Marketing Prospects of

Organic Foods (Fresh

Vegetables) by Palli Bazar: A
PKSF Initiative

As a partial fulfillment of the Requirements of Module-1:

Marketing in a Changing Environment of Advanced Certificate
in Business Administration (ACBA), IBA, University of Dhaka

Institute of Business Administration

University of Dhaka
Marketing Prospects of Organic Foods (Fresh Vegetables)
by Palli Bazar: A PKSF Initiative

Submitted to
ACBA Program
Institute of Business Administration
University of Dhaka

Submitted by
Name Student ID
Shakera Khatun 1341
Anwarul Mostafa 1342
Tanvir Ahmed 1343
Md. Mohaimenul Islam 1344
Md. Fozla Hossain 1345
ACBA Batch-13

August 3, 2018

Institute of Business Administration

University of Dhaka
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1. Introduction

Bangladesh is predominantly an agricultural country. With an annual per capita income of just
US$1516 (2017 data, World Bank), the World Bank considers Bangladesh to belong to the low-
income group of developing countries. However, Bangladesh is not considered as a less developed
country by the United Nations. The country has experienced strong economic growth in recent years,
but unlike many of its neighbors, this has only been slightly curbed by the Asian financial crisis. In
2017, the country’s gross domestic product (GDP) rose by 7.3%. Agriculture plays a pivotal role in
this growth rate.

The largest employment sector of Bangladesh is agriculture. This sector has a significant impact on
the major macroeconomic objectives, like- food security, employment generation, poverty alleviation
etc. Among high valued agricultural crops in Bangladesh, vegetables rank the top. Vegetables are
important from the perspective of the quality of food intake.

Following the economic development, household revenues have increased and changes in food
consumption habits are appearing. Families with growing incomes are buying more food rather than
producing it themselves. Increased consumer income and year-round demand for fresh produced
vegetables force retailers to establish buying points both in different growing areas of the country as
well as in foreign countries. Some retailers contract year-round with fresh fruit and vegetable packers,
who may in turn contract with growers. Contracts and large-volume buying practices enable packers
to obtain sufficient quantities of individual products. In recent years, there is a major shift in the
structure of food distribution in Urban areas of Bangladesh from small independent stores supplied by
wholesale markets, to supermarkets supplied by contracted producers and manufacturers.

Government of Bangladesh established Palli Karma-Sahayak Foundation (PKSF) in May, 1990. Since
then it is one of the apex development organizations of the country. The main objective of PKSF is
poverty reduction through employment generation. PKSF has some core units like Agriculture Unit,
Fisheries and Livestock Unit, Social Advocacy and Knowledge Dissemination Unit etc. Agriculture
Unit was established as a mainstream program in 2013. This unit is responsible to extend sustainable
agricultural technology and capacity building supports to farmers. The ultimate goal of this unit is to
ensure food security to the country.

1.1 Short Overview of PKSF

Palli Karma-Sahayak Foundation (PKSF) is registered under Companies Act, 1994. This is a non-
profit organization. From its inception in 1990, PKSF set its goal of creating self-employment
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opportunities in rural sector. It also adopted the strategy of promoting a credit program for attaining
this goal. This credit program is basically launched for the rural moderate poor. This credit program
has been diversified over time in accordance with the changing needs of heterogeneous poverty-
stricken segments of society. PKSF is currently financing the moderate poor of both urban and rural
areas, ultra-poor, small farmers, small entrepreneurs. PKSF also have the Capacity Building Program,
Technology Transfer, Value Chain Department etc.

1.2 Short Overview of the Product “Fresh Vegetables”

Vegetables can be eaten either raw or cooked and play an important role in human nutrition, being
mostly low in fat and carbohydrates, but high in vitamins, minerals and dietary fiber. Many
nutritionists encourage people to consume plenty of fruit and vegetables, five or more portions a day
often being recommended. Palli Bazar’s Fresh Vegetables in brief:

 Product Name: Fresh Vegetables

 Product Tag: Cultivated with organic and natural fertilizer
 Promo Tag: Keeps you Healthy
 Products Line: Organic Foods
 Brand Name: Palli Bazar
 Organization Name: Palli Karma-Sahayak Foundation (PKSF)
 Brand Tag: The home of Quality Rural Products
 Promises to the Customers:
- Fresh Vegetables using organic fertilizer
- No use of harmful chemicals at any stage
- Use of non-poisonous pesticides control system
 Value Proposition: Providing safe food to the society as a part of ‘Establishing Human
Dignity’ for all (CLTV & Purpose).

2. Present Status of the Product

‘Palli Bazar’ is yet to launch its products, so here basically we discussed about the market status of the
product in brief to identify the marketing prospects.
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According to FAO, vegetable production in Bangladesh has increased five times in the past 40 years.
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Bangladesh has scored 3rd in global vegetable production, next to China and India. The farmers are
getting a huge profit from vegetable production which is changing their life. Literate youths are
joining the industry and are achieving targets with the use of improved technology and their talents.
Due to rising public awareness about eating healthy, fibrous food, demand for vegetables is on the rise
as well.

Bangladesh is producing some 156 types of local and exotic vegetables with the output hitting 3.73
million metric tons from 0.8 million hectares of land in 2016-17 fiscal year, according to the Ministry
of Agriculture and Department of Agricultural Extension. The land under vegetable cultivation in the
country has increased at the rate of 5.0 percent in the last decade. The rate of increase of vegetable
production was 6.0 percent in the last three years. Land under vegetable cultivation during the current
Rabi season has been set at 528 thousand hectares.

The national demand for vegetables is 13.25 million metric tons. So, there is a clear supply side gap
where ‘Palli Bazar’ can intervene in positively to meet the demand of consumers.

2.1 Brand Assessment

A brand is more than just a logo. Strong branding increases the value of an organization, provides
employees with direction and motivation, and represents the sum of everything an organization does
to present itself to the public. It’s not only visual identity but the language an organization uses to
describe itself and the tone it uses to say it. Palli Bazar will undertake a project for its brand
assessment considering the following outcome:

 Branding improves recognition.

 Branding creates trust.

 Branding distinguishes an organization from its competition.

 Branding generates revenue.

 Branding motivates employees.

A strong branding of Palli Bazar can permeate the entire organization and enhance its ability to
deliver to its promises.
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2.2 Methodology of Branding

To assess awareness of and enthusiasm for Palli Bazar brand, we will carry out a two-phased
approach: a SWOT (Strength, Weakness, Opportunities, Threats) analysis using its main
communications channels and measured performance against its competitors, and direct
engagement/conversations with relevant stakeholders and consumers regarding their perceptions of
the product line.

During each phase of the program, Palli Bazar will try to understand the types of positioning that
would drive consumers to understand the difference between organic vegetables and conventional
vegetables. After starting the brand assessment program, Palli Bazar will gather input from
consumers, internal and external stakeholders as primary data. Will also carry out situational analysis
for finding out the challenges and taking measures to improve its communications and overall brand.

2.2.1 Positioning Statement:

Palli Bazar will be the leading resource for producing and supplying organic vegetables not only
throughout the country but also globally to provide safe food to the mankind. It will provide safe food
ensuring availability and at an affordable price to everyone. It embraces innovation and continuously
invests in programs and technology for its sustainability fulfilling its objective.

2.2.2 Current Requirement:

Palli Bazar will take some brand enhancement program using a phased approach to allow for
stakeholder buy in. A phased approach might include:

 Strengthen brand visuals and identity.

 Update digital assets.
 Develop and implement Palli Bazar brand style guide.
 Develop branded templates for key communications pieces.
 Enhance marketing and communications plan.
 Refine internal communications channels and workflow.
 Determine annual communications plan and develop template.
 Implement brand adoption plan.
 Implement annual communications plan.
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 Maintain proactive media relations.

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Palli Bazar has an opportunity to elevate its visibility and brand to its key audiences globally.
Enhancing its current brand and effectively communicating its story is a critical component of this
process and will design to help to achieve its strategic goals.

3. SWOT Analysis of Palli Bazar’s Fresh Vegetables

Below is a thorough analysis of the internal and external environment of the product.

3.1 Strength

 Wide Recognition:

PKSF the initiator of the brand “Palli Bazar” has wide recognition and acceptance as one of
the leading development organization of the country both at home & abroad.

 Nationwide Network:

PKSF operates in each & every Upazilla of the country through its 277 Partner Organizations
(POs). These 277 POs have 8959 branches all over Bangladesh. PKSF has provided various
financial services and assistance of BDT 2710.40 billion to 12.98 million households (source:
PKSF website).

 Talented Workforce:

PKSF employs some 300 people yearly operating more than 3,500 crore BDT & generating
surplus of 300 crore BDT per annum with this efficient workforce.

 Agriculture Unit

PKSF established AU as its mainstream program in June 2013. This Unit enables the farmer
to gain access to resources necessary for boosting crop production. Accordingly, AU has
designed its work plan and implementation strategy for crops sub-sector. Being an integral
part of PKSF, `Agriculture Unit’ has been working within the purview of financial and
administrative capacity of PKSF as a supplementary and additional service provider of the
Government.
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  Superior Technology:

At PKSF, formulations and processes are thoroughly tested at every stage of production
ironing out any potential problem before commercial production begins. Just to guarantee
their customers need when launching a product on the highly competitive market.

 Better Product Quality Relative to the Rivals

As mentioned earlier PKSF is consistent in maintaining high quality and excellence in all of
its operations. Therefore, the Fresh Vegetables product of ‘Palli Bazar’ would be in
advantages position compare to its competitors.

 High Market Linkages:

From production to the ultimate consumer ‘Palli Bazar’ will intervene in every value chain
development. Since it will cover all possible backward and forward linkages it will enjoy
competitive advantage by minimizing costs thereby also be able to offer lower price than its
competitors.

 Teamwork:

Marketing is a networking system of which team work is essential part to achieve the
organizational goals. Team works of the company is another strategy to operate smooth
business by the organizational plan and it is continuous monitored by the higher authority of
the organization.

3.2 Weakness

 Promotional Activity:

It is found that promotion and advertisements of PKSF activities are not sufficient to compare
with its competitors.

3.3 Opportunities

 Growing Marketing Demand:

The fruit & vegetable processing market is projected to grow at a CAGR of 7.1% from 2017,
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to reach USD 346.05 billion by 2022. The global fruit & vegetable processing market
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 comprises the global fruit & vegetable processing equipment market and processed fruits &
vegetables market.

The demand for processed fruits & vegetables is projected to be on the rise, owing to factors
such as increase in disposable incomes, the growing middle-class population, the introduction
of technologically advanced products, and benefits such as long shelf life offered by
processed fruits & vegetables.

3.4 Threats

 Increase Trade Barriers:

Restriction in EU countries on some fruits and vegetables including self ban by the
Government of Bangladesh.

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3.5 SWOT Summary Table
Strengths
- Wide recognition of PKSF help
ease to brand creation of "Palli
Bazar"
- Nationwide Network through POs
- Agriculture Unit and Value Chain
interventions
- Best scope of contract farming
through its 13 million member
households
Opportunities
- Consumers are more conscious of
the prevalence of contaminated
perishable; allowing supermarkets
to capture higher market share.
- Increasing per capita income has
made consumers less price sensitive
and more focused toward healthy
products (Fresh vegetables).
- Scope of using nationwide
network of PKSF to build a robust
contract farming model which has
prospect for scalability.
Weakness
- 'Palli Bazar' is yet to launch its
operation while some players
have already captured
significant market share.
- Less priority on promotional
activity by the senior
management.
- As a new endeavour there is no
prior experience of super market
business.
Threats
- Political unrest and frequent
disruption by law enforcement
agencies disrupt supply chain and
hamper cost competitiveness.
- Rapidly increasing real-estate rental
costs will add to total expansion costs
and deter outlets expansion.
- Increased Trade Barriers (both tariff
and non tariff) to enter into
international markets.
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4. Positioning Analysis: Segmentation of “Fresh Vegetables” Market for
Palli Bazar

Segmentation
Market Segments Target Markets
Parameters
Geographic 1. Domestic 1.1.2 Posh areas (Gulshan,
1.1 Capital Banani, Dhanmondi,
1.1.1 Old town Baridhara) through online
1.1.2 Posh area marketing.
1.1.3 Emerging town 1.1.3 Emerging town
1.2 Divisional Cities (Shyamoli, Agargaon,
1.3 District HQs Mirpur, Mohammadpur)
2. International through outlets.
2.1 Saudi Arabia 2.1 Saudi Arabia &
2.2 Qatar 2.3 UK
2.3 UK
2.4 Malaysia
Income Group 1. High Income 1. High Income
2. Upper middle Income 2. Upper middle
3. Lower middle Income Income
4. Low Income 3. Lower middle
Income
Psychographic 1. Higher Life Style 1. Higher Life Style
2. Higher Life Style (Acquiring) 2. Higher Life Style
3. Higher Life Style (Aspiring) (Acquiring)
4. Lower Life Style 3. Higher Life Style
(Aspiring)

4.1 Targeting Analysis in details

4.1.1 Analysis of Export Market

Present Government of Bangladesh is attaching high importance for the production and export of high
value agro-commodities especially horticultural crops through diversification of produces and market
promotion. About 100 types of fresh horticultural crops are being exported from Bangladesh to more
than 40 countries in the world. The exported vegetables includes yard-long bean, cowpea, cucumber,
snake gourd, bitter gourd, tomatoes, papaya, eggplant, pumpkin, lady's finger, pumpkin, amaranth,
spinach, Indian spinach, cauliflower, cabbage, green chili, taro, coco yam, green papaya, plantain, jute
leaf, bottle gourd leaf, arum leaf, water lily, mustard green, bean seed, jackfruit seed, aroid, etc.

Export of fresh fruits and vegetables from Bangladesh are significantly increased from $51million in
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FY2008-09 to $125million in FY2015-16. However, the export value in FY2015-16 decreased 12%
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over the previous FY2014-15 (Appendix-A Table-1). In FY2015-16, vegetables export market to 38
countries (Appendix-A Table-2) comprises Middle East 62.05% (Saudi Arabia 24.70%, Qatar
15.04%, UAE 9.55%, Kuwait 9.21%, Bahrain 3.55%), EU countries 14.59% (UK 11.86%, Italy
2.73%), Malaysia 11.48%, Singapore 3.93% and others 7.95%.

Table-1 reveals that export quantity and value of fresh fruits and vegetables are in decreasing trend
from FY2014-2015 due to restriction in EU countries on some fruits and vegetables including self ban
by the Government of Bangladesh. The major causes of restrictions are

(i) not complying with the Phyto-sanitary requirement of importing countries,

(ii) presence of quarantine harmful organisms in fruits, vegetables, betel leaves,

(iii) presence of brown rot bacterial agent (Ralstonia solanacearum (Smith) Yabuuchi et al.) and
potato tuber moth in potato;

(iv) absence of product integrity,

(v) documentary reasons i.e. modification of Phyto-sanitary Certificate (PC) and, sometimes absence
of PC during export from Bangladesh.

The Palli Bazar is planning to enter into the export market by ensuring the compliance of the above
mentioned issues. It will initially export its products to UK (zero tariff) and Saudi Arabia (easy access
and the current major destination of vegetable exports).

Palli Bazar is confident to enter into international market since it will adopt Good Agricultural
Practices (GAP) from very beginning of its operations for both domestic and export markets and also
ensure strict compliance of sanitary & phyto-sanitary measures including good packaging.

4.1.2 Analysis of Domestic Market

According to the Ministry of Agriculture and Department of Agricultural Extension, some 156 types
of local and exotic vegetables were grown in Bangladesh with the output hitting 3.73 million metric
tons from 0.8 million hectares of land in 2016-17 fiscal year. The national demand for vegetables is
13.25 million metric tons. So to meet the demand of consumers, the production should be increased
three times or more. There is clear unmet demand where Palli Bazar can intervene in with its quality
fresh vegetables product. It targets the expanding area of capital city to establish its first but gigantic
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outlet of 13 floor building at Shyamoli of which 2 floors will be dedicated to display and sell “Fresh
Vegetables’’ from all corners of the country.
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4.1.3 Domestic Market Players

The idea of selling fresh vegetables at a super store is not fairly new. Almost all of the super stores
operating in the country has a ‘fresh vegetable’ section at their outlets. These Super stores definitely
are the competitors of Palli Bazar. Current market share of these super stores are-

According to the BSOA (Business Supermarkets Owners’ Association), currently there are 121
supermarkets in the country. However, the industry is largely dominated by three major players –
Shwapno (59 Outlets), Agora (13 Outlets) and Meena Bazar (18 Outlets). Once a key competitor,
Nandan, now holds just two stores. In terms of distribution network and competitive prices, Swapno
has entrenched itself as the market leader, whereas, Agora and Meena Bazar are viewed as market
leaders in terms of quality and services.

4.2 Positioning Strategies

The Ultimate purpose of this business is Establishing Human Dignity for all by providing safe food to
the society.

Customer Life Time Value (CLTV) Proposition: The money you are spending here by buying fresh
vegetables is worth; because:

- You are getting fresh quality vegetables which is fully harmless for health.
- The profit made by the business reinvested in establishing human dignity.
- The farmer who devotes his/her hard work in producing your vegetables is getting
comparatively higher benefits (technology, training, market linkages) than the normal
distribution channel.
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5. IMC Strategy Table under Marketing 4.0

Issue Target Group Tools to be Used

Mind Share Youths &Women Emphasis in CLTV and Purpose through
Online Platforms
Market Share Women Stimulating Health Consciousness
Heart Share Netizens Online Promotions
Spirit Share Elderly Citizens Emphasis in CLTV and Purpose

5.1 Palli Bazar’s consideration of Market Paradigms in Introducing “Fresh

Vegetables”

Paradigms Palli Bazar’s Strategy

Globalized Competition Palli Bazar is aspirant to enter into global market by ensuring international
standard of its products
Innovation Innovation in
Packaging: family pack, small pack, ready to cook etc.
Offers: Free of cost nutrition consultancy, Monthly scheme etc.
Delivery: On shop purchase home delivery
Digitization & Technology - Vibrant website containing supply source information
- E-shopping with home delivery
- Internet focused IMC
- Loyalty Program
- production System e-visit
Assess Global Value Chain - Initially Palli Bazar uses national value chain advantages.
Advantage - After reaching to the international market Palli Bazar will try
to use global value chain advantages.
Governance PKSF the brand initiator of Palli Bazar is widely recognized for good
governance. In establishing “Palli Bazar” it will continue its high standard
of governance with transparency.
Data Mining & Marketing Extensive use of data of both producers and consumers will be ensured to
Informatics have good communications and situational analysis.
Brand Security CLTV is the brand security of Palli Bazar
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6. Conclusion

According to FAO, vegetable production in Bangladesh has increased five times in the past 40 years.
Bangladesh has scored 3rd in global vegetable production, next to China and India. The land under
vegetable cultivation in the country has increased at the rate of 5.0 percent in the last decade. The rate
of increase of vegetable production was 6.0 percent in the last three years. Land under vegetable
cultivation during the current Rabi season has been set at 528 thousand hectares.

Government of Bangladesh established Palli Karma-Sahayak Foundation (PKSF) in May, 1990 and
Palli Bazar, the proposed band of PKSF is going to launch "Fresh Vegetables of Palli Bazar" as
product. The national demand for vegetables is 13.25 million metric tons. So, there is a clear supply
side gap where ‘Palli Bazar’ can intervene in positively to meet the demand of consumers.

The Palli Bazar is planning to enter into the export market by ensuring the compliance of the issues
mentioned in the report. It will initially export its products to UK (zero tariff) and Saudi Arabia (easy
access and the current major destination of vegetable exports). There is clear unmet demand where
Palli Bazar can intervene in with its quality fresh vegetables product. It targets the expanding area of
capital city to establish its first but gigantic outlet of 13 floor building at Shyamoli of which 2 floors
will be dedicated to display and sell “Fresh Vegetables’’ from all corners of the country. According to
this report, there is a huge probability of product to be successful.

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Appendix: A

Table 1: Export Growth of Fresh Fruits and Vegetables in Bangladesh

Fiscal Year Quantity Exported (MT) Export Value (in Million Export Growth (%)
US$)

2008-09 24670 50.71

2009-10 29370 64.21 (+) 26.62

2009-10 29370 64.21 (+) 26.62

2010-11 48428 109.41 (+) 70.39

2011-12 59573* 134.59 (+) 23.01

2012-13 80660* 182.23 (+) 35.39

2013-14 92679* 209.38 (+) 14.89

2014-15 62730* 141.72 (-) 32.31

2015-16 55138* 124.57 (-) 12.10

Source: NBR, Export Promotion Bureau (EPB), 2016 and Data Analysis by Hortex Foundation, 2016
Note: *Export quantity of fresh fruits & vegetables estimated by Hortex Foundation as per average
export value of fruits and vegetables @2259.23 US$/MT in FY2010-11 due to export quantity data is
not available since FY2011-12 from EPB.

Table-02: Top Ten Export Markets of Bangladeshi Fresh Vegetables in FY2015-16

Export market Export Percent (%) Ranking of Share of partner Tariff

value share of total partner countries in (estimated)
(million export value countries in world imports in faced by
US$) world imports 2015(%)* Bangladesh
(in 2015)* (%)*

1. Saudi Arabia 25.77 24.70 21 1 2.4

2. Qatar 15.70 15.04 44 0.4 2.4

3. UK 12.38 11.86 3 6.3 0

4. Malaysia 11.98 11.48 16 1.3 1.1

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5. UAE 9.96 9.55 n/a n/a n/a

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6. Kuwait 9.61 9.21 36 15 2.4

7. Singapore 4.10 3.93 29 0.8 0

8. Bahrain 3.70 3.55 64 0.2 2.4

9. Italy 2.85 2.73 12 2.5 0

10. Saint Barthelemy 2.11 2.02 n/a n/a n/a

Total 10 countries 98.16 94.07

Other 28 countries 6.18 5.93

All 38 countries 104.34 100.00

Source: NBR, Export Promotion Bureau (EPB) & Data Analysis by Mitul 2016, Hortex Foundation,
Dhaka
Note: *Data analysis from ITC Trade Map 2015, Geneva, Switzerland
n/a: data is not available

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