Minor Project: Critical Analysis of Consumer Brand Preference for Apparel & Acces sories Research & Compiled

by: Akansha Choudhary Bhavik Gandhi Sunil Kerketta M/FMS/08/ 03 M/FMS/08/10 M/FMS/08/31 Batch: 2008 10 Master of Fashion Management DEPARTMENT OF FASHION MANAGEMENT STUDIES NATIONAL INSTITUTE OF FASHION TECHNOLOGY MUMBAI Secondary Data Source Statistics Tool Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Certificate CERTIFICATE FROM GUIDE REGARDING COMPLETION OF WORK This is to certify that the Project entitled Critical Analysis of Consumer Brand Preference for Apparel & Accessories submitted towards the partial fulfilled of t he Degree in by Akansha Choudhary Bhavik Gandhi Sunil Kerketta (M/FMS/08/03) (M/ FMS/08/10) (M/FMS/08/31) is their original work under my guidance and the results are based on the resear ch done by them. (_________________________) Name of Guide/Designed Date: Place: 2 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories ACKNOWLEDGEMENT We are grateful to NIFT for providing us an opportunity to do research work on Cr itical Analysis of Consumer Brand Preference for Apparel & Accessories. We expres s our whole hearted thanks to our guide Mr. Amit Aggarwal for his encouragement and moral support in organizing my work and giving us valuable tips for making i t presentable. We will be failing in our duty if we do not mention the name of our CC Mr. Sushi l Raturi and Ms. Garima Srivastava for their help in our Minor Project. We are also thankful to Mr. N. Muthu Ganesh for providing us the details of cond ucting the research and SPSS from its inception.

We are appreciative of Mr. Bandi who allowed me to get access to the library and for motivated us to finish the study on time. Lastly, we are also obliged to people of Mumbai & Navi Mumbai for providing us t heir valuable feedback to the questionnaire used to compile our primary data. NAME:_____________________ ADDRESS:__________________ Master of Fashion Management Date of submission: 3 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Contents Certificate..................................................................... .................................................. 2 ACKNOWLEDGEMENT ........... ................................................................................ ... 3 Introduction.............................................................. .......................................................... 5 About Brands and Fa shion .......................................................................... ............... 6 Literature Review ............................................ ................................................................. 8 Brand ...... ................................................................................ ........................................ 9 Fashion & its relation with brand.... .......................................................................... 12 Ma rketing communication applied to fashion products............................... ............. 12 The brand image in the marketing communication process ........ ............................. 13 The store image in marketing communication proc ess............................................. 14 Qualitative research ....... ................................................................................ ............ 15 Statistics Tools................................................ ............................................................ 16 Objectives ..... ................................................................................ ................................... 17 Consumer confidence and consumer market i n India .......................................... 19 Consumer Confidence ...... ................................................................................ ......... 19 Consumer Markets .................................................. .................................................. 21 Environment for the appare l and retail sector in India.......................................... 22 ATKear ney Report ..................................................................... ............................... 22 Ernst & Young Report ........................ ...................................................................... 25 Unders tanding buying pattern of consumers in India ................................... ........ 26 Consumer Preference for apparel brands ............................. ................................. 28 Primary Data Analysis with help of SPSS ... ........................................................... 32 Sample Analysis.. ................................................................................ ...................... 33 Shopping Preference Time Period & Format of store .... ....................................... 34 Customer spending & its relation with

average frequency of spending ................... 35 Types of Media Influence f or Fashion Brands on people ......................................... 36 Influen ce of Celebrity endorsement for fashion brand .................................. ........... 37 Relative Preference of consumer while selecting garment & accesso ries ................ 38 Impulse Buying Vs. Planned Buying, Indian Brands Vs. In ternational Brands ....... 39 Selection of one brand over other ................ ............................................................. 40 Consumer stand on Emergence of Women & Kids wear brand .............................. 41 Conclus ion ............................................................................ ....................................... 41 Appendix ............................ ................................................................................ ............... 42 4 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Introduction 5 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories About Brands and Fashion Consumers are evolving entities. Their aspirations & expectations are continuousl y changing. Todays shoppers are more intelligent, discerning & tuned to their ind ividual preference. They are increasingly fashion and brand conscious and select labels which define who they are or who they want to be. The biggest challenge for all the brands is to create loyal consumer who love them. Shoppers Stop Ltd 1 India represents an economic opportunity on a massive scale, both as a global ba se and as a domestic market. Indian consumer markets are changing fast, with rap id growth in disposable incomes, the development of modern urban lifestyles, and the emergence of the kind of trend-conscious consumers that India has not seen in the past. 3 Apparel and fashion industry in India is in its growth stage. Usi ng consumer sales promotion to differentiate ones offer has become an order of th e day in matured urban markets. More and more budget is allocated to these activ ities in order to the lure the consumers. In such a scenario, it is very essenti al to study how consumers make their choices in Apparel & Fashion category where there are several brands in the consideration set of a consumer. The financial risk being high consumers do switch from one brand to another due to sales promo tion offers and personal comfort zone. Hence it would of interest to a marketer to learn about the consumer preferences with respect to sales promotion offer; w hat schemes do consumer prefer for what kind of brands, which media do they pref er to know about the brand, product, and related schemes, who prefers the brande d apparel and fashion products, the price range of the fashion products. These a re the questions which consumer considers while choosing a brand. Similarly even a manager has to consider while introducing a product or brand. Brands build cu stomer loyalty by delivering excellent value no matter the price point-high, low

, or medium. Value includes styling, durability, quality fabrics, and consistent fit. To the consumer, a brand name represents familiarity, consistency, and con fidence in performance. Brand names when linked with lifestyle, selfexpression, and aspirations epitomize intangibles that are desirable to the consumer. Consum ers consider fashion as part of an overall budgetary spend, so apparel purchases now compete directly with other choices from the technology, entertainment, bea uty and general lifestyle categories for the discretionary rupee. 6 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Todays global apparel environment is tougher than ever for brands. There are many reasons for the emergence of this challenging climate; From a proliferation brands fierce competition from retailers acting as brands smarter consumers the consolidation of department stores mass retailers redefining themselves luxury d esigners creating for mass the demand for luxury goods the growth of the discoun t sector All of this adds up to one stark fact: those brands that break through the noise and communicate their message to the consumer directly and clearly in a way tha t means something to them. Rising costs of living around the world cause consume rs to stretch their incomes more thinly, meaning necessities are being weighed a gainst apparel. Fashion must have value and purpose and truly resonate to the co nsumer. Strong brands with consistent powerful messages can create loyalty and a sense of worth that transcends the burden of choice. 2 Fashion is direct and in dividual communication. It also nourishes industries with high research requirem ents due to its present characteristics: Fast mutation of its specificities It t ime to market Obsolescence of the product The understanding of consumers desires, behavior, and of purchase process of fash ion products is extremely important to design products collections as well as to placement of these products in market. Considering a marketing approach, a fash ion product must satisfy the demand target, so the main idea (message) behind th e brand (sender) must reach the consumer (receiver). 4 Notes: 1. 2. 3. 4. Annual report of Shoppers Stop Ltd is available on www.shopper sstop.com & page 17 The global branding report 2007 by Stacy Backer, chapter 1 I ntroduction KPMG Consumer Markets in India The next big thing Executive summary Paper - Branding of Fashion product : a communication process, a marketing appro ach, by Graca Guedes, Universidade Do Minho (Portugal), Paula da Costa Soares, I nstituto Politecnico do Porto ESIEG (Portugal). 7 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Literature Review 8

FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Building a strong brand requires careful planning and a great deal of long term i nvestment. At the heart of great brand is a great product or service backed by c reatively designed and executed marketing Kotler & Keller1 Brand Brand2 according to (American Marketing Association) is A name, term, sign, symb ol, or design, or combination of them, intended to identify the goods and servic es of one seller or group sellers and to differentiate them from those of compet itors. Branding thus is a means to distinguish one product from another and these differences may be functional, rational, or tangible related to product perform ance of the brand. Brand equity2 is added value endowed to products and services . This value may be reflected in how consumers think, feel, and act with respect to the brand, as well as the prices, market share, profitability that the brand commands for the firm. Brand equity is an important intangible asset that has p sychological and financial value to the firm. Customer based brand equity2 can b e defined as the differential effect that brand knowledge has on the consumer re sponse to the marketing of that brand. Positive customer based brand equity is w hen consumer react more favorably to a product. Brand knowledge2 consists of all the thoughts, feelings, images, experiences, beliefs, and so on that become ass ociated with the brand. In particular, brands must create, strong, favorable, an d unique brand associations with customers, for example Ruf & Tuf jeans were int roduced as youthful and sturdy brand. Brand Equity model Aaker Model2 Professor David Aaker views brand equity as a set of five categories of brand assets and l iabilities to a brand that add to or subtract from the value provided by a produ ct or service to a firm and/or to that firms customers. These categories of brand assets are: 1. 2. 3. 4. 5. Brand loyalty Brand awareness Perceived quality Bran d associations Other proprietary assets such as patents, trademarks, and channel relationships. Brand Equity model Brand resonance2 The brand resonance model also views brand b uilding as an ascending, sequential series from bottom to top: 9 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Brand resonance model 1. Identity - Ensuring identification of the brand with customers and an associa tions of the brand in customers mind with a specific product class or customer need 2. Meaning - firmly establishing the totality of brand meaning in the mind of cu stomers by strategically linking a host of tangible and intangible brand associa tions 3. Response - eliticiting the proper customer responses in terms of brand relate d judgement and feelings

4. Relationship - converting brand response to create active loyalty relationshi p between customer and brand. Brand Salience relates to how often and easily the brand is evoked under various purchase or consumption situations. Brand performance relates to how the produc t or service meets customers functional needs. Brand imagery deals with the extri nsic properties of the product or service, including the ways in the brand attem pts to meet customers psychological or social needs. Brand judgments focus on cus tomers own personal opinions and evaluations. 10 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Brand feelings are customers emotional responses & reactions with respect to the brand. Brand resonance refers to the nature of the relationship that customers h ave with the brand and the extent to which customers feel that they are insync wi th the brand. 11 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Fashion begins and ends with the customers Stephen Frings4 Fashion & its relation with brand As per Graca Guedes5 ,to the three components of fashion style, acceptance and s tyling, announced by authors like Frings, Packard et al and Wolse, a fourth elem ent has been added. Those three components orient this new element the brand, bu t they are also determined by it. From this new trend, with social and economic implication, emerge 2 different concepts of fashion products: the fashion global product and the market segment fashion product. Marketing communication applied to fashion products Marketing Communication Advertising Public Relation Promotion Direct Marketing Special Events Fashion shows Sales force Store Visual merchandising

The market of fashion products is highly competitive market whose main character istics is the similar positioning of a large number of brands and, in this respe ct the brands image developed by marketing communications can influence the adopt ion process of the products. This process, the marketing stimuli, a side with th e intention to influence the purchase decisions must transmit similar messages i n all communication support. The harmony of this complex process must consider s uch aspects as the brand awareness and the brand image, both determined by the c haracteristics of consumers perception. The image is a mental representation of t he brand or product attributes and benefit. It is a multi dimensional phenomenon that depends on the perception of those attributes and benefits. In fashion pro ducts, both mental representation and its perception are built in a continuous w ay, and developed through the image of fashion transmitted by each seasonal coll ection and by all activities of marketing communication. The overall effect of f ashion product branding depends on the 12 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories integration of all the components of the marketing communication plan, including visual merchandizing, with the product design. All these three elements have an impact over the adoption process and a similar final goal: to influence the pur chase option of fashion products through the satisfaction of a certain fashion i mage demand. The brand image in the marketing communication process Brand Identi ty Brand awareness Idea Personality Characteristic Brand Brand Image Product User Benefits Attributes This system reinforces the need to develop of the brands image considering the im plications over the brand identity and awareness of what confirms the importance of fashion products branding. The brand may benefit from a greater reputation a nd higher proximity to its buyers if the design of each collection takes in cons ideration the following aspects: In order to keep or develop the value of the sy mbolic speech of the products, the brands image management should be focused in o ne particular style; The consumer buys or uses fashion products of different typ es and styles; An effective fashion image developed through the seasonal collect ions, allows the brand to achieve image coherence and to capitalize on it in the market by building global brand. The adoption process of fashion products reflects the great influence of the ima ge of fashion that it transmits as well as its inherent identification potential (social, cultural and economic), besides its basic functions to protect the bod y. Recognizing this, consumer searches for fashions that more nearly fit his/her own needs and wants, rather than those of the idealized people who in the past have appeared in advertisements and commercials.

13 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories The store image in marketing communication process Image store Idea Geographic Location Visual Merchandising Exterior Design Interior design other Architecture LAYOUT Space design Display & Fixture Windows Lightening & music Signs Sales assistant Package The store image development is established through its geographical location, th e commercial zone where it occupies & its external design, as well as by the pro duct that it offers and their representation in the internal space of the store. The combination of these factors defines the store atmosphere of look or the pe rsonality of the store, which image of itself should match customers impressions of the store. 14 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Qualitative research It is necessary to assess the strength as well as understand nature of the brands equity relative to competitive brands, and to track it over time. Assessing the strength of brand equity3 according to Richard Elliot & Larry Percy can be done by finding Brand awareness & salience, Brand preference and Brand users. Brand awareness according to Sroll reflects the extent to which people can either reme mber or recognize a brand. When people think about brands in a product category, those come to mind represent recall brand awareness; they are recalled based on ly upon a category cue. If someone is shown a list of brand names or pictures of packages, those that can be identified represents recognition brand awareness. Brand salience depends upon awareness, but reflects the relative strength of tha t awareness in relation to the target markets awareness of other brands in the ca tegory. This relationship will be reflected in the relative relationship between what is known as top-of-mind awareness and all the other brands in the category o f which someone is aware. Brand preference, like brand salience, can be an indic ator of the strength of brand equity. Brands that are preferred are likely to en joy greater equity than those that are not. Preference for a niche brand may be high in its market segment, but relatively low in the market as a whole. Brand u

sers or category understanding is one of the primary function of quantitative re search and specifically users of a brand vs. users of competitive brands. Based upon this, one is able to profile various user segments. 15 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Statistics Tools Tabulation The collected data is arranged in the form of rows and columns that i s in the tabulation form. The purpose is to simplify the presentation and to mak e comparisons. Percentage analysis The collected data which is present in the fo rm of percentage will help us to get the clear cut picture of the contribution o f various responses. Co-relation analysis Co-relation between two attributes hav e been computed to understand the relation between each other and how one attrib ute affects the other. SPSS & Microsoft Office Excel 2007 SPSS Statistical Packa ge for Social Science is the key software used to prepare complex graph, to do v arious analysis like correlation, regression, rank correlation etc. which are us ed in Minor project. Microsoft Office Excel 2007 The primary data collected was input in excel sheet and with the help of various formula it was easy to do data analysis. Simple bar graph, pie chart, doughnut chart etc are outcome of Micros oft office Excel 2007. Notes 1. 2. 3. 4. 5. Marketing management Kevin lane Keller & Phillip Kotler, 12 Edition, Chapter 9 Page No 273 th Marketing management Kevin lane Keller & Phil lip Kotler, 12 Edition, Chapter 9 Page No 274 onwards Strategic brand management Richard Elliot & Larry Percy, Indian Edition, Chapter 6 Auditing and Measuring Brand equity, Page no. 110 th Fashion From consumer to concept Stephen Frings, 6 Edition chapter2 page no.31 Paper - Branding of Fashion product : a communicati on process, a marketing approach, by Graca Guedes, Universidade Do Minho (Portug al), Paula da Costa Soares, Instituto Politecnico do Porto ESIEG (Portugal). th 16 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Objectives 17 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories The Indian Economy is soaring. I think Indian people love brands. There isnt anoth er American designer on this soil, may be because they dont know it, may be becau

se they dont understand it, may be because they dont care. I care about it. I am e xcited about it and I feel very positive that we are going to build a wonderful lifestyle business here. Tommy Hilfiger, International fashion icon4 The objectives behind our minor project Critical analysis of brand preference for apparel and accessories are: 1. To study the consumer confidence and consumer market in India. 2. To study th e environment for the apparel & retail sector in India. 3. To understand the buy ing pattern of the consumers in India. 4. To find out consumer preferences with respect to brands with the help of secondary data. 5. To find out consumer prefe rences with respect to brands with the help to primary data and SPSS. 18 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Consumer confidence and consumer market in India Consumer Confidence - AC Nielsen report1 According to AC Nielsens Consumer Confid ence, Concerns, Spending and Attitude to recession, the definitive gauge of cons umer sentiment around economic and social concerns across 51 countries After mon ths of speculation and uncertainty around the global economy, it appears the pen ny has finally dropped for the worlds consumers. Consumer confidence worldwide ha s fallen to its lowest level in several years. 46 percent of global consumers claim they put their spare cash into savings, up 4percent in the last six months. The worlds most avid savers have always hailed f rom Asia Pacific, where an average of 57 percent of consumers chooses to build t heir nest eggs. Holidays and vacations continue to be a popular choice, with 34 percent of consumers across the globe planning to spend on a well-earned vacatio n. One in three (32%) consumers chooses to buy new clothes, up 2 percent from si x months ago. (fig on next page) 19 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Bullish Denmark, India and Indonesia lead the charge, with four in five (79%) of consumers optimistic about the size of their wallets. 20 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Consumer Markets KPMG report2 Indian consumer markets are changing fast, with ra

pid growth in disposable incomes, the development of modern urban lifestyles. In dian consumers are becoming increasingly sophisticated and knowledgeable about p roducts; media channels that allow companies to communicate with consumers are g rowing in diversity and reach. Foreign brands remain very powerful in India, esp ecially in clothing and personal care products, but increasingly brands have to be associated with value. Indias consumer markets are unique. India has more peop le living in poverty than any other country. Its population is less urbanized th an almost every other comparable economy. Literacy rates are lower than in most Asian competitors and income is less well distributed across the whole populatio n than in most Asian competitors. The market is also highly regional. A patchwor k of cultures and languages, federal India also has a highly uneven pattern of w ealth. Average state incomes in Punjab, Gujarat and Maharashtra are around five times the level in Bihar, for example. Some urban areas continue to be richer on average, while large rural areas of Bihar, Jharkand, Uttar Pradesh and Orissa a re officially destitute. According to recent data from Indias Marketing Whitebook by BusinessworldIndia has around 208 million households. Of these only a little over six million are affluent that is, with household income in excess of INR215, 000. Another 75 million households are in the category of well off immediately bel ow the affluent, earning between INR45,000 and INR215,000. 21 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Environment for the apparel and retail sector in India ATKearney Report According to The 2008 AT Kearney3 Global Retail Development Ind exTM - India continues to be among the most attractive countries for global reta ilers. At 511 billion $ in 2008, its retail market is larger than ever and drawi ng both global and local retailers. Organized retail which still accounts for le ss than 5% of the market, is expected to grow at Compound Annual Growth Rate (CA GR) of 40% from 20 Billion $ in 2007 to 107 billion $ by 2013. Indias overall ret ail sector is expected to rise to 833 Billion $ by 2013 and to 1.3 trillion $ by 2018, at a CAGR of 10%. Consequently, as a democratic country with a high growt h rates, Indias retail market opportunity is unchallenged. Consumers spending has risen sharply as the youth population (more than 33% of the country is below the age of 15) has been a significant increase in its disposable income. In the pas t 4 years alone consumers spending rose an impressive 75%. But challenges have e merged that could potentially slow the pace of growth for new global entrants st ifling regulations, soaring real estate costs and fiercely competitive domestic retailer groups. In addition, shopping mall projects are running resource constr aints that are delaying completions and destructing many retailer entries strate gies. Global retailers, hungry to enter this market, continue to frustrate by re strictive government regulation. Under Indias current laws which the government r elaxed somewhat in 2006, single brand retailer can own a 51% majority stake in j oint venture with a local partner. Such relaxed regulation does not extend to mu lti brand retailer such as Wal-Mart, Tesco and Carrefour, which must operate thr ough franchise or cash & carry wholesale format. Accordingly, Wal-Mart recently joined forces with Indian telecom giant Bharti enterprises. Bharti will own reta il shop under the Wal-Mart franchise and Wal Mart will operate logistic, procure ment and storage activities. In the past couple of years, numerous retailers inc luding the SPAR group, Carrefour, Marks & Spencer and Nautica have entered the m arket. Earlier entrants, including Wal-Mart and Metro, have plans for a blitz ac ross the country. Tesco and Kroger will feel additional pressure as the situatio n grows more competitive. Local hypermarket retailers are moving aggressively to get ahead of further loosening of foreign investment regulation. Taking their c

ue from success of hypermarket in china local retailer such as Pantaloon, the Ta ta groups Trent, RPG enterprises, K Raheja Corporation and Reliance have all take n an early 22 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories lead due to ambitious expansion plans. Season business such as Reliance & Aditya Birla are locking at the upstream value chain (farms, logistics and storage) to better their positions once they begin competing directly with the likes of Wal Mart. As the retail industry in India matures, companies are pursueing new busin ess models. For example, Reliance restructured and is now pursuing joint venture opportunities with international retailers such as Office Depot, Marks & Spence r and Neiman Marcus. The industry is also beginning to consolidate with Aditya B irla acquiring Trinethra Superretail, the Wadhawan Group acquiring small regiona l retailers, and Actis investing in the supermarket chain Nilgiris. The real est ate costs are prohibitive and the cost to acquire to train and retain workers ha s increased as more lucrative work opportunities emerged. Although the workforce continues grow rapidly (with more women and farmers entering), it cannot keep u p with the growth across all the business sectors in India. Still, large retail outlets hold a strong appeal for customers even though they place Indias 4 millio n to 6 million mom-and-pop shops at risk. This is causing concern over the pace of change and could be another speed bump on the road to Indias 1.2 billion consu mers. The Global Retail Apparel Index 2008 Rank 1 2 3 4 5 6 7 8 9 10 Country Bra zil China India Turkey Chile Romania Argentina Thailand Russia UAE Absolute mark et size 45 74 57 29 22 21 21 22 52 31 Growth prospects 33 22 37 37 47 54 44 25 2 2 42 Consumer affluence 42 36 31 59 44 34 39 57 39 28 Score 48 47 47 46 46 45 41 40 39 38 ATKearney Retail Apparel Index analysis evaluates more than 30 apparel markets t o identify the top 10 countries in terms of market size, growth prospects and co nsumer affluence. The retail apparel index is comprised of market indicators 55% and growth indicators 45%. Market indicators include total clothing sales and i mports, total and youth population & clothing sales per capita. 23 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Growth indicators include total clothing sales, compound annual growth rate (CAG R) in clothing imports and clothing sales per capita, population growth and CAGR of GDP per capita. Within each metric, a country is assigned points based on it s value on the metric against the largest sample. For example, china has the largest total sales at $ 93.5 billion, so its scores 100 points in the metric, Brazil has $ 76 Billion in total clothing sales, so it scores 81.4 points (76 divided by 93.5 times 100) Apparel is Indias second large st retail category (behind food & grocery), representing 10% of retail market. P rojected to reach $ 37 billion for 2008, apparel will be among the highest growt

h categories, with a CAGR of between 12 to 15%. In 2008, organized retail will r epresent roughly 10% of the total market. The rapid growth is supported by the b urgeoning Indian middle class. Mean Annual disposable income is growing at more than 6% CAGR, consumer spending is expected to increase 8% per year. Other facto rs supporting these brisk growth rates include more apparel focused shopping mal ls continued penetration of credit cards organized apparel retailing in tier 2 a nd tier 3 cities the popularity of ready-to-wear clothing and western fashion fo r women. Still, Indias apparel market is highly fragmented. The top 7 competitors represen t less than 10% of total market. Customers tend to be loyal to a specific retail er Shoppers Stop, Westside & Pantaloon instead of any particular apparel brand. T his has led to a thriving private label apparel market for ready-to-wear clothes and more competition. However, brands as Benetton, Louis Phillipe, Van Heusen a nd Esprit are capturing a strong following among Indian consumer. There is a flu rry of activity across all price points, with new concepts and brands being laun ched almost every month. Madura Garment joined Peter England People, a mass mark et family store modeled after GAP and Old Navy. Discounter Koutons has opened ne arly 1000 stores in the past few years. A key challenge for apparel retailer in India is to induce customer to purchase quickly, which means sales promotion tac tics are important, including end of season sales, festival promotion and specia l events. Local firms such as Future Group are having sales of $ 845 million. It has more than 5 million sq feet of retail space in roughly 450 stores across 40 cities. Its principal formats include pantaloon, a departmental store chain & B ig Bazaar, a hypermarket chain. Shoppers Stop has 5 million sq feet of retail acr oss 88 stores in 12 cities. The group plan 6 million square feet of retail space by 2011. 24 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Ernst & Young Report According to Ernst & Young retail report4 the organized ret ail in the year 2002 is of 1075 $ million and is expected to grow with CAGR of 1 6%. The clothing segment (2005) is positioned for further organized retail penetrati on due to the high level of branding activities by apparel retailers and merchan dising spread across formats such as department stores, hypermarkets, own retail outlets and franchises. 25 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Understanding buying pattern of consumers in India According to Ernst & Young report4 Indian consumers lifestyle and profile is also evolving rapidly. India has one of the youngest populations in the world with 5 4% of the population below the age of 25. Discretionary spending has seen a 16% rise for the urban upper and middle classes and the number of high income househ

olds has grown by 20% year on year since 1995-96. There is an increasing shift f rom price consideration to design and quality, as there is a greater focus on lo oking and feeling good (apparel as well as fitness). At the same time, the new I ndian consumer is not beguiled by retailed products which are high on price but commensurately low on value or functionality. There is an easier acceptance of l uxury and an increased willingness to experiment with mainstream fashion. This r esults in an increased tendency towards disposability and casting out -from appa rel to cars to mobile phones to consumer durables. The self-employed segment of the population has replaced the employed salaried segment as the mainstream mark et. 40% of primary wage earners in the top 2-3 social classes in towns with a po pulation of 1 million or more are self employed professionals and businessmen. T his has driven growth in consumption of productivity goods, especially mobile ph ones and two and fourwheelers. Finally, credit friendliness, drop in interest ra tes and easy availability of finance have changed mindsets. Capital expenditure (jewellery, homes, cars) has shifted to becoming redefined as consumer revenue e xpenditure, in addition to consumer durables and loan credit purchases. The 4 ma jor organized retail sectors are Food & Grocery Clothing Consumer Durables Books & Music In 2003-04, private consumption expenditure in India amounted to Rs 1,690,000 cr ores (USD 375 billion) of which, retail sales constitute about 61% (USD 230 bill ion). 26 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Food & Grocery (USD154 billion) contributes about 41% of private consumption exp enditure and about 77% of total retail sales. However, this segment is largely c ontrolled by the unorganized small outlet sector -penetration of organized retai l is about 1% in this segment. This is one of the primary reasons for Indias low organized retail penetration rate. The sector is defined by low gross margins, b ut there is a tremendous growth potential in the organized sector in the form of hypermarkets, supermarkets and hard discount chains. In such a scenario, pricin g and network will be the key to success. Clothing is the second largest segment in terms of retail sales. 27 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Consumer Preference for apparel brands India devotes roughly the same share of their income to apparel as do Chinese an d Brazilian. But the countries lower per capita income levels means overall spen ding on apparels is significantly lower, and the habit of Indian shopper present intriguing challenges for multinationals eyeing the market. For starters, nearl y 40% of mass-market Indian shoppers McKinsey5 surveyed said that their most imp ortant shopping occasions revolved around special events such as weddings and an nual religious festivals a figure dramatically higher than the one for shoppers in the other emerging markets McKinsey studied. Furthermore, to a greater extent

than else were shopping is a family activity in India, nearly 70% of its shoppe rs always go to stores with their family, and 74% - more than twice than average of Brazil, China and Russia view shopping as the best way to spent time with fam ily. The preference for family oriented shopping is consistent across age groups , income segments, regions and city sizes. As in many markets, in India women ar e the primary decision makers in apparel purchases for the entire family. But In dias men also have an important role indeed, half of McKinsey survey respondent s aid that their husband had a major influence on which stores they frequented a p roportion far higher than Brazil (3%), China (8%) and Russia (18%). Whats more, I ndia is unusual in that the market for mens apparel is larger than womens market, where traditional Indian apparel still dominates. Mass market apparel retailer m ust therefore find formats and merchandising approaches that will attract shoppe rs seeking apparel not only for special occasion but also appealing to entire fam ily. According to McKinsey5 survey young Indian aged 18 24 years strongly trust brands from their own country but also believe that foreign brands are of higher quality than local brand. In India, rather than using only income bands to defi ne category of consumers, we use the socioeconomic class code established by the Market Research Society of India, high-end or global consumers are those in socio economic class (SEC A), mass-market consumers are those in SECs B and C, and str uggling consumers are represented by SECs D and E. In addition to household inco me the class code incorporate the levels of education and occupation. 28 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories It is evident from research that in 6 months Indians spent 59 (Rs. 4838) which is lowest in BRIC countries, but 38% of Indians buy clothes for special events lik e festivals and weddings. Most of Indians shop with family and friends which is 68% highest among BRIC countries. 29 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Young generation (Youngistan) frequently goes for the shopping of apparels which is average of 4.5 trips per six months and average spending is also much higher than the average spending. This is why the apparel brands are targeting the you th in BRIC countries including India. Age groups of 18 24 years and 25 34 years would like to spend more on apparel if their income increases instead of saving. Most of the youngster believe that domestic brands can compete with the foreign brands but they would like to purchase foreign brands. 30 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08

Critical Analysis of Consumer Brand Preference for Apparel & Accessories In India 23% people buy clothes for going out with family and friends, 10% for g oing to work, 26% for all purpose use, 25% in order to wear at home, and majorit y of 38% for special occasions. According to Nielsen survey6, Indians are in the list of top 10 countries which disagree that designer brands are of significantl y higher than standard brands. 31 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Primary Data Analysis with help of SPSS Sample Design A sample design is a definite plan for the obtaining a sample from a given population. A majority of patrons in a sample were selectively chosen t o make the sample represent the universal population as closely as possible. Sam ple Unit The sample unit consists of people of age group ranging from 18 years t o 55 years & above. The sample consists of students, government employees, emplo yees, doctor, engineers, service category, manager, professors and housewives. S ample Size The sample size of the survey is 116 people. A conscious effort is ma de to cover each and every type of category of people and to cover almost all th e region of Mumbai. Male: Female: 65 51 Students: Salaried: 34 82 Primary Data Collection The primary data is that which is collected for the firs t time, and thus happen to be original in character. For this study questionnair e method and interview method has been adopted. Clearly and understandably set o f questions had been printed and got filled by 116 people for their valuable res ponse. Limitations: The duration of survey and its geographical extent is one of the limitations. For more authentic and relevant results a larger sample size w ith a greater geographical reach can be considered at later stage. 32 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Sample Analysis Demographic Classification - SampleAge Groups 60 50 No. of people 40 30 20 10 0 15 - 24 25 - 34 35 - 44 Age in years 45 - 54 5 5 & more 33 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories

Shopping Preference Time Period & Format of store Shopping Time Period 8% 7% 16% every week every month 38% every 3 month every 6 month every year 31% It is evident from the pie chart that 38% of the total population prefers to sho p every month. Retail format preference 70 60 No. of people 50 40 30 20 10 0 EBO No. of People 15 MBO 65 Discount Store 27 Street Shop 7 Int ernet 0 Multi Brand outlet leads the preference of retail formats followed by discount s tores, exclusive brand outlets, and street shop. In India internet shopping is n ot so popular, out of 116 samples no one preferred internet shopping for garment and accessories. 34 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Customer spending & its relation with average frequency of spending Customer Average Spending > Rs. 3000 15% < Rs. 1000 9% Rs. 2000 - 3000 35% Rs. 1000 - 2000 41% 41% of the consumer spends between Rs 1000 2000 whenever they shop garments and accessories. SPSS analysis tool (Reports 123 Summaries) enables us to know the relation betwe en the average spending of the customer and frequency of shopping. It can be con cluded that majority of the consumers who spends Rs. 1000 to 2000 shops either e very month or every 3 months. Average spending of customer < Rs. 1000 Rs. 1000 2000 Every week 2 2 Frequency E very month 5 19 of Every 3 months 1 18 shopping Every 6 months 2 6 Every year 1 2 Rs 2000-3000 2 17 13 6 3 >Rs. 3000 2 3 4 5 3

35 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Types of Media Influence for Fashion Brands on people 39 40 35 30 25 20 15 10 5 0 Media Preferred for Fashion Brands 28 23 16 7 3 No. of People Media Out of 116 people, 39 notice the fashion brands in newspaper followed by 28 peop le in the magazine. From SPSS Population pyramid graph, the most preferred media for the male is Newspaper and Television and for female is Magazine and Newspap er, internet and movies are not much popular media. 36 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Influence of Celebrity endorsement for fashion brand Do Celebrity endorsement influence brand selection? Agree 9% Disagree 28% Somewhat agree 28% Somewhat disagree 10% Indifferent 25% The various fashion brands are being promoted by celebrities such as: Actors: Sh ahrukh Khan (Belmonte), Amitabh Bachann (Reid & Taylor), Saif Ali Khan (Provogue ), Akshay Kumar (Levis 501), Kangana Ranawat (Levis), Esha Deol (Provogue), Abhi shek Bachann (Flying Machine), Hrithik Roshan (John Players) etc. Sport stars: M ahendra Singh Dhoni (Siyaram), Yuvraj Singh (Donear), Maria Sharapova (Nike), Su nil Gavaskar (Dinesh), etc.

Models & Designer: Milind Soman (Excaliber), Rohit Bal (Linen Club) etc. Celebri ties in Movies: Louis Phillipe (Don Shahrukh Khan), Van Heusen (Ghajini Amir Kha n), Spykar Jeans (Golmaal), Pantaloon (Na tum Jano na hum), Reebok (Shah Rukh Kh an Main hoon Na), Polo Sport (Shah Rukh Khan Kuch Kuch Hota Hai) etc.

37 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Relative Preference of consumer while selecting garment & accessories Store Proximity Store Ambience Price Quality Design Brands 0 0.5 1 1.5 2 1.99 1.81 4.09 4.64 4.46 3.99 2.5 3 3.5 4 4.5 5 More the score, prefered the most (best is 6) From the chart it is clear that Indians give first priority to Quality while sele cting the garment and accessories. Indians are not so brand conscious and brand l oyal. Design is the second attribute preferred while selecting the garment and a ccessories. Indian consumers are price conscious as it ranks third among all the attributes. Unlikely in America and Europe people are brand and fashion conscio us but here people need value for money, which means the product should be of best quality, latest design and price should be affordable. Brand comes fourth in ra nking according to the survey. Attributes of store such as proximity of store an d ambience of store comes last in the priority of Indian consumer. Consumers do shopping on an average for every 3 months, so proximity of store does not play i mportant role. Shopping and mall visit is the most preferred pass time for the I ndian consumer. Ambience of store does not matter in consumer buying preference directly but it helps in impulse buying and increasing foot falls. 38 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Impulse Buying Vs. Planned Buying, Indian Brands Vs. International Brands Do consumer plan brand, color, type of merchandise etc before buying? Impulse Buying Planned Buying Does Indian Fashion Brands have standards that of International Brands? International Brands 48% Indian Brands 52% 39 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories

Selection of one brand over other Consumers who purchase the fashion products from Exclusive brand outlet prefer s hopping one brand over another only because of the brand image of the particular brand. In multi brand outlet, majority of male select a particular brand over a nother due to brand image but majority of female purchase a particular brand ove r another brand due to shopping experience. Overall preference for one brand ove r another is the shopping experience for a particular brand. Celebrity endorseme nt is not much considered while choosing one brand over another. 40 FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Consumer stand on Emergence of Women & Kids wear brand Emergence of Women & Kids wear in India Not Possitive Move Possitive Move 0 20 40 60 80 100 120 Conclusion In India the branding in the garments and accessories is in the growth phase. Co nsumers have started identifying and preferring branded products over unbranded products due to growth in retail sector. Another observation is that Indian cons umer is quality and price conscious rather than brand conscious which means ther e are very few brand loyal customers. Thus proper category management and catchm ent can improve branding and brand loyalty in India. Notes: 1.Consumer Confidence concerns, Spending and attitude to recession, a global Nie lsen report June 2008. (www.nielsen.com) 2.Conumer Markets in India the next big thing? KPMG report September 2005. (www.kpmg.com) 3.Emerging opportunities for G lobal Retailers The 2008 AT Kearney Global Retail Development Index (www.atkearn ey.com) 4.The Great Indian Retail Story Ernst & Young Report 2006 (www.ey.com/in dia) 5.The Mckinsey Quaterly How half the world shops: Apparel in Brazil, China, and India. 2007 (www.mckinsey.com) 41

FMS Dept., National Institute of Fashion Technology, Mumbai Minor Project 08 Critical Analysis of Consumer Brand Preference for Apparel & Accessories Appendix Name:_________________________________Age: _____ Gender:_________ Email Id:_____ _________________________ Occupation:_________________ 1. Please Tick how often do you shop clothes & accessories? Once in a Once A wee k month Once in 3 month Once in a year Once in 6 month 2. How much do you spend on an average for shopping for clothes & accessories? < Rs 1000 Rs 1000 - 2000 Rs 2000 - 3000 > Rs 3000 3. Where do you shop apparels often? (Please tick any one) EXCLUSIVE BRAND OUTLE T MULTI BRAND OUTLET DISCOUNT STORES STREET SHOP INTERNET 4. Where do you notice Fashion brands maximum (often)? (Please tick any one) New spaper Magazine Television Hoardings Movies Internet 5. Does a celebrity endorsement influence your brand selection? Agree Somewhat a gree Indifferent Somewhat disagree Disagree 6. Which attribute matters most while selecting apparels? Rank your preference. (1 is most preferred and 6 is least preferred) Brand Price Design Ambience of St ore Quality Proximity of Store 7. Do you plan particular brand, color, type of m erchandise etc before shopping? yes no 8. Do Indian Fashion Brands have standards (quality, design) that of Internation al Fashion Brands? yes no 9. Is the entry and emergence of women and kids wear brands in India a positive move in India? yes no 10. What will you consider while choosing a particular brand over another brand of similar product quality and price range? Brand image Celebrity Endorsement Sh opping Experience 42 FMS Dept., National Institute of Fashion Technology, Mumbai