Jewelary Mkt Plan

8/8/2019 Jewelary Mkt Plan

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Future Outlook and Trends

Bangladeshs economy has been relatively resilient to the global

recession. It is expected to grow at 6% in the following fiscal year.While we have seen negative effects in the garments industry and

amongst other exporters, the domestic consumption has largely

remained the unharmed. Since our primary market is the domestic

market, at least initially, the economic condition does give a positive

indication.

We have found that present customers are more fashion consciousand more selective than ever before. This means that they are

harder to please but are also willing to pay for the extra effort. So,

as customers get more aware about what they choose to wear,

designer jewellery will meet the standards of the most selective

consumers.

Bangladesh has changed in many manners, but its culture, in

relation to weddings, has largely remained similar. The only

difference is that they are grander nowadays. In other words, the

potential market for traditional jewellery has only increased. We

know that the jewellery market of Bangladesh is primarily

dominated by gold jewellery. 22-carat gold is the most popular type

in Bangladesh, which is approximately 96% pure. Gold is important

in Bangladeshi culture for use as ornaments and also as a method of

saving wealth. In the jewellery market, there have been significant

changes in present market trends and future outlooks. The price of

gold has increased three-fold in the local markets within the last five

years. As a result, substitutes of gold are becoming more popular for

this very traditional part of Bangladeshi culture, creating an

excellent opportunity for Kyanite jewellery.


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SWOT Analysis

Strength

1. Pioneer in the silver jewellery business

2. Brand image

3. Unique design.

4. cheaper alternative in the luxury ornament market

Weakness

1. New company

2. New concept of business, people not used to it

Opportunity

1. Growing trend of silver jewellery

2. price of gold is too high

Threats

1. Possible copy cats entering the market

2. established competitors with decades of experience


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Market Segmentation

Jewellery has traditionally been worn by women. Hence, our targetmarket is women. Since we will be selling trendy and modern

ornaments, we will aim our products to women within the age of 20

and 40, with some variations. As we can see from the pie chart,

about 32% of the entire Bangladeshi population is within our age

and sex group. Ofcourse, it should be remembered that not all of

them are our potential customers yet. Our products wilbe primarily

aimed at urban women with a sizeable disposable income. However,the 32% shows prospects as the country develops and more women

enter the middle or upper middle class of the society.

Target Segment

32%

Male

48%

Females of otherage group

20%

Market Segmentation


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Industry and Market

Forecasts

The jewellery market of Bangladesh is worth more than Tk. 3000

crore. Gold has been the most used precious metal in this industry.

However, its demand has dropped from 45 tonnes to 12 tonnes in

the last five years. The main reason has been the price of gold,

which has increased three-folds from 10,614 per bhori to 29,000 per

bhori. This change in the scenario has sent people looking forcheaper alternatives. Our company will provide one of these

alternatives, placing it an optimum time to enter the market. It is

known the that potential customers are not less eager to purchase

jewellery, its simply the very high price of gold that has stopped

them.

In this turbulent time, our company will be able to establish itself ina rather short time. It is known, that the price of gold has decreased

somewhat very recently in the world market (approximately Tk.

2000 per bhori) but it is no way near the price that most customers

are used to. It can be assumed that the price of gold may fall further

in the future taking away some of our competitive advantage, but, it

is safe to say that the price of silver will remain lower than that of

gold, giving us sufficient edge over our competitors.

Products

We feature designer jewelleries that are designed exclusively for

those women who prefer to indulge themselves in contemporary

fashion. These jewelries are aesthetically designed with entrancing


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designs that defines tradition, style and beauty of a woman.

The bangles, earrings, anklets, bracelets, chains, etc, are provided

with prudent craftsmanship. They are provided in different materials

and designed for an ultra-attraction. Necklace is a renowned fashionaccessory crafted with multicolor precious stones and beads to

exude the class and elegance. Beads of precious stones or

gemstones such as ruby, sapphire, emeralds are used in these

necklaces for greater elegance.

Gemstone Pendants and Necklaces

Unique silver jewellery - Most of our pendants are gemstones set in

sterling silver and are unique and unusual silver jewellery.

We are constantly updating our sterling silver pendant range. If

customers are looking for a specific colour pendant or type of

pendant necklace they can also place an order.

We have red pendants, orange pendants, yellow pendants, green

pendants, blue pendants, pink pendants, purple pendants, brown

pendants, black pendants, white pendants and 925 Silver Chains

(ALL PICTURES ARE NOT TO SCALE, MEASUREMENTS ARE

APPROXIMATE AND COLOURS AND PATTERNS MAY VARY SLIGHTLY

FROM PICTURES AS THE PENDANTS ARE MADE FROM NATURAL

STONES / MATERIALS)

Earring

Stud earrings, Hoop earrings, Dangle earrings

We have a wide range of earrings in all styles and materials. We

feature pierced earrings in popular styles such as chandeliers and


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dangles, buttons styles and others.

For teenage girls/ childrenHuggy earrings - Huggies are a popular style of earring where the

setting actually 'hugs' your earlobe. These can come in different

shapes and sizes, from hearts to rectangles. Many custom jewelers

make huggy earrings because of the many varieties of setting that

can be used to make a good template for their craft. Most times,

stones are channel set in huggy earrings.

Sterling Rings

(Silver Rings,Silver Toe Rings)

We have a wide selection of costume jewelry rings - both designer

marked and unmarked. Materials include rhinestone, cubic zirconia,

faux pearl, moonstone, sterling silver, 18K HGE, enamel, glass, onyx

and cameo. Markings include Avon, Sarah Coventry, 18K HGE,

Sterling Silver,

Bracelets and bangles

Ankle Bracelets, Bangles, Bracelets/Charm Bracelets

We have a wide range of costume jewelry bracelets, including

bangles, cuff bracelets, designer bracelets, link bracelets, charm

bracelets and other styles. Materials include glass, rhinestone,

enamel, pearl, cloisonne, goldtone, silvertone, sterling silver andpearls.

Bridal Jewelry

Kyanite jewelry is perfect for wedding and bridal party. It fits so well

with the saying "Something old, something new, something


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borrowed and something blue." It is also ideal for gifts. We also,

feature pearl items. So romantic and feminine. It is always

considered perfect for brides. Make your wedding special and one of

a kind with KYANITE jewelry.

Sets

We feature a wide range of demi parures and sets in all

combinations.We have a wide range of brooches and earrings sets,

necklaces and bracelet sets, bracelets and earring sets and other

popular combinations.

Other

All sizes and styles of your favorite brooches are found here. We

feature a nice variety of brooches, necklaces pins, nose pins and

jewelry boxes.

There is sure to be a style for all tastes and budgets


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Services

Category Varity within product category Pricerange

Pendants Sterling silver pendants

Stone embedded pendants

300-1800

1000-

4000Earring Chandeliers and dangles

Button style &other

1200-3500

200-1000Ring Sterling Silver ring

Stone embedded silver rings

Silver toe ring

400-1500

1000-3000

200-600Bracelets &bangles

Bracelet

Stone embedded bangles

1000-3000

2000-5500

Bridal Jewelry Gold plated jewelry

Gemstone silver jewelry

5000-15000

5000-25000

SetsBrooches and earrings sets

Necklaces and bracelet sets

Bracelets and earring sets

1000-1500

1000-2500

1000-2500

Other Brooches, necklaces pins, andjewelry boxes

500-3000


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Besides providing our customers with the substantial products, we

will try to make their experience of buying from Kyanite Designer

Jewelry remarkable by rendering intangible benefits through the

following services: The Kyanite Designer Jewelry website(www.kyanite.com) will

have several new features that will add to the company's

competitive advantage in silver jewelry business. For e.g.,

"Design Your Own Ring", etc.

Customization services like gold plating will be provided

Customers can place orders with designs of their own choice to

be delivered within a specified quantity of time Jewelry repair service will be given (if within 6 months of

purchase =free of cost)

Fancy wrapping will be arranged in case of gift items

The sales girl will assist to help the customers choose their

products. Appointments with Kyanite Designer Jewelry designers

will be arranged to help a customer determine the appropriate

styles for her personality in case of Bridal Jewelry.

For frequent buyers, a membership card will be introduced which

will provide discounts, free gifts, etc. A database of popular

customers will be created which will be used to send direct mails

to them on special occasions or to inform them about new

products.

Size of business

We will rent a 450 square feet area shop at Bashundhara City

shopping mall for displaying and selling our product. We will also

rent a 2000 square feet office at Bailey Road where our designers

will work besides other official staff in order to carry out support

activities.
http://www.kyanite.com/http://www.kyanite.com/


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Office Equipment and

Personnel

Office equipment

To increase the utility of our office, we will be requiring the following

items:

6 tables and 15 chairs

2 Apple Mac personal computers,2 desktop personal

computers

Stationary items

Lights and fans

3 air coolers

Broadband internet connection

Color laser printer and scanner

TNT phone and fax machine

Sofa

To decorate our showroom, we will need the following items:

Showcases to display the products.

Lights

Cashier machine

Sofa

Dummies to display the jewelry

Mirror Salesgirl tools

Silver weighing machine


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Personnel

We will be hiring the following workers for the successful running

and maintenance of our business:

Employees

8 Craftsmen 59 Designer 210 Driver 1

Total Employees 19

Sl. Position Number Of Employees

1 Manager 12 Accountant 13 Supervisor 14 Sales Women 35 Showroom Coordinator 16 Security Guard 27 Cleaner 2


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Manufacturing Process

The manufacturing process of a silver jewelry can be divided into 11parts. These are mentioned below:

Design: Fine jewelry begins with a commitment to artistic and

functional design, blended with technical know-how and

experience. This will be done by a designer.

Wax Carving: Designs will be hand carved by our skilled

craftspersons using an assortment of tools to sculpt the idea

from a solid block of

wax, the same way a

sculptor creates a

statue from a solid block

of stone.


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Rubber Molding: The process of rubber molding and wax injection

method will be used to accurately reproduce a wax cast from the

original design.


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Casting Preparation: Wax originals and injected waxes will be

sprued to a trunk to create larger trees in preparation for

lostwax casting.

Then, finished wax trees in the flask will be surrounded under

vacuum with investment, a plaster-like material. Once solidified

around the waxes, the flask will be placed in a furnace and thewax completely burned out, leaving an exact negative void of

the original waxes.


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Casting: Here, the flasks will be removed from the furnace, they

are ready for casting. Silver and other non-ferrous metals are

melted and poured using traditional as well as high-tech

methods.

Inspection: Cast trees will be cleaned then carefully inspected for

completeness and overall quality. The individual items will then

be removed from the tree in preparation for final finishing.


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Rough Finishing: Our talented craftsmen will perform numerous

hand operations while using files, grinding wheels, and other

specialized tools, will refine the details in the rough casting.

Assembly: Many cast jewelry items require further assembly of

parts, such as prongs, findings and two-tone components.

Accurate assembly is only possible by precise brazing using a

jewelers torch.


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Setting: Here, using skill, patience and judgment, our people will

places silver and other gemstones into the design, where they

are held in place by prongs, beads, channels, bezels, and other

forms of setting.

Finishing: Combining expertise and experience, the jewelry finisher

reveals the color and luster of precious metal, transforming the

original design into a finished piece of fine jewelry.


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Physical Plant

The physical plant is actually going to be our workshop where we

will craft the jewelry from silver. It will be located in Tatibazar, Old

Dhaka. It will be a 15ft by 12ft shop where all the craftspersons will

be making the jewelries for us.


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The workshop will have specified space and place for each of the 5

highly skilled craftspersons. There will also be a place for the

supervisor of the workshop. Then, there will be cabinets for keepingthe tools and equipments of each craftsperson. There will be 5 sets

of tools and equipments for each craftsperson.

The lay-out of the workshop is shown below in the image:

Machinery and Equipment

Since, we will make hand-produced jewelry, the level of automation

is low and hence there are no machineries. However, we will require

some 5 tables for each craftsperson and some tools and


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equipments. The following equipments will be bought from The

CONTENTI Company from USA.

Adhesives

Anvils and Stakes

Bench Pins

Brushes

Dispensing

Drills

Gauges

Hammers

Knives

Pliers

Ring Tools

Safety Equipment

Stone Setting

Soldering

Tweezers

Tool Kits

Shears

Suppliers of Raw SilverMaterials

We will mainly import the raw silver materials from various

companies. We will also buy in bulk from wholesalers selling Silver

in Bangladesh. The companies from which we will buy are:
http://www.contenti.com/products/shears.htmlhttp://www.contenti.com/products/tool-kits.htmlhttp://www.contenti.com/products/tweezers.htmlhttp://www.contenti.com/products/soldering.htmlhttp://www.contenti.com/products/stone-setting.htmlhttp://www.contenti.com/products/safety-equipment.htmlhttp://www.contenti.com/products/ring-tools.htmlhttp://www.contenti.com/products/pliers.htmlhttp://www.contenti.com/products/knives.htmlhttp://www.contenti.com/products/hammers.htmlhttp://www.contenti.com/products/gauges.htmlhttp://www.contenti.com/products/drills.htmlhttp://www.contenti.com/products/dispensing-tools.htmlhttp://www.contenti.com/products/brushes.htmlhttp://www.contenti.com/products/bench-pins.htmlhttp://www.contenti.com/products/anvils-stakes.htmlhttp://www.contenti.com/products/adhesives.html


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Reema Jewellers

Wholesale Suppliers of Gold and SilverJewellery Etc.

Address : Mokorrom Hossain Khan Market, Galapotti,, Bogra,

Rajshahi

Harn Interprise Co Ltd

Thailand

Manufacturer

Phrakanong Bangkok 10260

(02)331 9031 (01)923 1937

(662) 3319030

Specialty Metals Smelters & Refiners, LLC

2490 Black Rock Turnpike

Fairfield, CT 06825

Phone: 800-208-2608 or 203-366-2500

Fax: 800-884-7966

Email: [email protected]

Falcon Corp.FALCON METALS & MINERALS, FALCON FUEL LTD. OY

MANNERHEIMINTIE 15 A B,Helsinki - 00260, Uusimaa, Finland

Phone:358-207-289320Fax:358-207-289329

Reema Jewellers

Wholesale Suppliers of Gold and SilverJewellery Etc.Address : Mokorrom Hossain Khan Market, Galapotti,, Bogra,Rajshahi
mailto:[email protected]:[email protected]


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Description of Companys

operation

The Kyanite Jewellery is a company that will design its own

products, manufacture them and sell to the consumers. In other

words, the domestic supply chain will be owned and controlled by

the company completely. On the other hand, the export market will

be dealt with in a different manner, which will be discussed a bit

later.

The operational process starts with the design of the ornaments

being produced at the head office by the designated designers.After approval, they are sent to the workshop for production. It


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should be noted that extensive customer feedback will be taken in

the approval stage. Customers can rate all the designs in the retail

shop and, hence, giving us an accurate feedback of customer

choice. Apart from the projected demand, personalized orders willalso be taken, which may slightly vary from the standard designs.

All these orders are processed and manufactured at the workshop.

The head office has a storage area where the inventory is kept.

When the orders are due, the products are transported to the retail

shop for delivery to the customers.

For international sales, the process is a little different. We do not

have the resources to open retail shops internationally. Hence, a

website will be maintained as a point of interaction with our

international clientele. Any orders made will be processed in a

similar manner as before but they will be shipped through

international carriers. Due to the costs involved, we will only sell in

bulk to retailers internationally and not to individual customers.

Flow of Orders for Goods


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Much of the operational steps have already been described in detail

in the previous section. To make it clearer, we have created these

simple illustrations. As you can see, two different approaches are

taken to domestic and international sales. There is good reason aswe cannot apply the same strategies due to various reasons that

have already been explained. The first flowchart shows the chain of

operation in the domestic market while the second one shows the

international business process.

Technology Utilization

Kyanite Jewellery is a designer Jewellery store. We use highly skilled

labors to manufacture our ornaments. More scientifically, it is a

labor intensive procedure with minimum use of capital equipment.


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The only equipments that will be used the tools that are needed to

make the Jewellery by highly skilled craftsmen. This will be done to

add the value of hand-made products. Tools like knives, hammers

and gauges will be used. Over the years, the technology utilizationis also expected to be the same.


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MarketingPlan


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Pricing

At Kyanite Designer Jewelry, we are very committed to bringing high

quality silver jewelry to women and the prices will reflect a

reasonable rate since we are new market entrants. We will be

following the Market Penetration pricing strategy in order to allureour target customers. This strategy will help us build a large

customer base by acquiring new customers and diverting other

customers towards buying our brand rather than the rivals. Later,

once the brand image is established, we will go for significant mark-

up pricing in our home country. On the other hand, for the export

items, we will charge a premium price since the costs incurred in

selling overseas will be much higher. The overall price range of

items begin from Tk.200 and end at around Tk.25,000 at Kyanite

Designer Jewelry.

Distribution

Place: Our company office will be at Bailey Road. We will belaunching Kyanite Designer Jewelry with one exclusive showroom at

Bashundhara City shopping mall.

We will employ use of conventional distribution channel as well as

direct channel distribution for our product circulation. Direct channel

distribution system will be utilized at home country while

conventional distribution channel (through overseas intermediaries

like wholesalers and retailers) will be used for the export ventures

abroad.


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Promotion

Based on extensive research conducted on women's shopping

behaviors as well as Kyanite Designer Jewelrys own research

among Dhaka women, the following marketing strategies will be

employed:

Build awareness of brand and services to exemplify strong

store reputation.

Provide customers with a sense of access to "inside

information" and exploit the power of a woman's personal

network by leveraging marketing collateral designed for

sharing and encouraging referrals.

Utilize personal referrals/word of mouth to assemble a largeshare of customers.

The following promotional tactics for generating buzz and

awareness about Kyanite Designer Jewelry will be

implemented:

Word of mouth via networks of customers

Unique visual displays in storefront on a weekly basis

Public Relations

Direct mail such as postcard notices that are targeted

specifically to those customers who have purchased at least

once from the store

Sales Promotion such as store events and bi-annual sales

Kyanite Designer Jewelry web site (www.kyanite.com)

Print advertisements (in newspapers, billboards, leaflets and

magazines)
http://www.kyanite.com/http://www.kyanite.com/


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Television advertisements

Other important marketing strategies, such as developing strong

customer relationships (retention), will utilize a different mix ofmarketing programs.

Marketing does not necessarily mean forms of advertising of

products, but fully utilizing all of the company's resources intogetting the customers to buy our products. In this case, we will

explore the three marketing strategies that are involved in e-

commerce marketing, including posting and positioning, and

traditional marketing, including advertising and the combination of

all to satisfy consumer needs as effectively and efficiently as

possible.

Control

We will try to follow our set-up plan in order to establish a silver

jewelry store with a high value brand equity. We will constantly

monitor our tracks and take corrective measures if any adverse

situation arises.


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Form of ownership

Partnership Business

Identification of partners

Minhaj Isa Hossain

Nadia Kader

Fahima Pervin

Farzana Kashem

Shamin Ahmed Khan

Inamul Bari

Istiaq Ahmed Nishar

Terms of Agreements

3 Years agreement

Have vision to expand the business

60% of profit earned in a year will be reinvested till further

notice.

Responsibilities will be specific and realistic

Any kind of loss or profit will be distributed among the

partners according to their contribution for that particular loss

or profit.

Partners should have good understanding between each

other.

Any kind of unethical behavior will not be accepted.

Confidentiality of the firm must be reserved.

All the partners should sit for a meeting to discuss future plan

and recent threat for once in month.

No products will be sold on account to the customers


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Any of the director can not argue about the terms or

agreement given above

Authority of Principals

Here, in the business the manager will have the check signing

authority. Sometimes it is important to finance something instantly

and in that situation, if manager do not have the authority to sign

the check it we might loose any chance to be benefited!

Manager

Jewellery Designer Product

Department

Jewellery Designing

Department

DirectorsDirectors

Supplier

Jewellery Site

Officer

Supervisor

Employee

Accountant

PROCESS

DAT

A


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.

Management will be totally decentralized. And he can command

his/her substitute to have the best output. We are putting emphasison decentralized management system because if we maintain chain

of command on the organization then it would be time consuming

and in a sense decision making will be a lengthy process.

Backgrounds of theManagement Employees

Our management employees should be experienced and good

communicator. As our shop is about selling jewellery to the people,

so sales person should be good in communication with the

customers. The officers who will work on site should be experienced

as well. We need experienced person here because to manage the

shop is not an easy task and to have cost efficiency and to control

any unexpected situation, an experienced person is much better

choice. An experienced person does not mean that the employees

must be educated. Any one who has deal with such event for long

time can be eligible for the


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Roles and Responsibilities

Manager

The manager in the firm will deal with all official and related issues

of the business. All kinds of official affairs will be reported to the

manager. Moreover, manager will possess the authority. The two

managers have to take all the responsibilities.

Job description

After the seven owners he is the second most important and

powerful position in the shop. The main responsibility of this post is

to carry out the policies issued by the owners. He also oversees the

present ongoing situation in the shop so that everything goes

towards shops prosperity.

Duties & Responsibilities

o Coordination and control all department.

o Always need to oversee the present ongoing situation in the

shop

o Implements policies for the sound growth of shop.

o Maintain a sound environment in the factory through

monitoring the people

o Resolve any critical issues related to HR or day to day

operations

Jewellery Designer:

Reports to: - Manager

Job Description


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The two designer proofs their creativity through their unique, extra

ordinary and exclusive designs. After the design are made they are

send designing department and then the manufacturing department

where the jewellery is created.

Accountant:


Job Description

Keeping record of the inventory, deal with the employees salary,

financial support, and other issues. The accountant will report to the

manager about the financial condition of the firm on a daily basis.

There is only one accountant who looks after all transactions.

Duties and responsibilities

Preparing the financial statement for the organization on each

six months.

Recording inventory items, whether going out or in and how

much is there on the store etc.

Recording daily sales and income on daily basis.

Jewellery Site Officer:

These are the group of employee who will be posted on the event

what we will organize. Their duty will be managing the

manufacturing site, monitoring the assigned task and reporting the

information to the manager. The recruitment of these people will be

on contractual basis.

Product supervisor and sales man:


Product supervisor will be in charge of managing the employees

who will show the products to the customer. He will be a supervisor


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as well as sales man, will get bit higher salary and will report

manager about the daily sales and which product are sold. There

are two sales people who deal with the customer.

Job description

Since our customers will be both male and female, and because of

our culture, there are many customers who normally do not feel

comfortable to talk with an opposite sex, so we will keep sales man

and woman both.


o Sales the products

o Behave such a way with customers so that they feel

comfortable to buy our products.

Cleaner:


Job description

He/she will be responsible to keep the shop environment neat and

clean. There are two cleaner.


o Clean and sweep the shop floor.

o Maintain a neat and clear environment in the shop

Clean the shop equipments

Driver:


Job description

Drivers duty is to carry jewellery from the manufacturing

department to the shops and for the use of the employee to travel.


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Security Guard:

Two security guards will be recruited on shifting basis on our shop.

Their salary will be decided according to the typical salary rate on

the market.


Job description

He has the job of keeping the security system of the shop and helps

the Factory Manager to keep the shop secured.


o Handle any awkward situation.

o Ensure shop security.

o Examines doors, windows, and gates to determine that they

are secure.

Payment Policies

Salaries


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All the employees except site officers will get monthly salary for

their regular job. Their salary plan will be decided by the normal

salary rate of Bangladesh. In addition, if any change on pay scale is

required it would be decided by the discussion between directorboard and employees. Beside this, the employees will get a

proportion of sales revenue if there are good profits in any time.

Manager

Others

o Yearly holy day 15 days without government declared holy

day.

Two bonuses per year

Jewellery Designer:

Sales men/women:

Basic allowance 8,000

Travel Allowance( 10% of the

basic salary)

800


Travel allowance (10% of the

basic salary)

5,000

Mobile bill (5% of the basic salary) 1,000


Travel allowance (10% of the

basic salary)

12,000

Mobile bill (5% of the basic salary) 3,000


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Others

Maternity Leave: This is one type of leave that is given to

the female workers (sales women) who are expecting. But this

leave is given to the female workers during the first twomonths of pregnancy and the last two months. In the

meantime, they will have to continue with their work.

Yearly holy day 15 days without government declared holy

day.

Two bonuses per year

Security Guard:


Others

Yearly holy day 15 days without government declared holy

day.

Two bonuses per year.


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Assessment of Risk


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Evaluation of Weaknesses

Kyanite Jewellery is an absolutely new company entering a rather

old industry. That itself is a weakness for the company. There are

certain aspects of looking into this point. One would be that there

are existing competitors who are more experienced and with more

resources and influences. They are better connected and have

goodwill, which is vital for any type of business. As opposed to that

Kyanite has virtually no effective goodwill. This makes the

marketing plan of the company vital to its success, especially in this

scenario. Furthermore, Kyanite has limited amount resources as

opposed to the competitors who have been earning profits for a long

time. This situation makes it compulsory for the company to use its

initial resources very efficiently.

Also, it should be remembered that this company is introducing a

relatively new concept in the Bangladeshi market, which is, designer

silver jewellery. It might take a little time for potential consumers to

accept this concept. Another problem with the introduction of

something new is the possibility of others copying the idea. When

the established brands see that silver jewellery is lucrative, they will

most probably introduce this product as well, creating effective

competition almost immediately. These weaknesses will remain withstarting of this company and the only thing that can be done is

making contingency plans to tackle these issues.


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New Technologies

Kyanite Jewellery is a designer jewellery firm that uses craftsmen to

produce its products. As a result, it uses minimal technology to

make its products. It does not have any plans on using modern

technology to produce them. However, there is a chance that other

companies may use more advanced technology. But it should be

noted that currently most jewellery makers use relatively primitivemethods to manufacture their products. We have seen that

companies like OTOBI changed the furniture industry by introducing

assembly lines. There is a real threat that it may be repeated in our

industry. However, Kyanite will not change its method since it aims

to gain its competitive edge with the tag hand-made.

Contingency Plan

There is no guarantee that our proposed business will work out

properly. Hence, we have made a contingency business plan to use

most of our assets in a slightly different venture. We intend to use

the store in Bashundhara City shopping mall to open a gift shop. It

will carry miscellaneous products ranging from greeting cards to

stuffed animals, photograph frames etc. We will also have a section

of jewellery where our silver ornaments will be sold. This will allow

us to prevent the disposal of fixed assets related to the manufacture

of silver ornaments. Having a wide range of products will allow us to

slowly focus on the products that sell best.


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Financial

Plan


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Assumptions

Since we have many different types of designs which and all

has different costs, therefore we are assuming that on

average, the cost per unit would be Tk4750 which is deduced

below:

Silver Per Bhori (11.66 grams) Tk450

Stone Per Unit Tk3,500

Wages Per Unit Tk800

Cost Per Unit Tk4,750

We will set the price by adding 70% Mark-Up on the Cost

Per Unit, which means that the result per unit (according to

this cost) will be Tk8,075, having a contribution margin of

Tk3,325.

Net Sales in the first year will be 50% of the third year and

Net Sales in the second year will be 75% of the third year.

Interest Rate on Loan will be 15%.

Depreciation will be 10%, calculated by the Straight Line

Method.

Tax Rate on the taxable income will be 10% flat.


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The company will maintain its inventory in such a way that it

will always have an inventory level of 800 Bhori (9328 gm) of

silver and 215 Stones and this total costs around

Tk1,000,000.

Pro forma Income StatementItems 1st Year 2nd Year 3rd Year

Tk Tk Tk Tk Tk Tk Tk Tk Tk

Net Sales 10,369,3

93

15,554,0

90

20,738,78

6

Less: Cost Of

Goods Sold

6,099,64

3

9,149,46

5

12,198,00

0

Gross Profit 4,269,75

0

6,404,62

5

8,540,786

Less:

Operation

Expenses:

Salaries 131,00

0

131,00

0

131,00

0

Rent 900,00

0

900,00

0

900,00

0

Stationary 60,000 60,000 60,000

Depreciation 290,00

0

290,00

0

290,00

0

Insurance

Premium

15,000 15,000 15,000

Miscellaneous 200,00

0

200,00

0

200,00

0

1,596,50

0

1,596,50

0

1,596,500

EBIT 2,673,250

4,808,125

6,944,286


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Less: Interest

Expense

1,050,00

0

1,050,00

0

1,050,000

EBT 1,623,25

0

3,758,12

5

5,894,286

Tax 162,325 375,813 589,429Net Income 1,461,42

5

3,382,81

2

5,305,357

Cash Flow Projections

Items 1st Year 2nd Year 3rd YearTk Tk Tk Tk Tk Tk Tk Tk Tk

Equity

(Cash)

14,000,0

00

19,851,4

25

23,524,23

7

Add:

Bank Loan

7,000,00

0

Starting

Cash

21,000,0

00

Less:

Capital

Expenditur

e

2,900,00

0

18,100,0

00

Less:

Inventory

1,000,00

0

1,000,00

0

1,000,000

Less:

Loan

Repayment

7,000,000

Add:

Net Income1,461,42

5

3,382,81

2

5,305,357

Add:

Depreciatio

n

290,000 290,000 290,000

NET CASH

FLOW

18,851,4

25

22,524,2

37

21,119,59

4


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Pro Forma Balance Sheet

Items 1st Year 2nd Year 3rd Year

Tk Tk Tk Tk Tk Tk Tk Tk Tk

Fixed

Assets:

2,900,00

0

2,900,00

0

2,900,00

0

Less:

Depreciation

290,000 2,610,00

0

580,000 2,320,00

0

870,000 2,030,000

Current

Assets

19,851,42

5

23,524,23

7

22,119,59

4

Less:

Current

Liabilities

- - -

Working

Capital

19,851,4

25

23,524,2

37

22,119,59

4

Net Assets 2246142

5

25,844,2

37

24149594

Financed

By:

Equity 14,000,00

0

14,000,00

0

14,000,00

0

Bank loan 7,000,000 7,000,000

Net Profit 1,461,425 2246142

5

3,382,812 25,844,2

37

5,305,357 24149594

Break-Even AnalysisBreak even in terms of Sales Unit = 2,846,500 x 3 / 3,325

= 2,568 Units

Break even in terms of Sales Revenue = Tk

2,568 x 8,075

=

Tk20,738,786


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Documents

Jewelary Mkt Plan