Current market demand for knitwear is involved with the quality and competitive pricing of products. There is a close competition between the manufacturers and marketers to hit the best bargain and offer promotional discounts to consumers. Cut-throat competition has made manufacturers to offer multi-pack products at inexpensive prices.
Developments in knitting, and advanced treatments such as digital printing, glossy foil prints, inkjet printing, flocking, and burn-outs have heated up the market. New knitting machines have opened up possibilities hitherto into unknown segments such as technical textile, for instance; products such as fishnet, fruit-net, shade net and composite products.
The Smart Fabrics and Interactive Textiles market will return to growth, reaching a value of US$1.8bn by 2015, according to new research by Global Industry Analysts (GIA). (just-style.com)It seems that the revival of economic growth, a recovery of consumer confidence, product innovations and sustainability would all help to put growth back on track. On the other hand, demand for unique product offerings, served by unexplored, developing markets, will sustain growth. It can be safely assumed that the knitwear the industry lifecycle is at the mature stage as shown in the figure below.
According to GIA, the intimate apparel industry is defined by new fabric developments, including innovations in fashionable and comfortable garment designs. The report found that competition within the industry had resulted in falling prices and a shift in production, prompting manufacturers to expand their operations into South America, Central Europe and Asia (Network).
Europe is identified as the single largest regional market for knitwear, although the US; they dominate global knitwear sector with a 65% market share (LTD). Asia Pacific is currently growing to be a promising market for the same. During the recession, the Asia-Pacific market was buoyed by rapid growth in China, India, Korea, Indonesia and Taiwan. The global knitwear market is competitive and fragmented. The economic crises have narrowed the gap between the upper and lower end of the market with style differentiation almost vanishing.(Ltd.)
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With advancements in the industry in the recent years, RadiciGroup is introducing CornLeaf, a 100% biodegradable solution-dyed continuous yarn. Produced by Noyfil SA, the yarn is made from Ingeo, a polylactic acid (PLA) polymer derived from renewable vegetable resources. Compared to traditional dyeing and finishing processes, the manufacturing of CornLeaf requires less water and energy consumption as solution dyeing technology is integrated into the spinning process. CornLeaf lighter than other natural fibers, and has tenacity comparable to other synthetic fibers. According to RadiciGroup, the yarn also has greater hygroscopicity compared to synthetic yarns and is faster drying than natural fibers. RadiciGroup’s yarn is available in a range of lightfast, wash-resistant colors intended for use in intimate wear, furnishings and consumer goods. (W. T. Ltd.)
Sana Hastakala (P) Ltd. main office, that houses training, product design and development, and retail outlet, is situated in Kupondole, Kathmandu, Nepal. The address is:
G 10/113, Kupondole, Kathmandu, Nepal
Corresponding address: P.O. Box No. 3901, Kathmandu Nepal
Sana Hastakala (SH), when translated to English, literally means “Small Handicrafts.” This company was established by conglomerates of handicraft businesses in Nepal to encourage the local artists and producers to participate in producing handmade goods and sell them abroad. In 1989, United Nation’s International Children Emergency Fund (UNICEF, now known as United Nation’s Children’s Funds) provided technical and financial support, in addition to assistances from local handicraft businesses, to launch SH. After a year, the organization was able to sustain on its own and, though registered as non-government organization with Government of Nepal, now is a private limited company.
SH strives to “foster the resurgence of traditional craft skills as well as applying modern techniques in order to generate income for under privileged craft producers who are mostly women” (Sana_Hastakala).
SH has more than 1,500 individual producers, and collaborates with 80 producers groups. Income is distributed amongst producers and employees. Profits, also, strengthen the organization and finance community development initiatives. The community development fund is used to assist craft producers in purchasing raw materials and equipment, and provide skills training (SanaHastakala_Producers).
SH has been proactive in establishing fair trade in Nepal and is the founding member of local chapter – Fair Trade Group Nepal. Though many organizations have provided definition of fair trade, the definition offered by World Fair Trade Organization (WFTO) has been widely accepted. It states that “Fair Trade is a trading partnership, based on dialogue, transparency and respect that seek greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in the South” (WFTO). There are ten standards for fair trade and the list includes “stipulations about labor conditions, gender equity, environmental considerations, and transparency to name a few” (Weber). Fair Trade Group Nepal (FTG Nepal) is “a consortium of fair trading organizations working with the aim to uplift socio-economic status of underprivileged and marginalized producers of Nepal” (FTGN “About Fair Trade Group”).
SH contribution to social development has been highlighted in periodicals. In 2007, World Fair Trade Day published series of case studies on “Why Kids Need Fair Trade” that exemplified how SH has helped Babita Rajbhandari, who had been previously trained in SH, to educate her daughter Boibha after her husband passed away (WFTD).
In order to increase awareness of the fair trade, SH regularly promotes educational programs at local institutes that offer social work courses. To provide hands-on experience of fair trade, SH provides two 8-month long internships every year to students from the colleges (Sana_Hastakala “Polcies and Procedures; FTGN Annual Activity Report).
SH has two outlets located in Kupondole and Lazimpat. Their annual turnover in 2009 was NRs. 40.5 million (CAD 550,000), exports accounting for 78% and domestic for 22% of sales. Information regarding which categories contribute most to the sales was not disclosed; Japan is the number one importer of knitwear products (Sana_Hastakala “Polcies and Procedures”).
Many promoters of fair trade have associated with SH to promote local handmade products in the global market; most notably is Ten Thousand Villages, which has 75 retail stores in the United States of America (TenThousandVillages_USA) and 49 stores across Canada (TenThousandVillages_Canada).
As promoter of fair trade, SH will provide brochure that highlights the activities of SH, and access to merchandise producers and manufacturing centers will be provided. The third party inspection can be arranged, but the buyer has to provide the cost of hiring external agency (Sana_Hastakala “Polcies and Procedures”).
Sana Hastakala has website http://www.sanahastakala.com that provides information to the products, and the services provided by the organization and information on Nepalese handicrafts. The website, however, lacks web-based ordering system. This is due to the lack of laws for e-commerce (Sana_Hastakala “Polcies and Procedures”).
SH recently won “Best Entrepreneur Award” given by Federation of Handicraft Association of Nepal for their contribution in “product development, employment creation, export and sales promotion, technological, management and environmental improvements, socially responsible activities, and support to other handicraft entrepreneurs and buyers” (WFTO-Asia).
Our top three competitors are,
- Ecowool: Ecowool is located in New Zealand; it has been selling the ship skin and woolen products for almost 20 years.
- Mayfair overseas: Mayfair overseas is the largest knitwear manufacturing and exporting group in India.
- Trident Craft Pvt. Ltd: Trident Craft is a handicraft company located in Nepal.
All these three competitors offer similar knitwear products, such as cap, jacket, socks, gloves, hat, scarves, and sweaters.
Competitive advantage over each of the competitors:
- All our products are handmade with Nepal’s rich artistic skill and craft techniques
- We are the founding member of fair trade group
- Our main objective is to provide financial and technical support to craft producers
- We do not use harmful chemicals in production because all products are hand made
- Traditional craft skills with modern techniques
- Designs and based on both traditional Nepali and classic western motifs
Trident craft Pvt. Ltd:
- We use high quality sheep wool and agora wool from Nepal and imported wool from New Zealand to create beautiful knit wears
- We are the founding member of fair trade group and provides marketing services to our producers of our company
Sana Hastakala, in collaboration with local women and producers, market variety of handicraft products. Besides producing and exporting handicrafts items, SH helps entrepreneurs with financial and technical assistance; some of these business enthusiasts operate in a very small scale and usually manage their business operation from home. Such assistances usually consist of capital needed for raw materials, health checkup, product development and design, and marketing (Sana_Hastakala “About Us”). The products are beads, ceramics, hemp products, knitwear, metal crafts, silver jewelry and others. The complete list of products is provided in Appendix A.
We are looking for prospect buyer(s) in Canada for knitwear products offered by SH. The knitwear products include woolen cap with earmuffs (or ear-flap woolen hats), mittens (boxer gloves and hunter mittens), woolen sock, and mufflers. Appendix B provides the images of these products.
SH uses high quality sheep wool and agora wool from Nepal, and also uses imported wool from New Zealand. The quality of yarn has to be approved by the client prior to production. SH has its own catalog for the designs, which are based on both traditional Nepalese and classic western motifs (SH_Woolen). The design catalog is provided to clients upon request. SH also provides professional to develop pattern and design in collaboration and consultation with the clients. The samples, after approval, will then be sent to producers. All the knitwear products are hand-made and will have “100% Hand-made in Nepal” labels (Sana_Hastakala “Polcies and Procedures”).
It is worthwhile noting that all knitwear (except for sweaters which is not in consideration because of size-requirement discrepancies between Asia and North America) products are unisex. The knitwear products are available in two different sizes: small (kid-size), and large (adult-size). Since these are hand-made, SH admits that it is hard to enforce size requirements, but will comply with client’s requirements (Sana_Hastakala “Polcies and Procedures”).
The knitwear products are available in a range of fashionable colors. The local woolen yarn colors are usually pale white and grey. These wools are from sheep and yak, and no animals are harmed during the production of wool. The wools are dyed based on the clients’ requirements. The design catalog contains the range of colors available.
The hats or caps and boxer gloves can have fleece lining upon request by the clients. These linings provide extra warmth and are usually preferred by most of the clients. The requirement of linings will be decided after consultation with clients.
Being a member of World Trade Organization, Fair Trade Group, and Fair Trade Group – Nepal, Sana Hastakala strictly adheres to the guidance and regulations to maintain quality and standards, which are regularly checked by these organizations. Besides quality and standard, SH ensures that these ten standards are followed:
- Creating opportunities for economically disadvantaged producers,
- Transparency and accountability
- Trading practices
- Payment of a fair price
- Child labor and forced labor
- Non-discrimination, gender equity and freedom of association
- Working conditions
- Capacity building
- Promotion of Fair Trade
The details of these standards are discussed in detail by any Fair Trade organizations (FTGN_Standards). The compliance certificates can be obtained upon request by the clients.
The client can request to be affiliated with Sana Hastakala to promote Fair Trade practices in Nepal. Some clients have expressed the positive outcomes and boost in profits because of this affiliation. SH assures that the client will develop business relationship that will benefit everyone and SH will be committed once this relationship is established (Sana_Hastakala “Polcies and Procedures”).
Sana Hastakala (SH) offers two types of shipping: sea and air. If the client prefers DDP (Delivered Duty Paid), then SH will use its own freight forwarding firm, handled by third party, and the freight, insurance and cost of goods will be the landed cost. Some clients prefer EXW – the products are picked up from the SH warehouse located at Kupondole, Nepal. The client will be responsible for all the charges thereafter (Sana_Hastakala “Polcies and Procedures”).
Nepal is member of World Trade Organization and strictly adheres to rules and regulations of WTO. Prior to 2005, Nepal enjoyed quota free access to major global markets. Nepal does not have any restrictions in exporting knitwear as long as it maintains quality standard requirements (Shah). However, importing textiles and clothing to Canada is subjected to Export Import Permit Acts and requires import permit from Foreign Affairs and International Trade Canada (DFAIT) (DFAIT “Import Conditions”). The import also is subjected to certification fees and custom fees based on the total value of goods (DFAIT “Schedule (Paragraph 3(1)(a)): Fees for Import Permits”).
SH prefers exporting through seaway for exporting goods, but this requires order in advance one year so that the product reaches the buyer in time. SH can also provide merchandise through air cargo – the order is required four months in advance. The seaway shipment is cost-effective compared to air cargo. Currently, the shipping price through sea is US$ 3.00 below 500 kg and US$ 2.00 over 500 kg, whereas the air cargo cost depends upon the courier service used for transportation; on the average, air cargo costs US$ 9.50 below 500 kg and US$ 7.25 over 500 kg (Sana_Hastakala “Polcies and Procedures”). The method of transportation will depend upon after discussion with buyer and their preferences, but sea shipment will be recommended to keep the landed cost minimized.
The turn-around-time depends upon the quantity of merchandise ordered. A minimum order of 1,000 units of knitwear, mix and match of any products, is required to minimize the packaging and handling charges. The seller has to keep in mind that the estimated delivery time through sea is three to four months, whereas the estimated delivery time through air cargo is five to seven business days (Sana_Hastakala “Polcies and Procedures”).
The packaging will be done in weather-proof packages so that there is minimal damage to the merchandises due to weather and other natural disasters. The packaging is either in the tarp sacks or boxed, the latter being more expensive and will cost more to buyer (Sana_Hastakala “Polcies and Procedures”).
Pricing Policies and Procedures:
For selling any of goods or services some type of cost analysis is required. SH, according to the cost analysis, set prices, for their three merchandise (Caps, Mittens and Mufflers), as below:
A part of analysis is verification of pricing. For better understanding the market situation, the table one shows comparing prices between three supplyer that are competing in the market and SH. Obviously, this is one of the best means for validating price. By asking three or more suppliers of their prices for the same product, we can determine if a particular price is reasonable. However, the lowest bid may not always represent the lowest cost. There may be cost associated with making the lower cost product perform to standards, the additional cost of early replacement or the cost of redesign and/or testing required making the lower cost product applicable. This “total cost of acquisition” is the real cost that must be compared. It’s obviously shows that SH prices are higher than the other competitor in the market and it is because of their quality and being handmade of the products.
SH doesn’t have any discount offer for first order but for compete with other competitors they offer discount for second and subsequent orders. They promote 12% discount for orders more than 70,000 and 20% discount for orders more than 100,000. Furthermore they have discount for fair trade members about 25%, also these excludes VAT which is 22% in Nepal.
The company use advanced order to take advance payments to cover the cost of raw materials purchase. Then SH use totally prepaid advanced payment for first order and for the second order they recommend 75% advance payment, 25% after shipping. Also they recommend 50% advance payment and 50% COD payment for third order and subsequent orders. The firm’s policy on extending credit to its customers is depending on the loyalty of the customers to SH and their participation in promoting fair trade globally and locally.
Prospecting/Qualifying Potential Customers:
We propose these methods for prospecting and qualifying potential customers.
Exhibitions and Demonstrations:
- Exhibitions and demonstrations will be our primary prospecting method. This types of events gives a sales person extensive contact with large number of potential buyers over a brief time.
- Using this method we can set-up an interesting display to get people’s attention for example popcorn machine, lightning etc.
- We can set up our display to maximize visibility based on the flow of the traffic.
- We can use lead cards to write down prospect information for efficient and effective post- show follow up.
- In this kind of trade shows we can get the major buyers we want to pursue for contact.
- For qualifying potential customer in such kind of exhibitions or trade shows we can set up a booth with one sales person to qualify leads and get name and addresses to contact them later at their home or offices.
- Our sales person’s approach to the customers will be assertive rather than common; we can use some questions such as have you ever use hand crafts products? Or by offering them sample to handle that make them get involved into conversation.
- We can write our message so that it fits on the back of the business card.
- Our company website would be our one of an automated prospecting tool. We can use our company website as prospecting tool by doing number of things such as,
- We can make the site attractive and easy to use
- We can get come in to their contacts by “contact link” on every page
- We can put “call me” links, whereby they can enter their phone numbers and we call them back.
- To qualify potential customers through our websites we can put our full product catalog online and also let them download a pdf and order a paper copy.
- Our website would allow them to make both free-text queries and guiding them through a product list.
- Our potential customer can get all information about our product’s price range from our web sites.
- To find new prospects, networking can be the most reliable and effective prospecting method. We can focus on meeting the Centre of influence people by which we can come in to many valuable contacts.
- By networking we can get to know about prospect’s business and find key people in our industry.
- By meeting people we can tell them what we sell, exchange business cards. Eventually we can build a network of people talking to each other, sharing ideas and exchanging information.
- We can get networking prospect’s business card and follow up with our new contact.
- By doing networking we can develop credibility and a valuable, long lasting relationship that would be helpful in our business.
- To qualify potential customers through networking we can share information about their business and our business.
- We can ask them some open ended question or feel good question about our industry and also their industry like, “What do enjoy the most about your industry?”
- By making contacts through networking we can build up relationship by sending them something every month such as notepad with our company name and picture. These things will be reminded us and our products.
Monthly hard copy and newsletter:
- This is one on of the good prospecting method that we can use to find potential customers
- We can target particular market by publishing monthly hard copy and newsletters of our company and our products.
- Though monthly hard copy and newsletter we can offer them an invitation to a seminar, free training session etc.
- We can send to our prospecting customer contacts articles, newsletters, books, brochures etc. to guide them about our company and our product.
- We can publish questionnaires to encourage the conversation.
Securing an Appointment:
The letter seeking an appointment is provided in the next page.
February 21, 2011
Mountain Equipment Co-op
400 King Street West
Toronto, ON M5V 1K2
Sana Hastakala is Nepali Handicraft Company. We are the founding member of fair trade group Nepal (FTG) and member of International federation of alternative trade (FAT). This is a non-profitable organization and our main objective is to foster traditional craft skills as well as applying modern techniques in order to generate income for craft producers who are mainly women. We produce different woolen items and other handicrafts products.
Sana offers you variety of woolen items which can be used in everyday life. We use high quality wool such as sheep wool, agora wool from Nepal, imported wool from New Zealand to crate beautiful knit wears, sweaters, jackets, hats and gloves. Designs are based on both traditional Nepali and classic western motifs and are available in beautiful range of fashionable colors.
At your convenience, I would like to introduce you to some of our product’s features and benefits. Please let me hear from you if you would like to find out more about Sana Hastakala and what we can offer you.
Appendix A – Product Catalog for Sana Hastakala
water and storage jars,
cup and plate,
paper Mache masks,
puppets and dolls
Dolls (made from cloth and corn husk depicting various occupational and tribal ethnic groups represent the culture of Nepal)
Hand Made Paper Products
gift wrapping paper,
hats and caps,
gloves and mittens
various kinds of flutes,
cutlery items, such as knife ,spoon and forks with traditional designs , and
“bagh chal” and chess games
bed sheets and
Natural fiber Allo Hemp
decorative wall hangings,
Filigree Christmas hangings, and
Images for knitwear products:
Ear Flap Hats (DSC08796)
Cap with Earmuffs (DSC02910)
Boxer Gloves (DSC01045)
Hunter Gloves (DSC02905)
Woolen Socks (DSC01059)
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