MBA(Report

Jagannath University, Dhaka 9
Jagannath University, Dhaka
9



"Marketing Challenges of Garments Products in Bangladesh: A Study on DGN Apparels Limited"

































1.1 Introduction
The tremendous success of readymade garment exports from Bangladesh over the last two decades has surpassed the most optimistic expectations. Today the apparel export sector is a multi-billion-dollar manufacturing and export industry in the country. The overall impact of the readymade garment exports is certainly one of the most significant social and economic developments in contemporary Bangladesh. With over one and a half million women workers employed in semi-skilled and skilled jobs producing clothing for exports, the development of the apparel export industry has had far-reaching implications for the society and economy of Bangladesh.
The Marketing Concept is a philosophy and like any philosophy it cannot be defined with precision. It is in fact an attitude governing the whole management approach. One of the recent slogans of today's economist is ' either export or be ruined'. They are not willing to show any other path 'between this. The present export pattern of Bangladesh has changed. Accordingly to the above slogan. Now eight commodities have taken the position of 93% of the export earnings and ready-made garments are one of those. . The acceptance of our products is exceptional in abroad due to its quality. We have able to export our product in many countries of the world. Still there are huge scopes of export in many countries of the world. Our experts are searching the new avenues for this. As it provides service to the mankind, so many entrepreneurs are showing interest in this industry which will provide both profit and also service to the ailing people of the world. Some companies of our country are producing raw materials for which saves foreign currency and strengthen the economy of our country.
Major products of Bangladesh Ready-made Garments industry for export Marketing are woven shirts, trousers, Jackets t-shirt, short Briefs and major Buyers of Bangladesh Garments are the USA, EEC, Canada and other European Countries. The tremendous success of readymade garment exports from Bangladesh over the last two decades has surpassed the most optimistic expectations. Today the apparel export sector is a multi-billion-dollar manufacturing and export industry in the country. The overall impact of the readymade garment exports is certainly one of the most significant social and economic developments in contemporary Bangladesh. With over one and a half million women workers employed in semi-skilled and skilled jobs producing clothing for exports, the development of the apparel export industry has had far-reaching implications for the society and economy of Bangladesh.



1.2 Objectives of study

Broad Objectives:

The general objective of this study is to determine the present activities of garments manufacturing and the significance of their role for smooth, efficient and effective marketing process of garment products overseas.

Specific Objectives:

However the specific objectives of the study may be described as:

To identify the challenges of Garment Products in Bangladesh Market.

To sketch the overall condition of the Bangladeshi garments product in the global market.

Examine the export marketing process of garment products through direct marketing & Buying House from our country.

Investigate the obstacles to the efficiency and effectiveness of smooth marketing of garment products through direct marketing & Buying Houses.

To give some recommendation how the garment products can face the challenges and overcome the obstacles.

1.3 Scope of the study
The study will give a clear idea about the marketing challenge of ready-made garments sectors.

The study will also help us to understand the role of ready-made garments sector for the Socio economic development of the country.

It will flourish obstacles to the existing roles of buying houses in exporting the garment products.

Finally, ways to overcome the obstacles to their existing roles.
1.4 Limitations of the study
Since our study is based on both primary and secondary data, there is a possibility of getting fake information. If the surveyed personnel provide us with any fabricated information about their opinion of their organization, then the report findings may be erroneous. Above all, this study is weak in some points. The notable ones are as under:
The survey was conducted in a very short time so we were not able to collect more information.

This survey made on crisis situation of Bangladesh, so it was difficult to collect more samples.

Only the big and the reputed Garments Company consider here as sample.

The questionnaire contains some questions that, if answered properly, might damage the company's image. In this type of questions, the respondents might provide socially acceptable answers. This risk was unavoidable.

Another limitation of this study is the person's private information were not disclosing some, data and information for obvious reasons, which could be very much useful.

Lack of experience in this field.

Lack of proper authority to conduct the interview program
Due to long distance between the factory and University campus it was very difficult to communicate and meet with the supervisor.






1.5 Literature review
Several authors have analyzed aspects of the garment industry in Bangladesh. Of the various aspects of the industry, the problems and the working conditions of female workers have received the greatest attention. Experts believe that the Bangladesh RMG sector has potentials to grow much further by steadily increasing its global market share and emerge as the world's leading RMG-exporting country surpassing China. For example, much deeper penetration into European Union (EU) and US market than at present supplying only 9.2 and 5.6 per cent respectively of the markets and strong diversification of new markets into countries such as Japan, Australia, Brazil, Russia, Korea, China, Mexico and Turkey can help significant expansion of current export volumes and reduce dependence on the traditional export destinations. However, the industry is now under serious scrutiny by international buyers due to devastating factory fires and political turmoil in the recent past badly affecting the industry and tarnishing the country's image.
A study by Munir Quddus & Salim Rashid looks at the aspects of garments exports from Bangladesh. They summarized that, the challenge of readymade garment exports from Bangladesh over the past two decades has surpassed the most optimistic expectations. The paper reviews the literature on this industry, presents recent data on the sector's performance, and evaluates future challenge in the international and domestic clothing industry. It concludes that although the impact of the flood was unexpectedly benign, the entrepreneurs face important challenges from the health of the domestic banking sector, the East Asian economic crisis, and the deregulation of the global clothing business as a result of the phasing out of the Multi-fibre agreement in the year 2005.
A study by Md. Salim Uddin and Mohammed Abu Jahed (2007) revealed that how the RMG sector is contributing as mover of the socio economic development of Bangladesh. According to them, the garments industry has been leading the Bangladesh economy since the early 1990s. Garments are the country's biggest export making up about three quarters of total exports, and the industry is a symbol of the country's dynamism in the world economy. The industry is also the main non-farm formal sector creating employment opportunities for the poor. The greater part of the workforce is female, less educated, and has migrated from rural areas. Thus, the garment industry is seen as contributing to poverty reduction in Bangladesh by providing employment opportunities with higher wages for the poor who would otherwise be engaged in low-wage economic activities in rural areas. There was much discussion about the survival of Bangladesh's garment industry prior to the final phase out of the Multi-Fiber Agreement (MFA) from 1 January 2005 which was expected to greatly intensify competition in the international garment market. One of the most influential forecasts was that only China and India would gain from the MFA phase out and that Bangladesh and other smaller suppliers of garments would lose out. Fortunately, there was no immediate major adverse effect in Bangladesh. Garment exports to the United States grew over the whole of 2005, while those to EU declined only slightly. However, the prospects for the industry in Bangladesh are not certain and the future trend in garment exports needs to be watched.
Dr. Greg gajewski & Alex Riley (2005) discussed about Bangladesh's export trade practices and their effect on the competitiveness of the garment industry. They said, a wide body of evidence suggests that increased openness to trade and greater export competitiveness contribute to higher rates of economic growth. Export competitiveness depends, in part, on Customs and other administrative export trade practices, as well as on the efficiency of port operations and the transportation linkages between the ports and the main centers of export production.
In this particular study we will be focusing on the contribution of garments sector in the economy of Bangladesh, the involvement of women workforce in this sector. We will also highlight the ways to improve the efficiency of the labor force, the foreign earnings through the export of garments products. In the last part, we will have some recommendation as well as concluding remarks.
Lewis(2005) said the abolition of quota system thus brings new challenges for Bangladesh's apparel industry to continue its current status and enhance it in a free flow of apparel trade.
It is reported in the press that the apparel manufacturers are experiencing 30-35 per cent decline in orders due to compliance failures. A series of major industrial accidents between November 2012 and April 2013 which led to deaths of over 1200 workers has raised serious concerns regarding compliance in labour standards and workers safety. Additionally, almost continued labour unrest and long-standing political chaos have created a severe image crisis worldwide and put Bangladesh's international competitiveness at greater risks. The enormity of industrial accidents, unfair treatment of the workers, abysmally low wages, unsafe working conditions, lack of workers' rights in the absence of trade union rights, etc. have become issues of serious concerns and gained renewed significance in the buyers' decisions to source RMG supplies from Bangladesh. Due to lack of compliance failures, Bangladesh lost GSP (Generalised System of Preferences) facilities in the US and similar threats are looming large from the European Union markets which may prove fatal to the long-term sustainability of international trade.

The major challenge is to elevate private investment to the level envisaged in the perspective plan. Despite relentless efforts, the whole setting is not yet conducive for private sector investment. Other critical challenges that may pull growth momentum down are: recent concerns on matters relating to labor rights and working conditions in RMG factories and its probable impact, less than expected progress in establishing base plants in the power sector, energy security, and internal stability. Besides, huge investments demand for infrastructure, budget implementation, labor efficiency, institutional reforms for good governance are other impediments. Conversely, the areas of strengths and opportunities are extensive and bright. Firmness in export and remittance earnings, ongoing higher investment in physical and social infrastructure, progress in human development, diffusion of technology, matured macroeconomic management of Bangladesh. How to overcome the challenge of the garments sector of Bangladesh in our recommendation sector we will describe about it.

1.6 Methodology of the study
In order to conduct such a study the reports prepare must follow some specific methods. This report is based on the Primary and Secondary data.

Organization Covered:

This study mainly covers not a particular organization. The relevant data are collected from the head office of the DGN Apparels Ltd.


1.7 Measuring Instrument

1.6.1 Research type:

Basically it is a descriptive research.

1.6.2 Source of data:

All the relevant data regarding this study are collected from two sources. These are:

Primary data:

It includes the following sources of data. In depth interview with questionnaire.





Secondary data:

I need much information for the report, which we get from secondary data. These are:


Annual Report of DGN Apparels Ltd.

Different types of document of DGN Apparels Ltd.

Various published documents from BGMEA.

World Wide Web


1.8 Questionnaire Design

Questionnaire has been designed with the semi-structured questions with

Close ended questions is used in the questionnaire and average administer time is 20 minutes.

12 questions.


1.9 Data Analysis & Interpretation

Question 1:

From this question we found that 50% are strongly agreed, 30% are agreed, and 20% are neutral among total respondents.

The criterion is selected to see the emphasis of buying houses to the suitable location of garment manufacturers. With its response this criterion has shown that buying houses poses insignificant value on this matter. Location is part of Good Business of RMG.


Question 2:

From this question we found that 30% are strongly agreed, 40% are agreed, and 30% are neutral among total respondents.

The obstacle is inefficient garment workers- a virulent gangrene in the production systems. This criterion is also marked by more than two third of the respondents thus it is ranked as third.

Question 3:

From this question we found that 20% are strongly agreed, 30% are agreed, and 50% are neutral among total respondents.

The ranked minor obstacle was the utilization of child labor in Bangladesh and its related aspects. Here we have seen that although the consumerism is against this utilization but it is sometimes defeated for the availability of low cost labor.
Question 4:

From this question we found that 30% are strongly agreed, 40% are agreed, and 30% are neutral among total respondents.

The major obstacle, natural calamities and political crises are responded by all of the respondents and ranked as first. This reveals that the activities of buying houses are very much vulnerable to this type of obstacle.

Question 5:

From this question we found that 20% are strongly agreed, 30% are agreed, 30% are neutral, 20% are Disagree are among total respondents.

One of the major problems faced by the buying houses is the poor product quality of the RMG products. For this poor quality buyers become dissatisfied and avoid the further contact with the same buying houses. Almost everyone agreed and marked it as a major problem. Thus it is rap-ked as first

Question 6:

From this question we found that 20% are strongly agreed, 30% are agreed, 30% are neutral and 20% disagree among total respondents.

The one is the personal relationship of buying house employees with suppliers. This is an important reason of inefficiency in the selection process of suppliers because in this process expert employees have influence and their bias may distort the effectiveness of the selection process.

Question 7:

From this question we found that 20% are strongly agreed, 30% are agreed, and 50% are neutral among total respondents.

The criterion is the failure to select the desired efficient suppliers because their power of choice becomes limited while the excess demand is created by seasonal effect.


Question 8:

From this question we found that 20% are strongly agreed, 20% are agreed, 30% are neutral, and 30% are disagree among total respondents.

The criterion is chosen to investigate the emphasis on the scheduled product delivery by garment manufacturers. Here it has found that buying house also gets very much annoyed by the late, delivery of suppliers.

Question 9:

From this question we found that 30% are strongly agreed, 30% are agreed, 40% are neutral and 30% are disagree among total respondents.

Short shipment or the failure to supply the desired products is another significant problem of buying house with the huge response of the respondents at is ranked as second. We need complete the production just in time for shipment schedule. By this way we can reduce short shipment.

Question 10:

From this question we found that 20% are strongly agreed, 30% are agreed, 40% are neutral and 10% are disagreeing among total respondents.

Document delay and the improper document are the concluding major problems of buying houses.

Question 11:

From this question we found that 30% are strongly agreed, 40% are agreed, and 30% are neutral and among total respondents among the criteria.

High bargaining tendency in exchange is one of most selected criterion among all the other criteria. This criterion is chosen to investigate whether foreign buyers show the bargaining tendency and how much that is in this industry. With the highest response it is revealed that the tendency prevails and it dissatisfies the respondent buying houses.


Question 12:

From this question we found that 30% are strongly agreed, 30% are agreed, and 40% are neutral among total respondents.

The one was the ineffective communication skill posses by the buying houses. A large part 'of the respondents has mentioned it as the minor obstacles as a result it got the second ran













































2.1 Present Situation of Bangladesh garments industry
There is that old adage, don't kill the golden goose. Why I compare Bangladesh garments sector with the golden goose? The reason is the garment sector in Bangladesh has been giving for many years. Bangladesh is the second largest exporter of readymade garment products trailing China according to the McKinsey report (2011). Bangladesh's garment exports during July-June 2012-13 period climbed by about 12.7 percent to US$ 21.515 billion over exports of US$ 19.089 billion made during the corresponding period of 2011-12. In 2012-13, the top three export destinations for Bangladesh garments were Europe, which accounted for US$ 12.56 billion, followed by the US and Canada, which accounted for US$ 4.99 billion and US$ 980 million, respectively. But now it has received bad news. Recent incidents like fire in the Tazreen Fashions factory in November last year that killed more than 110 and the collapse of the Rana Plaza garment factory building in April that killed over 1,100 people and more than 2,500 were injured in the disaster. It may be the second biggest industrial accident in recent history. As a result, The President Barack Obama-led US government in June suspended Bangladesh from the Generalised System of Preferences (GSP), which allows duty-free entry of over 5000 goods to the US market from least developed countries.
Now, RMG products (which make up most of the US import from Bangladesh) are not included in the list of duty-free products in GSP, there will an export fall of about $40 million. In August, Garment factory workers clashed demanding a Tk 8,000 minimum monthly wage. Many factories closed for clashing. The owners finally agreed to pay Tk 5,300 as prescribed by a government-endorsed wage board on Nov 4. In November, 18,800 people lost their work for fire in Standard Group. The factory was among the ten biggest in the country and it was the biggest supplier of Gap in Bangladesh. The loss to the firm could run into more than US$100-million. In December, The European Parliament has threatened to withdraw GSP, the duty and quota-free access to EU market that Bangladesh enjoys. The European Union buys more than $12 billion in Bangladeshi garments each year, or roughly three-fifths of the country's production. If the EU were to withdraw or suspend the facility, the price per unit of garment will rise and this may lead to many European buyers turning their backs on our products. So, Bangladesh would suffer a huge setback.
Due to the recent political unrest, Bangladesh RMG sector losses in billions of taka every day. The blockades have put the garment sector in a tight corner as exporters are counting losses from order cancellation and rising transport costs. Buyers are cancelling orders as exporters fail to meet the lead time due to transport crisis. Some buyers are also imposing penalties in case of delayed shipment, cutting prices of garment products and transport costs have surged by around 30 percent due to expensive air shipment. Many factories have halted production as they can't bring imported raw materials from ports. The BGMEA's research and development team has collected three-day data (December 1-3) from 10 exporters to assess the overall losses caused by the blockade.
Orders worth $3.96 lakh were cancelled during the period, while the exporters spent $3.08 lakh on air shipment. Many small factory owners may go bankrupt due to failing shipment on time. So that's the trap: the golden goose is caught between a rock and a hard.

2.2 Important issues related to the Bangladesh ready-made garment industry
Factories of ready-made garments have developed with the growth of garment export of our country through buying house and direct marketing. It is the combination of all marketing activities relating to searching foreign garment buyers and local buying house for the order of garments products, taking order of ready made garment products form them, execute order to local factories and providing overall support to the both prospective buyers and trims suppliers. It has not been a long time since Garments have started sprouting up here and there. Only a few years back where it was difficult to find a reliable and quality Buying House, but now, there are so many of those. Garments industry is the highest industrial sector in Bangladesh. In one hand foreign Buyers and buying house of garment products are largely dependent on this industry for buying RMG, who are capable to produce and supply buyers demanded products. In other hand trims producers are also dependent on this industry for their products who places the order of certain garment item such as sweater that the producer produces.
Year
Issue
2004-2005
Early period of growth
2005-2006
Boom days
2006-2007
Imposition of quota restriction
2007-2008
Knitwear sector developed significantly
2008-2009
Child labor issue and its solution
2009-2010
Withdrawal of Canadian quota restriction
2010-2011
Phase out of quota restriction
2011-2012
Riots and strike by garments labor
2012-2013
Stable growth
Source: Compiled by the databases of the Bangladesh Garment Manufacturers and Exporters Association, and the Export Promotion Bureau, Bangladesh.

So the relationship between garment industry and buying house industry are interdependent. The existence of one without other is hardly possible. The reason for this again exporting garment product involves so many stages from marketing to distribution, which is not possible by any single group to do alone. For the convenience of both buyers and suppliers, the buying house industry today has developed enormously with a vision to perform marketing and distribution task of garment industry.

2.3 A Glimpse of the Growth and Status of Ready Made Garment Export of Bangladesh
Bangladesh economy has performed well over the last decade with GDP growing by 6-7%, while many of its competitors have faltered and lost their ways (Growth has been over the median of 'Ba' rated countries and BRIC). The Economy has been experiencing steady growth over the last decade and prospects are looking better for the coming one, with a booming RMG sector, flourishing remittance flow, record high foreign currency reserve and international investors' interest in FDIs. Geographic proximity to emerging Asian powerhouses – India and China- will further add impetus to the country's drive towards middle income status.
Year
Export of RMG
(in Million US$)
Total export of
Bangladesh (in
Million US$)
% of RMGS to
total Export
1998-1999
31.57
811.00
3.89
1999-2000
116.20
934.43
12.44
2000-2001
131.48
819.21
16.06
2001-2002
298.67
1076.61
27.74
2002-2003
433.92
1231.20
35.24
2003-2004
471.09
1291.56
36.47
2004-2005
642.16
1523.70
40.96
2005-2006
866.82
1717.55
50.47
2006-2007
1182.57
1993.92
59.31
2007-2008
1555.79
2533.90
61.40
2009-2010
2547.13
382.00
65.61
2009-2010
3001.25
4418.28
67.93
2010-2011
3781.94
5161.20
73.28
2011-2012
4019.98
5212.86
75.67
2012-2013
4087.99
5375.56
76.82


2.4 Apparel-The Highest Export Earning Sector of Bangladesh
Exports have been growing based on the blossoming RMG sector which has clocked USD 23 billion over 2013. Remittance revenues has grown to the tune of USD 12 Billion, albeit at a slower pace. Bangladesh is experiencing record high forex reserve position, currently standing at USD 19 billion. The current reserve can comfortably cover 7 months of country's import and the Forex reserve is expected to grow with steadily improving RMG export and growth in remittance earning.

year
Rmg Export value (million us $)
2003-2004
1182.57
2004-2005
1445.22
2005-2006
1555.79
2006-2007
2232.09
2007-2008
2547.13
2009-2010
3001.25
2010-2011
3781.94
2011-2012
4019.98
2012-2013
4002.01


2.5 Size of the garments industry of Bangladesh
The garment industry is by far the country's most important manufacturer, earning around $5 billion annually and accounting for about two thirds of all exports. Bangladesh has about 4,000 garment factories with up to 10 million livelihoods dependent on it directly or indirectly. In 2006 it provided jobs for 2.2 million people, accounted for 10.5% of the country's GDP, and contributed 40% of its manufacturing output. Exports have been growing at an impressive rate in recent years. In 2006/07 alone, they increased by 18.2% to reach US$9.6 billion, a record level for the fifth consecutive year. The contribution to GDP increases at 13.25% in 2007. About 80 per cent of garment workers are women. The Ready Made Garments sector has more potential than any other sector to contribute to the reduction of poverty. Despite the phenomenal success of the RMG sector the working conditions and wages of workers in the industry are cause for serious concern. Bangladesh's current position as a leading garments exporting nation needs to be consolidated. The economy-wide reverberations of failure would be disastrous. We believe it is in everybody's interest to sustain this industry – an industry which changed the lives of so many people, particularly women, in Bangladesh.

2.6 Bangladesh garments industry is now matured
Bangladesh garments industry has just woke up one morning and find itself a matured one. If we follow DS reports on the conditions of Bangladesh garments industries, we may as well have the same idea. Until 1/11/2013, as per some media, everything was a mess. Now a day, while teachers and lawyers can't hold elections, garments industries owners hold elections under direct government patronage. And DS must also speak well of the team mates. Maturation of a large industry like RMG sector in Bangladesh is not an overnight phenomenon. The industry was trying to be in a matured stage from last ten years but the unrest political situation was the main obstacle. Bangladesh's garments exports have experienced a boom from the last two years because of a stable business climate under the country's state of emergency. The nation's exports of knitted and woven items rose by nearly 17 percent to a record 10.7 billion dollars in the financial year to June 2013. And now the industry is at the matured stage.



2.7 Problems surrounding ready-made garments sector in Bangladesh
The garment industry of Bangladesh has been the key export division and a main source of foreign exchange for the last 25 years. National labor laws do not apply in the EPZs, leaving BEPZA in full control over work conditions, wages and benefits. Garment factories in Bangladesh provide employment to 40 percent of industrial workers. But without the proper laws the worker are demanding their various wants and as a result conflict is began with the industry
1. Raw materials:
Bangladesh imports raw materials for garments like cotton, thread color etc. This dependence on raw materials hampers the development of garments industry. Moreover, foreign suppliers often supply low quality materials, which result in low quality products.
2. Unskilled workers: 
Most of the illiterate women workers employed in garments are unskilled and so their products often become lower in quality.
3. Improper working environment:
Taking the advantages of workers' poverty and ignorance the owners forced them to work in unsafe and unhealthy work place overcrowded with workers beyond capacity of the factory floor and improper ventilation.
Most of the garment factories in our country lack the basic amenities where our garment workers sweat their brows from morning to evening to earn our countries the major portion of our foreign exchange. Anybody visiting the factory the first impression he or she will have that these workers are in a roost. Improper ventilation, stuffy situation, filthy rooms are the characteristics of the majority of our factories. The owners profit are the first priority and this attitude has gone to such an extent that they do not care about their lives.
 4. Lack of managerial knowledge:
There are some other problems which are associated with this sector. Those are- lack of marketing tactics, absence of easily on-hand middle management, a small number of manufacturing methods, lack of training organizations for industrial workers, supervisors and managers, autocratic approach of nearly all the investors, fewer process units for textiles and garments, sluggish backward or forward blending procedure, incompetent ports, entry/exit complicated and loading/unloading takes much time, time-consuming custom clearance etc.
5. Gendered division of labor:
In the garment industry in Bangladesh, tasks are allocated largely on the basis of gender. This determines many of the working conditions of women workers. All the workers in the sewing section are women, while almost all those in the cutting, ironing and finishing sections are men. Women workers are absorbed in a variety of occupations from cutting, sewing, inserting buttons, making button holes, checking,cleaning the threads, ironing, folding, packing and training to supervising.
 Women work mainly as helpers, machinists and less frequently, as line supervisors and quality controllers. There are no female cutting masters. Men dominate the administrative and management level jobs. Women are discriminated against in terms of access to higher-paid white collar and management positions. When asked why they prefer to emply women foe sewing, the owner and managers gave several reasons. Most felt that sewing is traditionally done by women and that women are more patient and more controllable than men.
 6. Wages:
The government of Bangladesh sets minimum wages for various categories of workers. According of Minimum Wage Ordinance 1994, apprentices' helpers are to receive Tk500 and Tk930 per month respectively. Apprentices are helpers who have been working in the garment industry for less than three months. After three months, Apprentices are appointed as helpers. Often female helpers are discriminated against in terms of wages levels, and these wages are also often fixed far below the minimum wage rate. A survey conducted in 1998 showed that 73% of female helpers, as opposed to 15% of their male counterparts, did not receive even the minimum wage.
7. Insufficient of loan:
Insufficiency of loan in time, uncertainly of electricity, delay in getting materials, lack of communication, problem in taxes etc. Often obstruct the industry. In the world market 115 to 120 items of dress are in demand where as Bangladesh supplies only ten to twelve items of garments. India, south Korea, Hong Kong, Singapore, Thailand, Taiwan etc, have made remarkable progress in garments industries. Bangladesh is going to challenge the garments of those countries in the world market.

 8. Unit labor cost:
Bangladesh has the cheapest unit labor cost in South Asia. It costs only 11 cents to produce a shirt in Bangladesh, whereas it costs 79 cents in Sri Lanka and 26 cents in India. Clearly, Bangladesh's comparative advantage lies in having the cheapest unit labor cost.
 9. Working hours:
Though the wages are low, the working hours are very long. The RMG factories claim to operate one eight-hour shift six days a week. The 1965 factory Act allows women to work delivery deadlines; however, women are virtually compelled to work after 8 o'clock. Sometimes they work until 3 o'clock in the morning and report back to start work again five hours later ar 8 o'clock. They are asked to work whole months at a time the Factory Act, which stipulates that no employee should work more than ten days consecutively without a break.
 10. Poor accommodation facilities:
As most of the garment workers come from the poor family and comes from the remote areas and they have to attend to the duties on time, these workers have to hire a room near the factory where four to five huddle in a room and spend life in sub human condition.
For four to five workers there is one common latrine and a kitchen for which they have to pay from Tk=2000 to Tk=2500/-.They share this amount among themselves to minimize the accommodation expense.
One cannot believe their eyes in what horrible condition they have to pass out their time after almost whole day of hard work in the factory. After laborious job they come into their roost, cook their food and have their dinner or lunch in unhygienic floor or bed and sleep where they take their food. They share the single bed or sleep on the floor.
 The owners of these factories must not treat the workers as animals. The owners of these factories who drive the most luxurious car and live in most luxurious house do ever think that these are the workers who have made their living so juicy. Will these selfish owners ever think of these workers of their better living for the sake of humanity by providing better accommodation for these workers in addition to providing with the job.
11 Safety Problems:
Because of the carelessness of the factory management and for their arrogance factory doors used to be kept locked for security reason defying act
 
Safety need for the worker is mandatory to maintain in all the organization. But without the facility of this necessary product a lot of accident is occur incurred every year in most of the company. Some important cause of the accident are given below-
 
Routes are blocked by storage materials
Machine layout is often staggered
Lack of signage for escape route
No provision for emergency lighting
Doors, opening along escape routes, are not fire resistant

Doors are not self-closing and often do not open along the direction of escape
Adequate doors as well as adequate staircases are not provided to aid quick exit
Fire exit or emergency staircase lacks proper maintenance
Lack of proper exit route to reach the place of safety
Parked vehicles, goods and rubbish on the outside of the building obstruct exits to the open air
Fire in a Bangladesh factory is likely to spread quickly because the principle of compartmentalization is practiced
12. Political crisis:
Garments industries often pay dearly for political unrest, hartal and terrorism etc. The international market has withdrawn quota advantage over garments export form Bangladesh since December 2005. Bangladesh has to advance cautiously for getting better position of her garments in the world market. Finally destruction of twin tower in 11 September 2001. invasion on Afghanistan and Iraq and depression in world Economy have seriously affected the export trade of Bangladesh.

 13. Price competitiveness:
China and some other competitors of Bangladesh have implemented sharp price-cutting policies in exporting garment products over the last few years, but Bangladesh has failed to respond effectively to such policies. China was able to drop the export price of 29 garment categories by 46 per cent on average in the United States within a year, from $6.23 per sq metre in December 2001 to $3.37 per sq metre in December 2002. Bangladesh needs to respond to such price-cutting policies of its rivals in order to remain competitive in the quota-free global market.
 14. Lead time:
Lead time refers to the time required for supplying the ordered garment products after the export order has been received.
In the 1980s, the usual lead time in the garment industry was 120-150 days for the main garment supplier countries of the world; it has been reduced to 30-40 days in the current decade. However, in this regard the Bangladesh RMG industry has improved little; for example, the average lead time is 90-120 days for woven garment firms and 60-80 days for knit garment firms. In China, the average lead time is 40-60 days and 50-60 days for woven and knit products respectively; in India, it is 50-70 days and 60-70 days for the same products respectively. Bangladesh should improve its average lead time to compete in the international market. The Ready-Made Garments (RMG) industry occupies a unique position in the Bangladesh economy. It is the largest exporting industry in Bangladesh, which experienced phenomenal growth during the last 25 years.
 Given the remarkable entrepreneurial initiatives and the dedication of its workforce, Bangladesh can look forward to advancing its share of the global RMG market








































3.1 DGN Apparels Limited

In the business world today no major player in apparel industry can ignore capability of Bangladesh in offering qualitative and valuable products. DGN Apparels Limited has the capability of providing a bridge between our overseas customers / buyers and local manufacturers in Bangladesh to ensure quality, services, timely deliveries and adherence to buyer's quality standards. In today's world the key to success of any buyer is to identify- the country to source the right product at right price. This is where the company - is step in to cater the buyer needs regarding communication, quality and most of all timely delivery. There are several sectors on which Bangladesh can be proud of and undoubtedly the Knitting sector is one of these sectors. DGN Apparels Limited bears the heritage of a family that has been involved in the trade of yarn, dyes & chemicals in Bangladesh for three generations. It entered into spinning industry in the sixties. At this stage, it is worth-while introducing its immediate forerunner, the DGNAP which is providing invaluable support to the DGNAP in it's strive to achieve professional excellence.

The urge for vertical integration to convert their own quality yarn into magnificent end products led to the birth of DGN Apparels Limited (DGNP) which went to production in 2009 as an 100% export oriented knit composite unit. KKCL virtually consists of five different units under one roof. These are the Knitting unit, the Dyeing and Finishing unit (both tubular & open width) and the Cutting & Sewing unit which produces the ultimate end products of knit garments. DGN Apparels Limited has its own printing and embroidery facilities. Besides, logistics and utility sections render integrated support services while their own power generation unit ensures un-interrupted supply of electricity. They have assembled capable managers, technical personnel and engaged skilled men & women behind the machines. For the company , making of apparel is more of an art involving human touch and imagination rather than merely few mechanical operations. Since the group has its own spinning mills, the DGN Apparels Limited has total control over the entire manufacturing process, from spinning of yarn to apparel making and packing

It eagerly anticipates further expansion of its product and service portfolio to make a sizable contribution to the national economy.







3. 2 Location and Historical background

DGN Apparels Limited is a production-based organization with basic objective of providing marketing related services to own garments manufacturers.

The company started its business operation in 2009 with a well decorated office at Holding-27, Block-A, Habibullah Tower, Gazipur Sadar, Gazipur. Initially the company used to bring order of garment products from Local buying house. Later it also entered into the European market and started to bring order from the buyers of Sweden, and Germany.

In 2010, for better quality service to local manufacturers the company started to supply garments accessories to the garments manufacturers. Through its company owned accessory supplier named Super Threads. Also Company owned manufactures factory Visual Knitwears Ltd., Green Apparel Ltd., Lea Fashion Ltd, and DGN Ltd. For a smooth manufacturing the assurance of on time delivery. To assure this supply, SKDM. Utilizes two sources. One is its sister concern Company. Another is the outsourcing from its suppliers of long term relationship. As a result the manufacturer doesn't need to be worried about the availability of accessories.

By arranging all the accessories for suppliers, the company reduced the work pressure of its suppliers by helping them only to concentrate on production. Besides supplying accessories the company also controls the product Quality of the suppliers by sending its quality inspector to the factories. Thus the company ensures the quality o f the supplier's products.

For the distribution of the final goods the company recently opened a company owned C & F farm named Great Bengal Enterprise. With objective to carry goods from factory to the port and prepare all necessary documents for exports. When the order of the buyer is ready this company take the responsibility of loading the goods on the ship with all necessary steps. They also prepare and arrange the necessary documents for export such as bill of exchange, bill of lading, commercial invoice, certificate of origin, packing list etc.

As a representative of foreign buyers and local buying house, the company makes a product sample for the buyer according to buyer specification. The company also searches for a good supplier for the buyer to execute his order.

Finally the company offers to inspect the buyer's product to ensure that the product is at right quality and in right quantity. The company maintains a constantly high standard of business conduct, ethics and social responsibility. It takes pride in the efficiency of what it does and always employees the most effective and latest technology available. Their most important asset is the people who make up the company.

The company is committed to growth and improvement of all aspects of its operation and willing to be a leader in the industry.




3.3 Objectives and Mission

DGN Apparels Limited realizes the need to stake out a competitive segment in the changing global market of today through technological excellence and human expertise. VKL is committed to transpose its local success to the world scene.

To establish ourselves as a one stop source for the Global Knit Apparel market.

To satisfy and meet customer's expectation by developing and providing products and service on time, which offer value in terms of Quality, Price, Safety & Environmental impact. We know Japanese industry have pioneer for inventory management techniques such as just-in-time (JIT) systems. We follow by JIT systems in our industry.

To assure complete compliance with the international quality standards.

To provide the employees internationally acceptable working condition/standards.

To promote the development and best use of human talent & equal opportunity employment.

To procure the most advanced & sophisticated technology suitable for producing desired product.

To attain highest level of competence through continuous development of the professional management system and to ensure complete transparency in all aspects of business.



3.4 Organizational Goals

To employ resources as incendiary for the growth of RMG sector.

To provide service for the parties involved and invention of the necessary new service dimension.

To search for new buyers for investment and help to develop products to suit such needs.

3.5 Strategic View

A truly international outlook for exporting

A long-term commitment for exporting

A strategic approach to the development of new export market

Credibility and close and long-term relationship in export market

An international reputation for quality

Resources available for export support

3.6 Functional Departments

All the functions of DGN Apparels Limited are operated under four major departments:

Merchandising department.

Sampling Department.

Commercial department.

Production department.

Distribution department.

Accounts Department
3.7 Organizational Chart

In case of operating the organization DGN Apparels Limited follows functional organization. They use this system because it makes efficient use of specialized resources. It permits a specialist in a given area to enforce his directives within a limited and clearly defined scope of authority. Basically DGN Apparels Limited Composite Ltd uses functional organizational system to divide the labor system and gain specialization advantage. The chart that they use is given below:



Organization Employer Chart of DGN Apparels Limited.


3.8 List of Clients or Foreign Buyers

Merchandising department recognizes the effectiveness, of their commitment to buyers and thereby it shoulders the responsibility of finding out efficient buyers. The bases of efficiency include supplier's adequate administrative setup to prepare all necessary documents for exports, supplier's financial status and adequate capacities etc.

S.L
Buyer Name
Origin
1.
Kappahl
Sweden
2.
Aldi/norma
Germany
3.
Long Street
U.S.A
4.
N K D
Germany
5.
Kik
Germany
6.
TS Solutions
Sweden
7.
Ventex
U.S.A
























































Marketing Mix Strategy and Practice

An efficient marketing mix strategy is important for increasing the market share of any products and its sales turnover, and for maximizing profit. It is because quality product sometimes doesn't occupy the market due to lack of efficient marketing tools to reach the same ultimate consumers.




4.1 Product Strategy

A product is anything that maximizes utility of the consumers. With respect to product, policy consists of following features of a product: (1) product variety (2) quality (3) design (4) brand name (5) packaging (6) sizes (7) warranties and (9) return (Kotler, 1999).

4.1.1 Raw Materials and Products Procurement:

To make finished goods raw materials are collected by different domestic companies as well as foreign companies. Most of the time raw materials are imported from India. Besides that they use cartoon of local producer for packaging purpose.




4.1.2 Product:

For DGN Apparels Limited product it is very much important. In this regard this company is very much conscious to ensure the quality of the products that are produced.


4.1.3 Products Color & Design:

DGN Apparels Limited always gives emphasis on product quality but they are up to date in case of product design. They use sophisticated equipment to design the products. Besides the design, they produce products based on the demand of the foreign buyers and international standard.


4.1.4 Target Market:

DGN Apparels Limited is 100% export oriented company. So foreign market is the main market for the company. The customers who are quality seeker are the main target customer for the products of DGN Apparels Limited. Because DGN Apparels Limited believes the customers prefer quality than price. So DGN Apparels Limited always gives emphasis on producing quality product.


4.1.5 Determining Demand:

DGN Apparels Limited determines demand by analyzing its previous sales volume. Considering the previous sales it seems that demand is very good in relation to product quality and its promotional strategy. Besides that they determine demand after getting the order from foreign buyers. Sales plan also prepared considering sales variation of different months.


4.1.6 Product Mix:

A product mix or product assortment is the set of all products and items that a particular seller offers to buyers. The basic product mix consists of Product, Price, Place and Promotion. Here product is fabrics and other kind of garments elements; price is another part to capture a good customer. And then place might be another place to establish current market because in that market cheap labor is the main factor. Promotion side is another fact that has a great impact in garments sectors.


4.1.7 Product List

Fabrics:

Single Jersey
Lycra S J
Pique / Lacoste
Lycra Pq
Fleece
Interlock
French terry
Mesh Interlock
Drop Needles
Flat Back Rib
Flat Knit Collar & Cuff (Regular & Jacquard)


Garments:

T-Shirts
Polo Shirts
Sweat Shirts
Knit Pant and other knit items


Packaging Strategy:

Packaging is all the activities of designing and producing the container for a product. Packages might include up to three levels of material- Primary package, Secondary package, and Shipping package. Various factors have contributed to the growing use of packaging as a marketing tool- Self-service, consumer affluence, company and brand image, and innovation opportunity. The company in such a way that attracts attention of the buyers, describes product features, arouses consumers' confidence and Increases Company's brand image does the package design. The company also considers how the package would look in the display. Usually the company takes the services of advertising agency in designing the package of products. After designing the company makes some test such as engineering tests, visual tests, dealer tests and consumer tests to make the package effective. On both the primary and secondary packets, the company imprints the brand name, product name; model no, quantity and quality of the product.


New Product Development Strategy:

Before introducing a product in the product line DGN Apparels Limited gives emphasis on market demand, availability and quality of raw materials and specialty of raw materials. The company have separate budget for new product development. It is included in the marketing cost of the company.


4.2 Pricing Strategy

Pricing policy is the course of action or guiding philosophy that helps a business firm make pricing decision smoothly and perfectly. It guides the company to achieve its goals set by the firm. It is an important element of the entire marketing strategies of a firm. A firm can easily manipulate the demand in the target market by handling its price carefully.

4.2.1 Pricing Objectives:

The objectives of pricing policy are consistent with the company's overall mission and purpose. DGN Apparels Limited pursues three objectives-survival, maximum current profit, and maximum sales growth through its pricing.

Survival:

Company pursues survival as its major objective if it is plagued with intense competition and changing consumer wants.

Maximum current profit:

It estimates the demand and cost associated with alternative prices, and chooses the price that produces maximum current profit, cash flow, and rate of return on investment. DGN Apparels Limited sets a price that can generate maximum current profit for the company, which is clearly observable from its sales.

Maximum sales growth:

DGN Apparels Limited sets a lower price for its products than the market leader in the pursuit of maximum sales growth. The company wants to maximize unit sales and perceives that a higher sales volume will lower unit costs and higher long-run profit.

4.2.2 Pricing Method:

There are a number of price-setting approaches: markup pricing, target-return pricing, and buyer based pricing, going rate pricing, and sealed bid pricing. Of these pricing approaches, DGN Apparels Limited adopts going-rate-pricing method for its products as a follower. In going-rate pricing, the firm bases its price largely on competitors' prices with less attention paid to its own cost or demand. The firm might set the same, more, or less price than its major competitor(s). Adopting going-rate pricing, DGN Apparels Limited has gained sales volume respectively, which is really a milestone for such a established firm. The firm follows same pricing method for all the products of its product line.









Penetration
Penetration













4.2.3 Factors They Consider When Setting Prices

The company has to consider many factors in setting its price. DGN Apparels Limited pricing decisions are affected by both internal company factors and external environmental factors

External FactorsNature of the Market and DemandCompetitionOther Environmental Factors (Economy, Resellers)Internal FactorsMarketing ObjectivesMarketing Mix StrategyCostsOrganizational Considerations
External Factors

Nature of the Market and Demand
Competition
Other Environmental Factors (Economy, Resellers)
Internal Factors

Marketing Objectives
Marketing Mix Strategy
Costs
Organizational Considerations

PricingDecision
Pricing
Decision









Internal Factors Affecting Pricing Decisions:

There are some internal factors affecting pricing include the company's marketing objectives, costs and organizational considerations.

External Factors Affecting Pricing Decisions:

Price Setter:

In DGN Apparels Limited, management sets price. They watch the prices of other competitors closely and sets price having discussion with the Top Management. The other parties who may exert influence on price including sales managers, production managers and accountants are all directly connected with the Managing Director. Finally the drug administration approves the price.

Buying method:

DGN Apparels Limited buys all raw materials, recipients and other related goods in cash and L/C system.



Selling method:

Selling method of DGN Apparels Limited products are in cash, and some are in credit.


4.3 Distribution Strategy

We know that Distribution is an integral part of Marketing. It is so important that all efforts of the promotional team will go in vain if distribution fails to perform the desired job timely and accurately. Decisions involving distribution are among the most important decisions that management takes. DGN Apparels Limited provides significant effort in planning an effective marketing channel as it is a major deciding point to develop an overall marketing strategy. Setting up an efficient distribution channel for knitwear companies in Bangladesh for ensuring continued availability of product range to the designated outlets at an agreed cost and operational budget is extremely desired for the ultimate achievement of the company's financial goal.

4.3.1Buyer of the Company:

WALTMART
ZARA
DISNEY
CARREFOUR
SFERA
HUREN
MAULI
KAPPA
HIPERCOR
ALDI
LIDL
SAINSBURY
NEW YORKER
BEST SELLER
H & m
G. GULDENPENNING





4.3.2 Distribution System

DGN Apparels Limited is 100% export oriented company. Foreign market is the main target market of the company. In order to maintain production and export the finished products they need some distribution system to collect raw materials and supply the finished products to the ultimate buyer. In case of distribution they use both Air and Shipment system to provide the products to the ultimate destination. Depending on the terms and conditions of L/C either they send finished goods to the port of the buyer country or send the goods to the store of the buyer. Distribution system of DGN Apparels Limited is shown in below:
Factory of DGNAL






Central Depot of DGNAL




Outbound Transportation




By Ship

By Air





Destination
(Country of any part of the world)





Distribution pattern of DGN Apparels Limited all over the World.

4.3.3 Transport Management:

It is one of the major areas where DGN Apparels Limited pays special attention to ensure the availability of raw materials and successful distribution of finished goods in time and cost-effectively. DGN Apparels Limited starts Transport Management from Factory site to delivery of goods / products to the ultimate customers. In managing these jobs considering scope, availability of facilities DGN Apparels Limited uses the following methods.

Own Transport:

DGN Apparels Limited has it's own transport to carry the goods imported from different countries and to carry the goods for shipment. To manage distribution activities effectively DGN Apparels Limited manages vehicles properly. They maintain their vehicles effectively through regular follow-up of engine condition, fuel consumption, and use of other accessories/ parts. They keep all documents of the vehicles kept up-dated always.

Courier Service:

Courier service has greatly developed in our country in the recent past. Sometimes DGN Apparels Limited uses a reliable and experienced one e.g. BRTC by name ARS Parcel & Courier Service' for delivering goods.

Hired vans and trucks:

Though it is a costly method sometimes they use hired van / trucks for carrying goods and shipment of the goods. They make reliable contract for the purpose of carrying goods.


4.4 Promotional Strategy

Promotion mix is composed of the tools of communication- advertising, personal selling, sales promotion, and publicity. But DGN Apparels Limited does not utilize all the tools to promote its products easily. Till the time of writing this paper, DGN Apparels Limited is involved in some kind of concentrated advertising. It follows Interactive/Internet Marketing, personal selling, public relation and publicity, and Word of Mouth communication effectively.

Interactive/Internet Marketing:

DGN Apparels Limited has maintained strong on line marketing. DGN Apparels Limited has an attractive web site. Generally buyers of different countries first visit the website and know about the company and its products. Then they place the order over the internet.



Personal Selling:

DGN Apparels Limited also gives preference on personal selling and spends more money for that promotion. Commercial people maintain a good relationship with the foreign buyers of different countries.

Public Relation:

Publicity is a tool of promotional mix in the format of news release, press conferences and feature articles. Publicity refers to those activities as to promote a company or its products by planting news about it in the media not paid for by the sponsor. So DGN Apparels Limited is concerned, the firm does not maintain a department for public relations and as a result there is no organized activities of public relation.










































































5.1 SWOT Analysis

A SWOT analysis stands for Strengths, Weaknesses, Opportunities, and Threats and is a simple and powerful way to analyze company's present marketing situation. SWOT Analysis is a powerful technique for identifying Strengths and Weaknesses, and for examining the Opportunities and Threats organization face.


Abbreviation Amplification


By looking at DGN Apparels Limited and other competitors using the SWOT framework, we can start to craft a strategy that helps us distinguish the company from the competitors, so that they compete successfully in current market.

The new environment represents a serious threat to Bangladesh. On the other hand, it is opening a vast market with unlimited export potentials; on the other hand it signals fierce competition from efficient producer of other country
The following sections focus on SWOT strength, weakness, opportunity and threat analysis of DGN Apparels Limited.


5.1.1 Strength:

Skilled workforce:

From its inception DGN Apparels Limited look into the combination of effectiveness and efficiency regarding its objectives. As a result with in a few days it got the higher regard from its buyers. In fact, its swift growth of the company is the combination of two skills required for a competent buying house.



Communication skills:

From its inception DGN Apparels Limited has proved themselves attractive in the eyes of the foreign buyers because of its strong communication skills. For example, as the perpetration of entering the European market the organization has employed personnel with the communication power in Italian language for the convenience of Italian buyers to communicate with them. Even the organization renders time to time information to the foreign buyers on the progress of the manufacturing process of their ordered garment products.

Collaboration with suppliers:

To provide higher value in their value delivery process DGN Apparels Limited has built the long term relationship with some competent suppliers. This collaboration makes this organization honest to its commitment of quality and scheduled delivery to its buyers.

Permanent Buyers:

For its reputation' of committed organization it has built a marketing network with some prominent buyers. These buyers are not easily vulnerable to other buying houses, as they are satisfied with DGN Apparels Limited for its efficiency and effectiveness.

Collaboration with backward linkage industry:

To be ever successful in their commitment to their buyers they always assure the on time delivery of the accessories needed in the manufacturing process. Merchandizing Inc. has taken the responsibility of supplying these accessories to the manufacturing process for its assured supply. For the convenience of this responsibility they have built long term relationship with the suppliers of accessories that they don't manufacture and done necessary paper work with strong term and conditions with those accessory suppliers.

Company owned fabric and accessory supplier:

To assure the on time delivery of accessories DGN Apparels Limited has shared the responsibility of supplying a part required accessories. The sister concern company devoted to this responsibility.

Long-term relationship with butlers:

DGN Apparels Limited honors the long-term relationship with their buyers.


Extensive experience in dealing with foreign buyers, offshore bankers, shippers and clearing and Forwarding (C&F) agents.




5.1.2 Weakness:

Fail to attract big Butlers:

Despite effectiveness and efficiency one of the weakness of SKDM is its short capacity. For its low level capacity SKDM it's deprived from potential growth resulting from its present reputation, which could be achieved otherwise.

Not International standard certified:

DGN Apparels Limited is not ISO certified organization. Not to say that, being as a proof of quality, ISO certificate is very much essential for the spreading of its market.

Under developed web site:

DGN Apparels Limited could be more communicative if it had a web site. Much of the business correspondence executed on online. Buyers would feel more convenience if had a web site of its own.

Low productivity of its workers and limited knowledge in international marketing information
Inefficiency in port management and excessive dependence of sub-sector
Do not have any proper human resource department at their production level.




5.1.3 Opportunity:

Low labor cost
More Interest of foreign buyers
Developing the quality of employees
Opening new and new market for the company


5.1.4 Threats:

Fierce competition from efficient producers from both home and abroad.
Recent political situation is not favorable at all for the business of the company
Raising the cost of production because of importing raw materials.



5.2 Porter's Five Forces Model

5.2.1 Rivalry among competitors:

The market is very competitive. There are lots of competitors in the industry right now. And to some extent the price war also exists among the competitors. But due to higher demand of the product the market is quiet normal. So in the Knitwear industry rivalry among competitors is moderate.

5.2.2 Bargaining power of the buyer:

Previously there were very few manufacturers. Foreign buyers got the product at a lower price compared to other countries. So earlier the bargaining power of the supplier was low and the foreign buyers did not want to argue too much with the manufacturer. But the current scenario is bit different. Now there is lot of manufacturers and the market is getting competitive. For this reason the bargaining power of the buyer is quite high right now.

5.2.3 Bargaining power of the Supplier:

Along with the manufacturers, the demand of product has also increased. For this reason, the bargaining power of the supplier has not fluctuated too much. And the bargaining power of the supplier is low here.







5.2.4 Substitute products:

Substitute product does not exist in the market and the demand of this product is quite inelastic. So here the threat of the substitute product is very low.



5.2.4 Risk of entry of new firms:

Not only are the local investors but also the foreign investors are very much welcome to invest in the Knitwear industry in our country. And the government gives all sorts of facilities to the new investors. And due to higher profitability investors are very much interested to invest in this industry. For this reason the risk of the entry of the new firms is very high.




Forces
Proposition
Profit generating capabilities:
Moderate
This analysis shows that DGN Apparels Limited can generate a steady growth of earnings also it is able to retain its profit.
1. Threats of new entrants
High (-)


2. Intra-Industry rivalry
Moderate


3. Threats of substitutes
Low(+)


4. Power of Buyers
Moderate
Profit retention capabilities:
High (+)

5. Power of Suppliers
Low (+)



Profit generating and retention capabilities base on Porter's Five forces Model





5.3 PESTEL ANALYSIS

5.3.1 Political Factor:

In Bangladesh there is often political instability which is harmful for the company. Because of political instability the company cuts back more pressure on pricing.

No trade restriction is generally found for the company.

5.3.2 Economic Factor:

As DGN Apparels Limited is 100% Export oriented company, due to global economic crisis many foreign buyers are reluctant to buy in a greater quantity.

Increasing number of buying groups putting pressures on the company.

DGN Apparels Limited can access very cheap labor.

5.3.3 Social Factor:

In our country a lot of people leave below poverty line so it create employment.
Social status of the standard of living might be increase by that way.
Self dependency of the people developed by the development of the garments sectors.

5.3.4 Technological Factor:

The technological know-how is now up to the standard for the company.
Sophisticate equipment and high quality transport prevail in the company.
KKCL having the ability to communicate directly with the foreign buyers for providing the customized products.

5.3.5 Environment Factor:

Toxic chemical of the company is harmful for the environment.
Maintaining corporate social responsibility the firm contributes to the development of the environment to a great extent.
DGN Apparels Limited identifies eco-friendly technology for their production.


PESTLE Analysis of KKCL
PESTLE Analysis of KKCL





5.3.6 Legal Factor:

Because of increasing legislation quality has become the key to the company.
Global inconsistence sometimes makes it difficult for the company to rationalize foreign market.



























































6.1 Findings from Primary Data

Bangladesh has a good future in Readymade Garments (RMG). Manufacturer is the potential tools for RMG. Maximum number of respondents use manufacturer for RMG.

It is found that majority/maximum numbers of respondents are not satisfied for its Low cost of manufacturing.

It is found that majority of the respondents are using Manufacturer for RMG.

Maximum Foreign Buyers are satisfied with the low Wages. Huge Workers attracts Foreign Buyers to Investment this sector.

Most of the Foreign Buyers gets product as soon as their requirements.

As yarn market is a competitive market so market would be more price sensitive as well as quality. So they have to take pricing strategy very carefully. Maximum Foreign Buyers should be informed perfectly so that they get accurate information from their reliable sources.

Price and quality both are important for any product. Maximum number of Foreign Buyers does not use it for its high price.




6.2 Findings from the secondary data

The following findings are perceived from the answer of the questionnaire. Through these findings I tried to present the existing scenario of buying house industry of Bangladesh under two classifications. Under First classification the finding regarding the efficiency and effectiveness of buying houses is presented and under second classification the findings regarding the present and future problems of the industry is presented.





6.3 Findings regarding their efficiency and effectiveness

According to the survey most of the buying houses are not efficient in supplier selection process because of their tendency of long time inefficient trade, harmful employee bias and lack of discretion to certify the efficient suppliers for the first time as the soar of the system.

The study also shows that a large part of RMG orders are brought annually by the buying houses which determines their effectiveness in bringing order of RMG products but inefficiency remains unknown.

While joking into the efficiency of backward linkage industry it is discovered that this industry is afflicted with poor product quality, inadequate capacity and the lack of consciousness to committed delivery.

It has found that the foreign buyers reject small portions of, goods shipped. It is a good sign for buying house although indicating the lenient view of foreign buyers towards the buying house.

Their inefficiency once again has proved when I found that they are very much reluctant in taking any promotional step to convince buyers.

Buying houses attempt their heart contents to maintain the product quality.


6.4 Findings regarding the problems of buying house

The dissatisfaction of buying houses toward their buyers mainly based on the buyers' uncompromising attitude toward the failure of commitment due to contingencies.

The dissatisfaction of buying houses toward their suppliers because of their inefficiency to supply product in right quality and quantity.

From the study I have seen that obstacles to garment exports can be separated into two parts: major obstacles and minor obstacles.

Among the major obstacles causalities such as natural calamities, strike, hartal or political instability are affecting the export marketing of garment products severely.

Among the minor obstacles inefficiency of production process supervision by the buying house is most noteworthy.

Again from the study I have seen that problems of buying houses can be separated into two parts: major problems and minor problems.

Suppliers' poor product quality attacks most severely as major problems of buying houses and as the minor problem shortage of backward linkage industry disturbs buying houses drastically.

After the withdrawal of quota system buying house industry will face the tremendous competition to survive.

The employees of this industry are 'lacking required communication and technical skills.

There are no effective institutional programs in public or private universities to teach the required skills to the employees of this industry.



























































7.1 Recommendation
From my observation, I like to recommend that type activity to improve our garments sector to overcome the challenge:
7.1.1 Policy Regime of Government
Government of Bangladesh has played an active role in designing policy support to the RMG sector that includes back-to-back L/C, bonded warehouse, cash incentives, export credit guarantee scheme, tax holiday and related facilities. At present government operates a cash compensation scheme through which domestic suppliers to export- oriented RMG units receive a cash payment equivalent to 5 percent of the net FOB value of exported garments. At the same time, income tax rate for textile manufacturers were reduced to 15 percent from its earlier level for the period up to June 30, 2008. The reduced tax rates and other facilities are likely to have a positive impact on the RMG sector. 
7.1.2 Infrastructural Impediments
The existence of sound infrastructural facilities is a prerequisite for economic development. In Bangladesh, continuing growth of the RMG sector is dependent on the development of a strong backward linkage in order to reduce the lead time. However, other factors constraining competitiveness of Bangladesh's RMG exports included the absence of adequate physical infrastructure and utilities. 
7.1.3 Labor Productivity
The productive efficiency of labor is more important determinant for gaining comparative advantage than the physical abundance of labor. In Bangladesh, the garment workers are mostly women with little education and training. The employment of an uneven number of unskilled labors by the garment factories results in low productivity and comparatively more expensive apparels. Bangladesh labor productivity is known to be lower when it compared with of Sri Lanka, South Korea and Hong Kong. Bangladesh must look for ways to improve the productivity of its labor force if it wants to compete regionally if not globally. Because of cheap labor if our country makes the labor productivity in the apex position, then we think the future of this sector is highly optimistic.

 
7.1.4 Research and Training
The country has no dedicated research institute related to the apparel sector. RMG is highly fashion oriented and constant market research is necessary to become successful in the business. BGMEA has already established an institute which offers bachelor's degree in fashion designing and BKMEA is planning on setting up a research and training institute. These and related initiatives need encouragement possibly intermediated by donor-assisted technology and knowledge transfer. A facilitating public sector role can be very relevant here.
7.1.5 Supportive Government Policy
In contrast to the public sector-led import-substituting industrialization strategy pursued during the first few years after independence, the industrialization philosophy of the government changed rather dramatically from the late 1970s when the emphasis was on export-oriented growth to be spearheaded by the private sector. Towards this end, various policy reforms were implemented in the 1980s and 1990s. Some of these reformed policies contributed considerably to the growth of the RMG industry in Bangladesh.
During the 1980s, a number of incentives were introduced to encourage export activities. Some of them were new like the Bonded Warehouse Facility (BWF), while others like the Export Performance License (XPL) Scheme
37 were already in operation and were improved upon. Also, rebates were given on import duties and indirect taxes, there were tax reductions on export income, and export financing was arranged. Under the XPL scheme, exporters of non-traditional products received import licenses for specific products over and above their normal percentage allotment based on the f.o.b. value of their exports. Under the Duty Drawback System, exporters of manufactured goods were entitled to get refund of duties and taxes paid on imported inputs used in export production, and also all excise duties paid on exported finished goods. For certain fast-moving items such as RMG, a notional system of duty payments was adopted in 1982-83. Under this system, exporters were exempted from paying duties and taxes on imports used in export production at the time of importation, but were required to keep records of raw and 21packaging materials imported. The duties and taxes payable on the imports were kept in a suspense account. Liabilities to pay the amounts in suspense were removed on proof of exports.
The discussion in this section clearly points to the positive contribution made by policy reforms to the growth of the RMG industry in Bangladesh. In particular, two policies– the SBW facility and the back-to-back L/C system- led to significant reduction in cost of producing garments and enhanced competitiveness of Bangladesh's garments exports. It also allowed garment manufacturers to earn more profit which, when necessary, could be used to overcome difficulties arising from weak governance. Furthermore, poor governance, reflected in the leakage of duty-free imported fabrics in the domestic market, paradoxically enough also helped the garment manufacturers to earn extra 'profit' and thereby enabled them to absorb the 'high cost of doing businesses – a fall out of bad governance.
7.1.6 Things to be done for solving the problem
Bangladesh economy at present is more globally integrated than at any time in the past. The MFA phase-out will lead to more efficient global realignments of the Garments and Clothing industry. The phase out was expected to have negative impact on the economy of Bangladesh. Recent data reveals that Bangladesh absorbed the shock successfully and indeed RMG exports grew significantly both in FY06 and (especially) in FY07. Due to a number of steps taken by the industry, Bangladesh still remains competitive in RMG exports even in this post phase-out period.
Our Garments Industries can improve their position in the world map by reducing the overall problems. Such as management labor conflict, proper management policy, efficiency of the manager, maintainable time schedule for the product, proper strategic plan etc.
Government also have some responsibility to improve the situation by providing- proper policy to protect the garments industries, solve the license problem, quickly loading facility in the port, providing proper environment for the work, keep the industry free from all kind of political problem and the biasness. Credit must be provided when the industry fall in need.
To be an upper position holder in the world Garments Sector there is no way except follow the above recommendations. We hope by maintaining proper management and policy strategies our country will take the apex position in future.
7.1.7 Suggestions Regarding Fire Safety
We need to remember that when there is a fire, the first thing one should do is to run away from it. And this is what everyone does in such a situation. But the situation become dangerous and tragic when the escape doorways and gates are found locked. Precautionary should need to be adopted are given below:
 
Building should be constructed with fire resisting materials
Adequate exits and proper escape routes should be designed
Protection against fire and smoke should be ensured
Electrical wiring must be properly designed, installed and maintained
Escape routes should be lighted at all times, kept clear, be indicated by signs
Regular fire drills should be held
Doors should be protected and should open along the direction of escape
Doors should not open on the steps and sufficient space should be provided.
Smoke/Fire alarm systems must be installed adequate number of extinguishers should be provided
Prior relationship with local Fire services should be established


7.2 Conclusion
The Ready-Made Garments (RMG) industry occupies a unique position in the Bangladesh economy. It is the largest exporting industry in Bangladesh, which experienced phenomenal growth during the last 25 years. By taking advantage of an insulated market under the provision of Multi Fiber Agreement (MFA) of GATT, it attained a high profile in terms of foreign exchange earnings, exports, industrialization and contribution to GDP within a short span of time. The industry plays a key role in employment generation and in the provision of income to the poor. To remain competitive in the post-MFA phase, Bangladesh needs to remove all the structural impediments in the transportation facilities, telecommunication network, and power supply, management of seaport, utility services and in the law and order situation. The government and the RMG sector would have to jointly work together to maintain competitiveness in the global RMG market. Given the remarkable entrepreneurial initiatives and the dedication of its workforce, Bangladesh can look forward to advancing its share of the global RMG market.





References
BOOKS:
DeCenzo & Robbins (2006), Fundamentals of Human Resource Management, 8th Edition, P 151-153.

Directive 2013/121/EC of July 2013 on DGN Apparels Ltd(Official Journal L 19, 12.07.2013 p.39)

Principle of Marketing by Philip kotler.
WEBSITES:
http://dgnapparels.bd(accessed 25 July-14 August)
http://josephsoninstitute.org/business/blog/2012/13/responsibilities-in-the-marketing challenge in RMG sectors bd/ (accessed on 9 August)
http://en.wikipedia.org/wiki/marketchallenge (accessed on 7 August)
http://www.businessweek.com/managing/content/mar2009/ca20090331_755178.html (accessed on 25 July)
PERSONNEL:

K. S. Islam
Managing Director
DGN Apparel Limited
Holding-27, Block-A, Habibullah Tower,
Gazipur Sadar, Gazipur, Bangladesh.

Md. Ariful Islam
Chief Operation Officer
DGN Apparel Limited
Holding-27, Block-A, Habibullah Tower,
Gazipur Sadar, Gazipur, Bangladesh.



Appendix

Topic:

"Marketing Challenges of Garments Product in the Global Market: A Study on DGN Apparels Limited"

Organization Name:………………………………………………………………..

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Instructions (Request to respondents)
Please Supply the truth information
Please try to answer all the question
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Give your valued opinion about the "Marketing Challenges of Garments Product in the Global Market: A Study on DGN Apparels Limited"


The Process of data analysis

Strongly
Agree

Agree

Neutral

Disagree

Strongly
Disagree

Inconvenient location for collecting finished product






Unskilled garment workers






Child labour aspect






Casualties such as natural
calamities or political crises






Supplier's poor product quality






Employee personal relationship with suppliers






Failure to choose desired suppliers during seasonal excess demand






Failure to maintain delivery on schedule






Short shipment






Document delay






High bargaining tendency in exchange






Inefficiency of buying house in negotiating

















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