Presented by: Suchitra Singh Amit Singh Akanksha Singh Deepak Sarmah Sandeep Kumar
History of Duleath Ltd.
M/s Duleath Ltd. was started in 1960s. Since 1960s, they are in business of producing leather. They are selling their leather to companies involved in producing leather shoes and other leather products. With post liberalization period, after 1991 onwards, they diversified their business in shoe manufacturing industry.
History of Duleath Ltd.
In 1993, they setup their own factory in Noida, U.P. 1993, They started their own R&D facility in their factory. factory.
Leather Industry in India
The leather and leather products industry is one of s oldest manufacturing industries that catered to the international market right from the middle of the nineteenth century. century. The leather industry employs about 2.5 million people and has annual turn over of Rs. 25,000 crores. Rs. 25, crores. Due to the age of the industry and its links with the social structure, the organizational structure that has emerged is a very complex one that contains within it elements of continuity with traditional structures as well as those that represent a break with them. them.
Trend of Leather Industry in India
Source: Indian Council for Leather Exports
Reasons for Diversification
1. Government gives encouraging support to leather industry in India: India:
If the companies selling finished products made of leather. leather. If the firm can export leather finished shoes and export of other leather products. products. 2. The countries which are leaders in the field of
producing shoes in world forced to slow down their production. production.
Reasons for Duleath Ltd. entering into Indian Shoe Market
1) A large livestock population;
2) Inexpensive skilled manpower;
3) Encouragement & support from Government.
About Durcom Shoes
In 1993, they developed a 1993, material named Durcom. Durcom. Durcom possessed all the necessary properties for shoe making material such as Permeability Strength Flexibility Durability
Marketing Strategy
They Adopted Test Marketing to market Durcom Shoes.
A test market is a geographic region or demographic group used to gauge the viability of a product or service in the mass market prior to a wide scale roll-out. The criteria used to judge the acceptability of a test rollmarket region or group include: A population that is demographically similar to the proposed target market; Relative isolation from densely populated media markets so that advertising to the test audience can be efficient and economical.
Pricing Strategy
Deuleath Ltd. Set up a Premium pricing for Durcom Shoes Ltd. Reasons for Premium Pricing: Pricing: Superior quality over leather in terms of durability & ease of care. care. Was first to manufacture high priced shoes which indicates better quality. quality. After adopting Skimming Pricing Strategy it would lately concentrate on Penetration Pricing Strategy. Strategy.
Market trend of Durcom Shoes
In the first three years, Durcom Shoes showed very pleasing results. Durcom shoes were sold increasingly in the first three years. Figures increased from 10,000 units in the year 1995 to 25, 000 units till end of June 1997. But from July 2007, the sale of Durcom Shoes began to fall drastically.
Reasons of failure of Durcom Shoes
There was a falling trend of rate of rebuying by the former buyers of the shoe. Two main reasons as cited by the sales man as feed back for this: 1. The high priced buyers did not get motivated by the factors such as durability & ease of care as provided by Deuleath. 2. Complaints from the customers that the shoes makes them feel warm which other brands dont.
Questions from the case: case:
Q.1: Where do you think that the company went wrong in analyzing the consumer shoe buyer behaviour?
Q.2: Do you think it would be preferable for the company to identify a new buyer market (low priced shoe market segment) ? If so, then what steps would you suggest to help the prospective buyer to go through the buying decision process?
