Walton Bangladesh Operation in Nepal PDF

Initiating International Marketing
Operations for Walton Bangladesh in Nepal

Initiating International Marketing Operations for Walton Bangladesh in Nepal
AnInternational Marketing Report on:

Initiating International Marketing Operations for Walton
Bangladesh in Nepal
Course Title: International Marketing

Course No: MKT-4207
Submitted By:
Name of Group Members ID

KHAN TANJEEL AHMED 100322
M. SHAFIQ ZAMAN 100323
RAFID UR RAHMAN 100328
MD. ZAYED IQBAL 100330
ASHFAQUE UDDIN 100333
Submitted to:
S. M. Arifuzzaman
Assistant Professor
Business Administration Discipline

KHULNA UNIVERSITY
BBA Program
4thYear, 2ndTerm
August 21, 2014

Executive Summery
This report is an International Marketing approaches report prevails the initiating

operation of Walton Bangladesh into Federal Democratic Republic of Bangladesh. First
the report focuses on the rational for choosing the country and market where it is seen
several other Bangladeshi companies finding attractive market in other industries.
Electronics is also a very promising and attractive industry in Nepal. The nature of
operation explains the way of production and assembly and the scope of the operation
find out the potential benefit of the business in Nepal. The culture part finds about the
language, traditions, history, festivals, cultural beliefs, and psychological profile of Nepal
consumers. The country festivals are high time for making sales in the electronics
industry. The analysis on customs and duty reveals the tax rates and other government
fees.
The logistics and operations part shows we will export through Banglabandha channel
and our warehousing head office and Plazas. The internal distribution will be outsourced
and Plazas will have the regional office. Competitor Analysis finds out other competitor
products and the market shares. The Indian company Whirlpool is going to be a strong
competitor. Pricing is based on Bangladeshi prices with emendation on price escalation,
tariffs, exchange rate and other factors. The promotion includes sales promotion, direct
selling, advertising, public relations. Promotion also considered B2B segment. The
financial projection is for 3 years where the sales are forecasted based on the market
demand and previous data. The break-even will take slightly more than 2 years. We are
also considering future success in public relation, zero tariffs, CSR and better product
lines. There are also some other long term planning.
This report is a projected for 3 years and some other plans for future. But the company
has to be agile and flexible to cope up with the demand as Electronics industry is a very
rapidly changing one and innovation bring radical changes.
iii
Contents
Executive Summery ................................................................................................................. iii
1.0 Rationale for Choosing Country and Market ...................................................................... 2
2.0 Nature and Scope of Operation: .......................................................................................... 7
3.0 Culture................................................................................................................................. 9
3.1 Cultural History .............................................................................................................. 9
3.2 Elements of Culture ...................................................................................................... 11
3.3 Social institutions .......................................................................................................... 15
4.0 Rules & Regulations ......................................................................................................... 19
4.1 Regulations ................................................................................................................... 19
4.2 Trade Agreement .......................................................................................................... 20
4.3 Custom Duties............................................................................................................... 23
4.4 HS Code for Products ................................................................................................... 24
5.0 Analysis of Target Market ................................................................................................ 26
5.1 Analysis of Target Market Life Style ........................................................................... 26
5.2 VALS Framework ......................................................................................................... 27
5.3 Competitors Analysis .................................................................................................... 30
6.0 Operations ......................................................................................................................... 35
6.1 Headquarter: .................................................................................................................. 35
6.2 Offices ........................................................................................................................... 36
6.3 Reporting Relationships ................................................................................................ 39
6.4 In-house VS outsourced activities ................................................................................ 40
7.0 INT. Product Decision ...................................................................................................... 42
7.1 Analysis of Product Portfolio........................................................................................ 42
7.2 Product Life Cycle (PLC) ............................................................................................. 48
7.3 Potential Demand .......................................................................................................... 51
7.4 Brand Strategy .............................................................................................................. 53
8.0 INT. Distribution Decision ............................................................................................... 55
8.1 Logistics Management .................................................................................................. 55
8.2 Challenges of Logistics Management in Nepal ............................................................ 57
8.3 Distribution Point Number & Location ........................................................................ 60
8.4 Servicing Policy ............................................................................................................ 61
9.0 INT. Price decision ........................................................................................................... 64
iv
9.1 Price escalation ............................................................................................................. 64

9.2 Pricing Strategy............................................................................................................. 65
9.3 Mark Up ........................................................................................................................ 66
9.4 Trader Margins.............................................................................................................. 66
9.5 Pricing of the Product ................................................................................................... 66
10.0 INT. Promotion Decision ................................................................................................ 70
10.1 Agency & In-house collaboration ............................................................................... 70
10.2 Int. IMC (Promotion) Tools ........................................................................................ 70
10.3 Number & Type of Media to Use ............................................................................... 72
10.4 Spokesperson .............................................................................................................. 74
10.5 Translation .................................................................................................................. 74
11.0 Financial Projection ........................................................................................................ 76
12.0 Market Strategy for Growth and Success ....................................................................... 79
13.0 References ....................................................................................................................... 81
v
1.0 RATIONALE FOR CHOOSING

COUNTRY AND MARKET
SECTOR 314 1
1.0 Rationale for Choosing Country and Market
While choosing Nepal for the international marketing operation of Walton Bangladesh
Ltd., we put high emphasize on the political relation between these two countries.
Although there have been several political ups and downs in the history of Nepal but now
Nepal came into a stage of political stability. That stability made the political relation
even stronger. As a result Nepal is going to give duty-free access to 74 Bangladeshi
products in response of Bangladeshi government gesture of giving duty-free access of 108
Nepali items. This good news was delivered by Bangladesh embassy in Nepal. The 1st
secretary of Bangladesh embassy in Nepal also added, “Agro-processes food items
being produced by Pran Company and refrigerator and other electronic home
appliances manufactured by Walton Bangladesh Ltd. are among the items in the
zero tariff list from Bangladesh side”. Bangladesh is already Nepal’s largest trading
partner in south Asia and this duty-free agreement will make our position in Nepal’s
market even stronger{1}.
The economy of Nepal matches with the economies where Walton Bangladesh currently
operating. Sudan, Myanmar, Qatar and UAE (already in operation) and they are planning
to enter number of least developing countries like Yemen, Ethiopia, Nigeria and Bhutan.
Nepal is also being considered as least developing countries and thus the entry into Nepal
is well-justified as same goes with other LDC. UNCTAD explains, “When it comes to
profits, the evidence is that the rate of return on FDI in less-developed countries
(LDCs) is often much higher than investment in developed countries, or emerging
economies”.
Though Nepal is a highly potential market yet very few foreign countries are investing in
Nepal. The highest investor in Nepal is India with 46.32%, China 10.46% and US 6.84%
of total investment. Other investor countries include South Korea, Norway, UK and
Canada. Only these major players have invested in Nepal’s market but these investments
are mostly in the power development sector{2}. Their presence in the manufacturing sector
of Nepal is still insignificant. Moreover the huge investment in hydro-electricity and
optical fiber internet connectivity in 75 districts within 2015 will create a booming
demand for electronic appliances and information related gadgets. Nepal government
highly encourages foreign investments in manufacturing sector according to their foreign
investment act.
1.The News Today June 11, 2014 http://www.newstoday.com.bd/index.php?option=details&news_id=2381560&date=2014-06-20

2
2. Doing Business in Nepal http://www.nicci.org/pdf/i-guide/i-guide.pdf
Considering all these economic, political and competitive factors we decided to start
operation in Nepal as an advantage for Walton Bangladesh Ltd. Related all other factors
will be described in more details with the further continuation of the report.
Country Profile{3}
Area: 147,181 sq. km. (56,136 sq. mi.), situated between India in the
South, East and West and China in the North. Land area 43,351 sq
km and water 3,830 sq km.
Location: Latitude: 26◦22’N to 30◦27’ North,
Longitude: 80◦04’E to 88◦12’ East
Length: 885 Km. [East to West]
Width: Non-uniform, Mean width of 193 Km. [North to South]
Altitude: 70 metres to 8,848 metres
Cities: Capital--Kathmandu (3 districts) (pop. 2.2 million est.).
Other cities: Biratnagar, Patan, Pokhara, Birgunj, Dharan, Nepalgunj.

Kathmandu, the capital, is in a valley at 1,310 metres (4,300 ft.)
elevation.
Climate: The Kathmandu valley has a pleasant climate with average summer
and wintertemperatures of 19-27° C and 2-12° C respectively.
Time zone: GMT +5.45 hours
Population: (2011 census) Rural (86%); female (50%); in the southern Terai
region (49%); in the hills (44%); in the mountains (7%). The next
census will be done in 2011.
Ethnic groups: Brahman, Chetri, Newar, Gurung, Magar, Tamang, Rai, Limbu,
Sherpa, Tharu, and others.
Religions: (2001 census) Hinduism (81%), Buddhism (11%), Islam (4%), and
others (4%).
3. Doing Business in Nepal http://www.nicci.org/pdf/i-guide/i-guide.pdf

3
Official language: Nepali. English is widely used in business, higher education and
various professions. Other principal languages: Maithili, Bhojpuri,
Newari, Magar and Hindi are widely understood.
Education: Years compulsory – none, although education is free through

Grade 8. Attendance – primary 84% (86% male, 82% female),
secondary 43.5% (46% male, 41% female).
Literacy: 57% (among youth age 15-24: 85% male, 73% female).
Health : Infant mortality rate (2008 estimate) –41 deaths/1,000 live births.
Life expectancy: 67 years.
Work force: Agriculture 73.9%; non-agriculture 26.1%.
Type: Representative multi-party democracy.
Constitution: Interim constitution promulgated on January 15, 2007. Constituent

Assembly convened in May 2008 to draft a new constitution. In
May 2010, the deadline for the drafting of the constitution was
extended by 1 year.
Executive: President (head of state), Prime Minister (head of government).
Legislative: The Constituent Assembly is a unicameral Parliament, consisting

of 601 members;
Judicial: Supreme Court, 16 appellate courts, 75 district courts.
Sub-divisions: 5 development regions, 14 zones, and 75 districts. 75 district

development committees, 58 municipalities, 3,913 village
development committees, and 36,023 ward committees.
Economy{4}
GDP: $47 billion (2014est.) [1]
GDP growth: 5.1% (2014est.)
GDP per capita: $1,600 (2014 est.)
4. http://en.wikipedia.org/wiki/Economy_of_Nepal 4
GDP by sector: Agriculture (35%), industry (20%), services (45%) (2010 est.)
Inflation (CPI): 8.6% (September 2013 est.), 10.6% (October 2011 est. source:
myrepublica.com)
Population below poverty line: 24.7% (2008 est.)
Main industries: Tourism, garment, food and beverages, metal manufactures herbs.
5
2.0 NATURE AND SCOPE OF OPERATION
6
2.0 Nature and Scope of Operation:
The operation of Walton Bangladesh ltd. in Nepal is focused on not only doing business
and making profit but also changing the lifestyle of the people of Nepal. As Nepal is a
least developing country, we have plenty of opportunity to implement our goal. The
products and service we are going to offer in Nepal is targeted to enrich their lifestyle at
an affordable cost and ensuring the International standard quality.
We are going to offer a wide range of our product category which suits the earnings,
culture and lifestyle of Nepalese people. Such as we are offering both smart phones and
featured phones following a demand of 70% of Nepalese people who are connected with
the telecommunication. Moreover our home appliance section will be offered keeping in
mind the demographics, household nature and power and fuel scarcity. Also the
household appliances will be designed and marketed considering the customs, culture and
beliefs of the market.
We are targeting both the business to business (B2B) and business to consumer (B2C)
segment. All our products are targeted to B2C segment and for B2B segment we are
offering different models of television, motorcycle and some products of home
appliances. We will capitalize on the demand of tourism business firms and multinational
business firms as our B2B clients.
In Nepal we will operate as wholly owned subsidiaries and some product categories will
be locally assembled and some will be directly exported from Bangladesh. Our whole
distribution channel is divided into two major categories; urban and rural areas. In urban
areas the sales will be coordinated by Walton plaza and in rural areas the distributions
will be done by local distributors. Our distributors will take our products from our main
warehouse at Panauti. As we are not accustomed with the infrastructure and geography of
rural areas, we chose the local distributors. While taking the decision we considered the
effect of personal relation in the trade in Nepal and the tendency of Nepalese people to
favor the local faces during transaction. To maintain good control over the local
distribution, we will employ territory managers in different areas of Nepal. Also
considering this factor we will employ local talents in our management trainee posts to
have a good overview and know-how about the Nepal market.
7
3.0 CULTURE
8
3.0 Culture
3.1 Cultural History
Geography{5}
Nepal is a rectangular shaped

country with an area of 147181
square miles. South, east and west is
bordered by Indian states and to the
north is Tibet. Himalayan mountains
are homed in Nepal including Mount
Everest. The country is divided into
three horizontal zones; the high
mountains, the lush central hills, and the flat arid terai region in the south. The mountains
are from north to south curving deep valleys and steep ridges. The topography has created
different ecological and climatic niches and different ethnic groups had adapted this
change. This geography has also created diversities in language and cultural practices.
The country currently has 36 ethnic groups and fifty languages.
History{6}
Ancient Nepal
Archaeological evidence shows that Neolithic humans moved into the Himalayas at least
9,000 years ago. The first written records date back to the Kirati people, who lived in
eastern Nepal, and the Newars of the Kathmandu Valley. Stories of their exploits begin
around 800 B.C. Both Brahmanic Hindu and Buddhist legends relate the tales of ancient
rulers from Nepal. These Tibeto-Burmese peoples feature prominently in ancient Indian
classics, suggesting that close ties bound the region almost 3,000 years ago. A pivotal
moment in Nepal's history was the birth of Buddhism. Prince Siddharta Gautama (563-
483 B.C.), of Lumbini, forswore his royal life and devoted himself to spirituality. He
became known as the Buddha, or "the enlightened one."
5.Every culture- Nepal http://www.everyculture.com/Ma-Ni/Nepal.html 9

6. Asian History, Nepal http://asianhistory.about.com/od/nepal/p/nepalprofile.htm
Medieval Nepal
In the 4th or 5th century A.D., the Licchavi dynasty moved into Nepal from the Indian
plain. Under the Licchavis, Nepal's trade ties with Tibet and China expanded, leading to a
cultural and intellectual renaissance.
The Malla dynasty, which ruled from the 10th to 18th centuries, imposed a uniform
Hindu legal and social code on Nepal. Under the pressure of inheritance fights and
Muslim invasions from northern India, the Malla were weakened by the early 18th
century. The Gurkhas, led by the Shah dynasty, soon challenged the Mallas. In 1769,
Prithvi Narayan Shah defeated the Mallas and conquered Kathmandu.
Modern Nepal
The Shah dynasty proved weak. Several of the kings were children when they took
power, so noble families vied to be the power behind the throne. In fact, the Thapa family
controlled Nepal 1806-37, while the Ranas took power 1846-1951.
Democratic Reforms
In 1950, the push for democratic reforms began. A new constitution was finally ratified in
1959, and a national assembly elected. In 1962, though, King Mahendra (r. 1955-72)
disbanded the Congress and jailed most of the government. He promulgated a new
constitution, which returned most of the power to him. In 1972, Mahendra's son Birendra
succeeded him. Birendra introduced limited democratization again in 1980, but public
protests and strikes for further reform rocked the nation in 1990, resulting in the creation
of a multiparty parliamentary monarchy. A Maoist insurgence began in 1996, ending with
a communist victory in 2007. Meanwhile, in 2001, the Crown Prince massacred King
Birendra and the royal family, bringing the unpopular Gyanendra to the throne.
Political Economy
From the beginning shah dynasty ruled the country and after that Rana dynasty took the
throne. In 1990, the general people of Nepal started their struggle to establish a
democratic reform with a series of popular demonstrations. It forced the king to abolish
Panchayet system and institute a multiparty democracy. The country is divided
administratively into fourteen zones and seventy-five districts. Local and district-level
administers answer to national ministries that are guided by policies set by a bicameral
10
legislature made up of a House of Representatives and a National Council. The majority

party in the House of Representatives appoints the prime minister. The executive branch
consists of the king and the Council of Ministers.
The country is indulged in huge corruption. The government officials hugely depend on
the income from corruption. Employment in government is also achieved through
nepotism. The authority of the king is ambivalence though the general people perceived
the king as a symbol of God.
International attention has focused on the plight of girls who have been lured or abducted
from villages to work as prostitutes in Indian cities and child laborers in carpet factories.
Prostitution has increased the spread of AIDS. Foreign boycotts of Nepali carpets have
helped curb the use of child labor but have not addressed the larger social problems that
force children to become family wage earners.
Technology
As Nepal is a least developed country, the development in technology is in its early stage.
The government is working on automation and embedding technology in normal lifestyle.
Telecommunication is expanding and dependence on home appliances is increasing day
by day. The transportation of general people hugely depends on motorbikes. Electricity is
major concern in urban areas of Nepal.
3.2 Elements of Culture
Cultural Values
Cultural values are measured in the model of Geert Hofsteed[7] where the values are
determined in the 4 dimension
Power distance index: The score of Nepal is slightly higher than 65 and it means Nepal
is a hierarchical society. The people are accepting a position in hierarchical order and it
needs no further justification. Hierarchy in an organization is seen as reflecting inherent
inequalities, centralization is popular, subordinates expect to be told what to do and the
ideal boss is a benevolent autocrat.
Individualism index: Nepal has a low score of 30 and it means that the society of Nepal
is considered as collective society. There is an evident long term commitment to member
7. Geert Hofsteed Model Nepal http://geert-hofstede.com/nepal.html

11
group; family, extended family or extended relationships. Loyalty is very important and
overrules most other rules and regulations. The society encourages people to build up
relationships where people take responsibilities of their fellow group members. In
collectivist societies: offence leads to shame and the loss of face, employer/employee
relationships are perceived in moral terms (like a family link), hiring and promotion
decisions take account of the employee’s in-group and management is the management of
groups.
Masculinity index: Nepal with a score of 40, considered as a feminine society. So the
focus is on “working in order to live.” Manager focus for consensus, people value
equality, solidarity, and quality in their working lives. People solve conflicts through
compromise and negotiation. Free time and flexibility is favored in work environment.
Status of people is not important but well-being is.
Uncertainty avoidance index: The relatively low score of 40 indicates that Nepal has a
high preference for avoiding uncertainty. Countries exhibiting high uncertainty avoidance
maintain rigid codes of belief and behavior and are intolerant of unorthodox behavior and
ideas. In these cultures there is an emotional need for rules, time is money, people have
an inner urge to be busy and work hard, precision and punctuality are the norm,
innovation may be resisted and security is an important element in individual motivation.
Nepal Greet hofsteed

70
60
50
40
30 Nepal
20
10
0
Power Distance Indivisualism Masculinity Uncertainity
Avoidence
12
Rituals[8]
The important and amazing rituals of

Nepal are KumariPratha, Chaupadipratha,
deukipratha, Badipratha, polyandry
marriage system. Nepal is one of the
unique countries where traditional rituals
are still widely maintained. It can be
called a museum of different live
practices which are still strange and
surprising to outer world. People of different tribe live here in Nepal and follow different
rituals. Nepali society is mixed society made by interaction of people from Indian origin
and Tibetan origin since ages. Local People in Kathmandu are newer people who have
different rituals. It is sometimes said that the people of Kathmandu celebrate festivals all-
round the year. Here the rituals are based on folk lore, myths, spiritual practices and
religion.
Symbols
The culture has many symbols from Hindu and Buddhist sources. Auspicious signs,
including the ancient Hindu swastika and Shiva's trident, decorate buses, trucks, and
walls. Other significant symbols are the emblems (tree, plow, and sun) used to designate
political parties.
Prominent among symbols for the nation as a whole are the national flower and bird, the
rhododendron and danfe; the flag; the plumed crown worn by the kings; and the crossed
kukhris (curved knives) of the Gurkhas, mercenary regiments that have fought for the
British Army in a number of wars. Images of the current monarch and the royal family
are displayed in many homes and places of business. In nationalistic rhetoric the
metaphor of a garden with many different kinds of flowers is used to symbolize national
unity amid cultural diversity.
Languages: According to 2011 census report of Nepal, 123 languages are spoken in
Nepal. Nepal languages have evolved from three major language groups; Indo-Aryan,
Tibeto-Burman and indigenous. Major languages are Nepali, Maithili, Bhojpuri, Tharu,
Tamang, Nepali Bhasha, Magar and Bajjika.
8. Volunteer Summer Nepal http://volunteersummernepal.org/ritual-of-nepal 13

Nepali is the official language of Nepal. It also serves as a lingua franca among Nepal
ethno-linguistic groups. The second language is Nepal.
Arts and architecture[9]: Nepalese traditional arts and architectures are totally dominant
of Hindu and Buddhist religion philosophy which are reflected by various kind of
painting images, statue sculpture of deities, temples, monasteries, old squares and other
monuments. In general traditional arts and architectures can be remarked as a fusion of
both Hindu and Buddhist religion in Nepal. Especially Kathmandu valley’s squares,
monasteries, surrounding areas’ various pilgrimage places, Lumbini, Janakpur and, world
heritage spots are main evidences of Nepalese traditional arts and architectures. There are
also several authentic and traditionally unique arts and crafts are produced commercially.
Dance and Music[10]: Different legends

state that, Dance patterns in the Indian Sub-
continent are originated in the abode of
Lord Shiva, who performed the Tendava
dance. This means that dance traditions in
the Nepal is very ancient, with slightly
changed in style and costume according to
the attitude and costume. The Dishka, a dance performed at weddings, includes intricate
footwork and arm movements. Accompanying music and musical instruments change in
tune with the themes, which revolve around topics like harvesting of crops, marriage rites,
war stories, a lonely girl’s yearning for her love, and several other themes and stories
from everyday life in the villages.
Beliefs
Religion in Nepal is not only a system of social coherence based on certain rituals and
beliefs; rather it is the binding force that ties the mountain kingdom together. Though
Nepal is famous, as the world’s only Hindu Kingdom, equal respect is given to other
religions as well. Buddhism is the second largest religion followed in Nepal, others being
Tantrism, Islam and Christianity. Traditionally, Nepal’s philosophical thoughts are
generated from Hindu and Buddhist philosophical ethics and traditions. This includes
Kashmir Shaivism, Tibetan Buddhism, works of karmacharyas of Bhaktpur, and Tantric
traditions. Tnatrictradistions include animal sacrifices except cow which is sacred and
never acceptable for sacrifices.
9. Heritage of Neal http://www.nepallink.com/nepal/arts-architecture.html 14

10. Wikipedia http://en.wikipedia.org/wiki/Culture_of_Nepal
Festivals and Celebrations
Several of the festivals of Nepal last from one to several days. Dashain is the longest and
the most important festival of Nepal. Generally Dashain falls in late September to mid-
October, right after the end of the monsoon season. It is "a day of Victory over Demons".
The Newars celebrate the festival as Mohani. Tihar or Swanti is another important festival
of Nepal. New Year's Day of the lunar calendar Nepal Sambat occurs at this time.
Other important festivals

include Buddha Jayanti (the
celebration of the birth of
Buddha), MahaShivaratri (a
festival of Lord Shiva), and
during MahaShivaratri
festivities, some people
consume excessive drinks and
smoke charas. Sherpas,
mostly located at higher
altitudes and in the Mount Everest region, celebrate Mani Rimdu, for the good of the
world. Most festivals include dancing and music, as well as all kinds of local delicacies.
A variety of foods are consumed during festivals and on special occasions. If one has to
taste Nepali food, Newa cuisine is a must have; a festive meal, like one served during a
marriage, is a real treat, and include vegetarian and non-vegetarian dishes. The Sagan
ceremony is the ritualized presentation of five food items (boiled egg, smoked fish, meat,
lentil cake and rice wine) to a person which is done to bring good fortune as per Tantric
tradition.
3.3 Social institutions
Family[11]
Different tribes have different family structure in Nepal. In rural areas, joint family is
seen where in the urban areas economic development has created so many nuclear
families. Different tribes maintain different rules for family planning.
11. Nepal living standard survey http://cbs.gov.np/wp-content/uploads/2012/02/Statistical_Report_Vol1.pdf 15

Household size is the number of members in a household. The average household size in
the country is 4.9. In other words, a household contains about 5 persons on the
average.Roughly 14 percent of the households have one or two persons only. Slightly
more than one third (35 percent) of the households in the country contain 3-4 persons,
another 32 percent contain 5-6 persons.
Religion[12]
According to the 2011 census, 81.3% of the Nepalese population was Hindu, 9.0% was
Buddhist, 4.4% was Muslim, 3.0% was Kirant/Yumaist, 1.42% was Christian, and 0.9%
follows other religions or no religion.
The geographical distribution of religious groups in the early 1990s revealed a

preponderance of Hindus, accounting for at least 87 percent of the population in every
region. The largest concentrations of Buddhists were found in the eastern hills, the
Kathmandu Valley, and the central Tarai; in each area about 10 percent of the people
were Buddhist. Buddhism was more common among the Newar and Tibeto-Nepalese
groups. Among the Tibeto-Nepalese, those most influenced by Hinduism were the Magar,
Sunwar, and Rai peoples. Hindu influence was less prominent among the Gurung, Limbu,
Bhote, Tamang and Thakali groups, who continued to employ Buddhist monks for their
religious ceremonies. Since both Hinduism as well as Buddhism areDharmic religions,
they usually accept each other's practices and many people practice a combination of
both.
Education[13]
Education of Nepal from the very beginning was based on home schooling and gurukula.
The first schools were only for the elites but after the birth of democracy in 1951, school
was open to diverse people. According to the date of 2011 census, Nepal has more than
49000 of schools. The literacy rate is 67.9% where male is 75.1% and female is 57.4%.
The Nepalese people more adopted to English language than they are before 2000.
Media[14]
Radio is very famous in Nepal. From the very beginning in the mountain are and in to the
distant land radio is sometimes the only source of entertainment. Television in Nepal
started with Nepal Television in January 1985. It was launched as a project under the
12. Wikipedia http://en.wikipedia.org/wiki/Religion_in_Nepal 16

13. Wikipedia http://en.wikipedia.org/wiki/Education_in_Nepal
14. Wikipedia http://en.wikipedia.org/wiki/Media_of_Nepal
sixth development plan (1980-1985) with the slogan "Communication for Development".
It was set up with a broad mission statement, "Produce and telecast programs on
educational, religious and cultural conservation to promote national unity, conserve
heritage and promote national interest". It was part of a research project to study the
feasibility of establishing television to ascertain if this was economically and technically
possible. It had a monopoly for over 15 years.
After 27 years Nepal has sixteen television broadcasters including the government run
Nepal Television and NTV PLUS. The private broadcasters are: Kantipur Television
owned by Kantipur Publication which is located at Tinkune, Kathmandu; Image Channel
owned by Image Groups of Companies is situated at Lazimpat, Kathmandu; Avenues
Television, a news and current affairs channel located at Tripureswor, Kathmandu, which
is owned by Avenues Ad started broadcasting from July 2007.After Avenues Television,
more news Channels were launched, Sagarmatha Television, was launched in July 2007
and is situated at Singhadurbar, Kathmandu.ABC TV Nepal and National TV were
launched in 2008, News 24, Himalaya Television and Mountain Television were
launched in 2010.Entertainment Channels started popping in 2009 with TV Filmy, with
E-24 Television launching soon in 2012.Regional Channels like
TeraiTelevisionNepalMandal and Makalu Television started coming from 2010.Mission
Star was launched recently.Nepal 1 is beamed from India. Channel Nepal which was
located in Shantinagar, Kathmandu was the first Nepali language satellite channel, which
discontinued in 2011.
Government[15]
Government created a huge impact on the social life of Nepal. From the very beginning
government tried to ban the different rituals which are considered inhuman. Nepalese
government empowered the women vastly in the last century. The democracy has opened
huge possibility for education where education was restricted for elites in the past times.
Government is also working in the infrastructure development and welcoming FDI.
15. Nepal Government- Portal http://www.nepal.gov.np/portal/npgea/home?l=en&rn=1408375109434 17

4.0 Rules & Regulations
18
4.0 Rules & Regulations
4.1 Regulations [16]
Import tariffs are generally assessed on an ad valorem basis. Nepal uses the Harmonized
Tariff System (HTS) for classification purposes. Custom duties are generally assessed on
the cost, insurance, and freight (CIF) value. Imported goods are also liable for a value-
added Tax (VAT) of 13 percent and a local development tax of 1.5 percent, both of which
are levied on CIF plus customs duty value.
Special Duty Reductions of 5 or 10 percent have been given to imports from the Tibet
Autonomous Region of the People's Republic of China, member countries of the South
Asian Association for Regional Cooperation (SAARC), and designated most-favored
nations.
Trade Barriers
There are no major non-tariff trade barriers on imports. Technical standard barriers are
applied to a very small number of manufactured products, such as vehicles and
refrigerators. Vehicles imported into Nepal must qualify under the Euro I standard, and
refrigerators must be chlorofluorocarbon (CFC) gas-free. Nepal also does not allow the
import of used items, which is often interpreted as refurbished products even though they
may be new.
Import Requirements and Documentation
Imports do not require a license except for banned or quantitatively restricted items, such
as (a) products injurious to health, including illicit drugs (b) arms and ammunition,
explosive materials, or products required for production of explosive materials, and guns
and bullets; (c) communications equipment, wireless walkie-talkies and other similar
audio-communication equipment, except under government import license; (d) valuable
metals and jewelry; and (e) beef and beef products The government of Nepal does not
require open general licenses for imports.
16. Rules and Regulation http://nepal.smetoolkit.org/nepal/en/content/en/1676/A-Guide-on-Import-Procedure-and-Documentation 19

Traders need to show their general export/import permits and taxpayer’s certificate to
import goods in order to obtain both foreign currency approval from Nepal Rastra Bank
(Nepal's central bank) and customs clearance of the consignment.
Nepali law requires no special labeling or marking. For customs purposes, the packaging
and labels of a shipment should clearly identify country of origin and destination and
include a commercial invoice with a list of items in the package, a customs declaration
form (CDF), and a certificate of origin.
4.2 Trade Agreement
Multilateral:
Nepal has ratified the South Asian Association for Regional Cooperation (SAARC)
Agreement on a South Asian Free Trade Area (SAFTA). Signed at the 12th SAARC
summit held in January 2004, the SAFTA agreement came into effect in January 2006
and subsumed the ongoing trade liberalization process under the South Asian Preferential
Trade Agreement. Under SAFTA, the eight SAARC nations (Nepal, Bhutan, India,
Bangladesh, Pakistan, Sri Lanka, Maldives, and the Afghanistan) have pledged to cut
tariff rates on a product-by-product basis. Following the third round of trade negotiations,
more than 5,000 items are now entitled to preferential duty treatment in one or another of
the participating countries.
Bilateral:
Nepal has signed bilateral trade treaties with 17 countries including the United States,
United Kingdom, Yugoslavia, India, Russia, South Korea, North Korea, Egypt,
Bangladesh, Sri Lanka, Bulgaria, China, Czech Republic, Pakistan, Romania, Mongolia,
and Poland. The treaty signed with India in 1996, and amended in 2009, is the most
important in terms of trade volume and relationship. Except for some items under
quantitative restrictions, the trade treaty puts Nepal in a unilateral duty-free trade regime
with India, which accounted for more than 66 percent of total Nepal’s trade in FY
2010/11.
20
Import Procedures and Documentation
In order to import products from third world country Nepal follows the Foreign Exchange
(Regulation) Act 196 and directives issued from time to time by NRB. This liberalized
policy allows Nepal to open imports without license. To import from third world country
there are some steps to follow-
Step-1 At first the importer needs to open an Letter of Credit (L/C) account and release
the payments for imports accordingly.
Step- 2 It is essential that the commercial bank with which the L/C account has been
opened needs to sanction total amount of credit limit to the importer.
Step- 3 The importer needs to fill the foreign exchange form including the name of the
nominated overseas exporter. Then the form is submitted with the undertaking of the
importer indemnifying the bank against liabilities.
Step- 4 After the submission of foreign exchange form the importer needs to deposit an
amount raging from 10 to 100 percent of the L/C value in the bank.
Step- 5 The exporter is fully pain under the ‘Sight L/C’ amendment by the corresponding
bank at the time of submission of shipment documents.
Step- 6The bank makes necessary arrangements regarding the point of entry in Nepal.
Step- 7After the goods are received by the importer with perfect documentation with the
corresponding banks, the importer confirms the shipment without any discrepancies.
Entry to Nepal
Step- 1 After the goods arrival in Indian border from Bangladesh the importer of the
authorized CA presents the original CTD and then the customs officer examines the
consignment and if everything is alright then the officer permits the onward
transportation.
Step- 2The Indian customs officer will provide necessary escort according to the Transit
Treaty to ensure the goods cross the border and reach Nepal.
21
Step- 3 After the customs valuation of the goods it provides a basis for declaration of the
value by the importer. The customs assess the value based on the declaration of the
transaction prices by the exporter.
Step- 4 After reaching to the Nepal border the importer or CA goes to Nepalese customs
with following documents-
 Nepal Customs import declaration (white color),

 Letter of authority of the clearing agent to act on behalf of the importer,
 Bill of lading,
 Invoice,
 Packing list,
 Certificate of origin (this is not strictly required except where imported goods are
subject to a special tariff concession on account of their place of SAPTA- member
countries and MFN rates for countries having bilateral agreements with Nepal),
 Certificate of insurance,
 Original CTD,
 BBN 4 form issued by bank,
 Certified copy of L/C,
 Enterprise registration certificate,
 VAT registration certificate/PAN,
 Income tax registration certificate/PAN.
Step- 5 The customs then verifies the documents issued by the commercial banks.
Step- 6 After checking the proper documentation the customs then assess the applicable
duty and VAT before releasing the shipment.
22
4.3 Custom Duties [17]
The duties charging under each product category is given below-
Description of Products Import Duty (%)

SAARC General
Electric Motors and Generators
Electric motors and generators of an output 9.25 15
exceeding 750 W but not exceeding 75 kW
Electro-mechanical domestic appliances
Food grinders and mixers; fruit or vegetable 9.25 15
juice Extractors
Other appliances 9.25 15
Parts 9.25 15
Microwave oven 9.25 15
Other ovens; cookers, cooking plates, boiling 9.25 15
rings
Grillers and roasters 9.25 15
Wireless Communication
Telephones for cellular networks or for other Free Free
wireless
networks
Television and Monitors
Cathode-ray tube monitors Free Free
Others 30 30
Motor Vehicles
Motorcycles with reciprocating internal 30 30
combustion piston engine of a
cylinder capacity exceeding 50 cc but not
exceeding 250
cc
Saddles 15 15
Frames and forks, and parts 5 5
and parts
Wheel rims and spokes 5 5
Hubs, other than coaster braking hubs and hub 5 5
brakes
Brakes, including coaster braking hubs and hub 5 5
brakes
Pedals and crank-gear, and parts 5 5
17. Custom Duties http://www.wcoomd.org/en/faq/~/~/media/B7BC612CEB3B417BB5183841DA7413CB.ashx 23

4.4 HS Code for Products
Product Description HS Code for

Product
Motorcycles Engine capacity: 81-125cc 871120
Motorcycles engine capacity: 126-250 871120
Refrigerators of Household Type, Compression-type 841821
Other Refrigerators of Household Type 841829
Electric motors and generators of an output exceeding 750 W but 850163
not exceeding 75 kW
Parts, of Motors, of Generators, of Generating Sets, of Rotary 850300
Converters
Color Television 852810
24
5.0 ANALYSIS OF TARGET MARKET
25
5.0 Analysis of Target Market
5.1 Analysis of Target Market Life Style
Identifying Target Market
The target market of Walton in Nepal is the people who have demand in any electronic
and home appliances product. The customers will be both business and home users. Our
different product has demand for different consumers. As Walton is a reasonably priced
product, the mid-level income people will create the most demand for the product.
Our target customers are
 Housewives – who will be have demand on the home appliances.

 Teenagers – who will have demand on our smartphones.
 Family people – who will have demand on our Refrigerators and TV
 Business Users – Who will have demand on our A/Cs.
 Around all people will have demand on our Bikes for transportation
Demography[18]
The total Population of Nepal is 29,890,686 (July 2012 est.) 18% Urban, 82% Rural
(World Bank)
10-14 years age group has the highest proportion of population (14 percent) followed by
5-9 year’s age group (13 percent) (Table 2.1). Among broader age groups, on the other
hand, 54.2 percent of population is in 15-59 years age group, 36.7 percent below 15 years
of age and 9.1 percent is in the age group 60 years and above.
Household size is the number of members in a household. The average household size in
the country is 4.9. In other words, a household contains about 5 persons on the
average.Roughly 14 percent of the households have one or two persons only. Slightly
more than one third (35 percent) of the households in the country contain 3-4 persons,
another 32 percent contain 5-6 persons. Around 90 percent of the households reside in
18. Nepal living standard survey http://cbs.gov.np/wp-content/uploads/2012/02/Statistical_Report_Vol1.pdf 26

their own housing units, 8 percent are renters (pay rent) and 2 percent live on rent-free
housing.
Psychographic
The general people of Nepal are adapting western culture more and more. Indian movies
have a huge demand in Nepal. Moreover Nepal has 18 media channels. The people
generally like to watch TV as their past time. The transportation of Nepal heavily depends
on Motor-Cycles. People like two wheelers for their daily transportation. Water and water
purification is a big problem in Nepal. Electricity is also not up to the demand. The
teenagers are demanding more and more use of smartphone as it is becoming the part of
lifestyle. Tourism sector is the primary income sector of Nepal.
Behavioral
The behavioral aspects Nepalese people are following
 Nepalese people are hardworking especially people reside in mountainside.

 They tend to prefer motor bike for their day-to-day journey.
 Smartphone are getting in their lifestyle.
 Water problem is pursuing them to reserve water.
 They focus on the tourism business and the demands of foreigners.
The Nepalese are friendly and hard working. They don’t like to be cheated. They will
trust people whole heartedly until they are being cheated. If once they are cheated, they
will not do the same mistake again.
5.2 VALS Framework
To know about the customer’s attributes and their reactions toward different product
offerings affecting their purchasing decisions and response to the promotional activities
psychographic segmentation is essential to do. For analyzing the psychographic attributes
of Nepal market we are following the VALS (Value Attitude Lifestyle) market
segmentation which will guide us to tailor our products and services. It will help us to
attract our target consumers more effectively.
27
We have analyzed the nine segments of VALS framework which is explained in details
below:
Innovator: These consumers have the highest income and high level of self-esteem. They
are highly focused on their independence, taste and character. As Nepal is a least
developing country, this innovator segmented customers are very few in numbers. The
largely reside in three major cities of Nepal; Kathmandu, Pokhara and Nagorpot. We will
offer our flagship products for this segment and these products will be available only in
the Walton plazas. As we are not introducing all our flagship products in Nepal
considering the overall economic condition, we will take orders from our entire portfolio.
Thinkers: Highly resource group and ideally motivated Nepalese people fall in this
segment. Mainly the people of this segment are professionals and mature. Although they
are solvent and possess high resource, they will not spend a single penny without rational
reasoning. This group does their research and knows about specifications of products
before making any buying decision. They reside in the big cities but not limited to the
three major cities. To attract these customers we will assign more knowledgeable and
experienced sales persons provide warranty facility to gain reliability. Our middle price
ranged mobile phones, motorbikes and home appliances is focused on this segment.
Believers: This customer group is motivated by ideas but have very low resource. They
are conservative about their customs, culture and religion. They prefer local brands over
foreign ones and they tend to spend money during cultural festivals and occasions. So the
adaptation of our product and promotional activities, following the local culture and
customs are very important. We will maintain a balanced supply of products to fulfill the
seasonal demand during festivals. We will use Nepalese language in advertisement to
capitalize on their idealistic and community sense.
Achievers: This consumer group is highly motivated by their achievements. They are
highly style conscious and prefer to buy new, diversified products and established brands.
They are professionals with a tendency to show off and keep up-to-date information. In
Nepal this segment resides in the urban areas and possesses middle aged people. We will
offer the high priced categories of mobile phones, motorbikes and provide accessories
that will attract this portion of the market.
28
Strivers: This consumer section is highly style conscious but possesses low resources and
earning. This particular segment in Nepal wants to buy high tech products but their
budget does not allow them to buy. This segment wants value for money. Walton product
range from home appliances to Smart phones are affordable and provide a good value to
the customers. This product range will attract the strivers group. Affordable two wheeler
vehicles are also a prime attraction for them. They are not the bottom of the pyramid but
they have budget constraints, Walton will try solve their problem by providing good
products which suits their budgets.
Experience Consumers: This is the youngest segment of all the consumer groups above
aged around 25. They possess high resources and spend a lot of money on technology,
accessories and style. They have a high preference on the brand image and innovations. In
Nepal this group of people lives in the urban areas and can afford high priced products.
We will introduce Walpad, Smart TV, 138cc motorbike and flagship mobile phones with
latest design and technology. The number of people from this section is not large in
number but their preferences can be shifted with design and technology.
Makers: These consumers are very practical in nature and are normally doesn’t earn a
lot. They only demand reliability, after sale service and durability of products. They have
little know-how about innovations, foreign products or other happenings in the outside
world. People from rural areas of Nepal fall in this group. They are large in number and
prefer cost efficient products with longer durability. We will be offering fuel efficient
motorbikes to solve their transportation problem, low priced mobile phone with longer
battery life, small televisions and fuel generators. Our budget oriented home appliances
are also focused on them.
Survivors: These customers are the eldest people of all aged over 61 years. Their
earnings are the lowest and they tend to be brand loyal. Convincing them about new
products, brand is very difficult and they are unlikely to change. We are normally not
targeting this segment as the number of these people is not high in Nepal and we are a
new brand in Nepal. Still the low priced mobile phones and radio can attract this segment
after a few years of operation. After the establishment of the brand in Nepal we can focus
on this segment.
29
5.3 Competitors Analysis
Motorcycle:
Brand name Market Pricing strategy

share
Motorcycle (150 CC segment)
Bajaj 53.41% High-Low Pricing
Yamaha 13.27% Skimming pricing
Honda 11.91% Premium pricing
Hero 10.45% Penetration pricing
Bajaj 29.47% High low pricing
Bajaj 14.47% High low pricing
Motorcycle (scooter segment)
Honda 53.17% High low pricing
Mahindra 18.31% Penetration pricing
Market share analysis of motorcycle industry is divided into 4 major categories: 150cc
segment, 125cc segment, 100cc segments, and scooter segment.
150cc motorbike’s customer segment prefers high quality and smooth performance. Here
Bajaj is leading the market with High-low pricing strategy. Bajaj capitalize on the fact of
high selling figures during festival season. The tendency of Nepali customer to react
positively in different discounts and offers worked in the favor of Bajaj. Yamaha is
holding the second position in spite of their high price skimming policy. Yamaha is
targeting premium quality motorbike admirers.
In both 125cc and 100cc segment the penetration pricing is working. Nepalese don’t have
a high budget in general. For this reason they are choosing hero motorbikes in both the
cases for affordable price and high mileage. Hero is leading both 125cc and 100cc
segment by 30.79% and 49.88% respectively. But penetration pricing strategy did not
worked in 150cc segment.
30
In scooter segment Honda is leading the market by 53.17% shares. They are providing
lots of varieties and colors which customers of this section are taking positively. Scooter
segment customers consider safety at first and style in their second priority. For those
reason Honda’shigh low pricing strategy is a success here.
Television:
Brand Market Pricing strategy

name share
LCD/LED
Samsung 36.12% High low pricing
Phillips 23.25% Premium pricing
LG 18.85% Premium pricing
Onida 17.56% Penetration pricing
CRT
Sony 52.14% High low pricing
TCL 27.66% Penetration pricing
Himstar 7.24% Penetration Pricing
Smart TV
Samsung 27.89% High-low pricing
Television market is divided into 3 large segments: LCD/LED, CRT and Smart TV.
In LCD/LED segment Samsung is leading the market with 36.12%. Samsung is providing
wide variety of products .Their warranty and discount offers in different seasons and
festivals are attracting Nepali customers. Philips and LG are just behind Samsung. They
are offering high quality products at premium price. Those customers who prefer quality
over money are buying Philips and LG.
CRT segment customers seek longevity and durability of television. This segment is
brand loyal in nature. Over the year SONY has created a strong image. They are leading
the market by far with 52.14%. but situation have started to change as new generation
customers are getting price sensitive and love to bargain. TCL and Himstar are capturing
this market.
Smart TV customers belong to high society and they prefer the best quality in the market.
LG with their premium pricing is leading the market with 68.14%
31
Refrigerator& Air-conditioner:

share
Whirlpool 36.14% High low pricing
Yasuda 8.11% Penetration pricing
In refrigerator and air conditioner market whirlpool is leading with 36.14% market share.
As most of the refrigerator and air conditioner are bought in festive season the high low
pricing strategy of whirlpool is doing really good in Nepal. Generally the prices of
whirlpool are as same as competitors but they are offering different discounts and offers
in season. The second is LG for their premium products quality. LG products are targeted
toward quality seeking customers
Home appliance:

share
Prestige 63.76% Penetration pricing
Phillips 21.14% Premium pricing
Kenstar 7.12% High low pricing
Glen 4.89% Penetration pricing
In home appliance market Prestige is the winner by a large margin. They capture 63.76 %
of the market. No one is even near prestige. Nepali general customers prefer to save
money in buying home appliances. Penetration pricing strategy is working really well
here
Generator:

share
Kipor 43.64% Penetration pricing
Yamaha 18.72% Premium pricing
Kohler 6.41% Premium pricing
Aggretech 3.68% Penetration pricing
Generator is highly used in rural areas. Rural people use generator as an alternative of
electricity. Rural people in Nepal have budget constrain. Kipor’s generators are fuel
efficient and at an affordable price. Kipor is leading the market with 43.64%. Yamaha,
Kohler is following them respectively
32
Mobile phones:

share
Smart phones
Colors 20.64% Penetration pricing
Nokia 17.05% Premium pricing
Karbon 10.44% Penetration pricing
Micromax 9.25% Market oriented pricing
Sony 5.82% Premium pricing
Lava 5.42% Penetration pricing
Xolo 2.49% Penetration pricing
Lenovo 1.14% Premium pricing
Keypad phones
Nokia 29.76% High low pricing
Lava 18.90% Penetration pricing
Micromax 15.65% Market oriented pricing
I Ball 9.44% Penetration pricing
Smartphones are the most emerging product in Nepal. Nepalese people are using
smartphones as they are highly involved in social networking and turning into
multitasking. Among the overall mobile phone users, about 59% people are using
smartphones while others are using touch phones or keypad phones. Here, Samsung is
obtaining the highest market shares by operating in high low pricing. On the other hand
Colors, an emerging hard competing brand is operating in penetration pricing.
33
6.0 OPERATIONS
34
6.0 Operations
6.1 Headquarter:
The Headquarter of Walton

Nepal will be situated in
Lalitpur. Lalitpur is a city
situated just beside the
capital Kathmadu. Lalitpur is
the perfect place to monitor
the sales of the whole country
and also with a distance of
only 14 minutes from the
capital city.
The Headquarter will consist of the marketing department, finance department, research
department and the operation department. The Manager will be assigned from
Bangladesh. The Country Manager, Head of Marketing, Head of Operation and Head of
Finance will be operating from the Headquarter. Subordinated organizational functions
such as the Research department, Head of Inter-country Distribution, Head of Import and
subordinated departments of Finance will be operated from the Headquarter.
Warehouse:
Walton Nepal will establish a

warehouse in Panauti. The warehouse
will be used to manage the imported
products from the home country. It is
a 35,000 square feet warehouse
consisting three floors, excluding the
ground floor which will be used as
parking area.
35
Panauti is a place not so far from the capital Kathmandu and Lalipur, the Headquarter of
Wallton Nepal. The area has plenty of land to establish a permanent warehousing facility.
6.2 Offices
Office 1: The first office which will be located in Kathmandu will be the hub of central
Nepal. From this office, a Regional Manager will monitor the sales of four different
territories including Pokhara-1, Pokhara-2 Kathmandu-1 and Kathmandu-2. The office
will also consist with the Walton Plaza, Kathmandu and a service center.
Office 2: The second office which will be located in Pokhara will be the hub of West
Nepal. From this office, a Regional Manager will monitor the sales of four different
territories including Dhangadhi, Baliya, Katti, Tulsipur, Ghorahi, Butwal, Siddharthnagar,
Baglung and Lekhnath. The Area Manager of Butwal, Siddharthnagar, Baglung and
Lekhnath will also be operating from this office. The office will also consist with the
Walton Plaza, Pokharaand a service center.
Office 3: The third office which will be located in Nagarkotwill be the hub of East Nepal.
From this office, a Regional Manager will monitor the sales of four different territories
including Nagarkot, Bharatpur, Birganj, Kamalamai, Jaanakpur, Biratnagar, Dhaaran and
Birtamod. The office will also consist with the Walton Plaza, Nagarkotand a service
center.
36
Territory, Area and Region:
Region Area Territory Areas covered

Territory 1 Dhangadhi, Baliya&Katti
Area 1
Territory 2 Tulsipur&Ghorahi
West Nepal
Territory 3 Butwal&Siddharthnagar
Area 2
Territory 4 Baglung&Lekhnath
Territory 5 Pokhara-1
Area 3
Territory 6 Pokhara-2
Center Nepal
Territory 7 Kathmandu-1
Area 4
Territory 8 Kathmandu-2
Territory 9 Nagarkot
Area 5
Territory 10 Bharatpur, Birganj
East Nepal
Territory 11 Kamalamai, Jaanakpur
Area 6
Territory 12 Biratnagar, Dhaaran&Birtamod
West Nepal
Center Nepal
East Nepal
37
Organizational Hierarchy:
Country
Manager
Head of
Head of Head of Head of
Human
Marketing Operation Finance
Resource
Head of
Senior
Head of Head of Inter- Head of HR
Finance
Research Sales country Import Managers
Officers
Distribution
Regional
Brand Channel Channel Finance Manageme
Sales
Managers Managers Managers Analyst nt Trainee
Managers
Junior
Area Manageme
Brand
Managers nt Trainee
Managers
Manageme Territory
nt Trainee Offiicers
38
6.3 Reporting Relationships
Supervision:
Marketing Department:
1. The management trainee of marketing department who is responsible for all kind
of fieldworks on market research will directly report to the junior brand managers.
2. Junior brand managers are responsible for the guidance of MTs and do researches
about the individual brands will directly report to the brand managers.
3. Brand managers will participate in making decisions about the brands with the
head of research and verify all the research works conducted by the research team.
He will directly report to the head of research.
4. Territory officers are responsible for the sales in the territory. They will report
directly to their superior area managers.
5. Area managers are responsible for the sales in their assigned area. They will report
directly to their superior regional managers.
6. Regional managers are responsible for the sales in the region. They will report
directly to the Head of Sales.
7. The head of research and the head of sales will directly report to the Head of
Marketing about the market research conducted and the sales responsibilities
achieved.
Operation Department:
1. The channel managers who are responsible for monitoring the outsourced
distributors will directly report to the head of inter-country distribution.
2. The channel managers who are responsible for monitoring the tasks including
import from the home country will directly report to the head of import.
3. The head of inter-country distribution is responsible for searching and effectively
using the distribution line to provide the products to the consumers efficiently and
he will report directly about his task to the head of operations.
4. The head of importis responsible for import following economic order quantity
from the home country efficiently and he will report directly about his task to the
head of operations.
39
5. The on market distribution will be outsourced to AVCO International Pvt. Ltd.
Finance Department:
1. Management trainee will collect the primary financial data and verify the validity
of those data, operate primary financial tasks and directly report to the financial
analyst.
2. Financial analyst will perform the major financial works and submit those to the
senior financial officer for further verification.
3. Senior financial officer verifies all the financial outcomes and directly report to
the Head of finance.
Human Resource Department:
All the recruitments and the task orientation will be conducted by Pacific Human
Resource, Nepal.
Overall reporting:
Head of Marketing, Head of Finance, Head of Operation and Head of HR will directly
report to the country manager.
6.4 In-house VS outsourced activities
In-house activity is conducting an activity or operation within a company, instead of

relying on outsourcing. A firm uses its own employees and time to keep a division or
business activity, such as financing or brokering, in-house. For Walton Nepal, All the
Marketing, Operation and Financial tasks will be in-house activity.
Outsourcing is an effective cost-saving strategy when used properly. It is sometimes more

affordable to purchase a good from companies with comparative advantages than it is to
produce the good internally. Walton Nepal will outsource all theactivity of Human
Resource tasks to Pacific Human Resource, Nepal; which is the leading HR firm inNepal
Region.
40
7.0 INT. PRODUCT DECISION
41
7.0 INT. Product Decision
7.1 Analysis of Product Portfolio
Products that will go international
Product Category Product Models

Refrigerator & Freezer Refrigerator W2D-1H5 (11.5 CFT)
WCOM12 (12 CFT)
W2D-2B0 (12 CFT)
W500-4DMB (9 CFT)
Air Conditioner Air Conditioner E-70GW-H (2 Ton)
W-50GW-H (1.5 Ton)
Television & Home Smart TV W42E685 (42”)
Entertainment LED Television W28C20 (28”)
WC22D12 (22”)
W19E990 (19”)
W32E68 (32”)
W42E68 (42”)
CRT Television WDF21R (21”)
WPF21T2 (21”)
W1438 (14”)
W1488 (14”)
W14A3 (14”)
Radio Radio Heaven (Pocket Radio)
(Proposed)
Generator Diesel Generator Silent Katrina 5000E (45KW)
Mobile Smart Phone Primo X3 (2450mAh)
Primo ZX (2750mAh)
Primo HM (4200mAh)
Primo RX2 (2200mAh)
Primo V1 (2200mAh)
Primo GH+ (2200mAh)
Primo GH2 (1800mAh)
Primo GH (2200mAh)
Primo S2 (2500mAh)
Primo X1 (2120mAh)
Primo RX (1800mAh)
Primo X2 mini (3120mAh)
Primo GF (1800mAh)
Primo N1 (3000mAh)
Primo G3 (1800mAh)
Primo H1 (2000mAh)
Primo NX (3000mAh)
42
Featured Phone Classic T72 (1200mAh)

Classic T50 (1000mAh)
Classic C31 (1200mAh)
Classic MM50 (2000mAh)
Excel B10 (1200mAh)
Excel L13 (1200mAh)
Walpad Walpad 7 (4200mAh)
Walpad 8b (5200mAh)
Motorcycle Motorcycle Xplore (138cc)
Fusion (125cc)
Prizm (107cc)
Scooty Empower100 (100cc) (Proposed)
Empower80 (80cc) (Proposed)
Home & Kitchen Microwave Oven WG17AL-DI (17 Litres)
Appliances WG20GL (20 Litres)
Blender & Juicer WJB C501
WB C102+
WB OK82
Electric Pressure WP JYS16 (5 Litres)
Cooker
Iron WIR-S01 (Steam Iron)
WIR-S02 (Steam Iron)
WCD-P01 (Cloth Dryer)
Electric Rice Cooker WR XB30 (1.5 Litres)
WR XB40 (1.8 Litres)
WR MB60 (2.5 Litres)
Induction Cooker WI S30
WI S37
Stabilizers & IPS WIP- 400SH & 600SH & 800SH
WIP- 400SS & 600SS & 800SS
Purifier Walton Crystal (Proposed)
In order to go international we have selected a diverse portfolio for our company

according to the market analysis and preference of our target customers. From our broad
product category we have selected few of them initially to enter the market after
analyzing the demand of the target customers and competitor’s analysis. As Nepal does
not approve ISO 9000 series certificates Walton Nepal will standardize all the products
according to the Euro I Standard.
43
The reasoning for selected products to go international is given below:
1. Refrigerator & Freezer: From this product category

Walton Nepal have selected four refrigerator models
ranging from 9 CFT to 12 CFT, because the average
households’ size in Nepal is 605 sq. feet and there is not
enough space for big refrigerator. Walton Nepal is not going
to take freezer international because there is scarcity of
electricity in Nepal and many households might not have
enough space to accommodate freezers in their
home.Walton Nepal will also adapt the design of the
refrigerator according to the Nepal culture.
2. Air Conditioner: From the air conditioner category Walton Nepal has selected
only two models of 2 Ton & 1.5 Ton for commercial and household use. As
electricity is less available in Nepal Walton Nepal will adapt the air conditioner
for energy efficient that consumes less
electricity and also the design of the air
conditioner will be according to the Nepal
culture.
3. Television & Home Entertainment: From this category Walton Nepal will
market four products in Nepal according to analysis of target market preferences.
In the Smart TV category only one television will be marketed in Nepal as the
demand for smart TV is less in Nepal but it will increase as Walton Nepal
continues the operation in Nepal. From
our LED television segment the range
of TV screen is from 19 inch to 32 inch
but Walton Nepal is primarily focusing
on marketing CRT televisions ranging
from14 inch to 21 inch for households
in both city area and rural area. As
there is shortage of space in the
households the consumers will prefer
44
small and economic televisions. Walton Nepal will also market pocket radio in the
market because it is the only source entertain to some of the rural areas. The radio
production is under R&D.
4. Generator: From this product
category Walton Nepal is taking
only Diesel generators to Nepal
because it will be a bit cheaper than
the gasoline generators. As because
the electricity is not available to
some of the areas the people tend
use generators for their temporary
electricity.
5. Mobile: From Mobile category Walton Nepal will take smart phone, walpads and
featured phones for the target market.
Smart phone users are mainly
youngsters and 59% of the people use
smart phones in the city. So there is a
huge scope for Walton Nepal to
market smart phones and walpads in
Nepal. From a wide variety of
mobiles Walton Nepal will market 17
smart phones, 6 featured phones and
2 Walpads to Nepal. As the people of
Nepal are sophisticated they like
stylish covers and accessories for their mobile phones different designs on the
cover that Walton Nepal will provide as options with the phones in the market.
6. Motorcycle: From this segment
Walton Nepal has selected three
models of motorcycles like; Xplore
(138cc), Fusion (125cc) and Prizm
(107cc) for people of both city and
rural areas. As there is a shortage of
transportation mode in two wheelers
45
are attractive with the target market. Walton Nepal needs to make adaptation with
the motorcycles and make them fuel efficient so that rural people can afford to
have a mode of transportation. Walton Nepal will also market Scooty for female
customers which under R&D. As the female customers have become more liberal,
Scooty will be an attractive product for the targeted segment
7. Home & Kitchen Appliance: From this segment there are wide varieties of
products that Walton Nepal is going to take to the Nepal market. Microwave Oven
is an essential home appliance that Nepal customers use to defrost the food items.
As there is shortage of space in the households Walton Nepal is taking only two
microwave ovens of 17 litres and 20 litres and also making them a bit more
energy efficient. Blender & Juicer is another home appliance that has a huge
demand in the commercial hotels for the foreigners and Walton Nepal is taking
three models of blender & juicer to the Nepal Market. Walton Nepal is taking one
model of electric pressure cooker to the market as people of Nepal is living on the
hill tracks it will have a positive demand in the market. Walton Nepal is also
taking electric iron and a cloth dryer that will have a commercial use in the tourist
hotels. Walton Nepal is taking three models of electric rice cooker based on the
price capacity of the customers segment ranging from 1.5 litres to 2.5 litres.
Walton Nepal will market induction cooker to the Nepali market as majority of
people are depend on wood as fuel to cook food that might cause environmental
damage. Walton Nepal will encourage people to use induction cooker so that the
environment can be pollution free. Walton Nepal will provide free stabilizer with
the refrigerator. As there is shortage of electricity in Nepal IPS has a huge market
opportunity there. The IPS will delivered to Nepal will be ranged from 400 VA to
46
800 VA according to the need of the customers. Another important home

appliance that Walton Nepal will market in the market is water purifier which is
under R&D. There is a need for pure water in Nepal, so Walton Nepal has a huge
opportunity in grabbing the market with economic purifier. All the electronic
home appliances will be tailor made energy efficient for Nepal as there is a
shortage of electricity in Nepal.
47
7.2 Product Life Cycle (PLC)
48
49
50
7.3 Potential Demand
1. Refrigerator and Freezer

Refrigerator and Freezer has a huge demand in Nepal market, but because of
shortage of space in households and commercial shops Walton Nepal will take
refrigerators ranging from 9 CFT to 12 CFT in the Nepal market. Walton Nepal is
also taking commercial refrigerators which will occupy minimum space and will
be useful to the customers. The refrigerators of Walton are small and it fits well
the customers demand in Nepal. That is why Walton Nepal feels it will be viable
to take refrigerators to Nepal.
2. Air Conditioner
In Nepal market there is a potential demand for air conditioner, though it is in the
early stages of maturity. As the weather of the Nepal is chilling most of the time.
The air conditioner of Walton Nepal can stabilize the temperature to a soothing
level and it can keep the environment a bit warm. The chilling weather might be
uncomfortable for the tourist and Walton air conditioner can help the consumers
to stay in a comfortable temperature. This is why Walton Nepal is taking two
varieties of air conditioner for both commercial and household use.
3. Television & Home Entertainment

Walton Nepal is marketing four types of televisions and home entertainment in
Nepal. Because there are around 18 Nepali TV stations and a wide variety of
Indian channels that are gaining popularity and people are fascinated to watch TV.
This is a potential market for Walton Nepal. Though different products reside in
four different stages in Nepal market. The Smart TV for instance is in the early
stages of growth in Nepal market. People of Nepal are leaning towards Smart TV,
so the consumers who have the capability will be attracted by Walton Smart TV in
Nepal. The LED TV is also in the growth stage but it is going to the maturity stage
but still LED TV has a huge demand in Nepal. This is why Walton Nepal is taking
a range of LED TV for Nepal market. CRT TV is near to decline stage but it still
did not lose its demand. The rural people of Nepal and people with economic
constraints still prefer CRT for their households and it is also a potential demand
for the Walton Nepal. Last but not the least, few areas in the rural side people only
51
rely on radio entertainment, that is why Walton Nepal is taking pocket radio to
capture that market and it is still in the development section, though the demand
for radio is in the last stage of maturity.
4. Generator
The demand for generator in Nepal is in the early stages of maturity and the
market is saturated. But the Walton Nepal is developing diesel generator that can
give back up electricity more than two hours with just 1 litre of diesel. This
customization will create huge demand for diesel generator in Nepal.
5. Mobile
In mobile segment Walton Nepal will market Smart phones, Tablets and Featured
phone to the customers. The market of smart phone is in the growth stages. The
youngsters of Nepal want smart phone with good battery longevity and Walton
smart phones are designed to serve better battery life. And the weather condition
of Nepal is also suitable for the batteries of the smart phone. About 59% of the
people are now using smart phones and the demand will increase in the future for
both smart phones and Walpads. But still there are 41% people in Nepal are using
featured phones comprising touch screen and keypads. Though it is in the maturity
stage the demand is still higher.
6. Motorcycle
Motorcycles in Nepal are in the maturity stage. People in Nepal depend on two
wheeler mode of transportation and it has a huge demand in Nepal. That is why
Walton Nepal is taking three categories of motorcycles to Nepal ranging from
107cc to 138cc. transportation in rural areas of Nepal is scarce, which is why
Walton Nepal is taking 107cc motorcycles to satisfy their needs in a economic
way. The Scooty industry is in the growth stage of its life cycle and another
potential market for ladies. Though Walton does not produce any Scooty, but it is
under development and will soon to be launched in Nepal for females. As females
in Nepal are more liberalized than before.
7. Home & Kitchen Appliance
The majority of the product in the home appliance category is in the maturity
level; like; Microwave Oven, Electric Pressure Cooker, Iron, Blender & Juicer,
Stabilizer & IPS and Electronic Rice Cooker. Though these products are in the
maturity stage, still poses potential demand as there is an increase in nuclear
families. These families will be the potential customers for these products. As the
52
people of Nepal are getting modernize they are using induction cooker and this
market is in the growth stage, so there is an opportunity to grab this market, and
encourage rural people to avoid wood as fuel for preparing meals that pollutes the
air rather than use induction cooker which is safer for environment. The last
product Walton Nepal will introduce to the market is the water purifier which is
under development and will soon be launched in the Nepal market, because there
is a demand for pure water among the tourist.
7.4 Brand Strategy
Walton is producing multitudes of products that are sold in many countries in the world
and started its global journey to indentify Walton a global brand. Many global companies
follow different strategies in the market, but Walton is following the adaption strategy to
enter in the Nepal market. The varieties of products are being adapted according to the
Nepal market and preference of people.
Walton Nepal is developing products that are adapting with the market. The refrigerators
of Walton that are marketed in Nepal are going to adapt the design according to the Nepal
culture and size of the household. This is the reason Walton Nepal is taking marketing
refrigerators only ranging from 9CFT to 12 CFT.
Considering the air conditioner market Walton Nepal developing the products to be more
energy efficient regarding the electricity problem and shortage of electricity. Walton
Nepal is also adapting the cultural design in the air conditioner.
Walton Nepal is marketing television & home entertainment regarding the household
space and size of the household as a five member family generally lives in 605 sq. feet
apartment. So considering the size of the apartment Walton Nepal is marketing TV’s that
are suitable to the area.
53
8.0 INT. DISTRIBUTION DECISION
54
8.0 INT. Distribution Decision
8.1 Logistics Management
There are different strategies to be followed to manage the logistics properly. The
keystrategies which Walton Nepal will be following to operate in Nepal are described
below.
Using outsourcing units to get success:
Walton Nepal is not going to outsource tasks only to get rid of the hassle. The tasks are
outsourced to reduce the cost as well as to create time efficiency. Walton Nepal is
outsourcing all the Human Resource related tasks toPacific Human Resource, Nepal and
Distribution tasks to AVCO InternationalPvt. Ltd.
Lay the Foundation for Visibility and Control:
Walton Nepal will still rely on phone calls, emails, or manual web lookups to track down
shipments. Then, real-time knowledge of the location of goods will be introduced
throughout the supply chain which will make for faster-moving inventory speeds, cash
flow, and receivables, all while reducing inventory carrying costs.
Use Inventory More Effectively:
Walton Nepal will use weeks of supply and rules of thumb based on past history to set
raw material and work-in-process (WIP) inventory buffers. Whenever the supply base has
poor performance, inventory planners ratchet up the inventory. By using multi-echelon
inventory optimization, which more accurately accounts for supply and demand
variability, companies can take out redundant and unnecessary inventory while improving
customer service levels.
Implement Transportation Spend Management
International transportation costs can be two to three times higher than domestic costs and
much more variable. Two of the best practice globally focused specifically on aspects of
freight spend management to jump-start their improvement initiatives. Electronic contract
55
management is the foundation for spend management. Walton Nepal can exploit this
foundation to improve product costing and margin management, automates freight audit
processes, and takes preemptive action on cost and allocation issues.
Streamline Customs Processes and Maximize Trade Agreements:
Walton Nepal will focus on trade compliance excellence with realizing improvements in a
number of areas:
 Automating import/export compliance and documentation processes;

 Maximizing free trade agreement program benefits and automating certificate of
origin management with suppliers;
 Creating paperless workflows with brokers to lower document costs and increase
classification consistency.
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8.2 Challenges of Logistics Management in Nepal
By our thorough analysis on the Nepal consumers’ market it is found that, there are
different types of challenges in logistics management is visible. Those challenges are
defined below;
Physical distribution challenges:
The greater challenges are shown in physical distribution in Nepal are because of longer
lead times, greater supply chain uncertainty, and increased business risk. A survey has
shown that, in Nepal the physical distribution challenges are as follows;
Challenges in physical distribution

% of Respondents Citing as "Very Influential"
Compliance and documentation errors causing

21.50%
delays, cost overruns, and regulatory risk
Product cost savings being eroded by

16.00%
unanticipated global supply chain costs
Lead times inhibiting our ability to respond to local

62.50%
market demand
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Cost Challenges:
Walton Nepal will face inadequate transportation spend visibility is leading to

unanticipated budget discrepancies, unexpectedly low product margins, and, in some
cases, higher rather than lower total costs when sourcing from low-cost countries like
Bangladesh.
Challenges in Cost
% of Respondents (asked to select top 3 areas)
3rd-party warehousing/handling costs 25%
Inventory costs 27%
Broker/forwarder fees 27%
Taxes and tariffs 29%
Supplier charges 38%
Raw materials 39%
Transportation expenses 67%
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National Logistics Framework for Nepal:
A national logistics framework contains all types of tasks related to logistics operation,
end-to-end visibility, financial control and trade compliance. The logistics framework to
be followed in Nepal is projected below;
• International • Order, Shipment &

Transportation Inventory Visibility
Management • Exception Alerting &
• Inventory Optimization Escalation
• Warehousing • Guided Resolution
• Network Design • Six Sigma and Biz
Intelligence
Logistics End-to-End
Operations Visibility
Financial Trade
Control Compliance
• Total Landed Cost • Import/Export Compliance
• Margin Management • Trade Documentation
• Freight Spend • Product Classification
Management • Trade Agreement
• Risk & Contingency Management
• Broker & Gov’t Systems
Integration
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8.3 Distribution Point Number & Location
The number of points of distribution and the location of the distribution points are listed
below. The distribution points are selected on the basis of population density and supply
of required electricity basis.
Distribution Point Number Distribution Point Location

DPN 01 Taplejung
DPN 02 Sunsari
DPN 03 Solukhumbu
DPN 04 Siraha
DPN 05 Ramechhap
DPN 06 Bhaktapur
DPN 07 Kathmandu
DPN 08 Nuwakot
DPN 09 Parsa
DPN 10 Manang
DPN 11 Kaski
DPN 12 Palpa
DPN 13 Nawalparasi
DPN 14 Rolpa
DPN 15 Pyuthan
DPN 16 Dang
DPN 17 Banke
DPN 18 Bardia
DPN 19 Surkhet
DPN 20 Jumla
DPN 21 Kalikot
DPN 22 Mugu
DPN 23 Humla
DPN 24 Bajhang
DPN 25 Kailali
DPN 26 Kanchanpur
DPN 27 Dandeldhura
DPN 28 Darchula
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Retailer Listing:
Retailer listing indicates the total number of retailers available to sell the products of
Walton Nepal in the market of different regions. Retailers are the individual profit
organization not directly related with Walton Nepal but selling their product for profit.
Nepal has a number of outlets in different locations to make sales of Walton products.
The retail listing is as belows;
Area Indication Retail stores

(Approximate)
Area 1 180
Area 2 210
Area 3 425
Area 4 620
Area 5 320
Area 6 190
8.4 Servicing Policy
To claim any warranty or any one time free servicing, the user must contact with the local
distributor with the receipt of purchase. The local distributor will contact with the nearest
Walton Service Center for the warranty claims or free service. After servicing, the
product will be resend to the distributor and received by the user afterwards. The flow of
servicing is as following;
Warranty Service claim

claim Service
User Distributor
Center
Serviced product Serviced product
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Target reach through channels:
Most of the people in the target market will be reached by the outsourced distribution
channel. But more dense area with the population will be covered by the Walton Plaza
situated in Kathmandu, Pokhara and Nagarkot.
Channel means Percentage covered

Walton Plaza 15.62%
Distributor 84.38%
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9.0 INT. PRICE DECISION
63
9.0 INT. Price decision
9.1 Price escalation
Price escalation refers to the change in price level of products while entering in the
foreign market. The transportation and exporting costs results in higher price of products
in foreign market than domestic market. Tax, administrative cost, inflation, exchange rate
fluctuation, changes in currency, middleman cost values cause a higher final price of
products in foreign market. As we are marketing electronic goods in Nepal we will face
these cost escalation factors which is a large challenge for us to control the price level.
Exporting cost: Walton products will be directly exported in the Nepal market by road.
Distribution task will be done by the local distributor of Nepal which is AVCO
International Pvt. Ltd. We will have to pay substantial amount of commissions to the
distributor for a effective distribution performance. International transport cost can be two
or three times higher than domestic costs. The total number of territory we are going to
operate in is 12 with the warehouse in Panauti. Other related cost in the different levels of
logistics system reach all the territories add up to the costing of products to be marketed.
Taxes and administrative cost: The cost of products in Nepal market goes higher with
the costs related to govt. taxes and trade regulations. The 13% VAT and 1.5% local
development tax for imported goods will be charged for our products. This is a
fundamental costing in international trade though it is low in Nepal. Other non-tariff trade
barriers are not practiced by the Nepal government to encourage more imports in
manufacturing industry. Nepal gives privilege to the countries that falls in regional treaty
associations like SAARC and SAFTA. These have contributed in reducing the price
escalation effect.
Inflation: The inflation rate in Nepal is higher than what we experience in Bangladesh.
Currently it’s 9.47% inflation rate in Nepal economy. The costs of trading products in
Nepal will normally be higher than in Bangladesh. This is a major force of price
escalation in Nepal. The inflation is denoted by the supply and demand state of an
economy. In Nepal demand exceeds supply of commodity thus creating an inflationary
64
pricing of products. As the inflation rate in Bangladesh is lower than in Nepal, it will
affect our costing in trading in Nepal.
Fluctuation in exchange rate: The exchange rate of Nepalese rupee fluctuates constantly
over time. At present 1 BDT is equal to 1.26 Nepalese rupees. As the currency of Nepal is
weaker than BDT, it’s expensive for us to export in Nepal. This has a greater impact on
our pricing of Walton products in Nepal, operating costs, promotional costs and profit. If
fluctuations take place and value of Nepalese rupees falls, we will be able to maximize
profit or reduce price level. But if the value of Nepalese rupees rises against BDT, we
might have to cut other costs or minimize profit to keep the price level stable in Nepal
market.
Middleman cost: To minimize costs of logistics management we decided to hire local

distributor AVCO International Pvt. Ltd. We have decided to assign 17 distribution points
for the overall distribution coverage. These points will increase costs as it will need to
reach to all the retailers. As the distribution channel is not that much strong yet, the cost is
still manageable.
9.2 Pricing Strategy
First of all, our pricing will be ethnocentric pricing. Headquarter in Bangladesh will
decide the pricing adjusting the global price. Price for Nepal will be adjusted based on the
price in Bangladesh. The extra price that will include is transportation cost, tax charges
and exchange rate adjustments.
We will mainly follow market penetration strategy for most of the products as we are
entering as a new brand. We will try to gain market share through penetrations pricing
strategy. For some products, we will follow market skimming strategy as those are
premium products and those customers will not think about money. 130cc motorbike,
Smart TV, larger refrigerators; these product will be priced according to market
skimming strategy.
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9.3 Mark Up
In Nepal, Walton on every product will have a profit margin of 25% as it has done in
Bangladesh. That means the markup will be 25% on the total cost which includes
production, distribution, price escalation, insurance and other international charges. Now
for penetration pricing purpose some production may have a margin of 20%. Therefore,
there will be 25% markup and for some product which falls in penetration pricing will
have a markup of 20%
If a smartphone cost 13000 Nepali rupees, the markup will be 25% or 4000 rupee. So the
total price will be 17000 rupee. All of the products will follow the same markup method
and costing will include the trader margins.
9.4 Trader Margins
By maintaining Nepal rules and regulations, we will decide on the trader margins. The
distributors will get 12% of profit on the total price while the retailers will get 9% of
share on the total price. Therefore we are giving total 21% to the distributors and retailers.
Example – if the total price of a smartphone is 17000 NRP, the distributor will get 12% or
2040 NRP and the retailer will get 1530 NRP.
9.5 Pricing of the Product
Product Product Models Bangladeshi Nepali Price

Category Price (BDT) (NPR)
Refrigerator & Refrigerator W2D-1H5 (11.5 14000-28600 21000-
Freezer CFT) 41000
WCOM12 (12 CFT)
W2D-2B0 (12 CFT)
W500-4DMB (9
CFT)
Air Conditioner Air E-70GW-H (2 Ton) 49000-58000 65000-
Conditioner W-50GW-H (1.5 78000
Ton)
Television & Smart TV W42E685 (42”) 75000 90000
Home LED W28C20 (28”) 16300-69000 18000-
Entertainment Television WC22D12 (22”) 79000
W19E990 (19”)
W32E68 (32”)
66
W42E68 (42”)
CRT WDF21R (21”) 8000-11500 9200-13200
Television WPF21T2 (21”)
W1438 (14”)
W1488 (14”)
W14A3 (14”)
Radio Radio Heaven 500
(Pocket Radio)
(Proposed)
Generator Diesel Silent Katrina 5000E 93000 104000
Generator (45KW)
Mobile Smart Phone Primo X3 8090-30990 9300-35600
(2450mAh)
Primo ZX
(2750mAh)
Primo HM
(4200mAh)
Primo RX2
(2200mAh)
Primo V1
(2200mAh)
Primo GH+
(2200mAh)
Primo GH2
(1800mAh)
Primo GH
(2200mAh)
Primo S2
(2500mAh)
Primo X1
(2120mAh)
Primo RX
(1800mAh)
Primo X2 mini
(3120mAh)
Primo GF
(1800mAh)
Primo N1
(3000mAh)
Primo G3
(1800mAh)
Primo H1
(2000mAh)
Primo NX
(3000mAh)
Featured Classic T72 1290-2990 1380-3300
Phone (1200mAh)
Classic T50
(1000mAh)
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Classic C31
(1200mAh)
Classic MM50
(2000mAh)
Excel B10
(1200mAh)
Excel L13
(1200mAh)
Tablets Walpad 7 13490-15990 15500-
(4200mAh) 17800
Walpad 8b
(5200mAh)
Motorcycle Motorcycle Xplore (138cc) 110000- 126500-
Fusion (125cc) 132900 152800
Prizm (107cc)
Scooty Empower100 80000-
(100cc) (Proposed) 110000
Empower80 (80cc)
(Proposed)
Home & Kitchen Microwave WG17AL-DI (17 8600-10500 9890-12750
Appliances Oven Litres)
WG20GL (20 Litres)
Blender & WJB C501 2650-3900 3049-4499
Juicer WB C102+
WB OK82
Electric WP JYS16 (5 Litres) 5950 6749
Pressure
Cooker
Iron WIR-S01 (Steam 1450-3990 1659-4499
Iron)
WIR-S02 (Steam
Iron)
WCD-P01 (Cloth
Dryer)
Electric Rice WR XB30 (1.5 1850-2500 2099-2899
Cooker Litres)
WR XB40 (1.8
Litres)
WR MB60 (2.5
Litres)
Induction WI S30 3100-3990 3499-4299
Cooker WI S37
Stabilizers & WIP- 400SH & 18000-27000 20699-
IPS 600SH & 800SH 30999
WIP- 400SS &
600SS & 800SS
Purifier Walton Crystal 3400 3899
(Proposed)
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10.0 INT. PROMOTION DECISION
69
10.0 INT. Promotion Decision
10.1 Agency & In-house collaboration
Walton Nepal will assign Ad Media Pvt. Ltd. as the advertising agency of Walton Nepal.
The promotional concepts will be proposed by the agency as they know the Nepal’s
cultural effects on the people by advertisements. But the core decisions will be made by
the specific Creative department of Walton Nepal. In final production of promotional
tasks, the in-house creative team and the agency will work together with collaboration to
create an effective output.
10.2 Int. IMC (Promotion) Tools
Integrated marketing communication decisions are the combination of all kinds of

promotional decisions made by the decision makers of an organization who are
responsible for all kinds of promotional activities. In most of the cases, these kinds of
decisions are being made the Creative department of Walton Nepal. The IMC tools to be
used to promote Walton’s products in Nepal are as follows;
Advertising:
Advertising will be a strong IMC tool

for promoting Walton’s products.
Advertisement in various mediums
such in television media as Television
commercials, in audio-visual media
as billboards and radio promotional,
in print media as phase based
newspaper advertisements, in internet
promotion as Walton Nepal community page in Facebook and YouTube channel
promotions will be conducted.
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Direct Marketing:
Direct marketing will be followed only in Business to Business selling options. In B2B
selling, sales persons will directly communicate, maintain the liaison, offer different
purchase packages and provide regular after sales services accordingly. B2B marketing or
direct sales will be conducted in commercial hotels, retail shops, chain shops, private
hospitals, pharmaceuticals companies etc.
Internet Marketing:
Internet marketing now-a-days is an essential communicating media. People of Nepal are

intended to use internet increasingly day by day. Walton Nepal will maintain their
Facebook community page regularly. Product promotions, advertisements, product
reviews and discussion will be maintained regularly. This will create a direct public
relation with the users. There will be a YouTube channel where all the reviews,
advertisements and media coverage will be uploaded and maintained.
Sales Promotion:
Walton Nepal will introduce Test Use facilities in every Walton Plaza. Lucrative shelves
will be provided to the mobile phone retailers. Proper Point of Sales materials will be
displayed to attract the customers. Walton Nepal will participate in the National Trade
Fair and provide different offers to the customers during that period.
Public Relations:
Public relation will be conducted in YouTube product reviews, Facebook community

page and in Trade Fair regularly. Before launching any new product, the Head of
Marketing will provide a press briefing to make the customers or the prospects aware of
the product.
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10.3 Number & Type of Media to Use
Walton Nepal is going to three types of media in the promotion of Walton Nepal. The
Medias used is given below
1. Audio-Visual Media
In the audio-visual media Walton
Nepal will be broadcasting TVCs in
the local TV channels and in both
Nepali and English language to
make people aware of the brand in
Nepal. The advertisements will also
be aired on the FM stations in radio
for more coverage. As many people living in the rural areas do not TV, their only
entertainment source is the radio. Walton Nepal will also hire billboards for
advertisement, as it will be situated in the busy streets of Nepal which will provide
coverage for the Walton Nepal. Walton Nepal will be focusing in both television
and radio for more coverage.
2. Print Media
Only TVCs, advertisement on radio and billboards will be not enough to capture
the attention of the customers. Walton Nepal will also post advertisements in the
reputed newspaper and brochures to let people know about the brand.
3. Internet Promotion
Internet promotion is another media which is gaining popularity now-a-days.
Walton Nepal will be posting ads in the YouTube channel under the name Walton
Nepal. The TVCs will also be aired there. Walton Nepal will also have a
Facebook community in the social media network, where people may share their
experiences with Walton and give feedback about the products they use. The
social community will also be used in promoting new products and features that
will attract the people.
4. Sales Promotion
Walton Nepal will also make sales promotion in the trade fairs of Nepal. The
company will establish stalls where customers can test the products on the spot
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and will also offer discounts in the fair. Walton Nepal will also sponsor the stage
dramas that are held in the rural sections of Nepal to identify the Walton Nepal.
Urban Promotional Factors Rural Promotional Factors

1. TVC 1. TVC
2. Trade Fair 2. Stage Drama
3. Social Media Community 3. Billboard
4. Billboard 4. Advertisements in FM Stations
5. YouTube Channel
6. Brochure
7. Advertisements in FM Stations
8. Newspaper
73
10.4 Spokesperson
The job of spokesperson may be delegated to the corporate communications or public

relations departments (or equivalents), who will act as spokesmen. For Walton Nepal, the
Head of Marketing department will be introduced as the spokesperson who will talk about
the corporation and its products.The spokesperson will faithfully represent and advocate
for the organization's positions.
10.5 Translation
Walton Nepal will translate the advertisements and TVCs in Nepali language and English
language. The TVCs that will be aired in the TV channels will be in Nepali language for
the better understanding of the Nepali customers. There will also newspaper ads in both
English and Nepali language. There are four regional distinguished languages in Nepal
and Walton Nepal will also post ads in newspaper, brochure, and billboards and in poster
in the regional languages to communicate with the customers and making a mark in their
mind.
74
11.0 FINANCIAL PROJECTION
75
11.0 Financial Projection
CASH FLOW STATEMENT 2015-2017
Boom Period Recession Period

Year 1 Year 2 Year 3 Year 1 Year 2 Year 3
Beginning Cash
Balance -66146425 -37992045 -100044067 -98277330
Cash Inflows
(Income):
Cash Collections 89190000 129096000 145668000 46902000 74808000 101472000
Total Cash
Inflows 89190000
Available Cash
Balance 89190000 62949575 107675955 46902000 -25236067 3194670
Cash Outflows
(Expenses):
Advertising 8030000 7050000 7050001 6000000 3000000 3000000
Bank Service
Charges
Insurance 4459500 6454800 7283400 2345100 3740400 5073600
Inventory 16030000 16030000 16030000 16030000 16030000 16030000

Warranty & Repair 1153000 1453000 1453000 1453000 1453000 1453000
Operating Supplies 600000 600000 600000 600000 600000 600000
Payroll 45000000 45000000 45000000 45000000 30000000 30000000
76
Sales Commissions 1337850 1936440 2185020 703530 1122120 1522080
Communications
Equip. 1000000 1000000 1000000 1000000 1000000 1000000
Rent 6456000 6456000 6456000 6456000 6456000 6456000
Office Supplies 500000 500000 500000 500000 500000 500000
Permits & Licenses 1200000 1200000 1200000 1200000 1200000 1200000
Utilities & Telephone 120000 120000 120000 120000 120000 120000
Travel 800000 800000 800000 800000 500000 400000
Taxes 8250075 11941380 13474290 4338435 6919740 9386160
Other:
*Sales training 400000 400000 400001 400002 400003 400004
Subtotal 95336425 100941620 103551712 86946067 73041263 77140844

Other Cash Out
Flows:
Capital Purchases 60000000 60000000
Subtotal 60000000 0 0 60000000 0 0

Total Cash
Outflows 155336425 100941620 103551712 146946067 73041263 77140844
Ending Cash
Balance -66146425 -37992045 4124243 -100044067 -98277330 -73946174
Payback Period = = 2.260812567 Years
77
12.0 MARKET STRATEGY FOR FUTURE

GROWTH AND SUCCESS
78
12.0 Market Strategy for Future Growth and Success
Initially Walton will start business reminding in mind about to capture the market of target
audience. Gradually Walton will become the symbol of quality electronic products in the
country. For future success we will have following strategies.
Zero Tariffs
Bangladesh government is in a contract with Nepal about zero tariffs for electronic
products[19]. If the contract goes successful, Walton will have more opportunity of business in
Nepal and more profit will come for the business. Zero tariffs will encourage supplying
products to Nepal. Nepal as a country will get more access to electronic products.
More Products
Initially we are starting with few models of every product line. But gradually number of
models will increase. We will also introduce some new products which has huge demand in
the local market.
Better Advertising
In the near future Walton will come up with better thematic advertising with local celebrities.
We will also focus on the different offers and promotions and will put it in the advertising.
Strong Public Relations
Walton will focus on the public relations and will create a harmonious relationship with the
journalists. Media is the primary weapon for all kinds of advertising and Walton will keep a
close tie with the industry. If media says we provide quality products, we surely do provide
quality products.
Corporate Social Responsibility (CSR)
Initially, we will not get involved in any CSR activities. But after getting a promising market
share we will initiate CSR and will try to develop the economy and environment of Federal
Democratic Republic of Nepal.
19. The News Today June 11, 2014 http://www.newstoday.com.bd/index.php?option=details&news_id=2381560&date=2014-06-20 79

13.0 REFERENCES
80
13.0 References
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available at www. adb.org
Asian Development Bank, Second Industrial Sector Study, Nepal, 1991
Bettman JR (1979). An information processing theory of consumer
choice.AddisonWeslyPublishers, Reading, MA.
CAAN (2001) Civil Aviation Authority of Nepal, Annual Report of Nepal
Central Bureau of Statistics (1999), Report on the Nepal Labour Force Survey 1998/99,
November,Kathmandu, p. 67.
Central Bureau of Statistics (2012), Population Census 2001, Kathmandu.
Culture of Nepal - history, people, clothing, traditions, women, beliefs, food, customs,
family. 2014. Culture of Nepal - history, people, clothing, traditions, women, beliefs,
food, customs, family. [ONLINE] Available at: http://www.everyculture.com/Ma-
Ni/Nepal.html. [Accessed 20 August 2014].
Department of Customs (2012), HMG Nepal, October.
Economic Intelligence Unit (2011), “Nepal Country Profile.”
Economy of Nepal - Wikipedia, the free encyclopedia. 2014. Economy of Nepal - Wikipedia,
the free encyclopedia. [ONLINE] Available at:
http://en.wikipedia.org/wiki/Economy_of_Nepal. [Accessed 20 August 2014].
Engel J, Blackwell R &Miniard PW (1995).Consumer behaviour.8th edition,
Florida.Harcourt Brace College Publishers.
Ertur O (1994). The Need for a National Urbanization Policy in Nepal.AsiaPacificPopulation
Journal 9(3), pp 1936
Haisken-De-New, J.P and C.M. Schmidt (1997), “Inter-Industry and Inter-region Wage
Differentials:
Halliday, A.L., and RatnakarAdhikari (2000), Nepal’s Accession to the WTO: Services
Offer, February.
Harvard University, Tax Reform in Nepal : A Comprehensive Review- Final report,
Cambridge, Massachusetts, USA, May 30, 1997 for the UNDP
Heckman, J., Ichimura, H. and P. Todd, (1998), “Matching as an Econometric Evaluation
Estimator”. Review of Economic Studies (U.K.); 65, pp. 261-94.
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81
IMF (2012) Nepal , Selected Issues and Statistical Appendix, August 21.
Karmacharya, B., Khadka, K and Acharya, A (2009), A Study on Strengthening the
Industrial Sector in Nepal, Kathmandu, Nepal.
Karmacharya, B.K. (1999), South Asian Regional Economic Cooperation: Operation and
Challenges for Nepal in H. Mund (ed.) WTO Regional Cooperation and Nepal, Nepal
Foundation for Advanced Studies (NEFAS), Coalition for Action on South Asian
Cooperation (CASAC) in cooperation with Friedrich- Ebert Stiftung (FES), Germany.
Kotler Philip (2007). Marketing management: analysis, planning, implementation and
control. 8th edition. NJ. Prentice Hall.
Kotler, Philip and Gary Armstrong (2005).Principles of Marketing.11th edition.Upper Saddle
River, NJ: Pearson/PrenticeHall.
Maskay, N.M. (2002), The Exchange rate Policy of Nepal vi-a-vis the Indian currency,
NEFAS and (b) IMF International Financial Statistics.
Mechanics and Interpretation”, Review of Economics and Statistics; 79, pp 516-521.
Ministry of Industry, Commerce and Supply, HMGN, Modernization Processes of the
Department of Customs – Need for Technical Assistance, July 2000
Nepal - Geert Hofstede. 2014. Nepal - Geert Hofstede. [ONLINE] Available at: http://geert-
hofstede.com/nepal.html. [Accessed 20 August 2014].
Nepal | History, People, Geography and Economy. 2014. Nepal | History, People, Geography
and Economy. [ONLINE] Available at:
http://asianhistory.about.com/od/nepal/p/nepalprofile.htm. [Accessed 20 August
2014].
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http://www.nepal.gov.np/portal/npgea/home?l=en&rn=1408375109434. [Accessed
20 August 2014].
Nepal to give duty-free access for 74 Bangladeshi items. 2014. Nepal to give duty-free access
for 74 Bangladeshi items. [ONLINE] Available at:
http://www.newstoday.com.bd/index.php?option=details&news_id=2381560&date=2
014-06-20. [Accessed 20 August 2014].
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Ram PrakashYadav and Jan Sharma, “Little Land for Distribution in Nepal”, The Himalaya
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(OcoLC) 1259379
82
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The CIA World Factbook, U.S. Department of State, Area Handbook of the US Library of
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Provisions of the WTO,” Mimeo, November.
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83

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Initiating International Marketing

Operations for Walton Bangladesh in Nepal

AnInternational Marketing Report on:

Course Title: International Marketing

Name of Group Members ID

Business Administration Discipline

August 21, 2014

This report is an International Marketing approaches report prevails the initiating

9.1 Price escalation ............................................................................................................. 64

1.0 RATIONALE FOR CHOOSING

1.0 Rationale for Choosing Country and Market

1.The News Today June 11, 2014 http://www.newstoday.com.bd/index.php?option=details&news_id=2381560&date=2014-06-20

Location: Latitude: 26◦22’N to 30◦27’ North,

Longitude: 80◦04’E to 88◦12’ East

Length: 885 Km. [East to West]

Width: Non-uniform, Mean width of 193 Km. [North to South]

Altitude: 70 metres to 8,848 metres

Cities: Capital--Kathmandu (3 districts) (pop. 2.2 million est.).

Other cities: Biratnagar, Patan, Pokhara, Birgunj, Dharan, Nepalgunj.

Time zone: GMT +5.45 hours

3. Doing Business in Nepal http://www.nicci.org/pdf/i-guide/i-guide.pdf

Education: Years compulsory – none, although education is free through

Life expectancy: 67 years.

Work force: Agriculture 73.9%; non-agriculture 26.1%.

Type: Representative multi-party democracy.

Constitution: Interim constitution promulgated on January 15, 2007. Constituent

Executive: President (head of state), Prime Minister (head of government).

Legislative: The Constituent Assembly is a unicameral Parliament, consisting

Judicial: Supreme Court, 16 appellate courts, 75 district courts.

Sub-divisions: 5 development regions, 14 zones, and 75 districts. 75 district

GDP: $47 billion (2014est.) [1]

GDP growth: 5.1% (2014est.)

GDP per capita: $1,600 (2014 est.)

Population below poverty line: 24.7% (2008 est.)

2.0 NATURE AND SCOPE OF OPERATION

2.0 Nature and Scope of Operation:

3.1 Cultural History

Nepal is a rectangular shaped

5.Every culture- Nepal http://www.everyculture.com/Ma-Ni/Nepal.html 9

legislature made up of a House of Representatives and a National Council. The majority

3.2 Elements of Culture

7. Geert Hofsteed Model Nepal http://geert-hofstede.com/nepal.html

Nepal Greet hofsteed

The important and amazing rituals of

8. Volunteer Summer Nepal http://volunteersummernepal.org/ritual-of-nepal 13

Dance and Music[10]: Different legends

9. Heritage of Neal http://www.nepallink.com/nepal/arts-architecture.html 14

Festivals and Celebrations

Other important festivals

3.3 Social institutions

11. Nepal living standard survey http://cbs.gov.np/wp-content/uploads/2012/02/Statistical_Report_Vol1.pdf 15

The geographical distribution of religious groups in the early 1990s revealed a

12. Wikipedia http://en.wikipedia.org/wiki/Religion_in_Nepal 16

15. Nepal Government- Portal http://www.nepal.gov.np/portal/npgea/home?l=en&rn=1408375109434 17

4.0 Rules & Regulations

4.0 Rules & Regulations

4.1 Regulations [16]

Import Requirements and Documentation

16. Rules and Regulation http://nepal.smetoolkit.org/nepal/en/content/en/1676/A-Guide-on-Import-Procedure-and-Documentation 19

4.2 Trade Agreement

Import Procedures and Documentation

 Nepal Customs import declaration (white color),

4.3 Custom Duties [17]