Research Proposal on APPLICATION OF THEORIES OF ECONOMICS IN RETAIL SUPER SHOP CHAIN BUSINESS IN BANGLADESH: A CASE STUDY ON AGORA

Prepared for Prof. Dr. A.K.M. Saiful Majid Course Instructor E501: Managerial Economics

Prepared by Zubayer Mahmud Hasan Roll: ZR 23 Batch: MBA 47

Institute of Business Administration University of Dhaka

April 4, 2013

LETTER OF TRANSMITTAL

April 4, 2013

Dr. A.K.M. Saiful Majid Professor Institute of Business Administration University of Dhaka

Dear Sir:

Re: Submission of Managerial Economics Research Proposal

I would like to submit you my research proposal on APPLICATION OF THEORIES OF ECONOMICS IN RETAIL SUPER SHOP CHAIN IN BANGLADESH: A CASE STUDY ON AGORA for the E501: Managerial Economics course instructed by you. I plan to conduct a thorough research to find out evidences of economic theories, such as market demand, demand-price equilibrium, price elasticity etc. in the context of the retail super shop chain business of Bangladesh with a particular focus on AGORA.

I, therefore, hope that you would kindly permit me to initiate my research by approving this research proposal and oblige me thereby.

Yours sincerely,

Zubayer Mahmud Hasan Roll: ZR 23 Batch: MBA 47

1. INTRODUCTION
AGORA, the brand name of Rahimafrooz Group is the first super shop chain in our country launched in 2000. The mission was to fulfill the everyday shopping needs of the urban peoples through fair price, right assortment, and best quality. The success was immediate as there was a demand for such business in the local market. And over time the number of outlets increased and currently there are nine outlets at Dhaka and one outlet in Chittagong. Agora Ltd. is an enterprise that combines industry and trade, mainly engages in retailing the quality products at the most lowest price in the market. The management of Agora, was an enthusiastic advocate of trading stamps as an inducement for shoppers to patronize their stores: They signed up with all types of quality products manufacturer, and became one of the companys largest clients. But the management was a fan of pile it high and sell it cheap, and in the mid-2000 Agora faced many cost problems associated with not properly integrating its purchased chains of stores. When the firm overstretched itself opening few more outlets throughout the city, management consultants were called in to sort out the mess. In 2001 Agora launched Operation Checkout, an across the board price cutting campaign aimed at countering the threat from the new breed of discounters. Agora's state-of-the-art technology and creative strategy gave it an edge over its competitors at local market. Agora is a Dhaka-based supermarket chain. It is the largest retailer, both by local sales and by domestic market share, and the largest retailer in Dhaka leaving behind PQS, Meena Bazar, Nandan Mega Shop, Pacific, Pick and Pay, Etc, Shop & Save and others. Originally specializing in food, it has moved into areas such as clothes, consumer electronics, financial services, selling and renting DVDs, CDs and consumer telecom accessories. 1.1 RESEARCH OBJECTIVE

The research was conducted to find out

How AGORA complies to the Principles of Economics Determining market demand for retail outlet service How price elasticity works on the service of AGORA How retail outlet service like AGORA is affected by price ceiling

1.2

SCOPE OF THE RESEARCH

Economic theory provides us with implements of economic analysis that helps in amplifying economic fact in envisaging economic actions, in reviewing the performance of the economy and in devising economic policies. The implications are to provide economic tools, to explain economic phenomena, to predict economic events, to judge the performance of economy, to formulate and understand economic policies and to evaluate economic policies.

Here in this research, AGORA is analyzed from an economic point of view. The compliance with the principles of economics is found out and their strategy to deal with the demand price equilibrium is discovered. The study will also assess the impact of price elasticity on the service of AGORA and how AGORA is affected by price ceiling. 1.3 LIMITATIONS

The application of economic theory to economic exertions irrespective of time and place has led to the failure of many economic policies applied with fine objectives. The reasons for such failures have been as under. The applicability and exactness of an economic theory depends upon the fact whether the postulations of the theory are in observance with the definite economic stipulation on which the economist wants to pertain. If the postulations are not in concurrence with the definite circumstance the outcome may be wrong. Subsistence of particular circumstance in the nation which happens to be dissimilar from those measured in the theory. Such a circumstance occurs when efforts are made to apply economic theories intended for developed nations on the developing economies. An economic theory which is the source of a policy determine at one time in the economy cannot be true for all times since an economy is dynamic, changing organism. An economic theory which is accurate at present may turn out to be outmoded tomorrow and the policy on this might also turn into ineffectual. Apart from the presumptuous errors, significant deviations are expected in the data that are to be received from the AGORA officials. This is only due to the overprotective attitude the employees show towards the organization.

2. METHODOLOGY
2.1 RESEARCH DESIGN

The research will be conducted based on the following process:

1) Methods and approaches a) Data Sources i) Primary sources: (1) Results from a survey based on a questionnaire about SWAN Foam. (2) Interview with and data collection from industry specialists ii) Secondary sources: Articles and text from websites, books and magazines etc. relating to the topic concerned. b) Questionnaire: A set of 10-15 questions relating to the research topic will be created and used in the questionnaire. c) Survey: a survey will be conducted using the questionnaire among consumers of SWAN Foam in Dhaka city. i) Place of survey: Various residential/commercial areas in Dhaka city ii) Sampling Technique: Stratified sampling iii) Sample size: 30 iv) Age: 25-50 v) Gender: Both male and female vi) Occupation: Business personnel/service holders 2) Analytical tools a) Facilities: SPSS/Easyfit/Excel software, relevant statistical methods, internet. b) Manpower: 1 member

2.2

ACTION PLAN

2.2.1 WORK SCHEDULE

Work to be completed Submission and Approval of Proposal Data collection Analysis Report Writing Review, Editing and Final Report Submission

April Week 1 Week 2 Week 3 Week 4

3. APPENDIX
3.1 THE TABLE OF CONTENTS (i) Executive Summary (ii) List of Figures (iii) List of Tables (iv) List of Acronyms 1. Introduction 1.1. Objectives 1.2. Scopes 1.3. Limitations 1.4. Overview of retail super shop chain business in bangladesh 1.5. AGORA at a glance 1.5.1. Organization Structure 1.5.2. Products Mix 1.5.3. Company Performance Review 1.5.4. Prospect of AGORA 1.5.5. Marketing Strategy of AGORA 1.5.6. Competitors of AGORA 2. Methodology 2.1. Rationale of the Research Method 2.2. Rationale of the Sampling Method 2.3. Questionnaire Design 2.4. Sampling and Data Collection 3. Analysis and Application of Economic Principles and Theories 3.1. A Demand and Supply function 3.1.1. Market Equilibrium 3.1.2. Influencing Factors and Correlation Analysis 3.1.3. Income and Substitution Effect 3.2. Cost function, structure and influencing factors 3.2.1. Economies of Scale 3.2.2. Correlation Analysis among influencing factors 3.3. Elasticity of Demand and Supply 4. SWOT Analysis of SWAN Foam 5. Recommendations 6. Conclusion 7. References 8. Appendices