Friday, January 15, 2010

Trent Limited - A Strategic Business Unit of Tata Group

Priyanka Datta | IBS Hyderabad

TATA group’s entry in the retail sector through TRENT has been silent but strong. It was the brain child of Simone Tata, the lady behind the success of Lakme.

The marketing strategy of Trent can be studied in two phases:
• Phase I: the start of the company, its journey to its current status in the market and
• Phase II: the future

The story commenced in 1996 when Simone Tata decided to sell 50% stake in LAKME to HLL and out of its proceeds created TRENT LIMITED by acquiring Littlewoods, a London based retail chain in 1998. Littlewoods was renamed as what we know as “Westside”. Since its inception, Trent Limited has been on the major expansion mode and has targeted metro cities in India.

The “WESTSIDE” Story
Westside is the flagship brand of Trent in apparel and accessories retailing. The value chain was already in place as Littlewoods had expertise in primary activities like designing, producing and delivering the merchandise. They just needed to blend them into the Indian context, which was successfully done by keeping track of the pulse of the market, daily sales figures and the latest trends in vogue. Strategic marketing plan for Trent targeted youth in the metro cities. This was very well reflected when famous cricketer Yuvraj Singh, who was considered the Face of the Youth, was made the brand ambassador of Westside during its launch. Choosing a cricketer for an “apparel” ad led to easy brand recall and rescued the brand from falling into the trap of cluttered advertisements. The shopping experience was enhanced with each Westside store having elegant interiors, sprawling space and courteous store staff, thus making it a much sought after shopping destination.

Major marketing plans focused to improve the reach of the brand by setting in smaller formats of Westside stores like “Westside Girl”, “Westside Woman” in order to make them popular in Tier II, Tier III cities. There are currently 35 Westside stores in 20 cities in India. The reason they are concentrating on the woman’s apparel segment is because they want to tap the new empowered woman’s brand loyalty with their stylized yet pocket friendly offerings.

Other value added and after sales services includes returning of the merchandise within a month’s time if anything goes wrong with the fabric. Also, CLUBWEST membership is offered where customers are given special privileges like 20% discounts during their birthday month, free home delivery of merchandise and Clubwest points on each purchase that can be exchanged for money. Focus is to be extremely sensitive to the needs of the customers and build the brand on their suggestions and opinions. Westside also got into cause-related marketing last Diwali, where it sold diyas prepared by underprivileged kids at its retail stores.

Trent further expanded into Hypermarket retailing through “STAR BAZAAR” in 2004. The reason for coming up with such stores was to cash on the limited time the working individuals had to buy groceries.

Quality and convenience is what urban customers are looking for and Star Bazaar satisfies it, making them visit the store again. The stores are also sensitive to the regional requirements and they vary across the length and breadth of India.

The procurement process in Star Bazaar is highly dependent on locals who supply and transport the goods. Since product differentiation is difficult here, the motto “Chota Budget, Lambi Shopping” is hard to achieve considering the bargaining power is on the supply side. To tackle this and to have an edge in providing the goods at the lowest prices Trent has agreed upon supply chain integration with UK based Tesco, world’s third largest retailer. With financial aid of £60m, Trent can enjoy reduction in costs through economies of scale with this agreement. As per retail weekly, Trent Limited is expected to invest close to Rs. 2000 crores for setting up fifty such Hypermarkets.

A “LANDMARK” event
Before Pantaloons could lay hands on it, TRENT captured 76% stakes in the 22 year old Chennai based, India’s largest bookstore chain “LANDMARK” in August 2005.Recession or no recession, books and music would never go out of business and Simone Tata knew it well. Rather to everyone’s surprise, Gen X is more into books than ever before. Landmark was into books, magazines, stationary and greeting cards but later it added on music to its stores. Further it also added gifts, home stores & toys .The USP of its stores is the wide assortment and range of stock.

The latest news from Trent is a complete family fashion store Fashion Yatra. At the launch, Simone Tata said, “The strength of Trent Limited lies in it being able to provide our customers garments that suit their specific needs. Fashion Yatra is our latest venture to provide customers really fashionable choices at great prices.”

Throughout its phase I, TRENT has been a mass-to-mid-market retailer and has targeted its marketing strategies towards the metro population in the age bracket of 20-35. It has acquired businesses that already had all their primary and secondary business activities in place. The only turn Trent gave to all these brands was bringing them under one roof to create a shopping experience like never before. Gurgaon’s Grand Mall is an example where all these brands are brought together.

All these related sectors point towards the highly styled lifestyle requirements of the youth who are able to finance them through their cushy jobs in the booming service sector. The major pull force of the company is the related product assortment. The brands under its umbrella are already popular; Trent would provide them further ground to prove their strength through its financial muscle. Trent posted revenues of Rs 716 crore and net profit of Rs 33.64 crore on a consolidated basis in FY08.

Phase II: What does the future hold for TRENT?
Trent has two-way line stretching in mind, as can be clearly seen (downward stretching) from its entry in the mass merchandize retailing through Fashion Yatra where it offers “Value for Money” clothing and its strategic tie ups with brands like SISLEY, Benetton’s premium apparel brand, and Topshop & Topman, a UK based high-end apparel brand, mark its debut in the premium segment (upward stretching). Moreover, economies of scale and scope can result only when the scale of production and consumption is large. So Trent is concentrating on reaching wider masses and creating value positioning in the minds of its customers.

To wrap it up, TRENT has the potential to bring its competitors down. With its immense financial muscle to undertake any possible venture and the unmatchable guidance and vision of Simone Tata, once called the “Cosmetic Czarina of India”, Trent has all that it takes to become the Best Retail Brand in India.


dhiren said...

hi, Priyanka.. its nice. one can have birds eye over trent from this little work.

Manjula Ramesh said...

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supriya dhole said...

Thank you for sharing such great information.
It is informative, can you help me in finding out more detail on
about tier ii and tier iii cities.

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