An Analysis of Battery Marketing in Bangladesh: A Case Study on Rahimafrooz Batteries Ltd
1.1 Statement of the research problem A market-oriented organization RBL recognizes the importance of understanding its competition as well as the customer: The key questions of RBL management are which competitors, and what technologies, and whether target customers perceive them as alternate satisfiers. The key to become a market-oriented and customer- oriented company is to understand the market and develop market driven strategy(MDS). All of these deeply need the information concerning customer, competitor and market. Hence, the whole information can be observed from business view as: â€˘ Determining how to deliver superior customer value â€˘ Taking action to provide value to the customer Rahimafrooz is one of the respected and reputed business houses in Bangladesh. It has just crossed 50 years of operation. Rahimafrooz has endured turbulences of the last 50 years and has been able to transform itself from a small trading company into a leading diversified business house. This is, indeed, a milestone, which Rahimafrooz has achieved with trust, support and dedication of all stakeholders, past and present, most importantly, its customers. Rahimafrooz was founded as a trading company in 1950. In 1954 the company was incorporated as a limited company called Rahimafrooz (Pak) limited. In 1959 it entered intro joint venture with Lucas, U.K. to set up a modern automotive battery factory. Rahimafrooz is a company that has grown from a small trading concern into the regional player that it is today. The company has expanded, diversified and consolidated in its quest to corporate value and customer satisfaction. Rahimafrooz is poised for a new phase of dynamic growth. 1.2 Objectives of the study The study has been carried out with the following objectives: 1. To identify the target market of Rahimafrooz batteries. 2. To describe various batteries of Rahimafrooz Ltd. 3. To identify their pricing and distribution strategies 4. To explain the promotional activities of Rahimafrooz Ltd. 5. To identify the problems related to battery marketing of Rahimafrooz Ltd. 6. To make some recommendations to overcome the problems.
Target population: Officers, dealers and customers of Dhaka city Sample Size : 25 respondents were interviewed. They are: Officers 2, dealer 3, customer 20. Sampling method: Convenience sampling: in exploratory research where the researcher is interested in getting an inexpensive approximation of the truth. As the name implies, the sample is selected because they are convenient. This no probability method is often used during preliminary research efforts to get a gross estimate of the results, without incurring the cost or time required to select a random sample. Data collection method: • face to face interview with a questionnaire • visiting the retail stores 1.4 Rationale of the Study This study was undertaken to generate and analyze the essential information and data on battery market in Bangladesh. Since Bangladesh is passing through power crisis so battery can play an alternative role to meet the emergency. Besides, for the automotive industries battery is only the alternative to generate the power. There are other sectors where batteries can be used such as in electrical equipment as an alternative power mode, industrial equipment etc etc. This study will help us to get the reasonable information about the battery market in Bangladesh. To get the overview of the battery market in Bangladesh we have choosen Rahimafrooz Batteries Ltd as a case study to analyze the market, their performance, business strategy, growth, potentiality, strength and other business values. 1.5 Literature Review Market Orientation A business is market oriented when its culture is systematically and entirely committed to the continuous creation of superior customer value. Market orientation always commences from the information made by virtue of customers, competitors and market. Based on such information the company performs coordinated actions, to create superior customer value. Market orientation is the extent to which customer focus is implemented in key organizational leverages.( Molly Inhote Rapert, “ The Strategic Implementation Process: Evoking Strategic Consensus Through Communication”,Journal of Business Research 55(4) (April 2002) :301) Market Analysis The goal of a market analysis is to determine the attractiveness of a market and to understand its evolving opportunities and threats as they relate to the strengths and weaknesses of the firm.(http:// www.netmba.com/marketing/market/analysis.com) David A. Aaaker outlined the following dimensions of a market analysis: •
Market size ( current and future)
• • • • • •
Market growth rate Market profitability Industry cost structure Distribution channels Market trends Key success factors
Automotive battery Automobile Battery is primarily responsible for electrical energy to the electric motor and the ignition system of an automobile. They are mainly the lead-acid accumulators and are known to provide a potential difference of 12.6 Volts. Mostly these Automobile Batteries do not require any form of maintenance much unlike other car accessories. The competitive nature of the automobile industry has prompted the companies to take up new and innovative marketing strategies to thwart the competition. As consumers demand ever more sophisticated and feature-loaded vehicles, the global automotive industry faces growing challenges to balance these expectations with space constraints and weight concerns. Every component receives scrutiny to determine if it can be made smaller and lighter to promote fuel efficiency and performance and help fit more content into the available space. In addition, vehicle manufacturers and suppliers must increasingly consider environmental concerns such as recycl abi l it y, as well as overall performance. Electrical loads in vehicles today are growing every year resulting in consequent increases in cable harness, power distribution box, relay, and switch ratings, as well as costs. (http://www.reportlinker/energy /technology/battery.com) Rahimafrooz Batteries Ltd In the context of saturated local market, hunger for growth and creating new avenues Rahimafrooz Batteries Ltd(RBL) entered into the phase of export as the pioneer in 1992. Since then it has been expanding its export market with an export volume growth of 80% annually. So far RBL has exported more than one million units. RBL’s first importer was Chloride, Singapore. In 1994 RBL started exporting to Pakistan and at the same time provided technical assistance to set up a battery factory in Pakistan. The export continued till the factory became operational in 1997. In 1997 RBL started exporting to India. Within very short period it had organized an extensive marketing network covering the entire country having 8 distributors and 450 dealers. By 1997 it covered all the SAARC countries except Maldives. RBL is exporting to 18 countries among which India, Srilanka, Singapore, Nepal, Bhutan, Thailand, UAE, Kuwait, Lebanon, Afghanistan, Madagascar are regular importing countries. RBL is continuing its journey of export with excellence through stringent Quality Control, Quality Management & Environment Management System. All the companies as a part of their marketing strategy offers a range of vehicles in all the segment to make sure that the customer is driving one of their vehicles only.( Market Driven Strategies practices in Bangladesh in context of Rahimafrooz Batteries Ltd- Assignment prepared by Mr. Azizul Hoque, Student of MBA(Evening),22nd batch, Asian University,, Dhaka on October 2010) Resource based view in the international business
The resources of a firm have gained prominent position in the IB field. Scholars such as Caves(1971), Dunning(1983) and Hymer(1976) considered resources of a firm as drivers of its investment. These scholars , though, used a different term, namely ownership-specific advantages of a firm, namely asset-specific ownership advantages and transaction-specific ownership advantages. The resource Firm resources include all assets, capabilities, organizational processes, firm attributes, information, knowledge etc controlled by the firm that enable it to convince of and implement strategies that improve its efficiency and effectiveness(barney,1991). Resources such as technological abilities, reputation and brand name, managerial skills, size, and international experience etc have long been recognized as one of the key drivers of a firm’s internalization(Cave,1971,Dunning 1983, Hymer 1976, Yeung 1994) because resources help an entrant firm to overcome disadvantages( Beamish 1984),knowledge gaps( Petersen, Pedersen & Lyles 2008) and liability of foreignness ( Zaheer 1995, Zaheer & Mosakowski, 1997) in a host country. Internationalization Strategies Internationalization of a firm may effect its host country ,location choices because a firm may not be able to implement all of its potential advantages in a host country, given the institutional, resource, economic and social make up of the host country. A literature review of internationalization may help us understand the strategy types a firm may have for its international market and at the same time, it may help us select the internationalization strategies that can form part of our model and be further examined. Extant literature has identified many generic strategies of firms proposed by scholars such as Hambrick(1983), Miles and Snow(1978) and Porter (1980) among others. In the context of international business, scholars such as Cantwell(1989) and Dunning (1980) stand out for proposing strategies adopted by firms. 1.6 Limitation The major limitations include: • • •
The data used in this research are fully based on primary which were collected from different suppliers’ which sometimes impossible to get. Barriers in disclosing actual data from some of the supplier and the end user. Inadequacy of relevant data is also a limitation for the study.
An Overview of the Organization 2.1 Background Rahimafrooz is one of the respected and reputed business houses in Bangladesh. It has crossed more than 50 years of operation. Rahimafrooz has endured turbulences of the last 50 years and has been able to transform itself from a small trading company into a leading diversified business house. This is, indeed, a milestone, which Rahimafrooz has achieved with trust, support and dedication of all stakeholders, past and present, most importantly, its customers. First Rahimafrooz start it journey in 1954 as a trading company. Then it entered
into collaboration agreement with LUCAS, UK for setting up manufacturing and distribution system of Lead-Acid automotive batteries at Dhaka and now it’s a giant company. It not only sell batteries but many other products like UPS, IPS, electric equipment, solar system etc. With the growth of the company, Rahimafrooz was acquired Lucas service (Bangladesh) limited and renamed it Rahimafrooz Batteries Limited. In 1991 Rahimafrooz deployed the expertise of Chloride Batteries of UK .for technical up gradation and export development. In 1994 Rahimafrooz acquired Yuasa Battery Bangladesh limited and its factory. The company diversified by entering into type retreating, textile weaving and real estate. In 2001 the company was awarded the best enterprise of the year. It also established the first grocery retail chain superstore in Bangladesh called, “AGORA” in Dhaka. Rahimafrooz has an extensive distribution and network extending to the international markets. It has expanded its business reach to Europe, USA, Middle East and South East Asia. Since the customers are spread on different places though market is divided into various segments. Rahimafrooz is divided into various SBUs like Rahimafrooz Batteries Ltd, Rahimafrooz distribution limited, Rahimafrooz solar, Rahimafrooz superstore limited, Rahimafrooz energy services, Rahimafrooz CNG. As a well known company Rahimafrooz (Bangladesh) ltd always try to ensure its product quality as well as customer satisfaction. Currently it has 1500 employee. All those are employees are working sincerely for increasing company profit as well as welfare. Rahimafrooz also motivates their employees using several incentives.The company is one of the leading regional players, with market leadership at home and export endeavours to more than 44 countries around the world. It manufactures about 200 different varieties of batteries for automotive, motorcycle, IPS and other applications in its factory located at West Panisail, Zirani Bazaar, Gazipur. The Company maintains high standards of operations, which are certified in both ISO 9001 as well as ISO 14001 standards. Furthermore, in order to ensure occupational health and safety of its employees, the company has also implemented the occupational health and safety management system, OSHAS 18001 standard. The expertise and reputation of Rahimafrooz as a manufacturer of quality batteries locally and internationally has inspired the Group to invest in setting up a new battery factory at Ishwardi EPZ to cater to the growing potential in the international battery market. As part of the same strategy, the Group recently decided to spin-off the Industrial Battery manufacturing facilities of RBL as a separate business unit, moving to a new factory in Savar. As a result of these initiatives, RBL will now be able to devote more resources towards meeting the increasing demand of the local market. Lucas and Spark are the leading names in the local automotive battery market while Volta, Optus and Delta are gaining equity as international brands. RBL has state of the art manufacturing plants. It is equipped with the latest technologies along with complete air treatment and lead-recycling management system. Its capacity in automotive and other appliance battery is over a million N50 units per annum and has provision for further expansions. Rahimafrooz has different technical collaboration agreements with the Lucas Battery Company, Technical support Group (TSG), Hawker Batteries, and Invensys, of UK, Eltek – Norway and AEES – France to ensure the quality of the battery. Previously known as the 'Lucas Dhaka Motor Show', this year's Motor Show also sees a change in the Title Partnership with the name 'Globatt', the Global brand of Rahimafrooz and known as the '6th Globatt Dhaka Motor Show 2011'. Rahimafrooz recently launched its international brand GLOBATT in the Bangladesh market - the first sealed, maintenance-free automotive battery. Rahimafrooz Bangladesh Limited (RBL) is the Group Holding and Parent Company including the Group Corporate Center that guides the Strategic Business Units (SBUs). It ensures continuous management innovation, technology adoption, new initiatives, corporate governance and compliance. Now Rahimafrooz is one of the respected and reputed business
houses in Bangladesh. It has crossed 54 years of operation. Rahimafrooz has endured turbulences of the last 50 years and has been able to transform itself from a small trading company into a leading diversified business house. This is, indeed, a milestone, which Rahimafrooz has achieved with trust, support and dedication of all stakeholders, past and present, most importantly, its customers. Today, Rahimafrooz has emerged as a respected national company by upholding high ideals and values, solemn integrity & honesty, excellence, service and innovation in all spheres of the company’s activities building on the already established foundation. RBL is also the largest lead acid battery manufacturer in Bangladesh and offers the most extensive range of automotive and specialized industrial battery. It manufactures more than 300 different types of battery in both JIS and DIN standard in ISO 9001 and ISO 14001 certified plant. Rahimafrooz Batteries Limited is the local leader in marketing automotive and industrial battery in Bangladesh. With excellent export growth rate it has also emerged as a major regional player.
Rahimafrooz was incorporated in 1954 and it acquired Lucas Service (Bangladesh) Limited in 1980 and renamed it Rahimafrooz Batteries Limited. In 1985 RBL established industrial battery plant. In 2002 the company expanded the production capacity up to 300% at Savar Plant In 2006 the company expanded the production capacity at Savar Plant In 2006 the Industrial Battery production capacity was increased by 95%. RBL is divided into following parts: • • • • •
Automotive battery marketing Industrial battery marketing Production Procurement Quality measurement
Rahimafrooz, in 2001, made a breakthrough in the urban lifestyles by launching the first retail chain in the country –A gora. One of the SBUs of Rahiamfrooz Group, Rahimafrooz Renewable Energy Ltd. distributes solar home systems to underdeveloped rural regions of Bangladesh. For that, the company received the Ashden Award for Sustainable Energy in 2006. The Group has strengthened its market leadership at home while reaching out to international markets. Ranging from automotive after market products, energy and power solutions, to a world class retail chain – the committed team at Rahimafrooz is determined to ensure best in class quality standards and living the Group’s four core values • • •
Integrity Excellence Customer Delight
Quality Policy Rahimafrooz as a team are totally committed to customer delight through intelligent effort and continuous improvement. Aspiration To be the most admired and trusted organization through excelling in everything Rahimafrooz do, following ethical business practices and adding value to stakeholders. Values • Integrity in all their dealings • Excellence in everything they do • Total commitment to customer satisfaction • Thinking ahead and taking new initiatives Team Rahimafrooz foster an environment of learning and reward, taking pride in who they are and what they do. Community Rahimafrooz strongly believes that doing good business means being good corporate citizen. The company always takes pride in serving the stakeholders and community in multifaceted ways. Global Compact Rahimafrooz is a signatory of the Global Compact, a UN initiative that sets standard on Human Rights, Labor Relations, Environmental and Ethics. Environment Environment Management System (EMS): They have taken comprehensive measures to protect environment, complying not only to local requirements but also with ISO 14001 Plant Capacity: Rahimafrooz has state of the art manufacturing plant. It is equipped with all latest technologies with complete air treatment and lead-recycling management. RBL produces different types of batteries to meet the local and international market. Its capacity in Automotive Battery is 660,000 (N50) units per annum and Industrial Battery is 41 million AH/annum. By the end of 2008 production capacity of Industrial Battery will be increase to 120 Million AH. All the products are manufactured under strict quality control and ensured by international certifications. Collaboration Agreements It has different technical collaboration agreements with Lucas Battery Company, U.K, Technical support Group (TSG), Hawker Batteries, UK, Invensys, UK, Hawker Batteries, UK, Eltek – Norway, AEES – France to ensure the quality of battery. Market size The total Indian battery market is estimated at close to Tk. 170 crores. Out of this the industrial battery market is estimated at around Tk. 60 crores which includes theVRL A
(valve regulated lead acid) battery market, which is estimated at around Tk. 50crores in the current year. The power and UPS industries are other key user segments. The automotive battery business is estimated at around Tk. 100 crores. Conclusive industry data on SARRC is not available. To best estimate, the market share of the SAARC is about 35% for automobile batteries and around 25% for industrial batteries.
2.2 Organization Structure
MAN. MARK. & SALES (AUTO)
MAN. MARK. & SALES (IB)
MAN. GOVT. & REGUL ATORY AFF.
MAN. FIN & A/C
MAN. CONT. MOUL. & LEAD RECY
MAN. PROC U.
MAN. QA SAVAR FACTORY
Figure: Organogram of RBL
FAC. MAN. SAVAR
IN CHARGE QA N.PARA FACTORY
OPE MAN. N.PAR FAC.
2.3 Corporate Information The Board of Directors NIAZ RAHIM
MUNAWAR MISBAH MOIN
MUDASSIR MURTAZA MOIN
Group Managing Director
Group Deputy Managing Director
2.4 Vision Statement Rahimafrooz (Bangladesh) limited already pass their 50 year with the people of this country as well as with many other foreign countries. The corporation vision is “To be the most admired and trusted organization through excelling in everything we do, following ethical business practices and adding value to stakeholders”. Its long term vision is to establish” Rahimafrooz” as world wide well known brand. One of its announced visions is becoming an enterprising Group of Taka 2,000 crore by the year 2010 with a diversified business portfolio focused on dynamic growth, excellence, innovation, customer delight in enriching our world. 2.5 Mission Statement Pursue to operate as a market oriented company. Ensure quality product and service excellence for total customer satisfaction. Endeavor for constant enhancement of technical and professional skills of our people. Maintain high ethical standard in all spheres of operation. Respect the social norms and customs and contribute to the welfare of the society. Rahimafrooz (Bangladesh) limited already pass their 50 year with the people of this country as well as with many other foreign countries. The corporation vision is “To be the most admired and trusted organization through excelling in everything we do, following ethical business practices and adding value to stakeholders”. Its long term vision is to establish” Rahimafrooz” as world wide well known brand. One of its announced visions is becoming an enterprising Group of Taka 2,000 crore by the year 2010 with a diversified business portfolio focused on dynamic growth, excellence, innovation, customer delight in enriching our world. Company Values Rahimafrooz (Bangladesh) limited has several values by which it tries to satisfy its customers and try to achieve their organizational goals. There are four specific values which are: •
Integrity in all our dealings
• • •
Excellence in everything we do Total commitment to customer satisfaction Thinking ahead and taking new initiatives
Marker Orientation and RBL: Market orientation plays a pivotal role in determining the success of organizational performance. In context market orientation,RBL consider the following things: • • • • • • • • • •
RBL’s business objectives are driven by customer satisfaction. RBL monitor their level of commitment and orientation to serve customers’ needs. Their strategy for competitive advantage is based on understanding of customer needs. RBL measure customer satisfaction systematically and frequently. RBL responds to competitive actions that threaten them. RBL target customers and customer groups where they have, or can develop a competitive advantage. The top management ofRBL regularly discusses competitors’ strengths and strategies. They communicate information about their successful and unsuccessful customer experiences across all business functions. All ofRBL business functions are integrated in serving the needs of their target markets. All of their managers understand how everyone in the company can contribute to creating customer value.
Rahimafrooz Batteries Limited (RBL) put organization-wideintell igence management and responsiveness to it at the heat of the construct and form of specific culture which includes distinctive management practices, organizational infrastructure, systems, human resources and technology support as organizational entities (leverages) enabling implementation. Market orientation is specifically often understood as the all-encompassing strategic orientation that raises the probability of market performance ofRBL which encompass customer, competitor, intra-functional, profit, distributor and environmental orientation. We understand customer focus as a focus on customer needs; providing and continuously improving perceived value, quality and satisfaction within a long-term time horizon with a view to achieving superior market performance. RBL follows a model consists of six dimensions representing key organizational leverages through which customer focus is implemented. Market (customer) orientation is therefore not a separate dimension, but is reflected in all organizational leverages. The first dimension of the model is strategic deployment. Discrete strategic leverage is important organization- wide orientation ofRBL because it concerns top management factors (barriers), the strategy building process and necessary resources.RBL considers strategic deployment as a first leverage. Through this leverage, market orientation should be manifested as a visible senior management commitment, as the presence of it in theRBL’s mission, as alignment with business strategy and as provision of adequate resources. The second dimension of the model is internal integration leverage.RBL focus focus on internal environment and intra-functional coordination. Under this dimension,RBL coordinated utilization of company (capital and human) resources and full departmental .
Alignment and balancing internal orientation with external. Internal integration leverage is implemented in RBL through activities leading to efficient and satisfied employees such as training, internal communications, empowering, motivating, rewarding, but also through internal quality management and efficient inter-departmental cooperation. The third dimension of the model is market knowledge management. RBL emphasis on information handling (analysis, generating, disseminating) and additional activities like interpretation and use of marketing knowledge. RBL more focused on learning as a form of information generating where all important information for marketing decisions and also balanced metrics of market performance
As the fourth dimension of the model, an organizational infrastructure. In RBL, different organizational elements and systems such as organizational structure, centralization, information technology and communication systems play important factors of market orientation. The fifth distinctive dimension of the model is customer interface design. AS a market oriented organization, RBL always close contacts with customers. They believes that the importance of the interaction with the customers also lies in the fact that a customer’s value is largely produced during their interaction with employees, other customers and organizational systems. Therefore, frontline communication and interaction points with customers should be managed as a coherent whole. As market orientation is concerned with sources of customer value, customer interface design should therefore be one of its key leverages. Customer interface is a relatively independent organizational entity and it requires distinctive management emphasis and operationalized as the extent of customization, fulfillment of expectations, management of emotional, social, technological and environmental elements of interaction, but also through long term, relationship impacting activities. Finally, organizational culture is the sixth dimension of the success of RBL. Organizational culture is an important factor of driving RBL as an market oriented organization in this field which encompasses tangible elements such as behaviors and artifacts, and intangible elements, such as values, beliefs and norms. Customer orientation as a set of beliefs which puts customer interests first. RBL focuses greatly on customer needs information which are more deeply rooted values and beliefs that are likely to support customer focus and permeate the RBL. 2.6 Product overview Rahimafrooz markets three major brands of automotive batteries: LUCAS, VOLTA and SPARK. All the batteries are produced under strict quality controlled plant of the Rahimafrooz Batteries Ltd. It has introduced new brand SPARK for the taxi cab. This specially designed to take the load and frequency of the taxi cab. Automotive Battery Lucas Automotive Dry Charge Battery: • 12 Volt Battery • German Drive Range • Heavy Duty Range • 6 Volt Batteries • Lucas PCM Industrial Battery Rahimafrooz manufactures specialized Industrial Batteries. The plant is equipped with modern production machineries and testing facilities including those for tubular plates. It conforms to international standard ISO 9001 & ISO 14001and to JIS, DIN, BS and IEC specification. It produces a wide range of lead-acid industrial batteries with capacities from 20AH to 2500AH. The batteries are used for applications in telecommunication, power station, railway system, electric vehicle, forklift, ship, buoy lighting and solar power system.
Industrial Batteries • Electric Car Battery • IPB Battery • Standby Stationary • Traction Specific features of industrial battery are: • Long life • Minimum maintenance • Low internal resistance . High rate of discharge performance • High resistance to adverse mechanical and electrical condition • Tolerance to extremes of temperature Electrical Vehicle Battery Special Features: • Excellent cycling ability provides high reliability and exceptionally long life • Large electrolyte reservoir means high tolerance to water loss and minimal maintenance. • High charging efficiency • Low self discharge, dry pre-charged plates • Robust, clear case and rugged construction ensures mechanical durability The quality, dependability, reliability and long service life of thicker Flat Plate deep cycle batteries are the result of balanced design of the plates, separators and incorporation of latest technical developments in lead acid battery technology.
2.7 Price Rahimafrooz Batteries Ltd product Price are listed below:
SL NO. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.
Battery types NS40Z HB CNG NS40ZL HB CNG NS60 HB CNG NS60L HB CNG NS60S HB CNG N50Z HB CNG AP50 AP70 AP100 AP120 PCM15 PCM17 PCM21 PCM25 S29
Retail Price 5707.35 5707.35 6782.23 6782.23 6782.23 8420.44 4398.53 6026.06 8826.44 10287.03 8347.36 8841.67 10326.61 11855.20 12435.78
2.8 Distribution Channel
Dealer Wholesaler Retailer End user
2.9 Promotion At the beginning of the promotion 4 or 5 billboards at major points of the industrial area can be used for 2 to 4 weeks, than frequently Press ad, Banners T-shirts, caps CSR Activities, and discount, gift and free promotional activates . 2.10 Target Market Strategy
The first step of marketing strategy is target marketing. Traction battery target market can be divided into two major categories: â€˘ â€˘
Local market Export market
The industrial batteries local market includes various segments and individual segment has different requirements. Local market includesIndividual customer: Rahimafrooz Batteries Ltd. would sale traction batteries directly to the individual customer if any order is in place. For this the company needs to communicate with the companies more frequently and asses their needs. As a result of this the order of the battery would increase rapidly. Institutions: Institutions are another large segment of local market. Rahimafrooz should participate more and more on tender for getting order of traction batteries from various institutions. Dealers and Resellers: The large market segment of traction batteries are dealers and Resellers of Electric Battery. For this the company should contact to the dealers directly to supply the battery. According to the market survey it is found that the new Battery can be import without battery. In that case Battery would be supplied from Rahimafrooz. As result of this battery sale would increase rapidly and if the user needs any battery in the future they can contact directly to Rahimafrooz. It would gradually decrease the promotional cost as well. 2.11 Product Strategy Packaging: The features of the product and their utilities should be communicated through the packaging. For the current packaging, an attention grabbing sticker should state the precise warranty plan. A new packaging design should be implemented. In this design: List of features and their utilities should be given. Replacement and warranty should be mentioned in the front. Major features can be mentioned in the front in such a way that it grabs attention of a customer. Entire packaging should be done in English only. However, the caution sign on top should remain in Bangla to ensure that everyone understands. Its English translation should be printed next to it. Usage of English gives an impression of exclusivity or high quality to many customers. Along with the guarantee card, a leaflet should be provided to the customer, which will state the features and benefits of Volta MF on one side and the proper procedure for handling and using the battery on the other. Other information like numbers for after sales service and battery disposal can be highlighted here. Following is a sample of the way information can be displayed on the package for customer:, Features
18 month free replacement 24 month limited warranty Maintenance free
Rahimafrooz gives you the longest replacement offer in the market —because it lasts longer. With a 2 year warranty you can rest easier for a much longer period of time. No more refilling! Saves time from your busy schedule and enjoy more convenience.
Allows you to easily check the battery’s charge yourself at a glance.
EMT Technology Ensures longer battery life by reducing shedding. Calcium-calcium Ensures longer battery plate life so the battery lasts longer. battery Delivered filled and Batteries are ready to use. There’s no need to fill electrolyte into the charged battery before installing reducing installation time Countrywide after sales Enjoy free after sales service from any one of our outlets. service 2.12 After-sales service: Leaflets provides to customers. There would be a facility called customer helpline telephone number which they can use to call if they need a battery replacement or simply for a battery check up. At present customers can call a certain number of RBL to dispose their batteries. Then, Rahimafrooz collects the battery from the customer and recycles it. This service should be properly promoted to customers at POS and during the sales of the battery. If the call centre is introduced the customer won’t have to face the hassle. They would directly communicate with the RBL. As a result of this service would be enhanced. 2.13 Warranty/replacement: Free replacement should be extended to 18 months. Also, the 24 month limited warranty should have a simpler pro rata basis. For example, if the battery is at fault after surpassing the replacement warranty period by three months then the customer will get a high discount on the retail price for the next battery he or she purchases from the company. If the battery is at fault within the 22nd and 24th month then a lower discount will be provided to the customer on the purchase of the next battery. 2.14 Promotional strategy Billboard At the beginning of the promotion 4 or 5 billboards at major points of the industrial area can be used for 2 to 4 weeks. All the billboards will go up on the RECHARGE day. These billboards will be made in the shape of batteries. They will clearly display Rahimafrooz brand as well as the two unique advantages points: long lasting and more applications. The billboard will also display Rahimafrooz’s logo but comparatively in a smaller size. After the stated time, no billboard will be displayed. After 5/6 months the billboards can be put up again for another 4-8 weeks. Press ad Teaser ads can be put on three national dailies (24 column inch) for two consecutive days (Sunday & Monday). On Sunday’s teaser, the places of the billboards will also be named. Sunday will be the MAINTENENCE day. The final ad will also go on Monday. The final ad
will communicate the Volta brand name, Rahimafrooz brand name and major features and utilities of the product. Banners Banners bearing Rahimafrooz Traction Battery logo and the battery picture can be put up at different dealers & Supplier of battery operated Battery, garages, workshops, service centers. A sticker describing all the points above can be pasted on Each and every Forklift that runs on Rahimafrooz Traction Battery. This will create a strong brand image among the user as well as the potential customer of the Traction Battery. T-shirts, caps T-shirts and caps bearing Rahimafrooz Traction Battery logo can be distributed among garage mechanics, employees at Traction battery using companies and retailer shops etc. 2.15 Sales Strategy Change in sales process can be obtained through the field team. They will monitor the sales process of the inspecting outlet and advice the owner in ways to improve the process i.e. showing the battery packaging, comparing different batteries and their features etc. They should also be advised not to reduce their margin for Rahimafrooz Traction Battery since it is a premium product and most companies are willing to pay the MRP. Battery usage procedure of the Battery operated Forklift owners can be corrected and improved by the leaflets that are provided. Battery operated Battery Supplier should be advised to teach the usage of charge indicator at the time of sales. Along with the revised Sales process strategy, a strong distributional strategy can foster the sales. Push strategy can be best fit for this kind of product sales. 2.16 Market Growth The market for Battery tends to follow the general economy. Demand is diversified across major industrial sectors. Prior to 2000, the market growth has been a steady market with growth between 4% and 5% annually. The recession of 2001 caused this market to lose some 7% of its value in 2001 and 2002. Recovery began in 2003 and continues through 2006 at a torrid pace. The battery market grew 65% in 2009. Demand for battery is dominated by Asia, North America and Europe with various regional growth rates, such as: Asia has the 18% growth rate, Europe has the 4% and North America has the 8% growth rate in their own battery market. 2.17 Overall Battery Market Overall Battery Market Name Rahimafrooz Batteries (RA) Hamko Volvo Navana Rangs Voltex Others
Quantity (Piece @ Month) 78132 78130 43858 16937 5038 8106 30890
Overall B attery Market S c enario O thers , 12% V oltex , 3%
R A , 30%
R angs , 2% Navana, 6%
V olvo, 17%
Findings of the Study 3.1The SWOT analysis The SWOT analysis of Rahimafrooz reveals the actual scenario and the competitiveness of Rahimafrooz Batteries Ltd in the market. Though there are large number of competitor exists in different areas but Rahimafrooz Batteries Ltd has some advantages over them. The SWOT analysis of Rahimafrooz Batteries Ltd is in the following: Strengths • • • • • • • • • •
Wide range of product to satisfy a large number of consumers range. Competitive price through out the international arena. Own set up in India & Nepal. Outsized Production Capacity to meet the market demand both home and abroad. Efficient workforce to ensure the best quality as well as production. ISO 9001 & 14001 certified company. Local market Leadership with 54% SOM. Strong local Distribution network that ensures the proper supply of battery through out the whole world. Over 4 decades of battery manufacturing experience. Strong brand image and brand recognition that increases the Company’s value to the whole world
Weaknesses • • • • •
No lead reclamation facility. Lack of own Brand Image in export markets. Absence of a global brand. New product development. Technical know how.
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Product outlook is not up to the mark. Inconsistent product quality. Reduced battery life: ignore consumer preference. Inadequate sales force in RBL India operation. Lack of forecasting skill. Less control over primary raw material .(Lead) Dependency on few big dealers/importers for local & export markets. Lack of marketing communication along with the promotional activities that leads to a less sale. Inappropriate warranty management for local & India market. Declining brand equity & brand recall trend. Internal brand cannibalization.
Opportunities • • • • • • • • • • • • •
Growing & emerging markets in Asia. Battery market growing by 7%. Increasing price trend of Chinese products. Cash Incentive in Export. High Growth potential in Middle East, Asia & Africa. Duty Free access Canada, Thailand, China, Australia, New Zealand. International exposure by set up sales office in Dubai. Re-export facility from Dubai. Jebel-Ali facility to do sourcing, branding & re-exporting. FTA arrangement with more countries. Merger & acquisition of production facilities in overseas. Rural market (AP battery). Marine battery market.
Threats • • • • • • • •
Increasing quality concerns from customers. Unstable LME. Trade barriers in overseas markets. Absence of brand registration in some Export markets. New competitors in the local market that gaining local market share. SD withdrawal. High Price inviting more competition from local & overseas. Entrance of major Global battery manufacturer in Bangladesh.
3.2 Problems Identified Customer believe that they will be aware of the quality of the products from the distributor. They want the prices of the products should be presented along with the product to decide which product is economical and they are not willing to bargain for the price. Customers face inconvenient location. RBL Wastage is high.
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Inappropriate warranty management for local & Indian market. They are only own Brand Image in export markets. Inadequate sales force in RBL India operation. Low forecasting skill. Less control over primary raw material . Dependency on few big dealers/importers for local & export markets. Lack of marketing communication along with the promotional activities that leads to a less sale. Internal brand cannibalization. High Price inviting more competition from local & overseas. RBL no lead reclamation facility. Due to lack of capital and government support. There is a very little practice for increasing motivation in the workers by the management. The RBL is not fully computerized. Raw materials are not being available on time. Production capacity is limited. Lack of proper planning on production life-cycle
3.3 The Global Competitors There are hundreds of companies who supplies traction battery to the electric forklift industry. Among them C&D Technologies, Inc., Crown Battery, CSB Douglas Battery Mfg. Company, GNB Industrial Power, Kung Long Battery, Leoch, Panasonic (Worldwide), Power Sonic Corporation, Power Battery Company, Inc., Yuasa/U.S., U.K., China, Taiwan etc are the popular battery company worldwide. Conclusion & Recommendation 4.1 Conclusion Achieving successful implementation is a continuing challenge to the executives responsible for executing strategies and to the scholars seeking to understand implementation processes. The changing characteristics of the market-driven era will undoubtedly affect strategy formulation and its execution to achieve the sustainable competitive advantage and market. Rahimafrooz Batteries Ltd is the market leader of battery industry in Bangladesh. It holds overall 74% market share in the local battery market. Rahimafrooz Batteries Ltd, has two battery plants operating one in Nakhalpara and another one in Savar. As the new technologies are emerging day by day it’s creating huge opportunity for RBL to grab. Rahimafrooz Batteries Ltd, is giving much priority to export as a tool for organizational growth from 200809. As a part of this they should also emphasize on the local IB battery market by giving more concern on the Traction battery market. Not only it should concentrate more on the local market but also a more concern of exporting Traction battery is needed. Definitely this will increase the sales as well as revenue. As shown in the report the total Traction battery market is still untouched, the right time is now to grab the market which is still in the hand of the foreign import. A right set of strategy can be well enough to grab this opportunity. The local as well as global traction battery market is growing very fast as the increase of modern era along with modern technology and Rahimafrooz Batteries Ltd. needs to form proper planning to hold significant share of future Traction battery market. To sustain in
home country Bangladesh and also international market, market orientation is necessary for Rahimafrooz to make a competitive posion in the market, build brand and also satisfying customers by delivering superior value. So from the study we can tell that Rahimafrooz Batteries Limited is practicing market driven strategies which make the RBL market-oriented organization and achieve a sustainable competitive advantage through acquiring distinctive capabilities in this business arena. Rahimafrooz began its operation as a trading company in 1954. Today Rahimafrooz has diversified in many areas from storage power solution to automotive aftermarket to retailing. By delivering superior value according to customer requirements and preference, RBL is now the market leader and making profit and arrived as reputed business house not only in Bangladesh but also in South Asia region. They achieved today’s position through long experience, dedication to the business, value addition to the product and continuous effort to R&D and finally meeting the customer equirm,ent satisfactorily. 4.2 Recommendations We have some recommendations for the battery market of Rahimafrooz Batteries Ltd the following recommendations: • • • • • • • • • • • • • • •
Increase warranty management for local & International market. Price should be reasonable. Employees should be co-operative with customers. Company should not plan to produce without considering its actual plants capacity. Company should introduce more efficient layout and work methods. It should reduce stocks and organize production more effectively. Rahimafrooz Batteries Ltd should be Meeting targets and standards. Rahimafrooz Batteries Ltd should be Avoiding accidents and making useful suggestions. The company should be more aware of JIT (Just in time) in allover its function. The company should also pursue its vision of innovation, speed and service-driven marketing, activities to the complete satisfaction of the customers. Delivery process for establishing the internal customer supplier linkages, performance indicators and establishing preliminary improvement targets and action plans on some of the issues. Rahimafrooz Batteries Ltd should needs process reengineering. The company in house training program for skill enhancement should be followed. Quality working conditions for the factory workers should be ensured. Rahimafrooz Batteries Ltd Inter-group conflict should be avoided.
4.3 References Amit,R, & Schoemaker, P,J,H 1993, Strategic assets and organizational rent. Strategic Management Journal, 14(1):33-46 Annual Report of “Rahimafrooz Batteries Limited” 2008 Annual report of “Rahimafrooz Batteries Ltd” 2009 Annual report of “Rahimafrooz Batteries Ltd” 2010 Bowen J.T and Chen S.L “The relationship between customer lowelty and customer satisfaction” 2002 D. Cahill “ Marketing Intelligence and Planning” Volume 11, 2001,Issue 6
Joseph Sugarman, “Marketing Secrets” 2006, Volume 2, John Caples “ Tested Advertising Method” 2009, 5th edition, Noresh K Malhotra “ Marketing Research” 2010, 5th edition, Philip Kotler “ Marketing Management” 2010, Millenium edition, S.Netessine and T.A. Taylor “ Product line design and production technology” 2007, 26(1): 101-117 W.J.Hopp and X.Xu “ Product line selection and pricing with modularity in design” 2005, 7(3) :172-187 http//www.electroniccomponents.com http//www.dcpowergroup.com http//www.rahimafrooz.com http//www.searcheio-midmarket.techtarget.com http//www.knowthis.com http//www.businessguide.com http//www.ehow.com http//www.productstrategy.net