UNIVERSITY OF DHAKA

A Research Proposal on

International Marketing Plan for Handicraft Goods of Bangladesh

Ch-1: Literature Review

Handy Craft of Bangladesh

The traditional crafts of Bangladesh have been a focal point of interest for visitors from abroad for centuries. The rural-based infrastructure has made it a potential ground for the development of numerous items crafted out of wood, jute, cane, bamboo, grass, straw, clay and other indigenous raw materials. The items produced by early craftsmen were not only singularly beautiful, but also representative of the culture, tradition and customs of the country. With the passage of time, however, new and modern styles and designs have been adapted and this has paved the way for a unique blend of the old and the new. Popular items in vogue are bamboo mirror and picture frames. Split bamboo shoots can be used as wall lining to create the ultimate tropical decor. Bamboo and cane furniture as well as rattan, grass and cane handicrafts and cane screens are just a few of the products available in an amazing array. Leather goods of attractive design and finishing are being produced by skilled craftsmen; the items produced are handbags, wallets, belts, shoe uppers, travel bags, pen holders, card holders and many other utility items. Jute again is another fiber from which a variety of useful products can be fashioned-be it bags, belts, light shoes, wall hangings, draperies and of course jute carpets. Color fast, fire-resistant, hazard-free jute carpets are unbelievably price advantageous. They are also popular for health and environmental reasons all over the world.

Export-Oriented and Export-Linkage of Handicraft Industry Export-oriented industrialization is one of the major objectives of Bangladesh Industrial Policy 1999. Export-oriented industries will be given priority and public policy support will be ensured in this respect and an industry exporting at least 80% of its manufactured goods or an industry contributing at least 80% of its products as an input to finished exportable, and similarly, a business entity exporting at least 80% of services including information technology related products will be considered as an export-oriented industry. The exportoriented industries, further to the provisions of Bangladesh Bank foreign exchange regulations, will be entitled to receive additional foreign exchange, on case to case basis, for publicity campaign, opening overseas offices and participating in international trade fairs. The entire export earning from Handicrafts and Cottage Industries will be exempted from 2

income tax, for all other industries, income tax rebate on export earning will be given at 50 percent and 100% percent export-oriented industry outside EPZ will be allowed to sell 20% percent of their products in the domestic market on payment of applicable duties and taxes. The Export-oriented industries which are identified by the government as "Thrust Sector" will be provided special facilities and venture capital support. Apart from the above-mentioned facilities, other facilities announced and provided in the Export Policy will be applicable to export-oriented and export-linkage industries. Handicraft Sector Bangladesh is now very much a part of the international scene and keeping in mind the discerning taste of the consumers, a vast range of crafts and novelties are now produced in the country under the technical supervision of qualified product development specialists. With the resurgence of worldwide interest in cane, development of cane products has gained momentum. Bamboo, another tropical grass is often used as a base for support of cane furniture and handicrafts, Bamboo baskets of various shapes and sizes are in great demand in Europe and America. Five Bangladeshi handicraft companies recently participated in the Frankfurt international trade fair Ambient and received spot and prospective orders of US$ 550 thousand (5.5 lakh). The five companies, which participated in the fair under the auspices of the Export Promotion Bureau (EPB), are Creation (Pvt.) Limited, Folk International, Heed Handicrafts, the Source and Wax Lyrical. The EPB set up a pavilion for the companies in the fair, the biggest ever for handicraft and consumer goods. The EPB takes part in the fair every year on a regular basis to promote and expand the export of handicraft items from Bangladesh. Handicraft Exports The most recent national survey on handicraft and cottage industries in Bangladesh was undertaken by BSCIC in 1991 and published in 1994. The survey found that 1.3 million

people were employed in handicrafts and cottage industries and over three quarters are employed in three industries - food preparation, textiles/leather, and wood/cane/bamboo, these were followed in importance by metal work and potteries including minor crafts, a total of 940,000 were employed in craft industries. Exports of general handicrafts reached a peak of US$ 8.7 million in 1991/92 and declined to US$ 6.5 million in 1994/95, 0.2 % of total 3

manufactured exports. By contrast leather goods exports increased from nothing in 1990/91 to US$ 6.4 million in 1994/95 and artificial flowers from nil to US$ 800.000. The main importing countries of general handicrafts in order of importance are UK, USA, Germany, and Italy; for leather goods, USA, Japan and Italy for artificial flowers Italy. 13 Government Policy The Bangladesh Export Development Strategy 1992-2000 includes measures to promote handicraft exports and the identification and proposals for the removing bottlenecks limiting the growth of handicraft exports is the objective of the present report. The incentives relating to bonded import of materials and duty drawback on imports are not of great importance to the handicraft sector as local materials are mostly used Even where imported materials are required (e.g. dyes and chemicals) they are purchased by the small handicraft producers in the local market.

The packing credit and simplification of export procedures will help especially the small and novice exporter, but it seems that much more progress is required in ibis direction Assignee with participation in fairs is useful, but the contribution of costs required of the exporter, is usually too great for the smaller entrepreneur to benefit. Specific measures to promote leather goods exports- which include tax and duty concessions and bonded facilities, are important, as leather goods are the most often exported item from the handicraft sector. The 25% subsidy on local fabrics used for export may help certain handicraft industries, especially embroidery and embroidery related products. The export Crash Programme includes several handicraft product categories - gifts, stationary, artificial flowers, bamboo and cane. Certain measures are aimed specifically at the handicraft sector - the setting up of a handicrafts village, and award of a national trophy, but neither of these measures have a very direct bearing on the promotion of exports Developments in the use of jute through technical innovation, may be the answer for the long term development of jute product exports But they may not help the existing producers of jute export handicrafts. At present most jute handicrafts are made by small rural groups using locally purchased fiber, and the finished product is purchased by an exporting organization in Dhaka. If the fiber has to be pre-processed in bulk, then it will probably be more feasible to also centralize the manufacture of the finished product.

Handicraft Industry of Bangladesh Thirty three (33) handicraft enterprises were surveyed in detail comprising. Organization NGO exporters of handicrafts NGO or cooperative producers (non-exporters) Private manufacturer/exporters Small private manufacturers (non-exporters) Number 7 4 10 12

The large NGOs were the main buyers of the products of the small non-exporting private manufacturers as well as the small NGO producers. The large NGOs surveyed one was 100% export and the remaining sit combined exporting with local sales through their own retail outlets, mainly in Dhaka. For three, the major part of their income was export sales, and for three it was in retail sales. Although the large NGOs involved in handicrafts are basically traders, they provide a great deal of support to their cooperative and self-help group suppliers. Assistance may include training, product development and design, start up financial assistance-management support, transport and materials supply of the eight private manufacturer/exporters three were 100% export, three exported the major part of their output and also supplied (mainly NGO) handicraft retail outlets and two sold the major part of their output through their own retail outlets.

Demanded Handicrafts in Bangladesh The demanded Handicraft products are available in Bangladesh, these are as below: Main Product Sub Product Twine, hessian, gunny bag, twill, carpet backing, wool pack, tarpaulin, mats, canvas, Jute products wall cover, upholstery, and as furnishing fabrics of different types and natures Nakshi Katha, Jamdani Sharee, Benarashi Sharee, Bags, bed cover, Cushion Cover, Home textile Ornaments Box, Table Prettification, Vest, Wall Mat Leather Embroidered bags, spectacle cases,

Leather goods

chair backs, embossed coin purse wallets made from buff leather, leather wallets and bags etc.

Wooden

Desk Accessories, Kaleidoscope, Kitchen Accessories, Photo Frame, Show Piece

Bamboo products Candle products

Basket, Shoe piece, wall accessories Birth candle, musical candle, candle doll

Problem of Handicraft Exporting from Bangladesh 1. Handicrafts, unlike fair trade foods, are not repeat products. 2. Alternative Trading Organizations and fair trade importers have historically lost market share to commercial importers 3. Expenditure is very seasonal. 4. World Shops generally lack professionalism 5. Global recession 6. Stiff competition from China and SE Asia, where labor rates are very low 7. Traditional giftware faces competition from gift experiences, where vouchers can be exchanged for activity days 8. ATOs and importers are focusing on food products to increase sales (especially in mainstream outlets)

Prospect of the Handicraft in Bangladesh Bangladesh is a land of opportunities. Fertile land, hundreds of inland water sources, favorable climate, abundant human resource and ethnic homogeneity are the main strengths of the country. Every inches of land in this country can be utilized. Besides, some development indicators like mortality rate, literacy rate, and nutrition rate are also increasing. And democracy has been institutionalized. Despite so, I think we failed to attain the growth rate that it should be. Now time has come to redesign Bangladesh economic policy to attain faster growth. Keeping the open market philosophy in mind we have to develop our economic policy in a way so that our export volume substantially increases and side-by-side import substitute industries successfully compete with foreign goods. Above all, to attain ultimate and 6

sustainable economic growth there is no alternative of massive rural economic development. Considering all the implications of new economic order we like to present an economic strategy through which we could achieve economic independence. We have divided the economic activities or basic types of industries into three categories, which are discussed below: a) Agriculture b) Labor c) Handicraft But our main concern deals with effective promotion strategy of the Handicrafts in Bangladesh. Our handicraft has earned enormous respect in the global market with the initiative of Arong and some other NGOs. Most of the ingredients of these items are locally made and easily available. Technology is well known to us and our rural women are very efficient in manufacturing these handmade items. We can produce more quality handicrafts with better training and technology. More commercial firms should come-up to make the work done by rural women workers and market them both at home and abroad. If men can generate income through agriculture and other businesses women can also earn through handicrafts. This combined effort and earnings of the family members ultimately increase their lifestyle and generate more money flow in the economy. Not only that these industry will also uplift the image of our cultural heritage to the global community. This basic industry can be the backbone of our economy. If we are able to develop the industries we can earn foreign currency through exportation after meeting our own need. Organized effort in marketing Bangladeshi handicrafts overseas is, in fact, a matter of recent past-although some of the products were able to find export destinations a little time back. As mentioned earlier, not many products dominate in the export oriented handicraft sector. And all though at present Bangladeshi handicrafts are being exported to well over 50 countries of different continents, more than 70% of the total merchandise is lifted by the European, American, Indian and Japanese market. Table 02: Showing export values of different fiscal years excluding textile handicrafts.

Fiscal Year (FY) 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Export (Million US$) 5.90 4.21 5.12 4.30 8.16 5.49 6.44 7.41

Table: Handicraft Export of different Fiscal Year (excluding textile handicraft goods)
35000 30000 25000 20000 15000 10000 5000 0 2004-2005 2005-2006 2006-2007

Fig: Country base export chart of handicraft goods on 3 FY indicating specific market areas

Studies suggested that handicraft export from Bangladesh can find bigger opening in a number of product areas and at the same time consolidate existing export base in some of the traditional product range. Traditional Bangladeshi products which have made some dent in the export market have the potential for increasing their market share significantly. These are traditional decorative textiles (muslin, nakshi kantha, jamdani), block printed, vegetable dyed textiles, artificial flowers, woven jute products, cane basketry, pottery, small leather goods (wallets, purse, belts), etc. Appropriate adaptation of some of the Bangladeshi handicrafts can also be expected to command increased share in the target markets. 8

The chart is created with the major exporting countries of Bangladesh, it showing a growing market opportunity for handicraft goods in Japan, The Netherlands, Belgium, Canada, Italy, France, UK, Germany, and in our Local market also. But at the same time we have to provide effort to increase export in India and other decrementing large markets. If our government patronizes this marketing process by arranging some international trade fair on only Handicrafts as like DITF then we should be able to capture a large market beside our large competitor India, Pakistan and China.

Ch-2: Methodology

International Marketing Plan A successful export marketing plan identifies your target customer, defines your target market, determines where to meet customers, and identifies effective and appropriate marketing materials. An export marketing plan should forecast marketing and promotional activities for at least two years and be flexible enough to adjust to market and customer reactions. For the proposed international marketing plan of Bangladesh handicraft goods, the following factors have been identified to formulate a successful marketing plan:

i. ii. iii. iv. v. vi. vii. viii. ix. x.

Who are the customers? What is the target market? Where to meet the customers? What marketing materials to use? Expectations of Export Markets Product Development Strategies & Export Product Lines Production Capacity & Quality Control Costing & Pricing for Export Distribution Channels Financial Planning

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Conclusion

Opportunities exist for Bangladeshi handicrafts in export markets as these markets are exposed to the unique design characteristics of Handicrafts. Small amounts of handicrafts are already being exported to Europe, Japan and the U.S. however exporters continue to be confronted by numerous obstacles in meeting the quantity and cost demands of these world wide markets. In order for exporters to be able to take advantage of new economic opportunities and capture new markets the need assistance to promotion our production capacity: Up-gradation the quality of Handicrafts products will be the standards demanded by potential buyers and overcome the many obstacles situation of our country. The NGOs Project and local private organization also can be provided the necessary support to the Export Promotion Department in the Ministry of Commerce, to provide trouble shooting help desk services, government to government liaison, and international promotion of Bangladeshi Handicraft products. The background clearly indicates the opportunity for Bangladeshi handy crafts in the form of handy crafts made of Jute, home made textiles, leather goods, wooden products and Bamboo & candy products and in the market USA, CANADA & European Union. However the Strategic implementation issue and confirmation of the above need to be assumed.

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