Term Paper on

Future Trends of Marketing in Bangladesh

For the course Financial Management (MKT 506)

Submitted by: MD. ENAMUL HUQUE ID: 41323002

Submitted to: Dr. Md. Belayet Hossain Professor, Department of Marketing, Dhaka University.

December 2013

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Future Trends of Marketing in Bangladesh

Introduction: The American Marketing Association defines marketing as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Many people believe that marketing is just about advertising or sales. However, marketing is everything a company does to acquire customers and maintain a relationship with them. Even the small tasks like writing thank-you letters, playing golf with a prospective client, returning calls promptly and meeting with a past client for coffee can be thought of as marketing.

Consumer market: The economy of Bangladesh is in a rapidly developing stage. Our GDP growth rate was consistently more than 5% over past decade. It is anticipated that such high growth rate will continue over next one decade. This growth rate has created a large middle income group of customers. Also demographic distribution of Bangladesh shows a big segment of young age group who are primary buyers of the consumer market. So over the next one decade the consumer market of our country will expand manifolds. The increasing purchasing power of the customers will create more demands for the higher quality products.

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Real Estate market: Real estate sector plays vital role in our economy. High population growth rate and increased purchasing power of people is always keeping the real estate market vibrant. Real estate market will continue to grow exponentially over next one decade.

Online marketing: eCommerce is a type of industry where the buying and selling of products or services is conducted over electronic systems such as the Internet and other computer networks. eCommerce is growing rapidly worldwide. But growth of eCommerce is very slow in our country although this is a huge potential sector for next one decade. Following are some issues which is hindering the growth of eCommerce in Bangladesh: Limited scope of online payment processing is a big hindrance for online Lack of trust by the customers is attributing towards slow growth. For eCommerce it is vital that the buy get impartial and accurate information about the product from the seller on their website because the buyer cant examine the product himself physically. So he must have enough confidence on the sellers claim about the features of the product he wants to buy. Lack of trust among buyers and sellers is the main obstacle for the growth of eCommerce in our country. Another problem is very conservative refund policy of the sellers of Bangladesh. Since the buyer cant physically examine the product when he buy it through an eCommerce platform, it is important that the buyer can return the product and get refund without any hassle if he actually doesnt like the product after receiving it (may be due to having some defects). But
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in our country traditionally the sellers rarely entertain any refund claim. If the sellers can adopt more flexible refund policy then buyers will get more confidence to buy online through eCommerce websites. Expensive webhosting: Website hosting is very expensive in our country. There are only a few local web hosting providers having their own data center. Some companies sell hosting as reseller of foreign (mostly USA) hosting companies. Government must formulate policy to reduce hosting cost so that the small companies get encouraged to adopt eCommerce in addition with their off-line selling activities.

Tele marketing: Telemarketing is not yet that much popular in Bangladesh but the trend is increasing rapidly. Now we increasingly receive promotional phone calls from real estate and other companies. Recently I received a call from Eastern Bank Ltd. regarding their international credit card. I asked the called how they got my name and phone number they replied they collected information from the Institution of Engineers Bangladesh (IEB). It is clear that some stuff of IEB is selling members information to various companies unauthorized

SMS marketing: Shwapno chain shop is successfully using SMS marketing or regular basis to communicate the promotional offers to potential customers. Other companies are also using SMS marketing for their product launch and promotional activities. Another successful use of SMS marketing is to create social awareness. Our government send SMS in bulk to promote events like children vaccination, awareness about information right etc.
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It can easily be forecasted that use of SMS as marketing tool will increase consistently in the next one decade. Increase use of SMS for commercial purposes makes it necessary to formulate some rules and guidelines to control abuse of SMS system.

Increased Regulations: It is anticipated that many new regulations will come into effect to regulate unethical marketing practices like unauthorized telephone call, unsolicited SMS, bulk spam emails, giving false information, giving partial information,

exaggerated claims about product performance etc. Privacy violation by the advertisers is increasing alarmingly. The marketers are obtaining potential customers phone numbers and other personal data from various sources in an unauthorized manner which totally violates the privacy of the concern persons. Also consumer rights movements are pressuring government to formulate more restricted policy which will impose more responsibilities on the marketers. So the marketers have to be more careful while preparing a marketing campaign.

Payment processing: a) Credit and Debit Cards: Use of credit card for shopping is modern trend worldwide. In developed countries people rarely buy using cash, rather they prefer to buy using credit card. But in our country use of credit card is very limited. Only a fraction of high income group people is using credit cards. Credit card which is sometimes called as plastic money gives the consumers flexibility in shopping. The customer is no longer limited to available cash in pocket during shopping. So he can go beyond his budget which inspire the shoppers to buy more products. Our government
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has imposed a restriction that a person must have Taxpayer Identification Number (TIN) if he wishes to get a credit card. This is high discouraging people to obtain a credit card. As a result the use of debit cards which also work as plastic money but without any credit facility is increasing. Dutch Bangla Bank is the leader in issuing debit cards as the bank has a huge fleet of ATM booths. So we can assume that use of credit card will not increase significantly in next one decade but use of debit card will increase significantly. Now the super malls are accepting cards but most of the little shop owners have not still accepting cards. After one decade most of the shop owners in big cities as well as in many smaller towns will embrace this technology of payment processing.

b) Mobile payment: Mobile payment option is relatively newer technology and it is spreading quickly worldwide. We got this option few years ago. Initially BRAC Bank introduced bKash and Dutch-Bangla Bank introduced Dutch-Bangla Mobile Banking. So far BRAC Banks bKash has become very popular for money transfer. Now many other banks has introduced mobile payment option. Mobile payment option has got popularity at grass root level of the country as this is an almost instant method of sending and receiving money. Some online shop owners are now accepting payment through mobile payment processors. It is anticipated that the use of mobile payment processing for shopping will be very common after few years. Not credit cards but mobile payment will be the main mode of payment for online shopping in Bangladesh within few years. The super malls will also start accepting mobile payment within few years. This payment option is still in

development stage. Following are some steps required to make it more popular: Reducing transaction fees. Improving security features to prevent frauds.
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 Introducing refund option for the merchant account holders.

Communication Channels: Communication channels are very important for marketing of products and services. One of the major task of marketing is to disseminate product information to the target segment of customers. Choosing proper channels to reach the target potential customers is crucial for a successful marketing campaign. Lets discuss some prominent communication channels used by the marketers of our country. Television: Television is one of the major advertising medium in Bangladesh. There are so many private TV channels operating through their income from advertising. Television will remain as a influential medium for marketing particularly for consumer goods in the future too. One decade ago it was feared that internet may make television obsolete but it proved to be wrong. Popularity television as a medium of entertainment is still increasing. Rapid reduction of price of television and increased purchasing power of consumers are attributing towards increased popularity of television. Also existence of too many television channels has reduced the price of air time on television. So television will remain number one medium of advertising in next one decade too. Printed Newspaper: In developed worlds, the printed newspapers are in threat from online media and already many local newspapers have been closed down and some popular printed newspaper ceased to print and publishing only online version. But in our country printed newspaper still play vital role in our society and new newspapers are being published. This is because our
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people is not yet that much habituated of using internet. So the printed newspapers are very powerful medium of product advertising. This trend will increase in next few years too. But as more and more people get habituated to read online news media, the printed newspapers may experience reduced publicity after five to seven years. So role of the printed newspapers as a medium of communication with the customers will be quite significant in next one decade. Internet: Although growth of eCommerce is slow, the use of internet as an medium to communicate with the target customers is growing rapidly. Our marketers are using local sites like online newspapers (prothom-alo.com, bdnews24.com), blog sites, job portals, classified sites (bikroy.com, cellbazaar.com) along with the popular foreign websites like Facebook, Youtube, Google AdWords, Twitter and other social media. We can easily forecast that this trend will continue to increase in next one decade. Internet bandwidth is becoming cheaper and more people are getting habituated of using internet for various purposes. So use of internet as an medium to disseminate product information to target audience will increase many folds in the coming years. There are some benefits of using internet for communicate of the customers as discussed below: o A big advantage of using internet is that it gives opportunity to get feedback from the customers. o Another advantage is that there are some opportunities to promote products and services for free. Some examples are free classified sites (bikroy.com, cellbazaar.com), Facebook page, Youtube video sharing etc. This is particularly useful for small and local organizations.
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 Telephone: In many developed countries there is an option of toll free phone numbers. When anyone calls a toll free number he will not be charged any bill. This is very popular among the marketers because the potential customers can call a particular toll free number to know more about a product. Unfortunately this option is not still popular in our country. BTTB has introduced the toll free number option few years ago but this didnt get popularity at all. In the future toll free numbers may be widely used by the marketers. Postal service: Postal service is not used that much in our country for sending advertising to potential customers because our postal service charge in flat rate and there is no discount for sending letters in bulk quantity. If our postal service introduce special packages for sending bulk quantities of letters then marketers will find it a viable option and this will increase revenue of our postal service.

Branding: Branding plays vital role in marketing. The influence of branding is increasing. Our local companies are now being more and more aware of branding. So we can expect to see war of brands particularly in the consumer market in the next one decade in our country. Now many companies employ dedicated brand manager and launch special promotional programs just to create positive brand image.

Consumerism:
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Consumers Association of Bangladesh (CAB), a non-govt. non-political and nonprofit voluntary organization was founded in February, 1978 at the initiation of some dedicated residents in Dhaka who were imbued with the ideas of consumerism, a movement that already took shape in many advanced countries in Europe and America. Primarily started as a social group to protect consumers from commodity adulteration and artificial price-hike it has gradually widened its scope to establish and safeguard consumers rights and interests in social, economic, health and environmental issues. CAB was registered with the Department of Social Services, Government of Bangladesh vide reg. No DHA01247 dated 14 March 1983 and with the NGO Affairs Bureau vide reg. No. DSS/FDO/R-197 dated 2 March 1986. CAB is also a full member of Consumers International. It is funded by membership fees and by grants from donors. Major aims & objectives of CAB are as follows: To generate awareness among the consumers about their internationally recognized rights and responsibilities as consumers Promote consumer education aiming at empowering consumers with the knowledge and skills on protection of their rights. To enable consumers to organize themselves in establishing and protecting their rights and interests through organized action. Encourage and help develop consumer associations and consumer activist groups in the districts and at the rural level. Focus on consumer issues and problems and develop contacts and understanding with different groups, associations, institutions, ngos and govt. departments and services in furtherance of the welfare of the general consumers in the country.

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 Arrange for testing of products and commodities to make the market places safer and consumer friendly. Provide mediation and legal support to the aggrieved consumers related to violation of their rights and interests involved in the purchase and use of commodities and services. Undertake research and studies on consumer issues and problems. Exchange information and knowledge of various actions on consumers protection with national and international organizations and agencies To foster and develop contacts and liaison with the national and international organizations having similar objectives. To publish educational materials and feed consumers with information and knowledge on consumerism, consumer issues and problems. Undertake advocacy, representation and lobbying with the policy makers and government for policy changes infavour of consumers protection.

Green Marketing (Sustainability): Green Marketing is integrating business practices and products that are friendly to the environment while also meeting the needs of the consumers. According to the American Marketing Association, green marketing is the marketing of products that are presumed to be environmentally safe. This is also known as: Environmental Marketing (EM), Ecological Marketing, Eco-Marketing or

sustainable marketing. Traditionally the marketers main concern was the maximization of the companys profit. Now the marketers need to consider triple bottom lines: profit, people and planet. The big Bangladeshi companies are
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increasingly being aware of sustainability issues in their business practices. So sustainable marketing practice will increase in our country in the coming years.

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Conclusion: Marketing practices in Bangladesh is still in development stage. In the next one decade we hope to see many new developments and changes in marketing field of our country. As competition is increasing in every sector among the companies due to new entrants, globali ation and other factors the importance of marketing will increase a lot. !very organi ation will have to be more innovative in designing their marketing campaigns to sustain in the competitive market of future Bangladesh. """""""""" x """"""""""""

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