International Marketing of Khadi Project Report

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INTERNATIONAL MARKETING OF KHADI

Acknowledgements It was a great pleasure working on this project, as “Khadi depicts Indian culture”. However, our efforts alone could not have been sufficient for the completion of this project. Invaluable advice & suggestions from many people have gone into this project. We are extremely grateful to all those people who have helped us in collecting valuable information & helping us in completing the project. The foremost among them are Mrs. Joglekar and Mr. Bhattacharya, of KVIC (Khadi & Village Industries Commission), whose guidance & motivation enabled a focused effort towards the same.

Project Objective One of the most daunting challenges faced by country’s planner is that we Indians have not understood the significance and importance of the traditional sector of Khadi. This project aims at understanding the Khadi Industry in India, various factors affecting the growth and success of Khadi industry in India, the challenges and opportunities which the market offers and the upcoming trends in the Khadi Industry. Khadi majorly depicts Indian culture and our motive is to promote it and create awareness about it.

Summary As explained in the Objective page, our main motive is to spread awareness about Khadi, and the tool chosen here is international marketing. The project report consists of the evolution of Khadi, the strengths, weaknesses, opportunities and threats i.e. in short the SWOT analysis of Khadi which is explained point by point later. This gives us a holistic view about Khadi as a marketable entity. The report also consists of a review where it is explained that in spite of Khadi being a new entrant in the export market, it has an edge over other clothing materials, which may prove beneficial in many ways to many people. The project report also consists of technical marketing terms like the 4 Ps, Segmentation, positioning, Khadi’s life-cycle etc.

“The Khadi spirit means fellow-feeling with every human being on earth. It means a complete renunciation of everything that is likely to harm our fellow creatures, and if we but cultivate that spirit amongst the millions of our countrymen, what a land this India of ours would be! And the more I move about the country and more I see the things for myself, the richer, the stronger is my faith growing in the capacity of the spinning wheel (Charkha)”

-M. K. Gandhi

The history of India's freedom struggle is interwoven with the Charkha – the unusual weapon, employed by Mahatma Gandhi to spread the message of Swadeshi. Gandhi gave the art of Khadi, a special status through this movement. Khadi simply means cotton, usually handspun. Khadi is Indian handspun and hand-woven cloth. The raw materials may be cotton, silk, Polyester or wool, which are spun into threads on a spinning wheel called a charkha. Khadi's earliest avatar was fashioned some 5,000 years ago in India, the original home of cotton, hand spun and hand woven by crafts persons who in all likelihood followed the precise instructions on weaving, spinning and dyeing laid out in the Vedas. The Mahabharata and Ramayana rhapsodize over the intricacies of gold shot woven cloth. Khadi is a versatile fabric, cool in summers and warm in winters. Being a cruder form of material, it crumples much faster than other preparations of cotton. In order to improve the look, Khadi is often starched to have a stiffer shape. It is widely accepted in fashion circles these days.

SWOT Strengths • • • • • • • •

Eco-Friendly Reflects Indian Culture Versatility of Khadi Tax Exemptions Economic Growth Low cost Employment generation Fashion

Opportunities • Potential for exports • Emerging trend • Capturing an untapped markets • Generation of employment • Growing consumer preference

Weaknesses • • • •

Lack Of Appreciation Labor-Intensive Lack of infrastructure Lack of training in business methodologies • Lack of awareness

Threats • Competition • Survival in fast-growing technology Legislative impact

SWOT Analysis 1) Strengths: The basic motto is to generate employment within the country and promotion of Indian culture abroad. Khadi has certainly come of age and the Indian and International market both are becoming more aware about this traditional fabric. It is classic, eco-friendly and natural. Moreover, brand India is specially sought after these days. Khadi is one fabric that is never really in or out of fashion. It has a great international appeal as well, as Khadi is a brand which speaks for itself.

2) Weaknesses: The exclusivity of Khadi is that it is hand-made. And thus, the weakness is that it is labour-oriented. The product Khadi operates at the root level, which majorly lacks infrastructure. When the west realizes the importance of Khadi that is when we Indians have appreciated it. Also it lacks awareness.

3) Opportunities: Khadi as a product is a societal concept, which generates employment. Also, there lies a great potential to capture the untapped foreign market. Since, concept of Khadi originally was within India. India as a brand is gaining popularity. As Khadi now has become a trend, Indians as well as foreigners prefer it. Thus, there lies a great potential for growth. 4) Threats: Khadi still is in the introduction stage and, is now becoming a brand. Many people and regions are still not aware about Khadi and also people who are aware of Khadi still prefer the mill cloth because of the price-factor. Thus, Khadi has to face a great competition with the other clothes, also because Khadi lacks in technology.

Tapping the global markets There are various aspects of the marketing but we need to understand that in order to market internationally we need to understand the following questions: Deciding whether to go aboard ? Deciding which markets to enter ? Deciding how to enter the markets ? Deciding on marketing programs?

(1)Deciding whether to go aboard ? Generally companies would prefer to remain domestic only if the domestic markets are large enough . that is why the companies prefer to go international .the following reasons draw more and more entrepreneurs the company discovers that some foreign markets present higher profit opportunities that the domestic market the company needs a lager customer base to achieve economies scale the company wants to reduce its independence Also there are many negative aspects which affect the mangers decisions like the foreign customers and fail to offer a comparative prices. the managers realize that the managers lack the managerial skills. Most of the companies and their respective countries also supports them because they earn foreign markets. (2) Deciding which markets to enter ?

Most companies start small when they venture abroad. Some argue to stay small while others have bigger plans. companies enter when the market entry and market control costs are high . product and communication costs are high . population and income size and growth are high in the initial countries chosen. dominant foreign firms can establish high barriers to entry. Also there are various regional free trade zones like the NAFTA ,THE EUROPEAN MARKETS , MERCOSUL,APEC etc.at the same time there are potential markets which do not belong to this regions but still have unique features which need to be understood (3) Deciding how to enter the markets ? Once we decide a particular country we determine the best mode of entry .its broad choices are are indirect exporting, licensing, direct exporting, direct investment and joint venture. (4) Deciding on marketing programs? International companies must decide how much to adapt their marketing stratergy to local condition. tandardiztion of the product and distribution channels promises the lowest costs. Also cultural differences can often be pronounced across countries. Marketers must make sure that their marketing relevant to consumer in every market .

Concept of Marketing: The Concept of marketing for Khadi is that of Humanistic and Ecological concept. One of the most important objectives of producing and promoting Khadi is that it provides rural employment. The welfare of the poorest of the poor is concerned. Other important objectives of Khadi are: Khadi is Eco-friendly. The Dyes used to colour KHADI clothes are “vegetable dyes”. The vegetables or fruits in this case are grown for the colouring purpose specially. In case of Khadi, chemicals are not used and thus, skin diseases are prevented. Protection of Environment “Khadi is SPUN by HAND, WOVEN by HAND, and PROCESSED by HAND”. Industries other than KHADI, while making clothes use machines which automatically leads to POLLUTION but since the Khadi products are made by hands the pollution levels are negligible.

Selection of Target Markets For large-scale exports, suitable foreign markets must be discovered and selected. In fact, selection of suitable markets is the first stage in international marketing. Foreign markets are many but not all are suitable or equally promising for exporting. It is also not possible to export goods to many foreign markets at one time. Naturally, detailed study of potential foreign markets is necessary for the selection of most promising and profitable foreign markets. This is exactly what is done in the process of exploring external markets for Indian goods. Exploring external markets for Indian goods means making detailed study of potential external markets for Indian goods and selecting one or few which are most promising and profitable. The foreign market selected will be treated as target market for initial entry. Such selection of promising market is the basic requirement of successful selling in foreign markets. Appropriate selection of foreign market or markets prepares proper base for large-scale exports over a long period.

Marketing mix There are 4 P’s of marketing are product, price, place & promotion. As we mentioned our product is Khadi & our the market or the place is spread over various countries. our pricing strategy are as follows Product

Indian price (Rs.)

Duppatta Tie Shirts Kurta Bed Sheet Saree Tassar Silk Matka Silk Woolen Khadi Pure Silk Saree Baluchari Saree Katha Work Saree

350-800 150-250 250-1000 175-350 450-1500

International price(Rs.) 450-900 450-700 350-1500 250-450 1000-2500

300-350 450-550 200-250 850-1250 4000-4500 3650-4000

450-650 550-850 450-650 1500-2500 6000-7500 4500-7000

Note:- charges goes high up to 25% - 30% taking into consideration all the transportation & other charges as per rules & regulation of other countries.

Promotional Strategy 1. We market Khadi by participating in trade exhibitions. As it was done last year in places which were Italy, Britain, Switzerland, France and Poland which was orgenised by International Trade promotion Offer(ITPO). So as to promote Khadi in such Well reputed fairs. 2. We market Khadi by giving export incentives. We give 5%incentive on FOB given to those industries who export directly. The industries need to submit paper and other documentary evidence 3.

Buyer and seller And buyers and dealers are various such meets that can be attended

4.

Using a global web strategy is one of the best ways to initiate or extend export activities used to be to exhibit at an overseas trade show. with the web , it is not even necessary top attend trade shows to show ones wares with the helps of electronic communication i.e. via internet.

Product life cycle for Khadi INTRODUCTION STAGE Introduction of KHADI came during 1920 when GANDHIJI proposed the idea of “SWADESHI MOVEMENT” in the Nagpur session of Congress. KHADI according to him would act as weapon in fighting for our FREEDOM. GROWTH STAGE The proposal started taking its growth. The demand for KHADI products started increasing and demand for FOREIGN products started declining. MATURITY STAGE Pre-independence ”SWADESHI MOVEMENT” started taking shape seriously. People totally preferred KHADI PRODUCTS and avoided FOREIGN goods. The demand for KHADI reached to its MATURITY level. DECLINE STAGE After the independence the demand for KHADI suddenly started declining .

Segmenting targeting and positioning Segmentation Demographic segmentation The product Khadi is segmented into various product classes, according to age gender and income . It caters to all the age groups For eg. The sarees are women shirts are foe men and also there are cheaper as well as costlier products targeting various income groups. Geographical segmentation It means that basically the segmentation of the Khadi as a product is according to the specifications of the particular country and to cater their demands. Switzerland which has cool weather , they have a great demand for Khadi.

Repositioning In 1991, after the liberalization the concept of “KHADI” emerged back. The products made by KHADI were REPOSITIONED and introduced in the market as a new fashion trend. Today KHADI has become the LATEST FASHION TREND in the ASIAN COUNTRIES. We are now grabbing the unoccupied market.

Target markets Basically our target markets are the countries like the USA, European countries like London , Italy , etc..

Conclusion As explained in the Objective page, our main motive is to spread awareness about Khadi, and the tool chosen here is international marketing. The project report consisted of the evolution of Khadi, the strengths, weaknesses, opportunities and threats i.e. in short the SWOT analysis of Khadi. This gave us a holistic view about Khadi as a marketable entity. The report also consisted of a review where it was explained that in spite of Khadi being a new entrant in the export market, it has an edge over other clothing materials, which may prove beneficial in many ways to many people. The project report also consisted of technical marketing terms like the 4 Ps, Segmentation, positioning, Khadi’s lifecycle etc. which have to be taken into consideration because of the project.

For more Notes, Presentations, Project Reports visit – a2zmba.blogspot.com hrmba.blogspot.com mbafin.blogspot.com

For more Notes, Presentations, Project Reports visit – a2zmba.blogspot.com hrmba.blogspot.com mbafin.blogspot.com

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