1.

1 Origin of the bag industry:

A bag (also known regionally as a sack) is a common tool in the form of a

non-rigid container. The use of bags predates recorded history, with the earliest bags
being no more than lengths of animal skin, cotton, or woven plant fibers, folded up at
the edges and secured in that shape with strings of the same material FYI, if it's not
a box... it's a bag.
Despite their simplicity, bags have been fundamental for the development of human
civilization, as they allow people to easily collect loose materials such
as berries or food grains, and to transport more items than could readily be carried in
the hands. The word probably has its origins in the baggi from the
reconstructed Proto-Indo-European , but is also comparable to the Welsh baich (load,
bundle)
Cheap disposable paper bags and plastic shopping bags are very common in the retail
trade as a convenience for shoppers, and are often supplied by the shop for free or for a
small fee. Customers may also take their own shopping bags to use in shops. Although,
paper had been used for purposes of wrapping and padding in ancient China since the 2nd
century BC the first use of paper bags (for preserving the flavor of tea) in China came during
the later Tang Dynasty (618–907 AD).
History of bag industry

Bags have been around for hundreds of years and have been used by both men
and women. Bags have been prevalent as far back as ancient Egypt.
Many hieroglyphs depict males with bags tied around their waist. The Bible mentions
pouches, especially with regard to Judas Iscariot carrying one around, holding his
personal items. In the 14th century, wary of pickpockets and thieves, many people
used drawstring bags, in which to carry their money. These bags were attached to
"girdles" via a long cord fastened to the waist.
Women also wore more ornate drawstring bags, typically
called hamondeys or tasques, to display their social status. The 14th-century
handbags evolved into wedding gifts from groom to bride. These medieval pouches
were embroidered, often with depictions of love stories or songs. Eventually, these
pouches evolved into what is known as a chaneries, which were used for gaming or
food for falcons. During the Renaissance, Elizabethan England's fashions were more
ornate than ever before. Women's wore their pouches underneath the vast array of
petticoats and men wore leather pockets or bagges inside their breeches. Aristocrats
began carrying swete bagges filled with sweet-smelling material to make up for poor
hygiene.

In the modern world, bags are ubiquitous with many people routinely carrying a
wide variety of them in the form of cloth or leather brief cases, handbags,
and backpacks, and with bags made from more disposable materials such
as paper or plastic being used for shopping, and to carry home groceries. A bag may
be closable by a zipper, snap fastener, etc., or simply by folding (e.g. in the case of a
paper bag). Sometimes a moneybag or travel bag has a lock. The bag likely
predates the inflexible variant, the basket, and bags usually have the additional
advantage over baskets of being foldable or otherwise compressible to smaller sizes.
On the other hand, baskets, being made of a more rigid material, may better protect
their contents.
 An empty bag may or may not be very light and foldable to a small size. If it is,
this is convenient for carrying it to the place where it is needed, such as a shop, and
for storage of empty bags. Bags vary from small ones, like purses, to large ones for
use in traveling like a suitcase. The pockets of clothing are also a kind of bag, built
into the clothing for the carrying of suitably small objects

1.2 Growth rate of bags indusrty:

India is among the top 5 markets forlugga bag industry. The main
reasons for this are the ever-growing population of India and the
improvement in the standard of living in past few years. Bag industry is
one of those profit-making industries which have been ignored by the
big names.
According to the industry estimates, Indian domestic branded bag
market is growing at the rate of 9 to 12 percent per annum. The
domestic branded market is of net worth Rs 6,000 crores whereas the
non-branded is of Rs 15,000 crore.
Indians had a perception aabout bag that it is only a utility, not a stylish
accessory but brands like VIP, Fast Track, Samsonite and American
Tourister have changed this thinking and the market has become very
competitive. Also, the increase in interest of people towards travelling
has made a huge impact on the sales in the bag industry, especially the
branded ones, as consumers now see bags as a status symbol. Gifting
branded bags has now become part of the wedding trousseau and this
gives a boost to the sales of bags and suitcases during the wedding
season. The growth of the Indian airline industry could be another
important factor.
In India bags industry is growing at 18 percent compound annual
growth rate (CAGR) which is a very good number when we compare it
with other industries. Brands are now focussing on youth-related items
because youngsters are more keen to travel and experience adventure.
Online Marketplaces have also contributed to growth as now companies
have a wider reach and are selling products to the people who didn’t
even knew the names of these brands.
Indusrty growth drivers:
Increasing population
Economic growth
Growing income
Changing spending habits
Changing preferences of consumers
Changing travel trends
Travel and tourism industry greatly influences the luggage market
Increasing cross-border and internal migrations
Travellers and increasingly matching luggage with the clothes they wear
Fashion oriented luggage such as backpacks, sports bag, and computer
cases which suit their requirements and give a stylish look are therefore
preferred.
Product innovations
Emerging markets
China, India, Russia and Brazil

1.3 Present position of bags indusrty in India:

In 2014, according to the handbag market research, the handbags market in India was
dominated by the purses and wallets segment. In terms of distribution, specialist retailers
accounted for the largest share in the market in India. One of the main drivers of the
handbags market in India is an increase in urbanization and rising income levels, which is
influencing the demand for expensive and premium handbag brands and per-capita
consumption by consumers. Technavio's handbag industry analysis suggests the handbags
market in India will grow at a CAGR of 19.2% and 15.1% in terms of revenue and volume,
respectively, over the period 2014-2019.
This market research report identifies Baggit, Bagzone Lifestyles (Lavie), DA MILANO
LEATHERS (Da Milano), Hidesign, Holii Accessories, Ladida, Sumitsu Apparel (Lino Perros),
Unico Retail (Peperone) and VIP INDUSTRIES (CAPRESE) as the leading players in the
global handbags market in India. It covers the landscape of the handbags market in India and
its growth prospects in the coming years.
The Handbags market in India can be segmented into four: totes, shoulder bags, purses and
wallets, satchels and saddles, as per the handbag market research report. The purses and
wallets held the largest handbag market share in terms of both revenue and volume,
accounting for 34.8% and 35.4% share of the market. Technavio's report, the Handbags
Market in India 2015-2019, has been prepared based on an in-depth market analysis with
inputs from industry experts.

Competitive landscape and key vendors:

• Baggit
• Bagzone Lifestyles (Lavie)
• DA MILANO LEATHERS (Da Milano)
• Hidesign
• Holii Accessories
• Ladida
• Sumitsu Apparel (Lino Perros)
• Unico Retail (Peperone)
• VIP INDUSTRIES (CAPRESE)

Other prominent vendors in the Indian hadbags market include ADMIS, Alessia 74, Anekaant
Design, Anges Bags, Blue & Blues, Bhamini Fashion, Calonge Group, Deeya International,
Giordano Fashions, Home Heart India, Intouch Leather House India (Esbeda), Kara Bags,
KMB Group (Covo), Kara Bags, MANGO Bags, Phive Rivers, The House of Tara and Veda
Lifestyle.

Luxury foreign handbag vendors in India:

• Burberry
• Chanel
• Christian Dior
• OTB Group (Diesel)
• Ermenegildo Zegna
• Etro
• Gucci
• Hermes
• Hugo Bos
• Jimmy Choo
• Just Cavali
• LVMH
• Paul Smith
• Tod's

Market driver:

• Increased urbanization and rise in disposable income

• For a full, detailed list, view our report

Market challenge:

• Lack of industry status to the luggage industry

• For a full, detailed list, view our report

Market trend:

• Growing social media adoption by retailers

• For a full, detailed list, view our report
 1.4 Problems faced by bags indusrty:

Cotton industry is one of the most booming sectors in India today & cotton
bags manufacturers are taking advantage of it. However it still has some
fundamental problems, which still exists. The various different players in
this sector are coming up with innovative, as well as, unique solutions to
these problems in order to take advantage of this booming economy that
is India. Here’s a list of those problems & solutions that we find in this
industry today-

The problems faced by cotton bags manufacturers of the cotton

textile industry in India:

• Long staple cotton is not yet well grown in large parts of the country.
• A lot of factories are old. As a result of which productivity has been
lowered. The plants and machinery employed in many of the textile mills
are literally out of date. Having been put to intensive use, they have
deteriorated considerably.
• High price of advanced machinery is an unavoidable constraint for the
procurement of new machinery. As a result, the much-needed replacement
had to be deferred for quite a few years.
• The high cost of production is also a hindrance for the growth of this
important industry.
• There is some serious competition from synthetic fibers like polyester, etc.
• With globalization, there is severe competition in the International Market
from countries like Bangladesh, Japan, China, and Britain, etc.
• Mill-owners experience great difficulties in obtaining the capital needed for
the modernization process.

Problem of banning plastic bags:

There are moments when the routine of business gets impacted by sudden environmental and
external factors that the business has little control over. One such disruption was faced by
consumers and businesses alike on June 23, when the Maharashtra Government announced a
ban on the usage of all single-use plastic bags apart from prohibiting manufacturing and sale of
plastic bags. While the long term benefit of taking a positive step toward a better environment is
laudable, many businesses were left struggling to manage the impact.

While larger retailers quickly shifted to paper bags, smaller neighbourhood retailers struggled
with the change. Restaurants too, who primarily used plastic packaging for home delivery, had to
hurriedly change to aluminium foil and disposable paper options. Perhaps the biggest impact fell
on packaged foods and beverages. Coke and Pepsi will need to quickly address the issue of
PET bottles for smaller formats and have already begun the process of putting in place buyback
options for all their PET bottles. The plastic ban and its likelihood to be replicated in other states
have put the focus on packaging, often the least focussed upon element in the marketing mix
Brands: Facing challenge
Larger retailers and department stores have taken to alternatives like cloth bags across their
stores and home delivery channels. Many consumer durable makers have repositioned their
buyback offers and are putting in place recycling programmes. Beverage makers have begun
printing a buyback value on their PET bottles to comply with new regulations and reduce plastic
waste. In fact PepsiCo and Coke’s primary offering was the single serve, returnable glass bottle
(RGB) till the ’90s, and given the pressure on PET bottles, they are likely to bring back the magic
of RGBs.

Consumers too are rediscovering the value of carrying reusable cloth bags for cost savings and a
better future. But the real opportunity for brands is to use this move to carve out a long term
advantage by working at reducing cost, building more sustainable packaging and aligning with
proactively changing consumer behaviour. There is sizable research indicating that millennial
generation consumers value socially responsible marketing. Millennials also want companies to
involve their customers in their good works. They want an opportunity to give back — whether it’s
with a gift of their time or their money.

Seizing the opportunity:

Moving swiftly and altering the status quo is not just important — it also highlights a brand’s
innovativeness. One recalls the impact the introduction of sachets made to shampoo
consumption in the ’80s — as Cavin Kare’s Chik shampoo in sachets made great headway as
the first mover on the back of its innovation and pricing. But the bigger win presents itself in the
larger area of sustainability. This can come about by taking a lifecycle approach by using
sustainable packaging that focusses on consumption and disposal, starting with the initial design
and continuing through the end of life. Companies will need to focus on right sizing and materials
to best fit, and deliver their products in the most efficient way.

The solution is to deal with plastic waste by adopting technology in collaboration with all
stakeholders: be it more efficient recycling or viable biodegradable alternatives to plastic.

Main pain areas of the industry:

Economic recession
Cyclical fall in travell and tourism industry
Dumping from low cost countries like China
Weak IPR laws in developing countries like India
Volatility in raw materials size
By the impact of rising oil prices, the main raw materials such as fabric and PVC, Pu
film etc prices rose sharply
Current fluctuations
Declining margin or increasing production costs
1.5 Government policies towards industry:

The World Trade Organization estimates that India’s applied most

favored nation import tariffs are 13.4 percent (simple average) and 7
percent (trade-weighted average). The World Bank reports that India’s
applied average tariffs were 6.3 percent.

An integrated goods and services value added tax (IGST) is applied on

all imports into India. IGST is levied on the value of the imported goods
plus any customs duty chargeable on the goods.

The GOI Foreign Trade (Development & Regulation) Act and India’s
Export Import policy govern the import tariffs. The office of the Director
General of Foreign Trade mandates registration for all importers before
engaging in import and export activities.

Tariff rates:

The structure of India’s customs tariff and fees system is complex and
characterized by a lack of transparency in determining net effective
rates of customs tariffs, excise duties, and other duties and charges.
The tariff structure of general application is composed of a basic
customs duty, an "additional duty," a "special additional duty," and an
education assessment ("cess"). The additional duty, which is applied to
all imports except for wine, spirits, and other alcoholic beverages,
is applied on top of the basic customs duty, and is intended to
correspond to the excise duties imposed on similar domestic products.
The special additional duty is a four percent ad valorem duty that applies
to all imports, including alcoholic beverages, except those imports
exempted from the duty pursuant to an official customs notification. The
special additional duty is calculated on top of the basic customs duty
and the additional duty. In addition, there is a three percent education
cess (surcharge) applied to most imports, except those exempted from
the cess pursuant to an official customs notification. India charges the
cess on the total of the basic customs duty and additional duty (not on
the customs value of the imported product). A landing fee of one percent
is included in the valuation of all imported products unless exempted
through separate notification. While India publishes applied tariff and
other customs duty rates applicable to imports, there is no single official
publication publicly available that includes all relevant information on
tariffs, fees, and tax rates on imports. However, as part of its
computerization and electronic services drive, in 2009 India initiated a
web-based Indian Customs Electronic Commerce/Electronic Data
Interchange Gateway, known as ICEGATEIt provides options for
calculating duty rates, electronic filing of entry documents (import goods
declarations) and shipping bills (export goods declarations), electronic
payment, and online verification of import and export licenses. In
addition to being announced with the annual budget, India’s customs
rates are modified on an ad hoc and arbitrary basis through notifications
in the Gazette of India and contain numerous exemptions that vary
according to the product, user, or specific export promotion
program, rendering India’s customs system complex to administer and
open to administrative discretion.

India’s tariff regime is also characterized by pronounced disparities

between bound rates (i.e., the rates that under WTO rules generally
cannot be exceeded) and the most favored nation (MFN) applied rates
charged at the border. According to the latest WTO data, India’s
average bound tariff rate is 48.5 percent, while its simple MFN average
applied tariff is 13.4 percent. Given this large disparity between bound
and applied rates, U.S. exporters face tremendous uncertainty because
India has considerable flexibility to change tariff rates at any time. India’s
average WTO-bound tariff for agricultural products is 113.5 percent.
Applied rates are also relatively high and on a trade-weighted basis, the
average agricultural tariff is 47.2 percent. In addition, while India has
bound all agricultural tariff lines in the WTO, over 25 percent of India’s
non-agricultural tariffs remain unbound (i.e., there is no WTO ceiling on
the rate).

Despite its goal of moving toward the Association of Southeast Asian

Nations (ASEAN) tariff rates (approximately 5 percent on average), India
has not systematically reduced the basic customs duty in the past six
years. India also maintains very high tariff peaks on several goods,
including flowers (60 percent), natural rubber (70 percent), automobiles
and motorcycles (60 percent to 75 percent), raisins and coffee (100
percent), alcoholic beverages (150 percent), and textiles (some ad
valorem equivalent rates exceed 300 percent). Rather than liberalizing
its customs duties, India instead operates several complicated duty
drawbacks, duty exemption, and duty remission schemes for imports.
Eligibility to participate in these schemes is usually subject to several
conditions. India maintains very high basic customs duties, in some
cases exceeding 20 percent, on drug formulations, including life-saving
drugs and finished medicines listed on the World Health Organization’s
list of essential medicines.

India also imposes a 10 percent basic customs duty, for medical

equipment and devices, such as pacemakers, coronary stents and stent
grafts, and surgical instruments; and for parts of medical devices, such
as medical grade polyvinyl chloride sheeting for the manufacture of
sterile Continuous Ambulatory Peritoneal Dialysis bags for home dialysis
Essentially impeding some of India’s climate goals, customs tariffs on
some products were increased in 2016 to include Industrial solar water
heaters - from 7.5 percent to 10 percent and solar tempered glass/solar
tempered (anti-reflective coated) glass for use in manufacture of solar
cells/modules/panels - from zero to five percent. Additionally, India
raised tariffs on specified telecommunication equipment - from zero to
7.5/10 percent, and on E-readers - from zero to 7.5 percent.

Many of India’s bound tariff rates on agricultural products are among the
highest in the world, ranging from 100 percent to 300 percent. While
many Indian applied tariff rates are lower (averaging 32.7 percent on
agricultural goods), they still present a significant barrier to trade in
agricultural goods and processed foods (e.g., potatoes, apples, grapes,
canned peaches, chocolate, cookies, and frozen French fries and other
prepared foods used in quick-service restaurants). The large gap
between bound and applied tariff rates in the agriculture sector
allows India to use tariff policy to make frequent adjustments to the level
of protection provided to domestic producers, creating uncertainty for
importers and exporters. For example, in January 2013, India issued a
customs notification announcing an immediate doubling of the tariff on
imports of crude edible oils.
In July 2017, India implemented the Good and Services Tax (GST)
system to unify Indian states into a single market and improve the ease
of doing business. The GST is designed to simplify the movement of
goods within India, but it also applies to imports. Before the GST
implementation, imports could be subject to an "additional duty," a
"special additional duty," an education cess (tax), state level value
added or sales taxes, the Central Sales Tax, and/or various other local
taxes and charges. The new GST system subsumed a number of these
charges, including the "additional duty" and the "special additional duty,"
that were previously levied on imports into the single GST. The tariff (or
"basic customs duty") continues to be assessed on imports separately
and has not been incorporated into the GST.
The GST is a two-part system: A State and Central GST that is levied
simultaneously on every transaction of goods and services in India, and
an "Integrated GST" that covers goods and services sold between all
Indian states. Both the Integrated GST and the GST are applied to
imported goods. Under the new system, goods and services are taxed
under four basic rates – five percent, 12 percent, 18 percent and 28
percent. Some items, like vegetables and milk, have been exempted
from the GST. The price of most goods and services increased in the
immediate aftermath of the tax, and as expected, economic growth
slowed for several months following GST implementation.

Classification:
As there are thousands of goods that are imported into India, it is not
possible to prescribe rates of duty for each type of merchandise. The
basic applicable legislation is the Indian Customs Act of 1962, and the
Customs Tariff Act of 1975. The Customs Act of 1962 was created to
control imports and prevent Illegal imports and exports of goods. The
Customs Tariff Act specifies the tariffs rates and provides for the
imposition of anti-dumping and countervailing duties.
The Indian customs classification on tariff items follows the Harmonized
Commodity Description and Coding System (Harmonized System or
HS)
Customs uses six-digit HS codes, theDirectorate-General of Commercial
Intelligence and Statistics (DGCI&S) uses eight-digit codes for statistical
purposes, and the Directorate General of Foreign Trade (DGFT) has
broadly extended the eight-digit DGCI&S codes up to 10 digits.
It is also worth noting that the excise authorities use HS codes for
classifying goods to levy excise duty (manufacturing taxes) on goods
produced in India.

How customs duty is calculated:

All goods imported into India are subject to duty. There are several
factors that go into calculating customs duty, including:

Basic custom duty:

This duty is levied either as 1) a specific rate based on the unit of the
item (weight, number, etc.), or more commonly, 2) ad-valorem, based on
the assessable value of the item. In some cases, a combination of the
two is used

Social welfare surcharge:

Social Welfare Surcharge introduced in the Budget 2018 is levied in
place of education Cess. The rate is 10% of the value of goods.

Integrated goods and service tax:

GST is applicable on all imports into India in the form of levy of IGST.
IGST is levied on the value of imported goods + any customs duty
chargeable on the goods.
Value of imported Goods + Basic Customs Duty + Social Welfare
Surcharge = Value on which IGST is calculated

Value x IGST Rate = IGST Payable

GST compensation cess:

GST Compensation Cess is a levy which will be applicable in addition to

the regular GST taxes. GST Cess is levied on supply of certain notified
goods – mostly belonging to the luxury and demerit category.

Anti dumping duty:

This is levied on specified goods imported from specified countries,

including the United States, to protect indigenous industry from injury.

Safeguard duty:

The Indian government may by notification impose a safeguard duty on

articles after concluding that increased imported quantities and under
current conditions will cause or threaten to cause serious injury to domestic
industry.

Customs handling fee:

The Indian government assesses a 1% customs handling fee on all imports

in addition to the applied customs duty.

Total duty:

Therefore, for most goods, total duty payable = BCD + Customs Handling
Fee.

Tariff rates, excise duties, regulatory duties, and countervailing duties are
revised in each annual budget in February, and are published in various
sources, including BIGs Easy Reference Customs Tariff edition. A copy of
this book is kept at the USA Trade Information Center in Washington DC
and more specific information from this guide is available to U.S.
Companies by calling 800-USA-TRADE.

While the Indian government publishes customs tariffs rates there is no

single official publication that has all information on tariffs and tax rates on
imports.
Duty exemption plan:

The Duty Exemption Plan enables duty free import of inputs required for
export production. An advance license is issued under the duty exemption
plan. The Duty Remission Plan enables post export replenishment
remission of duty on inputs used in the export product. Duty Remission
plan consists of (a) Duty-Free Replenishment Certificate Scheme (DFRC)
and (b) Duty Entitlement Passbook Scheme (DEPB). DFRC permits duty
free import charges on inputs used in the export product. The government
has wide discretionary power to declare full or partial duty exemptions “in
the public interest” and to specify conditions such as end-use
provisions. Almost half of India’s total inputs enter
under concessional tariffs, though the use of exemptions
is falling in tandem with the tariff-reduction program.

1.6Future prospects of bags indusrty:

In India as there is lot of travelling from local to local and also many
international tourism due to which usage of bags and luggage has
increased.

It contributes to atleast 2 percent for Indias economic GDP.

A lot of trade, export and import of bags has increased which helped labour
giving a oppurtunity to them to gain income.

The sector is expected to grow 20 percent of it to touch US$ 750 million.

As there is also increase in educational institutionsifor which students carry

bags the sales of bags also increased

The bag consumption is expected to jump from 70 percent in 2010 to 80%

in 2020

[Link] competitors in Indian bags indusrty:

Hidesign company:

Hidesign is a company based in Pondicherry which manufactures leather goods and

accessories. It was founded by Dilip Kapoor, the current president, in the year 1978. Initially the
company was known as Hide Design which was later modified to its current name. In the
beginning it was sold only outside India. Much later in 1999 it entered the Indian market. Alberto
Ciaschin, the famous Italian designer is also a part of the Hidesign designing team as the lead
designer since 2004. The company started building alliances with various other groups to
expand from 2007. The same year Louis Vuitton invested in Hidesign. Recently in 2009 the
Future Group also tied up with Hidesign to bring the Holii range.

Hidesign sells more than 40,000 bags a month. It also recorded over 35 % growth in 2013, which
is much higher than its average growth rate of 20 % a year. Hidesign currently has priced its
products between Rs 4,000 and Rs 25,000 in the Indian market.

The positive response in sales has made the company think about expansion at a rate of 20 new
stores every year. Hidesign is aiming at Rs 600 crores turnover by the year 2018 from the
present figure of Rs 150 crores in 2013. In 2013 the brand has received the Pitch Brands 50
Awards.

Lavine company:

Lavie is another lifestyle brand which launched its first collection of bags in 2010. This brand is a
part of Planet Retail which is a company based in Gurgaon. It aims at a client base that is young
and fashionable. Presently in India, Lavie handbags are sold in 20 cities. Their product comes in
a wide range of colours to satisfy the taste of all types of clients. Presently the product is
available at Samsonite and Bagzone stores as well as Shoppers Stop, Debenhams, Central,
Lifestyle, Pantaloons and other leading retail chains. Lavie has plans of expansion and aims to
generate Rs 120 Crores by 2015-16.

Caprese company:

Caprese is another new brand which is imported and marketed in India by the reputed VIP
Industries. Caprese was launched in 2012. The brand entered the market to fulfil the gap
between high end luxury products and low priced inferior quality handbags. Caprese is marketed
as a mid-premium category product. Caprese handbags are available in over 100 cities in retail
outlets as well as VIP Lounges which number around 400. The pricing of the products is also
competitive and starts from Rs 2,000 and goes up till Rs 7,000. The owners expect that in the
long run the sales of Caprese will equate the sales of luggage as the market for handbags is
relatively vast.

Baggit:

Baggit was launched in the year 1990 by Nina Lekhi. Initially it was sold at INXS, Mumbai. In
2000 it expanded and was available in retail stores in Mumbai and Delhi. Peta Proggy 2007 was
awarded to the brand in 2007 since it doesn’t sell any leather products. Presently it has stores
in Pune market city, Amanora Pune, Atria mall, Mumbai, Infinity Malad Mumbai, Vashi Inorbit
Mumbai, Neptune Mall Bhandup Mumbai, Inorbit Mall Bangalore, Jayanagar Bangalore and
Kormangala Bangalaore. It is estimated that the brand is worth Rs 50 crores in the market
currently.

Ladida:

Ladida is another player in this market which was established almost a decade ago in
2001. Going by the recent trend of veganism this brand is aware of the cruelty against animals
and uses only PU industrial synthetic leather and from Vegan leather. Its aim is to create a world
of fashion devoid of exploitation of animals. Vegan leather is faux leather made of intricate cotton
threads as well as natural wastes. Ladida believes that its USP is its unique design which is
taken care of by its panel of 15 designers.
2.1History of the company:

Wesco bags [Link] was established in the year 1989 at vijayawada by Mr Abdul saleem and Mr
Abdul Hakeem who both were brothers. It has its main branch in vijayawada and also other sales
branch in vijayawada and other branch in guntur. In the year 1989 it has started with small
startup of selling bags and now it has spread all over andhra pradesh. Expected time for the firm
to reach the Break Even Point (BEP) is 3 years. It has annual turnover of Rs 10crores. W ith
5
years of its operations in the field it has attained a good market share attracting
wide range of customers by providing better quality products. The product made
in the firm are provided with a special identification mark compromising of SSJ
it makes unique identification mark product in order to differentiate in form the
peers in the market.

2.2 Vision of the company:

Our vision serves as the framework for our roadmap and guides every aspect by
describing What we need to accomplish in order to continue achieving
sustainability, quality [Link] a responsible citizen that makes a difference
by helping build and support sustainable communities.

2.3 Mission of the company:

Apart from improving company’s goodwill the following are the

major missions of the company: -

a) One of the major bags dealers company in Andhra Pradesh.

b) One of the biggest retail chains in bags market in south India.
c) Our vision is to be a successful, world-standard company, working
closely with business and
organization to improve their results
d) we will achieve this by understanding clients need and proving
them their best quality product
and service that exceed their expectation.

2.4 Objectives of the Company: -

 a) To provide the best quality products
b) Increase sales of the company in other localities
c) To increase the range of products it offers
d) To reach all the potential customers in the areas it offers services
e) To continue to invest in technologies to keep ourselves future ready
f) To ensure commitment of quality.
g) To expand the existing product portfolio.
h) To provide a safe workplace and promote healthy work habits.
2.5 Board of management:
Mr Abdul Hakeem: Founder, Chairman
Mr Abdul Saleem : Founder, Chairman and Chief managing director
Mr Safwan : Chairman and Sales manager

Mr Shamnaaz : Hr manager

Mr Subair : Sales and marketing manager

2.6 Strategies of the Company: -

Marketing is a function of business that determines the needs of the
consumer. It also identifies target markets as well as applies services and
products to serve such markets. In addition, it involves the promotion of
services and products within the marketplace. individuals who are
planning to launch a business no matter how big or small should learn
about marketing. Marketing is crucial to the success of a business, with
its main focus on customer satisfaction, quality, and consumer value.
Marketing Mix is one of the most commonly used strategies. It blends
integral variables together to come up with ideal results. It is composed
of four variables referred to as the 4 Ps of Marketing:
 2.6.1 Product Strategies: -
A product is a good or service that a business owner provides for sale to
his target market. When it comes to developing a product, the design,
quality, packaging, features, after-sales service, and customer service
should be considered. If you want to start a business, you need to know
what you are going to sell. The 4 Ps of Marketing may seem easy, but
they can also be difficult. You may think that you can just sell any product
that you think appeals to your target audience. However, you need to
research and study the market before you can actually figure out what to
sell. You should think carefully of what you are going to offer. Do not
forget to define the characteristics of your service and see to it that you
meet the demands and needs of your customers. Keep in mind that
warranty, service, and support are very important.

COMPANY PRODUCTS: -
The company produces wide range of products to its customers
namely: -
School bags
Hand bags
Waist belts
Men wallets
Luggage bags
Suit cases
Women purses
The term product strategy refers to production strategy brought for long term
action plans, they are made of achieving the main objective of organization.
Production strategies tell us what the production department must do to achieve
the top aims of the organization. It provides a road map for the production
department.

2.6.2 Promotion Strategies: -

Promotion is all about the act of communicating the values and benefits
of your products to your customers. It involves the use of different
methods, such as direct marketing, sales promotion, advertising, and
personal selling to persuade customers to your business. If you want to
save money, you should consider self-promotion. Also, when it comes to
creating a promotion for your business, you should motivate your target
market. Put yourself in their shoes so you can find out how they view
your business. Keep in mind that advertising, publicity, and public
relations will keep your service or product out front and ahead of your
competition.
All these factors are integral parts of promotion. These 4 Ps of Marketing
are very helpful when it comes to starting a business. You need to have
the necessary knowledge and skills in order to be successful in a certain
venture. By learning about the 4 Ps of Marketing, you can avoid typical
marketing pitfalls and have a successful business.

2.6.3 Pricing Strategy of the Company: -

The price is the amount of money that customers have to pay to purchase
products or avail of services. There are several factors that you have to
consider when it comes to price. These include discounting, price setting,
credit collection, and cash and credit purchases.
Before you invest in a new venture, see to it that you have carefully
defined the 4 Ps of Marketing. Otherwise, you will not be able to achieve
 stellar results. You should not forget to practice ethics in pricing either.
You can have a poll or send out questionnaires to help you determine
your price. Nonetheless, you should neither set your price too low nor too
high.
If your price is too low, you may lose potential customers who are wary
of bargain prices. If your price is too high, you may not attract customers
who are on a budget. Hence, you should base your prices on the range of
services that you offer as well as the level of your education and expertise.
Do not forget to consider taxes and overhead among other important
things.

2.6.4 Profit Oriented Objective: -

• To achieve a target on return on investment

• To maximize profits

2.6.5 Sales Promotion Objective: -

• In market shares.
• Maintaining market Growth in sales

2.6.6 Promotional Activities Percentage:

• Sales promotion 35%
• Personal selling 3%
• Publicity 17%
• Advertising 45%

2.6.7 Distribution Strategies (place): -

 The term distribution strategy refers to” a plan created by the
management of manufacturing business that specifies how the firm intends
to transfer its products to intermediaries and consumers. Larger companies
involved in making products will usually also put together a detail
production distribution strategy to guide its entry into the intended market.

2.7 Milstones of the company:

2.8 Organizational Structure:

DIRECTORS

GENERAL
MANAGER

Sales & Accounts & Logistics General

Marketing Finance Administration
& H.R

Floor
Managers
 Sub Staff

Introduction to Brand awareness:

Brand awareness refers to the extent to which customers are able
to recall or recognise a brand. Brand awareness is a key consideration
in consumer, advertising, brand management strategy development. The consumer's ability to
recognise or recall a brand is central to purchasing decision-making. Purchasing cannot
proceed unless a consumer is first aware of a product category and a brand within that
category. Awareness does not necessarily mean that the consumer must be able to recall a
specific brand name, but he or she must be able to recall sufficient distinguishing features
for purchasing to proceed. For instance, if a consumer asks her friend to buy her some gum
in a "blue pack", the friend would be expected to know which gum to buy, even though
neither friend can recall the precise brand name at the time.
Different types of brand awareness have been identified, namely brand recall and brand
recognition. Key researchers argue that these different types of awareness operate in
fundamentally different ways and that this has important implications for the purchase
decision process and for marketing communications. Brand awareness is closely related to
concepts such as the evoked setand consideration set which describe specific aspects of the
consumer's purchase decision. Consumers are believed to hold between three and seven
brands in their consideration set across a broad range of product categories.[2] Consumers
will normally purchase one of the top three brands in their consideration set.

Brand awareness is a key indicator of a brand's competitive market performance. Given the
importance of brand awareness in consumer purchasing decisions, marketers have
developed a number of metrics designed to measure brand awareness and other measures
of brand health. These metrics are collectively known as Awareness, Attitudes and Usage
(AAU) metrics.

To ensure a product or brand's market success, awareness levels must be managed across
the entire product life-cycle - from product launch through to market decline. Many
marketers regularly monitor brand awareness levels, and if they fall below a predetermined
threshold, the advertising and promotional effort is intensified until awareness returns to
the desired level.

Importance of brand awareness:

Brand awareness is related to the functions of brand identities in consumers’ memory and
can be measured by how well the consumers can identify the brand under various
conditions. Brand awareness is also central to understanding the consumer purchase
decision process. Strong brand awareness can be a predictor of brand success It is an
important measure of brand strength or brand equity and is also involved in customer
satisfaction, brand loyalty and the customer's brand relationships.

Brand awareness is a key indicator of a brand's market performance. Every year advertisers
invest substantial sums of money attempting to improve a brand's overall awareness levels.
Many marketers regularly monitor brand awareness levels, and if they fall below a
predetermined threshold, the advertising and promotional effort is intensified until
awareness returns to the desired level. Setting brand awareness goals/ objectives is a key
decision in marketing planning and strategy development.

Brand awareness is one of major brand assets that adds value to the product, service or
company Investments in building brand awareness can lead to sustainable competitive
advantages, thus, leading to long-term value.

Types of brand awareness:

Marketers typically identify two distinct types of brand awareness; namely brand recall (also
known as unaided recall or occasionally spontaneous recall) and brand recognition(also
known as aided brand recall) These types of awareness operate in entirely different ways
with important implications for marketing strategy and advertising.
Brand recall:

Brand recall is also known as unaided recall or spontaneous recall and refers to the ability of
the consumers to correctly elicit a brand name from memory when prompted by a product
category. Brand recall indicates a relatively strong link between a category and a brand
while brand recognition indicates a weaker link. When prompted by a product category,
most consumers can only recall a relatively small set of brands, typically around 3–5 brand
names. In consumer tests, few consumers can recall more than seven brand names within a
given category and for low-interest product categories, most consumers can only recall
one or two brand names.

Research suggests that the number of brands that consumers can recall is affected by both
individual and product factors including; brand loyalty, awareness set size, situational,
usage factors and education level. For instance, consumers who are involved with a
category, such as heavy users or product enthusiasts, may be able to recall a slightly larger
set of brand names than those who are less involved.

Brand recognition:

Brand recognition is also known as aided recall and refers to the ability of the consumers to
correctly differentiate the brand when they come into contact with it. This does not
necessarily require that the consumers identify the brand name. Instead, it means that
consumers can recognise the brand when presented with it at the point-of-sale or after
viewing its visual [Link] contrast to brand recall, where few consumers are able to
spontaneously recall brand names within a given category, when prompted with a brand
name, a larger number of consumers are typically able to recognise it.

Top of mind awareness;

Consumers will normally purchase one of the top three brands in their consideration
set. This is known as top of mind [Link], one of the goals for most
marketing communications is to increase the probability that consumers will include
the brand in their consideration sets.
By definition, top-of-mind awareness is "the first brand that comes to mind when a
customer is asked an unprompted question about a category. When discussing top-
of-mind awareness among larger groups of consumers (as opposed to a single
consumer), it is more often defined as the "most remembered" or "most recalled"
brand name.
A brand that enjoys top-of-mind awareness will generally be considered as a genuine
purchase option, provided that the consumer is favourably disposed to the brand
name.[15]Top-of-mind awareness is relevant when consumers make a quick choice
between competing brands in low-involvement categories or for impulse type purchases

Marketing implications of brand awareness:

Clearly brand awareness is closely related to the concepts of the evoked set (defined
as the set of brands that a consumer can elicit from memory when contemplating a
purchase) and the consideration set (defined as the “small set of brands which a
consumer pays close attention to when making a purchase decision”). One of the
central roles of advertising is to create both brand awareness and brand image, in
order to increase the likelihood that a brand is included in the consumer's evoked set
or consideration set and regarded favourably.
Consumers do not learn about products and brands from advertising alone. When
making purchase decisions, consumers acquire information from a wide variety of
sources in order to inform their decisions. After searching for information about a
category, consumers may become aware of a larger number of brands which
collectively are known as the awareness set. Thus, the awareness set is likely to
change as consumers acquire new information about brands or products. A review of
empirical studies in this area suggests that the consideration set is likely to be at
least three times larger than the evoked [Link] alone is not sufficient to
trigger a purchase, consumers also need to be favourably disposed to a brand before
it will be considered as a realistic purchase option.
The process of moving consumers from brand awareness and a positive brand attitude
through to the actual sale is known as conversion. While advertising is an excellent tool for
creating awareness and brand attitude, it usually requires support from other elements in
the marketing program to convert attitudes into actual sales. Other promotional activities,
such as telemarketing, are vastly superior to advertising in terms of generating sales.
Accordingly, the advertising message might attempt to drive consumers to direct sales call
centres as part of an integrated communications strategy. Many different techniques can
be used to convert interest into sales including special price offers, special promotional
offers, attractive trade-in terms or guarantees.

Measuring brand awareness:

Just as different types of brand awareness can be identified, there are a variety of
methods for measuring awareness. Typically, researchers use surveys, carried out on
a sample of consumers asking about their knowledge of the focus brand or category.

Two types of recall test are used to measure brand awareness:

Unaided recall tests: where the respondent is presented with a product category and asked to
nominate as many brands as possible. Thus, the unaided recall test provides the respondent
with no clues or cues. Unaided recall tests are used to test for brand recall.
Aided recall test: where the respondent is prompted with a brand name and asked whether they
have seen it or heard about it. In some aided recall tests, the respondent might also be asked to
explain what they know about the brand e.g. to describe package, colour, logo or other
distinctive features. Aided recall tests are used to test for brand recognition.
Other brand-effects tests: In addition, to recall tests, brand research often employs a battery of
tests, such as brand association tests, brand attitude, brand image, brand dominance, brand
value, brand salience and other measures of brand health. Although these tests do not explicitly
measure brand awareness, they provide general measures of brand health and often are used in
conjunction with brand recall tests.

Brand awareness and the hierarchy of effects:

Brand awareness is a standard feature of a group of models known as hierarchy of

effects models. Hierarchical models are linear sequential models built on an
assumption that consumers move through a series of cognitive and affective stages,
beginning with brand awareness (or category awareness) and culminating in the
purchase decision. In these models, advertising and marketing communications
operate as an external stimulus and the purchase decision is a consumer response.
A number of hierarchical models can be found in the literature including DAGMAR
and AIDA. In a survey of more than 250 papers, Vakratsas and Ambler (1999) found
little empirical support for any of the hierarchies of effects. In spite of that, some
authors have argued that hierarchical models continue to dominate theory, especially
in the area of marketing communications and advertising.
The hierarchy of effects developed by Lavidge in the 1960s is one of the original
hierarchical models. It proposes that customers progress through a sequence of six
stages from brand awareness through to the purchase of a product.
Stage 1: Awareness - The consumer becomes aware of a category, product or brand
(usually through advertising)

Stage 2: Knowledge - The consumer learns about the brand (e.g. sizes, colours,
prices, availability etc)

Stage 3: Liking - The consumer develops a favourable/unfavourable disposition

towards the brand

Stage 4: Preference - The consumer begins to rate one brand above other
comparable brands

Stage 5: Conviction - The consumer demonstrates a desire to purchase (via

inspection, sampling, trial)

Stage 6: Purchase - The consumer acquires the product

Creating and maintaining brand awareness:

Brand advertising can increase the probability that a consumer will include a given
brand in his or her consideration set. Brand-related advertising expenditure has a
positive affect on brand awareness levels. Virtually anything that exposes consumers
to a brand increases brand awareness. “Repeat brand exposure in stores improves
consumers' ability to recognize and recall the brand.” Increased exposure to brand
advertising can increase consumer awareness and facilitate consumer processing of
the included information, and by doing this it can heighten consumers brand recall
and attitude towards the brand.
 Brand marketers must consider how to manage awareness throughout a product's entire life-cycle

To increase the probability of a product's acceptance by the market, it is important to

create high levels of brand awareness as early as practical in a product or brand's
life-cycle. To achieve top-of-mind awareness, marketers have traditionally, relied on
intensive advertising campaigns, especially at the time of a product launch. To be
successful, an intensive campaign utilises both broad reach(expose more people to
the message) and high frequency (expose people multiple times to the message).
Advertising, especially main media advertising, was seen as the most cost efficient
means of reaching large audiences with the relatively high frequency needed to
create high awareness levels. Nevertheless, intensive advertising campaigns can
become very expensive and can rarely be sustained for long periods. Alhaddad
(2015) indicates that advertising awareness plays as a good source of meaning and
identity for a brand by enhance brand awareness and brand image in social media.
As new products enter the market growth stage, the number of competitors tends to
increase with implications for market share. Marketers may need to maintain
awareness at some predetermined level to ensure steady sales and stable market
share. Marketers often rely on rough and ready 'rules-of-thumb' to estimate the
amount of advertising expenditure required to achieve a given level of awareness.
For instance, it was often held that to increase brand awareness by just one per cent,
it was necessary to double the dollars spent on advertising.
When a brand becomes established and attains the desired awareness levels
(typically outlined in the marketing plan), the brand advertiser will shift from an
intensive advertising campaign to a reminder [Link] objective of a reminder
campaign is simply to keep target audiences aware of the brand's existence and to
introduce new life into the brand offer. A reminder campaign typically maintains
broad reach, but with reduced frequency and as a consequence is a less expensive
advertising option. Reminder advertising is used by established brands, often when
they are entering the maturity stage of the lifecycle. In the decline stage, marketers
often shift to a caretaker or maintenance program where advertising expenditure is
cut back.

Popular examples of brand advertising and promotion:

Coca-cola “Share a coke campaign”

Coca-Cola is a well-established brand with a long history and one that has achieved
market dominance. For any brand, such as Coke, that controls some 70 percent of
market share, there are relatively few opportunities to enlist new customers. Yet
Coca-Cola is always on the lookout for novel communications that not only maintain
its brand awareness, but that bring the brand to the attention of new audiences. The
company launched a campaign which became known as "Share a Coke", with the
campaign objectives; "to strengthen the brand’s bond with Australia’s young adults –
and inspire shared moments of happiness in the real and virtual worlds.”The
campaign, originally launched in Australia, became so successful that it was
subsequently rolled out to other countries.
The concept was to introduce personalized Coke bottles or cans. Popular names were
written in a 'look-alike Spencerian script' which is part of the Coke brand's distinctive
brand identity. The campaign organisers seeded social media by targeting "opinion
leaders and influencers to get them to […] lead the conversation and encourage
others to seek out 'Share a Coke' for themselves”.Within days celebrities and others
with no connection to Coke were spreading the concept across social networks. The
campaign extended the audience reach as more people were exposed to the
messages. According to Coke's creative team, "That [Australian] summer, Coke sold
more than 250 million named bottles and cans in a nation of just under 23 million
people". This campaign helped Coke extend its awareness across a broader age
profile as they interacted with each customer on a personal level.

Ronald McDonald and other anthropomorphic brand characters:

Consumers experience few difficulties assigning a personality to a brand and
marketing communications often encourage consumers to think about brands as
possessing human characteristics. When brands are infused with human-like
characteristics, it can assist in communicating a brand's values and creating
distinctive brand identities that serve to differentiate an offering from competing
brands. "In an increasingly competitive marketplace, [some] companies rely on brand
characters to create awareness, convey key product/service attributes or benefits,
and attract consumers" (Keller, 2003).
The use of anthropomorphic characters has a long history. For example, the Michelin
man, employed as a memorable character to sell Michelin car tyres, was introduced
as early as 1894. These characters benefit the brand by creating memorable images
in the consumer’s mind while conveying meanings that are consistent with the
brand's values.
McDonald's created a similar anthropomorphic brand character known
as Mcdonald as part of its brand identity. For younger consumers, Ronald McDonald
injects a sense of fun and mystery into the McDonald's brand. For parents, the
character clearly signals that McDonald's is a family friendly venue. Characters help
to carry the brand's identity and can be seen as non-human "spokes-character",
contributing to a strong brand differentiation. The likeability of the brands character
can "positively influence attitudes towards the brand and increase [consumers']
purchase intention"

Brand awareness done in Wesco company [Link]:

Weco company is a huge collection of various brands of bags, belts, wallets etc.. It
maintains
Its brand awareness by letting the consumers know all the positive as well aas
negative sides of the company. It explains the consumers in different and
understandable manner to consumers how the product is used . They give the
assurance and guarantee to the consumers about their brand. They also guide their
consumers when ever there is any default in product(in rare cases).
4.1 NEED OF THE STUDY: -
Every business organization does marketing in one sense or the other.
Marketing is one area which needs continuous reviews, appraisal and
formation of appropriate strategies, according to the marketing trends and
economic conditions. The various elements like brand management, brand
perception, product features, pricing strategies, promotion strategies,
promotion tactics and distribution activities have a huge impact on the
targeted audience. Thus, every firm has to frame its 4Ps i.e., Product, Price,
Place and Promotion in an effective manner. Hence, I felt necessary to
study how one has to frame these 4Ps so that they can make desired impact
on the prospective customers.

4.2 OBJECTIVE OF THE STUDY: -

The following are the study objectives:
1. To find out how much influence does the brand exert on the customers.
2. To study the impact made by various components of marketing mix.
3. To find out how the company manages the consumer perception on
brand.
 4. To know how the customers, perceive the brand as well as the product.

4.3 METHODOLOGY OF STUDY: -

Once the problem of research has been identified, researcher had to

decide the type of research, sample size, technique and procedure and
search for the sources that are available to collect the data required to
solve the research problem.

4.3.1 SOURCES OF DATA COLLECTION: -

Primary Data:

Primary data was collected by me from the management of the company

through direct contact and interaction with the management of the firm
and also present customers of the company.

Secondary Data:

The secondary data was collected by me through various sources such as

company records, company journals, business weeklies, magazines,
internet, etc.

4.3.2 Methods of Data Collection: -

The method of the data collection is STRUCTURED PERSONAL
INTERVIEW. The tool of the data collection is Questionnaire.

A. Data Collection Instrument: -

The questionnaire prepared was well structured. It was used to

collect vital information from the consumers. The questionnaire had
close ended with multiple choices. They were framed according to
the objectives set.
4.3.3 Sampling Plan: -
Sample Area: -

The survey was conducted in the Vijayawada city of Andhra

Pradesh.

Sampling Unit: -

The consumers of Wesco company Pvt. Ltd. Vijayawada constitute

the sampling unit.

Sample Size: -

The research was based on the data received from 100 customers out
of 200 customers at Wesco company Pvt. Ltd. Vijayawada, during
the study.

Sampling Method: -

The method of sampling for my study is convenience sampling.

C. Data Analytical methods: -

Analysis of data collected is descriptive. The analysis was done on

the basis of the following: -
a.) Percentage method.

b.) Graphical method.

a) Percentage Method: -

This kind of method is used to make comparison between two or

more series of data these are used to determine relationships
 between the series and through this it becomes easier. percentage
analysis may be expressed as: -

Percentage=no of respondents/total no of
respondents*100

b) Graphical Method: -

It refers to the presentation of data in the forms of graphs. It helps

in easy understanding of series of data.

4.4 PERIOD OF STUDY: -

The entire study was conducted within a period of 45 days and hence
the study is limited to time restriction.

4.5 SCOPE OF THE STUDY: -

The scope of the study is confined to Vijayawada. This report will
help the company to know the leading brands in gold industry, to
know the customer preferences, to know the media which
influences the customers, to know whether the new products are
accepted by the existing customers or not and to know why the
customers choose the competitors brand. This survey also covers
aspects such as opinions, problems and suggestions to increase the
satisfaction of consumer.

4.6 LIMITATIONS OF THE STUDY: -

• The first limitation to the study is the limited time available to

carry out the study. A period of 45 days is no way enough to carry
out a proper research and come out with proper results.
• The second limitation is location of the survey, the survey has been
located at the city Vijayawada and its surroundings in the state of
Andhra Pradesh, which is a very small location. Thus, this survey
results can’t be taken as complete the non-availability of proper
information on the addresses on the jewellery owners was under
the major limitation of the study as this had its effect on the sample
size.
• The next limitation may be the human limitation, there may be
faults here and there in the report because of certain human errors.