Reebok, for the first time in Bangladesh, wants to introduce shoes that can protect the Base of the Pyramid (BOP) market against hookworm. The pilot project introduces shoes to the rural areas of Bangladesh. Three areas were selected for the pilot project. They were in Khulna, Rajshahi and Sylhet division.
This report is based on the research done by the research team in Sylhet Division. The pilot project introduced the shoes in different sub-districts of Sylhet and Moulovibazar district of Sylhet division.
The research team consisted of team leader Matthias Gebhard from Grameen Creative Lab (GCL) and me, Esha Karim. Over the course of a week, the team traveled to the corners of the project region and done interviews with target masses, shoe retailers, wholesalers and Grameen Bank (GB) Managers.
Moulovibazar and Sylhet are two of the hilly districts of Bangladesh. Because of the suitability of the climate and the soil, these two districts are produces more tea than other regions. The demography of the region also contrasts with that of the rest of Bangladesh. The percentage of Muslim is relatively low here (45-50%). The rest are of different religions, mainly Hindu and Christians.
The BOP population here consists of ethnic minorities who are either tea estate workers, farmers or handicraft workers. The literacy rate is not that high and often people are so used to their own language and dialect of Sylhet division, they can hardly understand Bangla, let alone speaking.
The average annual income of the target population is low, sometimes well below USD360 (BDT 25,000). Majority of the families in the area (who belong to the target mass) have one wage earner. In some cases, the only wage earner is the female member of the family. It is usual that women work beside men in the fields as well as in the tea estates.
The research team decided to make Sreemongol (a.k.a. The Tea Town) its base station. Sreemongol is a small sub-district level town under Moulovibazar district. There are many tea estates and small villages close to the town. The town had ample transportation facilities (i.e. CNG driven Auto-Rickshaws a.k.a. CNG) and was about an hour or less drive from most of the research areas except for Borolekha and Bianibazar.
The team started for Sreemongol on 29 August, 2010 at 2:00pm by Joyontika Express, an intercity train to Sylhet. Below is the brief description of the team’s activities over the weeklong stay in Sreemongol.
Upon reaching Sreemongol at 7:40pm, the team arrived at the guest house named “Tea Town” and rented two rooms. This guest house was where the team stayed for the rest of the week. As it was late, there was nothing much to do. On their way to have supper in a nearby restaurant, the team observed some shoe shops they decided to visit later.
The shoes were not yet in Sreemongol, which delayed team’s planned activities. The team decided to make themselves familiar with the surrounding areas. The day was spent traveling to different areas in the region.
In the evening the team had an informative interview with local shoe shop owner Mr. Babul Bashar. He also acts as an wholesaler for the shoe shops in the area. The interview was fruitful and the team got a lot of necessary information. During the interview Mr. Bashar led the team to nearby shoe shops to show different varieties of shoes and gave the team details of his understandings of the local shoe market and consumers.
People Interviewed:
· Mr. Babul Bashar, Owner, Beauty Shoes
Locations Visited:
· Beauty Shoes, Sreemongol (Traditional retailer)
· Avijatri Shoes, Sreemongol (Traditional retailer)
· Garden Shoes, Sreemongol (Traditional retailer with a target group of slightly higher income, an air-conditioned shop)
· Kamal Shoe Store, Sreemongol (Wholesaler, owned by Mr. Babul Bashar)
Mr. Bashar agreed to give the team a guided tour of the shoe shops in the nearby localities. A CNG was hired on per hour basis and Mr. Bashar led the team to shoe shops in rural areas surrounding Sreemongol namely Aatgharbazar, Gobindpur and Shamsherganj. One interview was done. A lot of information was obtained also through informal chatting with the shoe shop owners. An interesting thing was noticed that the shops in the villages are not shoe shops; rather they are clothing shops which also sell shoes.
The Team visited Mr. Bashar’s house and they had dinner together.
People Interviewed:
· Masud Mia, Owner, Kawser Shoe Store
Locations Visited:
· Kawser Shoe Store, Aatgharbazar, Sreemongol
· Arman & Machuma Gift, Cosmetics & Shoe Store, Gobindpur, Komolgonj
· Unnamed Clothing-come-shoe store, Komolgonj
· Unnamed Clothing-come-shoe store, Shamshergonj, Komolgonj
| Figure 1: Masud Mia, Owner of Kawser Shoe Store | |
Figure 2: Matthias, in front of Arman & Machuma Gifts, Cosmetics &Shoe Store
One of the team members guided the pickup that came to deliver the shoes to the four GB branches namely Borolekha, Muria Bianibazar, Munsiganj Komolganj and Amtoil Moulovibazar. He also secured three pairs of shoe sample from Borolekha GB branch. Upon his return, the team started for Shamsher Nagar.
In Shamsher Nagar, the team interviewed three traditional retailers. Though two of them were productive, the last one was intertwined by unwanted attention to Matthias, as he was foreigner.
People Interviewed:
· Mr. Sharif, Sharif Shoes, Shamsher Nagar
· Mr. Naeem, Naeem Shoes, Shamsher Nagar
· Mr. Mizan, Ripon Shoe Store, Shamsher Nagar
Locations Visited:
· Sharif Shoes, Shamsher Nagar
· Naeem Shoes, Shamsher Nagar
· Ripon Shoe Store, Shamsher Nagar
Figure 3: Matthias with Mr. Sharif
This day was allotted for visit to GB branches. The team started early, at 8am for Borolekha. The ride to Borolekha took almost 3 hours in a CNG. In the Borolekha GB branch, the team found out that the shoes started selling and interviewed branch manager Md. Jahangir Alam. He was a resourceful person and also arranged for the team’s presence in a center meeting. The team also met Mr. Helal from ORG-Quest and found out about the market survey. The team also took part in a center meeting where the shoes were introduced for the first time. The meeting was in a village named Sonatola, deep in heart of Hakaluki Haor (Lake). However, women present there liked the shoes, but deemed it to be suitable for school shoes.
After attending the center meeting the team started for the nearby GB branch, Muria Bianibazar. It was another 45 minutes of CNG ride. Upon reaching there, the team visited the GB branch, as well as a tailoring shop that is selling the shoes and interviewed the branch manager Md. Anisur Rahman.
After that, the team returned to Sreemongol. Another GB branch, Munsiganj Komolganj was supposed to be visited, but the team was short of time as the travelling by CNG took more time than anticipated.
People Interviewed:
· Md. Jahangir Alam, Branch Manager, GB Borolekha
· Md. Anisur Rahman, branch Manager, GB Muria Bianibazar
· Members of Grameen Bank, Sonatola, Borolekha
Locations Visited:
· GB Branch, Borolekha
· GB Branch, Muria Bianibazar
· Venue of Center Meeting, Sonatola, Hakaluki Haor, Borolekha
The team visited Amtoil Moulovibazar GB branch. The team interviewed the branch manager Md. Azadur Rahman and found out about the sale of the shoes. The team also interviewed a member from the beggar program of GB (called a struggling member). Though a meeting with the local doctor was planned, it did not take place as the doctor was not present.
In the afternoon, team Leader Matthias left by the 5pm train for Dhaka.
People Interviewed:
· Md. Azadurr Rahman, Branch Manager, GB Amtoil Moulovibazar
· Korola Begum, GB struggling member, Amtoil, Moulovibazar
Locations Visited:
· GB Branch, Amtoil Moulovibazar
The team was once again in Shamsher Nagar. This time the idea was to get feedback about the shoes from the traditional retailers. The team interviewed two salesmen and a shop owner. However, the shoes are so much in demand that a retailer who was not on the primary list had to be delivered the shoes. The team also visited all of the shoe shops in the vicinity to find out about the shoe sell as well as about consumer reaction to the shoes.
Upon returning to Sreemongol, the team also visited the local shoe shops which were selling the shoes.
After that, the team started for Dhaka by bus at 4:40pm.
People Interviewed:
· Dulal, Salesman, Delwar Shoe Store
· Suman, Salesman, Doly Shoe Store
· Abdul Mukit Mukul, Owner, Rony Shoes
Locations Visited:
· Naeem Shoes, Shamser Nagar
· Rana Shoes, Shamser Nagar
· Delwar Shoe Store, Shamser Nagar
· Sharif Shoes, Shamser Nagar
· Doly Shoe Store, Shamser Nagar
· Rony Shoes, Shamser Nagar
· Ripon Shoes, Shamser Nagar
· Zia Shoes, Shamser Nagar
· Beauty Shoes, Sreemongol
· Avijatri Shoes, Sreemongol
Garden Shoes, Sreemongol
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| Figure 4: Reebok Shoes in Display | |
| Figure 5: Reebok Shoe festoon in front of Ripon Shoes | |
The product design is one of the major factors that influence a wannabe buyer to buy a certain type of shoe. The research found out some facts about the design of the shoes.
· Customers often buy a pair of shoes solely based on design, given that the price is not too high.
· The sizes in the locality varies among 5-8. Larger sizes are hard to sell.
· Customers like unique designs, a design worn by many may not be there choice.
· The popularity phase for any specific shoe design never extends beyond 2 months.
· Customers prefer flip-flop style shoes for summer, covered shoes are preferred for winters.
· A shoe with a strap or buckles is supposed to be for the children. Adults prefer open type shoes.
· Women prefer a shoe with design distinctly for them. So do the men buying shoes for women depending on them.
· The color of the shoe is often important. Customers prefer brown, black and chocolate for male shoes and bright colors such as white, purple, blue etc. for female shoes.
· Customers love freedom of choices. Even if they are certain of quality of a pair of shoes, they want variations in design to compare with.
· The whole idea of quality is not that clear to the target mass. For most of them quality is just a word that is used by the retailer to describe a shoe.
· No shoes other than gumboots can be worn when working in the field. However, it is not practical to wear them as it would take much more energy to lift up your leg from the mud if you are wearing shoes. So farmers prefer working empty-footed.
The price of a pair of shoes is the factor that decides a customer’s decision to buy a pair of shoes. Moreover, as the target mass earns sometimes less than BDT 3000 monthly, how much they spend is always important for them.
· The target mass typically buys two pairs of shoes per year per person. Budget for shoes per annum seldom crosses 400 taka.
· The retailers do not practice fixed price. The customers also have a habit of bargaining no matter how affordable things are.
· The people living below poverty line buy shoes but prefer not wear them without any occasion. Because buying a shoe for even only 100 taka is a big thing for them and they do not want to ruin such “pricy possession” by wearing them always.
· A pair of typical “affordable” shoes (priced BDT 80-120) must last at least 8-12 months to be considered durable.
· People when buying shoes, do not consider durability. According to the retailers, most people will not be ready to pay extra for shoes that are advertised durable. However, through word of mouth marketing, they may agree to pay extra for the shoes.
The brands of the shoes are not important. 80% of the target population buy the shoes only if they like the design and feel that the price is reasonable.
· Brand awareness for international brands is almost none existent among the BOP population in the locality.
· The brands are popular among the young generation. They often buy cheap knock-offs of world famous brands like Adidas, Reebok, Nike, Puma etc.
· The limited brand awareness can be attributed to the fact that a number of people from the region work in Middle-East, UK, Indonesia, Malaysia etc. countries.
· “Bata” is the only brand that the BOP people recognize truly. However, with their lowest shoes priced at BDT 50 (flip-flops), Bata is still costly and people rather buy me-too shoes with a little variation in name like “Bala” or “Balta”.
· Even the poor people won’t by a pair of shoes if they are branded “made for the poor”. Rather a different word, (Like Apex picked “Sandals for struggling people”) should be used.
· Traditional retailers prefer wholesalers in their own locality rather than distant places like Dhaka. Only wholesalers are ready to collect the shoes from the factory.
· Traditional retailers buy shoes from Dhaka wholesale market only on special occasions. Otherwise they fully depend on the local wholesalers for their supplies.
· Some retailers who have small shops compared to their competitors (i.e. can’t attract many customers) take their shoes in rickshaw or rickshaw-van to tea estates. As sometimes these tea estates are miles away from nearby towns, this way the tea workers and other employees of the tea estate have easy access to shoes.
· Retailers have no problem competing with the GB branches for the shoes. Rather they think that it would help the shoes to be self-advertised and people will come to them if they don’t find them in GB branches or do not have a GB branch nearby.
· GB branches can reach the target market much easily than traditional retailers. Moreover, traditional retailers cannot make sure that the shoes end up in the feet of the people they were meant for. Retailers cannot deny any customer from buying the shoes.
· GB branches are now not equipped with enough man power and facilities to handle selling operations. They need storage space for the shoes, a man to sell them and preferably a cut in the profit made by the shoes. However, they do not want the money to add to their salary. Rather they want it in the Bank balance sheet, where at the end of the day it would be used to develop BOP population.
· Retailers would prefer their usual margin (15-25%) for selling the shoes. Some of them are ready to decrease their margin. However, they sell the shoes for no fixed margin and whatever they can make a customer pay decides their profit margin. So, they demand high margin for fixed price shoes.
· Profit margin for GB branches should be 15-20% as the branch managers propose.
· The possibility of the shoes ending up being sold for higher prices in the local market (and of course not to the intended customer) is insignificant because for this the branch managers have to be dishonest. But as they are not so and the head office of GB supervises them frequently.
· In case of selling shoes from the GB branches, there has to be different distribution network so that the GB branches can get the shoes easily. It is not actually a feasible idea for the GB branches to collect their shoes from the factory or even from a local wholesaler.
The existing process of selling does not really have any real marketing communication before the customer decides to buy a certain model or pair of shoes. Typical process of selling a pair of shoes is described in figure 6 in the next page. However, the only marketing communication takes place in the blue box and diamond of the figure. Other than this, there is no form of marketing communication.
· The communication mediums like leaflets or paper advertisements are not effective for the target group. Because the literacy rate is really low. However, they can read the numbers sometimes, so printing the price is a good idea. Then again, many of them may be unwilling to find with extra effort where the shoes can be found.
· However, the Banners & festoons are effective. They show a bigger image of the product which affects the target group more and the consumers also need no extra effort to know about the shoes as the shops selling the shoes is nearby,
· One important side effect of banners & festoons is that the literate and well to do people can read the banner and festoons and are bound to give rather unwanted attention. Retailers cannot help selling to them because otherwise they miss a customer.
· Public addressing can be used for advertisement. However, the address should made specifically for a locality, preferably in the localities own dialect.
· As per the shoe retailers, there is no better marketing tool than the shoes themselves. Frequent change of designs and available colors can make the shoes popular quicker than any other marketing tool.
· People are not aware of hookworms. Building up awareness against hookworms can be effective for a shoe that is advertised to give protection against hookworms. However, this awareness building should take place independent of shoe marketing. Otherwise the people may not believe the campaign and think that it is just another way to sell shoes. Specially, the retailers campaigning about hookworm may backfire entirely, as thought by some of the retailers.
· GB branches can and are willing to do marketing for the shoes in the center meeting. However, they can also build awareness against hookworm. They do not have the problem of the retailers as the people are used to listen to such advices from them.
· Introduction of recycling can also be a big marketing tool. This is described later in the Recycling & Environmental Impact Information section.
Figure 6: The typical buying process for a pair of shoes
The health condition of the area is poor. However, compared to rest of the country it is little better because of the tea estates. The tea estate workers have access to sanitation, safe drinking water and primary health care. However, the farmers and other people belonging to this class do not have such access.
· The percentage of sanitary latrine in the locality is negligible. However, though the people uses latrines, but these latrine are unsanitary and cannot give them any protection against hookworm and other diseases.
· There are community clinics in some villages. But most of these clinics are ineffective because of shortage of willing doctors.
· Clinics operated by NGOs are not in plenty. But they do offer a slightly better service.
· Health worker program by government and the NGOs are failing. The people virtually have no awareness of the dangers related to unsanitary latrines and bare-footed walking.
· Hookworm is not known at all, the people are not aware of the presence of the worm in their children, even when their showing clear symptoms of that.
The EVA shoes can be recycled easily. According to Mr. Bashar, EVA material can be recycled for at least 3 times.
· Giving recycling initiatives like taking back old pair of shoes by giving a concession is an idea that can work.
· The retailers are willing to work as a hub for collecting old shoes. They need little more motivation other than compensation for the price cut on the new pair of shoes.
· Recycling shoes seems to be a cost effective solution as importing EVA material or making them are costlier.
From the research, the following steps seem to be appropriate course of action.
· The sizes of the shoes should be available based on the demography of the region. Sending random sizes to areas will not be appropriate.
· Varieties of designs and colors should be introduced to give the people the freedom of choice.
· An entirely new women’s line has to be developed. The line has to offer different colors and designs.
· A complete different design section can be established which will work on making new design for shoes which will be attractive as well as hygienic.
· A campaign to build up hookworm awareness should be started independently. The campaign has to be made a continuous procedure, not a fad that will die out.
· GB branches should be supplied with enough man power and logistics support to sell the shoes. GB branches can sell other health-conscious products too, acting as a channel for Grammeen Distribution Limited.
· Using “Reebok” brand for the shoes would be a waste of the brand. Rather naming the shoes “Grameen” can make them popular.
· Traditional retailers are not effective to reach the target population. An alternate method can be retailers who travel to remote places with their shoes (i.e. tea estates, areas in the Hakaluki Haor)
· Marketing communication mediums should be revamped. Center meetings of GB branches can be useful as a marketing tool.
· A recycling program has to be developed. Giving enough motivation to the buyers, this program can be the differentiating point that the shoes are seeking.