Sales promotion techniques in the clothing retail industry in India

Sales Promotion Techniques Used in the Clothing Retail Industry in India and Challenges Ahead

The Nature of Competition

Buyer-Seller Relationships for Promotional Support in the Clothing Sector

Long-Term Impact of Loyalty Programs on Consumer Purchase Behaviour and Brand Loyalty

Impact of Loyalty Programs on Repeat Purchase Behaviour

Consumers' Perception Regarding Quality, Fashionability, Product Assortment,

Extent and Quality of Customer Service, Convenience of Location,

Payment Options, Featured National Brands and Store Layout

Push and Pull Techniques in Sales Promotion

Personalized vs. Generic Buying

Effectiveness of Different Types of Sales Promotion

Competitive Strategy

Industry Context

Rationale in Support of Selecting Six Exclusive and Multibrand Clothing

Retailers

Chapter 3. Research Design and Methodology

Research Questions and Objectives

Research Approach and Strategy

Research Philosophy

Research Methodology

Exploratory Research

Descriptive Research

Explanatory Research

Inductive vs. Deductive Reasoning

Primary Data Collection

Questionnaire

Secondary Data Collection

Data Analysis

Data Collection Method

Research Setting

Research Participants

The Survey

The Interview

Chapter 4. Analysis of Indian Clothing Retail Sector

Overview

Six Exclusive and Multibrand Players

Current State of Play

Business Strategies

Chapter 5. Primary Research Results

Summary of Interviews

Chapter 6. Conclusion and Recommendations

Conclusion

Recommendations

General and Managerial Challenges

Areas for Future Research

Appendixes

Appendix a. Interview; Questions and Responses

Interview Summary

Statistics

Questionnaire

Abstract

Today, along with other countries such as China and Brazil, India is emerging as an economic powerhouse and is increasingly competing in the international marketplace. As part of this rise in fortunes, India is also experiencing a rapidly growing middle class that is seeking the benefits that this new level of affluence affords them. In this environment, many fashion retailers in India have also experienced new levels of business in terms of domestic sales as well through growing export levels. Not surprisingly, though, some retail clothing stores are performing better than others and the difference appears to relate both to the branding techniques they use as well as the promotional initiatives that have been employed. To identify a series of best practices for the growing retail fashion trade in India today, this study provides a review of the relevant literature and the findings of a series of semi-structured interviews with management staff at six leading retail clothing stores in New Delhi to (a) compare usage across exclusive and multi-brand outlets and (b) to explore the supporting rationale behind sales promotion techniques by examining consumer behaviour. A summary of the research is provided in the concluding chapter together with recommendations, an overview of the challenges ahead for this industry, and directions for future research.

Sales Promotion Techniques Used in the Clothing Retail Industry in India and Challenges Ahead

Chapter 1. Introduction

Today, India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Services are the major source of economic growth, accounting for more than half of India's output with less than one third of its labor force. Slightly more than half of the workforce is in agriculture.

The government has reduced controls on foreign trade and investment. Higher limits on foreign direct investment were permitted in a few key sectors, such as telecommunications; however, tariff spikes in sensitive categories, including agriculture, and incremental progress on economic reforms still hinder foreign access to India's vast and growing market. The economy has posted an average growth rate of more than 7% in the decade since 1997, reducing poverty by about 10 percentage points (India, 2009)

India achieved 8.5% GDP growth in 2006, 9.0% in 2007, and 7.3% in 2008, significantly expanding manufactures through late 2008. India also is capitalizing on its large numbers of well-educated people skilled in the English language to become a major exporter of software services and software workers. Strong growth combined with easy consumer credit, a real estate boom, and fast-rising commodity prices fueled inflation concerns from mid-2006 to August 2008. Rising tax revenues from better tax administration and economic expansion helped New Delhi make progress in reducing its fiscal deficit for three straight years before skyrocketing global commodity prices more than doubled the cost of government energy and fertilizer subsidies. The ballooning subsidies, amidst slowing growth, brought the return of a large fiscal deficit in 2008. In the long run, the huge and growing population is the fundamental social, economic, and environmental problem. (India, 2009)

Dissertation Rationale

Retailing in India is receiving global recognition and attention and this emerging market is witnessing a significant change in its growth and investment pattern. In India, clothing retail accounts for 36% of organised retail business. Readymade clothes accounted for an estimated 20% of domestic clothing sales in 2006 (source: consumer lifestyles in India, Euromonitor International consumer Lifestyles databases, 2006). Indian organised retail industry is poised for growth. Clothing sector in particular has a great opportunity with respect to Indian economy to globalised markets.

Due to seasonal and fashion variations, apparel management has become very crucial function as transformation of design into production and delivery has to be completed before fashion changes in the market. This highlights the importance of sales promotions, which can encourage a customer to buy now rather than in future before the value of apparel goes down after the season ends and prevent the retailer from carrying unnecessary inventory burden.

This study will investigate various sales promotion activities which are followed by clothing retail stores in organised sector and will compare them on various dimensions with imperative need for managers to understand such sales promotions practices and the future challenges they might face. It will also present major findings and insights into consumer buying behaviour.

Six main exclusive and multibrand retail outlets will be selected for studying sales promotion practices. As the purpose of the study is 'exploratory', sample of six is deemed fit as they would represent the population of organized clothing retail outlets in New Delhi- a metropolitan city of India. Being the capital city and commercial hub, it is the perfect place to do such research. However it should also be noted that the nature of activities is not likely to vary across different markets as most of the outlets are a part of chain and their head office typically endorse the budget and plans sales promotional activities to be carried out in promotional calendar for these outlets.

Research Questions

What is the current general status of the retail clothing sector in India today?

What factors are needed to better understand sales promotion techniques currently employed by the retail clothing sector in India?

What are the primary general and managerial challenges currently being experienced and what are the future trends for the retail clothing sector in India?

Aims:

To present a picture of clothing retail sector in India

To explain why there is a need to understand sales promotion practices by the sector

To understand what general and managerial challenges these trends present and to provide recommendations and identify opportunities for improvement.

Objectives of Dissertation.

To compare usage across exclusive and multi-brand outlets.

To explore rationale behind sales promotion techniques by examining consumer behaviour.

Chapter 2. Literature Review

The Nature of Competition

Several studies on apparel retail industry and usage of promotions are reported in the context of developed markets. A brief overview is presented below:

Park, Haesun (2002) studied buyer- seller relationships for promotional support in the apparel sector which is critical for success. The purpose of the study was to define promotional support categories offered to apparel retailers by manufacturers to identify the retailer's perception of the offering frequency and importance of the promotional support, and to investigate the relationship between offering frequency and perception of importance. Results indicated that monetary support was regarded as the most important promotional support.

Liu, Yuping (2007) found out the long-term impact of loyalty programs on consumer purchase behaviour and their loyalty. Using data from a convenience store franchise, the study found out that consumers who were heavy buyers at the beginning of a loyalty program were most likely to claim their qualified rewards, but the program did not prompt them to change their purchase behaviour. In contrast, consumers whose initial patronage levels were low, gradually purchased more and became more loyal to the firm. Thus, there is a need to consider patronage to decide rewards for loyalty programs.

B, Christophe (2006) studied the impact of loyalty programs on Repeat Purchase Behaviour based on the behaviour scan single source panel which has been compared with the store data base. It was studied that loyalty programs did not substantially change market structures. When all companies had loyalty programs, the market was characterized by absence of competitive situation.

H, Karen & a, Gomez (2005) studied Spanish consumer's perception of U.S. apparel speciality retailers' product and services. The study examined consumers store patronage and apparel purchase behaviour, acceptance of U.S. apparel brands, perception of retailers' products and services and perceptions of the impact of foreign retailers on local communities. It found out that the consumer's perception differed regarding quality, fashionability, product assortment, extent and quality of consumer service, convenience of location, payment options national brands and store layout.

Since the 1970s, the global retail clothing industry has experienced intense international competition and major shifts in the pattern of consumer demand. These pressures have had far-reaching implications for the clothing industry in the areas of pricing, design, quality, manufacturing processes and employment (Rath, 2002). According to this author, "In the 1970s, traditional manufacturers, particularly High Street retailers with their own manufacturing capacity, found themselves unable to compete with low wage producers in newly industrialized countries. Standard garments such as suits, rainwear and jeans, where seasonal fashion changes tended to be minimal, were particularly susceptible to competition" (p. 77).

The early 1980s witnessed a 'retail revolution' which was occasioned by demands for more frequent style changes and garments with a high fashion content. Retail clothing stores such as the Burton Group, Sears, Storehouse and Next tried to lure consumers away from relatively cheap mass-marketed clothes by promoting a new coordinated look combining high fashion with value for money, with an accompanying shift towards 'niche marketing' and 'customer differentiation' (Phizacklea, 1990, p. 15). Not surprisingly, clothing manufacturers have been profoundly affected by these changes, which have generated considerable pressure to organize production more flexibly. As retailers moved away from long standardized runs with an emphasis on 'economies of scale' associated with mass production, they insisted that manufacturers provide improvements in design and quality, shorter lead times, smaller batches and frequent style changes (Rath, p. 77).

Buyer-Seller Relationships Used for Promotional Support in the Clothing Sector.

Fashion retailing is constituted by a distinctive set of interconnecting networks of production, promotion, sales, consumption and regulation. These buyer-seller networks are spatially fragmented and exhibit markedly asymmetrical power relations. The fashion industry is positioned within a nexus that connects design, promotion and display with clothing production and retailing. This nexus is highly differentiated; it works itself out in different ways to produce and sustain multiple readings of the fashion industry, which depend on very different geographies of design, clothing production, promotion and retailing (Crewe, 2003; Entwistle, 2000). The retail clothing sector is markedly segmented and is striated along organizational and quality lines (Power & Scott, 2004).

Networks of creativity and design exhibit distinctive spatial structures, centered on four key cities: Paris, Milan, London and New York. The organizational ecology of networks of creativity and design is complex and conventionally conceived as bi-polar, characterized on the one hand by small, fledgling, independent designers, often recent graduates from fashion institutions who attempt to "go it alone" and on the other hand by large organizations such as LVMH and Prada who wield considerable amounts of market power and control (Power & Scott).

Networks of production in the fashion industry are also segmented and striated. There are two dominant spatial fixes at work here. First, spatial agglomeration as illustrated in the case of garment production clusters in New York City, London's East End and the Sentier district in Paris, for example. All three are important centers of production characterized by small, highly flexible and responsive production units employing poorly paid, frequently immigrant labor (Rath, 2002.

Volatile fashion demands and a marked division of labor encouraged manufacturers to seek proximity to fabric suppliers, cutters and ancillary suppliers. The second production spatial fix is more global in orientation. Global supply chains have been a long-established feature of the fashion industry, with Export Processing Zones (particularly in the Far East and, most recently, China) being particularly important sites of garment manufacture. Despite the labor-cost benefits of such overseas production sites, the rapidly changing fashion cycle and, in particular, the requirements for rapid response and "fast fashion" have made women's wear in particular less prone to spatial relocation (Entwistle, 2000). The third fashion network is that associated with promotion, distribution and dissemination. It comprises cultural intermediaries involved in the selection and promotion of fashion (such as fashion editors, photographers, journalists and the like), who exercise control over the dissemination of fashions through the global media (Power & Scott).

Typically the production of fashion has been thought about in terms of the "trickle down" of styles, from catwalk to high street (from designer to mass-market retailer). In part it is clear that this dynamic is still at work, as is evident through the twice-yearly staging of world fashion weeks showcasing the coming season's styles and concepts. It is at such events that the different geographies of fashion unfold and are connected through the nexus of London, Paris, Milan and New York - spaces for the display, performance and enactment of "fashion." These are highly charged and influential meeting grounds for a number of actors who shape fashion consumption, including designers, the collections themselves, supermodels, media pundits, photographers, magazines and the trade press (Power & Scott).

Park,

Haesun (2002)

The Long-Term Impact of Loyalty Programs on Consumer Purchase Behaviour and Their Loyalty.

According to Hofmyer and Rice (2000), in their ongoing efforts to develop comprehensive databases of consumers, whether computer-based or otherwise, "Some marketers attempt to get rid of customers who have a low value to the brand or under-market to them. This could be a serious mistake. Low value to the brand often correlates with low commitment. Among uncommitted customers we often find those who are the heaviest users of the product category, with the highest growth potential for the brand" (pp. 181-182). Generally speaking, while such consumers are uncommitted, they are still involved with the given brand. Consequently Hofmyer and Rice emphasize that, "Brand choice does matter, but they spread their purchases over a range of brands. These are the consumers we would like to be able to identify so that specially tailored marketing programmes for them can be launched" (p. 182).

The importance of identifying consumer brand commitment and involvement in the retail clothing sector is illustrated in Figures __ and __ below.

Figure ____. Clothing retailer's percentage of customers.

Source: Based on pie chart data in Hofmyer & Rice, 2000 at p. 182.

Figure ____. Respective percentage of customers: value to clothing retail store.

Source: Based on pie chart data in Hofmyer & Rice, 2000 at p. 182.

As can be seen from Figures __ and __ above, for committed customers, fully 81% of their spending is dedicated to the preferred retail store; however, these figures also make it abundantly apparent that the major loss that would be experienced by the retail store in terms of share of spending in absolute terms is from those who are uncommitted but for whom retail store choice still matters (Hofmyer & Rice).

According to Lodovico, Lewis, Palmede and Sankhe (2001), "India's current policy regime, at the sector level, has five features that are especially damaging to competition and therefore to the productivity of the country's industries" (p. 28). Approximately 830 products are currently reserved for manufacture by firms below a certain size. Producers of certain types of clothing and textiles, for instance, face limits on their spending for new plants -- limits that protect clothing makers that are below efficient scale. As a result, typical Indian clothing plants have only about 50 machines, compared with more than 500 in a typical Chinese plant. Restrictions on imports of clothing from more productive countries protect the domestic markets of these subscale Indian players (Lodovico et al.).

Furthermore, Indian exports are currently protected as well. Several countries, including the United States, import a guaranteed quota of Indian clothing each year. Not surprisingly, India's share of garment imports in countries without such quotas is much lower than it is in quota countries. As all such quotas are to be removed over the next five years, Indian exports will be highly vulnerable unless the sector can become more productive (Lodovico et al.). In addition, of India's total employment, retail trade accounts for 6% -- four-fifths in formats such as street markets, kiosks, and rural counter stores. Regulations, including limits on foreign direct investment, restrict the spread of more modern formats. According to Lodovico and his colleagues, "India's apparel sector comprises three segments: tailors making custom garments for domestic consumers, manufacturers for the domestic market, and exporters. The law limits the size of domestic apparel manufacturers, thereby restricting this segment's growth. In fact, tailors today account for almost 70% of employment in the industry" (p. 28).

The Impact of Loyalty Programs on Repeat Purchase Behaviour.

Consumer's Perception Regarding Quality, Fashionability, Product Assortment, Extent and Quality of Consumer Service, Convenience of Location, Payment Options, National Brands and Store Layout.

While there is a growing body of research concerning the global retail clothing sector, even as recently as the closing decade of the 20th century, though, there were few available studies concerning the state of marketing in India. The studies that had been conducted generally emphasized the paucity of marketing and customer orientation on the part of Indian organisations. In this regard, Findlay and Paddison (1990) report that by and large, Indian consumers are exploited in a variety of ways such as sale of products that are of inferior quality and at times hazardous, creation of artificial scarcity of essential products through hoarding, improper or rude behaviour toward customers, and so forth. Other researchers have developed data that supports these findings as well. Based on the findings resulting from a survey of 350 Indian consumers, for example, as many as 76% of the respondents believed that most shortages were artificially created by retailers through hoarding. As many as 67% of the respondents felt that 'retailers took little interest in customers and the service provided by them was poor. The respondents' ratings concerning courtesy extended to customers, assistance provided in making a brand choice and handling of complaints were also extremely poor. Likewise, a study of 103 Indian housewives determined that there is complete alienation between the consumer and the marketing system (Findlay & Paddison).

One Indian-based clothing manufacturer that has enjoyed an enormous amount of success and continues to exert significant influence on the international fashion scene is Anokhi, established in 1967 by Faith Singh. Anokhi, which means 'unique', was set up to develop the commercial potential of traditional Rajasthani handicrafts such as hand-block printing and emphasizes its commitment to retaining traditional crafts and social development. Anokhi's clothes first sold in Britain in Liberty of London in 1967 before becoming the founding brand of the British high-street chain Monsoon in the early 1970s. Based on their success, a new company Anokhi Wholesale Limited which opened its first shop in London in 1986 (Jackson et al., p. 72).

As this new company grew, it sought to diversify its range and in 1994 the first EAST collection was launched. This was an attempt to expand the business to attract a younger market, in the words of several interviewees within the company, to move beyond an association with a 'hippie' image. According to their corporate publicity the intention was to 'extend the range of fabrics and design... whilst still retaining some of the ethnic roots, colour and fashion quirkiness that originally drew the Anokhi fans'. EAST emphasize their use of natural fabrics and hand techniques such as embroidery, describing their clothes as 'designed to be individual' for 'women who want something a little exotic but also wearable'. By the late 1990s EAST had re-branded its stores although they continued to sell Anokhi prints alongside the EAST collection in some of their stores and had a wholesale warehouse selling Anokhi-print home furnishings. Anokhi continues to sell through its own shops in Delhi, Mumbai and Jaipur in India as well as through three shops in the U.S. In San Francisco, Boston and Concord, Massachussetts, and shops in Paris and Marbella (Jackson et al.).

Anokhi's clothes are all designed and made in India in their own factory and workshops and through partnerships with locally-based block printing workshops and embroiderers. EAST's clothes are made both in India (where they deal with about a dozen factories in Delhi and Jaipur, including Anokhi, as well as with outworkers such as embroiderers and weavers) and in China and the Far East, which is particularly important for winter fabrics such as knitwear and velvets. While fabric patterns are designed, or commissioned, in Britain they are sent out to be printed in India or the Far East and then sample designs are sent out for manufacture. EAST's designer and product director will visit suppliers about three times a year and their associations with some factories and workers go back many years. EAST's designer stresses the significance of India as an inspiration for her designs and explains that 'the ethnic look is EAST's handwriting as a label' (Jackson et al., p. 72).

This is characterized by their use of natural fibres and hand techniques as well as the styling of the garments themselves. This 'ethnic' styling of the collection is complemented by the organization of fashion shoots in 'exotic' settings such as Morocco or Barbados and the styling of the shops themselves which use Eastern images such as Mughal windows and tropical plants. In contrast to the Anokhi collection, less emphasis is placed upon the origins of EAST's collection as the company strives to establish 'a brand rather than clothes which are made in India or China'. However, EAST maintains its customers' interest in India through a charity fundraising scheme that supports a school for disabled children in Rajasthan. EAST targets mid-range customers and the company advertises in 'mainstream' fashion glossies and women's magazines such as Red and Good Housekeeping.

The case study of EAST and Anokhi provided by Jackson and his colleagues highlights the multidimensional quality of transnationality that is increasingly characterizing the fashion industry today. The founders of Anokhi and EAST have familial connections with India through the transnational biographies of John and Faith Singh which open up an alternative (colonial but anti-imperialist) trajectory to the post-colonial migration history of the founders of many British-Asian companies. Anokhi is now run by the Singhs' son and daughter-in-law who see themselves as 'living between Britain and India' reflecting their own transnational biographies. The other founders of EAST include one who had a colonial childhood in India while others have developed a longstanding relationship with India through their working lives which began as buyers for Monsoon in the late 1960s.

Transnational business practices are organized differently in Anokhi and EAST. While Anokhi is an Indian company which seeks to develop 'partnerships' with international buyers, EAST is a growing British high street name that works with supply networks and factories across India, China and Korea. For both companies clothes are styled through transnational discourse, but these differ in important respects and, at times, are in tension with each other. For Anokhi, their emphasis is on Western fashion styling which used traditional block printed Indian cottons and silks. In the case of EAST, their brand is built upon a more generalized, less specific, reference to the 'exotic' and the 'ethnic' through a discourse of 'difference' (see representative fashion style from recent catalog in Figure __ below) (Jackson et al., p. 73).

Figure ____ 'Shekhavati', EAST spring/summer catalogue 2000.

Source: Jackson et al. At p. 74.

Push and Pull Techniques in Sales Promotion. The results of a recent study by Berthon, Ewing and Napoli (2008) indicate that successful retail clothing stores employ a number of integrated push and pull techniques for promote their brands. These authors also note that, "The marketing literature has long recognized the strategic importance of effective brand management" (Berthon et al., p. 27). The fashion industry, though, is a highly volatile one, and sales promotions techniques must be carefully orchestrated in order to be effective. In this regard, Honeycutt, Ford and Simintras (2003) emphasize that, "When design decisions are haphazard, these variations can push and pull a firm in different and even opposing directions. Conversely, when the decisions are part of a logical process, the design decisions are more likely to be optimal ones" (p. 92). According to Power and Scott (2004), there is a powerful relationship between geographical place and product in the cultural industries that is frequently sufficiently strong that it represents a significant element of firms' successes on wider markets. Place-related markers, indeed, may become brands in themselves that firms can exploit to increase their competitive positions, as exemplified by the cases of Parisian fashions, Jamaican reggae, Danish furniture or Italian shoes. Successful cultural-products agglomerations, as well, are irresistible to talented individuals who flock in from every distant corner in pursuit of professional fulfillment, in a process these authors refer to as "artistic gravitation" (Power & Scott, p. 7). In this regard, these fashion industry analysts emphasize that, "The gravitational forces exerted by agglomerations of creative industries and their associated cohorts of workers are often of considerable power. Artists gather together in creative hubs in London, and the cite pull of New York's fashion industry on clothing designers. Gravitational forces such as these mean that the labor pools of dynamic agglomerations are constantly being replenished by selective inmigration of workers who are already predisposed to high levels of job performance in the local area. Local supplies of relevant skills and worker sensibilities are further augmented by the specialized educational and training institutions that typically spring into being in productive agglomerations (Power & Scott).

These observations suggest that a tight interweaving of place and production system is one of the essential features of the new cultural economy of capitalism. In cultural-products industries, as never before, the wider urban and social environment and the apparatus of production merge together in potent synergistic combinations. Some of the most advanced expressions of this propensity can be observed in great world cities such as New Delhi (Power & Scott). In this regard, Vorhies and Harker (2000) interviewed a number of senior level managers of various consumer goods organizations and report, "Promotion, whether via an advertising or via a personal selling approach was frequently mentioned as extremely important. One marketing director with a medium sized consumer goods firm summed it up well. 'We have to be good at promoting our product both to consumers and to the trade (channel of distribution). it's a sort of push and pull strategy -- you know, create demand in the market and push to the trade. If we fall down on either, we can get hurt'" (quoted in Vorhies & Harker at p. 145).

Personalized vs. Generic Buying. It is reasonable to suggest that some retail clothing customers prefer a personalized approach to their purchases while others may elect to buy what they like based on the competitive pricing schemes used in retail clothing stores. Retail stores that feature personal fashion consultants may experience more high-end sales than their generic counterparts, but such human resource additions to the marketing mix are expensive and must be offset through higher volume sales, by higher mark-ups or featuring more exclusive brands than generic retail store outlets provide, all of which will likely affect the level of sales being generated as well. On the plus side, there are some advantages to the provision of personalized sales including a low amount of wastage, the ability to highlight the brand appeal involved to a specific targeted audience, and a degree of credibility of the product itself. Personalized selling and other aspects of the retail clothing marketing mix are discussed further below.

Effectiveness of Different Types of Sales Promotions. Many retail clothing stores in India are establishing a Web presence to facilitate their international marketing efforts, but others continue to rely on traditional sales promotion techniques such as print advertisements, runway shows, point-of-purchase ads, trade show exhibitions, on-the-spot demonstrations, radio and television advertisements and word-of-mouth referrals. These techniques are congruent with modern marketers who emphasize that advertising is just one part of the overall marketing mix. In this regard, Kitchen and De Pelsmacker (2004) emphasize that these techniques work best in tandem with other sales promotional methods: "Traditionally, the distinct tools of the marketing communications mix are advertising, public relations (PR), sales promotion, direct marketing, personal selling, and over recent years, cyber or internet marketing, and sponsorship. Each component has a specific task to achieve and the message is greatly enhanced if it is reinforced by other tools in the mix" (p. 20).

Definitions and descriptions for the various types of marketing initiatives currently used by retail clothing stores in general and in New Delhi in particular are provided in Table ____ below.

Table __.

Definitions and descriptions of marketing techniques.

Sales Promotional Technique

Definition/Description

Advertising

This is paid, nonpersonal mass communication or direct marketing tools such as flyers, brochures, catalogs, and the like. Sales promotions are marketing events which stimulate purchasing. These include sweepstakes, contests, grand openings, coupons, premiums, samples, price packs, and rebates.

Publicity

This is free, nonpersonal (but sometimes personal) mass communication. It is composed of press releases and publicity stunts that attract media attention and subsequent coverage in news stories and editorials.

Public relations

This area encompasses publicity and also includes personal and nonpersonal communication by company speakers through newsletters, lobbying, and contact with media and citizens.

Personal selling

As the term implies, this is personal communication with a sales agent persuading consumers to buy products and services.

Display advertisements

This term refers to point-of-purchase items such as posters, signs, and other in-store media that direct consumers to buy a particular product.

Source: Soares, 1991, p. 13.

According to this author, "These six promotional mix factors sometimes run independently yet concurrently, which is fine if that is the intention. In an ideal promotion marketing scenario, all six factors would operate in concert" (p. 13).

Some of the key characteristics of each of these marketing communication tools are described further in Table __ below.

Table __.

Key characteristics of marketing communications tools

Advertising

Sales Promotions

Public Relations

Personalized Selling

Direct Marketing

Communications

Ability to deliver a personal message

Ability to reach a large audience

Level of interaction

Credibility given by target audience

Costs

Absolute costs

Cost per contact

Wastage

Size of investment

Control

Ability to target particular audiences

Management's ability to adjust: the deployment of the tool as circumstances change

Source: Kitchen & De Pelsmacker, 2004, p. 21.

Taken together, savvy clothing retailers seek to integrate those components of the marketing mix that best serve their interests and organizational goals. This approach is based on a concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluates the strategic roles of a variety of communications disciplines (for example, general advertising, direct response, sales promotion, and public relations) and combines these disciplines to provide clarity, consistency, and maximum communications impact (Kitchen & De Pelsmacker, 2004, p. 21). Moreover, as Soares emphasizes, truly effective sales promotional initiatives do not necessarily have to cost a lot of money but must help achieve an organization's goals. In this regard, Soares reports that, "A promotional feat is a marketing communication event or system that promotes products in a way that surpasses normal marketing objectives. A promotional feat is excellent advertising, sales promotions, displays, publicity, public relations, and personal selling. It entails excellent use of the communicative aspects of the marketing mix. Excellent means that marketing objectives are met in an outstanding way. This does not mean that the promotional feat is necessarily expensive or artsy, but that it efficiently and very effectively meets marketing objectives" (p. 17).

Competitive Strategy. Based on their interviews with high-end designers for the retail clothing industry, Power and Scott report that, "For high-end fashion designers, the centralized showing of the collections provides another means for observing the creations of their competitors. In most cases, the collections presented on the runways are not the collections that will actually get manufactured. The clothes that are presented are viewed more as theatrical, since the primary objective of the runway is to generate excitement and spark an interest in the designer" (p. 99).

The runway styles demonstrated, though, manage to reflect the general concepts for the collections that are to be sold, such as a certain color, stitch or trim that will be used. In this manner, runway shows provide a so-called "trickle-down" effect in the industry by defining the themes for a given fashion season. Several of the designers interviewed indicated that the fashion shows shape industry trends because they are "directional," "inspirational," and "fashion forward" (quoted in Power & Scott at p. 99). According to Vorhies and Harker (2000), "Business strategy is concerned with setting direction and by matching internal resources and skills with a changing external environment in a way that enhances the performance of the organisation over time. This 'fit' view of strategy was espoused by Michael Porter and industrial organisation economists in the 1980's, but strategy can also be viewed as a 'stretching' process by which organisational resources and competences are leveraged to yield new opportunities, and provide competitive advantage. The firm, thus, achieves competitive advantage by leveraging resources and meeting customer needs more accurately and effectively than the competition and in a manner which competitors find difficult to emulate" (p. 145).

Industry Context. There are a number of difficulties currently confronting clothing manufacturers who try to expand and develop. For instance, moving into fabric sourcing, design, sales and marketing ultimately involves investing capital in stock with no immediate prospect of profit. Under-funding continues to be one of the most intractable problems facing ethnic minority small business owners, and remains a major constraint upon their development. Moreover, local firms tend to deal with numerous buyers placing small orders at short notice, whereas fabric producers often insist on a minimum order and operate tight credit facilities (Rath, 2002). The cultural economy of a country like India is rather different from what is often referred to as the post-fordist cultural economy in the more advanced capitalist countries (Power & Scott).

A number of the poorer and least industrialized states of the Indian Union rely on their urban economic development on tourism to a large degree; as a result, cultural products including fashions and accessories comprise a significant and growing contributor to these tourist-based economies (Power & Scott). For several cities, such as New Delhi, though, cultural products are not only economic assets, but more widely contribute to a process of building and rebuilding territorial identities; however, although a powerful force for development and an important source of both income and identity the unstable and unpredictable nature of consumer demand and tourism markets mean that even small fluctuations and changes can greatly affect this fragile economic development (Power & Scott).

Rationale in Support of Selecting Six Main Exclusive and Multibrand Clothing Retailers.

Six main exclusive and multibrand retail outlets were selected for studying sales promotion practices. As the purpose of the study is 'exploratory,' the sample of six is deemed fit and sufficiently robust as they would represent the population of organized clothing retail outlets in New Delhi, a major metropolitan city of India today. Being the capital city and commercial hub, it is the perfect place to do such research. However it should also be noted that the nature of activities is not likely to vary across different markets as most of the outlets are a part of chain and their head office typically endorse the budget and plans sales promotional activities to be carried out in promotional calendar for these outlets.

3: Research Design & Methodology

Research Questions and Objectives

The main objectives of the research project are:

To compare usage across exclusive and multi-brand outlets

To explore rationale behind sales promotion techniques by examining consumer behaviour

Research Approach and Strategy

Having identified the research topic and done the preliminary literature review the next logical step is to chalk out the route map for the research project. Looking at the research process 'onion' (Saunders et. al., 2003) one can identify various approaches, strategies and data collection methods across the continuum of research philosophy.

Figure 1: Elements across the continuum identified in the Research Process 'onion'

Research Philosophy

Positivism

Realism

Interpretivism

Research Approach

Inductive

Deductive

Research Strategies

Comprehensive survey

Grounded Theory

Data Collection Methods

Sampling

Secondary Data

Observation

Evaluation of the results

Source: adopted from the research process 'onion' by Saunders et. al. (2003)

Although choosing the research philosophy is dependent on the choice of strategic aims and hypotheses of the study, it would be misleading to prefer a single approach to the others. A combination of researches approaches often gives better results as it is often known. It can be illustrated by a following quote: "Not only is it perfectly possible to combine approaches within the same piece of research, but...it is often advantageous to do so" (Saunders et. al., 2003). Since it is perfectly all right to combine approaches, it can be deduced that it is perfectly all right to 'mix and match' different research strategies with the different research approaches.

Six apparel retail outlets will be selected for studying sales promotion practices. As the purpose of the study is 'exploratory', sample of six is deemed fit as they would represent the population of organized apparel retail outlets in New Delhi- a metropolitan city of India. Being the capital city and commercial hub, it is the perfect place to do such research. However it should also be noted that the nature of activities is not likely to vary across different markets as most of the outlets are a part of chain and their head office typically endorse the budget and plans sales promotional activities to be carried out in promotional calendar for these outlets.

Research Methodology

Exploratory Research

This study used an exploratory data collection approach to answer the above-stated research questions. Data collection is part of the knowledge acquisition phase. Knowledge can be collected from many sources (Turban & Aronson, 2001; Sriram, 1997). Data collection is part of the knowledge acquisition phase and knowledge can be collected from many sources (Dulung & Pheng, 2005). In this research project, two knowledge sources were used, specifically academic literature and domain experts (DEs); the academic literature review is described further below; the domain experts were the managerial staff of the six retail clothing stores in New Delhi who were consulted using the semi-structured interview questionnaire which is also described further below (a proforma copy of the instrument is provided at the appendixes).

Inductive Reasoning

Induction vs. Deduction

Another way of describing a research approach is to see if it is inductive or deductive (ibid). Induction, in logic, is a process of reasoning from the particular to the general as opposed to the reverse process of deduction. Induction is based on the assumption that if something is true in a number of observed cases; it is also true in similar cases that we have not observed. The probability that our result is accurate depends on the number of cases observed.

Deduction, in logic, is the form of reasoning by which a specific conclusion is taken to be true from one or more premises (i.e. assumptions). In valid deductive reasoning, the conclusion must be true if all the premises are true. From these definitions, we can see that the proposed dissertation is based on Inductive reasoning. We are going to gather data on six apparel stores and then - by assessing the findings quantitatively - we shall be in a position to induce a trend. This means Inductive reasoning.

Primary Data Collection

Primary Research

The primary research tool that I propose to make use of is the in-depth interview. I plan to utilize Christmas break and the research period after the end of semester to go to India and personally visit the stores in Delhi and collect data from them as I am well acquainted with some of the store managers. There are many types of interviews, the most common being the questionnaire-based interview. In this method a list of questions is sent out to a number of individuals who are allowed to record their answers at their leisure. The difference between this and the in-depth interview is obvious (Denzin & Lincoln, 1998, p. 55).

In the latter, the interviewer is present and alive to the possibility of asking supplementary questions should these be necessary and also to develop the interview in depth in a particular direction as suggested by the moment. We can say that the in-depth interview is much less structured than a questionnaire-based interview. This does not mean, however that the process itself is without structure. With these factors in mind, more integral points can then be raised, considered and investigated. In fact, it will only be through the review process that a number of these factors will be systematically identified and then formulated for the questionnaire (Keats, 2000). The in-depth interview is particularly suited to situations where the number of experts on the subject is small in number and where the information would be expected to vary in quite complex ways from case to case, which is clearly applicable to the present research. The use of both secondary data (discussed further below) and primary data is also highly congruent with a number of social researchers who emphasize the need to incorporate both types of data whenever possible. As Dennis and Harris (2002) point out, "Primary data are information that is being collected for the first time in order to address a specific research problem. This means that it is likely to be directly relevant to the research, unlike secondary data, which may be out of date or collected for a totally different purpose. Ideally, an effective research project should incorporate both primary and secondary data" (p. 39).

Questionnaires

To help guide the interviews with the managerial staff of the six retail clothing stores consulted for this research project, a semi-structured questionnaire was used; a copy of the instrument is provided at the appendixes.

Secondary Data Collection

Secondary Research

Secondary research will form most of the research that I shall undertake in producing this dissertation. That is, I shall make use of existing sources of data that will be listed in the Bibliography. There are a number of types of literature review but I shall use the one that is normally called Exploratory. As the name suggests it is a focused approach that tries to reveal data from existing research that might be relevant to the aims of my research proposal.

Typically secondary data are of the following types:

Documentary - written materials or non-written (media-based) materials

Multiple Source - area based (e.g. journal, country) or time series based

Survey - censuses, continuous and regular survey, or ad-hoc surveys

These types of secondary information can be available in books, journal articles, newspapers & magazines, conference papers, reports, archives, films, television, electronic database, Internet, etc. As Dennis and Harris (2002) emphasize, though, "Finding the information needed to answer a particular research question from secondary data avoids the need to spend time and money on primary research, but the likelihood of an ideal match is remote" (p. 39).

The literature review represented the majority requirement of secondary data. These will be required for furthering and supporting the analysis of findings from primary data. Such data are nowadays mostly available through the Internet. Alternatively, libraries are goods sources of books on leading theories and thinking of experts on the subject. In the present research we will generally lean on secondary data. In this regard, Gratton and Jones (2003) suggest a review of the relevant literature is an essential task in all types of research projects today. According to these authors, "No matter how original you think the research question may be, it is almost certain that your work will be building on the work of others. It is here that the review of such existing work is important. A literature review is the background to the research, where it is important to demonstrate a clear understanding of the relevant theories and concepts, the results of past research into the area, the types of methodologies and research designs employed in such research, and areas where the literature is deficient" (p. 51). To help guide the literature review, Wood and Ellis (2003) provide the following as important outcomes of a well conducted literature review:

It helps describe a topic of interest and refine either research questions or directions in which to look;

It presents a clear description and evaluation of the theories and concepts that have informed research into the topic of interest;

It clarifies the relationship to previous research and highlights where new research may contribute by identifying research possibilities which have been overlooked so far in the literature;

It provides insights into the topic of interest that are both methodological and substantive;

It demonstrates powers of critical analysis by, for instance, exposing taken for granted assumptions underpinning previous research and identifying the possibilities of replacing them with alternative assumptions;

It justifies any new research through a coherent critique of what has gone before and demonstrates why new research is both timely and important.

Data Analysis

The data obtained through the various methods discussed above was quantitative and qualitative. Since the research is mostly positivist in nature, there is tendency to quantification. Elaborate statistical analysis of the available quantitative data was used. Quantitative analysis is more likely to be secondary and exploratory (or descriptive) in nature, summarizing data in the form of charts, tables, percentages and averages. In the event that a survey is carried out, the data obtained would mostly be categorical, hence is likely to be ranked across a scale. This data might be represented in terms of frequency, central tendency or dispersion. It is most likely the research will require the necessity of inferential data analysis.

Qualitative analysis of data is expected to be less frequently used within the research than its quantitative counterpart. Although there might be scope for a certain degree of qualitifying some of the data, an overall quantifying method is likely to be used through the data analysis and interpretation process. This would involve categorisation, 'unitising' data, recognising relationships and developing categories to facilitate it.

Data Collection Method

The data collection method used for this study proceeded in a step-wise fashion, following the selection of the topic, a review of the relevant literature and so forth, proceeding unto completion of the synthesis of the primary and secondary data as shown in Figure ____ below. http://images.questia.com/?fif=b1497843/b1497843g32001.fpx&obj=iip,1.0&wid=300&hei=450&rgn=0.0,0.0,1.00000000,1.00000000&lng=en_US&vtrx=1&cvt=jpeg

Figure ____. The data-collection process.

Source Gratton & Jones, p. 32.

Research Setting

The research settings for the collection of the primary data used in this study were the offices of the six retail clothing stores' managerial staff interviewed.

Research Participants

The research participants consisted of management staff of the six retail clothing stores used for the primary data; these individual consisted of managers, assistant managers and supervisory staff of the respective stores.

Chapter 4. Analysis of Indian Retail Clothing Sector

Overview recent analysis of the Indian retail clothing sector by Singh (2007) found that the Indian textile and clothing industry, as one of the oldest industries of the country, has witnessed several changes in fortune during the post-independence period. Following a quick upturn in the immediate post-independence period until the 1960s, when the dominant industrial policy was that of import substitution, it went into a decline until almost 1985 as market forces were not being allowed to operate and the entire policy had become very restrictive and stifling. The "New Textile Policy" of 1985 managed to relax several licensing requirements, raised the maximum investment limit and generally created a good investment climate; however, in the absence of a general economic resurgence in the country, the textile sector continued to languish until a few years ago. Since then, it has witnessed unprecedented optimism and investment, heralding the vision of a new and glorious era in the Indian textile and clothing sector" (Singh, p. 157).

The Indian clothing industry is one of the largest segments of the Indian economy, as it contributes around 14 per cent of total industrial production, or about 4 per cent of India's gross domestic product, and bout 17 per cent of the gross export earnings with a very low import intensity. The sector directly employees about 35 million people, making it the second largest provider of jobs after agriculture (Singh). During the period from the country's post-independence period through the mid-1980s, India largely maintained a strong inward-looking policy seeking to improve its self-reliance through the use of a wide range of regulatory regimens in an effort to direct the clothing sector. According to Singh, "A strict industrial licensing regime required firms to seek government permission for establishing any new operation or the expansion of existing ones, while several sectors such as garments, knitting etc., were kept restricted for small-scale entrepreneurs, and strict labour laws proved a disincentive for expansion. The New Textile Policy relaxed several licensing requirements, raised the maximum limits on allowable investment and reduced import controls. Businesses were also encouraged to modernize their technological base through the disbursement of cheaper lines of credit" (p. 3).

This trend continued in the closing decade of the 20th century that witnessed the opening up of the Indian economy; however, the clothing sector remained largely stagnant and decaying during the 1990s when several large mills closed and several traditional entrepreneurs moved out of the textile trade. In fact, after a very long time the sector has received a real boost only in the past four-five years as the general economy has substantially improved, leading to a surge in demand. There is an all-around sentiment of tremendous optimism, backed by a surge in production and investment growth. As the investment trends in Table ____ and Figure __ below illustrate, the sanctioned investment (basically, projects in various stages of implementation) has shown almost 100 per cent growth, year-on-year, for the past five years (Singh).

The United States has remained the largest single-country destination for Indian clothing exports, with its share rising from 21% in 1995/96 to 27% in 2005/06. The European Union, with 41%, is a major destination. Among other major destinations are the United Arab Emirates (5.51%), China (3.05%), Canada (2.21%), Bangladesh (2.15%) and Saudi Arabia (2.02%). Compared with 1995 figures, there has not been any major change. The United States and the European Union remain India's major destinations, with the latter country becoming of increasing importance. The major items of export to the United States comprise ready-made garments and made-ups (Singh, p. 162).

Figure ____. Growth in Indian textile and clothing exports.

Source: Singh at p. 162.

Whereas previously domestic textile companies and exporters formed two separate sets of entrepreneurs, that boundary is now fast becoming blurred, as all major domestic players are becoming significant exporters. As purchasing power in the Indian market has increased, due to India's increasing GDP and "demographic dividend," there has been a rapid rise of domestic brands. Practically all of the 20 to 30 top textile and apparel firms have introduced their domestic brands and are aggressively positioning themselves within segments of domestic markets.

As these players become large, several of them are going beyond the national boundaries by purchasing international brands in order to penetrate the First World market as well as to supply the domestic market under that brand name. For example, in the home textile market, Welspun has purchased Christy while GHCL has purchased Dan River and Roseby's, Creative has purchased Portico brands to facilitate entry into the United States and European Union markets while Alok Industries has purchased 8 to 10 European brands. Thus, the earlier difference between domestic manufacturers and exporters is being whittling away; the successful textile player has to constantly look at opportunities in the domestic and export markets (Singh, 2007).

The Players (main six exclusive and multibrand)

The six retail clothing stores located in New Delhi that were used in this study are described in Table __ below.

Table ____.

Retail clothing stores in New Delhi.

Store Name and Web and Street Address

Description

Chhabra 555 (http://www.chhabra555.com/)

Chandni Chowk - Khatra Ashrafi

More than 50 years of experience, tradition and success results from the high quality of the advertising campaigns, outstanding product quality and high sales volume. The professionalism and fundamental dedication of the staff are the success mantras of Chhabra 555.

Chhabra 555 is a leading name in women clothing, specially in Sarees, Lehenga-Choli, Suit Dupatta, and Bridal apparel in hundreds of varieties and colours, suiting the pockets of all segments of society.

The company's Web site enthuses, "Everyone would like to look stylish and trendy! But is it not a secret that trends in fashion today are too expensive and transitory to warrant paying an excessive amount of money for them. Chhabra 555 allows you to enjoy the latest and most fashionable trends in the brand name industry, whatever your budget. Chhabra 555 has hit the nail on the head. 'Wow' is the expression that many of the customers unwittingly exclaim when they walk into the showrooms and are greeted by the sheer breadth of choice that is available to them.

More specifically, it is the delight with which the customers go, "Wow I never knew there was so much choice," or "Wow I didn't realize you could get bridal clothing that looked like that," when they look around a showroom and see all types of Indian clothing, especially bridal apparel like Sarees, Lehengas and Suits in hundreds of varieties and colours, which is their true achievement.

Chhabra 555 is not only a promise, but also a guarantee for fashionable design, wide product choice, perfect fit, undisputed quality, and first class customer service. Chhabra 555 is an authentic and unique brand, which stands not only for product competence, but also for emotions and desires."

These stores follow the tradition of providing the products at most reasonable prices to our customers by selling the products in the retail showroom at the same fixed wholesale prices, which no one else can offer in market. This secures our market share and keeps the customers committed to their brand.