Professional Documents
Culture Documents
MARKET OVERVIEW
Indian Retail Market:
The Indian retail market stood at USD 396 billion in 2011-12 and is likely to grow further at 12% to
increase to USD 574 billion by 2015
The market is highly fragmented where around Eighty-five to Ninety per cent of national production
comes from regionally small size firms falls into the unorganized sector and remaining comes from
the organized sector comprising of leading manufacturer, importers and dealer/distributors.
The furniture sector of India makes a contribution of 0.5 per cent of the total GDP.
According to the World Bank survey, 20 percent of the furniture industry grows per year and this growth is
expected to come from the rapidly growing consumer markets of Asia, which signifies that there will bew
growth in Indian furniture sector.
Economic Factors
1.GDP Growth
GDP growth is projected to improve to 6.2 percent in 2014 and then to rise to 6.6 percent in
2015 and 7.1 percent in 2016
Source:http://www.worldbank.org/en/publication/global-economic-prospects/data?
region=SAS
2.Currency Fluctuation:
In the past six months, the dollar/INR exchange rate has fluctuated by approx. 8 per cent. This
may put considerable currency risk on any foreign investment in India.
3. Low 4 wheeler penetration
Social Factors
CONTD
Furniture and Furnishings Category faces stiff competition from small time
traditional retailers as well as individual carpenters
For furniture retail, options for investment in back-end infrastructure lies in
creation of manufacturing facilities/warehouses
Some of the furniture products could be sourced from the SME segment
FDI in furniture retail is not expected to face major political deliberations
Specialty retail outlet is best suited structure for this segment
SWOT ANALYSIS
Strengths
Oppurtunity
100% FDI
Steady GDP growth forecast
Growth of organized retail
Rise in Income level
Increase spending by middle income
group
Young Population and high home
ownership
Weaknesses
Stiff competition from unorganized
retailers
30% local sourcing could affect IKEA
quality standards.
Maintaining price leadership due to high
dollar rate etc
Threats
Occasion
Marriage
Child Birth/When they grow up
Once in 10
years or so
Change
Frequently
SEGMENTATION
Segmentation of Consumer household
Professional Affluents
Traditional Affluent
Urban Aspirers
Rural Apirers
Strugglers
2% 4% 8%
50%
6%
6%
24%
Consumtion Expenditure
120
100
17
80 10
60 20
5
40 25
20 7
15
0
20
10
19
4
25
6
17
31
35
37
6
18
5
21
7
12
35
42
4
16
5
19
9
12
7
19
5
18
5
10
5
17
4
19
7
12
5
17
5
14
5
13
Food
Appparel
Health
Transportation and
Education Leisure
communication
others
Professional Affluent
Urban Aspirer
Traditional
Affluent
Age Group
27 yr - 40 yrs
27 yr - 40 yrs
27 yr - 40 yrs
Houselhold Income
15Lacs+
5Lacs -14Lacs
15Lacs+
Profile Highlight
Positioning
Secondary Target
Invests in gold,
Dreams of owning a
Avoids taking loan,
house, Does online
family own
banking, use durables of
numerous
large brands
consumer durables
TRENDY,
STYLISH AND CONTEMPORARY
YOUNG AND EXPERIMENTAL
INITIAL POSITION COULD BE FOCUSED ON AFFORDABLE PRICE BUT ONLY
FOR A SHORT NOTICE PERIOD
DISTRIBUTION STRATEGY
IKEA
COCO Store
Company Owned
Company Operated
Store
Direct to Retail
Located in Malls or
Stand Alone stores
Distributor/
Franchisee
COFO Store
Company Owned
Franchisee Operated
Store
Franchisee shares
the operating
expenditure of the
store
Located in Malls or
Stand Alone stores
SIS modular
Set up
PROMOTIONAL PLAN
Objective:
The main objective of the communication plan will be to create news
about the launch of the brand and to create awareness about its presence
in India
Announce the launch of the brand
Highlight and create awareness of IKEAs collection
Long term relationship with our stake holders, distributors/franchisee and
consumers
Launch city Delhi
Attributes
Indulges
in style
and luxury
Affinity
towards
brands
Trend
spotter/
follower
Pre Store
Sales Staff
In store
MARKETING PLAN
.must communicate at each stage of the brand funnel
Stages of
Brand
Funnel
Awareness
Consideration
Preference
Purchase
Consumer Mindset
Communication Task
Touch Points
To demonstrate quality,
craftsmanship, care for details
To provide customized
coordinated living room as a
brand experience
Advertorials in key
publications, Participation in
consumer and trade fairs
What is IKEA?
Is it worth spending?
LAUNCH PLAN
X-5
X+30 and on
Ticket jackets for
PVR and DT
Cinemas-Comin
g Soon
Digital/online
coming soon
teasers
FB page contest
and freebies
Features/articles
in the media
Loyalty program
Privilege to be
the first to know
about the
happenings at
your favourite
living room
brand
After Sales
Service
DM
DM to TG database
COMPETITION
PRICING STRATEGY
Objective:
To achieve 10% of Organized furniture market share by 2015E. Aprox
2240 Cr
Penetration Strategy:
Cost leadership
Profit based on volume sales not on value sales Profit
maximization in the long term.
To offer the price sensitive TG the lowest price in the category as
compared to Hometown, Style Spa, Godrej Interio.