1.

0 Company Overview:

1.1 Brief History

Shinepukur Ceramics Limited (SCL) is the leading Bone China and Porcelain Tableware
Manufacturer and Exporter from Bangladesh with an annual export contribution of 55%. Shinepukur
exports to more than 35 countries including USA, UK, Canada, France, Italy, Sweden, Norway,
Poland, Turkey, Russia, Japan, Australia, UAE, Pakistan, Chile, India, Singapore, Egypt etc.
Mission of the company is:
Each of our activities must benefit and add value to the common wealth of our society. We firmly
believe that, in the final analysis we are accountable to each of the constituents with whom we
interact; namely our employees, our customers, our business associates, our fellow citizens and our
shareholders.
1.2 Infrastructure:

The company is a member of Beximco Group and started its operation in 1999.Shinepukurs
manufacturing facility is on over 21 acres of land, located in the Beximco Industrial Park with a total
covered area of 588,000 square feet. The facility is equipped with the most modern state-of-the-art
and latest machineries. There are two Porcelain plants, two Bone China plants, one Decal plant and
Design Studio, one Mould unit and one Packaging Plant. The porcelain plant has a total capacity of
15 metric tons (approx. 55,000 pieces) per day and the Bone China Plant has a capacity of 3 metric
tons (approx. 8,500 pieces) (Shinepukur Ceramics Limited, 2013). The company currently employs
more than 3000 people in their production facilities.
1.3 Product Description:

According to body composition, Shinepukur produces two types of products. One is Porcelain and
the other is Bone China. Porcelain has three variations namely Plain Porcelain, Ivory China and High
Alumina Porcelain. At present, Shinepukur offers 245 shapes out of which 85 shapes are in Bone
China and 160 shapes are in Porcelain. Also, the company has 1600 designs out of which 756
decorations are in Bone China and 844 decorations are in Porcelain. All the designs have been
developed in their own design studio and decal plant. Moreover, the company has two production
methods: jigger and casting. Jigger refers to a mechanized method of production (Peterson, 2009).






2.0 Research Methodology

2.1 Design

The type of this research was exploratory research. The methods of this research were survey of
executives and managers of Shinepukur Ceramics limited and a pilot survey. To conduct the pilot
survey, a questionnaire was developed and a sample of dealers and retailers was determined. The
survey results are enlisted in Appendix 1.
2.2 Sources of Data

The study was done based on primary as well as secondary data. Primary data has been collected
from senior executives and managers of Shinepukur Ceramics Limited. The methods for collecting
information were personal interview and conversation. Secondary data were collected through
different annual reports and papers of SCL, relevant articles from dailies, journals and website of the
companies.
3.0 Industry Overview
3.1 Competitive Review

Bangladesh is positioned to expand rapidly in the ceramics business with its high quality, cost ratio
and creative human resource base. Traditionally, ceramic industry is a labor-intensive sector and
companies in developed countries experience difficulties in remaining competitive due to rising labor
cost and recent global financial crisis. Bangladesh, being a gas rich, low-labor cost economy and
having advanced bone china technology, is perfectly positioned to be a strategic partner in
production and supply of ceramic goods (Board of Investment, Bangladesh).
This ceramic industry took a formal start in this country in1958 with the establishment of Tajma
Ceramic Industries Ltd. at Bogra district. It manufactured ceramic products for the domestic market.
After that People Ceramic Industries Ltd. Was established and went into production in 1962. The
company however, has had little success in the export markets. Monno Ceramic Industries Ltd
started production in 1985 and manufactures very high quality porcelain tableware. This company
has done well in the domestic market. Shinepukur Ceramics went into operation in 1999. This
company is promoting elegance and distinction for both international and local users in the country.






Table 1 : Major Ceramic Companies of Bangladesh
Sl No Year of
commencement
Company Name
1. 1962 Peoples Ceramics Industries Ltd.
2. 1985 Monno Ceramics Industries Ltd.
3. 1986 Bengal Fine Ceramics Ltd.
4. 1999 Shinepukur Ceramics Ltd.
5. 2006 FARR Ceramics Ltd.
6. 2006 Artisan Ceramics Ltd.
7. 2011 Paragon Ceramic Industries Ltd.
8. 2011 Protik Ceramics Ltd.

Currently Paragon, FARR, Artisan, Protik Ceramic are considered as major players in ceramic
tableware market other than Shinepukur and Monno in the country.
Mainly starting major production in 1980s to feed the local consumers, ceramic tableware industry
took a slow but steady progression to approach foreign market. Shinepukur Ceramics Ltd. and
Monno Ceramics are exporting major portion of ceramic tableware from Bangladesh and have been
exporting their goods for a long time. Shinepukur Ceramics Ltd. contributed more than 51% of the
total export of ceramic tableware from Bangladesh in 2011. The export of the company was around
BDT 161crore where whole industry exported ceramic tableware goods worth BDT 315 crore
(approx.) in 2011 fiscal year(Bangladesh Ceramics Manufacturer Association, 2011).

Figure 1: Total Export Sales of 2011-2012

All these companies are also serving domestic market. Monno has achieved the lion share of sales of
ceramic tableware in the country with an average monthly sale of BDT 6 crore. Shinepukur comes
after Monno in terms of domestic sales as it is an export-oriented business organization. Although
FARR, Paragon and Protik Ceramics are trying to improve their product quality and widen market
share with the help of technology and promotion, Monno and Shinepukur still remain the market
leader. The main reason behind this is their Brand Image and Goodwill.

Figure 2: Domestic Average Monthly Sales
Shinepukur
BDT 161 Crore
51%
Monno
BDT 85 Crore
27%
FARR
BDT 36 Crore
11%
Artisan
BDT 15 Crore
5%
Paragon
BDT 9 Crore
3%
Protik
BDT 3
Crore
1%
Others
BDT 6 Crore
2%
Shinepukur
Monno
FARR
Artisan
Paragon
Protik
Others
Monno
BDT 6 crore
Shinepukur
BDT 4 crore
FARR
BDT 3 crore
Paragon
BDT 3 crore
Protik
BDT 2 crore
Others
BDT 2 crore
Monno
Shinepukur
FARR
Paragon
Protik
Others
3.2 Market Description:

3.2.1 Profile of Customers:

SCL does business in both local and international markets. It mainly caters to business-to-business
customers and does Original Equipment Manufacturer (OEM) business. For example, in Bangladesh,
proliferation of hotel and restaurant business in recent years has increased the demand for ceramic
tableware products.
3.2.2 International Market:

SCL is an export-oriented business organization. Almost 80% of its business mainly depends on
international market ever since its commercial production in 1999. SCLs exports are mainly shared
between the UK, USA and Germany. The respective market shares are 26 percent, 20 percent and 16
percent. The business had been previously hit by the recession and only one of their 26 buyers
survived in the business. Prospective market in Europe is prime target for SCL. At present, the
company largely exports to Scandinavian countries like Norway, Sweden and Finland. Other
countries where SCL is exporting its products are UK, USA, Spain, Italy, Australia, New Zealand,
Russia, UAE, Germany, Turkey, Pakistan and India.
3.2.3 Domestic Market:

Although SCLs primary focus is on the international market, it also holds 25% of the domestic
market standing only second to Monno Ceramics. Historically, Bangladesh had never been a
lucrative market for tableware ceramic products. But over the last seven to eight years, the market
has evolved and customer perception of ceramic tableware products has shifted from the core product
to the actual product. People in Bangladesh no longer buy tableware for merely utilitarian purposes,
but also for aesthetic reasons, i.e. shape and design. The following diagram illustrates the domestic
customer groups targeted by Shinepukur Ceramics.

Figure 3: Target Customer Groups of SCL
.
3.2.4 Demographic Segmentation in domestic market:

Age: According to age, SCLs customers belong to a mature group of people, that is, people
who are married and buy crockerys for household use. So, we can say that majority of
buyers are older than 25 years.
Socioeconomic background: Ceramic tableware products produced by Shinepukur are not
priced to be affordable to those in the lower financial bracket. Also, the premium bone china
products usually appeal to people of more refined tastes and with more purchasing power.
Therefore the companys customers mostly belong to middle to higher socioeconomic class.
5.0 SWOT Analysis
5.1 Strengths:

Well Established Brand Image
Shinepukur has been doing business since 1999 and by this time it has established a very
positive image of its brand in both domestic and international market. That is why the
company has been able to maintain 25% market share in the local market with minimal
promotional activities in the last couple of years.
Flexibility in Production:
With 14 years of experience in the industry, Shinepukur Ceramics has attained the skill and
technology to be flexible in its operations. As a result, the company can develop any new
product within 4-6 weeks as per Buyers requirements. This flexibility also allows the
company to quickly adapt to any change in customer preferences.
Target
Customer
Groups
Hotel &
Restaurants
Giftware
Household
use
Wide Variety of Product Shapes and Designs: At present, Shinepuker has 1600 shapes and
245 designs which provide buyers many options to choose from. The company has tried to
make sure that it has a product for different customers taste and preferences.
Premium Bone China Products: Shinepukur has the largest Bone China plant in the entire
SAARC Region with an annual capacity of approximately 3 million pieces. It is also the first
Company in Bangladesh to introduce Bone China technology and products. Bone China
ceramic products with gold and platinum decoration are considered high-end tableware and
have a very translucent and smooth surface. They have a high demand in the international
market.
5.2 Weaknesses:

Limited Presence as a Separate Brand outside Bangladesh
Even though Shinepukur has been producing ceramic goods for 20 reputed international
brands, it has very limited presence overseas in their own brand name.
Ensuring a Stable Supply Chain:
Production of high quality Bone China products requires raw materials such as bone ash,
china clay and Cornish stone which are often scarce to find. Also, these inputs are
exclusively sold by very limited number of suppliers. Some time Shinepukur faces difficulty
ensuring timely availability of these vital resources.
5.3 Opportunities:

Capture New International Markets
Although Shinepukur currently exports to 35 different countries across North America,
Europe and Asia, there are more lucrative markets to venture. The company is trying to
penetrate new markets such as Brazil as well as explore new countries in Africa.
Emerge as an Individual Brand
In the future, Shinepkur could not only make products for foreign buyers, but also do
international business in their own brand name.
5.4 Threats:

Dependency on a Volatile International Market
From its inception, Shinepukurs primary focus was to serve the international customers. At
present, the companys international customers include Villeroy & Boch from Germany,
Wedgwood & Royal Doulton from USA, Richard Ginori from Italy and so on. Although the
company has been successful to attract and maintain a very decent portfolio of overseas
buyers, losing them would place Shinepukur in a very delicate situation.This was evident
when the company lost four of its major foreign customersdue to the recession during 2006-
2008.
Potential Threat of Withdrawal of GSP Facility
Shinepukur has been very successful in leveraging the duty-free entry facility for their
products in US and EU markets. But recent political turmoil and some disasters in Ready
Made Garments (RMG) sector is making those countries to consider revoking this GSP
facility. The ripple effects of such decision may create substantial adversity for companies in
the ceramic industry.

6.0 Marketing Mix

As an organization serving both international and domestic markets,Shinepukur Ceramics Limited
has to decide how much to adopt their marketing strategy to local conditions. At one extreme are
organizations that use a globally standardized marketing mix worldwide as standardization of the
product, advertising and distribution channels promise low cost. At the other extreme is an adapted
marketing mix where the producer adjusts the marketing mix elements to each target market.
6.1 Product
Table 2: Characteristics & Description of SCL Products

6.2 Price:

Generally pricing strategy under marketing mix analysis is divided into two parts:
Price determination is referred to as the processes and activities employed to arrive at a price
for a product including consideration of relative prices of products within the same line, and
differences in price for similar products of differing grades and qualities (Danby, 2006).






Product:









Foreign
Market


Characteristics Description
Quality

Top quality
outstanding/signature products
Customization
Satisfying unique demand of
customers by accommodating
product design suggestions
Variety
Achieved through new design
initiation and innovation.
Covers entire family
requirement.
Classical shapes and design
Shining colors.
Elegant look.
Colorful assortment.

Domestic
Market
Quality
Striving for consistent quality
products
Variety
Achieved through delivering
desired products to targeted
market segment
Price administration is referred to as the activities involved in fitting basic prices to particular
sales situations such as geographic locale, functions performed by customers, position of
distribution channel members, or special sales situations (Means, 1972).
Shinepukur Ceramics Limited employs both cost-based and value based approaches. While setting
price, it takes both internal and external factors into consideration. Internal factors are costs,
marketing mix strategy and organizational considerations. External factors are nature of the market,
demand and competitors prices (Forkan & Ahmed, 2011). For new products, SCL follows market
skimming pricing strategy. In general, SCL sets standard prices locally and offers premium price
internationally, usually 30% more than the domestic price.

6.3 Promotion:

Table 3: Promotional Strategies of SCL




Promotion







Foreign
Market


Characteristics Description




Push Strategy

Trade show promotions to
encourage retailer demand
Negotiation with retailers to
stock your product
Packaging design to encourage
purchase
Point of sale displays
SCL took part in a number of
International Fairs namely
Ambiente 99-Franfurt
Germany, New York Tabletop
Show-99-USA, Consumer
Goods Asia 99-Singapore and
London Houseware Show-99-
UK

Domestic
Market

Pull Strategy
SCLs pull strategy involves
motivating customers to seek
out SCLs product in an active
process -"Getting the customer
to come to you"
Word of mouth referrals
Customer relationship
management
Sales centre at prime zone to
attract exclusive customers








6.4 Distribution:

Since Shinepukur caters its products to both local and international markets, it has adopted a
distribution strategy accordingly.



Figure 4: Distribution Network


6.4.1 Distribution in the Local Market:

Distribution in the
Local Market
Wholesale Market
Supply to Ceramics
Wholesale Market at
Mitford directly from
company warehouse
Retail Market
Reach retail Customers
through 130 dealers all
over Bangladesh
Company owned Signature
Showrooms
Shinepukur serves the customers in the retail market in three ways. First of all, the company has
appointed 130 dealers across the country,of which, 10 are exclusive dealers thatsolely sell
Shinepukur branded products. According to the contract, dealers sell the products at 10% margin.
Also, the company owns eight signature showrooms that sell their exclusive tableware products
which are not available anywhere else.
The ceramic wholesale market in Dhaka is situated at Mitford where Shinepukur directly ships its
products from its warehouse. Retailers who are not the dealers of the company purchase the products
from this market for resale.
6.4.2 Distribution in the International Market:

Shinepukur exports its products to 20 different
customers in 35 countries. After manufacturing, the
company directly ships the products to the
warehouses of the international customers.
7.0 Quantitative Highlights
7.1 Product Pricing:

Pricing decision is at the core of every business plan and impacts directly on the critical components
of a companys marketing strategy (Lancioni, 2005). Traditionally, emphasis is placed on product
development, advertising strategy and distribution channel formation. There are two methods of
production: Jigger and Casting. Jigger is a mechanized method of production. The company allocates
its costs to each production method and keeps a margin on the cost.
Table 4: Profit Margin of Products




Shinepukur applies a common cost structure to all its product types. The entire cost is segregated
into numerous elements. Diagram below shows the contribution of each factor to the total cost.


Margin
Porcelain Bone China
Jigger Casting Jigger Casting
20% 40% 35% 70%

Figure 5: Cost Allocation





Even though Shinepukur Ceramics produces two major product categories but each type comes in
different shapes and designs. Both porcelain and bone china is moulded into round, square and wavy
shapes. In addition, designs are also of two types: general decoration (GD) and border decoration
(BD); and are priced discretely. The subsequent tables show price ranges for round shapes of each
category. The detailed price list of all types and designs are given in Appendix 2.

Table 5: Price Range of Round Shaped Bone China

24.81%
15.36%
4.41%
12.46%
37.29%
5.67% Body, Glaze & other auxiliary
materials cost
Decoration material cost
Packing materials
Financial expenses
Overhead
Depreciation
Type of Wares Unit Price Range in Taka
Dealer Retailer
GD BD GD BD
Plate Piece 99-253 132-488 extra 10% inside
Dhaka
Bowls Piece 98-352 119-400
Cup & Saucer Piece 96-227 120-256
Platter/Dish Piece 308-759 387-935 extra 10.5% outside
Dhaka
Pot/Jug Piece 60-999 80-1100
Table 6: Price Range of Round Shaped Porcelain

The company primarily sets price for the dealers and provide a guideline for the retail price. Since it
distributes through dealers only and has very nominal retail presence. According to the company
principles, retailers inside Dhaka are advised to charge an additional 10 percent on their purchase
price. Retailers outside Dhaka are allowed to charge up to 10.5 percent.






7.2 Profit Analysis

Bangladesh ceramics industry, like many other industries, was not immune to the global financial
crisis of 2007. But the industry demonstrated resilience and overcame the recession defiantly
(Rahman, 2009). Shinepukur Ceramics posted a steady growth of profit over the last few years and is
forecasted to increase further with the ceramic industry expected to earn around US $100 million
from exports by 2015 (Jahan, 2010).
Type of Wares Unit Price Range in Taka
Dealer Retailer
GD BD GD BD
Plate Dozen 475-1338 590-1716 extra 10% inside
Dhaka
Bowls Dozen 475-1926 606-2505
Cup & Saucer Dozen 762-1116 936-1449
Platter/Dish Piece 40-500 122-800 extra 10.5% outside
Dhaka
Pot/Jug Piece 40-306 50-390

Figure 6: Net Profit of SCL (2007-2011)
Over the years, net profit has also grown progressively alike gross profit. But in 2011, the net income
shot up incredibly creating a false impression that sales increased tremendously. This unexpected
jump was due to the revaluation of property, plant and equipment.

Figure 7: Gross Profit of SCL (2007-2011)
8.0 Evaluation of Overall Marketing Strategy

0
100000
200000
300000
400000
500000
600000
700000
2007 2008 2009 2010 2011
455,662
499,393
559,200
659,097 653,420
Year
Gross Profit (BDT in Thousands)
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
2007 2008 2009 2010 2011
130,231
179,916
172,372 253,247
1,767,802
Year
Net Profit(BDT in thousands)
8.1 Effectiveness of Strategies
8.1.1 Product Strategy

Shinepukur segments its market depending on the efficiency and skill of its plant. SCL owns the best
bone china plant in the world and can produce the most difficult shape, size, colour and design.
Hence, SCL only undertakes orders that entail advanced level of skill and tend to cater to exclusive
customers.
The shapes and sizes that Shinepukur can supply are unique to this country and therefore has
domestic comparative advantage. Even domestically, Shinepukur positions itself at the high-end of
the market and sell exclusive products to premium customers
8.1.2 Pricing Strategy

Pricing is the global comparative advantage for Shinepukur. Although China has over 8000 ceramic
manufacturing factories, China is handicapped due to the absence GSP facilities. It pays 12% in
general duty and an additional 12% - 25% Anti-Dumping Duty in North America and Europe. Since
Chinese products cannot contain the amount of contaminants in their products mean that major
buyers prefer SCL.
The availability and cheap price of pure natural gas means that SCL can easily control the amount of
slug and colour compared to Sri Lanka. The impure gas in Sri Lanka taints the products they bake.
To maintain same quality, Sri Lanka has to spend more than Bangladesh.
In these circumstances, SCL can more than compete in price with international Original Equipment
Manufacturers (OEM). In the domestic market, SCL sells its products at a higher price than its
competitors.
8.1.3 Promotional Strategy

The biggest promotion for SCL is its clientele. They supply for world renowned names in ceramic
tableware like Villeroy& Boch in Germany and Wedgewood, Royal Doulton, Portmeiron, Denby in
the UK, Libberyinc and Lenox in the USA, Porsgrund in Norway, Richard Ginori in Italy and
Noritake in Japan.
SCL builds a long term relationship with its clientele and make sure they come back to SCL for their
business. Wedgewood, particularly has been supporting SCL in all possible ways, from raw materials
to technical assistance.
To increase exposure in foreign markets, SCL takes part in various expositions over the world like
Frankfurt tableware fair and Chicago Tableware fair. This not only helps maintain their established
reputation but also promotes their brand as one of the leading OEM.
Another commendable marketing strategy for Shinepukur is catering for distinguished institutions
like Bangabhaban, Ganabhaban and Kremlin. Former US President Bill Clinton has used
Shinepukurs tableware and even the Indian Rashtrapati Bhavan, Air Canada, Pakistans High
Commission uses Shinepukur tableware.
8.1.4 Distribution Strategy

SCL has a highly efficient distribution network covering the country. It primarily drives sales
through their appointed dealers and has one signature showroom of its own at Westin Dhaka.
8.2 Future Outlook

Revenue is expected to grow by 20 percent from 2014 onwards after the completion of
another bone china manufacturing plant at the end of 2013.
Export earnings of Bangladesh ceramic industry is forecasted to be around US$ 100 million
by 2015. SCL being the leading exporter will definitely experience increase in earnings.
SCL is expected to penetrate further European countries and enter into South American
countries in the near future.
Market for Bangladeshi ceramics is expected to increase further with more and more buyers
preferring Bangladesh as a cheaper alternative.
9.0 Recommendation

Shinepukur needs to expand their markets by venturing into emerging economic powers like
Brazil. Africa is also a prospective market.

Shinepukur should increase their production capacity and boost their presence in
Scandinavia.


Shinepukur should focus more on their very new product Satin China the product has the
aesthetics of bone china but costs between porcelain and bone china. It has met with an
overwhelming response from their buyers and therefore should be at the forefront of SCLs
OEM marketing drive.

Shinepukur needs to develop their own brand globally. OEM can never be a long term goal
for an ambitious company. The products that SCL supplies, usually sell for 10 times more to
the end users. By developing their brand, SCL can boost their revenues with the existing
production capacity.