TABLE OF CONTENTS SL
Chapters
Pages
1.0
Executive Summary
4
2.0
Methodology
4
5.0
Introduction
5
6.0
Marketing Audit
6-11
7.0
Marketing Planning
12-16
8.0
Evaluation Report
17- 18
9.0
Bibliography
19
10.0
Reference
19
11.0
Appendix
20-23
Executive summery: This industry was established at June 2010 and recently wants to settle on commercial production. Before doing this, a brief marketing plan is needed. Because, it is an important issue that without planning the whole preparation would be failed. From marketing audit there is identified some information about its market, customers, competitors, distributors and some other internal and external issues. There have found many opportunities and some threats in the market. The plan is helps this industry to utilize those opportunities and reduces or control the threats. Moreover, firm should not go for segmenting their market rather differentiate their product in their customers mind by giving something new and do the best. By adding value company can make its profit higher rather reducing their price. There is a brief discussion about how can facilitate a cost leadership advantage. They use some new technologies and sophisticated machine so it is needed to make skill their labors. Because, high technology would be danger if anyone can’t handle it properly. Implementation is needed for any plan so; management should allocate their resources in proper way. It has no doubt that this plan if implemented in the right ways will achieve the desired outcome for launching there new product in the market and setting a new standards for socks industry in the Bangladesh.
Methodology: Preparing for this marketing plan I get information from primary and secondary data. Primary data: Primary data are collected from survey, FGD with some experienced persons, deep discussion with company’s Chairman, Managing d irector and other responsible persons. Secondary data: From websites, articles, journals, previous student’s reports and other sources secondary data are collected.
Introduction: This marketing plan is concerned with the development of strategies that are based on the planning term’s measurement measurement of the market and perceptions perceptions of managerial managerial expectations expectations and organizational capability. Various tools and terms are used for medium term planning marketing strategy under this process:
This report is structured to discuss the following: Analyze the situation Set the realistic objectives Generate ideas and develop sensible strategies Choose different tactics to support strategies Implementation the strategies with action plan Control, monitor, measure, report and adjust.
Marketing Audit / Current Situation: Marketing audit is identified as a crucial part of a professional marketing planning process. It is nothing but an analysis to find out the past and prese present situation situation of an organization. There are various internal and external factors which influences the company’s current situation. For this reason marketing audit describes those factors so that we can make decision what will be our strategy for making effective marketing plan. Overview of the market: Market
- The fastest growing industry in Bangladesh with Readymade Garments (RMG) accounting for more than 75% of total exports. - Bangladesh is best place in the region for textiles and garments because of cheap labor and trade status with the EU. - Sock industry is under the criteria of Readymade Garments (RMG). So, it would be great opportunity for launching this product. - Though most of the people (about 70%) people live in rural area urbanization is not stop in recent years. Country people are getting education and office going people are growing. Demand of sock is increasing day by day both urban and rural area. - The population in Dhaka city is more than 7.0 million (est. 2008) and the population is growing by an estimated 4.2% per year and literacy literacy rate is 62.3%. Competitors: - There have a small number of sock industries (i.e. Total Socks Ltd., Prag Socks, Hamim Socks, Savar Socks Ltd., Zara Socks etc.). Prag, Zara and Hamim go for product branding. But their product quality and production production capacity is not not same as Classsical Socks. - Prag has two sock’s outlet in Dhaka (Capital city of Bangladesh) city. From their outlet Prag make order for retail and wholesale. They have few Indian machines and poor production capacity, so they cannot go for export or make huge order. - Total Sock is not interested for local market. Their production capacity is 1.5 lac / month. This industry is using Korean machine and technology similar to Classical Sock. - Zara and Hamim go for product branding in the local market. But they can’t get success in this market due to lower quality and lack of strong positioning. - Sometimes retailers changing the tags and telling customers this sock is made in France, China, India, Thailand. People not to buy brand or quality, people just buy the name of made in or attractive packet. Customers: - We found most of the customers are living in urban area, educated, students, and office going executives. - Male prefers socks rather than female in Bangladesh. Because female prefers sandal shoes rather than shoes. - Customers are not aware of local socks brand. Most of them go branded shoe stores (i. e. Bata, Apex, Jennys, etc.) or road side socks stalls. Sometimes they buy Nike, Power, Foreman , Addidas and many other tagged socks. Even the socks are not produced by those companies. Interesting thing is Bata, Apex, Jennys are not sock manufacturer.
- Customers are price sensitive. In the survey question we got, 52% people considerd the price as their first choice while go for buy socks. Moreover they (customers) put their first choice for quality 36%, 4%for style, 3% for design and 5% for color. (plesase see the appendix-D) - None of them can recall the brand name of Zara, Hamim sock from their memory. Only 1% people know the name Prag socks socks and buy from their outlet outlet - Branded shoe stores have huge demand of socks. Bata country (Bangladesh) production manager- Mr. Mefuj Ahmed says, “We have demand of 15 million socks per year. Most of the time local manufactures fails to provide that orders and quality what we needed.” Analyze the Macro and Micro Environment: The below three analyses will represent both macro environment (political / legal, economic / demographic, social / cultural, and technological) and micro environment (customers, competitors, distributors and suppliers):
PEST analysis SWOT analysis Porter’s five forces
PEST analysis: PEST analysis is the most common and important tool for marketing audit. Political analysis / legal: Bangladesh is a country of river and has tropical monsoon-type climate, with a hot and rainy summer and a dry winter. The government is followed by parliamentary democracy.
f ollows: Legislation: The legislations in force are as follows: Patent and design act of 1911 Patent and design design rule of 1933 Trademark act 1940 Copyright act of 1999 Government polices for foreign investment: There are equal similarities between foreign and domestic private investors regarding investment incentives or export import polices in Bangladesh. Incentives for investors: 100% ownership in most sectors; tax holidays; reduced import duties on capital machinery and spares; duty free imports for 100% exports; and tax exemptions.
Economic analysis: Economy situation: In 2011 Bangladeshis per capita income is estimated US$1,700 (adjusted by purchasing power parity) which is increasing. But this income is significantly lower than India and Pakistan, both which are also lower than the world average of US$10,497. The economic growth rate is 6-7% per annum over the past few years. There more than half of the GDP belongs to the service sector; almost half of the Bangladeshis are employed in agriculture sector, with RMG; fish vegetables, lather and lathe goods, ceramics, rice and others produce. The ease of doing business rank is 107th position. Bangladesh corporate tax rates: In 2008 – 2009 tax years corporations tax rate are as follows: Publicly traded company 27.5%
Non publicly traded company company Bank, Insurance & Financial company Mobile phone operator company
37.5% 45% 45%
If any publicly traded company (excluding Mobile Operator Company) declares more than 20% dividend, the company is allowed 10% rebate on total tax. Social analysis:
Bangladesh has the highest population density in the world, excluding a handful of city-states and small countries such as Malta. Demographics of Bangladesh: Population: 156,050,883 (July 2010 est.) Growth rate: 1.292% (2009 est.) Life expectancy: 60.25 years Age structure: 0 – 14 years: 34.6% (male 24,957,997/female 23,533,894) 15-64 years: 61.4% (male 47,862,774/female 45,917,674) 65-over: 4% (male 2,731,578/female 2,361,435) (2006 est.)
Here major Ethnic group is Bengali and minor ethnic are Santhal, Chakma, Garo, Bihari, Oraon, Munda, Rohingya. Official language is Bengali, people spoken in Bengali, Tribal languages and English. Mega-city of Dhaka has a huge population, but the majority of the people nonetheless still live in villages in rural areas. Technological analysis: Bangladesh has been struggling to achieve their basic needs of its people. Besides their living cost and inflation rate is increasing day by day. Bangladesh Government takes some initiative for their technological advances and ICT related projects. Some foreign technologies come to this country and produce machineries and other technological equipments equipments and developing roads and highways in recent years. Also there is improvement at telecommunication sectors and digital media sectors. There have allowance and duty free facilities for importing computer and IT related products in Bangladesh. Bangladesh. SWOT analysis: One of the most important tools of marketing audit is the SWOT analysis or Strengths, Weakness, Opportunities, Threats analysis. a nalysis.
Strengths:
f inancial capability of this industry. 1. Financial capability: There have strong financial 2. Suitable Location: This factory is situated alongside Dhaka – Sylhet high way and there have enough parking area for loading and unloading goods and materials. For this reason suppliers and buyers can easily communicate with this factory. 3. Management expertise: Managing director and other managing body has more than 20 years business experience at garments and textiles sector.
4. Large factory space: There have more than 6500 sqf. space for knitting and finishing area. Because of two stored building there have enough space for warehouse keeping their stocks, cottons and other materials. 5. Production capacity: There have more than 1lac pair socks production capacity with good quality per month. 6. Intangible factors (Such as brand): Their brand name is Classical Socks is a product of I. Ahmed Textile Mills Ltd. This industry is a sister concern of Classical Home Tex Ind. Ltd. Locally Classical is a very well reputed brand for home textiles. Weakness: 1. Raw materials: This industry is highly dependent on cotton. Bangladesh also much more dependent on other foreign countries for this raw material. 2. Dependent on local buyer: Till now this firm is not targeting foreign buyers. So, most of their socks buyer is local and not willing to pay more though raw material cost is increasing. 3. Unskilled/uneducated labor: Only 2% workers have academic certificate or have technical certificate. 4. Energy maintenance cost: There is not sufficient power supply in this country. For this reason, they are dependent on generator which increases the industry energy maintenance cost. Opportunities 1. Demand of quality socks: Business buyers like Bata Shoe Company (Bangladesh) Ltd., Apex Footwear Ltd., and Bay have huge demand for quality socks. 2. Emerging new technologies: Emerging new technologies socks knitting machine suppliers will supply advanced machine by which sock’s core quality will improve. 3. Increasing new shopping malls: Local shopping malls and shoe stores are increasing. For that reason, socks demand will be high at that retails outlets. 4. Increase purchasing power: Bangladeshis disposable income and purchasing power is increasing gradually. gradually. 5. Not enough competitors: There have many garments factory in this country but have few of them interested in sock industry. Threats: 1. Existing competitors: Already Comfort socks and Total socks are enjoying fast mover advantages. developing countries like 2. Other developing countries: Competition from other developing China already captured international market and using modern technology. 3. Duty free textile machinery: Allowance of duty free textile and garments machinery is an opportunity of other competitors. 4. Local banks have not sufficient reserves: In recent year banks and other financial institutions reserve is not good because of stock market corruption and some other reasons. 5. Balance between price and quality: There is a challenge for making balance between price and quality. quality.
According to Porter (1980) the competitive structure of an industry can be analyzed using Porter’s five forces. This model attempts to analyze the attractiveness of I. Ahmed Textile Mills by considering five forces within a market. In this analysis microenvironment factors (customer, competitor, distributor and supplier) are considered. Those five forces are defined as: Porter’s five forces model:
1. The likelihood of new entry: Socks knitting machine is highly sophisticated and technological based. For example: There must have proper air passing system with each and every machine. After machine installation the whole knitting room will have to control air temperature for continuous production. So this types types of industry has high entry cost. Bangladesh government imposes high tax for imported readymade garments. For this reason it is a great opportunity for local manufactures of readymade garments. Majority of local customers are not loyal for brand socks (See the page 5, market overview). But there have huge demands of socks in local and international market. There have huge demands for quality sock in the existing market. But it should be in reasonable price. 2. The power of buyers: I. Ahmed targets some business buyers who have needed quality socks (i.e. Bata Shoe Company Ltd., Apex Footwear Ltd., Jennys Footwear Ltd. etc.). Those firms are few in number, so buyers have more ore bargai argain n power for reducing price. Business buyers can’t switch another provider easily while they searching for high quality socks. Because, there have few providers who are capable for providing highquality socks. Local wholesalers can easily switch another provider. Moreover, they are concern about their sales commission rather than quality. 3. The power of supplier: There have many cotton suppliers in local market. A big retail market is in Narayngonj named Tanbazar. All of those suppliers manage cottons from knitting garments which price is more or less same. So, there have many options for buyers. But the thing is one supplier can’t provide large quantit y of similar color cotton at a time. For this reason, sometimes sometimes buyers depend on suppli suppliers and have to pay high price due to unavailability of same types or same color cottons in market. Switching to another supplier is not so difficult or expensive at this market. In this situation suppliers don’t have more power. In this year international cotton market was out of controlled and fluctuated. So, local suppliers can easily playing game in recent year. Besides, Uzbekistan, India and some other countries stop exporting cottons. 4. The degree of rivalry: There have few dominant firms where high competition does not exist. Cost for leaving is high for this type of large firms. Because there have some high installation cost and machines resell value is not good enough. Bangladesh is an over populated and developing country. Moreover educated persons and office executives are increasing gradually. Because there are rising many multinational or group of companies. Educated and officials are the end users of this product. So , market is expanding and firms can easily gain their profits and sales. There is little brand loyalty in the market so customers of socks are likely to switch easily between products.
5. The substitute threats: In summer season there is so much sun in Bangladesh. Most of the People prefer sandal shoes in summer time. For that reason socks demand is fallen down at summer season.
(For detail analysis, please see page-5, Overview of the Market )
The power of buyer
1.0 - Time and Demand of quality socks in existing marketSources of raw materials 2.0 Dependent on local buyers 3.0 Unskilled & uneducated labors 4.0 High maintenance cost of
Likelihood of new entr
The power of supplier The degree of rivalry
- Business buyers can’t switch to another industry easily. - Business buyer’s have bargain power in some cases. - Consumers can easily switch.
- Have few dominant companies. - Cost of leaving is high. -Existing market is expanding. - Little brand loyalty in the existing market.
- Depends on local cotton supplier for raw materials. - Switching to another supplier is not costly. - Local suppliers have
The substitute threats
- Shoe sandal is substitute for shoes at summer time.
orces used at I. Ahmed Textile Mills Ltd. Porter’s five f orces
Assumptions:
From that discussion some assumptions come out: 1. There have much potential in the current market. 2. Market is expanding so always be careful about new entrants and existing competitors. 3. Customers are sensitive, so do the best thing and do the thing best. 4. Bangladesh economy is stable. It could be opportunity for launching new product. Similarly it may be a threat while other competitors use that possibility. 5. Check and balance between demand and supply.
Marketing Plan: It is obvious that without planning it is not possible to achieve the goal what you want to be or where you want to reach. Mission: Try to be number one manufacturer within 3 year due to capacity and quality. Objectives: There have few objectives for marketing plan of this industry. Objectives should be clear, measurable and have a stated time frame for achievement. The below objectives are subject to SMART criteria, that makes sure chosen objectives are Specific, Measurable, Achievable, Realistic and Time-related. Obj. # 1: Within 3 months achieve best output from machine. This objective can make sure the quality of the core product. Obj. # 2: Try to achieve 80%production of total machine capacity within 6 month. Till now this industry is testing their machine and not going for commercial production. It will be generate the overall efficiency of this industry. Obj. # 3: Reducing overhead cost and making balance between cost and price. As a new industry there have many mistakes and lack of knowledge about sock’s knitting machine. Labors must be aware of the overhead cost and maintenance process of new high technical machine. Price should be reasonable. Obj. # 4: Increase sales in retail stores by 20% within 1 year. Obj. # 5: Make this industry as a trusted manufacturer within 1 year. Establish its trusted brand name (Classical Socks) in customers mind.
Strategy:
Johnson and Scholes (Exploring Corporate Strategy) define strategy as follows: "Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations".
An organization takes different strategy in different way due to their particular objectives and purposes. Strategy has no value if there is not found f ound any action and action should be measure by resources and other factors. Company’s strengths and opportunities can be used for reduces weakness and control threats. If we use the strengths and opportunities in a competitive way by following strategy it will be helpful for achieving the goal.
So, we come to know why we should follow strategies for an organization. Here this industry’ s SWOT transformed to TWOS by following some strategy. How I. Ahmed Textile Mills Ltd. used the TOWS matrix in its sock division: Weakness: Sources of raw materials Dependent on local buyers Unskilled & uneducated labors High maintenance cost of energy, machinery equipments.
Internal Strengths: Enough financial capability Suitable location Management Expertise Large factory space Production capacity Intangible factor (i.e. Brand name)
Internal -
External Opportunities: Demand of quality socks in existing market Emerging new technologies Increasing new shopping malls Increasing purchasing power of parity of customers. Not enough competitors in existing market
S-O strategy Increase production capacity Purchase new machines Develop new brand and design and quality Promote the brand
W-O strategy Trying to catch new market(market development) Develop HR and R&D sector Reduce maintenance cost
External Threats : Existing competitors Other developing countries Duty free for textile & garments machineries in Bangladeshi market Recent financial crises in local bank Balance between price & quality
S-T strategy Reduce production cost Develop new technologies and logistics Develop customer relationship management
W-T strategy Waiting for bank’s stable position Product development
Strategies Tactics Actions
-
The TOWS matrix (adapted from Weihrich, 1982) 9
Target market: I. Ahmed Textile is neither a retailer nor a trader. They are only manufacturing the socks. For this reason if, this industry can’t utilize its product capacity or can’t 100% sale of its total producti on it is obvious it’s per unit production cost will be high. In this case, this industry should targets: Large quantity buyers (Bata Shoe Com., Apex Footwear, Jennyes Etc.) Wholesalers Importers (Develop new market)
So, this industry goes for planning how to serve those buyers and how to make ensure quality with minimum cost of production. There have huge demand of sock at business buyers. (See the explanation at page-5, Market overview)
Positioning statement: Classical Socks – A brand you can trust.
It will not be a wise decision to go narrow market for I. Ahmed Textile Mills Ltd. Because, this industry has large capacity and trying to reach at the number one position of socks manufacturer in Bangladesh. For that reason, as large volume industry areas of differentiation would be: Product Distribution Image
Product Differentiation: The following uniqueness can give competitive advantage:
The size, shape and the components of the sock. For example, manufacturer present plain socks with formal or simple design. But there are lots of youngsters wear plain socks without satisfy the socks design, shape or color. Because, there have changed at Bangladeshi culture, people’s psychology, thinking and behavior etc. The product performance and quality can be a measurable issue. Form our research we found that people define the quality of sock’s by elasticity, cottons, color durability etc . (see appendix – D) The product performance consistency, that means hold the same quality for all orders.
Distribution: In Bangladesh retail stores sales sock by single pair and there is a tradition that socks must be covered by plastic bag. It is manufacturer responsibility to package all of the products for end users. In this case, while Manufacturer Company distributes their products they must aware of how they package and how they distribute? It is important for this industry develop their website for making foreign buyer.
Business buyers give order for a month, but want delivery twice or thrice in a month. So, there must have the arrangement of transportation for delivering goods with good condition. Unique channel--offer a service over the phone or Internet instead of in person or in their office rather than manufacturer. Image: Manufacturer while choose wholesales or business buyers, generally they are not concern about creating brand image if they can’t use their brand name on the product. This industry has to think different way: Bangladesh Government arraigning Trade Fare in every year. Lots of foreign countries are come together with their various products. I. Ahmed Textile has to go for promoting their product (Classical Socks). In this way they can make influence the foreign business buyers. Customer relationship management can create its image to t heir customer. Though first time this industry becomes much depended on their business buyers, it will not be wise decision in long term it is continuing. Besides, they can’t make profit much if they can’t reach the end users. Bata and other business buyer s are not selling others brand though they selling others product. In this situation, this industry may arrange press conference and take another public relation activities. For example, this industry may arrange seminar, invite their buyers give chance to say something and forecast it by popular TV, Radio, and Press media. media.
Similarly this industry has to be cost leadership in different way: It is needed also be a cost leadership in different way for a firm. Because, without minimize their cost they ca n’t get profit though they differentiate their product. In this present situation of the world there always recession is occurred. For this reason, we must concerned about to reduce or control our cost but not stop adding value. So, it is important to follow the bellow techniques:
Labor efficiency Standardization, specialization, and methods improvements Technology-Driven Learning Better use of equipment Changes in the resource mix Product redesign Network-building and use-cost reductions Shared experience effects
Actions: Risk management: There may have something that could be wrong with this company. The marketing plan for the new product / service may not implement within this industry.
A risk management process should be in should any of the below incidents occur: Lack of knowledge about new machine and handling tools. Unskilled cheap labor selected. Lack of budget Communication gap between industry and head office.
Action plan:
The below chart describes the action plan for the year: Activity
Jan
Building the team
X
Allocate the planning budget Launch an informational brochure Choose CRM system
X
Choose distributors Build supply chain management Develop the website and upgrade Develop design of the product Create a launch event and invite media Trained the quality control team Arrange internal seminar Building strong communication with buyers even vacation
Feb
Mar
Apr
May
June
July
Aug
X
X
X
X
Sep
Oct
Nov
Dec
X
X X
X X
X X
X
X
X
X X X
It will take time for every planning and implementing. But from the first we have to concern about what would be our action and how to control the present situation. Consequently, company top management should make clear the plan and organizational goals. As a new established industry the must to make it complex. Because, all of the stuffs and employees are new to this organization and it’s working environment. Sometimes, even a hard and complex task would be easy while management take the instant initiatives in easy way.
