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Executive Summary:_________________________________

Jute is a versatile, natural fiber that has been used for thousands of years to make things such as

rope, twine, hessian bags, rugs, and much more. While it is still being used extensively around

the world, it is not as popular as it could have been. Given the increasing focus on environmental

issues these days, jute good products can be put into the lime light, as they are environment

friendly. Taking in view the prospects, this is the high time to promote the export of the jute-

diversified products using limited resources.

Although Bangladesh is famous for jute and allied fibers, garments industries swept in

and have developed due to relative advantage and cheap labor cost. As there is the Multi fiber

concept of merger jute with other natural and synthetic fibers, jute has bright future for using

them in the various textile areas. It needs wide support for production and marketing of such

diversified products. As a result, the Govt. of Bangladesh initiated policy programmed for the

production of diversified jute goods through private sector.

The governments new jute policy is expected to focus on enhancement of the countrysproduction capacity, diversification of the product base and growth of export earnings. It would

be good if it were complemented with good corporate governance practices within the remaining

BJMC (Bangladesh Jute Mills Corporation) mills to ensure that both public and private mills can

compete on equal footing. BJMCs financial losses continue to be a significant fiscal burden.

This has arisen not only from BJMCs nearly automatic access to loans from the nationalized

commercial banks (NCBs) for many years, but also BJMCs greater control over the purchase

price of raw jute and export price for jute goods. These conditions do not create a level playing

field for the private mills. Addressing these issues would enhance efficiency and competitiveness

of the sector and may help Bangladesh regain its past glory in the jute market.

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Setting up a new market: France________________________

At present, Jute industry is the second largest industrial employer in the country. About

1.2 M acres of land is in use for jute cultivation per year. Bangladesh approximately earns about

2000 crore taka from exporting jute goods on an average per year. In Bangladesh 10% of the

total labor force is engaged in jute sector. Jute products have a good market in foreign countries

like France, USA, UK, Germany, Australia, and the Middle East. The products in demand

include jute shopping bags, blankets, apparels, handicrafts.

The Bangladeshi jute is yet to tap the European market. The demand for environment-

friendly products is on the rise worldwide. Based on these criteria we are planning to export jute

to France where state of the art infrastructure, business-friendly legal and regulatory environment

is present. It is true that we will be facing some challenges as the market is sophisticated, quality-

conscious, high-tech and competitive. We must enter the France market as early as possible to be

competitive throughout Europe. On the other hand, opportunities are present like relatively

advanced technologies, ideal test market for introduction of new high-tech and consumer

products, and no threat of existing jute product producers. There are some export requirements.All exported goods must be presented to the appropriate Customs office and declared for

clearance. Goods imported into France must be declared within the time limits. Import licenses

are required only for a limited number of products. These generally fall into the two categories of

measures to protect local agriculture production and measures of state control. Products subject

to a quota require import licenses, which are granted only to importers based in France. Import

licenses are also required for certain products not subject to quotas, but covered with public

health & plant health.

As target market, we have chosen the upper class, the upper-middle, and the middle class

people aging within 1 to 30 and above 50 living in the urban and suburban areas that use jute

handicrafts and prefer to use the eco friendly recyclable products.

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Company Profile:____________________________________

HeritageJute Products Ltd. (producer-cum-Exporter of JDPs Handicrafts)

Legal Status: Limited Company

Established in: 2003 (Started exporting since 2007)

Sector: Jute Diversified product, Raw Jute and Handicrafts

Sub-sector: Jute and leather based home textiles, jute yarns and jute goods

Contact: Mahfuzul haque, Chief executive

Heritage Jute Products Ltd

Flat 4B, house 1, road 23/A Gulshan-1, Dhaka-1212, Bangladesh.

Company Overview:_________________________________

Heritage Jute Products Ltd. is a public limited company. It came into being in the year 2003.

Initially, it conducted its operation within the country of its origin, Bangladesh. Later on in 2007,

it expanded its activity by involving in international business through exporting. Heritage Jute

Products Ltd. Companys only job is to deal with the golden fiber of Bangladesh that is jute. It is

a trading company, which deals with almost every possible variety of jute products. The

company offers raw jute as well as various customized jute products. Jute can be utilized in

producing several objects that are capable of using in different phases of life. There is virtually

no end of it. Jute can even be used in decorating the interior of a luxury car. Basically Heritage

Jute Products Ltd. plays the role of an intermediary to transfer the jute from the producers to the

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ultimate users of it. It makes our job even harder. At the same time, we need to satisfy both the

parties. Given that, our tone of negotiation is completely different for both the parties. As, we

need to make people understand in their own language. We give our best efforts in maintaining a

healthy relationship with our clients who remain in two different directions. Besides, we keep on

searching for innovators who are producing newer items from jute.

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Corporate Philosophy:________________________________

Respect for the Law

Heritage Jute Products Ltd. is determined to comply with the letter and spirit of the law, in

Bangladesh and overseas, and to be fair and transparent in all its dealings.

Respect for Others

Heritage Jute Products Ltd. is respectful of the people, culture, and tradition of each region and

country in which it operates. .

Respect for Customers

Heritage Jute Products Ltd. conducts intensive product research and forward-looking

development activities to create new value for its customers by making widespread use of jute.

Respect for the Country of Origin

One of the main objectives of the company is to uplift the image of Bangladesh. By supplying

superior quality jute products in several countries, we are looking forward to provide Bangladesh

a positive recognition all through the globe.

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Our Offerings:______________________________________

Heritage Jute Products Ltd. Company offers various Jute Products at unbeatable quality & price.

The traditional excellence of Company artisans are reflected in a wide range of jute handicrafts

of utility, decoration, and novelty. A beautiful mosaic of Jute handicrafts that comprises of

carpets & floor coverings, wall coverings & window dressings, table mats & table-wares, swings,

hammocks, office bags, table covers, table mats, pen and pencil stand, wall hangings & room

decor, bedspreads & bedroom slippers, blankets & shawls, skirts & jackets, shopping & travel

bags and a host of other home textile made-ups.

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The jute handicrafts of Bangladesh are a unique blend of aesthetic sense

and utility. Artisans have experimented with the fiber. Jute Yarn,

Cloths, Bags, Wallets, Purses, Mats, Rugs, Carpets, Decoration Pieces,

Gifts & Crafts, Sacks, Hessian Cloths, Burlap Bags, Ropes/Twine etc.

made of high quality Jute are offered by Heritage exclusively. Since

jute is very much environment or eco friendly, products made of jute

are becoming the most popular home appliance around the world for

everyday use.

History and Culture:_________________________________

History:

France is an independent nation in Western Europe and the center of a large overseas

administration. It is the third-largest European nation (after Russia and Ukraine).

In ancient times, France was part of the Celtic territory known as Gaul or Gallia. Its present name

is derived from the Latin Francia, meaning "country of the Franks," a Germanic people who

conquered the area during the 5th century, at the time of the fall of the Western Roman Empire.

It became a separate country in the 9th century.

Since the 17th century, France has played a major role in European and world events. In the 20th

century, it has experienced numerous crises, including the devastation of two world wars,

political and social upheavals, and the loss of a large empire in Indochina, Algeria, and West and

Equatorial Africa. It has, however, survived and emerged from the ruins of World War II to

become an important world supplier of agricultural and industrial products and a major partner in

the EUROPEAN COMMUNITY (EC, or Common Market).

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Today, the term metropolitan France refers to the mainland departments and CORSICA, a large

island located in the Mediterranean Sea off the coast of Italy that has been a part of France since

1768. France has six overseas departments: FRENCH GUIANA in South America;

GUADELOUPE and MARTINIQUE in the West Indies; MAYOTTE, an island formerly part of

the Comoros, located in the Indian Ocean; REUNION, an island in the Indian Ocean; and SAINT

PIERRE AND MIQUELON, islands off the east coast of Canada. In addition, France has

numerous small possessions called overseas territories. These include a group of widely scattered

islands in the South Pacific, which are administered from Tahiti and are known collectively as

FRENCH POLYNESIA; FRENCH SOUTHERN AND ANTARCTIC TERRITORIES; NEW

CALEDONIA and WALLIS AND FUTUNA ISLANDS; and many small islands in the southern

oceans, including the Kerguelen and Crozet archipelagos and the islands of St. Paul and

Amsterdam (Indian Ocean). The overseas departments and territories are represented in the

French National Assembly.

Facts and Statistics:__________________________________

Location

Western Europe, bordering Andorra 56.6 km, Belgium 620 km, Germany 451 km,

Italy 488 km, Luxembourg 73 km, Monaco 4.4 km, Spain 623 km, Switzerland 573 km

Capital

Paris

Climate

Generally cool winters and mild summers, but mild winters and hot summers along

the Mediterranean; occasional strong, cold, dry, north-to-northwesterly wind known as mistral

Population

60,424,213 (July 2004 EST.)

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Ethnic Make-up

Celtic and Latin with Teutonic, Slavic, North African, Indochinese, Basque minorities

Religions

Roman Catholic 83%-88%, Protestant 2%, Jewish 1%, Muslim 5%-10%, unaffiliated

4%

Government

Republic

GDP (PPP)

$2.086 trillion

Per capita

$33,334

Culture of France

Paris is a city for art of every form, and has hundreds of art boutiques, art and antique dealers, art

galleries, special art exhibits, the symphony, the ballet, cinema and the theatre. Therefore, French

people posses a very artistic mind. They love to decorate their house with colorful cloths and

carpets. By using jute, we can make such attractive and beautiful product, which has a big

demand in France.

Business Culture

To export jute product in France we need to know their business cultures. If we can understand

their business culture then it will help us to build a satisfactory long-term relationship.

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French Society & Culture

Cuisine

Food is one of the great passions of the French people.

French cooking is highly refined and involves careful preparation, attention to detail, and

the use of fresh ingredients.

It varies by region and is heavily influenced by what is grown locally.

French Family Values

The family is the social adhesive of the country and each member has certain duties and

responsibilities.

The extended family provides both emotional and financial support.

Despite their reputation as romantics, the French have a practical approach towards

marriage.

Families have few children, but parents take their role as guardians and providers very

seriously.

Relationships - Public vs. Private

The French are private people and have different rules of behavior for people within their

social circle and those who are not.

Although the French are generally polite in all dealings, it is only with their close friends

and family that they are free to be themselves.

Friendship brings with it a set of roles and responsibilities, including being available

should you be needed. Friendship involves frequent, if not daily, contact.

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Business Meetings Etiquette

Appointments are necessary and should be made at least 2 weeks in advance.

Appointments may be made in writing or by telephone and, depending upon the level of

the person you are meeting, are often handled by the secretary.

Schedule meetings during July or August should not be made, as this is a common

vacation period.

If you expect to be delayed, telephone immediately and offer an explanation.

Meetings are to discuss issues, not to make decisions.

Avoid exaggerated claims, as the French do not appreciate hyperbole.

Business Negotiation

French business emphasizes courtesy and a fair degree of formality.

Wait to be told where to sit.

Maintain direct eye contact while speaking.

Business is conducted slowly. You will have to be patient and not appear ruffled by the

strict adherence to protocol.

Avoid confrontational behavior or high-pressure tactics. It can be counterproductive.

The French will carefully analyze every detail of a proposal, regardless of how minute.

Business is hierarchical. Decisions are generally made at the top of the company.

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The French are often impressed with good debating skills that demonstrate an intellectual

grasp of the situation and all the ramifications.

Never attempt to be overly friendly. The French generally compartmentalize theirbusiness and personal lives.

Discussions may be heated and intense.

High-pressure sales tactics should be avoided. The French are more receptive to a low-

key, logical presentation that explains the advantages of a proposal in full.

When an agreement is reached, the French may insist it be formalized in an extremely

comprehensive, precisely worded contract

Product Market:_____________________________________

The Product Outline

The basic feature of that product will be that it will come only from natural fibers. There will be

no artificial and chemical plastic or synthetic raw materials. The raw materials of the products

will be the fresh natural fibers and they will be collected mainly from various places (Dinajpur,

Rajshahi, Barisal, Shylet etc) of the country. The company already has contract with some mills

for preserving fibers and there will be quality assurance teams to look after them. Raw Jute will

be preserved naturally and will be free from the chemical. As we are mainly concentrating on

the natural aspects, the mission statement of our product is Use natural products to save

the nature.

Product Life Cycle

Despite of being a vintage business, the Jute Industry is yet to mature in our country. Our

company is in its growing stage and to explore the market we are now planning to go to France.

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Jute products have a good market, domestic as well as in foreign countries like USA, UK,

Germany, Australia, and the Middle East. The products in demand include jute shopping bags,

blankets, apparels, handicrafts, wall hangings, and floor coverings. While new markets are under

exploration through consumer awareness and product promotion programs, it will not be

surprising to find this natural fiber become a material for regular use by consumers all over the

world.

Although Heritage Jute Products Ltd. has been exporting jute products to many European

countries, it has never export any products to France. Recently it has taken steps to export jute

made products in that country. For this, it has set up an ongoing campaign to create attention of

its product.

Market Feasibility in France

In France, there are many types of products in terms of Cloths, Bags, Wallets, Purses, Mats,

Rugs, Carpets, Decoration Pieces, Gifts & Crafts, Sacks, Hessian Cloths, and Burlap Bags in

todays market. However, all these companies do not come from natural aspects. Therefore, we

have sought out this market as a niche market and have chosen to launch a fresh product, which

will not only be eco friendly but also be less costly.

Customers, being more health conscious; now want to take something comes directly from

nature. Consequently, many French are shifting their taste over the trend. All these have

influenced us enough to make a step in this ground.

The Heritage Jute Company along with its client French companies surveyed different people

from the different areas, age groups and came to know that now they want something new and

refreshing. Keeping this in view, we have chosen something innovative by adding some new and

refreshing jute products in the market.

Customers, mainly children and old person face skin cancer problem for using low quality

artificial and plastic products. On the other hand, patients suffering from various diseases also

seek for the natural fiber made products for their health. So far, we can say that our product will

be the first priority, as it is made from the fresh natural fibers and the products will have no side

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effects, as we are not using any artificial color or objects. Therefore, the market growth for this

particular product is reasonable.

The Market:________________________________________

Market Segmentation

Segmentation is the first step for building a strong brand or launching a new product.

Accordingly, we have to choose target consumers based on this segmentation. Therefore,

segmentation has to be done carefully. To do that prior job we have chopped up the whole

consumer market based on

Demographic: Different age & income level,

Geographic: Location or area,

Psychographic: Different social class,

Behavioral: Occasion & user rate

Target market

Target market is the most difficult part of the whole process. Because in that particular stage we

have to decide for whom we will produce the product and who will be the buyer or consumers.

After analyzing all the parts we have decided to go for the following target market:

The upper class, the upper-middle and the middle class people aging between 1 to 30 and above

50 living in the urban and suburban areas who use, Cloths, Bags, Wallets, Purses, Mats, Rugs,

Carpets, Decoration Pieces, Gifts & Crafts, Sacks, Hessian Cloths, Burlap Bags, Ropes/Twine

etc at a considerable rate and prefer to use the eco friendly recyclable products are our target

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customer. However, in case of suburban we will only concern about the upper class of that

society.

Capability of satisfying the market

For achieving the goal and objective as mentioned above following outlines have been

undertaken:

Retain/increase market of the traditional jute products

Develop new application of traditional products

Development of new products using the advantages of natural fibers

Improve fiber quality

Improve productivity and product quality

Make use of sustainable development agenda

Increase consumer awareness by highlighting the environment friendliness of

jute

Address the trade issues

Address supply and management issue

Create R&D net work

Create employment opportunities and develop human resources

Restructuring of jute industry to make it commercially profitable and viable.

Research towards development of diversified products of jute goods and introduction and

expansion of their uses in the foreign market.

Adequate production and supply of some diversified jute items to meet wide demand.

Production of food grade jute bags as per compliance of the foreign buyer to meet

international demand.

Maintain liaison and cooperation with local and foreign Research Laboratories,

universities and other bodies in respect of research work on jute & jute products.

The first and foremost strength of the Bangladesh Jute Industry is that it is based on the

raw material that is available at the doorstep. Moreover, the quality of the raw material is

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the best available in the world. Bangladesh is the natural abode of jute cultivation on

account of its climatic situation and soil condition.

New technologies for production of diversified jute products are now available.

The company is in jute business for almost a decade. There are adequate arrangements for

facilitation of jute trade inside and outside the country. An elaborate system exists for

procurement and disposal of raw jute. Jute goods produced by the company mills are

really of good quality.

Marketing Mix

Branding Strategy

As Brand is the major enduring asset of a company; we concentrate hard to build our product

brand.

Firstly, we have to position our brand by associating its name with desirable benefits it offers.

We will tell our customers that how our products (with natural ingredients) can be beneficial to

their health. When positioning the brand, we will keep a deep look towards our brand contract.

We will ensure our customers about healthier and natural ingredients.

Besides, our company will primarily apply the More for the Less value proposition strategy

for the competitive advantage over the competitors.

The positioning statement for our brand will be: To people, who are envirorment conscious and

want to use the best quality product Eshana jute products are the one to fulfill your desire.

We will export the product as our own brand. To be successful as a manufacturers brand our

company will invest in R&D to bring out new features and continuous quality improvements. For

these, we have to design strong advertising programs to maintain high awareness and preference.

Moreover, our company will also look towards brand development either by line extensions or

by brand extensions. As our current products become tend to the growth stage, we will offer

more products with new forms, colors, and size.

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A brand becomes successful and maintained through brand experience. For this purpose our

company takes several steps. We will ensure that everyone in the company lives within the

brand. We will train our employees to be more customers oriented. Moreover, we will appoint

brand equity manager to maintain and protect our brand images and quality. Last but not the

least; we will plan to audit our brand strengths and weaknesses in a periodical basis regarding the

following aspects:

Does our brand excel at delivering benefits that consumers truly value?

Is the brand properly positioned?

Do all of our customers touch points supports the brand positioning?

Export Distribution

Producing a product and making it available to buyers requires building relationships with key

suppliers and resellers in the companys supply chain. We will distribute our product through

Indirect Marketing Channel, as the channel members contacts, experience, specialization and

scale of operation will help our company to achieve more. We will sell the products not only

through the intermediaries but also to and with them. We will use our intermediaries for some

key functions such as information (Gathering marketing research), promotion (spreading

persuasive communication about an offer).

Before designing the marketing channel our company will find out what target consumers want

form the channel.

Primarily, by balancing consumer needs against the feasibility, cost and more importantly

customer preferences, we will design a corporate vertical marketing system. Our company will

integrate successive stages of production and distribution under its ownership. Controlling the

entire distribution chain will help to distribute our product more swiftly by saving time,

eliminating the need for warehouses and keeping inventories low. Normally it takes 30-60 days

Manufacturer Wholesaler Retailer

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depending on the order. Afterwards, if the market tends to be large and complex, then we will

focus on Multi channel distribution system.

At the beginning, we will export with the selected companies in the abroad. The dealers will

distribute the products under each division and will constantly report to the main corresponding.

Competitive Analysis:________________________________

Our main competitor in the French market is Hindustan Jute Mills. HJM has about 70% market share in

the French market. There are also other two Indian companies products in the market. These Indian jute-

exporting manufacturers are our competitors from the same industry. We also consider Chinese and

Vietnams as our major competitors in the target market. Now we will discuss our both type of competitors

activities, market shares, financial and marketing strengths separately.

Competitors from the same industry

Hindustan Jute is a reputed jute exporting profiles manufacturer. They have their major business in the

central France. Their production plant is located at the West France. HJM has a huge market share in the

whole Northeast French market. In French, it has about 70% market share. There are other two jute-

exporting suppliers in the market. Those are from central India. However, these companies have

significantly less market share. Here HJM has the market share because they are competitive in pricing.

They offer fewer prices than other two companies do as HJMs transportation cost is less than those other

two companies are. Moreover, all these companies have a strong financial strength as they are operating

in the huge French market. Moreover, their marketing channels are also very strong. That is why they are

still in the French market with high transportation cost. They actually introduce jute-exporting products in

the French market. Again, they have strength. France is a cosmopolitan country and there are many

Indians there. Indian people are much more nationalistic. They always prefer their own country products

rather than using foreign materials. This can be a major threat for us in entering the French market.

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Competition from substitutes:

In the French market our substitute products suppliers will be the major competitors for us. We

know French is a developed nation and People in French are very up to date and fashionable.

Here people are more interested towards art and culture. Jute products can be a major origin of

expressing style in interior designing of houses and cars as Eco-concerns drive demand for

biodegradable products. Actually we have to take such promotional efforts to make sure that our

product is more environments friendly and better than others as we use the best quality raw jute

fabric.

SWOT Analysis:____________________________________

Strengths

The strength of the industry lies in the concentration of mills predominantly in one

geographical region Bangladesh, which is climatically ideal for the cultivation of jute.

Though our main competitor India is the largest producer of raw jute in the world,

Bangladesh produces the best quality fiber. Therefore, our jute products have the quality,

which will become very successful in Frances sophisticated, quality-conscious, high

tech, and competitive market.

Another major strength of the industry lies in its adaptation and surviving capabilities.

Bangladeshi jute has a history of over hundred fifty years. In this long period, it has faced

various odds and overcome many hurdles. The jute culture in Bangladesh is deep rooted

and most importantly, there is no dearth of cheap labor. It will make our variable cost

lower and thus give an advantage in French market.

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Bangladeshi jute, like Brazilian coffee has a global image in developed countries like

France.

Weakness

Like other Local bag makers, we have to buy jute fabric from the domestic market at

higher prices than what foreign importers pay for the same fabric from Bangladesh. As

bag makers in Bangladesh do not get export incentive - a setback that makes the local

industry less competitive than its rival in India, the main importer of jute fabric and our

main competitor in France.

The major weakness is in the production process. Lack of advanced technology/machines

and Lack of skilled labor and skilled designers in the jute sector leads to production of

inferior quality products resulting in loss of competitiveness in the French market.

Inadequate R & D facilities at both public and private levels in the Jute sector leads to

absence of continuous product innovation resulting in loss of growth opportunities

whiling other major competitors like India and China are far ahead from us in this issue.

Lack of awareness as a result low demand of Jute diversified products in the domestic

market is been a major obstacle in internationalization.

Bangladesh Jute Research Institute (BJRI) lacks close coordination with the Ministry of

Textiles & Jute as well as Jute Industries as it is under the Ministry of Agriculture. This

lack of coordination creates a problem in maintaining the supply chain of certified jute

seeds on which the quality of Jute fiber vis-a-vis the production of quality Jute goods

depends.

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To market our product we have to depend on our Area Distributor. So we face

difficulty in changing any strategy like pricing. Our sale is also dependent on theirmarketing effectiveness.

One of the major weaknesses of our company is financial problem. For this problem

sometimes we cannot implement all necessary toward product development also

management development.

Opportunity

Jute is the only globally recognized and accepted green packaging product from

Bangladesh. Use of bio degradable products like jute is encouraged not only in

packaging but also in many other industrial inputs as

(a) Backing cloth in carpet industry,

(b) Geo jute/jute reinforced composites in civil and road construction,

(c) Alternative to wood products in many domestic and industrial uses

(d) Automotive industry raw material for paper industry,

(e) Production of various interior decorative products including flooring.

Researchers suggest that use of renewable non-wood based materials like jute and sisal can

reduce the use of traditional materials like wood, minerals and plastics. (Leao, 1998)

Like Many countries, France has taken various initiatives to popularize biodegradable green

products. This has definitely increased the prospect of launching jute products.

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A global initiative for banning environment-unfriendly shopping bags and declaring the

year 2009 as the International Year of Natural Fibers by United Nations has fuelled

demand for jute bags. According to media reports, France and Germany will ban the use

of non-biodegradable polythene bags next year. Also, the US is looking for a viable

alternative to polythene bags. This move is likely to increase the use of jute, products.

Moreover, research on the development of jute pulp has opened up huge potential for

this natural fiber. The International Jute Study Group (IJSG), which was earlier known

as the International Jute Organization (IJO), has been successful in developing jute pulp

in different laboratories all over the world. Among these two are from Bangladesh,

namely Bangladesh Jute Research Institute (BJRI) and Bangladesh Chemical

Industries Corporation (BCIC). These two institutions can work in coordination with

Centre Technique du Papier (CTP) of France for successful commercialization of the

proposed jute pulp technology would open up new vistas both for the jute and paper

industry.

Threats

1. In the post MFA quota free era, different types of non tariff barriers (NTBs) with far

reaching impact on the work place will hamper jute exports mainly to developed

countries like France. The most likely NTBs will be in the areas of

(a) Environment protection, (b) Social commitment

Like Many EU countries, France has developed different standards of their own for the

protection of the environment. Increased public awareness of environmental impact of products

has prompted the rise of a new body of labeling called Eco-labeling or environmental labeling.

The objective of the program is to provide necessary information for environmentally conscious

consumers on products that have less environmental impact. The worlds first Eco-labeling

scheme was introduced in France in 1988.

This program encourages manufacturing industries to be actively involved in environmental

protection and pollution control by designing and developing environmentally friendly products.

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However, during trade negotiations Eco-labels may be used as a non-tariff barrier also.

UNCTAD studies showed that Eco-label had created difficulties for some sectors of products, in

particular paper and pulp, bags and accessories from developing countries.

2. France Market is sophisticated, quality-conscious, high tech and competitive which will

create a challenge for Our jute products.

3. Social and labor standards are increasingly being linked to the trade issues. The most

commonly used criteria to judge ethical, social and labor practices are:

(I) Fair Trade Labeling

(ii) Social Accountability Standard (SA-8000).

The concept of fair trade was introduced to address the issue of social responsibility in the

production and marketing of products. Like other countries, France has emphasized in these

issues, which are going to be a major challenge for our products.

International Logistics:_______________________________

Flow of goods to the final destination

The goal of the marketing logistics of our company is to provide the targeted level of customer

service at the least cost. We will use distribution centers rather than warehouses in each city.

These centers will be designed to take orders, fill them efficiently, and deliver goods to the

exporting companies as quickly as possible. In shipping the product to the distribution centers.

we have Chosen shipping as our primary mode of transportation and for intermodal

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transportation, we will use rail and truck. It will be less costly and will provide flexibility and

convenience.

Besides, we will use a simple, accessible process for sharing channel information. Telephone,Internet, & sales people will link all our distribution centers up to share sales information. This

will certainly help us to maintain the delicate balance of the inventory management.

The Barriers to Face

Import Tariff

The French customs tariff uses the Harmonized System (HS) for the classification of goods.

Customs duties are levied per 100 kilogram

Duty rate

The standard duty rate is 7.6 percent, although there is a reduced rate of 2.4 percent for certain

goods and services like agricultural products and necessary consumer goods

Trade Barriers

Due to significant tariff and quota barriers for many agricultural products, combined with

a restrictive approval process for biotech products

Switzerland has a strict regulatory regime for agricultural biotechnology products.

Over the past few years, Switzerland has taken steps to remove barriers to competition in

its automotive, electricity, telecommunications, and postal sectors.

Economical barriers

Although overall economic condition of France is at a better situation for international trade, but

the economic condition of France has slowed down recently for unusual global recession. For
http://www.buyusa.gov/switzerland/en/trade_regulations_standards.htmlhttp://www.buyusa.gov/switzerland/en/trade_regulations_standards.htmlhttp://www.buyusa.gov/switzerland/en/trade_regulations_standards.html

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example, recession results in financial loss and decrease the purchasing power of the target

consumers. They may be reluctant to buy this type of goods.

Cultural threat

Culturally, French people are homesick. If the consumers maintain the attitude of using own

countrys product as a personal belief of patriotism, then it will be a big threat for the company.

Bargaining power of supplier

Bargaining power of supplier may be high because of only one exclusive area distributor. More

dependency on the distributor may lead to loss of some control over the marketing of our

product. It may become more difficult for us to have a final say in pricing and promotion.

How these threats can be opportunities?

o Strong political lobbying power

o Marketing research and forecasting of economical situation

o Special incentives or other arrangements on the unusual situation

o To show respect and create value to the culture of the target consumers

o Precision of agreements with the distributors on the basis of mutual business lows of two

countries

The cost effective way

o To setup its own sales depot in Parris as a way of direct marketing.

o To engage and employ some employees from France for better adaptation with the

cultural environment.

o To follow mass marketing at the matured stage.

o To export cheap labor in Tripura for any additional task of product differentiation.

Payment Method

We accept 100% T.T. (Telegraphic Transfer) or Wire Transfer/Bank Transfer through SWIFT to

our bank account as payment method.

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We also accept any kind of L/C (Letter of Credit) or D/C (Documentary Credit). We accept small

payments for samples through Western Union too.

Financial Plan:_____________________________________

Initial Investment:

Initial Investment

Category Cost

Savar office BDT400,000

Lease money

for land

BDT110,000

Production

contract

BDT48,000

Transportation BDT2,500,000

Gulshan

Showroom

BDT200,000

Dhanmondi

showroom

BDT150,000

Advance for

showrooms

BDT2,000,000

Machines BDT200,000

Website BDT30,000

Plant seeds

and seedlings

BDT50,000

Accessories BDT10,000

Total BDT5,698,000

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Financial Statements:

Income statement:

We have given a very short table of Income Statement because details of calculation are attached

in the appendices. Firstly, we have calculated the monthly income and the total cost of sales and

then simply calculated the EBIT. After that we have deduct the interest payment of the quarters

and calculated EBT. Finally, we have added all the four quarters revenues and less the total tax

amount for the first year. Finally we have come up with the total first years net profit after tax.

Year 1

Quarter 1 Quarter 2 Quarter 3 Quarter 4

Total Revenue 1125000 1271250 1436512.5 1623259.12

5

Total Cost Of Sales 947001 947001 947001 947001

EBIT or Operating

Profit

177999 324249 489511.5 676258.125

Interest Payment per

Month

99714 99714 99714 99714

Earnings Before Tax 78285 224535 389797.5 576544.125

Total Net Profit For

Year 1

1269161.62

5

Tax 507664.65

Net profit after Tax 761496.975

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In the second year, we have a very significant amount of profit as we have added a new

showroom in the Dhanmondi, another residential area. As the sales growth rate is predetermined,so we have easily calculated the profit for that year. And the growth rate is divided in all four

quarters. This trend is also followed in third year. This year is more significant to us because in

this year, we have broken our business even.

Year 2


Total Revenue 3240000 3661200 4137156 4674986.28

Total Cost Of Sales 1864500.01

5

1864500.015 1864500.01

5

1864500.015

EBIT or Operating Profit 1375499.98

5

1796699.985 2272655.98

5

2810486.265


Month

149,571 149,571 149,571 149,571

Earnings Before Tax 1,225,929 1647128.985 2123084.98

5

2660915.265

Net Profit before Tax 1,225,929 1647128.985 2123084.98

5

2660915.265

Total Net Profit For Year

1

7657058.22

Tax 3062823.28

8

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2

In the third year, we have calculated that the net total value of profit is much higher than the

second year.

Year 3


Total Revenue 3,523,500 3981555 4499157.15 5084047.58

Total Cost Of Sales 2212503 1864500.015 1864500.01

5

1864500.01

5

EBIT or Operating

Profit

1,310,997 2117054.985 2634657.13

5

3219547.56

5


Month

224,357 224,357 224,357 224,357

Earnings Before Tax 1,086,641 1967483.985 2485086.13

5

3069976.56

5

Net Profit before Tax 1,086,641 2491693.485 3865858.48

5

5652272.98

5

Total Net Profit For

Year 1

8609187.18

5

Tax 3443674.87

4


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1

Sensitivity Analysis:

As the scenario is good for us for initiate a business with profit from the first year as well as

break even in the second year, things may not be that much favorable for us because of recession,

legal and political structure and also for so many reasons. Things may turn opposite for the

business and we may incur loss in any time. Factors like revenue and costs still plays an

important role in the business, so we can cover it up, if recession or other factors may cause the

business to shut down, by selling the fixed assets or turn it to other kind of business. We may

sell less just to incur less tax amount. Logistics costs may also be a factor to deal with cautiously.If the business goes well, then we will add more business showrooms and spread the business to

other metropolitan area and also make the system of membership card where the card holder get

some kind of discounts and priority among others.

Balance sheet:

Pro-forma Balance Sheet

ASSET

Year 1 Year 2 Year 3

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Current Asset

Cash 5,698,000 2,782,965 8364042

Accounts Receivable 2784150 8018352 8719957

Total Current Asset 8,482,150 10,801,317 17083999

Property, Plant & Equipment

Vehicle & Transportation 2,500,000 2,500,000 2,500,000

Machines & Equipment 200,000 200,000 200,000

Less: Accumulated Depreciation - Total PP&E 540000 540000 540000

Lease money, Banani showroom Advance

Payment

1200000 800000 0

Total Property, Plant & Equipment 4,440,000 4,040,000 3,240,000

Total Asset 12,922,150 14,841,317 20,323,999

Liabilities & Owners' Equity

Liabilities

Long-term Liabilities

Loan per year 664766 664766 664766

Short-term Liabilities

Interest Payable per year 398856 598284 897428

Unearned Revenue 1194453 2680810 7200226

Total Liabilities 2258075 3943860 8762420

Owners' Equity

Earnings 6960375 7193757 7857879

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Retained Earnings 0 0 0

Capital 3703700 3703700 3703700

Total Owners' Equity 10664075 10897457 11561579

Total Liabilities & Owners' Equity 12,922,150 14,841,317 20,323,999

The total cash for the first year is the initial investment of the business and the account receivable

is the 40% of the total revenue which will be collected from the customers at certain point of

time. The total fixed asset is just the sum up of the total fixed asset and it remains same for the

year two and three.

35% of the total initial investment is the loan amount and per year amount is calculated based on

the assumption that we have to repay the whole loan amount within three years.

Accumulated depreciation is on the machines and the life time is assumed to be 5 years. We have

followed the straight line depreciation method to calculate the per year depreciation amount.

Unearned revenue will be based on the orders and the amount of money we will be taking per

order. There will be a certain amount which should be given in advance by the customers and the

rest of the amount will be taken from them when the order is fulfilled by us.

We have calculated the second and the third years cash balance by following the cash flow of

those years.

Cash flow statement:

In the first year, we have a positive cash flow from the beginning and here we have calculated

the cash flows by following the traditional format. Firstly, we have added operating income

(EBIT), and then deduct cash tax payment and finally we derive the NOPAT. As there were no

investment on net working capital and capital investment, so just adding the depreciation, which

is non cash expense, we got the positive free cash flows the consecutive quarters of first year.

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Year 1

Title Quarter

1

Quarter

2

Quarter 3 Quarter 4

Revenues 1125000 1271250 1436512.5 1623259.12

5

Operating Income

(EBIT)

177999 324249 489511.5 676258.125

Less: Cash tax payment 126916 126916 126916 126916

NOPAT 51083 197333 362595.5 549342

Plus: Depreciation

Expense

180000 180000 180000 180000

Less: Investment

In net Working Capital 0 0 0 0

In new Capital

(CAPEX)

0 0 0 0

Total net investment for

the period

0 0 0 0

Free Cash Flow 231083 377333 542595.5 729342

In the second year, we have added a new showroom in Dhanmondi and capital

expenditures occurs then.

Year 2

Title Quarter 1 Quarter 2 Quarter 3 Quarter 4

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Revenues 3240000 3661200 4137156 4674986.28

Operating Income (EBIT) 1375500 1796699.98

5

2272655.985 2810486.26

5


NOPAT 609794 1030983.98

5

1506949.985 2044780

Plus: Depreciation

Expense

180000 180000 180000 180000

Less: Investment


In new Capital (CAPEX) 37000 37000 37000 37000


the period

37000 37000 37000 37000

Free Cash Flow 752794 1173993.98

5

1649949.985 2187780

As the forecasted revenue is estimated to have a positive growth of approximately three percent

per quarter, so we still have the positive cash flow in the second year also. Investment on net

working capital is also not present here because we are serving our customers as per the orders.

In the third year, again we have not extended our business further because we wanted to see the

progress whether the existing process stands better or not. We see that, as growth is better and

has the positive cash flow to the business, we have discussed the risks involved in the sensitivity

analysis.

Year 3

Title Quarter 1 Quarter 2 Quarter 3 Quarter 4

Revenues 3,523,500 3981555 4499157.15 5084047.5

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8

Operating Income (EBIT) 1,310,997 2117054.9

8

2634657.13

5

3219547.5

6


NOPAT 450078 1256136 1773738 2358628.5

Plus: Depreciation

Expense

180000 180000 180000 180000

Less: Investment


In new Capital (CAPEX) 0 0 0 0


the period

0 0 0 0

Free Cash Flow 630078 1436136 1953738 2538628.5

Sensitivity Analysis:

The factor, which is so important, is the EBIT or the operating income. When it is high, we see a

higher cash flow to the business. To increase or to ensure the gradual growth of the operating

income, we have to give a closer look into the total revenue and the costs associated with the

sales. If we can ensure that revenue growth is stable in relation with costs, then we can expect a

positive cash flow even from the first year.

Pay Back Period:

We have calculated the payback period as 1.33 years

Break-Even Analysis:

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We have considered first three years time span for break - even analysis. The formula we have

used for this analysis is:

Break Even in sales =Fixed Cost / Contribution Margin Ratio

Fixed cost= BDT 3,240,000

Contribution Margin ratio= Total contribution (Sales Variable cost)/ Sales

= 19,205,616.565/38,257,623.635

= 0.502

Break Even in sales = BDT 6,454,183.267.

So, we will start making profit, after we have reached our sales amount of BDT 6,454,183.267.

Conclusion:_______________________________________

From the above analysis we can say that it may fulfill the goal of international marketing to make

exchange, provide satisfaction to the customers and earning more profit from the internationalmarket by the available opportunities in the market through geographical proximity, bilateral

trade relationship between two countries, lower transportation cost, absence of effective

competitors and lower pricing. But we will may face some problems like nationalistic view of

French people, unsolved borders issues, and French government non-tariff barriers, etc. but we

think it is wise for Heritage JDP to enter into French market, though there is some problems. But

Heritage JDP may become successful through proper planning and promotional activities and

this success may lead us to flourish our business in the Europe.

Recommendations:__________________________________

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In the recommendation part, we can first focus on probable effective promotional activities of

Heritage JDP

Promotional Strategies:

Heritage JDP should use promotions effectively through establishing goals, selecting appropriate

strategies, and setting a budget.

Some tips related to its objectives are:

To gain and encourage new customers

Maintaining brand image through maintaining quality of products at comparatively

lower price

Through using some combinations of push (Sales promotional effort) and pull (demand

creation) strategy

Promotions that cross the lines:

The Core-Competitive advantage

It should create competitive advantage through efficiency and superior quality of its products. It

may gain efficiency by reducing unit cost with a large scale of production, gaining experience in

the international marketing place and by adaptation with the latest technology, R & D strategy,

and well-developed infrastructure of operation.

Product Proliferation

It may introduce its product lines gradually in its niche market.

Pricing

It can follow the expected pricing strategy that involves the use of a single well-known price for

a long period.

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Strategic Alliances

In case of Strategic Alliances Heritage JDP should follow credible long-term as well as short-

term commitments, it will maintain synergy and co-ordination with the distribution channels.

It can develop co-marketing programs and co-branding programs with their retailers.

It should maintain the consistent network of dealers.

It may allow sales incentives occasionally to big purchasers.

Before introducing their own sales point, it may focus on the width of distribution channels

instead of length of distribution channels.

Sponsorship and Event Marketing:

It may promote the sales promotion in the France by sports sponsorships, festivals, fairs and

event marketing.

Specialty Advertising:

It may spend in advertising specialties by making calendar focused on the local culture of France

just as a gift.

Interactive and Internet Promotions:

It may introduce its products by Internet promotions so those interested groups can get

knowledge about their products e-mail for any inquiry and exercise e-commerce in the long run.

It can also start telemarketing in the states of Northeast India.

Loyalty Programs/Continuity Programs:

It can follow the 4 mandates of loyalty programs:

Identify the best customers

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Connect with those best customers

Retain the best customers usually by rewarding them for their patronage

Cultivate new best customers.

Public Relations:

To build public awareness, it can communicate with local newspaper for their ad to maintain the

flow of information. In addition, it can use the local language in the package of its products

profiles for better understanding of local people.

Other Issues:

Growth Strategy:

As a growth Strategy, it can focus on the geographical expansion that can broaden from French

to other parts of France. It will focus on the following techniques:

Economies of Scale by standardization and increasing sales volumes

TQM

Just In Time Strategy

Budgeting:

It should take precaution in its budgetary policy so that it can be cost effective. At the initial

stage, it may budget up to 10 lacks Bangladeshi Tk. Including all promotional costs.

R & D:

It will spend the effective amount in its R & D program for much proper understanding of the

business environment in a better profitable way.

Survival in the Competition:

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It will always watch the competitors in the market and to stay in better position by

maintaining quality with cheaper price to gain the market share.

Avoidance of Conflicts:

It should be careful in avoiding conflicts with its stakeholders in the international market by

mutual understanding of the interest of each group.

Training:

In future when it will introduce its own sale center in the niche market, then it must train its salesrepresentatives properly so that they can understand the culture of the region and be close with

the local people for promoting their products.

Societal Responsibility:

It must focus on maintaining the social value of customers by reflecting their dreams in

designing its profiles. In this regard, it can use the creative dialogue of fulfilling the dreams of

people in the society.

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References:________________________________________

1. Czinkota, Michel R. International Marketing. Ilkka, A. Ronkainen. Ohio: Thomson, 2004.

2. Bangladesh, Export Promotion Bureau. Export Policy of Bangladesh. Dhaka. 1997.

3. Armstrong, Kotler. Principles of Marketing. 6th Edition. New Jersey: Pearson. 2002.

4. Khan Kawsar, G. (1999, July 13). Jute bag exports rise as shopping goes eco-

Correct, Retrieved December 20, 2004 fromhttp://www.thedailystar.net/newDesign/news-

details.php?nid=94737
http://www.thedailystar.net/newDesign/news-details.php?nid=94737http://www.thedailystar.net/newDesign/news-details.php?nid=94737http://www.thedailystar.net/newDesign/news-details.php?nid=94737http://www.thedailystar.net/newDesign/news-details.php?nid=94737

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