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Case Summary

The case summarizes Apex Footwears marketing strategy in its home country. As its name suggest,
the company was established with a view to reaching the Apex of the market. But more than 20 years
have passed, it is yet to be the market leader. The footwear consumers of Bangladesh prefer quality
shoes at competitive price. Apex although being able to satisfy some of the aspects, is still failing to
produce shoes with consumers perceived durability with a competitive price tag. The thing is not that
Apex is unable to produce durable products, the problem lies in its strategy which believes
Bangladeshi consumers will prefer products which has already got international traction. So, it is
actually unaware of the fact that Bangladeshi footwear consumers expect a footwear to have a lifespan of at least six months. When price is concerned most Apex consumers find Apex products
relatively higher priced making it a premium brand. Apex with having lots of advantages including
lower labor and manufacturing costs, why still falling behind in this areas and what it can do to
overcome these issues, the case deals these questions.

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In a quest for Apex
Apex is a footwear brand of Bangladesh. Incorporated in January 04, 1990 by Mr. Syed Manzur Elahi
as Apex Footwear, the company has gone through several changes in its name, first in 2006 as Apex
Adelchi Footwear Limited (AAFL) and then again reverted into Apex Footwear in December 2013.
From its inception, Apex was primarily focused on capturing the foreign market. It pioneered export
of value-added finished products in the leather sector of Bangladesh. Today, Apex Footwear is a
leading manufacturer and exporter of leather footwear to major shoe retailers in Western Europe,
North America and Japan.
Apex is the local manufacturing and retail wing of Apex
Footwear Limited (AFL). While AFL has predominantly
earned both critical and commercial fame through export of
high quality leather footwear in the international arena,
Apex has sought to adeptly make use of that expertise to
provide high quality, fashionable footwear to the
Bangladeshi consumers.
But although its international venture was a success story,
its domestic market growth is increasing in small
increments. With only 6% of market share in local market,
they are way behind Bata (which holds more than 20%), an
international footwear brand which started its operation in
Bangladesh in 1962. Apex on the other hand started serving
its domestic consumers in 1997 with the establishment of its local retail wing. It wanted to give
Bangladeshi consumers an opportunity to experience quality leather footwear designed according to
the latest market trends and technology from Europe.
But does quality demand higher price from consumers? A comment from a loyal consumer of Bata on
Apex shoes address that question. He said, The way prices are structured by Apex for its shoes, it is
really hard for us, low income segment, to buy footwear at that price. He also added, Bangladeshi
consumers want the kind of shoes which will give them best value at lowest price.
It seems Syed Nasim Manzur, the Managing Director of Apex, believes something different. He said,
By serving international market from 1990, we have gathered knowledge and know-how that we are
applying now in Bangladeshi market. What that knowledge and know-how tells them is, Now-adays, here started a pride on Made in Bangladesh. Now Bangladeshi consumers know what product
quality is. To capture this new trend, they rebranded their offerings in 2013. First they rebranded its
logo which is now composed of Red and Green, a sign of Bangladesh as well as environment friendly
products. Second, they started expanding into each and every corners of Bangladesh to make its shoes
available at consumers doorsteps. Third, they are trying to make Bangladeshi consumers aware that
they are producing international quality product in Bangladesh.
Apex would certainly have known what international quality means for its international consumers
as the countrys leading footwear exporter exports almost 4.5 million pairs of shoes to 130 footwear
brands and retailers in 40 countries. Its international affiliation includes Macys and J.C. Penney in the
US, ABC Mart in Japan and Deichmann in Germany. Therefore, it can certainly be proud of the
quality of its products. But whether Bangladeshi consumers are proud of the quality is subject to
justification.

A survey conducted on 100 majorly affluent footwear consumers, reveals some interesting facts on
this question. When they are asked this question, What comes to their mind, when they hear the word
Apex?, 40% said it reminds them Quality, 32% said Price, whereas only 9% answered
Durability. When asked specifically on Durability of Apex products, 46% strongly disagreed, 25%
stayed neutral and 11% disagreed whereas only 8% strongly agreed. They are also asked general
question relating to the frequency to buy a new pair of shoes, where the majority responded they buy
a new pair of shoes once in every six months.
Interestingly, one similar study by IBA-JU but on a larger (720 respondents) and more diverse sample
validate the previous study findings. It is found that 29% associates Apex with Quality, which is the
largest, 25% associates it with Price and 17% associates it with Fashion. More interestingly, the
study also validates the comments of our first mentioned loyal Bata consumer. On the question of
Price vs Quality of Apex 58% finds Apex as Expensive, 39% as Fair, where only 2% finds it as
Low.
Has Apex failed to address the buying power of its consumers to focus on quality and fashion? Seems
like still they have not, as its Managing Director said, Not only Bangladesh, for any market, the most
important thing is the buying power of that market. Suppose, we have designed a quality product, but
which is beyond the buying power of most Bangladeshi consumers, then that product wont satisfy the
market. He also added, We are trying to be a Mass Brand.
Apex has everything, it has international know-how, international affiliation; it counts consumers
buying power; it takes into account consumers preferences on quality, design and trend; even it is
operating in a country where cost of labor is less than one-fourth of China, the lowest in Asia. Then
what holds itself from being the market leader.
Apex Marketing Directors statement might answer a bit of the question, From the past, we served
Bangladeshi consumers with the shoes manufactured for international consumers. Thats why our
focus was on metropolitan cities, particularly Dhaka and Chittagong. Afterward, we found our quality
shoes have demand all over Bangladesh. In our Districts and Sub-districts, consumers also showed
massive interest on our products. Thats why, we have opened a lot of retail outlets outside of
metropolitan cities.
APEX means the peak or the zenith. Will Apex be able to reach the peak of footwear market with
these strategies? Only time will tell.

Questions:
1. What are the strategic mistakes do you think Apex has made? What is the main problem in
Apex products? Why do you think so?
2. Apexs Bangladeshi consumers believe its products as quality products but they also believe it
lags in durability. Is it possible for a shoe to be of quality but lagging in durability? If
possible, then interpret the first statement.
3. Study found that Bata has positioned itself as a Bangladeshi Product. Do you agree? If
agree then in light of Batas strategy, explain what it takes to be a Bangladeshi Product.
4. As a student of Marketing Management, what are your suggestions for Apex if it wants to be
a market leader within next 5 years?

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Sources:
http://www.thedailystar.net/apex-group-emerges-as-shoemaker-to-the-world-40514
http://www.thedailystar.net/business/apex-brings-global-trends-local-footwear-163741
http://www.apexfootwearltd.com/apex_footwear/Home
https://www.youtube.com/watch?v=tdv1m9_aS04
Md. Firozar Rahman, Soad Rahman, "Apex fails to become a market leader in Bangladesh" BRAC
Business School, December 30, 2012
"Measuring & Managing the Factors behind Customer Satisfaction: A Study of Apex Adelchi
Footwear Limited", IBA-JU
Q.1 What are the strategic mistakes do you think Apex made? What is the main problem in
Apex products? Why do you think so?
Apex has done several strategic mistakes from the very beginning. They are mentioned below:
1. Market Strategy: It underestimated the worth of domestic market when they started doing
business. That time their primary focus was international export. Thats why today it is a
leading exporter of Bangladesh, but isnt still a domestic market leader.
2. Pricing Strategy: Knowingly or unknowingly, it has positioned itself as a premium brand in
the market. Their metropolitan focus and relatively high product prices contributed to this
fact. Recently they are claiming they have shifted their focus in a quest for being a mass
brand. But Apexs recent marketing promotions contradict this claim.
3. Product Strategy: They thought, just like consumer food items, consumers will prefer
Export Quality footwear that they are producing for international market. But in reality it
proved to be wrong.
The main problem in Apex products is the durability issue of the products. I think so because study
found that most Bangladeshi consumers expect a shoe to last at least six months. Many Apex shoes
fall short of that standard. This single product issue coupled with the higher price tag has made its
products unattractive to mainstream low and middle income segment of the country, those who
represent the majority.

Q.2 Apexs Bangladeshi consumers believe its products as quality products but they also believe
it lags in durability. Is it possible for a shoe to be quality sacrificing durability? If possible, then
differentiate between Quality and Durability.
Yes, it is possible for a footwear product to be a quality product without being comparatively less
durable. It may sound ambiguous at first but the things will be clear if we delve a little bit into it.
First, we must describe some material facts of the two terms. Quality signifies a products overall
impression. Quality of a product can also be defined as the degree of customer satisfaction. It is the
totality of characteristics of an entity that bear on its ability to satisfy stated and implied needs. It is
not only durability which constitutes quality, there are 7 other dimensions of quality like performance,
features, reliability to name few. Thus, although durability is an important dimension for any product,
in reality it only contributes 14% to the overall quality. Now, from this perspective, if we analyze the
statement, it will now be easier to make sense of it.

There is also another way to look at these qualitative terms. If we ask someone how good a product is,
s/he may reply the product is good. If we ask the same question to a larger audience, there will always
be some people who will say the product is not that good. How these two literally opposite idea fit
together? When neither of them are telling lie, we can only interpret the both sayings as right only
when we take into account respondents perceived differences. It is possible that one person is saying
the product as good only because s/he finds it colorful, but others who are saying as not good may
expect other unfulfilled features in the products than the color. This is called the perceived
differences. Same thing happens here in this Apex case.
Consumers were asked what comes to their mind, when they hear the word Apex. 40% replied it
reminds them Quality, whereas only 9% replied Durability. Again the same consumers were
asked about the durability of Apex product when 46% strongly disagreed whereas only 8% strongly
agreed.
Our interpretation:
We believe both the findings are correct, only difference is that first question entails both specific and
not specific cues where the question itself was about an overall impression of a brand. Therefore,
most consumers responded Apex products are Quality products, which is an overall idea. Apex
products are creatively designed, they are comfortable to wear, they are also export-quality shoes,
these can be possible reasons to consider it as a Quality brand. On the other hand, the second question
was a specific question, where most consumers responded Apex products are not durable. That means
most consumers perceive Apex products as not durable. This perception does not simply mean Apex

products wont last more than 2/3 months or even more than 6 months. It may be based on their
previous experience on other footwear brands, it can be based on any other expectations. There is no
limit in peoples expectation. This is how we interpret the whole statement.

Q.3 Study found that Bata has positioned itself as a Bangladeshi Product. Do you agree? If
agree then in light of Batas strategy, explain what it takes to be a Bangladeshi Product.
Yes, I agree with the statement that Bata has positioned itself as a Bangladeshi Product . Bata Shoe
Company is one of the largest companies not only in Bangladesh but also in many other countries . In
Bangladesh, Bata started its journey in 1962. The company was incorporated in 1972. Since its
inception, Bata shoe company Ltd. has strived towards one goal customer satisfaction. Bata shoe
company (Bangladesh) is the market leader in the footwear industry since its operation in Bangladesh.
The name Bata achieve such a position in the customers mind that whenever they heard the name of
Bata, a footwear with high quality comes in to their mind.
Bata companies strive to listen to the customers in their local markets and clearly identify their
footwear needs, and then to provide products that exceed their customers expectations in terms of
quality, style and value.

There were no remarkable competitors in the shoe industry when Bata started its operation in
Bangladesh. And they had better opportunity to spread their market across the country. Bata first earn
its name as the most durable shoe manufacturer for school going children. When it first comes to this
country it has realized that there is a huge market opportunity for school shoes. Quickly they
introduced the Naughty Boy shoes. This quickly earns recognition among the parents of that time,
as they need a durable shoe that really can last even after lots of rough treatment . Later on they started
to produce different types of shoes both for men and women and for different ages which is regarded
as the selective market specialization. By selective market specialization Bata get its popularity to a
wide range of customers.
Furthermore, they have made their shoe available in the urban area as well as rural area . In many rural
areas where their stores are not available but the local stores keep Batas shoe visible in their self with
care to deliver to its customers.
Besides, most of the people in our country are from middle class family. They want to buy a pair of
shoes which ensure quality as well as durability. Bata shoe has proven itself of that quality. So its
customers are satisfied enough with their most preferred brand.
Finally, Bata has some specifications as
The Best Product: Bata companies offer their customers fresh, fashionable footwear and accessories,
designed specifically for the needs of the local market. Their shoes are always well made from quality
materials.
The Best Service: Their sales associates offer consistently first class service. They are well trained to
ensure a proper fit and pledge customer satisfaction.
The Best Value & Quality: Through the efficient sourcing and distribution of Bata products, they can
control the cost and quality at every step to ensure value to their customers.
For a foreign company, to position its brand as the local brand of a host country requires a massive
localization process to be gone through. By establishing two local production facilities at Tongi and
Dhamrai, and employing more than 1,500 local Bangladeshis, Bata successfully localized its offerings
to cater the need of consumers.
Through all its way Bata is regarded as the Bangladeshi Product which a customer wears in
childhood, youth, and middle age even in old age without any dissatisfaction.
Q4. As a student of Marketing Management, what are your suggestions for Apex if it wants to
be a market leader within next 5 years?
Apex should take some strategic plan and also take some change measures in the current situation to
increase the number of customers and to be a market leader.
Change Target Market: Apex target only upper class people in our country. In the viewpoint of
Bangladesh 9.75% people belong to upper class, 25% to middle class and remaining portion are lower
class people. If Apex target not only upper class but also middle and lower class, then customer will
increase.
Geographically Product Development: Apex is major shoe retailers in Europe, North America and
Japan. So, Apex primarily develops products based on these countries not for Bangladesh. In
developed countries, people hardly wear shoes more than 2 or 3 months, they focus more on fashion
and environment friendliness than longevity. In Bangladesh, people expect shoes lifetime at least 6
months. So, from the viewpoint of Bangladesh, Apex should develop shoe based on Bangladesh.

Change Price level: Should set price level according to the demand of middle and lower class people.
Develop Products Based on Demographic Factors: Gender and Age are two important factors in a
society. Almost half of our total population is women and a large portion of total population is school
going children. So, Apex should include these people with their target market because, its main
competitor is already producing verity of shoes for women and also school shoes for school going
students.
Concern about Accessibility: Apex should ensure product accessibility of stores anywhere in any
place all over the country. Apex can expand market by establishing new outlets or forming
partnerships/franchises with other outlets.
Focus on Product Longevity: Apex shoes longevity is so poor. Its longevity is below 6 months.
Bangladeshi people traditionally like longevity. So Apex should increase their product longevity.
Provide After Sale Service: Set up Apex Customer Care Centers that will increase its after sale
service. After sale service will improve customer loyalty and confidence as well as minimize the
durability concerns of the customers.
Offer and Promotion: Should increase their offer and promotion so that, people are attracted to
product and buy product.
Concern about CSR: Apex should participate in CSR activities because it can make deep positive
impact on peoples mind.
I think if Apex adroitly takes these strategy and change, it will be market leader within 5 years.