CaseStudy Analysis

On
Nalli Silk Sarees

Submitted to: Submitted by:

Dr. Arvind Kumar Jain Raghav Agarwal
Associate Professor (500044376)
(Department of Marketing) BBA-Retail Management (1st Year)
Nalli Silk Sarees

It was founded in 1928 by Dr. Nalli Chinnasamy Chetty. Vice chairman of the
company was Mr.Ramanth K. Nalli. It has 22 retail stores across the country and
was supposing to build 12 more retail stores with the funded amount of 25$
million. It is a 95$ million company.
It has out done its competitor by being the only player in its segment to have a
national presence. But over the years the business has become more complex to
manage because of the increase in the growth of retail stores and the proliferation
in the number of stock keeping units that had to be managed.
Nalli was applying a uniform pricing margin for all the products in its stores across
the country this led to increase in the cost of the product but it didn’t the price of
its product. As we know that India is the largest producer of silk after china as
there was two types of silk one was ‘zari’ and another was ‘pure zari’ and nalli was
the first saree retailers to implement a retun policy as a testimony of the quality of
its sarres.
Nalli deals with different product suits which are women wear, men wear, children
wear, and other products.
Top Competitors
 Kala Niketan
 Kumaran Silk Sarres
 Roop Kala
 Sheetal Sarees
 Sundari Silks
 Pioneer Embroidery Limited
Problems Faced By the Nalli Company

 Competition –The Company started facing huge competition from

large Indian & Multinational Companies who is dealing in this sector.
 Supply Problem- Shortage of labor supply was a major issue in
weaving industry in India. Young generation weavers are looking for
stable income and comfortable lifestyle so they are more interested in
joining software jobs.
 Shelf Space- Shelf Space was similar across all the outlets. It was
also a problem because shelf space should be made according to the
living, choice, and likes of the people of that area. If rich society is
living then they could decrease the low-value products like fabrics and
dhotis and increase the shelf allocation with traditional wedding
sarees that have high costing. It is not necessary that same type of
customers is found everyplace.
 Pricing- The prices of the Kanchipuram silk sarres could range from
$100 to $ 2000 dollars which means they charge premium from
customers and in return they provide premium services and the
competitors were offering at cheap rates. Peoples were not able to
afford it.
 Limited Brand Awareness- They were not known about the
products available in the market segment. The stores entertain only
the social contacts.
 Promotional Strategy- theCompany fails to go for new
promotional strategy. It only have ‘word of mouth’ publicity and on
other hand its competitors were aggressively making adervertisment
and offering huge amount of discount and offers.
SWOT Analysis

Strength
 Brand Name - The Biggest strength of a company is its brand name. As
nalli was enjoying a good amount of monopoly in market with kanchipuram
silk sarres as they were only the producer of the kanchipuram sarres. They
were providing pure zari which was increasing the brand value of the
product.
 Imported Dye -Nalli sarres were only the first to bring the vegetable dye
which they often have to import from outside. They have taken first mover
advantage.
 Technology – Nalli sarres have took the first mover advantage in
technology which was barcode, computer billing system and system
administration room.
 Trust in Customer -As the company was working in the dynamic
environment so the firm has to build trust among the people as today there
are around 60% of brand loyal person.
 Product Range -As competition was increasing so, nalli sarres were
increasing the number of goods available with him. They were providing
proper shelf space for the product

Weakness
 Lack of Feedback – Feedback is one of the important policies in
marketing as the company is able to consider the preferences and
thinking of the customer about our product. So, there was no any
feedback system.
 No offers and discount policies – The Company was not offering
any types of offers and discount on its product even they know that there
are many competitors which are offering huge discounts and offers
especially on the peak season.
  Weak Advertisement –No proper advertisement were followed by
the company to attract the customer segment. Only ‘word of mouth’
publicity were done.
 Uniform Pricing –We know that having uniform prices is good the
company because of the brands loyal it was working but sometimes
people are not brand loyal easily. So company must reduce the prices of
its product to attract the customer of lower segment.
Opportunity
 E-Tailing – In 21th century with evolution of modern technique the
company can go for its online sales of product and customer can also
came to know about your product and company.
 Expansion in different areas –The Company can launch or can
add new products in the market and its timeline. The company can go
market which is yet not affected by the other player. It can be a type of
first mover advantage to them.
 Expansion in product line – The Company can launch new product
in the market and add in their timeline. They can extend their western
clothes and traditional dress to boost up their sales because we can say,
that today’s youth focus is more on western outfit.
Threats
 New Brands - Many new saree brands are coming in the market
with new innovative colors, designs and latest techniques. This is a
threat for the company as the business can turn into failure if any new
saree brands occupy the large market share in the market.
 Regional Market Competition - Many people in villages are
still doing weaver jobs and work in cottage industry. They can provide
raw materials to other companies at cheaper rates. So, there may be
chances that company may face regional market competition.
 Matching up with the Trend - People nowadays are shifted
more towards western trends as it becoming fashion for today’s
generation. The company is not matching up with the trends. This can
 soon results in closure of traditional market and expand of western
clothes market.

Porter’s Five Force Model

Threats of new Entrants

 No Barrier for new Entry
 New Competitors
 Trend of new products
 Reduction in cost
 New Technology

Bargaining power of Nalli Silk Sarees Bargaining power of

supplier customers
Rivalry industry
 Less concentrated  Individual buyer
suppliers  Low customer loyalty  Some consumer are
 Large number of  Unique characters and not price sensitive
potential supplier to structure  High substitute
exchange them  E-tailing  No offer and
 Labor supply  Introduction of Dye discount on lot
 Cost of raw materials  Technology purchase

Threats of Substitute Product

 High threat of substitute
 Brand image and recognition
 Entrance of new products in
market
Marketing Mix
The company need to do marketing for its products because from
initial time the customers were most of social contacts and the
company was also not able to attract new customer segment. It
needs to adopt aggressive growth strategies which are adopted by
its competitors. The company should start spending on
advertisement so as to gather more customers towards their
products. Other than word-of-mouth, Advertisements can help to
remove the problem of limited brand awareness. The company
should start offering some sort of discounts on their products as to
beat their competitors because competitors are giving huge
discounts on peak buying seasons. The company can give
discounts to their special customers for being brand loyal and can
also offer discounts to new customers on special occasions like
Diwali, Karvachauth, and Holi etc.
Product Mix
Price – As price was the main factor of the company which was
troubling them in sales as they have considered premium prices for
Kanchipuramn silk sarres which was not affordable by everyone.
And respect to that they were providing services to the people .
Promotion –As we know that promotion plays an important role
in every company to boost their sales but here, company was not
actively participating inpromotionactivities and using ‘word- of –
mouth’ publicity.
Product –They were very unique in their product as they were
selling Kanchipuram Silk Sarres which they do not have any
competitors.
Packaging- With the charge of high prices for commodities they
were giving premium services which were in turn related to good
packaging criteria for them.