2018

Bata Pakistan
BUSINESS PROJECT
SHARJEEL AHMED
Page 1 of 34

About Us

Since 1942 Bata Pakistan has been rendering its services to its valued customers by

offering quality products.

It was incorporated in Pakistan as Bata Shoe Company (Pakistan) Limited in 1951

and went public to become Bata Pakistan Limited in the year 1979.

Since its inception, the company has not only maintained a good reputation of

manufacturing high quality footwear for all segments but has also been designing

shoes in accordance with the changing fashions and trends.

If you encounter any problem with our product, please refer to the store of

purchase with the original cash memo. The store manager would be able to assist

you.

Bata Pakistan is serving its valued customers through a strong retail network

comprising of more than 431 retail outlets, 544 registered wholesale dealers and

136 DSP franchise served by 12 wholesale depots across the country.

Besides catering local market, Bata Pakistan also shows its presence in an

international footwear market through its export department which is constantly

exploring new potential market in order to earn foreign exchange.

Being a multinational company Bata Pakistan has played a vital role in the

economic progress of Pakistan. It has introduced sophisticated technology and

business skills to the country and provided direct and indirect employment to about

10,000 people. Along with its own manufacturing capacity Bata Pakistan is also

outsourcing its products nationally and internationally to meet the demands of its

valued customers.

As the Corporate social responsibility is an integral part of every business and Bata

Pakistan fulfills its CSR by patronizing various charitable organizations and also

takes part in rehabilitation of society during the natural disasters.

Moreover Bata Pakistan is also operating an international program under the name

of Bata Children program, which aims to create a brighter future for the children of

the community in which we operate. Under this program Bata Pakistan encourages

and supports under privileged children by providing shoes, donations and also

arranging different healthy activities for them which add values in their lives.
Page 3 of 34

Bata has always been the market leader and in order to maintain its leadership it

has invested millions of rupees in updating its systems and equipment during the

last few years. This will enable the company to expand, modernize and develop its

operations and in the process provide additional employment opportunities.

Bata the market leader is well equipped to cater the customer’s demands and to

meet future challenges.

VISION

To make great shoes accessible to everyone

Mission

We help people look and feel good

by continuously focusing on product quality, innovation and value.

We become the customer’s destination of choice

by offering personal shopping experience to create long standing customer

relationships.

We attract and retain the best people

by showing great leadership, a passion for high standards our respect for diversity

and commitment

to create exceptional opportunities for professional growth.

We remain the most respected footwear company

by being socially responsible and ethical in everything we do and a credit to every

community in

which we operate.

SWOT Analysis of BATA

SWOT articles

Bata is a global footwear and fashion accessory manufacturer and retailer,

headquartered in Lausanne, Switzerland. Bata was founded in 1894 in Zlin, the

Czech Republic by Tomas Bata. Bata is still owned by the Bata family and expanded

in over 70 countries. India has been a preferred market for Bata with a presence in

over 500 cities across 1265 retail stores.

Strength in the SWOT Analysis of BATA :

Global Presence: Bata is present in more than 70 countries, with production

facilities in 27 countries. This makes Bata a global player and hence not dependent

on a single market.

Market Penetration: Bata has penetrated the market really well. Bata is present in

large cities to small towns. This helps in maintaining its customer base and also

capturing the new demand created in the market.

Strong Distribution Network: Bata has a very strong distribution network

throughout the world with about 5000 retail stores worldwide out of which more

than 1200 are located in India.

Excellent positioning: Bata has positioned itself really well as a fashionable yet

affordable footwear brand.

Cost Advantage: Its quite clear that bata has the cost advantage and is able to

manufacture a huge range of footwears at a very affordable price.

Weakness in the SWOT Analysis of BATA :

Limited market share due to competition: Bata has been subjected to high

competition which doesn’t allow Bata to have a high market share. Bata’s market

share has been reduced to 6 per cent.

Falling Sales: Bata India’s year on year sales has been on a downturn. Although the

company’s profits have been increasing.

Low quality image: Because of the low pricing of Bata shoes, most consumers

think the quality of the shoes will be low as well. This is a typical price quality

approach of positioning.

Opportunity in the SWOT Analysis of BATA :

Footwear as a Fashion statement: Footwears are now considered fashion

statement and hence sales are bound to increase. This creates an opportunity for Bata

to enhance its revenues.

Growing Rural Market: Bata has a strong presence in the emerging nations. Rural

market in the emerging nations is growing at a high rate. Bata needs to take

advantage of the demand created in the rural market. This will help in improving its

bottom-line.

Growing demand in the premium footwear category: There is a growing demand

in the premium footwear industry, especially in the emerging nations where the

standard of living is growing.

Threat in the SWOT Analysis of BATA :

Intense competition: Bata is facing intense competition from other leading

footwear brands in all the categories and hence enlarging its customer base and

market share is becoming difficult.

Duplicity in the market: The Footwear industry is also subjected to duplicity in the

market, which not only decreases sales but also weakens the brand name.

 MARKETING RESEARCH SYSTEM

 Bata’s marketing system runs in a systematic way. It adopts the marketing

research system that is based on periodic research. BATA Pakistan Limited

arranges for advertisement (pre and post), observation in store, mystery

shopping, usage and attitude surveys, focus groups for its marketing research

programme. Before launching a new product in the market, it is a part of

Bata’s marketing strategy to conduct interviews with the targeted customers

and ask them about their likes, dislikes and preferences about the Bata

brands/ products. Bata conducts marketing research and relevant interviews,

distributes discount vouchers and offers other attractive incentives to its

expected customers for their active participation in Bata’s marketing

research-oriented programmes. The main reason behind the success of Bata

Pakistan Limited is direct research process and directly contacting the target

customers. It appears mentionable that in regard with the marketing research

for new brands, pre-launch marketing research has played a very helpful role

for paving the way of Bata’s marketing strategy. Bata’s marketing research

system keeps Bata in touch with the needs of Bata’s customers and assists

Bata in making its marketing decision.

 SEGMENTATION

 Segmentation is splitting customers into different segments; similar groups

of customers, within which customers with the similar characteristics have

the similar needs. Market segmentation is important and useful as market is

the set of all actual and potential buyers of a product and buyers are not

homogeneous. Marketing segmentation is vital for well- understanding of

the market and it plays a key role for a successful business as it helps you

know the target market better than your competitors. Bata’s market

segmentation is comprised of geographic, demographic, psychographic and

behavioral features of its market segments having taken into consideration of

the area (rural/urban/city/town/village), age, gender, social class, occupation,

income, personality attributes and lifestyles). For example, from age point of

view, Bata segments the age groups into children, young and old age people.

From marketing point of view, all the three categories are rationally focused

by Bata with the priority to provide the customers the best footwear,

comparable both in quality and price, according to the needs of each

segment. Bata has come out remarkably successful in children segment that

has helped Bata make high sales proving the segment worthwhile.

 TARGETING

 Targeting is an important part of marketing strategy. The key

 step in target marketing is ‘dividing a market into distinct and meaningful

groups of customers’. (Kotler and Karen F.A Fox 1985). After segmentation

it is time to target the main and important segmented groups. In Bata’s

marketing strategy, target groups are children, ladies and adults of different

age levels. For an adequate targeting, Bata has offered Bubblegummers

along with a wide range of accessories including school and casual bags,

stationery, etc for children that has proved a huge success, Marie Claire for

ladies offering them a nice blend of active lifestyle and contemporary

modern designs, ‘Power’ for young age and sport-spirit people, Weinbrenner

for office and ceremonial use, and ‘Bata Comfit’ featuring comfort and
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modernly designs, suits kids and young to old age people segment for their

free, leisure time shoes usage.

 POSITIONING

 Positioning is customers’ perception of a product in relation to alternatives

on the market. For its being an important part of marketing strategy,

positioning has been given due attention in Bata’s marketing strategy.

Customers’ attitudes towards Bata’s shoe brands and accessories is regularly

observed and measured. It helps Bata identify the scope for new brands and

also reposition the current brands. An edge that Bata Pakistan has got on

other footwear manufacturing and selling companies in the market is that

Bata has a large number of retail outlets throughout the country; it is

footwear giant in the country, so it has a much bigger space for impressive

and appealing positioning. Supported with good customer service and direct

customers contact, Bata has come out with successful positioning.

 PRODUCT

 Product is the ‘offer’ that is exchanged between the manufacturer/seller and

the buyer and consists of goods (tangible) and services, ideas (intangible). In

Bata Pakistan Ltd’s case, products (shoes and accessories) are tangible. At

Bata, products are featured in accordance with the need/benefits of the

customers and customer-satisfaction is given due priority. As product is the

key/base thing to be offered to the customer against his/her money, so Bata

shoes and accessories, both in terms of product-quality and comparable price

in the competitive market, are considered vital for the success of the

company. Bata’s brand and packaging are of good standard and two months’

period free of charge after sale service is also offered to the Bata customers.

In order to satisfy the target market, Bata manages the existing and new

product efforts in a systematic way. That’s why, Bata has earned trust of its

customers.

 PRICE

 Price is the value a buyer exchanges for the benefits of a product or service.

It is also one of the key factors in the marketing strategy as it works for the

survival, profit, return on investment, market, share and status quo of the

manufacturer / seller. Customers can judge the quality of the product from

the price being charged that makes the pricing very important in the

marketing strategy of a company. As paying high price, customers want the

product quality to be good while against low price, they (customers)

normally assume a product to be of low quality. Bata has tried to do its

products’ pricing quite reasonably as Bata shoes and accessories are of good

quality while their prices are highly comparable that gives Bata a
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competitive edge over its competitors. Value for money and competitiveness

are basis of Bata’s pricing policy. Bata’s pricing strategy does not simply

aim to match the competition, but it focuses on beating its competitors both

in good quality and reasonable prices that keeps its position strengthened in

the market.

 PLACE

 It is about how and where a manufacturer/seller sells its products and it can

include using different distribution channels. It is very beneficial if a

company’s business place is conveniently accessible for the customers and

the distribution channel is also possible less costing. Bata Pakistan Limited

holds more than 373 retail outlets and 12 wholesale depots throughout the

country. To cater the middle upper income segment of the market, 13 city

concept stores have been opened in 2006-07 in the major cities ; Karachi,

Lahore, Peshawar, Rawalpindi, Mirpur, Gujranwala and Gujrat. Obviously,

place counts much more importance for Bata with such a wide business

network. Bata has a good channel structure and channel management giving

it an easy, in-time and cost-effective access to the market. Bata has its own

manufacturing units and wholesale depots at easily accessible locations from

where it can make timely supplies to its retail outlets. With a good retailer

image, Bata is in a position where it can make its position even stronger.
Page 13 of 34

 PROMOTION

 Promotion concerns with how you reach your customers / potential

customers. It is the communication of an organization’s marketing mix to

the desired audience and works as a backbone of a company’s marketing

strategy. Bata Pakistan’ marketing strategy gives a very considerable

importance to the promotion. It applies all the important tools of promotion

including advertising, sales management, sales promotion, promotional mix,

direct marketing and public relations for expanding the company’s business.

Though the fair-price selling is the base of Bata’s marketing strategy, yet

different attractive promotions and promotional mixes are also offered to the

customers. Accessories including socks, shoe laces, shoe polishes and school

bags for the children are offered free with different brands of shoes as

promotional mixes.

PESTEL analysis provides great detail about operating challenges Bata will face

in prevalent macro environment other than competitive forces. For example an

Industry may be highly profitable with a strong growth trajectory but it won't be

any good for Bata if it is situated in unstable political environment.

Spanish oil giant Repsol had to face a similar instance. It started an above average

profitability operations in Argentina and made strong returns in 5-7 years. But the
 Page 14 of 34

business was later expropriated by the Left Wing government. So the decade long

profits didn’t materialize in the end.

Political Factors that Impact Bata

Political factors play a significant role in determining the factors that can impact

Bata 's long term profitability in a certain country or market. Bata is operating in

Retail in more than dozen countries and expose itself to different types of political

environment and political system risks. The achieve success in such a dynamic

Retail industry across various countries is to diversify the systematic risks of

political environment. Bata can closely analyze the following factors before

entering or investing in a certain market-

 Political stability and importance of Retail sector in the country's economy.

 Risk of military invasion

 Level of corruption - especially levels of regulation in Consumer Services sector.

 Bureaucracy and interference in Retail industry by government.

 Legal framework for contract enforcement

 Intellectual property protection

 Trade regulations & tariffs related to Consumer Services

 Favored trading partners

 Anti-trust laws related to Retail

 Pricing regulations – Are there any pricing regulatory mechanism for Consumer

Services

 Taxation - tax rates and incentives

 Wage legislation - minimum wage and overtime

 Work week regulations in Retail

 Mandatory employee benefits

 Industrial safety regulations in the Consumer Services sector.

 Product labeling and other requirements in Retail

Economic Factors that Impact Bata

The Macro environment factors such as – inflation rate, savings rate, interest rate,

foreign exchange rate and economic cycle determine the aggregate demand and

aggregate investment in an economy. While micro environment factors such as

competition norms impact the competitive advantage of the firm. Bata can use

country’s economic factor such as growth rate, inflation & industry’s economic

indicators such as Retail industry growth rate, consumer spending etc to forecast

the growth trajectory of not only --sectoryname-- sector but also that of the

organization. Economic factors that Bata should consider while conducting

PESTEL analysis are -

 Type of economic system in countries of operation – what type of economic

system there is and how stable it is.

 Government intervention in the free market and related Consumer Services

 Exchange rates & stability of host country currency.

 Efficiency of financial markets – Does Bata needs to raise capital in local market?

 Infrastructure quality in Retail industry

 Comparative advantages of host country and Consumer Services sector in the

particular country.

 Skill level of workforce in Retail industry.

 Education level in the economy

 Labor costs and productivity in the economy

 Business cycle stage (e.g. prosperity, recession, recovery)

 Economic growth rate

 Discretionary income

 Unemployment rate

 Inflation rate

 Interest rates

Social Factors that Impact Bata

Society’s culture and way of doing things impact the culture of an organization in

an environment. Shared beliefs and attitudes of the population play a great role in
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how marketers at Bata will understand the customers of a given market and how

they design the marketing message for Retail industry consumers. Social factors

that leadership of Bata should analyze for PESTEL analysis are -

 Demographics and skill level of the population

 Class structure, hierarchy and power structure in the society.

 Education level as well as education standard in the Bata ’s industry

 Culture (gender roles, social conventions etc.)

 Entrepreneurial spirit and broader nature of the society. Some societies encourage

entrepreneurship while some don’t.

 Attitudes (health, environmental consciousness, etc.)

 Leisure interests

Technological Factors that Impact Bata

Technology is fast disrupting various industries across the board. Transportation

industry is a good case to illustrate this point. Over the last 5 years the industry has

been transforming really fast, not even giving chance to the established players to

cope with the changes. Taxi industry is now dominated by players like Uber and

Lyft. Car industry is fast moving toward automation led by technology firm such

as Google & manufacturing is disrupted by Tesla, which has stated an electronic

car revolution.
 Page 18 of 34

A firm should not only do technological analysis of the industry but also the speed

at which technology disrupts that industry. Slow speed will give more time while

fast speed of technological disruption may give a firm little time to cope and be

profitable. Technology analysis involves understanding the following impacts -

 Recent technological developments by Bata competitors

 Technology's impact on product offering

 Impact on cost structure in Retail industry

 Impact on value chain structure in Consumer Services sector

 Rate of technological diffusion

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Environmental Factors that Impact Bata

Different markets have different norms or environmental standards which can

impact the profitability of an organization in those markets. Even within a country

often states can have different environmental laws and liability laws. For example

in United States – Texas and Florida have different liability clauses in case of

mishaps or environmental disaster. Similarly a lot of European countries give

healthy tax breaks to companies that operate in the renewable sector.

Before entering new markets or starting a new business in existing market the firm

should carefully evaluate the environmental standards that are required to operate

in those markets. Some of the environmental factors that a firm should consider

beforehand are -

 Weather

 Climate change

 Laws regulating environment pollution

 Air and water pollution regulations in Retail industry

 Recycling

 Waste management in Consumer Services sector

 Attitudes toward “green” or ecological products

 Endangered species

 Attitudes toward and support for renewable energy

Legal Factors that Impact Bata

In number of countries, the legal framework and institutions are not robust enough

to protect the intellectual property rights of an organization. A firm should

carefully evaluate before entering such markets as it can lead to theft of

organization’s secret sauce thus the overall competitive edge. Some of the legal

factors that Bata leadership should consider while entering a new market are -

 Anti-trust law in Retail industry and overall in the country.

 Discrimination law

 Copyright, patents / Intellectual property law

 Consumer protection and e-commerce

 Employment law

 Health and safety law

 Data Protection

CONCLUSION: BATA Pakistan is a mature company and currently facing

problems internally as well as externally, internal problems are from their

strategies, as they are focusing on traditional designs of footwear and not focusing

on innovative and trendy shoes, they are not coming with variety, also the price

they are charging is not compatible with quality they are giving, BATA Pakistan is

also facing problem from their cobblers and new entrants who are using their

products under their own brand, BATA Pakistan is also not focusing on

PROMOTION, as it was highlighted in this document that Face book page is not
Page 21 of 34

updated from 2010, so how can they attract customers on the other hand their

competitors are Promoting heavily. External problems that BATA is facing is from

Competitors and new entrants in the market, the competitors of BATA Pakistan are

focusing on innovative products, fashionable products this is the reason BATA is

losing their market shares, also new entrants became problem for BATA. What

BATA should do is a critical Question, but the recommendations we have provided

can be beneficial for BATA Pakistan. Like they have to start a innovative

department that only work for the innovation of new designs and styles, and

respond to customers changing preferences. They should decrease prices or

increase the quality of their product because they are providing low quality shoes

at the cost similar to other competitors even more than their prices. BATA Pakistan

should promote more and should include heavy promotion on social media in their

promotion strategy. Good Luck BATA Pakistan for their Future Business.

Learning from the mistakes

Bata Pakistan has experienced few mentionable mistakes in its marketing strategy

in the past. One of those was when BATA decided to embrace the high-end

segments of the Pakistani shoe market as a part of its target market. It launched

quite a few brands for this segment with higher price tags. The move landed BATA
Page 22 of 34

in trouble. This segment was not meant for BATA. In the first place, this segment

was not sizable for a company like BATA. Second, the segment did not get with

Bata’s distinctive competence. The segment constituted a mere 5 to 10 per cent of

the footwear market in Pakistan. It could not provide the volumes that BATA was

used to at the mass end and high volume was essential for BATA for having

healthy bottom line. Worse still, the adoption of the segment misdirected Bata’s

entire strategy. The top end of the market suddenly became the main focus of the

company and it forgot its bread-and-butter shoes that had given the company its

identity. And, small regional competitors started nibbling away at Bata’s mainstay.

Actually, Bata was squeezed at both ends. At the lower ends, smaller competitors

attached Bata’s mass range in schools shoes and chappals, which the company had

practically vacated on its own by ignoring them completely. At the high end, niche

competitors, who were better prepared, were challenging Bata. From the market

share of around 15 per cent in the mid 1999s, Bata found its share slide down to 10

per cent of the footwear market in mid 2000s. The year 2001 saw the company

running a loss of Rs. 42 million.

After learning the lesson the hard way, BATA did an about-turn from its adventure

with high-end-segment and returned to the mass segment. The new strategy was to

get back to the original customers at the low end and keep that part of the market

as its core focus. The company, of course, did not totally give up the new segment
Page 23 of 34

it had got into in the early 1999s. Brands like Hush Puppies, for example,

continued to be sold by Bata, but in a selective way and through select stores only.

(Anil Chawla, June 2003, ‘Marketing Management’).

Having faced an adverse situation, BATA successfully reinvented itself as a

renowned retailer offering customers the best in footwear in terms of fashion,

quality and introduced the concept of flagship stores to provide a complete and

unique shopping experience based on modern trends, relaxed ambience, great

products and courteous staff at the new-look flagship stores which are all part of

Bata’s new marketing strategy paving the way of success for BATA, and it is a

prominently practical example of BATA’ marketing strategy of monitoring and

evaluating the marketing strategy in practice and then taking essential steps and

changes accordingly as measuring the effectiveness of what has been done, and be

prepared to change things that aren’t working.

BATA has effectively worked on consolidating the existing branded business

activities into a leading and professional company that has helped in significant

reduction of the company’s trade-debt burden. The company is strictly controlling

on credit and reducing the outstanding receivables and it is able to augment its

financial position to a greater extent. BATA Pakistan has strengthened its position

on the stock exchange as evident from increasing P/E ratio and market per share.
Page 24 of 34

Backed by increase in demand, EPS has shown an upward trend as well until

recently when it declined owing to instability in the country, which depressed the

turnout to the retail stores of the company. The net value of the company is not

very high. The company proposed a higher dividend in Nov.2007 due to the better

results. It raised the final dividends by 20% thus increasing the investors’

confidence.

(Business Leader, Pakistan, March 2008, “BATA Pakistan Ltd: Investors’

perspective and Future Outlook”).

Future Outlook

Increase in the cost of production primarily because of the hike in prices of raw

materials, interest rates and transportation costs might pose a challenge to the

company. The increased costs might depress sales for the company along with

affecting the top-line and bottom-line. Furthermore, Bata Pakistan should

increasingly divert its focus towards innovation, new designs and maintenance of

its retail outlets in order to keep its customers base intact. The cut-throat

competition from the imported cheap price shoes and many new and existing local

outlets can significantly affect the company business. In order to maintain its

success as a household name for the people of Pakistan, creativity and research for

higher quality should lie at the core of Bata product development policy. Bata
Page 25 of 34

needs to consistently focus on the development of shoes with exclusive comfort,

technology features and designs available to the people through a chain of modern

large format and sport concept outlets bringing in new trends to suit the needs of

both the traditional and the trendy. Feed back from customers and employees, goof

salaries packages coupled with bonus packs for the employees, using customer

data, in store speciality/assistance counters, gifts with purchase, incentives for the

retailers, promotional items like t shirts with ‘BATA’ printed on them, sponsorship

of sports especially cricket as it is the most popular game with the Pakistani

people, issuance of loyalty cards and delivery services can be of great help for

Bata, particularly in its marketing.

Marketing Strategy Of Bata Pakistan

BATA Pakistan has categorized an aggressive advertisement to be its first priority.

It has been prominent in rationally and scientifically promoting public awareness

for the right selection and usage of good quality shoes that has helped modifying

public thinking about shoes selection and usage, and also increasing sales for Bata.

Following are a few of the scientific facts highlighted by BATA:

Shock Absorption: With each step, all of your weight is absorbed by tissues

throughout the feet. The heel in particular absorbs most of your body’s weight. Did
Page 26 of 34

you know that you carry about four to six times of your body weight across the

ankle joint when climbing stairs due to the mechanics required to your body? That

explains why a soft landing is precious for your feet.

Safe Ride for your Feet: Have you experienced riding motorbike in sandals? You

probably felt the burnt from the exhaust heat, slipped from the brake pedal, and got

scratches with the gear shaft. Those are many annoyances making your ride

uncomfortable and potentially dangerous. Now you can let your feet breathe and be

safe at the same time when you ride your bike with BATA shoes.

Bata’s marketing system runs in a systematic way. It adopts the marketing research

system that is based on periodic research. BATA Pakistan Limited arranges for

advertisement (pre and post), observation in store, mystery shopping, usage and

attitude surveys, focus groups for its marketing research programme. Before

launching a new product in the market, it is a part of Bata’s marketing strategy to

conduct interviews with the targeted customers and ask them about their likes,

dislikes and preferences about the Bata brands/ products. Bata conducts marketing

research and relevant interviews, distributes discount vouchers and offers other

attractive incentives to its expected customers for their active participation in

Bata’s marketing research-oriented programmes. The main reason behind the

success of Bata Pakistan Limited is direct research process and directly contacting
Page 27 of 34

the target customers. It appears mentionable that in regard with the marketing

research for new brands, pre-launch marketing research has played a very helpful

role for paving the way of Bata’s marketing strategy. Bata’s marketing research

system keeps Bata in touch with the needs of Bata’s customers and assists Bata in

making its marketing decision.

Segmentation is splitting customers into different segments; similar groups of

customers, within which customers with the similar characteristics have the similar

needs. Market segmentation is important and useful as market is the set of all

actual and potential buyers of a product and buyers are not homogeneous.

Marketing segmentation is vital for well- understanding of the market and it plays

a key role for a successful business as it helps you know the target market better

than your competitors. Bata’s market segmentation is comprised of geographic,

demographic, psychographic and behavioral features of its market segments having

taken into consideration of the area (rural/urban/city/town/village), age, gender,

social class, occupation, income, personality attributes and lifestyles). For

example, from age point of view, Bata segments the age groups into children,

young and old age people. From marketing point of view, all the three categories

are rationally focused by Bata with the priority to provide the customers the best

footwear, comparable both in quality and price, according to the needs of each
Page 28 of 34

segment. Bata has come out remarkably successful in children segment that has

helped Bata make high sales proving the segment worthwhile.

Positioning is customers’ perception of a product in relation to alternatives on the

market. For its being an important part of marketing strategy, positioning has been

given due attention in Bata’s marketing strategy. Customers’ attitudes towards

Bata’s shoe brands and accessories is regularly observed and measured. It helps

Bata identify the scope for new brands and also reposition the current brands. An

edge that Bata Pakistan has got on other footwear manufacturing and selling

companies in the market is that Bata has a large number of retail outlets throughout

the country; it is footwear giant in the country, so it has a much bigger space for

impressive and appealing positioning. Supported with good customer service and

direct customers contact, Bata has come out with successful positioning.

Bata Pakistan has experienced few mentionable mistakes in its marketing strategy

in the past. One of those was when BATA decided to embrace the high-end

segments of the Pakistani shoe market as a part of its target market. It launched

quite a few brands for this segment with higher price tags. The move landed BATA

in trouble. This segment was not meant for BATA. In the first place, this segment

was not sizable for a company like BATA. Second, the segment did not get with

Bata’s distinctive competence. The segment constituted a mere 5 to 10 per cent of

the footwear market in Pakistan. It could not provide the volumes that BATA was

used to at the mass end and high volume was essential for BATA for having

healthy bottom line. Worse still, the adoption of the segment misdirected Bata’s

entire strategy. The top end of the market suddenly became the main focus of the

company and it forgot its bread-and-butter shoes that had given the company its

identity. And, small regional competitors started nibbling away at Bata’s mainstay.

Actually, Bata was squeezed at both ends. At the lower ends, smaller competitors

attached Bata’s mass range in schools shoes and chappals, which the company had

practically vacated on its own by ignoring them completely. At the high end, niche

competitors, who were better prepared, were challenging Bata. From the market

share of around 15 per cent in the mid 1999s, Bata found its share slide down to 10

per cent of the footwear market in mid 2000s. The year 2001 saw the company

running a loss of Rs. 42 million.

Having faced an adverse situation, BATA successfully reinvented itself as a

renowned retailer offering customers the best in footwear in terms of fashion,

quality and introduced the concept of flagship stores to provide a complete and

unique shopping experience based on modern trends, relaxed ambience, great

products and courteous staff at the new-look flagship stores which are all part of

Bata’s new marketing strategy paving the way of success for BATA, and it is a

prominently practical example of BATA’ marketing strategy of monitoring and

evaluating the marketing strategy in practice and then taking essential steps and

changes accordingly as measuring the effectiveness of what has been done, and be

prepared to change things that aren’t working.

BATA has effectively worked on consolidating the existing branded business

activities into a leading and professional company that has helped in significant

reduction of the company’s trade-debt burden. The company is strictly controlling

on credit and reducing the outstanding receivables and it is able to augment its

financial position to a greater extent. BATA Pakistan has strengthened its position

on the stock exchange as evident from increasing P/E ratio and market per share.

Backed by increase in demand, EPS has shown an upward trend as well until

recently when it declined owing to instability in the country, which depressed the

turnout to the retail stores of the company. The net value of the company is not

very high. The company proposed a higher dividend in Nov.2007 due to the better

results. It raised the final dividends by 20% thus increasing the investors’

confidence.

Increase in the cost of production primarily because of the hike in prices of raw

materials, interest rates and transportation costs might pose a challenge to the

company. The increased costs might depress sales for the company along with

affecting the top-line and bottom-line. Furthermore, Bata Pakistan should

increasingly divert its focus towards innovation, new designs and maintenance of

its retail outlets in order to keep its customers base intact. The cut-throat

competition from the imported cheap price shoes and many new and existing local

outlets can significantly affect the company business. In order to maintain its

success as a household name for the people of Pakistan, creativity and research for

higher quality should lie at the core of Bata product development policy. Bata

needs to consistently focus on the development of shoes with exclusive comfort,

technology features and designs available to the people through a chain of modern

large format and sport concept outlets bringing in new trends to suit the needs of

both the traditional and the trendy. Feed back from customers and employees, goof

salaries packages coupled with bonus packs for the employees, using customer

data, in store speciality/assistance counters, gifts with purchase, incentives for the

retailers, promotional items like t shirts with ‘BATA’ printed on them, sponsorship

of sports especially cricket as it is the most popular game with the Pakistani

people, issuance of loyalty cards and delivery services can be of great help for

Bata, particularly in its marketing.

Bata in current age

During the last year Bata produced over 17.2 million pairs and sold 16.9 out of

them with the help of their large distribution network of 400 Retail Stores and
Page 32 of 34

Agencies, 13 Wholesale Depots, 23 Distributors and about 400 Registered

Wholesale Dealers who are selling goods as independent retailers. In 2009 the

company generated turnover of Rs.6.5, billon showed an increase of 26% against

previous year. The Company has an organized Export Department which is

constantly engaged in exploring new export markets in order to earn the foreign

exchange for the country. During the current year i.e. 2010, it is expected to export

1 million pairs of various styles of footwear to European and African countries. It

has transferred sophisticated technology and business skills to the country and

provides direct and indirect employment to about 10,000 people. Bata also

supports a large number of local manufacturers by buying raw materials from

them.

The company has not only maintained a reputation of manufacturing high quality

footwear for all the socioeconomic segments of the society but has also been

designing shoes in accordance with the changing fashions and trends. The list of

brands of Bata and size chart is given in Exhibit – 5 and Exhibit – 6 respectively.
Page 33 of 34

ANALYSIS OF FINANCIAL RATIOS

For Two Years from June 2016 to June 2018

Trend 2018 NBD

Ratio Description 2016 2017 Analysis Analysis Comments

% %

Inventory turnover ratio 4.45

No. of Days in

Inventory

Debtor turnover ratio 11.29 9.91

No. of Days in

Receivables 37 32

Total Assets turnover

ratio 1.66 1.63

Fixed Assets turnover

ratio

Creditor turnover ratio

No. of Days in Creditors 146 144

Gross Profit ratio 41.07 42.72

Net Profit to Sales

EBITDA Margin to Sale 16.38

Return on Equity 21.64 21.39

Return on Asset 15.90 16.01

Current ratio 3.35:1 3.55:1

Quick / Acid test ratio 2.00 1.99

Debt : Equity Ratio 0.00:1 0.00:1

Earnings per share

(EPS) 190.74 201.65

Profit Before Tax 13.93 14.07

Profit After Tax 9.56 9.84

Price Earnings ratio 22.60 12.16

Market Price Per Share 2452.27 4310.00