Branded Apparel penetration beyond metros analyzing consumer preferences & devising Marketing strategy

Abstract

With increasing income levels and an emerging attitude of "look good - feel good", fashion is offering huge potential to penetrate deeper into the untouched Indian markets. Some of the growing trends in the Indian apparel industry are: Focus on styling, quality and comfort; growth of women’s wear segment; organized retail boom and emergence of private labels. It is widely observed that the non-metro customers like those from tier-II & III cities of India are rapidly graduating from footpath outlets to branded apparel stores. Penetration of organized retail chains such as Big Bazaar, Pantaloons and Shopper’s Stop has contributed to the growth of fashion apparels in these markets. In order to penetrate to non-metro markets, the most favourable and profitable segment is the young generation within an age group of 17 to 30 years because they have high disposable income, guilt free spending and willing to spend money for looking good and maintain a good image in society. Even industry experts are of the view that these markets have enough demand to provide a lucrative business for the branded apparel retailers. Focus group discussion and consumer survey reveals that Style and status symbol, good fabric quality and value for money are the three broad features that people expect from the clothes they buy. These factors were obtained as macro-level factors out of a total 12 factors using factor analysis and it reflects the rational and economic decision making aspect of consumer behaviour. Another important finding in related to this aspect is that the most likely premium customers are willing to pay for branded apparel over non-branded is 10-25%. Below this range, quality perception is low and above this range majority of the customers feel overcharged. A part of the research dealt with understanding the acculturation process in non-metros, especially in youth. Youth who generally lead a lavish style, smoke cigarettes, drink socially and stay in touch with latest fashion are most likely to opt for branded apparel. This was arrived at from discriminant analysis. The other psychographic statements which had high correlation with branded apparel preference were, ‘I attend rock shows without fail’ and ‘I dream of owning a Mecedes Benz in 10 years’, and ‘My whiskey should be better than Royal Challenge’. It © IIM Bangalore Page 7 was found that friends are the greatest sources of influence for the target group in apparel purchase decisions. Communication sensitivity in non-metro youth was the third broad focus of analysis. Friends and family play a major part in awareness of brands and latest fashion. Billboard advertisements which are typically used by apparel retailers were found to have the least impact. In terms of brand awareness, the non-metro youth score high due to their exposure to fashion magazines and TV shows. However, it was found that the target group hardly differentiates the brands in a particular category of apparel. Multidimensional scaling revealed that, though the brand image of a shirt brand is different from a jeans brand, there is hardly any differentiation in brand image in-between jeans brands such as Levi’s and Wrangler. An additional insight was obtained from the analysis of preference towards promotion schemes. The traditional price discount model was found to have more significance than other modern schemes such as time discounts or ‘Buy X, get Y free’. Our research reveals that ability to price at key price points, ability to differentiate offerings and ability to build networks of customers are the key success factors in this segment. Major price points which the brands should cover are: Rs. 1500 for Jeans and trousers, Rs. 500 for formal shirts, Rs. 700 for t-shirt and Rs. 1000 for Salwars. The points of differentiation suggested were, (1) Alternate methods of brand engagement & (2) Local relevance of the brand. Building customer networks is cost effective using social networking sites such as Twitter and Facebook and how effectively brand managers leverage the features of these platforms is going to be crucial for building brand engagement in the target group. Analysis of marketers and brands expose significant opportunities for different players to exponentially grow their markets in non-metros. These strategies would provide sustainable competitive advantage to the marketers/brands and are feasible to implement. Among others, the strategies include line extension for Levi’s, founding a novel student segment for Peter England, geographic expansion for Provogue and a shift to internet based distribution strategy for Wills Lifestyle. The branded apparel scenario in non-metros would be dynamic in the true sense and would continue to pose significant opportunities and challenges for marketers and brands.