marketing report on yellow by beximco

CONTENTS

Bangladesh –A Big Player in Garments Export 1

Key Market Trends Over the Past Decade 1

YELLOW – An Outgrowth of Beximco Textiles 1

The Chronology of the Brand – A Success Story 2

Market Size 3

Target Segments 3

Price Range 5

Rising Sales 5

Gross and Net Profit Margin Estimates 5

Direct Selling 6

Advertising and Promotional Activities 6

Effective Promotional Programs 7

Competition in the Local Arena 8

SWOT Analysis 10

A Promising Future 11

Recommendations 12

Bibliography 14

Appendix 15

A1. Confirmation Email

A2. Online Survey Questionnaire

A3. Raw Survey Data

A4. Transcription of Interview

A5. Peer Evaluation

Executive Summary

Even though Bangladesh is a big player in the garments export business, it doesn’t have any well-

known global fashion brand. YELLOW sought to change all that. Its inception from Beximco

Textiles, however, was more of an experimental project. Relying on Beximco’s brand name and its

integrated vertical supply chain, Yellow began with the vision to be a high-street fashion brand

known internationally.

Despite numerous “possible” competitors, YELLOW acknowledges only two local brands as its

opponent. The scanty competition let YELLOW earn a profit of estimated BDT 200 million in 2012

by selling casual wears to mostly the well-off youth.

The intended customers are deliberately targeted by YELLOW using subtle promotional programs in

order to maintain its exclusivity. Its marketing efforts also include directly selling to the customer

and personalized customer care. As a part of being exclusive, it is planning a store in U.A.E and

other countries where all the elite brands are congregating to; while domestically, YELLOW wants

another seven to eight stores.

All the data mentioned were collected various sources – interview and survey being the primary data

sources, and websites being secondary data sources. The survey was conducted online using a

random sample of 46 people. The highlights of the findings are listed below:

1. Male to female ratio was 3:2 which conforms to the company’s male to female product

ratio.

2. YELLOW was the most preferred brand in a choice five popular local brands.

3. Customers weigh design, product quality, and price as the most important factors when

buying clothes.

4. 80% of respondents associate YELLOW to traits related to high-street fashion brand.

5. A significant percentage of respondents despite having positive attitude towards

YELLOW, have not purchased any YELLOW product.

Although YELLOW has an impressive overall performance, the disparity in the survey results and

the recent closure of the store in Sylhet raises concern. For these reasons, further investigation needs

to be done and the following recommendations be followed: (1) introduce mass marketing tools in

promotion; (2) improve the YELLOW website; (3) ascertain market feasibility before expansion.

Marketing Report on Yellow

1

Bangladesh –A Big Player in Garments Export

The textile and clothing industry accounts for about 80 percent of all exports earnings of

Bangladesh.2 The most important export markets are the United States and the EU with a total market

size for Bangladesh in 2009 being EUR 5.8 billion and rising every year.3 Currently, the sector

employs about 45 percent of all industrial employment and accounts for 10.5 percent of the country’s

GDP. The garments retailing business is also experiencing positive spillover effects from the

prosperous garments export sector.

Key Market Trends Over the Past Decade

Clothing brands in Bangladesh are drawing in a wider span of consumers over the last decade as they

continue to offer fashion-rich items that conform to native tastes. The affordable pricing range of the

clothes has also been a key factor for the local brands' growing popularity, especially among the

youth. Kay Kraft, an ethnic fashion house, has experienced double-digit sales growth on an average

over the last decade. Cats Eye, another clothing brand that sells mostly menswear, saw 10-15 percent

sales growth on an average in the last decade.4 Local clothing brands, like Cats Eye, Westecs, and

Ecstasy, produce goods with imported fabrics. But brands like Kay Kraft, Aarong and Banglar Mela

are completely depended on local fabrics. It seems that every competitor in the market is taking its

share of the market

Low taxes in the earlier stage facilitated the growth. Recently, however, the Bangladesh government

has raised the VAT (value-added tax) on imported fabric from 1.5 percent to 5 percent in June 2010.

Moreover, current customs duty on imported fabric is around 89 percent.5 Despite the increased taxes

local brands seem to be thriving. It is worth mentioning that Aarong's sales in 2010 stood at about

BDT 3.4 billion which is a testament of the potential of the market.

The budding market finally drew the attention of a polished player in the exports business - Beximco

Textiles.

YELLOW – An Outgrowth of Beximco Textiles

Beximco is one of the largest conglomerates in Bangladesh. The Group consists of four publicly

traded and seventeen privately held companies. The publicly traded companies – Bangladesh Export

Import Company Limited, Beximco Pharmaceuticals Limited, Shinepukur Ceramics Limited and

Beximco Synthetics Limited – have a combined market capitalization of approximately USD 550.96

million. The Group had total revenues of USD 834 million in the year ended December 31, 2010

with a major portion of the revenue coming from pharmaceuticals and textiles.6

The Textile and Apparel division of Beximco is a fully integrated manufacturer of cotton and

polyester blended garments for men, women and children, both for domestic and export markets. Key


2

clients of Beximco Textiles include world-renowned brands and commodity retailers including

American Eagle, Arcadia Group, Calvin Klein, H&M, JC Penney, Macy's, Tommy Hilfiger,

Warnaco and ZARA. Beximco Textiles was a 100% export oriented company but they decided to

venture into the domestic market with YELLOW retail outlets so that Bangladeshi consumers can

access the high quality clothes that are being exported out of Beximco. Already handling the full

range of textile manufacturing operations from spinning to finishing garments, Beximco Textiles set

their sights on launching a premium local brand of their own around the year 2003.

On the year 2004, Beximco Textiles Limited launched YELLOW as a premium clothing brand

through the inauguration of its first outlet in Bashundhara City.1 It was initially launched as a pilot

project, with returns not being a major concern. YELLOW started off with its iconic “panjabi” line

and slowly developed every other segment. Since then the brand has managed to capture a solid

position among the urban target market and has a fast growth rate both in terms of profit and market

share. YELLOW is now a nationally and globally recognized brand for quality branded apparel and

is proudly representing Bangladeshi fashion brands in Pakistan.

The Chronology of the Brand – A Success Story

The first YELLOW outlet was situated on the ground floor of the current largest shopping mall in

Bangladesh, Bashundhara City. With its innovative designs, youth-centered approach and reasonable

prices the brand managed to capture the attention of a major portion of high- street buyers on the first

wave. A prime example would be the hype surrounding the affordably priced panjabis by YELLOW.

YELLOW brought tapered fit panjabis without any intricate designs or lacework. The panjabis, with

subtle embroideries on comfortable cloth, sold at an astonishing rate with 400 pieces sold out in the

first two days. This inspired the brand to explore new possibilities and enlarge their market reach.

YELLOW opened its second outlet on the ground floor of Pink City Shopping Mall in Gulshan, this

time with a bigger response than before.

Currently, YELLOW has nine outlets in Bangladesh- one in Chittagong and the other eight in Dhaka.

But YELLOW’s vision was to become an internationally recognized brand operating on international

standards, not confined to the borders of a single country. On October 18, 2005, YELLOW opened

its flagship overseas store in Karachi, Pakistan and followed up with one store in Lahore and two

more in Karachi. The positive responses from Pakistani buyers and substantial sales figures have

labeled YELLOW Pakistan a success story too.

The notion that YELLOW is success story is further strengthened when customers’ perception is

taken into account. The survey on consumer preferences revealed that customers mainly look for

design, product quality, and price when buying clothes. These are qualities that YELLOW seeks to

capitalize on – trendy designs, impeccable quality, and correct pricing.


3

Almost 90% of the respondents look for the qualities that YELLOW strives to achieve. It can be

observed that price is less important a factor than design or quality; the same might not have been

said if the entire population were surveyed since Bangladesh is a low income country.7

Market Size

Even with such a large overseas apparel market, the domestic market for high-end apparel is

considerably confined by income demographics. Only 17 percent of the entire population (30

million) are at or above the middle class income bracket, and of them about 8 million fall into the

target age group.8 With urban market penetration, local brands like YELLOW have a market base of

about 30 percent of the 16-25 age group, which amounts to 2.5 million potential customers.

Calculating the exact market size and YELLOW’s market share was not possible since no formal

study on local apparel brands has been conducted in Bangladesh up to the present. When asked about

the market size, the Deputy General Manager of YELLOW, Mr Ijlal Razi, replied that such a

research is not feasible since there is a lot of disparity between the social classes of people in

Bangladesh. Had it been that majority of the people are mid-level income group, it would then, have

been possible to conduct such a practical market research. Even without knowing the exact market

size, YELLOW knows which customers it has to entice. The following section elaborates

YELLOW’s target segments.

Target Segments

YELLOW segments its target market in terms of age, gender, income, and location.1

YELLOW exclusively targets 16 to 25 year olds and kids. YELLOW considers its primary segment

to be the youth. It does so because it wants to “grow together” with the youth. By growing together,

YELLOW desires to capture the customer’s lifetime value – the spending a customer would be

Price23%

Product Quality33%

Design33%

Brand Name10%

Other1%

Figure1‐ ImportantFactorsWhenBuyingClothes


4

making over his or her lifetime. Its kids section, though operational, is still being developed. The

survey findings were also consistent with YELLOW’s target age.

In the survey conducted for this report, it was found that almost 70% of the participants were

between the ages of 16 to 20 years, about 26% of them were between 21 to 25 years of age and the

remaining 4% were equal to or above 26 years of age.

In terms of gender, both men and women are targeted by YELLOW. Obviously, the same was

revealed in the survey.

The survey exhibited a near 3:2 male to female ratio which conforms to the company’s male to

female product ratio - YELLOW offers formal wear for males but not for females.

Being a premium brand, YELLOW targets the middle-income group and above. Catering to the mass

would have hurt its brand image. Pertaining to its income segmentation, YELLOW’s customers, in

terms of their social class, consists of the upper middles and above.

Geographically, YELLOW currently provides to the urban population of Dhaka, Chittagong, Lahore,

and Karachi. This is YELLOW’s geographic segmentation. Its future plans also focus on the cities.

0

10

20

30

40

16 to 20 Years 21 to 25 Years 26 to 30 Years

Figure2‐ AgeofRespondents

Male61%

Female39%

Figure3‐ GenderDistributionofRespondents


5

The cities provide YELLOW with the abundance of customers who are willing to pay a premium

price.

Price Range

A variety of garments are available at YELLOW where the entire line of product ranges from BDT

545 to BDT 4,500.1/9/10

The table below shows the prices of some the best-selling YELLOW products.

Figure4–PriceRange

Men’s Wear Price in BDT

Undergarments 545

T-shirts and casual shirts 695 – 1,495

Formal shirts 1,299

Formal shirts – “Prive” 4,000 – 4,500

Panjabis 1,500 – 1,745

Panjabis – limited edition 2,000

Trousers 1,995

Trousers – premium denim 3,495

Women’s Wear

Accessories 995 – 1,795

Trousers 1,595

Trousers – premium denim 1,795

Casual tops 1,695

Casual tops - premium 2,095

YELLOW believes that products should be priced reasonably. That practice has proven to a sales

mantra for YELLOW.

Rising Sales

YELLOW’s sales have been growing ever since it was established. Its 2012 initial sales projection

was approximated at BDT 470 million, but as winter arrives in full swing, its revised figures are

close to BDT 500 million.1 The precise statistics for 2012’s current sales and annual sales for

previous years could not be obtained as the company considers them to be confidential information.

Gross and Net Margin Estimates. Like sales, the exact figures for YELLOW’s net and gross margin

were not disclosed. But the prescribed net margin in retailing, after having accounted for all the

overhead expenses, should not be less than 30% to 35%.1 Using these figures, an assumption can be


6

made that YELLOW’s net margin would be close to 40% as it’s a high-street fashion brand. Since

net margin will obviously be lower than gross margin, gross margin would be around 60%. Gross

and net profits are based on a 60% gross margin, 40% net margin, and BDT 500 sales revenue:

Gross profit: BDT 500 million × 60% = BDT 300 million

Net profit: BDT 500 million × 40% = BDT 200 million

The sales and profit figures would have been quite different had YELLOW used other channel

members in marketing its products.

Direct Selling

Several reasons justify YELLOW’s stance in using a direct marketing channel. Firstly, YELLOW

wants to be held responsible for its successes and failures. Introducing intermediaries in the process

would mean delegation of control over quality to some extent. This might lead to degradation of

customer service and hence may prove to be detrimental to YELLOW’s brand equity. Secondly,

permitting channel members might mean higher prices for customers and dilution of profit for

YELLOW. The conservative approach towards delegation of control is also reflected in YELLOW’s

subtle promotional practices.

Advertising and Promotional Activities

Initially, there was very little promotional activity done by YELLOW. Its primary focus was on

developing the brand equity. YELLOW relied on the goodwill or brand value of Beximco, hence the

name 'YELLOW by Beximco'. In addition to that, the exclusivity and innovativeness of their designs,

along with the good quality of the fabrics, and proper pricing helped promote YELLOW to its

customers.

YELLOW also believes personalized customer care is an effective tool in further enhancing brand

equity. All customer complaints, suggestions, and queries are listened to by the General Manager of

the brand, which amplifies the message: Customers come first.

Over the past year, YELLOW has significantly increased its advertising and promotional activities.

Several YELLOW billboard advertisements have been set up across Dhaka, in prime locations such

as the Prime Minister's Office, the outlet areas and the Airport Road. They have published several

newspaper advertisements, and lookbooks, showcasing the seasonal collections.

YELLOW invests heavily in social media as well. It has a hugely popular Facebook page, with

approximately 257,000 likes, and 50,000 people talking about it all the time in a period of one

month.1/9 Paid banners of the brand can be seen frequently in Facebook. YELLOW also has a Twitter


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account, informing about the seasonal collections available in outlets, and the fashion festivals they

organize.

Recently, YELLOW organized fashion festivals in universities across Dhaka, namely Daffodil

International University, United International University, and American International University of

Bangladesh. These sponsorships are aimed at creating brand value for YELLOW, increasing the

customer base and attracting the younger generation through placing the brand in a trendy light.

Moreover, it has sponsored several events, including IBA Fresher’s Reception 2012 to improve the

company’s standing with future graduates.

In the past year, YELLOW has introduced priority cards for premium customers. The cards

themselves are printed abroad and are provided against “points”, which accumulate and enable the

customer to get discounts. The program lets YELLOW retain its loyal customers and seems to be

working.

Effective Promotional Programs. YELLOW’s promotional programs appear to be effective in terms

of fulfilling their goals. In order to maintain exclusivity, YELLOW refrains from mass promotion.

This results in a powerful word-of-mouth dissemination of the brand name. YELLOW’s nurturing of

brand equity using subtle approaches is manifested in the survey.

Almost half the respondents have heard about YELLOW from their peers. Zero responses on first

encounter through online sources could be explained by the fact that most people look for online

information after having had some idea of the product beforehand.

Newspaper Ads4%

Billboards24%

Word of Mouth48%

Social Media / Online0%

Outlet Stores20%

Others4%

Figure5‐ FirstEncounter


8

The survey also revealed that YELLOW’s goal of positioning itself in the minds of the customers as

a high-street fashion label is working.

More than 80% of the survey respondents associate YELLOW with the traits of a fashionable brand.

The promotional strategies used by YELLOW are, however, no different from what its rivals are

using.

Competition in the Local Arena

Seven possible competitors were identified of whom YELLOW considers only two as key

competitors – Artisti and Soul Dance. The rest - Ecstasy, Westecs, Aarong, Urban Truth by Pride and

Cats Eye - are considered as either indirect or not a competitor for YELLOW.

YELLOW identifies its competitors as “somebody selling exactly the same category of garments or

merchandise.” Artisti and Soul Dance design and manufacture their own products which make them

YELLOW’s direct competitors. Soul dance is considered the biggest competitor when it comes to

creativity, design, merchandising, and marketing which is almost identical to YELLOW’s.

Other brands like Ecstasy do take a share of YELLOW’s market to some extent. But Ecstasy is more

of a “mixed bag in terms of design, manufacture, and import” was quoted by Mr Ijalal Ecstasy

imports most of its products from Thailand, but designs and manufactures only a small portion of it.

Besides, Ecstasy is not trying to be an international high-street brand like YELLOW.

Affordable Prices6%

Premium Brand32%

High Quality Product17%

Trendy Designs32%

Others13%

Figure6‐ ImpressionRegardingYELLOW


9

“Westecs is a confused brand” was also quoted by Mr Ijlal. It is confused in terms of the positioning

of the brand. On one end Westecs sells high-end suits, while on another, cheap export-surplus items.

These conflicting images have not qualified Westecs to be a competitor for YELLOW.

Aarong, too, is not considered a competitor by YELLOW because its ethnic-wear brand. The

panjabis that Aarong sells consists mainly of long-cut embroideries - something that is quite

dissimilar to YELLOW’s subtle, short panjabis.

Urban Truth, a venture by Pride Limited, is considered to be operating in a different market. Its

customers are the ultra-modern young women who would buy miniskirts or halter-necks. This market

is a small niche and is different from the market YELLOW operates in.

Cats Eye is confined in serving only a specific group of customers seeking formal wear. Since

YELLOW is more of a casual-fusion-wear brand, Cats Eye is also not a competitor for YELLOW.

Despite the fierce competition in the garments retailing business, YELLOW seems to have a firm

grip, at least in the minds of the customers.

The survey asked the respondents to rank the five brands in order of preference (1 being the most

preferred). The survey discovered that YELLOW was the most preferred brand. The customers’

perspective is indeed important, but in order to gain an inside out view of YELLOW, a more

comprehensive analysis is needed.

110

115

120

125

130

135

140

145

150

Westecs Artisti Yellow Ecstasy Soul Dance

Figure7‐ RankingofBrands


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SWOT Analysis

A SWOT analysis would thoroughly scrutinize YELLOW’s internal strengths and weaknesses while

also revealing the external opportunities and threats.

Strengths

1) Branding. YELLOW has maintained strong brand equity from its inception and is careful not to

let any of its management decisions affect its brand value. This steadfast integrity has helped

foster credibility among customers and positioned YELLOW as one of the premium clothing

brands of the country.

2) Infrastructure. Beximco has the one of South Asia’s largest vertically integrated textile and

garment factories with in-house analytical and creative abilities in its state-of-the-art industrial

park in Gazipur, Bangladesh. The existing infrastructure works to the advantage of YELLOW by

making its operations not only efficient but effective too.

3) Image. Consumer trust on brand in image perspective is already built. The Beximco name has

now become one of the most recognizable brand names in Bangladesh. It is synonymous with

innovation, trust and quality.

4) Quality. Since its inception, YELLOW has been paying attention to the deepest possible details

in its products. It could do so because it had no historical background and hence did not need to

pay attention to volume, rather it focused on quality.

Weaknesses

1) Mass Marketing. YELLOW may be a strong brand, but their promotional activities are not

designed to penetrate the majority of potential buyers. Without use of proper mass marketing

tools YELLOW cannot expand their customer base beyond traditional market segments.

2) Variations in Product Range. YELLOW does not offer much variety in product; the brand

focuses on certain articles of clothing and certain market segments for generating revenue. Most

of its apparel is designed for young urban men, and there are no products like saris, and salwar

kameez etc. at all.

Opportunities

1) Increased Tariff on Imports. The increase in VAT (value-added tax) from 1.5 percent to 5

percent in June 2010 and a customs duty of about 89 percent on imported fabric should make


11

YELLOW’s opponents less competitive and favor YELLOW as it relies on domestically

produced fabric from Beximco Textiles.

2) Global Brand Recognition. YELLOW will cater to the sophisticated and highly aware clientele,

who seek the best quality products. “In every high street level shops, three to four shelves are

filled with clothes manufactured in Bangladesh,” said Mr. Ijlal Razi, Deputy General Manager of

YELLOW. Since international consumers are already buying clothes that are manufactured in

Bangladesh, they are aware of the quality of products to expect. As YELLOW produces high

quality products, entering an international market should not be too problematic, also, there may

already be a potential customer base present.

3) Business Buyers. Institutional selling can be another prospect for YELLOW. Offices all over

country are now opting for a more relaxed outfit for employees – a concept known as “Smart

Casuals.” The overwhelming volume of requests from the financial institutions of Bangladesh is

an indicator of the markets YELLOW can expand to in the future.

Threats

1) Threats from Competitors. One of the most popular products of YELLOW is their iconic panjabi

line. Their panjabis are simple, comfortable and attractive to the youth. If similar trends are

followed by existing competitors, product saturation might occur, depriving YELLOW of their

exclusivity. Furthermore, YELLOW’s exclusive designs might be replicated by fake brands.

2) International Outcry over Working Conditions. The recent fire at Tajreen Garments and the

lamentable loss of human life was not the first of its kind in the history of Bangladesh’s garments

industry. Considering Yellow’s future plans to expand their business internationally, the

company should keep in mind the international outrage over worker safety concerns and take

their decisions accordingly.

YELLOW’s strengths and opportunities far outweigh its weaknesses and threats. This should pave

the way for a flourishing future.

A Promising Future

With its current nine domestic store and four international stores, YELLOW seeks to expand as much

as possible in the next four to five years. They are planning to open seven or eight stores in different

cities of Bangladesh. But first, YELLOW wants to take advantage of the “low hanging fruit”, that is,

Dhaka. So in Dhaka, they are planning at least four new stores. A huge seven-thousand-square-foot

YELLOW store is due to open in Jamuna Future Park on the mall’s inauguration, expected to be near

January 2013.


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As a result of the continual requests of Sri Lankan expatriates in Bangladesh, YELLOW is planning

to set up a store in Sri Lanka. It has projects in the pipeline to open stores in U.A.E. India is also

another lucrative location for YELLOW, but it is experiencing difficulty in entering the market.

YELLOW also wants to increase its expected sales as much as possible while maintaining its

international vision. It wants to refrain from short-term opportunities which might not match with its

brand image. Rather, YELLOW wants to capitalize on its image as fusion-wear high-street brand.

The garments industry too has a bright future. It’s growing. Seven or eight years ago, it was a very

different scenario. Today, all the retailers are getting better.

Finally, YELLOW’s philosophy of having a broader, beyond the border, international orientation is

further strengthened by its investment in intellectual capital. YELLOW believes that today’s

investment is tomorrow’s returns.

YELLOW seems to be on the right path if its overall track record is compared. But it needs to be

more cautious as it ventures into new unknown markets.

Recommendations

Further investigation needs to be conducted as to why a large proportion of the respondents, despite

having a positive attitude towards the brand, have never shopped from YELLOW.

The large proportion of potential customers who have never purchased a YELLOW product raises

concern.

As demonstrated by the study above, YELLOW has successfully built up its brand image among

buyers, but it has some work to do for encouraging and nurturing frequent purchase habits among

0

2

4

6

8

10

12

14

16

18

Once More Than Once Regularly Never

Figure8‐ FrequencyofBuying


13

consumers and make sure that failures do not get repeated. The following recommendations could be

used by YELLOW:

Introduction of mass marketing tools in promotion. Currently, YELLOW employs only billboards as

regular means of reaching out to the mass target group. If the brand is to expand its customer base,

additional advertisements via television, more event sponsorship, newspapers, and fashion magazines

should be arranged. These applications need to be done on an international scale to catch the

attention of potential buyers in foreign markets.

Improvement of website. Given the brand’s reputation and general recognition, the website

www.yellowretailconcepts.com has a good outlook but should be improved in terms of content. It

should be updated on a regular basis, and the prices of products should be included as well.

Ascertain market feasibility before expansion. Yellow’s plans to open branches both home and

abroad are commendable, yet proper feasibility studies should be conducted to avoid losses in terms

of assets and brand equity. Lessons should be learned from the recent disappointment in Sylhet.

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Bibliography

1. Mr.Ijlal Razi, Deputy General Manager, Brand, Yellow, Beximco Textiles Division.

2. Yardley, Jim, Ed. “MADE IN BANGLADESH Export Powerhouse Feels Pangs of Labor

Strife.”The New York Times, Asia Pacific. The New York Times, August 13 2012. Web. December 6

2012.

<http://www.nytimes.com/2012/08/24/world/asia/as-bangladesh-becomes-export-powerhouse-

labor-strife-erupts.html?pagewanted=all>

3. “Local Bangladesh top exporter in European market, EU-Bangladesh trade update released.”

Star Business Report. The Daily Star, April 6 2010. Web. December 6 2012.

<http://www.thedailystar.net/newDesign/news-details.php?nid=133187>

4. Rabby, Mir F, Ed. “Local clothing brands make their mark.”

The Daily Star Your Right to Know. The Daily Star, March 23 2011. Web. December 6 2012.

<http://www.thedailystar.net/newDesign/news-details.php?nid=178736>

5. “Marketing Reports/Tariffs Textiles, Apparel, Footwear and Travel Goods Bangladesh.” Office of

Textiles and Apparel (OTEXA). Department of Commerce, United States of America, International

Trade Administration, September 14 2012. Web. December 6 2012.

<http://web.ita.doc.gov/tacgi/overseasnew.nsf/alldata/Bangladesh>

6. “Beximco Taking Bangladesh to the world.” Beximco. n.p., Web. December 6 2012.

<http://www.beximco.com>

7. “Bangladesh | Data.” The World Bank Working for a World Free of Poverty. The World Bank.

Web. December 6 2012.

<http://data.worldbank.org/country/bangladesh>

8. Rashid, Mamun, Ed. “Rising middle class in Bangladesh.” The Financial Express. The Financial

Express Bangladesh, August 7 2012. Web. December 6 2012.

<http://www.thefinancialexpress-bd.com/more.php?news_id=139310&date=2012-08-07>

9. “Yellow” YELLOW. Facebook. Web. December 6 2012.

<http://www.facebook.com/YellowClothing>

10. “YELLOW by Beximco.” YELLOW. n.p., Web. December 6 2012.

<http://www.yellowretailconcepts.com>

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Appendix

Raw Survey Data A3

Response Age Gender 1. Westecs 1. Artisti 1. Yellow 1. Ecstasy 1. Soul Dance1 17 Female 3 2 1 4 52 19 Male 2 3 1 5 43 21 Female 5 4 1 3 24 16 Female 3 1 4 2 55 16 Male 4 1 2 3 56 22 Female 4 2 5 4 17 23 Female 4 3 2 5 18 27 Female 3 5 2 1 59 19 Male 4 3 2 5 1

10 20 Male 3 4 3 3 211 19 Male 4 1 3 2 512 20 Male 3 3 3 4 313 21 Male 4 3 3 5 414 22 Male 5 4 2 1 315 21 Female 2 5 4 4 116 28 Male 2 2 3 2 117 20 Male 4 5 1 4 418 19 Male 2 3 3 2 119 24 Male 5 3 2 1 420 20 Female 2 2 3 4 221 20 Male 3 2 1 4 522 21 Female 4 3 2 1 523 19 Male 2 1 3 4 524 21 Male 2 1 5 1 325 20 Male 1 2 4 3 526 19 Female 5 3 4 3 127 20 Female 5 4 4 2 228 21 Female 3 4 1 2 529 21 Male 2 1 2 2 330 19 Male 5 5 5 5 531 18 Female 3 4 2 1 532 20 Female 2 4 3 5 133 20 Male 1 1 2 5 534 20 Male 5 4 3 2 135 20 Male 1 3 2 4 536 20 Male 2 1 3 4 537 18 Female 1 1 1 1 138 20 Female 3 4 2 1 5

39 20 Male 3 5 3 2 1

40 19 Male 4 2 1 5 541 18 Female 5 1 3 1 142 22 Male 5 2 3 4 143 20 Male 2 5 3 1 444 20 Male 4 3 2 4 245 19 Female 2 1 5 4 146 19 Male 2 3 4 3 1

15<Age<28 Total 145 129 123 138 142

Raw Survey Data A3

2. Feature 3. ImpressionProduct Quality Premium Brand, High Quality Product, Trendy Designs

Price Affordable Prices, Premium Brand, High Quality ProductProduct Quality Premium Brand, Trendy Designs, Others

Design Premium Brand, OthersProduct Quality, Design Premium Brand, High Quality Product, Trendy Designs

Product Quality Premium BrandProduct Quality Trendy DesignsPrice, Design High Quality Product

Product Quality Affordable PricesPrice, Design Affordable Prices, Trendy Designs

Product Quality, Design Premium Brand, High Quality Product, Trendy DesignsDesign Trendy Designs

price to quality ratio Trendy DesignsPrice, Design, Brand Name Premium Brand

Price, Product Quality, Design Premium Brand, High Quality ProductPrice, Design High Quality ProductBrand Name Others

Product Quality, Design High Quality Product, OthersDesign Trendy Designs

Price, Product Quality, Design, Brand Name Premium BrandPrice, Product Quality, Design High Quality Product, Trendy Designs

Product Quality, Design Trendy DesignsProduct Quality Trendy Designs

Design OthersProduct Quality, Brand Name Premium Brand

Design Trendy DesignsProduct Quality Premium Brand

Price, Product Quality, Design, Brand Name Trendy DesignsDesign, Brand Name Premium Brand, High Quality Product, Trendy DesignsPrice, Product Quality Trendy Designs

Price, Product Quality, Design Premium BrandDesign Premium Brand

Price, Product Quality, Design Premium Brand, Trendy DesignsProduct Quality Affordable Prices

Price, Product Quality Trendy DesignsPrice, Product Quality, Design Premium BrandPrice, Product Quality, Design Premium BrandPrice, Product Quality, Design Premium Brand, Trendy Designs

Price, Product Quality, Design, Brand Name Premium Brand

Product Quality, Design, Brand Name High Quality Product, Trendy DesignsPrice, Product Quality, Design Trendy Designs

Price, Product Quality, Brand Name OthersPrice, Design Others

Design Premium BrandDesign High Quality Product

Product Quality Others

Raw Survey Data A3

4. First Encounter 5. FrequencyWord Of Mouth More Than Once

Billboards RegularlyOutlet Stores Once

Others NeverWord Of Mouth NeverWord Of Mouth More Than OnceWord Of Mouth NeverOutlet Stores More Than Once

Word Of Mouth NeverOutlet Stores Once

Word Of Mouth NeverWord Of Mouth OnceOutlet Stores Once

Billboards More Than OnceOutlet Stores OnceOutlet Stores Regularly

Word Of Mouth NeverOutlet Stores NeverOutlet Stores More Than OnceOutlet Stores Never

Others RegularlyBillboards More Than OnceBillboards NeverBillboards OnceBillboards Once

Newspaper Ads More Than OnceBillboards More Than OnceBillboards More Than Once

Outlet Stores OnceOutlet Stores Never

Newspaper Ads More Than OnceOutlet Stores More Than OnceOutlet Stores OnceOutlet Stores OnceOutlet Stores More Than OnceOutlet Stores NeverOutlet Stores NeverOutlet Stores Never

Word Of Mouth More Than Once

Outlet Stores More Than OnceBillboards OnceBillboards Never

Outlet Stores NeverBillboards Once

Outlet Stores More Than OnceOutlet Stores More Than Once

Transcription of Interview A4-1

The report is based on an interview with Mr Ijlal Razi, Deputy General Manager, Brand, of

Beximco Textiles Division. The interview took place at the Beximco Industrial Park, Sarabo,

Kashimpur, Gazipur on Monday, 3 December, 2012. The team members present were: Ahamed

Najeeb, Ornila Khan, and Sayem Faruk.

The following is a transcription of the two-hour interview.

Sayem: We wanted to know about the company, Beximco, as a whole, and also about YELLOW, its

mission statement and its vision.

Mr Ijlal: Beximco is not a company. It’s a conglomerate; it includes: Beximco Pharma, Beximco

textiles. Beximco has been producing garments for both fashion and core brands. Go to any store in

the world, 3-4 shelves are filled with BD clothes even in high street labels. Beximco supplies to

Calvin Klein, Tommy Hilfiger, JC Penney, Macy’s. Beximco follows European fashion standards

and it is the biggest producers for ZARA… There was an extra 5% to 7% of fabric produced. So, we

thought that we have everything we needed to start our own retail label… The first store of

YELLOW was in Bashundhara City, downstairs. Panjabis in Bangladesh have too much printing and

embroideries. In Pakistan, there are no long panjabis and they have very subtle embroideries. The

first hit product was panjabis. 300-400 pieces were produced and sold out in 2 days. We found that

people are not getting what they want because it’s not available in the market. They are sticking to

the traditional panjabis because they don’t have substitutes. So we thought now is the time to expand.

Najeeb: What were your initial marketing strategies?

Mr Ijlal: Initially, to be honest, there was no marketing. The only features were properly-priced

products, products were different and exclusive, and the big name of Beximco was attached to it. So

there was credibility for quality. Good fabric, good stitching, good designing, influx of a certain elite

class who accepted YELLOW was a big source of motivation for us… The second store was opened

in the ground floor of Pink City in Gulshan… Retailing is not a rocket science - it’s good supply

chain management, updates about fashion facts. We cannot implement European Fashion trends here.

Ornila: How many stores have you opened till now?

Mr Ijlal: Three in Karachi, One in Lahore, eight in Dhaka, one in Chittagong… We listen to

customers personally. We have a standing order that we have to replace product at once customers

when the customer comes in with for a replacement. And we will also provide feedback on the

solution. This personal contact multiplies your message… We have put up a few billboards in

Dhaka. Our Marketing strategy is to open the store in the right location, in a prime location… We

maintain credibility; we maintain brand equity and good customer relations… One thing we

underestimated was the power of social media. Our page on Facebook currently has 257,000 hits and


almost 4000 people are always talking about it. This is a huge response… We publish lookbooks,

which is available at stores free of cost. Anybody can grab a copy at a YELLOW store.

Sayem: Could you elaborate the rationale behind going global?

Mr Ijlal: You see the idea behind YELLOW is that everybody is connected to country, yet you need

a vision, you need to cross borders, compete internationally. You need to research the global markets.

Following international trends doesn’t make you an outsider; rather it brings you closer to your own

values. Pakistanis are amazed to see a Bangladeshi brand… Yes, heart will always be Bangladeshi.

But our scope of vision should be international. How long will you wear panjabis, jamdani for the

sake of culture? Now some designers are fusing jamdani with other fabrics… Initially, it was a

learning curve. We learned that the menu we provide to the customer, it has to be innovative. At first,

store used to be quite empty. But we made sure as a part of the strategy, whatever we put up we will

make that with our heart in it. Don’t you think Beximco was capable of buying products from

Thailand? But we didn’t do that. That is why the brand equity of YELLOW is the best. People

associate us with international brands. Whenever in any forum you discuss fashion retailing in

Bangladesh, you will always find that YELLOW stands out. Today what you see is properly

designed, right from fabric to garments, except for neckties - we import them… We have always

catered to all segments. Look at this German shirt, we exported the fabric from Germany and made it

here in Bangladesh. Nobody can think of importing from Europe, it is so expensive. It is all about

the fiber, yarn, accessories you use… We try to cater to all segments but we target youth. Because

youth is our big customer my panjabis and everything you see here, you will see that YELLOW

touch in them. Some people think that I pull out fabric and make panjabis. But it’s wrong. There is

something special, some special elements. Every time you design the thing doesn't have to be gaudy,

I don't need to look like Nawab of a state. Having 500 flowers on a Punjabi won't make me... wont

declare me a Nawab. It should look smart. The idea is to look smart. This is the whole idea. At the

moment we are concentrating on social media. Secondly, we have started online selling in Pakistan.

There is a website called Daraz.com. Daraz is owned by a European company. The online sales

wows me. We are trying to hook up Bangladesh with some online retailers as well. There are

problems in terms of payment. A lot of people do pranks. People are still a bit reluctant. We’re going

forward to the UAE , Dubai. Sri Lanka wants us. We are expanding. We want to get into India but

the entry in difficult there.

Ornila: Are you trying to expand into Bangladesh?

Mr Ijlal: We already opened a store in Chittagong.

Najeeb: How many stores are there in Bangladesh?

Mr Ijlal: Nine. We have closed our Sylhet store, so only in Dhaka and Chittagong… In business


there is nothing called ego. If you did make a mistake, try to overcome that mistake. If you opened a

store in Sylhet and the people who visit this store during seasonal sale, also visit the store that's in

Dhaka. We were not confident from the beginning. It was more of a fun-fun thing. We thought it's

not viable, so we closed.

Sayem: Do you have any business buyers?

Mr Ijlal: Yes, a lot of them ask us to sell stuff to them. I supplied neckties to Eastern Bank. 1,200

pieces. We keep getting offers, but I cannot fulfill my local demand, which is my priority. I would

love to do institutional selling at a large level, but not at the moment, we are trying to organize

YELLOW in a way so it will look global… Opening a shop is easy, but it's difficult to put the system

in place first especially the information system, your reports, your tracking formats. We have been

using a P.O.S. system, point of sale system for the past 5-6 years. We have tuned it to our

requirements. There is certain information required to improve yourself. What's selling, what's not

selling, looking at the past 15 days trend we can predict if it will be a failure or a huge success. Do

we need to replenish?... I invest on social media… We are organizing fashion shows in universities.

It's not just about marketing; it's about having a connection with the youth. We have a lot of interns

here we will grow together… We also get interns from Europe. Our head of design, Adelela is from

Spain. She worked in Zara before. Since we’re in retailing, I have limitations because there is a

limitation from the customers’ side. There is an optimum retail level that I cannot cross.

Sayem: Who do you consider as your key competitors?

Mr Ijlal: Aarong does not sell western wear, so it’s not our competitor. They mainly sell handmade

embroidered panjabis which is very different from what we sell… Ecstasy’s most products are not

designed by them, they are imported. Plus, they’re not operating at the aggressive international like

us. Artisti is the REAL competitor, in terms of design. Soul Dance is also a competitor in terms of

creativity, design, merchandise, and marketing. But it is not in good shape… Westecs is a confused

brand. In one side there is a 20000 taka suit, and on another a 300 taka shirt. I don’t want to be

buying from such a store if I’m fashion conscious… Our tolerance level has gone up. But that

doesn’t mean that I’ll allow my daughter to go out wearing a mini-skirt. To be honest, Urban Truth

has something missing there.

Najeeb: How about the local brands like Cats Eye? They are making progress. What do you say

about that?

Mr Ijlal: Cats Eye is confined between a certain class of people. I want to follow international trend.

Ornila: What are the market shares?


Mr Ijlal: YELLOW’s market share is good, it’s growing. People complain why we have no Sarees,

and Salwar Kameezes. I have my own market share so I focus on them. I am working on blocks now.

They’ll look like blocks but they’ll not be done on blocks. They’ll be done in high-density printing.

But the feel would be as if you’re wearing a block print... you know like Narshingdi blocks. I’m

working on that.

Mr Ijlal: I want to be traditional. I don’t want to be wearing some super tight panjabis and have

some shiny things on the chest. I want to be traditional. I try my level best to be traditional. A lot of

time I do fabric detailing. I play with my garment detailing. But I want subtle detailing. And my

claim to fame is my pattern, my fit. You wear my panjabi, you’ll feel you’re slim.

Najeeb: and these panjabis these are very comfortable as well. The cloth is very comfortable.

Mr Ijlal: Yeah. And you see the utility. You wear this to your Friday namaz, right? You can wear it

in the evening when you’re hanging out with your friends. You can wear to a “holud”. So you see the

utility. With those (embroidered) panjabis you cannot come out in the day wearing those. People

would laugh at you...

Sayem: I guess YELLOW would be considered an upscale brand in Bangladesh. Do you agree?

Mr Ijlal: It is. Yes. Of course it is.

Sayem: You mentioned that you’re targeting a lot of segments at the same time. But then again,

when you segment it in terms of income, you’re targeting the upper income levels, right?

Mr Ijlal: I would say middle-income group.

Sayem: In terms of age, that would be like 16 to ...?

Mr Ijlal: 16 to 25.

Ornila: No kids’ section?

Mr Ijlal: Yes. Kids’ we’re doing but still it’s half-done. We’re trying to develop kids, but still we’re

not there.

Sayem: Okay. Could you give us an idea about the price range?

Najeeb: The price structure.

Mr Ijlal: Price structure? It depends. You want to know the range? From what to what?

Ornila: Yes.


Mr Ijlal: See I tell you, the cheapest is my boxers. This is the practical that the archive helps.

Otherwise, I would have to go through a lot of reports and stuff. I don’t think you’ll find anything

cheaper than this. 545, this is a boxer which is as good a GAP boxer. So probably 550 to... probably

that formal shirt which is for 4000. This is our Prive range. See the box, cool?

Sayem: So that’s around 4500?

Mr Ijlal: Approximately, yes.

Sayem: And the panjabis cost less than that?

Mr Ijlal: Yes.

Najeeb: The panjabis are around 1 and half thousand.

Mr Ijlal: My maximum panjabis are 1745 and some my were 2000. That’s it. They start from 1545,

the basic ones. And I have this white collection which I did for Hajjis. This is 2000. These were

expensive. I do little embroideries also.

Najeeb: Subtle embroideries.

Mr Ijlal: 1745 for the embroidery. Quite reasonable I would say.

Sayem: No t-shirts or anything?

Mr Ijlal: Yes we do make t-shirts and polo shirts as well. We did a nice collection of the

abbreviations which you use in Facebook – “LOL.” My designer wanted to “LMAO.” I said no

don’t. Too much for Bangladesh. So, we do t-shirts. 745. Our best are the polos. We are very proud

of them.

Ornila: Yeah, they’re very nice.

Mr Ijlal: They’re of very international standard.

Najeeb: And these are all manufactured here?

Mr Ijlal: Yeah. Here, here. All. See this.

Sayem: But the fabric... where is the fabric from?

Mr Ijlal: Beximco.

Sayem: Oh, Beximco has its whole supply chain set up here?

Mr Ijlal: Yeah, yes yes. This is all one vertical complex.


Najeeb: I assumed that these were imported. But now I know it’s not.

Mr Ijlal: No No. Absolutely not. We’ll not import.

Ornila: Would you say you have some kind of specifically niche products, like some “adibashi

(ethnic)” products?

Mr Ijlal: No. We don’t do ethnic products. Would you consider my panjabis to be ethnic?

Sayem: Something very niche.

Najeeb: Niche marketing, you don’t go for niche marketing?

Mr Ijlal: No. niche I tell you, we did these. Would you like to call this niche?

Ornila: Yeah these are somewhat niche.

Mr Ijlal: These are in fashion. We just launched this and probably half of the models in Dhaka have

already got it. The reason I don’t get into a lot of the traditional stuff is because I feel I’m already

doing a lot of traditional stuff with a new flavor. Right?

Najeeb: It’s more of a mix of traditional and modern.

Sayem: Just to be sure, you guys sell directly to the customers, right? No franchises, no dealers?

Mr Ijlal: No franchises. It’s all company operated... Brand name, quality, fit. Guaranteed. See one

thing is that we stand by the product. Quality. Everything. We stand by that.

Najeeb: Do these, let’s say fall-winter collection, do these repeat?

Mr Ijlal: No we try not to repeat. You see, the customers know what’s in fashion. And we don’t

mass produce in the sense that our collection is available only for a limited period of time. So, if you

want to buy, you have to buy it then and there.

Sayem: Initially, you talked about building a relationship with the customer, do you have some sort

of programs?

Mr Ijlal: Yes, we have a priority card.

Ornila: Do you personally call only those customers or normal customers?

Mr Ijlal: Anybody. The priority card has nothing to do with our customer relation.

Sayem: Do you build up a profile of a customer, of a patron?


Mr Ijlal: Yeah, we do. The priority cards that I’m talking of, the club members, it’s not any normal

plastic card. You get points and you redeem points. The card is not even made here. We import the

card. We send the customer details to another country, and from there they send us the cards.

Sayem: Moving to some sensitive information...

Mr Ijlal: Sales?

Sayem; Yes. Sales, profits and stuff.

Mr Ijlal: You guys want figures? Let it go.

Sayem: Just give us some idea. You don’t have to say the exact figure.

Mr Ijlal: My 2012 projection is around 47 crores. Maybe around 50 crores.

Sayem: About the pricing, what percent of that would say is your gross margin?

Mr Ijlal: I won’t answer that but I’ll tell you something that’ll help you. See, in retailing there are a

lot of overhead costs involved so the net margin should not be less than 30% to 35%. So, now you

calculate.

Najeeb: Where do you see YELLOW in the next 4, 5 years?

Mr Ijlal: Frankly, I see YELLOW, specifically talking about Bangladesh, I see another 7 to 8 stores.

In probably different cities. But we want to catch the low hanging fruit first, that is, Dhaka. So in

Dhaka, I see another 4 stores. I’m already opening in Jamuna Future Park in February or March.

Najeeb: Would that be a big store?

Mr Ijlal: Yes. 7000 square feet.

Sayem: What would be the expected sales and growth? Any specific target like you want achieve

20% growth in the next 4, 5 years.

Mr Ijlal: I want to achieve 100%!

Sayem: As much as can be done?

Mr Ijlal: As much as possible. Whatever business you get into, you have to make profits. Now there

are two ways to do it. Either you do the short-term thing like making lungis or sarees. Yes this will

help in generating cash but this will be a very short-term approach. I’m a western-wear, or you can

call me a fusion-wear brand, I have to stick to it, right? So keeping that international vision in mind,

we’ll see to what extent we’ll grow. And In Sha Allah we’ll grow, I know.


Ornila: Where do you see the industry, the clothing industry as a whole, in the future?

Mr Ijlal: It’s growing. 7 or 8 years ago it was very different. Today, all the retailers are trying their

level best. They’re getting better. The only problem is with the vision. The vision has to be broader.

It has to be beyond the border. It has to be international. And when you opt for the global vision, then

you have to invest in the intellectual capital. Intellectual capital means you need to hire good

people... Investing in the intellectual capital is very important. We’re a big supporter of that. Big

time! I say that yes, you invest today, and you’ll get your returns. That is the whole idea. At

YELLOW, we go crazy with our people.

Sayem: Ok. These are the final few questions. Your market consists of casual suits, denim jeans.

What would say the scope of your market is?

Mr Ijlal: My market? In terms of the product category?

Sayem: Yes.

Mr Ijlal: Casual wear would suffice. You see, the reason behind it is that, all over the world, people

are opting for casuals. Even in offices. There is a new term called Smart Casual and you can wear

that to office. So, the maximum market share would be casuals.

Sayem: Considering all these products, what would say the total market size would be, in terms of

sales that you can capture, like a 20 billion taka market?

Mr Ijlal: That is a very difficult question. Frankly speaking, still the actual market size, of the

industry, has not been worked out. There is a lot of disparity between classes. If it had been like 60%

of your people are mid-level income group, then it would’ve possible. Here there’s a lot of disparity.

One person comes to office in a helicopter, the other person doesn’t even know whether he’ll be able

to have breakfast or not. So frankly speaking, I don’t have an answer to that.

Ornila: There wasn’t any study conducted?

Mr Ijlal: No. It’s not feasible actually... Anything else?

Sayem: I believe we’ve covered everything. Thank you for your time.

marketing report on yellow by beximco

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