Indian Luggage Industry

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MARKETING PLAN

Ritu Patel
Mangesh Nazar - Roll No 13051
Prashant More
Monireh Ahmadifaraz
Sanjiv Jain

Industry: Indian Luggage Industry

Brand Name: Absolute Regal

Company Name: VIP Industries Limited.

Background:

The Business Environment (1970-2007):

The Indian luggage market is an Rs 1200 Cr industry. The Indian luggage market mainly consisted of soft luggage and molded luggage. In the early days, there were selected players in organized sector and many players mainly in unorganized sector. Hence it was going through a tough time with low demand and stiff competition from unorganized sector. As frequency of travel is low, the luggage manufacturers are facing a unique problem of keeping their brand at the top of the mind of customers. The product is a high involvement product at the time of purchase but after the purchase the interaction with the product is limited.

The Company:

VIP has been the undisputed market leader in Indian luggage industry. Having launched in 1971, VIP successfully captured the luggage market dominated mainly by unorganized sector and established itself in the Indian market using product innovations, stress on quality and brand building. It was the first company in India to introduce “non reversible multi safe lock”, soft grip handle, dual action lock and central locking system. These innovations together with brand building made VIP a market leader.

However in late 1990’s VIP faced a formidable threat from Samsonite. VIP was very dominant in the mid-segment but did not have presence in the luxury segment. Samsonite established its presence in the luxury segment of the market. Soon Samsonite was able to capture a market share of about 35% in the luggage market within a short period of time. Additionally, VIP faced the problem faced by most of the known brands as the brand offered more generic value preposition in the mindset of consumers. Consequently, local markets took advantage of these factors, becoming more popular and affordable. These forced VIP to carryout a re-branding exercise and formulate a new marketing strategy in 2003.

The new strategy of VIP is focusing on capturing or owning the concept of “Travel”. The Company thought of the most appropriate moments of travel and decided that the “time of departure “are the most critical constituents of travel. The logo was changed to a more contemporary logo and the advertisements were changed to communicate the new positioning.

The new VIP Logo launched in 2003:

However despite all these efforts the Company failed to capture the premium luggage segment. Due to economic boom in India and with lot of MNC’s having presence in India, there has been a significant growth in income levels and top executives having high disposable income. These executives are always on the move, however VIP is not able to tap this market segment because of lack of premium products to cater to this segment.

Now, VIP wants to enter this premium luggage segment with the following objective:

“To target the high-end customers who look for well–designed stylish products “

With this in mind the following marketing plan is being formulated to ensure that VIP is successful in this market segment.

The Marketing Plan

1) Formulate Strategy

In order to formulate effective strategy, it becomes very important for the company to know where it stands today and where and what has it to target in the future.

The most effective tool of SWOT Analysis was used to carry this out. The results were as tabulated below.

SWOT Analysis:

Strengths:

Undisputed market leader in Indian luggage industry
Product Innovations, stress on quality and brand building •Strong distribution networkWeaknesses:

It has failed to create barriers by keeping many categories open for competitors to enter. •Still not able to capture premium segment....
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