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College Project on Starting a New Business in Textile Industry

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TABLE OF CONTENT
S. No 1 2 3 4 5 6 7 8 9 10 11 12 INTRODUCTION SITUATION ANALYSIS SWOT ANALYSIS 4’S OF MARKETING BUILDING THE FOUNDATION RESEARCH CONSUMER BEHAVIOUR PRODUCT STRATEGY PRICE STRATEGY FINANCIAL ANALYSIS PROMOTIONAL STRATEGY BIBLOGRAPHY TOPICS Page. No 5 8 9 10 11 12 14 16 18 19 22 25

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INTRODUCTION: Until the economic liberalization of Indian economy, the India Textile Industry was predominantly unorganized industry. The opening up of Indian economy post 1990s led to a stupendous growth of this industry. India Textile Industry is one of the largest textile industries in the world. Today, Indian economy is largely dependent on textile manufacturing and exports. India earns around 27% of the foreign exchange from exports of textiles. Further, India Textile Industry contributes about 14% of the total industrial production of India. Furthermore, its contribution to the gross domestic product of India is around 3% and the numbers are steadily increasing. India Textile Industry involves around 35 million workers directly.

Strengths of Indian Textile Industry are as follows         Huge textile production capacity Efficient multi-fiber raw material manufacturing capacity Large pool of skilled and cheap work force Entrepreneurial skills Huge export potential Large domestic market Very low import content Flexibility

Weaknesses of Indian Textile Industry are as follows -

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     

Increased global competition in the post 2005 trade regime under WTO Imports of cheap textiles from other Asian neighbors Use of outdated manufacturing technology Poor supply chain management Huge unorganized and decentralized sector High production cost with respect to other Asian competitors

RETAIL SCENERIO IN INDIA: As the corporates – the Piramals, the Tatas, the Rahejas, ITC, S.Kumar’s, RPG Enterprises, and mega retailers- Crosswords, Shopper’s Stop, and Pantaloons race to revolutionize the retailing sector, retail as an industry in India is coming alive. Retail sales in India amounted to about Rs.7400 billion in 2002, expanded at an average annual rate of 7% during 1999-2002. With the upturn in economic growth during 2003, retail sales are also expected to expand at a higher pace of nearly 10%. Across the country, retail sales in real terms are predicted to rise more rapidly than consumer expenditure during 2003-08. The forecast growth in real retail sales during 2003- 2008 is 8.3% per year, compared with 7.1% for consumer expenditure. Modernization of the Indian retail sector will be reflected in rapid growth in sales of supermarkets, departmental stores and hyper marts. Sales from these large-format stores are to expand at growth rates ranging from 24% to 49% per year during 2003-2008, according to a latest report by Euro monitor International, a leading provider of global consumer-market intelligence. A. T. Kearney Inc. places India 6th on a global retail development index. The country has the highest per capita outlets in the world - 5.5 outlets per 1000 population. Around 7% of the population in India is engaged in retailing, as compared to 20% in the USA.

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The Ministry of Textiles under the Government of India has taken some significant steps to arrest these problems. It has framed "The National Textile Policy 2000" to address the aforesaid issues. This policy aims at negating these problems and increasing the foreign exchange earnings to the tune of US$ 50 billion by the year 2010. It includes rational roadmaps for the development and promotion of all the sectors involved directly or indirectly with the textile industry of India. Further, the policy also envisages to bring the unorganized decentralized textile sector (which accounts for 76% of textile production) at par with the organized mill sector. Furthermore, the policy also aims at introducing modern and efficient manufacturing machineries and techniques in the Indian textile sector. The Textile and Garment industry are always required and are one of the most sought industries. We would like to use this opportunity for creating my own Brand and stores where high quality designer Shirts will be sold. Our Survey found that Consumers are looking for Branded Garment with high quality/good design/ at an affordable Price. Thus we come out with my own Brand named “ HERMES”.

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SITUATION ANALYSIS MARKET SUMMARY:  We possess good information about the market and know a great deal about the common attributes of the most prized customer.  This information will be leveraged to better understand who is served, who the customers are, and how we can provide the needs and communicate with them. MARKET DEMOGRAPHICS:  We are targeting the age group of people more than 30 which has more than 50% of our population.  Hence our target group is sufficient for our long term objectives. MARKET NEEDS:  By our Survey we found that the People prefer Branded shirts with good quality at less price and we also found that young people prefer patch work in Branded shirts. Hence we are bringing all their needs in the form of a new retail store called the HERMES . MARKET TRENDS: There will be always a trend for Textile in our Global market, especially for branded Textile products because of change in human life style and hence market always has scope on Textile, hence we can adapt easily in the market for our long term objectives.
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SWOT ANALYSIS: STRENGTH:  Targeted at the young hearted, middle, manager level and the corporate people.  The fabric of clothes is so good that it never shrinks or fades its colour.  The stylish look of the shirts and the special designed collar for the tie wearing people.  The stylish buttons at front pocket and at cuff.  The patch work on the shirts which gives the young generation a designer wear Look/Feel. WEAKNESS:  The people are not aware of the retail store/ brand / quality /design of our brand “HERMES”. OPPORTUNITIES:  Can capture the economic buyers who look for high quality at an affordable price.  Can capture the market share with huge numbers.  Can create awareness in the minds of people about our brand “HERMES”.  In future can come up with trousers and ladies wear. THREATS:  The non branded shirts in the market and the other brands.
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4P’S: PRODUCT:  The fabric/Trim specifications will be given to the designer so that he could make the latest design and make use of the appropriate trims/threads to be used for the shirts.  Our shirts are outsourced as per our Designed TechSheets which is inspected by our quality controllers and then it brought to the stores for the sales. PRICING:  As per the Costing Sheets the Selling price of the shirts is fixed.  The Skimming of pricing on shirts is not done as we are very confident of our quality and making our Customer loyal towards our Brand for a long term .

PLACE:  Opening a boutique shop of our own brand.  Our shirts will be put up in big shopping malls and big retail stores.

PROMOTION:
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 Attractive Visual ads will be hoarded in and around the city to create awareness of the brand and even ads will be published in daily newspapers.  To create awareness about our brand, the shirts will be put up in multifaceted stores like LIFESTYLE, WESTSIDE, MEGAMART etc at a later stages.

BUILDING THE FOUNDATION: ENVIRON MENT: THE ENVIRONMENT CONTEXT OF MARKETING IN INDIA:  The awareness of the brand or the product can be brought only by the marketing people.  The marketing tool used are Advertising, personal selling, PR, Direct Marketing, On-Line promotion and sales promotion. The INDIA’S CONSUMING CLASSES are:     Economic class people Premium class people Corporate people Young hearted people

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RESEARCH  Before starting a Design we do a survey to know on which class of people will be interested in our product.  The research to be conducted by us is put up below with the graphical representation

QUESTIONNAIRE 1, what type of materials you prefer in shirts& trousers? o o o o Lenin Cotton Polynosic Anyother

2, what type of shirt you prefer? o o o o Short Long Body fit Any other

3, what type of collar you need in a shirt o o o o Eton Collar Chinese collar Normal collar Any other
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4, Do you prefer stylish buttons on your shirt? o Yes o No 5, What type of design would you like on your shirt? o o o o Stripes Plain Checks Any other

6, What type of designs you would like to wear? o Printed o Embroidery o Any Other 7, what kind of style you prefer in trousers? o With pleats o Without pleats o Any other 8, Do you want our brand to produce groom wear? o Yes o No
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9, What should be the cost for any office wear shirt? o o o o 750-1000 1000-1500 1500-2000 2000-and above

10, what should be there in a shirt to make it a success? Give your comment

CONSUMER BEHAVIOR  The consumer prefers the branded product with the good quality and exact fit.  We target the corporate and middle income group buyers by the market survey.  After survey we found that buyers are in need of quality branded shirts at less price which gives a new / fresh look, when worn should give the buyer a good feel.
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SEGMENTATION  There are various segmentation in the garments made for the low class, economic class and premium class people.  Our shirts are for the economic class and young hearted buyers.

TARGETED CONSUMERS  Targeted at the economic class people especially at the Sales Executive people, managers and young hearted people.

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PRODUCT STRATEGY

PROCESS OF MANUFACTURING PRODUCTION MANAGEMENT  The fabric and Trim specification and their samples are given to the designer for him to create something new.  The designer designs the shirts, the design are like shirts with embroidery, stripes and patch work.  The stylish buttons at front pocket/Collar/Cuff and threads used by the designer to create a technical sheet once approved by the C.E.O forward the same to Factories and manufacturing starts.

PRODUCTION LIFE CYCLE  The fabric and trims specified in the Technical Sheets will be ordered by the factory and on the confirmation of delivery dates from the supplier the factory will give a production plan and delivery dates.  The above will be followed up by our merchandisers/ designers/ Quality Controllers till the 1st output of 10% of order quantity.  First output will be inspected and all specifications will be brought to match the Approved Technical Sheet.
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 With major/minor comments the Production will be given a Go ahead for Bulk Production.  The Garments will be packed and kept ready on the delivery date for final inspection before the Goods taken out of the factory.  Our Quality Assurance Department will do one final inspection as per AQL 2.5(Accepted Quality Level)  Once goods cleared By our QA department the goods will be displayed in our stores for sales this way we assure ourself of selling only high quality merchandise. BRANDING AND PACKING The brand name of our shirts and our retail store is going to be “HERMES”

our brand logo.

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PRICING STRATEGY  The price determination of the product is done based on the cost, competition, orientation and the demand of the product.  The cost of the production is done in such a way that it can make the production cost as less as possible.  The price of the product (i.e) Shirts is fixed by keeping the price of the competitor’s products.  As the demand increases the production also increases and the price would be the same even the demand increases cause don’t want to loose the loyalty of the consumers by reducing the price.  The price of the shirts is prized 15% above as per the production cost.

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FINANCIAL ANALYSIS INVESTMENTS INITIAL INVESTMENT NELSON (CEO) PROSHUNJEET (CMO) SHOBAN (CFO) : Rs. 12,80,000/-

Total

:

Rs. 12,80,000 /-

FIXED EXPENSES/MONTH Advance Rent Manager Staff Salaries Electricity Telephone Postage/Stationery Transportation Adverstiment 3 x 4500 : : : : : : : : : Rs. 7,00,000/Rs. 82,000/Rs. 15,000/Rs. 13,500/Rs. 25,000 /Rs. Rs. Rs. 3,000/500/8,000/-

Rs. 35000/18

Maintenance Security Raw materials Designer Salary Tailor TOTAL EXPENSE

: : : : :

Rs. Rs.

2,000/3,000/-

Rs. 1,25,000/Rs. 25,000/Rs. 13,000/: Rs.10,50,000/-

PLANT EXPENSE

Safe Air-conditioning Office furniture Computer Sampling tools Generator

: : : : : :

Rs. 50,000/Rs. 50,000/Rs. 23,000/Rs. 62,000/Rs. 5,000/Rs. 40,000/-

TOTAL EXPENSE

:

Rs.

2,30,000/-

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BREAK EVEN POINT
MONTH SPECIALIZATION OF SALES PARTY WEAR/(875)/QUT. CASUAL WEAR/(950)/QUT.
20 22 32 43 57 64 74 85 92

COOPERATE WEAR/(1075)/QUT.
24 27 38 47 62 69 80 97 102

TOTAL (RS)
64925 68300 94875 122000 157550 179600 210550 246275 1411125

FIRST SECOND THIRD FOURTH FIFTH SIXTH SEVENTH EIGHTH NINTH

23 21 27 35 42 51 62 70 80

 At the ninth month the showroom will take the investment invested and come up with profits. The ninth month sales exceed the investment which will lead to profits so at this point we get the break even point. The point at which the showroom is in no loss and no profit.
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PROMOTIONAL STRATEGY POSITIONING OFFERS:  The offers are given during the festival seasons NEW YEAR.  The price and the offer price are same in all our Product Selling Areas.  The tag used during the sales are been put up below:

“SHOP MORE LESS TIME” SALES PROMOTION  Tools for the promotion used are the visual communication on the Television channels.  On-Line promotion of the product is done by posing the products design on home pages like Yahoo, and many other popular home pages.  The ads will be published in magazine like Bollywood star, India Today and many other magazines.


“The Hindu” and pamphlets will be distributed in major Malls and Shopping spots in the city.
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PLACEMENT STRATEGIES:  Our shirts will be placed in our showroom first since we are new to the market we can do the placement strategy according to that.  Managing Marketing Channels used are the direct marketing of our brand product (i.e) shirts.  Our shirts will be put up in reputed showrooms like LIFESTYLE, in big shopping complex like SPENCERS, and our product will be kept at the first rack in all the showrooms so that it attracts the customers as they enter into the showroom.  We use only the retailing not the wholesaling techniques for selling our brand product.

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DISTRIBUTION CHANNELS:  Two-level Distribution Channel will be used:

 From the production unit the shirt goes to the quality assurance people from there it comes to the showroom for the sales then from the showroom the shirts are sold to the consumers.

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BIBLOGRAPHY:

texmin.nic.in (Textile ministry of India) www.google.com www.bharattextile.com textilecommittee.nic.in www.searchindia.com NEWSPAPERS & MAGAZINES

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Description: College final year project on indian textile industry and plan to start a new textile business