18 May, 2013 The Faculty, Md.

Anwar Hossain Assistant professor Department of Marketing, Faculty of Business Studies, University of Dhaka Dhaka-1000

Subject: Submission of Report.

Sir, We forward herewith the report and document about “Supply chain strategy of Agora: with price addition at each stage” for our course no: 413 named “Business Logistics”. We look forward to receiving any comments that you may have in relation to the above. Thank you for your attention. Yours sincerely, Group name: 1971 Batch no: 16th Sec: A Department of Marketing University of Dhaka

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ACKNOWLEDGEMENTS

We take immense pleasure in thanking our faculty, Md.Anwar Hossain Assistant professor, Department of Marketing for having permitted us to submit the report.

Finally, yet importantly, we would like to express our heartfelt thanks to our beloved parents for their blessings, our friends and classmates for their help and wishes for the successful completion of this report.

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Business Logistics A report on “Supply chain strategy of Agora: with price addition at each stage” By 1971 UNIVERSITY OF DHAKA FACULTY OF BUSINESS STUDIES DEPARTMENT OF MARKETING Batch 16th Section: A 18 May 2013 3|Page .

Toriqul Islam Roll no.A Program Department of Marketing Faculty of Business Study University of Dhaka Group Detail… Name of Members Mahabub Elahi Sahed Mahmud Loren Ashraf Sayela Nazneen Md.B. 13 31 71 117 123 261 4|Page .Submitted to.Anwar Hossain Assistant professor Department of Marketing Faculty of Business Study University of Dhaka Submitted by. Md. Group name: 1971 Sec: A 16th batch B.Ariful Islam Md.

Dairy. and Cosmetics.com) 1. Fish. Uttara.Excel Retreads Limited 6. Late A. it has mainly operated in the automotive industry.Greyfab Limited 8. Meat. It is offering more than 20. The brand name for this SBU is Agora. It is doing business in the country for more than 50 years with fame and reputation. Vegetable. With twelve large outlets in Dhanmondi.Metronet limited This report is made for RahimAfrooz Superstore Limited.RahimAfrooz CNG limited 10. The SBUs of Rahim Afrooz are: (www. Maghbazar and Sobhanbagh. Pharmacy. It is established to provide quality shopping experience for its customers. These items are divided into 11 categories. it is also the largest retailer in the country. RahimAfrooz Distributions Limited 3. It is the leading superstore in the Dhaka & Chittagong city. Fast food. 5|Page . It operates in an SBU model. The main strength of the group is its reputation of doing ethical business practice. (www.Super Abrasives Limited 7. Gulshan. A man gifted with an inherent entrepreneurial sense. It has revolutionized the retailing industry of Bangladesh. The categories are: Household.000 items under one roof.Arzed Limited 9.agorabd. Bakery.RahimAfrooz Superstore Limited 4. Recently it has extended its business in energy and retailing business.RahimAfrooz Energy Services Limited 5. Throughout its business during last 50 years. Mirpur.rahimafroz.Historical background of Agora: Rahim Afrooz is one of the leading business groups in Bangladesh. Grocery. RahimAfrooz Batteries Limited 2.com) The name of Agora is entwined with the glory of-the Agora’s marketing policy “to create a better environment for consumers”. Fruits. C.

which continued to expand in scope and nature as time went along. Meena Bazar. The management of Agora was an enthusiastic advocate of trading stamps as an inducement for shoppers to patronize their stores: They signed up with all types of quality products manufacturer. (www. Pick and Pay. quality and struggling spirit make efforts to scrupulously abide by our goodwill.agorabd. (www. Agora will always maintain the pure-hearted. compact discs and consumer telecom accessories. But the management was a fan of pile it high and sell it cheap.com) Agora is a Dhaka-based supermarket chain. In 2000. and the largest retailer in Dhaka leaving behind PQS. Pacific. mainly engages in retailing the quality products at the most lowest price in the market.com) Originally specializing in food. create splendid future together with you in management vision of joint development. joint prosperity and mutual benefits! (www.agorabd. the founder of Rahim-Afrooz started a trading house in 1973. Nandan Mega Shop. The success was immediate as there was a demand for such business in the local market. (www. (www.com) 6|Page . an across the board price cutting campaign aimed at countering the threat from the new breed of discounters such as Kick Save. it has moved into areas such as clothes.agorabd. and in the mid-2000 Agora faced many cost problems associated with not properly integrating its purchased chains of stores. consumer electronics. Shop & Save and others. enterprising. Agora was introduced to the world. When the firm overstretched itself opening few more outlets throughout the city.com) Agora Ltd. selling and renting DVDs.com) Facing the world and looking beyond. and consumer financial services. In 2001 Agora launched Operation Checkout. is an enterprise that combines industry and trade. and became one of the company’s largest clients.agorabd. Etc. Agora's state-of-the-art technology and creative strategy gave it an edge ocher its competitors at local market.agorabd. It is the largest retailer. both by local sales and by domestic market share. management consultants were called in to sort out the mess.Abdur Rahim.

etc) • Baby foods and products • Bakery • Books.Types of items Agora typically sells: Agora typically sells many different types of items. and magazines. DVDs • Confectionery • Cosmetics • Clothing and footwear • Dairy products • Diet foods • Electrical items • Feminine hygiene products • Frozen foods • Fruits and vegetables • Housecleaning products • Meat • Medicines and first aid items • Personal hygiene and grooming products • Snacks (Agora outlet. Uttara) 7|Page . such as: • Beverages products (juices. newspapers. energy drink. including supermarket tabloids • Car care products • CDs.

com) • One plank of this inclusivity has been Agora's use of its own-brand products. "They've pulled off a trick that I'm not aware of any other retailer achieving.0% share of the grocery market according to retail analysts TNS Super panel. which had been the leading competitor until it was beaten by Agora in 2004. In the year 2001 Agora's brand image was so negative that consultants advised the company to change the name of its stores. During its long term dominance of the supermarket sector Nandan’s retained an image as a high-priced middle class supermarket which considered it to have such a wide lead on quality that it did not need to compete on price. It did not accept this advice. compared to the 16. This strategy has been abandoned since losing the number 1 spot to Agora and particularly since the adaption of new management in 2004 that has established a new customer-focused strategy closer to that of Agora.8% share of ASDA and 15.6% share of thirdplaced NANDAN. Its initial success was based on the "Pile it high. That is to appeal to all segments of the market”. with a 29. Key reasons for this success include: (www. yet by early 2003 it was the largest retailer in Dhaka. This phrase is used by Agora to describe its aspiration to appeal to upper.agorabd.Marketing strategy of agora: Agora's growth over the last 6 years has involved a transformation of its strategy and image. including the up market "Finest" and low-price "Value".com) • An "inclusive offer". medium and low income customers in the same stores.agorabd. sell it cheap" approach of the founder management of Rahim Afrooz. and was indifferent to attracting lower-income customers into its stores. According to Citigroup retail analyst David McCarthy. (www. The disadvantage of this was that the stores had a poor image with middleclass customers. which can undermine its appeal to up market customers even though it actually sells a wide range of up market products. The company has taken the lead in overcoming customer 8|Page . By contrast ASDA's marketing strategy is focused heavily on value for money.

agorabd.Many supermarket chains have attempted to diversify into other areas. The company's mission statement reads. CDs are one of the best examples. We deliver this through our values. Uttara putlet. contributing its customer base and brand strength to the partnership. the suppliers of Agora supply their products on a regular basis to the different outlets and direct supply of products is ensured. from clothing to consumer electronics to health and beauty to media products. they do not compromise with its desired quality at any of its outlets. (www.com) • The management in the mid 2000 has taken the bold step of trying not to focus on the usual corporate mantra of "maximizing shareholder value". Agora sends it back to its 9|Page . It has been innovative and energetic in finding ways to expand.agorabd. To ensure proper quality of their products specially the agricultural one they demand CHILLAR VAN from their suppliers. Basically. Agora sells an expanding range of own-brand and as well as local and international non-food products.50.reluctance to purchasing own brands. Another plus point of Agora is that they take orders and supply products to the customers directly to their house in an emergency situation. grocery retailing in its home market.com) O "Retailing services" .com) • Diversification: The company has a four-pronged strategy: O "Core Dhaka business" . but Agora has been exceptionally successful.00. Floor manager. Agora) NO INTERMEDIARIES are involved in their supply chain system. Other supermarkets in Dhaka have done some of the same things. (www. Al the transportation costs are carried by the suppliers.com) Supply chain strategy of Agora As Agora is highly sensitive to its quality. but there is a clear focus on customer service at the top level of the company. If there is any defect in any products. O "Non-food business" . which are generally considered to be more profitable for a supermarket as it retains a higher portion of the overall profit than it does for branded products. including non-food Value and Finest ranges. It also has done quite well in non-food sales in Ireland.00 compared with local Music Stores selling the same for around Tk. but Agora has generally implemented them more effectively. with Agora Gulshan promising to sell all chart CDs (except compilations) for Tk.agorabd. (Mahmudul Hasan. 'No-one tries harder for customers'. The underlying aim is of course to make higher profits. and thus made most profit. which the major supermarket chains have traditionally shunned. "Our core purpose is.agorabd. such as making a large-scale move into the convenience-store sector. 70.That is. (www. and 'Treat people how we like to be treated'". This type of van is used to protect the agricultural products from being rotten and to ensure the desired quality. By late 2004 it was widely regarded as a major competitive threat to traditional high street chains in many sectors. One basic thing which should be focused on is that the suppliers supply directly to the outlets to ensure the timely supply of products and not to the warehouse or main outlet or the head offices which others follow. They have set up 12 outlets at the major areas of the Dhaka city to reach their customers more efficiently. (www. 'To create value for customers to earn their lifetime loyalty'.Agora has taken the lead in its sector in expanding into areas like dairy and utilities. It usually enters into joint ventures with major players in these sectors.

Although Agora rejected to tell us the actual source or the actual addresses of their suppliers. floor manager. it will look like the following: Supplier Customer Supplier Customer Agora outlets Supplier Customer Supplier Customer 10 | P a g e . Narshingdi. they agreed that most of their suppliers of agricultural products are from the nearby cities. Narayanganj.suppliers. Uttara outlet. sub-cities and villages of Dhaka city such as Savar. Gazipur. Agora). If we show the supply chain of Agora briefly in a diagram. Manikganj and so on. More than 3-4 suppliers are involved in each type of products to ensure quick supply to meet emergency demand of products. (Mahmudul Hasan.

Dhanmondi (2 outlets) and Uttara (1outlet). based on the people’s purchasing power of those particular areas). (Sudhamay Chandra Das. 11 | P a g e . Uttara outlet. but they demand 22%-25% profit from comparatively higher purchasing power areas of Dhaka city such as Gulshan (2 outlets). Rest of the outlets are followed the middle positioned pricing method to keep the customers in their hand and to sustain in the market. A point should be noted that the cost of producing or purchasing products from the suppliers is all the same for all outlets.Value addition at each stage: Since Agora sets different prices for its products in different areas. store manager. Agora) A list of value addition at each stage is given below: Product name Probable supplier cost Price at Uttara outlet Potato(small size) Potato(large size) Carrot Brinjal(both large &small) Rice(minikat) Rice(chinigura) Egg(chicken) Egg(duck) Beef(with bone) Beef(boneless) Elish 18-19 TK per kg 20-21 Tk per kg 20-21 Tk per kg 35-40 Tk per kg 32-35 Tk per kg 85-90 Tk per kg 30-32 Tk per Hali 35-36 Tk per hali 340-345 Tk per kg 340-345 Tk per kg 700-900 Tk per kg 22Tk per kg 24Tk per kg 24 Tk per kg 50 Tk per kg 41 Tk per kg 105 Tk per kg 35 Tk per hali 40 Tk per hali 362 Tk per kg 480 Tk per kg 1400-2000 based on grade 129(discount 16tk) 250 Tk per kg 320 Tk per kg 720 Tk per kg Probable Price at Mirpur outlet 20Tk per kg 22 Tk per kg 22 Tk per kg 45 Tk per kg 39 Tk per kg 100 Tk per kg 35 Tk per hali 40 Tk per hali 355 Tk per kg 460 Tk per kg 1400-2000 based on grade 129(discount16tk) 250 Tk per kg 310 Tk per kg 700 Tk per kg Telapia fish 100-105 Tk per kg Chicken(normal) 230-240 Tk per kg Chicken(thigh) 280-300 Tk per kg Shrimp(golda) 550-600 Tk per kg Source: Uttara outlet. It means that Agora basically follows the COST-BASED PRICING APPROACH as the pricing strategy of doing their business and most of their products’ pricing is customized based (different prices of same products at different outlets. Moghbazaar etc. Shantinagar. Agora. they claimed that they charge 15%-17% profit over the cost of purchasing their products from suppliers in relatively low purchasing power areas in Dhaka city such as Mirpur. former floor manager.

70000+=2 Marital status: single=3. 46-55=2.8 1. 35000-50000=4.1 1.3 1.7 2.5 1. home maker=2 Approximate monthly income: below 20000=1.4 2.4 1. under graduation=5. service holder= 4.1 2. SSC=0. married=12 I’m a customer of Agora for: less than 1year=3. 56-65=1. post graduation=8.8 Delay in deliverables? Have not found high priority items? Look like a junk store? Delayed response to your call? Improper behavior by one of our employees? Communication difficulties with the staff in charge? Lack of required information? Other? (Please Specify) NO       3 2 10 2 Number of Occurrences 12 | P a g e .7 1. business person=7.5 2.6 1.2 2.9 1. 2-3years=6. below SSC=0 Occupation: student=2. 3-4years=2 1. 26-35=5.Survey 1: The total number of respondents was 15 and the survey was taken place in Agora outlet. 65 and above=0 Education: doctorate=0.2 1. 5000070000= 5.6 2. Uttara. 36-45=3. 1-2years=4.10 Swiftness in delivering the ordered products Quality of the products Skills of the employees Quality of the services provided Easiness to find out the right product The use of automated billing system Responding to your needs Quality of cooperation with our staff Customer support service provided Behavior of the sales staff 1 0 0 1 0 0 0 2 0 3 0 Poor 2 0 0 3 0 0 0 3 1 3 1 3 3 3 3 2 3 0 4 2 4 3 4 7 4 4 6 10 7 6 5 3 6 5 5 8 4 7 2 8 0 7 2 5 superior Please mark whether one the following have incurred during your purchases from _ _ _ _ _ _ _ _ YES 2. 20000-35000=3. HSC=2.3 2. The results were as follows: Age: 15-25=4.

Merchandise displays are attractive Advertised merchandise was in stock. 2Disagree. the quality of their products is up to the standard The price that they charge is reasonable Purchase from other super shop will incur high switching cost Lowest lead time after online order placement The range of the products of _ _ _ _ _ _ _ _ _ _ _ is diversified Employees in this store give prompt service to customers Strongly Disagree 0 0 0 0 0 0 0 0 0 3 0 0 0 4 8 0 0 2 3 4 5 Strong Neu Disagree Agree ly tral Agree 0 1 0 0 0 1 0 2 0 2 1 1 0 6 7 1 0 0 3 4 3 7 0 5 3 5 6 5 0 5 3 6 5 3 0 7 8 8 5 5 5 4 8 4 4 7 4 7 7 4 2 0 4 3 4 2 10 5 8 2 5 4 8 1 4 1 6 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 13 | P a g e . 5.Neutral. 3.Strongly Agree 1 Variables Purchase from _ _ _ _ _ _Agora _ _ _ _ _ improve the customer status When this store promises to do something by a certain time. 4 –Agree. it does so When a customer has a problem. Store atmosphere and decoration are appealing A good selection of products was present (Store) has the lowest prices in the area.Please put tick mark for each statement in appropriate box where 1-strongly disagree. Merchandise sold is of the highest quality The merchandise sold is a good value for the money. this store shows a sincere interest in solving it. Store hours are convenient for my shopping needs.

strongly disagree=0 11. I’m satisfied with the overall service provided by Agora Strongly agree=4.18 19 Employees in this store are never too busy to respond to customer's requests Employees of this store are able to handle customer complaints directly and immediately This store gives customers individual attention 2 1 5 2 1 4 4 5 4 4 20 3 4 1 5 3 21 22 23 24 25 26 27 28 29 30 31 32 Employees in this store are consistently courteous with customers This store willingly handles returns and exchanges The physical facilities at this store are visually appealing. disagree=2. agree=7. neutral=2. Customers have no risk to deceived All the workers in _ _ _ _ _ _ _ _ _ _ _ properly trained anti-adulteration campaign performed by _ _ _ _ _ _ _ _ _ _ _ will build up trust Stores are conveniently located _ _ _ _ _ _ _ _ _ _ _ operates long hour a day 2 10 0 1 2 5 0 3 0 0 0 1 5 2 4 3 4 0 2 4 0 0 0 1 0 0 4 3 5 0 7 4 7 13 5 6 3 5 5 5 2 0 6 3 8 2 10 5 1 5 2 2 0 0 0 2 6 3 0 2 10. agree=7. neutral=2. Agora’s perishable products are always found fresh Strongly agree=5. disagree=1. or statements) are visually appealing The employees appear neat Customers feel safe in their transactions with this store This store insists on error-free sales transactions and records. Materials associated with this store's service (such as shopping bags. strongly disagree=0 14 | P a g e . catalogs.

S. Occupation Student=2 Postgraduate=4 S.Which of the following supermarkets do you use the most? (Please pick one answer only) Meena Bazar=1 Swapno=1 15 | P a g e .C =2 S.C undergraduate=3 Below Service holder=4 Business person=4 Home maker Approximate monthly household income [in BDT] Below 20000 50000.S.below 70000 Marital Status Single=3 Married=7 20000. done in our neighborhood Personal Questions: Age 15-25= 3 46-55 26-35=6 56-65 36-45=1 65 and above Education: Doctorate=1 H.Survey 2: Total number of respondents was 10.below35000=3 Above 700000=3 35000.How or where do you shop for groceries the most frequently? (Please pick one answer only) Super Markets=6 Local Markets=2 On-line High-street=2 Convenience stores Other Q2 .below 50000=4 QUESTIONNAIRE ON SUPERSHOP SURVEY: Q1 .C.S.

On average how often do you shop? I shop more than once a week=3 I shop once every 2 weeks=1 I shop once a week=2 I shop once a month or less Q7 .Agora=4 Nandon Prince Bazar Q3 . if you are now loyal to your current supermarket but used to shop at a different supermarket please indicate which ones below.On average.Why do you shop at your supermarket of choice? (Please tick all the answers that apply) Competitive prices Choice of products=1 Favorite brands=2 Location / convenience Quality of products=3 others Q4 . Meena Bazar=2 Agora=2 SsMart Others Swapno=2 Nandon Prince Bazar Q6 .Would you consider yourself loyal to the supermarket you use the most ( if question 2 is answered)? Loyal=3 Not Loyal=1 Moderately Loyal=2 Q5 .Do you agree or disagree with the sentence: 'The following supermarkets are competitive on price'? (Please answer for each supermarket) Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Meena Bazar Swapno Agora Nandon SMart Prince Bazar 0 3 2 2 3 2 2 1 2 1 1 1 1 2 0 4 2 0 2 0 1 2 1 0 0 0 1 16 | P a g e .

g. electrical. frozen etc.Do you agree or disagree with the sentence: 'The following supermarket offers a wide product range (e.)? (Please answer for each supermarket) Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Meena Bazar Swapno Agora Nandon SMart Prince Bazar Others 2 2 4 0 1 1 2 1 2 0 1 2 3 2 0 2 1 3 1 1 0 1 1 1 1 0 1 3 2 4 1 1 1 1 2 1 1 1 1 1 2 1 1 2 0 1 0 0 1 2 3 0 0 0 2 0 1 Q10 .Do you agree or disagree with the sentence: 'The following supermarket offers quality products'? (Please answer for each supermarket) Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Meena Bazar Swapno Agora Nandon SMart Prince Bazar Others Q9 . food. for food . chilled. etc.g.Others Q8 .?) (Please answer for each supermarket) Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Meena Bazar Swapno Agora 17 | P a g e 4 3 4 2 1 1 2 1 .fruit & veg. clothing.Do you agree or disagree with the sentence: 'The following supermarket offers a large choice of items within each product range (e.

6=worst) Swapno 18 | P a g e 2 G MART 5 .Nandon SMart Prince Bazar Others 1 1 0 2 3 2 3 2 2 2 Q11 .Do you agree or disagree with the sentence: 'The following supermarket offers value for money'? (Please answer for each supermarket) Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Meena Bazar Swapno Agora Nandon SMart Prince Bazar Others Q12 .Do you agree or disagree with the sentence: 'The following supermarket has a high level of presence in the market'(store locations.)? (Please answer for each supermarket) Strongly agree Agree Neither agree nor disagree Disagree Strongly disagree Meena Bazar Swapno Agora Nandon SMart Prince Bazar 4 2 5 1 0 0 2 0 0 2 2 2 1 2 1 0 1 3 4 2 2 1 2 4 1 1 1 3 2 2 2 2 2 3 3 3 2 2 Others Q13 . advertising etc. which one offers the best value for money? (rank 1=best value for money.Amongst the following supermarkets.

which one do you think respects the local community the most? (rank 1=most respectful. rank 6=least) Swapno Nandon Meena Bazar G MART Ssmart Others Q18 . which one offers offers a wide product range (e. rank 6=worst) Swapno Nandon Meena Bazar G MART Ssmart Others Q16 . which one offers a large choice of items within each product range (e. rank 6=least) Swapno 19 | P a g e G MART . chilled.fruit & veg. which one do you think is the most visible in terms of market presence? (rank 1=most visible.Amongst the following supermarkets. electrical. for food . which one is the most customer-friendly? (rank 1=most customer-friendly.Amongst the following supermarkets.Amongst the following supermarkets. rank 6=least) Swapno Nandon Meena Bazar G MART Ssmart Others Q17 . rank 6=worst) Swapno 2 Nandon 3 Meena Bazar 1 G MART 5 Ssmart 4 Others Q15 .Nandon 3 Meena Bazar 1 Ssmart 4 Others Q14 .)? (rank 1=best choice of products. clothing. food.)? (rank 1=best choice of products.g.g.Amongst the following supermarkets. frozen etc.Amongst the following supermarkets. etc.

Nandon Meena Bazar Ssmart Others 20 | P a g e .

9 9-10 11 12-14 15-20 21 21 | P a g e .Table of contents: Topic Historical background of Agora: Types of products Agora typically sells Marketing strategies of Agora Supply chain strategies of Agora Value addition at each stage Survey 1 Survey 2 References page 5-6 7-8 8.

www.com 4. Sector#04 Uttara. Dhaka-1230 Tele phone: +880 2 8920308. www. Road#04. 8921416 Mobile: +880 1832 154 585 E-mail: sudhamoy. Sector#04 Uttara.agorabd. Road#04.Mahmudul Hasan Floor manager RAHIMAFROOZ SUPERSTORES LIMITED (AGORA) Plot#02.rahimafrooz.Sudhamay Chandra Das Store manager (former floor manager) RAHIMAFROOZ SUPERSTORES LIMITED (AGORA) Plot#02. Md. Dhaka-1230 3.das@rahimafroz.com 2.References: 1.com 22 | P a g e .

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