Table of Contents

. Introduction........................................................................................................ 4
1.1

Scope............................................................................................................. 4

1.2

Methodology.................................................................................................. 5

1.2.1

1.2.2

Method of administering the questionnaire:...............................................5

1.2.3

Tabulation and Data analysis:.....................................................................6

1.3

Objectives of the Report................................................................................6

1.4

Limitations..................................................................................................... 6

Literature Review:................................................................................................ 6
2.1

Impact of Internet.......................................................................................... 7

2.2

Online Shopping............................................................................................. 9

2.3

Purchasing intention:................................................................................... 10

2.4

Factors Influencing Consumer`s Purchasing Intention.................................10

2.4.1

Security................................................................................................. 10

2.4.2

Time Saving........................................................................................... 11

2.4.3

Website Design/ Features......................................................................12

2.4.4

Convenience.......................................................................................... 13

2.4.5

Online Shoppers in terms of Demography.............................................13

2.5
3

Type of data obtained:............................................................................. 5

Return Policies............................................................................................. 13

Impact of Web in retail sectors of developed countries:.....................................14

3.1

Critical factors for determining Popularity in online retail shopping:...........16

3.2

Smartphone and tablet devices are adding a new dimension in retailing:...17

3.3

Shift from store-based retailers to non-store retailers:................................18

3.4

Consumers are being more influenced socially............................................19

3.5

Addressing target consumers individually...................................................19

3.6

Global variation in online retail....................................................................20

3.7

What may be the future scenario?...............................................................22

Overview of Online Shopping services and its prevalence in Bangladesh.........24

4.1

Bangladesh Economy Overview...................................................................26

4.2

Market structure of superstores...................................................................27

4.3

Internet and online shopping in Bangladesh................................................28

1

Service offering of the select physical and online stores...................................29

5.1

5.1.1

Aarong................................................................................................... 29

5.1.2

Meena Bazar.......................................................................................... 30

5.1.3

Agora..................................................................................................... 30

5.1.4

Rang...................................................................................................... 30

5.1.5

Shwapno................................................................................................ 31

5.2

Physical Stores............................................................................................. 29

Online Stores............................................................................................... 31

5.2.1

Rokomari.com........................................................................................ 31

5.2.2

Foodpanda............................................................................................. 32

5.2.3

hatbazarbd.com..................................................................................... 32

5.2.4

HungryNaki.com.................................................................................... 33

5.2.5

Chaldal.com........................................................................................... 33

Analysis of business players: Context in Bangladesh.........................................33

6.1

PEST Analysis............................................................................................... 33

6.1.1

Political.................................................................................................. 34

6.1.2

Economical............................................................................................ 34

6.1.3

Social..................................................................................................... 34

6.1.4

Technological........................................................................................ 35

6.2

GE MATRIX................................................................................................... 35

6.2.1

GE MATRIX............................................................................................. 35

6.2.2

Desirable feature of GE..........................................................................36

6.2.3

Criticism of the GE matrix......................................................................36

6.2.4

ANALYSIS OF GE MATRIX........................................................................37

6.3

BCG MATRIX................................................................................................. 39

6.3.1

Overview............................................................................................... 39

6.3.2

Question Marks:..................................................................................... 39

6.3.3

Stars:..................................................................................................... 40

6.3.4

Cash Cows:............................................................................................ 40

6.3.5

Dogs:..................................................................................................... 41

6.3.6

Limitations:............................................................................................ 41

6.3.7

ANALYSIS OF BCG MATRIX......................................................................41

6.4

ADL MATRIX................................................................................................. 44
2

6.4.1

ADL MATRIX OVERVIEW.........................................................................44

6.4.2

The advantages and disadvantages of the ADL matrix.........................47

6.4.3

Analysis of ADL Matrix...........................................................................48

6.5

Porters Five Forces Model:...........................................................................51

6.6

Resources and Capabilities:.........................................................................52

6.7

The 3Cs Model of Kenichi Ohmae:...............................................................52

6.8

Business Canvas Model:...............................................................................55

6.8.1

Brick Organization................................................................................. 55

6.8.2

Click Organization:.................................................................................56

Service Marketing Mix 7 Ps Analysis:.................................................................57

7.1

7 ps Analysis for Click Organization:...........................................................57

7.2

7 ps Analysis for Brick Organization:...........................................................58

Gap Analysis and Proposed Strategies to overcome Gap:..................................59

Recommendation:.............................................................................................. 62

10

Conclusion:..................................................................................................... 65

11

APPENDIX........................................................................................................ 67

11.1 QUESTIONAIRE............................................................................................. 67
11.2

References:.................................................................................................. 74

1 . Introduction
Retail trade is one of the traditional businesses of Bangladesh. Its expansion is keeping
pace with population growth and changes in consumption patterns, which are consistent
with the growth of the economy. This expansion has not been structurally organized,
3

because, until recently, retailing had never been perceived as an industry, but rather as
an individual or family business entity with a very limited scope of organized expansion.
Little to no market information is available on the retail sector, but secondary sources
indicate that the size of the food retail sector in Bangladesh could be US$12-14 billion,
and the number of retail grocery shops could be around 1 million. Retail is one of the
biggest sources of employment (12 percent), and it contributed 13 percent (wholesale
and retail trading) to Bangladeshs GDP.
Retail sector, until recently, consisted of only physical stores such as Department
stores, Supermarkets, Superstore, Convenience stores, Discount stores and off- price
stores, but the advent of internet has changed the situation dramatically. Over the past
few years, quite a number of online shopping portals or e-trading platforms launched
operations, offering products and services from vegetables, clothes, computer
accessories to books and travel tickets. The brick and mortar retail stores also reacted
quickly to the changing situation. Many stores have introduced online ordering and
payment system and home-delivery system to keep pace with the changed demand.
So, apparently the Web has caused quite a stir in the retail sector of Bangladesh. In this
report we tried to have an insight into the impact of web in creating service opportunities
in the retail sector of Bangladesh.

1.1 Scope
Our research endeavors to find out how introduction of internet is shaping the retail
sector of Bangladesh. For this purpose we worked on select few physical and online
retail stores. Most of these stores operate in Dhaka only while one or two operate in
Chittagong and Sylhet also. Hence the conditions of the sector in other parts of the
country fall outside the scope of this research. So, naturally our report is not a
comprehensive one rather it gives a rough idea about the sector.

1.2 Methodology
. In this report we worked with 5 physical and 5 online retail shops
Physical stores
Aaron

Online stores
Rokomari
4

Agora
Meena Bazar
Shwapno
Rang

Foodpanda
Hungrynaki
Chaldaal
Bdhaat

1.2.1 Type of data obtained:

Both primary and secondary data has been collected for the research purpose.

Primary data has been collected from the respondents through the survey

questionnaire
Secondary data has been collected from the different e-commerce websites and
articles / journals

1.2.2

Method of administering the questionnaire:

Survey method: The survey has been conducted mainly among job holders, home
makers and students residing in Dhaka, Chittagong and Sylhet metropolitan city. The
questionnaire was developed using Google docs and its link was shared by email and
different groups of face book likely to contain appropriate respondents.
Nature of the questionnaire: The questionnaire has been developed to find out more
on the research topic, probing into the objectives of research. The questionnaire
includes two parts, multiple choice, and Likert scale questions. These questions have
been put in the questionnaire in order to attain a more insightful understanding of the
views and attitudes of the users regarding online shopping.

It contains several

questions asking the demographic information about the respondents as well. The
questionnaire has been made with simple, direct, and familiar words keeping the
respondents in mind.

1.2.3

Tabulation and Data analysis:

Since the questionnaires were created in Google Docs, all the data analysis were done
by the program itself.
5

1.3 Objectives of the Report

The specific objectives of this research are as follows:

To analyse the overall situation of retail sector in Bangladesh

To determine the relative position of select few online and physical stores in the retail
industry
To find out influence of internet on retail sector
To point out the problems faced by the physical and online stores while conducting
their business
To suggest possible solutions to the problems

1.4 Limitations
This paper has the following limitations:

The concept of online shopping is still relatively new in Bangladesh and hence

there was a lack of relevant data.

Time and resource constraints did not enable the authors to conduct a rigorous

market research.
The survey sample was obtained online and is not the true representative of the
retail sector of Bangladesh.

Literature Review:

In this review we synthesize the current knowledge based on academic literature. The
impact of web in retail sector created an opportunity for various organization initially to
provide marketing information about their products and services, customer support and
later to conduct business transaction with customers. Retail is the sale of goods and
services from individuals or businesses to the end-users. Qinghe; Wenyuan and
6

Kaiming (2014) explained that a retailer purchases goods or products in large quantities
from manufacturers directly or through a wholesale, and then sells smaller quantities to
the consumer for a profit. It covers a wide array enterprises in terms of size, business
model and goods.Jhamb and khan (2010) identified the most appropriate retail formats
for various items such as food and grocery-supermarket; Health and beauty care
services-Supermarket; Clothing and Apparels- Mall; Entertainment-Mall; WatchesHypermarket;

Pharmaceuticals-Hypermarket;

Mobile,

accessories

&

Services-

Hypermarket; Foot wares-Departmental store.

2.1

Impact of Internet

1990s, the Internet was viewed as a disruptive transformational technology

(Christensen, Anthony, and Roth 1994) with respect to the retail industry. Futurists
envisioned that consumers would abandon brick and mortar organizations and buy most
products or service over internet. Zwass (1996) predicted that store-based retailers
would be replaced by Internet-savvy entrepreneurs who could harness this new
technology to provide superior offerings to consumers. Internet is facilitating traditional
store based retailers to complement their store offering through web.
Wigand and Benjamin (1995) found that the Internet economic model is more efficient at
the transaction cost level. Elimination of middlemen in the distribution channel (or
disintermediation) also can have a big impact on the market efficiency (Michalski, 1995).
Impact of web in retail market can result in additional sales at very low unit cost. Cassar
et al. (2000) contended that in a long term perspective, online retailers are expected to
achieve a significant cost advantage over their competitors that run their businesses in
a traditional way. In addition to the lower cost, the Web also enables higher level of
customization to the needs of individual clients (Choi and Winston, 2000). In this way
organization is more flexible in to expand different product lines and markets quickly
with low investment. It will reduce the communication gap with customer and
organization will be able to provide better customer service. Brynjolfsson and Smith
(2000) empirically examined prices for books and CDs offered by traditional and online
retailers and found that the latter sell products that are on average 9-16 % cheaper.
Similarly, Yan and Pei (2009), using a game theoretical model, pointed out that a firms
7

performance can be significantly improved after opening an online channel competing

with the traditional retail channel. Conversely, Kotha et al. (2004) asserted that web site
usability is not a source of competitive advantage, as it can be easily observable and
imitated.
Customer retention rate will increase with repeated order. Reichheld et al. (2000) stated
that customer retention rate is highly and significantly related to a firms profits The rich
interactive media and database technology of the Web allows for unconstrained
awareness, visibility, and opportunity for an organization to promote its products and
services (Chen, Motiwala and Khan; 2003). However, impact of web also caused some
issues of an ethical nature. Whysall (2000) suggested some of them: customers privacy
and confidentiality, tracing customers email and visited websites, and exclusion of some
segments of customers lacking net access.
Impact of web in retail sector introduced brick and mortar organizations to multi channel
retailing. Levy and Weitz (2009) describe multichannel retailing as the set of activities
involved in selling merchandise or services to consumers through more than one
channel. That means introduction of web as another channel for retail sector besides
physical stores. Impact of web is not confined only as another channel for reaching upto
customer. It is becoming the most important tool for customer service. Harris and
Ogbonna (2001) concluded that the major retailers try to differentiate themselves from
competitors on customer services. Retail sector is facing new challenges and
opportunities in the presence of web. The market for store based retailer is limited to the
local trading area of the store. With the addition of web the retailer is enabled to exploit
economies of expanding market without making any physical store.
Aggarwal (2007) Highlights the emergence of organized retailing in India and views the
Catalytic effects of retail on Indian Economy. Tusharinani (2007) noted the
transformation of traditional and malls taking the lead in attracting consumers in the
metro cities. Goyal and Aggarwal (2009) opine that In India, a consuming class is
emerging as a result of increasing income levels and dual career families with high
8

disposable incomes. Urban class of Bangladesh is also experiencing the same socio
economic growth. With retailers eyeing their presence in market, internet has brought a
new dimension in attracting these new consumers. This led us to online shopping.

2.2 Online Shopping

Ghayel and Dhingra (2012) affirmed online shopping as the act of purchasing products
or services over the internet having the product or service delivered directly to the
consumer themselves. The consumer can find information about different models of an
item, different colors choice, and different brand choice doing their comparisons before
leaving the house. Birkin, Clarke, & Clarke, (2002) described online shopping as a
single, homogenous activity, the selling of goods and services via the World Wide Web
(www).
The low adoption of internet to make purchase in retail stores by Bangladeshi
consumers is a big challenge for the industry growth. The use of the web for shopping is
culture bound and, therefore its adoption from one country to another is influenced by
culture. This view is corroborated by Rogers (1995) who explained that the degree of
compatibility of the information technology and its various uses with the values and
norms of a social system influences its diffusion pattern in that social system. Suki,
Ahmad, & Thyagarajan, (2002) have also indicated that one of the obstacles which limit
the development of online retail locally is related to the culture or the behavior of
customers when it comes to buying goods and services through web. In Bangladesh the
Internet is not compatible with the retailers culture of selling through physical stores and
consumers entrenched behavior of physically visiting the stores, touching, feeling and
comparing products before actual purchase is made. Al-Fadhli, (2011) contended that
inability of consumers to inspect a product prior to purchase hinders online shopping in
Malaysia.

2.3 Purchasing intention:

According to business dictionary purchasing intention defined as a plan to purchase a
particular good and service in the future. According to Fishbein and Ajzen, purchase

intentions are defined as decisions to act (Ajzen, 1975). As studied by Eagly and
Chaiken (1993), purchase intention is defined as psychological states which represent
the individuals perception to engage in a particular behavior. According to Howard and
Sheth (1967), in its simplest form, predicting purchases rests on the stage preceding
actual purchase, and is referred to as intention to purchase. There are some various
theories results with, purchase intention helps predict following purchase. Sarigiannidis
and Kesidou (2009) contend that product involvement positively affects consumers to
shop online and It is concluded that privacy have no effect over consumers intentions
towards online shopping.

2.4

Factors Influencing Consumer`s Purchasing Intention

2.4.1

Security

A further barrier the adoption of the Internet to make transaction in the retail industry is
security concerns by the prospective and actual shoppers. Security is defined as a set
of procedures, techniques, and safeguards designed to protect hardware, software,
data, and other system resources from unauthorized access, use, modification, or theft
(Davis, Bagozzi, & Warshaw, 1989). The impact of web on retail industry is negatively
affected by the online shoppers concern regarding fraud and security. Ratnasingham,
(1998) highlighted that fear of online credit card fraud has been one of the major
reasons customers have not done more extensive online buying. In addition, Lee &
Turban [2005] lamented that consumers cannot physically check the quality of a product
or monitor the safety and security of sending sensitive personal and financial
information while shopping on the Internet. From the foregoing, security challenge is a
real one that should be tackled headlong to encourage more Bangladeshi to adopt
online shopping.
As users get accustomed with new technology, they learn the usefulness and risks
associated with the technology. Torkzadeh and Dhillon (2001) defined perceived risks
an assessment of uncertainties or lack of knowledge about the distribution of potential
outcomes. Perceived risk is a major challenge for the growth of online shopping in retail
sector. De Ruyter, Wetzels, & Kleijnen (2001) argued that while there are other factors
10

affecting consumers adoption behavior on the Internet, perceived risk is a barrier to the
repatronage and purchase on the Internet. Similarly, Salisbury, Pearson, Pearson, &
Miller (2005) affirmed that perceived risk may influence the attitude and behavior of
consumers towards the Internet services. Uncertainties about how customers financial
information is treated by retailers will increase perceived risk associated with online
transactions, and reduce their willingness to adopt online shopping.
Yang and Jun (2008) found that reliability was the most important dimension for Internet
purchasers even when compared to access, ease of use, personalization, security, and
credibility. Internet non-purchasers, in contrast, consider security as their most critical
concern. Customers actually evaluate a websites reliability based on whether it
provided them with reliable information and safe transactions. Yen and Lu (2008)
identified some variables such as efficiency, system availability, privacy and fulfillment
as the dimensions of e-service quality. Then they examined the linkages among
dimensions of e-service quality, customer satisfaction and loyalty. Results revealed the
dimensions of e-service quality directly influence customer satisfaction. Subsequently,
customer satisfaction positively affected loyalty. Nevertheless, Cuneyt and Gautam
(2004) claimed trust in the internet shopping with advanced technology, and frequent
online shopping to the internet being secured as a trustworthy shopping channel.

2.4.2

Time Saving

Time saving is one of the most contributing factors for online shopping. Online shopping
can reduce peoples effort and save time. Rohm and Swaminathan (2003) asserted that
online shopping saves time during the purchasing of goods and it can eliminate the
traveling time required to go to the traditional store. Notwithstanding of that, some argue
that the delivery of products or services over online is time consuming. Similarly
Corbett, (2011) pointed out that time saving is not the motivating factor for the
consumers to shop online because it takes time receiving goods or delivery. But time
saving factor can be seen through different dimensions i.e. person living in Florida can
11

shop at Harrod's in London (through the web) in less time than it takes to visit the local
Burdines department store have concluded that time saving factor was reported to be
primary reason among those consumers who have already experienced the online
grocery buying (Alba et al. 1997, 2000). So the importance of the time saving factor
cannot be neglected as motivation behind online purchasing. Additionally Goldsmith and
Bridges emphasize that there is a discrimination between online shopper and non online
shoppers, online shoppers are more worried about convenience, time saving and
selection whereas non online shoppers are worried about security, privacy and on time
delivery (Bridges, Goldsmith and Bridges (2000)). A study by Kamariah and Salwani
shows higher website quality can highly influence customers to shop online (Salwani,
Online shop, 2005).

2.4.3

Website Design/ Features

Website design and features is one of the most vital influencing factors of online
shopping. Shergill

& Chen (2005)

point out that Website

design, website

reliability/fulfillment, website customer service and website security/privacy are the most
attractive features which influence the perception of the consumer of online buying.
Kamariah and Salwani (2005) claims the higher website quality, the higher consumer
intends to shop from internet. Web design quality has important impacts on consumer
choice of electronic stores, stated by Liang and Lai (2000). Website design one of the
important factor motivating consumers for online shopping. Almost 100,000 online
shoppers surveyed by (Reibstein, 2001) shows that web site design was rated as
important factor for online shopping. Another study conducted by Zhang, Dran, Small,
and Barcellos (Barcellos, 1999, 2000), and Zhang and Dran (2000) indicated that
website design features of the website are important and influencing factors that leads
consumers satisfaction and dissatisfaction with a specific website. A study conducted by
Yasmin and Nik (2010) shows a significant relationship between online shopping activity
and website features. Website design features can be considered as a motivational
factor that can create positive or negative feelings with a website. A study by Li and
Zhang (2002), if website is designed with quality features it can guide the customers for
12

successful transactions and attract the customers to revisit the website again. However,
worse quality website features can also hamper online shopping. According to Liang
and Lai (2000), web design quality or website features has direct impact on user to shop
online.
2.4.4

Convenience

Convenience factor cites that it is rather easy to browse or search the information
through online than the traditional retail shopping. Consumers can easily search product
catalog through online but if the consumer look generally for the same product or item in
a traditional store manually it is difficult to visit physically and time consuming also.
Convenience has always been a prime factor for consumers to shop online. Darian
(1987) mention that online shoppers carry multiple benefits in terms of convenience,
such as less time consuming, flexibility, very less physical effort etc. Bhatnagar and
Ghose (2004) claims for convenience as one of the most important advantage for online
shopping. Wilsonz, (2007) affirmed that the major motivation for online purchasing is
convince in terms of shop at any time and having bundles of items delivered at door
step.

2.4.5

Online Shoppers in terms of Demography

Another aspect of online shopping in retail sector is shoppers in terms of demography.

We would like to study demography in terms of age, gender, income and education to
identify the purchase behavior related to these terms. Studies have shown that online
shoppers mainly consist of people with Higher education and income and working in
middle to senior management or professionals (Qinghe; Wenyuan and Kaiming 2010).
Miller (1996) claims cyberspace is the domain of young people. Sim and Koi (2002)
states as main discriminating factors appeared to be gender and income. Customer
segmentation is important for electronic commerce success. Miller (2010) has focused
on demographics to show the profile of Internet users.

13

2.5

Return Policies

Product return is an important component of organizations customer relationship

management strategies. Click organizations can differentiate their service by
implementing product return policy. Similarly, Petersen and Kumar (2009) point out that
current return behavior has an inverted-U relationship with the likelihood of future
purchases and customer lifetime value. It is also shown that increase in leniency of
return policy enhances trust and convenience and hence leads to a higher likelihood of
repeat purchases. However, it also leads to a higher likelihood of repeat returns (Wood
2001). Similarly, Anderson, Hansen, and Simester (2009) show that as the option value
of returns is increased, customers are more likely to make repeat purchases. Kushwaha
and Shankar (2007b) assert that ignoring customer return behavior in marketing
resource allocation decisions may lead to suboptimal outcomes.

3
Impact of Web in retail sectors of developed countries :
Online shopping has become an integral part of most consumers day to day behavior.
Forrester Research, Inc. conducted a survey which shows that more than 40% percent
of the population in Western Europe purchase goods online. Moreover, 50% of
consumers of Germany, Switzerland and France are doing so. This trend is set to
14

continue with the European average set to rise almost 10 percentage points to 49% by
2015. In the UK and the Netherlands this figures are projected to approach 70% by
2015. In the US, 67% of consumers shop online and online sales are projected to
achieve a 10% compound annual growth rate, generating $279 billion by 2015.
In developed countries consumers use a number of different channels to make a single
purchase. An example of this kind of transaction is researching a product online and
then buying it in store. Sue and Lisa (2012) found that more than 80% of all
respondents conduct online research before they buy electronics, computers, books,
music, and movies. Eighty-eight percent of US respondents said that they research a
product online via their PC before

buying (vs. 80% globally) and 73% of US

respondents report that they research online when buying clothing, footwear, toys, and
health and beauty products (vs. 60% globally). In other words, online research doesnt
just lead to online purchases, its also critical in leading to purchases through other
channels and in driving traffic to physical brick and mortar outlets.
One of the major findings from Sue and Lisa (2012) was the self-described
sophistication of the online shoppers they surveyed. Many of their respondents
considered themselves to be highly capable in terms of researching and purchasing
online. In fact, 72% of US respondents consider themselves to be either confident or
experts in this regard (fig X) slightly besting the 69% of their global respondents that
consider themselves to be at this same level. Why is this so relevant for retailers? As
well see, this online savvy comes with increased demands for faster service, more
selection, and more transparent information in the shipping and tracking of goods. While
retailers' online operations are evolving, consumers are being forced to find ways to
make the system work for them. Regardless, online sales are growing at the expense of
traditional retail outlet sales. According to Forrester Research, Inc., 70% of the overall
growth in online sales in 2010 came from existing shoppers simply buying more online.

15

Fig. X: 72% of the US sample consider themselves accomplished online

shoppers.
According to Sue and Lisa (2012) not only do global online shoppers consider
themselves experts, but they are also buying across all product categories.
Staggeringly, more than 90% of global online shoppers buy books, music and films,
clothing and footwear online. Even the categories at the bottom end of the online
purchase scale, such as jewelry, watches, sports equipment and outdoor goods, attract
over 60% of online shoppers.

3.1 Critical factors for determining Popularity in online retail

shopping:
Sue and Lisa (2012) claimed a great deal of global consistency in the top five factors
which determine attractiveness about online shopping, regardless of nationality or
geography. The conventional wisdom is that the issue of price is the driving force for the
growth of online shopping, and indeed, it does feature among the top three reasons
cited by their survey respondents (Fig.Y). Interestingly, however, the top factor given is
24/7 access to shopping, or the convenience factor cited by 28% of the online shoppers
we surveyed. Online shopping is all about freedom and being able to shop wherever
and whenever you want. As for selecting a specific online outlet after embracing the
16

convenience factor of the online shopping modelthe key factors include reasonable
pricing, free and fast delivery, and a wide range of products from which to choose.
Retailers really need to integrate these key consideration factors into their business
models. According to PwC's Experience Radar 2011: Insights for the US Retail Industry,
retailers can gain an additional margin opportunity of 8% to 12% by offering free
shipping, yet 59% of retailers charge for shipping products. Perhaps even more
impactful is the fact that 2 out of 3 US consumers say they are likely to cancel a
purchase without free shipping.

Fig. Y: When it comes to online shopping, the convenience factor rules

3.2 Smartphone and tablet devices are adding a new

dimension in retailing:
According to Richard Levis (2013) the movement of online retail activity from desktop
PCs to Smartphones and tablet devices represents a new phase in the evolution of
retail. The pace of change has been dramatic. Since the first fully internet-enabled
mobile phones hit mass market in around 2007, the number of smartphone users in the
UK alone has exploded to over 26 million people and continues to rise, according to
17

data provider, comScore. Around half of smartphone users are using them for some
kind of shopping activity, which principally means browsing retail sites, researching and
comparing prices, but also ordering goods for delivery or collection. In the United States
meanwhile, the proportion of ecommerce being carried out using mobile or tablet
devices has grown from almost zero to around 10 per cent in just a few years (Fig Z).

Fig Z: Percentage of total US ecommerce dollars spent via mobile or tablet device
Source: comScore Mobile Measurements, August 2012

3.3 Shift from store-based retailers to non-store retailers:

On the spectrum of online integration, retailers range from store-based, bricks and
mortar at one end, to online only, pure-play at the other. Between the two extremes lie
retailers who combine physical and virtual retail elements to varying extents, most often
labelled multi-channel. These broad categories have existed for years, but According to
Richard Levis (2013) the balance is increasingly shifting away from traditional bricks
and mortar. Store-based retailers are leading the change by integrating the internet into
their business models as a part of multi-channel strategies. In the UK and US, for
example, online retailing is dominated by store-based legacy retailers that have moved
to multi-channel, according to retail consultants, Javelin Group (Fig A).

18

Fig. A: Ecommerce sales for the UKs leading multi-channel retailers, 2011-2012
Source: Javelin Group, November 2012

3.4 Consumers are being more influenced socially

According to Debbie Oates (2011) the purchasing decision used to be a relatively
private affair potentially informed by manufacturer or retailer driven information and
canvassing close friends or relatives opinion. Nowadays consumers now actively seek
recommendations/reviews about brands or particular product pre-purchase. Debbie
Oates (2011) suggested that this is particularly relevant for commodity type purchase
groups where 20% of purchases are influenced by reviews. People are also influenced
by what friends within their social networks are saying about particular products they
have purchased, this varies between 5-10% in category purchasers with Books, Music
and Games and Clothing most influenced. Taking this one step further, 5% have actively
sought feedback on a potential product purchase from Twitter or Facebook followers on
their mobile again demonstrating how online behaviors will begin to infiltrate the High
Street.

3.5 Addressing target consumers individually

According to Richard Jenkings (2011) todays consumer is better informed, more
discerning and more focused than was the case in the past. Retailers are taking these
19

changes into account as they try to optimize store and online range selection.
Fulfillment is also a major issue. Some things are being sold or delivered in a different
way, but other goods are not being able to benefit from the same degree of flexibility.
Clearly, consumers having the ability to research the products in which they are
interested, even if they dont go on to buy them in the store, is a very important factor.
Experian has analyzed consumer behavior in this area, looking at how it differs by
market sector. Experian Hit wise can measure who goes where, what they do, whether
or not they buy and predict how different groups of consumers are likely to react to
marketing campaigns. The most exciting thing what technology made available today is
the ability it gives marketers to tailor marketing materials, to ensure that targeted
consumers receive material that is as relevant as possible to their needs, desires and
preferences. The traditional practice was to send most people in the country a brochure
in the post. Now retailers can target consumers who have responded to similar
approaches in the past, or those whose profiles reveal the right sorts of lifestyles and
the ability to pay for the goods or services on offer. With more people using more
intelligent mobile devices, marketers now have the ability to create ever more
sophisticated tailored communications, targeting particular groups of people and the
type of communication methods they prefer; and bringing geography into the structuring
and planning of marketing campaigns.

3.6 Global variation in online retail

We see that the extent of online retail penetration varies significantly from country to
country. Richard Levis (2013) claimed that the UK appears to have one of the most
advanced online retail sectors, with sales rising as a proportion of overall retail spending
from 3 per cent in 2007 to over 9 per cent in 2012. Internet sales growth is clearly
outpacing retail sales in general (Fig. B). In the USA, official data show internet sales
approaching 5 per cent of total sales in 2010, up from around 1 per cent just ten years
previously. Unofficial surveys place the figure closer to 9 per cent for non-food retail in
2012. Again, online sales are growing significantly faster than all retail sales (Fig C).
It seems that mainland Europe is lagging behind, with only around 3 per cent of sales
occurring online overall. But there is huge variation across European countries, with a
20

broad division between the northern core and southern states (see Fig. D). According
to Richard Levis (2013) online retailing is growing at an explosive rate. In China, for
example, by 2012 the ecommerce market is expected to have grown from virtually zero
to over 1 trillion Yuan (approx $160 billion USD) in under a decade.1 the extent to which
online and multi-channel retailing penetrates traditional store-based retailing is related
to a range of pre-existing conditions. The countries most exposed are likely to be
relatively affluent and have fast, high-quality digital and transport infrastructure. A global
comparison of e-readiness and logistics performance provides a top-level indicator of
those countries most pre-disposed to online retail penetration (Fig. E).

Fig. B: UK internet sales vs. all retail sale

Source: Thomson Reuters DataStream

21

Fig. C: US quarterly retail sales growth total and ecommerce

Source: US Census Bureau, Q3 2012

3.7 What may be the future scenario?

We have seen that online-only sales are growing rapidly in many countries. It is difficult
to predict how far online-only retail channels will grow, but the UK provides us with a
useful indicator of how it may progress in other countries. According to Richard Levis
(2013) by 2020 around 20-25 per cent of retail sales will occur online (up from around
10 per cent today)? This estimate includes sales as part of multi-channel retailing. Aside
from the physical and economic barriers described above, limits to the growth of onlineonly retail channels mainly relate to distribution costs and practicalities. Richard Levis
(2013) suggested a huge potential efficiency gains through, for example, the
standardization of packaging, subscription-based delivery models, night-time delivery
options and purpose-built collection/return facilities, such as lockers. Potentially, these
could significantly increase the penetration of internet-only retailing above current
assumptions; with more serious implications for traditional retail property. Richard Levis
(2013) proposed a large change further ahead by emergence of 3D printing. This
technology has the potential to turn current models of the manufacturing and distribution
upside-down by providing the ability for consumers to find, buy and produce goods at

22

the place they are consumed. This would have significant consequences for retail and
distribution property as we know it today.

Fig. D: EU percentage of individuals making online purchases in the last three months
Source: Eurostat, December 2012

23

Fig. E: E-readiness vs. logistics performance by country, 2012

Source: World Bank, World Economic Forum, Aviva Investors, January 2013

Overview of Online Shopping services and its

prevalence in Bangladesh

Bangladesh Online shopping along with the online shopping is the process through
which consumers directly buy goods or services from a seller in real-time, without an
intermediary service, over the Internet. It is a part of electronic commerce. As
technology is becoming an everyday accessory and rate of Internet penetration is
increasing like wild fire people tendency to on-line shopping is on rise. The total number
of Internet Subscribers has reached 44.081942 million at the end of October, 2014.
(Source: BTRC)The most important reason behind a rise in on-line shopping trend is
time scarcity of modern life style. We are now living in an age of scarce time. Shopping
regularly for daily products is a luxury to this time scarce society. As the trends show in
near future the rate and extend of on-line shopping will be increased in manifold. Online shopping is going to be a boom and one of the most growing business sectors of
country. Taking indicators like increasing Internet penetration, life style change, time
scarcity into consideration it can be a safe prediction that online shopping will be a
24

phenomenon in near future. Realizing the demand a number of on-line shopping sites
have been started their journey to make life easier and lazier. An online shop, e-shop, estore, internet shop, web shop, web store, online store, or virtual store are used as the
physical analogy of buying products or services instead of bricks-and-mortar retailer or
in a shopping centre. The process is called Business-to-Consumer (B2C) online
shopping. In Business-to-Business (B2B) online shopping, a business buys from
another business. The largest online retailing corporations are eBay and amazon.com
both based in the USA. One of the first known Web purchases took place in 1994. It
was a pepperoni pizza with mushrooms and extra cheese from Pizza Hut, a somewhat
appropriate purchase for the early days of the Internet. When Amazon came on the
scene not long after, selling books online was a curious idea. The timeline below
highlights the emergence and evolution of online shopping year by year:
Time
1990

Emergence & Evolution

Tim Berners-Lee created the first World Wid
Web server and browser.

1991

Internet Commercialized National Scien

Foundation releases its grip on the Internet

1994

One of the first products to be sold on line wa

a pepperoni and mushroom with extra chees
by Pizza Hut.

1995

EBay, Dell and Amazon.com, the future

Giants of online shopping were Founded

an explosion is created with google.com

social networking sites nowadays nothing
off-limits for selling online
Table 1: Emergence of Online Shopping

1999 onwards

4.1 Bangladesh Economy Overview

25

The economy of Bangladesh is a rapidly developing market-based economy. Its per

Capita income in 2013 was estimated to be US$2810(adjusted by purchasing power
parity; Source: World Bank). According to the International Monetary Fund, Bangladesh
ranked as the 63rd largest economy in the world. The economy has grown 5-6% per
year since
1996 despite
political
poor
infrastructure,
corruption, insufficient
Sector
Wise
GDPinstability,
Change
over
the Decade
power supplies, and slow implementation of economic reforms. Bangladesh remains a
70overpopulated, and inefficiently-governed nation. Service sectors growth rate had
poor,

been
60increased from the birth of our country and it reached maximum around 60% in
2000.
50 Now it is 52%. Though it has declined but again we are very much52optimistic
about
40 the intensification. It is a good sign for our country because in developed
countries
service sector contributes more share in total GDP
30

than other sectors.

Bangladeshs
growth was resilient during the 2008-09 global financial crisis and
20
recession.
10
0
1941-1950 1951-1960 1961-1970 1971-1980 1981-1990 1991-2000 2001-2011

Retail trade is one of the traditional businesses of Bangladesh. Its expansion is keeping
pace with population growth and changes in consumption patterns, which are consistent
with the growth of the economy. Of the retail trade, the newest type is the superstores
26

which have only began appearing around the year 2000. Since then, their expansion
has been rapid. This expansion has not been structurally organized, because, until
recently, retailing had never been perceived as an industry, but rather as an individual or
family business entity with a very limited scope of organized expansion. Little to no
market information is available on the retail sector, but secondary sources indicate that
the size of the food retail sector in Bangladesh could be US$12-14 billion, and the
number of retail grocery shops could be around 1 million. Retail is one of the biggest
sources of employment (12 percent), and it contributed 13 percent (wholesale and retail
trading) to Bangladeshs GDP in 2001/02.The annual turnover of the superstores now
stands at around Tk 15.0 billion (1500 crore), according to Bangladesh Supermarket
Owners Association (BSOA). (Source: Internet)

4.2 Market structure of superstores

In Bangladesh, organized retail outlets are relatively few and remain concentrated in the
major cities. The off-take by consumers is limited (less than 5 percent of total food
consumption comes from these outlets).They usually procure their products from
importers or distributors for imported items, and from distributors or suppliers for the
local products. Organized sector retailers normally maintain established supply lines
(drawing

from establishments with storage

capacity) for

imported products, and

access both established and casual supply lines (once-in-a-while suppliers with no
storage) for local products. Depending on the size of the outlets, they engage 200 to
400 distributors or sub-distributors (dealers) for consistent availability of their
commodities. Most importers source their goods in mixed containers from the country of
origins or from consolidators in Dubai or Singapore, except those that arrive in high
volumes, like fresh fruits.

27

Figure 1 The Market Structure of the retailing industry of Bangladesh. (Source:

USDA Foreign Agricultural Service, 2013)
Included in the category of supermarkets, around 30 medium-sized super stores, and
200-250 other convenience stores are located in the posh areas of Dhaka and other big
cities. The share of imported food products currently handled by these outlets is very
small, and items include fruit juice (both powdered or liquid); canned fruits,
vegetables, and fish/meat; jam/jelly; sauce/ketchup; edible oil; dry milk powder; salad
dressings; spaghetti/vermicelli; olive oil; coffee; fresh fruits; and chocolates, biscuits,
and cookies. The biggest constraint facing this sector is the extreme scarcity of space in
the appropriate areas: land is almost unavailable and is very costly.

4.3 Internet and online shopping in Bangladesh

In 1996, the first VSAT base data circuit was introduced through 2 Internet Service
Providers (ISPs) connecting Bangladesh to the world wide web for the first time. By
2005 there were about 180 registered ISPs operating in Bangladesh. The First ecommerce site clickbd.com started operations in 2006 which was the same year that
Bangladesh got connected with the latest technology of a submarine optic fiber cable. In
2007, Cellbazar, an MIT Lab project inaugurated operations bringing the bazaar to the
hands of 20 million GrameenPhone Subscribers. In 2008, Broadband and Wimax
internet services were first introduced in Bangladesh which improved speed, penetration
and user experience
An influx of e-business sites opened up

Rokomari.com
28

Foodpanda.com

Hungry naki.com

Chaldal.com

bdhaat.com

Hutbazar.com

Aarong.com
meena bazar.com
shwapno
Rang
BdGiftz.Com
Giftinbangladesh.com
Deshigreetings.com
Hutbazar.com
Egiftbd.com
Arfigift.com
Giftzhaat.com
Bangladeshgiftcorner.com
Ekhoni.com

5 Service offering of the select physical and online stores

5.1 Physical Stores

5.1.1 Aarong

The word Aarong means village fair and the Aarong brand is meant to invoke a deeper
connection to its rural roots. Born out of a humble resolve to empower the marginalized
rural women and enable them to realize their full potential, Aarong is one of the 18
social enterprises of BRAC - the worlds largest development organization. It has been
working towards BRACs mission of poverty alleviation through economic development
and human capacity building, with a specific focus on the empowerment of women.
Aarong was initiated in 1978 as a project to ensure poor silk farmers, block printers and
29

embroiders in Manikganj in central Bangladesh were paid upon delivery of their

products. The purpose was to provide a platform for rural artisans where they could sell
their products and get a fair market price. Starting its journey with providing employment
for a limited number of rural women, Aarong rapidly extended its support by working
with many other artisan and crafts.
5.1.2 Meena Bazar

Meena Bazar is a well reputed retail supermarket chain in Bangladesh with International
standards. It started its operation in 2002 and runs outlets in Dhaka, Chittagong and
Khulna division. Every Meena Bazar outlet carries almost 6,000-8,000 products to sell.
It provides convenient shopping experience, friendly customer service along with easy
parking provisions for its customers. Meena Bazar is a subsidiary of Gemcon Group. It
also produces organic products, dairy items, prepared food & herbal products.
Meena Bazar is the first retail superstore in Bangladesh that has a website to shop
online. They launched their website in April, 2012, and now they deliver in Dhaka,
Khulna and Chittagong. They took this initiative to make customer life easier. Online
shopping with Meena Bazar saves time and it is also very convenient for our customer
as we face more more traffic these days.
5.1.3 Agora

With outlets in major locations throughout Dhaka, and many more being planned in
Dhaka and other major cities, Agora is endeavouring to fulfil the everyday needs of its
customers by providing the right quality, assortment and price through stores of various
forms and sizes.While Agora mainly focuses on food items - ranging from a wide variety
of fish, meat, vegetables, fruits, bakery, dairy, and grocery - it also carries a vast array of
other grocery, personal care, and various other consumer goods and household
utensils.
5.1.4 Rang

Since 1994, Rang has been contributing to the growth of handloom and handicraft
industry. With the motto of painting time Rang has introduced a new dimension of
novelty in the trend of clothing. Rangs concept of fashion has evolved round the quest
for and celebration of national heritage. The predominant ingredient of our products
being indigenous colours and fabrics, the ideology of Rang is to spread an aesthetic
30

experience among our people. Going beyond the typical point of commerce and being
urged by the values of our heritage and a clear sense of commitment Rang arranges
special programmes to observe festivals and rituals. Ahead of all such occasions our
customers now wait with keen interest to see our response to every socio-religious
festivals. At the centre of Rangs concept of fashion is the spirit of variety and variation
in our application of colours. The same urge has been essentially reflected in most of
our products. Through the simultaneous motivation of flourishing our handloom and
handicraft industry and introducing ever new products Rang has come to be esteemed
as one of the leading fashion entrepreneurs of the country.
5.1.5 Shwapno

Best Price with Quality and Value- this was the premise with which ACI launched its
mega retail operations Shwapno. On 0ctober 2008, Shwapno embarked on its journey
with a network of 40 outlets across Dhaka, Chittagong and Sylhet and till date it holds
the

position

of

the

largest

neighborhood

supermarket

chain

in

the

Bangladesh. Shwapno outlets across Bangladesh are strategically located to ensure a

wide range of customers have easy access to them. Shwapnos diverse range of
products, both local and international, means it has the capacity to cater to the needs of
clients from all walks of life. Meticulous product and service placement is done to
guarantee the outlets meet the needs of the locality and these demands are met
effectively.

5.2 Online Stores

5.2.1 Rokomari.com

Rokomar.com is a Bangladeshi Online Shopping Portal. Rokomari.com launched in

January 19, 2012 as an online bookstore and it will soon start selling eBook, Mobile
Phones, computers and accessories, cameras, consumer electronics, CDs/DVDs,
paintings, tickets, handicrafts, home appliances, apparels, gift items, food, toys and
directly imported goods. Rokomari.com is an ecommerce venture of Onnorokom Web
Services

Ltd,

sister

concern

of

Onnorokom

Group.

They have introduced some path-breaking services like Cash on Delivery all around
Bangladesh, Order by Phone, Minimal shipping charge (Only 50 Taka shipping cost on
31

any amount of purchases), Discount. They want to deliver WOW through our Customer
Service. Their team makes your online shopping easy & fun with a user-friendly
shopping interface. They maintain highly customer-centric practices, including great
products and multiple payment options to make shopping with Rokomari.com as an
easy,

smarter

and

hassle

free

experience.

Rokomari.com is on a mission to drive Bangladeshs most comprehensive virtual

business that helps customers make informed choices and extract the best value for
their money.
5.2.2 Foodpanda

They are a small team of problem solvers, designers, thinkers and tinkers, working
around the clock to make Foodpanda the most powerful online tool for ordering food in
the universe. They believe that ordering food should be easy, fast and definitely fun!
They

wanted

something

simpler,

so

they

made

it.

Foodpanda has online menus from the staggering selection of delivery restaurants
around us. Anybody can avail good food simply entering his/her area and search for
cuisine type, restaurants or even price range. The restaurant index also includes
address and delivery hours. No online food delivery is too difficult for Foodpanda!
Ordering food filtered to your needs has never been made easier. Foodpanda
Bangladesh is part of Rocket Internet group.
5.2.3 hatbazarbd.com

hatbazarbd.com is an online marketplace featuring discount deals with popular

businesses like Internet services, Luxurious restaurants, Hotels, Transports, Beauty
parlors, Fashion houses, Theme parks, Gymnasiums, Furniture shops, Sports &
Recreation centers, etc. They provide consumers with quality and demand able
products in cheap, and the businesses with a ton of customers. Businesses need
customers & profit also, Customers need products but at low cost, and hatbazarbd.com
solves this riddle. Their mission is to increase sales of our merchants and create
wonderful buying experience for their consumers. They create happiness for both their
merchants and consumers.

32

5.2.4 HungryNaki.com

They are a team of dedicated, food enthusiasts who welcomes us to order food online
and have it delivered to our doorsteps. They truly aim to serve other food enthusiast
long term and in international standards. Customers no longer have to wait in queues
for takeaways or sit in traffic jam while the food gets cold or even carry hot packed food.
They will do all that for us. Their goal is to facilitate customers to get food without having
to spend a sweat. They help customers find the right restaurant, caf, and any other
eatery in customers neighborhood, to order food online. They have peoples favorite
nearby restaurants listed down to order food online.

5.2.5 Chaldal.com

Chaldal.com is an online shop based in Dhaka, Bangladesh. It is a service rooted on the

idea that shopping for necessities should not be a burden. At Chaldal, we believe time is
valuable to our fellow Dhaka residents, and that they should not have to waste hours in
traffic, brave bad weather and wait in line just to buy basic necessities like eggs. This is
why Chaldal delivers everything customer needs right at his/her door-step and at no
additional cost. Chaldal is a work in progress, and they hope to get better over time.
They are firm believers in using technology to improve Bangladesh, and they will
continue to invest all our effort in pushing the boundaries of technology in this country.

6 Analysis of business players: Context in Bangladesh

6.1 PEST Analysis
PEST analysis gives a larger picture of the macro-environment of the industry. The
analysis is done so that the industry can prepare itself for the future changes
withchanging factors in the business environment. The PEST model will help by
categorizing

the

macro-environment

in

to

political,

economic,

social

and

technological.We did PEST analysis of the retail sector of Bangladesh and tried to figure
out which factor has the highest effect on the industry environment.

33

6.1.1 Political

Government stability:In Bangladesh the government and political situation is very

unstable which has some direct effects to some extent in the industry.
Political Disruptions: This service is affected negatively during political unrest like Hartal,
Strike, and Blockades etc.
Taxation policy: For both B2B and B2C the value added tax (VAT) is 15%. VAT is
applicable for all items (except some of the unprocessed agricultural products) &thirty
five listed services. VAT is leviable at the time of supply of goods and services. Turnover
tax @ 2 per cent is leviable where turnover amount is less than 1.5 million taka. Tax
returns are to be submitted on monthly or quarterly basis.
6.1.2 Economical

Inflation: Inflation rate is 6.60% in November 2014. The reason for the rise was mainly
for the rise of the food prices. The consumer price index is 206.81. (Source: BBS-2014).

GDP total: $129.86 billion, GDP per capita: $625.34, Total exports: 208.10 BDT billion,
Total imports: 281.24 BDT billion, Total FDI: $1300 million, and Forex reserves: 1698.90
BDT billion. (Source: BBS-2014). This high rate of inflation poses problems for an
online store because this means that prices will tend to fluctuate and may cause loss of
sales or disgruntled customers.
6.1.3 Social

Projected Population

Total

Male
Female

July 2015

July 2019

158.96

167.39

81.63

85.86

77.33

81.51

34

Gender Ratio

106

105.34

As we have a constant growth on population and our country has growing economy
there is a huge potential of online superstore. There are some activities going on social
networking sites which are providing online product to some extent. We have a total of
44.081942 million people who have internet access. They are potential buyer of online
superstore which indicates a huge market of this business. Bangladeshi people are
getting busier day by day. The time to go to shop for shopping is getting difficult for
people like corporate executives. In the metropolitan cities, which are considered in this
business model, the corporate executives and other job holder people are more inclined
to shop online rather than going there physically, which provides the potential of a huge
market.
6.1.4 Technological

Internet: Bangladesh is one of the emerging countries in Internet usage in the world.
The number of IP addresses is proportionate to the number of people. The usage of the
Internet has spread through the country and the number of Internet attacks and viruses,
is quite low. Access to smart phone and internet has brought a revolutionary change in
the service sector. Introduction of 3G and availability of cheaper data package has also
expedited the growth.

6.2 GE MATRIX
6.2.1 GE MATRIX
In

the early 1970s, the management consultant McKinsey & Co in conjunction with

General Electric in the USA developed a comprehensive portfolio planning tool (Hax &
Majluf, 1990b; Aaker, 1995; Jobber, 2007). The General Electric (GE) model was
inspired by the need to develop a method of evaluating the plans of GE different
business units in order to fund the plans with the greatest potential for success and
also by the need to overcome the limitations of the BCG model (Byers et al, 1996).
35

Like the BCG matrix, it is plotted on a two-dimensional grid. But unlike the BCG, which
classifies a business unit on only two criteria (relative market share and market growth
rate); the GE model employs composite measures in classification of business units.
SBUs are plotted against two dimensions: Market attractiveness on the vertical axis
and business strength on the horizontal axis.
6.2.2

Desirable feature of GE

It allows for immediate ranking between high and low, and between strong and
weak

It incorporates explicit consideration of a much wider variety of strategically

relevant variables

It stresses the optimal allocation of corporate resources with a view to achieving

competitive advantage and superior performance.

6.2.3

Criticism of the GE matrix

The GE matrix looks at the current position of SBU but does not take into
account how their future positions might change due to changes in the industry.
It does not also consider how their positions might change due to change in
their lifecycle (Hill & Jones, 1989).

The selection and weighting of factors and the subsequent development of both
firms position and market attractiveness are subjective process. Individual bias
and historical perspective cannot be ruled out in the process (Aaker, 1995).

Many factors are involved in determining both indicators on which the matrix is
based. Aggregation of the indicators is difficult.

There is no standard list of critical external and critical success factor to be

used by all business units. This creates inconsistencies and ambiguity in the
classification of business unit.

The result of the analysis is sensitive to the definition of the business market.

36

Like the BCG matrix it ignores the interdependence of the SBUs in a companys
portfolio.

6.2.4

ANALYSIS OF GE MATRIX

In order to calculate the marketing attractiveness we have considered six factors as

follows overall market size, market growth rate, industry profitability, industry rivalry,
promotion, technological innovation.
Factors

Weight

Rating 1-5

Value

Overall market size

0.2

0.6

Market Growth Rate

0.25

3.5

0.875

Industry Profitability

0.1

2.5

0.25

Industry Rivalry
Promotion

0.2
0.15

3
3.5

0.6
0.525

Technological Innovation

0.1

0.2

Total

1.00

3.05

Table: Market Attractiveness

These factors are assigned with weight based on the significance of the factor on
market attractiveness. From this analysis we

have calculated the market

attractiveness and the value is 3.05.

For calculating the business strength we have considered factors like market share,
service quality, privacy, brand equity, front stuff personal, information technology,
service charge return policy.
Factors
Market Share
Service Quality
Privacy
Brand Equity

Weight
0.15
0.15
0.15
0.125
37

Rating 1-5
4
4
2.5
3.5

Value
0.6
0.6
0.375
0.4375

Front Stuff Personnel

0.05

0.15

Information Technology

0.125

3.5

0.4375

Service Charge
Return Policy

0.1
0.15
1

4.5
2

0.45
0.3
3.35

Factors
Market Share
Service Quality
Privacy
Brand Equity

Weight
0.15
0.15
0.15
0.125

Rating 1-5
4
2.5
2.5
3

Value
0.600
0.375
0.375
0.375

Front Stuff Personnel

0.05

3.5

0.175

Information Technology

0.125

3.5

0.438

Service Charge
Return Policy

0.1
0.15
1

3
2

0.300
0.300
2.938

Table: Business Strength (Food Panda)

These factors are assigned with weight based on the significance of the factor on
business strength. In this analysis we have considered two business organizations
Rokomari and Foot Panda. Both of the organization are providing retail service
through online. The business strenght for Rokomari is 3.35 and for FOOD Panda 2.98.

BUSINESS
5.0

MA
RK
ET
AT
TR
AC
TIV
EN
ES
S

Stron
g

PROTECT POSITION

Medium

Weak

INVEST TO BUILD

BUILD SELECTIVELY

Stron
g
3.6

38

BUILD SELECTIVELY

2.3

SELECTIVITY/MANAGE
FOR EARNINGS

LIMITED EXPANSION
OR HARVEST

Medium

Rokomari (3.35, 3.05)

Food Panda (2.938, 3.05)
PROTECT AND REFOCUS

MANAGE FOR EARNINGS

DIVEST

Weak
1.0
5.0

2.3

3.6

1.0

Both of the organizations are in medium position in terms of market attractiveness and
business strength. The strategic concern for this particula position is as follows:

Protect existing programs

Concentrate investment in segments where profitability is good and risks

relatively low

6.3 BCG MATRIX

6.3.1 Overview

The BCG matrix, invented by the Boston Consulting Group, is a tool that allows to
classify and evaluate business organizations in a particular industry. It is a decision
making tool in order to balance the activities of a company among those which make
profits, those who ensure growth, those which constitute the future of the firm or those
who are its heritage. With this tool one is able to define the development policy of the
company. The matrix will position the organizations in two ways:

The Market Growth Rate

Relative Market Share

The BCG growth/share matrix is divided into four cells or quadrants, each of which
represent a particular type of business.

39

6.3.2 Question Marks:

These are products or businesses, that compete in high growth markets but where the
market share is relatively low. A new product launched into a high growth market and
with an existing market leader would normally be considered as a question mark.
Because of the high growth environment, they can be a cash sink.
Strategic options for question marks include..

Market penetration

Market development

Product development

Which are all intensive strategies or divestment.

6.3.3 Stars:

Successful question marks become stars. i.e. market leaders in high growth industries.
However, investment is normally still required to maintain growth and to defend the
leadership position. Stars are frequently only marginally profitable but as they reach a
more mature status in their life cycle and growth slows, returns become more attractive.
The stars provide the basis for long term growth and profitability.
Strategic options for stars include..

Integration forward, backward and horizontal

Market penetration

Market development

Product development

Joint ventures

6.3.4 Cash Cows:

These are characterized by high relative market share in low growth industries. As the
market matures the need for investment reduces. Cash Cows are the most profitable
products in the portfolio. The situation is frequently boosted by economies of scale that
may be present with market leaders. Cash Cows may be used to fund the businesses in
the other three quadrants.
40

It is desirable to maintain the strong position as long as possible and strategic options
include:

Product development

Concentric diversification

If the position weakens as a result of loss of market share or market contraction then
options would include.

Retrenchment (or even divestment)

6.3.5 Dogs:

These describe businesses that have low market shares in slow growth markets. They
may well have been Cash Cows. Often they enjoy misguided loyalty from management
although some Dogs can be revitalized. Profitability is, at best, marginal.
Strategic options would include.

Retrenchment (if it is believed that it could be revitalized)

Liquidation

Divestment (if you can find someone to buy!)

Successful products may well move from question mark though star to Cash Cow and
finally to Dog. Less successful products that never gain market position will move
straight from question mark to Dog.

6.3.6 Limitations:

Definition (qualitative and quantitative) of the market is sometimes difficult.

It assumes that market share and profitability are directly related.

The use of high and low to form four categories is too simplistic.

41

Growth rate is only one aspect of industry attractiveness and high growth
markets are not always the most profitable.

It considers the product or business in relation to the largest player only. It

ignores the impact of small competitors whose market share is rising fast.

Market share is only one aspect of overall competitive position.

It ignores interdependence and synergy

6.3.7 ANALYSIS OF BCG MATRIX

In the BCG matrix we analyzed four organizations in two business segment. We

considered Food Panda and Hungry Naki in the sector of online service of food. In other
segment we considered Rokomari and BD haat.

Organizatio

Market

Market Share of

Relative

Market

Share

Largest Competitors

Market Share

Growth

Hungry Naki

7%

19%

0.37

10%

Food Panda

19%

19%

1.00

17%

Rokomari

43%

43%

1.00

40%

BD Haat

8%

43%

0.19

15%

42

The market growth rate is shown on the vertical (y) axis and is expressed as a %. The
range is set somewhat arbitrarily. The overhead shows a range of 0 to 40% with division
between low and high growth at 20%. Market Growth Rate indicated individual growth
rate of each organization. Rokomari has the highest market growth rate among all the
organization.
The horizontal (x) axis shows relative market share. The share is calculated by
reference to the largest competitor in the market. Again the range and division between
high and low shares is arbitrary. The original work used a scale of 0.1, i.e. market
Leadership occurs when the relative market share equals 1.0. In the online service for
food sector we considered Food Panda as the largest competitor and in the later
segment we considered Rokomari.
From the Analysis we deducted that Rokomari is in the star position in the BCG matrix.
With a high market growth rate and high market share Rokomari is the market leader.
Nevertheless investment is still required to defend the leadership position. Rokomari will
provide long term growth and profitability. Rokomaris strategic option would be market
43

integration forward, backward and horizontally. Market penetration will be another

strategically important decision for Rokomari. Apart from that Rokomari can introduce
new product or service with collaboration or joint venture.
The analysis shows that Food Panda is cash cow in this industry. Food Panda is doing
business with a relatively low market share in a high growth market. The necessity of
investment reduces as the market gets mature. Food Panda is the most profitable
business in the sector. It is desirable that Food Panda will maintain its position. Food
pandas strategic option would be product/ service development and diversification. To
diversify Food Pandas service it can add more restaurants into its list covering more
geographical areas.
In the BCG matrix Hungry Naki and BD Haat are in the position of dog with a relatively
low market share in low growth market. Profitability is at best marginal in this scenario.
Sometimes dogs can be revitalized. So the strategic concern would be retrenchment. If
not then divestment means if there is someone to buy.

6.4 ADL MATRIX

6.4.1 ADL MATRIX OVERVIEW

The ADL matrix from Arthur D. Little is a portfolio management method that is based on
product life cycle thinking. It uses the dimensions of environmental assessment and
business strength assessment. The environment assessment is an identification of the
industry's life cycle and the business strength assessment is a categorization of the
corporation's SBU's into one of five competitive positions, these five competitive
positions by four life cycle stages.
To assess the competitive position held by a company that operates in a given market,
Florescu, Constantin &
Malcomete (cited in Tudor & Valeriu, 2011) gave the following list:
Supply factor: long-term contracts, labor costs and payment terms;

44

 Production factors: production flexibility and capacity, experience, technical skills,

environmental protection, quality of management, skill of expertise, labor productivity
and production cost;
Commercialization factors: the power and quality of distribution network, credit
conditions, the image of the product, product range, market share, sales force and
price;
Financial factors: profitability, financial stability, cash flow and technological protection
Tudor & Valeriu (2011) pointed out that these performance indicators represented by
market competitive position are valued by reference to competition, using qualitative
and quantitative variables, which make up a set of determinant factors of success
(p.755). On the industry life-stage, each specific stage within the product life-cycle is
identified, assessed, quantified and characterized by a system of indicators, added,
Tudor & Valeriu (2011). Popa (cited in Tudor & Valeriu, 2011) explained that the
competitive position are weighted and scored and this results in several competitive
positions according to company forces in relation to competitors on a given market.
What Popa is saying, explained Tudor & Valeriu (2011) is that these factors change over
time, the business gain or loss ground
in terms of competitive advantage, and eventually they will identify with one of five
competitive positions. Wilson and Gilligan (1992) gave these categories of competitive
positions as:
1. Dominant: This is a comparatively rare position and in many cases is attributable
either to a monopoly or a strong and protected technological leadership. The
implications are that the firm is able to exert considerable influence over the behavior of
others in the industry and has a wide variety of competitive position.
2. Strong: By virtue of this position, the firm has a considerable degree of freedom over
its choice of strategy and is often been able to act without its market position been
unduly threatened by competitors.
3. Favorable: This position, which generally comes about when the industry sis
fragmented and no one competitor stands out clearly, results in the market leaders

45

having a reasonable degree of freedom. Companies with a favorable market position

often have that can be exploited by particular strategies and hence a greater than
average opportunity to increase market share
4. Tenable: Although a firm within this category are able to perform satisfactory and can
justify staying in the industry, they are generally vulnerable in the face of increased
competition from stronger and more proactive companies in the market. The
opportunities for an organization to strengthen its position tend to lower than average.
The profitability of tenable firm is best achieved and sustained through a degree of
specialization.
5. Weak: The performance of firms in this category is generally unsatisfactory although
opportunities for improvement do exist. . Often, however, the firm is either too big and
inefficient to compete with any real degree of effectiveness, or it is too small to cope
with competitive pressure. Unless he firm changes, it is ultimately likely to be forced out
of the market or exit of its own accord.

The Life Cycle Stages

Embryonic: introduction stage, everything is new.
Growth:sales increase, many customers start to know the product.
Mature: market is stable, have many customers and a lot of competition.
Aging: Demand decreases, the companies need to use strategy to add something new
to attract the customers or abandoning the market.

46

6.4.2 The advantages and disadvantages of the ADL matrix

Unlike other models of product portfolio analysis the ADL matrix is based on an
enhanced applicability because it fits to all situations of competition encountered in a
marketplace. Also the ADL matrix can be applied to the fragmented industries, holding a
small competitive advantage but with a large number of ways of obtaining it (provides
multiple ways of differentiation). As such we can say that the ADL matrix has a high
degree of adaptability to situations of a qualitative nature.
A first disadvantage is that the matrix does not take into account a number of
phenomena that can generate long-term involution in the products life cycle of a
company. Another weakness is related to the high level of difficulty in terms of objective
evaluation of the ADL model variables. This is often the case for the competitive position
indicator. In other words, the difficulty lies in the fact that some factors are qualitative in
nature and there is a high risk of bias in their use.
In conclusion, we can say that the ADL matrix provides clearer results as a company is
more diversified and enable synchronization on decisions relating to competition.
47

6.4.3 Analysis of ADL Matrix

Plotting the ADL matrix against the two principal dimensions, the position of the SBU is

LIFE CYCLE
STAGE
represented by the circleINDUSTRY
sizes proportionate
to the size
of the industry where they
Competitive

Embryonic

Growth

Mature

Position

C
O
M
P
E
TI
TI
V
E
P
O
SI
TI
O
N

Dominant
Strong

AARONG
SHWAPNO

Favorable

RANG
AGORA

Tenable

MEENA BAZAR

Weak
belong,

48

Aging

INDUSTRY LIFE CYCLE STAGE

Competitive

Embryonic

Growth

Mature

Aging

Position

C
O
M
P
E
TI
TI
V
E
P
O
SI
TI
O
N

Dominant

ROKOMARI

Strong
FOOD PANDA

Favorable

BDHAAT

Tenable

CHAL DAL
HUNGRY

Weak

NAKI

TABLE: ADL MATRIX FOR PHYSICAL RETAIL

STORE

The analysis consists of two segments, one for online retail service providers and

C
O
M
P
E
TI
TI
V
E
P
O
SI
TI
O
N

another for physical retail stores. In Physical retail store we considered AArong,
Swapno, Meenabazar, Agora and Rang. All the physical retailers are in their mature
stage in their industry life cycle. The analysis found out that AARONG is in strong
position in terms of competitive position. In this particular position aarong strategic
concern would be to

Cost optimization,
Diversification
Hold Position.

Aarong has to cut cost; it should bring diversification in its product and service. This
diversification can be attained with the use of internet. With the increased use of web
AARONG can diversified its service more efficiently. The growth of the AARONG will be
simultaneous along with the industry.
49

SWAPNO and Rang both are in favorable position in terms of competitive position.
Strategic options for both of them will be as follows

Focus
Differentiation
Attack small competitors
Find Niche and protect it.

Agora and Meena Bazar are in tenable position in terms of competitive positioning. The
strategic concern for them would be as follows:

Maintain or Retreat
Find a niche

Agora and Meena Bazar both are targeting niche markets. They are operating in the
higher middle class or higher class areas of the Dhaka city and their target customer is
mainly from the upper class of the society.
All the online retailers are in the growth stage in the industry life cycle. Rokomari is in
dominant position in terms of competitive positioning. The strategic concern for the
Rokomari is as follows:

Defend position.
Act offensive.
Cost leadership.

Rokomari will face rapid development as the industry is still at growth stage and itself
holding a strong position in the market. Rokomari is already at cost leadership by
offering 50 taka per delivery across the whole country.
Food Panda and BD Haat are in favorable position in terms of competitive positioning.
The strategic concern for both of them would be

Differentiation
Attack small competitors
Cut Cost.
50

Chal Dal is in a tenable positon in terms of competitive positioning. The strategic option
for Chaldal is as follows:

Maintain or Retreat
Identify a niche
Aim Growth

BD Haat is in a weak position in terms of competitive positioning. The strategic option

for Chalk Dal is as follows:

Find a niche
Retreat.

6.5 Porters Five Forces Model:

Competitive
Force

Impact of Internet

Threat
of
entrants

new Internet reduces barriers to entry such as the need for a sales force,
access to channels, and physical assets; it provides a technology for
driving business processes that makes the other things easier to do.
Rivalry
among Widens the geographic market, increasing the number of
competitors, and reducing differences among competitors; makes it
existing
more difficult to sustain operational advantages; puts pressure to
competitors
compete on price.
Bargaining
of buyers

power Availability of global price and product information shifts bargaining

power to customers.

51

Bargaining power Procurement over the internet tends to raise bargaining power
suppliers; suppliers can also benefit from reduced barriers to entry
of suppliers
and from the elimination of the distributors and other intermediaries
standing between them their users.
Threat of substitute Enables new substitutes to emerge with new approaches to meeting
products
or needs and performing functions.
services

6.6 Resources and Capabilities:

Yes

Inimitabilit
y
No

Exploited by
Organization
-

Competitive
Implications
Temporary
Competitive
Advantage

Economic
Performance
Above Normal

Yes

No

Temporary
Competitive
Advantage

Above Normal

Organization

Valuable?

Rare?

AARONG

Yes

ROKOMARI

Yes

Valuable resource of Aarong is the introduction of online shopping. Other apparel

distributers provide online services but they neither have the variety nor the coverage

52

that aarong has. Aarong enjoys a huge supplier base especially for handicraft products
which at present none of its competitors have. So this is a rarity for Aarong.
Valuable resource for Rokomari is the service delivery charge (50 BDT) for whole
Bangladesh. The huge and diversified collection of books made rokomari unique in their
line of business.

6.7 The 3Cs Model of Kenichi Ohmae:

Foodpanda
3C's model of Kenichi Ohmae
Corporate-based strategies
Selectivity and sequencing: android and iOS on tablets and mobile devices
Make or Buy: $ 20 billion since hello food press
Cost-effectiveness: base ordering amountfood items worth Tk 300
Customer-based strategies
Segmenting by objectives: can set different rates for party and individual use
Segmenting by customer coverage: operates in Dhaka, Chittagong and Sylhet.
Resegmenting the market: can expand their business by bringing other cities outside
these three under their coverage
Competitor-based strategies
Purchasing:

they partner with 240 restaurants significantly more than any of their

competitors
Design: their website is better designed than its competitors and ease of use is more
Service: can take steps to lessen the present service time of 1 hour 10 min.

53

54

6.8 Business Canvas Model:

6.8.1 Brick Organization

Figure: Business Canvas Model for Brick Organization.

55

6.8.2 Click Organization:

Figure: Business Canvas Model for Click Organization.

56

7 Service Marketing Mix 7 Ps Analysis:

7.1 7 ps Analysis for Click Organization:
Marketing Mix

Rokomari

Chaldal

Product

Books, CD-DVDs, Souvenir,

T-shirts

Price

same price like a retailer

shop, Up to 20% commission
on the stated price, shipping
charge 50tk/delivery
Delivery anywhere in
Bangladesh

Grocery, sweets, electric

appliances, health care,
personal care, pet care, baby
care
Lower price than that of
major superstores in the
Dhaka city, Free deliveries
all over Dhaka city.
Serving all of Dhaka city,
except certain parts of Old
town.
Through Website, direct mail,
word of mouth,

Place

Promotion

People

Process

Physical Evidence/
Servicescape

Advertising on Facebook
(active page with more than
800000 fans), use of banners
all over Dhaka city,
Campaigning in different
festivals like Boimela, Eid,
Birthdays of writers.
Delivery stuff, Tech savvy
Call centre operators,
book readers, internet users
delivery personnel,
comfortable with e-commerce convenient E-commerce
users
Online order (through cart)
Online order delivery
delivery
payment or
payment / on request send
bKash prepayment.
credit card machine with
delivery representative.
Well decorated webpage,
Detail information of goods in
ease of use, high page
web page , lucrative web site.
speed, customers review,
clearly displaying product
reviews, similar product
recommendation.

57

7.2 7 ps Analysis for Brick Organization:

Marketing Mix

Aarong

Meenabazar

Product

Mens wear, womens wear,

childrens wear, home dcor
products, jewellery, wedding
product
Value based pricing

Grocery, health care, personal

care, pet care, baby care
products

Place

serves through 13 retail

stores across the country

serves through 18 retail

stores across the country

Promotion

Billboard, print media, social

media, electronic media,
Shelves, POS displays, Visual
product presentation, word of
mouth.
Cultural minded people, sales
people, cash people

Banner, poster, displays at

point of sale, leaflet, visual
product presentation, product
placement by creating HOT
ZONES & COLD ZONES.
Upper middle and middle
class people, sales people,
cash people
Product selection physically
payment through Visa
Card/Master card or physical
money

Price

People

Process

Physical Evidence/
Servicescape

Product selection physically

or via internet) delivery
payment through Visa
Debit/Credit/Gift Car/Master
Debit/Credit/Gift Card/bKash
/COD (Cash on delivery)
Spacious and colourful
decorated outlets, printed
brochures, invoice, fast-paced
music when overcrowded like
before EID, PUJA etc. slow
music when less crowded,
well designed website.

58

Competitive pricing,

Lucrative physical locations

with increasing visibility, red
and orange colour in meat
section, green colour in
vegetables and fruits section,
troylleyology, white colour in
stationery section and the rest
section with fluorescent
colour.

8 Gap Analysis and Proposed Strategies to overcome

Gap:
The basic characteristic of the Gap model is that it actually puts an accent upon the
over-sights in the quality between the guest and service provider and are directly
connected with the attitudes towards the perception and expectations. This model
demonstrates the process of the development of the service quality (Ljubojevi, 2004)
Market Research Gap Variation between actual expectations of customers and the
way how the management understands their expectations (management does not
understand what customers expect from a service).
Design Gap Represents variation between perceptions of the management about the
expectations of customers and specifications of service quality, i.e. management of a
company realized the actual customers expectations but has not developed a system of
measures which will enable the delivery of a desired quality.
Conformance Gap Represent difference between specification of service quality and
attributes of the process of service production and delivery, i.e. difference between what
managers have defined as standard of service quality and the way how a service was
actually delivered.
Communication Gap Represents variation between delivered service and what
customer was actually told about the service itself.
Customer Expectations and Perceptions Gap Represents difference between
customers expectations regarding the service and their perception about the specific
service. The last gap is the result of all the previous gaps.
Service Quality Model consists of five dimensions.
59

Perceptibility presence of physical elements;

Reliability capability of a promised service to be delivered in a specific manner
Responsibility carefulness, willingness to help and offer a fast service;
Safety knowledge and politeness of the employees and their capability to be

trusted at;
Empathy offer of a personalized service, observing a customer as an individual.

Dimensions

Reliability

Item Instruments

Experience

Perception
Determined and

Satisfactory

Return Policy.

No
Satisfactory

time promised.
Keeping customers

Ensuring by

informed about when the

calling on

service will be performed

Providing Prompt service

mobile

to customers
Willingness to help
customers
Responsiveness to

Empathy

Service Provider

Delivery of promises.

Delivery of services at the

Responsiveness

Customer

customers' requests
Providing customers with
individual attention
Convenient operating
hours
Dealing with customers in
a caring fashion
Having the customers'
best interest at heart
60

Dedicated
No
One hour and 10
minutes.
Ensuring by email
or calling on mobile

Agreed

Determined

Agreed

Determined

Fully

Try their best to be

responsive

responsive.

Satisfactory

Determined

Not
Satisfactory

Plan to make it 24/7

Satisfactory

Determined

Moderate

Determined

Understanding the
customers' requirements
Making customers feel
Assurance

Tangibles
Market Research Gap:

Satisfactory
Not

Determined
Ensured

safe in their transactions

Knowledgeable staff to

Satisfactory

Answer customer

Satisfactory

Ensured

question.
Ordered Food

Moderate

Determined

Management has defined minimum order for taka 300. But customers think it should be
lower than it. Service charge per delivery taka 70 in Dhaka City is also high to customer.
But management thinks service charge is low. Management can minimize this gap by
conducting a in depth market research
Design Gap:
Management understood the customer expectation regarding the quality control of the
food that Food Panda supplies to consumers. Notwithstanding of realizing this particular
expectation, Food Panda is not able to provide the guarantee of the food they supply.
Management can minimize this gap by setting goal regarding customer expectation and
standardizing the service quality.
Conformance Gap
Customers often find it time consuming to order a food by phone as they have to try
several times to get the customer representative. Apart from that wait time is ballooned
from five minutes to eight minutes. This gap can be curtailed by designing appropriate
order of service and customer service stuff training.
Communication Gap:
Food Panda offers that customers can avail different cuisines from different restaurants
described in the website. But in dept interview with the consumers reveal that
sometimes some of those cuisines are not available vai order. This gap is due to

61

exaggerated promises in advertising. This gap can be lessened by providing information

to contact personal to give customers.
Customer Expectations and Perceptions Gap
Distorted information provided by contact personal and management are responsible all
the gaps mentioned above. They can ensure better service through the use of survey.

9 Recommendation:
For brick-and-mortar organizations:

Service is the most crucial part for the success of brick-and-mortar retailers and
technology is the great enabler of service. Utilizing wireless network and access to
online presence on the cloud system, retailers can give customers access to all the
information they need streaming video demonstrations, up-to-the-minute inventory
information, personalized coupons or offers and moreright at the point of sale.
Customers can be served with a team of sales associates enabled and empowered
by mobile technology. One key is making certain that sales associates have as
much, if not more, information about products as the customer has. Another is
making sure associates have the same customer datafrom demographics to
purchasing history to shared likes and dislikesto help them deliver more

thoughtful, more personalized service.

Collecting and leveraging customers personal information have long been staples of
online retailers to provide personalized recommendations. Brick-and-mortar stores
can catch up this method effectively & quickly. By more closely integrating their
online and in-store operations, they can enhance their knowledge and understanding
of customers through integrated data collection and analytics. For example, when a
woman logs onto to a garden centers WiFi network, the system can see that she
has recently purchased vegetable seeds and send coupon for 25% off fertilizer to
her smartphone. A home improvement store associate can see that a customer is an
avid birder so he shows him the stores new shipment of birdhouses. A pharmacy
can inform a loyal customer that her prescription medication has become an overthe-counter drug and offer her a personalized introductory discount. The system can
62

gather information ranging from demographic and psychographic data to purchasing

histories and personal shopping behaviors and make this information available to
sales associates on the floor. In the era of information technology the key to success
is to make sure that every store and every associate has access to the crucial
customer information network has accumulated. The more the system and
employees know about customers, the more it will be possible to provide more
personal, more consistent, more satisfying and more differentiating customer
experiences.
One of the key elements to increase customer satisfaction can be mobile
application. After entering the shop customers can be accessed through the guest
WiFi network. Mobile applications can enable a variety of customer interactions
ranging from greeting a loyal customer to enabling her to check prices with a
barcode scanner to pushing coupons based on her past purchase history. Mobile
applications can include check out capabilities that allow associates to accept
payment using smart handheld devices, eliminating the frustration of waiting in long,
inefficient cash register lines. Mobile applications can even provide customers with
value when theyre not in store. Some of the other mobile app features can be
shopping list aggregation,

viewing a store map, getting product information by

scanning shelf or kiosk barcodes, accessing selected social networking tools such
as likes and peer reviews, finding online help, seeing limited price matching from
respected retailers, requesting associate assistance and streamlining electronic
payment.

Mobile application is not the only option for retailers looking to personalize their
marketing tactics. Interactive displays and digital signs can also be used to collect
information about customers and make individualized recommendations based on
that knowledge. For example, a cosmetics retailers and brands can start using
interactive displays that allow shoppers to try on makeup virtually, using facial
recognition software to determine how a particular product and shade will look on a
63

shopper based on her skin tone, eye and hair color, and other factors. These
displays can deliver then targeted advertisements and special offers based on a
user's customized results. Such platforms can be expanded in the future to link to
other databases detailing Internet browsing history, social media presence and other
elements of Big Dataeven pinpoint individual identitiesto tailor marketing
messages even further. Moreover interactive video displays and apps may allow
customers to more easily navigate store.

On the other hand, employees are one of the most important parts of service.
Theyre the ones that will keep customers coming back to store. Brick and mortar
retailers have to make staff the best part of the experience. They have to ensure that
they have a solid team of experts that are engaged with customers at the right level
from the minute they walk in the shops door

For click organizations:

Demand of ebooks is increasing day by day. Ebooks can be delivered almost
instantaneously. It is very simple and easy to purchase and download ebooks
through the Internet. So besides physical books online retailers should initiate
ebook selling.
Search Engine Optimization (SEO) is a very viable marketing outlet that can, in
concert with effective landing pages and content, bring a business qualified leads
and customers. Moreover, studies have shown that SEO can have a better ROI
than traditional forms of marketing like TV and print ads. SEO can provide a
business visibility, branding, traffic, a high ROI, credibility, and insight into
customer behavior. So online retail stores should invest heavily on SEO.
Online retailers have to foster relationship with consumers by helping them make
decisions through recommendations of items based on past purchases, user
reviews and ratings and suggested complementary purchases. Consumers
should have many options for forging a personal bond with the brand, including
64

user profiles, reviews and ratings, wish lists and Listmania lists for
recommending favorite products.
Running a blog associated with product bring about limitless potential of content
marketing. By producing free, valuable content, online retailers can create trust in
their brand and keep people informed. Blogging also gives something to share on
social media and helps rank in search engines. A simple yet highly effective way
to get started with content marketing for business is to think of all the startingpoint queries people have about products and industry. Using blog, online retailer
can answer these queries as individual articles. Additionally, retailers can use
blog to offer tips, tutorials, and resources related to their products and the
lifestyle around their products. If retailers can create epic content on a fairly
regular basis, they will begin to see the power of content marketing via social
media shares, search engines, and so forth.
Retailers should provide an easy interface for customers to register their
complaints. They should make sure that all queries and complaints are
addressed immediately. If some problems cannot be addressed due to any
limitation then at least customers should be apprised about the unavoidable
circumstance.

Having customer complaints in their own interface will allow

retailers to use customer feedback on products and packaging. Retailers may

adopt the policy to offer their customer a return option for gift orders.

10 Conclusion:
Traditional physical retail stores are facing their biggest challenge since the dawn of the
World Wide Web some 25 years ago. The face of retail has changed; today, retailing
means going into shopping centers, going online and going mobile. Digital technologies
in the form of smart phones touch screens and information infrastructure has
revolutionized retail outlets. With a burgeoning tech savvy population and rising income
in urban areas, the web will continue to shape the business model of online as well as
physical retail stores of Bangladesh. This research looked into the impact of web on the
retail industry of Bangladesh, the survey report showed something really interesting;
65

even through people do have reservation about shopping online a large population is
willing to adapt. With a proper business model and right strategy online shopping can
become a trend for both physical and online store alike. For that to happen many major
issues are to be addressed; like security and customers trust. With constant upgrading
of technologies and proper management; it is not that far, that most people would be
doing business online, redefine conventional way of shopping altogether.

66

11 APPENDIX
11.1 QUESTIONAIRE
FOR THE CUSTOMERS
1. What is your age?
(a) 15 - 25yrs old
(b) 26 - 35yrs old
(c) 36 - 45yrs old
(d) 45yrs +
2. Gender
(a) Male
(b) Female
3. Marital status
(a) Married
(b) Single
4. What is your average monthly Income?
(a) No income
(b) < 30000
(c) 30000-60000
(d) 60001- 90000

67

(e)>90000

5. Are you self-supported?

(a) Yes
(b) No
6. How many credit card(s) do you use?
(a) None
(b) 1 - 2
(c) 3 - 4
(d) 4 - 5
(e) More than 5
7. How many year(s) have you used a computer?
(a) Never used computer
(b) Less than 1 year
(c) 1 3 years
(d) 4 6 years
(e) 7 yrs +
8. Indicate your ability to use the Internet
(a) Not skilful
(b) Somewhat skilful
(c) Skilful

68

(d) Very skilful

(e) Dont use
9. What is your primary access to the Internet?
(a) In your home/ Dorm room/ Apartment/ Work office
(b) At university computer labs
(c) Public facility (library, apt computer lab, etc.)
(d) Other
(e) No access

Strongly

Disagree

Neutral

Agree

Strongly agree

disagree
1

10. I am willing to give my personal information when shopping on the Internet.

1

11. I can save time by shopping on the Internet.

1

12. I trust the security of online payment methods such as credit card.
1

69

13. I can save money by shopping on the Internet.

1

14. Internet shopping is easy to do.

1

15. I am concerned about possible interception of financial information by an

unidentified third party.
1

16. I found myself checking prices when shopping even for small items.
1

17. Internet shopping is convenient.

1

18. I would be more likely to shop on the Internet if credit card security was
insured.
1

70

19. Internet promotions such as banner advertisement, sales, or free gifts are
attractive to me.
1

20. Online shopping is safe for credit card use.

1

21. I would be more likely to shop on the Internet if the Web site was easy to use.
1

22. I shop online where I can reduce my efforts in traveling, walking, parking,
waiting, and carrying as much as possible.
1

23. I enjoy shopping on the Internet.

1

24. I want to see and touch products before I buy them.

1

25. Online shopping is a way I like to spend my leisure time.

1

4
71

26. When the Internet retailers are not fully identified, I worry about whether they
are reliable.
1

27. Internet shopping provides a better quality product.

1

28. I like to shop on the Internet where it is easy to compare many products and
screen them in order to choose the one I like.
1

29. When shopping on the Internet pictures and colours are clear and
representative of the products.
1

30. Internet shopping provides more variety of products.

1

31. I would be more likely to shop online if product returns were easier.
1

72

32. Traditional retail stores offer me better services than online stores.
1

33. When shopping on the Internet, I am satisfied with the delivery system.
1

34. I am satisfied with the return policyof Internet shopping.

1

35. I would be more likely to shop online if the pictures of the items were clearer.
1

36. I would be more likely to shop online if faster delivery was insured.
1

37. When shopping on the Internet, the stores reputation concerns me.
1

38. I dont like to pay returning postage when returning online purchases.
1

4
73

39. I would be more likely to shop online if more extensive descriptions of items
were included.
1

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