VP Sales and Marketing | 30 Mar 2004
“We are also launching a line of accessories for each of our four power brands, which will further help create them into lifestyle brands. No single brand can be aspirational if it doesn’t transform into a lifestyle brand.”
Equipped with successful stints at TTK Prestige and HLL, Vasanth Kumar further strengthened his expertise in Product and Sales Management, Brand Management, Market Research, Media Planning and Retail Management on joining Madura Garments in February 1996 as Group Brand Manager – Van Heusen. After March 1998, Kumar took up the responsibilities of General Manager – Marketing (April 1998 to March 2000) where he handled the launch and subsequently the marketing activities of Peter England, Byford, San Frisco and Elements. Until 2003, as Vice President – Marketing, Kumar took care of the overall perspective of marketing activities of all the Madura Garments brands – Louis Philippe, Van Heusen, Allen Solly, Peter England, Byford, San Frisco and Elements. Presently, Kumar is serving both as Vice President – Sales and Marketing and Head, Popular Brands. This includes the sourcing and supply chain activities for popular brands. Alongside brand management responsibilities, he handles Marketing Services for Madura Garments – that include Media AoR, Public Relations and Market Research activities. In this conversation with Shubha Kumble, he shares his views on the future of brands, their quest to transform into lifestyle brands and the increasing challenge of developing organised retail.
Q. Could you please tell us a little about the different categories and brands that Madura Garments has built?
In Madura Garments, we have two categories of brands – one is the premium section, which includes Louis Philippe, Van Heusen and Allen Solly and, the other category is the popular brands where we have Peter England and Elements. Also, we have the recently launched SF (San Frisco) jeans wear for the youth.
Q. Could you tell us how your popular brands are positioned?
Speaking specifically of Peter England and Elements, these are the brands that have been positioned for the masses and are in the mid-price category. They offer value for consumers at affordable price. In terms of product category, PE is at present into shirts, trousers, and into accessories like ties, belts and socks. Elements is into t-shirts, jeans and casual shirts. PE will soon launch suits, with which the two mid-price brands will together cover the entire range of formal to casual wear. SF is our newly launched fashion wear for the youth between 15 and 24 who are experimentative. For them, we have launched razored jeans. Recently, we launched our oil and greasy collections.
We realised that the market is saturated with normal jeans and, for us to make a difference in the marketplace we needed to push the design edge, which is what we have done through this brand.
Q. What about the premium brands? With the obvious overlapping, don’t they eat into each other’s share?
As far the premium brands are concerned, LP is the most premium brand in our stable, and is a formal wardrobe brand. The positioning of LP is dressy formals for special occasions. The next brand, VH is positioned as a corporate formal brand. This too is positioned as a formal wear but in terms of a corporate wardrobe where the stress lies on the functionality and comfort of the product for the business traveller, rather than dressiness. Because of this positioning, the brands are clearly differentiated. Also, the VH products are priced a shade lower than LP products. Another thing is while the target audience for VH is the middle to senior level corporate executives, LP is targeted at CEOs and heads of independent businesses. Our third fashion brand, Allen Solly is positioned as Friday Dressing for the new economy, which is IT or advertising or any other service industry. Here, the emphasis is more on individual creativity. It is a sort of relaxed formal wears. Alongside including semiformal/casual shirts, the brand includes a range of clean jeans, which is becoming common as work-wear. Allen Solly, as a brand is positioned for the yuppie, the upcoming professional who wants to be different. All these five brands are distinctly positioned for different categories as that it is ensured that they grow through different target customers rather than cannibalising on each other’s target segment.
Q. Till some time ago, Byford brand was part of your promotions. Today, one hardly hears of it…
Yes, we have a brand called Byford. It was launched as a t-shirt brand. However, after the launch of our other brands in this category, we realised that sustaining Byford, as a t-shirt brand was not viable. Byford is a very well known knitwear brand abroad. At present Byford is on the backburner and we are doing some institutional business through it where in we make customised t-shirts and knits for corporate houses. But in another six to eight months, we will have better clarity as to how we would like to take the brand forward and we will re-launch it in a manner where it will contribute value to the Madura portfolio.
Q. Peter England, one of your relatively new brands, had a fantastic start but faced some trouble down the line. Could you tell us more about it?
Peter England (PE), though young compared to our other brands, has in a way matured well by now. This is its seventh year. The brand became a rage between 1998 and 2000, going on to be the largest selling shirt brand in the country. We touched 2-million mark in shirts that’s by far the best. However, by 2000, there were certain changes in the industry like the imposition of excise duty. One factor what we need to realise is that PE’s competition is not with any other organised brand but a number of players from the unorganised sector. At that time, rules were slightly more favourable to the unorganised sector. There were certain exemptions given on turnovers. What happened was that PE had to pay excise duty while other players did not. So, this increased the price differential. Then import duties were slapped on to PE fabrics. We import close to 40 per cent of our fabrics from the Far East. This brand caters mainly to the common man and unfortunately, with these duties and taxes being put on us, the price of the products increased and out priced us in comparison with the unorganised players. We wanted to provide international quality, so we went for imported fabrics. As a fallout, we were pushed out of the mid price sector and our volumes were under pressure and PE took a beating in 2002.
Q. How did you manage to come out of this slowdown?
Post 2002, we took stock of the situation and changed the whole strategy. We started making developments in India to match the fabrics which we used to import, and we made a couple of breakthroughs in India. By this time, the government also realised and reduced the duty. Besides this, it also brought the other players into the net. So, the three factors that hindered the growth of PE more or less got nullified in late 2002. By 2003, we launched a turnaround strategy for this brand, and went back and gave the customers what PE offered them in the first place – honest pricing with international quality. So, we went back to the below Rs 400 price point with 75 per cent of the merchandise being priced below Rs 500. This was the major shift we did in 2003, helped by all these macro factors. Besides this, we also started building our distribution chain where we focused on quality retail. We started opening shop-in-shops and showrooms, which could showcase the brand. We also started focusing on non-shirt products. We pushed trousers and last year, we grew by about 40 per cent in trousers. Now we are close to 4.5 lakh trousers making us one among the top four trouser brands in the country. This has also set the platform for the launch of suits. And, PE grew by 20 per cent over the previous year.
Q. A look across the industry shows most brands growing into complete lifestyle brands. What efforts has Madura put to carry forth the same across all its brands?
If you look at the market, take any category, even in soaps for example, every brand after being established, starts offering certain lifestyle benefits and is now branching out into allied categories introducing different products as extensions. The same trend is present in all categories and more so in apparels, as by nature, a person wears multiple products. So, if all the products he uses have one core benefit influencing his purchase, he will definitely buy these products again and again. So, all the apparel brands that were launched around eight years ago were brought out under a product plank, like PE is a shirt brand. Once launched, it got into the consumer’s mind under the honesty platform and the logical extension that should happen in the marketplace is this evolving into an honest wardrobe. So, if we offer allied products that are appropriate to the brand and ensure the same benefits, it is a proper extension. While this is the trend across the industry and everyone attempts it, only those brands that are truly established can carry it off successfully.
Q. What are some of the extensions that have already taken place?
Well, Madura has taken the same approach across brands. Louis Philippe, which was into shirts and trousers, entered suits and is now into leather jackets for special occasions. Allen Solly, which was a men’s shirt brand, got into trousers, outerwear and latter, ventured into women’s wear as the platform it was talking about was Friday Dressing for young professionals. Van Heusen, which had its formal shirts and trousers, has now launched a range of formal tees, which can be wore at work on a Saturday. So, as long as a brand’s positioning is strong, it can extend its products and it has to make sure that each product is giving the value for the particular brand.
Q. How do you plan to take this extension further?
We expect the extensions that I just spoke about to be completed by 2004. In the next two years, we want to go to the next generation, which is lifestyle. This basically means cutting across occasions so that it not only covers work occasions but also includes non-work occasions. This is the only way we can expand our share in our customer’s wardrobe. So, we will take our four power brands and extend them specifically for their own target customers, as we don’t want to confuse them. We are also launching a line of accessories for each of our four power brands, which will further help create them into lifestyle brands. No single brand can be aspirational if it doesn’t transform into a lifestyle brand.
Q. What is your advertising budget?
Our advertising budge is set for around 8-10 per cent of our turnover. We ensure that irrespective of the market situations, this investment is continued in that fashion. In no year we have put brakes on our spends in this division.
Q. Your spends on television has steadily declined over the years and at present none of your brands are advertising on TV. What is the strategy behind this?
There are distinctive strategies that we have evolved for fashion and popular brands. As far as fashion brands are considered, because of the positioning and the price, they are necessarily restricted to the top six metros. For us to reach out to these six metros, we find that the print medium is more effective than television. However, in the long run, we cannot rule out television as in the course of the next three years we are looking at the next 20 towns evolving. But at present, another factor why we are focusing on print is because we are expanding our retail network. For this, we simply need to communicate where we are and for this, print scores well above television.
As far as the popular brands are concerned, the issue is slightly different. For Peter England, we have around 150 showrooms, which are spread across 69 towns. So, in case of Peter England, it is optimum to cater to my audience through television. While we took a break for the past six months because of the turnaround efforts we put in place, that phase is behind us and we are looking at 20 per cent growth this year. Peter England will be back on television starting April 1, 2004.
To build Peter England’s retail, we are going for vinyl outdoors – for announcing the new collection as well as the new locations.
Q. What are the main issues prevalent in the apparel industry?
One of the main issues is the lack of organised retail. Today, many brands are constrained because of this lack. When most of us were looking at creating product brands or wardrobe brands, the need for a high-style showroom was less. But, with the market evolving, most of us want to be lifestyle brands and for this, we need high quality retail space. We are actively pursuing that. Today, 90 per cent of the sales come from unorganised retail and only the remaining from organised. A single company cannot go about furthering organised retail; it needs an industry-wide, nationwide effort. Apart from this, we also need government support for this along with the investor support in this category. This will not only assist the brands who can showcase their lifestyles but also customers as they can experience it.
Q. How have your brands performed this year?
Overall, we have seen all our brands growing this year. Their growths have been ranging between 12 to 20 per cent. Peter England is the highest because last year was not so good.
Q. What are your expectations/goals for the coming year?
We want to sustain this growth. But the more important part of our agenda is to transform them into lifestyle brands and more and more into organised retail.