BANGLADESH RESEARCH PUBLICATIONS JOURNAL
ISSN: 1998-2003, Volume: 11, Issue: 2, Page: 119-126, May 2015
Review Paper
Md. Rashed Mahbub Tarafder 1 , Md. Farijul Islam 2 , Noor Muhammad 3* and Shah Md. Shakil Ahmed 4
1
Md. Rashed Mahbub Tarafder, Md. Farijul Islam, Noor Muhammad and Shah Md. Shakil Ahmed(2015).
Application of Marketing Mix Tools in the RMG Sector in Bangladesh: A Case Study on TRZ Garments Industry.
Bangladesh Res. Pub. J. 11(2): 119-126. http://www.bdresearchpublications.com/admin/journal/upload/1410070/1410070.pdf
Retrieve from
Abstract
The purposes of this study was to identify the nature of MRG, export performance, pricing factors, earnings and the difficulties and barriers faced in the international market. Data were collected mostly from secondary sources such as Export
Promotion Bureau(EPB) Bangladesh, on-line news archive and internet/web site.The usual descriptive statistical parameters were used for the statistical analysis. The research identifies main two categories of Ready-made garments manufactured in
Bangladesh. Garment products on average generated more than 95 percent share of the total textile and garment exports to the European Union (EU) from
Bangladesh during the period 2005-2013. Two promotional tools were identified with some other promotional tools. Bangladesh exported a total worth of US$90.42 million RMG in pre-intervention period (2002-2006) whereas about US$1830.19 million was earned in later period (2007-2013).SWOT analysis of marketing of RMG products in Bangladesh reveals five strengths, five weakness, three opportunities and four threats. Six pricing policy and six constraints faced by the garments factory in selling their products also were identified.
Key words: Marketing, Garments industry, Case study.
Introduction
The Readymade Garment(RMG) industry of Bangladesh started in the late1970s and became a prominent player in the economy within a short period of time. The industry has contributed to export earnings, foreign exchange earnings, employment creation, poverty alleviation and the empowerment of women. The export-quota system and the availability of cheap labor are the two main reasons behind the success of the industry. In the 1980s, the RMG industry of Bangladesh was concentrated mainly in manufacturing and exporting woven products. Since the early 1990s, the knit section of the industry has started to expand. Shirts, T-shirts, trousers, sweaters and jackets are the main products manufactured and exported by the industry. These two destinations account for more than a 90 percent share of the country’s total earnings from garment exports.
The RMG industry of Bangladesh has expanded dramatically over the last three decades.
Since the early 1980s, the RMG industry has emerged as an important player in the economy of the country and has gradually replaced the jute industry (Dasgupta, 2002).
The “export-quota system” in trading garment products played a significant role in the success of the industry. Bangladesh has become the second largest global apparel exporter owing to the rapid development of apparel sector, which turns out to be the key driver of socio-economic development contributing more than 16.31% of national GDP in
2012-13 (BBS, 2014). About 78.6% of total national export earnings were from only RMG sector in 2012-13 (IBTCI, 2012). Bangladesh bagged about 60% of its apparel export earnings (and 73% of total knitwear export) from European Union. However, 95 percent of
*Corresponding Author Email: noor.hstu@gmail.com
1 Former MBA student, Department of Marketing, Hajee Mohammad Danesh Science and Technology
University, Dinajpur-5200
2 AssistantProfessor, Department of Marketing, HSTU, Dinajpur-5200.
3 Former MS Student, Department of Agricultural Extension, HSTU, Dinajpur-5200.
4 Final year student, Faculty of Agriculture, HSTU, Dinajpur-5200

Tarafder et al. 120 the total textile and garment export earnings were only from the European Union during the period 2005-2013. Therefore, it was commonly assumed that any economic uncertainty would affect export earnings of Bangladesh adversely, if other things remain unchanged. During the recent prolonged debt crisis in Euro Zone, the hypothesis has been testified as valid, since growth rate of Bangladeshi RMG export to EU-27 reduced to 20.5 percent in 2012-13 from 35.67 percent in2011-12 (Haider, 2012).
Currently, there are more than 4,000 RMG garments in Bangladesh. More than 95 percent of those garments are locally owned with the exception of a few foreign garments located in export processing zones (Gonzales, 2012). The RMG garments are located mainly in three main cities: the capital city Dhaka, the port city Chittagong and the industrial city Narayangonj. Based on Bangladesh Garment Manufacturers and Exporters
Association (BGMEA) data, Mainuddin (2009) found that in 1997 more than 75 percent of the garments employed a maximum of 400 employees each. Garment companies in
Bangladesh form formal or informal groups.
Objectives of the study
The objectives of the enterprise analysis are the following.
1.
To identify the classification of Ready Made Garment products and features of the product.
2.
To know the export performance of Bangladesh garments in international market.
3.
To analyze the promotionaltools in Ready Made Garments industry.
4.
To know the earnings from RMG sector in Bangladesh.
5.
To analysis the pricing factors and method.
6.
To identify the difficulties and barriers faced in the international market.
Methodology
Following a trend analysis approach to evaluate the effects of market diversification on
Bangladesh apparel sector, the paper is mostly based on information from secondary sources such as Trade Map, EPB Bangladesh and BKMEA’s Database. Information over the last ten years from 2003 to 2013 has been gathered to analyze the effects of product and market development on clothing export earnings as market diversificationentails both market as well as product developments. The entire period is divided equally into two periods containing five years each i.e., Pre-intervention period from 2003 to 2007 and
Intervention period from 2008 to 2013 to compare the effect of intervention (in the name of market diversification strategy) on apparel export earnings between the two periods.
Finally, a detailed analysis of the scenario of Bangladesh apparel export over last ten years to the global market has been presented for a comprehensive discussion. Hence, the current study would be more appropriately termed as a descriptive study. Therefore, the research design for the study is descriptive research design. For SWOT analysis primary data were collected from the respondents who are the stakeholders of TRZ garments industry. Five Focus Group Discussions (FGD) were done with open form interview schedule. Both the qualitative and quantitative data were collected to meet the objectives from secondary sources, e.g.,
 Data inventory of Bangladesh Export Promotion Bureau Bangladesh (EPB) relating to readymade garments export.
 Data inventory of Bangladesh Garments Manufactures' and Exporters' Association
(BGMEA)
 On-line news archive of newspapers and news agencies home and abroad
 Annual report of the company.
 Various Business and garments related Books, journals and literatures.
 Internet/Web sites.
Results And Discussion
Classification of Ready-made garments manufactured in Bangladesh
Ready-made garments manufactured in Bangladesh are divided mainly into two broad categories: woven and knit products. Shirts, T-shirts and trousers are the main woven products and undergarments, socks, stockings, T-shirts, sweaters and other casual and soft http://www.bdresearchpublications.com/journal/

Application of Marketing Mix Tools in the RMG Sector 121 garments are the main knit products. Bangladesh is more successful in Knitwear production as well. Recently Bangladesh has grabbed the position of second largest knitwear exporter in terms of volume in 2011 only behind China. The knitwear and woven garments export volume has grown at 43% and30% respectively year over year during the
October-December period of 2013.Woven garment products still dominate the garment export earnings of the country. The share of knit garment products has been increasing since the early 1990s; such products currently account for more than 40 percent of the country’s total RMG export earnings.
Features of the products which are export from Bangladesh
Tags: Top Garment
Brands,European Brand
Clothing,High Brand Clothing
Tags: Branded Garments,
Bangladeshi Brand
Tags: T-shirt, LadiesHand
Crochet, GarmentLadies Tshirt
Tags: GarmentsApparel Tags: Apparel Stock
Tags: Adult Footless Pajamas,
Novelty Pajamas, Cheap
Pajama Set
Tags: V-neck Cheap T-shirt, Vneck Men T-shirt ,V-neck T-shirts
Colored
Tags: Garment Dyed Desert
Blush Western Man Slim Fit
Denim Shirt, Stunning Garment
Dyed Western Slim Fit Denim
Shirt , Slim Fit Western Garment
Dyed Denim Shirt
Tags: T-shirt, Ladies Fashion
Knitted Garment, Ladies T-shirt
The RMG sector has been showing an exponential trend in export earnings since 2004, which could largely because of market diversification strategies, GSP facilities, lower wage rate, improved production techniques and so on. Total clothing exports rose by
US$15,157.6 million from an export value of US$ 4,056.87 million in 2002 to a staggering US$
19,214.47 million mark in 2013.
Table 1. Bangladesh export performance to new emerging markets (in million US$)
Country
Australia
Brazil
China
Hong Kong
Japan
S. Korea
Mexico
Russia
S. Africa
Turkey
Source:IBTCI (2012).
2004
2.19
0.23
0.24
6.44
14.8
3.09
7.52
1.00
0.66
0.25
2005
2.15
0.07
0.62
7.71
14.6
3.22
12
1.12
2.49
2.51
2006
5.50
0.31
1.87
8.01
16.8
5.50
15.6
1.95
2.26
10.3
2007
7.91
0.68
1.68
7.77
14.28
4.66
20.35
4.11
3.97
24.62
2008
8.21
2.83
5.24
12.79
16.60
5.04
33.35
6.17
6.01
52.96
2009
14.43
9.41
5.24
12.79
16.60
5.04
33.35
6.17
6.01
52.69
2010
26.87
31.90
7.96
19.02
36.65
10.42
99.43
46.63
39.34
301.86
2011
74.02
41.41
16.11
21.28
111.13
20.54
86.70
43.65
39.34
370.42
2012 2013
105.28 248.19
61.18 123.63
38.09 82.38
26.40 473.79
186.72 345.55
44.52
89.50
93.52
92.81
87.97
37.89
66.91
55.00
595.21 471.61 http://www.bdresearchpublications.com/journal/

Tarafder et al.
Table 2. Total RMG export Scenario (in million US$)
122
Year
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Source: IBTCI (2013).
World
4056.87
5040.79
6231.29
6845.53
8252.02
9323.25
13524.85
14197.01
16559.13
19214.47
EU-27 & USA
3872.6
4716.86
5801.65
6375.56
7644.98
8543.41
10030.9
10460.86
11996.15
16533.59
Targeted Countries
36.35
45.62
68.25
90.02
148.91
251.05
618.66
824.59
1272.75
2053.36
Export competitiveness in the European Union market
Bangladesh has experienced both quantitative and qualitative changes in exporting garment products to the European Union market during the period 1996-2005. The textile and garment export earnings of Bangladesh from the European Union increased from 1.2 billion euros in 2005 to 3.7 billion euros in 2013. Garment products generate the major share of Bangladesh’s export earnings from the European Union. For example, garment products on average generated more than a 95 per cent share of the total textile and garment exports to the European Union (EU) from Bangladesh during the period 2005-
2013.
Export Performance (2012-2013),% Export of RMG (2012-2013), %
Data Source: IBTCI (2010).
Promotional tools and techniques used in garments
Promotion means activities that communicate the merits of the product and persuade target customers to buy it.
 Advertising:TRZ(Tasnuva Rehnuva and Zerin) Garments Industry does not follow any advertising strategy for their customers. But sometimes customers like other order product and give order to make product just like that.
 Public relation: Every year TRZ Garments Industry gives some financial support to some meritorious students. In this way, they are maintaining public relation.
Other Promotional Garments activity
Preparing incentive project plans and castings are as follow-
 Preparation of pitch documents and presentations.
 Creating, implementing and monitoring incentive campaigns.
 Project planning.
 Liaising with clients and designers to create a brand.
 Creating supporting marketing collateral. http://www.bdresearchpublications.com/journal/

Application of Marketing Mix Tools in the RMG Sector 123
 Design of online campaigns using our website portal.
 Liaising with clients to administer incentive campaigns and provide a dedicated point of contact on a day to day basis.
 Preparation and planning of monthly activity reports and regular html email communication.
For export promotion and development Bangladesh has been pursuing periodic Export
Policy from 1980. In the first half of 80s she pursued one- year export policies in the first half of 80s and two-year policies in the last half of the same decades. Since then five-year export policies were formulated and implemented. The Ongoing Export Policy for the period of 2007-2013.
Earnings from RMG sector of Bangladesh:
According to the overall export performance of Bangladesh apparel in thesetargeted ten markets is significant over the last ten years. In Turkey, Bangladesh exported a total worth of US$90.42 million RMG in pre-interventionperiod (i.e.2002-2006) whereas about
US$1830.19 million was earned in later period (i.e.2007-2013). The corresponding blue line in the figure shows the dramatic export growth after 2007with plummeting in 2013 because of imposing protective tariff by Turkey on clothing imports.
Table 3. Bangladesh earning performance to new emerging markets
Countries
EU
Germany
UK
Italy
France
Belgium
Netherlands
Total 6 X EU countries
USA
All Countries
Sources: IBTCI (2012).
Oven
Fiscal Year
July-dec
(in million us$)
2011-
2012
304.08
165.14
48.63
96.40
33.48
2012-
2013
370.05
191.04
79.20
107.70
45.31
51.36
699.09
961.31
72.38
865.88
1181.55
1907.97 2363.07
21.69
15.68
62.86
11.72
35.33
41.32
23.86
22.91
24.11
Types of Item
% of
Export increase/ decrease
Knit
Fiscal Year
July-dec
(in million us$)
2011-
2012
484.57
186.88
90.59
193.42
61.41
2012-
2013
582.48
238.20
128.59
255.05
81.30
88.15 123.81
1105.02 1409.53
307.11 412.00
1789.63 2362.29
SWOT analysis of marketing of RMG products in Bangladesh
To analyze the overall situation of organizational strength, weakness, opportunity and threat are the TRZ Garments Industry elements of SWOT. It is possible of balancing the strength and weakness of internal environment with the opportunity threat of external environment. It is easy to achieve the goals to face any situation through analyzing those elements carefully.
Strengths
% of
Export increase/ decrease
20.21
27.46
42.06
31.86
32.39
40.45
27.56
34.15
32.00
From primary data of sample observation and secondary data, the researchers identified the following resource strength and competitive capabilities.
 Very experienced management officials.
 Usage of modern equipment.
 Sufficient production capacity.
 No outsourcing for printing, embroidery and washing plant.
 Better product quality compared to the medium size competitive rivals.
Weakness
Potential resource weaknesses and competitive deficiencies of the company, as identified by the researcher, are mentioned below.
 Delayed delivery of sample.
 Lack of automated and modern equipment. http://www.bdresearchpublications.com/journal/

Tarafder et al.
 They are not preparing sample designs.
124
 The company has no clear strategic vision to direct the company towards specific targets.
 Behind rivals is using e-commerce for their promotion purpose whereas the company.Even has no website for the convenience of information gathering by the foreign buyers.
Opportunity
 Now some foreign countries are really interested about TRZ Garments Industry.
 Competitors are not that much strong like TRZ Garments Industry.
 As this is a compliance factory and quality management system, so there is huge potential for business growth.
Threats
 Emerging market of China and India.
 Increase competition with local garments.
 Lack of electricity can make problem for the business.
 Day by day the strong rivals are capturing the markets available to the industry in
Bangladesh. Another threat is coming from technological change.
Pricing policy in ready-made garments industry
Pricing is an important component of cash flow and profitability, as well as marketing and even branding. In general, company wants to price products and services high enough that firm doesn’t leave money on the table, but low enough that firm are not losing potential customers. If garments are selling what’s considered a commodity, garments have to figure out how to make firm business model work on minimal prices
Cost-plus pricing
One simple way to set prices is to mark up each piece of clothing by a set percentage.
This is called cost-plus pricing because it starts with the cost of the item and adds what firm need to pay expenses and have a profit left over.
Competitive pricing
Firm can survey the competition and find out what prices prevail. Firm must carefully weigh the prices of items similar to what firm sell, because those items are not identical.
Firm may offer a higher-quality item
Fixed-cost pricing
Total up all of garments fixed costs. These include rent, utilities, insurance and wages. The total of garments fixed costs, plus the cost of garmentsare what firm need to earn in order to break even. On top of that, firm need income to order more stock and money left over for profit.
Volume pricing
Firm can charge less per piece for customers who buy several pieces. This allows firm to make up total income by selling more garments at a lower price. This is the thinking behind sales that offer a second piece for half price if a customer buys one
Specialist pricing
If firm offer specialty lines that garments competition does not, firm can price according to perceived value. Uniqueness has a value attached to it, and customers may pay a higher price for something everyone else does not have.
Loyalty pricing
Firm can alter garments pricing for members of a loyalty program. Offer a discount card that lowers prices for customers who buy frequently from firm. For example, after a customer shops with firm five times, firm can offer a 10- or 20-percent discount.
Constraints faced by the garments of Bangladesh
Some of the constraints faced by the country’s RMG sector are stated below: http://www.bdresearchpublications.com/journal/

Application of Marketing Mix Tools in the RMG Sector 125
1.
In our view, the biggest threat to apparel exports in Bangladesh comes from the financial sector. The foreign investment and short-term borrowing has been rather limited in Bangladesh, the common element is that of a weak banking sector with very little transparency and accountability.
2.
Other potential hazards include an overvaluation of the taka compared to the currency of its competitors. Despite the repeated devaluation in the recent past, according to the World Bank the taka remains overvalued in real terms. This could undermine the long term competitiveness of the industry.
3.
The politicians could seriously damage this sector by creating instability and attempting to achieve their goals by violent means in the streets instead of the parliament.
4.
The law enforcement agencies, by allowing the mastans and toll collectors to create a climate of terror, may hamper commerce and production in the economy. Labor disturbances and frequent disruptions in the Chittagong port remain a source of concern to the apparel exporters.
5.
Bangladesh imports raw materials for garments like cotton, thread colour 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.
6.
Most of the illiterate women workers employed in garments are unskilled and so their products often become lower in quality.
Conclusions and Recommendations
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. Now-a day’s buyers are very much quality conscious.
If it becomes possible to maintain a high quality system of inspection policy, the buyers shall be motivated to place more orders in Bangladesh. So, it is possible to set different modern quality procedures and quality management techniques in Bangladesh for the betterment of its RMG sector.
The Government of Bangladesh should play a key role for the expansion of the market of garment by diversified items for manufacture and export. It is very important fact that there are many items in the RMG product lines which Bangladeshi entrepreneurs have not yet started production. Leather items, life jackets, gloves, bags etc. are among few such items. Among other items are umbrella, nylon school bags and jackets, ice sport kits and wears, staffed toys, high competitive market fashion garments are examples. There are numerous such items not yet touched by our entrepreneurs. All out efforts would be made and steps taken for production and export of high priced readymade garments in the light of the prevailing market demand. Immediate steps shall be taken to establish a fashion institute pending establishment of the fashion institute measures will be taken, under special arrangements, to extend expert services to match the actual demand.
Liberal credit may be considered for capacity building and hiring technology for producer of high quality garments.
Recommendations
 Every garment factory should implement differenttools like 5’S, 6 Sigma etc. for perfect qualitymanagement.
 The firm has to search for new markets indifferent countries other than India. It can arrange seminar, exhibition in their own city especially for buyers.
 More executives should be appointed to look after the specific departments so that specialization can be ensured.
 Proper delegation of authority should be made to relieve the overburdened executive.
 The expertise of the quality control staff should be enhanced through proper trainings and facilities.
 They can import some necessary modern and automated equipment. http://www.bdresearchpublications.com/journal/

Tarafder et al.
 Training facilities should be introduced specially for the new employees.
126
 Only profit maximization should not be the objectives of the organization rather welfare of the employees and workers should be considered.
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