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ASIAN JOURNAL OF MANAGEMENT CASES, 7(1), 2010: 89102 SAGE PUBLICATIONS LOS ANGELES/LONDON/NEW DELHI/SINGAPORE/WASHINGTON DC DOI: 10.1177/097282011000700107
On a sultry June morning of 2003, Maria Belal sat in her Lahore ofce, evaluating options to respond to growing competition, especially from the informal sector comprising tailors and karigars.1 Added to this, were the concerns raised by a recent research study conducted by students of a local business school, sponsored by Maria B. Designs (Pvt.) Ltd. Her most urgent concern related to the diluting brand image of Maria B. The other issues of concern were:
1
This case study was prepared by Professor Jawaid Abdul Ghani at Lahore University of Management Sciences, to serve as a basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. The author would like to thank Mehmood Ahmed, Atia Mujib and Shariq Mustafa for their assistance.
The product line currently offered by Maria B. was confusing for the consumers; what should Maria B. do to remove this confusion? Some consumers thought that Maria B. was too expensive; should Maria B. bring about any changes in its pricing policy or should it try to maintain its premium image by modifying the perception of these consumers? Bridal wear, the agship product of Maria B., was being offered at the same outlet along with other product lines; what should the company do to avoid any spillover effect of casual and formal lines on bridal wear?
sector generally imitated designs introduced in the formal sector and sold them at lower prices. This sector thus catered to the price-sensitive customer who was willing to sacrice brand image, design, quality and uniqueness. The formal sector consisted of boutiques and professional designers who catered to a small but growing market for designer fashion apparel. It catered to the needs of the upper and upper-middle income classes of society. The designer outlets introduced innovative designs and were able to charge huge premiums because of the strong brand names associated with their products. Customers felt proud to associate themselves with these expensive and stylish brand names. The outlets were engaged in designing, tailoring and marketing chic female apparel which were heavily embroidered with traditional embellishments. These outts were worn by women on special occasions, mostly weddings. Apart from their unique design philosophy, fashion designers also brought modern marketing techniques into the fashion industry in Pakistan. This was because the outlets that these designers operated from were running as properly organized smallto-medium-scale businesses. Techniques such as fashion shows, coverage in fashion magazines and promotional tools like sales and special discounts were often employed by them. Prominent names in the formal sector included Maria B., Nilofer Shahid of Meeras, Taufeeq, Sana & Sanaz, and Niki & Nina. All these players were mainly known for their bridal apparel lines. In the formal apparel line, Maria B. competed with Muddhouse and Hassan Shehryar, while Generation and Nees Punhal were known mainly for their casual apparel line. A typical price range of the major product lines in each sector are presented in Table 1.
Table 1 Price Ranges for Fashion Apparel (in Rs) Formal Sector Casual Formal Bridal Source: Case writers notes. 1,2002,500 5,00025,000 60,000 and above Informal Sector 5001,500 2,0008,000 30,00060,000
COMPANY BACKGROUND
Maria B. was one of the most prominent players in designing fashion apparel for women in Pakistan. According to her, (Fashion is) Art that is harnessed by creativity, which
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elevates the woman, envelops herconveys her every mood, her every whim to the rest of the world. Maria B. was responsible for creating a successful and professional fashion house in the country with dreams of making it the rst international brand name originating from Pakistan. Her global vision was: To make a company that could compete internationally with other global brands in terms of designing, production, and marketing capabilities and to make Maria B. a prestigious and synonymous brand in the world of fashion. With this global vision, Maria B. Designs was founded in 1999 in Lahore. Initially, it was a small-scale operation in rented premises. However, the company grew fast and managed to establish a full-edged vertically integrated facility in Lahore doing everything except cloth production under one roof. Three more retail outlets were opened in different cities of Pakistan within four years of its inception. Maria B.s domestic operations covered four outlets in exclusive locations, one each in Lahore and Islamabad, and two in Karachi; they provided apparel to a diverse group of people in terms of tastes and lifestyles. Maria B. did not have a retail outlet abroad, yet it had a very loyal customer base outside Pakistan as well. The company reached its international customers primarily through fashion shows held abroad. With a customer base of around 10,000, both local and international, Maria B. kept pace with changing styles and trends locally as well as internationally. In the scal year 200203, the combined revenue from its domestic and international operations came to approximately Rs 30.6 million (30 million from local operations and 0.6 million from international sales). This represented an increase of 9 per cent over the previous scal year, and a twenty-fold increase since 1999, when sales were only around Rs 1.3 million. In 2003, the casual line generated sales of roughly Rs 6 million, formal wear generated Rs 12.2 million and bridal wear had sales of Rs 12.4 million, thereby contributing 20 per cent, 40 per cent and 40 per cent, respectively, to the total revenue. Maria B. faced erce competition in its casual and bridal lines but managed to maintain its image and reputation as a visionary designer in the minds of all related, directly or indirectly, to the eld of fashion designing. The fashion house created demand for its line of clothing by advertising in the print media, spending approximately Rs 0.7 million; opening up new outlets; and arranging fashion shows locally and overseas. In order to achieve the goal of making Maria B. an international brand, the company planned to expand internationally in the years to come. Maria B.s customer base belonged to the upper strata of society. This included working women, teenagers, students, housewives and brides who were modern, informed,
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condent and stylish and could wear a modern, trendy dress with as much ease and comfort as a traditional one, depending on the occasion.
PRODUCT LINE
In all, there were ve product lines offered by Maria B. These werecasual, semiformal, formal, semi-bridal and bridal. Semi-formals and semi-bridal wear were merely a variation of the formals and bridal wear, respectively. Hence, for the purpose of simplicity only three basic product lines are discussed. The production process for casuals started with an analysis of market trends (see Exhibit 1). The designing was followed by fabric purchase. A reliable and trustworthy supplier base provided Maria B. with the required type of fabric on a timely basis, making the availability of nished apparel in the market possible. Maria B. had her own dyeing facility to experiment with different colours and to ensure the quality of dyeing in terms of colour fastness. She strove to develop something that would be liked by everyone, and she did this with her basic cuts, crazy screen prints and accurate stitching. The companys distribution network replenished stock every two to three days, making it available at all outlets in Pakistan throughout the year. Maria B. outlets were designed to be appealing enough to attract customers with their stylish dcor and layout. Finally, Maria B. decided to use print advertising and fashion shows. The production process for formals and bridal wear was the same as that for casuals, except that the designs were more customized and the screen printing and embroidery stages were performed at the adda. The adda was an in-house unit with highly skilled craftsmen. Maria B.s formals were famous for their handwork and her bridal wear were known for their designs, handwork and nishing. Casuals were generally kept in stock, while formals and bridal wear were custom made (made-to-order).
RESEARCH STUDY
The initial phase of the research study conducted for Maria B. consisted of about a dozen in-depth interviews and four focus groups. The objective of the study was to generate insights and hypotheses regarding apparel purchase for each product category. A key decision was whether separate focus groups should discuss each of the three product lines, or whether all three lines should be discussed in the same focus group. The former option was selected since it would give individual attention to
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each product line. As a result, two of the focus groups were on bridal wear, and there was one each on casual and formal wear. The participants in these focus groups were typically about ve women. Another issue was that of the target market. Would it be appropriate to have relatively older women discussing casuals and teenagers discussing bridal wear, or would it be advisable to reverse the order? It was believed that the demographics for the respondents of the three product lines were different, and the participant prole for each focus group was selected after considerable debate. Proles of selected participants in the in-depth interviews and focus groups are provided in Exhibit 2. The casual line of clothing was discussed primarily with teenagers and women in their early twenties (1824 years). These consisted mainly of students from institutions such as the Lahore University of Management Sciences (LUMS), National College of Arts (NCA) and Kinnaird College. The household income of these women ranged from Rs 30,000 to Rs 50,000 per month. While casuals were worn by everyone, younger women were chosen as the research study participants because they were often more fashion conscious, and more aware of the fact that designers were increasingly offering casuals as part of their product lines. The participants identied were those who seemed to be more fashion conscious and believed in wearing trendy clothes. For formals, the participants included a wide range in terms of age (20 years and above), and consisted of working women, newlyweds and mothers. They resided in exclusive areas of Lahore such as Defence, Model Town and Gulberg. Their monthly household income was Rs 70,000 and above. They were generally women who had an eye for intricate embroidery and an appreciation for unconventional couture. They believed in spending on designer clothes, bags, jewellery, shoes and sunglasses, and closely followed the latest fashion trends. For bridal wear, recently married women formed the ideal group because of their personal knowledge about the various issues involved in the selection and purchase of bridal wear. However, it was clear that, younger women, even if unmarried, had at some time in their lives gone through the experience of a bridal selection or purchase because of the marriage of a sister or other relative. Participants thus included a cross-section of newly married women, brides-to-be and their mothers. Some focus groups were conducted at LUMS, the participants mainly being BSc students. One focus group was conducted at Kinnaird College and another was made up entirely of NCA students. This focus group took place at a residence in Defence. Two group members conducted their focus groups at their homes after inviting various women to attend the discussion.
FINDINGS
Selected comments made by participants during the various focus groups are presented in Exhibits 3, 4, 5, 6, 7 and 8. An analysis based on the ndings of the in-depth interviews and focus groups is given below.
Casual Wear
Casual wear, which also included casual fashion apparel, was found to be an impulse purchase. The factor which triggered purchase of casual apparel was the start of a new season when clothes for the new season were purchased usually in bulk (that is, more than two dresses at one time). The depletion factor was also strong whereby new casual apparel was bought because the old collection had worn out or had become outdated. It was also found that the birth of a new fashion trend or style prompted purchase of casual fashion apparel. Information gathering in the case of casual apparel was minimal and consumers made a relatively independent decision which was free from any external inuence. It was also revealed that the selection of a store for the purchase of casual fashion apparel was inuenced by three factors: rst, the fashion update offered by a store; second, the price discounts offered; and nally, the designs offered.
Formal Wear
Formal wear, which also included formal fashion apparel, was normally bought for special occasions (dinner parties) and festivals (Eid, weddings, etc.). This implied that the purchase of formal apparel was a serious shopping exercise and not an impulse purchase like that of casual apparel. The research suggested that for formal fashion apparel, women usually referred to fashion magazines to get an update on the latest trends. The explanation for this behaviour was that since women bought formal apparel for special occasions, they were always ready to go the extra mile in nding out the latest trends in fashion so that they had an up-to-date appearance. It was also found that women generally window-shopped a lot at various boutiques before buying formal apparel and were also willing to spend money if they believed that the clothes were truly worth the money. As a result, the information gathering in the case of formal apparel was intensive and consumers made the nal decision after conducting a thorough pre-purchase research. It was also discovered that the selection
of a store for the purpose of purchasing formal fashion apparel was inuenced by three factorsrst, the designs offered; second, the fashion update offered by a store; and nally, the quality of fabric.
Bridal Wear
In the case of a bridal dress, consumers tried to gather the maximum possible information about the product and the place from where to buy it. This was because they believed that the purchase of a bridal dress was a one-time expense. This information gathering entailed market research (visiting both the informal and the formal sectors) and consulting friends and relatives who had gone through a similar experience. It was also found that the price elasticity of the bridal apparel purchased from fashion designers was relatively low, since the consumers always looked for quality and design in a bridal jora (dress) and thus, price did not play a major role in determining their choice of the designer apparel. The research also revealed the my own syndrome amidst bridal customers, as every bride-to-be wanted her wedding dress to be exclusive, a unique design that was created for her and her alone. It was, therefore, the search for this magnicent outt that made the prospective bride seek the help of a designer who, as a professional, was more knowledgeable about the intricate details concerning the bridal dress, for example, what colour would suit the bride-to-be and what material would look most appropriate on her. It was because of this belief in the designers expertise that the bride wanted the designer to give her advice regarding the selection of material, fabric and design. Furthermore, since the bride-to-be would be paying a substantial amount of money for the dress, she considered it her right to be given personal attention.
FUTURE DIRECTIONS
Armed with these ndings, Maria B. sat in her ofce wondering whether further research was required. She was thinking about how she could utilize the information effectively to develop a coherent marketing plan. She was particularly concerned about her agship product, bridal wear. Even though Maria B. had a separate oor especially designated for the bridal collection, the personal attention and customization required by consumers was lacking. Offering all product lines under one roof also had its drawbacks. The image of one product could spill over to other products, for example the quality image of casual wear, a cheaper product that could afford less stringent quality standards, might be associated with the quality image of the bridal wear which were
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offered under the same roof and with the same brand name. Identication of the target segment and ways of improving the perception of Maria B. bridal wear were immediate challenges confronting the designer.
Exhibit 1 Production Process for Casual Wear
Seasons refer to the two main seasons each year, summer and winter. Numbers in parentheses provide data on respondent demographics, particularly age.