The main objective of this study is to analyze Computer Business System in Bangladesh, here focus on Index IT Limited. This marketing analysis considers the effects of attributes like brand value, cleaning quality, promotional campaign, price and availability of Computer Business in Bangladesh. Other objectives are to describe the organizational structure, function of different departments and do SWOT analysis of Index IT and analyze the distribution network of some other IT company. Finally look into the problems which the channel partners face in doing business with Index IT Ltd.
A Study on Index IT Limited
INDEX IT LIMITED Is an ISO Certified (9001:2008) Company specializes in the import and distribution business of computer components. Since its inception in 1994 Index has been doing their operation with quality, support & moderate price. From 1997 this company is also the authorized distributor of Samsung IT and lifestyle Product INDEX IT LIMITED is also Authorized partner of Hitachi Hard Drive, Moserbaer CD/DVD, Digital Computer case, mouse & keyboard, EVM Memory (RAM) in Bangladesh market and authorized Business Partner of HP, PC Security Shield.
This report is prepared as a part of the Masters of Business Administration (MBA)’s Internee course which will carry our 6 credit. In this report we tried to present the total business environment of computer and it’s related all sorts of accessories marketing system in Bangladesh. IT business marketing system and how customer gets products by distribution channel.
Now-a-days all people are included internally or externally in Computer. Bangladesh is depended IT use for getting better life. IT business increasing day by day. One of the IT world successful man Mustafa Jabbar communicate and transaction with index and we welcome him for our increasing good will to the customer and also dealer.
The general objective of this report is to provide with an over view of the knowledge and experience gathered as an intern during the organizational attachment period of Index IT Ltd so that the theoretical learning can be related with the real life business situation.
The main objective of this study is to analyze Computer Business System in Bangladesh.
This marketing analysis considers the effects of attributes like brand value, cleaning quality, promotional campaign, price and availability of Computer Business in Bangladesh. We will also get some information about our retail business environment staying in all over the Bangladesh. This report will help us for the making decision, what is our future about IT sector or Government dreams “Digital Bangladesh”?
- To evaluate the performance of the present Distribution Channel, Strategy and future position of Bangladesh especially in IT Sector.
- To share some experience and opinion about our present situation which is made by the government by budget?
- Student’s effect is related by environment of IT Business.
- To describe the organizational structure, function of different departments and do SWOT analysis of Index IT Ltd.
- To do industry analysis by means of the 5-force model.
- To describe the previous and present distribution network of Index IT Ltd.
- To analyze the distribution network of some other IT company.
- To identify the limitations of the existing Distribution System of Index IT Ltd.
- To look into the problems which the channel partners face in doing business with Index IT Ltd.
- To provide a few recommendations based on the research finding.
The type of method used in this report is mainly of a descriptive nature. Both primary and secondary data analysis is selected as the basic research method. In addition, everyday interaction with the employees of the company has proved to be an extremely effective source and method of retrieving information.
Data Collection :
For every IT business or any other business data must be need for present, past and future work. Specific business has specific way to collect data. I get data from different source. As I am the marketing executive of Index IT Ltd. So it is very much important for me to collect data.
Primary Data Collection:
- The primary data is collected by conducting some survey and some event like IT Fair, Laptop fair and Project Competition. ( picture no 1 )
- Some survey’s well structured questionnaire consisting a number of multiple choice questions is used in the survey.
- The files which was as a documents in company’s branch office and Head Office.
- All employees are helped to get previous information both Index IT Limited’s activities and Samsung’s Electronics Limited’s steps which are very much important for IT business in Bangladesh.
Secondary Data Collection:
Certain data for this report is extracted from secondary sources. Majority of the secondary data is obtained from the Market Research and Bangladesh Computer Sammity (BCS). Various reports of other IT Company, their official web sites, reports done on the IT Business and information obtained from the Internet.
Data processing and analysis:
Data analysis is conducted using Simple Cross-tabulation Technique where Analytical Justification helped to get the scenario of the Distribution System. MS excel and SPSS software is used in data processing where required.
Mission, Vision, Objectives, Goals and Strategies
“To stay ahead of the competition by importing high quality IT products based on the market demand that combine performance with value pricing. Establishing a sustainable relationship with our clients and suppliers by implementing our slogan- “Satisfaction Ensured”.
To remain as one of the leading IT product importer and distributor in Bangladesh and expand our product mix and our distribution network in all over the country.
“To continue to be the leader in the IT industry in the region and provide a complete communication solution to our customers with a smile.”
It may be noted that in the vision stated there is an emphasis on strong customer relations. This is important to Index IT Ltd especially as, until recently, they positioned their packages as high-end packages. This means that they need to promote their packages especially to corporate and business users. Such customers will require strong support for brand loyalty to develop.
The business strategy of Index IT Ltd is focused around two objectives:
- Increasing service offerings.
- Expanding the network.
- Creating innovative, unique, and cost-effective various products to customers.
- Increasing loyalty by focused customer retention program.
- Develop operational procedure for the fast deployment of service.
Increase customers base over after sell service and good and warranty products all over the Bangladesh. As present world are too much competitive so our goal to increase customer with our mission and vision “Satisfaction Ensured” June 25, 2011 we achieve more than 75% customer over our 13 branches.
The current strategic goal of the company is to occupy a unique position in Bangladesh in the IT sector. One way to achieve this is to develop a strong subscriber base to be able to penetrate in the markets with other attractive products like Note book, Net book, Desk top computer and all sort of IT products. The ways to ensure a strong subscriber base is to:
- Meet customer requirements
- Establish technological leadership trough choice of appropriate technology
- Establish service leadership through quality manpower
- Expand the footprint of cellular coverage
- Expand the customer base
Import and Export system:
All the company in the IT business done some activities from producer to end user. Index IT Ltd also done for his activities from producer to the end users. To done these L/C or Work order, company done step by step are given below:
Purchase order (P/O):
Index IT Ltd firstly takes a decision about the quantity of import IT products. After decided they issue a purchase order to the manufacturer or exporter. The manufacturer company analysis order and previous activities of the purchase order company.
Performa invoice (P/I):
Second step of import product is Performa invoice. Mani quotation of any performance invoice is:
- Goods description
- Units price
- Loading delivery (Land port, Air port, Sea port)
Rent or freight:
Freight is very much important for any import, because it is increase or decrease the total cost of any products. In the PI & PO it is clearly mention that.
Port to port:
Freight could be port to port. In that time insurance company did not take risk on the time when the products are on the road or middle time of port to port.
CFR (Cost and Freight): Freight will be beard by exporter.
FOB (Free on Board): Freight will be beard by importer.
Factory to port:
When exporter company deal with Importer Company that he will serve the products from factory to port that time all risk and transport cost will bear the importer company.
DC / LC:
Let us get some official formalities about DC and LC.
- Required Docs
- Commercial invoice.
- Packing list.
- Certificate of Origin.
- Bill of lading
- Truck Receipt
- Challan for Road
- Air way Bill
- Bill of Exchange
- Insurance Cover note
- LCAF ( Letter of Credit Application Form)
Index IT Ltd’s products:
|Samsung Laptop||Key board||Speaker|
|Samsung Net book||UPS||Cartridge|
|Hard disc||Mother board||IPS|
|External hard disc||LCD TV||Sarver|
|External DVD writer||Laptop battery||Cooling fan|
|Portable hard disc||Laptop bag||Bar code|
|Pen drive||Blank DVD, CD||Mouse|
The company that had once relied on its name to gain new market share now has to sensibly market their brand and packages among the customers. The main advertising is done in newspapers and electronics media. The advertisements have a general look targeted towards everybody. Index IT Ltd ads in the past used to emphasize on building a solid aristocratic image of the different types of PC packages and a ‘light and happy’ image of the users expectation wise selling packages. But at the moment there is no differentiation in the ads because Index IT Ltd does not have any use of ‘aristocracy’ any more. It targets the general population. The ‘light and happy’ image is visible, however, on the advertisements in television and sometimes on newspapers. Overhead plastic billboard ads of Index IT Ltd are visible on every major and important road of Dhaka and other cities.
Personal selling is done not just for IT but also for new data transfer services to corporate customers. This is done by the services marketing department under CSO and also by Corporate Sales department under Marketing and Sales.
The marketing department carries out public relations. It emphasizes on PBTL’s contribution to the development of the IT sector industry in Bangladesh and the introduction of advanced CDMA technology. As part of their promotional activity the marketing department gives out banners, poster and calendars to its distributors, Retailer and different pear groups. Notebooks, T-shirt, Pen, and calendars are given out to corporate clients every year. For supporting sales activities, for example, Index IT Ltd had offered every month different types of scheme for both Customer and Dealer.
Both schemes are define with example below:
Dealer promotion scheme:
As we are the “Authorized distributor of “Samsung electronics company” so we offer different sort of Dealer Promotion Scheme and customer promotion scheme which we are get from SAMSUNG’s head office. Samsung and Index IT Ltd think that by these types of scheme definitely increase sell and Brand power.
This year 2011 we offered monthly scheme which are given below:
09th March 2011
Samsung Channel Partners
Index IT Ltd.
Dear Channel Partners,
Samsung Monitor Channel Partner’s Scheme from 10th March to 10th April 2011.
We are happy to announce “Samsung Monitor Channel Partner’s Scheme from 10th March to 10th April 2011.” which will be valid for purchasing Samsung LCD/LED monitor from INDEX IT LIMITED. This effort from Samsung and Index IT Ltd is to recognize you and your effort to become a valued member of Samsung family member. We always respect your loyalty towards Samsung Monitor and we believe our all success comes from your endless effort.
Please find detail scheme below:
- Scheme Period: 10th March to 10th April 2011.
- Eligibility: This following scheme will be valid till mentioned period purchase from INDEX IT LIMITED for any model of SMASUNG LCD/LED Monitors.
|1.||250 Units||1 Person Malaysia (SDMA Visit)|
|2.||200 Units||2 unit Samsung Net Book – N148|
|3.||175 Units||2 unit Samsung 23″ LCD|
|4.||120 Units||1 unit Samsung MFM – Monitor TV|
|5.||100 Units||1 unit Samsung IT sector|
|6.||75 Units||1 unit Samsung LED monitor|
|7.||50 Units||1 unit Samsung Camera|
Terms and Conditions:
- Samsung and Index IT Ltd will take the responsibility for Air ticket and hotel booking. For visa processing our valued dealer will take their own responsibility.
- Only channel LCD monitors will fall under this scheme.
- Dealers cannot sell Samsung LCD monitors at low price and unauthorized Samsung LCD monitor if any dealers found practicing this type of activities, will be automatically disqualified from the scheme
- Channel Partners (Dealers) need to submit photocopy/Scan copy of purchase invoice provided by Index IT Ltd to Samsung Dhaka Branch Office on Saturday of every week where quantity, price, serial no: is clearly mention.
- Mention “Samsung Monitor Channel Partner’s Scheme” in the subject for scan copy sent through e-mail. Mention Dealer’s name and detail contract (Name, Phone number, address) clearly in sender address. Name/Address need to match with Index IT Ltd’s invoice.
email@example.comMention “Samsung Monitor Channel Partner’s Scheme” on the top middle side of the envelope for invoice copy sent through courier. Mention Dealer’s name and detail contract (Name, Phone number, address) clearly in sender address. Name/Address need to match with Index IT Ltd’s invoice.
|Mohammed Enamul Hoque |
Manager Sales & Marketing
Samsung Electronics CO., LTD.
Dhaka Branch Office
Casablanka, 5th Floor, House # 114,
Gulshan Avenue– 1, Dhaka 1212
All invoice copy from Index IT Ltd need to reach Samsung Branch office by dealers and no claim will not be accepted after one week (5 working days) of this scheme period (10th April 2011).
- One dealer is eligible for one award only.
- For foreign visit dealers need to submit name and detail of the person who will visit after confirmation from both Samsung & Index IT Limited.
- Samsung reserves the right to change this scheme at any time.
- Sales return will not be allowed for this promotion.
We believe this scheme will strengthen our relationship and enhance you and your team’s status among the Samsung family members
Managing Director Index IT Limited
B.S. Bhaban, Level – 5, 75-76, Laboratory Road
Dhaka – 1205
Phone: 8613663, 8610349
Customer promotion scheme:
April’s Scheme (Customer promotion Scheme)
From 10th April 2011 to 10th May 2011
Borso Boron Uppohar 1418:
From 10 April 2011 to 10 May 2011
If any customer purchases less than 21.1 inches monitor than he will get a green coupon+ taka 100 Agora gift voucher. If any customer purchases less than 21.1 inches monitor than he will get a green coupon+ taka 100 Agora gift voucher, and purchasing more than 21.1 ” than he will get one red coupons and 2oo taka gift voucher. coupon will be draw every week and customer could win 12.5 mega pixel camera or net book or note book for all coupon holder but red coupon holder could be win at the end of the scheme that is trip of Thailand or 32”LED Samsung TV or 42” led Samsung TV. In our Narayangonj branches one customer win digital camera and he is very much proud and his opinion that he will be purchase all sort of computer related accessories from our Narayangonj branch even that he will be make his relatives friends and neighbor to our customer. Before this sercullar scheme that was dealer promotion scheme. We faces some problem in this scheme period that was AGORA is not available all over the Bangladesh, that’s why without Dhaka and Chittagong branch we decided that customer will get same amount research in his cell no.
DEPARTMENTS OF SALES & MARKETING
Department of sales and marketing is one of the most important part of the organization, cause it is help company’s products to promotion and increase sales day by day.
Sales & Marketing Division
The major marketing goal of the Sales & Marketing Division is to capture a significant market segment that will yield maximum revenue by means of passing on directly or indirectly, a high-end IT service.
Different types of advertisement:
All over the it farm,add budget always got big because of that customer cannot get news without ass. There are several system for It add,these are(1)Electric media,(2)Print media(3)It festibal(4)road show(5)campain etc.let get some knowledge and information about add system.
In Bangladesh we didn’t get any add in It sector but our neighbor country and all over the developed country are very serious about this. Latest processor, monitor, laptop, net book, note book etc are take place for this sort of adds. People can get information and usual stricter incivility by media adds.
Bangladesh is not backward in print media. news paper, it magazine, Souvenir, Bill board, Voucher, are available use for print media. If we view in our Dhaka city or big city in 6 districts of our country everywhere are surrounding with bill board, light board and pana flex.
Arrange several markets at a time by hire specific place (approximately 10´x10´, 12´x12´) or something like that. Always road show arrange for 3 days. In March Samsung arrange seven spot at a time there road show for Brand promotion and sell promotion. I personally participate in Multiplan center.
Campain are always good for spread knowledge to the visitor specially student.In my experience on 28.04.2011 & 29.04.2011 in Buet Project competation we try to introduce our Pc security”Shield deluxe”we get sponsorship by donate 50,000/= Buet authority add in there T-shirt our shield dulexe logo and we decorated BUET by pvc,standi all the campus.This campain duration was 2 days long.
Some important activities for Brand promotion and promote company’s sell-branding:
All over the BD different sort of festival are organized by event management firm. In my experience AIUB job festival, CUET Laptop festival, Samsung road BCS digital expo Dhaka, BCS digital expo Khulna, Sylhet etc that lots of visitor are interested for it sector and sells are very much well by expectation visitors get new product, new experience, discount.
IT Festival is the largest event in IT business. These sort of event are organized for sell and brand promotion. All the IT company participate with their products with special discount in the fair event time. Some festival/Event done Index IT Ltd these are:
Event Name: BCS Digital Expo, Dhaka
Venue: Bangabandhu International Conference Center, Dhaka
Date: March 10 to 13, 2011
Time: Daily 10:00 AM -8:00PM
Event Name: Chittagong Laptop Festival, Chittagong
Venue: Engineering Institute
Date: May 01 to 03, 2011
Time: Daily 10:00 AM -8:00PM
Event Name: BCS Digital Expo, Rajshahi 2011
Venue: Ingineering Institute
Date: January 15 to 17
Time: Daily 10:00 AM -8:00PM
Event Name: BCS Digital Expo, Khulna
Venue: New Hotel Tiger Garden, Shibbari More, Khulna
Date: February 19 to 23, 2011
Time: Daily 10:00 AM -8:00PM
Event Name: BCS Digital Expo, Jessore
Venue: Pouro Community Centre, Munshi Meherullah Road, Jessore
Date: January 25 to 29, 2011
Time: Daily 10:00 AM -8:00PM
Sponsorship: Ticket Counter
Event Name: BCS Digital Expo, Sylhet
Venue: Hazi Complex, Dhopa Digirper, Sylhet
Date: February 02 to 05, 2011
Time: Daily 10:00 AM -8:00PM
Event Name: Qubee Summer Laptop fair, Dhaka
Venue: Venue: Bangabandhu International Conference Center, Dhaka
Date: June 10 to 14, 2011
Time: Daily 10:00 AM -8:00PM
Event Name: AIUB Job Fair 2011
Venue: AIUB Gulshan Campus
Time: Daily 10:00 AM -8:00PM
Event Name: BUET Project show
Venue: BUET Campus, Dhaka
Date: Aril 09
Time: 10:00 AM -4:00PM
Laptop festival different from IT festival. It made for two or three days long. All laptop company are displayed their latest laptop for sell with specific offer. As we are the authorized distributor of SAMSUNG, so we displayed always Samsung laptop. In June 10, 11 and 12 at QUBEE SUMMER LAPTOP FAIR 2011, we participated and sell our products with offer and gift item. In fair we offer to the customer that “ with every Samsung Note book and Net book get 1 PC Security Free”. Other company also offer with their products like “ T-shirt, Mouse, Keyboard, Pen, Cap, Pen drive, etc.
Samsung, Dell, HP, Compaq, Sony via, ACER, Toshiba, ASUS, Lenovo, MSI, LG, Gateway etc company displayed in the festival. Branded company think that it is a great chance for the company to branding.
How people get merits by Add:
These are several people who have lack of knowledge about IT sector. They can get knowledge from our different sort of activities, especially student are always interest to visit IT festival, Road show or campaign so by our event activities they get directly knowledge, information and data. There are some categories of people who live outside of Dhaka. They are always worried about IT. Our print media advertisement is able to serve them for fulfill these lacks. Now-a-days people can’t imagine there identification without web address or E-mail address, because of personal or business relation is not bounded in specific place or specific country. Now people are chatting always all over the world and get knowledge, information, data any required web address. So our main activities in IT sector like PC, Network, office mgt etc. We are able to get/give MMS service to rural area’s people so people can get there required by using Internet & MMS service.
This department is responsible for find out the innovative features that can attract the existing and potential customers. Product development is one of the key departments in the company. While developing new packages and upcoming products, this department has to keep in mind the profit and cost issue. Under all these constraints the department has been producing exciting and new features to attract customers.
PC packages is under the Product Development department and is responsible for package design and fixing new products rates, which are the rates of usage for each PC package. This department is also responsible for the coordination of market research for the whole company. They will integrate knowledge gleaned from extensive market research into the design of new packages that fulfills customer needs. This is done very frequently as the needs of even the most stable of customer segments change and the company has to change the tariff structure of its offered packages accordingly.
Brand & Marketing Communications:
The brand department of the company deals with image of the brand in the minds of the customers. It basically helps the brand portray its intended image to the potential target group.
The chief responsibility of this department is logically, promotion and communication of new products and product ideas to customers, both directly through selection of advertising media, then dissemination of information by means of advertisements; and indirectly through dealers by providing them with promotional material. This department is also responsible for public relations, which do not include corporate relations. This is handled, as we have seen, by other departments like RMA, Sells dept. Purchase dept Fair dept Etc. The responsibility of Marketing Communication is immensely important especially in the introduction stage of some package for customers. The company sub-contracts its promotional materials production to local companies. A regular number of events are held to integrate promotional activities with customer relation exercises to enhance the image of Samsung and promote the company & packages it offers.
There is a separate office for Manager of corporate sales who is also responsible for corporate customer relations. Corporate customers are given high priority in terms of sales and also in terms of after sales services. Of course, this is due to the high usage and need for good long term goodwill with such corporate clients. This department deals mainly with sales to corporate customers and maintenance of relations with both current clients as well as explore out potential new corporate clients, whereas the after sales service and other issues are dealt with by the customer services operations section of the company. Direct Sales is also under this department.
The Manager is responsible for channel management and has the very important job of setting up marketing channels by which packages are distributed among clients and by which feedback is obtained from customers. This department is responsible for the selection of new partner (distributor, outlet, and retailer) and motivating them and current partners to promote Index IT Ltd packages and all sort of customers in their respective areas. This department is also responsible for overseeing that there is an excellent support network for each distributor and that they are satisfied with their monetary or otherwise remuneration. This department is also responsible for checking that each distributor does not cut into the sales of others.
The vision of this department is “To ensure the Brand presence and the loyalty in all Point of Sales (POS) throughout Bangladesh where IT products subscriptions are sold.” The portfolio of POS materials will be developed by Trade Marketing as to what items and of what quantity should be distributed to different POS. The need for merchandising will be assessed by mainly Trade Marketing. After having proper direction from Trade Marketing, the Creative unit of Market Communication will select the appropriate design for the merchandising items. Trade Marketing is responsible, with the feedback of Channel Sales, for allocation of different types of POS Materials for different category of POS, distribution and replacement of POS Materials to ensure the brand presence in and outside of the POS.
After sell srevice:
Index IT limited are very much expert to serve after sell service and we get excellent good will in it market.ISO 9001-2000 certified company are “index it ltd”. We have a RMA (Return Material Authorization) there are 40 employees in RMA. All employees are not faces all types of products. Someone faces monitor, someone faces Laptop. So, products wise employees are engaged for specific services. If any customer got problem in his product than our RMA dept. serves as soon as possible.
Within seven working days we try to solve the problem. In Dhaka districts we gather out products by delivery van. But outside from the Dhaka, we give service by branch wise hardware engineers staying in the branch.
RMA decided in case of not services that is some time problem become to return product from customer
Everybody call antivirus. But in IT world Anti Virus and PC security are different. When any piracy or un-licensed antivirus software are used, then we called it “antivirus.”
When we use some licensed antivirus software (single user or three users) with specific Key and pin code for our PC protect from hacker or virus that time it is called PC security.
Now in IT market lots of antivirus are trying to get first and best place for customer. Let get some antivirus company name:
Kaspersky, Norton, Avest, Shield Deluxe, AHN Lab,
This department deals with Monitor, Notebook, Netbook and accessories procurement. Manager of the department is responsible for searching suitable model monitor, Notebook and Netbook according to market demand and company capacity. Major duties of logistics includes- Monitor, Notebook and Net book import and storing, making delivery those to distributor according to the requirement, ensuring available supply of spear parts and accessories and so forth.
The department deals with the information required for Sales & Distribution and Commission disbursement for the Channel partners through which products are sold. Business Automation provides various structured and ad hog reports to analyze and predict the situation. Tracking and profiling of POS is included in the duties that it performs. It develops automated ‘Evaluation Matrix’ to evaluate the performance of Distributor and POS. Duties of the department includes delivery and payment reconciliation with Logistics and Finance. In fact, Business Automation is a concern of Sales & Distribution to facilitate the distribution system in terms of IT and Finance.
SWOT Analysis of Index IT Ltd
SWOT stands for Strength, Weakness, Opportunity and Threat. This is a very important tool for a company to analyze its internal and external environment. In IT business SWOT analysis is very much important for any kind of competitive market. The Index IT Ltd try to analysis SWOT for company’s increasing competation.
The recent investment made by Company’s share holder has created a lot of options for the company. Everyone is expecting that network expansion and technology upgrade will occur at a faster pace. This is especially important if we consider boundaries are opening gradually and technologies are improving.
- Competitive price structure:
Price is a huge competitive advantage for Index IT Ltd. Index IT Ltd is the only organization selling Budget PC, Professional PC, Home PC and Entertainment PC. For example, the lowest package price of Index IT Ltd is Tk 22,000/= with all sort of necessary support like Speaker, Key board and Mouse.
- Network Coverage:
Because of an enormous number of channels, access to Index IT Ltd all sort of computer and its related accessories is very easy. After sell service is best than any other company not only head office but also all over the Bangladesh. Customer get free service 1 year from the purchase date.
- Advanced technology:
Samsung IT technology is the best technology for IT sector. World class IT products manufacturers and new model Monitor invention advancing to this new technology. Index IT Ltd is one of the old Authorized distributor in South East Asia. This company serve the customer all latest IT products and 3G is always get from Index IT Ltd.
- Low Cost:
Index IT Ltd follows low cost strategies for home users and budget users . again sometimes in any festival like IT Festival or Laptop Festival customer expected low price, that time company reduce his products price. The company tries to cut cost in every possible way to maximize the strengths for future battle.
BCS is a centralized organization that helps in easier coordination of business activities. For BCS activities for both customer and Seller or dealer now computer business become more easy than any other time.
- Dedicated & professional management team:
Dedicated core staff, willing to provide significant labor hours to accomplish targets.
- Fewer staff:
The number of staffs working for Index IT Ltd is not enough. Far fewer staff than actually required in terms of tasks to be completed.
- New technology:
We use databiz software but is not enough for future and more over our management system is not that much storing. The most technological problem in our company’s is server problem and our branches which staying beside Dhaka city hampers most for internet service.
- Low network coverage:
Though Index IT Ltd started to provide service in IT world Eighteen years back, it is still behind the other operators from the point of nationwide coverage. Source and Smart was able to use the Product wise service and Retailer and whole seller are separate by Branch wise. Where The Computer Source operate his activities with 36 Branches and Smart Technology activities with his 43 Branches. They are try to serve the customer district wise but we did not do that yet.
- Lack of all types accessories:
Though Samsung are good than all types of PC or Laptop but we know that different people different point of view. So all types of products should be available in all the branch but we can’t do that because of shortage of products. So, if we did not ensure that we are able to serve complete solution before that customer did not satisfied from us.
- Advanced technology:
Since still now all company use databize software so it could do the best use present time transaction. As we use this software so it would be very easy for us to use latest software of data biz.
- Secured data transfer:
Secured data transfer means Index IT Ltd has the potential to be the leading player once more. Our data transfer is very much secure for our internal activities.
- Leadership in IT services:
Bangladesh government has already started to provide license to private sectors to make their slogan “DIGITAL BANGLADESH “Samsung is the one of the IT Company that 80% monitor already he sell all around the world of total monitor. Korean company of Samsung. So People of Bangladesh are very much satisfied about Korean products and warranty. Samsung Company could invest lots of money in IT sector so as we authorized distributor so could get benefit of this. If Samsung Company get leadership than Index IT could get it.
- Overseas expansion plan:
The growing need for across border IT sector services at lesser cost (e.g. with neighboring India, Burma, then onto Thailand, etc) can be an opportunity for Index IT Ltd.
- Technology factor:
There is a high degree of acceptance of latest technological IT sector phone in the world. All features contain of IT sector phone could get place of IT, especially computer.
- Legal problems:
Lots of company did not ensure customers satisfaction. Customer that’s why could not get decision for their required. Sometimes government’s decision is not good for IT business. In this budget government VAT increasing 9%, (which was before 3%) is very harmful for both customer and dealer.
- Imposed Tax:
In the fiscal budget of 2011, the government imposed more Tax than any other physical year. Now people will give more money to the government for there Tax reason. Where government slogan “ Digital Bangladesh” but increasing of VAT and Tax will not good for people and government.
- New competitors:
If new, international competitors like ‘HP, ASUS, DELL enter into the market for low price and there dealer sell products low price than Index will get less profit. More over if Samsung company decided that more dealer need with index that time it will be more harmful for our company.
- Global companies:
In Bangladesh, global companies like HP, ASUS, DELL think to increase more capital for take the leadership in laptop market. If so, it will be a huge threat for Index IT Ltd.
In my point of view, I think that if the company done the following step then weakness and threat could be overcome:
- Latest software should be use.
- HR department should take some step for skilled human resource made.
- Monthly training should be start from top level to operation level.
- Pension should be start for future safety.
- Competitor’s activities should be observation.
- Future activities should be made properly.
Industry Analysis through Porter’s 5-forces model
Each of the five forces and its association with the current distribution network is represented as follows:
Bargaining Power of Suppliers
- Bargaining power of suppliers is high because:
- Manufacturer can supply his products any country on his choice.
- Developed country can serve his logistic support better than Bangladesh.
- L/C or other supports are better than our country.
- Government help is insufficient which increase bargaining power of supplier.
Bargaining Power of Buyers
Bargaining power of buyers is comparatively low under certain conditions:
- Computer customers have significantly low bargaining power because of the high cost of procurement of computer. They have to rely for spare parts and other help like after sell service.
- Home Users may switch from Index IT to other company. In many causes it is seen that home users if get better price offer than he take alternative decision to his choice of brand.
- In cases of corporate users which require high deposits to operate them and give them total solution, buyers have significantly less purchasing power. The amount of investment means that customers cannot shift easily from one company to another.
Barriers to Entry
Let us look at the potential competitor’s scenario from the barriers to entry perspective:
Due to customers or users expectation are increasing day by day so our company could not serve all of customer’s expectation so our brand loyalty could be shown some lack before. However, potential new entrants to the industry will be deterred by the high brand loyalty to other company’s package. Essentially it is believed that the total potential market has been fulfilled by as much as three fourths, thus leaving a very small segment of customers for new entrants to gain. High brand loyalty to Samsung and the die-hard users of the other three companies: Dell, ASUS and HP ensure that potential entrants will be strongly discouraged by the high brand loyalty in current markets.
Absolute cost advantages & economies of scale:
Current players have a more or less absolute cost advantage because they have already invested in IT infrastructure and have regained their investments. New companies will have to invest in equipment and will take considerably greater time to cover initial equipment-purchase expenses. Considering the size of the four companies already operating and the size of their investments, they will not take kindly to an upstart in the industry and may use as many competitive options as possible – price strategy, quality and value add services etc. – to retain an upper hand.
Another major barrier to entry is the access to distribution channels. With many companies competing in the current market environment, the distributors of IT products are becoming very limited. Moreover, many retailers will not want to carry more lines of IT products as they have to sell the ones they already have. Thus any increase in the number of companies will cannibalize into current sales.
In Bangladesh, the IT products market is not positively for VAT or TAX. Present government take some step which are very much helpful for IT business more over government’s slogan “Digital Bangladesh” take some steps which are:
- Admission process of Collage base on web site.
- Admission process of University base on web site.
- Government job application processing system fully on website base.
- In Government School, some Computer are given on Government cost.
Thus they will not take kindly to new companies entering the industry. This may make them influence the government to introduce new legislation designed to restrain the business activities of new companies.
Threat of Substitute Products:
For Index IT Ltd the threat of substitute products is very real. Many customers prefer to use that sort of Laptop and IT products which are enter in to the IT world firstly so our first priority as well as Authorized distributor could be hamper for other substitute products for their new invent which is containing all features with computer had.
The IT sector or industry in Bangladesh is now in its growth stage. Since the technology is expensive, there are some companies operating actively the IT sector service. The other companies are HP, DELL, ASUS, ACER, and COMPAQ. Some new company has very recently entered this competitive scenario.
Market Share based on subscriber base in Bangladesh
|7||OTHER BRAND||Rest of the users|
Figure: Market Share of the IT sector laptop Operators in Bangladesh
As operators of IT sector laptop services, Gateway, Lenovo and other some brand newly introduced so HP are direct competitors of Index IT Ltd.
The PBTL license was issued in 1989. The three other licenses were awarded during November 1996, and are identical to each other. However, the licenses awarded to other companies for their IT sector cellular networks differ in some aspects from the license that PBTL holds.
Sales & Distribution of Index IT Ltd
The Sales & Distribution of Index IT Ltd is responsible for all the sales through channel partners. This department is subdivided into four sections. They are Channel Sales, Logistics, and Trade Marketing & Business Automation.
Our Sales & Distribution are work as follows:
- Take some decision from top level of management.
- Decided of quantity are made.
- Distributed quantity from head office to branch
- Make decision what is need in future
- Make L/C to next lot to import.
- Contact with Export Company.
The Manager is responsible for channel management and has the very important job of setting up marketing channels by which packages are distributed among clients and by which feedback is obtained from customers. This department is responsible for the selection of new partner (distributor, outlet, retailer) and motivating them and current partners to promote Index IT Ltd packages to customers in their respective areas. This department is also responsible for overseeing that there is an excellent support network for each distributor and that they are satisfied with their monetary or otherwise remuneration. This department is also responsible for checking that each distributor does not cut into the sales of others.
In IT business trade marketing is very much important for competitive market. Number of customer are very much of the IT business and company can get customer by Trade marketing. The customer are very much faith “ To ensure the Brand presence and the loyalty in all Point of Sales through Bangladesh where IT Sector.
This department deals with in-house store and delivery of products. Manager of the department is responsible for the management of computer related all types of products. Major duties of logistics includes- handset and RUIM storing, making delivery those to distributor according to the requirement, ensuring available supply of spear parts and accessories and so forth.
The department deals with the information required for Sales & Distribution and Commission disbursement for the Channel partners through which products are sold. Business Automation provides various structured and ad hog reports to analyze and predict the situation. Tracking and profiling of POS is included in the duties that it performs. It develops automated ‘Evaluation Matrix’ to evaluate the performance of Distributor and POS. Duties of the department includes delivery and payment reconciliation with Logistics and Finance. In fact, Business Automation is a concern of Sales & Distribution to facilitate the distribution system.
Distribution Channel of Index IT Ltd
Distribution channel is the bridge between the company and the customers. Distribution channel is very important for any company. If there is any gap in distribution channel the marketer is unable to reach its product and services to the customers in time. In the beginning, BCS decided to distribute through its own distribution channel. As the market is growing fast, it is giving dealerships to sell IT sector sets directly to the customers. There are many people interested in becoming distributors of Index IT Ltd. And Index IT Ltd has some define policies that are maintained when the Distributorship is given. Recently, in last year, the restructuring process of the distribution network has taken place, making some dealerships redundant, while at the same time, paving the way for others to come into the scenario.
Previous Distribution Network of Index IT Ltd
When the previous distribution network was active, retailers had to come to the operators to lift products making the whole process of lifting products was time-consuming and lengthy. This resulted in a large amount of channel conflict such that cross territorial distribution and price under-cut was a daily issue.
Freelance-retailers were the most upset. Because of the price under-cut they could not make their expected profit. Moreover, as Index IT Ltd products do not have a pull in the market, most of the retailers did not bother coming to Index IT Ltd to lift products.
Current Distribution Network of Index IT Ltd:
‘Distributorship’ under the new distribution structure follows these attributes:
- Appointed for a defined area or territory.
- Distribute stocks to ‘Exclusive POS’ and ‘Retailers’ within the allocated area/territory.
- Monitor & control the activities of POS.
- Develop the market.
After the activation of the new and improved distribution network of Index IT Ltd, retailers do not have to come to Index IT Ltd to lift products. Index IT Ltd has appointed a specific Distributor in a specific territory who is responsible for the product availability in all the POS in that area. So, retailers can thus have the products readily available at their own shop, saving both time and money. The new distribution network also creates a push of products in the market, giving a forecast of possibly higher sales volume.
- Index IT Ltd should focus mostly on after sell service and genuine products guarantee. All over the Bangaladesh, our branch are spread with network quality and network coverage to retain its customers.
- Switching tendency from Index IT Ltd is very law in individual customers. Business customers and corporate customers switched from other company’s mostly.
- Index IT Ltd should restructure its package so that it can grasp the Business customers and Corporate Customer as this sector is the most revenue-generated sector among all sorts of IT products.
- The new offering of PC Security “Shield Deluxe” would be very much prospective to Business and Corporate Customer if it is offered at most economic rate. In fact, current price for same offer of other company more cost effective than Index IT Ltd’s antivirus products.
- Previous distribution of branch network was good, but now we are very much strong and our branch increasing shown us excellent future.
- Index IT Ltd should implement more loyalty plan like gift items, discounts on event package. with long term vision to retain its existing customers.
We have come to some conclusions from our study. Basically we have conducted our study with Marketing system, distribution segments of Index IT Ltd and all the segments provide us some major results.
Individual customers mostly prefer Brand Loyalty. Corporate customers prefer after sell service and home users connections as they spend more for their IT sector purpose, which ultimately provide them a cost effective benefit. Business customers always use first and noiseless products. After sell service and genioune products are the focus . And finally distributor and retailers provide us the idea that overall market demand is very high for both home users and corporate usurers.
The above scenario are not only true for Index company but for the whole IT sector industry of Bangladesh. So, both the customers and the industry need to rethink about their usual behavior toward IT products to maximize their own benefit. In BCS ITC WORLD, we hope that our prime minister Sheikh Hasina should take some step for IT business present bad environment.