VIEWS: 496 PAGES: 5 CATEGORY: Operations POSTED ON: 3/12/2012
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 ...
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 1 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. 2 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 3 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. 4 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. 5
Pages to are hidden for
"Bata Pakistan Limited Problems and Solutions"Please download to view full document