28-01-2013, 11:05 AM
Assignment Assessment Report
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Sports Label India
SCENARIO
“Sports Label India” is one of the famous brands of “Private Label Worldwide Inc” owned by a professionally managed Indian corporate house and has grown in 20 years to be one of the leading manufacturers of sports clothing and footwear in the India and does exports to Europe and USA with a turnover of Rs.470 crore per annum.
The company was founded by Mr. Harsh Bagaria an Indian born American who relocated to India to take advantage of low cost labour and manufacturing investment costs. The company’s head office is at Bangalore and manufacturing plants are all based in India.
Private Label Worldwide is essentially a high volume, low cost manufacturer who, to date, does have a brand and product range of its own and but for Indian operations it is totally dependant on supplying to leading sportswear and clothing companies including Nike, Reebok, Adidas, Fila, Levi and Wrangler.
The company, whilst predominantly a clothing manufacturer, has over the past few years been ‘pressured’ by its major customers to move into footwear, which due to investment costs and ‘the learning curve’, and has yet to contribute to the company’s profits, and is unlikely to do so in the next five years. Due to the nature of the business, the company’s customer base is small in number in India but large in volume, and whilst its turnover is in excess of 470 crores but its profit margin is low, on average 7%.
Sports Label is the company’s lead brand in India sales at retail outlets in Europe and USA. The company has sales and distribution centre based in Bangalore and supplies worldwide from Bangalore. Company had a tremendous success in recent past for its brand recognition by sponsoring Cricket clubs and general sporting activities in India and part of the service it provides is the distribution of sportswear kit to Cricket clubs and sports retailers throughout India.
You are the Sales and Marketing Manager of “Private Label Worldwide Inc”, and over the past one year you have noticed that your company’s profit margins are being continually ‘squeezed’ by more exacting demands on costs and distribution by your major customers like Nike, Reebok, Adidas, Fila, Levi and Wrangler.
With a background in marketing and finance, you are concerned that the company in effect seems to be controlled by a handful of powerful buyers even though having a visible brand “Sports label” in India. It is not possible for the Private Label worldwide to move away from large buyers due to survival reasons but at the same time, is considering seriously jumping in to retail operations in a big way, in India.
Your board of directors and head office management have listened to your concerns and asked you to provide a Marketing Mix and Retail Sales plan which will move the company away from being dependant and controlled by a small number of large customers and therefore help the company’s overall profit position and market penetration. Your report must be of 2000 words with real market scenario in recommendation. Please carry out an independent research to learn about market dynamics in sports wear and shoe segment.