Global Fashion Skills Collaborative Networks UK/India Perspectives

Global Fashion Skills | Collaborative Networks | UK/India Perspectives: Case Studies and Research for Future Business Growth

Global Fashion Skills Collaborative Networks UK/India Perspectives: Case Studies and Research for Future Business Growth

Editor Contributors Sarah Atkinson Lynne Hammond

Hannah Middleton

Karinna Nobbs

Bill Webb

Simran Gandhi

Rupali Grover

Anjuna Parasha Dhir

Rekha Dar

Anuradha Modak Debnath

Anshumaan Tyagi

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Acknowledgements Contributors.

Contents

Section 1

Page No

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Introduction Lynne Hammond

Section 2

Case studies UK and India

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Superdry Karinna Nobbs and Bill Webb Wills Lifestyle Rupali Grover, Shamila Katre, Rekha Dar Section 3

Post graduate student research projects

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Evaluation of the Significance of Social Media on Luxury Brands in India Simran Gandhi An Exploration of Market Entry Methods and Critical Success factors for High Street UK Fashion Brands to Maintain a successful Presence in India Anshumaan Tyagi Section 4

Research papers and essays Complex Consumer Culture – The Indian Customer Rehka Dar, Anurahda Modak and Anjuna Dhir Sustainable Buyer Relationships – UK India Perspective Lynne Hammond and Rehka Dar

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Harnessing Academic and Industry Collaborations to Enhance Fashion Retail: Internationalising Teaching and Research Karinna Nobbs, Hannah Middleton, Sarah Atkinson, Rekha Dar, Shamila Katre, Anuradha Modak Section 5

Student projects

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UKIERI – Student Project Summary Hannah Middleton Analysing the Indian Luxury Consumer Astrid Phillipson, Clara Bergdahl, Emma Ulstrom Mulbery Company Profile Astrid Phillipson, Clara Bergdahl, Emma Ulstrom

Acknowledgements We would like to thank all of the contributors to this publication, the team at London College of Fashion, Pearl Academy and the British Council for their hard work and enthusiasm in successfully realising this project.

Contributors Dr Lynne Hammond is Director of Programmes Business and Management Graduate School at London College of Fashion. Her role includes transferring knowledge concerning global supply chains, international employability, best practice in teaching and learning and how to embed ethical and sustainable practice into the curriculum and the industry. Her expertise ranges from training and business development for the fashion industry, collaborative management strategies, international project management, business strategies and entrepreneurship management.

Anshumaan Tyagi is a Marketing Strategy graduate from London College of Fashion. He has previously worked with Ted Baker, Pepperfry, Iconemesis and Future Brands. His main area of research has been in understanding international expansion for fashion brands,

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recognising target audiences and markets, identification of local partners and the use of localisation strategies to attract target customers.

Associate Professor Anuradha Modak Debnath is an Associate Professor at Department of Business, Pearl Academy. She is pursuing her PhD from Aligarh Muslim University. Her topic of thesis study is “Consumer Satisfaction and Repurchase Intentions towards Select Luxury Brands in India". She has published many research papers in the area of luxury consumer behaviour. She teaches Fashion Marketing, Fashion Consumer behaviour and Luxury Brand Management to Post Graduate Diploma level students. She is currently a UKIERI Project leader and is also actively involved in taking industry workshops for brands such as Adidas, Numero Uno, U.S Polo, The Collective (luxury MBO store at Delhi) in the area of customer handling and engagement.

Professor Rekha Dar has been associated with the Apparel Industry for more than 21 years as Head of Sourcing for Gap Sri Lanka & Benetton and many other European Brands. Her areas of expertise are: Domestic & Global Sourcing, Costing & Supply Chain management especially CSR & Ethical business initiatives in the Indian Apparel Industry.

Involved in UKERI projects in partnership with London College of Fashion “Mapping Employer engagement in Fast Fashion and Using It as a Tool” to deliver skills required in Global Supply Chain” and “Global Fashion Skills Collaborative Networks: Up skilling for Future Business Growth.” She is part of FE initiatives of the Pearl Academy to train the future executives in the Indian apparel industry.

Associate Professor Anjuna Parasha Dhir is Associate Professor with Pearl Academy. A marketing Professional with research interests in arts, crafts and sustainable collaborative practices, she is a keen observer of the behaviour exhibited by Indian consumers in different circumstances across various socio-economic segments. Her Doctoral thesis is in the area of ‘Tourist shopping’. She has over 20 years’ experience in work areas spanning advertising and promotion, retail, shopping malls, craft promotion, and academics, with academics being the common thread all through. She is highly enthused by digital media and its myriad possibilities, this being her latest area of development and expertise.

Rupali Grover is a student of MA Fashion Marketing at Pearl Academy, New Delhi. Her research interests lie in the field of studying international brands and decoding the success factors that work in the Indian market. She has worked on projects relating to identification of target audiences and strategies to attract target customers.

Simran Gandhi is marketing manager at a UK based fashion house. She specialises in the field of fashion marketing and completed her postgraduate degree at London College of Fashion. In addition to her full time career in the field of fashion, she also focuses on working with NGO’s in her home country of India.

Sarah Atkinson is Chief Examiner and Academic Advisor for the University of the Arts London Awarding Body. She has over twenty years’ experience working in further and higher education, designing new curriculum, delivering and managing courses in fashion, 3

art and design at all levels. In addition to her work with the University Awarding Body she also contributes her expertise as an academic consultant with International Partnerships Development at London College of Fashion, working to establish collaborative partnerships with educational institutions worldwide. Sarah has travelled extensively supporting curriculum development in Fashion at institutions in Europe, Central Asia and the Far East.

She is currently project managing the UK India Research Initiative with LCF and Pearl Academy Delhi working closely with the teams involved with delivering the UKIERI project in both India and the UK. Hannah Middleton has over 20 years experience working as a fashion buyer in the UK and with retailers in the Far East, France, India and Spain. Her expertise working in fashion retail has given her the opportunity to collaborate with numerous international brands, designers and retailers in the capacity of buying and product development. She has worked on the successful launch of three new fashion ranges and has extensive knowledge on the setting up, branding and marketing of new fashion brands. She teaches at London College of Fashion for the School of Management Science on the BA (Hons) in Fashion Management and MSc International Fashion Management. With a particular interest in the globalisation of fashion retail she is currently researching into the changing role of the buyer in the international arena.

Karinna Nobbs is Programme Director for the MA in International Fashion Management at London College of Fashion. She has worked for United Colours of Benetton, Kookai, House of Fraser and Ralph Lauren in the fields of fashion retail, PR, visual merchandising and buying. Karinna lectured in International Fashion Branding at Glasgow Caledonian University for ten years during which time she developed her international research and consultancy experience in the areas of speciality retail formats, visual merchandising and integrated marketing communication. Recently she has focused her research on visual social media from a brand management perspective. Karinna has presented her research output at over 100 academic and industry conferences globally and has published in peer review journals on the topic of flagship stores. In May of 2014 she launched her book on Fashion Management in conjunction with authors from Antwerp School of Management and Bocconi University.

Bill Webb has worked as a Senior Lecturer in retail management at London College of Fashion for over eighteen years. His experience in industry spans line management to director level for one of the UK’s largest retail chains. He has been a management consultant in over thirty countries worldwide and has lectured in retail to post graduate level. Bill has a Lifetime Achievement Award for contribution to the global retail industry (Asian Retail Association 2011), and has been on the judging panel for the UK Retail Awards on a number of occasions.

Disclaimer The essays and case studies in this publication have been produced for an educational context and the information contained may not be entirely accurate. Image reproduction permissions have been sought where possible.

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Section 1 - Introduction Lynne Hammond

This booklet provides a set of research outputs that have been developed by staff and students from London College of Fashion and Pearl Academy educational institutions.

Throughout the life span of the three-year project the focus has been on developing our knowledge of India/UK Fashion Industry challenges. These challenges have been investigated through macro and micro insights into current business practices by both UK and India brands and retailers. The booklet is aimed at companies, teachers, trainers and students who need to explore and examine the theoretical and practical nature of international market entry methods, international retail developments and international marketing strategies.

Working in partnership with two academic institutions has provided consumer insights, market intelligence and business models that would not have been possible without these types of collaboration and knowledge exchange. Without the UKIERI funding, it would not have been possible to deliver student/staff exchanges that have resulted in types of resources and a booklet that captures real time information and stories.

The booklet is structured into five sections and provides case studies and research papers/essays that could be used for teaching and learning and for internationalising the curriculum. The different research outputs presented in this booklet address the need for greater understanding of the factors that influence successful market entry and international retailing/brand strategies between India and UK. For companies to stay competitive in these two markets, better partnerships and co-operation to enable long-term growth and development will be required. From the knowledge presented in this booklet it appears that for successful market place entry and presence to happen that collaboration management is critical to brand equity and business performance. More research needs to be undertaken on the concepts of collaboration and co-operation to manage change and develop trust and leadership skills in the future.

About the Project The structure of the fashion and textiles sector has been impacted more than any other sector by the onset of globalisation. UK retailers and manufacturers have to manage complex supply chains due to a number of factors. Globalisation enabled by the dismantling of trade barriers, along with lower communication and transportation costs, has seen lower value added manufacturing outsourced to low-cost nations. Indian suppliers are having to reskill and upskill their workforces to compete and manage the partnerships and networks that are now emerging as a way of growing their businesses. This has transformed the way businesses operate in order to gain competitiveness within the global market place.

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Key drivers of skills demand:  Growth of fast fashion and technical markets  Adaptation to changing technology  Image of the sector  Sustainability agenda (Sector Skills Assessment for the Fashion and Textile Sector in the UK, January 2010) Project Aims The skills needed to compete under these conditions require knowledge and understanding of the key drivers of change and the need for new business processes and practices, such as collaboration practices, networking and clustering, and professional communication techniques. To achieve these a holistic approach is needed that will bring together employers, industrial bodies and training/education providers to create impact and to sustain the national and local strategic challenges.

The key objectives of this project were as follows:   

To develop infrastructures to manage professional skills development awards and programmes to enhance employer and education engagement (Year 1) To develop a set of competences and curriculum tools that meet the changing nature of the global fashion industry in relationship to supply chain processes and international collaborative management and business models (Year 2) To develop a set of guidelines and/or handbooks that capture the knowledge and understanding for dissemination to other training providers in the UK and India (Year 3)

About UKIERI - http://www.ukieri.org/ The UK India Education and Research Initiative (UKIERI) started in April 2006 with the aim of enhancing educational links between India and the UK. In the last five years, UKIERI has played a pivotal role in establishing a step change in the educational relations between the two countries. In recognition of the substantial achievements and building on the success of this initiative, the programme has been extended for 5 years from 2011 to 2016. The extension was announced by the UK Prime Minister David Cameron and Indian Prime Minister Dr. Manmohan Singh in July 2010.

Both governments have confirmed funding for UKIERI and the programme aims to now deliver systemic change by reaching out to larger numbers. It will also provide opportunities for professional and leadership development of schools, higher education institutions and vocational institutions, support partnerships and develop student mobility and skills development programmes.

(Note: taken from UKIERI web site) 6

About London College of Fashion - http://www.arts.ac.uk/fashion/ London College of fashion’s rich heritage, and responsiveness to changes in design practice, has positioned it as a leading provider of fashion education, research and consultancy.

The college’s work is centred on the development of ideas. Its staff and students use fashion alongside historical and cultural practice to challenge social, political and ethical agendas. A forward-thinking business management portfolio, and relationship with the global fashion and lifestyle industries, reinforces the college’s mission to “Fashion the Future” About Pearl Academy of Fashion - http://www.pearlacademy.com/ Pearl Academy of Fashion (PAF) is a pioneering Institute of Fashion and Design imparting quality and innovative Education. Promoted by House of Pearl Fashions Ltd., one of India's largest export houses, PAF functions under the aegis of Creative Arts Education Society, a Society registered under the Society's Registration Act 1860.

Our objective is to train professionals with a comprehensive range of cognitive and intellectual skills, planned to develop across a wide range of learning experiences.

The Academy enjoys very high employability among reputed organizations and a high status as India's most prestigious provider of education & training for the fashion and related sectors. A number of PAF alumni are in key positions in the industry all over the world. The Academy takes pride in its high calibre faculty, outstanding track record in student exchange, international networking & placement.

The Academy has been able to grow steadily over the last decade or so, primarily on the foundations of its professionally trained faculty members, who have rich industry experience and are committed to continuing research and development. Being one of the finest institutes of fashion technology, our teaching is supported by the latest machinery, equipment and facilities. Besides this our activities and operations are closely linked with some of the best institutions in the world, as well as the industry.

About the UKIERI UK/India Collaborative Research and Project Team LCF Sarah Atkinson Project Co-ordinator s.j.atkinson@arts.ac.uk Liz Gee Course Director International Masters Fashion Management l.gee@fashion.arts.ac.uk Andrew Hughes Dean Management and Science School a.hughes@fashion.arts.ac.uk Lynne Hammond Director of Programmes Business & Management Graduate School l.j.hammond@fashion.arts.ac.uk Hannah Middleton Lecturer Fashion management and Merchandising h.middleton@fashion.arts.ac.uk 7

Karinna Nobbs Programme Director MA Strategic Fashion Marketing k.nobbs@fashion.arts.ac.uk Edwin Phiri Course Director Foundation Degree Fashion Marketing and Promotion e.phiri@fashion.arts.ac.uk Heather Pickard Director Under Graduate Programmes Business & Management h.pickard@fashion.arts.ac.uk Bill Webb Business and Marketing Consultant b.webb@fashion.arts.ac.uk Michelle Dorrington Project Administrator m.dorrington@fashion.arts.ac.uk Pearl Academy Nandita Abraham Marketing Director nandita.abraham@pearlacademy.com Rekhar Dar Lecturer Supply Chain & Manufacture Relationships rekha.dar@pearlacademy.com Anjuna Dhir Lecturer Visual Merchandising anjuna.dhir@pearlacademy.com Anuradha Modak Lecturer Branding and Marketing anuradha.modak@pearlacademy.com Sharmila Katre Head of Business sharmila.katre@pearlacademy.com Sunita Gupta Lecturer Economies sunita.gupta@pearlacademy.com

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Section 2 – Case studies UK and India UK Case Study - Superdry Karinna Nobbs and Bill Webb Introduction and History This case study is based on the Cheltenham (UK) based SuperGroup organisation, best known as the owners and operators of the SuperDry brand. The group floated its shares on the London Stock Exchange in March 2011 and is now occupied with developing and protecting its brand, extending its distribution network including expansion into a growing number of international markets, growing its IT and HR functions to support a rapidly expanding business and consolidating its customer base. Expert opinion is divided about the future prospect of the business, as is evidenced by the volatility of its share price since the float. The aim of this case study is to outline five key areas of the business for further discussion; financial performance, design and product range, retail distribution, brand and marketing and lastly CSR SuperGroup owes its existence to two men – Julian Dunkerton and James Holder who merged their skills and experience to launch a unique and dynamic brand. Aged 19, Dunkerton found himself unemployed in the early 1980s and, to supplement a £2,000 family loan, applied for funds to start his own business. With a meagre £40 a week to live off as well as start the venture Dunkerton rented a market stall in Hereford (soon moved to Cheltenham) and started selling leisure clothing under the Laundry Athletics name. By the late 1980s the young business had opened its first retail shop in Cheltenham trading under the Cult Clothing name. This concept sold both group own-brands products and contemporary “cool” 3rd party brands such as Bench and Carhartt to a target group of, mostly young male customers. Further stores quickly opened in the university towns of Oxford, Birmingham, Cambridge and Edinburgh. In 2003 Dunkerton was joined at the company by Julian Holder, founder of the Bench brand together they resolved to launch their own brand. Holder was appointed Brand & Design Director, and the two men took off to Tokyo looking for inspiration. In December 2004 the first Superdry store was opened in London’s Covent Garden selling the company’s new own brand. Around the same time a third partner, Theo Karpathios joined the firm, bringing with him wholesale skills and contacts so that serious wholesale distribution of the brand, both at home and internationally started that year too.

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Financial Performance SuperGroup has been one of the best performing UK fashion firms in recent years, it has defied the recession and produced impressive trading results by exploiting a clearly focussed niche market. Impressive as the results are, it should still be recognized that overall market share is still very small. It is relatively easy to produce impressive percentage statistics on small base numbers but much harder to maintain them as volumes grow. Over 80% of group sales are generated by the Superdry brand. In 2011 the UK accounted for £179.5m of sales (£110.5m in 2010) and overseas markets £58.4m (£28.9m in 2010). In the year ending 2011 Retail sales were £147m and Wholesale sales £91m.

Superdry’s fast rate of growth has not come without costs, which has led some analysts to express reservations about future performance. In April 2012 SuperGroup saw its share price plunge 40% after a shock profit warning, fashion press suggested the brand image is looking tired but analysts suggested the brand can be revived with some positive celebrity endorsement (Kollowee 2012). Dunkerton has attributed the firm's problems to growing pains in the glare of the stock market (Reuters 2012). Alternative reports suggested that it will miss annual profit forecasts by about £7.5m because of mistakes in its wholesale business, apparently down to a "plus" sign accidentally being entered in accounts instead of a "minus" (Telegraph 2012).

Sourcing and Supply Chain SuperGroup identifies that the strength of its relationships with suppliers is a fundamental factor contributing to its competitive advantage. In particular, it cites one supplier in Turkey which accounts for a third of its total purchases and which sells exclusively to the company and its partner distributers. Other suppliers are in China, India, Peru and Vietnam. This policy of sourcing from Turkey helped build the brand’s quality reputation in the early days.

As Soames (2010) says: “you have to give it to him, the stuff feels good. The T-shirts are softer, thicker and longer, by quite some way than your average high street fare.” However, as the company has grown this strategy has been shown to have limitations. There is risk attached to having too much reliance on a number of suppliers in terms of delivery, pricing and range development. In the summer of 2011 Shaun Packe was appointed (previously at ASDA/George) to the post of Head of Procurement and the group has now introduced a strategy to broaden its suppler base. According to Dunkerton (just-style.com 15/12/11) “to get lots of different textures and handfeels we need to use different factories.” Larger volumes also dictate that factories with greater production capacity be used, although smaller suppliers are being retained for more specialist lines. The increase in cotton prices in 2009/10 also spurred the company to look for lower cost sourcing, and secure price advantages through economies of scale – although raw material prices have moved in their favour again as in 2011 as global recession has curbed demand. In the same interview Dunkerton identifies India as the “most exciting sourcing country” and states that as the country’s production becomes more sophisticated a growing share of Superdry sourcing will 10

come from India. As of December 2011 Dunkerton revealed that 40% of product lines are manufactured in Turkey, 30% in China, 20% from India and 10% from Peru and elsewhere.

The total number of suppliers rose from 33 in 2010 to 47 in 2011. In future SuperGroup will limit suppliers to using no more than 40% of their capacity for Superdry so that the company can retain flexibility and cannot be held hostage by any one supplier. In its short history SuperGroup has encountered difficulties of many kinds in securing efficient delivery of its products. Whilst many of these can be attributed to systems shortcomings, One notable case, in the autumn of 2010 involved very late deliveries from a supplier in China which led to lost sales and cancelled wholesale orders. The fast-growing online retailer ASOS was reported to have attempted to cancel a £1m order. Dunkerton explained that “It’s a Chinese outerwear factory that has let us down. - We haven’t cancelled as when it comes in it sells so quickly”.

As the company has widened its supplier base, especially using more Chinese factories, it has laid itself open to a rapid increase in counterfeited product. It is fair to say that Superdry is one of the most frequently faked high street brands – something of a double-edged compliment. A quick search of the Chinese Alibaba website reveals over 48,000 “Superdry” garments for sale from very many different manufacturers. A large number of “copycat” products with similar names are also available according to the leading law firm, Fox Williams, writing in January 2011, “Superdry is fighting nearly 100 legal actions to protect its brand. The cost is over £1m pa in legal fees.”

Design and Product Development The Target Customer In his public statements Julian Dunkerton often stresses that the success of Superdry is in large measure down to the identification of an opportunity in the market. As Michael Martens, CEO of Superdry USA, explained to Womens Wear Daily (5/5/11) “we target the college student to the young professional – that’s our core”. University students get 10% discount, and expansion has been concentrated on towns, both at home and abroad, with large university populations. This brings the brand into direct competition with Abercrombie & Fitch and Jack Wills, but for key KVIs such as T-shirts or hoodies it is 15-20% cheaper.

When compared to brands like Cinch or G-Star Raw it has a much broader product range with less dependence on denim. Dunkerton and Holder believe that the brand is much more about Lifestyle than it is about Fashion. Thus it has had greater appeal for males than females. Although the core target market is 15-25 it extends upward.

The Product Range and Design Prices range from £15 baseball caps to £300 leather jackets. An added complication for Superdry is that it wholesales to some 360 accounts in the UK and more internationally.

These stockists are also concerned to underpin their business with a regular flow of new lines and styles. In 2011 the company introduced its first “short order” wholesale range with 11

a six week order to delivery lead time. Many stockists were growing concerned about spasmodic deliveries and growing competition from nearby House of Fraser concessions and company owned stores. This move has helped sustain the wholesale business with 42% of doors increasing autumn 2011 orders over 2010 and a further 37% placing similar quantities. 79% of Superdry accounts polled told Drapers that Autumn 2011 sales were up on the previous year Dunkerton is quoted in the Financial Times (15/9/2010) as saying: “you wouldn’t say ‘born in Cheltenham, as a brand. Japan is very cool in my opinion.” It did no harm either that David Beckham, the celebrity captain of the England football team, latched onto the look and was extensively photographed wearing first an ”Osaka 6” and later a “Brad” jacket . As the SuperGroup prospectus puts it “The group aims to set fashion trends by creating future classics.” Dunkerton is quick to stress in interviews that “we are not reliant on one product, one bit of branding or one logo. We are not a one logo wonder, we are a lifestyle brand”.

(Evening Standard, 13/7/2011) In the same paper Holder commented earlier in the year: “French Connection UK had one type of graphic style – it became saturated – we have hundreds of designs. We call it the “pub test”: you could go into a pub and see 25 people wearing Superdry but they would all look different.” (15/2/2011) Furthermore, “every item works with others – we think like a retailer, not just a designer.” (Holder to Arbonne, Journal du Textile, 12/5/09 – translated). Victoria White, Editor of Company magazine, is one who thinks they have got it right. “I think Superdry has tapped into a Zeitgeist look. Its Skins meets Gossip Girl.” she writes Concurrent with the new focus on womenswear Superdry has been upping its investment in product design. Holder also admitted that previously the company’s design strategy had been rather unsophisticated, for example selling one style of man’s shirt and changing the fabric patterns every six months. The company now has three collar styles and has hired a full-time fabric designer for checks, with plans for new styles throughout the season. It is also planning to expand into women’s logo printed tops “in more interesting shapes.”

Chinos will be offered in a range of four cuts, “use better quality fabrics”, and be more sophisticated than the previous offer. (www.just-style.com 15/12/2011). According to Singer (21/6/11) improvements have also been made to the denim offer which now generates 4% of sales (compared with c.45% at Diesel – indicating the extent of the opportunity). Overall, the brand does have a design and product development strategy, which was explicitly articulated to investors in their 20 June 2011 briefing.

It comprises:  Vintage Americana/Japanese inspired graphics 

Super soft hand feel cotton

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Premium fabric

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Vintage detailing World-leading hand drawn graphics

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Impeccably tailored fits 12

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Diverse styling

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Affordable price points (from shareholders statement, 2010)

Despite their insistence on individuality, as the Superdry look becomes more recognizable it also becomes exposed to counterfeiting. Holder, in his interview with the Standard explains: “If someone tells us something is a trend, we go completely the opposite way.....SuperGroup has almost 100 legal actions under way to stop rivals ripping off its designs. “It’s a weird compliment, mostly a pain in the arse. Our legal team is busy and ferocious.” (ES 15/2/11) Retail Distribution Superdry has a multi-facetted retail distribution strategy both in the UK and international markets: 

Own stores, including the new Regent Street Flagship Store and international outlets

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Concessions in department stores and in international markets

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International franchised stores

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Internal distribution via the SuperGroup’s Cult multi-brand stores

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Wholesaling to third party stockists in the UK and internationally. “Superdry” laptop cases have even been spotted in PC World outlets

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Licensing of non-textile products

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Digitally enabled sales via e and m-commerce

Superdry Store Delhi 13

According to UK retail market data the number of fashion retail stores is declining rapidly.

Most multiple chains are reducing their networks as the prolonged economic downturn and migration of sales to e-commerce make their physical estate less profitable. However, data for 2011 shows Superdry at the top of the list of brands predicting an increase in outlets by 2015 (Javelin). Dunkerton believes that the current retail climate has produced a unique opportunity to grow the brand’s distribution at a fast and affordable pace. The average size of Superdry stores, at over 5,000ft², is more than twice a standard shop unit, and the decline of brands such as HMV with units of this size freed up the prime sites required. At the same time, the balance of negotiating power has swung from landlords to tenants and the company has been able to negotiate a large number of turnover related rental agreements (unusual in the UK), together with rent free periods and contributions to fit-out costs.

At the end of 2011 Superdry ran over 50 owned and franchised UK Superdry stores plus 21 Cult stores. In addition there were 6 Superdry and 1 Cult “outlet” stores for the disposal of surplus stock. The SuperGroup estimate that there is capacity for some 120-150 Superdry stores in the UK, plus a further 200 internationally. (Retail Week 9/9/2011). As of June 2011 the group had 12 new UK sites legally committed, 5 more with Heads of Agreement signed and a further 17 under evaluation. Following the opening of an impressive new store in Westfield Stratford, the company held a “soft” opening of the 9,500 f² ground floor of its new global flagship store in Regent Street, central London in mid-December 2011. The exAustin Reed store was fully opened on four floors in the Spring of 2012 with an extended range of products and accessories and showcasing many exclusive lines. The building has 55,000f² leased area (38,000f ² of sales area) and is reputed to have been rented for £2.5m per annum. SuperGroup is also said to have paid Austin Reed a premium of some £12m to take over the lease. SuperGroup will use one floor as an international wholesale showroom for its brand. Hollister, Abercrombie & Fitch, Burberry and Dutch lifestyle brand The Sting are near neighbours, making this corner of London something of a destination for leisure lifestyle shoppers. International stores are also important and the brand teamed up with Reliance Brands to launch the Superdry label in India (Telegraph 2012) The Brand and the Communication mix The direction of Superdry’s product design is closely related to Dunkerton and Holder’s vision of the brand. The recent falling out of favour and loss of market share of similar brands including Abercrombie & Fitch and FCUK (French Connection) has led many to predict short-lived success. For example, Andrew Wade, Retail Analyst at Numis Securities, was quoted in The Guardian as stating: “We remain concerned that we can find no precedent for a UK brand successfully combining longevity with selling overtly branded fashion to the mass market”. A more analytical approach is taken by Marketing magazine’s respected branding expert, Helen Edwards, who writes: “Superdry...is a brand that has benefited from a subtext in the theory of symbolic consumption: that few people choose to express a wholly unique identity. The fragility of the human condition ensures that the urge 14

for individuality is balanced with the instinct to belong. In the vital Asian market, group affinity is an even more significant feature of everyday life than it is in Anglo-Saxon cultures.

The problem comes when popularity spills over into ubiquity, which debases the symbolic worth of the brand (18/5/11).

Translated into Anglo-Saxon that can be interpreted as suggesting “when there is too much of it about or if the wrong people are wearing it, then it’s not cool any more.” In similar vein the Evening Standard wrote on October 18th, 2011: “The Superdry bubble may have burst.

Jumpy, a new play staring Tamsin Greig about turning 50, has just opened at the Royal Court. The main character, who is experiencing a midlife crisis, wears one of Superdry’s heavily logoed T-shirts.....” Dunkerton of course refutes this suggestion, claiming for example in the 2011 results statement, “products with more subtle branding will ensure that the brand does not become over-exposed” An aspect of Superdry’s brand development strategy is to expand the brand into global markets at an early stage of its history. This gives scale to the business and enables it to invest in product diversification, enhancements to the Superdry brand and the development of derivative brands such as the September 2011 launch of “Dry by Superdry” male grooming products. Nick Bubb, analyst at Arden Partners recognized this when he wrote in a December 2010 research note: “Superdry is emerging rapidly as a global fashion superbrand.”

Marketing SuperGroup’s prospectus makes no mention of marketing. As a typical 21st century young lifestyle brand Superdry has minimal engagement with traditional marketing tools. Like its competitors Abercrombie & Fitch and Jack Wills it does no conventional advertising, and according to the Evening Standard (15/2/11) does not hold “sales”. In terms of building the company brand image the company uses a mixture of high visibility retailing (including effective visual merchandising), celebrity-driven PR, digital marketing using blogs, Facebook and twitter, and experiential engagement with events that its target customers patronise.

As was noted previously from the early days key celebrities found the Superdry brand “cool” with its unique blend of sport and oriental mystique. Apart from David Beckham other celebrities to be judiciously “snapped” in Superdry included Helena Christensen, Brad Pitt, Pixie Lott, Zac Efron, Kate Winslet and Leonardo DiCaprio. From the start Dunkerton recognized the importance of celebrity endorsement for the brand. Rosamund Urwin, writing about the group in the Evening Standard pointed out: “Holder & Dunkerton’s fortunes were made when David Beckham wore a few of their T-shirts in his 2005 calendar”. Interviewed by Urwin, James Holder is reported to have said: “I was shaking with excitement when I saw that. From there, we haven’t looked back.” (15/2/2011). As the brand’s popularity has grown so its “usurpation” by non-target celebrities and peer groups may devalue its appeal to its target audience. Rosamund Urwin again, writing this time in the Daily Mail a few months later: “When you regularly spot forty-something city types decked out in its windcheaters, young ‘uns will notice and drop theirs at the charity shop.

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Months ago jokers in the Square Mile rechristened the company SuperDroop as its shares sank. How long before customers are routinely calling the label Superdull?”(6/10/2011) Superdry is also careful to secure endorsement from celebrities with local recognition and appeal as it launches its brands in international markets such as Belgium, The United States, India or Hong Kong.

Corporate Social Responsibility There has been little comment either from or about Superdry, or other group brands in respect of corporate social responsibility. The following statement was included in the prospectus announcing the 2011 share listing: “The Group prides itself on maintaining high standards of integrity and honesty in carrying out its business activities. The Group expects the support of its managers, employees, suppliers and associates in pursuing these goals.

As a global retail clothing business, the Group acknowledges and takes seriously its role and responsibilities and aims to ensure that its suppliers and manufacturers comply with local and international legislation and adhere to internationally recognised standards of best practice in ethical trading. As such, the Group takes a ‘hands-on’ approach in being actively engaged in visits to all locations to ensure products are sourced from responsible business partners. The Group has been accepted as a full member of SEDEX – the Supplier Ethical Data Exchange – a membership organisation for businesses committed to continuous improvement of the ethical performance of their supply chains. SEDEX focuses on four pillars: labour standards, health and safety, environment and business integrity. Utilising the SEDEX system and tools, the Group is commencing a programme of activity to engage with its suppliers in the formal assessment and, where necessary, the improvement of its operations such that they meet a minimum set of acceptable standards. The Group expects its suppliers to adopt and apply fair and ethical labour practices respecting fundamental rights of their employees based on the principles and conventions of the International Labour Organisation as incorporated in the Ethical Trade Initiative Base Code. These include no forced employment, freedom of association, healthy and safe working conditions, no child labour, fair wages, reasonable working hours, no discrimination and no physical maltreatment.

Conclusion The business, in the words of Mary Portas, “started by a nice boy from Cheltenham called Julian” has certainly come a long way. Indeed, as John Dunne, writing in City AM has said: The company’s breathtaking expansion at a time when cash-strapped consumers are reining in their spending is something of a miracle.” (14/2/2011). But miracles seldom last.

Dunkerton believes he has found the way to develop a sustainable fashion brand with longevity and global relevance. As a result interviewing Julian Dunkerton for her dissertation Sarah Wilson (BAFM graduate 2011) recorded that Dunkerton himself provided the best insight into this issue. Discussing whether brands should be proactively created and managed over the long-term, he asserted, ‘absolutely, they are things that you have to nurture and love’ (Appendix E, p.79). Dunkerton also claimed that he and James Holder, 16

the Design Director, ‘instinctively know what protects and what creates and what makes a brand’. However, Dunkerton acknowledged that the company must progress: ‘if you stop, you’re dead... in business and particularly in the fashion business, you never reach Nirvana, you never reach perfection, ever. So you’ve got to keep moving, you’ve got to keep getting better.’ Yet, in many ways the company is at something of a crossroads. It is often recognized that innovation in lifestyle branding often emanates from California. Recently, Rick Klotz, owner of the super-cool surfwear and skatewear brand Freshjive, decided to remove all brand names and logos from his merchandise. Not cool anymore. Sounds reminiscent of Muji....and Japan again. Where will this particular road lead for SuperDry into 2012 and beyond?

References http://www.SuperGroup.co.uk/about-SuperGroup http://www.SuperGroup.co.uk/investors/reports-and-publications/SuperGroup-plcprospectus http://www.SuperGroup.co.uk/investors/reports-and-publications/annual-report-2011 http://www.superdry.com/blog/ http://docs.noodls.com/viewDoc.asp?filename=106853\EXT\281EA1B7641F2F2484BB6AE 805A1E42E37FC3A2C_FA0EAAA271FBCB4C9F0358C68F6ED304C8A65989.PDF http://www.butterboom.com/2011/09/08/superdry-opens-flagship-store-in-tsim-sha-tsui/ www.theretailbulletin.com (various issues) www.drapersonline.com (various issues) www.retail-week.com (various issues) www.internetretailing.net (various issues) www.telegraph.co.uk (various issues and print copies) www.guardian.co.uk (various issues) www.wwd.com 5/5/2011 and 30/6/2011 www.independent.co.uk 21/6/2011 www.nytimes.com 14/5/2011 17

http://myfirstbrainparasite.wordpress.com/ City AM (various print issues) Evening Standard (various print issues) The Financial Times (various print issues) The Guardian (various print and online issues) The Sunday Times “Style” magazine 15/6/2010 Arbonne, D (2009), Superdry offer une Vitrine à ses Ambitions, Journal du Textile, 12/5/2009 Bubb N, SuperGroup Research Notes14/9/10, 15/12/10 and 12/1/11, Arden Partners Edwards H, Brands That Wear Well, Marketing Magazine, 18/5/2011 Hall J (2011), SuperGroup purchase of franchise partner opens faster path to Europe, Daily Telegraph, 5/2/2011 Hawkes S, Julian Dunkerton Interview, The Sun, 6/1/2011 Marlan P, In The Money: SuperGroup Reveals Grand Ambitions, www.just-style.com 15/12/2011 McEachran M and Photiades M, SuperGroup Research Notes 2/2/2011, 21/6/2011,14/9/2011 and 7/10/2011, Singer Capital Markets Portas M (2010), Mary Portas finds the Superdry store a little bit wet, Daily Telegraph, 22/11/2010 Copyright B.Webb and K, Nobbs

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India Case Study – Wills Lifestyle Rupali Grover, Sharmila Katre, Rehka Dhar Introduction The industry report project includes in-depth information about “Wills Lifestyle”, its company profile, history, business environment, internal structure, prospects, literature review, opportunities identified, customer’s attitudes, market analysis, financial analysis ,data analysis and strategy implementation etc. Observations made and information gathered at the Wills Lifestyle stores in New Delhi/NCR, interviews with the Store managers and store staff, showroom visits and survey research helped to better understand about the company.

Customers’ feedback through a questionnaire was also used to identify the customer instore experience. This overview report expresses conceptual understanding about the ITC Brand-Wills Lifestyle and studies its market patterns as well as company outlook to advise beneficial recommendations following an analysis of its various opportunities.

The overall objective is to study the market environment, consumer perceptions and learn about the customer experience at the Wills Lifestyle stores through prominence of its market leadership and best practices in the Indian Fashion Industry. The report also aims to undertake an investigation into the brand Wills Lifestyle, its history, marketing mix, product analysis, consumer analysis and supply chain.

History Wills Lifestyle chain of exclusive stores belongs to the ITC Group. Incorporated on August 24, 1910 Imperial Tobacco Company of India Limited is a company engaged in a wide range of businesses - Fast Moving Consumer Goods comprising Foods, Personal Care, Cigarettes and Cigars, Branded Apparel, Education and Stationery Products, Incense Sticks and Safety Matches, Hotels, Paperboards & Specialty Papers, Packaging, AgriBusiness and Information Technology .The name of the company later changed to I.T.C. Limited in 1974.

The ITC group came into the lifestyle retail sector in 2000 with Wills Lifestyle chain of exclusive stores. The company’s first exclusive store “Wills Lifestyle” was opened in South Extension in Delhi in July 2000. It began with Wills Sport and later extended its range to comprise Wills Classic formal wear (2002), John Players (2002) and Wills Club life evening wear (2003).In 2006, it came onto being known as the title partner for India’s most prime fashion event-Wills Lifestyle India Fashion Week .In addition, “Wills Signature” line was also launched to mark the union of exclusive designer collections at all its stores.

ITC has also established John Players as a brand that presents absolute fashion wardrobe solutions to the male youth of today. (www.itcportal.com, 2012)

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Company profile-wills lifestyle Wills Lifestyle stores are a complete one stop shop for all the men’s and women’s wardrobe solutions. They showcase a wide portfolio of products ranging from apparel to accessories to toiletries. Fashion is not just an add-on; instead it must complement every facet of a person’s life. This is clearly evident from the vast range of offerings available at Wills stores that range from designer wear, work wear, club wear, fashion accessories or relaxed wear.

Marketing mix Chong 2003 (in Goi,2009) mentions that marketing mix originated from a single” P” called Price as it is the main element for any company to earn income, as well as the deciding factor for consumers to buy goods or services. McCarthy (1964) states that the marketing mix is a combination of 4 P’s that are the basic factors responsible for marketing manger’s decision making in order to satisfy the target market. These are Product, Price, Place and Promotion. Wills Lifestyle and its 4 P’s are discussed below.

Product Wills’ product range includes t-shirts, polo shirts, shirts, pants, skirts, perfumes, handbags, ties, belts, dresses etc.

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The products at Wills lifestyle stores are categorised into the following collections: Wills Signature is an exclusive range of high end designer wear which is even showcased at the Wills Lifestyle Fashion Week. Its partners include several leading designers like JJ Valaya, Namrata Joshipura, Satya Paul, Ranna Gill, Bian by Gia P Fleming, Rohit Bal, Rohit Gandhi and Rahul Khanna and Rajesh Pratap Singh Wills Classic lays emphasis on heritage products including exquisite suits, jackets, finest shirts that spell luxury and sophistication. The catalogue for classics shows that this line never goes out of fashion .The products are specially crafted by expert craftsmen from all over the world.

Wills Sport showcases an active, bright collection that boasts of airy fabrics and exciting prints set in shirts, polo shirts, shorts and denims. It has solids, checks and stripes with interesting details that add appeal to purest linen and cotton.

Wills Clublife has a variety of trendy club-wear that is inspired by the glamour and colourscheme of the dark. Fabrics such as linen blends and fabrics with metallic sheen for men and chiffon, cotton and viscose blends along with satin for women are ranges seen in the stores.

Fashion Accessories no wardrobe is complete without the right choice of fashion accessories and Wills clearly demonstrates this through its vast range of product offerings from ties, cuff links, socks, caps, hand bags, wallets, belts to eyewear.

Essenza Di Wills enjoys an exclusive range of fine fragrances and bath and body care products for men and women.

Fiama Di Wills Fiama Di Wills range of premium shampoos and shower gels, combine the goodness of gentle exotic natural products and the power of effective science to give you gentle and effective care. (www.willslifestyle.com 2012) Price The prices for various products available at Wills Lifestyle are decided on the basis of psychological pricing keeping account of the cost of production, raw materials used, making charges, electricity used, labour used, shipping charges etc. The prices fixed must be appropriate as per the competition in the market. The basic idea is to have low costs high profit margins (Interviews with Store Managers). On interviewing the brand manager Mr Saket Dhankar stated that Fashion is an irrational business therefore Wills follows “psychological pricing�.

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Place Wills Lifestyle has its exclusive retail outlets scattered in different cities of India.It has stores in the following cities :- Agra, Aurangabad, Ahmedabad, Baroda, Belgaum, Bengluru, Bhpal, Bhubaneswar, Chandigarh, Chennai, Coimbatore, Ghaziabad, Goa, Dehradun, Gurgaon, Guwahati, Hyderabad, Indore, Jaipur, Jhalandar, Jammu, Kanur, Kochi, Kolkatta, Lucknow, Ludhiana, Mumbai, Nagpur, Nasik, Navi Mumbai, New Delhi, Noida, Patna, Pune, Raipur, Ranchi, Siliguri, Surat and Vishakapatnam.It also showcases its range through a variety of large format retail outlets e.g. Central, Shoppers Stop, Lifestyle, etc. (www.willslifestyle.com 2012) It has a strong growth in metropolitan cities and tier 1 cities but now it is also opting for opening new stores across tier 2 and tier 3 cities .At present it has around 80 stores all over India and the apparel brand wishes to open 20 new stores in cities such as Jodhpur, Mysore, Mangalore, etc. (Sinha 2011) Wills Lifestyle’s products are available at various online shopping sites and it also has an operational website for online selling.

Promotion The India Fashion Week (IFW) is an event organized and promoted by the Fashion Design Council of India (FDCI) and sponsored by Wills Lifestyle. This event is a premier fashion week for Indian fashion designers, which is held in the capital of India, New Delhi annually.

Wills Lifestyle’s association with India Fashion Week has helped the brand to gain more popularity with customers. Also, its designer collection Wills Signature, comes straight from the runway to the stores.

Wills Lifestyle follows various promotional activities e.g. advertising and television ad campaigns. It also has a fully functional operation website for online shopping. It even keeps its customers satisfied through occasional discounts, schemes, or promotions.

Example: Shop for Rs 5000 and get a voucher worth Rs 500 free, Flat 30% off, etc. ITC Wills Lifestyle also enriches the entire shopping experience through it exclusive membership card known as Club ITC, which is a perfect combination of Fine Fashion and Fine Living.

Financial performance The Financial performance of the brand can be judged from the growth of the brand in as follows: Retail Expansion Retail Expansion prospects are evident as ITC’s fashion brand Wills Lifestyle announced its aggressive plans while launching 4 stores, one at at Vaishali Nagar, Jaipur and three in Pune in the month of May 2012.In an interview Mr Atul Chand, Divisional Chief Executive, Wills Lifestyle said, that they plan to open stores in Tier 2 & 3 cities as part of the Wills Lifestyle’s expansion plans. He also stated that they want to make 22

fashion more accessible by exploring multiple consumer segments in various geographies.

They will further penetrate into new markets, with store openings scheduled in Vijaywada Kanpur, Udaipur, Mysore, and Gangtok in the financial year ahead. (imagesfashion.com,2012) Increase in Retail Productivity Retail productivity is another growth objective for the brand. There are various parameters to measure increase in retail revenues like Conversions: To note that how many people walking into the store actually buy the products.e.g. 2 walk-ins and 1 buys = 50% conversion rate. a) Basket Size b) Average Ticket Value Wills Lifestyle as a brand aims to nurture its present market and customers by attaining better conversion rates, better ticket value and improved customer services.

By the end of the fiscal year 2012 • •

Lifestyle retailing business division Turnover Rs.500 cr.

Wills lifestyle Turnover Rs.300 cr.

Organisation structure •

Front end:

•

Back end:

(Slideshare.net, 2011) Sourcing and supply chain Wills Lifestyle has two warehouses in India 1. Bangalore 2. Mandoli 23

Once the order is ready at the warehouse, then it is automatically dispatched to the respective Wills Lifestyle stores. Each store has a deployment plan and there is an automatic replenishment system at the store for maintaining the stock inflow and outflow at a regular basis. [Interview with the brand manager, (Scribd.com, 2011)]

Retail distribution strategy 3 Channels of Distribution followed by Wills Lifestyle to reach out to its ultimate consumers:Exclusive Stores 88 stores in 37 cities all over India (Small Stores Formats: less than 3000 sq. ft.; Large Stores Formats: 3000 – 8000 sq. ft) Multi-Branded Outlets 46 Point of Sales at MBO’s Shopper Stop: 19 Lifestyle: 15 Central: 12 E-commerce It has its own exclusive website for online selling. Also its products are available at other online shopping sites like Jabong.com, Myntra.com,etc. (www.willslifestyle.com 2011)

Design and product development Wills Lifestyle has two seasons namely Spring-Summer and Autumn-Winter. They showcase two collections under each season. The average ratio of men: women product range is 60:40; out of which core (or classic) and fashion constitutes 30% and 60 % respectively.

The distribution between Sports, Classic, Signature and Club Life is as follows:-

The brand follows a book and make model. At the start ,numerous designs are prepared by the various designers at Wills Lifestyle office and the best designs are selected and finalised for the current season. Allocation of factories is related to the product range.

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Comprising a combination of in-house and outsourced production to suit the product requirements and specifications. Additonally, raw material sourcing is done across the globe Example Italy,Egypt,etc. [Interview with the brand manager, (Scribd.com, 2011)] Brand communication mix The overall target market of the brand Wills Lifestyle has been identified as both males and females in the age group of 28-35 belonging to SCCA1(+) Income group. Their psychographics tell that the customers are fashion conscious individuals who have a style of their own and are not necessarily followers. They are exposed to international fashion trends and are well travelled. “Wills Lifestyle as a brand doesn’t claim to make its customers more stylish or fashionable; rather it only provides the appropriate clothing to complement the inherent style of its customers. It is positioned as a “premium brand offering complete men and women wardrobe solutions” ( Mr Saket Dhankar Brand Manager Wills Lifestyle) Wills Lifestyle is a destination for “effortless style”. Once the target market and customers have been identified the next step is to communicate its brand ideology and philosophy to them. The entire brand image and look revolves around the ultimate chemistry between a man and a woman, which is quite evident from all its posters and banners. The tools being used include social media and digital media. The tag of being Wills Fashion Week sponsor also lends vital credibility to the brand and helps pull in an elite set of customers.

Brand Communication tools being used by Wills Lifestyle: 

Web Marketing

High Media Visibility



Loyalty Programme Club Wills

Direct Marketing



In Store Marketing

High PR and Buzz

 E-Commerce (Scribd.com, 2007)

WIFW-Designer Line

Primary Research: Findings & Analysis Knowledge about the visual merchandising and floor staff training has been gathered to gain an insight into the current scenario at the retail outlets. Wills Lifestyle in its attempt to attract the Indian consumers must be sure of what the customers exactly want and how can they can possibly satisfy them. Also by knowing the internal functioning and kind of training provided to the staff ,an analysis can be made as to how important is “customer employee relationship” for Wills Lifestyle as a brand.

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The core objective has been accomplished by carrying out in-depth interviews with store managers of Wills Lifestyle stores across Delhi/NCR. Interview’s were conducted with store managers of Connaught Place(Mr Sandeep Singh), Ambience Mall-Gurgaon(Mr Dawinder Bijla) , Greater Kailash-1(Mr Kartikeya Bajpai), ITC Maurya(Mr Saurabh Uppal), Select City Walk(Mr Rahul Singh)and South Extension(Mr Susheel). Findings reveal an overlap and similarity in the training provided to the entire Wills Lifestyle store staff. They showed that a proper training programme for a period of 21 days is provided to each trainee before they actually start working. This training process is considered as crucial because the store staff performance is directly dependent upon it. Training provided to them helps to impart knowledge about numerous aspects of retail including Key Performance Indicators (KPI), Products training, Customer handling for personal care products, selling techniques and most importantly Visual Merchandising. They also clearly mentioned that the store manager was himself responsible for identifying the need and type of training required for each individual on the basis of staff store performance. Lastly, the training programme is communicated through e-mail, 10-15 days prior to the training workshop mentioning the names of the people who are required to attend it.

All the questions received the same answers from the various managers except one which asked about the frequency of training workshops. Mr Saurabh Uppal and Mr Susheel said every 3 months; Mr Sandeep Singh, Mr Rahul Singh and Mr Dawinder Bijla said every 6 months whereas Mr Kartikeya Bajpai said that it’s only provided once at the beginning when a new staff member joins.

Visual merchandising at the retail outlets Visual Merchandising plays a key role in enhancing the shopping experience. Wills Lifestyle aims to provide a truly 'International Shopping Experience' through world-class ambience, customer facilitation and clearly differentiated product presentation at its various outlets. On interviewing the various store managers, they also described the store layout and how their merchandise is displayed. Wills store layout is visually impressive and appealing to men and women alike. The store has a relaxed and a pleasing atmosphere. The use of space is refreshing, which is reflected also in the spacious changing rooms. The entire store is divided into two sub-sections namely men and women and are differentiated by signage.

Store interiors are laid out mostly in glass, steel and granite reflecting a contemporary look.

Its essence lies in the fact that it has a splendid store environment showcasing premium men and women offerings. (Wills Lifestyle,2012) Stores have a striking and alluring window display with mannequins of men women displaying their latest range of products. Also, inside the store mannequins are placed to add further to the window display.

The store staff reported that the in-store display of apparel is arranged on the basis of colour blocking, size blocking and horizontal colour blocking .They also said that the racks and hangers are organized and placed in a systematic manner. But to our surprise the 26

actual show was a completely different maybe because of the end of the season sale period. The stacking of merchandise was haphazard and unpleasing at many of the Wills Lifestyle outlets like Connaught Place, Select City Walk, Ambience Mall Gurgaon, South Ex. etc. The colour blocking technique of stacking was nowhere to be seen. Even the sizes of the t-shirts were mixed. The ultimate problem observed at the store was that there was a lot of clutter and unnecessary stock on the shelves which made the store look messy.

Although the store staff was present at all times, still not much was being done to improve this layout.

Along with physical store attributes, the intangibles also play a significant role. The intangibles at the stores such as music and aroma also need to be addressed. Only the outlet at ITC Maurya had the best ambience with a pleasant fragrance and pleasing music to suit the feel of the store.

Hofstede’s cultural dimensions This includes:    

Power Distance Masculinity and Feminity Individualism and Collectivism Long term orientation Uncertainty avoidance (Hofstede's Cultural Dimensions)

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Power Distance In Wills Lifestyle stores the employer employee relationship is healthy. There is a store manager who is accountable for the entire store staff at the Wills store. Also, there is an appointed visual merchandiser for each outlet.

The back end office of Wills Lifestyle is located in Udyog Vihar, Gurgaon. The workplace culture as observed through office visits and interviews with office employees show that the HR management is much planned and workforce of the organisation is given chief importance. Employee training is provided for store staff as well as office staff. To sum up there is a friendly and healthy atmosphere at the office.

Most employees in different organizations feel that power is concentrated in the top level management only. But at Wills Lifestyle there is effective delegation of responsibilities to the employees as per hierarchy. The entire process comprises of interlinked departments like PR, recruitment of employees, designing products production, sales, advertising, quality check, hiring employees, managing accounts etc.

Uncertainty Avoidance Every organization tries to lower the impact of uncertain situations by employing certain rules and regulations amongst the employees. Wills Lifestyle also tries to avoid these situations and hence, training is given to employees to carry out almost all tasks so that they can subsequently fill gaps or vacant positions whenever necessary. The Wills Lifestyle store managers explained how they are able to tackle uncertain situations as follows.

Wills stores have stock rooms in each store to accommodate superfluous garments and accessories of various styles and sizes. The entire store management is under constant electronic surveillance through CCTV Cameras and Walk-In meters, each store has appointed a full time guard to keep the store secure against theft. Fire alarms and extinguishers have also been installed at every store to avoid unforeseen circumstances or mishap. The backend office has electricians employed to deal with all issues regarding electricity and air conditioning although the stores are located in well equipped malls or shopping places.

The store manager at Ambience Mall, Gurgaon was kind enough to explain in detail his stock keeping and management of accounts. He explained that all the bar codes are fed into the computer database which keeps updated the total quantity of products and prices automatically when sales are made. These are then manually checked and confirmed every week by the employees of that particular department.

Individualism and Collectivism All the employees at Wills Lifestyle work collectively towards the common goal of earning higher sales and revenues. The back end office takes care of the marketing strategies, 28

company goals, product designs, profit margins etc. Staff at the retail stores are friendly and try to keep the stock up to date.

The store manager is responsible is to keep the stock up-to-date and increase the sales and revenue through combined performance of the floor staff whereas the back office ensures whether the functioning of the store is smooth and effective. It also keeps a check on the final sales outcome to monitor if the store is able to achieve their targets or not.

The company has employed creative marketers, fashion designers and merchandisers who work collectively towards achieving the trendsetter image of the Brand.

Masculinity and Femininity The Wills Lifestyle stores have both male and female staff members to perform sales and related tasks. They have employed ample number of men to assist shoppers in buying the right product but the number of women staff is comparatively less. It was noticed that there were men working in the women’s section and as well.

Long Term Orientation Interviews were conducted to know the views of the store staff. They mentioned that their goal was a Long-term one as a team. They collectively work towards making Wills Lifestyle as the most preferred lifestyle retail brand in India.

Customer’s store experience-questionnaire The success of any lifestyle brand depends ultimately on its customers. At Wills also, customer’s in-store experience is given prime importance because happy and loyal customers serve as an asset for long term growth of the brand. A detailed questionnaire was completed by 50 respondents to gain an insight into customer’s experience at the Wills Lifestyle stores.

The demographics of the consumers studied included both males and females. About 85% of the respondents agreed that they were welcomed properly as soon as they entered the store. About 53% of the respondents also agree that the visual display at the store is attractive compared to 9% who disagree on this.13% of them are also truly convinced that the visual display is the key motivator for them to enter into a Wills Lifestyle store.

The questionnaire statistics showed that the customers were happy and satisfied with the sales staff at the various Wills Lifestyle stores. This was done on 3 parameters namely communication skill, consumer handling and product knowledge. It was observed that a significant proportion of consumers agreed that their experience with sales staff was good on all the 3 parameters, highest being the staff product knowledge.

The respondents were also satisfied with their Trial room experience. The majority of them, about 31 out of 50, say that the number of merchandise to be taken inside is communicated

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properly. Also about the same number of people (30) feel that they are provided adequate assistance for extra merchandise whenever required.

For any sale to be complete the last and final step of a cash transaction has to be done. In today’s busy world, customers always prefer speedy billing counters therefore knowing the customer’s feedback in this regard is very beneficial for Wills Lifestyle as a brand. The customers were asked if the waiting time at the billing counter was managed effectively, and about 53% of the respondents agreed along with 18% who strongly agreed. Only about 2% strongly disagreed on this. The customer’s also tell that on an average the waiting time at the billing counter is 5- 10 minutes.

At the end of the day, happy customers are the ones who help any brand to flourish and reach new heights. So lastly the respondents were asked if they felt satisfied at the time of leaving the store. About 74 % and 22 % of the respondents say that they felt satisfied and delighted respectively. Also a majority of 56% respondents agreed to the fact that their shopping feedback was also asked at the time of leaving the store.

Gaps identified During the study the end of season sale (EOSS) was in progress. It is a perfect time to attract plenty of shoppers because of low prices and promotional schemes. After observations and surveys it has been seen that that many customers walked into the stores mainly because of discounts but they felt that the kind of stock displayed at the store during EOSS was not so appealing. They even felt that the stock was not properly stacked and the sizes were mostly mixed with no proper stacks.

A few of the customers even complained about the confusion at the store (Connaught Place and Select City Walk) because of excess stock which made the store look messy with too much of clutter.

Wills Lifestyle claims to provide a spacious layout for its stores. In reality, the area of the Wills Lifestyle stores is large but the placing too many racks for stacking the products makes the stores look small. This was specifically observed at Connaught Place and Select City Walk.

Majority of the customers felt that the customer executives at the store were well versed with the product. But a few customers like Mr R.C Yusuf and Mr Malik on interviewing complained that the sales staff was not so comfortable in finding the correct sizes. Also, they seemed disinterested and lazy.

It was also observed that although Wills is a man’s and woman’s brand, the stores are mostly dominated by male sales staff members.

The loyalty programme introduced by Wills Lifestyle in the form of CLUB ITC does bnot appear to attract many customers. It has been observed that 18 %of the customers who own the loyalty card forget to carry it while shopping and 42 % of the respondents do not 30

have a loyalty card only. Therefore, Wills Lifestyle must communicate the loyalty programme benefits more actively to nurture its loyal customer base.

Mr Saket Dhankar says that the brand has been positioned as a premium brand. Therefore Visual Merchandisers must work a step ahead in to overcome these loopholes as VM plays a silent role in attracting most of the customers towards a store.

References (2012). History and Evolution. Available: http://www.itcportal.com/about-itc/itcprofile/history-and-evolution.aspx. Last accessed 15th July 2012.

(2012). About us. Available: http://www.willslifestyle.com/Season25/profile.aspx. Last accessed 16th July 2012.

(2012). Stores. Available: http://www.willslifestyle.com/Season25/store.aspx. Last accessed 16th July 2012 (2012). Club ITC. Available: http://www.willslifestyle.com/Season25/club-wills.aspx Last accessed 16th July 2012 Goi, C. L. (2009). A review of marketing mix: 4Ps or more? International Journal of Marketing Studies, 1(1), 2-15. Retrieved from http://search.proquest.com/docview/821640869?accountid=29895 Sinha, V. 2011, BRIEF: Wills Lifestyle now eyes smaller cities, Washington, United States, Washington.

(2012)Wills Lifestyle.Available at: http://www.itcportal.com/itc-business/fmcg/lifestyleretailing/wills-lifestyle.aspx. Last accessed 26th July 2012 (2012) Wills Lifestyle on expansion spree, opens four stores in a month. imagesfashion.com, [online] 10th May . Available at: http://www.imagesfashion.com/content/contentdetail.aspx?cid=1572 [Accessed: 20th August 2012].

Slideshare.net (2011) A study of hr practices in ITC. [online] Available at: http://www.slideshare.net/hemanthcrpatna/a-study-of-hr-practices-in-itc [Accessed: 11 Dec 2012] Cxotoday.com (2004) Wills Lifestyle Implements Fashion ERP - CXOtoday.com. [online] Available at: http://www.cxotoday.com/story/wills-lifestyle-implements-fashion-erp/ [Accessed: 11 Dec 2012].

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Willslifestyle.com (2011) Wills Lifestyle: Stores. [online] Available at: http://www.willslifestyle.com/Season25/store.aspx [Accessed: 11 Dec 2012] Scribd.com (2011) wills lifestyle gap analysis. [online] Available at: http://www.scribd.com/doc/103486453/wills-lifestyle-gap-analysis [Accessed: 11 Dec 2012].

ITC Limited (2012) ITC Limited Corporate Presentation. Available at: http://www.itcportal.com/shareholder/ITC-Corporate-Presentation.pdf [Accessed: 11 Dec 2012 Scribd.com (2007) Marketing Strategy of ITC Ltd.. [online] Available at: http://www.scribd.com/doc/11518224/Marketing-Strategy-of-ITC-Ltd [Accessed: 11 Dec 2012].

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Section 3 – UK MA student research projects An Evaluation of the Significance of Social Media on Luxury Brands in India Simran Gandhi Introduction India is the world’s 7th largest Internet market growing at 11.2% (Ernst & Young, 2013).

There are 21 million people in India who is estimated to visit Social Media (SM) sites regularly which is 60.3% of the total active Indian Internet audience (Nielsen, 2012). More than 90% Indian online users belong to 18 -45 years age bracket. These customers have high purchasing power and high disposable income (Glyn & Jain, 2012). A typical SM site visitor in India spends 110.4 minutes on the site and makes 10.4 visits per month to a social network (Nielsen, 2012).

Over the past decade India has seen many political, social and financial changes (Glyn & Jain 2012). The change in India has made it a hub for designers and luxury brands to expand into; “Asia [India and China], and the Southeast Asia bloc is where there is the most potential. There are 300 million new middle-class consumers there, and we cannot underestimate how much they know about the [luxury] brands,” says Anson Bailey, principal of business development at KPMG China (Conti, 2013). The luxury market in India is said to be grow by 25% up to 2015 (Mukherjee, 2013).

Fig 1: Luxury Goods Growth rate.

Euromonitor Report: Top 10 consumer trends for 2011.

Social Media has soon become a very popular marketing tool amongst luxury brands in India, the usage of SM in India is said to be much more to the global average of their counterparts in emerging economies. India has over 121 million Internet user and are expected to grow at 40% pa (Nielsen, 2012). 60% of active Internet usage is through mobile phones. It was assessed that over 70% of SM users belong to Gen Y (18- 35 years), which 33

is considered as one of the most important target groups for luxury brands in India (Ernst & Young, 2013). This can act as a goldmine of opportunities for luxury brands in India.

Keeping in mind the impressive SM statistics and the array of opportunities, SM can prove to be a very cost effective way to tap a new market segment (Kapferer, 2012).

During the research stage of this paper, it was observed that there are many case studies, online tools to help gather insights of SM success in India (Ernst & Young, 2013), (Nielsen, 2012) but not much research is available on the Impact of SM on Luxury brands in India.

Keeping in mind the large population and diverse cultures in the country. To make a SM campaign successful in India, brands face various challenges.

This study explores the challenges of social media adoption for luxury brands in India, and the opportunities that this marketing strategy can have to improve brand engagement.

Aims & Objectives The aim of this paper is to show the impact of social media on luxury brands in India. To achieve the desired aim for this paper, the following objectives are determined:

OBJECTIVES 1. Understand the impact of SM Marketing on the Brand Image of Luxury brands in India.

2. How much success have brands achieved with using SM marketing?

3. What challenges are faced by luxury brands towards SM marketing?

4. Determine the most popular platform used for SM marketing.

5. What are the guidelines for brand managers to use social media as a marketing tool?

RESEARCH TOOLS Questionnaire & Literature review.

Interview 1 & Interview 2.

Literature review & Interview 2.

Case study & Interview 2.

Literature Review & Interview 2.

Methodology Saunders et al defined research strategy as a general plan that helps to answer the defined research questions (Saunders, Lewis & Tornhill, 2009). They further described the significance of research aims and objectives towards choosing an appropriate research strategy. The overall research strategy was explained in comparison to an ‘onion’, each layer of the onion represented insights towards the research problem which lies in the center and thus several layers have to be “peeled away” before reaching the central position. These layers form the basis determining the research methodology for a research study. (Saunders, Lewis & Tornhill, 2009) This paper adapts this method of research to clearly identify research backgrounds, research significance/ rationale, literature review, 34

findings and analysis act as the layers of the onion to help achieve the objectives and aims of this paper, being the center of the onion.

In order to satisfy the aim and objectives the paper adopts the following structure: first the main literature, appropriate frameworks and key definitions will be explained and analyzed in the literature review, followed by a more appropriate methodology for the primary research section. The paper will then go on to present the findings from the research and the results from the questionnaires and in-depth interviews will be interpreted relating them to the findings from the literature review. Subsequently, the paper concludes with a summary of the main findings and how they relate to the aims and objectives. Finally a set of recommendations along with limitations will be provided.

Literature Review The study of this paper is based on significance of social media in luxury brands taking Indian market as a base to study, the literature review examines the impact of social media in luxury brands and further assessing how the pillars and basic fundamentals of Social media can be implemented by luxury brands. The literature review also explores the literature conducted on social media networks and it also describes the platforms of social media. In addition, the importance of SM as a marketing tool for luxury brands is reviewed with the implications of the social media strategy. This review also points out major challenges faced by luxury brands while including social media in their marketing strategy.

As Indian market is the base of the study of this paper the literature review also highlights current luxury market scenario in India.

What Is Social Media Social media can be defined as an instrument that helps people to interact and communicate with others. Media is a tool to communicate with their audiences through mediums such as TV, newspaper, radio etc. The characteristics of SM are:     

Active participation.

Openness in the barriers and open to discussions.

Active conversation helps to provide and receive information and feedback.

Communities on the web consist of users sharing common interests and hobbies are widely available.

Form permanent connections and links between users and their lifestyles (Evans, 2012).

Social networks is inter connected in nature, further explained in (Appendix 1). These platforms allow companies to generate a web base profile that help to connect with their users. The SM landscape explains an overview of SM amongst luxury brands (Hayman, 2013).

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(Source: Fredcavazza.net) The SM landscape clearly explains how SM works. At the center of the chart above are the most popular SM platforms such as Facebook, twitter and Google + (Jin et al, 2012).

Luxury brands focus on these SM platforms to connect with their customers. The next layer of the circle divides SM platforms for conveying their messages to their customers. They are further divided under buying websites, networking websites, playing/game websites, sharing websites and publishing websites (Hayman, 2013). Luxury brands can use appropriate website to connect with their target market.

Importance of Social media in luxury brand marketing: Social media is one of the best ways to personally interact with a consumer looking from a luxury brand perspective; it enables the brands to directly relate with their customers and evaluate their responses (Evans, 2010). This will increase the personal interaction that a customer always expects from a brand, the interaction will create better feedbacks, which can result in better products and services improving customer satisfaction, thus increasing the chances of brand loyalty in customers (Goldman, 2012). Social media is an effective and efficient way of communication too, its one of the most effective tool as far as the reach of the communication is concerned. Secondly it is free to use and the advertisement in social media platforms are cheaper as compared television and print media (Jin et al, 2012).The invention of smart phones and the increase in the subsequent increase in their use has brought social media within the reach of a wide population of consumers. Social media can change the way the consumer thinks in just a few steps. There is a strong need for Luxury brands to adopt social media as a part of their active marketing strategy (Chevalier et al, 2012).

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Challenges Faced by Luxury Brands with Social media marketing: As it has been agreed that luxury brands can no more ignore SM as a vital marketing tool, which in turn helps find a new way for the consumers to interact with the brands (Chevalier et al, 2012). We must now understand the issue of this complicated relationship. Reasons why SM is a complex move for luxury brands are explained as follows: 

   

SM will still be a complex change for many brands because there is still need to understand that SM is not just a complex new platform to use but also helps tap undiscovered target markets (Kapferer et al, 2012). During planning of an offline event, it is easy to select your target audience, but finding your niche through SM can be a big challenge faced by luxury brands today (Okonkwo, 2010).

Luxury brands also face challenges to keep their brand image intact in the minds of their customers through SM (Goldman, 2012). SM being a platform with a large coverage, brands fear losing the value and essence of the brand.

Luxury brands also fear to losing their brand exclusivity; this can be felt because SM platforms are openly accessible (Chevalier et al, 2012).

Luxury brands do not follow traditional marketing rules hence using SM can be more challenging problem (Kapferer, 2012).

Luxury brands also fear losing their control due to the use of SM. Brands in the luxury industry demand more control than in any other industry. This is due to the essence of luxury brands; they cannot afford to make any mistakes of face failures (Jin et al, 2012). Hence, luxury brands have to be very careful and control every step towards SM.

Implementing Social Media Strategy by luxury brands: Adopting social media as an active strategy can have major benefits for the luxury brands in India to reach out to their new target segment (Goldman, 2012). But there is a need to understand and comprehend the proper strategy for how to implement social media in marketing and make the best of the available platforms (Safko et al, 2009). Since luxury brands do not follow the traditional rules of marketing (Kapferer, 2012), they face many challenges while adopting social media as described above in India. Keeping in mind that the Indian market has diverse cultures and a population of 1.27 billion, luxury brands face various challenges to adopt SM to reach their desired target segment without losing the brand exclusivity and essence. The Indian retail sector is also considered to be an unorganized sector, hence adopting relevant models to conduct an SM campaign needs to be kept in mind as a priority. To overcome these obstacles luxury brands must include adaptation models to clearly set their SM marketing objectives.

Below are some frameworks (Safko et al, 2009), (Bart, 2012) & (Frijlink, 2012), which help in setting brands a social media strategy and clearly defining their objectives to achieve high viewership and interaction from the usual marketing strategies keeping in mind the Indian market requirements.

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SOCIAL MEDIA PYRAMID:

This model can be used to define the focus in existing SM field (Bart, 2012). The model starts with step one being monitored; this comprises defining the online image of the brand or organization. The second step of this model is listening, implying that an organization or a brand needs to listen and analyze the feedback given by its customers. The third step of social media pyramid is commenting this involves giving a feedback to the queries of the consumers this also creates a sense of presence and helps building customer brand relationship. The fourth step of the pyramid is creating this involves bringing in change according to the data collected by all other steps in the pyramid (Bart, 2012).

SOCIAL MEDIA AMBITION MODEL:

This model is a simplified representation of different ways of engagement that an organization can carry out towards its customers, the market or other online audiences (Frijlink, 2012). The model consists of six levels, and can only be completed if executed step wise. The six levels starts with Innovation of ideas, creating a forum for e.g.: Facebook page, facilitating and participating for e.g. Add friends to your pages, followed by the last step of commenting and observing (Frijlink, 2012).

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ACCESS MODEL:

ACCESS is an acronym (Safko et al, 2009), which stands for: Audience this is focusing on the target of the brand; keeping in mind the different aspects of the target market Concept this function is about making the target market aware of the products and services of the brand Competition analyzing the competition and constantly updating the company with its competitor’s online activity and how they serve the market and trying to do something better Execution it’s the initiation of a plan, which is the online social media strategy. There is heavy amount to research required before the final decision making Social Media Platform using the appropriate social media platforms and tools in order to achieve goals and objectives Sales Viability every investment and a project has a ROI factor i.e. the return on investment, here the financial and the sales benefits are measured after adopting social media strategy Luxury in India Indians are not new to the “excellence”. In fact royalty and their tales influence many cultural ideals of luxury, however what is relatively newer to the Indian market are the luxury brands (Glyn & Jain 2012). India has seen many changes in the political, social and financial scenario which have entered the minds of mainstream mass consumers (Glyn & Jain 2012).

The luxury market in India is estimated to grow at 25% in 2013 till 2015 and likely to touch US $15 billion from the current level of US $8 billion, reveals the Assocham (Associated Chambers of Commerce and Industry of India).

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The three key SM models explored in this literature review indicate that there are differences in social media strategies. The Social Media Pyramid helps define focus in the existing SM field (Bart, 2012). Brands in India must build a strong SM pyramid to ensure the right approach is selected while ensuring SM activities share the right content at the right platform to maintain control. The SM ambition model aims to fill the gap between the customers and the brands in the digital space. It ensures optimal engagement with the new target segment that the luxury brands in India wish to explore (Frijlink, 2012). A strong SM ambition model will help brands engage with their desired target market. As luxury brands in India are still new to localized SM activities, there is a need to work towards a strong ACCESS model to ensure a promising guide in setting up and implementing a SM strategy (Safko et al, 2009).

All three models illustrate that SM marketing does require a complex set of decision making stages that are strategic and linked to the brand’s business model, in particular SAFKOs model which has a strong return on investment characteristic. The three models also stress the role of conversations and interactions with customers to be successful and effective.

Methodology Research methodology is considered to be a fundamental approach that guides the research forward (Dawson, 2009). This paper uses the Saunder et al’s research methodology in the form of an “onion”, where the centre holds the insights of the research problems and the several layers need to be peeled to achieve the centre position. The layers act as the basis to determine the research methodology for any research study (Saunders, Lewis, Thornhill, 2009).

Two of these layers are based on the research findings. To gain an insight on the mixed method approach, secondary and primary research will be conducted in this paper (Dave et al, 2006).

Secondary Data Secondary data is that data collected to re-assess subject matter, which is previously written. (Saunders, Lewis & Adrian, 2008). A snowball approach will be adopted in order to find relevant articles and literature (Malhotra & Birks, 2004).

Primary Research Primary research will draw on analysis of the secondary data, and will be divided into qualitative, and quantitative analysis (Dave, et al, 2006).

Quantitative data is considered as the raw data, which has no meaning until it is critically evaluated once it is collected. Quantitative analysis techniques such as graphs, charts and statistics allow us to explore, present, describe and examine relationships and trends, (Saunders, Lewis & Adrian, 2008). A quantitative Internet-based survey, with men and women was deemed appropriate to understand the impact of SM on the Brand Image of the Luxury brands.

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Qualitative data on the other hand will be implemented to gain further in-depth understanding about attitudes, behavior and experiences (West, 1999). Qualitative data refers to all non-numeric data that have not be quantified and can be a product of all research stages (Saunders, Lewis & Adrian, 2008). To determine the most popular SM platform and measure the success achieved my SM campaigns a case study was considered appropriate. In order to understand the challenges faced by luxury brands on SM in India and to determine guidelines for implementing SM by luxury brands in India, an interview with a market professional was considered neccessary to achieve the aim of this paper.

Findings The following section will analyse the findings collected from the primary research in relation to the aims and objectives of this paper. Secondary data will also be analysed, a questionnaire was designed using factors that emerged to understand the impact on the brand image of luxury brands using SM in the minds of Indian consumers. The first and second interviews explicate the main themes and subjects these two interviews were conducted to understand the impact of SM on luxury brands in India and to measure success achieved by luxury brands with SM in Indian markets.

Consumer Study – Quantitative This study aimed at collecting appropriate quantitative information through the questionnaire. A questionnaire of twelve open-ended questions was conducted amongst 100 fashion forward customers to see the impact of the brand image of luxury brands using SM in the minds of the consumers. As per the questionnaire used it can be determined that SM has different consequences and benefits.

Consumers have a ‘positive approach’ towards SM. The biggest disadvantage of SM marketing is its lack of tangibility. It was highlighted that a brand manager can have a ‘website showing the life history’ of the ‘brands or have live events’ on popular platforms like Facebook but they cannot fulfill the need of the consumer to ‘touch and feel’ the goods.

SM usage as per the findings of the study highlight that the customers are rapidly adapting to new trends in society. SM is viewed as a channel that helps build a bridge brings customer closer to the brands. It allows consumers to share their stories & experiences’ from other users and attracting new audiences. It also helps build a strong relationship between the customer and the brand; consumers perceive that the brand ‘cares’ for the consumers this fulfills their need of ‘special attention’ and makes them ‘feel unique’ creating a ‘positive image’ of the brand.

The majority of users 19% purchased ‘Sometimes’, followed by 18% of people who purchase often. 57% of the people buy online after reading reviews of the products. Online spends play a vital role in how often online purchases are made following reading about products reviewed by experts/users.

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Respondents purchasing touched a figure of Rs.10,000 plus but these kind of purchases were made ‘sometimes’. This shows that consumers use SM platforms for updating themselves with the brands. Consumers actively engage in SM to stay connected with the brand.

The survey helped understand the impact of SM campaigns on the mind of the consumers.

It was observed that the consumers are willing to adapt to changes in media trends and want to stay connected with brands through SM platforms. If brands are unable to fill this gap, there is a need for building a better SM implementation model such as the ACCESS model.

Market Study – Qualitative The second part of this paper looks at the qualitative data collected through means of two in depth interviews. The first interview was conducted with a creative professional based in New Delhi, India: the interviewee designer of the Diwali campaign for Da Milano: enquiring into the measure of success achieved by luxury brands in India; also identifying popular SM platforms for luxury brands in India. The second interview was conducted with Rohit Juneja, currently Category manager to understand how luxury brands are using SM in India and to understand the challenges faced by luxury brands in India when using SM. Interview One Da Milano is a hub of luxurious Italian accessories. An interview with Ms. Kriti Kohli, social media manager at The Cufflinks, was conducted. The structure of the campaign and the statistics were obtained with the help of the information provided by her through a telephonic interview held on 20th September 2013 at 11am IST, the agency that was responsible for the campaign. The Diwali campaign was as follows: The interview started with Ms. Kriti Kohli giving information of their company and its previous work, where she mentioned many successful SM campaigns by brands. She explained, “Luxury brands in India have an un-tapped market waiting to be explored. This is a strong target segment and they can be reached through SM as they are active users falling under the age group of 18 – 35 years”. Questions were now directed towards receiving actual statistics of the success of the SM campaign designed by them to measure the success. To this she further explained, “The main objective of Da Milano to execute the Diwali campaign was to enhance the viewership and interaction for the brand with their target audience”. “The target medium selected by the brands consent was Facebook, as it’s the most popular and platform to connect with their audience”. Questions were now directed towards the execution of the campaign, to which Ms. Kohli said, “To celebrate the Diwali festival, Da Milano built a “Send Diwali greetings” App via Facebook Apps.

To be part of the contest, Fans were given a line, which had to be completed creatively to win the contest. The line was, “ You are my bag full of happiness, because….”.

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Fans posted their Diwali wishes all through the week, they also asked the fans to post similar Diwali wishes for their friends via the Da Milano App, inclusive of the keyboard, that forms the brand’s product unique selling proposition – Bags. The contest was a simple three-step process:   

Select a Diwali Goodie bag and share it with your friends and family.

Complete the Fill in the line.

The fan with the maximum number of members invited and the most creative message wins a Diwali gift by Da Milano.”

She further explained the results divided in two categories:  

“Facebook Performance: The Facebook fans before the campaign were 12,320 and after the completion of the campaign the number of fans reached 17,196 fans.”

Contest Performance

The contest performance was divided on the basis of:   

Total number of Participants: 108.

Total number of invites sent: 1,280.

Number of winners: 12.”

With the help of the statistics obtained and insights taken from entire process of the campaign, it can be said that SM is a vital marketing tool for luxury brands and when used systematically and prove very successful, can lead to higher viewership & interaction helping brands in achieving their desired goals. These campaigns help build brand image and long lasting brand loyalty. Facebook can also be determined as a vital platform for conducting SM by luxury brands to reach out to their target market. To ensure that brands achieve optimum engagement with their customers the SM ambition model must be strengthened.

Interview Two The second part of the qualitative research aimed to carry out an in-depth conversation with an experienced marketing professional. An interview was carried out with Mr. Rohit Juneja, currently Category manager at Kitsch, a part of ‘The Sachdev Group International Pvt. Ltd.’ (TSG) was conducted.

As per the questions in the the interview started with reviewing the companies past clients, for which Mr. Juneja explained, “The list of our clientele includes Alexander McQueen, Céline, Halston Heritage, Hervé Léger, Stella McCartney, YSL to name a few.” Mr. Juneja also explained, “Luxury brands in India have started using the medium of social media marketing; this is a very recent concept.” “The aim of luxury brands using social media as a platform to highlight brand news and customer services. Brands are also using social media to build communities and advocate usage.” “Most brands have conducted campaigns with social media as their leading component. Brands also show special favor for online fans 43

and followers as compared to offline fans”. “Facebook is the most popular platform for luxury brands in India for engaging customers followed by Twitter and YouTube and bloggers. Most of the luxury fashion brands are already using emerging platforms like Pinterest, Google + and Foursquare”. “Brands’ engaging with their social communities is a popular practice by luxury brands.”    

Type of content: “Brands believe in posting generic updates instead of brand updates”.

Frequency of updates and responses: “Brands post multiple updates a day. Brands prefer to respond to fan queries within 30 to 60 minutes on Twitter and Facebook”.

Contests/promotions: “Picture contests are the most popular amongst luxury brands in India and these contests are mostly organized monthly”.

Policies: “There are standard social media guidelines for online monitoring programs, better governance and few brands have crisis manuals.”

“Some luxury brands in India have their own marketing department with a SM department or they have a Public Relations or communications team. Few brands also have social media experts in middle management, helping the brand to have more control”. He ended the interview by saying; “Brands seem very optimistic about the role of SM in their organizations. The sales and leads aren’t very evident for all organizations; still they realize that SM plays a vital role in generating insights and have a continued customer engagement. To capture a wider audience in the future; brands must focus more on SM activities”. He suggested that, “there is a need for luxury brands to use SM strategically to use the complex nature of SM in a positive way. For making SM a main strategy luxury brands must follow guidelines and include theory models to help define clear objectives and implement strategies for SM accordingly”.

The above interview helped to gain insight on the work process of luxury brands it also highlights the importance of SM and it powers giving guidelines to the brand managers. It also shows the challenges faced by luxury brands in Indian markets and shows how luxury brands are adapting towards SM. It was observed that there is a lack of focus on the approach of SM platforms, hence there is a need to build a better SM Pyramid structure.

Conclusion The research findings relate to the objectives: Significance of SM on Luxury Brand Image: As per the analysis of primary & secondary research, it can be agreed upon that SM platforms play a significant role in enhancing the Brand Image of luxury brands. 95% of the customers are active users on popular SM platforms. These active users use these platforms to get more information about the brands and use SM platforms to share stories & experiences. 57% of the active users refer to available reviews of the products before making any purchase. The collected data helps prove that SM has a very strong and positive impact on the brand image of luxury brands in India.

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Success factors using SM by Luxury Brands As per the analysis of the Da Milano SM campaign on Facebook and various other successful SM campaigns such as the Art of the Trench campaign by Burberry, it can be concluded that the success factor for implementing SM campaigns can prove very successful for the brands. These campaigns not only help increase sales but also helps to create brand awareness and attract new customers.

Challenges of SM by Luxury Brands in Global Markets International Luxury brands operate in India through their Indian partners, for example, Jimmy Choo, Canali, Christian Dior. These brands reply on their global SM campaigns and focus on posting seasonal sales, collection launch updates on Facebook and Twitter. Few brands such as Burberry, Hermes realize the need for a localized SM strategy for India.

India is a vast market with varied customers. The Indian retail sector is still an unorganized sector hence brands must concentrate on a localized SM strategy to achieve optimum success. Brands must not just use SM platforms for generic updates but also organize campaigns to help engage with their customers to overcome the biggest challenge faced by luxury brands on SM platforms, namely the need to touch and feel.

Effective SM platforms There are many popular SM platforms for luxury brands to engage in such as Twitter, Instagram, Facebook, Youtube etc. It can be concluded that Facebook is the most popular SM platform with the base of 25.5 million active users out of which 54% fall under the age group of 18 – 35 years, making Facebook the most desirable SM platform for luxury brands to get in touch with their desired target segment. Twitter, Instagram, Pinterest and Bloggers are also very popular platforms for luxury brands to help engage with their target segment.

Managerial implication for SM in India for Luxury Brands SM managers must understand the nature of their brand and align SM accordingly. There is a need to innovate, speed up and improve on the quality of campaigns by building a strong SM Pyramid to focus in the existing SM field, when setting up and implementing a SM strategy brand managers must follow the ACCESS model and to ensure optimal engagement brand manager must focus on the SM ambition model. Currently luxury brands use in house cross functional teams for SM campaigns, brand mangers must bring more structure and appoint a specialized team of SM experts and form a separate department altogether. SM capabilities and specializations will also lead to more insights and innovation. Luxury brands managers must consider SM as a part of their marketing mix and must also set a fixed budget for SM activities. Brand managers can have a ‘website showing the life history’ of the ‘brands or have live events’ networking through popular platforms like Facebook to bring consumers together and to fulfill the need to ‘touch and feel’ the goods.

Limitations Although this dissertation has strived t to preserve a comprehensive executing of the subject of research, some limitations must be acknowledged. The first drawback to this 45

subject is the lack of matter written on the luxury fashion industry using Social Media. This leads to the creation of new questions and scales that accommodate the key factors that are directly related to the SM as a marketing tool for luxury brands. Moreover, the research provides insights to a fast phasing industry with a constant change and development of environment. This limits the research to a restricted validity with need for on-going research and attention.

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Appendices Social networks There are several social networking websites functioning today. The number of social media websites is increasing day by day. Social networks as the name suggests are social websites where users interact with each other sharing different media, news and contents (Adar et al, 2005). Social networks are based on platforms some of the most outreaching social network platforms are as follows: Facebook By far Facebook is the most famous social website in the world. It was launched in 2004 and it has been able to accumulate 1.23 billion users under its badge in January 2014 (Dominic Rushe, 2014).

Twitter Its also called the ‘SMS of internet’ it was launched in 2006 and since then it has gained mass popularity with its users being over 500 million in 2012 (Twitter.com) Instagram Instagram is an online social site that allows its users to share pictures and videos it was launched in 2010 and has 100 million active users (Instagram.com).

YouTube YouTube is social video sharing website which was founded in 2005. YouTube is the biggest social site for sharing videos it enables its users to upload and view videos online (www.youtube.com) Mobile application software Mobile apps are software’s that are made for specific smartphones and tablets and computers. Apps have also emerged to be a part of social media. Today luxury brands are making their own global apps in order to connect with their consumers.

102 billions apps were downloaded in 2013 (Evans, 2010).

Questionnaire Luxury brands What role do luxury brands play in your life? How important are luxury brands in your life? Why? How would you define luxury brands? Are there more than one definition?

Do you consider yourself a luxury brand purchaser? Why? How often do you make luxury brand purchases? In what categories? Why? How do these purchases make you feel? Why? Do you find it important to show that you possess and purchase luxury brands?

Why/why not?

Social Media Are you aware of the term Social Media? How do you see and how can you define Social Media? Do you consider Social Media part of your life? Why/why not?

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Do you see Social Media a channel of information and communication? Why? Do you see SM a purchasing channel? Why? Do you see SM a combination of these 3?

Why? Is Social Media an influencer in your regular purchases? Why/why not/how?

Impact of SM over luxury industry Do you think SM can be a proper marketing tool for the luxury industry? Why/ why not?

Would you like to see your favorite luxury brand active on SM? Why/why not?

In case your favorite luxury brand would be active on SM would your perception of the brand and brand image change? Why/why not/how?

Interview with Mr. Rohit Juneja The interview consists five questions that will help us understand how these companies work towards social media marketing and will help to achieve the objectives of this report.

The questionnaire was sent and results were received through email. The questions include: What is the need of social media engagement amongst luxury brands in India?

What according to you are the most successful social media platforms for luxury brands in India?

How does social media marketing efforts fit in with other marketing campaigns?

How are departments managing social media?

What is the future of social media marketing in organizations?

How do organizations engage with their social communities?

How do organizations use social media ads?

Social Media user Profile in India The report further revealed that 70% of active SM users belong to Generation Y which covers the age group of 18 – 35 years. This is very popular market segment for luxury brands to explore in India. Brands like Burberry, Gucci have targeted this market segment and have achieved reasonable success, which could also translate into a goldmine of opportunities for luxury brands in India. This market segment consists of million of existing and potential future customers as well as their intricate sociocultural attitudes, leading towards rich market intelligence data in a cost effective way.

Further scrutiny of the Vizisense report revealed that over 90% of the active SM users on the web have an annual income under ÂŁ10,000. Other researchers suggest that it is safe to say the active SM usage in India is 8% of all the users.

Statistics also reveal 60% of the SM users on the web in India are from Non metro cities, underlining the wide coverage of the network. It is further stressed that early adapters towards SM platforms belong to metro cities, but tier 2 and tier 3 cities of India show a 49

promising growth rate. It was also observed that more than half of Indian’s active users on SM platforms fall under the age of 35 years old and these customers are affluent, well travelled, young segment of the market share that they consume luxury on a regular basis.

This target market segment is considered to be the most active of consumers on the web compared to other age groups. They actively update their social profiles and share recent purchases or desired products with their contacts on the same platforms. Such factors reveal the growing influence of SM on Luxury brands in India and also show the way for creating appropriate strategies and enhanced formats for including SM as a vital marketing tool.

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An Exploration of Market Entry Methods and Critical Success factors for High Street UK fashion Brands to maintain a successful Presence in India.

Anshumaan Tyagi Research Methodology The research involved a pragmatic research philosophy since this study needed to be explanatory in order to identify and assess the causes that influence the success and failure of a UK fashion brand entering or present in India (Creswell, 2009). The pragmatist stance supports the investigation using a mixed method approach (See Figure 1) of concurrent quantitative (broad numeric trends through reports, government data) and qualitative (detailed views through an interview with brand managers, store managers) forms of data collection (Saunders and Lewis et al., 2009). This approach ensured that each objective is addressed through a valid and reliable method, each technique informing and reinforcing the other, yielding different results and perspectives (Creswell, 2009).

Mixed Method Approach

Figure 1. Source: own Archival research and interviews were used to establish the historical perspective as well as the current industry view to the entry methods and Critical Success factors (CSF) for long term success (Saunders and Lewis et al., 2009). This was applied and adapted to develop a strategy for long term success of British Brands entering India.

This research was based on primary and secondary research.

Primary Research Since the aim of the research was to have a 360 degree perspective of success and failure of British brands in India. It was essential to gain qualitative data which would be done via interviews to gather initial data (Collis and Hussey, 2009).

Thorough in-depth face to face interviews of four industry professionals were conducted; each lasting between an hour and half, keeping in mind the explorative nature of this study.

These were professionals working for international brands in India and from international marketing teams from UK brands which are currently present or in the process of expanding to India.

Interviews were analysed to provide a balanced knowledge of the entry methods and critical success factors for UK brands to maintain their successful presence in the Indian Market.

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Secondary Research Secondary research included researching existing data in areas of retail internationalisation, franchising, licensing, joint ventures and other entry methods, government policies, FDI policies and its effect. Research was conducted from journals, books, internet articles, news reports, and reports of Indian retail sector, reports on growth of Indian economy, consumer confidence, and urbanization and apparel brands released by credible consultancies (Sengupta, 2008, BMI Report 2013, Mc Kinsey, 2010, The Hindu Business Line, Euromonitor, 2012). The first phase for this research was to explore the opportunities and threats present in the Indian market.

Findings Opportunities & Barriers to Entry India’s retail market is expected to exceed 1.3 trillion USD by 2020 from the current market size of 500 billion USD. Market research firm Booz & Co expects organised apparel retail — which accounted for 17% of the $36 billion market in 2010 — to grow to 25% of the market by 2015 as the apparel retail industry, too, continues to grow by 5-10% in the same period (Kulshrestha, Thirdeyesight.in, 2013). That means an opportunity of nearly $10 billion awaits apparel industry players who decide to nest in the market for the next few years (Kulshrestha, Thirdeyesight.in, 2013). The country’s retail sector provides enough opportunities by supporting both absorption of new players as well as expansion of the existing ones (The Hindu Business Line, Feb 2013).

The huge market size, rising economy, growing middle class, supporting government, consumer confidence, low cost of labour and less competition were identified as pull factors of the market. While cultural diversity, infrastructure, expensive retail locations, inexperienced retail work force, tax regulations and import duties were identified as push factors or barriers to entry for Indian Market.

Push and Pull Factors after Macro Analysis of Retail Environment of India Push Factors/Opportunities

Pull Factors/Barriers

Huge Market Size

Diverse Culture

Rising Economy

Tax Regulations

High Consumer Confidence

Expensive Retail Space Infrastructure (Roads & Supply chain) Availability of Retail Trained Human Resource

Low Cost of Labour Low Competition Government Favouring Foreign Investment

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Interview Findings The four firms are reasonably diverse with differing international experience, in terms of method of entry into the Indian market, and strategies to grow within the Indian Market. The sample firms also offer a range of differing target markets, and are not competitors within the Indian Market.

Company A is a well-established sportswear brand owned by the most famous football club of English Premier League and sells it official merchandise. It operates all over the world, the brand opened its first store in India in Dec 2010 and has 12 stores and Company over 100 point of sale across the country. It is positioned in India A as a premium brand while it is positioned as a mass market brand in its domestic market. The football club has 20 million fans in India and the brand wants to capitalize on this big number which is rapidly growing

Company B

Company B is a lifestyle brand, originating from Paris. The company is named after its founder designer and operates in the premium segment. It operates internationally via whole sale method and has entered India via licensing. The company is positioned in India as a formal wear brand and operates in the premium segment. The company opened its first store in 2012 and has 5 stores and 25 point of sales across the country.

Company C

Company C is a major high-street France-based fashion retailer.

The brand has 1000 stores in countries, including 500 in France.

It is a complete menswear lifestyle brand offering formals, semi formals, casual wear and sport wear. It opened its first store in India in 2008 and now has 36 stores and around 112 point of sale in shop in shop segment and is present in 26 cities in India.

Company D

Company D is a major high street UK based footwear retailer. It is world number one in 'everyday footwear' and designs, manufactures and sells more than 50 million pairs of shoes every year. It is present in over 35 countries; it opened its first store in India in April 2011 and has 36 stores and around 500 point of sales. It is present as a high street brand targeting premium and mass market.

Observations from Interviews The expectation would be that companies are either pulled to a foreign market or pushed from the domestic market and move to a culturally similar market. This was not observed in the case of the four companies, Companies A and B moved to the market opportunistically by being approached by prospective partners, while Companies C and D entered the market because of its potential (pull factors). India was not culturally similar to the home market of any of the companies and they entered into India realizing the market potential.

In terms of entry mode, Companies A and B entered through licensing and both were approached by the Indian partner. Their partners had approached them to enter India and 53

the entry mode was suggested by the partner. The partner wanted licensing; they had retail expertise in the Indian market being one of the biggest retailers of the country and just wanted to pay royalties to the brand. Company A went through with licensing because they were not sure of the Indian market and wanted to test the market with a low control method.

Company B entered the market via wholesaling and chose licensing as an entry method on the advice of the Indian partner. The partner said that they got it wrong by bringing the brand through licensing because they had needed to invest a lot in brand building and store concept, since it was little known brand in India. Company B’s entry strategy put a serious financial burden on the partner. Company A had 20 million Indian followers; they would have entered with a more controlled method, had they entered through their own research.

However, entry mode choices also depend upon the financial capability of the companies which is not considered here and is one of the limitations of this research. Company’s C and D entered the market doing their research, were confident of its potential and choose a more controlled method of entry, joint venture. They chose to enter with the partner to understand the market, their consumers and gain access to retail locations.

In terms of strategies of operating in India and key factors to success, all the companies adapted in terms of pricing and positioning in the Indian Market. Company C also adapted their collections according to the market while company B launched a limited edition for the Indian Market. All the brands followed global brand & marketing guidelines and store concepts. Retail location was thought to be the most important factor in building brand image, spreading awareness and marketing of the brand. All companies either entered through Delhi or Mumbai. Company D said both cities are financial hubs and one should enter depending on where they can secure better retail locations. Local sourcing was only helpful once there is significant presence in the market and minimum order quantities can be met. Company C also stressed importance of festival periods in India and adapted their buying plan accordingly. Online distribution was important for all the brands as well as presence on social media. Digital was an important part of Company C’s strategy while Company D was in the process of implementing a digital strategy. PR, product place, newspaper advertisements and magazines were main marketing tools for the brands. All the brands enjoyed the support of their local partners. The partners helped them understand Indian consumers, develop manufacturing relationships, score retail locations and also helped them to distribute via shop in shops methods through department stores run by the partners.

Conclusion The following observations can be drawn from the above: Brands should enter via either joint venture or franchising as these two methods provide them with control over their brands and they can overcome barriers like cultural diversity and government regulations with the help of local partners. Company C and D also supports the above observation.

Companies C and D entered the Indian market through joint ventures as they wanted to protect their brand principles and gain local knowledge with the help of their partners.

Research from the survey also concludes that joint ventures are the predominant entry choice. Most wholly owned subsidiary fashion retailers in India have changed their strategies after being present in the market and gaining few years’ experience and knowledge. This can also be observed in the case of Company C who has changed their operating model from joint venture to wholly owned subsidiary after staying in the market for 5 years.

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Luxury brands have entered India either by franchising or joint venture. Luxury brands are in the process of changing or switching their operating model from franchising to joint ventures. Burberry, Louis Vuitton and Canali have all switched to joint ventures. High Street brands that target middle class consumers enter mainly through joint venture and switch to wholly owned subsidiaries after gaining knowledge of the Indian market. Celio, S.Oliver, Nike, Adidas, Reebok, Puma, Levis, Promod, Forever 21 and Marks & Spencer have all shifted from their initial entry method of entry.

Key Factors to Success in the Indian Market Companies A, B, C and D focus on the importance of brand image, retail location, are adapting in terms of price and positioning, collections and product mix cited as critical to success. It is important for fashion brands to consider that whilst they are well known brands across the globe, in India, they are still new. Keeping this in mind a launch strategy should be created to raise awareness of the brands’ global stature, connect to the consumer and create a buzz in the market before the opening of stores.

Retail location is key, it helps in building brand image and increases awareness of the brand. The brand should look for locations to open their first stores in Delhi or Mumbai, as both cities are financial hubs. Entry should be via the city providing the best location (Country Manager, Brand D).

Selection of & relationship with the partner is a critical factor as brands need partners to understand Indian consumers, tax structure and sourcing norms. Case studies of company A, B, C and D show the importance of partners, partners helped them to distribute through multi brand stores and helped the brands gain significant presence in India within a short duration. It is important to choose the right partner as many joint venture partnerships have broken down in India because of Indian partners (Kulshrestha, Feb 2013). DLF broke its joint venture with Giorgio Armani in 2009. Murjani’s parted ways with Jimmy Choo and Bottega Veneta (Kulshrestha, Thirdeyesight.in, 2013). Devangshu Dutta, CEO of retail consultancy firm Third Eyesight says that change in partnership halts the progress of the brand. Darshan Mehta, CEO of reliance brands explains, “most partnerships break as building a brand requires a long term gestation period and Indian partners are not ready to take the loses for a long time (Kamath, Aug 2012).” Therefore it is critical to choose a partner who understands the market, understands the brand and has the same long term objective as a brand (Kamath, 2012).

Marketing Strategies for Long Term Presence in India Case Studies of companies A, B, C and D stressed the importance of distribution via shop in shops as an effective method to increase awareness and presence in the country. Online distribution was important for all the brands as well as presence on social Media. Digital was an important part of Company C’s strategy while Company D was in the process of implementing a digital strategy. PR, product place, newspaper advertisement, magazines, events were main marketing tools for the brands. On qualitatively analysing the store manager survey; retailing, branding and marketing strategies of fashion brands present in India were identified.

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The table below lists the key factors of success for the Indian Market identified by the research.

Key Factors to Success in the Indian Market Choosing the Right Partner Finding the Retail Location Building Brand Awareness Implementing Successful Launch Strategy Adaptation in terms of price, positioning, collections Use of Marketing Techniques i.e. PR, Social Media, Product Placement Distribution to gain significant presence in the country

Implications for Industry This aim of this research is to inform fashion retailers planning to enter India. It provides them with the opportunities present in the Indian market, barriers to entry, entry mode choices and key factors to success. The study will help fashion brands understand Indian market conditions, help them choose the right entry method and will further help them to strategize how to enter and expand within the Indian market.

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Collis, J. & Hussey, R. (2009) Business Research: A Practical guide for Undergraduate and Post Graduate Students. 3rd ed. Palgrave Macmillan Creswell, J.W. (2009) Research Design: Qualitative, Quantitative, and Mixed Methods Approaches, 3rd edn., London: SAGE Publications Ltd. Deloitte (2012). Foreign Direct Investment in Retail Trading. Deloitte.

Euromonitor (2012). Consumer Lifestyles in India. Euromonitor International. London: Euromonitor International. Global Market Information Database [online] March. Available at: <http://www.portal.euromonitor.com> [Accessed Nov 25 2013].

Kamath, Aug 2012 Kamath, R. 2012. Brands is a long gestation business, needs deep pockets to grow: Darshan Mehta. [online] Available at: http://www.businessstandard.com/article/companies/brands-is-a-long-gestation-business-needs-deep-pocketsto-grow-darshan-mehta-112082000072_1.html [Accessed: 29 Nov 2013].

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Kulshrestha, T. 2013. Third Eyesight - Articles - Changing Partners | India | retail | fashion | FDI | international brands | franchising | joint-ventures | partnership. [online] Available at: http://www.thirdeyesight.in/articles/changing-partners.htm [Accessed: 29 Nov 2013].

Lu, Y., Karpova, E. and Fiore, A. 2011. Factors influencing international fashion retailers' entry mode choice. Journal of Fashion Marketing and Management, 15 (1), pp. 58--75.

McKinsey Global Institute (2010). India’s Urban Awakening: Building inclusive cities, sustaining economic growth. McKinsey Global Institute.

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Picot-Coupey, K. (2006), “Determinants of international retail operation mode choice: towards a conceptual framework based on evidence from French specialized retail chains”, International Review of Retail, Distribution and Consumer Research, Vol. 16 No. 2, pp. 21537.

Root, F. 1994. Entry strategies for international markets. New York: Lexington Books.

Saunders, M., Lewis, P. and Thornhill, A. 2009. Research methods for business students.

Harlow: Financial Times Prentice Hall.

Saxena, T. and Dutta, D. 2009. International Fashion Brands: India Entry Strategies | Third Eyesight| Third Eyesight, Management Consultants, Retail, Consumer Products, Fashion, Textiles, Apparel, Lifestyle, Food, Grocery, FMCG, India, India Entry, Consultant, Strategy, Marketing, Branding, Retailing, Supply Chain, Sourcing, Design, Product Development, Recruitment, Consultant. [online] Available at: http://thirdeyesight.in/blog/2009/05/09/international-brands-india-entry-strategies/ [Accessed: 29 Nov 2013].

Saxena, T. 2011. International Fashion Brands in India–2011: Auguring a New Wave | Third Eyesight| Third Eyesight, Management Consultants, Retail, Consumer Products, Fashion, Textiles, Apparel, Lifestyle, Food, Grocery, FMCG, India, India Entry, Consultant, Strategy, Marketing, Branding, Retailing, Supply Chain, Sourcing, Design, Product Development, Recruitment, Consultant. [online] Available at: http://thirdeyesight.in/blog/2011/02/07/international-fashion-brands-in-india-%E2%80%932011-auguring-a-new-wave/ [Accessed: 29 Nov 2013].

Saxena, T. and Dutta, D. , 2013. Entry Strategy of Global Brands – Impact of FDI | Third Eyesight| Third Eyesight, Management Consultants, Retail, Consumer Products, Fashion, Textiles, Apparel, Lifestyle, Food, Grocery, FMCG, India, India Entry, Consultant, Strategy, Marketing, Branding, Retailing, Supply Chain, Sourcing, Design, Product Development, Recruitment, Consultant. [online] Available at: http://thirdeyesight.in/blog/2013/01/21/entrystrategy-of-global-brands-impact-of-fdi/ [Accessed: 29 Nov 2013].

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economy/marketing/opportunity-in-retail-sector-huge-for-variousformats/article4443096.ece (accessed 27 Nov 2013).

Wigley, S., Moore, C. and Birtwistle, G. 2005. Product and brand: critical success factors in the internationalisation of a fashion retailer. International Journal of Retail \& Distribution Management, 33 (7), pp. 531--544.

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Section 4 - Research papers and essays Complex Consumer Culture -The Indian Consumer Rehka Dar, Anuradha Modak and Anjuna Dhir India India is a multilingual society, having 16 major languages and ten non-comparable scripts.

For the consumers, the semantic differences create problems of meaning and comprehension & for retailers; multi-lingual’s presents some challenging issues of translation, semantic representation in advertising and package design. The multi- cultural India is diverse but it is not culturally heterogeneous (Dumont l986, p. xiv)). Various practices relating to food, clothing , the use of symbolic forms ,rituals have a regional as well as sub –cultural variations, the common thread however exists both at the religion – social and semantic levels India is multi-religious. The majority (82%) are Hindus, followed

by Muslims (12%), and Christians (4%). The rest include Sikhs, Budhists and Parsis India is witnessing some of the most significant changes in the economic and social status of women. The attitudes of women with respect to marriage, career, and their roles in the family and society are undergoing radical changes and there is considerable literature describing these changes (Liddle and Joshi l986, Sharma l986, Wadley l977). The changing roles of women is accompanied by similar changes in the family structure and household systems (Saradamoni l992) The clash between traditionalism and modernism, or the blending of the two, is a perennial theme in India, and this is visible in different ways depending on the social and historical contexts. One can find Indians who are traditional, or modern, or progressive, or even westernized or some combination thereof (Chakraborty l991, Srinivas l966). Similar labels are used by Indians to describe themselves, although the term "Westernized" seems the least favored. Indians use a combination of this terminology, to represent the notion that on some aspects of their lives they are modern, while on some other aspects, they are quite traditional. Among many middle-class Indians this ontological tension exists regardless of age or gender, signifying the fear of a possible loss of cultural identity in moving away from their imagined notions of being Indian.

In terms of the contemporary power structure based on political, social and economic means, but leaving the caste system aside for a moment, we describe India as a multilayered society. The layer significant for our study includes a variety of groups, the salaried middle class, professionals (lawyers, doctors, business managers, some bureaucrats, etc.,), small entrepreneurs, educationists and the like. It is this layer that is most significant from the point of view of social change. The changing values within the Indian context that are having an impact on the rest of the society seem to find their most resonance in this class of people. People in this category seem to be very ambitious, work very hard, and want to improve their financial condition. We regard this category of people most important for studying the changing consumer culture.

India has witnessed some unprecedented changes in the last two decades on the economic and social-cultural fronts. These changes have primarily been fueled by the structural adjustment programs. The economic liberalization pushed in the name of ‘free markets’ has 59

meant that multi-national corporations have free access to the Indian market and its cheap labor (Kurien 1995).

Indians in the last couple of decades have witnessed an unparalleled proliferation of consumer goods and international brands. Researchers are arguing that the country is witnessing a surge in consumerism, which is closely linked to economic liberalization (Venakatesh 1994). The period has also witnessed a decline of Indian brands and public sector undertakings, with international private capital increasingly taking roots. As the Indian economy becomes part of the world capitalist system, there is a shift away from building a self-reliant welfare state to a ‘market’ driven consumer goods economy (Kurien 1995, Mankekar 1999). This rising consumer expectation, created with the change in economic policies has led to the strengthening of the social acceptance of consumption, as it increasingly becomes means of defining social status India has the youngest population profile amongst the fast growing economies of the world.

There are a lot of young people, in different income segments and locations, who are influencing their parents' spending, or spending their own money. On the other hand, the adult population is rapidly changing their consumption behavior. Besides this, rural customer has grown beyond “rural”. This makes the whole market a very complex – difficult to understand.

Current Landscape of Retail in India The Indian government does not recognize retail as an industry. In India traditionally, 98% of the retail sector consists of counter-stores and street-vendors. With no large players, inadequate infrastructure and a small buying population that believed in saving rather than spending, Indian retail did not attract the interest of large corporations.

The 21st century came as a welcome century for the retail sector. Recognizing the shortterm and long-term growth of retail in India, a number of domestic business giants have entered the retail industry or are planning to do so in the near future. Some like Pantaloon Retail, Shopper’s Stop and Pyramid Retail have been in the industry for a decade. Others like Reliance RetailLtd.(RRL) have just entered and opened up a number of stores across the country. Still other domestic players like Birla and Bharti are planning their foray into this sector. In fact retail in India has also attracted global giants like Wal-Mart who have also indicated their interest in the sector by forming a Joint Venture with Bharti. Each of these domestic and international retail giants have or will introduce a number of modern retail formats like malls, hypermarkets and supermarkets. Initial consumer response to these novelties in the retail sector has been very promising and as the middle-class continues to grow, organized retail in India is sure to see large returns.

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Unorganized retail in India Retail in India is essentially “unorganized.” 98% of the retail industry is made up of counterstores, street markets, hole-in-the-wall shops and roadside peddlers (See Exhibit 11 for sector-wise break-up of Unorganized Retail). The term “unorganized retail” is better understood when comparing this form of retail to the organized retail that one is familiar with in developed countries. Unorganized retail is characterized by: 

Family-run stores.



Lack of best practices when it comes to inventory control and supply-chain management.



Lack of standardization.



Essentially a sector populated by anyone who has something to sell

Wall Graffiti Delhi

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Consumer Demographics India has a large and expanding young population with a median age of 24. India is witnessing an expansion of middle-income consumers as well as increasing urbanization and, growing numbers of nuclear and dual-income families. India is also experiencing a steady transformation of its food retail sector, rising numbers of restaurants and fast food chains, and greater exposure to international products. These changes are leading to a rapid change of India’s food consumption and expenditure habits. Assuming the Indian economy grows at a real compound rate of 7.3 percent per annum from 2005 to 2025 (McKinsey report, 2011) the number of households categorized as “seekers” (with real annual household disposable incomes of $4,380 to $10,940) and “strivers” (household disposable incomes of $10,940 to $21,890) would grow to an estimated 583 million people (128 million households) by 2025. Furthermore, middle-income growth is expected to spread beyond India’s largest cities to mid-sized and small cities. Average real household disposable income is expected to grow from $2,527 in 2005 to $7,086 by 2025, a compound annual growth rate of 5.3 percent. In fact, India is on track to become the world’s fifth largest consumer market by 2025. With incomes growing, the standard of living is improving. Increasingly, consumers are now realizing the importance of the impact of food on their health and well-being. The modern Indian lifestyles and lifestyle-related diseases, as well as limited time to cook at home, are also expected to create demand for health and wellness products in the coming years. These factors, coupled with environmental issues and growing resistance towards genetically modified food products, are predicted to accelerate growth in the organic food category.

Indian Consumers The Indian consumer has undergone a remarkable transformation. Just a decade or two ago, the Indian consumer saved most of his income, purchased the bare necessities and rarely indulged himself. Today, with the changing lifestyles and with a higher income, there is a high use of credit cards, exposure to the shopping culture of the west and a desire to improve their standard of living. The Indian consumer is spending like never before.

Organized retail with its variety of products and multitude of malls and supermarkets is fueling his addiction. His new mentality, in turn, is fueling the growth of organized retail in India. The buying intention and behavior has changed a lot with the changing preferences.

Young Shoppers India’s population is young. Most consumers have grown up with television, the internet, and have been exposed to the standards of living and consumer culture abroad. This generation is also making money at a younger age and lots of it, thanks to call centers and other avenues of employment opening up that cater to students in college and schools. As a result they are ready to spend most, if not all of their income on apparel, accessories, and electronics.

Higher Incomes Liberalization of the country’s economy has brought a number of employments opportunities. With the entry of a number of multinationals and the expansion of domestic corporations, job prospects in the country are looking up. As a result, incomes and consumption are projected to increase rapidly over the next couple of years (See Exhibit 8 for the personal disposable income and Exhibit 9 for the private consumption per head in India). This sets the stage for a very exciting and promising retail market in the future

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No Money, No Problem The finance sector has already seen a huge expansion. Unlike a decade ago, credit cards and short-term loans have become easily accessible and have contributed to the emergence of a consumer culture in India. Credit card rewards schemes, flexible financing options and all the other common lures are tempting the Indian consumer to shop. With loans for everything from a home to an automobile freely available, the Indian consumer can start spending on big-ticket items that were traditionally within his reach only after years of savings.

Table 1: Issues for managing consumer in Indian retail environment (KPMG, 2011) The NET Savvy Customer Online retail business is another format which has high potential for growth in the near future, because the online retail segment in India is growing at an annual rate of 35 per cent. As per FICCI, this would take its value from Rs 2,000crore (US$ 429.5 million) in 2011 to Rs 7,000 crore (US$ 1.5 billion) by 2015. This development of consumer preferences has led traditional groups like the Tata Group to look at the sector aggressively forming Infiniti Retail, that operates its consumer durables and electronics chain of stores under the 'Croma' brand, to tap net savvy consumers. Similarly, the Future Group, that operates a dedicated portalâ&#x20AC;&#x2DC;Futurebazaar.comâ&#x20AC;&#x2122; for online sales, has revealed that it is targeting at least 10 per cent of the company's total retail sales through the digital medium.

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The NET Savvy Customer

Table 3: Online Retail- Growing fast and Tapping true Potential (Wazir Advisors, 2012) Changing Scenario and the Customer Several fascinating changes are underway in India that will fundamentally transform how Indians will shop after just a few years, and thereby fundamentally alter the composition and the shape of various formats of retail businesses. Underpinning this transformation in the making are some key consumer behaviour-altering factors as per the Business Standard Technopak study of the current year. These factors are Growing Time Poverty The first and perhaps the most important of these six is the increasing time-poverty being experienced by the core-consuming class living in urban India. While the very rich are able to "outsource" many of time consuming activities, the middle classes face more pressures on their time since they juggle between jobs, longer commutes etc attending to the myriad needs of their families, social obligations to attend to and the modern lifestyle.

Growing Inflation Sustained double-digit consumer price inflation across India for some time, most Indian consumers (other than the rich) have seen nearly stagnant inflation-adjusted incomes. As a result, there are a growing number of middle and upper-middle income consumers who have started to trade down and are increasingly looking for cheaper options.

Changing Demographics With the 15-34 years age group now comprises the largest demographic grouping in India, at about 435 million, the majority of Indian consumers today (and even a larger majority in 2020) have totally new needs and aspirations, and just about no legacy relating to consumption. They are generally more confident about their future, notwithstanding the 64

current economic challenges, adopt technology much faster, and more adventurous and more heterogeneous when it comes to experimenting with new products, brands, and retail channels.â&#x20AC;¨ Complex Decision making The next most important consumer behaviour-altering factor will be the emergence of a much more complex mix of mediums that will be used by an overwhelming majority for information collection and decision-making. Within the next five years or even earlier, the average Indian consumer will be seamlessly using a combination of print, electronic, outdoor, digital social media, internet, mobile, point-of-saleâ&#x20AC;Śand even workplace interactions for deciding what to buy, when to buy, where to buy from, and what price to pay, all with a background of increasing sensitization to ethics, environment, and social responsibility and a growing GDPâ&#x20AC;Ś.

Needs Vs Aspirations More Indian consumers are segmenting their spending priorities between "needs" and "aspirations". The former include food and grocery, most categories of fast moving consumer goods, basic textiles and footwear, consumer durables and appliances, while the latter includes (globally) branded clothing, home decor, bathroom and kitchen fittings. The consumption pattern shows a shift from need based products to discretionary spending

Table 4 - Consumption Shifting from Necessities to discretionary Spending ( Wazir Advisors, 2012)t:/ Underpinning this transformation in the making are six key consumer behavioraltering factors (arvind.singhal@technopak.com) The first and perhaps the most important of these six is the increasing time-poverty being experienced by the core-consuming class living in urban India. While the very rich are able to "outsource" many of their mundane time-intensive activities to a retinue of attendants and 65

assistants, leaving them with more time for leisure, recreation, and shopping (and the very poor may have the time but no disposable, discretionary spending earnings), the middle classes face more pressures on their time since they juggle between job (or jobs as more women join the workforce; longer commutes; attending to the myriad needs of their children such as tutoring, pickups and drops for coaching; birthdays, anniversaries, marriages and other social obligations to attend to; the peer pressure of taking more out-of-town breaks and vacations; higher cost and reducing availability of trained domestic help; bend towards nuclear families . Indeed, if time could be bought, it would command a steadily growing premium from the typical middle-class urban Indian.

The second factor is the impact of sustained double-digit consumer price inflation across India. From a barely comfortable 5 to 6 per cent range of yesteryear, the average Indian Consumer has recently seen several successive years of double-digit inflation. With the economy also slipping to a very low-growth trajectory, most Indian consumers (other than the rich) have seen nearly stagnant inflation-adjusted incomes. As a result, there is a growing number of middle and upper-middle income consumers who have started to trade down and are increasingly looking for cheaper options. With no immediate sign of inflation being tamed, this trading-down is likely to continue and with this, there will be an increasing pressure on brands that are somewhat more premium positioned, and on volume growth of product categories where the consumption can be delayed or deferred (for example consumer durables, two and four wheelers, etc).

The third important factor is the fact the 15-34 years age group now comprises the largest demographic grouping in India, at about 435 million. The next big group is the 1-14 years comprising about 345 million. The 35-59 years group now accounts for just about 27 per cent (about 325 million) of India's population. It is no surprise that the majority of Indian consumers today (and even a larger majority in 2020) have totally new needs and aspirations, and just about no legacy relating to consumption. They are generally more confident about their future, notwithstanding the current economic challenges, adopt technology much faster, and more adventurous and more heterogeneous when it comes to experimenting with new products, brands, and retail channels.

The fourth factor is that more Indian consumers are segmenting their spending priorities between "needs" and "aspirations". The former include food and grocery, most categories of fast moving consumer goods, basic textiles and footwear, select categories of consumer durables and appliances, for example refrigerators, washing machines, TVs, and small kitchen gadgets etc; while the latter includes (globally) branded clothing, home decor, bathroom and kitchen fittings, accessories such as handbags and eyewear, grooming and well-being, coaching and education etc. In the need-based product categories, there is diminishing branding power and weakened pricing power. While there will be an increased volume of consumption in most such categories, there will be a lower value-denominated increase. On the other hand, aspiration-based spending categories will offer somewhat superior pricing power to the marketers.

The fifth factor will be the exponential increase in the internet connectivity across urban and rural India. From about 125 to 150 million unique internet users in 2013, India will probably see this number grow to over 300 million by 2016, and perhaps over 650 million by 2023 with smart phones and tablets being the primary device for accessing internet, be it for information collection or for shopping or even for entertainment and socializing.

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The sixth and last of the most important consumer behavior-altering factors will be the emergence of a much more complex mix of mediums that will be used by an overwhelming majority for information collection and decision-making. Within the next five years or even earlier, the average Indian consumer will be seamlessly using a combination of print, electronic, outdoor, digital social media, internet, mobile, point-of-sale, and even workplace interactions for deciding what to buy, when to buy, where to buy from, and what price to pay. To complicate this further, there is going to be a steady increase in the subliminal impact on this decision-making from external issues relating to ethics, environment, and social responsibility.

While the Indian consumer is undergoing all of these (and some more) changes, there is one major macroeconomic reality that will have a major impact on the future of retailing in India. This reality is that even at GDP growth of 4.4 per cent in the last quarter, the Indian economy continues to be a relatively fast growing one. It certainly has the potential to settle down at a compounded annual growth rate of 6 per cent over the next decade and thereby, continue to attract the interest of many more (large) Indian business houses and international retailers. Hence, India's retail landscape will see many new entrants in the coming years.

Erratic consumer behavior makes retailers cautious Indian organized retail is constantly in a state of dilemma, with consumers changing their buying behavior like a chameleon. From apparel, accessories, electronics to consumer durables, retailers across categories are unable to gauge consumer behavior and have taken a cautious approach when it comes to stocking fresh inventories.

After the economic slowdown of 2009, retailers are trying their best to woo customers back to malls, stores and shopping centres. Unlike in the past, even consumers are sticking to seasonal discounts and bargains to make their yearly and other purchases leaving fresh stocks untouched. So players are further forced to offer schemes on new merchandise to keep the cash registers ringing. Customers habituated to buying during the sale period keep themselves away even from window shopping when fresh stocks arrive.

Industry witnessed heightened activity during the end of season sales but the festive shopping that starts before Onam and generally boosts the morale of the retail industry received lukewarm response. Sales were the dullest in over 20 years. Now apparel players like Indus League, Louis Philippe and others are stocking their shelves cautiously to avoid inventory pile up.

Retailers are also adopting various gimmicks to boost sales. Louis Philippe, for instance, kept fresh stocks in the first two weeks of August while its end-of-season sale was on so that the fresh merchandise also got attention. And some retailers linked the inventory management at the shop floor to employee incentive program. Though some players like Madura Garments and Arvind Brands feel that stocking less merchandise can be a disadvantage since the consumer may walk into rival brandsâ&#x20AC;&#x2122; store for shopping. However, keeping the mood of the consumer and economy in mind, the industry is willing to take the risk. (Fashion United , 09 October 2013)

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Decoding Consumer Behavior

Fig: 1 Decoding the Indian consumer (KPMG, 2011)

Action Plan for the Brands Targeting Indian Consumer The new Indian consumer is no longer the shy, hesitant, slightly reluctant consumer of yester years. The changing century has changed not only the generation but also the mindset and the aspirations. The new consumer comes without the baggage of past century of pre- independence subjugation or the post-independence struggle and the caution. Yet this consumer is still seeped into the cultural milieu that is uniquely Indian.

The Brands targeting this consumer need to look at this market as no other. Giving them all fhttp://www.arts.ac.uk/media/arts/about-ual/ual-awarding-body/documents/Guidance-forGood-Practice-on-Assessment-and-internally-assessed-units-v1.0.pdfacilities, since this consumer is evolved and aware.

According to KPMG, the Indian consumer is to be courted with all services , whatever possible, provided the best that is possible, in the framework that is his unique framework..

That is what shall get him to unleash his latent spending power to make the Industry a giant.

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Several fascinating changes are underway in India that will fundamentally transform how Indians will shop after just a few years, and thereby fundamentally alter the composition and the shape of various formats of retail businesses, especially those catering to urban and semi-urban shoppers, and even the relatively large (say, the top 50,000 of the estimated 650,000) village References: (2012) Indian Apparel Market- Current Status and Future Outlook ,Wazir Advisors ( 2011) Retail Sector Report, FICCI (2013) Singhal, Arvind, Technopak, BS Report

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Sustainable Buyer Seller Relationships in the Dynamic Fast Fashion Industry – A UK/India Perspective Lynne Hammond and Rekha Dar Abstract Buyer Seller relationships are increasing becoming fragile in today’s world of Fast Fashion.

The processes that need to be managed to take an idea to shop are complex and require dynamic collaborative efforts to ensure that the demands of sophisticated consumers are met. The competitive pressure and business challenge for the retailer is to provide consistent new fashionable products fast, at an affordable price, and to a good quality. The UK retailer - India apparel manufacturing business relationship has been strong for over 20 years with the UK relying heavily on India for flexibility of manufacturing and India relying on UK for export business of key high street fashion brands.

An exploratory study was undertaken by the faculty and students at the London College of Fashion and the Pearl Academy of Fashion aiming at gathering, analyzing and presenting the data on the buyer-supplier relationships, using the three sourcing strategies as a framework. Data was collected, analyzed and shared by both PAF and LCF students and staff in four stages across both countries.

The findings are presented as a series of suggestions for both industry and education in order to prepare, construct and sustain the relations between buyers and sources of supply in India. The findings indicate that to increase competitiveness it is important that retailers and the manufacturers develop collaborative strategic efforts to manage pressures and challenges. The key benefits of developing and working with in a collaborative manner are related to access to new skills; knowledge and experience of managing complex processes; added value and extra benefits to clients and customers; and increased business models that have sustainable and ethical practices. The relationships between the retailers and suppliers will have to change and become open, transparent and highly professional in terms of sharing information and communicating professionally to lead to a win-win strategy for both.

A sourcing handbook was developed to begin to start raising awareness of some of the capability gaps in the supply chain in particular pre-production, production and postproduction stages. Key indicators and directives were developed on “Preparing for a relationship, developing a relationship and sustaining a relationship” in this complex supply chain. Additionally this paper looks at how industry can find ways to build stronger relationships with academics and students to communicate the complexities of managing fast fashion and agile and flexible supply chains for the global fashion industry.

Literature Review The literature review has been undertaken under the following areas: India as an Apparel Global Hub; Global Value Chain Analysis; Fast Fashion Concepts; Speed to Market and Benchmarking. The literature review indicates the growing interest in how Indian is responding to sourcing linked to complex supply chains and how they are competing through improved CSR, and better product development strategies and professional management infrastructures.

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India a Global Hub for Apparels In view of the rising demand from Western markets, the Indian Government has fixed a target of achieving US$ 14 billion in garment exports in the 2011-12 fiscal year according to Rita Menon Textile Secretary. Menon speaking at the three day India International Garment Fair organized by the Apparel Export Promotion Council (AEPC) said that owing to high demand from both the usual as well as the newer markets, the Government looks forward to attaining the US$ 14billion mark in the apparel exports. During 2010, India exported apparel worth US$ 11.1 billion, which was 4.2 percent higher than previous fiscalâ&#x20AC;&#x2122;s year exports worth US$ 10.7 billion. (Tex Trends report February 2011) The apparel industry continues to be globalized; opportunities and challenges exist for all companies since the final phase of quota removal on January 1, 2005. While the retail sector continues to be dominated by large players, and trade liberalization has accelerated the race to find low cost global producers. Some industry analysts project that this will lead to further massive supply consolidation, whereby mammoth factories in low wage countries will directly supply retailers, thereby cutting out inefficient, non value-added middlemen. (A Canadian Approach to the Apparel Global Value Chain, March 2008) Integration of numerous suppliers in the Global Value Chain The apparel supply chain can be broken down into three major industrial segments based on the Canadian Apparel Industry Reports. (http://www.ic.gc.ca/eic/site/026.nsf/eng/h_00070.html)

Figure 1: Apparel Supply Chain Segments. (Canada Approach to the Apparel Global Value Chain) March 2008 This integration of numerous suppliers, producers and consumers into one business model in the form of a supply chain can yield significant benefits. However, none of the potential rewards will be achieved without effective supply chain management. This complex form of management requires extensive monitoring of supplies and frequent ordering of new inventory in order to meet customer demand. Further, we can break the value chain of a traditional apparel company into a series of key steps as follows:

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Figure 2: Apparel Industry Value Chain Segments (Canada Approach to the Apparel Global Value Chain) March 2008 The global value chain model highlights the many complex elements of the apparel industry (i.e. product development, innovation, market research, trend identification and setting, understanding of niche markets, highly educated workforces, marketing talent, etc.).

Whereas, these companies may not be well positioned as cost competitive manufacturers, in many respects, they should be better poised to take advantage of these other opportunities than low wage competitors. As a result, most of the companies currently view the future as outsourcing manufacturing at low wage environments when conditions are appropriate.

Fast Fashion A fast fashion system combines quick response production capabilities with enhanced product design capabilities to both design “hot” products that capture the latest consumer trends and exploit minimal production lead times to match supply with uncertain demand. In the fashion apparel industry Zara, H&M, and Benetton have increasingly embraced the philosophy of “fast fashion” retailing. (Passariello 2008; Rohwedder and Johnson 2008).

According to Cachon and Swinney (2009) a fast fashion system will combines at least two components: 1. Short production and distribution lead times, enabling a close matching of supply with uncertain demand (which we refer to as quick response techniques); 2. Highly fashionable (“trendy”) product design (enhanced design techniques). Short lead times are enabled through a combination of localized production, sophisticated information systems that facilitate frequent inventory monitoring and replenishment, and expedited distribution methods. For example, Zara, primarily a European retailer, produces the majority of its designs in costly European and North African factories (rather than outsourcing to less expensive Asian facilities), and continuously monitors inventory levels in stores to effectively match supply and demand (Ghemawat & Nueno 2003; Ferdows et al. 2004). The second component (trendy product design) is made possible by carefully monitoring consumer and industry tastes for unexpected fads and reducing design lead times.

Benetton, for example, employs a network of “trend spotters” and designers throughout Europe and Asia, and also pays close attention to seasonal fashion shows in Europe.

(Meichtry 2007) Speed to market and benchmarking Speed-to–market is a critical factor in new product success, especially for the apparel industries. Both independent companies and private brands are under pressure from consumers and retail channel demanding the right product at the right location –launched at the right time. The unique challenge for this industry is the sheer volume of style –color72

range –size stock –keeping unit variations that they must launch each season to stay competitive.

The speed of new product introduction can make all the difference between success and failure. Organizations now have shorter product life cycle in order to increase market share and maintain margins for longer. This helps extract higher return on development investment and more rapid payback. An organization can establish procedures and policies needed to improve speed to market, but these may prove ineffective without the tools necessary to assist each product function and ensure effective exchange of information between key shareholders. Those that do this successfully capture premium segments and reap larger market share .The temptation for the competition is to adopt the week new product introduction cycle as the desired de-facto standard.

According to Marshall (1997) there are two types of products: functional and innovative. In the apparel industry, this translates to ‘Basic’ and ‘Fast Fashion Products. Basic products have longer lifecycles, requiring a different model for speed to market. Fast fashion products have relatively unprecedented demand, short product lifecycles, but carry product margins that initially appear more attractive than those on basic product. Basic products require more efficient supply chains, which emphasize low cost and minimal inventories.

Fast fashion products, on the other hand, require buffered, quick response supply chains.

This cost tradeoff needs to be considered during the development of product strategy and positioning. Across both categories, cycle time is under pressure, but sensitivity varies based upon the model. All of these issues combine to increasingly challenge manufacturing and sourcing     

Frequency of style changes typical within factories Associated lead time requirements, with its impact on: Delivery schedules, Sourcing capital costs Managements’ short and long term strategies

Research Methodology Industry visits and interview/Survey in India In order to assess and understand the current market forces in operations, the partnership teams made a number of visits to manufacturers, retailers, design houses and warehouses.

An extensive survey was undertaken by 70 PAF students to raise awareness of the problems and challenges facing global sourcing and managing fast fashion supply chain processes.

Case Studies in India In order to understand the current ethical supply chain challenges being encountered by India manufacturers, three PG students from LCF undertook a ten-day research visit to New Delhi. They visited 10 companies to explore their Company background, Unique Selling Point and expertise, Buyer-Seller relationships and the future challenges.

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Case Studies in the UK In order to understand the UK retail/buyer perspective 3 visits were made to UK fashion brands during the first year of the project. The companies visited provide insights into how they work with Indian manufacturers.

Consumers and Lifestyle Research into Sustainable Fashion in the UK In order to understand the growing consumer trends for UK retailers to embed better sustainability practices into their company businesses and products, three students from PAF visited retail stores, exhibitions and designers who are championing green fashion movements.

Findings and Analysis Identification of the three key Sourcing Strategies used for UK/India Sourcing and Production Through the mapping exercise undertaken the findings have resulted in better understanding of the three key stages used in sourcing/manufacturing used by India manufacturers; as well as the three key sourcing strategies used. The apparel industry is identified as a buyer-driven commodity chain containing: retailers & manufacturers. This commodity chain is organized around five main segments: raw material supply, including: natural and synthetic fibers; the provision of components, such as the yarns and fabrics manufactured by textile companies; production networks made up of garment factories.

In order to ensure the concepts developed for the range for the upcoming season the Buyer/Brand offices broadly follow the three stages of sampling and approvals with the manufacturers. There might be an intermediately e.g. the buying office or the liaison office of the buyer/brand to oversee the smooth functioning of the process of sampling& approvals. The three categories are: Pre-Production This is broken down into 4 key stages: Stage 1: Samples made for the range development or the Prototype sample in the right fit and fabric. The designers, merchandisers, buyers and management as part of the finalization of the range concepts review the samples. Once the range is approved the second stage of sampling starts based on finalization of who will be the manufacturer (The major factors to evaluate the eligibility and suitability is based on price, quality and lead time).

Stage 2: The Manufacturer on receipt of the order confirmation will start the first fit sample â&#x20AC;&#x201C; i.e. known as Prototype sample. The fabric used in this case will be same as what the production fabric to ensure quality and garment manufacturing is right first time.

Stage 3: Once the first Prototype is developed it is approved for fit that is made in the most saleable size of the brand and the size set request comes in from the buyer. This is to determine and finalize the fit of all the sizes that would be mass manufactured.

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Stage 4: On receipt of the approval of fit for the size set the manufacturer proceed into the pre-production sample stage i.e. samples in all colour-ways made with the bulk approved fabric: bulk approved trims and the surface ornamentation/application if any as approved by the buyer. The supplier will not proceed into bulk manufacturing until he has approval of this pre production sample.

Therefore, to expedite and ensure no issues arise at this stage, various approval checks for bulk fabric quality; strike offs; lab dips; desk looms and trims are developed and send for approval with the bulk fabric to be cut by the manufacturer. Once the bulk fabric and trims are in house the fabric and trims are send for testing.

Production Stage This stage is broken down into six stages: Stage 1: Order bulk fabric on receipt of approvals strike offs, lab dips, desk looms Stage 2: Ensure the bulk fabric is received on time, is relaxed and stored correctly as well as segregated lot wise and inspected and lab tested.

Stage 3: Ensure the bulk trims are received on time and inspected and lab tested.

Stage 4: Pre â&#x20AC;&#x201C;production meetings are held to plan the production Stage 5: Fabric is segregated lot wise inspected and issued for bulk cutting, shade lots are made to ensure right matching of cut parts.

Stage 6: To ensure the production lines are designed to meet the efficiency as well as the right quality is maintained for thread, stitching & folders used for various sewing operations.

Post-production stage This has been broken down into four stages: Stage 1: Bulk washing of the apparels, if required by the buyer as specified (during the first sample development). To maintain the consistency of the desired effect & match the standards as approved by the buyer is the key area to be followed. All these are based on the standards approved and reflecting in the pre-production sample sent to the buyer in the pre-production Stage 2: The final finish consists of ironing, folding &packing to be followed as per the direction and approval from the buyer, this may have be approved as in the pre-production sample or instructed in the buyers hand book for the vendor or might be part of the technical package if any send by the buyer with the purchase order.

Stage 3: Series of inspections are conducted namely the Initial; the Midway, and the Final.

The initial & midway inspection can are carried by the quality assurance of the manufacturing units or the quality assurance personals of the buying office/liaison office whereas, the Final Inspection is conducted by the quality assurance personals of the buying office/liaison office or by a third party service provider that is nominated by the buyer.

Stage 4: Documentation & Shipping â&#x20AC;&#x201C; is the final activity that has to correct in order to ensure the documents comply with the norms of the country of export as well as the country 75

of import. It is imperative to get the right set of documents to avoid delay in clearance of the shipment at both ends.

Better understanding of the processes need to manage the buyer supplier relationship One of the key findings of the research has been the information gathered that relates to the processes involved in managing the relationship between the two players in the supply chain. The three key areas relate to preparing, constructing and sustaining the relationship.

Preparing for the relationship One of the key observations was the need for new retailer buyers to increase their knowledge of the whole supply chain so that they know the right questions to ask. This will lead to better communication and decrease issues related to lead times. For instance, lead times tend to change during the process because manufacturers donâ&#x20AC;&#x2122;t always make room for incidences, especially when they are pressured to deliver on time.

It would be beneficial if buyers could spend more time in the country in which they are manufacturing. Learning the culture will help with communication. For example, an issue that was raised a number of times is the difficulty in Indian culture to say no - which means that you need to approach asking questions in a different manner. When a buyer begins manufacturing in India a local buying office or liaison agency should be used. Or at the very least hire at least one local liaison to work directly with the manufacturers. Buying offices are there to mediate, especially for new buyers â&#x20AC;&#x201C; so it is a good route for them. Buyers and vendors need to understand their relationship is symbiotic. When buyers make demands, they need to be reasonable. They need to understand that the supplier is also trying to run a business, and in it to make a profit. When suppliers know it is a long-term job, they are comfortable and talk about their problems. If a supplier is made to believe it is a one-time job, they will not be as open to compromise. Indian manufacturers are ready and willing to innovate. They are more than just manufacturers; they are developing strong design capabilities, research and innovation, and marketing departments mixed in with manufacturing.

Constructing the relationship Buyers and manufacturers need to work together in the sampling stage. There needs to be a clear and honest conversation about costs and lead times. For example, if a product is going to take longer and cost more because of a detailed embellishment, that fact should be understood early on by both parties. Buyers need to understand their end customers and convey the understanding to their suppliers. If the bulk buying is a low priced product, then the supplier always knows that price is what matters and sources fabric from small mills. If the buyer is more interested in high priced quality product, the supplier can understand the priority. If the combination is of all three, then the buyer should spend time understanding supply sources and supply chain. From a supplier perspective, buyers should consider how to find the best way forward for both parties, especially in the area of advanced capacity booking to help with future orders. It guarantees the supplier future business, which is good for relationship, and there is none of the pushing and pulling in the supply chain.

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Sustaining the relationship It helps both the buyers and manufacturers to be open in their costing. Manufacturers are willing to work to lower prices if they have an approximate figure of the quantities on order.

The most important thing for a manufacturer is to have booked the production capacity.

They can work out the option to reduce the cost, such as altering the types of stitches used, embroidery or fabric choice. The system of open costing adopted by some buyers has helped to understand each other. Additionally, the open fabric price from the mill helps both the parties.

Sometimes it works well when working with local agents appointing them as a retainer instead of using a commission-based system. This helps to assure that mistakes are not ignored simply due to the agent not wanting reduced commission. A retainer allows the agent to stop unsatisfactory shipments without the fear of personal commission loss.

However, the exclusive agents make additional efforts to increase the presence of the buyers, through working on commission basis, this often has leads to a long term business relationships.

Most of the changes in the current scenario are buyer driven. The end consumer has evolved in their buying behavior and is asking for garments produced in an ethically friendly manner. The concepts of CSR are still slow to be adopted in a developing country, such as India. However, India is now taking a more proactive approach to consider CSR and environmental issues as a primary focus, because they are often faced with more basic issues, such as supply of electricity. However, the fact is the renowned brands cannot work with manufacturer who fails the “Work Place Assessment Audit” therefore; the manufacturers have made efforts to comply with the required standards.

Whenever buyers introduce some new standards the endeavor would be to succeed and share responsibility between the brand and manufacturer to find a new solution. The global brands work with a local buying office or hire third party inspection agencies for audit to achieve sound CSR practices.

The CSR Practices used by the companies in India to respond to UK Buyers Through analysis of the India manufacturers case studies the findings reveal that the type of sourcing strategy used does determine the CSR practices and compliance approaches.

In addition, the research revealed that the majority of CSR is buyer driven, and that there is still a lot of work to be done by Indian Apparel Manufacturers to ensure they become sustainable in their businesses.

The Indian apparel companies who are lagging behind in the CSR process often have a reactive and short-term management perspective. A reactive response on daily business concerns and pressure can lead to violations to social and environmental performances, often caused by factors like: • • • • • •

Short lead times to keep up with fast moving trends and fashions; Last minute changes in specifications of fabrics or colour and delayed sample approval; Unreliable delivery of materials and accessories; Inefficiencies in production; Low skilled workers, leading to high rates of re-working; Seasonality leading to excessive hours in some months and lack of work in others; 77

• •

Little commercial incentive to reduce hours if overtime premiums are not paid; Low costs for discharge of emissions, solid waste and wastewater.

Companies who are able to react on a pro-active way on these factors are ensuring on the long term their ‘license to operate’ status from government and the brand (customers).

The Ministry of Corporate Affairs in India have released “Voluntary Guideline on CSR” in 2009 as the first step towards mainstreaming the concept of Business responsibility. This was a response from the stakeholders to establish a more comprehensive set of guidelines that encompasses social, environmental and economical responsibility of the business.This National Voluntary Guidelines on Socio-Economic and Environmental Responsibilities has raised these challenges and will help the Corporate sector in their efforts towards inclusive development.

Conclusions and Recommendations Sourcing Handbook for UK India Apparel Manufacturing All of the research findings and data has been collated and put into a handbook which might be of use to designers, product development teams, marketers, as well as for students who are preparing to enter the global fashion industry. (http://issuu.com/lcf-ipd ) A set of recommendations and challenges for education In order to build bridges and attempt to overcome these gaps a set of actions that might be adopted have been explored:   

Enhance understanding of the entire sourcing process from fiber to finished garment for designers and marketers Foster UK India Cultural engagement via collaborative live projects in sourcing and marketing Develop an awareness of regional expertise in craftsmanship, textile specializations and manufacturing know-how.

A set of recommendations and challenges for industry In order to understand the complexities of managing agile and fast fashion supply chains a set of ideas have been explored:   

Develop new curriculum programmes and projects for fashion product development that raise awareness of consumer profiles and lifestyles to ensure designed ranges meet expectations of market levels Sharing of ethical, environmental and sustainable challenges from a consumer perspective and supply perspective to create a balanced approach to sourcing that is not just cost driven.

Encourage internships and industry projects that explore the risks, collaboration and co-operation between the two players in order to avoid adversarial relationships.

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Bibliography/References A Canadian Approach to the Apparel Global Value Chain March 2008 1 dsppsd.pwgsc.gc.ca/collection_2009/ic/Iu44-62-2008E.pdf Cachon, G.P, Swinney, R. 2011, The Value of Fast Fashion: Quick Response, Enhanced Design, and Strategic Consumer Behavior, Management Science, Vol 57, No 4 April 2011 pp 778-795 -1 www.infosys.com/industries/retail/white-papers/.../speed-to-market.

Christopher, M, Lowson, R. Peck, H. Creating Agile Supply Chains in the Fashion Industry Ferdows, K, M. A. Lewis. J.A.D. Machuca. 2004, Rapid-fire fulfillment, Harvard Business Review 82(11) pp 104.100 Ghemawat, P., J. L Nueno. 2003 ZARA: Fast Fashion. Case Study, Harvard Business School, Boston World Textile Conference “From Farm to Fashion” articles in the Textile Institute Publication, May/June 2011 Marshall L. Fisher 1997, what is the Right Supply Chain for your Product? Harvard Business Review, March-April Meichtry, S. 2007. Benetton pucks up the fashion pace. Wall Street Journal. April 10 Passariello, C. 2008 Logistics are in vogue with designers, As slump threatens luxury goods, systems to tract consumer tastes and tweak offerings win converts. Wall Street Journal, June 27.

Report on Indian Textiles Indian – Corporate Catalyst India www.cci.in/pdf/surveys_reports/indias_textile_sector.pdf Rohwedder, C. K. Johnson 2008, Pace-setting Zara seeks more speed to fights its rising cheap-chic rivals. Wall Street Journal February 20th.

Sourcing Handbook for Apparel Manufacturers LCF/PAF UKIERI December 2011 http://issuu.com/lcf-ipd Tex Trends Report 2011; Textiles Secretary Rita Menon the Apparel Export Promotion Council (AEPC) http://www.aepcindia.com/WeeklyNewsLetter/Archives/21-072011/ataepc.html Voluntary Guideline on CSR, Ministry of Corporate Affairs, Government of India – 2009, www.nfcgindia.org/pdf/National_Voluntary_Guidelines.pdf

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Harnessing Academic and Industry Collaborations to Enhance Fashion Retail Internationalisation Teaching and Research.

Karinna Nobbs, Hannah Middleton, Sarah Atkinson, Rekha Dar, Sharmila Katre, Anuradha Debnath First published in Retail Education Today, Volume 33, Number 3, September 2013 Teaching and researching fashion retail internationalisation is a challenging topic due to its dynamic nature and the complexity of the subject area. The aim of this article is to outline a recent project that London College of Fashion undertook with students and staff at Pearl Academy New Delhi which used an interdisciplinary collaborative approach to augment the student experience and ultimately improve employability.

London College of Fashion and Pearl Academy have been working together for the last four years as part of a UK India Education and Research initiative (UKIERI http://www.ukieri.org/). During this time they have undertaken a skills gap analysis, pedagogic and academic research and industry consultation and training. The focus for the project in 2013 was to undertake a collaborative student project between the two institutions which involved industry participation and allowed the students to investigate real life issues in the context of fashion retail internationalisation. In total 52 Masters students from both Universities participated. A student brief was designed in consultation with academic and industry partners and this was that in groups of 3 students should evaluate the market entry strategy of one of the following fashion brands (House of Fraser, Burberry, Mulberry, Ted Baker, Ben Sherman, Forever 21, Primark, Debenhams, Harvey Nichols) into India and provide recommendations for marketing the brand there.

The first stage of the project involved 3 Masters students from Pearl Academy coming to London College of Fashion to present case studies of successful home grown Indian Fashion brands (Fabindia, Wills Lifestyle, AND). This was very useful and helped to set the context of the project as the UK students were able to ask the Indian students questions about the operational strategies of these brands. Professors from Pearl Academy also provided talks about the Indian Fashion sector generally in order to outline its key characteristics. The second phase of the project involved traditional lectures about retail internationalisation from the teaching team at London College of Fashion, this equipped the students with the relevant theoretical frameworks which they could then apply and evaluate to their brand. The third phase of the project was about getting more interaction between the students at each academic institution and so each group of 3 UK students was â&#x20AC;&#x2DC;buddiedâ&#x20AC;&#x2122; up with 3 students from Pearl Academy. They communicated via Skype, Facebook and email and set up primary data collection in the form of virtual focus groups, online surveys and organised observational research. The students found this phase quite challenging and encountered issues in terms of cultural communication differences but they also said this opportunity was highly engaging and empowering.

The fifth phase of the project was to involve industry practitioners in order to demonstrate the differences between theory and practice and to provide of the moment insight to the 80

students. In order to achieve this, executive speakers from International brands such as All Saints and Harrods came London College of Fashion to talk about their internationalisation strategies. The students also had an individual consultation with a specialist from Coutts investment bank who critiqued their proposals half way through the project. This was a very beneficial step as it motivated the students to be well prepared in order to impress the industry representative and also Coutts were very impressed with the standard of the studentâ&#x20AC;&#x2122;s ideas and depth of analysis. The next step involved setting up specialist Industry speakers from India who advise fashion retailers about market entry strategies, here the students had SKYPE talks and Q and A sessions from top management consultant Devanshu Dutta and advisors from the UK Trade and Investment (UKTI) representative in Dehli. At this stage students were able to ask about government restrictions on Direct Foreign Investment (DFI) which at the moment is one if the main barriers to entry for India.

The penultimate phase of the project involved the students presenting their findings and proposals back to the fashion brands in a formal presentation setting, here the brands were able to probe the students on their analysis which the students said was terrifying but at the same time they learnt how to be tactful when discussing sensitive issues which they stated was invaluable. The fashion brands commented on the level of professionalism in terms of presentation style and again on the level of critical ability and access to Indian market research. From these presentations and reports the academic team decided that the students who created the best piece of work would get to travel to India and present their results to a team of students, professors and industry professionals, this is the final stage of the project which is planned for September 2013.

It is anticipated that this seven stage approach across continents, between industry and academic providers and involving both faculty and students has created a unique project whereby all stakeholders have benefitted in terms of knowledge and expertise.

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Section 5 â&#x20AC;&#x201C; Student projects UKIERI â&#x20AC;&#x201C; Student Projects Summary Hannah Middleton In February 2013, students, studying the Fashion Industry Project unit of the LCF MSc International Fashion Management course were asked to propose the most appropriate entry strategy into the Indian market of a selection of international fashion retailers.

The 27 students were put into groups of three and were given a choice of a fashion retailer from the list of: Debenhams; House of Fraser; Harvey Nichols; Forever 21; Primark; Ted Baker; Ben Sherman; Burberry; Mulberry. A mix of luxury retailers, middle market and value retailers were purposely selected to give the students an understanding of the different corporate approaches to internationalisation.

The students were expected to conduct comprehensive primary and secondary research to support their entry strategy proposal to the Indian market. The majority of the students had not visited India before, therefore Pearl Academy were asked to give a detailed insight into the current Indian fashion retail market. The LCF students were also paired up with students from Pearl Academy to act as their Indian buddies, conducting primary and secondary research in India on behalf of the UK students.

In the majority of cases, industry professionals also engaged with the project and worked with the students to give them a clear understanding of their business strategies on internationalisation. Debenhams, Burberry, Ted Baker and Mulberry all met with the students to outline their short and long-term company strategies on growth in India.

The students produced a 4,500-word report and gave a 15 minute presentation summarising their findings and outlining their recommended mode of growth into the Indian market. Particular focus was given to the 4Ps of price, product, place and promotion.

Representatives from each of the fashion retailers attended the presentations and fed back to the students on their proposals, level of professionalism and presentation skills.

Students in completing this unit not only learnt about the theories on entering new markets but also how the theories could be applied. Working with their Indian buddies was at times challenging but it gave students the opportunity to understand the preferred way of working with different cultures. Students commented: "we quickly realised that we had to give our student buddies in India deadlines to work to, otherwise we would be left waiting a long time for tasks we had set to be completed." "Our buddies were guilty of saying that they could complete all we asked of them, however when tasks were only part completed, it soon became obvious that they were not in a position to complete all that was asked."

Lessons were also learnt from working with industry professionals and students commented on how the project felt more 'real' as they were speaking with representatives from the fashion industry. However some students did note that "it's hard to work with the industry as often they (industry professionals) have very strong views on their internationalisation strategies and are not willing to listen to our (the students') recommended entry proposals."

Overall the feedback from the fashion retailers involved in this project was very positive with 82

one retailer offering one of the students a full time role in their international department and another following the recommendations of the students in entering the Indian market. The students were commended on their knowledge of the Indian market and their professional working manner: "we are very impressed with the level of detail of the report the students produced and of the accuracy of the information that they have gathered. Their recommendations are realistic and are well supported by both primary and secondary research."

The student reports were marked and graded, the three students that produced the best report were selected to visit India in September 2013 to present to Pearl Academy and representatives from the Indian fashion retail industry. Visiting India gave the students the opportunity to further understand the Indian fashion retail market and to gain a more detailed understanding of the UKIERI project. The feedback from the industry professionals that attended the student presentation in India was very positive. They were intrigued to learn of the number of international fashion brands keen to expand into the Indian market and they were willing to share information on the diverse Indian fashion retail market.

Speaking with representatives from the Indian fashion industry, it soon became apparent that there is a limited understanding of the Indian consumer outside of India and of the diversity of the Indian market across the many states. The UKIERI project was therefore extended to include detailed information on the Indian consumer across India, highlighting the diversity of the fashion retail consumer across India.

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Analysing the Indian Luxury Consumer Astrid Phillipson, Clara Bergdahl, Emma Ulstrom Indian luxury consumers can be divided into two groups: those who understand luxury in the true sense (mature luxury consumers); and those who are at the entry stage to luxury consumption. The first group are represented the extensive Indian‘royalty’ and socialites: the so called the ‘cashmere crowd’ which includes celebrities and wealthy people generally.

The second group started to form after the opening of India’s financial borders and are sometimes called the ‘no-strings’ generation of India as they were brought up largely in the post-economic-liberalisation era. The increasing disposable incomes amongst the younger generations come from the burgeoning jobs in consulting, IT and investment banking. This consumer group is the real driver of the luxury apparel retail industry and has huge market potential (Atwal & Jain, 2012). The ‘no-strings’ generation is interested in well-known brands that display conspicuous consumption. ‘The nouveax riches have no idea what luxury means. They just follow brand names.The average Indian consumer is still dependent on an image building exercise, rather that understanding the true value and heritage of the item he is buying’(Atwal & Jain, 2012) The consumers can be understood by using the PLC model in which this ‘cashmere crowd’ would occupy the ‘innovative’ and ‘growth’ phase of the cycle, buying into western luxury brands. After such products or brands have been accepted by these early adopters, the ‘nouveaux riches’ luxury consumers follow them in the ‘maturity’ phase of the cycle. It is therefore very difficult for international luxury brands to become established in the Indian market, as it is hard to cater for both of these consumer groups. It is therefore vital for any luxury brand trying to enter this new market to understand the respective mindsets of the target consumers. As stated earlier, the nouveau riche Indian luxury consumer isn’t particularly interested in the heritage of the brand itself, so it is very important to focus on what is known as ‘Indianising’ the brand. This expression should be central to every expansion planned into the Indian market (Atwal & Jain, 2012.).

The Indian concept of luxury is of an altogether higher order than what is usually delivered in the west. The ultimate challenge for an international brand operating within the Indian market is to communicate exclusivity, rarity and uniqueness, as these are central to the Indian concept of luxury. It is therefore crucial for western brands to cater to embody these expectations of the Indian customer if they are to be accorded luxury status. A question to consider is why western luxury brands have struggled to an extent in their attempt to ‘crack’ the Indian market. According to Kapferer (2012) Western brands have spread to new markets because many countries have eschewed their own culture and heritage. This applies especially to China and Japan where a smaller proportion of the population wear traditional clothing and the lack of a real luxury tradition can be indentified. India, on the contrary, is very proud and defensive of their heritage and never abandoned it. The Indian prime minister wears Indian style suits and the women wear saris. Another reason why Indians might be more reluctant to buy western luxury products is the large number of artisans and producers of luxury goods within the country: ‘people see no reason why they should buy a French chiffon gown from Dior for 4.5 lakh rupees (US $9,100) when they can buy the same from an Indian luxury designer at US $600’. Indians love to bargain, something the Western luxury brands are inimical to (Armanath 2012). To protect its domestic business the Indian government has applied high customs tariffs and imposes other regulations on imported goods, and thus has made India a relatively closed market for 84

international brands. This has resulted in wealthy Indians buying luxury goods whilst travelling abroad instead of at home. Thus, the Indian luxury market is not lagging behind the west; on the contrary India is a country of luxury, but of its own luxury.

Even though the traditional view of Indian luxury consumers is that they prefer Indian luxury brands, a recent change has been identified. The introduction of western media such as Vogue India, Harper’s Bazaar, Elle and GQ has revolutionised the way in which Western luxury brands can communicate with the Indian consumers. Amongst the ‘best dressed’ in Indian Vogue the clear presence of western luxury brands can be identified (Vogue.com 2013). This media has become a new source of inspiration and aspiration for the emerging luxury consumer in India. Consumers are not only becoming familiar with Western luxury brands but are gaining the confidence to become luxury consumers on their own (Atwal & Jain, 2012). The Indian brand ambassador for Dior, Kalyani Chawla, stated in an interview in Business Standard (2013) that she preferred Western TV-shows such as Revenge and Highland. Her favourite café was Café Fleur in Paris and her wardrobe was (not surprisingly) a mix of Dior and high-street labels.

Ipsos (2012 in Kapferer, 2012) recently conducted a survey to study luxury consumer behaviour around the world. The question ‘Do you like luxury’ was posed to interviewees financially in a position to be able to buy a luxury product in each country. The answers ranged from 1 to 10 (10 being the highest). The results showed that China gave the highest rating (8.2) followed by Mexico (8.0), India (7.3), United States (6.8), South Korea (6.4), Germany (6.1), Italy (6.1), France (5.7) and finally Japan (5.6). A similar survey was conducted targeting the same consumer group and, from this, the customers who ‘have no problem spending a high amount of money to acquire a luxury good’ came from emerging countries such as India (66%), Brazil (62%), China (55%), Argentina (51%), Mexico (42%), as compared with France (31%) and Japan (29%). These figures illustrate a clear interest in luxury goods by the Indian luxury consumer, again showing that the Indian luxury market is not lagging behind that of the west. Studies show that Indian consumers’ preference for foreign brands is growing and that children and women are emerging as key decisionmakers. Women are also 4.7 percent more willing than men to spend money on branded products (Mukherjee et al. 2012). Kinra (2006) found that Indian consumers perceive foreign brands to be of better quality than Indian brands. Bandyopadhyay and Banerjee (2008 found in Mukherjee et al. 2012) highlight that country-of-origin is an important determinant of consumers’ shopping behaviour and that products of advanced countries enjoy positive country-of-origin effect. Even if the foreign products are manufactured in India they are still perceived to be superior. Arpita Mukherjee (et al. 2012) pointed out that, in general, knowledge and use of Western luxury brands in India is low. They conducted a survey in which around 98 percent of the sample represented mid to high wealth Indian consumers. The survey revealed that even this group is not aware of a range of foreign brands, especially luxury brands, because these are only available in a limited number of luxury malls. Another reason is that these brands are relatively expensive, and only a very small proportion of the Indian population can afford them.

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Luxury Consumer

Picture: Mukherjee, However, with rising incomes and the growing penetration of foreign brands into the Indian market, both knowledge and usage of foreign brands is expected to grow. This growing market has great potential for Western luxury brands and is the reason why it is important to create brand awareness at an early stage to maximise market share.

Kapferer (2012) states that luxury brands need to identify two socioeconomic consumer groups: the first being those who can afford and who will appreciate the brand, this group can be called the ‘cashmere crowd’; and the second being the aspirational group who are potential customers, called the ‘no-strings generation’.

Mulberry’s USP, ‘timeless luxury leather craftsmanship’, speaks to the ‘cashmere crowd’; whereas its ESP ‘inspired by the cool of the city and the craft of the countryside’ speaks to the ‘no-strings generation’, at the heart of whose spending behaviour is ‘coolness’ and being on-trend. The Mulberry brand would fit the Indian market well as they can communicate with both luxury consumer groups and could thereby secure a loyal consumer base in the market. Emma Hill, Mulberry’s creative director describes Mulberry as being cheeky and playful which speaks to the ‘no strings generation’ (Conti, 2013). The increasing disposable incomes amongst this generation come from the burgeoning jobs in consulting, IT and investment banking and this consumer group is the real driver of the luxury apparel retail industry and has huge market potential. The ‘no-strings’ generation is interested in well-known brands that display conspicuous consumption. Luxury for the young ‘no-strings’ generation is the epitome of the good life: they want to look cool, and so the products need to embrace youthful values and be nimble, fun and a little bit quirky which corresponds with Mulberry’s design and product offer (Boroian & De Poix, 2010).

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References Amarnath, N. (2012) ‘Delhi and Mumbai are still the key markets for luxury goods in India’ The Economic Times [Internet] Available at: http://articles.economictimes.indiatimes.com/2012-05- 20/news/31779167_1_luxurymarket-luxury-shopping-luxury-mall (Accessed: 1 June 2013).

Atwal, G. & Jain, S. (2012) The luxury market in India Maharajas to masses. Basingstoke: Palgrave Macmillan.

Bandyopadhyay, S., Banerjee, B. (2003), "A country of origin analysis of foreign products

by Indian consumers", Journal of International Consumer Marketing, Vol. 15 No.2, Boroian, M & De Poix, A. (2010) India by Design. London: John Wiley and Sons Conti, S (2012) 'Costs Pull Down Profits At Mulberry' WWD: Women's Wear Daily, 204, 118, pp. 12-1,December 2012, Business Source Complete, EBSCOhost, [Internet] Available at :http://search.ebscohost.com.arts.idm.oclc.org/login.aspx?direct=true&db=bth&AN=845705 23&site=ehost37-live (Accessed 8 May 2013) Ipsos (2012) World Luxury Tracking, HEC Conference Paris, 2 May 2011.

Kapferer, J. N. (2012) The Luxury Strategy: Break the Rules of Marketing to Build Luxury Brand. 2:nd ed. London: Kogan Page.

Kinra, N. (2006), "The effect of country-of-origin on foreign brand names in the Indian market", Marketing Intelligence & Planning, Vol. 24 No.1, pp.15-30.

Mukherjee, A, Satija, A, Tanu M. l, Murali K. Mantrala, Zou,S. (2012) "Are Indian consumers brand conscious? Insights for global retailers", Asia Pacific Journal of Marketing and Logistics, Vol. 24 Iss: 3, pp.482 – 499 Vogue (2013) ‘Best dressed this week’ [Internet] Available at: http://www.vogue.in/content/celebrity (Accessed: 22 May 2013)

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Mulberry Company Profile Astrid Phillipson, Clara Bergdahl, Emma Ulstrom

Mulberry is a British fashion design company recognised for their extensive line of fashion bags. Mulberry is predominately known for its craftsmanship and quality butalso for its quintessentially English design and personality. Emma Hill, Mulberry’s creative director speaks of the brand: ‘We are cheeky and playful… anything that is English tends to be a little bit irreverent and a little bit silly’ (Adams, 2012). Its product offer includes fashion bags for men and women, as well as womenswear, accessories and footwear.

Mulberry was established in Somerset, England in 1971. Roger Saul, Mulberry’s founder, at the age of 21 used a £500 birthday present to start making leather belts in his home garage. When department stores began stocking his belts a factory in Shepton Mallet was opened and the brand hosted its first fashion show in 1975. Then the ‘tweedy hunting-andshooting’ brand established Mulberry as an English lifestyle brand and ‘Le style Anglais’ was born. By 1988 the company enjoyed nine freestanding stores in eight countries. In the 90’s it extends it product offer with a home collection and an interior range. In 2000 the company had previously suffered some financial misfortune in Japan, in which the Ong couple bought out 42% shares from a $12 million investment. Under their influence Mulberry introduced more product lines and appointed a new head of design in Nicholas Knightly. He introduced the famous ‘Bayswater’ and Roxanne bags and made Mulberry a modern fashion brand. With his leave to competitor Louis Vuitton, Stuart Vevers is appointed head of design and communicated Mulberry as a fashion must. In 2007 Emma Hill became creative director and introduced the Alexa and the Del Rey bags. Mulberry has since the beginning of the 21st century increased its revenue remarkably (Mulberry Annual report, 2012).

Mulberry’s expansion strategy has so far been organic and based on the Uppsala Model, in which international expansion decisions are primarily based on geographically or culturally proximate markets. As confidence increases the company enters markets of greater psychic distance. Finally, when confidence and market experience peak, the desire emerges for greater control over the market in the form of direct investment (Johanson, Vahlne, 1977). Mulberry has recently entered the second phase of the brand’s internationalisation strategy, as charted by the Uppsala Model, by entering new markets with psychic distance, such as China, South Korea, Singapore, Thailand and Taiwan. Mulberry’s previous chief executive, Bruno Guillon, spoke on behalf of the brand, emphasising the importance of international expansion, both within old and new markets, in order to increase international presence and brand awareness so as to maximize sales potential (Moulds & Neville, 2013). In the year 2012 Mulberry opened 14 new stores in the UK, the Netherlands, the USA, Korea, Singapore, Thailand and Taiwan.

With global expansion continuing the international revenues grew with 61% to £65.2 million (2011: £40.5 million), accounting for 39% of the Group’s revenues (2011: 33%), (Investors presentation, Dec 2012). The company has planned to open in, in 2013, in Mallorca, Beijing, Shanghai, Daejon, Nagoya. As part of Mulberry’s future plan, 15-20 stores per annum will be opened within the next five years with high priority markets being Japan, China, Western Europe and North America. In Asia, Mulberry is operating under 37 franchise partners with a total retail footprint of 107 stores (Conti, 2013a). Godfrey Davis, Mulberry’s Chairman, speaks of their approach ‘The international rollout is really what we're 88

about’ noting that the U.K. only represents 5 per cent of the worldwide luxury market. ‘We expect our market share to grow in all of the rest of the world’. Mulberry’s wholesale business in the Asia- Pacific region rose by 70 per cent and now accounts for 36 per cent of Mulberry’s total wholesale sales, making it Mulberry’s largest wholesale market (Jones, 2012).

Mulberry has historically been operating under franchise agreements in the European market but recently, the company has started to minimise the franchise accounts with the motivation to transfer distribution to freestanding stores. New store openings in Switzerland and Germany have affected the European wholesale performance with a decline of 4 per cent. (Investor Presentation, 2012) In Mulberry’s Investor Presentation (2012) a detailed plan over Capital Expenditure was enclosed, Store expenditure has doubled, which is a result of their focus on freestanding stores in Europe. It is evident that Mulberry has entered the second phase of the Uppsala Model with focus on new international territories. The brand is shifting previously acquired distribution channels into new fully operating networks.

Mulberry Timeline 1971

Founded by Roger Saul and his mother in Somerset, England. Initially Roger only made leather belts.

1972 Department stores like Harrods and Printemps were stocking Mulberry leather belts.

The company opened its factory in Shepton Mallet.

1973-1975 A collection of quilted fishing bags, poacher bags and jackets inspired by country activities such as, shooting, hunting and fishing.

1975 Mulberry’s first fashion show at London Fashion Week. This was the collection that established Mulberry on the fashion map: Le Style Anglais was born and Mulberry was solidified as a true English lifestyle brand.

1988 Nine freestanding stores in eight countries, including Denmark, the Netherlands, Germany and Singapore.

1991 “At home” an interior range was introduced.

1992- Achieved a revenue of £50 million.

1997 Mulberry opens the Charlton House Hotel to showcase the Mulberry home collection of interior items in its hometown of Shepton Mallet, Somerset England.

The hotel has 16 bedrooms reflected a different aspect of the interior collection.

1997 Two new stores opened: one in Manchester, which became the flagship store of north England and its first standalone Home store in London.

1998 Mulberry felt the effects of the Asian crisis- sales growth had exceeded by 25% for previous 2 years and the operating costs increased with nearly 15%. Mulberry decided to take control over the Japanese stores.

1999 Mulberry signed a partnership agreement with Kravet- an American home furnishing company to open a new Mulberry Home showroom in London’s Chelsea Harbour and in addition to this they also agreed to distribute Mulberry fabric, wallpaper and soft furnishing. Another partnership agreement was signed with Toray Industries in Japan, the world’s largest textile manufacturer, to develop Mulberry in Japan.

2000 Mulberry introduced new product lines to improve performance. Furthermore, sold 42% of the family controlled business to Ong Beng Seng and his wife Christina for $12 million. They agreed to set up joint venture to promote and sell Mulberry in America.

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2001

2002

2002 2003 2004

2005

2006

2007 2010 2012 2013

British designer Scott Henshall became the new head of design and introduced a new improved ready-to-wear line, launched menswear in Italy and a high tech line, which included covers for laptops etc.

British designer Nicholas Knightly takes the reign of head of design under the influence of the Ongs and their interest in revamping the brand. Mulberry cancelled plans for five outlets in the United States and closed stores in Brussels and Tokyo, this due to declines in profit, although, they decided to go ahead with its planned expansion in Russia, Scandinavia and the Netherlands.

Nicholas Knightly designs the first ever Brit ‘It’ bag: The ‘Bayswater’ is introduced.

Mulberry returned to profitability. The ‘Roxanne’ is introduced and mentioned in British Vouge as the season’s biggest trend.

Mulberry entered a partnership with Bergdorf and Goodman and opened its first U.S store. This followed by further plans of expansion in Asia and America.

Mulberry began wholesale distribution to select appropriate stores in Japan.

Won the British Fashion council award for accessory designer of the year. Nicholas Knightly leaves the company for a role at Louis Vuitton with Steve Vevers as his replacement. Steve Vevers repositions the brand through savvy marketing and ad campaigns.

Mulberry launched an apprenticeship programme to encourage local youths to learn production skills and providing training and employment for the local community. Launches successful Ad campaign featuring the work of fashion photographer Steven Meisel.

Emma Hill is the new creative director for Mulberry.

The Alexa bag is introduced on the market, a tribute to Alexa Chung as a British style icon. It was not a collaboration with Alexa, it is just named after her.

Mulberry’s Lana del Ray bag is launched.

The ‘Willow’ and ‘Suffolk’ bag is introduced on the market.

Partnerships (Pederson, 2005) 1996 Exclusive distribution agreement with Moonbat Company Limited, (Japan’s largest fashion accessory company) to import accessories and ready-to-wear 1997 Moonbat Ltd withdrew from investment program, with Mulberry reorganising its Japanese operations and of Tokyo stores.

1999 To increase penetration of the European market, struck a license and partnership agreement with Kravet (American home furnishing company) to open a new Mulberry Home showroom in London’s Chelsea Harbour. Kravet agreed to distribute Mulberry fabrics, wallpaper and soft furnishing within its contacts in the UK, Europe, North- and South America. GP & J Baker Group has control over Mulberry Home today (gpandjbaker.com, 2013). A second partnership with Toray Industries (the worlds largest textile manufacturer) was made to develop the Mulberry brand in Japan (no longer involved with Mulberry at present time).

2000 Sold 42% of company to Ong Beng Seng and his wife Christina that owned an investment vehicle called Challice. The Ongs agreed to set up a joint venture to promote and sell Mulberry products in the United States. Mulberry USA LLC ‘MUSA’ was granted the rights to retail and wholesale Mulberry products in the US. ‘MUSA’ is a limited liability partnership between Mulberry and a company under the control of the owners of Challice Limited.

2002 Saul gets in an argument with Christina Ong, and after demanded a shareholders’ extraordinary general meeting to vote on his removal. Saul stepped down as chairman.

2003 Saul sold the last of his stake to Insight Investment and stepped down as 90

president. Mulberry’s losses continued and Challice continued to buy up more of the company.

2004 Entered into a partnership with Bergdorf Goodman and opened its first U.S Store.

Plans for Japan, Asia and United States 2005 It began wholesale distribution to selected Japanese shops in 2005 by signing agreements with Mitsui & Co. and Sanki Shoji Co. 2009 Since MUSA, five shops have been opened in the US and the wholesale business has developed. In April 2009 it was agreed that MUSA would close down 3 of its shops and Mulberry acquired the remaining 2 shops in New York and tale back their retail and wholesale rights in the US. (RNS, 2009) 2012 In May 2012 Mulberry paid Challice Limited £1m and following this payment no further consideration is payable under the termination agreement. (Fishwick, 2012) Store Openings (Pederson, 2005) 1996 Opened new stores in Heathrow Airport and Tokyo 1997 Manchester Mulberry flagship and Mulberry Home in London 1998 New Franchise in Japan and new Home Store next to flagship in Tokyo, (Dubai is mentioned at this time with 2 opened stores) 1999 New Mulberry Home showroom in London’s Chelsea Harbour 2002 Cancelled the planned 5 outlets in the US due to losses for the full year. Stores where also closed in Brussels and Tokyo. Although expansion in Russia, the Netherlands and Scandinavia went as planned.

2003 Under Davis, the company refocused on the accessories side of its business-selling leather accessories, handbags and belts--rather than clothes and instituted tighter management controls. Mulberry's strategy, according to Davis, would be "to simplify the business and make deals with experienced people who can develop a brand like Mulberry in their home markets." The Ongs and management also made plans to develop Mulberry's overseas markets via partnerships and to stem its losses by closing stores, including those in Paris and at some locations in the United Kingdom.

2004 Opened its first U.S Store.

2005 Plans for Japan, Asia and United States, and began wholesale distribution to selected Japanese shops.

2012 Mulberry has added new stores in Hong Kong, Malaysia, Doha in the United Arab Emirates and Sydney Supply chain and Production 1998 Closed handbag factory in Somerset, laying off 28 workers, moved production to Italy, Turkey and Spain.

2010 – Employs 740 people in the UK and expanding its factory in Somerset to meet growing demands – expected to create 60 new jobs (Peacock, 2010).

2013 - The Rookery, Mulberry’s first factory located in Somerset - recently extended its manufacturing with 30%. The factory has close relationship and is embedded within its local community. The Willows, Their second factory located in Somerset will be opening in Summer 2013 - 300 new people will be employed and double the production capacity in the UK. ‘The company aims to increase the proportion of products it manufactures in the U.K. from 20 percent to “between 30 and 40percent.”’ (Jones, 2012).

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References Adams, W (2012) 'Unique to Ubiquitous', Time International (South Pacific Edition), [Internet] Available at: http://search.ebscohost.com.arts.idm.oclc.org/login.aspx?direct=true&db=bth&AN=7380335 6&site=ehost -live (Accessed: 8 May 2013) Conti, S (2013) 'Costs Pull Down Profits At Mulberry' WWD: Women's Wear Daily, 204, 118, pp. 12-1,December 2012, Business Source Complete, EBSCOhost, [Internet] Available at :http://search.ebscohost.com.arts.idm.oclc.org/login.aspx?direct=true&db=bth&AN=845705 23&site=ehost37-live (Accessed 8 May 2013) Fishwick, O (2012) ‘Mulberry pays £1m for full control of US sales’ Bath Business News [Internet] Available at: http://www.bath-business.net/mulberry-pays-1m-for-full-control-of-us-sales/ (Accessed: 13 May 2013) Freeman, H (2004) ‘A very British coup’ The Guardian. 23 October 2004. [Internet] Available at: http://www.guardian.co.uk/lifeandstyle/2004/oct/23/shopping.fashion2 (Accessed: 29 April 2013) Gorman, C (2009) ‘Alexa’s bag hits Mulberry’ Elleuk.com [Internet] Available at: http://www.elleuk.com/fashion/news/alexa-s-bag-hits-mulberry#image (Accessed: 29 April 2013) Gpandjbaker.com (2013) ‘GP & J Baker’ [Internet] Available at: http://www.gpandjbaker.com/group/en/ (Accessed: 10 May 2013) Investor Presentation (2012 Jones, N (2012) 'Mulberry Shares Slide On Slower Growth' WWD: Women's Wear Daily [Internet] Available at: http://www.wwd.com/business-news/financial/mulberry-net-climbs48-5962882 (Accessed: 8 May 2013) Johanson, J. & Vahlne, J-E. (1977) The Internationalization process of the firm – a model of knowledge development and increasing foreign market commitments Journal of International Business Studies Vol. 8, Issue. 1, pp. 23-31 Moulds, J & Neville, S. (2013) ‘Mulberry pins third profit warning on thrifty tourists’ The Guardian [Internet] Available at: http://www.guardian.co.uk/business/2013/mar/22/mulberry-third-profit-warning-tourists (Accessed: 1 June 2013).

Mulberry Annual Report (2012) ‘Annual Report’ [Online] Available at: <http://www.mulberry.com/ /companycareers/investorrelations/companyreports/> (Accessed: 18 may 2013) RNS (2009) ‘Mulberry Group PLC (MUL)’ [Internet] Available from: http://www.investegate.co.uk/article.aspx?id=200905140700132167S (Accessed: 10 May 2013) 92

Peacock, L (2010) â&#x20AC;&#x2DC;Mulberry: from Somerset to Singaporeâ&#x20AC;&#x2122; The Telegraph [Internet] Available at http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/8191192/Mulberryfrom-Somerset-to-Singapore.html (Accessed: 13 May 2013) Pederson, J (2005) International Directory of Company History, Vol 71. Pennsylvania: St. James Press.

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First published in Great Britain in 2014 by London College of Fashion, University of the Arts London, 20 John Princes Street, London W1G 0BJ

ISBN: 978-­‐1-­‐903455-­‐31-­‐9

Copyright: London College of Fashion, University of the Arts London

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Global Fashion Skills | Collaborative Networks | UK/India Perspectives: Case Studies and Research for Future Business Growth

Global Fashion Skills Collaborative Networks UK/India Perspectives: Case Studies and Research for Future Business Growth

Editor Contributors Sarah Atkinson Lynne Hammond

Hannah Middleton

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Bill Webb

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