1. Indian Footwear Industry
2nd largest footwear producer in world
The size of Indian footwear market is around crores and expected to reach Rs crores with a CAGR of 15% by 2015
Indian footwear retail is mainly an unorganized market with around 60% market share
At present, Men's contribute around 60% of footwear market against Women's share of 30%
Men's market is growing at a CAGR of 10% & Women's market is growing at a much faster CAGR of 20 %
More than 4000 manufacturing units in footwear(most of them are small scale-55%)
The non-metro market accounts for nearly 55% of the overall footwear industry

2. SWOT Analysis Strengths Weaknesses Opportunities Threats High growth
Availability of labor
Large raw material base
Continuous focus on Product development and design upgradation
Weaknesses
Less number of organized product manufacturers
Uneconomical size of manufacturing units
Poor supply chain
Opportunities
Abundant scope/ Rising potential in the domestic market
Growing fashion consciousness
Use of IT and decision support software to reduce length of production cycles
Product diversification
Use of e-commerce in direct marketing
Threats
Entry of multinationals
Ephemeral fashion trends
Increasing inflation is considered a threat which would increase overall input cost, as well as, conversion costs
Relaxing FDI limits in retail may bring in more international competition

3. Major Brands Low cost comfortable slippers
For men, women and kids
Available in different shades and designs
Relaxo is the largest producer of Hawaii slippers in India
Price range ₹70- ₹115
“Mazbooti Bhi, Style Bhi”
Relaxo’s most exclusive brand for women
Also available for kids
Price range ₹130- ₹360
“Fashionable and Lite”

4. Major Brands Targeted towards youth Shoes, sandals and slippers
Sporty looks and durable
Price range ₹600- ₹2950
School Shoes
Price range ₹200- ₹500

5. Recently Launched Targeted towards kids Leather footwear for men
Shoes and sandals
Price range ₹400- ₹600
Leather footwear for men
Sophisticated look and comfort
Price range ₹800- ₹3000

6. Promotions
Signed Salman Khan for “HAWAII”, Katrina Kaif for “FLITE” and then Akshay Kumar for “SPARX”
Relaxo has experienced a record-breaking growth rate of 4800% within the last 10 years
The cost on promotion went up to lakhs in from lakhs in

7. Online Presence Facebook Online Store
Has own online shopping portal as
Online sales in footwear industry accounts for approx. 8 % of sales
Properly segmented (For him, For her, For Junior)
Has a Facebook page
Approx 125,000 likes
Showcases new products with price and offers, if launched
Advertisement done to attract targeted customers
Reviews help customers in their discretion
Facebook
Online Store

8. Good distribution network. Present even in smaller villages
Most of their business (~90%) comes through distributors with excellent terms
Aggressive ground presence with 150 exclusive company owned retail stores and 50 more opened in FY13

9. Stores under operation
Retail Chain
Company-owned stores, 'Relaxo Retail Shoppe', are more from image building exercises and helps the dealer/retailer network
Company relies more on distributor-retailer network for sales
Besides it sells footwear by means of e-commerce operations-
FY 12
FY 11
FY 10
FY 09
FY 08
Stores under operation
149
127
100 79 60
Revenue Per Store
0.40 Cr -
0.26 Cr

10. Differentiation Segmentation Age Gender Price
The entire market can be segmented on the basis of Age, Gender and Price
Relaxo footwear has the following differentiating advantage over the competition:
Relaxo consistently lives by and upheld its quality and customer satisfaction
Produced state of the art footwear at very low cost price
Caters to the demand of the middle income groups without compromising on quality
Age
Gender
Price
Kids
Male
Low(<300)
Youth
Female
Medium( )
Adults
High(>2000)

11. Targeting
Based on the Segmentation following Brands of Relaxo Footwear target the segments
Age
Brand
Gender
Price
Kids
Hi-Fashion Kids, Flite Kids, Schoolmate
Male
Hawaii, Sparx
Low (<300)
Schoolmate, Hawaii
Youth
Sparx, Elena, Flite
Female
Flite, Mary Jane
Medium
( )
Sparx, Flite, Casualz, Boston
Adults
Hawaii, Flite, Casualz, Sparx, Boston
High (>2000)
Sparx

12. Positioning
Relaxo Footwear tries to cater to the demand of all the consumer bases and hence it has tried to position in all the segments through various brands
It positions its brand Hawaii and Schoolmate as a value for money product
Also its Sparx range go footwear is perceived as a high quality, durable and value for money product
Flite and Elena are considered to be fashionable, light and comfortable by the Women customers

13. Financials
India is the world's second largest footwear producing country
Per capita footwear consumption is 2.5 pairs per year in 2012
Size of Indian footwear market is around crores and expected to reach crores with a CAGR of 15% by 2015

14. Financials
At present, Men's contribute around 60% of footwear market against Women's share of 30%.
Indian footwear retail is mainly an unorganized market with around 60% market share.
The size of the organised sector which was around crores in 2010 increased to crores in 2011, growing at a CAGR of 30% every year since 2008.
The market is expected to reach crores by growing at a CAGR of 19% p.a.

15. Financial Analysis
Company has sold cr. pairs of footwear in
Sales turnover has reached Rs cr.
Company has posted net profit of Rs cr.

16. Competitor Analysis
Relaxo competes with various local brands like BATA, Action, Liberty, Lakhani etc.
Bata being a major competitor in term of market share due to high reliance on outsourcing work to outsider and high asset turnover ratio.
Relaxo is meeting the competition by capacity increase (which is leading to high asset turnover ratio) and focusing more on non hawaii chappal business and is getting focused to urban market.
It is largest producer of hawaii chappal in north India.
The company has recently appointed Accenture to advice on the business strategies and systems in order to enhance its marketability and reach to the consumers

17. Comparison with Competitors
Amounts in Rs. crore

18. Marketing Objectives
Try to match or beat Bata to become No.1 player in Indian Market.
Try to influence people to have different set of footwear for each purpose rather than a single pair for all occasions
Focus on selling Good Quality shoes at Affordable Prices
Shift focus from just North India to expansion across all parts of India – strengthen distribution network
Increase sales through
Stronger distribution network
Expansion in Foreign Markets like Africa
Communication of Product Benefits compared to unbranded footwear
Better variety and design of products

19. Hawaii King
Relaxo is the largest manufacturer of hawaii chappals in India
It has a huge market in rural areas
Price in the range of Rs
Cheap and very robust

20. Introduction of Safari Range of Sandals
Relaxo should enter into low cost sandal market
Sandals are also a hit in the rural areas
Market dominated by local players
Relaxo being a trusted brand has huge growth potential
Complete Support
Better grip over any surface
Less strain on feet
Easy to wear

21. Segmentation Targeting Positioning Urban Design High quality
Semi-Urban and Rural
Durable
Strong
Low price
Niche
Latest trend

22. 70% of the Indians live in rural areas
Segmentation
Targeting
Positioning
Relaxo has already targeted the urban segment with its SPARX brand of sandals
70% of the Indians live in rural areas
The target customers are poor and middle class people living in rural areas
There is very high brand loyalty in rural areas

23. Points of parity: easy to wear and use
Segmentation
Targeting
Positioning
Points of difference: performance(durability) high strength, use in any weather and cheap
Points of parity: easy to wear and use
Brand mantra: “Majbuti bhi, Style bhi”
The main means of differentiation is by
Channel differentiation: Effective and Efficient distribution channel
Image differentiation

24. Marketing Mix Product Colours black & brown
Design will cover most of the feet
Available in standard sizes
Warranty period of 3-6 months
Promotion
Posters of Brand ambassador Salman Khan with the sandals to be put at easily visible areas
TV and Radio commercials
Special promotional events during festivals
Active promotion during school events harvesting season
Price
Rural market is very price sensitive market
The price should be maintained under Rs.250
Due to large scale of production and good distribution system these prices can be easily targeted
Place
Using its strong supply chain network of hawaii chappals for supplying sandals
Training and motivating channel members
Avoiding channel conflict
Make them available at all major footwear stores in this areas

25. Schoolmate
Schoolmate is the children’s shoes brand ranging from Rs 200 – Rs 500
It includes school uniform shoes for boys and girls
White tennis shoes for children are also a part of this brand
The focus of Schoolmate is to provide comfortable shoes for the tender feet of children

26. Target the semi-urban markets
Suggestions
Target the semi-urban markets
Product
Sturdier shoes with more durable soles to suit the semi-urban environment
Promotion
Hoardings, TV and radio commercials
“Har Student Ka Dost”
Place
Retail outlets in the vicinity of all schools will sell Schoolmate shoes
Price
Keeping the price at Rs 100 – Rs 200 to penetrate the semi-urban market
Bulk Discount to Schools

27. Boston
Relaxo brand that includes formal leather shoes, loafers, sandals and party wears
Lesser promoted brand of Relaxo
High value product targeted to the middle and higher income groups
Has wide variety of products, a type for each occasion

28. Boston – Marketing Plan
Increase awareness among the target audience by using promotional activities
Price – Rs
Positioning - “A shoe for every occasion”
Promotion - Advertisement showing Salman Khan starting day in office in formals, evening meeting with friends in Loafers and end day in Party Shoes at a party.
Place – Tier 1 and Tier 2 cities

29. Mary-Jane DSTP Segmentation and Targeting Age group (21 to 45 years)
Location (Tier 1 and Tier 2 cities)
Income levels (middle and upper class)
Occupation (working women and housewives)
Professional women – shoes for workplace and leisure
Housewives - fashionable but more casual shoes
Target women who buy unbranded footwear from street shops
Differentiation
Look and Feel of a designer brand at lower price
Branded Footwear with emphasis on quality and durability
Positioning
Every woman’s choice
A shoe for every occasion

30. Marketing Mix
Product
Unmatched, extensive selection of different shoes
Accessibility
Professional customer service
Competitive pricing
Place
Retail stores
Factory outlet stores
Online/E-Commerce
Price
Price range Rs. 700 – 2500
Promotion
Radio, TV, Print Advertisements
Social Networking Websites
Women Fashion Magazines
Create Radio Jingles for spreading awareness of the product
Association with a celebrity – Katrina Kaif

31. Suggestions
Retail commissions are very low, so many shops do not want sell Relaxo footwear.
Should focus more on Sparx and Flite brands which are more preferred products by the distributors.
Focus more on fastest selling SKUs
Spend higher on commissions and offer better credit terms to retailers
Over-concentration in North India markets - RFL sells almost 65% of its products in the north Indian market thereby creating a very high dependence on the states of north India wile leaving a large market untapped.
Company should expand distributor–retailer network to South, East and West India

32. Over 50% of the retail shops have managed to break even while the remaining continues to make losses.
Should pursue a good mix strategy of few self-owned and franchisee models, to minimize risk and share risk with partners
Focus on increasing presence in multi-brand retail outlets that has presence in malls and high street stores
Should expand its self owned stores throughout India.
Stores should focus more on spreading brand awareness in addition to improving sales
In order to shift focus to parts other than North India, increase the sales force to cover all regions of India. 3rd party field force can be used for faster implementation of sales expansion strategy
Improve exports in countries in Europe, Africa and other Asian countries

33. Drive Online Sales
Online shoe shopping currently accounts for about 8% of the footwear sales in India and is expected to reach about 20% by 2015.
Relaxo’s online sales are limited to shopatrelaxo.com.
Majority of the online shoe shoppers buy from Myntra.com, Jabong.com, Yebhi.com, etc. that sell shoes from various brands.
Relaxo Footwear should thus also be available on these websites which would improve visibility and drive sales.
Relax Shoppe are only present in 9 states and thus online presence will boost sales from areas currently out of reach.
Source: ASSOCHAM 2012
As far as men:woman ratio is concerned, Indian footwear market is dominated by men’s segment which accounts for about 55 per cent followed by ladies’ and kids’ segement which account for about 30 per cent and 15 per cent respectively.