ARCHIES-The Way Indians Greet

Group-3Rohit Mehrotra 08EM-036

Gagan Aggarwal 08EM-17

Ankur

Introduction Archies was established in 1979 by a Delhi Based person named Anil

Moolchandani and his brother Jagdish Moolchandani . In 1984 ,company launched its first outlet in Delhi named “Gift Gallery” . In 1987 ,the first exclusive Archies gallery was set up in Kamla Nagar,

situated in the heart of the Delhi University Campus. In 1990, the brothers established Archies Greetings & Gifts Pvt.Ltd.

with its three product lines i.e.Greeting card,gift items & stationary products.

In 1994, Anil decided to install a printing unit for the company and tied with the US based Gibson card manufacturing company.

In 1995, Archies was incorporated as a Public Limited Company with its initial Public offering of Rs.74 million.

Share of Revenue

Archies

Greeting Cards69%

Gift Items15%

Stationary16%

Archies StoresArchies Gallery First Concept Store opened by Archies, typically

500-1000 sq.ft in size

Archies- The Card Shop Smaller in size than the Archies Gallery.

Paper Rose Shoppe Shops with an area of 100-150 sq.ft. with around 85% of Archies merchandise.

Archies Feelings Chain of greeting card and gift outlets in th state of Gujarat.

Premium Archies

Galleries or Vision 2000

Stores

Exclusive Archies showrooms housed at prominent locations , spread over a lager area with lot more shelf space than the other outlets.

Critical Success Factor Archies sold its products through franchisees. The Franchisees made their own investment in the business and

paid royalty to Archies for turnover. Archies Quality Control team monitored the franchise stores for

ambience, space allocation, lighting and display. Divided the franchise operations into three segments. The Top-level franchises ran the Archies Galleries. The middle level franchisees ran the Archies Card shops and

paper rose shoppes. The bottom level, and smaller franchisees operated the feelings

and other retail outlets. Adopted “Localization” strategy and come out with the cards for

Indian festivals such as Holi, Diwali and Rakshabandhan.

Contd… Backed by aggressive promotional campaign to create awareness

and persuade people to communicate through cards. Successfully managed to built a strong brand Equity with its Tie-ups

with companies like Pepsi and Pidilite.

PESTEL FRAMEWORKPOLITICAL AND ECONOMICAL- New IT policies introduced. Increase in purchasing power.

SOCIAL- The society was adopting the western culture and ideas. The changing lifestyle of the people.

TECHNOLOGICAL- Use of internet for marketing. Use of internet as a means of networking.

ENVIRONMENTAL- Govt initiative to save on paper.

Strategic Move Archiesonline.com had three major sections –Meet, Greet and

Gift with following services : Meet- Free e-mail , chat , reminder services ,greetings

scheduler. Greet-A consumer interaction area where registered customers

could send and receive a variety of animated e-cards/greetings online.

Gift-Purchase gifts an get them delivered at their doorstep.

Tied-up with Elbee and Blue Dart to deliver the gifts and cards and with Easy Net.com for payment gateway.

Entered into strategic alliances with Yahoo.com, Jaldi.com, Indiagreetings.com to secure online penetration in various youth oriented portals by leveraging the Archies brand equity.

Contd.… Novel concept like e-crackers enabling surfers to burst pollution free

crackers and perform religious rituals. Portal claimed to have registered over four million page views and

programming of 0.15 million e-greetings in Sept 2000. Archies decided to revamp its distribution network and replace

existing distributors by a C&F agent network to push up the entire range of product into retail channel.

Shift from distributor to C&F agents cut costs as distributor margin was between 25-30% and C&F margin was only 12%.

Began exclusivity drive to have only Archies Gallery and Archies Paper Rose Shoppe as complete franchised outlet.

Increase number of Vision 2000 stores to bring in 40% more revenue.

Strategic Move Contd.. New franchisee contract included a clause that demanded

franchisee to commitment of 30-35% growth annually. Stores with prime locations were given minimum business gurantee

or commission on sale. Hoped to offset higher cost of owning retail infrastructure by

substantial saving in trade.

The Outcomes Discovered that the company made no monetary benefit and venture

was proving to be a drain. Decided to make archiesonline.com a paid site. Snapped ties with Yahoo and tied up with Indiatimes.com with a 50:50

agreement. Ran a nationwide ad-campaign to spread the idea of ‘equate e-cards

with fun’. Decided to treat online venture as an extension of its business. C&F agents were unable to exploit the market properly. Company appointed C&F agent for a particular territory who

appointed various area wise distributors. Took back all stock with distributor during conversion stage which

increased the inventory and therefore the working capital requirement forcing company to outsource funds and incur heavy interest burden.

Contd.. Investment in real estate went up as a result of new initiative of

Vision 2000 stores. As a result, the company’s revenue were Rs.804.7 million an

increase of 18% but the profit declined to Rs.75.3 million.

The Road Ahead Decided to focus more on gift segment. Make Archies gallery a ‘one stop gift shop’. Emphasis on outsourcing high end gift articles. Focus on corporate sector. Planned to launch a new range of economy cards (priced around

Rs.10) called ‘Heart Warmers’ for small towns. Plan to have 100 Vision 2000 stores which will contribute at least

40% to sales, C&F to contribute 40% to sales and the balance to come from distributors.

Thanks…