MARKETING MIX OF BATA INDIA
Product Mix:
Bata offers both footwear as well as accessories such as bags, belts, socks and other footwear care solutions.
Bata Footwear:
Bata has always positioned itself as a shoe store for the entire family. It’s brands are directed at all age groups and across different price bands.
This is the basic collection of Bata India which mainly comprises of the classic black leather look and mainly consists of men’s footwear. This is also the collection that is synonymous with Bata. The Bata school shoes under this collection are a big hit among children in India. This collection promises the quality of Bata leather footwear at affordable prices and is targeted at low and middle income groups. Price range: Rs 399- Rs 999
This is the Bata collection that is aimed at the stylish office goer and mainly comprises of formal office wear. Both slip-ons as well as lace-ups are available in the textured leather and finished leather varieties. Price Range: Rs 1199 – Rs 2899
The Ambassador collection is positioned as the premium formal footwear of Bata. This is a collection of formal leather shoes ranging from classic tie-ups, brogues to leather court shoes. Price Range: Rs 2999-3599
The company's Hush Puppies range of footwear in the premium segment is on an aggressive growth path and has plans to reach new heights with more exclusive brand outlets in all major metros across India. These exclusive brand outlets offer the complete brand experience and offer the entire Hush Puppies product range to the customers. The brand has also expanded its presence in large departmental stores via Shop-In-Shop and is also available with most of the retail stores of Bata and its dealers, across the metros, making it one of the fastest growing casual footwear brands in India. Price Range: Rs 3000 – Rs 4500
Scholl is a premier brand with extensive experience of offering footwear solutions that focus on the well being and health benefits to the customer without compromising on the style quotient. Price Range: Rs 1399- Rs 1599
This brand marries comfort and style with a host of young fresh designs being introduced in the last couple of years. Price Range: Rs 399 – Rs 1399
The Bubble-gummers brand of Bata serves infant and children in the 1-09 age groups. Bubble-gummer brand has provided a wide variety of international designs and shoes for the untapped market of young children at affordable price. Price Range: Rs 199 – Rs 999
This is the brand of footwear targeted at working women. Bata offers international, stylish and contemporary deigns at affordable prices. The Marie Claire brand is aimed at making a shift in the buying decision of Indian women from the unorganized sector to the organized retail sector. Price Range: Rs 1000 – Rs 1999
North Star is sports-casual international footwear and accessories brand for the youth market. It aims to provide footwear and accessories that follow world fashion trends and the versatility of today’s youth. The 2 categories of the North Star brand, divided according to the target segment are Teen & Youth segment. Price Range: Rs 450 – Rs 1899
The Power brand is the sports shoes brand of Bata and provides footwear solutions to the following categories: Running, Outdoor, Training, football and Court shoes. This is one of Bata’s oldest brands, established in 1971 and is recently undergoing an image make-over to compete with the likes of Reebok, Adidas and Nike. Price Range: Rs 399- Rs 1999
Sparx is the brand of casual footwear that aims to imbibe the spirit of youthfulness. Bata aims to target the 15-21 age group with this brand. This brand comes with trendy designs and vibrant colours and is inspired from street wear. Price Range: Rs 499 – Rs 1099
Weinbrenner is the speciality outdoor brand of Bata. This brand is meant to take on the dominance of woodland in the rugged trekking and outdoor footwear segment by offering contemporary styles at affordable prices. Price Range: Rs 749 - Rs 2499
This is a new brand introduced recently by Bata targeting women who are young in spirit and at heart. This product line has vibrant rainbow and sunshine colours and is made with EVA or plastic for long lasting durability.
This yet another brand tat Bata has launched to make a meaningful foray into the organized retail sector of womens footwear. This is a collection that boasts of premium international and contemporary designs that are aimed at urban women in India. Price Range: Rs 1799 –Rs 4999
In order to attain volume growth, Bata launched this new brand of fashionable footwear for both men and women in 2010 offering both style and comfort with high quality. Bata has also launched exclusive Foot-In stores to launch this new brand especially in tier 2 and tier 3 cities. Price Range: Rs 299 – Rs 1699
Bata Accessories:
A complete line of quality accessories ranging from handbags, purses, belts and more for both men and women is provided by Bata. They generally cater to the different customer segments. The price range for the Ladies bags and purchase varies from Rs. 499-3000. There is a general profit margin of 55-60% on those products. Also they have Men’s purse Rs. 799-2000. Along with this they have belts and socks as accessories which have the price range of Rs. 599-899 and Rs. 99-299 respectively. These accessories generally consume total of 4% of their total stocks. They are relatively new in dealing with this segment exclusively. But according to the retailer the products are famous among the consumers. And these products have typically less restocking time as compared to others.
Marketing Channels:
Bata has broadly divided its business into three categories:
Retail Business
Bata has traditionally operated a zero level channel and vertical marketing system in its retail business. Under this strategy majority of Bata’s retail outlets are company owned and thus Bata had complete control over the value delivery chain to the customer. Here the producer (Bata), Distributor (Bata Warehouses) and the retailer (Company owned stores) acted as a single unified system. This model was adopted to eliminate any conflicts that may arise from independent members pursuing their own objectives. Bata thus achieved economies through size, spatial convenience, bargaining power (that enabled them to keep their product prices under control) and elimination of duplicated services. However as Bata grew, it has felt the need to increase its retail presence and market reach in this competitive environment and thus in 2009 decided to roll out franchise modelled stores as well. The franchise model, today, can be seen mostly in tier 2 and tier 3 cities extending the market share of Bata.
Bata continues with its strategy of retail expansion with the opening of more than 100 new Bata Stores and renovating existing stores. The growth of retail business with penetration into newer markets and expansion in existing markets shall be the focus for Bata going forward. Bata has opened 146 new large format stores with an average floor size of not less than 3,000 sq.ft and has remodelled 30 unviable stores to transform into large format stores.
Bata extends complete control over the layout of all its stores. All store mangers (both company owned as well as franchise store managers) are handed detailed store layout plans that are based on the findings of Bata’s visual marketing research. All Point-of sale advertising measures are also strictly controlled by the head-office thus making all the stores uniformly standard in their layout.
Flow of Material:
Shoes manufactured at the Bata shoe factory are sent to the Regional Distribution Centres. The RDC is basically a warehouse that caters to the requirements of all the inventory requirements of retail outlets in that territory. There are a total of 6 Regional Distribution Centres located across India. The supply of shoes from the RDC to individual outlets is controlled by an in-house ERP system called Bata POS.
Enterprise resource planning in Bata
To manage around 4000-6000 pairs of shoes inventory was proving difficult for them for the following reasons:-
- To keep the track of everyday sales
- Keeping the track of inventories of various brands for different types of product.
- To provide day to day report to management.
- Keeping track of the popular brand sales
- Manual tasks which was error prone as well as cumbersome.
To overcome this problem they implemented their own BATA POS(Pont of Sale) ERP model to all their stores. With the help of this they are now having the following benefits:-
- Sourcing and procurement – Purchase and account for finished goods and raw materials efficiently and cost-effectively.
- Manufacturing – Plan and execute various manufacturing models, including intercompany and cross-plant production, make to stock, and make to order; and improve capabilities to manage prerequisite process steps.
- Order to cash – Shorten order cycles, improve sales processing, and manage order transportation (for example, select carriers, estimate costs, and calculate shipping overrides).
- Warehouse and inventory management – Optimize inventory levels and account for stock transfers and delivery acceptance.
- Financials and controlling – Improve administrative and accounting efficiency, satisfy legal and fiscal requirements, and analyse profitability.
Business Benefits
- Improved efficiency with a solution that has the functionality to support their business processes.
- Lower total cost of ownership with a scalable and flexible solution that enables you to implement enterprise-wide changes and deploy them globally.
- Able to send the Day – to – Day sales report to the management and the guidelines
Bata has four types of stores :
Flagship stores are the new stores which are in large format, with an average size of 3000 sq. ft. offer an unparalleled footwear shopping experience to the customer. The new stores are designed by a specialist team of retail designers from Italy in collaboration with the in-house dedicated team of architects.
The layout of the new stores are based on the Bata international standards and are designed in a such a manner so as to offer the most effective display and provide the maximum convenience to the customers. The modern furniture and well-lit ambience of the new large format stores helps the customer to make a better choice of footwear, enabling improved conversion in the stores.
Family Stores are smaller in size and stock a narrower product width than the flagship stores. These stores are generally located in the shopping regions of metros as opposed to malls and standalone location of flagship stores
City stores are usually located in tier II and tier II cities and don’t stock the full premium range of Bata such as Hush Puppies and Marie Claire
The Bazar stores are being phased out and represent the old Bata stores where all footwear was stacked on racks. These stores are generally located in tier II and II towns.
Bata has in recent times decided to revamp most of its family stores and move towards converting all its successful stores into the new flagship store format. Many of the family and city stores have been closed down and new flagship stores have come up instead.
Non Retail Business
Bata Industrials:
Bata Industrials is a specialized division of the World’s largest shoe manufacturer: the Bata Shoe Organization (BSO). Bata Industrials was founded in the 1970’s to address the safety footwear requirement of various industry professionals. Bata Industrials, since then, has evolved into a designer, producer and marketer of safety footwear exclusively to professional end user markets.
Today, Bata Industrials is one of the world’s largest manufacturer & marketer of Safety footwear and the only one that is truly a global player. The company headquarters are located in Netherlands with operations and production facilities in most of the countries around the globe. It not only has a progressive Research and Development Department but also certified testing areas at its disposal.
Bata Industrials India
Bata Industrials India is a part of India’s largest footwear company, Bata India Limited. With a focused approach on growing the Industrial and Institutional business, Bata India Limited created this specialized division to offer globally renowned industrial footwear to its customers. Bata Industrial products are manufactured at India’s largest footwear factory in Batanagar, Kolkata.
The Bata Industrials Sales team has highly trained professionals who partner with customers to understand their needs to deliver the most optimum performance from safety footwear offering an unmatched product range to meet the footwear requirement of Industry professionals.
Bata Industrials also offers a wide distribution network across India with strategically placed distributors so as to meet the demands of our valued customers in time.
Exports:
Bata India Limited exports around 3 million pairs of shoes and other footwear annually, primarily to Western Europe, Middle-East and Far-East markets. Majority of the export is Canvas shoes under leading private labels to customers in the United Kingdom and France. Men’s leather shoes are sold to established retailers in Europe, Middle-East and Far-East.
BIL’s most modern leather shoe Factory is located in Hosur (Tamilnadu) and is geared to make international quality footwear for export. This Factory is comparable to the best anywhere in the world with high degree of flexibility and is fully equipped to manufacture Men’s, Ladies and Children’s cemented and Moccasin shoes and other footwear.
Institutional Sales:
Bata Institutional Sales Division is an exclusive division of Bata India which caters to the requirements of corporate customers across the country. The Institutional Sales Team customizes footwear solutions to meet the requirements of various industries – hospitality, aviation, healthcare, educational and government organizations.
The Bata Institutional team collaborates with corporate customers to design exclusive shoe lines under the various international and national brands - HUSH PUPPIES, MARIE CLAIRE, MOCASSINO, AMBASSADOR, COMFIT, SCHOLL, QUOVADIS, NORTH STAR, POWER, which are in line with latest technology and industry specific, to meet the requirement of the customer. In addition, it provides excellent quality canvas shoes, hunter shoes, miner’s shoes etc. to meet specific requirement of army, police forces and mining industry.
Bata India provides
- Great quality shoes at great prices
- Customized Shoe Solutions for every industry
- Latest technology to provide comfort and hygiene
Hospitality Industry – Each work place is different, as are the needs of the working people. Bata offers shoes with climate management technology with breathable genuine leather upper & linings along with unique foot bed insole which not only offers comfort but fresh feel to the wearers for those standing for long hours.
Corporate & government organizations – Bata Institutional Sales Division consults and advises corporate customers on footwear requirements of various industries Bata India provides Customized Shoe Solutions – we also advise and guide corporate staff to use the correct shoes as per the job descriptions.
Schools – Parents as well as schools trust Bata when it comes to school shoes, all over the country. We at Bata realize how critical it is for the children to wear school shoes specifically and technically designed to support the needs of the growing feet. Bata has come up with a patented MICROBAN technology, which keeps shoes completely bacteria free, which results in odour reduction, keeping feet clean, fresh and hygienic as well.
Urban Wholesale:
Bata’s Urban Wholesale Division consists of 12 depots located across the country selling Bata products through 180 distributors and over 20,000 independent shoe dealers. The focus is on selling volume products catering to complete family needs.
The division continues to grow with and deliver great results with a new and exciting shoe collection with very trendy shoe designs being offered to the dealers every quarter. The collection is bringing a balanced mix of value and quality and is focused upon promoting a several labels such as Remo, Macho, Comfortina, Bata Tech, sandak, Kool Kids through the dealer network.
The division has also increased its penetration into growing markets in Tier2 and Tier3 towns. It continues to build to excitement amongst its dealer network through innovative and exciting promotions and trade schemes such as the “Scratch and Win” and “Festival of Delights” offers.
Bata.in
Bata has recently revamped its website and has started online sales of its product line. The new Bata website provides an interactive platform for customers to view the product catalogues of Bata , know about the latest offers and new arrivals and make a purchase. Bata doesn’t offer cash on delivery service yet. The website highlights Bata’s latest collections that are in sync with the current fashion trends in vogue world over, besides the bestsellers from the brand. The following picture depicts the revamped Bata website of BIL:
Bata Home
Bata has now unveiled a new service for Indians to smile about. Named Bata Home, Bata now ensures that none of its customers walks away from any of its stores disappointed. It happens many a time that the particular pair of your footwear is not available at the Bata store near your residence or that the right size is not available. To ensure that you walk away from a Bata store with a smile on your face, Bata has initiated its Bata Home, wherein a customer can place an order for that elusive perfect pair of footwear and Bata will ensure that it is delivered at your doorstep within 7 days. The new online platform enables customers to make a choice over a variety of products and services. Deliveries will be made comprehensively thanks to its partnership with the leading global provider of transportation and logistics solutions. They use Blue Dart courier service for delivering.
Bata Pricing Strategy
The product lines of Bata India are spread across all price points ranging from the humble Bata Hawai Chappal priced at Rs 49 to the premium leather footwear brand of Hush Puppies priced at Rs 4999. The interesting fact about Bata is that its products are priced uniformly across all channels of sale.
Bata has adopted the system of psychological pricing. It can be observed that almost all of Bata’s shoes are priced in such a manner that the denominations are in the type of Rs 99.95, Rs. 199.95, etc. This strategy is focused on the ego and self-image of buyers - this sounds negative; it's not intended that way, it's simply a realistic assessment of why and when this price strategy can work. If the product or service has some ego-sensitivity for the buyers and for the market as a whole, this price strategy will be successful.
This pricing strategy also considers that buyers are used to uneven (non-rounded) dollar pricing and that consumers feel they are getting a 'deal' when this type of pricing is used. It is still a very common pricing strategy in consumer markets but is not used as often in markets focused.
Since Bata has a zero level channel of operation and vertical marketing system, it makes considerable savings in delivering value to its customers as it owns its entire value chain.
Bata gets an average margin of about 48%-50% on its footwear brands and a margin of about 60% on its accessories. All the retail outlets of Bata get individual sale targets and the discounts to be offered on certain brands of footwear are decided by the Bata corporate office and not be the store manager. However the decision about the discounts on offer is taken after considering inventory levels of stock across the outlets.
Bata Promotion Strategy:
Since Bata has been around in India since 1931, it has a tremendous brand re-call among Indian of all age groups. But the image associated with Bata has always been that of formal leather footwear with mundane designs that mostly appealed to the older generation. However Bata in recent times has revamped its product line and is attempting to undergo a brand makeover. Bat has never been that active in its ATL campaign in recent times and has mostly relied on Point of Sale Promotions and clearance sales to improve brand recall.
Point of Sale Promotions:
Bata puts up hoardings and strategically placed banners at its outlets to improve footfalls and awareness. It must be noted that all these hoardings are uniform across all the outlets and only vary in size depending on the type of Bata store.
Bata India has launched its ‘Discover New’ campaign offering an exciting collection of contemporary footwear and fashion accessories. The marketing campaign has been developed based on extensive consumer insights and experiences at the store level. With the objective of offering something new on every visit to a Bata store, the brand hopes to attract more customers to its wide variety of footwear and accessories.
Discover New is directed towards attracting new and younger audiences in order to gain more footfalls. With this initiative we want to connect better with our customers offering them freshness in all aspects, especially the renewed vibrancy and fervour that can be experienced at our stores, new merchandise and exceptional services. The strategy is to make the consumers happy on purchasing something exceptional every time they step out of Bata’s stores.
The campaign is an extension of the previously launched ‘Be Surprised’ campaign, with a greater emphasis to associate Bata with lifestyles of people. “Bata’s ‘Discover New’ campaign aspires to offer a wide portfolio of footwear and accessories at affordable prices. Formulated especially for the youth, the collection is designed innovatively experimenting different looks and style while matching individual personalities.
Bata wants to focus on improving the retail experience at all levels with powerful concepts and wide product categories. The clear aim of this campaign is to promote Bata as a multi-brand footwear retailer with products that offer the best value for money. The campaign will be launched across all Bata stores located in over 500 cities across India.”
Clearance Stock:
Bata generally does two clearance stocks in a year. It happens in the February end and July end. It generally covers all type of shoes and accessories provided by Bata at discount of around 30-50% off. Stock clearance can be in the form of releasing storage space, releasing supervision of materials and equipment, ending technical support for a product. Many companies avoid channel conflict by selling anonymously through specialized stock clearance companies. Through this they seek reservation of the existing corporate image and identity.
It covers around 20-30% of the sales in those months. Since they already have the margin of 50% on the products they sell. When they decide on the clearance stock price they usually charge a profit margin of 25-30% on those products.
Retail Promotion:
The company's Hush Puppies range of footwear in the premium segment is on an aggressive growth path and has plans to reach new heights with more exclusive brand outlets in all major metros across India. These exclusive brand outlets offer the complete brand experience and offer the entire Hush Puppies product range to the customers. The brand has also expanded its presence in large departmental stores via Shop-In-Shop and is also available with most of the retail stores of Bata and its dealers, across the metros, making it one of the fastest growing casual footwear brands in India.
Bata's leadership in the dress comfort segment continues. Comfit, Ambassador and Mocassino brands have grown very well. For the ladies segment, Bata's popularity continues to grow with the trendy Marie Claire range and its latest designs to enhance a woman's femininity, sensuality and individuality. The youth focused brand North Star and specialty outdoor brand Weinbrenner presents new trendy designs with an increased focus on casual styles.
Bubblegummers brand continues to allure children across the country with its trendy and lightweight all-weather footwear. Bata is planning to expand its presence in the online sphere through its virtual retail channel and is looking forward to an exponential growth in this format. Bata has already entered into tie-ups with two e-commerce sites viz., e-bay.com and rediff.com for sale of footwear through internet and shall continue to explore tie-up opportunities with other e-commerce sites in future.
Non Retail Promotion:
Bata's wholesale division operates with a network of over 275 distributors and over 20,000 independent shoe dealers. Bata caters their requirements through its 11 depots located across the country. These dealers are offered exciting new collections with trendy designs, giving a balanced mix of value and quality and focused on promoting the Company's brands.
Bata's Industrial division caters to the safety footwear needs of various industries. Safety and durability are essential properties of this footwear, while special features, e.g., impact resistance, heat resistance; oil resistance, penetration resistance, etc. are also provided upon specific industry requirements. This division is delivering increased volumes year after year, with the appointment of several new distributors and fetching huge orders from more than 400 industrial and public sector undertakings in India. Bata has received the coveted Director - General of Mines Safety (DGMS) certification on PU sole safety Footwear range, which would help the brand to address the issues of the mining industry. In order to firmly establish Bata Industrials as the most sought after and premium brand of safety footwear, Bata continues to invest in intense marketing and communication programs.
Company's Institutional business with its new business expansion plan is focusing on bulk institutional supplies. The division is aggressively targeting the corporate segment including modern key accounts. The division has also tied up with all central police canteen stores. This specialized division focuses on direct sales to various institutions, e.g., hospitals, airlines, hospitality, schools & colleges. Regular - wear occupational shoes are offered to management level people working in an industry or construction environment. Canvas shoes, Hunter shoes, Miner's shoes, etc. are offered to meet the special requirements of Armed forces, Police and Mining Industry.
BATA OPERATIONS AND LOGISTICS
During the year 2011 Bata achieved a total turnover of Rs. 15,646.2 million as compared to Rs.12,770.9 million in 2010, which reflects a growth of around 23%. During the year 2011, Bata has been in the path of successful repositioning of its retail stores following aggressive expansion plans. Bata has also improved its wholesale business with intensive focus in industrial and institutional sales. Introducing Total Quality Management, i.e., quality in merchandise, manufacturing, marketing, stores operations, new stores opening, grooming and building the best talented team, has been the most important driver of Bata's operations with increased emphasis on improving its productivity.
With continuous research and development, understanding the customer needs and preferences for design, quality and comfort remained another focus area. Improvement of overall product performance by implementing the planned strategies, bringing in new developments and product improvements based on consumer research have helped Bata achieve an unprecedented performance during the year under review. The use of modern technology and newer materials not only guarantee world class quality products at reasonable price but also cater to the fashion needs of the customers while meeting the ever changing market requirements.
Bata has strengthened its BATA HOME - Delivery Service, a first of its kind service in footwear retail in India which is aimed at meeting the needs of its customers, who are unable to find the footwear of their choice at our stores, due to missing size or specific articles from Bata's wide shoe collections at a specific retail store. With this service, the entire stock of Bata is now available for sale by any retail store, which is offering this service.
Using this service, customers can now place their orders for any footwear, which they are unable to find in a retail store and they get the same home delivered free of cost within seven working days.
During the last year Bata's manufacturing facilities have also been upgraded with introduction of improved quality and better technology and materials for giving the products a more trendy looks and comfort to meet the ever changing market requirements. In order to meet its demand for footwear, Bata has tied up with various manufacturers to produce shoes as per its designs and quality standards.
Bata has been consistently showing improved results in each quarter and will continue to grow its business by focusing on tier 2 and tier 3 cities where the potential for growth is enormous. In order to achieve volume growth Bata has introduced new retail concept - FOOTIN, with a new range of footwear focusing on affordable fashion and trendy styles. These FOOTIN stores are totally unique and different in terms of display and ambience from the other shoe retailers in India. This FOOTIN concept has a great potential to generate volume growth in view of the current market scenario of increasing organized retailing and with more and more malls coming up in mini metros and developing cities.
LOGISTICS
Bata has a well-organized logistics team at Gurgaon and control all transport and warehouse operation. The year 2011 was a year of modernization of its retail distribution centers in terms of modern Infrastructure and automation. Retail Distribution Centers (RDC) at Chennai and Farukhnagar have been modernized to align distribution setup as per the Company's growth plan.
This automation of warehouses have strengthened the Bata distribution system by supplying right size of footwear/ Non footwear to our stores as per requirements and reduce the inventory at stores and overall stock cover. Logistics team has taken various initiatives to reduce the transit time and freight by consolidation of loads and route optimization in both primary and secondary transport.
PRODUCT PLANNING SYSTEM
Bata selects its product designs according to customer needs. And they are continuously bringing changes as the customers’ demands for new products changes. Bata is using the latest equipment and machinery to meet the customers demand and to provide them the product they need.
Bata Production Division is going extra miles to meet ever growing production requirements of PU direct pouring and other footwear to cater the needs of our worthy customers. During the current season, the overall production is going 120% against estimates and 130% against last year.
This milestone in production has been a result of restructuring of Maraka and Rubber Factories. A better production planning, maximum utilization of human resources and teamwork – all have been put together strategically to achieve competitive advantage in “Bata” products over the competition in the area of quality, prices and sales appeal
PROCESS OF PLANING OPERATION SYSTEM
Their process consists of three parts:
In manufacturing are, all the raw materials are brought together and the raw material is cut into the shapes of the required products. All the pieces are cut here for the specific products.
The cut pieces of raw material are stitched here together to give the shape of the shoe. The sole is also attached to the upper portion of the shoe and all the pieces are joined together to give it the shape of shoe.
The product is then moved to finishing department where the rough look of shoe is converted in to a finished product. The shoe is polished, cleaned and all the unwanted materials are removed from it to give it a proper shape. The color and shine of the shoes are finalized here and the product coming out of this department is ready for use.
- Retrenchment (Firing)
As we know that Bata is a biggest firm around us and they hire the person who have the skills and ability to do work for a long time .They mainly fire people on the serious reach of agreement, misconduct, punctuality and upon not achieving their given targets and once the management has decided to fire a person they give one month prior notice to the respective employee and once the employee is fired can never be hired again. Moreover they do not conduct any exit interview. They do not believe in extending the outplacement facility to their employees.
QUALITY SYSTEM
A choice of more than 3,000 items: footwear, clothing, bags and accessories, for men, women, children and sports. A very personal service Their professional specialized staff is there to help you make the best choice Product presentation All the items are clearly marked with the price, size and description of the materials used to make the product, thus saving you time and making your choice easier.
Your purchase is guaranteed. You have the guarantee to replace the purchased item if it is still intact and accompanied by the till receipt.
SUPPLY CHAIN MANAGEMENT
Bata is using its raw materials from his different suppliers. Some of the suppliers are local while some are from Indonesia. Along with their own production, they are also out sourcing for some of their products. They are keeping a check on the quality of the products from outsourcing and using their own brand name.
The raw material coming from their suppliers are stored in the warehouses. These raw materials are then moved to the production area, where the production is being done and the finished good are moved towards warehouse again for storage after proper quality inspection. They are their own distributers and they have their own stores all over India.
Bata- Growth Trends
BIL continues with its strategy of retail expansion, with over 60 new Bata Shoe Stores opened every year, and existing stores being renovated during the year. The focus is on growing its retail business.
In addition to this the company has focused on the customer service part with emphasis on the customer response and research management systems, and customer relationship management in addition to the staff training.
In totality the company is focusing on the convenience factor so that the customer has a unique shopping experience. This could result in enhancing the brand value and in the process also gain customer loyalty, which could boost the overall performance of the company in the near future.
Other positive Developments
In addition to the above the following other positive developments could drive the overall performance of the company in the near future:
Working Women to push up the sales of female shoes: As per the current situation the number of working women in the tier I, tier II cities and urban areas is on a rising trend. Also with the improvement in the market situation the recruitment market in India is expected to open up thereby increasing the head count. Also more companies are in the favour of recruiting more women so as to maintain a healthy men-women ratio.
Therefore this suggests that the number of working females could increase in the future. This is a positive sign for the company, as working women prefer to be in formal attire, which could boost the sales of formal footwear in general. Also increasing working women would translate in to higher disposable incomes, thereby pushing up the discretionary spend. In either of the situation, market leaders like BIL could stand to benefit from the move in the form of higher off-take for its products. Defence Sector demand could be a positive trigger: BIL has applied for enlistment as a supplier of mountain, assault, and regular boots for the Defence forces. The defence forces require a total of 12 million pairs of boots every year.
Currently only unorganized players have been supplying footwear to the forces. Furthermore BIL has installed additional two new machines at its Batanagar plant near Kolkatta for manufacturing foot safety products (including products for the defence).
BIL has obtained the required technology for manufacturing such products from its overseas parent, which is a supplier of defence shoes to the Chilean forces. In order to achieve a breakthrough in the new segment the company has set up a dedicated team headed by a former army men for addressing the defence footwear segment. Once enlisted, demand from the defence forces could drive the revenues going ahead.
To focus on rural areas for growth in the future: As mentioned above BIL has plans to open around 60-70 stores every year over the next five years. Currently the ratio of BIL’s investments in respect of urban areas and tier II and tier III cities is 70:30 respectively. Going ahead the company intends to focus more on the tier II and tier III cities and plans to take the share of investments in these areas to 50% of the total investments with total cash outlay of around 50-60 lakhs per store.
The same is reflected by the fact that in CY09 BIL increased its brand penetration in smaller markets such as Ahmedabad, Coimbatore, Jaipur, Trichy. Lucknow, Ujjain, Dhanbad, Nagpur, Hubli and Patiala. In addition to this BIL has planned to improve the shoe designs for the youth and women. The company has aimed at providing a vast variety of shoes with as much as 1500 different designs at one stop to be changed every three months. Collectively both the above initiatives could add up to the revenues of the company and also boost the overall profitability.
Revamped website and home delivery options to lure more customers: During Q3CY10, the Company announced the launch of its Bata Home Delivery service under which the customers can now place orders for any footwear, which they are unable to find in a Bata store and have it home delivered through courier. This is a limited period free of cost service provided by BIL for Its customers. Along with Home Delivery service, the Company also launched its new website at www.bata.in, which provides consumers the option of browsing the extensive range of footwear by Bata and also buying on line.
Risks & Concerns
- Drop or a slower growth in the disposable income of the Indian consumer:
The purchasing of footwear primarily in the urban areas, tier II and tier III cities is a part of the discretionary spending. With the economy stabilising and then returning to the growth trajectory has resulted in an increase in the discretionary spending due to the rising disposable income in the hands of the Indian consumer. In case if due to any reason the disposable income drops, it could lead in a reduced discretionary spending by the Indians, which could dent the overall performance of the company.
BIL has a huge employee base of around 6334 as on December 2009. During 2008, the company signed a settlement with the union at the Batanagar unit for three years. The agreement could come up for review in the next year and any adverse development on the same could impact the overall operations of the company. In the past the company has a chequered history of unrest between the management and the employees, which has adversely impacted its business in the past.
- Liberal FDI norms could result in increased competition:
The Indian Government has allowed for a 100% FDI in the retail segment for players present in the single brand outlets. Bata being single brand outlets has an edge over other players. However in case in this facility is extended to multi-brand outlets, there is a scope for increase in competition, which could dent the performance of the company.
- Seasonality in the business:
The business of footwear is highly cyclical in nature. Q2 of the calendar year is the best period for the company, followed by the fourth quarter; Q1 is the worst each year. We believe the out performance in Q2 is due to the summer holiday season, after which sales of shoes pick up at the time of reopening of schools, leading to the highest quarterly footwear volumes for the company. Q4 is the best quarter with respect to margins.
Consumer Survey
In order to gain a deeper understanding about footwear market and consumer behaviour in the same, we conducted an online consumer survey. Questionnaire for the survey can be located in Appendix “A” of this report. Main objectives of this survey were:
- Identify the factors important to a customer during buying process.
- Identify most desired point of sale.
- Buying frequency
- Customer perception of Bata as a brand and that of its products.
- Establishing a comparative ranking between a few footwear brands and Bata.
This survey was administered through Google Forms platform. If we had conducted this survey near Bata outlets, responses obtained would have been biased because of recency effect. We have gathered 64 responses to the survey. Questionnaire consists of 24 questions. We have tried to design this questionnaire to limit biasness and gather consumer’s views without influencing them.
Demographics
Key observations which can be derived from the sample from point of view of demographics are:
- Sample of 64 respondents was composed of 64% males and 36% females.
- 52% of respondents are work in a private/public company, 42% are students and 6% are self-employed.
- Range of age of respondents is 21 years to 62 years i.e., a spread of 41 years. Mean age of the sample was 25.8 years. This means, sample was a fairly young and is close to mean age of India as whole.
Purchasing Behaviour
We will look at 4 parameters in studying purchasing behaviour.
- Frequency of purchase
- Preferred point/location of purchase
- Attitude towards online purchase
- Parameters important to purchase decision
Frequency of purchase
Almost 54% of respondents purchase new shoes within 1 year of last purchase. It is generally seen that men buy shoes after long periods as opposed to women. If we combine these facts and keep into mind that our sample has only 36% of women, and then we can comment that lifecycle of shoes has come down to 1 year. This is also a representative of the fact that consumption is bound to increase.
Preferred point /location of purchase
In terms of preferred point of purchase, Company outlets were the leading choice with 42% or 27 respondents voting for it. This might be indicator of the fact that consumers feel assured to get good quality product if the buy it from Company outlets.
Attitude towards Online purchase
Results reveal that consumers don’t prefer buying shoes online. Results from the survey as well as interactions with customers during field visits reveal that consumers want to try, touch and feel the shoe before they make a purchase. On the other hand, if we look at 36% of respondents who are willing to shop for shoes online, it may be a signal of changing attitude of people towards e-tailing in general.
Parameters important to purchase decision
Respondents were asked to rate the following factors in terms of importance when purchasing shoes.
- Quality
- Price
- Design
- Brand Value
These factors were rated on a 5 point Likert scale ranging from “Not Important” to “Extremely Important”.
Final result was that, Quality got the highest score of 1.28 followed by Design with a score of 1.14 out of maximum of 2.
Brand Recall
One of the questions put across respondents was about shoe brands they are aware of. With help of this information we were able to find that “Bata” was the highest recalled brand among all the brands mentioned by respondents. Table below shows brands with highest recall amongst all mentioned brands.
Consumer’s Attitude towards Bata
In this sub-section we will try understand attitude and perception of customer towards Bata as communicated from results of our survey. We will cover the following points:
- Usage
- Satisfaction
- Attitude towards price
- Variety
- Value for money
- Value associated with Bata
- Promotion effectiveness
As it is can be observed 94% of the respondents have used Bata products and 78% of the total respondents are satisfied with them. This obviously is a great advantage for Bata as well as is a testimony of its quality standard. Apart from this 88% of respondents agree to the fact that prices of Bata products are capable to attract customers. And as we have seen earlier in the report, Bata has a wide product mix in terms of price points. So, it has the capability to grab interests of potential customers in all targeted segments. This fact is again reaffirmed if we have a look at result of question inquiring about value for money. 84% of respondents said that they feel Bata as a brand has value for money.
But if we have a look at aspect of variety that Bata offers in its product, and then we find 61% of respondents have an opinion that Bata does not offer same width in variety as it does in price. But as we have seen earlier in this report, Bata has a fairly wide and deep product mix. This perception of consumers could be because of the fact that they still associate Bata with formal leather shoes for men. Bata can be blamed for some part of this perception. This accusation would be clear if we look at promotion efficiency. 89% of respondents say that other footwear brands are much more effective in promoting their products as compared to Bata. Bata has tried to transform its brand in India and has tried to change with changing customer preferences and needs, but somehow it hasn’t been able to change it perception in minds of consumer to that extent.
Now, we have a look the question that inquires about first value/characteristic that comes to mind of consumer that they associate with Bata. Again, Value for Money comes out on top with 66% respondents responding in its favour.
We can probably say that Bata has a stronghold as well as a correct positioning if we consider Price-Value customers. We think Bata should focus on this segment and make it more lucrative by increasing effective ATL communication activities in order to change customer perception about width of its product mix.
Perceptual Map
We have developed a perceptual map for footwear industry to understand Bata’s positioning in consumer’s mind vis. a vis. other brands. We chose the following brands to develop the perceptual map:
- Adidas
- Nike
- Bata
- Liberty
- Woodland
In order to build the perceptual map we gathered preference data on the above brands on following parameters:
- Value for money
- Quality
- Brand Value
- Design
- Variety
- Buying preference.
Preference data for mentioned brands on above parameters was collected on rating over a 5 point Likert Scale. Aggregate ratings were obtained for every brand under each parameter. A summary of this is given in the table below.
We have already determined that Value for Money and Design are top two parameters while making a purchase for our respondents. So we created perceptual map by taking “Value for Money” and “Design” as axis. Resultant perceptual map is shown below.
As it can be observed, Bata is highest on “Value for Money” but is last in “Design”. Table with aggregate preference data shows that Bata lacks in “Variety” as well, in spite of showcasing wide product mix.
Bata has been trying to revamp it old perception of being a leather shoe brand, but these efforts doesn’t seem to be having a great effect.
References
- Bata Annual Report 2011
- http://www.leatherindia.org/products/footwear.asp
- http://www.afaqs.com/news/company_briefs/index.html?id=3369_Bata+India+goes+for+a+makeover;+revamps+product+portfolio+
- http://www.franchiseindia.org/news/Bata-to-open-70-global-format-outlets--126/
- http://articles.economictimes.indiatimes.com/2008-06-11/news/27726674_1_franchisee-new-stores-new-bata-outlets
- Microsec report on Footwear Industry in India
- http://www.telegraphindia.com/1120531/jsp/business/story_15552407.jsp
- http://industrytracker.wordpress.com/2011/05/30/india-footwear-industry/
- http://www.browneandmohan.com/file3.pdf
Appendix A
Consumer Survey for Footwear
This survey is to find out what do consumers think about BATA as a footwear brand. This survey is for academic purpose only and will take only 5 minutes of your time. I would really appreciate your help. Thank you.
* Required
Name *
Age *
Occupation *
- Job
- Businessman/ Businesswoman
- Student
- Retired
- Self Employed
How frequently do you shop for footwear (shoes)? *
- Less than 6 Months
- 6 Months - 1 Year
- 1 Year - 2 Years
- More than 2 Years
From where do you generally prefer to buy shoes? *
- Malls
- Multi-brand Stores
- Company Stores
- Factory outlet
Which shoe brands are you aware of? *
What to you look for, when buying shoes? *Rank the following on a s scale of 1-5 on the basis of importance during purchase of shoes.
Have you used BATA shoes? *
Are you satisfied with Bata products? *
Are prices of BATA products capable of attracting customers? *
Does BATA showrooms have wide variety in product range? *
Do you find value for money in BATA? *
Which of the following do you associate with BATA? *
- Value for Money
- Brand Value
- Durable and Good Quality
- Nice Designs
- Wide Variety
- Easy Availability
- Costly
- No Brand Value
- Poor Quality
- Poor Designs
- Low Variety
- Not available easily
According to you what is the best feature of BATA products? *
Which of the following footwear products are offered by BATA for Men? *
- Formal Shoes
- Casual Shoes
- Sports Shoes
- Canvas Shoes
- Sandals
- Slippers
- Trekking Shoes
Which of the following footwear products are offered by BATA for Women? *
- Comfort Wear - Chappals, Sandals
- Heels - Stilletoes, Wedges, Kitten
- Boots
- Flip Flops
- Canvas Shoes
- Bellys
- Sports Shoes
- Crocs
- Other:
Would you buy shoes online? *
Do you think other footwear brands are more effective in promoting compared to BATA? *
Rate the following brands on "Value for Money" *where 1 means Best Value for Money, and 5 means Least Value for Money
Rate the following brands on "Quality" *where 1 means Best Quality, and 5 means Least Quality
Rate the following brands on "Brand Value" *where 1 means Highest Brand Value, and 5 means Lowest Brand Value
Rate the following brands on "Design" *where 1 means Best Design, and 5 means Worst Design
Rate the following brands on "Variety" *where 1 means Most Variety, and 5 means Least Variety
Rate the following brands on the basis of your preference of purchase *where 1 means "1st choice for purchase", and 5 means "Last choice for purchase"
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loveangel08hotmailcom (student)
