Business model for Indian Tier II and Tier III cities – A study for fashion & lifestyle products

Proceedings of the 9th International Conference on Modern Research in Management, Economics and Accounting

Year: 2018. page


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Business model for Indian Tier II and Tier III cities – A study for fashion & lifestyle products

Tanmay Kandekar



As per rating of Global Retail Development Index (GRDI), 2017 India ranked 1st among 30 developing countries, surpassing China, in terms of retail sector development. In order to leverage this market scope all the key international brands are foraying into Indian market to lure the Indian customers with their market offerings. The grand entry of Amazon is the latest proof of the huge potential in Indian retail space. The Indian home grown brands are also not much behind in capitalizing on this growth trajectory. However this competitive landscape has begun saturating the Indian metros and tier I cities. As such the retail brands are in dire need to expand into tier II and tier III cities. These cities provide a less cluttered market space with high awareness and purchasing power, which can be en-cashed by the fashion brands with carefully crafted marketing mix strategies. However the prerequisite to this strategic initiative is to understand the psychographics and aspiration levels of this target segment.
The objective of this research paper is to identify the aspirations and purchase behavior of tier II and tier III Indian consumers and suggest various effective strategies to promote fashion products in these cities.
The research methodology includes the detailed survey of customers from Tier II and tier III cities. A survey of 500 customers over a period of 3 months was conducted to find out the perception and awareness of fashion products among the customers along with the issues they face while purchasing the product.
This paper concludes with formulation of various strategies on the basis of 4P’s of marketing that can be implemented by the companies, which want to capture the highly growing market of more than 3000 towns. These strategies are formulated considering the consumer behavior of these cities, their aspirations that are backed by the purchasing power. These strategies may help marketers to capture the demand for the fashion brands from these cities.