Changing Mono Brand to Multi Brand Retailing

The broad objective of the report is to analysis Changing Mono Brand to Multi Brand Retailing, here focus on Singer Plus. The basic analysis is challenges and opportunity of multi brand “SINGER PLUS” retailing. other objectives are to find out customer acceptability of “SINGER PLUS” shop as multi brand and find out profitability of “SINGER PLUS”. Finally conduct SWOT Analysis of Multi brand retailing.

Objective of the study

The objective of the report can be categorized as below:

Broad objective:

The broad objective of the report is to study the challenges and opportunity of multi brand “SINGER PLUS” retailing.

Specific objective:

The specific objectives of the report are to

  • To conduct SWOT Analysis of Multi brand retailing.
  • To find out customer acceptability of “SINGER PLUS” shop as multi brand.
  • To find out profitability of “SINGER PLUS”.

 

Methodology

The study is divided into two stages. In the first phase, exploratory research was undertaken to gain better understanding of retail and distribution channel. The study started with secondary data and information collection regarding retailing, multi brand concept, consumer electronics market in Bangladesh and singer plus brand.

The second phase of the study was a study try to analysis customer acceptability of multi brand store.

Primary Source:

The survey is done within the customers of Singer Bangladesh Ltd.

In-depth interviews were conducted with the key marketing and sales personnel of the Singer Bangladesh’s Sales and Marketing services team. The idea was to obtain information related to introducing multi brand retailing of Singer Bangladesh. Several sales personnel were also interviewed to get the idea of the present situation.  I also do KII (Key informant interview) with Business Development Manager and National Sales Manager for better understanding of current market place scenario.

Secondary Source:

Majority of the secondary data was obtained from the MIS Department of Singer Bangladesh Ltd. Annual reports and different other departmental analysis augmented this report to take a comprehensive shape. I also take information from websites for getting insight of worldwide consumer electronics market.

 

Distribution and Marketing Channel Concept

Introduction

A truly marketing concept oriented organization selects its channel of distribution in such away that suits the present customers and capable of attracting new customer is a decision of great strategic importance. It is a decision, which helps to drive the subsequent logistics system, and providers the customer satisfaction envisaged by the marketing process. From company’s viewpoint, choice of the wrong channel can push up the distribution costs alarmingly, whereas choice of the right channel can provide the company with a compressive edge.

Each channel system creates a different level of sales and costs. Once a distribution channel has been chosen, the firm must usually stick with it for a long time. The chosen channel strongly affects, and is affected by, the other elements in the marketing mix. Each firm needs to identify alternative ways to reach its market. Available means vary from direct selling to using one, two, or more intermediary channel levels.

Channel design begins with assessing customer channel service needs and company channel objectives and constraints. The company then identifies the major channel alternatives in terms of types of intermediaries, the number of intermediaries, and the channel responsibilities of each. Each channel alternatives has to be evaluated according to economic, control, and the adaptive criteria.

Just as the marketing concept is receiving increased recognition, more business firms are paying attention to the physical distribution concept. Physical distribution is an area of potentially high cost saving and improved customer satisfaction. When order processors, warehouse planners, inventory managers, and transportation managers take decisions, they affect each other’s cost and ability to handle demand. The physical distribution concept calls for treating all these decisions within a unified framework.

From an operational standpoint, a marketing channel is the path a product or service takes as it moves from the manufacturer to its end users or customers. The very basic channel structure shown in Exhibit was the rule in the years following World War 2nd. In those days, the path between manufacturer and consumer was a straight one. A manufacturer faced only one decision: whether to use a direct or indirect channel of distribution (COD).

 

Exhibit: Basic channel structure*

Manufacturer—-Marketing channel of distribution—-Eventual end user/consumer

If the manufacturer selected a direct channel, it hired a sales force to get the product on the shelves or into the hands of consumers. If the manufacturer was too small to hire a proprietary sales force, it opted for an indirect channel and hired a distributor to sell to end users. As time passed, the path between manufacturer and end user developed a thousand twists and turns. In fact, today it is less like a path and more like a wheel, with the manufacturer at the “hub” connected to the end user at the “tire” by dozens of direct and indirect channel “spokes.”

 

Retail Distribution Channel of Singer

Singer moved ahead to retain its position as a national retailing icon, with consumer-centricity as our focal point. Progression towards a comprehensive expansion of singer retailing presence throughout the nation. It is pertinent to record that the Company’s focus shifted somewhat towards Channel Management, away from its customary emphasis on Brand and Category Management. We built further on the strengths of our Retail Channels namely ‘Singer Plus’ along with the Trade and Institutional Channels. Channels of Distribution are the conduits by which our multifaceted Brands and Categories are introduced to consumer’s homes and it is imperative that the foundation of a strong retailing presence must rest therein.

During the last year Singer established world class merchandising standards for retailing across this distribution network, substantially increased product knowledge of its sales teams through continuous training and filled gaps in the distribution network with new stores. These initiatives further enabled us to standardize singer consumer offer across the nation, overcoming disparities between the Urban Rural divide.

Singer has over 254 retail stores over Bangladesh and have 7 ware housing facility at various points of country.  It facilitates quick and smooth distribution of products and maintains fair level of inventory to meet the demand of a particular region.

The physical flows of goods are usually:

  1. Warehouse to warehouse
  2. Warehouse to shop
  3. Shop to shop
  4. Shop to warehouse to shop

The products are transported by trucks from transport companies. The District manager has the authority to arrange transfer of goods between shops/warehouse in his district with approval from his Area Manager. In case of shop to shop transfer in same district, the District manager handles it. If the transfer is to be between different areas then the district manager contacts the Area Manager.

The District Manager monitors the distribution of goods for the warehouse in his district. All the transfer of goods is recorded with debit notes, copies of which are maintained in the shops, warehouses and BMO.

In case of any damage to goods received, the shop manager will inform the District Manager, who will investigate the matter and inform the assistant Distribution manager. He will then instruct the warehouse to charge the transportation company for compensation.

Another important job done by this Department is to generate yearly physical inventory report through the Credit Inspectors. In a warehouse Product is store under Distribution and Administration of warehouse is under Commercial department. For store inventory factory asked by central warehouse, sale of product in warehouse asked by Distribution department.

Singer Retail network consist of singer plus, sisal world, sales agent, whole sales, singer cables, sewing academy. Each channel has its own strength and has its target customer base,

 

Performance of each channel:

Singer plus:  this is the most active network of singer network. It consists of over 254 shops and outlets. With introduction of Singer plus stores Singer stepped into multi-branding in 2005. The concept of Singer plus stores is to provide valued customers with a variety of choice under the same roof. Singer is offering products of world famous brands along with Singer branded products at Singer plus stores. Consequently same world famous brands like – Samsung, Haier, Whirlpool, Hitachi, MEG.XL, Kodak, Philips, Emeishan, Moulinex, Sebec and Yashica along with Singer branded products is available at its outlets.

Singer plus contributes 80% of the revenue.

Sisil World: it’s a new distribution channel .yet to official inauguration sisil world promises targeting new market segment and generating more revenue for company. It will consist of product with different pricing strategy and more options for young buyers.

Sales Agents:  for remote place or serving small community company gives a person sales agency of singer product with same guide line of singe shop. Typically it have low sales volume compare to singer plus. But it serves as singer voice in distant location.

Singer sales agents contributes abut 8% of revenue which includes in singer plus.

Whole sales: this is distribution network of independent business owner with affiliation with singer. They follow their own guide line but receive products from distribution warehouse.

Whole sale contributes about 5% of total revenue of singer.

Singer Cable:  it deals with copper cable selling unit of singer. It contributes 6% of revenue for singer.

Sewing Academy:  one of the parts of sewing academy is to provide sales through sewing teachers and it contributes 1% of singer sales.

 

Brand and Category Management

Singer has many different brand and product category.  To become market leader in each category it traditional emphasis on product management and product department have do the followings. They manage which product will come, which product will stay and which product will not come.

  • Supervising the launching of new products. This involves “pushing” the product departments to find new products to sustain company growth, or advising them to study the feasibility of particular products.
  • Continuous monitoring of the sales of new and existing products and analyzing.
  • The reason for a decline in sales.
  • Reviewing trend analysis reports to find out long term demand for products and giving feedback.
  • Feasibility study of product: All feasibility studies are done through “in-house” teams, and no external agencies are used.
  • Determining degree of optimum CKD. The more “knocked-down” lower the product cost per unit.
  • Determining which source is most efficient in terms of price, transportation cost, production cost, etc.
  • Determining when to bring, how much to bring, what frequency
  • Inventory plan
  • Financial feasibility

 

 

 

Analysis of SINGER Plus

SWOT Analysis

The SWOT analysis of singer plus disclose that overall concept of multi brand retailing is a more power channel than mono brand. SWOT analysis consists of an analysis of the external and internal environments. So I do analysis of strengths, weaknesses, opportunities and threats are as follows:

STRENGTHS

  • Multi brand store is more attractive to consumers compare to mono brand store. Consumer has more choice to make and have options to test different features of various brands in same product category.
  • Singer has already a large customer base. Its presence in this region more that 100 years make generations of customer who use singer products and see their ancestors to use them.
  • Customer has trust on brand “singer”. For many reasons singer name is similar to quality and trust. So it can be transformed to singer plus with few steps.
  • Company has sufficient ability to research, develop and change product line and category.  For example singer introduce singer, Haier, MEG XL, Samsung color TV in its CTV product category. It continuously changes minor features of individual models and some times introduce new and improved models. So it is unique advantage of company to control product category.
  • Ability to introduce customized version of products that is environment friendly to Bangladesh and suitable to weather and other condition. So IPS of singer has more suitable for local weather and same applicable to CTV, Ref and other products.
  • Singer Bangladesh ltd has more competence and expertise about consumer electronics business in Bangladesh.
  • Singer Bangladesh has 12 month warranty for all its products and customer perceives it as valuable for them. Singer also provide extended warranty if necessary and have customer protection plan which assures user complete mind satisfaction
  • Singer has existing plant facility for electronics products and can take advantage over who don’t have. So if necessary singer can introduce new model of products in shortest possible time frame.
  • Singer has country wide sales, distribution and service network. So it can easily serve large community anywhere in Bangladesh.
  • Singer have good liaison with other manufacturer and OEM vendors. So it can virtually introduce any compatible products to competitor.

 

WEAKNESSES

  • Cannibalized by own brands in same product category.  As customer seeing singer as mono brand and thus new introduce brand some time reduces sales of convenient popular models of singer products. For example- introducing haier Air conditioner reduces sales of singer brand in short time. So it should be consider more cautionary before introducing similar products.
  • Singer service center is more capable in servicing its own branded products and have weakness in serving other brands. Some time it is lacking of product knowledge of technicians and some times scarcity of spare parts of new models. So customer gets disappointed when they expected same level of service for new brand products.
  • Price of same model is significantly different compare to products sold by other individual vendors. So customer perceives price of brand other than singer sold in singer plus store is higher and find no differences in product or after sales service.
  • Existing support personal cant handle frequent introduce of new models or new product range. So singer can’t do any radical change in its product line in short time.
  • Singer emphasis more on entry level models of products, so customer who seek new and improved features frustrated by lack of visible distinctive features that can justify the premium price it charges.
  • Absence of traceable market potential barred singer from introducing new and innovative products. So singer is not market leader in many product categories. For example-   singer motor cycle fail to become any big share despite the fact that motor cycle market is big in Bangladesh.
  • High cost of setup and operation make it difficult for singer to experiment with new products or any radical change in product line.

OPPORTUNITIES

  • Freedom of customer is rising day by day, so if we offer more choice for them, they will more loyal to store.
  • Customer preference to new and innovative products is rising. So new model IPhone create market demand in Bangladesh also after introducing the product. So market is not local anymore .we are citizen of global market place. So singer has option to response in these phenomena.
  • As singer is the largest network in Bangladesh .It has fewer competitors who have same capacity. So there is more opportunity to play in this small market.
  • Singer have strong distribution network in Bangladesh. So if singer plans to introduce new product which have sufficient demand that can produces windfall sales and revenue. As singer already move from brand and category management to channel management. So more opportunity is there for singer.
  • There are potential customer market which is not reached yet and new generation of customer who have more buying power and have great potential for any dynamic company. As some source said that mobile phone, portable music player and digital came also have 400 crore market potential. But singer yet to enter the market.
  • Many small producer and importers willing to use the country wide distribution channel and in this sector singer has more opportunity then ever. So if possible singer can offer wide range of products for new and old customer base. As it is no more mono brand store but a multi brand retailing store.
  • Singer has more brand value than new compactors. So singer is in stronger position from very beginning.
  • Singer plus offer brand which already have significant market value and market share.

THREATS

  • Singer has well organized and old rivals like LG-Butterfly, Sony- RANGS, Toshoba-Rangs, and Philips-Transcom. They are always tried to beat singer in many ways.
  • Singer also has small and dynamic competitors who are small in nature but have very dynamic in action. So they response quickly to any market change and take the first harvest. So in this respect singer is slow in response in market change.
  • Same level of product feature offer by competitor and there is no unique selling feature that can be transfer prospects to loyal customer. So products offered by rivals have no different and thus customer perceived them as more generic products.
  • Predatory pricing by competitors compare to premium pricing by singer plus. With similar types of product with no unique feature, it is difficult to compete with fly by night competitors.

 
Situational Analysis: PEST Analysis of “Singer Plus” retailing.

Political Factors:

Form past experience it shows that political factors contributing very low in consumer retail business. There is always demand for consumer goods despite the political situation. So although year 2007 goes under various political torn moil but sales of singer products is good. So it explains that political factors are not so important for CE business. But there are some impacts for bureaucratic influence over business and level of corruption and other facts that controls how to do business in Bangladesh.

Economic Factors:

Now a days pro reform policy of government leads to many privatization of industry and business. So there is some improvement in business sector. But traditional Bangladesh is an agricultural country. So consumer electronics sales in this region are not directly proportioned to global scenario. But Bangladesh has some potential new industry and promises future growth. Buying power of consumers is low, so there is always risk of doing business of electronics good which some time consider as luxury goods. There is also constraining from electricity production and consumption demand ratio. This is very alarming situation for industrial growth and other development. So due to this reason Bangladesh is lacking behind.

Government has policy which encourages FDI (Foreign Direct Investment) and thus many global companies have business in Bangladesh.

Socio- Cultural Factors:

By nature mid level consumer are value driven. So there is high demand for durable home appliance which offers best value for money. Thus singer plus have great opportunity in this market condition. Traditionally singer offers goods which are durable in nature and have good will for its service. So socio-economic factors are in favor of introducing singer plus retailing. But lack of electricity in rural area barred singer plus form expanding its network to root level.

Technological Factors:

Singer has heritage of supplying technically sound products. Singer has relation with major OEM players in China, Thailand, and India and thus its power of outsourcing production plant to 3rd party make possible singer to thing only marketing and distribution of goods. Thus technical infrastructure e is in favor of singer. More over in present situation Bangladesh has very little option for making a factory for refreezaretor or air cooler. So out sourcing is the only solution.
Profitability and customer acceptance of singer plus as multi brand retailing

Profit and Pricing

Many companies formerly thought that they would make the most profit by paying the least to their suppliers, employees, distributors, and dealers. This is zero-sum thinking, namely that there is a fixed pie and the company keeps the most by giving its partners the least. This is not true; the company ends up attracting poor suppliers, poor employees, and poor distributors. Their outputs are poor, they are demoralized, many leave, replacement costs are high, and the company is impoverished. Today’s winning companies work on the positive-sum theory of marketing. They contract with excellent suppliers, employees, distributors, and dealers. They operate together as a team seeking a win-win-win outcome. And the company ends up as a stronger winner.

Pricing is one of the core elements of marketing management. The American Marketing Association offers this managerial definition Marketing is the process of planning and executing the conception pricing, promotion, and distribution of ideas, goods, and services to create exchange that satisfy individual and organizational goals. There are different ways of pricing products and service. Each has its own advantage and disadvantage. Pricing of a brand is a challenge. Companies need to define the brands basic essence to be delivered wherever it is sold. Local executions can be varied as long as they deliver the feel of the brand. Companies must measure their brand-building effectiveness not by the old measures of awareness, recognition, and recall, but by a more comprehensive set of measures including customer perceived value, customer satisfaction, and customer share of wallet, customer retention, and customer advocacy.

Pricing at Singer Plus:

Singer follows a cost plus mark up policy as this is best suite for a retailer and company can control its cost and maximized its profit. Before introducing multi brand it is singer mono brand. It has already a well established network and new channel can use it as expansion. So if consider incremental cost of introducing singer plus, this is very nominal and most of the cost are already incurred by singer stores. So if we can consider new costs incurred by singer plus as follows. It can be seen that there are no or minimum cost associate with introducing the new channel concept singer plus. Thus it enable company to further stronger its position on Bangladesh market.

So if we sell singer plus new brand as OEM cost and transport cost and profit margin then it enable company to capture the market in shortest possible time. So we can view singer plus project as positively. An only chance of negative option is if company can’t sell it at cost price. This possibility is very low.

 

Customer acceptability of “singer plus” as multi brand retailing.

Multi brand retailing in consumer electronics business is fairly new in Bangladesh. Singer Bangladesh has already a countrywide distribution network and has good liaison with multiple vendor. So it is easy for singer Bangladesh to introduce multi brand retailing channel “Singer Plus”. But here we try to find customer acceptability of “Singer Plus”. Singer has mono brand presence in this country more than 100 years. So there are legacy which must consider in this case.

We review customers and prospects of singer brand to study the effect of introducing multi brand “Singer Plus”. Based on the result of the study findings are as follows.

 

 Customer view point of “singer plus”

Traditionally consumers see singer as a brand of Sewing Machine Company. Over Time Company transform to retail distribution channel. But legacy continue, still singer company can’t deliver singer sewing machine quantity to fulfill the customer demand. Still sewing machine sales is stable despite the fact that home use of this product is narrow market.

I found 85% of customers welcome multi brand “singer plus”. Out of 67 respondent 57 welcome singer plus, others want to stick to only singer brand.

Customer ranking of brands at singer plus

Which brand do you give most priority? In this response it reveals that singer is most popular brand in singer plus store, but Samsung is also very important place, haier brand get some popularity in short time for its air cooler series. Other brands are not that significant.

Customer’s priority when purchasing a product.

When purchasing a durable consumer product customer prefer product quality as most priority thing, price is also important factor. Customer response in this question is mix. Result is as follows

Customer’s Brand Loyalty in Singer plus store.

Regarding Brand Loyalty which best describe you? Answering to this question 60% customer said they prefer singer product,23 % said it depends and 17 % customer don’t have any fixed brand preference.

 

Conclusion & Recommendation

Based on the study of singer plus. I find it positive and welcoming of introducing new distribution channel and marketing channel named “Singer Plus”. My recommendations are as follows:

  • Marketing is become more based on information than on brute force sales power. So company should know industry, prospects, problems or potentials. I recommended sales automation software where a sales person can record each prospects and customer needs, interests and options.
  • Besides sales automation software I also recommend real time inventory management, where a marketer can tell what the company and its competitor sold yesterday and with more details. This will enable not only more synchronous production planning but also real-time tactical responses.
  • Nurturing and caring each brand name with detailing and to make sure there is no cannibalizing brand or category. Conflicting brand and products will hamper overall company image. So singer plus should take care when introducing new brand.
  • Market segmentation and proper product mix and marketing mix are necessary for success of multi brand retailing. So some marketing research project need to start for better understanding the market and customer.
  • A unified pricing strategy for product category, so that company can take advantage of attracting different customer segment.
  • More integration with OEM vendors, Supplier is need for better product availability.
  • 3 times inventory of sales forecast or sales target is necessary for proper merchandising and promotion attractiveness.
  • Improved service center and customer service in key to manage multi brand retailing successful.