1

The DiscoNinjas

CASE STUDY

Jamnalal Bajaj Institute of Management Studies

Hardik D. Shah Kaushal DedhiaVikram Joshi

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Agenda

Situation Analysis

Understanding the Customer

Defining the Marketing Strategy

Strategic Roadmap

Need Gap Analysis and Brand Extension

IMC Campaign

Pre Purchase – ATL/BTL Activities

During Purchase – Improving In-Store Experience

Post Purchase – Improving Ownership Experience

Appendices

3

Situation Analysis

Value Same TG?

Com

petit

ors

FastrackLiviya

HidesignGiordano

Louis VuittonHermes

Eliza DonateinBurberry

Da Milano

0 0.5 1 1.5 2 2.5 3 3.5 4

?? YesTradition Yes

Corporate YesTradition YesHeritage Yes

Value YesContemporary Yes

Trendy NoYouth No

100% pure leather to gain the ‘Trust’ to build a sustainable brand

Source: euromonitor.com, primary research

Cons

umer

68%

20%

13%Shoulder and Tote BagsTop Handle BagsClutches and Wristlets

As per our primary research, customer segment starts above 25 and extends till

40

Target Group Correction

Existing 23 – 35 years

New 25 – 40 years

Most of the customers are SEC A, living in Metro cities

Own a Four wheeler Own a smart phone Use Laptops / Tablets

Current Composition of Handbag Sales

Mar

ket

2012 2013 2014 2015 2016 2017

2596.83

4258.74

Gro

wth

: 10.

4% C

AGR

Uno

rgan

ized

sec

t: 6

0-70

%

Key Growth Drivers: Increasing number of working women Rising incomes Increasing fashion consciousness and aspiration levels Growing influx of foreign brands Increasing number of malls and modern retailing outlets

Handbag Market Size

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Understand The Customer

Repeat Purchase Inhibitors

Source: Primary research with store visitors, Da Milano’s feedback books

Occasions of Use: Meetings, Socializing, Going Out with Friends, Party Occasions of Purchase: General, Gift events, Sale Stimulus of Purchase: Occasions, Replacing worn/old productType of Stimulus: Emotional

Need: To look trendy, stylish Products: Handbags / Purses / Clutches /Wallets for all occasions; Belts, Shoes

Age: 27 – 40Gender: FemaleLocation: MetrosSec A

Brand Recall - TrustTop 3 key buying factors

Source: Mckinsey Insights 2011 – Luxury Consumer report and Primary

Research

Occasions of use: Meetings, Everyday Office, Socializing, Party , TravelOccasions of Purchase: General, Gift events, Sale Stimulus of Purchase: Occasions, Replacing worn/old product

Type of Stimulus: Rational, Emotional

Age: 27 – 40Gender: MaleLocation: MetrosSec A

Need: Utility while maintaining status quo ; To GiftProducts: Wallets, Belts, Shoes, Manbags, Folders

3. Good Material

2. Innovative Design1. Superior

Craftsmanship

1. Want to try and have a wardrobe of different brands

2. Need a separate product for every occasion

3. Do not have a connect with the brand

4. Lack knowledge about new arrivals / sale periods

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Genuine Leather Craftsmanship Premium

Challenge : Marketing Strategy

Value Proposition: Premium designs handcrafted with 100% pure leather : Trust

Secondary Associations - CreatePrimary Brand Elements - Maintain Name : Da Milano Logo : Deer

Symbols: DM Packaging: Elegant

Personalities: In film / twitter female actors Events: Wine tasting, Fashion shows

Purchase Decision Influencers: 1. Celebrity Trends 2. Fashion Magazines 3. Internet Research

Distribution Channels: Own outlets to maintain exclusivity & counter counterfeits : FOCO / COCO

Strategies to Increase Repeat Purchase Know customer preferences and remind Brand extension for more categories of purchase Campaign on Changing Trends per season Complete your wardrobe with different products

Strategies to Increase Brand Recall Connect Da Milano to 100% pure leather Build on core value of “Trust us for leather” Gift leather products to celebrities Run features in fashion magazines

Pre Purchase During Purchase Post Purchase

Infuse Quality of Trust Top Of the Mind Recall :

DM = leather

Modernize experience Enrich experience Learn trends / likes

Maintain relations Inform new trends/ stock Bring back to store

Trust

Vision : To be first choice in Luxury Leather Goods

1. To ‘push’ repeat purchase across categories quarter-on-quarter2. To ‘pull’ repeat purchases on the same category year-on-year

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Deliverable : Strategic Roadmap

IMC Campaign

Q1- 14

Brand Extension

Advertising ATL / BTL

Q2 -14 Q3-14 Q4-14 Q1-15 Q2-15 Q4-15 FutureQ3-15

Repeat Purchase

QoQ

]755025

Launch of new product

Integrated Marketing Campaign

On Going BTL

Quarterly Trigger for

Repeat Purchases

QoQ repeat

purchase rate > 60

Extend brand according to consumer needs

Implement IMC on core values based on Brand Recall

parameters

Implement tactics to repeatQoQ purchases Use ATL/ BTL to pull/push sales

Stock Clearance

Sale

1 2 3 4 5 6 7 80.005.00

10.0015.0020.00

Cost / Benefit

Goals

Stock Clearance

Sale

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Need Gap & Brand Extension

Launch of new products, to suit occasions of use and occasions of purchase unaddressed by existing portfolio

Conjoint Analysis Suggests following brand extensions Watches, Jackets, Hats & Gloves

Based on primary research, we found most consumers would want Watches

Challenge : Economies of Scale1. Watch straps will utilize the small side strips remains2. Jackets, Gloves etc. will be produced in parallel with more RM order

quantity at EOQ

Launch of New Products

1. Recycle Da Milano leather for corporate gifts 2. Reduce RM costs and import costs over RM

Recycle

1. Order RM so as holding cost does not exceed 50% of net profits2. RM types should be kept at minimum to reduce overhead costs in import

Procurement

Watch

Jackets

Hats

Gloves

0 2 4 6 8 10 12 14 16 18

New Products that customers want

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Customer Touchpoints

• 25-40 years, Metro, Sec AIdentify the Target Audiences

• Style and elegance, Handcrafted from 100% pure leatherDesigning a Message

• INR 2 CrEstablish Marketing

Communications Budget

• Billboards• Magazine Ads, Airport Luggage tags

Marketing Communication

Channels

• Ask the customers to associate a brand with Leather GoodsMeasure results

Work FriendsFamily Family

E-mails, Travel exposure

Gifts, Word of Mouth

Social Media

Magazine

Deliverable : IMC Campaign

To increase top of the mind brand recall and associate DA MILANO with 100% pure handcrafted leather

Objective

0 1 2 3 4 5 6 70

2

4

6

8

10

12

14

Series1; 11

4

98

10

13Brand Recall Scatter Map: Leather Goods

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Challenge, Deliverable : ATL/BTL Activities : Pre Purchase

ATL Cost BTL CostHoardings 3.0 In film advertising 1.00

Print Media 1.0 Sponsorships in Fashion events 1.00Advertising in 5-Star Hotels 0.50

Airport Baggage tags 0.52Sponsorships in Wine Tasting

Festivals 0.20

Android, iOS Application 0.02Social Media campaigns and

contests 0.06

Total 4.0 3.3

Cost Approximations

All figures in Rs. Crores

Print ads in fashion magazine Billboards in upmarket locations

ATL

Advertising in 5-star hotels Airport Baggage tags In film advertising Sponsorships

Art / Fashion Shows Wine Tasting Festivals

BTL

ActivitiesAdvertising Strategy

Advertise

Build Trust Increase Repeat Purchases

100% Leather

Associate with stars / films

Replace : Give old bags back / to NGO and get

20% off

Discounts

Show change in trends

Remind need / occasions

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In-Store Experience : During Purchase

Product SelectorDigital Catalogue

Provide tablets to customers to browse through the catalogue in detail, search and sort

Tablets will also contain 100% pure leather posters

1. Digitizing the Shopping Experience

2. Making the customer feel warm

Serve beverages on arrival Offer candies to kids Greet the customers on arrival and departure

3. Wishlist Section

Dedicate a rack to the most ‘aspired’ products across WISHLISTs

Enable customers to choose product via a app App results will be based upon:

Product type Occasion

Price Range Color preference

Colour

Texture

Occasion

Size

Price

Product AttributesConsumer Behavior :

Tag WISHLIST products with customer info Save common attributes of shortlisted products and tag to

customer Each quarter and purchase occasion, send customer SMS/mail :

Offering products : from his WISHLIST / with similar attributes

SHORTLIST 2 to 3 products

BUY one from the shortlist

Put the remaining products in WISHLIST

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Incremental Benefit Loyalty Program10% off on first 5 purchases >> 50% off on very 6th purchase

Birthday and Anniversary GiftsBag KeychainsBag Car Plushies : Hanging from car mirror and can hold cellphones etc.

Ownership Experience : Post Purchase1. Use the Wishlist

2. Servicing

Every quarter, send SMS/mail suggesting products to customer based on his/her wishlist Send reminders for purchase occasions : birthdays, rakshbandhan, mother’s / daughter’s day, anniversary Whenever items in new stock arrive > Search for items that match attributes liked by the customer > Send

SMS / mail displaying product and inviting him/her to take a look Update about changing trends

Send SMS/mailer to the customers stating: “Your free service with Da Milano is due now. Visit any nearby store for

the same” “Get your Da Milano product serviced before Diwali / Christmas / any

other festival. Its absolutely free as per our lifetime warranty program”

3. Loyalty Programs

4. Replace Program : Return bag to NGO, get 20% Off*

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Conclusion

Prob

lem

s

Economies of Scale

Increase Repeat Purchases

Increase Brand Loyalty & Recall

Solu

tions

EOQ Brand Extension

Push Across Categories QoQ

Pull Same Category YoY

Build core value of TRUST

Impl

emen

tatio

n

Recycle RM

Make Watches

100% Leather

Hand Crafted

Premium

Purchase Experience

Post In Pre

IMC

Adve

rtisi

ng

DigitizeEnrich

Wish list

ServiceRemindLoyalty

Pull Same Categories YoYPush Across Categories QoQ

Impa

ctRepeat Purchases > 60% QoQ

Increase Brand Recall form 7% to 15%

Reduction in Cost

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Appendix – I

Gucci20%

Da Milano7%

Hidesign16%

DKNY15%

Louis Vuit-ton18%

Others24%

Leather Association

Watch40%

Jackets30%

Hats21%

Gloves9%

New Product

Design21%

Variety of Products

28%Quality23%

Price14%

Nice experience5%

Lifetime warranty9%

Most liked factor

Prim

ary

Rese

arch

Current Year Year 1 - forecast Year 2 - forecastRepeat Purchase Rate 20 20 20 20 20 25 35 40 45 50 60 65

New Customers 25.26 26.19 34.80 27.16 28.17 29.21 36.09 30.29 31.41 32.58 37.42 33.78Repeat Purchase 5.05 5.24 6.96 5.43 7.04 10.22 14.44 13.63 15.71 19.55 24.32

Sales forecast 29.80 31.25 40.04 34.12 33.60 36.25 46.31 44.73 45.04 48.28 56.97 58.11

Sales without increase in repeat purchase 29.80 31.25 40.04 34.12 33.60 34.84 41.93 37.51 37.47 38.86 43.94 41.26

Incremental Revenue 0.00 0.00 0.00 0.00 0.00 1.41 4.38 7.22 7.57 9.42 13.03 16.84

Financials

All figures in Rs. Crores

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Appendix – II

Details Jet Air Spicejet IndiGo Go Air

Fleet size 82 30 59 12

Flights 357 257 361 160

Passengers (approximately) 12,00,000 10,00,000 16,00,000 6,00,000

Quantity / Month 18,50,000 11,70,000 25,00,000 5,75,000

Cost / Month Rs. 21,00,000 Rs. 13,00,000 Rs. 30,00,000 Rs. 6,50,000

Cost / Passenger Rs. 1.75 Rs. 1.3 Rs. 1.88 Rs. 1.08

In Flight advertising estimation

Source: www.themediaant.com

Page position Card rates

Full Page (Femina) Rs. 400,000

Back Cover (Elle India) Rs. 500,000

Area Lit / Rate per Sq. Ft.

Peddar Road Rs. 1000-1500

Monthly cost of 20*20 feet poster Rs. 4-6 lacs

Print & Billboard estimation