British American Tobacco P.L.C. is the world’s most international tobacco group. Based in London, UK it is a market leader in more than 50 countries selling over 300 brands in some 180 markets world-wide with the strength of almost 90,000 employees.
British American Tobacco Bangladesh, a market leader in the country, is a subsidiary of British American Tobacco p.l.c. Operating in Bangladesh since pre-independence, the company headquarters and cigarette factory are based in Dhaka, with a tobacco leaf processing operation in Kushtia. The company employs more than 1300 people and provides indirect employment to a further 24,500 farmers, distributor and supplier. British American Tobacco Bangladesh is a company with world class people, products, system, process and tools.
We are the first company in Bangladesh to be awarded Class A status as part of the international and prestigious total business excellence programmed, MRPII, audited by internationally renowned consultants Oliver Wight. We have a total company commitment to excellence and drive for continuous improvement, aspiring to be among
the very best in the world.
Our world class people work as a team to meet challenges in an ever-changing business environment. We have an open and transparent culture with customer service that exceeds expectations. We continuously seek to improve our manufacturing efficiency without compromising on quality. As a result our company is recognized as benchmark for quality in the region when we were the first company to be given the license to manufacture Benson & Hedges in-house, within this region of BAT Group which stretches from Pakistan to Australia. Our utilization of information technologyis at the core of our business strategy and is a benchmark among other fast moving consumer goods companies in the country.
BATB give too much priority to internal communication so that they can meet customer need effectively. They have own intranet within their organization to maintain communication to everyone in the company. They always try to meet customer expectation by maintaining a standard level of communication.
To be operating in a controversial and challenging industry like the cigarette industry successfully, communication plays a very important part. It is the responsibility of the
communication and the trade marketing team together to let the consumers know about the new products or changes in the existing products; this becomes even more challenging as they can not promote their products using any media vehicle. Besides tasking care of the new regulations and talking to stakeholders is also a very important role for the communication team. Internal communication, that is letting the employees and factory workers know more about their product and leasing their cognitive dissonance through proper communication and keeping them informed about the company happenings, is even more important.
1.2Objective of the study :
Measuring the effectiveness of the tools used for internal communication in British American tobacco Bangladesh.
The study was limited to the permanent employees of British American Tobacco Bangladesh. No comparison or analogy has been drawn taking other BAT companies or other tobacco companies in Bangladesh. The survey respondents were asked questions about the tools and services driven by BAT Bangladesh’s CORA Communications team. Other forms of organizational communication were not taken into consideration.
The report is mainly based on the survey findings. So major part of the report represents the survey result and analysis; hence most of the information is primary a few officials were questioned regarding the products, their price and placement. Some information about the company and its operations has been taken from the brochures and previous reports.
1.5 Sources of data collection:
The primary respondents were the employees of company. Both management and non management employees were considered to get a clear and non biased answer. The sample size taken was 37 for management and 33 for non-management employees that make it a total of 70 employees.
The sampling method adopted is stratified clustered sampling. It was kept in mind that almost all the strata have at least one representative in the survey. to keep the survey unbiased, employees from all job grades and territories were brought under the survey. Separate questionnaire (English and Bangle) for both management and non management employees were prepared. The questionnaire was prepared based on semantic differential and Likert scale and ratings. The sample questionnaire can be found in the annexure.
1.6 Activity Schedule:
A= Collecting information about the research contents and theory.
B= Preparation of proposal for research.
C= Collect informal information about priority banking.
D= Directly observer
E =Selection of samples.
F =Asking the internal employees.
G=Organizing and evaluating collected information.
H=Preparing the final report.
I=Assessment by the course instructor.
J=Submission of final report.
Although while conducting the survey, the employees of BAT provided great support but there were sonic unavoidable problems that worked as limitations.
- Conducting the survey proved to be a bit difficult as it included both the management & non management workers. The management employees’ part was manageable as they more or less were able to comprehend the questionnaire. Although they were not willing to sacrifice much time for the survey but they answered by understanding the essence of the survey.
- Though some questionnaire was sent outside Dhaka, but the number was not substantial, so the survey results are biased towards die employees of the Dhaka Head office to some extent.
- But with the non-management workers, it was a bit difficult to make them understand the scale and rating, and in some cases, they gave wrong ratings.
- Getting the factory workers in the working hours was a bit difficult, so 1 had to wait for the road show. I was able to attend only one road show as others were scheduled in the night shift.
1.8 Conceptual framework of the report:
This study seeks to analyze the role played by “Internal Communication” in British American Tobacco Bangladesh; how this role is accomplished and how effective “Internal Communication” has been in fulfilling this role. The problem statement from the client (British American Tobacco Bangladesh’s Corporate Communications Team) Was:
“How effective are our Internal Communication tools and service in aligning our employees with the company’s business strategies and objectives; and how satisfied are the users with the tools and services?”
2.0 Overview of the Industry:
The industry background includes the background of the product category, current situation of the industry, the competition, the segments in which the companies operate and the environmental analysis.
2.1 Major Brands, Manufacture and Segments:
British American Tobacco Bangladesh has been present in Bangladesh for a very long time and it is still doing its business dominantly with four of its key drive brands i.e.
Benson & Hedges, John Player Gold Leaf, Pall Mall and Star. Among the competitors, Dhaka tobacco’s “Navy” gives good competition to Star into he Tk 1 segment. The other brands present in the market are:
2.2 Industry Life cycle:
The market (or industry) life cycles describe the evolution of the market. These cycles have a similar shape to the product life cycle and similarly, have a number of distinct stages:
- Decline stage
- Shake out stage
The industry life cycle has been shown in the following:
The cigarette industry in our country is still in a growth stage mainly because, among all the tobacco products most are Bidi and low priced brands. Among the cigarette brands, the most sold ones are tk 1 brands; like for BAT the brand that sells with the largest volume is star. The following table represents the current situation of the brands sale:
■ Monthly sale in million sticks (approx)
The table shows that a higher priced brand that is in the higher segment of the market is far below the sales volume of the other lower priced brands. The highest selling brands are Star and Navy. This shows that the cigarette industry is mainly depending on the high volume but the profit margin is very minimal. With star, BAT is selling a lot, but they are literally making profit near to zero. An industry liked this which is living on volume more than value can be called to be in the growth stage.
2.3 SWOT Analysis:
SWOT analysis is done to find out the factors important to the operation of a business in the environment, both internal and external. The internal factors help to find out the strength and weakness; the threats and opportunities can be comprehended by scanning the external environment. The SWOT analysis of the cigarette industry is given below:
- Because of high regulations, high cost and high entry barriers, new entrants are discouraged, which is good for the current and already established market players.
- As they are not allowed to go for public promotion, the tobacco companies can use their resources for other purposes. Like BAT is investing for and increasing their filed force.
- Dealing with a product which is sensitive in may issues
- Can not promote their products using public media vehicle.
- A high volume but low value industry
In Bangladesh, tobacco market is pretty strong. Among the sale of all tobacco products, 68% is Bidi and the rest 32% is cigarette. But with the up gradation of purchasing power and good economic condition, high rate of migration from Bidi to cigarette is also expected. Even now; the migration rate is good enough to sustain the cigarette industry. Total no even if reduce, but the migration will make it sustainable. The cigarette market depends not on increasing number of customers, but on switching to cigarette brands.
- Increasing amount of awareness among the consumers about the health hazards caused by smoking.
- Increasing number of regulations and laws imposed by the government about smoking and selling cigarettes.
2.4 PEST analysis:
A PEST analysis is an analysis of the external macro-environment that affects all firms. PEST is an acronym for the political, economic, social and technological factors of the external macro-environment. Such external factors are usually beyond the firm’s own control and sometimes present themselves as threats. For this reason, some say. PEST is an appropriate term for these factors. However, changes in the external environment can also create new opportunities and so the letters can be rearranged to construct the more optimistic team of step analysis. The next page shows how PEST analysis is helpful in analyzing the overall environment.
The following are examples of some of the factors that might be considered in a PEST analysis:
Government regulations have increased in the recent years. Tobacco companies can not use any vehicle to promote any of their products and they also can not organize any event.
Or competition with their brand name. That is the reason BAT had to stop organizing a popular program of their’ – “B & H Star search”.
Usually price increased do not affect the brand loyal segment, but the lower segment gets influenced with he price increase. Like, even if BAT increases the price of B & H, it might not affect the brand loyalty of the customers, but the price increase of JPGL or star may influence the customer to shift to navy. Price increase may depend on lot of factors, like increase in tax or the price increase of the raw materials. And with his increase in the purchasing power and economic emancipation, consumers will shift to higher segment brands; like every year a big number of people migrate to cigarette from bidid.
Increasing awareness of the consumers might well affect the sale of the brands. Increasing health campaign, awareness and lifestyle of people also affect the consumption of cigarettes. Like more stressful life can lead to more consumption of cigarettes. People also get influenced in choosing their brands influenced by their peer or reference group.
The production of cigarettes and quality control and checking can have influence on the overall production process to a great extent. Import of new machinery includes a lot of internal communication with the factory workers to make them understand the operation and also to reduce their fear of getting laid off because of the new machinery.
2.5 History of Tobacco:
■ 1,000 BC
Ancient temple caring depicts Mayan priests in Central America Smoking tobacco through a pipe. Tobacco leaves become widespread in medicine for use on wounds as a means of reducing pain. Later the Aztecs incorporate smoke inhalation into religious rituals.
Two castes of smokers emerge: the pipe smokers at the court of Montezuma and lesser Aztecs who roll the leaves into crude cigars.
■ 470-630 AD
Mayan tribes begin to scatter and tobacco travels with them. The leaf moves southwards to South America where it is wrapped in maize and palm leaves and smoked and north where it is introduced to the native Americans into him Mississippi area.
In North America pipes are made from clay, marble or lobster claws. Some pipes with two stems, are used for inhaling through the nostrils. Tobacco chewing is common, especially in South America, where the leaf is mixed with lime.
Arawk people in the Bahamas, on an island Christopher Columbus christens San Salvador, offers the explorer dried leaves. Not understanding their significance, Columbus discards them. A month later Rodrigo de Jerez and Luis Torres returning from a trip into the interior of Cuba- Stumble on villagers inhaling the smoke from burning dried tobacco leaves through a hollow Y-shaped piece of cane called a tobacco or tobacco. Jerez is though to be the first smoker outside the Americas.
When Jerez returns to his home town of Ayamonte, during the Spanish Inquisition, the holy inquisitors accuse him of “consorting with the devil” when they see smoke coming from his mouth. He is imp rosined for seven years. By the time he is released, smoking is a custom in Spain. Jerez perhaps sets a precedent for the plants controversial future.
The discoverer Juan de Grijalva lands in Yucatan, Mexico, and sees local people smoking tobacco leaves. The following year, the conquistador Cortez finds Aztecs in the capital of Mexico smoking strong, scented tobacco.
In his history of the West Indies, Fernandez de Oviedo y Valdes writes: “Among other evil practices, the Indians have one that is especially harmful, the inhaling of a certain kinds of smoke which they call tobacco. I cannot imagine what pleasure they derive from this practice.”
Jean Nicot, the French ambassador to Lisobon recommends tobacco snuff to his royal
Patron, Catherine de Medici, who suffers from sever migraines. The snuff provokes a relieving sneeze which astonishes her staff but becomes fashionable. In Nicot’s honors, the tobacco genus Nicotinic was later given its botanical name.
Conquistadors bring tobacco back to Spain as a luxury for the wealthy. But when Seville beggars begin to pick up discarded cigar butts, shared them and roll them in scraps of paper for smoking, they become known as cigarillos, meaning little cigars.
King Philip II of Spain ponders tobacco’s medicinal properties not for the benefit of his subjects, but for commercial gain. He charges Royal Physician Francisco Hernandez with making a study of the plant’s properties
Nicolo Monardes, a famous physician at the University of Seville, recommends tobacco as a cure for more than twenty ailments, including tooth ache and asthma. Certainly not recommended today!
Sir Francis Drake returns from the Americas with what is through to be the first consignment of tobacco to the UK.
Virginian colonists disembark at Plymouth smoking clay pipes.
A century after Columbus’ voyage, tobacco is grown in Belgium, Spain, Italy, Switzerland and England, and by the turn of the century the crop has spread to the Philippines, India, Java, Japan, West Africa and China- from where merchants take it to Mongolia and Siberia.
By the time of Queen Elizabeth its death, England has become the wealthiest country in Europe (partly thanks to its dominant role in the tobacco trade) and is taxing the crop at 2d (2 shillings) per pound weight.
King James I publishes A Counterblast to Tobacco, one of the first anti-smoking polemics. But his disapproval doesn’t stop the King from increasing the duty on tobacco
by more than 40 times as much as the tax levied by Queen Elizabeth, to 6/10d (£ 6 10 shillings) per pound weight. Consumption of tobacco increases as belief spreads that the leaf helps ward off the plague.
King Phillip III of Spain decrees tobacco could only be grown in Spanish colonies. Production by foreigners is punishable by death.
James I grant two traders exclusive rights to import tobacco-paying £3,500 for the first year, raising to £7,000 each year for the next decade.
King James I bans domestic cultivation of tobacco and announces that it is to become a royal monopoly.
Holy Roman Emperor Ferdinand III bans “tobacco drinking” under threat of indeed but smoking continues.
Pope Urban VIII bans snuff claiming it takes users too close to “sexual ecstasy”. King James I decrees that all tobacco should arrive at the port of London. Smuggling increases and sizeable amounts of duty are lost. The British Government widens the number of ports where tobacco can land.
Following the advice of his minister Cardinal Richelieu, Louis XIII of France levies a tax of 30 sols on every pound of tobacco. Two centuries later Napoleon III would observe: “This vice brings in one hundred million francs in taxes every year. I will certainly forbid it at once- as soon as you can name a virtue that brings in as much revenue. “Government monopolies prove so lucrative them persist in several European countries late into the twentieth century.
Turkish sultan Murad IV forbids smoking with the threat of execution. He also demolishes coffee-houses in Constantinople and confiscates the assets of executed
Tsar Michael of Russia declares smoking a deadly sin. Arrested smokers are flogged or have their lips slit. A 1643 visitor to Moscow says: “Those convicted of taking snuff, both men and women, can expect to have their noses taken away.”
The court physician to Louis XIV, Fagon, offers a contemporary view: “When he opened his snuffbox, did he not know that he was opening a Pandora’s Box, from which would spring a thousand ills, each worse than another?” Louis XIV is said to hate tobacco but does not ban it, as it would have meant giving up money from the state monopoly.
An increasing number of protectionist barriers are created, particularly in the eastern United States, to safeguard English interests.
Following the fashion of the day, Pope Benediet XIII allows the use of snuff in St Peter’s Church, reversing a ban imposed 75 years earlier by Innocent X.
Scenting a business opportunity, the Vatican opens its own tobacco factory.
British and French soldiers fighting in Spain during the Napoleonic wars bring cigars back home. Their popularity grows quickly.
A smoking room is established in the British House of Commons.
Cigar consumption increases with the invention of the friction-activated phosphorous match.
The Mexican war leads to a huge increase in the popularity of cigars smoked by soldiers trying to relieve fatigue and quash hunger. Soldiers develop a taste for the darker tobaccos from the south.
In the United States, tobacco is linked to the temperance movement. Reverend George Trask, a former smoker, sets up the American Anti-Tobacco Society for which he serves as president, vice president, secretary, treasurer and auditor.
Smoking compartment is introduced on English railways.
James Bonsack, a Virginian, invents a machine that can produce 120,000 cigarettes a day. James “Buck” Duke, destined to become the first chairman of British-American
Tobacco 21 years later, buys two machines and his family’s tobacco company moves into cigarettes.
In America, 26 states pass laws banning the sale of cigarettes to minors.
Lucy Page Gaston, an Illinois teacher and journalist and member of the Women’s Christian Temperance Union, establishes the Chicago Anti-Cigarette League.
The Anti-Cigarette League publishes a pamphlet claiming links between cigarette smoking and brain disease.
The Imperial Tobacco Company of the United Kingdom and The American Tobacco Company of the United States agree to end a trade war by forming a joint venture, the ‘British-American Tobacco Company Ltd.’ James B. Duke becomes the venture’s first Chairman.
The New York City authority bans women from smoking in public, Two weeks later Katie Mulcahey is arrested for violating the rule. As she is led away she declares, “No man shall dictate to me”. Cigarette smoking was often seen as a symbol of women’s emancipation.
Outbreak of World War I. General John J. Pershing, commander-in-chief of the American forces in France in 1917, calls tobacco “indispensable to the daily ration”. In Europe, troops use cigarettes to pass time and to try to calm their nerves. The popularity of cigarettes in the armed forces associates tobacco with patriotism.
US State of Idaho bans cigarette sales.
Despite the bans, cigarette sales continue to increase. The American Mercury reports, “The more violently it has been banned, the more popular it has become”.
US President Roosevelt makes tobacco a protected crop as part of the World War II war effort. His wife Eleanor was dubbed “the first lady to smoke in public”.
During World War II, smoking increases. By the middle of the next decade, more than a quarter of American women and more than half of American men smoke cigarettes.
Two British researchers, Richard Doll and A. Bradford Hill, report the results of a four year study comparing 1,465 lung cancer patients to an equal number of patients with other diseases, matched for age, sex and region. They conclude that lung cancer patients are considerably more likely to be smokers and much more likely to be heavy smokers.
Public health warnings emerge.
The American Surgeon General publishes a 387 page report stating: “Cigarette smoking is a health hazard of sufficient importance in the United States to warrant appropriate remedial action.” For the first time smoking is banded in the State Department auditorium.
The tobacco industry sees substantial annual duty increases which result in cigarette taxation increasing by 85 percent or more in several countries, including the UK.
Litigation issues tend to dominate the news headlines around the tobacco industry. In the US, five years after the first State lawsuit was filed, major US tobacco companies signed a Master Settlement Agreement with 46. State Attorneys-General, giving these US states more than $200 billion in total over 25 years in settlement of lawsuits seeking reimbursement for the Medicaid costs of treating sick smokers. The Master Settlement Agreement restored stability to the tobacco companies, allowing them to concentrate again on running their business.
■ 2000 and beyond
Litigation continues to be a significant issue for the tobacco industry, especially in the US, but the de-certification of lawsuit activity. The Framework Convention on Tobacco Control (FCTC) is adopted by the World Health Organization; it calls for restrictions on tobacco advertising and sponsorships, new labeling standards clean indoor air controls and stronger action against cigarette smuggling. Tobacco companies work with governments to reduce smuggling. Bans on public smoking are enacted in some places and proposed in other; the ban in New YorkState is unpopular with a majority of voters. British American Tobacco test-markets Swedish-style snus in Sweden and South Africa, giving smokers the chance to enjoy a less harmful form of tobacco, without lighting up.
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