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A very intriguing package

Group no: 7
Members:
Nandhini K
Kiruthika M S
Lalith Kumar R
Vijay Prasanth R
Pradeep kumar.v
Karthik E
(UNIVERSITY OF MADRAS)

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 The company was incorporated on 27/01/1968 as
a private limited company under the name Aristo Plast
Pvt. Ltd., and commenced its activities by taking on job
work in plastic moulding. The Company became a
public limited company on 15/03/ 1973.
 The name of the company was changed to V.I.P.
Industries Ltd., with effect from 16th June 1981.
 Industry : Plastics - Plastic & Plastic Products

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 VIP industry has sway for over two decades in the organized
luggage market.
 Customers perceives value for money.

 Alfa is sold at much lower price. Alfa (VIP’s economically price

brand) sells 1.5 lakh pieces a month.
 Market Research shows that an average Indian family pulls out
the suitcases merely for a outstation travel a few times a year.
 VIP has a wide range of market segment starting from Rs 295
to Rs 6000 a piece.

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 The brand becoming generic to the category and local brands eating
into the share of the company.
 It entered a price war with the unorganized sector.
 VIP was very dominant in the mid- segment, it had no presence in
the luxury segment.
 It failed to create barriers for the competitors.
 It concentrated only on hard luggage.
 Its advertisement for premium brand was not effective.
 While VIP entered luxury segment, Samsonite entered the middle
segment.

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 People are not exactly moving to premium bags , but are
moving to branded bags for sure.
 We find that the growth in airline travel and the sale of
branded luggage sales are directly interlinked.
 Correlation between sales data and travel data is almost
0.95

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 STRENGTHS
Weakness
>Brand Name.
>High inventory & Transportation cost .
>Asia’s no.1 and 2nd largest luggage >No proper distribution channels.
manufacturer.
>No CRM
>Market leader (60%mkt share)
>Failed to create barriers to enter the
Diversified product range (suitcase- market.
furniture).

Threats
Opportunities
>Low demand.
>Tie-ups with European players (carlton
& delsey ). >Industry Competitions.
>Carlton is the worlds 4’th largest >Price war Cannibalization that took
manufacturer. place between V.I.P's premium range
and the samsonite.

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 Formidable competitor-1997
 Established its presence in the luxury segment of the market. Vip-
dominant in mid-segment
 Garnered a market share of about 35% in a short period of time.
 Samsonite meanwhile also wanted to enter the mid- segment (
800- 2000 range).It launched the brand “American Tourister” to
enter this segment posing a major threat to the market leader.
 Samsonite -international contemporary look -appealed to the new
generation than VIP which was not perceived as a vibrant brand.

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 To counter the threat of Samsonite, VIP launched
Elanza and Caprese range of premium luggage.
 Elanza(Rs 3250) -made available through
select dealers only, in order to maintain its
premium image.
 VIP set the price so high to preempt
Samsonite’s entry in the super-premium
segment of the market.

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 Steady economic growth propelled the travel sector.
 Convenience and variety gained prime importance.

 Care for aesthetics increased importance for soft luggage.

 People no longer used same suitcase for all occasions.

Hence luggage has transformed from merely a functional product

to a fashion or life style product.

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 2011-VIP ushers in the four wheeling revolution in india with the launch of
its "360 wheeling" range.
 2010-VIP Introduces "Superlite" – lightweight bags that enable you travel
easier and pack more without the fear of paying excess baggage fees.
 2009-VIP launches water, dirt and stain resistant bags with “Teflon”.
 2008-VIP introduces the first of its kind business bags “Coupe” to keep your
professional and personal luggage separately.
 2006-VIP launches Aura – a tribute to the modern Indian woman who
prefers to step out in style.
 2004-VIP brings in the concept of single stem trolley for exceptional control
and effortless maneuvering.

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 MARKETS

EXISTING NEW

PRODUCT
EXISTING

MARKET PENITRATION
P By offering economic price
DEVELOPMENT
R Introduction of new brands like
brand and durable products.
Mantra & Skybags.
O
D
U
C MARKET
Diversification
T DEVELOPMENT
NEW

Diversified in to manufacturing
S Acquired Carlton to enter
furnitures(Moderna) and health
global market and Alliance
care.
with Delsey.

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 For targeting the premium end of the market.
 Targeted younger consumers through style by offering
printed and color bags.
 Helped to enter European markets.
1)This buyout provided VIP with a lucrative passage into the
high-growth European market.
2)Carlton's strong brand and VIP's low manufacturing costs
provide VIP with an edge over its competitors.

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 Delsey -international brand from France- for
premium brand.
 This alliance makes VIP the sole manufacturer for the
Delsey’s global hard luggage range.
 "We want to become the hard luggage factory for the
world," said Dilip Piramal.
 Combination of high end technology from Delsey and
low manufacturing cost from India.

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 Delsey was not willing to spend on the brand’s
advertising in India.
 Delsey needed a more strategic involvement to
establish its premium positioning. So they broke their
ties with VIP and forged an alliance with Beauty
Concepts.
 Consumers are moving towards branded luggage
which reflects their lifestyle.

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 Changed from “Kal Bhi, Aaj
Bhi” campaign to “Bye-Bye”
campaign.
 Used “Happy journey” as the
base line.
 Shahid Kapoor and John
Abraham became the brand
ambassador.

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Marketing mix

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Carlton - international
brand - premium segment.
Skybags - stylish product
- youth consumers.
Alfa – Aristocrat - value
for money - low end
people.
Mantra – ladies.
Buddy- children.

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 Price ranges from Rs.850 to Rs.15,000.
 Alfa ranges from Rs.850 to Rs.3800.
 Aristocrat ranges from Rs.2600 to Rs.6700.
 Skybags ranges from Rs.680 to Rs.7200.
 Carlton ranges from Rs.5000 to Rs.14,950.

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 Retail outlets like The Carlton Store, VIP Lounges and
VIP Industries store.
 More than 600 exclusive stores.
 Lifestyle stores, hypermarkets, army canteens and
wholesale networks.

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 Print media.
 Electronic media.
 VIP Industries' 'Happy Journey' BTL campaign.
 Offered discounts.

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 MARKET SHARE

HIGH LOW

M
A
R
H
I STAR ?
K
G
E Skybags Caprese
T H
G
Leather bags
R
O
W
T
H
L
O Cash cow Dog
W Alfa Odyssey

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 Net sales(in crores)

900

800

700

600
YEARS

500

400

300

200

100

0
2009 2010 2011 2012 2013
net sales(in crores) 564.3 669.72 758.43 860.26 875.03

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 sales sharing proportion
furniture others
4% 0%

Hard luggage item

30%

Soft luggage
66%

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 Launched a eco-friendly bag called Acura(niche
segmentation).
 Going to launch new polycarbonate range under VIP
and Skybags.
 Looking forward to launch a range of luggage for
women called Diva.These are lightweight bags
specially designed for women travellers.
 As a market leader VIP is looking to enter more niche
markets.

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 THE TUMBLE TEST
50 REVOLUTIONS & OBSTACLES : This test is been carried by tumbling the
bag in a tumbler at 50 cycles in a loaded condition.
 THE WHEEL TEST
32 KMS:Wheel is been carried for 32 kms in a loaded condition to check the wear
and tear for wheels.
 THE LOCK TEST
PUSH & RELEASE CYCLES : We check the locks durability by operating the
lock for 15000 cycles in one go continuously.
 THE DROP TEST
Dropping the bag 5 times on the ground at all corners and sides.

 THE HANDLE TEST

3500 TIMES : Tested by giving jerks to the handle for 3500 times in a loaded
condition.
 THE ZIPPER TEST
15000 TIMES, FORCE APPLIED TO SLIDERS & ZIPPERS : Force is applied
to sliders and zippers to test the strength of zippers and pullers.

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 Along with growth in airline travel, international
exposure and a lot of innovative work with branded
goods has helped the industry grow.
 Brand repositioning efforts has paid off by helping VIP
to retain its leadership position.
 By keeping in pace with the change in need of the
people with highly innovative work and consistency in
quality VIP will be maintaining its outstanding
familiarity.
 As the consumer evolved, the product has also evolved.

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 Keeping in pace with the taste of the
customer will help to maintain its
longstanding familiarity “kal bhi… aaj bhi…
kal bhi” and long and “happy journey”.

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