MARKETING MANAGEMENT

ASSIGNMENT 1

AKASH S (3B)
DIVAY SAWHNEY (18B)
HIMANSHU VERMA (22B)

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SWATI JINDAL (49B)

CONTENTS
Topic Page No.
1. Company Overview 3
2. Understanding the Market and Competition
a) Leather Industry: An Overview 4
b) Market Growth & Market Share 4
c) Product Portfolio 5
d) Market Competitors 5
3. STP Analysis
a) Segmentation 7
b) Targeting 8
c) Positioning 9
4. Product Strategy
a) Product Levels & Hierarchy 10
b) Line & Brand Extension 11
c) Hidesign: The Evolution of a Brand 12
5. Tracing Advertising 14
6. Tracking Promotions 18
7. Distribution Strategy 20
8. Pricing Strategy 23
9. Product Life Cycle 26
10. New Product and Development Strategy 28

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 COMPANY OVERVIEW
Hidesign is an Indian high fashion leather house. It started its operations in 1978 as a
small workshop in Auroville in 1978.

Hidesign was set up by Dilip Kapur in 1978 as a “one man artisan shop” which he
operated from his house. It was a kind of homecoming for Hidesign, which Mr Dilip
Kapur started as a hobby when he returned to India to live on a commune after his
education in the US.

From its humble origins in a workshop with one artisan worker, Hidesign has grown
to a business with $22m in revenues in the 2010 fiscal year. The handbag
market grows at 15% annually in India.

In 1990, Hidesign opened the current factory in Pondicherry. During its first decade
of existence, 80% of Hidesign’s customers were foreigners and the company used
foreign distributors to reach them.

Hidesign has grown from its artisan roots to an international brand with over 60
exclusive retail stores and a distribution network across more than 20 countries of
over 2000 stores.

Hidesign can be found at premium international outlets, including John Lewis and
House of Fraser in the UK, Myers and David Jones in Australia, Stuttafords and Edgars
in South Africa, Lifestyle and Shoppers Stop in India and Parkson, Robinsons and
Isetan in Southeast Asia.

Timeline of Important Events:

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 UNDERSTANDING THE MARKET & COMPETITION
Leather Industry in India: An overview

India is the fifth largest exporter of leather goods and accessories in the world.
India’s share in global leather Goods & Accessories segment is 4.84% in 2008. Leather
Goods and accessories present in India bear brand names like Hidesign, Coach, Pierre
Cardin, Yves St Laurent, Etienne Aigner, Geoffery Beene, Harrods, Marks & Spencer,
Liz Caliborne, Guess, Next, Tommy Hilfiger, Kieffer, Waldhausen, Biemen,
Nederinum, Zaldi, Kallquists, Shires, GFS, Millers, Eisers, Weco, Ukal and Decalthon .

Market Growth and Market Share:

After the product launch and by 1982, Hidesign was exporting mainly to the UK,
Australia and Europe. In 1985, John Lewis was the first UK department store to carry
Hidesign’s complete line of products. Hidesign sold primarily to the US, Europe and
the UK in stores such as Selfridges, Liberty and John Lewis.

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Hidesign started selling within India only in 1999. They opened their first store in
Bangalore. It entered as Indian incomes rose and the growing middle-class became
more fashion-conscious. In 2000, domestic sales were only 6 per cent of total
revenues. Over the next nine years it succeeded in creating 46 stores, all but two of
which are operated by the company itself. 

Hidesign went in for a major expansion in India in 2002-2003. The fact that the global
market for luxury goods was facing a slowdown while the Indian fashion market was
buoyant and that there were no major competitors in the same category at the top
end of market, prompted Hidesign to exploit the huge opportunity.

The Indian leather market is expected to be around Rs 1000 crore and the branded
market is around 120 crore. Hidesign is India's premier leather goods company that
makes leather bags, briefcases and wallets. This 90 crore brand is the Indian brand
that features in the premium international stores worldwide.

India has become a booming market for Hidesign. Last year, India accounted for 50
per cent of revenues. The company has increasingly focused on “dynamic Asian
countries” for future growth.

However, the strongest growth has come from the women’s section, which now
accounts for 50 per cent of the turnover.

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Product Portfolio

The portfolio of the Hidesign products consists of luxury leather goods such as:

All products are designed and manufactured by the company using genuine leather.

Market Competitors

The Indian leather goods market is still hugely unorganised. There are a number of
individual shops selling products made by individual craftsmen. Talking about the
competitors nationally, there is regional competition, but no national competitors.

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Internationally, the competition comes from upper-middle Italian brands. Bally,
Bottega Veneta, Coach, Fendi, Gucci, Lancel, Longchamp are some of the competitors
in local as well as international market.

STP ANALYSIS
Segmentation

Segmentation by Hidesign:

a) Psychographic segmentation:
It is an example of segmentation based on the lifestyle of its consumers. The
brand is targeted at people who value style and elegance in a classical sense,
that is, those who want to make personal statement of their style and value
the evolved nature of their preference. Thus they are able to target a wide
range of customers ranging from young college students to successful
business professionals.

b) Demographic Segmentation:
Gender Segmentation: Hidesign started out as a very strong brand for men –
more rational, rugged and product feature oriented. When they first launched
in India, 80 per cent of the turnover came from the men’s products. The brand
worked extremely well for professionals and executives, both at work and
leisure.
However, over the years, it had acquired a touch of femininity- a quality of
touch and feel with strong aesthetic appeal that evoked a sense of beauty
within the individual.

Generation, Income, Social Class Segmentation: The brand is aimed at

young upper class people and it was priced accordingly. A typical Hidesign
retail customer was well-educated and typically was a service industry
executive. 53% were age 25-35, 30% 35-45, and 10% over the age of 45. It is
also represented in the pie chart below. One thing that can be inferred from
this data is that Hidesign needs to work on its image in the eyes of the young
crowd, which sometimes perceives Hidesign as a classy but non trendy brand.
Over the past couple of years Hidesign has taken many initiatives in this

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 regard such as the Pink campaign and offering products at slightly lesser cost
to lure the young prospective customer.

Their laptop bags have been a surprising hit, which has been attributed to the
increasing numbers of working Indian women who are seeking functionality
and fashion. The target market consists of people belonging to high income
households, who travel frequently, often internationally; and insists on high
quality products.
Hidesign has created a new brand, Holii, aimed at the mid-to-mass market
segments, with products costing a third less than Hidesign’s existing wares.

Targeting
The target market consists of people belonging to high income households, who
travel frequently, often internationally; and insists on high quality products.

Further, their customer would be anyone who is career-driven, globalised,

cosmopolitan, who is well read and well travelled. Hidesign targets customers who
are primarily in the 25-35 age-group; internationally it would be around 30-40 year
old.

The high per capita income, coupled with a brand-conscious lifestyle, ensures
ongoing demand and tremendous growth prospects for international brands such as
Hidesign.

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Positioning
The name Hidesign was formed by merging the words “hide” and “design”. The
brand was initially promoted in travel and fashion magazine. But the brand was
initially perceived as a boring one in the Indian market. Different campaigns and
advertising went into changing this notion.

The brand identity is more luxury oriented and more feminine. However, the core
values are still the same –that we are ecological and natural our manufacturing
process, and still believe in high craftsmanship in modern designing. 

The new brand image is more driven by luxury and exclusivity. The idea is to provide
more and more fashion through latest designs. We have found that men buy
products that are modern and have more functionality. On the other hand, women
are more brand conscious and buy to look beautiful. We have experimented with
different kinds of colours in leather. Colours like red or white symbolise class among
women, unlike men’s accessories, where black and brown still sells.

Hidesign started out as a brand which appealed to the rebels but over the course of
time it has evolved into a brand which reflects a culture of innovation, globalisation
and hard work.

Hidesign has never tried to outdo its competitors in terms of the sheer volume of
advertising but instead it focuses on reaching the right customers with the right
value. They believe that their products possess a certain uniqueness that helps them
stand apart from the crowd and they have always tried to focus on this aspect in
their marketing strategies.

Even though Hidesign is a domestic brand, it has positioned itself in the minds of
Indian consumers as an international brand. They are viewed as the most expensive
leather bags in the country.

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 PRODUCT STRATEGY
PRODUCT LEVELS AND HIERARCHY

The product hierarchy stretches from basic needs to particular items that
satisfy those needs. The six levels of hierarchy are:

 Item
 Brand
 Product Type
 Product Line
 Product Class
 Product Family
 Need Family

Product Hierarchy Model

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PRODUCT LEVEL

Hidesign Gucci Coach

Core Benefit Carry stuff Carry stuff Carry stuff
Basic Product Non rigid container Non rigid Non rigid container
with strap container with with strap
strap
Expected Reasonably priced, Status Symbol, Inexpensive,
Product Durable, Trendy Quality, Everyday use hand
bags Exclusivity bags
Augmented Extended Warranty, Lifetime warranty Extended Warranty
Product Solid brass buckles , UV Ray
and fittings protection
Potential Anti-slash, Anti-dip Eco-friendly, Light weight, Sturdy
Product Synthetic leather,
proximity sensor

LINE EXTENSION

Hidesign is trying out new product lines. In 2006, to keep its products fresh, Hidesign
hired former Armani designer Alberto Ciaschini, who is based in Milan.

The company was planning to design a new top-end product line of evening bags for
ladies.

BRAND EXTENSION

In 2005, Hidesign created a new brand of bags and accessories for its stores, Salsa,
aimed at the 16-25 age group and priced much lower than the premium bags which
sold for $125-$250 in overseas markets.

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Hidesign partnered with Future Group, India’s largest retailer, to launch Holii, an
affordable line of bags with louder colours and ornate trimmings that is geared
towards young consumers.

The plan here is to create a new brand, Holii, aimed at the mid-to-mass market
segments, with products costing a third less than Hidesign’s existing wares.

Hidesign to set up a joint venture with Italy’s Braccialini to launch the brand in India.
They will set up a new production line at one of its manufacturing units to make
Braccialini bags and other leather items. The Braccialini products are very colourful.

Hidesign: The Evolution of a Brand

During its initial stages, Hidesign as a brand resembled the personality of its
President and Founder Mr. Dilip Kapoor. During his college days, Mr. Kapoor was
actively involved with the Cultural Revolution that was sweeping the world in the
1970’s. He participated in the anti-Vietnam war demonstrations and led a life that
reflected the rebellious culture of the youth of that period. The design of the
products reflected the spirit of the Cultural Revolution happening in US at that time.
The designs appealed to people who were, in some way , extreme radicals and who
rebelled against the standard conservative norms of society. According to Mr.
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Kapoor, the leather bags that he crafted "sold themselves due to the uniqueness of
design". No marketing efforts were undertaken to sell the products at that time.

The Cultural Revolution and youth rebelliousness were slowly fading. The product
therefore also needed to migrate from boutiques, non-commercial stores and street
markets to departmental stores. One such opportunity came when John Lewis from
UK bought the product. The buyer himself was, in some ways, rebellious in thinking
and approach and the designs matched the philosophical orientation of the buyer.
This relationship led to a strong commercial partnership and the up-market John
Lewis departmental stores became preferred customers. By 2002, Hidesign
products occupied about 60 per cent of the briefcase and luggage sections of stores.

The brand, as conceptualised by Mr. Kapoor, reflected a culture of innovation,

globalisation and hard work. It was an "edgy" brand -- at the cutting edge of change.
Over the years, it moved from being a "rebel" to being a "cutting edge" brand. It was
not run by rules, but by ethics and values and represented a concern for the
environment. It was a hard working person's accessory -- a work oriented brand. It
was not a "party" brand, and certainly not a glamorous one. It was a brand that was
stylish in a classy and elegant way; not showy or dowdy -- never a cheap -- look
brand. The design and manufacturing processes ensured this character and
personality of the brand consciously and seriously.

Now the brand focuses on its traditional manufacturing process to differentiate it

from the crowd. This is also illustrated in the latest advertising campaigns of the
brand. The advertisement shown on the next page goes with statement:

“We still make leather bags using the same process Italians abandoned years ago.
Quitters”

The superiority of Hidesign products is largely due to the uniqueness of the design
and manufacturing process. The company focuses on its traditional methods of
manufacturing and tanning. The traditional methods reflects a care for the
craftsmen, craftsmanship and the environment using processes which had long since
disappeared from the modern leather industry.

Each Hidesign product goes through a natural vegetable tanning process -- one that
is more time-consuming than chrome tanning, but that leaves every product with a
rich beautiful patina which gets better with time. Unlike chrome tanning, vegetable

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tanning has also been proven to have minimal effect on the environment. It is non-
toxic and safe for those with sensitive skin.

The brand goes one step further to keep its leather goods natural, using only solid
brass fittings for buckles and buttons, which gives each product that special rugged
'HIDESIGN' look.

One other differentiating feature of Hidesign’s bags was the use of solid-brass
fittings, unlike many other bags which opted for plated-metal fittings.

It is the exquisite craftsmanship that goes into products which sets Hidesign apart
from other leather goods retailers. Their products are constructed, not just stitched,
with constant input from their design teams in Europe and Asia. The attention to
detail that they give to each and every HIDESIGN product, whether it is a leather
jacket or a wallet, is unparalleled.

TRACING ADVERTISING
All the adverting campaigns of Hidesign are done in-house. To spread the exclusivity
and preciousness of the product, they have certain photographers who understand
what luxury products are all about. That is why they have their advertisement shoots
done in Paris to portray the values of the brand. All their campaigns show the
warmth and sensuousness of the brand.

To begin with Hidesign used only print media for advertisements. This was done as a
result of the nature of the target market and retail coverage. During the year 2001-
02, advertisements focussed more on the product and its features. During the next
year there was a change in the focus though. Media choice was decided based on
different parameters, including the match between the target audience and the
profile of readership of the print media.

In addition to mass media advertisements, merchandising and display in the retail

environment was another important means to communicate the brand value. Care
was taken to ensure that the products displayed in the retail shops reflected the
premium image of the brand. Specially designed display racks were made available in
multi-brand outlets. In 2001, ‘new look’ boutiques were made, which were a
combination of stone, glass, wood and brass. All the existing showrooms were also
standardised in a similar pattern.

Hidesign has its presence on the Social Networking sites as well. It has used the
overwhelming response on such sites to design its promotional campaigns.

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Facebook – Hidesign has a facebook page which is used to advertise the Brand. At
present it has 11,322 likes by facebook users. In celebration of World Environment
Day it launched the “Art of Reuse” contest, an Eco-Project in partnership with
Femina, to support a cause very close to their heart, where they are giving people all
the means to help them create their first “Green leather creation”.

Sample Advertisement 1

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Sample Advertisement 2

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TRACKING PROMOTIONS

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As a requirement to study the promotional strategy of Hidesign, we made a visit to
Hidesign Exclusive showroom and Shoppers stop showroom at DLF, Ambience Mall,
New Delhi. Also, to know more about the different brands of Hidesign, we visited
Holii and Ayesha showroom.

Hidesign was the first one to introduce luxury retailing in India in terms of leather
products.

Hidesign is a brand in itself and most of the product offerings come under this brand
name only. Hidesign has created new brand of products, Salsa, Ayesha and Holii.
These three brands have their own showrooms of products and don’t feature in the
exclusive Hidesign store.

A recent promotional campaign by Hidesign was launched in two parts. The first part
was released in September 2010 and the second part was unveiled in October to
coincide with the festive season. Developed by Contract, Chennai, the new
advertising focused on giving the brand a more “cool' image. The second segment of
the campaign, focussed on promoting Hidesign's products as a "gifting option".

Promotional Campaigns of Hidesign can be categorised into:

Discount: Hidesign exclusive retail showroom hasn’t offered any discounts from the
past two years. But, their franchisees and factory outlets do offer a discount of 10-
20% once in six months.

On the other hand, Shoppers stop offers 10-20% discount on Hidesign products at
the end of season.

Holii showroom, also, offers a discount of 10-30% on a range of its products.

Exhibits: Hidesign has campaigned for Breast cancer and has manufactured bags in
the signature Pink colour for spreading the awareness. In anticipation of Breast
Cancer Awareness Month, Hidesign launches the Pink Ribbon collection - a Hot Pink
line of accessories to help further the cause.

With 20% of the sales directed to raising awareness and prevention, this Limited
Edition from the Fall / Winter collection was available at all Hidesign stores
nationwide and online through October and November, last year. The styles range
from signature Hidesign handbags, to cross bodies, travel bags and wallets.

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According to the store manager, there was a significant spurt in customers visiting
the showrooms which helped in creating brand awareness. Further, this helped in
increasing the sales.

Premiums and Gifts: Hidesign offers vanity kits as reward to those customers who
purchase items worth more than ` 5,000. A vanity kit consists of toiletries and accessories.

Contests: To mark the World Environment Day, Hidesign, in partnership with Femina,
organises a contest named “The Art of Reuse”.

The Art of Reuse is an eco-project which gives a contestant all the means to make
their first “Green leather creation” and let them enter it into a step contest on
Facebook where the top three entries can win Hidesign Gift Vouchers of different
denominations.

This, further, helps to create the brand awareness among different classes of
population.

When we visited the Hidesign store, top three entries were on display at suitable
location.

In addition to above sales promotions events, press conferences by the President of

the company and other company achievements receive wide coverage in the press.

Impact:

Most of the above schemes were quite successful in the past and has helped to
increase the sales of the products.The store managers informed that the average sale
increased by 10-15% on account of these sales promotions.

For example- Shoppers stop personnel told that when no discounts were offered 3-4
customers out of 10 who visited the store actually purchased the product. But, when
10-20% discounts were offered, on an average 5-6 customers out of 10 actually
purchased the product.

DISTRIBUTION STRATEGY
Hidesign has 65 exclusive stores internationally and distribution network in 23
countries. The brand enjoys a considerable presence in markets like South America,
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the Middle-East and Russia. It has placed its products in over 2,000 stores globally.
Malls, high streets and airports are some of the preferred locations for opening
Hidesign outlets.

In the early 1980s, Hidesign entered the UK through local distributors. However,
initially, the leather and luggage shops in the UK were not keen on stocking an Indian
brand. And, the 'Made in India' tag didn't help either.
Initially, Hidesign was an exclusively export-oriented outfit, fulfilling orders from
European and American distributors. It concentrated on taking small orders and
fulfilling them to high quality standards and delivering on time. This proved crucial in
building its reputation among high-end overseas customers and in gaining their initial
goodwill. 

In its overseas markets, Hidesign graduated from a firm fulfilling export contracts to

selling through distributors and then through high-fashion retail chains like
Selfridges. In later years, it even started wholly-owned concept stores.

On the other hand, in India, Hidesign started its distribution operations by opening
wholly-owned stores (in 2000). This was followed by tie-ups with retail chains like
Westside in 2003 and subsequently Shoppers' Stop, Landmark, etc. In late 2005, it
announced plans to open exclusive franchised outlets. The Indian market too proved
receptive to the high quality leather goods of Hidesign and the business boomed.
Ever since Hidesign began retailing in India, they have registered a 60% annual
growth every year.

Hidesign went in for a major expansion in India in 2002-2003. The fact that the global
market for luxury goods was facing a slowdown while the Indian fashion market was
buoyant and that there were no major competitors in the same category, prompted
Hidesign to exploit the huge opportunity.

In India, Hidesign had two distinct advantages. One, Indian economy was still
growing at 6-7% and two, there was no competition in leather at the top end of the
market.
The difference between India operations and operations abroad is that in India it is
largely led by exclusive stores, while internationally they do it through distributors
who understand the local market. It is difficult to manage international stores sitting
here in India.

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The Indian leather goods market is still hugely unorganised. There are a number of
individual shops selling products made by individual craftsmen. There is regional
competition, but no national competitors.

 Hidesign bags were typically sold overseas in a price range between $125 and $200.
This represented a markup of 550-600% over factory cost. Typically, the wholesale
price for a bag was 85% over the landed costs in a foreign country, and a standard
retail markup was in the vicinity of 240-250%.

In 2000, Hidesign decided to begin opening its own chain of exclusive boutiques
across India. The promoters tried looking for a distributor but they couldn’t find one
that was appropriate. Modern retailing was just starting in India, so Hidesign decided
to open our own store in Pondicherry.

It was successful, so they opened stores in Bangalore and Mumbai and kept growing.
Hidesign bags were also offered at premium Indian retailers such as Shoppers Stop,
The Bombay Store, and Westside, though the highest-volume outlet was a national
chain of book stores.

The distribution network followed by Hidesign

Hidesign Transporters/ Dealers

Manufacturer Warehouses
s

Franchisees

Exclusive
Retail Outlets

Recent Strategies of expansion

The company recently entered into an agreement to pick up 35 per cent stake in its
retail business in Russia — Hidesign LLC — for $200,000 on a partnership basis.

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Till now, Hidesign LLC was only a franchise for the Russian market and managed by
its distributor. The infusion of capital would enable Hidesign to further accelerate its
retail footprint across key markets in Russia, including St. Petersburg, from the 5
stores it has now in Moscow.

To enhance its brand presence overseas, Hidesign will open an exclusive brand store
at the Hong Kong airport and another in Kuala Lumpur this year. The brand's market
presence has grown in South Africa as well, and the company is in talks with five
leading malls to set up its exclusive shops.

PRICING STRATEGY
Niche Market Characteristics and Price Behaviour

In general, niche markets have a few important characteristics that make their
prices behave differently than in larger markets. By definition, niche markets are
relatively small markets, but this does not mean that niche markets are unimportant
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or unprofitable. In this sense, even relatively small niche markets can be important.
The fact that a relatively small number of persons may make up the customers for a
niche market product and that these customers are usually willing to pay above, and
sometimes far above, average market prices for the product is a phenomenon in
economics called “inelastic demand.” Inelastic demand means that people buying
the product are not very sensitive to price, or that they will buy about the same
amount of the product even as the price changes.

The less flexibility there is in the market to price (i.e. the number of people
buying the product doesn’t change much as prices go up and down, meaning
demand for the product is inelastic), the more set the market is, so something aside
from price must be used to “grow” the market. It also means that if competitors
enter the same market with the same or a similar product, prices for the product
might drop considerably. Having an inelastic product means that on the upside,
people purchasing the product may be willing to pay a premium. However, on the
downside, in order to sell a greater quantity, the price would have to decrease
dramatically, or the market would need to be expanded.

Potential Strategies

As niche markets tend to exhibit inelastic demand, Hidesign which is engaged

in niche marketing need to determine a strategy to keep competitors from entering
the market, or they must continue to increase demand for their product if they wish
to keep prices and sales stable and/or growing. There are numerous examples of
niche markets that started small, with just a few producers and high price premiums,
and then became more main stream as additional suppliers entered the market,
eventually driving the price (or price premium) down.

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 Demand curve for Fashion Goods 1
Many items from fashion houses have seen the price premium over
conventional produce decrease as more companies enter the market. Understanding
this phenomenon is important as a producer examines the potential profitability of a
new market or niche product, as it is important to understand that the price of the
product will likely change over time, and that strategies to continue to differentiate
their niche product from the products of other suppliers must be considered in
advance. If the product catches on and more customers enter the market
simultaneously with new suppliers, then prices and quantities may remain stable.

Potential Strategies

First Strategy: A first strategy to consider is maintaining current customers by

developing customer loyalty. This is often done though product differentiation.
Patents, trademarks, geographical indication and branding are strategies that should
be used by Hidesign to maintain their price premiums as new competitors enter the
market; however, the costs of these strategies usually make them infeasible for small
producers. Small producers can achieve similar results through less costly options
such as unique production practices (i.e. natural, organic, humane), location of
production (i.e. local, state, region), story of the product or producer, etc. These
strategies help to define the product as unique, and communicate to customers that
even though there are close substitute products, they are not the same. Ambathur
leather is an example of a animal product that is defined by both location and
production practice.

Second Strategy: A second strategy is to innovate to stay ahead of the curve by

continuing to find new products that are valued by a niche market. This may mean
looking for new varieties of leather a different production practice, or different
packaging/processing. To pursue this strategy, it is easier to find new products that
an existing customer base will value, which will eliminate the marketing costs
associated with finding a new customer base.

Third Strategy: A third potential strategy is to grow the market at a rate that keeps it
ahead of new entrants. This involves finding new customers that want the product. If
the awareness of the product spreads and new customers are found for the product,
the new demand may keep pace with the new supply and prices would be stable.
However, it must be noted that even with new customers, their pace of consumption
must meet or exceed increasing supplies or else prices and/or price premiums will
still decrease.

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Conclusions

Niche markets by definition have unique characteristics that can affect the
price of the product and price premiums over time. Under good conditions this
means that the prices can be quite high, but small changes in the supply of the
product can cause much larger decreases in price. So over time, as more suppliers
enter the market, price premiums usually go down. Strategies that Hidesign might
consider include product differentiation, which helps a product to maintain its
unique quality even as other suppliers enter the market, growing the market by
continuing to find new customers at an equal or greater rate than the supply
expands, so that price premiums can still be earned, and continuing to innovate to
develop products niche markets may find compelling. Regardless of the strategies or
ideas that are pursued, it is important to look at potential profitability and how
different assumptions affect the profitability of the product.

PRODUCT LIFE CYCLE

Apparel and other consumer products can be classified by the length of their life
cycles. Basic products such as T-shirts and blue jeans are sold for years with few style
changes. Businesses selling basic products can count on a long product life cycle with
the same customers buying multiple units of the same product at once or over time.

The life cycle curves of basic, fashion, and fad products are pictured below:

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 Life Cycle for Basic and Fashion Product

Fashion product life cycles last a shorter time than basic product life cycles. By
definition, fashion is a style of the time. A large number of people adopt a style at a
particular time. When it is no longer adopted by many, a fashion product life cycle
ends. Fashion products have a steep decline once they reach their highest sales.

The fad has the shortest life cycle. It is typically a style that is adopted by a particular
sub-culture or younger demographic group for a short period of time.

The overall sales of basic products are the highest of the three types of products, and
their life cycles are generally the longest.

Apparel products often have a fashion dimension, even if it is just colour. As fashion
features increase in a product, the life cycle will decrease. Therefore, if you are
designing a fashion product, you will want to have multiple products in line for
introduction as each fashion product's cycle runs its course.

Hidesign build their lines to include basic, fashion, and fad products in order to
maximize sales. For example, with a jacket line, a business may have four styles that
have classic styling and colours and are always in the line. Four additional styles may
be modified every two years to include silhouette, length, and collar changes based
on the current fashion. One or two short-cycle fashion or fad styles based on
breaking trends may be introduced once or twice a year. Styles that a popular
celebrity or sports hero is wearing are examples of fashion and fad styles.

We can also look at the number of fashion product adopters against time.
Five types of consumers emerge at each of the life cycle stages

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 Fashion Adoption Consumer Types

Different marketing strategies should be used to reach each of these consumer

types.

 Fashion innovators adopt a new product first. They are interested in

innovative and unique features. Marketing and promotion should emphasize
the newness and distinctive features of the product.
 Fashion opinion leaders (celebrities, magazines, early adopters) are the next
most likely adopters of a fashion product. They copy the fashion innovators
and change the product into a popular style. The product is produced by more
companies and is sold at more retail outlets.
 At the peak of its popularity, a fashion product is adopted by the masses.
Marketing is through mass merchandisers and advertising to broad audiences.
 As its popularity fades, the fashion product is often marked for clearance, to
invite the bargain hunters and consumers, the late adopters and laggards,
who are slow to recognize and adopt a fashionable style.

NEW PRODUCT DEVELOPMENT STRATEGY

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Hidesign caters mainly to women with high disposable income (esp. A1, A2 and B1 in
SEC classification) and who have a need for exclusive products. The decision to stop
catering to men was taken in 1989 because the profitability in catering to female
populace was more than three times when compared to catering to fashion needs of
men. But the times have changed since then with men becoming more fashion
conscious; we live in the age of ‘metrosexual’ men who don’t mind spending extra
money for high quality fashion accessories.

Thus a need for catering to new segment arises and consequently a need for a new
product is felt. The best strategy for Hidesign is to start creating a new men’s line by
producing leather jackets for men and it is the best bet because of two reasons viz.

 Hidesign has had prior experience, before 1989, in creating leather jackets.
The experience gained in the past years can be leveraged in creating high
quality new jacket.
 Leather jackets have historically been associated with bike-riders and cowboys
from the ‘wild west’ and it generally perceived to be masculine. Hence this
product targets not only men with fashion conscious but also the other end of
the spectrum as well.

Taking a cue from major fashion houses, Hidesign should hire a well-known fashion
designer who with his/her invaluable inputs would help Hidesign in creating the
jackets. One of the fashion designers that hidesign should target is Sabyasachi
Mukherjee as he is one of the few Indian designers who is globally renowned. His
name being attached to Hidesign’s products would only add to its exclusivity factor
and to it being niche and eventually would lead to the increase in the brand value of
the jacket.

Packaging

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The jackets need to be packaged in superior quality bags, which add to the high class,
the brand stands for. The bags can be made from eco friendly material. A high quality
packaging material will ensure safety on a ride.

Brand Name

ARIES – “Greek God of War”

A leather jacket symbolises energy and enthusiasm. It showcases a feeling of

sturdiness. ARIES as a brand name will go well with the section of society looking to
portray that image. It will give them a feeling of fighting it out in this present
competitive world and emerging a true winner.

Pricing Strategy

Driving cost out of a product by accepting adequate quality may work for a mass-
market brand, but luxury branding is built on a foundation of quality, even if it means
a higher price. A mediocre high-priced product will never achieve luxury status. Thus,
the pricing strategy to be followed in case of men’s jackets would be similar to that
followed by Hidesign in case of bags. It has to be ensured that the jackets are made
out of the best raw material available in the market.

If some people aren't complaining about the prices, it's said, they aren't high enough.
That may be true for general market products and services, but luxury products are,
at least in part, defined by their higher price. Still, trust is key to luxury brands, and if
the prices are perceived to be artificially high the strategy will backfire.

Bargain sales and discounts are antithetical to the concept of a luxury brand. If a
quality product is worth the price, then how can that price be reduced without
sacrificing quality?

Promotion Strategy

High-volume mass advertising and hard-sell verbiage may work for general products,
but for luxury brands, image ads and targeted publicity convey the right message.

The leather jackets would be easy to promote because they would be of unusual
superior quality. Reading about the leather jackets in upscale fashion magazines
would not only add to the perception of luxury, it would make customers subtly
endorse the brand as no advertisement would.

Target Market Description

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The two different types of products, targeting high end - class A1, A2 and B1
customers, would be offered are:

 Men's Suede Jacket

A wide range of Men's Suede Jackets manufactured using high grade raw material to
ensure quality can be produced. Designed as per latest market trends, the range
would be made available in different colors, sizes and patterns. Moreover, the team
of quality controllers would check and test the entire range on several parameters to
ensure zero defect.

 Men's Biker Jacket

The clients would be able to avail from, a wide assortment of Men's Biker Jackets
that would be known for their elegant design and sophisticated look. Fabricated
using premium grade raw material, jackets would be developed using quality raw
material.

These jackets are targeted towards fashion conscious, high income group men who
prefer various kinds of smart color combinations, designs and attractive patterns.

Tentative Plan for Marketing the product in Delhi

Brand Awareness

Hidesign is an Indian high fashion leather house. It has established itself as a maker
of handbags and wallets. At present it has 15 stores in Delhi. In order to market its
new product, the right strategy would be to promote the new brand ARIES as a part
of the already existing Hidesign Brand. This way the company would be able to cash
in on the name earned by Hidesign.

Advertising

Advertisements in high end fashion magazines like Fashion week and Cosmpolitan
will help reach the target audience in the easiest possible way. It would also create
an image of high end product.

Online advertising through networking portals like Face book and twitter can also be
employed in order to reach out to the younger population.

Also, the product launch should be done at a big scale.

The new product will be made available in the existing stores using 1/4 th of the
showroom space. This needs to be done in order to test the market for the new
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 product. Out of the 15 stores, new product could be made available in the limited
number of stores, one in each region i.e.

 STUDIO INDIA
CONNAUGHT PLACE 

 SHOPPERS STOP
RAJOURI, SHIVAJI PLACE, 
DISTRICT CENTER, 
RAJA GARDEN

 AMBI MALL
AMBIENCE MALL 
NELSON MANDELA MARG 
VASANT KUNJ 

 WESTSIDE
DELHI ALANKAR, 
FEROZE SHAH GANDHI ROAD, 
LAJPAT NAGAR - III

In order to cover the entire Delhi market and make the shops within the reach of
most of the target segment, shops are selected in different regions of Delhi. One of
the shops that has been chosen is centrally located in CP, other in North-West Delhi
i.e. Rajouri. And since the maximum market share for Hidesign at present comes
from South Delhi, so two locations are chosen, one is the high end ambience mall in
Vasant Kunj and the other in the Lajpat Nagar Market.

Depending upon the sales registered in 6 months, the number of stores displaying
and selling the new product could be increased. If the market response to the new
product beats the expectation, Hidesign can come up with new showrooms
exclusively for the new product i.e. the leather jackets.

Women’s Collection

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Men’s Collection
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 References
 Official Company Website: www. hidesign.com
 www.sabyasachi.com
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 http://www.business-standard.com/india/news/qa-dilip-kapur-
founderpresident-hidesign/406606/
 http://articles.economictimes.indiatimes.com/keyword/hidesign
 http://www.facebook.com/hidesign?sk=app_2309869772
 http://www.inonit.in/categories/vprofile/919
 http://www.chennaibest.com/cityresources/Fashion_and_Beauty/hi
design.asp

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