CHAPTER III

TIRUPUR KNITWEAR GARMENT INDUSTRY-A PROFILE

“Tirupur Knitwear Garment Industry – A profile” has traced the background
of the Knitwear garment sector with special references to international marketing
scenario, the need for marketing strategies, an overview of Tirupur Knitwear garment
Industry and its progress. The chapter has also provided a bird’s eye view into the support
systems available in the form of different associations, apparel parks and initiatives from
the government bodies. The competitiveness and the constraints experienced by the
industry have also been tackled in this chapter, briefly.

3.1. INDIA’S INTERNATIONAL MARKETING SCENARIO

International marketing has an attitude and the approach of a company with a
truly global outlook, seeking its profit impartially around the world. Companies have
been motivated to internationalize because of the saturations of domestic market and
profitability & growth prospects of the foreign market. International marketing can have
different levels of involvement, which can make a substantial difference to the way in
which the activities have been organized.

In many developing countries, international marketing in its rudimentary form,

has involved exports, selling part of the production to foreign markets. The garment export
from India has been no exception, as India’s extended conservative macro-economic policies,
joint ventures, technical collaborations, strategic alliances or subsidiary operations have not
been initiated in the earlier days. Since 1992 efforts have been made in the form of joint
ventures and strategic alliances to achieve the competitive advantage in product, design,
technology, marketing, etc., to gain the international market share.

Garment marketing has some of the distinctive characteristics such as; severe
competition owing to relatively low barriers, strong reliance on psychological obsolescence
which has necessitated timely change, seasonality leading to short-half-life of the
merchandise, conditions of change and competition that has necessitated high mark-
downs and fast turnovers. Various competitive forces have also been threatening the
exporters to withstand the market. Competitive Forces in Garment Industry has been
shown in Exhibit No. 3.1.

35

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

 Exhibit No. 3.1. Competitive forces in Garment Industry

Threat of new entrants

Bargaining power Rivalry among existing Bargaining power of

of suppliers competitors buyers

Threat of substitute
products or services

Source: Porter 1985 p.5.

While examining the competitive forces acting on the garment industry, the power of
the buyer has determined the extent to which they have been retained and the value created
for them. The threat of entry has determined the chance of new firms to enter an industry and
compete with the value created. The threat of substitutes had determined the extent to which
some products can meet the same buyer needs and thus place a maximum limit on the
amount a buyer has been willing to pay. The power of suppliers has determined the extent to
which the value created for buyers will be appropriated by the suppliers.

Satisfying buyers’ needs have been a prerequisite for industry’s profitability, though
not sufficient; understanding the expectations of the buyers and the relative importance given
by them on various value chain elements has to be taken into consideration for improved
marketing performances. The large retailers, who have directly entered India for sourcing,
often work through their overseas offices. Before the buyers arrived in India, the type of
products they want to source and the price they are willing to pay have been already
decided based on the current satisfaction level with reference to different competing
supplier countries. There have been many aspects such as competition, infrastructure,
import-export policies, foreign exchange regulations, business policies and ethics,
creativity / design, marketing / sales and cost control, delivery and service, planning and
merchandising, fabric and apparel development that can be controlled and improved by
individual exporters. The Government has to contribute for developing the industry’s
competitive advantage as a whole and bring about better satisfaction levels for buyers,
prompting them to allocate higher budgets for sourcing from India.

36

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

 The exporters have to decide the proper channel in which they have to export their
products, to reduce the risk and to improve the earnings. The goods have been marketed
without intermediaries, to the stores. There have been Independent Retailers, Joint Venture
partners, Purchase consortium, Departmental Stores, Specialty chains, Discount stores,
Brand manufacturer-importer. The intermediaries involved in garment export business
have been export agent, independent buying house and the trading house.

After identifying the competitive forces and equipping the sourcing system, an
exporter has to concentrate on marketing strategies, which have played a vital role in
developing a business.

3.2. NEED FOR MARKETING STRATEGIES

The transition from Multi Fiber Agreement regimes to unrestrained trade in

clothing under the WTO has called for changes in the investment levels for manufacturing
units, the organization structures, work culture, product and channel mix and attitudinal
change by garment exporters. To be successful in newly changed markets, a well-developed
marketing strategy has been required.

With the advancing liberalization, marketing environment has become increasingly

international, even for domestic firms. To understand different cultural, legal, political,
monetary system and the level of economic development to face uncontrollable variables,
global marketing had come into existence in the early 1980s. Marketing strategies have
been designed to reach marketing objectives by altering the product line in order to reach
new market segments and various promotions for a targeted portion of the market.

To compete successfully in global market place, companies have to possess

competence to understand the global marketing environment. Analytical competence has
been needed to pull together vast array of information to assemble relevant facts related
to product needs. Strategic competence has focused on the long-term requirements of
their firms. Functional competence has involved a thorough understanding in all areas of
marketing. Managerial competence has been required to implement the orders and
organize the trade effectively, on a global scale.

A Marketing strategy has an articulated plan for the best use of the organizations’
resources and the tactics, to meet their objectives. Elements such as organization structure

37

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

 & culture, segmentation and targeting of markets, positioning & branding, customer retention
and offerings, have been mediated through the industry to satisfy the expectations of the
customer/market

Marketing strategy will assist the organization to retain the customer/market.

Depending on the organization culture & competitive position, the customers can be grouped
into segments. Through positioning, branding and offering/premiums companies’ product
can be resolved in the customers mind.]

Marketing strategy has the overall large-scale plan, employing a variety of

marketing tactics to achieve goals. ‘Tactics’ has involved the ‘doing’ part of marketing.
A ‘Strategy’ has been involved with the ‘thinking’ part of the marketing. The marketing
tactics has to combine with the marketing strategies for the success of the garment
business. Companies pursuing export marketing have to adopt strategies related to
communication, product, pricing, distribution, segmentation and presentation through
marketing plans to Companies pursuing export marketing have to adopt strategies related
to communication, product, pricing, distribution, segmentation and presentation through
marketing plans to satisfy the customer(buyer).

A firm, which plans to go for export marketing, has to make a series of strategic
decisions.

3.3. STRATEGIC DECISIONS:

The general object of international marketing intelligence has included the collection,
processing, analysis and interpretation of all types of information from all available sources,
to aid business management in making international marketing decision.

The action-oriented decisions have to relate to the following:

A) INTERNATIONAL MARKETING DECISION RELATED INFORMATION

A company has to decide, whether to enter international business or not, based on

the present and future opportunities and the resources of the company (skill, experience,
production, marketing capabilities, finance and company objectives).

38

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

 B) MARKET SELECTION RELATED INFORMATION

For selection of most appropriate market, a thorough analysis of the potentials of

the various overseas markets and their respective marketing environment has been
essential. Information on a large number of factors for evaluation and selection of the
markets has to be gathered. Market selection also has required specific information about
the product or industry to concentrate on the demand trends, government policy & regulations,
competitive situation, etc.

C) MARKETING MIX DECISIONS

The export market has been characterized by a number of uncontrollable external

variables and controllable internal variables. The success of export market has depended
on the appropriateness of the marketing mix.

D) PRODUCT RELATED INFORMATION

To differentiate with competitors’ products in terms of design, features, packaging,

services, warranties, return and so on, a product marketing strategy has to be developed
to launch a new product.

E) PRICE RELATED INFORMATION

Price related information has included prevailing price ranges, price trends,
margins, pricing practices, government policies and regulations and price elasticity of
demand. After selecting a pricing objective, the exporter has to determine a pricing
strategy. Different pricing strategies can be used at different times to fit with the changes
in marketing strategies.

F) PROMOTION RELATED INFORMATION

For formulating a promotion strategy, data on many aspects, such as, the media
availability and effectiveness, government regulations, customer practices of promotion
in the market concerned, competitive behaviour, etc., have to be determined.

G) PHYSICAL DISTRIBUTION RELATED INFORMATON

Information on factors, such as, the channel alternatives and characteristics,
relative effectiveness of different channels, customs/practices of the trade, power and
influence of channel members etc., have to be collected for decision making.

39

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

 I) COMPETITION RELATED INFORMATION
Information about the competitive environment including the extent of competition,
major competitors, relative strengths and weaknesses of competitors, strategies and
behavior of competitors etc., have become inevitable for decision making.

J) ORGANIZATIONAL DECISIONS
A company planning for a direct export has to decide about its organizational
structure for an effective performance of an export function. This decision has to be
necessarily based on the nature of the export market and the product, the size and the
resources of the company and the length of its export experience.

3.4. TIRUPUR KNITWEAR GARMENT INDUSTRY –An overview

Knitted sector has been emerging as the fastest growing sector in comparison to
the woven garment sector. Tirupur has been exporting more than one hundred knitted
garment product categories, mainly falling in cotton, semi-fashion, middle price segment
of casual wear, with the main product categories being T-shirts, men’s shirts, ladies
blouses, ladies dresses and skirts. Orders from USA have been mostly basic styles, in
huge quantities like T-Shirts, under garments, ladies wear, men’s wear, kids wear, sports
wear, leisure wear, etc., whereas orders from Europe and Japan have been comparatively
small but fashion oriented in which Tirupur exporters have excelled.

According to Tirupur Exporters Association, 55% of the exports from Tirupur has
been sent to Europe, 35 % to USA and the rest of 10 per cent to the Middle East (Egypt, Iran,
Iraq, Turkey, Saudi Arabia, Yemen, Syria, Israel etc.,) and oceanic countries (Island countries
found in the Pacific ocean, New Zealand, Australia, etc.,). Most of the leading international
brands such as Nike, Cutter & Buck, Adidas, GAP, Tommy Hilfiger, Katzenberg, Van
Heusen, Fila, Arrow and leading retail chain stores such as C&A, Wal-Mart, Target,
Mother’s Care, H&M, have sourced garments regularly from Tirupur. It has also supplied
jerseys to players in the last Federation international World Cup Football tournament.

3.4.1. CHRONOLOGICAL GROWTH OF TIRUPUR KNITWEAR INDUSTRY

The first knitwear unit in Tirupur had been set up in 1925 and the growth of the
industry had been slow till late 1930s. A series of strikes in late 1930s in knitting
factories in the neighbouring towns of Salem and Madurai had resulted in the opening of
new firms in Tirupur. Subsequently, it had emerged as a prominent centre for knitwear in

40

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

 South India by 1940s. In 1942, 34 units had been engaged in the production of knitwear.
All these units had composite mills and the production had been carried out in the same
unit. There had been also some units performing specific tasks / operations like bleaching
and dyeing, located in the larger units. By 1961, the number of units had risen to 230 and
till early 1970s, the industry had catered only to the domestic market without any
subcontracting system of production. The export market had started to expand in 1980s
and subsequently Tirupur emerged as the largest exporter of cotton knitwear from the
country.

Tirupur has been basically a cotton ginning cluster before it had transformed into
a knitwear cluster. In due course, Tirupur cotton market and ginning factories had lost
woven their edge, where many of these entrepreneurs had switched over to knitwear
production, for survival. Mr Gulam Kadar in 1937 had established “Baby Knitting
Industries” in Kaderpet area at Tirupur. He had started making men’s vests, known as
‘banians’, followed by Mrs. Chellammal, named Chellammal Knitting. The first export of
knitted garments had been made to the US and Ghana by Mohan Knits through a Bombay
merchant exporter in 1972. Till 1978, the manufacturers at Tirupur had been doing job
work only for merchant- exporters at Mumbai.

The turning point for the industry had happened when Mr. Verona from Italy had
visited Tirupur in the year 1978, through a merchant- exporter at Mumbai. Realizing the
potential of Tirupur he had made frequent visits in the subsequent years and had
supported the manufacturers to export to Europe. On seeing the quality of the garment
manufactures and understanding the opportunities, C&A, a major retail chain entered
Tirupur to buy the garments in the year 1981. Commendable interest in product range
expansion shown by entrepreneurs had attracted more and more buyers to Tirupur.

Since, the research has focused on marketing strategies followed by garment

exporters, especially manufacturing exporters who have in -house facilities and who do
not have, taken for the study. It has not always been necessary to understand the entire
chain in order to take action.

41

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

 MANUFACTURING EXPORTER
Manufacturing exporters have been receiving orders from the buyers or from their
agents and have executed the orders in their own names. On the receipt of the order, the
orders has been executed in their own factory or through the firms with whom they have
established relationship for performing a particular process of work like knitting, dyeing,
processing, printing, embroidery etc.

MANUFACTURING EXPORTER - IN-HOUSE

Firms having in -house production have been considered to have an advantage
over others in terms of price, delivery and quality, as they have their own operational
facilities. This has improved organizational efficiency without relying heavily on job
workers and indirect exporters.

Most of the exporters have mainly relied on the related industries or various operations,
hence it has been necessary to know the value chain involved in the process of export business.

3.4.2. PRODUCT VALUE CHAIN IN KNITWEAR INDUSTRY

In Tirupur, most of the firms have been outsourcing their requirements for various
operations in the value chain. The Natural fibre like cotton has been subjected to the
operational process of ginning, carding, combing and spinning, before taking the shape of a
yarn. Yarn, both natural and manmade, has been used in knitting, in the required combination
to achieve the required fabric structure, which has been measured in terms of grams per
square inch (GSM). The Knitted fabrics have been sent for bleaching, dyeing and for
finishing processes like compacting, to control it’s shrinkage and to improve its dimensional
stability. Fabrics, thus, developed have been used for the purpose of apparel making, home
furnishing and for industrial textiles, depending upon the order from the buyers.

The supporting units have made the industry a specialized one among the countries
worldwide.

3.4.3. CAPACITY OF SUPPORTING UNITS IN VARIOUS OPERATIONS

Tirupur has been known for the inter related activities such as Knitting, Dyeing
& Bleaching, Compacting and Calendaring, Fabric Printing, Garmenting, Embroidery
and other ancillary operations. The following Exhibit No.3.2 has shown the Capacity of
Tirupur Garment Units in various operations.

42

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

 Exhibit No. 3.2.Capacity of units in various operations

Source: http://tiruppur.tn.nic.in/textile.html

Tirupur has been characterized as an organic relationship between firms, both

horizontally and vertically due to the dense network of production organizations that had
existed within the region. Out-contracting in large firms has minimized the need for
vertical integration within the firms. Capital constraints to expansion have been minimized
for the cluster, as a whole. The large firms have restricted the size of their labor force
without restraining the expansion of production. There have been many small independent
firms that have undertaken processes that have more specialized in nature, to save the
costs of space, machinery and labour.

The Industry has involved interactions between different types of players,

including competing firms, suppliers, supporting organizations, educational institutions
and governmental institutions. Vertical linkages have been in downward and in upward
stream connecting the firm with its suppliers and customers.

A second type of relationship that has involved the ‘horizontal’ linkages between
and among the firms has been the cluster, with each firm managing the dual objectives of
competing and cooperating in specific areas of common interest. They have been the
business development service providers or educational institutions. At the centre, the

43

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

 collaboration between the firms has helped to guide and facilitate collective actions,
learning and innovation.

There have been a number of local representative institutions and support bodies
that had an important impact on the development of the knitwear sector in Tirupur. The cluster
has 7010 units and has been linked through several commercial and non commercial
linkages. There has been a high degree of subcontracting relationship among them due to
the nature of operations. The role of several industry associations has been commendable in
supporting the firms, by playing a quasi judiciary role to settle various intra and inter firm
disputes. The Government associations such as South India Textile Research Association
(SITRA), Apparel Export Promotion Council (AEPC), Textile committee and National Small
Industries Corporation have been some of the institutions which have provided sectoral
support. Besides, the nationalized banks, Tamilnadu Industrial Investment Corporation
(TIIC) also has involved in providing long term and short term financial assistance. With all
the support, the industry has gained its importance in the knitwear map of India.

The various factors that have influenced the growth of the industry have been
dealt with below.

3.5. PROGRESS OF TIRUPUR KNITWEAR INDUSTRY

3.5.1. Factors influencing the paradigm shift
In the eighties, four significant changes had taken place, namely-a) the dominance
of Tirupur as a supplier of vests and briefs to the domestic market had declined with the
growth of hosiery industry in many parts of the Northern India. b) The demand for
T-shirts in the international markets had picked up and the scope for exports had widened.
c) Developed countries had been shrinking in their garment making capacities for various
reasons and had commenced sourcing garments from developing countries d) the second
generation entrepreneurs inheriting the management of hosiery factories had been
motivated and they had evaluated the potentials of export markets efficiently and they
boldly ventured into international business.

3.5.2. Flexible specialization of Small and Medium Entrepreneurs:

Being tiny and small with very low capital base, most of the firms did not have the
resources to set up bleaching and dyeing facilities. The manufacturing activities had got

44

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

 divided into two segments, that is, knitting and garmenting and wet processing facilities. In
course of time, the industry had got further stratified and today for every single
processing/manufacturing activity-knitting, bleaching, dyeing, mercerizing, compacting,
raising, printing, drying, embroidery, etc., specialization has become the watchword.

3.5.3. Support from the association

In the pre-liberalisation period, industry and export business had been a subject of all
kinds of control and licensing. By the year 1990, the number of knitwear exporters operating
with their production base in Tirupur had increased, appreciably. There had been a plethora of
license, permissions, approvals etc., to be obtained from the Central and provincial
governments, every now and then. The number of documents that an exporter had required to
prepare and submit for the clearance by the central excise and customs department had been
numerous. Further, the apparel exporters have required to obtain import export code from the
Apparel Export Promotion Council (AEPC), a government approved organization, for their
export business. The associations providing assistance have been briefly discussed hereunder.

3.5.3.1. TEKMA AND TEAMA

'Tirupur Exporters and Knitwear Manufacturers Association’ (TEKMA) and
Tirupur Exporters and Manufacturers Association (TEAMA) have acted as a quasi-judicial
institutions to resolve inter firm and intra firms' commercial disputes. This associations
have also taken up a more pro-active role to settle disputes relating to the labour wages,
keeping in mind the government regulations.

3.5.3.2. TIRUPUR EXPORTERS ASSOCIATION

TEA has been established in the year 1990. TEA has promoted jointly with TEA /
LEMUR has established a container freight station in Tirupur. TEA has been holding
knitwear Fair since 1995, in collaboration with AEPC. It has held 21 fairs so far. TEA has
also entered into a MoU with the Indian Institute of Foreign Trade (I.I.F.T), New Delhi, to
receive information on the strengths and weaknesses of the buyers, the importing country
and the existing market trends. Netaji Apparel Park has also been formed by the combined
effort of the Government and the TEA exporters. The Park has 53 companies engaged in
knit-wear production alone.

The government bodies have also been rendering their support to uplift the industry.

45

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

 3.5.4. SUPPORT FROM GOVERNMENT BODIES
3.5.4.1. TEXTILE COMMITTEE
The Textiles Committee (TC) has promoted with the objective of monitoring and
certifying the quality of the textiles and garments exported from India. Over a period of
time, the Textiles Committee has taken a number of initiatives like motivating knitters to
manufacture technical textiles.

3.5.4.2. SITRA: The South India Textile research association has been providing
consultancy services like shrinkage control of knit fabric, colour fastness, improvement
in dyeing and printing.

The growth of the industry can be assessed through the elements of competitiveness.

3.6. COMPETITIVENESS OF THE INDUSTRY

In this section, the features that have influenced the competitiveness of the industry,
such as the factor conditions, policies of the government, demand condition, strength of
related supporting industry and the firm structure strategy, have been focused with the
help of Michael Porter’s Competitiveness of Nations model (1990).

3.6.1. Factor Conditions

Input has been a necessary element to compete with any industries, with respect to
labour, arable land, natural resources, capital and infrastructure. All classical theories in
trade such as Adam Smith’s absolute advantage, comparative advantage of Ricardo, as
well as Hechesher-ohlin theorem, have rested on the factor of production.

Availability of raw materials from Dindigul and Coimbatore, a major centre of

cotton spinning mills in the country has helped Tirupur to easily access its basic raw
materials quickly; when required. Laborers’ have been provided with ‘on the job
training’. Services like logistics, accounting, ESI &PF, services for testing and inspection
have been normally available at affordable cost. Strong entrepreneurial skills and their
direct management of day today affairs have contributed to the effective management and
direct control of the operations, creating cost effectiveness in the Industry. With the help
of Inland Container Depot, logistics inconvenience has been resolved.

46

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

 3.6.2. DEMAND CONDITIONS

Knitted garments have found their markets all over the world and the consumers
have belonged to all age groups from children to the aged. Diversification in the export
market with respect to the T-shirts, jerseys, pullovers, cardigans, ladies blouses, dresses,
children wear, sports wear, night dress, swim wear, industrial wear & non apparel
products like gloves have been therefore a logical step for the industry, for a higher value
addition. Business environment, Quality & reliability of the products, prevalence of
business ethics and readiness to face high risk in the market (perceived as an investment)
have been the driving forces for growth. Proactive marketing has helped the industry, to
transform an insignificant exporter of knitted vests (banians) to become a dominant and
multiproduct exporter of cotton knitwear garments.

The next important feature that has influenced the competitiveness has been
discussed below.

3.6.3. Collective Firm’s Strategy, Structure and Rivalry

Industry generally tends to succeed where the management practices and modes
of organization have been favored by the environment to suit the industries’ sources of
competitive advantage. The attitude toward authority, norms of interpersonal interaction
and social norm have an impact on firms’ competitive advantage. Industry has been well
known for its collaborative working and high level of social capital. The high level of
subcontracting, existence of strong industrial associations with proactive knowledge
sharing and number of government schemes to support them have jointly benefited the
industry. The industry has an excellent standing, in terms of collective firm strategy.
There have been fifteen active industry associations, playing a commendable role in
supporting their members. Besides helping the members in clearing procedural formalities,
providing information for policy changes of the government. Gradually many export
houses have started to implement Corporate Social Responsibilities (CSR) related
initiatives like running of school for children from the neighbouring villages, clinics in
their own factory premises, periodical medical check up, HIV prevention etc.

47

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

 3.6.4. Related supporting industries

The industry has grown considerably over the last one decade with the joint
initiatives taken by the firms, through the related supporting industries. Supply chain
management, viz., the management of a network of interconnected businesses has
encompassed the planning and management of all activities involved in sourcing,
procurement, conversion logistic management, co-ordination and collaboration with
channel partners, which can be suppliers, intermediaries, third –party service providers
and customers.

Some of the infrastructural constraint and policy disadvantages that dampen the
competitiveness of the industry drawn as follow:

3.7. CONSTRAINTS OF THE INDUSTRY

Despite the inherent comparative advantage, the Indian garment industry has a
high cost structure, which has come in the way of maximizing the gain from the market.

South East Asian countries and China have been India’s main competitors who have
a lower labour cost. Since a large portion India’s exports have been from the lower priced
segment where labour intensity has been high, has it to improve the efficiency and
productivity to increase the cost competitiveness of these segments. As regards
manufacturing of garments and made ups, India has a significant cost disadvantage against
each competing country, primarily on account of high power cost and high finance cost.
The lower capital costs have been reflected from the low capital utilization in the clothing
industry. Slow technological up gradation has led to lower efficiency in quality and
productivity in the Indian clothing industry.

Export performance primarily has depended upon cost quality and strict compliance
of the delivery time. In case of mass market it has more of costs and delivery time,
assuming that a reasonable level of quality has been maintained. In such a scenario,
economies of scale have become important because higher scale of operation has provided
the opportunity to reduce per unit costs.

The industry has concentrated on high value added segments, reducing the labour
costs gradually. Labour has viewed as human capital in which investments have to be

48

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.

 made, both in terms of enhancing their technical capacities through training and by
materially enriching them through fair wage. In China, average wages in the garment
sector has been 72 cents per hour, in India it has been 51 cents per hour. Due to higher
wages, China would capture not only a larger segment of the mass market but has
gradually shifted its focus to much higher value added segments as compared to what the
Indian manufacturers have targeted.

Many exporters and buying agents in Tirupur have pointed out the greatest
weakness in the production techniques, have been seen specially in printing segments.
Acute shortage in power supply has become an important infrastructural hindrance that
has increased the production cost. Besides the simple escalation in energy costs, power
cut has interrupted the production process and has affected the delivery schedule.

3.8. SCOPE ON DEVELOPMENT OF THE INDUSTRY

Prior to 1985, Tirupur’s knitwear value chain had been characterized by low value
production, low value-addition and low value-retention. Later, the Investment had not
only increased the capacity to produce at high quality standard, but had raised the
efficiency of production. Networks of local out-sourcers had been established to increase
the cluster’s flexibility. Consideration has been given to establish a physical market
presence (a distribution warehouse) in Europe and USA. A strategy has been worked out
to establish the ‘TIRUPUR BRAND’ to strengthen the market awareness and
penetration and to enhance the overall value of the product. To reach the performance
level, the garment exporters have to establish the marketing strategies for a distinctive
positioning based on their capabilities.

The history of Tirupur as the king of Hosiery has been recapitulated in terms of its
past records and its future prospects. The strength and the constraints of the industry has
briefed from the point of view of the reported information and the theoretical exposition.
The condition on the field has to be elicited only through first hand information obtained
from the industry players. The study has been organized to obtain the opinion from the
300 manufacturing exporter respondents, chosen for the study. The analysis of the
opinion has been detailed in Chapter IV on “Implementation and impact of
marketing strategies – An analytical exposition”.

49

Please purchase PDF Split-Merge on www.verypdf.com to remove this watermark.