Knit Garments Sector

View with images and charts “A General Review of Merchandising to the Knit Garment Sectors in Bangladesh”.

Chapter 1 1. Introduction: Modern management has transferred itself from a production to a sales orientation and finally to marketing oriented view of business The Marketing Concept is a philosophy and like any philosophy it cannot be defined with precision. It is in fact an attitude governing the whole management approach. To the firm’s Operations from step to step one of the recent slogans of today's economist is ' either export or be ruined'. They are not willing to show any other path ' between this.

The present export pattern of Bangladesh has changed. According to the above slogan, now eight commodities have taken the position of 93% of the export earnings and ready made garments is one of those. Major products of Bangladesh Ready-made Garments industry for export Marketing are knit T-shirt, Polo shirt, trouser, woven shirts, trousers, Jackets J-shirt, short Briefs and major Buyers of Bangladesh Garments are the USA, EEC, Canada and other European Countries.

The export earning from garment sector increased steadily from a meager amount of US$ 3.24 million in 1980-81 to US$ 1064.00 million in 1991-92 and to US$ 1240.48 million during the fiscal year ended June in. 1991-92 and US$ 1310 million in 1992-93 fiscal year.

The contribution of this sector to the total national export earnings increased from 0.40% in 1980-81 to 69.41% in the year 1992-2007.

1.1 Background of the study Any academic course of the study has a great value when it has practical application in the real life. Only a lot of theoretical knowledge will be little important unless it is applicable in the practical life. So we need proper application of our knowledge to get some benefit from our theoretical knowledge to make it more fruitful. When we engage ourselves in such field to make proper use of our knowledge in our practical life only then we come to know about the benefit of the theoretical knowledge. Such an application is made possible through internship. My internship was carried on in a cannon garments limited company.

When theoretical knowledge is obtained from a course study it is only the halfway of the subject matter and procedure through which acquired knowledge of subject matter, which can be fruitfully applied in our daily life.

1.2 Objective of the Report The purpose of the Report is to identify the merchandising division’s work of Ababil Knit Composite Ltd. I also try to find out the duties and responsibilities of merchandisers. Another objective of this Report was to find out the opportunities and threat of this industry. This Report also includes the behavior, expectation and feelings of foreign customers. The general objective of this study is to determine the present activities of buying houses and the

significance of their role for smooth, efficient and effective marketing process of garment products overseas.

The specific objectives of the study are describing as follows: • • • • • •

To find out the buying and buyer communication strategy in merchandisers company.

To identify the merchandising division’s work of Ababil Knit Composite Ltd. To find out the duties and responsibilities of merchandisers.

To find out the opportunities and threats of Ababil Knit Composite Ltd. To find out the existing problems of Ababil Knit Composite Ltd. To examine the efficiency and effectiveness of Ababil Knit Composite Ltd.

1.3 Literature Review Hyman, Jeffrey A.; Homan, Molly E, January 1, 2001, falling merchandise (Retail liability for injuries caused by merchandise falling from shelves) .Merchants know falling merchandise presents dangerous risks to unwary customers, and courts are holding them accountable.(www.http:// attachment:/572/1G1-69662366.html) Posch, Robert November1, 1994 Direct Marketing Substituted or unordered merchandise (Inventory management) Managing your inventory requires that you perform a delicate balancing act. Too little inventory makes for unhappy customers and lost sales/good will. Too much inventory incurs high financing and storage costs.

Information technology makes the process more flexible, but the tension of a just-in-time ordering mindset grappling with a customer accustomed to superior service remains a primary administrative and legal problem of the database marketing manager. (www.http://attachment:/584/1G1-16939803.html).

ISLANDIA, N.Y.--(BUSINESS WIRE)--October 2, 1997--o determine the resources required to bring its 6,000 custom-designed legacy software programs into compliance with the Year 2000 century date change requirement, Service Merchandise Company has selected CA-Impact/2000, a key component of Computer Associates' Discovery 2000 solution.

America's largest jewelry retailer, Service Merchandise operates 357 stores in 37 states. (www.http://attachment:/572/1G1-19808754.html).

METHODOLOGY Chapter 2 2. Methodology Methodology is defined as a particular procedure or set of procedures, refers to the rationale and the philosophical assumptions that underlie a particular study.

However, this study is a ‘Non-intervention Study’, a type in which the researcher just observes and analyses researchable objects or situations but does not intervene. Thus I have closely observed all departments’ work procedures and tried to analyze them from my own point of view and from company’s personnel’s point of view by interviewed them. All necessary and relevant information and data have been collected thorough following ways: 2.1 Sources of information

To carry out the proposed study, data have been collected from two sources: Primary and secondary sources.

2.1.1 Primary source: Primary sources include interacting with employees and face-to-face interviews with the personnel through an open-ended questionnaire.

2.1.2 Secondary source: Secondary sources are company website, brochure, outlets, other research reports, literatures/magazines and the internet.

2.2 Data collection Two types of data collection techniques have been used as follows: 2.2.1 Observation Technique: Participant observation approach has been used where I have been took part in daily work routine of the organization.

2.2.2 Interview Technique: I have followed the ‘Researcher Administered Interview’. Open ended questionnaire has been used for interview where all respondents used their own words to describe particular work process and problems.

2.3 Sampling plan of the study Sample for the interview has been taken as three employees from each department randomly.

Thus total sample size is 15 out of total 110 employees.

Departments Marketing Merchandising Production Logistics Commercial Total:

Total number of employee 20 18 23 24 25 110

Respondents 3 3 3 3 3 15

Chapter 3 3. Industry Overview: Ready-Made Garments (RMG) Sector The sector of RMG in Bangladesh can be broadly subdivided into two product categories, namely woven and knitted garments. Since the industry accounts for approximately 80% of overall exports of Bangladesh and generates a significant amount of foreign exchange its activities form a vital part of the national economy. Geographically, most of the garment enterprises are clustered around the urban areas of Bangladesh.

Both external and internal factors contributed to the phenomenal growth of RMG sector. One external factor was the application of the GATT-approved Multi Fibre Arrangement (MFA), which accelerated international relocation of garment production. Under MFA, large importers of RMG like USA and Canada imposed quota restrictions, which limited export of apparels from countries like Hong Kong, South Korea, Singapore, Sri Lanka and India. On the other hand, application of MFA worked as a blessing for Bangladesh. As a least

developed country, Bangladesh received preferential treatment from the USA and European Union (EU). Thus by 1985, Bangladesh emerged as a powerful competitor for traditional suppliers in the US, Canadian and European markets along with the government initiated pragmatic steps to streamline export-import formalities.

Till the end of 1982, there were only 47 garment manufacturing units. The breakthrough occurred in 1984-85, when the number of garment factories increased to 587. The number of RMG factories shot up to around 2,900 in 1999. Bangladesh is now one of the 12 largest apparel exporters of the world, the sixth largest supplier in the US market and the fifth largest supplier of T-shirts in the EU market. The industry has grown during the 1990s roughly at the rate of 22%. In 1998-99, the export earnings of the RMG sector were $5.51 billion, which was 75.67% of the total export earnings of the country. In 2007 total export earnings from RMG is $ 7.8 billion. Although Bangladesh exports garments to some 30 countries, its exports are highly concentrated in two major markets, the USA and EU. USA imported 43.24% of total garments exported from Bangladesh in 1998-99. However, if European Union is considered as a single market, the US market becomes the second largest.

Bangladesh exported 52.38% of its apparel exports to the EU in 1998-99. In the last five years Bangladesh's exports to the EU have grown by 174%. The main reason for this phenomenal growth is the almost duty free (due to GSP privileges) and quota-free access to this market.

Today the contribution of this sector is much higher among 140 export items. Global market share of top five export items are as, RMG 74.16%, Frozen Foods 4.86%, Jute goods 3.55%, Leather 2.55% and Raw Jute 1011%.

[Source: Export Promotion Bureau].

Table-1: Macro Contribution of RMG Sector: RMG Earnings Total RMG Exports Local Value Retention Direct Value-Addition by RMG Source: Export Promotion Bureau

Amount (billion US$) 4.5 2.1 1.2

As Percentage GDP 9.5 4.4 2.4

of

Diagram-1: Product-Wise Contribution to GDP on 2004-5:

Source: Export Promotion Bureau 3.1 Emergence of Knit-RMG The growth dynamics of the sector over the last decade evince two clearly discernible phases: during the initial period it was the woven-RMG which dominated the structure of apparel exports, whilst in recent years which could be termed as a second phase, it is the knit-RMG which emerged as no less of an important segment in the RMG sector with its share growing up steadily and local value retention fast approaching the level of woven RMG. During the July-November period of fiscal Year 2007-08 woven export fell by 3.17 per cent while knitwear exports increased by 6.19 per cent.

Table-2: Statement of monthly export’ 08 (Value in thousand Taka) H.S. SL. Code/ No. Heading No.

Name

of Com December modit 2005 ies

8.

H.S Code Knitwear:

31063216

9.

H.S Code Woven Garments

31931629

% of total July-Dec. July-Dec. 200620072007 2008 1170952 17 1248386 87

16306880 5 16346786 4

37.98% 38.07%

Source: Export Promotion Bureau 3.2 Diversification of RMG Sector Within the apparels sector, Bangladesh has been able to accomplish product diversification by extending product line from T-shirts, pajamas, ordinary shirts, shorts, caps, women’s and children's wear to shirts of complicated designs and jackets; and some brand items have also emerged where the value was added to both the export earnings and the local value retention.

Table-3: Main apparel items exported from Bangladesh (in Million. US$)

Year 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-20006 2006-2007 2007-2008 (December)

Shirt 805.34 791.20 807.66 759.57 961.13 1043.11 1021.17 1073.59 666.18

T-Shirt 225.90 232.24 366.36 391.21 388.50 471.88 563.58 597.42 403.98

Trousers 80.56 101.23 112.02 230.98 333.28 394.85 484.06 656.33 449.18

Jackets 126.85 146.83 471.73 309.21 467.19 393.44 439.77 573.74 296.82

Sweater 70.41 196.60 296.29 271.7 325.07 476.87 362.23

Source: Export Promotion Bureau 3.3 Challenges of RMG Sector Bangladesh’s Ready Made Garments (RMG) sector today operates in a highly competitive global environment. The phasing out of quota privileges and varied facilities from developed countries offers new challenges as well as opportunities. The challenges include becoming more competitive in terms of quality, price, timely delivery, financial capacity, labor compliance standards, customer base, vertical setup, design and product development capability, advanced production facilities and long term business relationship. Increasing its international market share of existing exports, product diversification, efficiency gains through economies-of-scale and possible gains from vertical integration (e.g. establishment of composite industries for garment) can be characterized as the key opportunities.

There are several weaknesses of the RMG industry of Bangladesh like low labor productivity, the industry is vulnerable because as highly dependent on the imported raw materials, underdeveloped infrastructure, problems in power supply, transportation and communication, inadequate port facilities and port congestion. For RMG sector, the backward linkages are weaving the fabric, spinning the yarn, and dyeing, printing and finishing operations.

Chapter 4 4.1 History Ababil Knit Composite Ltd. is an export oriented high-tech buying house Garments manufacturer and exporters in Bangladesh. It was established in 2004.This industry is one of the leading garment buying house in Bangladesh.

The company is not use to promote any product in domestic market. The object of the company is to produce various types of readymade Garments like men’s T-shirt, polo shirts, trousers, etc.

The factory has been running by highly trained and skilled manpower, which have been in this sector for quite a long time, and are able to keep continuing the production process with utmost accuracy and flawless finishing. The company has guaranteed uninterrupted production and timely supply of sweaters as per the schedule and time frame of buyers. The production unit has its own high powered generator that is being used as back-up sources of electricity, which gives the manufacturing chain a lot more dynamism and continuity. Wide

array of indoor and outdoor facilities along with safety measures is one of the prominent features.

4.2 Objective of the Ababil Knit Composite Ltd. The main objective of the company is to earn profit. Besides this there are some other objectives, which are as follows:  To generate employment opportunity  To perform social responsibilities  To provide quality product to the customers  To provide service for the parties involved and invention of the necessary new service dimension.

4.3 Vision of the Organization To obtain a leading position in the Buying House sectors of Bangladesh as well as international through maintaining standard quality.

1. in time action.

2. Clear understanding of customer’s instructions.

3. Clear communication with vendors 4. Clear instructions for production 5. Strict compliance with quality control system.

6. Total devotion maintains first class quality standard.

7. Absolute efforts for in time shipments.

4.4 Mission of the Organization Ababil Knit Composite Limited is committed to maintain discipline, punctuality and quality products at reasonable price and ensure quality service. Their focus is on the customer needs and satisfaction. They always maintain delivery schedule according to buyer’s requirement.

4.5 Corporate Values Ø Team work Ø Integrity Ø Excellence Ø Commitment to buyer. Ø Maintenance of consistent 4.6 Organization Structure: Structure of the organization is flat and functional. And it is to some extend is a mechanistic organization. But it is due to its mass production .The organization along with its functional structures has horizontal linkage which is most necessary thing in garment industry because of high quality consciousness. The organization’s most of the plant and equipment is procured internationally, configured to generate optimal production at all stages and to ensure high quality.

2.8 Management: Technically sound and professionally skilled board of directors is for production and human Resource management of the company. Policy formulation and operational strategy are being taken care of by the board. The Chairman is the chief executive to look after the business affairs and other logistic support of the company. In addition to dealings with the

international delegates and buyers, they spearhead the every affair of company from supervising and keeping on working the technical staff to having a through looking of the qualities of products. The management structure of the company is formed with board of directors as the head, and Chairman as the chief executive. They are to communicate and exchange views as well as suggestions with the directors who get General Manager (GM) as their supporting hand. GM is to manage the Factory Manager, Accounts Officer and Commercial Manager. Factory Manager supervises the production and maintenance staffs, while Accounts Officer and Commercial Manager manage the accounts respectively.

Mrs. Laila Begum Chairman Mr. Shafiullah Mollick ManagingDirector Iftekhar Moinuddin Director Mrs. Ababil Mollik Director

2.9 Hierarchy of the company Chairman Board of Directors Managing Director General Manager Merchandisi ng Dept.

Sampling Dept.

Accessory Supply Dept.

Commercia Production l Dept.

Dept.

Shipping Dept.

Merchandis er

Sampling Manager

Asst.

Merchandis er

Accessory Manager

Commercia QC l Manager Manager

Shipping Manager

Supervisor

Accountant QC Inspector

Supervisor

Pattern Cutting Master 4.9 Product of Ababil Knit Composite Limited Ababil Knit Composite Limited produces categories of product for men, women, Kids etc such as: Basic T-Shirt, Polo Shirt, Tank Top, Ladies Dress, Night Gown, Fleece T-Shirt, Jogging Suits, Fleece Jacket, Rugby shirt, etc.

4.10 Ababil Knit Composite Ltd. Provide services to: IMPORTERS / BUYERS • As an exporter • As a buying agent • As a sourcing company • To set-up QA systems FACTORIES / VENDORS IN BANGLADESH. • As an order supplier • As a liaison agent between factory and buyer • For Technical assistance Ababil Knit Composite Ltd. has factories with the best machinery, manpower with commitment towards delivery & quality standards. These factories can produce any quantities under our guidance and control. Some factories are approved for quality from buyers like GAP, WAL-MART, TARGET, PVH and JC PENNEY etc.

Chapter 5 5.0 Theatrical perspective Buying Houses Of Ready Made Garments Buying Houses of ready-made garments have developed with the growth of garment export of our country. It is the combination of all marketing activities relating to searching foreign garment buyers for the order of garments products, taking order of ready made garment products form them, placing order to local factories and providing overall support to the both prospective buyers and suppliers.

It has not been a long time since Buying Houses have started sprouting up here and there.

Only a few years back where it was difficult to find a re1iable and quality Buying House, but now, there are so many of those.

Buying Housing industry is one of the essential supports of Garments Export. In one hand foreign Buyers of garment products are largely dependent on this industry for searching suppliers, who are capable to produce and supply buyers demanded products.

In other hand garments producers are also dependent on this industry for searching buyers, who places the order of certain garment item such as Knitwear that the producer produces. So the relationship between garment industry and buying house industry are interdependent. The existence of one without other is hardly possible. The reason for this again exporting garment product involves so many stages from marketing to distribution, which is not possible by any single group to do alone. For the convenience of both buyers and suppliers, the buying house industry today has developed enormously with a vision to perform marketing and distribution task of garment industry. Ababil Knit Composite Limited is one of the buying houses in Bangladesh. It is 100% export oriented garment. It is determined to build long term customer relationship with its foreign clients. It tries to maintain better qualify.

Chapter 6 6.0 Finding and analysis Merchandising is a global process through which products are produced, sourced, and sold all over the world. Merchandisers must have leadership for the value chain (developing, distributing, and selling products) in a global market.

Merchandisers need to see "the whole process" from product innovation through consumer satisfaction. This requires logical thought processes such as problem solving, decisionmaking, and resource management. It is a critical need for merchandisers at Ababil Knit Composite Ltd., which has strong business background, yet it also stays focused on fashion or other products that undergo continuous change in the consumer-driven market.

Merchandise displays are special presentations of a store's products used to attract and entice the buying public. The nature of these displays may vary somewhat from industry to industry, but all merchandise displays are predicated on basic principles designed to increase product purchases. Indeed, merchandise displays are an integral element of the overall merchandising concept, which seeks to promote product sales by coordinating marketing, advertising, and sales strategies.

Here, the merchandising department is mainly divided into accounts buyers. This shows that there is individual or a team of merchandising, who takes care of a specific buyer or account.

6.1 Merchandising serves the following purposes at Ababil Knit Composite Ltd.  Gateway: It acts as a bridge between buyer and the company for communication.  Marketing: Merchandiser has to market his company in order to increase his customers and generate more and more revenue.  Costing: Merchandise makes a cost sheet to see if the product is feasible or not in terms of cost and revenue. Merchandiser has to calculate the cost of products including all wastes and accessories to tell the final cost of the product to his customers.  Negotiation:

Merchandiser must have a negotiating power on the price to convince his buyers on specific price to lessen the chances of loss.  Sampling: Merchandiser must send the sample to his buyers for confirmation and satisfaction. At this stage, Sampling is also done to avoid loss.  Information Management: As merchandiser has direct contact with his buyers so the buyers have to give information about their product’s requirements and if there is any problem the merchandiser has to inform his buyers in return.  Implementation: It is the responsibility of merchandiser to prepare the product according to the requirement of buyer.  Production Follow Up: Merchandiser must be aware of the quality, packaging and on time delivery.

6.1.1 Buying & Merchandising strategy of Ababil Knit Composite Ltd. Help retailers involve a merchandise mix that ensures financial optimization by improving sales and margins and reducing inventory carrying costs and the need for mark downs.

This would encompass three broad areas of consulting:  Sourcing  Vendor Management  Pricing Buying and Merchandising Strategy Service caters to the needs of: Entrepreneurs and organizations venturing into the retail domain Retailers who want to optimize financial returns by improving sales and margins, reducing lost sales and markdowns existing retail businesses eyeing new and innovative product lines as a part of their differentiation strategy How?

Buying & Merchandising Strategy based on the following strengths: • Large team with over 200 man-years of retail operations and business experience • Successful implementation track record of similar projects

• • •

Constantly updated repository of best business practices in retail from across the world Data bank of benchmark retail performance data Access to macro-economic data impacting overall retail and consumer businesses

6.1.2 Brand Strategy The aim is to help retailers enhance the power of their brands to fulfill their business and financial objectives. This would include: • Brand Building • Brand Extension or Re-positioning • Finding synergies between two existing brands that leverage each other to improve business.

Brand Strategy Service caters to the needs of: • Entrepreneurs and organizations entering the retail industry • Retail organizations wishing to leverage their unique product-mix and service experience by creating a “brand” • Retail organizations planning for Brand Re-positioning • Retail organizations who wish to develop strategic alliances with other brands as a part of their growth strategy 6.1.3 Distribution Channel Strategy His service aims to facilitate the evaluation of various channels of distribution available to the brand owners and choose the ones that best fit their overall brand strategy.

Distribution channel strategy confirms to the needs of Brand owners and Manufacturers: • Who are in the process of launching a brand or setting up a distribution channel for their brands/products?

• Who would like to expand or rationalize their existing distribution channels in-line with their current business and financial goals • Who are looking at re-launching or re-positioning their brands in line with their current business goals?

6.2 Financial performance: 6.2 .1 Financial Information of Ababil Knit Composite Ltd .

Ababil knit Composite Ltd. is new Garments industry and its total capital is near about 1000 Lac Taka. Ababil Knit Composite has 200 Lac Taka and 800 Lac has taken from the Bank.

Financial Information Bank Investment Ababil Knit Composite Ltd. Total Investment

Taka (Lac) 400 200 600 (Lac Taka)

6.2.2 Export performance of Ababil Knit Composite Ltd.

View form the export statistics, it is observed that the company sales turnover has been accumulated in every year. Growth in annual sales of the company has been raised. It can be estimated that the company export performance is growing day by day.

Table-4: Ababil Knit Composite Ltd. export sales turnover (Since the year of 2005- 2009).

SL

Year of Export

Export Value (Value in Lac $ US)

01

2005

400

02

2006

570

03

2007

700

04

2008

950

05

2009

1080

6.2.3 Size & Growth of Market The Company’s marketing operations continued its emphasis on export sales over the years as depicted below:

Tang Top T-Shirt Total Sales

Year - 2009

Year – 2008

Year - 2007

99,800

527,903

539,417

0.68%

3.68%

3.95%

14,554,342

13,817,314

13,129,599

99.32%

96.32%

96.05%

14,654,142

14,345,217

13,669,016

100%

100%

100%

Tang Top T-Shirt

100.00% 80.00% 60.00% 40.00% 20.00%

T-Shirt

0.00% 1

2

Tang Top

3

Sales Revenue Tang Top T-Shirt Total Sales

9,455,588 0.45% 2,093,214,675 99.55% 2,102,670,263

32,576,936 1.82% 1,756,441,450 98.18% 1,789,018,386

46,956,494 2.26% 2,029,968,545 97.74% 2,076,925,039

100%

100%

100%

Tang Top

100.00%

T-Shirt

90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00%

T-Shirt 1

Tang Top 2

3

The above figures show that the export sales increased by 19% in 2007over the previous year with greater exposure to international market scenario and risk.

6.2.4 Buyer and Exporting Country of Ababil Knit Composite Ltd. Matalan Retail, UK, H&M, Sweden, Carrifour, France, Dikies, Musto/Volvo, Rivermead, Animal, UK, Inditex–Zara, Spain, Tuscania, Italy, A.B.C.I. SPA, Guess, Phard, Italy, Instyle, SPA, Italy, Pizza Italia, Italy, Tessival, Italy, OBS. Italy, DHL (Melchers) Germany, Guldenpfennig, Germany, Samar SPA, Italy.

Diagram-2: Graphical representation of major buyer’s positions of Ababil Knit Composite Ltd. Buyer Position accordingly quantity 3%

New Wave

0% 4%

Good Man

4% 8%

Joules

29%

Lion Star

1% 0%

Markstyle Danys Fashion First textile ZXY 51%

Others

6.2.5 Production Capacity of Ababil Knit Composite Ltd. Items/Products Finished Fabrics Basic T-Shirt Polo Shirt Sweat shirt (One side brush) Yarn died Brush Emarizing Printing Embroidery Total Production Capacity

Per month 18000 Kg. per day 104, 0000 pieces per month 330,000 pieces per month 130,000 pieces per month 4000 kg. per day 4,000 kg. per day 3,000 kg per day 25,000 pieces per day 30,000 pieces per day 179, 4000 pieces per month

6.2.6 Export history of Ababil Knit Composite Ltd. Year 2002 2003 2004 2005 2006 2007 2008 2009

Amount in USD 3.5 million 4.0 million 7.0 million 13.60 million 10.67 million 14.00 million 30.00 million 35.00 million

Source of all information: Corporate office of Ababil knit Composite Ltd. Chapter 7 7.1 Merchandising / Marketing Department The duty of this department is to communicate with the buyers and aware about the pricing based on fabrics materials and production cost. Marketing division is supported by an independent sample production in order to meet all sorts of sample enquiry from the end of buyers. The marketing strategy is designed to sell quality product at low price.

Merchandising section consists with the sorts section it has planed to customize every inch shelf space in each story with goods in the right quantity and at the right time.

Merchandising process at a glance:

Order sheet receive from Buyer.

Sample development & send to buyer Sample approved by buyer Fabric requirement calculation Accessories requirement calculation Sourcing of fabrics Sourcing of accessories Possible date of arrival of fabrics and accessories in the garment factory Costing Production planning Pre-shipment inspection

Flow chart: Follow-up of merchandising department J=Job A+J = Admin + Job

Negotiating Price with Marketing & Costing Dept.

Once Sample Approved by the Buyer its come to Merchandiser dept. again for Bulk Production

A 1 Merchandi ser will follow the R-1,R-2, R-3,R4,R-5

A 3 Follow up with Knitting Section A 4 Follow

A 5 Follow up with Cutting Section

A 6 Follow up with PM for Sewing Fabrics correctly.

R 1

Will Come to Sample Section

A 2 Follow up with Commercia l Dept. for L/C Openning Purpose

up with Dyeing Section

Once Price approved Submit Sample with Artwork to Merchandiser

Place Order

By Buyer

Yarn Bookin g

A 7 Follow up with Logistic Dept. for Packing Instruction

And Lastly Products are Shipped by the Logistic Dept.

R 2 Go for Fabric Bookin g

Sen ding Sam ple to Buy er

R 3 Taking Fabric color shade approval by Buying house

R 4 Go for Accessor ies booking

R 5 Go for imported accessori es booking if any

R 6 Once sample completed Last & Final Review will be done by the Merchandiser again

7.1.2 Financial Department Ababil Knit Composite Ltd. finances its money from the bank. Facilities will be provided to open back to back LC for exportable items and the proposals for importing capital machineries with soft term loan with lesser interest rate. They have an independent unit dealing accounts and financial activities of the company. They fund allocation of the industry is directly led by the general manager (Finance and Admin) under the supervision of chairman of the industry. This unit responsibility covered the areas; determine daily cash flow requirements, credit collections, inventory control, recording and monitoring, allocation of resources, providing financial data on company’s strategic decisions.

7.1.3 Commercial Department

As soon as an order is placed, commercial department starts its work. Once the LC (Letter of Credit) is opened by buyer and order is received by MFL, commercial department received a copy of that LC from marketing department. Then the L/C has been scrutinized by them. Unit price, quantity, clause, expiration terms and conditions, payment clause, bill of lading clauses, amendment clauses of yarn and accessories and other terms and conditions based on negotiation between buyer and seller must be examined very carefully by this department. At the one end while the production is running, commercial department also is involved in arranging related documentation on the other end for the shipment of goods. This department has to communicate with other departments as well as suppliers, shipping lines, freight forwarders, clearing and forwarding agents and several other parties including buyers for preparing and dispatching accurate documents as per L/C. Beside this, this department also has to prepare several more documents which have been stated in ‘Appendices Part’.

Below are the two most important documents commercial department deals with: Letter of Credit (LC): Originally, a Letter of Credit (LC) was quite literally that - a letter addressed by the buyer's bank to the seller's bank stating that they could vouch for their good customer, the buyer, and that they would pay the seller in case of the buyer's default. They were used then, as they are now, for any transaction wherein one or more parties to the transaction require the comfort zone of guarantee of payment by a reputable bank. The sequence of information on an LC and the trade terms used are set forth in the standards established by International Chamber of Commerce (ICC).

Back-To-Back Letters of Credit: Back-to-Back Letters of Credit are used in international and domestic trade. The parties to a Back-to-Back Letter of Credit are: • The buyer and his bank as the issuer of the original LETTER OF CREDIT, • The seller/manufacturer and his bank, • The manufacturer's subcontractor and his bank.

This type of credit transaction is used when a seller/manufacturer has to purchase a component or farm out part of the manufacture of a product, but may not have the cash flow to do so. In this case, the seller/manufacturer applies to his bank for a letter of credit, identical to the original Letter of Credit he received from the Buyer, except that it is for a lesser value. This second letter of credit, called a Back-to-Back, is sent to the subcontractor's bank and therefore the subcontractor knows that he will be paid and can proceed with his part of the transaction - supplying components or service to the manufacturer.

7.1.4 Sample Department Buyers usually provide sample to the garments factory. They also give sketch pad in which they mention their requirements. By considering their sample and other requirements, the factory tries to supply the products.

7.1.5 Store Department Store section is also essential part of the company. It also linked with merchandising section.

Job of this department is to keep inventory or record of fabrics materials and supply to department of production, cutting and finishing.

7.1.6 Production Department Once the merchandising department issues order sheets and buyer’s all requirements, production department starts its works. A composite knit unit starts from procurement of yarn, then the process starts knitting of gray fabrics, dyeing of fabrics, finishing of fabrics for

making of garments and finally of readymade garments. A typical flow process for the manufacturing of the above products Mix is show below: Production process at a glance: Yearn KNITTING

Grey Fabrics Knitting Inspecting Measuring Fabrics Turning

DYEING

Scouring & Bleaching Dyeing Washing Fabric unload Squeezing (Tube)

FINISHING

Dyeing Compacting Inspection Measuring Fabrics laying Fabrics cutting

GARMENTS

Garments Sewing Cuff/Collar/button Washing Finishing & Packing

7.1.7 Quality control Department Ababil Knit Composite Limited has trained quality control team who closely supervise production line in each of the manufacturing unit. Individual quality control team is assigned for each manufacturing units to look after product quality and productivity. They also prepare

production planning and all issues are controlled evaluated by the concern director of each manufacturing unit.

7.2 Marketing Concept of Ababil Knit Composite Limited Ababil Knit Composite Limited follow the marketing philosophy that, “the job of the company is not to find the right customer for right product but the right product for right customer. The produced the product as per buyer requirements discuss with the buyer before manufacturing a product because if buyer wants to make any change in pattern they can change.

7.2.1 Marketing mix of the Ababil knit Composite Ltd. The marketing mix strategy of Ababil Knit Composite Ltd. Includes: • Product: Ababil knit Composite Limited tryst always to deliver the product as the buyer wants. They always provide better service and higher quality. Design, packaging, sizes all of there are selected by the buyers.

• Price: By negotiating with the buyer they fix a price for the product.

• Discount: It the buyer increases the quantity of the product then the company gives them some discount.

• Payment period: The buyers pay after the shipment of product.

• Credit terms: The buyers pay to the company by credit which call letter of credit (LC).

• Promotion: Ababil Knit Composite Limited uses direct marketing and personal selling strategy for advertising or increases their sale. The company attracts the buyer by direct mail tale marketing. Internet marketing is known as direct marketing. Personal selling is the most effective tool for buying process.

7.2.2 Necessity of the Merchandiser Ababil Knit Composite Limited merchandising team makes direct interface with the manufacturing units to avoid communication gap in production stage. Merchandising can be either direct or indirect. Some time the company merchandising directly in the foreign markets.

A merchandiser fixes the supplier to buy raw materials for production. At first the merchandiser contact with the supplier’s by any phone call, by send mail or by visiting their office. The merchandiser talks with the supplier about the raw materials. Ababil Knit Composite Limited has managed the merchandising section by young, qualified and highly trained merchandiser. They are well exposed and highly professional. Merchandiser of the company must have some knowledge about the important issues of garments which significant for merchandising such as: 7.3 Key Success Factors for Merchandiser The buying house export trade starts with the buyers placing an order with the seller. There fore it must be noted that if the vendor is unable to secure order from buyer, he is out of business. In order to be successful in securing orders continuously he must consistently make delivery in the right quality, at the right time and at the right price. To maintain these attributed and standards price, quality and delivery the vendor will be require consistently upgrading their production facilities, increasing productivity and having a strong management team.

Chapter 8

8.1 Communication Communication may be through Internet or face to face setting. In Ababil Knit Composite Limited both two ways are available. Merchandiser of the company communicates their buyers with directly. They also are their own website for the buyer.

8.2 Determining Price Once the merchandiser of Ababil Knit Composite Ltd. receive client’s product specification such as sketch, design, measurement, design sheet, tech pack, fabric construction & color or even sample. They explain the clients about the manufacturing cost, time and other factors. If the cost is reliable for the buyer they finally agree to make business contract with the company.

Example of estimated cost per unit of knitwear: Full chest 112cm+8cm (allowance) = 120cm [150GSM (Gram Square Meter)] Total length 70+5 (allowance) = 75cm Sleeve length 30+5 (allowance) = 35cm ----------------------------------------------------------------Full length (body + sleeves) = 110cm Total fabric required Consumption= 120cm*110cm*150GSM*12dz*/10000000=*10%/+ =2.62kg Fabric price= 2.62*$4.70 = $ 12.31 Knitting & Dying= $ 1.30 Collar & cuff= $ 5.00 CM (Cost of Making) = $ 5.00 Print/embroidery= $ 2.50 Accessories= $ 3.00 Buying Commission= $ 1.80 [Varies from buying house to Buying House] Bank Commission = $ 0.15 Total= $ 31.06 per dozen Per unit price of a complete knitwear= $31.06/12 = $2.58 Note: Price varies from item to item.

8.3 Sample making When the estimated price is acceptable then the merchandiser of Ababil Knit Composite Ltd. develops the sample from their industry according to the sample will be evaluated by the buyers.

8.4 Signing Contract After making the sample the merchandiser of Ababil Knit Composite Ltd. gives a accurate price. When they get sample approval from the clients they both sign a contract to further the process. Here they agree on price, delivery period, shipping method etc. Then the customer issues an L.C. (Letter of Credit) through their bank to the cannon garments Limited against the work order.

8.5 Final Approval After signing the contract the merchandisers of Ababil Knit Composite Ltd. purchase the required fabric. When the fabric is approved then they make another sample for final

approval. Upon approval they start manufacturing the product. It requires three or four months to manufacture, tag, label and package for shipment.

8.6 Labeling Requirements For the consumer information and protection according to U.S.A labeling act, all garments to import into the U.S.A. must by label with correct and sufficient information as follows: • Identification number: They use identification number as RN 00000 • Country of origin: The Company must clearly indicate on the label where the goods are made. Such as: Made in Bangladesh.

8.7 Packing Packing is an important part for maintaining merchandising. If the merchandisers are not aware about packing the product may hampered. As for reason they may loss a lot of money after completing the packing it is ready for shipment.

8.8 Payment by L/C Business transaction begins with a purchase order which represent by the mail or phone call or a fax received from the buyer. But it is not secure to the company. The order should treat as an agreement binding both parties the buyer and seller. For that contract they are L/C. It is for the seller to use to obtain payment for the merchandise shipped. The L/C means it is issued by the bank for the buyer and received and accepted by the seller. It cannot be cancelled or withdrawn by the buyer or the opening bank unless with the consent of the buyer.

PARTIES INVOLVED IN L/C The Letter of Credit involves the following parties:  Applicant: The importer or buyer or purchaser or drawer upon whose request the L/C is issued.  Beneficiary: The exporter or seller or supplier or shipper to whose favor the L/C is issued. He is entitled to the payment against which he has supplied the goods.  Issuing Bank: This is Importer’s or the buyer’s bank that issues the L/C on favor of the importer, pays or accepts Bill of Exchange or authorize another bank to negotiate the same on presentation some documents as per terms and conditions of L/C opened.  Confirming Bank: The bank, which adds confirmation to the credit. It is done at the request of issuing bank though sometimes confirming bank may or may not be the advising bank.  Advising Bank: It advises the L/C to the beneficiary and confirms the genuineness of the L/C. The bank through which the L/C is advised to the exporters. Sometimes this bank also performs the role of confirming and negotiating bank depending upon the condition of the L/C. The advising bank is situated in the exporter’s bank and must be a branch or a correspondent bank of the issuing bank. It may also assume the role of confirming and/or negotiating bank depending upon the condition of the credit.  Negotiating Bank: The bank, which negotiates the bill and pays the amount to the beneficiary. The responsibility of the bank is to scrutinize the documents before negotiation in order to see whether the documents are apparently in order or not. If the bank negotiates discrepant documents, responsibility lies with it. The advising bank and the negotiating bank are not the same. Sometimes, it can also be the confirming bank.  Paying/Reimbursing bank: It is the bank on which the bill is drawn (as per conditions of the credit). It is nominated in the credit to make payments against stipulated documents complying with the terms of the credit. It may or may not be the issuing bank. Issuing

bank must have NOSTRO account with the reimbursing bank and it will make payment by debiting the account as per condition of the documentary credit.

STEPS OF L/C FLOW Step 1: Importer agrees at a negotiation with Exporter or his authorized agent and obtains P.I./Indent.

Step 2: Importer opens an L/C Step 3: L/C issuing Bank advises the L/C to the Exporter through Advising Bank.

Step 4: Exporter ships goods to the Importer and submits the documents to the Negotiating Bank.

Step 5: Negotiating Bank makes payment to the Exporter and submits documents to the L/C Opening/ Issuing Bank, takes reimbursement.

Step 6: L/C Opening/ Issuing Bank deliver the documents to the importer for money.

Step 7: Importer takes delivery of goods.

8.9 Workers Health, Safety, working environment and other benefits Salary payment date Overtime payment Washroom Medical Benefit

: : : :

Emergency Exit Other Benefit Working Environment

: : :

Within 7th of every month.

Along with monthly salary as per workers attendance Separate washroom and toilet for male and female.

An M.B.B.S. Doctor is appointed for the treatment of workers. In case of work related accident the company bears the cost of treatment and surgery.

Emergency exit sign board marked for easy evacuation.

Separate lunch Area Festival Bonus Annual Picnic.

Congenial and attractive working conditions prevail in the factory.

8.10 Product development  Develop sample for buyer upon receipt of spec / sketch and other details.  Organize fabric and accessories from local and foreign sources.  Negotiate price and delivery.  Strictly control the quality, right from beginning of production to export and follow fit comments of the buyer.  Day-to-day in-line inspection by the standby quality controllers.  Undertake Initial, mid term and final inspections by our highly skilled technicians.  Keep day-to-day Email / Fax / Phone/chat communication with buyer.  We believe in commitment and positive attitude, which is the route of success in every sphere of trade and life.

8.11 Research & Development Ø Research and development or RESEARCH AND DEVELOPMENT is related with product development. Ø Concerned Merchandiser forwards the Fabrication Info to the Product Library and will get the exact match.

Ø If there is required match, Documentation and Planning is done, Merch is developed and PD Plan is made by the PD center. Ø If there is no exact match, Technical evaluation (Pricing), Documentation and Planning is carried out. RESEARCH AND DEVELOPMENT starts working here. After that PD Plan is made by the PD center.

8.12 Responsibilities of the research development & Manager Ø He decides the fabric styling, finishing Routes. He submits the fabric in the Lab. Ø He compiles the results. Ø He sends the results to the buyer. Ø If OK for the results, Data is inserted into the computer for making the file. If result is not OK, we refinish the fabric. Ø RESEARCH AND DEVELOPMENT sends the developed samples to the P.I. Lab, for the quick wash and sees the results after the 3 washes and required GSM is produced. After the quick wash, 20-30 g (weight) of the fabric is reduced just because of chemicals and detergents. Maximum sample weight is 10 Kg but is according to the merchandiser’s requirement. Yarn Count, Single Knit/Double Knit, Width and GSM is calculated and observed in RESEARCH AND DEVELOPMENT 8.13 DATA ANALYSIS & INTERPRETATION To bring my findings while working in Ababil Knit Composite Ltd. and provide my own recommendation, I prepare some questionnaire. These questions are set based on different aspects of Garments factory, different parties and matters involved with it. My sample respondent was knowledgeable people of different Garments & buying houses who know these matters very well. I surveyed on 100 respondents to find out my findings while studying in Garments industries. All the findings are based on the respondents’ response in different questions. No statistical software is being used to analyze the findings. I got the findings based on each of the respondents’ personal opinion.

1.

For which of the following reasons you are not satisfied with your buyers.

No.

Criteria

1.

2.

3.

4.

5.

Total Respondents High bargaining tendency in 100 exchange Uncompromising attitude 100 towards contingencies such as hartal Tendency of undesirable 100 rejections Fleeting tendency in business 100 relationship Cultural ethnocentrism 100

Frequenc y 100

Percentage Responded 100%

100

100%

33

33%

29

29%

3

3%

Interpretation: The criteria of the reasons of dissatisfaction are selected, as the satisfaction of the buyers is the important for the survival of the Industry.

Among the criteria, high bargaining tendency in exchange is one of most selected criterion among all the other criteria. This criterion is chosen to investigate whether foreign buyers show the bargaining tendency and how much that is in this industry. With the highest response it is revealed that the tendency prevails and it dissatisfies the respondent buying houses.

The second criterion is chosen for the questionnaire to look into whether the foreign buyers are patience to different undesired contingencies in our country. The respondents with another highest response has shown that they face strong impatience d lie to this type of contingencies.

The third criterion is chosen to investigate whether buyers undesirably reject garment products and how the buying house views it. Here it is revealed that buying houses are strongly against the product rejection by the foreign buyers. However, sometimes they are victims of such situation.

The fourth criterion is chosen to investigate the existence of fleeting tendency of foreign buyers. . This criterion reveal that' a portion of buyers do not value the long-term relationship with buying houses rather for trifling reasons they break their relationship with existing buyers.

The fifth criterion is chosen to see the existence of cultural ethnocentrism among the buyers. We have seen that the buying houses hardly face this problem.

2.

No. 1.

2.

3.

4.

5.

No. 1.

2.

Which of the following obstacles to export garment products through buying houses can be treated as major / minor (a) Major obstacles Criteria

Number of Frequenc respondents y Casualties such as natural 100 100 calamities or political crises Failure to deliver on time 100 86 Unskilled garment workers 100 73 Unproductive workers 100 54 Fraudulence in trading 100 37 (b) Minor obstacles Criteria Number of Frequenc respondents y Rejections of products 100 100 resulting from inefficient supervision Inefficiency of buying house 100 50 in negotiating

Rank 1 2 3 4 5 Rank 1 2

3.

4.

5.

Child labor aspect 100 Gender inequality 100 Shortage of sound base heavy 100 factory

43 27 24

3 4 5

Interpretation These questions were asked to find out severity of major or minor obstacles to RMG export process. As these problems of export process makes the job of buying house difficult to convince buyers.

The first major obstacle, natural calamities and political crises are responded by all of the respondents and ranked as first. This reveals that the activities of buying houses are very much vulnerable to this type of obstacle.

Failure to deliver on time got the rank of second major obstacle from the answer of the respondents as it is another suffering to the smooth functioning of this export marketing process.

The third obstacle is inefficient garment workers- a virulent gangrene in the production system. This criterion is also marked by more than two third of the respondents thus it is ranked as third.

Fourth criterion is the unproductive labor. Their barren productivity, as hampers the scheduled production process, is ranked as fourth major obstacles from the answer of the respondents.

The final one is the fraudulent in trading which cleans the violation of the rules in the agreement by the garment manufacturers. This is found as less frequent among the other major obstacles to RMG export, to the eyes of the buying houses.

The next part is the minor obstacles, which have the minor impact in the smooth function of RMG; export thereby poses minor impact on buying house.

The highest response among the minor obstacles is the rejection of the products due to the inefficient supervision of the production process of buying houses. All the respondents responded it indicating a frequent minor problem.

The second one was the ineffective communication skill posses by the buying houses.

A large part 'of the respondents has mentioned it as the minor obstacles as a result it got the second rank.

The third ranked minor obstacle was the utilization of child labour in Bangladesh and its related aspects. Here we have seen that although the consumerism is against this utilization but it is sometimes defeated for the availability of low cost labor.

Fourth ranked minor obstacle was the aspect of gender inequality in Bangladesh.

Buyers allover world have a opinion against this matter. As result they are sometimes unwilling to order in our country where this gender inequality prevails.

The fifth ranked minor obstacle was the lack of sound based heavy garment manufacturing industry in Bangladesh. As a result we are deprived from a high level of orders which could be avail otherwise. How ever the response to this question is 25%.

3.

No. 1.

Which of the following problems of a buying house can be treated as major / minor (a) Major problems Criteria

Number of Frequenc respondents y product 100 96

No.

Supplier's poor quality Short shipment Stock lot or total unutilized Document delay Improper document (b) Minor Problems Criteria

1.

2.

3.

Shortage of backward linkage Commission recovery Poor accessory supplier

2.

3.

4.

5.

Rank 1

100 LC 100

87 73

2 3

100 100

57 52

4 5

Number of Frequenc respondents y 100 80 100 73 100 71

Rank 1 2 3

Interpretation: This question is asked to know the severity of the major or minor problems, faced by buying house in their normal business operation. This question is segmented in two sections: major problems & minor problems. After getting the respondent answer I have showed the rank of major and minor problems separately in the above table according to number of frequency of each criterion.

Major problems are those are those that have serious harmful impacts on the activities of buying houses.

One of the major problems faced by the buying houses is the poor product quality of the RMG products. For this poor quality buyers become dissatisfied and avoid the further contact with the same buying houses. Almost every one agreed and marked it as a major problem. Thus it is rap-ked as first.

Short shipment or the failure to supply the desired products is another significant problem of buying house with the huge response of the respondents at is ranked as second.

Stock lot or the cancellation of total shipment is another important problem and marked by 730/0 of the respondent thereby ranked as third major one.

Document delay and the improper document are the concluding major problems of buying houses.

800/0 of the respondents said that the shortage of backward linkage industry is a problem for the buying house industry thus it is registered as topmost minor problems of buying house... With a slight difference in response commission recovery problems has defeated the poor accessory supplier in this category. So, it is clear that the activity of buying houses is hampered by above minor problems.

4.

Rank the following statements regarding the backward linkage industry of garment export.

No.

Criteria

1.

2.

3.

Number of Respondents Poor product quality 100 Insufficient number of such 100 industry to meet the total demand Lack of consciousness to 100 understand the consequences of late or poor quality delivery

Frequenc y 95 93

Rank

91

3

1 2

Interpretation: This question is asked to know the importance placed on backward linkage industry by the buying houses as a necessity of its smooth functioning. These questions have revealed the causes for which buying houses faces problem to get accessory or other material from this industry.

The first criterion is the poor product quality or supply of the accessories. As a result the smooth production of RMG garment products is hampered. For this reason the respondents have ranked the 'poor quality of the product' as the topmost.

The second criterion is asked about the absent of the industry supplier of accessories in the production process of RMG products. Although if is ranked as the second but from the data of the table it is clear that majority of the respondents agreed with the statement.

The third criterion is the lack of consciousness of the accessory suppliers to understand the consequences of poor or late deliveries of their products. Huge number of respondent also agreed with the statement treated this problem as major.

5.

Do you face any problem in your supplier selection process?

No.

Criteria

Number of Frequenc Respondents y 1.

Tendency to stay with 100 61 existing suppliers ignoring the necessity to fin out more efficient one 2.

Employee personal 100 57 relationship with suppliers 3.

Failure to choose desired 100 49 suppliers during seasonal excess demand 4.

Difficulty in choosing 100 43 committed suppliers Interpretation:

Rank 1

2 3 4

This question was asked to investigate the problems in selecting the effective and efficient

suppliers. The selection of effective and efficient suppliers is must for the effectiveness of export marketing process of RMG products.

The highest criterion is the tendency of buying houses to remain attached with the existing suppliers ignoring the importance of finding out the more efficient ones. This is a traditional tendency of business people to depend on the existing stakeholders. This is thereby is a restriction to choose the new efficient suppliers.

The second one is the personal relationship of buying house employees with suppliers.

This- is an important reason of inefficiency in the selection process of suppliers because in this process expert employees have influence and their bias may distort the effectiveness of the selection process.

The third criterion is the failure to select the desired efficient suppliers because their power of choice becomes limited while the excess demand is created by seasonal effect.

The fourth criterion is the failure to understand whether a new supplier will be committed to the agreement because he is not tested previously.

6.

No. 1.

2.

Do you think the percentage of RMG products brought by buying houses will increase after the withdrawal of quota?

Yes /No. Total Frequenc Percentage Respondents y Yes 100 27 27% No 100 73 73%

Interpretation: This question is asked to look into the blessing of quota in the export marketing process of RMG products and thereby its consecrate towards the buying house industry. Most of the respondents are alarmed about the condition of buying house effectiveness after the withdrawal of quota system. Again, a small percentage of respondents are optimistic about the increased efficiency of buying houses.

7. What is your comments regarding the quota free environment of this industry after 2005?

Interpretation: Most of the respondents have said the dismal future of buying houses after the withdrawal of quota. Most of the respondents have uttered that the foreigners will be free to choose the efficient garment manufacturers as over the world and thereby they will not find us lucrative because of the inefficiency in RMG export marketing process in our country. A portion of respondents has said that the buying houses will be jobless for the lack of law order enforcement of our country and the liberty of buyers to choose the efficient and profitable suppliers.

Another portion of them has mentioned the fair of buyers to the political instability in our country. As a result they will show the negative attitude toward our country after 2005 when they will be freely able to choose their RMG products suppl1ers. Again some said that after 2005 if this growth has to be maintained the government will have to take the initiatives to attract the foreign buyers. Finally they have said that these RMG products marketers

should start preparation for that period. And this preparation should be started with the removing our inefficiency and ineffectiveness in the export marketing process of RMG products.

The positivists have mentioned about the removal of inefficiency and ineffectiveness of present export marketing process after the year 2005 and the improvement of orders for this reason.

8.

Approximately what percentage of your total order per year is rejected by the foreign buyers after your final inspection?

No.

Rejection range

1.

2.

3.

Above 15% Between 10%-15% Below 10%

Total Respondents 100 100 100

Frequenc y 13 47 40

Percentage Responded 13% 47% 40%

Interpretation: In this question, where the buying houses' efficiency is implied, the highest efficient buying house responded with 4% percentage rejection. On the other hand the buying house which has the highest rejection was 17%.

9.

No. 1.

2.

3.

4.

Do you take any promotional strategy in order to attract buyers; if you do which of the following strategy you take?

Promotional Strategy Total number Frequenc Percentage of respondents y Responded On line advertising 100 7 7% Personal selling 100 6 6% Promotional display 100 11 11% Trade fair exhibition 100 19 19%

Interpretation This question is asked to know about the promotional attempt taken by the buying houses to attract foreign buyers. The low emphasizes on promotional attempt has revealed the apathy or the little knowledge of buying houses about their future.

First criterion is online advertising, the mostly used promotional system of current world. Here t have seen that our buying houses emphasize a little this media. It might be the result on stiletto introduction of this promotional system in this buying house sector in our country.

The second criterion personal selling is also little emphasized by the buying houses.

This might be result of the cost involvement in this promotional activity or the absence of this practice in this industry.

The fourth criterion trade fair exhibition is little more emphasized by our buying houses. Reason for this may be in our country traditionally this promotional strategy is followed.

10.

What steps you take to confirm the product quality

No.

Criteria

1.

Selection of qualities qualitative suppliers Schedule supervision Selection of efficient quality controller Prioritizing quality to cost Periodical reporting on quality

2.

3.

4.

5.

Total number Frequenc of respondents y of 100 100

Percentage Responded 100%

100 100

100 100

100% 100%

100 100

23 21

23% 21%

Interpretation: The first criterion is very much important in the view to maintain proper quality. Here we have seen that each buying house is anxious to find qualitative suppliers.

The second criterion is chosen to look into the emphasis of buying houses own activities to. Maintain the quality of their ordered products. The mutual first position of this criterion on this ranking has revealed that paying houses are ready to take activities to maintain the quality of the products as they know the value of the qualitative products.

The third criterion is selected to know that how much emphasize buying houses put on the utilizing quality controller as the weapon of maintaining quality. The perfect hundred percent responses have reveled that the buying houses regard this system of employing quality. Controllers to supervise and maintain the desired quality of the products The fourth criterion is chosen in the questionnaire as this is a controversial issue that whether the buying houses are ready to sacrifice profit to gain the quality. The third Position refers the situation that buying houses equalizes the cost with quality and tries to achieve success in both.

The fifth one refers that only few buying houses maintain periodical reporting on quality.

Findings regarding the problems: • • • • • • • •

The dissatisfaction of Garments factory toward their buyers mainly based on the buyers' uncompromising attitude toward the failure of commitment due to contingencies.

From the study I have seen that obstacles to garment exports can be separated into two parts: major obstacles and minor obstacles.

Among the major obstacles causalities such as natural calamities, strike, hartal or political instability are affecting the export marketing of garment products severely.

Among the minor obstacles inefficiency of production process supervision by the buying house is most noteworthy.

Again from the study I have seen that problems of buying houses can be separated into two parts: major problems and minor problems.

Suppliers' poor product quality attacks most severely as major problems of buying houses and as the minor problem shortage of backward linkage industry disturbs buying houses drastically.

The employees of this industry are 'lacking required communication and technical skil1s.

There are no effective institutional programs in public or private universities to teach the

•

required skills to the employees of this industry.

Unproductive employees will hamper the efficiency of export marketing process after 2005.

Garment manufacturers will be heavily dependent on the buying houses after 2005 for managing buyers for them, as it will be more difficult to convince buyer at that time.

Chapter 9 10.0 SWOT Analysis Full meaning of SWOT is Strength, Weakness, Opportunity and Threats. Strengths and weaknesses are influenced by organizations internal environment and opportunities and threats are influenced by organizations external environment. SWOT analysis provides an opinion and judgment whether an organization’s business condition is healthy or unhealthy.

Strength determines how well the company would be able to perform in the light of prevailing resources and competitive condition weaknesses determines lacking or different competitive capabilities in the key functional areas of the company. Opportunity of the company determines company’s important avenues for profitable growth potential utility to sustain in the competitive advantage. Threats determine barriers to companies’ profitability and competitive well being.

Strengths: • The management is solely directed to maintain a culture for the betterment of the quality of the service.

• Employees are sharing good atmosphere in Ababil Knit Composite Ltd. that is why it will give them the inspiration to work efficiently.

• The top level management is very strong. They can take decision on time and manage all things in systematic way.

• The labor forces of the company are cheap and readily available.

Weaknesses: • • • Opportunities:

Ababil Knit Composite Limited do not have adequate transport facilities.

Employee turnover exists because of the dissatisfaction of job in buying house sectors.

Difficult to handle with always upgraded new technology.

•

• • Threats:

• • •

Ababil Knit Composite Limited has planned diversification in product line in order to meet the customer demand for any kind of products. This expansion plan in diversified product would be definitely a positive step to grip competitive advantage and also to raise volume of exports.

Ababil Knit Composite Limited have emphasized on market segmentation in orders on regular basis. In this way, the company can gain potential market opportunities.

Ababil Knit Composite Limited has planned to modernize logistic computer support. The best service could be entertained to the foreign buyers.

Key competitors of Ababil Knit Composite Limited are offering competitive price than Ababil Knit Composite Ltd. which caused major threats to affect company business policy.

Foreign low cost competitors who are investing in the country in this sector are also threats for Ababil Knit Composite Limited.

Ababil Knit Composite Limited is also affected by the govt. regulations of export and import policy.

Chapter 11 Conclusion 11.1 Conclusions It was a great pleasure for me to work in merchandising sector of Ababil Knit Composite Limited, which provides me a wide range of scope to observe different function of buying house industry through the cordial assistance of the employees and seniors. All the employees of Ababil Knit Composite Limited tried to give optimum service.

Now a day the buying Garments Industries are facing a lot of challenges because of changing demand of world. Besides this many competitors are also a main factor that makes this sector challenging. So Ababil Knit Composite Limited should take proper step to survive properly in this sector by removing their weaknesses. They should give authority to take independent decision at high level officer. If that, the company can be benefited because of taking decision the work some time delay. They should justify competitive key factors in the management practices like cost, product quality, image & reputation, distribution & control of resources, capabilities etc.

From the learning point of view I can say that I really enjoyed my internship at Ababil Knit Composite Limited from the very first day. I am confident that these three months internship program at this Garments factory will definitely help me to realize my future carrier in the job.

11.2

Recommendation • Ababil Knit Composite Limited should take their necessary decisions promptly.

• Ababil Knit Composite Limited should appoint efficient designer to innovate new ideas of fashion design for sample section.

• Ababil Knit Composite Limited should introduce new marketing department for establish the marketing plan.

• • •

Ababil Knit Composite Limited should introduce computer facility for every department.

Ababil Knit Composite Limited should provide transport facilities and entertainment allowances.

Ababil Knit Composite Limited would have to introduce expert research and development unit to maintain operational control.

BIPLIOGRAPHY & REFERENCE 11.0 Bibliography and References Books:

• • •

Armstrong Gray, kotler Philip (2004). “Principles of Marketing” (Tenth Edition). India: Pearson education Kotler Philip. (2005-2006) “Marketing Management” (Eleventh Edition). New Jersey: Pearson education.

Steven, j. skinner. And john M. Ivancevich (2004), Business for the 21st century, IRWIN. Inc.

Websites: • Garments sector of Bangladesh official website, www. Bangladesh Garments. Info.

On retrieved on 05.09.2009 • Textile and garment sector of Bangladesh website, www.cleanclothes.org. retrieved on 13.09.2009 • http://buyer&buyer strategy.bd \ • www.bgmea.com • www.quickmba.com • www.learnmarketing.net