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Fabindia, Design, Products
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- a case study
Product planning, Strategy and Management
Presented byB.Karthika116130002M.Des (Product design) 2011-2013
‘How to leverage hand made products for business venture’
Fabindia was founded with the strong belief that there was a need for a vehicle for marketing the vast and diverse craft traditions of India and thereby help fulfill the need to provide and sustain em-ployment. They blend indigenous craft techniques with contempo-rary designs to bring aesthetic and affordable products to today’s consumers.
Their endeavor is to provide customers with hand crafted products which help support and encourage good craftsmanship.
Their products are sourced from all over India. Fabindia works closely with artisans by providing various inputs including design, quality control, access to raw materials and production coordination. The vision continues to be to maximize the hand made element in our products, whether it is handwoven textiles, hand block printing, hand embroidery or handcrafting home products.
fabindia - philosophy.....
34 countries
141 stores
511 Indian destinations
1000 crore turnover
Fabindia is India’s largest private platform for products that are made from traditional techniques, skills and hand-based processes.
Fabindia links over 80,000 craft based rural producers to modern urban markets, thereby creating a base for skilled, sustainable rural employment, and preserving India’s traditional handicrafts in the process.
fabindia - the company.....
1960 - Incorporation in Delhi
1976 - First retail store in GK
1977 - Contemporarizesdesign
1981 - Introduction of garments
1990 - Fiscal deficit reaches 8.5%
1991 - Indian economy opens up
1992 - Liaison with Habitat ends
1994 - Second store opens in Delhi
1999 - William Bissell becomes MD
2003 - Vision Plan I originates
2004 - Goes online
2005 - Vision Plan II is born
2006 - Garments make 70% revenue
2006 - 8% economic growth
2006 - Govt allows foreign single brandoutlets
2012 - Still growing and targets to reach
250 stores and 1000 crore turnover.
fabindia through the ages......
Primary motives
- Develop market for hand-woven products. - Provide rural employment apart from making profits.
Incorporated in 1960 in Delhi to export upholstery fabric.
By 1965, revenues of Rs. 2 million due to: - AS Khera, supplier of hand-woven rugs etc from Panipat - Habitat, major UK buyer of FabindiaPanipatproducts
1974 saw Fabindia’sfirst retail store in Greater Kailash with ad-hoc merchandising.
Habitat was acquired in 1992 and Fabindiacould no longer continueselling to it
John Bissell dies in 1998, passing the baton to son William Bissellwho becomes MD in 1999
fabindia under john bissell.....
‘Don’t get me wrong; I am not a bleeding-heart Liberal, rather a Libertarian. I don’t believe in charity or giving things out for free. I believe that the only way to allevi-ate rural poverty is to generate sustainable employment, and the only way to do that is if we run our business in a profitable manner. Yes, It seems contradictory that we pursue both a social goal AND profit but I believe that is the only way to do it.’
- William Bissell
fabindia under william bisell.....
End of license raj, and liberalization gave textiles duty concessions on machine imports.
Williams vision included expansion, depending less on exports and setting up retail operations
India saw robust economic growth, change in consumer patterns and growth of middle class by 2006
2003 saw the birth of Vision Plan I - Planned to grow to revenues of Rs. 1 b from Rs. 360 m in 4 years Achieved it in two years and Vision Plan II came along - It planned to achieve revenues of Rs. 2 b by March 2009.
Now, It targets to reach 250 stores and 1000 crore turnover by 2012
fabindia under william bissell.....
expanding the project range....
organic products
garments & fabrics
Furniture & Home furnishings
Started with 60 products when introduced in 2004. Today it has 200 different products which generate a monthly evenue of more than 5 million. It also promotes the brand as health and environment conscious which gives a direct message to the customers about the company’s principles.
One of the first retailers in India to offer ‘complete home solution’ which offered a one stop solution for their home needs. Fabindia furniture became a success due to their uniqueness, simplicity, functional and eco friendly nature.This sector claimed 60% of their annual profits.
Launched a full fledged range of garments catering to various users including Men, Women and kids of all age groups. The contemporary designs blended with uniqueness gave a massive appeal for a major crowd.
supply chain management....
Practice of inviting designers
Weavers and craftsmen also involved in the design process and made to interact with designers
Getting customer opinions and views
Sticking to their ‘green principles’
Importance on product innovation and diversification.
Suggested prototype developement project
We are promoting an alternate vision for the future; It is collaborative (with the suppliers) in the true sense of a word. It is participatory (with the customers that share our views).
design intervention.....
enriching the shopping experience......
premium stores
regular stores
concept stores
Premium stores house all the merchandise but mostly high end and exquisite.
Regular stores are for the fast moving merchandise and a wide variety and options are available in such stores.
Concept stores have very few merchandise but they predominantly function for the testing of certain products in the market, hence very few options.
advertising - is it necessary?
The products have an intrinsic value proposition as opposed to imposed value. It is due to this intrinsic value of our products we never felt the need to advertise. While we will announce the opening of a new store in the local newspaper, we never spend on ads per sec.
- William bissell
Strengths
1.Strong Pan-India presence andawareness2.Man-power expertise3.Competitive Pricing4.Robust supply chains and shortproduct development life cycles5.High marketing communicationsspend6.Quality consciousness andadherence to standards
Weaknesses
1.Product diversity lacking2.Stock as per running trends andserve to fads-inconsist-encytowards churning out qualityofferings in hand crafts3.Authenticity of handcrafts-No craftsmark present to validate thecrafts as against the Fabindiaofferings which have the sameimprinted on them
competitor - organized retail
Shopper’s stop, Pantaloons, Globus etc
Strengths
1.Source of finances is fixed and subsidies boost these initiatives over time2.Tie-ups with foreigngovernments facilitatingpermanent trade of nationalhandicrafts.
Weaknesses
1.Ambience-non-attractive tomodern day shoppers are fed on the excellent ambiences of theretail formats.2.Standardization defeatscustomization hands-down.
competitor - govt. initiatives
Cottage Industries Emporium, KhadiGram Udyog, State Government Department
Strengths
1.Product customization facilities-extremely high2.Highest level of customer intimacy Relationship marketing
Weaknesses
1.Exorbitant prices-notmeant for masses2.Not a robust supply chain-not meant to be a pan-India operation
competitor - designer boutiques
Ritu Kumar’s, Ritu Beri’s, Rohit Bal, ManishMalhotra, Sabyasachi Mukherjee, etc
Strengths
1.Effective in addressinghigh geographicaldispersion2.Customization facilityavailable
Weaknesses
1.Source of finance-not secure2.Next-to-nil brand equity3.Customer loyalty-low4.Scarcity of skilled manpower- lack of ability to employ the same which is critical for expansion
competitor - unorganized sector
Mom and pop stores and local tailoring units.
Strengths
1.Strong commitment towardslocal communities2.Helps in making its clientsself-reliant3.Encourages womenentrepreneurs and hence awomen can supplement themales income towards a family
Weaknesses
1.Lack of expertise on partof the manpower2.Lack of ambition tospread out on a pan-Indiaor even a regional basis3.Lack scales of economy
competitor - NGOs & SHGs
Quintessential Indianness in fabric through the years
- Popular for authenticity of hand-woven fabric
Sourcing system from rural India - Strong supplier relationship - Provision of capital loans(in agreement with banks) - Leniency on order fulfilment & no-return policy - 100% use of supplier’s capacity
Sustainable employment opportunities to rural skilled poor
Employees are given autonomy and hence inducing accountability
Focus on customer retention instead of generation - Large chunk of buyers are repeat purchasers - Product quality improvement done keeping this in mind
Word-of-mouth strong enough not to require any advertising
Strengths of fabindia.....
Quintessential Indianness in fabric through the years
- Popular for authenticity of hand-woven fabric
Sourcing system from rural India - Strong supplier relationship - Provision of capital loans(in agreement with banks) - Leniency on order fulfilment & no-return policy - 100% use of supplier’s capacity
Sustainable employment opportunities to rural skilled poor
Employees are given autonomy and hence inducing accountability
Focus on customer retention instead of generation - Large chunk of buyers are repeat purchasers - Product quality improvement done keeping this in mind
Word-of-mouth strong enough not to require any advertising
Delays in delivery from artisans - Opportunity losses due to irregularity - Difficult to predict quantity and time of thaancoming from weaver - also arises as different stores are encouraged to order different stock
Insignificant spend on marketing communications - Losing out on attracting new customers instead of depending only on repeat purchase
-Not enough personnel to push Fabindiato greater growth Unavailability of people experienced in retail sector - Unavailability of people believing in the same mission - More formal processes would face resistance from existing employees
Untimely delivery of products - Transport, storage and shelf-life issues of organic foods - Suppliers were spread pan-India
Weaknesses of fabindia.....
Unorganized local operators - Handloom retail shops/chains in regional pockets - Souvenir shops providing indigenous products at lower prices
Entry of organized brands and companies into retail - High expected growth & entry of business houses in large ways - Competitors access funds from conglomerate partners or markets
Tilt of Indian consumers towards foreign brands - Foreign brands alter lifestyle choices of the target market - Imported or designer home furnishings have greater flaunt value vis-a-visFabindia
Development of government co-operatives - Boost in future to KVIC and state handloom units - Improvement in their ambience and shopping experience
Rising prices of real estate could hamper growth
- Opening new stand-alone stores will be tough
-Experimenting with formats and markets may not be advisable
Threats....
Latent potential of organic foods market: - Leveraging changing consumer tastes & perceptions
- Awareness generation of merit in these foods
Utilize multi-brand retail outlets and construction groups - Display of Fabindiaproducts in MBOs and department stores
- Leverages footfalls of the store, increasing likelihood of sales - Use of Fabindiahome furnishings in modular flats of buildings
- If consumer buys this flat or any other, and is impressed, will use Fabindiafurnishings
Leveraging Web 2.0 tools and techniques - Tying up with matrimonial sites for designer fancy wedding wear - Interactive website for designing as per individual requirements
- Customization level is high
- Lead time between fixing of occasion date and event can be used fordelivery
Opportunities.....
Thank you for your time! :)
The solution does not always lie in advertising or the communication. Innovation can be at any level, you need an eye to identify what that innovation would be and how easily it can be encashed upon in the most interesting yet engaging manner.