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Validating HypothesisThe US was selected as the most suitabledestination to carry out research as it wasfelt that this was the most competitivemarket – it is also Sri Lanka’s biggest buyer –so it made sense to focus our understandinghere because it had the potential to createthe biggest impact.

The research was a qualitative study as weintended to obtain insights to understand thekey criteria which drove the decision-makingprocess with these buyers. We alsoapproached key influencers who were lower-level executives in the purchasingdepartment.

The essential purpose was to validate ourassumptions and provide a basis for a clearlong-term positioning for Sri Lanka Apparel.We were not fishing for information, sincewe had a very limited budget and did nothave the luxury of carrying out follow-upstudies.

The outcome of the research challengedsome of our hypotheses. For example, theindustry was thought to be toounderdeveloped to be able to promise a‘partnering’ solution which required muchmore significant physical integration with thebuyers.This led us to explore other areas ofcompetencies.

Good manufacturing practices wereconstantly sought after and assurancesrelated to this was an important aspect thatsurfaced.This highlighted one of Sri Lanka’score capabilities of the industry – ethicalmanufacturing free of child labour anddevoid of human-rights violations.

The study found that ethical manufacturingwas a crucial point of differentiation whichhad still not been leveraged by any country.Awareness of the need to ensure ethicalmanufacturing was already in place –primarily amongst the buyers – following theNike sweatshop scandal some years before.

Hence, the ethical-manufacturingpositioning was thought to be highly relevantand persuasive as being a criterion whichwould get buyers to look at an alternativesourcing destination.

Research concluded that this positioningclearly resonated with current and potentialbuyers.This offer coming from Sri Lanka wasthought to be credible, supporting thesophistication of the industry in our country.

The apparel industry in Sri Lanka wassome 30 years old, and was therefore quite amature industry when compared to theother competitor countries. It is at theforefront of industrial excellence and socialresponsibility in Asia, conforming andcomplying with the norms of ethical sourcingbacked by strong legislation. And over thepast decade, as global interest focused onhow, where and by whom products weremade, Sri Lanka Apparel was already aheadof the curve.

Developing the StrategyThe key challenge now was how wedeveloped this into a strategy based on theminuscule budget that was available.

The answer lay in aligning the industry fullybehind this concept.This was easier said thandone.There were many stakeholders, with

different interests. For example,there are many apparelmanufactures, each with differentstandards, which somehow neededto be brought together holisticallyin order to offer a consistent brandpromise.

Clearly, the brand offering had totake into account the diversity ofmanufacturing standards, and thishad to be addressed in order forthe brand to be credible. In orderto do so, the brand ‘ethos’ wasarticulated by the industry.Thisestablished that Sri Lanka Apparelwas free of child labour, had ethicalworking conditions free of forced

labour, free of discrimination on any groundsand free of sweatshop practices.

All of this was linked to various industryinitiatives such as rural-poverty alleviation,women’s empowerment, educational andtraining support, environmental initiatives andworking towards a better quality of life for all.

The industry believes that female workershave become change agents on a wide rangeof issues from children’s education to healthissues. Hence, by creating a more equitablesociety, women can make a profound impacton the quality of life of the people and thedevelopment of society as a whole.

With 270,000 people directly employed(and one million indirectly linked to theindustry) it is big enough to make asignificant contribution to Sri Lanka’s qualityof life.

With the belief that one cannot have abetter life without a clear understanding ofthe key issues that confront them, bothprofessionally and personally, Sri LankaApparel’s mission has progressed beyond theworkplace to the community to include pro-people initiatives.

Supporting the StrategySri Lanka is, in fact, the only outsourcedmanufacturing country in Asia which hassigned up to 27 of the International LabourOrganization (ILO) Core Conventionscovering areas such as prohibition of forcedlabour and prohibition of child labour. Inaddition, the country’s strong labourlegislation demands safe and healthy workingconditions, governed hours of work, socialand security-fund contributions andenvironmental-protection standards.

In recognition, Sri Lanka is the onlycountry in Asia to have been grantedconcessions by the European Union (EU)under the GSP+ scheme for goodgovernance, which entitles duty-free importsunder certain criteria to the EU.

On the environmental aspects, Sri LankaApparel supports many initiatives focused onminimising its impact on nature. Much effortis being made to create sustainable growthby protecting the environment, both at theworkplace and in the community.International standards of recycling, effluenttreatment and waste-management practicesare followed to run the operations at

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Building brands is complex and takesconsiderable time, effort and focus.This istrue of products as well as of services.Thetask then, of building a brand for a totalindustry, would be so much more complex.

As a result, there are no brandedindustries in Sri Lanka although we have abusiness history going back some 150 years.The tea industry – one of the oldestindustries in the country – does not have anall-encompassing brand.Yes, we have theCeylon Tea ‘trademark’, which is only atrademark or sign, it is not a brand.

A product or a sign becomes a brand onlyif it stands for consistent and coherentfunctional and emotional values which areunique.These have to be actively built andmanaged over time. Much of Sri Lanka’s teais still sold in bulk, and it is a commodity inwhich price plays a critical role. It is theDilmah, Mlesna and the Akbar brands whichhave built a business around brands. Andthese brands are as powerful as Coca-Colaand Apple in their ability to draw vividemotional triggers in the minds of their loyalconsumers in different parts of the world.

Sri Lanka Tourism, too, has been dabblingwith creating a brand. Some years ago itcame up with an advertising slogan ‘A landlike no other’ but once again, this is not abrand, it’s an advertising pay-off line whichwill change over time. Powerful brands donot change.They have a specific positioningwhich is maintained consistently.

Sri Lanka Apparel is, therefore, the veryfirst local industry to go through a strategicprocess of creating a brand for itself. A brandthat can compete with the apparel industriesof other countries in this highly competitivemarket with a unique positioning.

This initiative is expected to lead Sri LankaApparel to create a point of preference,leading to the establishment of a muchstronger platform from which to commandbetter prices in the global marketplace.

The key starting point is to establish theframework for the marketing plan. Based onthe realities of this business, it wasestablished right at the outset that we wouldfocus all our efforts on the industry itself,rather than dissipate our meagre resourcesby approaching the end purchaser, theconsumer.

The overall plan, which was formulated by

STING Consultants, was therefore highlyfocused with a clear objective, which was todirectly approach the core buyers of thelarge apparel manufacturing companies basedin the US, the UK and Europe, and convincethem to look at Sri Lanka as a preferredsourcing destination. Essentially, a B2Bmarketing plan, amongst a maximum of 500potential apparel buyers.

The logic was that if we could convince asmall proportion of the top companies toswitch a small percentage of their ordersthrough this marketing effort, it may wellmake a huge impact on the local industry.The switching, however, must happenthrough a value-added incentive and notsolely based on cutting price – that was thechallenge.

Start with Available InformationThe starting point in any strategic exercise isto gather all the available information.Thisinformation very often does not reside inreports and presentations – it lies withinpeople who are working in the industry.

There is always a huge reservoir ofinformation based on real-life experienceswhich should be tapped into and skilfullydistilled down to form conclusions.The firststep therefore, was to have a brainstormworkshop to understand the barriers andopportunities for growth in the local apparelindustry.

There were several hypotheses that cameout of this which were directly linked to thepurchase-drivers for large internationalbuyers (see chart below). Price often playssuch an important role that the challenge inexercises such as these, is to set aside thisfactor (temporarily) and look at value-addingpurchase-drivers as the key to the solution.

This analysis led us to developing aframework for possible positioning for thefuture Sri Lanka Apparel brand.

In building a brand, it is essential that theagreed positioning should be enduring, so itcan be sustained over the long term.Thisrequired us to ensure that we based ourstrategy on facts and not just on gut feel,which led us to validating our hypothesis.

Recognising the importance of this, aninvestment was made into market research.

The selected research partner approachedthis exercise in a highly innovative manner.The Nielsen Company (formerly ACNielsen)who carried out this part of the project sentone of its local researchers to New York toconduct the study.

A local person was thought to be moreappropriate in order to obtain first-handinformation and feedback through thisresearch.The researcher was thus able tohave direct contact with a representativesample of key decision makers in apparelcompanies that were operating in the NewYork area.

A Case for IndustryBranding – Sri LankaApparelSTING Consultants

Sri Lanka Apparel is Ethical

GAP

Mattel

These examples clearly demonstrate thedifferentiation that Sri Lanka Apparel canmake as a reliable manufacturer in anincreasingly interconnected world, which isnow more acutely aware of global socialresponsibilities.The way companies dobusiness is now directly linked to theirperformance which in turn impacts thereturn on investment to shareholders.

Despite these factors, the issue that theapparel industry has to contend with is therelentless drive of buyers to obtain theirsupply requirements at the lowest possible

price.This is dictated by the need tocontinue to improve margins to providebetter returns. Consumers too are extremelyprice-conscious and shop for apparel whichprovides the best value.

Maintaining an ethical manufacturingpractice is not cheap.There is a cost to thiswhich apparel buyers and consumers needto appreciate.The dilemma will alwaysremain, balancing higher priced productswhich are manufactured under goodconditions, with lower priced cheaperproduct which may not have all the social

assurances.Sri Lanka’s challenge, therefore, is to move

up the value chain, increasingly providingmore intricate and complex apparel whilstensuring that its manufacturing capabilitiesare the best in the world.Yet, there is a needto be price-competitive, which means energycosts need to be low, transportation needsto be more efficient and the industry still hasto rely on a globally competitive wage toworkers.

Thus, the Sri Lanka Apparel brand has toplay this vital role of creating an overallhigher-value perception by encompassingthese important emotional aspects andcapturing them within the brand.This mustlead to large influential buyers looking at SriLanka as the ideal sourcing destination whichis able to meet the requirements of theirstakeholders.

The long-term goal is to be able toeventually reach out to consumersthemselves, and to establish the uniquevalue-added capabilities of Sri Lanka Apparel,similar to what the British used to believeabout Ceylon Tea, many decades ago.

Whilst those running the Ceylon Teaindustry did not foresee the value of anoverall industry branding initiative at thattime – and let the opportunity slip through –the apparel industry on the other hand, canforesee the future and is leading the chargethrough a highly differentiated brand strategyin the global marketplace.

AcknowledgementsThe Sri Lanka Apparel brand was createdthrough the teamwork of the following: JointApparel Association Forum former ChairmanAshroff Omar for approving the initialstrategy recommendation, current ChairmanAjith Dias for leading the implementationand roll-out, Chairman of the Image Buildingcommittee Kumar Mirchandani who was incharge of the entire project from inception,STING Consultants for the process,establishing the strategic direction andcreating the foundation on which the brandwas built,The Nielsen Company for carryingout the market research in New York – US,and Grey Worldwide for creating the brand,leading to developing and implementing thelocal and international integratedcommunications programme.

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optimum environmental efficiency.In order to ensure that we are able to

deliver on the brand promise, formalising aself-regulatory and monitoring system wasessential.To implement this aspect, Sri LankaApparel commissioned the Swiss-based SGSGroup, the world’s largest organisation in thefield of inspection, verification, testing andcertification, to monitor the Sri LankaApparel Code of Conduct.This certificationwas crucial to support the brand offeringand to ensure that the diverse organisationswhich form Sri Lanka Apparel is broughtunder an integrated net.

The SGS Group which specialises in thisfield has more than 250 auditors with socialaccountability expertise in 40 countries.

Creating the Brand IdentityThe brand strategy based on the overallframework of the project which had beenestablished right at the outset, was to takethis compelling proposition directly to the500 core decision makers based in the US,

Europe and the UK.The challenge was to then bring the brand

to life through a compelling creative idea,relevant to that core group.

Grey Worldwide conceptualised thebrand, visualising the brand identity andcreating the now famous line ‘Garmentswithout Guilt’.

The supporting collateral reinforced thisidea, through a fully integrated directmarketing campaign.

The limited budget necessitated that wekeep away from conventional media andreach out through other channels. Directone-on-one communication is a key methodof disseminating the message. Industryexhibitions showcased Sri Lanka’s ethicalbrand which has been able to reach outthrough websites and innovative Web-marketing initiatives which are extremely costeffective.

AchievementsThe brand was launched to the local industry

in August 2006.The international launch tookplace at the FATEX exhibition in France inNovember 2007. Soon after its launch SriLanka Apparel were commended for thisinitiative at a presentation which was madeto senators, their representatives, chambersand NGOs in Washington D.C.

Meanwhile the industry is now using theGarments Without Guilt tags on sampleclothing which are sent to buyers throughoutthe world.The supporting marketingcollateral is also being used by individualcompanies in their promotional initiatives.

Plans are under way to implement a viralmarketing initiative on the Web. In addition,the message has been disseminated throughforums such as the ILO and the CeylonChamber’s Economic Summit. Furtherinitiatives are planned at environmental andsocial-responsibility forums.

FutureIn September 2007, Mattel, a manufacturer oftoys, suspended supplies from China due tothe detection of products which containedmaterial that was potentially poisonous tochildren.

And, in October 2007, Sri Lanka’s singlelargest buyer GAP Inc. of the US, found thatone of their suppliers in India was using childlabour.This resulted in GAP halting allsupplies from India, to investigate this and toreview their sourcing partners.

Such news obviously has significant impacton the performance of these companies,with dire consequences to shareholders, ascan be seen from the charts.

Indian sweatshop announcement