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Executive Summary:_________________________________
Jute is a versatile, natural fiber that has been used for thousands of years to make things such as
rope, twine, hessian bags, rugs, and much more. While it is still being used extensively around
the world, it is not as popular as it could have been. Given the increasing focus on environmental
issues these days, jute good products can be put into the lime light, as they are environment
friendly. Taking in view the prospects, this is the high time to promote the export of the jute-
diversified products using limited resources.
Although Bangladesh is famous for jute and allied fibers, garments industries swept in
and have developed due to relative advantage and cheap labor cost. As there is the Multi fiber
concept of merger jute with other natural and synthetic fibers, jute has bright future for using
them in the various textile areas. It needs wide support for production and marketing of such
diversified products. As a result, the Govt. of Bangladesh initiated policy programmed for the
production of diversified jute goods through private sector.
The governments new jute policy is expected to focus on enhancement of the countrysproduction capacity, diversification of the product base and growth of export earnings. It would
be good if it were complemented with good corporate governance practices within the remaining
BJMC (Bangladesh Jute Mills Corporation) mills to ensure that both public and private mills can
compete on equal footing. BJMCs financial losses continue to be a significant fiscal burden.
This has arisen not only from BJMCs nearly automatic access to loans from the nationalized
commercial banks (NCBs) for many years, but also BJMCs greater control over the purchase
price of raw jute and export price for jute goods. These conditions do not create a level playing
field for the private mills. Addressing these issues would enhance efficiency and competitiveness
of the sector and may help Bangladesh regain its past glory in the jute market.
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Setting up a new market: France________________________
At present, Jute industry is the second largest industrial employer in the country. About
1.2 M acres of land is in use for jute cultivation per year. Bangladesh approximately earns about
2000 crore taka from exporting jute goods on an average per year. In Bangladesh 10% of the
total labor force is engaged in jute sector. Jute products have a good market in foreign countries
like France, USA, UK, Germany, Australia, and the Middle East. The products in demand
include jute shopping bags, blankets, apparels, handicrafts.
The Bangladeshi jute is yet to tap the European market. The demand for environment-
friendly products is on the rise worldwide. Based on these criteria we are planning to export jute
to France where state of the art infrastructure, business-friendly legal and regulatory environment
is present. It is true that we will be facing some challenges as the market is sophisticated, quality-
conscious, high-tech and competitive. We must enter the France market as early as possible to be
competitive throughout Europe. On the other hand, opportunities are present like relatively
advanced technologies, ideal test market for introduction of new high-tech and consumer
products, and no threat of existing jute product producers. There are some export requirements.All exported goods must be presented to the appropriate Customs office and declared for
clearance. Goods imported into France must be declared within the time limits. Import licenses
are required only for a limited number of products. These generally fall into the two categories of
measures to protect local agriculture production and measures of state control. Products subject
to a quota require import licenses, which are granted only to importers based in France. Import
licenses are also required for certain products not subject to quotas, but covered with public
health & plant health.
As target market, we have chosen the upper class, the upper-middle, and the middle class
people aging within 1 to 30 and above 50 living in the urban and suburban areas that use jute
handicrafts and prefer to use the eco friendly recyclable products.
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Company Profile:____________________________________
HeritageJute Products Ltd. (producer-cum-Exporter of JDPs Handicrafts)
Legal Status: Limited Company
Established in: 2003 (Started exporting since 2007)
Sector: Jute Diversified product, Raw Jute and Handicrafts
Sub-sector: Jute and leather based home textiles, jute yarns and jute goods
Contact: Mahfuzul haque, Chief executive
Heritage Jute Products Ltd
Flat 4B, house 1, road 23/A Gulshan-1, Dhaka-1212, Bangladesh.
Company Overview:_________________________________
Heritage Jute Products Ltd. is a public limited company. It came into being in the year 2003.
Initially, it conducted its operation within the country of its origin, Bangladesh. Later on in 2007,
it expanded its activity by involving in international business through exporting. Heritage Jute
Products Ltd. Companys only job is to deal with the golden fiber of Bangladesh that is jute. It is
a trading company, which deals with almost every possible variety of jute products. The
company offers raw jute as well as various customized jute products. Jute can be utilized in
producing several objects that are capable of using in different phases of life. There is virtually
no end of it. Jute can even be used in decorating the interior of a luxury car. Basically Heritage
Jute Products Ltd. plays the role of an intermediary to transfer the jute from the producers to the
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ultimate users of it. It makes our job even harder. At the same time, we need to satisfy both the
parties. Given that, our tone of negotiation is completely different for both the parties. As, we
need to make people understand in their own language. We give our best efforts in maintaining a
healthy relationship with our clients who remain in two different directions. Besides, we keep on
searching for innovators who are producing newer items from jute.
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Corporate Philosophy:________________________________
Respect for the Law
Heritage Jute Products Ltd. is determined to comply with the letter and spirit of the law, in
Bangladesh and overseas, and to be fair and transparent in all its dealings.
Respect for Others
Heritage Jute Products Ltd. is respectful of the people, culture, and tradition of each region and
country in which it operates. .
Respect for Customers
Heritage Jute Products Ltd. conducts intensive product research and forward-looking
development activities to create new value for its customers by making widespread use of jute.
Respect for the Country of Origin
One of the main objectives of the company is to uplift the image of Bangladesh. By supplying
superior quality jute products in several countries, we are looking forward to provide Bangladesh
a positive recognition all through the globe.
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Our Offerings:______________________________________
Heritage Jute Products Ltd. Company offers various Jute Products at unbeatable quality & price.
The traditional excellence of Company artisans are reflected in a wide range of jute handicrafts
of utility, decoration, and novelty. A beautiful mosaic of Jute handicrafts that comprises of
carpets & floor coverings, wall coverings & window dressings, table mats & table-wares, swings,
hammocks, office bags, table covers, table mats, pen and pencil stand, wall hangings & room
decor, bedspreads & bedroom slippers, blankets & shawls, skirts & jackets, shopping & travel
bags and a host of other home textile made-ups.
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The jute handicrafts of Bangladesh are a unique blend of aesthetic sense
and utility. Artisans have experimented with the fiber. Jute Yarn,
Cloths, Bags, Wallets, Purses, Mats, Rugs, Carpets, Decoration Pieces,
Gifts & Crafts, Sacks, Hessian Cloths, Burlap Bags, Ropes/Twine etc.
made of high quality Jute are offered by Heritage exclusively. Since
jute is very much environment or eco friendly, products made of jute
are becoming the most popular home appliance around the world for
everyday use.
History and Culture:_________________________________
History:
France is an independent nation in Western Europe and the center of a large overseas
administration. It is the third-largest European nation (after Russia and Ukraine).
In ancient times, France was part of the Celtic territory known as Gaul or Gallia. Its present name
is derived from the Latin Francia, meaning "country of the Franks," a Germanic people who
conquered the area during the 5th century, at the time of the fall of the Western Roman Empire.
It became a separate country in the 9th century.
Since the 17th century, France has played a major role in European and world events. In the 20th
century, it has experienced numerous crises, including the devastation of two world wars,
political and social upheavals, and the loss of a large empire in Indochina, Algeria, and West and
Equatorial Africa. It has, however, survived and emerged from the ruins of World War II to
become an important world supplier of agricultural and industrial products and a major partner in
the EUROPEAN COMMUNITY (EC, or Common Market).
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Today, the term metropolitan France refers to the mainland departments and CORSICA, a large
island located in the Mediterranean Sea off the coast of Italy that has been a part of France since
1768. France has six overseas departments: FRENCH GUIANA in South America;
GUADELOUPE and MARTINIQUE in the West Indies; MAYOTTE, an island formerly part of
the Comoros, located in the Indian Ocean; REUNION, an island in the Indian Ocean; and SAINT
PIERRE AND MIQUELON, islands off the east coast of Canada. In addition, France has
numerous small possessions called overseas territories. These include a group of widely scattered
islands in the South Pacific, which are administered from Tahiti and are known collectively as
FRENCH POLYNESIA; FRENCH SOUTHERN AND ANTARCTIC TERRITORIES; NEW
CALEDONIA and WALLIS AND FUTUNA ISLANDS; and many small islands in the southern
oceans, including the Kerguelen and Crozet archipelagos and the islands of St. Paul and
Amsterdam (Indian Ocean). The overseas departments and territories are represented in the
French National Assembly.
Facts and Statistics:__________________________________
Location
Western Europe, bordering Andorra 56.6 km, Belgium 620 km, Germany 451 km,
Italy 488 km, Luxembourg 73 km, Monaco 4.4 km, Spain 623 km, Switzerland 573 km
Capital
Paris
Climate
Generally cool winters and mild summers, but mild winters and hot summers along
the Mediterranean; occasional strong, cold, dry, north-to-northwesterly wind known as mistral
Population
60,424,213 (July 2004 EST.)
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Ethnic Make-up
Celtic and Latin with Teutonic, Slavic, North African, Indochinese, Basque minorities
Religions
Roman Catholic 83%-88%, Protestant 2%, Jewish 1%, Muslim 5%-10%, unaffiliated
4%
Government
Republic
GDP (PPP)
$2.086 trillion
Per capita
$33,334
Culture of France
Paris is a city for art of every form, and has hundreds of art boutiques, art and antique dealers, art
galleries, special art exhibits, the symphony, the ballet, cinema and the theatre. Therefore, French
people posses a very artistic mind. They love to decorate their house with colorful cloths and
carpets. By using jute, we can make such attractive and beautiful product, which has a big
demand in France.
Business Culture
To export jute product in France we need to know their business cultures. If we can understand
their business culture then it will help us to build a satisfactory long-term relationship.
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French Society & Culture
Cuisine
Food is one of the great passions of the French people.
French cooking is highly refined and involves careful preparation, attention to detail, and
the use of fresh ingredients.
It varies by region and is heavily influenced by what is grown locally.
French Family Values
The family is the social adhesive of the country and each member has certain duties and
responsibilities.
The extended family provides both emotional and financial support.
Despite their reputation as romantics, the French have a practical approach towards
marriage.
Families have few children, but parents take their role as guardians and providers very
seriously.
Relationships - Public vs. Private
The French are private people and have different rules of behavior for people within their
social circle and those who are not.
Although the French are generally polite in all dealings, it is only with their close friends
and family that they are free to be themselves.
Friendship brings with it a set of roles and responsibilities, including being available
should you be needed. Friendship involves frequent, if not daily, contact.
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Business Meetings Etiquette
Appointments are necessary and should be made at least 2 weeks in advance.
Appointments may be made in writing or by telephone and, depending upon the level of
the person you are meeting, are often handled by the secretary.
Schedule meetings during July or August should not be made, as this is a common
vacation period.
If you expect to be delayed, telephone immediately and offer an explanation.
Meetings are to discuss issues, not to make decisions.
Avoid exaggerated claims, as the French do not appreciate hyperbole.
Business Negotiation
French business emphasizes courtesy and a fair degree of formality.
Wait to be told where to sit.
Maintain direct eye contact while speaking.
Business is conducted slowly. You will have to be patient and not appear ruffled by the
strict adherence to protocol.
Avoid confrontational behavior or high-pressure tactics. It can be counterproductive.
The French will carefully analyze every detail of a proposal, regardless of how minute.
Business is hierarchical. Decisions are generally made at the top of the company.
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The French are often impressed with good debating skills that demonstrate an intellectual
grasp of the situation and all the ramifications.
Never attempt to be overly friendly. The French generally compartmentalize theirbusiness and personal lives.
Discussions may be heated and intense.
High-pressure sales tactics should be avoided. The French are more receptive to a low-
key, logical presentation that explains the advantages of a proposal in full.
When an agreement is reached, the French may insist it be formalized in an extremely
comprehensive, precisely worded contract
Product Market:_____________________________________
The Product Outline
The basic feature of that product will be that it will come only from natural fibers. There will be
no artificial and chemical plastic or synthetic raw materials. The raw materials of the products
will be the fresh natural fibers and they will be collected mainly from various places (Dinajpur,
Rajshahi, Barisal, Shylet etc) of the country. The company already has contract with some mills
for preserving fibers and there will be quality assurance teams to look after them. Raw Jute will
be preserved naturally and will be free from the chemical. As we are mainly concentrating on
the natural aspects, the mission statement of our product is Use natural products to save
the nature.
Product Life Cycle
Despite of being a vintage business, the Jute Industry is yet to mature in our country. Our
company is in its growing stage and to explore the market we are now planning to go to France.
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Jute products have a good market, domestic as well as in foreign countries like USA, UK,
Germany, Australia, and the Middle East. The products in demand include jute shopping bags,
blankets, apparels, handicrafts, wall hangings, and floor coverings. While new markets are under
exploration through consumer awareness and product promotion programs, it will not be
surprising to find this natural fiber become a material for regular use by consumers all over the
world.
Although Heritage Jute Products Ltd. has been exporting jute products to many European
countries, it has never export any products to France. Recently it has taken steps to export jute
made products in that country. For this, it has set up an ongoing campaign to create attention of
its product.
Market Feasibility in France
In France, there are many types of products in terms of Cloths, Bags, Wallets, Purses, Mats,
Rugs, Carpets, Decoration Pieces, Gifts & Crafts, Sacks, Hessian Cloths, and Burlap Bags in
todays market. However, all these companies do not come from natural aspects. Therefore, we
have sought out this market as a niche market and have chosen to launch a fresh product, which
will not only be eco friendly but also be less costly.
Customers, being more health conscious; now want to take something comes directly from
nature. Consequently, many French are shifting their taste over the trend. All these have
influenced us enough to make a step in this ground.
The Heritage Jute Company along with its client French companies surveyed different people
from the different areas, age groups and came to know that now they want something new and
refreshing. Keeping this in view, we have chosen something innovative by adding some new and
refreshing jute products in the market.
Customers, mainly children and old person face skin cancer problem for using low quality
artificial and plastic products. On the other hand, patients suffering from various diseases also
seek for the natural fiber made products for their health. So far, we can say that our product will
be the first priority, as it is made from the fresh natural fibers and the products will have no side
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effects, as we are not using any artificial color or objects. Therefore, the market growth for this
particular product is reasonable.
The Market:________________________________________
Market Segmentation
Segmentation is the first step for building a strong brand or launching a new product.
Accordingly, we have to choose target consumers based on this segmentation. Therefore,
segmentation has to be done carefully. To do that prior job we have chopped up the whole
consumer market based on
Demographic: Different age & income level,
Geographic: Location or area,
Psychographic: Different social class,
Behavioral: Occasion & user rate
Target market
Target market is the most difficult part of the whole process. Because in that particular stage we
have to decide for whom we will produce the product and who will be the buyer or consumers.
After analyzing all the parts we have decided to go for the following target market:
The upper class, the upper-middle and the middle class people aging between 1 to 30 and above
50 living in the urban and suburban areas who use, Cloths, Bags, Wallets, Purses, Mats, Rugs,
Carpets, Decoration Pieces, Gifts & Crafts, Sacks, Hessian Cloths, Burlap Bags, Ropes/Twine
etc at a considerable rate and prefer to use the eco friendly recyclable products are our target
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customer. However, in case of suburban we will only concern about the upper class of that
society.
Capability of satisfying the market
For achieving the goal and objective as mentioned above following outlines have been
undertaken:
Retain/increase market of the traditional jute products
Develop new application of traditional products
Development of new products using the advantages of natural fibers
Improve fiber quality
Improve productivity and product quality
Make use of sustainable development agenda
Increase consumer awareness by highlighting the environment friendliness of
jute
Address the trade issues
Address supply and management issue
Create R&D net work
Create employment opportunities and develop human resources
Restructuring of jute industry to make it commercially profitable and viable.
Research towards development of diversified products of jute goods and introduction and
expansion of their uses in the foreign market.
Adequate production and supply of some diversified jute items to meet wide demand.
Production of food grade jute bags as per compliance of the foreign buyer to meet
international demand.
Maintain liaison and cooperation with local and foreign Research Laboratories,
universities and other bodies in respect of research work on jute & jute products.
The first and foremost strength of the Bangladesh Jute Industry is that it is based on the
raw material that is available at the doorstep. Moreover, the quality of the raw material is
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the best available in the world. Bangladesh is the natural abode of jute cultivation on
account of its climatic situation and soil condition.
New technologies for production of diversified jute products are now available.
The company is in jute business for almost a decade. There are adequate arrangements for
facilitation of jute trade inside and outside the country. An elaborate system exists for
procurement and disposal of raw jute. Jute goods produced by the company mills are
really of good quality.
Marketing Mix
Branding Strategy
As Brand is the major enduring asset of a company; we concentrate hard to build our product
brand.
Firstly, we have to position our brand by associating its name with desirable benefits it offers.
We will tell our customers that how our products (with natural ingredients) can be beneficial to
their health. When positioning the brand, we will keep a deep look towards our brand contract.
We will ensure our customers about healthier and natural ingredients.
Besides, our company will primarily apply the More for the Less value proposition strategy
for the competitive advantage over the competitors.
The positioning statement for our brand will be: To people, who are envirorment conscious and
want to use the best quality product Eshana jute products are the one to fulfill your desire.
We will export the product as our own brand. To be successful as a manufacturers brand our
company will invest in R&D to bring out new features and continuous quality improvements. For
these, we have to design strong advertising programs to maintain high awareness and preference.
Moreover, our company will also look towards brand development either by line extensions or
by brand extensions. As our current products become tend to the growth stage, we will offer
more products with new forms, colors, and size.
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A brand becomes successful and maintained through brand experience. For this purpose our
company takes several steps. We will ensure that everyone in the company lives within the
brand. We will train our employees to be more customers oriented. Moreover, we will appoint
brand equity manager to maintain and protect our brand images and quality. Last but not the
least; we will plan to audit our brand strengths and weaknesses in a periodical basis regarding the
following aspects:
Does our brand excel at delivering benefits that consumers truly value?
Is the brand properly positioned?
Do all of our customers touch points supports the brand positioning?
Export Distribution
Producing a product and making it available to buyers requires building relationships with key
suppliers and resellers in the companys supply chain. We will distribute our product through
Indirect Marketing Channel, as the channel members contacts, experience, specialization and
scale of operation will help our company to achieve more. We will sell the products not only
through the intermediaries but also to and with them. We will use our intermediaries for some
key functions such as information (Gathering marketing research), promotion (spreading
persuasive communication about an offer).
Before designing the marketing channel our company will find out what target consumers want
form the channel.
Primarily, by balancing consumer needs against the feasibility, cost and more importantly
customer preferences, we will design a corporate vertical marketing system. Our company will
integrate successive stages of production and distribution under its ownership. Controlling the
entire distribution chain will help to distribute our product more swiftly by saving time,
eliminating the need for warehouses and keeping inventories low. Normally it takes 30-60 days
Manufacturer Wholesaler Retailer
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depending on the order. Afterwards, if the market tends to be large and complex, then we will
focus on Multi channel distribution system.
At the beginning, we will export with the selected companies in the abroad. The dealers will
distribute the products under each division and will constantly report to the main corresponding.
Competitive Analysis:________________________________
Our main competitor in the French market is Hindustan Jute Mills. HJM has about 70% market share in
the French market. There are also other two Indian companies products in the market. These Indian jute-
exporting manufacturers are our competitors from the same industry. We also consider Chinese and
Vietnams as our major competitors in the target market. Now we will discuss our both type of competitors
activities, market shares, financial and marketing strengths separately.
Competitors from the same industry
Hindustan Jute is a reputed jute exporting profiles manufacturer. They have their major business in the
central France. Their production plant is located at the West France. HJM has a huge market share in the
whole Northeast French market. In French, it has about 70% market share. There are other two jute-
exporting suppliers in the market. Those are from central India. However, these companies have
significantly less market share. Here HJM has the market share because they are competitive in pricing.
They offer fewer prices than other two companies do as HJMs transportation cost is less than those other
two companies are. Moreover, all these companies have a strong financial strength as they are operating
in the huge French market. Moreover, their marketing channels are also very strong. That is why they are
still in the French market with high transportation cost. They actually introduce jute-exporting products in
the French market. Again, they have strength. France is a cosmopolitan country and there are many
Indians there. Indian people are much more nationalistic. They always prefer their own country products
rather than using foreign materials. This can be a major threat for us in entering the French market.
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Competition from substitutes:
In the French market our substitute products suppliers will be the major competitors for us. We
know French is a developed nation and People in French are very up to date and fashionable.
Here people are more interested towards art and culture. Jute products can be a major origin of
expressing style in interior designing of houses and cars as Eco-concerns drive demand for
biodegradable products. Actually we have to take such promotional efforts to make sure that our
product is more environments friendly and better than others as we use the best quality raw jute
fabric.
SWOT Analysis:____________________________________
Strengths
The strength of the industry lies in the concentration of mills predominantly in one
geographical region Bangladesh, which is climatically ideal for the cultivation of jute.
Though our main competitor India is the largest producer of raw jute in the world,
Bangladesh produces the best quality fiber. Therefore, our jute products have the quality,
which will become very successful in Frances sophisticated, quality-conscious, high
tech, and competitive market.
Another major strength of the industry lies in its adaptation and surviving capabilities.
Bangladeshi jute has a history of over hundred fifty years. In this long period, it has faced
various odds and overcome many hurdles. The jute culture in Bangladesh is deep rooted
and most importantly, there is no dearth of cheap labor. It will make our variable cost
lower and thus give an advantage in French market.
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Bangladeshi jute, like Brazilian coffee has a global image in developed countries like
France.
Weakness
Like other Local bag makers, we have to buy jute fabric from the domestic market at
higher prices than what foreign importers pay for the same fabric from Bangladesh. As
bag makers in Bangladesh do not get export incentive - a setback that makes the local
industry less competitive than its rival in India, the main importer of jute fabric and our
main competitor in France.
The major weakness is in the production process. Lack of advanced technology/machines
and Lack of skilled labor and skilled designers in the jute sector leads to production of
inferior quality products resulting in loss of competitiveness in the French market.
Inadequate R & D facilities at both public and private levels in the Jute sector leads to
absence of continuous product innovation resulting in loss of growth opportunities
whiling other major competitors like India and China are far ahead from us in this issue.
Lack of awareness as a result low demand of Jute diversified products in the domestic
market is been a major obstacle in internationalization.
Bangladesh Jute Research Institute (BJRI) lacks close coordination with the Ministry of
Textiles & Jute as well as Jute Industries as it is under the Ministry of Agriculture. This
lack of coordination creates a problem in maintaining the supply chain of certified jute
seeds on which the quality of Jute fiber vis-a-vis the production of quality Jute goods
depends.
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To market our product we have to depend on our Area Distributor. So we face
difficulty in changing any strategy like pricing. Our sale is also dependent on theirmarketing effectiveness.
One of the major weaknesses of our company is financial problem. For this problem
sometimes we cannot implement all necessary toward product development also
management development.
Opportunity
Jute is the only globally recognized and accepted green packaging product from
Bangladesh. Use of bio degradable products like jute is encouraged not only in
packaging but also in many other industrial inputs as
(a) Backing cloth in carpet industry,
(b) Geo jute/jute reinforced composites in civil and road construction,
(c) Alternative to wood products in many domestic and industrial uses
(d) Automotive industry raw material for paper industry,
(e) Production of various interior decorative products including flooring.
Researchers suggest that use of renewable non-wood based materials like jute and sisal can
reduce the use of traditional materials like wood, minerals and plastics. (Leao, 1998)
Like Many countries, France has taken various initiatives to popularize biodegradable green
products. This has definitely increased the prospect of launching jute products.
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A global initiative for banning environment-unfriendly shopping bags and declaring the
year 2009 as the International Year of Natural Fibers by United Nations has fuelled
demand for jute bags. According to media reports, France and Germany will ban the use
of non-biodegradable polythene bags next year. Also, the US is looking for a viable
alternative to polythene bags. This move is likely to increase the use of jute, products.
Moreover, research on the development of jute pulp has opened up huge potential for
this natural fiber. The International Jute Study Group (IJSG), which was earlier known
as the International Jute Organization (IJO), has been successful in developing jute pulp
in different laboratories all over the world. Among these two are from Bangladesh,
namely Bangladesh Jute Research Institute (BJRI) and Bangladesh Chemical
Industries Corporation (BCIC). These two institutions can work in coordination with
Centre Technique du Papier (CTP) of France for successful commercialization of the
proposed jute pulp technology would open up new vistas both for the jute and paper
industry.
Threats
1. In the post MFA quota free era, different types of non tariff barriers (NTBs) with far
reaching impact on the work place will hamper jute exports mainly to developed
countries like France. The most likely NTBs will be in the areas of
(a) Environment protection, (b) Social commitment
Like Many EU countries, France has developed different standards of their own for the
protection of the environment. Increased public awareness of environmental impact of products
has prompted the rise of a new body of labeling called Eco-labeling or environmental labeling.
The objective of the program is to provide necessary information for environmentally conscious
consumers on products that have less environmental impact. The worlds first Eco-labeling
scheme was introduced in France in 1988.
This program encourages manufacturing industries to be actively involved in environmental
protection and pollution control by designing and developing environmentally friendly products.
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However, during trade negotiations Eco-labels may be used as a non-tariff barrier also.
UNCTAD studies showed that Eco-label had created difficulties for some sectors of products, in
particular paper and pulp, bags and accessories from developing countries.
2. France Market is sophisticated, quality-conscious, high tech and competitive which will
create a challenge for Our jute products.
3. Social and labor standards are increasingly being linked to the trade issues. The most
commonly used criteria to judge ethical, social and labor practices are:
(I) Fair Trade Labeling
(ii) Social Accountability Standard (SA-8000).
The concept of fair trade was introduced to address the issue of social responsibility in the
production and marketing of products. Like other countries, France has emphasized in these
issues, which are going to be a major challenge for our products.
International Logistics:_______________________________
Flow of goods to the final destination
The goal of the marketing logistics of our company is to provide the targeted level of customer
service at the least cost. We will use distribution centers rather than warehouses in each city.
These centers will be designed to take orders, fill them efficiently, and deliver goods to the
exporting companies as quickly as possible. In shipping the product to the distribution centers.
we have Chosen shipping as our primary mode of transportation and for intermodal
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transportation, we will use rail and truck. It will be less costly and will provide flexibility and
convenience.
Besides, we will use a simple, accessible process for sharing channel information. Telephone,Internet, & sales people will link all our distribution centers up to share sales information. This
will certainly help us to maintain the delicate balance of the inventory management.
The Barriers to Face
Import Tariff
The French customs tariff uses the Harmonized System (HS) for the classification of goods.
Customs duties are levied per 100 kilogram
Duty rate
The standard duty rate is 7.6 percent, although there is a reduced rate of 2.4 percent for certain
goods and services like agricultural products and necessary consumer goods
Trade Barriers
Due to significant tariff and quota barriers for many agricultural products, combined with
a restrictive approval process for biotech products
Switzerland has a strict regulatory regime for agricultural biotechnology products.
Over the past few years, Switzerland has taken steps to remove barriers to competition in
its automotive, electricity, telecommunications, and postal sectors.
Economical barriers
Although overall economic condition of France is at a better situation for international trade, but
the economic condition of France has slowed down recently for unusual global recession. For
http://www.buyusa.gov/switzerland/en/trade_regulations_standards.htmlhttp://www.buyusa.gov/switzerland/en/trade_regulations_standards.htmlhttp://www.buyusa.gov/switzerland/en/trade_regulations_standards.html -
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example, recession results in financial loss and decrease the purchasing power of the target
consumers. They may be reluctant to buy this type of goods.
Cultural threat
Culturally, French people are homesick. If the consumers maintain the attitude of using own
countrys product as a personal belief of patriotism, then it will be a big threat for the company.
Bargaining power of supplier
Bargaining power of supplier may be high because of only one exclusive area distributor. More
dependency on the distributor may lead to loss of some control over the marketing of our
product. It may become more difficult for us to have a final say in pricing and promotion.
How these threats can be opportunities?
o Strong political lobbying power
o Marketing research and forecasting of economical situation
o Special incentives or other arrangements on the unusual situation
o To show respect and create value to the culture of the target consumers
o Precision of agreements with the distributors on the basis of mutual business lows of two
countries
The cost effective way
o To setup its own sales depot in Parris as a way of direct marketing.
o To engage and employ some employees from France for better adaptation with the
cultural environment.
o To follow mass marketing at the matured stage.
o To export cheap labor in Tripura for any additional task of product differentiation.
Payment Method
We accept 100% T.T. (Telegraphic Transfer) or Wire Transfer/Bank Transfer through SWIFT to
our bank account as payment method.
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We also accept any kind of L/C (Letter of Credit) or D/C (Documentary Credit). We accept small
payments for samples through Western Union too.
Financial Plan:_____________________________________
Initial Investment:
Initial Investment
Category Cost
Savar office BDT400,000
Lease money
for land
BDT110,000
Production
contract
BDT48,000
Transportation BDT2,500,000
Gulshan
Showroom
BDT200,000
Dhanmondi
showroom
BDT150,000
Advance for
showrooms
BDT2,000,000
Machines BDT200,000
Website BDT30,000
Plant seeds
and seedlings
BDT50,000
Accessories BDT10,000
Total BDT5,698,000
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Financial Statements:
Income statement:
We have given a very short table of Income Statement because details of calculation are attached
in the appendices. Firstly, we have calculated the monthly income and the total cost of sales and
then simply calculated the EBIT. After that we have deduct the interest payment of the quarters
and calculated EBT. Finally, we have added all the four quarters revenues and less the total tax
amount for the first year. Finally we have come up with the total first years net profit after tax.
Year 1
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Total Revenue 1125000 1271250 1436512.5 1623259.12
5
Total Cost Of Sales 947001 947001 947001 947001
EBIT or Operating
Profit
177999 324249 489511.5 676258.125
Interest Payment per
Month
99714 99714 99714 99714
Earnings Before Tax 78285 224535 389797.5 576544.125
Total Net Profit For
Year 1
1269161.62
5
Tax 507664.65
Net profit after Tax 761496.975
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In the second year, we have a very significant amount of profit as we have added a new
showroom in the Dhanmondi, another residential area. As the sales growth rate is predetermined,so we have easily calculated the profit for that year. And the growth rate is divided in all four
quarters. This trend is also followed in third year. This year is more significant to us because in
this year, we have broken our business even.
Year 2
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Total Revenue 3240000 3661200 4137156 4674986.28
Total Cost Of Sales 1864500.01
5
1864500.015 1864500.01
5
1864500.015
EBIT or Operating Profit 1375499.98
5
1796699.985 2272655.98
5
2810486.265
Interest Payment per
Month
149,571 149,571 149,571 149,571
Earnings Before Tax 1,225,929 1647128.985 2123084.98
5
2660915.265
Net Profit before Tax 1,225,929 1647128.985 2123084.98
5
2660915.265
Total Net Profit For Year
1
7657058.22
Tax 3062823.28
8
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Net profit after Tax 4594234.93
2
In the third year, we have calculated that the net total value of profit is much higher than the
second year.
Year 3
Quarter 1 Quarter 2 Quarter 3 Quarter 4
Total Revenue 3,523,500 3981555 4499157.15 5084047.58
Total Cost Of Sales 2212503 1864500.015 1864500.01
5
1864500.01
5
EBIT or Operating
Profit
1,310,997 2117054.985 2634657.13
5
3219547.56
5
Interest Payment per
Month
224,357 224,357 224,357 224,357
Earnings Before Tax 1,086,641 1967483.985 2485086.13
5
3069976.56
5
Net Profit before Tax 1,086,641 2491693.485 3865858.48
5
5652272.98
5
Total Net Profit For
Year 1
8609187.18
5
Tax 3443674.87
4
Net profit after Tax 5165512.31
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1
Sensitivity Analysis:
As the scenario is good for us for initiate a business with profit from the first year as well as
break even in the second year, things may not be that much favorable for us because of recession,
legal and political structure and also for so many reasons. Things may turn opposite for the
business and we may incur loss in any time. Factors like revenue and costs still plays an
important role in the business, so we can cover it up, if recession or other factors may cause the
business to shut down, by selling the fixed assets or turn it to other kind of business. We may
sell less just to incur less tax amount. Logistics costs may also be a factor to deal with cautiously.If the business goes well, then we will add more business showrooms and spread the business to
other metropolitan area and also make the system of membership card where the card holder get
some kind of discounts and priority among others.
Balance sheet:
Pro-forma Balance Sheet
ASSET
Year 1 Year 2 Year 3
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Current Asset
Cash 5,698,000 2,782,965 8364042
Accounts Receivable 2784150 8018352 8719957
Total Current Asset 8,482,150 10,801,317 17083999
Property, Plant & Equipment
Vehicle & Transportation 2,500,000 2,500,000 2,500,000
Machines & Equipment 200,000 200,000 200,000
Less: Accumulated Depreciation - Total PP&E 540000 540000 540000
Lease money, Banani showroom Advance
Payment
1200000 800000 0
Total Property, Plant & Equipment 4,440,000 4,040,000 3,240,000
Total Asset 12,922,150 14,841,317 20,323,999
Liabilities & Owners' Equity
Liabilities
Long-term Liabilities
Loan per year 664766 664766 664766
Short-term Liabilities
Interest Payable per year 398856 598284 897428
Unearned Revenue 1194453 2680810 7200226
Total Liabilities 2258075 3943860 8762420
Owners' Equity
Earnings 6960375 7193757 7857879
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Retained Earnings 0 0 0
Capital 3703700 3703700 3703700
Total Owners' Equity 10664075 10897457 11561579
Total Liabilities & Owners' Equity 12,922,150 14,841,317 20,323,999
The total cash for the first year is the initial investment of the business and the account receivable
is the 40% of the total revenue which will be collected from the customers at certain point of
time. The total fixed asset is just the sum up of the total fixed asset and it remains same for the
year two and three.
35% of the total initial investment is the loan amount and per year amount is calculated based on
the assumption that we have to repay the whole loan amount within three years.
Accumulated depreciation is on the machines and the life time is assumed to be 5 years. We have
followed the straight line depreciation method to calculate the per year depreciation amount.
Unearned revenue will be based on the orders and the amount of money we will be taking per
order. There will be a certain amount which should be given in advance by the customers and the
rest of the amount will be taken from them when the order is fulfilled by us.
We have calculated the second and the third years cash balance by following the cash flow of
those years.
Cash flow statement:
In the first year, we have a positive cash flow from the beginning and here we have calculated
the cash flows by following the traditional format. Firstly, we have added operating income
(EBIT), and then deduct cash tax payment and finally we derive the NOPAT. As there were no
investment on net working capital and capital investment, so just adding the depreciation, which
is non cash expense, we got the positive free cash flows the consecutive quarters of first year.
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Year 1
Title Quarter
1
Quarter
2
Quarter 3 Quarter 4
Revenues 1125000 1271250 1436512.5 1623259.12
5
Operating Income
(EBIT)
177999 324249 489511.5 676258.125
Less: Cash tax payment 126916 126916 126916 126916
NOPAT 51083 197333 362595.5 549342
Plus: Depreciation
Expense
180000 180000 180000 180000
Less: Investment
In net Working Capital 0 0 0 0
In new Capital
(CAPEX)
0 0 0 0
Total net investment for
the period
0 0 0 0
Free Cash Flow 231083 377333 542595.5 729342
In the second year, we have added a new showroom in Dhanmondi and capital
expenditures occurs then.
Year 2
Title Quarter 1 Quarter 2 Quarter 3 Quarter 4
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Revenues 3240000 3661200 4137156 4674986.28
Operating Income (EBIT) 1375500 1796699.98
5
2272655.985 2810486.26
5
Less: Cash tax payment 765706 765706 765706 765706
NOPAT 609794 1030983.98
5
1506949.985 2044780
Plus: Depreciation
Expense
180000 180000 180000 180000
Less: Investment
In net Working Capital 0 0 0 0
In new Capital (CAPEX) 37000 37000 37000 37000
Total net investment for
the period
37000 37000 37000 37000
Free Cash Flow 752794 1173993.98
5
1649949.985 2187780
As the forecasted revenue is estimated to have a positive growth of approximately three percent
per quarter, so we still have the positive cash flow in the second year also. Investment on net
working capital is also not present here because we are serving our customers as per the orders.
In the third year, again we have not extended our business further because we wanted to see the
progress whether the existing process stands better or not. We see that, as growth is better and
has the positive cash flow to the business, we have discussed the risks involved in the sensitivity
analysis.
Year 3
Title Quarter 1 Quarter 2 Quarter 3 Quarter 4
Revenues 3,523,500 3981555 4499157.15 5084047.5
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8
Operating Income (EBIT) 1,310,997 2117054.9
8
2634657.13
5
3219547.5
6
Less: Cash tax payment 860919 860919 860919 860919
NOPAT 450078 1256136 1773738 2358628.5
Plus: Depreciation
Expense
180000 180000 180000 180000
Less: Investment
In net Working Capital 0 0 0 0
In new Capital (CAPEX) 0 0 0 0
Total net investment for
the period
0 0 0 0
Free Cash Flow 630078 1436136 1953738 2538628.5
Sensitivity Analysis:
The factor, which is so important, is the EBIT or the operating income. When it is high, we see a
higher cash flow to the business. To increase or to ensure the gradual growth of the operating
income, we have to give a closer look into the total revenue and the costs associated with the
sales. If we can ensure that revenue growth is stable in relation with costs, then we can expect a
positive cash flow even from the first year.
Pay Back Period:
We have calculated the payback period as 1.33 years
Break-Even Analysis:
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We have considered first three years time span for break - even analysis. The formula we have
used for this analysis is:
Break Even in sales =Fixed Cost / Contribution Margin Ratio
Fixed cost= BDT 3,240,000
Contribution Margin ratio= Total contribution (Sales Variable cost)/ Sales
= 19,205,616.565/38,257,623.635
= 0.502
Break Even in sales = BDT 6,454,183.267.
So, we will start making profit, after we have reached our sales amount of BDT 6,454,183.267.
Conclusion:_______________________________________
From the above analysis we can say that it may fulfill the goal of international marketing to make
exchange, provide satisfaction to the customers and earning more profit from the internationalmarket by the available opportunities in the market through geographical proximity, bilateral
trade relationship between two countries, lower transportation cost, absence of effective
competitors and lower pricing. But we will may face some problems like nationalistic view of
French people, unsolved borders issues, and French government non-tariff barriers, etc. but we
think it is wise for Heritage JDP to enter into French market, though there is some problems. But
Heritage JDP may become successful through proper planning and promotional activities and
this success may lead us to flourish our business in the Europe.
Recommendations:__________________________________
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In the recommendation part, we can first focus on probable effective promotional activities of
Heritage JDP
Promotional Strategies:
Heritage JDP should use promotions effectively through establishing goals, selecting appropriate
strategies, and setting a budget.
Some tips related to its objectives are:
To gain and encourage new customers
Maintaining brand image through maintaining quality of products at comparatively
lower price
Through using some combinations of push (Sales promotional effort) and pull (demand
creation) strategy
Promotions that cross the lines:
The Core-Competitive advantage
It should create competitive advantage through efficiency and superior quality of its products. It
may gain efficiency by reducing unit cost with a large scale of production, gaining experience in
the international marketing place and by adaptation with the latest technology, R & D strategy,
and well-developed infrastructure of operation.
Product Proliferation
It may introduce its product lines gradually in its niche market.
Pricing
It can follow the expected pricing strategy that involves the use of a single well-known price for
a long period.
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Strategic Alliances
In case of Strategic Alliances Heritage JDP should follow credible long-term as well as short-
term commitments, it will maintain synergy and co-ordination with the distribution channels.
It can develop co-marketing programs and co-branding programs with their retailers.
It should maintain the consistent network of dealers.
It may allow sales incentives occasionally to big purchasers.
Before introducing their own sales point, it may focus on the width of distribution channels
instead of length of distribution channels.
Sponsorship and Event Marketing:
It may promote the sales promotion in the France by sports sponsorships, festivals, fairs and
event marketing.
Specialty Advertising:
It may spend in advertising specialties by making calendar focused on the local culture of France
just as a gift.
Interactive and Internet Promotions:
It may introduce its products by Internet promotions so those interested groups can get
knowledge about their products e-mail for any inquiry and exercise e-commerce in the long run.
It can also start telemarketing in the states of Northeast India.
Loyalty Programs/Continuity Programs:
It can follow the 4 mandates of loyalty programs:
Identify the best customers
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Connect with those best customers
Retain the best customers usually by rewarding them for their patronage
Cultivate new best customers.
Public Relations:
To build public awareness, it can communicate with local newspaper for their ad to maintain the
flow of information. In addition, it can use the local language in the package of its products
profiles for better understanding of local people.
Other Issues:
Growth Strategy:
As a growth Strategy, it can focus on the geographical expansion that can broaden from French
to other parts of France. It will focus on the following techniques:
Economies of Scale by standardization and increasing sales volumes
TQM
Just In Time Strategy
Budgeting:
It should take precaution in its budgetary policy so that it can be cost effective. At the initial
stage, it may budget up to 10 lacks Bangladeshi Tk. Including all promotional costs.
R & D:
It will spend the effective amount in its R & D program for much proper understanding of the
business environment in a better profitable way.
Survival in the Competition:
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It will always watch the competitors in the market and to stay in better position by
maintaining quality with cheaper price to gain the market share.
Avoidance of Conflicts:
It should be careful in avoiding conflicts with its stakeholders in the international market by
mutual understanding of the interest of each group.
Training:
In future when it will introduce its own sale center in the niche market, then it must train its salesrepresentatives properly so that they can understand the culture of the region and be close with
the local people for promoting their products.
Societal Responsibility:
It must focus on maintaining the social value of customers by reflecting their dreams in
designing its profiles. In this regard, it can use the creative dialogue of fulfilling the dreams of
people in the society.
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References:________________________________________
1. Czinkota, Michel R. International Marketing. Ilkka, A. Ronkainen. Ohio: Thomson, 2004.
2. Bangladesh, Export Promotion Bureau. Export Policy of Bangladesh. Dhaka. 1997.
3. Armstrong, Kotler. Principles of Marketing. 6th Edition. New Jersey: Pearson. 2002.
4. Khan Kawsar, G. (1999, July 13). Jute bag exports rise as shopping goes eco-
Correct, Retrieved December 20, 2004 fromhttp://www.thedailystar.net/newDesign/news-
details.php?nid=94737
http://www.thedailystar.net/newDesign/news-details.php?nid=94737http://www.thedailystar.net/newDesign/news-details.php?nid=94737http://www.thedailystar.net/newDesign/news-details.php?nid=94737http://www.thedailystar.net/newDesign/news-details.php?nid=94737