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

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

TERM PAPER-LICENSING JAQUAR MARKETING STRATEGY  Advertising Plan: An advertising plan has been formulated to support Jaquar.December 2007) Now we are going to set advertising objectives in the light of advertising goals from three aspects: I. related criteria. After selecting media.  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. • Setting Advertising objectives: The advertising objectives of Jaquar have been incorporated according to the prior decisions on the target market. scanned most of the conventional and non-conventional and selected some media considering important. market positioning and marketing mix. we have formulated monthly and annual plans. Mostly Chittagong and Sylhet. 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. First. we have set some advertising objectives. To Inform:   Telling the upper middles and uppers about Jaquar Informing them of premium price of Jaquar 5 .

We will eliminate ATN Bangla and ATN World as media as these channels are rarely watched by the upper section of the society. The Courier.  Among the non-conventional media. Top-ofthe-class magazines like Shaily. will be our regular media for advertisements. Priyajan etc. International Trade Fair etc. we will go for sponsoring and giving ads in the prestigious social events and programs like golf tournament or Dhaka Club Dinner Party. We will advertise in The Daily Star and Daily Prothom Alo in the introductory stage of Jaquar.TERM PAPER-LICENSING JAQUAR  Explaining available services of Jaquar building the grand class image of Jaquar II. 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. 6 . We will also engage in sponsoring highly popular magazine shows in different TV channels. we will sponsor fairs like World Habitat Day Fair. we have resolved as follows:  Conventional media like TV – N TV and Channel I will be our media for advertisement. Also. 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.

b.TERM PAPER-LICENSING JAQUAR • Annual & Monthly Advertising Plan: We have formulated monthly and annual advertisement plans for Jaquar. top class magazine in January and March 2000. Monthly Plan:  Giving special advertisements in the Eid Copy of two leading. 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. 7 . These are: a. Regularly getting information about the effectiveness of the advertisement in the various media and giving required feedback and making changes in the advertisement decisions.

Bangla [Bengali] 2nd Language: English Dhaka (Present area 414 sq.TERM PAPER-LICENSING JAQUAR HISTORY AND CULTURE For our project we have chosen to franchise Jaquar in Bangladesh. Christian. with a hot and rainy summer and a pronounced dry season in the cooler months. In the following table is a quick overview of Bangladesh in brief. and areas near 8 OFFICIAL NAME LOCATION AREA BOUNDARY LANGUAGE CAPITAL RELIGION EDUCATION CLIMATE . 1994). less than 1% Buddhist.Jun). Summer (Mar .3 of the population over 15 years old. km Bounded by India from the north. Literacy Rate: The literacy rate is optimistically reported as 35.26° 39' north. five years lower secondary. Statistical Yearbook. The People's Republic Of Bangladesh. 47% male and 22% female (Source: UNESCO. Bangladesh has a tropical monsoon-type climate. and April the warmest month.Oct). Longitude: 88° 00' . and two years higher secondary. with temperatures ranging between 33 deg and 36 deg C (91 deg F and 96 deg F). km. 16% Hindu. Paris. most places receive more than 1. and tribal religions. Master plan 777 sq. Schools based on British system: five years primary. January is the coolest month of the year. The climate is one of the wettest in the world. Temp : Max 34 degree Celsius.92° 41' east. Min 8 degree Celsius. Main seasons: Winter (Nov .km.525 mm (60 in) of rain a year.000 sq. (BD) Latitude: 20° 34' . with temperatures averaging near 26 deg C (78 d F). east and west and by the Bay of Bengal and Burma from the south. Monsoon (Jul .Feb).) Nearly 83% Muslim. 144.

paper newsprint. Most rain falls during the monsoon (JuneSeptember) and little during the dry season (November-February). Sarees are the common dress for womenfolk.1 million 40% (includes underemployment) (2002 est.) 5.$258.TERM PAPER-LICENSING JAQUAR the hills receive 5. cement.170 SQ KM purchasing power parity . Total estimated population 143 million.00) [in 2001] Constitutional Parliamentary Democracy 130.8 billion (2003 est.$1.) 35.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 .00 = tk. jute. Chittagong and Mongla.3% (2003 est.REAL GROWTH RATE GDP .900 (2003 est. Taka (US $1.) cotton textiles. tea processing.) agriculture: 24% industry: 26.4 billion (2003) $1.6% (FY95/96 est. 80% of the people live in rural areas and 60% of the people depend on agriculture for their livelihood.3% (2002 est.) 5.080 mm (200 in).) purchasing power parity . garments.9 billion $370 POPULATION OTHER FACTS SEA PORTS CURRENCY GOVERNMENT AREA GDP GDP .) 64. Rice and fish are common diet. chemical fertilizer. sugar 4% (2003 est.9% highest 10%: 28. Lungis and vests are the usual attire for men in the rural areas as opposed to shirts and trousers in the urban areas.) lowest 10%: 3.) $17.6% (1995-96 est. light engineering.575 billion (2000 est.PER CAPITA GDP .7% services: 49. 55.) $47.3% (2003 est.

the bath accessories market was growing at a rate of 3.9% 1992-93 6.5% 1991-92 4.4%.3% Source: Bangladesh Bureau of Statistics 10 . The export of such brand can also be an area of future growth. Before 1980s there had been only one or two standard quality local brands.2% 1990-91 4. there is lack of premium quality local brand of bath accessories in Bangladesh.1% 1993-94 6. Before that period.9% 1997-98 8. The growth trend is quite encouraging in terms of quality brands as well. Sharif Brand is also planning for exporting their brand to abroad.3% 1983-84 2.1% 1985-86 3.TERM PAPER-LICENSING JAQUAR PRODUCT MARKET The bath accessories market in Bangladesh is growing at an average yearly rate of around 8. as observed by the respondents of the survey.3% 1996-97 8. But now in the beginning of the 21 st century.7% 1994-95 9. Thus the bath accessories market is growing as day’s progress. the industry has several standard quality producers of bath accessories in Bangladesh.9% 1988-89 3. The quality brand Gloria is being exported to Morocco and Russia.5%. But.1% 1986-87 3.8% 1987-88 3.1% 1995-96 9.9% 1989-90 4. The bath accessories market got its boost in the late 80s with the boom of the real estate industry. The market of bath accessories has expanded outside the country as well in the recent years. The growth trend is in terms of sales.8% 1984-85 3. Table: Growth of Bath Accessories in Bangladesh (1982 – 1998) Year Growth Rate 1982-83 2. This indicates the growth of the bath accessories in the last few years.

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

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. land. and where demand pressures companies toward innovation and to become more sophisticated than foreign rivals. Demand conditions are very helpful for our product which is Jaquar bath accessories . 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. So there is a big demand for branded bathroom accessories in our country. Home demand is conducive to international competitiveness when such demand gives internationally competing. natural resources. And the customers are very much choosy about the bathroom fittings. Demand conditions: Demand conditions refer to the home market demand in a country for a firm’s products or services. Internationally competitive home based suppliers create advantages in down stream industries in several ways.skilled labor. Because we have the availability of needed skilled labor or the condition of pertinent infrastructure elements. 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. For our product factor conditions are very much intensive. factors of the production. capital. and infrastructure.because we have a trend in our country to build own house or own flat. local companies a clearer picture of emerging buyer needs.will determine the flow of trade.

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. Without a strategic plan. structure and rivalry: Firm strategy. next identifying long. we must realize that a company has strategic predispositions toward doing things in a particular way.TERM PAPER-LICENSING JAQUAR effective inputs in an efficient. A home based related industries increases the likelihood that companies will embrace new skills. organized and managed. these enterprises would have great difficulty in planning. This typically begins with consideration of the external arena since the MNE will first be interested in opportunities that can be exploited. and then implementing a plan of action for attaining these goals. Then attention will be 13 . For our company we have to formulate the strategy. Every company should have strategic planning for general direction and specific guidance in carrying out their activities. There are four such predispositions. rapid and sometimes preferential way. early. Strategy formulation is the process of evaluating the enterprise’s environment and its internal strengths. structure and rivalry mean those conditions in a country that govern or influence how companies are created. Strategic planning is the process of evaluating the enterprise’s environment and its internal strengths. Firm strategy.and short-range objectives. The basic mission of a polycentric is to be accepted bye the local market and to blend into the country. This predisposition helps determine the specific decisions the firm will implement. Before examining the strategic planning process. and evaluating operations. as well as how domestic rivalry is conducted. implementing. 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.

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

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

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

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

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

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

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

it has been observed that big portions of the end users of bath accessories in Bangladesh have prejudice against Indian products. 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. poshlooking brands like Jaquar or Mark is available at a slightly higher price. we have opted for the third option and in the following part. In the question of supplying this kind of brand in the Bangladeshi market. First. we can produce an elegant brand by our own. Second. There is definitely a demand for the above-mentioned kind of product in Bangladesh. we have two options at hand. 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. Bangladesh’s neighboring 21 . we can license any of these brands. Second. we can import the bath accessories from neighboring India or Pakistan where good-quality. the potentiality of licensing of Indian brand Jaquar to produce in Bangladesh and its projected prospects are discussed. is worth mentioning in terms of its high quality.TERM PAPER-LICENSING JAQUAR Now the ultimate question of supplying this kind of brand in the market comes at front. an Indian bath accessories maker. The size of the market is thus encouraging apart from the coming demand from the potential future end users. The second option of importing is also eliminated as importing is not a longterm solution of the need for a quality. Encouraging from Jaquar’s success in India. produce bath accessories in Bangladesh and market those by our own. Moreover. Thus. • A study on Jaquar’s prospect in Bangladesh Jaquar Bath Accessories. attractive design and affordable price for the upper middle class and upper class of the customers.

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

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

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

The customer section of the bath accessories should become more aware of the quality and price aspect of the bath accessories. The steps related to the taxation of the taxation of the bath accessories. The Government is yet to encourage the bath accessories sector in the recent years. 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. the import of the raw materials required for the production of the bath accessories etc are crucial in this regard. the bath accessories market is increasing at a yearly rate of about 12%. The Government should decrease 25 . It has been found that the customers are biased somewhat blindfold for the foreign brands. 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. RECOMMENDATION 1.TERM PAPER-LICENSING JAQUAR the existing demand for a good brand at a slightly higher price. The introduction phase may take more than a year. 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. even then its better to have a better quality brand rather than having some at a much higher price.

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

International Business. and Richard M. REFERENCES • Rugman.. Alan M. 27 .TERM PAPER-LICENSING JAQUAR product so that Bangladesh can have adequate supply of skilled labor and future entrepreneurs in this particular sector. Hodgetts. 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.

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

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