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Marketing Assignment 1
Marketing Assignment 1
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MARKETING PLAN FOR A BIODEGRADABLE POLY BAG COMPANY
Course Name: Marketing Management
Course Code: BTM 4505
Submitted To :
Md. Abdullah Al Mamun
Lecturer
Department of Business and Technology Management
Islamic University of Technology
Submitted By:
Rubbaiyat jahan Preetu
Semester: 05 , ID:170061068 , Section :B
On behalf of Group
Department of Business and Technology Management
Islamic University of Technology
Date of Submission: August 9, 2020
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Group Members
Section:B
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LETTER OF TRANSMITTAL
Dear Sir,
I, on behalf of my group, am glad to submit my assignment on “Marketing plan for a poly bag
company” as a partial requirement of ‘Marketing’ course from the Department of Business and
Technology Management, Islamic University of Technology.
All the works presented here is done with utmost sincerity and honesty. We tried my best to
make this report errorless but if any error remains there by mistake we hope you will consider
it as a lack of experience.
For any questions and/or comments regarding the interpretation of this research project, I
request you to call me at your convenience. I would like to show our gratitude for providing
your continuous support throughout the project preparation and presentation period.
Yours Obediently,
Rubbaiyat Jahan Preetu
ID:170061068
Section: B
Batch: ’17
Department of Business and Technology Management
Islamic University of Technology
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ABSTRACT/ EXECUTIVE SUMMARY
In one minute one million plastic bags are in use around the world and 3,744 tons of single-
use plastics are produced nationwide in Bangladesh according to Environment and Social
Development Organization (ESDO) & approximately 80-85% are discarded after one use
takes 100s of years to degrade and It not only contaminate the environment but also directly
impairment many living organisms. PEFM is preparing to launch eco-friendly and biodegradable
poly bags using jute cellulose, the PEFM Poly bag, in the market which substitute of
conventional poly bag & also plays a significant role in concern with environment, temperature,
air, soil and sea pollution as well as the opportunity to retain the glory of Bangladeshi jute in
international market and farmers to keep smile. The report puts light on establishing a world –
class biodegradable plastic bag manufacturing company whose products will not only be used in
the FMCG sector but also be exported to other countries of the world especially in Europe and
North America. It assists marketers whether jute biodegradable poly bag will gain market share
in international plastic & bio-plastic industry as well as the potential market for exporting
as Bangladesh has both absolute and comparative advantage in producing jute poly bags. We
are targeting specific segments in the consumer and business markets, taking advantage of the
growing interest in eco-friendly products in affordable price all over the world. Polyethylene
bags are the most common plastic bags that are made from crude oil and natural gas which are
nonrenewable energy sources- limited supply where jute is natural and renewable as much as
needed ensuring fresh air and environment. This report highlights the key findings by surveying
to grow the market share of PEFM sufficient government support to compete plastic industry,
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whether people can switch concentration from plastic, environmental awareness of people
&and research on jute diversified products. PEFM will at all times demonstrate its commitment
to sustainability, both individually and as a firm, by actively participating in our communities
and integrating sustainable business practices wherever possible. Marketers should ensure that
PEFM holds itself accountable to the highest standards by meeting our customers’ needs
precisely and completely whenever they patronize our products.
Table of Contents
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Chapter 1.0: Introduction.............................................................................................................10
Chapter 2: Situation Analysis........................................................................................................11
2.1. Market summary.................................................................................................................12
2.1.1. Market Demographics…………………………………………………………………………………………………………13
4.1.3 Promotion…………………………………………………………………………………………………………………………….22
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4.2. Marketing Recharch............................................................................................................23
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Figure 1: Figure 1: Market of PEFM ……………………………………………………………………………………… 10
Figure 2: Porter’s five force model................................................................................................15
Figure 3: Bio-plastic inductry value chain......................................................................................18
Figure 4: Global bio-plastic for packaging ....................................................................................20
Figure 5: Marketing Mix ................................................................................................................22
List of Tables
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1.0 Introduction:
In order to meet the packaging needs of today without compromising the ability of future
generations to meet those needs, products must be developed & used from renewable sources
that are beneficial, safe & healthy for individuals & communities. PEFM is committed to the
design & distribution of sustainable packaging products while meeting marketing criteria for
performance & cost. We can effectively compete with non-biodegradable eg. poly-ethane bags
and other biodegradable bags because our product offers a very competitive value-added price.
Our product offers biodegradable, water and air resistant polymer with similar texture as
polythene bags. Furthermore, the material is durable and can support more weight than the
conventionally used polythene bags& can take one and a half times more load than polythene.
Although the polymer doesn't absorb water, it decomposes within three to four months under
soil.
Polythene is a petroleum-based synthetic substance. It is used as packaging material due to its
thermo-mechanical properties and low cost, but it is not biodegradable. Disposal of plastic
waste has become a serious problem now. On the other hand, jute polymer is made of a
cellulose-based substance and perishable. The production cost of the polymer is now high but if
we can go for large-scale production, it will be available as polythene.
Millions of plastic bags are disposed in BD from which very few are recycled. 410 million poly-
bags are used per month & more than 3 meters layer are formed in the base mate of Buriganga
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river& 80% of Dhaka’s water-logging is caused by these. These bags create major
environmental degradation & air-pollution as they emit HCN, CO 2, CO toxic materials &
diminishing availability of natural resources & damage from the extraction of petroleum. It also
destroys beneficial bacteria of the soil, depleting its fertility which directly affects agriculture&
also harms our marine wildlife as plastic bag ends up at ocean.
Polythene is a petroleum-based synthetic substance. It is used as packaging material due to its
thermo-mechanical properties and low cost, but it is not biodegradable. Disposal of plastic
waste has become a serious problem now. On the other hand, jute polymer is made of a
cellulose-based substance and perishable. The key constituents of jute cellulose that gives
benefit:
1. By increasing production of jute
2. Reducing the foreign currency outflow
The production cost of the polymer is now high but if we can go for large-scale production, it
will be available as polythene. Though the government banned the manufacturing, marketing
and usage of polythene shopping bags in the capital, polythene was still being traded and used
throughout the country due to inadequate enforcement of the ban and absence of cost
effective environment-friendly alternatives.
The jute-made PEFM product can put an end to the usage of harmful polythene bags,
encourage environment-friendly packaging of products, reduces dependency on import of
biodegradable bag. This product can be even exported. The food packaging and beverage
packaging market is expected to play a crucial role in driving the biodegradable packaging
market worldwide. Meanwhile, it is hoped that farmers can now earn a huge amount of money
by selling jute if the jute made poly-bag is produced in large scale and marketed in the country
and exported abroad.
Bangladesh is one of the highest jute producing countries of the world, farmers are well
experienced to produce high quality jute and the newly invented jute poly bag that is a value
added product which will help to gain global market share. In one word, our new product is of
low cost, high bio- degradability , higher strength, renewable raw materials, high stability which
will keep our earth green & increase the economic growth of BD.
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The main raw material that means jute is available in Bangladesh and that’s why he hopes that
the price will be reasonable .The world is now highly environment concerned and from that
aspect we are going to produce Jute Poly Bag which will meet up the local demand and also
may take the international market. Competition is increasingly intense even as technology
evolves, industry consolidation continues, and pricing pressures squeeze profitability. To gain
market share in this dynamic environment, PEFM must carefully target specific segments with
valued products and plan for a next-generation product to keep brand momentum going.
Target Markets:
.Recycling
.Packaging
.Weaving
.Shipment
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The profile for the typical PEFT customer consist of the following geographic, behavioral
factors:
Geographic:
1. PEFT has no set geographic target area. It can serve both domestic and international
customers.
2. The total target population is .08 million customers.
Behavioral :
1. Users tend to spend less money in shopping bags.
2. Users want eco friendly products.
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2.1.4 Market Growth :
As people are now concern about the environment, they are choosing biodegradable products.
That is why this market is growing rapidly. The global biodegradable plastic market was valued
at $1.2 billion in 2018, and is projected to reach $6.0 billion by 2026, growing at a CAGR of
21.3% from 2019 to 2026.
Weakness :
1. Plant capacity
2. Not useful in monsoon season
3. Less advertising
Efforts Opportunities :
1. Increase awareness of hazards of plastic
2. Everywhere bags are provided
3. There is something that never ends
Packaging Threats :
1. Government policies
2.Introduce new product similar to plastic bags
3. Increase of raw material price
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2. Potential of new entrants into the industry
3. Power of suppliers
4. Power of customers
1.The Intensity of Competitive Rivalry: For most industries the industry of competitive rivalry is
the biggest determinant of the competitiveness of the industry. An organization must be aware
of its competitors, marketing strategies and pricing and also be reactive to any changes made.
Biodegradable plastic market mainly accounts for less than 1% of the overall plastic market. The
latest data shows that the wrapping remains the largest fields of application for bio plastics
with almost 40% of total bio plastic market 2016.There are also acceptance of bio plastics
materials in many other sectors like
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plastic companies by using an outsources production model to lower overall cost, deliver capital
efficiency and global distribution.
2. Threat of New Entrances: Now market competition is not significant in measures but in the
coming year market will be much more competitive due to the ongoing research and interest to
investment.
To enter into bio-plastic industry, government support, innovation are required to gain
economics of scale and for mass production. In bio plastic the main material are PLA which is
costly compare to petroleum or crude oil So ,Bangladesh has the possibility to gain economics
of scale and gain market share in world bio plastic Industry.
Here in bio plastic industry entry barrier is high compare to conventional plastic industry.
3. The Threat of Substitute Products: Companies that produce good and services for which
there are no close substitutes will have more power to increase prices. When close substitutes
are available customers will not be interested and company’s power can be weakened.
So many countries including Bangladesh banned plastic poly bags in 2002.But the
environmentalists are the strongest opposition of traditional plastic bags. So the demand of
plastic poly bags near about 10 million tons but the production is only 1.62 million the gap is
still huge. The PLA (poly lactic acid) segment is the highest growing segments in the
biopolymers market. The main substitute of Bangladeshi Jute poly bag is those bags that are
made by Bio-plastic. PLA is one of the commonly accepted biodegradable polyesters and can be
synthesized using either renewable or non-renewable routes that is water-resistant and
decomposes within three weeks into the industrial composting process. That’s why PLA is used
in the packaging sector and textile industry.
4. The Bargaining Power of Customers/Buyers: Buyers can force prices down, demand higher
quality of the product because the power of the buyer is insignificant. Buyers are in a large
volume. The production of a company cost a few but if the product is not essential for the
buyers they will disclosure about supply, demand, price and cost. Bangladesh is the only
country that are using jute to produce poly bag that will be more cheaper compare to existing
Bio-poly Bag. And it will be very useful for the buyers.
5. Bargaining Power of Supplier: As here Jute is using for making the polybag so we can say
that farmers are the producers of the raw materials. And they are selling directly these jute or
raw materials to the jute mills or some intermediaries buy these jute from the farmer. In
between some government agencies monitor the price and transactional activities. So, there
are very few changes of increase barging power of jute producer in a sudden. In the content of
Bangladesh, supplier bargaining power is avoidable.
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2.4 PEST Analysis:
Political:
Bangladesh government and law allows this business and its legal to export this products from
this country .Also as it’s a eco-friendly product there is high chance government will help to
implement this project.
Minimum wages or salary in Bangladesh is low .In addition many countries like EU,Japan,
UK,USA offers TAX free benefit for Bangladesh.
Economic:
As a developing country, it will hard for the people to spend some extra money for something
like this. For that the initial demand will not high. We have to try to reduce the price and set
marketing strategy .Also we have to focus on export the product abroad.
Social:
Educated and aware people will understand the value of this product. The media will publish
this project positively as its eco-friendly.
Technological:
Technology is updating everyday in this sector. Many other competitors will try to make
biodegradable products by using different types substance. For ensuring the existence in
market updating our products is a must.
2.5 Competition:
PEFT is forming its own market .Although there are very few companies which are producing
the biodegradable products in Bangladesh. One of these companies is SONALI company .But
there are lots of global competitors. For example Europe is the largest regional biodegradable
plastic market in this market. The region adopts bio-poly over conventional plastic to transform
into a proper waste management region. European association is promoting government and
environmental policies, regarding sustainability and bio-degradability, which is a significant
factor that drives the growth of the biodegradable plastic market in Europe. Increase in demand
for bio-poly products among Europe customers stimulates the growth of bio-based products in
this region. European customers choose bio-poly products over conventional plastic products
considering their environmental benefits. This is why Europe is the largest regional market in
terms of consumption in the global biodegradable market.
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pollution as well as the opportunity to retain the glory of Bangladeshi jute in international
market and farmers to keep smile. In the paper we will analyze international marketing
strategy, product positioning, competitiveness and potentiality in international market through
SOWT, marketing mix & porter’s five forces analysis. Our observation that newly invented jute
biodegradable poly bag will gain market share in international plastic & bio poly industry as well
as the potential market for exporting all over the world and especially in Europe and North
America. Bangladesh has both absolute and comparative advantage in producing jute poly bags.
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the farmer could directly supply to factory without intermediary. Then finally the target retailer
and brand owner will be food packing industry that uses near about 40% of global bio-plastic
production in national and international market. In the end the consumed product is recycled
by the natural way without or less impact in environment.
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Specifying a target for any kind of business an essential step to remain viable. An example like-If
any shop selling hamburger to the people who are vegetarians ,are on diet or poor, this is the
waste of money and effort for the shop. So first of all any company or any production must
target their market to whom they will sell their product.
For target market analysis there are 5W’s
Who,What,When,Where,Why
If the company or production fulfill this 5W’s its most beneficial for them.
If we are talking about jute poly bag we can see a figure-
Figure shows that packaging consumption of bio plastic. And the Europe and North America’s
packaging consumptions are 35% and 27%.On the other hand, Europe imports 15% of world
jute goods .Europe mainly most important trading partner of Bangladesh. So Europe imports
90% goods like clothing and many other things from Bangladesh. As Europe has a good trading
relation with Bangladesh so it will very potential marketing for the Bangladeshi bio-plastic jute
poly-bag.
As we can see that biodegradable jute poly-bag are new in the market so it’s also very difficult
for setting the target market. From the figure South and central America’s packaging
consumption is 7% which is lower among all of them .So it will be waste of time and effort For
Bangladesh if they target them.
So Bangladesh should export jute poly-bag to the target market with whom Bangladesh has a
good relation with trading. As from the figure Europe’s consumption is 35% which is huge
among all other countries .For the jute poly-bag target market should be Europe.
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3.4 Market Access :
As a Least Developed Country (LDC) [21], Bangladesh benefits from the most favorable
administration available under the EU’s Generalized Scheme of Preferences (GSP), duty free
quota and free access to the European Union for exports of all products and EU imports 15% of
world jute products that mostly export from Bangladesh. Bangladeshi exporter has skilled and
knowledge on the European Union market as well as distribution channel that will make ease to
export bio-plastic in it.
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Figure 3: Marketing Mix
4.1.1 Product
Several of PEFM’s currently developed products have patents pending, local market research
indicates that there is great demand for these products. PEMF will achieve fast, significance
market penetration through a solid business model ,long range planning and a strong
management team that is able to execute this opportunity.
4.1.2 Pricing:
This will be based on a per-product retail price .Because of the advantages of selling directly,
higher margins can be achieved with premium pricing that will still appeal to customer
segments.
4.1.3 Promotion:
PEFM will sell its products initially through its Website .In addition to allowing for higher margin
,this direct to the customer approach will allow PEFM to maintain close relationship with
customers ,which is essential for producing products that have a true market demand .By the
end of the year, PEFM also will have developed relationships with different Jute product shops
and will begin to sell some of its products through retailers.
4.1.4 Place:
The message that PEFM will seek to communicate is that it offers the best-designed , most
useful Jute accessories .This message will be communicated through a variety of methods. The
first will be PEFM website, which will provide a rich source of product information and offer
consumers the opportunity to purchase.
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The second marketing method will be advertisements placed in numerous industry
magazines .The cost of the sales literatures will be fairly minimal because it will use the already
compiled information from website.
4 .2 Marketing Research
PEFM is blessed with good fortune of being located in the center of the Jute Mills world :
Khulna It will be able to leverage this opportunity cost by working with many different workers
who lives in this area .PEFM was able to test all the products not only with the principals ,but
also many dedicated users in Khulna. The extensive product testing by a wide variety of users
provided PEFM with valuable product feedback and has led to several design improvements.
5.0 Finances:
Break-Even analysis:
Milestones:
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Development 01/01/2021 19/11/2021 $0 Denver Marketing
of retail
channel
Total $18,450
Table 3: Milestones
6.0 Controls:
the purpose of PEFM’s marketing plan is to servers a guide for the organization. The following
areas will be monitored to gauge performance:
6.1 Implementation:
The milestone identify the key marketing programs .It is important to accomplish each one on
time and on budget.
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.An entry into the market by an already established market competitors with a totally new type
of product.
Worst-case risks:
.Determining that the business cannot support itself on an ongoing basis.
.Have to liquidate equipment or intellectual capital to cover liabilities.
7.0 Limitations:
As the jute poly bag is newly invented product and it’s mainly on production phase many things
are not tested yet. Like-Details of the product usefulness, customer acceptance, Quality of the
product, production capacity to meet demand and it will be useful to the customers. So, mainly
the invention of polythene from jute has not been promoted as it has been expected. The
inventor of jute poly bag requires three main issues they are-separate budget, separate
identity, separate institutions which are not available. If these are not available the jute poly
bag project will be stopped .So mainly these three limitations or issues should be mitigated.
8.0 Recommendations:
Bangladesh has sufficient knowledge in exporting jute & readymade garments all over the
world for a long time especially in European Union where she gets duty free export opportunity
mostly in all products and we suggest focusing EU to get cost leadership in known market at
first phase. We also suggest concentrating on Asian market especially in India and China though
this market will be competitive in near future due to availability of resources in corn starch
production where forecasted that China will be a leader in Asian as well as world market in
producing corn starch. Most of the currently [20] planned volume production facilities are being
implemented in Thailand, India and China, and over 1/3 quarters of bio-plastics will be
produced in Asia by 2022. Branding and marketing through international media and more
participation in international trade fair demonstrate the benefits and usefulness. To strengthen
absolute advantage, Bangladesh should encourage and support SME’s to get more involvement
in production and distribution. Product diversification, usefulness, low pricing strategy are the
most important to sustain in international market. Furthermore, investment in research and
technological improvement should be taken in consideration to get economics of scale in
innovation, production and operations.
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9.0 Conclusion:
There are many alternatives of plastic poly which are known as poly bags to us. Many
companies or countries producing biodegradable poly bags which are made by natural gas and
crude oil nonrenewable sources which are not bio plastic. Bio plastics are mainly made from
natural sources which basically collected through cultivation in green field like jute. Bangladesh
invented biodegradable poly bags which mainly takes less effort for the production of the poly
bag. And it is also the strength for Bangladesh because Bangladesh cultivate high quality jute.
Newly it is invented as jute poly bags, which will help to gain global market share.
Environmentalists also encouraging this idea as it will not harm our environment. The strength
of Bangladesh, one of the highest jute producing countries of the world, farmers are well
experienced to produce high quality jute and the newly invented jute poly bag that is a value
added product which will help to gain global market share. So, here main competitors are PLA
producing countries, it’s very costly and still they are producing it as they are getting help from
the government. And many companies and countries were not able to sustain in long run as it is
very costly. Through the competitive analysis, we understand that there are monopolistic
markets for Jute poly bags and negligible threat of substitute as well as bargaining power of
supplier and consumer that will not affect all due to world demand and supply which is still a far
way to get equilibrium.
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The End
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