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Executive Summary:

Formulating a brand plan for solar energy solution company is an uphill task. The aspects of high setup cost,

maintenance hassles, and low awareness are the major hindrances which are holding back the growth of this

sector. So the brand Aalowill have to initiate its Point-of-Difference in line with reducing these hindrances.

Thus the brand will come up with its innovative modelof formulating a micro-grid systemof 1KW each. The

target market of the company will be the SMEs and to be more specific the shops in the village markets. The

company will target 500 village markets from the out-of-grid section of the country. Each 1KW plant of this

magnitude will be setup in 500 village markets. 30 consumers from each market will be targeted whowill pay

a nominalmonthly fee in exchange of the service. Aalowillmanage the grid centrally and carry out allother

expenses in electrifying the SMEs.

On the other hand for the on-grid market segment Aalowill sell the entire solar energy systemranging from

500W-2KW. In this sector they willmainly focus on the real estate companies, under Real Estate Housing

Association of Bangladesh (REHAB), that fallunder the definition of Small and medium enterprise (SME). In

order to alleviate the overreliance on a single sectoron the on-grid market, Aalowill also try to attract

consumers fromother sectors such as medium sized NGOs, gold traders, chemical factories etc.

To promote the above mentioned strategies utilizing the marketing mix properly is ofutmost importance. The

product, place and pricing strategies have already been discussed in the above mentioned paragraphs so the

remaining marketing mix, promotion, is to be discussed here. The objective of the company is to carry out the

promotional campaign in such a way that it can leverage the brand equity and take the levelof brand equity in

the Customer based brand equity model from salience to imagery. The company will carry out various


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promotional activities such as commencing twomonths prior the actuallaunching of the brand. In order to

brand Aalo in the rural segment several innovative steps such as branding the walls of the village market.

The shops will be provided with banners which will be branded by Aalo. Few branded solar energized lights

will be set up in the village market area so that it creates brand awareness among the potential consumers.

Religious places such as mosques, mandirs will be electrified free of cost which will create further positivity in

the brand image of Aalo. Severalother promotional activities such as carrying out Aalos branding in jatra,

grameen mela, circus etc. All these promotions will create a brand image that will be in line with Aalos

positioning that it is a brand which promises to be cheap, hassle free and yet easy touse.

A financial projection, risks and contingency plans and research needs will assist the overall credibility of the

brand plan of Aalo Energy Resources Ltd.


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Situation Analysis:

Aalo Energy Resources Ltd. is the new solar assembler in the country. They are coming with the brand name of

Aalowhile the tag line is Alokito Agamir Jonno Or Enlighten Your Tomorrow. The company wants to focus

in the electricity business, ensuring the supply of the electricity in the ruralmarket, where there is no access of

it, through the technology of Solar System.

Current Market Scenario

Demand & Supply of electricity

Currently there is a huge gap between the supply and demand of electricity, because the demand for the

electricity consumption rises at a Geometric Progression every year, whereas the supply of the electricity

reduces at a moderate proportion. This is because, the company does not encourage or engage in further

investment or expansion, as the sunk cost is too high. All this results in a huge shortage of electricity needed

every year and hence the load shedding problem increases and turns into a severe problem in our country.

The sources of energy

70% of Bangladesh's total commercial energy is provided by natural gas and the remainder almost entirely is

provided by imported oil, hydro power and coal. These show that a huge amount of the resources are being

imported in producing the electricity. However, the supply of the natural gas is quite inadequate. And hence,

in future the country has tolook for alternatives in producing the electricity.


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Uses of Electricity

A huge proportion of the people are deprived of the adequate access of electricity, as the electricity is not

evenly distributed in all the places of the country. Only 55% approximately (a totalof 48,682 Bangladesh

villages) of the population has access to grid electricity and consumption per capita is one of the lowest

(145kWh per annum) about 1/18thofworld average. The pie chart above shows the amount of people living

in the electrified and non electrified areas of the country. 45% (A totalof 38,690 Bangladesh Villages) of the

55%

45%

Energy Scenario

Electrified AreaNon Electrified Area


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people has access to the electricity, and the market for the remaining 55% of the people is the potential target

for the new electricity company to dealwith.

A totalof 48,682 Bangladesh villages out of 87,372 have been brought under coverage of electricity this year

Power, Energy and Mineral Resources Minister Mohammad Enamul Haque told the Bangladesh Parliament

(Oct 3,2010)

Load Shedding:

One of the vital problems in Bangladesh is the load shedding problem, as the shortage for electricity required

rises at a tremendous pace. Load shedding is currently 1200MW per day and expected to be 1,750MW by

2014 and may increase to 3,000MW with increased gas supply uncertainty. Thus it is quite important to

reduce the pressure on gas for electricity generation by providing electricity through solar system. So, the

need for solar energy system turns out to be a milestone to achieve for the country.

Renewable Energy:

Current share ofrenewable energy (RE) in electricity production is very lowwith solar and conventional hydro

producing about 0.1% and 4% of electricity, respectively. Thus there is a major chunk ofusing these unused

resources for the production of electricity. It will be helpful for the people because they would gain access to

electricity, which is a necessity for the people in their daily life. Thus, government should emphasize in utilizing

these unused resources, for providing the people with electricity.


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Market Analysis

Solar Energy System is new project in our country, which has been popularrecently due to the fact of the

severe load shedding and electricity shortage in the country. Many companies have thought for the alternative

way of the conventional electricity generation, and came up with this idea ofutilizing solar energy.

Currently there are 32 (thirty-two) companies that are engaged in full fledged service. However, as the initial

cost is high, most of them start offwith a pilot project, and will expand if they are successful. But because of

the high initial cost they are ignoring expansion and most them are operating with the same capacity.

The major player in the market is the Grameen Shakti, Brac Foundation, Rural Service Foundation (RSF) and

fewothers, that dominates the market structure. Thus it will be slight difficult for the incumbents, to do

something, ignoring the dominators. However, the market leader provides service up to 85% of the market

share. Thus, the market is hugely dominated, allowing few chances for the new entrants. The following chart

consists of the name of the 32 companies currently operating in the market and their current market share.


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Progress with SHS's installation up to 31 August 2010

PO wise installation of SHSs

Partner Organization Number of SHSs Installed Percentage

Grameen Shakti 405,295 63%

BRAC Foundation 61,008 9%

RSF 84,940 13%

Srizony Bangladesh 21,332 3%

UBOMUS 12,928 2%

BRIDGE 9,198 1%

COAST Trust 4,673 1%

Integrated Development Foundation 6,728 1%

Centre for Mass Education and Science 4,278 1%


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Shubashati 3,372 1%

HilfulFuzul Samaj Kallyan Sangstha 11,553 2%

TMSS 4,384 1%

PDBF 4,097 1%

PMUK 1,390 0%

NUSRA 1,504 0%

AFAUS 225 0%

AVA 1,635 0%

DESHA 1,380 0%

RIMSO 1,272 0%

REDI 1,147 0%

INGEN 2,305 0%

Other 389 0%

Total 645,033 100%


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This total 645,033 has been divided into demographically throughout the six divisions around the country. The

following chart consists of the numberof SHSs throughout the whole country according to the six divisions.

Division wise installation of SHSs

Division Number of SHSs Installed

Barisal 99,137

Chittagong 132,003

Dhaka 152,615

Khulna 88,988

Rajshahi 90,784

Sylhet 81,506

Total 645,033


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(Delhi International Renewable Energy Conference 2010, Delhi)

Target Market

The main objective of the company is tomarket this service to Small & Medium Enterprises (SMEs) who are

deprived of electricity required for their smooth operation. There is a major chunk of businesses that arelocated in the rural side. So the company wants to improve the situation of the SMEs, and the market growth

is very well. Most of the competitors are targeting the households, but to think in an unconventionalway, SME

is a good option and portion in the country.

Market Segmentation

Geographic: The Company wants to focus mainly on the villages that are deprived of the electricity. Our focus

group will be the Char areas where there are no electricity lines. Like Hatia, Buraburi, Anantapur, Bazra,

Gunaigach, Char Santoshbiram and Khamar Damarhat under Ulipurupazila in Kurigram. And also very poor

areas like Sherpur, Gaibandha, Thakurgoau, Natore , Panchogor, Rangpur. Also in the Hill Track areas like

Khagrachari , Fotikchari, Bandarban.


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In the On-Grid network there is a large scarcity of electricity in the in Power Development Board (PDB) grid

ine, also the Polli Bidyutt lacks of electricity at peak hours. So they can be our potential customer.

The other formof segmentation could be Demographic and Physiographic, Behavioral Segmentation.

SWOT Analysis

Strength:

Centralized system: The company would run from a centralized system and supply the electricity, by having

the main server at a place, and distribute the electricity through the use of poles and wires to the shops. Thus,

controlling the system is quite efficient, as the company holds all the right on how tomove forwards.

Moreover, the company will be having engineers for a continual process, so that if the machine breaks down,

they can fix it easily rather than going from shop to shop.

Low start up cost: The cost for setting up each plant is around BDT. 250,000. After that, this will be used in

distributing to the small shops and businesses. As the company focuses only on the SMEs, it would be easier to

attract them. Thus, formicro-grid business, anyone can do the business as the start up cost is significantly low.

Low maintenance cost: As the company will be providing services to few SMEs, it would be easier in

maintaining, because the numbers of customers are low. This will be an important feature, as the expenses

will be low due to the lowmaintenance cost.


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Weaknesses:

Competitive Market: One of the main weaknesses for the company is that, they are new in the market. As the

company is new in the market, they will be struggling tomeet theirobjectives, as they will have to surpass lots

of barriers. This is a concern for the company because, if the market is too competitive, they will have to

sustain losses for a long period.

Low Sustainability: The Company has tolaunch their product and services under a huge debt, both from the

bank as well as the government, as the initial investment is too high. Thus the business has to think about

making profit from the beginning, or else, has to pay off the debt, and leave the market.

Lack of involvement of financial institutions: As a new comer, it would be difficult for Aalo to accumulate

such a huge fund, as the business is quite vulnerable. This vulnerability is also a major concern, as it enhances

the chance for debts, and the company may find it hard for finding funds.

Opportunities:

Vision of the Government: The government has a vision for the electrification of the whole country with in

2020, so the government might help the company to fulfill their dream. This can turns out to be a major

advantage, as the company can have access to anything, if they could prove, that will be helpful in creating the

electrification of the country.

Huge market growth: About 55% of the Bangladesh people are deprived of proper electricity system. Bringing

these people under the shed of electricity provides a huge opportunity to grow. And serving these people

would make a huge profitable business, if they are well diversified and planned.


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Renewable Energy: Limitless energy can be produced as the sunlight is free and available in huge quantities. It

can be utilized in making huge money for supplying the electricity to the deprived people all around the

country. Moreover government alsowants to have 10% contribution of the whole electricity by the renewable

sources. So the objective will drive them to go a long way.

Threats:

Lack of Consumer financing: One of the key elements about is that the SMEs willwilling to finance for the

electricity. However, major parts of the SMEs are running without electricity, so they might find it useless, as

they were used towithout the electricity.

Very limited investments in this sector due to perceived risks and uncertainty: There is a huge task for the

government to build the infrastructures properly, for a smooth operation. As the 32 of the companies are

having business for a long time, they get the benefit in the national budget for the fiscal year 2010-2011.

Government does not bother a lot about this industry, so in the future this would turn out to be the worst part

in the smooth operation.

Competitors may invest into this segment: Existing solar energy system, whose primarily target are the

households, may shift their segment and start to concentrate the SMEs. It will thus create a new player, with

big daddy behind them. So Aalomay find it hard to compete, as they do not have such financial backings like

other firms or companies. So a threat may arise and they may find it hard to compete with those big players in

the market.

Knowledge and Awareness gap: Local SMEs are not aware of the fact that they can have electricity through

the solar system, but are continuing theiroperation with the load shedding. So a huge amount tomoney have

to be spend behind the promotion in order to deliver the right message and aware the people about the

alternative way of having electricity.


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Lack of efficient, costeffective after sales service: Research proves that most of the existing companies are

not providing the after sales service, as per the agreement. This is why, negative words ofmouth are being

passed, and the companies are losing the opportunities of new customers.

Lack of policy support: Laws and policy makers are rigid in supporting the new business. So the new company

would find it hard to communicate well and cannot seek help from them. A small support may turn out to be a

beautifulresult towards them.

Target Customers

In ourunique Solar Business System (SBS) modelwhich is dedicated for the rural SMEs electrification, we will

provide electricity using solar energy at a cheaperrate. We will also provide them an integrated service where

we will charge themwith a nominal fee for the service they will be using. The installation set-up cost or the

maintenance cost will be ours. They will just get the Grid line like the convential powermodelof PDB. In our

country there are more than 50% people below the poverty line so the people will not be comfortable with

the new concept. By getting this service they do not have toworry about the technical know-howof the Solar

Business System, also the maintenance part will be done by us. Thus they will have less trouble in managing.

Mainly our focus is on Rural SME who has lack of electricity facilities. Below are our potential customer

segments:

Off Grid Target Customers:

1. Village Market: We willmainly focus on the villages of SMEs. Thus this is an innovative idea to provide the

electricity with the grid system, rather than the individual selling, which will be very much costly.

2. Cottage Industry: This is alsoourone ofour prime customers. They will help us generate a lot ofrevenue in

terms of sells volume. They are the main driving force ofrural economy, also can be potential big consumers.


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3. Sharisha Mill: They also can be our potential customer; this will allowus to give a steady growth. If there is

scarcity of electricity then the productivity will be low. So there is a lot of chance of growth in the sector.

5. Handcraft Business: It is a potential sector, with a lot ofopportunities of growth. They can provide us a good

opportunity to get a major slice our business customer.

6. Chatalof Rice: These rice owners can generate a lot of profit but due to the frequent shortage of electricity

they lose their productivity so toovercome they can be a customerofour service.

On Grid Target Customers:

1. Rehab Member: One of very important target that Aalo is considering, the REHAB Members. This is

because; the Government has provided a law that at least 5% of the electricity should be gathered

from the Green Electricity. Thus, REHAB will be playing an important role, in gathering the market to

provide electricity.

2. Small Engineering Shop: Small Engineering shops are deprived of smooth operation, because of the

lack of electricity provided by the Power Distributing Board (PDB).

3. Gold Shop: A focus can be the Gold Shops, because, they require electricity tomake and produce gold

ornaments, that will cause their sales level to boost in the next stage.

4. Retailer Shop: In the rural area, many retailing shop cannot provide the full service, because they have

to shut their business because oflack of electricity. Moreover, their cost rises by a huge percent

because of costing the extra fuel. This will be beneficial for both the retailer and customer, and would

be sustainable for a long business purpose.

5. Chemical Store: Chemical Stores can use the electricity for the production of chemicals, and reduce

their cost level by a significant amount. Electricity can be used for the whole night purposes, using the

solar energy as a key resource to generate further store level.


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Objectives

One-stop-shop model:

Aalowants to develop a great business idea, and want to promote them as the one stop shop for all

solutions regarding the solar energy system. It will create their brand awareness keeping in mind to be the

leader in this sector and to serve the people by electrifying their businesses with renewable energy. This will

provide a competitive advantage, as the other companies are focusing on the house-hold solar panel system,

but this sector is completely unused. Thus, for a solution regarding the solar business, people would like to

consult with Aalo for better clarification and improve their system.

Seek a profitable business:

As an incumbent, it would be difficult tomaintain a healthy profit level since the beginning. But Aalo, wants to

have a better profitable situation, not from the beginning, but much likely to be as quickly as possible.

Moreover, they want to serve for a long term basis in the country. Thus their vision is to go a long way by

having a great profit level.

Energy Solution for SMEs

Many new companies may be encouraged in doing the same business for the country. They can go to Aalo

as their collaborators. This is because; Aalowill be doing their business in a wide purpose, and can ensure


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themwith betterrawmaterials and the equipments. It will create a better business as an agent, also

enhancing the business model in the electrification industry. It can also diversify their business purpose, and

will achieve economies of scale with in a very short span of time.

Electrification of Bangladesh

The current government is very keen to electrify the whole Bangladesh, with in 2035, halfwith in 2020. Aalo

could be a part of the government policy, in building the next Bangladesh, with electricity available to

everyone. In fact they would be having an extra advantage, as their vision matches with the governments

one. Thus, it will create an extra advantage, as most of their project will be sanctioned from the ministry,

which might take a long time to process, in other instances. And moreover, it will create a big market for them

also, and can seek newopportunities toremain a dominant force in the market.

To reduce air pollution

One of the main problems of the country is the air pollution, because a huge amount of electricity is produced

in burning the coal and natural gases. It creates huge smokes that are bad for the health of the people. But, if

the country wants to go in a green process, Solar Energy is the best possible outcome. This solar system is

viable, and is clean for the investor. Thus, the use of coalwould be reduced, that will create a better

environment.

Climate change mitigation:


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Most sustainable energy enterprises will be reducing emissions of carbon dioxide and other greenhouse gases.

This is because their customers switch from higher carbon energy sources (e.g. kerosene lanterns) tolower

carbon energy sources (e.g. solar home systems), or because they switch tomore efficient ways of burning

biomass (e.g. with improved cooking stoves). Increasing access to end-user finance can help to speed the

switch to cleaner, low carbon energy sources.

Raising standard of living of rural people through Renewable Energy.

As 55% of the people are deprived with having electricity, they have the right to have electricity. In most

cases, the production of the SMEs in the rural area halts due toload shedding, or not having the electricity.

Moreover, if they were access with electricity, they could use the machines and it will improve the living

standards, as people would be efficient and smart enough touse the technology. So, Aalo can have an

objective to play a significant role in improving the living standards of the country, and will create them a very

good image in the market, as one of the successfulorganization in developing this poor country.

Reduce the Green House Effect

As the world is engaged with the green house effect, moving to green business would help tominimize the

green house effect, as the recent survey shows, Bangladesh to be more threatened for this effect. It would be

honored to try toreduce the effect with everything they have. Moreover, they will be rewarded for the carbon

trading; it will create a newway to help and serve for the country, as well as protect the third parties.


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Strategies & Tactics:

The key branding strategy of Aalo Energy Resources Ltd will be to promote the brand as the most convenient

and inexpensive solar energy solution provider in Bangladesh. The Point of Difference of the company will be

that it will provide solar energy solution without the high setup cost and zeromaintenance hassles. This will

also be the brand promise of the brand Aalounder the company Aalo Energy Resources Limited.

The most common hindrance in the development of solar energy sector is the high setup cost which is usually

improbable to bear for the low-income Bangladeshi households. There are alsoother aspects such as the

maintenance hassles, the relatively low battery life, ignorance about the properusage of the products etc.

Aalo Energy Resources Ltd will cater to solve all these problems and provide best quality solar energy solutions

to its designated target market i.e. the small and medium enterprises of Bangladesh.

Mission:

Aalo Energy Resources Limiteds mission is to provide high quality green energy solutions to the SMEs and

mark a step towards creating a green Bangladesh.

Positioning:

AERL will position itself as the most cost effective and hassle free solar energy solution provider in Bangladesh

By implementing theirunique modelof providing a central grid based solar energy solution the company will


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be able to differentiate itself from its competitors and leverage the brand easily. The peripheral benefit of the

company will be the prestige issue of having electricity in ones business. The Point of Difference of the Aalo

brand will be the zero setup and maintenance cost, and also value-based pricing when compared with the

other alternatives. The category Point of Parity of the product is to the renewable energy supply that the

company will provide in line with its competitors.

The company willuse the somewhat untapped SME market to carry out their branding strategy of Aalo Energy

Resources Ltd. In the current market all the solar service provider are emphasizing on Home Based Solar

System. But our Target customers are mainly SMEs sowe have differentiated with other competitors in this

regard. This unique business modelwill give us the first mover advantage and help us to expand our business

rapidly because noother companies are currently specializing in SME sectors.

In the on-grid market the company will focus on selective sales such as targeting real estate companies which

fallunder the category of SME. Thus the company will have similar positioning in this segment as well because

it willobtain an added advantage as very few companies have actually this segment.

Core Strategies:

Branding a solar energy solutions provider company is an uphill task for a country like Bangladesh. The primary

obstruction in developing this sector is the high setup cost and the maintenance hassles. As a result the core

strategies of branding Aalo Energy Resources Ltd will be to devise a business modelwhich will be different

from its competitors and can be termed as disruptive. The company will primarily target the village markets,

which is stillout-of grid and it is difficult for Bangladesh Rural Electrification Board toreach their sometime

soon. The company will set up a central grid system for each village market and then provide the


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electrification service to the village shops individually. Foron-grid SME customers the company will also

formulate a modelwhich will target real estate companies in prime cities like Dhaka and Chittagong. The

company will try toleverage the recent directives of the government that every apartment will have touse 5%

of its entire electricity consumption fromrenewable energy sources.

y Out-of-grid electrification:

Out of about 25 million households of the country, only around 5.5 million had been brought under the

network of conventional electricity till to- date. Since the rural network is characterized by a comparatively

lower consumer density, it often becomes difficult and uneconomic to extend lines to certain remote locations

within the command area of a Palli Bidyut Samity. Moreover some remote areas such as char areas, CHT,

haors etc. which are not likely to be covered by the grid network due to inaccessibility and low consumer

density. Renewable Energy Technologies are considered as viable technicaloptions for such remote areas,

especially for ensuring equitable development of all areas and different cross-sections of socio-economic

groups. As a result it is a financially viable project for Aalo Energy Resources Ltd to invest in solarizing the

SMEs.

Initially the company will target 500 village markets where it will set up plants of 1KW capacity each, carry out

the transmission line within the market and then provide electricity to the shops at a monthly rate. This rate

will be directly competitive with the other available alternatives such as Kerosine lamp, diesel generators etc.

On average each villages market consists of 60-70 shops and out of that AERL will target around 30 shops. If

each shop consumes 30W of electricity then it will be financially viable for AERL to carry on with the project.


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y On-grid Electrification:

In the urban areas the company will focus on supplying solar energy solutions to the members of Real Estate &

Housing Association of Bangladesh (REHAB) which fallunder the definition of SMEs. As per the directive of the

government every apartment must contain 5% of its total energy consumption fromrenewable energy

sources so it is a comparatively untapped market and a promising prospect for AERL.

There are 713 member companies of REHAB and even if the big players are left out AERL will have the

potential to cater around 650 companies which fallunder the category of SME. The Point of Difference for

AERL in this sectorwill be the lax payment structure and a premium after sales service. Other than this sector

some other enterprises such as medium sized NGOs, gold shops, shoe stores etc. This will ensure that the

company will be able to sell around 300nos. of 1KW solar panel system in this time period.

Marketing Mix of the brand Aalo

PRODUCT:

The core product of the brand Aalowill consist of:

Components Specifications Quantity

Solar PV Panel 180W, 34.4V, 5.23A 6 sets

Battery Lead acid & nomaintenance

battery, 200Ah, 24V

2pcs.

Charge Controller 48 V, 50 A 1pc.

Inverter 240V, 50/60Hz 1pc.


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Wire Allwires necessary

The above mentioned product is destined to be the 1KW central grid which will be set up in each village

markets. AERL will setup and maintain every aspects of the solar energy solution and will provide connection

to its customers through a transmission line. This transmission line will also be set up around the village

market at the expense of the company. The duration of the solar PV panels are around 25-30 years whereas

the economic life of the battery ranges around 5-8 years.

On-grid Product:


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In order toreach the Real estate companies which fallunder the definition of SME, Aalo Energy Resources Ltd

will have to cater to their individual needs. As a result AERL will import solar energy solutions ranging from

500W-4KW depending on their demand. They will also provide 24hr home-stop service and free accessories

which will be directly imported from their importer from China.

Carbon Trading:

According to the Kyoto protocol Aalo Energy Resources Limited will be able to carry out carbon trading with

some factories from the developed nations. Taking into the calculations that 30W of solar energy production

willminimize the usage of 120 litres of kerosine per annum. This initiative will save 375 kg of CO2 emission. So

if AERL produces 800KW then it will be able toreduce carbon emissions of 41,650 tons of Carbon dioxide

emission in the initial 6 years ofoperation.

In order to do so the company will initiate Aalo Carbon Bangladesh in collaboration with Carbon planet

Australia and will be launching a CDM based Consultancy and Carbon Trading service. Aalo Carbon

Bangladeshwill be an initiative of Aalo Energy Resources ltd to develop, implement and commercialize

projects under Clean Development Mechanism(CDM) guidelines of UNFCC Kyoto Protocol, which will not only

reduce Carbon Emissions but also earn foreign exchange forour economy.

PRICE:

The pricing strategy of Aalo is ofutmost importance in order to brand the company properly. There will be

two different pricing strategies forout-of-grid and in-grid solar system. If this pricing strategy can be


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implemented properly than this will be the single most important aspect and the most important point of

difference in branding the product properly to its target market.

Out-of-grid

In this segment the company will sell the service of electrifying the SMEs. Taking this initiative will nullify the

high setup cost that was obstructing people fromopting for this technology. For each connection the company

will charge a nominal fee of BDT 400 permonth. The company will set up 500 nos. of 1KW plant in 500

different vi

llage

markets and in each

market the

rew

ill

ano

ptimum

num

bero

f 30 cu

stom

ers pe

rvill

agemarket. The customers will have to pay an initial amount of BDT 1200 forregistration fees.

In-grid

In this segment the company will sell customized solar panel systemmainly to the real estate companies and

other enterprises such as medium sized NGOs, medium enterprises etc. The pricing of each 1KW solar panel

will be BDT 4, 00,000. This price can be paid in cash formwhich willresult in a discount of around 5-6%. But if

the payment is carried out in installments then there will be an extra from the interest that the company willcharge from its customers.

PLACE:

AERL will cater to its customers by reaching out to them. The customers will not have to go for any outlets assuch. The company technicians will set up the transmission lines that will connect the customers with the

companys main grid line. This strategy will go in line with the brands promise of providing a technology that

is hassle free as all the maintenance issues will be directly handled by the company. In each village market

there will be a company owned office which will also consist the entire setup of Solar PV panels, batteries,

inverter etc. The transmission lines will then transmit electricity to each individual shop. There will be two


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technicians for each office of AERL whowilllook into any sort of technical glitches and will also provide new

connections. In order tomaintain the security of the entire solar system two security guards will also be

deployed at the expense of the company. There will also be two central base stations having engineers on

board so that can react to any major technical glitches. Carrying out this placing strategy will create an

enhanced value proposition as the potential customers willonly have to pay a nominal fee in exchange of

being electrified by solar energy. Aalowillreach to its customers reducing their hassles, which is also in line

with their designated brand promise.

When taken into considerations the in-grid market that Aalowill cater, somewhat similar strategies will be

formulated. The real estate companies will have to simply give a notification to the companys office. Learned

salesperson will contact the real estate company and then carry out the buying process within buyers

premises. This will save valuable time and hassles of the buyer company, thus going in line with the brands

promise. There will two service centers, one each in Dhaka and Chittagong so that instant after sales service

can be provided to the customers.

PROMOTION:

Promoting a new brand that will provide solar energy solution is a commendable feat, because the target

market of these products in most cases are fromlow-income groups or are institutional buyers. The objective

of the company is to carry out the promotional campaign in such a way that it can leverage the brand equity

and take the levelof brand equity in the Customer based brand equity model from salience to imagery.

Because by doing so a perception will be created in the mind of the customers that Aalo is providing them


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with a service which is of superior value and they will be able to differentiate it from the other competitors

that is present in the market.

y Out-of-grid promotion:

The overall promotion of the company will commence twomonths prior the actuallaunching of the brand. In

order to brand Aalo in the rural segment several innovative steps such as branding the walls of the village

market. The shops will be provided with banners which will be branded by Aalo. Few branded solar

energized lights will be set up in the village market area so that it creates brand awareness among the

potential consumers. It will also create a perception that solar energy is beneficial to the welfare of a society

and it actually takes a society forward. Religious places such as mosques, mandirs will be electrified free of

cost which will create further positivity in the brand image of Aalo. Severalother promotional activities such

as carrying out Aalos branding in jatra, grameen mela, circus etc. All these promotions will create a brand

image that will be in line with Aalos positioning that it is a brand which promises to be cheap, hassle free and

yet easy touse.

But the main aspect of the promotional campaign is to carry out the one-to-one marketing. By using this

strategy Aalowill be able to communicate both ways i.e. it can get instant responses from its potential

customers. The technicians of the company willmostly be taken from the local people and then they will also

be trained to carry out a sales process. As the company will be carrying out the push strategy so they will aid a

company sent designated salesperson tomake the potential customers comprehend about the benefits of the

product. As they will ideally be picked from the locality they will possess ample local knowledge so it will be

easier for them to cater for the local needs of the people. They will also be able tomake themunderstand

about the negatives ofusing kerosine lamps or diesel generators. The company will alsoreach out to the


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Union Parishad chairman, Imam, school teachers tomake them the opinion leaders of the company. This

intensified promotional strategy will be able to convince the SMEs toopt for Aalos service.

y On-grid promotion:

When promoting Aalo in the urban area the company will solely depend on direct marketing. The company

sales representatives will individually demonstrate the product to the real estate companies. As the company

will not have toreach to the end consumers this is the best possible strategy to be implemented. The

company will electrify the REHAB office with solar energy without any sort of expenditure which will create a

positive association in the mind of the customers about Aalo. The company will also provide attractive

pricing policies which will include sales promotions, cash rebates etc. which will also attract the potentialreal

estate companies. By grabbing a significant market share in the real estate market the company wants to

obtain the first mover advantage in this regard.

Operational Considerations:

O

perational Strategy: It is im

por

tant to

begin this pro

cess by develo

ping a few

high-leve

lgo

als and

objectives

for branding Aalo.

Current Market: Before jumping into an analysis of the target market for Aalo, one should take a closerlook

at the client segments you already serve with energy products and services. In order to brand Aalo properly

the company needs to ensure that it is catering to the target market properly.


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How to operate the Solar system: PV modules are specified by their watt-peak (Wp) rating, which is the

power generated under standard conditions, equivalent to bright sun in the tropics (they stillwork at lower

light levels though). Most solar-home-systems use modules between about 10 Wp and 100 Wp rating.

The rechargeable batteries store spare electricity on sunny days, so that it is available at night and on cloudy

days. They also provide a stable voltage (usually 12 V) for the devices which use the electricity. Standard lead-

acid car batteries can be used, but they dont last long if they are heavily discharged, so specially-made solar

versions are strongly recommended. Other types ofrechargeable battery like nickel-cadmium and nickel-

metal-hydride are increasingly used, particularly in small systems like solarlanterns. They are more expensive,

but easier tomake small and portable, and more tolerant of being heavily discharged.

All equipment run directly from the PV supply must be designed for 12 V d.c. operation. Efficient lights and

appliances make best use of the limited supply of electricity. Efficient d.c. fluorescent lights are available down

to about 3 or 4 W powerrating, in both tube and compact forms. LED lights are even more efficient, and are

now sufficiently cheap and reliable to be used as well.

In most systems, an electronic charge-controller is used to protect the battery from being overcharged (when

it is very sunny) orover-discharged (when people try to get toomuch electricity from the system). The charge

controllerusually has lights or a meter to indicate the state-of-charge of the battery.

Other considerations: The product will be directly imported from a Chinese company named Guangzhou

Occren Energy Resources Ltd. The company will have long term agreement with Aalo Energy Resources Ltd

and as a result it will brand all the products with the brand of Aalo. The same company will provide on-grid

solar panel solutions as well so that Aalo can cater the urban real estate companies as well. By using a

supplier from China Aalowill be able tominimize its cost substantially, and the supplierwill also provide

ample after sales service.


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As there will be 500 offices in the village markets where the company willoperate, most of themwill be

directly bought from the villagers. This will give them a permanent place to set up their solar panel grid. The

two technicians will alsowork as the security personnel in those village offices. They will also assist the sales

persons in locating out the potential sales as they willusually selected from the locality. The training of these

one thousand technicians will be conducted centrally. The members of the technical teamwill have little

formal education when theyll join the company. Through the intensive training process, theyllreceive

extensive training in the assembly of electronic components, quality control, business development,

marketing of SHS, micro-finance and solar battery charging. The manufacturerof the charge controller kits

approved the quality of assembly before allowing Aalo tomarket them.

Each solar panel systemwill be thoroughly checked by an Aalo employee after installation, and customers

are trained in how touse it. The monthly visits to collect payment also include a check on the system

operation. This will insure that the consumers will not have to think about any sort ofmaintenance.

Financial Projection

Budget Analysis

Name Quantity Price Calculations Amount

(BDT)Off-Grid

1 kW Solar Panel 500 units $2944 500x2944x70 103,040,000

Transmission Line 500 tonnes $1000 500x1000x70 35,000,000

Land & Infrastructure 500 units Tk.80,000 500x800 40,000,000

Head Office & Sales Office

(for dcor & rent purpose)

5,000,000 5,000,000

Vehicles 2 Nos Tk.15 lacs 2x15,00,000 3,000,000


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Training Costs 1000 (techs) Tk.5000 1000x5000 5,000,000

On-Grid

1 kW Solar Panel

(money fromworking

capitalmanagement)

300 units $2944 300x2944x70 61,824,000

Installation costs 300 units $150 300x150x70 3,150,000

Launching &

Initial Program

3,000,000 3,000,000

Miscellaneous Expenses:

Administrative cost

Official Paper Work

500,000

Retain Earnings (9,514,000)

Total 250,000,000

Capital Expenditure

Source Principal Interest Rate Maturity Amount

IDCOL Tk. 10 Crores 6.5% 7 years

(2 year grace period)

100,000,000

Working Capital

Loan

Tk. 5 Crores 10-13% Due within 1 year 50,000,000

Retain Earnings Tk. 8 Crores - - 80,000,000

Loan fromFriends Tk. 2 Crores - 8 years 20,000,000

Total 250,000,000

Sales Budget

Off-Grid (To SMEs in rural areas)

Year Output Capacity Calculations No. of Customers


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Year 1 150 kW 50% 150x50%x30 2,250 2,250

Year 2

150 kW

150kW

80%

50%

150x80%x30

150x50%x30

3,600

2,250 5,850

Year 3

150 kW

150kW

200 kW

100%

80%

50%

150x100%x30

150x80%x30

200x50%x30

4,500

3,600

3,000

11,100

Year 4

150 kW

150kW

200 kW

100%

100%

80%

150x100%x30

150x100%x30

200x80%x30

4,500

4,500

4,800

13,800

Year 5

150 kW

150kW

200 kW

100%

100%

100%

150x100%x30

150x100%x30

200x100%x30

4,500

4,500

6,000

15,000

Year 6

150 kW

150kW

200 kW

100%

100%

100%

150x100%x30

150x100%x30

200x100%x30

4,500

4,500

6,000

15,000

Keys:

1. 1 kW serves 30 customers (sme)

2. For every year sales, company targets

y Average sales (50% capacity) in first year

y

Moderate sales (80% capacity) in second yeary Optimum Sales (100% capacity) in following yearonwards

On-Grid (Sale to REHAB Members)

Year Output

Year 1 50 kW

Year 2 80 kW


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Year 3 80 kW

Year 4 50 kW

Year 5 40 kW

Year 6 -

Income & Expenditure Account

For 6 Year Periods

Details Year 1

(BDT)

Year 2

(BDT)

Year 3

(BDT)

Year 4

(BDT)

Year 5

(BDT)

Year 6

(BDT)

Income:

Sales from

Off-Grid

10,800,000 28,080,000 53,280,000 66,240,000 72,000,000 72,000,000

Sales fromOn-Grid

20,000,000 32,000,000 32,000,000 20,000,000 16,000,000 -

Revenue from

Carbon

Trading

2,394,000 5,147,100 8,498,700 9,097,200 9,576,000 9,576,000

Total Income 33,194,000 65,227,100 93,778,700 95,337,200 97,576,000 81,576,000

Expenditure:

Salaries &

Wages

10,500,000 11,550,000 12,705,000 19,975,500 15,373,050 16,910,355

Vehicle

running

expenses

500,000 550,000 600,000 650,000 700,000 750,000

Miscellaneous

Expenses

900,000 945,000 992,250 1,041,863 1,093,956 1,148,653

Interest

Expenses

1,210,000 2,100,000 8,600,000 6,410,000 5,110,000 2,600,000

Bad Debts 616,000 1,201,600 1,705,600 1,724,800 1,760,000 1,440,000

Office

Expenses

432,000 447,000 462,000 477,000 492,000 507,000


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Advertising &

Promotion

3,000,000 1,000,000 1,000,000 1,000,000 500,000 500,000

Insurance

Costs

180,000 180,000 180,000 180,000 180,000 180,000

Telephone &

Internet

24,000 24,000 24,000 24,000 24,000 24,000

Depreciation

Expenses

6,371,600 6,371,600 6,371,600 6,371,600 6,371,600 6,371,600

Total

Expenses

23,097,000 23,718,200 31,974,450 37,173,763 31,178,666 29,720,608

Profit/ (Loss) 10,097,000 41,508,900 61,804,250 58,163,437 66,397,334 51,855,392

Cash Budget

Details Year 1

(BDT)

Year 2

(BDT)

Year 3

(BDT)

Year 4

(BDT)

Year 5

(BDT)

Year 6

(BDT)

In flow of Money:

Balance B/F - 15,479,000 53,083,700 86,972,750 115,222,857 158,662,651

Loan from

IDCOL

100,000,000

Retain

Earnings

80,000,000

Loan from

Friends

20,000,000

Working

Capital Loan

11,000,000 17,500,000 17,500,000 11,000,000 9,000,000

Sales from

Off-Grid

10,800,000 28,080,000 53,280,000 66,240,000 72,000,000 72,000,000

Sales from

On-Grid

20,000,000 32,000,000 32,000,000 20,000,000 16,000,000 -

Revenue from

Carbon

Trading

2,394,000 5,147,100 8,498,700 9,097,200 9,576,000 9,576,000

Total Cash

Inflow

244,194,000 84,727,100 112,278,700 108,337,200 107,576,000 82,076,000

Out Flow of Money:

Repayment of 11,000,000 17,500,000 17,500,000 11,000,000 9,000,000


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Working

Capital Loan

Repayment of

IDCOL Loan

20,000,000 20,000,000 20,000,000 20,000,000

Initial

Investment

206,140,000

Installation

cost of On-

Grid

10,829,000 17,326,400 17,326,400 10,829,000 8,663,200

Business

Expenses

11,746,000 14,796,000 21,563,250 27,758,363 22,473,006 19,620,008

Total Cash

Out-flow

228,715,000 43,122,400 76,389,650 76,087,363 62,136,206 48,620,008

Net Cash

Flow

15,479,000 39,604,700 34,889,050 30,249,837 44,439,794 32,955,992

Balance C/F 15,479,000 53,083,700 86,972,750 115,222,857 158,662,651 191,118,643

Balance Sheet

For the 6 years period

Details Year 1

(BDT

)

Year 2

(BDT

)

Year 3

(BDT

)

Year 4

(BDT

)

Year 5

(BDT

)

Year 6

(BDT

)Fixed Asset

Solar Panel 98,918,400 94,796,800 90,675,200 86,553,600 82,432,000 78,310,400

Transmission

Lines

33,250,000 31,500,000 29,750,000 28,000,000 26,250,000 24,500,000

Vehicles 2,500,000 2,000,000 1,500,000 1,000,000 500,000 -

Land 30,000,000 30,000,000 30,000,000 30,000,000 30,000,000 30,000,000

Total Fixed

Asset:

164,668,400 158,296,800 151,925,200 145,553,600 139,182,000 132,810,400

Current Asset

Cash at Bank 13,479,000 52,083,700 84,972,750 114222857 158,162,651 188,618,643

Debtors 12,000,000 19,200,000 19,200,000 12,000,000 9,600,000 8,400,000

Total

Current

Asset:

25,479,000 71,283,700 104,172,750 126,222,857 167,762,651 197,018,643

Current

Liabilities:

Working 11,000,000 17,500,000 17,500,000 11,000,000 9,000,000 -


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Capital Loan

Total

Current

Liabilities

11,000,000 17,500,000 17,500,000 11,000,000 9,000,000 -

Net Working

Capital

14,479,000 53,783,700 86,672,750 115,222,857 158,762,651 197,018,643

Total Assets 179,147,400 212,080,500 238,597,950 260,776,457 297,944,651 329,829,043

Financed By:

Capital 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000

RetainEarnings

(20,852,600) 12,080,500 58,597,950 100,776,457 157,944,651 209,829,043

Long Term Liabilities:

IDCOL 100,000,000 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000

Capital Budgeting

Year Cash Inflow CashOutflow Net Cash Flow Discount

Factor

Discounted

Cash Flow

0 - 196,640,000 (196,640,000) 1 (196,640,000)

1 244,194,000 228,715,000 15,479,000 0.909 14,070,411

2 84,727,100 43,122,400 39,604,700 0.826 32,713,482

3 112,278,700 76,389,650 34,889,050 0.751 26,201,676

4 108,337,200 76,087,363 30,249,837 0.683 20,660,638

5 107,576,000 62,136,206 44,439,794 0.621 27,597,112

6 82,076,000 48,620,008 32,955,992 0.564 18,587,179

Total: 978,373 NPV= 56,809,502

Pay Back = 5yrs + (978,373/32,955,992) x12

= 5yrs 11.6months


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NPV: is negative. It implies that it will take some few years to attain the positive NPV, but it will be possible to attain, just

within two to three years.

Related Customer service research:

For the purpose ofour project we have targeted the SMEs. The market of the SMEs that we are considering is

a very lucrative one and possesses huge potential for growth. However, we could not find any concrete data

based on the segment in the market.

To conduct the market research we require:

y Current market situation

y Market Size

y Competition

y Market segment

y Target market list

y

Carbon trading facts and figurey Custom duty structure

y Cost of importing

y Quotation of sellers

y Present market prices

y Current buyers behavior


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new entrants in the market. So the company might face adverse challenges regarding quality, service,

price etc. But as it will be enjoying the first mover advantage so the company will have tomake sure so

that it leverages the brand equity properly resulting in a greater acceptance of Aalooverother

entrants.

3. Enhanced alternatives:

The company may have to face unsought situations like the inclusion of alternative energy resources

such as windmillor bio gas generation. The company will have to focus on branding their product

properly so that the consumers perceive it as the premium technology ofrenewable energy resources.

4. Low awareness of potential consumers:

Although the market for Solar energy system is growing exponentially there is an overalllack of

awareness in the mind of the potential consumers. As a result the company needs to ensure that it

promotes the brand promise properly so that people becomes very much aware about the brand

Aalo.

5. On-grid consumers may look for alternative:

As the company will be focusing on real estate companies in its on-grid sales, a deterioration of sales in

this sectormay harm the overall profitability of the company. In order to alleviate it, the company will

have to ensure that the consumers brand image and the companys positioning is in line so that Aalo

has a positive association in the mind of the consumers.


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Conclusion:

After formulating the brand plan, it will be possible to brand the company properly and as a result it will be

able to serve its brands promise and a positive association will form in the mind of the consumers. By

implementing the unique business model Aalo Energy Resources Ltd will be able torun the company which

will be economically viable.

After calculating the financial analysis, it is visible that this business is quite viable, only in the long run. This is

because, initially it requires a huge investment around 25 Crores Taka. As the cost is very high, it would

require around 7-8 years meeting the break-even analysis. There is a lot ofwork to do, in creating brand

awareness to the targeted customer. The sales of this service are quite good, as the need for this service isvery high, as there is inadequate supply in the market. So, it is a good way to earn profit, and serve the

country.


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Moreover, huge revenue will be earned, if the company provides a huge fund behind the advertising and

promotional purpose. It will create awareness at first, and will create the need for this product. Thus, by

gradually, it willmeet the demand, and hence will increase the market of this particular industry.

References:

www.idcol.org/energyProject.php

http://www.alibaba.com/

www.nbr-bd.org/customs.html

www.thefinancialexpress-bd.com/more.php?news_id=63621

www.energybangla.com/index.php?mod=article&cat...article...

www.reein.org/solar/khlsolarpv/index.htm

www.rendev.org/.../RENDEV_WP6_D22_Final%20Strategy%20Paper_Bangladesh_apr%2021.pdf

web.worldbank.org About Us IDA IDA at Work Project Profiles


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www.reein.org/solar/khlsolarpv/index.htm

sustainablog.blogspot.com/.../solar-power-appropriate-technology-in.html

http://www.energybangla.com/

http://www.energybangla.com/index.php?mod=article&cat=GasSector

www.adb.org/Documents/Events/.../Pre-forum-Session2-Pavel.pdf

www.direc2010.gov.in/.../An%20off%20grid%20lighting%20solution%20in%20Bangladesh.pdf

www.solardaily.com/.../Off_Grid_Lighting_Solutions_For_Rural_Electrification_999.html -

www.idcol.org/Download/IDCOL%20Solar%20Energy%20Program.pdf

www.evd.nl/zoeken/showbouwsteen.asp?bstnum=19343

www.evd.nl/zoeken/showbouwsteen.asp?bstnum=19343

http://energy.sourceguides.com/businesses/byGeo/byC/Bangladesh/byP/solar/byB/import/import.shtml

http://www.ashdenawards.org/reports

http://www.ashdenawards.org/schools/films

http://www.ashdenawards.org/conferences/imperial-college-2010

http://www.bangladesh-carbon.com

http://www.ashdenawards.org/solar

http://workspace.imperial.ac.uk/climatechange/public/pdfs/GranthamJune.pdf

http://www.solarbuzz.com/index.asp

http://www.iea.org/papers/2010/pv_roadmap.pdf


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http://www.ashdenawards.org/solar-grid

http://www.ashdenawards.org/winners/grameen

www.rahimafrooz.com

www.gshakti.org

www.nesta.org.uk/areas_of_work/public_services_lab/environment/big_green_challenge

http://www.energybangla.com/index.php?mod=article&cat=GreenPage&article=2857

http://www.energybangla.com/index.php?mod=article&cat=GreenPage&article=2821

Appendix:


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(Technician Working)


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(Workers working in the Cottage Industry)


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(One of the

awareness/ promotional Billboard)


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(One of the examples of Off-grid solar energy system)