TERM PAPER-LICENSING JAQUAR

EXECUTIVE SUMMARY
The next step after learning a theoretical concept is its implementation in practical grounds. So, to implement the theoretical concept of licensing we have chosen to market Jaquar bath accessories, a world famous Indian brand in the Bangladesh market. In the process of writing this project we have tried to implement all the aspects of licensing with the light of our limited knowledge. In the recent past most of the people in Bangladesh were not very cautious about the looks and design of the bathrooms; but now a days there is a new trend in our country to build own home or to renovate flat with high quality fittings. So there is grate demand of house fittings in our country. Also now a days people are very much concern about there own bath room and want to decorate there bathroom with high quality fittings with exceptional design with affordable price. So this is a new business trends in our country to import high quality bathroom fittings. But this is much more expensive and also there is no renowned importer of this product. As a result there is no price boundary of that kind of product. So customers are loosing there interest of these kind of bath accessories because of high price or monopoly business. Also many customers want to afford this kind of product but there is no supplier of high quality product. So we are going to bring world famous branded bathroom fittings in our country to meet the demand of the sophisticated customer with low price and high quality and service. We want to bring the world famous Indian brand JAQUAR in our country to meet the demand of the customer.

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TERM PAPER-LICENSING JAQUAR

INTRODUCTION
• Origin of the report

During the 13 week semester of BBA program of North South University, we are required to do a term project in the course Mkt 382: International Marketing. This course is designed to give the business students an idea of International Business. For this, we are completing a project on Licensing. So we have chosen a company ‘JAQUAR Bath Accessories’ for our term paper.

Objectives of the report • General objective

• •

The general objective is to prepare and submit the term project within specified time. To have a very practical idea and over viewing the Pharmaceuticals sector focusing on a specific corporation, their performance and succeeded in Bangladesh. • Specified objective

By selection of the company ‘JAQUAR Bath Accessories’, we have the intention to: • • • • Over view of the Bath accessories sector of Bangladesh. Find out the potential for Jaquar bath accessories in Bangladesh. Find out the best strategy to market the product. Implementation of the chosen strategy.

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IBM. • Secondary data • • From different books From the internet COMPANY PROFILE Established in 1960. technology is the prime enabler . Denmark and the Middle East. JAQUAR has revolutionized the designs and utility patterns of bath fittings in the country. At JAQUAR. USA. Canada. quality and aesthetic appeal.the force that drives the company to new heights. Kodak and Xerox in the past. Constantly keeping abreast of the latest international developments in the industry is an integral part of the JAQUAR tech spirit. The cutting-edge technology. Powered by extensive product development. Switzerland. Acknowledged as a key innovator in the industry. backed by state-of-the-art production facilities and supported by a vast marketing network. JAQUAR has installed the world's most advanced plant and machinery sourced from global leaders. JAQUAR has carved out a special niche for itself as the India's largest manufacturer and exporter of bath fittings. This uncompromising focus on quality has been internationally recognized . Boeing. 3 . We did not conduct any primary research for the report.TERM PAPER-LICENSING JAQUAR METHODOLOGY The report is originated from secondary data source. and the world-class products that emerge from it enable JAQUAR to entrench itself in qualityconscious markets like UK. and the knowledge derived from this endeavor is channeled into a steady stream of innovation that seeks to give its customers the very best in terms of range. AT&T.JAQUAR has been awarded the prestigious Fulham Geissler American Award for Quality received by the likes of Apple.

quality is an obsession. delighting customers and creating brand equity that is the envy of the entire industry. And this applies equally to all spheres of activity . since they have been awarded Superbrand status. came to India to kick off the search for Indian brands which could be added to its global list of the best and the biggest. marketing. France. Italy. which is known as the Superbrand Council. which has a presence in 17 countries. In the long-run it's all about building lasting relationships with all associates. Australia. and constant evolution and growth are ways of life. Superbrands India’s high-power jury. Hong Kong. Their brand JAQUAR is now in the elite company of Nike. R&D. Spain and Singapore. amongst others. 4 .technology. and AC Nielsen ORG-MARG chairman Titoo Ahluwalia — to name a few. In JAQUAR. Five months ago. Superbrands Organization is an independent international arbiter of brands. Coca Cola. Denmark. originally set up in London a decade ago. Considered to be the Oscars of branding. Jaquar have a reason to be elated. Recently Jaquar brand has been declared “Super Brand”. Marcel Knobil. Pepsi and Levi’s. financial management… and every other function in JAQUAR'S ambit. but now has a presence in 17 countries including the United States. JWT India CEO Mike Khanna.TERM PAPER-LICENSING JAQUAR JAQUAR believe in an ongoing pursuit of excellence at every level. the chairperson of Superbrands Organization. includes eminent figures from the world of Indian branding — ITC chairman YC Deveshwar.

To Inform:   Telling the upper middles and uppers about Jaquar Informing them of premium price of Jaquar 5 . market positioning and marketing mix. scanned most of the conventional and non-conventional and selected some media considering important. we have set some advertising objectives. The four goal elements for Jaquar are:  Target: Upper middle and upper class Dhaka City and other major city-dwellers who can afford to buy premium bath accessories brand. we have formulated monthly and annual plans. Mostly Chittagong and Sylhet.December 2007) Now we are going to set advertising objectives in the light of advertising goals from three aspects: I.TERM PAPER-LICENSING JAQUAR MARKETING STRATEGY  Advertising Plan: An advertising plan has been formulated to support Jaquar. After selecting media. • Setting Advertising objectives: The advertising objectives of Jaquar have been incorporated according to the prior decisions on the target market. related criteria.  Communication Objectives: The ability to notice the emergence of Jaquar Bath accessories as a premium priced bath accessories   Desired Change: 15% of the total bath accessories market Time Horizon: Three year (January 2005. First.

International Trade Fair etc. Priyajan etc. Top-ofthe-class magazines like Shaily. We will also engage in sponsoring highly popular magazine shows in different TV channels. we will sponsor fairs like World Habitat Day Fair. The Courier.TERM PAPER-LICENSING JAQUAR  Explaining available services of Jaquar building the grand class image of Jaquar II. 6 .  Among the non-conventional media. Also. we have resolved as follows:  Conventional media like TV – N TV and Channel I will be our media for advertisement. will be our regular media for advertisements. We will advertise in The Daily Star and Daily Prothom Alo in the introductory stage of Jaquar. We will eliminate ATN Bangla and ATN World as media as these channels are rarely watched by the upper section of the society. To Persuade:   Building brand preference for Jaquar Encouraging switching to Jaquar from Red Label or other premium class Persuading customers to purchase Jaquar at once bath accessories  III. we will go for sponsoring and giving ads in the prestigious social events and programs like golf tournament or Dhaka Club Dinner Party. To Remind:    Reminding the customers about the need for Jaquar in the new millennium Keeping Jaquar in their minds all through the year Maintaining its top-of-mind awareness • Selected Media For Jaquar: Considering the above criteria of justifies the conventional and non-conventional media as advertising media for Jaquar.

Regularly getting information about the effectiveness of the advertisement in the various media and giving required feedback and making changes in the advertisement decisions. Annual Plan:   Giving regular ads in the prestigious magazines.  Giving advertisements in the TV channels as well as the front page of The Daily Star and Daily Prothom Alo to announce the arrival of Jaquar in the first week of January 2000. top class magazine in January and March 2000. Monthly Plan:  Giving special advertisements in the Eid Copy of two leading. 7 . These are: a.TERM PAPER-LICENSING JAQUAR • Annual & Monthly Advertising Plan: We have formulated monthly and annual advertisement plans for Jaquar. b.

Statistical Yearbook. five years lower secondary.Oct).26° 39' north. 16% Hindu.Jun). most places receive more than 1. 1994). (BD) Latitude: 20° 34' . km Bounded by India from the north. Paris. Summer (Mar .TERM PAPER-LICENSING JAQUAR HISTORY AND CULTURE For our project we have chosen to franchise Jaquar in Bangladesh. In the following table is a quick overview of Bangladesh in brief. with temperatures ranging between 33 deg and 36 deg C (91 deg F and 96 deg F). January is the coolest month of the year. Literacy Rate: The literacy rate is optimistically reported as 35. Monsoon (Jul . Christian. with temperatures averaging near 26 deg C (78 d F).92° 41' east. Min 8 degree Celsius. Schools based on British system: five years primary.) Nearly 83% Muslim. with a hot and rainy summer and a pronounced dry season in the cooler months. and April the warmest month. and tribal religions.3 of the population over 15 years old. Main seasons: Winter (Nov . Longitude: 88° 00' .Feb).km.000 sq. Master plan 777 sq. and areas near 8 OFFICIAL NAME LOCATION AREA BOUNDARY LANGUAGE CAPITAL RELIGION EDUCATION CLIMATE . The People's Republic Of Bangladesh. Bangla [Bengali] 2nd Language: English Dhaka (Present area 414 sq. km. 47% male and 22% female (Source: UNESCO. 144. east and west and by the Bay of Bengal and Burma from the south. and two years higher secondary. The climate is one of the wettest in the world. less than 1% Buddhist. Temp : Max 34 degree Celsius.525 mm (60 in) of rain a year. Bangladesh has a tropical monsoon-type climate.

) lowest 10%: 3. cement.$1.) cotton textiles.3% (2003 est.575 billion (2000 est. sugar 4% (2003 est.) 5. Sarees are the common dress for womenfolk.080 mm (200 in).7% services: 49.REAL GROWTH RATE GDP .) 35. 80% of the people live in rural areas and 60% of the people depend on agriculture for their livelihood. jute. tea processing.9% highest 10%: 28.) 5.9 billion $370 POPULATION OTHER FACTS SEA PORTS CURRENCY GOVERNMENT AREA GDP GDP .4 billion (2003) $1. garments.00 = tk. light engineering.) purchasing power parity . Rice and fish are common diet. paper newsprint.) $17.3% (2003 est.TERM PAPER-LICENSING JAQUAR the hills receive 5. chemical fertilizer. Total estimated population 143 million.) $47. Chittagong and Mongla.6% (FY95/96 est. 55.$258.8 billion (2003 est.) agriculture: 24% industry: 26.6% (1995-96 est.00) [in 2001] Constitutional Parliamentary Democracy 130. Taka (US $1. Lungis and vests are the usual attire for men in the rural areas as opposed to shirts and trousers in the urban areas.900 (2003 est.3% (2002 est.PER CAPITA GDP .COMPOSITION BY SECTOR POPULATION BELOW POVERTY LINE HOUSEHOLD INCOME OR CONSUMPTION BY PERCENTAGE SHARE INFLATION RATE (CONSUMER PRICES) LABOR FORCE UNEMPLOYMENT RATE INDUSTRIES INDUSTRIAL PRODUCTION GROWTH RATE DEBT – EXTERNAL ECONOMIC AID – RECIPIENT GNP SIZE (1999) GNP PER CAPITA 9 .1 million 40% (includes underemployment) (2002 est.) 64. Most rain falls during the monsoon (JuneSeptember) and little during the dry season (November-February).170 SQ KM purchasing power parity .

1% 1985-86 3.3% 1983-84 2. Before 1980s there had been only one or two standard quality local brands.7% 1994-95 9.1% 1995-96 9. The market of bath accessories has expanded outside the country as well in the recent years. Before that period.8% 1987-88 3.1% 1986-87 3.9% 1992-93 6. Sharif Brand is also planning for exporting their brand to abroad.2% 1990-91 4. The growth trend is in terms of sales. The quality brand Gloria is being exported to Morocco and Russia. Table: Growth of Bath Accessories in Bangladesh (1982 – 1998) Year Growth Rate 1982-83 2.8% 1984-85 3. as observed by the respondents of the survey. The bath accessories market got its boost in the late 80s with the boom of the real estate industry. the industry has several standard quality producers of bath accessories in Bangladesh. But now in the beginning of the 21 st century.4%. Thus the bath accessories market is growing as day’s progress. The export of such brand can also be an area of future growth.1% 1993-94 6.5%. there is lack of premium quality local brand of bath accessories in Bangladesh. the bath accessories market was growing at a rate of 3.3% Source: Bangladesh Bureau of Statistics 10 .3% 1996-97 8.9% 1989-90 4. The growth trend is quite encouraging in terms of quality brands as well.5% 1991-92 4.9% 1988-89 3. This indicates the growth of the bath accessories in the last few years.TERM PAPER-LICENSING JAQUAR PRODUCT MARKET The bath accessories market in Bangladesh is growing at an average yearly rate of around 8.9% 1997-98 8. But.

holds the theory. The theory is also called Porter Diamond Model. This table depicts the growing pattern of the bath accessories market in Bangladesh. cited as determinants of national competitive edge through innovation and improvement. structure and rivalry. the only way to sustain a competitive advantage is to constantly upgrade it. Related and supporting industries. The determinants of the Porter diamond model are started as follows: 1.TERM PAPER-LICENSING JAQUAR The above table shows the growth rate of the bath accessories market in Bangladesh in the last 16 years.before someone else does. The theory advances four interrelated attributes of a nation. Competitors will eventually overtake any company that stops innovating and improving. Firm strategy. and Rivalry 11 . Demand conditions 3. the growth rate in 1997-98 was 8. Hence.3% while it was much lower in the early 80s. Factor conditions 2. In order to maintain competitive advantage our product must adopt a global approach to strategy. • Why do we think that our product is globally competitive? A nation’s competitiveness depends on the capacity of its industry to innovate and upgrade. it needs to sustain it by relentless improvement. and 4. Structure. Government Firm Strategy. and often must endeavor to make its own existing advantage obsolete. Once a firm achieves competitive advantage through innovation. moving toward more sophisticated approaches. As it can be observed.

So there is a big demand for branded bathroom accessories in our country. Also if we can give the branded foreign item with competitive price with the local industry we can be able to capture the market easily. Because we have the availability of needed skilled labor or the condition of pertinent infrastructure elements. Related and Supporting Industries: Related and supporting industry means the presence or absence in the nation supplier industries and related industries that are internationally competitive. For our product factor conditions are very much intensive.skilled labor. Demand conditions are very helpful for our product which is Jaquar bath accessories .because we have a trend in our country to build own house or own flat. and where demand pressures companies toward innovation and to become more sophisticated than foreign rivals. Demand conditions: Demand conditions refer to the home market demand in a country for a firm’s products or services. Home demand is conducive to international competitiveness when such demand gives internationally competing. They deliver the most cost 12 .TERM PAPER-LICENSING JAQUAR Factor Condition Demand Condition Related and Supporting Industries Chance Determinants of National Competitive Advantage Factor conditions: According to the standard economic theory. factors of the production. local companies a clearer picture of emerging buyer needs. natural resources. And the customers are very much choosy about the bathroom fittings. and infrastructure. capital.will determine the flow of trade. land. Internationally competitive home based suppliers create advantages in down stream industries in several ways.

A home based related industries increases the likelihood that companies will embrace new skills. Strategic planning is the process of evaluating the enterprise’s environment and its internal strengths. Every company should have strategic planning for general direction and specific guidance in carrying out their activities. these enterprises would have great difficulty in planning. This predisposition helps determine the specific decisions the firm will implement. Without a strategic plan.and short-range objectives. as well as how domestic rivalry is conducted. They are as follows:  Ethnocentric predisposition  Polycentric predisposition  Regiocentric predisposition  Geocentric predisposition Our company will be fallen in polycentric predisposition because a polycentric predisposition will tailor its strategic plan to meet the needs of a local demand. Then attention will be 13 . Before examining the strategic planning process. structure and rivalry: Firm strategy. we must realize that a company has strategic predispositions toward doing things in a particular way. organized and managed. Firm strategy. early. and evaluating operations. rapid and sometimes preferential way. The basic mission of a polycentric is to be accepted bye the local market and to blend into the country. and then implementing a plan of action for attaining these goals. next identifying long.TERM PAPER-LICENSING JAQUAR effective inputs in an efficient. For our company we have to formulate the strategy. This typically begins with consideration of the external arena since the MNE will first be interested in opportunities that can be exploited. implementing. Strategy formulation is the process of evaluating the enterprise’s environment and its internal strengths. There are four such predispositions. and it also provides a source of entrance who will bring a noble approach to competing We have a very good industry in the ceramic sector also we have the availability of the raw materials which is essential for producing high quality bath accessories. structure and rivalry mean those conditions in a country that govern or influence how companies are created.

The foreign brands are not made in the traditional ‘hand molding’ process. COMPETITIVE ANALYSIS To illustrate the comparison of Jaquar with its competitors. It has been found that many of the local bath accessories manufacturers use less number and mount of chemical substances as those are quite expensive and to be imported from England and some other countries.TERM PAPER-LICENSING JAQUAR directed to the internal environment and the resources the organization has available. Such use of state-of-the-art technology enables the foreign brands holding superior quality in terms of finishing of the product. Moreover. For instance. According to this theory. The degree of difference in the quality of the bath accessories between the local and foreign brands is quite big. to take advantage of these opportunities. • Quality Comparison between local and foreign products Among all the bath accessories brands available in Bangladesh the foreign brands hold better quality than that of the local ones. Grohe uses a separate packet for each bib cock it produces. 14 . rather modern ‘injection molding’ process is used in the production of the bath accessories. the rate and quantity of the use of different chemicals in the production process differ among the foreign and local brands. The quality of the packaging materials also differs in this case. we have an excellent opportunity to produce the internationally high quality bath accessories. the local S Brand packs eight bib cocks in the same packet. in the following chapters we will use Bib-cock as an example. The quality of the packaging of the bath accessories of the foreign brands is also superior than the local brands. or can develop. All of the conditions and determinants of national competitive advantage are favorable for doing this business. Grohe of Germany is perceived to be the best among the foreign brands. while.

If it is local than they simply perceive its quality as lower than that of the foreign one. Raj Metal has got diversity in terms of colored bath accessories. Now comes the question of what aspect of bath accessories actually has greater impact of the buying behavior of these diversified groups of people. But. it has been observed by the retailers and also the end users that the quality of Raj Metal is not impressive. Sharif is of the best quality.TERM PAPER-LICENSING JAQUAR Among the local brands. Other brands like S Brand and Nazma Metal are also holding comparatively better quality. But. Each of the retailers argued that whenever they display any good quality or better products to the consumer the first question they face is whether the brand is local of foreign. • Consumer Preferences among Local & Foreign Brands It is the trend in Bangladesh that the consumers love anything that is foreign. Another interesting aspect is that the consumers have prejudices against Indian product. Though Indian brands are doing well in Middle East and Europe. With this perception among customers it is very difficult to introduce high valued local product in the market. recently. Thus the choice of bath accessories is quite diversified and has got a lot of dimensions. these Indian brands are yet to overcome this perceptual negativity of Bangladeshi customers. • Customer Sensitivity towards Quality and Price: The market of the bath accessories comprises customers from lower middle class to the uppermost class. The lower middle class of Bangladeshi people are more sensitive to the prices of bath accessories than the quality of those products while buying items for home use. They care for the prices as they have limitations in the money to be spent for  15 . Gloria has come up and is racing beside Sharif to challenge its superiority in terms of quality. Gloria differ from other local brands in the way that the finishing of Gloria is better and this brand has got diversity in its product line. Other local brands fall in the category of medium and low quality products. It is the ‘old horse’ in this business in Bangladesh and still holding its lead in terms of quality.

Hardly the contractors go for foreign brands and they go for foreign     16 . The middle class of Bangladesh market are in somewhat gray area in the case of preferring bath accessories brands either depending on price or quality. It is found from the survey that some portion of the upper middles are being clinched by the comparatively new brand Gloria in the recent years. It is found from the survey that a sizable amount of this market actually buy bath accessories from outside Bangladesh individually. Very few of the middles go for foreign brands like Grohe or Ifo spending two or three times more. Thus. the low end of the market in Bangladesh usually look for the cheapest or cheaper brands of bath accessories. These bodies buy in the formal procedure of through tender and usually the contractors buy products of local origin. This section of the customers is more sensitive to quality than price of the bath accessories. The middle class tries to find out the ‘best’ quality bath accessories at a price they can afford to spend. The upper middle class of the society prefer Sharif Brand the most due to its quality. Nazma or S Brand or even Gloria. That is why. The upper class of Bangladesh market usually go for buying foreign brands of products as they are quite sensitive to quality. This market consists of the Government and other semi-government and autonomous bodies. durability and other quality attributes of the bath accessories.TERM PAPER-LICENSING JAQUAR their bath accessories. quality of materials used. Few of the customers of this class care for what price they rather than what utility they get from the bath accessories. private companies and enterprises. The customers of this section also look for foreign brads at times if they find the quality has more advantage than price of those foreign brands. They hardly pick products from the local market. There is a big portion of the bath accessories market which is the industrial market. most of them usually go for standard brands like Sharif. They are less sensitive to the color. total outlook.

250 and 750 to attract the customers who want to spent a little more for a better quality product. But in the case of the real estate companies serving the higher end of the market. 17 . Sweden-made Grohe costs Tk. 250. So. Among the foreign brands. The real estate companies that build flats for middle class and higher middle class usually use Sharif Brand or buy better quality products from neighboring countries. We should consider the above costs related to the setting up. In case of the real estate companies. 340 for the retailers who will sell the product to its customers at a price of Tk. Due to the grandiose image of Jaquar and its top-of-the-class quality and higher production cost. The highest prices of locally produced conceal bib cost is charged by the Nazma Metal which is Tk. 108 which is 31% profit in the percentage terms. • Price of Jaquar Conceal Bib Cock: The pricing decision of the Jaquar bib cock is important. production and distribution of the conceal bib cock. foreign brands like Grohe are preferred most often. the price should be Tk. licensing fee to the Mother Company and VAT is calculated as Tk. according to the respondents of the survey. .TERM PAPER-LICENSING JAQUAR one if the quality of the bath accessories is emphasized more by the contracting body. the project is proving to be a money-making venture as such high profit turnover can be rightly expected. selling and distribution cost. 425 having a profit of 20%. the sensitivity to quality is more than price in almost all case. 750 for each conceal bib cock. The estimated profit per unit by subtracting the production cost. Thus. their quality and status level as perceived by the customers. We also should seriously take into account the prices of other brands available in the market. The price of the Jaquar conceal bib cock should be placed in between the price continuum of Tk. we can find that the sensitivity of the customers of bath accessories towards price and quality differ due to several related factors.

 Big domestic demand. we can conclude that the licensing of Jaquar Bath Accessories for production in Bangladesh can be a very timely and profitable approach towards better customer service and profit maximization by the licensing firm. we can say that introduction of Jaquar in the Bangladeshi bath accessories market can serve the customers’ existing need for a posh-looking. etc. which are related to our business. It is very important for a company to know the past.  We are going to offer almost same price for the product with high quality and brand name. There are many strength. financial operation.  Banks willing to invest almost 60%of the total investment. So. good quality bath accessories brand at a reasonably higher price. Strength is the most important thing for any company for any kind of operation like managerial operation. present and the future situation.  Cheaper labor for recruiting in our company. Having such 31% in the conceal bib cocks can be increased by producing other kinds of bath accessories like sink cock or pillar cocks.. SWOT ANALYSIS SWOT analysis means analyzing the strength and weakness of the product in the local market.  Sophisticated buyer. It will determine the success of the product or how much it will compete with the local product.  Fewer foreign and brand competitors. 18 .TERM PAPER-LICENSING JAQUAR So.  We have good quality in contrast of the local product. The strengths of our business are as follows:  Less government restrictions.

The basic needs.  Our economic infrastructure is not well designed. We have find out our weakness and then solve the disadvantages for making profit and expand our market shares. we know that our competitors are FUWANG. SALZER. financial condition. which are already doing their business well. We should also respect and analysis their market strategy and gather all the information from the market for our market operation. We have to welcome their cooperation and cooperate with them very honestly. political and legal forces. Any business. socio-cultural forces and competitive environment are also helpful for doing this business. Opportunities: An opportunity gives a business new life.  Disturbing political situation. SHARIF METAL. Weakness is also important thing for operating and to take the future plans for our company. The fewer weaknesses in our company are as follows: . Also government will help us because of huge demand of our potential customer for giving them the high quality product with cheaper price and service Threats: According to market strategy. which does not have any opportunity that will not suitable or profitable for the investors.  There are other competitors. MASTER ENG. NAZMA METAL. MIRPUR. ARISTON. Also we must remember that any wrong step in the market will cause a disaster for our product. RAJ METAL etc. 19 .  We have many opportunities to advertise our business and product through different Medias. We have to handle all the competitors very carefully so that they will not take any step of our weakness.TERM PAPER-LICENSING JAQUAR  As our it is a developing country so contraction works are made in every where. Although we have weaknesses but we have great opportunities to do this kind of business. We have to behave with them very friendly so that we can also get some good behavior from them.

But the end users of bath accessories who want to spend a ‘bit’ more in exchange of a set of posh-looking. Although This absence of a standard quality. as found from the survey. 250 and Tk. 800 to 900. from discountedpriced products to premium-priced products.TERM PAPER-LICENSING JAQUAR In conclusion. posh-looking brand of bath accessories is discouraging. 20 . and to make profit from the business. 130 to 250. It has been found that there exists a lack in the variety of bath accessories in terms of price. it actually opens up the choice of introducing that kind of brand in the Bangladeshi bath accessories market. the price of locally produced conceal bib cocks ranges from Tk. as there is no intermediary brand between local low or standard quality brands and the high quality foreign brands in Bangladeshi market. INTERNATION LOGISTICS The bath accessories market in Bangladesh. we can say that Porter Diamond Model and SWOT analysis is very essential for our JAQUAR bath room fittings. from frequently-seen nickel bath accessories to grandiose deep-blue basin fittings. We have to apply those model and analysis for expend our market shares. quality and outlook. while the price of foreign brands like Grohe is Tk. For example. the standard foreign brand like Swedish Ifo stands much higher than the best quality local brand like Sharif Metal. 800. The difference in the outlook of the bath accessories is also striking. there exists no other brand of bibcocks. expend our services. quality products would never be able to pick that set from the existing bath accessories market. belongs to a lot of discrepancies and encouraging degree of differentiation that pave the way to some potentialities in investing in this particular business. In between Tk. In terms of quality. The findings of the survey conducted reveal the fact that the true end users of the bath accessories have the demand for an array of products – from subsistence quality to the top-of-the-class quality.

Thus. There is definitely a demand for the above-mentioned kind of product in Bangladesh. • A study on Jaquar’s prospect in Bangladesh Jaquar Bath Accessories. Moreover. we have opted for the third option and in the following part. The first option of introducing a new product is subject to a huge cost of research and development in the area of bath accessories that may later prove to be unsuccessful or too ambitious. medium priced bath accessories in Bangladesh. First.TERM PAPER-LICENSING JAQUAR Now the ultimate question of supplying this kind of brand in the market comes at front. Some cool deep-blue or brilliant black basin cocks rimmed with golden knobs win the heart of the people who like to have an aristocrat touch in their bathrooms. the potentiality of licensing of Indian brand Jaquar to produce in Bangladesh and its projected prospects are discussed. The second option of importing is also eliminated as importing is not a longterm solution of the need for a quality. we can license any of these brands. Encouraging from Jaquar’s success in India. poshlooking brands like Jaquar or Mark is available at a slightly higher price. it has been observed that big portions of the end users of bath accessories in Bangladesh have prejudice against Indian products. Second. is worth mentioning in terms of its high quality. an Indian bath accessories maker. Bangladesh’s neighboring 21 . produce bath accessories in Bangladesh and market those by our own. The size of the market is thus encouraging apart from the coming demand from the potential future end users. we can import the bath accessories from neighboring India or Pakistan where good-quality. we have two options at hand. In the question of supplying this kind of brand in the Bangladeshi market. attractive design and affordable price for the upper middle class and upper class of the customers. Second. we can produce an elegant brand by our own.

we have taken one of the bath accessories – bib cock. all these will require an amount of Tk. Bib cock is largely used in the basin. Because. The cost of licensing is a continual one. usually. Raja Metal is not found often in the market. the licensing company has to pay 18% of the total sales to the mother company. a Bangladeshi company has recently introduced colorful bath accessories in Bangladesh in the brand name of ‘Raja Metal’. construction of the production building and the warehouse. a. converter. Now. For the ease of analysis and understanding. the one time payment is $ 35 000 (Tk. mixer machine.TERM PAPER-LICENSING JAQUAR country. we will discuss the total cost of manufacturing a conceal bib cock – from licensing to distribution and sale. Raja Metal shows that the introduction of something ‘cool’ with top class quality and grandeur can be proved to be moneymaking for an entrepreneur. b. the licensing company has to give a certain percentage of its profit to the mother company for using the brand name. 22 . Now. Failure to stand apart from its other Bangladeshi counterparts. Cost of Setting the Production Plant: The cost of setting the production plant will include several costs. the licensing company has to make the mother company a one-time payment for the licensing. Some of the machines may be imported from India if it is asked by the mother company. generator. Moreover. In the case of Jaquar. we will take a deeper look into the analysis of whether it is feasible and worth trying to license Jaquar Bath Accessories and produce locally a top quality brand. The cost of purchasing a land. 1750 000 app. But. the cost of purchasing the lathe machine and injection molding machine and other machines like galvanizing machine.12 million to setup the production plant. From the first of year of production of bath accessories.). due to the lack of the touch of quality and delicacy of being in the premium section of the market. Cost of Licensing: The first step to produce Jaquar Bath Accessories in Bangladesh is to get the license for producing this brand.

are used. According to our calculation. the per unit Manufacturing cost for producing a good quality. In the production process.TERM PAPER-LICENSING JAQUAR c. Beside this main element of production. different colors and 23 . The brass that is going to be used is the scrap brass. Cost of Production: Now. sand etc. which costs Tk. several chemicals like Chromium.) Electroplating Color and powder Total Manufacturing Cost Manufacturing Overhead (like utilities etc. sand and some other heat-related materials are used to help the final output look good and gracious. apart from the initial setup cost. Nickel Salt etc.) Direct Labor Cost Total Cost of Production 22 94 Associated cost per unit (in Tk.) 27 16 10 13 68 6 *All costs are calculated taking the market prices of items in November 1999. To color the bath accessories. UK. molasses. colorful Jaquar conceal bib cock will be as follows*: Items Manufacturing Cost: Brass Production Accessories (like molasses. 70 per kg and bought from Chittagong. the manufacturing cost for producing conceal bib cock should be considered as well to help in setting the price of the product. These chemicals are all imported from William Canning Company Ltd.

The retailers of the Jaquar conceal bib cocks will be given an attractive 20% commission so that they feel motivated to sell Jaquar products. posh-looking brand like Jaquar can serve 24 . VAT is 15% on the sale of the bath accessories. Moreover. The introduction of a new high quality. the companies have to pay industrial tax at a high rate as well. The cost of these elements and procedures are mentioned above. So.TERM PAPER-LICENSING JAQUAR powders are used. Taxation: Taxes are imputed in the bath accessories production and sale. taxation is seemingly quite high in the bath accessories businesses in Bangladesh. about 85 skilled and semi skilled labors are required. Cost of Distribution: The licensing company of Jaquar can set up their own show rooms – one at Nawabgonj and another in the Green Super Market where the two big bath accessories markets are situated. 1800 to 6000 according to their skill and experience. Labor cost is substantial in this industry especially in such a technology-based industry. Their wages vary from Tk. To run a factory having 20 machines. 0. d. CONCLUSION The bath accessories market of Bangladesh holds a very prosperous prospect in the near future. e. the set up cost of these showrooms are estimated to be Tk. The chemicals imported are under the tax net. These costs are included in the production cost calculation.1 million. Electroplating is an important part of the production. If these showrooms are rented.

TERM PAPER-LICENSING JAQUAR the existing demand for a good brand at a slightly higher price. But some direct Government intervention and support is required to flourish this sector. The Government of Bangladesh should take immediate step to revise the taxation policy related to production of bath accessories. RECOMMENDATION 1. The steps related to the taxation of the taxation of the bath accessories. Some recommendations related to bath accessories industry are made in the following stanza for the development of this sector in Bangladesh. Although this sector is not performing as better as it did in a couple of years ago. The customer section of the bath accessories should become more aware of the quality and price aspect of the bath accessories. the bath accessories market is increasing at a yearly rate of about 12%. The introduction phase may take more than a year. The bath accessories industry is having a growth of about 100% in the last decade mainly due to the boom in the real estate industry. The Government is yet to encourage the bath accessories sector in the recent years. the import of the raw materials required for the production of the bath accessories etc are crucial in this regard. even then its better to have a better quality brand rather than having some at a much higher price. It has been found that the customers are biased somewhat blindfold for the foreign brands. The Government should decrease 25 .

Morocco. international trade facilities and barriers. taking local entrepreneurs to foreign buyers through government sponsorship etc. The Government can promote Bangladeshi bath accessories in various foreign countries by taking part in various international fairs. Pakistan etc. 6. The VAT of 15% in the bath accessories is somewhat discouraging. The Government should decrease the VAT in the selling price of the bath accessories. EPB. Tax holiday should be given to the bath accessories industry for 2 years so that more entrepreneurs get motivated to invest in this sector. Such move will encourage the local bath accessories producers to decrease the cost of production and thus profit more. The Government should facilitate the local bath accessories manufacturers by availing them with easier loan facilities. Ministry of Foreign Affairs and other Government and Semi-Government organizations should come forward to provide required knowledge about making business ties with foreign counterparts. Ministry of Industry. 4. Increased financing will enable the existing manufacturers to expand their present capacity and on the other hand. the new entrepreneurs will invest more in this sector. The Government can provide technical knowledge in the educational and technical institutions regarding bath accessories production and marketing of such 26 . 2. managing foreign buyers or other business partners etc. India. The tax for the export-oriented bath accessories industry should be lower to zero or near zero figure to encourage export in other countries like Russia. This will enable the producers of the bath accessories to decrease the price of the bath accessories so that the bath accessories market widens. Such moves will be directly contributing to boost local entrepreneurs to produce better quality bath accessories and making business links between local and foreign companies. 5. Such assistance will be very beneficial and money making for both the bath accessories entrepreneurs and the organizations. 3.TERM PAPER-LICENSING JAQUAR the tax in the import of raw materials for the production of bath accessories. The Government.

Hodgetts. REFERENCES • Rugman.TERM PAPER-LICENSING JAQUAR product so that Bangladesh can have adequate supply of skilled labor and future entrepreneurs in this particular sector. International Business.. 27 . and Richard M. We are hopeful that the bath accessories industry in Bangladesh can become a money-fetching sector both locally and internationally in near future and will continue to grow to meet the demand of the country and across the borders. Alan M.

http://www.bbsgov.indexmundi.jaquar.htm 28 .html • Country Profile [Available Online] .http://www.com/ Bangladesh – Economy profile [Available Online] http://www.TERM PAPER-LICENSING JAQUAR • • • • • Porter.L.org/ Hill. The Competitive advantage Theory.com/bangladesh/economy_profile.un. Michael E.http://www. Bangladesh Bureau of Statistics [Available Online] . Charles W.int/bangladesh/gen/country. International Business. Jaquar [Available Online] .