Westside - Business Insights, Trends and Future Plan

Posted in Finance Articles, Total Reads: 1631 , Published on 01 March 2017
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Westside is a retail chain operated by Trent that is the retail arm of the TATA group. Westside offers a predominantly exclusive brands model across women’s wear, menswear, kids’ wear, footwear, lingerie, cosmetics, perfumes and handbags, household furniture and accessories. Although Westside’s sales have been growing steadily for the last five years, it is still lagging in competition with some other Indian retail stores like Pantaloons.


EXISTING PRODUCT STRATEGY

PRODUCTS CHARACTERSTICS: Westside stores have owned brands and other brands in the ratio 3:7. There are two main divisions in the product category; namely, Apparel (Men's wear, women's wear, lingerie and kid's wear) and Various Utility Items (Home decors, Jewelry, Deodorants, Cosmetics etc.). Along with this they also have a range of Footwear for men and women.

PRODUCT DIFFERENTIATION: Most of the products are in-house products and differentiated on the basis of their superior quality along with the promise of Tata’s brand name. All products offer a high conformance quality.



Image: company website


BCG MATRIX


Westside recently followed two way lines stretching as it used to serve mainly the upper middle class market and wanted to expand customer base as well as increase the profit margins.


PRODUCT LIFE CYCLE

PLC for product range of Westside

Apparel

Footwear

Bath and Body

Fragrances

Cosmetics

Men’s Wear

Kids wear

Women’s wear


Studio West



BOMBAY PAISLEY

BOOTS



GIA

WEDGES

ASCOT


LOV

STILETTOS

ETA


MIX N MATCH

KITTEN HEELS

WESTSPORT

HOP

NUON

BALLET SHOES

WESTSTREET

YOUNG & FREE

SASSY SODA

PUMPS

OAK & KEEL


WUNDER LOVE

SANDALS

NUON


WARDROBE

FLIPFLOP



KURTA SETS




ZUBA






Decline

Growth

Growth

Growth

Introductory


PRICING STRATEGY

Westside keeps the price of the store products in a range matching or below its competitor’s price range.

o The pricing method used by Westside is ‘Value Pricing’ whereby the products are offered to customers at a constant low price throughout the year with help of various sales and discounts.

o Seasonal pricing is used to increase the movement of products out of the store where a discount is offered on purchase of seasonal products.

o Bundled pricing is also used to motivate shoppers to buy in bulk.


PLACE STRATEGY

Westside has most of its stores in malls and few exclusive showrooms in big cities. Westside stores are located very near to its main competitor Pantaloons in all major cities.

Westside has its head office situated in Mumbai.

From our interactions with store managers we came to know about the following facts:

• All stores get their stocks every week on Friday from Mumbai.

• Because of higher purchasing power of the general population of Mumbai and the head office being situated in the same spot, stores in Mumbai have the highest assortment of items.

• In metro cities like Mumbai and Kolkata, more products are available and slightly on the more costly side contrasted with a city like Nagpur.

• In some prime areas in Delhi, Westside built an exclusive showroom to cater to the needs and demands of women.


WESTSIDE’S BRAND EQUITY

As per Brandz model, Westside’s brand equity can be analyzed as follows:

Presence: Westside has strategically placed itself in locations which are most accessible to people. Having parent company TATA helps in increasing its brand credibility.

However, customers prefer Pantaloons and Lifestyle over Westside which provide products in same price range. Recently, Westside stores are being evicted from malls and are being replaced by international brands like H&M, Zara, and Forever 21.

Relevance: With its vision to provide fashionable and quality products at affordable prices, Westside offers best-in-class products with services at flexible costs. Yet, an increase in the product variety is need of the hour for Westside.

Performance: Westside has the highest percentage of in-house brands in India's Retail apparel industry. It has a lower share of foreign/western brands on its shelf as compared to lifestyle and pantaloons.

Advantage: One of Westside’s core competencies is its high product quality at affordable price with the help of in house brands and private labels.

Bonding: Westside does not enjoy a high share of loyal and repeat customers.


PROMOTION STRATEGY

In-house Promotions

In-house promotion is done through display media using signs and posters to attract customer to new and discounted products. Various sales promotion incentives are provided to customer like coupons and next purchase discounts. No-question exchanges, redeemable points and free home delivery for card holders also helps in improving the shopping experience.

External Promotions

For the year 2014, Westside used Rs 33.68 Crores for advertisements. Often, there are various offers mentioned by Westside in their ads. Currently, Westside has no celebrity endorsement as compared to 2002, when they signed Yuvraj Singh as their brand ambassador.


Customer Behavior Analysis

Introduction: The overall satisfaction level of the customers was relatively lower when compared to its competitors. One main reason for this is lack of good branding strategy and promotional offers (According to new customers).

Customer Opinion Survey: One–on-one interactions with the customers revealed that the ambiences in Westside stores are highly attractive. The spacing and the music which made it lively to shop were also greatly appreciated.

Young customers are not loyal to the Westside brand because of limited availability of upbeat and latest fashion. Many of the respondents feel that Westside is unable to provide variety in apparels and therefore should be a little innovative regarding inventory rotation at the stores.


MARKETING PLAN

Westside should focus more on attaining a leadership role in the market and improving its sales.

Launch an Ad campaign

The tagline will read “Walk on to the other side, come to Westside”, portraying the transformation of Westside to a brand that is more elegant, lifestyle oriented.

The ad will be released in 5 phases, the first four ads focusing on a fixed category of target customers.

1. Phase I

Target Segment: Men (30-40 years of age)

Sharing the highest market share with women, the first phase of the campaign will launch an ad with the trending product line.



2. Phase II

Target Segment: Women (30-40 years of age)

Women’s wear has seen an increase in the market share in the recent past, with a CAGR of 10%. Again the product mix will include an increased share of products that are trending with highest growth rates.



3. Phase III

Target Segment: Youth

This ad will cater to the younger crowd with high disposable incomes and a higher intensity to spend. Items like accessories, Jackets, bags from outside brands should be sold.


4. Phase IV

Target audience: Kids

This ad will attract the Kids, and parents that accompany them can also be converted.


5. Phase V

Target audience: Family

Westside will be projected as a single stop shop/ apparel store for the whole family.


Focus on service, creating in store experience

• The staff will be trained to handle customers and engage them.

• Understanding customer behavior and to handle their queries by having a better information about the products.

• To instill elegance in the ambience by little modifications

Partnering with other high end brands

A product mix complimentary and non-conflicting to that of Westside could include:

• Clothes from Mr. Button (Jackets)

• Accessories from Chumbak (Phone Cases, Laptop and Tablet Sleeves), Quirkstore (Bags, Bow ties)

• Books and Music from Landmark


Brand Ambassador: Getting a designer who can complement the core values of Westside to endorse it like - Gauri and Nainika or AM: PM


Online Presence:

• High intensity marketing through social Media like Facebook.

• Launching an ad with a renowned comedy channels like TVF, AIB etc.

• Mailers would be sent out to customers of Westside on their birthdays. Also all new product line information will be mailed to customers.


SALES FORECASTING

Using suggested marketing plan; there will be almost 20 percent growth in sales revenue while keeping other incomes constant. Taking all factors into account, we estimate that there will be a net increase of almost 15.5 percent in Net Profits (PAT).

Consolidated Profit & Loss account

In Rs. Cr.

Mar '15

Mar '16

ASSUMPTIONS


Income

Sales Turnover

2,284.34

2,741.21

20% increase

Excise Duty

0.09

0.108

20% increase

Net Sales

2,284.25

2,741.10


Other Income

212.36

212.36

Constant

Stock Adjustments

-2.34

-2.34

Constant

Total Income

2,494.27

2,951.12

Expenditure

Raw Materials

1,331.49

1,597.79

20% increase

Power & Fuel Cost

52.63

57.893

10% increase

Employee Cost

207.89

280.6515

35% increase

Designer Fees

0

1.6

1.6 cr to be Paid to nainika and gauri

Online Promotion through FB and You Tube

0

0.408

Monthly 3 lakhs will be needed for FB and Monthly 40000 needed for You  tube

Advertisement in Television(NEW)

0

0.6

60 lakhs worth advertisement in 5 phases

Miscellaneous Expenses

617.71

679.481

10% increase

Total Expenses

2,209.72

2,618.42







PBDIT

284.55

332.70


Interest

10.72

12.328

15% increase

PBDT

273.83

320.37


Depreciation

74.33

89.196

20% increase in Written Off Depriciated Cost

Profit Before Tax

199.5

231.17


Tax

70.07

81.835773

Tax@35.4%

Reported Net Profit

129.43

149.34


Increase in PAT(%)

15.38184888



This article has been authored by Suvayan Roy from IMI Delhi


REFERENCES

1. https://en.wikipedia.org/wiki/Retailing_in_India

2. Annual Report FY 2014-15 of Westside.

3. www.mywestside.com

4. http://www.tata.in/company/articlesinside/Building-brand-Westside

5.http://www.livemint.com/Industry/xb8xbo7NEQcXlpgKjjbyeN/Aditya-Birla-Nuvo-overhauls-Pantaloons-to-boost-margins.html


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