IN-COMPANY TRAINING REPORT

ON

MARKETING STRATEGY OF TOMMY HILFIGER

COMPLETED IN TOMMY HILFIGER LTD

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF BACHELOR OF BUSINESS ADMINISTRATION (BBA)

GURU JAMBHESHWAR UNIVERSITY OF SCIENCE & TECHNOLOGY, HISAR

TRAINING SUPERVISOR: SUBMITTED BY:
MR. SAUMYA GHOSH MANDEEP SINGH
(Senior Marketing Manager) Batch: 2007-2010 Enrollment No.: 07511213132

Session: 2007-2010

RNIS COLLEGE OF MANAGEMENT
DIRECTORATE OF DISTANCE EDUCATION
GURU JAMBHESHWAR UNIVERSITY OF SCIENCE & TECHNOLOGY, HISAR-125001
PROJECT REPORT

ON

MARKETING STRATEGY OF TOMMY HILFIGER

COMPLETED IN TOMMY HILFIGER LTD

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF BACHELOR OF BUSINESS ADMINISTRATION (BBA)

GURU JAMBHESHWAR UNIVERSITY OF SCIENCE & TECHNOLOGY, HISAR

TRAINING SUPERVISOR: SUBMITTED BY:
MR. SAUMYA GHOSH MANDEEP SINGH
(Senior Marketing Manager) Batch: 2007-2010 Enrollment No.: 07511213132

Session: 2007-2010

RNIS COLLEGE OF MANAGEMENT
DIRECTORATE OF DISTANCE EDUCATION
GURU JAMBHESHWAR UNIVERSITY OF SCIENCE & TECHNOLOGY, HISAR-125001
STUDENT DECLARATION

I hereby declare that the Summer Training Report conducted at “Marketing Strategy Of Tommy Hilfiger” submitted in partial fulfillment of the requirement of bachelor of business administration (BBA) RNIS College of Management, Affiliated to: Directorate of Distance Education Guru Jambheshwar University Hisar. It is my original work and the same has not been submitted for the award of any other Degree/diploma / fellowship or other similar titles or prizes.

MANDEEP SINGH
Student signature

PREFACE

This project aims at looking at the Tommy Hilfiger in India. Secondary sources have been used to look into the apparel sector of India. It has been found out that the textile industry is one of the oldest industries in India. It has played an important role in generating foreign exchange reserves and creating employment opportunities. The growing fashion consciousness during the 1980s and the convenience offered by ready-to-wear garments were largely responsible for the development of the branded apparel industry in India.

Moreover the study further looks into the branded T-shirt/ Jeans market through a primary study conducted in Delhi and NCR. The findings have been listed in the report along with the recommendations for branding in the segment.
ACKNOWLEDGEMENT

There is always a sense of gratitude which one express to other for the helpful so needy services they render during all phases of life. I would like to express my gratitude towards all those who have been helpful to me in getting this mighty task of training to a successful end.

With the deepest sense of esteem and gratitude I express my sincere thanks to Mr. Saumya Ghosh (Senior Marketing Manager) under whose able guidance I was able to learn much and successfully complete my summer training.

I would take this opportunity to thank all my family members for their helps & suggestions during the course of project work. I am also thankful to all my friends who gave me constant & continuous inspiration to complete this project.

MANDEEP SINGH
Enrollment No.: 07511213132

TABLE OF CONTENTS

TOPIC PAGE NO.

CHAPTER-1: INTRODUCTION OF THE COMPANY 1-17

CHAPTER-2: PROFILE & ORGANIZATION STRUCTURE OF THE COMPANY 18-33

CHAPTER-3: OBJECTIVES OF THE STUDY 34

CHAPTER-4: METHODOLOGY ADOPTED 35

CHAPTER-5: CONCEPTUAL DISCUSSION 36-51

CHAPTER-6: ANALYSIS OF THE PROBLEM UNDER STUDY 52-66

CHAPTER-7: INTERPERETATION OF RESULTS 67

CHAPTER-8: SUGGESTIONS/RECOMMENDATIONS 68-71

REFERENCES/BIBLIOGRAPHY 72 ANNEXURES 73-76

QUESTIONNAIRE

CHAPTER-1
INTRODUCTION OF THE COMPANY
1.1. INTRODUCTION OF THE COMPANY
The Tommy Hilfiger brand was launched in 1985. Tommy is a range of clothing designed to bring 'American classics with a twist' to consumers. Today, those consumers represent people from all races and backgrounds and can be found in practically every country around the world. As a truly global brand, Tommy's preferred suppliers are those who can fully appreciate each individual marketplace and in Europe nobody understands the retail marketplace like Anker.

INDIAN TEXTILE INDUSTRY
TEXTILE AND CLOTHING SECTOR

Building on recent advances
Just A decade back, the Indian textile and clothing sector had almost been written off; in fact it was pejoratively called a sunset sector. The erstwhile ugly ducking now looks very attractive. Indeed the last two yeas have been a dream run for the Indian textile sector. It has witnessed tremendous growth in raw material, especially cotton: fabric production is growing at around 10 percent on an already high base and the all-around investment in the sector has been unprecedented.

Any study of the prospects of the textile sector in the years to come necessarily engenders three patient questions. First, what growth target in the Indian industry envisaging in the next five years; second, can the industry achieve and sustain this growth, and third, what will be the new trends and risk factors in the coming years. Lt us first examine the performance of the industry in the last few years.

Firm raw material base
The raw material situation has been highly encouraging especially in cotton against a low of 101.5 lakh bales (170kg) in 1984-85. The crop in 2006-07 is placed at 270 lakh bales. There is reasonable price stability and no more uncertainty related to imports. The position has improved even in mad-made fibres. A reduction of excise duty from 19 percent to 8 percent in the 2006 budget has boosted domestic demand of MMF yarn and fabric. A further rationalization of duty will certainly work wonders. The growth in fabric production, which is often seen as an indicator of the country’s textile prowess, has been very encouraging in recent years. It was 7 percent in 2004-05 and the expectation for the current year is 10 percent.

The sector has witnessed unprecedented investment trend in the last few years so much so that for the last five years, the CAGR of investment has been around 100 percent. What is more encouraging, even the erstwhile laggard sectors like processing where India has t4raditionally been very weak, have drawn significant investments in the last few years.

Weaknesses persist
The immensely satisfying developments of the last few years should not blind one to the fact that weakness still persist in this sector.
|Investment in processing segment |
|Year |No. |Project cost sanctioned |
|(Rs. Crore) |
|1999-2000 |53 |796 |
|2001-01 |98 |711 |
|2001-02 |67 |212 |
|2002-03 |72 |210 |
|2003-04 |73 |260 |
|2004-06 |159 |986 |
|2005-06 |108 |1157 |
|2006-07 (E) |120 |4500 |
|Source; Office of Textile Commission |

The legacy of the earlier restrictions has ensured that the textile sector continues to be highly fragmented and poorly modernized. Thus, in the weaving sector, out of a total of 2 lakh looms, hardly 50, 000 are shuttle-less looms. Also, the average size of a weaving unit in the decentralized sector is 4-5 looms. In the processing sector, there are more than 10,000 hand processing units using obsolete technology. Even in the power processing units which number 2334, only 227 can be said to be modern.

Thus if India is to compete with textile giants like China, the industry has a long way to go in technological up-gradation, modernization and consolidation (scaling up) of the units. Another weakness is the heavy dependence on cotton. While elsewhere fashion preferences are dictating 60 percent usage of man-made fibres vis-à-vis 40 percent of cotton, in India the reverse is true. Thus in the export sector, India misses on many opportunities where manmade or blended fabric is preferred.

The sector is also hampered by the absence of big-sized global textile and apparel producers, with their attendant marketing and other linkages.

Despite the weaknesses, the Indian industry is brimming with unprecedented confidence and optimism. It is no coincidence that two separate studies (through some members were overlapping) in 2006 projected almost identical growth targets for the industry. The first study was the government sponsored ‘Report of The Working Group on Textile and Jute Industry for the 11th Five year Plan’ in which the textile industry is envisioned to grow at 16 percent in value terms to reach the level of $ 115 billion by 2012. Cloth production is expected to grow at 12 percent in volume terms while apparels are expected to grow at 16 percent in volume terms and 20 percent in value terms. Exports are expected to grow at 20 percent in value terms.

The second Study was the CITI (Confederation of Textile Industries-the leading textile association) sponsored ‘Vision for the Indian Textile and Clothing Industry’ prepared by CRISIL. The CITI Vision Document envisages a figure of $110 billion by 2012 boosted by a CAGR of 10 percent p.a., in the domestic and 19 percent p.a. in the export sectors.

These growth targets envisage a fundamental sift in the textile scenario and a trajectory of rapid growth. Cloth production registered a growth of 8.6 percent during Eighth Plan (1997-2002) and 4.21 percent during the Tenth Plan (2002-07). A scenario based merely on past growth would have given a target of paltry 6 percent CAGR during 2007-12. Yet, the industry is confident of achieving a 12 percent cloth production CAGR during 2007-12—a confidence born out of the high growth plan taken by the economy.

Some detailed economic calculation led us to this conclusion. Taking 8.5 percent as the GDP growth rate p.a. during 2007-12, and estimating a marginal increase in clothing expenditure as percent of PFCE (private final consumption expenditure) from 5.3 percent in 2005-06 to 5.9 percent in 201-12 (due to several demand and supply side drivers,) the total demand for fabric came to 92.6 billion sq.m—very close to 12 percent CAGR for fabric production during 2007-12. It would be interesting at this point to understand the factors that are expected to boost textile demand.

Growth drivers

In the domestic sector, disposable incomes of families are on the rise. There is also the ‘demographic dividend’—a sharp increase in the percentage of younger and employable persons till 2025. Above all, the penetration of organized retail (the percentage is expected to increase from 3 percent to 10 percent by 2010) will increase the availability and hence the purchase of textile and clothing.

In the export sector, the end of the Multi Fibre Arrangement has given a boost to Indian textile entrepreneurs, which is aided by the progressive dismantling of spinning and weaving in the developed world. And the quota limit on China till 2008 is another incentive for the Indian industry to strengthen itself in the meantime.

In the present scenario of optimism and the country’s overall high growth trajectory, the targets are certainly achievable. At the macro level, the targets have some implications in terms of requirements for investment, machinery, infrastructure and manpower.

The investment required during 2007-12 will be Rs.1.5 lakh cross (certainly achievable when compared to the investment in 2006-07), the trained manpower requirement will be 6.5 million; there will have to be heavy influx of machinery, which will men practically doubling of the existing capacity of 29.59 million spindles in spinning, adding over one lakh shuttle-less looms in weaving, and a substantial investment in processing, to cover at lest 50 percent of the projected fabric under continuous power processing. The industry will have to add 38.48 billion sq.mt capacity of such plant to the existing capacity of 7.62 billion sq.mt of continuous power processing.

Are these investments possible domestically? According to informed industry and government estimates, the continuance of the Technology Up-gradation Fund will ensure at least two-thirds to three-fourths of the required investments to come from the domestic textile industry.

Foreign capital

For the remaining 25 to 35 percent investment, India will have to depend on foreign direct investment or even private equity corning in a big way. One may not compare India with relatively smaller economics, but even in China (which like India straddles the full range of textile and apparel value chain), out of its overall exports of textile and clothing, foreign-investment enterprises accounted for about one-third in 2004. In fact official statistics confirm the presence of over 20,000 foreign invested enterprises, with an FDI inflow of $ 5.3 billion in 2004.

In India’s case, FDI will be required for high quality fabric manufacturing especially in processing, synthetic fibes, technical textiles as also in widening the base of the machinery sector.

Several new trends can be seen in the textile and clothing sector, which will strengthen the sector. There is a significant scaling up by way of horizontal consolidation and vertical integration. The majority of the investment under TUFS has come not from new entrants but from the existing players. As the restrictions on capacity additions were removed since the mid-1980s, the mean investment per firm in plant and machinery has significantly increased. The trend has greatly accelerated in the last two years, Bigger players such as Arvind, Indian Rayon, Vardhaman, Welspun and Alok have planed investments of over Rs.10,000 crore in the last few years (Source—Office of the Textile Commissioner).

Second, there has been significant forward integration by yarn makers, spinners and major weavers into garments—examples, Arvind Mills and Vardhman. Interestingly, significant member of ginners are forward integrating into spinning as can be seen in the cotton areas of Andhra Pradesh and Punjab.

Third, significant backward integration by small and medium kitwear exporters into yarn making is being witnessed in the Coimbatore-Tirpura area.

Finally, textile producers are adopting IT-driven production production process control systems as also productivity enhancing energy audits. In fact, there was a huge response to the seminar organised by SIMA and SITRA on usage of IT in small and medium enterprises in the textile and clothing sectors in early 2006. Some of the best examples of full integration are exemplified by Alok, Eslspun Industries and Vardhman Industries, who straddle the entire range from spinning to branded garments and home textiles. With increased purchasing power of households, demand for textiles has been buoyant. A healthy development of this context has been the rapid rise of domestic brands. Practically all the top 20-30 textile and apparel firms have introduced their domestic brands and are aggressively positioning themselves within segments of the domestic market.

This trend had started with Zodiac and Monte Carlo brands some decades ago, but the market size for branded wear has now grown rapidly along with extreme competition. Many of them have purchased international brands to penetrate the First World market and also supply to the domestic market under foreign brand names. For example, in the home textile market, Welspun has purchased Christy, GHCL has purchased Dan River and Roseby’s and Creative acquired Protico brands to facilitate their entry into U.S. and EU markets. Thus, the earlier difference between domestic manufacturer and exporter is slowly whittling away. The successful textile player has to constantly look at opportunities both in the domestic and export markets.

Role of big retails buyers

More than any other factor, the entry of the bit retailers such as Reliance, Bharti-Walmart, Aditya Birla Group. Tata-Trent will have a significant impact on the future direction of the textile and clothing industry. Through organized retailers’ penetration is only 3 percent.

As clothing forms an important aspect of organized retail, sale through organized retail chain stores can go up to 15-20 percent of total sales in coming years. This will still be much less than in the U.S., where the 24 biggest retailers account for 98 percent of apparel sales. The position in the EU is similar. International experience suggest that the high-volume retail chains, because of their large distribution networks and considerable buying power can influence prices and dictate quality terms.

The retail phenomenon has two other features as well. First is ‘lean retailing’ which allows retailers to maintain a lean inventory but will coerce supplies for ‘rapid replenishment’ of goods. Second is the concept of ‘full packaging’ in that the retailer will not buy fabric from different sources and get it converted into apparels again from different sources, but will prefer a ‘full package’ solution from a limited member of sources.

Thus, the increasing presence of major retailers will lead to even greater formal and informal vertical integration and horizontal consolidation in the sector, while enhancing quality trends.

The pressure on margins will serve to reduce inefficiencies in the system by way of further modernization, consolidation and integration. The best outcome, however, will be increased demand and faster growth.

Any major downturn in the Indian economy and, to a lesser extent, a downturn in the global economy can hit consumer spending including clothing purchases. To that extent they can affect the growth and progress of this sector.

The conclusion of free-trade agreements especially with Asian countries (which are otherwise India’s strong competitors in this field, through not the high technology areas), can have a deleterious effect on the domestic industry if the Rules of Origin clause it not fully and strongly adhered to.

China factor

The china factor will always be present, especially after 2008 when quantities restrictions on China are removed from the major U.S. and EU markets. The impact will be felt by all textiles and clothing producing countries including India. Indeed a foretaste of China’s impact was seen in 2005, the first year of quota removal, when China’s exports surged by almost 60 percent in all major areas. In effect, India has been provided a window of opportunity till 2008 to modernize and consolidate its textile sector. Thus, it is seen that despite the recent advances in this sector, India has still a long way to go. The industry is still fragmented and requires significant modernization and consolidation. Hence heavy investment in this sector must be continued for several years, building further on the recent positive trends.

The industry will also have to introduce greater fashion and design elements so as to have a much higher per unit value realization. On the government’s part, all forward looking schemes including the TUFS require to be continued for five more years, so that the industry becomes stronger to face the global competition. The Scheme for Integrated Textile Parks of the Government is also expected to go a long way in providing for informal consolidation and integration in the sector.

Only coordinated efforts by all—government, industry and individual units—can make India achieve its apparently high targets of 2012. The next five years are period of reckoning when the future directions of the Indian textile and clothing sector will be set.

Post-Quota growth drivers

The textile industry is the second largest employer in the country next to agriculture. With global trade getting liberalised India’s textile industry has to face stiff competition not only in the export market form China, Pakistan, Bangladesh, Sri Lanka and others but also in the domestic market due to free flow of foreign goods.

The textile industry consists of both organized (spinning and weaving) and unorganised (processing, knitting and garmenting) sectors. Growth rate and capacity utilization of the industry for 2004-05 and 2005-06 are given in the Table I.
|I: Textile industry’s growth |
|Industry |Growth rate |Capacity |utilization |
| |2005-06 |2005-06 |2005-06 |2005-06 |
| | | | |(per cent) |
|Cotton textiles |7.4 |8.5 |91.4 |97.4 |
|Wool, silk and man-made fibre textile |3.6 |0.0 |89.2 |90.8 |
|Jute and other vegetable fibre textiles |3.7 |0.5 |83.6 |83.5 |
|Textile products |19.2 |16.3 |81.5 |92.7 |
|All industries |8.4 |8.1 |82.2 |82.7 |

It can be observed that the growth rate of products from textile industry is more than double that of all industries’ average growth rate in the two years and that capacity utilization of cotton textiles was estimated at 97.4 percent (highest) and textile products industry 92.7 percent (second highest) in 2005-06 and was well above the all industries’ figure of 82.7 percent

Clothing industry

Abolition of trade quotas in January 2005 coupled with increased buoyancy in the domestic market has infused a new lease of life to the Indian textile industry and also opened up enormous opportunities to expand. The market size has increased to $ 46 billion in 2005-06 with 37 percent imports ($ 2.69 billion). Growth in exports of textiles and textile products accelerated from 6.0 percent in 2004-05 to 18.3 percent in 2005-06 benefiting from access to the markets of erstwhile quota countries (the U.S. EU and Canada)
|II: Market size and per capital purchase of all textiles |
|Year |Market size |Per capita |purchase |
| |(Million metres) |Value |Metres |Value (Rs.) |
| | |(Rs. Million) | | |
|2000 |17,969 |1034282 |17.84 |1,026.89 |
|2001 |19,154 |1122445 |18.65 |1,092.92 |
|2002 |19,860 |1202601 |19.00 |1,211.33 |
|2003 |20,957 |1337932 |20.14 |1,237.28 |
|Percent increase |21.23 |29.35 |12.89 |20.49 |

Exports to quota countries increased sharply by 31.76 percent but shipments to non-quota countries were almost unchanged in 2005-06 (marginal decline of 0.1 percent). EU and the U.S. remained the major export markets, together accounting for 62 percent of India’s total textile exports in 2005-06.

Within textiles and textile products, exports of man-made fabrics, yarn and made-ups declined by 2.2 percent mainly due to the sharp decline in exports to non-quota countries. Readymade garments, the major component of textile exports, benefited from strong demand in the major markets such as the U.S. and Europe. Textiles and apparel exports to the U.S. increased by 27.1 percent in 2005 (13.1 percent in 2004) and India are one of the fastest growing exporters to the U.S.

Revamp vital

The whole value chain of the textile industry needs modernization technology up-gradation, expansion in order to produce cost effective products to meet the stiff competition. The country has a strong multi-fibre raw material base, plenty of labour but is faced with limited / non-availability of finance for modernization / expansion of production capacities. Foreseeing the great opportunities and the inherent strength of the industry, the Government had launched various schemes (TMC – Technology Mission on Cotton; TUFS—Technology Up-gradation Fund Scheme; SITP—Scheme for Integrated Textile Parks) to help it equip itself to face the competition.

Value addition

A simple textile value chain consists of fibre, grey yarn, grey fabric, processed fabric, and final product. The garmenting sector converts the processed fabric into final product. The value added by this sector to the final product depends on the end-product. The varying percentage of value addition in garmenting is shown below.

Value added by converting—

• Processed cotton knitwear fabric made of 30s cotton grey combed yarn into garments is 290 percent;

• Processed cotton bottom weight fabric made of 20s carded yarn into trousers is 212 percent;

• Processed cotton shirting fabric made of 2/60s singed, mercerized, dyed yarn into garments is 102 percent;

• Processed cotton shirting fabric made of 60s combed yarn into shirts is 78 percent; and

• Processed cotton sheeting fabric made of 40s combed yarn into made-ups is 45 percent.

Survey findings
The National Household survey on the market for textiles and clothing conducted by the Textiles Committee reported that the size of the domestic market of all textiles increased to 21.784 million meters in 2004 from 17,969 million meters in 2000 registering an increase of about 21 percent (Table II). In value terms, the increase of about 29 percent over these years. The per capita purchase of all textiles was 20.14, an increase of 13 percent over 2000.
|III. Major category-wise exports of textiles & clothing produces |
|Category |2004-05 |2005-06 |Growth |
| |(in Rs. Crore) | |(%) |
|Cotton yarn, fabrics & made-ups|15501.85 |17101.98 |10.32 |
|Manmade yarn, fabrics & |8818.82 |8497.59 |(–) 3.64 |
|made-ups | | | |
|Woolen Yarn, fabrics & made-ups|313.56 |371.20 |18.38 |
|Cotton garments including |22663.09 |28104.45 |24.01 |
|accessories | | | |
|Man-Made fibre garments |1560.50 |1727.06 |10.67 |
|Other textile materials |1084.76 |1837.57 |+ 69.40 |

Export performances
On the export front also, there is huge potential due to the scaling down of production and outsourcing practices adopted by developed countries but India has to face stiff competition from cost effective producers such as China, Pakistan, Bangladesh and Sri Lanka. Also it has to over come the different kinds of trade barriers generated by the formation of trade blocs and the large number of agreements between trade blocs and preferential trade agreements (PTAs). India too is entering into a number of trade agreements.
The recent one progress is the trade agreement with European Union consisting of 25 countries.
While exports of all commodities increased by 125 percent between 2000-01 and 2005-06, exports of textiles & clothing rose by 32 percent over the same period.
Global exports of textiles and clothing were $ 452.80 billion in 2004, registering a growth of 27 percent from

Bonanza from textile boom
TEXTILE MACHINERY is one of the largest capital good segments in India. Over the last five and half decades, the industry has built Rs.3,050 crore worth of complete machinery and other equipment in the whole range from opening up of fibres to production of finished fabrics. It is well supported by small and medium enterprises for critical components, pats and accessories, monitoring and testing equipment, and auxiliaries. A number of firms have attained global standards in terms of product design, capability and processed technology.

There are over 250 units producing complete textile machinery and about 500 units producing parts and accessories.

Profile of the industry
The accompanying graphs give trends in production, capacity utilization, demand, exports and imports of textile machinery, parts and accessories during the last six years.

Production of textile machinery in 2004-05 was Rs.1,648.81 crore during 2004-05 and rose sharply by 28 percent to Rs.2,148.60 crore (estimated).

Annual exports of textile machinery and components have reached Rs.500 crore.
The industry exports over 25 percent of its annual production to more than 50 countries, including advanced economies. About 55 percent of the exports are from the spares and accessories sector.

End of recessionary phase
In the past, the industry had largely depended on foreign technical/technical-cum-financial collaborations and indigenous development was not taken up seriously. This was due to the encouragement given by the Government and the easy access to such collaborations. Second, certain policies of the Government had restricted machinery manufacturers, especially in the weaving sector, to bring in sophisticated machines resulting in low demand and high cost of such machines.

With the opening up of the economy and trade since 1991-92, the industry was harmstrung due to the reluctance of foreign manufacturers to provide technology, Foreign partners preferred to establish their own manufacturing bases in India for components and parts of captive use and deliver the machines to third countries. At the same time, large imports of new and second-hand textile machinery were taking place encouraged by duty concessions given by th Government. As a result, Indian textile engineering units were in a distinctly disadvantageous situation to find customers for their products. The industry stagnated until 3003-04 due to acute demand recession.

Pick-up in textiles
The process of the textile engineering industry is closely linked with the growth of the domestic textile industry.

The textile industry has embarked on a long-tern modernization and expansion plan with huge investments to compete with foreign players in India and abroad.

The momentum for such huge investments has been triggered by the dismantling of the quota regime from January 2005.

The textile industry has been backed by the following schemes provided by the Government:

A technology Upgradation Fund Scheme (TUFS) introduced in 1999 with five percent interest rebate. The scheme is to cease in 2007;

20 percent Credit Linked Capital Subsidy Scheme under the TUFS for the weaving industry;

10 percent Credit Linked Capital Subsidy Scheme for the processing industry together with five percent interest rebate under TUFS;

Cluster developments at important textile centres and creation of Textile Parks; and

The various Apparel Parks created for the textile industry.

These schemes have specific emphasis for units in the medium and small-scale industries. A number of units in the textile industry have taken advantage of the above schemes.

In addition, the Government has streamlined the industrial and fiscal policies to encourage the industry to meet the global challenges effectively. With these support measures, the textile industry has steppd up investments for modernising and upgrading plant and machinery.

It is essential that the textile engineering industry is assured of substantial and sustained demand from the textile industry to enable it to turnout sophisticated and latest generation machines. Frequent interactions between the users and the manufacturing industries should take place to understand and mitigate each other’s problems.

Customer expectation
The industry is aware of the customer’s expectations while deciding to procure their requirements with the following parameters: Technology and brand, productivity, price of machines, customer recommended components availability, service aspects, export benefit, power savings and labour reduction. While the first two parameters play a vial role in the decision-making by the customer, the other parameters will influence the demand.

Research & Development
A number of large manufacturers have their in-house research and development facilities and continuous developments take place.

The industry had established a research and development centre at the Indian Institute of Technology, Powai, Mumbai, coupled with an academic course in post-graduation in textile engineering, Substantial investments have been made to encourage advancements in technology in a full-fledged post-graduation course in textile engineering, machinery manufacturers are encouraged to take advantage of the facilities available at IIT-B. The various projects developed by the post-graduate/dual degree students during their training require quick exploitation by the engineering sector.

“Technology and Brand” being the prime parameter, the industry should upgrade its technology in keeping with the advancements in developed countries either through acquisition of new foreign technology or development of indigenous technology.

Expansion of capacity, wherever required, should be taken up expeditiously to discourage unnecessary imports, especially of used items of textile machines.

The industry should have a close interaction with the components manufacturing sector for the development and sophistication of textile machines.

It necessary, such units can from a cluster or units capable of procuring foreign technology should acquire the same and assist the original equipment manufacturers (OEMs). Measues have to be initiated to bring about cost reduction, efficiency, quality improvement in skill, upgradation and improved infrastructure facilities to enable the machinery industry meet the surge in demand from the domestic textile industry.

Export initiative

The industry had been exporting its products to a number of countries over the last 35 years. The products have been well received by developing as well as developed countries. The industry should ensure quick and effective after-sales service. The Government should provide matching credits on softer terms to select thrust countries to enable Indian exporters compete in the global market.

The industry is capable and is endeavoring to produce new generation machines in quality, quantum and performance to meet the rising demand from the textile industry. It has sufficient production capacity a present. However, some machinery manufacturers have taken up technology up-gradation and expansion programmes.

With the implementation of the above measures, it is hoped that the industry will rise to the occasion and meet the huge modernization and expansion plans of the Indian textile industry fully.

The textile industry is one of the oldest industries in India. It has played an important role in generating foreign exchange reserves and creating employment opportunities. The industry is very vast with over 30,000 readymade garments manufacturing units and employs nearly three million people (Indian Apparel Portal: 1998). It has been estimated that the size of industry is Rs. 78000 crore.

The concept of readymade garments (apparels) is relatively new for the Indians. Traditionally, Indians preferred dresses stitched by local tailors, who had tailoring units in townships or cities and catered exclusively to local demand. The growing fashion consciousness during the 1980s and the convenience offered by ready-to-wear garments were largely responsible for the development of the branded apparel industry in India. Other factors which contributed to its growth were: ✓ Greater purchasing power in the hands of the youth,

✓ Access to fashion trends outside the country, and ✓ The superior quality of fabrics.

KSA Technopak study shows that 48 percent of the population of India is in the age group of 15-44 years, and this group is already into ready-to-wear apparel. There is rapid growth in 15-44 years age group and this group has both the willingness and the ability to pay.

Moreover, the spending on clothing and footwear is quite high in India, when compared to the developed countries. It is estimated that Indians spend 9% of their disposable income on clothing and footwear, which is significantly higher than the US (5%). Moreover, the expenditure on clothing is higher in the higher income levels.

A study conducted by National Council for Applied Economic Research (NCAER) in the late 1990s revealed that there has been a gradual increase in the purchasing power of the people. According to the report, the population in the income range of Rs 45,000 -Rs 2,15,000 per annum was increasing at a fast pace. In 1997-98, there were 33 million households in this income group and this number is expected to increase to 75 million by 2006-07.

Indian garments export business has made great strides in the past few years and today many of the leading fashion labels, from all over the world, are known to source their products from India. This speaks volume of India as a major supplier of top quality fashion garments.

CHAPTER–2
PROFILE & ORGANIZATION STRUCTURE OF THE COMPANY

2.1 PROFILE & ORGANIZATION STRUCTURE OF THE COMPANY

TOMMY HILFIGER – HISTORY

[pic]

Tommy Hilfiger was born in 1952 and grew up in Elmira, New York. Tommy Hilfiger started as a fashion designer by driving to NYC, purchasing jeans, and selling them where they were not available in the rural area of Elmira, NY. Eventually he made enough money to open his own clothing stores throughout upstate New York.

In time, he found himself considered one of the "4 Great American Designers for Men" from a very successful ad campaign. (Ralph Lauren, Calvin Klein, Perry Ellis, and Tommy Hilfiger)

His clothing was getting very popular and was surprisingly being worn by many different people of all ages & races. Tommy Hilfiger responded to the diversity of his customers by adding more variety to his clothing line. Tommy Hilfiger has succeeded in making clothing that many people enjoy wearing. His fragrances have been a huge success as well. The clothing line has expanded by including home products, eyewear, footwear, swimwear, jewelry, and divisions such as Tommy Hilfiger Athletics. Tommy Hilfiger is a true American Designer.

Tommy Hilfiger's clothing company, TOM Inc., has been amongst the leading exponents in this intensified process of mass customization over the last few years. Indeed Hilfiger clothing can be seen as an extreme case of how the idea of mass designer fashion operates. Mass designer fashion is a specific formation within the industry; it is not equivalent to traditional haute couture (which is often dependent upon highly artisanal means of production and which is still somewhat outside the circuits of globalizing capital that nurture the mass clothing industry); nor is mass designer fashion equivalent to standard garment production (which relies on reordering of staple and relatively stable goods season after season). Mass designer fashion is that peculiar formation which occurs within this nexus of the globalizing economy and the concomitant expansion of the means of consumption.

Almost by definition it demands the capture of ever wider segments of the mass market at the same time as it needs to maintain familiar standards of product differentiation between brands, and offer frequent variation. Thus Hilfiger's relative importance and visibility in this context is in part a result of an ongoing strategy which has put his company in a position to cover just about all segments of the clothing market, but which also marks the products as identifiable and unique (the familiar Hilfiger logo and red-white-and-blue designs), offering appreciably variable "looks" or themes from season to season and year to year.

TOMMY HILFIGER IN INDIA
Hilfiger was in India to unveil the first set of stores in New Delhi, Mumbai and Bangalore, and renew his ties with the country which date back to 1978. Tommy Hilfiger was brought to India through a joint venture between the Murjani Group and the Lalbhai Group, which owns the 'Arvind' brand. Called Arvind Murjani Brands Private Limited, the joint venture had entered into a licensing agreement for marketing and distribution of Tommy Hilfiger apparel in India.

AMB introduced the Tommy Hilfiger men's sportswear, men's jeanswear and juniors' jeanswear collections in freestanding specialty stores across country in spring 2004. Tommy Hilfiger Inc., through its subsidiaries, designs, sources and markets men's and women's sportswear, jeanswear and childrenswear under the Tommy Hilfiger trademarks. Its products can be found in leading department and specialty stores throughout the United States, Canada, Europe, Mexico, Central and South America, Japan, Hong Kong, Australia, and other countries in the Far East.

HILFIGER - RIVALS
While older companies like Levi-Strauss, Timberland or even Ralph Lauren have been slow in entering the mass designer fashion stakes--some being particularly wary of attempting to enter ethnically or racially identified areas of consumer culture—and while many other companies have been content with their long established market niches and hierarchies of market segmentation, the story of Hilfiger's company is just the opposite.

Beginning with a line of preppy looking, clean-cut and conservative sportswear--similar to that offered by The GAP, but somewhat more expensive--Hilfiger set out in the early 1990s to compete against department store staple lines like Ralph Lauren and Liz Claiborne with essentially Young Republican clothing. In the course of only a few years this basically khaki, crew and button-down WASP style, while remaining a constant theme in Hilfiger collections, has been submitted to variations which were intended to bring the product closer to Hip-Hop style—bolder colors, bigger and baggier styles, more hoods and cords, and more prominence for logos and the Hilfiger name. These variations on a house-in-the-Hamptons theme opened up the doorway to African- American consumers, and Hilfiger's status is often closely linked to his popularity among African-Americans.

But at the same time, that market has clearly been only one focus for Hilfiger's ambitions, set on maintaining and expanding markets among non- black consumers, and continually multiplying the range of products offered. In addition to hip-hop styles Hilfiger now sells golf wear, casual sportswear, jeans, sleepwear, underwear, spectacles, fragrances, and even telephone beepers. Tommy has recently moved into women wear, and offers a women's cologne to go with the popular men's line. Not content with crossing all these areas of the mass market, Hilfiger seems currently to be conducting a foray into more classic designer markets with high-fashion shows marked by his appearance at the British fashion shows in 1996 and by the introduction of a line of brightly colored menswear that was clearly his attempt to become more of a haute-couture designer.

Hilfiger's success has been quite astounding since the initial public offering of TOM in 1992. The company now has over 850 in store department store sales points in the US. In addition there are now almost 50 Hilfiger speciality stores across the country--a figure that has almost doubled in the course of two years. The company's annual report in early 1996 showed that revenue in the last quarter of 1995 was over $130 million, a 47% increase over the previous year. The company's cost for goods sold was less than $72 million, leaving more than $58 million in gross profits--a rate of gross profits of more than 80%. The sound financial health of the company ensures its regular appearance on stockbrokers' to-buy lists, even though share prices keep rising. Early in 1995 the small consortium of TOM's original investors-- which had bought the company from Mohan Murjani in the late 1980s--sold their remaining TOM stock for over $50 million, after a year in which the value of the stock had increased by 106%. Hilfiger himself was one of this small group, of course, and after his profit- taking he remained as an employee of the company drawing more than $6 million a year in salary.

The economic success of TOM is explicable largely because the company has led the way in many of the aspects of mass customization. Even though Hilfiger still does not have (so far as I'm aware) a Web site, or other of the mechanisms that apparel companies now routinely use, TOM's corporate strategies have been ahead of those of many of its competitors, and have always stressed the acceleration of product delivery, new forms of retailing partnership, innovative EDI usage for inventories and customer tracking--and of course, the speedy and timely introduction of new lines and redesigned goods, assuring consumers a wide range of product choices (something which Hilfiger himself sees as crucial in provoking and expanding demand).

TOM has been especially willing--again, leading the field—to engage in what is now a standard industry practice of licensing.

TOM has licensing agreements with some of the world's major clothing companies. This network of links has been methodically and aggressively built up in just the last few years: Pepe plc for jeans, Stride Rite for shoes, Liberty Optical for eyewear, Estee Lauder for fragrance, Russell Newman for shirts, Jockey for underwear, and so on. While licensing agreements probably have little impact on consumer consciousness, one advantage they have for a company like TOM is that they offer the borrowed cachet of known and respected manufacturers. This is all important in negotiating sales points with department stores and generally in testifying to the quality of TOM products. Most of TOM's retailing partnerships are with department stores, and in 1995 about 70% of Hilfiger's products were sold at those venues. Added to TOM's strategies for speeding up product design, delivery, and turnover, licensing helps ensure access to what is still the principal channel for clothing sales in the US where 65% of all clothing is sold by only 35 companies, the majority of which are chain retailers with department stores in malls and urban spaces all across the country.

Tommy Hilfiger aims at 40 outlets in India by 2009
New Delhi, Oct 12 (IANS) Riding on a burgeoning middle class with deep pockets, international fashion brand Tommy Hilfiger aims to ramp up its outlets in India to 40 by next year - up from the 30 it has opened in the four years since it launched in the country.”We are at a phase where we understand Indian consumers and their needs. We have our presence in so many Indian cities and we don’t think that our competitors will manage to expand their business in a short period of time to reach our levels,” Tommy Hilfiger Apparel India CEO Shailesh Chaturvedi told IANS.

Today the brand has a presence in 12 major cities - Ahmedabad, Bangalore, Chandigarh, Chennai, Delhi, Gurgaon, Hyderabad, Jalandhar, Kolkata, Lucknow, Mumbai and Pune - with 14 stand-alone stores and 16 shop-in-shop stores.

Tommy Helfiger has been rated as the No.1 brand by Women’s Wear Daily in its WWD100 survey of the most recognised brands in the US. In September, in an exclusive deal, the brand’s complete collection of men’s and women’s wear and accessories were rolled out in 550 Macy’s outlets in the US. In November, the company plans to open a huge 20,000 sq ft flagship store on the prestigious Fifth Avenue in Manhattan spread over four floors.

The brand launched in India in April 2004 through Arvind Murjani Brands Pvt Ltd, a 50:50 joint venture between the Murjani group, a 77-year-old global group with a proven track record in international and Indian markets and the Ahmedabad-based Arvind Mills.

According to Chaturvedi, the brand has already crossed its target of Rs.1 billion ($21 million) in sales per year.

“We do our homework before launching a store. We know where our market lies. Meticulous planning and a scientific approach is the reason for our 100 percent growth,” he maintained.

Towards this end, the brand chose the swish Khan Market in central Delhi to launch its 30th store in a shopping complex rather than in a mall, which otherwise is the preferred destination of most international and domestic upmarket brands.

“Khan Market with its premium and cool outlook is at a very exciting stage of growth - buzzing with niche boutiques, eateries and lifestyle stores. With the launch of this store, consumers will have access to an international range of apparel and accessories,” Chaturvedi said.

“Khan Market caters to a number of foreigners and diplomats, who will be our target consumers,” he added.
As for the label’s expansion plans Chaturvedi said second outlets would be opened in cities like Ahmedabad, Bangalore and Pune, as also in some of the other cities where it already has a presence. An outlet is also planned in India’s diamond capital of Surat.

All Tommy Hilfiger stores showcase the best of international trends that are very youthful, stylish and energetic.

“Fashion trends are converging everywhere and thanks to the media, people know what is in and what is out. Our design team in the US develops the line based on international trends. We have a team that focuses mainly on style trends and forecasts,” Chaturvedi explained.

“We source all our products from the US but keep the Indian fit and size in mind. Our colour palette, trends, pricing and quality remain the same worldwide.

“What we offer is an international collection at an international price,” Chaturvedi said.

Thus, the apparel range starts at Rs.2,000 for a shirt to Rs.40,000 for a jacket. The accessories start at Rs.2,500 and go up to Rs.7,500.

“If you are looking for good quality, you tend to get used to a brand. Our loyal customers will always come back to us,” Chaturvedi maintained.

2.2 PROBLEMS ORGANIZATION OF THE COMPANY
The foundations of the Indian textile trade with other countries began as early as the second century BC. The silk fabric was a popular item of Indian exports to Indonesia around the 13th century, where these were used as barter for spices. Towards the end of the 17th century, the British East India Company had begun exports of Indian silks and various other cotton fabrics to other countries. These included the famous fine Muslin cloth of Bengal, Bihar and Orissa. The trade in painted and printed cottons or chintz, a favorite in the European market at that time, was extensively practiced between India, China, Java and the Phillipines, long before the arrival of the Europeans.

Together with allied agricultural sector, it provides employment to over 82 million people by the end of the tenth plan period. The contribution of this industry to the gross export earnings is over 23 percent while it adds only three percent to the gross import bill of the country. It has been estimated that India has approximately 30,000 readymade garment manufacturing units in the country. It is the only industry which is self-reliant, from raw material to the highest value added products viz. garments/ made-ups. Cotton accounts for more than 73 percent of the total fibre consumption in the spinning mills and more than 58 percent of the total fibre consumption in the textile sector. The Indian textile industry contributes substantially to India’s export earnings. The 1996 Indian textile exports approximately amounted to Rs.35,000 crores of which apparel occupied over Rs14,000 crores. At present, the exports of textiles account for about 24.46 percent of total exports from India and are the largest net foreign exchange earner for the country as the import content in textile goods is very little as compared to other major export products.

The clothing sector is both a labor-intensive, low wage industry and a dynamic, innovative sector, depending on which market segments one focuses upon. In the high-quality fashion market, the industry is characterized by modern technology, relatively well-paid workers and designers and a high degree of flexibility. The competitive advantage of firms in this market segment is related to the ability to produce designs that capture tastes and preferences, and even better – influence such tastes and preferences – in addition to cost effectiveness. Another major market segment is mass production of lower-quality and/or standard products such as t- shirts, uniforms, white underwear etc. Manufacturers for this market segment are largely found in developing countries, often in export processing zones and/or under outward processing agreements with major importers.6 they employ mainly female workers – semi-skilled and unskilled – and outsourcing to household production is quite common in the low end of the market. In the low to middle priced market, the role of the retailer has become increasingly prominent in the organization of the supply chain. The retail market has become more concentrated, leaving more market power to multinational retailers.

Globalization has put forth India’s business community in the international market. Various foreign trade policies and investment policies have been framed to facilitate foreign trade and increase the profitability of the Indian garment manufacturers. The advent of liberal trade policies in textile and garments sector have made it possible of usage of modern technologies and international methods of manufacturing clothes. This sector of garments is one of the most successful and important in terms of foreign exchange generation and employment generating field. It provides employment to lakhs of people and is the most sort out and booming industry of India.

It is essential that the textile engineering industry is assured of substantial and sustained demand from the textile industry to enable it to turnout sophisticated and latest generation machines. Frequent interactions between the users and the manufacturing industries should take place to understand and mitigate each other’s problems.

2.3 COMPETITIOR’S INFORMATION
PROFILES OF COMPETITORS

Duke
Duke, reportedly rated by ORG-MARG as the top T-shirt maker in the country, prices its T-shirts in the Rs 199-699 range. It also makes trousers, shirts, jackets, sweaters and will begin making thermal underwear this year. T-shirts account for 60-65 per cent of the company's total revenues. Domestic sales account for 80 per cent. Its overseas buyers include Gap, Wal-Mart and Target.

Today, Duke embraces a complete vertically integrated garment manufacturing plant, with knitting, dyeing, processing, finishing, mercerising, compacting, embroidery and printing under one roof. Production facilities are located in India and Nepal.

Duke Fashion (India) Ltd pioneered the T-shirt culture, and gradually established several new trends in knitted garments and fabric research. In 1998, thermalwear was introduced for the first time in India, under the brand name of Neva. Two other group constituents,Venus Garments (India) Limited and Deekay Export are also there. The group also consists of Duke Fabrics and Glaze Garments.

Duke is acknowledged today as the undisputed leader, with a turnover of Rs 1,250 million. Over 5,00,000 garment units are produced every month by over 2000

Benetton
When Benetton was started in 1989 in India, all they found themselves selling were jeans and T-shirts. With television serials like ‘Friends’ and ‘Ally Mcbeal’ making waves on the small screen, people began to feel that it is okay to be wearing trousers and jackets, evening clothes and party wear. Benetton now sells 1,500 styles as compared to the 400 they started shop with. The €1.7 billion Italian fashion company had entered India through a joint venture with DCM but now Benetton India is a wholly owned subsidiary after they broke up about a year back.

Levis
Levi's is a future brand in the Indian context. Levis has excellent brand architecture in place, and it is performing well. The market for denim, specially at the premium end, is growing between 15 and 20 per cent annually. (The overall domestic denim market in the top six metros is estimated at 12 million pieces annually. The mass-priced segment of Rs 300-500 accounts for six million pieces. The mid-priced market — up to Rs 1,000 — chips in with three million pieces, while the premium end of above Rs 1,000 accounts for another three million, which include 0.4 million over the price point of Rs 1,400.)

The four sub-brands are pretty well straddled. We have 30 per cent of the premium denim market in the country, and about 10 per cent of the overall market across price segments.

REEBOK
Reebok is the brand for sportswear — shoes, T-shirts etc — while Rockport is for a premium range of footwear and apparel marked by 3 Rs — rugged, refined and relaxed, explained Mr Manish Dawar, Country Manager, Rockport.

Entering India in 1995, Reebok has captured a market share of 50 per cent followed by Nike. As a marketing tactic, the MNC promotes fitness through aerobics. The girls are trained for six months by an expert from the USA.

TOMMY HILFIGER SUBSIDIARIES ← Hilfiger Stores BV ← Hilfiger Stores GmbH ← Hilfiger Stores Ltd ← Hilfiger Stores SAS ← Hilfiger Stores SL ← New Bauhinia Limited ← T.H. International N.V. ← TH Belgium NV ← TH Danmark AS ← TH Deutschland GmbH ← TH France SAS ← TH Italia SRL ← TH Retail, LLC ← TH UK Ltd ← THHK Childrenswear Limited ← THHK Jeanswear Limited ← THHK Junior Sportswear Limited ← THHK Menswear Limited ← THHK Womenswear Limited ← Tomcan Investments Inc. ← Tommy Hilfiger (Eastern Hemisphere) Limited ← Tommy Hilfiger (HK) Limited ← Tommy Hilfiger (India) Limited ← Tommy Hilfiger 485 Fifth, Inc. ← Tommy Hilfiger Canada Inc. ← Tommy Hilfiger Canada Retail Inc. ← Tommy Hilfiger Canada Sales Inc. ← Tommy Hilfiger E-Services, Inc. ← Tommy Hilfiger Europe B.V. ← Tommy Hilfiger Hungary Ltd. ← Tommy Hilfiger Licensing, Inc. ← Tommy Hilfiger Retail (UK) Company ← Tommy Hilfiger Retail, LLC ← Tommy Hilfiger U.S.A., Inc. ← Tommy Hilfiger Wholesale, Inc. ← Tommy.com, Inc.
2.4 SWOT ANALYSIS OF ORGANIZATION
STRENGTHS
Strong Cotton Base – India has a very strong cotton base. The country has one of the largest areas under cotton cultivation in the world today placed at over 7.5 million hectares and this area is expanding. Cotton also accounts for 75% of the textile fabric consumption in this country and cotton garments already account for about 65 percent of our total trade in garment assortments. The world demand for cotton fabrics and clothing is expected to be fairly stable.

Abundant and Low cost manpower resources – Indian labour is plentiful and its is also reported to be one of the cheaper in the world today. This fact need no reiteration.
A large and Diversified Textiles Industry :- Indian is perhaps the openly nation in the world where all the three textile sectors namely handloom, power loom and the mill industry co-exists. The fact does provide the country some advantage in producing a wider variety of designs and colour combinations in its textiles to satisfy the more discerning foreign buyers.

Creativity of Indian craftsmen / weavers and entrepreneurs – the creativity of India weaves particularity in the handloom and decentralized powerloom sectors has obtained the admiration of detailed specifications. Many of the larger departmental stores abroad are know to have got some of their garment fabrication done in India although they may ultimately give their own labels to the clothing so manufactured.

Ability to Cater to Small Orders. This aspect of the Indian garment sector has already been mentioned earlier. It refers to the flexible structure of this industry which enables it to secure smaller order from overseas importers for varied assortments and designs – a preposition which many of the large scale units find totally unviable.

Liberalized policies of the Government of India:- Having realized the case export potential of this sector the government has liberalized the imports of wide range of modern garment manufacturing machinery including high-speed machines. Similarly imports of essential items like zip fasteners trimmings and embellishments have also be liberalized. Import duties on several of these item have also been substantially reduced. Such measure should help to develop the production bases of this industry, a process which has already started.

WEAKNESS
The industry suffer from certain inherent weaknesses which has been responsible for its apparent inability to capitalize on may of its advantage. These are as following:
Decentralized Structure of Industry – The industry is highly decentralized. At the top of the exporting chain is the merchant-exporter who canvasses for and finally executes the import orders. The production operations however are carried out by independent & individual fabricating units who are sometimes assisted by button-holing in its and other small processing units. Although this factor gives the industry some degree of operational flexibility. It can cause hardships if the merchant-exporter has not control or little control over the fabricators leading to delayed shipments and needless trade disputes.

Old & outdated machinery – Compared to most of the other exporting nations of the world. The Indian garment sector is equipped with obsolete machinery – in many cases with simple pedal operated machines with hardly any productivity. This problem is only now being addressed with a liberalized import policy.

Shortage of trained manpower – Although labour in India is plentiful the garment sector has been experiencing a shortage of skilled labour force – like expert cutters, machine-operator, designers and so on in the different manufacturing centres. The is also a problem of migrant labour force which have no stakes in the industry particularly in a place like Delhi which a has often posed a problem to entrepreneurs.
Restricted fabric base – While acknowledging the fact that Indian has vast and variegated textile industry it has been recognized that the production of specialized and heavier varieties of fabrics like drills twills, gabardines corduroys velvets and denims etc is generally of very poor quality of grossly inadequate for the requirements of the Indian garment sector. This has preclude the garment sector from producing heavier garments for winter wear or the finer varieties for sport wear and so so.

Restricted export ranges – the limitations experienced by the Indian garment sector in regard to fabrics has had its impact in the export sector also. Currently india’s apparel exports are more or less confined to light weight cotton garments made form the powerloom sector mainly for summer wear. These items are also used as causual wear. There is huge international demand for standard garments like formal wear shirts & trousers besides children’s garments made out of polyester / cotton blends besides children/’s garments made out of polyesters cotton blends besides clothing and industrials clothing in which India has currently little or no representation.

From analysis of India’s strengths and weakness in the garment industry it emerges that on the balance the strengths in the industry are more pronounced. Also many of the weakness mentioned are now being suitably addressed by the Government of Indian. For instance the establishment of the institute of Fashion Technology by the Ministry of Textiles should overcome the problem of obtaining skilled technicians and designers for the industry. The industry on its part has also result in the induction of modern and update machines into this sector which will improve its productivity. The industry is also going in for marketing tie-ups with some of the reputed international brand leaders of specific varieties of garments like jeans and sportswear which augurs well for quality and variety of garment to be manufactured in the country in the future.

OPPORTUNITIES
With each product category opportunities exist because products in which Indian exports have minimal share have been showing a substantial growth rate. India needs to expend its potential in these markets. Indian also has to sustain its product categories where to demand for imports as are showing a declining trend. Opportunities also exist in product diversification into new products categories of formal knitwear which fashion forecasts predict as a booming industry all over the world. Indian exporters should improve their manufacturing system quality speed and efficiency in order to effectively enter markets which will yield great value realization and more value added profit margins.

India’s exports readymade garment’s mill it badly most of the would wants to import trade sanction against the country for conducting there nuclear sanction have come at a time when India’s garments exports hence started picking of the period of stagnation which determined at for India’s garment export back.

THREAT
There is little evident that the average Indian garment exports has full grasped the full implication of the phasing out of the quota regime for textiles and garments in the foreseeable future under the historic Uruguay Round Accord signed in December 1994 when the protected market access provide by the cocoon of quotas disappear completely in the not too distant future there will be vitally a free for all situation and only those countries with established market reputations for quality diversified range and prompt delivers will be able to survive the acid test of competitions. Indian exporters have to refurbish their image in the interim period of evolve from being branded as supplier of low budget item who often lag behind in adhering to delivery schedules to high profile suppliers of quality garments.

Another factor of considerable significance is the emergence of new garment supplier to wood markets, which included countries like China Thailand. Sri Lanka, Bangladesh and Pakistan etc some of these nations have not only a viable cotton base but also have low cost labour, which could pose a greater threat to Indian interest as compared to the earlier competitors like Hong Kong and Korea who were supplying a different assortment of item. India is threatened by fresh compotes from is US and EU other of which have resoled to souring fabric supplies frame nearby countries and covering them into readymade garments.

CHAPTER–3
OBJECTIVES OF THE STUDY
3.1 OBJECTIVES OF THE STUDY

3.2 OBJECTIVE ➢ To review the present statues the Tommy Hilgiger & Analyze its contribution to the economy.

➢ To critically evaluate the export performance of Indian garments over the years and its share in the global trade in clothing.

➢ To examine in detail the US as a market for clothing and India’s current performance in the market.

3.3 SCOPE OF THE STUDY ➢ I have based my study on various aspects of Indian Textile Industry and for me there was no end to the scope of the study on this topic

3.4 SIGNIFICANCE OF THE STUDY
It was a matter of great significance and importance for me to make a project on this topic. The making of this project has benefited me in many ways it helped me to understand the culture of this industry more closely and clearly it helped me to gain some practical knowledge about making a live project on a particular industry
Overall a great experience and a great medium of learning.

3.5 SIGNIFICANCE TO THE INDUSTRY
The analysis and conclusions drawn by me during the course of my study can serve as a guide to the industry people since a systematic analysis of facts has been attempted by me.

CHAPTER-4:
METHODOLOGY ADOPTED
4.1 METHODOLOGY ADOPTED

Methodology adopted consisted of exploratory research initially, followed up by questionnaire design. Lastly, markets research was done in the form of questionnaires followed by the analyses and summarization.

In all two questionnaires were exercised: One each for the target segment of end consumers and the retailers. Thus the methodology consisted of: ➢ Exploratory research

➢ Questionnaire design

➢ Data collection through interviews and market surveys

➢ Data analysis and summarization.

RESEARCH DESIGN
The project required exploratory research. Two separate questionnaires were exercised for the end consumers and the Retailers. Convenience sampling was done to reach out to the respondents and the sample was collected using Personal interviews, in house interviews and market surveys.

CHAPTER–5
CONCEPTUAL DISCUSSION

5.1 CONCEPTUAL DISCUSSION
MARKETING STRATEGY – ADVERTISEMENTS

Marketing strategy
Use of Sports Teams as Advertisements ✓ Nine college teams on the Hilfiger roster so far ✓ Hilfiger logo located in a highly visible place o large amount of exposure ✓ Exposure is now being linked to the high school ranks o “logo tagged to hero” o increasing number of high school athletes entering the professional ranks without entering college o Estimated pay of $20,000 to some of the best high school programs
Use of Professional athletes to advertise Top notch athletes are viewed as role models Combination of glamour and real life Theme: Associate winners to Hilfiger Argument: Hilfiger is limiting themselves to the young and physically active group in society – Their reasoning for this is that they want to key in on the youth that still have the aspirations at becoming an athletic role model

HILFIGER PRODUCTS FOR MEN

Tommy Hilfiger has always designed an excellent selection of clothing for men. Whether you are looking for business attire such as pants, shirts, ties, or shoes or you want the latest season styles in shirts and shorts, Tommy Hilfiger has it. Below are several of the latest styles of Tommy Hilfiger clothing for men. The fashion line is changing every season and Tommy Hilfiger always has a wide selection of styles for just about everybody.

1. Casual Shirts

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2. Dress Shirts
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3. Polos, Knits & Tees

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4. Jeans & Pants

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5. Dress Pants

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6. Sports Coats

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7. Outer Wear

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8. Sleep wear

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9. Under wear
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10. Shoes
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HILFIGER PRODUCTS FOR WOMEN

Tommy Hilfiger's clothing line for women continues to grow in popularity with the latest styles appearing every season. Tommy is always coming out with new and trendy skirts, shorts, shirts, dresses, and of course the shoes! Below are several of the best sellers on amazon.com, any of the clothes can be ordered online by clicking the links below.

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|Stretch Pique Solid Polo |Lily short with belt |
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|Button Polo Shirt |Cropped Tie-Front Cardigan |

AMENDED AND RESTATED TOMMY HILFIGER CORPORATION CORPORATE GOVERNANCE GUIDELINES

1. DIRECTOR QUALIFICATIONS AND BOARD COMPOSITION
Independence and Qualifications. The Board will have a majority of Directors who meet the criteria for independence required by the New York Stock Exchange. The Nominating and Governance Committee is responsible for reviewing the qualifications and independence of the members of the Board and its various committees on a periodic basis as well as the composition of the Board as a whole. This assessment will include members’ qualification as independent, as well as consideration of diversity, age, skills, and experience in the context of the needs of the Board.

Nominees for Directorship will be recommended to the Board by the Nominating and Governance Committee in accordance with the policies and principles in its charter. The invitation to join the Board should be extended by the Board itself, by the Chairman of the Nominating and Governance Committee and the Chairman of the Board.

Size of the Board. The Board presently has eight members. It is the sense of the Board that a size of six to ten is about right. However, the Board would be willing to go to a somewhat larger size in order to accommodate the availability of an outstanding candidate.

Change of Status. It is the sense of the Board that any individual Director who changes the principal occupation, position or responsibility he or she held when he or she was elected to the Board should notify the Board, and there should be an opportunity for the Board, through the Nominating and Governance Committee, to review the continued appropriateness of Board membership under the circumstances.

Other Directorships. Directors should advise the Chairman of the Board and the Chairman of the Nominating and Governance Committee in advance of accepting an invitation to serve on another public company board. There should be an opportunity for the Board, through the Nominating and Governance Committee, to review the Director’s availability to fulfill his or her responsibilities as a Director if he or she serves on more than three other public company boards.

Term Limits. The Board does not believe it should establish term limits.
While term limits could help insure that there are fresh ideas and viewpoints available to the Board, they carry the disadvantage of losing the contribution of Directors who have been able to develop, over a period of time, increasing insight into the Corporation and its operations and, therefore, to provide an increasing contribution to the Board and the Corporation.

2. DIRECTOR RESPONSIBILITIES
Business Judgment; Indemnification. The basic responsibility of the
Directors is to exercise their business judgment in good faith to act in what they reasonably believe to be in the best interests of the Corporation. In discharging that obligation, Directors should be entitled to rely on the honesty and integrity of their fellow Directors and of the Corporation’s senior executives, outside advisors and outside auditors. The Directors shall also be entitled to have the Corporation purchase reasonable Directors’ and officers’ liability insurance on their behalf, to the benefits of indemnification to the fullest extent permitted by law and the Corporation’s articles of association and any indemnification agreements.

Meetings. Directors are expected to attend Board meetings and meetings of committees on which they serve, and to spend the time needed and meet as frequently as necessary to discharge properly their responsibilities. Information and data that are important to the Board’s understanding of the business to be conducted at a Board or committee meeting should, absent unusual circumstances, be distributed in writing to the Directors before the meeting, and Directors should review these materials in advance of the meeting.

Chairman and CEO. The Board has no policy with respect to the separation of the offices of Chairman and the Chief Executive Officer. The Board believes that this issue is part of the succession planning process – which is overseen by the Compensation Committee – and that it is in the best interests of the Corporation for the Board to make an individualized determination on this matter when it elects a new chief executive officer.

Matters to be Considered. The Chairman will establish the agenda for each Board meeting. At the beginning of the year, the Chairman will establish a schedule of agenda subjects to be discussed during the year (to the degree they can be foreseen). Each Board member is free to suggest the inclusion of items on the agenda. Each Board member is free to raise at any Board meeting subjects that are not on the agenda for that meeting. The Board will review the Corporation’s long-term strategic plans and the principal issues that the Corporation will face in the future during at least one Board meeting each year.

Meetings of Outside Directors. The non-management Directors will meet periodically in executive session. If the non-management directors include any directors who are not “independent” pursuant to the Board’s standards for determining independence, at least one executive session will include only independent Directors. The name of the Director who will preside at these meetings, or the method by which the presiding Director of each session is selected, will be determined by the nonmanagement Directors and disclosed in the annual proxy statement.

Communications. The Board believes that management speaks for the Corporation. Individual Board members may, from time to time, meet or otherwise communicate with various external constituencies that are involved with the Corporation. However, it is expected that Board members will do this only with the knowledge of management and at the request of management; provided, however, that such knowledge and request requirements shall not apply in the event of unusual circumstances or as contemplated by the committee charters.

3. Board Committees
Committees and Members. The Board will have at all times an Audit Committee, a Compensation Committee and a Nominating and Governance Committee.
All of the members of these committees will be independent Directors under the criteria established by the New York Stock Exchange and, in the case of the Audit Committee, Section 10A(m) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. In general, committee members will be appointed by the Board with consideration of the desires and preferences of individual Directors. It is the sense of the Board that consideration should be given to rotating committee members periodically, but the Board does not feel that rotation should be mandated as a policy and the emphasis should instead be placed on expertise, past performance and director preference.

Committee Charters. Each committee will have its own charter. The charters will set forth the purposes, goals, responsibilities and authority (consistent with any applicable bylaws or resolutions of the Board) of the committees, as well as certain specific qualifications for committee membership and procedures for committee member appointment; in addition, the charters will address committee reporting to the Board. The charters will also provide that each committee will annually evaluate its own performance and report the results of this evaluation to the Board.

Committee Meetings. The chairman of each committee, in consultation with the committee members, will determine the frequency and length of the committee meetings consistent with any requirements set forth in the committee’s charter. The chairman of each committee, in consultation with the appropriate members of the committee and management, will develop the committee’s agenda. At the beginning of the year each committee will establish a schedule of agenda subjects to be discussed during the year (to the degree these can be foreseen). The schedule for each committee will be furnished to all Directors.

Independent Advisors. The Board and each committee have the power to hire at the expense of the Corporation independent legal, financial or other advisors as they may deem necessary, without consulting or obtaining the approval of any officer of the Corporation in advance.

Additional Committees. The Board may, from time to time, establish or maintain additional committees as necessary or appropriate.
4. Director Access to Officers and Employees
Full Access. Directors have full and free access to officers and employees of the Corporation. Any meetings or contacts that a Director wishes to initiate may be arranged through the CEO or the Corporate Secretary or directly by the Director. The Directors will use their judgment to ensure that any such contact is not disruptive to the business operations of the Corporation and that such Director does not inappropriately disclose any confidential or sensitive information in the possession of the Director. To the extent not inappropriate, a Director will copy the CEO on any written communications between a Director and an officer or employee of the Corporation.

Non-Director Attendance at Board Meetings. The Board welcomes regular attendance at each Board meeting of the appropriate representatives of senior management of the Corporation as shall be determined from time to time, subject to the Board’s right in all instances to meet in executive session or with a more limited number of management representatives. If the CEO wishes to have additional Corporation personnel attendees on a regular basis, this suggestion should be brought to the Board for consideration.

5. Director Compensation
The form and amount of non-management Director compensation will be determined by the Nominating and Governance Committee in accordance with the policies and principles set forth in its charter and any NYSE or other applicable rules, and that committee will conduct an annual review of Director compensation. The Nominating and Governance Committee will consider that Directors’ independence may be jeopardized if Director compensation and perquisites exceed customary levels, if the Corporation makes substantial charitable contributions to organizations with which a Director is affiliated or if the Corporation enters into consulting contracts with (or provides other indirect forms of compensation to) a Director or an organization with which the Director is affiliated.

6. Director Orientation and Continuing Education
All new Directors must participate in the Corporation’s Orientation Program, which should be conducted within two months of the annual meeting at which new Directors are elected or within two months of the time the new Director otherwise joins the Board. The orientation will include presentations by senior management to familiarize new Directors with the Corporation’s strategic plans, its significant financial, accounting and risk management issues, its compliance programs, its Statement of Principles and Code of Ethics, its principal officers, and its internal and independent auditors. All continuing Directors are also invited to attend the Orientation Program.

7. CEO Evaluation and Management Succession
CEO Review. The Compensation Committee will conduct an annual review of the CEO’s performance, as set forth in its charter. The Board of Directors will review the Compensation Committee’s report in order to confirm that the CEO is providing effective leadership for the Corporation in the long- and short-term.

Succession Planning. The Compensation Committee should periodically report to the Board on succession planning. The entire Board will work with the Compensation Committee to nominate and evaluate potential successors to the CEO. The CEO should at all times make available his or her recommendations and evaluations of potential successors, along with a review of any development plans recommended for such individuals

8. Annual Performance Evaluation
The Board of Directors will conduct an annual self-evaluation to determine whether it and its committees are functioning effectively. The Nominating and Governance Committee will receive comments from all Directors and report annually to the Board with an assessment of the Board’s performance. This will be discussed with the full Board following the end of each fiscal year. The assessment will focus on the Board’s contribution to the Corporation and specifically focus on areas in which the Board or management believes that the Board could improve.

9. Attendance and Shareholder Communications with the Board
Each Director and nominee for Director is expected to attend the Company’s Annual Meeting of Shareholders. In accordance with the SEC’s rules, the Company shall disclose how many members of the Board of Directors attended the prior year’s Annual Meeting of Shareholders. Shareholders who wish to send communications to the Board of Directors may do so by sending such communications to Tommy Hilfiger Corporation, c/o Tommy Hilfiger U.S.A., Inc., Attention: General Counsel, 601 W. 26th Street, New York, NY 10001. The envelope must contain a clear notation that the enclosed letter is a "Communication to the Board of Directors." The letter must identify the author as a shareholder. Any such communications shall be reviewed by the Company's General Counsel and forwarded to the Chairman of the Board of Directors for further review and action by the entire Board of Directors.

Competitive Position of India’s Textile and Apparel Industry
India’s share of global exports of textiles and apparel increased from 1.8 percent in 1980 to 3.3 percent in 1998. However, India’s export growth was lower than that of most Asian countries during that period. The study identifies a number of competitive strengths of the Indian textile and apparel industry:

India has a large fiber base, and ranks as the world’s third-leading producer of cotton, accounting for 15 percent of the world’s cotton crop. India produces a wide variety of cotton, providing operational flexibility for domestic textile producers. In the manmade fiber sector, India is the world’s fifth-largest producer of polyester fibers and filament yarns and the third-largest producer of cellulosic fibers and filament yarns.

India is the world’s second-largest textile producer (after China), and is diversified and capable of producing a wide variety of textiles. The spinning segment is fairly modernized and competitive, accounting for about 20 percent of world cotton yarn exports.

India’s textile and apparel industry benefits from a large pool of skilled workers and competent technical and managerial personnel. India’s labor is inexpensive; hourly labor costs in the textile and apparel industry average less than 5 percent of those in the U.S. textile and apparel industry.

The study also identifies the competitive weaknesses that have impeded the growth of India’s textile and apparel industry:

Policies of the Government of India (GOI) favoring small firms have resulted in the establishment of a large number of small independent units in the spinning, weaving, and processing sectors. Sources in India claim that GOI policies have provided competitive advantages for the small independent units over the generally larger composite mills, discouraged investments in new manufacturing technologies, and limited large-scale manufacturing and the attendant benefits of economies of scale.
Sources in India also claim that because of the GOI policies, small units have significantly lower production costs than the composite mills, use low levels of technology, and produce mostly low value-added goods of low quality that are less competitive globally.

India’s textile industry depends heavily on domestically produced cotton. Almost two-thirds of domestic cotton production is rain fed, which results in wide weather-related fluctuations in cotton production. Moreover, the contamination level of Indian cotton is among the highest in the world. According to sources in India, the cotton ginning quality is poor, contributing to defective textile products.

The GOI policy reserving apparel production for the SSI sector had restricted the entry of large-scale units and discouraged investment in new apparel manufacturing technologies. As a result, most Indian apparel producers do not benefit from economies of scale.

The competitiveness of India’s apparel sector is adversely impacted by an inadequate domestic supply of quality fabrics. Fabric imports are subject to high duty rates and other domestic taxes that increase the cost of imported fabrics. Another major weakness of the Indian apparel sector is a lack of product specialization which, along with a limited fabric base, has limited India’s apparel production and exports to low value-added goods.

India has high energy and capital costs, multiple taxation, and low productivity, all of which add to production costs. As a result, textile and apparel products from India are less competitive than those of China and other developing countries in the international market.

Government Policies Affecting the Industry
As India steps into an increasingly liberalized global trade regime, the GOI has implemented several programs to help the textile and apparel industry adjust to the new trade environment. On November 2, 2000, the GOI unveiled its National Textile Policy (NTP) 2000, aimed at enhancing the competitiveness of the textile and apparel industry and expanding India’s share of world textile and apparel exports to 10 percent by 2010 from the current 3-percent level. The study identifies the following measures taken by the GOI to achieve these objectives:

Under the NTP 2000, the GOI removed ready-made apparel articles from the list of products reserved for the SSI sector. As a result, foreign firms may now invest up to 100 percent in the apparel sector without any export obligation.

The GOI grants automatic approval within 2 weeks of all proposals involving foreign equity up to 51 percent in the manufacture of textile products in the composite mills and in the manufacture of waterproof textile products.

On April 1, 1999, the GOI implemented the Technology Upgradation Fund (TUF) to spur investment in new textile and apparel technologies. Under the 5-year $6 billion program, eligible firms can receive loans for upgrading their technology at interest rates that are 5 percentage points lower than the normal lending rates of specified financial institutions in India. According to GOI officials, this interest rate incentive is intended to bring the cost of capital in India closer to international costs.

The GOI created a $16 million “cotton technology mission” to increase research on improving cotton productivity and quality.

EOUs and composite mills that produce yarn for captive consumption are exempt from the GOI’s hank yarn obligation, which requires each spinning mill to produce 50 percent of its yarn for the domestic market in hank form(80 percent of which must be in counts of 40s and lower) for use in the handloom sector. The GOI plans to reduce the hank yarn obligation from50 percent to 30 percent for all other spinning units.
D To boost exports and encourage new industry investment, the GOI under the quota entitlement policy increased the share of quotas earmarked for units investing in new machinery and plants.

To promote modernization of Indian industry, the GOI set up the Export Promotion Capital Goods (EPCG) scheme, which permits a firm importing new or secondhand capital goods for production of articles for export to enter the capital goods at preferential tariffs, provided that the firm exports at least six times the c.i.f. value of the imported capital goods within 6 years. Any textile firm planning to modernize its operations had to import at least $4.6millionworth of equipment

CHAPTER–6
ANALYSIS OF THE PROBLEM UNDER STUDY

6.1 ANALYSIS OF THE PROBLEM UNDER STUDY DATA ANALYSIS

Q1 How many different types of Textile products do you Trade/manufacture?

□ T-SHIRTS □ TROUSERS □ KNICKERS □ CHILD WEAR □ OTHERS

[pic] Q2 How many of these products do you get manufactured on your own? □ T-SHIRTS □ TROUSERS □ KNICKERS □ CHILD WEAR □ OTHERS

[pic] Q3 Approximately, what is the total quantity (numbers) of garments do you purchase/manufacture on monthly basis from all your suppliers? □ >1000 units □ >5000 units □ >10000 units □ >50000 units □ >100000 units

[pic] Q4 How much of importance (in %terms) do you give to raw material to ensure that the final look of the product is as desired by you and the client?

| | | | | | | | | | |

0 10 20 30 40 50 60 70 80 90 100

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Q5 How satisfied are you with your present suppliers of raw material:

1…………………………..3…………………………. 5 Very Neutral Very Dissatisfied Satisfied

[pic]
6.2 FINDINGS AND ANALYSIS
Half of the respondents said that they prefer shirts over jeans.
Nearly twenty percentage of the respondents said that they prefer to waer the T – Shirts twice a week.

[pic]

INTERPERETATION
The number of the people surveyed for this project was 100 which include the sufficient mix of people from different backgrounds. The survey was done on 40% - students, 20 % - working professionals, 20% - self employed, 20% - others.

[pic]

INTERPERETATION
The pie given below shows that the Casual wear is normally preferred among the surveyed respondents.
[pic]
INTERPERETATION
Brand Name is very important to consumers when it comes to buying as 34% of the respondents said that they buy only branded products only. 20% of the people said that the price is the most important parameter in their buying decisions.

[pic]

INTERPERETATION
Clearly 12 % of the people think that the Tommy Hilfiger is the expansive brand and Reebok takers were 16%. Though Tommy Hilfiger is not significantly present here in India but most of the respondents were aware of this brand
[pic]

INTERPERETATION
Nearly 31% of the respondents said that they spend around 3000 – 4000 INR annually on buying T – shirts.
PEST ANALYSIS
Political-legal
➢ Complete elimination of the quota restrictions under the Multi Fibre agreement (MFA) since January 2005 ➢ Inflexible Indian Labor laws ➢ De-reservation of garments from SSI sector since 2001
Economic
➢ All capital goods in the textile sector have been covered by Export Promotion Capital Goods scheme, which attracts 5 per cent customs duty without any countervailing duty. ➢ Union budget 2005-2006: Ad valorem component of customs duty on textile fabrics and garment has been reduced from 20% to 15%. ➢ Per Capita income spent on branded garments is less than that in the developed countries. ➢ Demand for branded garments is more income elastic than price elastic

Socio-Cultural ➢ Increased disposable income of Indian households ➢ People are exposed to the western lifestyle and there is a drastic shift in their taste and preferences ➢ Continuing shift in customer preference towards ready-to-wear products ➢ Consumers more aware of brands and are now more style and brand conscious. ➢ Styles and trends changing faster than ever which reduces the shelf life of fabrics as well as readymade garments ➢ Customers accepting the casual and colorful look even at work.

Technological ➢ Pedal-operated machines in the 60s, the industry moved on to power-operated machines and steam presses in the mid-80s, started assembly line manufacturing in the late 80s and then entered the phase of using computerized machines. This in short summarizes the usage of technology in garment industry over the years. ➢ IT tools being used for tracking of stock keeping units. ➢ IT helps improve the supply chain management, for direct marketing, for identifying customer preferences in multiple geographies. ➢ Regular innovations in color, style, design, fabric, finish and fit are necessary in the dynamic industry, which in turn requires automated machinery and IT solutions. ➢ Automation brings down the total cost of production by at least 10 to 15 per cent, out of which the saving on fabric alone would be 5 to 7 per cent. ➢ Cost of technology is however a deterrent ➢ E-retailing

PORTER’S FIVE FORCES ANALYSIS
1. Threat of new entrants: ➢ Economies of scale ➢ High capital investment: The entry barriers are low to enter the fabrics industry but the organized sector is much difficult to enter as it involves huge capital requirement because of the quality requirements ➢ Supply chain constraints ➢ High product development costs ➢ Distribution networks ➢ Seasonal businesses ➢ Bigger Indian players today are focusing on building a good distribution network. Access to a good distribution network too can be a critical factor in the future.

2. Extent of rivalry ➢ Branded segment is growing at 18-25% annually from 1998 onwards (the industry growth rate is only 5%- KSA Technopak) ➢ Competitors: ➢ Tailor Made ➢ Ready Made

The Indian textile and garment industry is highly fragmented with 90% of sales coming from the unorganized segment. There is intense rivalry among the organized players and competition is very high ← Textile Mills integrating forward. e.g. Mayur, Raymonds, Arvind, Bombay Dyeing, Grasim, Siyarams, etc. ← Garment Exporters focussing onto domestic market e.g. Zodiac, Color Plus, Lerros, Weekender, Wearhouse, etc ← Retail Chains bringing own Brands, e.g. Shopper’s Stop, Westside, Pantaloon, etc. ← Fabric Distributors diversifying into Garments, e.g. Crocodile, Pan America, etc. ← Other Localized competition e.g. Cambridge in Bombay, Turtle in Calcutta, etc. ← The umpteen opportunities offered by the Indian market, attract the established global players. ← Competition across segments.

3. Threat of Substitutes: The substitutes do not really exist for this industrial product. However since we are talking about ready to stitch fabric industry, the organized readymade retailing garment and the unorganized retail garments can be treated as close substitutes.

4. Bargaining power of the suppliers: ← Limited role, no branding. ← Low differentiation of inputs. ← Large number of suppliers. ← Business characterized by commodity and seasonal cycles.

5. Bargaining power of the buyers: ← Wide range of choices available for the customer right from Fabrics to Ready Made Garments and after the influx of foreign players in the market the options have increased for the benefit of the End-Consumers. ← Price points started playing an important role in brand selection due to which the small and domestic brands survive.
TOMMY HILFIGER COMPANY ANALYSIS
APPAREL INDUSTRY – VALUE CHAIN

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SEC Classification

Occupation |Illiterate |School |SSC / HSC |Some College but not Graduate |Graduate / Post Graduate | | | |Upto
4 Yrs |Upto 5-9 Yrs | | |General |Professional | |Unskilled |E2 |E2 |E1 |D |D |D |D | |Skilled Worker |E2 |E1 |D |C |C |B2 |B2 | |Petty Trader |E2 |D |D |C |C |B2 |B2 | |Shop Owner |D |D |C |B2 |B1 |A2 |A2 | |Businessmen/Industrialists (no. of employees) |None |D |C |B2 |B1 |A2 |A2 |A1 | | |1-9 |C |B2 |B2 |B1 |A2 |A1 |A1 | | |10+ |B1 |B1 |A2 |A2 |A1 |A1 |A1 | |Self employed / Professional |D |D |D |B2 |B1 |A2 |A1 | |Clerical / Salesman |D |D |D |C |B2 |B1 |B1 | |Supervisory Level |D |D |C |C |B2 |B1 |A2 | |Officer/ Executive |Junior |C |C |C |B2 |B1 |A2 |A2 | | |Middle/ Senior |B1 |B1 |B1 |B1 |A2 |A1 |A1 | |

CHAPTER–7
INTERPERETATION OF RESULTS

7.1 INTERPERETATION OF RESULTS

The number of the people surveyed for this project was 100 which include the sufficient mix of people from different backgrounds. The survey was done on 40% - students, 20 % - working professionals, 20% - self employed, 20% - others.
Half of the respondents said that they prefer shirts over jeans.
Nearly twenty percentage of the respondents said that they prefer to waer the T – Shirts twice a week.

1. INTERPERETATION
Nearly 31% of the respondents said that they spend around 3000 – 4000 INR annually on buying T – shirts.

2. INTERPERETATION
Clearly 12 % of the people think that the Tommy Hilfiger is the expansive brand and Reebok takers were 16%. Though Tommy Hilfiger is not significantly present here in India but most of the respondents were aware of this brand

3. INTERPERETATION
Brand Name is very important to consumers when it comes to buying as 34% of the respondents said that they buy only branded products only. 20% of the people said that the price is the most important parameter in their buying decisions.

4. INTERPERETATION
The pie given below shows that the Casual wear is normally preferred among the surveyed respondents.

CHAPTER–8 SUGGESTIONS/RECOMMENDATIONS

8.1 SUGGESTIONS/RECOMMENDATIONS

8.2 SUGGESTION FOR IMPROVEMENT

1) Human Resource Development: There is a need for stepping up training institutions to impart training to the personnel from the shop floor level in the operational form the latest state of the art high speed production machines. There are already some such institutions both in private and government sector. There is a huge gap in demand for well trained skilled operators for high speed production oriented machines. It is therefore suggested that the present polytechnics which are spread throughout the country) may be upgraded to provide training in Garment Design and Garment Manufacture with the use of state of the art machines and equipments.

2) Technology: The technology presently followed by a large number of small units) which cater to both domestic and export market is very traditional and does not meet the needs of the industry.

The average speed of the indigenous sewing machine is about 800-1000 stitches per minute and are not heavy duty. The average speed of an imported heavy duty production oriented sewing machine ranges between 2800-4000 stitches per minute. These imported machines also have provision for a number of attachments which speeds up the production. A worker in Indians most efficient factory stitches 14 to 16 shirts per day) compared to 25 shirts in china per day per worker. A large number of subcontractors have installed 30 to 50 indigenous machines which cannot cater to the needs of the export market. A minimum of 150 to 200 machines would be ideal to get orders on regular basis. Most of the subcontractors - nearly 50% provide stitch to finish operations. The rest provide only finishing operations I services. It is better to upgrade the skill and technology of the 50% of the subcontractors who provide cut to finish stage and bring them on par with the International standards to meet International Export obligations.

Fabrics: At present a large portion of our exports consists of garments made from natural cotton about which 80% is of cotton and 20% is of man made fibres. But the International market require garments made of 20%) cotton and 80% manmade fabrics. The country does not have textile processing units to manufacture fine fabrics required for exports mills need to be modernized to produce such fabrics of international quality and needed by the exporters i.e. upgradation liberal import of high quality fabrics would be permitted.

Finance: In 2000, there were about 1117 exporting units registered with AEPC of which only 255 were manufacturer exporters. The situations has not changed much since the merchant export gets the L/C in his name, and subsequently gets the order executed from the sub-contractors, the benefits of L/C and confessional finance goes largely to the merchant exporter, as the banker finance the unit who possess the L/C. There is therefore a need to open inland letter of credit in favour of the fabricators/ subcontractors of the garments on the strength of the original L/ C, thus enabling the banker to provide cheaper credit to small fabricators / subcontracts who actually execute the order.

Integration With It Industry: The apparel and textile industry occupies a pre-eminent position in India's economy and accounts for about 20% of industrial production and one thried of the total foreign exchange earnings, India exports apparel to more than 100 countries. Traditionally, India's competitive market, low coasts cannot be the only advantage. Today, the customers demand for better quality, greater variety, better value for money and a shorter response time. Retailers require their suppliers to produce their merchandise quickly to market trends. Information Technology is one way in which more flexible and quicker response to market demand can be achieve. Since the last decade, the apparel industry has been trying to covert itself from a mechanical - oriented industry into a computer driven one. A few large exporters have made an attempt to use extensively the IT Industry to create market oriented designs and to make patterns for the same and get the quick approval from the importers at the shortest possible time. This has enabled them to produce and ship the garments within the stipulated time, taking care of the quality aspects. There is a need for a grater interaction with IT industry. Since the investment involved is heavy and technology is sophisticated, is suggested that a Common Facility approach may be adopted with the Government and the industry contributing towards the cost of establishment.

It is very important for the government and the regulatory authorities as well as the promotion councils to compliment the strategies of the exporters through supportive and encouraging policies.

8.3 RECOMMENDATION

In light of this and based on our perception after speaking to a few exporters, we have listed certain recommendations, which have a lot of significance and must be looked at by the authorities to help the industry.

Since the exporters fear reduction in duty drawback as a result of dismantling of quotas, it would make survival very difficult. Also as a result of increased competition the exporters fear that credit periods will increase with the importers. Therefore it is recommended that the Interests on Bank Limits must be lowered. Currently, Pre-Shipment Credit is around 9%, but the Post-Shipment Credit is very high at 18%.

The formalities and documentation with respect to imports of raw materials and machinery have to be reduced to facilitate trade.

The Export Credit and Guarantee Corporation (ECGC) should play an important role to provide a strong support to the exporters who face the wrath of uncertainties of the importers. Currently the formalities are so many that the exporters do not feel like taking the help of ECGC.

The government must look to reduce the cost of raw materials by liberalizing in the textile sector. The various Industry Associations, instead of showing their bargaining power in achieving a good deal for a sop from the Government should support its members through market studies, competition tips and market data bases for future references.

8.4 CONCLUSION
STRUCTURE OF THE TEXTILE & APPAREL INDUSTRY IN INDIA
Financially strong players at the back end. State of the art spinning facilities Large weaving capacity. However, a major capacity is in the unorganized / small scale sector. ← Processing is the weakest link in the entire chain. Barring a few large, organized sector players, operating largely in the 100% Cotton and / or Cotton Rich blends in finer counts & in denim, this sector is unorganized

← In Towels & Home Textiles, some significant players that compete strongly with Pakistan, Turkey & China

← Garment making has a number of small to large players. Larger companies expanding capacity rapidly. Most have Full Package capability.

← Large number of retailers at the front end, though only a few are big (relatively).

← Sample size: The sample size was less – 50 because of the difficulty in conducting the interviews with respondents with in given time frame.

← Statistical tools: An attempt has been made to use statistical tools like as it can help in refining the results in a more meaningful way but errors were noticed due to small sample size.

← Time constraint: Due to time constraints, inputs are not taken from retailers. Although it is felt that it has not affected the study but such inputs might prove useful.

← The study can further be conducted after accepting the recommendations and operationalzing those for some time to see the effect on brand perception and increase in terms of sales etc.

REFERENCES/BIBLIOGRAPHY
REFERENCES/BIBLIOGRAPHY

Books • Kotler Philip, Marketing Management, Prentice Hall of India Pvt. Ltd., Ed. 2008. • Valatie A. Zeithaml, Mary Jo Bitner, Service Marketing, TMH, Ed. 2009. • Insurance Post Asia –Journal, Ed. 2009. • Marketing Mastermind –Journal, May ‘05, Ed. 2009. • Gupta S. P. and Gupta, M. P., Business Statistics, Sultan Chand and Sons, New Delhi, 1997, Ed. 2009.

OTHERS • Collection of data through different libraries (AEPC, PHD Chamber of Commerce, ITPO, WTO, FICCI, FIEO) • Visit to cash embassy for the analysis of their concurred Mkt. • Disk research is an important part & parcel of this research project. • Export import privatroies • Export manuals • World Directories • Government policy issues

Websites INTERNET • Various websites • www.indiamart.com • www.vsa.net • www.fabriclink.com • www.indianfo.com
Various books: • Apparel fortnightly • Hand Book of Statistic (AIEC) • Quality Control Apparel (ITC) • Apparel Magazine • Different export generals were consulted before making an analysis and that supported the project like the backbone.

ANNEXURES

ANNEXURES

QUESTIONNAIRE
1. General information ✓ Name ___________________________________________________________________________________________________________________________________ ✓ Age _____________________ ✓ Sex _____ Male _____ Female Occupation □ Self Employed _____ □ Salaried _____ □ Student _____ □ Other _____ Annual income □ Rs. 300000 & above _____ □ Rs. 200000 – 3000000 □ Rs. 100000 – 2000000 □ up to Rs. 100000

2. Which form of clothing do you prefer? □ Shirts ____ □ Jeans ____

3. If you wear T-Shirts / Jeans, how often do you wear it per week? □ once ____ □ twice ____ □ thrice ____ □ daily ____

4. Category of T-shirts / Jeans you wear the most? □ casual wear ____ □ active wear ____

5. Select Top 5 brands and rank them according to your preference □ Benetton ____ □ Levis ______ □ Lee _____ □ Weekeneder _____ □ Duke _____ □ Adidas _____ □ Nike _____ □ Reebok_____ □ Tommy Hilfiger_______

6. What attracts you the most while you buy a T-Shirt /Jeans ? Rank the following as per your preference: □ Quality of material ____ □ Design and color _____ □ fitting ___ □ Price ____ □ Brand name ____

7. How often do you buy a T-shirt / Jeans? □ once a month ____ □ Once in 2 months _____ □ Once in 3 months _____ □ Once in 6 months _____

8. Which price range in T-shirts / Jeans you prefer the most? □ Rs. 150-300 _____ □ Rs. 300-450 _____ □ Rs. 450-600 _____ □ Rs. 600 & above _____
9. Which brands do you feel is the most expensive? □ Benetton ____ □ Levis ______ □ Lee _____ □ Weekeneder _____ □ Duke _____ □ Adidas _____ □ Nike _____ □ Reebok_____ □ Tommy Hilfiger_____

10. If you switch to other brand, will it be among these? □ Benetton ____ □ Levis ______ □ Lee _____ □ Weekender _____ □ Duke _____ □ Adidas _____ □ Nike _____ □ Reebok_____

11. Why would you like to switch over to other brand? □ Price ____ □ Quality ______ □ Brand_____ □ Design _____

12. If you like T-shirts then in which form do you prefer them? □ Plain ____ □ Logo/Graffiti ______ □ Designer_____

13. Overall income spent on clothing (T-shirt) in a year? □ Rs. 4000 & above _____ □ Rs. 3000-4000 _____ □ Rs. 2000-3000 _____ □ Rs. 1000-2000 _____ □ Less than Rs.1000 _____[pic]
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Customers Preferences

EFghÊË ˆ ¤ ¥ © ¼ ½ îàîÒ½¯¢“„z“o`O>o`“3hºIÙ5?CJ \?aJ hŒ{ÜhºIÙ5?B*[pic]CJaJph hŒ{ÜhºIÙ5?B*[pic]CJaJphhºIÙ5?B*[pic]CJ\?aJphhºIÙ5?B*[pic]\?phhºIÙB*[pic]\?phhŒ{ÜhºIÙB*[pic]CJ\?phhºIÙ5?B*[pic]CJ \?aJ phhºIÙCJ OJQJ\?aJ hºIÙB*CJ \?aJ phÿ(hÅ
ÝhºIÙB*[?]CJ(OJQJ\?aJ phÿhºIÙB*[pic]CJ \?aJ phhºIÙB*
CJ \?aJ ph€"hºIÙB*
15%

13%

18%

20%

34%

Quality of Material

Design and color

Fitting

Price

Brand Name