Market Research Report 1 5 FINAL

International Market Research for Leather Products from Bangladesh
Product Name: Leather Products Intensively Researched Countries: USA & Canada
Course name: International Market Research Instructor: Prof. Eshetu, Dawit Fatema Chowdhury Student ID: 4156035 Date of Submission: Nov 30, 2010
Fatema Zabeen Chowdhury
Table of Contents
Table of Contents....................................................................................................... 2 1. Executive Summary................................................................................................4 2. Research Description..............................................................................................6 3. Country Analysis (USA)...........................................................................................6 3.1 Country Profile...................................................................................................6 3.1.1 Country overview........................................................................................6 3.1.2 International trade......................................................................................8 3.2 Political Characteristics and Governance..........................................................8 3.2.1 Political conditions.......................................................................................8 3.2.2 Governments international trade and investment policy ..........................9 3.2.3 Regulatory Barriers.....................................................................................9 3.3 Physical and Commercial Infrastructure..........................................................10 3.3.1 Physical Infrastructure...............................................................................10 3.3.2 Commercial Infrastructure........................................................................12 3.4 Source country (Bangladesh) experience in the target country (USA)............14 3.5 Target market profiles (USA)...........................................................................16 3.6 Product/ Service fit..........................................................................................18 3.7 Market Characteristics.....................................................................................19 3.8 Competition and Competitive Barriers ...........................................................23 4. Country Analysis (CANADA)..................................................................................26 4.1 Country Profile.................................................................................................26 4.1.1 Country overview......................................................................................26 4.1.2 International trade....................................................................................27 4.2 Political Characteristics and Governance........................................................28 4.2.1 Political conditions.....................................................................................28 4.2.2 Governments international trade and investment policy.........................28 4.2.3 Regulatory Barriers...................................................................................29 4.3 Physical and Commercial Infrastructure..........................................................29 4.3.1 Physical Infrastructure...............................................................................29 4.3.2 Commercial Infrastructure........................................................................31 4.4 Source country (Bangladesh) experience in the target country (CANADA).....32 Page 2 of 63
Fatema Zabeen Chowdhury 4.5 Target market profiles (CANADA)....................................................................34 4.6 Product/ Service fit..........................................................................................36 4.7 Market Characteristics.....................................................................................37 4.8 Competition and Competitive Barriers ...........................................................40 5. Strategic Issues....................................................................................................42 5.1. Country/ Market priorities...............................................................................42 5.2. Entry strategies..............................................................................................43 5.3. Product development strategies.....................................................................45 5.4. Product delivery strategies (Distribution).......................................................47 5.5. Pricing strategy .............................................................................................48 5.6. Marketing communication strategies.............................................................49 6. Appendix: Country Attractive Analysis.................................................................51 7. Bibliography.........................................................................................................57
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1. Executive Summary
Conducting an International Market Research for any organization is an absolute necessity before launching any product to any international market. Such market research should include the effort of gathering data on the questioned countries on their economic status, climate settings, cultural aspects, language barriers, certainly if there are any historical advantages. In this report, a sample product has been selected that should have ample resources and potentials in the source country, where for launching that product in the international market, Sequential Multi-Country Research approach has been considered. The selected product is leather goods that include leather bags, garments, leather hand gloves, wrist watch belt, shoes and so on. The initial market entry strategy is Exporting leather goods from a country named Bangladesh. Bangladesh is a small country in south-east Asia with a per capita income of $336.87 per person [CIA Bangladesh 2010] could be a good place for getting quality leather products with low price. Currently the country produces about 200 million sq. ft. of finished and crust leather made out of Cow, Goat, Sheep and Buffalo. Hence the material is available, and the prime point is the labour cost that is very cheap. The minimum wage of labour is only $43 per month (July 29, 2010) [CIA Bangladesh 2010]. Hence there is an opportunity to produce leather goods with low cost with the low-wage labour force and with the plentiful availability of the raw materials of this product. Five countries have been considered for initial market research including USA, Canada, United Kingdom, Russia, and Turkey. Most of these countries are being selected based on their economic, cultural, climate and language similarities. A country attractiveness matrix has been analyzed on these countries a detail of Page 4 of 63
Fatema Zabeen Chowdhury which is provided in the Appendix Section. Out of the analysis only 2 countries are being selected for more intensive research that is basically captured in this report.
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2. Research Description
Research objective is a statement of information which is necessary to know before we enter any new market. To export leather products, first the suitable markets are explored, then few other key factors being analyzed - examining the size of the market, analyzing the concerns about risk and itemizing the opportunities to build up the best market. To enter any new market some research questions have be answered based on some strategic issues and the specific scope to introduce products. In this report, data are gathered for different market countries including the general overview of the country, their political characteristics, rules and regulation, economic characteristics, competitive characteristics, and trade barriers, their cultural differences, information about the target customers, the overall physical and commercial infrastructure and so on. To collect all these data,
Secondary Data Collection method has been applied and the information have been searched and represented in this report either from research contents available in library or from on-line sources.
3. Country Analysis (USA)

3.1 Country Profile
3.1.1 Country overview The United States of America is a federal constitutional republic that composes of fifty states and a federal district. The official name of this country is United States of America [Country USA]. USA is located in between Canada and Mexico as well as bordering by the North Atlantic Ocean and the North Pacific Ocean. The total area of this country is 9,826,675 sq km [CIA USA, 2010]. President of the United States is the head of the state and the head of the government as well. Congress and Page 6 of 63
Fatema Zabeen Chowdhury judiciary share power to the national government. The federal government is the part of state government. Generally, federal and state election held between two party systems [Politics USA]. America was separated from Britains American colonies in 1776 and was recognized as the new nation of the United States of America in 1783. Between 19th and 20th century, 37 new states were joined with 13 original states. In the history of this country, the nation had two significant experiences. One was the Civil War from 1861 to 1865 when a northern Union of States defeated a secessionist Confederacy of 11 southern slave States and another was the Great Depression in 1930, when a quarter of labour force lost their jobs. After the World War one and two and the cold war in 1991, with achieving the victory, US is now the most powerful nation in the world [CIA USA, 2010]. The population of this country is 307,212,123 (July 2010 est.). The GDP (Purchasing Power Parity) is $14.14 trillion (2009 est.) which ranked 2 compared to the world [CIA USA, 2010]. The GDP of USA for five years is presented below:
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From the graph we can see that there was an increasing trend over the year until 2008 but the growth declined in 2009 and continues to due in recent economic disaster. 3.1.2 International trade USA exports around $1.046 trillion (2009 est.) amount of goods and imports $1.563 trillion (2009 est.) from all over the world [CIA USA, 2010]. From 2002 to 2008, there was a decreasing trend of trade balance and in 2010 as well, except for 2009 when there was a peak of trade surplus [Trade Econ]. To develop the economy, USA took more trade policy such as Free Trade Agreements (FTAs), World Trade Organization (WTO) [US State]. According to tariffs and trade, USA created General Agreement on Tariffs and trades (GATT) to support trade liberalization [US Embassy Germany].
3.2 Political Characteristics and Governance

3.2.1 Political conditions The type of government in USA is federal republic which is constitution-based and it has strong democratic tradition [CIA USA, 2010]. In terms of political barriers, as it can be seen from the table below, USAs position in the world is 9th [WorldBank Page 8 of 63
Fatema Zabeen Chowdhury 2010] according to the Political stability and absence of violence Indicator that certainly implicates a very stable political situation in the country for economic development. Political stability and absence of violence Indicator usually refers the perceptions of the likelihood that the government will be destabilized or overthrown by unconstitutional or violent means and terrorism. The major parties are the Democratic Party and the Republican Party. The president who is the chief of state and head of the government as well is governing the country. The Senate is being consists of bicameral Congress and there are 100 seats in Congress. The house of representatives have 435 seats [CIA USA, 2010]. 3.2.2 Governments international trade and investment policy USA always provides transparent legal systems, outstanding infrastructure, and low taxes to facilitate foreign direct investment. They are not only improving the economy but also creating the opportunity of exports, jobs, and the new innovation [Int Trade USA]. EPAs trade and environment organization works effectively to develop USAs trade and environment policy [Int Trade USA]. USA has Multilateral Agreements with WTO members and Free Trade Agreements with Canada - Mexico (NAFTA), Peru, Oman, Bahrain, Dominican Republic Central America (CAFTA-DR), Morocco, Chile, Australia, Singapore, Jordan, Israel [SICE]. 3.2.3 Regulatory Barriers In terms of legal and regulatory characteristics, USAs position in the world is 8th [WorldBank 2010] in terms of Regulatory quality that usually measures the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development in the country.
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Fatema Zabeen Chowdhury In terms of Rule of law Indicator that defines the quality of contract enforcement, property rights, the police, the courts and the social obligations and respects to law, USAs position is in the world rank is 13 [WorldBank Gov 2010] which puts USA always a lucrative place for investors to invest with peace in mind. In terms of health and safety a health insurance reform bill into law passed by president that will extend coverage more than 32 million American citizens who are the general population and medicated for impoverished using private health insurance by 2016 [CIA USA, 2010].
3.3 Physical and Commercial Infrastructure

3.3.1 Physical Infrastructure United States of America (USA) has probably the worlds most elegant physical infrastructure for business. There are 15,079 airports all over US [CIA USA, 2010] that essentially made her number one in world ranking for air trafficking. With 6,506,204 km of roads, and 226,427 km of railways both of which are the highest in the world, US definitely provides the best physical infrastructure for
transportation. In addition to all that, there is another 41,009 km of waterways with 10 seaports that makes US physically accessible at all country corners. With such massive infrastructure, imported items can be distributed all over US with minimal effort and cost. Currently it takes about 5 business days to complete all necessary works in order to clear an imported product from US customs with an average cost of 1315 US $ per container that is ranked as 18 [Doing Business USA 2010] compared to the time involved and facilities available in the rest of the world. The commercial infrastructure of a country is not only dependent on its physical interfaces (roads & highways etc.), it also largely depends on its advancement in
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Fatema Zabeen Chowdhury electronic infrastructure that involves phones, media, Internet facilities and their respective users. According to the data available from 2008 [CIA USA, 2010], there are currently 150 million of telephone users in USA in addition to 270 million of mobile subscribers which provides US the highest phone density in the world next to China. With that amount of phone access, US have become very popular for telemarketers over the time. In terms of broadcast, US major TV networks and more than 1500 radio stations provide media coverage in all corners of the country. With the evolution of ecommerce, Internet is now probably the strongest media to make new items and goods popular to younger generation. In terms of Internet access, US is essentially the number one in the world that accommodates 439 million of Internet hosts according to the data available in 2010 [CIA USA, 2010] with 231 million (2008) of Internet users. Such well defined communication infrastructure would definitely be advantageous for advertising new items in the market. In terms of public warehousing facilities, a recent data published by IBISWorld Industry Reports, in 2009 there were 5,742 instalments all over US that generated a revenue over 13 million US$. All these facilities are also assumed to have a standard level of sophistication & automation and networking among those facilities are important for proper business conduct. In terms of shipping rates to transport a 20 ft container between Bangladesh (home country for leather goods) and USA (target country for export) is about 2021.00 US$ and the average transit time is around 40 days [Shipping vehicles, 2010]. USA is a large country that varies quiet a lot in terms of climatic conditions. Generally the western and southern half of the USA has usually warmer weather Page 11 of 63
Fatema Zabeen Chowdhury while the eastern and northern half is extremely cold in winters accompanied with heavy snowfall, and has moderate pleasant summers compared to the other half of the country [USA Climate]. Hence for exporting leather clothing items, it would be advantageous to target for eastern and northern half of USA, while for fashionable items anywhere to the country would be satisfactory. 3.3.2 Commercial Infrastructure The US has the largest and most technologically powerful economy in the world, with a per capita GDP of $46,400. In 2009, the estimated inflation rate was -0.30% compared to 3.8% in 2008 [CIA, USA, 2010]. For bank loans, interest rates are very high these days. According to USA Today, the rate could be as high as 4.29% on Oct 2010. In December 2009, the commercial bank lending rate was 3.25% [CIA, USA, 2010] which was not that much impressive either compared to the rest of the world (rank: 149). In 1994, US entered into North American Free Trade Agreement (NAFTA) that allows free trade for North American countries which means lower prices for consumers. That means US has very good trade relations with the neighbouring Canada, but it is not that friendly to the least developed countries such as Bangladesh. In 2008, total imports from Bangladesh into the U.S. were $3.75 billion. Of these imports, only 0.58% could achieve the duty-free status and the rest 99.42% (worth $3.72 billion) was denied the preference which had to pay an average tariff of 15.32% [Saxena 2010]. Such amount is certainly the highest among all tariff-paying countries. In terms of Value Added Tax (VAT), most US states have a retail sales tax charged to the end consumers only. Difference with the VAT is in this case wholesale sales Page 12 of 63
Fatema Zabeen Chowdhury and sales of raw materials or unfinished goods are not taxed. Depending on states, sales taxes range from 0%-13% [VAT, USA]. Currency format for US is US Dollar ($) the most powerful currency in the world. In terms of foreign exchange policies, the Department of the Treasury and the Federal Reserve, which are the U.S. monetary authorities, occasionally intervene in the foreign exchange (FX) market to counter disorderly market conditions [Fed USA, 2010] in order to slow down rapid exchange rate moves, and to signal the U.S. monetary authorities' view that the exchange rate did not reflect fundamental economic conditions. On October 31st, 2010 the exchange rate of US$ with Canadian Dollar was 1.02 [1 US$ = 1.02019996 Canadian dollars]. Compared with Bangladeshi Taka (source country), the rate was 70.78 [1 US$ = 70.78 Bangladeshi Taka] [Bangladesh Bank, 2010]. In terms of payment process, usually debts get paid in every 2 weeks. For exporting leather goods, number of retail stores in the country and the availability of adequate bank loans are the most important. According to the 2007 Economic Census, there were 1,122,703 retail establishments in the United States, and that is approximately 46.6 square feet of retail space per capita in the U.S [Farhan 2010]. Number of Banks and financial institutions in USA according to Federal Deposit Insurance Corporation (FDIC) (as of Oct 2010) is 7,733 [FDIC, 2010]. According to the Bank Secrecy Act of 1970 [Bank Act1970], any financial institutions in the United States has to assist U.S. government agencies to detect and prevent money laundering. Specifically, the act requires financial institutions to keep records of cash purchases of instruments, and file reports of cash purchases of $10,000 or Page 13 of 63
Fatema Zabeen Chowdhury more. Also with the introduction of US Patriotic Act, 2001 [Patriotic Act 2001], rules on money laundering become tighten that monitors closely all foreign transactions done by US financial institutions. In terms of foreign investment, United States has always provided foreign investors a stable and welcoming market, and strong infrastructure to do business [Invest 2010]. In 2006, foreign investment in US was $161.5 billion. Incentives and credits offered by U.S. states and local communities differ from states to states and vary from cash incentives to tax exemptions. For example, Kia Motors Corporation received an overall incentive package of $201.4 million when it opened its facility in West Point, Georgia [Miller 2008].
3.4 Source country (Bangladesh) experience in the target country (USA)

Bangladesh and USA have long term trade relationship. The long term trades between the 2 countries are shown below retrieved from US Census Bereau.
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As we can see from the trade graphs [Census 2010] above between US and Bangladesh, both the export and import from Bangladesh to US gradually improved over the years until 2009 where the global economic downturn slowed down the trade between two countries for bit. Over the export of US$3.5 billion of Bangladesh, cotton apparel and household goods tops the most in terms of exported items. Textile apparels and household goods are 2nd in the item list. Other export product items are: fish and shellfish, sporting and camping apparel, footwear and gear, wool apparel and household goods, cloth, fabric and threads (wool and silk), abrasives, belting, boxes, glass, toys, sporting goods including guns and bicycles, fertilizers, pesticides, insecticides etc. In terms of imports from US to Bangladesh, the following product categories have the highest values. Out of them, raw cotton and Generators and machineries top the most. Other imported items are: textile sewing machines, steelmaking materials, pulp and wood-pulp, drilling and oilfield equipment, wheat, other
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Fatema Zabeen Chowdhury industrial machines and engines and telecommunications equipment [Census 2010]. American Chamber of Commerce first started their trade show in Bangladesh in 1992 and since then the amount of export from Bangladesh to US went from US$1 billion to approximately US$4 billion in 2009 [Moriarty 2010]. There is also a significant sale of US products in Bangladesh. In 2004 U.S. exports to Bangladesh was $289 million which had grown over the years to well over $400 million in 2009. In reverse, the Embassy of Bangladesh in Washington DC also maintains an Economy Wing that provides necessary assistance, info, arrange for periodic trade shows in US for Bangladeshi products and items [BD Embassy USA]. In terms of banks, American Express Bank headquartered based on New York City operates in Bangladesh along with 12 other foreign banks [Bank Bangladesh 2010]. Similarly, Sonali Exchange Co. Inc. which is the subsidiary of Sonali Bank, Ltd., the largest commercial bank in Bangladesh, operates in few states including New York, New Jersey, California, Michigan, Maryland and Georgia since 1994 [Sonali].
3.5 Target market profiles (USA)

Leather goods that can be exported to USA could be leather made raw hides and skins, leather jackets, fur-skins, travel goods, handbags, gloves, winter boots etc. In USA, to export such leather goods and items young to middle aged citizens would be the preferable target customers. Over 309 million total populations in US, 87.02% of them are less than of age 65 [Euromonitor USA 2010]. USA is also a very much populated country. In terms population density it was about 34 people living on per sq km in US. Due to recent economic downturn the GDP growth was slowed
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Fatema Zabeen Chowdhury down in 2009 (-2.63%) but it picked up again in 2010 and so far the growth rate +2.64%. Over the total population, people of 15 to 64 years age in 2010 are 67% out of which 2/3rd are male and 33.33% are females [CIA USA 2010]. Gross income of US population and their average expenditure over the years are shown below.
As shown above people in USA spend quiet a lot and even after the economic downturn the consumer expenditure is extremely promising for doing new business and for exporting new leather products. US consumers spend hundreds of billions of dollars each year for celebrating holidays including Christmas, Valentine's Day, Easter, Mother's Day, Father's Day, Halloween, and so on. According to the data published by National Retail Federation in 2006-2007 [Holiday 2010], here is how the US holidays rank in terms of spending habits. The figures are given below to demonstrate the total spending versus the spending by per person in US during different holidays. Christmas: total $457 Billion / $800 per person Page 17 of 63
Fatema Zabeen Chowdhury Valentine's Day: total $14 Billion / $116 per person Mother's Day: total $13.8 Billion / $115 per person Easter: total $12.6 Billion / $110 per person Father's Day: total $9 Billion / $100 per person Halloween: $5 billion / $60 per person
Hence US consumers have a habit of really spend a lot not only during a single holiday but also all the other occasions over the year. The most recent survey done by Department of Labour (US) on how US consumer spends their annual pay-check [US Consumer 2010] which shows that each consumer on an average spends at least 3.8% of their annual income for apparels and services which is very promising for the leather goods business that I am looking for. However majority of their paycheck goes for loan payment for housing and for covering transportation costs. In terms of Segmentation Strategy that is for targeting meaningfully the group of customers, I believe the target should be the average age customers who are in between the age of 25 to 50 and who have a stable income flow. Although in most the cases females probably spend the most, however in this business case it would not be necessary to identify a specific group. There is probably a need to provide higher privilege to mens items who earn usually higher wages then women in US [Male-Female US].
3.6 Product/ Service fit

The consumer of USA spend 9,823,273.03 (US$ million) (2009). USA imports globally which market value was 1754513.00 US$ millions. It imports specially
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Fatema Zabeen Chowdhury leather items 0.26% over total global imports. The growth trend of leather items within 5 years is 4.34%. That means there is an increasing trend of importing leather items. Some factors such as values, attitude affects the demand for leather products in USA. Nowadays, the disposable income of women has increased. For these reason, the demand for handbags, office cases, briefcases, mobile phone cases and other accessories cases have increased day in day out. Since, the cost of leather goods to produce in USA is costly they import most of this item. China and India are so far the largest exporters for leather products. We have to modify our products from Bangladesh to participate in the international market. In terms of modification, we can improve comfort, water resistance, increasing durability and also concern about the change of fashion. In USA, official language is English which business language is as well. So, we can use English for labelling, instructions and delivery or other sales services.
3.7 Market Characteristics

Many similar products like apparel, leather products (bags, luggage, wallets, purses) as well as accessories are being sold in USA. Over the years, the demand for luggage and leather goods has increased. From 2005 to 2009, the compound annual growth rate (CAGR) was 3.1% that is equivalent to $465.6 billion of total market revenue in 2009 [Datamonitor USA]. Such revenue was 2% higher than European (CAGR) but less than Asia-Pacific (CAGR) by 4.7%.
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The market value of apparel, leather products and accessories and the percentage of CAGR in USA over the last five years are shown above. As shown, the past five years showed a moderate growth in the US apparel, accessories, and luxury goods market, with a deceleration apparent during the 2008-2009 recession. Apparel sales dominated all the times which is a common feature in any other similar market all over the world.
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The above pie chart shows the market segmentation for this market in 2009. As can be seen, apparel is the largest segment of this market in the United States accounting for 65.5% of the market's total value, while luggage and leather goods contains 5.3% of the market's total value which is equivalent to US$ 24 billion of total revenue.
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The forecast for apparel market in USA for the next couple years are in the two graphs above. The performance of the market is forecast to decelerate, with an anticipated CAGR of 2% for the five-year period 2009-2014. The total revenue is
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Fatema Zabeen Chowdhury expected to be close to $514.1 billion by the end of 2014 which would be an increase of 10.4% since 2009. The distribution of leather items and goods if imported from Bangladesh, leading retailers will definitely play an important role in the market. The leading companies in this market in USA are Gap Inc., Polo Ralph Lauren Corporation, TJX Companies Inc., VF Corporation and so on. The detailed approach for marketing is discussed in the next Section 4.8.
3.8 Competition and Competitive Barriers

The leather goods market in USA is very competitive. In 2007-08, USA was the 3rd leading importer of leather items in world who imported US$121.37 million of leather products in the world. China is probably the leading supplier of leather items all over the world and it is not that much different for the large leather market in USA. Chinas share in USAs import of leather articles had increased gradually from 54% in 2000 to 70% in 2004 [Exim India]. India is the 2nd largest exporter of
leather items all over the world whose market share remained closely constant at 5% over the years since 2002. In the market of USA, India is playing the dominating role just after China. In 2007-08, Indias share was 15.46% [Leather India 2008] in USA leather market. However the good news is leather markets are not going that well for China over the recent years. In 2009, Chinese leather exports have been reduced by 16% while in 2008 it was declined by 18.7% [Leather Exports 2010]. The reason for declining is due to the consistent dissatisfaction with leather products imported from China both by US and European customers [Today Zaman 2010].
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Fatema Zabeen Chowdhury On the other hand, the leather market from Bangladesh is becoming increasingly promising. Bangladesh's total leather exports totalled $110.4 million during July to August of 2010 which is 50% higher compared to $73.5 million during the same period of previous year 2009 [FahsionNet 2010]. The report published by Export Promotion Bureau of Bangladesh showed that Bangladesh exported finished leather worth $47.3 million compared with $29.9 million in 2009 (+58.4%), footwear worth 54.3 million compared with $40.8 million (2009) (+33.2%) and leather bags and purses worth $8.8 million compared with $2.9 million (+204.5%) of year 2009. The total export target for Bangladesh is $563.8 million for the leather sector for the year 2010 compared with $476.8 million in the financial year of 2009. The recent news published in The Daily Times [Daily Times Pakistan 2009] showed that Bangladesh is significantly capturing the market of leather products all over the world and the above data presented is just a snapshot on that proof. Unfortunately there is not much presence of Bangladeshi products in the leather market of USA today which is dominated by India and China although Bangladeshs export is increasingly growing in European countries. Hence it would not be that much easy to squeeze in to the US leather market but we have to focus on the advantages of importing Bangladeshi products especially on such a phase of continuous declining market of Chinese products. The strengths of leather products of Bangladeshi items are primarily due to renewable natural resource, worldwide reputation for premium quality cowhides and goat skin available in Bangladesh, availability of a large, low-wage work force which made it possible to develop premium quality products in low affordable prices. Hence the strategy would be to convince the major leather importers in US to import from Bangladesh based on the premium advantages of Bangladeshi products Page 24 of 63
Fatema Zabeen Chowdhury and based on the value proposition, it may not be that much hard to convince. For example, in Bangladesh it takes about 490 BDTK (Bangladeshi Taka) to make a pair of export quality ladies shoes which is equivalent to only US$7.00 [Leather Sector GTZ] while in US in usual retail stores their price is within $US 80 to US$120. In case of leather made laptop computer bag, the buying price from the local market (in Bangladesh) would be BDTK 2500.00 (equivalent to around US$35.00) while the same one is US the selling price is more than US$ 120 [Leather bag]. Hence the margin for doing profit is huge although it should account for importing price and other overheads, but still the quality, durability accompanied with low price should help me to convince to local importers in US to import from Bangladesh.
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4. Country Analysis (CANADA)

4.1 Country Profile
4.1.1 Country overview Canada is situated in the northern North America has ten provinces and three territories. Canada is surrounded by Atlantic Ocean in the east, Pacific Ocean in the west and northward to the Arctic Ocean. Canadas neighbouring country is United States which is bordering to the south and northwest side. It is the second largest country in the world in total area which consists of 9,984,670 sq km [Country Canada]. Queen is the head of the state and Governor General is representative of Queen. Prime Minister is the head of the government who selects members for cabinet. In 1867, Canada had got freedom from British Crown [CIA Canada, 2010]. The population of this country is 33,487,208 (July 2010 est.). The GDP (Purchasing Power Parity) is $1.279 trillion (2009 est.) which rank is 15 compare to the world [CIA Canada, 2010]. The GDP of Canada for the last five years is presented below:
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From the graph we can see that there was an increasing trend over the year until 2008 but the growth declined in 2009 and continues to due in recent economic disaster.
4.1.2 International trade In terms of International Trade, in 2009 Canada exported $323.4 billion (2009 est.) and imported about $327.2 billion (2009 est.) [CIA Canada 2010]. From 2002 to 2009, there was a fluctuation of trade balance, and after 2009 there was a decreasing trend. In 2010, Canadas trade deficit was 2.7 Billion CAN$ according to the data available in July of 2010 [Canada Balance of Trade]. The government plays a vital role in the economy. In 1989, the Government signed the US-Canada Free Trade Agreement (FTA) and in 1994, North American Free Trade Agreement (NAFTA) which is continually helping Canada to develop the economy and to improve trade relationship among those countries [CIA Canada, 2010]. Page 27 of 63
4.2 Political Characteristics and Governance

4.2.1 Political conditions Canada is a democratic country and has a parliamentary government. In terms of political barriers, as it can be seen from the table below, Canadas position in the world is 9th [WorldBank 2010] according to the Political stability and absence of violence Indicator that certainly implicates a very stable political situation in the country for economic development. Political stability and absence of violence Indicator usually refers the perceptions of the likelihood that the government will be destabilized or overthrown by unconstitutional or violent means and terrorism [CIA Canada, 2010]. The major political parties are Conservative Party of Canada and Liberal Party of Canada. Now the Conservative Party is governing. Parliament consists of the Senate has 105 seats [CIA Canada, 2010].
4.2.2 Governments international trade and investment policy Governments international trade and investment policy not only creates the opportunity for Canadas investment in abroad but also improves direct foreign investment. The policy provides transparency, stability, predictability and nondiscrimination that have positive impact on economic climate. Canada has international agreement with WTO. It has Free Trade Agreement with USA, North American Free Trade Agreement (NAFTA) with America and Mexico, Canada-Chile Free Trade Agreement (CCFTA) [Country Canada].
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Fatema Zabeen Chowdhury 4.2.3 Regulatory Barriers In terms of legal and regulatory characteristics, Canadas position in the world is 8th [WorldBank 2010] in terms of Regulatory quality that usually measures the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development in the country. In terms of Rule of law Indicator that defines the quality of contract enforcement, property rights, the police, the courts and the social obligations and respects to law, Canadas position is in the world rank is 13th [WorldBank Gov 2010] which puts Canada always a lucrative place for investors to invest with peace in mind.
4.3 Physical and Commercial Infrastructure

4.3.1 Physical Infrastructure Canada is not that far away from US in terms of providing good physical infrastructure for business. There are 1404 airports all over Canada [CIA Canada, 2010] that is ranked Canada number 4 in the world for air trafficking. With 1,042,300 km of roads, and 46,688 km of railways which are ranked 5th in the world, Canada also provides strong physical infrastructure for transportation. In
terms of waterways, it is only 636 km in Canada that means major transportation within the country is road & railway dependent. Number of seaports is however 9 that makes Canada physically accessible from outside world at all country corners. Currently it takes about 11 business days to complete all necessary works in order to clear an imported product from Canadian customs with an average cost of 1660 US $ per container that is ranked as 38 [Doing Business, Canada 2010] compared to the time involved and facilities available in the rest of the world.
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Fatema Zabeen Chowdhury In terms of telephone users and electronic communications, according to the data available from 2009 [CIA Canada, 2010], there are currently 18.251 million of telephone users in Canada in addition to 23.081 million of mobile subscribers that ranked Canada 17 in the world. However compared with Canadian population (33 million), the overall phone density is 1.22 (that means every Canadian on an average uses more than one phone) ground for telemarketers over the time. In terms of broadcast, 2 major TV networks and more than 2000 radio stations provide media coverage in all across the country. In terms of Internet access, Canada accommodates 7.77 million Internet hosts according to the data available in 2010 [CIA Canada, 2010] with 25.086 million (2008) of Internet users (ranked 13th in world). In terms of warehousing facilities, there were 124,782 employers in total all over Canada as provided by Industry Canada [Establishment Trans, 2008]. In terms of shipping rates, and for average transit time, it should not be that much different than USA. Canada is definitely among the cooler regions of the world where in most part of the country it has a below freezing winter and moderately warmer summer. Hence for exporting leather clothing items, Canadas climate profile would be definitely satisfactory. that also makes Canada a good hunting
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Fatema Zabeen Chowdhury 4.3.2 Commercial Infrastructure Canada is one of the wealthiest members of G8, with a per capita GDP of $38,200 (2009). In 2009, the estimated inflation rate was 0.30% compared to 2.4% in 2008 [CIA, Canada, 2010]. For bank loans, on December 2009, the commercial bank prime lending rate was 2.4% ranked Canada 151 compared to the rest of the world. United States and Canada have the world's largest bilateral trading relationship. The U.S.-Canada Free Trade Agreement was established in 1989. In 2009, Canada exported $323.4 billion out of which 75.02% was to US only. In 1994, Canada also entered into North American Free Trade Agreement (NAFTA) that allowed free trade between two countries. In terms of trade relation with Bangladesh, the trade grew between the two countries to over $898 million in 2007, and Bangladesh has become the second largest exporter of goods from South Asia to Canada, after India [Canada Bangladesh 2010]. In terms of Value Added Tax (VAT) in Canada, it is known as goods and services tax (GST) which is currently modified as harmonized sales tax (HST) in Ontario Canada. HST is 13% that is applied to the end consumers commodities only. Currency format for Canada is Canadian Dollar (CAD). In terms of foreign exchange policies, the external value of the Canadian dollar floats. Neither the government nor the Bank of Canada target any particular level for the currency, believing that this should be determined by the market. Such floating currency policy helps Canada to maintain its monetary policy framework, and adjust to shocks and market fluctuations [Bank of Canada 2010]. On October 31st, 2010 the exchange rate of Canadian Dollar with US$ was 0.9829 [1 US$ = 1.02019996 Canadian dollars]. Compared with Bangladeshi Taka (source country), the rate was 69.2767 [1 Page 31 of 63
Fatema Zabeen Chowdhury CAD = 69.2767 Bangladeshi Taka] [Bangladesh Bank, 2010]. In terms of payment process, same as in US, where debts get paid in every 2 weeks. In terms of the number of retail stores, Statistic Canada recognizes around 113,708 retail stores around the country [Statcan 2010] which will definitely play a key role for distributing imported leather products. Number of Banks and financial institutions in Canada according to the Govt. of Canada report is 78 out of which number of foreign banks are 49 [Financial 2010]. For foreign exchange, Canada's current policy is to intervene in foreign exchange markets on a discretionary basis rather than to be systematic only in the most exceptional of circumstances e.g. if there were signs of a serious near-term market breakdown [Bank of Canada 2010]. For money laundering policy, it is same as in US where any bank has to report a financial transaction if more than $10000.00.
4.4 Source country (Bangladesh) experience in the target country (CANADA)

Unlike USA, Canada had bilateral relations with Bangladesh soon after the independence of Bangladesh in 1971. The relations are primarily focussed on development cooperation, and trade and investment opportunities between two countries. The trade picture between Canada and Bangladesh over the last 5 years has been shown below as obtained from [CANSIM 2010]. As visible, exports of Canadian
products to Bangladesh grew over the years crossing 600 CAN$ million marks in 2009, while the exports of Bangladeshi products to Canada had also grown over the Page 32 of 63
Fatema Zabeen Chowdhury years that ended up with over 800 CAN$ million. From the figures and data, it is evident that both Canada and Bangladesh are maintaining balanced trade over the years and especially Bangladesh is making significant progress.
In terms of exports of Canadian products to Bangladesh, the following product categories have the highest values: vegetable products, base metals, pulp of wood, paper or paperboard, machinery and mechanical appliances, electrical equipment
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Fatema Zabeen Chowdhury and media recorders, chemical products, mineral products, vehicles, aircraft, vessels and associated transport equipment etc. Over the export of CAN$800 million of Bangladeshi items to Canada, Textile apparels top the most. Other export product items are: footwear, headgear, umbrellas, live animals and animal products, plastics and rubber articles, prepared foodstuffs, beverages, spirits and vinegar, tobacco and manufactured tobacco substitutes, ceramic products; glass and glassware, leather products e.g. raw hides and skins, leather, furskins, travel goods, handbags, articles of animal gut (other than silk-worm gut) etc. The High Commission of Canada in Bangladesh maintains Trade Commissioner Service that explores priority sectors to expand Canadian business interest in Bangladesh. Similarly the Embassy of Bangladesh located in Ottawa maintains an Economy Wing that provides necessary assistance, info, arrange for periodic trade shows in Canada for Bangladeshi products and items. In terms of banks, there is no specific Canadian banks operate in Bangladesh although there are 12 other foreign banks [Bank Bangladesh 2010] in Bangladesh including US and British banks. In terms of Bangladeshi banks, Janata Bank, Sonali Bank, Rupali Bank Ltd., and Bank Asia Limited operate in Canada - all of whose branches are located in Toronto [Bangladeshi Banks].
4.5 Target market profiles (CANADA)

In Canada as described earlier the total population is 34 million out of which 86% of them are less than of age 65 [Euromonitor Canada 2010]. In terms population Page 34 of 63
Fatema Zabeen Chowdhury density it was about 3.74 people living on per sq km in Canada that is almost ten times less populated than US. Economic downturn in 2009 slowed down the GDP growth (-2.46%) but it picked up again in 2010 and so far the growth rate +3.10% which is higher compared to that in US. Over the total population, people of 15 to 64 years age in 2010 are 68.7% out of which 50.1% are male and almost the same numbers as female [CIA Canada 2010]. Gross income of Canadians and their average expenditure over the years are shown below.
As shown above, the consumer expenditure and peoples annual gross income are both extremely promising for doing new business and for exporting new leather products even after the recent economic downturn. In terms of holidays expenditures, Canadians are not that far away from their US counterparts. According StatsCan data, $36.8 billion is how much Canadians spent only in December of 2005 [Suite 101]. In 2008, average expenditure per Canadian household was 71,364 CAN$ out of which 4% was spent for clothing and 2.3% of them were spent for holidays and buying gifts etc. [StatsCAN 2008]. Page 35 of 63
Fatema Zabeen Chowdhury Hence it shows even though the population density is not much in Canada compared to US, the average Canadians spend almost the same amount of money for clothing and apparels which is promising for the leather goods business that I am looking for. In terms of Segmentation Strategy, again the target should be the average age customers who are in between the age of 25 to 54 and who have a stable income flow.
4.6 Product/ Service fit

The consumer of Canada spend 776,929.31 (US$ million) (2009). Canada imports globally which market value was 333777.00 US$ millions. It imports specially leather items 0.10% over total global imports. The growth trend of leather items within 5 years is 36.41%. That means there is an increasing trend of importing leather items. The main reason for increasing imported leather items is fashion trend. These days people usually use casual dress and the use of leather items have increased, especially women use most. Canada usually imports leather products from USA, and China. We have to modify our products to participate in the international market. In terms of modification, we can improve comfort, water resistance, increasing durability and also concern about the change of fashion. In Canada, official languages are English and French and both are business languages as well. Hence labelling, instructions and delivery or other sales services should have to be modified for having instructions both in English and French.
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4.7 Market Characteristics

The apparel retail industry in Canada is not that big as in USA, however based on population and GDP rate it is not that small at all. The total revenue for the Canadian apparel retail industry in 2009 was $21,990 million that represented a compound annual growth rate (CAGR) of 4% for the period spanning 2005-2009 [Datamonitor Canada].
The growth of apparel industry as shown above over the past 5 years, it has grown fairly strong in recent years and although the growth rate is forecast to decelerate, the growth seems to be continue. Out of this big apparel market a fair portion is taken by the luggage and leather goods market. In 2009, the Canadian luggage and leather goods market had total revenue of $1.8 billion that was a 7.9% compound annual growth rate for the period spanning 2005-2009 [Datamonitor Leather Canada].
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The luggage and leather goods market consists of the total sales of bags, wallets & purses and luggage that further include briefcases, handbags, wallets, purses, suitcases, and travel bags. Sales of bags, wallets and purses proved the most lucrative for the Canadian luggage and leather goods market in 2009, with total revenues of $1.2 billion, equivalent to 68.6% of the market's overall value, while the Page 38 of 63
Fatema Zabeen Chowdhury rest 31.4% is composed of the sales of luggages and travel bags (total revenue of $550 million).
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The performance of the market is forecast to decelerate, with an anticipated CAGR of 6.2% for the fiveyear period 2009-2014, which is expected to drive the market to a value of $2.4 billion by the end of 2014. Comparatively, the US markets will grow with CAGRs of 2.3% over the same period, to reach respective values of $28 billion by 2014.
4.8 Competition and Competitive Barriers

The leather goods market in Canada is not that huge compared to the neighbouring USA partly because of its less population, and partly due to extreme cold weather during winter during when leather apparels are not that much effective. In 2007-08, Canada imported US$ 12.55 million of leather products [Leather India 2008].
Among them Indias share was 1.60%. China is still probably the leading supplier of leather items also in Canada as it is all over the world. However to market the Bangladeshi products in Canada, the strategy would be the same as described earlier for US leather market focusing on the key advantages of Page 40 of 63
Fatema Zabeen Chowdhury Bangladeshi products e.g. low cost, premium quality and durability. The objective would be to convince the major leather importers in Canada to import from Bangladesh quantifying on the key aspects as already described.
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5. Strategic Issues
5.1. Country/ Market priorities
In terms of leather products to export USA is the best market. For example, the GDP and population of this country is very high [CIA USA, 2010]. In the political analysis we can see that for economic development the political situation in this country is more stable [WorldBank 2010]. Regarding investment policy, USA always provides transparent legal systems, outstanding infrastructure and low taxes to facilitate foreign direct investment [Int Trade USA]. There is a big opportunity to export. To support trade, USA made General Agreement on Tariffs and Trade (GATT) [US Embassy Germany] with different countries. Although USA has North American Free Trade Agreement (NAFTA) with her neighbouring country Canada and Mexico but there is no free trade agreement with Bangladesh. As mentioned earlier, the total amount of goods imported from Bangladesh to USA was $3.75 billion in 2008. To export those amount Bangladesh got only 0.58% duty free status, however they had to pay average of 15.32% which is the highest amount among the tariff paying countries [Saxena 2010]. The cheap leather price in Bangladesh in its local market, the quality of the products, the less demand in the domestic market, and the high demand in international market as well as the higher price for leather products primarily motivates me to enter into foreign markets to sell leather goods and items. The leather market in USA is the first choice for several reasons. USA is one of the largest leather importing nation in the world whose climates, population, economic and financial infrastructure promises profitable business in every sector. With the
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Fatema Zabeen Chowdhury current declining in market share for big competitors such as China, it would probably be the right opportunity to export into USA market.
5.2. Entry strategies

In USA, leather products are being sold in many supermarkets, hypermarkets, departmental stores, discount and variety stores and other retail stores
[Datamonitor USA]. To enter USA market we can apply our own retail outlet strategy. If we open our own store in USA, some advantages would be full profit and complete control over business and supply chain, while the major disadvantages are costs and expenses to maintain the store and its business as well as risk of market acceptance. Hence it is decided to enter the market initially with exporting strategy which will be explained later in detail. The distance between the capital of Bangladesh and the capital of USA is 12,898 km [Distance between Bangladesh and USA]. As for shipment rates, it costs 2021.00 US$ per 20ft container to transport from Bangladesh to USA and about 40 days to transit [Shipping vehicles, 2010] as mentioned before. There are two biggest competitors in the leather market, one is China and the other one is India. These days, there is a decreasing trend in Chinas exporting leather products [Leather Exports 2010] which should help us convincing the local importers in US and accelerating exports from Bangladesh. To do business English would be the perfect language to communicate. The market value of leather products in USA is 5.3% of total import in 2009 which account for US$24 billion as mentioned before [Datamonitor USA]. Value, attitude and the rise of income of women effect to increase the demand for leather goods. The increasing trend in adapting the latest fashion also plays a major role on getting
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Fatema Zabeen Chowdhury the leather clothing as well as the cooler climates. In terms of importing costs, it may not be that much impressive considering other countries in the world, although the business practice, safety in investment, and regulatory barriers in USA are definitely the top most in the world. To enter into international market this would be personally my first approach. However adequate market analysis and data have been gathered to enter a safe strategic entry into the market. The potential market in USA is the largest in the world and even to make an entry in such large market, a minimal of few millions of investment will be required. However based on cost analysis and market stability, the potential percentage on profit would also be significant which, in turn, will help to convince the banks to sanction loan in this project. In building a market entry strategy, several factors need to be considered out of which time is a crucial factor. To create a new brand on some product and to prove its quality, worth and reputation takes time, effort and money. Large investments in promotion campaigns are needed. Transaction costs also are a critical factor in deciding on market entry strategy that sometimes becomes a high barrier for international trade. The overall costs also include searching the right vendors and the related bargaining costs. Physical distance, language barriers, logistics costs are always there that need to be monitored on continual basis. Weak legal entities between participating countries in transaction and their tariff structure make things difficult. Sometimes these factors become so costly and risky that Governments often get involved in commodity systems.
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Fatema Zabeen Chowdhury On the foreign market entry strategy for this product, Exporting is chosen which is the most traditional and well-established form of operation in foreign markets. The basic advantages that Exporting provides are: no direct manufacturing is required in an overseas country detailed marketing information would be required in the marketing country gives an opportunity to research on overseas markets before doing any investment in that market reduces the potential risks of operating overseas.
The disadvantage is primarily that: overseas agents play a major role in the overall business and so the lack of control has to be weighed against the advantages. significant investments in marketing are required in these cases especially when the market size is very large. In order to take the advantage of the existing market condition in US, Aggressive Exporting strategy need to be considered by properly defining plans for product, price, promotion, and distribution in US states. In terms of tariffs in USA, it also goes in the list of our advantages. In US states retail sales charge Value Added Tax (VAT) from customers. However there is no tax for unfinished and raw materials or wholesales [VAT, USA] in USA.
5.3. Product development strategies

Young to middle aged peoples demand for leather products are much more than other age category of people because this specific category of people earn much as well as spend much money for consuming. As mentioned earlier, in 2010, the annual gross income and the consumer expenditure have increased gradually after the economic downturn in 2009 [CIA USA 2010]. Department of Labour (US) did one Page 45 of 63
Fatema Zabeen Chowdhury recent survey which shows that each consumer on an average spend 3.8% of their annual income only for apparel and services [US Consumer 2010]. In terms of leather products, the primary plan is to introduce fashion and apparel products, shoes, leather bags for luggage and especially laptop computer bags. No specific changes will be made as long as the products are made in Bangladesh keeping in mind the fashion trend in US and North America. Standardization and adaptation a combination of both approaches will be followed. At the initial stage, adaptation of the existing trend in US will be followed. Products will be manufactured back in Bangladesh according to demand available in US. However as the time will go by and with the increase in market share, new styles and designs which meant to be successful in other parts of the world will also be introduced in US market. Climate difference between Bangladesh and USA will also play a role in the adaptation strategy. For instance, the weather of Bangladesh is warmer than in USA. In terms of adaptation of leather products in USA market, I have to notice the physical feature of the people. As for modification we`ll have to improve comfort, water resistance, will need to increase durability and also to keep a concern about the trend of fashion while certainly keeping a low price tag compared to competitors. The key benefit of such strategy is that consumers will notice immediate drop in price but getting the same or better quality products with the similar design and style. Such advantage in price will certainly help in boosting up the sale.
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Fatema Zabeen Chowdhury The potential downside could be the assurance of products quality that need to be assured back in Bangladesh as a part of manufacturing process. It is the complexity of maintaining and managing the quality in the far end country which, if not maintained properly, will cause a great loss on its overall sale.
5.4. Product delivery strategies (Distribution)

Although China is the first supplier of leather products in USA and India has position second for exporting leather products but recently the export of leather products from China to USA has fall down over the recent years [Leather Exports 2010]. This would be the right moment to catch into the market. Special packaging, labelling, handling, and warehousing will be required as well as the proper transportation. As mentioned earlier, the initial level of sales would be couple millions of US dollars. In terms of delivery the first approach would be to find the agents who are familiar with the process of importing leather products from other countries to USA. Such list of registered importers in USA can be obtained in [USA Leather], where general importers usually advertize their needs in this website. Those importers can be approached with the product samples available from Bangladesh with a competitive pricing strategy for their demanded products which will definitely help us to get introduced in US leather market. These importers or agents also usually work for the big retail customers who are well equipped with their own transportation and warehousing facilities. Hence the initial strategy would be to roll on with the existing importers and distributors and once the initial setup becomes stable and profitable, I can start thinking of renting warehouses and distributing of my own as well as taking initiatives of importing by myself.
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Fatema Zabeen Chowdhury Initially by going with the agents requirements, implications on pricing and profits are significant although at the same time it simplifies the overall management from end to end. The overall cost has to count the manufacturing or retail buying price in Bangladesh and the shipping charge per imported unit which, in turn, has to be lower than the demanded price of the importers to make any significant profit.
5.5. Pricing strategy

We have renewable natural resources, availability of cowhides and goat skin that has worldwide reputation for premium quality, availability of a large and low- wage labour force in Bangladesh which made it possible to develop premium quality products in low affordable prices. A cost break analysis is done based on draft data available from different sources for a sample leather product such as Ladies shoes. Product Quantity Leather required Purchase Price of Leather Local manufacturing cost Other expenses, packaging Ladies Shoe 1 Pair 1.50 sft Tk. 110/sft Tk. 450 Tk. 10
[Leather Sector GTZ] [Leather Sector GTZ] Estimated 14,000 pairs of shoes can be allocated per 20ft shipping container 1 US= Tk. 69.65
Estimated Shipping cost Total cost after exporting
Tk. 10 Tk. 470 = US $ 7.0
typical usual price asked by Importers in US US$ 25.00 [USA Leather] Estimated Gross Profit US$ 18 Estimated Gross Profit 233% As shown above with proper pricing adjustment and careful export management, it would be possible to collect revenue that could be more than 200%. Such a significant profit margin will allow us to offer our products to the importing agents
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Fatema Zabeen Chowdhury at competitive lower prices at the beginning to obtain a good amount of share in the market. In international trade, as suggested in [INCOTERMS], it would be best for the exporters to refrain, wherever possible, from dealing in any INCOTERMS
(International Commercial Terms) that may hold the seller responsible for the import customs clearance and duties, taxes and/or other costs and risks at the buyer's end. For example the trade terms DEQ (Delivered Ex Quay) and DDP (Delivered Duty Paid) often costs exporters charges and expenses at the buyer's end which may cost more to the seller than anticipated. To overcome losses, it would be wiser either to hire a reliable customs broker or freight forwarder in USA or leave to the importing agent to handle the import routines [INCOTERMS]. For payment purposes, the Letter of Credit (LC) strategy will be followed. Letters of credit that primarily are used in international trade transactions, for deals between a supplier in one country and a customer in another according to the legislation proposed by the International Chamber of Commerce. The basic advantage of letter of credit is that it can be made irrevocable, i.e., cannot be amended or cancelled without prior agreement of the beneficiary, the issuing bank and the confirming bank. Hence for leather exports to USA, opening an LC account with the local bank would be most satisfactory.
5.6. Marketing communication strategies

To attract more customers, the key promotional message would be ``Quality and Durability at Affordable Price``. The primary focus would be to use Internet as much as possible. Internet is the best media to advertise new items in the US market because 231 million (2008) of Page 49 of 63
Fatema Zabeen Chowdhury internet users who access the internet at least several times a week and this
number compared to the world is rank 2 [CIA USA, 2010]. It is very popular media to attract young generation and business people as well. These days product quality can be advertized over Internet using the ``free populated cyber space`` such as Facebook, Twiiter, and YouTube. Using such intelligent media, news of the newly arrived fashions and articles can be spread to people in rapid phase without incurring any additional costs. For the leather export business, Internet will remain in primary focus for me for a while before moving into some other forms of communications.
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6. Appendix: Country Attractive Analysis

Table Appendix -1: Country Attractiveness Analysis: Data Assessment 1 least attractive, 5 most attractive Fatema Chowdhury USA CANADA UK RUSSIA Impo Ra Ra Ra Ra rtanc tin tin tin tin e g Asse g Asse g Asse g Asse Weig (1- ssme (1- ssme (1- ssme (1- ssme Decision Criteria ht 5) nt 5) nt 5) nt 5) nt Criteria 1 Country profile (Attractiveness of the country) 15% GDP 8% 5 0.4 2 0.16 4 0.32 3 0.24 Population 5% 5 0.25 1 0.05 2 0.1 4 0.2 Land size 2% 3 0.06 4 0.08 1 0.02 5 0.1 Criteria 2 Political characteristics (Risk of doing business) 10% Political Stability and Absence of Violence Index, 2009 3% 4 0.12 5 0.15 3 0.09 2 0.06 Corruption Perception Index (CPI) 2009 3% 3 0.09 5 0.15 4 0.12 1 0.03 Political Risk Index, September 2010 4% 4 0.16 5 0.2 3 0.12 1 0.04 Criteria 3 Legal/Regulatory Characteristics 10% Index of Economic Freedom, 2010 5% 4 0.2 5 0.25 3 0.15 1 0.05 Regulatory Quality, 2009 3% 3 0.09 5 0.15 4 0.12 1 0.03 Rule of Law Indicator 2009 2% 3 0.06 5 0.1 4 0.08 1 0.02 Criteria 4 Economic characteristics 20%
TURKEY Ra tin g Asse (1- ssme 5) nt
1 3 2
0.08 0.15 0.04
1 2 2
0.03 0.06 0.08
2 2 2
0.1 0.06 0.04
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Inflation rate Unemployment rate GDP per Capita Criteria 5 Availability, cost and quality of physical Infrastructure Roadways Merchant Marine Time to import Cost to import Criteria 6 Competitive barriers The Global Competitiveness Index The Financial Development Index The Global Enabling Trade Index Criteria 7 Commercial Infrastructure Commercial bank prime lending rate Internet Users Paved road density Criteria 8 Product/Service specifc market potential Product: Leather Goods Consumer Expenditure, 2009 Global Imports,2007 % of Leather Items over Total Gl obal Imports Import Growth in Leather Items TOTAL 10% 5% 5% 10% 2% 3% 2% 3% 10% 2% 5% 3% 10% 5% 3% 2% 15% 7% 5% 1% 2% 100 % 5 5 4 1 0.35 0.25 0.04 0.02 4.09 3 3 2 2 0.21 0.15 0.02 0.04 3.53 4 4 3 3 0.28 0.2 0.03 0.06 3.53 2 2 5 4 0.14 0.1 0.05 0.08 1.96 1 1 1 5 0.07 0.05 0.01 0.1 1.89 2 5 5 0.1 0.15 0.1 3 2 4 0.15 0.06 0.08 4 4 3 0.2 0.12 0.06 1 3 2 0.05 0.09 0.04 5 1 1 0.25 0.03 0.02 5 4 3 0.1 0.2 0.09 4 3 5 0.08 0.15 0.15 3 5 4 0.06 0.25 0.12 1 2 1 0.02 0.1 0.03 2 1 2 0.04 0.05 0.06 5 2 5 0.5 0.1 0.25 4 4 4 0.4 0.2 0.2 3 5 3 0.3 0.25 0.15 1 3 2 0.1 0.15 0.1 2 1 1 0.2 0.05 0.05
5 4 5 3
0.1 0.12 0.1 0.09
4 5 3 2
0.08 0.15 0.06 0.06
2 3 4 4
0.04 0.09 0.08 0.12
3 1 1 1
0.06 0.03 0.02 0.03
1 2 2 5
0.02 0.06 0.04 0.15
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Table Appendix -2: Country Attractiveness Analysis: Data Index Fatema Chowdhury USA Decision Criteria Criteria 1 Country profile (Attractiveness of the country) GDP Population Land size Criteria 2 Political characteristics (Risk of doing business) Political Stability and Absence of Violence Index, 2009 Corruption Perception Index (CPI) 2009 Political Risk Index, September 2010 higher number stands for better stability CPI 2009 Score 30 - lowest risk, 0 higest risk 0.41 1.02 0.30 -0.72 -0.88 billion(US dollar) million sq km 14140.00 307.21 9826675. 00 1279.00 33.49 9984670. 00 2128.00 61.11 243610.0 0 2110.00 140.04 17098242 .00 874.50 76.81 783562. 00 Measureme nt Data CANADA Data UK Data RUSSIA Data TURKE Y Data
7.50
8.70
7.70
2.20
4.40
26.26
27.80
25.69
14.66
18.50
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Criteria 3 Legal/Regulatory Characteristics Index of Economic Freedom, 2010 Regulatory Quality, 2009 2010 Index of Economic Freedom Score higher number stands for higher quality higher number stands for better stability Percentage Percentage US Dollar 78.00 80.40 76.50 50.30 63.80
1.36
1.64
1.54
-0.46
0.31
Rule of Law Indicator 2009 Criteria 4 Economic characteristics Inflation rate Unemployme nt rate GDP per Capita Criteria 5 Availability, cost and quality of physical Infrastructure Roadways Merchant Marine Time to import Cost to import Criteria 6 Competitive barriers
1.53
1.78
1.71
-0.77
0.12
-0.30 9.30 46000.00
0.30 8.30 38200.00
2.20 7.60 34800.00
11.70 8.40 15100.00
6.30 14.10 11400.0 0 352046. 00 18.00
km country rank compared to the rest of the world days US $ per container
6506204. 00 26.00
1042300. 00 36.00
394428.0 0 22.00
940000.0 0 11.00
5.00 1315.00
11.00 1660.00
8.00 1160.00
36.00 1850.00
15.00 1063.00
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The Global Competitiven ess Index The Financial Development Index The Global Enabling Trade Index Criteria 7 Commercial Infrastructure Commercial bank prime lending rate Internet Users Percentage country rank compared to the rest of the world km per million people 3.25 2.40 0.63 15.31 NA
Rank(20102011) Rank 2009
4.00
10.00
12.00
63.00
61.00
3.00
6.00
1.00
40.00
44.00
Rank 2010
19.00
8.00
17.00
114.00
62.00
2.00
13.00
7.00
8.00
15.00
Paved road density Criteria 8 Product/Service specifc market potential Consumer Expenditure, 2009 Global Imports,2007 % of Leather Items over Total Gl obal Imports Import Growth in Leather
14240.27
12410.71
6454.06
5384.13
4077.19
US$ million Market Value in US$ millions % Growth Trend (%5yr)
9823273. 03 1754513. 00
776929.3 1 333777.0 0
1339795. 24 526544.0 0
654947.1 0 128778.0 0
460871. 33 77074.0 0
0.26 4.34
0.10 36.41
0.20 42.50
0.52 137.51
0.06 279.00
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Items
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7. Bibliography
[Bangladesh Bank, 2010] Bangladesh Bank exchange rates of Taka, Oct 2010, Retrieved from http://www.bangladesh-bank.org/econdata/exchangerate.php [Bangladeshi Banks] Bangladeshi Banks in Canada, Retrieved from http://www.bangladesh-bank.org/savefac/drawingpart1.html [Bank Act1970] Bank Secrecy Act, 1970, USA, http://www.fincen.gov/statutes_regs/bsa/ [Bank Bangladesh 2010] Banking Sector in Bangladesh, 2010, Retrieved from http://www.asiatradehub.com/bangladesh/banks.asp [Bank of Canada 2010] Bank of Canada, Intervention in the Foreign Exchange Market, 2010, Retrieved from http://www.bankofcanada.ca/en/backgrounders/bge2.html [BD Embassy USA] Bangladesh Embassy in USA, Economic Wing, Retrieved from http://www.bdembassyusa.org/EconomicWing.asp [Canada Balance of Trade] Trade Balance in Canada, Retrieved from http://www.tradingeconomics.com/Economics/Balance-of-Trade.aspx?Symbol=CAD [Canada Bangladesh 2010] Government of Canada, Canada Bangladesh Relations, Retrieved from http://www.canadainternational.gc.ca/bangladesh/bilateral_relations_bilaterales/ind ex.aspx?lang=eng&menu_id=19&menu=L [CANSIM 2010] Statistics Canada, Canadian International Merchandise Trade Database , Retrieved from http://cansim2.statcan.gc.ca/cgi-win/cnsmcgi.pgm [Census 2010] US Census Bureau, Trade in Goods (Imports, Exports and Trade Balance) with Bangladesh, August 2010, Retrieved from http://www.census.gov/foreign-trade/balance/c5380.html
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Fatema Zabeen Chowdhury [CIA Bangladesh 2010] CIA world fact book, Country: Bangladesh, (Oct 2010), Retrieved from https://www.cia.gov/library/publications/the-worldfactbook/geos/bg.html [CIA Canada, 2010] CIA world fact book, Country: Canada, (Oct 2010), Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/ca.html [CIA USA, 2010] CIA world fact book, Country: USA, (Oct 2010), Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/us.html [Country Canada]Country: Canada, Retrieved from http://en.wikipedia.org/wiki/Canada [Country USA] Country: USA, Retrieved from http://en.wikipedia.org/wiki/United_States [Daily Times Pakistan 2009] China, India, Bdesh capturing Pakistan leather export market, Wednesday, June 10, 2009, retrieved from http://www.dailytimes.com.pk/default.asp?page=2009\06\10\story_10-62009_pg5_10 [DataMonitor Canada] DataMonitor Industry Profile, Apparel Retail in Canada, Reference Code: 0070-2005, Publication Date: May 2010 [Datamonitor Leather Canada] Datamonitor, Luggage & Leather Goods in Canada, Reference Code: 0070-0537, Publication Date: June 2010 [Datamonitor USA] DataMonitor Industry Profile, Apparel, Accessories & Luxury Goods in the United States, Reference Code: 0072-2006, Publication Date: June 2010 [Demand Canada] Demand for leather products in Canada , Retrieved from http://books.google.ca/books? id=FD_kNBCzV7MC&pg=PA111&lpg=PA111&dq=Demand+for+leather+products+i n+Canada&source=bl&ots=tHxfXfRL3p&sig=8MITYQxZ9NRpC4PYinp6_rQY5sE&hl= en&ei=FcLQTJyoKJLEsAOE0py7Cw&sa=X&oi=book_result&ct=result&resnum=8&ve d=0CDMQ6AEwBzgK#v=onepage&q=Demand%20for%20leather%20products %20in%20Canada&f=false Page 58 of 63
Fatema Zabeen Chowdhury [Demand USA] Demand for leather products in USA http://www.prweb.com/releases/leather_tanning/leather_production/prweb3767084. htm [Doing Business Canada 2010] Doing Business 2010 data for the Canada, Retrieved from http://doingbusiness.org/data/exploreeconomies/canada#trading-acrossborders [Doing Business USA 2010] Doing Business 2010 data for the United States, Retrieved from http://doingbusiness.org/data/exploreeconomies/unitedstates#trading-across-borders [Euromonitor Canada 2010] Euromonitor factfile on Canada, 2010, Retrieved from http://www.euromonitor.com/factfile.aspx?country=CA [Euromonitor USA 2010] Euromonitor factfile on USA, 2010, Retrieved from http://www.euromonitor.com/factfile.aspx?country=US [Exim India] http://www.eximbankindia.com/leather.pdf [FahsionNet 2010] Fashion Net Asia, Bangladesh: Leather exports up 50%, 14 Oct 2010, http://www.fashionnetasia.com/en/DailyHeadline/1964/Bangladesh_Leather_exports _up_50_.html [Farhan 2010] Barbara Farfan, 2010 Retail Store Closings: U.S. Retailers Downsizing or Going Out of Business, Retail Chains Closing or Liquidating Sites - Complete, Updated, and Ongoing List, 2010, Retrived from http://retailindustry.about.com/od/storeclosingsandopenings/a/Store_Closings_list_2 010_us_retail_chains.htm [FDIC, 2010] Federal Deposit Insurance Corporation (FDIC), Key Statistics, 2010, Retrieved from http://www2.fdic.gov/idasp/ [Fed USA, 2010] Federal Reserve Bank of New York, USA, U.S. Foreign Exchange Intervention, Retrieved from http://www.ny.frb.org/aboutthefed/fedpoint/fed44.html
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Fatema Zabeen Chowdhury [Financial 2010] The Office of the Superintendent of Financial Institutions Canada (OSFI), `Who We Regulate`, Retrieved from http://www.osfibsif.gc.ca/osfi/index_e.aspx?DetailID=568 [GDP 2010] GDP trend, 2010, Retrieved from http://data.worldbank.org/indicator/NY.GDP.MKTP.CD/countries/1W?display=default [Holiday 2010] Holiday Spending, http://www.godweb.org/holidayspending.htm [IBISWorld 2010] IBISWorld Industry Reports, Public Storage & Warehousing, U.S. Industry Report, Sep 08 2010, Retrieved from http://www.ibisworld.com/industry/default.aspx?indid=1224 [INCOTERMS] International Commercial Terms (INCOTERMS), http://www.export911.com/e911/export/comTerm.htm [Int Trade USA] International trade and investment policy in USA, Retrieved from http://www.epa.gov/international/trade/uspolicy.html [Invest 2010] Foreign direct investment (FDI), Invest in America, 2010, http://www.investamerica.gov/home/index.asp [Invest Canada 2010] Invest in Canada, Retrieved from http://investincanada.gc.ca/eng/advantage-canada/tax-advantage.aspx [Leather bag] Leather bag for laptops, http://www.leather-briefcases.com/ [Leather Exports 2010] 2010 Situation Analysis For Leather Exports, http://www.articlesbase.com/marketing-articles/2010-situation-analysis-for-leatherexports-2159822.html [Leather India 2008] http://www.leatherindia.org/leather-goods.asp [Leather Sector GTZ] Leather-Sector-VC-Assessment-GTZ-Progress, Bangladesh, retrieved from http://www.scribd.com/doc/28847920/Leather-Sector-VCAssessment-GTZ-Progress
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Fatema Zabeen Chowdhury [Male-Female US] Malefemale income disparity in the United States, retrieved from http://en.wikipedia.org/wiki/Male %E2%80%93female_income_disparity_in_the_United_States [Miller 2008] Jeff Miller, A Guide to U.S. Incentives and Credits for Foreign Investors, Incentis Group, Jul 2008, Retrieved from http://www.locationusa.com/UnitedStatesDirectInvestmentIncentives/jul08/USincentives-credits-foreign-investors.shtml [Mod Leather] Modification of leather products Retrieved from http://www.industrysourcing.com/china/make_art.asp?id=28444 [Moriarty 2010] James F. Moriarty, US Ambassador in Bangladesh, Speeches and Remarks, 19th Annual U.S. Trade Show, February 2010, Retrieved from http://dhaka.usembassy.gov/18_feb_10_moriarty_remarks_19ustradeshow_opening. html [NAFTA] NAFTA, North American Free Trade Agreement, Retrieved from http://en.wikipedia.org/wiki/North_American_Free_Trade_Agreement [NAICS 2008] Establishments Transportation and Warehousing (NAICS 48-49), Canadian Industry Statistics (CIS), Industry Canada, December 2008, Retrieved from http://www.ic.gc.ca/cis-sic/cis-sic.nsf/IDE/cis-sic48-49etbe.html [Patriotic Act 2001] USA PATRIOT Act, 2001, Retrieved from http://www.fincen.gov/statutes_regs/patriot/index.html [Politics USA] Politics of the USA, Retrieved from http://en.wikipedia.org/wiki/Politics_of_the_United_States [Saxena 2010] Saxena, Sanchita; U.S. Trade Policy Toward Bangladesh, August 11, 2010, Retrieved from http://www.wilsoncenter.org/index.cfm? fuseaction=news.item&news_id=631487 [Shipping vehicles, 2010] Shipping vehicles, containers, residential goods to Dhaka, Bangladesh, Retrieved from http://bangladesh.shippinginternational.com/rates/dhaka/
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Fatema Zabeen Chowdhury [SICE] http://www.sice.oas.org/ctyindex/USA/USAagreements_e.asp [Sonali] Sonali Exchange Co. Inc., Bangladesh, Retrieved from http://www.sonaliexchange.com/aboutus.html [Statcan 2010] Statistics Canada, Retail store sales by selected commodity, 2nd quarter, 2010, http://www40.statcan.gc.ca/l01/cst01/trad53-eng.htm [StatsCAN 2008] Table 4-1: Average expenditure per household, Canada, provinces and territories, recent years Canada, http://www.statcan.gc.ca/pub/62-202x/2007000/t002-eng.htm [Suite 101] Christmas Spending Is Down: North Americans Less Likely to Spend Money During Holidays, retrieved from http://www.suite101.com/content/christmasspending-is-down-in-2009-a177629#ixzz14KYmKhtN [Today Zaman 2010] Todays Zaman 2010, http://todayszaman.com/tz-web/news225772-turkeys-leather-exports-expected-to-near-15-billion.html [Trade Econ] Trade in Economics, Retrieved from http://www.tradingeconomics.com/economics/balance-of-trade.aspx?symbol=usd [Trans Ware Canada] Establishments Transportation and Warehousing (NAICS 4849), Canadian Industry Statistics (CIS), Industry Canada, December 2008, Retrieved from http://www.ic.gc.ca/cis-sic/cis-sic.nsf/IDE/cis-sic48-49etbe.html [US Consumer 2010] US Consumer Unit Expenditure, October 2010, Retrieved from http://www.visualeconomics.com/how-the-average-us-consumer-spends-theirpaycheck/ [US Embassy Germany] US Embassy Germany, Retrieved from http://usa.usembassy.de/economy-trade.htm [US State] http://www.state.gov/e/eeb/tpp/ [USA Climate] USA Climate, 2010, Retrieved from http://www.path2usa.com/usainfo/usa/usa_climate.htm
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Fatema Zabeen Chowdhury [USA Leather] USA Leather Importers, http://importer.alibaba.com/usa-leatherimporter.html [USA Today 2010] USA Today, Bank of America will cut mortgage loan amount for underwater homes, http://www.usatoday.com/money/economy/housing/2010-03-24bank-of-america-mortgage-cuts_N.htm [VAT, USA] Value Added Tax (VAT), USA, Retrieved from http://en.wikipedia.org/wiki/Value_added_tax#United_States [WorldBank 2010] WorldBank data on countries, 2010, retrieved from http://info.worldbank.org/governance/wgi/pdf/wgidataset.xls [WorldBank Gov 2010] http://info.worldbank.org/governance/wgi/index.asp
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International Market Research for Leather Products from Bangladesh

Fatema Zabeen Chowdhury

Fatema Zabeen Chowdhury

Fatema Zabeen Chowdhury

3. Country Analysis (USA)

Fatema Zabeen Chowdhury

3.2 Political Characteristics and Governance

3.3 Physical and Commercial Infrastructure

3.4 Source country (Bangladesh) experience in the target country (USA)

Fatema Zabeen Chowdhury

3.5 Target market profiles (USA)

3.6 Product/ Service fit

3.7 Market Characteristics

Fatema Zabeen Chowdhury

Fatema Zabeen Chowdhury

Fatema Zabeen Chowdhury

3.8 Competition and Competitive Barriers

Fatema Zabeen Chowdhury

4. Country Analysis (CANADA)

Fatema Zabeen Chowdhury

Fatema Zabeen Chowdhury

4.2 Political Characteristics and Governance

4.3 Physical and Commercial Infrastructure

4.4 Source country (Bangladesh) experience in the target country (CANADA)

4.5 Target market profiles (CANADA)

4.6 Product/ Service fit

Fatema Zabeen Chowdhury

4.7 Market Characteristics

Fatema Zabeen Chowdhury

Fatema Zabeen Chowdhury

4.8 Competition and Competitive Barriers

Fatema Zabeen Chowdhury

5.2. Entry strategies

5.3. Product development strategies

5.4. Product delivery strategies (Distribution)

5.5. Pricing strategy

Estimated Shipping cost Total cost after exporting

Tk. 10 Tk. 470 = US $ 7.0

5.6. Marketing communication strategies

Fatema Zabeen Chowdhury

6. Appendix: Country Attractive Analysis

TURKEY Ra tin g Asse (1- ssme 5) nt

0.08 0.15 0.04

0.03 0.06 0.08

0.1 0.06 0.04

Fatema Zabeen Chowdhury

0.1 0.12 0.1 0.09

0.08 0.15 0.06 0.06

0.04 0.09 0.08 0.12

0.06 0.03 0.02 0.03

0.02 0.06 0.04 0.15

Fatema Zabeen Chowdhury

Fatema Zabeen Chowdhury

-0.30 9.30 46000.00

0.30 8.30 38200.00

2.20 7.60 34800.00

11.70 8.40 15100.00

6.30 14.10 11400.0 0 352046. 00 18.00

Fatema Zabeen Chowdhury

Rank(20102011) Rank 2009

US$ million Market Value in US$ millions % Growth Trend (%5yr)

Fatema Zabeen Chowdhury

Fatema Zabeen Chowdhury