ABSTRACT

Marketing Strategies of Readymade Garments Industry of

India

The present study is concerned with Marketing Strategies of Readymade garments
industries in India. The marketing practices of garments units, problems faced by them
in implementing the marketing strategies and measures needed to solve these
problems, come under the purview of this study. The main focus is on the marketing
strategies used by the various sectors in the area of production, promotion, distribution
and pricing. In a layman language the term strategy is a term related to warfare or a
plan to win a war. But in the business world it refers to plans relating to marketing,
financing and manufacturing operations. Executives of different business
organizations concentrate their efforts to win the biggest possible share of the targeted
market. The field of strategy planning is much wider. It deals with the adjustment of
controllable factors, viz, production, physical distribution, promotion and pricing
within the environment of uncontrollable factors, viz, competition, legal barriers,
interference of different behaviours and scientific and technological differentiation.
It is a job of crucial significance to formulate the business. Failure or survival of a
business depends upon the effectiveness of strategic planning. For e.g. to increase the
prices of a product to a significant extent the management will have to explore and
evaluate the competitors towards the change in price. If the change leads to market
dominance, competitors by changing the prices of their products will rush to grab the
market share. The management of a company should look at defensive tools to be
used to safeguard its market position. This requires a continuous review of
controllable factors within the atmosphere of uncontrollable ones.
A marketing strategy serves as the base of a marketing plan. A marketing plan
contains a list of specific actions required to successfully implement a specific
marketing strategy. An example of marketing strategy is as follows: "Use a low cost
product to attract consumers. Once our organization, via our low cost product, has
established a relationship with consumers, our organization will sell additional,
higher-margin products and services that enhance the consumer's interaction with the
low-cost product or service." Without a sound marketing strategy, a marketing plan
has no foundation. Marketing strategies serve as the fundamental foundation of
marketing plans designed to reach marketing objectives. It is important that these
objectives have measurable results.
The readymade garments industry has been chosen for various reasons. Firstly it plays
an important role for its directly concerned to one of the basic needs of every citizen.
The garments industry operates in a highly complex environment. Indian garments
industries has been creating in a rapidly changing environment particularly since mid
seventies. It is therefore important to examine what the modern trend are being
introduced by the companies in their marketing strategies and cope with the changing
environment because this is a fashion age and everyone is concerned about the new
fashion and wants the new test specially the young generation.
Second reason to choose the readymade garments industry is that the contribution of
the garments sector in the sphere of production, earning of foreign exchange and
investment in the Indian economy has been quite significant.
Third, the functional performance of majority of the garments sector that is in the
private sector deserves a significant consideration. The profitability trends, working of
garment units dependence of garments industries on imports are some of the areas
which have also been touched upon and lastly the leadership role of garments sector in
India as this is the second employment providing sector after agriculture. The
garments industry alone provides the major employment to the Indian citizen as this
sector is concerned to small scale industries sector.
The history of textiles and garments in India dates back to the use of cynical dyes and
printing blocks around 3000 BC. The diversity of fibres found in India, complex
weaving on its state-of-art manual looms and its organic dyes attracted buyers from all
over the world for centuries. The British colonization of India and its industrial
policies destroyed the innovative eco-system and left it technologically destitute.
Independent India saw the building up of textile capabilities, diversification of its
product base, and its emergence, once again, as an important global player.
Today, the textile and garment sector employs 35.0 million people and is the 2nd
largest employer, generates 1/5th of the total export earnings and contributes 4 per
cent to the GDP thereby making it the largest industrial sector of the country. This
textile economy is worth US $37 billionn and its share of the global market is about
5.90 per cent. The sector aspires to grow its revenue to US $85bn, its export value to
US $50bn and employment to 12 million by the year 2010.
It is estimated that there exist around 68,000 garment units in the organized sector, of
which about 88 per cent are for woven cloth while the remaining are for knits.
However, only 3040 units are large in size. While these firms are spread all over the
country, there are clusters emerging in the National Capital Region (NCR), Mumbai,
Bangalore, Tirupur/Coimbatore, and Ludhiana employing about 35 million people.
The total value of production in the garment sector is around Rs.1, 0501,100 billionn
of which about 81 per cent comes from the domestic market. The value of Indian
garments (e.g. Saree, Dhoti, Salwar, Kurta, etc.) is around Rs.200250 bn. About 40
per cent of fabric for garment production is imported a figure that is expected to rise
in coming years. The weaving and knits sector lies at the heart of the industry. Three
distinctive technologies are used in the sector handlooms, power looms and knitting
machines. They also represent very distinctive supply chains. The handloom sector
(including khadi, silk and some wool) serves the low and the high ends of the value
chain both mass consumption products for use in rural India as well as niche
products for urban & exports markets. It produces, chiefly, textiles with geographical
characterization (e.g., cotton and silk sarees in Pochampally or Varanasi) and in small
batches. Handloom production is mostly rural (employing about 10 million, mostly,
household weavers) and revolves around master-weavers who provide designs, raw
material and often the loom.
Weaving, using power looms was traditionally done by composite mills that combined
it with spinning and processing operations. Over the years, government incentives and
demand for low cost, high volume, standard products moved the production towards
power loom factories and away from composite mills (that were essentially full line
variety producers). While some like Arvind Mills or Ashima transformed themselves
into competitive units, others gradually closed down. In 2003-04, there remained 223
composite mills that produced 1434 mn Sq mts of cloth. Most of these mills are
located in Gujarat and Maharashtra. Most of the woven cloth comes from the power
looms (chiefly at Surat, Bhiwandi, NCR, Chennai). In 2005, there were 425,792
registered power loom units that produced 26,947 mn Sq mts of cloth and employed
about 4,757,383 workers. (Annual Review, Ministry of textiles 2009). Weaving sector
is predominantly small scale, has on an average 4.5 power looms per unit, suffers
from outdated technology, and incurs high co-ordination costs. Knits have been more
successful especially in export channels.
Strong production clusters like Tirupur and Ludhiana have led to growth of
accessories sector as well, although slowly. The hosiery sector, on the other hand, has
largely a domestic focus and is growing rapidly. The spinning sector is perhaps most
competitive globally in terms of variety, unit prices and production quantity. Though
cotton is the fibre of preference, man-made fibre (polyester fibre and polyester
filament yarn) is also produced by about 100 large and medium size producers.
Spinning is done by 1566 mills and 1170 Small and Medium Enterprises (SME).
Mills, chiefly located in North India, deploy 34.24 million spindles and 0.385 million
rotors while the SME units produce their yarn on 3.29 million spindles and 0.119
million. Rotors producing 2270 million kg of cotton yarn, 950 million kg of blended
yarn and about 1106 million kg of man-made filament yarn every year.
Indian Readymade garments industries have been the single largest net foreign
exchange earner among all the products in the countrys export basket. The
performance of Indian garments export shows that how an efficiently managed labour
intensive sector can be transferred into a prolific foreign exchange earner. Exports of
readymade garments have taken place with very little import content. Garments
production is carried out largely with less modern technology and automation because
it is reserved for small scale sector. The garments manufacturing and export activities
in India are mainly located in Mumbai, Chennai, Tirupur, Bangalore, Ahmedabad,
Jaipur, Ludhiana and NCR region(Delhi, Gurgaon, Noida).The bulk of Indian
garments export goes to USA and EU (around 90%) and rest to Australia, Canada,
Norway, middle east etc (CRISIL Research, Annual Review,2009). The garments
sector has centred on an extensive subcontracting system which made use of power
looms fabrics and second hand machinery.
Indias garment/apparel sector is highly fragmented, comprising more than 8,000 units
and employing some 5 million people. Most apparel sector units are family-run
businesses having 50-60 sewing machines, often on contract to apparel wholesalers,
usually using old production equipment and methods. The EOUs tend to operate on a
much larger scale in more modern facilities and offer brand-name quality goods,
especially menswear. Exporters of ready-made garments are classified as either
manufacturer-exporters or merchant-exporters.
Some 2,000 manufacturer-exporters export apparel, while the roughly 26,000
merchant-exporters serve as export brokers on behalf of apparel manufacturers. For
tax purposes, export-oriented apparel firms generally own several units registered as
either manufacturer-exporters or merchant-exporters (Tewari, Meenu, 2006). India has
about 6,000 knitting units registered as producers or exporters; the majority of the
units are registered as SSI units. The knitting segment has grown by 76 percent since
1993, with current annual output of knitwear (sweaters, polo shirts, T- shirts, and
underwear) at 6.4 billion square meters, valued at nearly Rs80 billion.
Garment industry is textile based industry. Indias garment exports have been growing
at a CAGR of 10% in the last decade. Garment manufacturing is the most labour
intensive of all other segments of textile value chain, thus has the maximum potential
to leverage Indias comparative advantage in labour cost; labour being cheap in India.
Moreover, low capital requirements and high value additions make this an ideal sector
for India to focus on. However, competing countries have left far behind India. In the
last decade, Chinas share of world apparel exports jumped from 4% in 1980 to 21%
in 2005, India could only manage to increase it from 1% to 3%. One of the key issues
in the Indian garment industry has been the lack of scale of operation primarily caused
by archaic labour laws and obligation to export 50% of the output for an export-
oriented unit. Above all, the productivity levels in the Indian garment industry are
substantially lower compared with best Asian competitors.
OBJECTIVES OF THE STUDY
To find out the existing marketing policies of the Indian readymade garments
sector in the context of prevailing business environment in the country.
To assess the impact of marketing operations on the performance of readymade
garments industries.
To review the conceptual framework of marketing strategies specially
concerned to Indian readymade garments industries.
To have a detailed review of the Indian readymade garments industries as a
whole from the beginning so as to assess the prevailing marketing trends.
To assess the customer satisfaction level for analysis of marketing strategies
developed by readymade garments industries in India.
To analyse the attitudes and views of garments owners/managers towards the
marketing sector practices of readymade garments industries.
To suggest measures for improving the existing marketing strategies of
readymade garments industries in the light of analysis, findings and
conclusions drawn from them.

HYPOTHESES
In the light of the objectives above, the following hypotheses have been formulated
and tested:
Null hypothesis assumes that there is no relationship between owners factors such as
(ownership, Scale of production, Number of machines) and marketing strategies that
is Product, Price, Promotion and Distribution Strategies. Whereas alternative
hypothesis, assumes that there is significant relationship between Owners factors
such as (ownership, Scale production, Number of machines) and marketing strategies
that is Product, Price, Promotion and Distribution Strategies.
On the basis of age the null hypothesis is that there is no significant difference in
overall satisfaction level of the customers in the readymade garments industry of
India, On the other hand alternate hypothesis is that there is significant difference in
overall satisfaction level when it is classified with the age of customers of readymade
garments in India.
On the basis of gender the null hypothesis is that there is no significant difference in
overall satisfaction level of the customers in the readymade garments industry of
India, On the other hand alternate hypothesis is that there is significant difference in
overall satisfaction level when it is classified with the customers gender variable in
the readymade garments industries in India.
On the basis of Income the null hypothesis is that there is no significant difference in
overall satisfaction level when it is classified with the income of the readymade
garment customers in India, on the other hand alternate hypothesis is that there is
significant difference in overall satisfaction level when it is classified with the income
of the readymade garment customers in India.
ANALYSIS AND INTERPRETATION OF DATA
For analyzing the data statistical tools have been used. For test of significance paired
sample t-test, independent sample t-test and one way analysis of variance (ANOVA)
have been done. Percentage and pie chart also been done for analysis of data.
Paired sample t-test is a statistical technique that is used to compare two population
means in the case of two samples that are correlated. Paired sample t-test is used in
before after studies, or when the samples are the matched pairs, or the case is a
control study.
t- test (paired sample) for test of significant difference
t x or
= the mean of the difference
S = the standard deviation of the difference
Value of S is calculated as follows:

Note: it is based on n 1 degree of freedom
An independent samples t-test is used to determine differences between the means of
two distinct samples within a population. It is also referred to as a between-subjects
design.
The formula for the independent samples t-test is:

The numerator is the difference in means between the two samples, and the
denominator is the estimated standard error of the difference. Where s (x1 x2) is the
standard error that is calculated for using the pooled variance.
One-way analysis of variance (ANOVA) is a technique used to compare means of two
or more samples (using the F distribution). It produces an F statistic, the ratio of the
variance among the means to the variance within the samples. Essentially, the ratio of
variance is a comparison of the variance amongst the different groups to the variance
amongst all the individuals within those groups. In ANOVA two sets of variances are
calculated i.e. between group means, how different are the means: variation due to
the systematic differences and within groups means, how much spread is in the
population because of random error.



k= Number of groups
N = total number of subjects in study
n
j
= total number in relevant group
M
M
= mean of the means
M
j
= mean of each individual group
F= variance between groups / variance within groups

LIMITATIONS OF THE STUDY
Although every effort was made by the researcher to conduct survey as rigorously as
possible .But certain limitations were unavoidable and the various constraints faced by
the researcher are as follows.
1- The study is mostly based on primary data through survey and questionnaire so
this study has been confined to 300 respondents which include manufacturer,
retailers and customers from NCR Regions and Aligarh Regions and due to
financial constraint, limited resources and time limitation, the study restricted
to only these regions.
2- The information collected for the purpose of the study was obtained with the
help of questionnaire framed in a well manner and send to the various groups
of the sector especially to the marketing managers of the companies.
3- It follows from the above that some element of bias on the part of the informant
cant altogether be ruled out although however possible cross checks were used
to verify the corrections of the information.
4- The major part of the study is based on primary source of information but
somewhere due to non availability of information from direct source secondary
source is used.
5- The present study is basically qualitative in nature but wherever needed
appropriate data were used in support or otherwise of the statement made.
6- It would have been better to include some more parts of the readymade
garments producing areas but the choice was restricted keeping in view the
limitations of the resources and time and the difficulty of obtaining information
from private sector undertakings.



METHODOLOGY
The study is based on both primary and secondary data. For the collection of primary
data interview and questionnaire was considered to be the best alternative. For
primary data two sets of questionnaire were prepared to collect primary data from the
following categories of information namely:
(i) Manufacturers, Exporters, Retails Outlets, Shopping Mall
(ii) Customers
One set of questionnaire was designed for the Manufacturers, Exporters,
Retails Outlets & Shopping Mall and the second set of questionnaire was
designed for the customers. Respondents were selected on a random basis.
Criteria basis on sex, age & Income was considered for the collection of data.
The secondary data for the study have been collected from various secondary sources
of information such as relevant Books, Journals and periodicals; Research Papers,
Published Theses, Articles, News Dailies, Websites, etc are consulted by the
Researcher for better referencing. Among the various journals and periodicals, used
in obtaining the information specific are The Indian Textile Journal, All India Textile
Directory, Asian Textile Journal, Apparel Export Promotion Council ( AEPC)
,Fashion and beyond (NIIFT), Indian cotton growing review, Journal of textile
association, Journal of Apparel Export promotion council India, and Other Business
and Economic Journals.
The collected data is compiled, tabulated and analyzed with the help of the various
statistical tools. Tables were prepared on the basis of questionnaire responses from
manufacturers, exporters and merchants of readymade garments like Retail Outlets
and Shopping Malls.
CHAPTER SCHEME
The whole study has been divided into six chapters.
First chapter is on Introduction which is detailed above.
Second chapter is devoted to selective review of readymade garments industries,
despite the fact that a lesser work has been done especially on marketing strategies of
readymade garments industries.
Third chapter depicts conceptual frame work of the marketing strategies & the various
strategies adopted specially for garments industry.
Fourth chapter gives a detail overview of readymade garment industries in India & It
deals with the overall development from the beginning till the latest situation.
Fifth chapter focuses on marketing strategies of readymade garments industries in
India and gives detail analysis of information obtained with the help of questionnaire
and interviews and interpretation of formulated hypotheses for this research work.
Sixth chapter gives all conclusions, findings and suggestions.