INSTITUTE OF MANAGEMENT

NIRMA UNIVERSITY

MBA (FT) 2016-18

Proposal for

RETAIL STRATEGIES OF BRAND FACTORY AND NIKE

Submitted in partial fulfilment of

Retail Marketing Course

Submitted to: Submitted by:

Prof. Sapna Parashar Bhaumik Carpenter (161416)

Apparel Industry Overview
Indians have a history of being known for fine craftsmanship across the world. The size of the
textile and apparel industry is estimated to be US $67 Billion in 2014 and is expected to grow to
US$141 Billion by 2021. (IBEF, 2017) In terms of exports, India is the second largest exporter
of textiles and readymade garments in the world. The industry is a significant contributor to the
economy by contributing 10 percent to production, 2 percent to GDP and 15 percent to countrys
total export earnings. The apparel and garment sector provides employment to 12.3 Million
people as of 2016-17 and produces 3.6Million Tons (MT) of apparel and garments. (IBEF, 2017)

Readymade garments exports from India stood at US$17.357 Billion in FY2016-17 and is
expected to touch US $82 Billion by 2021. Indias share in global trade of textiles and apparels is
5 percent. The reason for this growth can be attributed to the increased penetration of organized
retail, favorable demographics, rising income levels and increasing awareness about brands
among customers. (Gugnani, 2015)The major players in organized apparel retail in India are:

1. Future Group Brand Factory, Central

2. Reliance Group Reliance Trends
3. Aditya Birla Group Pantaloons, Abof, Trendin.com
4. Tata Group West Side, LandMark, Star Bazaar
5. Raheja Group- Shoppers Stop

The CAGR for the apparel industry is expected to be 12% over the next five years. According to
AT Kearney India, apparel industry constitutes 57.2% in fashion and lifestyle market with men
apparel currently dominating the space. (Mukherjee, 2016) Women apparel segment is expected
to grow faster than men segment in apparel and acquire 37% share equal to mens segment in
recent future.

Retail Strategies of Brand Factory and Nike Store

Retail Strategies refer to the retail mix used by the retailers for retail value proposition. For brick
and mortar stores, the prevalent formats are malls, specialty stores, departmental stores, discount
stores, factory outlets, super markets, hyper markets, convenience stores and category killers in
multi brand stores. All of these formats carry a different mix and give different value proposition
to the customer. Brand Factory is the largest multi brand discount apparel store owned by Future
Group in India having over 50 stores in 22 cities. Brand factory is a category killer due to the
discounts and the multi brand products in men, women and kids apparel. Nike stores are factory
outlets used for retailing single brand products in various product categories. A comparison of
retail strategies of these stores will capture a picture of multi brand outlets and factory outlets in
Indian apparel retail industry.

Literature Review
The retail sector is booming in India given the suitable demographics and the ease in regulations
which calls for superior management capabilities in retail firms. The coexistence of both
traditional and modern players has increased competition in the apparel retail scenario. The
segmentation of shoppers should be done on the basis of age groups, income and attitude towards
brand loyalty for organized retail. The factors which Indian shoppers prefer the most are better
service, merchandise and location over others in the retail mix. (Basu, Guin, & Sengupta, 2014)

The customers easily switch between single brand and multi brand stores based on the situation
and the task of shopping. For example, Nike outlets are likely to be more visited by men and
brand factory when the same audience is accompanied by a female. Indian shoppers have more
brand parity than fashion involvement indicating a preference towards unorganized formats.
Higher brand purchase intent and urge to buy popular brands led to greater likelihood of
choosing organized stores over unbranded stores. (Basu, Guin, & Sengupta, 2014) For
activewear specialty stores like Nike Outlets, the first requirement to satisfy customers was to
provide an attractive and pleasant shopping atmosphere. This would lead to positive word of
mouth marketing which will increase customer footfall. (Hyo Jung Chang, 2015) Specialty stores
especially factory outlets focus on customer experience rather than discounts as in discount
stores. The environment of the store should be more fun and exciting and can also include
product trails like trying new sports accessories and equipment. Most of the customers state that
they want to buy attractive clothes or it is convenient for them while visiting an MBO. On-Going
sales is the third highest rated reason given by customers. (Basu, Guin, & Sengupta, 2014)

Scope and Limitations

The scope of the study is to study multiple parameters of the retail mix for a single multi brand
outlet Brand Factory and Factory Outlet- Nike. Due to the limitations of time, the data would
be collected by visiting single store of each format. It would be difficult to generalize the results
of the study and apply it over entire Indian apparel market. Scope of the study includes study of
three parameters:

Location
Price
Format

The results of the study cannot be applied to other retail formats like hypermarkets, supermarkets
or unorganized sector. The study is carried out only in urban areas and hence cannot be used for
rural areas. Due to geographical area covered under the study, the results of study cannot be
applied to same type of outlets across nations as the demographics, lifestyle and culture are
different.

Objective
1. To study the importance of location, price and format for apparel stores
2. To understand customers perception of these parameters for multi brand and factory
apparel outlets.

Method
The study will be an observational study where the Brand Factory and Nike Outlets within
Ahmedabad city will be visited and the effect of these parameters will be observed. The number
of stores visited will be limited to one per format due to time constraints. The study is
exploratory in nature and would determine which of the above factors influence the shopping
decision of customers.

Data Collection and Analysis

The data required for the research would be qualitative in nature. Primary data collection will be
with prior permission of the brand manager for distribution of questionnaires. The reasons for
visiting the store and evaluation of store on these parameters will be recorded in responses by
breaking each parameter into multiple reasons. Managers will be interviewed for opinion about
the same parameters. Sample will consist of adult urban Indian respondents and sample size
would be 30 individuals. Sampling bias in the form of visit to outlets at particular time may be
introduced in research. Research papers and news articles related to multi brand and factory
apparel outlets will form part of secondary research.

Analysis of data will be done with frequency distribution and pie charts. A factor analysis will be
done to find the store attributes affecting the shoppers decision and the customer perception
about these parameters.

References
Basu, R., Guin, K. K., & Sengupta, K. (2014). Do apparel store formats matter to Indian
Shoppers? International Journal of Retail and Distribution Management, 42(8), 698-716.
doi:https://doi.org/10.1108/IJRDM-03-2013-0065

Gugnani, A. (2015, May 30). Top Retail Brands in India. Retrieved from Business Maps of
India: http://business.mapsofindia.com/top-brands-india/retail.html

Hyo Jung Chang, H. J. (2015). Effects of store attributes on retail patronage behaviors: Evidence
from activewear specialty stores. Journal of Fashion Marketing and Management, 19(2),
136-153. doi:https://doi.org/10.1108/JFMM-03-2014-0019

IBEF. (2017, June 20). APPAREL INDUSTRY IN INDIA. Retrieved from India Brand Equity
Foundation: https://www.ibef.org/pages/37703

IBEF. (2017, May). Indian Textiles and Apparel Industry Analysis. Retrieved from
www.ibef.org: https://www.ibef.org/industry/indian-textiles-and-apparel-industry-
analysis-presentation

Mukherjee, D. (2016, March 16). Fashion and lifestyle market. Retrieved from Daily News and
Analysis: http://www.dnaindia.com/money/report-fashion-lifestyle-to-become-rs-
394000-crore-market-by-2020-2189739