A REPORT ON E-MARKETING PRACTICES

[Bangladesh Perspective

Md. Al-Noman

Topic: E-Marketing Situation in Bangladesh

Submitted to: Md Moktar Ali Associate Professor Department of Marketing University of Dhaka

Submitted by: Md Al-Noman A! "#th atch $oll-"#%! SectionDepartment of Marketing University of Dhaka

Date of Submission: "& November! '("&

Letter of Transmittal "& December! '("& Md) Moktar Ali Associate Professor Department of Marketing University of Dhaka Sub*ect: Submission of the term paper on the e-marketing practices in angladesh Dear Sir! +t is a great honor and pleasure for us to present term paper on this report ,as given to us as a partial re-uirement of the ./-commerce0 course in the %th semester by our honorable course teacher) 1his report has given us an opportunity to apply our theoretical kno,ledge! sharpen our ideas! and communication skills! make us informed about *ob market and bridge them ,ith the real ,orld of practical e2perience! ,hich ,ill be a good head start for our future professional career) 3our profound lecture and guideline helped us to cope up ,ith the difficulties that ,e face in preparing this report) 4astly ,e ,ould be thankful once again if you please give your *udicious advice on our effort) Sincerely yours! Md) A4-Noman "#th atch $oll-"#%! SectionDepartment of Marketing University of Dhaka

Acknowledgement At first ,e ,ould like to pay our gratitude to the Almighty! ,ho helped us every time and ,as ,ith us and gave us moral support and strength every moment) 1here is an /nglish proverb .Two head are better than one. So! no one can obtain a noble ob*ective alone) 1his term paper is an accumulation of many people5s endeavor) 6or this! ,e are indebted to a number of people ,ho helped me to prepare this and for their kind advice! suggestions! directions! and cooperation and proper guidelines) 7e ,ould like to pay our gratitude to all of the people ,ho helped us a lot for the completion of this report before! during! and after the ,orking period) 7e are especially grateful to our honorable course teacher Md) Moktar Ali for giving us valuable suggestions and support in preparing this report) 7ithout her advice and support! it ,as totally impossible on our part to complete this) 7e are also grateful to our friends and classmates ,ho helped us in completing this) 4ast but not least ,e e2press our gratitude to the all the individuals ,ho have helped us directly or indirectly)

E!ecuti"e Summar#: 1he +nternet has opened up a ne, hori8on for trade and commerce! namely electronic commerce 9e-commerce:) /-commerce entails the use of the +nternet in the marketing! identification! payment and delivery of goods and services) 1his paper highlights the status! statutes! potential and constraints to e-commerce development in angladesh) oth the statutory la,s as ,ell as the challenges in implementing them are discussed) Ma*or legal! regulatory and institutional constraints to e-commerce are identified) 1he paper also lists specific policy changes aimed at bringing improvements to the legal and regulatory environment affecting e-commerce) Dimensions of E-Commerce 1he three dimensions of e-commerce are usiness-to-;onsumers 9 ';:! usiness-tousiness 9 ' : and usiness-to-<overnment 9 '<:) '; e-commerce is unlikely to be of much use in the near future in angladesh because of lo, per capita income! a ,eak

infrastructural and legal environment! lack of trust bet,een business and consumers) '; for cross border trade is also limited by the factors suggested for the domestic front) +n addition! non-availability of international credit cards! foreign currency remittance restrictions! delays and informal payments at customs clearance even for small value and -uantity items ,ill discourage ';) 1he ' application already e2ists in the e2port sector of angladesh! especially in the $eady Made <arments 9$M<: industry) $M< has the lion5s share of the e2port earnings in angladesh) 1he $M< sector has begun to use the +nternet! and its dependence on ecommerce is likely to gro, in the coming years) 1he +nternet ,ould enable them to seek information about potential buyers as ,ell as ra, material suppliers) Similarly the practice of posting a ,ebsite by individual producers has begun) =o,ever! if angladeshi producers are unable to accommodate electronic transfer of payment and other facets of e-commerce! the business opportunity ,ill move on to countries that have developed such systems) '< e-commerce is possible in angladesh! but on a limited scale at this stage) 1he government is a ma*or buyer of goods and services from the private sector) 1ypically! the

government procures goods and services by inviting tenders) 1he availability of the $6P and other relevant documents on-line provides an alternate choice) 1ransactions involving information collection! obtaining various governmental forms! registering activities can also be conducted on-line) 1his ,ill reduce time costs! corruption and the necessity of going through lengthy bureaucratic procedures as ,ell as increasing transparency) Government Legislation An overvie, of the government trade and industrial policies as ,ell as various acts and statutes affecting e-commerce has been presented in this paper) 6or e-commerce to develop re-uires an enabling environment that ,ould ensure easy and -uick movement of inputs as ,ell as goods and services ,ithin the country and cross border trade) 1,o ma*or government documents reflect the mood of trade and investment policy directions to be pursued in the medium term) 1hese are the 6ive-3ear Plans and the +ndustrial Policy) 1he 6oreign Private +nvestment 9Promotion and Protection: Act of ">%( guarantees legal protection to foreign investors against nationali8ation and also indemnifies them against losses due to civil unrest) +n the area of foreign trade! the legal frame,ork is primarily governed by three legislative Acts: 1he +mports and /2ports 9;ontrol: Act! ">?(@ 1he ;ustoms Act! ">#>@ and 1he 6oreign /2change 9$egulation: Act! ">AB) $evisions and updates of these Acts are made periodically) 1he /2port Policy ">>B-'((' aims at promoting e2ports in the regional and international markets) 1he recently passed +ntellectual Property $ights 9+P$: bill of angladesh concentrates on soft,are copyright protection) =o,ever! e-commerce related copyright protection is not covered in the ne, +P$) According to the /vidence Act! "%%"! a physical signature is necessary to make any contract legal) 1his makes electronic contracts void under angladeshi la,) ;ontract 4a, in angladesh is governed by the ;ontract Act "%B') ;ross border contracts are legal! but a physical signature is necessary to validate the contract) 4egislation that legali8es digital certificates! electronic contracts! also needs to be enacted to promote e-commerce) 1,o Acts play an important role in dispute settlement -- the Arbitration Act ">A( and the Money 4oan ;ourt Act ">>() 1he Arbitration Act governs the settlement of any disputes arising from business transactions) 1he Money 4oan ;ourt 9Artha $in Adalat: is an independent *udicial body established under the Money 4oan ;ourt Act ">>( and the Money

4oan ;ourt $egulation ">>( to recover public money loaned to individuals through public sector financial institutions) =o,ever! the Money 4oan ;ourts are overburdened ,ith the enormous number of cases they have to deal ,ith) Although no la,s that directly provide for ;onsumer Protection e2ist in angladesh! certain la,s! if implemented appropriately! can play a significant role in ;onsumer Protection) 1,o Articles in the ;onstitution in angladesh -- Article "? and Article "% C state broad principles regarding consumer protection) Article "% specifically includes raising the level of nutrition and improvement of public health among the states primary duties) Article "? can be interpreted as making the provision of basic necessities a fundamental responsibility of the state) Infrastructure: Status and Issues +nternet services are directly dependent on the telecommunication infrastructure of the country) 1he angladeshi telecommunication sector is characteri8ed by poor level of oard 9 11 : continues to be a monopoly in providing basic penetration! high cost to access and a lengthy ,aiting period) Although the angladesh 1elegraph and 1elephone telephone connections! the private sector5s involvement in cellular phones and as +nternet Service Providers 9+SP: have been allo,ed) Despite the need for easy and affordable access to +nternet services! 11 5s pricing and regulatory strategy on +SPs are restrictive)

Table of $ontents

Topic Introduction Overview of E-marketing Benefits of E-Marketing E- ommerce Bang"ades# $uture of E-marketing in Bang"ades# "assification of &ecommendation $uture &ecommended (overnance onstraint onc"usion &eference Present !ituation in

Page 07 09 10 10

1% 1% 1' 1) 1) 1*

%ntroduction 7ithout practical e2perience! no one can ac-uire complete kno,ledge) Dalue of theoretical kno,ledge is insignificant! if practical e2perience is not added) +t is more reali8ed in the study of usiness ,here practical e2perience plays an important role) achelor of usiness Administration 9 As the students of A: program is designed ,ith an e2cellent combination of practical and A to fulfill the re-uirement of this Degree! ,e ,ere assigned to make a

theoretical aspects) Students are re-uired to prepare different Assignment in various courses) term paper on ./-commerce0) 1o enrich our kno,ledge on /;! ,e have tried our best to use this opportunity) After observing systematically! ,e have prepared this term paper on the basis of our findings and observation relating to the topic) &b'ecti"es of the Stud#: (eneral &b'ecti"e: 1he general ob*ective of preparing this report is evaluation of different e-marketing practices that are applied in different organi8ation and to fulfill the re-uirement of our course organi8ational behavior through gaining the practical e2perience) Specific &b'ecti"e: 1he specific ob*ective of preparing this report is C 1o fulfill academic re-uirement! 1o find out the real picture of e-marketing practices in angladesh

 1o get an overvie, of present and future situation of e-marketing in angladesh 1o dra, a comparable picture of the theoretical approach and the practical applications) 1o gather practical kno,ledge about e-marketing 1o enrich our theoretical! and practical ability

Methodolog#: 1o make the Assignment more meaningful and presentable! t,o sources of data and information have been used ,idely) Source of )ata

PRIMARY DATA

SECONDARY DATA

6igure: Sources of data oth primary and secondary data sources ,ere used to generate the report) *rimar#: <roup study of the selected cases! our perceptions and observation! and discussing ,ith the course teacher) Secondar#: : 1he secondary information has been e2tracted from various te2tbooks on /marketing) Ether notable information that ,as used for this report ,as the information gathered from internet) 4imitation:

+n spite of having the ,holehearted effort! there ,ere some limitations! ,hich acted as a barrier to conduct the program and for doing an empirical research ,ork! such as: Time and budget $onstraint:

1he study is based on the analysis of /-marketing) ut this allocated time is not enough for a complete and fruitful study) Lack of E!perience:

Due to lack of e2perience! there is a chance of having some mistake in the report though best effort has been applied to avoid any kind of mistake) Source Limitation:

1here ,ere not sufficient source from ,here ,e can collect the data) &"er"iew of E-Marketing /-Marketing or electronic marketing refers to the application of marketing principles and techni-ues via electronic media and more specifically the +nternet) 1he terms e-marketing! +nternet marketing and online marketing! are fre-uently interchanged! and can often be considered synonymous) /-marketing is the process of marketing a brand using the +nternet) +t includes both direct response marketing and indirect marketing elements and uses a range of technologies to help connect businesses to their customers)

Different international organi8ations i)e) Ama8on! /2pedia! /F1rade and ;DNo, transformed their business 9selling of books! travel! investments and music: into online) 1hey sa, that the system re-uired a lo,est price rather than the rick-and-Mortar 9offline: retailersG companies) 1oday! the internet is mainstream in industriali8ed nations) =igh adoption rates are occurring in the '( nations sporting >(H of all internet users and most of these populations canIt do ,ithout the 7eb or e-mail) As ,ell! most organi8ations kno, that they must include information technology in their marketing strategies to meet the needs of their markets efficiently and competitively) y June '((%! about %?H of users online are engaging in e-commerce) +n +reland! >"H shoppers are undertaking transactions online! %#H in 1urkey are shopping online! and +ndia and the UA/ take up the *oin third place ,here about %AH of online shoppers are buying

things online) 1hat is! %AH of roughly &)'H of

+ndiaIs population 97orld

ank! '(((:)

/-Marketing made the strength of the ;ompanies transactions and efficient rather than traditional marketing process) 1he follo,ing ,ays it made the po,er: Po,er Shifts from Sellers to uyers: uyers can ac-uisite information from any of

the ,ebpages so they are not reluctant to a particular seller) Market 6ragmentation: 1o create products and communication to small target groups through cell phone! e-mail! facebook! cable television etc Death of Distance: +nternet makes no longer geographic location and bypass traditional intermediaries) 1ime ;ompression: Enline stores is open 'AGB)

Benefits of e-marketing: E-Marketing provides a researc# resource for +u,ers- se""ers and "earners. 1. It e"evates and e/tends strong e/isting +rands. %. It is cost-effective for customer se"f-service and ongoing +usiness. '. It a""ows unprecedented one-to-one communications and d,namic persona"i0ation during an on"ine session. ). It opens t#e market to new groups of customers. *. It customi0es powerfu" e/tranets to t#e compan, and individua"s.
!" It offers un"imited rea" estate on t#e 1e+ so prospects can dig deeper and marketers

can present items t#at wou"dn2t +e cost effective in print. 7. It a""ows for profita+"e strategic +usiness a""iances and affi"iations. 3. It offers uni4ue wa,s to present information and increase sa"es and profits.

E-commerce *resent Situation in Bangladesh:

No,adays the online possibly took for a huge marketplace possibly able of dealing the population of the ,hole ,orld) 1his is the -uestion ,hy come /-;ommerce is so magnetic for a lot of traditional businesses) /-commerce is modifying the techni-ue people do business) y large corporations to small industries! businesses are going a,ay internet! opening their products and service offers to ne, groups of people ,orld) At that place! there are several paths to get your products and services internet! from simple shopping ,eb site to high-end database driven! data-capture and online credit card confirmation solutions)

+n

angladesh! there is a great deal of interest in e-business@ ho,ever! due to various

economic! infrastructural and legal reasons it has not spread) Most important companies! associations! chambers and government offices have set up ,ebsites) 1hese sites mainly provide information about the organi8ation! and its products and services) 1here are very fe, sites ,here financial transactions can be completed) Main reasons for lo, e-commerce transactions are absence of legal frame,ork for completing an electronic business or financial payment system! lo, +nternet usage due to lack of ade-uate telecom facilities! and overall lack of confidence in the security and reliability of e-commerce transactions)

angladeshi internet shopping as the internet becomes more usable to angladesh@ itIs clear-cut that online sales ,ill spring up) 1his is ahead to more accessibility of online buys) ;ompetitor ,ill become fast-gro,ing as online shopping raises and so angladeshi retailers shouldnIt be left alone) 1he online retail industry is getting more significant as the internet carries on rising in signification in angladesh) angladesh internet site Directory for Enline Shopping especial ,holesale K retail choice of e-

commerce internet site and first-class stores! Dhaka shops for fashion clothing! shoes K *e,ellery) ;hittagong online retail stores for desktops! laptops! tablets K netbooks! Lulna e-commerce sites for toys! kids K baby! and $a*shahi music! movies K games ,holesalers K Sylhet ,ebsites for sports K outdoors! e-commerce K e-business from arisal) At present! as a started out ,ith e-commerce they attempt to establish an effective platform in angladesh) Additionally! they are ,ishing customer support to establish a ,ell platform to e-commerce in angladesh) ;urrently many people of angladeshi livelihood abroad in several countries

including USA! ;anada in North America! UL! Australia! ;hina! Middle /ast and other parts in the ,orld) Several times they ,ould like to shop online from abroad to purchase angladeshi products) 1his may be for gifts shopping! for shipping groceries to angladesh or to take the products in their living countries) ecause the purpose they all of the time try to get a reliable shopping 9Lhan! '(((:) Enly ;ell- a8aar offers an e2ample of a successful mobile based electronic marketplace in angladesh) +t is a mobile application that brings buyers and sellers together in a mobile environment ,here they can publish and retrieve information on goods or services) +t is a real-time collection of classified advertisements that is accessible through a mobile phone connected to <rameenphone5s mobile net,ork! or through a computer via the ;ell- a8aar ,ebsite 9,,,)cellba8aar)com:) Advertisements can be posted to the system and bro,sed on a mobile phone using SMS! 7AP! or +D$ 9voice! for buyers only:! and through a computer via the ;ella8aar ,ebsite) At present! &?!&># posts for multiple products in "A" categories are available for vie,ing! ranging from livestock to education services to agro-produce to electronics) Users pay standard SMS! 7AP and voice rates to access the service9A8ad! ">>>:) ut no,adays present government is trying their most in effect to raise up,ards the +;1 and +;1 based dealings in infrastructures) +uture of E-Marketing %n Bangladesh /lectronic ;ommerce or /lectronic usiness made lots of progresses ,ith more than a hundred million people ,orld,ide having access to the +nternet ;onnection) ut +nteractive selling capabilities can only be anticipated and ,e still are at the beginning of e2plosive angladesh by legal model and arranging angladeshi online shop and for future

gro,th 9Morath '(((:) 6uture of /-;ommerce in angladesh can be suggested from the fe, classification: '; /-;ommerce ' /-;ommerce '< /-;ommerce

$lassification of ,ecommendation B-$ E-$ommerce '; ecommerce ,ould not be used much in the near future in trust bet,een business and consumers) angladesh effectively ecause of lo, per capita income! lack of infrastructure and proper legal environment and '; for cross border trade is also limited moreover factors ,ill discourage '; such as difficulties in accessing international credit cards! restrictions on foreign currency remittance! informal payment and delays at customs clearance even for small value and -uantity items)

B-B E-$ommerce ' /-;ommerce is highly emerging in angladesh because of the already e2istence of $eady-made <arments 9$M<: +ndustry) Some individual producers have already posted a ,ebsite ,hich ,ould enable them to seek information about potential buyers and ra, material suppliers) =o,ever! if take the business opportunity) B-( E-$ommerce angladeshi producers are unable to embrace transfer of payment and other features of ecommerce! countries that have developed such systems ,ill

ecause of government buys goods and services from the private sector! it could invites tenders by offering M$e-uest for Proposal5 9$6P: and other relevant documents on-line) $eduction of time costs! corruption and the lengthy bureaucratic procedures as ,ell as increasing transparency ,ould occurred by on-line 1ransactions involving information collection! obtaining various governmental forms! registering activities) So the government needs to ,ork out a realistic e-commerce la, ensure the reliable internet connection for successful e-commerce business! it should also collaborate ,ith the commercial sector! ,hich has fle2ibility and potential for accepting ne, technologies) +uture ,ecommended Sectors 6uture sectors should be recommended to use /-;ommerce as the most profitable and cost effective e2change system to ensure competitive advantage) i: ii: iii: iv: v: Public anks: ecommerce is already e2ists in banking sector in our country but most of them are private so public banks should embrace e commerce) Soft,are +ndustry: <overnment could invest on soft,are and hard,are industry) =otels: +n our country only a limited number of hotels have ,ebsites) 1hen it comes) $etail usiness and shop: $etail business and shop should use ecommerce) /ducation: public and private universities and colleges should open ,ebsite)

Suggested +uture Supporti"e +rameworks Banking . +inance: 4ack of access to trade financing! has constrained angladesh5s e2port e2pansion and high interest rate ceilings on e2port loans) Dependency on 4; to conduct international transactions and fe, credit card users e2ist and $estriction on issuance of international credit cards also prevails) 6oreign counterparts get ,rong signals and they think that angladeshi businessmen are unable to make speedy payments through international credit cards because of 4ack of internationally accepted credit card facilities) ,elated ,ules and regulation: 4ack of cyber la, and encryption la, that prevents acceptance of digital signature and +1 9/lectronic Signature: Acts should immediately be implemented) Still ,ide spread pirated soft,are is used in our country) 1he ma2imum business la,s and regulations of angladesh are outdated coming from subcontinent rules) %nfrastructure: 1oo fe, telephone connections) 11 has restrictive pricing and regulatory strategy on +SPs and its monopoly over long distance and international voice traffic remains protected until

'((( and '("( respectively 9N1P>%:) 1his has been a consistent obstacle for the gro,th of ecommerce) +nternet services are directly dependent on the telecommunication infrastructure of a country ,hich is characteri8ed by poor level of penetration! high access cost and a lengthy ,aiting period in our country) Doice over +nternet ,hich is a proven important catalyst in the promotion of e-commerce! is prohibited in angladesh@ there is lack of hard,are and soft,are investment and 4ack of technically kno,ledgeable personnel ,ith minimum ,eb user) Trade . $ommerce %ssues ;onducting business at the ;hittagong port is comparatively more e2pensive because of fre-uent strikes 9locally kno,n as hartaals: and arbitrary ,ork stoppages by the trade unions) Definitions of deductible business e2penses are strict and not clear) 1a2 system is not client friendly! appeal procedures are lengthy! high +nterest rate on e2port loans and high corporate ta2es e2ist resulting in ,idespread ta2 evasion) ;ustoms clearance and procedures continue to be burdened ,ith delays and informal payments) (o"ernance $onstraints Poor governance has an indirect effect on e-commerce development) angladesh has a knotty problem of poor governance ,hich has been manifested in the form of continued active involvement of politicians and public officials! in adopting unfair business practices collusion ,ith the private sector so institutions become ,eak and legal and regulatory reforms are difficult to update and implement) =igh cost of doing business characteri8ed by bottlenecks! bureaucratic red tape and corruption make the efficiency gains from e-commerce becomes mute) Small domestic market! poor infrastructural facilities! ,eak governance and poor la, and order conditions are the main reasons for poor 96D+: in angladesh) $onclusion Despite being a poor country! selected segments of the angladeshi business community has embraced technology ,ith reasonable success) 1he 6acsimile in the ">%(5s and mobile telephones in the ">>(5s populari8ed modern technology in the mass market) Personal computers and the +nternet are also emerging as day-to-day business tools) 1hese positive indicators are favouring the prospects of e-commerce in angladesh) 1he focus of this paper ,as on the current state of the regulatory environment in the financial and technological sectors of angladesh) Necessary reforms in order to introduce e-commerce have also been suggested) 4ack of a,areness among the policymakers has been identified as the ma*or

deterrent to introducing e-commerce) ;onventional understanding of payment mechanisms raises false alarms against the flight of capital if e-commerce is implemented

,eferences: A8ad Dr) A) L)! Dr) M) M) =) Joarder and Md) +-bal! ">>#! !ummar, of &eports on 5rugua, &ound 6greements and &e"ated Issues- Ministry of ;ommerce! <overnment of the People5s $epublic of angladesh) akht! Naid! ">>>) Po"ic, Induced onstraints to !ME 7eve"opment in Bang"ades#- A report prepared for the USA+D funded JE S Pro*ect) angladesh ank! ">>>) 6nnua" &eport 1997-93- Dhaka) angladesh ank! ">>&) ircu"ar 8o. )3- 6oreign /2change ;ontrol Division! angladesh ank! A August! ">>&! Dhaka) angladesh ank! ">>') ircu"ar 8o. *0- 6oreign /2change ;ontrol Division! angladesh ank! ">>' Dhaka) angladesh ank! $oreign E/c#ange (uide"ines- #apter %0- angladesh ank! Dhaka Lhan! Abu Saeed! ">>>) (ovt 9(ui""otines: Te"ecom &egu"ator- 1he 6inancial /2press) Lhan! Abu Saeed! Undated) 6"t- tr" and 7e"ete; &aspit IPO- ontrovers, !ends 5nwe"come !igna"s to t#e apita" Market- 1he 6inancial /2press! +nternet /dition! ?"A) Lhan! Abu Saeed! Undated) Te"ecom &egu"ators Independence; In !earc# of !anit,1he 6inancial /2press! +nternet /dition! ?(?) $ahman Mustafi8ur! ">>&! E/port Performance- Possi+i"ities and onstraints; Production and Market Issues- University of Dhaka for 7 Study on angladesh) Syed! Abdus Sattar! ">>A) !trateg, $ormu"ation < !upp", $actors for !oftware Industr, in Bang"ades#- UNDPG UN+DE! Dhaka) Ullah! Amin and Siddi-ur $ahman Mia! ">>%) T#e Bankruptc, 6ct and &egu"ation 1997- and t#e Mone, =oan ourt 6ct and &egu"ations 1990- angladesh 4a, ook ;ompany! Dhaka) 7orld 1rade Ergani8ation! '((() Trade Po"ic, &eview Bang"ades#- April) Bang"ades#. 1he 7orld ank! '((() >Bang"ades# Trade =i+era"i0ation; Its Pace and Impact?- Poverty $eduction and /conomic Management Division! South Asia $egion! 6orthcoming publication! 7ashington D) ;)

1he 7orld ank <roup! ">>>) Pu+"ic Po"ic, for t#e Private !ector- Note No) "%>) 1he 7orld ank! ">>>) Bang"ades#; @e, #a""enges for t#e 8e/t Mi""ennium7ashington D;)