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Nishat Group One Of The Leading Industries In South Asia Business Essay

Executive Summary

The market for clothing, home textile and accessories has always been vast and full to the brim with potential. More and more people are jumping on to the bandwagon and coming up with their own brands of fabric & apparel with tall claims of high quality and uniqueness. In the midst of so much competition, Nishat Linen came to the surface with exclusivity as its claim to fame. This report discusses in the following sections, the current market position of Nishat Linen relative to its competitors, its business portfolio, its strengths and opportunities, channels of distribution, marketing strategies and finally, the overall budget and action programs.

Nishat Linen – An Introduction

High in diversity, Nishat Group has been one of the leading and dynamic industries in South Asia where it has paved its path in the fields of textile, cement and financial services. Nishat Linen is a part of the company which has given a whole new dimension and outlook to the textile industry. Nishat Linen is known for its quality and recognized for its designs and affordable prices and has been serving the industry for the last 14 years and is now recognized as a brand of its own. The positive image it has created in the minds of its customers in unbeatable which cannot be tarnished by big competitors in the textile industry.

Current Marketing Situation

In Pakistani textile market the concept of a one-stop shop is not new as there are many stores like Ideas, ChenOne and Habitt which are striving hard to provide their customers with the ease and comfort of one-stop it. These stores are strong with their brand names and recognition where they provide their customers with high quality and design variations so as to make the element of uniqueness distinct in the consumer’s mind. As a result strong competition has surfaced among these textile giants which are fighting hard and fast to retain and grown their customer share in the market

Nishat Linen emerged, in the midst of such consistent and tough competition, as a prodigy of Nishat Group; one of the leading and most diversified business groups in South Asia. Throughout the years, Nishat has made its place as one of the market leaders in fulfilling the home and personal needs of consumers. Currently Nishat is enjoying a palace within the minds of its target market that support it maintain a distinctive palace among its competitors. Nishat is the market leader in its category due to its superior quality, a well-developed brand name, marketing efforts that hit its target segment rightly and continuously changing the product designs and features to meet the needs and requirements of its valuable dynamic customers. This all has helped Nishat to gain a differentiated image in the market that has it a prestige symbol.

Market Description

Today’s consumer has evolved with a certain set of needs and demands which are clearly defined in their minds and are more than capable in making purchasing decisions where they evaluate each product feature to their mental scale and purchase only if it rates higher in their perception. Nishat is now just not a store anymore, rather the outlets are something to which the customer can relate to and would feel comfortable in revisiting it if need be. Their brands reflect a certain image and class to the consumers who buy the products to enhance their already groomed personality.

Striving hard on these lines Nishat Linen has made its mark in the market where it especially targets those discerning customers who seek uniqueness, quality, design, fashion and style in the products they buy without having to compromise on pricing.

Without any doubt the target market of Nishat Linen comprises of customers who have a distinct set of demands where they focus on product uniqueness, quality and design which would set them apart from other females. From housewives seeking to impress others through impressive kitchen and bed linen to socialites and professionals with a sophisticated and exclusive sense of dressing, Nishat is very successful as it caters to a privileged market segment that can pay for high quality and style.

Product Review

Nishat’s product line is highly diversified where it sells bed linen to kitchen coordinates, upholstery to apparel providing it significant positioning and penetration in the market to cater to the customers who want a one-stop shop experience

Nishat’s complete product line is as follows:

Nisha – Clothing Line for women

Naqsh – Clothing Line for men

Bed & Kitchen Linen and Accessories

Bed sheets

Quilts

Bed spreads (regular/ bridal sets)

Kitchen (table linen, mats, table runners, bread boxes, aprons)

Cushions ((Zari, 6 piece sets, matched with bed sheets)

Fillings

Jai Namaz

Fashion Accessories

Laces

Bangles

Shawls & Stoles

Handbags

Clutches

SEGMENT NEEDS AND CORRESPONDING BENEFITS OF NISHAT’S PRODUCT LINE

TARGET

SEGMENT

CUSTOMER

NEED

CORRESPONDING BENEFIT

Multifaceted, style conscious women

(consumer market)

To be at the zenith of high fashion.

To be exclusive and reflect the status of success and power.

Corresponding benefit is in the form of Nisha – the clothing line for women that was launched in 2004.

Based on a wide variety of fabrics including lawn, chiffon, voile, karandi, linen, khaddar, satin etc; it caters to every fashion whim of women.

Distinguished men

(consumer market)

Clothes that reflect sheer masculinity and elegance yet can be worn with ease and comfort any time of the day.

Corresponding benefit is in the form of Naqsh – the clothing line for men.

Loose fabric as well as ready to wear shalwar kurtaz for all occasions that are casual yet unique.

Housewives, kids, brides-to-be

(consumer market)

To be able to express style and individuality while decorating houses.

To stylize kitchen, bedrooms, living rooms etc; to be able spruce up any room.

Corresponding benefit is in the form of a wide variety of Bed and Kitchen linen and accessories with a new collection every season.

Caters not only housewives seeking comfortable bedding and kitchen accessories, Nishat has a linen range exclusively for kids and brides-to-be, hence providing a complete home care solution for every life cycle stage.

Trendy teenage girls

(consumer market)

To be recognized as a fashion goddess, a diva.

Corresponding benefit is in the form of fashion accessories ranging from bags, clutches, bangles etc for teens on the go.

Competitive Review

Fashion industry of Pakistan is evolving on daily basis as it faces a series of continuous changes in the market trends. Following the path of the fashion industry, females also have been grooming alongside where the long ago held concept of a female belonging in kitchen has been changed to a fashionable and modern individual who takes care of her grooming, her dressing and her appearances. The customers are now focused on designs and how each would represent and set off their image in the minds of their friends and relatives. These are the main areas of concerns the customer face while choosing something to wear for themselves or even for their families. With the endorsing of celebrities the competition in the market have increased manifolds as the customers are bombarded with commercials in which the major celebrities have been endorsing their products causing confusions in the analysis of the product by the customers.

Nishat Linen Competitors:

*Al-Karam Textile Mills

One of the largest producers of Fashion and Basic Beddings, Al-Karam has been successful in its ability in grasping the biggest market share. They offer a diversified set of products which are high in quality and designs which includes Apron, Egyptian cotton, bed linen, Hand Towel e.t.c. They are also engaged with in house design solutions as well. Al-karam is proud to have a proven record of providing service quality on time.

*Chenone Pakistan

It is one of Pakistan’s leading textile group and one of the largest exporters of home textile products from Pakistan. Chenab's processing unit is considered one of the best in the country with a complete processing range. Its main products that it offers include Home Textile, Garments, Foot Wear and Furniture. Its textile products not only fulfill local demand but are also exported to several other countries.

*Ideas

Ideas is one of the other big competitor of Nishat in the market where it offers a similar range of product offering including bedding, kitchen, bath furniture e.t.c. They are also offering specific range of cotton and lawn with fresh and vibrant colors. Their specialty is their unique design clothes with a vibrant palette of colors and embroidery.

*Habitt

Habitt provides with a wide variety which includes wide range of curtains, bed sheets, sofa sets, quilts, book shelves; dining tables and usually very common house hold items are available here. Habitt is attracting market by providing attractive offers and relatively low price.

*VLawn

VLawn is again in competition with Nishat Linen in clothing industry. VLawn is a brand of Vaneeza Ahmed which is a popular figure in fashion industry. Initially she started with different Lawn designs and now she is offering shiffon, rawsilk and khadi wear.

Brand

Product Category

Price Range

Intensity

Habbit

Furniture

Moderate High-High

Red

Interwood

Furniture

Moderate High-High

Black

Cross Roads

Casual Clothing

Moderate High-High

Red

Outfitters

Casual Clothing

Moderate High-High

Red

Fifth Avenue

Casual Clothing

Moderate High-High

Blue

Shirt & Tie

Formal Clothing

Moderate High-High

Red

Dinners

Formal Clothing

Moderate High-High

Blue

Men’s Store

Formal Clothing

High

Red

Stone Age

Casual Clothing

Moderate High-High

Red

Cotton & Cotton

Formal Clothing

Moderate High-High

Red

Cambridge

Formal Clothing

Moderate High-High

Blue

Bonanza

Formal Clothing

Moderate High-High

Blue

Oxford

Formal Clothing

Moderate High-High

Blue

Ideas

Clothing

Moderate High-High

Red

Bareeze

Fabric

Moderate High-High

Red

V9

Fabric

Moderate High-High

Red

Funk Asia

Women Clothing

Moderate High-High

Blue

Stylo

Foot Wear

Low-Moderate High

Black

Soul

Foot Wear

Moderate High-High

Red

Borjan

Foot Wear

Low-Moderate High

Blue

Red: Head to Head Competition Black: Moderate Competition Blue: Partial Competition

Channels and Logistics Review

The channels and Logistics are integrated such that product availability is insured across Pakistan at its various outlets which are located at all the major cities. However the major focus of outlets is in Punjab because of easy and cheap logistics since their production facility is near Lahore. There is one outlet in Islamabad and Karachi has three outlets out of which couple of them is located in Clifton and one in PECHS. This goes to show that Nishat hasn’t identified other potential or growing markets within Karachi that is going to result in one of the threats from their competitors in gaining market share.

SWOT Analysis

SWOT Analysis is a useful tool for analyzing and understanding business situations as well as carrying out the decision making process within an organization. SWOT is an abbreviation for strength, weakness, opportunity and threats. Organizations use SWOT analysis for:

Business planning

Strategic planning

Competitor evaluation

Marketing

Business development

Product development

SWOT analysis for Nishat:

STRENGTHS

One of the first few brands to launch bed linen in Pakistan.

Strong product diversification.

Outlets in nearly every city of Punjab and three outlets in Karachi which is also the business capital.

Catering all market segments except children.

Strong product development and most significantly according to all the seasons.

Affiliation with a professional designer Mahin Khan.

Organized records of customer database.

Valuable services to all its loyal and first time customers by offering discount cards and membership cards.

Limited designs for both fabrics and linen are sold in the market for every season that creates differentiation of their product.

WEAKNESSES

Nishat linen is not catering the middle and the lower income group that can be seen by looking at the price range of their products:

Unstitched fabric: Rs. 2138 to 3150

Stitched fabric: Rs. 1400 to 5000

Bed Sheets: Rs. 1150 to 2950

Quilt Covers: Rs. 1800 to 5500

Nishat linen does not carry out exhibitions therefore customers have little knowledge about their products with respect to their competitors.

Nishat linen has not been able to expand its market in Karachi due to high logistics cost since their mill is in Faisalabad Punjab.

All the promotional strategies are focused on fabrics as it is their star product.bed linen gets little promotional campaign.

OPPORTUNITIES

Nishat linen can look to get affiliated with more diversified designers who are into accessories as well.

Publish their own catalogues for bed linen and fabric and put them at different book stores so that customers have easy access to their designs.

Nishat can get into western clothing line which will give them an edge over their competitors.

Their Lahore unit is manufacturing denim fabric for Levi’s which is of superior quality. This gives an opportunity to Nishat to launch their own denim brand in the market.

They should look to open an outlet in an area like North Nazimabad where the market has a lot of potential and people have the purchasing power as well.

THREATS

Strong promotional campaigns of competitors producing fabrics through exhibitions.

Fabric designs of their competitors are available at other retail stores as well where as their fabrics are available at their outlets only.

Most of their bed linens is exported therefore the local market tend to suffer where as their competitors like ideas and ChenOne are more focused on the local market gaining competitive advantage.

BCG Matrix for Nishat

Star:

Nishat’s Star unit, undoubtedly, is Nisha, their clothing line for women. It is a unit that sells throughout the year and as quoted by the Manager of their Clifton outlet, “Nisha sells at the same rate even during times of recession”. According to him, Nishat has experienced more profit during recession because of continued high sales of their clothing line for women. Launched in 2004, Nisha grew by leaps and bounds and now stands alongside brands like Gul Ahmed, Lakhani and Al-Karam. It has been categorized as a Star product line of Nishat as the market for women fabric and apparel is huge, ever growing and presents quite a lot of potential. It has a high market share due to its exclusivity and quality that distinguishes it from its competition. As a consequence, it requires heavy investment to support its image as a brand with an attitude.

Cash Cows:

Nishat’s bed & kitchen linen and accessories can be categorized as the cash cows with which it earns a healthy and steady cash flow throughout the year. The market demand for bed and kitchen linen, though not dynamic, has always been there with a sustained and limited potential for growth. Nishat, with its unique and discerning image, has managed to capture a significant share of this slow-growing market, relative to its competitors like Ideas by Gul Ahmed, Identity by Al-Karam and ofcourse, ChenOne. Its bed linen is not only in high demand locally but is also one of its major imports.

Question Mark:

Naqsh, the clothing line of Nishat for men, can be categorized as its Problem Child or Question Mark. It’s a unit that hasn’t shown much potential and as a result hasn’t managed to gain as much market share or generate as much cash as was expected and required of it. The market for eastern wear for men has seen a rapid growth since the past few years and presents so much of unexplored potential. With every designer coming up with an exclusive clothing line for men, Naqsh faces serious competition from not only Gul Ahmed and Al-Karam but other market leaders such as Amir Adnan, Junaid Jamshed and Rizwan Beyg etc. To survive in such a fiercely competitive and fast-growing market, Naqsh requires heavy investments to hold its ground but hasn’t managed to succeed in gaining enough market shares as yet.

Dog:

Finally, fashion accessories of Nishat can be termed as Dog; unit with a low market share in a moderately growing industry of accessories. The demand for fashion accessories like hand bags, clutches etc, though has always been there, but it does not have that much of a growth potential. With much of the investment being done in the other three units, Nishat hasn’t paid heed to this particular market offering. Known by the masses as a brand for clothing and bed linen, only a niche segment of the market is aware of Nishat’s accessories even when ingenuity and style is maintained here as well. Hence, this unit generates just enough cash to maintain its market share.

Objective & Issues

First year Objective

We have planned to increase the sales volume up to 150 percent of current sales by expanding the market share along with superior customer value.

Second year Objective

We aim to launch the western wears of finest quality and exclusive class and achieve a distinguishable position in western wear as well.

Issues

Due to the saturation of market with huge competitors like Al-Karam, Gul-Ahmed and ideas it is quite difficult to capture a large share of market by providing superior value comparable with our competitors. Their distribution networks and large number of outlets could be a hurdle in making our product their first priority. Political issues are also matter of concern as there might be a political influence in establishing our brand in Karachi. Religious issues are also one of the hurdles in advertising via billboards. Financial situation of customers may also be a matter of concern as our all products are exclusive and have high prices.

Marketing Strategy

Nishat’s market strategy is based on market expansion and product development. Currently their target segment is exclusive and formal wear for formal now they target professional females including stylish and convenient outfits having a variety of designs but superior quality. Bed linen also needs to be emphasized more regarding variations in styles and designs. Nishat also plans to target entrepreneurs and business owners who wish to design their offices with their products in an exclusive manner by not only providing them their elite products but also special services would also be provided by their representative who would suggest them regarding interior decoration. Gents wear would also be focused involving a wide range of formal and informal shalwar suits under the supervision of a top class designer Hassan Shaharyar.

Positioning

Nishat aims to position its product as an exclusive and classical brand for both upper and middle class customers. Additionally they provide customer support services specifically to women to help them design their clothing by Nishat’s experienced designers. That is their differentiating point from their competitors.

Product Strategy

Nishat will launch exclusive designs of wear created by a variety of new designers. This innovation would be affective as upcoming designers work with more energy and creativity that would boost their sales. Free samples are delivered to customers to show how best our products are. Free sample is a useful technique in winning the loyalty of customers. This strategy is widely used to improve the market.

Pricing Strategy

Before setting prices of products, various elements are kept into mind.

Customer is of utmost importance. If customer is old, his track record is good and enjoys a favorable repute so profit margin may be reduced. Prices area determined on cost basis by adding certain percentage of profit. This is highly sensitive area.

Current pricing for their products are:

Unstitched fabric is 2100-3100 it would be revised with more variety having range 1500-3500

Stitched fabric is 1500-5000 it would be revised with economic and unique aspect having range 1200-10000

Bed linen is 1200-3000 it would be revised from regular and exclusive range of bed linen from 1000-5000

Bridal wear will be launched having introductory prices 20000-40000

Distribution Strategy

Nishat has their own outlets in Punjab and Sindh, and the product will be delivered only to registered outlets. As the manager of one outlet has enlightened the point why don’t sell their product other then Nishat outlet as their competitor is doing that he replied “we never want to enter in a market because as soon as we entered in it then our fake product will take birth as it happened with other competitors.” Our exclusive designs and products would still be sold at our authorized outlets .Furthermore to facilitate the customers, online shopping facility and door step delivery of order will also be started by the introduction of BUY ONLINE option on our website for that purpose we have acquired services of T.C.S for order delivery.

Marketing Research Strategy

Following are some research and development techniques:

Through Internet

Nishat has recognized the importance of information technology in business field and very quick to capitalize this opportunity. It has launched its website which tells buyers about Nishat products and also takes their valuable feedback and suggestions.

APTAMA buyer’s dictionary

All Pakistan textile mills association publishes a directory, which includes prospective buyers. This dictionary is published regularly. Marketing department carefully analyses it and find buyers for its quality products.

Action Programs

We have selected action plans as per different seasons and occasions:

February (on winter collection)

In this month the number of walk-in customer is high for winter clothing demand. Some visit for the bed linen, cushions, baby cots .Whereas main emphasis would be on winter collection.

July

Most of the buyers are people going back from vacations; they prefer to buy local stuff rather than spending more for the same stuff offered by international brands.

Reason: A complete bed sheet set including pillow covers at Nishat is priced at Rs. 3000 whereas any international brand would charge $140 for the same bed sheet and that too excluding pillow covers.

August (on summer collection)

In this collection mostly in Karachi customer influx increases with day in and day out and these days mainly women actively do shopping emphasizing on formal outfits for weddings and girls with their summer collections.

Eid (on kitchen accessories)

We also produce the products on the special occasions especially on Eid season involving an increased requirement for kitchen accessories.

In such occasions demand for Traditional outfit having eastern look is also increased in both male and female

Budgets

We have allocated budget for our products as per their market value and demand. Following is the distribution of expenditure for our product mix considering the market standing and market growth in order to improve our current situation.

Nisha …………………………………………………50 percent

Bed linen ……………………………………………...15 percent

Naqsh…………………………………………………..27 percent

Fashion accessories……………………………………. 8 percent

Controls

There are at least three basic requirements for Nishat to maintain its status as a successful brand:

It must provide a product (good or service) that suits best to its capabilities and for which there is a sufficient market.

It must provide the product with consistent quality at a level that appeals to intended customers and satisfy their needs.

It must provide a product at a cost that always a satisfactory profit and a rational sale price.

Profit will be controlled by following necessary measures:

Quality control

Design control

Customer Data Control

Product Identification and Traceability

Corrective and Preventing Measures

Internal Audit

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