success story of Jafferjees

SUCCESS STORY

JAFFERJEES – A Tradition of Quality

Small Business Management Mohammad Ali Jinnah University November 15, 2009

Success Story: JafferJees Leather Goods

Small Business Management

Compiled & Written By: − Arshia Anjum − Fatima − Kehkashan Danish − Murtaza Asgher Ali − Yousuf Hatim

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Success Story: JafferJees Leather Goods

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Acknowledgement Our term report would have not been possible without the assistance of Mr. Murtaza A. Quettawala, who with his contacts made all our visits possible. We thank all the owners and employees of JafferJees who welcomed us and cooperated with us, resolving all our queries. All the problems that we faced in different sections of our report were resolved both in and outside of JafferJees outlet.

We would also like to thank our course instructor Mr. Mohammad Ali Sheikh, who took time off his busy schedule to guide us through a few sections of our report.

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Success Story: JafferJees Leather Goods

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BRIEF CONTENTS

A. Introduction

(9)

B. History

(10)

C. Objective

(11)

D. Type of business

(11)

E. Store location

(11)

F. Customers

(12)

G. Competition

(13)

H. Manufacturing

(13)

I. Store orientation

(20)

J. Store design

(21)

K. E-Commerce activities

(24)

L. Marketing strategies

(25)

M. Marketing Mix

(26)

N. Advertising

(28)

O. Supply chain management

(28)

P. Customer relationship management

(29)

Q. Information systems

(30)

R. Merchandising

(31)

S. Human resource management

(35)

T. Conclusion

(39)

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Success Story: JafferJees Leather Goods

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CONTENTS 1. Introduction (9) a. Current scenario (9) b. Why JafferJees (9) 2. History (10) 3. Objective (11) 4. Type of business (11) 5. Store location (11) a. Type of location (12) 6. Customers (12) 7. Competition (13) 8. Manufacturing (13) a. Leather (13) b. Leather types (14) i. Full-grain leather (14) ii. Top-grain leather (14) iii. Corrected-grain leather (15) iv. Split leather (15) c. Leather production process (15) i. Preparatory stages (16) ii. Tanning (16) iii. Crusting (17) d. Raw materials – skin (17) e. Raw materials – accessories (18) f. Design (18) g. Cutting & stitching (19) 5|Page

Success Story: JafferJees Leather Goods

Small Business Management

h. Recent trends (19) 9. Store Orientation (20) a. Attractive Displays (20) b. The circulation plan (21) c. Space Audit (21) 10. Store Design (21) a. Exterior & interior (21) b. Signage (22) c. Fixture, visual type (22) d. Merchandising & Display (22) e. Window Display (23) f. Counter Display (23) g. Cascade Display (23) h. Employee type (23) i. Frontline employees (23) j. Other staff (23) 11. E-Commerce Activities (24) a. Online store front (24) b. Online store – benefits (24) i. International outreach (24) ii. Managed inventory (25) c. Online pricing (25) d. Visual density (25) e. Micromarketing (25) 12. Marketing strategies (25) a. Branding (25) b. Store positioning (26) c. International Expansion (26) 6|Page

Success Story: JafferJees Leather Goods

Small Business Management

13. Marketing mix (26) a. Product offering (26) b. Place price (27) c. People to serve (27) d. People that serve (27) e. Presentation (27) 14. Advertising (28) 15. Supply chain management (28) a. Purchase order (28) b. Vendor management (28) c. Warehousing (29) d. Goods received & inter transfer notes (29) e. Transportation (29) f. Material handling equipments (29) g. Efficient docking (29) 16. Customer relationship management (29) 17. Information systems (30) a. POS technology (30) b. Technology & store operating processes (30) c. Human resources & technology (31) 18. Merchandising (31) a. Women (31) i. Handbags (31) ii. Wallets (31) iii. Lipstick Cases (31) iv. Jewelry Cases (32) b. Business Categories (32) i. Portfolios (32) 7|Page

Success Story: JafferJees Leather Goods

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ii. Briefcases (32) iii. Desk Accessories (33) iv. Business Card Cases (33) v. Organizers (33) c. Travel Goods (33) d. All & Sundry Categories (34) e. Shrinkage in Merchandise Management (34) 19. Human resource management (35) a. Recruitment process (35) i. Gathering Information before Recruitment (35) ii. Preliminary Screening and Interview (36) iii. Recruitment (36) iv. Termination (36) b. Manpower Planning (36) c. Motivation & Rewards (37) i. Attendance Bonus (37) ii. Other Bonuses (37) iii. Education (37) iv. Physical Appearance (38) v. Involvement With Employees (38) d. Salary Structure (38) 20. Conclusion (39)

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Success Story: JafferJees Leather Goods

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INTRODUCTION JafferJees, an exclusive name in leather products, blends fine leather and refined accessories to bring an exquisite collection. Their experience spans over four generations. For over a hundred years, JafferJees has been producing quality leather products in a variety of in-vogue styles, materials and colors. They know that paying attention to detail and being a little fastidious is the difference between good and great. Before the separation of Indo-Pak, JafferJees established itself in Quetta as a manufacturer of leather goods, horse saddles and boots for the armed forces in particular. Later they expanded their business by adding furniture to their product line, and by opening a retail outlet in Karachi.

Current Scenario Currently, JafferJees has four branches. Three of them are established locally, and the fourth one is in Dubai. Over the years, JafferJees has been successful in establishing its store brand. It has a loyal base of customers. Since JafferJees has been present for over a century as the only leather goods provider, their sustainable competitive advantage has given them an edge over the emerging competitors.

They now enjoy the status of being a brand, not locally but in international market too. It would not be wrong if JafferJees be equated as a high quality leather product. Using superior product offerings, parallel to the needs of the customers and upholding them with a excellent customer service and retention system have differentiated them among competitors.

Why JafferJees An image of a big capital ‘J’ comes to mind when we talk about a success story. The question that arose was: why JafferJees? There are many a firms that are dealing in leather products, there must be something differentiating or distinguishing that led them to get the most loyal customers in town.

JafferJees started off with a small shop with basic leather accessories and today they are known to have the highest range of leather goods of premium quality, this is the reason why their outlets are flooded with 9|Page

Success Story: JafferJees Leather Goods

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Upper-Middle and elite class customers and foreigners. It has been almost a century since they started of their journey, since then they have never compromised on their quality. This spearhead advantage has been the biggest reason behind their success. Competitors are way away from them, not only on their type of products, designs and quality, but also in comparison with their way to talk to people and the customer relationship.

HISTORY Over a century ago, the JafferJees family established a business as expert saddlers in the city of Quetta, then British India. The business was initially a solution to leather goods needs of the British Army in subcontinent.

Saddles, Boots, Belts, holsters etc were peaking in its demand at that time and JafferJees, being an adept of leather art, quickly got popular among the British Army of the subcontinent.

The business, from just making saddles, boots and belts for the British army, expanded its product line to formal shoes and leather upholstered furniture. With a commitment to use the finest material and uncompromising workmanship, the JafferJees name established itself as the purveyor of high quality leather goods in the subcontinent.

In the late 1920’s, the booming port city of Karachi presented new opportunities and challenges.

People were well aware of the comfort and sumptuousness associated with leather goods, differentiating those from the olden days, where leather was only used as a mode of carrying water and goods in traveling, as it was strong and lasted many days. Karachi city quickly got its name of being the 10 | P a g e

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largest and busiest port, even exceeding popularity of Bombay seaport (one of the largest in the British-India). It was obvious that new port would bring big clouds of opportunities and lucrative business benefits.

JafferJees too, sensed this prospect, as leather goods were one of the basic necessities of people in the UK, it never went out of demand. But some complications stood as a hurdle between them and new opportunities in the Karachi City, and they were unable to shift themselves. At least not for the upcoming fifteen years Then in 1935 nature played its hand. A massive earthquake transformed the city of Quetta to a heap of rubble. Businesses closed down, industries were shattered and unemployment soared high in those days. JafferJees too were badly affected, but they had a plan already up on their minds: plan to start again at Karachi.

JafferJees business center shifted to Karachi. Today, one encounters at JafferJees outlets the same meticulous attention to detail, the finest material, and an uncompromising craftsmanship that the ‘JafferJees leather goods’ business was established upon a tradition of quality.

OBJECTIVE to provide quality leather goods to the upper class of our society.

TYPE OF BUSINESS JafferJees is a family-owned business; it was originally started by JafferJees and later carried on his son Tahir Ali Quettawala. The business is now owned by two brothers; Imtiaz and Arif Quettawala, and their cousin Arshad Quettawala.

STORE LOCATION As location is one of the main success factors for any retail store. JafferJees has always been very choosy when selecting the location of their Clifton, Karachi 11 | P a g e

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retail outlets.

Type of location Their outlet at Mehran heights (Clifton, Karachi) is the main branch where they have their head office and ware house. Mehran heights being a shopping center has high customer traffic, medium to high real estate rental values and has little space allocated for parking, providing convenience to the customers.

JafferJees at Tariq Road (Karachi) has a high street location, with clusters based on product categories, high real estate rentals with no parking space.

JafferJees is located at the Park Towers shopping mall with high rentals, designated parking at the Park Tower space, attracting families.

Burjuman Center, Dubai JafferJees at Park Towers faces a tough competition, as its competitors: Traditions and Hub Leather are located in the same mall, but still they differentiate in their product category and their targeted customers.

JafferJees in Dubai is located at Burjuman Centre, one of the best shopping malls of the city. Burjuman centre like a typical shopping mall has high real estate rentals, with an extensive parking space, facilitating customers visiting the mall.

CUSTOMERS JafferJees never segmented the market to sieve out the type of customers they want. They cater each and every category of people, upper-middle, high class and at the end elites.

People from the corporate sector, celebrities, politicians etc are their frequent buyers. Benazir Bhutto, during her reign as the Prime Minister of Pakistan, also stopped at the JafferJees to shop around.

Sometimes they do not even know that products that are sold will be used by some celebrity. It is because high-profile people usually do not come 12 | P a g e

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to shop themselves; instead they send their representatives or secretaries to shop for them.

JafferJees usually encounter male customers. The purchasing of leather is low in females as compared to males. They are more fond of wearing leather belts, wallets etc.

COMPETITION As they do not advertise, they do not care of the competition too. Instead of par pricing the product they just give it price, after calculating the raw materials used and overhead supplied.

It is the brand that is established, if local markets start copying their design they would still be incapable of achieving the product quality and aesthetics that JafferJees provide. Setting this as their competitive advantage, they have penetrated in to genuine leather goods market, locally and internationally.

MANUFACTURING GOODS Leather Leather is a durable and flexible material created via the tanning of putrescible animal rawhide and skin, primarily cattle hide. The leather and the fur industries are differentiated by the manufacturing importance of the raw materials used to make the wares. In the leather industry, the skin and rawhide are by-products of the meat industry, because the meat has greater commercial value than the rawhide and skin. In the fur industry, the meat is a by-product, because the skins and hides have greater commercial value. Moreover, in taxidermy, the raw materials usually are only the animal’s head and back; hide and skin also are the raw materials for manufacturing animal glue and gelatin.

Leather types In general, leather is sold in three forms: 13 | P a g e

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Full-grain leather It refers to the upper section of a hide that previously contained the epidermis and hair, but were removed from the hide/skin. Full-grain refers to hides that have not been sanded, buffed or snuffed (such as topgrain or corrected leather) in order to remove imperfections (or natural marks) on the surface of the hide. The grain remains in its natural state allowing the best fiber strength and durability. The natural grain also has natural breath ability, resulting in less moisture from prolonged contact.

Rather than wearing out, it will develop a natural patina over time, with some cracking and splitting. The finest leather furniture and footwear are made from full-grain leather. For these reasons, only the best raw hide is used to create full-grain leather. One way to test if leather is full-grain is to lightly scratch its surface with your nail. If it leaves a lighter-colored streak, it's full-grain. Full-grain leathers are typically available in two finish types: aniline and semi-aniline.

Top-grain leather It is a misnomer: it gives the false impression that it is "top" quality. In fact, full-grain is the highest quality. Top-grain leather is the second-highest quality. Its surface has been sanded and refinished. As a result, it has a colder, plastic feel, less breath ability, and will not develop a natural patina.

However, it does have 2 advantages over full-grain leather: it is typically less expensive, and has greater resistance to stains.

Corrected-grain leather

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It is any top-grain leather that has had an artificial grain applied to its surface. The hides used to create corrected leather are hides of inferior quality that do not meet the high standards for use in creating aniline or semi-aniline leather. The imperfections are corrected and an artificial grain applied. Most corrected-grain leather is used to make pigmented leather as the solid pigment helps hide the corrections or imperfections.

Corrected grain leathers can mainly be bought as two finish types: semianiline and pigmented.

Split leather It is leather created from the fibrous part of the hide left once the topgrain of the rawhide has been separated from the hide. During the splitting operation, the grain and drop split are separated. The drop split can be further split (thickness allowing) into a middle split and a flesh split. In very thick hides, the middle split can be separated into multiple layers until the thickness prevents further splitting. Split leather then has an artificial layer applied to the surface of the split and is embossed with a leather grain (By cast leather). Splits are also used to create suede. The strongest suedes are usually made from grain splits (that have the grain completely removed) or from the flesh split that has been shaved to the correct thickness. Suede is "fuzzy" on both sides. Manufacturers use a variety of techniques to make suede from full-grain. For example, in one operation, leather finish is applied to one side of the suede, which is then pressed through rollers; these flatten and even out one side of the material, giving it the smooth appearance of full-grain. Latigo is one of the trade names for this product. Reversed suede is grained leather that has been designed into the leather article with the grain facing away from the visible surface. It is not a true form of suede.

Leather Production Process The leather manufacturing process is divided into three fundamental subprocesses: preparatory stages, tanning and crusting. All true leathers will undergo these sub-processes. A further sub-process, surface coating can be added into the leather process sequence but not all leathers receive surface treatment. Since many types of leather exist, it is difficult to create a list of operations that all leathers must undergo.

The preparatory stages 15 | P a g e

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These stages are when the hide/skin is prepared for tanning. Preparatory stages may include: preservation, soaking, liming, unhairing, fleshing, splitting, relining, deliming, bating, degreasing, freezing, bleaching, pickling and depickling.

Tanning It is the process which converts the protein of the raw hide or skin into a stable material which will not putrefy and is suitable for a wide variety of end applications. The principal difference between raw hides and tanned hides is that raw hides dry out to form a hard inflexible material that when re-wetted (or wetted back) putrefy, while tanned material dries out to a flexible form that does not become putrid when wetted back.

There is a large number of different tanning methods and materials that can be Leather Tanning used, the choice is ultimately dependent on the end application of the leather. The most commonly used tanning material is chromium, which leaves the leather once tanned a pale blue color (due to the chromium), this product is commonly called “wet blue�. The hides once they have finished pickling will typically be between pH of 2.8-3.2. At this point the hides would be loaded in a drum and immersed in a float containing the tanning liquor. The hides are allowed to soak (while the drum slowly rotates about its axle) and the tanning liquor slowly penetrates through the full substance of the hide. Regular checks will be made to see the penetration by cutting the cross-section of a hide and observing the degree of penetration. Once a good even degree of penetration exists, the pH of the float is slowly raised in a process called basification. This basification process fixes the tanning material to the leather and the more tanning material fixed the higher the hydrothermal stability and increased shrinkage temperature resistance of the leather. The pH of the leather when chrome tanned would typically finish somewhere between 3.8-4.2 ph.

Crusting 16 | P a g e

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It is when the hide/skin is thinned, retanned and lubricated. Often, a coloring operation is included in the crusting sub-process. The chemicals added during crusting have to be fixed in place. The culmination of the crusting sub-process is the drying and softening operations. Crusting may include the following operations: wetting back, sammying, splitting, shaving, rechroming, neutralization, retanning, dyeing, fat liquoring, filling, stuffing, stripping, whitening, fixating, setting, drying, conditioning, milling, staking, and buffing.

For some leathers a surface coating is applied. Tanners refer to this as finishing. Finishing operations may include: oiling, brushing, padding, impregnation, buffing, spraying, roller coating, and curtain coating, polishing, plating, embossing, ironing, ironing/combing (for hair-on), glazing and tumbling.

Raw Materials – Skins Leather being the key element for the products, JafferJees takes good care to select the top quality leather sheets in order to maintain their promise to the customers: ‘the tradition of quality’. All the leather is bought from tanneries in Pakistan, as Pakistan is one of the best producers of leather in the world.

The skin that is mostly used is the cow and buffalo, as they are a main source of food too. Other leather goods manufacturing companies use reptile skin such as of snake, crocodile etc. At JafferJees they believe that is unethical and immoral to use such animals for their skin, these animals are to skinned alive or else their skin is of no use. Whereas the skin of cow, goat, buffalo and sheep do not require such brutal behavior as it already have a certain amount of blood level, which is essential to maintain that shape and form of leather.

The buffalo skin is mostly used, but it is sometimes hard, tough and difficult to work with. Whatever JafferJees make, they use the first grade skin. Third grade skin show patches and spots, but however they can be covered by pasting something else over it. This would be equal to cheating the customer and once the customer finds out, he would never come back and JafferJees would lose his customer equity. It is the reason they only work with first grade skin.

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Owners themselves go to purchase leather; they do not delegate the purchasing to somebody else. The reason behind this is maintain maximum quality and reduce costs. Any involvement of third party would increase costs, at the end the product price would raise.

Raw Materials – Accessories The other ingredients, zips, buttons, locks, tags, logos, etc are all imported from Japan and Indonesia. They are all of high quality and are reliable enough to go on with the leather goods.

Rarely it is observed that a customer complaint about a lock been broken or a zip ripen apart or even the silver or golden plating scraping off.

JafferJees believe in making a slight expensive product that is of high quality instead of lowering profits by giving after sales service and repairing goods of dissatisfied and angry customers.

Design Designing the product is one of the difficult tasks to do. A single mistake could end the finished goods into a trash bin. Usually all other leather goods manufacturer outsource their product designing, but at JafferJees the owners sit together to design a product, they do not hire anybody. It’s the western culture that they adopt, like the use of ostrich skin design because of its popularity in the west, it is also forecasted that this style would soon come to Pakistan.

The entire business is based on a hobby to work with leather. They design the product similarly, when they feel like designing they do it. But all the designs are customer centered and satisfy an unstated need. A creative mind and than a business mind is a key to success

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Cutting and Stitching All the designs get into physical shape by cutting and stitching department. This department comprises of permanent people, who have been working for a long time.

Two bundles of leather sheets come in one go. A single bundle have around 20 sheets, each sheet can produce approx. 20-25 handbags.

People there have to work very carefully; a single wrong cut can damage the whole sheet, due the fluctuation in measurement, and can end it up in scrap. Sheets are very expensive and damaging a single sheet means a loss of around 20 handbags.

Stitching involves joining the cut pieces together; it requires heavy machines to provide strong and long lasting stitches. Extra accessories, such as buttons and zips are also added at this stage.

Recent Trends In 1880, the saddle was also a high demand product, but since then the demand had been declining. Nobody used to ride on horses anymore. But now the trend is on its way.

People in the Arab countries are fond of horse riding and now JafferJees is providing a solution to their need.

In Pakistani markets, people use a single product for around 15 years, that’s why the colors that are long lasting and trendy are always in. whereas in western countries people move along with style and recent trends. They change the product and colors in around 6 months. They usually go after the new arrivals.

Unlike other industries, leather goods are not dependent on a specific season. They are in demand all around the year. Red, blue, black etc these colors are most popular in men, whereas pink, purple and orange are sold relatively low and most of the time purchased by ladies.

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Double tone color leather goods are also in season nowadays. Like one sided blue, other black, fire crackers, red & blue, snake skin, crocodile skin, gold, copper etc.

STORE ORIENTATION Effective space management is what you get at the JafferJees.

Being a specialty store, the space mix comprises 40% of non selling area and 60% of selling area.

There is ample space for the customer to move around and comfortably browse through the store, providing the customer with a good shopping experience.

Attractive Displays Acting on the statement – attractive displays will get new visitors – they endeavor in making eye-catching display windows and a soothing and relaxing interior.

JafferJees attractive window displays persuade one to enter the store. As soon as you enter, the store fixtures and placement of merchandise directs you through the entire store. The aesthetics of a well designed store are a visual feast to the customer and makes the customer come back again and again.

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The Circulation Plan Following the race track circulation plan, the shop has merchandise displays in center and fixed shelves on walls, giving it a circular path.

JafferJees make their customer go through the entire store in a circular pattern so that the customer is exposed to the merchandise on display, making easy for people to choose from a high range of varieties and colors. It not only benefits the customer, but also gives them an approximate distribution of sales, refraining from the hassle of excessive inventory pileups and extra maintenance cost allocation

Space Audit In our opinion the off take at the shelves and showcases displaying purses and wallets is the most thus classifying them as hot spots. Places displaying desk sets, belts and travel goods can be classified as warm spots whereas cold spots would be places displaying horse saddles, carry alls and dog collars.

STORE DESIGN Exterior and Interior The exterior and interior at JafferJees has been exclusively designed by a professional architect, Shariq. JafferJees has created an image for them based on a consistent store exterior following the green and white theme for all the outlets. The interior is planned to give it an exquisite look, with extensive lighting, shelves and showcases complementing the entire theme of the store. The interior at JafferJees provides the right image and is in harmony with the tastes of its target market.

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Signage Even though consistent with their themes, JafferJees have different signs at different locations. At their main stores at Mehran Heights and Tariq Road, they follow their theme and have a green sign; whereas at Park Towers, the store has a stylish white and silver sign.

Fixture, Visual Type To give its products an exclusive splendor JafferJees hires the expert capabilities of an interior designer. Different types of merchandise are displayed through different mediums. Shelves are used to display purses, organizers, briefcases, cases and kits. Hanger exhibit belts carry alls and dog collars. Wallets, jewelry boxes, vanity cases and stud cases are displayed in show cases. JafferJees uses a number of spotlights, preferring bright and warm yellow lights to trigger impulse purchases.

Merchandising and Display JafferJees creates a buying feeling in the customer by exhibiting its product in a spectacular manner.

Through effective window displays and a fabulous presentation, they successfully convert the passersby into browsers and browsers into buyers.

JafferJees creates the right ambience by complementing its products with the right fixtures, impressive presentations, and lighting that creates an impact on the customer. The right ambience augments shopping experience for the customer and triggers the comeback feeling while occupying a distinctive position in his mind.

Visual merchandising is an effective communication tool. JafferJees through its window displays and in-store presentation communicates its

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latest arrivals, matching their products with upcoming fashion and trends.

They also inform their customers about latest trends.

Window Displays Window displays at JafferJees are a mixture of exclusive and open displays where the center of the window has a backdrop and the sides of the windows are open, which allows the customer to glance inside the store. Window display of bags at the Park Towers outlet

Counter Displays Shelves and showcases are used to display purses, wallets, key chains and organizers.

Cascade Displays Cascade displays are used at JafferJees to exhibit dog collars, carry alls, belts and coat covers. A distinct style of product display at JafferJees

Employee Type JafferJees employs the following types of employees:

Frontline Employees The minimum requirement at JafferJees for the front line sales staff is intermediate. The management believes that their sales people are the brand ambassadors. The target market at JafferJees requires the staff to be able to communicate in English and have good presentation and interpersonal skills.

Other Staff The main departments at JafferJees are as follows: • Accounting • Administration • Quality Control Recruitment at JafferJees is done on the basis of the human resource needs of the relevant departments. The number of employees in each outlet at JafferJees depends on the size and location of the store.

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E-COMMERCE ACTIVITIES Online Store Front E-Commerce industry grew in the last few decades – credit goes to the growing trend towards online shopping. In accordance with this trend and to provide convenience almost all companies went live with a website.

JafferJees too, after employing many sales-increasing strategies, decided to get a page of their own. Giving their customers a convenient way to choose from a variety of products and get it delivered at their door steps, without mattering about customer’s location.

A website was launched in 1999 to the international markets. Later in the year 2002 they launched an e-store exposing their products nationally and internationally. The online store front at Jafferjees.com is consistent with its brick and mortar format and follows the same theme. It helps in maintaining a sustainable image and creates the feeling of comfort. The online store front, through its signature identity, triggers browsing and persuades the customer to buy. In the past, JafferJees used to publish catalogues and brochures to provide their customers the ease of ordering from their homes. They expected their sales to go up through this medium, but because these means are not common in Pakistan their profits remained unaffected. It was also inconvenient to up-date the catalogues as new products were innovated day-in and day-out. They tried to reduce their costs by creating a CD, which served the purpose of a catalogue, which again was hard to modify, and so they decided to put an end to these, and launched an e-store.

Online Store – Benefits E-Commerce website has benefited JafferJees in many ways:

International outreach “A wide customer base is what we get out of e-tailing”, says Murtaza A. Quettawala, overcoming trade barriers and expanding towards western countries have benefited them well. JafferJees enjoys lucrative leather goods consumption in the US, credit goes to their classy design, high product quality and an accommodative customer care. But still they are

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sometimes unable to refund or replace products to their online customers because of the outlets located only in Pakistan and Dubai.

Managed Inventory Inventory pileup is what every business man fears. In the case of leather goods, its even dangerous. Leather begins to rot after a certain period.

Moulds and fungus appears on face of the goods, giving it a nasty look.

Online Merchandising helps JafferJees in lowering their costs and in increasing profit margins. Virtual Space is unlimited which allows them to display and present infinite number of SKUs without having to worry about efficient space utilization.

Online Pricing Pricing at Jafferjees.com varies for national and international delivery. For purchases above Rs. 2,500 nationwide deliveries are free. For international deliveries, the cost of the courier service is to be paid by the customer and no extra service charges are charged by JafferJees.

Visual Density As mentioned previously, JafferJees has a wide product range and etailing allows JafferJees to display its products and merchandise without maintaining the inventory levels.

Micromarketing By focusing on satisfying their corporate clients, JafferJees is involved in designing unique and tailored products to facilitate their needs and requirements. They also provide their individual customers the choice of getting their purchases personalized by embossing their names in different styles. Initially, customization was only available at their outlets, but now it is on their website too. Customer can select from a given set of fonts, in different color, alignment and size.

MARKETING STRATEGIES Branding With a wide range of merchandise, JafferJees offers quality at its best at affordable prices. By 1988, the JafferJees name had become synonymous with leather products of unmatched quality in Pakistan, necessitating the 25 | P a g e

Success Story: JafferJees Leather Goods

Small Business Management

need for a brand identity. Within a short period, JafferJees clientele witnessed the infusion of a branding strategy that not restated JafferJees unparalleled quality, but also established it as the brand of choice for high fashion genuine leather products.

Store Positioning JafferJees positions itself as: ‘A specialty store dealing in quality leather goods.’

JafferJees has always been successful in communicating with its clients.

The promise of the finest quality leather products has been successfully fulfilled. The positioning of JafferJees has always been consistent because of which they have been able to integrate it in their organization's culture.

International Expansion It was but inevitable that JafferJees offerings be made available to discerning international customers. Thus it opened its doors for business in the city that is set to establish itself as the crown jewel of a modern business metropolis in the east – Dubai, business hub of the United Arab Emirates.

Located in Dubai’s prestigious Burjuman Centre since 1994, JafferJees creates a unique shopping experience for connoisseurs of fine hand crafted leather goods.

MARKETING MIX The retail marketing mix at JafferJees consists of the following elements:

Product Offerings JafferJees after a careful study of its clients’ needs and wants have come up with a diverse product range. Over the past 125 years, they have transformed the creation of genuine leather products into an art form.

From a key fob to exquisite luggage sets, JafferJees hand crafts a wide array of products. Be it a lady’s evening bag that reigns undisputed as conversation piece, a document case that makes a statement on its own, or a desk accessory that demands attention, there is an article to delight the most demanding connoisseurs of fine leather.

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• Vanity Cases Lipstick Cases • Hand Bags • Purses • Cases • Kits • Trolley Bags • Travel Bags • Boxes • Key FOB • Accessories

Place JafferJees is located at Mehran Heights, Park Towers and Tariq Road.

Price Price is an important element in the marketing mix. JafferJees prices their items on the basis of the simple formula of cost plus profit margin.

Products have prices in accordance with its quality. Customers buying in bulk are offered considerable discounts too. But in these days they are facing difficulties, because of the fluctuating prices of petroleum products (it is one of the key elements in making leather goods), frequent electricity and water shortages that not only raise their cost but lower their profits margin too.

People to serve The customers at JafferJees belong to the upper class. They ensure that the quality standards promised by JafferJees are delivered.

People that serve Even though JafferJees claim that they hire trained and educated employees, yet they are shy and less confident when dealing with customers. Therefore, JafferJees train their employees in such a way that

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they provide assistance and help buyers in making their purchase decision.

Presentation JafferJees groups their products and services in an exclusive splendor and attends to its customers on personal basis.

ADVERTISING JafferJees rarely advertises, though they are publicized by the media and communicate the proposition of the entire store through personal selling.

They once advertised on the Google bar for their online store. Recently, JafferJees was given coverage in Brand Zone, a program by Business Plus. The main reason for not advertising is the limelight and hype that prevails when heavy marketing campaigns are initiated. JafferJees do not want to be like that, they have established their brand name in more than a hundred years, now a single mistake or mismanagement can spoil the whole reputation. People take JafferJees products as a brand of quality and it is very critical to maintain it, In the international region too, they are just dependent on their website for small advertising. They just display their concepts on online store, because customers from London, South Africa, USA etc already know them.

SUPPLY CHAIN MANAGEMENT Supply chain management is an end to end process in merchandise planning and movement, from planning the inventory (preparing the purchase order) to the point of reaching the merchandise.

JafferJees has a proficient supply chain management process, which allows them to reduce their back-end costs, maintain optimal inventories and helps them in making faster deliveries.

Purchase Order Inventory management at JafferJees is administered on a daily basis. The purchase orders are made in conformance with requirements of each store, as soon as the inventory reaches the minimum level.

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Vendor Management Leather in its finished form is bought from within Pakistan. Products designed by the owners of JafferJees are then forwarded on to the contractors who work specifically for JafferJees and are involved in producing the finished goods.

Warehousing The warehouse facility at JafferJees is involved in receiving, pricing, tagging, bar coding, storing, docking, preparing, readying and transporting the merchandise required at each outlet. It is also responsible for checking quality of raw material and finished products delivered by the contractor.

Goods Received and Inter Transfer Note JafferJees makes it a point to send goods received note to the vendor as soon as products received are checked and matched with the relevant purchase order. Whenever replenishment is needed at any outlet of JafferJees, an email is sent to the warehouse by the store manager. After products are transferred, an inter transfer note prepared by the manager is sent to the warehouse.

Transportation The products are transferred through rented vans.

Material Handling Equipment Safety measures are taken to ensure that the products are not defected while delivery. The items are filled in cartons and distributed to the respective outlets.

Efficient Docking The implementation of First in First out (FIFO) delivery plan at JafferJees ensures best utilization of space and helps in minimizing the aging of merchandise kept in the warehouse

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JafferJees is constantly striving to improve its relations with customers.

Nowadays customers are educated and more aware due to media exposure and the internet. JafferJees ensures that the customer comes again and again to the store by adapting the following strategies: • Integrating systems and policies based on customer friendliness.

• By incorporating a customer-centered culture.

• By giving first priority to their customers.

• By allowing their customers to express their views through comment cards.

INFORMATION SYSTEMS JafferJees believes in advancing through technology, and have stepped the technological arena in order to cope with globalization, and to function smoothly in every area. The IT system was made in house by a programmer, who after design and implementation handled it over to the management. Now it is dealt by an IT in charge.

The management information system and inventory management system is also under the IT dept. which is constantly going for up gradation to much higher levels. JafferJees have some selected people who are taking care of the information system as it contains all the confidential financial details that showed be protected in order to save internal integrity.

POS Technology JafferJees makes extensive use of POS Technology, and is highly equipped with hi-tech scanners and cash registers. Their cash registers not only produce cash receipts/memos of customer purchases, but also stores information in a database.

This information can be retrieved at any point of time for tracking customer purchases. It also reduces the time required for efficient customer checkout.

Technology and Store Operating Processes JafferJees has incorporated an intranet among its three branches located in Karachi, Pakistan. The network has linked all the three branches to the head quarter.

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JafferJees also has a dynamic inventory management system.

Indicators have been set to trigger off minimum and maximum inventory levels. As soon as the inventory level goes down and touches the minimum target, an automatic order is placed and the inventory is replenished.

At the end of the day, the store managers have to e-mail a detailed report to the headquarters.

Human Resources and Technology JafferJees cash registers also help in evaluating their sales personnel performance. They have software that enables them to link customer purchases with sales staff.

Each sales person is assigned a code. Every time a customer is billed, the sales person has to enter his code, which enables JafferJees to keep a track of the number of customers dealt by him.

MERCHANDISING Women JafferJees has further categorized products designed for women according to their needs. These products come in two finishing: matte finishing and polished finishing.

Handbags Handbags come in a large variety, with different shapes, designs and colors.

Round, square, double pocketed, shoulder strapped, with a magnetic button or zippers inside etc.

Wallets Wallets are designed absolutely according to a daily need that is why they are always in demand. Usually wallets at JafferJees come with two cash compartments, credit card slots, ID window, coin pockets and spaces for receipts etc.

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Lipstick Cases A perfect solution to beauty conscious women – the lipstick case, made out of pure leather has a small mirror, a snap button closure and two or more slots for lipsticks placement.

Jewelry Cases An exquisite product to hold gems and jewelries, people always look something durable and long lasting for keeping their jewelries. JafferJees provide them with a roomy leather jewelry box with a two digit combination lock.

All products are available in the following colors: • Red • Burgundy • Black • White • Mud blue • Brown • Dark Green Wallets and organizers can also be customized and buyers can have their name imprinted in different finishing; gold, silver, or embossed.

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The fourth division at JafferJees business has been classified into: Portfolios Portfolios have a space to accommodate an A4 size letter pad, penholder, organizer, other accessories etc.

Briefcases Briefcases too come in many designs and colors. Many of them have a three digit combination lock, normal compartments & zipper pockets, laptop case or a detachable shoulder strap.

Desk Accessories Desk accessories include pen & card holders, coasters, paper weights, planner boards, refillable tissue boxes, paper cutters etc.

Business Card Cases Simple and stylish card cases come with several pockets for business cards, credit cards, receipts and sometimes a back pocket as an extra.

Organizers Organizer is one of the basic needs for a business executive. It contains a stylish pen and a pad to take notes. Other than this it has pockets for credit cards, receipts etc These categories can be further classified: • Portfolios have been further classified into document portfolios and writing portfolios.

• Briefcases are divided into executive briefcases and executive bags.

• Desk Accessories comprise desk sets, document trays and accessories box used exclusively in offices.

Travel Goods Travel goods have been classified into five categories: • Cases 33 | P a g e

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• Travel Wallets • Easy Travel Bags • Kits • Trolley Bags

The Categories mentioned above have been further divided into sub Categories: • Cases basically have two types: tie case and toiletry case.

• Easy Travel Bags have been manufactured using soft leather and hard leather.

• The kits sold at JafferJees include jewelry kits and travel kits.

• To provide ease to the constant travelers, JafferJees also produces pilot trolley bags.

All & Sundry Categories The division All & Sundry has been further categorized into: • Cases • Wallets • Boxes • Keys Fob • Accessories These categories have also been sub-divided: • Cases in the All & Sundry division are of different forms, such as: key case, credit card case, and spectacle case.

• Boxes make perfect presents and are of two kinds: trinket box and jewelry box.

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• Accessories used in offices are specially designed for companies and are of two types: note pads, and memorandums. They also have funky, stylish and in-vogue photo frames.

Shrinkage in Merchandise Management Shrinkage at JafferJees is 1-2% and occurs due to customer theft. Previously, at JafferJees, customers were given full privacy and were allowed to explore the shop on their own, which increased pilferage and resulted in lower margins. JafferJees now makes an extensive effort to reduce this phenomenon by training their sales person to accompany each customer without imposing on them.

HUMAN RESOURCE MANAGEMENT JafferJees have one of the best human resource management, and it is clearly evident from the fact that they have employees who are working for them for around 15 years. In spite of not following the modern ways of recruiting, they have got the most loyal and customer-oriented employees. They just hire people on behalf of references. Usually all the employees are related to each other.

Human resource management at JafferJees like any other retail or familyoriented business involves the following activities: • Recruitment • Manpower Planning • Motivation and Rewards • Salary Structure

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JafferJees hire people on reference (most of the time it’s from their employees). So there is always a high supply of people available for a vacancy, almost all of the employees have relatives looking for a job. And they all want their relatives to join JafferJees. It is obvious, everyone cannot be hired, so they try to sort out the best amongst all, who can care for their customers, behave with them properly, satisfy their need and at the end take care of the products and merchandise on display.

What a person has done in the past best indicates future performance.

Therefore they use appropriate techniques to help discover a person’s past performance and future possibilities. The amount of information that they need to know about an applicant depends on the type of employee being recruited. Most of the time they hire sales people, so there is little to gather about them, all their information need is settled by the current employee, who has provided reference for the applicant. Whenever they require an office employee or a person who is to handle a large responsibility, then they go for more information. Management at JafferJees very well knows that the consequences of hiring an incompatible worker can be very disruptive.

Preliminary Screening and Interview Before hiring an employee, management at JafferJees, perform a brief screening and interview. They look for a convincing capability in a person, as he would be the one facing the customer. JafferJees want their people to understand their customers need and find an appropriate solution to it, Instead of just getting a sale.

Next they look for some obvious factors as voice, physical appearance, personal grooming, experience and basic educational qualifications. They at least want their employees to understand English or even just read or write.

Recruitment JafferJees does not have formal recruitment and selection processes.

Employees are usually hired on the basis of reference. Most of the time new employees are hired on reference of the former employees (as discussed in the previous section). It helps to bring present employees into process – in an advisory capacity. Having helped in the selection, they have a greater commitment to working with new hires. And for the new hire too, it becomes easy to settle and get acquainted with others.

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Termination Where there are good and loyal people, there are opposites too.

JafferJees too, sometimes faced with arrogant and pathetic employees.

Instead of firing them straight, they first try to figure out the problem and help the person with it. They only let them go when the productivity goes to zero, or the person starts misbehaving with customers. Because, at the end of the day, it’s customers they look for. And the management knows that, if they are not served well, low sales and bad word-of-mouth would be their fate.

Manpower Planning Although manpower costs are high, to support their image of a specialty, store hires a number of employees to achieve the standards of performance and productivity.

Even though JafferJees does not have a strict educational requirement for its employees, yet it prefers to hire employees who have had the experience of working in a retail outlet and have the ability to cope up with the requirements of their job.

JafferJees considers the following aspects in manpower planning: • Business planning • Work task organization • Store positioning • Type of sale • Working hours

Motivation and Rewards If JafferJees comes across declining sales due to inefficiency of sales staff, they try to correspond on a personal level with the employee and by identifying the reasons for his diminishing performance, try to solve the problem. This in turn motivates the employees and strengthens the relations between the employer and employee.

Attendance Bonus

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JafferJees wants their employees to be punctual. They award bonuses to their employees who are prompt in coming to work each morning. And similarly they deduct a certain amount from their salaries on showing up late or being absent.

Other Bonuses Other than only attendance allowance, JafferJees provide their employee with several other bonuses and allowances.

On both Eids, twice a year, they give their employees a certain amount as bonus, So that they can enjoy the festive season in a contented way.

Conveyance and Lunch allowance to all and an annual bonus is awarded according to the performance of each employee.

Education JafferJees help their employees if they seek further education; they get them admitted to a reputed institution and assist them in studies. Not only employees, JafferJees helped their employees’ children in getting education too. Along with running a business, they are striving for the betterment of the society.

Physical Appearance Management at JafferJees knows that the first encounter of customers is with their salespeople if they are not dressed properly, negative impression is what their customers would take as soon as they leave.

JafferJees provide their employees with good shirts, pants, JafferJees wallets, mobile pouches, belts etc. it not only benefits their image but helps uplift employees’ lifestyle and boosts motivation.

Involvement with Employees There are many businesses where the employees do not even know who the owner is. But at JafferJees the situation is vice versa. They have a total of around 50 employees and owners are well aware of every person’s name. They usually talk with each other, handle customers together and have a friendly atmosphere. Employees realize that their employer looks after them and cares for them, inciting them to perform even better, whereas, the owner get a chance to know their employees problems and help them to find a solution.

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Salary Structure The salary structure at JafferJees is such that a fixed amount of salary is paid to all the employees at the end of the month. New recruits get a basic salary that is set by the state. But once they get to know the tasks and gain experience of handling customers and their needs, their salary is raised to a certain percentage.

This maintains equality and coordination among employees and bars out frustration. New employees know that their colleagues are paid more, but they also know that they have been working for a long time. This sort of salary scheme provides the salesperson with the security of income and ensures high loyalty to JafferJees. Apart from all this, the benefits and extra bonuses that their sales people get are well enough to retain them.

Inferential point - JafferJees care for their people, they help them and pay them more than the industry average.

CONCLUSION JafferJees is perceived to be the best quality leather goods provider. Over the years, JafferJees has been successful in building a brand name and image by delivering the benefits promised to the customers.

However, we feel that by adapting different modes of advertising JafferJees can communicate the brand image more clearly, creatively and effectively. It will also help them to reach to a larger audience. JafferJees is not involved in any kind of research. If in future they plan to focus on customer relationship management, they need to indulge in in-depth research so as to identify the needs and desires of their target market.

JafferJees plans to expand further by opening an outlet in Lahore, and by 2010 it will start functioning. To give itself the maximum exposure, they are also planning to expand to other major cities of the world such as New York, London & Paris. It also has plans to introduce customer loyalty programs to further strengthen its relationship with its loyal customer.

No business can be maintained effectively without going through problems and issues. JafferJees too faced problems throughout their 39 | P a g e

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journey. Recently, like all other businesses in the world, they too are facing low sales because of the financial crunch all around the world.

Secondly, the country’s current situation has also been affecting their growth and pricing strategies. Frequent power and water shortages, fluctuating petroleum prices, political instability, uncertain conditions, high raw material costs and legal issues, they all contribute equally to their challenges. But still the management at JafferJees is working out all the solutions to this problem just only to deliver what they promise – A tradition of quality.

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