Project on Marketing Plan of Servis Pvt Ltd

INTRODUCTION

Introduction Of Servis Pvt Limited:

Servis Group is Pakistan's largest footwear manufacturer and exporter. It also has interests in retailing. Its Group Company, SSC PRIVATE LIMITED, is the country's largest retailer and wholesaler of footwear. The Group has diversified interests in rubber products including tyres and in defense industry products.  The Group was set up in 1958 and today has sales of more than PKR 9 billion. Servis Group employs close to 8000 people in its Group Companies.

Servis Industries Limited:

SIL is a public limited company listed on the stock exchanges of Pakistan. It has annual revenue of USD 80 million. It is the largest manufacturer of footwear and tyres & tubes for two-wheelers, and has been the largest exporter of footwear from Pakistan for the last 10 years.

The company employs more than 5,000 people in its facilities located in Gujrat and Muridke. The company's products are exported primarily to Germany, Italy, France and UK.

Vision Statement:

To be a market leader providing quality footwear, tyres & tubes and allied products. To strive for excellence and global recognition by continuous improvement, innovation, dedication and growth.

Mission Statement:

To be a result oriented and profitable Company by consistently improving market share, quality, diversity, availability, presentation, reliability and customer acceptance.

To emerge as a growth oriented concern ensuring optimum return and value addition to its shareholders to ensure cost consciousness in decision-making and operations without compromising the commitment to quality.

To create an efficient resource management and conducive business environment. Evolving an effective leadership by creating a highly professional and motivated management team fully equipped to meet any challenge.

To keep abreast with modern technology and designs to optimize production and enhance brand image to attain international recognition for the Company's products. To set up highly ethical business standards and be a good corporate citizen, contributing towards the development of the national economy and assisting charitable causes to adopt appropriate safety rules and environment friendly policies.

Introduction of Soul:

Soul Collections (Pvt.) Ltd. is a Pakistani ladies footwear brand that aims to provide a one stop shopping facility regarding quality footwear and accessories. Soul Collections is not just about selling quality footwear, it wants to be identified with providing the ultimate shopping experience to our customers.

Soul Collections plans to spread its network all over Pakistan and reach out to all the major areas of this region and be known as ‘The # 1 Choice in the Ladies Footwear Brands of Pakistan’. Soul Collections is all about fusing the exotic and colorful local aesthetics with international shoe standards. The design range at Soul Collections is not restricted to a particular segment of the Pakistani consumers, both in its versatility and its affordability.

Our knowledgeable staff is trained to deliver excellent customer service, with the objective of turning customers into loyal clients, ensuring the future growth of the company.

Winning the Hearts:

 Soul Collections launched its first outlet on the 30th of April, 2007 in the well-known Liberty Market--the heart of Lahore, which itself is the heart of Pakistan. The response was overwhelming and the customer's feedback in the following days, regarding the product quality and the services, is more than encouraging and strengthens our confidence in our policies. After this initial success, we have aggressively grown our network.

MARKETING PLAN

INDUSTRY ANALYSIS

Situation Analysis:

Soul Collection has entered into the ladies footwear. Being in the shoe industry they had no presence in ladies footwear previously and a big market chunk was missing.

Retail Tax:

Before 2006 the government of Pakistan was charging 15% retail tax on ladies shoes. Soul Collection did not enter into the market before 2006 due to this retail tax because it was making it 15% expensive from the market. The government weaved off the retail tax in 2006 and SERVIS group of industries found this situation workable and finally decided to enter ladies shoe market.

Purchase Tax (With Holding Tax):

Majority of private brands and small industry players don’t pay taxes. The corporate strategy of Servis Group of industries include paying all the taxes Government applies 3.5% of the whole purchases as with holding tax.

Soul collections buy on 3.5% higher then the other market in order to maintain the corporate strategy of their moral duty to pay all the taxes. Other market players don’t pay this 3.5% tax, which makes them sale, their products less expensive. However soul collection purchases with tax but they have to maintain their selling prices in balance with the competitors, which give fewer profit margins.

Industry/Market Summary:

Pakistan’s footwear industry manufactures some 120 million pair annually for local consumption and it exports 2 million pair per annum roughly and the average price charged for each pair stands around $10. Its share in Pakistan’s total exports is about to touch the figure of $200 million.

Out of all only 25% shoe market is with SERVIS and Bata. Other individual players hold the rest of the market share of overall shoe industry. Ladies footwear industry is a 50 billion market where 80% shares lie with the individual players.

SC has captured good information regarding their market and knows a great deal about the common attributes of the most prized customers. The will leverage this information to better understand who should be served, their specific needs, and how they can better communicate with their customers.

FEDERAL BUREAU OF STATISTICS DATA FOR IMPORTS OF

SHOE INDUSTRY

Target Markets:

Target market is a female of all ages. Females are 51% of the total population of Pakistan.

         POPULATION PYRAMID OF PAKISTAN

FEMALES

IN POPULATION BY AREA (2008)

PAKISTAN NWFP FATA PUNJAB SINDH BALOCHISTAN ISLAMABAD

Entry/ Exit Barriers:

Entry barriers are high however exit barriers are low. High investments and capital is required to enter this industry .On the other hand technical knowledge, expertise and availability of skilled work force makes entry barriers high. National and international level competitors are competing at the same platform with minor variations.

Market Demographics:

The profile for Soul Collection’s customer consists of the following geographic, demographic, and behavior factors.

Geographic:

The initial plan was to capture the most footfall market areas. Though a deep market analysis the following four outlets were planned in the first phase of opening.

Super Location:  Liberty Market Lahore

Top three locations:

·         Tariq Road Karachi

·         Bank Road Rawalpindi

·         Link Road Lahore

The immediate geographic target is the city of Lahore, Karachi, Islamabad and Rawalpindi.

First phase of openings of outlets is targeted towards 3 outlets in Lahore, 1 in Karachi, 2 in Rawalpindi, 1 in Abbotabad, 1 in Peshawar, 1 in Sahiwal and 1 in Faisalabad.

Focus is to target the shopping areas where shops for ladies accessories and products are available. The plan involves opening up outlets wherever the outlets of Stylo and ECS are already operating. Market footfall will be the focus for every new outlet.

Demographics:

·         Females (house wives, working professionals, college/school students)

·         Age range 13 – 60 years.

·         Socio-Economic class, B and B+

·         Income should be that they buy 6 to 7 shoe pairs per year

Behavior Factors:

·         Variety seeking customer

·         No brand loyalty

·         Its fun shopping

·         Fashion conscious.

·         Tend to eat out at least once a week, typically more.

·         Live the motto "fashion over function."

·         Are always aware of the different fashion trends.

·         Subscribe to, or at least read, several women's magazines that are fashion orientated.

Market Needs:

Soul Collection is providing the market with a wide range of fashionable shoes with an unprecedented selection.

·         The patron will be impressed with the degree of care that they receive.

·         Have to break the stereo type product styles

·         Need of western styling in products

·         Color variation is a key to success

·         All products will be priced competitive to others

·         The central location and wide range of business hours designed to accommodate all customer's needs

 Market Trends Forecast:

The market trend for women's fashionable fancy and casual shoes is toward a wider selection of common design elements. Over the last few years, there has been a proliferation of several design variations from a base design. A base design is released and then there are many different spurs that have common elements but include a few distinctive characteristics.

The market trends follow weather change and occasions. The following occasions affect the overall design, color combinations and materials.

·         EID

·         SHADI SEASON

·         BASANT

Weather Division:

·         Summer season trends

·         Winter season trends

·         Discounts in February and July

Market trends are also being derived through Indian movies and especially from star plus dramas. Color pallet is being assessed by the movies.

Trends in the fashion footwear market are evolving and the style mantras of the past are no longer applicable. There are new fashion icons and trends governing consumer choices now. Soul Collections makes sure that its customers always get the cutting-edge fashion footwear that they desire, be it formal shoes with the finest embellishments. We ensure that Soul Collections a brand that caters to local needs but also finds a place for itself on the international platform.

The buying habits for fashion-conscious women consist of typically buying at least one pair of shoes per month. Women generally purchase a pair of shoes to go with a specific dress. Once the woman purchases the dress she will then begin the long search for the perfect pair of shoes.

Market Forecast:
It is a 50 billion market and the focus of the CS management is to capture the 10% of market for its brand.

 Market Growth:

The market for women's shoes is a strong, steady growing market. It is generally not affected by economic downturns. Women seem to consume shoes regardless of the economic climate. In a popular mini-series, a women's habit of buying shoes was described as a release when they are feeling bad, a way to make them feel better, similar to eating chocolate. While this stereotype might not be entirely accurate, women love their shoes and cannot seem to get enough.

In population its 15% to 20% growth trend and per capita income is increasing which increases the sales of the product. The market share is to be gained because private brands capture 80% of the female shoe market, which still has to be taken by SC.

SWOT Analysis:

The following SWOT analysis captures the key strengths and weaknesses within the company, and describes the opportunities and threats facing SC.

Strengths:

·         50 years experience in shoe industry

·         Experienced management

·         Strong brand name

·         Extremely strong relationships with suppliers.

·         Excellent staff who are well trained and customer attentive.

·         Strong perception of red color which is associated by people.

Weaknesses:

·         Smaller player, can’t dictate market

·         Slow market penetration.

·         Late entrant

·         Had to bear high cost of real estate at the time of entry

Opportunities:

·         A growing segment of the market that is increasingly

·         Big gap of market to be captured

·         The ability to operate on lean overhead relative to competitors.

·         Quick change in demand

Threats:

·         At present law and order situation

·         Low cost private players

Competition:

Soul Collections has three direct competitors in the market.

STYLO:

They started with one rented outlet in Lahore in 1974, to becoming the largest selling ladies’ shoes brand in Pakistan and the largest ladies shoes retail network in the country as well, Stylo Shoes has come a long way. They are currently present in 16 cities with 27 outlets and plan on expanding further in the coming months.

Ehsan Chappal Store:

First outlet opened in 1954 in Anarkali and soon became a ragging success for its excellent quality and designing. Since then we have been expanding operations in the fields of manufacturing, importing exporting and retailing. ECS owns multiple brands of ladies and girls footwear, bags and accessories including ecs, e-circle, effects and elements. All these brands are exclusively available at ECS stores located at most convenient locations in most major cities of Pakistan. ECS currently have 8 branches and focusing on giving the superior customer satisfaction to all the customers.

SHU-8:

Bata a multinational brand has recently open shu-8 for the female market offering casual and fancy shoes. They currently have only four outlets and planning to expand more in the market.

Private Brands:

We consider them direct competitor, though they don’t carry any brand name with them but still they are the biggest threat to the main players in terms of Sales, as they offer their products in low prices so people tend to buy more shoes from them.

Product Offering:

Soul sells upscale women's shoes. Soul Collection has a wide range of fancy and casual shoe collection. The product development strategy focuses firstly on the collection of bridal shoe. These are all cottage industry products. Apart from shoes SC are also offer various type of designed handbags. The focus is to provide superior quality that gives comfort with aesthetics.

The experienced management decides over the design of the shoe to be able to sell in considerable amount at the outlet under this brand. Customers associations with the brand are different with different brand; one type of product may sell easily less than one brand and does not sell well under the other brand name.

The general categories of shoes that will be sold are:

- Bridal                                 - Party

- Indoor                               - Outdoor

- Professional                   - Bags

BRIDAL WEAR:

PARTY WEAR:

INDOOR:

OUTDOOR:

HAND BAGS:

Design Turnover:

The span of design turn over is very high in shoe industry. The choices of customers change quickly and the design becomes outdated within few weeks. Generally for fancy shoe collection the design turn over span is two to three months however, in casual shoe collection the turn over period is four to six months.

Another important variable is weather, which affects the design turn over because the needs and use of customers are different in summers and winters.

Keys to Success:

The keys to success are to meet the demand for an upscale women's shoe store with a wide selection and focused customer attention.

·         99% successful product designs are in-house designs

·         Supply chain is the core competency

·         Inventory turn is double and we are trying to increase it

·         Fashionable designs.

·         Fast customer delivery. (Within 90 seconds we handover the product)

·         Well-trained employees.

Critical Issues:

·         We cannot associate SC to SERVIS because of the poor perception for fashion products of SERVIS in the eyes of customer. We are looking forward to register this brand of high quality and more variety brand.

·         Major issue is that local vendors copy the designs. Cannot go for the copyrights because of the quick turn over of the design. Local vendors who copy the design sell it on low price, which hurts the brand sales.

·         High rental costs are becoming barriers for more outlet developments

Marketing Strategy:

Part of SC marketing strategy is based on location and distribution. SC is located in a trendy malls and busy female product markets that receives abundant walk-through traffic. This location costs a premium and is not directly linked to the marketing budget as rent has been categorized under general overhead.

The management believes in smart strategic moves, thus they are utilizing the network of servis mega stores. It has helped in reducing the distribution cost as well as the rental cost. Currently there are 15 super market servis stores where along with other brands soul collection is displayed as a separate brand.

They are focusing on differentiation strategy because the marketing objective is to become quality leader.

Marketing Objectives:

·         The aim is to become the quality leader

·         They want to become smart player and not the largest player

·         To become better then style and a little lower then Carly’s

·         Increase repeat customers by 7% per quarter.

·         To cross the break even point within 3 years

Positioning:

“The soul of Fashion” is the slogan of Soul Collection. They want people to perceive it as a foreign brand. To some extent it has been achieved. The feedback of the customer has showed that they have perceived this image to great extent.

It’s a masses brand. In pricing they are keeping it with the market. The image is maintained through proper branding in advertising and interior. The interior team had been given a challenge for making the interior good looking, should not be so much high-tech so that that image of extremely high priced product should be avoided.

Advertising & Promotion:

However this is a masses brand but focused advertising and used to create awareness. One reason for this is because of being a new entrant and less number of outlets in selective areas.

Instead of playing a proper 30 or 60 seconds TV commercial over national channels its preferred to play the add on local cables only to target those areas where they have opened the outlets.

Avoiding the national TV channels commercials has saved cost. The planning shoes that showing TV commercial in the cities where there is no stores launched can hurt the brand image thus the decision for local cable channels is better to save the image and to communicate effectively.

Secondly Hoardings are placed in three big cities and larger then life image of the product is projected to communicate customers. The slogan has been established effectively.

Magazine ads are also printed to capture ladies who read fashion magazine. For promotion the management takes the following steps

·         Loyalty cards are given to customer to develop a closer relationship with them and to support and encourage buying.

·         In-house magazine is in the process.

·         Promotional material is given to suppliers and distributors (wall clocks).

·         Branding is maintained through the shop interiors.

Marketing Mix:

SC marketing mix is comprised of the following approaches to pricing, distribution, advertising and promotion, and customer service.

Pricing: SC pricing is designed to be competitive to the other fashion shoe retailers.

Price Comparison

Distribution:

Distribution will be through personal outlets of SC. It will also be available on all of Servis’s mega stores. One outlet is franchised and latter on further more will be given on franchise to expand geographically but in the present plan the percentage for personal outlets and franchise will be 90 to 10%.

Advertising and Promotion: Location, targeted advertising on the localized cable network, magazines and Hoardings.

Customer Service: Exceeding customer's expectation is the company's mission. Target is to accommodate customer within 90 seconds. The product faults and repairs are served for a limited period of time as per company policy.

Marketing Research:

Soul collects, analyze, and disseminate information for the purpose of assisting management in decision making related to the identification and solution of problems and opportunities in market.

They are concentrating on understanding the consumer behaviors, their preferences and aims to understand the effects and comparative success of marketing campaigns. They are also examining all aspects of a business environment i.e.  Competitors, market structure, government regulations, economic trends, technological advances, and numerous other factors that make up the business environment.

Product Research:

Soul is continuously conducting product reach through the focus group just to improve their product quality and sales target. It also helps them to look at what products can be produced with available technology, and what new product innovations near-future technology can develop. An other main advantage of conduction the research is to identify the life cycle of a particular product as according to them the life cycle of casual shoes is normally from 4 – 6 months and fancy shoes is of 2 – 3 months.

They are modifying western design with eastern to give a new and modern look; also have a designers to create seasonal and occasional designs as per market demand. They choice colors according to the new upcoming seasonal colors and designs. They usually pick the idea of new forthcoming colors from the textile industries and from Indian entertainment industry. Soul collection is also identification research include market potential, market share, brand or company image, sales analysis, and forecasting.

Advertising Research:

Soul is using localize promotion on cable network, out door medium in the form of steamers and billboards and on different magazine. They are also conducting the research to improve the efficacy of advertising and analyzing audience levels of attention, brand linkage, motivation, entertainment, and communication.

Brand Equity Research:

Soul they conduct research that how favorably consumers view the brand and like to stick with their brands. According to their management team, the brand equity is quite low as females usually go towards attractive styles, design and affordable prices. 

Brand Name Testing:

 They have tested that what do consumers feel about the names of the products? And it’s a feedback of consumers that they perceived that it’s a foreign brand, its strength of Soul as they have a very elegant and well designed logo with attractive red color. 

Commercial Eye Tracking Research:

Soul regularly examines their advertisements, package designs, websites, etc by analyzing visual behavior of the consumer.

Concept Testing:

They test the acceptance of their advertisement and message concept among their target consumers.

Cool Hunting:

Soul keep on observing and predictions the changes of new or existing cultural trends in areas such as fashion, music, films, television, youth culture and lifestyle

Buyer Decision Processes Research:

In that research they determine what factors motivates people to buy and what decision-making process they use. In there case, customers usually go towards attractive designs and affordable prices.

Customer Satisfaction Research:
Through quantitative or qualitative studies they yields an understanding of a customer's of satisfaction with a transaction

Demand Estimation:
They estimate and determine the approximate level of demand for the product. As according to them the lifecycle of casual shoes is about 4 – 6 months and lifecycle of fancy shoes is about 2 - 4 months but according to the demand of a product they evaluate the production criteria of particular product.

Marketing Effectiveness:

Soul Collection measure sales results to determine the effectiveness of individual marketing activities.

Price Elasticity Testing:

As there is high inflation and raw material is quite expensive now so they determine how sensitive customers are if soul will change prices of their products.

Sales Forecasting:

They determine the expected level of sales given the level of demand. With respect to other factors like Advertising expenditure, sales promotion etc. According to them each of their outlets has different sale targets according to its location and by now outlets are achieving the target sales. On the other hand it’s their target that they will at break even after 3 years.

Location Research:

Soul Collections launched its first outlet on the 30th of April, 2007 in the well-known Liberty Market--the heart of Lahore, which itself is the heart of Pakistan. They have 9 outlets but they are very much concern about the good location for opening their outlets just to improve their target sales.

Suppliers Research:

Soul has about 100 to 150 venders and they usually find out the expert and experienced venders to work with them so that they supply them the best quality. They also have a contract with them that they will not sell their designs to their competitors.

Competitors Research:

They also be aware of each of their competitors moves so that they must make their strategies accordingly.

Research & Development:

Research and development is nowadays of great importance in business as the level of competition, production processes and methods are rapidly increasing. It is of especial importance in the field of Marketing where companies keep an eagle eye on competitors and customers. In order to keep pace with modern trends and analyze the needs, demands and desires of their customer’s soul is continuously working on improving their quality with affordable and elegant designs to become a good market share in fashion shoe industry. As they want to achieve 10% of total market share within a period of 5 years. Their designer is an NCA graduate; always try to come with different and unique designs and styles. They carefully research that what will be the new colors and designs for the next upcoming season, for this they pick the themes and colors from Gul Ahmad lawn prints, have an idea from western designer’s collections and from the Indian entertainment media.

Initially, soul was 100% depended on their venders designs but now they are relaying 30% of their venders and 70% of their own design because of tough competition in footwear market as well as due to the design theft they are now more focusing on their own designs and styles.

Production Process / Suppliers :

Soul collection have no production process as they are working with different venders and according to them they have about 100 – 150 venders. They have different production capacities i.e. some venders can provide 100 pairs of shoe per week and some are more then that. Actually, Ehsan, Stylo and Soul has almost same vender base.

Sales Strategies:

Marketing and sales are very different, but have the same goal. Marketing improves the selling environment and plays a very important role in sales. Soul’s sales strategies are to drive more profits and business success. Basically, they give sales target to each and every outlet according to their location and they are very successful in achieving that target. Their goal is to increase the number of interactions between potential customers and the sales team using promotional techniques such as advertising, sales promotions, publicity, creating new sales channels and new product designs.

They focus on the first week of the month because sales tend to be high within that comparatively. On the other hand occasions are treated extraordinarily.

SALES PATERRN COMPARISON

Break Even Plan:

It is planned to achieve the break even within maximum of 3 years time. From the opening, till now the forecast is steady.

Sales Forecast:

Target is planned to gain 10% of the total market share within 5 years time.

Sales Comparison:

Soul Collection is following the map plan of STYLO, per day, per month and per years sales of Stylo are the following. This data gives us a situation plan followed by SC. Different shops are given different sales target in accordance with the location, footfall and city.

Difficulties & Risks:

·         Design theft: Local venders & other copy designs and sell on low prices

·         Law & Order problem minimizes the customer flow

·         High costs of real estate (outlet rental)

·         Entrance of males in the outlets during rush hours is banned

Import & Export:

The following brands import their product from these countries

Soul collections have started exporting. The first shipment is already delivered and the top management is waiting for the response.

HR Policies:

·         Tracking competitor’s employees

·         Train retail staff

·         Pay high salaries to retail staff then of the competitors to retain them and to create a high level of motivation.

·         Retail staff should be presentable

·         No high education required for backend employees

The successful retail strategy is to be better than your competition in one of the following three key areas:

·         Price

·         Service

·         Product

At the same time, you must also remain competitive in the other two.

Like all major retailers in Pakistan, Soul has a merchandising buying process that allows its buyers to forecast with some degree of accuracy what to purchase and when to have it delivered. This greatly assists the company in attaining its sales and gross margin goals. The foundation of this planning process is the six month merchandise plan which takes into account various variables.

Soul has divided their sales pattern according to the two seasons i.e. summer and winter. The first season covers the months of Jan to June and the second covers the period from July to December. In our meeting with their GM Mr. Salman, the following insights were reveled about their Merchandizing Plan. The following steps are involved in it:

Define the merchandize policy:

Soul has a policy in place which gives its buyers some guidelines into the buying process. It gives them guidance in the following areas:

·         Demographics of current and potential customers

·         Store’s image

·         Merchandise quality levels

·         Price point policy

·         Marketing approach

·         Customer service levels

·         Desired profit levels

This policy hence gives them a sense of direction as to what to plan and how to go about executing it. Soul’s buyers also ensure that what they have planned for a given season is in line with the trends and that the prices are set according to what their competitors have set.

They also ensure that they are protecting the local cottage industry which provides employment to thousands of households. Although they do source some of their collections from abroad but care is taken to ensure the sustainability of the local industry. This is in fact is the policy adopted by other competitors namely, Shu 8, Stylo, Metro, Ehsan etc.

Gather historic information:

The marketing team gathers historical information and on the basis of it develops a 6 month plan. The objective of it is to prepare a month by month total rupee-purchasing schedule for Soul. Since Soul is new to the market, their sales team can only compare the results of 2007 with that of 2008. Even that gives a fairly good idea about the sales trends and what to anticipate in the future.

Perform qualitative analysis:

GM Soul believes that the buying process is 90% analytical and 10% intuitive. They gather data about the customer buying patterns and the overall situation of the market. The recent economic instability has put a halt into their aggressive buying behavior but nevertheless they still anticipate the market to bounce back. They perform their analysis by taking into account the following components:

Customer profile analysis:

Who are soul’s best customers and what are their buying behaviors and attitudes?

Who does soul want their customers to be?

Who are soul’s secondary customers and what should they buy for them?

Department analysis:

To effectively forecast the sales and purchase the right product, Soul has divided their 9 outlets into 3 department’s i.e. bridal shoes, casual shoes and accessories (bags, socks, pouches etc). This enables an easy to understand store-by-store analysis.

Key department trends:

Soul’s buyers keep a constant track on the trends in the market. They are on the look out of what is hot in the market and what their competitors are doing. This enables them to forecast future trends and bring abut a better product in the market. They also analyze what department is performing better in its own competition i.e.  Soul’s bridal shoes Vs Shu 8’s bridal range.

Major Vendor Analysis:

At soul, vendor analysis is a key component in the overall assessment of its vendors. They believe that even a minor analysis of the performance of vendors can identify significant buying issues.

A case in point:

“A major shoe retailer in Pakistan suffered huge losses just because of vendor issues. A closer analysis revealed that their number one supplier last season did not do any favours to them. Although they shipped 98% of what they booked, further analysis indicated that deliveries coupled with styling and fitting problems. This resulted in poor in-season sell through, creating the need for heavy markdowns. Due to poor supplier performance, they ended with a gross margin of 10% below the store average.”

Advertising review:

Soul believes that increase traffic flow results in higher sales. To this end, advertising and promotions are used to improve traffic levels at their outlets. The buying and advertising departments work closely to gather to ensure the company’s investment in this area results in strong performance.

Visual Presentation Analysis:

The marketing team at soul believes that people usually respond best to visual stimuli, so product presentation is the major driver of sales. They make sure that their VM includes the following

Are any special fixtures required?

Where the product should be displayed?

What type of signage is necessary?

Answers to these questions ensure that their outlets stand apart from their competitors and make the overall shopping experience of their customers enjoyable.

Inventory management:

Inventory management is a key area in the overall profitability of the outlets and the company as a whole. GM at Soul believes that it takes approximately 1000 rupees in extra sales to recover the 100 lost due to theft. He believes that there are two ways to increase stock turns is to

- Increase sales

- Decrease inventory

To ensure that things are under control, they have adopted the stock to sales method. This method is a popular method to forecast how much inventory is required to attain monthly sales projections. SS ratio is the amount of inventory on hand at a particular date to the sales for the same period and is calculated as follows

S/S ratio = Stock on hand EOM end of month at retail value

                                   Sales for the same month

This method of anticipating inventory levels provides soul management with an estimate of what the inventory turnover will be. For our information, they have shared the following data with us.

Inventory turns:

At soul, the management is of the opinion that stock should be rotated as quickly and as efficiently as possible. For this purpose they ensure that their distributors are aware of the stock levels at each shop and at the warehouse. They have developed in house MIS software that enables then to keep abreast of the changing needs to the outlets.

Their inventory turnover is around 2 which is comparable to its major competitors. This figure is for the six month season from January to June 2008. The industry average for women shoes is around 4.1 globally. This can be seen from the following table.

Distribution Network:

They make use of the same distribution facilities that are at the disposal of Servis group. Once the goods are received at the depot from the vendors, they are then dispatched to each of the 9 outlets according to the assortment plan.

Soul has divided their nine outlets according to the locality they serve and their annual sales. The liberty outlet being their flagship store receives the maximum number of lines. The areas like Sahiwal and Faisalabad receive the lines which the management thinks they will be able to sell.

The Retail Network Coordinator who then reports to the Retail Operations Manager ensures that the retail needs are met and the business functions smoothly. The ROM coordinates with the marketing and the design team to ensure that the product meets the specific standards and that they are to maximize sales.

Shop Management:

Soul’s sales team numbers around 100 and it includes the shop managers. Each shop managers then reports to the Retail Network Coordinator (RNC) who then reports to the Retail Operations Manager. The ROM reports directly to the GM and keeps the other departments about the sales progress. So far they have managed to develop as a team. However as they grow, they would need to have Area Managers who would hen manage their respective areas.

FUTURE PLANS:

·         Focus on export

·         Outlets in abroad

·         Magazine

·         Customer loyalty programs

·         Franchises

Executive Summary:

Soul has a vision to become a leader in its segment. It has a vibrant workforce that works towards in meeting the organizational goals. They are in their infancy but have aggressive plans to increase their presence in the market. The team led by Mr. Salman is very optimistic about what lies ahead and are focused in meeting the challenges they face from competitors like Shu 8, Stylo, Metro etc.

Their pricing strategy is two fold i.e. to stay competitive and to increase sales; hence increasing their market share. The products on offer are trendy and at the same time provide good value for money. Their Visual Merchandising is at par with the competitors and provides a favorable shopping experience for their customers. Their sales staff is efficient and is adept at providing a good customer service.