Sitaram Textiles Ltd.

Submitted By: Group 4

Introduction
State owned textile mill with a product line of cotton fabric Located in Trichur, Kerala Product mix consisting of yarn and varieties of cotton textiles including mulls, poplins, etc. Capacity utilization was low for processing cloth Stiff competition from power loom sector in weaving process Company was working in traditional distribution chain of agent, wholesaler and retailer One agent in Tamil nadu, one agent in Andhra Pradesh, three agents in Kerala

Sector wise production of fabrics

25000 20000 15000 10000 5000

Mill Sector
Handloom Sector Powerloom Sector

0
1991-92 1992-93 1993-94 1994-95(P)

Fabric production
20000 18000 16000 14000 12000

10000
8000 6000 4000 2000 0 1991-92 1992-93 1993-94 1994-95(P)

Cotton Blended

100% Non - Cotton

Problem Identification
Poplin not generating adequate sales Break even at 190 million Current sales is 131.4 million Competition from unorganized sector in low cost segments Competition from organized players in premium clothing Competition from blended fabrics, as substitutes

Product Line Analysis

Existing product lines consist of poplins, mulls and printed cotton varieties Poplins
Major product line of Sitaram Textiles Substantial quality difference Not significant price difference Strong presence in South India, women in South India are the major users of underskirts

Cotton
In rural areas preference was high for well known brands Support from advertisements for branded bed sheets and lungies School administrators are in favor of mill products Potential market for industrial workers Higher income groups are having greater preference for branded items Dealer preference for brand name and quality

Various Channel Options

Agent Wholesaler Distributor Traditional Approach Direct supply to distributor One distributor in an area instead of multiple wholesalers Use of distributor chain Direct contact with schools/ institutions

Competing Products
Poplins High Quality Dhoties Uniform Suiting Uniform Shirting Fabrics for brassiers Bedsheets and Lungies

Nighties

Intro Into Blended Fabrics

Blended fabrics were mainly used for outer wear whereas cotton was for both Used in Nighties Chudidars School uniforms(shirts and suitings) Low cost items about 30% cheaper than premium products High difference in quality

Analysis of Blended Products

Nighties
Available at cheap prices from Mumbai and Kolkata at Rs.30-50/piece Not made in Kerala Demand not very high Changing taste

Chudidars
Cheaper garments from Ahmedabad and Mumbai Wholesale and retail needs to keep more stock for blends compared to garments

School Shirtings and Suitings Focus on Quality Purchased by school administration and organisations for industrial workers (50%)

Internal Analysis
Strengths High Quality Quality standards approved by SITARA Brand awareness 50% of wholesalers 30% of retailers Well spread out distribution network including agents->whole sellers->retailers Weakness Low capacity utilization Company in Loss

Internal Analysis (Contd.)

Area Mangalore Comment High brand awareness No competition from unorganized players No. of agents 1 Same for NK

North Kerala
Andra Pradesh South Kerala Tamil Nadu

No competition from unorganized players

Drop in demand No established Network C&F agent

2, 1 covers CK
1 1, Same for CK 1

Market Analysis
Blended clothes a high growth area (Appendix 6) Major volume for cotton is in
Dhoties Ladies dress material Lungies Bed sheets Coating Suiting/drill Shirting Ladies dress material

Major Volumes for blends

In cotton better quality poplins and poplins of 1.5 m width drivers Demand for dhoties on the decrease

Cotton
Product Underskirts Dhoti Fine cloth Fabric Poplins (1.5m) Cotton Cambrics Quality Very High High Very High Competition Low High Brand Loyalty Low Price(Rs) Premium High Na

Cotton fabric with or without Bedsheet and Lungies printing

Medium

Low cost player from Erode

Very low

Branded Lungis and Bed sheet Thin soft cloth

Cotton fabric with or without printing Good Mulls Medium

Organized players HIgh

High (supported by advertisemen t)

Low

Recommendations- Short Term

Product
Poplin
Produce 1.5 m variety more than .9m variety

Printed Clothes

Price
Keep the price at same level

Promotion
Push the cotton products by giving turnover discounts
Capacity utilization can be increased

PoP advertising in premium areas Reduce the turnaround time to retailers and

Place
Push premium products in North Kerala and Manglore Create a separate dealer for TN, rather than a C&F
Since dealers pay a critical role in sales

Analysis - Blended
Product Underskirts Brassieres Salwar Nightie Fabric blends 10-40% Bizzi Lizi (PV) all three/blends Bizzi Lizi (PV) Medium Quality Competition Both blend Low, Demand not met High, from low cost players North Single Player 18 to 35/m 23 - 31 Price(Rs)

Dhoti

Chiffon Blend
Blend

High
Low Medium

High
High Mills Process house

High
Very low (50%) 25-27.5 20 20 20

Uniform shirting

PC(68-32) blends

Uniform suiting

Blends Blends

Medium

Low cost players from Surat

Recommendation-Long term
Company should get into blended fabrics
Bizzi Lizi (PV) PC

Develop a sales team to sell to institutional customers Company can act as a supplier to branded players as they have good quality Pull out of Mulls market Company should position itself as a premium player supplying to branded players and institutions along with retailers