Marketing Strategies of Singer Bangladesh Ltd Case Study of Singer Bangladesh Ltd
2.1
MARKETING
There are many definitions of marketing. The most famous definition of marketing is focused upon customer orientation and satisfaction of customer needs. •
Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.
Philip Kotler 2.1.1 The Holistic Marketing Concept The holistic marketing concept is based on the development, design, and implementation of marketing programs, processes, and activities that recognizes their breadth and interdependencies. Holistic marketing recognizes that “everything matters” with marketing – and that a broad, integrated perspective is often necessary. Four components of holistic marketing are: •
Relationship Marketing
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Integrated Marketing
•
Internal Marketing and
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Social Responsibility Marketing.
2.1.1.1 Relationship Marketing Relationship marketing has the aim of building mutually satisfying long-term relationship with key parties – customers, suppliers, distributors, and other marketing patterns – in order to
earn and retain their business. Relationship marketing builds strong economic, technical, and social ties among the parties. Relationship marketing involves cultivating the right kind of relationships with the right constituent groups. Marketing must not only do customer relationship management (CRM), but also partner relationship management (PRM) as well. Four key constituents of for marketing are customers, employees, marketing partners (channels, suppliers, distributors, dealers, agencies), and members of the financial community (shareholders, investors, analysts).
Senior Management Marketing Department
Products & Services Other Departments
Communications
Internal Marketing
Ethics
Relationship Marketing
Community Environment
Integrated Marketing
Holistic Marketin g
Social Responsibility Marketing
Channels
Legal
Customers
Patterns Channel
Figure 1: Dimensions of Holistic Marketing The ultimate outcome of relationship marketing is the building of a unique company asset called a marketing network. A marketing network consists of the company and its supporting stakeholders (customers, employees, suppliers, distributors, retailers, ad agencies, university scientists, and others) with whom it has built mutually profitable business relationships. Increasingly, competition is not between companies but between marketing networks, with the prize going to the company that has built the better network. The operating principle is
simple; Build an effective network of relationships with key stakeholders, and profits will follow. The development of strong relationships requires an understanding of the capabilities and resources of different groups, as well as their needs, goals, and desires. A growing number of today’s companies are now shaping separate offers, services, and messages to individual customers. These companies collect information on each customer’s past transactions, demographics, psychographics, and media and distribution preferences. They hope to achieve profitable growth through capturing a larger share of each customer’s expenditures by building high customer loyalty and focusing on customer lifetime value. 2.1.1.2 Integrated Marketing The marketer’s task is to devise marketing activities and assemble fully integrated marketing programs to create, communicate, and deliver value for consumers. The marketing program consists of numerous decisions on value-enhancing marketing activities to use. Marketing activities come in all forms. One traditional depiction of marketing activities is in terms of the marketing mix, which has been defined as the set of marketing tools the firm uses to pursue its marketing objectives. McCarthy classified these tools into four broad groups, which he called the four Ps of marketing: product, price, place, and promotion.
The firm can change its price, sales force size, and advertising expenditures in the short run. It can develop new products and modify its distribution channels only in the long run. Thus the firm typically makes fewer period-to-period marketing mix changes in the short run than the number of marketing-mix decision variables might suggest. The four Ps represent the sellers’ view of the marketing tools available for influencing buyers. From a buyer’s point of view, each marketing tool is designed to deliver a customer benefit. Robert Lauterborn suggested that the sellers’ four Ps correspond to the customers’ four Cs. Four Ps Product Price Place Promotion
Four Cs Customer solution Customer cost Convenience Communication
Marketing Mix
Product Product variety Quality Design Features Brand Name Packaging Sizes Services Warranties Returns
Place Target Market
Price
Promotion
List Price Discounts Allowances Payment period Credit terms
Sales promotion Advertising Sales force Public relations Direct marketing
Channels Coverage Assortments Locations Inventory Transport
Figure 2: The four P Components of the Marketing Mix Winning companies will be those that can meet customer needs economically and conveniently and with effective communication. Two key themes of integrated marketing are: •
Many different marketing activities are employed to communicate and deliver value and
•
All marketing activities are coordinated to maximize their joint effects.
In other words, the design and implementation of any one marketing activity is done with all other activities in mind. Businesses must integrate their systems for demand management, resource management, and network management. 2.1.1.3 Internal Marketing Holistic marketing incorporates internal marketing, ensuring that everyone in the organization embraces appropriate marketing principles, especially senior management. Internal marketing is the task of hiring, training, and motivating able employees who want to serve customers well. Smart marketers recognize that marketing activities within the company can be as important as, or even more so than, marketing activities directed outside the company. It makes no sense to promise excellent service before the company’s staff is ready to provide it. Internal marketing must take place on two levels. At one level, the various marketing functions – sales force, advertising, customer service, product management, and marketing research – must work together. Too often, the sales force thinks product managers set prices or sale quotas “too high”; or the advertising director and a brand manager cannot agree on an advertising campaign. All these marketing functions must be coordinated form the customer’s point of view. At another level, marketing must be embraced by the other departments; they must also “think customer”. Marketing is not a department so much as a company orientation. Marketing thinking must be persuasive throughout the company. 2.1.1.4 Social Responsibility Marketing Holistic marketing incorporates social responsibility marketing and understanding broader concerns and the ethical, environmental, legal, and social context of marketing activities and programs. The cause and effects of marketing clearly extend beyond the company and the customer to society as a whole. Social responsibility also requires that marketers carefully consider the role that they are playing and could play in terms of social welfare. Situations like this one call for a new term that enlarges the marketing concept. Among those suggested are “humanistic marketing” and “ecological marketing”. We propose calling it the “societal marketing concept”. The societal marketing concept holds that the organization’s task is to determine the needs, wants, and interests of target markets and to deliver the desired satisfactions more effectively
and efficiently than competitors in a way that preserves or enhances the customer’s and society’s well being. The societal marketing concept calls upon marketers to build social and ethical considerations into their marketing practices. They must balance and juggle the often conflicting criteria of company profits, customer want satisfaction, and public interest. Companies see cause-related marketing as an opportunity to enhance their corporate reputation, raise brand awareness, increase customer loyalty, build sales, and increase press coverage. They believe that customers will increasingly look for signs of good corporate citizenship that go beyond supplying rational and emotional benefits. Now that we’ve been introduced to marketing and the marketing concept, we need to remember the important elements contained as follows: •
Marketing focuses on the satisfaction of customer needs, wants and requirements.
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The philosophy of marketing needs to be owned by everyone from within the organization.
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Future needs have to be identified and anticipated.
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There is normally a focus upon profitability, especially in the corporate sector. However, as public sector organizations and non-profit organizations adopt the concept of marketing, this need not always to be the case.
• 2.2
More recent definitions recognize the influence of marketing upon society.
MARKETING MIX
Marketing mix is the set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. The marketing mix consists of everything the firm can do to influence the demand for its products. The many possibilities can be collected into four groups of variables known as the “four Ps”; product, price, place, and promotion. The advantage is that more customers will likely consider one of the options as opposed to purchase from a competitor. Marketing mix allows anyone to combine all the marketing tools in order to sell the product.
Figure 3: The Marketing Mix 2.3 COMPONENTS OF MARKETING MIX There are as many as four components of the marketing mix. They are well known as the 4 Ps. They are: •
Product
•
Price
•
Place and
•
Promotion.
2.3.1 Product Product is anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need. Product means the goods-and-services combination the company offers to the target market. 2.3.2 Price Price is the amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service. Simply, price is the amount of money customers have to pay to obtain the product. 2.3.3 Place Place includes company activities that make the product available to target consumers with the help of marketing channels or distribution channels. Marketing channel (or distribution channel) is a set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user. 2.3.4 Promotion Promotion means activities that communicate the merits of the product and persuade target customers to buy it. A company’s total promotion mix – also called its marketing communications mix – consists of the specific blend of advertising, sales promotion, public relations, personal selling, and direct-marketing tools that the company uses to pursue its advertising and marketing objectives.
Definitions of the five major promotion tools follow: •
Advertising: Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.
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Sales promotion: Short-term incentives to encourage the purchase or sale of a product or service.
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Public relations: Building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events.
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Personal selling: Personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships.
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Direct marketing: Direct communications with carefully targeted individual consumers – the use of telephone, mail, fax, e-mail, the internet, and other tools to communicate directly with specific consumers.
Some critics have increased the marketing mix to the Five Ps, to include people. Others have increased the mix to Seven Ps, to include physical evidence (such as uniforms, facilities, or livery) and process (i.e. the whole customer experience e.g. a visit the Disney World). The term was coined by Neil H. Borden in his article ‘The Concept of the Marketing Mix’ in 1965. 2.3.5
Physical Evidence
Physical Evidence is the material part of a service. Strictly speaking there are no physical attributes to a service, so a consumer tends to rely on material cues. There are many examples of physical evidence, such as, when someone goes to a barber shop for his hair cut, the decoration of the shop, the presence of the barber, etc., are the physical evidences of the hair cut. 2.3.6 People People are the most important element of any service or experience. Services tend to be produced and consumed at the same moment, and aspects of the customer experience are altered to meet the 'individual needs' of the person consuming it. 2.3.7 Process Process is another element of the extended marketing mix, or 7Ps. There are a number of perceptions of the concept of process within the business and marketing literature. Some see processes as a means to achieve an outcome, for example – to achieve a 30% market share a company implements a marketing planning process.
2.4 MARKETING STRATEGY A marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. A marketing strategy should be centered on the key concept that customer satisfaction is the main goal. A marketing strategy is most effective when it is an integral component of corporate strategy, defining how the organization will successfully engage customers, prospects, and competitors in the market arena, corporate strategies, corporate missions, and corporate goals. The 4 "Ps" of product, price, promotion, and place (distribution) are often incorporated into a marketing strategy. 2.5 STRATEGIES ON MARKETING MIX There are 4 Ps of marketing. They are product, price, place and promotion. Each and every one has some marketing strategies. They are: •
Product
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Price
•
Place and
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Promotion.
2.5.1 Strategies on Product Product is the focal element of marketing mix. There are mainly three marketing strategies on product. When considering the nature of products and services in domestic, as well as in international marketing, the models are: •
Five Levels of a Product – marketers would consider the local market’s need for core, basic, expected, augmented, and potential products.
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Product Life Cycle (PLC) – products could be at different points in the PLC in various nations, possibly creating new opportunities.
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Ansoff's Matrix – market development could mean that an existing product is marketed in a new international market.
2.5.1.1 The Five Levels of a Product In planning a product’s market offering, the marketer needs to address five product levels. Each level adds more customer value, and the five constitute a customer value hierarchy. They are the core benefit, basic product, expected product, augmented product, and potential product. The Core Benefit
The fundamental level is the core benefit. The core benefit is the service or benefit the customer is really buying. A hotel guest is buying “rest and sleep”. The purchaser of a drill is buying “holes”. Marketers must see themselves as benefit providers. The Basic Product At the second level, the marketer has to turn the core benefit into a basic product. The basic product is the tangible, physical product. Thus a hotel room includes a bed, bathroom, towels, desk, dresser, and closet.
Figure 4: The Five Levels of a Product The Expected Product At the third level, the marketer prepares an expected product, a set of attributes and conditions buyers normally expect when they purchase this product. Hotel guests expect a clean bed, fresh towels, working lamps, and a relative degree of quiet. Because most hotels can meet this minimum expectation, the traveler will normally settle for whichever hotel is most convenient or least expensive. The Augmented Product At the fourth level, the marketer prepares an augmented product that exceeds customer expectations. In developed countries, brand positioning and competition take place at this level. Differentiation arises on the basis of product augmentation. Product augmentation also
leads the marketer to look at the user’s total consumption system: the way the user performs the tasks of getting and using products and related services. Some things should be noted about product-augmentation strategy. First, each augmentation adds cost. Second, augmented benefits soon become expected benefits and necessary points-or-parity. Third, as companies raise the price of their augmented product, some competitors offer a “stripped-down” version at a much lower price.
The Potential Product At the fifth level stands the potential product, which encompasses all the possible augmentations and transformations the product or offering might undergo in the future. Here is where companies search for new ways to satisfy customers and distinguish their offer. In developing countries and emerging markets such as China and India, however, competition takes place mostly at the expected product level. 2.5.1.2 The Product Life Cycle (PLC) The Product Life Cycle (PLC) is the course of a product’s sales and profits over its lifetime. It is typically divided into four distinct stages: introduction, growth, maturity, and decline. However, most products fail in the introduction phase. Others have very cyclical maturity phases where declines see the product promoted to regain customers.
Figure 5: Different stages of the Product Life Cycle Introduction stage
Introduction stage is the product life-cycle stage in which the new product is first distributed and made available for purchase. In this stage, as compared with other stages, profits are negative or low because of the low sales and high distribution and promotion expenses. Growth stage Growth stage is the product life-cycle stage in which a product’s sales start climbing quickly. Profits increase during the growth stage, as promotion costs are spread over a large volume and as unit manufacturing costs fall.
Maturity stage Maturity stage is the stage in the product life-cycle in which sales growth slows or levels off. Here, the product has achieved acceptance by most potential buyers. This stage normally lasts longer than the previous stages, and it poses strong challenges to marketing management. Decline stage Decline stage is the product life-cycle stage in which a product’s sales decline. The decline may be slow or rapid. Sales may plunge to zero, or they may drop to a low level where they continue for many years. Sales decline for many reasons, including technological advances, shifts in consumer tastes, and increased competition. Characteristics Sales
Introduction Low sales
Costs Profits Customers
High cost customer Negative Innovators
Competitors
Few
Marketing Objectives
Create product Maximize awareness and market share trial
Strategies Product
Price Distribution
Offer a product
Growth Rapid rising sales per Average cost per customer Rising profits Early adopters Growing number
basic Offer product extensions, service, warranty Use cost-plus Price to penetrate market Build selective Build intensive distribution distribution
Maturity Peak sales
Decline Declining sales
Low cost per customer High profits Middle majority Stable number beginning to decline Maximize profit while defending market share
Low cost per customer Declining profits Laggards
Diversify brands models
Declining numbers Reduce expenditure and milk the brand
Phase and items
out
weak
Price to match Cut price or beat competitors Build more Go selective: phase intensive out unprofitable
Advertising
Sales Promotion
Build product awareness among early adopters and dealers Use heavy sales promotion to entice trial
distribution Build Stress brand awareness and differences and interest in the benefits mass market Reduce to take Increase advantage of encourage heavy brand consumer switching demand
outlets Reduce to level needed to retain hard core loyal
to Reduce to minimum level
Figure 6: Product Life-Cycle Characteristics, Objectives, and Strategies 2.5.1.3 Ansoff's Matrix (Planning for Growth) Ansoff's matrix, a well known marketing tool was first published in the Harvard Business Review (1957) in an article called ‘Strategies for Diversification’. It is used by marketers who have objectives for growth. This is also called the product/ market expansion grid. It is a portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification.
Figure 7: Ansoff's Product/ Market Matrix Market Penetration Market penetration is a strategy for company growth by increasing sales of current products to current market segments without changing the product. This is low price- high market share strategy. Improvements in advertising, prices, service, menu selection, or store design might encourage customers to stop by more often, stay longer, or to buy more during each visit.
Market Development Market development is a strategy for company growth by identifying and developing new market segments for current company products. For instance, managers could review new demographic markets. Exporting the product outside the country, or marketing in a new region the marketers could develop the market. Product Development Product development is a strategy for company growth by offering modified or new products to current market segments. Here, the marketers develop and innovate new product offerings to replace existing ones. Such products are then marketed to the existing customers. Diversification Diversification is a strategy for company growth through starting up or acquiring businesses outside the company’s current products and markets. There are two types of diversification, namely related and unrelated diversification. •
Related diversification is remaining in the market or industry with which the company is familiar. For example, a soup manufacturer diversifies into cake manufacturing (i.e. the food industry).
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Unrelated diversification is where the company has neither previous industry nor market experience. For example, a soup manufacturer invests in the rail business.
2.5.2 Strategies on Price Pricing is an important strategic issue because it is related to product positioning. Furthermore, pricing affects other marketing mix elements such as product features, channel decisions, and promotion. A pricing strategy is mostly influenced by the requirement for net income and the objectives for long term market control. There are many ways to price a product. They are:
Figure 8: The Pricing Strategy Matrix 2.5.2.1 Premium Pricing Premium pricing is a pricing policy when a high price is used where there is uniqueness about the product or service. This approach is used where a substantial competitive advantage exists. Such high prices are charge for luxuries such as Cunard Cruises, Savoy Hotel rooms, and Concorde flights.
2.5.2.2 Penetration Pricing Penetration pricing is the pricing technique of setting a relatively low initial entry price, often lower than the eventual market price, to attract new customers. The strategy works on the expectation that customers will switch to the new brand because of the lower price. Penetration pricing is most commonly associated with a marketing objective of increasing market share or sales volume, rather than to make profit in the short term. The price charged for products and services is set artificially low in order to gain market share. Once this is achieved, the price is increased. This approach was used by France Telecom and Sky TV. 2.5.2.3 Economy Pricing This is a no frills low price. The cost of marketing and manufacture are kept at a minimum. Supermarkets often have economy brands for soups, spaghetti, etc. The economy pricing helps the producers to retain its customers as it gives the customers the products at a low rate. 2.5.2.4 Price Skimming Price skimming is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, and then lowers the price over time. It is a temporal version of price discrimination/ yield management. It allows the firm to recover its sunk costs quickly before competition steps in and lowers the market price. Price skimming is sometimes referred to as riding down the demand curve. The objective of a price skimming strategy is to capture the consumer surplus. If this is done successfully, then theoretically no customer will pay less for the product than the maximum they are willing to pay.
2.5.3
Strategies on Place
Distribution (or place) is one of the important elements of marketing mix. An organization or set of organizations (go-betweens) involved in the process of making a product or service available for use or consumption by a consumer or business user. 2.5.3.1 Marketing channel (or distribution channel) Marketing channel or distribution channel is a set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user. 2.5.3.2 Number of Channel Levels Channel level is a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer. Because the producer and the final consumer both perform some work, they are part of every channel. The number of intermediary levels indicates the length of a channel. Figure 9 shows several consumer distribution channels of different lengths. There are two types of marketing channels. They are: direct marketing channel and indirect marketing channel. Direct Marketing Channel A direct marketing channel is a marketing channel that has no intermediary levels. The company sells directly to consumers. In Figure 9 & 10, Channel 1 is the example of direct marketing channel.
Producer
Producer
Producer
Wholesaler
Retailer
Retailer
Consumer
Consumer
Consumer
Zero-Level Channel
One Level Channel
Two Level Channel
Figure 9: Consumer Marketing Channels
Producer
Producer
Producer
Manufacturer’s representatives of sales branch
Business Distributor
Business Distributor
Business Customer
Business Customer
Business Customer
Zero-Level Channel
One Level Channel
Two Level Channel
Figure 10: Business Marketing Channels Indirect Marketing Channel An indirect marketing channel is a marketing channel containing one or more intermediary levels. In Figure 9 & 10, Channel 2 & 3 is the examples of indirect marketing channels. 2.5.3.3 Vertical Marketing System (VMS) Vertical marketing system is a distribution channel structure in which producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits even at the expense of profits for the system as a whole. One channel member owns the others, has contracts with
them, or wields so much power that they must all cooperate. The VMS can be dominated by the producer, wholesaler, or retailer.
Producer Wholesaler
Retailer
Consumer
Figure 11: Vertical Marketing Channel Corporate VMS Corporate VMS is a vertical marketing system that combines successive stages of production and distribution under single ownership – channel leadership is established through common ownership. 2.5.3.4 Types of Marketing Intermediaries A firm should identify the types of channel members available to carry out its channel work. The following three channel alternatives might emerge: •
Company sales force: Expand the company’s direct sales force. Assign outside sales people to territories and have them contact all prospects in the area, or develop separate company sales forces for different industries. Or, add an inside
telesales operations in which telephone salespeople handle small or midsize companies. •
Manufacturer’s agency: Hire manufacturer’s agents – independent firms whose sales forces handle related products from many companies – in different regions or industries to sell the new test equipment.
•
Industrial distributors: Find distributors in the different regions or industries who will buy and carry the new line. Give them exclusive distribution, good margins, product training, and promotional support.
2.5.3.5 Number of Marketing Intermediaries Companies must also determine the number of channel members to use at each level. Three strategies are available: intensive distribution, exclusive distribution, and selective distribution. •
Intensive Distribution: Intensive distribution is a strategy of stocking the product in as many outlets as possible. Producers of convenience products and common raw materials typically seek intensive distribution.
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Exclusive Distribution: Exclusive distribution is a strategy of giving a limited number of dealers the exclusive right to distribute the company’s products in their territories.
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Selective Distribution: Selective distribution is the use of more than one, but fewer than all, of the intermediaries who are willing to carry the company’s products.
2.5.3.6 Marketing Logistics (physical distribution) Marketing logistics is the tasks involved in planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit. 2.5.3.7 Supply Chain Management Supply chain management is managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, and final consumers.
In the past, physical distribution typically started with products at the plant and then tried to find low-cost solutions to get them to customers. However, today’s marketers prefer customer-centered logistics thinking, which starts with the marketplace and works backward to the factory, or even to source of supply.
Inbound Logistics Suppliers
Outbound Logistics Company
Resellers
Customers
Reserve logistics
Figure 13: Supply Chain Management 2.5.4
Strategies on Promotion
2.5.4.1 Marketing Communication Marketing communications are the means by which firms attempt to inform, persuade, and remind consumers – directly or indirectly – about the products and brands that they sell. In a sense, marketing communications represent the “voice” of the brand and are a means by which it can establish a dialogue and build relationships with consumers. Marketing communications perform many functions for consumers. Consumers can be told or shown how and why a product is used, by what kind of person, and where and when; consumers can learn about who makes the product and what the company and brand stand for; and consumers can be given an incentive for trial or usage. Marketing communications allow companies to link their brands to other people, places, events, brands, experiences, feelings, and things. Marketing communications can contribute to brand equity by establishing the brand in memory and crafting a brand image. Advertising
Sales Promotion
Print and Contests, games broadcast ads
Events/ Experiences
Public Relations
Personal Selling
Direct Marketing
Sports
Press kits
Sales presentations
Catalogs
Packagingouter
Sweepstakes, lotteries
Packaging inserts
Entertainment
Speeches
Sales meetings
Mailings
Premiums and Festivals gifts
Seminars
Incentive programs
telemarketing
Motion pictures
Sampling
Annual reports
Samples
Electronic shopping
Brochures and booklets
Fairs and trade Causes shows
Charitable donations
Fairs and TV shopping trade shows
Arts
Posters and Exhibits leaflets
Factory tours
Publications
Fax mail
Directories
Company museums
Community relations
Street activities
Lobbying
Voice mail
Demonstrations
Reprints of Coupons ads Billboards
Rebates
Identity media
Display signs
Low-interest financing
Company magazine
Point-ofpurchase displays
Entertainment
Audiovisual material
Trade-in allowances
Symbols and logos
Continuity programs
Videotapes
Tie-ins
Figure 14: Common Communication Platforms 2.5.4.2 Characteristics of the Marketing Communication Mix Each communication tool has its own unique characteristics and costs. Advertising Advertising can be used to build up a long-term image for a product or trigger quick sales. Advertising can efficiently reach geographically dispersed buyers. Certain forms of advertising (TV) can require a large budget, whereas other forms (newspaper) do not. Just the presence of advertising might have an effect on sales: Consumers might believe that a heavy advertised brand must offer “good value�. Because of the many forms and uses of advertising, it is difficult to make generalizations. Yet the following qualities of advertising can be noted:
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Pervasiveness: Advertising permits the seller to repeat a message many times. It also allows the buyer to receive and compare the messages of various competitors. Large-scale advertising says something positive about the seller’s size, power, and success.
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Amplified expressiveness: Advertising provides opportunities for dramatizing the company and its products through the artful use of print, sound, and color.
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Impersonality: The audience does not feel obligated to pat attention or respond to advertising. Advertising is monologue in front of, not a dialogue with, the audience.
Sales Promotion Companies use sales promotion tools – coupons, contests, premiums, and the like – to draw a stronger and quicker buyer response. Sales promotion can be used for short-run effects such as to highlight product offers and boost sagging sales. Sales promotion tools offer three distinctive benefits: •
Communication: They gain attention and may lead the consumer to the product.
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Incentive: They incorporate some concession, inducement, or contribution that gives value to the consumer.
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Invitation: they include a distinct invitation to engage in the transaction now.
Public Relations and Publicity Marketers tend to under use public relations, yet a well-thought-out program coordinated with the other communications-mix elements can extremely effective. The appeal of public relations and publicity is based on three distinctive qualities •
High credibility: News stories and features are more authentic and credible to readers than ads.
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Ability to catch buyers off guard: Public relations can reach prospects that prefer to avoid salespeople and advertisements.
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Dramatization: Public relations have the potential for dramatizing a company or product.
Events and Experiences There are many advantages to events and experiences: •
Relevant: A well-chosen event or experience can be seen as highly relevant as the consumers gets personally involved.
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Involving: Given their live, real-time quality, consumers can find events and experiences more actively engaging.
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Implicit: Events are more of an indirect “soft-sell”.
Direct Marketing The many forms of direct marketing – direct mail, telemarketing, and internet marketing – share three distinctive characteristics. Direct marketing is: •
Customized: The message can be prepared to appeal to the addressed individual.
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Up-to-date: A message can be prepared very quickly.
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Interactive: The message can be changed depending on the person’s response.
Personal Selling Personal selling is the most effective tool at larger stages of the buying process, particularly in building up buyer preference, conviction, and action. Personal selling has three distinctive qualities: •
Personal interaction: Personal selling involves an immediate and interactive relationship between two or more persons. Each party is able to observe the other’s reaction.
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Cultivation: Personal selling permits all kinds of relationships to spring up, ranging from a matter-of-fact selling relationship to a deep personal friendship.
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Response: Personal selling makes the buyer feel under some obligation for having listened to the sales talk.
2.5.4.3 Promotion Mix Strategies To sell an offering a firm must effectively promote and advertise it. There are two basic promotion mix strategies. They are: •
Push Strategy and
•
Pull Strategy.
Push Strategy Push strategy is a promotion strategy that calls for using the sales force and trade promotion to push the product through channels. The producer promotes the product to wholesalers, the wholesalers promote to retailers, and the retailers promote to consumers.
Producer marketing activities (Personal selling, trade Promotion, other) Producer
Reseller marketing activities (Personal selling, advertising, Sales promotion, other)
Retailers and Wholesalers
Consumers
Figure 15: Push strategy Pull Strategy Pull strategy is a promotion strategy that calls for spending a lot on advertising and consumer promotion to build up consumer demand. If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers.
Demand Producer
Demand Retailers and Wholesalers
Consumers
Producer marketing activities (consumer advertising, sales promotion, other )
Figure 16: Pull strategy 2.6
DEALING WITH COMPETITION
Another important aspect to marketing strategies is to deal with competition. In this, there are two strategies that the marketers use. They are: •
Strategies Based on Market Dominance and
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Porter’s Five Forces Model
2.6.1 Strategies Based on Market Dominance Firms competing in a given target market, at any point in time, differ in their objectives and resources. Some firms are large, others small. Some have many resources, others are strapped for funds. Some are old and established; others new and fresh. Some strive for rapid market share growth, others for long-term profits. And the firms occupy different competitive positions in the target market. In an industry firms can be classified based on their market share or dominance in an industry. Typically, there are four types of market dominance strategies. They are as follows:
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Market Leader
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Market Challenger
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Market Follower and
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Market Nicher.
Market Leader Strategies Expand total market Protect market share Expand market share
Market Challenger Strategies Full frontal attack Indirect attack
Market Follower Strategies Follow closely Follow at a distance
Market Nicher Strategies By customer, market, quality-price, service Multiple niching
Figure 17: Strategies based on Market Dominance 2.6.1.1 Market Leader The market leader is the firm with the largest market share in an industry. Most industries contain an acknowledged market leader. The leader has the largest market share and usually leads the other firms in price changes, new-product introductions, distribution coverage, and promotion spending. The leader may or may not be admired or respected, but other firms concede its dominance. Competitors focus on the leader as a company to challenge, imitate, or avoid. A leader’s life is not easy. It must maintain a constant watch. Other firms keep challenging its strengths or trying to take advantage of its weakness. The market leader can easily miss a turn in the market and plunge into second or third place. A product innovation may come along and hurt the leader. The leader might grow arrogant or complacent and misjudge the competition. Or the leader might look old-fashioned against new and peppier rivals. To remain number one, leading firms can take any of three actions. • First, they can find ways to expand total demand. •
Second, they can protect their current market share through good defensive and offensive actions.
•
Third, they can try to expand their market share further, even if market size remains constant.
Expanding the total Market The dominant firm normally gains the most when the total market expands. In general, the market leader should look for new customers or more usage from existing customers.
•
New customers: Every product class has the potential of attracting buyers who are unaware of the product or who are resisting it because of price or lack of certain features. A company can search for new users among three groups: those who might use it but do not, those who have never used it, or those who live elsewhere.
•
More usage: Usage can be increased by increasing the level of consumption or increasing the frequency of consumption. The amount of consumption can sometimes be increased through packaging or product design.
Defending Market Share While trying to expand total market size, the dominant firm must continuously defend its current business. The most constructive response is continuous innovation. The leader leads the industry in developing the new product and customer services, distribution effectiveness, and cost cutting. It keeps increasing its competitive strength and value to customers. A dominant firm can use six defense strategies:
(2) Flank (3) Preemptive ATTACKER
(4) Counter offensive
(1) Position
(6) Contraction
DEFENDER
(5) Mobile Figure 18: Six Types of Defense Strategies •
Position defense: Position defense involves occupying the most desirable market space in the minds of the consumers, making the brand almost impregnable.
•
Flank defense: The market leader should also erect outposts to protect a weak front or possibly serve as an invasion base for counterattack.
•
Preemptive attack: A more maneuver is to attack before the enemy starts its offense.
•
Counteroffensive defense: when attached, most market leaders will respond with a counterattack. In a counteroffensive, a leader can meet the attacker frontally or hit its flank or launch a pincer movement.
•
Mobile defense: in mobile defense, the leader stretches its domain over new territories that can serve as future centers for defense and offense through market broadening and market diversification.
•
Contraction defense: large companies sometimes recognize that they can no longer defend all of their territory. The best course of action then appears to be planned contraction (also called strategic withdrawal).
Expanding Market Share Market leaders can improve their profitability by increasing their market share. Gaining increased share in the served market, however, does not automatically produce higher profits – especially for labor-intensive service companies that mat not experience many economies of scale. Much depends on the company’s strategy. Because the cost of buying higher market share may far exceed its revenue value, a company should consider four factors before pursuing market share: •
The possibility of provoking antitrust action. Jealous competitors are likely to cry “monopoly” if a dominant firm makes further inroads. This rise in risk would diminish the attractiveness of pushing market share gains too far.
•
The cost of gaining further market share might exceed the value. The “holdout” customers may dislike the company, be loyal to competitive suppliers, have unique needs, or prefer dealing with smaller suppliers. The cost of legal work, public relation, and lobbying rises with market share.
•
Pursuing the wrong marketing-mix strategy. Companies successfully gaining share typically outperform competitors in three areas: new-product activity, relative product quality, and marketing expenditures. Companies that cut prices more deeply than competitors typically do not achieve significant gains, as enough rivals meet the price cuts and others offer other values so that buyers do not switch.
•
The effects of increased market share on actual and perceived quality. Too many customers can put a strain on the firm’s resources, hurting product value and service delivery.
2.6.1.2 Market Challenger The market challenger is a runner-up firm that is fighting hard to increase its market share in an industry. Firms that are second, third, or lower in an industry are sometimes quite large. These runner-up firms can adopt one of two competitive strategies: They can challenge the leader and other competitors in an aggressive bid for more market share (market challengers). Or they can play along with competitors and not rock the boat (market followers).
A market challenger must first define which competitors to challenge and its strategic objective. The challenger can attack the market leader. This is a high-risk but potentially high-gain strategy that makes good sense if the leader is not serving the market well. To succeed with such an attack, a company must have some sustainable competitive advantage over the leader. This might be a cost advantage leading to lower prices or the ability to provide better value at premium price. If the company goes after the market leader, its objective may be to wrest a certain market share. Or the challenger’s goal might be to take over market leadership. Alternatively, the challenger can avoid the leader and instead challenge firms its own size, or smaller local and regional firms. The challenger must choose its opponents carefully and have a clearly defined and attainable objective. Defining the Strategic Objective and Opponent(s) A market challenger must first define its strategic objective. Most aim to increase market share. The challenger must decide whom to attack. There are three ways to attack. Such as: •
It can attack the market leader.
•
It can attack firms of its own size that are not doing the job and are underfinanced.
•
It can attack small local and regional firms.
Choosing a General Attack Strategy Given clear opponents and objectives, what attack options are available? We can distinguish among five attack strategies: frontal, flank, encirclement, bypass, and guerilla attack. •
Frontal attack: in a pure frontal attack, the attacker matches its opponent’s product, advertising, price, and distribution. A modified frontal attack, can work if the market leader does not retaliate and if the competitor convinces the market that its products is equal to the leader’s.
•
Flank attack: An enemy’s weak spots are natural targets. A flank attack can be directed along two strategic dimensions – geographic and segmental.
•
Encirclement attack: the encirclement maneuver is an attempt to capture a wide slice of the company’s territory through a “blitz”. It involves launching a grand offensive on several fronts.
•
Bypass attack: Bypass attack means bypassing the enemy and attacking easier markets to broaden one’s resource base. This strategy offers three lines of
approach: diversifying into unrelated product, diversifying into new geographical markets, and leapfrogging into new technologies to supplant existing products. •
Guerilla attack: Guerilla warfare consists of waging small, intermittent attacks to harass and demoralize the opponent and eventually secure permanent footholds.
Choosing a Specific Attack Strategy The challenger must go beyond the five broad strategies and develop more specific strategies: •
Price discount: the challenger can offer a comparable product at a lower price. This is the strategy of discount retailers.
•
Lower price goods: the challenger can offer an average – or lower-quality product at a much lower price.
•
Value-priced goods and services: In recent years some companies are combining low prices and high quality to snag market share from market leaders.
•
Prestige goods: A market challenger can launch a higher-quality product and charge a higher price than the leader.
•
Product proliferation: The challenger can attack the leader by launching a larger product variety, thus giving buyers more choice.
•
Product innovation: the challenger can pursue product innovation.
•
Improved services: The challenger can offer new or better services to customers.
•
Distribution innovation: A challenger might develop a new channel of distribution.
•
Manufacturing-cost
reduction:
The
challenger
might
achieve
lower
manufacturing costs than its competitors through more efficient purchasing, lower labor costs, and more modern production equipment. •
Intensive advertising promotion: Some challengers attack the leaders by increasing expenditures on advertising and promotion.
2.6.1.3 Market Follower The market follower is a runner-up firm that wants to hold its share in an industry without rocking the boat. Not all runner-up companies want to challenge the market leader. Challengers are never taken lightly by the leader. If the challenger’s lure is lower prices, improved services, or additional product features, the leader can quickly match these to defuse the attack. The leader probably has more staying power in an all-out battle for customers. Thus, many firms prefer to follow rather than challenge the leader.
A follower can gain many advantages. The market leader often bears the huge expenses of developing new products and markets, expanding distribution, and educating the market. By contrast, the market follower can learn from the leader’s experiences. It can copy or improve on the leader’s products and programs, usually with much less investment. Although the follower will probably not overtake the leader; if often can be as profitable. Following is not the same as being passive or a carbon copy of the leader. A market follower must know how to hold current customers and win a fair share of new ones. It must find the right balance between following closely enough to win customers from the market leader but following at enough of a distance to avoid retaliation. Each follower tries to bring distinctive advantages to its target market – location, services, financing. Because the follower is often a major target of attack by challengers, it must keep its manufacturing costs low and its product quality and services high. Four broad strategies can be distinguished: •
Counterfeiter: The counterfeiter duplicates the leader’s product and package and sells it on the black market or through disreputable dealers.
•
Cloner: The cloner emulates the leader’s products, name, and packaging with slight variations.
•
Imitator: The imitator copies some things from the leader but maintain differentiation in terms of packaging, advertising, pricing, or location. The leader does not mind the imitator as long as the imitator does not attack the leader aggressively.
•
Adapter: The adapter takes the leader’s products and adapts or improves them. The adapter may choose to sell to different markets, but often the adapter grows into the future challenger.
2.6.2
Porter’s Five Forces Model
Analyzing the environment - Five Forces Analysis Five forces analysis helps the marketer to contrast a competitive environment. It has similarities with other tools for environmental audit, such as PEST analysis, but tends to focus on the single, stand alone, business or SBU (Strategic Business Unit) rather than a single product or range of products. For example, Dell would analyze the market for Business Computers i.e. one of its SBUs. Five forces analysis looks at five key areas namely: •
The threat of entry
•
The power of buyers
•
The power of suppliers
•
The threat of substitutes and
•
Competitive rivalry.
Figure 19: Porter’s Five Forces Model 2.6.2.1 The Threat of Entry • Economies of scale e.g., the benefits associated with bulk purchasing. •
The high or low costs of entry, e.g., how much will it cost for the latest technology?
•
Ease of access to distribution channels e.g., do our competitors have the distribution channels sewn up?
•
Cost advantages not related to the size of the company e.g., personal contacts or knowledge that larger companies do not own or learning curve effects.
•
Will competitors retaliate?
•
Government action e.g., will new laws be introduced that will weaken our competitive position?
•
How important is differentiation? e.g., The Champagne brand cannot be copied. This desensitizes the influence of the environment.
2.6.2.2 The Power of Buyers •
This is high where there a few, large players in a market, e.g., the large grocery chains.
•
If there are a large number of undifferentiated, small suppliers, e.g., small farming businesses supplying the large grocery chains.
•
The cost of switching between suppliers is low, e.g., from one fleet supplier of trucks to another.
2.6.2.3 The Power of Suppliers
•
The power of suppliers tends to be a reversal of the power of buyers.
•
Where the switching costs are high, e.g., switching from one software supplier to another.
•
Power is high where the brand is powerful e.g., Cadillac, Pizza Hut, Microsoft.
•
There is a possibility of the supplier integrating forward e.g., Brewers buying bars.
•
Customers are fragmented (not in clusters) so that they have little bargaining power e.g., Gas/ Petrol stations in remote places.
2.6.2.4 The Threat of Substitutes •
Where there is product-for-product substitution, e.g., email for fax where there is substitution of need e.g., better toothpaste reduces the need for dentists.
•
Where there is generic substitution (competing for the currency in your pocket), e.g., video suppliers compete with travel companies.
•
We could always do without e.g., cigarettes.
2.6.2.5 Competitive Rivalry •
This is most likely to be high where entry is likely; there is the threat of substitute products, and suppliers and buyers in the market attempt to control. This is why it is always seen in the center of the diagram.
2.7
PORTER’S GENERIC STRATEGY
Generic strategies were used initially in the early 1980s, and seem to be even more popular today. If the primary determinant of a firm’s profitability is the attractiveness of the industry in which it operates, an important secondary determinant is its position within that industry. Even though an industry may have below-average profitability, a firm that is optimally positioned can generate superior returns. A firm positions itself by leveraging its strengths. Michael Porter has argued that a firm’s strengths ultimately fall into one of two headings: cost advantage and differentiation. By applying these strengths in either a broad or narrow scope, three generic strategies result: cost leadership, differentiation, and focus. These strategies are applied at the business unit level. They are called generic strategies because they are not firm or industry dependent.
Figure 20: Porter’s Generic Strategy
The generic strategies are:
2.7.1
•
Cost leadership
•
Differentiation and
•
Focus.
Cost Leadership
This generic strategy calls for being the low cost producer in an industry for a given level of quality. The firm sells its products either at average industry prices to earn a profit higher than that of rivals, or below the average industry prices to gain market share. In the event of a price war, the firm can maintain some profitability while the competition suffers losses. Even without a price war, as the industry matures and prices decline, the firms that can produce more cheaply will remain profitable for a longer period of time. The cost leadership strategy usually targets a broad market. Some of the ways that firms acquire cost advantages are by improving process efficiencies, gaining unique access to a large source of lower cost materials, making optimal outsourcing and vertical integration decisions, or avoiding some costs altogether. If competing firms are unable to lower their costs by a similar amount, the firm may be able to sustain a competitive advantage based on cost leadership. Firms that succeed in cost leadership often have the following internal strengths:
•
Access to the capital required making a significant investment in production assets; this investment represents a barrier to entry that many firms may not overcome.
•
Skill in designing products for efficient manufacturing, for example, having a small component count to shorten the assembly process.
•
High level of expertise in manufacturing process engineering.
•
Efficient distribution channels.
Each generic strategy has its risks, including the low-cost strategy. For example, other firms may be able to lower their costs as well. As technology improves, the competition may be able to leapfrog the production capabilities, thus eliminating the competitive advantage. Additionally, several firms following a focus strategy and targeting various narrow markets may be able to achieve an even lower cost within their segments and as a group they can gain significant market share as deserved.
2.7.2
Differentiation Strategy
A differentiation strategy calls for the development of a product or service that offers unique attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition. The value added by the uniqueness of the product may allow the firm to charge a premium price for it. The firm hopes that the higher price will cover more than the extra costs incurred in offering the unique product. Because of the product's unique attributes, if suppliers increase their prices the firm may be able to pass along the costs to its customers who cannot find substitute products easily. Firms that succeed in a differentiation strategy often have the following internal strengths: •
Access to leading scientific research.
•
Highly skilled and creative product development team.
•
Strong sales team with the ability to successfully communicate the perceived strengths of the product.
•
Corporate reputation for quality and innovation.
The risks associated with a differentiation strategy include imitation by competitors and changes in customer tastes. Additionally, various firms pursuing focus strategies may be able to achieve even greater differentiation in their market segments.
2.7.3
Focus Strategy
The focus strategy concentrates on a narrow segment and within that segment attempts to achieve either a cost advantage or differentiation. The premise is that the needs of the group can be better serviced by focusing entirely on it. A firm using a focus strategy often enjoys a high degree of customer loyalty, and this entrenched loyalty discourages other firms from competing directly. Because of their narrow market focus, firms pursuing a focus strategy have lower volumes and therefore less bargaining power with their suppliers. However, firms pursuing a differentiation-focused strategy may be able to pass higher costs on to customers since close substitute products do not exist. Firms that succeed in a focus strategy are able to tailor a broad range of product development strengths to a relatively narrow market segment that they know very well. Some risks of focus strategies include imitation and changes in the target segments. Furthermore, it may be fairly easy for a broad-market cost leader to adapt its product in order to compete directly. Finally, other focusers may be able to carve out sub-segments that they can serve even better. 2.8
OTHER MARKETING STRATEGIES
Beside these strategies, there are some other marketing strategies that the marketers follow. Some of them are listed below:
2.8.1
•
Arthur D Little (ADL) Strategic Condition Matrix
•
Boston Matrix
The Arthur D Little (ADL) Strategic Condition Matrix Although now slightly dated at first glance, The Arthur D Little (ADL)
Strategic Condition Matrix offers a different perspective on strategy formulation. ADL has two main dimensions - competitive position and industry maturity. Competitive position is driven by the sectors or segments in which a Strategic Business Unit (SBU) operates. The product or service which it markets, and the accesses it has to a range of geographically dispersed markets that are what makes up an organization’s competitive position i.e., product and place.
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be renamed an ‘industry life cycle’. Of course not only industries could be considered here but also segments.
Figure 21: The ADL Competitive Position/Industry Maturity Matrix It is a combination of the two aforementioned dimensions that helps us to use ADL for marketing decision-making. Now let’s consider options in more detail. Competitive position has five main categories: •
Dominant: This is a particularly extraordinary position. Often this is associated with some form of monopoly position or customer lock-in e.g., Microsoft Windows being the dominant global operating system.
•
Strong: Here companies have a lot of freedom since position in an industry is comparatively powerful e.g., Apple's i Pod products.
•
Favourable: Companies with a favourable position tend to have competitive strengths in segments of a fragmented market place. No single global player controls all segments. Here product strengths and geographical advantages come into play.
•
Tenable: Here companies may face erosion by stronger competitors that have a favourable, strong or competitive position. It is difficult for them to compete since they do not have a sustainable competitive advantage.
•
Weak: As the term suggests companies in this undesirable space are in an unenviable position. Of course there are opportunities to change and improve, and therefore to take an organization to a more favourable, strong or even dominant position.
2.8.2
The Boston Matrix Like Ansoff's matrix, the Boston Matrix is a well known tool for the
marketing manager. It was developed by the large US consulting group and is an approach to product portfolio planning. It has two controlling aspect namely relative market share (meaning relative to your competition) and market growth. You would look at each individual product in your range (or portfolio) and place it onto the matrix. You would do this for every product in the range. You can then plot the products of your rivals to give relative market share.
Figure 23: The Boston Matrix This is simplistic in many ways and the matrix has some understandable limitations that will be considered later. Each cell has its own name as follows. Dogs These are products with a low share of a low growth market. These are the canine version of ‘real turkeys!’. They do not generate cash for the company, they tend to absorb it. Get rid of these products. Cash Cows These are products with a high share of a slow growth market. Cash Cows generate more than is invested in them. So keep them in your portfolio of products for the time being. Problem Children
These are products with a low share of a high growth market. They consume resources and generate little in return. They absorb most money as you attempt to increase market share. Stars These are products that are in high growth markets with a relatively high share of that market. Stars tend to generate high amounts of income. Keep and build your stars. Look for some kind of balance within your portfolio. Try not to have any Dogs. Cash Cows, Problem Children and Stars need to be kept in a kind of equilibrium. The funds generated by your Cash Cows are used to turn problem children into Stars, which may eventually become Cash Cows. Some of the Problem Children will become Dogs, and this means that you will need a larger contribution from the successful products to compensate for the failures.
3.1 SAMPLE ENTERPRISE AT A GLANCE Singer Bangladesh Limited has been operating in this region (now in Bangladesh) since 1905, when the first Singer sewing machines went on sale at Chittagong and Dhaka shops. Beginning with the sewing machine, Singer's product portfolio has diversified to encompass a highly successful multi-brand strategy combining products of top world marques with the company's own products across a range of household, industrial and financial categories. Singer Bhold BV is the majority shareholder in the company, holding a stake of 80%. The public shareholding accounts for 20%. Singer Bangladesh Limited was listed with the Dhaka Stock Exchange in 1983 and Chittagong Stock Exchange in 2001. 3.1.1
The Corporate Statements of Singer Bangladesh Limited
The Singer Company virtually began its business with the above statement. They were the first to introduce the “hire-purchase scheme�, whereby customers could buy the product now, and pay later. Singer began with a customer-oriented culture which was rare at that time. This is reflected in the company's vision, mission, and value statements. 3.1.1.1 Vision To be the most admired and respected family company in the country. Singer Bangladesh Limited has been successful in realizing this vision by creating a lasting brand name in every household all over the world.
3.1.1.2 Mission Our mission is to improve the quality of life by providing comforts and conveniences at affordable prices. The mission statement emphasizes on the company's inclination towards fulfilling the need of the people, by offering them a novel set of quality products at a reasonable cost. A vision becomes tangible as a mission statement. This statement has some parts, those are listed below: •
Improve the life of people.
•
Providing comfort and conveniences.
•
Affordable price.
Last but not in the least, •
Providing service generation to generation.
3.1.1.3 Value To treat our employees, recognizing them as assets of the company to honor and maintain high ethical standards. 3.1.1.4 Objective To be the market leader in our Product range and Market Segment. Provide the consumers with the Best Service & Shopping Experience in the Country. Provide the consumers with Products of Latest Technology. Develop the Employees to achieve their real potential. Provide the Shareholders with steady Asset Growth and Return on investment above the Industry Norm. Grow the Revenue and Profits at a rate above the Industry Norm. 3.1.1.5 Management Strategy Singer Bangladesh consistently focuses on growth and risk minimization through product diversification and increasing the market share of existing products by responding to changing customer needs.
3.1.2
Singer: History
Since 1851, the name Singer has been synonymous with sewing. The spirit of practical design and creative innovation that characterized the company at its beginning continues today as we
develop products for every level of sewing. They have celebrated many firsts, including the world's first zigzag machine, the first electronic machines and we now proudly produce the world's most advanced home sewing and embroidery machine. From home décor and clothing construction to embroidery and quilting, SINGER® is dedicated to help people express themselves through sewing. By turn of the century, many exciting developments had taken place within Singer Manufacturing Company. In 1885, Singer introduced the first electric sewing machine. By 1890, the company claimed an 80 percent worldwide market share, with sales heading towards 1,350,000 machines. In 1904, a separate subsidiary, the Singer Sewing Machine Company, was established to handle sales and distribution in the Western Hemisphere and beyond. At this point, Singer’s rich heritage had become firmly established around the world. In 1960 Singer Corporation brought a change in the business philosophy of the company. After dedicating more than a hundred years to manufacturing and marketing one single product – the sewing machine -- Singer began diversification of its product range. It acquired Packard Bell Electronics in 1966 and General Precision Equipment Corporation in 1968. Singer's manufacturing base of electronic and electrical products gradually spread in Asia, East Africa, Middle East, Latin and South America. Today Singer's name is synonymous with household goods across the World
3.1.2.1 150 Years Celebration In 2001 Singer celebrated the 150th Anniversary of Isaac Singer's patent on the first practical sewing machine. This anniversary marked the official beginning of Singer as a company and its leadership in the industry from the start, a great accomplishment. Singer's leadership has remained to this day due to our continued commitment to quality, reliability, innovation and service. 3.1.2.2 Singer Bangladesh Limited: History 100 Years of Operation in Bangladesh The presence of SINGER in Bangladesh dates back to the British Colonial era when the country was a part of the Indian sub continent. The first operation of Singer in Bangladesh
began more than 100 years ago, i.e., in the year 1905. Later two sales centers were set up in Dhaka and in Chittagong. After the partition of the sub-continent in 1947, Singer in East Pakistan operated as a branch of Singer Pakistan. With the emergence of Bangladesh on December 16, 1971, the East Pakistan Branch Office was elevated to a Country Office. A change in the investment policy in 1979 created new business opportunities and Singer registered as an operating company. In 1983 the company was listed with Dhaka Stock Exchange (DSE) and in 2001, it was also listed with the Chittagong Stock Exchange. 3.2
ANALYSIS OF FINDINGS
Singer Bangladesh Limited is a successful multinational company. It operates its operations in many countries. In South Asia it operates its operations in Bangladesh, India, Srilanka and Pakistan. It follows its marketing strategies almost same all over the world. Singer Bangladesh Limited mainly concentrates on selling goods on credit. In Singer’s term it is called “hire purchase”. In this system the product can be bought by paying a small amount of money, named “down payment”, and the rest on some equal monthly installments. Only a very few companies in Bangladesh follow this strategy. 3.2.1
Multi Branding
With introduction of Singer plus stores Singer stepped into multi-branding in 2005. The concept of Singer plus stores is to provide valued customers with a variety of choice under the same roof. Singer is offering products of world famous brands along with Singer branded products at Singer plus stores. They are as follows: •
Haier
•
Whirlpool
•
Hitachi
•
MEG.XL
•
Kodak
•
Philips
•
Emeishan
•
Moulinex
•
Sebec and
• 3.2.2
Yashica.
The Functioning Departments of Singer Bangladesh Limited
Singer Bangladesh Limited is a well functioning multi national company that operates successfully in too many countries of the world. In Bangladesh they follow the international standards to operate. They have as many as five functioning departments. They are as follows:
Department
HRM
Marketing
Manufacturing
Finance
Marketing Services
Human Resources Department The Human Resources Department of Singer Bangladesh Limited is divided into three divisions. They are: •
HR Management
•
Legal and Administration
•
Training & Development.
Marketing Department The Marketing Department of Singer Bangladesh Limited is divided into three divisions. They are: •
Sales
•
Distribution
•
Sewing School.
The sales division is divided again into two major wings. They are: o
o
National Sales (Retail):
Area Manager
District Manager
Shop Manager.
National Sales (Wholesale): Domestic Dealer Industrial Dealer.
Manufacturing Department Singer set up its first manufacturing facility for sewing machines in 1980 at Chittagong. In 1993 Singer’s product range was enhanced with the establishment of a new Audio Video Plant at a rented premise at Savar near Dhaka. Singer’s complex at Savar assembles the following products: •
Colour Television
•
Motor Cycle (80cc, 100cc, 110 cc & 125cc)
•
Electric Cable.
Finance Department This department is responsible for ensuring optimum and most efficient uses of the company's resources through various controlling and monitoring activities. The department can be divided into the following: •
Credit Management
•
Accounts Management
•
Corporate Affairs
•
Commercial
•
Audit
•
MIS (Management Information System).
Marketing Services Department The head of this department, the Marketing Services Director, has three sub-sections management team under him. They are: •
Product Management
•
Advertisement & Sales Promotion
•
Service Center.
The Product Department does the following activities of importing:
3.2.3
•
Planning
•
Designing
•
Scheduling
•
Price negotiation.
•
Maintaining communication with exporter.
Product Area
Product Sewing Machine: Zigzag Straight Stitch Refrigerator Color TV Washing Machine Air Conditioner Fan Steam and Dry Iron Micro-wave Oven Electric Oven Rice Cooker Computer Instant Power Supply Gas Burner Motor Cycle DVD Player Small Appliance Electric Kettle Generator Voltage Stabilizer Home Theater Room Heater Water Heater Figure 25: Product Area of Singer There are many ways to price a product. Among them Singer Bangladesh Limited follows the premium pricing strategy. That means it provides the most quality products to its customers. In the return they charge the highest price. This is the case of them most of the times. The Product Variation and Cash Price Structure Product
Model Singer Hand Comp. (With Wooden Cover) Singer Hand Comp. (With Styrene Cover) Sewing Machine Singer Foot Comp. (With Wooden Cover) Singer Foot Comp. (Without Wooden Cover) Electric Sewing Machine (2008) SS-125T-3 – Scooter SM-125 (AW) FMS-100-E (Emeishan) SM-110 (AW) Motor Cycle SM-100-3 SM-100-4 SM-110 SM-125 SM-80 CTV – LCD SLD-3218CV SCT29189 (Flat) CTV – Large Screen SCT25189 (Flat) CTV – Regular SCT14211NTC / [SCT14E10NTC] (Normal)
Retail Price 4450 4250 6175 5750 9900 62000 85000 60000 77000 67000 62500 66000 71000 54200 95000 31900 23900 9250
Screen DVD Freezer
Refrigerator
Electric Oven Microwave Oven Blender Food Processor Toaster Rice Cooker Electric Kettle AC – Window AC – Split Washing Machine Dish Washer
Fan Rangers
IPS Generator
SCT21N11NTC / [SCT21E09NTC] (Normal) SCT21A71PTC /[SCT21E10PTC] (Flat) SN14D4 / SN14D7 (Normal) SN20D4 / SN20D7 (Normal) SF2132 / SF21U6 (Flat) SDV-225BVT TCF651H SFC-100LXX SFC-142LXX SFC-215LXX DF2-AC-DBP HRF-232S FR-AC-DGV DF2-23S SDC-170S SDC180SGRO SDC185SGHM SDC260SGKE SDC290SGKE SHR 250 SRD26DC4SB ALD82M ALD82MV ALD82MSS ALD112M ALD112MV ALD112MSS KTH-34RC KTH-23RC SMW9AL30 SMW9ALD30 Electric Blender – SKA-2005 Hand Blender – SKA-1001 SKA-3002 SKA-4001 SRC-180HP PRISMA-1.0 SAW18CRMD SAS-12H10CGA SAS-18SODGA SAS-24SODGA SWM6098R STS60NDA (New) STS60KDA (Old) Classic – 52” 4 B Supreme – 56” 4 B Singer Deluxe – 56” Stand Fan – SFS-40DXI Table Fan – SFT-40CXI Wall Fan – SFW-40BXI SIPS-500F SIPS-1000F SPG0750GHH
13350 16000 10500 14750 17750 5000 25500 18800 20800 25000 22500 24500 24500 23000 17500 20500 23500 30700 33400 26000 30500 28000 29200 32990 34100 35490 39500 5200 4250 8700 10200 2200 850 4150 1200 1850 650 34500 35600 47500 59950 20000 7000 7000 3200 2300 1750 2500 1950 1750 28000 49000 6500
Gas Generator Iron Gas Burner Room Heater
Water Heater Vacuum Cleaner Voltage Stabilizer Hair Clipper Notion Box
SPG1000 GHH SPG2000 GHH SPG2500 GHH SPG2500 GHH (E/S) HHG2500 HHG6500 SHD-7701 SHD-168 BTTX5128BTX SHR-1040SZ SHR-1032SZ SHR-1021SZ SHR-1602KS SHR-1601KS 15 Gallon 20 Gallon SVCQZ12BMD (1200 Watt) SS100S SS80S SHP4607CI
With Internet Without Internet Singer Head Hand Attachment Wooden Base Wooden Cover Machine Styrene Base & Cover Hammer Foot Bobbin Case Stand Table Electric Motor Singer Oil
Wireless Telephone
Sewing Accessories
Figure 26: The Product Variation and Cash Price Structure 3.2.2
The Five Levels of a Product
10000 13500 15500 17000 22000 47500 700 800 3500 1500 3000 2400 2000 3000 5800 6800 8000 4600 2400 2650 560 2800 2500 3400 250 375 425 750 25 225 1750 600 1150 25
Figure 27: The Five Levels of Products of Singer There are five levels of a product. Such as: Core Product, Basic Product, Expected Product, Augmented Product and Potential Product. •
Core Product: For Core Product Singer Bangladesh Limited gives much type of benefits. For television it gives enjoyment, for refrigerator it gives cooling and storing and too many core or chief benefit. It varies form product to product.
•
Basic Product: For Actual Product it gives its customers the product itself.
•
Expected Product: For expected product, the Singer prepares an expected product, a set of attributes and conditions buyers normally expect when they purchase this product. Customers expect a clean shop, and a relative degree of quiet environment.
•
Augmented Product: For Augmented Product Singer Bangladesh Limited gives its customers the after sales services, the warranty, the guarantee, etc.
•
Potential Product: The potential product of Singer, which encompasses all the possible augmentations and transformations the product or offering had undergone in the future. Here is where Singer searches for new ways to satisfy customers and distinguish its offers.
3.2.3
The Product Life Cycle (PLC)
There are four major stages in the Product Life Cycle. They are Introduction, Growth, Maturity, and Decline. Singer Bangladesh Limited lies on the growth stage of its operations. The competitors have attracted into the market with very similar offerings. •
Introduction: Only Personal Computers and Laptops of Singer Bangladesh Limited fall in the introduction stage.
Figure 28: The Product Life Cycle of Singer Products •
Growth: Most of the products of Singer Bangladesh Limited fall in this stage. They are – Washing Machine, Air Conditioner, Steam and Dry Iron, Micro-wave Oven, Rice Cooker, Instant Power Supply, Gas Burner, Motor Cycle, DVD Player, Small Appliance, Electric Kettle, Generator and Voltage Stabilizer.
•
Maturity: Only a few products of Singer Bangladesh fall in this stage. They are – Sewing Machine (Zigzag and Straight Stitch), Refrigerator, Color Television, Fan, Room Heater and Water Heater.
•
3.2.4
Decline: No products of Singer Bangladesh Limited fall in this stage.
Ansoff's Matrix (Planning for Growth)
Ansoff’s Matrix tells us that there are four positions that can be present. They are – Market Penetration, Market Development, Product Development, and Diversification. As the world is now dynamic and there is too much competition among the competitors, Singer Bangladesh Limited copes up with almost all the strategies above. It also fights to retain its present product with the thinking of new product developments. On the other hand, Singer Bangladesh Limited thinks about the current market with the new market as well. •
Market Penetration: Singer Bangladesh Limited follows the penetration strategy for some of its products. The products are – Motor Cycle, Instant Power Supply, etc. These products are kept relatively lower price to capture the larger market share. Singer Bangladesh Limited is also improving its advertising, prices, service, menu selection, or store design to encourage customers to stop by more often, stay longer, or to buy more during visit.
•
Market Development: Singer Bangladesh Limited also copes with the market development strategy. It has created new and more potential markets for most of its products. For an example, most of its products like, Refrigerator, Color
Television, Electric Oven, Micro-wave Oven, etc., have now many variations. The price structure has so much variety. It is done only to attract most types of the customers. •
Product Development: Singer Bangladesh Limited also developed some of its products to capture the whole market. It is adopting the new technologies and trying to develop its products more and more.
•
Diversification: Singer Bangladesh Limited has also diversification strategy. With selling the sewing machines it has opened up a sewing machine training school.
3.2.5
Distribution of Singer Bangladesh Limited
Singer Bangladesh Limited is a concern of its mother organization Singer Asia. Only Colour Television and Motor Cycle (80cc, 100cc, 110 cc & 125cc) are assembled in Bangladesh and Electric Cable is made by Bangladesh at Savar. The all other products are made and also assembled outside.
3.2.5.1 Channel Level Singer Bangladesh Limited uses two types of channel level (a layer of intermediaries) to perform some work in bringing the product and its ownership closer to the final buyer. One is consumer marketing channel and another is business marketing channel. Consumer Marketing Channel Singer Bangladesh Limited uses the following marketing channel to distribute its products to its final consumer or end users. Each and every one of the level is the employee of Singer. Singer controls the whole channel.
Producer
Wholesaler
Retailer
Consumer
Figure 29: Consumer Marketing Channel of Singer Business Marketing Channel Singer Bangladesh Limited uses the following marketing channel to distribute its products to its business customers. Here also, each and every one of the level is the employee of Singer. Singer controls the whole channel.
Producer
Manufacturer’s representatives of sales branch
Business Distributor
Business Customer Figure 30: Business Marketing Channel of Singer 3.2.5.2 Selective Distribution vs. Exclusive Distribution
Singer Bangladesh Limited uses two types of distributions, like, selective distribution and exclusive distribution. •
Selective Distribution: In the main two cities of Bangladesh, Dhaka and Chittagong, it uses selective distribution.
•
Exclusive Distribution: On the other hand, in the other districts, like, Comilla, Chandpur, Rangamati, Coxsbazaar, etc., it uses exclusive distribution.
3.2.5.3 Vertical Marketing System (VMS) Singer Bangladesh Limited uses the vertical marketing system (VMS). It has a distribution channel structure in which producers, wholesalers, and retailers, each a separate business seek to maximize its own profits even at the expense of profits for the system as a whole.
Producer Wholesaler
Retailer
Consumer
Figure 31: Vertical Marketing System (VMS) of Singer
There are three major types of VMS. Such as – Corporate VMS, Contractual VMS and Administered VMS. Among them, Singer Bangladesh Limited follows the Corporate VMS. Here the distribution system is so that combines successive stages of production and distribution under single ownership (Singer Bangladesh Limited) – channel leadership is established through the common ownership. 3.2.6
Strategies on Promotion
There are two types of promotional strategies. Such as: Push Strategy and Pull Strategy. Singer Bangladesh Limited follows two of the above. It varies from product to product. Push Strategy: The high involvement products normally require push strategy. Singer Bangladesh Limited follows the push strategy for these high involvement products. For an example, we can say that for the high involvement products, like, air conditioner, refrigerator and motor cycle Singer Bangladesh Limited takes the push strategy.
Producer marketing activities (Personal selling, trade Promotion, other)
Reseller marketing activities (Personal selling, advertising, Sales promotion, other) Shop
Singer
Consumers
Figure 32: Push Strategy of Singer Pull Strategy: The other products which are relatively low involvement products require pull strategy. Singer Bangladesh Limited follows the pull strategy for those products. For an example, we can say that for the low involvement products, like, fan, small appliance and rice cooker Singer Bangladesh Limited takes the pull strategy.
Demand Singer
Demand Shop
Consumers
Producer marketing activities (consumer advertising, sales promotion, other )
Figure 33: Pull Strategy of Singer 3.2.7
Strategies Based on Market Dominanc
There are four types of market dominance strategies. Such as: Market Leader, Market Challenger, Market Follower, and Market Nicher. Singer Bangladesh Limited is the market leader for most of the products in the electronic goods manufacturing and selling industry in Bangladesh. They have the highest market share of this sector. The Major Competitors of Singer Bangladesh Limited (Product-wise) Market Leader
Market Challenger
Singer
There is no competitor
Singer
Butterfly
There is no other competitor
Singer Sony Singer Singer Tongi Singer
Samsung Singer Whirlpool General Singer Sebec
Micro-wave Oven
Singer
LG Butterfly
LG Butterfly Philips General LG Habib Moulinex Electra International
Electric Oven
Singer
Rice Cooker
Singer
Transcom Electronics Sebec
Philips Samsung LG Butterfly Toshin National Philips Transcom Electronics Electra International Galanz
Instant Power Supply Motor Cycle DVD Player Small Appliance Voltage Stabilizer Home Theater
Rahimafroz Bazaz Sony Singer Singer Sony
Navana Yamaha Singer LG Butterfly LG Butterfly Singer
Singer Hero Honda Samsung Sony Philips Samsung
Sebec Singer Philips Miyako Samsung LG Butterfly
Product Sewing Machine: Zigzag Sewing Machine: Straight Stitch Refrigerator Color TV Washing Machine Air Conditioner Fan Steam and Dry Iron
Market Follower
Figure 34: The Major Competitors of Singer (Product-wise) 3.2.7
Porter’s Five Forces Model
Market Nicher
LG Butterfly Miyako
In the Five Forces Model of Michael Porter there are as many as five elements. Such as: The Threat of Entry, The Threat of Substitutes, The Power of Suppliers, The Power of Buyers, and Competitive Rivalry. Singer Bangladesh Limited has all of them.
Figure 35: Porter’s Five Forces Analysis of Singer •
Firstly, it has the threats of new entry. As this sector earns a lot of money, anytime some new entrants may enter.
•
Secondly, there are also the threats of the substitute products. There is new innovation is occurring day by day and this threat is increasing.
•
Thirdly, the suppliers hold power. Recently, Korea is not responding too much as the economic depression is intense and they are giving pressure to sell only the costly products.
•
Fourthly, there is also the power of the buyers. The buyers are always pressing the company to have more quality with lower prices.
• 3.2.9
Lastly, there is also a strong rivalry among the competitors.
Porter’s Generic Strategy
There are mainly three major points in the Porter’s Generic Strategy. Like, Cost Leadership Strategy, Focus Strategy, and Differentiation Strategy. Among them Singer Bangladesh Limited follows the differentiation strategy. To do the best in the differentiation strategy a firm needs to have the characteristics, like, access to leading scientific research, highly skilled and creative product development team, strong sales team with the ability to successfully
communicate the perceived strengths of the product, and corporate reputation for quality and innovation. Singer Bangladesh Limited has all of the above characteristics. They differentiate their products by giving superior value to their customers. They also perform their corporate responsibility perfectly. They run many Sewing Schools in Bangladesh, which obviously helps the rural ladies to earn independently. 3.2.10 The Arthur D Little (ADL) Strategic Condition Matrix In the Arthur D Little (ADL) Strategic Condition Matrix has two main dimensions – competitive position and industry maturity. In the Competitive Position there are as many as five positions. They are: Dominant, Strong, Favourable, Tenable, and Weak. Singer Bangladesh Limited is on the strong position. In the Industry Maturity Stage there are as many as four stages. They are: Embryonic, Growth, Maturity, and Ageing. Singer Bangladesh Limited is on the growth stage of its position. 3.2.11 The Boston Matrix Developed by the large US consulting group The Boston Matrix has two controlling aspect namely relative market share (meaning relative to your competition) and market growth.
Relating the relative market share and the market growth rate, most of the products of Singer Bangladesh Limited are the Stars. They generate high amount of income, thereby high amount of profit for the company. Figure 36: The Boston Matrix Analysis of Singer
•
Stars: Stars are those which have high market share and the market growth rate is also high. Most of the products of Singer Bangladesh Limited belong to the star. Motorcycle, Audio Product, Color Television, Fan, Air Conditioner, Washing Machine, Iron, Microwave Oven, Rice Cooker, etc., belongs to this group.
•
Cash Cow: Cash cows are those which have a high market share but the market growth rate is relatively lower. Some of the products of Singer Bangladesh Limited, like, Dish Washer, Room Heater, Water Heater, Vacuum Cleaner, Kitchen Appliances, etc., belong to this group.
•
Problem Child: Problem children are those which have a high market growth but the market share is low. Only a few products of Singer Bangladesh Limited, like, DVD Player, Instant Power Supply, etc., belong to this group.
•
Dogs: Dogs are those which have a low market share and the market growth rate is also low. No product of Singer Bangladesh Limited belongs to this group.
3.3 SWOT ANALYSIS In order to analyze the performance of the Singer Bangladesh Limited, I have conducted a SWOT analysis through some in-depth interviewing of the target corporate customers and also some of their officers. In the process of making a SWOT, customers and employees point out some major strength and weaknesses as well as some threats and opportunities regarding the various issues of the company. 3.3.1
Strengths:
Strong Corporate Identity: According to the customers, Singer Bangladesh Limited is the leading provider of electronic goods manufacturing and selling services not only in Bangladesh, but also worldwide. With its strong corporate image and identity, it has better positioned itself in the minds of the customers. This image has helped Singer Bangladesh Limited to grab the electronic sector of Bangladesh very rapidly. Distinct Operating Procedure: Singer Bangladesh Limited is known worldwide for its distinct operating procedures. The company's managing for value strategy satisfies customers’ needs better and also keeps the firm profitable. Now-a-days many other local and multinational companies, including its competitors, are trying to follow its operating procedures. Distinct Schedule: Everyone in Singer Bangladesh Limited from the appraiser to the top management has to work to the same schedule towards a different aspect of the same goal,
interfacing simultaneously at all level over quite a long period of time. As a result, customers can get instant services as and when required. Strong Employee Bonding and Belongings: The employees of the Singer Bangladesh Limited are one of the major assets of the company. The employees of the company have a strong sense of commitment towards organization and also feel proud and a sense of belonging towards the company. The strong organizational culture of Singer Bangladesh Limited is the main reason behind its strength. Efficient Performance: It has been seen from customers’ opinion that Singer Bangladesh Limited provides hassle-free customer services to its client comparing to other electronic goods manufacturing and selling companies in Bangladesh. Personalized approach to the needs of customers is its motto. Young Enthusiastic Workforce: The selection & recruitment of Singer Bangladesh Limited emphasizes on having the skilled graduates who have little or no previous work experience. The logic behind is that Singer Bangladesh Limited wants to avoid the problem of 'garbage in & garbage out'. And this type of young & fresh workforce stimulates the whole working environment of Singer Bangladesh Limited. Empowered Work Force: The human resource structure of Singer Bangladesh Limited is extremely well thought & perfectly managed. As from the very first, the top management believed in empowering employees, where they refused to put their finger in every part of the pie. This empowered environment makes Singer Bangladesh Limited a better place for the employees. The employees are not suffocated with authority but are able to grow as the organization matures. Equalization: At Singer Bangladesh Limited workshops are conducted periodically. On the workshops, all people participate as equals, with new members free to openly challenge top managers. MBO: Singer Bangladesh Limited also has Management by Objectives (MBO) everywhere. Each person has multiple objectives. All the employees must have to get the approval of their bosses on what they are going to do. Later, they review as how well they have performed their job with their management as well as the peer group. “One-to-One� Meeting: The MBO makes the review of a communication device among various groups. The key to the system is a "one-to-one" meeting between a supervisor & a
subordinate. In the meeting, the problems in dealing with customers are put forward first & everyone dug it to solve them. Modern Equipment & Technology: Singer Bangladesh Limited owns the best communication and information technology in Bangladesh. Its ultra modern communicating systems starting from terminal pc's to HUB's are based on the international Singer group standards and are the latest. The Hexagon product is one of the best examples in this context. Visually Appealing Facilities: Singer Bangladesh Limited has some of the best visually appealing branches and office premises in Dhaka & Chittagong that highly attract customers’ attentions and customers also feel the international environment. 3.3.2 Weaknesses: Besides the strengths, customers as well as employees identified some major weaknesses of the company. They are as follows: Lack of Proper Monitoring and Control: As the company is one of the largest multinational companies in Bangladesh, there is lack of proper monitoring and control over the executives and employees of the Singer Bangladesh Limited. Increased Cost of Information: The Singer Bangladesh Limited has to maintain a large scale of information of itself and its competitors. Now-a-days, the cost of this information has been increased in a high rate. Cannot Collect Money Timely From Their Debtors: As the Singer Bangladesh Limited sell its products to its customers on credit; sometimes it becomes difficult to collect money back from its debtors. Lack of Marketing Distribution Channel: Singer Bangladesh Limited has a lacking in the marketing distribution channel in Bangladesh. Various geographic segments are currently not availing the services of Singer Bangladesh Limited due to inconvenient branch location or absence of neighborhood branches. But customers want more neighborhood branches to facilitate their business. Absence of Strong Marketing Activities: Singer Bangladesh Limited currently don't have any strong marketing activities through mass media e.g. Television. TV advertisements play vital role in awareness building. Singer Bangladesh Limited has no such TV advertisement campaign.
Lack of Customer Confidence: AS Singer Bangladesh Limited is fairly old to the electronic goods manufacturing and selling industry of Bangladesh. But average customers lack the confidence in Singer Bangladesh Limited and judge the company as an average new company. More Innovative Products Must be Offered: In order to be more competitive in the market, Singer Bangladesh Limited should come up with more new attractive and innovative products. This is one of the weaknesses that Singer Bangladesh Limited is currently passing through. Low Remuneration Package: The remuneration packages for the entry-level officers are considerably low. Since other foreign and local multinational companies offer a more lucrative salary package, it will be difficult for Singer Bangladesh Limited to attract an MBA in future with its current salary package.
Diversification: Singer Bangladesh Limited can peruse a diversification strategy in expanding its current line of business. The management can consider options of starting another goods selling or diversify it to another businesses. As Singer Bangladesh Limited is one of the leading providers of all electronic goods, in Bangladesh it can also offer other services. High Cost for Maintaining Large Sales Force: The sales force maintenance cost for Singer Bangladesh Limited is comparatively high. Other companies very often highlight this. In the long run, this might turn out to be a negative issue for Singer Bangladesh Limited. 3.3.3
Opportunities:
Distinct Operating Procedures: Repayment capacity as assessed by Singer Bangladesh Limited of individual client, who buys product on credit, helps to decide how much one can buy. As the whole lending process is based on a client's repayment capacity, the recovery rate of Singer Bangladesh Limited is close to 100%. This provides Singer Bangladesh Limited financial stability & gears up Singer Bangladesh Limited to be remaining in the business for the long run. Country Wide Network: The ultimate goal of Singer Bangladesh Limited is to expand its operations to whole Bangladesh. Nurturing this type of vision & mission & to act as required, will not only increase the profitability of Singer Bangladesh Limited but also will secure its existence in the log run.
Experienced Managers: One of the key opportunities for Singer Bangladesh Limited is its efficient managers. Singer Bangladesh Limited has employed experienced managers to facilitate its operations. These managers have already triggered the business for Singer Bangladesh Limited as being new in the market. Huge Population: Bangladesh is a developing country to satisfy the needs of the huge population, a large amount of investment is required. On the other hand, building EPZ areas and some Govt. policies easing foreign investment in our country made it attractive to the foreigners to invest in our country. So, Singer Bangladesh Limited has a large opportunity here.
Acquisition: Singer Bangladesh Limited is one of the experts in acquiring various firms and organizations. In Bangladesh, it can also diversify quickly by acquiring various local established companies and increase its total operation within Bangladesh rapidly. 3.3.4
Threats:
Upcoming Competitors: The upcoming private, local & multinational companies posses serious threats to the existing network of Singer Bangladesh Limited. It is expected that in the next few years more competitors will emerge. If that happens the intensity of competition will rise further and companies will have to develop strategies to compete against and win the battle of the firms. Similar Products are Offered by Other Competitors: Now-a-days different foreign and private companies are also offering similar type of products with an almost similar profit margin. So, if all competitors fight with the same weapon, the natural result is declining profit. Default Culture: This is a major problem in Bangladesh. As Singer Bangladesh Limited is very older, these problems have been arising enormously and the company may find itself in a more threatening environment. Thus Singer Bangladesh Limited has to remain vigilant about this problem so that proactive strategies are taken to minimize this problem. Industrial Downward Trend Due To Recession, Inflation & Unemployment: Bangladesh is economically unstable country. Flood, draught, cyclone, and newly added terrorism have become an identity of our country. Along with inflation, unemployment also creates industry wide recession. These caused downward pressure on the demand for the products of Singer Bangladesh.
4.1
SUMMARIZED VIEW
I’ve used several methods to prepare the term paper. Data have been collected from both primary and secondary sources. Secondary data have been collected from different statements, the annual reports, journals, vouchers, magazines, articles and the website of Singer Bangladesh Limited. Primary data have been collected from the District Manager of the Singer Bangladesh Limited by direct personal interview with questionnaire. Beginning with the sewing machine in 1905, Singer's product portfolio has diversified to encompass a highly successful multi-brand strategy combining products of top world marques with the company's own products across a range of household, industrial and financial categories. It sells Color Television, Fan, Washing Machine, Iron, Microwave Oven, Rice Cooker, Audio Product, Air Conditioner, Motorcycle, Instant Power Supply, DVD Player, Dish Washer, Room Heater, Water Heater, Vacuum Cleaner, Kitchen Appliances and Laptop and Desktop Computer. Singer follows different strategies in different aspects. In product it follows Five Levels of a Product, product Life Cycle, and Ansoff’s Matrix. For pricing it follows the Premium Pricing Strategy. For distribution it follows Consumer Marketing Channel, Business Marketing Channel, Selective Distribution, Exclusive Distribution and Vertical Marketing System (VMS). For promotion it follows both Push and Pull strategy. Singer is the market Leader for most of its products. But a few products are in the market challenger and the market follower. Singer also follows the Five Forces Model. Among the different strategies of Porte’s Generic Strategies, Singer follows the differentiation strategy. In the Arthur D Little (ADL) Strategic Condition Matrix, Singer Bangladesh Limited is on the strong position. In the Industry Maturity Stage, it is on the growth stage of its position. In the Boston Matrix, relating the relative market share and the market growth rate, most of the products of Singer Bangladesh Limited are the Stars. The major strengths of Singer Bangladesh Limited are strong corporate identity, efficient performance, MBO and modern equipment & technology. The weaknesses are increased cost of information, timely money collection from debtors, high cost for maintaining large sales force. The opportunities are country wide network, experienced managers. The threats are upcoming competitors, industrial downward trend due to recession, inflation & unemployment. 4.2
RECOMMENDATIONS
There are some problems and obviously some prospects of Singer Bangladesh Limited. From the driven findings, the following recommendations can be formulated for Singer Bangladesh Limited. They are:
•
Reduce the rate interest of credit sales so that the borrowers have the ability to conduct business as usual.
•
Singer Bangladesh Limited should improve their distribution channel system so that they can give customers a sense of availability of their desired products.
•
Singer Bangladesh Limited should reduce the cost of information.
•
Singer Bangladesh Limited considering the concentration factor can think of creating more brand awareness as the reputed ones are enjoying the advantage.
•
Singer Bangladesh Limited should introduce new products in their product line so that the customers can determine the right product offering for their portfolio.
•
There should be constant and continual up gradation of technology in the company, benefiting both the customer and the company. It may enter into partnership among them for reaping maximum benefits, through consultations and coordination with reputed IT companies.
•
The skills of the company’s staff should be upgraded continuously through training. In this regard, the company may have to re-look at the existing training modules and effect necessary changes, wherever required.
Seminars and
conferences on all relevant and emerging issues should be encouraged. •
Singer Bangladesh Limited will have to set up Research and Market Intelligence units within the organization, so as to remain innovative, to ensure customer satisfaction and to keep abreast of market developments.
•
They will have to interact constantly with the industry bodies, trade associations, farming community, academic/ research institutions and initiate studies, pilot projects, etc. for evolving better distinguishing models.
•
The repayments of the installments are to be collected in time. There should be kept the debt as low as possible.
•
The number of advertisements in the media, mainly in the television and newspapers should be increased. Thus the relationship with the customers will increase and therefore the confidence of the customers will be increased.
•
Some special and innovative marketing activities always should be taken to distinguish Singer Bangladesh Limited from its competitors.
4.3
CONCLUSION
Singer Bangladesh Limited is basically a merchandiser who imports product from abroad and sells it to the domestic market. Recently, they are thinking of setting up the Call centre
System, which may become a new weapon in its arsenal. Now-a-days people's perception about the call centre is good in a sense that most of the people think that having this call centre to aid them whenever they need it is really helpful.