assaignment marketing rules

7/30/2019 assaignment marketing rules

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2.1 BACKGROUND/HISTORY OF BATA SHOE CO. BD. LTD (BD)

LTD:

The business that became the Bata Shoe Organization was established onAugust 24, 1894 in Zlin, Czechoslovakia by Tomas Bata, and included his

brotherAntonin and sister Anna. Although this business was new, the

Bata name had been part of a tradition of shoemaking for eight

generations, spanning three hundred years. It was one of the first modern-

day shoe 'manufacturers', a team of stitches and shoemakers creating

footwear not just for the local town, but also for distant retail merchants.

This departure from the centuries-old tradition of the one-man cobbler's

workshop was a brand new concept, creating an entirely new industry.

The Bata enterprise revolutionized the treatment of employees and labor

conditions. Tomas consistently maintained a human focus, creatingopportunities for development and advancement, and added compensation

for employees based on achievement. As the enterprise prospered, so did

the communities where it operated. Tomas believed that a focus on people

and public service was critical for business success. The enterprise built

housing, schools and a hospital near the shoemaking plant in Zlin. It

provided food and inexpensive rent during very difficult times. Bata

companies later provided rail services, construction, insurance, publishing

and a tannery in Zlin."The Bata System" devised by the Zlin team, and

later applied in other Bata Shoe Organization companies, organizedoperations into autonomous workshops and departments ("profit centre"),

allowing employees to contribute ideas and stimulate production, and

contributed significant breakthroughs in footwear technology. By 1938

Bata Shoe Organization had established a unique and widespread

presence, designing, producing and marketing footwear in more than 30

countries. The Bata Shoe Organization regarded itself as a

'Multi-Domestic'

Rather than multinational enterprise, making it a priority to contribute to

the economy in any new markets it entered. During the 50s, 60s and 70sthe Organization redoubled its focus on retailing excellence, international

footwear branding, advanced manufacturing techniques and extensive

employee training, another Bata tradition that dated back to the

Organization's earliest years. The Organization continued to expand its

retail operations, production facilities and moved into new countries

of operation. Thomas J. Bata, and son Thomas G. Bata, continued to lead


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the Organization with the traditional philosophy ensuring that each

operation focused on customer satisfaction. As the world-manufacturing

base for footwear shifted to developing countries. New business strategies

have been guided by the founding principles of focusingon customers,

marketing and employees. Branded products, innovative retail store

concepts, lifestyle merchandising, non-footwear products and participative

retailing have been introduced. In 1992, the Organization and family were

invited to return to the Czech Republic, where Bata had remained a symbol

of national pride and achievement.

2.1.1 BATA TODAY:

Bata is one of the worlds widest reaching companies, with operations in

68different countries. Bata companies strive to listen to the customers in

their local markets and clearly identify their footwear needs, and then to

provide products that exceed their customers expectations in terms of

quality, style and value. Bata operating companies are grouped into four

business units based on similarities in markets and business issues. Each

group benefits from synergies specific to their requirements, such as

product development, sourcing and marketing support. Each business unit

is entrepreneurial in nature, and can quickly adapt to changes in the

marketplace and seize potential growth opportunities.

2.1.3 BATA BANGLADESH:

Bata Shoe Company established by G. Bata in 1874 at Zing in

formerCzechoslovakia. From a very modest beginning it has come a long

way since, mainly by the vision of its founding father and sheer

commitment of its employee around the world. At first it only made and

sold good high quality shoes in and around Europe but as time goes by it

crosses the boundary to Europe and enter in many countries around the

world. At the Pakistan period Bata was first came to this country. After

independence Bata continue their commitment to provide good quality

shoes at an affordable price. Many of the elderly people still remember the

Naughty Boy shoe of Bata that was known for its durability among the


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kids of that time. But since then Bata Bangladesh has changed a lot. Now

they are not only providing durable shoes but have

2.1.5 BATAS BUSINESS:

Bata manufactures and sells a wide range of footwear made from leather,

canvas, plastic and rubber. The company sells over 59 man pairs per year

throughout the country and in overseas markets such as USA, UK,

Europe, Middle East, etc. The company also markets a range of sports

shoes, garments and accessories manufactured by others. Outwear sales

account for more than 97% of the total revenue. Rubber and canvas

footwear contributes 48% of volumes, leather footwear contributes to30%

and plastic footwear accounts for 22% of volumes. In value terms, leather

footwear contributes to 58% to turnover, Rubber and canvas footwear

contributes 27%, plastic footwear accounts for 12% of total turnover.Accessories, garments, etc account for 3% of turnover. Bata manufactures

around 50% of its footwear in its own units, while the rest is outsourced.

from small-scale manufacturers. While all the plastic footwear is

outsourced, in leather company manufactures 63% of the footwear in-

house and in rubber and canvas footwear, 61% is manufactured in-house

2.2.3 MARKET POSITION OF BATA SHOE CO. (BD) LTD:

Bata Bangladesh is the largest player in the footwear industry with around

9-10% volume share and a 60% market-share in the organized segment. BB

(Bata Bangladesh) has a market share of 70% in canvas shoes segment

while it has as hare of 60% in leather shoes. BB manufactures about 10% of

the total Hawaiis sold in the country. BB competes in manufacturing low

priced Hawaiis with the unorganized sector with its price ranging from

Taka35-Taka110 with unorganized sectors pricing in the range of Taka25-Taka50.Leading competitor in the popular segment of the organized market

Apex Shoes. Other organized sector players are liberty shoes, Baly Shoes,

Woodland, Pagasus . Most global players like Adidas India,

Reebok, Nike, etc are operating through their Bangladeshi

subsidiaries with main focus on premium sports shoes segment,

which has an insignificant volume share. Competition is hooting


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up in the domestic market due to popular brands such as

Giaconda, Red Tape, and LotusBawa in the illegal and

smuggling of these shoes. These brands are gaining market

share especially in the premium segment.

2.2.4 Product of Bata:

Bata shoe Bangladesh Ltd. has more than 900 lines of shoes in different

categories. They distribute all of these lines of shoes in different parts

of Bangladesh through wholesalers, dealers and through their own stores.

In the following chart some of the shoes, its average price, size and other

dominating features are mentioned.

School shoes of Bata:

Bata first earn its name as the most durable shoe manufacturer for school

going children. When it first comes to this country it has realized that there

is a huge market opportunity for school shoes. Quickly they introduced the

NaughtyBoyshoes.

Which quickly earn recognition among the parents of that time, asthey need

a durable shoe that really can last even after lots of rough treatment.From

there on Bata gone on to make

Canvas shoes,

Other black leather shoes,

Hard top white sneakers

For school goers. The most popular brand of school shoes that are now inthe market is

North Star

Which provides hard and soft white sneakers and the leather black?

Bata school shoes


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Which are of various designs.

Bubble gummers:

The Bubble gummers brand of Bata serves the infant to children, according

to them 0-13 years of age group. Bubble gummer brand has provided Varity

of design and type of shoes for above-mentioned age group of children.

Marie Claire:

The Mari Clare brand of Bata is for women. It has more than 100 designs

and has different price range of shoes. The price range here starts from

Taka 450. Indecent times Bata has targeted the young working women who

wants reasonably priced, decent design and durable shoes for work and this

brand in many cases serves this segment well.

Sandak:

What we called isSponge Sandleis professionally called asThongs

Sandlesof Sandak brand of Bata serves that very segment of the market. It

producesdifferent types of very good quality plastic and Thongs for women.

From mysurvey it has found that it is the most popular shoe of Bata. The

pick seasons forSandak shoes are rainy season when many prefer this shoe,which are washableand decent in looks.

Power:

This is a reasonable priced good quality sports shoes and sandle shoes for

youngmale and female. The target segment of Power is teenagers and some

parts of the elderly people who need sneaker for walking purpose. The price

range startsfrom 695/- and in many cases not exceed more than thousand

taka. According tothe buying power this price range is very popular with thegeneral public asdurability comes with it as with every Bata footwear.

KingsStreet:KingsStreet:

The most famous dress shoes of Bata come under the brand name

of KingsStreet. It has been nice to know that this brand of shoes has been

solelymade in Bangladesh. The Dhamrai factory of Bata has the machinery


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to makethese shoes, which they established in 1999 at a cost of 1 core taka.

Theseshoes have different price range for different segments of people.

Weinbrenner:

This brand of Bata provides trendy, outdoor, rough use footwear for men.

This isalso a popular brand with the youth of the country. Though the brand

is not thatcheap but the quality of it is very good.Apart from these Bata has

numbers of leather sandles of various designs,sandle-shoes under Bata

brand name that serves different segment of themarket. Bata also

manufacture and market popular brands such as

HushPuppy,Dr.Scholes

in this region of south Asia. Bata also have quite new brands formale and

female like

Bata Comfit, Bata Flexible.

According to the Bata

2.1.6 SOURCES OF PRODUCTION

Bata Bangladesh has four different sources of production:

Own:

Bata Bangladesh has two factories in Tongi and Dhamrai. All the rubber

andrelated production has been done in Tongi factory. Every type of

leatherproducts are been manufactured in the Dhamrai factory. About 92%of allBata products are produced in these two factories.

Satellite:


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There are some satellite production factories which produces solely for

Batawith the production facility, which has been, step up by Bata

Bangladesh. 4%of Bata production is from satellite sources.

Outsourcing:

As related and supporting industries are growing in shades of the

massivestructure of Bata Bangladesh. It also does outsourcing with different

smallshoe industries mainly from the Dhaka region. The quality and

thespecification has been ensured by the Bata people. The participation

of outsourcing in the companies business is 4%.

Import:

With high import duty it is hard for Bata to import a substantial amount

fromdifferent subsidiaries and other outside suppliers. It can be mentioned

thatthe duty for importing complete shoe here in Bangladesh is 101%.

Eventhough Bata Bangladesh import shoes to keep up with the market

trend,which is around 1% in every year.

PLACE /DISTRIBUTION:

The physical distribution starts when the raw materials send to the factoryandthe manufacturing process starts there in Tongi and Dhamrai factory.

From therethe end products send to the CDC (Central Distribution Center)

in Tongi factory.After they receiving the end products then and their the

packaging has beendone and according to the requirement of different

stores, Agencies, dealers andwholesalers the goods has been transferred

directly to the distributors throughcompany owned vehicle. There is

separate process for own agencies and storesagainst the wholesalers and

dealers. The goods for agencies and stores gonestraight to the store

headquarter and goods for others gone to the 13 depotsaround the countryfrom where they collect the goods. In retail, BB operatesthrough a chain of

exclusive own and franchise stores. BB's stores are located inprime

locations countrywide. 70% of Bata's sales are from its own retail

outlets.Besides there is a network of about 500 exclusive wholesalers who

service about300 retail stores all over the country. Bata has showrooms,

wholesale depotsand distribution centres across the country.BB's major


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thrust is on middle-class and upper class customers. The concept of `budget

stores` has been introduced to remove apprehension in the minds

of customers who viewed Bata outlets as being expensive. The company

isfocusing on the rural markets for volume growth in the low-priced footwea

PROMOTION:

P romot ion s t ra t e g ies a re co ncerned wi t h the p lann ing ,

i mp lement a t i on , andcontrol of persuasive communication with

customers. Clear-cut objectives and ash a rp focus on ta r ge t

cus tomers are necessary fo r an e f f ec t i ve

promot i on a lprogram. As Bata is a established brand here in Bangladesh

they think that theyshould go on with more and more retail outlets

rather than intense adver tising.So they limit their advertising into

following places:

Billboards

Adds on local newspaper

Some promotion together with other established brands

Best Price Range (TK) BATAMen's995-1695Women's250-550School200-330Children130-195Sport695-

995Non Shoes50-100

Dominating Color

Men'sBlackWomen'sBlack, ChocolateSchoolBlack,

WhiteChildrenMulticolorSportWhite, GrayNon ShoesBlack, Chocolate

Best selling sizes

Men's41,42Women's4,5School4,5Children11,12Sport7,8Non ShoesDepends

on the productOpening Days6 daysOpening Hours (AM-PM)9:00 am-8:00

pmImplementation of new designsWeeklyEffective sales campaigns15-20%

discount.


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2.3.2 SWOT ANALYSIS OF BATA SHOE CO. (BD) LTD:

Strengths:

Image of the company

Quality Product

Differentiated line of products

Competitive Pricing

Strong distribution channel

Modern manufacturing facilities

Brand loyalty at mass level

Weaknesses:

Insufficient promotional activities

Bata at present conducts all the store management activity manually. This

results lots of lengthy paper works, errors & waste of time.

Inability to catch the present trend in time

Less competitive price due to high cost structure.VAT & tax barrier

Opportunities:

Despite political turbulence a segment of our middle-class is coming

upwith reasonable buying power. Many of them are women who are

decisionmaker so the city store concept of Bata can att ract them as

whole of the family footwear can be available there.

Consumer like differentiated products. They like to shop in a store wherethey serve the whole family.

More competition results in more campaign for products.

Business Expansion in Shoe care products

Utilize outsourcing especially the synergy sources to achieve competitive

pricing


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Franchisee opportunity with global brands like Nike, Reebok, Hushpuppy

Market expansion opportunity in high fashion & value for money footwear

market for all categories of shoes through Retail & WCSM channels

Threat:

Political instability affects the supply of raw materials and distribution of

finished products.

Uncontrolled counterfeit of Bata products

2.3.3 ANALYSIS OF COMPETITORS:

APEX:

Most of their shoes are expensive. They don t provide any school

shoes. The sports shoe they bring into the market are mostly imported

Addidas shoes and qui te ex pe ns iv e. In th e me n s se ct io n th e

mo st do mi na ti ng co lo r is bl ac k, in women section-black and

chocolate. They provide sophisticated color shoes for children. The most

dominating sizes of the men, women and children are the average

sizes that are sold in any Bata store. They remain open on everyday of theweek except any government holiday. Opening hour is 9:00AM-

10:00PM. They generally implemented new design after every 6

months according their employees. The most successful sales campaigns

are 60% off on specific design. Their market share is about 1.50% in

Bangladesh.

LIBERTY:

Here in this shoe stores the average price of the shoes are also expensive.Their average retail price is 600+. They also have the same kind of

offerings in the irrespective divisions. Usually the normal color

and size that are sold elsewhere ar e al so so ld he re . Th ey

re m a i n o p e n e v e ryd a y e xc e p t of a n y g o v e rn m e nt h o l i d a y s .

T h e y o p e n a t 1 0 i n t h e m o r n i n g a n d r e m a i n o p e n u p

t o 1 0 i n t h e evening. After 3-6 months they brought new design


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shoes in the market . The most effective sales campaign is 40-60%

discount on specific design shoes. The market share of Liberty shoe is

about 1%. They are in the market for about 13years as a franchisee

they are from India.

REEBOK:

They only sale sports shoes and some children shoes who are in their teens.

The price of all shoes is high 1200+. The color and design of their shoes are

of high quality. Reebok brings different types T-shirts, tracksuits and non-

shoes items, which are quite expensive. After every 1-2 months new design

of shoes comes in their store. 20-25% discounts on specific design

are their most effective sales c am pai gn . Ab out .1 0% mar ket

share R ee bok i s qu ic k l y ga i n ing gro und and getting attention ofthe brand conscious segment of the country.

PAGASUS:

They made their name as sports shoe manufacturer. After that they

come up shoes for both the male and the women. Their best-sold price

range is 800-1200for men, 550-750 for women and 300-500 taka

shoes for ch ildren . The ir bests old sports shoes are ranging from 700-

900 taka. They open their store everyday from 9:00-10:00 in the evening.After 2 months they bring out at least some kind of new design in one of

their segments. Most effective sales campaign up to 20%discount. Their

market presence in the country is over 25 years but not doing that

well. Market share is only .50% mainly the quality of the shoe is moderate.

HOMELAND:

It is the least known brand among buyers. No non-shoe items.

Openeveryday9:00-10:00PM in the evening. On average bring out new

design after2-3months. Discount up to 20% on specific design are their most

effective sales campaign. It is a Bangladeshi company. Not too many people

know them but they are in market for more than 10 years. There main

lacking is their poor distribution channel. Only 15-20 stores in the country

is the indication of it


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2.3.4 CORE COMPETENCIES/STRATEGIES OF

BATA BANGLADESH:

Be obsessed with customer satisfaction;

Build reputation for providing quality product;

Be dedicated to continuous growth in the market;

Widespread availability of Bata shoes in the market;

The prices of Bata shoes are very competitive and in many cases

lower than its competitors;

Very good distribution channel with dedicated employees all through

Bangladesh and established because of Batas experience in the Bangladeshfor very long;

Taking opportunity of the lower buying power of the people of the country

by providing good quality shoe at a competitive price;

2.4 STRATEGIES USED BY BATA SHOE COMPANY (BD) LTD:

Market-scope strategy choices:

1. Single-Market Strategy

2. Multi-market Strategy

3. Total-market Strategy

Among the three choices Bata has chosen and uses Total-Market strategys

they serve all classes of people with their shoes ranging from 30/--2195/-.

The specifics of the strategy is provided below-

Market-Entry Strategy choices:

1. First-In Strategy

2. Early-Entry Strategy

3. Laggard-Entry Strategy


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Market-Dilution Strategy:

1 . De-marketing Strategy

2. Pruning-of Marginal Markets Strategy

3. Key Markets Strategy

4. Harvesting Strategy

Product Strategy:

1. Product-Positioning Strategy

2. Product Repositioning Strategy

3. Product-Overlap Strategy

4. Product-Scope Strategy

5. Product-Design Strategy6. Product-Elimination Strategy

7. New-Product Strategy

8. Diversification Strategy

Products Strategy choices

1. Maintaining the price

2. Reducing the price

3. Increasing the price

Place/Dist ributi on Strategy:

Concentric diversification (products introduced are related to existing ones

in term of marketing or technology),

Horizontal diversification (new products are unrelated to existing ones but

are sold to the same customers), and

Conglomerate diversification (products are entirely new).

Place/Distribution Strategy Choices

1. Direct

2. Indirect


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Pricing Strategy

Skimming Pricing

Penetration Pricing At times Bata Shoe Company in Bangladesh used

'Penetration Strategy.

Price-Flexible Strategy Choices

1. One-Price Strategy

2. Flexible-pricing Strategy

3. Product-Line Pricing Strategy

4. Leasing Strategy

5. Bundle-Pricing Strategy

6. Price-Leadership Strategy

7. Pricing Strategy to build market Share

Promotional Strategy

1. Promotion-Expenditure Strategy

2. Promotion Mix Strategy

3. Media-Selection Strategy

4. Advertising Copy Strategy

5. Selling Strategy

6. Sales Motivation and supervision Strategy

2.5 ETHICAL CONDUCT AND CORPORATE RESPONSIBILITY:

Bata companies have a tradition of being good corporate citizens and seek

to contribute to the well being of the countries and communities where they

operate. Bata companies conduct themselves as positive and contributing

members of any community in which they operate, and seek to provide

employees with a safe and healthy working environment. Bata companies

are committed to ensuring that operations are conducted ethically and

incompliance with applicable local laws and regulations. Bata Bangladesh

is also concern about the environmental safety related issues. So it has

established of its own an Effluent Treatment Plant (ETP) in its organization

premise with a huge investment.

The Bata Environmental Mission Statement is:

To protect our people, customers and communities and to protect our

natural environment in order to help sustain human development globally.


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In the implementation of this mission, international guidelines have been

developed in the areas of environment, health and safety. The efforts and

achievements of Bata companies have been recognized in many countries,

by both local and international bodies. The contribution to environmental

conservation includes a role in prevention and education. Bata companies

have long standing relationships with groups that have helped several

generations of young people become more aware of the need for protection

of the natural

CONCLUSION:

From the analysis of Bata Shoe Company Bangladesh Ltd and the shoe

industry we have identif ied that the shoe industry i s growing andidentified their main weakness is insufficient lack of development

with the rapid changing market needs, insufficient promotional

activities, and downward trend of quality. On the other hand, distribution

system and vertical integration are the strengths of Bata From strategic

marketing viewpoint; we see that Bata is taking corrective steps in almost

all the way. In very few sides Bata has lacking. Based upon these facts

recommended strategies would assist in more growth of Bata shoe

company Bangladesh Ltd. in among the upcoming fierce competition in the

shoe industry.

RECOMMENDATIONS:Give sales discount and free samples to influence more sales in the

growing shoe market.

Reduce the price level.

More advertisements should be aired.

Should build awareness among the potential users of this type of footwear

product.

Bring more design, color, and design combination to be competitive.

To merge with the local companies and to expand more segmentation

assaignment marketing rules

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