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A Research Proposal:

Internal Marketing: A source of competitive strategy for service sector business in Nepal

Chapter One

INTRODUCTION

1.1  Background

Business sector, especially the service sector is in the realm of rapid changes. The situation becomes more complicated if the service culture is still emerging not very mature. Business may face the situation to withdraw a unit or a whole business by virtue of those reasons. Especially in the Nepalese context, small market with huge potentiality but organization’s concentration in major cities and large number of companies in the same industry with poor healthiness has created the immense competition in each and every industry. At this situation the better organization will deliver than their competitor the best they will realize in their strength and opportunities over their competitors. It means there is a need to deliver quality goods and services. The solution for this is internal marketing. Because, with the resulting higher employee commitment internal marketing leads to market orientation. And that is the ultimate and best way to deliver the customers’ needs by improving the organizations performance as the market driven organization.

Internal marketing is used as the solution since 1970s’ by those organizations which implore in the market. This concept was first introduced by Berry et.al as the solution to provide quality services and products. Several researchers agree on the statement that internal marketing helps in maintaining workforce which is highly satisfied and motivated and this work force will help in accomplishing the performance target set by organization.

Internal marketing is a critical activity that helps a manager to identify the factors that influence the employees’ commitment and loyalty. Managers can use those factors to develop the job products that help them to attract, develop, motivate and retain employee. Internal marketing is considered as a prominent activity by service sectors managers’ to develop organizational competitiveness in ever changing market place.

1.2  Statement of the Problem

This study explicates the impact of different activities and job products of internal marketing on the implementation of organization’s activities to meet the performance target set by organization. The main thesis problem of can be outlined as follows:

 What effect does internal marketing have on organizational commitment?

1.3  Objective of the Study

The objectives of this thesis can be outlined as follows:

Specific Objective:

To explore, study and analyze critically the effect of internal marketing on organizational commitment.

General Objective:

To analyze the effect of various aspects of internal marketing on organizational commitment of employees.

To identify, if any possible ways to increase organizational commitment.

1.4  Research Hypothesis

This section represents the relationship between internal marketing practices and its impact on organizational commitment. Additionally the effect of internal marketing on market orientation and the age, job type and gender as a moderator will be tested.

H1: Internal marketing is positively related to organizational commitment.

H2: Job type, age and gender moderate the internal marketing and organizational commitment relationship.

Chapter Two

Literature Review and Theoretical Framework

2.1  Literature Review

It is argued that internal marketing programs and managerial influence strategies must be aligned, if internal marketing is to become an effective part of the practice of management. Similarly, internal marketing is also viewed as a critical issue faced by marketing professionals, HR managers, and executives in general, (Pitt, Bruwer, Nel & Berthon, 1999). Researchers such as, Ahmed & Rafiq (2003) define IM practice encompasses several activities that have been grouped in four major themes that appear to constitute IM: training and education, the image of the internal customer, quality standards and rewards systems. Furthermore, the basic purpose for applying internal marketing concept is to get motivated employees and to make them conscious at each and every level to serve customer in a better way (Gronross, 1990; Gronross, 1981). Researchers also view Internal marketing as a management approach in which frontline employees work as support staff area included; this approach enables and motivate employees of the firm to do their own evaluation and for adoption of customer oriented services (Cowell, 1984).

Organization commitment is defined as the commitment and/or loyalty of employees with the firm as if they feel obliged to stay with the bank and to work for it in the future as well (Cichy, Cha, & Kim 2009). Researchers have categorized this commitment into three dimensions: (i) affective commitment – emotional attachment to the firm, (ii) Normative commitment – socialization experience with other employees, and (iii) Continuance commitment – self-sacrificing when quitting a job (Meyer & Allen, 1991).

Hogg (1996) states that internal marketing could be an useful resolution for creating commitment in employee and success increase in failed and traditional internal relational plan. Schlessenger & Heskett (1991) emphasize on importance of high – motivation employee and refer it as success cycle. This cycle is result of awareness increase of employee about their role in increase of customer satisfaction.

Researchers have revealed that internal marketing help an organization to reduce undesirable cost and improve the performance of employee inside organization by improving organizational commitment. When employee feel that they are protected and nurtured by an organization it creates a sense of emotional bound with an organization. That ultimately helps to achieve the effectiveness in employees’ performance.

2.2  Theoretical Framework

The theoretical framework shows the hypothesis developed and based on the relevant literature presented in above section. The below figure present theoretical framework model of the predictor of organizational commitment and the moderating role of the employees’ age, job title and gender on internal marketing and organizational commitment relationship.

Chapter Three

Methodology

Methodology refers the steps that will be adopted in this study. The more systematic method gives the more actual results for the study. The method for this study includes research plan and design, description of sample, data collection procedure and data analysis plan.

3.1.Research Plan and Design

A research design is the planned specification of methods and procedures for acquiring the information needed to structure to solve the problems. All activities that must be undertaken one after another are presented below in table with duration for each activity.

The research design used in this study is descriptive. It includes survey and fact finding enquiries to fulfill different objectives. It will use the available data from primary and secondary sources. Structured and close ended questionnaire will be used to gather the information through primary sources. Both managerial and functional level employees’ of service providing organization will be used as the sample for this study.

3.2.Description of the Sample

Especially internal marketing is considered as a prominent activity in service related organization. Because of increasing competition and rapid changes that take place in service related business. Thus organizations that deliver services will be in primary focus while choosing sample. Employees (both managerial and functional level) are the single sampling segment of this study. The sample size of one hundred and forty respondent will be used by considering the budget and time constraints. The entire respondents to meet the determined sample size will be selected randomly in ten days of data collection.

3.3.Time Framework

This research will be completed in a forty days. The more period of study will be devoted for data analysis and report generation. As the sample size is not too large, the data collection and coding will be completed in total of thirteen days

3.4.Data Analysis Plan

The necessary data for this study will be collected from different service providing organization. Thus at first data about internal marketing and organizational commitment will be collected and analyzed using a statistical programs like SPSS. The T-test, Anova test etc. will be used to identify the level of internal marketing and its significance in organizational commitment. All the findings from these analyses will be analyzed thoroughly with consideration of their statistical meaning. The graphs, tables and other necessary form of data will be generated by using Excel, Microsoft word, Acrobat reader and SPSS programs.

Reference

·         Ahmed, P.K., & Rafiq, M. (2003). Commentary Internal marketing issues and challenges. European Journal of Marketing, 37(9).

·         Cichy, R.F., Cha, J.M., & Kim, S.H. (2009). The relationship between organizational commitment and contextual performance among private club leaders. International Journal of Hospitality Management, 28, 53-62.

·         Gronroos, C. (1990). Service Management and Marketing-Managing the Moments of Truth in Service Competition, Lexington Books, Lexington, MA.

·         Hogg, C. (1996). Selling your soul. Human Resources, 96 (25), 88-90.

·         Meyer, J.P., & Allen, N.J. (1991). A three-component conceptualization of organizational commitment. Human Resource Management Review, 1(1), 61-89.

·         Pitt, L., Caruana, A., & Berthon, P. R. (1996). Market orientation and business performance: some European evidence. International Marketing Review, 13(1).

·         Schlessenger, L.A., & Heskett, J.L. (1991). Breaking the cycle of failure in services. Sloan Management Review, 32 (3), 17-28.

Management Accounting and Its Importance:

INTRODUCTION TO MANAGEMENT ACCOUNTING

Management accounting is not a specific system of accounts, but could be any form of accounting which enables a business to be conducted more effectively and efficiently. Unlike financial accounting, where the primary emphasis is on reporting outsiders, management accounting focuses on internal planning and control activities. Therefore management accounting requires the collection, analysis and interpretation not only financial or cost data, but also other such as sales, price, product demands and measures of physical quantities and capacities. In the process, the system utilizes all techniques of financial and cost accounting including marginal or direct costing, standard costing, budgetary control, etc. Management accounting therefore appears as the extension of the horizon of cost accounting towards newer areas of management.

According to the Chartered Institute of Management Accountants (CIMA):

 "Management Accounting is the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its resources. Management accounting also comprises the preparation of financial reports for non-management groups such as shareholders, creditors, regulatory agencies and tax authorities"

The American Institute of Certified Public Accountants (AICPA) states that management accounting as practice extends to the following three areas:

• Strategic Management: - Advancing the role of the management accountant as a strategic partner in the organization.
• Performance Management: - Developing the practice of business decision-making and managing the performance of the organization.
• Risk Management: - Contributing to frameworks and practices for identifying, measuring, managing and reporting risks to the achievement of the objectives of the organization.

In a nutshell, Management accounting is a profession that measures and report financial nonfinancial information that helps managers to make decisions to fulfill the goals and objectives of organization.

Management accounting is largely concerned with providing economic information to managers for achieving organizational goals. The information flow system is, therefore, extremely important while designing the system. Managers at each level must have a clear understanding about the objectives and goals assigned and receiving flow of relevant information. It is important to note that overabundance of irrelevant information is as bad as lack of relevant information.

IMPORTANCE OF MANAGEMENT ACCOUNTING TO NEPAL LEVER LTD

Nepal Lever Ltd is branch of Hindustan Lever Ltd, the multinational manufacturing company. It spends its long period with lots of success in Nepal. Although it is well established and financially healthy company it need proper (internal) cost and non cost information to face the change and grab the competitive advantages in this competitive environment. It can use management accounting to identify how much profit the company has earned and how efficiently the company uses its economic resources to reach at that point of success. As it is large manufacturing company it need wise financial and business decisions regarding their operation and future strategy. This is the most useful part of management accounting. Some other pinpointing importance of management accounting to Nepal Lever Ltd is as follows:

1.      To implement the new business concepts:  

Nepal Lever Ltd comes with unique strategy. It says "Our deep roots in local cultures and markets are our unparalleled inheritance and the foundation for our future growth. We will bring our wealth of knowledge and international expertise to the service of local consumers." By this we know that it opens its unique concept, strategies, products and services when it opens its door with every new day. It is more clear by its sales volume which is increase during 2061 in domestic market by 21.16% and in export by 25.51%. So when it comes with every new concepts and strategy management accounting help to implement cost reduction strategies by using different concepts such as lean accounting, six sigma or total quality management. These strategies will help Nepal Lever to eliminate production waste and inefficient or expensive operations in implementation of new strategies and concepts.

2.      To prepare proper economic plan:

Nepal lever maintained a strong focus on serving the domestic market and this is reflected in the domestic business growth of 24%. It means it has a strategy to increase its sales in future and also increasing in present. To implement this strategy it need proper forecasting of its future possibilities and challenges to increase its sales volume. Part of this change includes use of management accountants to prepare economic forecast models to determine how well the company can sell its goods and services in current business environment.

3.      To provide cost allocation methods:

The company nurtured last year's innovations as well as launched and relaunched a number of brands in the course of the year. Wheel Active, Fair and Lovely, Lifebuoy, Sunsilk are some examples. With these new products it incure different direct, indirect variable, fixed and semi variable costs. They need a proper allocation. Failure to allocate all business costs may cause negative cash flow situation causing the company to lose money. For this, management accounting provides a proper allocation of costs of goods and services. Which can be done by using different management accounting tool like process costing, job costing or activity based costing etc.

4.      To provide financial information to internal users:

Management accounting information are mainly prepared to use by internal users. Every business organization need the information provided by management accounting so they can make a business decisions that reflect the changing behavior of consumers in the economic marketplace. As for all, it is also important for Nepal Lever Ltd to track all internal financial information and report it to operational and executive managers. Some useful internal management accounting information are: cost of direct material, availability and cost of skilled and unskilled labor, costs to produce goods or services, and general administrative business.

Research Proposal: A Proposal for the study of customer satisfaction of commercial bank.

Chapter-1

Introduction

1.1  Background

Banking sector in Nepal is facing a rapidly changing market. This is also known as the late effect of world financial crisis. In addition, the impact of the economic problems and financial crisis among the financial institutions creates a great challenge for the overall banking sectors. At this situation aiming for the customer satisfaction is the most challenging task for banks. Through the satisfied customers, a bank can easily measure the effectiveness of the business, its potential and position in the industries and the areas that are needed to polish and improve. But gathering a satisfied customer is not an overnight miracle but with the full of patience and bountiful of effort.

It is a well known fact that no business can exist without customers. So they must be satisfied.  More than any other, banking is a customer oriented services industry and Nepalese banks have started realizing that business depends on client service and the satisfaction of the customer. Customer satisfaction is the key factor for customer retention and thereby the banks success. So identifying and improving the factors that can limit the satisfaction of customer is the crucial step for the bank which wants to be a step forward than its competitors.

Customer satisfaction is an ambiguous and applied concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. The state of satisfaction depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction can also vary depending on other options the customer may have and other products against which the customer can compare the organization's products. Among several factors; Quality, Timeliness, Efficiency, Ease of Access, Organizational environment, Commitment to the Customer and Innovation, Behavior of employees, Willingness to solve problems, friendliness, knowledge level, communication skills etc. are some major factors that affect the satisfaction of customer. These factors are used for measurement and continuous improvement of customer satisfaction.

Machhapuchchhre Bank Ltd was founded in 1998 as the first regional commercial bank to start banking business from the western region of Nepal with its head office in Pokhara. It is one of the full fledged commercial bank operating in Nepal; and it ranks in the top most among the private commercial banks. With its past success and experience MBL is striving to facilitate its customers’ needs by delivering the best of services in combination with the state of the art technologies and best international practices. But its business environment is not same as it was in the past. Its business environment is more complex with the entrance of powerful competitor, rapid change in customers’ service/product expectations, increasing employee turnover, possible cross sales and with many other factors. So, before moving to the something new and continuing existing one, it is necessary to identify the factors affecting the satisfaction and its current level.  

1.2 Statement of the Problem

Customers have expectations and criteria when they judge whether the provided banking services is satisfactory or not. At the same time, due to the high competition in a banking sector, the perception of customers and potential customers are also divided according to the services that they want to achieve. The proper identification of customer satisfaction helps to retain customers and to increase brand awareness, profitability and effectiveness of bank’s services. These are the major customer oriented opportunities and challenges for the banking sector in Nepal, so the Machhapuchchhre Bank Ltd’s. Among the different problems regarding customer satisfaction, followings will be the major concern of this study.

i.        What are the factors affecting the customer satisfaction of MBL?

ii.      How the MBL can gather the customer satisfaction, which is the same focus of other competing banks?

iii.    What are the most satisfactory factors that are provided by competing banks to its customers?

iv.    What types of product/services are expected by MBL’s customer in future?

1.3 Objective of the Study

General objectives:

i.        To identify, if any, possible way to increase customer satisfaction.

ii.      To explore the factor affecting the customer satisfaction of Machhapuchchhre Bank Ltd.

Specific objective:

iii.    To explore and analyze critically the customer satisfaction of Machhapuchchhre Bank Ltd.

1.4 Research Hypotheses

The following are the possible alternative hypotheses in this study.

H₁: Competency of the bank has positive impact on customer satisfaction.

H₂: Responsiveness of the bank has positive impact on customer satisfaction.

H₃: Timeliness of the bank has positive impact on customer satisfaction.

H₄: Online banking of the bank has positive impact on customer satisfaction.

H₅: Communication of the bank has positive impact on customer satisfaction.

H₆: Credibility of the bank has positive impact on customer satisfaction.

H₇: Customer and Social welfare program of the bank has positive impact on customer satisfaction.

H₈: Appearance of the bank has positive impact on customer satisfaction.

H₉: It is expected that customer are satisfied with overall loan and deposit services of bank.

1.5 Operational Definitions and Assumptions:

Customer satisfaction is the result of interaction between the consumer’s pre-purchase expectations and post purchase evaluation. More generally satisfaction is the state of liking or disliking the services/product after experiencing it. Here, consumer/customer are any individuals or households or organizations that use goods and services generated within the economy. Also, the banking services includes: bank accounts, personal loans, commercial loans, issuance of cards (debit, credit, ATM) and processing of their transactions etc. The customer satisfaction measurement variable can be defined as follows:

a.      Employees: Employee characteristics and performance related variable directly affect the satisfaction of customer. This includes:

i.        Responsiveness: The willingness of employees to help customers and provide prompt service. It also includes the speed of responses to complaints.

ii.      Friendliness: Friendliness helps to increase quality of service /product. Employees individual attention giving, caring to customer, etc are measured here.

iii.    Skill and knowledge: Skill is measured by the way how employee performs their task and delivers to customers. The employees’ skill highly depends on their education level.

iv.    Timeliness: How fast the employee can deliver the demanded services by their customers.

v.      Communication: Understandable, acceptable, informing about facility and possible risks etc.

b.      Product and Services: It includes all product and service (explained above) related factors of the bank.

i.        Variety: Availability of same category services/product in a multi form, benefit and prices. (i.e. Yuba bachat, child saving etc.)

ii.      Price: The customer pays for receiving product or services from the bank.

iii.    Special services: It includes services like ABBS, online transaction etc.

iv.    Appearance of the bank: The color combination, attractiveness of inside and outside decoration, parking style etc.

v.      Service process: The step that should be completed before getting product or services from the bank. (i.e. the process to deposit, borrow loan etc.)

c.       Image: Primarily this criteria includes,

i.        Credibility: It includes employees trust worthy in transactions and other services, banks ability to make secure transactions and assure security etc.

ii.      Technological excellence: What types of technology is used by the bank. In what extent it serves the customers expectations.

iii.    Customer and social welfare: The bank’s activities for customers’ and social welfare. (i.e. stock ownership opportunity for customers, donations to poor students in school etc.)

d.      Access: Network expansion of the bank, branches location, as well as observed troubles in the service system (strikes, damaged ATMs, etc.), availability of service access (i.e. ATM both access, Bank service access, etc.) are included in this criterion.

Chapter-2

Literature Survey and Theoretical Framework

2.1 Literature Review

Customer satisfaction is an applied term that determines on how products and services supplied by a company meet or surpass customer expectation. Following Cronin et al. (2000), conceptualize customer satisfaction to be an evaluation of an emotion, reflecting the degree to which the customer believes the service provider evokes positive feelings. Customer satisfaction reflects the degree to which a consumer believes that the possession or use of a service evokes positive feelings. Cronin et al.’s (2000) various models and theories that have been developed to this end (Oliver, 1980; Swan and Trawick, 1980; Tse and Wilton, 1988; Anderson and Sullivan, 1993; Patterson et al., 1997), indicate that customer satisfaction is related to the size and direction of disconfirmation, which is defined as the difference between the post-purchase and post-usage evaluation of the performance of the product/service and the expectations held prior to the purchase (Sharma and Ojha, 2004).

In banking industry, being competitive is already a given factor. Customers expect that banks should be strong enough even if there are uncertainties in the country, most especially in the financial stream. In the long run, the customer satisfaction can be the key element of the organization to prepare another strategy (Gitman and McDaniel, 2005). Thereby it can enhance its further success and long lifecycle.

The dream of every organizations and so the banks;  having a satisfied customer will be injection for its success and basis to continue its business lifecycle, if achieved through continuous delivery of satisfactions by reducing resistance and reluctance of the customers towards the bank’s offered products and services. If not, just a respite and waste of time and fund.

However, keeping customers is also dependent on a number of other factors. These include a wider range of product choices, greater convenience, better prices, and enhanced income (Storbacka et al., 1994).

Whereas, Ioanna (2002) further proposed that product differentiation is impossible in a competitive environment like the banking industry. Banks everywhere are delivering the same products. For example, there is usually only minimal variation in interest rates charged or the range of products available to customers. Bank prices are fixed and driven by the marketplace. Thus, bank management tends to differentiate their firm from competitors through service quality. Service quality is an imperative element impacting customers’ satisfaction level in the banking industry. In banking, quality is a multi-variable concept, which includes differing types of convenience, reliability, services portfolio, and critically, the staff delivering the service.

The study showed that increased use of service quality and professional behaviors (such as formal greetings) improved customer satisfaction and reduced customer attrition. This is well documented in a study by Leeds (1992), who documented that approximately 40 percent of customers switched banks because of what they considered to be poor service. Leeds further argued that nearly three-quarters of the banking customers mentioned teller courtesy as a prime consideration in choosing a bank.

Several studies are conducted in this setting regarding the customer satisfaction. In those studies, the contradiction occurs in variables that affect the Customer satisfaction. In some studies, price and variety of product/services are major factors affecting the customer satisfaction with some other. While in some other studies there is an inverse finding that there is no possibility to differentiate their price and services, thereby they have less or no impact in Customer satisfaction.

About Portfolio Management and its Importance: For MBA

INTRODUCTION

The term portfolio refers to any collection of financial asset such as stocks, bonds and cash.  It is also known as the science and art of making decisions about investment mix and policy, matching investment to objectives, assets allocation for individuals and institutions, and balancing risk against performance. In this ever changing era, Portfolio management is becoming a dynamic decision process, whereby the investors list of active new projects is constantly up-dated and revised. In this process, new investment alternatives are evaluated, selected and prioritized; existing investments may be accelerated, killed or de prioritized; and resources are allocated and re-allocated to active projects.

Constructing a right portfolio is more than simply individual project selection; rather it’s about the entire mix of projects. It consists of risk in a proportion to its return and sometime more than that though it depends on investors risk taking behavior. Investors try to minimize such a risk by constructing a portfolio. Portfolio management is all about strengths, weaknesses, opportunities and threats in the equity choice of national vs. international, growth vs. safety, and many other tradeoffs encountered in the attempt to maximize return at a given appetite for risk. Portfolio may be held by individual investors and/or managed by financial professionals, hedge funds, bank and other financial institutions. It is a generally accepted principal that a portfolio is designed according to the investor’s risk tolerance, time frame and investment objectives. The dollar amount of each asset may influence the risk/reward ratio of the portfolio and is referred to as the asset allocation of the portfolio.

Portfolio management by the investor sound like a fairly mechanistic exercise of decision-making and resource allocation but there are many unique facets of the problems which make it perhaps the most challenging decision-making faced by the investors. Generally portfolio management deals with future events and opportunities; thus much of the information required to make project selection decisions is at best uncertain, and at worst very unreliable. Also the decision environment is a very dynamic one. The status and prospects for projects in the portfolio are ever changing, as new information becomes available. Finally, resources to be allocated across projects are limited. A decision to fund on one alternative may mean that resources must be taken away from another; and resource transfers between projects are not totally seamless.

IMPORTANCE OF PORTFOLIO MANAGEMENT

Portfolio management is a critical and vital to every investor. Investors try to maintain high rate of return on their investment as much as possible. So, primarily for financial purpose that is to minimize risk and to maximize return, the Portfolio management is vital. But offcourse the risk consists in a proportion to the return. Though it can be minimized it can not be avoided. For the reason, the Portfolio management will be crucial to investors.  Instead, it help to determine whether the potential return from investing in a specific stock or fund is worth the incremental risk that this stock or fund adds to investor’s portfolio. It also help to achieve balance- the right balance between long and short term investment alternatives, and high risk and low risk ones, consistent with the business’s goals.

In portfolio management, it is important for an investor to monitor his or her portfolio regularly in addition to asset allocation, because it must be determined whether or not the return results of the portfolio meet the expectations of the investor, or whether there is a need to change the strategic asset allocation. The monitoring process also provides comprehensive, detailed information on the investment positions of the investor. The result of the controlling monitoring might require changes in the asset allocation in order to realign the long-term asset allocation strategy. It is important to note that portfolio management, as an investment process, is not a static, but a dynamic one, where you should regularly adapt your decisions to changes in the market and in your own circumstances.

Major importance of portfolio management can be point out as follows. These are also known as four macro or high level goals of portfolio management for investors.

       I.            Value maximization: Here the goal is to allocate resources so as to maximize the value of investors’ portfolio. That is, investor’s select projects so as to maximize sum of the values or commercial worth of all active projects in their pipeline in terms of some business objective ( such as long term profitability, return-on-investment etc.)

    II.            Balance:  Here the principal concern is to develop a balanced portfolio – to achieve a desired balance of projects in terms of a number of parameters; for example, the right balance in terms of long term projects’ versus short ones; or high risk versus lower risk projects; and across various markets, technologies, product categories, and project types.

 III.            Strategic Direction: The main importance here is to ensure that, regardless of all other considerations, the final portfolio of projects truly reflects the business’s strategy – that the breakdown of spending across projects, area, markets, etc., is directly tied to the business strategy.

 IV.            Right Numbers of Projects: Most investors have too many alternate projects underway for the limited resources available. The result is pipeline gridlock: projects end up in a queue; they take longer and longer to get to market; and key activities within projects. Thus an over-riding importance is that it ensures a balance between resources required for the “Go” projects and resources available.

A case writing: Assignment of MBA :

A case study of SABITA TAILORING

“Sabita Tailoring” the name of tailoring to everyone

She was in front of me staring hazy picture of her family – remembering the days with deprivation that eventually unearth the ground breaking effort hidden inside her to make a “Sabita Tailoring” the name of tailoring for everyone. Sabita Paudel knocks down the door of success rather than knocking it by using her strong ability of planning, operating and risk assumption.

The Struggle

The values and norms of our society and dedicated works on our surname were against her initiation that she made in Nepalgunj. Beside this she is the second wife of her husband. So she decided to emigrate from there. Beni, the city of Myagdi district is the place where she entered ten years ago with small two daughter, him and ever following sorrows that she wanted to place far away-long ago. Sabita Paudel, the founder of the tailoring business and after whom the business is named, says she had to strongly revolt against society even after she entered to Beni bazaar.

Those days at Beni also came with stiff challenges. She said they needed more money for their child’s education, business initiation and for secure future. She sought opportunity of tailoring business there. And for the seed capital, she took a loan from bank keeping her jewellery and collect from her neighbour. With this seed capital they started tailoring business in Hulaak Chwok. Where, they as well operate a hotel business along with.

Turning Point

Time goes on but her dreams are still locked on due to strong realm of competitor. The failure of business, high cost of borrowed amount and increasing expenses of her family creates stiff financial challenges. Though her business is in losses there was no way for her except continuing it. It was a time to repay borrowed amount from creditors. She sold all her jewellery and repaid those amounts. She was really in a tough time to make a decision that is either to return Nepalgunj or still continue her business at Beni bazaar. If she still continued her business, there she has to bear not only financial risk but also family risk. Finally her bravery, confidence, enthusiasm, optimism force her to continue her business. The extreme time in her life came with ideas in her mind. Thereby she continued by changing the face of business. She opened it to new place, use her bitter experiences of failure, come with updated design and slash the opportunity. After that, till today her business is successful and she is one of the successful entrepreneurs.

The Values, Philosophy and Business Status

She said that, her chief feature is to inflict pain – step into those designing that no one has dared to set foot on, and solve it. With her chief feature and through the good management of time, money and employee; she manages to gradually take the business to higher platform. Now the business, at the outset started with her single effort and one sewing machine that is used by her has more than twelve head employees and two assistants. Sabita tailoring is the no one tailors in Myagdi district. Sabita tailoring is mainly famous for ladies clothes, available both in readymade and through custom tailoring. Beside this it also offer some custom designed gens clothes. With the talent skill of her own and her follower, she made everyone to remember “Sabita tailoring” when they think of tailoring services. “We cater dashing to custom cultural clothes” she said. This company is not only limited in tailoring services. Now days they started training classes to those who want to learn tailoring. There are more than five women who are learning tailoring skill from Paudel.

This business is always lead by her with a vision to provide the customers wears as per the present fashion designed. “We always understand what our customer expects from us” Paudel says. They meet those customers expectation through different strategy. Frequently she creates different new design and throws it to market. This step helps them to find what is new in the market and what their drawbacks are. Those, which are preferred by customers are modified and specialize with some effective feature. Her creativity and better understanding of market are the key feature for the success of her business. The company’s clientele are mainly ‘high-class’ and ‘middle-class’ people.   By characteristics, those people who want to keep themselves updated with new fashion. So they have many old clients as well as increasing number of new faithful customers. “Quality is always followed by cost. So some people cannot afford our services and products though we try to cover everyone” Paudel says.

There are very few competitor of Sabita tailoring. They frequently come with low pricing strategy. However Paudel maintain stand in the market through continuous adherence to good quality and time commitment to the customers. Quality is always in the uppermost of her mind from the time the order is taken from customers to the time it is handed over to them. But her single effort is not sufficient to meet the desired quality so she always motivates her employees and collect their expectation and feedback about new initiation. She maintains high customer involvement on her services and respect customers’ feedbacks. Budget for the advertisement is lower than it should be Sabita tailoring’s products are primarily marketed through words of mouth. She said “we believe in customer followed by quality not by fad created by advertisement that quickly dies and fades away.” She always believes in a customer with awaken mind not in their naked eyes.

Future Plan

Though her weaknesses and difficulties growing with her old age are in neck and neck with her effort, she is still avid and devoted in her business. Success of the beginning year is sufficient to survive in market. But she is not satisfied with this success. She is planning to go beyond the city with the knowledge she accumulated from mistakes and the experience she have. She said that ‘everything will be mind blowing to our customers after our step outside Beni bazaar.’