Exercising in a B-School.....

Business Exercise for Mr. Manohar Kamath

The objective of today’s exercise was for every student in the class to go out and work in a retail establishment for the entire work-day, without spending a penny from our pockets and trying to get the guys to pay us for our labours. In the meanwhile, we were to also learn about the business we worked in.

It all began with 60 of us hitching rides from unsuspecting passers-by (we couldn’t spend remember) and reach our destination by about 9 am. Now most of us hadn’t had a chance to eat brekker, since the class started at 7 30 so we had a 2 point initial agenda, 1. get a job and 2. get something to eat.

The Search

As luck would have it, I went to 15 stores, all of whom threw me out either cos they didn’t want to shell out the dough (that was about 10) and the others wanted a letter from the college authenticating my claims. These included IDBI Home Finance, Reebok, Himalayas Drug Stores and Ceramic Masters. Since my luck wasn’t too good with big stores, I decided to try my luck with smaller grocery-type stores, well, these weren’t too hot about using my services either. One store, a Vijay Markets in Ghole Road, even got me to start working, before having a change of heart and saying he couldn’t pay me. Well, to cut to the chase, I was back on the road again.

Luck at Last

Finally, this fine, upstanding soul at the United Colors of Benetton Company store on Junglee Maharaj Road went to the trouble of calling up his regional manager in Mumbai to find out if he could keep me, and the answer, thankfully, was an affirmative. Rohit Powar, I shall remember you to my dying day.

Understanding the Business

This was the only store in Pune. Was running for about 3.5 years as a franchisee before being bought over by UCB in 2002. A much smaller store than is the norm for UCB, this covered 1,500 square feet (miniscule as compared to the 10,000 sq ft mega store in Mumbai) and at any point of time kept about 8,000 – 9,000 units of clothing. Of this, about 4,000 were mens, 3000 womens and 2,000 kids clothing. A very small range of accessories, luggage etc is kept. This is quite small a number, considering a Westside stocks 30,000 to 35,000 units on an average. But then UCB is in a different game; they want to be niche and exclusive.

Location-wise it was situated on prime property indeed, since JM Road is the place to go for shopping in Pune. Their neighbours included Levis, Nike, Adidas, Reebok, Weekender across the road and Wills Lifestyle right next door. Current sales levels averaged as follows:
Weekdays – Rs. 25,000
Weekends – Rs. 50,000

Seasonality

Seasonality is a major factor in retail sales, as was confirmed by my mentor. April and May were seen to be really dull months (April since exams were going on and may coz everyone is on holiday). 6 months away lie November and December, the peak season for UCB, with everyone wanting to purchase new clothes for the holiday season.

With this seasonality in mind, Benetton releases clothes in 2 collections, the Spring-Summer collection (February through August) and the Autumn-Winter Range (Mid-August through January). These stocks are classified into A, B and C categories and the deliveries are spread through the months, ensuring that the stores have updated stocks at any given point in time. The Manager, Rohit, travels to Delhi (headquarters) every 6 months to pick and choose the styles he wants to stock in his store. Considering he is responsible for the numbers that get delivered at the end of the month, the company gives him a free hand in choosing styles he thinks will sell.

Competition

Primary competition comes from Wills Lifestyle next door. They keep similar ranges to those Benetton has, formal shirts and trousers as well as the casual tees and loafers. Zodiac further down the road is considered negligible competition, since their market intelligence tells them that there are barely 10 walk-ins a day and that they must be languishing at Rs. 1,500 to Rs. 2,500 a day worth of sales. Weekender they say does about Rs. 3,000 to Rs, 4,000 worth of business a day, so they’re too small to worry about at the moment. Nike, Reebok and Adidas are in a different field altogether they say, and don’t count as competition. On the whole, retail is growing according to Mr. Rohit, with malls and major complexes coming up all over the place.

As far as pricing is concerned, UCB believe themselves to be in the mid-range, neither too expensive nor too cheap. Many customers who walked in today however, believed otherwise. Later on we shall see what they said. The price range varies from Rs. 329 for a basic Tee to Rs. 2,500 for a pair of trousers.

The clientele

In the few hours that I was at the store, the general age group of the customers was in the range of 16 – 25. UCB themselves define their TG as 16 – 35, equally split between men and women. With the kids clothing getting them barely 10% of revenues. The exact distribution of the walk-ins today, were

Women (Working) – 4
Women (Students) – 18
Men (Working) – 6
Men (Students) – 12

The manager believes that Pune still has a long way to go in terms of people becoming more open to experimentation with their clothes. Mumbai and Bangalore apparently rule the roost on that front. People are becoming more open with every day that goes by. While an year ago he would have had a tough task selling a skimpy top, today spaghetti tops move like hot cakes. Still, it might take Pune-ites about an year to get to par with the likes of Mumbai and Bangalore.

The Survey

I took a survey of about 10 people who walked into the store today and bought something. The questions asked were
1. How long have you been coming to Benetton
2. Why did you choose Benetton over Levis or Wills next door?
3. How would you rate UCBs product quality?
4. How would you rate UCB on Style/Fashion?
5. How would you rate UCB’s product range?
6. What do you think about Benetton’s prices?
7. Have you ever bought formals at UCB?
8. Have a look at the formals, would you consider purchasing them next time around?
9. Would you come here to buy party clothes, say for a Saturday night out?
10. What would you rate as Benetton’s biggest strength, or what gives them an edge over others in the same space?

1 - Most people were repeat visitors, who have been coming for over 2 years
2 – Just like the place, the people. Prefer small stores over big ones like shoppers stop etc.
3 – 5 / 10
4 – 7 / 10
5 – 5 / 10
6 - Everyone uniformly said that it is ”Too expensive”
7 – Only 2 had ever bought formals here
8 – Only 2 of the remaining 8 said they would buy formals here.
9 – Only 2 people said they would consider Benetton for party clothes
10 – Answers for these ranged from
· Good fits
· Good variety
· Fantastic colors



My notes

· The product range is very unique in terms of styles that they offer, colors etc, they are all one season ahead of the competition.
· Visual merchandising is their key strength. Benetton gets a lot of walk-ins from people seeing something interesting in the show window.
· Their most expensive products, the ladies handbags, are placed right up front. A lot of customers walk-in and their first impression is that the place is expensive. First impressions usually last
· The show window has 6 suitcases (along with other products). They have a common wall separating their show window from the store next door, VIP luggage. VIP also has 6 suitcases, Benetton needs to realize that suitcases aren’t their core strength(they sell all of 6 in a month).
· They have a very strong customer loyalty, as can be seen from the number of repeat visitors that Benetton usually gets. There have been cases where people come once or twice a year and shop for 18,000 – 19,000. This kind of a following needs to be exploited. Currently their feedback form asks for
o Ambience (Excellent, Good, Average)
o Merchandise
o Cashiering
o Customer Service
Need to gather a lot more info if it is supposed to improve their service.
· They need to have a better (or any) CRM program, which will help them give customers better value and at the same time boost their revenues.

Overview

Today, the Benetton Group is present in 120 countries around the world. Its core business is clothing: a group with a strong Italian character whose style, design expertise and passion are clearly seen in the United Colors of Benetton and the more fashion-orientated Sisley brands, and in sportswear brands Playlife and Killer Loop. The Group produces over 110 million garments every year, over 90% in Europe. Its retail network of 5,000 stores around the world is increasingly focused on large floor-space points of sale offering high quality customer services and now generates a total turnover of 1.9 billion euros, net of retail sales.

Founders

Luciano, Giuliana, Gilberto and Carlo Benetton, launched the activities of the Benetton Group in 1965.

Headquarters

Benetton Group's Corporate headquarters is located at Villa Minelli in Ponzano, about 30 km from Venice. Villa Minelli is a complex of sixteenth century buildings of great historical and cultural interest.

White-Water Rafting - An Adrenalin Rush like none other.

I'm not sure if you're had the opportunity to take on a raging river, which is coming at you with all its got, and coming out on top. Well those of you who havent, have missed something seriously spectacular. The thrill of being on a small rubber raft, with 5 or 7 other people, and looking a wave about 10 feet above you about to crash down on you is something worth talking about.

I'll start from the basics however, white-water rafting is a sport in which a rubber boat (commonly known as a raft) containing 6 or 8 people (depending on the boat size) travel down a white-water river. They are known as white waters for simple reason that they contain rapids (small sized waterfalls) and stones which cause the river to foam (ergo the "white").

White water can also be differentiated between on the basis of the depth of the river. The Ganges for example is very deep, certain stretches near Rishikesh (where rafting primarily carried out) are upto 30 feet deep. So there is absolutely no issue with a raft capsizing and the occupants being thrown out of the boat. The sheer depth of the river ensures that noone gets hurt. It has its share of fun though, since the rapids are also much bigger, though only grade 2+. Some of the most famous rapids on this stretch are the Rollercoaster, 3 Blind Mice and the Golf Course. This is a fun river to raft on if you're on a weekend break from Delhi/Chandigarh or thereabouts. Great Indian Outdoors, an adventure sports outfit based out of Delhi, provides a professional rafting experience for those interested.

My favourite river however, is the Tons, which is in Garhwal, just a few hours north of Mussoorie. The Tons is formed out of two tributaries, the rivers Rupin and Supin, which flow west from Himachal. The waters are glacial and the water temperature ranges from 2 to 5 degrees centigrade (thats really cold). At max, the tons is about 10 feet deep and the usual stretches where rafting is carried out is usually in the range of 3 - 5 feet, with really sharp boulders close to the waters surface. This is what creates the excitement however!!

The Tons truly defines the term white-water. It is raging beyond belief and every time a wave hits you, it knocks the breath out of your lungs, its that cold). A river has various oddities caused by the presence of rocks near the surface, like Holes, whirlpools, etc, and the Tons has the entire lot of them. It is a thrill to look a wave coming at you and having your paddle ready to slice through the wave to give your raft momentum and stop it from turning turtle.

There is great measure of team-work involved in rafting as well, which makes the experience all the more meaningful. Each person with a paddle has a crucial role to play, since we need to take the boat any direction the guide asks. You can hear this guy at the back, the guide, screaming "Hard Forward", "Hard Back", "Right Forward" or "left back" and so on and the respective person better comply, or there goes your boat. Its very strenuous, but then who said taking on the might of the river would be easy.

I have 2 aspirations where rafting is concerned, one raft on the Zanskar River (otherwise known as the Indus) and other is to raft on the Brahmaputra. I hope to accomplish both within the next couple of years! Anyone interested in rafting can email bhaskar@greatindianoutdoors.com or me, and we'll be sure to help you out.

Cheers,

Rahul.

Adventure Trekking in the Indian Himalayas!

The Indian Himalayas offer adventure seekers tremendous opportunities for white-water rafting, trekking, rappling, mountaineering or just plain relaxing. I've been dabbling my hands in this adventure sports business for the past 4 years now. And there hasnt come a time when the sheer beauty of the mountains dont dazzle you.

Imagine sitting on the peak of a mountain, say 5,000 metres above sea level, and gazing at an un-ending view of snow-capped peaks 360 degrees around you. It is an experience like none other. I recall this one particular trek i'd made in 2002 to the Garhwal Himalayas. Starting from a village called Chopta that lies at about 3,000 metres, we trek up through the snow to a place called Tungnath (4,100 m), which is famous for a Shiva temple. This was in April, when the snows had just stopped. Imagine our surprise when we saw the village deserted. not only that, there were no locks on any of the 20 odd huts. Apparently the villagers leave the village around december and head for lower reaches waiting for the snows to cease and then come back to Tungnath in May/June.

We didnt stop there. There is a track that goes further up to Chandrashila Peak, which stands at 5,300 metres above sea level. That has been one of the most exceptional sights of my life. There was a peak just north of Chandrashila, known as Chaukhambha, or the four pillars (it is actually a 4 peaked mountain), which stands at around 7,700 metres. There was a small plateau between the peaks, where we could see a snow-storm in action. I just sat there for an hour, without batting a lid, barely being able to breathe, for the magnificence of it all.

Trekking is a fantastic experience irrespective of how young or old one is. If you're reasonably fit, you can take up a simple or moderate stretch. One thing I can promise you, once you've been on a trek in the Himalayas, it is an addiction that will go down to your bones.

Cheers,

Rahul.

P.S: Watch out for the next blogs where I will expostulate on my true passion, white-water rafting!

Salsaholics Anonymous !!

I've discovered that Salsa, Merengue, Jive, Samba and other latin american dances are a fantastic means for individuals to express themselves. Salsa, to the casual observer, appears to be an extremely intimate dance form, where the lady and the man whirl around the dance floor in extremely complicated manouvres.

A person with insight however, will notice the fantastic emotional dialogue that is actually being carried out by the couple. The entire dance, is an intense conversation between the participants, and their proximity allows them to express their emotions, what they are feeling, angry, happy, sad, flirtatious, et all.... in an extremely expressive and clear manner.

I got into salsa to impress my erstwhile girlfriend, for whom I had decided to give up all my aspirations, exactly one year ago today! She was the daughter of a business tycoon, rich beyond belief, even a couple of years older than myself, but most of all, a fabulous salsa dancer. The first time I met her, was at a party in delhi where her salsa group had decided to land up on a saturday night. One look at her dancing, and I was hooked.

Moving back to bangalore, I decided to surprise her by enrolling for latin dance classes @ The Dance Studio. Its extremely hard work mind you, but tremendous fun. Our instructor pushed us to our physical limits and made decent dancers out of us. Those who were committed to perfection, the instructor pushed even harder, correcting every nuance of our movements and expressions. But 8 months of ardurous practise, I got my first compliment from the intructor. You cannot imagine the joy!!

Little doubt, that I would go to every salsa / latin dance party that was held in Bangalore and even in Mumbai. Nothing gives a person person more pleasure than when his ego is massaged. And you can bet your ego gets rubbed the right way, when every girl at a party wants to dance with you. Especially when they dont even know you, and have only seen you dance.

Well, business school was something I had aspired for for a very long time. And everyone of us succumbs to the lure of money. Today, I have finished my first 5 days of business school (SIMS in Pune) and with the way the schedule has been so far, it seems rather unlikely that my salsa will go much further for the next couple of years.

I have done this very same thing, often in the past. Where I take up something, get to a competent level, then due to some circumstance or the other, give it up or rather dont pursue it (will talk about those in a later post). This time however, I have decided to go the whole hog. I shall take classes for anyone interested (in my college or in pune) in Salsa, Merengue and Jive and stay in touch with this talent I have acquired (they say I have a little talent). Maybe even my instructor from Bangalore down to take special weekend workshops, once I have got my students to a reasonable grade.

Wish me luck guys.

Cheers,

Rahul.

P.S: That girlfriend left me a few months back, but the skill remained with me. I've made so many friends while learning this skill, that I thank her for it ;-)