Introduction

Bata Ltd. is a privately owned global shoe manufacturer and retailer headquartered in

Ontario, Canada. The company is led by a third generation of the Bata family. With

operations in 68 countries, Bata is organized into four business units. Bata Canada, based in

Toronto, serves the Canadian market with 250 stores. Based in Paris, Bata Europe serves the

European market with 500 stores. With supervision located in Singapore, Bata International

boasts 3,000 stores to serve markets in Africa, the Pacific, and Asia, Finally, Bata Latin

America, operating out of Mexico City, sells footwear throughout Latin America. All told,

Bata owns more than 4,700 retail stores and 46 production facilities. Total employment for

the company exceeds 50,000.

Company Founded in 1894

The Bata family's ties to shoemaking span more than two dozen generations and purportedly

date as far back as 1580 to the small Czech village of Zlin. However, it was not until 1894

that the family began to make the transition from cobblers to industrialists. In that year,

Tomas G. Bata, Sr., along with his brother Antonin and sister Anna, took 800 florins, some

$350, inherited from their mother and launched a shoemaking business. They rented a pair of

rooms, acquired two sewing machines on an installment plan, and paid for their leather and

other materials with promissory notes. They produced stitched, coarse-woolen footwear.

Within a year, the business was successful enough to enable the Batas to employ ten people

in their factory, such as it was, as well as another forty who worked out of their own homes.

In the same year, 1895, Antonin was drafted into the military and Anna quit the business to

get married, forcing Tomas to assume complete control of the venture. He was just 19 years

old.

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In 1900, Bata moved the operation to a new building located close to Zlin's railway station

and took the first major step in industrialization, installing steam-driven machines. The

company enjoyed success producing light, linen footwear that appealed to a large portion of

the population, who could not afford better-made leather shoes. Nevertheless, Bata came

close to bankruptcy on more than one occasion and concluded that in order for his business to

survive he needed to find more efficient ways to manufacture and distribute shoes. In 1904,

he and three employees took a trip to the United States to learn firsthand the ways of mass

production. Bata spent six months working as a laborer on a shoe assembly line in New

England. On his way back to Zlin, he also took time to visit English and German factories.

Upon his return home, Bata began to transform the family shoe business, not only by

applying the latest production techniques—which would one day earned him the moniker,

"the Henry Ford of the shoe industry"—but also by finding a way to preserve the role of

workers, which all too often changed dramatically during the transition from an artisan to an

industrial approach to commerce.

The Bata shoe business began to experience steady growth, so that by 1912 it was employing

600 full-time workers plus another few hundred who worked out of their homes in

neighboring villages. Tomas Bata now began to exhibit another side to his personality, the

social idealist. Because there was a shortage of housing in Zlin for his new workers, he

constructed new homes, which he rented at cost. He also offered inexpensive meals in factory

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cafeterias and free medical care. He even built a new hospital to care for his workers.

However, as soon as they began to earn higher incomes, area merchants raised prices. In

answer, Tomas Bata opened his own less-expensive company stores to ensure that his

employees were able to enjoy the fruits of their success. He also took steps to identify

management talent among the ranks of his workers and instituted a training program that was

ahead of its time.

World War I Boot Contract a Turning Point

Bata received a major boost in 1914, following the outbreak of World War I, when the

company received a contract to produce boots for the Austro-Hungarian army. From the

waste of these items, the company produced the uppers to a wooden shoe that it sold to the

lower classes. Tomas Bata then invested the profits in new machinery, as well as in the

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opening of new retail shops, so that the business was well positioned to take advantage of the

economic boom of the 1920s. Before the company could enjoy this strong period of growth,

however, Tomas Bata and his employees were forced to take a major gamble together. In the

years immediately following the end of World War I in 1918, an economic slump prevailed

across the globe, leading to significant unemployment. Czechoslovakia, formed as part of the

peace settlement of World War I, attempted to fight inflation, which had already devastated

Germany, by adopting tight monetary controls. As a result, the country's currency lost three-

quarters of its value, which in turn led to a drop in demand for products, a cutback in

production, more unemployment, and even less consumer demand—developments that

together threatened national economic devastation. In August 1922, a group of industrialists

met to discuss their plight. Unlike the others, Tomas Bata did not simply throw up his hands

and blame the government. Instead, he called on the industrialists to take decisive steps to

stimulate market demand, and he shocked everyone by announcing that he was going to cut

the price of Bata shoes in half. Once the surprise of the moment wore off, Bata's audience

simply laughed at him.

Bata was able, however, to convince his workers that he had a plan, albeit a radical one, that

would work. He believed that the company had to cut costs to the bone and work at peak

efficiency in order to halve the price of Bata shoes. Workers, ignoring their union leadership,

accepted a 40 percent reduction in wages across the board. Tomas Bata, in turn, provided

food, clothing, and other necessities at half-price to mitigate the loss of wages. In addition, he

introduced measures that were pioneering, including the creation of individual profit centers

and incentive payments to both management and workers to spur productivity. With his

operations lean and efficient, he then launched a national advertising campaign. The response

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from consumers was swift and dramatic, as Bata stores, which had been virtually empty for

months, were now swamped with customers looking for inexpensive shoes. Bata was forced

to increase production, and not only did the company maintain full employment, it began to

hire. The decision to cut prices proved to be a turning point in the history of the company,

which now grew at a tremendous pace.

Tomas Bata continued to innovate, improving on productivity primarily through the

introduction of an assembly line approach. After five years, productivity improved 15-fold;

after ten, the retail price of Bata shoes dropped by 82 percent. The employees' faith in Tomas

Bata was also rewarded. After accepting a severe wage cut in 1922, by 1932 they had seen

their salaries doubled. They were now working for the largest shoemaker in the world.

According to company lore, in fact, in some developing countries "bata" gained currency

where there was no word for "shoe." Moreover, Bata became involved in a variety of other

industries, including socks, leatherwork, chemicals used in leather making, shoemaking

machinery, wooden packing crates, tires and other rubber goods. The company launched its

own film studio to produced advertising materials, and it soon evolved into a full-fledged

enterprise that produced some of the earliest animated films. Because of the company's

involvement in transportation, as Bata became the world's largest exporter of shoes, Tomas

Bata even became involved in the manufacture of airplanes through the Zlin Air Company,

which produced both sporting and business planes. He also became famous for housing his

headquarters in the tallest reinforced concrete office building in Europe, which featured an

elevator that housed his "floating office." With a push of a button, Bata was able to confer,

and keep an eye on, his employees on every floor without leaving his desk.

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Bata established operations in new markets, such as Singapore in 1930. The company, which

in 1931 adopted a joint stock company form of organization, also established subsidiaries and

shoe factories in a number of European countries as a way to circumvent tariffs that had been

imposed in response to a worldwide economic depression. In mid-1932, Tomas Bata called

together his team of executives and announced that in order for the company to weather

increasingly difficult economic conditions and drive further growth, they would have to look

to more distant markets, in particular North America. Just two days later, however, Tomas

Bata was killed when an airplane he was in took off in a thick fog and crashed into a chimney

of one of his buildings. He was 56 years old.

BACKGROUND/HISTORY OF BATA SHOE CO. BD. LTD.BACKGROUND/HISTORY OF BATA SHOE CO. BD. LTD.

The business that became the Bata Shoe Organization was established on August 24, 1894 in

Zlin, Czechoslovakia by Tomas Bata, and included his brother Antonin and sister Anna.

Although this business was new, the Bata name had been part of a tradition of shoemaking

for eight generations, spanning three hundred years. It was one of the first modern-day shoe

'manufacturers', a team of stitchers and shoemakers creating footwear not just for the local

town, but also for distant retail merchants. This departure from the centuries-old tradition of

the one-man cobbler's workshop was a brand new concept, creating an entirely new industry.

The Bata enterprise revolutionized the treatment of employees and labor conditions. Tomas

consistently maintained a human focus, creating opportunities for development and

advancement, and added compensation for employees based on achievement. As the

enterprise prospered, so did the communities where it operated. Tomas believed that a focus

on people and public service was critical for business success. The enterprise built housing,

schools and a hospital near the shoemaking plant in Zlin. It provided food and inexpensive

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rent during very difficult times. Bata companies later provided rail services, construction,

insurance, publishing and a tannery in Zlin.

"The Bata System" devised by the Zlin team, and later applied in other Bata Shoe

Organization companies, organized operations into autonomous workshops and departments

("profit centre"), allowing employees to contribute ideas and stimulate production, and

contributed significant breakthroughs in footwear technology. By 1938 Bata Shoe

Organization had established a unique and widespread presence, designing, producing and

marketing footwear in more than 30 countries. The Bata Shoe Organization regarded itself as

a 'Multi-Domestic' rather than multinational enterprise, making it a priority to contribute to

the economy in any new markets it entered.

During the 50s, 60s and 70s the Organization redoubled its focus on retailing excellence,

international footwear branding, advanced manufacturing techniques and extensive employee

training, another Bata tradition that dated back to the Organization's earliest years. The

Organization continued to expand its retail operations, production facilities and moved into

new countries of operation. Thomas J. Bata, and son Thomas G. Bata, continued to lead the

Organization with the traditional philosophy ensuring that each operation focused on

customer satisfaction. As the world-manufacturing base for footwear shifted to developing

countries. New business strategies have been guided by the founding principles of focusing

on customers, marketing and employees. Branded products, innovative retail store concepts,

lifestyle merchandising, non-footwear products and participative retailing have been

introduced. In 1992, the Organization and family were invited to return to the Czech

Republic, where Bata had remained a symbol of national pride and achievement.

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BATA TODAYBATA TODAY

Bata is one of the world’s widest reaching companies, with operations in 68 different

countries. 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. Bata operating companies are grouped into

four business units based on similarities in markets and business issues. Each group benefits

from synergies specific to their requirements, such as product development, sourcing and

marketing support. Each business unit is entrepreneurial in nature, and can quickly adapt to

changes in the marketplace and seize potential growth opportunities. Gone are the days

when consumers were least bothered about their footwear and wore whatever was

offered to them how they need a strong and sustainable brand which can offer sound

tangible benefits, a footwear which is durable, comfortable as well as stylish which

can enhance their looks.

India is a country, which has always appreciated a naval ideal and a naval

product. When woodland and Mescos ventured into the Indian market they would

have not anticipated that their product would be so readily accepted by the Indian

consumers, in spite of being targeted at a premium price, people accepted it because it

was not only a new thing but also offered value for their money. Seeing the success of

this footwear MNC’s like as Nike, Reebok, and Adidas did not wait for the second

call and with their regular promotional activities the message was clearly penetrated

in the mind of the consumers about the benefits of the brand. In spite of being highly

priced, these companies are doing well in the Indian market, for that is Nike; Nike is

constantly creating new niches and protecting niches by the designing shoes for

different sports activities. After creating marketing for a particular niche they expand

the niche by designing different versions.

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MARKETING STRATERGIES OF BATA SHOE CO. (BD) LTD.MARKETING STRATERGIES OF BATA SHOE CO. (BD) LTD.

Within a given environment, marketing strategy deals with the interplay of three forces

known as the strategic three C's: the customer, the competition and the corporation. Based on

interplay of the strategic three Cs, formation of marketing strategy requires the following

three decisions:

1. Where to compete: It requires a definition of the market (e.g. competition across

an entire market or in one or more segments).

2. How to compete: It requires a means for competing (e.g. introducing a new

product to meet a customer need or establishing a new position for an existing

product).

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3. When to compete: It requires timing of market entry (e.g. being first in the market

or waiting until primary demand is established).

Thus Marketing strategy, in terms of these three key constituents, is defined as an endeavor

by a corporation to differentiate itself positively from its competitors, using its relative

strengths to better satisfy customer needs in a given environmental setting.

MARKETING PRESENCE POSITION OF BATA SHOE CO. (BD) LTD.MARKETING PRESENCE POSITION OF BATA SHOE CO. (BD) LTD.

Bata Bangladesh is the largest player in the footwear industry with around 9-10% volume

share and a 60% market-share in the organized segment. BB (Bata Bangladesh) has a market

share of 70% in canvas shoes segment while it has a share of 60% in leather shoes. BB

manufactures about 10% of the total Hawaii’s sold in the country. BB competes in

manufacturing low priced Hawaii’s with the unorganized sector with its price ranging from

Taka35-Taka110 with unorganized sector's pricing in the range of Taka25-Taka50.

Leading competitor in the popular segment of the organized market Apex Shoes. Other

organized sector players are liberty shoes, Baly Shoes, Woodland, Pagasus. Most global

players like Adidas India, Reebok, Nike, etc are operating through their Bangladeshi

subsidiaries with main focus on premium sports shoes segment, which has an insignificant

volume share. Competition is hotting up in the domestic market due to popular brands such

as Gaitonde, Red Tape, and Lotus Bawa in the illegal and smuggling of these shoes. These

brands are gaining market share especially in the premium segment.

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MARKET PRESENCEMARKET PRESENCE

School shoes of Bata:School shoes of Bata:

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. Which quickly earn

recognition among the parents of that time, as they need a durable shoe that really can last

even after lots of rough treatment. From there on Bata gone on to make Canvas shoes, other

black leather shoes, hard top white sneakers for school goers. The most popular brand of

school shoes that are now in the market are NorthStar which provides hard and soft white

sneakers and the leather black Bata school shoes which are of various designs.

Power:Power:

This is a reasonable priced good quality sports shoes and sandle shoes for young male and

female. The target segment of Power is teenagers and some parts of the elderly people who

need sneaker for walking purpose. The price range starts from 695/- and in many cases not

exceed more than thousand taka. According to the buying power this price range is very

popular with the general public as durability comes with it as with every Bata footwear

BATA LEADERSHIP POINTSBATA LEADERSHIP POINTS

Bata operates in many different economic and cultural environments around the world,

dictating very different types of operations. Although Bata does not sell the same shoes nor

does it have identical stores in each country, customers will recognize common elements to

the Bata experience everywhere in the world. These common elements are the Bata

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Leadership Points:-

The best productThe best product

Bata companies offer our customers fresh, fashionable footwear and accessories, designed

specifically for the needs of the local market. Our shoes are always well made from quality

materials.

The best serviceThe best service

Whether in India or Italy, our sales associates offer consistently first-class service. They are

well trained to ensure a proper fit, and we pledge customer satisfaction.

The best value and qualityThe best value and quality

Through the efficient sourcing and distribution of Bata products, we can control the cost and

quality at every step to ensure value to our customers.

The best locationsThe best locations

Bata stores are modern, attractive and located conveniently to our customers. Bata companies

utilize innovative promotions and displays to display our products in attractive manner.

Bata limited is the largest footwear company in the Asia and always analyses the

market potentiality and consumers perception and to offer them the product of their

need, wants and demands and satisfy them to the fullest.

The study is conducted to analyses the market potentiality and consumer

perception of the Bata foot wear in Shimoga among its competitive and the brand

standing of Bata in Shimoga city.

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ORGANIZATION COMPANY PROFILE OF BATA SHOE COMPANYORGANIZATION COMPANY PROFILE OF BATA SHOE COMPANY

(BD) LTD.(BD) LTD.

Mission:Mission:

Introduction of a strong shoe line targeted to various market segments to maintain leadership

through increased market share.

Vision:Vision:

To provide good quality shoes at an affordable price. By keeping in mind the comfort that

needs to be there and providing new designs with it. Objectives:Objectives:

Achievement of 100% estimated business in each category

Maintain a shoe line with 700 lines of which 200, 300, 150 & 50 lines for Men,

Women Children & Plastic respectively.

Introduction of a shoe line as per life style as well as fashion trend.

Achieve an average 55% margin in each category

Innovate ideas or system for better management of merchandise distribution by

maintaining 4 times stock turn.

SStrategies:trategies:

Penetration to new & targeted market segments through introduction of shoe lines as

per life styles with supportive promotion activities

Defined number of lines, assortment & quantity for each store according to

merchandise classification & store profile in order to increase efficiency in

distribution.

Identification of loopholes in cost structure to increase production efficiency.

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Detail analysis of price points of entire shoe line in order to achieve maximum

margin.

Detail analysis of departmental work flow & bringing necessary changes for

efficiency better coordination with other departments.

MISSION AND VISION OF BATAMISSION AND VISION OF BATA

Mission:Mission:

Introduction of a strong shoe line targeted to various market segments to maintain leadership

through increased market share.

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Vision:Vision:

To provide good quality shoes at an affordable price. By keeping in mind the comfort that

needs to be there and providing new designs with it.

Objectives:Objectives:

Achievement of 100% estimated business in each category

Maintain a shoe line with 700 lines of which 200, 300, 150 & 50 lines for Men,

Women Children & Plastic respectively.

Introduction of a shoe line as per life style as well as fashion trend.

Achieve an average 55% margin in each category

Innovate ideas or system for better management of merchandise distribution by

maintaining 4 times stock turn.

SStrategies:trategies:

Penetration to new & targeted market segments through introduction of shoe lines as

per life styles with supportive promotion activities

Defined number of lines, assortment & quantity for each store according to

merchandise classification & store profile in order to increase efficiency in

distribution.

Identification of loopholes in cost structure to increase production efficiency.

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Detail analysis of price points of entire shoe line in order to achieve maximum

margin.

Detail analysis of departmental work flow & bringing necessary changes for

efficiency better coordination with other departments.

SWOT ANALYSIS OF BATA SHOE CO. (BD) LTD.SWOT ANALYSIS OF BATA SHOE CO. (BD) LTD.

Strengths:Strengths:

Image of the company

Quality Product

Differentiated line of products

Competitive Pricing

Strong distribution channel

Modern manufacturing facilities

Brand loyalty at mass level

Weaknesses: Weaknesses:

Insufficient promotional activities

Bata at present conducts all the store management activity manually. This

results lots of lengthy paper works, errors & waste of time.

Inability to catch the present trend in time

Less competitive price due to high cost structure.

VAT & tax barrier

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Opportunities:Opportunities:

Despite political turbulence a segment of our middle-class is coming up with

reasonable buying power. Many of them are women who are decision maker

so the city store concept of Bata can attract them as whole of the family

footwear can be available there.

Consumer like differentiated products. They like to shop in a store where they

serve the whole family.

More competition results in more campaign for products.

Business Expansion in Shoe care products

Utilize outsourcing especially the synergy sources to achieve competitive

pricing

Franchisee opportunity with global brands like Nike, Reebok, Hush Puppy

Market expansion opportunity in high fashion & value for money footwear

market for all categories of shoes through Retail & WCSM channels

Threat:Threat:

Political instability affects the supply of raw materials and distribution of

finished products.

Uncontrolled counterfeit of Bata products

New companies like Apex, Homeland, Pagasus of Bangladesh and the foreign companies

like Nike, Reebok, Addidas are already in the market with good quality product. Have to

keep up with them respect of quality. Smuggelling of shoes and many stores in the city like

the one’s in elephant road are the major market leaders. As they don’t have to pay for large

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amount of money for establishment, production, quality and advertising so they can sell at a

much lower price than established brands like Bata.

Rapid market expansion program by organized competitors like APEX.

SOCIAL AND CULTURAL FACTORSSOCIAL AND CULTURAL FACTORS

People's lifestyle is changing with the increase in disposable income and more and more

people are becoming quality and fashion conscious. Since people travel more and more they

know what the other Bata store offers to them elsewhere. So Bata Bangladesh must have to

come out of their old styling and store design to suit with more modern fashion. Social and

cultural indicators are positive signal for the future prospects of the company.

TECHNOLOGICAL FACTORSTECHNOLOGICAL FACTORS

Due to vast improvements in the information technology systems, 'Internet' has posed itself

to be new media to reach the consumers. Realizing the need and the opportunity Bata

Bangladesh has already set a state of the art facility in Dhamrai. All the leather products that

they made here in Bangladesh are made there. They provide new forms of technological

improvement where MIS department monitor their whole operation. The POS system in the

wholesale depot is also a positive step towards good use of technology in the survival and

competition in today’s business.

POLITICAL AND LEGAL FACTORSPOLITICAL AND LEGAL FACTORS

In Bangladesh, political turmoil like hartal, strikes etc. are a serious barrier in the smooth

functioning of a company. However, Bata Bangladesh is able to take some positive outputs

from political factors. As they are 100% taxpayers to Bangladesh government, they must able

to make understand the politicians the importance of FDI in the country. Therefore, Bata

Bangladesh can get some benefit from political factor as well.

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INTERNAL ANALYSISINTERNAL ANALYSIS

Target MarketTarget Market:: lower to middle income group as well as the upper segment.

Basis of SegmentationBasis of Segmentation:: There are two different criteria used in order to segment the market.

Thus Bata Shoe Organization divides the market “geographically” as well as on the basis of

“product type” (therapeutic group).

Retail marketing managerRetail marketing manager: : As retail is the highest contributor of the companies business.

Retail marketing manager is responsible for planning, advertising as well as the whole of the

retail operation around the country. He also deals with the governmental regulation in respect

of price, stability, license, fees etc. for launching new products. It is his responsibility to take

initiative to pass all the necessary documents from the regulation board of government. For

this reason this post-ranked third in the hierarchy of the companies’ organ gram in

Bangladesh.

Wholesale marketing managerWholesale marketing manager:: The functional objective of the wholesale marketing

manager is to monitor and planning of wholesale market operation of Bata Bangladesh,

which also is a very important sales channel of the company.

Merchandising managerMerchandising manager:: In charge of the heart of the company the Merchandising

department. Who reports to the CFO and managing director directly and to some instance to

the sales channels especially to Retail. All the categories of shoes are headed by the

Merchandising officer/Category Merchandiser/Buyer who is in charge of every detail of

his/her category. He/she is responsible for his category business, choosing the right

merchandise according to the market need, distribute it properly and getting the feedback of

the performance of his/her merchandise in the market and plan accordingly. He/she on the

other hand repots to the Merchandising manager. There are basically four categories in Bata

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Bangladesh of which a merchandiser who is basically the head of the category has a

distributor, who is responsible of distribution of the merchandise to the right place at the right

time and the right amount. A designer also under the category merchandiser who is

responsible for designing new shoes according to the market needs and the advise of the

merchandising officer.

Production DepartmentProduction Department: : Production division is aimed to increase productivity and quality as

much as required without spending more. There are two plant managers on in Tongi and

other in Dhamrai. They are controlled by the director of production. They are responsible for

directing, coordinating and controlling the overall production activities means from the

purchasing raw materials to transferring those into complete shoes. The function of

production manager is to assist the director of production in achieving the production target

for a specified period. The function of planning and supply manager is material planning,

production planning etc.

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