BEHAVIORAL FINANCE ASSIGNMENT

SECTION A

GROUP -7
DEBAYUDH ROY -2023069
DHANANJAY GUPTA – 2023072
SHREYA V – 2023154
AVISHEK BEHERA – 2023175
1. INTRODUCTION
Investment techniques go beyond simple examination of financial statements;
they involve knowledge of real consumer behaviour as well. The Scuttlebutt
Approach, as defined by Philip Fisher, emphasizes the value of gaining
knowledge directly from the market by interacting with customers, retailers,
employees, and industry players. This method provides a ground-level insight
into brand awareness, demand cycles, and competitive positioning, often
overlooked in standard investment analysis.
To the purposes of this research, we have chosen Jockey (Page Industries), a
market leader in the innerwear and athleisure segment. Jockey has come up as a
premium brand in India, known for its high-quality fabric, durability, and
aspirational value. The purpose of this research is to analyse:

• The sentiments of Jockey among actual customers and dealers.

• Whether price policy and brand loyalty foster long-term growth.
• Whether Jockey's business model will be sustainable in an ever-evolving
retail landscape. With firsthand observations and face-to-face
interactions, we will attempt to gauge the viability of Jockey's success
and whether it is a viable investment opportunity to consider.
2. Field Notes & Observations
Store Visits & Employee Interviews
To gain an empirical knowledge of Jockey's market position, consumer trend, and sales
pattern, we went to two types of retail outlets:

• A dedicated retail store for Jockey products in Sanquelim.

• A Multi-Brand Retail Store (Anand Stores, Panjim), which sells several innerwear brands.
Standalone Jockey Store (Sanquelim)
Employee Interviewed: Arfat Sheikh
Key Findings:

• Top sellers: Innerwear products like briefs, vests, and bras account for the highest
proportion of sales. The other departments like jackets, thermals, and zippers have a
slower turnover. The store often struggles to sell these non-innerwear products, and this
causes them to have periodic excess stock.
• Pricing Strategy: Jockey has a no-discount strategy where the store will not give
discounts to consumers. While it maintains high brand value, at times it dissuades
consumers who are anticipating seasonal selling or promotional price discounts.
• Consumer Behaviour: The repeat customers are strong, but these are mostly in the case
of innerwear. Other Jockey products, such as loungewear, t-shirts, and track pants, do not
generate high levels of repeat buying.
• Customer Demographics: The main customer segment is young customers aged
between 20-35 years with nearly equal segments of male and female customers.
• Competitive Landscape: Consumers trust the comfort and quality of Jockey and
therefore it is the aspirational innerwear brand of choice. The aspirational nature of the
brand also creates loyalty among customers.
• Barriers:
o There is stiff competition online. Most customers like to purchase Jockey products
online, where there are deals on websites such as Amazon and Flipkart.
o Non-innerwear items enjoy low demand since they are expensive, thereby less likely
to appeal to price-sensitive consumers.
Multi-Brand Local Store (Anand Stores, Panjim)
Employee Interviewed: Store Employee (6 years of experience)
Key Findings:

• Price Sensitivity: People compare Jockey's prices with others such as Lux Cozi and
Zivame. Although everyone admits Jockey's higher quality, price becomes a determining
criterion for price-sensitive people.
• Brand Loyalty: In spite of the premium price, a major percentage of buyers specifically
request Jockey. Buyers who have used Jockey previously exhibit resistance towards
changing to alternative brands, thereby demonstrating high brand loyalty.

• Discount Policy: In contrast to the standalone store Jockey, the neighbourhood store
provides bundle discounts for buyers purchasing several items at a time. The store
encourages bulk purchases because Jockey does not support discounting single items.
• Product Range:
o This shop only retails Jockey innerwear and does not stock any other Jockey items,
including track pants, jackets, or tops.
o The reason is affordability by the buyer—customers want to buy innerwear from
Jockey but opt for cheaper brands in other clothing segments.
• Logistics and Inventory Control:
o Jockey's supply chain is effective, and there are no significant stock shortages.
o The business very rarely receives complaints regarding late delivery or inventory
shortage.
• Customer Satisfaction: The sole customer complaint has been price. There were no
complaints about product performance, fit, or durability.
• Observation - Shelf Space & Brand Promotion:

o Jockey is given a prominent shelf space in the store, ensuring good visibility to
customers.
o In-store promotional materials (posters, branding) were minimal compared to
other brands, with Lux Cozi and Amul Macho having larger marketing displays.
o Despite limited promotional activities, brand recall is strong, as customers actively
ask for Jockey products.
Customer Interviews
To complement the retailer insights, we interacted with customers to understand their
purchasing behaviour, brand perception, and willingness to continue buying Jockey products.

Customer Name Key Insights

Himalay (2nd-year MBA student) • Trusts Jockey for durability & comfort, but feels it's
overpriced.
• Prefers to buy online due to better discounts.
• Would continue buying but wishes for occasional
discounts.
Varun (2nd-year MBA student) • Sees Jockey as a premium brand and is loyal to it.
• Buys not just innerwear but also t-shirts & track
pants.
• Finds the price justified for the quality.
Aditi (2nd-year MBA student) • Feels Jockey’s quality is far superior to competitors
like Zivame, Clovia etc.
• Price is manageable but remains a factor.
• Has tried other Jockey products but is not a
frequent buyer beyond innerwear.

Key Insights Derived from Market Interactions

• The main source of revenue is innerwear.
• Jockey's business is founded on innerwear buying, with extremely high repeat buying
behaviour.
• There are some other product segments such as jackets, track pants, and tees with inferior
sale performance due to high prices.
• Accessories & non-innerwear products are impacted
• Most consumers most strongly connect Jockey with innerwear, as opposed to athleisure or
outerwear.
• The accessories are not available in the local stores due to their high costs and minimal
consumer demand.
• Jockey's premium price is warranted by quality but promotions force the buy.
• Customers recognize the elevated quality; however, a significant number perceive the
pricing as somewhat excessive. Online discounts are effective, leading to a change in
shopping behaviour towards online shopping.

Brand loyalty is high, but competition is an issue: Repeat consumers actively look for Jockey
products and are highly brand loyal. But others such as Lux Cozi, Zivame, and Amul Macho
still manage to attract price-conscious consumers.
3. Connecting the Dots
Brand Perception vs. Market Position
• Observation (From Store Visits & Customer Insights):
o Jockey is widely recognized as a premium brand, associated with durability, comfort,
and quality.
o Strong customer loyalty exists in the innerwear segment, with repeat buyers preferring
Jockey despite the higher price.
o Non-innerwear products (e.g., track pants, jackets) have lower demand due to high
pricing and limited perceived value.
• Financial Data & Market Position:
o Revenue from operations declined by 2.8% YoY to ₹45,817 million, indicating slower
growth.
o Innerwear & leisurewear contribute 99% of total revenue (₹45,361 million), while
other segments contribute only ₹456 million (1%).
o Operating profit margin improved to 19.47% (↑4.62% YoY), suggesting Jockey's
premium pricing helps maintain profitability.
• Key Takeaway:
o Jockey’s market position as a premium innerwear brand is validated by financials.
o Growth in accessories & apparel remains a challenge, aligning with our store visit
findings.
o Premium pricing sustains profitability, but it limits mass-market appeal.

Pricing & Competitive Landscape

• Observation (From Local & Standalone Stores):
 o Customers frequently compare Jockey’s pricing with Lux Cozi, and Zivame.
o Jockey maintains a strict no-discount policy, which discourages price-sensitive
buyers.
o Online discounts affect in-store sales, as customers prefer purchasing at lower prices
online.
• Financial Data & Market Trends:
o Net profit margin remains stable at 12%, indicating that Jockey maintains strong
pricing power.
o Competitors like Lux Cozi & Van Heusen Innerwear offer similar quality at lower
price points, increasing competition in the premium innerwear market.
• Key Takeaway:
o Jockey’s pricing strategy ensures profitability but limits volume growth.
o Competitors are gaining ground by offering comparable products at lower prices.
o The no-discount policy is a double-edged sword—it maintains brand exclusivity but
shifts some customers to online platforms for discounts.

Multi-Brand Retail Store Presence

• Observation (From Local Multi-Brand Stores):
o Jockey’s innerwear dominates shelf space, but accessories and apparel have minimal
visibility.
o Retailers only stock innerwear because it sells well, while other Jockey products are
ignored due to price sensitivity.
o Stock movement is smooth, indicating a strong supply chain.

• Financial Data & Supply Chain Analysis:

o Efficient inventory management and debt reduction helped improve financial stability.
o Debt-equity ratio improved from 30% to 12%, showing strong financial discipline.
o Supply chain efficiency aligns with store reports of regular stock availability.

• Key Takeaway:
o Jockey’s supply chain strength is evident in both market observations and financial
stability.
o Innerwear remains the core focus in multi-brand stores, limiting growth potential in
other categories.
o Expanding shelf space for apparel & accessories could drive higher growth, but
pricing adjustments may be needed.
4. Investment Recommendation
v Investment Verdict: YES

• Reasons Supporting Investment in Jockey (Page Industries)

o High Brand Equity & Customer Loyalty

Ø Jockey is identified by consumers with quality, durability, and comfort.
Ø Repeat purchase in the innerwear segment reflects strong brand loyalty.
Ø Even with its premium prices, Jockey has aspirational value, particularly among
youth (20-35 years).

o Leadership and Pricing Power in Markets

Ø Jockey dominates India's premium innerwear industry with its pricing power and
profitability intact.
Ø 12% consistent net margin and better operating margin of 19.47% (↑4.62% YoY)
are proof of its good business model.
Ø Pricer rivals like Lux Cozi and Zivame compete on price, but Jockey stands out
through premium positioning and quality.

o Financial Resilience & Supply Chain Robustness

Ø Page Industries' inventories turnover are slowing down (1.51, -7.1% YoY), but
innerwear continues to be a steady cash generator.
Ø Debt-equity ratio rose to 12% from 30%, reflecting phenomenal financial
discipline.
Ø No stockouts—Jockey maintains steady inventory levels, reducing lost sales. 4⃣
Premiumization & Expansion via E-Commerce Opportunities

Rising disposable incomes and urbanization are favourable for Jockey's premium
segment. Internet sales are growing, and that gives Jockey access to more consumers. If
Jockey adjusts price or promotion plans, non-innerwear categories can gain traction.

• Concerns & Risks to Consider Before Investing

o Revenue Fall (-2.8% YoY) Indicates Growth Challenges
Ø Jockey's total revenue fell to ₹45,817 million due to weak demand in non-
innerwear segments.
Ø Innerwear generates 99% of revenues but accessories generate only ₹456 million
(1% of revenues) restricting growth possibilities
Ø Brands like Van Heusen Innerwear are gaining traction, particularly in D2C
(Direct-to-Consumer) and online segments.
 o High Prices Limit Market Expansion

Ø Customers are price-sensitive and like to compare Jockey directly with Lux Cozi,
Zivame, and Amul Macho.
Ø Jockey's no-discount policy hurts company-owned store retail sales because online
stores lure consumers with discounts.
Ø The high-price approach is effective but limits market penetration into middle-
income markets.

o Offline vs. Online Discounting Challenges

Offline store sales are affected since consumers try offline but buy online at a lower price.
Jockey must align offline and online pricing strategies so as not to dilute its anchor stores.
Competitors use discounts aggressively to grab price-sensitive customers.

• Investment Allocation (Based on ₹1 Lakh Budget & CMP ₹40,515)

Buy 2 shares of Page Industries (₹40,515 x 2 = ₹81,030) for core exposure to Jockey’s
premium brand strength.