Consumer Behavior

Garment Industry
Submitted to: Prof: Himanshu Vaidya

Submitted By:
Ankit Shah Shrey Shah Jay Parikh Falan Shah Krishna Vaishnav
(PGP/SS-07/09.T2)

ACKNOWLEDGEMENT

Feeling gratitude and not expressing it is like wrapping a present and not giving it.
While presenting this report, we take extreme pleasure to express our deep gratitude towards all those who offered their valuable help and time to help us in completing the project successfully. We thank those people who have provided there assistance, encouragement & enthusiasm. Without them this project would not have been possible. First of all we are extremely grateful and thankful to the INDIAN INSTITUTE OF PLANNING AND MANAGEMENT- AHMEDABAD, for instilling in us new and lively subjects which are practically observed in the industry. We would also like to thank and give our sincere regards to Prof.Himanshu Vaidya, for guiding us during times of need and giving us opportunity to work on this esteemed project in which, we got a chance to use all our classroom theories and practices for understanding and analyzing the working of the real world business units. Along with this, we got a chance to be in the world of Consumers which was a great experience. Last but not the least, we would take the opportunity, to be thankful to our Honorable Dean Mr. Dipankar Sarkar, who gave us the courage and enthusiasm for the successful completion of the project.

PREFACE

Drastic changes have occurred in Indian economy since the year 1991. Liberalization, Privatization & Globalization has helped our country to become one of the fastest developing countries of the world. Liberalization led to quicker operations & development of different industries in the nation. Now, it has become very easy to set up any entity & carry out various activities with minimum government interruption or delay. Due to globalization, more & more foreign investments & organizations are coming in our nation day by day. This has led to increase in per capita income of the country. Also, people get number of options to choose from for almost everything due to competition. Now, customer has become king of the market & the marketers are striving to attract maximum customers along with providing them maximum satisfaction rather, they delight customers. Lot of companies have pumped in lot of funds in India in different sectors, be it FMCG, automobiles, textile, electronics, electrical, furniture & fixtures & footwear along with others to grab as much market share as possible. As we all know, there are lot of brands of different products available in the market. Every brand or marketer is trying to provide quality in terms of products & services better than the competitors. As there is cut-throat competition, it has become inevitable for a marketer to satisfy the customer to the maximum. As a result, customer has become the King of the market. Customers mind is a riddle, that is, it is very complex. Their tastes & preference differ from individual to individual, place to place & culture to culture. Their demands also change from time to time. The companies have to be very innovative to deliver something new & different to the customers because consumers get bored if the same type of product with no change is delivered to them. So, we can say that the life of a product is very less. All the companies are trying to attract as many customers as possible & retain them because if they fail to do so, the customer may shift over to some other brand/product.

EXECUTIVE SUMMARY
The project we have undertaken is very interesting as the practical knowledge of the consumers in the market is not at all available by just sitting in Air Conditioned rooms. One has to go places to find out what actually is the real preference of the consumers of the Indian market. The Indian consumers have many different characteristics but the main of the Price Sensitivity which is the main factor that affects the demand of the Indian consumers. The classroom is totally different from the practical life. What we found out was the very different behavior than what we expected from the consumers and we were also surprised to see such a behavior. The theories in the books are not practically applicable in the market. The main theory which we are not taught and still we have to implicate is the consumers ego should be massaged in order to retain them. We had gone to different stores and malls to mainly observe what the behavior of the consumers are as the garment sector is the most hot sector. Specially the Indian consumers are noted for the high degree of value orientation. Even the luxury brands have to design a unique pricing strategy in order to get a foothold in the Indian market. Indian consumers have a high degree of family orientation. This orientation in fact, extends to the extended family and friends as well. Brends with identities that support family values tend to be popular and accepted easily in the Indian market. Indian consumers are also associated with values of nurturing, care and affection. These values are far more dominant that values of ambition and achievement. Product which communicate feelings and emotions gel with the Indian consumers. Apart from psychology and economics, the role of history and tradition in shaping the Indian consumer behavior is quite unique. Perhaps, only in India, one sees traditional products along side modern products. For example, hair oils and tooth powder existing with shampoos and toothpaste Initially the apparel market in India was dominated by tailored wear, and ready-to-wear was largely restricted to jeans and knitwear. Since the early 1990s the domestic apparel market is undergoing a major transformation with the branded segment showing an encouraging growth in the past few years. Demand for branded apparel in the market is growing at a rate of 12-15 per cent per annum. The demand increase, fuelled by the fast growth in retailing and rising incomes, is expected to increase the present share of branded apparel in the total apparel market of Rs 78,094 crore (approx $18.1 billion), from 10-12 per cent to around 20 per cent over the next five years. The menswear segment has got the largest number of apparel brands, followed by kidswear. As against this, the branded womenswear segment - both ethnic and western has a lot of untapped potential. An industry journal survey has revealed that womenswear is the fastest growing apparel segment, clocking a growth of around 13 per cent in 2004, while the menswear segment grew by around 12 per cent during the same year.

These growth figures are attracting a number of newer brands into the market, both domestic and international. Most international brands either use the franchising or licensing model to enter the Indian market. Some of the international apparel brands that have recently created a presence in India include Ermenegildo Zegna, Mango, Marks & Spencer (M&S), DAKS, Hugo Boss, Tommy Hilfiger, Guess? etc. Despite being a small market presently, almost every reputable international apparel brand is in some form of negotiation or said to be eyeing the Indian market, invariably talking to well-established Indian textile and apparel companies about licensing.

Market Overview
The Indian retailing industry, which was traditionally dominated by small and family-run stores has come of age. Over the past couple of years there have been sweeping changes in the organized retailing business. According to Assocham (a leading Indian industry association) the organized retail sector is expected to grow at six percent by 2010 and touch $17 billion. Branded goods are increasingly in demand in the prospering Indian market and, as shopping malls rise in the urban areas to show off the latest goods. One of the biggest beneficiary of this retail revolution has been the apparel retailing, which was once strictly a made-to-order business. The evolution of retail channels is being driven by the changing preferences of the Indian consumer whose awareness level of fashion trends, disposable income and consumerism are all high. The growth in the branded wear category can be attributed to the fast paced changes in the retail scenario. Fuelled by the fast growth in retailing and raising incomes, demand for branded apparel is growing as it is pushing brand visibility, brand awareness and brand availability. Demand for branded apparel in the market is growing at a rate of 12-15 per cent per annum. This demand increase is expected to increase the present share of branded apparel in the total apparel market of Rs 78,094 crore (approx $18.1 billion), from 10-12 per cent to around 20 per cent over the next five years. These growth figures are attracting a number of newer brands into the market, both domestic and international.

Market Trends
The Indian apparel market is certainly undergoing a major transformation with branded segment showing an encouraging growth in the past few years. Today, in mens category the share of branded garments is around 33 per cent, while in case of women and kids categories the share is around 22 per cent and 10 per cent, respectively. The menswear segment has got the largest number of apparel brands, followed by kidswear. As against this, the branded womenswear segment - both ethnic and western has a lot of untapped potential. An Images fashion (a local fashion magazine) survey has revealed that womenswear is the fastest growing apparel segment, clocking a growth of around 13 per cent in 2004, while the menswear segment grew by around 12 per cent during the same year. Preference for readymade garments is increasing and this has become inevitable with the rise in urbanization. With the growth of retail industry, which is expected to grow five fold in the next five years, retailing of mens apparel has a huge potential. The arrival of international brands in the already existing cutthroat competitive domestic market shows a clear sign of mens apparel retailing coming in a big way. On the other hand, preference for branded western and Indo-western apparels among the working women is on the rise. The dressing habits are getting refined if not changed specifically among working women. Kids wear market in India has the lowest penetration and offers a huge potential for branded players to exploit this market.

Import Market
Seeing the surge in demand for branded apparel, several international brands have made an entry into India. Several more reputable international apparel brands are in some form of negotiation or said to be eyeing the Indian market. Some of the international apparel brands that have recently created a presence in India include Ermenegildo Zegna, Mango, Marks & Spencer (M&S), DAKS, Hugo Boss etc. Tommy Hilfiger and Guess? are two of the most well known American brands that have recently entered India. Wrangler, Lee, Arrow, Levis, Van Heusen and Dockers are some leading American brands that have been doing business in India for several years under licensing agreements. American brands have the highest recognition among Indian consumers due to the greater awareness and exposure to international media and the huge number of Indians traveling overseas.

Competition
India's clothing retailers generally believe that domestically branded apparel does not really have a fight on its hands with foreign goods. The rationale is that Indian manufacturers and retailers do not have competition from high-end international brands, as these are all in the very high price brackets, and cater to a very limited clientele. However, among international brands, European brands have increased their focus on the Indian market and proving to be American brands closest competition. Italy based Carrera, one of worlds largest producers of jeans, has announced plans to invest huge amounts into India. Along with brands in the premium segment, retailing through large format stores, a host of unbranded apparel consignments from Hong Kong, the Chinese mainland and Thailand enter the Indian grey market. Many such products find their way into multibrand outlets and are also flooding the mom-and-pop stores in major cities. One of the major challenges for the national and international brands within the apparel retailing is the emergence of private labels (retailers own brands). The retailers like Shoppers Stop, Pantaloons, Westside, Lifestyle, and Ebony are coming up with their own set of brands catering to both men and women. Private labels constitute a considerable share of their revenue and it is more remarkable in case of womens wear as women are more price conscious than brand conscious while going for quality and brand loyalty is also very low among them. The Unique Selling Proposition for Private Labels is value for money. They are providing similar quality of apparels like that of the national brands at lower prices.

End Users
With a population of around 1.05 billion and change of consumer preferences overtime, India seems to be a big market for apparel industry. Consumer markets today are witnessing change at a rapidity not seen before and offer new opportunities and challenges. This can be attributed to dramatic shifts in the buying behavior, growing urbanization, emergence of the service sector, changing trends/lifestyles, and most importantly, the increasing power of the retailer as the key link between buyer and seller. Looking at the distribution of various age groups and the demographic shift by 2012 as projected by the Planning Commission of India, there is considerable increase in population in the age group of 15-59 years, which constitutes the major chunk of population. Also looking at the spending behavior in the personal grooming products across different age groups, the age group above 35 years is the major contributors to the apparel sector

Market Access
Traditionally the Indian consumer has always been in awe of imported products. Despite this, international brands command a very small share of the market of the Indian apparel market. Being prohibitively priced, these brands have not been able to generate the kind of demand that was probably expected when they entered the market, even as these are the original brands. So, it is only a very small segment of the Indian consumers who are ready to pay a premium for a brand name, most still look for value for money. One of the main reasons for the high prices of branded wear is said to be high import duties. Import duties are in the range of 40% on garments. This gets added to the price of the product, along with margins, making international brands that much more expensive.

Market Entry
Experts believe that international brands could offer products at lower prices if they begin manufacturing in India. Several American and international apparel brands which have already provided licenses to manufacture in India are market leaders in their segments. Some of the American brands that have a huge market share such as Arrow, Wrangler, Lee are all licensed to Arvind Brands Ltd, a wholly-owned subsidiary of Lalbhai Group flagship Arvind Mills based in Ahmedabad. Arvind Brands is also involved in bringing in the Tommy Hilfiger into India. Similarly, Planet Sports has entered into a licensing agreement with Guess? to market the brand in India. Planet Sports owns the franchising rights for Starbucks on Indonesia as well as several other apparel brands in India. Well known garment manufacturing companies such as Arvind and Planet Sports are ideal partners for international apparel companies are they can take advantage of their already existing retailing networks. Also, leading retailing companies such as Pantaloon and Shoppers Stop are keen to bring in international and especially well known American brands to be sold exclusively in their stores.

Factors that affect the behavior of the Indian consumers:

Mere One or two factors do not determine customer decision to buy garments there are many factors which determine his behavior towards purchasing garments for example in India western clothes have not gained much acceptance among middle and lower middle class .It is still a taboo in some community to wear western clothes ,other problem is the age life cycle for example people who are in their 30s or above prefer to wear traditional Indian clothes rather than western clothes while youngsters prefer to wear young trendy western clothes .Other reason is the economic situation people those who urge to wear western clothes do not wear it because they are costly .Earlier western clothes was a taboo but after opening of economy and increase in outbound and inbound tourist people have changed their attitude towards western clothes there are varied reason it is not only the cultural like culture subculture and social factors like family, role and status that play important role in determining their purchase but also individual factors like age and life cycle, economic situation ,lifestyle and psychological reason like motivation, perception that play an important role

The above diagram explains us the pre purchaser, purchase issue and post issue purchase issue it not only gives consumer perspective but also marketers perspective. Talking about consumer perspective the pre purchase issue determines the sources from which consumer learns about the product he/she may have formed perception about the product from what his friends or relatives may have said to him. Purchase issue determines what purchase tries to say about the consumer it helps in study of consumers cultural, social, psychological and individual factors .The last issue that is the post purchase issue is whether the consumer is satisfied with the product he/she has purchased and whether it has exceed his/her expectation .Talking about marketer perspective how marketer determines about what consumer thinks about the product how he /she perceives it. The pre purchase issue determines how consumers attitude, perception about product are formed. The purchase issue tries to answer question such as store display packaging affect buyers buying decision and the last issue that is the factors which will determine a consumer is satisfied and whether he will buy the product again and wont buy the product of competitors

Research Methodology
For the above objective we underwent a research in the following ways:PRIMARY RESEARCH: Primary research is the basic market research which helps to know the current trends in the market. It helps us to get the real picture of the sector we are researching for. For our primary research we had the tools as: Questionnaire (affixed in the annexure) Brainstorming with customers and shop owners. We had a sample of 50 customers in different areas 8 Shop owners Limitations of the Primary research:1. The main constraint we had was the time constraint which we were not able to overcome as the project was so deep and the time we had was very less as compared to the topic. 2. The other constraint was the sample was from different areas, different age, and mainly different cultural background. 3. The other constraint we had was the information we received from the shop keepers was in the time of full rush in the evening so they were not so much interested in giving the answers and sharing the knowledge with us. 4. The constraint which can be understood by everyone is that the 50 consumers are not the representatives of the total population of India. SECONDARY RESEARCH: The secondary research is basically getting important information from a lot of data stored in the books and different sites. So, in our secondary research we have referred books such as .secondary research enabled us to get a view about the garment industry in India .Also we referred to various garment store magazine. We have taken help of various websites to collect secondary data relating to trends prevailing in the garment industry and we also try to know the buying behaviour of consumer in retail outlet. It also gives us some idea about the influencing factor to consumer at the time of purchase.

Data Analysis
Individual:

Interpretation: From our research we fond out that maximum number of shoppers are etween the age of 15-20 and 21-30. These are the youngsters who buy regularly from the retail outlets. We also found out that the people above the age of 40 years are ot much interested in purchasing activity. Their shopping is done by their chilsderen and grand childeren only. Through our survey we came to know that the childeren below 15 years are also not came to retail outlet themselves for their shopping. Their shopping is done by their parents only. So, from our research we came to a conclusion that the most of the purchase is done by the 15-30 age group people. The people belongs to this age group shop for their childeren and parents.

Interpretation: From our research we found that most of the people who go for shopping have a salary of around less than 5000 rs. Only 31% of the people have a monthly salary of around 5000-15000 rs. We were amazed to see that though India is growing at a mamoth pace the income earners of around 16000-35000 rs. Were very low in comparison to the growth in the market. From this we can conclude that the middle class of the indian economy is the backbone of Indias growth. And we also found out that though the GDP is rising bt there are only 4% people who are earning more than 25000 rs. A month.

Interpretation: We also found out that most of the people from the sample size are interested in buying the branded clothes and not the non branded clothes. 49% of the people want to but the branded clothes from the retail outlets. Other 35% want to but the branded clothes from the huge Malls situated in the city like the Gallops mall, Relance mall, Brand factory etc. This also shows that the standard of living of the Indian consumers is growing day by day. From this data we came to know the main influencing factor for the indian consumer when particularly it comes to garment is status factor. Most of the people purchase branded garments because they want to show of to the society that they belongs to high status.

Interpretation: Most of the consumers i.e. 41% are interested in buying from the retail stores of the company. They also go to stores where multiple brands are sold so that they get an extra option to have a look upon. From the people who are earning a salary of around 15000-35000 rs. Are moostly interested in purchasing from the showrooms of the company so that they always get the original piece. We also found out that those who were interested in going to the factory outlets were the people who were having a salary of less than 5000 rs. Per month. They said that the goods are more cheaper at the factory outlets than the showrooms of the company, so they used to but from there. From our research we come to know that the people who belongs to the group having salary Rs.5000-15000 purchase branded clothes from factory outlet. Because the price of same garment is less in the factory outlet compare to the showroom of same brand. There are very few people from our sample who buy designer clothes and most of them belong to high income group. But in high income group also some people buy the branded clothes. In this income group also the person who want special clothes desiged for him only preferred designer clothes.

Interpretation: We came to know about the shopping habits of the consumers by this research. We were not at all amazed to see that 43% of the total sample visits the garment store montly. 21% of the sample visit the store fortnightly. Out of these a very few consumers really do buy everytime they go there but atleast they go there to have a look at the garments that are been put up. We found only 5% of the people from our sample who were not at all interested in shopping and used to buy clothes only once a year. These people only bought garments when there was any function in the family and else they were not at all interested in buying the clothes. From this data we came to know that when the customer come to shopping mall or retail store to buy a clothes, he always want to see the new designs and new fashions clothes which are not their when he visited the same shopping mall last time. If who found that it is the same stock which he visited last time then many time he visit the store but it is not coneverted into the purchase. Which gives idea that especially when it comes to the graments most of the Indian consumer wants change in trends, in fashions, in materrial, in style. Then only they ae motivate to purchase. Every time buying clothes is not their need. But most of the time it is their want and desire. So, if they found some new fashionable clothes then only they are motivate to purchase those clothes otherwise not because every time it is not their need.

Interpretation: We were amazed to find out that most of the people were buying from the Pantaloons which was almost 24% of the people. The second most Important destination we found out was the pyramid and big bazaar. The consumers say that pyramid has different brands for offering so it is easy to shop from there. The least important we saw was body line and jade blue. It was seen as the least important as it was the costliest of all the stores and also the quality was not that high as the cost was. From our research we came to know that the Indian consumer are not loyal to any particular brand they prefered the store where all the brands are available and then they time which fit in their demand at that point of time. Most of these persons are belong to Section B and Section C of the society. Even from our research we came to know that as Indian consumer form Section B and Section C are not brand loyal so they not hesitate in trying new brand if it fits in their demand.

We were confused by the consumers responses as 43% were use to change their brands frequently where as 43% used to change their brand occasionally. From this we got a inspiration that atleast the 43% of the lot will try to use a new brand launched in the market. There is famous saying that: 20% of the customers give 80% of the revenue

Switching of Brand
14%

43%

Frequently Occasionally Never

43%

From over research we came to know that most of the Indian consumers are not brand loyal. They switch to some other brand very easily. They go to those stores where so many brands are available or if some brand is endorsed by some celebrities then they switch to that brand very easily. Time to time they change their preference according to changes happens in the group in which they belong.

Erudition
o From the market perspective, people of India comprise different segments of consumers, based on class, status, and income. The Indian consumers are value orientation. In India even luxury brands have to design unique pricing strategy. o In India as far as garment sector is concert steel most of the customer belongs to 15 to 40 age group and they buy apparels for their family members like children in their family and older persons in their family. o India is country of festival. During festival time it is tradition in India that people buy new clothes to represent their happiness, and in this kind of purchase they are in search of the product which gives them high status. o Section D people are very brand conscious and many of them go for the designer product because they are always looking for something different which no other person have in their group so they are able to catch everyones attention. o While Section B and Section C people are also think about the quality and durability of the garment. They think that the garment which is more costly is more durable and quality of that garment is also good compare to low price garment. They perceived price as a indicator of quality. Same time they are image conscious. They perceived branded clothes as the status symbol. o In Section B and Section C if they are not afford the branded garments then they go for any established retail outlet. They think that this outlet carries quality product. o In case of working women their mindset while selecting particular brand is different from the housewife. The working woman is more brand conscious compared to the housewife. o As far as garment sector is concern media and celebrities are main influence for the Indian consumer. They always try to purchase those brands which are used by some celebrities. Fashion and Trends changes according to them. Their activities and movements are being closely imitated.

Bibliography
Books:-

Websites:www.google.com