INDUSTY OVERVIEW:

Local cosmetics and toiletries industry continues to dominate the domestic market gradually with
the sector posting a double digit growth over one and a half decades. Presently, the local
manufacturers hold around 60 per cent share in the domestic cosmetics and toiletries market
compared to only 40 per cent in the late nineties. The robust growth of the sector over the last 15
years has turned it into one of the vital money spinning areas with an annual turnover of
approximately Tk. 150 billion. Industry insiders have attributed such a significant growth to
diversification of products along with supplying quality goods at competitive prices. They also
said massive consumerization coupled with a rising purchasing capacity of the middle income
generation has been helping it to become a mammoth cosmetics industry.
Apart from ensuring quality, expenditure in advertisement, in most cases, emerges as the fate
deciding factor of a newer product. Data of Bangladesh Cosmetics and Toiletries Manufacturers
Association (BCTMA) showed that the industry has employed 0.5 million people and its annual
turnover reached Tk. 150 billion in 2014 of which local players including national and
multinational companies contribute Tk. 90 billion. A large number of products which are mostly
used by the higher middle and upper class of people are still being imported.
President of BCTMA Md Rezaul Karim said the industry has been able to maintain an average
10 per cent growth year on year basis for last one and a half decades following an increasing
demand. He said the sector depended on import for more than 60 per cent of its products before
2000 but the figure has now been reverse largely thanks to local producers. More than 35 million
households in the country have made Bangladesh one of the lucrative consumer markets and our
opportunities lie within it."
According to the Bangladesh Bureau of Statistics (BBS) survey 2010, nine companies including
Unilever Bangladesh, Kohinoor, Square, Keya, Kashem Group, Kollol Group, Moushumi
Industries, Delta Group and Aromatic (Aromatic soap is now acquired by Kollol Group) hold
more than 95 per cent of the market share of local products.

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The BBS survey based on sale of soap, detergent, personal care products revealed that Unilever
holds 45 per cent while Kohinoor 20, Square 18 and Keya 13 per cent annual market share. But,
taking into consideration only the winter season, locally owned Square was the market leader
with 40 per cent of overall sale, the BBS data revealed. Kohinoor and Keya also enjoy high sales
as their market share rose to 25 per cent during the cold season, according to BBS survey.

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COMPANY OVERVIEW:
Kohinoor Chemical Company (BD) Limited was government owned company up to May 05,
1988 and it transformed into a Public Limited Company from May 05, 1988. KCCL has 11
brand-icons (types of brand). Among the brand icons, Tibet is the flagship brand names. In our
country, there are some companies those are national and multinational industries. Mainly
Unilever is the multinational company that is producing detergent and cosmetics products and in
maximum of the cases, Unilever is the market leader and some of the cases, KCCL is the market
leader.
Company secretary of Kohinoor Chemical Co Md. Ferdows Jaman said in the annual stockholder
meeting The oldest cosmetic company in the country has now 35 products, of which Tibet brand
comprises 19 items. He added Product diversification according to the consumer demand,
maintaining quality is the key to success of the industry. KCCL is better known for its brand
Tibet, which received Tk 2.96 billion from the customers in 2013-14 which was Tk 2.72 billion
in 2012-13. Tibet Snow, Tibet LipGel, Tibet 570 laundry soap, Tibet beauty soap and Sandelina
soaps are some unique brands of the company.
Some promotional strategies are available in KCCL that are free premium, event promotion,
sponsorship, household campaign, sponsorship of some social awareness program, summer and
winter program for retailers, Genster saloon upohar etc.. For advertising they use different types
of media: print media- newspaper and magazine, outdoor media-billboard and live media- TV
and radio. For advertisement of KCCL, different types of Magazines are also used. There are six
functional departments of KCCL which are sales and marketing department, account and finance
department, production department, HR and admin department, store department and audit and
survey department.

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VISION, MISSION, GOALS AND VALUES OF KCCL:

Vision:
KCCL have a vision to attain their avowed mission of assuming the above duty and
responsibility. KCCL envisage for a more beautiful tomorrow for the country, for the region
and for the whole world.

Mission:
Time has rewarded KCCL with the rank of leadership. But KCCL will always remember what it
means to be the leader in the market. KCCL will always try to explore beyond the boundaries of
possibilities. Customer need and the customer need alone will be KCCLs guiding philosophy in
manufacturing and marketing of products that enhance beauty of the people and satisfy their
souls.

Goal:
Their goal is to achieve success and to keep success on-going KCCL has devoted itself to update
its HRD resources and maintaining standard batch by batch, even price by price.

Values and Popular Brands of the Organization

Quality of the products, reliability, and strong distribution channel are the core values of the
organization and are the basis on which they do business. KCCLs products can be classified
into four broad categories.

Cosmetics
Toiletries
Soap and
Detergent

Some Popular Brand of KCCL are:

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STRATEGIES FOLLOWED BY KCCL:

Objective of this report is to briefly analyze the strategic approach of Kohinoor Chemical Co.
Ltd (KCCL) and highlights the steps taken by KCCL which makes them more and more
successful day by day. An immense observation will be done on their strategy policy to extract
their success story in Bangladesh.

Functional Level Strategy:

This kind of strategy is concerned with making improvements to business functions that support
business and corporate strategy. Functional strategy include IT strategy, marketing strategy, IT
strategy, human resources strategy, and operations. Functional-level strategy is the foundation
that supports both corporate-level strategy and business strategy. Many strategic initiatives are
simply the implementation of functional strategies, but often a strategic initiative straddles
numerous functions and businesses. The main aim of a functional level strategy is to improve a
firms efficiency, quality, innovation and customer responsiveness.
-

Quality:

KCCL is committed to cater to the health and home care needs of the nation. This commitment
demands immense socials responsibility of ensuring quality in terms of quantity, purity, stability,
safety, efficiency and presentation of the product. At every stage of the production, stringent
control mechanism involving raw material testing, in-process quality control, packaging,
labeling, finished product testing as well as stability monitoring and documentation is maintained
to ensure the highest quality product consistently. Standard Operating Procedures (SOPs)
developed according to the cGMP guidelines of WHO and EU are being strictly followed in
every steps to ensure full compliance with the process parameters. Well equipped with most
modern and sophisticated equipment like High Performance Liquid Chromatography (HPLC),
Gas Chromatography (GC), Infrared (IR) Spectrophotometer. KCCL commitment to quality is
clear from its progressive use of state of the art manufacturing technology.

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Innovation:

KCCL employs a significant part of its resources in its R&D with a view to retaining its
leadership position in the Bangladesh FMCG market through introduction of innovative
products. The R&D team comprises of academically sound and professionally competent
diversified professionals who have firm commitment to new product development. R&D team of
Kohinoor Chemical Co. (BD) Ltd. is consistently striving towards
developing new formulations
simplifying manufacturing processes
bringing cost efficiency
The untiring effort of the R&D team has enabled the company to introduce five new products
with 15 presentation forms and strengths in 2010-15, while a good number of products are in the
pipeline.
-

Securing the future:

To keep pace with the ever-changing local market scenario and to cater to the unmet healthcare
needs of the nation, KCCL always concentrates its efforts in introducing new products .Some of
examples are :

Bactrol: Family health care soap Bactrol was introduced by KCCL in 2005. Extensive
consumer promotion, in addition to promotion to the healthcare providers, built a solid

base to meet the changing social needs.

Sandalina Soap: Sandalina Soap is a first-time-in-Bangladesh product designed to
capitalize a niche market-the FMCG market.

Efficiency :

The ever-changing market place has fuelled to undertake infrastructural development to build
competitive advantage in order to retain its position as a leading FMCG company. KCCL is
committed to developing individual human, technical and conceptual skills through various
educational and a wide range of internal and external human resource development and job
related training programs each and every year.
-

Central Product Management Dept. (CPMD):

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The Central Product Management Department is the heart of marketing of Kohinoor Chemical
Co. (BD) Ltd. This dept. controls all promotional activities of products. It is headed by Produce
Promotion Manager. The CMP prepares the product plans. It determines how many products will
get exposure in each month. The annual planning procedure is started in July and continues to
January. Usually, 15 20 products get exposure every month. Thus each product gets about 3-4
times exposure every year. One of its every important function is sales Forecasting. Sales
forecasting is done monthly in association with the Sales Management Dept. During sales
forecasting, previous sales trend and seasonal variations are taken into active consideration.
Product life-cycle is also considered carefully.
-

MIS & Planning Department

Kohinoor Chemical Division has been brought under exclusive computer network. The MIS and
Planning Dept. have two operational units: (1) Management Information System and (2)
planning. The primary objective of MIS is to ensure availability of all types of data throughout
the KCCL. It collects sales data from points of sales, processes market research data and disperse
to respective departments. It manages employee profile including personal details and presence.
-

Human Resources Department

A company is only as good as its people. The day-to-day management of KCCL is in the hands
of experienced professionals dedicated to achieve outstanding levels of performance which
ensures better customer service. The Human Resources Department of Kohinoor Chemical
Division is one of the sophisticated one in Bangladesh. It is headed by Human Resources
Manager.

Business Level Strategy

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This kind of strategy is concerned with succeeding in chosen markets. Kohinoor Chemicals
follow the Focused Cost Leadership strategy regarding almost all of its brands. It charges
relatively less for its entire product ranging from soaps to toothpastes, compared to its closest
rivals. Its flagship Tibet brand of cosmetics, toiletries and household products has been very
popular among the middle income and rural people (who are amongst the highest portion of the
population) of the country for ages because of its unique efficacy and safety profile in face and
skin. It is one of the largest toiletries brand in Bangladesh and competes neck in neck with the
multination brands, like Lux and Sunsilk both of which are owned by Unilever.

Corporate Level Strategy

A corporate-level strategy specifies actions a firm takes to gain a competitive advantage by
selecting and managing a group of different businesses competing in different product markets.
KCCL carries out the following corporate level strategies:

Kohinoor Chemicals follow a related linked diversification model. They compete in

seven different industries with various products from home care and personal care. They
have economies of scope as most of the products can share the same manufacturing

facilities, inputs and specially the distribution channels.

KCCL is a currently owned by Orion Group, so it is part of a Group of Companies. Over
the years, under the leadership of Orion Group, KCCL had not only regained its lost
glory, but also had been able to penetrate into the horizon of export markets and found
new locations for business.

BCG Matrix of Kohinoor Chemicals

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A key resource of strategic planning is the ability of the management to envision its current
product base, with respect to product life cycle (PLC), cash flows, and the extent of financial and
non-financial support required and justified by each product. Concordantly, the BCG matrix is an
effective strategic tool that can help the management decide on which products to build on,
which products to support, which ones require corrections, and which brands should be let go
off. The following figure illustrates the current positioning of KCCLs main bread earners with
respect to their market share, and market growth.

Figure No. 1: BCG Matrix for KCCL

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IDENTIFYING STRENGTHS, WEAKNESSES, OPPORTUNITIES,

AND THREATS FOR KCCL :
The KCCL enjoys a reputation in the country. The strength, weakness, opportunity and threat of
KCCL are as follows-

Strengths

KCCL has good quality and hygienic products.

It has advanced technology.
It has good brand name Tibet.
Pioneer in manufacturing high quality beauty and personal care products in this
subcontinent.
Strong and qualified management.
Commitment to be directed towards to quality service.
Competitive price/commission.
Trained salespeople and committed employees to customer.
Organizational culture to value the customers most.
Product recognition already exists in customer mind.

Weaknesses

Difficult to manage large employees.

High cost for the training of the salespeople.
Less attractive packaging in case of some laundry shop.
Absence of teamwork between branches.
Heavily depends on head office for decision making.
Lack of incentives and rewards from the management section.
Sometimes Lack of Motivation of workers.

Opportunities

Expand market internationally

It can Increase the demand in the customer mind through most visible advertising.
Through huge Investment in potential country, achieve maximum market share.
To relate the Management properly.

Threats
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Some other company (like Keya, Uniliver, Square).

Countrys strict rules and regulations.
Customer awareness of pricing and service.
Political stability breakdown the outcome result

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FACING CHALLENGES IN THE FIELD

Table No.1: Market share and Growth of KCCL compare to its Competitor (2011)
BRAND
Lux
Tibet
Meril
Keya

COMPANY
Unilever BD
KCCL
Square
Keya

VALUE (BDT)
GROWTH (%)
111,812,640
57
78,413,081
69
62,556,254
75
56,895,201
56
(Source: http://www.thefinancialexpress-bd.com: date: 01/02/2012)

MARKET SHARE (%)

25
18
15.6
10

Unilevers most prominent brand is Lux and its closest rival is Tibet, the most prominent
product of Kohinoor. They have fierce rivalry amongst themselves but Tibet are not
slacking behind.

Kohinoor Chemicals focuses on middle class or rural area people, whereas, Unilever
concentrate on upper middle or high class and urban people.

Unilever has both related and unrelated diversification, whereas Kohinoor has a related
linked diversification business.

Kohinoor adopts a cost leadership business strategy whereas Unilever follows an

integrated cost leadership / differentiation strategy.

At Kohinoor Chemical, they do not wait to react to changes; they create a virtual future
so that when the future arrives, they will be ready to face it. Kohinoor Chemical is one of
the first companies to have an extensively computerized and automated work
environment. The state-of-the-art Management Information System (MIS) forms a
common information platform for the organization so that everything-from the
production floor to the sales people working in a rural area, from the quality assurance
department to the distribution operation of thirteen depots located throughout the
country-is interconnected. In KCCL, information technology is used as a decision support
system and coordination tool to facilitate human and machine performance and fast
communication.

NOTES ON IMPROVEMENT
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New Product Development

If KCCL wishes to survive long term in the market, must invest in new product development.
Always, all products eventually reach the decline stage. Without new variety of white detergent,
sales will eventually become non- existent and customers will seek competitors products.
Additionally, by introducing new and innovative variety of Toilet Soaps to the market place first,
KCCL may generate customer loyalty and maintain its market share as the market grows.

Branding
Branding is a major issue in overall product strategy. Branding is used to give products unique
identities and helps the marketer to differentiate their product from competitors. The brand white
detergent should be given priority in such a way so that consumers are loved to buy this product.

Promotion Policies
Promotion is more than just advertising. It includes almost all form of communication that a
company has with its customers. Indeed, it includes communication with stakeholders, suppliers,
intermediaries and the general public. The range of parties that a company promotes to is known
as the target group. KCCL can adopt push and pull strategies to promote brands in the market.

Price Policies
KCCL should focus more on the price as worldwide raw material price is dropping due to low
price of oil. They should capture the opportunity and try to give best value for money to the
consumer. In the industries where KCCL operates Unilever Bangladesh is the price taker. KCCL
should step out of the comfort zone and attempt to play in the market offensively.

REFERENCE:

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1. Hill, Charles W. L.; Jones, Gareth R. (8th Edition) Theory of Strategic Management with
Cases. South-Western Cengage Learing.
2. Thomson et al. Crafting and Executing Strategy
3. Mannan, M.A., Strategic Management. Published by Bangladesh Open University.
4. Kohinoor Chemical Company (Bangladesh) Limited(Tibet). Manufacture Chemical
Company." KOHINOOR CHEMICAL CO. (BD) LTD. N.p., n.d. Web. 05 Aug. 2014.
5. "Seeking Young People with Big Ideas." Unilever Bangladesh. N.p., n.d. Web. 05 Aug.
2014

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