RmkV- Situational Analysis 1

Situational Analysis

Of RMKV

By

ASHWIN D MBA10011

DEEPAK TP MBA10021

GOKULKRISHNAN S R MBA10026

KRISHNAN L MBA10039

PREMKUMAR D MBA10058

SREERAM C MBA10093

AMRITA VISHWA VIDYAPEETHAM

COIMBATORE

RmkV- Situational Analysis 2

Executive Summary

RmkV Wedding Silks is a stronghold from Tirunelvelli which entered into the two big cities of

TN- Chennai and Coimbatore. Since then, there has been heavy advertising and positioning

by the brand which aims at portraying a young image and attract the wedding bride to the

store. In recent times, it has also used a lot of kids and a rare men’s collection

advertisement in between. We analyze to study the effects and cause of Rmkv’s current

image and their urge for deviations. Also we suggest a future roadmap for the brand to

remain young and improve sales and reach while maintaining their image.

RmkV- Situational Analysis 3

1. Objectives of Analysis

To identify the category in which the brand belongs to

To identify the position of the brand in the market

Generate strategies to create a favorable attitude towards RMKV by spreading

awareness of Indian ethnic wear among Indian youth when the trend is towards

western wear

Change consumer attitudes of wearing traditional clothes (sarees)

To increase the usage by changing the mind set of customers that sarees are not only

for functions and festivals but also for regular day to day use

To establish a brand superiority in wedding silks

2. Industry Overview

Any man who has gone saree shopping with an Indian woman knows that she will physically

examine at least a hundred designs before reluctantly selecting just one.

Everyone talks about them but most do not have a clue about the real size of their business.

They are none but the traditional retail giants of Tamil Nadu which have dominated the

state’s retail landscape for decades. Even today they do not seem to be affected a bit from

the onslaught of modern department stores and malls in their home turf. Saravana Stores

does annual business of Rs 510 crores from a single seven-floor store - that is more than

what any single Lifestyle, Central or Shoppers Stop store does. From four stores, Saravana

does about Rs 1200 crores annually. This is two thirds more than the Rs 717 crores turnover

reported by Tata's Trent, which includes Westside (54 stores), Landmark (18 stores) and Star

Bazaar (12 stores).

Chennai Silks is estimated to be doing a business of Rs1150 crores (excluding jewellery) from

nine stores, Nallis of Rs700 crores from 22 stores, Pothys of Rs 650 crores from four stores

and RmkV of Rs 510 crores from four stores. These five Tamil Nadu retailers do sales of Rs

4200 crores every year collectively, which is more than the turnover of Shoppers Stop,

Lifestyle, Westside and Reliance Trends put together. This is the power of regional retail,

when modern retailers are still trying to figure out how to make this kind of business

happen. If FDI was allowed in multi-brand retail, the valuation would be above Rs1250

crores. The average foot falls for these stores are around 7500 daily and 11000 on weekends

and holidays. The stores do brisk business and it peaks during major Indian festivals like

Diwali and Pongal when new clothes are brought for the entire family. The industry has a

seasonal demand which peaks during festivals.

RmkV- Situational Analysis 4

Many of the shops like RMKV, Chennai silks and Pothys have even started online sales

platform. A catalogue of around 1500 sarees is available online for RmkV. The intent for this

is not sales but to provide more information to customers about the quality, make and

price. Once they choose the product and design as per their budget they can come to the

stores and have the look and feel of the product and purchase it. There by, Customers

coming to their stores pretty much know what they want making the purchasing process

much easier.

Many of the highly overvalued national chains like lifestyle, central and shoppers stop does

not even come close to the sales figures of these well established traditional giants in these

markets. Traditional giants pose a severe threat and prove to be tough competitor to these

national chains. The big, national brands may have the fat wallets and muscle power that

ensure domination over store shelves, but even they find it difficult, if not impossible, to

dislodge an entrenched, regional label like Nallis, RmkV or Pothys. The reason for this is

unswerving brand loyalty among consumers that often continues over generations. This

may be of the trust in brand and its quality or just force of habit, but be it foods, consumer

goods or apparel; regional brands have repeatedly proven their unshakeable hold over

customer’s mind space.

One of the main challenges that lies ahead for the industry is change the mindset of the

consumer i.e. “Getting younger women to wear sarees “. Sarees are considered to be very

traditional and the category itself has an older look. Sarees are perceived to be worn by

older women in the family or only during functions and festivals and not for regular use.

Consumers have migrated to chudidars, salvar kameez and other western dresses

3. History of the Brand RmkV

RMKV is one of the most reputed companies producing its trendy, unique silk and wedding

silk sarees. Back in 1924, when India was under the British rule and organized retail was

non-existent, RmkV Vishvanatha Pillai set up a 1000 sq.ft. Women’s RMKV Women’s wear

shop in Tirunelvelli, named RmkV after his initials. With silk sarees as its core product, the

shop operated from the same location until it shifted to a much larger 35,000 sq. ft.

megastore in another location in the same town in the 1950s. As it turned out, that market

was to grow by leaps and bounds, positioning RmkV at the centre of a thriving retail hub.

The founder focused on churning out volumes rather than profits. RmkV today is reputed

for its wedding silks, unique silk sarees, as well as family apparel, with large showrooms in

Chennai, Tirunelvelli and Coimbatore. With 88 years' experience in silk, RMKV was identified

with quality products, design innovations and new techniques in handloom silk weaving

which have won them two national awards. Today the brand continued that tradition, but

also took the company forward, marrying tradition with modernity in everything from R&D

to design.

RmkV- Situational Analysis 5

For 80 years, RmkV operated as a single store. Eventually, the market became so big and

crowded that, the customer experience started deteriorating. Access had become a problem

and there was hardly any parking for the increasing number of shoppers with their own

vehicles. With organized retail emerging at the turn of the century, RmkV decided to expand

and take the brand outside Tirunelvelli.

A 35,000 sq.ft. Store was opened in Chennai in 2004. Four years later, RmkV opened its

biggest store, a 100,000 sq.ft. outlet in Tirunelvelli. The original shop in the old market area

still continues to operate.

The fourth shop spread across 58, 00 sq.ft was opened at Brookfield mall in Coimbatore.

There was an uncertainty in this decision as normally silk sarees are sold in traditional

markets. However, sales sky rocketed within a short period of time it is estimated that the

sales are between 14-16 crores per month which is three times more than the life style

outlet within the same mall. The reason behind is the satisfied customers who say the price

and quality known for RmkV brand stayed intact.

The RmkV Design Studio has created numerous innovative unique silk sarees to date, the

most notable being theme sarees such as

Chinnanchiru kiliye -the 33 Bharatanatyam dance poses for Subramanya

Bharathi's song

Aiswarya Pookkal - National Award, 1998

Hamsa Damayanthi, based on the Raja Ravi Varma painting (National Award,

1999)

Kural Ovium- depicting couplets from the Thirukkural

The grand reversible sarees

The 50000-colour sarees

The varnajaalam range

They provide a unique service to their customers who can custom-design their own saree in

one of over 50000 colors, to be hand-woven by their team of master weavers. RmkV is the

first ISO9001-2000 certified silk saree manufacturer in India. RmkV also carries a wide range

of fancy and embroidered sarees, salwar kameez, and a complete range of ladies', gents'

and children's products.

Achievements & Awards

RMKV won two national awards for its innovative designs, new techniques of

handloom weaving and quality products.

The company created a buzz about the conventional Kanchipuram Sarees by setting

up a Guinness Book Record in 2004, for making longest silk saree.

Recently RmkV has filed for patents for nagasu silk saree another linolight saree and

third for its reversible saree.

RmkV- Situational Analysis 6

RmkV has established its brand because of its product, quality, service and impeccable

offerings. It has institutionalized wedding silk sarees. Wedding silk sarees has been the

brand strength but they have diversified into men’s wear, children’s wear inner wear,

fashion jewellery and Women’s accessories.

Competitive pricing and quality has been the brands strength .The biggest challenge lies in

managing multiple stores and getting the format right.

Market Analysis

Market Analysis – Demand Side:

Market for the Brand:

RmkV silks is considered as one of the traditional brands in the state of Tamil Nadu having

its origin from 1924, Currently RmkV present in 3 major locations in Tamil Nadu and is a

major player in the division of silk sarees. RmkV Gets 60 % of its revenue from silk sarees.

Silk has always been a fabric close to every one’s heart, and is considered to be traditional

garments for most of the auspicious functions in the state. The state had a cultural practice

to gift silk sarees to relatives apart from purchasing a grand silk saree for the bride during

Wedding. RmkV took this as their primary market and created a separate collection of silk

sarees for Brides and wedding occasion. This segment was considered as their core offering

and even in their retail stores, a separate bay with posh interiors were set up. This

separation in the store created an impact among the customer that they are specializing in

silk.

The key market for RmkV revolves around the advertisement business model. Whenever

any kind of innovation is carried out by the research team in RmkV, simultaneous Ad

campaign is aired across the media in the state to create a wave and expectation among the

consumers. RmkV made a big impact in the market with its 50000 color saree, one of the

first kinds in the industry and it created a huge platform for RmkV to gain market share.

RmkV diversified the Silk segment into Kanchipuram silk, Wedding Silk, Embroidery sarees,

Pattu pavadais ( long-Skirt made out of silk), which used latest handloom techniques, which

won them two national awards.

The demand for silk sarees are through the entire year except for the month of December to

January (Margahlzi) where purchase for wedding are not done as it is not considered as

auspicious by the people of Tamil Nadu, Similarly the month of August(Aadi) too had same

response from people, but all retailers have stuck to the concept of discounting during this

season to make people to buy sarees, so though the purchase for wedding does not happen

sale of silk sarees happens during this season.

Though the primary market demand for RmkV silks is based on demand of silk sarees, there

is a secondary market demand which comes from other garments ranging from wide variety

of Sarees, Mens wear and Kids Wear. This secondary demand from the consumers

contributes to 40 % of the sales for RmkV. The Secondary demand from the consumers

exists throughout the entire year, where the other family members apart from women use

RmkV- Situational Analysis 7

to purchase in the shop, the secondary demand reaches a peak spike during the festival

seasons of Pongal, Deepavali and During Aadi sale.

This both primary and secondary demand for the offerings done by the RmkV silks are

mainly generated due to the

Advertising business model of RmkV

Superior Customer service

Word of mouth publicity from existing customers.

Thus despite the market being cluttered with heavy competition with major players RmkV

has demands from its Consumers.

Consumers Segmentation of RmkV:

As RmkV silks has primary demand and Secondary demand for its offering it has

categorically classified its customers too accordingly into different segment.

The main target audience for RmkV silks is women starting from the age limit of 8 and falling

in the income segment of upper and middle socio economic class. Apart from the silk sarees

the target audience for the other section of product offerings is people belonging to the

income group of upper and lower-middle income groups, with no age as criteria as it

provides a one stop shopping place for all the other apparels & Clothes for all the age

segment ranging from kids collections, Men’s collection equipped with both business

formals and casual wear, both traditional and trendy outfits for women. Further RmkV has

positioned itself as a brand with the personality of warm friendly and a caring person who

satisfies the needs of the customers.

This segmentation and positioning of RmkV has made it be successful for nearly nine

decades

RmkV- Situational Analysis 8

RmkV Brand Preference against competition:

RmkV as a brand is well preferred by the majority of its target segment in the group of

upper and middle income segment. Though RmkV faces a stiff competition against Pothys,

Chennai Silks, Nallis silks, etc. It has managed to gain sufficient chunk of customers , one

reason is The Chennai silks and Pothys have the same target segment more focused on

middle and lower income group where people are highly price conscious and , whereas

RmkV focuses more on Middle and high income group of people. When compared with

Nallis, the target group of Nallis silks is only customers who buy silk sarees and not other

apparels, despite they have a dedicated space in their stores, and RmkV has a mixture of 60

% of customers for silk sarees and rest 40 % for other apparels and clothes. RmkV has also

positioned itself as a one stop shop for wedding collections apart from bridal sarees.

Few other additional reasons for Rmkv’s Preference among the customers are due to few additional facilities like

Online shopping with reliable delivery

Superior customer service

Product innovation.

RmkV- Situational Analysis 9

Possible Potential Customers:

RmkV so far has been mainly involved pure B2C transactions; to gain edge over competition

it could attract industrial customers. It could associate itself with corporate working class

people and can encourage them to buy same pattern sarees and shirts for their yearly

festival celebrations and other auspicious occasions, as the current Modern age corporate

companies are known to celebrate each and every festival and it could be a untapped

market to RmkV and sufficient research needs to be done on this line before investing the

funds.

4. Competitor Analysis

Pothys:

Pothys is one of the leading textile shops in Tamil Nadu,

was established 90 years back by K.V.Pothy Moopanar

under the name “Pothy Moopanar” to sell Cotton Sarees,

Dhoties and Towels woven in his own loom. In the year

1977, the showroom was rechristened as “Pothys”.

Pothys has opened the largest showroom in Panagal

Park, Chennai in the year 1999.This six storied showroom

with its majestic ambiences and gleaming marble and

imposing atrium is popularly known as an “Aalayam” for

Silks (Temple of silks). It has its existence in Chennai, Coimbatore, Srivilliputtur,

Tirunelvelli, Madurai and Thiruvananthapuram. Their exclusively hand designed sarees

include Samudrika, Parampara and Vastrakala. Samudrika pattu (silk) means a saree

which has all the beautiful characteristics. The Pothys weavers have portrayed all the

admirable designs in the Samudrika pattu and thus it stands as a first choice for the

bride in a marriage. Parampara pattu is the jacquard work on the traditional

Kanchipuram silk saree giving an outrageous look. Vastrakala pattu is the combination of

Kanchipuram silk and embroidery work of north India. Vastrakala pattu is a unique blend

of north and south Indian tradition and it is created for the modern women for function

RmkV- Situational Analysis 10

wears. Pothys also has ordinary Kanchipuram silk sarees with good design and range.

The party wear sarees are exquisite designer sarees which is ideal for social gathering

and festivals. Pothys has exhibited a new range of Kutti sarees (Kids sarees) for children.

Pothys has a distinctive advertisement style. There advertisements always have a grace

an everlasting endurance.

Pothys has its presence in all the categories and price ranges. Its vasunthra pattu alone

ranges from Rs 3000 to Rs 5, 00,000. The target segment is middle income customers

and the strategy is to provide sarees at affordable price for value conscious customers.

Discounts – “Aadi”

Chennai Silks:

The Chennai Silks showroom was started in 1960's at the textile town of Tirupur. Later it

rapidly grown to various regions in popular cities like Chennai, Coimbatore, Trichy,

Tirupur, Erode and Karur. The founder of Chennai silks was A. Kulandaivel Mudaliar. The

Chennai Silks has set a record for making “World’s Costliest Saree” that cost Rs 40, 00,

000 and also they have sold Rs 3, 931,627 to a customer which is again considered to be

a record.

The Chennai Silks sell Designer Sarees and Vivagaa Pattu

for their customers. Vivagaa Sarees are specially meant for

marriage. They have positioned it has “Vivagaa – Nalangu,

Vivagaa – Nichiyadhartham (engagement), Vivagaa –

Muhurtham (Marriage).

They advertisements on all occasions including for

“Christmas” and “Ramzan”, during which other leading stores never advertise.