Samsonite International! It has %itnessed a gro%th rate less than 0!0* during 1221! "ertainly, the international ma4ors cannot ignore the Indian mar&et! In the Budget @22 ho%e(er, the $inance minister has allocated As!1!33 billion $or tourism de(elo ment as against last year@s $igure o$ As!1!12 billion! This e#cess allocation is sure to bene$it the tourism industry in turn bene$iting the tourism de endent industries +moulded luggage and hos itality industries,! 6nother ma4or area can be loo&ed into by the luggage
manu$acturers is ma&ing India a manu$acturing base in the %ay Samsonite has cashed on the chea and s&illed man o%er oor roduct 9uality, a(ailable in India! 6s stated earlier, due to in a osition in e# ort! >n the $li
e#ce t $or -IP and Samsonite none o$ the local manu$acturers are side there is e#cess so$t luggage ca acity in countries li&e "hina and Tai%an! Car&et sources say that these countries ha(e 50* e#cess ca acity %hich %ill $ind their %ay in the international mar&et! Bence the local com anies may ha(e to encounter tough com etition! 6s such any rise in domestic sales and e# ort sales %ill de$initely bene$it the domestic industry! Thus, the resent status o$ the industry is highly com etiti(e and roducts to choose $rom! The
the $inal consumer %ill be bene$iting! Today, he has more o tions, more designs, and better 9uality consumer is the &ing!
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The Mo"es9 Samsonite %as considering launching >yster +its highest (olumes earner %orld%ide, in the range o$ As!2000, so that it %ould be riced abo(e -IP, and its brand image %ould be strengthened! But, early this year, -IP Industries launched 3lanEa, a slic& brand o$ remium moulded luggage targeted at the to end o$ the remium mar&et! 3lanEa boasts o$ t%o and $abric lining! The 72/cm 3lanEa %as atents, $or its bum er riced at As! 3750, %hile
the 02/cm one sells $or As! 3250 in India! Coreo(er, 3lanEa has been made a(ailable through select dealers only, in order to maintain its remium image! 6t resent, -IP lans to e# ort 20* o$ its roduction o$ 3lanEas! This caught Samsonite totally una%ares! The branded luggage scores on ercei(ed (alue ricing, and so at the moment Samsonite is &eenly trac&ing 3lanEa@s er$ormance in the mar&et! -IP set the rice so high to reem t Samsonite@s entry in the
su er/ remium segment o$ the mar&et! -IP lans to ma&e this rice ermanent, sub4ect to the success$ul
sales o$ 3lanEa! This means that Samsonite %ould go ahead and launch >yster at As! 2000! The mar&et research study clearly indicates that Samsonite %ould lose hea(ily on its brand e9uity i$ its roduct is chea er than the e#isting ones in the mar&et!
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The o tions a(ailable to Samsonite are
?
Aeduce not
rice and target lo%er segments / This again is The high brand image o$ Samsonite rice! It is only the
ossible!
demands a corres ondingly high un&no%n in the other segments!
?
remium segment that Samsonite can target, as it is
Increase rice and raise ercei(ed 9uality / I$ Samsonite is $orced to enter at a higher rice, it might ta&e greater amount o$ time to gain a $ooting in the Indian mar&et! This might gi(e -IP Industries 4ust enough time to strengthen itsel$! But this o tion %ould ensure that Samsonite retains its ma4or strength / its brand e9uity!
-IP Industries is no% concentrating on e# anding its ort$olio to
roduct
lug in any e#isting holes! It has launched si# ne% lanning to launch more roducts in the
roducts in 1225 in the higher end o$ the mar&et +one o$ them %as 3lanEa,! 6lso, -IP is rice oints! su er/ remium category in order to counter Samsonite at all
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The
Critical Aspects
• 3lanEa
to the s*ccess of the strateg4
a)opte) b4 VI' I )*stries are9 must be mar&eted success$ully so as to remium
establish itsel$ in the mar&et! The earlier
roduct o$ -IP Industries, 6madeus, $ailed to ta&e o$$ in 3uro ean mar&et channels li&e Italy! But -IP o$$icials state that 3lanEa, %hich is considered to be the most so histicated and e#tensi(ely de(elo ed roduct o$ -IP e(er by insiders, is ro(ing to be a success!
•
-IP must introduce more
roducts in the su er/ rice
remium category and gain a $oothold at all the Samsonite@s roduct range too $ormidable totac&le!
oints! .nless this is accom lished soon, -IP %ill $ind
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Through its rice
remium
ricing o$ 3lanEa, Blo% Plast has $orced its entry rice! By coming in at a higher ricing, Blo% Plast is
Samsonite to hi&e u
oint, >yster %ould $ind it di$$icult to garner desired lug e(ery hole in the mar&et, be$ore
(olumes! By using such a com etiti(e ho ing to gain time to Samsonite starts breathing do%n its nec&!
Fith Samsonite ha(ing in(ested hea(ily in the lant at :asi& +it is the third largest manu$acturing lant o$ Samsonite,, it %ould not gi(e in a hurry! Fhether -IP %ould be able to %ard o$$ Samsonite@s challenge %ill not be clear $or a cou le o$ years!
%AM%,NITE
The %orldOs Q1 luggage ma&er, Samsonite o$$ers a broad range o$ luggage and luggage/related roducts, including suitcases, garment bags, casual bags, business cases and other tra(el bags! Samsonite also license their trademar&s $or use on roducts such as tra(el accessories, ersonal leather goods, handbags and $urniture ! Samonsite also ma&es tra(el gear $or Timberland! Samsonite is the %orld leader in the luggage mar&et, %ith an emerging resence in 6sia! It has set u a manu$acturing lant in :asi&, %hich has started o erating! Samsonite roducts are roduced around the %orld at 1) Samsonite/o erated manu$acturing $acilities or by third/ arty su
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liers! Samsonite bene$it $rom their large siEe through
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[MARKETING MANAGEMENT] December 15, 2007
(olume/dri(en urchasing and manu$acturing economies! It sell their roducts in more than 100 countries at a ro#imately 27,000 retail locations, including de artment stores, s ecialty stores, catalog sho%rooms, mass merchants and %arehouse clubs! In the .nited States, they sell their roducts through 125 Samsonite/o erated stores! Samsonite is the to seller o$ luggage in the .nited States, 3uro e, and ;a an! In addition to its %orld/reno%ned Samsonite label, the com any also mar&ets the o ular 6merican Tourister and Dar& brands! .nder those names, Samsonite o$$ers a $ull line o$ luggage, including so$tside and hardside suitcases, garment bags, casual bags, business cases, and other tra(el bags and accessories! Samsonite started its o eration in Den(er, "olorado, .S6 in 1210! It entered the Indian moulded luggage mar&et only to%ards late 1220 %ith lant in :ashi& in collaboration %ith the Tain%alas! Samsonite It has selected Den(er, Belgium $or manu$acturing hard luggage 8 Bungary, the Slo(a& Ae ublic $or the manu$acture o$ so$t luggage!In :asi&, India both the hard and so$t luggage is manu$actured! 7RAN0 ',RT=,8I, The brands o$ Samsonite collecti(ely,ser(e e(ery segment o$ the mar&et, reaching customers in all %al&s o$ li$e, all o(er the %orld! It meets the discerning needs o$ the lu#ury mar&et through their Dambertson True# and Samsonite Blac& Dabel brands, %hile the inno(ati(e, high/9uality o$$ering %ithin our time/honored
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Samsonite brand ser(es both middle/ and u
er/mar&et customer
segments! Its 6merican Tourister brand ro(ides a$$ordable, 9uality roducts to (alue/conscious consumers! 3ach o$ our Samsonites brands has been care$ully de(elo ed to meet the recise 9uality, (alue and ricing needs o$ the consumers %ithin its mar&et! Des ite their di(ersity, all o$ the brands share a common hiloso hy7 to deli(er durable, high/9uality roducts that re$lect Samsonite@s commitment to e#cellent cra$tsmanshi , inno(ati(e design and e#ce tional $unctionality! The brands o$ Samsonite are7 • S6CS>:IT3 • S6CS>:IT3 BD6"G D6B3D • 6C3AI"6: T>.AIST3A • D6CB3ATS>: TA.3R • D6AG Samsonite com lement their o%ned brands through their global licensing rogram, through %hich they le(erage Samsonite@s luggage e# ertise to artner %ith mar&et/leading li$estyle brands, such as 8acoste, %ith %hom they de(elo handbags and casual bags, and Timberla ), %ith %hom they o$$er tra(el gear, accessories, bac& ac&s and outdoor items! 'R,0F6T% 8INE% AN0 5I0TB The roducts lines o$ Samsonite Includes7
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• Suitcases • "arry/ons • =arment bags • Bac& ac&sSDu$$els • Gids Duggage • BusinessS"om uter Bags B6S3D >: SC6DD C3DI.C SIT3 +T>T6D 0 +T>T6D 20 PA>D."TS, PA>D."TS, SamsoniteV 3le(ation 21W . right SamsoniteV 3le(ation 25W . right
D6A=3 +T>T6D 21 PA>D."TS, SamsoniteV 6scella 22W 3# andable . right
+SB>F: 6SID3 IS TB3 C>D3D :>! >' TF> PA>D."TS FBI"B B6-3 TB3 D>F3ST 6 TB3 BI=B3ST PAI"3 A3SP3"TI-3 DU I: 36"B "6T3=>AU!,
700 Series SamsoniteV >utlineV 1 22W S inner
SamsoniteV Pro/DDR 21W . right %amsoniteV Pro/ DDR 2)W . right
• =ol$ Tra(el Bags
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• 6ccessories
%FIT6A%E%
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B6S3D >: S>'TSID3 3RT3AI>AS +T>T6D 25
PA>D."TS, +SB>F: 6SID3 IS TB3 C>D3D :>! >' TF> PA>D."TS FBI"B B6-3 TB3 D>F3ST 6 TB3 BI=B3ST PAI"3 A3SP3"TI-3 DU I: 36"B "6T3=>AU!, 6merican TouristerV DODite 25W 3# . right
B6ADSID3 +T>T6D 13
PA>D."TS, 325 Series Samsonite V 'ODite 21W . right
B6AD 6 S>'T +T>T6D 1
PA>D."TS, )50 Series Samsonite® Sahora Spinners Hybri !"# Upri$ht
SamsoniteV Pro/DDR 22W S inner . right
700 Series Samsonite V >utlineV 1 22W S inner
000 Series SamsoniteV "arbon 3RPX 22W Bybrid . right Suiter
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0I%TRI7FTI,N NET5,RK Samsonite is resent in 150 items %ith )50 outlets! They are not interested in mass a eal 8 %ould li&e to concentrate on the to 23 cities! Samsonite is distributed rimarily through7 • Samsonite >utlet Stores • Samsonite Blac& Dabel Stores +Boston, :e% Uor&, Short Bills, San 'rancisco, "hicago, Dallas, • Samsonite "lassic Stores +Ging o$ Prussia,P6 H Detroit,CI H 6rlington,TR H Tam a,'D H "oncord,"6 H :ashua,:B • De artment Stores li&e Cacys in the .S6 and ;ohn De%is Partnershi in the .G • >nline retailers li&e 3bags!com and G; Bec&ett • Farehouse "lubs li&e "ostco • Cilitary Stores li&e 66'3S
'R,0F6T 6ATEG,RA Duggage
'RIN6I'A8 'R,0F6T% Bardside and so$tside luggage, garment bags, carry on bags
MAIN 0I%TRI7FTI,N 6BANNE8% Direct retail stores, s ecialty stores and highKend de artment stores CidKle(el de artment stores, s ecialty stores, national chains, %arehouse clubs, direct retail stores :ational chains, mass merchants, s ecialty stores,
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[MARKETING MANAGEMENT] December 15, 2007
direct retail stores "asual and >utdoor Bags Du$$el bags, tote bags, bac& ac&s, shoulder and hi bags,school bags, handbags S ecialty stores, de artment stores, national chains,%arehouse clubs, s ort and outdoor retailers :ational chains, mass merchants, s ecialty stores Business and "om uter "ases Brie$cases, business cases, com uter cases Direct retail stores, s ecialty stores and highKend de artment stores De artment and s ecialty stores, o$$ice su erstores, >3Cs, %arehouse clubs Cass merchants 'ositio i g9 Bigh Yuality S Bigh Price Samsonite ositioned itsel$ as Internationally acclaimed 9uality roduct %ith (isible bene$its! %egme tatio 9 The to remium segment i!e! As! 1500/7500 is the main area o$ attention o$ Samsonite %here it already has 00* o$ the mar&et share!
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'ro)*ct 0iffere tiatio 9 The main di$$erentiation $actors based on the target consumer that %ish to cherish e#clusi(ity are7 • Aeliability • Percei(ed -alue o$ the Product • International Yuality
7*si ess %trateg4 ,f %amso ite9 • 3# and "hannels o$ Distribution and Product >$$ering • Strengthen Car&eting and Product Inno(ation! • • "ontinue Forld%ide 3# ansion! Im ro(e Distribution Systems in the .!S!
%5,T ANA8A%I% ,= %AM%,NITE9
%tre gths9; • Aeliable arentage 8 money o%er! • Aesearch %orld%ide,! • Bigh Yuality! • 25* mar&et shares in %orld +50* in the organiEed sector,!
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8
De(elo ment
su
ort
+2*
[MARKETING MANAGEMENT] December 15, 2007
5ea2 ess9; • 10* o$ ra% materials im orted • Do% brand a%areness ,pport* it49; • Increase o ortunity! distribution net%or&
• .se it as a base $or e# orts! • 3conomy is re(i(ing
Threats9; • Forsening situation in Gashmir • >ther C:"@s entering in the mar&et! • )* decline in the mar&et in 1227/21!
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%A=ARI
'ro)*cts ? 'rici g
'ac2s9; 1! >riginal Pac&s
•
Delu#e7 Fe too& our traditional Pac& and added so$t added leather shoulder stra s and a %aist belt $or com$ort on those long ortages Prices7 As!1250/3150
•
.tility7 These less e# ensi(e ac&s allo% occasional cam ers to ha(e their o%n rugged gear Prices7 As! 1350/2150
• Bea(y Duty7 6 hea(y duty durable (ersion Prices7 As! 1100/1200
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•
Aambler7 6 (ersatile gear hauling ac& %ith three outside oc&ets Prices7 As! 220/1750
2! Bea(y Pac&s • Bea(y Duty7 6 hea(y duty durable (ersion Prices7 As! 1)50/2100 • Conarch7 Cade o$ more $unctionality $eatures and %ith %aist belt and sternum stra Prices7 As! 1)50/2150 3! "hild ac&s • 6 miniature Pac& that ma&es a great &ids ac&! Dots o$ bright colors Prices7 As! 220 on%ards 8*ggage 1! .tility Duggage Bags • Premium Bags Prices7 As! 1000 on%ards • Standard bags Prices7 As! 000 on%ards • Trolley Bags Prices7 As!1300 2! S ortsman Duggage
•
S ortsman garment bags 7 Bang your suits or s&irts in this classy garment bag!
Page 5)
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[MARKETING MANAGEMENT] December 15, 2007
As! 2000/3500 • S ortman Du$$el7 Ceticulously cra$ted and thought$ully designed, %e &no% youOll lo(e this du$$elZ Prices7 As! 1200 on%ards • 3#tended S ortsman Du$$el7 Ti ered end oc&ets ma&e it sim le to $ind those $re9uently retrie(ed items Prices7 As! 2000 on%ards
•
Boot Du$$el7 The large to com artment is sealed %ith a $ull length Ei er, and hidden beneath it is a lined com artment! As! 2100 on%ards
3! Deather Duggage
•
Deather Du$$el7 6 real (alue, our leather du$$el is an honest in(estment in your ersonal tra(el com$ort and security As! 3000 on%ards
• Pebbled Deather Du$$el7 >ur Deather Du$$el a(ailable $or a limited time in a so$t ebbled leather Prices7 As! 3000 on%ards
•
Deather Boo&bag7 6 stylish messenger bag style bag that %ill last $or generations! As! 1500 on%ards
7*si ess Gear 1! Brie$cases
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• 3#ecuti(e Brie$cases7 These bags are made out o$ our ne% (el(ety so$t, $ull/grain, %ater roo$ed leather! As! 3500 on%ards • Deather Brie$case7 6n elegant leather brie$case Prices7 As! 2300 on%ards • Pebbled Deather Bags7 >ur Deather bags a(ailable $or a limited time in a so$t ebbled leather! Prices7 As! 2750 on%ards 2! Da to "ases
•
Da to Bac& ac&7 6 (ery o ular Darge Standard Day ac&, and added a added rotecti(e slee(e $or your la to Prices7 As!1)00 on%ards
• "an(as Deather Da to Pouch7 6 non/bul&y added ouch $or your la to Prices7 As! 1200 on%ards • Deather Da to Pouch7 6 non/bul&y added ouch $or your la to Prices7 As! 200/2000
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%ho*l)er 7ags
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[MARKETING MANAGEMENT] December 15, 2007
1! Deather Bags
•
Serengeti Boo& Bag7 These boo& bags are made out o$ our ne% (el(ety so$t, $ull/grain, %ater roo$ed leather As! 1500 on%ards
• Pebbled Deather Cini/Ba(ersac&7 >ur Deather Cini/ Ba(ersac& a(ailable $or a limited time in a so$t ebbled leather As! 1)50 on%ards • Dady Sli er Bag7 6 handcra$ted all leather bac& ac& handbag As! 200 on%ards 2! Shell Bags • Delu#e Bags • Standard Bags • "lassic Bags Tote 7ags 1! S ortsman Tote Bags 2! Ti To Tote Bags 3! Cini Tote Bags ,ther 'ro)*cts i cl*)e • Gey 'ob • Deather Document Brie$ • Deather 'old u Bat
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• Fallet/ Tri$old %allet •te ad holder • PD6 case
'laces a ) 'romotio s
The com any should ado t t%o strategies $or allocating its roducts! 'F%B %trateg49 Ma *fact*rers 6*stomers 5holesalers Retailers
'*sh strateg4 under %hich the roducts can be sold at di$$erent %holesalers, retailers, $ranchisee sho s, etc '*ll %trateg4 under %hich manu$acturers romote their roducts using ad(ertising and romotions! In this strategy the consumers are ersuaded to buy the roducts directly through the intermediaries! The consumers may also buy their roducts online! They should ha(e their %holesaler at a articular lace and the retailers or $ranchisee sho s should be located at ublic laces, malls, etc! 6lso, retail sho should be near air orts, rail%ay/ stations, bus stations, ublic laces, etc! This %ould contribute in im ulse buying too! The romotional acti(ities may include electronic hoardings in air orts, rail%ay stations, etc! "on(entional methods o$ ad(ertising can also be used such as rint media, tele(ision, etc!
Refere ces
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[MARKETING MANAGEMENT] December 15, 2007
•
http9DD111.la#!!.comDcompa 4;V.I.'.H$3Tra"el H$3Val*es?li);&+33(!..htm
• • • • • • •
111."ipbags.com 111."ipmo)er a.com 111.bags;l*ggage.com 111.google.co.i 111.4ahoosearch.com 111.1i2ipe)ia.com 111.tra"ele
PROJECT ON INDIAN LUGGAGE INDUSTRY
[MARKETING MANAGEMENT] December 15, 2007
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Travel Equipment Market
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Acknowledgement Executive Summary Indian Luggage Market ritical !iew o" t#e Luggage Indu$try &er %997 &o$t %997 Environmental Scanning
!.! Tech ological E "iro me t !# !.$ %ocial E "iro me t !# !.& Eco omic E "iro me t !# !.# 'olitical E "iro me t !(
07 09 %% %' %( %)
&orter$ Model Ma+or &layer$ in t#e ,rgani-ed Sector !.I.&
!.( 'ro)*ct 'ortfolio !.+ ,bjecti"es $!.. %egme tatio $/ !.- 0istrib*tio $/ Net1or2
%* '' '(
$#
!./ 'ro)*ct 0iffere tiatio !.!3 !.!! !.!$
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&3
'ositio i g &3 %trateg4 &! %5,T A al4sis &+
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[MARKETING MANAGEMENT] December 15, 2007
ompetition "rom Sam$onite / t#e 0norgani-ed Sector
!.!& 6ritical Aspects #$
(1
Sam$onite
!.!# !.!( !.!+ !.!. !.!!.!/ !.$3 !.$! 7ra ) 'ortfolio ## 'ro)*cts 8i es a ) 5i)th #( 0istrib*tio #'ositio i g #/ %egme tatio #/ 'ro)*ct 0iffere tiatio #/ 7*si ess %trateg4 of %amso ite (3 %1ot A al4sis of %amso ite (3 Net1or2
)(
SA2A3I &roduct$ / &ricing
!.$$ !.$& !.$# !.$(
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4' 4'
'ac2s ($ 8*ggage ($ 7*si ess Gear (& %ho*l)er 7ags (#
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[MARKETING MANAGEMENT] December 15, 2007
!.$+ !.$. !.$!.$/
Tote 7ags (# 'laces a ) 'romotio s (( '*sh strateg4 (( '*ll %trateg4 ((
3e"erence$
4*
Executive Summary
B
rief Insight into Indian Luggage Industry
The luggage industry in India is currently undergoing a consolidation hase! "om etition in the sector is e# ected to intensi$y %ith the entry o$ $oreign layers li&e Delsey o$ 'rance! "om anies %ith good research and de(elo ment $acilities are
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[MARKETING MANAGEMENT] December 15, 2007
e# ected to sur(i(e %hile others may end u as contract manu$acturers $or the bigger layers! The luggage mar&et com rises o$ three segments namely the premium segment %ith 15* o$ total mar&et share, the popular segment and the standard segment! Samsonite +International, and -IP are the dominant layers in the remium segment %ith a mar&et share o$ 52* in the o ular segment! -!I!P! industries and .ni(ersal dominate the lo%/end standard segment! The luggage market is dominated by the unorganized sector with 50% market share. Northern and western India are the biggest markets in the country. V.I. . and !amsonite are focusing on de"elo#ing their distribution networks. $oth #layers are also into e%#orts. V.I. .&s e%#ort touched 's.()* million in (++,-+. and is mainly targeted at /ulf and 0est 1uro#ean 2arkets. !amsonite #osted an e%#ort turno"er of 's.(50 million for the year ended 3ecember &+.. Luggage manufacturers4 #articularly V.I. . ha"e slashed #rices following decline in #rices of raw materials. The organized sector 5.%6 is growing at a lesser #ace when com#ared to the unorganized sector 575%6. The organized sector will ha"e to face the reality that #layers in this sector may become organized and come out with branded #roducts emerging as com#etitors to the e%isting #layers in the organized sector. The organized sector has to be cautious of the de"elo#ing grey market.
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[MARKETING MANAGEMENT] December 15, 2007
Indian Luggage Market The Indian luggage market is worth nearly one thousand crores. 8 considerable #ortion of the market is unorganized. The table below gi"es the distribution of the market between the branded sector and the unbranded sector. Market Si-e9 's. +00 crores
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:rganized !ector uncture4 the aggressi"e iramal grou# took o"er pecte) Retaliatio 9; ? 3# anding o$ the distribution net%or& by the e#isting layer! ? 6ccessibility o$ roduct! ? Price cuts 8 discount!
3,
E tr4 )etermi i g price 9; =i(en the strong brand 8 mar&et resence o$ the e#isting layers 8 their %ell established distribution net%or& the ne% entrant %ill ha(e to lan $or hea(y initial in(estment in order to ma&e his re(ailing resence $elt! This %ill ha(e to be done under the rice structure ta&ing into account retaliation $rom
the e#isting layers
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[MARKETING MANAGEMENT] December 15, 2007
Thus the returns may not be as soon as e# ected %hich itsel$ may $orm a barrier to enter into the industry!
),
7argai i g 'o1er ,f %*ppliers9; liers 8 lac& o$ substitute roducts!
? Dominance o$ $e% su
? 6lthough there is an additional ca acity o$ the ra% materials re9uired $or the moulded luggage, there is limited to the 9uality o$ the a(ailable material! There is no substitute ra% material to the material used at 6BS! This shi$ts the bargaining 6lthough Aeliance has the their roduction 8 su ly! resent i!e! Poly ro ylene 8 liers o$ o%er to%ards the su rocess to su
the ra% materials! Aa% materials ma&e u $or 50* o$ the cost! ly 9uality ra% material the (olumes o$ the luggage industry do not 4usti$y
5,
%*ppliers9; Aa% materials used $or moulded luggage are mainly Poly ro ylene 8 BDP3 6crylonitrile Butadine Styrene +6BS,! These are by roducts o$ etroleum! There are lenty o$ su liers! Coreo(er the materials can be
im orted as PP is under the >=D because o$ %hich com anies li&e Samsonite 8 -IP im orts their ra% material! There has been no shortage in the su ly o$ the material! Due
to the e#cessi(e ca acity 8 the South 3ast 6sian "risis the
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[MARKETING MANAGEMENT] December 15, 2007
rices o$ the ra% material ha(e dro last t%o years!
ed by about )0* in the
Thus in the scenario o$ enhanced com etition in the moulded luggage industry the di(ersity o$ su bargaining o%er o$ the su local sellers! liers 8 o(er ca acity %ithout the sco e o$ $or%ard integration has limited the liers! The unorganiEed sector sources its ra% materials +recycled lastic, $rom a number o$
0,
7argai i g 'o1er ,f 7*4ers9; The organiEed sector has $e% buyers com ared to the su o$ ra% material, %hich is a(ailable in lenty! The ra% material $orms 50* o$ the total cost o$ the roduct! There is no restricti(e sale olicy by the go(ernment as regards to the ra% materials! Bence buyers can ha(e resource to the international mar&et! The ra% materials are under the o en general license %hich can im ort $reely! In the unorganiEed sector the su to the buyers! There is no sco e o$ bac&%ard integration by the buyer because o$ the number o$ su liers 8 the $ree im ort olicy! There is no roduct di$$erentiation o$ the ra% materials! liers o$ the ra% material liers
+recycled lastic, are many 8 this shi$ts the bargaining o%er
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7,
I te sit4 of ri"alr4 amo g e>isti g competitors 9; The moulded luggage industry can be di(ided into 3 segments7/
? Standard ? Po ular ? Premium In each segment there are 2/3 com etitors! -IP is the leader o(erall but in each segment there is intense com etition as each com any tries to ma#imiEe its mar&et share!
1,
%lo1 I )*str4 Gro1th9; The gro%th in the moulded luggage industry has been sluggish 8 the com etition is getting intense! "om ared to the gro%th rate o$ so$t luggage mar&et or 25* the gro%th rate o$ moulded luggage is about 1/10*, %hich is relati(ely slo%!
2,
0iffere tiatio intense
? %1itchi g 6ost9; le(els! Product di$$erentiation e#ists
There is a lac& o$ s%itching costs in this industry leading to com etition amongst the layers in the standard and o ular segments!
10,
0i"erse 6ompetitors9;
Di(ersity in terms o$ strategy origins triggers o$$ intense ri(alry! In this industry the com etitors are into the mar&et %ith di$$erent means o$ ca turing the mar&et! This leads to intense
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[MARKETING MANAGEMENT] December 15, 2007
com etition es ecially during the season o$ marriage 8 tra(elling %hich are considered eriods o$ ea& sales!
11,
E>it 7arriers9;
3#it barriers may be economic strategic or emotional in nature! The s ecialiEed machinery used in the manu$acture o$ luggage the in(estment com anies ma&e in terms o$ roduction human resource, building u distribution net%or& are enormous 8 layer trying to ma&es it di$$icult $or the com any to e#it! This then intensi$ies the ri(alry among com etitors %ith each o timiEe utiliEation o$ assets!
12,
%*bstit*te 'ro)*cts9; rice ad(antages ut a
The resence o$ substitutes %hich er$orm $unctions essentially similar to the e#isting one 8 o$$ering ca acity on the ro$its o$ the industry! The luggage industry can be di(ided into the hard moulded luggage 8 the so$t luggage! The so$t luggage is a er$ect substitute $or the moulded luggage! Fith a gro%th rate higher than the moulded luggage there is a ca acity to the e#tent the hard luggage mar&et gro%th! 6lso the $le#ibility o$ the so$t luggage in terms o$ siEe design rice etc! ma&es it a otential threat to the hard moulded luggage mar&et!
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[MARKETING MANAGEMENT] December 15, 2007
MA@,R '8AAER% IN TBE ,RGANICE0 %E6T,R • -!I!P! • Samsonite • 6ristocrat • Sa$ari • =iordano • Delsey • 6merican Tourister • Aimo%a • Gi ling • ;ans ort • Blue 8 Blues • ;ang • 'iorelli • >thers
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V.I.'.
-IP Industries Dtd! is the $lagshi com any o$ the D= Piramal =rou ! 3stablished in 1271, it is a leading luggage manu$acturing com any, %hich manu$actures strollys, suitcases, e#ecuti(e cases, bac& ac&s and other hard and so$t/sided luggage! It o%ns re uted brands such as -IP, 6l$a, 'ootloose and Buddy! It has t%o manu$acturing units in India and (arious subcontract o erations in "hina and Indonesia! "urrently, it has a %or&$orce o$ nearly 2000 eo le! -IP is a %ell/&no%n and re uted brand name in India!-IP has been increasing its resence in %orld mar&ets in the luggage industry! The com any has o erations across the globe in $i(e continents! It has o$$ices in the .S6, South 6sia, Ciddle 3ast, 6$rica and 3uro e, Forld%ide,
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-IP
roducts are sold across 1300 retail
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[MARKETING MANAGEMENT] December 15, 2007
outlets in 27 countries! "urrently, it e# orts its countries!
roduct to Fest
6sia, 3uro e, the .S6, and select 6$rican and South 3ast 6sian
'ro)*ct 'ortfolio The roduct ort$olio o$ -IP Industries Dtd! today includes a
di(erse range o$ hard/sided and so$t/sided luggage! The range includes strollys, suitcases, du$$les and o(ernight tra(el solutions, e#ecuti(e cases, bac& ac&s, and e(en school bags! -IP Industries
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Dtd! has reno%ned brands li&e -IP, 6l$a, 'ootloose, and Buddy co(ering the entire s ectrum o$ tra(el Dtd! has a license and mar&ets Delsey S66A" These roducts! -IP Industries roducts in India and countries! roducts reach o(er 1000 retail outlets across the country!
>utside India, %e ha(e a net%or& o$ o(er 1300 retailers across 27 countries! >ur range includes in4ection moulded PP casesH (acuum $ormed 6BS cases as %ell as so$t/side luggage in nylon, olyester and 3-6 material! 8*ggage Bar) s*itcase, soft s*itcase, har) *pright, soft *pright, cabi Tra"el 7ags 7ac2pac 2s E>ec*ti" e bag D l*ggage. Totes, tra"el bag, tre22i g bag, trolle4 tote. %chool bag, tre22i g bag, laptop bac2pac2. 7riefcase, soft e>ec*ti"e bag, trolle4, messe ger bag N4lo , s4 thetic Efoam:, pol4*retha e, leather. 'ol4prop4le e, pol4carbo ate, A7% 4lo . N4lo , leather N4lo
'ortfolio laptop bag, 8aptop
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7elts
'*re 8eather Re"ersal belt 1ith re"ersible b*c2le ? reg*lar b*c2le Reg*lar belt 1ith fa c4 b*c2le ? reg*lar b*c2le 6as*al belts '*re 8eather & to !3 cre)it car) hol)er 1ith poc2ets for coi s a ) i)e tit4 car) 6ar) hol)er 1ith poc2ets for coi s Cip poc2ets, $ fol) 1allet 1ith poc2ets for coi s a ) car)s & fol) 1allets 1ith poc2ets for coi s a ) car)s 6re)it car) hol)er 1ith !3 to $3 poc2ets %ec*rit4 leg 1allet, ec2 safe po*ch,
8eather
5allets
8eather
Tra"el ies
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Accessor hip mo e4 belt,
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[MARKETING MANAGEMENT] December 15, 2007
secret 1allet, shoe bags, passport co trol 1ith . compartme ts, ha )s free 60 case, M'& pla4er case, i'o) case, e4e glass hol)er, cell po*ch, fol)able bag, 2e4 loc2, *mber loc2, l*ggage tag, tra"el pillo1, toilet 2it, l*ggage strap, 2e4 po*ch, tra"el sec*rit4 1ith Ba )ba gs *mber loc2 etc ,ffice D E"er4)a4 bag, mess bag, shoppi g bag, leather bag, leather p*rses, leather 1allets, je1el bag, fa c4, "a it4 har), "a it4 soft 8eather, N4lo
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The
com any 7
entered
the
nineties
%ith
$our
sub/brands,
segmented on $orm and customer
ro$ile! Market Positioning
• S&ybags / so$t luggage range, $or the business tra(eler!
•
6l$a / economy range, $or the $irst/time buyer or the u grader to the branded segment!
• -IP range /
riced t%ice as much as 6l$a, $or the
stereoty ical Indian luggage customer! • >dyssey / $or the e#clusi(e, li$estyle buyer! -IP Industry is 6sia@s largest luggage manu$acturers 8 %orld@s second largest luggage manu$acturer! It has some o$ the $inest brands 8 has been ran&ed second in the recent brand a%areness sur(ey! The gro%th rate and sales in each o$ these brands in 1222 indicate the s&e%ed gro%th to%ards the u
BA6
er end o$ the mar&et!
=ro%th Aate +*, 35 3 10 30
"ontribution to sales +*,
S&ybags 6l$a -IP range >dyssey
10 )0 35 15
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[MARKETING MANAGEMENT] December 15, 2007
These all brands are $ound in the lo%er segment! It has manu$acturing $acilities in :asi&, :ag ur, ;algaon 8 Sinner! It ro oses to start manu$acturing units in Sri Dan&a 8 other S66A" countries! -IP manu$actures 210 models! The manu$acturing long/ term ob4ecti(e ca acity is 12000 units )000 dealer net%or& in lace! 8o g Term ,bjecti"es9 ? To achie(e 50* o$ the turn o(er $rom e# orts 8 become a ma4or layer in the International mar&et by the year 2005! ? To get a ma4or chun& o$ the unorganiEed sector through their roduct IC6:TA6@! %hort Term ,bjecti"es9 ? To ha(e a (olume 8 (alue gro%th o$ 15*! er day! -IP has a strong
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[MARKETING MANAGEMENT] December 15, 2007
%egme tatio -IP is catering to income grou o$ 5000/10000 $or the standard 8 o ular segment an income grou Eones! roduct 8 their remium roduct is targeted to o$ 10000J! They are catering to all the $our
0istrib*tio
Net1or2 ro#imately
-IP has 21 branches 8 a strong dealer net%or& o$ a 5000! Car&et Distribution K in India Sales "hannel 6rmy canteens Duggage sho s Share +*, 30/)0* 00*
Car&et Distribution K Forld o(er Sales channel De artment Stores Duggage sho s "atalogue stores -ariety stores
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Share +*, )1 21 10 15 2 5
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Cail order >thers
[MARKETING MANAGEMENT] December 15, 2007
'ro)*ct 0iffere tiatio -IP has made a dent into the unorganiEed sector as the only branded roduct resent in the standard segment! ? 'remi*m %egme t 9; There is hardly any di$$erentiation in the Product is almost same as to the roduct o$$ered by -IP!
roduct o$ their com etitors
Samsonite in $eatures! The di$$erentiation is only in terms o$ rices +-IP is L 20* chea er than Samsonite!, ? 'op*lar %egme t9; It is the segment %here -IP ma&es money! This segment ro(ides a better margin! The luggage is o$ the $rameless ty e 8 the com any has a large mar&et share! The roduct is romoted as sturdy 8 enduring hard &noc&s o$ tra(el in India! ? %ta )ar) %egme t9; Product has the bare minimum $eatures 8 is di$$erentiated on lo% rices! Product is romoted as (alue $or money!
'ositio i g
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[MARKETING MANAGEMENT] December 15, 2007
It
ositions itsel$ as an A-Z luggage company %ithout di$$usion o$
the mother brand! -!I!P! is loo&ing at ta ing the lucrati(e 3uro ean mar&et %here
eo le are buying more luggage
%trateg4 -IP has established itsel$ in the Indian mar&et using to introduce Mnon re(ersible multi sa$e loc&N, so$t gri together %ith brand building made -IP a mar&et leader! roduct handle,
inno(ations, stress on 9uality and brand building! -IP %as the $irst dual action loc& and central loc&ing system! These inno(ations
Then -IP $aced the into the
roblem $aced by most o$ the giants7 the share o$ the com any!
brand becoming generic to the category and local brands eating In 1227 came a $ormidable threat to -IP K Samsonite! Fith in short time Samsonite established its segment, it had no resence in the lu#ury segment o$ the mar&et! Fhile -IP %as (ery dominant in the mid/ resence in the lu#ury segment! Samsonite eriod o$ time! This osed a ma4or threat to -IP and garnered a mar&et share o$ about 35* in the luggage mar&et %ithin a short $orced -IP to seriously reconsider its mar&eting strategy! To counter the threat o$ Samsonite, -IP launched 3lanEa range o$ remium luggages! Samsonite mean%hile also %anted to enter the
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o ular segment +100/ 2000 range,! It launched the brand
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[MARKETING MANAGEMENT] December 15, 2007
M6merican Tourister Mto enter this segment contem orary loo& and a %hich %as not
osing a ma4or threat
to the mar&et leader! Core o(er Samsonite had an international ealed to the ne% generation than -IP ercei(ed as a (ibrant brand!
In order to attract the ne% generation and create a ne% brand identity, -IP embar&ed on a rebranding e#ercise! The usual ads o$ -IP %as a a ealing to the middle class and $ocusing more on o%er$ul and emotion! The MGal Bhi, 6a4 BhiN ads %ere (ery
ealed to the middleclass! But since the consumers changed, in
order to succeed, the brand had to ha(e a contem orary loo&! The ne% strategy o$ -IP is $ocusing on ca turing or o%ning the conce t the ne% o$ MTra(elN! The logo %as changed to a more contem orary logo and the ads %ere changed to communicate ositioning! The agency thought o$ the most a ro riate moments o$ tra(el and decided that the Mtime o$ de arture Mare the most critical constituents o$ tra(el! The ads aimed to tie the brand to Tra(el! Thus originated the MBye/ Bye Mcam aign %ith a (ery youth$ul imagery that a attem ting to o%n ealed more the ne% generation y 4ourneyN thus o$ tra(eling! roducts! conce t tra(elers! The baseline %as changed to MBa the
The ne% cam aigns %ere su 'rance, to ca ture the
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orted by ne% ranges o$
The sub brands o$ -IP include Delsey +international brand $rom remium segment, 'ootloose7 the trendy
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[MARKETING MANAGEMENT] December 15, 2007
bags $or the youth, Buddy7 school bags and 6l$a7 (alue $or money segment! -IP is a mar&et leader that is trying hard to retain its leadershi osition! It had $ailed to create barriers $or com etition by &ee ing many categories o en $or com etition to enter!
% also leather bag category is no% seeing lot o$ action %ith big layers li&e Bidesign ta&ing the lead! -IP does not ha(e a resence in this segment! But %ith its strong brand e9uity and ability to change %ith the consumer trends %ill hel -IP in its $uture battles!A)"ertisi g %trateg4 Their ad(ertising strategy is to romote image o$ sturdiness,
(alue $or money 8 toughness! Plan to s end AS 20 cr! $or the same! Its rice ranges $rom AS 225 to As!1000! The com any has also been in $resh tal&s %ith 'rench com any Delsey, $or mar&eting the latterOs remium luggage range! 'rici g %trateg4 Car&et Segmentation Segme nt Price range +As, Premiu 1500J m Car&et share +*, 15
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Po ula r
700/ 1500
30 55 o$ the rung in India! It is remium segment, the
Standa 300/700 rd The
remium segment is at the to
$ollo%ed by the
o ular segment %hich is slightly larger than the
remium segment but smaller than the
latter segment is the largest and contributes to ma#imum sales in de(elo ing countries! In contrast, the standard segment in the de(elo ed countries is (ery small! Such constitution o$ the customer ro$ile is aiding the
unorganiEed sector in India %hich manu$actures lo% cost goods! The high 9uality manu$acturers are $inding it di$$icult to enetrate the mar&et due to high roduction costs! The target customers at the high end + remium segment, $orm 4ust 15* o$ the total customers %hile the lo% end standard segment constitutes 55*! The remium segment is controlled by the 6 ollo grou +.S,
com any, Samsonite +I,! The
o ular segment is dominated by
the domestic giant, -IP Industries! The standard segment, the largest segment, is ser(iced by -IP Industries and .ni(ersal! The unorganiEed iece! 6 art $rom com etition and undercutting by the unorganiEed sector, the moulded industry is $acing a tough $ight $rom the so$t luggage segment as %ell! This segment has caught customer
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layers
rice their
roducts at around As 300
er
[MARKETING MANAGEMENT] December 15, 2007
$ancy in the last $e% years! 3(en though the so$t luggage segment $orms 4ust 15/20* o$ the total industry! It is gro%ing at the rate o$ 25* %hich is much higher than the moulded luggage segment gro%th! The industry ma4ors di$$er in o inion on the gro%th rate o$ hard luggage or moulded luggage! -IP Industries o timistically uts the gro%th rate at 10* %hile the multinational Samsonite says the hard luggage mar&et has shrun& by )*! But, both the com anies are not ready to ignore the hard luggage mar&et $or so$t luggage! 6broad, most o$ the luggage manu$acturers are into both hard and so$t luggages! In India too, -IP and Samsonite manu$acture both so$t and hard luggage! .ni(ersally, the luggage business is seasonal in nature! In India, luggage sales de ends on t%o $actorsPtourism de(elo ment and on the marriage season! The marriage season e#tends $rom Carch K ;une and $rom >ctober K December! These months see good luggage sales! 6lso, the domestic tourists usually During this lan their yearly tri s during the holiday season bet%een 6 ril K ;une! eriod, there is $ierce com etition among the luggage manu$acturers to grab the mar&et share! Bo%e(er, socio/ olitical turmoil in the last $e% years has a$$ected the Indian tourism industry! Car&et sources say all such roblems ha(e retarded the cumulati(e annual gro%th rate o$ the moulded luggage industry to 5*! Bo%e(er the Gargil issue at Gashmir has %orsened the chances o$ re(i(al o$ the Indian tourism industry,
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thereby reducing the chances o$ im ro(ement in the gro%th rate o$ the luggage industry!
%5,T A al4sis !. %tre gths9; • -ery high brand a%areness +2nd in India,!
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[MARKETING MANAGEMENT] December 15, 2007
• 52* mar&et share in organiEed sector +largest in 6sia,! • 11* through .ni(ersal luggage! • 'orm 31 years it has been in this mar&et! • It has 21 branches 8 a strong dealer net%or& o$ about 5000 outlets! • Do% ra% materials cost! • Aeal -alue $or money! • Coney o%er 8 aggressi(e management! • 6ll lants are IS> "erti$ied +go(ernment recogniEed A 8 D unit
in :asi&,! $. 5ea2 ess9; • Dess Aesearch 8 De(elo ment e# enditure! &. ,pport* ities9; • Sco e to increase e# orts! • 3conomy is re(i(ing! • .nta ed lo%er segment area!
#. Threats9; • Forsening situation in Gashmir $or tourism!
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[MARKETING MANAGEMENT] December 15, 2007
• .norganiEed sectors are chea er by 25* due to less amount o$ e#cise duty! • 3#cess ca acity in the South 3ast 6sian countries! • The layers in the unorganiEed sector getting them organiEed
and coming out %ith branded roducts!
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6ompetitio
from %amso ite ? the F orga iGe) %ector
The Indian moulded luggage industry at the unorganiEed sector is ha(ing an u
resent 4uncture is
%itnessing a bitter battle among the com etitors! Bo%e(er, the er hand grabbing a larger o%er and an arentage, share %hene(er the mar&et gro%s! -IP has money money o%er and A 8 D su
aggressi(e management! Samsonite has a reliable on lo% cost
ort! The unorganiEed sector relies
roducts $or their good sales! The su$$erers are those o%er %hich does not allo% them to s end on
lac&ing in money
ad(ertisements and A 8 D! In the long run, com anies %ith sound A 8 D are e# ected to sustain com etition! Fhile -IP s ends 2/3* o$ its turno(er on A 8 D, com etitor Samsonite does not s end anything in India! The arent com any s ends 2* o$ its turno(er in A8 D! This %ill hel Samsonite introduce ne% roducts eriodically! In $act, Samsonite ro oses to reduce its rice range $rom the resent As!1500/1700 range to the As!1000 J category! >n the other hand, -IP lans to introduce roducts both in the remium and lo%er end segments! But both the com anies are &ee ing their cards close to their chest! The $ight is e# ected to become $iercer %hen the %orld number $our Delsey +o$ 'rance, also ma&es an a earance in India! Internationally, the com anies are trying to enter $ast gro%ing areas because o$ (ery lo% gro%th in the de(elo ed mar&ets! Ta&e
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[MARKETING MANAGEMENT] December 15, 2007
the case o$ Samsonite International! It has %itnessed a gro%th rate less than 0!0* during 1221! "ertainly, the international ma4ors cannot ignore the Indian mar&et! In the Budget @22 ho%e(er, the $inance minister has allocated As!1!33 billion $or tourism de(elo ment as against last year@s $igure o$ As!1!12 billion! This e#cess allocation is sure to bene$it the tourism industry in turn bene$iting the tourism de endent industries +moulded luggage and hos itality industries,! 6nother ma4or area can be loo&ed into by the luggage
manu$acturers is ma&ing India a manu$acturing base in the %ay Samsonite has cashed on the chea and s&illed man o%er oor roduct 9uality, a(ailable in India! 6s stated earlier, due to in a osition in e# ort! >n the $li
e#ce t $or -IP and Samsonite none o$ the local manu$acturers are side there is e#cess so$t luggage ca acity in countries li&e "hina and Tai%an! Car&et sources say that these countries ha(e 50* e#cess ca acity %hich %ill $ind their %ay in the international mar&et! Bence the local com anies may ha(e to encounter tough com etition! 6s such any rise in domestic sales and e# ort sales %ill de$initely bene$it the domestic industry! Thus, the resent status o$ the industry is highly com etiti(e and roducts to choose $rom! The
the $inal consumer %ill be bene$iting! Today, he has more o tions, more designs, and better 9uality consumer is the &ing!
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[MARKETING MANAGEMENT] December 15, 2007
The Mo"es9 Samsonite %as considering launching >yster +its highest (olumes earner %orld%ide, in the range o$ As!2000, so that it %ould be riced abo(e -IP, and its brand image %ould be strengthened! But, early this year, -IP Industries launched 3lanEa, a slic& brand o$ remium moulded luggage targeted at the to end o$ the remium mar&et! 3lanEa boasts o$ t%o and $abric lining! The 72/cm 3lanEa %as atents, $or its bum er riced at As! 3750, %hile
the 02/cm one sells $or As! 3250 in India! Coreo(er, 3lanEa has been made a(ailable through select dealers only, in order to maintain its remium image! 6t resent, -IP lans to e# ort 20* o$ its roduction o$ 3lanEas! This caught Samsonite totally una%ares! The branded luggage scores on ercei(ed (alue ricing, and so at the moment Samsonite is &eenly trac&ing 3lanEa@s er$ormance in the mar&et! -IP set the rice so high to reem t Samsonite@s entry in the
su er/ remium segment o$ the mar&et! -IP lans to ma&e this rice ermanent, sub4ect to the success$ul
sales o$ 3lanEa! This means that Samsonite %ould go ahead and launch >yster at As! 2000! The mar&et research study clearly indicates that Samsonite %ould lose hea(ily on its brand e9uity i$ its roduct is chea er than the e#isting ones in the mar&et!
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[MARKETING MANAGEMENT] December 15, 2007
The o tions a(ailable to Samsonite are
?
Aeduce not
rice and target lo%er segments / This again is The high brand image o$ Samsonite rice! It is only the
ossible!
demands a corres ondingly high un&no%n in the other segments!
?
remium segment that Samsonite can target, as it is
Increase rice and raise ercei(ed 9uality / I$ Samsonite is $orced to enter at a higher rice, it might ta&e greater amount o$ time to gain a $ooting in the Indian mar&et! This might gi(e -IP Industries 4ust enough time to strengthen itsel$! But this o tion %ould ensure that Samsonite retains its ma4or strength / its brand e9uity!
-IP Industries is no% concentrating on e# anding its ort$olio to
roduct
lug in any e#isting holes! It has launched si# ne% lanning to launch more roducts in the
roducts in 1225 in the higher end o$ the mar&et +one o$ them %as 3lanEa,! 6lso, -IP is rice oints! su er/ remium category in order to counter Samsonite at all
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[MARKETING MANAGEMENT] December 15, 2007
The
Critical Aspects
• 3lanEa
to the s*ccess of the strateg4
a)opte) b4 VI' I )*stries are9 must be mar&eted success$ully so as to remium
establish itsel$ in the mar&et! The earlier
roduct o$ -IP Industries, 6madeus, $ailed to ta&e o$$ in 3uro ean mar&et channels li&e Italy! But -IP o$$icials state that 3lanEa, %hich is considered to be the most so histicated and e#tensi(ely de(elo ed roduct o$ -IP e(er by insiders, is ro(ing to be a success!
•
-IP must introduce more
roducts in the su er/ rice
remium category and gain a $oothold at all the Samsonite@s roduct range too $ormidable totac&le!
oints! .nless this is accom lished soon, -IP %ill $ind
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Through its rice
remium
ricing o$ 3lanEa, Blo% Plast has $orced its entry rice! By coming in at a higher ricing, Blo% Plast is
Samsonite to hi&e u
oint, >yster %ould $ind it di$$icult to garner desired lug e(ery hole in the mar&et, be$ore
(olumes! By using such a com etiti(e ho ing to gain time to Samsonite starts breathing do%n its nec&!
Fith Samsonite ha(ing in(ested hea(ily in the lant at :asi& +it is the third largest manu$acturing lant o$ Samsonite,, it %ould not gi(e in a hurry! Fhether -IP %ould be able to %ard o$$ Samsonite@s challenge %ill not be clear $or a cou le o$ years!
%AM%,NITE
The %orldOs Q1 luggage ma&er, Samsonite o$$ers a broad range o$ luggage and luggage/related roducts, including suitcases, garment bags, casual bags, business cases and other tra(el bags! Samsonite also license their trademar&s $or use on roducts such as tra(el accessories, ersonal leather goods, handbags and $urniture ! Samonsite also ma&es tra(el gear $or Timberland! Samsonite is the %orld leader in the luggage mar&et, %ith an emerging resence in 6sia! It has set u a manu$acturing lant in :asi&, %hich has started o erating! Samsonite roducts are roduced around the %orld at 1) Samsonite/o erated manu$acturing $acilities or by third/ arty su
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liers! Samsonite bene$it $rom their large siEe through
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[MARKETING MANAGEMENT] December 15, 2007
(olume/dri(en urchasing and manu$acturing economies! It sell their roducts in more than 100 countries at a ro#imately 27,000 retail locations, including de artment stores, s ecialty stores, catalog sho%rooms, mass merchants and %arehouse clubs! In the .nited States, they sell their roducts through 125 Samsonite/o erated stores! Samsonite is the to seller o$ luggage in the .nited States, 3uro e, and ;a an! In addition to its %orld/reno%ned Samsonite label, the com any also mar&ets the o ular 6merican Tourister and Dar& brands! .nder those names, Samsonite o$$ers a $ull line o$ luggage, including so$tside and hardside suitcases, garment bags, casual bags, business cases, and other tra(el bags and accessories! Samsonite started its o eration in Den(er, "olorado, .S6 in 1210! It entered the Indian moulded luggage mar&et only to%ards late 1220 %ith lant in :ashi& in collaboration %ith the Tain%alas! Samsonite It has selected Den(er, Belgium $or manu$acturing hard luggage 8 Bungary, the Slo(a& Ae ublic $or the manu$acture o$ so$t luggage!In :asi&, India both the hard and so$t luggage is manu$actured! 7RAN0 ',RT=,8I, The brands o$ Samsonite collecti(ely,ser(e e(ery segment o$ the mar&et, reaching customers in all %al&s o$ li$e, all o(er the %orld! It meets the discerning needs o$ the lu#ury mar&et through their Dambertson True# and Samsonite Blac& Dabel brands, %hile the inno(ati(e, high/9uality o$$ering %ithin our time/honored
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[MARKETING MANAGEMENT] December 15, 2007
Samsonite brand ser(es both middle/ and u
er/mar&et customer
segments! Its 6merican Tourister brand ro(ides a$$ordable, 9uality roducts to (alue/conscious consumers! 3ach o$ our Samsonites brands has been care$ully de(elo ed to meet the recise 9uality, (alue and ricing needs o$ the consumers %ithin its mar&et! Des ite their di(ersity, all o$ the brands share a common hiloso hy7 to deli(er durable, high/9uality roducts that re$lect Samsonite@s commitment to e#cellent cra$tsmanshi , inno(ati(e design and e#ce tional $unctionality! The brands o$ Samsonite are7 • S6CS>:IT3 • S6CS>:IT3 BD6"G D6B3D • 6C3AI"6: T>.AIST3A • D6CB3ATS>: TA.3R • D6AG Samsonite com lement their o%ned brands through their global licensing rogram, through %hich they le(erage Samsonite@s luggage e# ertise to artner %ith mar&et/leading li$estyle brands, such as 8acoste, %ith %hom they de(elo handbags and casual bags, and Timberla ), %ith %hom they o$$er tra(el gear, accessories, bac& ac&s and outdoor items! 'R,0F6T% 8INE% AN0 5I0TB The roducts lines o$ Samsonite Includes7
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• Suitcases • "arry/ons • =arment bags • Bac& ac&sSDu$$els • Gids Duggage • BusinessS"om uter Bags B6S3D >: SC6DD C3DI.C SIT3 +T>T6D 0 +T>T6D 20 PA>D."TS, PA>D."TS, SamsoniteV 3le(ation 21W . right SamsoniteV 3le(ation 25W . right
D6A=3 +T>T6D 21 PA>D."TS, SamsoniteV 6scella 22W 3# andable . right
+SB>F: 6SID3 IS TB3 C>D3D :>! >' TF> PA>D."TS FBI"B B6-3 TB3 D>F3ST 6
TB3 BI=B3ST PAI"3 A3SP3"TI-3 DU I: 36"B "6T3=>AU!,700 Series SamsoniteV >utlineV 1 22W S inner
SamsoniteV Pro/DDR 21W . right %amsoniteV Pro/ DDR 2)W . right
• =ol$ Tra(el Bags
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[MARKETING MANAGEMENT] December 15, 2007
• 6ccessories
%FIT6A%E%
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[MARKETING MANAGEMENT] December 15, 2007
B6S3D >: S>'TSID3 3RT3AI>AS +T>T6D 25
PA>D."TS, +SB>F: 6SID3 IS TB3 C>D3D :>! >' TF> PA>D."TS FBI"B B6-3 TB3 D>F3ST 6
TB3 BI=B3ST PAI"3 A3SP3"TI-3 DU I: 36"B "6T3=>AU!, 6merican TouristerV DODite 25W 3# . rightB6ADSID3 +T>T6D 13
PA>D."TS, 325 Series Samsonite V 'ODite 21W . right
B6AD 6
S>'T +T>T6D 1PA>D."TS, )50 Series Samsonite® Sahora Spinners Hybri !"# Upri$ht
SamsoniteV Pro/DDR 22W S inner . right
700 Series Samsonite V >utlineV 1 22W S inner
000 Series SamsoniteV "arbon 3RPX 22W Bybrid . right Suiter
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0I%TRI7FTI,N NET5,RK Samsonite is resent in 150 items %ith )50 outlets! They are not interested in mass a eal 8 %ould li&e to concentrate on the to 23 cities! Samsonite is distributed rimarily through7 • Samsonite >utlet Stores • Samsonite Blac& Dabel Stores +Boston, :e% Uor&, Short Bills, San 'rancisco, "hicago, Dallas, • Samsonite "lassic Stores +Ging o$ Prussia,P6 H Detroit,CI H 6rlington,TR H Tam a,'D H "oncord,"6 H :ashua,:B • De artment Stores li&e Cacys in the .S6 and ;ohn De%is Partnershi in the .G • >nline retailers li&e 3bags!com and G; Bec&ett • Farehouse "lubs li&e "ostco • Cilitary Stores li&e 66'3S
'R,0F6T 6ATEG,RA Duggage
'RIN6I'A8 'R,0F6T% Bardside and so$tside luggage, garment bags, carry on bags
MAIN 0I%TRI7FTI,N 6BANNE8% Direct retail stores, s ecialty stores and highKend de artment stores CidKle(el de artment stores, s ecialty stores, national chains, %arehouse clubs, direct retail stores :ational chains, mass merchants, s ecialty stores,
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direct retail stores "asual and >utdoor Bags Du$$el bags, tote bags, bac& ac&s, shoulder and hi bags,school bags, handbags S ecialty stores, de artment stores, national chains,%arehouse clubs, s ort and outdoor retailers :ational chains, mass merchants, s ecialty stores Business and "om uter "ases Brie$cases, business cases, com uter cases Direct retail stores, s ecialty stores and highKend de artment stores De artment and s ecialty stores, o$$ice su erstores, >3Cs, %arehouse clubs Cass merchants 'ositio i g9 Bigh Yuality S Bigh Price Samsonite ositioned itsel$ as Internationally acclaimed 9uality roduct %ith (isible bene$its! %egme tatio 9 The to remium segment i!e! As! 1500/7500 is the main area o$ attention o$ Samsonite %here it already has 00* o$ the mar&et share!
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'ro)*ct 0iffere tiatio 9 The main di$$erentiation $actors based on the target consumer that %ish to cherish e#clusi(ity are7 • Aeliability • Percei(ed -alue o$ the Product • International Yuality
7*si ess %trateg4 ,f %amso ite9 • 3# and "hannels o$ Distribution and Product >$$ering • Strengthen Car&eting and Product Inno(ation! • • "ontinue Forld%ide 3# ansion! Im ro(e Distribution Systems in the .!S!
%5,T ANA8A%I% ,= %AM%,NITE9
%tre gths9; • Aeliable arentage 8 money o%er! • Aesearch %orld%ide,! • Bigh Yuality! • 25* mar&et shares in %orld +50* in the organiEed sector,!
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8
De(elo ment
su
ort
+2*
[MARKETING MANAGEMENT] December 15, 2007
5ea2 ess9; • 10* o$ ra% materials im orted • Do% brand a%areness ,pport* it49; • Increase o ortunity! distribution net%or&
• .se it as a base $or e# orts! • 3conomy is re(i(ing
Threats9; • Forsening situation in Gashmir • >ther C:"@s entering in the mar&et! • )* decline in the mar&et in 1227/21!
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%A=ARI
'ro)*cts ? 'rici g
'ac2s9; 1! >riginal Pac&s
•
Delu#e7 Fe too& our traditional Pac& and added so$t added leather shoulder stra s and a %aist belt $or com$ort on those long ortages Prices7 As!1250/3150
•
.tility7 These less e# ensi(e ac&s allo% occasional cam ers to ha(e their o%n rugged gear Prices7 As! 1350/2150
• Bea(y Duty7 6 hea(y duty durable (ersion Prices7 As! 1100/1200
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•
Aambler7 6 (ersatile gear hauling ac& %ith three outside oc&ets Prices7 As! 220/1750
2! Bea(y Pac&s • Bea(y Duty7 6 hea(y duty durable (ersion Prices7 As! 1)50/2100 • Conarch7 Cade o$ more $unctionality $eatures and %ith %aist belt and sternum stra Prices7 As! 1)50/2150 3! "hild ac&s • 6 miniature Pac& that ma&es a great &ids ac&! Dots o$ bright colors Prices7 As! 220 on%ards 8*ggage 1! .tility Duggage Bags • Premium Bags Prices7 As! 1000 on%ards • Standard bags Prices7 As! 000 on%ards • Trolley Bags Prices7 As!1300 2! S ortsman Duggage
•
S ortsman garment bags 7 Bang your suits or s&irts in this classy garment bag!
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[MARKETING MANAGEMENT] December 15, 2007
As! 2000/3500 • S ortman Du$$el7 Ceticulously cra$ted and thought$ully designed, %e &no% youOll lo(e this du$$elZ Prices7 As! 1200 on%ards • 3#tended S ortsman Du$$el7 Ti ered end oc&ets ma&e it sim le to $ind those $re9uently retrie(ed items Prices7 As! 2000 on%ards
•
Boot Du$$el7 The large to com artment is sealed %ith a $ull length Ei er, and hidden beneath it is a lined com artment! As! 2100 on%ards
3! Deather Duggage
•
Deather Du$$el7 6 real (alue, our leather du$$el is an honest in(estment in your ersonal tra(el com$ort and security As! 3000 on%ards
• Pebbled Deather Du$$el7 >ur Deather Du$$el a(ailable $or a limited time in a so$t ebbled leather Prices7 As! 3000 on%ards
•
Deather Boo&bag7 6 stylish messenger bag style bag that %ill last $or generations! As! 1500 on%ards
7*si ess Gear 1! Brie$cases
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[MARKETING MANAGEMENT] December 15, 2007
• 3#ecuti(e Brie$cases7 These bags are made out o$ our ne% (el(ety so$t, $ull/grain, %ater roo$ed leather! As! 3500 on%ards • Deather Brie$case7 6n elegant leather brie$case Prices7 As! 2300 on%ards • Pebbled Deather Bags7 >ur Deather bags a(ailable $or a limited time in a so$t ebbled leather! Prices7 As! 2750 on%ards 2! Da to "ases
•
Da to Bac& ac&7 6 (ery o ular Darge Standard Day ac&, and added a added rotecti(e slee(e $or your la to Prices7 As!1)00 on%ards
• "an(as Deather Da to Pouch7 6 non/bul&y added ouch $or your la to Prices7 As! 1200 on%ards • Deather Da to Pouch7 6 non/bul&y added ouch $or your la to Prices7 As! 200/2000
Visit hrmba.blogspot.com for more project reports, prese tatio s, otes etc.
%ho*l)er 7ags
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1! Deather Bags
•
Serengeti Boo& Bag7 These boo& bags are made out o$ our ne% (el(ety so$t, $ull/grain, %ater roo$ed leather As! 1500 on%ards
• Pebbled Deather Cini/Ba(ersac&7 >ur Deather Cini/ Ba(ersac& a(ailable $or a limited time in a so$t ebbled leather As! 1)50 on%ards • Dady Sli er Bag7 6 handcra$ted all leather bac& ac& handbag As! 200 on%ards 2! Shell Bags • Delu#e Bags • Standard Bags • "lassic Bags Tote 7ags 1! S ortsman Tote Bags 2! Ti To Tote Bags 3! Cini Tote Bags ,ther 'ro)*cts i cl*)e • Gey 'ob • Deather Document Brie$ • Deather 'old u Bat
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• Fallet/ Tri$old %allet •
te ad holder • PD6 case'laces a ) 'romotio s
The com any should ado t t%o strategies $or allocating its roducts! 'F%B %trateg49 Ma *fact*rers 6*stomers 5holesalers Retailers
'*sh strateg4 under %hich the roducts can be sold at di$$erent %holesalers, retailers, $ranchisee sho s, etc '*ll %trateg4 under %hich manu$acturers romote their roducts using ad(ertising and romotions! In this strategy the consumers are ersuaded to buy the roducts directly through the intermediaries! The consumers may also buy their roducts online! They should ha(e their %holesaler at a articular lace and the retailers or $ranchisee sho s should be located at ublic laces, malls, etc! 6lso, retail sho should be near air orts, rail%ay/ stations, bus stations, ublic laces, etc! This %ould contribute in im ulse buying too! The romotional acti(ities may include electronic hoardings in air orts, rail%ay stations, etc! "on(entional methods o$ ad(ertising can also be used such as rint media, tele(ision, etc!
Refere ces
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•
http9DD111.la#!!.comDcompa 4;V.I.'.H$3Tra"el H$3Val*es?li);&+33(!..htm
• • • • • • •
111."ipbags.com 111."ipmo)er a.com 111.bags;l*ggage.com 111.google.co.i 111.4ahoosearch.com 111.1i2ipe)ia.com 111.tra"ele