Nautica | Imperium 2018 | Round 1 

Introduction:

You have an apparel store named “à la mode” in Pays de rêve. You are an established name in apparel store business and have very well understanding of domestic market. The secret behind your success is that you know your store so well and your knowledge about the market help you anticipate the future. Your objective for next 6 years is to earn maximum profit by continuing the same approach.

Domestic retail market analysis:

Dynamics of the global apparel market keeps changing drastically. The rapid shift in preference from tailor-made to ready-to-wear apparel has been driving growth in the Indian apparel industry. This is primarily due to the easy availability of ready to wear apparels in different sizes, pattern and colors. The increasing levels of work pressure leave the consumer with little time to go  to  the  tailor,  thereby  leading  to  an  increased  demand  for  ready to wear apparels. Also, rapid urbanization with increasing purchasing power has bolstered growing demand.

There is also another interesting thing about this industry that customer has recently introduced to the internet and credit card. This has connected the world and resulted in spendthrift behavior amongst the consumers thereby fuelling demand. Many retail stores have started or planning to start accepting plastic cards or online payments. The incentives such as cash back offer or discounts on selected sales linked to the plastic money have lured the Pays de rêve consumer to experience the pleasure of ‘cashless shopping’

At the present the market is showing a healthy picture but out of present customer base market attends saturation above 10 M and each store can work on max 1K customers per day.

Additional research about your store:

You know your store in and out as you have been studying its promotional strategies, operation management since a decade. In past few years you were able to maintain some of your figures. Average basket size of a customer is $40 having a frequency of 6 times a year. Further, after analysing consumer behaviour you got to know that you have impressive customer loyalty as around 70% of revenue come from old customers. Hence for upcoming years you are also building a marketing plan to attract new customers as well as enjoying your customer loyalty so that you get maximum profit.

Last year an average profit margin was 30% which was quite decent. But, controlling your operating expenses can also make or break your business. The largest operating cost in an apparel business is place at prime location. In order to enhance your capacity by 20% your operational expense gets increased by $1M. You can also decrease the operational cost which will eventually increases your profit margin by 10% by increasing your operational expense by another $1M.

As you are a keen businessman you are aware of a new weave of internet and plastic money and new ways of cashless transactions. Your business competitors are still working with offline stores and payment method. Last year you did not invest in technical advance which will support cashless transactions in your store.

Marketing Mix: Consumer Promotion

Understanding your customer: 

Pays de rêve has got very interesting set of customers. As it is the land of standard middle class office goers who has predictable lifestyle and continuously growing purchasing power they spend their holidays in apparel stores. They also have periodic purchasing pattern who prefer to go for a shopping on weekends than weekdays.

You have been serving your customers since a decade you can make out their priorities and predict near future based on it. Your customer behaviour research tells you that Pays de rêve people are very price sensitive as they choose lowest price product than being a loyal customer of any particular store. In order to grab attention of such price sensitive customers you have a backup plan of providing coupons and fixed discounts. Adding further, customers prefer to have a rush free apparel store where they get extra attention and convenient customer service.

Consumer promotion:

After analysing your customer you are come up with the possible consumer promotion ideas and they are as follows:

1.       Below The Line Promotion(BTL): Bumper offer to attract a new customer as only 30% of your customers are new. Last year $100,000 was invested in this promotion. You can change or keep the same promotional budget in this year too based on your strategy.

2.       Loyalty Coupons(Loyalty) : If a customer shops from our store he/she will get a coupon value of $10 off on $40 that can be redeemed in next 21 days with redemption rate of 40%.

3.       Dhana Dhan Discount (3D): Additional fixed discount of X% on every purchase. It’s your call to decide discount percentage. This has worked till now as a master key in a price sensitive market.

Rules to be considered:

1.       Total three rounds will be conducted. Every round is of two years.

2.       Input values

Input	Input figure	Unit
Operational expense to increase capacity	Yes or No
Operational expense to reduce operational cost	Yes or No
BTL promotion budget	Numerical Value	$100,000
Loyalty program	Yes or No
3D promotion	Numerical Value	Percentage (%)
Advance technology investment	Numerical Value	$100,000

3.       Submit your answers through google form at any time on or before 6:00:00 AM 23^rd Nov

a.       Google form link: https://goo.gl/forms/OQG7RiyReme0BK883

4.       First round : 23^rd Nov  00:30 to 6:00

Second round: 24^th Nov 00:30 to 6:00

Third round: 25^th Nov 00:30 to 6:00

Happy Boarding !!!!

Welcome to the exciting voyage and we are with your throughout the journey. A ship in port is safe, but that’s not what ships are built for!!! We are impressed that you never come for sailing without a rudder and compass. The journey ahead is going to be thrilling as winds are not going to be fair….

The art of the sailor is to leave nothing to chance !!!  excel yourself !!! make most out of it !!!

Best wishes from team Nautica !! We hope you enjoyed reading the case as much as we did   while working on it.