PROJECT TITLE:

“EMPIRICAL STUDY OF BRAND IMAGE OF ITC WILLS LIFE STYLE”

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ABSTRACT

Brand image refers to rational measurements like quality and strength of the brand. It includes consumer's impressions about brand's physical attributes, its performance, the functional benefits, the kind of people who use it, the emotions and associations it develops and the imagery or the symbolic meanings it generates. To put it differently, how a consumer perceives a brand in its totality is the brand image and encompasses both physical and perceptual components.

A strong brand image can be a powerful marketplace motivator. It differentiates from the competition. It can allow charging a premium price for products or services. It can elevate the value of the organization.

ITC's Wills Lifestyle has been established as a vibrant fashion brand for the premium consumer. Wills Lifestyle offers a complete lifestyle wardrobe for the premium consumer, incorporating the latest fashion trends for both men and women. A nationwide chain of exclusive specialty stores provides the Indian consumer with a truly 'International Shopping Experience'. Currently there are 42 Wills Lifestyle stores in 30 cities across the country, and the brand is making rapid strides in terms of expansion – doubling the number of stores over the next three years. They are nurturing the `Wills' trademark to be a clear leader in premium lifestyle retailing in India. Over time, they aspire to position it as a leading Indian international brand with a significant global presence.

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SYNOPSIS

Desired area of Research:-Indian retail industry

Title of the Thesis:-An Empirical Study on the Brand Image of ITC Wills Lifestyle

Problem Definition/Hypothesis/Research Objective:-The objective of the research is to study about the following:

1. The impact of brand image on buying behavior in retail industry.

2. To investigate the relationship between the sales volume of a firm and its brand image of ITC wills lifestyle.

3. What influence does brand image and brand reputation have towards achieving a sustained competitive advantage in the retail industry?

Introduction to the area of Research:-Retail is the booming sector in India currently. Big corporate names are planning enter this sector as the market is expected to have enough potential. The fact that the major chunk of the retail market in India is unorganized and only 3% of the market is organized makes this sector all the more lucrative and challenging at the same time. The thesis is aimed at exploring how ITC wills lifestyle has grown over time and how the brand has evolved in the minds of its respective target group of consumers.

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Scope of thesis work:-The thesis would focus on Indian retail industry as a whole and how ITC wills lifestyle is operating in this industry. The thesis will focus on the brand image of wills life style in the minds of the consumer and the evolution of that brand image.

Research Methodology:-

The methodology that will use is Primary research as well as Secondary Research.

Primary data- Primary data are data freshly gathered for a specific purpose or for this research project. It includes questionnaire from consumers.Secondary data- Secondary data are data that were collected for another purpose and already exist somewhere. It includes Information from various books related topic, magazines and internet.

External Guide

Name - Mr. R.B. SANTOSH KUMARDesignation - Vice President & Acceptance Head, NorthCompany - Citibank

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ACKNOWLEDGEMENTS

I would like to express my heart felt gratitude towards Mr. R.B Santosh Kumar, Vice President & Acceptance Head - North, Citibank for his continuous support and encouragement and without whom this project would not have been possible.

I am also sincerely thankful to Ms Subhadra – Assistant brand Manager , WILLS LIFESTYLE for helping and guiding me through the integrities of the brand building of WILLS LIFESTYLE.

Last but not the least I am thankful to my institute for giving me an opportunity to undertake this thesis.

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TABLE OF CONTENTS

INTRODUCTION _________________________________________________1

OBJECTIVES OF THE STUDY______________________________________ 4

RESEARCH METHODOLOGY______________________________________ 5

INDUSTRY PROFILE______________________________________________7

COMPANY PROFILE_____________________________________________ 25

BUILDING A STRONG BRAND - WLS STRATEGY___________________________________________33

WILLS LIFESTYLE INDIA FAHSIONWEEK_______________________________________37

JOHN PLAYERS__________________________________________________41

THE FUTURE____________________________________________________42

DATA ANALYSIS AND FINDINGS__________________________________48

CONCLUSION AND RECOMMENDATIONS__________________________58

BIBLIOGRAPHY__________________________________________________ 60

APPENDEX_______________________________________________________61

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INTRODUCTION

Large format retail businesses dominate the retail landscape in the United States and

across Europe, in terms of retail space, categories, range, brands, and volumes. Indian

retail industry cannot hope to learn much by merely looking at the Western success

stories in retail. Their scales of operations are very huge, the profit margins that they earn

are also much higher and they operate in multiple formats like discount stores,

warehouses, supermarkets, departmental stores, hyper-markets, convenience stores and

specialty stores. Though many of these formats are coming up in India now for example

BIG BAZAAR of the future group and specialty stores like THE MOBILE STORE etc.

But one of the biggest challenges faced by Indian retailers of the time is that the economy

and lifestyle of the West is not in line with that of India and hence they will have to

tactfully customize their style of operations in order to successfully

Meet the Indian consumer’s demands other than simply copying the western retailing

formats.

Retail brand building

Product brands make life easier. They make it possible to recognize products, which

simplifies the decision making process. Furthermore, product brands make the consumer

a part of a group, they create a sense of belonging. But retail brands do even more than

that. These brands are visible platforms for kindred spirits: the physical shop is a

container for the entire retail formula and therefore constitutes a large part of the retail

brand. The tangible nature of retail makes the familiar slogan ‘experiencing the brand’

most logical of all, in a physical store. Retail brands have gained in popularity in the past

few years. Indeed, they have a number of advantages above product brands. In the first

place, they are closer to the consumer.

The physical store space offers the possibility of literally and figuratively communicating

with consumers at the moment of purchase (one-to-one marketing). Retailers can show

who they are and what they stand for through the store formula. Moreover, in principle,

retailers are neutral, because the choice of product brand (or store brand, if present) is left

to the consumers. Retailers help consumers because they make a shrewd pre-selection

and present their product assortment in a specific manner. Once a consumer knows and

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trusts a retailer and has good experiences and memories about a store, the foundation has

been laid for a long-lasting relationship that will ultimately lead to customer loyalty.

Retail branding creates a brand preference, which goes beyond the product or service in

itself.

A positive brand image is created by marketing initiatives that link strong, favorable, and

unique associations to the brand in memory. The definition of customer-based brand

equity does not distinguish between the source of brand associations and the manner in

which they are formed; all that matters is the resulting favorability, strength and

uniqueness of brand associations. The realization has important implications for building

brand equity. Besides marketer-controlled sources of information, brand associations can

also created in a variety of other ways - by direct experience, from information

communicated about the brand from the firm or other commercial or non-partisan sources

and word of mouth; and by assumptions or inferences from the brand itself or from the

identification of the brand with a company, country, channel of distribution, or some

particular person, place or event.

The significance of brand image has risen sharply in the last few years. At the segment-

level, the increase in importance is greater for the retail segment, indicating the relevance

of the brand among the more expensive market segments. Corporate major ITC's

exclusive fashion retail chain Wills Lifestyle has recently implemented the Intentia

solution and Predator (Proactive Demand Accelerator) integrated retail solution, which is

being used in the manufacturing unit of ITC Lifestyle Retailing Business Division

(LRBD) and also its chain of specialty stores spread across 38 locations. The integrated

solution will help the company streamline its operations in the areas of retail,

manufacturing, finance and accounting management, customer order processing,

distribution, and supply chain management. The work was started in July 2003 and

became fully operational in end-2004.

According to Prabir Sengupta, vice-president (finance & IT), ITC Wills Lifestyle, the

integrated Intentia Fashion solution and Predator solution is highly scaleable and has

helped the retailer to effectively manage its back-end by providing stock visibility across

the supply chain from 'vendor' to 'shelf,' and to optimize inventory levels for savings on

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interest costs and improved return on investment (ROI), besides other benefits. As a

result, we have been enjoying improved service levels at retail stores and overall

increased efficiencies with our manufacturing and distribution operations.

Before deciding on Intentia's offering, ITC Wills Lifestyle evaluated various solutions to

find out the one that would best meet the retail chain's multi-location requirements. The

solution is built on 100 per cent Java technology and provides a future-proof platform

with high scalability, independence and interoperability with other extension solutions.

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OBJECTIVES OF THE STUDY

Impact of brand image on buying behavior in retail industry

To investigate the relationship between the sales volume of a firm and its brand image

of ITC Wills Life Style

What influence does brand image and brand reputation have towards achieving a

sustained competitive advantage in the retail industry

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RESEARCH METHODOLOGY

As I have to find the brand image, loyalty, preference and acceptability of ITC Wills Life

style from its existing customers and new potential customers. The study aims to analyses

the consumer buying behavior with respect to brand image.

Research Design

According to Saunders et al (2005) "Research design is the arrangement of conditions for

collection and analysis of data in a manner that aims to combine relevance to the research

purpose with economy in procedure".

Keeping in mind the objective of the study the research design kept is descriptive and

exploratory. It allows the study of specific concerns and theory. A pre test will be

conducted based on the secondary data sources like magazines, newspapers, internet etc.

A pre test is essential to have an idea of the most preferred brand in the urban market

based on which the final questionnaire will be prepared. Therefore the pre test would be

validated with the data collected through the primary research.

The research will be carried out by collection of data through interviews conducted at the

personal interview, via telephone and via e-mail. To meet the required objectives the

instrument will be used for collecting data was questionnaire method. Questionnaire is

defined as a general term to include all techniques of data collection in which each person

is asked to respond to the same set of questions in a predetermined order. Descriptive

research using opinion questionnaires will enable researcher to identify and describe the

consumer preferences and needs.

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Data Collection

Primary Data will be collected through structured questionnaire.

Secondary data sources such as use of the books, research journals, websites and

commercial reports published by well-known authors in the similar area have been

analyzed. However, these are the only important secondary sources that were found to be

of any relevance to the research area.

Sampling design

Since the reported study will be concerned with analyzing the consumer buying behaviors

with respect to brand image...

Sampling Frame - As my study is based on the urban sector; my target population for

sampling will be on Delhi and NCR..

1. Sampling Technique -I may use both Probability and Non probability sampling

techniques.

2. Sampling Method -These are the methods which I may use for my research. Those are:

Simple random sampling, systematic sampling, and convenience sampling, Judgment

sampling

3. Sampling size – 100

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INDUSTRY PROFILE

Organized Retail Industry in India

India has the highest shop density in the world and the present retail market in India is

estimated to be US$ 200 billion of which only 3% (around US$ 64 billion) is in the

organized Sector. This organized retail sector is poised for a take off. India is ranked

second in the global retail development index out of 30 by AT Kearney. Figure 1 shows

the comparative penetration of organized retail in India. With the organized retail

segment growing at the rate of 25-30 per cent per annum, revenues from the sector are

expected to triple from the current US$ 7.7 billion to US$ 24 billion by 2010. The share

of modern retail is likely to grow from its current 3 per cent to 15-20 percent over the

next decade. 85 per cent of organized retailing is taking place in India’s urban areas while

66 per cent of it taking place in India’s 6 main cities alone. The growth is much faster in

south India than in northern states. The total retail market in south India is $94 billion and

of this organized retail is $8.5 billion. In southern part of India the organized retail

market growth is estimated as 35 per cent per annum. In Chennai the growth rate is 12

percent while in Hyderabad it is 7 percent and in Kerala it is 3-4 per cent per annum. As

per Technopark study the sales in the organized sector for food, beverage and tobacco is

$195 billion which cover 65 per cent. Sale of personal care product is $15 billion (5 per

cent) and apparel at 7 percent around $21 billion. In coming years Co-brands labels will

be more in these products. The paper explores the evolution of this sector of economy.

The main theme of enquiry of this paper is what it all means for the Indian society.

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Evolution of Retail Market in India

In the beginning there were only kirana stores called Mom and Pop Stores, the Friendly

neighborhood stores selling every day needs. In the 1980s manufacturer’s retail chains

like DCM, Gwalior Suitings, Bombay Dying, Calico, Titan etc started making its

appearance in metros and small towns. Multi brand retailers came into the picture in the

1990s. In the food and FMCG sectors retailers like Food world, Subhiksha, Nilgris are

some of the examples. In music segment Planet M, Music world and in books Crossword

and Fountainhead are some others. Shopping Centers began to be established from 1995

onwards. A unique example was the establishment of margin free markets in Kerala. The

millennium year saw the emergence of super markets and hyper markets. Now big

players like Reliance, Bharti, Tatas, HLL, ITC are entering into the organized retail

segment. The big international retail bigwigs are waiting in the wings as the present FDI

guidelines do not allow them to own retail outlets in the country. Walmart is testing the

waters by agreeing to provide back end and logistic support to Bharti for establishment of

retail chains with a view to study the market for future entry when the FDI guidelines

change and to establish a backbone supply chain. Table 1 shows the different phases in

the growth of organized retailing in India.

India is witnessing an unprecedented consumption boom. The economy is growing

between 7 and 8 percent and the resulting improvement in income dynamics along with

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factors like favorable demographics and growth in aspirational consumption are the

drivers. Retailing in India is currently estimated to be US$ 200 billion, of which

organized retailing (i.e. modern trade) makes up 3 percent or US$ 6.4 billion. Organized

retail is expected to grow at 25-30 percent p.a., and is projected to attain US$ 23 billion

by 2010. At these levels, organized retail would constitute up to 9 percent of overall retail

sales.

Fastest growing retail segments in India

Retail industry in India is largely unorganized and predominantly consists of small,

independent, owner managed shops. Retailing is India’s largest industry in terms of

contribution to GDP and constitutes 13% of the GDP. There are around 5 million retail

outlets in India. There are also unaccounted number of low cost kiosks and

pushcarts/mobile vendors. Total retail sales area in India was 490 in 2005, with an

average selling space of 29.4 sq. mt per outlet. In India, the per capital retailing space is

about 2 sq. ft, which is quite low in comparison to the developed economies (Bajaj, Tuli

& Srivastava, 2005) .

The average urban household income in India is about $3,000 a year, roughly in line with

China, and the consuming class has grown from 35 billion families in 1996 to an

expected 110 million in 2007. That’s roughly in line with the US. This is a very big

opportunity for us”

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Organized retailing in India represents a small fraction of the total retail market. In 2005,

organized retail trade in India was worth Rs. 18,225 billion. The modern retail formats

are showing robust growth as several retail chains have established a base in metropolitan

cities, especially in south India, and are spreading all over India at a rapid pace. However,

space and rentals are proving to be the biggest constraints to the development of large

formats in metropolitan cities since retailers are aiming at prime locations.

In urban India, families are experiencing growth in income but dearth of time. More and

more women are taking up corporate jobs, which is adding to the family’s income has led

to an increased demand for better quality products while lack of time has led to a demand

for convenience and services.

The demand for frozen, instant, ready to cook, ready to eat food has been on the rise,

especially in the metropolitan and large cities in India. There is also strong trend in favor

of one-stop shops like supermarkets and department stores.

Reliance will, soon encounter competition from large domestic players like ITC, the

Aditya Birla Group, telecom maverick Sunil Mittal's Bharti group, RP Goenka's RPG

Enterprises and the Russia's Essar Group, all of whom are finalizing their retail plans

while global players like Carrefour, Wal-Mart and Tesco will inevitably move in either

with franchised, cash and carry or plain retail models.

It’s raining malls in small-town India. Whether it’s Kanpur, Ahmedabad, Indore, Agra,

Baroda or Surat, the mall and multiplex culture has caught on in the country’s smaller

cities, powered by the burgeoning purchasing power of India’s middle-class. From a

handful of malls in the mid ’90s, India today has nearly 200 malls spread across large and

small cities. And 700 new malls are coming up all over India-40% of them concentrated

in the smaller cities.

Small-town India is the next big thing in the retail business. Consider these numbers: in

2005, the contribution of smaller cities to total organized retailing sales was 15%. By the

end of this year, that proportion is expected to grow to 25%. Organized retailing in small-

town India is growing at a staggering 50-60% a year compared to 35%-40% in the large

cities. The striking point is that it is the big names in the organized retail business that are

eyeing these new opportunities.

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The Kishore Biyani-owned Future Group, India’s largest retailer, plans to invest Rs 3,600

crore in 100 stores in 30 cities, increasing its retail space from 3.5 million square feet to

30 million sq feet. The RPG group plans to open malls in all cities with a population of

over 8 lakh.

Similarly, Wills Lifestyle, the garments and accessories retailing division of ITC Ltd,

plans to increase its footprint by doubling the number of stores from 50 to around 100 in

the next two to three years, mostly in smaller cities. Even Sunil Mittal’s Bharti group has

announced plans to get into food and farm products retailing. All these plans, however,

are dwarfed by Mukesh Ambani’s ambitions to do a Wal-Mart in India by investing

$5.60 billion (Rs 25,000 crore) and covering 1,500 cities and towns.

The small-town retail boom could be considered a show-case of India’s free-market

prosperity. It is being powered by healthy economic growth that is making more Indians

more prosperous. Organized retailers have understood this and are hoping to ride the

wave, exploit the first-mover advantage and establish strong brand loyalties in these

relatively under-served markets.

Indeed, this is probably the most compelling example of the trickle-down impact of

liberalization in India. Looking ahead, retail analysts suggest that the sustained success of

the IT and ITeS industries in small towns is expected to create more jobs and enhance

spending power.

Typically, small cities offer a 15% to 30% cost advantage over larger cities, not just in

terms of employee costs but real estate costs as well, not to speak of the gains that accrue

from reduced staff attrition rates. This gap is expected to widen over the next few years,

creating a pull for smaller towns that will, in turn, power the small-town retail revolution.

At present, real estate costs present a major incentive for India’s organized retailers.

Average rental values for ground-floor space are Rs 50-60 per square foot a month,

against Rs 100-120 per sq foot a month in the bigger cities. However, a strong demand

for retail space has more than doubled rentals in cities like Jaipur, Chandigarh, Surat and

Lucknow. While in the metros, retailers are filling gaps by increasing more stores, in

small towns, these malls are way beyond the expectations of the consumers. These cities

are untapped markets and retailers find it important to establish their brands there.

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Most of the smaller cities are seeing plenty of action. For instance, Ludhiana can already

boast worldwide restaurant chains like KFC, McDonald’s, Pizza Hut, Domino’s Pizza,

Ruby Tuesday and Subway. A new world-class, 25-acre commercial centre and some

seven new shopping malls-cum-entertainment centers are under construction.

The Indian retail market is estimated at $350 billion. But organized retail is estimated at

only $8 billion. However, the opportunity is huge—by 2010, organized retail is expected

to grow to $22 billion. With the growth of organized retailing estimated at 40% (CAGR)

over the next few years, Indian retailing is clearly at a tipping point. India is currently the

ninth largest retail market in the world. It is names like Dehradun, Vijayawada, Lucknow

and Nasik that will power India up the rankings soon.

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Growth of Indian Retail Industry

DLF Mega Mall -- located in the IT and ITES hub i.e. Gurgaon on the outskirts of Delhi

-- bears a deserted look. Of the few operating shops in this large mall, most have few

customers. The same goes for several other retail outlets and many of the other malls in

the vicinity.

True, a retail chain like Future Group's Big Bazaar may be clocking heady sales (growing

at 100% year-on-year), but the dozen-odd shops operating in its proximity wear a

deserted look, giving a somewhat hollow ring to the much-talked-about retail boom in the

country.

In what seems like a quirk of circumstance, malls have sprung up all over urban India in

anticipation of a consumption boom that may itself prove to be eventually truant.

Move to Mulund (West), a suburban locality of India's financial nerve, Mumbai. Rajesh

Parashar, a resident of the area has the option of shopping at Big Bazaar, Apna Bazaar,

Subhiksha, Spinach, Shoprite, Foodland or at the local Sai Supermarket, all of which are

within a two-kilometer radius of his residence

This is paralleled by the developments happening in the Delhi suburb of Ghaziabad,

where the upcoming Shipra Mall at Indirapuram already has Big Bazaar operating out of

its lower-ground floor, while Reliance is slated to open shop on the third floor. Customer

footfalls, however, are more in the projections of the occupiers of the mall than real.

All this retail activity, and more, and the sheer gigantic size of the investments planned,

ask the question -- does the consumer's wallet have enough money in it for everyone?

"Only time will tell," is KPMG's executive director, Deepankar Sanwalka's laconic

answer. To a great extent the success or the failure of malls will hinge on the consumer

population of the area. "If the spending power of consumers is high in a locality, it could

sustain two-to-three large players." Not so, elsewhere, he adds poignantly.

The significance of these remarks sinks in gradually. With planned investments of $22

billion over the next five years -- excluding what might be brought in by new global and

large local players henceforth -- the retail sector is expected to grow 40% to $427 billion

by 2011.

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Organized retail, which is 3% of the whole currently, is in turn pegged to grow to $64

billion by 2015. And one consequence of all those investments will be the fact that India's

present two square-feet per capita retailing space will rise by 15-20% by 2010.

To be viable, the huge investments made in the sector by India Inc would have to be

responded to by a corresponding massive surge in footfalls. And for that to happen, a lot

of links would have to fall in place.

Between the drawing board and the emerging market realities, the realization dawns that

a lot of things can go wrong with India's much-heralded retail revolution. The more

visible among these loose ends: vexingly high real estate prices, the loosely-knit

distribution networks in India's hinterland, the near-absence of any modern supply chain

logistics, shortage of skilled personnel, and a regulatory system that resembles a patchy

quilt more than anything else.

Then there is the nature of the business itself. Retailing is a low-margin, high-volume,

commodity business where profitability gets strained as competition intensifies. And if

wrong choices are made regarding the location or the formatting of the store, it'll woe

betide the retailer. The catches are many and to make it big, a retailer would have to

negotiate all the tricky turns most of the time.

The big players are optimistic, however. "There is enough room for six-to-eight players,"

says Reliance group chairman Mukesh Ambani, who recently kicked off the first

Reliance Fresh outlet in Hyderabad. There are reasons for his optimism: the country's

preponderantly young working population, disposable incomes that are expected to

increase at an average 8.5% per annum till 2015, and a steadily climbing per capita

income (from $460 in 2002, it rose to $620 in 2005).

In fact, it is the expectation of a large working and earning population that has attracted

most global retailers to the country. But most analysts are agreed that the Indian retail

market could at best support 10 large players with revenues in excess of $2 billion each

by 2015.

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Given the number of players getting into the fray today, this clearly means a winnowing

out the weaker retail players. What's more, that time could be sooner rather than later,

maybe just three or four years down the line.

That's not so surprising, industry insiders even say, pointing out that a large number of

the new entrants may not be committed to retailing in the long term. While some almost

certainly are looking to act as silent partners for foreign players, others may be more

willing to look at an exit option a few years down the line. As of now, the retail turf is set

for some hectic activity. Reliance has drawn up a Rs 25,000-crore (Rs 250 billion) retail

plan that would see its outlets dotting 784 cities and small towns by 2010.

Already it has 17 stores in Hyderabad alone (the number will go up to 40 by end of the

above period). More recently, Sunil Bharti Mittal made news when he announced an

alliance with the world's biggest retail chain Wal-Mart, for a supply chain and cash-and-

carry venture, besides a franchise agreement for retail.

Seen as a coup of sorts, this could exert pressure on other retailers in the country to

explore similar collaborative opportunities.

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Laying the Pipeline

Between them the likes of Reliance, the AV Birla Group, the Tatas, the Godrejs, the

Bhartis, the Mahindras, the ITC Group and the Wadias -- and a horde of others -- will be

sinking in close to Rs 1 lakh crore (Rs 1 trillion) in the business of retail over the next

five years.

In their crosshairs, are a host of retail-related activities such as cold chains, retail supply

logistics, warehousing, sourcing and merchandising management. All of which are seen

as absolutely essential if the front-end retail business is to take off on a meaningful scale

across the country.

The players have hit the ground running. Reliance is hiring overseas talent to beef up its

management capabilities -- it has roped in Peter Bracher from Asda Wal-Mart as special

adviser for Reliance Fresh stores and Kevin Pleass from Tesco, UK, to help with store

design and construction -- even as the AV Birla group is on a talent hunt ahead of its

Rs.15, 000-crore (Rs.50 billion) retail rollouts.

Retail icon Kishore Biyani is also stepping on the gas -- he has announced plans to roll

out 225 Big Bazaar stores and hundreds of other outlets in other formats in the next four

years.

The Tata group too earlier this year expanded its footprint (beyond the formats rolled out

by Group Company Trent of Westside fame) by entering the durables segment, in a tie-up

with Australian retailer Woolworths, with the launch of its Croma store.

They plan to have a national presence with 30 stores by March 2008 and double it to 60

by March 2009, with a capital of Rs 400 crore (Rs 4 billion). The company zeroed in on

the segment given the findings of an internal study, which revealed that only 0.5% of

Indians own air conditioners, just 1% own computers, 3.5% washing machines and

11.7% telephones. Other players like the Dubai-based Landmark group, with its Lifestyle

and Max branded outlets, are also keen to expand into the grocery segment.

Reports indicate the company is in talks for a tie-up with Carrefour. Then there are

players like the K Raheja group's Shopper's Stop and the Rajan Raheja-controlled Globus

that are expanding their reach in the apparel and accessories segments. Others like ITC (a

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big player in its own right), the Godrej group, Century Textiles and Raymond as well as

mid-size players like Vishal Megamart, Subhiksha and Sabka Bazaar are busy increasing

their footprint.

Taking a cue from the global leaders (whose eyes are also on India), India Inc's retailers

are thinking big. Reliance Retail, for instance, has chalked out a plan to roll out about

5,500 stores of all kinds in 800 cities, 85 logistics centers and 1,600 farm supply hubs.

AV Birla Group is looking at pumping in Rs 15,000-20,000 crore (Rs 150-200 billion) --

with an initial investment of Rs 5,000 crore (Rs 50 billion) in the next few years.

Similarly, Bharti is expected to invest Rs 6,000 crore (Rs 60 billion) in the initial phase.

Biyani's Pantaloon is not far behind. The group plans to increase its total retail space to

30 million sq ft from the current 3.2 million sq ft; and take its turnover to Rs 2,500 crore

(Rs 25 billion) by June 2010.

By global scales, the numbers are not out of the ordinary. The Bentonville, Arkansas,

based Wal-Mart -- the big brother of retailers -- operates 6,640 stores and wholesale clubs

in 14 countries, while its counterpart in Europe (it is based out of UK) Tesco runs 2,600

across 13 countries.

The others have chains of comparable sizes and reach. To keep their stores stocked with

their myriad products, the global retailers have sophisticated procurement strategies in

place that hinge on sourcing products globally based on prices, quality and timely

delivery.

Not to mention deployment of cutting-edge technologies that enable real-time inventory

tracking and ordering mechanisms. Thus, globally, retail is a business involving massive

scales and deep pockets.

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Climbing The Greased Pole

Moving up the evolutionary ladder won't be easy for India's retailers, especially given the

large number of potential competitors. Availability of quality retail space will be a key

determinant for the growth of the sector. With most Indian cities undergoing rapid

urbanization, spiraling rental costs has most retailers worried already.

Hitherto, most retailers have preferred to go in for long-term leases. But with real estate

prices in most top tier cities hitting the roof in the past two years, lease rental increases

are making business unviable for organized retail.

Not surprisingly then, within hours of making his deal with Wal-Mart public, Sunil

Mittal, the chairman of Bharti Group, said his top priority would be real estate

acquisition, whether through leasing or buying.

To that end, the newly-formed combine is roping in DLF, Emaar, MGF and Ansals to act

as partners and developers. Such an arrangement could prove to be a win-win solution:

while it will ensure quick roll-outs and lower capex, it could also improve asset

utilization of the developments. At the other end, players like Reliance could set up

hypermarkets in their own SEZs to meet the needs of local residents.

Another way out of this problem, as some astute retailers have found out, is to become an

anchor tenant. According to PWC estimates, an anchor tenant typically commands a

discount of 30-45% on lease rentals and is responsible for attracting footfalls into a mall.

Retail biggies like Pantaloon Retail, Shopper's Stop and McDonald's have been quick to

endorse this strategy. For instance, Pantaloon has signed up with 100 of the 300-odd

malls that will be developed over the next three years. This, points out PWC, will enable

the retailer to leverage its first-mover advantage on a pan-India basis.

Pantaloon Retail currently has 3.2 million sq ft spread across several formats and is

expected to have 10 million sq ft of space in the country by 2010. Again, in Tier-II cities,

where lease rentals are 40-50% lower than those in top tier cities, Pantaloon has been

quick to establish its presence.

The retailer’s real estate fund, Kshitij 1, which has a corpus of $80 million at its disposal,

is understood to have invested in projects in cities like Ahmedabad, Baroda and Surat.

24

Pantaloon expects to have nearly 400,000 sq ft of retail space in these destinations by

2008.

The other determinant of success here is the location -- if the outlet is not easily

accessible by a large section of consumers due to distance or other issues, viability could

come in question.

Here the neighborhood format has an edge. Sanwalka of KPMG is of the view that

smaller stores of 1,500-2,500 square feet (as against 150,000 square feet hypermarkets) in

neighborhoods might do better in India. The verdict is still out on that one, and we won't

know till one fails.

All new entrants are planning rapid expansion and such a scale of ramp-up requires

scalable processes and systems, which retailers are yet to develop. So we would witness

mistakes being made as Indian retail evolves. Ability to learn from mistakes will be a

critical success factor.

While Biyani already has a successful retail model in place and Bharti will look to cut

corners with some help from Wal-Mart, players like Reliance and the AV Birla group

would have to go through a longer learning curve.

Grapevine has it that soon after the Bharti-Wal-Mart MOU, Reliance Retail's A-team

went into a huddle to discuss its response. The fact that the world's biggest retailer will be

pitted against them has not been lost on them: now, Reliance has to worry about Wal-

Mart's strength in the make-or-break area of supply-chain management.

This will no doubt be factored into the retailer's own mammoth Rs 6,000-crore drive to

set up its own logistics, complete with its own airstrips and a fleet of transport aircraft

dedicated to airlifting supplies to key markets.

Indeed, the key imperative facing retailers in India is that of creating robust, scalable

supply chains that would facilitate their rapid spread across the country. "India is a

fragmented country and an absence of a strong infrastructure and logistics system makes

it all the more challenging to reach consumers," says NV Sivakumar of PWC.

25

A vital logistical link in most retailers' plans happens to be the cold chain. And many of

them like Reliance Retail and Future Group are reported to be investing Rs 6,000 crore

and Rs 400-500 crore (Rs 4-5 billion), respectively, on setting up logistics.

Another big player in the segment will be the Bharti Group. Overhauling this part of the

supply chain will be the key to the success of any retail venture in food and groceries

segment. Currently in India, the wastage levels for perishables are as high as 40%

because of a large number of intermediaries as well as loss during transportation as well

as through lack of storage.

The fact is that most retailers in India still don't have a stronghold on operations -- be it

merchandising, supply chain management or procurement.

Clearly, while the players can build on the experiences of industry leaders in other

markets while developing their supply chain, the Indian market may require them to

improvise frequently.

Foreign retailers have shown that managing operations innovatively can provide a

significant competitive advantage to retailers. Wal-Mart, for instance, leverages IT to

track supply chain processes like cross-docking very effectively. Similarly, Tesco

requires lean production techniques of its suppliers and has high-reliability delivery

systems in place such as 'milk-runs'.

Most analysts agree that retailers would have put in place global operational metrics.

One way to measure efficient operations is the inventory turns ratio. A comparison of the

US and India is revealing. Where, in the US, the retail sector has an average inventory

turns ratio of about 18 (some retailers like 7-Eleven score over 50), most Indian retailers

range between four and 10, says KPMG.

The other key metric -- stock availability -- is telling too: Where global retailers achieve

more than 95% availability of all stock-keeping units on the retail shelves, their Indian

counterparts cut a rather poor figure at 5-15%.

There are other areas that retailers would have to master -- such as reaping economies in

procurement and transportation, bulk storage, trend forecasting to minimize inventory

levels -- before they can truly claim to have arrived.

26

Early entrants such as Shopper's Stop and RPG Group are acutely aware of this truth:

both took years to bring their supply-chain models to the present efficiency levels. Even a

player like the Dubai-based Landmark Group -- which has been operating in India for

eight years now -- insists it still needs to bring their ERP solution system up to speed.

Others may face new, unexpected problems. Scalability is what the likes of Kabir Lumba,

Executive Director, Lifestyle International, are banking on for growth. The group, which

currently runs 12 stores, plans to open 45 more stores at a cost of Rs 450 crore (Rs 4.50

billion) over three years. Lifestyle's stores attract 40,000 customers every day, and are

projected to close fiscal 2006-07 with a sales turnover of Rs 500 crore.

Again, when it comes to technology adoption and usage, there's a yawning gap between

the Indian retailers and those in the West.

According to a recent survey conducted among the country's top retailers by KPMG,

while retailers like Wal-Mart and Metro have started using RFID technology (offering

high inventory visibility), retailers in India are still to take to bar coding. As systems

grow in size and complexity, retailers would have set aside increasing amounts as IT

spend.

The challenge posed by the global retailers is clearly formidable. But local retailers' more

intimate understanding of their customer base will help them survive.

Besides, even the world's largest retailers have slipped when it comes to the emerging

markets -- Wal-Mart was forced to rework its model in Mexico and a similar thing

happened to Carrefour in China, where it had to revise its strategy. Also, Wal-Mart's

track record in markets such as South Korea and Germany has been nothing to write

home about.

The other big issue for retailers is people. Analysts agree that the manpower shortage will

get acute as retail spreads beyond the metros. The biggest challenge for us and, for that

matter, any retailer will be getting trained personnel.

27

Retail Technology: The Domestic Scenario

In India, one of the major technological developments in recent year, that is impacting

retail in a big way, has been the fast-paced transition from physical, paper-based

exchange of value to a virtual electronic payment mode. Though the process started off in

the early 1990s when automation was first applied to paper based clearing activities,

today we find various payment systems functioning – ranging from paper-based systems

where the instruments are physically exchanged and settlements worked out manually, to

the most sophisticated electronic fund transfer system which is fully secure and settles

transactions on a gross real time basis.

The full potential of retail electronic payment has not yet been explored or exploited in

India. Electronic payments can change the way we shop, the way we pay our bills, the

way we travel, the way we conduct business, the way we bank and the way we live. On a

macro socio-economic level, electronic payments can act as a tool of national

empowerment, change the way businesses function, stimulate economic growth and bring

about social change.

Both Electronic Clearing System (ECS) and Electronic Funds Transfer (EFT) have grown

rapidly over the past six years. ECS volumes have picked up from a base of Rs.67.4 crore

(USD 15.67 million) in 1999 to Rs.9, 676 crore (USD 2.25 billion) in 2004. EFT too has

grown from Rs.0.6 crore to Rs.15, 711 crore over the same period.

28

On the usage of payment cards, the NCAER-Visa study notes that the barely two-decade-

old system has grown from 3 million credit cards in 1998 to an estimated 44 million plus

credit and debit cards in 2004, giving a CAGR figure of 55 per cent. Debit and credit card

transaction volumes also increased from USD 1 billion in 1998 to USD 23 billion in

2004. However, the usage is mostly confined to ATM cash withdrawals (80 per cent) and

the transition to bill payment and shopping has just started picking up.

Organized retailing itself is at a nascent stage in India, constituting barely three per cent

of the overall retail segment. Most organized players have managed to put the front ends

in place, but the relatively complicated back-end supply chain information systems and

underlying technologies are yet in the process of being established. Grocery retailers such

as Food World and Food Bazaar have started tracking consumer purchases through CRM

and co-branded cards, lifestyle retailers are doing so through their “affinity clubs” and

“reward clubs”.

The traditional retailers will always continue to exist but organized retailers are working

towards revamping their business to obtain strategic advantages at various levels –

market, cost, knowledge and customer. With differentiating strategies like value for

money, shopping experience, variety, quality, discounts and advanced systems and

technology in the back-end, change in the equilibrium with manufacturers, and a

thorough understanding of the consumer behavior, the ground seems all set for the

organized sector to come up in a big way.

“The Indian retail sector is witnessing tremendous growth and with the advent of

international players such as Wal-Mart and Tesco on the cards, the adoption of

technology will be a crucial factor in the success of domestic retail players,” says Jangoo

Dalal, senior vice-president- Enterprise, Cisco Systems (India & SAARC), and adds:

“Today we have a number of established domestic retail giants such as Shoppers' Stop,

Pantaloons, Big Bazaar who have been early adopters of cutting-edge networking

technologies and who are in fact driving the growth of the country's organized retail

market.

The future of Indian retail seems very bright, especially with Government showing

intension to open up the market to foreign companies with loads of expertise and

29

resources. Malls are coming up very fast and demand for branded products is building up,

which is fuelling tremendous growth in the organized sector. Things are moving in the

right direction and I feel organized retailing has the potential to grow at 100 per cent in a

few years.

India's leading retail chains Shoppers' Stop Ltd and Pantaloon Retail (I) Ltd have been

among the early adopters of sophisticated technology platforms in their enterprises. Other

prominent players like Lifestyle, Westside, Globus, Ebony Retail have also made

extensive use of technology in the store operations.

WLS is has adopted an ERP system called MOVEX which integrates the data for the

entire organization and connects each and every function. It helps in collating the data for

the organization and makes it available for all the functions of the organization. At the

store end, software called RSF (retail store front) is used.

The company has already decided to use RFID (radio frequency identification)

technology for its warehouses and stores. It is believed that this will help the company to

save lot of time and very fewer chances of errors will remain.

30

COMPANY PROFILE

COMPANY BACKGROUND

Over the last five years, ITC's Lifestyle Retailing Business Division has established a

nationwide retailing presence through its Wills Lifestyle chain of exclusive specialty

stores. Beginning with its initial offering of Wills Sport relaxed wear from the first store

at South Extension, New Delhi in July 2000, it has expanded its basket of offerings to the

premium consumer with Wills Classic formal wear, Wills Clublife evening wear and a

tempting range of Designer accessories that complete the Look.

With a distinctive presence across segments at the premium end, ITC has also established

John Players as a brand that offers a complete fashion wardrobe to the youth of today.

With its brands, ITC aspires to build a dominant presence in the apparel market through a

robust portfolio of offerings.

ITC's Wills Lifestyle believes in the philosophy of 'Enjoying the Change' - the change

that comes through actively exploring one's own multifaceted ness and stretching one's

limits.  This season, Wills Lifestyle presents a complete fashion wardrobe that

complements every facet of your lifestyle - at work, when you're relaxed and while you

party. Wills Lifestyle has been established as a chain of exclusive specialty stores

providing the Indian consumer a truly 'International Shopping Experience' through

world-class ambience, customer facilitation and clearly differentiated product

presentation. Our stores have established themselves as preferred shopping destinations

in the prime shopping districts across the country. At Wills Lifestyle, customers can

browse at leisure, and shop in a relaxed and pleasing atmosphere. The use of space is

refreshing, which is reflected even in the spacious changing rooms. Every store offers an

international retailing ambience with the extensive use of glass, steel and granite,

reflecting the most contemporary trends in store design, thereby creating a splendid

backdrop for the premium offerings.

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At the Images Fashion Awards 2001 & 2003, Wills Lifestyle was declared ‘The Most

Admired Exclusive Brand Retail Chain of the Year’.

THE BRAND “WILLS LIFESTYLE”

The brand wills lifestyle constitutes of 3 sub brands;

-Wills Sport

It constitutes of fashionable relaxed wear for men and women. Over twelve seasons, it

has become the vibrant face of contemporary fashion. At the Images Fashion Awards

2001, Wills Sport was declared ‘The Most Admired Brand Launch of the Year'.

Following this, Wills Sport was declared ‘The Most Admired Women's wear Brand

of the Year', at Images Fashion Awards 2002. This season, Wills Sport presents a

story of charming attraction. Breezy fabrics meet the most contemporary trends. Elegant

layering and accessories play up the magic.

-

Wills Classic

It constitutes of work wear & was launched in November 2002, providing the premium

consumer a distinct product offering and a unique brand positioning. Featuring luxurious

fabrics crafted to perfection with the most contemporary styling, Wills Classic work

wear is positioned as the brand for new age leaders, who inspire innovation and

enterprise, breaking the shackles of hierarchy and domination. It is a meticulously crafted

range that is a fitting tribute to the new age leader. This season, Wills Classic presents a

story of sophistication. Meticulously crafted from luxurious fabrics, the detailing is

exquisite. Elegant accessories make the look irresistible.

- Wills Clublife

Having established a distinctive presence in the premium apparel segment in a short span

of time with Wills Sport premium relaxed wear and Wills Classic new age work wear,

Wills Lifestyle launched Wills Clublife in May 2003 in the growing evening wear

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segment, thereby strengthening its portfolio in the premium segment. The brand is

uniquely positioned to complement the glittering evening life of premium consumers

perfectly. This season, Wills Clublife presents a story of magical allure.

Premium range of apparel is complimented with a tempting choice of fashion accessories.

This season a wider choice of accessories will be offered across ties, cuff links, socks,

caps, scarves, stoles, hand bags, wallets, belts, eyewear and shoes. With the introduction

of premium formal and relaxed jackets in the range, Wills Lifestyle will continue to offer

the definitive look of the season.

33

KEY CONSUMER SEGMENTS

High on Fashion

Low on Fashion

Externally driven

Internally driven

Confident Trendsetter

Conservative

Free Bird

Flashy

Aspiring Follower

SophisticatedArrived

Psychographic Segmentation

Target Segments for WLS

Key Demographics -- SEC A1+, 25-44 years

The success mantra for any brand is that it should be able to attract its target consumer

group and this is possible only when the target consumers will be able to identify with the

brand. To achieve this objective it becomes imperative for a company to understand and

identify its target consumer group.

The target consumers for WILLS LIFESTYLE are people who belong to socio economic

class of A1+ and belong to the age group of 25 – 44. as shown in the above graph the

consumers are divided on the basis of four parameters. The X axis plots the degree of

fashion for consumers and Y axis plots weather the consumer is externally driven or

internally driven. Externally driven consumer is the one who responds to the changing

fashion and one who keeps the track of fashion at international level. On the other hand

an internally driven consumer is the one to who fashion is not much of a consideration

and he wears what he feel comfortable in. As shown in the graph the target group for

WLS are consumers who are high on fashion but at the same time not very flashy. They

34

are highly sophisticated and understand fashion. They are confident and have arrived at

some position in there life. They are the elite part of the society.

35

BRAND POSITIONING

Wills ClassicWork wear

Wills SportRelaxed Wear

Essenza di WillsFragrances, Bath & Body care

Wills ClublifeEvening Wear

A Complete Lifestyle Wardrobe

Lifestyle accessories

Wills SignatureSpecial occasion wear

WLS offers a complete wardrobe to its consumers. The imagery created by the brand is

of a couple brand which offers a varied range of products like work wear, office wear,

evening wear, accessories, designer wear and body care products etc. Whereas the brands

in direct competition like Allen Solly, Louise phillip, Arrow etc are struggling hard to

achieve this kind of imagery.

As a matter of fact WLS was one of the first brands to come up with its own exclusive

brand outlets in the country with a totally new international feel. It concentrated on

providing a world class shopping experience to its customers. This strategy helped them

in achieving the premium image that they wanted to establish in the market and build a

strong and loyal customer base. Now it’s the need of the hour and every brand has its

own EBO following WLS.

The company does not believe in external branding of its products to maintain the

premium ness of the product and develop an aura of mystery around the product as

36

against its competitor brands. The target group of WLS is a very sophisticated lot and

does not like to show off as its personality speaks for itself.

POINT OF DIFFERENCE

In this extreme face of competition it becomes imperative for a brand to differentiate

itself with its competitors and offer something special to its consumers. With so many

service providers in the industry the consumer is bound to get confused and at that stage

he will choose the brand which will give him some thing different and special. At WLS

the following are the functional & emotional benefits that we extend to our consumers;

Emotional Benefit: WLS has established and promoted itself as a sensuous couple

brand. The emotional benefit of wearing WLS is that it enhances one’s charismatic

appeal and makes the person look alluring to his/her partner.

Functional Benefit: the functional benefit is that WLS offers a complete wardrobe

solution with latest and most fashionable clothes.

Desired Consumer Response: WLS is Lifestyle brand that enhances one’s charismatic

appeal and makes them alluring to their partner by bringing them the latest in fashion.

37

PRICE & PRODUCT POSITIONING

Price & Product Positioning

Low Fashion Quotient IR

Color Plus

Allen Solly

Louis Philippe

Park Avenue

Van Heusen

Parx

Others

WILLS

Pric

ing

UCB

Wills strongly established as a premium fashion brand for men & women

High

Esprit

Hugo BossMango

The above table shows that among its competitors WLS is better on fashion quotient But

at same price points. This analysis shows that wills as a brands offers higher value for

money than its competitors in spite being a premium brand and hence adding value to its

consumers. According to this chart competitors like ALLEN SOLLY AND LOUIS

PHILLIP etc much lower in fashion quotient but are charging price equivalent to WLS.

Therefore WLS is strongly established as a premium fashion brand for both men and

women.

38

BUILDING A STRONG BRAND - WLS STRATEGY

-Establishing Superior Consumer Understanding

At WLS it’s believed that to build a strong consumer understanding the company needs

to understand the lifestyle needs of its target group of consumers. This way the company

understands the need of the consumers and comes up with products to satisfy their needs.

For example – WLS came up with a range of active wear when it realized that people are

becoming health conscious.

Understanding the wardrobe profiles of the consumers is also considered an imperative

factor. With the help of such findings company can come up with clothes suited for

various occasions such as formal, evening, party etc and thus satisfy the needs of the

consumer in the best possible manner.

Another important step taken by the company to build the brand is that it takes feedback

from its consumers on a regular basis. This is considered very essential and is done

through a VOC (voice of consumer) program. This program helps the brand to improve

its performance, quality and build a strong consumer base. Under this program the

consumers are asked to fill a VOC form. This practice is regularly followed at all WLS

stores. Recording consumer feedback is given utmost important and is systematically

implemented by the company. This is because it keeps a regular check of brand health in

the mind of the consumer and the company plans its next step accordingly.

39

- Creating Brand Buzz

Powering the brand Powering the brand -- Lifestyle Marketing Lifestyle Marketing

High PR & Buzz

Web Marketing

WI FW designer line

On GroundEvents

High Media visibility Loyalty ProgrammeClub Wills

E-Commerce

Direct marketing

I nstore Marketing

Building a strong Fashion & Lifestyle Brand through 360 degree Marketing Actions

A brand buzz is created using a 360 degree marketing actions. As shown in the diagram

activities like direct marketing, wills India fashion week designer line, e-commerce,

loyalty program- club wills, in store marketing, high media visibility, web marketing, on

ground events, high PR & BUZZ create a buzz around the brand and make it a brand

which is talked about. This kind of marketing technique makes the brand vibrant and

keeps it alive in the minds of the consumer. The high visibility and the buzz created

around the brand makes it stand out among its target group of consumers and increase the

aspiration level of the consumers for the brand.

40

Superior Retail Experience

Wills lifestyle is one of the prime movers in providing world class retail experience to its

consumers. It was one of the first brands to open its own exclusive outlets in the country

with world class infrastructure. The company believes in selling experience to its

customers so that they come back to the brand and maintain long term association with

the brand. In the current scenario most of the companies like Madhura garment, Arvind

mills etc are coming up with good stores and are concentrating on the experiential

shopping and thus following the footsteps of wills lifestyle.

WLS believes in keeping the consumer first and delivers the promise of quality & best

product to the consumer .The company follows “No questions asked return policy” which

is unmatched in the industry. According to this policy a consumer can return and

exchange a cloth anytime from any of the wills outlet and no questions will be asked

from the consumer. The idea behind such a policy is to exhibit immense trust in the

consumer and it shows the confidence of the company on their product. Such a policy

brings the consumer closer to the company and turns him into a loyal company as the

consumer feels that he has bought a product of high quality and feels special and cared

for. This policy tells that the brand is customer centric & sensitive.

- Building Long term customer relationships

Making a new customer is more expensive than retaining an old one. WLS also believes

in this and therefore it runs a program called CLUB WILLS. Club wills is a loyalty

program for the loyal customers. Through this program loyal customers are identified and

special benefits are extended to them. This way a strong loyal customer base is

maintained for the brand.

The growing competition makes it imperative to treat its customers in a special way and

provide them something beyond their expectations. Club wills program helps in

achieving this and differentiates the brand with other brands in the market.

As mentioned before the brand is concentrating on the shopping experience of the

consumer and this program helps in delighting the consumer.

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This program has helped us in catching up with the largest brand in the segment. The

brand has developed a large consumer base of approximately more than 6 lakh. It has also

resulted into high walk ins (2mn people walk into WLS stores per year).brand has

developed a strong loyal base of consumers resulting in high frequency of visit. Most

loyal consumers visit us every 2 months. In fact top 15% consumers account for 50% of

sales.

42

WILLS LIFESTYLE INDIA FASHION WEEK

A vibrant fashion brand for the premium consumer, Wills Lifestyle has introduced the

latest edition of Wills Lifestyle India Fashion Week Line.

With minimalist styling, Rajesh Pratap Singh has created a range that is aesthetically

appealing and can be worn on formal as well as informal occasions and the range,

resplendent in linen, silk and georgette has been crafted in white, beige, neutral colors

and black.

Rajesh Pratap Singh has created a collection of shirts and jackets for all occasions using

both yarn dyed pure linen and light weight chambray linen for the men's line and also

comprises hand stitched embroidered shirts and elegant linen popovers.

However, the colors are neutral with a dash of melon and pink adding zing to the

collection.

The designer has created three unique lines of jackets for Wills Lifestyle. The women's

wear collection features exquisite ensembles crafted from fabrics such as linen, silk and

georgette. With linen shirt dresses and tunics in shades of pink, white and beige, the

range exudes freshness and elegance.

Also floral cutworks and attractive patchwork detailing add feminine vibrancy; whereas a

glittering touch of glamour through georgette skirts with rich silken lining and arresting

evening gowns with sequined work complete the range.

The Wills Lifestyle Rajesh Pratap Line 2007 range is priced between Rs 1795-5995 for

men and Rs 1495-3995 for women. The collection is available at Wills Lifestyle stores

across the country.

ITC's Wills Lifestyle has been established as a vibrant fashion brand for the premium

consumer. Wills Lifestyle offers a complete lifestyle wardrobe for the premium

consumer, incorporating the latest fashion trends and fashion accessories for both men

and women.

43

Wills Lifestyle to focus on designer wear

Encouraged by the success of its first edition of `Fashion Week' line, the lifestyle brand

Wills Lifestyle plans to expand the initiative and is set to launch more such designer

wear, both for men and women, on an annual basis.

Business Line the `Fashion Week' line, created by Rahul Khanna and Monisha Jaising,

was a big hit and contributed almost 15 per cent of their total sales. "Every season, we

would offer designer wear from leading designers under the Fashion Week line," Mr

Chand said.

For the ensuing Wills Lifestyle India Fashion Week, the brand has signed on fashion

designer Rajesh Pratap Singh to create the collection for the Grand Finale (scheduled for

March 25) on the theme `Deeper Love'.

So, by April our stores would have exclusive signature lines from Rajesh Pratap Singh

and Manish Malhotra, who created the grand finale collection for Wills Lifestyle India

Fashion Week in August-September 2006," he added. According to Mr Chand, almost 50

per cent of designer wear purchases at Wills Lifestyle stores have been by those who visit

the store for the first time. On whether there is a good demand for women’s wear. In fact,

women’s wear contributes close to 35 per cent of our sales.

Encouraging response

The encouraging response is not just from metros, but also from tier-II cities such as

Hyderabad, Pune, Ludhiana and Chandigarh, he said. "It's good for the designers too, he

added. For them, partnering with Wills Lifestyle is a win-win proposition. Their creations

now have access to wider audience through our stores."

Also, leveraging its association with Fashion Week, Wills Lifestyle would promote

young talent in the fashion industry. According to Mr Chand, the brand recently

announced an initiative — The Debut — to recognize India's promising young talent in

the field through showcasing their creations.

Wills Lifestyle recently launched men's grooming products such as perfume, shaving

cream and aftershave, which, according to Mr. Chand, were well received. "The segment

44

accounts for 5 to 6 per cent of sales. Talking on expanding brand presence, Lifestyle is

set to expand its retail horizon by setting up 60 more stores across the country in two

years, taking to the total to 100.

At present, the brand, apart from its brand outlets, is present in select large-format stores

in the shop-in-shop format. That apart, the company is planning to give a facelift to its

stores and has tied up with FRCH, the US-based interior designer, to give a new look to

the shops. The new-look stores will be even more exciting and would enable the

shopping experience get better," says Mr. Chand. On the company's mid-market brand

John Players, he said ITC is also planning to expand the brand's footprint by increasing

the number of exclusive outlets to 300 from the present 200 through the franchisee route

and number of multi-brand outlets to 2,000 from the present 1,500 stores across the

country.

Some time ago, John Players signed on Bollywood star Hrithik Roshan as its brand

ambassador and there is a plan to create a special Hrithik Roshan signature line very

soon. The new collection will be at the premium-end of the brand portfolio.

45

ITC grooming WLS to become global brand

In fulfilling this vision, ITC aims to make a major contribution to the fiber-to-fashion

value chain in India to enhance international competitiveness.

The store, according to a company press release, is the 41st of such spread across 31

cities in the country, the first one having been launched in New Delhi on July 15, 2000.

The launch of the New Delhi store also marked the launch of ITC's Lifestyle Retailing

Business Division, a strategically planned initiative to leverage the company's "proven

competencies in brand building, hospitality and countrywide distribution".

The Wills Sport range of apparel, says the company, is sought to be established as "an

international quality, premium full range wardrobe brand for men and women,

constituting relaxed wear for all occasions".

46

JOHN PLAYERS

ITC launched John Players in December 2002 to broad-base the array of branded

apparel that the company offers and further strengthen its robust branded garment

portfolio.

This foray into the youth fashion segment leverages ITC's proven competencies in

building long-term trade partnerships and establishing omnipresent brand availability.

Hrithik Roshan, Superstar and Youth Icon, with his innate style, vibrancy and

playfulness best personify the core attributes of the brand as its ambassador.

John Players offers a complete and vibrant wardrobe of Casuals, Party, Work wear,

Denims and Outer wear incorporating the most contemporary trends, an exciting mix of

colors, playful styling, trendy textures and comfortable fits.

The brand is available across the country through a nation-wide network of exclusive

stores and over 1500 multi-brand outlets.

47

THE FUTURE

Having built a powerful brand portfolio that is making waves across the country, ITC's

Lifestyle Retailing is poised to grow and build a dominant presence in the country's

fashion industry.

Blending diverse skills and leveraging its distribution muscle, the tobacco giant is

unleashing a welter of new businesses. An inside account of the silent revolution.

Ashtrays are ubiquitous inside the pristine white Virginia House, ITC's imposing

corporate headquarters in Chowringhee, Kolkata. That's because puffing cigarettes is de

rigueur here in the heart of India's largest cigarette maker.

Confectionery, like the exotically named three, is just one of the dozen-odd projects that

are in the incubation stage at ITC, where more than 80 per cent of the company's sales

come from cigarettes and tobacco. But that won't last. In the next five to seven years, ITC

wants to change that proportion and generate as much as 40 per cent of its sales from

non-tobacco diversifications. Many of those will be brand new businesses. Like ITC's

lifestyle retail business, which it recently kicked off with the Wills Sport brand of relaxed

apparel, the Expressions range of greeting card and gifts business, and the upscale ready-

to-eat packaged foods business, where it has just tip-toed in with a couple of soft

launches like that of the canned Dal Bukhara. In consultant-speak, ITC is leveraging

competencies from its existing businesses-the most notable is the tobacco business'

distribution-expertise-to tap new opportunities.

If all goes well, these diversifications will add Rs 2,000 crore to ITC's top line by 2006.

But many others contributing to the non-tobacco revenues are old businesses-some re-

purposed beyond recognition, like the group's international business and its infotech

venture, and others completely turned around and revitalized like the paper and

paperboards business.

Yet, it's the clutch of new businesses, many of them still in the nascent stage, that

Chairman Deveshwar seems excited about. He's not the only one. About 800 km away

from Virginia House's throwback-to-the-Raj ambience, in sweltering Tillapudi village, 25

48

km from the eastern coast, Bodapati Rama Rao, a 45-year-old aqua farmer, used to think

a computer at home would attract tax officials as it would lend an air of affluence that a

farmer could ill-afford, especially when he would be named a pratinidhi or lead farmer by

ITC in his area. Locals say it took a bit of explaining of the e-choupal concept before he

saw the benefits of information flow. Today, Rama Rao refers to ITC as the talli (mother)

company and is at ease with the mouse and keyboard and his fluent Telugu is meshed

with words like 'market trends', 'exporters', and 'price patterns'.

Flustered? Well, aquachoupal.com is one of the three web-based initiatives (e-choupals in

company-speak) that ITC's international business division has launched as part of its

strategy to vertically integrate its sourcing operations. Apart from the aquachoupal,

launched in February 2001, there is the soyachoupal.com launched for soya farmers in

Madhya Pradesh in June 2000, and plantersnet.com for coffee growers in Karnataka in

December 2000. ''The aim is to help enhance farm productivity, improve farm-gate price

realization and to cut transaction costs,'' says S. Sivakumar, chief executive, International

Business Division, ITC. The choupals act as facilitators for inputs to farmers-in the aqua,

soya, and coffee domains. There's more. Currently, in the three states, ITC has set up 235

internet kiosks (each managed by a pratinidhi or sanchalak like Rama Rao), which cater

to 10,000 farmers and cover over 250,000 hectares of land. By 2003, it plans to set up

3,000 kiosks to cover 100,000 farmers. The idea, explains Sivakumar, is to also use this

network as a distribution channel for other products. In fact, a pilot project to sell LPG

cylinders using the network is already on.

An Imperfect Smoke

The rationale for ITC's latest burst of diversifications is simple. Although ITC has a 70

per cent share, in terms of volume, of the Rs 11,000-crore, 97 billion sticks cigarette

market, volumes have been stagnant in recent years-they declined in the last three years.

And although thus far, ITC has been sacrificing volumes over margins to drive profits, an

49

inevitable shift of consumers away from the smoking habit is bound to take its toll. Plus,

there is the aspect of deploying cash that the company generates. In 2000-01, gross

income rose to Rs 8,816 crore from Rs 8,069 crore, and net profits jumped from Rs 792

crore to Rs 1,006 crore. Estimated cash flow for the year was over Rs 1,150 crore. That

apart, the company is sitting on reserves and surplus to the tune of Rs 3,300 crore. ''We

have a strong balance sheet and will very soon be debt-free,'' says Finance Director, K.

Vaidyanath.

Typically, cash-rich companies like ITC turn to diversification. So has ITC. In the 1970s,

it diversified into hotels and the manufacture of paper and paperboards, both moves

prompted by the macro-economic environment: the government's encouragement to

ventures that would earn foreign exchange (hotels fitted that objective) and its stress on

self-reliance and import substitution (paper and paperboards fitted that). In the 1980s,

ITC added to its repertoire financial services and retailing of branded edible oils. In the

1990s, ITC's craze for diversification got even stronger. Former chairman K.L. Chugh

unfurled an array of diversifications, including power and infrastructure. Of course, they

never took off, partly owing to strong resistance from BAT, the UK-based tobacco major

that has a 33 per cent stake in ITC. BAT insisted that ITC stick to BAT's core businesses,

which were tobacco and financial services. Thus, ITC Classic set up a financial services

company with Peregrine of Hong Kong and a mutual fund with Thread needle, BAT's

financial services arm.

The fall-out was disastrous. In the mid-1990s, ITC's international business division (IBD)

was embroiled in an unseemly scam because one of its partners, the Chitalias, fell out

with the company and sued it. ITC was also accused by the enforcement department of

violating FERA through IBD. On another front, its financial services business never

really took off and ITC had to finally sell it off to ICICI. Meanwhile, promising

businesses like hotels, and paper and paperboards (which is run by subsidiary ITC

Bhadrachalam) suffered from lack of attention. This was also a period marked by a battle

between the local management and BAT, with the latter ramping up efforts to get greater

control of ITC.

50

Partly the problem lay in way the group's management was structured. The board was

directly responsible for executive decisions. For instance, there was a director in charge

of tobacco, one in charge of finance, another in charge of financial services, one for paper

and printing, and one for IBD. This led to serious turf battles, since tobacco was the main

earner the director in charge obviously wielded a fair clout. As it happened, he was also

closest to BAT.

Things changed in 1994, when Deveshwar, a long-time ITC veteran who had been hand-

picked in 1991 by the Government of India to head Air India, returned to ITC as

Chairman-designate (he assumed charge in 1996). Deveshwar not only managed to stave

off BAT's takeover attempt, but also restructured the company. The number of executive

directors was reduced from eight to four (one-third of the board's total size), and it

became the strategic management arm of the company and not the executive one.

Executive decisions were left to the various business divisions, headed by a chief

executive-led divisional management committee. ''We developed a decentralized

structure with distributed leadership,'' says Deveshwar. Adds Anand Nayak, Executive

Vice-President (Corporate HR): ''Our new structure balances the need for separateness

with that for integration.''

51

A Fresh New Blend

But the big change has been the way in which ITC now looks at each of its

diversifications. Each of them is carefully nurtured and incubated before being launched.

And more important, each one of them is based on a blend of skills that the company

already has. Deveshwar likes to call the new ITC ''a holding company with a venture

capitalist mindset''. And like all good VCs, ITC is a stickler for doing the right things.

''There is a bio-diversity of skills in ITC, 'and by blending the capabilities that exist in

different parts of the group, we want to look at new opportunities.' ITC's lifestyle

retailing business division is an example of that alchemy. In that business, where ITC has

kicked off with the Wills Sport brand of top-end relaxed apparel, the company has

blended three of its existing strengths: the brand equity of Wills, ITC's distribution

network of 2.5 million (1 million directly and 1.5 million indirectly) cigarette retailers,

and services skills from the group's hotels business. Here's how: the majority of the Wills

Sport outlets (35 will roll out across the country by August) will be franchised to ITC's

wholesalers, with whom the company enjoys long-standing relationships; and, sales

personnel at all the outlets will be trained by ITC Hotels.

Likewise, the just-launched greeting cards and gifts business, which ITC expects to

balloon to a Rs 250 crore business in the next five years, draws on ITC Bhadrachalam's

skills of high quality paper and board manufacture as well as ITC's packaging and

printing business. Says Chand Das, Chief Executive of the fledgling division, ''We don't

have to struggle with issues of processing and printing. The roll-out was very quick on

this account.'' Das took just six months from conception to coverage in 74 markets. ''It's

possibly the fastest roll-out anywhere,'' gushes Chairman Deveshwar, whose chambers

have a pride of place for a bright display rack of the new Expressions range of cards. The

recent web-initiatives launched by the company's international business division too draw

on existing strengths: the group's infotech subsidiary ITC Infotech structured the entire

virtual vertical integration model and metamarkets for inputs like pesticides, fertilizers,

etc., that the farmers in different states can use.

But it has been a long haul. When Deveshwar took charge in 1994, he was faced with

problems on many fronts. Although the group's core business-cigarettes and tobacco-

52

were doing fine, morale through the ranks was low. Almost the entire board with the

exception of Deveshwar and B. Mitter were taken into custody by the enforcement

authorities and the non-executive directors had questioned the transparency of ITC's

operations. And lack of focus on existing businesses like hotels and paperboards was

taking its toll. ''We had to take these core businesses up to world-class standards and

demonstrate our commitment to them,'' says Deveshwar.

53

DATA ANALYSIS AND FINDINGS

1. Do you aware of Wills Lifestyle?

Attributes No. of Respondents

Yes 100

No 0

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2. How frequently do you visit?

Attributes No. of Respondents

Once in 2 months 8

Once a month 15

Twice a month 34

Once a week or more 23

Occasionally 25

From the data analysis it is evident that visit to shopping malls is not apart of a routine

unlike what we find in the west where consumers shop more often. This could be

attributed to the lack of spending power among the consumers and also a lack of

awareness among them about the efficacies of a big shopping mall. There are very few

55

who visit once in a week or more. Many of them don’t have a specific pattern of visit

making it occasional.

56

3. What factors influence you to make purchase?

Attributes No. of Respondents

Shop display 7

Novelty of products 46

Special discount deal 22

Family insistence 20

Any other 5

Novelty has become extremely important these days especially for any service unit in

which human touch is of crucial importance. Respondents have pointed out that novelty

of products is an extremely important factor that influences their decision to visit a

57

shopping mall or not. Consumers always like to be pampered and it is here the kind of

service provided by the personnel come into picture. If they are able to give personalized

service to the customers then retailers are going to succeed in gaining and retaining

clientele.

About 22 of the respondents felt that discounts offered by the retailers are an important

factor that attracts them to the stores. This makes it imperative for the retailers to come

out with attractive discount schemes to lure the visitors to their stores.

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4. Do you think that the goods available in Wills Lifestyle are as compared to the market?

Attributes No. of Respondents

Cheaper 10

More expensive 50

Same price 40

59

5. Please rate the factors given below that influence your visit to Wills Life style. (5 - Not

at all important, 4 - Some what important, 3 - Important, 2 – very important, 1 – Most

Important)

1 2 3 4 5

Brand Image 44 22 11 14 9

Advertisement 25 34 15 10 16

Discount 18 22 18 21 21

Location 6 5 10 19 60

Service 20 20 10 30 20

Referrals 38 23 14 15 10

Live entertainment shows 20 20 20 20 20

Face to face with celebrities 31 18 14 7 30

6. What attributes / features do you prefer in Wills Life style?

a) Quality b) Designing c) Service Standards d) Variety

60

Quality 40

Designing 30

Service Standards 20

Variety 10

Quality40%

Variety10%

Designing30%

Service Standards

20%

40% customers like the quality of Wills Lifestyle and 30% like designing of the

garments.theses inferences show that customers trust the brand and overall there is a

positive attitude towards the brand in the market.

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7. Would you recommend Wills Life style to your friends and relatives?

Attributes No. of respondents

Definitely Yes 46

Probably Yes 49

Probably No 5

Definitely No 0

The graph shows that out of 100, 49 respondents said that they will probably refer ITC

Wills life style for relatives and friends. Best form of getting increase in business is

making use of the existing customer base to promote the brand. Word of mouth

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communication between the shoppers and prospective shoppers is the cheapest way to

attract customers towards a brand.

8. Do you think brand image influence the consumer purchase behavior?

Attributes No. of Respondents

Yes 90

No 10

A positive brand image is created by marketing activities that lead to strong, favorable,

and unique associations towards the brand. The definition of customer-based brand equity

does not distinguish between the source of brand associations and the manner in which

they are formed, all that matters is the resulting favorability, strength and uniqueness of

brand associations.

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CONCLUSION AND RECOMMENDATIONS

ITC Wills lifestyle is one of the most recognizable brands in Indian market.

Advertisements and sales promotion, the main promotional tools used by the company

have helped the brand considerably to create a favorable market share for itself. The

company has finally understood the Indian market and changed its promotional strategies

to suit the nature of Indian market. After identifying the passion areas of an Indian

consumer, the brand has come on the same attitudinal plane as the consumer.

At Wills Lifestyle, customers can browse at leisure, and shop in a relaxed and pleasing

atmosphere. The use of space is refreshing, which is reflected even in the spacious

changing rooms. Every store offers an international retailing ambience with the extensive

use of glass, steel and granite, reflecting the most contemporary trends in store design,

thereby creating a splendid backdrop for the premium offerings.

Recommendations

a. Wills lifestyle is one of the first brands in India to come up with its exclusive stores

giving an international feel to the brand. But the fact is that the competition has been

able to match up to its level as far as the look of the stores is concerned. The brand needs

to revamp its stores to retain its prime mover position and to counter competitors like

Madhura garments which boast of the brands like Van Huesan, Louise Phillip etc.

Better looking stores would also help customers to better identify with the premium ness

of the brand and thus would be able to associate better with it.

b. Currently the brand is advertising through print media and is reaching to its customer

base personally through its lifestyle benefits program called the CLUB WILLS. To

increase the awareness of the brand the company should also advertise through

electronic media as it will attract lot of new customers which in turn would lead to higher

acquisition of the customers. It should also concentrate on spreading awareness about its

club wills program and the kind of benefits that it extends as it would lead to higher level

enrollment which in turn would lead to wider customer base.

64

c. The company should start with external branding as all the competitors in the market.

Wills lifestyle is the only brand which doesn’t have any logo or symbol on its garments

externally. Indian consumers are becoming more and more brand conscious and thus

want to flaunt the brand they wear. External branding also acts as a differentiating factor

and gives lot of recognition to the brand. It also acts as an advertising tool and makes the

brand presence felt.

d. The brand should concentrate on its internal efficiencies. This can be achieved in

following ways:

- By concentrating on it’s in store operations such as customer service, inventory and

merchandise management and visual merchandising.

-By improving on its supply chain management & merchandise allocation.

-By understanding the taste of Indian consumer and designing the range accordingly.

-By training their personnel so that they deal with the customers efficiently and provide

them better services.

Successful retailing has always been said to be, about getting the nitty-gritty right of

merchandising, forecasting, the supply chain, training and recruitment of high quality

personnel and category management. Building retail brands that offer value will, in

future, overshadow all these areas, and emerge as the dominant reason for the success of

the organized Indian retailer. Indian retailers should also understand that the retail

experience has become a popular leisure activity and they are vulnerable to any new

competition for customers’ entertainment. Indian retailers must build their brands with

images that seek to entertain and involve their customers. It is the quality and value of the

retail brands that they have sought to establish that will determine the loyalty of the retail

shopper in future.

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BIBLIOGRAPHY

Saunders, M., Lewis, P. And Thornhill, A., 2005. Research Methods For Business

Students. Fourth Edition. Prentice Hall, England

Keller, K. (2004). Strategic Brand Management: Building, Measuring, and Managing

Brand Equity, 2nd education, Pearson Education Pte.

Kotler P, Keller K.L., Koshy A., Jha M. (2007), Marketing Management, 12th edition,

Pearson Education Pte., New Delhi

Schiffman, Leon G.; Kanuk, Leslie Lazar. (2005) Consumer behavior. London : Prentice-

Hall International

Majumdar R. (2006), Product Management, Second Edition, Prentice Hall of India, New

Delhi.

Cooper D.R. & Schindler P.S. (2005), Business Research Methods, Tata McGraw

Kazmi S.H.H. & Batra K. Satish (2004), Advertising and Sales Promotion, Second

Edition, Excel Books, New Delhi

Lancaster, G. & Massingham, L. (1999) Essentials of Marketing. Second edition. Pg 3,

156 - 169. McGraw-Hill International (UK) Limited:Singapore.

ICR, Advertising and Branding

http://www.icrsurvey.com/Advertising_and_Branding.aspx

Brand positioning & punch lines http://lazith.blogspot.com/2006/04/brand-postioning-

punchlines.html

www.itcportal.com/lyfestyle_retailing/lifestyle_retailing.html -

http://www.thehindubusinessline.com/2007/03/20/stories/2007032005370500.htm

http://www.indiatodaygroup.com/btoday/20010621/cover.html

Pummy Kaul and Prashant Mahesh, Outlook Business

the real story of India's retail boom http://www.rediff.com/money/2007/jan/19bspec.htm

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APPENDEX

QUESTIONNAIRE

1. Are you aware of Wills Lifestyle?

Yes No

2. How frequently do you visit?

Once in two months Once a month

Twice a month Once a week or more

Occasionally

3. What factors influence you to make purchase?

Shop display

Novelty of product

Special discount deal

Family’s insistence

Any other__________

4. Do you think that the goods available in Wills Lifestyle are as compared to the market?

Cheaper

More expensive

Same priced

5. Please rate the factors given below that influence your visit to Wills Life style. (1 - Not

at all important, 2 - Some what important, 3 - Important, 4 – very important, 5 – Most

Important)

1 2 3 4

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Brand Image

Advertisement

Discount

Display

Location

Ambience

Service Quality

Referrals

Live entertainment shows

Face to face with celebrities

Playing arena for kids

Membership privilege

6. What attributes / features do you prefer in Wills Life style?

b) Quality b) Designing c) Service Standards d) Variety

7. Would you recommend Wills Life style to your friends and relatives?

Attributes No. of respondents

Definitely Yes

Probably Yes

Probably No

Definitely No

8. Do you think brand image influence the consumer purchase behavior?

Yes No

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