ANAND ENGINEERING COLLEGE KEETHAM, AGRA

CERTIFICATE

This is to certify that marketing project report entitled “STUDY OF SHOE INDUSTRY AND SEGMENTATION FOR INTRODUCTION OF NEW COMPANY” which is submitted by MOHD. ADIL KHAN, MAYANK SONDHI, MEENAKSHI SHARMA, MANISH SHARMA AND MAIDAN SINGH in partial fulfillment of requirement in internal assessment for B.B.A. second year in Department of Management Studies of Anand Engineering College, Keetham, Agra is a record of the candidates own work carried out by them under my supervision. The matter embodied in this project is original and has not been submitted by any other for internal assessment.

Project Guide & Coordinator

Name- Mr. Bhanu Pratap Singh

Signatures-

Date-

ACKNOWLEDGEMENT

The architecture of success stands on a strong foundation made up of strenuous hard work, determination, presence of mind and above all timely advice from the learned and experienced people. This word of acknowledgement is to express our deep sense of gratitude to all those luminaries and unseen hands without whose support the completion of this dissertation would not have been materialized.

Our deepest thanks to lecturer Mr. B.P. Singh the guide of the project for guiding and correcting various documents of ours with attention and care. He has taken pain to go through the project and make necessary corrections as and when needed.

We express our thanks to the Sales Manager of BATA Mr. Rakesh Shukla for extending his support.

Our deep senses of gratitude to Dr. Mayank Gaur (M.Sc. Agri. M.B.A. Mkt. & Ph. D. Soil sci.) Lecturer Dept. of Soil Science R.B.S. College Bichpuri and Mr. Pradeep Pathak Asst. Area Manager of N.C.M.S.L. Mumbai for their support.

We would also thank my Institution and my faculty members without whom this project would have been a distant reality. We also extend my heartfelt thanks to our families and well wishing friends.

ABSTRACT

In our project we have tried to make a detailed study of shoe industry and segmentation for introduction of new company.

This study is done to know the market conditions and market segmentation of shoe industry.

In our project we have told about the shoel market, its nature and characteristics, market conditions and segmentation.

DECLERATION

We hear by declared that this project report entitled “STUDY OF SHOE INDUSTRY AND SEGMENTATION FOR INTRODUCTION

OF NEW COMPANY” submitted by us is based on actual work carried out by us under guidance and supervision of Mr. Bhanu Pratap Singh. Any preferences to work done by any other person or institution or any other material obtained from other sources have been duly cited & referenced. It is farther to state that this work is not submitted any were else for any examination.

Name of students Roll No. Signatures of students

MOHD. ADIL KHAN (81336)

MAYANK SONDI (81334)

MEENAKSHI SHARMA (81335)

MANISH SHARMA (81333)

MAIDAN SINGH (81332)

INTRODUCTION

Shoe business is huge and increasingly diversified business driven by a host of demographic lifestyle, and fashion trends. It would not be exaggerating to say that globally the shoe industry is having expanding market rather it is axiomatic. As the world population increases so the living standards of people rise thus increasing the demand of shoes.

The shoe market consists of the total revenues generated through the sale of all type of men’s, women’s and children’s shoes. The global figure includes the Americas, Asia Pacific and Europe. Americas consist of Brazil, Canada, Mexico and US, while Asia pacific consists of Australia, China, India and Japan. Europe comprises of Czech Republic, France, Denmark, and Germany etc.

According to the report published by SATRA, Asia including India Subcontinent is the largest market for SHOES in terms of consumption. Next to Asia is Americas and then followed by Europe and rest of the world. In monetary terms the market shows a different picture as Asia lies behind Europe and North America but irony to the situation is that Asia is the leader in terms of shoes consumption and market. It is merely because of the population density in the Asia.

China is the largest producer and exporter of shoes and it is also the biggest consumer of footwear by virtue of the size of its population. Overall the shoe production is highly concentrated in Asian market and the consumption in the US and European market.

According to SATRA (Shoe and allied trade research association, UK) the global trend of footwear industry are as follows.

Consumption

(Millions of pairs)

1998 2000 2002 2004 2008

Asia (all) 4744 5222 5474 5840 6528

Americas 3011 3274 3279 3433 3611

Europe (all) 2239 2396 2544 2717 2886

Rest of the world

1086 1187 1172 1317 1399

Total 11080

12079 12469 13307 14424

INDIAN SCENERIO

The Footwear Industry is a significant chunk of the Leather industry in India. India ranks second among the footwear producing countries next to China. The industry is labor intensive and is concentrated in the small and cottage industry sectors. While leather shoes and uppers are concentrated in large-scale units, the sandals and chappals are produced in the household and cottage sector. India produces more of gents’ footwear while the world’s major production is in ladies footwear. In the case of chappals and sandals, use of non-leather material is used to manufacture these in the domestic market.

The industry is on the edge of adopting the modern and state-of-the-art technology to suit the exacting international requirements and standards. The Indian Footwear Industry is all set for leveraging its strengths towards maximizing benefits.

Strength of India in the footwear sector originates from its command on reliable supply of resources in the form of raw hides and skins, quality finished leather, large installed capacities for production of finished leather & footwear, large human capital with expertise and technology base, skilled manpower and relatively low cost labor, proven strength to produce footwear for global brand leaders and acquired technology competence, particularly for mid and

high priced footwear segments. India has the competitive advantage over other countries in the form of materials and skilled manpower.

The footwear industry exists both in the traditional as well as modern sector. While the traditional sector is spread throughout the country with clusters of concentration catering largely to the domestic market, the modern sector is largely confined to selected centers like Chennai, Ambur, Ranipat, Agra, Kanpur and Delhi with most of their production for export.

Assembly line production is organized, and about 90% of the workforces in the mechanized sector in South India consist of women. In fact, this sector has opened up plenty of employment opportunities for women who have no previous experience.

Presently the key players in Indian market are Bata, Adidas, Liberty, Action, Relexo, Reebok and NIKE.

SHOE INDUSTRY – PEST ANALYSIS

Political

• Recent merger between Adidas and Reebok.

• Home market lobbying/pressure groups.

•Very few sporting events apart from cricket fixtures to attract customers.

Economic

• Marginal share of 2.44 percent in global trade worth US$ 97.606 billion.

• Estimated target of 12 bn $ (7bn $ export + 5 bn $ domestic) trade by the year 2012 overseas economies and trends.

• The Indian footwear retail market is expected to grow at a CAGR of over 20% for the period spanning from 2008 to 2011. Footwear is expected to comprise about 60% of the total leather exports by 2011 from over 38% in 2006-07.

• Growing middle class and growing buyer power leading customers to look for branded shoes.

• Seasonality issues – sports is more of a rage in summers.

• Lack of targeting of market segments for kids and women.

Social

•Lifestyle trends – upward shift.

• Demographics

• Consumer attitudes and opinions changing favorably towards branded shoes

• Media views

• Consumer buying patterns

• Fashion and role models

• Buying access and trends

• Advertising and publicity

Technological

• Competing technology development

• India offers benefits like low cost of production, abundant raw material, and a huge consumption market

• Research funding in design and requirements

• Manufacturing maturity and capacity

• Information and communications

• Consumer buying mechanisms/technology

• Innovation potential

• Technology access, licensing, patents

SWOT ANALYSIS OF SHOE INDUSTRY

StrengthsExistence of more than sufficient

productive capacity in TanningEasy availability to Export Market

Export Friendly government policies

Well established linkage with buyers in EU and USA

WeaknessesEnvironmental Problem

Delay in delieveriesUneconomical size of manufacturing units

Non availability of quality footwear components

Little Brand Image

OpportunitiesDe-reservation of the footwear

sectorGrowing fashion consciousness

globallyGrowing international and

domestic marketUse of modern technology

Exhibit strengths in manufacturing ,eg. strength in

classic shoe manufacturing

ThreatsEntry of multinational in domestic

marketStiff competition from other countries

Limited scope for mobilising funds through private placement and public

issues,as many business are family owned

MAJOR PLAYERS IN SHOE MARKET

PUMA NIKE WOODLAND

ADIDAS BATA RELAX0

LIBERTY ACTION

COMPANIES PROFILE

ADIDAS:

Adidas ltd is a German sports apparel manufacturer and part of the Adidas group, which consist of Reebok Sportswear Company, Taylor Made-Adidas Golf Company, and Rockport.

Adidas is the largest sportswear manufacturer in Europe and the second largest sportswear manufacturer in the world.

Company’s revenue for 2006 was listed at about US $ 13.625 billion and the 2007 figure was listed about $ 15.6 billion. It has more than 170 subsidiaries guarantee marketplace presence for Adidas products around the world.

Liberty:

Liberty shoes ltd. is a leading leather shoes brand and is engaged in the manufacturing, supplying and exporting of the footwear’s. It is the only Indian leather shoe brand that occupies fifth ranking among the top shoes manufacturing companies in the world.

Reebok:

Reebok specializes in the design, marketing and distribution of sports and fitness products including footwear, apparel and accessories, as well as footwear and apparel for non-athletic use.

The company has three main product categories: Rbk, Performance, and Classic. Each of these product categories features product offerings for both men and women that are designed for specific consumer groups. Reebok has operations in the UK, Europe and in various and in various Asian countries. It is headquartered in canton, Massachusetts. The acquisition of Reebok by Adidas-Salomon was completed in January 2006.

Bata:

Bata industry is a specialized division of the world’s largest shoe manufacturer: the Bata shoe Organization (BSO). Bata industries have operations and production facilities in most of the countries worldwide. Bata India Limited is the largest footwear retailer in India. Bata India is a manufacturer of footwear. Types of footwear offered by the company include rubber, canvas, leather and plastic footwear. The company also markets apparel under the brand names of North Star, Power and Ambassador. Bata India has five manufacturing plants and

acquires its leather from two tanneries in Mokamehghat (Bihar) and Batanagar. It is headquartered in West Bengal, India.

INTRODUCTION OF NEW COMPANY IN SHOE MARKET

Company Name- COX

“Comfort

Occult

Xtraordinary”

Company Logo-

“be AheAd”

COX SHOES

“If your feet is in your shoes, You can steer yourself IN ANY DIRECTION You choose, You are on your own, and

You know what you know, you are the guy who will decide where to go.”

EXECUTIVE SUMMARY

We know that a person can be best described with his shoes. we have come up with a unique and simple product COX SHOES .These days in our hectic lives, we face a general problem of bad odour from a pair of shoes worn by us for long duration .People sitting close to us or in our nearby surrounding start getting irritated as well as they get bad smell that is more than difficult to bear up. So, to overcome this problem we have come up with a solution for you – “COX SHOES”. Cox shoes avid range of fragrance pad gives the consumers a varied range to choose from. (The inner part of fragrance pad is so designed that it will fit only to COX shoes) Cox shoes feature of acupressure will not only seek to health problems but also dilutes problems of leg sprains and muscle strains. Additional materials like KELVAR have been used to enhance the quality. As this is a new product with new additional features of fragrance pad and acu pressure points in the sports shoes for the first time, so reasonable Price is set based largely on competitor’s price, by comparing quality, and features. Our product is compared with products in upper middle and lower middle category i.e. with Adidas, Nike, Action, Reebok etc… also As the product has special feature like acupressure points and fragrance pad it will be characterized by high level of perceived quality and features with price just high enough but not out of customer’s reach. Determining all these factors

Price range of product: Rs1500.00 to 4000.00 is set. Promotion mix like

Advertising, Sales promotion, Direct marketing and Public relation are used to build a brand image and increase the sales volume. Distribution channels like zero-level, 1level and 2 –level has been selected for the product to reach the entire targeted segment.

ABOUT THE PRODUCT

COX shoes behave like an extension of the foot, which is a complex structure of bone, muscle and fatty tissues.

Cox shoes provide the user with a comfortableness and uniqueness to the maximum.

Cox shoes avid range of fragrance pad gives the consumers a varied range to choose from. (the inner part of fragrance pad is so designed that it will fit only to COX shoes).

The fragrance provided with the shoes will save the user from embarrassments arising from bad odour.

Cox shoes feature of acupressure will not only seek to health problems but also dilutes problems of leg sprains and muscle strains.

SEGMENTATION

Geographic

City: More focus on metro cities because people believe in trying innovative, new and better products.

Demographic:

Age: 14 years and above.

Gender: Male and female both.

Income: earning above Rs 20000 thousand P.M.

Occupation: Students, Athletes.

Psychographic:

Socio-economic: Upper-middle and Lower-middle.

Life-style: Sport-oriented, outdoor oriented.

Behavioral:

Benefits: Quality, service, after sell service.

User status: Non user, potential user, first time user.

BIBLIOFRAPHY

www.nike.com

www.bata.in

www.libertyshoes.com

www.adidas.com

www.actionshoes.com

www.relexofootwear.com

www.bigshoebazaar.com

www.scrbd.com