Bata is one of the world leading footwear retailer and manufacturer with operations across 5 continents managed by 4 regional meaningful business units (MBUs). The MBU approach provides quality resources and support in key areas to the companies operating in similar markets such as product development, sourcing or marketing support. Each MBU is entrepreneurial in nature, and can quickly adapt to changes in the market place and seize potential growth opportunities.
INTRODUCTION : Bata Shoe Company is one of the largest companies not only in Bangladesh but also in many other countries. Bata Shoes is a large, family owned shoe company based in Bermuda but currently headquartered in Lausanne, Switzerland, and operates 4 business units worldwide – Bata Europe, Bata Emerging Markets, Bata Branded Business and Bata North America. It has a retail presence in over 50 countries and production facilities in 26 countries. In its history the company has sold more than 14 billion pairs of shoes. In 1985 Bata Shoe listed in Dhaka Stock Exchange. At this moment, its shares are traded in our two stock exchanges (DSE& CSE). Objective of the study: Objectives of the study are given below – To know about Bata’s products. To get idea about their current business condition. To analyze it’s market position with its’ competitors. To take an over view of their market strategies. Methodology of the study: This is a descriptive analysis. Most of the data is secondary data. I have collected the data from different websites and by taking viva of some Bata officials. Limitations of the study: To prepare this term paper we faced a lot of problems which include time & cost. Moreover, we faced a lot of difficulties to find out the actual data from websites. The officials also were not cooperative to give data about their company for their company’s regulation. An over view of the company: The business that became the Bata Shoe Organization was established on August 24, 1894 in Zlin, Czechoslovakia by Tomas Bata, and included his brother Antonin and sister Anna. Although this business was new, the Bata name had been part of a tradition of shoemaking for eight generations, spanning three hundred years. It was one of the first modern-day shoe ‘manufacturers’, a team of stitchers and shoemakers creating footwear not just for the local town, but also for distant retail merchants. This departure from the centuries-old tradition of
Transcript
INTRODUCTION :
Bata Shoe Company is one of the largest companies not only in Bangladesh but also in many
other countries. Bata Shoes is a large, family owned shoe company based in Bermuda but
currently headquartered in Lausanne, Switzerland, and operates 4 business units worldwide –
Bata Europe, Bata Emerging Markets, Bata Branded Business and Bata North America. It has a
retail presence in over 50 countries and production facilities in 26 countries. In its history the
company has sold more than 14 billion pairs of shoes. In 1985 Bata Shoe listed in Dhaka Stock
Exchange. At this moment, its shares are traded in our two stock exchanges (DSE& CSE).
Objective of the study:
Objectives of the study are given below –
To know about Bata’s products.
To get idea about their current business condition.
To analyze it’s market position with its’ competitors.
To take an over view of their market strategies.
Methodology of the study:
This is a descriptive analysis. Most of the data is secondary data. I have collected the data from
different websites and by taking viva of some Bata officials.
Limitations of the study:
To prepare this term paper we faced a lot of problems which include time & cost. Moreover, we
faced a lot of difficulties to find out the actual data from websites. The officials also were not
cooperative to give data about their company for their company’s regulation.
An over view of the company:
The business that became the Bata Shoe Organization was established on August 24, 1894 in
Zlin, Czechoslovakia by Tomas Bata, and included his brother Antonin and sister Anna. Although
this business was new, the Bata name had been part of a tradition of shoemaking for eight
generations, spanning three hundred years. It was one of the first modern-day shoe
‘manufacturers’, a team of stitchers and shoemakers creating footwear not just for the local town,
but also for distant retail merchants. This departure from the centuries-old tradition of the one-
man cobbler’s workshop was a brand new concept, creating an entirely new industry. The Bata
enterprise revolutionized the treatment of employees and labor conditions. Tomas consistently
maintained a human focus, creating opportunities for development and advancement, and added
compensation for employees based on achievement. As the enterprise prospered, so did the
communities where it operated. Tomas believed that a focus on people and public service was
critical for business success. The enterprise built housing, schools and a hospital near the
shoemaking plant in Zlin. It provided food and inexpensive rent during very difficult times. Bata
companies later provided rail services, construction, insurance, publishing and a tannery in Zlin.
“The Bata System” devised by the Zlin team, and later applied in other Bata Shoe Organization
companies, organized operations into autonomous workshops and departments (“profit centre”),
allowing employees to contribute ideas and stimulate production, and contributed significant
breakthroughs in footwear technology. By 1938 Bata Shoe Organization had established a unique and
widespread presence, designing, producing and marketing footwear in more than 30 countries. The
Bata Shoe Organization regarded itself as a ‘Multi-Domestic’ rather than multinational enterprise,
making it a priority to contribute to the economy in any new markets it entered.
During the 50s, 60s and 70s the Organization redoubled its focus on retailing excellence, international
footwear branding, advanced manufacturing techniques and extensive employee training, another
Bata tradition that dated back to the Organization’s earliest years. The Organization continued to
expand its retail operations, production facilities and moved into new countries of operation. Thomas
J. Bata, and son Thomas G. Bata, continued to lead the Organization with the traditional philosophy
ensuring that each operation focused on customer satisfaction. As the world-manufacturing base for
footwear shifted to developing countries. New business strategies have been guided by the founding
principles of focusing on customers, marketing and employees. Branded products, innovative retail
store concepts, lifestyle merchandising, non-footwear products and participative retailing have been
introduced. In 1992, the Organization and family were invited to return to the Czech Republic, where
Bata had remained a symbol of national pride and achievement.
BATA TODAY:
Bata is one of the world’s widest reaching companies, with operations in 68 different countries.
Bata companies strive to listen to the customers in their local markets and clearly identify their
footwear needs, and then to provide products that exceed their customers’ expectations in terms
of quality, style and value. Bata operating companies are grouped into four business units based
on similarities in markets and business issues. Each group benefits from synergies specific to
their requirements, such as product development, sourcing and marketing support. Each
business unit is entrepreneurial in nature, and can quickly adapt to changes in the marketplace
and seize potential growth opportunities.
Bata International serves customers in much of Asia, the Pacific and Africa through its 3,000
stores and many dealers. It is supervised from Singapore. Bata International operates shoe
innovation centers in several countries as well as 30 factories to serve individual markets.
Bata Europe is based in Paris and operates 500 stores offering fashionable footwear. The world-
class shoe innovation center just outside of Venice supplies many of the exclusive lines found in
Bata stores throughout Europe.
Bata Latin America is based in Mexico City. Bata is the leading retailer of shoes in Latin America and
the leading marketer of children’s branded footwear.
Bata Canada is based in Toronto from where 250 stores serve the Canadian market. Its chain of
Athletes World’s and Nike Shops is the leading fashion source in Canada for young urban
customers.
Bata Shoe organization (B.S.O.) is the largest manufacturer and marketer of footwear in the world. Its
global business comprises of shoe factories, tanneries, engineering plants, quality control laboratories,
product development and research centers. Bata distributes its products through approximately 6,300
retail outlets, 10,000 franchises and thousands of wholesale depots and dealers. More than 50,000
people are employed in producing and selling over 300 million pairs of shoes each year, primarily for
the domestic markets in which B.S.O companies operate.
Approximately 400,000 additional people and their families are engaged in the support services
required by B.S.O. operations. Bata International Centre is located in Toronto, Canada. Mr. Tomas
Bata, the founder of Bata Shoe Organization, initiated this worldwide operation in Zlin,
Czechoslovakia, now known as the CzechRepublic. The year 1994 marked the 100th founding
anniversary of BATA. Over the years B.S.O.’s operation expanded across the entire globe and
established itself as the world’s largest organization in footwear manufacturing and marketing Today
Bata operates in 68 countries.
Bata leadership points:
Bata operates in many different economic and cultural environments around the world, dictating
very different types of operations. Although Bata does not sell the same shoes nor does it have
identical stores in each country, customers will recognize common elements to the Bata
experience everywhere in the world. These common elements are the Bata Leadership Points.
The best product:
Bata companies offer our customers fresh, fashionable footwear and accessories, designed
specifically for the needs of the local market. Our shoes are always well made from quality
materials.
The best service:
Whether in India or Italy, our sales associates offer consistently first-class service. They are well
trained to ensure a proper fit, and we pledge customer satisfaction.
The best value and quality:
Through the efficient sourcing and distribution of Bata products, we can control the cost and
quality at every step to ensure value to our customers.
The best locations
Bata stores are modern, attractive and located conveniently to our customers. Bata companies
utilize innovative promotions and displays to display our products in attractive manner.
Bata Bangladesh:
Bata Shoe Company established by G. Bata in 1874 at Zing in former Czechoslovakia. From a
very modest beginning it has come a long way since, mainly by the vision of its founding father
and sheer commitment of its employee around the world. At first it only made and sold good high
quality shoes in and around Europe but as time goes by it crosses the boundary to Europe and
enter in many countries around the world. At the Pakistan period Bata was first came to this
country. After independence Bata continue their commitment to provide good quality shoes at an
affordable price. Many of the elderly people still remember the “Naughty Boy” shoe of Bata that
was known for its durability among the kids of that time. But since then Bata Bangladesh has
changed a lot. Now they are not only providing durable shoes but have brought new designs too
according to the taste of the people. Bata expands its operation all through the country. It has
now huge number of stores, agencies, dealers and wholesalers around the country. And
undoubtedly it has the biggest shoe manufacturing and marketing organization here in
Bangladesh. There are hardly any places in the country where one will not found Bata store,
which signals its expansion, success and popularity here.
Bata Bangladesh is a public limited company, which has 51- 49% share with the government of
Bangladesh. Though it has established in Czechoslovakia but at present Bata is a Canadian
company because of the migration and mergers of the family and now J. Bata who happens to be
the grandson of founder G. Bata has his operation and headquarter in Canada and operates as a
Canadian company. In Bangladesh it is operating as a Canada-Bangladesh company.
Bata has two factories in Bangladesh from where it produces all kinds of shoes. One of which is
at Tongi and other one at Dhamrai. The second factory at Dhamrai has state of the art
technology and facility with leather treatment to leather processing to waste treatment plants,
which is the only one of its kind in the country. Bata Bangladesh produces daily around 80,000
pairs of shoes of various descriptions in its two manufacturing units located at Tongi and
Dhamrai. It has a modern Tannery with the latest technological facilities to process approximately
19,000 square feet of leather daily, which comprise a wide range of products and finishes. The
Tannery is also equipped with a modern effluent treatment plant to ensure a pollution free
environment. The Company’s marketing network is consolidated through its own retail outlets,
distributors, franchises, agencies, wholesale depots and a large number of registered distributors
and dealers.
BATA BD. – BASIC FACTS
YEAR OF ESTABLISMENT AS BRANCH OFFICE : 1962
YEAR OF INCORPORATION AS FULL FLEDGED COMPANY` : 1972
TOTAL MANPOWER :
4300
NUMBER OF BROAD CATEGORIES OF SHOES : 4
TOTAL NUMBER OF CATEGORIES OF SHOES :40
BATA‘S ANNUAL SALE PAIRS(2009) :35 M
PAIRS
BATA‘S ANNUAL TURNOVER IN 2009 :70M US
$
AVERAGE RETAIL PRICE :4 US $
No. of Brand :20
CHANNELS OF SALES:
RETAIL AREAS : 30
NUMBER OF RETAIL OUTLETS : 350
WHOLESALE DEPOTS : 20
TOTAL NUMBER OF DEALERS : 1200
Company profile of bata shoe company (bd) Ltd.
Mission:
Introduction of a strong shoe line targeted to various market segments to maintain leadership
through increased market share.
Vision:
To provide good quality shoes at an affordable price. By keeping in mind the comfort that needs
to be there and providing new designs with it.
Objectives:
Achievement of 100% estimated business in each category
Maintain a shoe line with 700 lines of which 200, 300, 150 & 50 lines for Men, Women Children &
Plastic respectively.
Introduction of a shoe line as per life style as well as fashion trend.
Achieve an average 55% margin in each category
Innovate ideas or system for better management of merchandise distribution by maintaining 4
times stock turn.
Strategies:
Penetration to new & targeted market segments through introduction of shoe lines as per life
styles with supportive promotion activities
Defined number of lines, assortment & quantity for each store according to merchandise
classification & store profile in order to increase efficiency in distribution.
Identification of loopholes in cost structure to increase production efficiency.
Detail analysis of price points of entire shoe line in order to achieve maximum margin.
Detail analysis of departmental work flow & bringing necessary changes for efficiency better
coordination with other departments.
BATA’S BUSINESS:
Bata manufactures and sells a wide range of footwear made from leather, canvas, plastic and
rubber. The company sells over 59 mn pairs per year throughout the country and in overseas
markets such as USA, UK, Europe, Middle East, etc. The company also markets a range of
sports shoes, garments and accessories manufactured by others.
Footwear sales account for more than 97% of the total revenue. Rubber and canvas footwear
contributes 48% of volumes, leather footwear contributes to 30% and plastic footwear accounts
for 22% of volumes. In value terms, leather footwear contributes to 58% to turnover, Rubber and
canvas footwear contributes 27%, plastic footwear accounts for 12% of total turnover.
Accessories, garments, etc account for 3% of turnover. Bata manufactures around 50% of its
footwear in its own units, while the rest is outsourced. from small-scale manufacturers. While all
the plastic footwear is outsourced, in leather company manufactures 63% of the footwear in-
house and in rubber and canvas footwear, 61% is manufactured in-house.
SOURCES OF PRODUCTION:
Bata Bangladesh has four different sources of production:
Own:
Bata Bangladesh has two factories in Tongi and Dhamrai. All the rubber and related production
has been done in Tongi factory. Every type of leather products are been manufactured in the
Dhamrai factory. About 92% of all Bata products are produced in these two factories.
Satellite:
There are some satellite production factories which produces solely for Bata with the production
facility, which has been, step up by Bata Bangladesh. 4% of Bata production is from satellite
sources.
Outsourcing:
As related and supporting industries are growing in shades of the massive structure of Bata
Bangladesh. It also does outsourcing with different small shoe industries mainly from the Dhaka
region. The quality and the specification has been ensured by the Bata people. The participation
of outsourcing in the companies business is 4%.
Import:
With high import duty it is hard for Bata to import a substantial amount from different subsidiaries
and other outside suppliers. It can be mentioned that the duty for importing complete shoe here in
Bangladesh is 101%. Even though Bata Bangladesh import shoes to keep up with the market
trend, which is around 1% in every year.
Products:
School shoes of Bata:
Bata first earn its name as the most durable shoe manufacturer for school going children. When it
first comes to this country it has realized that there is a huge market opportunity for school shoes.
Quickly they introduced the “Naughty Boy” shoes. Which quickly earn recognition among the
parents of that time, as they need a durable shoe that really can last even after lots of rough
treatment. From there on Bata gone on to make Canvas shoes, other black leather shoes, hard
top white sneakers for school goers. The most popular brand of school shoes that are now in the
market are NorthStar which provides hard and soft white sneakers and the leather black Bata
school shoes which are of various designs.
Bubblegummers:
The Bubblegummers brand of Bata serves the infant to children, according to them 0-13 years of
age group. Bubblegummer brand has provided Varity of design and type of shoes for above-
mentioned age group of children.
Marie Claire:
The Mari Clare brand of Bata is for women. It has more than 100 designs and has different price
range of shoes. The price range here starts from Taka 450. In recent times Bata has targeted the
young working women who wants reasonably priced, decent design and durable shoes for work
and this brand in many cases serves this segment well.
Sandak:
What we called is Sponge Sandle is professionally called as Thongs. Sandles of Sandak brand of
Bata serves that very segment of the market. It produces different types of very good quality
plastic and Thongs for women. From my survey it has found that it is the most popular shoe of
Bata. The pick seasons for Sandak shoes are rainy season when many prefer this shoe, which
are washable and decent in looks.
Power:
This is a reasonable priced good quality sports shoes and sandle shoes for young male and
female. The target segment of Power is teenagers and some parts of the elderly people who
need sneaker for walking purpose. The price range starts from 695/- and in many cases not
exceed more than thousand taka. According to the buying power this price range is very popular
with the general public as durability comes with it as with every Bata footwear.
KingsStreet:
The most famous dress shoes of Bata come under the brand name of “KingsStreet”. It has been
nice to know that this brand of shoes has been solely made in Bangladesh. The Dhamrai factory
of Bata has the machinery to make these shoes, which they established in 1999 at a cost of 1
core taka. These shoes have different price range for different segments of people.
Weinbrenner:
This brand of Bata provides trendy, outdoor, rough use footwear for men. This is also a popular
brand with the youth of the country. Though the brand is not that cheap but the quality of it is very
good. Apart from these Bata has numbers of leather sandles of various designs, sandle-shoes
under Bata brand name that serves different segment of the market. Bata also manufacture and
market popular brands such as HushPuppy, Dr.Schole’s in this region of south Asia. Bata also
have quite new brands for male and female like Bata Comfit, Bata Flexible. According to the Bata
officials in Bangladesh Bata have more than 1000 lines of footwear’s here in Bangladesh at
present.
Thus Bata’s well known brands include Power, Bubble-Gummers, Marie-Claire, Hawai, Naughty
boy, Sandak, North-Star etc. International brands such as Hush Puppies, Nike, Lotto, and Dr
Scholl are sold under manufacturing and licensing agreements. The company has more than
1000 shoe designs and caters to all the segments. Over 60% of sales come from the men’s
range, while children’s and women’s range account for about 20% each. In women’s segment the
Sun-drop range of casual ladies wear in the popular range has done well in the market and
registered a strong growth of 500% in F12/2000. The brand is being endorsed by filmstar Rani
Mukherjee. Bata also markets sports wear, readymade garments, hosiery, and other footwear
accessories like socks, shoe polish, etc. The company also exports its products to countries like
Germany, Australia, USA, UK, Holland, Denmark, New Zealand, France and Canada. It exports
about 4mn pairs of shoes in a year.
Analysis and Findings:
INTERNAL ANALYSIS:
Target Market: lower to middle income group as well as the upper segment.
Basis of Segmentation: There are two different criteria used in order to segment the market.
Thus Bata Shoe Organization divides the market “geographically” as well as on the basis of
“product type”.
Retail marketing manager: As retail is the highest contributor of the companies business. Retail
marketing manager is responsible for planning, advertising as well as the whole of the retail operation
around the country. He also deals with the governmental regulation in respect of price, stability,
license, fees etc. for launching new products. It is his responsibility to take initiative to pass all the
necessary documents from the regulation board of government. For this reason this post-ranked third
in the hierarchy of the companies’ organ gram in Bangladesh.
Wholesale marketing manager: The functional objective of the wholesale marketing
manager is to monitor and planning of wholesale market operation of Bata Bangladesh, which
also is a very important sales channel of the company.
Merchandising manager: In charge of the heart of the company the Merchandising department.
Who reports to the CFO and managing director directly and to some instance to the sales channels
especially to Retail. All the categories of shoes are headed by the Merchandising officer/Category
Merchandiser/Buyer who is in charge of every detail of his/her category. He/she is responsible for his
category business, choosing the right merchandise according to the market need, distribute it properly
and getting the feedback of the performance of his/her merchandise in the market and plan
accordingly. He/she on the other hand repots to the Merchandising manager. There are basically four
categories in Bata Bangladesh of which a merchandiser who is basically the head of the category has
a distributor, who is responsible of distribution of the merchandise to the right place at the right time
and the right amount. A designer also under the category merchandiser who is responsible for
designing new shoes according to the market needs and the advise of the merchandising officer.
Production Department: Production division is aimed to increase productivity and quality as
much as required without spending more. There are two plant managers on in Tongi and other in
Dhamrai. They are controlled by the director of production. They are responsible for directing,
coordinating and controlling the overall production activities means from the purchasing raw
materials to transferring those into complete shoes. The function of production manager is to
assist the director of production in achieving the production target for a specified period. The
function of planning and supply manager is material planning, production planning etc.
Finance Department:
To maximize the interest of the shareholders of Bata Shoe Co. (BD) Ltd.
To allocate the fund in a proper way that minimizes its cost and maximizes its profit.
To ensure conductive financial climate of the company.
To ensure sound management of the administrative staff and financial matters of administrative
staff and selection grade employees.
Company Secretariat:
To ensure the best selection, placement and utilization of the administrative staff within the
company.
To ensure discipline, mutual coordination, smooth communication among the administrative stuff
and thereby peaceful corporate environment.
To provide sufficient training and opportunities to the administrative stuff to improve their skill and
efficiency for the well being of the company.
To ensure proper management of the financial matters of selection grade administrative stuff.
Accounts Department:
To ensure conducive financial trend of the company.
To ensure sound financial plan in terms of raising and allocation of funds and thereby maximizing
shareholders interest.
To prepare Annual Financial Plan of the company in terms of both procurement and allocation of
fund.
To maintain books of accounts, cost and financial accounts of the company as per the requirement
of law and group head office.
To manage the assets of the company.
To provide financial information and report to the top management for decision making purpose.
Internal Audit Department: To provide reasonable assurance of adequate and effective process of internal control and
functioning effectively such that assets are safeguard, proper accounting records are maintained,
financial information used within the business or for publication is reliable.
To confirm transparency in all auditable entities.
Pre-audit: To carry out all operational checks.
Post-audit: Conduct internal control review, physical verification on various audit universes.
Investigation: Conduct thorough review in any specific area of audit universe as desired by the
authority of the concerned audit entity.
Development of procedure manuals.
MIS Department:
To coordinate and supervise data entry for the accounting and payroll package.
To update product cost and product profitability from time to time.
To arrange repair and maintenance of the computer hardware.
To provide necessary support and help to the computer in their day to day function
To prepare the monthly statement of “Advanced Sale Invoice”.
Costing Department:
Headed by Costing and efficiency manager. The department is responsible for all kinds of costing
related issue of the shoe and makes the highest use of the manpower. The department also is
responsible for the highest use of the material consumption and does the costing of the shoes
effectively and efficiently.
Personnel / Human Resource Department:
To ensure the proper section of personnel.
To help the employees to grow and develop themselves.
Maintenance of personnel records.
To maintain cordial and peaceful labor management relationship.
To ensure discipline among the employees.
Quality Assurance:
To ensure that the end users receive medicines those are safe, effective and quality consistent
with leadership position in the health care industry throughout the country.
To apply the principles of customer-focused quality, service and excellence to all processes and
system, from product design, development through production, distribution and marketing.
To maintain the standard of quality in order to protect the patients, prevent errors and optimize
value provided to the consumer and company.
MARKET ANALYSIS:
Within a given environment, marketing strategy deals with the interplay of three forces known as
the strategic three C’s: the customer, the competition and the corporation. Based on interplay of
the strategic three Cs, formation of marketing strategy requires the following three decisions:
Where to compete: It requires a definition of the market (e.g. competition across an entire market
or in one or more segments).
How to compete: It requires a means for competing (e.g. introducing a new product to meet a
customer need or establishing a new position for an existing product).
When to compete: It requires timing of market entry (e.g. being first in the market or waiting until
primary demand is established).
Thus Marketing strategy, in terms of these three key constituents, is defined as an endeavor by a
corporation to differentiate itself positively from its competitors, using its relative strengths to
better satisfy customer needs in a given environmental setting.
ENVIRONMENTAL ANALYSIS:
Social and Cultural Factors:
People’s lifestyle is changing with the increase in disposable income and more and more people
are becoming quality and fashion conscious. Since people travel more and more they know what
the other Bata store offers to them elsewhere. So Bata Bangladesh must have to come out of
their old styling and store design to suit with more modern fashion. Social and cultural indicators
are positive signal for the future prospects of the company.
Technological Factors:
Due to vast improvements in the information technology systems, ‘Internet’ has posed itself to be
new media to reach the consumers. Realizing the need and the opportunity Bata Bangladesh has
already set a state of the art facility in Dhamrai. All the leather products that they made here in
Bangladesh are made there. They provide new forms of technological improvement where MIS
department monitor their whole operation. The POS system in the wholesale depot is also a
positive step towards good use of technology in the survival and competition in today’s business.
Political and Legal Factors:
In Bangladesh, political turmoil like hartal, strikes etc. are a serious barrier in the smooth
functioning of a company. However, Bata Bangladesh is able to take some positive outputs from
political factors. As they are 100% taxpayers to Bangladesh government, they must able to make
understand the politicians the importance of FDI in the country. Therefore, Bata Bangladesh can
get some benefit from political factor as well.
Economic Factors:
Per capita income is increasing.
Shoe industry is growing with the increase of urban population and income level.
Currency rates are fluctuating which influence the cost of procurement of raw materials from
external sources.
ANALYSIS OF THE CORPORATION:
MARKET POSITION:
Bata Bangladesh is the largest player in the footwear industry with around 9-10% volume share
and a 60% market-share in the organized segment. BB (Bata Bangladesh) has a market share of
70% in canvas shoes segment while it has a share of 60% in leather shoes. BB manufactures
about 10% of the total Hawaii’s sold in the country. BB competes in manufacturing low priced
Hawaii’s with the unorganized sector with its price ranging from Taka35-Taka110 with
unorganized sector’s pricing in the range of Taka25-Taka50.
Leading competitor in the popular segment of the organized market Apex Shoes. Other
organized sector players are liberty shoes, Baly Shoes, Woodland, Pagasus. Most global players
like Adidas India, Reebok, Nike, etc are operating through their Bangladeshi subsidiaries with
main focus on premium sports shoes segment, which has an insignificant volume share.
Competition is hotting up in the domestic market due to popular brands such as Gaitonde, Red
Tape, Lotus Bawa in the illegal and smuggling of these shoes. These brands are gaining market
share especially in the premium segment.
MARKETING MIX OF BATA SHOE COMPAY (BD) LTD.
Product:
Bata shoe Bangladesh Ltd. has more than 900 lines of shoes in different categories. They
distribute all of these lines of shoes in different parts of Bangladesh through wholesalers, dealers
and through their own stores. In the following chart some of the shoes, its average price, size and
other dominating features are mentioned.
BATA Best Price Range (TK)
Men’s 995-1695
Women’s 250-550
School 200-330
Children 130-195
Sport 695-995
Non Shoes 50-100
Dominating Color
Men’s Black
Women’s Black, Chocolate
School Black, White
Children Multicolor
Sport White, Gray
Non Shoes Black, Chocolate
Best selling sizes
Men’s 41,42
Women’s 4,5
School 4,5
Children 11,12
Sport 7,8
Non Shoes Depends on the product
Opening Days 6 days
Opening Hours (AM-PM) 9:00 am-8:00 pm
Implementation of new designs Weekly
Effective sales campaigns 15-20% discount
Table 1: Different Product Category and Best Selling Sizes
Promotion:
Promotion strategies are concerned with the planning, implementation, and control of persuasive
communication with customers. Clear-cut objectives and a sharp focus on target customers are
necessary for an effective promotional program. As Bata is a established brand here in
Bangladesh they think that they should go on with more and more retail outlets rather than
intense advertising. So they limit their advertising into following places:
Billboards
Adds on local newspaper
Some promotion together with other established brands
Distribution:
The physical distribution starts when the raw materials send to the factory and the manufacturing
process starts there in Tongi and Dhamrai factory. From there the end products send to the CDC
(CentralDistributionCenter) in Tongi factory. After they receiving the end products then and their
the packaging has been done and according to the requirement of different stores, Agencies,
dealers and wholesalers the goods has been transferred directly to the distributors through
company owned vehicle. There is separate process for own agencies and stores against the
wholesalers and dealers. The goods for agencies and stores gone straight to the store
headquarter and goods for others gone to the 13 depots around the country from where they
collect the goods. In retail, BB operates through a chain of exclusive own and franchise stores.
BB’s stores are located in prime locations countrywide. 70% of Bata’s sales are from its own retail
outlets. Besides there is a network of about 500 exclusive wholesalers who service about 300
retail stores all over the country. Bata has showrooms, wholesale depots and distribution centres
across the country.
BB’s major thrust is on middle-class and upper class customers. The concept of `budget stores`
has been introduced to remove apprehension in the minds of customers who viewed Bata outlets
as being expensive. The company is focusing on the rural markets for volume growth in the low-
priced footwear segment.
Distribution process of Bata Bangladesh:
FUTURE PLANS:
To improve the sales and profits, BB is planning to increase penetration by setting up more retail
outlets and taking space in shopping malls across the country. Existing retail stores would be
upgraded even as wholesale depots would be set up in smaller towns and semi-urban areas.
BB’s main efforts will be to streamline the wholesale business. BB’s thrust is on becoming
marketing driven firm from a manufacturing oriented company. Steps are also being taken to
reduce costs, improve distribution logistics and focus on launch of new products in order to
improve the performance of the company.
INDUSTRY ANALYSIS:
Products tend to go through different stages, each stage being affected by different competitive
conditions. These stages require different marketing strategies at different times if sales and
profits are to be efficiently realized. The length of a product life cycle is in no way a fixed period of
time. It can last from weeks to years, depending on the type of product. In case of shoe industry
in Bangladesh it is presently going through the growth stages which are characterized by many
new consumers entry in the market, by fall in price as experience and economies of scale have
been attained, by developed distribution channel and by increasing intensity of competition.
Introduction Growth Maturity Decline
Figure: 4 Product Life Cycle of shoe industry in Bangladesh
INTENSITY OF COMPETITION IN SHOE INDUSTRY:
Conceptual framework for industry analysis has been provided by Porter. He developed a five-
factor model for industry analysis, as shown in the exhibit. The model identifies five key structural
features that determine the strength of the competitive forces within an industry and hence
industry profitability. Analysis of shoe Industry of Bangladesh in respect to Bata shoes with
Porters Model of Industry Competition has been summarized as followed.
Threat of new Entrants:
Threat of new entrants is high in Bangladesh because Apex is already entered into the market as
a domestic shoe industry with high expectation and good management. Apart from that foreign
competitors like Liberty of India which already taking a grip into the shoe market especially the
women segment. There are also some other foreign shoe manufacturer like Nike, Reebok,
Addidas and Woodland. There are also some other domestic companies like Baly, Pagasus, and
Homeland etc. So the road ahead for Bata is not smooth at all and to forget the independent
sellers and smuggled shoe sellers who already have the highest market share. Bata has to go for
variety as well as their durability which they known for long.
Bargaining power of Suppliers:
The bargaining power of suppliers is relatively moderate. The number of suppliers is huge. And
the upcoming and other shoe companies buy in so much quantity that the suppliers have to
satisfy them even if by increasing quality and by decreasing price. The threat of forward
integration by the suppliers is high as brand identity is not a critical issue in the shoe industry in
many cases.
Bargaining power of Buyers:
Bargaining power of buyers is increasing day by day as new shoe companies with optimistic
future plan and changing trend and quality consciousness in increasing day by day. People want
durable shoes as well as modern designs. So to satisfy the customers the companies have to
keep up with the trend as well. The entrance of foreign brands like Nike, Reebok doesn’t make
the scenario easier. So one have to say that the competition is just heating up in the shoe
industry. No one can take easy even the establish brand like Bata who have more than 35 years
of experience in Bangladeshi market. So they must aware of the situation and work and take
steps accordingly.
Threat of substitutes:
One can’t think of much substitute of shoes. There are not too many bare footed people now
days. At least they wear a sandal. So the threat of substitute is not that much.
Degree of Rivalry in the Industry:
Though Bata has enjoying quite a good market share and know the market for long the market
competition is intensifying day by day. In the decade the only worry for Bata was independent
sellers who have the minimal establishment costs and in many cases sale shoes of high quality of
minimal cost or poor quality shoes. But the situation has been changed much since now not only
the independent sellers but also the regional and world famous brands are now in Bangladesh.
So the competition has now much more intense. Bata Bangladesh has to think both of their old
threats as well as new competitors who has much more organized structure than the old
competitors.
SWOT ANALYSIS:
Strengths:
Image of the company
Quality Product
Differentiated line of products
Competitive Pricing
Strong distribution channel
Modern manufacturing facilities
Brand loyalty at mass level
Weaknesses:
Insufficient promotional activities
Bata at present conducts all the store management activity manually. This results lots of lengthy
paper works, errors & waste of time.
Inability to catch the present trend in time
Less competitive price due to high cost structure.
VAT & tax barrier
Opportunities:
Despite political turbulence a segment of our middle-class is coming up with reasonable buying
power. Many of them are women who are decision maker so the city store concept of Bata can
attract them as whole of the family footwear can be available there.
Consumer like differentiated products. They like to shop in a store where they serve the whole
family.
More competition results in more campaign for products.
Business Expansion in Shoe care products
Utilize outsourcing especially the synergy sources to achieve competitive pricing
Franchisee opportunity with global brands like Nike, Reebok, Hush Puppy
Market expansion opportunity in high fashion & value for money footwear market for all categories
of shoes through Retail & WCSM channels
Threat:
Political instability affects the supply of raw materials and distribution of finished products.
Uncontrolled counterfeit of Bata products
New companies like Apex, Homeland, Pagasus of Bangladesh and the foreign companies like
Nike, Reebok, Addidas are already in the market with good quality product. Have to keep up with
them respect of quality.
Smuggelling of shoes and many stores in the city like the one’s in elephant road are the major
market leaders. As they don’t have to pay for large amount of money for establishment, production,
quality and advertising so they can sell at a much lower price than established brands like Bata.
Rapid market expansion program by organized competitors like APEX.
ANALYSIS OF COMPETITORS:
APEX:
Most of their shoes are expensive. They don’t provide any school shoes. The sports shoe they
bring into the market are mostly imported “Addidas” shoes and quite expensive. In the men’s
section the most dominating color is black, in women section-black and chocolate. They provide
sophisticated color shoes for children. The most dominating sizes of the men, women and
children are the average sizes that are sold in any Bata store. They remain open on everyday of
the week except any government holiday. Opening hour is 9:00AM-10:00PM. They generally
implemented new design after every 6 months according their employees. The most successful
sales campaigns are 60% off on specific design. Their market share is about 1.50% in
Bangladesh.
LIBERTY:
Here in this shoe stores the average price of the shoes are also expensive. Their average retail
price is 600+. They also have the same kind of offerings in their respective divisions. Usually the
normal color and size that are sold elsewhere are also sold here. They remain open everyday
except of any government holidays. They open at 10 in the morning and remain open up to 10 in
the evening. After 3-6 months they brought new design shoes in the market. The most effective
sales campaign is 40-60% discount on specific design shoes. The market share of Liberty shoe is
about 1%. They are in the market for about 13 years as a franchisee they are from India.
REEBOK:
They only sale sports shoes and some children shoes who are in their teens. The price of all
shoes is high 1200+. The color and design of their shoes are of high quality. Reebok brings
different types T-shirts, tracksuits and non-shoes items, which are quite expensive. After every 1-
2 months new design of shoes comes in their store. 20-25% discounts on specific design are
their most effective sales campaign. About .10% market share Reebok is quickly gaining ground
and getting attention of the brand conscious segment of the country.
NIKE:
Same as Reebok, Nike only offers high quality sports and some children shoes. Their shoes are
also expensive sports shoes ranging from 2000-5000, which are sold most. Best-sold non-shoe
items such as T-shirt, tracksuits are ranging from 750-2250 taka. They open their store everyday
of the week. They brought new design in the market after every 3 months. They don’t have any
sales campaign up to now. Same as Reebok but their market share is less than their international
rival as they have enter Bangladesh market for 6 or 7 years.
PAGASUS:
They made their name as sports shoe manufacturer. After that they come up shoes for both the
male and the women. Their best-sold price range is 800-1200 for men, 550-750 for women and
300-500 taka shoes for children. Their best sold sports shoes are ranging from 700-900 taka.
They open their store everyday from 9:00-10:00 in the evening. After 2 months they bring out at
least some kind of new design in one of their segments. Most effective sales campaign up to 20%
discount. Their market presence in the country is over 25 years but not doing that well. Market
share is only .50% mainly the quality of the shoe is moderate.
INDEPENDENT HIGH:
It is most popular among buyers. They are the type of seller who usually sold relatively high
