Acknowledgements
First of all we would like to thank the almighty Allah because of successful completion of
this assignment. We would like to thank our honorable Teacher Shaiful Islam sir, for
providing us with the opportunity to work on project and gain a real life experience. We also
thank all our group members & friends who inspired us & helped us to build confidence and
put us in a deep concentration to carry on our course work and supported us at the end with
great excellence. We lastly would like to express our appreciation to our International
Islamic University Chittagong (Dhaka Campus) and we are eventually grateful to the
University and its excellence that works for education encourages us and creates knowledge,
as knowledge is power.
Introduction
Walton Hi-Tech Industries Ltd. is the one and only manufacturer of multi-staged
Refrigerator, Freezer, Air Conditioner, Television and Motorcycle technology and is treated
as one of the sophisticated manufacturing plant in Bangladesh and South Asia. R.B. Group
(Parent Company) is one of the top business groups in the country operating with a great
reputation since 1977. Walton has become a sensation all over Bangladesh and in the world
of electronics, electrical and automobile industries.
Electronics Market in Bangladesh
The Electronics Market in Bangladesh is an ever-rising industry. The appropriate market
size has never been determined as it is ever changing. The whole market can be separated
into several segments like:
Semiconductor Market
Electronics Appliances Market
Raw Materials and Spare Parts Market
IT Market
Walton is one of the major players in the electronic appliances market. They are also
manufacturing motorcycles alongside home appliances such as television, refrigerators,
air-condition etc.
The market of these products relies heavily on the average household income. For most
people in Bangladesh home appliances had been luxuries they, which they cannot afford,
but recently the situation have been changing. Over the last 10 years, there has been
massive economic growth in the country, which has increased the income of lower-middle
and middle class people. So the demand for home appliances has increased substantially.
If we look at the annual GDP growth of the country in the last 10 years, we can see that
there has been a steady increase.
One of the main reasons of this growth has been because of the increased investment in
the fast growing sectors of the economy, which has reduced the rate of unemployment
Drastically over the years.
It is evident that the increase in earning of the population has also had an impact on the
buying behavior. Middle and upper middle classes have emerged and reached a certain
level that is attractive for the importers and manufacturers. Bangladesh Bank has the
records of imports of Home Appliances over the years.
Table 01: Import of Home Appliances (BDT)
Item
2009-10
2010-11
2011-12
2012-13
2013-14
Electrical Home Appliance
150241
204951
243665
236150
190548
At first there was a huge growth to the numbers of Home Appliances imported in the
country, but the numbers have declined in recent years, as tax holidays on imported parts
and high import tax on electronic products have made companies focus on assembling and
manufacturing their products in Bangladesh.
Walton HIL
Walton Hi-Tech Industries Ltd (Walton HIL) is one of the best companies in the electronic
sector of Bangladesh. Walton is one of those few Bangladeshi companies that export
electronic products since most of the companies in Bangladesh import products of various
famous brands. The company was established in 1977. Since then, it has been setting new
benchmarks in production of electronic goods in Bangladesh.
The company has a yearly production capacity of 1.4 million pieces of fridge, 300,000
pieces of air conditioner and 300,000 pieces of motorbike. In its early stage, the company
used to produce home appliances. Today their product mix includes Mobile Phone,
Generators, and Motorbikes. In 2009 the company signed an agreement with the
Malaysian auto manufacturer Agatha to set up an automobile plant in its factory premises.
After meeting the local demand the company is exporting its products to Qatar, Dubai,
Abu Dhabi and Kuwait of Middle East, Ghana of Africa and India, Nepal and Bhutan of
South Asia and U.S.A. It also wants to export its products to France, Italy, Germany,
Spain and other European countries. Walton has been successful in capturing this large
international market because of its high quality products. To ensure this high quality
of products all the members of the Walton family, both factory and administrative
members, work very hard round the year.
The factory of Walton is situated in Saver and the corporate office is at Dilkusha C/A,
Dhaka. There are 120 outlets of Walton throughout the country so that customers
everywhere can buy Walton products. Walton has a dedicated team of skilled engineers
and technical personnel from home and abroad who ensure quality products for the
customer. Because of this highly skilled team Walton can offer the customers a wide range
of products
Competitor
Television
Refrigerator
Air-Condition
LG
Sony
Singer
Samsung
Panasonic
LG
Samsung
Panasonic
Whirlpools
Sharp
LG
General
Gree
Samsung
Competitor Analysis
In the field of home appliances such as television, refrigerator, freezer, air-condition etc.
some of Waltons competitors are:
Figure 01: Waltons competitors Analysis
Most of these brands have been in this market for a long time. But none of them were able
to match the market growth of Walton in the last 3 years. Although LG-Butterfly is the
No.1 home appliances brand in the country, Walton is catching up fast.
Walton has started manufacturing major parts for the assembly of motorcycles. Right now
they hold nearly 8% of the market share.
Its competitors are:
Bajaj
Hero Honda
Dayun
TVS
Singer
Butterfly
Market Share
By conducting a survey among consumers we were able to determine peoples preference
of brands while buying home appliances and which brand of product they have bought.
The market demand of different brands of television, refrigerator and motorcycles has
been calculated by survey method. It must be noted that had the survey been centered on
middle class families in rural areas, Walton would have had a much higher market share
since these people are the main target market of Walton.
Also, Since Walton is the sole domestic producer among these brands; it enjoys some tax
reduction that makes it capable of manufacturing and selling its product at reasonable
prices. This facility provides Walton with a competitive advantage. Hence, Walton plans
to target another 15% of the market in the next 5 years and they are confident that they
will be able to easily achieve that target.
Strategic Situational Analysis
Market Analysis
Bangladesh, with its growing population and economic growth, has huge demand for
household products. The fact that only about 60% of the country has electricity available
proves that when electricity will be available throughout the country, demand will
increase further.
As the people of this country are mainly price sensitive, Walton, being the sole
manufacturer of refrigerator, freezer and motorcycle, is very keen to meet the demand of
this large market by providing competitive prices.
Waltons primary goal is to capture the local market, as they are still behind market leader
LG-Butterfly. But they are also exporting their products. Already they have customers in
Myanmar, Bhutan and planning to expand their market to Africa.
Market Segmentation
Segmentation is one of the most important factors of strategic marketing. Market
segmentation is one of the steps that go into defining and targeting specific markets. It is
the process of dividing a market into a distinct group of buyers that require different
products or marketing mixes. Markets can be segmented or targeted using a variety of
factor.
The bases for segmenting consumer markets include:
Demographical bases (age, family size, life cycle, occupation)
Geographical bases (states, regions, countries)
Behavior bases (product knowledge, usage, attitudes, responses)
Psychographic bases (lifestyle, values, personality)The market in which Walton
is doing its business is consumer market and Walton mainly segments its market
base on Demographic, Geographic and Psychographic basiss
Demographic Segmentation
In segmenting the market on demographic basis Walton mainly considers occupation and
family size of the consumer. It targets the people of middle-income level and designs its
products for mainly nuclear family.
Geographic Segmentation
Walton segments the whole country in eleven zones for marketing purpose. They are
Dhaka North Zone
Dhaka South Zone
Dhaka South-West Zone
Chittagong Zone
Camilla Zone
Barisal Zone
Jessore Zone
Sylhet Zone
Bogra Zone
Mymensingh Zone
Rajshahi Zone
Area Managers are responsible for these zones and it is their responsibility to develop
market there. Product demand and response of the customer are not same in all zones.
Maintaining the sales in high demand zones like Dhaka, Camilla, Bogra the marketing
department is trying to increase their sales in low demand zones.
Currently, Walton has either their retail shops or dealer shop in all of the 65 districts of
Bangladesh. They have multiple shops in Dhaka and Chittagong in order to provide
maximum convenience.
Figure 02: Walton Plazas in Chittagong
Figure 03: Walton Plazas in Dhaka
Psychographic Segmentation
Walton markets its product by using psychographic segmentation. They use lifestyle to
segment their market. For example Walton is marketing relatively cheaper CRT Television
for lower-middle income and rural people and at the same time LCD Television for higher
middle-income people. It also designs the refrigerators of different size and capacity
considering the people of different lifestyle.
PEST Analysis
Political Factor:
High Import Duty on Imported Home Appliance Product
Export promotion schemes of Bangladesh Government
Tax Incentives on Import of Plants
Constant Government Support
Economic Factor:
Increase in per capita income
Growing GDP high disposable income
Increase in Spending Power
A huge prospect of a profitable export sector
Socio-cultural Factor:
Manufacturing Eco-Friendly product
Changing lifestyle of middle income people
Technological Factor:
Improvement in Technology made electronics cheaper
Increased quality of production
SWOT Analysis:
Marketing Strategy
Positioning Strategy
Walton has created huge enthusiasm among the consumers of its target market with its
slogan Aamader Ponnyo. They accepted Waltons endeavor of manufacturing some
electronic items like, refrigerator & Freezer and motorcycle for the first time in
Bangladesh, and are more than willing to buy a product of high quality made in our own
country. On the other hand, as a local manufacturer Walton can sell quality products at
comparatively lower price than other competitors.
It also makes its product available at the nearest possible places in each areas of
Bangladesh through Walton Plazas (own showroom) and countrywide dealers. New
Walton Plazas are being opened frequently in different places of the country for getting
closer to the customers.
Another strategy of Walton for creating a concrete place in the customer mind is its after
sales service. In order to providing the quickest possible after sales service to the
customers. Walton has already established 39 Service Centers and opening more service
centers is under process. Walton equally values its sales and after sales service for
maintaining a long and positive relation with its customer and thus retain and increase the
customer.
Marketing Mix
Product:
Walton has a good number of products available in the market. The company produces
home appliances, mobile, generator and motorbike.
A brief description of its major products is given below:
Refrigerator
Walton mainly produces home appliances. In fact in its website the company is introduced
as the pioneer in refrigerator production in Bangladesh. Walton Refrigerator & Freezer
ensures highest quality compressor, Condenser is made by 100% copper, which lasts for
20-30 years. The most important thing is that every spare parts including door with
different color are changeable and available everywhere over the country.
Television
Walton produces LED, LCD, and CRT televisions. Walton Television ensures home
cinema entertainment. Walton Televisions d4ta Digital Technology is one of the most
innovative technological solutions that automatically reduces video noise, Selects the best
picture and performs fine-tuning by auto frequency tracking technology.
Motorcycle
Walton motorcycles are now competing with the Indian Hero-Honda and TVS brand. The
motorcycles have become famous because of the special specification like mobile phone
indicator, Digital gear display, Fuel location meter, Air shock absorber, Remote control,
Hydraulic Brake, Anti-Theft lock and Alloy rim etc. Walton motorcycles are also fuelefficient.
Other than these products Walton also produces Mobile handsets, generators, air
conditioners, DVD players, and microwave ovens.
Walton Product
Price
Waltons main target market has always been middle-income group. SO they have been
very careful in setting their price of product. Also the fact that they manufacture their
products, it allows them to set a lower price than their competitors, as they dont have to
pay heavy import duty. Below is a comparison of the prices of different products of
different brandsTable 02: Price comparison of Refrigerators
Model
Walton
LG
Transcend
Sharp
10 CFT
26,200
35,000
32,000
29,500
10.5 CFT
28,100
38,300
32,500
31,000
11.5 CFT
29,700
40,600
36,000
37,000
Table 03: Price comparison of TV
Model
Walton
LG
Sony
My One
29 Color TV
18,500
28,350
26,350
22,700
37 LCD TV
48,800
65,600
59,500
42 LCD TV
75,200
95,000
88,000
Table 04: Price comparison of Motorcycle
Model
Walton
Bajaj
Hero Honda
TVS
125 CC
103,900
175,000
155,000
160,000
110 CC
96,000
148,500
145,000
140,500
Cruiser
93,300
120,000
110,500
98,000
In all three products in which we have done market research, it is evident that Walton
is providing the consumers with the least expensive product. It is vital for Walton as price
is the only tool where they have a superior advantage over other brands. But it must be
noted that consumers in higher income level also look for quality products. So Walton
needs to find a fine balance between price and quality as they move forward in the coming
years.
Place
For making the product available to its target customers Walton use its distribution
channel. Walton generally uses its own transport facilities for reaching the product to
its120 Walton Plazas and about 700 dealers. If any dealer wants to use his own transport
for transporting Walton products from factory to his shop, he gets 1% reduction on dealer
price.
Promotion
Ever since Walton started its production in its manufacturing plant, they have started a
wide promotional campaign on its product. Their tagline Amader Ponnyo reflects the
pride they take by being able to sell home appliances manufactured in Bangladesh. Right
now Walton has TVCs running in all major satellite channels of Bangladesh in peak hours
targeting their core target customers. Also they have numerous billboards and
advertisements in print media. Also their 120 Walton Plazas across the country also works
as a major advertising tool. Walton has recently started sponsoring different major sports
event in the country. Recently they sponsored their first International Cricket Tournament
and thus it allowed their brand to be viewed by millions of people across the world.
Financial Analysis
Summary of the Financial Report of Walton for the year 2014:
Table 05: Financial analysis of Walton HIL
Particulars
Amount TK.
Total Sales
2,553,024,782.10
Cost of Goods Manufactured
2,414,093,716.05
Gross Profit
305,852,566.6
Operating Profit
Net Profit
99,636,450.2
26,530,733.5
Challenges and Future Growth
Current Market Status:
Although Walton is a growing brand, it is yet to establish itself as the market leader. In
fact it still has a long way to go, especially in capturing the elite customer bracket.
Table 06: Market Comparison
Price
Quality
Variety
Distribution
Scoop For
Growth
Walton
****
**
***
****
LG
***
****
****
****
**
Sony
***
***
Singer
***
**
**
**
**
Samsung
**
***
**
We can see from the above table that clearly overall LG leads and have a significant lead
when it comes to these values. They have been in the market for 20 years and have done
remarkably to capture nearly one-fourth of the total home appliance market. But coming
second right now is Walton. By providing the same quality in much lower price, Walton
has created an excellent brand following. They have a very good distribution system,
without lets all over the country. But their main problem has been variety. They are still
way of the benchmark at the moment when it comes to product variety. But Walton will
put more emphasis in this sector and plan to catch the lights of LG and Sony in the next 5
years.
Challenges:
Establish Walton as the No.1 Home Appliance Brand of the Country
Capturing the market share of existing foreign brands
Bringing more variety in their product line
Continue increasing market share at the same rate over the next 5years.
Future Growth:
Walton has decided to penetrate market, develop both market and product to achieve
profitable growth in future.
Market penetration
Through extensive promotion campaign Walton has set goals to make more sales in
future. Countrywide distribution system helps it achieve its goals.
Market Development
Walton is exporting its products in Middle East, Latin America and Africa. It has plans to
explore European markets also.
Product Development
Recently, Walton brought Air-Condition in market. Though it hasnt gained spectacular
market share yet, continuous customer attraction reflects future.
Expected market growth of Walton in the next five years:
Table 07: Future growth of Walton HIL
Product Line
Present Market
Share
Expected Market
Share
Main Competitor
Motorcycle
18%
30%
Bajaj, Hero Honda
TV
10.5%
45%
LG, Sony
Refrigerator
21.8%
35%
LG, Samsung
Air-Condition
6%
20%
LG, General, Gree
Recommendations
To establish Walton as the brand for home appliances & other electronic accessories, some
changes are needed in its strategiesSwitch to Market Penetration Pricing without compromising quality. Partner with local
and international OEM (original equipment manufacturers) for elegant & sophisticated
designs & equipment. Develop gaming consoles like Game boy, PlayStations, X-box and
medical appliances for caring old people through innovative approaches. Customer
Loyalty Program. Yearlong incentives and special offers.
Conclusion
The company has been running its business with good reputation since
1977.Establishment of Walton HIL to manufacture Refrigerator & Freezer, Air
Conditioner, and Motorcycle etc. In Bangladesh is a milestone in the path of success and
reputation of the brand WALTON. Walton HIL is the first company to introduce advanced
research and manufacturing technologies and equipment for household & commercial
Refrigerator & Freezer, Motorcycle and Air Conditioner etc. in Bangladesh. For
Bangladesh, Walton has become a company to be proud of in the export arena. Walton has
truly redefined Bangladesh from being a consumer country to a producer country for
home appliances.
Walton brand products have won the hearts of millions and would be exported to many
countries including Japan due to its high quality. Japanese Ambassador to Bangladesh
Shiro Sadoshimo said this while talking to the newsmen after visiting the electronics and
automobile factory Walton Hi-Tech Industries Ltd. at Chandra, Kalahari in Gazipur on
Tuesday. There is a great possibility for Walton products to be exported in Japan as
Bangladesh and Japan have a good friendly relation for a long time and have huge
opportunities for co-operation in different fields like trade; he added. If Bangladesh and
Japan work together the economic expansion of the two countries will be more
progressive, he pointed out. The Japanese envoy assured the Walton authority for
providing all kinds of technical supports to develop the production facilitates and other
supports to promote. The visit is also an initiative to increase trade relation and
technological cooperation between these two countries.
