Consumer Behavior

Case study

Servis Shoes

Submitted to:

Ms. Sana Azar

November 25, 2018

Done by:

Alina Masood

Imran Rafiq

Kinza Zubair

Warda Arshad

Zunaira Tanveer
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Mr. Ahmed sat in his office alongside a pile of paperwork, pondering over the current

situation regarding the complaints on the social media and declining sales decline trend over the

past few months. Servis shoes was facing trouble and he needed to do something to save his

brand from going further into the pitfall. He was worried. Where have they gone wrong over all

this time? Targeting too many segments or poor quality and design shoes? He needed an answer

and action as soon as possible.

Company background:

The story of this company started more than 56 years ago. This was a collective struggle

of two young and recently graduated friends from Gujranwala particularly Mr. Choudhry and

azar Muhammad and Mohammad Hussain Choudhry. At the start they operated for purses and

sports merchandise solely in Lahore at a little scale, because of their consistent struggle in an

exceedingly very short time their business increased from leaps and bounds and inside few years

they were activity their products to each corner of Pakistan. Delivering its promise of product

excellence, Servis was established in Lahore in 1959 with the notion of fulfilling the footwear

wants of a whole family. Servis has thrived to a network of quite five hundred stores and

1500 freelance retailers in wholesale network until the date. By 1971, Servis shoes opened one

hundred stores nationwide. Company has its retails stores in range of cities shown in (see exhibit

1). Year once year, serves began to return up with new brands for various segments within

the market. Initial of bushed 1983, Servis came up with Cheetah– the primary sports

shoe whole was shaped. Whereas in 1988, they introduced Don Carlos – a premium men’s

formal footwear whole and so in 1993 they came up with Liza – the primary whole for women’s

shoes.
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By 2003, Servis had its own megastar. it absolutely was shaped bases on a

serious multi whole format in partnership with leading international brands.in 2013, SSC won

the ‘Campaign of the Year’ award at the PAS Awards for its ‘Shoes for Everyone’ campaign and

SSC takes the lead by being the primary company to modify its entire operations with Oracle

Retail solutions.

Company’s brands (see Exhibit 2)

N-DURE

Ndure combines vogue statements with comfort and offers product that area unit young at

bottom and reliable for the trendy urban youth.

LIZA

Adding modern styling to the standard everyday footwear, mullet covers a variety that caters

to totally different occasions and lifestyles for girls.

TZ

For the young kids WHO apprehend what they need, T.Z. offers fashionable and comfy shoes

in engaging colorful designs that charm to each kids and their folks.

SKOOZ

Combining comfort and sturdiness, Skooz supply’s a holistic vary of faculty shoes that follow

uniform needs and still offer styles that children will decide consistent with their own preference.

CALZA

Covering the normal everyday necessities for men, Calza offers a good selection that

gives satisfaction fashionable.

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Key Organizational Structure

The board of directors consists of Chaudhry Ahmed Javed as Chairman, Mr. Omar Saeed

as Chief Executive Officer. The company has 7 active directors. The company divisional

structure consists of GEC (Group Executive Committee). It includes the department for

procurement, corporate finance, corporate sales, corporate marketing, and corporate human

resources.

All these departments overlook the Tire & Tube Unit and Footwear Unit. Under these

departments the operations are further narrowed by finance, production and planning,

engineering, accounting, sales and marketing and human resource department. (Exhibit 3)

Footwear Industry

Global footwear market is expected to have $371.8 billion by 2020, having a compound

annual growth rate of 5.5% in the forecast period of 2015 to 2020. Footwear is a growing

industry. Leading companies in global market include Adidas, ECCO, Nike, and timberland.

These companies are focusing on providing better services as well as upgrading and developing

new designs. Online platforms in footwear industry are gaining popularity and are occupying

significant share among distribution channels.

Footwear requirement in Pakistani market is around 600 million pairs per year. It is

estimated that men purchase 1-2 pairs per year while women purchase 4-6 pairs per year.

Pakistan exports to more than sixty countries in five continents of the world. Pakistan’s yearly

footwear exports are $110 million. Exports have had high growth rate in recent past but still

share in global exports is only 0.001. Other countries in region such as India and Bangladesh

have higher export rates than Pakistan. The key strength is availability of high quality leather in

the country. Pakistan also has centuries old craftsmanship of shoe making, some popular
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products such as ‘khussa’ are still exported in large amounts. The biggest disadvantage is that

there is no ancillary industry, the sector has to import lasts, buckles, trims, and heels.

The industry is fragmented. 20% of footwear industry is organized, the remaining is cottage

sector. 80% of the shoe manufacturing industry is located is locate in Lahore. Other

manufacturing regions include Multan, Faisalabad and Karachi. The industry is trying to

reposition itself through joint ventures with Chinese manufacturers. Investment from china is

expected under CEPEC. Chinese collaboration is expected to bring in new technology, improve

labor skills, and boost exports.

Service Sales Corporation is the one of Pakistan’s oldest and biggest companies with

around 10% market share. Service faces competition from Bata Pakistan limited, which is only

fractionally behind in terms of market share. Other well-known brands in Pakistan include Stylo,

Borjan, and Hush puppies

Main Problems

Segmentation and positioning

The company has segmented the market into 4 major groups. Trendy women. This

segment is for the women. Included in this is Liza which is a trendy casual footwear for women.

Liza is promoted as a balance between comfort and style for the modern active woman. This

brand is for the happening and caters to all moods of women. It is for the woman who wants to

look casual yet smart and appealing. Wherever this Liza woman goes people adore and get

distracted by her charm and style in shoes. The second segment is Cowboys. This is for men.

Included in this is Don Carlos. The brand features craftsmanship and cutting edge quality. The

cowboys are the shown as the ones with a strong personality and who also follow the cultural

trends of Pakistan. It is for the men who work all day and face challenges of daily life with a
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smile. This brand is fashionable, durable and affordable. The third segment is playgoers. This is

sportswear. In this Servis has sub brands called N-Dure and Cheetah. This brand provides cutting

edge designs for a variety of sports like cricket, tennis, and hockey, biking and outdoor. This

brand consumer can be categorized as a young at heart consumer. This is for the urban trendy

consumer who indulges in sports and likes to follow trends. The last segment is for kids (Tooney

teez). Included in this is brands called Skooz and Toz. Toz promises to open up the imagination

of kids and take them to a world filled with excitement adventure and fun. This is to provide

comfort and safety for the children and also have uniform requirements. Servis shoes has

nurtured the brand and has positioned the brand as the most trusted, recognized and leading

footwear brand in Pakistan.(Exhibit 4) gives an analysis of the sales by segment.

Introduction of CALZA:

SSC (Service Sales Corporate Pvt. Ltd) recognized a huge gap in the unorganized retail

market. In the board meeting it was suggested to provide opinions on how Servis shoe can gain a

share in this untapped market by offering more than what was currently offered in this segment.

The company introduced a new brand CALZA for the typical Pakistani consumer. This brand

was introduced was Socio economic class C and D. And later Servis renamed its factory outlets

as CALZA. The company has now 70 stores across Pakistan under this brand. The success of this

brand has left SSC group spellbound as they see how much of a value this brand has put in its

current name and market position.

Core Problem:

Even though Servis shoe is market leader in shoe industry but in formal shoes Servis is

lagging behind Bata. In the past Servis has more focused on casual and sports footwear.

However Servis has used several promotional activities to engage the consumer but the parent
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brand lost its attention and it was seen people were paying attention to different products rather

than the mother brand. The original identity of the brand got diffused. Especially after the

introduction of CALZA. Since the Mother brand is now diffused people have mixed thoughts

about Servis and the company is not able to position itself in the market. The company however

targets various segments and produces on a massive scale but within each segment it lacks

variety and is just focusing on producing the same type of shoes since years. (Exhibit 5, 6). Lt

had to come up with good shoe designs at par with its competitors. The company is designing

shoes with traditional ways and has classical type of products. Lack of novelty in product design

has led to customers shifting to competitors and new comers who keep more up with latest

fashion trends. The company’s positioning in the market poses a major weakness. A large

number of leading women fashion shoes store such as Ehsan Chappal House, Stylo, Metro, Milli,

and Catwalk are constantly innovating with patterns styles and designs. These stores have about

20,000 multiple colors and sizes pairs in stock. Sometimes a new design is presented and

monitored for two weeks and if it gets successful is launched or is sold at discounts with

replenishment cycle times of 7 days and very short product lifecycles. Women fashion trends

were initiated in response to new floral designs or due to media influence and Servis always

found it hard to come up with design especially for women. Others with faster cycle and

throughput time always propose a major threat. Increasingly Chinese led shoe brands also

propose a major threat to the organization as they are quickly penetrating in the Pakistani market.

Servis had to find a strategy to cope up with competition and maintain its share in the women

segment.
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Brand Perception

Servis is known to produce products which have been around in the market for quite a

while. For a company that has grown drastically it has yet to explore the nature of their

consumers when it comes to brand preference. There seems to be a brand confusion when people

hear the name LIZA, or Ndure and a lot of people think of these brands as if they are standalone

brands and have no correlation with Servis. For example in of the focus groups conducted in

Lahore, (08-11-18) it seemed as if the consumer were confused about LIZA or Ndure being

brands featured by Servis shoes. There are other brands as well including TZ, Skooz, and Calza

which the consumers may have difficulty in associating with parent brand which is Servis. So,

what is brand confusion?

If the company has more than one product line then there is a chance the consumers may

be confused. The products are known to grow the brands. Just as an overview is made for a

house, the brand needs a structure so it can expand its product line and therefore establish brand

loyalty. Now when we talk about the fashion industry of the country, Pakistani designers have

yet to bring out their talent and it seems to be due to the lack of exposure. Therefore a lot of

different brands tend to compete against each other in the very same design parameters leaving a

confusion among brands. On top of this brands hosted by Servis don’t associate themselves with

parent brand, and that is often why people are often confused about which brand come under

Servis. Also LIZA and Ndure don’t add much value to the brand and instead of contributing to

the parent brand they seems to further affect the brand image of Servis. In terms of value, Servis

shoes are being offered in Pakistan and internationally. The focus is to cater to all types of

customers as well as international. The prices range for their products start at an economical rate.

And it’s usually targeted towards middle class families, which usually purchase shoes which
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costs less. This class finds it hard to afford imported brands due to high costs. So which

economical rate the customers then want to purchase shoes from Servis and these customers

expect a good quality product. Servis guarantees a reasonable quality at a reasonable price. So

people expect to get a good service along with durability in the product when they shop from

Servis. For example in exhibit 7, there are clear indications that customers aren’t happy with the

experience that is being provided by Servis. The customer shares his concern as he mentioned

that he’s a Servis shoe customer since childhood. And that his experience with buying the Ndure

shoe and not being able to receive the after sales service he had expected. He also mentions the

kind of value he got when he was turned away by the sales person for not the sales receipt while

he had the other proof of identification. He is absolutely right that this way Servis can lose their

valuable customers. Another reviewer clearly mentions that his jogger was torn in 4-5 times after

being worn. And also their products not being as durable as they used to be in the past. Lastly

there is a comment about service not being up to mark.

Moving on to the buying process, there is a high chance that most of the authority comes

to the adults. As most parents go for shopping they may take their kids with them (who will act

as influencers), but again the custodians are to decide if the shoe is fit for their child or not. So

parents are the decision makers and final purchasers. To make decision making easy for these

decision makers, Servis launched their very own product category known as Skooz. It was

simply made for school going children. As mentioned earlier, the brand features different

categories including Don Carlos, Cheetah, Liza, and Skooz for more age groups as well.
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Conclusion

In order to sustain the growth of Servis shoes in the shoe industry Mr. Ahmad knew he

had to come up with the possible options to increase the popularity of the shoe designs. After

analyzing the whole issue and the results in front of him, he knew he had to make a concrete

decision. He looked at the questionnaire results and released that in terms of shoe brands people

preferred Bata as opposed to Servis and that there were serious brand image issues and the brand

image was being confused and the designs weren’t up to the mark. They had four different

segments and each name under each segment. He thought targeting the multiple segments as they

have been doing is the right way which needs not to be altered but the designs now needed to be

worked on because as he looked at the sales by segment chart he realized that although cowboy

and tony teez have the highest share but all of the segments have been a potential driver so now

he had to make the first decision i.e. whether to target one or target the multiple segments and

whether or not is it “Servis shoes for everyone”? .He was convinced that targeting multiple

segment has been the philosophy of the brand and that he wouldn’t target a single segment as he

wanted to diversify the risk factor considering the highly competitive environment.

Now for the major design issue and the number of complaints being received on

Facebook, for that Mr. Ahmad called in the design team and discussed how best they could

change and best add value to the new designs. He decided to have quality checks at each of the

stage and if the shoe doesn’t meet a specific then it would be discarded according to six sigma

criteria being now adopted. Also they put forward some possible options for hiring fresh young

designers because they will know the latest trends and after thorough research would be able to

generate popular designs for the consumers. They decided that as their designs lacked the

trendiness and appeal, they would have to come up with for each segment ten possible designs.
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Then once the new designs are approved, their prototypes will be tested within the market

segments. Also market the new designs in a way with proper PR and on social media so that the

poor image of the previous designs gets vanished and people perceive Servis as a fresh brand

with stylish shoes. The new advertisements will reflect this positioning strategy and they will use

emotional appeal in great length

Their strategy is now to position themselves as a brand which is affordable with trendy

designs. They believed their positing statement needed to be made again as there was confusion

regarding the image people had in mind. Also they had now major two options to eliminate the

confusion people had between the brands .He thought they could adopt endorsement or sub-

branding so that Servis was somehow linked to the brands. This option would require re-

branding of all the brands and he wasn’t sure if that would be possible. Which option would be

better he pondered? Mr. Ahmad had now to design the strategy to execute these ideas so that the

lost service customers could be won back. He needed to take some action fast.
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Exhibits:

Exhibit 1: Store location in cities

Exhibit 2: Brands of Servis Shoes

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Exhibit 3: Organizational Chart

Exhibit 4: Sales by segment

SALES
Trendy ladies Cowboys playgoers Tooney teez

20%

30%

10%

40%
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Exhibit 5: Shoe brands prefered

Exhibit 6: Servis shoes customers

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Exhibit 7: Consumer reviews on social media