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Bata Company Analysis

Keywords: swot examination bata, pest analysis bata, bata swot, bata pest

Introduction / Back Ground

Bata India is the leading and largest manufacturers of shoes in India, which really is a part of Bata Shoe Organisation (BSO). In the beginning footwear was stated in handicrafts and small sections before the entry of Bata in Indian market. Bata Footwear Company Private Small was incorporated as a small operation product in 1931 in Konnagar, India. It built its first manufacturing facility in the start of 1934. The company widened in the years used in its size and the township was known as Batanagar. It was the first company to get ISO: 9001 recognition for its manufacturing facility in the Indian footwear industry. The business went general public in 1973 and changed its name to Bata India Limited. They have its manufacturing products and tannery in five specialised location across the country. The business has more than 1200 stores in its retail network in the metros, mini-metros and cities. The retail strategy includes four types of stores in the united states. They are City store, Large store format, Family store and Manufacturing plant store. These four types were launched by company in-order to reach all sections of customers from Tier1 to Tier3 locations. In addition, it runs in non retail circulation with 12 depots in the united states, which sells its products through more than 160 vendors and 20, 000 3rd party shoe dealers. The business collaborates with corporate and business customers to create various sneaker lines under both international and countrywide brands such as Hush Puppies, Marie Claire, Mocassino, Ambassador, Comfit, School, Quovadis, North Star, Scholl's, Weinbrenner, Bubble Gummers, Baby Bubble, Vitality and Sparx. The cooperation is done to be able stay in-line with most advanced technology and industry standards to meet the customer requirements. In addition, it focuses on army, police forces and mining industries with canvas shoes, hunter shoes and miner's shoes. It currently utilizes more than 6800 people. The company sells more than 45 million pairs of shoes annually and also serves 120, 000 customers every day.

Macro Analysis

It is very important for an organisation to consider its environment before initiating a marketing process. This must be considered a continuous process and really should help in the placing the organisation in the market. The factors that are considered are Political, Economical, Social and Technology.

POLITICAL FACTORS

  • Rules and legislation for tannery wastes.
  • Government balance.
  • Fewer sports happenings apart from cricket to get the customers.
  • Merging of Adidas and Reebok
  • Market pressure on sales.

ECONOMICAL FACTORS

  • Seasonal Issues: Athletics is more prompted in summer time.
  • Increasing buyer electric power makes the customers to look at top quality shoes.
  • Lack in concentrating on the women and kid sections.
  • Huge consumer market.

SOCIAL FACTORS

  • Change in the approach to life of the people (buyer).
  • Increasing fashion styles.
  • Advertising, promotion and press.
  • Change in buyer tendencies.

TECHNOLOGICAL FACTOR

  • Increase in fighting technology development.
  • Up-ward switch in invention and developing maturity.

Micro Analysis

Customers - The products of Bata targets a wide range of customers which also includes Army, POLICE and Mining business in all locations. This is due mainly to the wide range of products made available in market by the company. The business has two types of customers they will be the final users and the It provides good quality products with best price in market, which means that the price-quality percentage is great for the Bata products.

Competitors - The opponents for Bata India in the market are Puma, Nike, Reebok, Adidas, Woodlands, Liberty and Action. The appearance of local and international brands in the Indian market has created an extremely competitive environment in the sneakers industry market. The products from the competitors provide as substitutes to the clients.

Suppliers - The recycleables for the company is PVC feet and the animal skin, the individuals or company which provides these raw materials are known as the suppliers. Bata's suppliers are Chinese language raw material holders and the neighborhood cottage industries that supplies raw materials to the business.

SWOT ANALYSIS

Strength

  • Availability of recycleables and other inputs for the business's operations.
  • Manufacturing products in a variety of places helps in circulation.
  • Subsidiaries and Duty bonuses on machineries.
  • Established links with potential buyers from Europe and US.
  • Friendly federal government policies for export.
  • The brand is immediately determined with shoes or boots by the consumers.

Weakness

  • Facing challenges to move to new creation technology, because of its life for more than seven generations.
  • High labour costs, as the business has large number of employees.

Opportunities

  • There is an excellent scope for diversification into other products like leather wallets, seat covers and other types of leather garments.
  • Growing Country wide and International market.
  • Developing fashion awareness globally.
  • Being in a sizable developing market which offers a demand for sneakers, the company locates its potential in leveraging the Bata brand for marketing other items consumer products.

Threats

  • Changing fashion trends is hard to look at for the Indian Leather Establishments.
  • Entry of global competitors into Country wide market brings heavy competition on the market.

Bata India has around 13. 7 percent of the marketplace share and the business has made a decision to increase its market share by introducing a fresh product under the brand Electricity in the market. Electric power brand is only meant for sports wear. The company expects to have an increase of 3. 25 percent in its market share by introducing the product. The merchandise to be launched is named as Electric power - Lite. It sells around 45 million pairs each year and has decided to increase its sales by adding Ability- Lite. The decision to introduce a fresh product was made in-order to contend with the global brands like Nike, Adidas, Reebok, Puma etc in the Indian market. These global brands were the suppliers of specialised sports shoes and thus Bata is wanting to fully capture its position searching for the specialised activities shoes. The business discovered some issues and customer needs regarding their product. Their product was lagging behind in latest design (style) and the customer's comfort when putting on the shoe. The business has invested in large amount in changing its store appearance and has also taken steps to incorporate the new technology involved with manufacturing specialised shoes. The company forecasted the sales of specialised activities shoes for the up coming years and can have a rise by 14 percent in its revenue, after the unveiling of the new product. The brand new specialised athletics shoes targets folks involved in activities and all sections of customers from children to parents. Thus the marketing, financial seeks and aims are reviewed.

The procedure for grouping the marketplace is recognized as Segmentation. The marketplace segmentation is performed predicated on the demographic and psychographic factors for Bata. The demographic factors are age, sex and occupation. Personal Activities like hobby, social occurrences (marathon), activities, shopping and Personal pursuits like fashion, styles were considered in psychographic factors and buyer behavior which include the changing tendency in buying structure for the segmentation of market [ref-module book]. The ft. wear industry market falls under the perfect type market, as it covers all segments of customers. The clients show their needs in the forex market. The target sections are grouped into three categories namely Display Purchasers, Knowledge Customers and Fashion/Stylish Purchasers. The clients who come under these buyer categories are children, students, men and women, seniors and sports people.

Positioning

Positioning is performed in-order to locate the brand in the brains of the clients, which in-turn escalates the benefits of the business. Positioning results in customer-focused value proposition. The placement is done with respect to the brand and product portfolio. Positioning strategy is performed by identifying the possible competitive advantages by which a corporation can attain ecological position on the market. Bata always aims to be sustainable in the market and it offers proved it over years. The company has used various steps to increase its market show, a few of them are renovating its already existing stores, starting new stores in sub-urban places and the primary strategy which is followed by the business is high quality and low price. This has made the business lasting for more than seven decades in India. The business will follow the same technique for the new product Power-Lite. On the other palm when looking into the marketplace for the merchandise from Nike, Puma, Adidas and Reebok, they impose a large amount for their activities products. The cost of shoes from Bata is relatively low, when compared to others.

There are few local manufacturers who produce the fake of the branded products with poor and low costs. This makes the clients feel unsatisfied. Bata has already been filling up the positional space on the market following low price and high quality strategy. This new product also comes under the same category, which offers value to the impression directed at the clients in relationship with the rivalling product. The low price and high quality strategy is effective in the Indian market as it is a producing market.

Product

A product/service is anything that a company or an individual markets, which satisfies the customer needs. The new product will replace an existing product known as Life-Line under the same brand Vitality. The center, formal and augmented products are discussed below using Shape 3.

The key product is the Power Lite, the formal products are its comfort, style, brand and features. The augmented product is something emerges after sales, in this case free restoring service is offered by the company for about 6 months from the time of sale. The product should have the next features wearing comfort, styling and latest design to compete with the competitor's product.

Developing a fresh product involves the following processes.

Innovation of new ideas: A research done by the company among its employees, customers, opponents and other options using feedback, studies and other questionnaire in-order to create a fresh idea.

Screening the ideas: In this stage all the feasible idea are picked from the bunch of proven fact that is generated by making use of the shoes industry checklist.

Testing the concept: The brand new product is tested conceptually with the aid of selected customers (eg - sports athletes) for just about any changes or improvements, before it reaches the market.

Planning a strategy: Marketing and Financial aims for the new product is defined, which helps the company to handle the success and additional development or failure of the product.

Market Test: The new product is made available in the decided on places and analyzed with chosen customers and their responses is acquired on the product.

Life Cycle of the Product

The product life cycle of a sneaker is short, in comparison with many other products. The sneaker appeared to have a short introduction period, a little bigger growth period where it gets to its maturity stage. It continues to be in the maturity stage for longer time and then decrease stage starts whenever a new product or a updating product is launched in the market.

Pricing

The price for a particular product is determined through rest even research and the pricing model as given in Amount 5 and 6. The business operates with low price market penetration strategy. The main advantages of this strategy is increased sales growth, creates strong market position and high product awareness on the market. The price tag on the Power-Lite is determined to be Rs 2799 (Indian Rupee - INR) considering variable, set costs and the marketplace floor, ceiling price. The company gets its contribution (earnings) after selling 20, 000 products of Power-Lite.

The pricing degree of Nike, Adidas, Puma and Reebok are greater than Bata, they need to follow this during the launch of the product in-order to sell their product initially. The break even analysis establishes the point where the contribution is manufactured regarding he volume of products sold.

Place

The company will kick off its new product in all the Tier 1 and Tier 2 locations of the market. This is done because of the demographic factors, psychographic factors and the target segments (large range of customers). They are the changes that the company must do rather than launching the product in all the locations of the market. The company a good syndication route, they sell their products immediately through their factory shops, franchise retailers, wholesalers, distributors, indie sellers and also in online. Hence they cover all the locations of the marketplace in different ways.

Promotion

As this is a new product the company must advertise in advertising such as magazine, TV, Banners and internet. They ought to follow the press and pull campaigns in the initial stage that can be later changed to pull marketing promotions, if the merchandise is success in the market. The drive and pull campaigns include discounts to the wholesalers, staff incentives, advertising, screen at point of sales. This should be achieved in factor with the estimated budget for promotion purpose.

Physical Evidence

The company has used steps to change the buying experience of the customers by renovating and expanding its stores in all the location, in the beginning in Tier 1 location and it has started slowly to keep in Tier 2 location which makes the customers to get good shopping experience.

The company has four types of stores that opened in recent years, these are City store, Large store format, Family store and Factory store. They must also broaden and renovate stores in tier 3 locations of the market.

Marketing Strategy Communication

The main target of the strategy communication is to generate the understanding and affinity for customers of the new product, which in-turn benefits the organisation to capture the market show and increase its contribution (earnings). That is done by the AIDA model, where attention, interest, desire and necessary action is done for the demand on the market.

Awareness of the new product: Generating understanding is performed through advertising in multimedia like TV, paper, mags, banners and internet. When this is done, the customers will be familiar with the new product on the market.

Creating Interest: Done through advertising by emphasizing the formal products such as brand name, features, comfort and latest design. Thus creating an interest in the customer's head for the new product.

Arousing Desire: This can be done through sales deals, person to person from the customers, who've already used the product.

Actions: When all the above strategic ideas are done, the product must be made available in the market. If in case the product is not available, the client gets disappointed plus they find a substitute because of their needs, which decrease the reputation of the brand and the company's profit.

Sales Strategy

This explains the way the new product (Power-Lite) is sold on the market. The plan entails two types of promotions Push and Pull. During the launch stage the merchandise can be forced in to the market by promotional offers such as discount rates to the wholesalers, vendors when bought in bulk figures. Another type of pushing is done by giving incentives to the employees who the sell the new product in more amounts in comparison with other employees. Tugging promotion influences the customers to buy it. The wholesalers, vendors and customers can be pulled by giving credit when purchased in bulk, exhibiting at the idea of sale (stores), and suits when purchased the Power-Lite.

Profit and Reduction Forecast

The below given is the earnings and loss account of Bata India, this an assumption made by the author considering that the product is success in the market. The P&L forecast very plainly shows that the company will have revenue (contribution) from the Power-Lite product which is launched.

Timing

The product will be launched through the Indian Premier League, this is done as a result of because of the impact of cricket among the people. The product's effect will be known in six weeks of the time from the time frame of release.

Contingency

Few athletics shoes of Bata are already available in the market, however the majority of the customers were unsatisfied with the medium quality and comfortless products. Hence Bata has made a decision to unveiling the Power-Lite, with good deal and good quality feature which is perfect for the producing Indian market. This might replace many global brand's product using its high quality, new style, comforts, latest design and technology used in the only real of the boot. The merchandise Power-Lite would be big success, if no competition are providing such a good quality product at good deal.

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