Literature review The term apparel or garment would include ready-made garments as well as knitwear/hosiery.

The garment industry is classified as those establishments which cut and/ or stitch/ make up garments out of woven or knitted fabrics without being involved in the manufacture of fabrics. All these garments can be broadly classified into 3 categories. Formals, Casuals and Designers. Formal range of garments refers of those dresses, which are worn at offices and other sober places of visit. Casual garments refer to that breed of dresses whose styles are generally nonconformist with normal features of oversized pockets, pockets with flaps, larger front buttons, loose fit etc. Designer garments refer to the line of dresses which are worn at parties, joyous gathering such as weddings, receptions where general code of dress is not specified and has limited editions of a sampling cater to a small segment, Denim garments come under the category of semi-formal wear. Levis Strauss made the first pair of jeans using tent canvas to help miners stash away enough gold into various pockets of hurriedly sewn up trousers, during the gold rush in California in 1890s. Today every second person, man or women wear jeans. Comfort is the key word and that has contributed to a boom in the acceptability of jeans as part of daily life so much so, that it has nearly come to be accepted as an executive, formal wear too. Denim has become so popular among the people that a Tamil Filmmaker has named a film as Jeans, starring former Miss World, Aishwarya Rai. Denim dresses over the years have revealed a capability to transcend age and gender barriers. Boys and girls, men and women, the young and the old have come to hold the view this comfort and fashion. Travelling in a pair of jeans and T-shirt or sports-neck shirt is the definition of travelling comfortably dressed. The denim fabric, accessories and trims like collars, zips, buttons, sewing thread, fusible/non fusible linings etc. technology and the skilled workers for making these garments are available in India at competitive prices. Apart from the availability of raw material, various support services like garment dyeing/ bleaching/finishing units, packing material manufacturers etc. are also available within India. In Indian denim market, there is a premium segment which is catered mainly by foreign brands like Wrangler, Pepe, Lees and Levis (all are American). However, this premium segment accounts for a mere 3 percent, in volumes terms, of the total jeans market, pegged at approximately 25 million pairs per annum. The standard and economy segments catered by

Indian brands like Flying Machine, killer, Texas, Sunnex, New Port (Aravind Mills), Trigger (KG Denim), Ruf and Tuf (tailor jeans by Aravind Mills occupy rest of the market). The total jeans market in India is estimated at about Rs. 2855 crores in which the premium segment accounts for Rs. 275 crores to 300 crores, standard segment of around Rs. 840 crores, and the rest by the unorganized economy segment. Predictably, the economy segment enjoys the largest market share by volume-nearly-70 per cent. There is fast growing trend in the standard and economy segments than the premium segment. The semi-formal segment is growing at a rate of 35 percent per annum for the last few years, and will continue to grow at this rate. There is a growing trend towards soft jeans made with cellulose rayon and Tencel blended denim garments.

In the long run, households with no income eventually have no consumption (wealth is depleted). While the debate surrounding beliefs about how income and consumption are related is interesting, in this study a very particular school of thought is adopted. In particular, we are considering the latent demand for designer jeans across the states or union territories and cities of India. The smallest cities have few inhabitants.( The concept of latent demand is rather subtle. The term latent typically refers to something that is dormant, not observable, or not yet realized. Demand is the notion of an economic quantity that a target population or market requires under different assumptions of price, quality, and distribution, among other factors. Latent demand, therefore, is commonly defined by economists as the industry earnings of a market when that market becomes accessible and attractive to serve by competing firms. It is a measure, therefore, of potential industry earnings (P.I.E.) or total revenues (not profit) if India is served in an efficient manner. It is typically expressed as the total revenues potentially extracted by firms. The market is defined at a given level in the value chain. There can be latent demand at the retail level, at the wholesale level, the manufacturing level, and the raw materials level (the P.I.E. of higher levels of the value chain being always smaller than the P.I.E. of levels at lower levels of the same value chain, assuming all levels maintain minimum profitability). The latent demand for designer jeans in India is not actual or historic sales. Nor is latent demand future sales. In fact, latent demand can be either lower or higher than actual sales if a market is inefficient (i.e., not representative of relatively competitive levels). Inefficiencies arise from a number of factors, including the lack of international openness, cultural barriers to consumption, regulations, and

cartel-like behavior on the part of firms. In general, however, latent demand is typically larger than actual sales in a market.) I assume that all of these cities fall along a "long-run" aggregate consumption function. This long-run function applies despite some of these states or union territories having wealth; current income dominates the latent demand for designer jeans. So, latent demand in the long-run has a zero intercept. However, I allow different propensities to consume (including being on consumption functions with differing slopes, which can account for differences in industrial organization, and end-user preferences). The latent demand for Premium jeans in India is estimated to be $6,238.3 million in 2011. The distribution of the latent demand (or potential industry earnings) in India, however, is not evenly distributed across regions. Maharashtra is the largest market with $848.2 million or 13.60 percent, followed by Uttar Pradesh with $723.5 million or 11.60 percent, and then Gujarat with $513.2 million or 8.23 percent of the latent demand in India. In essence, if firms target these top 3 regions, they cover some 33.43 percent of the latent demand for premium jeans in India. It is interesting to see that as compared to big states, Metro cities like Mumbai, Delhi has has big potential market for premium jeans. The reason being this is, income per capita in this region is higher than other Indian states. In recent survey it is found that income per capita in Delhi is highest in India. Studies reveals that if we talk about potential market of premium jeans in terms of cities than Mumbai (13,260,463 population) and Delhi (12,068,136 population) are the two top cities that should be the target. Out of top 100 potential cities in India, Mumbai has latent potential of about 248.320 million USD(about 3.98% of Indian market share) and Delhi has latent potential of about 168.391 million USD(about 2.70% of Indian market share). Study also reveals that latent demand in India is continuously increasing since 2006 and it is observed that up to 2016 it will reach up to 9,909.148 million USD from 3,882.541 million USD.

The Latent Demand for Designer Jeans: 2006 - 2016

Year India Market

US $ mln

______________________________________________________________________ ___________________________________ 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 3,882.541 4,269.999 4,697.675 5,169.916 5,687.947 6,238.297 6,839.980 7,501.454 8,228.841 9,028.911 9,909.148

______________________________________________________________________ ___________________________________ Source: Philip M. Parker, INSEAD, copyright 2010, www.icongrouponline.com A short cycle manufacturing environment that is applied to an individual customers preference is called the mass customization manufacturing environment (burns & Bryant 2002). Mass customization uses information tech., flexible processes and organizational structure to deliver a wide range of products and services that meet specific needs of individual customer (silveria, borenstein & fogliatto 2001; radar 1999). Several researchers described different approaches to customization. Silveria, Borenstein & Fogliatto(2001) combined these framework to 8 generic levels of mass customization ranging from pure customization to pure standardization . Silverias highest level, design, encompasses collaborative projects with manufacturing and delivering of products according to individual customer preference. Fabrication, the second level, refers to manufacturing of customer tailored products based on basic predefined designs. Next, assembly deals with customization through arranging modular components through arranging modular components into different configuration according to the customer orders. In the middle three levels, mass customization is accomplished by adding custom work or services to standard

products, or customized distributing and packaging of standard products. At the lowest level of customization. Mass customization occurs after delivery by using products for different functions or situations. (Silveria, Borenstein & Fogliatto 2001) There is limited empirical research on consumer acceptance of mass customization. Huffman and Kahn(1998) evaluated consumer ability and interest in selecting among extensive product choices They concluded that consumer were more satisfied with selecting attributes within a choice set then having either extensive or few choices. Piller and Muller (2004) reviewed the consumer were curious about the customization concept, realized and benefits and were willing to pay a premium for those benefits (Pillar and Muller 2004). This text is devoted to better understanding of the term consumer benefits, perceptions and attitudes and how they influence development of successful marketing strategies. The basic philosophy required for successful marketing-the importance of satisfying customers-may be simple but its implementation is complex. It requires that company do the following: 1. 2. 3. 4. Define consumer needs Identify consumer segments that have these needs Position new products or reposition existing products to meet these needs Where possible, try to satisfy consumer needs at the individual level through interactive

technologies 5. 6. 7. Develop marketing strategies to communicate and deliver product benefit. Evaluate these strategies for their effectiveness Ensure that such strategies do not deceive or mislead consumer and are implemented in a

socially responsible manner Underlying these strategic requirements is the importance of obtaining information on consumer needs, consumer perceptions of new and existing brands, attitudes towards these brands, intensions to buy and past purchasing behavior. Luxury/Premium is no stranger to India. The erstwhile maharajas and princes led a life of opulent splendor. The only way to be a part of the elite was to be born into it. The lifestyle was also associated with hunting, polo and other games of the rich. New money could never get into this circuit. The aspiration was always there. But the princes operated in a different league altogether. The era of the self-made millionaire was yet to arrive. So small possessions or copied fashion designs with a few gewgaws thrown in, became the height of luxury. An achiever of the

1970s could only get by with a good foam mattress no Omega, Rolex or BMWs. This trend saw a shift, a gradual one, in the 1980s. Luxury began creeping into upper class homes through small things and symbols. The color TV came in, the humble pen was elevated to a Parker, successful self-made people began to be featured in magazines. The concept of luxury as a reward for achievement gained acceptance, though royalty and the aristocracy continued to remain the benchmark of the elite. The real change came in the 1990s when more people started making more money. There was a sudden explosion of colour and things and objet D'arts began to appear. In order to gain access to luxury and class one could just go out and charge it. What contributed to this shift? India opened up to the world. The liberalization process brought more than high economic growth rates. It showed the people what was possible. In the process, it has altered mindsets. The IT revolution, and the consequent demand for Indian brainpower, has created a whole new breed of wealthy global Indians. At the other end, an increasingly open economy has created new business opportunities, which has resulted in a slew of new, extremely successful first generation businessmen. They are millionaires. They spend. They sport Vertu mobiles. But they may not even be comfortable with English. All of a sudden, wealth is no longer the preserve of the elite.

QUALITATIVE INSIGHTS 1. According to a study by American Express, Inside the Affluent Space , the mindset of the Indian consumer is a desire to prove that Ive Made It. This can be related to the luxury categorization which is based on the fact that luxury is seen as a reward, both for achievements in life as well as showcasing these achievements to others. 2. The Luxury Marketing Council Worldwide has established a chapter in India, with the aim of promoting luxury in India. Their task will also be to build synergy between various luxury brands interested in India by way of sharing of consumer insights as well as best practices. 3. Even the Asian region is not uniform in its preference for luxury in terms of need fulfillment .Therefore; it becomes important to delineate the needs of the Indian consumer from the other Asian regions to target them better. This agenda gains importance because many Indians look at acquiring luxury from places such as Hong Kong, Tokyo, China etc. Eg. It is interesting to note that Singapore consumers are more of connoisseurs compared to Hong Kong consumers who want Talk-Value from their luxury goods.

4. Hindustan Times has been at the forefront of driving the luxury revolution in India by organizing two Indian Luxury Conferences in the last 4 years. To add to it, it also brings out a monthly supplement of luxury goods available in India, thereby creating awareness for the luxury brands.

Quantitative Insights 1. As far as quantitative estimates are concerned, there will be 135,000 millionaires (in US dollar terms) in India by 2009. 2. The affluent market is set to grow at a rate of 13% in India, and by 2009, there will be approximately 1.1 million affluent here. 3. The wealth potential of Indias affluent was to the tune of US$ 203 billion as of 2005. With income levels going up, customers prepared to buy such brands are growing in numbers. According to an NCAER Household Income Survey, in 2001-02, there were 20,000 families in India with annual incomes of more than Rs 1 crore. By 2005, the number increased to 53,000. By 2010, India will have some 1, 40,000 crorepatis. Retail management company KSA Technopak estimates the market for luxury and high-end clothing in India at Rs 1,000 crore and for accessories at another Rs 1,000 crore. It is not just the big Indian cities like Delhi, Mumbai and Bangalore where the rich are located. A small town like Nagpur had nine millionaires in 1995-1996. By 2001, that figure increased to 425, with a growth rate of 91 percent. A high end luxury brand like Ermenegildo Zegna, whose customers include Bill Clinton, Pierce Brosnan, Shah Rukh Khan and Al Pacino, recently made a presentation in Ludhiana and Jalandhar. Source: www.pallasweb.com Increased product knowledge and brand awareness are translating into greater consumer confidence an important catalyst for luxury consumption in a fast-emerging market. Luxury brands are now following the Indian consumer, expanding their sales operations. According to a study by the Discovery division of Mumbai based O&M advertising; India and China are beginning to contribute in a big way to the global market for luxury products. This global market was estimated at approximately $69.4 billion in 2003 and is expected to grow 50 per cent to reach $140 billion by 2010. A Technopak study puts the Indian luxury market at around $444 million. According to the World Wealth Report 2005 published by Capgemini and Merrill

Lynch, the so-called BRIC nations - Brazil, Russia, India and China continued to emerge as an economic force and create wealth in the process. In fact, China is expected to slow down and its neighbours are likely to feel the pinch. One exception is India, qualifies the report. In terms of numbers, O&M says there were 61,000 high networth individuals (HNIs) in India in 2003. The World Wealth Report puts HNI growth in India at 14.6 per cent per annum, nearly double the global rate.This is likely to be much higher. More than the numbers, it's the attitude that has changed. Indian consumers have shown a pronounced desire to consume. Instead of making yearly trips abroad to shop. It is, thus, the emergence of mass affluence combined with aspirational mindsets and lifestyles that are helping to stimulate consumer demand. The rapid growth of the Indian middle class means that a larger number of consumers are able to afford luxury goods than ever before. How & why Luxury market is Booming in INDIA? o India ranked first for the fifth time, on the Global Consumer Confidence Index June Indians were judged the worlds most optimistic consumers, with high financial

2007, conducted by The Nielsen Company. o

confidence about their income for the next 12 months. o Higher disposable incomes, easy availability of credit and high exposure to media and

brands has increased average propensity to consume considerably over the years. o India ranked first for the third consecutive year, on the Global Retail Development Index 2007, conducted by AT Kearney across 30 emerging economies. India is ranked as the most preferred retail destination for international investors. o Modern retailing outlets are increasingly matching up to global standards and witnessing

intense competition. o o Organized retail sector is estimated to grow by 400%, in value terms, by 2007-08. Increasing number of domestic and international players are setting up base and

expanding their business to tap the burgeoning market. o Fastest Growing Economy is one of the biggest reason for the growth in Indian luxury Two-thirds of Indias population is under 35 years of age and more than 60% of the

market: o

population will be in the working age group (15-60) till year 2050.

The median age of 23 years, opposed to the world median age of 33, sets the emerging India is home to about 20% of the global population under 25 years of age.

young India apart o