Marketing Plan for Jute Bags

Course name: Fundamentals of Marketing

Course Code: ALD-1205

Submitted To:
Md. Ashraf Harun
Assistant Professor
Adjunct Faculty
Bangladesh University of Professionals (BUP)

Submitted By:
Mir Mohd Shams Uddin (18221010)
Ishtiak Hossain (18221032)
Shafayat Rahgir (18221044)
Meer Mostafa Shabab (18221060)
Zarifa Haq Miti (18221062)

Executive Summary:

Team Maverick 0
Contents

1) Executive Summary ...............................................................................................2

2) Situation Analysis ..................................................................................................3
3) Market Opportunities and Issues ...........................................................................4
4) Objectives ..............................................................................................................5
5) Marketing strategy .................................................................................................6
6) Target Markets .......................................................................................................6
7) Positioning .............................................................................................................7
8) Marketing Mix .......................................................................................................7
9) Review and Control ...............................................................................................8
10) Contingency Plan .................................................................................................9

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1) Executive Summary
"Rochdale Biz Bangladesh" is a jute diversified product manufacturer in Bangladesh. They are
also one of the leading and fastest growing eco-friendly products manufacturer and supplier of
diversified jute and cotton products, primarily jute bags. Their current customer base includes
both local and international companies. Rochdale Biz aims to innovate their products while
ensuring the supply chain is ethical and sustainable.
The high demand for biodegradable fiber across the world creates a fresh comeback for
the jute sector as people are now moving towards eco-friendly products to replace synthetics.
Jute product manufacturers in Bangladesh are producing diversified jute products. However, due
to lack of marketing facilities, entrepreneurs like Rochdale Biz are facing problems to promote
their product. We plan to design a marketing plan for Rochdale Biz to promote jute bags while
focusing on four main agendas:
 Identifying the local market opportunities
 Identifying the target market
 Identifying promotional and/or advertising opportunities
 Marketing budget

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2: Situation Analysis
We have analyzed the situation using the 4C framework, i.e. Customer, Competitors, Company,
Context.

2.1: Customers
Currently Rochdale Biz primarily supplies jute bags to large organizations, for example
businesses and universities, for use in seminars and meetings. Some of their current local
customer base consists of University of Dhaka, Islamic University of Technology, Bangladesh
National Parliament, Save the Children, Asiatic Marketing Communication Limited to name a
few.
Rochdale Biz also export jute bags to foreign countries. Main international buyers of their
jute bags include the USA, UK, Italy, Germany and Spain.

2.2: Competitors
Despite once holding the title of the largest producer of jute and jute products, Bangladesh has,
unfortunately, lost that title to India recently. India produces about 1.968 million tonnes of jute a
year, and in comparison, Bangladesh produces about 1.349 million tonnes. A primary reason for
this is India’s advancements in the technological field and introduction of better, modern jute
cultivation methods.
In Bangladesh, 25 out of the 97 jute spinning mills had to be closed down, the machines
used in these jute mills are quite antiquated (some dating back to almost 50 years!), and many of
the plants have no means of dyeing and laminating which are crucial to producing diversified
products if the country wishes to penetrate the international market.
A silver lining still does exist in the fact that most of India’s jute products are consumed
domestically, leaving Bangladesh with about 70% of the global market share for jute exports.

2.3: Company
Rochdale Biz was founded in 2009 by Rtd. Major Zahir Uddin, Engineer Md. Mahbub Alam and
Kazi Ashraful Hoque when they identified an opportunity to provide a practical solution to
companies and consumers who wanted an ecological alternative to plastic bags.
The company employs about 30 workers (15 permanent and 15 on a contract basis), of
which 20 are female and the rest are male. They produce a variety of jute products that include
jute bags, rugs, mats, trays, curtains, slippers, bottle covers, etc. to name a few.
Of the yearly 200 crore taka worth of jute bags sold in the country, Rochdale Biz also
plays a significant role. The bulk of their jute bag sales take place between November-January as
that is the time when most of the seminars and meetings take place.

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2.4: Context
Here we will provide the “SWOT analysis” for jute bags.
i. Strength: Jute has a low water, carbon and ecological footprint as compared to its closest
alternative, the plastic bag. Jute can be blended with other fibers which include both
synthetic and natural. This makes it possible to make a wide variety of bags from jute.
Also, as it is much more durable than a traditional plastic bag, it can be used to carry
heavier items.
ii. Weakness: To an average consumer, the primary concern when using a bag to carry their
shopping items and accessories is its price. Now the biggest hurdle to jute bags becoming
mainstream is its relatively high price. Due to the prohibitively high price of the raw
materials of jute bags, the production cost of jute bags becomes quite high and, therefore,
it is not possible to sell the bags at a reasonable price. The freight charge of exporting
these jute bags is also high owing to their heavy weight.
iii. Opportunity: As mentioned above, almost 200 crore taka worth of jute bags are sold each
year to businesses and university seminars, meetings and conferences alone. So, if we can
penetrate the local market and make jute bags more mainstream by increasing the market
acceptance of jute bags, there is a scope to make tremendous profit from this industry.
iv. Threats: The inefficiency of the millers, lack of technological developments, poor
management, high price of the raw materials prevents the jute industry from exploring its
complete potential. All these issues combined with the government’s jute export policy,
stopping jute export without any prior notice, is depriving the country from earning much
needed foreign currency. As an example, Bangladesh has the potential to be the main
exporter of jute upholstery to car manufacturers such as Volvo, Mercedes-Benz, Audi and
BMW. But these carmakers are hesitant to completely rely on Bangladesh due to there
being no guarantee that they will receive their product on time, so they rely on jute from
other countries.

3: Market Opportunities and Issues

On account of growing awareness amongst consumers, particularly due to the environmental
factors like surging pollution levels and depletion of the ozone layer, the demand for jute bag is
witnessing a strong growth. In addition to this, government has been undertaking initiatives in
order to ban the use of plastic bags. Moreover, they are levying penalties on shops which are
selling and continuing to provide goods in plastic bags. As demand for plastic bag is inversely
proportional to the demand for jute bag, these initiatives have led to a surge in the demand for
jute bags.
The cost of production of jute bags is really high. Besides the government only provides
subsidy when jute bags are exported. But the government doesn’t give subsidy in the domestic

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market. As a result, the company cannot reduce the price of the bags in the local market. Due to
the higher price the demand of the jute bag in the market decreases.

4: Objectives
Mission
1. Concentrating on jute bag production and building up capacity of our organization.
2. Emphasizing on quality of our bags by ensuring use of best quality raw materials and
techniques.
3. Making products which are labor intensive and are high in demand.

Sales Objectives
Achieve sales of 50000, 80000, 100000 in first, second and third year.
Year Sales Taka

2018 50000 BDT 400000

2019 80000 BDT 640000

2020 100000 BDT 8000000

Financial Objectives
In terms of long-term financial objectives, we have following future orientation that
would assist development and expansion by 2021.
 Increment in profit by 10% annually
 Increment in Earnings Per Share growth annually
 Increasing 25% of ROI (Return on Invested Capital)
 Increasing dividends by 25-35%

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5: Marketing strategy
The company could give away free jute bags to large organizations or MNC’s. They could
request the organizations to display their jute bags. Besides Rochdale Biz could promote their
jute bags in different campaigns through raising awareness among the general people. They
could also encourage people to use jute bags in specific places like retail shops where the use of
poly bags is high.

6: Target Markets
Bangladesh earned $919.58 million by shipment of raw jute and jute goods in FY 2015-16.
Export was $868.53 million in FY 2014-15, of which jute goods earned $757 million, while raw
jute export was $111.53 million. The jute goods consist primarily of hessian, sacking, raw jute
and jute yarn. These are relatively low-price goods and does not earn much foreign currency.
Therefore, high value, diversified jute products such as jute bags, carpets, etc. can increase the
value of jute exports several folds. As stated above, about 200 crore bdt. ($23.862 million) worth
of jute bags are sold to university and company seminars each year. If such a small chunk of the
market can earn this much money through selling jute bags, the possibilities are tremendous if
this can be made mainstream.
As more people around the world are becoming conscious about the consequences of
global warming and the role plastic bags play in that regard, the demand for alternative eco-
friendly products are on the rise. Bangladesh is no exception and the export of jute products has
been slowly on the rise. Rochdale Biz has been planning to penetrate the domestic market with
jute bags that can be used by consumers when they go shopping to carry their goods. The wet
market (kacha bazar) is predominantly reliant on plastic bags as you can get those for free. If the
price of jute bags can be reduced by decreasing the cost of the raw materials, through means of
better management, using more fertile soil to cultivate the crop, developing modern jute
cultivation methods, installing better, modern machines and through government subsidies not
only on export products, jute bags can be distributed to a much larger customer base.
Since a typical jute bag can last upwards of 4 years, it can be used many times over and,
therefore, may be a one-time purchase only. This can be a lucrative deal to a lot of people as
Bangladesh is a “price sensitive” market. If the consumers can be convinced of the durability of
jute bags, then they might be willing to pay the premium for these bags. For the international
market, jute bags’ eco-friendly properties, such as it being biodegradable, can be used to market
the product.

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7: Positioning
We are in business for the customers and therefore it is to us of paramount importance that
customers need and satisfaction has to be dealt with utmost care. This objective is being
nourished by the company since its birth. Since we place reliance on customers’ choice and
desire, our approach is heterogeneous contemplating buyers of different parts of the world. Our
dedicated experts for different buyers help us to maintain a consistent quality. We put in our best
effort to attend our customers need at the least possible time. Innovation & Creativity are the
strongest pillar of our company. We are successful in business because our customers want to be
to successful. They like following of our qualities:
 World’s best quality raw materials
 Highest standard of skill personnel
 Timely delivery
 Client centric approach
 Cost effectiveness
 Customization
 Wide market presence

8: Marketing Mix
i. Product: Rochdale Biz bags are rich in durability and style. These Jute bags are reusable
and therefore environmentally friendly. These bags are also working as incentives for the
customers who are now growing conscious of the global environment. As jute bags are
washable and reusable, they are more sustainable. These bags come in various sizes and
are printable too.
ii. Price: As the price of jute bags is quite high, we can reduce that by procuring jute during
harvesting season and if jute mills get electricity from the national grid. Also, during the
initial stages, we can sell the bags at cost price to the supermarkets/super shops and
slowly increase the profit margin as the sales increase.

iii. Place: At initial stage our main target for distributing jute bags will be supermarkets or
super shops. Then if the customers are convinced of the quality and durability of the jute
bags and if we can gain enough popularity and ensure a substantial customer base, we can
target the local markets and bazars. So, if we need a broad distribution channel so that
jute bags are widely available for all possible customers. For this we need to grow close
and intense relation with the market and offer attractive facilities to gain committed
distributors.

iv. Promotion: Social media, television, newspaper and billboards along highways can be
used to advertise the product. Help from the NGO’s and government organizations can be
sought to promote jute bags in rural areas. The National Jute Fair that takes place on 6th

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 March, the National Jute Day is a suitable time for promoting these jute bags in. Our
ideal time to promote Rochdale Biz jute bags will be during January when the Dhaka
International trade Fair takes place, as then we can reach a huge number of customers by
collaborating with other shops and traders. During the Bangladesh National Jute Fair
2017, the Bangladesh Jute Mills Corporation (BJMC) participated with the aim of
showcasing unique bio-degradable and eco-friendly products that are supplementary of
poly bag. Jute Diversification Promotion Centre (JDPC) and the textiles ministry jointly
organized the fair to draw an attention of domestic entrepreneurs & buyers and foreign
buyers.

9: Review and Control

Rochdale Biz will execute operational reports (daily/monthly/annual) to maximize the return on
their marketing plan. For this, there has to be controls in place to monitor the plan's progress. As
a marketing plan moves along, the controls are constantly analyzed to determine how the plan's
actual performance compares to that of the projections. Any changes that need to be made are
done based on the analysis of marketing controls. These reports will focus on:
 Customer Feedback: Marketing is designed to persuade consumers to purchase a product
or invest in a service. One control put into place in any marketing plan is the monitoring
of customer feedback through polls and surveys. We can reach customers indirectly by
hosting online polls on the Internet that ask specific questions about your latest marketing
plan. In this case, we will set questions based on jute and its biodegradable nature and
also on the demerits of plastic bags. Through this, we will know about the customers’
perspective and understanding of jute bags. Adjust your marketing plan according to the
results of your research.

 Target Market Sales: Sales can be measured in units sold, revenue generated or profit
amount. Each marketing plan sets out to determine the effect of the plan on the target
market. Actual sales in the target market are compared to the marketing plan projections
to see if any changes need to be made. For example, . If sales are down, then further
market research needs to be done to see why the target audience is not responding to the
marketing.

 Budgeting: A marketing budget is a balance between the cost of generating the

advertising materials and the revenue created by the marketing plan. There are several
controls in place that can be used to monitor a marketing budget, including print
advertising expenses, travel expenses for trade shows, the cost of market research studies
and internal personnel costs for the company's marketing department. All of these costs
need to be closely monitored to minimize spending and maximize profitability. By

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 examining expenses, you are able maintain your budget and see exactly where spending
increases come from.

 Market Share: Market share is that percentage of consumer sales dominated by your
product. For example, you may have a product with sales making up 15 percent of all
products in the marketplace. A marketing plan outlines the product's market share before
the plan is in place, and then projects the changes to the marketplace when the plan ends.
For example, the marketing plan may call for an increase in market share from 10 percent
to 15 percent of all products sold. During the plan's timeline, a milestone may be seeing a
three percent increase halfway into the plan. If you do not meet this goal, you need to
analyze why the plan is falling short and how to correct it.

10: Contingency Plan

Considering the SWOT analysis and future prospects of the jute industry, we came forward with
an alternate yet future development project for our jute bags; by further diversifying into Jute
Poly bags. Jute Poly bags are made using jute cellulose that is bio-degradable and Bio-plastic in
nature which is substitute of conventional poly bag. It will play 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. Jute poly bag is an innovative as well as value added
product that helps to gain market share. Economics of scale helps to gain market share through
mass production and minimizing overhead cost to maximize profit. On the other hand,
knowledge on exporting jute diversified product (JDP) in international market will help to
maintain supply chain efficiency and lastly, the available raw materials in production in demand
will also help to gain economies of scale in production and operations and finally to gain market
share. However, this is a long-term prospect of our company as this product is still in the
development stage of production.