Analysis of Marketing Plan for Majumder Garments Product

Abstract

The Garments industry has been faring really well in the post-MFA era. It has posted over 25 percent increases in exports in the first quarter of 2005 compared to the same quarter last year. All the firms surveyed had huge increases in exports compared to the same period of the previous year. BKMEA is surpassing the government set export target in the current fiscal year, with total exports predicted to exceed US$ 3000 million. The trend analysis carried out shows that by the end of the year 2007-2008, the export value could reach over US$ 4500, with the total number of knitwear firms likely to exceed the 1000 mark.GSP facilities, cheap labour, backward linkage, facilities less lead time and the industrialization of the RMG sector in the past years have been the strengths of Garments sector as indicated by the responses of the experts and owners. GSP facilities have enabled the Garments sector to capture the European market. The GSP revision would allow Bangladesh to benefit even more, as in addition to the present duty free status, will also become free from complying certain minimum local value addition requirement. It has been however, hindered to certain extent due to low productivity, outdated equipment and over-priced yarn, high interest rates and concentration only on a few markets. There cumulative scores for opportunities have exceeded that of the threats, with the average score given by each expert being 2.33 higher than the threats (in a score of 5). This was because the removal of quotas in the post-MFA would allow the segment to explore into more markets, namely the US. Moreover restrictions imposed on China by the EU and the US is likely to shift buyers towards countries like Bangladesh. China itself may outsource to Bangladesh as it produces lower valued items and cannot meet its local demand. India is becoming the biggest threat to our woven sector, as it has huge incentives for the manufacturers and produces its own cotton, therefore lowering the cost of production almost 25 percent with similar valued items. On the other hand, owners of the woven factories in Bangladesh had to buy local yarns at higher price and buyers were stated to switch even for a price edge of 1 percent. To add to that, cash incentives had been stalled and BKMEA has urged for at least 15 percent cash incentives to keep up the competitiveness of the knitwear sector.To keep up the growth of the sector experts in the sector have called for marketing improvements (forward linkage), cash incentives from the government, penetrating the US market (woven is focused in the EU market), and reducing the cost of production by ensuring lower priced yarns and lower interest rate. If the knitwear sector continues to grow in the present manner, it is likely to come up as the major export earner of the country.