VALUE CHAIN ACTIVITIES OF JIBON MINERAL WATER

28th MARCH, 2011

Shawkat Kamal Course Instructor, MGT 401 BRAC Business School BRAC University

Subject : Submission of Project Report.

Dear Sir, We are very much grateful for the chance of submitting a project report on value chain activities. We worked on JIBON mineral water. We tried to get the information about JIBONs value chain process. We could not collect all the information about JIBON mineral waters value chain process due to their confidentiality of the company. We believe you will assess this report considering all limitations. Your feedback will help us to improve. Thank you very much and we will cordially welcome any clarification and suggestion about any view and conception disseminated through this report. Thanking you. With best regards, Md. Russell Parvez Sabbir Ahmed Minhaz Ali Khan Plabon Md. Koushik Azad Hassan Mahmud 08104164 08104109 08104003 08104019 07204022

Acknowledgement: In the process of project accomplishment we would like to thank some people. First of all we would like to thank MR. Rubaiet Ahmed, Deputy Brands Manager who gave all the information about JIBON. We would like to thank Himel, our friend who helps us to fix the meeting with the officials. We also would like to thank the security of the office who treat us very politely.

Introduction Objective: This part is basically describing the understanding the process of producing JIBON mineral water. This term paper allows us to discover the value chain process, which is counted as the most important part for both company and the product. This is basically the specific objective. The general objective which is helpful to find outWhom they get their raw materials? What types of distribution channels they are using? What is their marketing strategy? What are their distribution channels?

Scope: We can say that, this term paper gives us the opportunity to see the value chain process practically. So that we can understood what is really going on the manufacturing. JIBON mineral water is distributing their product locally. But from our point of view, they have the opportunity to expand their business in international market. They are using international standard of production. So it is easy for them to export.

Methodology: The data has been collected from a face to face conversation with the Deputy Brand Manager of JIBON named Rubaiet Ahmed. We went to the office of JIBON situated at 115/7/A, Distillery Road, Gandaria, Dhaka. We did not know the place before. So it took a time to find the office of JIBON. After finding the place we wait for a while to meet the officials

Limitation:
1. We could not go to the manufacturing plant for not getting the permission which we will

make it done by 4th March. And for this reason we could not manage the full information of operation part. 2. JIBON did not provide us enough information about distribution network because these are very much confidential to them.

Company Overview: City group started its journey in 6th feb 1972 in Gandaria Dhaka. In the beginning city group was known as City Oil mills founded by Mr. Fazlur Rahman. In the initial stage company faced lot of challenges since it was a post war situation and in the mean time there was also economic fallout.

For a new company it was tough to run its business thus the owner kept things simple. And initial mission of the company was to produce mustard oil for the local market consumption. In primary stage company mostly concentrated on the local market and with the revenue generated from this was given to the entrepreneur s to evolve the company. And the result was it becomes one of the largest mustard oil companies in the country. The corporate mission statement of city group of industries is provide HYGIENE, HEALTH & EXCELLENCE in food consumables for the consumers at an affordable price and raise awareness in the Local & International market. Which also help the organization to increase its popularity?

The overwhelming revenue generated and the unprecedented popularity of the products of City Group soon found its way into the hearts of the people. Their corporate mission statement also stated That helps the company to increase its portfolio. They came up with the new products like, TEER SOYABEAN OIL", Iodize salt, Flour etc. which were also successful since Brand is already successful and gaining the trust of the final consumer. City Group was by now one of the emerging industries of the country with an ever-expanding business, which led to 21 sister concerns by the end of the year 2006. At present the company focusing on meeting the changing demand of consumer both home and abroad. Till now city group is considered one of the best conglomerates of the country. City group of companies now focusing on the alternation towards a international standard company along with its 21 sister concerns.

Product Overview JIBON, natural mineral water, was introduced in 2001 officially by citygroup. JIBON claims that they are the second brand name in the industry. They have the 25-30% market share (claimed by JIBON, not from any survey).

Source: The water of JIBON is extracted from a depth of 600 ft. It is purified by German Ozone Technology. It is filtered by Reverse Osmosis. The machineries used in the production process are provided by CHIRWA from Germany. Competitive advantage: The competitive advantage of JIBON is their product quality, design of the bottle. Pricing Structure: JIBON provides four different types of bottle having different price. JIBON charges high price for their product as they claim their product is now at A category. Pricing Structure of JIBON

Weight Liter 1 Liter 1.5 Liter 2 Liter

Price Tk. 12 Tk. 17 Tk. 20 Tk. 25

Competitive Scenario: As JIBON mentioned that Mum and Fresh are their main competitor. So the pricing structures of them are given below: Pricing structure of Fresh Weight Liter 1 Liter 1.5 Liter 2 Liter Price Tk. 10 Tk. 16 N/A Tk. 25

Pricing Structure of Mum Weight Price

 Liter 1 Liter 1.5 Liter 2 Liter

Tk. 12 N/A Tk. 20 N/A

Fresh and Mum provides 5 liter pet bottle but JIBON does not provide till now. But by May JIBON will launch 5 liter pet bottle in the market.

Primary Activities: Procurement: All the raw materials of JIBON are produced by their own plant except the print of the label above the bottle. JIBON itself makes the bottle and cap of the bottle. They also make the plastic label attached above the bottle. Packaging is also done by their own materials. Operation: JIBON does the production process in his own plant. First of all the bottle is washed before filling the water. After washing, the bottle is filled with water and sealed with the bottle cap. Then the bottle is dressed with the printed label with the holding volume, ingredients etc. mentioned on it. Then with the help of laser printing, the price, manufacturing and expiry date is printed on the top part of the bottle. After finishing all these things, the packaging part of the bottle is also done by the fully automated machine and stored in the companys warehouse. Distribution: JIBON claims that they have the largest distribution network within the industry. They can supply their product within 6 hours to any corner of the country. They have their sales representative to help dealers and distributors activities. Dealer gets the DO (Delivery Order) from the company but they do not take the product from the company. They distribute this to different distributor and distributor collects product from the company till then the products remain in the company

warehouse. Distributor collects the product at dealer price. A distributor has 100-200 outlets to distribute the product. JIBON has very large number of distributors to Dealer Distributor Outlet distribute the product throughout the country. Under the distributors there are salespersons who work for the distributor to sell the product in the outlet.

Marketing and Service Citygroup of industries is very much focused on their marketing strategies. JIBON Mineral Water which is one of the Brands of city group of companies also follows comprehensive marketing strategies. JIBON is a truly hygienic mineral water matching the highest and strictest safety standard conditions. Thus they wanted to match same standard in their marketing strategies. They believe with an appropriate product a proper marketing strategy is must. Since they want to create a strong Brand Image they build a strong sales force it is indeed quite a number. According to the company they have the strongest sales force then the competitors. Again they emphasize and use both the Pull and Push strategies to attain higher sales as well as higher profit. For promotion they go for TVCs to promote JIBON mineral which is actually a Pull strategy since its directly targeting the customers. To target their customer they also change their packaging and bottle design. On the other hand in rural areas they basically go for push strategy to gain more customers. On the service side JIBON does not come up with a lot of service option. But they ensure there would not be any faults in their product. If there any faults or loops in the product and complaint buy the superstores or the retailers there are always sales force to fix it up without any cost. This sales force are divided into areas such as Gulshan, Banani ,Badda etc areas their jobs is to find out if there is any fault in the delivered product , like in packaging or in bottle cap properly leveled or not if such their service is to fix them .and they make sure their wouldnt be any complain from their customers.

Recommendation 1. Company can outsource their raw materials if there is a probability to minimize the cost. 2. They can go for sponsorship to establish brand image. 3. To attain more competitive advantage over the competitors they can lessen their product price.