Bata established itself in India in the year 1931. In 1934, it started functioning from its own built manufacturing city at Batanagar, close to Ganges in West Bengal. Bata Shoe Company Private Limited went public in the year 1973 and changed its name to Bata India Ltd.
Before we move any further, its very important to discuss the latest comeback made by the company in its market. Under the leadership of Marcelo Villagran, the CEO of the MNC, it has registered an unprecedented return in the Indian market. It was only half a decade ago that the company had reached the point of bankruptcy and has now made a strong comeback.
“If the last five years were all about consolidation, the next five years will be all about expansion,” says the CEO. Hence it became my source of natural curiosity to take a sneak peek into the company and its strategies and share it with everyone.The net profit on y-o-y basis has grown by 42.6 % to INR 95 cr. The Bata scrip which was reeling at Rs 40- Rs 45 only a decade back and is now trading around Rs 460. You may visit any share market site and it will advise you to buy its shares.So what has caused the major turnaround? What were the key strategies that the champion CEO employ to gradually make the balance sheet favorable?
Well, the first job of the CEO as soon as he joined the company in 2005 was to clear the mess. He closed down stores which had registered continuous losses over the year. The stores were turned into modern format stores that had better designs and brand appeal. In the year 2010, over 108 new format stores were opened to enhance the presence of the brand. Hence, it was all about closing the old ones and opening new stores at better locales. Another unique feature was to provide merchandise online on its site. The website had over 4 lakh hits since the launch of the service a year ago. The company made its special team comprising of experts in shoe making and branding who were given responsibility of launching new designs. The strategy of Bata was very simple. It tried to offer products that were consumer-centric and provided value for money.
The brand personality of Bata is definitely an honest and sincere brand which can be trusted by the consumers. It does not carry any snob value but a simple and strikingly innovative designs for its consumers. Hence the basic TG for the brand is middle-middle, middle-upper and upper-lower. The company has clearly done away with the lower segment of the market.
Bata has its fully operational stores in Arunachal Pradesh, Jammu & Kashmir and even Andaman & Nicobar Islands. Now its planning to increase its store presence in other small towns in India. Its planning to start with franchisee operations in these small towns too. The average size of these new stores shall be kept at a minimum of 5000 square feet.
Future Challenges :
I believe now that since the company has already made a comeback, it should look for more expansion both in terms of market and consumers. The main consumers of the brand till now have been consumers who are above 40. Its high time that the brand starts targeting the major market i.e. the youth in the age bracket of 19-30. Currently, the brand manufactures its own range of men’s accessories like belts and handbags for women. The strategy should be to reach the youth through these auxiliary brands and then drive them towards the mother brands. May be they could make more accessories like sunglasses, watches etc which are mid-ranged priced meant to attract the youth. Also the brand Bata has enormous respect and such brand extension shall not hamper the image of mother brand.
Another new strategy could be a fierce promotional program. When was the last time we saw a Bata TVC? Probably, we can’t even remember. May be it was never there. The time is nigh for Bata to go big and sweep their customers off their feet. No doubt Bata has arrived finally but it needs to communicate it to the market. What better than having a spree of promotions focusing on the brand essence. The honesty, comfort, perfection and value for money that the company offers should be highlighted in the promotions. Also, the new market i.e. the young should not be forgotten. Hence, a brand ambassador who can cater to both the needs should be signed by the company.
PS :I request every reader to kindly drop-in their valuable comments. Please don’t treat it as an article but a discussion.
Bata was a household name in the early 1990s as far as i remember. Apart from doing what they are right now they must check and see what went wrong during the course.
ReplyDeleteSome suggestions:
1. Try different brands under the Bata umbrella.
2. What's there logo or punch line.....that's something they can work on.
3. TV commercials have already been stated.
4. May be they can work on what must come to the customer's mind when they hear the name Bata.....that can be reliable or toughness or comfort......the message must be clear.
5. Their growth may not be known to their prospective consumers. That's what they need to touch.
Yes, I agree with you. There's so much to do about the brand and a plethora of options available as well. The positive side is that they are making profits and have finally come out of the shambles. Now,the only way to go is up.
ReplyDeleteThank you for participation.