Incentives for the Furniture Industry Furniture Bargaining Council February 2012.
EVOK | Furniture Industry | New Product Design
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Transcript of EVOK | Furniture Industry | New Product Design
Presented By:Group 5
UM15006 Akash UM15036 Priya Ranjan MohantyUM15016 Chandan Das UM15048 Somil MalhotraUM15025 Ketan Choudhary UM15057 Prateek Gupta
Current Marketing Situation Product Situation : Evok Stores showcase over 20000+ world class contemporary
products in Home Furniture, Home Décor etc. Company Situation : Evok, is a retail brand of Hindware Home Retail, a subsidiary of
Hindware Sanitary ware & Industries Ltd retails its range of home furniture on the website. Consumer Situation
Growing urbanization & residential landscapes, changing consumer lifestyle, modern retail sector opportunities are on the rise
Customers aspiring for Value for Style interior solutions“ Commercial furniture segments cater to the office space and hospitality industry Growth in IT and ITES segments has provided a thrust to commercial furniture segment. Major part of office furniture market caters to operative desks, seats, storage cabinets
and beddings in case of hospitality industry Market Situation : Changing customer aspirations and rise in e-tailing is driving business.
Thus the e-tailing market made furniture players to resort to the omni-channel route.
PESTEL Analysis
Political
• Current Government is boosting entrepreneurship and organized business sector and thus high demand is expected
Economical
• Indian Economy is the fastest growing economy
• Increase in FDI
• Reduction in Import duties
Social
• Companies/People becoming brand and quality conscious.
Technological
• Low cost advantage in India will help in reduction in cost
Environmental
• Reduction in Timber harvest a major issue
• Due to National Forest Policy of India, ban on falling of trees in forests
Legal
• Labor Laws• Change in
Taxation policies
SWOT Analysis
• Variety of products in different price ranges
• Strong distribution network• ‘Design to Build’ service• End-to-end furnishing solutions• Presence of brick & mortar stores in
select cities
• Business model specific for B2C functions
• Unavailability of standardized furniture.
• Need for low cost product
• Competition in the market• Consumer Mindset• Government Regulations• Low cost substitutes• Growing demand for greener
products
• Untapped Market• Mergers and Acquisitions to expand• Real estate sector growing at a
rapid pace• Procurement of sustainable
products
Stre
ngth
sO
ppor
tuni
ties
Weakness
Threats
SWOT Analysis
Financial ObjectivesYear Sales Unit
CostRevenue
EBITDA
Market Share
2016 1000 100000 100 mil 25 mil 10%
2017 1100 100000 110 mil 27.5 mil
11%
2018 1265 90000 113.85 mil
28.46 mil
12.5%
2019 1518 90000 136.62 mil
34.15 mil
13.5%
2020 2000 90000 180 mil 45 mil 15%
Marketing Strategy
Maximizing profit margin
Quality Leadership
Long term customer
relationshipCommunicatio
n Objective
Marketing Objectives
SegmentationDefining market
boundaries
Major corporations
Government and private institutions
SMEs and MSMEs
Others (export)
Defining segmentation variables
Demographic variables
Operating variables
Purchasing approaches
Situational factors
Target Market
Major corporates
Small business Enterprises
Home based offices
Institutions (Restaurants, malls, banks and educational spaces)
Others
Positioning Strategy• Our positioning strategy is designed from the findings of the 3C analysis as below:
CustomerChannelCompetition: As our product is being offered, we have a lot of
direct competition. Some are:• Godrej Interio• Zuari• Pepper Fry• Fab Furnish• Urban Ladder
Pricing StrategySerial No. Cost Element Unit Cost of each
element (In Rs ‘000)
1 Material 252 Production Cost 30
3Selling, Distribution and General Administration Cost
15
4 Promotion & Other Costs 55 Total Cost 75
Particulars (In Rs ‘000)
Total Cost per unit 75
Margin (33.33%) 25
Unit Cost (Cost + margin) 100
Inclusive of margins:
Operational Cost Structure (For standard office modular conference table (1) and chair (10) set):
Distribution Strategy
Distributors 155
Retailers 1300
Depots 21
Exclusive Distributors 60%
Owing to this strong network it is well equipped to handle the channel distribution of office furniture.
Owing to increased depots, distributors have now low inventory cycle
Evok has implemented ERP and a strong IT platform
Active brand building and strong network of service centres has helped monitor interactions
It also plans to increase its distribution network by addition of over 400 distributors and 3000 retailers in the next 5 years covering almost every town in India with a population of over 25000.
Sales Promotion Strategy
• Print Media& Ads – industry-specific, trade and lifestyle magazines such as GQ, Vogue etc. The print ads also serve to communicate and connect to the customers about importance of quality durable furniture.
• Visual Media (TV) – Product features demonstrated through sponsored Programmes, ads, Company executives’ interviews.
Advertising Strategy
• PoP Marketing – Better Point of Purchase (PoP) marketing in the form of better and stylized catalogues and brochures at the dealers and experience centres
• Gifts & Give away – Evok can also come up with Gifts or some goodies to be given to dealers or retailers on purchase such as gift/discount coupons etc.
• Dealer Promotion Schemes – Coming up with dealer promotion schemes wherein it can give some sort of incentives such as foreign trip or complete office makeover on continuously achieving new targets.
Sales Promotion Strategy
Internet Marketing StrategyOnline Forums
Virtual Trade Shows
Ratings & Reviews (Digg, Delicious etc)
WikisPrivate Online Community
Sites
Open Social Networks - LinkedIn
and Face book
Interactive and 3D
Demonstrations
Podcasts (Downloadable Media, Audio &
Video)
Blogs – Word Press,
BlogSpotOnline
Advertising
Online Video
Micro Blogs – Twitter
Action PlansBusiness
Objectives Tactic UsedAchieve Sales of 10,000
units in 2016Awareness through print media & TV ads about its quality and durability
Justify the costs to aggressively market the product to the B2B client through company presentations
Achieve sales growth of 10% in 2017
Long term contracts are most suited for this product. Once adopted and implemented, the product will become a standard in all tier 1 cities & some tier 2
cities. Sales pitch and tenders should be aggressively bid yet not to allow hurting the bottom line.
Achieve Market Share of 13.5% by maintaining
the CAGR of 15% YoY for next 2 years
Competitors are bound to decline the prices competitively hence a strong brand image becomes very important to prevent them from making a dent in sales.
Become a market leader in office furniture space
by 2020 (15% market share)
Conducting Needs Gap analysis & incorporating newer technological developments into the products to keep it competitive.
New developments should be futuristic and anticipate the changes above. Their time to market should be fast so that, the core competency of superior technology
remains.
Expected Financial Outcomes
25%
30%15%
5%
8%
17%
Percentage Break Up of Revenue
MaterialsProduction CostS, D, G & A ExpensesPromotion & Other CostsTax (@ 32.445%)PAT
For year 2016, 2017(Phase 1)• Unit Price=1 Lakh• Margin=33.33%
• PAT=17% of revenue
28%
33%
17%
6%5%
11%
Percentage Break Up of Revenue
Materials Production Cost
S, D, G & A Expenses
Promotion & Other Costs
Tax (@ 32.445%)
PAT
For year 2018, 2019, 2020 (Phase 2)
• Unit Price= 90 Thousand• Margin= 20%
• PAT= 11% of revenue
Revenue, PBT, PAT
2016 2017 2018 2019 2020
10.0
0
11.0
0
11.3
9
13.6
6 18.0
0
2.50 2.75
1.90 2.28 3.00
1.69 1.86
1.28 1.54 2.03
In Crores Rupees
REVENUE PBT PAT
Controls
Annual Plan
Control
Marketing
Efficiency Control
The forecasted/Targeted figures will be compared against actual figures. The variations will be computed. Cause of variation will be found and corrective
measures to be taken.
Conclusion EVOK is one of India’s leading furnishing solution provider
They will leverage the core strengths of the group (HSIL) in understanding diverse consumer & trade behavior, retail distribution network, brand equity, global sourcing & cost effective supply chain management, which are critical success factors in this sector
EVOK through its project division will also work in close association with architects, interior designers, builders & corporate community utilizing the group networks & relationships for retail, institutional & projects business.