Nalli Silk Sarees (B) –

An Abstract by M.D.Karthik, PGDM1, Roll N0-1403

The abstract is about the interview conducted with Ramnath K.Nalli,

Vice Chairman of the Nalli Group and his daughter Lavanya K.Nalli (HBS MBA

2011), the fifth generation entrepreneur in the family business.She introduced

the NalliNext format which appealed the young urban women with

merchandise more suitable for business and casual wear. A comparative

analysis has been made regarding the impact of increasing shelf space for silk

sarees and reducing the shelf space for cotton sarees. Silk sarees and Cotton

sarees have their own market share and they cannot be replaced. Decreasing

the shelf space for cotton sarees will result in the young girls losing their

impression on Nalli Silks and this will change the customer profile of Nalli Silks.

A significant loss of the young urban women customers will be seen. The shelf

space for silk sarees can be increased by reducing the shelf space for items like

children’s clothes, men’s wear and synthetic sarees in the same order.

According to the weather conditions of a particular region, the shelf space for

silk sarees and cotton sarees are increased and reduced accordingly(Delhi has

more requirements for silk sarees in winter and the hotter regions in India

have increased demand for cotton sarees). The product mix cannot be

compromised because in a small store like in Mumbai, the highest sales per

square feet month is generated. Also the other factor to be considered is the

cost comparison which customers are engaging in. The price of the cotton

sarees cannot be increased as this will hamper the customer beliefs. Cotton

sarees are not loss leaders and the silk sarees are in equal demand from the

customers. The “Balancing Effect” is achieved by the “fixed price” policy of

Nalli Silks and Sarees.