Subject: Strategic Management

Code: MGT 4802

Assignment on Development of
Business Model of Tata Motors

Submitted By
Group E
Yeahyea Khan (B1506024)
Fuhad Ahmed (B1506025)
Sajeed Mahmud Mahee (B1506045)
Izbath Tarik (B1506061)
Abdul Gaffar Sadi (B1506148)

Submitted To
Major General (Retired) Prof. Alauddin M A Wadud, BP

Date of Submission: 09 September, 2018

 Table of Contents

No TOPIC Page
Chapter 1
Evaluation of Current Strategy of Tata
Motors
1.1 External and Internal Environment 02
1.2 Industry Pressure and Standing 03
1.3 Why Tata Should Create Manufacturing Plant 04
for Passenger Vehicle Based on Passenger
Vehicle Market Analysis
1.4 Probable Competitor and Analysis 07
Chapter 2
Proposed Competitive Strategy

2.1 Company, Environment and Market Review 09

2.2 Business Model 14
2.3 Vision 20
2.4 Mission 20
2.5 Objectives 20
2.6 Strategy to Achieve Objectives 21
2.7 Marketing and Pricing Strategy 23

i
1. Evaluation of Current
Strategy of Tata Motors

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 1.1 External and Internal Environment
SWOT analysis represents Tata Motor’s core competencies and identifies opportunities it cannot currently
use to its advantage due to gap in resources.

Strengths:

 One of the most established company in automobile sector

 Distribution network
 Good market penetration
 Highly diversified product portfolio
 Providing fuel efficient vehicles
 Low transportation cost as Bangladesh and India are neighboring countries

Weaknesses:

 Not considered as luxurious brands like Toyota, Nissan etc

 Relatively smaller proportion of market share in passenger vehicle segment
 Safety and durability issues

Opportunities:

 Expanding automobile market and augmenting distribution and service networks in Bangladesh
 Increasing per capita income and purchasing capability of potential customer base
 Price sensitivity of people

Threats:

 Intense competition from big automobile giants

 High import duty on vehicles
 Though it charges low price, other cheap brand like Maruti Suzuki, Mahindra and Mahindra are also
available here

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 1.2 Industry Pressure and Standing
From Porter’s five forces model, Tata Motor’s relative industry pressure and standings can be identified.

Bargaining Power of Supplier:

To manufacture vehicles, Tata needs steel, seat cover, tires etc. There is high competition among suppliers
as cost of switching suppliers is low. So, suppliers have less bargaining power.

Bargaining Power of Buyer:

The customer base of Tata is small in Bangladesh. Therefore, the customer base is powerful. So customers
have high bargaining power.

Threats of New Entrants:

The market of Bangladesh is alluring to investors at home and abroad and has the potential to provide
significant profit. There are many foreign companies who are showing interest in investing in the
automobile industry though there are high scale economies and high switching cost for customers. So
threat of new entrance is high.

Threats of Substitutes:
For automobile industry, there are only main substitutes available: Railways and airlines. However, within
the automobile industry, lots of substitutes are available such as three wheelers. So, threats of substitutes
are high mainly due to low cost.

Competitive Rivalry:
Well supported by the changing economic conditions particularly in the financial sector and in foreign
direct investment, increasing number of global players are entering automobile sector of Bangladesh by
way of joint ventures, collaborations with the domestic firms or wholly owned subsidiary. So high
competitive rivalry is present.

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 1.3 Why Tata Should Create Manufacturing Plant for Passenger
Vehicle Based on Passenger Vehicle Market Analysis
Passenger Vehicle Market Analysis:

Yearwise Number of Registered Passenger Vehicles

Bangladesh is facing a rise in the demand for motorized passenger vehicles. In 2015, a total of 0.32 million
vehicles has been registered in Bangladesh according to the list given in the official website of Bangladesh
Road Transport Authority (BRTA). In 2016, there has been an increase of registered vehicles totaling 0.42
million vehicles. For the last couple of years, it has been increasing as per the data. The latest update
shows that in the first two months of the year 2017, 69,198 registered vehicles have been listed.

The automotive industry in Bangladesh currently manufactures auto rickshaws and a locally designed
three-wheeler motor vehicle, Mishuk, utilizing an engine from Honda. The country has a few large car
plants which assemble the Mitsubishi Pajero Sport, Hino bus, and also the Tata bus,truck and motorcycles.

Bangladesh has been producing auto-rickshaws since the 1980s and the local production of the motorcycle
has begun since early 2000. Bangladesh is also manufacturing locally designed three-wheeler motor
vehicle, Mishuk, utilizing an engine from Honda. Over the last two decades, as the use of vehicles has
increased significantly with the increasing population, improved infrastructure along with the increased
mobility of people from one place to another for jobs and improved living standard, the demand for

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automobiles has been also increasing in Bangladesh. Bangladesh mostly has to depend on import of cars
from abroad as there is no official automobile industry in the country.

The sales of Toyota cars, imported from Japan, are constantly increasing in Bangladesh. Even for
commercial vehicles, this is still the most used brand. In the case of motorbikes, the Indian brand Bajaj is
most popular in Bangladesh. Recently Bangladeshi Brand Walton is also coming in focus (with annual
production of 200,000 units) for motorcycles. Even though there is a lack of local car manufacturers, a
state-run company named Pragoti Industries Limited has been manufacturing vehicles for Japanese
company Mitsubishi at a low rate. The demand for motorbikes has sizably increased, as two-stroke engine
vehicles were banned in the country creating the potential for motorbike manufacturing industry. The
country is currently assembling the Mitsubishi Pajero Sport, Hino bus, and also the Tata bus and
motorcycles.

Current Import Scenario of Automobile Industry

Automobile Industry Heads Current Scenario

Local Demand $ 2.5 Bn

Raw material source(Local: Imported) 5:95

Future Investment possibility $ 2.5-3 Bn

Future employment option 1.5m

Import situation 2.01 Bn

Source: Board of Investment Bangladesh

The market of Bangladesh is alluring to investors at home and abroad and has the potentiality of making
a significant profit. There are foreign companies who are showing interest in investing in the automobile
industry in Bangladesh. Many big companies including Tata Motors have come forward with investment
initiatives. Tata Motors, in partnership with Bangladesh-based Nitol Motors, launched its Prima range of
heavy commercial vehicles (CVs) in Bangladesh.

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In Bangladesh, most of the cars have been imported. Present supplementary duties for imported regular
& hybrid car are given below:

Supplementary Duty
Car CC
Regular Car Hybrid Car
1500 45% 30%
1501-2000 100% 60%
2001-2700 200% 150%

Why Tata Should Create Manufacturing Plant in Bangladesh for

Passenger Vehicle:

 Locally assembled vehicles in Bangladesh enjoy a significantly lower tax rate of 60 per cent, less than
half than the rates applicable to completely built imported units.
 Though Tata is not famous for making luxurious vehicles, they are popular for value for money
products. Besides, their vehicles are On the other hand, most of the Bangladeshis are price sensitive.
If Tata can ensure quality products at low price, they have great potential to earn significant profit.
 12 million middle class people accounts for 7% of total population, which tends to increase by 2%
every year. Those 12 million people are the potential customers.
 Individuals with household income greater than or equal to $5000/year are also the potential
customers.
 Assembled vehicles can be imported to Northeastern region of India and Myanmar with low
transportation cost

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 1.4 Probable Competitor and Analysis
Competitors of Tata Motors Passenger Vehicle:

Toyota Mitsubishi Honda Hyundai

Nissan Mercedes BMW

Strategic Group Map:

The strategic group map is formed by considering sales volume of passenger vehicle and price as two
variables. Different passenger vehicle brands are placed here according to their price and sales volume.
Toyota is the leader in terms of sales volume and moderately priced. Mitsubishi is second in terms of sales
but it is slightly higher priced than Toyota. Tata offers vehicles at the lowest price among all. But it is
third in terms of sales. BMW, Mercedes only make luxurious products, so their customers are limited. On
the other hand Honda, Hyundai, Nissan are struggling in spite of moderate pricing.

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2. Proposed Competitive
Strategy

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 2.1 Company, Environment and Market Review
Company Review:
Tata Motors Group (Tata Motors) is a $45 Billion organization and a part of the $100 Billion Tata group.
It is one of the leading global automobile manufacturing companies. Its diverse portfolio includes an
extensive range of cars, sports utility vehicles, trucks, buses and defence vehicles. They have operations
in the UK, Bangladesh, South Korea, Thailand, South Africa, Indonesia, Austria and Slovakia through a
strong global network of 97 subsidiaries and nine associate companies, four Joint Ventures (JVs) and two
joint operations, including Jaguar Land Rover (JLR) in the UK and Tata Daewoo in South Korea.

a. Product Range of the Company

 Passenger Cars
 Utility Vehicles
 Trucks
 Commercial Passenger Carriers
 Defence Vehicles

b. Milestones

 1945 Tata Engineering and Locomotive Co. Ltd. was established to manufacture locomotives and
other engineering products.
 1986 Production of first light commercial vehicle, Tata 407, indigenously designed, followed by Tata
608.
 1994 Launch of Tata Sumo – the multi utility vehicle. Launch of LPT 709 – a full forward control,
light commercial vehicle. Joint venture agreement signed with M/s Daimler – Benz / Mercedes – Benz
for manufacture of Mercedes Benz passenger cars in India. Joint venture agreement signed with Tata
Holset Ltd., UK for manufacturing turbochargers to be used on Cummins engines.
 2005 Tata Motors rolls out the 500,000th Passenger Car from its Car Plant Facility in Pune The Tata
Xover unveiled at the 75th Geneva Motor Show Branded buses and coaches – Starbus and Globus –
launched Tata Motors acquires 21% stake in Hispano Carrocera SA, Spanish bus manufacturing
Company Tata Ace, India's first mini truck launched Tata Motors wins JRD QV award for business

9|Page
 excellence. The power packed Safari Dicor is launched Introduction of Indigo SX series – luxury
variant of Tata Indigo Tata Motors launches Indica V2 Turbo Diesel. One millionth passenger car
produced and sold Inauguration of new factory at Jamshedpur for Novus Tata TL 4X4, India's first
Sports Utility Truck (SUT) is launched Launch of Tata Novus Launch of Novus range of medium
trucks in Korea, by Tata Daewoo Commercial Vehicle Co. (TDCV)
 2012 Tata Motors enters Bangladeshi car market. It has an assembly plant for small trucks or pickup
in Jessore. Currently, they are the leader in commercial vehicle segment and third in passenger vehicle
segment.

Environment Review:

a. External or Macro-environment

Bangladesh is facing a rise in the demand for motorized vehicles. In 2015, a total of 0.32 million vehicles
has been registered in Bangladesh according to the list given in the official website of Bangladesh Road
Transport Authority (BRTA). In 2016, there has been an increase of registered vehicles totaling 0.42
million vehicles. For the last couple of years, it has been increasing as per the data. The latest update
shows that in the first two months of the year 2017, 69,198 registered vehicles have been listed.

In terms of passenger vehicles, Japanese brands like Toyota, Mitsubishi, Nissan are the leader throughout
entire country. Among these brands, Toyota is the most popular. Bangladesh is a near perfect place for
Toyota as it is known for its varying terrain types and inconsistent landscaping. So people hardly prefer
Indian brands ignoring Toyota.

b. Internal or Micro-environment

Being active and dynamic, TATA motors has competitive advantage for being located in India for the low
cost labor base. The company fully understands not only the Indian market but many emerging markets
as well. The products are manufactured at lower costs and sold to the new markets earning huge profits.
India is known for least expensive automobile parts which gives TATA a direct access. Moreover the
policies and regulations in India are very favorable for TATA for business expansion.

The excellent innovation and research and development at TATA motors have created examples for the
rivals. The company has come up with the least expensive car model NANO which is one of its own kind
and no other car manufacturer has ever created such. This automobile has astonished the industry for its

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low cost and material and technology. The main competitive advantage came from their remarkable
innovation and development. TATA has various research centers throughout the India working on the
improvement of the engine efficiency, design, style and instrumentation of vehicles. Tata Motors started
business in Bangladesh through partnership with Bangladesh-based Nitol Motors.

Market Review:

a. Automobile Brands in Bangladesh

Some Automobile products in Bangladesh & their Brand name are given below:

Products Brand Name

Heavy Bus Hino, Isuzu, Volvo, Scania, Hyundai, Tata, Mercedes Benz, Man etc.
Mini Bus Hino, Mitsubishi, Isuzu, Toyota, Sawraj Mazda, Tata, Eicher etc.
Microbus Nissan, Mitsubishi, Toyota etc.
Heavy Truck Hino, Tata, Bed Ford, Isuzu, Ashok Leyland
Mini Truck Hino, Tata, Mitsubishi, Isuzu, Toyota, Eicher, Sawraj, Mazda etc.
Toyota, Mercedes-Benz, Nissan, Mitsubishi, Ford, Daewoo, Proton
Motor Car
Saga, Proton Wira, Hyundai, BMW, Maruti Suzuki etc.
Four Wheels Toyota, Tata, Mitsubishi, Nissan etc.
Auto Tempo Bajaj, Krishan
Scooter Bajaj, Krishan
Honda, Xingfu, Jialing, Zongshen, Yamaha, Suzuki, Hero, TVS Victor,
Motor-cycle
Bajaj, Vespa etc.
Light & Heavy Nissan, Daewoo, Hyundai, Volvo, Ashok Leyland, Tata, Hino,
Commercial Vehicles Mitsubishi etc.
Farm & Agricultural
Vehicles Hyundai, Daewoo, Dongfang, Dong- chang etc.

b. History of Passenger Vehicle Market in Bangladesh

The first Bangladeshi car has been made naming Sobari (Meaning: 'For All' in Bangla). The Sobari family
car has been made in Obhoynagor, in Jessore district, and costs only 6 lakhs and 45 thousand taka. Apart
from the engine, which was made in India, everything else in the Sobari family car has been made locally.
Then again, a Swedish automobile giant Volvo Group will market new generation trucks in Bangladesh,
in a joint venture with Indian Eicher Motors. With the launch, the Eicher brand enters a new phase of

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growth and consolidation in the commercial vehicle market. The distributorship of Eicher Trucks in
Bangladesh is managed by Runner Motors Limited, an arm of Runner Group.

Moreover, PHP, a business conglomerate based in Chittagong, signed a deal with Malaysian automobile
manufacturer Proton to set up an industry with a capacity of manufacturing 1,200 cars per year. The
company is investing TK 400 crore in the project employing several hundreds of workers with 50
engineers. Furthermore, in 2015 three car manufacturing companies - Zinwa, BMG, & KRW, from South
Korea have collaborated with Ena Group to manufacture battery-driven auto car (automobile) in BSCIC
industrial estate in Rajshahi city. There will be Lithium battery in the car which will run at least 100
kilometers, charging only once. It will cost around US $18,000 or Tk.1, 200,000.

c. Key Success Factors of Passenger Vehicle Market in Bangladesh

 Quality and innovation

 Brand image
 Distribution channel
 Product attributes
 Wide portfolio of product

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d. Current Scenario of Passenger Vehicle Market in Bangladesh

In the Global perspective, in 2016, there has been growth in the sales of cars which has been led by China,
the largest growing economy in the world, who gained 13 percent sales with 3.2 million additional
vehicles. Nevertheless, Bangladesh is also facing a rise in the demand for motorized vehicles.

In Bangladesh, around 80 percent of the passenger vehicles are imported from Japan. In Bangladesh, as
the vehicle moves on the left-hand side of the road, so, imported vehicles should be right handed driven.
According to the regulation of Bangladesh government, import of used cars, jeeps, microbus including
other old vehicles & tractors are allowed. In Bangladesh, imported vehicle should not be more than four
years old. It should be JAAI (Japan Auto Appraisal Institute) certified. In Bangladesh, a used vehicle taxes
are levied on vehicles when imported. Only Diplomats get duty free import of one used vehicle in
Bangladesh. In Bangladesh Ports for shipment of vehicles are in Chittagong & Dhaka port based.

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 2.2 Business Model
Customers:
Our target customers are

 middle class people,

 millennial employed as professionals, and
 those who are looking to switch from 2-wheeler to 4-wheeler.

The age bracket for brand’s offering varies from 21-65 years. Differentiated targeting strategy is used to
target the customers and satisfy their needs and wants.

What do Our Customers Value?

Our target customers prefer a fuel efficient vehicle without paying excessive price.

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Value Chain:

a. Inbound Logistics (IL)

 Regional office for overseeing transportation of goods

 Transparency in monitoring through development of IT
 DTL (Daily Transport Logistics) supplies for critical high value items

b. Operations (O)

 Automated manufacturing processes

 Technical competence in maintenance
 Capacity utilization of the plant

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c. Outbound Logistics (OL)

 Regional sales office

 Efficient security system for prevention of any kind of pilferage

d. Marketing and Sales (M & S)

 Regional sales office Structured approach to understand requirement of customers

 Quick assessment of changing market dynamics
 Large network of dealers

e. Service (S)

 Easy availability of spare parts

 Large network of workshops

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How are We Different from Competitors?
Our distinctive competencies separate us from others:

Assembling Facility in Bangladesh

Most of the passenger vehicles in Bangladesh are imported. Locally assembled vehicles in Bangladesh
enjoy a significantly lower tax rate of 60 per cent, less than half than the rates applicable to completely
built imported units. So assembling facility in this country helps Tata reduce their price of the products
than competitors.

Providing Fuel Efficient Vehicles at Low Price

Traffic jam is a common issue in our country. It takes twice or thrice the expected time to reach destination.
So, fuel efficiency is great consideration for potential car owners.

Besides, now Tata vehicles will cost lower price which was already low than competitors even before
establishing assembling facility. So, price sensitive population will be attracted to Tata products.

Research and Development

One factor to our success is constant advances in automobile technology through research and
development. There is a high emphasis on thorough research that provides the much-needed inspiration
for the birth of new ideas, which in turn breathes new life into products. We possess forums to develop
and test durability, engine performance, emission, safety, design and style, noise, hydraulics, tracks, and
instrumentation.

Acquisitions, Mergers & Expansion

Like other companies, Tata Motors is always growing and expanding and the main way they do this is
through acquisitions and mergers. Since 2004, Tata Motors has merged or acquired all of or at least part
of four different companies. It helps them attain the knowledge, technology, and programs that allow
them to succeed in that particular sector of the automotive industry or in a particular region or culture.

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Breakeven Issue:
Approximated breakeven analysis is done based on three year assembly and sales operation after setting
up passenger vehicle manufacturing plant.

Fixed expenses:

Cost of capacity expansion of assembly plant to Tk 50,00,00,000

assemble passenger vehicle which is currently
used for only commercial vehicles
Salaries Tk 30,00,00,000
Insurance and depreciation Tk 20,00,00,000
Others Tk 10,00,00,000
Total Fixed Expenses Tk 110,00,00,000

Variable Expenses:

Supplies Tk 75,00,00,000
Marketing Tk 10,00,00,000

Maintenance Tk 10,00,00,000
Others Tk 20,00,00,000
Total Variable Expenses Tk 115,00,00,000

Sales Revenue:

Monthly unit sales of Passenger vehicles 65

Average price of vehicle Tk 12,00,000
Monthly sales revenue Tk 7,80,00,000
Yearly sales revenue 93,60,00,000
Sales revenue after three years of operation Tk 280,80,00,000

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 Tk 110,00,00,000

Sales revenue to reach breakeven point= -------------------------------------------------------------------------

1-(Tk 115,00,00,000/ Tk 280,80,00,000)

= Tk 186,29,67,431

Therefore 186,29,67,431/12,00,000=1553 vehicles need to be sold (assuming average price/vehicle is Tk

12,00,000). Thus we will be able to reach the breakeven point within 1553/65= 24 months=2 years
(Assuming 65 vehicles will be sold per month). So after two years of operation, we will be able to earn
profit.

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 2.3 Vision
As a high performance organization, we will

 retain our position as leader in commercial vehicle market and

 be among top two passenger vehicle brands

By delivering exciting value for money products, ensuring high valued services, achieving sustainable
financial performance.

2.4 Mission
We create exceptional automotive value for our customers by harmoniously blending safety, quality, and
efficiency.

2.5 Objectives
Financial Objectives:

 To achieve growth in revenues from passenger vehicle market by 20%

 To decrease overall cost by 30%

Strategic Objectives:

 To get newly developed products to market quicker than rivals

 To minimize lead time between order and delivery

 To get a better market share in passenger vehicle market

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 2.6 Strategy to Achieve Objectives
Corporate Strategy:
Tata Motors will set up an assembly plant for cars and other passenger vehicles in Jessore, Bangladesh.
The plant is Jessore is currently used for small trucks or pickups. The plant is expected to produce about
50,000 passenger vehicles annually that will cater to Bangladesh as well as markets like Myanmar. The
facility will bring down the cost of logistics and production. The production capacity of the plant is to be
increased by 50000 vehicles/year. Investments towards capacity expansion in Bangladesh will be made
by the Nitol-Niloy Group.

The plant, meant to assemble completely knocked down (CKD) vehicles exported from India, will be set
up in partnership with Nitol Motors, part of Bangladesh’s Nitol Niloy Group. Nitol Motors has been
assembling Tata’s commercial vehicles in Bangladesh since 1991 under a joint venture company. Nitol
Motors also happens to be the authorised distributor for Tata vehicles in the country.

Business Strategy:
We will offer vehicles at every price point starting from Taka 5,00,000. Average price of passenger
vehicles will be Taka 12,00,000, which is currently Taka 20,00,000. Because, Locally assembled vehicles
in Bangladesh enjoy a significantly lower tax rate of 60 per cent, less than half than the rates applicable
to completely built imported units. We will monitor the performance of each vehicle model in the market
properly and make proper adjustment while unexpected situation. Apart from meeting the need of
Bangladesh, we will focus on importing vehicles to Northeastern India and Malaysia from Bangladesh.

Functional Strategy:

Manufacturing Strategy

We will assemble all the parts of the vehicle to complete it. All of the parts will be imported from India.

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Human Resources Strategy

Recruitment: We follow both internal and external sources for recruiting and nature of recruitment
process is subjected to employment law.

Selection: We follow both internal and external sources for recruiting and nature of recruitment process
is subjected to employment law. We will follow series of steps which starts from written test to final
selection.

Training and Development: Tata group’s commitment to enhance the knowledge and leadership quotient
of its people will result in establishment of various training and development programs.

Benefits: Tata gives many benefits to the employees such as travel allowance, medical allowance, life
insurance, sick pay benefits etc.

Performance Appraisal: Tata gives many benefits to the employees such as travel allowance, medical
allowance, life insurance, sick pay benefits etc. We follow appraisal system on both annual basis and half
yearly basis.

Operational Strategy:
Plant managers, lower level supervisors will craft operating strategy based on their operating objectives.
This strategy are applicable for day-to-day assembling.

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 2.7 Marketing and Pricing Strategy
Marketing Strategy:

Marketing Mix

a. Product

Tata will provide a very wide range of products in passenger vehicle segment including Indago, Sedan,
Nano, Tiago.

b. Price

The prices of Tata motors are generally affordable acceptable by the general public at large. Tata always
have something for the lower class people with Nano being their trump card. Giving discount every month
and special promotion for certain type of vehicle also one of the strong strategy use by us. Discount can
be made from company’s profit or from dealer’s profit at certain range.

c. Place

Tata Motors has an extensive dealer network covering Bangladeshi market. The channel of distribution,
physical location, and dealership method of distribution and sales is generally adopted. The distribution
of vehicle must be in a very systematic way, from the plant to dealership and to end user.

d. Promotion

TATA Motors carries out its promotional strategy in 2 ways:

1. Above the line (ATL): It includes print ads (newspaper advertisements by local dealers, magazines),
TV ads, Radio ads.

2. Below the line (BTL) Promotions: It includes exchange fair, rural fair, loan fair, societal activities,
corporate display activities

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e. People

Tata Motors owe their success to the highly motivated and talented staff. Our recruitment division picks
the crème-de-la-crème from Bangladesh and India. We put them through rigorous training programmes
to hone their entrepreneurial skills and impart comprehensive product knowledge.

f. Processes

Tata motors follow Balanced Scorecard Collaborative, Inc for achieving excellence in overall company
performance.

g. Physical Evidence

It holds 20 percent market share in the passenger vehicle segment in Bangladesh and is growing at 17
percent year-on-year. This company is currently in the third position in the segment.

Pricing Strategy:
We will use penetration pricing, since our objective is market development by encouraging those people
to use cars, who were previously unable to buy cars because of high prices. When prices are kept lower
than the industry trend, such pricing is called penetration pricing and such pricing is used either for market
development or penetrating in the market by encouraging people to use the product. We will keep the
prices of passenger vehicles at very lower side, starting from around 5,00,000 Taka, and by charging such
price we will try to penetrate in the market, to reach to the consumer which were unable to afford the car
thus creating our kind of customers, by doing this we will develop the market and instead of getting our
chunk from existing car users market, we will increase the number of prospect consumer and make low
income people come into car users club.

Penetration pricing is very helpful in market development, when organizations want to expand the market
then there is always a need of a factor that can make the people use the product. In economies like in
Bangladesh, pricing is effective tool to play with. Pricing can be used as a tool that can make the middle
class people and rising young population use the product.

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