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IMPACTS OF 4P’s OF MARKETING ON SMALL SCALE INDUSTRIES

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									                        Table of Contents
Sl. No                     Chapter Name                     Page No.

  1.     Acknowledgement…………………………………………………………………           4

  2.     Abstract…………...…………………………………………………………………….         6

  3.     Introduction…………………………………………………………………………..         8

  4.     Vision and Values…………………………………………………………………..       28

  5.     Literature review…………………………………………………………………...      30

  6.     Objectives of the Study…………………………………………………………...   38

  7.     Description of the Project……………………………………………………….   40

  8.     Research Methodology…………………………………………………………..       42

  9.     Limitations of the Study…………………………………………………………     43

 10.     Findings…………………………………………………………………………………            45

 11.     Conclusion……………………………………………………………………………..          58

 12.     Recommendations…………………………………………………………………           60

 13.     Appendix ………………………………………………………………………………            62
 14.    References …………………………………………………………………………….                            64




                                    Abstract
In this project, I have to see all the impacts of 4p’s of marketing on the small
scale industries in India. The first census of Small Scale Industries (SSIs) in the
country was undertaken in 1972 and the second in 1987-88. The total number
of Small Scale Industries working units in the country is estimated to be
around 3 million. In terms of ownership, the vast majority of Small Scale
Industrial (SSI) units are propriety concerns while others are partnership and
private limited companies. The role of Small Scale Industries in the economy
can be seen from the fact that it now accounts for 95% of all industrial unit in
the country and 40% of total output. The industry groups which have
recorded high growth rates and a large share in total production of Small
Scale Industries are textile products, wood furniture, paper and printing and
metal products etc.

It is a well known fact that marketing mix is the combination of 4P i.e. product,
price, promotion and physical production. On basis of above variables it can
be said that marketing activities start with origin of a product and continues
after sale of product in shape of post sale services etc.

For the overall growth and development of the Indian economy, the
contribution of SSI is undoubtly significant. The small scale sector acts as an
instrument in absorbing excess labor existing mainly in the agricultural sector
of our economy. We are passing through the age of competition and to
compete with advanced economies, it is necessary to generate viable
employment on one hand and to have a simultaneous check on unwanted
increase in population on the other hand. Both of these objectives may be
achieved to great extent by the growth and development of SSIs in India.
There are changes in the type of products demanded, in the quality of
products and changes in fashion and tastes. There have also been changes in

                                        2
the mode of production and technology. To cope up with these changes, the
SSIs sector will have to undergo many internal and external transformations.
The research examines the role of SSI in the economic development by
showing the effects of the SSI on the unemployment rate, production, and
sales. The research concludes with policy recommendations to ensure the
sustained and competitive growth of small-scale industries. The results of the
study show that the growth of SSI in terms of employment, production and
sales has increased due to globalization and domestic liberalization. However,
it is still not as significant as planned. The SSI sector should be encouraged to
make a sustainable contribution to the national income, employment, and
exports. The development of small-scale industries (SSI) has been one of the
major planks on the economic development strategy. SSI plays a key role in
the industrialization and development of any country. This is because SSI
provides an immediate large scale employment, ensure a more equitable
distribution of national income, and facilitate an effective mobilization of
resources, capital, and skills which might otherwise remain underutilized.

It is possible to determine the concept of the SSI in accordance with two
measures: the size of the labor force employed; and the amount of invested
capital in this industry.




                                        3
                                 Introduction
The small-scale industries sector plays a vital role in the growth of the
country. It contributes almost 40% of the gross industrial value added in the
Indian economy. It has been estimated that a million Rs. of investment in fixed
assets in the small scale sector produces 4.62 million worth of goods or
services with an approximate value addition of ten percentage points.

The small-scale sector has grown rapidly over the years. The growth rates
during the various plan periods have been very impressive. The number of
small-scale units has increased from an estimated 0.87 million units in the
year 1980-81 to over 3 million in the year 2000.

From 1947 to 1994, General Agreement on Trade and Tariff (GATT) was the
forum for negotiating lower customs duty rates and other trade barriers. The
World Trade Organization (WTO) was established on 1st January 1995. When
the GATT came into WTO’s umbrella, it has annexes dealing with specific
sectors such as agriculture and textiles, and with specific issues such as State
Trading, Product Standards, Subsidies and Actions taken against dumping.
The WTO has 148 members, accounting for over 97% of world trade. Around
30 others are negotiating membership. WTO aims to develop the country’s
economy by encouraging its export among the member countries. Further, it
facilitates for availing new technologies from various countries at a lower
cost. In this connection, this paper focuses on the positive role played by the
WTO in the globalization scenario.

Marketing is a process, which identifies, anticipates and satisfies customer
needs efficiently and profitably. Modern marketing begins with the customer
and ends with the customer. The functions of marketing can be broadly
classified as buying, selling, assembling, transportation, and storage, financing,
grading and marketing information. There are a large number of decision

                                        4
areas in marketing. Most of these pertain to the four basic elements of
marketing mix, i.e., product, price, place and promotion. A marketer is always
in search of a well-knit marketing mix that has good consistency within its
elements.
Product decisions include decisions on the product attributes, packaging,
branding, etc. Pricing decisions are quite complex and have substantial
bearing on the profitability of the firm. Promotion encompasses decisions on
the product mix, personal selling and sales promotion. Place includes
decisions on marketing channel and physical distribution.

The role to be assigned to each one of them has to be determined depending
upon their utility in a particular situation. The right marketing mix is
important for any product to have a long cycle. The concept of PLC is a very
useful since it provides knowledge about the developments at various phases
of a product’s life. The entrepreneur can adopt suitable strategies if he knows
the pattern of profits and promotional efforts based on stages of product’s life.
Of course, all products do not strictly follow the movements suggested by the
PLC and there are great variations among different products with regard to
the length of various stages. Yet this concept is quite useful in developing
marketing strategies. In spite of great amount of heterogeneity in the market
place, groups of customers called market segments, can be identified which
share certain common characteristics of relevance for a small scale enterprise.
The identification of target market segments helps in tuning the marketing
efforts to the requirements of the customers.

Marketing, therefore, is of utmost importance for a small-scale unit. It enables
them to improve the quality of goods or services, generates employment, and
improves the standard of living and so on. Lack of brand image, lack of sales
force, product quality, credit sales, and local and limited market are the
common problems faced by small scale entrepreneurs. Consequently, they are
at a disadvantage with their large-scale counterparts. Recognizing the vital
role of small-scale industries in India’s economic development, the
government has reserved a number of items exclusively for the small scale
sector to overcome the marketing problems of small-scale industries.

                                        5
GROWTH OF SSI SECTOR IN INDIA

Small Scale Industries (SSIs) are the pillars of India’s industrial economy. The
SSIs’ chief aims are:

      To Remove the regional disparities
      To facilitate for the Equitable distribution of national income and wealth
      To earn the Return on Investment in shorter period
      To produce some consumption goods and essential commodities.



The Marketing Mix model (also known as the 4 P's) can be used by marketers
as a tool to assist in defining the marketing strategy. It is important to
understand that the Marketing Mix principles are controllable variables. The
Marketing Mix can be adjusted on a frequent basis to meet the changing needs
of the target group and the other dynamics of the marketing environment.

             Historically, the thinking was: a good
             product will sell itself. However there
             are no bad products anymore in today's
             highly competitive markets. Plus there
             are many laws giving customers the
                                                        Functionality; Quality;
             right to send back products that he
                                                        Appearance; Packaging;
Product      perceives as bad. Therefore the question
                                                        Brand;Service;
             on product has become: does the
                                                        Support; Warranty.
             organization create what its intended
             customers       want?      Define    the
             characteristics of your product or
             service that meets the needs of your
             customers.


                                        6
           How much are the intended customers
           willing to pay? Here we decide on a
           pricing strategy - do not let it just
           happen! Even if you decide not to ask
           (enough) money for a product or
           service, you must realize that this is a
           conscious decision and forms part of the List Price; Discounts;
Price      pricing strategy. Although competing on Financing; Leasing
           price is as old as mankind, the consumer Options; Allowances.
           is often still sensitive for price discounts
           and special offers. Price has also an
           irrational side: something that is
           expensive must be good. Permanently
           competing on price is for many
           companies not a very sensible approach.
                                                        Locations ; Logistics;
           Available at the right place, at the right
                                                        Channel members;
           time, in the right quantities? Some of the
                                                        Channel Motivation;
Place      recent major changes in business have
                                                        Market Coverage;
           come about by changing Place. Think of
                                                        Service Levels;
           the Internet and mobile telephones.
                                                        Internet; Mobile.
          (How) are the chosen target groups
          informed or educated about the
          organization and its products? This
          includes all the weapons in the
                                                        Advertising; Public
          marketing armory - advertising, selling,
                                                        Relations; Message;
Promotion sales promotions, Direct Marketing,
                                                        Direct Sales; Sales;
          Public Relations, etc. While the other
                                                        Media; Budget.
          three P's have lost much of their
          meanings in today's markets, Promotion
          has become the most important P to
          focus on.



                                      7
The function of the Marketing Mix is to help develop a package (mix) that will
not only satisfy the needs of the customers within the target markets, but
simultaneously to maximize the performance of the organization. There have
been many attempts to increase the number of P's from 4 to 5P's in the
Marketing Mix model. The most frequently mentioned one being People or
Personnel. Booms and Bitner have suggested a 7-Ps approach for services-
oriented companies.

The basic task of marketing is the delivery of products to consumers so that
their needs are fulfilled and organizational objectives are also achieved. This
involves several important decisions, e.g. deciding about the product or
products which should be offered for sale, price of the product, markets where
products may sell and the means of communication with the consumer for the
sale of the product. All these decisions form part of marketing-mix.

The process of marketing or distribution of goods requires particular
attention of management of business because production has no relevance
unless products are sold. Marketing mix, simply stated, is the process of
designing and integrating various elements of marketing in such a way as to
ensure the achievement of enterprise objectives. The elements of marketing
mix have been classified under four heads - product, price, place and
promotion. That is why marketing mix is said to be a combination of 4 P’s.
Decisions relating to the product include product designing, packaging and
labeling and varieties of the product. Decision on ‘Price’ is very important
because sales depend to a large extent on product pricing. Whether uniform
price will be charged or different prices will be charged for the same product
in different markets are examples of decision pertaining to the price of the
product. The third important element is ‘place’, which refers to decision
regarding the market where products will be offered for sale. ‘Promotion’
involves decisions bearing on the ways and means of increasing sales.
Different tools or methods may be adopted for this purpose. The relative
importance to be attached to the various methods is decided while
concentrating on the element of ‘promotion’ in marketing mix. Lastly, the
marketing manager has to take into account the impact of external factors like

                                       8
consumer behavior, competitors’ strategy, and Government policy on each
element of marketing mix.
In short, marketing mix involves decisions regarding products to the made
available, the price to be charged for the same and the incentives to be
provided to the consumers in the markets where products would be made
available for sale. These decisions are taken keeping in view the influence of
marketing forces outside the organization.

CHARACTERISTICS OF MARKETING MIX

(i) Marketing-mix is the crux of marketing process:
Marketing mix involves many crucial decisions relating to each element of the
mix. The impact of the mix would be the best when proper weightage is
assigned to each element and they are integrated so that the combined effect
leads to the best results.
(ii) Marketing mix has to be reviewed constantly in order to meet the
changing requirements:
The marketing manager is required to constantly review the mix and
conditions of the market, and make necessary changes in the marketing mix
according to changes in the conditions and complexion of the market.
(iii) Changes in external environment necessitate alterations in the mix:
Changes keep on taking place in the external environment. For many
industries, customer is the most fluctuating variable of environment.
Customers’ tastes and preferences change very fast, Brand loyalty and
purchasing power to change over a period of time. The marketing manager
has to carry out market analysis constantly to make necessary changes in the
marketing mix.
(iv)Changes taking place within the firm too necessitate changes in
marketing mix:
Changes within the firm may take place due to technological changes, or
changes in the product line, or changes in the size and scale of operation. Such
changes call for correspondent changes in the marketing mix.



                                       9
IMPACT OF MARKETING MIX ON SSI SECTOR

PRODUCT PRACTICES: Under product practices product development,
standardization, branding, geographical coverage and packaging are
considered and it is concluded that in small scale industrial sector, due to lack
of knowledge, resources etc., they are not capable to take advantages of these
types of practices to large extent. These SSI units are not using these
techniques properly. It is observed that which units take into consideration
product development practices, they only modify their product and develop
their new product without marketing survey and consulting technical experts.
As the same case in packaging, SSI units use packaging just as wrapper for
goods. They have lack of knowledge that packaging can do multifarious
activities or it can become effective promotion tool for them. So, it can be said
on the basis of analysis that if SSI units adopt proper product practices only
then they are capable to sustain and flourish in the national as well as
international market. Product refers to a physical product or a service or an
idea which a consumer needs and for which he is ready to pay. Physical
products include tangible goods like grocery items, garments etc. Services are
intangible products which are offered and purchased by consumers. Services
may involve also an innovative idea on any aspect of operation. Products is
the key element of any marketing mix. The decisions concerning product may
relate to

a) Product attributes
b) Branding
c) Packaging and labeling
d) Product support service
e) Product mix.

Product attributes refer to the quality, features and design of the product. A
product should serve the purpose for which it is made, in terms of utility and
quality. In a competitive market, products are differentiated on the basis of
certain features or design. For example, in the whirlpool washing machine,
                                       10
‘Agitate wash’ is the distinctive feature. Branding is a crucial decision. In a
competitive market, many products are sold by brand names. You might have
come across Indian brand names, like Maruti, HMT, Godrej, TATA. Amongst
foreign brand names Sony, Samsung are well known. Brand is an identification
of product. It plays an important role in creation of demand while branding a
product, it should be ensured that the name is simple, easy to read and
pronounce and if possible, it should have an appeal. Packaging and labeling of
product are quite important decisions Packaging means putting the products
in suitable containers or packets such as tin, plastic jar or card board box, etc.
Packaging should be such that product is protected and easily handled.
Sometimes, the container may have its own usefulness. For instance
Baidyanath chyawanprash (pack) is available in a plastic jar which can be
reused after consuming the chyawanprash. Certain polythene and plastic are
not considered good as packaging material from the environment point of
view. Their usage should be avoided. Labeling serves the purpose of indicating
the contents, weight or measure, instructions for use, price, name of the
producer, date of manufacture and expiry, etc. The information on the label is
essential for various reasons. For example, the date of expiry in case of
medicines, and date of manufacture in the case of eatables prevent the sale of
products which may prove harmful. Product support service is another
important element of product decision. It includes decision pertaining to the
type of service and availability of the service. Service may be by way of
installation service, training in product use, after sale service, credit and
financing service, etc. It should be decided whether services would be
provided free or against separate charge. Secondly, how the services would be
made available by the producers or agencies, are also important decisions to
be made particularly with respect to durable consumer goods like TV,
washing machines electric fans, etc. The markets in which products will be
offered are yet another important decision. A company may decide to a single
or a variety of products, add new products, or withdraw certain products.
Relevant decisions are made keeping in view the scope of marketing. Such
decisions are called product line or product mix decisions. Product life cycle is
a guiding factor while decisions are made.


                                       11
Product life cycle
Product life cycle denotes different stages through which the sale of any
product changes over a period of time. Generally, there are four stages in the
life of each product–introductory stage, growth stage, maturity stage, and
declining stage. When any product is introduced in the market, heavy
expenditure is incurred on advertising and other methods of increasing the
sale. This is known as introductory stage. During the growth period, sale of the
product increases fast and cost of production comes down due to increase in
scale of production. Profits earned increase substantially. During the maturity
stage, the growth in sale of the product slows down. Profits also start
declining. After the maturity stage there is a stage of decline, when the
product starts losing its acceptance. There is a pressure for price cut. Firms
generally start withdrawing the product after maturity stage. Some firms start
preparing for introducing alternative product at the end of growth stage.
Product life cycle, thus, helps in deciding about the product or products which
should be offered in different markets.

PRICING PRACTICES: What price is to be charged for a product is the most
critical decision to be taken by the firm producing it. Price is customarily
defined as in the amount of money for which unit of any given good or service
is exchanged. In fact, the pricing is the most important decisive area of
marketing. It is the only element of marketing mix of a firm which produces
revenue, while all other elements represent cost. It plays a distinctive role in
determining the marketing success of a firm. The price at which a product is
offered for sale in the market is affected by price setting. The relative
importance of each of these factors is brought out by both external and
internal factors. Price is the only factor which generates revenue while other
elements of marketing mix cause cost. It means price is reward for factor of
production in form of wages, rent, interest and profit. Responses obtained in
this regard show that exporting and non- exporting SSI units highly preferred
to target return to investment. They are not much conscious about market
share and target sales .So, this reason effect their sustainability of these units.
On the other hand, under pricing policies, a mix of uniform and differential

                                        12
policy should be adopted to get success. In addition to this, proper practices
should be adopted regarding factors influencing in determining price, types of
discount offered etc. So, that they are capable to get effective market share as
well as target returns of their efforts. Price is the amount charged for a
product or service. It is the consideration paid by consumers for the benefit of
using any product or service. Price fixation is an important aspect of
marketing. Pricing decisions of a company are affected by both internal as
well as external factors.

      Internal Factors                           External Factors
      – Cost of the product                      – Nature of market
      – Marketing objectives                     – Pricing/demand for product
      – Marketing mix strategy                   – Competitors' costs and
        decision                                   strategy price offers.
      – Organisation for pricing                 – Other environmental factors
                                                   like economy, government’s
                                                   policies, etc.
Internal factors:
Internal factors, affecting the price of a product, are many. Cost of the product
sets the floor. Any company would like to charge a price which covers the cost
of the product and a fair rate of return. Cost of the product means total cost
i.e., fixed plus variable costs. Fixed costs do not change with the change in
volume of production up to a certain level. Variable costs change
proportionately. In the period of recession, companies continue to supply at a
rate which covers variable costs and as much of costs as possible. The
Company’s marketing objective is yet another important variable for price
fixation. If it is survival, the company would stay in the market as long as it
covers variable costs fully and fixed costs partly. In case it is market
leadership, a low price will be fixed initially. After wards prices may be
enhanced. ‘Surf Excel’ is an example. At the time of introduction, its price was
just equal to other close substitutes, but today it has its own market. It is
bought by consumers without comparing its price with other substitutes. The
relative importance of pricing decision in marketing mix, also affects price


                                       13
fixation. Sometimes pricing decision is the control decision and all other
decisions are taken afterwards.
It may also happen that other variables of marketing mix like promotion
become more important. Price is fixed after considering other variables. Who
will fix the price is yet another important decision. In small organizations, top
management sets the price. In large companies, product line managers
perform this job. For industrial markets, sales managers are permitted to
negotiate prices within a specified range. These days many companies set up a
separate department to handle pricing decision.

External factors
Besides internal factors, external factors also influence the pricing decision of
a company. These factors are called environmental factors. Nature of demand,
competitors’ costs, price offers and government policy are very important
factors to be considered while fixing prices. The relationship between price
and demand should be analyzed properly. No company can ignore the costs,
prices and offers of substitute items from competitors. Economic factors, like
rate of interest, state of industry (boom or recession), inflation, etc. affect the
price-fixing decision. In case of certain products, e.g. products which fulfill
basic needs, government may impose price control. Thus, it would also affect
price of the product.
There may be two methods of price-fixation:
1. Cost-based approach: This is the simplest method of pricing. Generally
companies add a certain percentage of Profit, to the total cost of the product.
The total cost of the product is calculated after taking all types of costs into
consideration. While following this approach, no other factors e.g. prices of
substitute goods, nature of demand, etc. are considered.

2. Competition-based approach: In competitive market, cost-based approach
is not always practicable. The prices are determined on the basis of conditions
in the market. Companies may follow any one of the following three
approaches.
a) Price-in-line
b) Market-plus

                                        14
c) Market-minus
Price-in-line means prices fixed nearly equal to the prices of close alternatives.
Generally this happens under free market conditions i.e. when the number of
buyers and sellers is so large that they cannot affect the prices. Prices are
decided by the market forces of demand and supply. When companies charge
(fix up) a price which is more than the price of existing substitutes, it is called
market plus pricing. This approach is adopted when the quality of a product is
better, or it has a popular brand name, or its packaging is attractive and
useful. Consumers will pay more only when they find distinctive differences in
the product and its substitutes. Sometimes business enterprises get ready to
supply products at a price lower than the market price. It may be adopted to
grab a larger market share or to make a newly introduced product more
popular. This approach is called market-minus approach. Companies having
shorter channels of distributions or direct selling facilities can afford to fix a
price lower than the prevailing market price.

PROMOTION PRACTICES: Promotion always plays a vital role in the
marketing efforts of a firm. Generally, there are four elements of promotion -
personal selling, advertising, sales promotion and publicity. One objective of
this chapter is to identify the approaches to determination of promotion
budget. Another objective is to ascertain the size of promotion expenditure of
small scale units. Promotion budget depends on various factors such as
targeted sales, increasing sales of low selling items, for developing new
markets and obtaining dealers etc. Sample response indicates that sales of low
selling items are largely considerable factor to finalize the promotion budget
both by exporting and non-exporting units. On the other hand, for developing
a new market and for producing a new item, there is a need of promotional
activities to push their sales. So, these are also widely considered for
promotion budget. It is also brought out that a targeted sale is equally
considered both by exporting and non-exporting units for promotion budget.
On the whole, it can be said that there is no significant difference in practices
of exporting and non-exporting units to finalize the promotion budget. In
modern days, the consumer is the king of the society .Various efforts are done
to attract them for purchasing the product. The tools which influence the

                                        15
choice of consumer are considered under promotion practices .Promotion
practices include –advertising, publicity, personal selling and sales promotion
activities. Due to their size and resources, maximum SSI units prefer
advertising and sales promotion activities. Under their promotion mix SSIs
should launch a effective advertising campaign and timely sales promotion.
Only then, they are capable to create and sustain the demand for their
product.

Promotion refers to using methods of communication with two objectives:
(i) Informing the existing and potential consumers about a product, and
(ii) To persuade consumers to buy the product.
It is an important element of marketing mix. In the absence of communication,
consumers may not be aware of the product and its potential to satisfy their
needs and desires. Various tools of communication form part of promotion
mix. Companies must decide which tool(s) should be used for larger sales and
in what proportion. The tools should be combined. These decisions are known
as promotion-mix decisions. There are four components of promotion-mix i.e.,
advertising, personal selling, sales promotion and public relations. Thus,
promotion mix is a company’s total communication program which consists of
different blends of its components and which is used to achieve the company’s
marketing objectives.

Tools of Promotion-mix
Advertising, personal selling, sales promotion and publicity are the major
tools. The marketing manager must recognize the characteristics of each tool
and costs involved while deciding on the promotion-mix.
    Advertising: Advertising is an impersonal form of communication for
       which the seller pays in order to promote a physical product or service.
       It may be in print form as in newspapers and magazines, or in audio
       form as on the radio and other similar methods, or in audio-visual forms
       as on the Television, cinema screen, etc. The merits of advertising is that
       it reaches a larger number of people, the message can be repeated, its
       cost is not high, and with the development of art and computer graphics,
       simple statements can be transformed into forceful messages. The other

                                       16
  side of advertising is that it does not provide any feedback, it is not as
  forceful as personal selling, it is not flexible, and good advertisements
  cost a lot.

 Personal selling: Personal selling is a personal communication with one
  or more prospective buyers for the purpose of selling a product or
  service. These days, personal selling is considered to be the most
  effective tool because of various characteristics which are listed below:
     o It involves personal interaction; hence feedback is received
         immediately;
     o It is quite flexible; salesman can adjust communication according
         to the level of customer’s under-standing.
     o It is more persuasive; buyers can be convinced about the utility of
         the product;
     o Impressive salesman leaves an impression on the prospective
         buyer; it may increase sales in the future.

  Personal selling suffers from a few drawbacks too. It is the most
  expensive tool of promotion. Secondly, it requires too much dependence
  on sales force.

 Sales Promotion: Sales promotion means the use of short-term
  incentives which are designed to encourage immediate purchase of a
  product or service by the buyer. It may include offer of discounts, free
  gifts, free sample, coupons, demonstration, store display, etc. One tooth
  brush free with one 100gm. Close-up dental cream is an example of
  sales promotion. Generally this tool supplements the efforts made
  through personal selling and advertisement.

  Most of the sales promotion activities come in the form of some
  incentive for the buyer; hence sales generally increase immediately. Big
  business enterprises use sales promotion tools while introducing a new
  product. It adds to the effectiveness of total promotional efforts of a
  company. Sales promotion has certain demerits e.g. it does not leave a

                                   17
     lasting effect. Some customers also feel that sales promotion schemes
     are launched to clear old stocks.

   Publicity: Publicity takes place when a favorable presentation is made
    through mass media about a product or service. People believe more on
    such news than in advertising. It covers people who do not entertain
    personal selling and sales promotion approaches. It is a non-paid form
    of communication but sometimes it is not regarded as a promotional
    tool within the reach of a company. Very few products or services are
    covered by publicity. Packaging is also considered as a powerful sales
    promotion tool these days. It immediately attracts the buyer and makes
    him buy the product. This tool has produced good results in case of
    consumer goods. To some extent, packaging has replaced the counter
    salesman. You have now learnt about the various tools of promotion.
    Each tool has certain merits and demerits. It is very important that
    promotion mix is so devised that it achieves marketing objectives
    optimally. It is not an easy task. There are no hard and fast rules of
    promotion mix. Hence every factor should be paid due attention while
    deciding on the promotion mix.

Factors governing Promotion-mix

1. Nature of product: Different types of products require different promotion
mix. In case of consumer goods, advertisement is considered to be the most
important because the goods are non-technical and produced on a large scale.
But for industrial goods personal selling is regarded as the most important
tool because the products are technical in nature, costly and persuasion is
considered essential for their sale.
2. Type of the market: If the number of customers is quite large and they are
spread over a vast area, advertisement is more helpful because it can reach
people everywhere. However if number of customers is not very large and
they are concentrated geographically, personal selling and sales promotion
may be more effective.


                                     18
3. Stage of the product life cycle: The promotional mix depends upon the stage
of the product in product life cycle. During introduction, heavy expenditure is
incurred on advertisement followed by personal selling and sales promotion.
During the growth stage, customers are aware of the benefits of product.
Hence advertisement along with personal selling will be more effective. At the
maturity stage, competition is more intense. Sales promotion becomes the
most important tool to boost sales.
4.Budget: Funds available for promotion also decide promotion mix, e.g.
advertisement is a costly tool. If sufficient funds are not available this tool may
not be adopted. Personal selling involves continuous spending. Thus, budget is
a deciding factor for promotion-mix.
5. Push vs. Pull Strategy: When the firm pushes the product to the middlemen
they in turn push it to the consumers, it is known as ‘push’ strategy. In this
case, personal selling or display should be more effective. Pull strategy refers
to the policy of a company to strive to build up consumer demand without
recourse to middlemen. Generally advertising is considered more important
in case of pull strategy. To sum up, it may be said that all promotional tools
are complementary and not competitive. The degree of emphasis on each tool
will differ depending upon the influence of certain factors. A proper
combination of promotional tools should be designed to attain better results.

PLACE PRACTICES: Place is another important element of marketing mix.
Once the goods are manufactured, packaged, priced and promoted, they must
be made available to the consumers. Activities related to placing the products
are covered under this element of marketing-mix. It consists of decisions
relating to channels of distribution and physical distribution. Channels of
distribution refer to the individuals and organizations which facilitate moving
the goods from manufactures to consumers. It is important that regular and
smooth flow of goods is maintained so that products are not spoiled and
supplies are not delayed. To ensure this, various facilitating services need to
be arranged like transportation, warehousing, inventory control, and order
processing. These are known as components of physical distribution. Let us
now study the two sub-elements of ‘place’-


                                        19
(A) Channels of distribution: Channel of distribution denotes the
intermediaries involved in the process whereby a product passes from the
manufacturer to consumers. It is very important for the producers to involve
middlemen in order to reach consumers. Middlemen reduce the problems of
both producers and consumers. Secondly, middlemen help in distributing the
products over a large area. Middlemen also supply useful market information
to the producer for improving the product. Involvement of middlemen adds to
the convenience of consumers because they are able to lay many items from a
single store. Some people feel that by involving more middlemen in the
process of distribution, the final price of products is considerably raised which
is ultimately paid by the consumer. Therefore the number of middlemen
involved should be limited, if at all necessary: There can be various levels of
channel. It is for the producer to decide which level would suit the sale of his
product.
Number of Channel Levels
Distribution channel starts from the producer and ends with the consumer.
Each layer of middleman that performs some work in bringing the product
closer to the final layer is a channel level. The diagram given below shows the
various channel levels.
Channel 1: Manufacturer Consumer
Channel 2: Manufacturer Retailer Consumer
Channel 3: Manufacturer Wholesaler Retailer Consumer
Channel 4: Manufacturer Wholesalers Jobbers Retailer Consumer

Channel 1 is called a direct marketing channel. It has no intermediary
level. Producers sell their products directly to the consumers. Channel 2
includes one intermediary which is generally a retailer. Retailers buy products
directly from the manufacture and sell these to the consumers. Generally
electronic goods like televisions, computers, are sold through this channel
level. Channel 3 consists of two levels, typically a wholesaler and a retailer.
This channel is often used by small manufacturers of food items, and other
products. Channel 4 contains three middlemen levels. Jobbers usually come
between wholesalers and retailers. They buy from wholesaler and sell to small
retailers who generally are not served by wholesalers. There can be even

                                       20
more levels in distribution channel but from producer’s point of view, greater
number of levels means less control and greater complexity of channel.
Choice of channel of distribution
There are a number of factors which govern the choice regarding channel of
distribution. These are listed below:-
(i) Nature of product: For perishable goods, shorter channel is preferred
whereas for durable goods channel 3 is more popular. If goods are made to
order, direct selling may be effected. For technical products and costly
products, manufacturers generally go for direct selling through agents
specially hired for this purpose.
(ii) Nature of market: If the market is concentrated and not scattered,
producers may go for direct selling but for scattered market, middlemen are
involved. If there are more buyers, there may be a need to include more
middlemen. For consumer product market retailers are essential but in case of
industrial products a shorter channel is preferred, hence middlemen may be
eliminated.
(iii) Middlemen: Middlemen who can provide desired marketing services are
given preference. The availability of middlemen also affect channel decision.
The middlemen must be co-operative and honest. The channel which
generates largest sales volume at lower unit cost will be given priority.
(iv) Size and Policy of the Company: There are many factors related to
company which influence channel decision. A big size company with broader
product line can afford to have shorter channel. New companies heavily rely
on middlemen. A company with sufficient financial resources can spend
heavily on advertisement and its own outlets. Hence need for middleman is
reduced. Companies desiring efficient control over channel members will
always prefer shorter channel.
(v) Marketing Environment: During recession or depression shorter channels
are preferred because of being less costly. In times of prosperity a wide choice
is available. Technological inventions also have an impact e.g., distribution of
perishable goods to distant places has become possible due to cold storage
facilities in warehousing and transporting. Such facilities have expanded the
role of intermediaries.


                                       21
(vi) Competitors: Channels of distribution used by competitors also influence
this decision. Some organization may like to follow the same chains as used by
competitors. On the other hand, some organization may avoid channels
already customary. They may have their own decisions. Thus after visualizing
the impact of the factors mentioned above a company adopts the best channel
from among the available alternatives.

(B) Physical distribution: Physical distribution comprises all those activities
which deliver customer satisfaction by supplying right type of products at
right place and at right time regularly. Economical and satisfactory customer
service is the primary goal of physical distribution. Providing the right type of
goal at right place and at right time is the ultimate goal of any marketing
department. These goals may be conflicting, sometimes, e.g., for meeting
sudden and unforeseen demand for goods, maintenance of large inventory is
suggested but this involves cost as well as risk. This means that a proper
balance between the cost and service should be achieved.
Components of physical distribution:-
(i) Order Processing: Physical distribution begins with customers’ order. Both
the company and customer are benefitted if order processing is carried out
quickly and accurately. These days computers are used which establish a link
between retailers and producers. Producers keep a watch on the stock
position at retailers’ place retailers may also place orders through computer.
This facility speeds up the process.
(ii) Warehousing: Every company must store goods to maintain a proper flow.
Storage facilities are important because production and consumption cycles
generally do not match. Companies need to decide the number, space and
location of warehouses. The cost of these should be in balance with customer
service. Companies may own warehouses or take them on rent.
(iii) Inventory: Inventory level also affects customer satisfaction. Marketers
would like that company having enough stock to fulfill all customers’ order
immediately. But it involves heavy cost. Companies should, therefore,
carefully plan when to order and how much to order.
(iv) Transportation: Transportation has infact, facilitated the physical
distribution of goods and services over a larger area. Modes of transportation

                                       22
may include road, rail, water, air, etc. The choice of mode of transport affects
the pricing and condition of goods. Hence this is an important decision and
requires lot of thinking. It is a well known fact that marketing mix is the
combination of 4 P i.e. product, price, promotion and physical production. On
basis of above variables it can be said that marketing activities start with
origin of a product and continues after sale of product in shape of post sale
services.

For the overall growth and development of the Indian economy, the
contribution of SSI is undoubtly significant. The small scale sector acts as an
instrument in absorbing excess labor existing mainly in the agricultural sector
of our economy. We are passing through the age of competition and to
compete with advanced economies, it is necessary to generate viable
employment on one hand and to have a simultaneous check on unwanted
increase in population on the other hand. Both of these objectives may be
achieved to great extent by the growth and development of SSIs in all states of
Indian Union.

Since market performance of a product is determined to a large extent by the
interest and involvement of the middlemen in pushing through the product, it
is necessary that the middlemen engaged in the distribution are motivated.
Among the various types of facilities and incentives which are extended by
manufacturer to attract the right type of middlemen into the job- easy credit
terms and replacement of defective items are the basic incentives which are
similarly provided by exporting as well as non-exporting units. In addition to
these motivations, both exporting and non-exporting units are largely
preferred to special discount, cooperative advertising and free gifts to get
success in competitive era.




                                       23
                           Vision And Values
Our Vision

       To promote and protect the Small Scale Industries. To take all steps
        to protect and promote the general interests of the persons engaged
        in small scale industries. To consider and formulate opinions upon
        all matters connected with the Small Scale Industries.
       To bring justice & equality in society through people contered &
        process oriented activities and efforts.
       To collect, classify and Circulate statistics and other information
        related to commercial interests in general and small scale industries
        in particular.
       To promote beneficial and other measures relating to the small scale
        industries and thus obtain by all acknowledged means the redress as
        far as possible of grievances of the industrialists in small scale
        industries.
       To maintain a Library of books and publications and literature on
        small scale industries, so as to diffuse commercial information and
        knowledge amongst the members of the Association.

 Our Mission

     The Small Scale industries serve to identify, analyze and provide
      solutions for various issues and problems faced by the industries
      through continuous and regular interactions.
     Organize programs for content updating and training needs through
      seminars, workshops and meetings by appropriate agencies.
     It believes in participatory approach in all their endeavors’ following
      right business ethics and standards with a vision of leading the
      Association as Role Model to other similar organizations and
      striving always for continuous improvement.




                                      24
    To launch innovative projects & activities for various categories of
     target communities, this shall be a guiding milestone in poverty
     eradication.
    To implement time bound projects and programs.
    To organize capacity building programs & activities for target
     communities to facilitate bring change in their lives.
    To avail financial and technical support to conduct need based trainings,
     workshops and other activities for the youth, women, children,
     landless laborers and other vulnerable communities of the area.
    To undertake innovative projects to deal with the major
     livelihood issues of target communities through the income
     generation/employment generation community farming, non-farm
     activities etc.
    To strengthen and promote People's Organizations, the Institutes and
     the enterprises for the sustenance of the activities initiated.

Our Values
By its less capital intensive and high labor absorption nature, SSI sector has
made significant contributions to employment generation and also to rural
industrialization. This sector is ideally suited to build on the strengths of our
traditional skills and knowledge, by infusion of technologies, capital and
innovative marketing practices. This is the opportune time to set up projects
in the small-scale sector. This expectation is based on an essential feature of
the Indian industry and the demand structures. The diversity in production
systems and demand structures will ensure long term co-existence of many
layers of demand for consumer products / technologies / processes. There
will be flourishing and well grounded markets for the same product/process,
differentiated by quality, value added and sophistication. This characteristic of
the Indian economy will allow complementary existence for various diverse
types of units. The promotional and protective policies of the Govt. have
ensured the presence of this sector in an astonishing range of products,
particularly in consumer goods. Small scale industry has performed
exceedingly well and enabled our country to achieve a wide measure of
industrial growth and diversification.

                                       25
                      LITERATURE REVIEW

The term "marketing mix" became popularized after Neil H. Borden published
his 1964 article, The Concept of the Marketing Mix. Borden began using the
term in his teaching in the late 1940's after James Culliton had described the
marketing manager as a "mixer of ingredients". The ingredients in Borden's
marketing mix included product planning, pricing, branding, distribution
channels, personal selling, advertising, promotions, packaging, display,
servicing, physical handling, and fact finding and analysis.
In order to cater to the requirements of identified market segment, an
entrepreneur has to develop an appropriate marketing mix. Marketing mix is
a systematic and balanced combination of the four inputs which constitute the
core of a company’s marketing system – the product, the price structure, the
promotional activities and the place or distribution system”. These are
popularly known as “Four P’s” of marketing. An appropriate combination of
these four variables will help to influence demand. The goal is to make
decisions that center the four P's on the customers in the target market in
order to create perceived value and generate a positive response. The
problem facing small firms is that they sometimes do not feel themselves
capable of controlling each of the four variables in order to influence the
demand.

                               Marketing Mix
     Product           Price            Place              Promotion
     Features          List Price       Location           Advertising
     Design            Discounts        Transport          Personal Selling
     Variety           Allowances       Channels           Sales Promotion
     Quality           Payment Period Coverage             Publicity
     Brand Name        Credit Terms     Delivery
     Packaging                          Availability
     Sizes                              Inventory
     Services
     Warranties




                                      26
A brief description of the four elements of marketing mix is as follows:

1. Product: The first element of marketing mix is product. A Product is
anything that can be offered to a market for attention, acquisition, use, or
consumption that might satisfy a want or need. Products include physical
objects, services, events, persons, places, ideas or combination of these. This
element involves decisions concerning product line, quality, design, brand
name, label, after sales services, warranties, product range, etc. An
appropriate combination of features and benefits by the small firm will
provide the product with unique selling proposition. This will enhance the
customer loyalty in favor of its products. Products and services are broadly
classified into consumer products and industrial products. Consumer
products are bought for final consumption; whereas Industrial products are
bought by individuals and organizations for further processing or for use in
conducting business.
Other ways of classifying products are as follows:
a) Convenience products: These are consumer products that the customer
buys very frequently, without much deliberation. They are low priced of low
value and are widely available at many outlets. They may be further
subdivided as:
          o Staple Products: Items like milk, bread, butter etc. which the
            family consumes regularly. Once in the beginning the decision is
            programmed and it is usually carried on without change.
          o Impulse Products: Purchase of these is unplanned and impulsive.
            Usually when the consumer is buying other products, he buys
            these spontaneously for e.g. Magazines, toffees and chocolates.
            Usually these products are located where they can be easily
            noticed.
          o Emergency products: Purchase of these products is done in an
            emergency as a result of urgent and compelling needs. Often a
            consumer pays more for these. For example while traveling if
            someone has forgotten his toothbrush or shaving kit; he will buy
            it at the available price.



                                       27
b) Shopping products: These are less frequently purchased and the customer
carefully checks suitability, quality, price and style. He spends much more
time and effort in gathering information and making comparisons. E.g.
furniture, clothing and used cars.

c) Specialty products: These are consumer goods with unique characteristics /
brand identification for which a significant group of buyers is willing to make
a special purchase effort. For example, Mitsubishi Lancer, Ray ban glasses.

d) Unsought product: These are products that potential buyers do not know
exist or do not yet want .For example Life Insurance, a Lawyers services in
contesting a Will.

The above product decisions are very important to ensure the sale of
products. A product has both tangible and intangible components. While
buying a product, the customer does not merely look for the physical product,
but a bundle of satisfaction. Thus the impact that any product has upon a
buyer goes well beyond its obvious characteristics. There is a psychological
dimension to all customer purchases; what a customer thinks about a product
is influenced by far more than the product itself. For example, the buyer of an
air conditioner is not purchasing cooling machine only. He looks for attractive
color and design, durability, low noise, quick cooling, etc. These influencing
factors must be considered by the small firms to meet the requirements of
different kinds of customers.

2. Price: The second element is the price, which affects the volume of sales. It
is one of the most difficult tasks of the marketing manager to fix the right
price. The variables that significantly influence the price of a product are:
demand of the product, cost, competition and government regulation. The
product mix includes: determination of unit price of the product, pricing
policies and strategies, discounts and level of margins, credit policy, terms of
delivery, payment, etc. Pricing decisions have direct influence on the sales
volume and profits of the firm. Price, therefore, is an important element of the


                                       28
marketing mix. Right price can be determined through pricing research and by
adopting test-marketing techniques.
The pricing policies mainly followed by the small firms are:
a) Competitive pricing: This method is used when the market is highly
competitive and the product is not differentiated significantly from the
competitor’s products.

b) Skimming-the-cream pricing: Under this pricing policy, higher prices are
charged during the initial stages of the introduction of a new product. The aim
is to recover the initial investment quickly. This policy is quite effective when
the demand for a product is likely to be more inelastic with respect to price in
its early stages; to segment the market into segments that differ in price
elasticity of demand and to restrict the demand to a level, which a firm can
easily meet.

c) Penetration pricing: Under this policy, prices are fixed below the
competitive level to obtain a larger share of the market. Penetration pricing is
likely to be more successful when the product has a highly elastic demand; the
production is carried out on a large scale to achieve low cost of production per
unit; and there is strong competition in the market.

3. Promotion: Promotion refers to the various activities undertaken by the
enterprise to communicate and promote its products to the target market. The
different methods of promoting a product are through advertisement,
personal selling, sales promotion and publicity

4. Place or Physical Distribution: This is another key marketing mix tool,
which stands for the various activities the company undertakes to make the
product available to target customers. Place mix or delivery mix is the
physical distribution of products at the right time and at the right place. It
refers to finding out the best means of selling, sources of selling (wholesaler,
retailers, and agents), inventory control, storage facility, location,
warehousing, transportation, etc. This includes decisions about the channels
of distribution, which make the product available to target customers at the

                                       29
right time, at the right place and at the right price. By selecting wrong
distribution channels or by using the ones it has traditionally used, a small
firm could be depriving it of new market opportunities.
In a situation where a small firm has only one primary product, the general
rise and fall of sales will lead to a rise and fall of the firm, unless the firm
learns to consistently adjust its marketing mix to match consumer demand.
We can take an example of “MAGGIE KISSAN”.

 I.   PRODUCT
         Available in different variants: Maggie Ketchup Maggie Hot &
          Sweet Sauce, Maggie Masala Chilli Sauce, Maggie Chilli Garlic
          Sauce, Maggie Tamarind Sauce, Maggie Tomato Sauce (Without
          onion & garlic), Maggie Tomato Ketchup (With onion & garlic),
          tomato chatpat, Teekha masala, Tomato pudina.
         The product is bright red in color.
         The thickness is less as compared to Kissan.

II.   PROMOTION
         They promote their product very effectively through television.
         They have applied the strategy of brand extension.
         They also sponsor various cookery shows to promote alternate
          usage of products.
         They also use strategy of free product samples to promote it.
         Celebrity endorsements. Eg. Javed Jafferi
         Less promoted as compared to Maggie.
         The utter confusion regarding the long-term strategy for Kissan
          brand was visible through the experiments that were conducted
          on this brand by Hll.
         So all through the period 2001-2005, Kissan was in a sticky
          wicket. But now according to reports, the brand mandarins of
          HUL is now clear about Kissan as a brand for processed food like
          Jams , ketchups.



                                       30
That change is visible in the recent campaign of Kissan which takes a unique
view of Ketchup. Taking the tagline “Aao banaye pakode behtar" translated to
"Making Pakode taste better". In these series of ads, the brand plays a second
fiddle to the main snack. The brand takes the positioning of a "Great
Accompaniment".

III.   PLACE
          The distribution network is well spread as it is easily available in
           all kirana stores, retail store etc.

IV.    PRICE
          Its Maggie Rich Tomatoes is priced at Rs 90 (1 kg bottle with 20%
            free offer) and Rs 26 (200 gm bottle).
          Its Kissan Ketchup and Kissan Sauce (no onion no garlic) are
            priced at Rs 91 (1 kg bottle), Rs 49 (500 gm bottle) and Rs 60
            (600 gm squeezy pack), while Kissan Tomchi is priced at Rs 53
            (500 gm).



ABOUT SMALL SCALE INDUSTRY
Since the time of independence, the small-scale sector in India has been a
major contributor to country’s Gross Domestic Product (GDP). This traditional
sector in India is considered to have huge growth prospect with its wide range
of products. With 40 percent share in total industrial output and 35 percent
share in exports, the small-scale industrial sector in India is acting as Engine
of Growth in the new millennium.

The definition for small-scale industrial undertakings has changed over time.
Initially they were classified into two categories- those using power with less
than 50 employees and those not using power with the employee strength
being more than 50 but less than 100. However the capital resources invested
on plant and machinery buildings have been the primary criteria to
differentiate the small-scale industries from the large and medium scale
industries. An industrial unit can be categorized as a small- scale unit if it

                                       31
fulfills the capital investment limit fixed by the Government of India for the
small-scale sector.

The SSI sector might witness changes in the following areas:

      Concept and Classification of SSI
      Role of Government as a Facilitator and Present Position of SSI
      Concept of Market and Marketing Challenges
      Changes in Technology in Use
      Changes in the Regulatory Environment

Small-Scale Industries (SSI) are production units with a capital investment of
up to Rs. 1 Crore. Small-Scale industries can be categorize by :

   - Cottage Industries
   - Agro-based industries
   - Small Industries

Small Scale Industries may sound small but actually plays a very important
part in the overall growth of an economy. Small Scale Industries can be
characterized by the unique feature of labor intensiveness. The total number
of people employed in this industry has been calculated to be near about one
crore and ninety lakhs in India, the main proponents of Small scale industries.
The importance of this industry increases manifold due to the immense
employment generating potential. The countries which are characterized by
acute unemployment problem especially put emphasis on the model of Small
Scale Industries. It has been observed that India along with the countries in
the Indian continent have gone long strides in this field.

Why SSI sector needs marketing support?

Of late marketing management has been given much importance, especially by
the small scale sector. This could be attributed to the diverse marketing
situation existing now. In a competitive environment small scale industries
face many marketing problems. Some of the factors which could contribute to



                                       32
the marketing problem of the small scale industry could be identified as
follows:

    Increasing competition from within the small scale sector as well as
     large industries with established brand names and marketing set up.
    Consumer awareness, even to rural and semi urban areas for quality
     goods.
    The need to set up distribution networks for reaching out widely
     dispersed markets.
    Inability of SSI units to exploit the export markets.

Considerable difficulty is being experienced by small scale industrial units in
marketing their products. It requires marketing support from government
and other agencies.

Marketing, therefore, is of utmost importance for a small-scale unit. It enables
them to improve the quality of goods or services, generates employment, and
improves the standard of living and so on. Lack of brand image, lack of sales
force, product quality, credit sales, and local and limited market are the
common problems faced by small scale entrepreneurs. Consequently, they are
at a disadvantage with their large-scale counterparts. Recognizing the vital
role of small-scale industries in India’s economic development, the
government has reserved a number of items exclusively for the small scale
sector to overcome the marketing problems of small-scale industries.

Generally, the SSI plays an important role in achieving social and economic
development. There is an increase in the productivity of labor in the SSI,
which indicates that the training programs directed must be increased.
Marketing has been identified as one of the major problem areas of the small
scale industries and it has been ranked as the second most important reason
for the closure of small scale businesses. Accordingly, small firms will not be
able to penetrate markets, national or international, even if marketing support
is given by government agencies.



                                       33
                         Objectives of the Study
In this project, our main focus was to analyze Small Scale Industries taking
into consideration the 4 P’s of the marketing mix.

    To study the marketing mix i.e. 4P’s of marketing: Product, Place, Price
     and Promotion.
    To study the Small Scale Industries and its applications with marketing
     mix.
    To study the impact of marketing mix on SSI.
    To analyze the customer preferences related to the marketing mix
     which in turn affects the SSI either positively or negatively.
    To analyze the problems faced by this sector.
    To study the importance of small scale industries and the 4P’s of
     marketing.
    The focus is concentrated on the various variables and asked the
     relevant questions from the owners of small scale industries.
    To analyze various product attributes and its management in the
     current scenario.
    To study the entire distribution mix of the product line.
    To critically comment on the pricing strategy adopted by the SSI’s.
    Lastly our study will also focus on the various promotional aspect of the
     brand in lieu of ketchup and also promotional mix of the product line.

All these objective were to analyze the performance of a particular product
line of a brand followed by the suggestions which have been given in order to
improve their performance in the future and also learned various useful
aspects which they have devised and implemented that has bettered their
performance.

Since marketing is consumer oriented, it has a positive impact on the business
firms1. It enables the entrepreneurs to improve the quality of their goods and
services.



                                      34
Marketing helps in improving the standard of living of the people by offering a
wide variety of goods and services with freedom of choice, and by treating the
customer as the most important person.

Marketing generates employment both in production and in distribution
areas. Since a business firm generates revenue and earns profits by carrying
out marketing functions, it will engage in exploiting more and more economic
resources of the country to earn more profits.

A large scale business can have its own formal marketing network, media
campaigns, and sales force, but a small unit may have to depend totally on
personal efforts and resources, making it informal and flexible.

Marketing makes or breaks a small enterprise. An enterprise grows, stagnates,
or perishes with the success or failure, as the case may be, of marketing.
“Nirma” is an appropriate example of the success of small scale enterprise.




                                      35
                        Description of the Project

This project is about the impact of 4P’s of marketing on Small Scale Industries.
It relates to the importance of 4P’s on SSI. Marketing management has been
given much importance, especially by the small scale sector. This could be
attributed to the diverse marketing situation existing now. In a competitive
environment small scale industries face many marketing problems. Some of
the factors which could contribute to the marketing problem of the small scale
industry could be identified as follows:

a) Increasing competition from within the small scale sector as well as large
   industries with established brand names and marketing set up.
b) Consumer awareness, even to rural and semi urban areas for quality goods.
c) The need to set up distribution networks for reaching out widely dispersed
   markets.
d) Inability of SSI units to exploit the export markets.

Considerable difficulty is being experienced by small scale industrial units in
marketing their products. It requires marketing support from government
and other agencies.

It is a well known fact that marketing mix is the combination of 4 P i.e.
product, price, promotion and physical production. On basis of above
variables it can be said that marketing activities start with origin of a product
and continues after sale of product in shape of post sale services etc. The small
scale sector acts as an instrument in absorbing excess labor existing mainly in
the agricultural sector of our economy. We are passing through the age of
competition and to compete with advanced economies, it is necessary to
generate viable employment on one hand and to have a simultaneous check
on unwanted increase in population on the other hand. Both of these
objectives may be achieved to great extent by the growth and development of
SSIs in all states of Indian Union.



                                       36
Interpretation of Problems faced by SSI units show that Finance problem is
largely faced by non-exporting units while exporting units have to face the
problems like executive inefficiency, technological lag, problems relating to
export etc. In addition to this, terms of payment is also a major problem which
is equally faced by both exporting and non-exporting units.

Since market performance of a product is determined to a large extent by the
interest and involvement of the middlemen in pushing through the product, it
is necessary that the middlemen engaged in the distribution are motivated.
Among the various types of facilities and incentives which are extended by
manufacturer to attract the right type of middlemen into the job- easy credit
terms and replacement of defective items are the basic incentives which are
similarly provided by exporting as well as non-exporting units. In addition to
these motivations, both exporting and non-exporting units are largely
preferred to special discount, cooperative advertising and free gifts to get
success in competitive era.

Marketing-mix is the combination of various elements of marketing which
aims at consumer satisfaction and achievement of organizational objectives.
There are four element of marketing mix viz product, price, promotion and
place. These are also called 4P’s of marketing mix.

Under the element ‘product’ decisions need to be taken regarding attributes of
product, packaging and labeling, product line, product support service etc. The
‘price’ element deals with the factors related to price fixation, methods of
price fixation, etc. Promotion is the third element of marketing mix.
Promotion-mix refers to mixing of different tools through which sales may be
increased. The element of place has two sub elements- channels of
distribution and physical distribution. Channel of distribution is the path
along which a product passes from manufacturer to consumers. Physical
distribution comprises all activities which deliver customer satisfaction by
supplying right type of goods at right place and at right time. All the elements
of marketing mix are interrelated and mutually inter-dependent.



                                       37
                         Research Methodology

The Research is based on the following methods:

1.   SURVEY METHODS:
     The survey was done on the basis of primary data and secondary data:
     The primary data collection would be done through:

                Face to face interaction with the customers.
                With the help of the questionnaire.
                Interaction with the existing clients of the company.

     The secondary data sources include:

                Journals
                Magazines
                Newspaper
                Internet
                Annual reports of the company


2.   QUESTIONNAIRE DESIGN:
     In designing the questionnaire we paid particular attention to the
     content and wording of the questions. There were some questions
     which could be easily framed. The questionnaire was meticulously
     prepared by identifying the various variables i.e. product, price, place,
     promotion. The same scale of yes/no and very important, moderately
     important and least important was used to make the respondents
     comfortable.




                                      38
                        Limitations of the study
The study consists of market survey, interaction with the prospective
customers and secondary sources (Internet), it is prone to following errors.

         As being new to Dehradun, there is lack of sufficient knowledge of
          Dehradun for my project proposal.

         Money is very important for the project proposal, and without
          money cannot be done anything regarding the project.

         Time is very important for the project proposal, because it is very
          difficult to manage time for project and as well as company and its
          works.

         In Dehradun, resources are very limited, that is also a problem for
          the project.

If any respondent gives wrong information that will affect on the project and
cannot reach on exact figure.

All types of business enterprises face marketing problems, but these problems
are more severe in case of small scale units because of lack of knowledge,
adequate funds and lack of experience. Some of the marketing problems
commonly faced by the small scale entrepreneurs in India are:
a. Competition from large scale sector: Because of scarcity of resources,
small
entrepreneurs usually use inferior technology. As a result their products are
not standardized. The obsolete technology used by them gets translated into
inferior quality of products.
b. Lack of marketing knowledge: Most of the small scale entrepreneurs are
not highly educated or professionally qualified to have knowledge of
marketing concept and strategy. Their lack of expertise further inhibits their
understanding of the prevailing trends in the market.
c. Lack of sales promotion: Small units lack the resources and knowledge for
effective sales promotion. Large scale units mostly have well-known branded
names. They also have huge amount of resources to spend on advertisement

                                      39
and other sales promotion tools. Small scale units, on the other hand, have to
pay a heavy commission to dealers for their selling efforts, which reduce
profits margins.
d. Weak bargaining power: At the time of purchase of inputs, large scale
entrepreneurs manage to get huge discounts and credit. Such facilities are not
available to small units.
e. Product quality: It is costly and difficult for a small unit to have quality
testing and evaluating equipment.
f. Credit sales: The small scale enterprise is invariably called upon to sell on
credit. However, when it comes to purchasing inputs, they are denied liberal
credit facilities. As a result, they have to borrow excessive working capital
than actually needed. This increases the general cost of production and prices,
making it non-competitive.




                                       40
                                  Findings

The respondents of the study were asked differed questionnaires pertinent to
customers’ attitude towards product, price, promotion, and place of the
SMALL SCALE INDUSTRIES. These responses were organized into tables and
graphs.

In the following, results of the data obtained on the 4p’s mix (product, price,
place and promotion) will be presented.

Que: 2         Age Factor

         AGE
                                            Chart Title
 18-25         45
                                      21%                          AGE
                                                 30%
                                                                   18-25
 26-35         33
                                                                   26-35
                                                                   36-45
                                     27%
 36-45         40                              22%                 46ABOVE


46ABOVE        32


INTERPRETATION:

    In the survey, 30% of respondents belong to 18-25 age.
    In the survey, 23% of respondents belong to 26-35 age.
    In the survey, 27% of respondents belong to 36-45 age.
    In the survey, 21% of respondents belong to 46 and above age.




                                      41
Que: 3    Gender Factor

                                GENDER
                       MALE                        90
                     FEMALE                        60



                              Chart Title



                      40%                               GENDER
                                                        MALE

                                        60%             FEMALE




INTERPRETATION:

   In the survey, 60% of respondents are Males.
   In the survey, 40% of respondents are Females.




                                   42
Que: 4      Qualification Factor


    QUALIFICATION                                   Chart Title

  BELOW 10          17
                                                    11%
                                                                  QUALIFICATION
     10TH           21             33%                            BELOW 10
                                                          14%
                                                                  10TH
     10+2           22                                            10+2
                                                          15%     GRADUATION
GRADUATION          40                                            POST GRADUATION
                                              27%
   POST
GRADUATION          50

INTERPRETATION:

    In the survey, 11% of respondents are qualified under 10th.
    In the survey, 14% of respondents are qualified in 10th standard.
    In the survey, 15% of respondents are qualified in 12th standard.
    In the survey, 27% of respondents are graduated.
    In the survey, 33% of respondents are post graduated.
Thus, it can be said that the quality of the respondents are good and they are
aware of the small scale industries in India as the major shares of are
respondent are well educated and this will lead to good analysis.




                                         43
Que: 5        Occupation Factor

                                         OCCUPATION
                           SERVICE                       56
                        SELF-EMPLOYED                    23
                         PROFESSIONAL                    28
                          ANY OTHER                      43



                                         Chart Title

                                                              OCCUPATION
                                 29%
                                               37%            SERVICE
                                                              SELF-EMPLOYED
                                                              PROFESSIONAL
                                  19%                         ANY OTHER
                                         15%




INTERPRETATION:

   In the survey, 37% of the respondents are from the service background.
   In the survey, 15% of the respondents are self-employed.
   In the survey, 19% of the respondents are professional.
   In the survey, 29% of the respondents are from other occupation like
         students, Retd. Officers etc.

Thus, it can be interpreted that the major concern is shown by the service
people and students who are the actual buyers of the SSI products because of
low income level as compared to other one’s. So, the impact of 4p’s is judged
properly by their responses.


                                          44
Que: 8       Family Incomes

                                    Family Income
                       Below 3000                      17
                       3000-5000                       29
                       5000-15000                      35
                       15000above                      69



                                     Chart Title

                                      12%
                                                            Family Income
                                                            Below 3000
                           46%               19%
                                                            3000-5000
                                                            5000-15000
                                                            15000above
                                       23%




INTERPRETATION:

    In the survey, 12% of the respondents are earning below 3000.
    In the survey, 19% of the respondents are earning in between 3000 to
         5000.
    In the survey, 23% of the respondents are earning between 5000 to
         15000.
    In the survey, 46% of the respondents are earning 15000 and above.

Thus, it can be interpreted from the above survey that most of the
respondents are having low income level consist of 54% below 15000 and
they are the actual users of SSI products.

                                       45
Que: 10    Availability of Home Products

                         AVAILABILITY OF HOME PRODUCTS
                          YES                     64
                           NO                     49
                        CAN'T SAY                 37



                                     Chart Title

                                                     AVAILABILITY OF HOME
                         25%                         PRODUCTS
                                                     YES
                                           42%

                                                     NO


                                                     CAN'T SAY
                          33%




INTERPRETATION:

   In the survey, 42% of the respondents easily get the home products in
     the local place.
   In the survey, 33% of the respondents says the home products are not
     easily available to them in the local place.
   In the survey, 25% of the respondents have no comment on this.




                                      46
Que: 11    Is company providing well advertisement to itself?

                                    ADVERTISING WELL
                        YES                            70
                         NO                            60
                      CAN'T SAY                        20



                                       Chart Title

                              13%

                                                        ADVERTISING WELL
                                             47%        YES
                                                        NO

                        40%                             CAN'T SAY




INTERPRETATION:

   In the survey, 47% of the respondents agree that company is
     advertising well to itself.
   In the survey, 40% of the respondents do not agree to it.
   In the survey, 13% of the respondents have nothing to say on it.




                                        47
Que: 12    Are you getting sufficient information and trail by promotion?

                          SUFFICIENT INFORMATION
                        YES                      47
                         NO                      75
                      CAN'T SAY                  28



                                  Chart Title

                                                           SUFFICIENT
                           19%
                                                           INFORMATION
                                          31%
                                                           YES


                                                           NO


                                                           CAN'T SAY
                            50%




INTERPRETATION:

   In the survey, 31% of the respondents agree that they get sufficient
      information and trail promotion (advertising and sales & promotion).
   In the survey, 50% of the respondents do not agree to it.
   In the survey, 19% of the respondents can’t say anything.

Thus, it can be said that the most of the people are not getting sufficient
information and trail promotions related to SSI products as per the
requirement.




                                     48
Que: 14   Which Mode of Media is good for SSI?

                                 MODE OF MEDIA
                      T.V                            18
                     RADIO                           27
                   MAGAZINE                          22
                  NEWSPAPERS                         38
                  LOCAL MEDIA                        45


                                   Chart Title
                                                          MODE OF MEDIA
                                  12%
                                                          T.V
                           30%
                                        18%               RADIO
                                                          MAGAZINE
                                    15%                   NEWSPAPERS
                            25%
                                                          LOCAL MEDIA




INTERPRETATION:

   In the survey, 12% of the respondents finds T.V as a good mode of
     media.
   In the survey, 18% of the respondents finds Radio as a good mode of
     media.
   In the survey, 15% of the respondents finds Magazine as a good mode
     of media.
   In the survey, 25% of the respondents finds Newspapers as a good
     mode of media.
   In the survey, 30% of the respondents finds local media as a good mode
     of media.

                                    49
Que: 15    Price Factor

                             PRICE FACTOR
                 STRONGLY AGREE                          43
                     AGREE                               15
                    NEUTRAL                              25
                    DISAGREE                             32
                STRONGLY DISAGREE                        35


                                       Chart Title

                                                       PRICE FACTOR
                           23%         29%             STRONGLY AGREE
                                                       AGREE
                                                       NEUTRAL
                          21%           10%
                                                       DISAGREE
                                 17%                   STRONGLY DISAGREE




INTERPRETATION:

   In the survey, 29% of the respondents strongly agree that SSI price
     their products according to the market and customer.
   In the survey, 10% of the respondents fairly agree that SSI price
     their products according to the market and customer.
   In the survey, 17% of the respondents are neutral with this statement.
   In the survey, 21% of the respondents fairly disagree that SSI price
     their products according to the market and customer.
   In the survey, 23% of the respondents strongly disagree that SSI price
     their products according to the market and customer.


                                        50
Que: 16    Products from SSI are fulfilling the needs and desire.

                             NEEDS AND DESIRE
                  STRONGLY AGREE                            20
                      AGREE                                 33
                     NEUTRAL                                47
                     DISAGREE                               30
                 STRONGLY DISAGREE                          20



                                       Chart Title

                                                           NEEDS AND DESIRE
                              13%     14%
                                                           STRONGLY AGREE
                                                           AGREE
                        20%                 22%
                                                           NEUTRAL
                                                           DISAGREE
                                31%                        STRONGLY DISAGREE




INTERPRETATION:

   In the survey, 14% of the respondents strongly agree that SSI products
     are fulfilling the needs and desires of customers .
   In the survey, 22% of the respondents fairly agree that SSI products
     are fulfilling the needs and desires of customers .
   In the survey, 31% of the respondents are neutral with this statement.
   In the survey, 20% of the respondents fairly disagree that SSI products
     are fulfilling the needs and desires of customers .
   In the survey, 13% of the respondents strongly disagree that SSI
     products are fulfilling the needs and desires of customers .


                                            51
Que: 17   Products from SSI are substitute for National Brand.

                               SUBSTITUTE
                  STRONGLY AGREE                        37
                      AGREE                             46
                     NEUTRAL                            20
                     DISAGREE                           17
                 STRONGLY DISAGREE                      30


                                   Chart Title

                                                      SUBSTITUTE
                           20%                        STRONGLY AGREE
                                   25%
                                                      AGREE
                        11%
                                                      NEUTRAL
                          13%      31%                DISAGREE
                                                      STRONGLY DISAGREE




INTERPRETATION:

   In this survey, 25% of the respondents strongly agree that products
     from SSI is a substitute for National Brands.
   In this survey, 31% of the respondents fairly agree that products
     from SSI is a substitute for National Brands.
   In this survey, 13% of the respondents are neutral with this statement.
   In this survey, 11% of the respondents fairly disagree that products
     from SSI is a substitute for National Brands.
   In this survey, 20% of the respondents strongly disagree that products
     from SSI is a substitute for National Brands.



                                     52
Que: 18    Rating on the basis of the most important tool success.

                                       Tool Success
                       Price                           50
                       Place                           25
                      Product                          50
                     Promotion                         25



                                       Chart Title

                                 17%
                                                             Tool Success
                                                33%
                                                             Price
                                                             Place
                                                             Product
                           33%
                                                             Promotion
                                          17%




INTERPRETATION:

   In the survey, 33% of the respondents consider price factor more which
     shows that SSI focus on the customer group who are having low income.
   In the survey, 17% of the respondents give more preference to place. It
     conveys that if they get the cheaper products they can travel anywhere.
   In the survey, 33% of the respondents give preference to product
     means the investment made by them is justified.
   In the survey, 17% of the respondents are more likely to prefer
     promotion. It means much people do not prefer promotion
     (advertisements) as a tools of success.

                                         53
                               Conclusion
The findings of this study revealed:
1- Generally, the SSI plays an important role in achieving social and
economic development. The average invested capital in these industries
reached 4.8% of the total invested capital in all industries, during the
period 1990-2006. Also, the SSI provided 22% of the total job
opportunities and contributed in achieving nearly 8.5% of the total
value added. Lastly, their share of the total sales in the industrial sector
was 4.8%, and most of the sales were in the domestic market.


2- Despite the positive effects of the SSI, it still suffers from many
weaknesses such as low average employment of women which is due to
the socio culture. The percentage of women working in the SSI was only
1.7%. Also, the percentage of foreign labor in the SSI is relatively high.


3- The financial institutions are characterized by their wide spread.
There are 17 banks providing finance for this category of industry and
more than 24 programs have been accredited. Some programs are
oriented towards a specific age category such as youths, and some
institutional activities are exclusively for specific district or specific
geographic regions.


4- There is an increase in the productivity of labor in the SSI, which
indicates that the training programs directed towards these industries
have increased.


                                  54
5- Increasing the investment in SSI by 1% lead to an increase of the
value added by 0.78%, production growth by 0.81%, and employment
by 0.67%.


6- All the results of the statistical analysis of the SSI were statistically
acceptable and no differences were noticed between the effect of SSI
and other industries on the economic development.


7- Marketing has been identified as one of the major problem areas of
the small scale industries and it has been ranked as the second most
important reason for the closure of small scale businesses. Accordingly,
small firms will not be able to penetrate markets, national or
international, even if marketing support is given by government
agencies.




                                 55
                           Recommendations
Based     on   this   study's     analysis   and   results,   the   following
recommendations may contribute to increasing the role of development
of SSI.
1- Establishing government centers in all districts in India to provide
the needed services and facilities to SSI in order to increase their role in
the economic development of the Indian economy.


2- Establishing specialized training centers for SSI to provide special
training programs on how to establish a project and how to maintain
the continuity of that project.


3- Fostering technology development through either technology
transfer or technological innovations or inter-firm linkages should be
emphasized in the light of dimensions of global competition and its
negative fallout as well as positive opportunities, to SSIs entrepreneurs
through seminars and workshops, at the local level.


4- The financial infrastructure is needs, and an adequate inflow of credit
to the sector should be ensured, taking into consideration the growing
investment demands including the requirements of technological
transformation.


5- Limiting the establishment of small scale industries to designated
industrial areas for better monitoring and periodic surveys, enabling the
Ministry of Industry to make policy corrections from time to time.

                                    56
6- Establishing strong relations between small and large firms. One of
the major objectives of this scheme would be to provide reliable
information by large-scale industries to the small scale industries about
new methods of marketing and how to participate in the international
market.


7- Increasing exports of small- scale industries with governmental aid
by exhibiting their productions in International Exhibitions.


8- To reap the benefits of SSI, Indian policy and decision makers have to
enact and enforce the employment of Indian workers in the SSI.


9- It is highly recommended that Indian policy and decision makers to
work in cooperation with other interest groups to train and encourage
SSI to employ more Indians women. It is obvious that a large portion of
unemployed in India is among women.




                                57
                                              APPENDIX
                                           QUESTIONNAIRE

       I am the student of ICFAI BUSINESS SCHOOL – DEHRADUN, pursuing Master of Business
Administrations, conducting a survey on “Impact Of 4P’s Of Marketing on Small Scale
Industries in India”. Please, co-operate me in this survey by giving your responses, your views will
be used only for purpose of academic research.

   1. NAME :-______________________________________________________________________________________________

   2. AGE :- (a) 18-25 [ ]               (b) 26-35 [ ]           (c) 36-45 [ ]             (d) 46 & above [ ]

   3. Gender :- (a) Male [           ]         (b) Female [       ]

   4. Qualification :- (a) Below 10th               (b) 10th          (c) 10+2             (d) Graduation

                            (e) Post graduation


   5. Occupation: -         (a) Service                                  (b) Self employed
                            (c) Professional                             (d) Any other_________________

   6. Contact no: - (optional) __________________________________________________________ _______________

   7. Address: --------------------------------------------------------------------------------------------------------

   8. Family Income (in terms of per month):- (a) Below 3000                               (b) 3000 – 5000
                                              (c) 5000-15000                               (d) 15000 & above

   9. Total no. of family members: - (a) 1-3                   (b) 4-6           (c) 6-8            (d) 8 & above

   10. Are home products sufficiently available in local place?

       (a) Yes                              (b) No                       (c) Can’t say

   11. Is the company advertising well to itself?

       (a) Yes                              (b) No                       (c) Can’t say

   12. Do you get necessary information and trial by Promotion (Advertising and Sales &

       Promotion)?

       (a) Yes                              (b) No                       (c) Can’t say



                                                         58
13. Please mention some SSI and their products.

                   SSI                          Products

    (a) ………………………………………                  ………………………………………..

    (b) ………………………………………                  ………………………………………...

    (c) ………………………………………                  ………………………………………..

    (d) ………………………………………                  ………………………………………..

    (e) ………………………………………                  ………………………………………..

14. Which mode of media is good for SSI?

    (a) T.V

    (b) Radio

    (c) Magazine

    (d) Newspapers

    (e) Local Media

15. SSI priced their products according to the market and customer.

    (a) Strongly agree    (b) Agree      (c) Neutral   (d) Disagree (e) Strongly Disagree

16. Products from SSI are fulfilling your needs and desired.

    (a) Strongly agree    (b) Agree      (c) Neutral   (d) Disagree (e) Strongly Disagree

17. Products from SSI are a substitute for national brand.

    a) Strongly agree     (b) Agree      (c) Neutral   (d) Disagree (e) Strongly Disagree

18. Please rate according to preference for SSI which are the most important tool success

    (1 is for most preferred and 4 for least preferred).

    (a) Product

    (b) Price

    (c) Promotion

    (d) Place



                                           59

								
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