An Report on RFL plastic Bangladesh

RFL Best Buy Outlet Eliminating

Intermediaries

Abstract:
RFL Plastics, a subsidiary of RFL Industries, is one of the largest manufacturers of indoor and
outdoor plastic products for domestic and export markets. It has become a benchmark for
competitors on the lines of quality by manufacturing premium quality products to give clients
excellent services and true value for money. The unmatched products have given a big name to
the domestic market to such an extent that the name is accepted with trust, quality and assurance
in all over Bangladesh. This was only possible due to the company being professionally managed
and promoted by people who ensure that creativity and talent is given full freedom to blossom
and nurture in the organization. It was due to this managerial community that the new era of RFL
plastics in on the way. RFL Best Buy Outlet is indeed the future of RFL plastics. It does not
only eliminate intermediaries but also allows more managerial control over its product. The
success of such a strategy is currently witnessed and being optimistic about its future would not
be a bad idea.

How it all began!!

RFL started its journey with Cast Iron (CI) products in 1980. The initial main objective was to
ensure pure drinking water and affordable irrigation instruments for improved rural life. Today
the company has its wide ranges of CI products like pumps, tube wells, bearings, gas stoves etc.
and has achieved the prestige as the largest cast iron foundry and light engineering workshop in
Bangladesh. With a vision to serve the common people of Bangladesh with quality necessity
products, RFL diversified its operation into PVC category in 1996 & in Plastic Sector in 2003.At
present it is market leader in all these three sectors-Cast Iron, PVC & Plastic in the country.
Sizeable amount is also exported to different countries.
RFL Plastics Limited commenced its operation in 2003. The vision of the company is to make
molded household products and furniture made of plastics of decorative design at an affordable
price. The company's product ranges include household items like table ware, kitchen ware,
cleaning accessories, storage containers, multipurpose ware, baby ware, hangers and furniture
items like Arm Chair, Armless Chair, Table, Stool etc. Due to its perceived superior quality,
innovative design and varying ranges, RFL has already been established as most preferred brand
in plastic category in Bangladesh. With the expansion of its product line and capacity, the RFL
products are now being exported in various countries around the globe. Through vigorous
selection and evaluation process, best quality food grade plastics are used as raw materials for
manufacturing. The factory is located at Ghorashal, Narshingdhi and is equipped with 70 plus
injection molding machine. Around 3000 workers under the supervision of more than 100

technical experts put their effort to give the shape of the consumer demands. Each process line of
manufacturing goes through stringent quality control process and checked against slightest of
nonconformance. The company has its own R&D laboratory which explores about product and
design innovations that can meet both expressed and unexpressed consumer demand (RFL
Group, 2012).

Where it all began!!

RFL has a unique production facility comprising of different machinery and segmented
production line for each of its product. Production facility is greatly secured from occupational
health and hazard issue, theft issue and environmental issue. RFLs 600,000 square feet (55,700
square meters) modern plastic manufacturing facility is located 30 miles (50 km) east of Dhaka
(capital of Bangladesh) and went into production in 2003. The factory is fully equipped with
state of the art injection molding, vacuum forming and blow molding machines with a
conversion capacity of over 3,300 tons (3,000 MT) of resin per month. RFL currently utilizes
500 production molds and an in-house mold repair shop.
The facilities are well equipped with China, Taiwanese and Thai Technology to produce high
quality flexible plastic products such as Hanger & Garments Accessories (Moving Shirt Hanger,
wall Hanger), Food Storage Products (Food Storage Box), Household Utilities (Mug, Super
Bucket), Washroom Accessories (Square Soap Case), Beverage Products (Glass Stand, Design
Glass), Utility & Cleaning Products (Laundry Basket), Furniture (Arm Chair, Table, Stool) etc.
Covering the wide range of packaging, pouches, tubes, garment and films of HDPE (High
Density Polyethylene), LDPE (Low Density Polyethylene), PP (Polypropylene), LLDPE (Linear
Low Density Polyethylene) and their mixes based packing materials round the clock and satisfies
almost all sort of the industry. It can produce up to 8 (Eight) colors and deliver its products
within a very short span of time with a total installed production capacity of 3,000 MT per
annum. The capacity utilization of the industry is over 95%.The industry has the started with an
installed capacity to produce 3,300 tons of plastic flexible of different sizes, colors and thickness
and now increasing their capacity to meet the growing demand (RFL Group, 2012).

Industry ~ emerging globally

Bangladesh could emerge as a global player in plastic industry by hiking its turnover to $2
billion by 2015 and $4 billion by 2020 as cited by a case study on Bangladesh's plastic sector
conducted by the Economic and Social Commission for Asia and the Pacific (ESCAP) of the
United Nations. Plastic is an engineered material used to manufacture a wide variety of products
to meet the domestic demand of Bangladesh and export the remaining to other countries (Singh,
2012).
The plastic industry has emerged as an important industrial sector in the country during the last
two decades. At present there are 3000 plastic manufacturing units, 98% of which belong to the

Small-Medium Enterprises (SMEs). Domestic market size is Tk 7,000 crore. Per capita
consumption of plastics in Bangladesh is 5 kg per year. The plastic sector constitutes 1.0 of GDP
and provides employment for half a million people. Total export earnings for both direct and
deem (RMG accessories) exports are about US $ 337 million. An in-depth study of the plastic
sector reveals multi-dimensional constraints and an excellent prospect for future growth. Major
constraint in the plastic sector is the lack of an institutional arrangement dedicated to this sector,
in order to provide supporting services such as skilled manpower, testing facilities for quality
control, innovative technology and consultancy services. The availability of cheap labor and the
fast developing plastic wastes recycling industry due to rising cost of petroleum (raw material of
polymers) provide Bangladesh potential advantage of competitiveness in the global market. An
expert (BUET, BCSIR, BITAC, BPGMEA) consultation meeting held on the plastic sector
organized by the SME Foundation in 2008, has recommended setting up Bangladesh Institute of
Plastic Engineering and Technology (BIPET). Aims and activities of this institute are given in
this paper. This proposal is in the light of Indian experience. The entrepreneurs in the plastic
sector have developed the plastic industries with their own initiative and finance. Now,
considering huge potential of this sector and the multi-dimensional nature of the constraints, the
government must provide supportive policy and institutional arrangements (Singh, 2012).

Uses of MRP Method

To fulfill the market demands the company uses MRP. In accordance with MRP, in the first
action of the company is to forecast, production plan and taking orders for the product. Product
forecasts are needed for each company to plan the future budget for the product, then the
production plan and takes orders from customers. All three of these things combined made the
master schedule of the company; the company has to look at their MRP so that they prepare
master production schedule to meet demand. Before making the companies order the release to
check the status of inventory to know about their current position in the in the inventory. After
make the order the Company has to verify CRP (capacity planning requirements). If there source
is available, the company makes a purchase order, and work orders. When the material reaches
the company, they store some of the raw materials and other parts directly load and scheduling
production to produce the final product.

Introducing new strategy~ RFL BEST BUY

OUTLETS
In year 2012, RFL plastic witnessed several ups and down in the financial segment of the
business. Study showed that such inconsistency aroused due to intermediaries failing to meet up
with the target sales. Even though the market had ever booming demand, sales figures were not
increasing to the potential level. Market research showed that such inconsistency did exist due to
the competitors, who in some cases shared the same channel of intermediaries to segment its
product. Hence, relying on the intermediaries was not suitable for RFL to meet up to its potential
sales figure.

Such a dilemma led to development of new strategy by the management to resolve such issues.
Hence, RLF best buy outlets were introduced in late 2012 through opening Mirpur, Khilgaon and
other branches. At the moment, they have 23 best buy retail outlets in all over Bangladesh. As
time goes by, they look forward to opening more in different target segments of Bangladesh. Yet,
the question lies why choose this strategy?

Style & Design~ RFL Best Buy Outlets

RFL Plastic Ltd. is expert in making different dices for different items. The company gets those
designs from its buyers, suppliers according to their specifications and they have strong R&D
laboratory, which explores about product and design innovations to meet peoples demand. They
have 70 plus injection molding machine to produce those product. These includes such as Arm
Chair, Armless Chair, Table, Stool and so on (The Daily Sun, 2012).
RFL best buy outlets have been designed uniquely to meet up its customer expectations and go
beyond it. The stores are located in prime location and designed to attract the particular segment
of people of that location. The interior is furnished with glossy walls so that it can reflect light
and enhance the products glossiness. The Stores are also designed in a particular pathway so that
customers can walk freely to its desired products location. Moreover, the

RFL Products ~ Polly balls Category

HDPE is defined by a density of greater or equal to 0.941 g/cm. HDPE has a low degree of
branching and thus stronger intermolecular forces and tensile strength. HDPE is used in products
and packaging such as milk jugs, detergent bottles, margarine tubs, garbage containers and water
pipes. One third of all toys are manufactured from HDPE (RFL Group, 2012).
LDPE is defined by a density range of 0.910 0.940 g/cm. LDPE has a high degree of short and
long chain branching. LDPE is used for both rigid containers and plastic film applications such
as plastic bags and film wrap (RFL Group, 2012).
LLDPE is defined by a density range of 0.915 0.925 g/cm. LLDPE is a substantially linear
polymer with significant numbers of short branches. It has Lower thickness compared to LDPE.
Agricultural films, saran wrap, and bubble wrap, to multilayer and composite films.

Disintermediation- The new era of RFL

plastic
In economics, disintermediation is the removal of intermediaries in a supply chain, or "cutting
out the middleman". Instead of going through traditional distribution channels, which had some
type of intermediate (such as a distributor, wholesaler, broker, or agent); companies may now

deal with every customer directly. Disintermediation initiated by consumers is often the result of
high market transparency, in that buyers are aware of supply prices direct from the manufacturer.
Buyers bypass the middlemen (wholesalers and retailers) to buy directly from the manufacturer,
and pay less. Buyers can alternatively elect to purchase from wholesalers. Often, a business-toconsumer electronic commerce (B2C) company functions as the bridge between buyer and
manufacturer.
Disintermediation allowed RFL plastics to emerge in the new era of retail business. Such a
strategy was not only financially beneficial but also in marketing its product. Several advantages
were witnessed due to opening of best buy outlets.

Benefits of RFL Best Buy Outlets:

Opening retail outlet led RFL have a physical presence in that area. This enabled the business to
be easily identified by the target customers. It also helps in building trust with the customers by
having a physical shop.
RFL was also able to draw on the passing crowd. With high level of visibility, regular shoppers
were able to recognize the outlets after a few weeks even if it was new. Think about it, you just
started an outlet in a new area. Regular shoppers frequent that area twice a week. In a month,
they would have seen your shop eight to ten times. By then, they will know your presence there.
Retailing is a cash business. That means all customers pay cash or credit card to purchase the
products or services. Before disintermediation, RFL used to do business on credit terms with the
intermediaries. However, at the moment they do cash business which reduces the risks of bad
debt.
The sales process in retailing is much shorter and easier. Customer comes to the shop, staff
serves them, and customer decides to buy, pay up. The process is pretty straight forward. Hence
instead of going to intermediaries where the process is much complex due to documentation; it is
time and cost beneficial to conduct business in the retail chain.

Drawbacks of RFL best buy Outlets:

Setting up a retail outlet requires high capital cost. RFL had to purchase the inventories, set up
the shelves, renovate the shop etc. The high capital outlay also means the business is in higher
risk.
Retailing belongs to a much more passive kind of business. Instead of going out to get business,
one just basically stays in the shop waiting for customers. RFL cannot do out and out sales that
are more active in sourcing the customers.
RFL best buy outlet is not flexible to some changes that may take place in the market. For
example, the neighborhood can go into decline, parking restrictions might be imposed, your
market can 'move away', etc. Hence, RFL best buy outlet should focus on contingency plan to
avoid such regulation problems and uncertain circumstances.

Retail Marketing by RFL:

Retail marketing follows a relatively primitive, basic function in which a reseller (sometimes
referred to as a retailer) purchases a product from a source, then resells the same product to a
customer at a higher price. In many cases, wholesalers--the source from which the retailer
purchases the goods--require large bulk purchases that are not practical for most end users; this
policy discourages consumers from buying directly from the wholesaler at a lower cost. In some
cases, the retailer may purchase the product from the wholesaler on credit, and then pay off the
financial obligation once the product has been resold. To help facilitate the product sale at a
higher price, the retailer may circulate advertisements in print, radio, television and Internet
media offering at a temporarily discounted price (Islam, 2011).
RFL entrance in retail marketing allowed it to enjoy the advantages of retail marketing.
Introducing itself to retail marketing through best buy outlets has led to several financial and
market oriented advantages. Opening retail outlet led RFL have a physical presence in that area
which enabled the business to be easily identified by the target customers. Moreover, RFL was
able to draw on the passing crowd. As a result with high level of visibility, regular shoppers were
able to recognize the outlets. However, these are not the only benefits derived by RFL going
retail marketing. Major benefits are highlighted in the following section.

Benefits of Retail Marketing by RFL:

Awareness:
The primary benefit of retail marketing for RFL is to bring awareness to the consumer that the
product exists to fill a need or a want that the consumer has. For example, if a retail marketing
campaign is promoting a product that gets rid of nail fungus; someone with nail fungus now
knows that an over-the-counter product is available to help resolve their nail fungus problem. In
return, this marketing helps to boost sales for the nail fungus remover. In essence, potential
customers of RFL products have to know that the product exists for the sales of the product to be
successful. Retail marketing creates a bridge between a RFLs product and its potential customer
target market.
Boosts Profits:
RFL retail marketing also has the advantage of boosting business profits. Whether it's
announcing the launch of a new product or offering a special sale or coupon on an existing
product, this type of retail marketing through best buy outlets can attract larger crowds to the
retail location. The more potential customers who walk through the door provide a potential for
higher sales, and a larger sales volume brings increased profitability to the retail establishment.
Creates a Competitive Environment:
Retail marketing creates a healthy competitive environment between retailers. This benefits
consumers because it helps to keep their costs down when purchasing products. Retail marketing
also helps keep competitors aware of what the other is charging for the same product, so it allows
retailers to adjust prices as necessary to stay competitive in the market.
Creates Jobs
A direct positive effect of retail marketing is that it draws more customers to the retail stores. An
indirect effect of retail marketing, however, is it creates jobs. Day by day RFL best buy outlets
has witnessed increasing business. Hence, it needs more employees to help with the volume of
business. For potential employees that have experience in the retail industry or who are looking
to break into retail work, RFL best buy outlets has open up many new job opportunities.

Critics Viewpoint

Despite its numerous benefits, going retail is not without its considerations. Critics blame
manufacturing companies going retail for encouraging a consumer-minded society in which
valuable items are quickly discarded as newer versions become available. This practice is also
detrimental to the environment, as the constant shipment of new products to distribution centers
and retail stores creates large volumes of carbon gasses. Finally, retail marketing is credited with
driving consumers deep into debt as they strive to constantly purchase newer and better products.
Hence it is considered by critics as environmentally and socially unhealthy strategy to be
initiated.

Looking Ahead to Future:

RFL strives to be recognized as a world class retailer of choice and a brand in Asia Pacific in the
plastic business. Pursuing this vision, RFL management has brought in world class business
processes to ensure their success. Moreover massive commercialization strategy has already been
underway to look for promising prospect for future business. Programs such as reality shows
RFL home make of the Year is a modern way of marketing its products and a step towards the
future. Executive Director of Channel-24, Hasnain Khorshed said, We are highly pleased to get
involved with such a different kind of Reality Show. Half of our population is women; we
congratulate RFL for their initiative to honor women.

Realities show RFL home maker of the year

~ a step towards future:
PRAN RFL, the largest plastics home appliances producing company in Bangladesh, is going to
hunt talent housewives through a reality show RFL home maker of the year. Any housewife
who is age of 18-40 years in Bangladesh can join this reality show. A flat will be awarded as First
Prize and a brand new car and cash Tk 150,000 along with a family tour in Nepal will be given
as second and third prize respectively.
Director of RFL RN Paul announced the launching of the reality show at a convention center in
capital on Wednesday. Executive director of channel-24, Hasnain Khurshed, brand manager of
RFL plastics, Mrinmoy Kanti Das, Sr Manager of event SM Adil Khan and other top executive
were present on the occasion. Winning the crown of RFL home maker of the year participant
needs not only to be necessarily adept in cooking and household work but also she has to be
caring and respective to her family (Hossain, 09).
The RFL Plastics is being used more or less in almost every family in our country. Todays
women are not only keeping themselves busy with their household works, but also looking
forward in workplace in a same way as men. In order to honor those Bangladeshi housewives,
RFL is going to arrange the Reality Show. We would be able to entertain to all kinds of viewers
through this different kind of Reality Show. Viewers can enjoy this Reality Show on Channel 24
screen. (Hossain, 09)

Director of RFL, R.N Paul; Interview with Channel 24

From 15th January 2013 the registration will start in 31 different venues in the country which
will continue till 15th February. Besides the preliminary and audition round will be running in 9
zones. In the selection round there will be arranged some funny games like cutting vegetables,
making quick breakfast, puzzling and quizzes (Hossain, 09). In the next phase there will be some
attractive arrangements. 100 housewives will be selected from preliminary selection and they
will be brought in main venue in Dhaka. Special arrangements for accommodation and food will
be provided for those selected housewives. For participating the program RFL home maker of
the year the contestant can register by sending sms from any mobile or by log in through the
website.

World Tour Program

RFL plastics Ltd would arrange a world tour program in the upcoming year for the best
performing dealer of 2014 in all around the country. The tour includes USA, UK, Singapore
Malaysia, Thailand, Nepal & India.

Reaching new heights:

RFL is driving the company in a new height. The introduction of new strategies such as best buy
outlets has resulted in benefits that far outweigh the cost. Moreover, it also highlights the novel
concept with full orchestration and business strategies formulated by the management through
the implementation of the growth strategy of the business. Disintermediation also allowed RFL
plastics to emerge in the new era of retail business. The strategy was not only financially
beneficial but was also beneficial in marketing its product. The strategy itself has worked better
than the expected level.

References
Hossain, A. (09, January 2013). Reality show RFL home maker of the year begins. Retrieved May
2013, 3, from Bangla News 24: http://www.banglanews24.com/English/detailsnews.php?
nssl=0a8599226ad83944f0defc7496fd5166&nttl=2013011161663
Islam, M. S. (2011). Prospects And Challenges Of Plastic Industries In Bangladesh. Retrieved May 3,
2013, from Bangladesh Journals Online:
http://www.banglajol.info/index.php/JCE/article/view/10176
RFL Group. (2012). rfl plastics. Retrieved May 3, 2013, from www.rflplastics.com:
http://www.rflplastics.com/rfl-exclusive-dealers-outlet/
Singh, S. (2012, July 26). Bangladesh plastic industry to reach $4 billion by 2020. Retrieved May 4,
2013, from Plastics News:
http://www.plasticsnews.com/article/20120726/NEWS/307269986/bangladesh-plastic-industryto-reach-4-billion-by-2020
The Daily Sun. (2012). RFL best buy outlet opens at Mirpur. Retrieved May 3, 2013, from Daily Sun:
http://www.daily-sun.com/details_yes_01-03-2012_RFL-best-buy-outlet-opens-atMirpur_71_1_3_1_23.html