AcknowledgementsFirst of all we would like to thank the almighty Allah because of successful completion of this assignment. We would like to thank our honorable Teacher Shaiful Islam sir, for providing us with the opportunity to work on project and gain a real life experience. We also thank all our group members & friends who inspired us & helped us tobuild confidence and put us in a deep concentration to carry on our course workand supported us at the end with great excellence. We lastly would like to express our appreciation to our International Islamic University Chittagong (Dhaka Campus) and we are eventually grateful to the University and its excellence that works foreducation encourages us and creates knowledge, as knowledge is power.

IntroductionWalton Hi-Tech Industries Ltd. is the one and only manufacturer of multi-staged Refrigerator, Freezer, Air Conditioner, Television and Motorcycle technology and is treated as one of the sophisticated manufacturing plant in Bangladesh and South Asia. R.B. Group (Parent Company) is one of the top business groups in the country operating with a great reputation since 1977. Walton has become a sensation all over Bangladesh and in the world of electronics, electrical and automobile industries.

Electronics Market in BangladeshThe Electronics Market in Bangladesh is an ever-rising industry. The appropriate market size has never been determined as it is ever changing. The whole market can be separated into several segments like:

Semiconductor Market

Electronics Appliances Market

Raw Materials and Spare Parts Market

IT Market

Walton is one of the major players in the electronic appliances market. They are also manufacturing motorcycles alongside home appliances such as television, refrigerators, air-condition etc.

The market of these products relies heavily on the average household income. For most people in Bangladesh home appliances had been luxuries they, which they cannot afford, but recently the situation have been changing. Over the last 10 years, there has been massive economic growth in the country, which has increased the income of lower-middle and middle class people. So the demand for home appliances has increased substantially.

If we look at the annual GDP growth of the country in the last 10 years, we can see that there has been a steady increase.

One of the main reasons of this growth has been because of the increased investment in the fast growing sectors of the economy, which has reduced the rate of unemployment

Drastically over the years.

It is evident that the increase in earning of the population has also had an impact on the buying behavior. Middle and upper middle classes have emerged and reached a certain level that is attractive for the importers and manufacturers. Bangladesh Bank has the records of imports of Home Appliances over the years.Table 01: Import of Home Appliances (BDT)Item2009-102010-112011-122012-132013-14

Electrical Home Appliance150241204951243665236150190548

At first there was a huge growth to the numbers of Home Appliances imported in the country, but the numbers have declined in recent years, as tax holidays on imported parts and high import tax on electronic products have made companies focus on assembling and manufacturing their products in Bangladesh.Walton HILWalton Hi-Tech Industries Ltd (Walton HIL) is one of the best companies in the electronic sector of Bangladesh. Walton is one of those few Bangladeshi companies that export electronic products since most of the companies in Bangladesh import products of various famous brands. The company was established in 1977. Since then, it has been setting new benchmarks in production of electronic goods in Bangladesh.

The company has a yearly production capacity of 1.4 million pieces of fridge, 300,000 pieces of air conditioner and 300,000 pieces of motorbike. In its early stage, the company used to produce home appliances. Today their product mix includes Mobile Phone, Generators, and Motorbikes. In 2009 the company signed an agreement with the Malaysian auto manufacturer Agatha to set up an automobile plant in its factory premises. After meeting the local demand the company is exporting its products to Qatar, Dubai, Abu Dhabi and Kuwait of Middle East, Ghana of Africa and India, Nepal and Bhutan of

South Asia and U.S.A. It also wants to export its products to France, Italy, Germany, Spain and other European countries. Walton has been successful in capturing this large international market because of its high quality products. To ensure this high quality ofproducts all the members of the Walton family, both factory and administrative members, work very hard round the year.

The factory of Walton is situated in Saver and the corporate office is at Dilkusha C/A, Dhaka. There are 120 outlets of Walton throughout the country so that customers everywhere can buy Walton products. Walton has a dedicated team of skilled engineers and technical personnel from home and abroad who ensure quality products for the customer. Because of this highly skilled team Walton can offer the customers a wide range of products Competitor

Television

Refrigerator

Air-Condition

LG

Sony

Singer

Samsung

Panasonic

LG

Samsung

Panasonic

Whirlpools

Sharp

LG

General

Gree

Samsung

Competitor AnalysisIn the field of home appliances such as television, refrigerator, freezer, air-condition etc. some of Waltons competitors are:

Figure 01: Waltons competitors AnalysisMost of these brands have been in this market for a long time. But none of them were able to match the market growth of Walton in the last 3 years. Although LG-Butterfly is the No.1 home appliances brand in the country, Walton is catching up fast.

Walton has started manufacturing major parts for the assembly of motorcycles. Right now they hold nearly 8% of the market share.

Its competitors are:

Bajaj

Hero Honda

Dayun

TVS

Singer

ButterflyMarket ShareBy conducting a survey among consumers we were able to determine peoples preference of brands while buying home appliances and which brand of product they have bought. The market demand of different brands of television, refrigerator and motorcycles has been calculated by survey method. It must be noted that had the survey been centered on middle class families in rural areas, Walton would have had a much higher market share since these people are the main target market of Walton.

Also, Since Walton is the sole domestic producer among these brands; it enjoys some tax reduction that makes it capable of manufacturing and selling its product at reasonable prices. This facility provides Walton with a competitive advantage. Hence, Walton plans to target another 15% of the market in the next 5 years and they are confident that they will be able to easily achieve that target.StrategicSituational AnalysisMarket AnalysisBangladesh, with its growing population and economic growth, has huge demand for household products. The fact that only about 60% of the country has electricity available proves that when electricity will be available throughout the country, demand will increase further.

As the people of this country are mainly price sensitive, Walton, being the sole manufacturer of refrigerator, freezer and motorcycle, is very keen to meet the demand of this large market by providing competitive prices.

Waltons primary goal is to capture the local market, as they are still behind market leader LG-Butterfly. But they are also exporting their products. Already they have customers in Myanmar, Bhutan and planning to expand their market to Africa.Market SegmentationSegmentation is one of the most important factors of strategic marketing. Market segmentation is one of the steps that go into defining and targeting specific markets. It is the process of dividing a market into a distinct group of buyers that require different products or marketing mixes. Markets can be segmented or targeted using a variety of factor.

The bases for segmenting consumer markets include: Demographical bases (age, family size, life cycle, occupation)

Geographical bases (states, regions, countries)

Behavior bases (product knowledge, usage, attitudes, responses)

Psychographic bases (lifestyle, values, personality)The market in which Walton is doing its business is consumer market and Walton mainly segments its market base on Demographic, Geographic and Psychographic basissDemographic SegmentationIn segmenting the market on demographic basis Walton mainly considers occupation and family size of the consumer. It targets the people of middle-income level and designs its products for mainly nuclear family.GeographicSegmentationWalton segments the whole country in eleven zones for marketing purpose. They are Dhaka North Zone

Dhaka South Zone

Dhaka South-West Zone

Chittagong Zone

Camilla Zone

Barisal Zone

Jessore Zone

Sylhet Zone

Bogra Zone

Mymensingh Zone

Rajshahi ZoneArea Managers are responsible for these zones and it is their responsibility to develop market there. Product demand and response of the customer are not same in all zones.

Maintaining the sales in high demand zones like Dhaka, Camilla, Bogra the marketing department is trying to increase their sales in low demand zones.

Currently, Walton has either their retail shops or dealer shop in all of the 65 districts of Bangladesh. They have multiple shops in Dhaka and Chittagong in order to provide maximum convenience.Figure 02: Walton Plazas in Chittagong

Figure 03: Walton Plazas in Dhaka

Psychographic Segmentation

Walton markets its product by using psychographic segmentation. They use lifestyle to segment their market. For example Walton is marketing relatively cheaper CRT Television for lower-middle income and rural people and at the same time LCD Television for higher middle-income people. It also designs the refrigerators of different size and capacity considering the people of different lifestyle.PEST Analysis

Political Factor: High Import Duty on Imported Home Appliance Product

Export promotion schemes of Bangladesh Government

Tax Incentives on Import of Plants

Constant Government SupportEconomic Factor: Increase in per capita income

Growing GDP high disposable income

Increase in Spending Power

A huge prospect of a profitable export sectorSocio-cultural Factor: Manufacturing Eco-Friendly product

Changing lifestyle of middle income peopleTechnological Factor: Improvement in Technology made electronics cheaper

Increased quality of productionSWOT Analysis:

Marketing StrategyPositioning StrategyWalton has created huge enthusiasm among the consumers of its target market with its slogan Aamader Ponnyo. They accepted Waltons endeavor of manufacturing some electronic items like, refrigerator & Freezer and motorcycle for the first time in Bangladesh, and are more than willing to buy a product of high quality made in our own country. On the other hand, as a local manufacturer Walton can sell quality products at comparatively lower price than other competitors.

It also makes its product available at the nearest possible places in each areas of Bangladesh through Walton Plazas (own showroom) and countrywide dealers. New Walton Plazas are being opened frequently in different places of the country for getting closer to the customers.

Another strategy of Walton for creating a concrete place in the customer mind is its after sales service. In order to providing the quickest possible after sales service to the customers. Walton has already established 39 Service Centers and opening more service centers is under process. Walton equally values its sales and after sales service for maintaining a long and positive relation with its customer and thus retain and increase the customer.Marketing Mix

Product:Walton has a good number of products available in the market. The company produces home appliances, mobile, generator and motorbike.

A brief description of its major products is given below:

RefrigeratorWalton mainly produces home appliances. In fact in its website the company is introduced as the pioneer in refrigerator production in Bangladesh. Walton Refrigerator & Freezer ensures highest quality compressor, Condenser is made by 100% copper, which lasts for 20-30 years. The most important thing is that every spare parts including door with different color are changeable and available everywhere over the country.TelevisionWalton produces LED, LCD, and CRT televisions. Walton Television ensures home cinema entertainment. Walton Televisions d4ta Digital Technology is one of the most innovative technological solutions that automatically reduces video noise, Selects the best picture and performs fine-tuning by auto frequency tracking technology.MotorcycleWalton motorcycles are now competing with the Indian Hero-Honda and TVS brand. The motorcycles have become famous because of the special specification like mobile phone indicator, Digital gear display, Fuel location meter, Air shock absorber, Remote control, Hydraulic Brake, Anti-Theft lock and Alloy rim etc. Walton motorcycles are also fuel-efficient.Other than these products Walton also produces Mobile handsets, generators, air conditioners, DVD players, and microwave ovens.

Walton Product PriceWaltons main target market has always been middle-income group. SO they have been very careful in setting their price of product. Also the fact that they manufacture their products, it allows them to set a lower price than their competitors, as they dont have to pay heavy import duty. Below is a comparison of the prices of different products of different brands-Table 02: Price comparison of RefrigeratorsModelWaltonLGTranscendSharp

10 CFT26,20035,00032,00029,500

10.5 CFT28,10038,30032,50031,000

11.5 CFT29,70040,60036,00037,000

Table 03: Price comparison of TVModelWaltonLGSonyMy One

29 Color TV18,50028,35026,35022,700

37 LCD TV48,80065,60059,500

42 LCD TV75,20095,00088,000

Table 04: Price comparison of MotorcycleModelWaltonBajajHero HondaTVS

125 CC103,900175,000155,000160,000

110 CC96,000148,500145,000140,500

Cruiser93,300120,000110,50098,000

In all three products in which we have done market research, it is evident that Walton isproviding the consumers with the least expensive product. It is vital for Walton as price is the only tool where they have a superior advantage over other brands. But it must be noted that consumers in higher income level also look for quality products. So Walton needs to find a fine balance between price and quality as they move forward in the coming years. PlaceFor making the product available to its target customers Walton use its distribution channel. Walton generally uses its own transport facilities for reaching the product to its120 Walton Plazas and about 700 dealers. If any dealer wants to use his own transport for transporting Walton products from factory to his shop, he gets 1% reduction on dealer price. PromotionEver since Walton started its production in its manufacturing plant, they have started a wide promotional campaign on its product. Their tagline Amader Ponnyo reflects the pride they take by being able to sell home appliances manufactured in Bangladesh. Right now Walton has TVCs running in all major satellite channels of Bangladesh in peak hours targeting their core target customers. Also they have numerous billboards and advertisements in print media. Also their 120 Walton Plazas across the country also works as a major advertising tool. Walton has recently started sponsoring different major sports event in the country. Recently they sponsored their first International Cricket Tournament and thus it allowed their brand to be viewed by millions of people across the world.Financial Analysis

Summary of the Financial Report of Walton for the year 2014:Table 05: Financial analysis of Walton HILParticularsAmount TK.

Total Sales2,553,024,782.10

Cost of Goods Manufactured2,414,093,716.05

Gross Profit305,852,566.6

Operating Profit99,636,450.2

Net Profit26,530,733.5

Challenges and Future GrowthCurrent Market Status:Although Walton is a growing brand, it is yet to establish itself as the market leader. In fact it still has a long way to go, especially in capturing the elite customer bracket.Table 06: Market ComparisonPriceQualityVarietyDistributionScoop For Growth

Walton**************

LG*****************

Sony*********

Singer***********

Samsung*********

We can see from the above table that clearly overall LG leads and have a significant lead when it comes to these values. They have been in the market for 20 years and have done remarkably to capture nearly one-fourth of the total home appliance market. But coming second right now is Walton. By providing the same quality in much lower price, Walton has created an excellent brand following. They have a very good distribution system, without lets all over the country. But their main problem has been variety. They are still way of the benchmark at the moment when it comes to product variety. But Walton will put more emphasis in this sector and plan to catch the lights of LG and Sony in the next 5 years.Challenges:Establish Walton as the No.1 Home Appliance Brand of the Country

Capturing the market share of existing foreign brands

Bringing more variety in their product line

Continue increasing market share at the same rate over the next 5years.

Future Growth:Walton has decided to penetrate market, develop both market and product to achieve profitable growth in future.Market penetrationThrough extensive promotion campaign Walton has set goals to make more sales in future. Countrywide distribution system helps it achieve its goals.Market DevelopmentWalton is exporting its products in Middle East, Latin America and Africa. It has plans to explore European markets also.Product DevelopmentRecently, Walton brought Air-Condition in market. Though it hasnt gained spectacular market share yet, continuous customer attraction reflects future.

Expected market growth of Walton in the next five years:

Table 07: Future growth of Walton HILProduct LinePresent Market ShareExpected Market ShareMain Competitor

Motorcycle18%30%Bajaj, Hero Honda

TV10.5%45%LG, Sony

Refrigerator21.8%35%LG, Samsung

Air-Condition6%20%LG, General, Gree

Recommendations

To establish Walton as the brand for home appliances & other electronic accessories, some changes are needed in its strategies-

Switch to Market Penetration Pricing without compromising quality. Partner with local and international OEM (original equipment manufacturers) for elegant & sophisticated designs & equipment. Develop gaming consoles like Game boy, PlayStations, X-box and medical appliances for caring old people through innovative approaches. Customer Loyalty Program. Yearlong incentives and special offers.Conclusion

The company has been running its business with good reputation since 1977.Establishment of Walton HIL to manufacture Refrigerator & Freezer, Air Conditioner, and Motorcycle etc. In Bangladesh is a milestone in the path of success and reputation of the brand WALTON. Walton HIL is the first company to introduce advanced research and manufacturing technologies and equipment for household & commercial Refrigerator & Freezer, Motorcycle and Air Conditioner etc. in Bangladesh. For Bangladesh, Walton has become a company to be proud of in the export arena. Walton has truly redefined Bangladesh from being a consumer country to a producer country for home appliances.Walton brand products have won the hearts of millions and would be exported to many countries including Japan due to its high quality. Japanese Ambassador to Bangladesh Shiro Sadoshimo said this while talking to the newsmen after visiting the electronics and automobile factory Walton Hi-Tech Industries Ltd. at Chandra, Kalahari in Gazipur on Tuesday. There is a great possibility for Walton products to be exported in Japan as Bangladesh and Japan have a good friendly relation for a long time and have huge opportunities for co-operation in different fields like trade; he added. If Bangladesh and Japan work together the economic expansion of the two countries will be more progressive, he pointed out. The Japanese envoy assured the Walton authority for providing all kinds of technical supports to develop the production facilitates and other supports to promote. The visit is also an initiative to increase trade relation and technological cooperation between these two countries.