Arvind Brands’ Competitive Position in the Indian Branded Apparel

Market

Presented By:

Chandranath Banerjee

Debsadhan Chaudhary

Kunal Dadlani

Prantik Ghosh

Rajat Saxena

CONTENTSIntroduction Apparel Industry Analysis of Arvind’s Brand Portfolio

Arvind’s CompetitionGrowth StrategiesSWOT AnalysisPORTERS FIVE FORCES AnalysisBranding StrategiesIssues

Conclusion

INTRODUCTION

Established in 1931 by the Lalbhai brothers of Ahmedabad.

Birth of three new units in 1993 - textile, telecom and garments

division.

Arvind Brands Ltd was a Rs. 3.50 million subsidiary Arvind Mills

Major stakeholder - ICICI , 2004.

Arvind Mills reacquired ICICI’s stake by raising US$ 37.19 million

Arvind Brands became 100% subsidiary of Arvind Mills in 2005.

INTRODUCTION

All the brands under the Arvind name were growing at a

healthy rate in 2004.

Plans to sustain growth by increasing retail presence.

Saif Ali Khan appointed brand ambassador for the

Newport brand in 2005.

Strategy was increasing distribution and penetration.

Competitive edge-zero excise duty and economies of scale

THE BRANDED APPAREL INDUSTRY

Multi fibre agreement

Characteristics of the industry.

Growth of the industry.

Important segments-jeanswear

Important trends in the industry.

Major players-Bombay Dyeing , Raymonds and Pantaloons.

ANALYSIS OF BRAND

PORTFOLIO

Parameters to judge portfolio

Maximizing brand equity : one brand should not harm others.

Branding strategy according to breadth and depth.

Segmentation, targeting and positioning of brands.

Breadth of branding strategy

The number and nature of different products linked to the brands sold by a firm.

Depends on:• Aggregate market factors• Category factors• Environmental factors

Depth of a branding strategy

Number and nature of different brands marketed in the product class sold by a firm.

Helps in • Increase shelf presence and retailers

dependence• Attract consumers seeking variety• Increase internal competition

Golden rule : Maximize coverage and minimize Brand overlap

Arvind Brand Basket

Flying Machine Newport Ruf n Tuf Excalibur

Launched 1980 1993 1997 1995

Age group 15-30 18-28 15-30 18 & Above

Price range 500-1000 300-500 299-699 500-1000

Difficulties faced

Hike in exise to 8%

Hike in exise to 8%

Distribution hurdle

----

Retailer own outlet own outlet Big Bazaar

Brand ambassador

Abhishek Bachchan

Saif Ali Khan Akshay kumar ----

Tag Line Who Needs Phoren?

The Measure of Success

---- ----

International BrandsArrow Lee Wrangler Tommy Hilfiger

Licensed Cluett, peabody & co., USA

VF corporation VF corporation JV with Murjani group

Age group 27-35 4-14 & 17-25 17-25 &25-40 18 & Above

specifics Four sub brand•Classic•Premium•Urban•Sports

Adjudged the images fashion award “most admired Jeanswear” brand

•Fashion conscious•Love wearing denim on weekend•Retail ambience was given importance

Introduced men’s sportswear, men’s Jeanswear, junior Jeanswear

Why so many brands ?

Aggressive strategy to verticalize its operations.

Vision of largest apparel brands.

To attract different segments by heterogeneous mix.

Facilitate new brand acceptance

Reduce risk perceived by customers

Improve efficiency of marketing.

Competition

Major Competitors Of Arvind Brands

Madhura GarmentsIt’s was the garment division of Indian Rayon and Industries Ltd. A flagship company of the A V Birla Group Company.

Owns perpetual license for premier brands like – Louis Philippe, Van Heusen, Allen Solly, Peter England, Byford, Elements and SF (San Frisco).

Preferred global supplier of international brands like- Marks and Spencer’s, Tommy Hilfiger, Polo, Ralph Lauren, and several others.

It distributes its brands through its own retail chains namely Planet Fashion and Trouser Town.

Brand Portfolio of Madura Garments

RAYMOND APPAREL LTD

A 100% subsidiary of Raymond Limited, Raymond Apparel Ltd. (RAL) ranks amongst India's largest and most respected apparel companies

They provide the best of fabric and style through some of the country’s most prestigious brands – Raymond Finely Crafted Garments, Manzoni, Park Avenue, ColorPlus, Parx, Notting Hill and Zapp!

All of Raymond’s brands are available at exclusive brand stores, ‘The Raymond Shop’ retail outlets and multi-brand outlets across India and the Middle East

RAYMOND’s BRAND PORTFOLIO

INDUS LEAGUE

Indus-League Clothing Ltd., was founded on 14th April 1999 by a team of eight top-flight management professionals from the clothing industry. These professionals have established a reputation for creating and building some of the most successful fashion brands in South Asia and the Middle East.

Within an year Indus League had transformed itself from a new entrant into a company that has launched two fashion brands namely Indigo Nation and Scullers

Indus-League has a portfolio of Three proprietary brands - Indigo Nation , Scullers and Jealous covering different segments of the fashion market.

LEVI STRAUSS & CO.

Founded in 1853 by Bavarian immigrant Levi Strauss, Levi Strauss & Co. is one of the world's largest brand-name apparel marketers with sales in more than 110 countries

In 2009 it completed 15 years in India

It expanded its portfolio from being a jeans only brand to emerge as the complete casual wear brand

4 sub-brands Sykes, 501, Red Tab and Red Loop

Levi Strauss’s Brand Portfolio

PROVOGUE The Company was incorporated on November 11, 1997 as Acme Clothing

Private Limited.

Provogue stands for fashion and not pure apparel. Its designs are contemporary and cutting edge

Provogue’s brand statement “ Redefining fashion” and its innovative merchandise have created a niche in the minds of its consumers.

The brand is retailed through selective stores in the country and leading National Chain Stores like Shopper's Stop, Lifestyle, Globus, Westside etc.

More importantly, Provogue is also retailed through a chain of exclusive brand outlets called "Provogue Studio"

PROVOGUE’S PRODUCT RANGE INCLUDE:INNERWEAR , T-SHIRT , BOTTOMS , JACKETS & BLAZERS , DENIM , FORMAL SHIRTS , LINEN SHIRTS , CASUAL SHIRTS, FOOTWEAR , SUNGLASSES , FRAGRANCE , CAPS, BAGS , BELTS

ARVIND’S GROWTH STRATEGY

As on 2005, Arvind was in a comfortable position.

Focus on retail------Company want to achieve 80% of its sales through apparel.

Change from Centralization to Decentralization

Clustering of Brands

ARVIND’S GROWTH STRATEGY(Cont..)

Globalization Strategy

• Acquiring rights of Reds in North and south America• Exclusive stores in Gulf to showcase its brands

Launching of Spectrumplaza.com

Tie ups with Indiatimes.com and rediff.com

SWOT ANALYSIS

Strong portfolio of domestic and international brands

Economies of scale through complete integration

Latest manufacturing tools

Wide geographical presence

STRENGTHS

WEAKNESS

Lack of fresh ideas

Presence in only big cities

Not doing enough to build brand equity

OPPORTUNITIES Changing retail scenario

Rapid growth in age group of 15-44

years

Ability and willingness in India

THREATSCompetitors like Raymond, Bombay

Dyeing, Madura Garments

Cheap imports from China, Thailand,

Bangladesh

Excise duty

PORTER’S FIVE FORCES MODEL

COMPETITIVE RIVALRY

Competitors adopting aggressive growth strategies as well as eyeing top cities

Huge number of competitors

Stiff competition from small town stores and specialty stores

THREAT OF NEW ENTRANTS

Lucrative market for international brands

Low entry barriers in unorganized retail

sector

THREAT OF SUBSTITUTES

•Plenty of offerings in premium and super premium category

•Small town stores – proximity, home delivery, personal attention

•Growth in online shopping

BARGAINING POWER OF SUPPLIERS

Increased no of players increases bargaining power of suppliers

Not all companies have complete integration (like Arvind)

BARGAINING POWER OF CUSTOMERS

Low switching costs

Low customer loyalty

BRAND HIERARCHY

The apparel industry did not follow the umbrella branding

strategy

Arvind divided its brands into 4 clusters and each cluster had its

distinct marketing strategies

Corporate or Company Brand: Arvind Mills

Family Brand: Arvind Brands Ltd.

Individual Brands

- Licensed Brands: Lee, Wrangler, Arrow, Tommy Hilfiger

- In-House Brands: Newport, Ruf n Tuf

Modifier: Leesures by Lee

POP & POD

Points of Parity

•are the attributes or benefits which the brand shares with other brands

Points of Difference

•are the USPs of a brand, distinct from others

In this case, Arvind’s POD’s are not well defined. Their

offering, target audience and positioning is very similar

to its competitors.

CHANNEL STRATEGIES

Indirect Channels

• ex. Multi brand store, small town retailers

Direct Channel

• ex. Company-owned stores

Arvind was shifting its focus from multi brand and

small town stores to company-owned stores

PUSH & PULL STRATEGIES

Pull Strategies

• are the ones directed towards end consumers ex. Television ads

Push Strategies

• are directed towards distributors and retailers. Ex. Trade discounts

Arvind mainly concentrated on Pull strategy ex.

endorsements by Bollywood stars like Akshay & Saif. Push

Strategies weren’t required as they were concentrating on

company-owned stores

OTHER CONCEPTS

Brand Extension: when different products are manufactured under same brand

name. Ex. Arrow started off as a shirts-only brand then diversified into casuals,

jeans and accessories like belts, wallets etc.

Forward Integration: Arvind Mills, which manufactured fabrics, integrated

vertically forward by launching its in-house brands and retail stores.

Brand Endorsement: associating a popular figure as the brand ambassador to

give the brand a personality and strengthen its positioning ex. Action star

Akshay Kumar was roped in to endorse Ruf n Tuf to give it a tough & rugged

look.

ISSUES

Lack of new ideas

Inability to keep up with the changing market demands

Unwilling to place its products in multi-brand stores

thereby losing customers in the tier-II, tier-III cities

Tough competition from local and international players

Just one offering for the bottom of the pyramid (Ruf n Tuf)