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Executive Summary:_________________________________
Jute is a versatile, natural fiber that has been used for thousands of years to make things such as
rope, twine, hessian bags, rugs, and much more. While it is still being used extensively around
the world, it is not as popular as it could have been. Given the increasing focus on environmental
issues these days, jute good products can be put into the lime light, as they are environment
friendly. Taking in view the prospects, this is the high time to promote the export of the jute-
diversified products using limited resources.
Although Bangladesh is famous for jute and allied fibers, garments industries swept in
and have developed due to relative advantage and cheap labor cost. As there is the Multi fiber
concept of merger jute with other natural and synthetic fibers, jute has bright future for using
them in the various textile areas. It needs wide support for production and marketing of such
diversified products. As a result, the Govt. of Bangladesh initiated policy programmed for the
production of diversified jute goods through private sector.
The government’s new jute policy is expected to focus on enhancement of the country’s
production capacity, diversification of the product base and growth of export earnings. It would
be good if it were complemented with good corporate governance practices within the remaining
BJMC (Bangladesh Jute Mills Corporation) mills to ensure that both public and private mills can
compete on equal footing.
In France, there are many types of products in terms of Cloths, Bags, Wallets, Purses,
Mats, Rugs, Carpets, Decoration Pieces, Gifts & Crafts, Sacks, Hessian Cloths, and Burlap Bags
in today’s market. As variety in such products is accepted there, we sense the opportunity to
create a niche market here for biodegradable jute products, which will not only be eco friendly
but also be less costly.
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Introduction:____________________________________
Origin of the Project
This project titled Marketing Jute Products in France is prepared as the project paper for the
International Marketing (MKT 382) course to fulfill a partial course requirement. This report
has a formal approval of Mr. Syed Kamrul Islam, Senior Lecturer, School of Business, North
South University.
Objective of the Project
The main objectives of the project would be:
o Identifying the target market
o Understanding the taste and preferences of the target market
o Identify the major competitors and try to get a competitive edge over the competitors.
Scope
This report has emphasized mostly on the international marketing strategy planning. A complete
business plan along with detailed financial analysis is not covered in this report.
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Limitation
o Comprehensive national and global jute market stats may not be available
o No past market research on jute products usage in France is easily available
o Plenty of time is required to perform adequate research on entering a new country, which is
not available.
o At times we may need to use logical estimations or projection about the market which may
not be accurate.
Methodology
First we will collect secondary data using these sources
o Journals and periodicals
o Books
o Internet
Then we will collect primary data by interviewing experts in Bangladesh jute industry. Finally
we will be putting these all together and analyze everything.
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Company Overview:_________________________________
Heritage Jute Products Ltd. is a public limited company. It came into being in the year 2003.
Initially, it conducted its operation within the country of its origin, Bangladesh. Later on in 2007,
it expanded its activity by involving in international business through exporting. Heritage Jute
Products Ltd. Company’s only job is to deal with the golden fiber of Bangladesh that is jute. It is
a trading company, which deals with almost every possible variety of jute products.
The company offers raw jute as well as various customized jute products. Jute can be utilized in
producing several objects that are capable of using in different phases of life. There is virtually
no end of it. Jute can even be used in decorating the interior of a luxury car. Basically Heritage
Jute Products Ltd. plays the role of an intermediary to transfer the jute from the producers to the
ultimate users of it. It makes our job even harder. At the same time, we need to satisfy both the
parties. Given that, our tone of negotiation is completely different for both the parties. As, we
need to make people understand in their own language. We give our best efforts in maintaining a
healthy relationship with our clients who remain in two different directions. Besides, we keep on
searching for innovators who are producing newer items from jute.
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Our Offerings:______________________________________
Heritage Jute Products Ltd. Company offers various Jute Products at unbeatable quality & price.
The traditional excellence of Company artisans are reflected in a wide range of jute handicrafts
of utility, decoration, and novelty. A beautiful mosaic of Jute handicrafts that comprises of
carpets & floor coverings, wall coverings & window dressings, table mats & table-wares,
swings, hammocks, office bags, table covers, table mats, pen and pencil stand, wall hangings &
room decor, bedspreads & bedroom slippers, blankets & shawls, skirts & jackets, shopping &
travel bags and a host of other home textile made-ups.
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The jute handicrafts of Bangladesh are a unique blend of aesthetic
sense and utility. Artisans have experimented with the fiber. Jute Yarn,
Cloths, Bags, Wallets, Purses, Mats, Rugs, Carpets, Decoration Pieces,
Gifts & Crafts, Sacks, Hessian Cloths, Burlap Bags, Ropes/Twine etc.
made of high quality Jute are offered by Heritage exclusively. Since
jute is very much environment or eco friendly, products made of jute
are becoming the most popular home appliance around the world for
everyday use.
Product Market:_____________________________________
The Product Outline
The basic feature of that product will be that it will come only from natural fibers. There will be
no artificial and chemical plastic or synthetic raw materials. The raw materials of the products
will be the fresh natural fibers and they will be collected mainly from various places (Dinajpur,
Rajshahi, Barisal, Shylet etc) of the country. The company already has contract with some mills
for preserving fibers and there will be quality assurance teams to look after them. Raw Jute will
be preserved naturally and will be free from the chemical. As we are mainly concentrating on
the natural aspects, the mission statement of our product is “Use natural products to save
the nature.”
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Product Life Cycle
Despite of being a vintage business, the Jute Industry is yet to mature in our country. Our
company is in its growing stage and to explore the market we are now planning to go to France.
Jute products have a good market, domestic as well as in foreign countries like USA, UK,
Germany, Australia, and the Middle East. The products in demand include jute shopping bags,
blankets, apparels, handicrafts, wall hangings, and floor coverings. While new markets are under
exploration through consumer awareness and product promotion programs, it will not be
surprising to find this natural fiber become a material for regular use by consumers all over the
world.
Although Heritage Jute Products Ltd. has been exporting jute products to many European
countries, it has never export any products to France. Recently it has taken steps to export jute
made products in that country. For this, it has set up an ongoing campaign to create attention of
its product.
Market Feasibility in France In France, there are many types of products in terms of Cloths, Bags, Wallets, Purses, Mats,
Rugs, Carpets, Decoration Pieces, Gifts & Crafts, Sacks, Hessian Cloths, and Burlap Bags in
today’s market. However, not all these companies come from natural aspects. Therefore, we
have sought out this market as a niche market and have chosen to launch a fresh product, which
will not only be eco friendly but also be less costly.
Customers, being more health conscious; now want to take something comes directly from
nature. Consequently, many French are shifting their taste over the trend. All these have
influenced us enough to make a step in this ground.
The Heritage Jute Company along with its client French companies surveyed different people
from the different areas, age groups and came to know that now they want something new and
refreshing. Keeping this in view, we have chosen something innovative by adding some new and
refreshing jute products in the market.
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Customers, mainly children and old person face skin cancer problem for using low quality
artificial and plastic products. On the other hand, patients suffering from various diseases also
seek for the natural fiber made products for their health. So far, we can say that our product will
be the first priority, as it is made from the fresh natural fibers and the products will have no side
effects, as we are not using any artificial color or objects. Therefore, the market growth for this
particular product is reasonable.
History and Culture:_________________________________
History:
France is an independent nation in Western Europe and the center of a large overseas
administration. It is the third-largest European nation (after Russia and Ukraine).
In ancient times, France was part of the Celtic territory known as Gaul or Gallia. Its present
name is derived from the Latin Francia, meaning "country of the Franks," a Germanic people
who conquered the area during the 5th century, at the time of the fall of the Western Roman
Empire. It became a separate country in the 9th century.
Since the 17th century, France has played a major role in European and world events. In the 20th
century, it has experienced numerous crises, including the devastation of two world wars,
political and social upheavals, and the loss of a large empire in Indochina, Algeria, and West and
Equatorial Africa. It has, however, survived and emerged from the ruins of World War II to
become an important world supplier of agricultural and industrial products and a major partner in
the EUROPEAN COMMUNITY (EC, or Common Market).
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Today, the term metropolitan France refers to the mainland departments and CORSICA, a large
island located in the Mediterranean Sea off the coast of Italy that has been a part of France since
1768. France has six overseas departments: FRENCH GUIANA in South America;
GUADELOUPE and MARTINIQUE in the West Indies; MAYOTTE, an island formerly part of
the Comoros, located in the Indian Ocean; REUNION, an island in the Indian Ocean; and
SAINT PIERRE AND MIQUELON, islands off the east coast of Canada. In addition, France has
numerous small possessions called overseas territories. These include a group of widely scattered
islands in the South Pacific, which are administered from Tahiti and are known collectively as
FRENCH POLYNESIA; FRENCH SOUTHERN AND ANTARCTIC TERRITORIES; NEW
CALEDONIA and WALLIS AND FUTUNA ISLANDS; and many small islands in the southern
oceans, including the Kerguelen and Crozet archipelagos and the islands of St. Paul and
Amsterdam (Indian Ocean). The overseas departments and territories are represented in the
French National Assembly.
Facts and Statistics:__________________________________
Location Western Europe, bordering Andorra 56.6 km, Belgium 620 km, Germany 451 km,
Italy 488 km, Luxembourg 73 km, Monaco 4.4 km, Spain 623 km, Switzerland 573 km
Capital Paris
Climate Generally cool winters and mild summers, but mild winters and hot summers along
the Mediterranean; occasional strong, cold, dry, north-to-northwesterly wind known as mistral
Population
60,424,213 (July 2004 EST.)
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Ethnic Make-up
Celtic and Latin with Teutonic, Slavic, North African, Indochinese, Basque minorities
Religions Roman Catholic 83%-88%, Protestant 2%, Jewish 1%, Muslim 5%-10%, unaffiliated
4%
Government
Republic
GDP (PPP)
$2.086 trillion
Per capita
$33,334
Culture of France
Paris is a city for art of every form, and has hundreds of art boutiques, art and antique dealers, art
galleries, special art exhibits, the symphony, the ballet, cinema and the theatre. Therefore, French
people posses a very artistic mind. They love to decorate their house with colorful cloths and
carpets. By using jute, we can make such attractive and beautiful product, which has a big
demand in France.
Business Culture
To export jute product in France we need to know their business cultures. If we can understand
their business culture then it will help us to build a satisfactory long-term relationship.
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French Society & Culture
Cuisine
Food is one of the great passions of the French people.
French cooking is highly refined and involves careful preparation, attention to detail, and
the use of fresh ingredients.
It varies by region and is heavily influenced by what is grown locally.
French Family Values
The family is the social adhesive of the country and each member has certain duties and
responsibilities.
The extended family provides both emotional and financial support.
Despite their reputation as romantics, the French have a practical approach towards
marriage.
Families have few children, but parents take their role as guardians and providers very
seriously.
Relationships - Public vs. Private
The French are private people and have different rules of behavior for people within their
social circle and those who are not.
Although the French are generally polite in all dealings, it is only with their close friends
and family that they are free to be themselves.
Friendship brings with it a set of roles and responsibilities, including being available
should you be needed. Friendship involves frequent, if not daily, contact.
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Business Meetings Etiquette
Appointments are necessary and should be made at least 2 weeks in advance.
Appointments may be made in writing or by telephone and, depending upon the level of
the person you are meeting, are often handled by the secretary.
Schedule meetings during July or August should not be made, as this is a common
vacation period.
If you expect to be delayed, telephone immediately and offer an explanation.
Meetings are to discuss issues, not to make decisions.
Avoid exaggerated claims, as the French do not appreciate hyperbole.
Business Negotiation
French business emphasizes courtesy and a fair degree of formality.
Wait to be told where to sit.
Maintain direct eye contact while speaking.
Business is conducted slowly. You will have to be patient and not appear ruffled by the
strict adherence to protocol.
Avoid confrontational behavior or high-pressure tactics. It can be counterproductive.
The French will carefully analyze every detail of a proposal, regardless of how minute.
Business is hierarchical. Decisions are generally made at the top of the company.
The French are often impressed with good debating skills that demonstrate an intellectual
grasp of the situation and all the ramifications.
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Never attempt to be overly friendly. The French generally compartmentalize their
business and personal lives.
Discussions may be heated and intense.
High-pressure sales tactics should be avoided. The French are more receptive to a low-
key, logical presentation that explains the advantages of a proposal in full.
When an agreement is reached, the French may insist it be formalized in an extremely
comprehensive, precisely worded contract
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The Market:________________________________________
Marketing Mix
Market Segmentation
While preparing the marketing mix for jute products, first of all, we definitely want to segment
the market properly. Here we have done the segmentation based on these criteria:
Usage-based Segmentation:
Products such as clothes, shoes, bags etc are used daily. Some products such as handicrafts,
showpieces, and room decoration items are used occasionally. Therefore based on this usage
type or pattern, we focused on usage-based segmentation.
Geographic Segmentation:
This is a pretty straight forward one. Based on where our potential customers live or purchase,
this segmentation identifies three types of places: Urban, sub-urban, and rural.
Demographic Segmentation:
While doing the segmentation analysis, this demographic segmentation got maximum emphasis.
This is simply because buyers’ demography directly relates to the marketing strategy to be
followed. Among various demographic criteria, we choose to focus on age and income level of
the buyers.
Usage-based
o Day-to-day use
o Occasional use
Geographic
o Urban
o Suburban
o Rural
Demographic
o Age
o Income level
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Target Market
In a glance, this is our target market:
o The upper class, the upper-middle and the middle class people
When we talk about the jute products, it is not always the cheapest one actually. Even in
Bangladesh if we observe the market price of jute products and alternative products of the same
category, we would see that jute products’ price are not significantly cheap, rather it is at times
even higher. Therefore, when we consider export logistics cost, and promotional cost in a foreign
market, all these costs add up pretty high and we therefore cannot really position it as a ‘cheap’
product.
Therefore, our primary target market will be people of solvent income category, that is, the upper
class, the upper-middle, and the middle class income people.
o People aged between 25 - 50
The age group we would be targeting is people aged 25 to 50 years. Reason is obvious – people
of this age group are generally the purchase decision-makers in households. In addition, we
would try to emphasize attracting women buyers, as generally they are more willing to spend on
home decoration and furnishing items.
o Living in the urban and suburban areas
Initially we would focus on launching in urban areas and gradually moving to suburban areas.
Therefore, based on our reach, we target buyers of urban and suburban areas.
Heritage Jutes’ Target market
o The upper class, the upper-middle and the middle class people
o Aging between 25- 50
o Living in the urban and suburban areas
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Product Positioning
Market positioning will play the big role in determining the product’s success. We have this
basic plan to position jute products in France:
o Appeal to buyers’ logical mind:
First of anything we need to give buyers a good reason why they may buy products made of jute
when alternatives are easily available. We appeal to them logically saying that jute products are
equally well designed and good to eyes (compared to the alternatives produced using artificial
raw materials) if not better. As these products are environmentally friendly, buyers are actually
getting more value paying less (or same).
o Appeal to buyers’ emotional mind:
We want to place the product in the buyers’ emotional mind by stating boldly that they are
actually being environmentally responsible when they are using jute-made products. As
Europeans are more willing to use eco-friendly products, applying this strategy successfully will
ensure a big edge for us over competitors.
o With eye-catchy design
o Ger ‘More-for-less’ Appeal to buyers’ LOGICAL mind
o Use of bio-degradable product to save environment
Appeal to buyers’ EMOTIONAL mind
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Communication & Distribution strategy
o Push marketing
As a new firm with limited budget in the international arena, we plan to go with Push Marketing
strategy for initial years. The reason is as following:
Internationally jute is growing popular day-by-day, but it still is not a very familiar name in
French market. If we go for pull strategy, that is to create demand from the consumers’ end
directly, we will require huge investments to first familiarize the product and then promote it.
So we want to attract the channel members first to push the products through.
o Indirect marketing channel
As we are going with Push marketing, we definitely have to go through an indirect channel that
is from us [manufacturer and importer] to importer/agency, distributor/wholesaler, and retailer.
Promotions
o Trade shows
For promotion of jute products, we plan to participate all major trade shows, trade fairs and
similar events in France. This is because in these events we find more businesspeople who are
looking for lucrative business opportunities whom we want to attract to promote our products.
o Traditional ads
As we grow gradually, we would aim to target consumers directly using traditional ads and
media.
Manufacturer Wholesaler Retailer
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Competitive Analysis:________________________________
Competitors within the industry
In jute product market in France, we have to compete with firms of other major jute-producer
countries.
Indian firms are particularly dominant here in French market. Majority of the market share is
captured by big Indian jute-diversified-product firms. In addition, there is competition from
newcomer firms in the industry that is from Vietnam, Thailand etc. countries.
Compete with firms of
India
China
Myanmar
Nepal
Thailand
Vietnam
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Competition from alternative and substitute products
o Competition from alternative products: As a raw material, jute has hundreds of artificial
alternatives such as Rayon, Acetate, Nylon, Polyester, Olefin etc. Most of these fibers are
cheap and used heavily for consumer and industrialized products.
o Competition from substitute natural fibers: Apart from Jute, there are dozens of other
natural fibers that is used to produce products of the same category. Some of the competing
natural fibers are: cotton, flax, ramie, sisal etc.
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SWOT Analysis:____________________________________
Strengths
The strength of the industry lies in the concentration of mills predominantly in one
geographical region – Bangladesh, which is climatically ideal for the cultivation of jute.
Though our main competitor India is the largest producer of raw jute in the world,
Bangladesh produces the best quality fiber. Therefore, our jute products have the quality,
which will become very successful in France’s sophisticated, quality-conscious, high
tech, and competitive market.
Another major strength of the industry lies in its adaptation and surviving capabilities.
Bangladeshi jute has a history of over hundred fifty years. In this long period, it has faced
various odds and overcome many hurdles. The jute culture in Bangladesh is deep rooted
and most importantly, there is no dearth of cheap labor. It will make our variable cost
lower and thus give an advantage in French market.
Bangladeshi jute, like Brazilian coffee has a global image in developed countries like
France.
Weakness
Like other Local bag makers, we have to buy jute fabric from the domestic market at
higher prices than what foreign importers pay for the same fabric from Bangladesh. As
bag makers in Bangladesh do not get export incentive - a setback that makes the local
industry less competitive than its rival in India, the main importer of jute fabric and our
main competitor in France.
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The major weakness is in the production process. Lack of advanced technology/machines
and Lack of skilled labor and skilled designers in the jute sector leads to production of
inferior quality products resulting in loss of competitiveness in the French market.
Inadequate R & D facilities at both public and private levels in the Jute sector leads to
absence of continuous product innovation resulting in loss of growth opportunities
whiling other major competitors like India and China are far ahead from us in this issue.
Lack of awareness as a result low demand of Jute diversified products in the domestic
market is been a major obstacle in internationalization.
Bangladesh Jute Research Institute (BJRI) lacks close coordination with the Ministry of
Textiles & Jute as well as Jute Industries as it is under the Ministry of Agriculture. This
lack of coordination creates a problem in maintaining the supply chain of certified jute
seeds on which the quality of Jute fiber vis-a-vis the production of quality Jute goods
depends.
To market our product we have to depend on our “Area Distributor”. So we face
difficulty in changing any strategy like pricing. Our sale is also dependent on their
marketing effectiveness.
One of the major weaknesses of our company is financial problem. For this problem
sometimes we cannot implement all necessary toward product development also
management development.
Opportunity
Jute is the only globally recognized and accepted ‘green packaging product’ from
Bangladesh. Use of bio degradable products like jute is encouraged not only in
packaging but also in many other industrial inputs as
(a) Backing cloth in carpet industry,
(b) Geo jute/jute reinforced composites in civil and road construction,
(c) Alternative to wood products in many domestic and industrial uses
(d) Automotive industry raw material for paper industry,
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(e) Production of various interior decorative products including flooring.
Researchers suggest that use of renewable non-wood based materials like jute and sisal can
reduce the use of traditional materials like wood, minerals and plastics. (Leao, 1998)
Like Many countries, France has taken various initiatives to popularize biodegradable green
products. This has definitely increased the prospect of launching jute products.
A global initiative for banning environment-unfriendly shopping bags and declaring the
year 2009 as the International Year of Natural Fibers by United Nations has fuelled
demand for jute bags. According to media reports, France and Germany will ban the use
of non-biodegradable polythene bags next year. Also, the US is looking for a viable
alternative to polythene bags. This move is likely to increase the use of jute, products.
Moreover, research on the development of jute pulp has opened up huge potential for
this natural fiber. The International Jute Study Group (IJSG), which was earlier known
as the International Jute Organization (IJO), has been successful in developing jute pulp
in different laboratories all over the world. Among these two are from Bangladesh,
namely Bangladesh Jute Research Institute (BJRI) and Bangladesh Chemical
Industries Corporation (BCIC). These two institutions can work in coordination with
Centre Technique du Papier (CTP) of France for successful commercialization of the
proposed jute pulp technology would open up new vistas both for the jute and paper
industry.
Threats
1. In the post MFA quota free era, different types of non tariff barriers (NTBs) with far
reaching impact on the work place will hamper jute exports mainly to developed
countries like France. The most likely NTBs will be in the areas of
(a) Environment protection, (b) Social commitment
Like Many EU countries, France has developed different standards of their own for the
protection of the environment. Increased public awareness of environmental impact of products
has prompted the rise of a new body of labeling called Eco-labeling or environmental labeling.
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The objective of the program is to provide necessary information for environmentally conscious
consumers on products that have less environmental impact. The world’s first Eco-labeling
scheme was introduced in France in 1988.
This program encourages manufacturing industries to be actively involved in environmental
protection and pollution control by designing and developing environmentally friendly products.
However, during trade negotiations Eco-labels may be used as a non-tariff barrier also.
UNCTAD studies showed that Eco-label had created difficulties for some sectors of products, in
particular paper and pulp, bags and accessories from developing countries.
2. France Market is sophisticated, quality-conscious, high tech and competitive which will
create a challenge for Our jute products.
3. Social and labor standards are increasingly being linked to the trade issues. The most
commonly used criteria to judge ethical, social and labor practices are:
(I) Fair Trade Labeling
(ii) Social Accountability Standard (SA-8000).
The concept of fair trade was introduced to address the issue of social responsibility in the
production and marketing of products. Like other countries, France has emphasized in these
issues, which are going to be a major challenge for our products.
International Logistics:_______________________________
Flow of goods to the final destination
The goal of the marketing logistics of our company is to provide the targeted level of customer
service at the least cost. We will use distribution centers rather than warehouses in each city.
These centers will be designed to take orders, fill them efficiently, and deliver goods to the
exporting companies as quickly as possible. In shipping the product to the distribution centers.
we have Chosen shipping as our primary mode of transportation and for intermodal
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transportation, we will use rail and truck. It will be less costly and will provide flexibility and
convenience.
Besides, we will use a simple, accessible process for sharing channel information. Telephone,
Internet, & sales people will link all our distribution centers up to share sales information. This
will certainly help us to maintain the delicate balance of the inventory management.
The Barriers to Face
Import Tariff
The French customs tariff uses the Harmonized System (HS) for the classification of goods.
Customs duties are levied per 100 kilogram
Duty rate
The standard duty rate is 7.6 percent, although there is a reduced rate of 2.4 percent for certain
goods and services like agricultural products and necessary consumer goods
Trade Barriers
Due to significant tariff and quota barriers for many agricultural products, combined with
a restrictive approval process for biotech products
Switzerland has a strict regulatory regime for agricultural biotechnology products.
Over the past few years, Switzerland has taken steps to remove barriers to competition in
its automotive, electricity, telecommunications, and postal sectors.
Economical barriers
Although overall economic condition of France is at a better situation for international trade, but
the economic condition of France has slowed down recently for unusual global recession. For
example, recession results in financial loss and decrease the purchasing power of the target
consumers. They may be reluctant to buy this type of goods.
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Cultural threat
Culturally, French people are homesick. If the consumers maintain the attitude of using own
country’s product as a personal belief of patriotism, then it will be a big threat for the company.
Bargaining power of supplier
Bargaining power of supplier may be high because of only one exclusive area distributor. More
dependency on the distributor may lead to loss of some control over the marketing of our
product. It may become more difficult for us to have a final say in pricing and promotion.
How these threats can be opportunities?
o Strong political lobbying power
o Marketing research and forecasting of economical situation
o Special incentives or other arrangements on the unusual situation
o To show respect and create value to the culture of the target consumers
o Precision of agreements with the distributors on the basis of mutual business lows of two
countries
The cost effective way
o To setup its own sales depot in Parris as a way of direct marketing.
o To engage and employ some employees from France for better adaptation with the
cultural environment.
o To follow mass marketing at the matured stage.
o To export cheap labor in Tripura for any additional task of product differentiation.
Payment Method
We accept 100% T.T. (Telegraphic Transfer) or Wire Transfer/Bank Transfer through SWIFT to
our bank account as payment method.
We also accept any kind of L/C (Letter of Credit) or D/C (Documentary Credit). We accept
small payments for samples through Western Union too.
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Financial Plan:_____________________________________
Break-Even Analysis
Heritage Jute has total fixed expenses of BDT 314,500000 and their average contribution margin is BDT 6000. The fixed expenses can be covered by selling 52, 417 units of its products which would give a contribution margin of BDT 6000 per unit in a year. In terms of BDT, Heritage Jute can reach its break even just when it makes a net profit of BDT 87,362 000. If we look at the forecasted net profit for five years we see that Heritage Jute Ltd reach it’s breakeven in 2006 that is it will take heritage 3 years to reach its break even.
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Projected Revenue
Heritage Jutes estimates to continue revenue growth throughout 2010-2014.
Projected Revenue
Heritage Jutes estimated profit during 2010-2014 continues to grow.
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Conclusion:_______________________________________
From the above analysis we can say that it may fulfill the goal of international marketing to
make exchange, provide satisfaction to the customers and earning more profit from the
international market by the available opportunities in the market through geographical proximity,
bilateral trade relationship between two countries, lower transportation cost, absence of effective
competitors and lower pricing. But we will may face some problems like nationalistic view of
French people, unsolved borders issues, and French government non-tariff barriers, etc. but we
think it is wise for Heritage JDP to enter into French market, though there is some problems. But
Heritage JDP may become successful through proper planning and promotional activities and
this success may lead us to flourish our business in the Europe.
Recommendations:__________________________________
In the recommendation part, we can first focus on probable effective promotional activities of
Heritage JDP
Promotional Strategies:
Heritage JDP should use promotions effectively through establishing goals, selecting appropriate
strategies, and setting a budget.
Some tips related to its objectives are:
To gain and encourage new customers
Maintaining brand image through maintaining quality of products at comparatively
lower price
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Through using some combinations of push (Sales promotional effort) and pull (demand
creation) strategy
Promotions that cross the lines:
The Core-Competitive advantage
It should create competitive advantage through efficiency and superior quality of its products. It
may gain efficiency by reducing unit cost with a large scale of production, gaining experience in
the international marketing place and by adaptation with the latest technology, R & D strategy,
and well-developed infrastructure of operation.
Product Proliferation
It may introduce its product lines gradually in its niche market.
Pricing
It can follow the expected pricing strategy that involves the use of a single well-known price for
a long period.
Strategic Alliances
In case of Strategic Alliances Heritage JDP should follow credible long-term as well as short-
term commitments, it will maintain synergy and co-ordination with the distribution channels.
It can develop co-marketing programs and co-branding programs with their retailers.
It should maintain the consistent network of dealers.
It may allow sales incentives occasionally to big purchasers.
Before introducing their own sales point, it may focus on the width of distribution channels
instead of length of distribution channels.
Sponsorship and Event Marketing:
It may promote the sales promotion in the France by sports sponsorships, festivals, fairs and
event marketing.
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Specialty Advertising:
It may spend in advertising specialties by making calendar focused on the local culture of France
just as a gift.
Interactive and Internet Promotions:
It may introduce its products by Internet promotions so those interested groups can get
knowledge about their products e-mail for any inquiry and exercise e-commerce in the long run.
It can also start telemarketing in the states of Northeast India.
Loyalty Programs/Continuity Programs:
It can follow the 4 mandates of loyalty programs:
Identify the best customers
Connect with those best customers
Retain the best customers usually by rewarding them for their patronage
Cultivate new “best customers”
Public Relations:
To build public awareness, it can communicate with local newspaper for their ad to maintain the
flow of information. In addition, it can use the local language in the package of its products
profiles for better understanding of local people.
Other Issues:
Growth Strategy:
As a growth Strategy, it can focus on the geographical expansion that can broaden from French
to other parts of France. It will focus on the following techniques:
Economies of Scale by standardization and increasing sales volumes
TQM
Just In Time Strategy
Budgeting:
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It should take precaution in its budgetary policy so that it can be cost effective. At the initial
stage, it may budget up to 10 lacks Bangladeshi Tk. Including all promotional costs.
R & D:
It will spend the effective amount in its R & D program for much proper understanding of the
business environment in a better profitable way.
Survival in the Competition:
It will always watch the competitors in the market and to stay in better position by
maintaining quality with cheaper price to gain the market share.
Avoidance of Conflicts:
It should be careful in avoiding conflicts with its stakeholders in the international market by
mutual understanding of the interest of each group.
Training:
In future when it will introduce its own sale center in the niche market, then it must train its sales
representatives properly so that they can understand the culture of the region and be close with
the local people for promoting their products.
Societal Responsibility:
It must focus on maintaining the social value of customers by reflecting their dreams in
designing its profiles. In this regard, it can use the creative dialogue of fulfilling the dreams of
people in the society.
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References:________________________________________
1. Czinkota, Michel R. International Marketing. Ilkka, A. Ronkainen. Ohio: Thomson, 2004.
2. Bangladesh, Export Promotion Bureau. Export Policy of Bangladesh. Dhaka. 1997.
3. Armstrong, Kotler. Principles of Marketing. 6th Edition. New Jersey: Pearson. 2002.
4. Khan Kawsar, G. (1999, July 13). Jute bag exports rise as shopping goes eco-
Correct, Retrieved December 20, 2004 from http://www.thedailystar.net/newDesign/news-
details.php?nid=94737
References:________________________________________
1. Czinkota, Michel R. International Marketing. Ilkka, A. Ronkainen. Ohio: Thomson, 2004.
2. Bangladesh, Export Promotion Bureau. Export Policy of Bangladesh. Dhaka. 1997.
3. Armstrong, Kotler. Principles of Marketing. 6th Edition. New Jersey: Pearson. 2002.
4. Khan Kawsar, G. (1999, July 13). Jute bag exports rise as shopping goes eco-
Correct, Retrieved December 20, 2004 from http://www.thedailystar.net/newDesign/news-
details.php?nid=94737
Appendix:________________________________________
The income statement of Heritage Jutes Ltd. for the year 2009 is shown below:
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2009
(000) (000) Sales Revenue 730,000 Less: Cost of Goods Sold: Beginning Inventory 0 Add: Purchase 321,200 Less: Ending Inventory 29,200 Total Cost of Goods Sold 292,000 Gross Profit 438,000 Operating Expenses: Salaries expenses 108,000 Rent expenses 144,000 Research and Development 7,200 Packaging and recycling 800 Electricity Bill 4,800 Trade License 4,500 Advertising expense 32,000 Motor vehicle expense 36,000 Depreciation expense- Machinery & Equipment 10,000 Depreciation expense- Motor Vehicle 4,000 Miscellaneous Expense 32,000 Total Operating Expenses 383,300 Operating Profit(EBIT) 54,700 Less: Interest 30,000 Earnings Before Tax 24,700 Less: Tax 0 Net Profit 24,700
BALANCE SHEET
AS AT 31 DECEMBER 2010
(000) (000) (000) (000) Current Asset: Cash 100,000 Bank 384,500 Accounts Receivable 34,000 Inventory 29,200 Prepaid Rent 40,000 Total Current Asset 587,700 Fixed Asset Machinery & Equipment 100,000 less: Accumulated Depriciation- Machinery & Equipment -10,000 Net Book value of Machinery & Equipment 125,000 Motor Vehicle 40,000 less: Accumulated Depriciation- Motor Vehicle -4,000 Net Book value of Motor Vehicle 36,000 Furniture 20,000 Total Fixed Asset 181,000 Total Asset 768,700 Liabilities: Acoounts Payable 22,000 Dividend Payable 22,000 Long term loan 200,000 Total Liabilities 244,000 Owner's Equity: Issued Shares 250,000 Capital 250,000 Add: Net Profit 24,700 Total Liabilities & Owner's Equity 768,700
FORECASTED BALANCE SHEET FOR 5 YEARS
Accounts Title 2010
(000)
2011
(000)
2012
(000)
2013
(000)
2014
(000) Current Asset 587,700 630,200 732,611 802,543 898,344
Fixed Asset 181,000 167,000 153,000 139,000 125,000
Total Asset 768,700 797,200 885,611 941,543 1,023,344
Liabilities 244,000 238,000 234,000 229,000 225,000
Total Owner’s equity 524,700 559,200 651,611 712,543 798,344
Total Liabilities & Owner’s equity 768,700 797,200 885,611 941,543 1,023,344
FORECASTED INCOME STATEMENT FOR 5 YEARS
Accounts Title 2010
(000)
2011
(000)
2012
(000)
2013
(000)
2014
(000) Sales Revenue 730,000 839,500 1,022,000 1241000 1368750 Less: Cost of Goods Sold (292,000) (365,000) (423,400) (525600) (559,180) Gross Profit 438,000 474,500 598,600 715,400 809,570 Less: Operating Expenses (383,300) (389,800) (399,800) (450,800) (450,800) Operating Income (EBIT) 54,700 84,700 198,800 264,600 358,770
Less: Interest (30,000) (25,500) (20,434) (14,550) (7,777) Earning before tax 24,700 59,200 178,366 250,050 350,993
Less: Tax 0 0 (26,754.9) (37,507.5) (52,648.95) Net Income 24,700 59,200 151,611 212,543 298,344
Particulars 2010 2011 2012 2013 2014 Result of operations (000) (000) (000) (000) (000)
Total Revenue 730,000 839,500 1,022,000 1,241,000 1,368,750
Operating Profit 54,700 84,700 198,800 264,600 358,770
Profit before tax 24,700 59,200 178,366 250,050 350,993
Net Profit after tax 24,700 59,200 151,611 212,543 298,344
Financial position at year end (000) (000) (000) (000) (000)
Total assets 768,700 797,200 885,611 941,543 1,023,344
Total liabilities 244,000 238,000 234,000 229,000 225,000
Total Owner’s equity 524,700 559,200 651,611 712,543 798,344
Financial Ratios (Percentage) Return on Asset 3.21% 7.43% 17.12% 22.57% 29.15%
Return on Equity 4.94% 11.84% 30.32% 42.51% 59.67%
Gross Profit Margin 60% 56.52% 58.57% 57.65% 59.15%
Net Profit Margin 3.38% 7.05% 14.83% 17.13% 21.8%
