RAK PAINTS

December 11, 2011

Executive Summary:
RAK group of Industries,Bangladesh,is a leading private sector of business of the country.It started it s business in the year of 1994 in the name of Gentech International. In 1995,it started importing from India,Italy,Thailand and other countries.At that time it only imported stone based item. Now its imported item sets in a good number like Rice, Wheat, Red Lentils, Dry Red chili, Onion, Maize, Peas, Poultry feed, Sugar, Marble, Granite, Mobile phones etc. It emerged as a group of company named RAK Group in 2002. In recent year,RAK has added a new sector in their business.Seeing the demand of growing construction sites,it started it s own manufacturing of different paints starting from RAK Intone Interior Plastic Emulsion to RAK Paints premium synthetic enamel.Most of them are water based paint most suitable for interior as well as paints suitable for protecting external walls from unfavorable weather and poisonous enviorment. Its vision is to become a world class paint manufacturer and lead the paint industry by establishing itself as a producer with the finest manufacturing practices, through outstanding product quality with diversification in different areas, innovative and eco-friendly approaches in all the functions that are necessary to keep its customers satisfied. The paints market size is estimated at Tk 1,000 crore and domestic production capacity of Tk 920 crore. There is a gap of Tk 80 crore in the demand suuply sector providing RAK an opportunity to grab the market.In the first year the aim is to achieve 10% of market share. With this statistic,it not only intends to establish the largest paint industry in the country with the state-of-the-art machineries but also to provide quality branded products.

Current Market Situation:

RAK paints have found that Bangladeshs paint industry is growing very rapidly for the past several years due to an increase in demand by the construction sector. Its market size based on demand is estimated at Tk 1,000 crore and domestic production capacity Tk 920 crore. So demand supply gap is Tk 80 crore, which is a good prospect for paint industry in Bangladesh. There are six paint manufacturers operating in the market with 90% market share which includes; Berger, Asian, Aqua, Roxy, Pailac and Elite. In current paint market Berger has the highest market share of 48% while other competitors are far behind it with Asian paints 12%, Roxy 10%, Pailac and Aqua each 7% and Elite paints 5% of market share. To gain market share

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in this rapidly growing industry, RAK must target specific segments with qualities that deliver benefits valued by each customer group.

Market Description:
RAK paints product mix: RAK Intone Interior Plastic Illusion, RAK Clean Wash, RAK Water Sealer, RAK Wall Putty, RAK Harmony Acrylic Distemper, RAK Surfacem Durable Cement Paint, RAK Elegant Silk Emulsion, RAK Weather King, RAK Ocean Liner Paints, Premium Synthetic Enamel, Glaze enamel and RAK Industrial paint. Key products that hold the major market shares are: plastic emulsion, distemper, outer coat (weather proof) and synthetic enamel. RAK paints customers include residences, building developers, new factory builders, people living in the rural areas and also ship and ocean liners. Plastic emulsion and distemper are close substitute of each other. The targeted segment for plastic emulsion is high-end residence all over the country and targeted segment for distempers are semi-urban and rural markets as it is an economy class product. Bangladesh has a rainy season from June to August and there are some places in Bangladesh where rainfall is high for example Sylhet, Srimangal and Sunamganj these markets can be targeted with outer coat (RAK Weather King),however this product is targeted for all segments as people tend to give weather proof paint to color outside of their house. RAK offers Industrial paints whose targeted customers are new factory builders and existing factory owners which will let them have a suitable paint for their factories as other paints (emulsion and distempers) might not be suitable for painting factories. Water transport owners are another targeted segment of RAK paints. River transport is one of the key transport systems for coastal areas of Bangladesh and there are a large number of people who owns steamers, river liners for commercial purpose etc and they might be a substantial market for RAK Ocean Liner.

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Product Review
RAK paints offering twelve kinds of paints.The detail product description is given below

RAK INTONE
RAK Intone Interior Plastic Emulsion is a fine quality long lasting water based paint best suitable for the interior. It is based on a special durable acrylic co-polymer emulsion, high opacity micronized pigments and additives to give better look, protection and stain resistance properties. It provides a smooth matt finish to the walls. It is also washable and easy to maintain the new look. Features : 1. Matt Finish 2.Washable 3.Water Based 4.Odorless 5.Excellent Stain Resistance.

Available in : 0.91 ltr, 3.64 ltr and 18.2 ltr packs. Thinner : Water.

RAK CLEAN WASH:

Cleaning is not fun. Children like playing and make things messy wherever they play. Interior walls are the mostly liked playing area for children. So to make it easy and comfortable for the people living in it, RAK paints brings washable interior plastic emulsion. Best quality raw materials are used to make the Clean Wash Emulsion long lasting and it can be washed any time. It is smooth and made by using state of the art technology. Thus it will dazzle your walls and enhance

RAK PAINTS beautification.

December 11, 2011

Features: 1.Washable 2.Premium quality 3.Long lasting fungus and alkali resistance 4. Excellent adhesion and water resistance 5.Water Based 6. Odorless 7.Excellent Stain Resistance. Available in: 0.91 ltr, 3.64 ltr and for special demand 18.2 ltr packs may also be available.

RAK WATER SEALER:

RAK water sealer is a special co - polymer emulsion & is made of expandable raw materials. It is a primer which protects the walls, ceiling, asbestos & so on from water insertion & alkali. It acts as a wonderful intermediary coat & creates strong bondage with putty & finish coats for the walls. It also protects walls from fungus, moss & others. Special Features: 1. Washable 2. Long lasting 3. Fungus and alkali resistance 4. Excellent adhesion and water resistance 5. Water Based 6. Odorless 7. Excellent Stain Resistance.

Available in: 0.91 ltr, 3.64 ltr and for special demand 18.2 ltr packs may also be available. Thinner: Water

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December 11, 2011

RAK WALL PUTTY:

RAK Wall Putty is a special water base ready to use putty for filling & smoothening out cracks & dents on a plastered wall or similar interior surfaces. It can be used very easily. Its acrylic bindings ensure that it retains a strong grip on the wall surface, hereby increasing the life of the paint film.

Special Features: 1. Washable 2. Long lasting fungus and alkali resistance 3. Excellent adhesion and water resistance 4. Water Based 5. Odorless. Available in: 5 kg and 25kg packs are available. Thinner: Water

RAK HARMONY ACRYLIC:

RAK Harmony Acrylic Distemper is water based paint for walls, ceilings and building boards. It is specially formulated by acrylic co-polymer emulsion based distemper for elegant, smooth, durable, matt finish for interiors. A value for money paint, it provides maximum coverage in its category. It is very easy to apply, saving your time and money.

Features : 1.Matt Finish 2.Water Based 3.Odorless 4.High coverage. Available in : 0.91 ltr, 3.64 ltr and 18.2 ltr packs. Thinner : Water.

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RAK SURFACCM:
It with rich, moody colors and soft shades that age beautifully to a matt patina, RAK Surfacem Durable Cement Paint is the ultimate combination of aesthetic appeal and longevity. It is an economical exterior wall finish which is resistant to fungus and algae and protects buildings from varying weather conditions. This paint exceptionally resilient formula was developed with protection and performance in mind, making Surfacem a wonderful way to enhance cement render, bagging, brickwork or any dimensionally stable surface. Ideal for outdoor walls it can also be used indoors whether the tone is contemporary or traditional. It is water based paint and easy to apply.

Special Features: 1.Economical 2.Better performance for outdoor protection and decoration. 3.Has matt finish, an inexpensive way to cover large areas such as cellars and garages. 4. Maintains good look for many years despite exposure to worse environments.

RAK ELEGANT SILK EMULSION:

Your home is a heaven where your heart resides. Whether you are a king or a pauper, the peace lies at home. Peace is peace is not an illusion; it is something everybody desires strives for. To make your home a peaceful abode RAK Paints provides you Elegant Silk Emulsion, the paint that touches everyones heart with world-class beauty that comes with state of the art technology.

Beautiful, long lasting and stylish, it is the dream result of a wall finish with a soft

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sheen and a silky smooth finish. Its acrylic base ensures that your chosen colors retain their freshness longer. Uniquely formulated to yield more coverage and ensure a luxurious finish. It is protected by color-guard formulation with an invisible protective layer that locks color to your walls.It is ideal for your home because of its hardwearing wipe-clean formula, allowing you to wipe away spills and dirt easily, thus keeping the just painted' look for longer.

RAK WEATHER KING:

RAK Paints Weather King Pure Acrylic Exterior Emulsion is a premium; technologically advanced water based excellent exterior wall finish. It is specially formulated to give exceptional durability in adverse climatic conditions of high rainfall, humidity and heat. It is based on tough, flexible and high quality latex emulsion

which repels water and protects the beauty of the house from the blazing sun. This latex emulsion helps prevent peeling off, dirt setting and cracking for years. It has special type of fungicides which provides protection against growth of algae, fungi and mould on exterior surface. It provides the building with a long lasting and fresh appearance. All this makes it ALL IN ONE paint for exterior walls. Features : 1.Color Guard Technology that protects shade fading. 2.Unique dirtresistant formulation. 3.Powerful anti-fungal compounds protects from black spots.

RAK OCEAN LINER PAINTS:

Ocean Liner Paints is a die-hard coating specially formulated from a combination of Synthetic Resin, Petroleum Resin & other selected materials. It protects & helps fighting the metal surface from saline, unbearable ocean & riverine water.

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Special Features: 1. High coverage (compared to conventional marine paint). 2. Water resistance. 3. Washable 4. Good weathering properties 5. Good application characteristics. Available in: 0.91 ltr and 3.64 ltr Thinner: RAK Paints Thinner

RAK PREMIUM SYNTHETIC ENAMEL:

RAK Paints premium synthetic enamel is high gloss quality enamel. It gives a durable finish for metal, cement, wood and similar surfaces due to its high resistance to water and wear and tear. It is suitable for both interior and exterior areas like doors, windows, metallic frames, railings etc. The color gives you smooth and superb finish. It is technically advanced topside enamel that delivers a mirrorlike finish. Loaded with UV stabilizers, it will last longer than any conventional topside finishes. It is fast drying which when brushed or sprayed gives a shiny smooth finish.

Special Features : 1.High coverage (compared to conventional enamel paint). 2.High gloss (mirror like gloss). 3.Water resistance. 4.Washable 5.Odorless 6.Good weathering properties 7.Good application characteristics. Available in: 0.455ltr, 0.91 ltr, 3.64 ltr and 18.2 ltr packs

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RAK GLAZE ENAMEL:

RAK Paints Glaze enamel is economy synthetic enamel formulated for interior and exterior application to give a glossy durable surface. It is easy to apply, durable and has good flow. A combination of economy and quality makes this product popular coating enamel. It is ideally suitable for wood and steel furniture, toys and various household items.

Features : 1.High coverage (compare to conventional enamel paint). 2.Water resistance. 3.Washable 4.Glossy. Available in : 56 milliliter, 200 milliliter, 0.455 liter, 0.91 liter and 3.64 liter packs Thinner : RAK Paints Thinner.

RAK INDUSTRIES PAINT:

To protect different industries from unfavorable weather and poisonous environment (power station, garments, chemical industries, iron and steel industries, pharmaceuticals, electronics equipment manufacturer etc.) it is required to use RAK Industrial Paint and Protective Coating. It is formulated from best standard raw materials to keep the industries active. Long durability depends on the choosing of right paint for right place and the right preparation for the place.

Special Features: 1. High coverage (compared to conventional Industrial paint) 2. Water resistance. 3. Washable 4. Good weathering properties 5. Good application

RAK PAINTS characteristics. Available in: 0.91 ltr and 3.64 ltr

December 11, 2011

Competitive Review:
The paint market of Bangladesh is very competitive as each existing producers held a significant percentage of market share. Key competitors include: 1) Berger: It is the market leader of paint industry holding the highest market share. It is the most renowned paint brand in the country and it offers variety of products to customers. They provide a unique service called Berger Home Decor Service which helps customers who want to paint their house with several colors and this service seems to be popular among customers. Berger mainly targets customers who can spend more after painting. 2) Asian Paints: Currently it is in the second position of paint industry. Targeted segment of Asian Paints include interior wall finishes, the exterior segment, enamel and wood finished segment through its Apcolite and Decora brands. Asian paints targets customers living in cities and having good income. 3) Roxy Paint: It is cheap comparing to Berger and Asian and mainly targets customer in rural areas and people with moderate income. People think about buying Roxy when painting gates, outside walls or where it is unfeasible to use expensive paints. 4) Pailac, Aqua and Elite Paints: These three producers hold less market share and they are popular in rural areas and among people who are not willing to spend much after painting.

Channels and Logistics Review:

RAK Paints products will be networked through authorized dealers to retailers everywhere in the country. There will be a RAK Paints Sales and Distribution Centre in every metropolitan city to distribute products to dealers; they will also deal with customer complaints regarding dealers and retailers. Dealers: Dealership will be given to intermediaries by analyzing their years in business, other lines carried, growth and profit record, cooperativeness, and reputation. Dealers will be selling to retailers.

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Retailers: Retailers will be buying from dealers but the company may sign contract with large scale retailers who sell building materials (for example Fix it) by offering them special benefits and discounts or take promotion campaign through them. Paints will be also sold to the small retailers as well, so people can find our product everywhere.

Online Service: Buying and selling through internet is becoming popular now days. Online service reduces buyers time and expense of traveling. There are many buyers who doesnt have proper knowledge on paints and cannot fully rely on advice of typical retailers, so they want to contact with the company directly and our online service provide this opportunity to the customers ,they can get the detail of the product and chose product for them. After choosing the product customer will submit their initial order and we will send our representative to finalize the deal, so that buyers will get the opportunity to share and discuss their view and complete the deal. Therefore through online service customers can complete a time consuming purchase by staying in their home. This service is beneficial to busy people.

Hotline Help: There will be a hotline number where customers will ask for help regarding paints. Through this service customers can take specialists advice, know about our products and can also get the address and information about their nearest retailer. Though we provide this service via online but there are many people who are not very used to with internet.

Strengths, Weaknesses, Opportunities, and Threat Analysis:

Strengths:
1) Varity of Products: We offer 12 products which makes us less dependent on each product. If we find one product unprofitable then we can cover the loss from the most profitable product. We offer industrial paint and ocean liner paint which are unique products and are not offered by competitors. This will help us to gain monopoly position in the targeted segment.

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2) Quality products: Our paints will be made from best raw materials. We will use latest machineries in our production process and we will employ Chemical Engineers who are experienced, in order to verify our quality. 3) Pricing: We will set our products price in a reasonable range and will offer dealers cash discount for prompt payment and offer trade discount for bulk buying.

Weaknesses:
1) Lack of brand awareness: RAK has no established brand or image, whereas Berger and others have strong brand recognition. We will address this issue by promotion. 2) Price setting decision: As we are using best raw materials to produce our product we are incurring more costs which will make it difficult for us to implement more for less promotion strategy and force us to sell at high price comparing to competitors. We will address this issue by advertisement showing why customers should buy our product at high price.

Opportunities:
1) Increasing demand from construction sector: Today in Bangladesh more buildings are constructed, housing estate projects are carrying on which increases demand for paints. 2) Un-served segments: There is a demand supply gap of Tk 80 crore which means a large portion of market is un-served by the current competitors which might be an opportunity for RAK to grab the market.

Threats:
1) Increased competition: There are many competitors in the paint industry occupying significant market shares and having a positive brand image in peoples mind which will make it difficult for RAK to operate in the industry. 2) Downward pressure on pricing: Increased competition may mean to sell at lower price than competitors which is likely to make it difficult to cover costs. 3) Bad debt problem: There are some retailers who sell building materials along with paints but recently these types of retailers have stopped selling paints due to bad debt problem. Our studies have found that painting work is done at the very last of all the works in a newly constructed building. At the beginning of construction the owner is likely to have more money and they buy a lot of building materials paying cash instantly which helps

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them to have a good relationship with the retailer. But at the very end when time for painting comes then many owners are left with less finance and therefore they ask retailers to give them paints on credit, for example 50% credit. But later on these customers hardly pay the money or some of them do not pay even and turn outs to be a bad debt. 4) Government rules and regulations: In Bangladesh, Government does not allow payment via the internet within the country. This will be a big barrier for us to implement online payment service if government does not remove the law.

Objectives and Issues:

We have set aggressive but achievable objectives for the first and second years of market entry.

First-Year Objectives
In the first year we are aiming to achieve at least 10% market share. Though painting industry is very competitive market but we are investing Tk 50 crore in the factory, so we are quite confident about achieving the goal.

Second-Year Objectives
In the second year we are aiming to achieve another 10% market share, altogether 15% market share. We are expecting to reach break-even point in the middle year.

Issues
As we are aiming to achieve 15% market share in the paint industry where there are already giant competitors. So to fulfill our objectives we have to create a strong brand image of RAK among customers, we should give importance in designing the logo of our product because a logo in short can describe the product. We will have to invest heavily in marketing to create a memorable and distinctive brand image projection innovation, quality, and value. We must response quickly to adjust our marketing efforts as necessary.

Marketing Strategy
RAKs marketing strategy is based on Changing attitude towards painting. Our primary consumer target is residents of every class living all over the country who will use normal quality paints to very high quality paints offered by RAK. Our secondary consumer target is factory owners and ship, river liner owners.

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Our primary business target is capturing real estate companies and land development firms. This is because they are highly involved in building construction where paint is an essential item. Our secondary business target is ship and river liner manufacturers. Ship building is a new industry in Bangladesh, so we can offer this industry with RAK Ocean Liner.

Positioning
Changing attitude towards painting means that our aim is to change peoples attitude towards painting. This is because painting is a time consuming work, it gives out a lot of dusts and wastes peoples time speaking to painters and many people do not want to do this. In order to increase RAKs paint market more painting works has to be done by people. Therefore our target is to make painting an interesting work by showing in advertisement that a popular actor or actress is painting his or her house with their friends and relatives in a special day and at the same time they are having a party. And in the advertisements we will also show how to reduce possible disturbances while painting so that people do not get irritated.

Product Strategy
RAK paints all features described in earlier product review. We will introduce a lost lasting and attractive paint. Building the RAK brand is an integral part of our product strategy. The brand and logo will be displayed on the product and its packaging, and reinforced by its prominence in the introductory marketing plan

Pricing Strategy
We have a wide range of products and each have its own price. Our pricing strategy will be based on market penetration pricing. We will set a low initial price in order to penetrate the market quickly and deeply-to attract a large number of buyers quickly and win a large market share. The high sales volume will result in falling costs, and is most likely to allows us to cut prices even further. As we are offering twelve types of paints which means each of their costs vary, their customer group also vary so we must have to decide on the price steps to set between the different paints in our line which means we have to follow product line pricing as well.

Distribution Strategy
Our channel strategy is to use selective distribution. We will have RAK Paint dealers in every metropolitan city who will be distributing our product to retailers. We will select dealer by analyzing following factors; years in business, other lines carried, growth and profit record, cooperativeness and reputation. In order to sell our product to individuals and households we

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will distribute our product to dealers who will later sell to retailers, so for individuals and households we are following indirect marketing channel. Our another group of customers is building construction firms. A construction firm does not construct only one building at a time but they tend to work on several buildings, therefore a construction firm is going to buy paints at the end of their work in bulk amount which will allow us to sell a large quantity of paints at a time so we will sign contacts with several construction firms by offering them several benefits if they buy our paints from us. Here we will not use any intermediaries, so we are following direct marketing channel.

Marketing Communication Strategy

Our targeted audiences are typical paint consumers, new house builders and construction firms. Our target audience is unaware of RAK paint brand; they have little or no knowledge about our brand so at first we have to build awareness and knowledge our targeted audience. After targeting audiences and making them aware of RAK brand our next task is to design a message that should get Attention, hold Interest, and arouse Desire and obtain Action. In message content we will use emotional appeals. For example, in Bangladesh parents consider a lot of factors when choosing bride or bridegroom for their child. And majority parents take many days to come to their final decision. In our advertisement we will show that a boys parents are looking for a bride and they went to a girls house which is painted by RAK paints and the house is looking very beautiful and that boys parents became very happy and started to think seriously about this girl for their son. So we can design message content like ar ghura ghuri noi aeibar rong dia manush chinun. This message is likely to make an emotional effect in consumers mind. We will not draw final conclusion about our message content rather we will leave it to audiences. We will carry our message in print media and in electronic media. In print media we will use novelty and contrast; eye catching pictures and headlines; distinctive formats; message size and position; and color, shape, and movement in order to grab attention. Also in electronic media these elements are important plus body language and facial expression of presenter will be also taken into account.

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Since RAK is a paint manufacturing business we will select non personal communication channels that is print media (newspaper, magazines, direct-mail), broadcast media (radio, television), display media (bill boards, signs, posters), and online media (company web sites). We will choose very popular actor or actress to deliver our message to audience. In our advertisement we can show party with paint that is an actor or actress is painting his or her house with their friends and having fun. We also have plans to open some paint houses around the city, there people will go and do party by painting walls and whatever they want After giving our message about RAK paints to our customers we will analyze the effect it made on target audience like whether they remember the message, how many times they saw it, what points they recall etc.

Marketing Research
We will conduct marketing research in every four months to know about the condition of RAK paints. How people like it? And is the price a reasonable one? We can conduct survey among paint workers; how much they feel comfortable by using RAK paints, what are the drawbacks RAK paints have comparing to other paints in the market? By conducting market research we can make necessary changes in our business.

Marketing Organization
RAKs Vice president of Marketing , holds overall responsibility for all of the companies marketing activities. The following figure shows the structure of the marketing organization.

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Vice President Of Marketing

Director of product Marketing

Director of Marketing Communications

Corporate Product Managers

-Product Requremrnts -Positioning/Pricing -Product Lifecycle -Sales Support -Management

Research and Competitive analysis

Public Relations Advertising Analyst Relations

Creative Services
Brand Identify
A

Collateral Web services

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Programs
Shows/Events

Action planning

Lead Generation Channels/Partners

All our planning will go for action on January 2012.Follwings are the summaries of the first six months action program to achieve our stated objectives January: We will start campaign for our product, will participate in different trade fairs. Go to field and let the dealers ,retailers about our coming product.We will provide samples to the dealers and different real estate companies. February: In February we will enter the market publically. We will start an integrated Radio/Tv/Internet/Newspaper campaign targeting our customers. The purpose of the campaign will be let the people know about our presence. They will come to know about RAK paints. We will do heavy advertisements, send the massage of our product to people March: In march we will focus will be reaching to consumers directly. We will arrange many paint competition, Will sponsor many public events .We will start a different type of campaign, Its tag line will be party with paint .We will give a people to people that its fun to paint your own house .painting can be the reason of doing party.We will open some paint house in big cities, where people will come and do party by doing paints April: We will focus on Real estate sector ,we will arrange paint fair where all the painting companies will come and there we will show the quality features of product to the buyers.We will also arrange some seminars regarding real estate sector . As we are working on real estate related events ,so our paint will get attracted by the buyers. Further time we will go to them and offer them some interactive packages for using our paint . May: In may we will focus on individual and industry customers .We will go to this segment and make them aware about painting. We will train paint workers for few hours and give them

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instruction about effective painting. We will go to random under-construction buildings to for those purpose. June: June will be the revising month of our all taken actions programs so far .In jusne well do all these activity together we have done in last five motnths.We will see the progress and if there is any lacking in action programs, they well recover it in June

Budgets
As we are new in the market and the market is already filled with strong competitors ,so we need a heavy budget. Because we have to spend a huge amount for the promotion of our product ,we have office ,factory and so many other expenses. So we need a big amount of budget. The projected primary budget will be around 100 crore.we will spend 60-80 crore in building factories ,buying machineries and rest of the money will spend in promotional activities, building offices and many other expenses .Our object is capturing 5% of the current market ,so we are hoping that we will able to make a minimum profit of 70-100 million in first year.

Controls
We are planning tight measures to closely monitor quality and customer service satisfaction. We will maintain a quality standard in delivering our products to the consumers .We will keep our words, will fulfill our promises given to customers, We will keep our management section always ready to deal with every problems and possibilities.All the plans we have taken ,we will make sure that these plans are implementing correctly .Given the market volatility ,we are developing contingency plans to address fast moving environmental changes such as new technology and competition

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