almost synonymous

Case study 5

Bata has become household name and almost synonymous with footwear over the past 75 years in the country. The brand has been a pioneer, innovator and market leader and has one of the strongest market penetrations amongst the branded footwear players in the country. Bata has over eight renowned brands and some of them are market leaders in their own right. These brands include Hush puppies, Marie Clair for women and Bubble Hummers for kids and power for sporting activities. Bata clearly has the single largest footwear distribution network in the country. This includes over 1,100 company owned show rooms and has presence in over 30,000 multi-brand retail outlets in the country. Their store have about 75% fixed cost and 25% variable cost. Despite this kinds of distribution, Bata has not been able to substantially increase its market share (of about 8%) of Rs.9, 300 crore domestic footwear market. Over the last 10 years, the domestic footwear market has seen tremendous changes in several aspects. This includes new brands, new categories and new form of distribution and arrival of top-end as well as price players. On the top end with the entry of Nike, Reebok and Adidas, the entire market place of sportswear has changed rapidly and it has redefined both price points and the category that Bata has been marketing in sports largely through its power brand. These three players not only used changed marketing through celebrity endorsements but also had high visibility premium end stores with superior service levels compared to Bata’s declining service hitting Bata harder in the premium end category. Meanwhile, Liberty has become the second largest manufacturers in the country. It has become the largest manufacturers in the country. It has become the largest threat to Bata on the mass, popular price points. It has also been noted that close to 50 % of

the total footwear market in the country is still controlled by the unorganised sector. For the 2003 financial year, Bata had a turnover of Rs.711 crore with a loss in theregion of over Rs.26 crore while the top line continues to grow, the profitability of
Bata has been severely impacted over the past few years.

Questions:
1. What should the company do to pull itself out of the Shoe-makers of children image?
2. What will increase the profitability and market share for this brand?
3. What marketing steps will get it back on the road in a very competitive market place?
4. What is the business restructuring that Bata ought to work on now on the distribution, pricing and promotion front?