Footwear (India)

Ltd.
Case Study
Presented by:-
Abhisshek
Narwaria
Arpita Srivastav
Prince Chauhan
Shashank Keshri
Shreya Garg
 OVERVIEW Objectiv
Footwear e
Primary
India Ltd. Task is to
was a stop the
leader in downward
footwear movement
industry in and bring it
India. Problem Areas back up.
Market share Downward Company is
was 60% in movement of making
1990s which company’s losses for the
came down to market share in past two
40% in 2005-06. footwear years.
market in India.
Company and Its Competitors
DISTRIBUTION CHANNEL SYSTEMS
OBJECTIVE - To make company's products available to
consumers in every town across India.
STRATEGY ADOPTED - Vertical marketing system (VMS)
CATEGORIES -
Corporate VMS (contributes 60% of total sales)
Contractual VMS (contributes 40% of total sales)
DISTRIBUTION NETWORK - A
(CORPORATE VMS)
• This channel consists of 1500 retail outlets - including
company owned outlets and franchise stores.
• The franchise store are mainly located in rural market and
had agreement to sell only company's products.
• Franchise pay 5% of sale as royalty to the company.
• Franchise receives support and services from company for
site selection, planning, training and promotion.
Distribution Network – A
CLASSIFICATION OF COMPANY
OWNED RETAIL STORES
• MAIN STORES
1. Air conditioned, modern and full services.
2. Located in posh areas in major cities.
3. Provide medium to high price products for men, women
and children.
4. Mobile display units were used for brand positioning.
Cont.
• COMMERCIAL STORES
1. Located in commercial locations in metro and semi-
metro cities.
• FAMILY STORES
1. Non - air-conditioned stores.
2. Located in metro and semi-metro cities in high traffic
locations.
3. For medium income families.
Cont.
• DISCOUNTED STORES
1. Located in thickly populated area.
2. For low and middle income segment.
3. Provide discounted price on old stock.
DISTRIBUTION NETWORK - B
(CONTRACTUAL VMS)
• Built around wholesaler and independent retailers
(dealers).
• Wholesalers were independent traders who purchased
merchandise from company's wholesale depots.
• Located in rural areas and market in major cities and
towns.
• These dealers provide footwear for all brands as required
by customers.
Distribution Network - B
 Organization Structure
• Large Retail Store • Store Owned by the
Company
Store Manager

Floor Manager
Floor Manager

Sales Persons Cashier

Sales Persons Cashier

Shop Assistant
Shop Assistant
 SALES PEOPLE
Recruitment Process:-
• Minimum qualification of SSLC
• Recruited as temporary staff for 6 to 12 months
• Selling skills and Personal interview
• On-the-job training for 30 days

Salary Scale:-
• Rs. 3000-150-10,000-300-15,000

Commission Rate:-
• @2.25 per cent
 Question of the Case Study

If you were Rakesh Tandon, what suggestions would you give

and why?
 Suggestions
• Focus more on increasing share of sales of high margin
accessories
• Increase sales of other footwear brands in Dist A model
• Increase price of its products wherever possible
• Focus on improving top-line and bottom line both
• Company is heavily dependent on Distribution A model
where fixed overheads are high so Company has to
strengthen Distribution B model to increase sales.
• Performance based commission should be given.