TABLE OF CONTENT

No Topic Page #1 EXECUTIVE SUMMARY

2 GUL-AHMED`S BACKGROUND

3 IDEAS STORY

4 IDEAS AN OVERVEIWVision Statement

5 IDEAS VALUE CHAIN

6 STATEGIC MARKETING PLANNINGPLCExternal Environment AnalysisInternal Environment AnalysisSWOT AnalysisANSOFF Matrix

7 FACTORS INFLUENCING COMPANYMacro EnvironmentMicro Environment

8 THE MARKETING PLANSegmentation and Positioning

SegmentationTarget Market

OUR VIEWPositioning

Four P’s AnalysisProduct

Product HierarchyProduct AttributesProduct Evaluation

PricingPricing StrategyIDEAS Product Price RangePrice Evaluation

PlaceDistribution ChannelPlace Evaluation

PromotionPromotion StrategyCommunication MixPromotion Evaluation

Segmentation

9 IDEAS MARKETING SYSTEMS

10 COMPETITOR ANALYSISPorter’s Five ForcesEntry and Exit BarriersEvaluation on Competition

11 RECOMMANDATION

EXECUTIVE SUMMARY

In our report we have given analysis on the marketing mix strategies, macro and micro environment, competitor’s analysis and IDEAS marketing plan and on the basis of that we have given our evaluations and recommendations.

IDEAS by Gul-Ahmed is the retail venture of Gul-Ahmed Textile Mills Ltd. Visualizing the needs of customers and the growing trend towards the retail industry, the company decided to diversify into the retail sector in 2003.

At IDEAS, Gul-Ahmed’s tradition of quality and style provides an elegant taste of creatively designed home textile ranges in a vibrant palette of colors, fabrics, patterns, textures and embroidery styles.

Their target market is the fashion conscious males, females, teenagers of affluent class of posh areas. As their product line is very exclusive and the affluent have that mindset, educational level, life style and fashion sense that best suits their image and product line. They do not want to focus volumes they want to cater the best.

IDEAS wants to position itself as a retail brand for fashion conscious affluent where they can come and have an ultimate home and fashion experience under one roof. Their Positioning statement says:

“The Ultimate Home and Fashion Experience”

IDEAS have opted for the Product-quality leadership objective. They are providing ultimate value to their customers in the form of exclusive styles and designs of refined fabrics. IDEAS according to their image and positioning are charging premium prices for providing best quality products.

IDEAS is very choosy about its location and consider building an outlet a major investment this is the reason that they do not have too many stores in the city. IDEAS choose the best locations for their stores which suits their image. They take location as their competitive edge.

IDEAS is using promotions tools effectively through number of sales promotion tools like discounts on shopping, lucky draws , free give away and wheel of fortune. Their sales promotion tactics change according to the campaigns.

Through our analysis we have identified certain loopholes in IDEAS strategies for pricing, expansion, customer relations and internal management etc for which we have given our recommendations which can help IDEAS to eradicate these issues.

LETTER OF TRANSMITTAL

Mr. Farhan Mannan

Course Instructor Principles of Marketing

PAF-KIET (City Campus)- Karachi

Dear Sir,

We students of BCA FALL’07 hereby present the report that you asked for to submit on 14/05/2008, as part of the course requirement in Principles of Marketing, which is a completion of all the hard work we have to put together during the course of the semester.

We have done our best to present you with comprehensive, reliable and valid information from the concerned authorities of IDEAS by Gul-Ahmed.

We hope that this report meet your expectations. But being students, this analysis by us may contain certain deficiencies.

We are grateful to you for your guidance throughout and providing excellent opportunities to learn which will be very helpful for us in the future.

Yours truly.

____________ ____________ ____________Asif Zohaib Ayaz

____________

Salman

____________ ____________ ____________Zohaib

ACKNOWLEDGEMENT

Firstly we thank Almighty Allah for blessing with the courage to write and complete this report. No report is only the work of authors. We owe much to the management and personnel of IDEAS especially Ma’am Saira Rasheed the Brand Manager of IDEAS, which were visited for research purpose as without much of their corporation this report would not have been possible.

We are indebted to our teacher Sir Farhan Mannan, lecturer, Principles of Marketing, whose assigned project has brought practical knowledge towards our subject. We would like to thank him for his constant cooperation and support as his help and believe in our work played such an important role in bringing this report to fruition.

As we have invested our unlimited time, money and resources, so our accomplishment is where we get some criticism and feedback regarding this report.

We also say a word of thank to each of our group members and colleague for giving us moral support and helped us in keeping our moral high whenever we were losing hope in completion of this report.

Gul-Ahmed`s Background

The story of textiles in the subcontinent is the story of Gul Ahmed. The group began trading in textiles in the early 1900’s. With all it’s know-how and experience, the group decided to enter the field of manufacturing and Gul Ahmed Textile Mills Ltd. was incorporated as a private limited company, in the year 1953. In 1972 it was subsequently listed on the Karachi Stock Exchange. Since then the company has been making rapid progress and is one of the best composite textile houses in the world. The mill is presently a composite unit with an installed capacity of 103,000 spindles, 220 wide width air jet looms, 90 Sulzer’s, 297 conventional looms and a state of the art processing and finishing unit.

Corporate Profile - Major Companies

The following is a list of the major companies which comprise the group:

Gul Ahmed Textile Mills Limited Gul Ahmed Energy Limited

IDEAS StoryReason of Existence

Gul-Ahmed is a major exporter of textile products in Pakistan; USA and Europe was the major exporting region for Gul-Ahmed. In late 2001 European Union imposed Anti-dumping duty on Pakistan textile products because of anti dumping duty Gul-Ahmed faced low profit rates and European market became less attractive for them. This is the major issue that they faced in late 2001 for which they have to come up with a solution.

In the same time period Gul-Ahmed realized that due to the fierce competitive environment as a result of the Quota free trade there were many potential new entrants in export market. They knew that they can’t compete against countries like Bangladesh on price and quality therefore they were afraid of losing big chunk of their export. To succeed they have to focus on efficiency, operational excellence and pursuing new business opportunities.

As Gul-Ahmed is a major exporting textile firm they have huge left-over inventories of export quality which they have to sell to cover their costs, and the traditional method they were using was open house sales in the fair price shops which was not producing revenues for Gul-Ahmed.

All these three major reasons led to the generation of idea’s concept, this idea was given an innovative picture by a SZABIST student by suggesting its name “IDEAS by Gul-Ahmed” which will provide a whole unique home and fashion experience to its local customers.

Finally in 2003 IDEAS came into existence by opening its first outlet at Clifton. IDEAS from the very beginning wanted to establish themselves as a very strong retail brand that will cater the affluent so they decided to open an exclusive store with a bigger look on a prime location with exclusive and trendy exterior, interior and ambiance.

IDEAS BY GUL-AHMED

IDEAS by Gul-Ahmed is the retail venture of Gul-Ahmed Textile Mills Ltd. Visualizing the needs of customers and the growing trend towards the retail industry, the company decided to diversify into the retail sector in 2003.

At IDEAS, Gul-Ahmed’s tradition of quality and style provides an elegant taste of creatively designed home textile ranges in a vibrant palette of colors, fabrics, patterns, textures and embroidery styles. The store also features limited edition lawn and cotton designs in fresh trendy colors.

Gul-Ahmed has been an exporter of textiles for the past many years and with its vast experience and reach the company is set to develop an extensive chain of stores across the country, aiming to bring its customers an unbeatable shopping

IDEAS Vision

“IDEAS is a specialty store with solutions for quality home interiors and fashion needs of both men and women. Exclusive designs and product range is the heart of Ideas Brand and we will remain focus on that heritage as we will grow into a national brand, following international retailing standards. Taking full advantage of our In House strengths and combining it with external resources, we would complete for the future. Friendly customer services, well trained courteous sales staff and comfortable store environment are our core values. We want all our customers to experience the freedom and exhilaration in the shopping at the Ideas stores.

IDEAS, excels to be a consistent brand for internal, external and corporate customers with bond of trust and vitality. IDEAS stores, symbolizes and avant-garde happening place with continuous passion for creativity and innovation. Creating loyalty within the market by knowing our customers personally is the manifesto of our company.”

IDEAS Value Chain

SUPPORTING ACTIVITIES

Firm Infrastructure

IDEAS inherited its infrastructure from Gul-Ahmed which is very established as they are in the business from past 50 years. They have their own power generation plant, very modern production plant, warehousing facilities and owned supply chain. IDEAS do not have separate finance, accounting, human resource and R&D department but GUL AHMED departments supports these activities for IDEAS. It is very cost effective but time consuming which delays many of the processes like the approvals for campaigns, promotions and clearing bills.

Human Resource Management

Gul-Ahmed’s HR department also takes care of IDEAS HR Management. They are working efficiently as far as training and development of sales staff is concerned but there are lots of gaps in human resource particularly in marketing team the workload is extensive which creates fatigue for employees which effect their efficiency.Another flaw associated with HR is that they do not have very attractive compensation plan for their employees which is the source of frustration among the employees.

Technological Development

IDEAS has the advance technology like CRM software and retail pro but not making full use of it as they lack required expertise for utilizing it. For example they have the CRM software but they don’t have any loyalty program for there customers because they are not effectively utilizing customer data base which hinders them to identify their loyal customers.

PRIMARY ACTIVITIES

Inbound logistics

Gul-Ahmed is in the textile business for past 50 years so they have very settled inbound logistics and have good relationship with their suppliers and they are not facing major conflicts from their suppliers.

Firm Infrastructure

Human Resource Management

Technology development

InboundLogistics Operations

OutboundLogistics

MarketingAnd sales Service

Margin

Operations

Gul-Ahmed is ISO 9002 certified therefore they have manufacturing plants and facilities of international standards. As a textile exporter Gul-Ahmed knows the importance of delivery time so they dispatch their orders on time so IDEAS don’t have to worry about inventory requirements.

Outbound Logistics

IDEAS have their own distribution network which carries the finished product from the factory to warehouse and then to IDEAS outlets which is cost effective for IDEAS.

Marketing And Sales

IDEAS is using most interactive and influential tools among all apparel retail stores. IDEAS use different marketing channels to cater their target market. IDEAS marketing department is the essence of this retail venture which is running under the qualified professionals. IDEAS marketing team assures meeting of sales target through their aggressive and reliable marketing style. IDEAS marketing department also have close connection with the branding of store and they also work to improve brand recognition and brand persona.

Services

IDEAS is again having competency in its services. Its sales staff is highly trained in greeting customers they are well dressed and well versed. IDEAS also make tailor made orders and embroidery on customers demand. IDEAS is very much concerned about their sales services they also give the opportunity to customers to give their opinion and suggestions on the sales services. IDEAS will revamp their web-site very soon which will offer e-commerce services and home delivery of products.

Strategic Marketing Planning

PRODUCT LIFE CYCLE

Gul Ahmed IDEAS is currently in growth stage as it is gaining rapid acceptance, publicity and their profits are substantially increasing.

IDEAS Strategies For Growth

As IDEAS is in the growth phase they have minimized their promotional budgets which were not very huge previously they do promotions only on their campaigns, special events and launches.They are also constantly adding and increasing their product line. They are also entering in the new segments and also increasing their number of stores.

Evaluation

In our view IDEAS is very rightly following the marketing strategies for growth stage i.e. according to their life cycle stage. As their profits are on the rise they are expanding their network along with the increment in product line and category.One area which they have ignored is they are not adjusting their prices to attract the next layer of price- sensitive buyers.

Internal Environment Analysis (Strength and Weaknesses Analysis)

Strengths

Strong brand name and have association with the textile giant Gul-Ahmed. They

are pioneers in textile and fashion products retailing.

Introduction Growth Maturity Decline

Sales

Profits

TIME

Sal

es a

nd

Pro

fits

IDEAS

Vertical integration is their major competitive edge.

As IDEAS is associated with Gul-Ahmed which is financially very strong, have

abundance of resources and have capabilities to expand.

The quality and style of IDEAS products provides an elegant taste of creatively

designed home textile ranges in a vibrant palette of colors, fabrics, patterns,

textures and embroidery styles in fresh trendy colors.

High profiled sales team as IDEAS invest time and money on their training and

development as they are key to their business.

Exclusive designs and prints that IDEAS offers are designed by highly skilled and

professional designers.

They have their own supply chain that makes their distribution channel very

effective and flexible.

Weaknesses

Unable to meet customer requirement especially during campaigns.

As Gul-Ahmed has a Seth culture therefore the back-end staff of Ideas has to take

approvals on everything from them which hinder their speed to market.

Lack of teamwork and assigning multiple tasks to one person is a source of

frustration among employees at IDEAS.

Lack of co-ordination, empowerment and internal resistance creates conflict

among different departments.

External Environment Analysis (Opportunity and Threat Analysis)

Threats

Competitors like Chen One and Bed & Bath are major market players in home

and fashion retail industry as they are catering to same target market.

Chen One is well established in the market and they already have market

leadership, customer loyalty and association If Chen One increase their number of

branches within the city they can pose a big threat to IDEAS.

International retailers like IKEA, NEXT and J.C. Penny are coming in near future

to cater the same market can pose a big threat to IDEAS.

Opportunities

Growth Opportunities: -

Opportunities are very high in local market in terms of growth so they should

expand more.

Expansion Opportunities: -

Opportunities to enter in to other cities of Pakistan like Islamabad, Lahore,

Peshawar, Quetta and Multan etc.

Product Line Extension: -

Opportunity to penetrate more in fashion products like ties, shoes, formal

informal Suiting and winter wears etc.

Increase Segments: -

Middle-class segment is the fastest growing segments in Pakistan and IDEAS can

cater that segment with product and price differentiation.

Opportunity to enter into children apparels.

Opportunity to enter into children apparel from 1yr to 10 yrs old children.

Opportunity to globalize: -

Opportunity to open outlets internationally as Gul-Ahmed is also exporting in

those countries.

SWOT EVALUATION

IDEAS has all those major strengths which are necessary for a business to sustain in the market in terms of strong brand name, recognition, vertical integration, financial resources, high quality products, skilled human resource and product designs etc.The need is they have to capitalize on their major strengths to overcome some of their internal weaknesses which sometime serve as obstacles to achieve their goals and targets.

Similarly they have to grab the opportunities timely that are available for them like they can expand on both national and international level and can increase their product line to cater other ignored segments as well.This is the right time for IDEAS to expand as the growth potential is high and the market is not saturated. By capitalizing on its strengths and opportunities and minimizing its weaknesses IDEAS can flourish and prosper as a leading retail brand of Pakistan.

ANSOFF Matrix

Market Penetration

Product Development

Market Development

Diversification

Current Market

New Market

Current Product New Product

Market Penetration

Gul-Ahmed is penetrating IDEAS through opening up new stores in different areas of Karachi like Bahadurabad and Atrium Shopping Mall (Saddar) to cater affluent class by the name of IDEAS By Gul-Ahmed and they have also opened stores at KDA and Millennium Mall with the name of Gul-Ahmed Stores to cater the middle class segment as well.

Our View

They have opted for penetration because they want to cater the whole market by entering into both middle and upper class. This is not a right strategy for IDEAS because upper class segment has still lot of growth and by entering into the middle class segment it can damage the image of IDEAS.Another option for IDEAS is to enter into affluent class of other major cities of Pakistan i.e. Market Development.

Product Development

IDEAS is pursuing product development as well, they are increasing their product line very frequently with innovation and focusing current market trends like they have added new fashion apparels, accessories, gifts items, men wears to their product line recently.

MACROENVIRONMENT FORCES

Studying macro environment forces help in tracking trends and seeking opportunities. A successful company like IDEAS® must monitor and respond to these promptly and efficiently.

Demographic Environment

The importance of the demographic environment lies in the fact that all demand for a product derives ultimately from people.

Measured by purchasing power, Pakistan has a 30 million strong middle class enjoying per capita incomes of $8000-$10,000 (according to Dr. Ishrat Husain, Ex-Governor (2nd December, 1999 - 1st December, 2005) of the SBP). In addition, Pakistan has a growing upper class with relatively high per capita incomes. This class makes up a great deal of the purchasing power for high end products exclusive retail outlets like IDEAS® have to offer. There are tremendous opportunities waiting for IDEAS® to explore.

Within in the retail industry is a wide range of products with varying prices. Although the cheap brands may be little cheaper but the image brought with more expensive and exclusive brands is irresistible for upper class. It is a matter of prestige and exclusivity.

Economic Environment

In the first four years of the twenty-first century, Pakistan's KSE 100 Index was the best-performing stock market index in the world as declared by the international magazine "Business Week". Pakistan's manufacturing sector has experienced double-digit growth in recent years, with large-scale manufacturing growing by 18% in 2003. Consumer purchasing power has increased consumers are more informed now. People want to shop at stores like they have in foreign. “It looks and feels just like IKEA,” said one shopper at IDEAS®, referring to the Swedish chain of household stores. The piped music, friendly sales staff and attractive décor has made a dent in the market.

Technological Environment

 Pakistan’s every industry in general is at the pre-World-War-II technological level and this is the main cause for failures and drawback in manufactured goods and non acceptability in international markets. That was one of the reasons Gul Ahmed Textile Mills Ltd. decided to diversify into the retail sector in 2003. There are better products available at much lesser price from India and China in the international market.

On the other hand, thanks to technology, now consumers are not necessarily required to go to the brick and mortar outlet to shop for desired products but they can shop online as well.

 Political-Legal Environment.

 The trade prospects for Pakistan's textile and clothing exports in the international market at the time when it has been decided in the WTO Agreement on Textiles and Clothing that the trade in this sector from the developing to developed countries should be

completely free from quantitative restrictions and governed by the normal GATT rules by 2005. Textile and clothing is the major contributor to our total exports. But in the international market the share is marginal. The reason is the increasing world competition the quality as well as the range of goods produced, is the major weakness for our textile exports. Therefore, to survive in a more liberalized and more competitive world in which we are going to enter we need to go for modern technology and for the production of high value added goods. 

Social-Cultural Environment

There has been shift in the cultural values in the educated middle and upper classes. Advent of Cable television have brought cultural changes in the all classes, though process is gradual, but the cable television past few years is bringing revolution among the poor even in remote areas. The upper middle class and upper class has already accepted shift in cultural values. This has created new market for the changing values.

This has definitely affected the way consumers used to spend in the past. Now they want more elegant, creatively designed products than ever before. Internet and magazines also play a vital role in shaping consumers’ view of dressing themselves and their homes- thus creating huge opportunities for ventures like IDEAS® to grow. This is the reason we see late night shoppers dropping in to check out the brightly-lit store in droves to browse everything from household linens to children’s toys and a selection of photo frames and candles.

MICRO ENVIRONMENT FORCES

Competitors

IDEAS claims Chen One and Bed & Bath as their direct competitors because of their existence in the same segment and because of their size and huge product line.IDEAS indirect competitors include Portia fabrics, Cotton and Cotton, Cambridge, Khaadi, J.J. and Habitt because they deal in the individual product line in which IDEAS

also deals. IDEAS consider only those competitors as their direct competitors which have their own Integrated System.

MARKET SHARE

Publics

IDEAS is very concerned about the general public they want to maintain their image which they have set as the public’s image of the store effects their buying.There is always a conflict between IDEAS management and its internal publics which includes workers, managers and sales staff. As the work load on them is very extensive and there is no motivational benefits for them.

Suppliers

IDEAS have their own supply chain but they have few suppliers like packaging material and mannequins’ provider and some marketing intermediaries who provide promotional activities for IDEAS.

Marketing Intermediaries

Marketing Intermediaries provide marketing activities to IDEAS in promotion of their outlets and products. The printing agency offer services of designing and printing front and back lits pylons, pan flex, flyers and bunting, the printers and art workers change according to promotion campaigns. They also use services of cable operators for cable scrolling advertisement.

MARKET SEGMENTATION AND POSITIONING

SEGMENTATION:

GEOGRAPHIC

COUNTRY: - Pakistan

CITY: - Karachi

Density: - Urban

DEMOGRAPHIC SEMGENTATION

AGE: - 8+

GENDER: - Female, Male

FAMILY LIFE CYCLE: - Young single, Young married, Young married with

children 6 +, Older married, Married with teenage kids.

INCOME: - 40000 AND ABOVE

PSYCHOGRAPHIC SEGMENTATION

SOCIAL CLASS: - Upper Middle Class, Upper Class

LIFE STYLE: - Ambitious and Fashion Conscious

PERSONALITY: - Social

BEHAVIOURAL SEGMENTATION: -

Occasions: - Regular and Special Occasions (Eid, Weddings, Christmas)

Benefits: - Quality, Service, Speed, Ambiance and One roof shopping

facility.

Readiness stage: - Aware, Informed and Interested.

Loyalty Status: - Strong

Attitude toward Product: - Positive

TARGET MARKET

Initially IDEAS was targeting high end retailing. They went to set their image as a brand rather than a retail store. Their target market is the fashion conscious males, females, teenagers of affluent class of posh areas. As their product line is very exclusive and the affluent have that mindset, educational level, life style and fashion sense that best suits

their image and product line. They do not want to focus volumes they want to cater the best.

Our View

As we have seen IDEAS is going for expansion with in Karachi they are according to our evaluation are revising and redefining their target market i.e. they are coming into the middle-class market as well. For this purpose they are opening stores with the name GUL-AHMED stores and not with the name of IDEAS which is contradicting their image which they have set as an exclusive store brand previously because of the product line, pricing and promotions are same for these stores. This strategy could hamper IDEAS image of being exclusive and they might loose their exclusiveness.

POSITIONING

Positioning Statement

“The Ultimate Home and Fashion Experience”

IDEAS wants to position itself as a retail brand for fashion conscious affluent where they can come and buy the complete range of home and fashion products and have an ultimate home and fashion experience under one roof. Every store has its own image but IDEAS want to give its store a look of bigger store with peaceful and exclusive ambiance where people can enjoy and love their shopping experience.

Category Membership

IDEAS category membership includes all home and fashion products stores. Its direct competitors include Chen One, Bed & Bath and the indirect competitors are Portia fabrics, Cotton & Cotton, Habitt, Cambridge, Khadii and J.J. etc.

Points Of Parity (POP’s)

The category points of parity are all one roof shopping stores providing full-range of home and fashion products.

Points Of Difference (POD’s)

IDEAS (Pod’s) include its product line its unique and exclusive designs itself, its ambiance , the store interior and the product assortment that IDEAS has is much better than what the competing CHEN ONE and other stores have.

Differentiation

IDEAS differentiates itself on the basis of its products i.e. its designs, fabric quality, elegant taste of creatively designed home textile ranges in a vibrant palette of colors, patterns, textures and embroidery styles, product range and association with Gul Ahmed.

Four P`s AnalysisPRODUCT

IDEAS have got an expertise in textile products like lawn, chairman latha and linen. They also specialized in bed linen and curtains. They also diversify into fashion apparel like slippers, handbags, purses and kurtis. They outsource some of their products like toys, towels and bath accessories. Therefore IDEAS deals in different portfolio hence form its own niche. They offer large palette of colors and finesse of fabric to make their product stand out.

Product Attributes

Quality: - Quality of the product at IDEAS sums up all the features and characteristics that satisfy needs of their customers. Here by quality we mean the perceived quality of the product by the customer including the fabric’s purity, color palette, designs, embroidery styles and fabric according to the seasonal requirements.

Product Style: - Style refers to distinctive value proposition of the product. Up till now a continuous effort has been put up to let the customer identify the differentiated style of IDEAS products.

Product Variety: - IDEAS believe in innovation of new designs for which they have a team of highly skilled and trained designers who make sure to bring their best work to make it look differentiated.

Product Features: - IDEAS not only offers unique designs and motifs but also added features. They make high quality embroidered outfits depending on its formality and offers matching funky jewelry with the clothes.

Product Evaluation

IDEAS stand out because of their unique and exclusive product line with an idea of a complete home and fashion experience. As far as the product line is concerned they should increase their fashion apparel as their major competitor Chen One is getting a competitive edge in this category. They can do so by introducing new men shoes, suiting and ties etc. They need to be more focus on customers and more organized to respond effectively with changing customer needs.

PRICING

IDEAS have opted for the Product-quality leadership objective. They are providing ultimate value to their customers in the form of exclusive styles and designs of refined

fabrics. The product line variety, fabric and designs at premium prices are justified by the high quality being offered.

IDEAS PRODUCT PRICE RANGE

PRODUCT PRICE RANGEBED SHEET 450 – 2200 PKRQUILT COVER 695 – 3500TOWELS 150 – 595STUFF TOYS 245 – 1050BATH ACCESSORIES 475 – 950PHOTO FRAMES 360 – 990BEDDING ACCESSORIES 325 – 950WOMEN LAWN 975 – 1675KURTIS 595 – 2600BAGS 480 – 950SLIPPERS 400 – 800SIGNATURE SERIES (SHIRTS) 695 – 950MEN KURTA 850 – 1400SHALWAR SUITS (STITCHED) 950 – 1450

Price EvaluationIDEAS according to their image and positioning are charging premium prices for providing best quality products. Their design, fabric quality is very exclusive and unique and as they are targeting the affluent their pricing strategy is matching with its target market and image. But the problem is as they are moving towards middle class and other segments through GUL AHMED’S STORES. They are neither adjusting their product line nor their prices which could affect their desired results in terms of sales and profit.

PLACE

IDEAS is very choosy about its location and consider building an outlet a major investment this is the reason that they do not have too many stores in the city. IDEAS

choose the best locations for their stores which suits their image. They take location as their competitive edge.

Distribution Channels

IDEAS sells only through manufacture owned outlets; distribution is exclusive only to those outlets. Distribution plays an important role in functioning of a company and it can be described as the number of channel levels involved. Each level of marketing intermediaries that perform some work in bringing the product and its ownership closes to the final buyer is a Channel level.

A ZERO LEVEL channel is also called a Direct marketing channel consist of a manufacturer selling directly to the final consumer. It has no intermediaries level, it consist of a company selling directly to consumer.

Place Evaluation

The importance of places in which IDEAS carry their operations vary according to their locations. At Clifton branch there is no effect of lockouts and strikes but it will affect the sale of Bhadurabad branch. Mall timings will be a hindrance in case of IDEAS potential store at ATRIUM MALL because IDEAS have to open and close the store with mall timings which will affect IDEAS sales.

PROMOTION

IDEAS is using promotions tools effectively through number of sales promotion tools like discounts on shopping, lucky draws , free give away and wheel of fortune. Their sales promotion tactics change according to the campaigns like in Ramadan they give Sheri and Iftar coupons and dinner at Regent Plaza. They also do co-branding like in Eid-Fiesta they did with United Mobiles in which they give cell phones. They also do Co-branding with UBL and give special discounts to UBL credit card customers.

IDEAS use different channels for promotion and these channels also vary according to campaigns like in Open House Sale they use outdoor advertisement including mega billboards, pylons, flyers, vehicle branding, cotton banners, vertical pan flex banners, buntings, back lit and front lit panaflex signboards. They also use SMS marketing to inform their customers about new deals and events at IDEAS.

They do not use print media and TV advertisements because it is not an effective tool for them as they are not into mass marketing.

Promotion Evaluation

Currently IDEAS allocates around 3 to 4 percent of total sales to promotions which is reasonably well but as they are expanding they should increase their promotion budgets. At the moment they are not doing billboard advertisements effectively and are not into print media as well. Therefore they should make use of billboards and print media advertisement mediums more effectively.

IDEAS Marketing Systems

MARKETING INFORMATION SYSTEM

IDEAS lacks in gathering in proper information regarding marketing the campaigns and events because fashion retailing industry is in infant stage in Pakistan so they gather information by following competitors and some past experiences.

The tools they use to search market information is through Mystery shoppers, focus group, asking competitors sales staff and its local suppliers and vendors as they help in identifying the threats post by the competitors and the opportunities available in the market.

MARKETING PLANNING SYSTEM

After gathering all the required information about competitors, their campaigns and market opportunities they planned their events and campaigns for the whole year. These campaigns depends on different seasons, holidays and events like IDEAS classify their campaigns as Spring festival, Open house sale, Eid Fiesta and Bridal Basics. They also planned their promotional activities depending upon different events.

MARKETING IMPLEMENTATION SYSTEM

IDEAS try to implement their plans according to the event calendar. These events are also extended on customers` demand. Most of the time it happens that IDEAS campaign confide with the campaigns of Gul-Ahmed lawns.

MARKETING CONTROL SYSTEM

IDEAS control their campaigns through the detailed consumer surveys to check out the response about their campaigns and events and if IDEAS found any flaws in their planning or implementation they take measures to improve it so that the mistakes are not repeated in the future.

Competitors Analysis

PORTERS FIVE FORCES

Intense Segment Rivalry

Chen One and Bed & Bath are their intense rivals because of its same product line. Still the market is huge and has potential to grow but if Chen One opens more branches in Karachi it will pose a big threat to IDEAS. Right now competitors are not fighting for market share but they are trying to introduce new users to the market.

Fixed costs are high for coming up with an outlet like IDEAS. Chen One is the main competitor and a market leader. It offers equally attractive products and services, if buyers don’t get a good deal from IDEAS they will go to Chen One.

Threat of New Entrants

Entry barrier is high because of the high capital investment in the start while exit barriers are low making it an attractive segment. That is the reason we see few new firms entering in the industry and poor-performing firms can easily exit.Due to attractiveness and high profits margins in the retail industry many local textile manufacturers can enter into this segment and make their mark by offering more value and product differentiation.

IDEAS currently have not reached to that level at which it can pose threat to any potential entrant. Therefore any new entrant with huge capital can be a direct competitor to IDEAS.

IDEAS also have to keep in mind the entrance of international retailers like IKEA and NEXT in the Pakistani market as they can be a threat because of their cost efficiencies.

Threat of Substitute Products

Shopping malls and pocket size shops of the same category are substitute to IDEAS. As the customers traffic in malls like Park towers and Forum is usually very high and they provide customers with a huge range of variety under one roof with a lively environment and ambiance poses a threat in a way that people are more attracted towards these places and most of their competitors are located in these malls which is pulling force for the customers.There are potential substitutes for all the products IDEAS is offering. May it be lawn, cotton, kids wear, menswear, furniture, kitchen accessories, beddings, bathroom towels and co-coordinating accessories- everything is easily available in the local market at

affordable rates and satisfying quality. In this case substitution is easy and is viable, thus weakening IDEAS power.

Supplier Bargaining Power

IDEAS has very few number of suppliers for example packaging material, mannequins, promotional activities etc so the bargaining power of suppliers is not high in the case of IDEAS because they also cash on the name of Gul-Ahmed and they usually negotiate their terms with their suppliers.

Buyer’s Bargaining Power

Consumer is now more aware and his choices are unlimited as the competition is intense so it increases buyer’s bargaining power.IDEAS has slight advantage over its competitors in this regard because IDEAS products are highly differentiated they have unique and exclusive designs, best quality fabric of 400 thread counts which is rarely available in the Pakistani market.

ENTRY AND EXIT BARRIERS

Entry barrier is high because of the high capital investment, patents and licenses, scarce locations, distributors, raw materials etc in the start while exit barriers are low making it an attractive segment. That is the reason we see few new firms entering in the industry and poor-performing firms can easily exit.

EVALUATION OF COMPETITION

According to the Market share CHENONE is the market leader in this unsaturated market. IDEAS are market challenger to them but they are not following the strategies for a market challenger.Home and fashion retailing is at the infancy stage and is the most emerging industry of Pakistan. The market is huge and has potential to grow unlike the FMCG`s where there are so many counter attacks in retailing industry competitors are not fighting for each others market share but they are trying to make their own mark and become leaders in this industry. According to IDEAS Brand Manager at the moment they are least bothered about their competitor which is not a good ploy, they should keep an eye on their competitors and should conduct regular competitor’s analysis in order to capture the maximum market share and customer loyalty.

Recommendations

Recommendation For Strategic Level

IDEAS current strategies suggested us that they want to penetrate in the market and their focus is on volumes of sales that is why they are opening stores in middle class areas with the name of GUL Ahmed store and they want to grab the opportunity to cater the fastest growing segment in Pakistan in term of purchasing power i.e. the middle class. But their pricing and product line is same as they are for upper class our recommendation to IDEAS is that they should change the pricing of their product and adjust their product line according to the need of that segment so that they can achieve the high volumes of sales and become the market leader in that segment.

If IDEAS cannot adjust their prices and product line according to the middle class segment because of production cost or if they do not want to change their exclusive image for this we recommend Country wide expansion because we still believe that their is lot of growth potential in the upper class segment in other major cities of Pakistan.

Recommendation for Brand Equity, Loyalty and Customer care

To create customer loyalty IDEAS should introduce Loyalty card, customer care desk and maintain customer database to update customer for new arrivals and campaigns.

IDEAS can offer childcare services by providing play lounge in which they can provide big TV screen and bean bags where they can sit and watch cartoons so that their parents can shop with convenience and some were in the minds of customer it will create brand equity.

Recommendation for Communication Mix

Advertisement for new prints in lawn and cotton for men and women should be placed in “Sundays” of Daily Times, “Images” of Dawn and The News “Instep”.

The brand should not act as a follower, when it comes to promotion campaigns. The brand should go for designing and devising campaigns on its own.

BCG MatrixFor IDEAS

STAR

Beddings

QUESTION MARK

Herbal Soaps Curtains

CASH COW

Personal Wear

DOG

Furniture

IDEAS Growth Rate

Communication Mix BudgetADVERTISING BUDGET

OutdoorBillboard 35%Pylons 4%Pole Signage 4%Blow Up 2%Cotton Banners 4%Flyers 3%Point of sale advertising Buntings 2%In-Store Banners 2%Electronic media advertisingCables Advertising 6%

DIRECT MARKETING BUDGETCatalogues 1%SMS 1%

SALES PROMOTION BUDGETCoupons (dinner/lunch) 3%Lucky draws(DVD, Home theater system, Dubai return tickets) 29%Wheel of fortune 4%