Table of Contents

. Introduction ........................................................................................................................................ 4
1.1

Scope ............................................................................................................................................. 4

1.2

Methodology................................................................................................................................. 5

1.2.1

1.2.2

Method of administering the questionnaire: ........................................................................... 5

1.2.3

Tabulation and Data analysis: ................................................................................................... 6

1.3

Objectives of the Report ............................................................................................................... 6

1.4

Limitations..................................................................................................................................... 6

Literature Review: ................................................................................................................................. 6

2.1

Impact of Internet ......................................................................................................................... 7

2.2

Online Shopping ............................................................................................................................ 9

2.3

Purchasing intention: .................................................................................................................. 10

2.4

Factors Influencing Consumer`s Purchasing Intention ............................................................... 10

2.4.1

Security ............................................................................................................................... 10

2.4.2

Time Saving ......................................................................................................................... 11

2.4.3

Website Design/ Features ................................................................................................... 12

2.4.4

Convenience........................................................................................................................ 13

2.4.5

Online Shoppers in terms of Demography.......................................................................... 13

2.5
3

Type of data obtained: .......................................................................................................... 5

Return Policies ............................................................................................................................ 13

Impact of Web in retail sectors of developed countries: ................................................................... 14

3.1

Critical factors for determining Popularity in online retail shopping: ........................................ 16

3.2

Smartphone and tablet devices are adding a new dimension in retailing: ................................ 17

3.3

Shift from store-based retailers to non-store retailers: ............................................................. 18

3.4

Consumers are being more influenced socially .......................................................................... 19

3.5

Addressing target consumers individually .................................................................................. 19

3.6

Global variation in online retail................................................................................................... 20

3.7

What may be the future scenario? ............................................................................................. 22

Overview of Online Shopping services and its prevalence in Bangladesh ......................................... 24

4.1

Bangladesh Economy Overview .................................................................................................. 26

4.2

Market structure of superstores ................................................................................................. 27

1

4.3
5

Service offering of the select physical and online stores.................................................................... 29

5.1

Physical Stores ............................................................................................................................ 29

5.1.1

Aarong ................................................................................................................................. 29

5.1.2

Meena Bazar ....................................................................................................................... 30

5.1.3

Agora ................................................................................................................................... 30

5.1.4

Rang .................................................................................................................................... 30

5.1.5

Shwapno.............................................................................................................................. 31

5.2

Internet and online shopping in Bangladesh .............................................................................. 28

Online Stores ............................................................................................................................... 31

5.2.1

Rokomari.com ..................................................................................................................... 31

5.2.2

Foodpanda .......................................................................................................................... 32

5.2.3

hatbazarbd.com .................................................................................................................. 32

5.2.4

HungryNaki.com.................................................................................................................. 33

5.2.5

Chaldal.com......................................................................................................................... 33

Analysis of business players: Context in Bangladesh .......................................................................... 33

6.1

PEST Analysis ............................................................................................................................... 33

6.1.1

Political ................................................................................................................................ 34

6.1.2

Economical .......................................................................................................................... 34

6.1.3

Social ................................................................................................................................... 34

6.1.4

Technological ..................................................................................................................... 35

6.2

GE MATRIX .................................................................................................................................. 35

6.2.1

GE MATRIX .......................................................................................................................... 35

6.2.2

Desirable feature of GE ....................................................................................................... 36

6.2.3

Criticism of the GE matrix ................................................................................................... 36

6.2.4

ANALYSIS OF GE MATRIX..................................................................................................... 37

6.3

BCG MATRIX ................................................................................................................................ 39

6.3.1

Overview ............................................................................................................................. 39

6.3.2

Question Marks: .................................................................................................................. 39

6.3.3

Stars: ................................................................................................................................... 40

6.3.4

Cash Cows: .......................................................................................................................... 40

6.3.5

Dogs: ................................................................................................................................... 41

6.3.6

Limitations:.......................................................................................................................... 41
2

6.3.7
6.4

ANALYSIS OF BCG MATRIX .................................................................................................. 41

ADL MATRIX ................................................................................................................................ 44

6.4.1

ADL MATRIX OVERVIEW...................................................................................................... 44

6.4.2

The advantages and disadvantages of the ADL matrix ....................................................... 47

6.4.3

Analysis of ADL Matrix ........................................................................................................ 48

6.5

Porters Five Forces Model: ........................................................................................................ 51

6.6

Resources and Capabilities: ........................................................................................................ 52

6.7

The 3Cs Model of Kenichi Ohmae: ............................................................................................. 52

6.8

Business Canvas Model: .............................................................................................................. 55

6.8.1

Brick Organization ............................................................................................................... 55

6.8.2

Click Organization: .............................................................................................................. 56

Service Marketing Mix 7 Ps Analysis: ................................................................................................. 57

7.1

7 ps Analysis for Click Organization: .......................................................................................... 57

7.2

7 ps Analysis for Brick Organization: .......................................................................................... 58

Gap Analysis and Proposed Strategies to overcome Gap: .................................................................. 59

Recommendation:............................................................................................................................... 62

10

Conclusion: ...................................................................................................................................... 65

11

APPENDIX ........................................................................................................................................ 67

11.1

QUESTIONAIRE ............................................................................................................................ 67

11.2

References: ................................................................................................................................. 74

1 . Introduction
Retail trade is one of the traditional businesses of Bangladesh. Its expansion is keeping
pace with population growth and changes in consumption patterns, which are consistent
with the growth of the economy. This expansion has not been structurally organized,
because, until recently, retailing had never been perceived as an industry, but rather as
an individual or family business entity with a very limited scope of organized expansion.
Little to no market information is available on the retail sector, but secondary sources
indicate that the size of the food retail sector in Bangladesh could be US$12-14 billion,
and the number of retail grocery shops could be around 1 million. Retail is one of the
biggest sources of employment (12 percent), and it contributed 13 percent (wholesale
and retail trading) to Bangladeshs GDP.
Retail sector, until recently, consisted of only physical stores such as Department stores,
Supermarkets, Superstore, Convenience stores, Discount stores and off- price stores, but
the advent of internet has changed the situation dramatically. Over the past few years,
quite a number of online shopping portals or e-trading platforms launched operations,
offering products and services from vegetables, clothes, computer accessories to books
and travel tickets. The brick and mortar retail stores also reacted quickly to the changing
situation. Many stores have introduced online ordering and payment system and homedelivery system to keep pace with the changed demand. So, apparently the Web has
caused quite a stir in the retail sector of Bangladesh. In this report we tried to have an
insight into the impact of web in creating service opportunities in the retail sector of
Bangladesh.

1.1 Scope
Our research endeavors to find out how introduction of internet is shaping the retail sector
of Bangladesh. For this purpose we worked on select few physical and online retail stores.
Most of these stores operate in Dhaka only while one or two operate in Chittagong and
Sylhet also. Hence the conditions of the sector in other parts of the country fall outside
the scope of this research. So, naturally our report is not a comprehensive one rather it
gives a rough idea about the sector.
4

1.2 Methodology
. In this report we worked with 5 physical and 5 online retail shops
Physical stores
Aaron
Agora
Meena Bazar
Shwapno
Rang
1.2.1

Online stores
Rokomari
Foodpanda
Hungrynaki
Chaldaal
Bdhaat

Type of data obtained:

Both primary and secondary data has been collected for the research purpose.

Primary data has been collected from the respondents through the survey
questionnaire

Secondary data has been collected from the different e-commerce websites and
articles / journals

1.2.2 Method of administering the questionnaire:

Survey method: The survey has been conducted mainly among job holders, home
makers and students residing in Dhaka, Chittagong and Sylhet metropolitan city. The
questionnaire was developed using Google docs and its link was shared by email and
different groups of face book likely to contain appropriate respondents.
Nature of the questionnaire: The questionnaire has been developed to find out more on
the research topic, probing into the objectives of research. The questionnaire includes
two parts, multiple choice, and Likert scale questions. These questions have been put in
the questionnaire in order to attain a more insightful understanding of the views and
attitudes of the users regarding online shopping. It contains several questions asking the
demographic information about the respondents as well. The questionnaire has been
made with simple, direct, and familiar words keeping the respondents in mind.

1.2.3 Tabulation and Data analysis:

Since the questionnaires were created in Google Docs, all the data analysis were done
by the program itself.

1.3 Objectives of the Report

The specific objectives of this research are as follows:

To analyse the overall situation of retail sector in Bangladesh

To determine the relative position of select few online and physical stores in the
retail industry
To find out influence of internet on retail sector
To point out the problems faced by the physical and online stores while conducting
their business
To suggest possible solutions to the problems

1.4 Limitations
This paper has the following limitations:

The concept of online shopping is still relatively new in Bangladesh and hence
there was a lack of relevant data.

Time and resource constraints did not enable the authors to conduct a rigorous
market research.

The survey sample was obtained online and is not the true representative of the
retail sector of Bangladesh.

Literature Review:

In this review we synthesize the current knowledge based on academic literature. The
impact of web in retail sector created an opportunity for various organization initially to
provide marketing information about their products and services, customer support and
later to conduct business transaction with customers. Retail is the sale of goods and
services from individuals or businesses to the end-users. Qinghe; Wenyuan and Kaiming
(2014) explained that a retailer purchases goods or products in large quantities from
manufacturers directly or through a wholesale, and then sells smaller quantities to the
consumer for a profit. It covers a wide array enterprises in terms of size, business model
and goods.Jhamb and khan (2010) identified the most appropriate retail formats for
various items such as food and grocery-supermarket; Health and beauty care servicesSupermarket; Clothing and Apparels- Mall; Entertainment-Mall; Watches-Hypermarket;
Pharmaceuticals-Hypermarket; Mobile, accessories & Services-Hypermarket; Foot
wares-Departmental store.

2.1

Impact of Internet

1990s, the Internet was viewed as a disruptive transformational technology (Christensen,

Anthony, and Roth 1994) with respect to the retail industry. Futurists envisioned that
consumers would abandon brick and mortar organizations and buy most products or
service over internet. Zwass (1996) predicted that store-based retailers would be replaced
by Internet-savvy entrepreneurs who could harness this new technology to provide
superior offerings to consumers. Internet is facilitating traditional store based retailers to
complement their store offering through web.

Wigand and Benjamin (1995) found that the Internet economic model is more efficient at
the transaction cost level. Elimination of middlemen in the distribution channel (or
disintermediation) also can have a big impact on the market efficiency (Michalski, 1995).
Impact of web in retail market can result in additional sales at very low unit cost. Cassar
et al. (2000) contended that in a long term perspective, online retailers are expected to
achieve a significant cost advantage over their competitors that run their businesses in a
traditional way. In addition to the lower cost, the Web also enables higher level of
customization to the needs of individual clients (Choi and Winston, 2000). In this way
organization is more flexible in to expand different product lines and markets quickly with
7

low investment. It will reduce the communication gap with customer and organization will
be able to provide better customer service. Brynjolfsson and Smith (2000) empirically
examined prices for books and CDs offered by traditional and online retailers and found
that the latter sell products that are on average 9-16 % cheaper. Similarly, Yan and Pei
(2009), using a game theoretical model, pointed out that a firms performance can be
significantly improved after opening an online channel competing with the traditional retail
channel. Conversely, Kotha et al. (2004) asserted that web site usability is not a source
of competitive advantage, as it can be easily observable and imitated.

Customer retention rate will increase with repeated order. Reichheld et al. (2000) stated
that customer retention rate is highly and significantly related to a firms profits The rich
interactive media and database technology of the Web allows for unconstrained
awareness, visibility, and opportunity for an organization to promote its products and
services (Chen, Motiwala and Khan; 2003). However, impact of web also caused some
issues of an ethical nature. Whysall (2000) suggested some of them: customers privacy
and confidentiality, tracing customers email and visited websites, and exclusion of some
segments of customers lacking net access.

Impact of web in retail sector introduced brick and mortar organizations to multi channel
retailing. Levy and Weitz (2009) describe multichannel retailing as the set of activities
involved in selling merchandise or services to consumers through more than one channel.
That means introduction of web as another channel for retail sector besides physical
stores. Impact of web is not confined only as another channel for reaching upto customer.
It is becoming the most important tool for customer service. Harris and Ogbonna (2001)
concluded that the major retailers try to differentiate themselves from competitors on
customer services. Retail sector is facing new challenges and opportunities in the
presence of web. The market for store based retailer is limited to the local trading area of
the store. With the addition of web the retailer is enabled to exploit economies of
expanding market without making any physical store.

Aggarwal (2007) Highlights the emergence of organized retailing in India and views the
Catalytic effects of retail on Indian Economy. Tusharinani (2007) noted the transformation
of traditional and malls taking the lead in attracting consumers in the metro cities. Goyal
and Aggarwal (2009) opine that In India, a consuming class is emerging as a result of
increasing income levels and dual career families with high disposable incomes. Urban
class of Bangladesh is also experiencing the same socio economic growth. With retailers
eyeing their presence in market, internet has brought a new dimension in attracting these
new consumers. This led us to online shopping.

2.2 Online Shopping

Ghayel and Dhingra (2012) affirmed online shopping as the act of purchasing products
or services over the internet having the product or service delivered directly to the
consumer themselves. The consumer can find information about different models of an
item, different colors choice, and different brand choice doing their comparisons before
leaving the house. Birkin, Clarke, & Clarke, (2002) described online shopping as a single,
homogenous activity, the selling of goods and services via the World Wide Web (www).
The low adoption of internet to make purchase in retail stores by Bangladeshi consumers
is a big challenge for the industry growth. The use of the web for shopping is culture
bound and, therefore its adoption from one country to another is influenced by culture.
This view is corroborated by Rogers (1995) who explained that the degree of
compatibility of the information technology and its various uses with the values and norms
of a social system influences its diffusion pattern in that social system. Suki, Ahmad, &
Thyagarajan, (2002) have also indicated that one of the obstacles which limit the
development of online retail locally is related to the culture or the behavior of customers
when it comes to buying goods and services through web. In Bangladesh the Internet is
not compatible with the retailers culture of selling through physical stores and
consumers entrenched behavior of physically visiting the stores, touching, feeling and
comparing products before actual purchase is made. Al-Fadhli, (2011) contended that
inability of consumers to inspect a product prior to purchase hinders online shopping in
Malaysia.

2.3 Purchasing intention:

According to business dictionary purchasing intention defined as a plan to purchase a
particular good and service in the future. According to Fishbein and Ajzen, purchase
intentions are defined as decisions to act (Ajzen, 1975). As studied by Eagly and Chaiken
(1993), purchase intention is defined as psychological states which represent the
individuals perception to engage in a particular behavior. According to Howard and Sheth
(1967), in its simplest form, predicting purchases rests on the stage preceding actual
purchase, and is referred to as intention to purchase. There are some various theories
results with, purchase intention helps predict following purchase. Sarigiannidis and
Kesidou (2009) contend that product involvement positively affects consumers to shop
online and It is concluded that privacy have no effect over consumers intentions towards
online shopping.

2.4
2.4.1

Factors Influencing Consumer`s Purchasing Intention

Security

A further barrier the adoption of the Internet to make transaction in the retail industry is
security concerns by the prospective and actual shoppers. Security is defined as a set of
procedures, techniques, and safeguards designed to protect hardware, software, data,
and other system resources from unauthorized access, use, modification, or theft (Davis,
Bagozzi, & Warshaw, 1989). The impact of web on retail industry is negatively affected
by the online shoppers concern regarding fraud and security. Ratnasingham, (1998)
highlighted that fear of online credit card fraud has been one of the major reasons
customers have not done more extensive online buying. In addition, Lee & Turban [2005]
lamented that consumers cannot physically check the quality of a product or monitor the
safety and security of sending sensitive personal and financial information while shopping
on the Internet. From the foregoing, security challenge is a real one that should be tackled
headlong to encourage more Bangladeshi to adopt online shopping.

As users get accustomed with new technology, they learn the usefulness and risks
associated with the technology. Torkzadeh and Dhillon (2001) defined perceived risks an
assessment of uncertainties or lack of knowledge about the distribution of potential
10

outcomes. Perceived risk is a major challenge for the growth of online shopping in retail
sector. De Ruyter, Wetzels, & Kleijnen (2001) argued that while there are other factors
affecting consumers adoption behavior on the Internet, perceived risk is a barrier to the
repatronage and purchase on the Internet. Similarly, Salisbury, Pearson, Pearson, &
Miller (2005) affirmed that perceived risk may influence the attitude and behavior of
consumers towards the Internet services. Uncertainties about how customers financial
information is treated by retailers will increase perceived risk associated with online
transactions, and reduce their willingness to adopt online shopping.

Yang and Jun (2008) found that reliability was the most important dimension for Internet
purchasers even when compared to access, ease of use, personalization, security, and
credibility. Internet non-purchasers, in contrast, consider security as their most critical
concern. Customers actually evaluate a websites reliability based on whether it provided
them with reliable information and safe transactions. Yen and Lu (2008) identified some
variables such as efficiency, system availability, privacy and fulfillment as the dimensions
of e-service quality. Then they examined the linkages among dimensions of e-service
quality, customer satisfaction and loyalty. Results revealed the dimensions of e-service
quality directly influence customer satisfaction. Subsequently, customer satisfaction
positively affected loyalty. Nevertheless, Cuneyt and Gautam (2004) claimed trust in the
internet shopping with advanced technology, and frequent online shopping to the internet
being secured as a trustworthy shopping channel.

2.4.2

Time Saving

Time saving is one of the most contributing factors for online shopping. Online shopping
can reduce peoples effort and save time. Rohm and Swaminathan (2003) asserted that
online shopping saves time during the purchasing of goods and it can eliminate the
traveling time required to go to the traditional store. Notwithstanding of that, some argue
that the delivery of products or services over online is time consuming. Similarly Corbett,
(2011) pointed out that time saving is not the motivating factor for the consumers to shop
11

online because it takes time receiving goods or delivery. But time saving factor can be
seen through different dimensions i.e. person living in Florida can shop at Harrod's in
London (through the web) in less time than it takes to visit the local Burdines department
store have concluded that time saving factor was reported to be primary reason among
those consumers who have already experienced the online grocery buying (Alba et al.
1997, 2000). So the importance of the time saving factor cannot be neglected as
motivation behind online purchasing. Additionally Goldsmith and Bridges emphasize that
there is a discrimination between online shopper and non online shoppers, online
shoppers are more worried about convenience, time saving and selection whereas non
online shoppers are worried about security, privacy and on time delivery (Bridges,
Goldsmith and Bridges (2000)). A study by Kamariah and Salwani shows higher website
quality can highly influence customers to shop online (Salwani, Online shop, 2005).

2.4.3

Website Design/ Features

Website design and features is one of the most vital influencing factors of online shopping.
Shergill & Chen (2005) point out that Website design, website reliability/fulfillment,
website customer service and website security/privacy are the most attractive features
which influence the perception of the consumer of online buying. Kamariah and Salwani
(2005) claims the higher website quality, the higher consumer intends to shop from
internet. Web design quality has important impacts on consumer choice of electronic
stores, stated by Liang and Lai (2000). Website design one of the important factor
motivating consumers for online shopping. Almost 100,000 online shoppers surveyed by
(Reibstein, 2001) shows that web site design was rated as important factor for online
shopping. Another study conducted by Zhang, Dran, Small, and Barcellos (Barcellos,
1999, 2000), and Zhang and Dran (2000) indicated that website design features of the
website are important and influencing factors that leads consumers satisfaction and
dissatisfaction with a specific website. A study conducted by Yasmin and Nik (2010)
shows a significant relationship between online shopping activity and website features.
Website design features can be considered as a motivational factor that can create
positive or negative feelings with a website. A study by Li and Zhang (2002), if website is
12

designed with quality features it can guide the customers for successful transactions and
attract the customers to revisit the website again. However, worse quality website
features can also hamper online shopping. According to Liang and Lai (2000), web design
quality or website features has direct impact on user to shop online.
2.4.4

Convenience

Convenience factor cites that it is rather easy to browse or search the information through
online than the traditional retail shopping. Consumers can easily search product catalog
through online but if the consumer look generally for the same product or item in a
traditional store manually it is difficult to visit physically and time consuming also.
Convenience has always been a prime factor for consumers to shop online. Darian (1987)
mention that online shoppers carry multiple benefits in terms of convenience, such as
less time consuming, flexibility, very less physical effort etc. Bhatnagar and Ghose (2004)
claims for convenience as one of the most important advantage for online shopping.
Wilsonz, (2007) affirmed that the major motivation for online purchasing is convince in
terms of shop at any time and having bundles of items delivered at door step.

2.4.5

Online Shoppers in terms of Demography

Another aspect of online shopping in retail sector is shoppers in terms of demography.

We would like to study demography in terms of age, gender, income and education to
identify the purchase behavior related to these terms. Studies have shown that online
shoppers mainly consist of people with Higher education and income and working in
middle to senior management or professionals (Qinghe; Wenyuan and Kaiming 2010).
Miller (1996) claims cyberspace is the domain of young people. Sim and Koi (2002) states
as main discriminating factors appeared to be gender and income. Customer
segmentation is important for electronic commerce success. Miller (2010) has focused on
demographics to show the profile of Internet users.

2.5

Return Policies

Product return is an important component of organizations customer relationship

management strategies. Click organizations can differentiate their service by
13

implementing product return policy. Similarly, Petersen and Kumar (2009) point out that
current return behavior has an inverted-U relationship with the likelihood of future
purchases and customer lifetime value. It is also shown that increase in leniency of return
policy enhances trust and convenience and hence leads to a higher likelihood of repeat
purchases. However, it also leads to a higher likelihood of repeat returns (Wood 2001).
Similarly, Anderson, Hansen, and Simester (2009) show that as the option value of
returns is increased, customers are more likely to make repeat purchases. Kushwaha and
Shankar (2007b) assert that ignoring customer return behavior in marketing resource
allocation decisions may lead to suboptimal outcomes.

3
Impact of Web in retail sectors of developed countries:
Online shopping has become an integral part of most consumers day to day behavior.
Forrester Research, Inc. conducted a survey which shows that more than 40% percent
of the population in Western Europe purchase goods online. Moreover, 50% of
consumers of Germany, Switzerland and France are doing so. This trend is set to
continue with the European average set to rise almost 10 percentage points to 49% by
2015. In the UK and the Netherlands this figures are projected to approach 70% by 2015.

14

In the US, 67% of consumers shop online and online sales are projected to achieve a
10% compound annual growth rate, generating $279 billion by 2015.
In developed countries consumers use a number of different channels to make a single
purchase. An example of this kind of transaction is researching a product online and then
buying it in store. Sue and Lisa (2012) found that more than 80% of all respondents
conduct online research before they buy electronics, computers, books, music, and
movies. Eighty-eight percent of US respondents said that they research a product online
via their PC before buying (vs. 80% globally) and 73% of US respondents report that
they research online when buying clothing, footwear, toys, and health and beauty
products (vs. 60% globally). In other words, online research doesnt just lead to online
purchases, its also critical in leading to purchases through other channels and in driving
traffic to physical brick and mortar outlets.
One of the major findings from Sue and Lisa (2012) was the self-described sophistication
of the online shoppers they surveyed. Many of their respondents considered themselves
to be highly capable in terms of researching and purchasing online. In fact, 72% of US
respondents consider themselves to be either confident or experts in this regard (fig X)
slightly besting the 69% of their global respondents that consider themselves to be at this
same level. Why is this so relevant for retailers? As well see, this online savvy comes
with increased demands for faster service, more selection, and more transparent
information in the shipping and tracking of goods. While retailers' online operations are
evolving, consumers are being forced to find ways to make the system work for them.
Regardless, online sales are growing at the expense of traditional retail outlet sales.
According to Forrester Research, Inc., 70% of the overall growth in online sales in 2010
came from existing shoppers simply buying more online.

15

Fig. X: 72% of the US sample consider themselves accomplished online

shoppers.
According to Sue and Lisa (2012) not only do global online shoppers consider themselves
experts, but they are also buying across all product categories. Staggeringly, more than
90% of global online shoppers buy books, music and films, clothing and footwear online.
Even the categories at the bottom end of the online purchase scale, such as jewelry,
watches, sports equipment and outdoor goods, attract over 60% of online shoppers.

3.1 Critical factors for determining Popularity in online retail shopping:

Sue and Lisa (2012) claimed a great deal of global consistency in the top five factors
which determine attractiveness about online shopping, regardless of nationality or
geography. The conventional wisdom is that the issue of price is the driving force for the
growth of online shopping, and indeed, it does feature among the top three reasons cited
by their survey respondents (Fig.Y). Interestingly, however, the top factor given is 24/7
access to shopping, or the convenience factor cited by 28% of the online shoppers we
surveyed. Online shopping is all about freedom and being able to shop wherever and
whenever you want. As for selecting a specific online outlet after embracing the
convenience factor of the online shopping modelthe key factors include reasonable
16

pricing, free and fast delivery, and a wide range of products from which to choose.
Retailers really need to integrate these key consideration factors into their business
models. According to PwC's Experience Radar 2011: Insights for the US Retail Industry,
retailers can gain an additional margin opportunity of 8% to 12% by offering free shipping,
yet 59% of retailers charge for shipping products. Perhaps even more impactful is the fact
that 2 out of 3 US consumers say they are likely to cancel a purchase without free
shipping.

Fig. Y: When it comes to online shopping, the convenience factor rules

3.2 Smartphone and tablet devices are adding a new dimension in retailing:
According to Richard Levis (2013) the movement of online retail activity from desktop PCs
to Smartphones and tablet devices represents a new phase in the evolution of retail. The
pace of change has been dramatic. Since the first fully internet-enabled mobile phones
hit mass market in around 2007, the number of smartphone users in the UK alone has
exploded to over 26 million people and continues to rise, according to data provider,
comScore. Around half of smartphone users are using them for some kind of shopping
activity, which principally means browsing retail sites, researching and comparing prices,
17

but also ordering goods for delivery or collection. In the United States meanwhile, the
proportion of ecommerce being carried out using mobile or tablet devices has grown from
almost zero to around 10 per cent in just a few years (Fig Z).

Fig Z: Percentage of total US ecommerce dollars spent via mobile or tablet device
Source: comScore Mobile Measurements, August 2012

3.3

Shift from store-based retailers to non-store retailers:

On the spectrum of online integration, retailers range from store-based, bricks and
mortar at one end, to online only, pure-play at the other. Between the two extremes lie
retailers who combine physical and virtual retail elements to varying extents, most often
labelled multi-channel. These broad categories have existed for years, but According to
Richard Levis (2013) the balance is increasingly shifting away from traditional bricks and
mortar. Store-based retailers are leading the change by integrating the internet into their
business models as a part of multi-channel strategies. In the UK and US, for example,
online retailing is dominated by store-based legacy retailers that have moved to multichannel, according to retail consultants, Javelin Group (Fig A).

18

Fig. A: Ecommerce sales for the UKs leading multi-channel retailers, 2011-2012
Source: Javelin Group, November 2012

3.4 Consumers are being more influenced socially

According to Debbie Oates (2011) the purchasing decision used to be a relatively private
affair potentially informed by manufacturer or retailer driven information and canvassing
close friends or relatives opinion. Nowadays consumers now actively seek
recommendations/reviews about brands or particular product pre-purchase. Debbie
Oates (2011) suggested that this is particularly relevant for commodity type purchase
groups where 20% of purchases are influenced by reviews. People are also influenced
by what friends within their social networks are saying about particular products they have
purchased, this varies between 5-10% in category purchasers with Books, Music and
Games and Clothing most influenced. Taking this one step further, 5% have actively
sought feedback on a potential product purchase from Twitter or Facebook followers on
their mobile again demonstrating how online behaviors will begin to infiltrate the High
Street.

3.5 Addressing target consumers individually

According to Richard Jenkings (2011) todays consumer is better informed, more
discerning and more focused than was the case in the past. Retailers are taking these
19

changes into account as they try to optimize store and online range selection. Fulfillment
is also a major issue. Some things are being sold or delivered in a different way, but other
goods are not being able to benefit from the same degree of flexibility. Clearly, consumers
having the ability to research the products in which they are interested, even if they dont
go on to buy them in the store, is a very important factor. Experian has analyzed consumer
behavior in this area, looking at how it differs by market sector. Experian Hit wise can
measure who goes where, what they do, whether or not they buy and predict how different
groups of consumers are likely to react to marketing campaigns. The most exciting thing
what technology made available today is the ability it gives marketers to tailor marketing
materials, to ensure that targeted consumers receive material that is as relevant as
possible to their needs, desires and preferences. The traditional practice was to send
most people in the country a brochure in the post. Now retailers can target consumers
who have responded to similar approaches in the past, or those whose profiles reveal the
right sorts of lifestyles and the ability to pay for the goods or services on offer. With more
people using more intelligent mobile devices, marketers now have the ability to create
ever more sophisticated tailored communications, targeting particular groups of people
and the type of communication methods they prefer; and bringing geography into the
structuring and planning of marketing campaigns.

3.6 Global variation in online retail

We see that the extent of online retail penetration varies significantly from country to
country. Richard Levis (2013) claimed that the UK appears to have one of the most
advanced online retail sectors, with sales rising as a proportion of overall retail spending
from 3 per cent in 2007 to over 9 per cent in 2012. Internet sales growth is clearly
outpacing retail sales in general (Fig. B). In the USA, official data show internet sales
approaching 5 per cent of total sales in 2010, up from around 1 per cent just ten years
previously. Unofficial surveys place the figure closer to 9 per cent for non-food retail in
2012. Again, online sales are growing significantly faster than all retail sales (Fig C).
It seems that mainland Europe is lagging behind, with only around 3 per cent of sales
occurring online overall. But there is huge variation across European countries, with a
broad division between the northern core and southern states (see Fig. D). According to
20

Richard Levis (2013) online retailing is growing at an explosive rate. In China, for
example, by 2012 the ecommerce market is expected to have grown from virtually zero
to over 1 trillion Yuan (approx $160 billion USD) in under a decade.1 the extent to which
online and multi-channel retailing penetrates traditional store-based retailing is related to
a range of pre-existing conditions. The countries most exposed are likely to be relatively
affluent and have fast, high-quality digital and transport infrastructure. A global
comparison of e-readiness and logistics performance provides a top-level indicator of
those countries most pre-disposed to online retail penetration (Fig. E).

Fig. B: UK internet sales vs. all retail sale

Source: Thomson Reuters DataStream

21

Fig. C: US quarterly retail sales growth total and ecommerce

Source: US Census Bureau, Q3 2012

3.7

What may be the future scenario?

We have seen that online-only sales are growing rapidly in many countries. It is difficult
to predict how far online-only retail channels will grow, but the UK provides us with a
useful indicator of how it may progress in other countries. According to Richard Levis
(2013) by 2020 around 20-25 per cent of retail sales will occur online (up from around 10
per cent today)? This estimate includes sales as part of multi-channel retailing. Aside from
the physical and economic barriers described above, limits to the growth of online-only
retail channels mainly relate to distribution costs and practicalities. Richard Levis (2013)
suggested a huge potential efficiency gains through, for example, the standardization of
packaging, subscription-based delivery models, night-time delivery options and purposebuilt collection/return facilities, such as lockers. Potentially, these could significantly
increase the penetration of internet-only retailing above current assumptions; with more
serious implications for traditional retail property. Richard Levis (2013) proposed a large
change further ahead by emergence of 3D printing. This technology has the potential to
turn current models of the manufacturing and distribution upside-down by providing the
ability for consumers to find, buy and produce goods at the place they are consumed.

22

This would have significant consequences for retail and distribution property as we know
it today.

Fig. D: EU percentage of individuals making online purchases in the last three months
Source: Eurostat, December 2012

23

Fig. E: E-readiness vs. logistics performance by country, 2012

Source: World Bank, World Economic Forum, Aviva Investors, January 2013

Overview of Online Shopping services and its prevalence in

Bangladesh

Bangladesh Online shopping along with the online shopping is the process through which
consumers directly buy goods or services from a seller in real-time, without an
intermediary service, over the Internet. It is a part of electronic commerce. As technology
is becoming an everyday accessory and rate of Internet penetration is increasing like wild
fire people tendency to on-line shopping is on rise. The total number of Internet
Subscribers has reached 44.081942 million at the end of October, 2014. (Source:
BTRC)The most important reason behind a rise in on-line shopping trend is time scarcity
of modern life style. We are now living in an age of scarce time. Shopping regularly for
daily products is a luxury to this time scarce society. As the trends show in near future the
rate and extend of on-line shopping will be increased in manifold. On-line shopping is
going to be a boom and one of the most growing business sectors of country. Taking
indicators like increasing Internet penetration, life style change, time scarcity into
consideration it can be a safe prediction that online shopping will be a phenomenon in
24

near future. Realizing the demand a number of on-line shopping sites have been started
their journey to make life easier and lazier. An online shop, e-shop, e-store, internet shop,
web shop, web store, online store, or virtual store are used as the physical analogy of
buying products or services instead of bricks-and-mortar retailer or in a shopping centre.
The process is called Business-to-Consumer (B2C) online shopping. In Business-toBusiness (B2B) online shopping, a business buys from another business. The largest
online retailing corporations are eBay and amazon.com both based in the USA. One of
the first known Web purchases took place in 1994. It was a pepperoni pizza with
mushrooms and extra cheese from Pizza Hut, a somewhat appropriate purchase for the
early days of the Internet. When Amazon came on the scene not long after, selling books
online was a curious idea. The timeline below highlights the emergence and evolution of
online shopping year by year:

Time

Emergence & Evolution

Tim Berners-Lee created the first
World Wide Web server and browser.

1990

1991

Internet Commercialized National

Science Foundation releases its grip
on the Internet

1994

One of the first products to be sold on

line was a pepperoni and mushroom
with extra cheese by Pizza Hut.

1995

EBay, Dell and Amazon.com, the

future 3 Giants of online shopping
were Founded

an explosion is created with

google.com, social networking sites
nowadays nothing is off-limits for
selling online
Table 1: Emergence of Online Shopping

1999 onwards

25

4.1 Bangladesh Economy Overview

The economy of Bangladesh is a rapidly developing market-based economy. Its per
Capita income in 2013 was estimated to be US$2810(adjusted by purchasing power
parity; Source: World Bank). According to the International Monetary Fund, Bangladesh
ranked as the 63rd largest economy in the world. The economy has grown 5-6% per year
since 1996 despite political instability, poor infrastructure, corruption, insufficient power
supplies, and slow implementation of economic reforms. Bangladesh remains a poor,
overpopulated, and inefficiently-governed nation. Service sectors growth rate had been
increased from the birth of our country and it reached maximum around 60% in 2000.
Now it is 52%. Though it has declined but again we are very much optimistic about the
intensification. It is a good sign for our country because in developed countries service
sector contributes more share in total GDP than other sectors. Bangladeshs growth was
resilient during the 2008-09 global financial crisis and recession.

Sector Wise GDP Change over the Decade

70
60
Service, 52

50
40
30
20
10
0
1941-1950

1951-1960

1961-1970

26

1971-1980

1981-1990

1991-2000

2001-2011

Retail trade is one of the traditional businesses of Bangladesh. Its expansion is keeping
pace with population growth and changes in consumption patterns, which are consistent
with the growth of the economy. Of the retail trade, the newest type is the superstores
which have only began appearing around the year 2000. Since then, their expansion has
been rapid. This expansion has not been structurally organized, because, until recently,
retailing had never been perceived as an industry, but rather as an individual or family
business entity with a very limited scope of organized expansion. Little to no market
information is available on the retail sector, but secondary sources indicate that the size
of the food retail sector in Bangladesh could be US$12-14 billion, and the number of retail
grocery shops could be around 1 million. Retail is one of the biggest sources of
employment (12 percent), and it contributed 13 percent (wholesale and retail trading) to
Bangladeshs GDP in 2001/02.The annual turnover of the superstores now stands at
around Tk 15.0 billion (1500 crore), according to Bangladesh Supermarket Owners
Association (BSOA). (Source: Internet)

4.2 Market structure of superstores

In Bangladesh, organized retail outlets are relatively few and remain concentrated in the
major cities. The off-take by consumers is limited (less than 5 percent of total food
consumption comes from these outlets).They usually procure their products from
importers or distributors for imported items, and from distributors or suppliers for the local
products. Organized sector retailers normally maintain established supply lines (drawing
27

from establishments with storage capacity) for imported products, and access both
established and casual supply lines (once-in-a-while suppliers with no storage) for local
products. Depending on the size of the outlets, they engage 200 to 400 distributors or
sub-distributors (dealers) for consistent availability of their commodities. Most importers
source their goods in mixed containers from the country of origins or from consolidators
in Dubai or Singapore, except those that arrive in high volumes, like fresh fruits.

Figure 1 The Market Structure of the retailing industry of Bangladesh. (Source:

USDA Foreign Agricultural Service, 2013)
Included in the category of supermarkets, around 30 medium-sized super stores, and
200-250 other convenience stores are located in the posh areas of Dhaka and other big
cities. The share of imported food products currently handled by these outlets is very
small, and items include fruit juice (both powdered or liquid); canned fruits, vegetables,
and fish/meat; jam/jelly; sauce/ketchup; edible oil; dry milk powder; salad dressings;
spaghetti/vermicelli; olive oil; coffee; fresh fruits; and chocolates, biscuits, and cookies.
The biggest constraint facing this sector is the extreme scarcity of space in the appropriate
areas: land is almost unavailable and is very costly.

4.3

Internet and online shopping in Bangladesh

In 1996, the first VSAT base data circuit was introduced through 2 Internet Service
Providers (ISPs) connecting Bangladesh to the world wide web for the first time. By
2005 there were about 180 registered ISPs operating in Bangladesh. The First ecommerce site clickbd.com started operations in 2006 which was the same year that
28

Bangladesh got connected with the latest technology of a submarine optic fiber cable. In
2007, Cellbazar, an MIT Lab project inaugurated operations bringing the bazaar to the
hands of 20 million GrameenPhone Subscribers. In 2008, Broadband and Wimax internet
services were first introduced in Bangladesh which improved speed, penetration and user
experience
An influx of e-business sites opened up

Rokomari.com
Foodpanda.com
Hungry naki.com
Chaldal.com
bdhaat.com
Hutbazar.com
Aarong.com
meena bazar.com
shwapno
Rang
BdGiftz.Com
Giftinbangladesh.com
Deshigreetings.com
Hutbazar.com
Egiftbd.com
Arfigift.com
Giftzhaat.com
Bangladeshgiftcorner.com
Ekhoni.com

5 Service offering of the select physical and online stores

5.1

5.1.1

Physical Stores

Aarong

The word Aarong means village fair and the Aarong brand is meant to invoke a deeper
connection to its rural roots. Born out of a humble resolve to empower the marginalized
rural women and enable them to realize their full potential, Aarong is one of the 18 social
29

enterprises of BRAC - the worlds largest development organization. It has been working
towards BRACs mission of poverty alleviation through economic development and
human capacity building, with a specific focus on the empowerment of women. Aarong
was initiated in 1978 as a project to ensure poor silk farmers, block printers and
embroiders in Manikganj in central Bangladesh were paid upon delivery of their products.
The purpose was to provide a platform for rural artisans where they could sell their
products and get a fair market price. Starting its journey with providing employment for a
limited number of rural women, Aarong rapidly extended its support by working with many
other artisan and crafts.
5.1.2

Meena Bazar

Meena Bazar is a well reputed retail supermarket chain in Bangladesh with International
standards. It started its operation in 2002 and runs outlets in Dhaka, Chittagong and
Khulna division. Every Meena Bazar outlet carries almost 6,000-8,000 products to sell. It
provides convenient shopping experience, friendly customer service along with easy
parking provisions for its customers. Meena Bazar is a subsidiary of Gemcon Group. It
also produces organic products, dairy items, prepared food & herbal products.
Meena Bazar is the first retail superstore in Bangladesh that has a website to shop online.
They launched their website in April, 2012, and now they deliver in Dhaka, Khulna and
Chittagong. They took this initiative to make customer life easier. Online shopping with
Meena Bazar saves time and it is also very convenient for our customer as we face more
more traffic these days.
5.1.3

Agora

With outlets in major locations throughout Dhaka, and many more being planned in Dhaka
and other major cities, Agora is endeavouring to fulfil the everyday needs of its customers
by providing the right quality, assortment and price through stores of various forms and
sizes.While Agora mainly focuses on food items - ranging from a wide variety of fish,
meat, vegetables, fruits, bakery, dairy, and grocery - it also carries a vast array of other
grocery, personal care, and various other consumer goods and household utensils.
5.1.4

Rang

Since 1994, Rang has been contributing to the growth of handloom and handicraft
industry. With the motto of painting time Rang has introduced a new dimension of novelty
30

in the trend of clothing. Rangs concept of fashion has evolved round the quest for and
celebration of national heritage. The predominant ingredient of our products being
indigenous colours and fabrics, the ideology of Rang is to spread an aesthetic experience
among our people. Going beyond the typical point of commerce and being urged by the
values of our heritage and a clear sense of commitment Rang arranges special
programmes to observe festivals and rituals. Ahead of all such occasions our customers
now wait with keen interest to see our response to every socio-religious festivals. At the
centre of Rangs concept of fashion is the spirit of variety and variation in our application
of colours. The same urge has been essentially reflected in most of our products. Through
the simultaneous motivation of flourishing our handloom and handicraft industry and
introducing ever new products Rang has come to be esteemed as one of the leading
fashion entrepreneurs of the country.
5.1.5

Shwapno

Best Price with Quality and Value- this was the premise with which ACI launched its mega
retail operations Shwapno. On 0ctober 2008, Shwapno embarked on its journey with a
network of 40 outlets across Dhaka, Chittagong and Sylhet and till date it holds the
position of the largest neighborhood supermarket chain in the Bangladesh. Shwapno
outlets across Bangladesh are strategically located to ensure a wide range of customers
have easy access to them. Shwapnos diverse range of products, both local and
international, means it has the capacity to cater to the needs of clients from all walks of
life. Meticulous product and service placement is done to guarantee the outlets meet the
needs of the locality and these demands are met effectively.

5.2 Online Stores

5.2.1

Rokomari.com

Rokomar.com is a Bangladeshi Online Shopping Portal. Rokomari.com launched in

January 19, 2012 as an online bookstore and it will soon start selling eBook, Mobile
Phones, computers and accessories, cameras, consumer electronics, CDs/DVDs,
paintings, tickets, handicrafts, home appliances, apparels, gift items, food, toys and
directly imported goods. Rokomari.com is an ecommerce venture of Onnorokom Web
Services

Ltd,

sister

concern

31

of

Onnorokom

Group.

They have introduced some path-breaking services like Cash on Delivery all around
Bangladesh, Order by Phone, Minimal shipping charge (Only 50 Taka shipping cost on
any amount of purchases), Discount. They want to deliver WOW through our Customer
Service. Their team makes your online shopping easy & fun with a user-friendly shopping
interface. They maintain highly customer-centric practices, including great products and
multiple payment options to make shopping with Rokomari.com as an easy, smarter and
hassle

free

experience.

Rokomari.com is on a mission to drive Bangladeshs most comprehensive virtual

business that helps customers make informed choices and extract the best value for their
money.
5.2.2

Foodpanda

They are a small team of problem solvers, designers, thinkers and tinkers, working around
the clock to make Foodpanda the most powerful online tool for ordering food in the
universe. They believe that ordering food should be easy, fast and definitely fun! They
wanted

something

simpler,

so

they

made

it.

Foodpanda has online menus from the staggering selection of delivery restaurants
around us. Anybody can avail good food simply entering his/her area and search for
cuisine type, restaurants or even price range. The restaurant index also includes address
and delivery hours. No online food delivery is too difficult for Foodpanda! Ordering food
filtered to your needs has never been made easier. Foodpanda Bangladesh is part of
Rocket Internet group.
5.2.3

hatbazarbd.com

hatbazarbd.com is an online marketplace featuring discount deals with popular

businesses like Internet services, Luxurious restaurants, Hotels, Transports, Beauty
parlors, Fashion houses, Theme parks, Gymnasiums, Furniture shops, Sports &
Recreation centers, etc. They provide consumers with quality and demand able products
in cheap, and the businesses with a ton of customers. Businesses need customers &
profit also, Customers need products but at low cost, and hatbazarbd.com solves this
riddle. Their mission is to increase sales of our merchants and create wonderful buying
experience for their consumers. They create happiness for both their merchants and
consumers.
32

5.2.4

HungryNaki.com

They are a team of dedicated, food enthusiasts who welcomes us to order food online
and have it delivered to our doorsteps. They truly aim to serve other food enthusiast long
term and in international standards. Customers no longer have to wait in queues for
takeaways or sit in traffic jam while the food gets cold or even carry hot packed food. They
will do all that for us. Their goal is to facilitate customers to get food without having to
spend a sweat. They help customers find the right restaurant, caf, and any other eatery
in customers neighborhood, to order food online. They have peoples favorite nearby
restaurants listed down to order food online.

5.2.5

Chaldal.com

Chaldal.com is an online shop based in Dhaka, Bangladesh. It is a service rooted on the

idea that shopping for necessities should not be a burden. At Chaldal, we believe time is
valuable to our fellow Dhaka residents, and that they should not have to waste hours in
traffic, brave bad weather and wait in line just to buy basic necessities like eggs. This is
why Chaldal delivers everything customer needs right at his/her door-step and at no
additional cost. Chaldal is a work in progress, and they hope to get better over time. They
are firm believers in using technology to improve Bangladesh, and they will continue to
invest all our effort in pushing the boundaries of technology in this country.

6 Analysis of business players: Context in Bangladesh

6.1

PEST Analysis

PEST analysis gives a larger picture of the macro-environment of the industry. The
analysis is done so that the industry can prepare itself for the future changes withchanging
factors in the business environment. The PEST model will help by categorizing the macroenvironment in to political, economic, social and technological.We did PEST analysis of
the retail sector of Bangladesh and tried to figure out which factor has the highest effect
on the industry environment.

33

6.1.1

Political

Government stability:In Bangladesh the government and political situation is very

unstable which has some direct effects to some extent in the industry.
Political Disruptions: This service is affected negatively during political unrest like Hartal,
Strike, and Blockades etc.
Taxation policy: For both B2B and B2C the value added tax (VAT) is 15%. VAT is
applicable for all items (except some of the unprocessed agricultural products) &thirty five
listed services. VAT is leviable at the time of supply of goods and services. Turnover tax
@ 2 per cent is leviable where turnover amount is less than 1.5 million taka. Tax returns
are to be submitted on monthly or quarterly basis.
6.1.2

Economical

Inflation: Inflation rate is 6.60% in November 2014. The reason for the rise was mainly for
the rise of the food prices. The consumer price index is 206.81. (Source: BBS-2014).

GDP total: $129.86 billion, GDP per capita: $625.34, Total exports: 208.10 BDT billion,
Total imports: 281.24 BDT billion, Total FDI: $1300 million, and Forex reserves: 1698.90
BDT billion. (Source: BBS-2014). This high rate of inflation poses problems for an online
store because this means that prices will tend to fluctuate and may cause loss of sales or
disgruntled customers.
6.1.3

Social

Projected Population

Total

July 2015

July 2019

158.96

167.39

81.63

85.86

77.33

81.51

Male
Female

34

Gender Ratio

106

105.34

As we have a constant growth on population and our country has growing economy there
is a huge potential of online superstore. There are some activities going on social
networking sites which are providing online product to some extent. We have a total of
44.081942 million people who have internet access. They are potential buyer of online
superstore which indicates a huge market of this business. Bangladeshi people are
getting busier day by day. The time to go to shop for shopping is getting difficult for people
like corporate executives. In the metropolitan cities, which are considered in this business
model, the corporate executives and other job holder people are more inclined to shop
online rather than going there physically, which provides the potential of a huge market.
6.1.4

Technological

Internet: Bangladesh is one of the emerging countries in Internet usage in the world. The
number of IP addresses is proportionate to the number of people. The usage of the
Internet has spread through the country and the number of Internet attacks and viruses,
is quite low. Access to smart phone and internet has brought a revolutionary change in
the service sector. Introduction of 3G and availability of cheaper data package has also
expedited the growth.

6.2

GE MATRIX

6.2.1

GE MATRIX

In

the early 1970s, the management consultant McKinsey & Co in conjunction with

General Electric in the USA developed a comprehensive portfolio planning tool (Hax &
Majluf, 1990b; Aaker, 1995; Jobber, 2007). The General Electric (GE) model was
inspired by the need to develop a method of evaluating the plans of GE different
business units in order to fund the plans with the greatest potential for success and also
by the need to overcome the limitations of the BCG model (Byers et al, 1996). Like the

35

BCG matrix, it is plotted on a two-dimensional grid. But unlike the BCG, which classifies
a business unit on only two criteria (relative market share and market growth rate); the
GE model employs composite measures in classification of business units.
SBUs are plotted against two dimensions: Market attractiveness on the vertical axis and
business strength on the horizontal axis.
6.2.2

Desirable feature of GE

It allows for immediate ranking between high and low, and between strong and
weak

It incorporates explicit consideration of a much wider variety of strategically

relevant variables

It stresses the optimal allocation of corporate resources with a view to achieving

competitive advantage and superior performance.

6.2.3

Criticism of the GE matrix

The GE matrix looks at the current position of SBU but does not take into account
how their future positions might change due to changes in the industry. It does
not also consider how their positions might change due to change in their lifecycle
(Hill & Jones, 1989).

The selection and weighting of factors and the subsequent development of both
firms position and market attractiveness are subjective process. Individual bias
and historical perspective cannot be ruled out in the process (Aaker, 1995).

Many factors are involved in determining both indicators on which the matrix is
based. Aggregation of the indicators is difficult.

There is no standard list of critical external and critical success factor to be used
by all business units. This creates inconsistencies and ambiguity in the
classification of business unit.

The result of the analysis is sensitive to the definition of the business market.

Like the BCG matrix it ignores the interdependence of the SBUs in a companys
portfolio.
36

6.2.4

ANALYSIS OF GE MATRIX

In order to calculate the marketing attractiveness we have considered six factors as

follows overall market size, market growth rate, industry profitability, industry rivalry,
promotion, technological innovation.
Factors

Weight

Rating 1-5

Value

Overall market size

0.2

0.6

Market Growth Rate

0.25

3.5

0.875

Industry Profitability

0.1

2.5

0.25

Industry Rivalry
Promotion

0.2
0.15

3
3.5

0.6
0.525

Technological Innovation

0.1

0.2

Total

1.00

3.05

Table: Market Attractiveness

These factors are assigned with weight based on the significance of the factor on market
attractiveness. From this analysis we have calculated the market attractiveness and the
value is 3.05.
For calculating the business strength we have considered factors like market share,
service quality, privacy, brand equity, front stuff personal, information technology,
service charge return policy.
Factors
Market Share
Service Quality
Privacy
Brand Equity

Weight
0.15
0.15
0.15
0.125

Rating 1-5
4
4
2.5
3.5

Value
0.6
0.6
0.375
0.4375

Front Stuff Personnel

0.05

0.15

37

Information Technology

0.125

3.5

0.4375

Service Charge
Return Policy

0.1
0.15
1

4.5
2

0.45
0.3
3.35

Factors
Market Share
Service Quality
Privacy
Brand Equity

Weight
0.15
0.15
0.15
0.125

Rating 1-5
4
2.5
2.5
3

Value
0.600
0.375
0.375
0.375

Front Stuff Personnel

0.05

3.5

0.175

Information Technology

0.125

3.5

0.438

Service Charge
Return Policy

0.1
0.15
1

3
2

0.300
0.300
2.938

Table: Business Strength (Food Panda)

These factors are assigned with weight based on the significance of the factor on
business strength. In this analysis we have considered two business organizations
Rokomari and Foot Panda. Both of the organization are providing retail service through
online. The business strenght for Rokomari is 3.35 and for FOOD Panda 2.98.

BUSINESS STRENGTH
Strong
5.00

PROTECT POSITION

Medium
INVEST TO BUILD

Weak
BUILD SELECTIVELY

MARKET ATTRACTIVENESS

Strong
3.67

2.33

BUILD SELECTIVELY

SELECTIVITY/MANAGE
FOR EARNINGS

Rokomari (3.35, 3.05)

Food Panda (2.938, 3.05)
38

LIMITED EXPANSION
OR HARVEST

Medium

PROTECT AND REFOCUS

MANAGE FOR EARNINGS

DIVEST

Weak
1.00
5.00

2.33

3.67

1.00

Both of the organizations are in medium position in terms of market attractiveness and
business strength. The strategic concern for this particula position is as follows:

Protect existing programs

Concentrate investment in segments where profitability is good and risks

relatively low

6.3
6.3.1

BCG MATRIX
Overview

The BCG matrix, invented by the Boston Consulting Group, is a tool that allows to classify
and evaluate business organizations in a particular industry. It is a decision making tool
in order to balance the activities of a company among those which make profits, those
who ensure growth, those which constitute the future of the firm or those who are its
heritage. With this tool one is able to define the development policy of the company. The
matrix will position the organizations in two ways:

The Market Growth Rate

Relative Market Share

The BCG growth/share matrix is divided into four cells or quadrants, each of which
represent a particular type of business.

6.3.2

Question Marks:

These are products or businesses, that compete in high growth markets but where the
market share is relatively low. A new product launched into a high growth market and with
an existing market leader would normally be considered as a question mark. Because of
the high growth environment, they can be a cash sink.
Strategic options for question marks include..
39

Market penetration

Market development

Product development

Which are all intensive strategies or divestment.

6.3.3

Stars:

Successful question marks become stars. i.e. market leaders in high growth industries.
However, investment is normally still required to maintain growth and to defend the
leadership position. Stars are frequently only marginally profitable but as they reach a
more mature status in their life cycle and growth slows, returns become more attractive.
The stars provide the basis for long term growth and profitability.
Strategic options for stars include..

Integration forward, backward and horizontal

Market penetration

Market development

Product development

Joint ventures

6.3.4

Cash Cows:

These are characterized by high relative market share in low growth industries. As the
market matures the need for investment reduces. Cash Cows are the most profitable
products in the portfolio. The situation is frequently boosted by economies of scale that
may be present with market leaders. Cash Cows may be used to fund the businesses in
the other three quadrants.
It is desirable to maintain the strong position as long as possible and strategic options
include:

Product development

Concentric diversification

If the position weakens as a result of loss of market share or market contraction then
options would include.

Retrenchment (or even divestment)

40

6.3.5

Dogs:

These describe businesses that have low market shares in slow growth markets. They
may well have been Cash Cows. Often they enjoy misguided loyalty from management
although some Dogs can be revitalized. Profitability is, at best, marginal.
Strategic options would include.

Retrenchment (if it is believed that it could be revitalized)

Liquidation

Divestment (if you can find someone to buy!)

Successful products may well move from question mark though star to Cash Cow and
finally to Dog. Less successful products that never gain market position will move straight
from question mark to Dog.

6.3.6

Limitations:

Definition (qualitative and quantitative) of the market is sometimes difficult.

It assumes that market share and profitability are directly related.

The use of high and low to form four categories is too simplistic.

Growth rate is only one aspect of industry attractiveness and high growth markets
are not always the most profitable.

It considers the product or business in relation to the largest player only. It ignores
the impact of small competitors whose market share is rising fast.

Market share is only one aspect of overall competitive position.

It ignores interdependence and synergy

6.3.7

ANALYSIS OF BCG MATRIX

41

In the BCG matrix we analyzed four organizations in two business segment. We

considered Food Panda and Hungry Naki in the sector of online service of food. In other
segment we considered Rokomari and BD haat.

Organization

Market

Market Share of

Relative

Market

Share

Largest Competitors

Market Share

Growth

Hungry Naki

7%

19%

0.37

10%

Food Panda

19%

19%

1.00

17%

Rokomari

43%

43%

1.00

40%

BD Haat

8%

43%

0.19

15%

42

The market growth rate is shown on the vertical (y) axis and is expressed as a %. The
range is set somewhat arbitrarily. The overhead shows a range of 0 to 40% with division
between low and high growth at 20%. Market Growth Rate indicated individual growth
rate of each organization. Rokomari has the highest market growth rate among all the
organization.
The horizontal (x) axis shows relative market share. The share is calculated by reference
to the largest competitor in the market. Again the range and division between high and
low shares is arbitrary. The original work used a scale of 0.1, i.e. market
Leadership occurs when the relative market share equals 1.0. In the online service for
food sector we considered Food Panda as the largest competitor and in the later segment
we considered Rokomari.
From the Analysis we deducted that Rokomari is in the star position in the BCG matrix.
With a high market growth rate and high market share Rokomari is the market leader.
Nevertheless investment is still required to defend the leadership position. Rokomari will
provide long term growth and profitability. Rokomaris strategic option would be market
43

integration forward, backward and horizontally. Market penetration will be another

strategically important decision for Rokomari. Apart from that Rokomari can introduce
new product or service with collaboration or joint venture.
The analysis shows that Food Panda is cash cow in this industry. Food Panda is doing
business with a relatively low market share in a high growth market. The necessity of
investment reduces as the market gets mature. Food Panda is the most profitable
business in the sector. It is desirable that Food Panda will maintain its position. Food
pandas strategic option would be product/ service development and diversification. To
diversify Food Pandas service it can add more restaurants into its list covering more
geographical areas.
In the BCG matrix Hungry Naki and BD Haat are in the position of dog with a relatively
low market share in low growth market. Profitability is at best marginal in this scenario.
Sometimes dogs can be revitalized. So the strategic concern would be retrenchment. If
not then divestment means if there is someone to buy.

6.4
6.4.1

ADL MATRIX
ADL MATRIX OVERVIEW

The ADL matrix from Arthur D. Little is a portfolio management method that is based on
product life cycle thinking. It uses the dimensions of environmental assessment and
business strength assessment. The environment assessment is an identification of the
industry's life cycle and the business strength assessment is a categorization of the
corporation's SBU's into one of five competitive positions, these five competitive positions
by four life cycle stages.
To assess the competitive position held by a company that operates in a given market,
Florescu, Constantin &
Malcomete (cited in Tudor & Valeriu, 2011) gave the following list:
Supply factor: long-term contracts, labor costs and payment terms;

44

 Production factors: production flexibility and capacity, experience, technical skills,

environmental protection, quality of management, skill of expertise, labor productivity and
production cost;
Commercialization factors: the power and quality of distribution network, credit
conditions, the image of the product, product range, market share, sales force and price;
Financial factors: profitability, financial stability, cash flow and technological protection
Tudor & Valeriu (2011) pointed out that these performance indicators represented by
market competitive position are valued by reference to competition, using qualitative and
quantitative variables, which make up a set of determinant factors of success (p.755).
On the industry life-stage, each specific stage within the product life-cycle is
identified, assessed, quantified and characterized by a system of indicators, added, Tudor
& Valeriu (2011). Popa (cited in Tudor & Valeriu, 2011) explained that the competitive
position are weighted and scored and this results in several competitive positions
according to company forces in relation to competitors on a given market. What Popa is
saying, explained Tudor & Valeriu (2011) is that these factors change over time, the
business gain or loss ground
in terms of competitive advantage, and eventually they will identify with one of five
competitive positions. Wilson and Gilligan (1992) gave these categories of competitive
positions as:

1. Dominant: This is a comparatively rare position and in many cases is attributable either
to a monopoly or a strong and protected technological leadership. The implications are
that the firm is able to exert considerable influence over the behavior of others in the
industry and has a wide variety of competitive position.
2. Strong: By virtue of this position, the firm has a considerable degree of freedom over
its choice of strategy and is often been able to act without its market position been unduly
threatened by competitors.
3. Favorable: This position, which generally comes about when the industry sis
fragmented and no one competitor stands out clearly, results in the market leaders having
a reasonable degree of freedom. Companies with a favorable market position often have
that can be exploited by particular strategies and hence a greater than
45

average opportunity to increase market share

4. Tenable: Although a firm within this category are able to perform satisfactory and can
justify staying in the industry, they are generally vulnerable in the face of increased
competition from stronger and more proactive companies in the market. The opportunities
for an organization to strengthen its position tend to lower than average. The profitability
of tenable firm is best achieved and sustained through a degree of specialization.
5. Weak: The performance of firms in this category is generally unsatisfactory although
opportunities for improvement do exist. . Often, however, the firm is either too big and
inefficient to compete with any real degree of effectiveness, or it is too small to cope with
competitive pressure. Unless he firm changes, it is ultimately likely to be forced out of the
market or exit of its own accord.

The Life Cycle Stages

Embryonic: introduction stage, everything is new.
Growth:sales increase, many customers start to know the product.
Mature: market is stable, have many customers and a lot of competition.
Aging: Demand decreases, the companies need to use strategy to add something new to
attract the customers or abandoning the market.

46

6.4.2

The advantages and disadvantages of the ADL matrix

Unlike other models of product portfolio analysis the ADL matrix is based on an enhanced
applicability because it fits to all situations of competition encountered in a marketplace.
Also the ADL matrix can be applied to the fragmented industries, holding a small
competitive advantage but with a large number of ways of obtaining it (provides multiple
ways of differentiation). As such we can say that the ADL matrix has a high degree of
adaptability to situations of a qualitative nature.
A first disadvantage is that the matrix does not take into account a number of phenomena
that can generate long-term involution in the products life cycle of a company. Another
weakness is related to the high level of difficulty in terms of objective evaluation of the
ADL model variables. This is often the case for the competitive position indicator. In other
words, the difficulty lies in the fact that some factors are qualitative in nature and there is
a high risk of bias in their use.

47

In conclusion, we can say that the ADL matrix provides clearer results as a company is
more diversified and enable synchronization on decisions relating to competition.
6.4.3

Analysis of ADL Matrix

Plotting the ADL matrix against the two principal dimensions, the position of the SBU is
represented by the circle sizes proportionate to the size of the industry where they belong,

INDUSTRY LIFE CYCLE STAGE

Competitive Embryonic Growth

Mature

Aging

Position

COMPETITIVE POSITION

Dominant
Strong

AARONG
SHWAPNO

Favorable

RANG

AGORA

Tenable

MEENA BAZAR

Weak
TABLE: ADL MATRIX FOR PHYSICAL RETAIL STORE

The analysis consists of two segments, one for online retail service providers and another
for physical retail stores. In Physical retail store we considered AArong, Swapno,

COMPETITIVE POSITION

Meenabazar, Agora and Rang. All the physical retailers are in their mature stage in their
industry life cycle. The analysis found out that AARONG is in strong position in terms
of competitive position. In this particular position aarong strategic concern would be to

Cost optimization,
48

INDUSTRY LIFE CYCLE STAGE

Competitive

Embryonic

Growth

Mature

Aging

Position

COMPETITIVE POSITION

Dominant

ROKOMARI

Strong

Favorable

FOOD PANDA

Tenable

Weak

Diversification

Hold Position.

BDHAAT
CHAL DAL
HUNGRY
NAKI

Aarong has to cut cost; it should bring diversification in its product and service. This
diversification can be attained with the use of internet. With the increased use of web
AARONG can diversified its service more efficiently. The growth of the AARONG will be
simultaneous along with the industry.

SWAPNO and Rang both are in favorable position in terms of competitive position.
Strategic options for both of them will be as follows

Focus

Differentiation

Attack small competitors

Find Niche and protect it.

Agora and Meena Bazar are in tenable position in terms of competitive positioning. The
strategic concern for them would be as follows:
49

Maintain or Retreat

Find a niche

Agora and Meena Bazar both are targeting niche markets. They are operating in the
higher middle class or higher class areas of the Dhaka city and their target customer is
mainly from the upper class of the society.
All the online retailers are in the growth stage in the industry life cycle. Rokomari is in
dominant position in terms of competitive positioning. The strategic concern for the
Rokomari is as follows:

Defend position.

Act offensive.

Cost leadership.

Rokomari will face rapid development as the industry is still at growth stage and itself
holding a strong position in the market. Rokomari is already at cost leadership by offering
50 taka per delivery across the whole country.
Food Panda and BD Haat are in favorable position in terms of competitive positioning.
The strategic concern for both of them would be

Differentiation

Attack small competitors

Cut Cost.

Chal Dal is in a tenable positon in terms of competitive positioning. The strategic option
for Chaldal is as follows:

Maintain or Retreat

Identify a niche

Aim Growth

BD Haat is in a weak position in terms of competitive positioning. The strategic option for
Chalk Dal is as follows:
50

Find a niche

Retreat.

Competitive
Force

Impact of Internet

Threat
of
entrants

new Internet reduces barriers to entry such as the need for a sales force,
access to channels, and physical assets; it provides a technology for
driving business processes that makes the other things easier to do.
Rivalry
among Widens the geographic market, increasing the number of competitors,
existing
and reducing differences among competitors; makes it more difficult to
competitors
sustain operational advantages; puts pressure to compete on price.
Bargaining
of buyers

power Availability of global price and product information shifts bargaining

power to customers.

Bargaining power Procurement over the internet tends to raise bargaining power
of suppliers
suppliers; suppliers can also benefit from reduced barriers to entry and
from the elimination of the distributors and other intermediaries
standing between them their users.
Threat of substitute Enables new substitutes to emerge with new approaches to meeting
products
or needs and performing functions.
services

6.5

Porters Five Forces Model:

51

6.6

Resources and Capabilities:

No

Exploited by
Organization
-

Competitive
Implications
Temporary
Competitive
Advantage

Economic
Performance
Above Normal

No

Temporary
Competitive
Advantage

Above Normal

Organization

Valuable?

Rare?

Inimitability

AARONG

Yes

Yes

ROKOMARI

Yes

Yes

Valuable resource of Aarong is the introduction of online shopping. Other apparel

distributers provide online services but they neither have the variety nor the coverage that
aarong has. Aarong enjoys a huge supplier base especially for handicraft products which
at present none of its competitors have. So this is a rarity for Aarong.
Valuable resource for Rokomari is the service delivery charge (50 BDT) for whole
Bangladesh. The huge and diversified collection of books made rokomari unique in their
line of business.

6.7 The 3Cs Model of Kenichi Ohmae:

Foodpanda

52

3C's model of Kenichi Ohmae

Corporate-based strategies
Selectivity and sequencing: android and iOS on tablets and mobile devices
Make or Buy: $ 20 billion since hello food press
Cost-effectiveness: base ordering amountfood items worth Tk 300
Customer-based strategies
Segmenting by objectives: can set different rates for party and individual use
Segmenting by customer coverage: operates in Dhaka, Chittagong and Sylhet.
Resegmenting the market: can expand their business by bringing other cities outside
these three under their coverage
Competitor-based strategies
Purchasing:

they partner with 240 restaurants significantly more than any of their

competitors
Design: their website is better designed than its competitors and ease of use is more
Service: can take steps to lessen the present service time of 1 hour 10 min.

53

54

6.8 Business Canvas Model:

6.8.1

Brick Organization
Designed for:

Designed by:

Date:

Version:

The Business Model Canvas

Key Partners

Key Activities

Value Propositions

Customer Relationships

Customer Segments

Goods Manufacturer
Supplier of goods
Land owner

Selling goods

Daily necessities, groceries,

personal care, household utensils etc.
Retail Service

Direct contact
Cordial relationship

Customer seeking one-stop solution

and fresh products

Key Resources

Channels

Goods
Fronline stuff
Managers
Store outlets
Wincore ERP system

Direct selling

Cost Structure

Revenue Streams

Cost of goods
Maintenance cost
Remuneration
Rent
Tax
Utility bills

By selling goods

Figure: Business Canvas Model for Brick Organization.

55

6.8.2

Click Organization:
Designed for:Foodpanda

Designed by:

Date:

Version:

The Business Model Canvas

Key Partners

Key Activities

Aramex

Restaurant made food home

delivery

240 Restaurants in Dhaka,

Sylhet and Chittagonj

Value Propositions

Customer Relationships

Customer Segments

Mass customization

Fast food lovers

A wide range of cuisines from

a large pool of restaurants

Office goers
College and varsity students

Food from customers' favorite

restaurants straight to their
doorsteps

Key Resources

Channels

Website

Order on website/ mobile app

Delivery stuff

Delivery by own bike or

Aramex

Employee

Cost Structure

Revenue Streams

Food from restaurants

70 tk / delivery

Web maintenance cost

Remuneration
Overhead cost

Figure: Business Canvas Model for Click Organization.

56

7 Service Marketing Mix 7 Ps Analysis:

7.1 7 ps Analysis for Click Organization:
Marketing Mix

Rokomari

Chaldal

Product

Books, CD-DVDs, Souvenir,

T-shirts

Price

same price like a retailer

shop, Up to 20% commission
on the stated price, shipping
charge 50tk/delivery

Place

Delivery anywhere in
Bangladesh

Promotion

Grocery, sweets, electric

appliances, health care,
personal care, pet care, baby
care
Lower price than that of major
superstores in the Dhaka city,
Free deliveries all over Dhaka
city.
Serving all of Dhaka city,
except certain parts of Old
town.
Through Website, direct mail,
word of mouth,

Advertising on Facebook
(active page with more than
800000 fans), use of banners
all over Dhaka city,
Campaigning in different
festivals like Boimela, Eid,
Birthdays of writers.
Delivery stuff, Tech savvy
Call centre operators,
book readers, internet users
delivery personnel,
comfortable with e-commerce convenient E-commerce
users
Online order (through cart)
Online order delivery
delivery
payment or
payment / on request send
bKash prepayment.
credit card machine with
delivery representative.
Well decorated webpage,
Detail information of goods in
ease of use, high page
web page , lucrative web site.
speed, customers review,
clearly displaying product
reviews, similar product
recommendation.

People

Process

Physical Evidence/
Servicescape

57

7.2 7 ps Analysis for Brick Organization:

Marketing Mix

Aarong

Meenabazar

Product

Mens wear, womens wear,

childrens wear, home dcor
products, jewellery, wedding
product
Value based pricing

Grocery, health care,

personal care, pet care, baby
care products

Place

serves through 13 retail

stores across the country

serves through 18 retail

stores across the country

Promotion

Billboard, print media, social

media, electronic media,
Shelves, POS displays, Visual
product presentation, word of
mouth.
Cultural minded people, sales
people, cash people

Banner, poster, displays at

point of sale, leaflet, visual
product presentation, product
placement by creating HOT
ZONES & COLD ZONES.
Upper middle and middle
class people, sales people,
cash people
Product selection physically
payment through Visa
Card/Master card or physical
money

Price

People

Process

Physical Evidence/
Servicescape

Product selection physically

or via internet) delivery
payment through Visa
Debit/Credit/Gift Car/Master
Debit/Credit/Gift Card/bKash
/COD (Cash on delivery)
Spacious and colourful
decorated outlets, printed
brochures, invoice, fast-paced
music when overcrowded like
before EID, PUJA etc. slow
music when less crowded,
well designed website.

58

Competitive pricing,

Lucrative physical locations

with increasing visibility, red
and orange colour in meat
section, green colour in
vegetables and fruits section,
troylleyology, white colour in
stationery section and the rest
section with fluorescent
colour.

8 Gap Analysis and Proposed Strategies to overcome Gap:

The basic characteristic of the Gap model is that it actually puts an accent upon the oversights in the quality between the guest and service provider and are directly connected
with the attitudes towards the perception and expectations. This model demonstrates the
process of the development of the service quality (Ljubojevi, 2004)
Market Research Gap Variation between actual expectations of customers and the way
how the management understands their expectations (management does not understand
what customers expect from a service).
Design Gap Represents variation between perceptions of the management about the
expectations of customers and specifications of service quality, i.e. management of a
company realized the actual customers expectations but has not developed a system of
measures which will enable the delivery of a desired quality.
Conformance Gap Represent difference between specification of service quality and
attributes of the process of service production and delivery, i.e. difference between what
managers have defined as standard of service quality and the way how a service was
actually delivered.
Communication Gap Represents variation between delivered service and what
customer was actually told about the service itself.
Customer Expectations and Perceptions Gap Represents difference between
customers expectations regarding the service and their perception about the specific
service. The last gap is the result of all the previous gaps.
Service Quality Model consists of five dimensions.

Perceptibility presence of physical elements;

Reliability capability of a promised service to be delivered in a specific manner

Responsibility carefulness, willingness to help and offer a fast service;

Safety knowledge and politeness of the employees and their capability to be

trusted at;

Empathy offer of a personalized service, observing a customer as an individual.

59

Dimensions

Reliability

Item Instruments

Experience

Perception

Satisfactory

Return Policy.

No

time promised.

Satisfactory

Keeping customers

Ensuring by

informed about when the

calling on

service will be performed

mobile

Providing Prompt service

Determined and
Dedicated
No
One hour and 10
minutes.
Ensuring by email
or calling on mobile

Agreed

Determined

Agreed

Determined

Responsiveness to

Fully

Try their best to be

customers' requests

responsive

responsive.

Satisfactory

Determined

Convenient operating

Not

Plan to make it

hours

Satisfactory

24/7

Satisfactory

Determined

Moderate

Determined

Satisfactory

Determined

to customers
Willingness to help
customers

Providing customers with

individual attention

Empathy

Service Provider

Delivery of promises.

Delivery of services at the

Responsiveness

Customer

Dealing with customers in

a caring fashion
Having the customers'
best interest at heart
Understanding the
customers' requirements
60

Assurance

Making customers feel

Not

safe in their transactions

Satisfactory

Ensured

Knowledgeable staff to
Answer customer

Satisfactory

Ensured

Moderate

Determined

question.
Tangibles

Ordered Food

Market Research Gap:

Management has defined minimum order for taka 300. But customers think it should be
lower than it. Service charge per delivery taka 70 in Dhaka City is also high to customer.
But management thinks service charge is low. Management can minimize this gap by
conducting a in depth market research
Design Gap:
Management understood the customer expectation regarding the quality control of the
food that Food Panda supplies to consumers. Notwithstanding of realizing this particular
expectation, Food Panda is not able to provide the guarantee of the food they supply.
Management can minimize this gap by setting goal regarding customer expectation and
standardizing the service quality.
Conformance Gap
Customers often find it time consuming to order a food by phone as they have to try
several times to get the customer representative. Apart from that wait time is ballooned
from five minutes to eight minutes. This gap can be curtailed by designing appropriate
order of service and customer service stuff training.
Communication Gap:
Food Panda offers that customers can avail different cuisines from different restaurants
described in the website. But in dept interview with the consumers reveal that sometimes
some of those cuisines are not available vai order. This gap is due to exaggerated
promises in advertising. This gap can be lessened by providing information to contact
personal to give customers.
61

Customer Expectations and Perceptions Gap

Distorted information provided by contact personal and management are responsible all
the gaps mentioned above. They can ensure better service through the use of survey.

9 Recommendation:
For brick-and-mortar organizations:
Service is the most crucial part for the success of brick-and-mortar retailers and
technology is the great enabler of service. Utilizing wireless network and access to
online presence on the cloud system, retailers can give customers access to all the
information they need streaming video demonstrations, up-to-the-minute inventory
information, personalized coupons or offers and moreright at the point of sale.
Customers can be served with a team of sales associates enabled and empowered
by mobile technology. One key is making certain that sales associates have as much,
if not more, information about products as the customer has. Another is making sure
associates have the same customer datafrom demographics to purchasing history
to shared likes and dislikesto help them deliver more thoughtful, more personalized
service.
Collecting and leveraging customers personal information have long been staples of
online retailers to provide personalized recommendations. Brick-and-mortar stores
can catch up this method effectively & quickly. By more closely integrating their online
and in-store operations, they can enhance their knowledge and understanding of
customers through integrated data collection and analytics. For example, when a
woman logs onto to a garden centers WiFi network, the system can see that she has
recently purchased vegetable seeds and send coupon for 25% off fertilizer to her
smartphone. A home improvement store associate can see that a customer is an avid
birder so he shows him the stores new shipment of birdhouses. A pharmacy can
inform a loyal customer that her prescription medication has become an over-thecounter drug and offer her a personalized introductory discount. The system can
gather information ranging from demographic and psychographic data to purchasing
histories and personal shopping behaviors and make this information available to
62

sales associates on the floor. In the era of information technology the key to success
is to make sure that every store and every associate has access to the crucial
customer information network has accumulated. The more the system and employees
know about customers, the more it will be possible to provide more personal, more
consistent, more satisfying and more differentiating customer experiences.

One of the key elements to increase customer satisfaction can be mobile application.
After entering the shop customers can be accessed through the guest WiFi network.
Mobile applications can enable a variety of customer interactions ranging from
greeting a loyal customer to enabling her to check prices with a barcode scanner to
pushing coupons based on her past purchase history. Mobile applications can include
check out capabilities that allow associates to accept payment using smart handheld
devices, eliminating the frustration of waiting in long, inefficient cash register lines.
Mobile applications can even provide customers with value when theyre not in store.
Some of the other mobile app features can be shopping list aggregation, viewing a
store map, getting product information by scanning shelf or kiosk barcodes, accessing
selected social networking tools such as likes and peer reviews, finding online help,
seeing limited price matching from respected retailers, requesting associate
assistance and streamlining electronic payment.

Mobile application is not the only option for retailers looking to personalize their
marketing tactics. Interactive displays and digital signs can also be used to collect
information about customers and make individualized recommendations based on
that knowledge. For example, a cosmetics retailers and brands can start using
interactive displays that allow shoppers to try on makeup virtually, using facial
recognition software to determine how a particular product and shade will look on a
shopper based on her skin tone, eye and hair color, and other factors. These displays
can deliver then targeted advertisements and special offers based on a user's
customized results. Such platforms can be expanded in the future to link to other
databases detailing Internet browsing history, social media presence and other
63

elements of Big Dataeven pinpoint individual identitiesto tailor marketing

messages even further. Moreover interactive video displays and apps may allow
customers to more easily navigate store.

On the other hand, employees are one of the most important parts of service. Theyre
the ones that will keep customers coming back to store. Brick and mortar retailers
have to make staff the best part of the experience. They have to ensure that they have
a solid team of experts that are engaged with customers at the right level from the
minute they walk in the shops door

For click organizations:

Demand of ebooks is increasing day by day. Ebooks can be delivered almost
instantaneously. It is very simple and easy to purchase and download ebooks
through the Internet. So besides physical books online retailers should initiate
ebook selling.
Search Engine Optimization (SEO) is a very viable marketing outlet that can, in
concert with effective landing pages and content, bring a business qualified leads
and customers. Moreover, studies have shown that SEO can have a better ROI
than traditional forms of marketing like TV and print ads. SEO can provide a
business visibility, branding, traffic, a high ROI, credibility, and insight into
customer behavior. So online retail stores should invest heavily on SEO.
Online retailers have to foster relationship with consumers by helping them make
decisions through recommendations of items based on past purchases, user
reviews and ratings and suggested complementary purchases. Consumers should
have many options for forging a personal bond with the brand, including user
profiles, reviews and ratings, wish lists and Listmania lists for recommending
favorite products.
Running a blog associated with product bring about limitless potential of content
marketing. By producing free, valuable content, online retailers can create trust in
64

their brand and keep people informed. Blogging also gives something to share on
social media and helps rank in search engines. A simple yet highly effective way
to get started with content marketing for business is to think of all the starting-point
queries people have about products and industry. Using blog, online retailer can
answer these queries as individual articles. Additionally, retailers can use blog to
offer tips, tutorials, and resources related to their products and the lifestyle around
their products. If retailers can create epic content on a fairly regular basis, they will
begin to see the power of content marketing via social media shares, search
engines, and so forth.
Retailers should provide an easy interface for customers to register their
complaints. They should make sure that all queries and complaints are addressed
immediately. If some problems cannot be addressed due to any limitation then at
least customers should be apprised about the unavoidable circumstance. Having
customer complaints in their own interface will allow retailers to use customer
feedback on products and packaging. Retailers may adopt the policy to offer their
customer a return option for gift orders.

10 Conclusion:
Traditional physical retail stores are facing their biggest challenge since the dawn of the
World Wide Web some 25 years ago. The face of retail has changed; today, retailing
means going into shopping centers, going online and going mobile. Digital technologies
in the form of smart phones touch screens and information infrastructure has
revolutionized retail outlets. With a burgeoning tech savvy population and rising income
in urban areas, the web will continue to shape the business model of online as well as
physical retail stores of Bangladesh. This research looked into the impact of web on the
retail industry of Bangladesh, the survey report showed something really interesting;
even through people do have reservation about shopping online a large population is
willing to adapt. With a proper business model and right strategy online shopping can
become a trend for both physical and online store alike. For that to happen many major
issues are to be addressed; like security and customers trust. With constant upgrading

65

of technologies and proper management; it is not that far, that most people would be
doing business online, redefine conventional way of shopping altogether.

66

11 APPENDIX
11.1 QUESTIONAIRE
FOR THE CUSTOMERS
1. What is your age?
(a) 15 - 25yrs old
(b) 26 - 35yrs old
(c) 36 - 45yrs old
(d) 45yrs +
2. Gender
(a) Male
(b) Female
3. Marital status
(a) Married
(b) Single
4. What is your average monthly Income?
(a) No income
(b) < 30000
(c) 30000-60000
(d) 60001- 90000
(e)>90000

5. Are you self-supported?

67

(a) Yes
(b) No
6. How many credit card(s) do you use?
(a) None
(b) 1 - 2
(c) 3 - 4
(d) 4 - 5
(e) More than 5
7. How many year(s) have you used a computer?
(a) Never used computer
(b) Less than 1 year
(c) 1 3 years
(d) 4 6 years
(e) 7 yrs +
8. Indicate your ability to use the Internet
(a) Not skilful
(b) Somewhat skilful
(c) Skilful
(d) Very skilful
(e) Dont use
9. What is your primary access to the Internet?

68

(a) In your home/ Dorm room/ Apartment/ Work office

(b) At university computer labs
(c) Public facility (library, apt computer lab, etc.)
(d) Other
(e) No access

Strongly

Disagree

Neutral

Agree

Strongly agree

disagree
1

10. I am willing to give my personal information when shopping on the Internet.

1

11. I can save time by shopping on the Internet.

1

12. I trust the security of online payment methods such as credit card.
1

13. I can save money by shopping on the Internet.

69

14. Internet shopping is easy to do.

1

15. I am concerned about possible interception of financial information by an

unidentified third party.
1

16. I found myself checking prices when shopping even for small items.
1

17. Internet shopping is convenient.

1

18. I would be more likely to shop on the Internet if credit card security was
insured.
1

70

19. Internet promotions such as banner advertisement, sales, or free gifts are
attractive to me.
1

20. Online shopping is safe for credit card use.

1

21. I would be more likely to shop on the Internet if the Web site was easy to use.
1

22. I shop online where I can reduce my efforts in traveling, walking, parking,
waiting, and carrying as much as possible.
1

23. I enjoy shopping on the Internet.

1

24. I want to see and touch products before I buy them.

1

3
71

25. Online shopping is a way I like to spend my leisure time.

1

26. When the Internet retailers are not fully identified, I worry about whether they
are reliable.
1

27. Internet shopping provides a better quality product.

1

28. I like to shop on the Internet where it is easy to compare many products and
screen them in order to choose the one I like.
1

29. When shopping on the Internet pictures and colours are clear and
representative of the products.
1

72

30. Internet shopping provides more variety of products.

1

31. I would be more likely to shop online if product returns were easier.
1

32. Traditional retail stores offer me better services than online stores.
1

33. When shopping on the Internet, I am satisfied with the delivery system.
1

34. I am satisfied with the return policyof Internet shopping.

1

35. I would be more likely to shop online if the pictures of the items were clearer.
1

73

36. I would be more likely to shop online if faster delivery was insured.
1

37. When shopping on the Internet, the stores reputation concerns me.
1

38. I dont like to pay returning postage when returning online purchases.
1

39. I would be more likely to shop online if more extensive descriptions of items
were included.
1

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