Matrix Footwear India: Abhishek Dalal PGP/23/372

MATRIX FOOTWEAR INDIA
ABHISHEK DALAL
PGP/23/372
1. Should Matrix foray into youth market / fashion accessories market?
Matrix currently enjoys 15 percent market share in the market dominated by the unorganized sector.
However, overall market distribution was changing rapidly. The new-age customers though of Matrix
as old and not so exciting brand. The changing buying habits of customers shifted towards engineered
and funky shoes. The market for premium products accounted for 12 percent of the market share but
was growing at a very rapid pace of 30 percent. Moreover, premium products offer maximum margins
to the companies. Matrix as an old and established brand and already has a stronghold in multiple
geographies. Historically, the only economical segment was profitable in India as opposed to western
markets. However, the market forces are changing, and the premium product is becoming the need
of the hour. All the points mentioned above are evidence of the need for Matrix to foray into the
premium products for the youth market. With increasing youth population of India, this will be a sound
decision for many years to come as they will be the primary consumers in the times to come.
For fashion accessories, matrix faced many issues last time due to lack of proper planning and
positioning. The core offering of footwear fought for the visibility and the ambiance was also not
suited for the premium offerings. The economic customers, who tend to maximize utility, were drifted
away by the premium products in an economical store setting. Also, the premium customers did not
like the ambiance. To avoid such scenarios, the fashion accessories should be kept to a bare minimum
and should only complement the sales of footwear and not try to overrun it.
Matrix should stick to the footwear market for the next few years capitalizing on growing youth
segment and then diversifying its product range to fashion accessories later subjected to market
demand and Matrix’s capacity.
2. What are the factors you should consider while making product / market decisions?
Factors that are important for product/market decisions:
• Existing market trends and changing buying habits of the existing user base and upcoming
generation of users.
• Existing market share and changing competition landscape. This involves our product line
analysis and competitor’s product line analysis.
• Target segments which various products focuses on. Their functional, financial and emotional
requirements from the product.
• Product development, manufacturing, marketing and distribution costs
• Pricing plays a major role in buying decisions of consumers. The firm must decide if it wants
to have a penetration pricing strategy or have earlier breakeven.
• Social and Cultural factors play a major role in consumer buying decisions. The firm should
incorporate the same while developing the products as well as during the marketing
campaigns.
• Attractiveness of the market. The market should be attractive enough with low barriers to
entry and high growth potential to ensure the firm does make profit in the end instead of
burning out money.
3. How does product policy impact the value proposition of Matrix store?
Sound product policy can increase the brand value and business growth of Matrix footwear:
1. Product Planning and Development: Matrix can use product planning to develop and market
products in line with changing market needs as discussed in the case. They can develop new
products, modify the existing lines and discontinue marginal or non-profitable products.
Matrix should develop new products after doing thorough market research, test marketing,
commercialization and proper market entry decision.
2. Product Line: An optimized product line can give maximum value to the firm and shareholders
as well as the customers of matrix footwear. With changing buying habits, matrix should
optimize product line taking in view the marketing influences, distribution network and
company’s cost structure.
3. Product Mix: Matrix should focus on providing an adequate product mix to customers of
varying interest. The market has not shifted entirely to premium products. It is in a changing
phase and the product mix should keep that in mind to not lose out existing customers. But,
at the same time, it should add new products to capture the upcoming generation of
consumers who will form the major base for future revenues.
4. Product positioning: Matrix should effectively position its products to increase brand equity
amongst consumers of various segments. The consumers should easily identify with the
product and should have a brand preference for matrix footwear. Another aspect discussed
in the case for positioning is the ambiance of the distribution networks used. The premium
products should have a different distribution channel than the economical products. This will
help in avoiding dissonance amongst various customer segments.
5. Product Packaging: The packaging of the product plays a major role in customers buying
decisions. Proper product packaging by matrix could help in capturing and retaining the
growing user base of young consumers who like the style and premium nature of the products.
This will, in turn, affect the top-line of the organization.
4. How can Matrix diversify into unrelated areas like fashion accessories without repeating the
mistakes of the past?
Around 1990, Matrix decided to accommodate stores with premium footwear and fashion
accessories, it observed:
• Reduction in profits and eventually realizing losses
• Dissonance amongst the consumers’ minds.
To avoid this, it is imperative that product offering should match the store to maintain the operational
costs and customer approachability. Also, the main offering, its footwear should not be hustling with
other accessories for shelf space and visibility. The store should be designed around the focus on
premium footwear. The accessories should be in limited amount and should complement the sales of
footwear. As the market develops and grows, the accessories can be increased and Matrix can become
a whole buying experience for customers for clothing and accessories. But this should not be hurried
into as it would lead to a wrong image amongst the consumers. Also, the premium customer has
requirement of quality product, good ambience, friendly staff and great buying experience. This
should be kept in mind while modifying the store space for new product lines.

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MATRIX FOOTWEAR INDIA

Factors that are important for product/market decisions:

• Product development, manufacturing, marketing and distribution costs

• Reduction in profits and eventually realizing losses

• Dissonance amongst the consumers’ minds.

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