A case study on european buyers
Textile and Apparel has always been an essential part of human life. This all started in the 18th century, when most of the Industries started venturing into spinning and weaving business, making apparel field as one of the main activities for major Industries. This in a way gave an industrial revolution during the period, as textile and apparel business became one of the main players in different countries, around the world. With time, the manufacturing processes were shifted more into developing countries due to cheaper production cost and availability of raw material. On the other hand, the developed economies like United States and the European countries started with mainly importing the products from these economies (Yagamata, 2007).
With time, India is now among one of the largest producers of textile and garment in the world, second only after China. This sector, as well, is one of the major contributors to the economy of the country. After Agriculture, textile and garments are the second largest industry for employment, with a total figure of 35 million workforces (bharatbook, 2009). Being one of the major players in the industry, India and China started expanding their business into European market in the year 2005. The growth rate for India was calculated to 33.74% percent whereas that of China was 55.41%, in the third quarter of the year (Yagamata, 2007). With the current growth in the sector, the global trade for textile and garments is estimated to go up to $800 billion by year 2014, which as of now is somewhere around $360 Billion. With this boom in the sector, India has got the opportunity to increase on their market share in European Union to 8% in both textile and garment from present share of 3.5%.
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Keeping this is mind; it is quite visible that India has got a very prominent scope in apparel exports. This would increase its global positioning, as well as economy. However, it is quite obvious that there are other Asian countries as well, in the race for the same. So, it becomes inevitable for the leading players along with the new entrants into the market, to have a clear and closer understanding of the market and the buyers they are working for. A better grasp over the requirements of the buyer's, in response would improve on the chances of better business to business relationship with them (ejobz, 2009).
Drawing upon the same, the main aim of this research would be to examine the European Buyers perspective for having business to business relationship with Indian exporters, along with their expectation and requirements from them. In the past many authors have emphasized on the fact, but most of them where focused towards business process start up, like Amjad ed. (1981) & Pang ed. (1988), who focussed more on the same along with the employability aspect (bharatbook, 2009). However, this research would take a different perspective from the point of view of the European Buyers, by recognising their value, behaviour and requirements. Based on this, proposal for an apparel business process start up would be made.
Research Question and Aims:
The topic in question and the proposed research would concentrate on examining and analysing the European Apparel Buyers behaviours' and their requirement from Indian Exporters. The analysis of the research question would be based on conducting a series of qualitative and quantitative interviews of managers from some of the selected leading buyers in the field. HoweverHhHThis project would give an insight of the barriers which is preventing the two economies in having a better business to business relationship. Thus, the project would be of interest to the new entrants into the business in India, as the final part of the research would focus on giving recommendation to emerging players in the field, with the approaches and steps they can take, to cater to these buyers in a more effective and efficient way.
With the expiring of Multi-Fibre Agreement (MFA) on January 1, 2005, most of the trade barriers disappeared from the scene of global textile trade. MFA has been governing on the aspect of textile and apparel trade between different nations since 1962. Now, with its expiry, it has become easy for the nations to trade in between, with less of disruption. However, here it is worthwhile to mention that now it is the time to check on the robustness, as well as, the capabilities of different economy, as to how they can take advantage of this global scenario to extend on their market strength. In context to India, it is an area of discussion, if they would be able to utilize all their capabilities and resources to capture a better positioning in the global textile and garment trade market or not? (Chandra, 2006).
Apparel and clothing industry almost contributes to 20% of the total export earnings for India, which as well add 4% to the overall GDP growth. With the trend and growth seen so far, many a new entrants are venturing into this field whose share to global market is around 5.9% and it is seen that the total employment would as well increase eventually in coming years (Texmin, 2005).
As a matter of fact, many a researchers have studied apparel industry and global trade in between different countries. Fashion and clothing has got a very fast moving trend, which moves from western countries to eastern part of the globe. This is the reason why countries like USA and European Countries like France, Italy and United Kingdom are known as the fashion trendsetters. Moreover, these are the economies who are the leading players in retailing, marketing and merchandising due to their developed background and better command over these fields. On the other hand, countries like China, India, Bangladesh and Vietnam are into manufacturing and export of these goods, due to availability of cheap labour and raw material, apart from good support from the government (Texmin, 2005).
Adding into it, in recent times, most of the consumers are getting better aware about the brands and the quality of product. However, various apparel buyers study the consumers' behaviour to understand their needs and aesthetic sense. After studying the same they make the fashion forecast for next season. Based on which the production for next season is done at the manufacturing firms, they are associated with. Thus, it is quite obvious that these days, the end consumers are quite aware of the various details about the fashion and the product they need. Due to this awareness among end consumers, even the buyers who launch their product in the market has become very cautious about the quality of offering. Moreover due importance is given to pricing, so that they can satisfy the aesthetic and psychological need of their target market. This in a way makes it important for the manufacturers as well to have a better and in-depth understanding of the requirement of their buyer and the market. (Vij, 2009)
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Here it also becomes important to know about the strengths and weaknesses of the Indian exporters from the leading global buyers. Schmitz and Knorringa (2010) has emphasized over this issue where as an outcome of the research, they have proposed on some of the aspects related to better supply chain and quality, which could help the new entrants in learning from their prospective apparel buyer's past experience. Moreover, based on the same they can develop themselves to serve them better (Schmitz and Knorringa, 2010).
In recent time, majority of apparel buyers from European countries prefer to have a few vendors for giving bulk orders. Here, the emphasis goes on for giving preference to vertically integrated factories, which means larger organizations with high turnovers. Moreover, they prefer them for getting timely delivery with a better quality. However, if we go by the figures, of around 15,000 Indian exporters only 15 are there, who has got their turnover figure above $50 million (Gereffi and Memedovic, 2003). Thus, the supply chain becomes an important area of concern for on time delivery whereas better and advanced technology is required for giving better quality. To this, one of the past Presidents of India, Dr. A.P J. Abdul Kalam, emphasized on cost, quality and timely delivery for capturing better positioning in global market. However, he even emphasized on the enhancement of competitiveness by adoption of better technology for efficiency improvement apart from having a better labour policies and infrastructures (Gupta, 2006). This even shows that the buyers are more concerned about having quality product and on time delivery. If some small firm is capable to fulfil these requirements, then they have got equal chances of getting business from these buyers.
With the expansion of European Union (Jain, 2004), now the prospective market has also increased for the eastern economies. Here, having a proper insight and knowledge about the market and the buyer would definitely help the new entrants to perform better. Moreover, an in-depth understanding of Buyer's Standard Operating Procedure and infrastructure would help them in a better planning for their resources for efficient delivery of products. As per Wilson and Gilligan, marketing is a process to satisfy their customers by proper identification and anticipation of their requirements, which as an end result gives profit to them (Wilson and Gilligan, 2005). Drawing from these lines, the research will focus in the same direction by understanding the above mentioned aspects with the help of questionnaires and interviews from real business organizations. This would help in identifying the problems, which come on way to have better business relationship between European Buyers with Indian Exporters.
Proposed Methodology and Methods:
The proposed research would be done on some of the major apparel buyers functioning in the European Union. The same would be analysed from the perspective of their relationship with the Indian Garment exporters. Here, a sample size of 10-12 Apparel Buyers would be selected, with whom this whole research work would be done. This would include Tesco, Visage, and Marks & Spencer, to name a few. However, talks are in process with some more buyers for the same. These are some of the major buyers having business relationships with Indian exporters, as well; they provide various opportunities to college student for their internship and other research work. So, this would provide me an opportunity to have a better understanding of their requirement and expectation from their Indian counterparts.
With reference to the basic requirement of the research, the whole research would be divided into four phases, after getting approval from various participating firms, and prospective people from the firm for interviewing.
The first phase would concentrate on systematic background study. Here primary and secondary research of the literature would be done for apparel sector with emphasis on European Buyers functioning. This would be done for preparing a solid foundation for the research. However, during this stage, the invaluable guidance from my supervisor will help in narrowing down the range of study, as well, would help in making it more relevant and thorough. Apart from this, here it is worthwhile to mention that during this phase the potential candidates for the interview would be identified and informed. This would help in addressing the ethical issue as well the background preparation for better process implementation.
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After the completion of all relevant background studies and research plan, a thorough market access requirement would be studied in the second phase. As a matter of fact, the same would be done by using both qualitative and quantitative research methods (Fowler, 2009). This would be done by the use of structured and semi structured Interviews with the help questionnaires, as a mix of this gives a better accuracy and reliability (Bryman and Bell, 2007). This would include a series of interviews ranging from 100-150, depending upon the confirmation received from the identified sample size. This may vary and could be increased or decreased based on the emergent requirement during the phase of research process. The completion of questionnaires would be done through mails and wherever possible during face-to-face interviews. Apart from other areas, emphasis would be given to analysing on the European Laws and other rules and regulations related to Export and Import. However, equal importance would be given to identify European standard for trade products and other non-tariff measures (Foss, 2008). This would provide a better insight of their purchase requirements and the areas where the Indian exporters need to emphasize on.
After the successful completion of data collection through qualitative and quantitative research, the same would be consolidated and analysed for identifying the final outcome, in the third phase. As per Gummesson (2000), qualitative methods often pre dominates the process where it is used along with quantitative research process. However, actions based on the research are often taken simultaneously and in the research, as well, it would be done in the same way. This would help in identifying the different aspects and norms which are required to come to consolidate a final view point.
In the final part of the research, the overall finding of the first three stages would be combined together, to devise a final outcome of the complete research process. This would give a final set of requirements and expectations of European Buyers from garment export houses in India. This in a way will help in identifying a better approach for new emerging garment export houses in India for having business to business relationship with European Buyers. As the whole research process would include both literature reviews along with qualitative and qualitative procedure. Thus, this would help in maintaining a proper balance in between the theoretical and practical approach during the course of research (Saunders et al., 2007).
There can be issue related to access in the case of face to face interview. However, this would be addressed by taking prior consent from the prospective participants. Also, the effect of this would be less as the questionnaire would be prepared by me and there won't be any kind of involvement of any person from any of the firms (buyers) I have taken on, as sample for the research process. However, the questions would be related to the various aspects and requirement of the buyers, whose data would be collected from market research and various background studies and research in the subject area. Thus, the access issue would not be of much concern for the successful completion of the research.
Within the context for fulfilment of the objective, it is a must that the entire list of participant are from the firms (buyers) selected. However, the sample size would be made uniform for all the participating firms and equal number of people would be selected from there, making it uniform for everyone to be a part of the research. Although, there are some limitations to this approach, if some of the participant takes back his name at a later stage. However, considering the time scale of the research, this would be the most suitable method, whereas, if could not be avoided, some scope for amendment in the sample size will be considered during the course of research work (Bryman and Bell, 2007). This would, as well, be done by making the sample size more comprehensive, so that the affect of such outcome can be made minimal.
As per Punch (2006), one of the most prominent ethical issues that arise in any of research is of data protection, which in the case of the proposed research would be quite high. However, by signing up "confidentiality agreement" with the firms, the same would be avoided (Bryman and Bell, 2007). As well, to give honour to the participant of the research questionnaire and interviews, their names will not be disclosed in the final paper (MacDonald et al., 1991). Apart from this, it would be taken care of, that people participate in the research process voluntarily and with sufficient knowledge, about the main objective behind doing the same (Lindorff, 2007; ESRC, 2005). This would be made sure by giving proper details on the objective of the research through oral consultation and written consent much in advance (parliament, 2009; Miles and Huberman, 1994).
Limitations and Contingency Plans
The main concern for the research would be the sample size and their availability at the right point of time. So far, I have got three confirmations, from the twelve companies, I have approached to, for the research work. There can be a constraint later, if some of them back out from taking part in the research process. This may affect the overall timescale which I have set for each part of the research process. Apart from that reducing on the sample size, as well, would affect the worthiness of the final outcome of the research.
The worst scene can be, if the data collected from the firm are not fruitful. In that case, it would be inevitable to decide upon a complete new set of sample. Here it requires to work upon a complete new set of questionnaire, based on the outcome. This would reduce on the longitudinal aspect of data collection, as the total research timescale may reduce.
So, to address these issues, it is quite important that I identify and contact the suitable firms and candidates for interview within next month. Confirming on the same would help me in collecting sufficient data much in advance, as well, would prepare me to address any kind of deviation from planned time line.
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