Project MGT 302
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Transcript of Project MGT 302
EXECUTIVE SUMMARY
The most important part of business plan is the executive summary. It includes the main business
idea, market potentials, unique selling points, the service we are trying to sell, the profit making
process, the company vision and finally the financial forecast. Our project is mainly concerned
about the planning of online grocery business and Electronic business. Our strategy is to build an
impressive shopping website that not only take the order but also deliver the goods to the
doorstep for people who want to avoid the rush of shopping mall, traffic. The marketing of the
site will be built around the core value that the site will offer. Although our competition has built
a simple store for ordering the product, this site will be reviewed by Web award companies as a
great destination for the all needed customer. We will build our revenue and market share around
this traffic and value added service. Our business model is based on the sales of the products
over the website. Because the site is also intended to increase brand equity, awareness and best
available product in cheapest market price, we are building for high traffic. Our model requires
giving users an excellent free experience and to develop trust to increase sell-through. We may
lose money for at least three to six months while we build the traffic and develop our position for
the long-term future. Our first class design, product quality and user friendly design are critical
to our positioning as a dot-com company - we should be the best reviewed website in our
category, and that will become the key to future sales. However, the core experiences for the
every household have always been better, and with a better design team and a round of financing,
our company is ready to grow with the market. The company will distinguish itself from its
competitor as a full capacity center, rather than just a store front.
MISSION
Our business plan is created through some motives. Here we tried to explain our missions and
objectives.
Product Mission:
We will serve better quality product through a variety of domestic goods.
Economic Mission:
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Operate and grow at a profitable rate through sound economic decisions. We want to capture the
market share and replace a great portion of conventional super shops items. Our goal is a little bit
economical. We are forwarding to reach our break-even point within one year and if we can
manage to double up our revenue within 3 years we have a plan to extend our business.
VISION
Our visionary view of this business is that we don't want to see any body's panic. We want to
make people having a good likeness in buying. We would like to make their day-to-day life
easier. Moreover, ensuring customer satisfaction is ultimate goal.
LIMITATIONS
Lack of experience about merging
High setup cost
High maintenance cost
Trying to find the best
Existence of Comparison
Likeness varies from person to person
INTRODUCTION
Our business idea is all about web based. We would like to provide services to people with a
view to making their day-to-day life more comfortable and easier. We will provide customers
with grocery items as well as electronic goods. And provision of these goods will be done
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through web in the form of e-commerce. Our business will be beneficial for people who want to
avoid the rush of shopping malls, traffic, etc. People can order us through web and thus we’ll be
able to know their demands, wants, etc. Then we’ll be able to act accordingly. Customers can
check samples of the products they want in the web. We’ll receive orders and then will take
every step to provide them the goods. Our services will save a lot of time of the customers. The
ultimate goal of our business plan is to ensure customer satisfaction.
DESCRIPTION OF PROJECT
ONLINE SHOPPING
Day by day online shopping concept is developing by region in the world. The idea of online
shopping was found few years ago and statistic show people are doing their shopping more then
50 percent online .EBay and Amazon has been running successful business in the world. But
time is now in Bangladesh .Last two or three years few company has lunched online shopping
facility in Bangladesh .One can browse product in their website and choose then have to give
order and have to choose one’s payment option .After making payment they will send the order
product in one’s address .
Few numbers of reasons behind the necessity of online shopping in Bangladesh are the
following,
a) Improved productivity: Using e-commerce, the time required creating, transferring and
process a business transaction between trading partners is significantly reduced.
b) Best bargain: It is possible as one can visit numerous shops /suppliers
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c) No national boundary: As one can order products from any place within the national
territory.
d) Easy payment system: Making payment is easy.
e) Streamlined business process: Use of internet and with automation of business process
can make business more efficient
f) Saving time and cost: The cost savings stem from efficient communication, quicker
turnaround and closer access to market.
g) Better Customer service: Customer can enjoy the convenience of shopping at any hour
and anywhere in the world.
h) Variety: The choices one can get for products are amazing. One can get several brands
and products from different sellers at one place.
In Bangladesh this concept is not popular still now but day by day online shopping in
Bangladesh has been growing rapidly. There are some websites which provide online shopping
option in Bangladesh but neither delivers the products ordered nor offer return policy. Rather
they charge high cost and are not up to date with the price and products of the market. They
rarely modify the products and prices of day to day market.
We have planned to establish a business of online shopping and modify it with some more
modern approaches and privileges. Some of them are the following,
1) Cash on delivery
We want our customers to enjoy the opportunity of paying cash on delivery. Cash on delivery
(COD) is a financial transaction where the payment of products and/or services received is done
at the time of actual delivery rather than paid-for in advance. Most small businesses prefer cash
payment over credit card payment.
Trust Factor –The Cash on Delivery concept allows the customers to make the payment
only when the product or the services is delivered to them. This increases the trust factor
between the customers and the businesses resulting in more sales and revenue for the
online store. The entire transaction remains transparent between both the parties under
this model.
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Easier Transaction Model – In Bangladesh most online stores depended on Credit
Cards and Internet Banking for payments and transitions. Serving customers using these
payment methods was easy in the developed countries, but in developing countries, many
customers didn’t have access to any electronic means of payment. This is the case in
Bangladesh. Cash on Delivery has brought this category of customers into the purview of
Ecommerce. Thus, increasing the market size and dispersion for the online stores largely.
Quality Improvement – The customers pay only when they receive the product and are
satisfied with its quality. They have the right to refuse poor quality products. This has
ensured that online stores need to sell high quality products to the customers resulting in
better quality and customer satisfaction.
Legal Aid – Unless a customer has paid for a product he/she doesn’t have the legal right
over it. This works to the advantage of the online store as this keeps them at bay from
legal responsibility over late delivery of the product or no delivery due to unavoidable
circumstances. In case, our online store fails to deliver a product we can ask customers
for an alternative product of their choice without having to worry about any monetary
compensation or legal hassles.
Return policy
We also plan to provide our customer with 3 day return policy. They can return the product if it
is not satisfactory.
The following items may NOT be returned:
Any item without a return authorization slip.
Used or damaged items
Discontinued products
Products that are not in their original packaging and containing all accessories
Items over 3 days of the receipt date
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1) Creating a modern website:
a) Picking a domain name- A domain name is one’s “signature” on the Internet. We
have to select it first.
b) Registering a domain name- Then it has to be registered. Domain names are
acquired through authorized domain name registrars. All registrars have access to the
same list of reserve names, but they may have different fee structures.
c) Finding a Web host- We have to develop the website. For business transactions
involving payment by customers, then a hosting package that includes space on a
secured server is usable. Secured servers are servers that contain additional layers of
encryption to protect the identity of the individual and the data that is being transacted
from unauthorized access.
d) Web design- After that we have to arrange web developers to design the website.
There are also web designers who design web sites for a fee.
Examples of host and design websites in Bangladesh are,
www.web.com.bd
www.websitedesignbangladesh.com
e) Financial transactions on the Web- In addition to having access to a secured server,
we will need to design a transactions page that collects the customer’s financial
information, transmits it to a service that can verify the transaction, and stores the
data in our files
f) Linking the site- We have to link the site with other, already recognized sites
increases the chances of being found by both our prospects and by the search engines.
Creating a website needs a Systems Development Life Cycle. Five major steps in the Systems
Development Life Cycle are:
1) Systems analysis/planning2) Systems design3) Building the system4) Testing5) Implementation
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SYSTEMS DEVELOPMENT CYCLE
LOGICAL DESIGN FOR THE ONLINE SHOPPING WEBSITE
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PHYSICAL DESIGN FOR THE ONLINE SHOPPING WEBSITE
COMPONENTS OF A WEBSITE BUDGET
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INDUSTRY ANALYSIS
1) Competition
The most important thing is to identify the competitors and their natures. In our business we do
have related competitors but some business is flourishing now-a-days in this area. Our
competitors are some web based online shopping business in our country.
There are some websites which provide online shopping option in Bangladesh but neither
delivers the products ordered nor offer return policy. Rather they charge high cost and are not up
to date with the price and products of the market. They rarely modify the products and prices of
day to day market.
The main competitors are-
I) Bikroi.com
II) OLX.com
III) Ekhanei.com
2) Current market situation
Out of 64 districts, Internet services are available only in 6 major district headquarters. BTTB is
planning to gradually roll out an IP network up to the64 district headquarters. In January 2002,
the Internet facilities were extended to 12 districts. In 2021, Bangladesh will become a digital
country and now a day 3G is available over 64 Districts. The project is running on very fast and
today almost40 plus districts are getting under our on line services.
Followings are the barriers of e-commerce in Bangladesh:
a) Very minimum number of users of web sites;
b) Poor telecommunication infrastructure with limited fixed-line access, unreliable
connectivity and low bandwidth (9K);
c) Lack of technically efficient personnel;
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d) Limitations of supportive legal system. Such as, exchange controls, protection of
telecommunication monopolies, restrictive trade practice and prohibitions;
e) People's mindset is not very open to online shopping.
OPERATIONAL PLAN
1) Business goals
Short term goals
a) Provide efficient service with good price
b) Satisfy consumer needs with variety of products.
c) Make sure every transaction is fulfilled successfully from ordering to delivering.
Long term goals
a) Increase sales by 30 percent in 12 months;
b) Improve profits by 15 percent within two years.
c) Increase the variety and number of products with every passing year.
d) Expand the business with each increasing year.
2) Resource requirements
a) Capital investments
Preliminary investment- Preliminary capital of around Tk. 600
thousand shall be contributed.
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Loans and borrowing: Amount up to Tk. 400 thousand can be
borrowed from bank.
Land and Building- An office with 800 square feet will be enough for
primary operations. The office building can be either be rented or
bought.
Utilities- Electricity and power cost should get emphasis which will be
around Tk. 6000 per month.
Miscellaneous Assets- Other items like office furniture, working
tables in the office, exhaust fans, storage racks and bins etc. are likely
to cost Tk. 40,000/-.
b) Personnel requirement
There should be appointed efficient data entry officers who are expert in technical knowledge of
computers and internet. There should be reliable field workers for delivering the products.
3) External resource for business expansion
In case of business expansion we will have to collect resource from external means.
4) Products
We will primarily start with two types of products
a) Electronics: Television, computers, mobile phone, air conditioner, laptops,
cameras, watches, water purifiers, kitchen appliances etc.
b) Foodstuff: Rice, flour, oil, seasonal fruits etc.
5) Implementation
a) Order: We plan to make contract with the companies with related products for
five years to supply us with the asked products when they are ordered by our
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customers. When customers will order products through our websites it will be
added in our shopping cart software. If they want to take collect on delivery
system then they will have to give their address, number. They can also pay
through credit cards. After getting the selling price we will payback the
company with related products.
b) Delivery: We plan to deliver in two ways, either by cash on delivery or by
credit card within 3 days. We will also offer 3 days return policy.
c) Billing: We will bill the product at their market price and will add minor
commissions for delivering.
d) Customer service: We plan to provide utmost customer service with our
transactions. Our foremost concern would be the satisfaction of customers.
6) Risk Assessment
Areas of risk are
a) Demand: Whether the fluctuation of demand of customers be satisfactory or
not.
b) Supply: Whether the supply and delivery of products be in proper time and
please the customer or not.
c) Technology: Get the help from the latest technology and using it in minimum
cost.
d) Security: To address proper security system to protect the website from
unwanted hacking and cyber crime.
e) Economical: Whether the resources are providing good value or not.
f) Implementation: Whether the plan is implemented by right or wrong people.
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Ways for addressing risks are
a) Reduce risk: We can get through the demand risk by ensuring quality and
reduced tariff for the advertisers.
b) Spread the risks- Risks can be spread among related entrepreneurs
c) Plan B- If risks cannot be diminished by multiple attempts rather increases then
we will turn our product shopping website into service related website.
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Organization Structure
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MARKETING PLAN
Market potential: Market potentiality means the estimated maximum total sales revenue of
our products in the market during a certain period. For determining the market potential of our
service we first need to identify who are our target markets and then future prospect.
We will serve the people who are from mid income level. We do not have any geographical
barrier as it is a web based business. But we can state it in a different way. Our geographical
expansion will be like that we will be covering areas beyond Dhaka i.e. other divisions
(Chittagong, Barisal, Khulna, Rajshahi, Sylhet, Rangpur)
Target markets: We are targeting two distinct groups of customers, individuals and
corporate customers:
Individuals- The individuals are people who are looking to give a friend, relative a gift or trying
to satisfy his needs.
Corporate- The corporate customer typically buys electronic products in a large scale from the
manufacturer or from the direct distributor at a lower rate
Market size: The rapid growth of digital technology is fundamentally changing the world as
we know it. Our business is fully web based and so the number of internet users determines the
potential market size of our product. The internet subscriber base in Bangladesh (excluding
mobile) currently stands at just over 1.5 million (BTRC, Feb 2012).. Local industry estimates
suggest that in 2011 access to the web was closer to 8 million users, having grown 300% since
2010 and expected grow a further 500% by 2020 (BCG, 2010).
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Factors that will affect the potential market size
Culture
Environment
Regulation
Economy
Industry practice
Demography
Trends
Infrastructure
Market Strategy: The marketing strategy will first seek to create customer awareness
regarding the products offered, grow the customer base, and work toward building customer
loyalty and referrals. The long-range goal is to not only dominate the online store business, but
to create an icon brand.
a) Product classifications: We will sell two types of product throw our website:
i. Electronic products (laptops, mobile phones, mp3 players, dvd players etc)
ii. Foodstuff
b) Pricing policy: Product pricing is based on offering high value to our customers compared
to most price points in the market. The price of our products (Food) will considerably be
lower from the market rate as we will collect them directly from the manufacturer. In case of
electronic products we will become business partners or direct distributors of the popular
brands so our price will be slightly lower than that is in the market.
Factors that influence pricing
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Supply and demand
Competitive pricing
Cost and profit margin
Affordability
c) Product packaging: We will use sophisticated packaging measures to ensure the safety
of the products Food) and in case of electronic products, as the products are already packed
by the manufacturer, we will just use a sticker containing the identity of our website.
d) Distribution policy: We will distribute the products to the customers with our
responsibility. Initially we will only concentrate in distributing the products within the capital
and gradually we will expand our business to other cities.
Sales Forecast: Our sales will be tracked using the same system that tracks our website visits
and contact requests.
Sales growth should be based on
a) Market penetration
b) Market expansion
c) Expansion of product range
d) New sources of revenue
Market Promotion: The plans for marketing and promotional strategies are:
Popular websites (e.g. Facebook, Google+)
IT-based pages of newspaper(e.g. Onno Alo)
Front pages of newspapers
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Online editions of daily newspapers to reach the NRBs(Non Resident Bangladeshis)
Press release
Free registrations in websites (e.g. Web Bangladesh, Google)
Leaflets/Banners
Stickers
FM band radio stations of Bangladesh
Marketing Budget:
Particulars 2015 2016 2017 2018 2019
Advertising 15,50,000 14,75,000 8,75000 9,00,000 17,00,000
Sales Promotion 3,75,000 4,25,000 5,75,000 5,25,000 4,25,000
Direct Marketing 75,000 1,00,000 50,000 75,000 75,000
Total 20,00,000 20,00,000 15,00,000 15,00,000 22,00,000
Analysis (SWOT)18
1) Strength
Very effective expected advertising channel
Easy payment system
Providing variety of products
Main purpose is to provide better customer service rather than making profit only.
2) Weaknesses
Earlier entry by other few related websites.
Lack of technically efficient personnel.
Minimum number of users of web sites.
Poor telecommunication infrastructure with low bandwidth.
3) Opportunities
The growing trend of using internet
The popularity of online shopping is increasing
The buying process by people without being physically present lowers their
concerns.
The time constraint of people of buying from showrooms is reduced
No bargain hassles
4) Threats
Limitations of supportive legal system.
Cybercrime ex: Hacking which needs adequate security system.
People’s mindset is still not very open towards online shopping.
ANALYSIS OF COMPETITIVENESS
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We have analyzed the current market situation by the five factor model of Michael Porter. In this
model there are five forces. By those forces we have identified the competitiveness of the target
market.
Competitive Rivalry within an Industry:
Within this market we have some strong existing competitors. Such as Agora, Meena Bazar,
Gmart, Prince Bazar etc. But as we are going to start with the necessary items we don't have such
type of competitor.
Threat of New Entrants:
Threats of new entrants for a business are always true. So we have always risk of those new
entrants. For this business entry barrier is not very high, as a result in that sense it is an
unattractive segment.
Threat of Substitute Product:
We are going to compete with super shops. We have various types of readymade good, in this
field we don't have real substitute products. Other industry such as our Grocery industry can be
substitute product. But as those are not our real substitute product, it is certainly an attractive
market.
Threats of Buyers Growing Bargaining Power:
Our buyers would not bargain with the price because we are offering in fixed price. As we are
starting from a fixed price it would certainly fulfill the customer demand, because customers are
always price sensitive.
Threats of Suppliers Growing Bargaining Power:
We are going to launch a new trend of the grocery business. So the suppliers of that field are so
much concentrated and organized. We emphasize on collecting items from diversified groups. 20
We will collect specific items from specific places. As a result our suppliers are widened in
Dhaka. So, low bargaining power of the suppliers makes the target market so much attractive.
Competition within an industry
Competitive forces Threat to Industry Profitability
Low Medium High
Threat of substitutes √
Threat of new entrants √
Rivalry among existing firms √
Bargaining power of suppliers
√
Bargaining power of customers
√
BUSINESS EXECUTION
The first and foremost task before the beginning of business is licensing the business under
partnership act. We have to set up the business with the help of capital expenditures. And then
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these will be supported by personnel to continue operation and in case of expansion we will get
the help from the external resources. We will continue the research on development of our
website through regular online survey participated by the customers.
Expected number of consumers for a particular financial year will be estimated, after that time
periods we will compare the projected and the actual number of customers. In case of material
deviations we will find out the reasons operating behind the deviations and find out what is to be
done to overcome this.
a) Evaluate whether proper marketing promotions are going on
b) Perform a survey regarding what more customers want from us
c) Watch whether the staffs are performing their duties properly.
FINANCIAL PLAN
Here are financial highlights for projected five year
Pro Forma Income Statement
The following table presents the pro forma income statement for projected five years.
Particular 2015 2016 2017 2018 2019
Sales 1,00,65,000 1,17,60,000 1,34,75,000 1,22,29,000 1,26,00,000
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Less- COGS 6039000 7371000 8385000 7637400 7360000
Gross Profit 4026000 4389000 5090000 4591600 5240000
Operating Expense:
Advertising 20,00,000 20,00,000 15,00,000 15,00,000 22,00,000
Salary 5,16,000 5,34,000 552000 612000 648000
Offices Supplies 50000 52500 55000 60000 65000
Rent 4,80,000 4,80,000 4,80,000 4,80,000 4,80,000
Utilities 72,000 72,000 72,000 72,000 72,000
Depreciation 30,000 42,000 37,000 45,000 57,000
Miscellaneous Expense 30,000 35,000 47,000 53,000 48,000
Interest (15%) 6,00,000 6,00,000 6,00,000 6,00,000 6,00,000
Total Operating Expenses 3778000 3815500 3343000 3422000 4170000
Income before Taxes 2,48,000 573500 17,47,000 11,69,600 10,70,000
Taxes (40%) 99200 229400 698800 467840 428000
Net Profit 148000 344100 1048200 701760 642000
Pro Forma Balance Sheet
Here presents pro forma balance sheet for projected five years.
Pro Forma Balance Sheet:
Particular 2015 2016 2017 2018 2019
Assets
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Total Fixed Assets 18,25,000 16,05,000 16,25,000 15,03,000 16,40,000
Total Current Assets 45,00,000 48,00,000 51,50,000 49,25,000 50,50,000
Total Other Assets 2,25,000 3,20,000 3,00,000 3,75,000 4,35,000
Total Assets 65,50,000 67,25,000 70,75,000 68,03,000 71,25,000
Liabilities & Owners Equities
Liabilities
Total Current Liabilities 8,50,000 9,75,000 11,00,000 9,75,000 10,25,000
Total Long Term Liabilities 40,00,000 40,00,000 40,00,000 40,00,000 40,00,000
Total Liabilities 48,50,000 49,75,000 51,00,000 49,75,000 50,25,000
Owners’ Equities 17,00,000 17,50,000 19,75,000 18,25,000 21,00,000
Total Liabilities & Owners’
Equities
65,50,000 67,25,000 70,75,000 68,03,000 71,25,000
Project Analysis:
The discount rate has been calculated using WACC. The cost of debt is 15% as it is a low
moderate
Risk project and a speculative return on equity is 20%, based on the expectations of the
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Entrepreneur. Therefore the WACC stands at [(15*0.40) + (20*0.60)] = 18%.
Parameters Value
NPV 16,59,821,32
IRR 57.32%
Payback Period (in years) 5.88
Discounted Payback Period (in years) 6.47
Ratio Analysis:
Ratio 2015 2016 2017 2018 2019
Current Ratio 5.29 4.92 4.68 5.05 4.93
Net working capital (Tk.) 36,50,000 38,25,000 40,50,000 39,50,000 40,25,000
Gross Profit Margin 40% 37.07% 37.78% 37.55% 41.59%
Net Profit Margin 1.14% 2.93% 7.78% 5.74% 5.10%
Debt-equity ratio 2.85 2.84 2.58 2.72 2.39
Debt-Asset ratio 0.74 0.74 0.72 0.73 0.71
Return on asset 2.26% 5.11% 14.82% 10.32% 9.01%
Return on Equity 8.70% 19.66% 53.07% 38.39% 30.57%
Break Even Analysis:
Accounting breakeven point is the sales level that results in a zero project net income. In the
initial stages of new venture it is helpful for us to know the point where we can avoid loss. This
will provide us the insight into the financial potential for the start-up business. So that we will
calculate break-even by this formula,
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Sales, S = (Fixed Cost + Variable Cost - Depreciation) * (1 – Tax Rate)
Following table shows the break even sales for projected five years.
Year 2015 2016 2017 2018 2019
Total Fixed Cost 3283600 3773500 3306000 3377000 4113000
Total Variable Cost 6039000 7371000 8385000 7637400 7360000
Depreciation 30000 42000 37000 45000 57000
40%Tax Rate 40% 40% 40% 40% 40%
Break Even Sales 5575560 6661500 6992400 6581640 6849600
Graphical representation: The graphical representation of the break even sales presents below
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Break Even Sales
Variable Cost
Fixed Cost
Stress Analysis:
Stress test has been done by increasing the sales by 5% and decreasing direct cost by 5% for the
best cost scenario and vice versa fro worst case scenario. Here NPV is still high even in worst
case.
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Stress Analysis Base Case Best Case Worst Case
Units Sold 5% higher than normal 5% lower than normal
Variable Cost Per Unit 5% lower than normal 5% higher than normal
NPV 16,59,821.32 21,33,761.59 7,23,853.55
Performance Analysis:
Sales 1,00,65,000 1,17,60,000 1,34,75,000 1,22,29,000 1,26,00,000
Gross Profit 4026000 4389000 5090000 4591600 5240000
Net Profit 148000 344100 1048200 701760 642000
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Appendices
Projected Ravenue from Selling:
Revenue
Particulars 2013 2014 2015 2016 2017
Income from Electronics Products
Mobile 11,25,000 18,40,000 19,40,000 15,34,000 17,20,000
Laptop 55,50,000 60,50,000 72,75,000 65,50,000 65,75,000
Monitor 5,25,000 4,75,000 7,35,000 4,25,000 5,00,000
Television 2,25,000 3,75,000 3,50,000 3,50,000 3,85,000
Income from Others Electronics Products
7,20,000 8,50,000 8,75,000 9,00,000 9,25,000
Total Income from Electronics Products
81,45,000 95,90,000 1,11,75,000 97,59,000 1,01,05,000
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Income from Grocery Products
12,00,000 14,50,000 15,80,000 17,50,000 17,75,000
Income from Other Sources
7,20,000 7,20,000 7,20,000 7,20,000 7,20,000
Total Income 1,00,65,000 1,17,60,000 1,34,75,000 1,22,29,000 1,26,00,000
GEOGRAPHICAL POSITION OF TARGET MARKET:
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The target market is Dhaka City Corporation area for the first 5 years. The firm uses simple distribution channel with zone-wise dealers. The Dhaka city has divided into 9 different zones cover 19 areas. The following table shows the 9 zones and areas under each zone:
Name Covring Areas
Zone 1 Mirpur, Pallabi
Zone 2 Cantonment, Kafrul
Zone 3 Mohammadpur, Dhanmondi
Zone 4 Ramna, Tejgaon
Zone 5 Hazaribag, Lalbag, Kamrangirchor
Zone 6 Kotowali, Shutrapur
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Zone 7 Shyampur, Demra
Zone 8 Motijheel, Sabujbag
Zone 9 Khilgaon, Badda
INTREGRATED MARKETING COMMUNICATION:
The firm uses pull strategy as its promotion mix strategy which is spending a lot on advertising and consumer promotion to build up consumer demand. It makes the promotion mix efficient enough to activate customers to ask for the product. Here is a graphical view of the pull strategy:
Demand
Marketing activities
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Firm Customer