international marketing footwear export house

INTERNATIONAL MARKETING

FOOTWEAR EXPORT HOUSE

ADITYA CHATURVEDIANUPAM DUBEYANKUSH KR. SONISUNIL CHABBARWAL


FOOTWEAR INDUSTRY IN INDIA India is the second largest global producer of the footwear in the world after China.

Accounts for almost 13% of global production of footwear producing 16 billion pairs.

India exports about 115 million pairs of footwear every year.

95% of the production is catered to the domestic demand.

Major production centers- Chennai, Kanpur, Agra, Faridabad, Delhi, Sonepat, Karnal, Ludhiana etc.

Exported footwears-Dress shoes, Moccasins, casuals, sports shoes, Horrachies, sandals, slippers, Ballerinas, Boots.

It gives employment to about 1.10 million people.


BRANDS SOURCED FROM INDIA

FOOTWEAR EXPORT HOUSEMajor Importing Countries of Footwear (Leather and Non-Leather)

(Value in Million US$) Country 2007 2011

USA 20039.13 23245.06

Germany 5966.99 8527.62

France 5473.04 6538.01

UK 5281.55 5886.75

Italy 4529.77 5661.77

Japan 3750.04 5062.13

Hong Kong 4881.67 4850.30

Russia 2067.82 3935.95

Netherlands 2297.95 3716.65

Spain 2388.74 3114.08

Belgium 2543.04 2427.09

Canada 1677.05 2089.43

FOOTWEAR EXPORT HOUSE Company name -


PRODUCT -All kinds of LEATHER SHOES

ITC HS code -64035111

Sales type -Both Domestic(20%), International(80%)

Preferred International location -Germany

Company Location -Chennai


GERMANY

Second largest importer in the world after US and largest importer in the European Union.

GDP(PPP)- 3.25 trillion USD

Germany’s footwear market is worth 8.7 billion Euros as of 2010.

Germany imported about 4.3 billion Euros worth of footwear in the year 2010, nearly coming to half of its total consumption.

Demand for the medium to high-end niche products is increasing as customers are making away from the conventional designs which are produced by the country’s manufacturers.

Germany imports about 16% of whole of European Union footwear imports.

Due to the changing trends and market instability and high competition, internal manufacturing is dropping at a rate of 2.5-3% P.A.


External

In German imports of footwear, major exporting countries are as follows:-

China - 861

Italy - 557

Vietnam - 496

Slovakia - 256

Portugal - 250

India - 196

Indonesia - 114

*all values in million euros

COMPETITION

Internal• Brikenstock shoes• Papillio shoes• Sanita Shoes• Haflinger shoes• Tatami shoes• Adidas• Brutting• Zalando• Rohde shoes


MARKET ENTRY As a start-up company we will be following “CONTRACTUAL BASIS” of production system.

“Built-to-order” type production system will be our USP.

Engaging into long term contracts with the Germany’s shoe manufacturers for sustained working of the company.

Entering into the medium priced market by launching our own brand and giving styles and shapes which are unique to the German market.

Establishing a name for self while also catering to the niche/high end market via the companies established in Germany.


SEGMENTATION AND DISTRIBUTION Two types of market segmentation – Niche/High-end and medium priced

Niche/High end- catering through “Build-to-order” with the logo of the company which has contracted.

Medium priced – Catering through own branding by giving them new shapes and styles which appeal to the young generation of customers who want something different. Different shapes, sizes, patterns, colours combinations, cool graphics printed onto the shoes will make our brand unique and distinctive.

DISTRIBUTION

Distribution for niche/high end product will be contracted company’s own responsibility to sell as we will just manufacture them and the branding onto it will be contracted company’s.

In the early phases of the distribution of the medium priced segment of shoes with our own branding, we will tap local multi-brand sellers to sell our brand and create awareness of the brand.

Once the demand and popularity picks up, we will use the shelf space of the branded retailers to sell our brand, thus creating a positive image in the minds of our customers.


TRANSPORTATION

BUILT TO ORDERMethod : FOB(Free on Board)

For Built to order type of selling, we will be using FOB method which means we will be transporting to the shipper’s transport and also paying inland customs duty.Once on the board of the transport vehicle it will be buyers responsibility.

OWN BRANDMethod : DDP(Delivery Duty Paid)

For our own brand, initially we will using DDP type of method to get our brand to the country and sell them through the proposed system of distribution. As the demand and popularity picks up we will eventually move to CIF(cost, insurance and freight)


THREATS It might be possible that branded stores does not allow us to sell our brand.

Competition from other country manufacturers specially from China may disrupt our target market.

Lapse of contract may force us to get out of the market as majority of our profits will be coming from this area.

Our brand may run into cheap image brand as it has been manufactured in a developing country.

Resolution of customer grievances at the starting level may be not that effective thus creating a negative effect.

Increase of port customs to may increase the overall price of our product.

Cash crunch crises may force us out of the market as selling of footwear is a lengthy affair.

As the competition increases tax increment may hurt the overall pricing of the own branded product.

Local manufacturers seeing the opportunity may enter into the market with competitive prices which will force us to review the pricing of our own brand.

CONCLUSION

India being one of the global exporters in the world for footwear and seeing the market demand in major economies in the world, it can be safely concluded that business proposition for exporting footwear is a profitable and growth in this industry is ever increasing.

international marketing footwear export house

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