A Paper onWhat changes are observed in the marketing system of Bangladesh during last two decades?

Course: MKT-521-Marketing Management

Prepared for Dr.Md. Belayet Hossain Professor Department of Marketing University of Dhaka Dhaka

Prepared byMd. Anwarul Haider, ID #41427027

EMBA, 27th Batch,Department of Marketing

University of DhakaDhaka

Date of Submission: July 01, 2016

1. IntroductionIn market economies, there are assortments of various marketing systems that exist, contingent upon the business and the organizations inside that industry. It is essential for little entrepreneurs to comprehend what sort of marketing system they are working in when settling on valuing and creation choices, or while figuring out if to enter or leave a specific industry. Marketing system is changing day by day in the world market and its’ impact is noticeable in Bangladesh as well. A marketing system is any precise procedure empowering numerous business sector players to offer and ask: helping bidders and venders associate and make bargains. It is the value instrument as well as the whole arrangement of control, capability, qualifications, notorieties and clearing that encompasses that system and makes it work in a social context.

Since a marketing system depends on the supposition that players are always included and unequally empowered, a marketing system is recognized particularly from a voting framework where hopefuls look for the backing of voters on a less normal premise. Be that as it may, the cooperation’s amongst business sector and voting frameworks are an essential part of political economy, and some contend they are difficult to separate, e.g. frameworks like aggregate voting and spillover voting include a level of business sector like dealing and exchange off, instead of straightforward explanations of decision.

2. Change of Marketing SystemAs is generally experienced, markets are not static, but rather in consistent flux. The progressions are not unsurprising and frequently shocking, even after exhaustive business sector investigation and key arranging. Our intercessions turn out results that were either unexpected or unforeseen. This sort of conduct makes particular difficulties for observing and assessment of advancement intercessions. Changes in business sectors must be observed and measured utilizing approaches that grasp their dynamic and erratic nature. Progresses in many-sided quality sciences can give helpful standards and ideas to fabricate the establishments of more viable and pertinent checking and assessment structures for both business sector and money related frameworks. Some changes of the changes of marketing system of Bangladesh are discussed in this paper.

2.1. Change is TechnologyICT is the backbone of any digital initiative. ICT covers the vast area of information technology, communication technology and the telecommunication technology. ICT is also a combination of physical backbone and intellect. Computer systems, network machineries, software, wire and wireless connectivity systems, broadcast hardware and many other hardware and accessories are the physical backbone. The trained human behind the backbone are the intellect. Digital Bangladesh is an Idea that includes the IT use for management, administration and governance to ensure transparency, accountability and answerability at all levels of society and state. To materialize the idea of digital Bangladesh, development of countrywide backbone and expected number of human recourses are the basic needs.

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Despite having 50 years of history the government has only from 1997 started the process of developing a national ICT strategy. In 2002 Bangladesh identified ICT as a "thrust sector" as it represents potential for quick wins in reforms, job creation, industry growth, improving governance and facilitating inclusion, and it has high spillover effects to other sectors. Today, in Bangladesh, the overall IT sector (excluding telecoms) is small, valued at $300 million, with IT/ITES claiming 39% ($117 million) of that value. The overall IT/ITES industry has enjoyed a high growth rate of 40% over the last five (5) years and this trend is expected to continue.

Fig. 1: Proportion of households access to ICT at National LevelSource: BBS, 2013

Fig. 2: Proportion of households access to ICT at Local LevelSource: BBS, 2013

Fig. 3: Proportion of households access to ICT at Local LevelSource: BBS, 2013

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2.2. Change in AgricultureEnhancing the execution of the farming segment is an essential method for lightening neediness amongst the most helpless and underestimated in Bangladesh. The reception of ease horticultural advancements by little holder agriculturists is generally comprehended to be a noteworthy driver of neediness lightening and nourishment security. Commercialization of new and existing advances is progressively being seen as the best method for empowering far reaching appropriation by agriculturists. However innovation commercialization exercises in Bangladesh are described by regularly divided and inconsistent methodologies with little coordination. In this the marketing system for innovation commercialization can be seen to experience the ill effects of various systemic shortcomings. Intercessions by improvement associations in the marketing system to fortify these ranges of shortcoming can prompt significant effects in professional poor development and destitution easing. Arranged by International Development Enterprises (iDE) for the Swiss Agency for Development Cooperation (SDC), this study gives a photo of the innovation market framework in Bangladesh. The study examinations the marketing system utilizing a set up business sector improvement approach1, concentrating especially on recognizing the issues around innovation commercialization, the fundamental systemic limitations, the key partners and administrations which affect upon the framework, and the key regions of the empowering environment for innovation commercialization. This examination empowers the report to utilize a mediation rationale tool2 to distinguish various passage focuses for intercessions which can be actualized to reinforce the marketing system.

Agriculture is a major economic activity in Bangladesh. It currently employs around 50 percent of country’s labor force and contributes around 20 percent of country’s GDP. Growth in agricultural sector has important linkages with the overall economy through various channels. It is important to note that, at the WTO, Bangladesh, as an LDC, is not bound to undertake any liberalization in its domestic agricultural sector in terms of tariff cut or subsidy withdrawal. However, there are concerns that actions taken by the developed and developing countries in terms of reduction in agricultural domestic support measures might have important negative implications for the net food importing countries like Bangladesh. It is also important to note that under bilateral trading arrangements, such as India-Bangladesh bilateral FTA, there are scopes for increased trade in agricultural products between Bangladesh and India. Bangladesh’s market access for its agricultural exports in India is likely to increase whereas there will be increased imports of agricultural products from India. Therefore, liberalization in the trade in agriculture has important implications for the agricultural commodities which are either exported or imported. Increased market access of agricultural exports from Bangladesh under such trade agreement will lead to rise in production and employment in those export-oriented sectors; whereas, domestic liberalization in the agricultural sectors may dampen output and employment in the import-competing agricultural sectors. It thus appears that the growth in the domestic agricultural sector doesn’t only rely on the domestic policies and programs, rather global and regional trade policies have important implications for this sector. Moreover, the various economic policies and programs, such as domestic fiscal policies, import policies and programs for growth in agricultural productivity also affect the development of the agricultural sector in an economy.

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This study explores the links between major economic policy reforms and growth the agricultural sector in Bangladesh. This study examines how economic policy reforms affect the agricultural sector in Bangladesh in terms of output, import, export and employment. Under a general equilibrium framework, this study explores three trade liberalization scenarios (a global agricultural trade liberalization scenario under WTO-Doha agreement, Bangladesh – India bilateral FTA, and domestic agricultural trade liberalization), one fiscal policy scenario (rise in agricultural subsidy) and one technological change scenario (rise in agricultural productivity).

2.3. Change is Transport Transport developments have been driven in Bangladesh mostly by improvised considerations having no explicit focus on future requirements and the means of meeting these requirements on a competitive as well as sustainable basis. The unplanned combination of rapid urbanization and motorization has been a key cause of numerous transport problems in Bangladesh. It has resulted in deterioration in accessibility, service levels, safety, comfort, operational deficiencies. The rapid urbanization process, high vehicular population growth and that of the mobility, inadequate transportation facilities and policies, varied traffic mix with over concentration of non-motorized vehicles, absence of dependable transport system and inadequate traffic management practices and parking facilities have created a significant worsening of traffic and environmental problems particularly in urban areas. Traffic accidents are now a very serious and growing problem and the safety situation is very severe by international standard. The problem of road accidents costing the community in the order of US$ 800 million (nearly 2% of GDP) each year. The other serious deficiencies resulting from ad-hoc planning are sectoral bias improper modal mix, un-integrated system, serious institutional weakness, limited role of the private sector etc. The current deficiencies have produced an unsustainable trend of transport development, which is characterized by misallocation of resources, adverse impacts on the environment and lack of competition. The current disturbing trends in transport development indicate the need for guidelines to make such development environmentally and to create a transport system that can meet the growing demand for transport services. In this paper characteristics of transportation and consequent mobility, safety and environmental effects are discussed. The purpose of the present paper is to conceptualized a vision and identify supporting policies for sustainable transport development. The authors also make an attention on key transport issues and possible options for ensuring sustainable transport development in Bangladesh.

Public Sector Financial Outlay for Development of Transport in Fifth Plan (In million taka, at 1997 prices)

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Table: Transportation system changing scenerio

Sub-Sector Total Allocation Ongoing Projects New Projects

Road Transport 64905.50 51500.00 13405.50Bangladesh Railway 24000.00 17900.00 6100.00Water Transport 13550.00 9750.00 3800.00Air Transport 7500.00 6160.00 1340.00Sub-Total 109955.50 85310.00 24645.50Bangabandhu Bridge 11800.00 11,800.00 -Total 121755.50 97110.00 24645.50Note: Of the total Plan outlay, only 20.24 per cent is available for new projects. The highest outlay is given to the road sub-sector (about 53.30 per cent) which is followed by Bangladesh Railway (19.71 percent).

2.4. Change is EducationThe South Asian nation of Bangladesh is one of the world’s most densely populated countries. Currently the eighth-largest state by population, Bangladesh is home to more than 160 million people. It is bordered by India to the west, north, and east, and Burma to the southeast.

Previously a province of Pakistan, Bangladesh is a relatively new country that secured its independence in 1971. Most Bangladeshis are Muslims and the official language is Bengali. The unofficial second language, however, is English, and it is widely used in higher education as the language of instruction at both private and public institutions.

Just over half of the country’s GDP is generated by the service sector, but even so, nearly half of its people are employed in agriculture. Poverty remains a massive issue in Bangladesh, with nearly a third of the population (31.5%) at or below the national poverty line.

However, the Bangladeshi economy has begun to transform itself over the past decade or more, and has clearly established a pattern of strong and steady growth over the period. “For the last 20 years the economy of Bangladesh has been growing at the rate of 5% on average,” says Shamsul Haque, the vice-chancellor of Northern University Bangladesh. “This growth has been witnessed by the changing composition of GDP in the major sectors. Currently over 50% of GDP comes from the service sector and about 30% from manufacturing industries, and agriculture contributing to just under 20%. This transformation in the economy created demand for higher education in the country.”

A massive school-aged population and strengthening economy have placed Bangladesh on the list of key emerging markets for the next decade

Tertiary enrolment has tripled in the country since 2000, as has outbound mobility

Private universities are playing an increasingly important role in meeting the growing demand for higher education

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New legislation introduced in 2014 has also opened the door to new branch campuses in the country operated by foreign universities

2.4.1. Burgeoning demand for higher educationBangladesh shares the same challenges of many of its South Asian neighbours: its economy is growing quickly as is its large, youthful population. 34% of Bangladeshis are aged 15 or younger, and the country has an opportunity to realise the full benefit of this “demographic dividend” in the years ahead – but only if it can provide education and training to the millions of students who need it.

“Rising demand in South Asia for higher education is currently not being met,” reports the British Council. “As South Asian countries forge a path towards growth of their industry and services sectors, the role of the higher education sector in facilitating a skilled, knowledgeable workforce has become critical.”

Indeed, Bangladesh has seen a tremendous increase in enrolment over the last decade or so. Total tertiary enrolment has nearly tripled since 2000 and surpassed two million students in 2012. But even with that growth, overall participation ratios are quite low, to the point that only 13.23% of college-age students were enrolled in higher education in 2012, as compared to 24.80% in India or 26.70% in China for that same year.

The overall enrolment growth since 2000, however, is an important indicator of a dramatic spike in demand for higher education. Looking ahead, the British Council counts Bangladesh along with Nigeria, the Philippines, Turkey, and Ethiopia; among the emerging economies with the greatest forecast growth in tertiary enrolment for the next decade.

Domestic tertiary enrolment is forecast to increase by another 700,000 students through 2022, meaning that the total number enrolled in higher education will approach three million by that point.

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Fig. 4: Tertiary school populations in South Asia, 2010Source: UNESCO, UN World Population Prospects

2.4.2. Outbound keeping paceJust as the increase in domestic tertiary enrolment reflects an underlying surge in demand over the last ten to 15 years, Bangladeshi outbound mobility has also grown over this period. Just over 7,900 Bangladeshis pursued higher education abroad in the year 2000, but that number had tripled by 2013.

UNESCO tells us that an estimated 24,112 Bangladeshi students went abroad that year, with a fairly balanced distribution among major study destinations.

Interestingly, most students pursue their studies outside of the region. The UK was the leading choice among Bangladeshi students in 2013 (4,204, or 17.44% of the total), followed by the US with 3,664 students (15.20%), Australia with 3,603 (14.94%), Malaysia with 2,003 (8.31%), and Canada with 1,530 students (6.35%). Add Japan and the 1,364 Bangladeshi students that it hosted in 2013, and those top six destinations together account for just over two-thirds of all outbound mobility from the country.

Demand for an overseas education is being fueled by a supply-demand gap at home, but also by persistent quality issues in Bangladeshi higher education and by corresponding issues of employability.

A recent British Council report makes the following general observation of education outcomes in the region: “An unfortunate by-product of the low quality of higher education – both for the economies of the region and the students themselves – is the low employability of graduates who emerge from the universities. Though there are notable exceptions, as a

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general rule, employers in South Asia are more inclined towards graduates from the large public universities.”

2.4.3. Growing role of private providersStudy abroad is one solution to a capacity crunch at home. But an expansion of the system through growing participation of private-sector providers is another. With the country’s independence in the early 1970s, many schools and institutions in Bangladesh were brought under state control. The National University was established in 1992 and functions as an umbrella institution to administer exams and award credentials for a large network of affiliated colleges delivering both undergraduate and graduate degree programs. The National University remains the premiere higher education institution in the country today, and competition for entry – in part because of the heavy state subsidies for tuition – is fierce. But the expansion of private universities has been an important part of the expansion of Bangladeshi higher education over the last decade, and increasingly it is the private sector that is expected to shoulder the load of the country’s growing demand for advanced education. As the British Council has observed, “Rocketing demand for higher education has facilitated the growth of private provision as a strategy to absorb pressure on public sector places, shifting the costs of tuition away from the state, onto students and their families.” There are 31 public universities in Bangladesh today but the number of private institutions is growing quickly. Estimates vary, in part due to how private institutions are counted, but there are as many as 84 private universities operating currently – the vast majority of which have been established since 2000. Private institutions enroll an estimated half million students, or roughly a quarter of the total tertiary enrolment in the country. The growing influence of the universities and their burgeoning student body was recently felt when the government was forced to abruptly alter plans to impose a 7.5% VAT (value added tax) levy on private university fees. In the face of mounting student protests, the government changed its policy so that university fees would be inclusive of the VAT, in effect meaning that the tax burden has shifted (at least for the moment) to the institutions themselves rather than the students. Up until last year, the growing influence of private university operators had also kept at bay new legislation that sought to open the Bangladeshi market to foreign providers. However, after a delay of several months, a new law was brought forward on 31 May 2014 to allow foreign universities to establish joint ventures with local partners and operate branch campuses or study centers in Bangladesh. Any such branch operations are subject to the approval and oversight of Bangladesh’s University Grants Commission (UGC) and must comply with a regulatory and licensing structure set out in the new legislation. The move remains controversial, at least within the educator sector in Bangladesh. Private providers charge that allowing foreign providers to set up local operations will weaken higher education in the country. The government for its part is confident of the quality controls in place and of the level of oversight provided for by the new law. “We will exercise caution so that no one can deceive students and no one can do business in the name of providing an education,” said Education Minister Nurul Islam Nahid.

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3. Participatory Market Systems Development Participatory Market System Development (PMSD) is Practical Action’s approach to inclusive markets that reduce poverty on a large scale and protect the environment. Markets, whether for crops, livestock or even technologies, can act as a powerful platform to give marginalized farmers in developing countries, and those who provide services to them, access to valuable networks, technologies, experiences and assets that can help them work their way out of poverty.

However, markets can be plagued with inefficiency and inequality between different groups of people, especially in contexts where poverty is acute. This can be caused by a number of things, for example a lack of access to critical information like the current price of crops, misunderstandings and conflicts between buyers and transporters, inefficient policies or just poor infrastructure.

Practical Action has been developing an approach called Participatory Market System Development (PMSD) to make markets more inclusive, reduce poverty on a large-scale and protect the environment.

PMSD is designed to bring all of the key people within a particular market together. These people are known as stakeholders, or market actors. The PMSD process works to build trust and a joint vision of change between these market actors, and helps them to collectively identify obstacles and opportunities affecting their market system. Facilitators trained in PMSD techniques support the group of market actors to come up with joint strategies and action plans that will overcome these obstacles, and take advantage of potential opportunities to improve market conditions for everyone. The approach, which has been developed over 12 years of fieldwork, is based on three broad principles: systems thinking, participation, and facilitation. You can read more about these principles further below. PMSD is based on three core principles.

3.1.1. Systems thinkingMarkets are complex systems that adapt to new information constantly. They are made up of large numbers of actors who are connected to one another and whose decisions are influenced by, and have an influence on each other. These “complex and adaptive” systems behave in ways that achieve more than the sum of their parts. In other words, we cannot predict how the system will behave by looking at the individual people or parts; we need to understand the relationships and the interactions.

3.1.2. ParticipationApplying systems thinking to markets forces us to recognize that no single actor can determine how the system will change. Some very powerful actors can influence the trends or general direction of change, but how this change manifests in reality is a product of the decisions of all the actors. As a consequence, if we want to influence how a market system develops, we need to bring strategic players together to gain an understanding of the whole system, to jointly assess blockages and opportunities and to implement collaborative strategies and actions that will improve how the system functions.

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3.1.3. FacilitationFacilitation can be understood here as creating the conditions for public and private market actors to drive change themselves. If we want to become effective facilitators, we have to therefore avoid becoming actively involved in the market as market actors. Facilitators can provide support, and even use subsidies as a way to build trust and joint visions, and to contribute to the introduction and dissemination of new ideas, practices or business models; however this must always be as part of an exit strategy. Good facilitation is at the heart of sustainability, because it is underpinned by the ownership that the key actors have over their own process of change.

4. ConclusionThe major aspects considered in this paper are issues of present marketing system in Bangladesh which is changing in a great pace. The is an efficient system that must be linked with fostering economic development, enhancing the quality of the environment, reducing waste, promoting citizen friendly development patterns and encouraging fair and equitable access and safe mobility to residents of different socioeconomic groups. The existing institution should be defined roles and make ready in the new society. Integrated and comprehensive approach would ensure with all stakeholders. Best practices in the developing countries need to agree to a package of measures for achieving sustainable development. And accepting change in the very first stage after examining will definitely help improving the overall development of the country.

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