Consumer_Behaviour

1 DE MONTFORT UNIVERSITY SCHOOL OF BUSINESS & NIELS BROCK COPENHAGEN BUSINESS COLLEGE Final Report on Marketing Project (MARK3008) Possibility for Bombay Dyeing to find the position for its clothing products in Danish market Niraj Shrestha (P10017539) Project submitted in part requirement for the award of BA (Hons) Business Administration 11 May 2011 Supervised by: Andreas K. Thomsen Peter 2 Abstract The impact of globalization in India, now being considered as one of the fastest growing economies together with Brazil, China and Russia, enables companies to take advantage of the possibilities of expansion to international markets. Bombay Dyeing, the leading textile company in India is the subject of this paper. Here, we look at the possible entrance of the company in the Danish market. We try to understand the importance of the consumer buying behavior of the market as such is considered as the biggest factor for Bombay Dyeing’s strategy formulation. Using exploration as the methodology, more insights have been encountered in the process that became necessary in achieving the objectives of this paper. With the use of survey questionnaires and focus group interview, qualitative and quantitative data have been subjected to analysis. The result shows that Danes’ preferences for overall quality, latest styles and fashion and brand are what strongly influence them to buy clothing over its price. In relation to the findings and analysis of the environment, various strategies are recommended. The marketing mix or the four Ps (Product, Price, Place and Promotion Strategies) in the recommendations section is believed to be essential for the company Bombay Dyeing to apply so as to succeed in the Danish market. 3 Acknowledgements First of all, I would like to thank my supervisors Mr Andreas kiær Thomsen and Peter for their continuous support and counsel in the BA (Honours) program. I would like to thank all the members participated in the focus group interview and the questionnaire for this research project for their kind support. Heartily thanks to my family and all my friends for your dedication and encouragement during research. 4 Table of Contents Abstract............................................................................................................................................................. 2 Acknowledgements .......................................................................................................................................... 3 1. Introduction .................................................................................................................................................. 6 Research Question........................................................................................................................................ 6 2. Literature Review “Consumer is god—the importance of understanding Consumer buying behavior.” ... 7 Conclusion for Literature Review................................................................................................................ 13 3. Methodology Description ........................................................................................................................... 13 Research Design.......................................................................................................................................... 13 Secondary Data Collection.......................................................................................................................... 14 Primary Data Collection .............................................................................................................................. 14 Qualitative Data .......................................................................................................................................... 14 Quantitative Data........................................................................................................................................ 15 Demarcation ............................................................................................................................................... 15 4. The Company and Its Internal Analysis ....................................................................................................... 15 Presentation of the company ..................................................................................................................... 15 Internal analysis and overall strategies....................................................................................................... 16 Value Chain ............................................................................................................................................. 16 Generic Strategy ..................................................................................................................................... 19 Growth Strategy...................................................................................................................................... 20 The Internationalization and Expansion Strategy ................................................................................... 22 5. External Environment Analysis ................................................................................................................... 23 The Company’s Environment...................................................................................................................... 23 Micro-­‐environment..................................................................................................................................... 23 Macro-­‐environment.................................................................................................................................... 24 PESTEL Analysis of Danish Market .............................................................................................................. 24 Political.................................................................................................................................................... 24 Economic................................................................................................................................................. 24 Social ....................................................................................................................................................... 25 Technological .......................................................................................................................................... 25 Legal ........................................................................................................................................................ 26 Environmental......................................................................................................................................... 26 6. Target Market Analysis ............................................................................................................................... 27 5 Market Segmentation ............................................................................................................................. 28 Questionnaire Survey.................................................................................................................................. 28 Summary of Questionnaire Survey ......................................................................................................... 32 Choosing Market Segment...................................................................................................................... 33 Target Market Segmentation.................................................................................................................. 33 Competition Analysis (Using Porter’s 5 Forces) .......................................................................................... 34 New Entrants .......................................................................................................................................... 34 Supplier Power........................................................................................................................................ 34 Buyer Power............................................................................................................................................ 34 Substitutes .............................................................................................................................................. 35 Rivalry ..................................................................................................................................................... 35 Analysis of top competitors within the market ....................................................................................... 35 H&M Hennes & Mauritz AB ........................................................................................................................ 36 IC Companys A/S ....................................................................................................................................... 37 SWOT Analysis of Bombay Dyeing & Manufacturing Company.................................................................. 38 (S) Strengths............................................................................................................................................ 38 (W) Weaknesses...................................................................................................................................... 38 (O) Opportunities .................................................................................................................................... 39 (T) Threats............................................................................................................................................... 39 7. Recommendations ...................................................................................................................................... 39 Product strategy ......................................................................................................................................... 40 Pricing Strategy ........................................................................................................................................... 40 Placing Strategy........................................................................................................................................... 41 Promotion Strategy..................................................................................................................................... 41 8. Conclusion................................................................................................................................................... 42 9. References .................................................................................................................................................. 43 10. Bibliography .............................................................................................................................................. 44 11. Appendices................................................................................................................................................ 45 6 1. Introduction Globalization has created a borderless business world. The pace of globalization is growing at a very high rate, thus creating a highly complicated and competitive world as a single market. Due to highly changing market dynamics, there is high competition among the companies all over the world. Most of the companies seem to have a willingness to expand their presence in the global market. Bombay Dyeing, one of the leading Indian Textile Company, is one of them. In this report we are investigating the Danish market as the prospective market for Bombay Dyeing for its clothing and apparel products. The company was founded in 1879 by Wadia group, which is headquartered in Mumbai. It recorded revenue of $346.8 million with the net profit of $ 3.9 million in the year 2010. (Datamonitor: Bombay Dyeing & Manufacturing Company Ltd, 2011) The company is involved in 3 businesses: Textile Business, Polyester Business and Real State Business. But, only the Textile business is considered in this report. The textile business sector of the company was badly affected in the year 2010 due to global economic crisis though the company was able to make a profit from other businesses. (Bombay Dyeing & Manufacturing Company Ltd, 2010) However, the company is striving to expand the sales volume of textile products, as demand of the product is getting higher with the improved economic environment worldwide. The company is focusing on expanding its market entering new markets. Now the question; is Danish market suitable for the company' Which strategies should the company implement to achieve high market share in the Danish clothing and apparel industry' This has been the central research question for this report. To enter new market is very challenging. The company needs to formulate specific marketing plan and strategies before it enters the market. And the key to a successful marketing strategy is based on the thorough understanding of consumer behavior. (Neal, Quester and Hawkins, 2004). Based on this viewpoint, following research question in presented. Research Question What strategies should an Indian clothing company, Bombay Dyeing, choose to enter the Danish market in order to achieve success' To support this question, the following sub questions are formulated. 7  What are the important characteristics considered when Danish consumers purchase clothing products'  What is the decision making process when Danish consumer buy clothing product'  How should the company promote and distribute its products in Danish market' The aim of this research is to prepare and establish the various strategies for the Bombay Dyeing & Manufacturing Company to successfully run its business in Danish market. To draw the sketch of its strategy, understanding of the buying behavior of the Danish consumer and Danish culture is focused. The objectives are:  To identify the buying behavior of Danish consumer  To identify the decision making process of Danish consumers on buying apparel products  To establish the marketing strategies in order to successfully run its business in Denmark using 4 p’s The report is further divided into different sections as: (2) Literature Review (3) Methodology Description (4) The Company and its Internal Analysis (5) External Environment Analysis (6) Target Market (Denmark) Analysis (7) Recommendations and (8) Conclusion. 2. Literature Review “Consumer is god—the importance of understanding Consumer buying behavior.” As part of the big four developing countries, India together with Brazil, Russia and China—also known as BRIC countries—now constitute a third of the world’s economy. (Goldman Sachs, 2007) The post-colonialism period that led to India’s economic reform strengthened their ties with other countries in terms of doing business. The opportunities that were realized out of expanding their market not only domestically but as well as globally enabled India to become one of the fastest growing economies. The current status of India such as mentioned above influenced the exploration of this paper. As global competitiveness continues to drive the country, speculations of expansion in terms of market share should be one of the companies’ agenda. One of India’s leading companies in textile industry, 8 Bombay Dyeing, ventured out their chances in the United States. Whether the environment and other factors such as faced by such an industry in a foreign market would lead them to realize their objectives has become one of the considerations of this research paper. Taking the company Bombay Dyeing into perspective and the current location of residency of the researchers—Denmark, assumptions are made as to the possible entrance of the said company to one of the European markets—the Danish market. With a company coming from a developing country entering into a developed, “prime consumers” society, critical assessments are to be made in terms of the environment referring to the various forces that affect the attractiveness and barriers including the opportunities and the threats; lifestyle and culture; consumer buying behavior and other relevant points of discussion that would be necessary to understand the degree of chances that Bombay Dyeing would be able to penetrate the Danish market. There are different angles and theoretical views that support thorough investigations of the market entrance and penetration, a review on different literatures have been made in relation to consumer buying behavior for various reasons that would be further discussed in this section. As to the availability of the literature, a vast discussion has already been made by scholars. To access the shared knowledge on this field, different websites, databases and books were then subjected in the consideration of this paper. As to theories, according to researchers such as Arnould and Thompson (2005; p. 870, 875) from the Journal of Consumer Research on Consumer Culture theory, he concludes that “…many consumers’ lives are constructed around multiple realities and that they use consumption to experience realities…” and according to his definition, “Consumer culture theory is organized around a core set of theoretical questions related to relationships among consumers’ personal and collective identities; the cultures created and embodied in the lived worlds of consumers; underlying experiences, processes and structures; and the nature and dynamics of the sociological categories through and across which these consumer culture dynamics are enacted and inflected.” 9 There is famous saying “Consumer is god’’, which is defined very clearly today. It is very essential for firms to understand consumer behavior in order to achieve success in this competitive business world. ‘’Consumer behavior is defined as the study of the buying units and the exchange processes involved in acquiring, consuming, and disposing of goods, services, experiences, and ideas. (Mowen and Minor, 2001, p. 3) Authors expressed the phrase ‘exchange process’ in first part of the definition. According to this definition, consumer behavior is an exchange process in which resources are transferred between buyers and sellers. In a simple way, we can say that buyers exchange their money with the products from the seller. In the second part, authors mentioned various steps involved in the exchange process. The first step is ‘acquisition’. It explains about the factors that influence the product and service choices of consumers. Second step, ‘consumption’ is all about how the consumers actually use the product and service. Finally the third step, ‘disposition’ is about the experience (or level of satisfaction) gained by the consumers after using the product and service. It is the important job for marketers to study all these steps and find what are their consumers’ needs so that they can plan some strategy to satisfy the consumers and successfully run their business. As far as the evolution of the topic, consumer behavior, is concerned, the textbook for this field was written only in 1968. (Engel, Blackwell & Miniard, 1994). Before 1968, it had no history of its own. However, the concept was evolved long time ago in 1899 when the American sociologist/economist, Thorstein Veblen, discussed ‘’ conspicuous consumption’’ in his book called ‘’The Theory of the Leisure Class’’. He mentioned that some group of people purchases goods and services not only to survive but also in order to distinguish themselves from others as having superior wealth. ‘’ Conspicuous consumption’’ can be regarded as one of the features of modern capitalist societies like Denmark. In early 1900’s sociologists, psychologists including many corporations regarded Consumer Behavior. Writers began to study, research and suggest on how psychological principles could help advertisers. (Mowen and Minor, 2001). They explained the importance of effective advertising regarding the consumers’ psychology and their buying habits. Later in 1950’s the marketing era started to dominate. The marketing concept highlighted the importance of the study of consumer behavior. The concept was built in the view that customersatisfaction is more important than production of goods for the companies. (Kotler and Armstrong, 1999) An industry begins with customer and his/her needs and wants, not with a patent, a raw 10 material, product designing or selling skill. Organizations should focus on consumers’ needs and wants as it can survive as long as it fulfills those needs. In the present days, consumer behavior is more and more popular as an effective marketing tool. There are already a lot of textbook and literature on this field. Most of the early theories that concern consumer behavior were based on the economic theory, in the concept that individuals act rationally to maximize their satisfactions in the purchase of goods and services. Later research discovered that consumers are just likely to purchase impulsively and to be influenced not only by family, friends, by advertisers and role model, but also by mood, situation, and emotion. All of these factors combine to form a comprehensive model of consumer behavior that reflects both the cognitive and emotional aspects of consumer decision-making. (Schiffman and Kanuk, 2007) In this research report, consumer-buying behavior in the fashion or apparel industry is considered. Fashion is one of the important parts of popular culture and it is the one, which is ever changing. (Solomon and Rabolt, 2004) The fashion industry has always been dynamic and fast moving and the behavior of consumer when buying fashion or apparel products differ time to time as per the changing environment. Marketers should take this into consideration. They need to know when, how and why do the consumers purchase the product. Sometimes, people may not buy for themselves. They would buy, for instance, for their families, friends or relatives. However, a number of individuals may play different role to influence the purchase decision. (Jobber, 2007) Thus the better understanding of decision-making process is vital for the company to formulate marketing strategy in further. To capture the general structure and process of consumer behavior and decision-making process, Hawkins, Best and Coney (2001) presented a model of consumer behavior, which is very clear and easy to understand. Authors stated in the model that individuals develop self concepts and subsequent lifestyles based on a variety of internal and external influences. Internal influences consist of perception, learning, memory, motives, personality, emotions and attitudes. Similarly, external influences consist of culture, subculture, demographics, social status, reference groups, family and marketing activities. (Hawkins, et al., 2001) These influences develop various needs and desires of individuals after which the individuals make decision to purchase, which in turn reflect the characteristics of individual consumer. 11 FIG 1. Overall Model of Consumer Behavior Source: (Consumer Behavior: Building Marketing Strategy, 8th Edition p.26) Hawkins et al. (2001) presented 5 steps of consumer decision process as we can see in the above figure. As authors stated, first step is the problem recognition. As there are different cultures and different lifestyles of consumers, they find different problems and there is a need for them to solve that problem in a different way. Marketers should be aware of problem recognition patterns of their target consumer groups so that they can react to consumers’ problem by designing various marketing mix strategies. The second step mentioned in the model is Information search. Consumers in today’s world are very clever especially those of developed countries like Denmark. Those consumers, after recognizing the problem, go for internal and external information searches to solve them. (Hawkins et al., 2001) Internal information refers to owns’ memory or owns’ experience from the previous use of product. Consumers may use external sources to search information, which can be personal sources (e.g. from friends and family), independent sources (e.g. consumer groups, paid professionals, and government agencies), marketing sources (e.g. from sales personnel and advertising) and experimental sources (e.g. through direct product inspection or trial). These search processes help consumers to find a qualitative, lower priced, a preferred style of products due to which it is easier for them to make decision on purchasing. It is very important for marketing 12 managers to be aware of the nature of information searches, which its target market is engaged in. After knowing this, it is possible to implement specific strategy. Alternative evaluation and selection comes in the third step of decision process after consumer collects information about various alternatives to solve the recognized problem. Consumers may sometimes make a choice depending on simple decision rules such as buying the cheapest brand. At other times they may go through multiple stages and processes to make a right choice. They may compare one brand with another and etc, etc. Marketing managers should be aware of the decision rules followed by the target market, as different decision rules require different marketing strategy. Outlet selection and purchase is the another step where consumers select outlets as well as products either ‘simultaneously’ or ‘product first, outlet second’ or ‘outlet first, product second’. Both manufacturers and retailers need to formulate the strategy based on the decision sequence made by target market. Finally, the post purchase step is about the reaction of the consumer after they made a purchase. Consumer may be satisfied after purchase and so are eager to repurchase. And there is also a probability that consumers experience doubts about the purchase they made. Managers need to encourage dissatisfied customers to complain directly to the firm. Relationship marketing should be focused to expand the exchange relationship with customers so that the firm can gain repeated sales and customer commitment. Globalization is in the high speed nowadays due to which consumer behavior is changing. It is a big challenge for the marketers to study and understand the changing behavior of consumers. It is very obvious that the firms who understand their consumers’ behavior better than their competitors do, will survive and stay profitable in this complicated and competitive business world. Have case of Bombay Dyeing entering the Danish market. As we discuss above it is very important for the company to be aware of the consumer buying behaviour, consumer decision making process and the culture of Denmark in order to achieve success in Danish market. Understanding Danish lifestyle and the internal and external influences that affect Danish people’s need of apparel products are the major areas that the company need to know to compete with the wide range of potential competitors in Denmark. For this, the company should carry out various researches on Danish consumers along with Danish market. Research on when, why, how and where the various target groups of Danish consumers buy the apparel products should be done through for e.g. questionnaire survey, in-depth interview, focus-group interview, various observations, online 13 survey or interview, telephone survey, etc. This will help the Indian company, Bombay dyeing, to understand Danish consumers’ behaviour and purchasing decision according to which the company will be able to formulate marketing strategies so that it can achieve its goal and success in Denmark. Conclusion for Literature Review A thorough analysis of the literature in the field of consumer behavior was conducted above in the literature review. Various aspect of consumer buying behavior and the decision making process was presented. Understanding the consumer behavior for the company is very essential in order to define the company’s strategy. It is suggested that the model of consumer behavior presented in the report can be used by Bombay Dyeing & Manufacturing company to study Danish consumers’ behavior, Danish culture and lifestyle and the decision making process of Danes on purchasing apparel products through various research and surveys. This will support the company to build its strategy so that it can promote and distribute its products in an effective way and be able to capture new market share. 3. Methodology Description The method selected in this paper is discussed in this section. This is intended to give a framework of the “design and tactics” which accordingly refers to the overall plan of the research and the actions needed to be put in details so as to achieve the objectives of the study (Saunders et al, 2009; p 138). Research Design According to the nature of the research, the best design for the topic is “exploratory.” Exploratory per se refers to the design best use when material concerns such as the need for more insights about the problem as well as to track the happenings in relation to the process involved in the research are needed. As with this research paper, the importance of the design was relatively on the restructuring of the questions that subsequently aid to the better understanding of the research in general. For the 14 data, both qualitative and quantitative were used. The qualitative made it possible for us to refine our questions whereas the quantitative was useful in the validation of the qualitative data. Secondary Data Collection For the benefit of the study, secondary data, which have been made available through the previous works of other researchers, were used in this study. The process in collecting the data, mainly done through what is referred to as “desk research,” contributed largely in terms of convenience as access to them are made relatively easy by the use of internet databases such as Euromonitor and Datamonitor. The data sources mentioned above provided recent studies (dated 2010) related to the topic. Datamonitor and Euromonitor in their sites produced very detailed reports, which have been essential in this paper. Primary Data Collection Since the secondary data was not sufficient to support the analysis of the customer buying behavior, the primary data was conducted. For the primary data, we use both qualitative and quantitative. The qualitative data which provided for a deeper understanding in relation to the research questions posted above, however is subjective by nature. The constraints faced were to its validity and reliability. Therefore, the researchers supplemented quantitative data to provide for objective analysis. Qualitative Data The qualitative data was acquired through focused group interview with 8 members from different age groups, both male and female from different areas of Copenhagen. Various questions were asked to these persons in relation to their buying habits. The questionnaire is attached in the appendix of this report for referral purposes. 15 Quantitative Data The quantitative data was gathered through questionnaire with 12 set of questions under which chosen respondents had to answer. The plan was to collect as many responses as possible, however, there were only 110 respondents who completed the questionnaire. The questionnaire sheet is attached in the appendix below. Demarcation This paper has various limitations. I have chosen the company, Bombay Dyeing and Manufacturing Company Ltd. The company is involved in various businesses and has a wide range of product category. But in this report the focus will only be on the apparel and clothing products. So far as the market is concerned, it is limited up to the Danish market as the purpose of the paper is to find strategies for the company to implement in the Danish market. But while collecting primary data most of the respondents were the residents of Copenhagen. Only few respondents were from other parts of Denmark like sjælland, Fyn and Jylland. So, only the few respondents of those areas may not represent the overall population of the areas. But it is assumed that the information obtained from the respondents is transferable to all population. 4. The Company and Its Internal Analysis Presentation of the company Bombay Dyeing & Manufacturing Company is one of the India’s leading textile groups headquartered in Mumbai. Wadia Group, one of the oldest conglomerates of corporate India, founded it in 1879. It is often referred that India has build a position in the global textile zone holding the hand of Bombay Dyeing. The company has a wide range of products. Besides textile goods, the company is busy in producing and marketing home furnishes and it is also engaged in the real estate business. But in this report we are only considering its textile products. The textile 16 goods of the firm are exported to different nations worldwide like the United States, some EU countries, Australia and New Zealand. Internal analysis and overall strategies Value Chain Value Chain is a powerful analytic tool for the strategic planning of an organization. (Lynch, 2010; P. 130) Bombay dyeing has been focusing on the improved demand of qualitative textile and clothing products in national as well as international markets. To develop the value of its products and the value of its overall business, the company is linking its various activities together. It helped the company in the maximization of value creation in the finished products while reducing costs. In order to conduct the value chain analysis of the company, we split the company into its primary and support activities, which can be seen as in the figure below: Primary activities of the company are those that are related with production. It includes: Inbound logistics: which means the firm’s actual receiving and stockpiling the supplies bought until required for the manufacturing phase. It seems that Bombay Dyeing is very aware that the effectiveness of its various activities rely on supply of raw materials and equipments at the reliable price, at right time and in suitable place. There is high fluctuation in the cost of raw materials for 17 the company. Rising price of the raw materials for textile and clothing production was one of the major challenging factors, which the company faced in the year 2009-2010. (Bombay Dyeing an Manufacturing Company LTD., 2010) To reduce cost on the import of such raw materials, it implemented the strategy of buying the materials in a long-term contract basis. Similarly the decision to transfer the manufacturing plants closer to the place, where raw materials are available, also benefited the company in diminishing the production cost. Operations are the activities connected with the production of the product. The company has an advantage of producing each item at lower price in the home country due to the lower labour costs compared to other developed nations like Denmark. The Company's operations can be divided into the Textile divisions, Polyster divisions and Real Estate division. However, only textile division is being discussed. This division was situated in Mumbai in the beginning. But as the cost of manufacturing in that place is high, it moved it strategic step by transferring its manufacturing plant to Ranjangaon where the cost of production is low. (Angel Broking, 2009) Besides, the company has implemented various steps to meet the efficiency of production process. It focused on the different energy conservation measures by regulating the machine functioning to manage the ceiling demand of the textile and clothing products. The company built the equipments with energy efficient motors and focused on the recycling of the waste products. Monitoring tools were fitted in most of the energy consuming machines. (Bombay Dyeing an Manufacturing Company LTD., 2010) These energy conservation measures taken by the company benefited the company, as there is significant cost reduction on energy usage and other utilities. It also helped the company to save the energy cost on account of electricity. Outbound logistics are all the activities related in bringing the finished goods to the different stores and shops. The company has a corporate vertical marketing channel system in home country. It will have a high profit margin to sell its products in the European market due to its low production cost though it will have to face some transportation costs while doing business in Denmark. It directly exports its textile and clothing products to USA and its other export countries. 18 Marketing and Sales essentially analyses the needs and desires of consumers and is accountable for creating awareness among the targeted customers of the organization about its products. (Lynch, 2010) The company’s Department of marketing and sales take care of all these activities. The company has been focusing on various advertising promotional activities. However, these activities were well enough only for the home market. The company needs to pay more attention in implementing the effective advertising and promotions in international level. Service is the element of value chain. It is often needed to provide services like pre-installation or after-sales service before or after the sale of the product. (Lynch, 2010) The company highly focus on customer satisfaction. It is also mentioned in its code of ethics that the company has to be committed in delivering products and services of the good quality standards supported by proficient after-sales service coherent with the demand of the consumers to guarantee their total satisfaction. (The Bombay Dyeing and Manufacturing Company Limited, 2005) All above mentioned primary activities of the company added value to value to its business which helped the company to develop its competitive advantage in the area of cost and quality of its products. To support the primary activities, value chain consists of various support activities, which are described as below. Procurement is the function, which is liable for buying the resources that are necessary for the company’s operation. (Lynch, 2010) The effectiveness of the firm’s activity extremely relies on the supply of raw materials and equipments at the suitable time and price. The purchasing department is motivated with cost efficiency in different buying activities and its processes with purchasing all the materials required for the Company. Its focus is on buying highest quality goods at the lowest prices. Technology Development concern with technical innovation, training and knowledge, which is highly essential for all the companies in order to survive in this competitive business world. (Lynch, 2010) Bombay Dyeing gives higher priority to the technology development carrying out Research and Development (R&D) on various areas. Some of the major areas where the company carried out R&D are; 19 1. New Product Development, which helped the company to successfully launch different unique designs. 2. New process development due to which the company has been able to surmount working troubles in production division and achieving marketing needs Besides, the company has been making various efforts towards technology absorption, adjustments and innovations. (Bombay Dyeing an Manufacturing Company LTD., 2010). All these efforts benefited the company as it helped in cost cutback, quality constancy, improvement in production capacity, increased customer base and access to various developed markets. The company has also gained a certification of producing eco-friendly products. This will play an important role for the company to do business in Danish market. Human resource management is the one, which is related to various elements like recruitment, training, motivation and rewarding the labor force of an organization. (Lynch, 2010) Bombay Dyeing believes in the high output of employees all through autonomy of work. It offers good working environment to its staffs. It highly focuses on promoting and rewarding workers based on performance and loyalty. The management in the company provides education, training and development within the company, so employees are always up to date with the latest technology and skills. The employees have great potential for progression, and personal attitudes are appreciated for steady improvement of the working environment. Firm Infrastructure includes planning and control systems, such as finance, accounting, and corporate strategy etc. (Lynch, 2010; P. 131) The Account and Finance branch of Bombay Dyeing accumulates records and processes information, which administration needs to direct and govern the firm. Wherever possible, this information is passed on simultaneously with investigation and proposes various formatted information to the Top Management for decision-making, business plan preparation and it’s monitoring. Generic Strategy Referring to Porter’s generic strategies, we can find that Bombay Dyeing has the generic strategy of cost leadership due to the large scale of the company. They offer a low cost high quality product and approach a broad target group. 20 Illustration of Porter’s generic strategies: Fig: porter’s generic strategy The overall cost leadership is the most appropriate strategy for Bombay Dyeing as the dominant market leader in response to the price war competition with competitors in the international market. To compete effectively in price-sensitive market, the company concentrates upon achieving the lowest costs of production and distribution costs with setting its prices at a lower level than its competitors. The company provides management team with a prospect to study how the triad of technology, management and labor can be used efficiently. Therefore, with the large-scale economies of the company’s production, strict controls are also being implement including better production management to reduce cash tied up with innovative operating costs. A focus on core product profitability is given to make it more competitive and reduce inventory costs. In addition, concentration on distributing in potential locale also help in cost cutting but still grab the extensive market coverage. Growth Strategy Bombay Dyeing takes use of different growth strategies over the years to increase its sales and profit. Ansoff's Growth Matrix, developed by H. Igor Ansoff can be used to describe the firm’s growth strategy. 21 Fig: Ansoff growth strategy Market Penetration Bombay Dyeing is India’s pioneer in textile manufacturing. The company is investing heavily in advanced technology and innovative product development to boost its leadership position in the global market. When the company launched its apparel products in Indian market, it had very few competitors. Now there are many firms offering similar range of products to the consumer. Even with the presence of these companies, who are competing with Bombay Dyeing, it is able to increase sales in its market through effective delivery, better advertising and offering the product at competitive price. The company has focused on various promotional campaigns, its advertizing strategies and making the product available by adding value. It has also focused on new product innovations with competitive price. It seems that the company is able to attract the competitors’ consumer and its own potential consumers. Product Development The brand has gained popularity since it was launched. To gain higher market share and higher profit, the company pays more attention in the product development. The company is continuously developing various new apparel products through continuous product innovation and up-gradation. 22 It has kept on improving and inspiring itself with value adding that have become industry standard. The company achieved success with its strategy of product development. Due to its new, innovated and upgraded products, the company became success to achieve greater market share along with higher profit. Market Development In the home country, the company reached a saturation point where it seemed difficult for the company to further increase the market share and to achieve a higher return compared to its high investment. The company then started to look into other countries. With the liberalization of the world, improved technology, falling trade barriers among countries around the world, it made easier for the companies like Bombay Dyeing to start business in the international market. At present, US market has been the big market for Bombay Dyeing with approximately 70% of its exports to that country. Besides, US, the company also exports to some European markets, Australia and New Zealand. But, unfortunately the company did not gained the same success story in other markets as in Asian market. A lot more has to be done by the company. The company needs to pay more attention in building appropriate strategy according to the market for which the company is working on. Suggestions to build the appropriate strategy in Danish market to increase its sales are explained later in the report using the theory of marketing mix. The Internationalization and Expansion Strategy The history of the company shows that the company follow incremental stage approach for the internationalization process. The company introduced its products in home country. The product gained a huge popularity along with greater share in the market. When product achieved a maturity phase in the home market, the company started to look at new countries. The firm found some of its neighbor countries and the Asian market, which seemed to be preferred destination. The product is then exported around Asian markets. It gained a lot of popularity in the Asian market as well. When export to Asian markets were growing day by day, the company started to take steps to other continents exploring markets across the globe. At present the company is regularly exporting its 23 products in United States, some European union countries, Australia, New Zealand and Asian markets. 5. External Environment Analysis The Company’s Environment The environment of the company refers to all the factors and forces that influence a company’s potential to operate effectively in offering goods to its costumers. These forces can be classified into the macro environmental and micro environmental factors. Micro-­environment The microenvironment consists of a number of factors of which the key elements are customers, competitors, distributors and suppliers. In danish market, costumers of apparel and clothing products are segmented as men, women and children. Bombay Dyeing has the potential to pursuade and attract these costumers through effective promotion and sales. But this is not an easy job for the company due to the presence of large number of competitors. The company has an advantage of low cost production. Choosing a right distributor and offering them a volume bonus and discount can be the other option for the company to stand in the competition. It can be very costly to the company if it cannot attract and satisfy its distributors. Similarly, supplier is also a key actor with whom the company should have a good relation. The company should focus on buying the raw materials in large amount with one supplier rather than buying low amount with various suppliers. This can minimize the cost of production. 24 Macro-­environment The macro environment includes all factors that can influence the company which are out of the company’s direct control. The macro environment includes factors like political, economic, social and technological. A company does not generally influence any laws. It is continuously changing, and the company needs to be flexible to adapt. In order to do a successful business in Denmark, Bombay Dyeing needs to know about the mentioned factors of macro environment factors of Denmark. PESTEL Analysis of Danish Market Political Denmark being under the European Union and the its’ underlying policies and being a country which works on consensus based policy making means stability in its’ political landscape (Datamonitor, 2011). This is very good for the business world since there is an assurance of the continuous implementation of the policies, which is very significant in conducting any business. Denmark has signed a bilateral agreement with China in 2009 which paved way to a concrete ties between the two countries. It has been voiced out that Denmark is pursuing a relationship with Russia for energy and technology matters and Vietnam for food, beverage and other products (Datamonitor, 2011). This move by Denmark in establishing more ties with other countries can signify for a more open business deal. The formalities in opening a business in Denmark are easy compared to other countries. It will only take 6 days to open a business (Euromonitor, 2011). Economic Denmark was not spared from the economic recession but it has recovered on 2010 with a 2.3% growth rate (Datamonitor, 2011). With this, Denmark has maintained its’ position in being one of 25 the very few countries which has a stable and advanced economy (Datamonitor, 2011). It has been projected that the recovery will be slowly but it will be on a healthy pace of 1.2% for GDP (Euromonitor, 2011). A significant tax reduction that was implemented in order to ease the aftermath of the economic recession has made an impact on the country. (Euromonitor, 2011). Social The Danish society is an ageing population with an expected median age of 40.8 by 2020 (Euromonitor, 2011). This will continue to grow which prompted the government to increase the retirement age from 65 to 67 years old. This is an obvious challenge that Denmark is facing but also a possibility in business ventures that will cater to its’ needs. Though Denmark is an ageing country, it is present fact that 65.3% of its population composed the 15-64 age group and the rest is divided equally between the age of groups of 0-14 and above 65% (Datamonitor, 2011). Having social parties ruled for the past half a century has made a very good impact on the social welfare of the country. This is very evident in its’ impressive ranking in social measurement like GDI, GEM and HDI (Euromonitor, 2011). Income distribution is impressive, literacy rate is 99%, wide range health benefits are being provided to everyone and among others are factors to such ranking (Datamonitor, 2011). Technological Denmark is at the forefront in the technical sector and Danish economy has been able to sustain its position of leadership in innovation. It has one of the most advanced information and communication sector in the whole world. (Datamonitor, 2010) As it has highly developed technology, it has created a appropriate environment for business players. With the fast development of Internet and technology, there is a very evident change in consumer’s behavior in relation to its’ buying preference. More people are inclined in buying things online for its’ convenience and the top selling products are music, clothing and travel and followed by books, 26 concert and event tickets and hand me down things (Euromonitor 2011). Internet retailing has seen a robust growth and it is now an essential mover of the whole retail industry. Such a development in the technological sector has made easier for the businesses to run efficiently. It gives the green signal for the companies like Bombay Dyeing to effectively run their business. Legal Denmark has a free market or it has a free economy. Economic freedom in Danish land implies freedom in investment, financing, and property rights, trade freedom, labor freedom and it is also fact that the country is free from corruption. Denmark ranks in the 6th position in the list of World Bank’s ease of doing Business. Whilst opening a business, it requires only a short span of time and a company needs to follow only 4 procedures. Denmark is very wide open to the investor from foreigner. It promotes them and treat similar as they do with the investor from the country. Due to these all factors, the country has a number of firms from foreign countries and they compete in this competitive market. Nevertheless, the challenge for the country is that, it is facing higher tax rate among the OECD countries. The country has been trying its best to create simpler regulatory necessities and reduction in the administrative burden over business. This clearifies that there is high possibility of competitiveness in the market. Environmental Denmark is at the forefront position in environmental legislations. The nation has a strong participation in the global environmental issues. Danish plan and policies focus on various environment pollution, biodiversity, chemical substances, environmental health and global issues such as climate change. The country is highly concerned about the issues on climate changes and thus it is effectively reducing dependence on fuel energy. 27 Also the Danish consumers are very eco-friendly. Bombay Dyeing needs to highly focus on this while formulating strategy. 6. Target Market Analysis The Danish Clothing Industry is very diverse which translates to the presence of non-danish clothing companies in the top 10 - H&M, Triumph and Benetton (Euromonitor, 2011). This gives us an implication that the Danish clothing industry is open to buying non-danish products even though that it is fact that they are loyal to their own products (Euromonitor, 2011). The Danish clothing industry have seen a 3.1% compound annual growth rate between 2005-2009 which equates to $5,978,800 (Datamonitor, 2011). There is a decelerate growth expectation of 1.8% for the year period of 2009-2014 (Datamonitor, 2011). Interestingly odd enough, even though there is a forecast of decreasing growth, a sounding expectation for further growth is expected (Datamonitor, 2011). This forecast can be attributed to the influx of export from Asia, intentional lowering of selling price in order to gain more sales and the emergence of affordable fashion brands, which stormed the country (Euromonitor, 2011). The Danish clothing industry is 1.6% to the whole composition of the clothing industry in Europe. Bombay Dyeing needs to formulate an appropriate strategy to achieve success in Danish market. First thing the company need to do is to distinguish its target market. For this following steps are taken. 1. Market segmentation 2. Choosing market segment 3. Develop marketing strategy 4. Positioning 28 Market Segmentation The first step in targeting market is the market segmentation. Segmentation implies to the division of the whole market into smaller segments. In other terms it is the recognition of subsets of purchaser within the market that carry up similar desires and express similar buying behavior. This is done in order for the company to find the exact target group. After selecting the certain target group, it will be easier for the company to make the marketing mix effective. To identify market segments, various variables or factors are taken in to consideration. The variables are divided into 3 stages. Stage 1 consists of demographic and geographic variables. In demographic, age group, gender and occupation are considered while in geographic, consumers from centre of Copenhagen, jælland, sælland and Fyn is considered. Various secondary data sources and also primary data sources are used for stage 1 variables. In stage 2 purchase frequency is considered. Primary data are used in this stage, which are collected through the questionnaire survey. In stage 3, variables such as price level, condition of purchasing the product are mentioned. Also for this stage primary data is used. Questionnaire Survey To find out the Danish consumer buying behavior, when they shop for clothing products, a questionnaire survey was conducted. The survey consists of 12 questions and the total number of respondents to complete the survey was 110, who represent the total Danish population in this report. According to the survey, it is found out that female consumers are more interested in shopping clothes. The diagram below shows that 58% of female are very interested in clothes shopping whereas only 42% of male have high interest in shopping clothes. This gives a view to the company that higher number of female is buying clothing products. 29 Figur 1: Who are highly Interested in Clothes Shopping, male or female' Source: Appendix 3 So far as the age group is considered, the respondents are divided in various age groups – Elderly, 36 to 65, 26 to 35, 18 to 25 and younger age group. We can see in the given figure 2 that the age group 26 to 35 occupy huge space, 40% of the chart, showing that this age group population are highly interested in shopping apparel products. Also 18 to 25 age group seems to be highly interested in shopping clothes, which constitutes 34% of the chart. Thus the company is highly suggested to make their target age group of 18 to 35. Figure 2 : High Interest in shopping cloth by age-group Source: Appendix 1 Besides gender and age group, it is also very essential for the company to target the specific area of 30 the country that is of strategic importance. As Copenhagen is the capital city and also the most populated part of Denmark, the area is of much importance, which is proved by the survey. According to the survey, 81% of the total respondents are highly interested in shopping clothing product. But it is also fact that the area, Copenhagen, is the main target of many competitors. The company should effectively move its strategic steps in order to win over the competitors. This, we will discuss later in the report in the recommendation part. Figure 3 : High interest in clothes shopping of population by location Source: Appendix 4 Now, there is one another important question that the company should know about the consumers i.e, how often consumers go for shopping its products. The company’s target should be that population who shop more. 31 Figure 4 : How often different age group population go for clothes shopping' Source: Appendix 5 Figure 4 demonstrates how often the various age groups of Danish population do clothes shopping. It is clearly seen that most of the people from age group 18 to 25 and 26 to 35 do the clothes shopping once a month. After that, the higher number of people who shop once in 2 months also seems high. The number of population who shops more than one time a month is seem high in the age group 26 to 35 years of age. Thus over all, it can be plotted out that the company should target the population of 18 to 35 years. Besides all above, the aim of survey was also to find out the needs and desires of consumers. ‘‘How important are different factors for majority of consumers when they buy clothing products'’’ This is the important question which the company must consider before formulating any strategies. 32 Figure 5 : Importance of factors considered by the consumers Source: Appendix 7 Figure 5 is drawn according to the survey and in this figure, it is very clear that overall quality of a product is given higher priority by the majority of population. It reflects that Danish consumers demand or they have desire for the value added products. Many Danes also consider style and latest fashion. Besides these, Brand is also important. It is important for the company to develop the brand awareness in the Danish market along with quality and design. However, convenience in buying the clothing product is not given so much emphasis according to the survey. Summary of Questionnaire Survey According to the above discussion, it can be concluded that clothing or apparel market segmentation in Danish market is more concentrated on the consumers of 18 to 35 years age group. Also the population from this age group shops the clothing products more often than other age groups. Both male and female population was found to be interested in shopping apparel products. However, female population accounts more percentage than male population while considering the interest of shopping. In terms of location, market segment is highly concentrated on Copenhagen area. As Copenhagen is the capital city and it is with high density of population, it is an opportunity 33 for the company. As such, it is expected that the presence of incumbent competitors would pose a challenge on the company Bombay Dyeing. As per survey result, the overall quality of the clothing product is regarded highly in terms of buying preference followed by the latest designs and fashion, then the brand. Also according to the country report of Denmark, it shows that the consumers of apparel and clothing products are mainly the population of age group 18 to 35. The same results were obtained from the focus group interview. The members in the focus group interview were asked about the important features in clothing products. Six of them gave high importance to the overall quality and latest design. Only 2 members gave importance to the price. Choosing Market Segment Once one or more fragments have been recognized the marketer must choose the most attractive option for their marketing efforts. In this situation the option becomes the company’s target market. From the above segmentation we can conclude that the target group for Bombay Dyeing Company, for its apparel product in Denmark is: Men and women of 18 to 35 year age group people living in the urban areas of Denmark mainly in the capital, Copenhagen. Target Market Segmentation The results of analyzing market segments lead the marketer to consider target-marketing strategies. The company has to decide which strategy the target group should be applied. There are different types of target market strategy: undifferentiated, differentiated, customized and focus marketing. The company needs to choose appropriate target market strategy, which can be differentiated marketing strategy. Differentiated marketing strategy can be very costly to the company, which will increase the cost of the products. But according to survey, it is also true that most of the consumers give high importance to quality and differentiated products. Thus differentiated marketing strategy would be very effective. This, we will discuss more in recommendation section. 34 Competition Analysis (Using Porter’s 5 Forces) Although there are arguments regarding the analysis of the environment using the Porter’s 5 forces, as to the environment’s uncertainty, many strategists however, regard this as a powerful tool for analyzing the competitiveness of the industry. New Entrants The Danish environment as per clothing industry according to Datamonitor (2009) survey is said to have favorable conditions for new entrants. This is evidenced by the overall ranking result from the World bank survey on the “Ease of Doing Business” by which Denmark is considered 6th in the position among 183 countries (Datamonitor: Denmark Indepth PESTEL Insights, 2010) Government regulations in terms of registering new businesses favor the company as compared to the average 35 days procedure globally, in Denmark, it would only take 6 days. This, in relation to cost of capital requirement, benefits Bombay Dyeing as efficiency of service by the Danish government entails cost savings on their end. Another reason is that switching cost is low as Danish market is considered as high income society—money is not the most important factor as to consumer buying behavior (also shown in the results of the survey pointed out above where consumers consider the overall quality, latest styles and design and brand over price). This however does not make Bombay Dyeing’s entrance without challenges. Danes are considered to be premium consumers—preference of branded products is high. Supplier Power Supplier power implies to the capacity of supplier of raw materials to determine the price and provisions of supply. Suppliers can apply power over organization in an industry by increasing prices or dropping the quality of raw materials and services, thus reducing the profitability. Bombay Dyeing has been implementing its strategy in terms of buying raw materials. It is purchasing raw materials with a long-term contract with its suppliers, thereby maintaining good relation with them. Thus it can be said that suppliers have moderate bargaining power. Buyer Power The purchasing power of Danes is low to moderate. (Datamonitor, 2010) Since the Danes are buyers highly influenced by fashion and style, in comparison to price, they have low or moderate bargaining power with the suppliers that produce the value added and differentiated apparel products. Though there is a presence of some sources of apparel and clothing products such as home made products, the possibility that the consumers switch to those products is very low as the 35 company has the potential to differentiate the products. This also weakens the buyer power. As there is low or almost zero switching product cost, buyer may exert some power. Over all, buyer power in Danish clothing and apparel industry is low to moderate. Substitutes The threat of substitutes is weak. (Datamonitor, 2010) In Bombay Dyeing’s perspective, the substitutes are for example, the self-made clothes or custom-made apparels for specific functions such as those needed for cultural events. As the company has the ability to provide value added products, threats from substitutes seem to be weak. Also the substitute products are less beneficial for the consumers, which shows that the threat from the substitutes product is very low. Rivalry The rivalry in the clothing industry in Denmark is high. This is influenced primarily by the low switching cost of the buyers as money is not a problem in switching from one shop to another. Another is the similarity of players in the market—this means that the industries in terms of scale are equal and the customer base is of the same size. This is also due to the growing market size and the similarity of products that are being offered. In the Danish market, an observation is made based upon the impact of the recent global crisis that they have been more open to cheap products. The competitive advantage of Bombay Dyeing is it’s access to cheap resources that enables them to provide cheap quality products. This will be further discussed in the recommendation section of this paper. Analysis of top competitors within the market To frame the company’s strategy, consideration of the strategy of its competitor is highly essential. Thus, competitor analysis turns out to be a vital part of strategic planning of an organization. There is presence of many companies who are currenlty operating apparel and clothing business in Danish market. The following table shows the company share from 2005 to 2010. 36 Table 1: Clothing Company Shares in Danish market Source: Euromonitor International In this section of our paper we focused on the key clothing companies in Denmark, about the market conditions, their market position, their product chain, profiles, strategies, strengths and weaknesses in order to find out the possibilities for Bombay Dyeing to build up its market share in Danish market. H&M Hennes & Mauritz AB 37 H&M is a Sweden based company headquartered in Stockholm. It has a wide range of fashion and related product offerings for men, women and children. As of November 2008, the company activated 1,738 stores in 33 nations. H&M is known as a fast-fashion retailer along with very high rate in collections transform and also known as the low cost producers of trendy products. The company documented revenue of $15,490 million in the year 2009, which is an increase of 14.1% compared to the year 2008 with net income of $2,138 million. (Datamonitor, 2010) The company has been mainly focusing on the low cost of finished products to compete in the global market, which applies to Danish market as well. As far as the strength of the company is considered, the company has a high capacity to access the extensive target market because of its popular brand name. Despite the competitive strength, its focus on the cost has made the customers to perceive that its products are of low quality, which has become the weakness of the company. So far as the threat is concerned, competition on price war is growing. Various companies like Zara are competing with the company introducing quality products in low cost. Many such companies have been a big threat for the company. The opportunity is that the market demand for the clothing and apparel product is growing, as there is improvement in the global economic environment. Presence of good brand name, and economies of scale has made the company easier to expand in different geographies. IC Companys A/S The company is a Denmark based fashion and clothing company. It consists of various 11 wellknown brands like 11 Peak Performance, InWear, Cottonfield, etc. The brands are retailed through the firm’s retail and franchise stores and through more than 12,000 distributors in more than 40 nations. The company traced revenue of $672 million in the year ending 2009 which is a decrease of 3.7% in comparison to the 2008 with net income of $20 million in the year 2009. (Datamonitor, 2010) Unlike H&M the company has been focusing on the product differentiation. The company is in the battle of competition with a distinctive clothing concept focusing more on a quality than price. The strength of the company is that it has a strong portfolio of autonomous brands and it has shown 38 its appearance in wide geographical areas. While the weakness as we can see above, its market share is declining and it has got a high debt equity ratio. The opportunities for the company are growing as the growing opportunities in e tailing and ecommerce. And also the ability of the company to expand through organic growth has become an opportunity for the company. Despite the presence of opportunities, threats from the intense competition are high. SWOT Analysis of Bombay Dyeing & Manufacturing Company Now, after the study of company and conduting various survey and the study of the Danish market environment, the SWOT-analysis of the company is drawn as follows: (S) Strengths Strong brand in home country Good reputation in Asian market Competitive low cost products Good relation with suppliers Quality and innovative products ISO certified products Research and development division Involvement in the environmental and development sector in home country International operations (W) Weaknesses Low brand awareness in Danish market Expensive logistic cost Need to pay customs and duties tax to export to Denmark 39 (O) Opportunities Growing sales of apperal in Danish market Developed information and communications technology (ICT) sectors in denmark Ease of starting business in Denmark (T) Threats Competitive market Price over Quality Danish government on imports may apply new regulations Increased competition from the low-cost carriers Danish consumers are relatively conservative. They prefer to buy products that have already proven their quality and value. 7. Recommendations The research shows that the Danish market is very competitive. To win over the competition, the company is suggested to implement the marketing mix strategy (4 Ps), which is explained as follows 40 Product strategy It is highly recommended that the company should focus on the quality of its product as the survey shows most of the people in Denmark give high importance to the overall quality of the product than its price. The company must focus on the innovation and develop stylish clothes to offer Danish customers to meet their needs and desires. Focus on product differentiation is very important. It is very important for the company to implement the efficient production thereby reducing the cost of production and at the same time upgrade its facilities to manufacture value added products. As Danes are considered as the premium customers, they should be offered premium products. The company should also focus on branding strategy, as the consumers demand the branded products. Pricing Strategy The competition in price becomes big challenge for Bombay Dyeing to make price strategy for the marketing plan. As the competition is intense in the Danish textile and clothing industry, various players are in the price war. The potential rivals are offering low cost and discount products. Thus in Danish market, the company should focus on manufacturing low price and high quality products. As mentioned above efficient production chain can help the company to reduce the product cost. In order to increase the market share, the company needs to introduce lower priced innovative brand than that of rival competitors. In order to maintain the quality with price, the company needs to offer the greater benefit for consumers with the super-value strategy. Based on the market research, the company should make its product more valuable based on the quality, reliability, and availability. In addition, the company should also use the price-adjustment strategy to regulate the prices. The strategies like quantity discount and special offer and offerings according to the seasonal period 41 can be implemented in the company’s pricing strategy. Placing Strategy Proper distribution of product is very essential. Distribution plays big role to make the brand positioning market strategy for the high availability in anywhere and anytime. The availability can be achieved by ensuring the recent trands and availability of its products across the country, through strategic manufacturing locations and extensive distribution network. The strategy of the company should highly focus in developing the distribution network to work more closely with retailers, responding faster to their feedback. Based on the numbers of retail market shops in urban areas of Denmark, the company should go through to develop the channel distribution. Looking forward based on the demographic trend opportunities, to support the distribution, the company should focus to expand the division’s sales force focusing on a wider spread of retailers on Copenhagen, but still expand into the wide region in all around Denmark. Promotion Strategy Awareness of Bombay Dyeing’s brand is very low in Denmark. Accepting this fact, focus on the promotion and advertising is very important at this point, though it can be a bit costly to the company. The company should spend part of budget to support the promotion of its brand. The company can take the advantage of highly developed information and communication technology (ICT) sector of Denmark to promote and advertise its brand. Through advertising, the company needs to convince the consumers in Denmark that the product offered by the company is of standard quality, unique and reliable. The most important in doing the promotion is the message that the company want to deliver to the target market. In order to capture the target market and positioning of the brand, the company may choose the slogan “ Bombay Dying for Every Smarts”. Through adverting, the company may show that the company is concerned about the social responsibility, as it matters a lot to Danish consumers. It can be done by taking part in various programmes. Moreover, sponsorship advertising corporate with the media TV show will be 42 considered as the functional image publicity. Moreover, the tools than the company should use for the sales promotion is the premium offer, as already stated in the pricing strategy. 8. Conclusion Based on the research analysis and findings, it can be concluded that within the Danish market, Bombay Dyeing has to go through tough competition to achieve a high market share. The most important advantage that the company has is its low cost production. The company can utilize the capital saved from the production in the product differentiation, which can make the company possible to compete in the market. Bombay Dyeing can succeed in the Danish market if they can effectively apply its advantageous factors to attract its target group. Great efforts have to be done to improve its position. The company has to focus on finding the right distributor that can distribute its product effectively so that it can easily be reached to consumers. Danish consumers are considered as premium consumers. Accepting this fact, the company needs to fulfill their demand providing value added products. A focus needs to be given in the innovation of the products and differentiation. Brand awareness among the Danish consumers is very important. Danish consumers are selective while purchasing and they purchase the products, which are already proved to be of good quality. So the company needs to convince the consumers in Denmark that the product offered by the company is of standard quality, unique, and reliable. For this, the company needs to focus on promotional activities. As Denmark has highly developed ICT sector, the company can utilize it for its promotion. Finally, the effective marketing mix strategy, its generic strategy of cost leadership and focused target market strategy can find the way for the company to strengthen its market position in the Danish market. 43 9. References Angel Broking. (2009). Bombay Dyeing: Company Update. 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(2007). Consumer Behavior, 9th edition. New Jersey: Pearson. Solomon, M., Bamossy, G., & Askegaard, S. (1999). Consumer Behavior: A European Perspective. New Jersey: Prentice Hall. 44 Solomon, M.R.,& Rabolt, N.J. (2004). Consumer Behavior in Fashion. New Jersey: Pearson. The Bombay Dyeing and Manufacturing Company Limited. (2005). Wadia code of ethics and business principles applicable to non-­‐executive directors : As adopted by the Board of Directors of The Bombay Dyeing And Manufacturing Company Limited at its Meeting held on 14th April, 2005. Retrived February 2, 2011,from http://www.bombaydyeing.clicherebel.info/bombaydyeing.../Wadia%20Code%20of%20Ethics%20for%20N on-Executive%20Directors.. 10. Bibliography Marks, J 2007, 'Bombay Dyeing Eyes U.S. Office', Home Textiles Today, 28, 19, p. 26, Business Source Complete, EBSCOhost, viewed 7 March 2011. 'Bombay plans stock buy-­‐back' 2002, Home Textiles Today, 23, 50, p. 4, Business Source Complete, EBSCOhost, viewed 8 May 2011. 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Survey Questionnaire Dear respondents, We are doing this survey in order to obtain more comprehensive knowledge about the apparel or clothing sector in Denmark. So, we would highly appreciate if you spend a few minutes answering the questionnaire. Your information will be treated anonymously! Thanking you in advance. 1. How much are you interested in shopping clothes' o Very interested o Interested o Not very interested o Not intererested at all 2. How often do you buy clothing products' o Almost never o Once in 6 months o Once in 2 months o Once in a month o From 2 – 3 times a month o More than 3 times a month 3. What do you prefer to buy when shopping clothes' o Brand new clothes o Clothes on sale o Clothes with discounts 4. How much would you like to pay for a normal every day dress' 46 o Less than 100 Dkk o 100 to 500 Dkk o 500 to 1000 Dkk o 1000-­‐1500 Dkk o More than 1500 Dkk 5. Where do you often do your clothes shopping' o Department Stores o Discount Stores o Small Specialty Shops o Online Shopping o Other (please specify in the box below) 6. How important are the following factors when you do clothes shopping' Very important Important Not so important Not important at all Overall Quality Latest Styles or fashion Good Brand Reasonable price Convenience in buying Effectiveness 7. Which of these brands do you know' o H & M Hennes & Mauritz AB o IC Companys A/S o Industria de Diseño Textil, S.A. o Benetton Group SpA o Esprit Holdings Ltd o Claire Group A/S o None of them 47 8. Which one of these brands do you prefer' o H & M Hennes & Mauritz AB o IC Companys A/S o Industria de Diseño Textil, S.A. o Benetton Group SpA o Esprit Holdings Ltd o Claire Group A/S o None of them 9. Do you have any recommendations for clothing companies to better meet your satisfaction' o I don't know o I'm already very satisfied o I would recommend as follows: 10. What is your age' o Younger than 18 years old o From 18 -­‐ 25 years old o From 26 -­‐ 35 years old o Older than 35 years 11. What is your gender' o Male o Female 12. Which part of Denmark do you live in' o Center of Copenhagen o Sjælland o Fyn o Jylland 48 Appendix 2 Count of 1 How much are you interested in shopping clothes' Column Labels Row Labels Very Interested in clothes shopping Interested in clothes shopping Not so interested in clothes shopping Not interested at all Grand Total Elder 2 1 0 0 3 36 – 65 years old 5 1 1 1 8 26 -­‐ 35 years old 25 15 2 0 42 18 -­‐ 25 years old 21 17 3 1 42 Younger than 18 years old 9 4 2 0 15 Grand Total 62 38 8 2 110 Appendix 3 Count of 1 How much are you interested in shopping clothes' Column Labels Row Labels Very Interested in clothes shopping Interested in clothes shopping Not so interested in clothes shopping Not interested at all Grand Total Female 36 25 1 0 60 Male 26 13 7 2 50 Grand Total 62 38 8 2 110 Appendix 4 Count of 1 How much are you interested in shopping clothes' Column Labels Row Labels Very Interested in clothes shopping Interested in clothes shopping Not so interested in clothes shopping Not interested at all Grand Total Center of Copenhagen 50 33 6 1 90 Fyn 3 2 0 0 5 Jylland 7 2 2 1 12 Sjælland 2 1 0 0 3 Grand Total 62 38 8 2 110 49 Appendix 5 Appendix 6 Appendix 7 Count of 20 What is your age' Column Labels Row Labels Elder 36 -­‐ 65 years old 26 -­‐ 35 years old 18 -­‐ 25 years old Younger than 18 years old Grand Total Almost never 0 0 0 0 0 0 Once in 6 monts 0 2 5 9 3 19 Once in 2 months 2 1 10 10 5 28 Once a month 1 5 18 20 5 49 More than 1 time a month 0 0 9 3 2 14 Grand Total 3 8 42 42 15 110 Count of 5 How much would you like to pay for a normal every day dress' Column Labels Row Labels Less than 100 Dkk 100-­‐ 500 Dkk 500-­‐ 1000Dkk 1000-­‐ 1500 Dkk More than 1500 Dkk Grand Total Elder 0 1 2 0 0 3 36 – 65 years old 0 2 1 2 3 8 26 -­‐ 35 years old 0 10 14 10 8 42 18 -­‐ 25 years old 0 15 18 5 4 42 Younger than 18 years old 0 5 5 3 2 15 Grand Total 0 33 40 20 17 110 50 How important are these factors for clothes shopping' Very Important Important Not so important Not important at all Grand Total Overall Quality 92 13 3 2 110 Latest Styles and Fashion 80 20 6 4 110 Good Brand 56 30 20 4 110 Reasonable Price 41 29 25 15 110 Convinience in buying 33 7 60 10 110 Effectiveness 39 40 25 16 110 Interview Guide for Focus Group Interview 1. What criteria do you choose when you buy apparel and clothing products' 2. What are the features that are most important in clothing products' 3. Is Price an important factor to make a decision while purchasing clothes' 4. What is you view about quality and innovation of the clothing products' 5. Do you prefer latest design or cheaper product'