International Journal of Excellence Innovation and Development
||Volume 1, Issue 1, Nov. 2018||Page No. 035-037||
An Economic Study of Marketing Cost of Coir
Incurred by Manufactures in Tirunelveli
District
K. Karuppasamy, P. Chinnathambi
Assistant Professor in Economics, Tirunelveli Dakshina Mara Nadar Sangam College, Manonmanium Sundaranar University,
T.Kallikulam, Tirunelveli, Tamil Nadu, India
Abstract––Marketing are activities of a company
associated with buying and selling a product or service. It
includes advertising, selling and delivering products to
people. People who work in marketing departments of
companies try to get the attention of target audiences by
using slogans, packaging design, celebrity endorsements
and general media exposure. Among the various
marketing costs, transport cost of small units has showed
an increased share of 56.48 per cent in channel III from
48.83 per cent in channel II. The rejection loss in channel
II was 13.63 per cent, while it was 20.54 per cent in
channel III. The share of loading and unloading cost has
slightly increased from 12.32 per cent in channel II to 13
per cent in channel III. The incidental charges was 3.35
per cent in channel II and it was doubled in channel III
and reached a percentage 7.13 per cent. The remaining
charges like pacing cost were 1.76 per cent in channel II
and 1.86 per cent in channel III and weighing charges
were 0.94 per cent in channel II and 0.99 per cent in
channel III. From the analysis it is known that the channel
III was the most economic channel with the least
marketing costs among all the channels, it is followed by
channel II.
Keywords––Marketing, company, channel
INTRODUCTION
The purpose of all production is to sell the goods
produced and make profit thereof. Thus, the next step for
the manufacturer is to decide the ways and means to
place the products in the hands of the consumer at a
proper place, time and price. Therefore, every
manufacturer would seek specialized middlemen in
performing such marketing functions so as to achieve the
objectives of the firm. This set of marketing
intermediaries is called marketing channel. (Philip
Kotler, 2003). In this section, an attempt is made to
identify the cost of marketing that exist for coir fibre in
the study area.
Importance of Marketing
1. Marketing helps to achieve, maintain and raise the
standards of living
2. Marketing Increases employment opportunities
3. Marketing increases national income - More
purchasing power
4. Helps to maintain economic stability & development
5. Link between producer & consumer
6. Removes imbalance of supply & demand by
transferring surpluses
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Marketing Cost
The marketing cost refers to the total cost associated
with delivering goods to customers. The marketing cost
may include expenses associated with storing goods in
warehouses pending delivery, loading and unloading,
bundling, weighing, transporting, broker aging,
establishment and other incidental charges. The items of
the cost vary with the place of marketing. The direct
calculation of marketing cost is not a easy task as it
involves many calculations of many elements of such
cost. Hence, the total marketing costs are often estimated
indirectly, via price spread or marketing margin.
(Tripathi, R.S, 1998).
MATERIALS AND METHODS
Collection of Data
This study is an empirical research based on the survey
method. The researcher adopted interview schedules for
collecting primary data.
Primary Data
The primary data were collected from two sources. The
data on organization, investments, sales, cost and return
of coir units were collected from the manufacturers of
coir units. Information relating to price paid, received
and costs incurred in marketing of coir were also
collected from market intermediaries. Separate interview
schedules were prepared and used to elicit this required
data from manufacturers and market intermediaries. As
an initial step, the drafted interview schedules were pre-
tested by taking into account 5 manufacturers of coir
units, and 10 intermediaries. Their opinions and
suggestions were sought on its construction. In the light
of the experience gained in the pre-test, the originally
prepared interview schedules were modified and the
final draft prepared.
Marketing Cost Incurred by Manufactures
The marketing costs incurred by the manufactures per 100
kg of coir fibre were calculated for both micro and small
coir units, and the outcomes are presented in Table 1.
RESULT AND DISCUSSION
The manufacturers prefer three types of channels for
marketing of coir fibre. They have to incur marketing
cost when they skip the native traders in the channels of
distribution. From the above table it is understood that
the total marketing cost of the micro level units who
follow channel II was found to be Rs.120.89 per 100 kg
of coir fibre.
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An economic study of marketing cost of coir incurred by manufactures Karuppasamy and Chinnathambi

Table 1: Marketing cost incurred by the coir units (rupees per 100 kg).
Micro Units Small Units Average
Items of Cost
Channel II Channel II Channel III Channel II Channel III
60.13 56.84 62.32 58.49 62.32
Transport Cost
(49.74) (48.83) (56.48) (49.29) (56.47)
22.97 22.31 22.64
Commission - -
(19.00) (19.17) (19.08)
16.02 15.87 22.67 15.95 22.67
Rejection Loss
(13.25) (13.63) (20.54) (13.44) (20.54)
14.34 14.34 14.34 14.34 14.34
Loading and Unloading
(11.87) (12.32) (13.00) (12.08) (13.00)
4.28 3.90 7.87 4.09 7.87
Incidental Charges
(3.54) (3.35) (07.13) (3.45) (7.13)
2.05 2.05 2.05 2.05 2.05
Packing Cost
(1.70) (1.76) (1.86) (1.73) (1.86)
1.10 1.10 1.10 1.10 1.10
Weighing Charges
(0.90) (0.94) (0.99) (0.93) (1.00)
120.89 116.41 110.35 118.66 110.35
Total
(100.00) (100.00) (100.00) (100.00) (100.00)
Source: Primary Data,
Figures in brackets are Percentages to the total.

In which transport cost has a major share of 49.74 per
cent, followed by commission charges (19 per cent),
rejection loss (13.25 per cent) and loading and unloading
(11.87 per cent). Incidental charges packing cost and
weighing charges have shares of 3.54 per cent, 1.70 per
cent and 0.90 per cent respectively.
The marketing cost incurred by the small units who
follow channel II was found to be Rs.116.41 per 100 kg
of coir fibre. Here also the transport cost has maximum
share of 48.83 per cent followed by commission charges
(19.17 per cent) and rejection loss (13.63 per cent). The
shares of cost of loading and unloading and incidental
charges were found to be 12.32 per cent and 3.35 per
cent respectively. The other two costs namely packing
cost and weighing charges together have a share of 2.70
per cent.
The marketing cost for small units who follow channel
III was worked out to Rs. 110.35 per 100 kg coir fibre.
The share of transport cost here also has a major share of
56.48 per cent. In channel III as the manufacturers skip
the commission agent and sell their coir fibre directly to
market traders. The rejection loss has a share of 20.54
per cent, followed by of loading and unloading with
13.00 per cent and incidental charges with 7.13 per cent.
The combined cost of packing and weighing worked out
to 2.85 per cent.
Among the various marketing costs, transport cost of
small units has showed an increased share of 56.48 per
cent in channel III from 48.83 per cent in channel II. The
rejection loss in channel II was 13.63 per cent, while it
was 20.54 per cent in channel III. The share of loading
and unloading cost has slightly increased from 12.32 per
cent in channel II to 13 per cent in channel III. The
incidental charges was 3.35 per cent in channel II and it
was doubled in channel III and reached a percentage
7.13 per cent. The remaining charges like pacing cost
were 1.76 per cent in channel II and 1.86 per cent in
channel III and weighing charges were 0.94 per cent in
channel II and 0.99 per cent in channel III. From the
analysis it is known that the channel III was the most
economic channel with the least marketing costs among
all the channels, it is followed by channel II. The
marketing margin is the difference between the price
paid by the ultimate consumer and the price received by
the producer often in the market and such difference is
the share due to middlemen. . (S.K Raha and M.A.
Beten,1995).
Findings
 The channel which has least participation of
intermediaries has more marketing efficiency. The
District Industries Centre and the Coir Board have
vital role in the promotion of coir units, regarding
providing financial facilities and training programs
to the coir manufacturers. Development of improved
variety of ratts and looms would help in improving
the production of coir yarn spinning, coir mats, etc.
It is inferred that the share of manufacturer’s price
in industrial user price was higher in channel III,
which was 54.90 per cent and this share was lower
in channel I with 48.28 per cent.
 It is found that the marketing margin of the
wholesalers was higher in all the channels because
they spent more money on marketing cost, they can
get more marketing margins than market traders and
native traders.
 A low level of price spread was witnessed in
channel III as there were less marketing cost and
marketing margin. As a result the manufacturer’s
price was higher than in other channels.
 The analysis of marketing efficiency by using the
Shepherd’s method, Acharya and Agarwal’s method
and Composite index method disclosed the fact that

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 International Journal of Excellence Innovation and Development
||Volume 1, Issue 1, Nov. 2018||Page No. 035-037||

channel III was more efficient than channel I and REFERENCE

channel II. It is because of lower marketing cost on
account of the least participation of intermediaries.
 The analysis of Garrett’s ranking technique reveals
that the heavy transport cost was the first and
foremost marketing problem of the manufacturers
with a mean score of 58.45. Because the coir
manufacturers have to carry their products to
Alleppey market, they incurred heavy transport cost.
[1] Philip Kotler, “Marketing Management”, Pearson
Education (Singapore) Private Limited, Indian
Branch, New Delhi, 2003, p.504.
[2] Tripathi, R.S, (1998) “Production and Marketing
of Pulses”, Mittal Publications, New Delhi, p.204
[3] S.K Raha and M.A. Beten, “Vegetables Marketing
in Bangladesh: Do Consumers Pay Higher Price”,
Economic Affairs, Vol.40, No.1, 1995, p.42.

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