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Bata Pakistan Limited Problems and Solutions by azymf

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Bata Pakistan Limited Problems and Solutions.This case is about Bata Pakistan limited. ... Some words about us. Bata has always been the market leader and in order to maintain its leadership it has invested millions of rupees in updating its systems ...BATA PAKISTAN LTD (BATA:PA) stock price & investing information. Find BATA PAKISTAN LTD historical stock quotes, key competitors, stock data, executives ...

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									                   Marketing Channel Assignment
Sir. Salman Mangol                       WAC for BATA Company




                     BATA PAKISTAN LIMITED




Key Points:
   Company Background.
   The Shoe Market.
   Competition.
   Bata’s Perceived Strengths.
   Bara’s Marketing Organization.
   Retail Department.
   Wholesale Department.
   Export Department.
   MR Sultan Concern




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                      Marketing Channel Assignment
Sir. Salman Mangol                                             WAC for BATA Company

  Problems:
   Mr. Sultan , on Thursday afternoon, just two days ago the shop next to ours which was
      being decorated and furnished like our store, put up a huge billboard that has the Bata
      name written in bold lettering; about two yard away from the billboard is a small board
      carries the insignia of Bajwa shoes.
   Bata faced a strong challenge not only from the small cobbler’s but also from new
      entrants, who sold their product to retailers, who then pushed them under their own
      private brand labels.
   The three departments competed with each other, not only in meeting their sales targets
      but also for resources and production. It was not uncommon to find the wholesale
      department pushing the merchandising department to allocate products to them, before
      the retail department and vice versa.
   The retail warehouse shipped shoes to the respective stores according to the allocation
      made by the merchandising department. Retail prices were stamped on the shoes; no
      discount or price-cutting was allowed.
   When sales potential exited in an area, but it was difficult to buy, lease, rent or purchase a store,
      in the vicinity, Bata relied on agencies. Agents were motivated by Bata’s strong image, national
      advertising and the quality of their shoes.
   The commission was paid fortnightly; the agencies deposited the daily sales in Bata’s
      account and the twelfth or thirteenth day they would calculate their commission based on
      the number of shoes they had sold.
   Distributors provided wider access to the market Lahore and Karachi had tow distributors
      each, Peshawar had on. The distributors bought shoes from Bata at 14 percent less than
      the retail price.
   The distributors in Lahore were well-known in their respective areas. They had little
   difficulty in getting the type and quantity of supplies they needed. Consequently, they did
            not experience any major problems in servicing the needs of their clientele.




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                     Marketing Channel Assignment
Sir. Salman Mangol                                           WAC for BATA Company

  Report for Bata Shoes Company:
  Bata Pakistan Limited was a member of the international chain of Bata shoe stores
  headquartered in Canada. Bata International was founded in 1894 at Zelin, Czechoslovakia,
  by a Czechoslovakian national, Mr. Thomas Bata. By the 1930s, Bata had opened stores in
  different parts of the world. In 1987, Bata had over 100 factories in 90 countries and was
  selling 300 million pairs of shoes per year in 6000 retail stores throughout the world.

  Bata Pakistan started functioning at Batapur, Lahore, in 1932, as a branch of Batanagar,
  Calcutta. In 1947, the Batapur concern became a separate company. Batapur was the only
  Bata factory in Pakistan until 1984. On February 6, 1985 Bata opened another factory called
  “Maraka branch” on Multan Road, Lahore. In Pakistan, Bata was headed by a Managing
  Director who was appointed by Bata Pakistan’s Board of Directors. The company laid great
  emphasis on marketing. In areas like production, personnel and Accounting the departmental
  heads came under the MD’s direct supervision. The number and type of shoes sold in an area
  were mainly a function of literacy, income level locality and weather. In the cities and
  towns, people tended to buy more than a single pair, a result of their greater fashion and
  health consciousness. Villagers, on the other hand, valued durability, price and practicality
  much more than appearance or fashion. Bata had estimated that in Pakistan in 1986, the
  number of shoes purchased per capita was about 1.5 pairs a year. The average price per pair
  according to Bata was about Rs 30. Bata studies had also indicated that sales of shoes were
  much higher in the cities than in the villages. There were few shoe manufacturers, with a 10
  percent market share, followed by Service Industries with 6 to 7 %.

  The cottage industry had a significant role in the Pakistani shoe market. Cottage
  manufacturers sold directly to retailers in their regions. Private parties as well as big
  manufacturers like Bata started purchasing their supplies from these tanneries. Bata faced a
  strong challenge not only from the small cobblers but also from new entrants, who sold their
  product to retailers, who then pushed them under their own private brand labels. In some
  cases the private labels were imitations of popular brands like Bata’s, ‘power’ and ‘North


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                     Marketing Channel Assignment
Sir. Salman Mangol                                           WAC for BATA Company

  Star’, and sold for half their retail price. Bata prided itself on giving its customers excellent
  quality and service, at affordable prices. It considered shoe design a vital component of its
  selling strategy. Bata considered itself a leader of shoe design in Pakistan. Distributors and
  retailers had strong motivation to carry the Bata line; since Bata products were popularly
  known to be of high quality and modern design. The marketing department was divided into
  three distinct and separate profit centers, viz. retail, wholesale, and government and export.
  The three departments competed with each other, not only in meeting their sales targets but
  also for resources and production. The retail department accounted for 40-45% of total
  domestic sales. The retail department had divided the county into three different provinces,
  dubbed 510,520 and 530, each headed by a provincial controller. The District Controllers
  were basically assigned responsibility to carry out the retail departments instructions in the
  field. They managed inventory, handled customer complaints and ensured that the area sales
  quota was being met. Bata owned 230 retail stores. The company opened stores wherever
  they felt a strong demand existed, coupled with availability of either land or a building which
  could be purchased outright, leased or rented. In order to secure an agency, the agent had to
  offer a prime location, experience and proof of their being financially sound. The retail
  department evaluated the agent’s application very carefully before approving it. Agencies
  were given a 12% commission on each pair of shoes sold. The commission thus determined
  the line by informing Bata one month in advance. Private distributors constituted one
  channel; company-owned wholesale depots who sold to the dealers formed another. These
  dealers besides having Bata could also carry any other line they wished. In general, this
  segment was quite small. This department had the responsibility of overseeing both the
  government and export areas. Sale of shoes to government organizations and the armed
  forces was done at their request.




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                      Marketing Channel Assignment
Sir. Salman Mangol                                           WAC for BATA Company



Recommendation:



The company should provide better information to their customers. Company should have more
and more own retail shops in every area. So that private companies cannot pushed their own
labels. Company should be visit in every month to check the retailer’s shops to finding that the
same brand can be sale or not. Company should make better policies to make customer
satisfaction. Company should be providing the shoes to their retailer in their requirement not in
your choice.




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