Answer to Question #177229 in Finance for DINESH

Question

Mr. Ramesh is contemplating to enter the men’s top end shirts category.The company already has a brand “CLINGERS” in the middle segment (₹350-700). The brand is very popular amongst the target audience. Mr. Ramesh now wants to play the value game and enter the top end (₹700+) category. He knows there are some formidable brands. that will make life extremely difficult . Mr. Ramesh has decided to keep the brand name as “Clingers Gold”. He has decided to allocate ₹10 crores for sales promotion and advertising budget. Unique Industries is simultaneously entering the readymade trousers market and shoes market. Mr. Ramesh has decided to keep the same brand name “CLINGERS” to leverage the success of the brand name to the two new categories.

a. Do you think the brand name “Clingers Gold” is right for the top end segment? Justify your

answer.

b. Which factors you think needs to be studied before making such entry in the market?

Answer 1

a)

The current brand name is the best to use because many people already know about its existence hence it will be easier for it to grow since new members will add to the current customers.

b)

1.Knowledge or Expertise

Research on different and better methods to beat the competitors.

2. Market or Demand

He needs to consider demand and market size for the product. This will include the growth potential and profit margins to expect.

3. Start-up Costs

He will have to assess the total cost that is required to set up and run your business successfully.

4.Capital and Finance

This generally includes the capital that you can introduce from your savings as well as the funds. that you can borrow.

5.Competition

He needs to know his competitors and what they are doing to be able to survive in the market for long.