9/9/2012

A case study of Bangladesh and Malaysia | Mominul Plabon

BY: MOMINUL

PLABON GLOBAL MARKETING PROJECT

Executive Summary

The following marketing plan forms the basis for introduction of a milk powder named Agora

milk powder in two countries like Bangladesh and Malaysia. This study combines the

selection of the countries based on their income level as the purpose of the study is to

identify the distinctions of marketing strategies in developed, less developed and developing

countries. During the analysis there are several remarkable trends found in two countries

such as it seen developing countries have a large demand for foreign product while

developed country have good level of self sufficiency. Furthermore, in developing country

entry barriers are low as compared to developed country. The key opportunities found in

Bangladesh are; a great demand of powder milk due the vast shortage of liquid milk

production, low-cost labour force, increasing use of technology and so on. On the other

hand, in Malaysia the social, economical and technological structure are very attractive for

Agora milk powder while a few trade restrictions also exist. However, based on the analysis

two different marketing strategies have been adopted with the reason that both country differ

to each other in terms of their structure and culture. In this term, a careful design of the

marketing mix have been considered for both countries so that Agora milk powder can be

presented in way that the competitors find difficult to imitate.

Key words: strategy, quality, market.

Table of Contents 1. Introduction ......................................................................................................................................................... 4

1.1 Country Selection method ................................................................................................................................. 4

1.2 Bangladesh ....................................................................................................................................................... 4

1.3 Malaysia ............................................................................................................................................................ 5

1.4 Industrial attractiveness assessment ................................................................................................................ 5

1.5 Key summary of analysis .................................................................................................................................. 8

2.1 Background ....................................................................................................................................................... 9

2.2 Political factors ................................................................................................................................................ 10

2.3 Economical factors .......................................................................................................................................... 11

2.4 Social Factors ................................................................................................................................................. 11

2.5 Technological factors ...................................................................................................................................... 13

2.6 Summary of the analysis ................................................................................................................................. 13

3.1 International Marketing Strategy ..................................................................................................................... 14

3.2 Segmentation .................................................................................................................................................. 14

3.2.1 Evaluation of segmentation .......................................................................................................................... 16

3.3 Target market .................................................................................................................................................. 16

3.3.1 Undifferentiated marketing strategy ............................................................................................................. 16

3.3.2 Concentrated marketing strategy ................................................................................................................. 17

3.4 Brand positioning ............................................................................................................................................ 17

3.5 Brand positioning in Malaysia and Bangladesh ............................................................................................... 17

3.5.1 Product strategy ........................................................................................................................................... 17

3.5.2 Price Strategy ............................................................................................................................................... 18

3.5.3 Promotion Strategy ...................................................................................................................................... 19

3.5.4 Advertising concept ...................................................................................................................................... 20

3.5.5 Promotional mix ........................................................................................................................................... 20

3.6 Place strategy ................................................................................................................................................. 20

3.7 Entry mode ...................................................................................................................................................... 21

3.7.1 Export to local agents ................................................................................................................................... 22

3.7.1 Agent agreements ........................................................................................................................................ 22

3.7.2 Export risk .................................................................................................................................................... 22

4. Concluding Remarks ......................................................................................................................................... 23

References ............................................................................................................................................................ 24

Appendix ............................................................................................................................................................... 27

1. Introduction

As a marketing manager of Agora Dairy Company based in UK, my project is about to

market the company’s high quality (halal) milk powder in two overseas markets. First of all,

Agora powdered milk is high quality product which is frequently used to make desserts, tea,

dairy foods, cakes, ice-cream and so on. Furthermore, powder milk is also considered as a

substitute of liquid milk and a source of high protein and calcium for all aged people. Here,

my focus on this project is to analyse the dairy industries of two selected countries and

identify the opportunities there in order to market our company’s product. However, in the

first section of this report, I will analyse the industrial attractiveness of milk powder in two

selected countries using General Electric matrix. In the second section, a brief summary of

report will be given on the competitive structure, rivalry in the selected industries using the

PESTEL framework. Furthermore, in the last section, I will propose marketing mix strategies

for the chosen country based on the opportunities and threats found in part 1 and 2.

1.1 Country Selection method

Choosing two appropriate countries for product marketing is a crucial part of this project.

However, the following criteria have been considered to choose the appropriate countries for

marketing the Agora powder milk (Paul, 2008:54) such as;

Present income of the country (per-capita)

Population rate

Growth rate in income and population

1.2 Bangladesh

With over 150,493,658 (150m) population, Bangladesh is located in South Asia. The country

has had several remarkable economical growths in the last decades despite frequent natural

and external shocks. The present income rate (GNI) of the country is $700 per capita (lower

income). From 1990 to 2010, the poverty rate declined from 57% to 31.5% which is an

indication of gradual development. According to Central Intelligence Agency, the population

growth rate of Bangladesh is now measured at 1.578% while the income growth rate of the

country is at good condition such as from 2010-2011 periods the rate increased by 6% and it

is expected that it will rise or remain same in 2012 (CIA, 2011).

1.3 Malaysia

Malaysia is one of the growing economic countries with over 29,179, 952 (30m) population

and located in South-eastern Asia (CIA, 2012). The present income rate (GNI) of the country

is $8,420 per capita (upper middle income) and it is expected that the income rate will

increase by 4% in 2012 (Worldbank, 2012: Tradineconomics: 2012). However, over the past

decades the population growth rate of Malaysia fluctuated between 1.6% -1.7% and it is

forecasted to remain same in the coming 2-3 years (Worldbank, 2012).

1.4 Industrial attractiveness assessment

In order to assess the opportunity for Agora dairy products in the selected countries, first the

definition of industry should be understood. According to Matson and Hardy (2004:264),

“Industry is a group of companies that compete for the same market, by offering products or

services with similar functions to essentially the same pool of customers”. In this term, my

focus is to analyse the opportunity and market attractiveness for our products in Bangladeshi

and Malaysian dairy industry. To analyse the opportunity in a particular industry, GE matrix

is very helpful for understanding the current business strengths and the market

attractiveness of the products or services in the particular industry (Proctor, 2000). However,

an overview of the analysis is revealed below;

Product Strength Analysis

Rating scale 1-9 (1=Extremely unattractive, 5=Industry average, 9= Extremely attractive

Milk Powder

Characteristics Weight Rating (1-5) Value

Quality 20% 9 1.8

Price 20% 9 1.8

Cost Base 20% 8 1.6

Brand Strength 20% 8 1.6

Profitability 20% 8 1.6

Total= (weight value) 8.4

* The sum of the weightings assigned to the different factors are added up to 100%

Table 1: Product Strengths analysis of Agora Powder milk

Opportunity in Bangladesh

Rating scale 1-9 (1=Extremely unattractive, 5=Industry average, 9= Extremely attractive

Dairy Industry

Characteristics Weight Rating (1-5) Value

Overall market size 20% 9 1.8

Projected market growth rate 20% 9 1.8

projected profit margin 15% 8 1.2

Global Opportunity 10% 8 0.8

Opportunity to Differentiate 5% 8 0.4

Regulatory Regime 5% 7 0.35

Demand Patterns 5% 9 0.45

Entry Barriers 5% 9 0.45

Distribution Structure 5% 7 0.35

Total= (weight value) 7.6

* The sum of the weightings assigned to the different factors are added up to 100%

Table 2: Industrial opportunity analysis in Bangladesh

Opportunity in Malaysia

Rating scale 1-9 (1=Extremely unattractive, 5=Industry average, 9= Extremely attractive

Dairy Industry

Characteristics Weight Rating (1-5) Value

Overall market size 20% 6 1.2

Projected market growth rate

20% 6 1.2

projected profit margin 15% 5 0.75

Global Opportunity 10% 5 0.5

Opportunity to Differentiate

5% 5 0.25

Regulatory Regime 5% 9 0.45

Demand Patterns 5% 8 0.4

Entry Barriers 5% 3 0.15

Distribution Structure 5% 9 0.45

Total= (weight value) 5.35

* The sum of the weightings assigned to the different factors are added up to 100%

Table 3: Industrial opportunity analysis in Malaysia

GE Matrix

Ind

ust

ry A

ttra

ctiv

en

ess

Hig

h

9

Med

ium

6

Low

3

0 3 6 9

Low Medium High

Product Strengths

B= Bangladesh, M= Malaysia

Table 4: GE matrix grid, positioning the country according their market attractiveness level.

1.5 Key summary of analysis

According to the GE matrix grid it can be seen that, Agora powder milk have potential

opportunity in both Bangladesh and Malaysia but, ranking-wise Bangladeshi market looks

more attractive than Malaysian market for the following reason;

According to the dairy industry of Bangladesh, the potential market for Agora powder milk is

very big while the country needs 7.227 million ton milk calculating 120ml per head (Iedap,

2012). With the 4.9 million of milking cows and 0.3 million of milking buffalo, the country is

producing only 2.686 million ton. Further 52 thousand ton milk is imported from aboard and

there is still shortage of 3.91 million ton. According to the growth rate of population in

Bangladesh, the potential market growth for milk consumers can be considered large and it

will also continue increasing in the future as the population rises (fao, 2012). Bangladesh

has high demand for the powder milk due the shortage of liquid milk production and the

country has revealed a green signal to the foreign companies by reducing the entry barriers

such as foreign investment in Bangladesh can be either 100% foreign owned or joint

ventures. Furthermore, the import tariff for milk powder is set at 20% which is also a good

indication for foreign products entry (fao, 2012).

However, with total 30 million populations Malaysia is average attractive market for Agora

powder milk. The country was heavily reliant on imported milk powder due to a vast shortage

of production in liquid milk but now in the livestock sub-sector (milk production), they are

achieving high growth (Fao, 2012). In line with many developing South Asian countries they

are becoming more rigorous and strict on foreign investment whereas the entry barriers for

foreign products are relatively high if Malaysia already has reputable position in that sector

(WTO, 2011). Currently, it is seen that Malaysia is having stable financial and legal systems

although not overly transparent, that support and encourage open trade. However,

opportunities still exist; there are still prospects for UK brand milk powders which can be sold

directly to the consumers. The Malaysian dairy industry is willing to import any source as

long as the price is competitive and the quality is good.

2.1 Background

From the industrial analysis it is found that Agora powder milk have a sizable market in both

Bangladesh and Malaysia but, it is still unknown that what is the present environment of the

country such as; how much suitable it is for Agora milk powder to enter in those selected

country? Who are the potential customers for Agora? What business policies the countries

have right now? What are the structures of the country? How much competition exists in

both countries?

However, to analyse the macro-environment PEST analysis is very useful to identify the

issues that create both business opportunity and threats in a host country (Meldrum and

McDonald, 2007). There are four key elements of a country are assessed through PEST

analysis, such as Political, Economical, Social and Technological (Meldrum and McDonald,

2007). An analysis of both countries’ condition is described below using the PESTEL

framework.

2.2 Political factors

According to Witcher and Chau (2010: 91), “political matters concern the influence that

government have on industries”. One of the major notable trends in political situation of

Malaysia is that the country is having a stable political environment compared to

Bangladesh. Due to conflicts between several political parties, Bangladeshi government is

facing difficulties to sustain stability in the country, and as a result several strikes and

protests are taken place by different parties (BBC, 2012). However, Bangladeshi

government is overcoming these barriers by implementing several rules and regulations and

acting on its best to reduce the intensity. In addition, Business in Bangladesh can be carried

out by a company incorporated locally or a company outside Bangladesh (bhclondon, 2012),

while the tariff rates for imported goods such as dairy product (powdered milk) is

comparatively lower than the other items (Worldbank, 2012: FAO, 2012). Furthermore,

investment is welcome at all sectors of Bangladesh and there is no limit for equity share thus

a foreign company can get the whole ownership of its business (Raa, 2010).

On the other hand, there is comparatively stringent trade policy in Malaysia than Bangladesh

as seen on the report of World Trade Organisation (WTO) such as any foreign investment or

distribution service must be locally incorporated with 30% of equity reserved for bumiputera

(WTO, 2010). Although Malaysian government is welcoming foreign products with good

quality but in reality the government is encouraging the foreign company only in the sector

where products are produced in low amount by Malaysia and also import taxes are relatively

high for those products (WTO, 2010).

2.3 Economical factors

Before entering into a country it is crucial to analyse the economical condition of the country

as depicted by Witcher and Chau (2010: 91) “economic factors concern the cost-related

matters for the organisation”. The analysis includes the inspection of economic growth,

exchange rate, GDP growth, purchasing power parity, GNP growth of a country. However,

Malaysia has one of the strongest and fastest-growing economies in Southeast Asia. As

concluded by Marshall Cavendish Corporation (2009), “Since the federation of Malaysia

gained independence from Great Britain in 1957, there has been significant structural

change in the economy”. Malaysia is an upper middle income level country with a great

improvement of standard of living while it is the 30th largest economy in the world by

purchasing power parity (CIA, 2012). The current growth rate of Malaysian national income

is 4% which is 2% less than Bangladesh. Although, Bangladesh is a less developing country

than Malaysia, comparatively it has satisfactory history of economical progression since

1996. The economic growth of the country increased by 6% every year accordingly from

1996-2011 and it is the 46th largest country according to their purchasing power parity

(Worldbank, 2012: CIA, 2012). A great advantage of Bangladesh is its low-cost labour force

which is a green signal for any foreign company that wants to distribute or market their

products using the Bangladeshi labours.

2.4 Social Factors

According to Henry (2008), “Social factors include cultural changes within the environment

and are often referred to as socio-cultural” and it includes demographics, education, culture,

health and environmental consciousness of the population of the country. According to CIA

(2012), Bangladesh is the 8th largest country of the world on the basis of population ranking

and most of its people are Muslim. It is seen from the CIA report that most of its population

are between 15-64 years (61% of the whole population) while between 1-14 years are the

second largest group (34.3%) and the rest of the people are the elder generation. A major

concern about the country is a significant percentage of the people live in the rural area

while the level of poverty is high in the country (major income level people live in the city)

Although, the milk consumption trends in urban and rural area may differ in Bangladesh but

there has been a significant change in the trends since there is a rising concern of quality

and safety as the population is receiving more education than before. Furthermore, a

growing health consciousness is also driving the people towards quality products while the

media/TV channel plays a great role to fill the gap between concern and demand (such as

people concern about the product they are using and they see advertisement on the TV

about a better product thus it becomes their new demand). However, according to the major

trends in the consumer behaviour in Bangladesh it is seen that foreign products like US and

UK brands have a positive image among the consumers and they are not attached to a

single brand while it changes as they find a better product, which is a great opportunity for

Agora milk powder. On the other hand, there are significant structural and cultural changes

seen in Malaysia while from every sector they are developing faster. Malaysia has a

multicultural and multiracial population consisting of Malays, Chinese, Indians and numerous

indigenous peoples (CIA, 2012). As a result of an outstanding literacy rate in Malaysia, the

country has a growing concern for health and environmental issues and there is also a great

need of high quality products. Competition is high within the country whereas, the powder

milk market is heavily dominated by Nestle Malaysia, Dumex Malaysia, Dutch baby milk

industries, New Zealand milk products (Ibp, 2010). The major trends seen in powder milk

buying behaviour is that halal products have a high preference (Halal is something that is

purely processed with maintaining the standard set by Muslim religion) while 60% of the

population are Muslim (Mida, 2012: CIA, 2012). Furthermore, poverty is reduced at a

satisfactory level in Malaysia while only 3% of the population are below the poverty line.

However, it is seen that both countries have a good rate of social development while the

distinction can be seen above. Considering the factors it can be argued that Agora milk

powder need to be presented in different ways in the selected countries because there is a

large gap between the countries according to their development speed and purchasing

power parity.

2.5 Technological factors

According to William and Green (2007), “technological factors involve changes in technology

and advances in the process of production”. As compared to Malaysia, Bangladesh has not

been much developed in the technological sectors, for instance; Malaysia is on the way to a

successful transformation from labour based industry to technology based industry (Jomo,

1999) while production process in Bangladesh is still heavily reliant on their labour force

(Sillitoe, 2000). However, a good point is that almost 70% of the people in Bangladesh have

access to media and television (Thedailystar, 2012), while the percentage of internet, mobile

phone users in Bangladesh is rapidly increasing. This is an indication that advertisement

thorough TV channel and online can reach a significant numbers of people in Bangladesh.

2.6 Summary of the analysis

From the PEST analysis it is seen that both countries have opportunity and threats for agora

milk powder. Compared to Bangladesh, Malaysia is more industrialised and fast developing

country which creates several entry barriers to foreign companies. On the other hand,

Bangladesh is less industrialised and less stable country which creates opportunities for

foreign companies whereas the entry barriers are relatively low. In this stage, the product

marketing strategies for Agora powder milk need to be very sensitive and carefully

considered so that the company can survive in those market (Proctor, 2000).

3.1 International Marketing Strategy

A strong global marketing strategy combines a broader analysis of segmentation, targeting

and positioning (Kleindl, 2007).

3.2 Segmentation

According to Stone (2007), “Segmentation involves and analysis of the nature and

composition of a market to identify groups of potential buyers who have similar needs or

characteristics, or display similar behaviour”. In this term, the segmentation for Bangladesh

and Malaysia are as follows;

Segmentation variables and breakdown for Bangladeshi and Malaysian market of Powder milk

Main Dimension Variables Breakdowns (Bangladesh) Breakdowns (Malaysia)

Geographic Segmentation

Region Emphasis on Major Cities and Metropolitan

area Nationwide

Density Urban Everywhere

Climate All (east, west) All (east, west)

Demographic Segmentation

Age 6-60 years old 6-60 years old

Gender male and female male and female

Income all above 1500$ all above 1500$

Occupation Housewives, Bachelors, student, officials Housewives, Bachelors, student, officials

Education Elementary 4th grade, High school and above Elementary 4th grade, High school and

above

Race Bangladeshi Malay, Chinese, Indians and others

Psychographic Segmentation

Personality Brand conscious, inclined for differentiation, health conscious and quick maturation with

foreign product

Brand conscious, inclined for differentiation and looking value for money product

Lifestyle Most of them are dependent on the head of the family (father/husband). Not very open

society like western freedom of choice, cultural

Behavioural Segmentation

Benefit Sought

communication benefit- communication benefit-

Nutritional information on Bengali and English language

Nutritional information on Malay, English, Chinese and Indian language

information text of the origin of product information text of the origin of the product

functional benefit- Functional Benefit-

healthier than liquid milk easy to use

easy to process healthy, quick disposable

Perceptual benefit- Perceptual Benefit-

good quality, competitive price good quality, competitive price

UK brand, good looking UK brand, good looking, standard size

Usage Rate Occasional (religious, cultural, officials), daily

basis, weekly basis Occasional (religious, cultural, officials), daily

basis, weekly basis

User Status Non-user, regular user Non-user, regular user

Loyalty Status none, medium, strong none, medium, strong

Table 5: market segmentation for Agora milk powder in Bangladesh and Malaysia

3.2.1 Evaluation of segmentation

As it seen on the table, the market segment in Bangladesh is different to Malaysia thus will

require different marketing strategies for each country (Havaldar, 2005), because the

structure and competition within the countries are different to each other.

3.3 Target market

Targeting the potential market is consisted of the willingness of the marketer such as how

many segments will be served in terms of the feasibility and acceptability of the segments

(Havaldar, 2005). However, based on the segmentation Agora milk powder will adopt

concentrated marketing strategy for Bangladesh on the basis of geographic segmentation

this is because the purchasing power of the urban people is considered higher and for a UK

brand product it will be hard to gain the attractiveness in the rural area (also it is found that,

in technology sectors Bangladesh is still struggling thus it can be assumed that the

transportation is not at satisfactory level between urban and rural area). On the other hand,

country with high purchasing power parity like Malaysia needs an undifferentiated marketing

strategy whereas the market will be considered as combination of all segments (Cant et al.,

2009)

3.3.1 Undifferentiated marketing strategy

With an undifferentiated marketing strategy the business choose to ignore the difference in

the market (Cant et al., 2009). As it is found in the analysis part that Malaysia is a high

economical growth country with satisfactory level of educated people, thus it can be

assumed that the residents are aware of the brand image and quality of the products around

them. In this regard a carefully designed product for mass market can be considered at the

initially stage of entry.

3.3.2 Concentrated marketing strategy

According to Havaldar (2005), “concentrated marketing focuses all the marketing efforts on a

single or relatively few, carefully defined segment (s)” in this term, the marketing strategy for

Bangladesh will focus on the consumers based on the geographic areas such as the people

who live in major cities.

3.4 Brand positioning

Brand or product position is the crucial part of marketing such as product is designed and

positioned based on considering the criteria that are needed to satisfy the target market

(Cant et al., 2009). According to Havaldar (2005), “positioning is how the firm wants its

products to be perceived by the target customers on important attributes or benefits”.

However, product positioning strategy in Bangladesh and Malaysia includes the following

steps;

3.5 Brand positioning in Malaysia and Bangladesh

Agora milk powder has several objectives to achieve in Malaysian and Bangladeshi market

from which the major objectives are; creating strong consumer awareness towards a new

UK brand powder milk, to establish wide brand recognition through the capture of market

shares in the powder milk industry and become the market penetrator in the particular

segment through continuous advertisement and promotion. However, to achieve the

objectives the following steps are crucial to success (Cant et al., 2009);

3.5.1 Product strategy

As in Malaysia the product will be for mass market a careful design of the product is very

essential in this stage. In contrast, agora milk powder in Bangladeshi market needs to be

very presentable as it will be only available in the city area. The core function of Agora milk

powder is to satisfy the needs of the consumers as a substitute of liquid milk. Thus for

Malaysian and Bangladeshi consumers the product will be designed according to the

following chart;

Product Strategy in Malaysia and Bangladesh

Packaging and labelling easy to open and close, agora milk powder label, plastic box

easy to open and close, agora milk powder label, plastic box

Branding colourful but moderately, aspects of quality, square shaped, agora milk powder logo with modern font

colourful but moderately, aspects of quality, square shaped, agora milk powder logo with modern font

Trade name Agora milk Powder™ , an UK product Agora milk Powder™ , an UK product

Brand personality high physical growth, energy, quick disposal, quality

high physical growth, energy, quick disposal, high quality, substitute of liquid milk

Language Arabic, Chinese, Indian, English and Malay English, Arabic and Bengali

Nutritional information calcium, mineral, GDA and so on calcium, mineral, GDA and so on

Product class Foods→ Dairy products→ Milk→ Powder milk Foods→ Dairy products→ Milk→ Powder milk

Table 6: Product Strategy in Bangladesh and Malaysia.

3.5.2 Price Strategy

The appropriate price for product is demanded by all levels of customers. For a competitive

market like Malaysia the pricing strategy must be effective and sensitive otherwise the long

term growth will not be achieved (Paley, 2006). In this term, Agora milk powder will initially

follow the current market leader like Dumex Malaysia, Nestle Malaysia to give a choice to

the potential consumers who perceive foreign products have high quality than local. This

strategy is very effective such as Paley (2006), professes “when launching new products,

pricing strategies can range from skimming a market with high prices, penetrating with low

prices or following the market leader”. In contrast, pricing strategy for Bangladesh will be

penetrating the market through slightly lowering the price than local market. This strategy is

suitable for entering into Bangladeshi market whereas it will drive customers from two points

such as low price versus foreign product.

3.5.3 Promotion Strategy

According to Lawrence et al., (2008) “promotion is the most exciting part of the marketing

mix which covers personal selling, advertising, public relations and sales promotion”. It is

found in the analysis part that the culture, economy, structure, belief, idea, shared views vary

in the selected countries so the promotion strategy will also vary as the same strategy

cannot be viable for two countries (Paley, 2006).

Promotion Strategy for Malaysia and Bangladesh

Objective To create awareness among the milk consumers about the launch of UK brand powder milk

Bangladesh Malaysia

Message "Agora milk powder is for all aged people and has been processed through highest standard of quality checks in UK"

" high quality product, price local but brand global"

Concept "choose the right product for healthy life" "give pure milk to your family" "every day healthy day"

"think different" "smart people judge the difference"

Media Selection

TV Chanel BTV, ATN Bangla, Channel i, Desh TV etc.

TV Chanel TV3, NTV7, 8TV, TV9 etc.

Radio Chanel

Radio Foorti, Radio today, Radio Amar

Radio Chanel

Klasik Nasional FM, One FM, Capital FM

Magazine National, Food related, Occasional

Magazine National, Food related, Occasional

Internet Facebook marketing, banners on food related website official website: www.agoramilk.com

Internet Facebook marketing, banners on food related website official website: www.agoramilk.com

Outdoors Banner on the bus stand Outdoors Banner on the bus stand

Billboard, large screen tv on the street

Billboard, large screen TV on the street

Table 7: Promotion Strategy in Bangladesh and Malaysia

Different types of media will be selected on the basis that the new generation’s consumers

are not attached to a single media as their media preference is broadening day by day such

as there are about 2.8 million users of facebook in Bangladesh and 11 million in Malaysia

(socialbakers, 2012).

3.5.4 Advertising concept

The product presentation into consumers mind is a crucial part of brand positioning such as

how the product will be presented in the major media like TV (Paley, 2006). In this regard,

advertising in Bangladesh can focus on the difference between good quality products and

poor quality products, health awareness related advertisement, different use of milk powder

and so on. In contrast, for a mass market like Malaysia the product advertisement can

combine continuous advertisement through big celebrities, renowned face. The advertising

activities can also include arranging quiz show, talk show, cooking program on the television.

3.5.5 Promotional mix

During a product launch it is very crucial to add promotional mix so that the consumers can

be driven towards the product (Lawrence et al., 2008). It is argued that promotion of

consumer products has great impact on the developing countries and it drives sales

(Havaldar, 2006), so that promotional activities in Bangladesh can combine giving spoon

free with each packet, collecting six stickers from the package and getting one free and so

on.

3.6 Place strategy

Agora milk powder will be distributed through shopping complex, super shop, and large size

confectionaries in the major cities (Dhaka, Chittagong, Barisal, and Shylet) of Bangladesh. In

Malaysia the product will be available in the super shops, medium sized confectionaries

located nationwide.

3.7 Entry mode

According to Jones (2009:8), “international market entry modes refer to the methods of

business organisation employed by companies to enter international markets for the purpose

of undertaking value-creating activities”. However, there are four effective entry modes

available to Agora milk powder such as; Indirect exporting via export management

companies, Direct exporting via foreign distributors and sales agents, licensing and joint

ventures. Licensing and joint venture is suitable for the company who wants to produce the

product abroad (Jones, 2009), while at the initial stage Agora milk powder will keep its

manufacturing and production process in UK and choose to directly export the product to the

local agents in Malaysia and Bangladesh. The benefits of distributing the product through

local agents are;

The avoidance of the recruitment, training and payroll cost of the employees to enter

into overseas market

Agents are well placed to identify and exploit opportunities

Agents have a good relationships with the potential buyers and for a new company

like us it will take longer

Agents have clear understanding of the competitions

Using an agent allows to maintain more control over matters such as final price and

brand image compared to distributor.

Quick and easy to reach the target market compared to finding and selling to end

users.

3.7.1 Export to local agents

In this stage the sales representative team will visit the market in the selected countries and

choose the agents on the basis of their expertise. The agents will be given the exclusivity so

that the concentration can be given on only Agora milk powder thus they will represent

Agora milk powder in the foreign country on behalf of the company. Furthermore, this

strategy will be beneficial for Agora milk powder as there can be greater control over the

marketing mix (Andexer, 2008). However, there some export related problem exist such as

which need to be taken into account before exporting the product into foreign market such

as;

3.7.1 Agent agreements

The agreement between exporter and agents are crucial to success (Andexer, 2008). In this

stage, the agreements will be clearly stated using legal documentary and the issues will be

stated like; the commission rate, pricing strategy, promotional activities, liabilities of both

parties, payment terms, agreement period, exclusivity, clear descriptions of products,

intellectual property and so on (Andexer, 2008).

3.7.2 Export risk

There are certain export risk exist such as logistical, financial, political, exchange rate and so

on. “The quality of trade logistics, particularly port logistics, has an enormous impact on

trade” (UN, 2012). In analysis part, it found that the Malaysia have good structure overall

such as the port infrastructure and transportation process is as a satisfactory level while

Bangladesh have a less favourable structure. In this stage, the careful consideration for

exporting to these countries includes (Andexer, 2008);

Choosing the right method of shipping i.e. by road, by sea, by air, by rail

Analysing the potential shipment risk

Contracting with logistics insurance company

Payment method and exchange rate and so on.

4. Concluding Remarks

An attempt has been made in this study to analyse the potential market of Agora milk

powder in two selected countries (Malysia and Bangladesh) and to offer the product in terms

of opportunities and threats found in the selected countries. The major notable trends found

in the analysis that both countries have certain level of risk and opportunities for foreign

company such as in Bangladesh the opportunities for foreign product is high whereas the

infrastructure of the country is relatively poor. In contrast, the opportunities for foreign

product are comparatively low in Malaysia whereas the infrastructure of the country is ideal

for doing business. However, considering the threats and opportunities two different

marketing strategies have been adopted so that each strategy suits the market in terms of

the consumer behaviour of the countries. In this way, Agora powder milk can position itself in

the selected country to achieve a long term growth.

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Appendix:

CIA at a glance

The Central Intelligence Agency (CIA) is an independent US Government agency

responsible for providing national security intelligence to senior US policymakers. CIA is

mostly renowned because it holds the overall Geographic, demographic, economic, Defence

information of every country thus it is a very reliable source of data bank.

World Bank at a Glance

Established in 1944, the World Bank is headquartered in Washington, D. C. and have more

than 9000 employees in more than 100 offices worldwide. In general sense Worldbank is not

a bank like others but a unique organisation with the aim of reducing poverty and supporting

development. Worldbank is also considered as a valid and reliable source of data about

different countries while most of the data are updated constantly.