Executive Summery

As it is a mandatory part of our course Principles of Marketing (MKT 2301), we were supposed
to prepare this term paper focusing on Definition of Marketing and related issues. The topic
was selected by our honorable course teacher Lecturer Easnin Ara madam. This topic was a nice
one in case of learning.
To prepare this term paper we have visited three renowned organization of the country. First one
is Grameen Phone Limited, second one is British American Tobacco Bangladesh Limited and the
third one is OTOBI. During our visit we got to learn so many new things that will help us in
future we think. So, it is our gratitude to Easnin Ara madam for giving us such opportunity.
In the term paper, we focused on the Marketing Approach of three companies. We have
discussed the issues and factors related with the topic. At the beginning, we have included the
backgrounds of the respective industries and companies which is really important for getting
proper idea about the companies. Some photos were taken by us which are submitted with the
report. We think visualization can add values to the report. Besides, we have discussed some
other issues about the organizations which will help learning.
Some basic information are included in the report, many financial data are also given. Ins and
outs about the companies are discussed also. Factors that work behind decision making are also
discussed. We have gone through the company values and related those with their actions.
End of the discussion, we gave short conclusions to summarize the reports. For the shortage of
time, we have not included some other information. But, we think we have implemented all
things that work.

Grameen Phone
1. A Brief History of Telecom Industry in Bangladesh
Bangladesh, the then territory of British India got very limited introduction of
telecommunication. The Telegraph Act of 1885 was the first legislation on this evolving
technology service. It was further enhanced by the wireless Telegraphy Act, 1933.
Bangladesh Telegraph and Telephone Board Ordinance of 1979 created the constitutional body
for the purpose of efficient management, operation and development of telegraphs and
telephones in Bangladesh.
The BTTB Ordinance of 1979 was further revised in 1995 and the responsibilities of managing
the total telecommunications. BTTB remained as the sole provider of basic telecommunication
services. Then came the era of convergence! Telephony broke the barrier of traditional means of
just voice conversations. Too many elements got part of the platform-mobile, PSTN, data,
internet, imaging, messaging, media, entertaining, banking, advertising etc.
The liberalization of Bangladesh Telecommunications Sector began with small steps in 1989
with the issuance of a license to a private operator for the provision of inter alia cellular mobile
services to complete with the previous monopoly provider of Telecommunications services the
Bangladesh Telegraph and Telephone Board (BTTB). Significant changes in the number of fixed
& mobile services deployed in Bangladesh occurred in the late 1990 and the number of services
in operation has subsequently grown exponentially in the past few years. The initiatives both
from government and public sector have helped to grow this sector.
Bangladesh Telecommunication Regulatory Commission (BTRC) an independent Regulatory
Commission established under the Bangladesh Telecommunication Act, 2001, (Act no18 of
2001) published by the parliament in the Bangladesh Gazette extraordinary in new on April 16,
2001. BTRC started his journey from 31 st January 2002 to conduct the activities of the said act.
With a initiation of its activates, necessary authority, responsibilities and related concern of the
ministry of posts and Telecommunications were vested on to BTRC.[10]
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According to the Telecommunication act, the Commission is assigned with various

responsibilities. Out of those, establishing, operating, regulating, maintaining telecommunication
establishments and providing various telecom services in the country are the major ones.
Besides, fixing charges on the subscribers, ensuring the services for the subscribers and to ensure
peoples right are also tasks of BTRC. The social and economic behavioral pattern of the telecom
service providers is also monitored by the BTRC to ensure that the users are not subjected to
harassment and not indifferent in nature.
As a statutory organization, the Commission has to maintain its official seal and continuity as
provided in Bangladesh Telecommunication Act 2001, Clause 6(9). The law vests the
Commission with such responsibilities as procuring and keeping under possession of movable
and immovable properties, transferring authority, right to execute agreements and accomplishing
other activities within the purview of the telecom law.

2. Beginning of the journey: Grameenphone

The idea of providing universal mobile phone access throughout Bangladesh, including its rural
areas, was originally conceived by Iqbal Quadir who is currently the founder and director of the
Legatum Center for Development and Entrepreneurship at MIT. He was inspired by the Grameen
Bank microcredit model and envisioned a business model where a cell phone can serve as a
source of income. After leaving his job as an investment banker in the United States, Quadir
traveled back to Bangladesh, after meeting and successfully raising money from New York
based investor and philanthropist Joshua Mailman, and worked for three years gaining support
from various organizations including Nobel Peace Prize laureate Muhammad Yunus of Grameen
Bank and the Norwegian telephone company, Telenor. He was finally successful in forming a
consortium with Telenor and Grameen Bank to establish Grameenphone. Quadir remained a
shareholder of Grameenphone until 2004.
Grameenphone received a license for cellular phone operation in Bangladesh from the Ministry
of Posts and Telecommunications on November 28, 1996. Grameenphone started operations on
March 26, 1997, the Independence Day in Bangladesh.
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Grameenphone the leading telecommunications operator of Bangladesh is part of Telenor Group

which has presence in 13 markets across Europe and Asia.
Before Grameenphones inception, the phone was for a selected urbanized few. The cell phone
was a luxury: a flouting accessory for the select elite. The mass could not contemplate mobile
telephony as being part of their lives.
Grameenphone started its journey with the Village Phone program: a pioneering initiative to
empower rural women of Bangladesh. The name Grameenphone translates to Rural phone.
Starting its operations on March 26, 1997, the Independence Day of Bangladesh, Grameenphone
was the first operator to introduce GSM Technology in this country. Grameenphone pioneered
the then breakthrough initiative of mobile to mobile telephony and became the first operator to
cover 99% of the countrys people with network
Since its inception Grameenphone has built the largest cellular network in the country with over
8500 base stations. Presently, nearly 99 percent of the country's population is within the
coverage area of the Grameenphone network. Grameenphone has always been a pioneer in
introducing new products and services in the local telecom market.
Grameenphone was also the first telecommunication operator in Bangladesh to introduce the prepaid service in September 1999. It established the first 24-hour Call Center, introduced valueadded services such as VMS, SMS, fax and data transmission services, international roaming
service, WAP, SMS-based push-pull services, EDGE, personal ring back tone and many other
products and services. In October 2013 the company launched 3G services commercially. The
entire Grameenphone network is 3G/EDGE/GPRS enabled, allowing access to high-speed
Internet and data services from anywhere within the coverage area. There are currently over 7
million 3G/EDGE/GPRS users in the Grameenphone network.
Today, Grameenphone is the leading and largest telecommunications service provider in
Bangladesh with more than 50 million subscribers as of October 14, 2014. [9]

3. Grameenphone in Bangladesh
In Bangladesh, Grameenphone is the leading provider of mobile telecommunication services.
Having started its operations in 1997, Grameenphone now provides voice, data and other value
added services on prepaid and contract bases. Grameenphone has been a pioneer in bringing
innovative mobile-based solutions to Bangladesh. Notable among these is the Health line, a 24
hour medical call centre manned by licensed physicians. Other innovations include Study line, a
call centre-based service providing education related information, Mobicash, for electronic
purchase of train and Lottery Tickets and Bill pay, for paying utility bills through mobile phones
and over 500 community information centers across Bangladesh. These centers bring affordable
Internet access and other information based services to people in rural areas.
As at 31 March 2013, Grameenphone had 41.8 million subscriptions, while the estimated mobile
penetration (SIM cards) and number of inhabitants in Bangladesh were 62% and 163 million,
respectively.
Grameenphone became stock listed in November 2009, with, as at the date of this Base
Prospectus, the largest public offering in Bangladesh. It is listed on both the Dhaka and
Chittagong Stock Exchanges. As at 31 March 2013, Telenor held 55.8% of the shares in
Grameenphone, while Grameen Telecom, the other main shareholder, held 34.2%. The
remaining 10% of the shares were held by general retail and institutional investors. At a glance:
Grameenphone has so far invested more than BDT 24,600 crore to build the network
infrastructure
Grameenphone is one of the largest taxpayers in the country, having contributed more than
BDT 36,500 crore in direct and indirect taxes to the Government Exchequer over the years
There are now more than 1600 GP Service Desks across the country covering nearly all
upazillas of all districts and 94 Grameenphone Centers in all the divisional cities
Grameenphone has about 4400 full and temporary employees

 500,000 people are directly dependent on Grameenphone for their livelihood, working for the
Grameenphone dealers, retailers, scratch card outlets, suppliers, vendors, contractors and others.

4. Network and licenses

Grameenphone holds a 2G mobile cellular license with both GSM 900 MHz and GSM 1800
MHz spectrum which was awarded on 7 August 2012, along with three other mobile operators
licenses, effective from 11 November 2011 for a 15 year period.
The license awarding process of Grameenphones 2G license and associated spectrum was taken
to the High Court given certain ambiguities around the payment mechanism, particularly as to
the treatment of VAT on payments. In its judgment dated 13 February 2012, the High Court
resolved the ambiguity as to the payment of VAT by ordering that Grameenphone will have to
pay 100% of applicable fees due to the Bangladesh Telecommunication Regulatory Commission
(the BTRC), pay an additional 15% as VAT to the National Board of Revenue (NBR) and then
claim a rebate/return of such VAT, thereby restricting Grameenphones total cost to 100% of
applicable fees due to the BTRC. As the NBR has obtained a stay order in respect of VAT
rebates for 2G license fees, Grameenphone has sought further clarification on the VAT
rebate/return mechanism and the issue is pending before the courts for a final verdict.
On 14 February 2013, the BTRC published 3G licensing guidelines which included provision for
4 licenses (to be awarded through auction) and one new market entrant. The base price for the
spectrum auction has been set at USD 20 million per MHz The detailed auction process is not yet
finalized, however the BTRC is planning to conduct the auction process with the help of
consultants. The dates of application submission and auction have been set for 12 June 2013 and
31 July 2013, respectively. Given the legal uncertainty regarding the VAT treatment of 2G
license fees, all MNOs operating in Bangladesh, including Grameenphone, have communicated
to the BTRC and the government of Bangladesh that they will not be able to participate in the
auction for 3G licenses until the VAT rebate uncertainty is resolved. In response, on 16 May
2013 the government reduced the VAT rate applicable to 3G licenses to 7.5% and reduced SIM
tax from BDT 605 to BDT 300. VAT payable on 3G licenses, however, will not be eligible for
6

rebate. These changes were brought into effect by general orders from the NBR. The government
owned mobile operator, Teletalk, is already providing 3G services in selected locations on a pilot
basis (and has been providing such services since October 2012).
The present Grameenphone network is EDGE/GPRS enabled and covers over 99% of the
population and 90% of the geographic location. During the course of 2011, Grameenphone
completed the swapping of its entire network with Huawei equipment, which resulted in the
network being future-ready and significantly more cost efficient.

5. Competition
As at 31 March 2013, Grameenphone had a market share of 41.8%. In addition to
Grameenphone, there are five other mobile operators in Bangladesh. These operators and their
market shares as at 31 March 2013 are: Banglalink (26.0%), Robi (21.4%), Airtel Bangladesh
(7.5%), Citycell (1.5%) and Teletalk (1.8%). Competition among operators is intense and tariff
levels are among the lowest in the world.

6. Regulatory matters
The BTRC was established under the Bangladesh Telecommunication Act 2001 as an
independent regulator. However, as per amendments to the Telecommunication Act 2001 in
2010, certain powers to regulate the telecommunication sector have been transferred to the
Ministry of Post and Telecommunications.
Under previous licensing arrangements, all mobile operators were required to pay to the BTRC
an annual license fee of BDT 50 million, quarterly spectrum charges and 5.5% of revenues.
However, under the new licensing framework, operators will have to pay 6.5% of revenue
(inclusive of 1% on account of a social obligation fund) and revised spectrum charge rates.
Effective from 16 May 2013, the applicable SIM tax was reduced from BDT 605 to BDT 300.
SIM tax has to be paid for the purchase of a SIM, and furthermore handsets have 12% duty

applied at the import stage. However, the applicable VAT on handsets at the trading stage has
been withdrawn with effect from 11 April 2013. Corporate income tax is 45% for mobile service
providers, which reduces to 35% if a company maintains a 10% listing on the countrys
exchanges.
On 14 August 2012, the BTRC amended SIM registration guideline to stop the sale of preactivated SIM cards, such change to be effective from 12 October 2012. Activation of a new
connection can now only be done after proper verification of the subscribers identification
through valid photo identification.
The BTRC has instructed operators to implement a 10 second pulse tariff structure, eliminate call
setup charges and establish a flat tariff for the entire call duration, starting from 15 September
2012. Voice tariff levels are further defined by a tariff circuit set by the BTRC along with
specific directives on promotions.
Domestic interconnection calls are operated through Interconnection Exchange Licensees (ICX),
while international interconnection calls are operated through International Gateway Licensees
(IGW). For each outgoing call, operators will have to pay BDT 0.22 per minute (of which BDT
0.18 is payable to other operators and BDT 0.04 to ICXs), and will receive BDT 0.18 per minute
for each incoming call, irrespective of peak and off-peak hours. Voice tariff levels are defined by
a tariff circuit set by the BTRC along with specific directives on promotions. [11]
Passive network infrastructure sharing is obligatory. As at 31 March 2013, Grameenphone has
signed infrastructure sharing agreements with Banglalink, Robi, Airtel Bangladesh, Augere (a
WIMAX operator) and BIEL (a local ISP) in line with the guidelines.

7. Insight of Grameenphones Marketing Approach

Being the leading telecom company of the country with the largest network that connects 500
million people, Grameenphone is highly consistent with the goal of creating customer value and
maintaining profitable customer relationship. With a simple tagline, Go Beyond, whatever the
marketing team implements will be based on a theme. The Grameenphone Marketing Team
shares the pride of being regarded as the most powerful campaign generator. We just cant forget
about the legendary TVCs of Grameenphone and for the time being, a new dimension is added
by the integrated campaigns like Cholo Bangladesh and 5 Kotir Network. The current theme
of Grammenphones campaign is Internet for all.
Keeping the rapid change in media and communications in mind, Grameenphone marketing team
design their campaigns by targeting two types of media:
1. Electronic and Print Media.
2. Social and Digital Media.
They predict that, after 5 to 10 years from now; the reach of social media will surpass the
conventional media and as a result most of the communications will be social media based. To
get it better, we have attached some of the promotional contents of Grameenphone in this paper.

8. From the Marketers Desk

Marketing is just understanding the customers pulse and reacting to it.

Mashfiq Alam
Executive (Digital and Social Media)
Customer Experience, Commercial
Division;
Grameenphone Limited.

The Grameenphone Marketing Team possesses a clear view towards the customers:
Treat your customers as you want to be treated. [8]
Grameenphone is highly consistent with the goal of creating customer value in the same time
with managing profitable customer relationship.

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9. Strategies
9.1 Corporate Strategy
Corporate strategy is the overall managerial game plan for a company. However, due to limited
scope of this report, the parent company of GP (Telenor) has not been analyzed to find the
corporate strategy. However, from a broad perspective two of GPs corporate strategy has been
included below:
GrameenPhone focuses on the telecommunications services and does not intent to diversify to
other businesses at this moment
GrameenPhone adopts rapid growth strategy, which helped them to capture a huge market
share

9.2 Business Strategy

Business strategy refers to the managerial game plan for a single business. The business level
strategy for GP is:
The company directs its resources for network expansion to cover the entire geography of
Bangladesh
Respond to changes in the rapidly changing telecommunications industry to maintain the
leadership position
Provide superior value-added-service, widest network coverage and product variety in the
market
Focus on the strength of the company to retain the commanding position in the market place.
To maintain the best brand image in the telecommunications industry of Bangladesh

9.3 Functional Level Strategy

Functional strategy refers to the managerial game plan for a particular functional activity. GP
focuses on efficiency, innovation, quality and responsiveness in all its functions. Following are
the strategies of different functions / departments of Grameenphone:
To build and maintain the best network system in the industry through the Technical
Department
To have up-to-date market information, close relationship with the clients and state-of-Of theart distribution network through the Marketing and Sales Department
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 To provide superior customer service through the Customer Relations Division

To support administrative works to provide best services through the Administration
Department.
To ensure efficient recruitment, selection, transfer, promotion, training, and performance
appraisal of employees through the Human Resources Department
To ensure understanding of the financial position, budgetary actions and liquidity situation
through the Finance Department
To effective prepare financial reports and maintain smooth payment systems through the
Account Department
To have state-of-the-art IT backbone to provide the best service through the Information
Technology Department.

9.4 Operating Strategy

Operating strategy refers to manage frontline organizational units within a business. GP has a
number of operating strategy within each function, some of which are illustrated below:
To meet any sort of demand from customers at any time and under any circumstances
To ensure that distribution networks have optimum inventory stock to have 100% on time
delivery rate
To ensure activation of any new connections within 72 hours
To effectively communicate product features and the company as a whole through quality
advertisement campaigns
To ensure adequate handsets are acquired before a new package is launched
To remove any possibilities of network bottlenecks and ensure smooth flow of data through the
network

10. Marketing Performance

The marketing performance of GP has been explained below using the 4Ps of marketing:

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10.1 Products offered

a) Mobile telephony

Grameenphone was the first operator to introduce the pre-paid mobile phone service in
Bangladesh in September 1999. It offers the pre-paid subscription under the name Easy Prepaid
which is currently called "Nishchinto, Amontron, Shohoj, Bondhu, Aapon, Smile, Spondon,
Business Solution prepaid". Besides Nishchinto, Amontron, Shohoj, Bondhu, Aapon, Smile,
Spondon, Business Solution, Grameenphone also offers a youth based connectivity within
Bangladesh named Bondhu Garage. [8]

Grameenphone also offers postpaid mobile service. Xplore Postpaid is the name of its post paid
service. Grameenphone also provides several other packages which can be selected based on the
type of tariff or features like pulse, sms, internet. Detailed information about packages provided
by Grameenphone can be found dialling 121 from your Grameenphone number and can also be
found using the official Grameenphone android app available for free download on Google Play
Store.
b) Other services

Internet: Grameenphone provides internet service in its coverage area. As it has

EDGE/GPRS/3G enabled network, any subscriber can access to internet through this

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network. Grameenphone was the first mobile operator in Bangladesh to offer EDGE and
3G services to its subscribers.

BillPay: A service to enable users to pay their utility bills Electricity/Gas through mobile.

Ekhanei.com: A service (formerly known as CellBaazar) to enable users sell or buy

products through mobile or internet and it is free to use for all Grameenphone customers.

Various other services like Stock Information, Instant Messaging, SMS Based
Alerts/Services, Voice-based Services, Downloads, Music, Cricket Updates, Web SMS,
mobile Backup etc.

10.2 Price
Price is a sensitive issue in mobile industry. As the rivalry is intensifying, price war is making
customers available to different price options to choose from. As discussed earlier, although GP
started of its services with low cost strategy, it has moved on to product differentiation strategy.
GP products are priced relatively higher than the rivals, as they believe that they need a value for
their premium service
10.3 Place
GP currently covers the largest population of the country. As of Dec 06, GP covered 61 districts
and 352 Upazilas, divided under five regions - Dhaka, Chittagong, Sylhet, Khulna and Rajshahi
and has a network of 717 base stations (as of December 2004). In addition, they have 24 hours
customer service center open for all clients and subscribers. GP also has a very well connected
numerous distribution centers throughout the country to sell GP products through the country.

10.4 Promotion
GP performs a number of promotional activities mainly through I customer oriented promotional
techniques' rather than 'trade oriented promotional techniques'. These promotional activities are
discussed below:

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a) Outdoor Advertising
Grameenphone uses outdoor ads like billboards, Shop signs, side light boxes, posters, stickers,
TV commercials etc. they also use mobile billboards like painting buses, taxis etc

b) In Store Media
GP also ads through many shopping stores including different electronics shops through banners,
signs etc.

c) Transit Advertising
GP advertises in platforms, bus terminals etc

d) Event Marketing
GP sponsors various events, including prestigious events like SAARC Women's Association,
Dhaka India Women Association etc. to promote GPs image and reputation. It has also
participated in many cricket events like Asia Cup '00', ICC cricket week and Cricket
Development Program to create foster stronger brand image.

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11. Conclusion
Marketing is the process by which companies create values for customers and build strong
customer relationships in order to capture value from customers in return. On the other hand,
Marketing is just understanding the customers pulse and reacting to it.
Grameenphone widely abbreviated as GP, is the leading telecommunications service provider
in Bangladesh. With more than 50 million subscribers (as of October 2014) Grameenphone is the
largest mobile phone operator in the country. [10] Grameenphone was the first company to
introduce GSM Technology in Bangladesh. It also established the first 24-hour Call Center to
support its subscribers. With the slogan Go Beyond, Grameenphone promises its customers to
bring the best of communication technologies so that they can Go Beyond.
GP being a company to serve 50 million people is creating values for customer and they firmly
believe on the goal of managing profitable customer relationship.

16

British American Tobacco

Marketing in British American Tobacco:

A new definition with a winning strategy

17

1. Prevalence of Tobacco Use in Bangladesh

The three thousand years old history of tobacco started from the time when Christopher
Columbus found it in the Americas in 1492, but ancient temple carvings show tobacco being
smoked in Central America as long ago as 1,000 BC. Arriving in Europe in the late 15th century,
tobacco has divided opinion, sparked controversy and generated substantial revenue through tax.
Not long after it reached Europe, it was being described in terms of ranging from vile custom of
manifold abuses and feast for the fiend to the divine herb and cornucopia of all earthly
pleasure. [1]Facts and statistics prove Bangladesh as one of the largest tobacco consuming
countries in the world, where an estimated 46.3 million adults are users of smoked and/or
smokeless tobacco products. Tobacco consumption leads to more than 57,000 deaths and about
1.2 million cases of tobacco-related illnesses in Bangladesh each year. In 2009, the WHO
conducted the Global Adult Tobacco Survey Bangladesh (GATS Bangladesh) a national study of
adult tobacco use and the overall impact of tobacco control measures in Bangladesh. GATS
Bangladesh (2009) found that 43.3% of adults (aged 15 years and older) use some form of
tobacco, with a higher prevalence of tobacco use among males (58.0%) than females (28.7%). In
Bangladesh, tobacco is consumed in a variety of smoked (e.g., cigarettes, bidis) and smokeless
(e.g., betel quid with tobacco, gul, sada pata, khaini) forms. Estimates from GATS Bangladesh
showed that 23.0% of adults use smoked tobacco, and that 27.2% of adults use smokeless
tobacco. Findings also showed that while the prevalence of smoked tobacco use was much
higher among males (44.7%) than females (1.5%), prevalence of smokeless tobacco use was
similar among males (26.4%) and females (27.9%). Overall, the prevalence of both smoked and
smokeless tobacco use was higher in rural areas than in urban areas.[1]
[2]The ITC Bangladesh Wave 3 Survey, which was conducted in 2011-2012, provides the most
current estimates of adult tobacco use in Bangladesh. The ITC Bangladesh Wave 3 Survey found
that 36.5% of adults (aged 15 years and older) use some form of tobacco, with a higher
prevalence of tobacco use among males (47.4%) than females (25.0%). Findings also showed
that 19.7% and 22.0% of adults use smoked and smokeless tobacco, respectively. Although the
prevalence of smoked tobacco use was much higher among males (37.4%) than females (0.9%),
the gender difference for smokeless tobacco use was not as pronounced (19.6% for males vs.
24.6% for females). The prevalence estimates for exclusive use of a specific tobacco product
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ranged from 1.9% to 16.9% as follows: 1.9% for exclusive bidi use, 10.6% for exclusive
cigarette use, and 16.9% for smokeless only use. In addition, findings shotheyd that 5.1% of
adults are mixed tobacco users (users of both smoked and smokeless tobacco products), and that
1.8% of adults are dual users (smokers of both cigarettes and bidis).[2]

2. Tobacco Price and Tax Policies in Bangladesh

Cigarette Price and Tax Policies

[3]The price of cigarettes in Bangladesh is one of the lowest in the South-East Asia Region,
indicating that tax on cigarettes needs to be higher to raise the price to the average regional level.
Bangladeshs most sold brand of cigarettes (Star Filter Kings) is the third least expensive brand
(in purchasing power parity international dollars) among the WHO region of South-East Asian
countries. As of 2012, the average price per pack of 20 cigarettes was 28 BDT (equivalent to
0.35 USD in 2012 prices) for the lowest-cost brand, and 50 BDT (equivalent to 0.63 USD in
2012 prices) for the most sold brand. The low level of prices suggests the need for increasing
taxes significantly to increase price and reduce demand. The tobacco tax structure in Bangladesh
is very complex. Bangladesh uses a tiered cigarette tax structure that imposes different ad
valorem tax rates known as supplementary duty (SD) based on retail price slabs. In addition,
there is a Value Added tax (VAT) of 15% of the retail price. Between 2009 and 2014, there was
a steady increase in the cigarette price bands for each of the few retail price slabs, but increases
in the SD for each price slab were marginal. It should also be noted that because the ranges of
price bands are not continuous, there are significant price gaps between brands in different price
categories. This gap not only allows smokers to switch to cheaper brands in response to price and
tax increases, but also creates incentives for tax avoidance and evasion among manufacturers
(e.g., positioning brands in the gaps between price slabs, thereby paying lower taxes because the
provision for penalties for selling beyond the maximum price in the slab is not currently being
enforced).

Bidi Price and Tax Policies

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Bidis are inexpensive hand-rolled cigarettes that are popular among the poor in Bangladesh, and
account for 75% by volume of the cigarettes sold in the country. Based on estimates from GATS
Bangladesh, the average price per pack of 25 bidi sticks is 6.2 BDT (equivalent to 0.09 USD in
2009 prices), and price of a single bidi is about one-sixth the price of a cigarette. In Bangladesh,
bidis are taxed at an even lower rate than cigarettes. It is also important to note that bidis are
taxed based on a single tariff value set by the government, which is approximately half the
actual retail price. Bidis are available in packs of 20 sticks or less, but are most commonly sold
in packs of 25 non-filtered bidi sticks in Bangladesh. 15 18 19 between 2008 and 2013, an SD of
20% and a VAT of 15% were applied to a tariff value of 3.1579 BDT per pack of 25 non-filtered
bidi sticks. In 2013-2014, the tariff value per pack of 25 non-filtered bidi sticks was increased to
3.88 BDT. [3]

3. Regulations on Tobacco Industry

[4]Bangladeshs tobacco industry is mainly regulated by the Smoking and Using of Tobacco
products (Control) Act, 2005 and the Smoking and Using of Tobacco Products (Control) Rules,
2006. Amendment of the Smoking and Tobacco Usage (Control) Act was passed in May 2013.
The amendments are:

Wider definition of tobacco products - Apart from Cigarette, Cigar and Biri, now Gul,
Jorda, Khaini also part of tobacco products

Ban on tobacco sale to minors - Retailers cannot sell tobacco product to anyone below 18
years of age

Increased fine for public smoking - Authorized officer can fine Tk. 300 to a smoker for
smoking in a public place, which was previously Tk. 50

Ban on advertising at POS (Point of Sale) - Advertising & promotion of tobacco products
is banned

50% Pictorial Health Warning - 50% Pictorial Health Warning on both sides of the
principle areas (will be in effect after Rules Amendment)

Regulation on descriptor - Light, Mild, Low-tar, Extra, Ultra words as descriptors cannot
be used
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Wider ban on public place smoking -

Current list of public places as per 2013 Amended Law:

1. Educational institutions
2. Government office
3. Semi-government office and offices of autonomous body and private office
4. Libraries
5. Elevators
6. Indoor Work Place
7. Hospitals and clinics
8. Court buildings
9. Airport buildings
10. Sea-port buildings
11. River-port buildings
12. Railway station building
13. Bus-terminal buildings
14. Cinema halls
15. Exhibition centers
16. Theatre halls
17. Shopping buildings
18. Restaurants enclosed by four walls
19. Public toilets
20. Childrens parks
21. Fair or queue of any public transport
22. Any other place commonly used by public

Ban on CSR initiative branding - Company name, sign, trademark & symbol cannot be
used for branding of CSR initiatives.

According to section 5(3) of Amendment of the Smoking and Tobacco Usage (Control) Act,
any person engaged in social activities under Corporate Social Responsibility or in case of

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donation on such activities, shall not use any name, sign, trademark, or symbol of any tobacco
manufacturing company or cause them to be used or shall not encourage other persons to use
those.[4]
4. Market Condition and Market Leaders
[5]According to a research in December 23, 2009, the total smokers in Bangladesh are 20.3
million. Global Adult Tobacco Survey (GATS) and Bangladesh report 2009 mentioned the
number of smokers in Bangladesh more than 15 years are 43.3 percent. The cigarette industry is
growing at a rate of 3.4%. The Biri market which was 70.3% of the total market is declining,
now it is 69%. The smokers are upgrading from biri to low segment of cigarettes. The number of
tobacco user is higher in rural area than urban area. The market share of BATB is around 44% in
the Dhaka Metro. The market leader of the industry is British American Tobacco Bangladesh
Limited (BATB or BATB) where the other companies in the market are:

Dhaka Tobacco Industries Ltd.

Abul Khair Tobacco Company Ltd.

Nasir Tobacco Industries Ltd.

Imperial Tobacco Company Ltd.

Alpha Tobacco Company Ltd.[5]

In this chapter, their approach is to share the information they have gathered about the market
leader of the tobacco industry of Bangladesh; BATB (BATB).

5. Profile of British American Tobacco

British American tobacco is the world's most international tobacco group, with brands sold in
over 180 markets and consistent strategy for delivering shareholder value. While British
American tobacco products pose real risks to health, about a billion adults globally choose to
smoke. British American tobacco work hard to operate responsibly across everything (BAT)
during a century of doing business, they have built a strong international reputation for high
22

quality tobacco brands that meet consumers' diverse preferences. British American tobacco is the
world second largest listed tobacco group by global market share. British American tobacco
business isn't about persuading people to start smoking or to smoke more, but about meeting the
preferences of adult tobacco consumers and differentiating British American tobacco brands
from those of their competitors. The history of Bat cannot be told without the mention of James
Buchanan Duke who can be credited as the founder of BAT. His family owned a tobacco
company with factories in New York and North Carolina as developments occurred in the
tobacco business with smoking in the form of cigarettes becoming popular James Buchanan
Duke decided to expand his family business. By 1890 he had joined with four of the largest
American cigarette manufactures to form the American Tobacco company with himself as the
president. After having strengthened his position in America, he then decided to enter into the
British market. In 1901 duke made an offer to the Liverpool firm of Ogden and eventually
purchased it. John Dane and William Good acre sons of John Player from the Nottingham based
firm. John Player and sons began to worry about the consequences of Duke's interest in the
Britain market. On September 27, 1902 American tobacco and Imperial signed an agreement to
merge together as British American Tobacco Company. BAT's first chairman was James Duke.
This partnership brought together the products they produced. Bat soon began to look for
overseas countries to do business with. These include China, India, Africa and South America.

6. Nature of the Business

British American Tobacco companies produced some 715 billion cigarettes through 49 cigarette
factories in 41 countries. British American Tobacco also makes cigarillos, roll-your-own
tobacco, pipe tobacco and smokeless Swedish style snus. There have some consumer segments international brands, premium, lights and adult smokers. British American Tobacco has four
global drive brands like - Dunhill, Kent, Lucky Strike and Pall Mall are well represented across
these segments.
In Bangladesh, the company manufactures and markets international cigarettes brands likeBenson & Hedges, John Player Gold Leaf and Pall Mall which are complemented, by local
brands such as Capstan, Star, Hollywood, Derby etc. The company also markets different flavors
23

of Benson & Hedges cigarettes in Bangladesh. The company has its Head Office and the cigarette
factory in Dhaka, a Green Leaf Threshing Plant in Kushtia and a number of Leaf and Sales
Offices throughout the country.

7. BRITISH AMERICAN TOBACCO GROUP

The British American Tobacco Group is one of the worlds leading international manufacturers
of cigarettes; marketing its products in almost every country worldwide. It is clear leader in a
competitive and fast moving business. The group consists of four tobacco subsidiaries and they
are:
British American Tobacco Company Limited, Which produces cigarettes in over 45 countries
for domestic and export markets in Europe, Australia, Latin America, Asia and Africa.
Brown & Williamson Tobacco Corporation is the Third largest tobacco company in the US.
British American Tobacco (Germany) GMBH is a leading cigarette company in Germany.
Souza Cruz S.A is the market leader in Brazil and a world leader in tobacco leaf export.

8. BRITISH AMERICAN TOBACCO COMPANY LIMITED

British American Tobacco, the second largest Tobacco Company in the world is also the world's
most global tobacco company. Based in London, UK, it operates in more than 50 countries
with 85,000 employees selling more than 300 brands in more than 180 markets worldwide. Tracing its
heritage back to a joint venture formed by the imperial Tobacco Company of the
United Kingdom and The American Tobacco Company was born on the world stage. Extent of
operation of British American Tobacco Company is given below:

America-Pacific (USA, Japan, South Korea).

24

Asia-Pacific (China, Indo-China, Taiwan, South-East Asia, Australia).

Europe (50 countries including Russia).

Latin America (Central & South America, Mexico, Caribbean).

Africa (More than 50 countries).

MESCA (Middle East, South & Central Asia).

British American Tobacco Company is well positioned in all their regions, providing a
geographical balance that can withstand local or regional market downturns.

9. COMPETITIVE ADVANTAGES

It has a strong and complete portfolio of brands at various price points. The portfolio
includes an unrivalled range of regional and local brands, in addition to their Global Drive Brands
that play a vital role in its success in many markets.
Its broad geographic base means it is well represented in emerging markets, where
margins are lower but volumes and profitability are expected to grow. It is not reliant on high
margin market where volumes are declining faster than the global average.
It is continuing to grow profit through the cost savings potential of its productivity initiatives. As its
savings grow, it is able to invest more in its business.

10. VISION

Achieve Leadership of the Global Tobacco Industry

Vision of British American Tobacco, they can see that BAT seeks to achieves leadership of
the global tobacco industry in order to create long term shareholders value. They define leadership in
both a quantitative and qualitative sense.

25

Quantitatively, BAT seeks volume leadership-among their international competitors and in the
longer term, value leadership. They recognize that it is adult customers who will determine
this and that, therefore, BAT must be customer driven.
Qualitatively, BAT seeks to be recognized as industry leaders and to be the partner of first
choice for government, NGOs investors and potential employee recruits. They will do this
by being a responsible tobacco group with sustainable business.

11. BAT STRATEGY

BAT'S vision is already mentioned in the previous part, which is to Achieve Leadership of the
Global Tobacco Industry. To reach for the vision definitely some strategies should be taken. And
strategy can be succeeding if they can divide the strategies into several small goals. BAT
believes they need to create value for the shareholders, and create that value they have come up
with a global strategy. In the following part are discussed in details with the diagram.

26

Diagram: Vision and strategy of BAT

12. PERFORMANCE AGAINST THE STRATEGY

BAT's Strategy is working across the Group and the key performance figures show that it is
delivering the results.
Growth
Investment and managerial focus remains firmly on four Global Drive Brands (GDBs) and in
2013, Dunhill, Lucky Strike, Pall Mall and Kent collectively grew by 10 percent.
20013 also saw robust growth across broader range of International Brands (IBs), with other IBs
growing by 5 percent for the year.
This growth improved the quality of overall portfolio, and helped support a 3 percent increase in
revenue in 2013.
Productivity
Savings generated by productivity initiatives were delivered ahead of plan. The substantial
efficiencies made in the supply chain, supported by savings through overheads and indirect
programs, are releasing funds for reinvestment in research, product innovation and growth, as
well as being a significant driver of operating profit growth.
Focus on supply chain efficiency has delivered benefits of 177 million in 2013, bringing the
annual savings for the five years of the program up to 551 million.
The overheads and indirect cost reduction program ended its fifth year and delivered savings of
100 million. Since its inception in 2003, annualized savings have reached 455 million,
well above the 400 million target set.
Responsibility
BAT believes that success and responsibility go together and this is the slogan of BAT, A
responsible organization can go the top position, and BAT proved it long before. So being
responsible BAT has the following criterion. Live their Business principles, which explain the way
they expect their businesses to be run in terms of responsibility, actively communicate them
27

to their stakeholders and demonstrate. Act in accordance with their Standards of Business
Conduct, Which express the high standards of business integrity they require from their
employees worldwide, and ensure compliance.

13. BATB: Beginning of the journey

The presence of British American Tobacco in this part of the world can be traced back to 1910.
Beginning the their journey as Imperial Tobacco 103 years ago, the Company set up its first sales
depot at Armanitola in Dhaka.
After the partition of India in 1947, Pakistan Tobacco Company was established in 1949. The
first factory in Bangladesh (the then East Pakistan) was setup in 1949 at Fauzdarhat in
Chittagong. In 1965, the second factory of Pakistan Tobacco Company went into production in
Mohakhali, Dhaka. Thereafter it became Bangladesh Tobacco Company Limited in 1972
immediately after Bangladesh's independence. In 1998, the Company changed its name and
identity to British American Tobacco Bangladesh (BATB) aligning the corporate identity with
other operating companies in the British American Tobacco Group.
BATB is a part of British American Tobacco plc, the world's most international tobacco group,
with brands sold in more than 200 markets around the world.
They make high quality tobacco products for the diverse preferences of consumers, spanning the
business 'from crop to consumer' and they are committed to embedding the principles of
corporate social responsibility Group wide.
14. BATBs shareholders
BATB was among the first companies to be listed on the Dhaka and Chittagong Stock
Exchanges and currently ranked amongst the top 10 companies in terms of market capitalisation.
British American Tobacco Group holds 72.91% of BATBs shares; 12.86% is owned by
Investment Corporation of Bangladesh; Shadharan Bima Corporation, Bangladesh Development
Bank Limited, Government of People's Republic of Bangladesh and a further 14.23% is owned
by other shareholders.
28

15. BATBs Contributions

BATB continues to contribute approximately two-thirds of the revenue derived from the
cigarette industry, wherein 2013-14 fiscal year BATB contributed over BDT 8,436 crore as taxes
to the National Exchequer. The company will continue to support Government proposals that
establish a sustainable level of tax contribution to the national exchequer while ensuring a
sustainable growth for the industry.
16. BATBs core beliefs
At British American Tobacco Bangladesh, they strive to be a responsible company wherever
they operate - that may be to their shareholders, employees, business partners or any other
relevant internal and external stakeholders. To BATB, responsibility is a way of life and that is
why they believe success and responsibility go together.

Our people Our strength: the belief of BATB as an employer

Employing more than 1,500 people directly and approximately 50,000 people indirectly as
farmers, distributors and local suppliers, they take great pride in saying that BATB is one of the
most preferred employers in the country. It is the people, who bring their differences every day
and make BATB a great place to work in.

17. BATBs Business Principles

BATBs statement of Business Principles forms the basis on which they run their business in
terms of responsibility.

The principle of Mutual Benefit

The principle of Mutual Benefit is the basis on which BATB build their relationships with their
stakeholders. They are primarily in business to build long term shareholder value and they
29

believe the best way to do this is to seek to understand and take account of the needs of all of
their stakeholders.
The principle of Responsible Product Stewardship
The principle of Responsible Product Stewardship is the basis on which they meet consumer
demand for a legal product that is a cause of serious diseases. Therefore, their products and
brands should be developed, manufactured and marketed in a responsible manner. They also
aspire to develop tobacco products with critical mass appeal that will, over time, be recognized
by scientific and regulatory authorities as posing substantially reduced risks to health.
The principle of Good Corporate Conduct
The principle of Good Corporate Conduct is the basis on which all their businesses should be
managed. Business success brings with it an obligation for high standards of behavior and
integrity in everything they do and wherever they operate. These standards shall not be
compromised for the sake of results.

18. BRANDS OF BRITISH AMERICAN TOBACCO

BAT recognizes that its business starts with its consumers. It is not about encouraging people to
start smoking or smoke more, but about meeting the preference of adults who have chosen to
be tobacco consumers, and about differentiating the brands from their competitors. In meeting the
preferences of adult consumers around the world, BAT has never believed that `one size fits all'. It's
portfolio of some 300 brands is based on distinct consumer segments that it believes offer the best
opportunities for satisfying preferences and growing business. There are International
brands, premium, lights and adult smokers under 30 (ASU30) - segments that are both profitable and
growing in volume. For example, the premium segment represents about a quarter of global
volumes and around half of global profits.
International Brands of BAT
30

BAT has the several popular brands across the countries. The number of brand is huge, more than 300
brands. Among the international brands there are four Global Drive brands - Dunhill, Kent,
Lucky Strike and Pall Mall. Some of the international brands of BAT are given below:
Kent was introduced in America in 1952 and is now sold in more than 75 countries. It is their
largest premium brand. Annual sales exceeded 63 billion in 2013, up 18 per cent on 2012 and
its sixth consecutive year of double digit growth. Key markets include Russia, Japan, Eastern
Europe and Chile. Kent Nanotek, a superslim king size variant, is sold at a premium to the
main range and accounts for around 10 per cent of Kent's global sales volume.
Dunhill, which celebrated its centenary in 2011, sells in more than 120 countries. Dunhill
offers a range of premium and super premium cigars and cigarettes. 37 billion cigarettes
were sold in 2013, by 7 per cent on 2012. Key markets include Australia, Malaysia, South Korea,
South Africa and Taiwan.
Lucky Strike, launched in 1871, is one of the oldest and most trademarks in the world. It's a
premium brand sold in more than 65 countries. Volumes rose 9 per cent in 2008 to 25 billion
cigarettes. Key markets include Germany, Spain, Japan, France and Argentina.
Pall Mall was introduced in 1899 and is now sold in more than 85 countries. It is their leading
global value-for-money brand. Pall Mall volumes grew 22 per cent in 2008 to 62 billion
cigarettes. Key markets include Germany, Italy, Russia, Uzbekistan and Pakistan.
While the Global Drive Brands remain central to their strategy, they are also increasing the
profile of Vogue and Viceroy.
Vogue is a super-premium brand selling in more than 55 countries. Key markets include Russia,
South Korea, France, Poland and Japan.
Viceroy is sold in more than 40 countries. Introduced in 1936, key markets today include
Romania, Russia, Poland, Uzbekistan, Turkey and Argentina.
Rothmans was launched in 1890 and is now sold in some 60 countries. Key markets include
France, Italy, South Africa, Saudi Arabia, Yemen, Libya and Egypt.

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Kool was introduced in 1933 and is among the world's biggest selling menthol cigarettes. Kool is
sold in some 20 countries and is very popular in Japan, the United States and Latin America.

Picture: International brands of BAT

Benson &Hedges cigarettes were created for the Prince of Wales in 1873. British American
Tobacco acquired the rights to the brand in a large number ofoverseas markets in 1956. Today, BAT
sells Benson & Hedges in more than 50 countries outside the European Union, including
Nigeria, Australia, New Zealand, Bangladesh and Malaysia.
State Express 555 was launched in 1895 and is now sold in more than 20 countries. The
brand is particularly popular with smokers in China, Taiwan, Cambodia and Vietnam.
Peter Stuyvesant was first launched in South Africa in 1954 and then internationally in
1957. Now sold in around 30 countries, Peter Stuyvesant is popular in South Africa, France, The
Netherlands, Greece, and Malaysia. Snus is currently being test-marketed under the Peter Stuyvesant brand
by BAT in South Africa.

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19. BRANDS IN BANGLADESH

In Bangladesh, British American Tobacco Bangladesh is the market leader in tobacco sector.
They have almost 47% market share. However, in Bangladesh BATB have only few brands.
Among them Benson & Hedges, John Player Gold Leaf, Pall Mall, Star, Capstan and Victory
are some of the most popular brands. So in Bangladesh BATB has been only Pall Mall
from the Global Drive Brands. The brands discussed below:

B en s on &H e d g e s
Benson & Hedges cigarettes were initially made for the Prince of Wales back in 1873. British
American Tobacco acquired the rights of the brandin a large number of overseas markets in
1956. Today, British American Tobacco Group Companies sell Benson & Hedges in more
than 80 countries in the world. In Bangladesh Benson & Hedges was launched in 1997 and
it is dominating the premium segment of cigarettes in Bangladesh. B & H has a value of Tk.10/stick
can be found in two different flavors, special filters and lights.
John Player Gold Leaf
John Player Gold Leaf is one of the oldest brands of BATB in Bangladesh that was launched in 1980 and
one of the highest selling brands in the Medium Segment in the market. JPGL is mostly found in the
Saudi Arabia, Pakistan and Sri Lanka. JPGL has a value of Tk 6/ stick.
Pall Mall
Pall Mall is an International Brand operating in more than 60 countries in the world. Pall Mall is the First
Global Drive Brand launched in Bangladesh in March 2006. Even though Pall Mall is a
premium brand worldwide but it is under Medium Segment in Bangladesh. Pall Mall has a price
of Tk. 6/ stick. And can be found in three flavors, Full Flavor, Lights and Menthol. Pall Mall
made record sales in terms of volume in 2013 that was initially maintained by brand of BATB.

33

Star
Star, a local Brand launched 40 years ago still generates leading sales in terms of volume. Star operates in
the Low Segment and has a price of Tk. 3/ stick. Star occupies the leadership in the low segment
outside Dhaka, where it has tremendous popularity among smokers. BATB launches colorful new
packets for star during the spring Season in Bangladesh to represent. the true colors of Bangladesh.

Hollywood
Hollywood a newly introduced cigarette in the Bangladeshi market was launched in 2007. Viceroy
operates in the Very Low Segment with a price of Tk. 2/stick .Hollywood was introduced to
Bangladeshi market considering the demand for a low price cigarette by the lower income
group smokers who have represent a majority of market share and to provide the consumers with
the smooth taste of premium cigarettes.

20. Marketing
From the Marketer s desk,
Marketing is basically building a bridge between the organization and the customers
-M.M. Shahriar,
Territory Officer (Narshingdi -2);
British American Tobacco
Bangladesh Co. Ltd.

From the definition above, we can have a clear view about the fact that; BATB is consistent with
the goal of creating customer value and managing profitable customer relationship. As a tobacco
products manufacturer, BATB has strict limitations on mass marketing. So, BATB emphasizes
on trade marketing which will be discussed here.

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21. Trade Marketing

Mission: To reach thei r target con su mers in the most effi cient and
effective way by b ecoming the bench mark supp lier to the t rade within
st rategi c channels in every market place where they do business.
The Trade Marketing and Distribution department identifies the areas in which best practice
must be achieved to enable markets to meet the Trade Marketing and Distribution objectives,
which are:

Create an efficient entry barrier against international competition.

Improve their benchmark supplier status to the trade pioneer among all FMCG
companies.

Trade Marketing & Distribution Department has the responsibility to reach the ultimate
consumers through trade, e.g. Retailer. The emphasis is not only on what volume is being sold
to the retailers (Sell-In), but also on the volume sold out to consumers (Sell-Out). The mission
of TM&D is to reach the target consumers in the most efficient and effective manner by
becoming the Benchmark Supplier to the trade within strategic channels in every market
where they do business.
The Marketing Department and the Production Department activities are highly correlated.
According to the needs of the Marketing Department, Production Department carries out the
cigarette manufacturing. The marketing Department forecasts the sales volume of the different
brand cigarettes for the coming business year and based on this; prepare a marketing plan known
as the Sales Operational Plan (SOP). According to the Plan, Marketing Department
communicates the brand wise sales target for each month to the Production Department. Based
on the SOP, Production Department sets its production schedule. The inventories of cigarettes
are also evaluated at this stage to find out the actual output to be produced.
The British American Tobacco Bangladesh has a well-defined mission for the marketing and
distribution of products, which is to reach the target consumer in the most efficient manner by
becoming the benchmark supplier to the trade within the strategic channels in every market
where the company operates. A well-organized trade marketing team is working continuously to
35

make this mission successful; furthermore the whole country has been divided into six regions to
perform the marketing activities efficiently. Moreover the regions are further spitted into 11
areas. Right now there are 6 regional managers, 12 area managers and 42 territory officers
working under the Head of Trade Marketing. At present, there are 62 distributors involved with
BATB who are responsible to make the products of the company available throughout the
country.

22. Distribution Channel

The Company sells their product to the distributors; in turn the distributors sell to the retailers
and cash & carry as well. Cash &

carry are nothing but wholesalers. Cash & Carry are needed

because at times the retailers may not have adequate funds to buy the required quantity.
Regional Go-down: There are five regional go downs throughout the country to fill every
regional demand just at the time of need, and to overcome various uncertainties related to
physical distribution of products, every regional go-down is directly controlled by separate
Regional Manager to face the regional physical distribution challenge.
Carrying Contractor: They are the party engaged in the physical movement of cigarettes from
head office go down to regional office go down. Normally they are the truck owners who take all
the risk and responsibilities of physical movement of goods between two warehouses.
Distribution Warehouse: All distributors have their own warehouse, where cigarette can be
kept safely while not degrading its product quality. Distributors buy the cigarette from BATB
and from that point ownership and all responsibilities of the products go under the distributors.
Internal Carrying Agent: They are like carrying agent but carry small volume of products.
Normally they are local truck owners. They carry products from, regional go downs to distributor

36

warehouses. They also take all the responsibilities and risk engaged in physical movement of
products.
Opening Stock at Distributors Office: Apart from the warehouse, every distributor also
maintains another stock at their office. This stock is for maintaining any change in market
demand instantly. Dealers sometimes sell cigarette through their counters to face special
situation.
Delivery Van: All the delivery vans are owned by the dealers to assure the supply of cigarette on
the door of wholesalers, cash & carries and retailers just according to their demand. There are
two types of delivery vans. One is Scooter van and another is Rickshaw van.
Cash & Carry: They are businessmen who sell cigarette directly to consumers and at the same
time they sell cigarette to the retailers.
Retailers: Retailers are at the end of the physical distribution system of cigarette Selling
products directly to the consumer.
Distributors: The financial standing of the distributors, their reputation in the local region, and
prior related business experience are some of the key criteria examined when a distributor is
selected. The regional manager, supply chain manager and head of trade marketing prior to
making a decision check the evaluation forms and field recommendations. After a distributor is
selected, they issue a letter of intent that specifies certain requirements of the company. After
these requirements are satisfactorily fulfilled, a formal letter of appointment is issued.
Distributors buy fixed volumes of cigarettes from BATB at a set price and resell to the retailers.
The company closely monitors their activities and performance and ensures them to operate in
the market at the highest standard. Distributors follow a work routine set by the company,
generating paper work, and reports as required. Distributors are assigned a certain geographic
region within which they sell their cigarettes. Different routes are assigned within the region that
helps to sell their stock. Vehicles owned and operated by the distributors are responsible for
carrying stock along these routes and selling it to the retailers.

37

23. Retail Outlet Classification

The British American Tobacco Bangladesh has classified all the retail outlets into three
categories:
Convenience Outlet: All shops where consumers generally go without any purchasing intention
fall in this category. The consumers like to buy product on impulse from this sort of outlets.
These outlets generally maintain a limited product range and do not offer flexibility in prices.
Grocery: These are the outlets where consumers visit on a regular basis with a purchasing
intention. They generally make a list of items before they will visit these sorts of outlets. These
outlets typically offer variety in terms of product range and also flexibility in prices.
HoReCa: Shops like hotels, restaurants, and cafes are considered in this category. The prime
characteristic of a HoReCa is that the shops must have a seating arrangement. It is assumed that
consumers visit those shops with the intention to spend some time. These outlets range from
small roadside cafes with seating arrangements to luxurious restaurants of fast food outlets.

38

24. Conclusion
Marketing is the activity, set of institutions, and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners, and society
at large. On the other hand it can be said that Marketing is an activity which basically helps
building a bridge between the organization and the customers.
British American Tobacco Bangladesh is one of the largest multinational companies in the
country and has been operating for over 100 years. They have over 1,000 employees and they
take pride in being one of the preferred employers in Bangladesh. Responsibility - to their
shareholders, employees, business partners, customers and any other stakeholders - is at the core
of their business and that is why they believe success and responsibility go together.

39

OTOBI Ltd

1. Overview of Furniture Market in Bangladesh

Furniture is one of the most rapidly growing sectors in Bangladesh. In the last 15 years the
industry has experienced a significant progress in the shifting from a cottage-based to a
manufacturing industry. In early 90's the furniture industry in Bangladesh transformed from
cottage based industry to mechanized mass production oriented industries. Since then furniture
businesses began to grow with modern machinery, innovative designs and use of diverse
materials. The main varieties of furniture are produced from wood, processed wood, melamine
board, Medium Density Fiber Board (MDF), particleboard, steel etc. At present Bangladesh is
producing wide variety of international standard and quality furniture. People in Bangladesh are
now starting to choose local furniture instead of foreign furniture.

2. Branded Furniture Manufacturers In Bangladesh

The branded furniture manufacturers hold only approximately 18% market share of the furniture
industry of Bangladesh. Out of the 35 large firms, 8 can be identified as major industry players
which are:

OTOBI Ltd. (OTOBI)

Partex Furniture Industries Ltd. (Partex)

Hatil Complex Ltd. (Hatil)

Navana Furniture Ltd. (Navana)

Nadia Furniture Ltd. (Nadia)

Athenas Furniture & Home Dcor (Athenas)

Akhtar Furnishers (Akhtar)

Brothers Furniture Ltd. (Brothers).

40

3. Company Overview
OTOBI is one of the leading furniture companies of Bangladesh. It has crossed a long journey to
reach this empire. The Journey begun in 1975when Nitun Kundu the great artist and the father of
Modern Furniture Industry in Bangladesh founded OTOBI. In the past 38 years, OTOBI has
established itself as the market leader in all categories of branded furniture manufacturing and
distribution with more than one third of the branded furniture market share in Bangladesh. [12]
The business philosophy that runs throughout every layer of the organization is to be
innovators through the introduction of creative and innovative ideas and concepts in business.
OTOBI is considered as one of the royal furniture manufacturing and distribution companies of
our country. It is also the pioneer in manufacturing modern furniture, laminated board furniture,
knock-down furniture concept, establishment of furniture stores, furniture dealership concept,
furniture retailing experience in the outlets etc. OTOBI is always striving to set the benchmark.
If the company is saturated in one segment or category, it moves into new segments or categories
and continues the cycle which is the passion and driving philosophy throughout the company.
Therefore it has almost created a benchmark for itself and left the other manufacturing and
distributing furniture companies very behind. It has also gathered great opportunities of
development as it has got the customers satisfaction and their trust on OTOBI products. All
ranges of people can afford their product. They not only gather satisfaction of higher class people
it also accumulate the middle class buyers. As a result, the difference of profit margin between
the 2nd place company and OTOBI is about 50%. [13]

4. Customer Insight
The collection, deployment, and interpretation of information that allows OTOBI to acquire,
develop, and retain its customers can be outlined by the below customer insight which is
the intersection between the interests of customers and the features of OTOBI brand:
Ultimate Furniture and Space Solution- long lasting products with smart design, excellent
finishing, and quality service at reasonable price.

41

5. Target Market

OTOBI basically manufactures premium quality of furniture and for that reason, OTOBI cant
target consumers from all income level. Quality conscious people who can spend a handsome
amount of money for furniture are the potential customers of OTOBI. Besides wealthy
individuals, OTOBI has some corporate clients who contribute to a major portion of OTOBIs
annual revenue. So, as a company; OTOBI always think about satisfying all segments of
customers who are reachable.

6. From the Marketers Desk

Marketing is understanding the customers need, meeting the market demand and
managing the cycle which ends up with customer satisfaction and customer retention.
-Sabbir Nasir,
Chief Executive Officer,
OTOBI.

42

7. Where do OTOBI Stand Today

OTOBI Limited At a Glance

No. of Own Retail Outlets

18

No. of Dealers

288

Three Factories:
No. of state of the art Factories

I. Mirpur Factory for Chair & Sofa

ii. Shyampur Factory for MS & LB product
iii. Savar Factory for Wooden product

Export Market

India (Mostly in Calcutta)

43

8. Business Objective

8.1 Marketing Strategy

OTOBI will offer the finest furniture products in the market with focus on speed, innovation, and
time to market. The continuous drive for new product and service solution, the market leadership
will be chased with leading edge product and service offer to customer.
On the Customer Intimacy doctrine; some emphasis will always be there to enhance the range
of customer served with better products with better price. With customer demand driven product
customization, and long-term customer loyalty strategy, the projected growth of the
existing business will be sustained.

8.2 Branding Strategy

To people seeking furniture solution, OTOBI is the leading furniture manufacturer and
retailer that is most reliable for its sophisticated technological knowhow and sustained service
reputation. [12]
OTOBI holds the strong position as the leading furniture brand in Bangladesh. The brand has
occupied a firm position in the minds of both household and corporate/office customers by its
long sustained quality promise and design innovations.

8.3 Brand Identity Prism: OTOBI

Physique
Organized well serviced Retail
infrastructure with groovy portfolios;

Relationship
Friendly, updated furniture solution
provider and space counselor

Reflection
Trendy, Fast,
Successful, Sophisticated

Personality
Spirited, Sincere,
Sophisticated, Competent

Values
Novelty, Excellence,
Trust, Beauty

Self-Image
Responsible, Thriving, Up-to-date
Techno-Adopter, One-Stop Furniture Solution

44

9. Product Range of OTOBI

OTOBIs product categories form a wide range which includes office, household, and hospital
furniture, specialized furniture such as kitchen cabinets, built-in cabinets, and workstations.
OTOBI also handles interior-designing projects for both home and office and vends home
appliances such as air conditioners. OTOBI has now introduced a wide range of lifestyle and
interior decorations products which add a complimentary vibe in the furniture outlets. As a
branded furniture manufacturer, OTOBI has the largest number of categories of furniture
and supplementary products and services compared to its competitors.
OTOBI is engaged in manufacturing different types of furniture and supplementary items. In
order to categorize its products, OTOBI internally uses 11 (eleven) master categories which are:

Laminated Board: Laminated board is a multi-layered solid board that is finished through
laminating different papers over a structural material made of wood logs or shavings that are
mechanically pressed and bonded together into sheet form. LB is scratch proof, heat proof,
insects proof material used to develop wide ranges of product to serve both corporate &
home users. Product range includes Bed, Cupboard, Dressing Table, Chest of Drawer,
Showcase, Dinner Wagon, Side Board, Book Shelf, TV Trolley, TV Cabinet, Dining Table,
Shoe Rack, MD Table, Executive Table, Workstation, Office Cupboard, Multipurpose Shelf
etc.

Mild Steel: Zink phosphate rust free mild steel is used to produce Bed, Storage Rack,
Personal Locker, File Cabinet, Office Almirah, Hospital Bed etc. to serve corporate segment

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Plastic: Molded virgin plastic made products includes; Visitor Chair, Folding Table, Waiting
Chair etc.

Chair and Sofa: Basic structure made of PVC and Mild Steel with chromo plating
upholstered with high quality foam and fabric, plywood seat & back with ergonomic design.
Product ranges from-Swivel Chair, Fixed Chair, Executive Chair, Office Sofa etc.

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Wood: Predominantly home furniture is made of solid wood & processed wood. To serve the
increasing demand of solid wood furniture OTOBI has introduced almost all segment of
wooden furniture which is made by maintaining international quality standard. Products
ranges from Bed, Cupboard, Dressing Table, Chest of Drawer, Showcase, Book Shelf, TV
Trolley, Shoe Rack, Sofa Set, Divan, Dining Table, Dining Chair, Dinner Wagon, Side
Board, Display Shelf etc.

Accessories and Dcor: To serve the increasing demand of Home Decorative items and
to make OTOBI as a center of home & office solution, OTOBI introduced whole range of
Accessories & Decorative items which includes Artificial Flower, Ceramic Vase, Kitchen
Accessories, Table lamp & Lamp Shade, Table

Mat & Table Runner etc.

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Stationery: This Category pertains to a wide gamut of materials: paper and office
supplies, writing implements, glue, pen, pencil, cases, pins, staplers and other similar items.

Air Conditioning (Home Appliance): Through this category, OTOBI sells all types of air
conditioning solution to corporate and household customers.

Interior: Through this category, OTOBI provides innovative construction, interior and
exterior solution, especially in high end residential and commercial interior design services.
Products include ceiling work, civil work, door work, electric work, floor finishing work,
paint work, partition work, plumbing and stationary, tiles/stone work, aluminum work,
decoration work, and many other miscellaneous interior works.

Kloset: Kloset is the fashion and lifestyle brand of OTOBI which caters to the fashion
conscious people of the city. This is a one stop solution for customers who are looking for
elegant and posh apparel, footwear, hand bags, and accessories.
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External Merchandise: External Merchandise category includes all hardware and

accessories related to furniture manufacturing/interior work. Examples include handle, knob,
lock, drawer channel, push magnet, screws, roller wheels etc. [12]

10. Conclusion
Marketing is the process by which companies create values for customers and build strong
customer relationships in order to capture value from customers in return. On the other hand,
Marketing is just understanding the customers pulse and reacting to it. So, from the information
above we can gather enough knowledge about OTOBIs products and their background. Here we
included some basic information about OTOBI which helped us to understand the key objectives
and field of work of the organization.

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References
1.
2.
3.
4.

The GATS survey report by WHO, 2009

http://www.batbangladesh.com/Index/Home,29.04.15,10.15pm
The ITC Bangladesh Wave 3 Survey, 2011-2012
Hungry for tobacco: an analysis of the economic impact of tobacco consumption
on the poor in Bangladesh by- Debra Efroymson, Saifuddin Ahmed, Joy
Townsend, Syed Mahbubul Alam, Amit Ranjan Dey, Ranjit Saha, Biplob Dhar,
Aminul Islam Sujon, Kayum Uddin Ahmed, Oliur Rahman in MAY 2001
5. Smoking and Using of Tobacco products (Control) Act, 2005 and the Smoking
and Using of Tobacco Products (Control) Rules, 2006. Amendment of the
Smoking and Tobacco Usage (Control) Act passed in May 2013.
6. The GATS survey by WHO, 2009.
7. Consumers Perception on Product Quality and Brand Dilution in Tobacco
Industry of Bangladesh Md. Habibur Rahman* Mohammad Jasim Uddin**December 2010
8. http://www.grameenphone.com/about,30.04.15,10.16am
9. http://www.btrc.gov.bd/,02.05.15,8.23pm
10. http://www.telenor.com/about-us/corporate-governance/,03.05.15,09.14pm
11. BASIS and Netherlands survey on the ICT sector of Bangladesh, Bangladesh
Telecom Sector: Challenges and Opportunities by AT Capital Research May,
2010.
12. http://www.otobi.com/about,05.05.15,04.55pm
13. http://en.wikipedia.org/wiki/Otobi,04.05.15,11.45pm

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