Author Topic: create sub silos within the organisation  (Read 115 times)


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create sub silos within the organisation
« on: June 14, 2018, 02:40:23 am »
Everyone is focussing on the top of the pyramid.  Everyone is after the same guy who takes the jet air flight three times a month goes and pubs in a particular place and leads a certain lifestyle.

But the size of the market in the middle and lower end is large. Arvind is beginning to do that (introduce products at lower price points). We have Newport at Rs 399, we have re-launched Ruf `n Tuf at Rs 299. Ruf `n Tuf can beat the Walmart price of $9 hands down.

Private labels have managed to grab a certain amount of market share in the mid-priced segment by pricing their products lower than brands. Can brands compete with private labels at these price Marlboro Menthol Cigarettes points?

Brands can be priced much lower. The private label is not really cheaper, but their margins are better. Austin Reed of Shoppers' Stop is positioned across Arrow.

If I have x margin on Arrow, they would have x + 20 per cent margin on Austin. But even Shoppers', Lifestyle, Pyramid, are all focusing on the upper middle class of the market. They do not even want to retail a Rs 399 Newport or a Rs 299 Ruf `n Tuf. That is why I would like Wal-Mart and Carrefour to enter the market. They would generate the volumes (at these price points). This is where money is to be made.

But your margins would come under pressure.

The only thing that was holding us back from Buy Cheap Cigarettes Online entering these price points earlier was excise not because it was additional levy, but because it created a non-level playing field. Now that is no longer the case. As a result, we, as a Newport Carton company, are Cigarettes Wholesale going to have a major focus on Ruf `n Tuf, Newport and Excalibur.

Why is the women's apparel segment, despite its potential, still untapped by apparel makers? Is customisation the main issue?

Currently we are at some sort of inflection point in this segment. It is a market category that is going to grow. Fit for a woman is more important. The challenge here is not in design but the stock-keeping units (SKUs) that are involved.

If I have 500 SKUs and I just launch all of that in one more cut, the 500 become 1,000. With increasing SKUs the cost of obsolescence, what does not sell, has a tremendous impact on our business. Pricing is another major issue. With most women, chances are they will buy an unbranded outfit if it fits well. Women expect a cheaper brand.

As you introduce more brands to cater to different tastes and at different price points, do you run the risk of building too big a brand portfolio?

Not if you can create sub silos within the organisation. VF Corporation has a number of brands. They have nine jeans brands (Lee, Wrangler, Maverick, to name a few) all at different price points, positioned at different markets.

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