- a case study

How to leverage hand made products for business venture

Product planning, Strategy and Management

Presented by B.Karthika 116130002 M.Des (Product design) 2011-2013

fabindia - philosophy.....
Fabindia was founded with the strong belief that there was a need for a vehicle for marketing the vast and diverse craft traditions of India and thereby help fulfill the need to provide and sustain employment.They blend indigenous craft techniques with contemporary designs to bring aesthetic and affordable products to todays consumers. Their endeavor is to provide customers with hand crafted products which help support and encourage good craftsmanship. Their products are sourced from all over India. Fabindia works closely with artisans by providing various inputs including design, quality control, access to raw materials and production coordination. The vision continues to be to maximize the hand made element in our products, whether it is handwoven textiles, hand block printing, hand embroidery or handcrafting home products.

34 countries 141 stores 511 Indian destinations 1000 crore turnover

fabindia - the company.....

Fabindia is Indias largest private platform for products that are made from traditional techniques, skills and hand-based processes. Fabindia links over 80,000 craft based rural producers to modern urban markets, thereby creating a base for skilled, sustainable rural employment, and preserving Indias traditional handicrafts in the process.

fabindia through the ages......

1960 - Incorporation in Delhi 1976 - First retail store in GK 1977 - Contemporarizesdesign 1981 - Introduction of garments 1990 - Fiscal deficit reaches 8.5% 1991 - Indian economy opens up 1992 - Liaison with Habitat ends 1994 - Second store opens in Delhi 1999 - William Bissell becomes MD 2003 - Vision Plan I originates 2004 - Goes online 2005 - Vision Plan II is born 2006 - Garments make 70% revenue 2006 - 8% economic growth 2006 - Govt allows foreign single brandoutlets 2012 - Still growing and targets to reach 250 stores and 1000 crore turnover.

fabindia under john bissell.....

Primary motives
- Develop market for hand-woven products. - Provide rural employment apart from making profits. Incorporated in 1960 in Delhi to export upholstery fabric. By 1965, revenues of Rs. 2 million due to: - AS Khera, supplier of hand-woven rugs etc from Panipat - Habitat, major UK buyer of FabindiaPanipatproducts 1974 saw Fabindiasfirst retail store in Greater Kailash with ad-hoc merchandising. Habitat was acquired in 1992 and Fabindiacould no longer continueselling to it John Bissell dies in 1998, passing the baton to son William Bissellwho becomes MD in 1999

fabindia under william bisell.....

Dont get me wrong; I am not a bleeding-heart Liberal, rather a Libertarian. I dont believe in charity or giving things out for free. I believe that the only way to alleviate rural poverty is to generate sustainable employment, and the only way to do that is if we run our business in a profitable manner.Yes, It seems contradictory that we pursue both a social goal AND profit but I believe that is the only way to do it. - William Bissell

fabindia under william bissell.....

End of license raj, and liberalization gave textiles duty concessions on machine imports. Williams vision included expansion, depending less on exports and setting up retail operations India saw robust economic growth, change in consumer patterns and growth of middle class by 2006 2003 saw the birth of Vision Plan I - Planned to grow to revenues of Rs. 1 b from Rs. 360 m in 4 years Achieved it in two years and Vision Plan II came along - It planned to achieve revenues of Rs. 2 b by March 2009. Now, It targets to reach 250 stores and 1000 crore turnover by 2012

expanding the project range....

Started with 60 products when introduced in 2004.Today it has 200 different products which generate a monthly evenue of more than 5 million. It also promotes the brand as health and environment conscious which gives a direct message to the customers about the companys principles. One of the first retailers in India to offer complete home solution which offered a one stop solution for their home needs. Fabindia furniture became a success due to their uniqueness, simplicity, functional and eco friendly nature.This sector claimed 60% of their annual profits.

organic products

Furniture & Home furnishings

Launched a full fledged range of garments catering to various users including Men,Women and kids of all age groups.The contemporary designs blended with uniqueness gave a massive appeal for a major crowd.

garments & fabrics

supply chain management....

design intervention.....

Practice of inviting designers Weavers and craftsmen also involved in the design process and made to interact with designers We are promoting an alternate vision for the future; It is collaborative (with the suppliers) in the true sense of a word. It is participatory (with the customers that share our views). Getting customer opinions and views Sticking to their green principles Importance on product innovation and diversification. Suggested prototype developement project

enriching the shopping experience......

Premium stores house all the merchandise but mostly high end and exquisite.

premium stores

regular stores

Regular stores are for the fast moving merchandise and a wide variety and options are available in such stores.

concept stores

Concept stores have very few merchandise but they predominantly function for the testing of certain products in the market, hence very few options.

advertising - is it necessary?

The products have an intrinsic value proposition as opposed to imposed value. It is due to this intrinsic value of our products we never felt the need to advertise. While we will announce the opening of a new store in the local newspaper, we never spend on ads per sec. - William bissell

competitor - organized retail

Shoppers stop, Pantaloons, Globus etc Strengths 1.Strong Pan-India presence andawareness 2.Man-power expertise 3.Competitive Pricing 4.Robust supply chains and shortproduct development life cycles 5.High marketing communicationsspend 6.Quality consciousness andadherence to standards Weaknesses 1.Product diversity lacking 2.Stock as per running trends andserve to fads-inconsistencytowards churning out qualityofferings in hand crafts 3.Authenticity of handcrafts-No craftsmark present to validate thecrafts as against the Fabindiaofferings which have the sameimprinted on them

competitor - govt. initiatives

Cottage Industries Emporium, KhadiGram Udyog, State Government Department Strengths 1.Source of finances is fixed and subsidies boost these initiatives over time 2.Tie-ups with foreigngovernments facilitatingpermanent trade of nationalhandicrafts. Weaknesses 1.Ambience-non-attractive tomodern day shoppers are fed on the excellent ambiences of theretail formats. 2.Standardization defeatscustomization hands-down.

competitor - designer boutiques

Ritu Kumars, Ritu Beris, Rohit Bal, ManishMalhotra, Sabyasachi Mukherjee, etc Strengths 1.Product customization facilities-extremely high 2.Highest level of customer intimacy Relationship marketing Weaknesses 1.Exorbitant prices-notmeant for masses 2.Not a robust supply chain-not meant to be a pan-India operation

competitor - unorganized sector

Mom and pop stores and local tailoring units. Strengths 1.Effective in addressinghigh geographicaldispersion 2.Customization facilityavailable Weaknesses 1.Source of finance-not secure 2.Next-to-nil brand equity 3.Customer loyalty-low 4.Scarcity of skilled manpower- lack of ability to employ the same which is critical for expansion

competitor - NGOs & SHGs

Strengths 1.Strong commitment towardslocal communities 2.Helps in making its clientsself-reliant 3.Encourages womenentrepreneurs and hence awomen can supplement themales income towards a family Weaknesses 1.Lack of expertise on partof the manpower 2.Lack of ambition tospread out on a pan-Indiaor even a regional basis 3.Lack scales of economy

Strengths of fabindia.....
Quintessential Indianness in fabric through the years - Popular for authenticity of hand-woven fabric Sourcing system from rural India - Strong supplier relationship - Provision of capital loans(in agreement with banks) - Leniency on order fulfilment & no-return policy - 100% use of suppliers capacity Sustainable employment opportunities to rural skilled poor Employees are given autonomy and hence inducing accountability Focus on customer retention instead of generation - Large chunk of buyers are repeat purchasers - Product quality improvement done keeping this in mind Word-of-mouth strong enough not to require any advertising

Weaknesses of fabindia.....
Delays in delivery from artisans - Opportunity losses due to irregularity - Difficult to predict quantity and time of thaan coming from weaver - also arises as different stores are encouraged to order different stock Insignificant spend on marketing communications - Losing out on attracting new customers instead of depending only on repeat purchase -Not enough personnel to push Fabindiato greater growth Unavailability of people experienced in retail sector - Unavailability of people believing in the same mission - More formal processes would face resistance from existing employees Untimely delivery of products - Transport, storage and shelf-life issues of organic foods - Suppliers were spread pan-India

Threats....
Unorganized local operators - Handloom retail shops/chains in regional pockets - Souvenir shops providing indigenous products at lower prices Entry of organized brands and companies into retail - High expected growth & entry of business houses in large ways - Competitors access funds from conglomerate partners or markets Tilt of Indian consumers towards foreign brands - Foreign brands alter lifestyle choices of the target market - Imported or designer home furnishings have greater flaunt value vis-a-visFabindia Development of government co-operatives - Boost in future to KVIC and state handloom units - Improvement in their ambience and shopping experience Rising prices of real estate could hamper growth - Opening new stand-alone stores will be tough -Experimenting with formats and markets may not be advisable

Opportunities.....
Latent potential of organic foods market: - Leveraging changing consumer tastes & perceptions - Awareness generation of merit in these foods Utilize multi-brand retail outlets and construction groups - Display of Fabindiaproducts in MBOs and department stores - Leverages footfalls of the store, increasing likelihood of sales - Use of Fabindiahome furnishings in modular flats of buildings - If consumer buys this flat or any other, and is impressed, will use Fabindiafurnishings Leveraging Web 2.0 tools and techniques - Tying up with matrimonial sites for designer fancy wedding wear - Interactive website for designing as per individual requirements - Customization level is high - Lead time between fixing of occasion date and event can be used fordelivery

The solution does not always lie in advertising or the communication. Innovation can be at any level, you need an eye to identify what that innovation would be and how easily it can be encashed upon in the most interesting yet engaging manner.

Thank you for your time! :)