Executive Summary

After studying the theoretical concepts of a topic, understanding its practical

implications and applications is the next step in the learning process. This assignment on
the Business plan of any new product is a part of that next step. In the process of writing
this report, we came to know about different aspects of marketing, especially the
Business plan techniques of the company we have designed with the light of our little
knowledge.
We have been given to work on The Business plan of an upscale furniture store.
We believe that by targeting a segmented market, we can successfully occupy an
emerging niche that other channels of distribution have not been able to target.
Our objective in this business plan is to create a better everyday life for the many
people. We do this by offering a wide range of well-designed, functional home furnishing
products at considerably low prices so that the highest possible number of people will be
able to afford them.
Our strategy is to reach a concise market niche so that we could serve to it with all
our efforts. Our company mainly imports furniture made of Plywood. The Plywood-made
furniture is relatively cheaper as far as the production cost is concerned. This makes our
job a bit easier as we look for offer something before our target consumers with a
relatively lower cost.
There are three functional departments in Kraft Furniture which are
Administration, Purchase and Sales & Marketing and there will be a Chief Monitoring
Officer who will monitor three functional departments. On the basis of our projected
profit and loss statement we are going to achieve the break-even point for our company
after 4.4 years.
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Introduction

As people move upward to the higher ladders of the hierarchy of motivation they
tend to expand their wants to various dimensions. Physiological satisfaction is an
important thing. When the worry about food, clothing and shelter is over and one knows
that one is secure and has a respected place in society, the desire for comfort blended with
style and class comes to the heart and mind. Kraft Furniture provide both the comfort and
the beauty in their product and our job is to pass this message to the public who are
craving for such an opportunity where not only will they be able to relax and enjoy the
furniture of high quality but will also be able to sooth their eyes by their beauty and style
not to mention the overwhelming joy they will get when others appreciate their precious
possessions.
Since trendy furniture are already in the market it will not be that hard to make the
consumers of our client understand the value of it. What our main job is here is to let
people know that our clients product is the best they will find where not only the fashion
is kept in mind but high class quality is added to it. The Furniture includes all sort of
home furniture. A list is provided below:
1. Bedroom furniture.
2. Kitchen furniture.
3. Study furniture,
4. Drawing/ living room,
5. Dining room,
6. Lounge furniture,
7, Others
After a thorough research and study we have come up with a systematic idea as of
how to carry on the whole marketing plan. Basically we will use the fighting method of
advertising, skills and hard work. We will provide a step by step explanation of our
market plan throughout this project.
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BUSINESS MISSION

We have a mission statement that drives everything we do. Its purpose is to help us
maintain our long-term vision to serve our customers with the high quality home
furniture and service they expect.
We strive to be one of the best furniture assembling firms in the industry through which
our target market can reach its preference.
We are dedicated to provide the highest quality home furniture, furnishings, and materials
to businesses and consumers all over Dhaka at affordable prices based on Quality.
We are sensitive to the look and feel of good wood and fine furniture keeping in view of
current trend, market demand and life-style.
We are committed to develop mutually beneficial trade relationships with our customers
based on integrity and efficiency. Our aim is to position our product line as the High
Quality. We always provide the best possible value to our customers who care about
quality home environments, and we want every dollar spent by us to be well spent.

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CURRENT SITUATION & TRENDS AND PERFORMANCE REVIEW

The Furniture industry of Bangladesh has proved to be one of the most promising sectors
with a high export potential. The industry has its members spread all over the country
with key players located at Dhaka. Dhaka is further segregated into three to four main
clusters: Mirpur, Gulshan, Panthopath and Elephant Road. The demand and import for
furniture is growing fast. Unfortunately, the producers have not been able to exploit this
growth. One of the most critical issues that influenced the producers last year was a
policy restriction which affected the availability of good timber and which leads to great
uncertainty and reluctance to changes and investments.
INFORMATION ON THE MARKET:
Sawmills and timber traders: Wooden home furniture sector largely depends on their
saw mills and timber traders. The saw mills and timber trading units buy their timber on
auctions organized by certain government bodies. The major input markets for these
enterprises are located at Farashganj (Dhaka), Chittagong, Pirojpur, Khulna and
Chandpur from where they collect locally grown timbers which are imported from
Myanmar (Burma), Nigeria, Indonesia, Malaysia etc.
Introducer of non-wood materials: Industry leaders like Partex, Otobi, Navana have
brought about a revolution in furniture materials. They have introduced particleboards,
woodex, plytex, medium density fiber (MDF) board on the market creating an impact in
the wooden furniture sector. The industry leaders in the cluster are showing an interest in
sophisticated MDF boards for innovative and stylish products.
Hardware shops: They provide all the necessary accessories starting from screws, nails,
hammers; hand-tools used for creating designs, jointers, and measurement tools to color,
varnish, polish etc. The hardware sellers collect their inputs from Nababpur, Karwanbazar
and other wholesale markets and they try to introduce new products in the market.

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Color suppliers: The color suppliers still confine their product line to traditional laborintensive French polish or Shellac whereas the industry leaders have already switched to
Sayerlack wood-lacquer imported from Italy via Singapore.
Fabric suppliers: There are around 10-12 fabric suppliers, which mainly cater to the end
consumer markets. Some of them also cater to the furniture manufacturers. The bulk
quantity of fabric comes from fabric suppliers located in Elephant Road and Islampur.
COMPETITION:
Almost all types of manufacturers face stiff competition from imported furniture and
locally made non-wood trendy furniture. Despite the high costs of some of the furniture,
the sector is incompatible in terms of quality and design. Globalization and increased
exposure to developed markets brought changes in peoples attitude & lifestyle and
products have made the traditional ways and products less attractive.
MACRO ENVIRONMENT:
No Policy Support: Despite the ongoing changes in the furniture sub sector, there is no
government policy to support for this dynamic industry. The government has not yet
declared the furniture sector an industry and so it is not regulated under industrial law.
Role of Banks: Some banks like BRAC bank are providing loans to some of the
manufacturers under SME development scheme. Furthermore, local branches of different
banks have improved transaction patterns. Nowadays, banks like HSBC and Standard
Chartered have come up with Consumer Credit Schemes.
Public benefit service: There is a central association named BAFIOA. This association
plays a leading role in creating market linkages for large manufacturer by organizing
furniture fairs. They also facilitate the introduction of better business practices.

INDUSTRY STATUS
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The furniture industry of Dhaka constitutes a major portion of the entire furniture
industry of Bangladesh. The following table will provide evidence of the fact that it is the
center of growth of this sector.

The market size of Bangladeshi furniture with a combination of different types is

nearly Taka 4 billion with a growth rate of 15-20 percent.

The number of furniture manufacturing enterprises is nearly 10,000 in the

country.

Average annual import of furniture with a combination of different types to

Bangladesh is estimated as high as Taka 8-10 billion.

The country has earned Taka 61 million from export of modern wooden furniture
during the first quarter of the financial year of 2003-2004.

The furniture sector employs 5 million people in the country and it can create
extended employment to 10 million people if some of the existing problems could
be eliminated.

ELEMENTS OF MARKETING PROGRAM

Transportation: Transportation services are used at different levels. Retail owners
usually use rickshaw vans or pickup vans to deliver furniture to the clients address.
Sawmill owners use trucks to bring in timber from outside Dhaka and to deliver it to the
manufacturing units.
Promotion: Some large shop owners advertise on national TV channels and in
newspapers in order to promote their products. They publish product catalogues and
brochures in order to carve out a larger market share.
Access to Finance: BRAC bank has a special credit scheme for some of the stakeholders
of the furniture sector. They have even set up a unit office in various places to facilitate
their work in the area.

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After sales service (repair & maintenance): A certain fee is charged for fixing furniture
if something goes wrong within a certain period after purchase. The manufacturers also
charge a fee for polishing old furniture.
Design: Some of the large manufacturers have their own interior design units, which
provide a service in addition to the supply of furniture. The shop owners often assist
customers in choosing designs of their furniture according to the size and configuration
of their house.
After sales service (installation of furniture): Shop owners send their employees along
with the furniture to assist in installing it in the clients house or office.

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SWOT Analysis
Our business plan consists of a SWOT Analysis to identify Internal Strength and
Weakness and also to examine external opportunities and threats. While examining
internal strengths and weakness we have focused on our organizational resources such as
production costs, marketing skills and technology.
We are on the brink of major opportunity and have the strength of combined
expertise in high tech furniture assembling, and the opportunity of growing market and
new channel of distribution.

Internal Strengths and Weaknesses

STRENGTHS
Quality:

Our firm focuses basically on High Quality keeping in mind that the money of the
customers is worth paid off. We will not only develop the product Kraft Home Furniture
but will turn into a brand and will make sure that customers favor our products.
Design:

We will Design our new product keeping in mind the trend, taste, comfort and culture of
our society and will use Micro-marketing strategy to tailor products and marketing
programs to the needs and wants of specific Individuals and local customer groups.
Financial Resource:

We will use High Financial Resource to launch the product and will try to use it
effectively and efficiently. We will try to add financial benefits besides adding social
benefit and structural ties to build customer relationships and customer equity, and
attract, retain and grow customers.

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WEAKNESSES
High risk:

High Finance in launching the product involves high risk taking. It is natural that putting
in a lot of money to a business will be a matter of high risk taking, specially with quite
some competitors who are doing well in this line of business.
Technological challenges

Establishment on the Internet will produce technological challenges. We are targeting to

launch an Internet based selling process as well as some physical outlets. We are
budgeting quite some amount of money to launch the web, but in an under developed
country like ours the risk is quite high. We are quite unsure about how or target markets
view e marketing.
External Opportunities and Threats
OPPORTUNITIES
Technological:

Internet Marketing and Sales causes new channel of distribution. Click- and motor
facility will discriminate us from our competitors. One of the main objective of ours is to
launch an internet based buying or selling or in a word an e-commerce solution for our
product. The competitors of ours have not yet made any offerings like this, but if they
have their service is quite poor, our research shows that.
Demographic:

Increase in portion of women in work-force who will be our one of the target market will
be attracted towards our new high class home furniture. Nowadays it is the women who
are the decision takers and makers of our family. It is quite natural for a woman to
understand art and design that our company is willing to develop in our furniture.
COMPETITION:
Furniture' is a very common and demanding item for households. During the last few
years many furniture shops has been growing in every local areas of the Dhaka city. So,
it is easy to understand that there are a large number of competitors of our client. There
are so many competitors of our client in the market that it is very difficult to list all the
names. However, we have listed some of the important competitors names:.

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The list of the competitors' names:

1. Otobi World Class Furniture;

2. Navana Furniture Ltd.;
3. Partex Gallery;
4. Hatil;
5. Hi Fashion Gallery;
6. German Furniture Ltd.;
7. Koncept Better Price Better Furniture;
8. Exclusive Furniture;
9. Italiano;
10. Touch wood;
11. Euro Touch;
12. Index Furniture;
13. Gulshan 1 Furniture Market. For e.g. M/S Rahim Furniture;
14. Green Road Cane Furniture Shops;
15. Panthopath Ship Furniture Shops;

It is not that people choose our competitors product instead of ours, It is they choose
cheaper quality mainstream material instead of a high quality product which we offer.
So we are also viewing the competition as an opportunity because our competitors
have a lot of gaps in their marketing strategy on which we will be taking advantage
of.
THREATS
Social:

Products are created keeping in mind the high life style of people nowadays. This will
ensure high quality with reasonable prices. Our new product mainly targets the middle
and upper class segment. Targeting segments like that involves some threat, as other
classes would not benefit from our product, thus not letting us benefit our profit.
Political and Legal Threats:

Due to high duty, taxation and changes in regulation of Government policies, fluctuation
in prices may occur, causing problems in keeping the price of the product stable.
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Besides, political interruptions, like blockade programs, may have a negative influence
on our shipments, suppliers and distributors.
Ecological:

Raw-material for our product is wood, which is obtained from chopping of trees causing
de-forestation resulting in Ecological threat. The cost of importing the bulky raw-material,
like cherry tree wood and oak from other countries, becomes expensive causing the
price of the finished product to rise.

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Specific Objectives

Vision:
We aim to create a better everyday life for many people. We do this by offering a wide
range of well-designed, functional home furnishing products at considerably low prices
so that the highest possible number of people will be able to afford them.
Most of the time, beautifully designed home furnishings are produced targeting a small
part of the population the few who can afford them. From the beginning, KRAFT
FURNITURES has taken a different path. We have focused on responding to the home
furnishing needs of people throughout our target market and plan to support them as
many ways as possible.
One thing which seems to be mentioned here with some importance is that, KRAFT
FURNITURE is being operated within Bangladesh which is considered to be a
developing country. The overall life-standard is relatively low here but it is increasing
day by days so there is certainly a limitation existing with the purchasing ability of the
local inhabitants. Since we are importing standardized furniture from different worldclass furniture manufacturing firms, we have to be settled with a certain level of price
despite our effort to make it as low as possible. This is the reason why we have
segmented middle class and upper-middle class people as our target consumer group.
In addition to financial status, we are looking for people with many different needs,
tastes, dreams, aspirations, of course with minimum wallets. People who want to improve
their homes and create better everyday lives are being considered as our premier target.
How we are Different:
How is KRAFT FURNITURE different from other furnishing stores? Well, most of the
furniture companies offer a wide range, or good design and function- that means quality,
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or relatively low/ affordable prices. We are a bit different here as we offer all of these.
That is our business idea.
A wide range:
The KRAFT FURNITURE product range is wide in several ways. First, it is wide in
function. The consumers should not have to run from one small specialty shop to another
to furnish their home. Here, you will find plants, living room furnishings, toys, frying
pans and whole kitchens. Secondly, it is wide in style. We have well-decorated furniture
that helps build a home that has room to lead better life. Finally, by being coordinated, we
would be able to offer a wide range of style at the same time.
Good design and function:
It's not easy combining good design and good function with the right quality, at an
affordable price. As a firm that merchandises furniture, we focus on different furniture
with varied designs and functions. In fact, as the procedure of importing quality furniture
is highly cost effective, we have decided to highlight on what is authentically important
for the consumers. We don not present to the consumers what is unnecessary, because
that costs money. Our customers want smart solutions to meet needs they have. The
KRAFT FURNITURE range is the result of our efforts to meet those needs.

Low prices:
A wide range with good shape and function is only half the story. Affordability has a part
to play may be the largest part. That is why price comes as the most critical dimension
for us who seek to make a better everyday life available to the many, not just the few. A
low price is linked to the happiness of finding just what you need for your home. It
generates the joy of being able to own it without having to forsake everything else. That
is why we spend most of our days finding ways to keep prices low.
However, we also need to keep in consideration that we are not a manufacturing
company. So, the price level cannot be controlled according to our own will and our
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effort. Still, we reduce the price through having a minimum level of shipping and
importing cost and some other variable and overhead cost.
ABOUT COMPETITORS:
Competition:
1. Furniture is a very common and demanding item for households. During the last
few years many furniture shops have been growing in every local areas of the
Dhaka city. So, it is easy to understand that there are a large number of
competitors in the industry.

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Business Strategy

Our strategy is to reach the market niche: This is undoubtedly a challenging job for a
firm to run a merchandising furniture firm in a third world country like Bangladesh ;
because the difficulty to raise up the initial business and the ultimate risk to face a loss is
quite usual here. However, as a business firm we are bound to deal with the
corresponding difficulties and risks.
The very first thing we have focused on here is our target market. We have segmented our
target market to make it concise enough so that we could serve to it with all our efforts.
As we have mentioned earlier, it is the upper middle and upper class people in the society
who we are going to serve to. The purchasing power of this segment certainly matches
our offered level of price. At the same time, we are offering them the products they want
with some importance. Taking up the cost associated with importing goods and running
the business in consideration, we have found this section of the society as our desired
consumer group who has surely got the taste and ability to buy our products.
Our company mainly imports furniture made of Plywood. The Plywood-made furniture is
relatively cheaper as far as the production cost is concerned. This makes our job a bit
easier as we look for offer something before our target consumers with a relatively lower
cost. Moreover, though the furniture industry in Bangladesh is a rapidly growing one, still
we have found not more than 100 stores who are selling plywood furniture. WE are not
sure, but it may be because of the scarcity of corresponding raw materials and converting
and polishing instruments. However, the usage of plywood furniture has increased to a
mentionable extent due to the user-friendliness of Plywood thanks to some prominent
local furniture manufacturing companies like OTOBI.
Now, considering the escalating popularity and the relatively less availability compared
to the present and forecasted future demand, we have decided to serve this underserved

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market. This attempt might reduce the array of competition for us which is not ignorable
at any how since we are at the probationary stage in the horizon of furniture business. It
is no deny the fact that we cannot expect an initial success at a very high scale. However,
A considerable amount as our initial revenue is also expected which is included in our
preliminary business strategy. This strategy has been set because we need to reach our
break-even with one & a half a year
Since we are focusing on quality, we have to be realistic enough to get ready for
receiving some initial losses and a slow initial growth rate. We need to take some time to
reach up to the circle of preference of our consumers. It is apparent that we have to face
a very huge challenge from our giant competitors at the very initial stage. So the first two
or three months are going to be crucial.
We are dividing our operational period into quarters each of which lengths six months
here. It means, we have forecast six months as our first quarter. So we need to import
furniture for first six months and the first slot of our import wouldnt include that much
variation.
We aim to start our business from January 2006 and accordingly our first quarter would
end up by June. During this period, our main target would be to get promote our
organization as an emerging and an evolving one and make people aware of what we are
doing. By this time, we start selling our products which were accumulated into inventory
by the time we aim to launch our product.

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The Marketing Mix

Our marketing mix mainly depends on the product, but we are also putting high pressure
on advertising, and also maintaining our channels. We will also justify our price with the
value the customers will get by using our product. Our objectives and roles of each
element of the marketing mix are clearly specified and they are described below.
Product:
Our product marketing will emphasize the benefits of our unique combination of
technological expertise and fine furniture craftsmanship. We will sell pride of ownership
and workmanship, along with prestige. That will come out in our packaging, finishing,
shipping, and collaterals.
Since trendy furniture are already in the market it will not be that hard to make the
consumers of our product understand the value of it. What our main job is here is to let
people know that our clients product is the best they will find where not only the fashion
is kept in mind but high class quality is added to it. The Furniture includes all sort of
home furniture. A list is provided below:

1. Bedroom furniture.
2. Kitchen furniture.
3. Study furniture.
4. Drawing/ living room.
5. Dining room.
6. Others
Promotion:
Our promotion strategy is based mainly on making the right information available to the
right target customer. We cannot afford to sell our expensive products to people, because

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most do not have the budget. What we really want to do is make sure that those who have
the budget and appreciate the product know that it exists, and know where to find it.
The marketing has to convey the sense of quality in every picture, every promotion, and
every publication. We cannot afford to appear in second-rate catalogs with poor
illustrations that make the product look less than it is. We also need to leverage our
presence using high-quality catalogs.
Newspaper: The Daily Star and Prothom Alo are the two premier papers we have
considered. These two papers are the most popular papers and are preferred by our target
audience. These advertisements will be given on the first page for the first month and
then on the third page for the next month also after that special advertisement will be
made on special occasions.
Banners: We will have about 20 banners all over Gulshan, Banani, Dhanmondi and
Baridhara. Since Banners are relatively cheap and do catch attention we have chosen this
media for Kraft Furniture advertisement. These banners will be placed near shops,
important roads, offices, clubs and restaurants.
Billboards: There will be two still billboards and one electronic billboard. The electronic
bill board will be three dimensional. They will be placed on Gulshan 1, Gulshan 2 and
Kamal Ataturk Avenue

Distribution:
We are having a single showroom at Panthapath. This is our only showroom through
which we are running our business and dealing with our various customers. As we are a
merchandiser organization, we have several big dealers abroad. Moreover, we also have
contacts with some local manufacturers and distributors also for the convenience of
getting different repairing materials.
Price
We believe that by targeting the mid-level market, we can successfully occupy an
emerging niche that other channels of distribution have not been able to target. So we are
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eyeing for relatively moderately priced products. However the products will be composed
of high class material and the designs will be unique. We will be able to justify our
pricing strategy by providing quality and useful products. The pricing strategy is based on
the following aspects:

Levels of pricing

Acceptability of price

Customers price sensitivity

Pricing method

Payment Methods

Discounts

Levels of Price:
As told before our price level will be moderately relative to that of our competitors, but
justification of this price is the high quality, elegant, and the prestige of these products.
To make a high quality product the materials, service should be up to the mark. This will
increase our product cost. So charging relatively high price is justifiable.
Acceptability of price:
The main risk involving in this pricing strategy is whether our target market accepts this
price. The researches show us they will. People we are targeting are actually in the trend
of acquiring prestigious products, and we will be making sure that our products will bring
prestige and pride to ones abode.
Customers price sensitivity:
Our target markets price sensitivity is also one of the main concerns of our company, but
again when buying prestigious product customers tends to be fewer prices sensitive but
more brand concerns. We will try to build a good brand name and sell by the company
name rather than the product itself.

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Pricing method:
We will be targeting for value based pricing. We will be setting the price based on buyers
perception of value rather than on the sellers cost. The prestige, pride of having our
product will increase the perceived value of acquiring this product. We will be eyeing for
that perceived value.
Payment Methods:
Mainly we will be accepting cash payments, no check payment will be accepted only
except for special cases. We will also be accepting different credit cards. We will be
offering installment payment under specific conditions like time, interest rate etc.
Discounts: We are also targeting to put special discount on the products price in special
occasions like the Eid etc.

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Action plan

There are three functional departments in Kraft Furniture. Our functional

departments are Administration, Purchase and Sales & Marketing. Three of the partners
of Kraft Furniture will perform role of the department head of three functional
departments. 4th partner of Kraft Furniture will work as Chief Monitoring Officer. He will
monitor 3 functional departments.
The target customers of KRAFT furniture will come from middle and upper
middle class of the society. They give more priority to user friendly appliances than the
luxurious products. We are giving these convenient products at a reasonable price so that
the targeted customers can afford it.
All the partners will formulate a grand strategy for Kraft furniture. After that each
department will individually develop his strategic plans. According to their plans, they
will go for implementation. Every partner will be responsible for their steps taken for
their own department. After the evaluation from the CMO, department head will take the
corrective action if needed.
Chief Monitoring Officer will take the necessary steps needed for arranging a
loan from bank. He will finance the purchasing department. He will provide all the
expenses of running the business. He will monitor the total cash inflow and out flow. He
will have the largest share in the business.
The Administration Department will issue the Trade License from Dhaka City
Corporation. He will do the Vat registration from the Vat Department. He will also
arrange the TIN (tax identification number) for Kraft Furniture. He will arrange the IRC
(Import Registration Certificate) from CCI&E. head of the administrative department will
recruit the employees needed to run Kraft Furniture. He will also monitor their training
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He will evaluate their job performance and have a strong control over them. He will also
monitor the infrastructure development and the home delivery system.

Head of the purchase department will deal with the foreign suppliers and
wholesalers. He will deal with the C&F agent (clearing and forwarding agent).

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Projected profit and loss statement

Initial Investment:

Land
Building
Interior Decoration
Generator
Total

6,000,000
800,000
200,000
100,000
7,100,000

Projected Income Statement (For a Month):

Sales (15000*30)

450,000

Cost of Goods Sold (5000* 30)

Gross Profit

150,000
300,000

Other Expenses:
Salary Expense

100,000

Utility expense
Advertising expense
Miscellaneous expense
Total

135,000

Net Profit

165,000

Break Even Analysis

Fixed Cost
Variable Cost (Per month)
Revenue (Per Month)

7100000
165,000
300,000

BEP = FC/(R-VC)

10,000
15,000
10,000

52.6 Months or 4.4 years

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Conclusion

We believe that by targeting the high-end market, we can successfully occupy an

emerging niche that other channels of distribution have not been able to target, but still
the risk involved is quite high. It accentuate when it is considered that we are targeting a
concentrated market, but our uphill struggle and uncompromising of quality will be
ensured. The Marketing Plan will guide us through the whole process. The whole
campaign is designed in such a way that we are very much hopeful that it will bring the
targeted customers to the store and they will help us to increase our sales.

Recommendation

The executive furniture market is steadily increasing at an average calculated annual

growth rate of 7.75 percent. With this in mind, our marketing programs will expand
accordingly. The addition of an internally created catalog will allow Kraft High Class
Home Furniture to market to this expanding number of potential customers. Sales will
increase accordingly, providing working capital for internal product development,
marketing department growth, and Internet development. A presence on the Internet will
be a key milestone to expanding sales and marketing potentials through the utilization of
new channels.

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