Ijmmr April 2011

IJMMR Volume 2, Issue 4 (April, 2011) ISSN 2229-6883

INTERNATIONAL JOURNAL OF MARKETING AND MANAGEMENT
RESEARCH
(IJMMR)
SR. NO. PARTICULAR PAGE NO.
RESOURCES-BASED, MARKETING -BASED, LEARNING-BASED
STRATEGIC ALLIANCES AND BUSINESS PERFORMANCE
1 1-17
SHING-MEI LEE
CUSTOMER AWARENESS ANALYSIS OF PRIVATE LIFE INSURANCE
IN INDIA- LEARNING FROM KERALA
2 18-29
RESHMI AUGUSTINE, DR.K.S.CHANDRASEKHAR
A STUDY OF BURNOUT AND ORGANIZATIONAL HEALTH AMONG
HVPNL EMPLOYEES
3 30-39
DR. NIRMALA KAUSHIK
CUSTOMER RELATIONSHIP MANAGEMENT IN
MARUTI UDYOG LTD
4 40-61

DR. IQBAL SINGH, PALLAVI WADHWA
TITLE: “UNDERSTANDING THE CONCEPT OF GREEN MARKETING
IN CURRENT SCENARIO: A CHALLENGE OR AN OPPORTUNITY”
5 62-78
MS. POOJA GUPTA, MS. AARTI SHARMA
A STUDY OF ISSUES AND CHALLENGES OF RETAIL FORMATS AND
RETAIL ENTREPRENEURSHIP IN INDIA
6 79-87
MS. GARIMA SHARMA, DR. PARUL KHANNA
A STUDY ON BRAND LOYALTY OF MLM BRANDS
7 88-102
DR. ISITA LAHIRI, SHRI MRINAL KANTI DAS
A STUDY ON TOURIST’S SATISFACTION LEVEL WITH A REFERENCE
TO KERALA, THE GOD’S OWN COUNTRY
8 103-116
RAJESH K
THE PERCEPTIONS OF THE INSURANCE BROKERS ABOUT MARINE
INSURANCE PRODUCTS AND MARKET- A STUDY
9 117-132
DR. BYRAM ANAND, MR. SURAJ THERUVATH
AN EVALUATION OF PROFITABILITY PERFORMANCE OF ESOP
INDIAN BANKS
10 133-144
DR. RAMESH KUMAR DHIMAN, VIRENDRA SINGH CHAUDHARY
PILGRIMAGE AT MATA VAISHNO DEVI: PROBLEMS AND REMEDIES
11 145-164
PADMINI TOMER, DR. R.S. ARORA
ECONOMICS OF LIVESTOCK MARKETING IN ORISSA
12 165-174
ANIRUDHA BISWAL, SANJAY KUMAR
IN-STORES DISPLAY: ONE OF THE EFFECTIVE ELEMENTS TO
INCREASE SALES IN RETAIL
13 175-182
DR. GEETA NEMA, MS. DHANASHREE NAGAR
WORK-LIFE BALANCE PRACTICES, OPPORTUNITIES &
CHALLENGES - ITS IMPACT ON ORGANISATIONAL PERFORMANCE
14 IN INDIAN CONTEXT 183-191
DR. KIRTI AGARWAL, YOGESH BHARDWAJ
Sri Krishna International Research & Educational Consortium

http://www.skirec.com

IJMMR Volume 2, Issue 4 (April, 2011) ISSN 2229-6883

CONSUMER PREFERENCES AND COMPARATIVE ANALYSIS OF
SELECT PRIVATE LIFE INSURANCE COMPANIES -
15 AN EMPIRICAL STUDY 192-199
T. SOBHA RANI
SUPPLY CHAIN MANAGEMENT IN FRESH FRUITS AND VEGETABLES
SEGMENT: UNORGANIZED V/S ORGANIZED SECTOR
16 200-213
LOKESH VIJAYVARGY, AND PRERNA JAIN
YOUNGSTERS PERCEPTION REGARDING READYMADE GARMENTS
IN HARYANA
17 214-228
DR. MAITHILI R.P. SINGH
LEVEL OF AWARENESS IN RURAL INVESTORS TOWARDS
INSTITUTIONAL INVESTMENTS - A CASE STUDY OF BIJAPUR
18 DISTRICT 229-243
DR. A. S. SHIRALASHETTI


IJMMR Volume 2, Issue 4 (April, 2011) ISSN 2229‐6883

The Journal of Sri Krishna Research & Educational Consortium
INTERNATIONAL JOURNAL OF
MARKETING AND
MANAGEMENT RESEARCH
Internationally Indexed & Listed Referred e-Journal
RESOURCES-BASED, MARKETING -
BASED, LEARNING-BASED STRATEGIC ALLIANCES AND
BUSINESS PERFORMANCE
SHING-MEI LEE*
*Department of Finance
Chaoyang University of Technology
Taichung Taiwan
ABSTRACT
This research proposed a framework of strategic alliance analysis for evaluating

prospective business performance. The division of the business performance can
successfully be used as a diagnostic tool to provide a preliminary insight into
Taiwan high technology industries for operators. The results indicate that (1)
Complementarity of partners' resource-based contributions will be positively
related to strategic alliance performance. (2) Higher levels of cooperation in
marketing-based alliance will be positively associated with higher levels of
Taiwan high technology firms’ business performance. (3) The evidence indicate
that higher levels of organizational learning-based will be positively related to
business performance.
KEYWORDS: Business Performance; Resources-Based Strategic Alliances,

Marketing-Based Strategic Alliances, Learning-Based Strategic Alliances; High-
Tech Industry.
INTRODUCTION (IDB), significant growth is expected in

several emerging industries including
This study aims to investigate how the nanotechnology, semiconductor equipment
strategic alliance practices related to the manufacturing, and color image display
business performance in the Taiwan High equipment. Our purpose here, therefore, is
tech industries. In order to enhance to propose an integrated framework that
strategic alliance performance, Taiwan evaluates prospective alliance performance
high technology firms can adopt various through an analysis of the partner firms
solutions to enhance their alliance and the alliance conditions, drawing upon
capability, which can be defined as a firm's and integrating the main approaches in the
ability to capture, share, disseminate and strategy literature—Structure of strategic
apply alliance management knowledge. alliances, which includes comparisons of
According to the figures provided by the governance structures in equity-based and
Taiwan Industrial Development Bureau
‐ 1 ‐


contract-based alliances and formation of are minimized amongst other strategic
strategic alliances. Investigate whether options and also resources and capabilities
different Strategic alliances have are considered valuable if they allow an
differential effects on various dimensions organization to exploit opportunities and
of Taiwan’s High-tech Industry business counter threats in the business
performance. For example, Mosel Vitelic environment. Pfeffer and Salancik (1978)
(Taiwan) and Cypress (USA) jointly indicared that resource based motives cited
developed a 0.13-micron process as key reasons for allying include (1)
technology to be deployed initially in access to newly developed technologies,
Cypress's Fab I research and development capabilities, or general research resources
facility in San Jose in 2000. The concept of the partner firm. Resource constraints
model we test is illustrated in Figure 1 may direct an organization towards
collaboration in a situation where
2. LITERATURE REVIEW collaboration is not an efficient response to
the exchange conditions ( Kale et al.,
MOTIVATION OF STRATEGIC 2002). (2) improved market valuation of
ALLIANCES the technology, transferring tacit
knowledge (Collins and Hitt, 2006) and
2.1 RESOURCES-BASED additional funding or financial resources
STRATEGIC ALLIANCES (Coombs and Deeds, 2000).
Alliances are formed due to both the Lambe et al.(2002) indicated that
resource needs and the social opportunities resources-based strategic alliances attempt
of partnering firms (Ahuja, 2000). to find the optimal resource boundary
Resources-based strategic alliances are through which the value of their resources
maximize firm value through gaining is better realized than through other
access to other firms’ valuable resources resource combinations. When alliance
(Ramanathan et al., 1997). The resource- partners integrate resources, a synergistic
based theory explains that strategic effect can occur, empirical research finds
alliances are formed when firms need that idiosyncratic resources are prominent
additional resources that cannot be in alliance success. Resource
purchased via market transactions but are complementarity indicates a symmetric
available from partners. Shan et al., (1994) partnership that underscores important
argued that complementary resources have strategic considerations in inter-firm
been the focus on the formation and collaboration. Ahuja (2000) indicate that
management of alliances. Resource-based technical, commercial, and social capital
allows an organization to access influence alliance formation. This research
complementary capabilities in a situation compared existing literature of the
where there are resource constraints, resource-based theory as following : (1)
which include financial, technological, The resource -based theory explains
production capability, sales channel. technology license as exchange of two
However, Hunt & Morgan (1995) resources between firms, which are
indicated that resource -based theory technological resources (proprietary
explains that strategic alliances are formed technologies) and financial resources
if organizations to combine resources in (monetary compensation) (Yasuda and
unique ways across organizational Iijima, 2004). (2) The resource -based
boundaries to obtain an advantage over theory explains joint R&D as the pooling
their competitors and the associated costs of technological resources (including
‐ 2 ‐


intellectual property, research talent, reduced potential for direct competition in
development experience, etc.) and the end product markets. Therefore, But
financial resources owned by firms into a excessive resource diversity makes it
unified management of R&D activities ( difficult for partners to learn from each
Mothe and Quelin, 2001). (3) The resource other. However, resource-based theorists
-based theory explains that sourcing view the firm as a unique bundle of assets.
agreements are formed if firms are short of A careful balance between resource
manufacturing resources required for their similarity and diversity is at least in theory
business such as facilities and equipment optimal for a stable relationship and a
and need to utilize such resources positive alliance outcome. Therefore, the
available from partners. (4) The resource - alliance can be initiated with a low level of
based theory explains that firms form a control. Hence, we propose:
joint venture in case that they prefer to
combine their respective resources, such as HYPOTHESIS 1:
manufacturing resources and distribution COMPLEMENTARITY OF
resources, to achieve certain mutually PARTNERS' RESOURCE-BASED
agreed business goals (Bulter and Sohod, CONTRIBUTIONS WILL BE
1995). POSITIVELY RELATED TO
STRATEGIC ALLIANCE
Complementary resources are especially PERFORMANCE.
important to alliance success. However,
the degree of resource complementarity 2.2 MARKETING-BASED
will be a critical factor in determining an STRATEGIC ALLIANCES
alliance's future course and outcome.
Peteraf (1993) indicated that a resource Marketing-based alliance is marketing
with the potential to create competitive activity undertaken by more than one
advantage must meet a number of criteria, entity, which can include a mix of
including value, rarity, imitability and different levels of governments as well as
organization a firm must be organized to private sector organizations, jointly to
exploit its resources and capabilities. promote and sell a concept, product or
Therefore, valuable firm resources are service which has benefit to all the
usually scarce, imperfectly imitable, and stakeholders (Abratt and Motlana, 2002).
lacking in direct substitutes. Thus, the Bucklin and Sengupta (1993) indicated
trading and accumulation of resources that alliances with marketing emphases
becomes a strategic necessity. Kim and such as joint product development and co-
Inkpen (2005) argue that a tension exists branding have also become increasingly
between the need for diverse resources and widespread. In practice, long-term
a need for similar resources. As to alliances evolve to meet new
business alliances, resource -based environmental conditions and to respond
researchers maintain that each partner to internal partnership changes, marketing
contributes to an alliance and creates new alliances may create a synergic effect
resources (Das and Teng, 2000, Jap, 1999 which can amplify and build user
and Park et al., 2004). Lei (1997) indicated awareness of benefits derived from these
that an alliance with a partner possessing complementarities.
complementary resources reduces the
vulnerability of the alliance participants; The creation and sustaining of strategic
Moreover, firms with complementary alliances in Marketing-based alliance must
skills make better partners because of the be based on substantial degrees of trust
‐ 3 ‐


and cooperation on the part of all channel conduct business activities such as product
members For example, Avon Products and development, promotion, or distribution;
Readers' Digest have wellestablished and alliances put their resources on
direct distribution channels with extending alliances to enlarge product
customers. However, Bucklin and lines, cross-selling, brand alliances, market
Sengupta (1993) indicated that share, and globalization. Co-marketing
technologically cooperate in developing a alliances are lateral relationships between
new product and involve coordination firms at the same level in the value-added
among the partners in one or more aspects chain and represent a form of "symbiotic
of marketing and may extend into marketing" (Adler, 1966; Vardarajan and
research, product development, and even Rajaratnam, 1986).
production. For example, Fuji, Kodak,
Canon, Minolta, and Nikon formed a joint It is assumed that if consumers can easily
research and development project to imagine that two different category
establish a new standard for photographic products are used complementary to each
film. IBM formed a joint venture with other in a certain situation, in which the
Toshiba and Siemens to develop an partners contribute similar resources for
advanced line of memory chips. the same stage or stages in the value-chain,
Thoumrungroje and Tansuhaj (2004) aiming at producing economies of scale
indicated that Marketing-based alliance’ for those activities that businesses carry
complementarity and substitutability are out in collaboration. These corporations
mainly related to use and the marketing can also achieve link alliances, and
alliance is the strategically complementary independent status is distinct from the
alliance between two brands. For example, conventional practice of brand extension
when planning its expansion into Mexico, or alliance (Abratt and Motlana, 2002).
Wal-Mart formed a joint venture with Therefore, business alliance is an
Mexico’s Cifra, shortening Wal-Mart’s important issue for businesses on both
learning curve and providing a firm base in strategic and tactic considerations in which
the Mexican market. However, Geylani et how to evaluate and select their partners in
al. (2008) indicated that marketing order to achieve alliance objectives and
alliances can boost opportunities for benefits. For example, Apple Computer
product success in local markets for global and Adobe Systems worked together in
brand companies and entering an alliance 1984 to create the tools of desktop
partnership with different industry brands publishing, a major market whose
allows firms to reinforce their brands evolution was greatly accelerated by this
image, and improve chances of partnership. In co- marketing alliances,
commercial success. A marketing alliance complementarity and substitutability are
that is created by the joint naming and the mainly related to use. For example,
technical co-operation of two brands of an Microsoft used its alliance with IBM for
equal they might perceive two product the MS DOS operating system in the early
categories are well paired under co- 1980s to catapult itself into the position of
marketing alliances, which aim at the dominant PC software firm (Brandt,
integrating different resources, customers, 1989). Thus, the following hypotheses
suppliers, and markets from each partner were investigated:
(Dussauge, Garrette, & Mitchell, 2004).
HYPOTHESIS 2: HIGHER LEVELS
It is assumed that marketing alliances are OF COOPERATION IN
focused on implementing alliances to MARKETING-BASED ALLIANCE
‐ 4 ‐


WILL BE POSITIVELY 1978; Cohen and Levinthal, 1990;
ASSOCIATED WITH HIGHER Muthusamy and White, 2005). While the
LEVELS OF BUSINESS level of learning within an alliance
PERFORMANCE. depends upon the absorptive capacity of
partners, the success of the collective
TABLE 1 HERE learning effort is determined by the
cooperative learning among partners
2.3 LEARNING-BASED STRATEGIC (Muthusamy and White, 2005).
ALLIANCES
Slater and Narver (1995) argue that a firm
In an alliance setting, organizational which is continuously engaged in learning-
learning performs a dual role of both based strategic alliances tends to stand a
acquiring existing knowledge that other better chance of tracking and responding
partners already possess and generating to customer needs, sensing and seizing on
new knowledge. Muthusamy and White market opportunities, and offering
(2005) indicated that effective appropriate and finely targeted products,
organizational learning will enhance firm’s results which lead to superior levels of
alliance capability. A firm with strong profitability, sales growth, and customer
alliance capability can conduct retention.
organizational learning more effectively
and at the same time deal with relationship TABLE 2 HERE
with alliance partner better. This
knowledge can be converted into new Inkpen and Tsang (2005) indicated that the
products, processes, and services, which outcome of learning-based strategic
contribute directly to the firms’ final alliances stems from learning processes
financial results (Cohen and Levinthal, synergies of knowledge, as alliances
1990). In the context of a network of companies involve a simultaneous focus
firms, learning has been defined as the on internal, firm-specific competencies
process of acquisition and exploitation of and external, collaborative synergies,
new knowledge, skills, and competencies which plays an important role in creating
by the organization (Argyris and Schön, new knowledge-related capabilities and
1978). Muthusamy and White (2005) thereby enhancing competitive
indicated that while the level of learning performance.
within strategic alliances depends upon the
absorptive capacity of partners, the success However, Porter and Fuller (1986) indicate
of the collective learning effort is that learning-based strategic alliances
determined by the cooperative learning associated with R&D capabilities is
among partners. Often alliances are especially critical in global industries such
formed for the purpose of learning and as high technology industries where a
enhancing core competencies through a firm's competitive position in one national
partner's complementary knowledge market is significantly affected by its
(Anand and Khanna, 2000 and Grant and position in other markets. Inkpen and
Baden-Fuller, 2004). In the context of a Tsang (2005) indicate that the increasing
network of firms, learning-based strategic global harmonization of high technology
alliances has been defined as the process research procedures and learning-based
of acquisition and exploitation of new strategic alliances, Partners can learn
knowledge, skills, and competencies by together in the course of collaboration, and
the organization (Argyris and Schön, jointly develop new capabilities and skills,
‐ 5 ‐


useful knowledge and information for instruments. After that a large-scale
discovery have become more codified, questionnaires survey was administered to
divisible and transferable. This provides secure more information from CEO or top
greater opportunity for high technology managers. Given that a comprehensive
MNEs to ally with, and learn from, questionnaire such as this one requires
technology start-up firms and even global much time to answer, most of the samples
competitors with complementary R&D were approached through acquaintants.
strengths and strategies. For example, in There are more than 500 Taiwan high
recent years, corporations as varied as GE, technology companies in the database.
Ford, Apple, Time-Warner, AT&T and After removing some companies with
Toyota have actively formed alliances with some missing financial numbers, the
global partners. Therefore, The importance remaining number of samples in the final
of organizational learning for performance data set for analysis is 152, across 6
improvement has long been recognized in different high technology industries
research. Hence, this study proposes: (Integrated Circuits, Computers and
Peripherals, Telecommunications,
HYPOTHESIS 3: HIGHER LEVELS Optoelectronics, Precision Machinery and
OF ORGANIZATIONAL LEARNING- Biotechnology).
BASED WILL BE POSITIVELY
RELATED TO BUSINESS TABLE 3 HERE
PERFORMANCE. 3.2 VARIABLES AND MEASURES
3. RESEARCH METHODOLOGY z DEPENDENT VARIABLE:
FINANCIAL PERFORMANCE
3.1 SAMPLE AND DATA SOURCES
Data have been collected from 152 high In this research, the financial
technology firms in Taiwan. The industry performance measures of business
and involves large and well-known high performance include (1) financial
technology companies in industries such as structure, (2) solvency, (3) operating
Integrated circuits, PC/Peripherals, capability, (4) profitability capability, and
Optoelectronics , Telecommunication, (5) cash flow.
Precision machinery, and Biotechnology . TABLE 4 HERE
After that a large-scale questionnaires
survey was administered to secure more FIGURE 2 HERE
information from either CEO , top
managers or HR professionals. Given that The structural equations of the model take
a comprehensive questionnaire such as this the following form:
one requires much time to answer, most of
the samples were approached through where,
acquaintants. Y1=λ11η Y6=λ63η3+ Y11=λ113η3 Y16=λ164η4
The sample of firms for this study was 1+ε1 ε6 +ε11 +ε16
drawn from the Taiwan CommonWealth Y2=λ21η Y7=λ73η3+ Y12=λ124η4 Y17=λ174η4
Magazine Top 1000 Enterprises list of
1+ε2 ε7 +ε12 +ε17
largest Taiwan high technology
companies. In-depth interviews were Y3=λ32η Y8=λ83η3+ Y13=λ134η4 Y18=λ185η5
performed on Taiwanese high technology 2+ε3 ε8 +ε13 +ε18
companies to develop the research
‐ 6 ‐


Y4=λ42η Y9=λ93η3+ Y14=λ144η4 Y19=λ195η5 path model output reports the overall
2+ε4 ε9 +ε14 +ε19 model coefficients for the major financial
performance model.
Y5=λ52η Y10=λ103η3 Y15=λ154η4 Y20=λ205η5
2+ε5 +ε10 +ε15 +ε20 4.2 THE INFLUENCE OF
MOTIVATION OF STRATEGIC
ALLIANCES ON BUSINESS
PERFORMANCE
Financial performance= f (financial FIGURE 4 HERE

structure, solvency, operating capability,
profitability capability, cash flow) TABLE 6 HERE
z INDEPENDENT VARIABLES: Table 6 shows the standardized regression

weights and p-value. It is evident that
MEASURES OF STRATEGIC complementarity of partners' resource-
ALLIANCE MOTIVATION based contributions will be positively
related to business performance
The Strategic alliance motivation factors (Hypothesis 1).The resource-based
view constructs use reflective scales motivation regresses significantly positive
developed by Morgan and Hunt (1994), toward business performance
having three indicates including (standardized regression weight 0.148, p =
(1)marketing -based motivation 0.005) . Strategic alliances “is about
(2)resource-based motivation (3)learning- creating the most value out of one's
based motivation. Marketing based existing resources and by combining these
motivation refers to share market operation with others' resources ” (Das & Teng,
risk, open new market, increase market 2000). The resource -based motivation
share and develop new product. Resource explains that firms form an alliance that
based motivation refers to build economic they prefer to combine their respective
scale, ensure the resource of raw material, resources, such as manufacturing resources
cost reduction and competitive edge and distribution resources, to achieve
improvement and investment portfolio and certain mutually agreed business goals
risk-avoidance orientation. Learning based (Bulter and Sohod, 1995).However, the
motivation refers to reduce R&D cost, degree of resource complementarity will
accelerate technology transfer and improve be a critical factor in determining an
learning curve effect. Measures are alliance's future course and
explained as Table 5. outcome.Therefore, the result of SEM
TABLE 5 HERE Model supports Hypothesis 1.
4. Results It is evident that the higher levels of

cooperation in marketing-based alliance
4.1 THE SEM RESULTS FOR will be positively associated with higher
FINANCIAL PERFORMANCE levels of business performance
(Hypothesis 2). The marketing-based
FIGURE3 HERE
motivation regresses significantly positive
In Figure3, the SEM results for financial toward business performance
performance, all of the path coefficients (standardized regression weight 0.319, p =
are statistically significant. The following 0.007). The results also indicate that
‐ 7 ‐


alliance motivation (standardized research resources of the partner firm,
regression weight 0.226, p = 0.002) and transferring tacit knowledge, improved
alliance experience (standardized market valuation of the biotechnology
regression weight 0.449, p = 0.000) will be technology. The resource -based
positively associated with the alliance motivation explains that Taiwan high
relationship management of the firm technology firms form an alliance that they
marketing alliances create a synergic effect prefer to combine their respective
which can amplify and build user resources, such as manufacturing resources
awareness of benefits derived from these and distribution resources, to achieve
complementarities (Bucklin and Sengupta, certain mutually agreed business goals.
1993) and allow firms to reinforce their
brands image, augment brand awareness, RESOURCE- BASED STRATEGIC
and improve chances of commercial ALLIANCE
success (Geylani et al., 2008; Gammoh et
al., 2006). Therefore, the result of SEM Higher levels of cooperation in marketing-
Model supports Hypothesis 2. based alliance will be positively associated
with higher levels of Taiwan high
It is evident that the higher levels of technology firms’ business performance.
organizational learning-based will be Marketing alliances create a synergic
positively related to business performance effect which can amplify and build user
(Hypothesis 3). The learning-based awareness of benefits derived from these
motivation regresses significantly positive complementarities and allow Taiwan high
toward business performance technology firms to reinforce their brands
(standardized regression weight 0.507, p = image, augment brand awareness, and
0.003). Slater and Narver (1995) indicate improve chances of commercial success.
that a firm which is continuously engaged
in learning tends to stand a better chance LEARNING- BASED STRATEGIC
of tracking and responding to customer ALLIANCE
needs, sensing and seizing on market
opportunities, and offering appropriate and The evidence indicate that higher levels of
finely targeted products, results which lead organizational learning-based will be
to superior levels of profitability, sales positively related to business performance.
growth, and customer retention Therefore, Taiwan high technology firms which are
the result of SEM Model supports continuously engaged in learning tends to
Hypothesis 3. stand a better chance of tracking and
responding to customer needs, sensing and
5. CONCLUSIONS seizing on market opportunities, and
offering appropriate and finely targeted
MARKETING- BASED STRATEGIC products, results which lead to superior
ALLIANCE levels of profitability, sales growth, and
customer retention.
Complementarity of partners' resource-
based contributions will be positively The altemative explanations discussed in
related to strategic alliance performance. the previous section a1so provide potential
Resource based motives cited as key avenues for future reseach. However, this
reasons for Taiwan high technology firms study highlighted alliance type and
allying include access to newly developed alliance experience in impacting alliance
technologies, capabilities, or general management capability in the
‐ 8 ‐


entrepreneurial context. (1) The further Argyris, C and Schön, D.A. (1978).
study should investigate what other Organizational learning: A theory of
factors, besides alliance type, alliance action perspective. Addison-Wesley,
experience and the establishment of a Reading, MA.
dedicated alliance functions are critical in
developing and enhancing a firm's alliance Brandt, Richard (1989). Microsoft is
strategies. (2) In future research, if it is like an elephant rolling around,
possible to obtain data from the other squashing ants. Business Week,
country sample, a better insight about (October 30), 148-152.
understanding the significant re1ationships
Bucklin, L.P. and Sengupta,
between strategic alliance success factors
S.(1993).Organizing successful co-
and business performances.(3) A limitation
marketing alliances. Journal of
of this study, of course, is that it deals only
Marketing, 57 (2), 32–46.
with Taiwan high technology firms
perceptions about their alliance strategies Bulter, R. and Sohod, S.,(1995).
and business performance. Future research Joint-venture autonomy: Resource
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‐ 11 ‐


FIGURE 1 THE CONCEPT MODEL
Marketing‐ Based
H1
Strategic Alliance
Strategic γ
Alliance
Motivation Financial
H2
Performance
Resource‐ Based
Strategic Alliance
Learning‐ Based
Strategic Alliance
H3
‐ 12 ‐


FIGURE 2. FINANCIAL PERFORMANCE
ε1 Liabilities/assets ratio

λ 11
Y1 111
Financial structure
ε2 Long term cash/fixed assets ratio λ 21 η1
Y2
ε3 Current ratio λ 32
Y3
111
ε4 Quick ratio λ42 Solvency:
Y4 η2
ε5 Times Interest Earned Ratio λ 52
Y5 111
ε6 Average collection turnover γ11
Y6
ε7 Average collection days λ63 γ21
λ 73
Y7 111
ε8 Average inventory turnover
111
λ83
Y8
83 Operating performance γ31
ε9 Average inventory days λ 93 Financial performance
η3
Y9 111
λ 103 ξ1
ε10 Fixed assets turnover
111
Y10 λ 113
ε11 Total assets turnover 111
Y11
ε12 ROS γ41
Y12 λ 124
ε13 ROE 111
Y13 λ 134
γ51
ε 14
Operating income to paid-in capital λ 144
111
Y14 111 Profitability:capability
ε15 Profit before tax to paid-in capital λ 154 η4
Y15 111
Net profit to sales λ 164
ε16
Y16 111
λ 174
ε17 Earnings per share
111
Y17
ε18 Cash flow ratio λ 185
Y18
111
ε19 Cash flow adequacy ratio λ 195 Cash flow:
Y19 η5
111
ε20 Cash flow reinvestment ratio λ 205
Y20
111
‐ 13 ‐


FIGURE 3 THE SEM RESULTS FOR FINANCIAL PERFORMANCE
Liabilities/assets ratio
0.28 Y1 0.85
Financial structure
Long term cash/fixed assets ratio η1
Y2
0.16 0.9211
Current ratio
0.08 Y3
0.95
Quick ratio Solvency:
0.07 Y4 0.96 η2
Times Interest Earned Ratio
0.22 Y5 0.88
Average collection turnover
0.18 Y6
0.90
Average collection days
0.16 Y7
Average inventory turnover
0.92
0.11 Y8
0.94 Operating performance
Average inventory days Financial performance
0.14 Y9 0.93
η3
ξ1
Fixed assets turnover 0.95
0.08 Y10
Total assets turnover 0.89
0.20 Y11
ROS
0.11 Y12 0.94
ROE
0.14 Y13
0.93
Operating income to paid-in capital
0.07 Y14 0.96 Profitability:capability
Profit before tax to paid-in capital η4
0.97
0.05 Y15
Net profit to sales 0.84
0.29 Y16
0.82
Earnings per share
Y17
0.33
Cash flow ratio 0.95
0.08 Y18
Cash flow adequacy ratio Cash flow:
0.05 Y19 0.97 η5
Cash flow reinvestment ratio
0.07 Y20 0.96
‐ 14 ‐


FIGURE 4 SEM OF STRATEGIC ALLIANCE MOTIVATION
marketing based 0.319
0.226
0.148 Motivation Financial

Performance
resource based

learning based
0. 507
TABLE 1. CHALLENGES AND CONCEPTUALIZATIONS OF MARKETING

BASED STRATEGIC ALLIANCES
Marketing Based Strategic Alliances

Challenges (1) determining the relative levels of partner funding contributions
(2) balancing power and decision-making authority among partners
(3) budgeting for marketing versus other tourism activities such as
research and evaluation
(4) balancing political imperatives with market forces in a more
holistic policy context of government–industry
interaction(UNWTOBC, 2003).
Conceptualizations (1) cooperation requires interrelated behavior by two or more parties
(2) such behavior is voluntary
(3) cooperation is motivated by the desire to achieve both individual
and joint objectives (Casson and Buckley, 1988).
TABLE 2. ADVANTAGES OF LEARNING BASED STRATEGIC ALLIANCES
Learning Based Strategic Alliances

Advantages 1. Through learning from each other, partners may accumulate substantial
experience and lessons on how to avoid repetitious mistakes, how to
reduce production costs and transaction costs, and how to enhance the
capacity of mutual understanding, coordination, and problem solving
(Lei, Slocum, & Pitts, 1997).
2. Partners can learn together in the course of collaboration, and jointly
develop new capabilities and skills (Inkpen and Tsang, 2005 and
Tiemessen et al., 1997).
3. Each of the partners can bring such knowledge into the collaboration,
thus giving the other an opportunity to access competencies and skills
developed and acquired prior to entering into the focal collaboration
(Inkpen and Tsang, 2005 and Kogut, 1988).
‐ 15 ‐


TABLE 3. SAMPLE DISTRIBUTION OF TAIWAN’S HIGH-TECH COMPANIES
Industry Samples of Companies
Integrated circuits 42
PC/Peripherals 52
Telecommunication 34
Optoelectronics 7
Precision machinery 12
Biotechnology 5
Total Samples 152
TABLE 4. MEASURES OF BUSINESS PERFORMANCE
variables Indicator Measures Scale
Business Financial (1) financial structure. Financial

performance performance ratio
(2) solvency
(3) operating capability
(4) profitability capability
(5) cash flow
TABLE 5. MEASURES OF STRATEGIC ALLIANCE MOTIVATION
variables Indicator Measures Scale
Motivation of Marketing based (1)share market operation risk 7 point

strategic motivation Likert
alliance (2)open new market
scale
(3)increase market share
(4)develop new product
Resource based (1)build economic scale

motivation
(2)ensure the resource of raw material
(3)cost reduction and competitive edge
‐ 16 ‐


improvement
(4)investment portfolio and risk-avoidance
orientation
Learning based (1)reduce R&D cost

motivation (2)accelerate technology transfer
(3)improve learning curve effect
TABLE 6. STANDARDIZED REGRESSION WEIGHTS AND P-VALUE OF THE

STRATEGIC ALLIANCE SEM MODEL.
Path Standardized Regression Weight p
Marketing-Based Alliance Motivation 0.319** 0.007

→Business Performance
Resource-Based Alliance Motivation 0.148** 0.005

Learning-Based Alliance Motivation 0.507** 0.003

Alliance Motivation 0.226** 0.002

→Alliance Relationship Management
* p < 0.05 ; ** p < 0.01 ; *** p < 0.001

‐ 17 ‐


MARKETING AND
MANAGEMENT RESEARCH
CUSTOMER AWARENESS ANALYSIS OF

PRIVATE LIFE INSURANCE IN INDIA- LEARNING FROM KERALA
RESHMI AUGUSTINE*; DR.K.S.CHANDRASEKHAR**
*Sathyabama University Chennai India

**Insitute of Management in Kerala
University of Kerala Thiruvananathapuram India
ABSTRACT
Life Insurance market in India is growing rapidly through the liberal approach
from the Government of India. The growing upward trends in Indian economy
and share market increased boom of life insurance sector. Different banks and
financial groups through tie ups with global players are trying to capture the
Indian Life Insurance Market through their aggressive marketing techniques,
product innovations and unbeatable customer service tactics comparing to the
market giant Life Insurance Corporation of India. Since the foreign private
players are using an effective strategy of fostering tie up with prominent Indian
companies with immense good will and popularity that makes their entry smooth
and promising. The Republic of India is the eleventh biggest market in the world
and fifth-largest in Asia. In the financial year 2007, total life insurance premium
volume of India was USD 34.59 billion, which is 1.6% of the total world life
premium. This paper is based on a questionnaire based survey undertaken at the
state of Kerala- ‘the God’s own country’ in the Indian sub continent. It sheds
light into the customer perspectives on the level of awareness of private life
insurance companies; their processing and key factors considered while buying
life insurance policies by the population of Kerala. The findings of the study open
doors into the impressive customer orientation of private players and security as
the major driving factor for buying life insurance policies so that players can
frame their own strategies to make their role effective in the market..
KEYWORDS: liberalization, life insurance companies, processing.
INTRODUCTION a deep influence in the insurance market

all over the world. Financial market
Insurance is the indispensable part of globalisation has supported parallel by the
economy and one of the strongest pillars of globalisation of Insurance sector. There is
Indian financial market.The tides of tremendous increase in Trade, Direct
globalisation and the global meltdown has Investment and Portfolio Investment,
‐ 18 ‐


whilst there was a clear demand for innovations in life insurance market which
insurance services particularly in the has been popularised by private players is
emerging economies as India. Unit Link products ULIPs) which allows
Globalisation of insurance market in India wide range of flexibility for the customers.
has enabled the foreign life insurance Moreover, IRDA has provided guidelines
players to enter in the Indian market and for Unit Linked products that allow the
there were reciprocal benefits. minimum level of sum assured, minimum
period of premium payment and other
According to a report by Swiss Re (Sigma requirements, including NAV computation
No.4/2000), the major driving forces of methodology. Additionally, life insurance
globalization in insurance market were companies were keen to understand and
identified to ‘push’ and ‘pull’ factors. The capitalize the need for structured
push factors are the motives of insurance retirement plans; as long-term pension and
companies to move out to the markets that fund management.
are emerging as India due to the potential
growth of the market, direct investments The traditional bondage of LIC in Indian
and increase in global trade. The other key life insurance market has been released
factor for pushing is mainly due to the with private players’ entry. Almost 99%
saturated markets of developed countries of the total life insurance premium has
like United Kingdom, Japan, United States grabbed by Life Insurance Corporation of
etc. The pull factors are characterized by India, till the year 2002; however,
the key motives behind foreign players to liberalisation increased private players’
operate in local market due to the participation in the life insurance market.
economic growth, trade and considerable Private players have adopted impressive
capital requirements to cover risks. growth strategies, through innovative
products that were tailor made to the
For a long time in India, life insurance has requirements of the clients and developed
been considered as a main tax saving effective distribution channels. Further, the
option. Nowadays this mindset is changing premium of private players increased at a
slowly. Apart from the tax benefits, CAGR of 153% during 2002-2007, whilst
insurance is being taken by many. All the the total premium of LIC increased by
players irrespective of private and public 21%. During the year 2002-2007, the first
aspects are offering now life products that year premium (including single) of LIC
suit the specific requirements of people increased at a CAGR of 23% to Rs 562.23
and various demographic characteristics. billion from Rs 195.89 billion in 2002. At
The most popular and common products the same time the premium level of private
offered by various life insurers are money players increased tremendously at a CAGR
back, term assurance, whole life, of 135% to Rs 193.94 billion in 2007 from
endowment policies and unit linked Rs 2.69 billion in 2002.
insurance plans. One of the latest
TABLE NO: 1
‐ 19 ‐


The increasing prominence of private unit linked products to acquire its lost
players were behind flourished through the market share; thereby gained its share in
remarkable growth was popularity of unit the total unit link from 37% in 2005 to
linked products. LIC tried to present many 54% in 2007.
TABLE NO: 2
An Article by Sanjay Chakraborthy Insurance Regulatory and

(2005), it is mentioned that India has about Development Authority (IRDA) Act, 1999
300 million people who can afford to buy – Based on the recommendations of the
life , health and pension plan products. Out Malhotra committee, , the insurance bill
of this only 20 percent have insurance and has passed in the parliament by the
that too covers only 25 percent of their Government of India. Hence the insurance
needs and financial capacity. The sector opened for private insurance
remaining 80 percentage have no companies with the execution of IRDA
insurance cover. The life insurance market Act, 1999. The insurance industry saw a
of India, therefore has tremendous growth tremendous changes from liberalization to
potential. nationalization and back again to
liberalization in early 2000 (quoted by
‐ 20 ‐


Mohit Anand from India 2010 - A Lloyd’s affected the Kerala’s insurance market.
report 2007), through a fragmentary de- Moreover, foreign investment was also
regulation of insurance sector and there by sanctioned and surpassed at 26% holding
fostering the initial steps of of private and in the Indian insurance companies. (IRDA
foreign companies into the insurance Act, 1999).
market of India. This has considerably
DISTINGUISHED AND REMARKABLE EVENTS IN THE INDIAN INSURANCE

MARKET
TABLE NO: 3 HISTORY OF INDIAN INSURANCE MARKET (1850-2007)
Source: India 2010 A Lloyd’s View (2007)

Sanjay Chakraborthy (2005), also insurance business in 2007. Life insurance
quoted that an estimated existing insurance companies are expected to record a 100
market in India in terms of ‘premium’ and per cent increase in new business in
‘income’, reveals that, out of an insurable financial year 2007, and that growth is not
population of 300 million, 50 million have going to taper off. The industry is
the capacity to pay a premium of Rs. confident of maintaining the rate, typical
10,000 per year, 100 million have the of a flourishing industry. Says N.S.
capacity to pay Rs. 7,000 per year and 150 Kannan, executive director, ICICI
million can pay Rs. 3,500 per year. On this Prudential Life Insurance: "First-year
basis the total annual insurance premium premiums increased by 17 per cent in
would be Rs. 1750 billion. The NCAER 2004-05 and 34 per cent in 2005-06. This
has also estimated an insurable population year, it has been 100 per cent. The
of 240 million. fundamentals of the economy are good and
the life insurance industry is riding this
According to Deepti Bhaskaran boom." The rise in disposable income of
(2007) in her article “Insurance umbrella individuals has increased the need for
size to double, says industry”, expansion, investment options. With aggressive sales
product innovations and reforms are three and the two-in-one proposition of unit-
themes that will dominate the life linked insurance plans (ULIPs), insurers
‐ 21 ‐


swooped in on this opportunity, especially ‘Statistical Packages for Social Sciences
during the period preceding policy changes (SPSS), an IBM company software and
in ULIPs that strengthened their insurance Microsoft Excel. For documentation
orientation Microsoft word 2007 and “Adobe Page
Maker 9.0’ were used.
RESEARCH METHODOLOGY
ANALYSIS & INFERENCE
The research has passed through secondary
and primary research perspectives. From a sample of 481 clients a survey was
Secondary research has conducted by conducted from different districts of
collecting data mainly from the annual Kerala state to:
reports of IRDA, different insurance
• Ranking of the product servicing
companies’ annual reports and other
quickness of LIC and private
publications through which the boarder
players
aspects of industry and markets available.
Further, the primary research has
• Rank the level of awareness of
conducted through a field survey using
private life insurance players
questionnaire among the clients of seven
prominent life insurance players based on
the consistency of their market share • A comparison of customer service
ranking for the last two years. As far as the effectiveness of both public and
research design is considered, a private sector players
probabilistic area sampling had been used COMPARISON OF PRODUCT
to increase the sampling efficiency. The SERVICING TIME BETWEEN LIC &
data was collected through a random PRIVATE PLAYERS
selection from the sample frame and was
provisioned for non response errors. A paired sample test was applied to the
groups (LIC & Private players) to
DATA ANALYSIS AND TOOLS USED determine the quickness of product
Analyses of various statistical data were servicing using a 4 point scale (1-delayed
collected for the secondary sources. The to 4 – very quick) and the results are as
collected primary data has analysed using under
TABLE NO: 4 PAIRED SAMPLES STATISTICS
Mean N Std. Deviation Std. Error Mean

Life insurance corporation
1.73 481 .674 .031
(LIC)
Private Insurance Companies 3.55 481 .511 .023
The above table shows the descriptive standard deviation are given in the table
statistic used to compare the product for n = 481
servicing quickness and the mean and
‐ 22 ‐


TABLE NO: 5 PAIRED SAMPLES CORRELATIONS
N Correlation Sig.
LIC & Private Players 481 .000 .999
The previous table provides the paired no correlation between both the insurance
sample correlations between the two players.
paired scores. It can be seen that there is
TABLE NO: 6 PAIRED SAMPLES TEST
Paired Differences
95% Confidence
Std. Interval of the
Std. Error Difference Sig. (2-
Mean Deviation Mean Lower Upper t df tailed)
LIC & Private - -
.846 .039 -1.889 -1.737 480 .000
Players 1.813 47.024
The above table shows the paired sample t OF THE LIFE INSURANCE
test. The significance for the comparison COMPANIES
of the insurance players was p < 0.5. Thus
the difference in service quickness is A paired sample test was applied to the
statistically significant and we can infer groups (LIC & Private players) to
from the mean in the first table that determine the customer care using a 5
quickness of product servicing by private point scale (1-extremely poor to 5 –
players is higher compared to LIC. extremely good) and the results are as
under
COMPARISON OF CUSTOMER
CARE BY DIFFERENT INTERFACES

Pair 1 LIC Agents 3.52 481 .512 .023
Private Player Agents 3.79 481 .764 .035
Pair 2 LIC Employees 3.46 481 .499 .023
Private Player Employees 4.00 481 .815 .037
Pair 3 LIC Higher Officials 2.76 481 1.103 .050
Private Player Higher
4.00 481 .824 .038
Officials
‐ 23 ‐


statistic used to compare the customer for n = 481
service effectiveness and the mean and
N Correlation Sig.
Pair 1 LIC & Private Player Agents 481 .053 .244
Pair 2 LIC & Private Player Employees 481 .013 .783
Pair 3 LIC & Private Player higher
481 -.031 .499
officials
The above table provides the paired be seen that there is no correlation between
sample correlations between the two both the insurance players.
paired scores for three stakeholders. It can
Paired Differences
95% Confidence
LIC & Private
-.268 .897 .041 -.349 -.188 -6.556 480 .000
Player Agents
LIC & Private -
-.536 .950 .043 -.622 -.451 480 .000
Player Employees 12.377
LIC & Private
- -
Player higher 1.397 .064 -1.362 -1.112 480 .000
1.237 19.418
officials
The above table shows the paired sample t BEHAVIOURAL COMPARISON OF

test. The significance for the comparison LIC & PRIVATE PLAYERS
of the insurance players was p < 0.5. Thus TOWARDS CUSTOMERS
the difference in customer service is
statistically significant and we can infer A paired sample test was applied to the
from the mean in the first table that groups (LIC & Private players) to
customer service by the stakeholders of determine the behavior towards customers
private players is higher compared to LIC. using a 5 point scale (1-very poor to 5 –
very good) and the results are as follows.
‐ 24 ‐



Behaviour of LIC
2.37 481 .544 .025
employees
Behaviour of Private player
3.91 481 .836 .038
employees
statistic used to compare the customer for n = 481
service effectiveness and the mean and
N Correlation Sig.
Behaviour of LIC & Private player
481 .019 .676
employees
The above table provides the paired be seen that there is no correlation between
sample correlations between the two both the insurance players.
paired scores for three stakeholders. It can
Paired Differences
95% Confidence
Behaviour of LIC &
-
Private player -1.545 .989 .045 -1.633 -1.456 480 .000
34.262
employees
The above table shows the paired sample t AWARENESS ON PRIVATE

test. The significance for the comparison INSURERS
of the insurance players was p < 0.5. Thus
the difference in behavior towards A one sample test was applied to compare
customers is statistically significant and the mean of Private players group to
we can infer from the mean in the first determine the awareness using a 4 point
table that behavior of private players scale (1-not at all aware to 4 – fully aware)
towards customers is warm and good when against the hypothesized mean of 3 and the
compared to LIC employees. results are the following.
‐ 25 ‐


TABLE NO: 13 ONE-SAMPLE STATISTICS
N Mean Std. Deviation Std. Error Mean

Bajaj 481 3.52 .512 .023
Metlife 481 3.46 .499 .023
Brila Sunlife 481 2.76 1.103 .050
ING Vysya 481 1.97 .968 .044
Max Newyork 481 1.94 .906 .041
HDFC Standard 481 3.46 .499 .023
ICICI prudential 481 2.76 1.106 .050
SBI Life 481 1.97 .973 .044
Tata AIG 481 2.07 .992 .045
Dabur CGU 481 2.10 1.000 .046
Bharati AXA 481 2.09 .998 .045
Reliance 481 3.53 .512 .023
The previous table shows the descriptive standard deviation are given in the table
statistic used to understand the awareness for n = 481
of private players and the mean and
TABLE NO: 14 ONE-SAMPLE TEST
Test Value = 3
95% Confidence
Interval of the
Sig. (2- Mean Difference
t df tailed) Difference Lower Upper
Bajaj 22.243 480 .000 .520 .47 .57
Metlife 20.284 480 .000 .462 .42 .51
Brila Sunlife -4.795 480 .000 -.241 -.34 -.14
ING Vysya -23.321 480 .000 -1.029 -1.12 -.94
Max New york -25.604 480 .000 -1.058 -1.14 -.98
HDFC Standard 20.199 480 .000 .459 .41 .50
ICICI prudential -4.740 480 .000 -.239 -.34 -.14
SBI Life -23.241 480 .000 -1.031 -1.12 -.94
Tata AIG -20.583 480 .000 -.931 -1.02 -.84
Dabur CGU -19.697 480 .000 -.898 -.99 -.81
Bharati AXA -19.968 480 .000 -.909 -1.00 -.82
Reliance 22.522 480 .000 .526 .48 .57
‐ 26 ‐


From the above table, the ‘t’ value of each The independent variable availing
private player and the degree of freedom insurance policy were ranked by the
and the two tailed significance is given. clients on various factors like Bonus, tax
About 5 private life insurance players are saving, risk, family protection, housing
mostly recalled and the awareness of these loan, high security and the descriptive are
players is high. as under.
FACTORS RANKED IN AVAILING
LIFE INSURANCE POLICES
TABLE NO: 15 DESCRIPTIVE STATISTICS
N Mean Std. Deviation Minimum Maximum

Bonus 481 4.02 1.503 1 7
Tax Saving 481 4.36 1.749 1 7
Risk 481 3.74 1.767 1 7
Family Protection 481 4.35 2.107 1 7
Housing Loan 481 4.57 2.256 1 7
High Security 481 3.41 2.131 1 7
The descriptive statistics table provides among the availing of insurance policy and
familiar statistics that were useful for the means of these ranks are used in the
interpreting the mean rank of the ratings Friedman.
TABLE NO: 16 RANKS
Mean Rank
Bonus 3.39
Tax Saving 3.83
Risk 3.22
Family Protection 3.67
Housing Loan 3.93
High Security 2.96
The Ranks table shows the mean rank for each of the factors of availing insurance policy.
From the above mean, it can be seen that the security was ranked as the most important factor
in availing insurance policy.
TABLE NO: 17 TEST STATISTICS
N 481.000
Chi-Square 97.645
df 5.000
Asymp. Sig. .000
‐ 27 ‐


FRIEDMAN TEST LIC has to concentrate more on
developing strategies to minimise their
The Friedman test statistic table tests the product servicing time by working on
null hypothesis that the six related strategies as providing agents and other
variables come from the same population. officials training and development
For each case, the six variables are ranked. programmes to improve the effectiveness
The test statistic is based on these ranks. of customer service. Moreover, in this fast
The Asymp. Sig (asymptotic significance, moving Kerala market it is always
which means this is not an exact advisable to register in mind the fact that
significance level) of p< 0.05 indicates ‘time is money’. From the secondary
that there is a significant overall difference statistics, it is found that LIC is the market
among the mean ranks. leader; however it is advisable not to deny
the fact that LIC’s market share is
FINDINGS diminishing every year and private players
are trying to penetrate more in Kerala
• Based on ‘t’ test it is found that market through their effective customer
there is significant difference in oriented strategies. Further, private players
product service quickness of could raise the level of awareness among
private players as it is higher the customers through effective
compared to LIC. Using a paired positioning strategies and promotional
sample ‘t’ test it is found that there aspects so that they will be popular in the
is difference in behavior towards Kerala market and that way they can
customers. It is evident from the improve the market share.
test that the behavior of employees
of private players towards CONCLUSION
customers is more warm and
friendly when compared to LIC. The life insurance scenario of Kerala has
been changing day by day and witnessing
• About 5 private life insurance tremendous development in the field if we
players are mostly recalled and the count from the liberalization period. This
awareness of these players is high. paper highlights the fact that life insurance
Reliance, Bajaj, Metlife, Birla policies were availed due to the highly
Sunlife & ICICI Prudential has security aspects. Moreover the four private
been ranked higher as far as players were ranked higher for the
customer awareness is considered. awareness factor and the customer
satisfaction of service of private players
• Using Friedman test that the was ranked high. However the research
independent variable availing suggests a propensity to focus more
insurance policy were ranked by corporate social responsibility and
the clients on various factors like philanthropic activities to increasing the
Bonus, tax saving, risk, family company awareness among people of
protection, housing loan, high Kerala.
security. It has found that security BIBLIOGRAPHY
has ranked as the highest
dependent variable in availing life Chakrabothy (2005, p.82) “Making Sales
insurance policies. Promos work Better”, Indian Management,
Vol: 44, Issue 4.
SUGGESTIONS
‐ 28 ‐


Deepthi Bhaskaran (2007), “Insurance http://www.dnb.co.in/BFSI/Insurance%20
umbrella size to double, says industry”, overview.asp [Accessed on 1st February
The Hindu Business Line, March edn. 2011]
India
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Research - An applied orientation”, 6th
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– Changing policies and emerging
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Sector in 21st Century: an Outlook”,
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strategy for Indian Insurance companies in
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Article No: 349, May 17,2006,
www.indianmba.com [Accessed on 28th
December 2011].
‐ 29 ‐


MARKETING AND
MANAGEMENT RESEARCH
A STUDY OF BURNOUT AND

ORGANIZATIONAL HEALTH AMONG HVPNL EMPLOYEES
DR. NIRMALA KAUSHIK*
*Deptt. of Applied Psychology G.J.U.S.&T. Hisar Haryana
ABSTRACT
Health is a multidimensional concept. All aspects of living biological,

psychological and social world must be considered in it. Mental health is a
fundamental component of health through which one realizes one’s own
cognitive, affective and relational abilities. A healthy mental disposition allows
coping well with life’s challenges, to work productively and to make a positive
contribution to one’s community. Many health related problems are increasing
day by day in industrial organizations due to burnout. By keeping all these views
in mind, the present study was carried out in Dhakshin Haryana Bijli Vitran
Nigam Ltd., Hisar, and Haryana. The present study was conducted on 200
employees (100 males and 100 females). The main objective of the study was to
know the relationship between Organizational health and Burnout among the
employees. The results explained significant and negative correlation between
Organizational health and Burnout. The results of present study also explained
the significance of difference between male and female employees for
Organizational health and Burnout.
KEYWORDS: Organizational Health, Burnout, Dhakshin Haryana Bijli Vitran

Nigam, employees.
INTRODUCTION personal accomplishment that can occur

among individuals who do “people work”
BURNOUT of some kind. Burnout is a state of
Burnout is a process that begins with physical, emotional, and mental
excessive and prolonged levels of job exhaustion caused by long term
stress. The stress produces strain in the involvement in emotionally demanding
worker (feelings of tension, irritability and situations.
fatigue). The process is completed when Three things are associated with burnout:
the worker defensively copes with the job
and becomes apathetic, cynical or rigid. Role conflict: A person who has
Burnout is a syndrome of emotional conflicting responsibilities will begin to
exhaustion, depersonalization, and reduced feel pulled in many directions and will try
to do everything equally well without
‐ 30 ‐


setting priorities. The result will be the most often referring to the experience of
feelings of fatigue or exhaustion associated exhaustion.
with burnout. Of the three aspects of burnout, exhaustion
Role ambiguity: The individual is the most widely reported and the most
does not know what is expected of her. thoroughly analyzed. The strong
She knows she is expected to be a good identification of exhaustion with burnout
career person but is not quite sure how to has led some to argue that the other two
accomplish this because she has no role aspects of the syndrome are incidental or
model or guidelines to follow. This result unnecessary (Shirom 1989). However, the
is that she never feels that she has fact that exhaustion is a necessary criterion
accomplished anything worthwhile. for burnout does not mean it is sufficient.
If one were to look at burnout out of
Role overload: The individual can’t
context, and simply focus on the individual
say no and keeps on taking on more
exhaustion component, one would lose
responsibility than he can handle until he
sight of the phenomenon entirely.
finally burns out.
Although exhaustion reflects the stress
SYMPTOMS OF BURNOUT
dimension of burnout, it fails to capture
Given what burnout is, the symptoms of the critical aspects of the relationship
burnout are much as you would expect people have with their work. Exhaustion is
them to be. Physical symptoms can include not something that is simply
physical fatigue, frequent illness and sleep experienced—rather, it prompts actions to
problems. distance oneself emotionally and
Emotional symptoms include cognitively from one’s work, presumably
disillusionment with the job; the loss of a as a way to cope with the work overload.
sense of meaning and cynicism towards Within the human services, the emotional
our organizations or clients; feelings of demands of the work can exhaust a service
helplessness; frustration of efforts and a provider’s capacity to be involved with,
lack of power to change events; strong and responsive to, the needs of service
feelings of anger against the people we recipients. Depersonalization is an attempt
hold responsible for the situation; and to put distance between oneself and
feelings of depression and isolation. service recipients by actively ignoring the
qualities that make them unique and
Behavioral symptoms can include engaging people. Their demands are more
increasing detachment from co-workers, manageable when they are considered
increased absenteeism, and increased impersonal objects of one’s work. Outside
harshness in dealing with our teams, of the human services, people use
marked reduction in our commitment to cognitive distancing by developing an
our work, and increased alcohol indifference or cynical attitude when they
consumption. These symptoms reflect are exhausted and discouraged. Distancing
exhaustion and a loss of satisfaction with is such an immediate reaction to
work. exhaustion that a strong relationship from
DIMENSIONS OF BURNOUT exhaustion to cynicism (depersonalization)
is found consistently in burnout research,
Exhaustion is the central quality of across a wide range of organizational and
burnout and the most obvious occupational settings.
manifestation of this complex syndrome.
When people describe themselves or The relationship of inefficacy (reduced
others as experiencing burnout, they are personal accomplishment) to the other two
‐ 31 ‐


aspects of burnout is somewhat more People who are experiencing burnout can
complex. In some instances it appears to have a negative impact on their colleagues,
be a function, to some degree, of either both by causing greater personal conflict
exhaustion, cynicism, or a combination of and by disrupting job tasks.
the two (Byrne 1994, Lee & Ashforth Thus, burnout can be “contagious” and
1996). A work situation with chronic, perpetuate itself through informal
overwhelming demands that contribute to
interactions on the job. There is also some
exhaustion or cynicism is likely to erode evidence that burnout has a negative
one’s sense of effectiveness. Further, “spillover” effect on people’s home life
exhaustion or depersonalization interfere (Burke & Greenglass 2001).
with effectiveness: It is difficult to gain a
sense of accomplishment when feeling WHERE DOES BURNOUT OCCUR?
exhausted or when helping people toward Burnout is an individual experience that is
whom one is indifferent. However, in specific to the work context. Thus, the
other job contexts, inefficacy appears to research over the past 25 years has
develop in parallel with the other two maintained a consistent focus on the
burnout aspects, rather than sequentially situational factors that are the prime
(Leiter 1993). The lack of efficacy seems correlates of this phenomenon.
to arise more clearly from a lack of
relevant resources, whereas exhaustion and JOB CHARACTERSTICS
cynicism emerge from the presence of Quantitative job demands (e.g. too much
work overload and social conflict. work for the available time) have been
OUTCOMES studied by many burnout researchers, and
the findings support the general notion that
The significance of burnout, both for the burnout is a response to overload.
individual and the workplace, lies in its Experienced workload and time pressure
links to important outcomes. Most of the are strongly and consistently related to
outcomes that have been studied have been burnout, particularly the exhaustion
ones related to job performance. There has dimension.
also been some attention paid to health
outcomes, given that burnout is considered This pattern is found with both self-reports
a stress phenomenon. However, the of experienced strain and more objective
research findings have to be interpreted measures of demands (such as number of
with some caution because of the reliance hours worked and number of clients).
on self-report measures (rather than other Studies of qualitative job demands have
indices of performance or health) and the focused primarily on role conflict and role
relative absence of methodological designs ambiguity, both of which consistently
that permit causal inferences. show a moderate to high correlation with
burnout. Role conflict occurs when
JOB PERFORMANCE conflicting demands at the job have to be
Burnout has been associated with various met, whereas role ambiguity occurs when
forms of job withdrawal—absenteeism, there is a lack of adequate information to
intention to leave the job, and actual do the job well. Other qualitative job
turnover. However, for people who stay on demands (such as the severity of clients’
the job, burnout leads to lower problems) have only been studied
productivity and effectiveness at work. occasionally, but the correlations are in the
Consequently, it is associated with same direction.
decreased job satisfaction and a reduced
commitment to the job or the organization.
‐ 32 ‐


In addition to studying the presence of job computer programmers). Although the
demands, burnout researchers have burnout concept seems to pertain to this
investigated the absence of job resources. wider range of occupations, there was still
The resource that has been studied most the hypothesis that the emotional stressors
extensively has been social support, and of people-work were something uniquely
there is now a consistent and strong body related to burnout. Earlier research did not
of evidence that a lack of social support is find much evidence to support such a
linked to burnout. Lack of support from hypothesis; instead, common job-related
supervisors is especially important, even stressors (such as workload, time pressure,
more so than support from coworkers. or role conflicts) correlated more highly
Within the social support literature, there with burnout than client-related stressors
is also a “buffering” hypothesis that (such as problems in interacting with
suggests that social support should clients, frequency of contact with
moderate the relationship between job chronically or terminally ill patients, or
stressors and burnout (i.e. the relationship confrontation with death and dying).
will be strong when social support is low, However, new research has focused
but weak when support is high). However, explicitly on emotion-work variables (e.g.
studies of this hypothesis have met with requirement to display or suppress
mixed success, and it is not clear whether emotions on the job, requirement to be
this outcome is due to methodological or emotionally empathic) and has found that
theoretical issues. these emotion factors do account for
additional variance in burnout scores over
Another set of job resources has to do with
and above job stressors (Zapf et. al 2001).
information and control. A lack of
feedback is consistently related to all three ORGANIZATIONAL
dimensions of burnout. Burnout is also CHARACTERISTICS
higher for people who have little The increasing breadth of occupational
participation in decision making. sectors has required a rethinking of the
Similarly, a lack of autonomy is correlated situational context for burnout. Prior
with burnout, although the strength of the research has tended to focus on the
relationship is weaker. immediate context in which work occurs,
OCCUPATIONAL whether that is a nurse’s work with
CHARACTERISTICS patients in a hospital or a teacher’s work
with students in a school. However, this
The initial work on burnout developed out
work often takes place within a larger
of the occupational sector of human
organization that includes hierarchies,
services and education (which continues to
operating rules, resources, and space
be the primary focus of burnout studies).
distribution. All of these factors can have a
Of particular concern in these occupations
far-reaching and persistent influence,
were the emotional challenges of working
particularly when they violate basic
intensively with other people in either a
expectations of fairness and equity.
care giving or teaching role. Later research
Consequently, the contextual focus has
expanded the focus to occupations that
been broadened to include the
included contact with people, but for
organizational and management
which the contact fell short of the demands
environment in which work occurs. This
of this more extensive relationship (e.g.
focus has highlighted the importance of
managers), and eventually some studies
the values implicit in organizational
utilized occupations for which contact with
processes and structures, and how these
people was a lesser consideration (e.g.
‐ 33 ‐


values shape the emotional and cognitive Among younger employees the level of
relationship that people develop with their burnout is reported to be higher than it is
work. This research has important among those over 30 or 40 years old
implications for burnout, but because it is Age is confounded with work experience,
still fairly new, a summary of major so burnout appears to be more of a risk
patterns in the data is not yet warranted. earlier in one’s career. The reasons for
The organizational context is also shaped such an interpretation have not been
by larger social, cultural, and economic studied very thoroughly. However, these
forces. Recently, this has meant that findings should be viewed with caution
organizations have undergone a lot of because of the problem of survival bias—
changes, such as downsizing and mergers i.e. those who burn out early in their
that have had significant effects on the careers are likely to quit their jobs, leaving
lives of their employees. This is perhaps behind the survivors who consequently
most evident in changes in the exhibit lower levels of burnout.
psychological contract—i.e. the belief in The demographic variable of sex has not
what the employer is obliged to provide been a strong predictor of burnout (despite
based on perceived promises of reciprocal
some arguments that burnout is more of a
exchange (Rousseau 1995). Now female experience). Some studies show
employees are expected to give more in higher burnout for women, some show
terms of time, effort, skills, and flexibility, higher scores for men, and others find no
whereas they receive less in terms of overall differences. The one small but
career opportunities, lifetime employment, consistent sex difference is that males
job security, and so on. Violation of the often score higher on cynicism. There is
psychological contract is likely to produce also a tendency in some studies for women
burnout because it erodes the notion of to score slightly higher on exhaustion.
reciprocity, which is crucial in maintaining These results could be related to gender
well-being. role stereotypes, but they may also reflect
INDIVIDAUL FACTORS the confounding of sex with occupation
(e.g. police officers are more likely to be
People do not simply respond to the work
male, nurses are more likely to be female).
setting; rather, they bring unique qualities
to the relationship. These personal factors With regard to marital status, those who
include demographic variables (such as are unmarried (especially men) seem to be
age or formal education), enduring more prone to burnout compared with
personality characteristics, and work- those who are married. Singles seem to
related attitudes. Several of these experience even higher burnout levels than
individual characteristics have been found those who are divorced. As for ethnicity,
to be related to burnout. However, these very few studies have assessed this
relationships are not as great in size as demographic variable, so it is not possible
those for burnout and situational factors, to summarize any empirical trends. Some
which suggests that burnout is more of a studies have found that those with a higher
social phenomenon than an individual one. level of education report higher levels of
burnout than less educated employees. It is
DEMOGRAPHIC
not clear how to interpret this finding,
CHARACTERSTICS
given that education is confounded with
Of all the demographic variables that have other variables, such as occupation and
been studied, age is the one that has been status. It is possible that people with
most consistently related to burnout. higher education have jobs with greater
‐ 34 ‐


responsibilities and higher stress. Or it Miles (1973) gave a clear concept of
may be that more highly educated people organizational health as organizational
have higher expectations for their jobs, and health is a set of fairly durable and
are thus more distressed if these secondary system properties which send to
expectations are not realized. transcend short term effectiveness. A
healthy organization in a sense not only
JOB ATTITUDE
survive in its environment but continues to
People vary in the expectations they bring cope adequately over the long run and
to their job. In some cases these continously develops and extends its
expectations are very high, both in terms surviving and coping abilities.
of the nature of the work (e.g. exciting, Organizational health includes goal focus,
challenging, fun) and the likelihood of communication adequacy, optional power
achieving success (e.g. curing patients, equalization, resource utilisation,
getting promoted). Whether such high cohesiveness, morale, Innovativeness,
expectations are considered to be idealistic autonomy, adaption and problem solving
or unrealistic, one hypothesis has been that adequacy.
they are a risk factor for burnout.
OBJECTIVES
Presumably, high expectations lead people
to work too hard and do too much, thus i) To study the degree of
leading to exhaustion and eventual relationship between Burnout
cynicism when the high effort does not and Organizational Health.
yield the expected results. This hypothesis ii) To find out the significant
has received mixed empirical support— difference between Male and
about half of the studies find the Female Employees for
hypothesized correlation, whereas the rest Burnout.
do not. Once again, however, this is an iii) To find out the significant
instance where a correlation does not difference between Male and
actually test the causal relationship Female Employees for
inherent in the hypothesis. Longitudinal Organizational Health
studies with repeated measures will be SAMPLE
necessary to shed light on this issue. The
people who were psychologically healthier The samples included in the study were
in adolescence and early adulthood were randomly drawn from Dhakshin Haryana
more likely to enter, and remain in, such Bijli Vitran Nigam Ltd., Hisar, and
jobs, and they showed greater involvement Haryana. The sample size of the research
and satisfaction with their work (Jenkins & consisted of 200 employees (including 100
Maslach 1994). Male and 100 Female employees). Efforts
ORGANIZATIONAL HEALTH have been made to make the sample more
representative, more purposeful and in
Organization exists in relation with the accordance with the objectives of the
environment and it has to cope with the study.
environment. It is the responsibility of the
management to improve the quality of life TOOLS USED
in an organization to make it healthier. A
healthy organization is one that has a i) MASLACH BURNOUT
srtong sense of its own identity and vision INVENTORY SCALE
and yet has the capacity to readily change
life, growth and vitality which are the This Scale is prepared by Christina
main factors and for the concept of health. Maslach, Susan E. Jackson and
‐ 35 ‐


Michael P. Leiter. There are totally 16 Need Dimensions (D. Resource
items in this scale which are divided Utilization E. Cohesiveness F. Morale)
into 3 subscales namely Emotional 3. Growth and changefulness
Exhaustion (EE), Depersonalization Dimensions (G. Innovativeness H.
(D) and Professional Efficacy (PE). Autonomy I. Adaptation J. Problem
The Reliability and Validity of this Solving Adequacy) Rated on a 5 Point
scale are 0.82 and 0.68 respectively. Scale. The Reliability and Validity of
this scale are 0.94 and 0.85
ii) ORGANIZATIONAL respectively.
HEALTH SCALE
STATISTICAL ANALYSIS
This Scale is prepared by Dr. Haseen
Taj (Senior Lecturer) Bangalore The data obtained were analyzed by
University. There are totally 40 items using the following Statistical Tools.
which are categorized into three
Mean, Standard Deviation,
Dimensions namely 1.Task Conferred
Pearson product moment
Dimensions (A. Goal Focus B.
method of correlation and t-test
Communication Adequacy C. Optional
Power Equalization) 2. Maintenance RESULTS AND DISCUSSION
TABLE: 1 COEFFICIENT OF CORRELATION BETWEEN BURNOUT AND

ORGANIZATIONAL HEALTH
Organizational Health Dimensions

T.C.D M.N.D G.C.D
Burnout Variables
Emotional Exhaustion -0.271** -0.416** -0.394**
Depersonalization 0.123 -0.201* 0.137
Professional Efficacy -0.441** -0.391** -0.314**
**P<0.01 *P<0.05
Note: T.C.D- Task Conferred Dimensions, M.N.D- Maintenance Need Dimensions,
G.C.D- Growth and Changefulness Dimensions.
In Table no. 1 the results revealed that employees to reduce the burnout. As the
Task Conferred Dimensions and employee turnover is very less and almost
Emotional Exhaustion are negatively negligible the employees work more
correlated with each. It means increase in cohesively and same is the reason for high
good organizational health like goal focus, morale for the employee.
communication adequacy and optional
power equalization the exhaustion among Emotional Exhaustion and Maintenance
employees decreases. Mental fatigue Need Dimensions are also negatively
decreases if the score of task conferred correlated with each other. Emotional
dimensions increases. It can help the Exhaustion is also decrease with
Maintenance Need Dimensions like
‐ 36 ‐


Recourse Utilization, Cohesiveness and cohesiveness helps to reduce
Morale. If the resource utilization is proper depersonalization. Good morale level of
in the organization then it can help to the organization also decreases the feeling
reduce the vulnerability to exhaustion of distance towards work.
among the employees. Cohesiveness in
the organization and morale are also help The results explored that Professional
to decrease the sensitivity to exhaustion. efficacy is positively and significantly
In the same way, Growth and correlated with all three dimensions of
changefulness dimensions are also organizational health. It means good
negatively correlated with the exhaustion. organizational health increases the
Growth and changefulness dimension professional efficacy of the employees. If
includes Innovativeness, Autonomy and the goals of the system are clear and
problem solving Adequacy. Being a focused and communication is adequate
Government Organization, autonomy is then professional efficacy of the
defined by rules and the extent to which employees increases. Maintenance needs
the autonomy has to be used. Hence there like resource utilization, cohesiveness and
is least exhaustion. morale are also positively correlated with
professional efficacy. Growth and
Exhaustion and Maintenance changefulness dimensions like
Need are negatively correlated with Innovativeness, autonomy and problem
Depersonalization in the employees. It solving adequacy increases the
means proper utilization of the resources professional efficacy of the employees. It
on the workplace decreases the feeling of is concluded that positive organizational
distance attitude towards work. If the health increases the professional efficacy
employees feel attracted to the of the employees working in that
organization means feeling of organization.
TABLE: 2 SIGNIFICANCE OF DIFFERENCE BETWEEN MALE AND FEMALE

EMPLOYEES FOR BURNOUT
Burnout Variable Sex Mean S.D. t- value
Emotional Male 9.07 5.94

Exhaustion
Female 5.16 3.09 3.456**
Depersonalization Male 29.08 5.23
Female 30.9 3.27 -1.813*
Professional Male 7.34 4.36
Efficacy
Female 6.74 4.05 0.653
**P<0.01 *P<0.05
From the above table2, it may be inferred employees. They have more feeling of
that there is a significant difference burnout than females. On the basis of
between male and female employees for assumption, it can be concluded that
Emotional Exhaustion. The mean scores female employees have more patience than
of male employees are higher than female female employees. On depersonalization,
‐ 37 ‐


there is significant difference between reduced personal accomplishment because
Male and Female Employees at 0.05 level. of their multiple roles. On professional
The mean score of female employees are efficacy there was no significant difference
more than the male employees. The between male and female employees.
female employees have more feelings of
TABLE: 3 SIGNIFICANT DIFFERENCE BETWEEN MALE AND FEMALE

EMPLOYEES FOR ORGANIZATIONAL HEALTH
Organizational Health Variables Sex Mean S.D t-value
Task Conferred Dimensions Male 43.14 7.67

Female 41.9 6.45 0.764
Maintenance Need Dimensions Male 41.27 8.97
Female 43.19 5.22 -1.110
Male 55.64 11.78
Growth and Changefulness Dimensions Female 53.77 6.54 0.827
**P<0.01 *P<0.05
Table 3 shows that there was no significant REFERENCES
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‐ 39 ‐


MARKETING AND
MANAGEMENT RESEARCH
CUSTOMER RELATIONSHIP MANAGEMENT IN

MARUTI UDYOG LTD

DR. IQBAL SINGH*; PALLAVI WADHWA**
*G. N. Khalsa College YNR (Haryana)
**MBA, NIT - Kurukshetra
ABSTRACT
Maruti Udyog Limited, a subsidiary of Suzuki Motor Corporation of Japan, has

been the leader of the Indian car market for about two decades. The company has
a portfolio of 11 brands, including Maruti 800, Omni, premium small car Zen,
international brands Alto and WagonR, off-roader Gypsy, mid size Esteem,
luxury car Baleno, the MPV, Versa, Swift and Luxury SUV Grand Vitara XL7.
Maruti tops customer satisfaction again for sixth year in a row according to the
J.D. Power Asia Pacific 2005 India Customer Satisfaction Index (CSI) Study.
As MUL is ranked No.1 consecutively for over six years for Customer
Satisfaction, so this company will be best suitable to study its Customer
Relationship Programs or Customer Relationship Management (CRM).
The purpose of this project is to:
¾ Relating the theoretical concepts of CRM to the policies that are followed in
Maruti Udyog Ltd.
¾ Study the CRM policies followed by its competitors.
¾ Study the CRM policies followed by global players.
¾ Finding out some more policies that can be followed to increase customer
satisfaction.
METHODOLOGY
The case study method was selected to meet the purpose of this study for two
reasons:
‐ 40 ‐


i. It offers in-depth “real-time” insights into activities and outcomes of CRM
practice as well as retrospective information on antecedents of CRM
implementation.
ii. It facilitates the collection of rich data from multiple sources of evidence, which
is necessary for describing and understanding the complex and cross-functional
nature of CRM.
INTRODUCTION through the effective use of individual

account information. CRM holds that a
Customer relationship management major driver of company profitability is
(CRM) is no longer a buzzword, but a the aggregate lifetime value of the
necessity for business in the knowledge company’s customer base.
age we live in
1.1.1 MARKET SIZE AND KEY
Customer Relationship Management or PLAYERS
CRM is a web enabled marketing, sales
and service application integrated across The worldwide CRM market consists of
all customer contact points. It is a tool that two broad segments: The CRM products
seamlessly integrates into the enterprise and the CRM services. Both the segments
information system. The Internet has have shown astronomical growth during
revolutionized the way business is done the past couple of years.
and has virtually taken the enterprise
information system within the reach of the US and Worldwide CRM Services
customer. It can be accessed through the Revenue, 1999 and 2004 ($M)
call centres, through the Internet and
increasingly through mobile devices. Country 1999 2004
United
18,845 63,854
CRM can be described as Web-enabled States
sales and marketing tool that World Wide 34,420 125,205
synergistically combines the
functionalities of database marketing, one- Source: IDC, 2004
to-one marketing, and sales force
automation (SFA). CRM enables Listed below are the key Customer
companies to provide excellent real-time Relationship Management (CRM)
customer service by developing a application providers.
relationship with each valued customer
CRM SOLUTIONS FOR MEDIUM TO LARGE COMPANIES
Applix Icrm
Chordiant Chordiant 5
Amdocs amdocs CRM
Siebel Siebel CRM
‐ 41 ‐


eGain E3
Epicor eFrontOfiice
Firstwave eCRM 7.0
J.D.Edwards (Oracle) EnterpriseOne
Kana Kana CRM
Onyx Onyx Enterprise
Oracle Oracle CRM
Optima ExSellence
PeopleSoft (Oracle) PeopleSoft CRM
Pivotal eBusiness & CRM Suite
Edify Edify Point
RightNow eService Centre
SAP mySAP
Siebel Siebel 7
Talisma Talisma CRM
Contactual CRM Contact Centre
CRM SOLUTIONS FOR SMALL TO MEDIUM COMPANIES
Front Range Goldmine

Maximizer Maximizer CRM
ProspectSoft ProspectSoft CRM
Super Office Super Office CRM

update Update CRM
Netsuite Netsuite CRM
Salesforce.com Salesforce
Sage Sage CRM
Microsoft Microsoft CRM

and service through call centres and the
1.1.2 HOW CRM WORKS
automation of sales force functions. These
provided the technologies for managing
The basics of traditional CRM solutions
telephone systems, routing calls to the
were founded in the management of sales
‐ 42 ‐


required agents, script management and inbound call centres; and facilitate sales
fulfilment. These functions were based and service activities directly, over the
upon a database of contact information Internet, or through dealer channels.
that could be synchronised with mobile
sales executives. Siebel Automotive leverages the core
Siebel CRM functionality (Siebel Sales,
These fundamentals are still an important Siebel Service, Siebel Call Centre, and
part of the CRM picture but now the view related products) and builds upon it
needs to be considerably wider to take into specific functionality that car companies
account all of the different customer touch require. This industry-specific
points that exist. In particular, the use of "verticalization" allows organizations to
the world-wide web (WWW) as a medium deploy strategic initiatives at a lower total
for customer contact is increasing all the cost of ownership. By providing a base
time. Providing customers with what they industry- specific multichannel eBusiness
want at the time that they want it is a large solution with significant out-of-the-box
part of online CRM (eCRM) solutions as functionality, Siebel Automotive allows
well as being able to handle the large organizations to lower customization
volumes of e-mail that can be created. The costs, shorten implementation timeframes,
centralised customer database is at the reduce maintenance costs, and lower
heart of the solution and needs to construct implementation risk. Siebel Automotive
a complete picture of all customer shares the same flexible architecture of the
interactions. At the same time, the core Siebel products and adds the
outcome of each interaction needs to be functionality required to best support the
handled consistently according to the rules automotive and related vehicle industries
and policies defined within the business. 'specific functionality needs.
SOME AUTOMOBILE CRM By using Siebel Automotive, organizations

SOFTWARE can ensure that customers can choose the
channel of interaction that best fits their
1.2 SIEBEL AUTOMOTIVE needs while ensuring that follow-up
SOLUTION activities and information obtained are
seamlessly shared across the enterprise.
Siebel Automotive is a comprehensive The result is an enhanced ability to satisfy
suite of business applications that allows customers virtually anytime, anywhere,
automotive organizations to manage, through any sales or service channel.
synchronize, and coordinate all customer
touch points including the Web, call The following products are available from
centre, field organization, and retailer the Siebel Automotive suite:
networks. Siebel Automotive is designed
to meet the most demanding sales, • Siebel Automotive Call Centre
marketing, service, and Web interaction
requirements of car companies, importers, • Siebel Automotive Sales
distributors, and dealers. Siebel Systems
'easy- to-use solution offers unprecedented • Siebel Automotive Service
functionality for the car company or dealer
seeking to leverage customer knowledge • Siebel Marketing
to manage leads; develop targeted
marketing campaigns; deploy outbound or • Siebel Automotive Analytics
‐ 43 ‐


• Siebel Automotive Partner marketing campaigns. Although the
Manager company historically enjoyed a high
loyalty rate, the landscape was continuing
• Siebel eDealer to get more competitive. "You can't just
rely on customer loyalty. You have to
• Siebel Customer Order make sure to reach out to those
Management customers," he says.
• Siebel eService For example, using the information

gathered from its network of 55 dealers
• Siebel Employee Relationship Mercedes Canada is able to determine
Management (ERM) which customers purchased earlier diesel
vehicles and send those buyers
• Siebel eMail Response information about the new E Class diesel
vehicle the automaker is about to
• Siebel Self-Service & eBilling introduce. "Diesel is an acquired taste, and
it makes sense to market directly to those
1.3 CRM IMPLEMENTATIONS IN people," Westcott notes.
AUTOMOBILE COMPANIES
Prior to implementing its new system
1.3.1 CRM IN MERCEDES-BENZ dealers provided data to the automaker on
an ad hoc basis. Despite a standing
When it comes to the automotive industry, mandate to provide basic data, Mercedes
there has typically been one type of CRM rarely enforced that rule and the process of
solution for the automakers and another tracking which dealers reported
for auto dealers--and the two solutions information was cumbersome, Westcott
were rarely linked to each other in any says. "That really limited our ability to
meaningful way. keep accurate data. There were no real
checks and balances. And there was no
Mercedes-Benz Canada was not satisfied real incentive for dealers to share
with that method of doing business, and information with us," he says.
was looking to have a national CRM
system at the wholesale level to help the Now the incentive is that Mercedes'
high-end vehicle maker get closer to its marketing muscle is behind campaigns
customers. "We lost sight of the customer that drive potential customers into
quickly in terms of accurate information," dealerships, thus increasing dealer sales.
says John Westcott, chief information
officer and director of information In addition, salespeople at the dealerships
technology. "The closer you can get to the can help customers create personalized
customer, the more likely data is to be brochures of vehicles. So if the customer
accurate." does not purchase on her first visit, she can
walk away with the leasing, finance, and
Mercedes began looking for a solution in product specifications of the car she's
early 2002. interested in. That information is then
stored and available on Mercedes' Web
Mercedes was looking for a solution that site for the prospective customers to refer
would help increase loyalty through to. Also, the system uses alarms that can
personalized service and targeted be set to remind a salesperson to follow up
‐ 44 ‐


with a potential customer in a set number To further service and support its
of days or weeks. customers, as well as its more than 200
U.S. based dealers, Saab Cars USA rolled
Westcott says that the system is still too out TouchPoint, an enterprise-wide CRM
new to have hard ROI numbers, but that solution and strategy. When you call 1-
anecdotal evidence and feedback from the 800-SAAB-USA — whether requesting
dealers suggests the chance of closing a brochures, vehicle information or a dealer
sale increases dramatically when a referral — Saab customer sales
customer is given a follow-up call, email, representatives use TouchPoint, a Siebel-
or letter. based CRM system, to answer questions or
forward prospect information to individual
"It's hard to convince a salesperson that dealers.
this system will help them in a year's time;
they want to sell a car in the next hour," TouchPoint manages all leads generated
Westcott says. "But if you can show them by Saab Cars USA, via its Web site,
that they can eliminate many of the tedious advertisements, auto shows, as well as
administrative functions, they will use the special marketing events such as the
tools." company’s highly successful “Real-Life
Road Tests,” where Saab Cars USA
Other geographic areas of Mercedes-Benz partners in major cities with local
have contacted Westcott and expressed companies to promote the Saab name.
interest in the system. Saab Cars USA sold nearly 38,000 cars in
2002 — up from 28,000 in 1997 — and
1.3.2 CRM IN SAAB CARS USA hopes to exceed 45,000 cars in 2003. “We
are looking to grow that number to 50,000
Saab Cars USA Drives Customer and beyond, and our CRM initiatives will
Satisfaction with Data Quality Initiative play a big role in helping us get there,”
said Robert Henry, manager, ecommerce
Saab Cars USA, Inc., a wholly owned and CRM Solutions for Saab Cars USA.
subsidiary of Saab Automobile AB, is the
importer and distributor of Saab 9-3 and 9- DATA QUALITY PLAYS A KEY
5 automobiles and is headquartered in ROLE
Norcross, GA. Saab Automobile AB,
owned by General Motors, is in more than In phase one of TouchPoint, deployed in
50 countries worldwide. early 2002; the company rolled-out its
Customer Interaction Centre — consisting
Saab car owners are considered some of of a customer assistance centre and a lead
the most loyal in the industry. To partially management centre. In phase two,
thank them for that loyalty, the company deployed late last year, Saab Cars USA
holds an annual Saab Owner’s Convention integrated Siebel Automotive Marketing
where hundreds of Saab enthusiasts into the mix. In both rollouts, Saab Cars
participate in a scenic road rally and attend USA incorporated Firstlogic’s data quality
a show of Classic Saabs, informational software — Information Quality Suite —
seminars and outdoor family concerts. to cleanse and standardize customer and
prospect data, as well as match and
ENTERPRISE-WIDE CRM SYSTEM consolidate it.
‐ 45 ‐


“All leads that are generated by Saab Cars dealers. “We share as much information as
USA are funnelled through Firstlogic — we know about our customers with our
either electronically via our data dealers so they can follow-up in a timely
integration model — or keyed into the manner,” Henry said. “The success of our
front-end by our lead management team,” CRM initiative is greatly dependent on
Henry continued. “Consumers, prospects feedback his group receives from the
and customers who call in to our Customer dealers in terms of the quality and
Interaction Centre are interactively disposition of each lead.” This feedback
validated and standardized against the enables Saab Cars USA to further refine
addresses in real-time so we actually know its marketing campaigns based on what is
if we are being given a valid address.” learned.
He added his group has been able to easily “We do a lot of ‘what-if’ scenarios that we
customize the Firstlogic software to were unable to do previously, which
configure matching criteria using weighted enable us to fine tune our marketing
values in specified fields. The result: Saab campaigns,” said Al Fontova, Saab Cars
Cars USA was able to reduce its database USA direct marketing manager. The
size by 50,000 records. marketing group uses the consolidated
data in conjunction with Siebel
SOPHISTICATED DATA Automotive Marketing to automate and
INTEGRATION MODEL run highly targeted lease loyalty, customer
and prospect marketing campaigns, either
Saab Cars USA’s OLTP environment with direct marketing materials or an
consists of nine multiprocessor Compaq outbound marketing campaign. “We are
Windows NT servers running Oracle 8i much more confident with the marketing
and Siebel Automotive 6.3. The company decisions we are making, due in great part
currently has 300,000 customer records in to the enriched data we are working with,”
its database, with another 500,000 Fontova said.
prospect names contained in the system.
An Oracle 8i-based data warehouse, which RETURN ON INVESTMENT
exchanges and shares data with the Siebel
CRM system directly supports Saab Cars Before integrating Firstlogic’s Information
USA’s direct marketing group. Quality Suite into its enterprise CRM
environment, Saab Cars USA outsourced
Saab Cars USA has a sophisticated data its data cleansing and preparation to a third
integration model for incorporating legacy party, which also ran its marketing
system data — primarily from IBM campaigns? “Firstlogic has enabled us to
AS/400 systems — that store vehicle and bring those capabilities in-house as well as
warranty information. In addition, the the ability to run our own campaigns, so
company has a number of data sources we have saved significant dollars in terms
outside of its environment that send it of overhead associated with the outside
data, such as lead information from the agency previously employed by Saab Cars
Web site, as well as lists the company USA, as well as the associated reporting
purchases for specific marketing costs,” Henry said. “The Firstlogic
campaigns. solution has more than paid for itself.”
With its newly cleansed and consolidated Henry concluded that integrating an
data, the company distributes leads to its ongoing data quality process — both
‐ 46 ‐


inside and outside the company’s Siebel- women and minorities - gain the most
based CRM system — has paid big from this information, he said, noting that
dividends. “Since incorporating on average, buyers who do research online
Firstlogic’s data quality solution into our end up saving an average of $450 on their
CRM environment, we have been able to vehicle.
create a powerful, unique view of each
customer, providing us powerful new GM CUSTOMER & RELATIONSHIP
insights,” Henry said. The end result: Saab SERVICES
Cars USA is able to provide even better,
more personalized customer service and As one of the world’s largest vehicle
perform more highly focused marketing manufacturers, General Motors maintains
campaigns. a global infrastructure of extraordinary
breadth. The company sells automobiles in
1.3.3 CRM IN GENERAL 200 countries and, until recently,
MOTORS supported over 60 contact centres devoted
to various marketing, sales and service
General Motors Corp. is using the Web to functions. While each centre was effective
build relationships with car buyers and in its own right, as a group they lacked
increase consumer conversation about its built-in coordination. In addition, there
vehicles. was no technological redundancy; if a
centre shut down, that portion of GM’s
General Director of CRM Jack Bowen service structure was essentially out of
said that although GM is a market leader, business. Fifty percent of people who
its market share has declined. This, he purchased a vehicle at a GM dealership
said, is partly due to a history of focusing had no subsequent relationship with that
on mass media advertising and a dealer, says Karen Ebben, General Motors
perception that its products are of poor Corp.'s vice president of customer
quality. enterprise management.
GM knew it needed to play to the With this in mind, GM established a

emotional investment drivers have in their Customer and Relationship Services
vehicles. Cars are a unique category, he (CARS) group—charged with improving
said at the MIT Sloan CMO Summit in customer satisfaction, creating remote
Cambridge, MA, last month. Unlike other service centres with redundant
appliances or mechanical devices, people environments, and selecting service
are so attached to their cars they'll providers. In answer to this call, GM has
photograph them and display the pictures teamed with IBM and Sitel Corporation to
in their offices. "You don't photograph implement this vision. IBM was selected
your toaster," Bowen said. to help deliver an end-to-end CRM
solution to General Motors.
Seventy percent of auto buyers now go to
the Web for auto information, said Glen L. THE FOUNDATION FOR CHANGE
Urban, professor of management and
director of the MIT eBusiness Centre, MIT To develop the solution, IBM systems
Sloan School of Management. integrators worked to align technologies
with GM’s business processes, and to
Those who traditionally are the least configure and deploy a CRM packaged
effective auto purchase negotiators - application across selected contact centres
‐ 47 ‐


and business functions. Leveraging its automotive products and services,
experience in the automotive environment, including new and used vehicle sales and
IBM was also able to provide industry related financing and insurance, vehicle
based intellectual capital. Today, GM has maintenance and repair services,
consolidated 15 contact centres into three replacement parts and service contracts.
coordinated centres. Each new hub
encompasses multiple and redundant The Asbury Automotive Group is testing
operations and the locations are the waters as it prepares to use modern
transparent to the customer, just as the customer relationship management (CRM)
CARS group intended. IBM provides, in their stores. The dealership group is
maintains and supports the CRM moving cautiously to avoid drowning in
applications and technology in the new the hype.
centres. This includes an AIX®-based
infrastructure housing the database, There's a lot of hype surrounding CRM,
application servers and related systems. says Allen Levenson, chief marketing
IBM supports the hardware and software; officer for the 89-store group based in
provides backup and recovery, Stamford, CT. He calls CRM "one of the
performance monitoring and database most overused terms in business America"
administration; manages WAN and LAN
networks; delivers desk side support and But is there any truth to it? No one can
change management, and more. “IBM has fault dealers if they're sceptical. The
tapped into its resources to solve problems industry previously heard the hype of how
with the best technologies possible,” says the Internet would revolutionize the
Julie Heisel, General Manager of the GM automotive industry and put car dealers
CARS Group. Indeed, the centres have out of business.
weathered a West Coast earthquake,
upheavals due to the September 11th Now it's time to separate fact from fiction
attacks, and a Florida hurricane—all as far as all that's coming from the CRM
without visible disruption. companies and the industry experts.
GM has seen improved customer CRM software tools and services allow
satisfaction across business functions and dealers to track customers and their buying
a reduction in overall IT costs. habits, and market to them accordingly.
1.3.4 CRM IN ASBURY To do that, dealers need to know more

AUTOMOTIVE GROUP about their customers. It takes technology
to do that effectively today. Technology
Asbury Automotive Group is one of the advances and improved CRM tools allow
largest automotive retail and service dealers to access more customer data and
companies in the U.S. Built through a share it with their various departments so
combination of organic growth and they can target the customer more
strategic acquisitions, Asbury currently effectively.
operates 94 retail auto stores
encompassing 129 franchises for the sale In theory, CRM will increase retention
and servicing of 33 different brands of rates, sales and market share. But is the
American, European and Asian industry expecting too much?
automobiles. The Company offers
customers an extensive range of
‐ 48 ‐


Mark Dixon Bunger, a senior analyst with Process includes deciding what customer
the Forrester Research Group, wonders data to collect and how to collect it,
what the true value of CRM is. determining when and how to follow up
with customers and training salespeople to
The industry has become enamoured with properly sell each product.
the big enterprise solutions, he says. He
adds, "Customer acquisition and selling Dealers should make sure they are
more to existing customers are the sexier measuring the right results, cautions Ted
subjects, but the reality of that is uncertain. Rubin, the president of Dealer Ups, a
The true value may be in lowering company that provides CRM tools.
advertising costs. CRM will bring
accountability to advertising expenses." He explains, "Some dealers believe
closing ratios indicate the success of CRM
Dealers today can have a much better idea in their stores. Actually, CRM will
of which products to market to specific probably drive closing ratios down, but
customers and thus, reduce those mass- will increase sales.
marketing expenses.
"CRM should bring significantly more
Levenson, while recognizing some of the traffic into the store. But not all of those
hype, says he is "an absolute believer" in people are going to buy. The sales should
CRM. "If there is ever an industry where increase though, because the marketing is
CRM makes sense, it's the auto industry. more targeted."
The potential profit CRM brings to this
industry makes CRM necessary." Bunger believes dealers can do several
small and "scrappy" things to improve
Asbury began its study by pulling customer retention - like sending oil
customer data from the dealer change reminders.
management systems in its North Carolina
dealerships. Going back five years, Asbury Many of those "scrappy" initiatives that
evaluated every customer transaction. don't require much technology or data are
Asbury learned 31% of its customers already a big part of Asbury's strategy.
contribute to 75% of its profit margin. The
goal, explains Levenson, is to identify who The dealership group has programs in
the best customers are - "something we're place to retain the customers whose leases
still trying to get a handle on." are reaching end of term.
Asbury is evaluating that data and Asbury is also instituting and marketing a
attempting to identify potential customer quick drop-off and pick-up program for
segments. service customers as well as express oil
change. Small things. But they can make a
Says Levenson, "We want to determine difference.
which categories our customers fall into
and train our salespeople to push those Despite all of its promise, customer
customers into higher categories." He says relationship management (CRM) is
Asbury's approach is to go slow and test. doomed to fail if attitudes in the dealership
"Our process is what matters." don't change, say experts in the field.
‐ 49 ‐


"Right now, the philosophy is short term models (excluding direct import)
and transactional," Says Allen Levenson, sold in China’s vehicle market, 30
Asbury Automotive Group's chief of them were new models. In 2004,
marketing officer. "We need to change there are up to 40 new models on
that to long-term profitability. CRM is not the production line. Consumers
the program of the month; it's a way of have a large variety of choices.
life."
¾ The mismatch of demand and
Changing the behaviour of front-line supply is becoming more apparent.
employees - the people who touch the In 2003, total vehicle sales were
customer - is the toughest part, Levinson 1.97 million while inventory nearly
admits. doubled to 160,000. It is estimated
that vehicle sales in 2004 will
The attitude change has to start at the top increase 25% to 2.45 million while
with the dealer principal, the general corresponding inventory will
manager and the sales manager, says Buzz increase to 550,000, a rise of
Waterhouse, CEO for the Reynolds & almost 250% and the equivalent of
Reynolds Co. Then employees start to get 22.4% of the expected sales in
the picture. 2004.
Training is also important, notes ¾ Tariffs have been lowered and

Waterhouse. "Without training, the tools quotas lifted. Imported vehicles in
are no good. And the training needs to be the medium-to-high class range
continuous." will see increased competition.
From Toyota’s Camry, Nissan’s
1.3.5 CRM IN CHINA’S Cefiro, Volvo’s S60 and S80 to the
AUTOMOBILE MARKET less known MG-Rover series, the
market in China has got all sorts of
Currently, many businesses in mainland models.
China are keen to implement CRM as a
management system. Analysis of Current Consumer Psychology
Consumption Patterns in China's
Automobile Market is given below. Consumers in China’s automobile market
have never been had to be more rational
COMPETITION about their vehicle choices. Facing
numerous new makes and models, they are
China’s automobile industry is no longer unable to recognize or
experiencing extremely robust growth. differentiate. Make quality, functions,
Since 2002, it has seen domestic demand price and after-sales services have all
for vehicles skyrocket. Sales of vehicles become important factors to consider.
grew 53% to 1.165 million vehicles.
Demand intensified further in 2003 and Consumers need to rationalize their
total sales reached 1.97 million. However, consumption while manufacturers need
it is a tough as competition is becoming emotional promotion to sell their cars, how
more and fiercer. can a consensus be reached? Unlike
shampoo, consumers cannot simply stop
¾ There are constantly new models using the vehicle or simply swap out the
on offer. In 2003, among 70 product when they do not feel good. A
‐ 50 ‐


vehicle is a high-end consumer product in seen by the current implementations in
which users demand the realization of over a hundred of businesses, including
brand value as well as nice practical big names such as Xerox, DHL, IBM,
functions, including power, fuel-economic Volkswagen and Philips, etc.
design, wide-range of accessories,
personalized design and price. 1.4 CRM IMPLEMENTATIONS IN
INDIAN AUTOMOBILE
With the sales of EXCELLE exceeding COMPANIES
10,000 immediately after its launch,
Shanghai GM has created a miracle in What Indian car market is witnessing
China’s automobile market. This is not an today is also a new phase after five most
accidental success. GM put lots of effort in eventful years in the history of Indian
studying consumer psychology. As automobile industry, the car segment in
mentioned above, Chinese people are after particular. These five years have changed
a perfect vehicle. They want an attractive the way we looked at car business: ‘We
exterior, pretty interior, comfortable the Industry Wallahs’ and ‘We the
driving feel and relatively low price. GM Customers.’
made a success by meeting all these
criteria through its EXCELLE. These years brought in new products, new
brands, new campaigns and a lot of noise
APPLYING CRM TO VEHICLE at the marketplace. But behind all these
SALES hullabaloo the biggest challenge in front of
carmakers was the creation of a robust
As an internationally recognized and the sales and service network across the
most authoritative independent provider of country to service lakhs of new and
automobile news, J.D.POWER has drawn would-be customers.
attention to China’s automobile
manufacturing industry and consumer Due to the image of the car dealership
market since 2000. IQS and SSI was business created by the good old shortage
introduced to the mainland China in 2000, days, many local businessmen flocked in
followed by CSI in 2001 and APEAL in to open up car dealerships. Many
2003. entrepreneurs came in, apart from the ones
who were already in the automobile
THE INTRODUCTION OF "3C" dealership business. Even manufacturers
THEORY encouraged these fresher for their bad
experiences with old dealerships and the
3C is a kind of CRM methodology jointly aggressive, market-savvy approach of
developed by Holland’s CMI and Greater these entrepreneurs. Then began the
China CRM. As a methodology focused number game and the race to become the
on the Chinese market, it manages and market leader, the segment leader, and so
improves customer performance and on. The results, we all know.
customer care by adopting the technical
theory of flow control. By doing so, the Now, after the dust has started settling and
objective of maintaining and maximizing the segmental growth has flattened — due
the value of customer life cycle can be to a sluggish consumer sentiment — the
achieved. With the customer pyramid and task ahead of carmakers is to differentiate
simple action plans serving as the core, themselves. The difficult part here is that
this CRM method has proved effective as the products still are halfway on their
‐ 51 ‐


lifecycles and, hence, do not leave much focussed retail process-oriented initiatives
scope for completely new offerings. either. This gets reflected in the fact that
today most of the carmakers either have
Fortunately in the automobile business, the implemented, or are in the process of
differentiation does not happen at the implementing, the integrated dealer
product layer alone. It does through the management systems in order to automate
complete experience of the customers, the the processes at the dealerships, but the
experience at the time of purchase, the actual usage of the same is nowhere close
experience with the product and the to satisfactory.
experience in after-sales service or other
interactions with the manufacturers or Globally, one of the key focus areas for
their dealers. carmakers today is CRM and retail process
improvement as they find it to be in their
So, as a key differentiation initiative, strategic interests. This becomes more
carmakers now need to look at the retail important looking at the fact that despite
processes or the processes at the customer being big-size businesses, auto dealerships
interface that shape up the quality of do not attract a very high quality of
customer experience. Unfortunately, there manpower and the general motivation
is nothing great to write home about as far levels among these people are low as
as this wholesome performance of compared to their counterparts in other
carmakers is concerned. service-oriented businesses such as
telecom or credit cards. The better systems
Agencies like JD Power, which track the and processes here have to compensate for
customer satisfaction indices of various the lacunae on the people front.
car brands and carmakers, are here for
quite some time rating all of them. These While the achievement of Tata
ratings, though are not the exact Engineering and Hyundai in creating a
representation of the customer satisfaction network of over 200 dealerships and 250
levels, give a fair idea of the same in terms authorised service points each is
of relative performance trends both on the commendable, the real challenge that lies
time and competition scales. ahead in front of the carmakers as a whole
is putting up well-built systems and
Though the industry average on the JD efficient, customer-friendly processes at
Power CSI (customer satisfaction index), the dealerships. This definitely is an uphill
which represents the levels of customer task looking at the viability crisis that
satisfaction measured at the after-sales dealerships are facing because of high
service layer, has gone up from 109 to 113 operating costs, over-competition and
in the last three years, the top score has erosion in retail margins.
actually gone down from 121 to 119. JD
Power SSI (sales satisfaction index), This kind of initiative has the potential of
which represents satisfaction at the sales becoming the visible differentiator,
layer, has industry average stagnant at 103 thereby rendering competitive advantage
for two years with marginal improvement to a carmaker. This would help carmakers
in top score from 109 to 112. lure new customers and retain the existing
ones. The start may be difficult: it would
While a surge in customer expectations is require some expenditure too, but we do
to an extent responsible for this, the not have a choice.
carmakers have not been able to take
‐ 52 ‐


Customers are very demanding — they buses, and tractor-trailers with revenues
cannot be lured by ‘More Car’ anymore; exceeding $3.5 billion (FY 2003-04) and
we have to give them ‘More Pyaar per is the second-largest player in the
Car’ also. domestic passenger car market in India
The company works through a network of
1.4.1 TATA MOTORS DEPLOYS dealers located across the country to sell
SIEBEL CRM its vehicles. In recent years, this number
has expanded by 50 per cent to its current
Tata Motors, India's largest and only fully pool of 250 dealer organisations.
integrated auto maker, and Siebel Systems,
Inc., a leading provider of business The Siebel CRM solution will enable Tata
applications software, announced that Tata Motors to gather feedback on products to
has deployed Siebel Automotive, a improve design or manufacturing quality
customer relationship management (CRM) as well as measure the effectiveness of
solution, to enhance customer service, marketing campaigns and programmes.
strengthen dealer relationships, and The automaker selected Siebel
improve operational efficiency and Automotive because of its partner
effectiveness. management capabilities to handle its
large dealer network, the solution's zero-
The Siebel CRM solution is expected to be footprint web-based architecture and user-
deployed to Tata Motors' entire network of friendly interface-critical to support
250 dealer organisations in India by the thousands of salespeople with various skill
end of 2005, with more than 1,600 levels.
locations and 10,000 sales and service
executives expected to use Siebel Tata Motors is currently in the first part of
Automotive. a three-phase deployment. Once the
current phase is completed, the company
According to K. R. Sreenivasan, head, plans to deploy marketing, call centre,
CRM and dealer management system, business analytics, and captive finance
Tata Motors, "Within the first year of modules. This will allow Tata Motors to
implementing the Siebel's solutions, we better understand customer needs and
have seen improvements in customer requirements, improve its responsiveness
satisfaction, revenue and operating cost to service requests and problem resolution,
reductions through productivity initiate more proactive contacts with
improvements, and these benefits are customers, add support for new products
expected to increase further over time. and services, and streamline dealer
This is helping us become truly customer- financing processes.
centric, since we can draw upon real-time,
centralised customer and vehicle data and The ease of integration between CRM
respond better to our customer and dealer solution and Tata Motors' dealer
needs." management and ERP systems was also a
critical factor in the company's decision
Tata Motors, a flagship company of the process. The company says that Tata
Tata Group, is the world's fifth-largest Motors has already seen improvements in
medium and heavy commercial vehicle a number of areas, including:
manufacturer and produces more than 150
commercial vehicle models with a range
of light, medium, to heavy-duty trucks,
‐ 53 ‐


¾ Improved demand forecasting, dealer's requirements. In addition,
planning, logistics management, comprehensive sales and reporting
and inventory management functionality built into Siebel Automotive
enables Tata to distribute sales targets to
¾ Overall reduction in quality-related its dealers and roll up sales numbers across
costs due to faster product the country. Siebel, incidentally, pioneered
performance feedback the industry-specific application model
and today delivers 23 industry applications
¾ Improved workflow and escalation and more than 100 industry-specific
of customer grievances for faster solution sets. These solutions, which
resolution include Siebel Automotive, enable
companies to establish a single, enterprise-
¾ Increased revenue growth from wide view of their customers and execute
both higher vehicle sales and a rise key customer-facing business processes
in the company's after-sales parts more efficiently and effectively.
business
MARUTI UDYOG LTD
Ultimately, Tata Motors intends to create
an open portal for customer self-service,
1.5 INTRODUCTION
enabling car buyers to manage product
configuration and place orders online.
Maruti Udyog Limited, a subsidiary of
"The cyclical nature of automotive Suzuki Motor Corporation of Japan, has
demand, together with competition from been the leader of the Indian car market
new entrants in the market, has made it for about two decades. Its manufacturing
difficult for automotive companies to plant, located some 25 km south of New
achieve their growth and globalisation Delhi in Gurgaon, has an installed capacity
goals," says John Gray, general manager, of 3,50,000 units per annum, with a
Automotive, Siebel Systems. "By enabling capability to produce about half a million
Tata Motors to manage, synchronise, and vehicles.
coordinate interactions with its dealers and
customers, Siebel Automotive provides the The company has a portfolio of 11 brands,
company with an ideal platform for getting including Maruti 800, Omni, premium
closer to its customers while strengthening small car Zen, international brands Alto
its position as a world-class automotive and WagonR, off-roader Gypsy, mid size
brand," adds. Esteem, luxury car Baleno, the MPV,
Versa, Swift and Luxury SUV Grand
Siebel Automotive, a comprehensive suite Vitara XL7.
of business applications, provides a single,
360-degree view of the customer to all In recent years, Maruti has made major
who need it; facilitates coordination strides towards its goal of becoming
between Tata and its dealers; and enables Suzuki Motor Corporation's R&D hub for
Tata to track each vehicle throughout its Asia. It has introduced upgraded versions
life cycle. Siebel Automotive has been of WagonR, Zen and Esteem, completely
closely integrated with a wide array of designed and styled in-house.
back-office applications, including
applications for inventory management, Maruti's contribution as the engine of
fulfilment, and parts location. Pricing and growth of the Indian auto industry, indeed
tax calculations can be adjusted for each its impact on the lifestyle and psyche of an
‐ 54 ‐


entire generation of Indian middle class, is A new model of customer satisfaction
widely acknowledged. Its emotional measurement was deployed for the
connect with the customer continues. 2005study. Overall sales satisfaction was
assessed on attributes grouped into six pre-
Maruti tops customer satisfaction again for defined factors:
sixth year in a row according to the J.D.
Power Asia Pacific 2005 India Customer ¾ Delivery process,
Satisfaction Index (CSI) Study. ¾ Delivery timing,
¾ Sales person,
The company has also ranked highest in ¾ Dealer facility,
India Sales Satisfaction Study. ¾ Paperwork, and
¾ The deal
The company's quality systems and
practices have been rated as a "benchmark
for the automotive industry world-wide"
by A V Belgium, global auditors for
International Organization for
Standardization.
In keeping with its leadership position,

Maruti supports safe driving and traffic
management through mass media
messages and a state-of-the art driving
training and research institute that it
manages for the Delhi Government.
The company's service businesses

including sale and purchase of pre-owned
cars (True Value), lease and fleet
management service for corporate (N2N),
Maruti Insurance and Maruti Finance are
now fully operational. These initiatives,
besides providing total mobility solutions
to customers in a convenient and
transparent manner, have helped improve
economic viability of the company's
dealerships. The study also highlights a strong
correlation between advocacy and loyalty
1.6 CRM INITIATIVES IN parameters with overall sales satisfaction.
MARUTI UDYOG LTD (MUL) Customers who are delighted with
their sales experience at the dealership say
Maruti tops customer satisfaction again for they will recommend their dealer to at
sixth year in a row according to the J.D. least three other people. On the other hand,
Power Asia Pacific 2005 India Customer a highly-dissatisfied customer will tell at
Satisfaction Index (CSI) Study. The least two other people not to shop at that
company has also ranked highest in India dealership.
Sales Satisfaction Study.
‐ 55 ‐


‐ 56 ‐


‐ 57 ‐


The main aim of CRM is to retain the outsourcing its CRM operations.
exiting customer’s. Now to obtain this Five cities were covered under the
MUL tried to follow number of strategies call centre footprint __ Delhi,
like Bangalore, Chennai and
Hyderabad. All needed is to call a
¾ MARUTI SERVICE MASTERS toll free number and make a date to
(MSM) – In 1999, Maruti go for a test drive in an Alto or a
established a chain of model WagonR. All the finer points like
workshops across the country which vehicle has a power steering
under the brand name, Maruti and how much it costs can be
Service Masters (MSM). These discussed with the call centre
service stations operated by agent.
franchises became one-stop shops
to meet all vehicle needs for “We are reaching out to customers
Maruti cars. The MSMs offered in three different ways: through our
maintenance service, spares, website, over the phone and
accessories, insurance related through regular post (we have a
services and took care of warranty separate cell that replies to these
claims. letters),'' Rajesh Uppal, general
manager (information technology
¾ CUSTOMER CALL CENTRES division), Maruti Udyog Ltd.
– Maruti also set up Customer Call
centres in the National Capital ¾ LARGEST NETWORK – MUL
Region, Bangalore, Hyderabad, has 1,545 Maruti Authorized
Chennai and Mumbai. Incumbent Service Stations (MASS) covering
and prospective customers could 898 cities and express service
interact with the company through stations on 30 highways across the
a toll free telephone number. country
Traffic on Maruti’s interactive web
site, www.marutiudyog.com ¾ BUSINESS INTELLIGENCE
provided a wealth of information SOFTWARE – Maruti Udyog in
and practical help to customers. India uses solutions from Business
Objects, and hopes to achieve
Maruti Pact with GE for benefits like warranty claims
Strengthening CRM analysis. This can help reduce the
return of components from its
Maruti strengthened its CRM nationwide dealers. The company
(customer relationship can also figure out which
management) drive. The company component is returned the most
entered into a strategic alliance and how it impacts accounts or
with the GE group for outsourcing sales, and accordingly create its
its entire call centre activity. GE, business forecasts. This reduces
which has a joint venture with the cost of operations.
State Bank Of India (SBI) for its
credit card business, started a call
centre in Gurgaon for this business.
Maruti Udyog had entered into a
strategic alliance with this JV for
‐ 58 ‐


1.7 CRM INITIATIVES BY ¾ FREE SERVICE AFTER FIRST
DEALERS OF MUL THREE FREE SERVICES –
Some dealers give their customers
A study was conducted to find out the an additional free service after first
various additional CRM initiatives taken three free services given by the
by dealers of Maruti Udyog Ltd other than company.
those mandated by the company.
¾ NEW YEAR CARDS – Dealers
Some of the initiatives taken are also maintain relationship with
mentioned below: their customers by sending the
New Year cards to their customers.
¾ CUSTOMER TRAINING –
¾ CONDUCTING GAMES,
Some dealers run customer training
TREASURE HUNTS – Some
programmes. They teach the
dealers also conduct games and
customers the basics of car driving,
treasure hunts. These are taken
maintenance, traffic rules. As
from the Harley Davidson
Maruti dealers are able to sell large
successful club loyalty
number of cars in one month, so
programmes. These places act as a
they conduct training classes on
point to make new friends and
first or second Sunday of the
share the common views about the
month. This makes the new
product of the companies. This
customer who is first time buyer of
also helps the dealers to maintain
car educated and he feels satisfied.
relationships with the existing
¾ ALL SERVICES AVAILABLE customers. Also it provides them
UNDER ONE ROOF – All the platform to show the new products
services which a customer needs launched by the company or any
for buying a car are provided at a new accessories in the market.
single place. There are insurance
¾ CLOSED CIRCUIT CAMERAS
agents, loan experts sitting inside
IN WORKSHOPS – Indian
the dealer showroom which
customers are generally sceptic
facilitates customer buying
about everything. They don’t feel
experience and reduces his hassle
comfortable to leave their
and time.
expensive thing to some strange
¾ REMINDER FOR person like mechanic. During
INSURANCE, SERVICES, service of the car, the customer
REPLACEMENTS – Dealers do generally wants to see what the
remind their customers about the mechanic is doing to his car. For
renewal date of the insurance taken the security purpose a customer is
for the cars. They also remind the not allowed to stand in the
customers about the services or any workshop area. To solve the
replacements due. As customers customer problem, some dealers
are generally busy in their own life, have deployed Closed Circuit
they tend to forget these dates. The Cameras in workshops so that
reminders from the dealers help customer can see what is
them in keeping their cars in good happening to his car while sitting
and safe condition. in a rest room.
‐ 59 ‐


1.8 Scope of improvement INSTEAD OF BUSINESS
INTELLIGENCE SOLUTION –
Though Maruti is ahead of all its Dealers of Maruti are not very
competitors in Customer Satisfaction, but comfortable using the modern
there are still some areas of concern where technology. They still prefer to use
it can improve upon. Some of these are their own knowledge & expertise
listed below: instead of Business Intelligence
solution. This shows that proper
¾ CUSTOMER RETENTION training about using the software
RATE IS VERY LESS (10-15% and the benefits of it are not
ONLY) BECAUSE OF LOW properly told to the users.
PRESENCE IN HIGHER
SEGMENT – The main aim of ¾ LAUNCH OF SWIFT WAS
CRM programme is to maintain ALSO ACCOMPANIED WITH
customer loyalty. Today the life of LONG WAITING PERIOD –
car has come down from 7 years to Launch of Swift was accompanied
4-5 years. This means customer is by long waiting periods. The
changing his car every 4-5 years. waiting periods used to be 3-6
In most of the cases the customer months. This has caused great
buys the car in upper segment. discomfort to customers in this
This is where Maruti loses out. competitive industry. As a result
Most of Indian buyers are having many customers cancelled their
cars in less than Rs 4 lacs range. bookings. This clearly shows that
Maruti is having very good Maruti has not anticipated well the
presence is this segment with its demand of its product. This is
vast offerings like Maruti 800, surely because of low use of
Alto, Zen, WagonR, Swift. But technology and problem in
above this range it is having only feedback and evaluation systems.
two cars Esteem and Baleno. Both
¾ NO USE OF SALES FORCE
of these are not faring well. So
AUTOMATION – Maruti has still
most of the Maruti customers who
not employed CRM software. So
are satisfied with their present
they are not using SFA which can
products have little choice to go for
give it clear edge over its
Maruti when they are upgrading.
competitors. SFA is really helpful
¾ TECHNOLOGY USED IS to sales team of the dealers and it
STILL IN NASCENT STAGE – also helps in responding to
Technology used is still in very customers demands efficiently.
early stages in Maruti. Though
they are having Dealer Though Maruti is still ahead of its
Management System (DMS), competitors in Customer Satisfaction but it
provided by Wipro and L&T can’t sleep in its laurels. The competition
Infocomm but they don’t have any in Indian Automobile Industry is getting
CRM solution. hot with lot of MNCs coming to the
country. They are also bringing global
¾ DEALERS STILL PREFER TO standards with them. Also Tata Motors is
USE THEIR OWN progressing really well. They are installing
KNOWLEDGE & EXPERTISE CRM solution provided by Siebel. So
Maruti should pay more attention to its
‐ 60 ‐


shortcomings to maintain its leadership • Digitalisation, innovation, and
position. It should launch new products in industrial organisation: the pivotal
upper segments as more and more case of the auto industry – By
customers are moving to that segment. Olivier Bomsel and Gilles Le
Blanc
REFERENCES
• Dealership group tests the CRM
• http://www.networkmagazineindia. waters…cautiously - Asbury
com Automotive Group implements
customer relationship management
• http://www.domainb.com/ – By Cliff Banks; Ward's Dealer
Business, August 1, 2002
• www.Indiainfoline.com
• GM Uses Web to Give Itself a
• www.marutiudyog.com Voice – By Beth Negus Viveiros;
Direct, April 1, 2005
• www.quickmba.com
• Info tools help dealers target
• www.tutor2u.com customers: Focused marketing
with "clean" data could save lots of
• www.businessline.com money - Information Technology –
Article in Ward's Dealer Business,
• www.thehindu.com March 2002
• http://www.siebel.com/automotive- • Phones provide more info than you
crm/ might think – Article in Ward's
Dealer Business, August 1, 2002
• http://www.it-
director.com/article.php?id=1085 – • Rejected by an apathetic
Introduction to CRM; Published: dealership, he ends up at an
1st Oct 2000 independent shop – By Cliff
Banks; Ward's Dealer Business,
• An article on CRM – By Khalid August 1, 2002
Sheikh, an associate professor of
Supply Chain Management at S P
Jain Institute of Management &
Research, Mumbai
• CRM: From evolution to

revolution – By Chetan Agarwal;
team leader, Quark Systems,
Chandigarh
• CRM helps transportation

companies drive profits – By Lisa
Picarille; CRM Magazine,
February 2004
‐ 61 ‐


MARKETING AND
MANAGEMENT RESEARCH
TITLE: “UNDERSTANDING THE

CONCEPT OF GREEN MARKETING IN CURRENT SCENARIO: A
CHALLENGE OR AN OPPORTUNITY”
MS. POOJA GUPTA*; MS. AARTI SHARMA**
*S.D.College of Management Israna Panipat Haryana
E-mail: poojaguptaindia1@gmail.com
**S.D.College of Management Israna Panipat Haryana
E-mail: aarty.sharma83@gmail.com
ABSTRACT
Green marketing is based on the premise that businesses have a responsibility to

satisfy human needs and desires while preserving the integrity of the natural
environment.
A clever marketer is one who not only convinces the consumer, but also involves
the consumer in marketing his product. Marketers also have the responsibility to
make the consumers understand the need for and benefits of green products as
compared to non-green ones. In green marketing, consumers are willing to pay
more to maintain a cleaner and greener environment. Although environmental
issues has influenced all activities but very few academic disciplines have
inculcated green issues into their literature. Smart business houses have accepted
green marketing as a part of their strategy. Green marketing imparts a proactive
strategy for these companies to cater the market by imparting nature- friendly
products/ services which otherwise reduce or minimize any detrimental impact on
environment. Green marketing involves focusing on promoting the consumption
of green products. Therefore, it becomes the responsibility of the companies to
adopt creativity and insight, and be committed to the development of
environment-friendly products.
This paper will attempt to introduce – the concept of green-marketing; about the
importance of green marketing; examine some reasons that make the
organizations interested to adopt green marketing philosophy; it also explains
the problems that organization may face to implement green marketing and it’s
managerial implications along with few case points. Last part of the paper
highlights the global scenario of Green Marketing in detail.
KEYWORDS: environment, strategy, consumers, product etc.
‐ 62 ‐


INTRODUCTION becomes necessary for companies to
produce environment friendly products as
GREEN MARKETING the awareness for such products is on the
rise as customers are demanding eco-
MEANING friendly products and technologies.
Green marketing refers to the process of THE MAJORITY OF GREEN

selling products and/or services based on PRODUCTS HAVE ONE OR MORE
their environmental benefits. Such a OF THE FOLLOWING HEALTH OR
product or service may be environmentally ENVIRONMENTAL ATTRIBUTES
friendly in it or produced and/or packaged
in an environmentally friendly way. • They promote clean air quality
(typically through reduced
The obvious assumption of green emissions)
marketing is that potential consumers will
view a product or service’s “greenness” as • They are durable and have low
a benefit and base their buying decision maintenance requirements.
accordingly. The not-so-obvious
assumption of green marketing is that • They are recyclable and reusable.
consumers will be willing to pay more for
green products than they would for a less- • They are made using natural,
green comparable alternative product – an renewable or environment friendly
assumption that, in my opinion, has not resources.
been proven conclusively.
• They do not contain any ozone-
The term Green Marketing came into depleting substances like green
dominance in the late 1980s and early house gases.
1990s, began in Europe in the early 1980s
• They do not contain highly toxic
when certain products were found to be
harmful to the environment and society as compounds, and their production
a whole. Consequently new types of does not result in highly toxic by-
products were created, called "green" products or waste products harmful
products, that would cause less damage to to society and environment.
the environment.
DEFINITION
According to Peattie (2001), the evolution
of green marketing can be divided into According to the American Marketing
three phases; first phase was termed as Association, green marketing is the
"Ecological" green marketing, to help marketing of products that are presumed to
solve environment problems through be environmentally safe. Thus green
remedies. Second phase was marketing incorporates a broad range of
"Environmental" green marketing with activities, including product modification,
focus on clean technology that involved changes to the production process,
designing of innovative new products, packaging changes, as well as modifying
which take care of pollution and waste advertising. Yet defining green marketing
issues. Third phase was "Sustainable" is not a simple task where several
green marketing came into prominence in meanings intersect and contradict each
the late 1990s and early 2000 where it other; an example of this will be the
existence of varying social, environmental
‐ 63 ‐


and retail definitions attached to this term. EVOLUTION OF GREEN
Other similar terms used are MARKETING
Environmental Marketing and Ecological
Marketing. The green marketing has evolved over a
period of time. According to Peattie
THREE KEYS TO SUCCESSFUL (2001), the evolution of green marketing
GREEN MARKETING has three phases. First phase was termed as
“Ecological” green marketing, and during
Show potential customers that you follow this period all marketing activities were
green business practices and you could concerned to help environment problems
reap more green on your bottom and provide remedies for environmental
line. Green Marketing isn’t just a problems. Second phase was
catchphrase; it’s a marketing strategy that “Environmental” green marketing and the
can help you get more customers and make focus shifted on clean technology that
more money. But only if you do it right. involved designing of innovative new
products, which take care of pollution and
For green marketing to be effective, you waste issues. Third phase was
have to do three things; be genuine, “Sustainable” green marketing. It came
educate your customers, and give them the into prominence in the late 1990s and early
opportunity to participate. 2000.
1) Being genuine means that a) that you WHAT EXACTLY IS GREEN

are actually doing what you claim to be MARKETING?
doing in your green marketing campaign
and b) that the rest of your business The American Marketing Association
policies are consistent with whatever you defines green marketing as efforts by
are doing that’s environmentally friendly. businesses and organizations to produce,
Both these conditions have to be met for promote, package and reclaim product in a
your business to establish the kind of manner that is sensitive or responsive to
environmental credentials that will allow a ecological concern
green marketing campaign to succeed. In short, it’s just like marketing but
motivated by the environment and
2) Educating your customers isn’t just a appealing to the environmental concerns of
matter of letting people know you’re doing consumers. It’s also sometimes referred to
whatever you’re doing to protect the as ‘sustainability marketing’ or ‘ecological
environment, but also a matter of letting marketing.’ The deeper you go into
them know why it matters. Otherwise, for examining the green industry, the more
a significant portion of your target market, definitions there are to be aware of.
it’s a case of “So what?” and your green
marketing campaign goes nowhere. Carbon footprint A measurement of the
effect a process or action has on the
3) Giving your customers an opportunity climate in terms of the amount of
to participate means personalizing the greenhouse gases it produces. Greenhouse
benefits of your environmentally friendly gases, such as water vapour, carbon
actions, normally through letting the dioxide, methane, nitrous oxide, and
customer take part in positive fluorocarbons, are considered by many to
environmental action. directly contribute to global climate
change.
‐ 64 ‐


CARBON NEUTRAL consumer green awareness. For example, a
study released by Landor Associates in
Reducing energy use and compensating for May 2007 said that in the previous year,
the amount of carbon dioxide a business or market researchers saw one of the most
corporation generates through either complete and speedy revolutions in
obtaining energy from renewable sources consumer attitudes ever toward the need to
or offsetting through measures like tree purchase responsible and sustainable
planting or investing in wind farms. products.
COMPOSTABLE
Grant says more businesses are measuring
Product or packaging advertised as success in terms of the reduction of harm
compostable must break down into usable to the environment. Sustainable businesses
compost in a safe and timely manner in a make decisions not only based on financial
composting facility or in a home compost factors, but also based upon their social
pile or device. Degradable and environmental impact. In so doing,
businesses show banks and investors that
A product or package that completely they are less of a risk and more viable in
breaks down and returns to nature in a the long run.
reasonably short period of time after
consumer disposal. WHY GREEN MARKETING?
NATURAL As resources are limited and human wants
One of the most ambiguous of all the are unlimited, it is important for the
green terms, ‘natural’ products doesn’t marketers to utilize the resources
necessarily have any environmental impact efficiently without waste as well as to
but rather are assumed to be made of achieve the organization’s objective. So
natural materials or ingredients as opposed green marketing is inevitable.
to those that are manmade. While a
product marketed as ‘natural’ may sound There is growing interest among the
better to the consumer, in many cases it’s consumers all over the world regarding
just talk. Think about it: poison ivy, protection of environment. Worldwide
anthrax and gasoline are technically evidence indicates people are concerned
‘natural’, but that doesn’t mean they’re about the environment and are changing
better for you or the environment. their behavior. As a result of this, green
marketing has emerged which speaks for
THE GREEN MARKETING growing market for sustainable and
CHALLENGE socially responsible products and services.
Marketing approaches don’t have to GREEN MARKETING CASES

preach or be gloomy. Green marketers can ELECTRONICS SECTOR
use the current call for greater
sustainability as an opportunity to use The consumer electronics sector provides
talent and creativity to make green room for using green marketing to attract
alternatives seem normal, acceptable, and new customers. One example of this is
attractive. HP's promise to cut its global energy use
20 percent by the year 2010.To accomplish
Marketers are bolstered to use green this reduction below 2005 levels, The
marketing methods by recent reports of Hewlett-Packard Company announced
‐ 65 ‐


plans to deliver energy-efficient products for environmental damages are
and services and institute energy-efficient skyrocketing with little sign of abatement.
operating practices in its facilities At the time of the first Earth Day in April
worldwide. 1970, there were approximately 2,000
federal, state, and local environmental
INTRODUCTION OF CNG IN DELHI regulations. In the late 1990s there were
approximately 100,000 such rules. By
New Delhi, capital of India, was being some estimates, U.S. businesses have
polluted at a very fast pace until Supreme spent well over a trillion dollars since the
Court of India forced a change to 1970s on environmental law compliance.
alternative fuels. In 2002, a directive was
issued to completely adopt CNG in all Faced with a growing environmental
public transport systems to curb pollution. consciousness, many business firms are
adopting a pro-environment stance in
THE GREENING OF BUSINESS hopes of improving credibility with the
public. Unfortunately, some companies
A number of factors have caused business have been a bit overzealous with their
firms to behave more responsibly towards environmental claims, prompting cries of
the natural environment. Perhaps foremost "green washing" from critics. Another
among these is the possibility of impetus causing business to embrace
capitalizing on opportunities from the sale environmental concerns is to attract better
of environmental services and/or "earth- employees and/or improve working
friendly" products. Environmental conditions. Many young people entering
awareness has increased dramatically, the workforce today exhibit greater social
particularly since the organized concerns than those of ten years ago, and
environmental movement emerged in the many wish to join firms perceived to be
late 1960s. Issues ranging from global making a positive contribution to society.
warming to animal rights to species
preservation to the protection of wetlands Environmental regulations continue to
are now prominent in the media and in the increase in both number and complexity.
minds of consumers. "Green" consumers Some firms have identified opportunities
have thus arisen with preferences for in this changing legal environment and are
products made from recycled materials or making changes to drive regulation for
products whose use entails reduced purposes of competitive advantage.
environmental impact. Often such products Because many regulations require use of
command premium prices, and therefore the "best available technology," firms
the task of marketers has become all the actively involved in developing and
more crucial. implementing new technologies may
achieve the benefits of monopoly status for
As landfills fill up and public opposition a short while.
mounts against opening new ones (the
NIMBY, or "Not in My Back Yard," Companies are also becoming more
syndrome), waste treatment and disposal environmentally responsible as part of an
costs rise. Storage, transport, and disposal overall commitment to Total Quality
of hazardous wastes is quickly becoming Management or sustainable development.
unaffordable for many firms, stimulating a Sustainable development involves meeting
search for less-toxic alternative processes. the needs of the present without
Furthermore, liability and litigation costs
‐ 66 ‐


compromising the ability of future • does not present a health hazard to
generations to meet their own needs. people or animals;
MARKETING MIX OF GREEN • is relatively efficient in its use of

MARKETING resources during manufacture, use,
and disposal;
When companies come up with new
innovations like eco friendly products, • does not incorporate materials
they can access new markets, enhance derived from endangered species or
their market shares, and increase profits. threatened environments;
Just as we have 4Ps product prices, place
• does not contribute to excessive
and promotion in marketing, we have 4ps
in green marketing too, but they are a bit waste in its use or packaging; and
different. They are buttressed by three
• Does not rely on unnecessary use
additional Ps, namely people, planet and
of or cruelty to animals.
profits.
GREENER PRICING
GREEN PRODUCTS
Green pricing takes into consideration the
The products have to be developed people, planet and profit in a way that
depending on the needs of the customers takes care of the health of employees and
who prefer environment friendly products. communities and ensures efficient
Products can be made from recycled productivity. Value can be added to it by
materials or from used goods. Efficient changing its appearance, functionality and
products not only save water, energy and through customization, etc. Wal Mart
money, but also reduce harmful effects on unveiled its first recyclable cloth shopping
the environment. Green chemistry forms bag. IKEA started charging consumers
the growing focus of product development. when they opted for plastic bags and
The marketer's role in product encouraged people to shop using its "Big
management includes providing product Blue Bag".
designers with market-driven trends and
customer requests for green product A central concern of many
attributes such as energy saving, organic, environmentalists is that product prices do
green chemicals, local sourcing, etc., For not reflect total environmental costs.
example, Nike is the first among the shoe Waste disposal costs, for instance, are
companies to market itself as green. It is frequently incurred on a fixed-fee basis,
marketing its Air Jordan shoes as regardless of how much waste is actually
environment-friendly, as it has generated. Similarly, the national
significantly reduced the usage of harmful accounting systems of most countries do
glue adhesives. It has designed this variety not incorporate the costs of environmental
of shoes to emphasize that it has reduced degradation or depletion. After-the-fact
wastage and used environment-friendly expenditures on pollution control and
materials. remediation are included, albeit as income.
Greener pricing decisions are based on the
There is no widespread agreement on what premise that goods and services associated
exactly makes a product green. Some with greater environmental damage should
general guidelines include that a green cost more.
product
‐ 67 ‐


GREEN PROMOTION 1. Qualifications and disclosures
should be sufficiently clear and
Green promotion involves configuring the prominent to prevent deception.
tools of promotion, such as advertising,
marketing materials, signage, white 2. Environmental claims should make
papers, web sites, videos and presentations clear whether they apply to the
by keeping people, planet and profits in product, the package, or a
mind. British petroleum (BP) displays gas component of either. Claims need
station which its sunflower motif and to be qualified with regard to
boasts of putting money into solar power. minor, incidental components of
Indian Tobacco Company has introduced the product or package.
environmental-friendly papers and boards,
which are free of elemental chlorine. 3. Environmental claims should not
Toyota is trying to push gas/electric hybrid overstate the environmental
technology into much of its product line. It attribute or benefit. Marketers
is also making the single largest R&D should avoid implying a significant
investment in the every-elusive hydrogen environmental benefit where the
car and promoting itself as the first eco- benefit is, in fact, negligible.
friendly car company. International
business machines Corporation (IBM) has 4. A claim comparing the
revealed a portfolio of green retail store environmental attributes of one
technologies and services to help retailers product with those of another
improve energy efficiency in their IT product should make the basis for
operations. The center piece of this the comparison sufficiently clear
portfolio is the IBM SurePOS 700, a point- and should be substantiated.
of-sale system that, according to IBM,
GREENER DISTRIBUTION
reduces power consumption by 36% or
more. We even see the names of retail
Logistics and transportation costs are
outlets like "Reliance Fresh",
coming under greater scrutiny due to rising
Fresh@Namdhari Fresh and Desi, which
fuel prices, congested highways, and
while selling fresh vegetables and fruits,
global-warming concerns. Package
transmit an innate communication of green
redesign for lighter weight and/or greater
marketing.
recyclability reduces waste while
simultaneously reducing costs. In some
Perhaps no area of green marketing has
countries, marketers must also consider
received as much attention as promotion.
two-way flows, as governments pass
In fact, green advertising claims grew so
legislation requiring manufacturers to take
rapidly during the late 1980s that the
back products at the end of their useful life
Federal Trade Commission (FTC) issued
("reverse logistics"). Germany is again the
guidelines to help reduce consumer
world leader in this arena; it has already
confusion and prevent the false or
passed ordinances targeting the
misleading use of terms such as
electronics, automobile, and packaging
"recyclable," "degradable," and
industries.
"environmentally friendly" in
environmental advertising.
Green marketing strategies are also
reducing inventory and production costs.
The FTC offers four general guidelines for
Standardization and identification of
environmental claims:
product parts and packaging materials
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benefits the environment by reducing Considering the nature of your services
complexity and improving efficiency. or/and products, you may choose from the
Substituting electronic or computer appropriate ideas given below:
controls for analog devices improve
quality and reduces waste. ADVERTISING ON ELECTRONIC
MEDIA
GREEN MARKETING IDEAS
There are many environmental benefits
associated with advertising on electronic
media that can boost your green business.
No paper is wasted as advertisements are
flashed on TV or internet. Online
marketing tips saves automatic exhaust
that may be caused otherwise.
WORK FROM HOME

Having all the staff members come to
office every day adds to various kinds’
pollutions. Instead design a system where
in your employees can work from home,
by which they do not have to commute
Green marketing is not a new concept but long distance between home and office
many of us are not aware of it. Green that can reduce the air pollution. This will
marketing is nothing but the process of also help you ease out the stress on the
selling products or services that are management of your company and save a
presumed to be environment friendly by lot of money as well.
their manufacturers. In this kind of
marketing, a manufacturer will obviously ECO-FRIENDLY PACKAGING
highlight the environmental benefits
associated with a product or a service to This is one of the best green marketing
motivate the consumer to buy the same. ideas for product manufacturers. You can
Manufacturers may alter or modify their change the packaging style of your
product in terms of its production process products by making them more
and packaging, etc. Apart from this, green environments friendly. For example, you
marketing also calls for eco-friendly can change the plastic cover in to a bag or
advertising and marketing strategies. a carton that is made of a biodegradable
These green marketing ideas will help material.
your products or services get recognized as
environment friendly that may lead to GREEN SCHEMES FOR
increased profits. This article shares some CUSTOMERS
of the popular and successful green
You can come with many 'green' schemes
marketing ideas that you can use for your
and offers for your customers. For
business.
example, you can gift a grocery bag to the
GREEN MARKETING IDEAS FOR customers so that they don't have to carry
BUSINESS the grocery in the plastic bags. For an
effective and free advertising, print the
Green marketing ideas are subject to the name of your company with a catchy 'no
industry and stream you are working with. plastic' message on the bag.
‐ 69 ‐


GREEN INCENTIVES FOR WHY IS GREEN MARKETING
CUSTOMERS CHOSEN BY MOST MARKETERS?
It is again one of the best green marketing Most of the companies are venturing into
ideas that many companies are using green marketing because of the following
successfully. You can offer various eco- reasons:
friendly incentives to the customers by
which their purchase would contribute to A. OPPORTUNITY
the well being of the planet. For example,
if they buy your service, then one percent In India, around 25% of the consumers
of each sale would go to an NGO that is prefer environmental-friendly products,
dedicated to the environment. This way and around 28% may be considered
your customers can receive what they want healthy conscious. Therefore, green
and still experience the 'joy of giving'. marketers have diverse and fairly sizeable
segments to cater to. The Surf Excel
CO2 SERVER detergent which saves water (advertised
with the message—"do bucket paani roz
All of us use Internet and computers for bachana") and the energy-saving LG
working and business. This too causes too consumers durables are examples of green
much of E-waste and contributes to marketing. We also have green buildings
pollution. To cut down on such pollution which are efficient in their use of energy,
you can resort to CO2 servers that are one water and construction materials, and
of the great green marketing ideas. Such which reduce the impact on human health
eco-friendly green web hosts offset some and the environment through better design,
percentage of their energy usage with construction, operation, maintenance and
natural power such as wind power etc. waste disposal. In India, the green building
movement, spearheaded by the
TRANSPORTATION Confederation of Indian industry (CII) -
Godrej Green business Center, has gained
If your business involves or relies on tremendous impetus over the last few
transportation then you can make the years. From 20,000 sq ft in 2003, India's
transportation more environment friendly green building footprint is now over 25
by switching to 'green vehicle' or using million sq ft.
'green fuel' for your vehicle etc. This too
will help in reducing the air pollution. B. SOCIAL RESPONSIBILITY
Apart from this you can think of recycling
and waste management as green marketing Many companies have started realizing
ideas for your business process. These that they must behave in an environment-
were some of the green marketing ideas friendly fashion. They believe both in
that you can use for your business. Most of achieving environmental objectives as well
these ideas will not only help you reduce as profit related objectives. The HSBC
the carbon footprint but they are also very became the world's first bank to go
profitable for the business. Many of the carbon-neutral last year. Other examples
above ideas help you reduce the cost of include Coca-Cola, which has invested in
your service or product that ultimately various recycling activities. Walt Disney
results in more profit. So try some of these World in Florida, US, has an extensive
ideas and be one of the successful green waste management program and
entrepreneurs. infrastructure in place.
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C. GOVERNMENTAL PRESSURE have to eventually move towards
becoming green. Some of the advantages
Various regulations rare framed by the of green marketing are:
government to protect consumers and the
society at large. The Indian government *It ensures sustained long-term growth
too has developed a framework of along with profitability.
legislations to reduce the production of
harmful goods and by products. These *It saves money in the long run, thought
reduce the industry's production and initially the cost is more.
consumers' consumption of harmful goods,
including those detrimental to the *It helps companies market their products
environment; for example, the ban of and services keeping the environment
plastic bags in Mumbai, prohibition of aspects in mind. It helps in accessing the
smoking in public areas, etc. new markets and enjoying competitive
advantage.
D. COMPETITIVE PRESSURE
*Most of the employees also feel proud
Many companies take up green marketing and responsible to be working for an
to maintain their competitive edge. The environmentally responsible company.
green marketing initiatives by niche
companies such as Body Shop and Green PROBLEMS OF GREEN
& Black have prompted many mainline MARKETING
competitors to follow suit.
Many organizations want to turn green, as
E. COST REDUCTION an increasing number of consumers' ant to
associate themselves with environmental-
Reduction of harmful waste may lead to friendly products. Alongside, one also
substantial cost savings. Sometimes, many witnesses confusion among the consumers
firms develop symbiotic relationship regarding the products. In particular, one
whereby the waste generated by one often finds distrust regarding the
company is used by another as a cost- credibility of green products. Therefore, to
effective raw material. For example, the ensure consumer confidence, marketers of
fly ash generated by thermal power plants, green products need to be much more
which would otherwise contributed to a transparent, and refrain from breaching
gigantic quantum of solid waste, is used to any law or standards relating to products
manufacture fly ash bricks for construction or business practices.
purposes.
PATHS TO GREENNESS
BENEFITS OF GREEN MARKETING
Green marketing involves focusing on
Today's consumers are becoming more promoting the consumption of green
and more conscious about the environment products. Therefore, it becomes the
and are also becoming socially responsibility of the companies to adopt
responsible. Therefore, more companies creativity and insight, and be committed to
are responsible to consumers' aspirations the development of environment-friendly
for environmentally less damaging or products. This will help the society in the
neutral products. Many companies want to long run. Companies which embark on
have an early-mover advantage as they green marketing should adopt the
‐ 71 ‐


following principles in their path towards safer cleaning products now command a
"greenness." price premium.
* Adopt new technology/process or 4 GREEN INSPIRES INNOVATIVE

modify existing technology/process so as PRODUCTS AND SERVICES THAT
to reduce environmental impact. CAN RESULT IN BETTER
* Establish a management and control CONSUMER VALUE, ENHANCED
system that will lead to the adherence of BRANDS, AND A STRONGER
stringent environmental safety norms. COMPANY. Savvy managers no longer
* Using more environment-friendly raw consider the environment to be a burden
materials at the production stage itself. that represents added cost and overhead –
* Explore possibilities of recycling of the but an investment that can pay back
used products so that it can be used to handsomely.
offer similar or other benefits with less
5 VALUES GUIDE CONSUMER
wastage.
PURCHASING. HISTORICALLY,
CONSUMERS BOUGHT SOLELY ON
RULES OF GREEN MARKETING PRICE, PERFORMANCE, AND
CONVENIENCE. But today, how
1 GREEN IS MAINSTREAM. Not too products are sourced, manufactured,
long ago, just a small group of deep green packaged, disposed of – and even such
consumers existed. Today, 83% of social aspects as how factory and farm
consumers – representing every workers are treated – all matter.
generation, from Baby Boomers to
Millennial and Gen Ys – are some shade 6 A LIFE-CYCLE APPROACH IS
of green. Moreover, there are now finely NECESSARY. Single attributes such as
defined segments of green consumers. recyclable, organic, or energy-efficient
matter greatly, but don’t mean a product is
2 GREEN IS COOL. Once a faddish green overall. Recycled products still
preoccupation of the fringe, green is not create waste, organic strawberries can
only mainstream, it’s chic. In fact, green travel thousands of miles, and CFLs
consumers are early adopters and leaders contain mercury. So a more thorough, life-
who influence purchasing behaviour. cycle or carbon-based approach to
Celebrities and other cool types generally greening is necessary.
are espousing green causes. People show
off (and self-actualize) by tooling around 7 MANUFACTURER AND
in a Toyota Prius (or soon, we predict, in a RETAILER REPUTATION COUNT
Nissan LEAF electric), and carry cloth NOW MORE THAN EVER. In addition
shopping bags to look the part. to looking for trusted brand names on
supermarket shelves, consumers are now
3 GREENER PRODUCTS WORK flipping over packages, saying, “Who
EQUALLY OR BETTER – AND ARE makes this? Did they produce this product
OFTEN WORTH A PREMIUM with high environmental and social
PRICE. Thanks to advances in standards?”
technology, we’ve come a long way since
the days when greener products gathered 8 SAVE ME! Scrap the images of planets!
dust on health food store shelves because Bag the daisies! Nix the babies! Even the
they didn’t work as well and were not a greenest consumers no longer buy
good value. Organics, hybrid cars, and products just to “save the planet.” Today’s
consumers buy greener brands to help
‐ 72 ‐


protect their health, save money, or VARIETY OF MEDIA, ESPECIALLY
because they simply work better. That’s VIA WEBSITES AND ONLINE
why products such as organics, natural SOCIAL NETWORKS. Talking “at”
personal care and pet care, and energy- consumers through traditional media and
efficient products are leading the way in paid advertising can’t build loyalty among
sales. empowered consumers in a connected
world.
9 BUSINESSES ARE THEIR
PHILOSOPHIES. It used to be that 14 GREEN CONSUMERS ARE
companies were what they made. STRONGLY INFLUENCED BY THE
International Business Machines. General RECOMMENDATIONS OF FRIENDS
Foods. General Motors. Now, businesses AND FAMILY, AND TRUSTED
and brands are what they stand for. THIRD PARTIES. With rampant
Method. Starbucks. Timberland. cynicism about traditional forms of
advertising and a backlash in place against
10 SUSTAINABILITY REPRESENTS perceived green washing, savvy marketers
AN IMPORTANT CONSUMER NEED, leverage purchase influencers and third
AND IS NOW AN INTEGRAL parties like NGOs and especially eco-
ASPECT OF PRODUCT QUALITY. labellers.
Green is no longer simply a market
position. Products need to be green. 15 GREEN CONSUMERS TRUST
Brands need to be socially responsible. BRANDS THAT TELL ALL. BP,
Period. ExxonMobil, and SIGG learned this lesson
the hard way. It’s no longer enough to
11 THE GREENEST PRODUCTS have a well-known name. Today’s brands
REPRESENT NEW CONCEPTS become trusted by practicing “radical
WITH BUSINESS MODELS WITH transparency,” disclosing the good – and
SIGNIFICANTLY LESS IMPACT. If the bad.
we simply keep greening up the same old
“brown” products we’ve been using 16 GREEN CONSUMERS DON’T
forever, we’re never going to get to EXPECT PERFECTION. Just like there
sustainability. With time running out, are no more whitest whites, there’s no
we’ve got to “leap” to service greenest of the green. Consumers expect
replacements for products, and adopt that you’ll set high goals (i.e., perform
entirely new ways of doing business. beyond mere compliance), keep
improving, and report on progress.
12 CONSUMERS DON’T
NECESSARILY NEED TO OWN 17 ENVIRONMENTALISTS ARE NO
PRODUCTS; SERVICES CAN MEET LONGER THE ENEMY. Recognizing
THEIR NEEDS, PERHAPS EVEN the power of the marketplace to effect
BETTER. Consumers historically met change, many environmental advocates
their needs by owning products, but willingly partner with industry, offering
concepts like Zip car and eBooks are useful guidance and expertise.
starting to prove that utility and service are
what really matters. 18 NEARLY EVERYONE IS A
CORPORATE STAKEHOLDER. No
13 THE BRANDS CONSUMERS BUY longer confined to just customers,
AND TRUST TODAY EDUCATE AND employees, and investors, publics of all
ENGAGE THEM IN MEANINGFUL stripes are now corporate stakeholders:
CONVERSATION THROUGH A
‐ 73 ‐


environmentalists, educators, and children Unlike traditional marketers, social and
– even the unborn. societal marketers seek to persuade
consumers to alter their behaviours that
19 AUTHENTICITY. It’s not enough to have significant externalities. However,
slap on a recycling logo or make a these behavioural modifications may not
biodegradability claim. Brands viewed as directly/sufficiently benefit consumers or
the most genuine integrate relevant the benefits may also be no excludable.
sustainability benefits into their products.
That’s why HSBC and Stonyfield Farm In addition, social marketing literature
aim to reduce the carbon impacts of their suggests that consumers’ incentives may
operations. be eroded if they believe that their actions
alone may not enhance the community’s
20 KEEP IT SIMPLE. Plato was an welfare (Weiner and Doescher, 1991).
environmentalist: “Simplicity is elegance.” Thus, the challenges for social/societal
Today’s consumers are cutting out the marketers are complex. Three such
needless purchases, and getting rid of the challenges – the role of incentives and
gadgets and gizmos that don’t add value to structural factors, information disclosure
their lives. strategies and greening products versus
greening firms – are examined below.
GREEN MARKETING STRATEGIES
THE ROLE OF INCENTIVES AND
Marketing literature on greening products/
STRUCTURAL FACTORS
firms builds on both the societal and social
marketing research. Societal marketing Drawing insights from the political
implies that organizations (governments, economy literature discussed previously,
businesses and nonprofits) need to marketing literature debates the relative
determine the needs of target markets and efficacy of individual-level sacrifices
to deliver the desired satisfactions in a way (direct costs) versus collective sacrifices
that enhances the consumer’s and the (indirect costs). Instead of individual-level
society’s well being. Social marketing sacrifices (paying a premium for green
focuses on designing and implementing products or altering life styles to lessen the
programs that increase the acceptability of burden on the environment), from which
a social idea, cause, or practice in (a) consumers can opt out, some social
target group(s) (Kotler, 1994). marketers favour collective sacrifices or
indirect costs, from which individuals
Traditionally, marketers focus on
cannot opt out (Weiner, 1993). It is
individual needs for designing/marketing
predicted that by providing new
products to best serve these needs. This
institutional contexts, such collective
approach is predicated on two
sacrifices will persuade consumers to
assumptions. First, individuals are
change their lifestyles. If the objective is to
motivated by the promise that products
reduce emissions of greenhouse gases,
will satisfy their needs at outlays
collective sacrifices could be manifest as
acceptable to them. Second, individual
higher taxes (energy tax), stringent
actions do not have significant
standards (residential building codes,
externalities (the divergence between
automobile fuel efficiency standards) or
public and private costs/benefits), positive
some other collective restrictions that
or negative. The presence of externalities
impose cost on or potentially change
often instigates actions from the
lifestyles of many people. In addition to
nonmarket environment, mainly in the
mitigating collective action dilemmas,
form of governmental regulations.
‐ 74 ‐


collective sacrifices provide consumers that consumers purchase products
with greater levels of confidence that their primarily based on products’ attributes.
actions will make a difference. One must However, in some other cases, firm-level
note, however, that opting out from attributes (greenness of processes and
individual-level sacrifices may not be the systems) may be important for developing
only way for consumers to express their promotional strategies. Perhaps consumers
preferences. As the public policy literature want green products from green firms.
suggests, individuals signal their From a managerial perspective, if brand
preferences for a policy through ‘exit, attributes are more salient, firms should
voice, and loyalty’ (Hirschman, 1970). If invest in greening products, but if
they cannot ‘exit’ due to the imposition of corporate images are more important,
collective sacrifices, consumers may seek focusing on firm-level processes/ systems
to voice their preferences in the nonmarket is desirable.
arenas (see the previous discussion on
stakeholder and institutional theories). Consumer goods companies, such as
Marketers need to correctly identify General Mills, Unilever, and Procter and
consumers’ propensities for the three Gamble, focus their communication on
routes at different value/price levels and their brands and the benefits they deliver.
accordingly design/market their products. This paper is not arguing that such brand-
focused firms ignore their corporate
INFORMATION DISCLOSURES image. They do not.
Green marketing could be viewed as a GLOBAL SCENARIO OF GREEN
subset of information disclosure strategies MARKETING
available to both managers and
policymakers. Such disclosures can take According to Paul Stoneman, financial
place at the industry level (industry codes), incentives are necessary if the market for
firm level (annual environmental reports), green products is to improve and grow.
the facility level (TRI program) and/or the
product level (labels). Information Consumers in the United States are
disclosures could be voluntary (perhaps in expected to double their spending on green
response to market and/or nonmarket products and services in the next year to an
pressures) and/or required by law. estimated $500 billion, according to an
Mandatory disclosures seek to ensure that annual consumer survey by Landor
adequate and standardized information is Associates.According to market researcher
available to stakeholders/consumers, who Mintel, about 12% of the U.S. population
then have the opportunities to compare the can be identified as True Greens,
levels and the quality of greenness across consumers who seek out and regularly buy
products/ firms. Firms could seek to so-called green products. The European
increase the credibility of disclosed Commission's new "Green Package" of
information through internal, second-party legislation on climate change and
or third-party audits. renewable energy represents a significant
GREENING PRODUCTS VERSUS potential opportunity for European
GREENING FIRMS utilities, according to a report released by
The Brattle Group and Trilemma UK. The
This paper has discussed whether and how Green Package sets targets that represent a
information on greenness impacts step change in the energy market: save
consumer decision making. This assumes 20% of energy, increase the share of
‐ 75 ‐


renewable energy to 20%, and cut INITIATIVES TAKEN UP BY
greenhouse gas emissions by at least 20%, BUSINESS ORGANISATIONS
all by 2020. TOWARDS GREEN MARKETING:
According to Mintel's report, 66% of India is growing at 9% annually and

consumers in United States do not buy expected to double its energy consumption
green products because of high cost, while between 2005 and 2030, is under pressure
34% say there is lack of availability of to take action for providing clean
green products in the market. This shows environment for all future generations to
the huge potential for untapped market and come.
customer demand and requirement for eco-
friendly products which the companies can Many Indian companies have come
exploit for capturing the market share and forward for the cause of environmental
thereby enhancing the profitability and concerns and issues requiring immediate
sustainability of the organization in the attention like: global warming, Water and
global competitive scenario. Global Air pollution, E-waste.
Companies like Federal Express has taken
up several initiatives that help to protect NTPC Limited has decided to allocate
the environment including greenhouse gas 0.5% of distributable profit annually for its
reduction, renewable energy and noise "Research and Development Fund for
reduction, recycling and using alternative Sustainable Energy," for undertaking
fuels in its own transportation fleet for research activities in development of green
increasing their accountability towards the and pollution free technologies.
environment and the society as a whole.
Businesses have an impact on the In India, around 25% of the consumers
environment as a whole. Plantation and prefer environmental-friendly products,
cultivation activities taken up by Intel and around 28% may be considered
India is an example of socially responsible healthy conscious. Therefore, there is a lot
firms contributing to preservation of of diverse and fairly sizeable untapped
environment. Recycling used products also segment in India which green marketers
acts as a step towards minimizing wastes. can serve through offering eco-friendly
Many other firms are contributing to products for profitability and survival in
conservation of environment through the era of globalization.
Biodiversity, producing environmentally
friendly products, conservation of energy, For example, Mahindra Group has
water and natural resources, climate formally announced the launch of project
protection, maintenance of schools, roads, Mahindra Hariyali in which 1 million trees
parks, providing assistance for upliftment will be planted nation-wide by Mahindra
of the rural sector and the underprivileged, employees and other stakeholders
and so on. The Kyoto Protocol is an including customers, vendors, dealers, etc.
example of societies coming together to by October 2008. Of these, 1, 50,000 trees
discuss climatic changes issues so that have already been planted by Mahindra
some solutions get incorporated into the employees since September 2007.
negotiating process to create a new
agreement that would come into effect Nokia's environmental work is based on
2012. life cycle thinking. This means that we aim
to minimize the environmental impact of
our products throughout our operations,
‐ 76 ‐


beginning with the extraction of raw http://www.pollutionissues.com/Fo-
materials and ending with recycling, Hi/Green-
treatment of waste, and recovery of used Marketing.html#ixzz1E06XYRNg
materials.
www.greenmarketing.net/stratergic.html
CONCLUSION
www.epa.qld.gov.au/sustainable_
In the short term, business solutions—the industries
enlightened self-interest of commercial
enterprises finding new ways to www.wmin.ac.uk/marketing
incorporate technology and carry on research/marketing/greenmix.html
exchanges with greater concern for
heretofore unpriced environmental goods http://www.coolavenues.com
and services—offer particular promise.
Green marketing and the promotion of http://en.wikipedia.org/wiki/Green_market
responsible consumption are part of that ing
solution.
BOOKS
With the threat of global warming looming
large, it is extremely important that green Polonsky, M. J. "An Introduction to Green
marketing becomes the norm rather than Marketing." Electronic Green Journal 1,
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paper, metals, plastics, etc., in a safe and
environmentally harmless manner should Prakash, A. (May2002) “ Green
become much more systematized and Marketing, public policy and managerial
universal. It has to become the general strategy”
norm to use energy-efficient lamps and
other electrical goods. Consumers, Business Strategy and The Environment,
industrial buyers and suppliers need to Bus.Strat.Env.II, pg 285-297.
pressurize effects on minimize the Frankel, C. 1992. “Blueprint for green
negative effects on the environment- marketing”, marketing executive
friendly. Green marketing assumes even review,2(5):pg22-23.
more importance and relevance in
developing countries like India. Freman, R.E and J. Liedtka.1991.”
Corporate Social Responsibility: “A
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MARKETING AND
MANAGEMENT RESEARCH
A STUDY OF ISSUES AND CHALLENGES

OF RETAIL FORMATS AND RETAIL
ENTREPRENEURSHIP IN INDIA
MS. GARIMA SHARMA*; DR. PARUL KHANNA**
*Singhania University Rajasthan
**IMT Faridabad
ABSTRACT
The retail market is becoming more segmented with retail formats focusing on
the needs of particular consumers groups. The results are the development of a
more complex retail environment. The traditional forms of independent owned
small business and co-operatives have lost significant market share to certain
extent. In developed economics, the retail sector is now characterized by large
scale multiple chains run by powerful and sophisticated organizations
implementing management skills. In the article we have discussed about
organized and unorganized retail formats and their categories found in India.
Since there is competition in the market, the article covers the retailer strategies
which are being practiced by them and also covers the actions taken by Indian
retailers in changing environment.
KEYWORDS: Retail, Retail Formats, Organized Retail, Unorganized Retail,

Retail Strategies.
INTRODUCTION development of a more complex retail

environment. Where once it was
Retailing occupies a pre-eminent position manufacturer’s brand, that were all
in the economics of all modern societies as important, the 1990s have been the power
it is often stated that only constant in of retailers brands challenging the position
retailing is change and it is certainly true of suppliers. The traditional forms of
that the pace of development within independent owned small business and co-
retailing appears to be accelerating. More operatives have lost significant market
than ever before in the opening of 21st share. In developed economics, the retail
century there is evidence of new forms of sector is now characterized by large scale
retailing, in part in response to demand multiple chains run by powerful and
from increasingly sophisticated sophisticated organizations like super
consumers. The retail market is becoming bazaars and Kendriya Bhandar in New
more segmented with retail formats Delhi, Sarkari Bhandar in Mumbai,
focusing on the needs of particular Spencer plaza, Niligiries, etc. As progress
consumers groups. The results are the
‐ 79 ‐


moved across America in the late 1800’s These are generally family-owned
and early 1900’s millions of bright men businesses catering to small sections of
and women opened main street stores. The society. They are small, individually run
first half of the twentieth century saw the and handled retail outlets.
arrival and the Grover of large retailer
giants. This new group of discounts stores CATEGORY KILLERS
redefined value and varieties with low
Small specialty stores have expanded to
price and wide inventories. Though the
offer a range of categories. They have
arrival of super markets in India was a bit
widened their vision in terms of the
late but they are fast becoming the rang
number of categories. They are called
amongst the retail enthusiasts. There are
category killers as they specialize in their
several obvious reasoned for the
fields, such as electronics (Best Buy) and
burgeoning growth of the organized
sporting goods (Sport Authority).
retailer formats. One, which is very
obvious, is that earlier assembling large DEPARTMENT STORES
parts of land in locations, which offered
good connectivity to the rest of the city, These are the general merchandise retailers
was a difficult task. offering various kinds of quality products
and services. These do not offer full
1. ORGANISED AND UNORGANISED service category products and some carry a
RETAILING selective product line. K Raheja's
Shoppers Stop is a good example of
Organised or unorganized retailing in India
department stores. Other examples are
is more defined by the retail formats.
Lifestyle and Westside. These stores have
There are some formats which come under
further categories, such as home and
unorganized retailing and the others come
décor, clothing, groceries, toys, etc.
under organized retailing. In India (as
defined earlier) Mom and Pop Stores MALLS
(Kirana Shops) and Chai and Paan Shops,
Haats, (A series of small shops selling the These are the largest form of retail
things to satisfy day to day needs) Melas formats. They provide an ideal shopping
(These are occasional and in the form of experience by providing a mix of all kinds
group of lots of shops selling many of products and services, food and
different types of products usually FMCG entertainment under one roof. Examples
and other days to day requirement are Sahara Mall, TDI Mall in Delhi.
products like food, Groceries, apparels etc)
and Mandis (Mandis are sepcialised for a SPECIALTY STORES
particular type of product, In India Mandis The retail chains, which deal in specific
are very popular for Vegetables etc.) are categories and provide deep assortment in
considered the unorganized formats of them are specialty stores. Examples are
retailing. RPG's Music World, Mumbai's bookstore
2. THE FOLLOWING KINDS OF Crossword, etc.
RETAIL FORMATS ARE FOUND IN DISCOUNT STORES
INDIAi
These are the stores or factory outlets that
provide discount on the MRP items. They
MOM-AND-POP STORES focus on mass selling and reaching
‐ 80 ‐


economies of scale or selling the stock left Vast majority of 12 million stores
after the season is over. are small “Mom and Pop Stores”.
HYPERMARKETS/ 2. FRAGMENTED
SUPERMARKETS
Mostly small individually owned
These are generally large self-service business average size of outlets
outlets, offering a variety of categories equal 50 Sq. Ft. through the India
with deep assortments. These stores has the highest number of retail
contribute 30% of all food and grocery outlets per capita in the world, the
organized retail sales. Example: Big retail space per capita at 25 Sq. Ft.
Bazaar. per person amongst the lowest.
CONVENIENCE STORES 3. RURAL BIAS
They are comparatively smaller stores Nearly 2/3 of the stores are located
located near residential areas. They are in rural areas. Rural retail industry
open for an extended period of the day and has typically two forms “Haats” &
have a limited variety of stock and “Melas”. Haats are the weekly
convenience products. Prices are slightly market serve group of 10-50
higher due to the convenience given to the villages and sell day-to-day
customers. necessities. Melas are longer in
size and more sophisticated in
E-TAILERS terms of the goods sold (like T.V.)
These are retailers that provide online 3. MALLS AND ORGANIZED
facility of buying and selling products and RETAIL
services via Internet. They provide a
picture and description of the product. A There was no consumer culture there were
lot of such retailers are booming in the limited brands and people bough what was
industry, as this method provides available. There were no ‘shopping areas’.
convenience and a wide variety for The retail industry lacked trained
customer. But it does not provide a feel of manpower. It was also difficult to compete
the product and is sometimes not with the unorganized sector because they
authentic. Examples are Amazon.com, operated with minimal labor costs and
Ebay.com, etc. overhead. Tax laws and government
restriction added to the problem.
VENDING
Liberalization is changing all this. The
This kind of retailing is making incursions customer has evolved. He has more
into the industry. Smaller products such as spending power, it better educate, and
beverages, snacks are some the items that most importantly, exposed to brands and
can be bought through vending machines. products through television and foreign
At present, it is not very common in India. trips. The Indian customer now has the
desire to acquire. Personal consumption is
Traditionally three factors have plagued
on the rise. Customer segments, already
the retail Industry:
drivers, have been sub-divided with joint
1. UNORGANIZED families giving way to nuclear families,
and the increasing number of working
couples. These changes, along with
‐ 81 ‐


increased availability of retail space and household necessities under one rood. In
qualified manpower, have had a positive the future, with more dual income
impact. New players are now entering the families, the consumer ability to spend will
market. Instead of a retail evolution, there increase, but at the same time. It is
is a retail revolution in India. predicted that the time available for
shopping will go down. In such a scenario,
Retailing in Indian is gradually inching its the retailers will have to increasingly
way toward becoming the next boom develop shopping as an experience and at
industry. The total market of organized the same time, the more successful ones
retiling in India is around Rs.20,000 crores will be those that provide faster service.
and will grow eight-fold in the next Malls, in particular are contributing hugely
decade. Chain stores have replaced one to the development of organized retail
store management. Supermarkets have market. Malls are coming up both within
replaced the grocery stores, market places cities and at the outskirts vowing to create
have given way to MALLS, and hospitals destinations that will attract thousands of
have become hospital chains. Fast food is customers every day. India is experiencing
the favored eatery and packed products a “mall boom”. Shopping malls are set to
have become the order of the day, the one of the most visible faces of the Indian
whole concept of format and consumer retail scene in the next few years.
buying behaviour, ushering in a revolution
in shopping in Indian. New retail chains and formats are
transforming the shopping experience of
The emerging purchasing power of the India’s increasingly prosperous consumer
urban educated middle class and the class for the better. In the last decade, the
growing work culture of the working Indian retail landscape has witnessed a fast
woman (more and more woman turning to pace of experimentation in formats. For
corporate jobs), has changed the buying selecting an appropriate format, retailers
habits of families, who are experiencing a have taken recourse for careful
growth in income and dearth of time. segmentation at the geographic, customer
Rising incomes have led to increasing as well as product level. Food World, with
demand for better quality products while its successful supermarket format, happily
lack of time has led a demand for coexists with the ubiquitous Kirana stores.
convenience and service. Consumers have The raising demand for more choice in
started caring about where they would like terms of brands and prices culminated in
to shop, be it multi-brand outlets, excusive the evolution of multi-brand outlets.
stores or malls with entertainment Corporate entered the retailing arena
facilities. Today’s consumers are not only pioneering the concept of a hypermarket
more aware of the development around (e.g. Giant and Big Bazaar). While the
them but are also more demanding. They Crossroads mall concept ushered in the era
want superior quality at an affordable price of shoppertainment, the idea of a three-
and they want it instantly. Thus, we see screen multiplex (Prasads at Hyderabad)
there is a strong trend in favour of one- with multilevel shopping, food court and
stop shops like malls and supermarkets. A video games for children, has taken the
Mall appeals because of its pleasant country by storm. On the other hand
surrounding, better product display and the Tanishq and Pantaloons have
availability of a wide variety of brands. demonstrated the potential of ‘specialty’
The store has accurate measure controls stores in India.
and allows economies of scale, a shopper
also has the option of shopping for all
‐ 82 ‐


Universally it is accepted that format Looking at the shopping behaviors of the
management is the central issue for consumers there can be a powerful trigger
retailers. As customers become to drive creating thinking about new
increasingly sophisticated and competition formats. For example, Kolkata, the cultural
intensified, the life cycles of traditional – capital of India, is known for its
retail formats are shortening. Only those intellectual ambience.
retailers who can achieve an appropriate
balance between rejuvenating the existing 4. REGISTERED RETAILERS IN
formats and creating new and innovative INDIA
ones will succeed in the long run. New
Registered retailers are basically organized
opportunities open up only because of
retailers. These are those who have their
change. Social dynamics lead to
registered shops to trade and deal. Further
emergence of new customer groups as well
they pay proper taxes and mainly they are
as new purchase opportunities. To grab
the part of retail chain. Indian metro cities
piece of this hot cake, retailers have to
have witnessed a significant growth in and
constantly foresee the impending change
expansion of organized retailers but due to
and plan accordingly.
global meltdown they have become very
much careful in opening the stores.
City No of Retailers City No of Retailers

Delhi (807) Lucknow (224)
Mumbai (571) Pune (221)
Indore (238) Nagpur (155)
Chennai (440) Coimbatore (200)
Hyderabad (364) Kolkata (389)
Raipur (115) Coimbatore (200)
Tiruchirappalli (48) Vellore (47)
Secundrabad (113) Vijayawada (90)
Gaya (52) Patna (99)
Mangalore (60) Tumkur (49)
Indore (238) Jabalpur (49)
Bhilwara (50) Bikaner (49)
Jodhpur (91) Udaipur (85)
Ahmedabad (258) Gandhinagar (48)
Rajkot (51) Surat (95)
Calicut (90) Kochi (277)
Ahmadnagar (48) Kalian (50)
Nashik (102) Pune (221)
Pondicherry (50) Agra (32)
Noida (94) Jhansi (49)
Varanasi (55) Gurgaon (101)
Ahmedabad (258) Jamshedpur (51)
Ludhiana (173) Ranchi (51)
Bangalore (677) Amritsar (95)
Jalandhar (50) Ludhiana (173)
Chennai (440) Salem (50)
Madurai (98) Hyderabad (364)
‐ 83 ‐


Dehra Dun (46) Hubl Dharwar (41)
Visakhapatnam (124) Mysore (51)
Panaji (49) Gwalior (50)
Bhopal (206) Ajmer (39)
Bhubaneswar (43) Kota (51)
Jaipur (270) Trichur (111)
Chandigarh (223) Junagadh (51)
Jamnagar (51) Alleppey (49)
Vadodara (147) Thiruvananthpura (157)
Quilon (103) Nagpur (155)
Mumbai (571) Ulhasnagar (52)
Thane (52) Ghaziabad (49)
Allahabad (50) Lucknow (224)
Kanpur (129)
Source: www.webdunia.com
5. RETAIL MANAGEMENT conveyed through these channels, the mall
STRATEGIES developer must add a personal touch to his
message by carrying out a door-to-door
RIGHT POSITIONING campaign in order to reinforce the
message.
The effectiveness of the mall developer's
communication of the offering to the target EFFECTIVE VISUAL
customers deter mines how well the mall COMMUNICATION
gets positioned in their minds. At this
stage, the communication has to be more Retailer has to give more emphasis on
of relative nature. This implies that the display visual merchandising, lighting,
message conveyed to the target customers signage’s and specialized props. The
must be effective enough in differentiating visual communication strategy might be
the mall's offering from that of its planned and also be brand positioned.
competitors without even naming them. Theme or lifestyle displays using stylized
The message should also clearly convey to mannequins and props, which are based on
the target audience that the mall offers a season or an event, are used to promote
them exactly what they call the complete collections and have to change to keep
shopping-cum-entertainment point that touch with the trend. The merchandise
meets all their expectations. The core presentation ought to be very creative and
purpose is to inform the target customers displays are often on non-standard fixtures
about the offering of the mall, persuade and forms to generate interest and add on
them to visit the mall and remind them attitude to the merchandise.
about the mall. The mall developer can
create awareness about the offering among STRONG SUPPLY CHAIN
the target customers in a number of ways.
Critical components of supply chain
Various communication tools available to
planning applications can help
the mall developer for this purpose may
manufacturers meet retailers' service levels
include advertising, buzz marketing
and maintain profit margins. Retailer has
(WoM), celebrity endorsement, use of
to develop innovative solution for
print media, press releases and viral
managing the supply chain problems.
marketing .Once the message is being
Innovative solutions like performance
‐ 84 ‐


management, frequent sales operation 6. PROPOSED MODEL IN INDIAN
management, demand planning, inventory CONTEXT
planning, production planning, lean
systems and staff should help retailers to Indian consumers today are more global
get advantage over competitors. with their thinking, which they have
experienced with the changing retail
CHANGING THE PERCEPTION scenario. The Indian consumer is very cost
conscious, evaluating every rupee spent. It
Retailers benefit only if consumers is therefore important for retailer to offer a
perceive their store brands to have price advantage as well as strong Private
consistent and comparable quality and label programme to attract consumer.
availability in relation to branded products. Retailer should keep pace with consumers
Retailer has to provide more assortments to not only find out what they want today,
for private level brands to compete with but to find out what they will want
supplier's brand. New product tomorrow. India should look for new
development, aggressive retail mix as well models in retail that would work in Indian
as everyday low pricing strategy can be the context. With the changing needs, we
strategy to get edge over supplier's brand. propose the following new model which
can be used in India.
Need Time
Customer Customer
Wants Retailers
Identification Satisfaction
Desire Value
7. ACTIONS BY INDIAN RETAILERS rice and oil are being bundled, so that
IN CHANGING ENVIRONMENT customers can take the advantage of lower
prices of one item even if the first item is
PRICE DECISIONS expensive.Retailers accepts in India that
modern retail prices were much more
Rapidly rising food prices is forcing food
competitive during high inflationary
and grocery retailers to take a hit of up to
conditions than kiranas and mandis
50 per cent on their margins in pulses and
because they do not alter prices drastically.
groceries. Retail consultants said food and
grocery retailers may see a drop of up to COMING TOGETHER
20 per cent in their volumes if prices
continue to shoot up, forcing shoppers to Cut-throat competition in India’s
curb spending or downtrade in organised retail industry seems to have
discretionary items. Food and grocery given way to harmony, with top players
retailers normally make net margins of 4 such as the Future Group, Aditya Birla
per cent. Food Bazaar (One of the largest Retail, Spencer’s and Reliance Retail
food retailers of India) is also pushing its coming together to cut operational costs
combination pricing aggressively to attract and improve margins.
customers, where two products such as
‐ 85 ‐


The retailers have formed a rainbow an online cash-and-carry portal for
coalition that will align their sourcing wholesale footwear business as part of its
operations and share private labels, plans to become a Rs 100 crore company
logistics, warehouses and hiring details on by 2012.
a transactional payment basis, said top
executives with some of the largest players CONCLUSION
in the sector. The move mirrors a similar
The retail sector in India is witnessing a
step taken by manufacturing firms in the
huge revamping exercise as traditional
late 90s to share markets and cut costs.
markets make a way for new formats such
Collaboration is the way forward in retail. as departmental stores, hypermarkets,
Retailers are learning from each other and supermarkets and specialty stores. Western
sharing infrastructure and resources. style malls have begun appearing in
metros and second-rung cities which
Such a joint initiative would also need to introduced the Indian consumer to a
address nimble mom-and-pop stores that shopping experience like never before.
are swifter in merchandising and Rated the fifth most attractive emerging
understanding local nuances and retail market, India is being seen as a
requirements. Modern formats with their potential goldmine. It has been ranked 2nd
regional and central sourcing structures in Global Retail Development Index of 30
typically are unable to compete in such a s developing countries drawn up by A. T.
In grocery, burdened by consumer Kearney. Government of India has also
expectations of more frills compared to opened the door for the retailing giants to
no-frills kirana shops, modern formats had enter into the markets. Many foreign
to shell out 30% higher costs on rent, investors are also showing keen interest to
energy, bar codes, air-conditioning, bright enter into the Indian market. With the flow
lights and other aspects. Also, lifestyle of FDI, retail sector will have to see a
retailers were forced to mark down prices many changes in the coming years. In their
to move volumes as consumers traded preparation to face fierce competitive
down to more affordable brands in a pressure, Indian retailers must come to
challenging environment. The recognize the value of building their own
collaboration also has to address issues stores as brands to reinforce their
such as unused fit outs essentially furniture marketing Positioning, to communicate
or design and completion of shell space quality as well as value for money.
that instead of lying unattended in Sustainable competitive advantage will be
warehouses can be sold to fellow retailers. dependent on translating core values
Then there is the issue of modern retailers combining products, image and reputation
who are keen to promote their own private into a coherent retail brand strategy.
labels. Under the new concept, retailers Retailers certainly need to innovative in
may have to sell such labels to each other. designing the value preposition and
deciding the format to deliver that to the
CHANGING TECHNOLOGY customer. It is not all about deciding the
format but all about serving the Consumer
The companies came with lot of changes
better, faster, and at less cost. The need of
in the technology and delivery of the
the hour for Indian retailers is to develop
products and services as per the changing
systems and processes keeping the unique
business environment. Online marketplace
nature of the country in mind. In the retail
and footwear retail chain
trade, change is the only constant; survival
bigshoebazaar.com is planning to launch
‐ 86 ‐


in retail will depend on the ability to adapt 10. Madona Devasahahayam (1998),
to these changes. “A big deal” Journal of
Management.
REFERENCES
11. Arvind Singhal, KSA Technopak
1. Berman, Barry and Joel R. Evans (2000), “Changing gears-retailing
(2001). Retail Management: A in India”. Economics Times.
strategic Approach 8th ed.
Englewood Cliffs, NJ: Prentice 12. Raju M Rathod (2005),
Hall “Challenges and strengths of
supermarket, Indian Journal of
2. Levy Michael J (2002). Retail store Marketing, pp28-30.
planning and design manual. 2nd
edition Cicninatti, OH: ST 13. Rajiv Benerjee (2003), “Changing
publications, Inc. customers behavior impacting
retail growth, Business world”.
3. IMAGES-KSA Technopak INDIA
RETAIL REPORT 2005

4. P. Narayana Reddy (2004),
“Efficiency benefits pass on to
consumers: New development in
retail market environment in India,
Indian Journal of Marketing, pp
23-25
5. Rahul and Rahil on Retail (STVP

2007-002) June 12, 2007

6. Sahai, Subodh Kant., (2007) India
Retail forum,September 4,5,6.

7. P. Narayana Reddy (2004),
“Efficiency benefits pass on to
consumers: New development in
retail market environment in India,
Indian Journal of Marketing, pp
23-25
8. Agarwal, M.L. (1989),

“Distribution Marketing for profits
of productivity”, Journal of Product
and Brand Management, pp 139-
142
9. VV Gopal (2005),
“Professionalism in retail
management “, The ICFAI Journal
of Service Marketing, pp14-18
‐ 87 ‐


MARKETING AND
MANAGEMENT RESEARCH
A STUDY ON BRAND LOYALTY OF MLM

BRANDS
DR. ISITA LAHIRI*; SHRI MRINAL KANTI DAS**

*Department of Business Administration
University of Kalyani West Bengal- 741235
**Centre for Management Studies JIS College of Engineering
(Affiliated to WBUT Approved by AICTE)
ABSTRACT
The concept of Multi-level Marketing (MLM) or Network Marketing is not very

old in India. In India this concept was first introduced by Amway in mid 90s.
Since then many companies have ventured into the MLM practices to have an
exponential growth. MLM brands are attempting to acquire a larger share of
other manufacturer brands. This paper is an endeavor to study brand loyalty of
MLM brands as well as Non-MLM brands and underlying factors that consumers
want to get from the purchase of MLM brands. The results of the study are based
on field survey of 400 respondents selected from Kolkata and its outskirts by
using convenience sampling technique. The study brings out several useful
findings and the more important among them are – customers of MLM brands
are loyal than that of Non-MLM brands; and factors behind selection of MLM
brands are availability, quality, price and promotion. This study also established
that there is no relationship between users of brands and occupation of users.
KEYWORDS: Multi-level Marketing, Brand loyalty, Factors influencing choice

of MLM brand.
INTRODUCTION Marketing (MLM) falls under direct

marketing where product reaches the final
One of the fastest-growing forms of customer from manufacturer via
marketing is direct marketing. According distributors. In network marketing no
to the estimates of the Direct Marketing formal marketing infrastructure is
Association (DMA) direct marketing sales required. Network marketing is the result
will grow 6.6% annually through 2012, of overcrowding of products in the shelves
compared with a projected 5.7% annual of the retailer. Globalization of the markets
growth for total U.S. sales. These figures has further facilitated the growth of
prove that direct marketing plays a pivotal network marketing. Modern customer
role in the economic development of a looks for convenience in shopping and
country. Network Marketing or Multi-level
‐ 88 ‐


getting the product delivered in the Lahiri and Das (2010) appeared with an
comfort of his home. Network marketing observation that relationship performs an
companies have exploited this opportunity important role in motivating people to join
by catering core customer value to its loyal network marketing. They concluded that
customers. experience as distributor in terms of the
time period engaged in the business
To know the sustainability of network emphasizing nature of relationship
marketing this study measures how loyal exploitation and the more experience may
the customers of network marketing increase the likelihood of approaching
companies are and to know the reasons friends and colleagues than relatives. This
behind customers preference of MLM study also revealed that brand names, not
brands. For this study, consumer survey the age-groups, are important for
was undertaken with 400 consumers in marketing shampoo but for marketing
Kolkata and its outskirts. This study also conditioner age groups play positive role
reveals the number of customers using than brand name.
MLM brands out of total population and
whether any relationship exists between Lahiri and Das (2010) have developed a
users of brands and occupation. theoretical framework of network
marketing in their study. They have
EXISTING LITERATURES evaluated and analyzed the performance of
some successful network marketing
Laudon (2004) has highlighted that
companies to assess the market
network companies are able to cut down
opportunity not only in the developed
expenditure associated with advertising
countries but also in the developing
and other overheads. The costs of
countries with facts and figures. Their
distribution and retailing often run at 70%
study shows positive growth of network
or more of the gross turnover of
marketing in Asia, but not at par with other
conventional business operations. So
countries of the world. They concluded
MLM Companies can allocate these
that in India network marketing companies
savings to the distributor network for
can also exploit opportunities by educating
marketing and servicing the customers on
prospect through proper communication.
behalf of the Network Company.
OBJECTIVES OF THE STUDY
The study of Saifuddin et al. (2006)
revealed the social scenario and The following are the specific objectives
demographic characteristics of the of the study:
members, distributors involved in the
MLM practices in Bangladesh. This study 1. To study whether there is any
focused on the positive outcome that relationship between users of
MLM companies open up new avenue of brands and occupation of users.
earning opportunity. The researchers
identified numerous other predictors that 2. To measure the brand loyalty of
may also be important in addition to social MLM brands and Non-MLM
scenario and demographic characteristics. brands.
Thus it encourages research examining the 3. To determine the underlying
problems and opportunities available, factors consumers seek from the
motivations for involvement, economic purchase of MLM brands
impact of such practices on lifestyle and
on economy of Bangladesh as a whole.
‐ 89 ‐


METHODOLOGY factors behind purchasing MLM brads 14
questions were put in the questionnaire
The study undertaken is basically and the users of MLM brands were asked
empirical in nature and was carried out on to indicate their degree of agreement with
the different areas of Kolkata and its these on a seven point scale (1 = strongly
outskirts with 400 respondents who are agree, 7 = strongly disagree). Factor
consumers. Purposive sampling technique analysis was conducted using SPSS 10
was resorted to for selecting consumers of and Chi-Square Test was conducted using
different areas through personal interview. Excel.
A structured questionnaire was prepared
to know whether there is any relationship ANALYSIS, RESULTS AND
between users of brands and occupation, to DISCUSSION
measure brand loyalty and to determine
the underlying factors that consumers I. CHI-SQUARE TEST
seek from the purchase of MLM brands.
H0: There is no relationship between users
Chi-Square Test is used to know the
of brands and occupation of users.
relationship between brands and
occupation. For measuring brand loyalty H1: There is significant relationship
Preference-behaviour model with last five between users of brands and occupation of
purchases was administered. To know the users.
TABLE 1: OBSERVED FREQUENCIES
Occupation
Tot
User of Brands Studen Govt. Private Businessm Housewi al
ts Employee Employee an fe
MLM brands 13 8 19 11 35 86
Non-MLM
76 21 86 24 107 314
brands
Total 89 29 105 35 142 400
TABLE 2: EXPECTED FREQUENCIES

Occupation
User of Brands Total
Students Govt. Employee Private Employee Businessman Housewife
MLM brands 19.14 06.24 22.58 7.53 30.53 86
Non-MLM brands 69.86 22.76 82.42 27.47 111.47 314
Total 89.00 29.00 105.00 35.00 142.00 400
‐ 90 ‐


TABLE 3: DATA
Level of Significance 0.05
Number of Rows 2
Number of Columns 5
Degrees of Freedom 4
TABLE 4: TEST RESULTS
Critical Value 9.487729
Chi-Square Test Statistic 6.741352
p-Value 0.150204
Accept the null hypothesis
The results of Chi-Square test accepts null potential switchers. Hard core loyals have
hypothesis i.e., relationship is not there a positive attitude toward the brand and
between users of brands and occupation of buy their preferred brands. Potential
users. It indicates occupation does not help switchers, on the other hand, purchase a
in purchasing MLM brands. From the brand but they may prefer another brand.
observed frequency it is also seen that out In this model preference is considered as a
of 400 respondents only 86 are the users of measure of behavior. This model is
MLM brands and most them are developed with ‘most preferred brand’ and
housewives. It can be concluded that ‘number of purchases’.
MLM companies are able to convert
21.50% of total respondents into their An examination of the diagonal entries
customer. measures loyalty of consumers. The
diagonal entries are the number of
II. BRAND LOYALTY consumers who purchase their preferred
MEASUREMENT brands. If the total number of consumers is
compared with those who prefer the brand,
The model used for this study has a proportion of the preferences that have
improvised Preference-behaviour model been converted into sales can be obtained.
by taking last five purchases and seems This proportion is termed as gravity that
more effective as a consumer’s last indicates the power of the brand to
purchase may have been influenced by non maintain consumers who prefer it. A brand
availability of his preferred brand and, in with high gravity represents consumers
turn, may provide a faulty loyalty measure. who are very loyal to their favorite brand.
This model considers both the hard core A high gravity ratio indicates that
loyals and potential switchers. Hard core consumers regard the brand as desirable,
loyals are those who always buy their most available, and a good value, a brand that is
preferred brand. The other consumers are relatively resistant to competitive prices or
‐ 91 ‐


promotions. A different perspective on the In this study six Non-MLM brands
market is also revealed by comparing the (Pantene, Sunsilk, Garnier, Head &
diagonals with the total number of Shoulder, Clinic All Clear and Dove) and
purchases. This ratio represents the three MLM brands (Amway, Oriflame,
proportion of sales that come from and Avon) of shampoo are taken into
consumers who identify the brand as the consideration. An assumption of this
most preferred and is termed as focus. A model is that every prospect has a
brand with high focus gets sales mostly preferred brand. Based on survey the
from consumers who prefer it. Brands following table has been developed.
with low focus ‘steal’ customers from
other brands.
TABLE 5: PREFERRED BRAND BY NUMBER OF PURCHASES
Number of Purchases
Preferred Clinic
Head & Total
Brands Pantene Sunsilk Garnier All Dove Amway Oriflame Avon Others
Shoulder
Clear
Pantene 243 33 21 7 7 10 0 3 3 22 349
Sunsilk 35 271 14 8 9 8 1 4 1 16 367
Garnier 13 9 92 13 12 12 4 6 2 8 171
Head &
10 8 13 121 20 11 2 2 2 15 204
Shoulder
Clinic
11 7 7 12 112 8 2 0 0 12 171
All Clear
Dove 21 25 14 13 10 184 1 7 1 11 287
Amway 5 3 4 3 2 3 118 9 6 3 156
Oriflame 7 6 3 5 2 4 6 120 8 3 164
Avon 0 7 3 4 5 1 4 8 97 2 131
Total 345 369 171 186 179 241 138 159 120 92 2000
The right hand column of Table 5 indicates preferred brand. Here out of the 349 who
the number of respondents who identified identified Pantene as their favorite brand,
each of the nine brands as the preferred only 243 had purchased that brand, 33 had
brand - 349 for Pantene, 367 for Sunsilk, purchased Sunsilk, 21 had purchased
171 for Garnier, 204 for Head & Shoulder, Garnier, 7 had purchased Head &
171 for Clinic All Clear, 287 for Dove, Shoulder, 7 had purchased Clinic All
156 for Amway, 164 for Oriflame, and 131 Clear, 10 had purchased Dove, 3 had
for Avon. The columns of Table 5 purchased Oriflame, 3 had purchased
indicate the number of purchases for each Avon and 22 had purchased other brands.
‐ 92 ‐


The diagonal entries in the table indicate is, in fact, the region’s leading selling
consumers who purchased their preferred brand. On the other hand, the second
brands. leading selling brand of the nine is
Pantene, which had only 17% share of
The data in Table 5 can provide preference. From table 5 it is evident that
considerable insight into the competition for MLM brands share of preference is not
of the market. The preference measures higher than that of other manufacturer
indicate perceptions of brand quality or brands, but MLM brands are able to create
brand equity. In this study, Sunsilk had loyal customers and Table 7 is the proof of
about 18% (367/2000) of the expressed that.
preferences for the set of nine brands and
TABLE 6: GRAVITY AND FOCUS RATIOS OF DIFFERENT
NON-MLM BRANDS OF SHAMPOO
Non-MLM Brands Gravity (α) Focus (π )
Pantene 0.70 0.70
Sunsilk 0.74 0.73
Garnier 0.54 0.54
Head & Shoulder 0.59 0.65
Clinic All Clear 0.65 0.63
Dove 0.64 0.76
TABLE 7: GRAVITY AND FOCUS RATIOS OF DIFFERENT

MLM BRANDS OF SHAMPOO
MLM Brands Gravity (α) Focus (π )
Amway 0.76 0.86
Oriflame 0.73 0.75
Avon 0.74 0.81
Another insight into the loyalty of the gravity proportions fall within a range
consumers can be obtained from the study of 0.54 to 0.74. Garnier is able to convert
of diagonals. Gravity and focus ratios for only 54% of its preferred customers into
the nine brands are presented in Table 6 sales; whereas, Sunsilk converted 74%.
and Table 7. For six Non-MLM brands, MLM brands show high gravity which
‐ 93 ‐


indicates the power of the brand to Pantene have high focus ratio. Of the nine
maintain consumers who prefer it. brands, the highest focus ratio is 0.86
(Amway) and Garnier has the lowest focus
Focus ratios are also calculated to know ratio with 0.54.
the proportion of sales come from
consumers who identify the brand as the III. FACTOR ANALYSIS
most preferred. In this study, again all
MLM brands show high focus ratio The data were captured in a spreadsheet
ranging from 0.75 to 0.86. Some Non- and transported to a software statistical
MLM brands like Dove, Sunsilk, and package (SPSS 10.0). The results of the
factor analysis are shown below.
TABLE 8: KMO AND BARTLETT'S TEST
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.603
Bartlett’s Test of Sphericity Approx. Chi-Square 1852.550
Df 91
Sig. .000
TABLE 9: COMMUNALITIES
Initial Extraction
Q1 1.000 .952
Q2 1.000 .872
Q3 1.000 .927
Q4 1.000 .973
Q5 1.000 .947
Q6 1.000 .930
Q7 1.000 .941
Q8 1.000 .942
Q9 1.000 .720
Q10 1.000 .310
Q11 1.000 .953
Q12 1.000 .934
Q13 1.000 .922
Q14 1.000 .950
Extraction Method: Principal Component Analysis.
‐ 94 ‐


TABLE 10: TOTAL VARIANCE EXPLAINED
Extraction Sums of Rotation Sums of

Initial Eigen Values
Squared Loadings Squared Loadings
% of % of % of
Cumulativ Cumulativ Cumulativ
Component Total Varianc Total Varianc Total Varianc
e% e% e%
e e e
1 4.405 31.466 31.4664.405 31.466 31.4663.950 28.214 28.214
2 3.126 22.326 53.7923.126 22.326 53.7923.273 23.381 51.594
3 2.969 21.207 74.9992.969 21.207 74.9992.968 21.202 72.797
4 1.773 12.666 87.6651.773 12.666 87.6652.082 14.868 87.665
5 .844 6.031 93.696
6 .392 2.799 96.495
7 .153 1.091 97.586
8 .139 .993 98.579
9 9.370E .669 99.248

-02
10 4.469E .319 99.567

-02
11 2.547E .182 99.749

-02
12 1.523E .109 99.858

-02
13 1.267E 9.050E- 99.948

-02 02
14 7.237E 5.169E- 100.000

-03 02
TABLE 11: COMPONENT MATRIX
‐ 95 ‐


Component
1 2 3 4
Q1 -.507 .516 .629 .182
Q2 -.349 .608 .617 -5.062E-03
Q3 -.445 .576 .627 6.219E-02
Q4 .354 -.557 .650 -.340
Q5 .327 -.618 .622 -.267
Q6 .330 -.576 .649 -.260
Q7 -.343 -.423 .273 .755
Q8 -.134 -.524 .193 .782
Q9 -.618 .291 .285 -.415
Q10 .115 5.520E-02 -.523 -.140
Q11 .859 .352 .229 .196
Q12 .864 .391 .171 7.070E-02
Q13 .897 .254 .117 .194
Q14 .816 .500 8.735E-02 .161

a 4 components extracted.
‐ 96 ‐


TABLE 12: ROTATED COMPONENT MATRIX
Component
1 2 3 4
Q1 -6.905E-02 .958 -9.105E-02 .147
Q2 4.906E-02 .928 -3.910E-02 -7.819E-02
Q3 -2.480E-02 .960 -6.504E-02 8.606E-03
Q4 8.302E-02 -2.675E-02 .983 2.839E-03
Q5 5.025E-02 -6.741E-02 .965 8.949E-02
Q6 7.658E-02 -2.533E-02 .957 8.457E-02
Q7 -.213 .122 5.360E-02 .937
Q8 -8.281E-02 -7.923E-02 .108 .958
Q9 -.477 .611 2.580E-03 -.346
Q10 -1.467E-03 -.389 -.297 -.265
Q11 .969 8.869E-03 .112 -3.558E-02
Q12 .946 -1.617E-02 9.859E-02 -.174
Q13 .943 -.142 .106 -2.493E-02
Q14 .961 1.141E-02 -6.779E-02 -.148

Rotation Method: Varimax with Kaiser Normalization.
a Rotation converged in 5 iterations.
TABLE 13: COMPONENT TRANSFORMATION MATRIX
Component 1 2 3 4
1 .854 -.421 .277 -.133
2 .411 .575 -.585 -.399
3 .160 .701 .666 .198
4 .277 .039 -.371 .886
‐ 97 ‐


Rotation Method: Varimax with Kaiser Normalization.
To determine the appropriateness of the 22.326%, 21.207%, and 12.666% of the
data set for factor analysis Bartlett’s test of variance respectively.
sphericity and Kaiser-Meyer-Olkin (KMO)
measure was adopted. High value An important output from factor analysis
(between 0.5 to 1) indicates that the factor is the factor matrix. The factor matrix
analysis is appropriate. In this study, the contains the coefficients used to express
result of Bartlett’s test sphericity (0.000) the standardized variables in terms of the
and KMO (0.603) indicate that the data are factors. These coefficients, the factor
appropriate for factor analysis. The loadings, represent the correlations
principal components analysis method was between the factors and the variables. A
selected after determining the coefficient with large absolute value
appropriateness of the data set. This indicates that the factor and the variables
approach considers the total variance in are closely related. The coefficients of the
the data. factor matrix can be used to interpret the
factors.
After that, only factors having eigen values
greater than 1.0 are retained, the other Although the initial or unrotated factor
factors are not included in the model. It is matrix indicates the relationship between
seen from the table 10 that eigen value the factors and individual variables, it
greater than 1.0 results in four factors seldom results in factors that can be
being extracted. From the cumulative interpreted, because the factors are
percentage of variance, it is evident that correlated with many variables. Therefore,
four factors accounted for 87.67% of the through rotation, the factor matrix is
total variance. This is a pretty good transformed into a simpler one that is
bargain, and thus, four factors appear to be easier to interpret. Here varimax procedure
reasonable in this situation. is adopted for rotation which is an
orthogonal rotation method that minimizes
Table 9 shows commonalities which the number of variables with high loadings
provide relevant information after the on a factor, thereby enhancing the
desired number of factors have been interpretability of factors. Table 12 reflects
extracted. The commonalities under four variables Q11, Q12, Q13, and Q14
‘Extraction’ are different than under are correlated with factor 1 in the rotated
‘Initial’ because all the variances matrix. Hence this factor may be labeled
associated with the variables are not as ‘availability’ factor. The variables Q1,
explained unless all factors that are Q2, Q3 and Q9 correlate highly with factor
retained. The ‘Extraction Sums of Squared 2. Factor 2 may be labeled as ‘quality’
Loadings’ show the variances associated factor. The variables Q4, Q5, and Q6 are
with the factors that are retained. It can be correlated with factor 3 which may be
noted that they are the same as under named as ‘price’ factor. The remaining
‘Initial Eigen Values’. This is always the variables Q7 and Q8 correlates with factor
case in the principle component analysis. 4. Thus, factor 4 may be labeled as
The first factor accounts for (4.405/14) ‘promotion’ factor. So one can summarize
×100 or 31.466% of the variance of it by stating that consumers emphasize on
fourteen variables. Likewise, the second, four factors – availability, quality, price,
third and fourth factors accounts for
‐ 98 ‐


and promotion while purchasing MLM quality, price and promotion. So network
brands. marketing companies must increase the
number of distributors to make their
CONCLUSION products available to the customers.
Though many companies are offering
This study tried to highlight on the
MLM brands but it is not enough to meet
relationship between brands and
the demand of all customers and this is the
occupation, measuring brand loyalty of
reason behind low sales in Kolkata and its
different brands, and underlying factors
outskirts. Users of MLM brands are of the
behind purchasing of MLM brands. This
opinion that MLM brands charge fair price
study reveals that only 21.50% of total
as they are required in less quantity and
population of the area under study is using
deliver quality to the customers.
MLM brands. Now-a-days many
Promotion is also important for marketing
companies are offering MLM brands. Chi-
products. Network marketing companies
Square test establishes no relationship
do not promote their products through
between users of brands and occupation.
mass media advertisement. But they offer
But this study reveals that housewives are
some gifts to attract customers. Thus,
the main customers of MLM brands. It is
network marketing companies must
also observed that network marketing
consider these four factors which
companies are able to create loyal
customers seek from purchasing MLM
customers than other manufacturer brands.
brands. At the end it can be concluded that
This study identified factors that
there is plenty of opportunity in Kolkata
consumers seek from purchasing MLM
and its outskirts for network marketing
brands. These factors are availability,
companies if they considers above factors.
‐ 99 ‐


APPENDIX I
QUESTIONNAIRE
Name: ………………………………….………………………………...
Address: ......................................................................................................
Ph No …………………………………………………………………….
Name of the Investigator………………………………Date…………….
1. Age of the respondent (complete years) ………………………………
⁭ 16 to 20 ⁭ 21 to 25 ⁭ 26 to 30 ⁭ 31 to 35
⁭ 36 to 40 ⁭ 41 to 45 ⁭ 46 to 50 ⁭ 51 to 55
⁭ 56 to 60
2. Sex: Male ⁭ Female ⁭
3. Present Status of respondent:

Student ⁭ Government employee ⁭ Private employee ⁭
Businessman ⁭ Housewife ⁭
Others (Please specify)…………………………………………………
4. What is your favorite brand of shampoo? ………………………
5. Mention the number of purchases made on your favorite brand of shampoo out
of last 5 purchases (put tick on appropriate box).
0 1 2 3 4 5
‐ 100 ‐


6. How many times you have purchased other brands of shampoo out of last 5 purchases
(put tick on appropriate box).
No. of purchases out of five purchases

Name(s)
of Brand 1 2 3 4 5
7. Can you name a brand of shampoo which is not available in general stores or retail
shops?
……………………………………………………………………….
8. Listed below are different reasons for selecting MLM brands. Please indicate degree of
agreement with these on a seven point scale (1 = strongly agree, 7 = strongly
disagree):
Sl No. Statements Points
Q1 MLM brands increase lustre and make hair silky
Q2 MLM brands are suitable for everyday use
Q3 MLM brands promote hair growth and control hair fall
Q4 MLM brands charge fair prices
Q5 MLM brands are required in less quantity
Q6 Prices of MLM brands are suitable for third world economy like India
Q7 Free gifts are offered with MLM brands
‐ 101 ‐


Q8 MLM brands are generally packed in a suitable container
Q9 MLM brands reduce dandruff
Q10 I come across advertisement of MLM brands every now and then
Q11 MLM brands are easily available
Q12 Many companies offer MLM brands
Q13 MLM brands are available in sachet or in strips
Q14 MLM brands sell a wide variety of hair-care products.
REFERENCES 6. Nargundkar, R. (2008), Marketing

Research, Tata McGrow-Hill
1. Beri, G.C., (2000), Marketing Education Pvt. Ltd., New Delhi, 3rd
Research, Tata McGrow-Hill, New Edn.
Delhi, 3rd Edn.
7. Saifuddin, Samina M., Huq,
2. Kotler, P., Armstrong, G., Agnihotri, Mohammad N., and Hasan, Abu H
P.K., and Haque, E.U. (2010), R., (2006), “Social Scenario of
Principles of Marketing, 13th Ed., Multi-Level Marketing in
Pearson Education, New Delhi, pp. Bangladesh” Journal of Business
415. Studies, Vol. XXVII, No. 1, pp. 1-
20.
3. Lahiri, I., and Das, M.K. (2010),
“Network Marketing: Looking WEBSITE REFERENCE
through a new window”, Review of
Professional Management, A Journal 1. http://classes.seattleu.edu/business_g
of New Delhi Institute of raduate/mktg561/obermiller/obermill
Management, Vol. 8, Issue-1, er%20brand%20loyalty%20ms.doc –
January-June,2010, pp. 90-99. accessed on 10-11-2010.
4. Lahiri, I., and Das, M.K. (2010),

“Sustainability of Network
Marketing: Brand to Brew”, NSHM
Journal of Management Research
and Applications (NJMRA), Vol. 2,
No. 1, June 2010, pp. 32-43.
5. Laudon, Keneth C., and Laudon,

Jane P. (2004), Management
Information System: Managing the
Digital Firm, 8th Ed., Prentice Hall
of India Pvt. Ltd., New Delhi.
‐ 102 ‐


MARKETING AND
MANAGEMENT RESEARCH
A STUDY ON TOURIST’S SATISFACTION

LEVEL WITH A REFERENCE TO KERALA,
THE GOD’S OWN COUNTRY
RAJESH K*
*St. Aloysius College Elthuruth Thrissur Kerala S. India
ABSTRACT
Kerala popularly known as ‘God’s own country’ in the global tourism market
was the first state in India to declare tourism as an industry way back in 1986.
Though the performance of the state in tourism sector was low compared to other
states in India, it could marked the highest growth rate of tourism development
even in the world with 10.4% in 2002 along with Turkey. Both the public as well
as private sector promote a series of reforms to encourage more foreign and
domestic tourists to the state and the ever increasing flow of both foreign and
domestic tourists to Kerala indicates that their efforts taken in the recent past
have started paying dividends. But, for confirmation, one has to evaluate whether
the brand image projected in the promotional activities has been perceived by the
tourists when they actually visit the destinations. The congruence of the expected
image of destination with what is perceived at destinations creates satisfaction
about the destination. This satisfaction generated by meeting the desires of
customers is a key element in the sustainability of destinations. Satisfaction
encourages new and repeat visits of tourists. In this context this study aims to
measure the satisfaction level of tourists towards the tourism attributes of the
state. The present study was based on primary data which was collected during
2006 to 2007 from various coastal tourism centres of Kerala. The results
indicates that Kerala has to go a lot to satisfy both the domestic and foreign
tourists to make a sustainable tourism destination as visualised in the Vision
2025 of the state.
KEYWORDS: Foreign and domestic tourists, multi-dimension scaling,

satisfaction levels, spider graph.
INTRODUCTION in the global tourism market, more as a

quality destination, attracting high
The stated objective of the state spending tourists, than going for mass
Government was to promote Kerala, tourism chasing numbers (GOK, 1995).
always regarded as the God’s own country This conscious strategy of taking the
‐ 103 ‐


destination away from mass tourism to a by the individual. Satisfaction, therefore, is
destination with a boutique image a mere function of the needs and interests
attracting tourists of specific taste resulted of the individual than the attributes and
in developing new tourism products such characteristics of the services provided.
as, house boats, heritage homes, Measuring satisfaction of tourists about a
Ayurvedic rejuvenation centres, etc. and destination is conceptually different from
new tourism destinations, such as, measuring satisfaction with the services
beaches, backwaters, wild life sanctuaries, delivered by individual enterprises (Pike,
plantations, etc. The Government, further, 2004). Definitely, the satisfaction achieved
strengthened the policy framework with by tourists with various services at
the declaration in 2000 of a new quality destination do influence the overall
statement entitled ‘Vision 2025' (GOK, satisfaction about the destination because
2001). 'Vision 2025' reflected on the the traveller's perspective of a destination
growing concern for environmental is made up of a composite of service
conservation, heritage and culture encounters judged as a total experience
protection, lack of basic infrastructure (Medlik and Middleton, 1973). At the
surrounding major destinations and the destination level the implication is that
need for proper quality assurance systems poor service provision by one or more
and legislations to regulate and bring sectors of the community which may or
quality in tourism. The revised quality may not be directly involved in the tourism
framework thus emphasised the need for may ultimately impact on the success of
developing innovative and quality tourism other suppliers. The characteristics, such
products and appropriate marketing as, perishability, inseparability,
strategies. Creation of a variety of products intangibility, simultaneous production and
and destinations offers tourists an consumption etc. of tourism make the
enriching experience of Kerala. Efforts measurement of satisfaction vitally
were taken at branding the destination important. Till date, there has not been any
along with the focussed promotional report on the satisfaction levels of tourists
strategies around the theme 'God's own visiting tourism destinations of Kerala and
country' and these efforts helped to a field survey had been conducted with the
differentiate 'Destination Kerala' from following objectives, (i.) to understand the
other states of India. The congruence of demographic profile and the visitation
the expected image of destination with profile of the domestic and foreign tourists
what is perceived at destinations creates of coastal tourism spots, (ii.) to study the
satisfaction about the destination. This expenditure pattern of domestic and
satisfaction generated by meeting the foreign tourists in coastal tourism spots,
desires of customers is a key element in and (iii) to study the level of satisfaction of
the sustainability of destinations. tourists with regard to the tourist facilities
Satisfaction encourages new and repeat in the state.
visits of tourists. The latter can be best
achieved by ensuring that the current II. METHODOLOGY
offers are satisfying the needs,
In accordance with the objectives of the
expectations and desires of current tourists
study, four important coastal tourism spots
and their propensity to recommend the
of Kerala, namely Kovalam, Varkala,
destination to others.
Alappuzha and Fort Kochi were selected
Measurement of satisfaction involves an for the survey. Thirty foreign tourists and
assessment of whether the experiences thirty domestic tourists (from outside
have resulted in the desired benefit sought Kerala) from each spot were interviewed
‐ 104 ‐


at random over a period of six months Altogether, 120 foreign and 120 domestic
from October 2006 to March 2007, (out side Kerala) tourists responded to the
coinciding with the peak tourist season in interview and detailed results were
coastal tourism spots. A structured and presented elsewhere (Rajesh, 2009).
validated questionnaire was used to Important information gathered is that the
interview the tourists. The questionnaire main tourism generating countries for the
included queries on age, nationality, state are UK, Germany, Spain, USA and
education, occupation, annual income of France. Majority of domestic tourists are
the tourist, their source of information from the neighbouring states of
about Kerala, mode of transport to Tamilnadu, Karnataka, Maharashtra, Goa
Kerala, entry point in Kerala, number of and Andhra Pradesh. The demographic
members in their group, motivation of profile of tourists showed that the majority
their visit, facilities availed, destinations of both foreign and domestic tourists were
visited/intended to visit, expenditure middle aged (31-50 years), highly
incurred, etc. Regarding the plan of their educated (graduation and above) and well
tour, they were asked their intentions to placed (professionals, government
visit and stay at the major tourism servants). The annual income of majority
destinations of the state like, Kovalam, of foreign tourists was above US$ 20,000
Varkala, Alappuzha, Kumarakom, Fort and that of domestic tourists above
Kochi, Kappad, Bekal, Thekkady, Rs.2,00,000. For foreign tourists, internet
Munnar, Thiruvananthapuram city, Kochi was found to be the main source of
city, Kottakkal, Thrissur and Guruvayoor. information about Kerala. For domestic
Further, to understand the satisfaction tourists, the main source of information
level of tourists, they were requested to was friends and relatives. The majority of
commend on their satisfaction on various foreign tourists were found to reach Kerala
facilities/amenities needed by them at the by air and domestic tourists by rail.
destinations on natural beauty, transport, Thiruvananthapuram and Kochi were the
food, accommodation, attitude of local main entry points for the foreign tourists,
people, attitude of officials, cleanliness, whereas Palakkad and Kochi were the
atmosphere, climate, communication of main entry points for domestic tourists. A
the people, general price level, information small percentage of tourists made more
regarding tourist sites, behaviour of shop than two visits to Kerala. A study of the
keepers and availability of toilets, expenditure pattern of domestic and
bathrooms etc. They were also requested foreign tourists showed that there was
to spell out any difficulty they had faced significant difference in the expenditure by
during their visit in Kerala. They were the two categories. The per capita daily
enquired whether they would make repeat expenditure calculated was Rs.3878 for
visits to Kerala and would recommend the foreign tourists and Rs.2234 for domestic
destination to their friends and relatives. tourists. The major items of expenditure
The investigator himself interviewed the for both foreign and domestic tourists were
tourists by visiting each spot once in every accommodation, food and beverages.
month. Children below the age of 15 were
excluded from the interview. In this paper, data related to the motivation
of travel, major attractions of tourists and
III. DEMOGRAPHIC AND their satisfaction level are reproduced and
VISITATION PROFILE OF discussed.
TOURISTS
MOTIVATION FOR TOUR
‐ 105 ‐


The tourists who were interviewed during tourists (table 1). About 91% of foreign
the survey revealed that they had more tourists and 68% of domestic tourists
than one motivation for visiting Kerala. informed that they came to Kerala mainly
The responses obtained were analysed by for recreation or pleasure along with other
totalling all the motives expressed by the motives.
TABLE 1: MOTIVATION OF TOURISTS VISITING COASTAL TOURISM SPOTS

IN KERALA (2006-07)
% of tourists
Motivation (Purpose)
Foreign Domestic
Leisure, Recreation and Holidays 90.8 68.3
Visiting Friends and Relatives 25.8 39.2
Business and Profession 30.0 20.8
Health Treatment 11.9 9.1
Religion/Pilgrimage 8.3 25.8
Source: Field Survey
About 26% of foreign tourists and 39% of Each of the 14 places specified in the
domestic tourists had visiting their friends questionnaire has its own specific
and relatives in their agenda with other attractions. Thus Kovalam, Varkala,
motives. Business was the motive for 30% Alappuzha, Kumarakom, Fort Kochi,
of foreign tourists and 20.8% of domestic Kappad and Bekal are known for
tourists, along with other motives. Nearly beach/backwater tourism; Thekkady and
12% of foreign tourists and 9% of Munnar for wildlife tourism;
domestic tourists came for health care. Thiruvananthapuram city, Kochi city and
Nearly 26% of domestic tourists had Thrissur for cultural tourism; Kottakkal for
religion/pilgrimage as their motive, health care (Ayurvedic treatment) tourism,
whereas only 8% of foreign tourists stated and Guruvayoor for pilgrimage tourism.
this as a motive. As in the case of motives, tourists had
more than one place of attraction. Table 2
DESTINATIONS PREFERENCE OF gives the information on the important
THE TOURISTS tourist destinations.
‐ 106 ‐


TABLE 2: IMPORTANT TOURIST DESTINATIONS (2006-07)

% of tourists
Tourist Spots
Foreign Domestic
Kovalam 83.0 59.0
Varkala 61.0 21.0
Alappuzha 46.0 32.0
Kumarakom 20.0 18.0
Fort Kochi 73.0 69.0
Kappad 0.0 3.0
Bekal 3.0 6.0
Kochi City 58.0 81.0
Thiruvananthapuram City 42.0 45.0
Guruvayoor 6.0 31.0
Kottakkal 5.0 3.0
Tekkady 27.0 26.0
Munnar 24.0 29.0
Thrissur 11.0 15.0
Others 48.0 49.0
Source: Field survey

About 83% of foreign tourists had visited/ attract foreign tourists. Fort Kochi (69%)
or would visit Kovalam, 61% visited and Kochi city (81%) are the most
Varkala, 73% visited Fort Kochi, and 46% preferred tourist destinations for domestic
visited Alappuzha. Foreign visitors also tourists and are followed by Kovalam
visited Kochi city (58%) and (59%) and Thiruvananthapuram city
Thiruvananthapuram city (42%) in large (45%). Next in preference is Guruvayoor
numbers. Next in order are Thekkady (31%). Munnar (29%) and Thekkady
(27%) and Munnar (24%). Kumarakom (26%) are also attractions to domestic
which is gaining importance as a tourists. About 5% of the foreign tourists
backwater tourism spot is yet to gain the and 3% of the domestic tourists had plans
needed publicity and only 20% of the to visit Kottakkal for Ayurvedic treatment.
foreign tourists had put Kumarakom in
their visit plan. The tourism spots of
Kappad (0%) and Bekal (3%) are yet to
‐ 107 ‐


IV. MEASUREMENT good, moderate, bad and very bad. The
SATISFACTION LEVELS OF number of respondents expressed their
TOURISTS satisfaction level to various constructs
proposed in the study are given in table 3
The satisfaction levels reported by tourists for foreign tourists and in
were graded into five classes: very good, table 4 for domestic tourists.
TABLE 3: NUMBER OF RESPONSES OF FOREIGN TOURISTS
Very
Very
Attributes/Level of satisfaction Good Good Moderate Bad bad
Natural Beauty 65 43 10 0 0
Transport 18 56 40 4 0
Food 49 60 9 0 0
Accommodation 29 64 25 0 0
Attitude of local people 30 49 37 1 0
Attitude of officials 15 47 36 2 4
Cleanliness 12 31 43 23 7
Healthy atmosphere 20 49 40 7 2
Climate 26 61 25 6 0
Communication of the people 21 56 31 8 2
General Price level 27 65 65 1 0
Information regarding tourism sites 13 53 41 7 3
Behaviour of shop keepers 10 34 49 23 2
Availability of toilets, bathrooms, etc.

at the sites 2 18 41 32 20
Source: Field Survey

From table 3, it can be seen that most of good' or 'good' satisfaction levels to these
the foreign tourists visiting Kerala assign attributes.. However, a large number of
'very good' or 'good' score to the natural foreign tourists expressed 'bad' or 'very
beauty of the destinations. Most of them bad' opinion over the cleanliness and
consider the amenities such as food, availability of toilets, bathrooms, etc. at
transport, accommodation, attitude of local tourism destinations. A good number of
people, climate, etc. also meet their foreign tourists recorded 'moderate', 'bad'
expectations as they have accorded 'very or 'very bad' satisfaction levels against,
‐ 108 ‐


general price levels, behaviour of shop sites, attitude of the officials and
keepers, information regarding tourism communication of the people.
TABLE 4: NUMBER OF RESPONSES OF DOMESTIC TOURISTS
Attributes/Level of satisfaction Very good Good Moderate Bad Very bad

Natural Beauty 73 39 8 0 0
Transport 20 70 27 3 0
Food 32 55 29 1 3
Accommodation 23 75 21 1 0
Attitude of local people 25 66 26 1 0
Attitude of officials 13 50 24 1 0
Cleanliness 22 52 39 5 0
Healthy atmosphere 22 66 24 5 0
Climate 28 72 13 4 0
Communication of the people 19 68 27 1 0
General Price level 15 64 28 13 0
Information regarding tourism sites 12 65 41 1 1
Behaviour of shop keepers 5 62 50 0 3
Availability of toilets, bathrooms, etc. at
the sites 3 31 52 16 15
Most of the domestic tourists also about the natural beauty of destinations
expressed 'very good' or 'good' opinion (table 4). Many of them assigned 'very
‐ 109 ‐


good' or 'good' score for facilities such as,
food, transport, accommodation etc., and,
like foreign tourists expressed 'bad' or
'very bad' opinion about facilities like
toilets, bath rooms, and cleanliness of
destinations. A large number of domestic
tourists assigned 'moderate' or 'bad' score
to facilities like, behaviour of shop
keepers, information regarding tourism
sites, general price level, healthy
atmosphere, attitude of local people,
attitude of officials etc. Data indicate
'moderate' to 'very good' level of
satisfaction on majority of attributes
included in the questionnaire by both
foreign and domestic tourists.
MULTI-DIMENSIONAL SCALING
OF SATISFACTION LEVELS OF
FOREIGN AND DOMESTIC
TOURISTS
The mean scores obtained in table 4 were
further subjected to multi-dimensional
analysis1, using SPSS 15, in order to bring
out the key dimensions which underlie the
satisfaction levels of tourists. A two-
dimensional solution was found to the best
fit. Mean deviation of satisfaction levels
of tourists are given in table 5. Here, the
dimensions ‘nature’ represents natural
attributes, and ‘people’ represents man-
made attributes of tourism development.

1
Multi-dimensional scaling model is considered
useful to find out the key dimensions which
underlie the tourist’s perceptions of tourism
products (Goodrich, 1978, and Fondness, 1990).
This technique represents the structure of these
perceptions in a graphic form, which thereby
assists in interpreting the results (Kruskal and
Wish, 1978).
‐ 110 ‐


TABLE 5: MEAN DEVIATIONS OF SATISFACTION LEVELS OF TOURISTS
(2006-07)

Foreign tourists Domestic tourists

Attributes
Nature People Nature People
Natural beauty 2.0149 0.0700 2.1177 -0.0771
Transport 0.2383 0.3268 0.4605 0.2931
Food 1.4929 -0.2078 0.0008 1.8841
Accommodation 0.8436 0.2041 0.5904 0.7054
Attitude of local people 0.6259 0.4560 0.6760 0.1342
Attitude of the officials -0.3713 -0.4978 0.0456 -0.2909
Cleanliness -1.5838 -1.2586 0.0116 -0.7085
Healthy atmosphere -0.2408 -0.6859 0.5160 -1.1144
Climate 0.7605 -0.1469 0.7319 -1.0354
Communication of the people 0.0075 -0.7584 0.0231 0.4146
General price level 0.8278 0.5324 -0.7920 0.3708
Information regarding tourism sites -0.2197 0.2909 -0.0393 -0.0674
Behaviour of the shopkeepers -1.3164 1.1874 -0.7390 -0.3840
Availability of toilets, bath rooms -3.0794 0.4879 -3.6033 -0.1246

From table 5 it can be seen that For a visual understanding of the
both the foreign and domestic tourists perceptions of satisfaction levels of
assigned a high value to natural beauty of tourists, the data are reproduced in figure
the state. This indicates the prominence 1 for foreign tourists and in figure 2 for
given to the pristine natural attractions by domestic tourists. The figures give a
the visitors to Kerala and emphasises the spatial display of fourteen attributes in the
need for protecting the natural study in two dimensions as obtained from
environment of Kerala for sustaining the the Multi-dimensional scale (MDS) model.
tourism sector of the state.
‐ 111 ‐


FIG. 1: MULTI-DIMENSIONAL SCALING FOR SATISFACTION LEVELS
OF FOREIGN TOURISTS
Multi dim e ntiona l sca ling m ode l for sa tisfa ction le ve l of fore ign tourists
Beh av io u r o f th e sh o p k eep ers

1.0
G en eral P rice lev el

0.5 A ttitu d e o f lo cal p eo p le
A v ailab ility o f to ilets, b ath ro o ms .. Tran sp o rt
In fo ramtio n reg ard in g To u rism sites A cco mmo d atio n
People
0.0 C limate Natu ral b eau ty
Food
-0.5 A ttitu d e o f th e o fficials
Health y A tmo sp h ere

C o mmu n icatio n o f th e p eo p le
-1.0
C lean lin ess
-1.5
-3 -2 -1 0 1 2
Nature
FIG. 2: MULTI-DIMENSIONAL SCALING FOR SATISFACTION LEVELS OF

DOMESTIC TOURISTS
M u lti d im e n tio n al s calin g m o d e l fo r s atis factio n le ve l o f d o m e s tic to u r is ts

2.0
Food
1.5
1.0
A c c o mmo d atio n
People
0.5 C o mmu n ic atio n o f th e p eo p le

G en eral P ric e lev el
Tran sp o rt
A ttitu d e o f lo c al p eo p le
0.0 A v ailab ility o f to ilets, b ath ro o ms .. N atu ral b eau ty
In fo ramtio n reg ard in g To u rism sites
A ttitu d e o f th e o ffic ials
Beh av io u r o f th e sh o p k eep ers
-0.5
C lean lin ess
-1.0 C limate
H ealth y A tmo sp h ere
-4 -3 -2 -1 0 1 2
Nat ure
‐ 112 ‐


In figures 1 and 2, the horizontal axis can was used as the response format with
be interpreted as a type of natural attribute, assigned values ranging from 5 = 'very
moving from right (highly influenced by good' to 1= 'very bad’ to represent
nature) to left (least influence). Thus, satisfaction levels of tourists. Fourteen
natural beauty which is contributed wholly variables, namely natural beauty, transport,
by nature occupies the extreme right food, accommodation, attitude of local
position and availability of toilets, bath people, attitude of the officials,
rooms etc., least influenced by nature, an cleanliness, healthy atmosphere, climate,
extreme left. The attributes such as food, communication of the people, general
accommodation, general price levels, price level, information regarding tourism
climate and attitude of local people which sites, behaviour of shop keepers and
are closely associated with native availability of toilets and bath rooms were
resources and culture are seen on the right considered. The satisfaction level with
side of the axis. The tourists value these respect to each variable was worked out
attributes of native Kerala as the most and presented. Each axis in this spider
important attractions to them. The vertical chart represents one variable. The mean
axis can be interpreted as man made scores of satisfaction level of both foreign
attributes that could be controlled by and domestic tourists, with respect to each
systematic practices. In the perception of variable, are plotted on the same axis. The
foreign tourists, (fig. 2), the cleanliness of mean scores obtained and marked in the
the destinations need urgent attention as it vectors were then joined together to form
is at the extreme low position. On the other ellipsoids to understand the differences in
hand domestic tourists considers the satisfaction levels of foreign and
cleanliness, behaviour of shop keepers and domestic tourist’s visits to Kerala.
availability of toilets, bath rooms etc. in
the list which require immediate attention
of destination managers.
COMPARISON OF SATISFACTION
LEVELS OF FOREIGN AND
DOMESTIC TOURISTS
From the above description it is clear that
the satisfaction levels of tourists different
from foreign and domestic tourists, which
could be described with the help of a
spider diagram or graph. A Spider
diagram2 has been constructed to find out
the difference between the satisfactions
levels of foreign tourists to that of
domestic tourists with various facilities.
For this purpose, a five point Likert scale

2
A spider diagram is a two dimensional chart of
three or more quantitative variables represented on
axes starting from the same point. The relative
position and angle of the axes are uninformative.
According to Vavra (1997) in spider chart each
vector represents a variable i.e. satisfaction level
‐ 113 ‐

IJMMR Volumee 2, Issue 4 2229‐6883
4 (April, 2011) ISSN 2

FIG
F 3: MEA
ASUREME
ENT OF SAT
TISFACTIO
ON LEVEL
LS OF FOR
REIGN AND
D
DOMESTIIC TOURIS
STS
Figure 3 shows that the satisfaction levels higherr level of sattisfaction thaan the foreiggn
of both foreign
f and domestic
d touurists were touristts. The meean differencce in the casse
the samee with respeect to naturral beauty, of foood may be thhe result of differences
d i
in
accommo odation and d attitude of local the atttitude of thhe tourists. However,
H thhe
people and the scores for thesee attributes low mean
m score for the av vailability of
o
were coomparativelyy high. Th he highest toiletss and bathh rooms need n special
score waas for naturaal beauty. With
W regard attentiion. Amonng the 14 vaariables, onlly
to food and generral price level also, the mean
m valuee of naturaal beauty is
foreign tourists
t assiggned higher score and apprecciable. In general, the t levels of
o
their leveel of satisfaaction was higher
h than satisfaaction are nnot appreciab ble and manny
that of domestic
d tourrists. Foreiggn tourists effortss are neededd to meet thee expectationns
assigned the least scores to thee attribute offereed by the imaage 'God's ow wn country'..
'availabillity of toilets, bath roomms etc' and
this waas followeed by 'clleanliness'. V. DIFFICULT
D TIES (OTH
HER THAN
Domesticc tourists also assiggned least TOURRIST ATTR
RIBUTES) FACED BY
positionss to these attributes
a butt recorded THE TOURISTSS
slightly higher sco ores than foreigners.
f
The public responsee towardds
With reegard to trransport, atttitude of
strikess/hartals is quite negatiive in Keralla,
officials, healthy atmosphere,, climate,
as it leads
l to muuch economiic loss to thhe
communiication of people, innformation
state. About 21.7% of the fooreign tourissts
regardingg tourism siites and beh haviour of
and 18.3% of the domeestic tourissts
shop keeepers domesttic tourists indicated
i a
Sri Kriishna Intern
national Ressearch & Ed
ducational C
Consortium
http://wwww.skirec.coom
‐ 114
4‐

complained that they were affected by ACKNOWLEDGEMENTS
different types of strikes in Kerala. It was
also found that 14.2 % of foreign tourists The statistical analysis of the data was
and 8.3% of domestic tourists were done by Dr. T. M. Jacob, Senior Lecturer,
affected because of holidays. Most of the Nirmala College, Muvattupuzha and the
museums were reported closed on author thankfully acknowledges the same.
Mondays/Tuesdays. From local to state
REFERENCES
levels, strikes were common in Kerala.
According to Mathrubhumi News Paper Anon., (2007): ‘Keralathil
(Anon., 2007) there were six state-wide Hartalukal 200’, Mathrubhumi
hartals and 200 regional hartals in Kerala daily, 21st July 2007.
during the period 2000 to 2007.
Fodness, D. (1990): ‘Consumer
VI. CONCLUSION Perceptions of Tourist Attractions’,
Journal of Travel Research, 28(1)
Among the tourism attributes, except pp. 3-10.
natural beauty, the levels of satisfaction
are not appreciable by the tourists. The GOK, (1995): Tourism Policy of
age-old political problems of the states like Kerala, Department of Tourism,
strikes, hartals etc. also act as a constraint Thiruvananthapuram, Government
of its tourism industry. Still the tourism of Kerala.
sector in India and Kerala are in the
GOK, (2001): Tourism Vision
progressive state. This may be attributed to
2025, Department of Tourism,
the findings of Wilson (1997). With regard
Thiruvananthapuram, Government
to satisfaction levels Wilson observes that
of Kerala.
the foreign tourists visiting India are well
aware of the litter and garbage problems in GOK, (2009): Kerala Tourism
public places. They visit India because of Statistics 2007, Department of
the persuasion of their friends who visited Tourism, Thiruvananthapuram,
India earlier. The powerful attractions of Government of Kerala.
tourists include cheap accommodation,
enjoyable beaches, friendly local people Goodrich, J.N. (1978): ‘A New
and a general lack of harassment. The Approach to Image Analysis
visitors anticipate that services and Through Multidimensional
facilities will be bad (Wilson, 1997). From Scaling’, Journal of Travel
the tourism development point of view it is Research, 16(1) pp. 3-7.
not sensible to consider all these issues are
taken for granted. Increasing discretionary Kruskal, J.B. and Wish, M.,
income of the tourists will change their (1978), Multidimensional Scaling,
attitude from price conscious to quality Beverly Hills, London.
conscious hence, sustainability of any Lovelock, C. H. (1991): Services
destination will depends on how it matches Marketing: Text, Cases and
the tourists satisfaction levels with their Readings, London, Prentice-Hall
expectation, and in this regard many International.
efforts are needed to meet the expectations
offered by the image ‘God’s own country’ Medlik, S. and Middleton, V.T.C.
as visualied in ‘Vision 2025’ of the state (1973): ‘The Tourist Product and
government. its Marketing Implications’,
‐ 115 ‐


International Tourism Quarterly, 3
pp. 28–35.
Pike, S. (2004): Destination
Marketing Organizations,
Amsterdam, Elsevier.
Rajesh, K. (2009): Coastal
Tourism in Kerala: its Impact on
Economy and Environment,
Cochin, Thesis submitted to the
Cochin University of Science and
Technology.
Vavra, T.G. (1997): Improving
your Measurement of Customer
Satisfaction, Milwaukee, The
American Society for Quality.
Wilson, D. (1997): ‘Paradoxes of
Tourism in Goa’, Annals of
Tourism Research, 24(1) pp. 52-
75.
Williams, D. R. (1988): ‘Great
Expectations and the Limits to
Satisfaction: A Review of
Recreation and Consumer
Satisfaction Research’, in A. H.
Watson (ed) Outdoor Recreation
Benchmark: Proceedings of the
National Recreation Forum. , U.S
Forest Service. General Technical
Report SE-52: 422-438.

‐ 116 ‐


MARKETING AND
MANAGEMENT RESEARCH
THE PERCEPTIONS OF THE

INSURANCE BROKERS ABOUT MARINE INSURANCE PRODUCTS
AND MARKET- A STUDY
DR. BYRAM ANAND*; MR. SURAJ THERUVATH**
*Pondicherry University Karaikal Campus Karaikal Pondicherry-609605

**Pondicherry University Karaikal Campus Karaikal Pondicherry-609605
ABSTRACT
“Perceptions of Insurance Brokers about the Marine Insurance products and

Market” is carried out to study the insights of the Insurance Brokers about the
marine insurance products and the market related to marine insurance.
Insurance Broker remains in constant touch with the clients and cater to their
problems by gathering proper information and assessing the risk profile and
requirements. An attempt has also been made to take the views of the insurance
brokers on various features that are preferred in a marine insurance policy by
the clients and customers. Hence, interaction with the insurance brokers would
give the company a sneak peek into various prospects mentioned above and
would provide information and leads for the company to improve upon their
coverage offerings and service quality.
Tata AIG General Insurance Company has been a pioneer in offering

Marine Cargo Insurance solutions to its clients amongst the private general
insurance companies. The company has been catering to various needs of its
clients related to insurance of their cargo and goods in transit. But the company
has never made a conscious effort to study the reputation of its marine insurance
policies in the market in comparison with the policies provided by other general
insurance companies. Hence, an attempt has also been made to take the views of
the insurance brokers on various features that are preferred in a marine
insurance policy by the clients and customers.
The main objective of this present research work is to study The relative
performance of select general marine insurance companies in the market based
on few criteria which are regarded as key for customer and client satisfaction
Comparative analysis of the general insurance companies in the market with
regards to their marine insurance products, service quality and value offered
would be drawn out. For the purpose of the study both primary and secondary
data was collected.
‐ 117 ‐


As per the Brokers, the claim settlement process of the marine department
is not on par with the high standards that it has set with respect to the above
mentioned processes. As per the brokers, the claim settlement takes a bit longer
time than it is expected from Tata AIG General Insurance Company. The
introduction of eMarine web based insurance certificate issuing facility for the
marine clients has added a lot of value to them for the premium they contribute
for the policy. Insurance field will generate to the employment for the contry
youth either directly or indirectly in the marine insurance brokering which in
turn incresae the marine insurance business for the companies and develop the
economy of the coutry
KEYWORDS: Brokers, Claim settlement, Marine insurance, Prompt issue of

policy, Underwriter promptness, technical expertise, online issue of policy.
INTRODUCTION regarding the service quality and value

offered by a company in comparison with
An Insurance Broker can be person the competitors, any shortfalls with
or a firm which finds sources for contracts respects to insurance product, service
of insurance on behalf of their customers. offered, claim settlement, underwriter
Insurance brokers have a thorough promptness, technical prowess of an
knowledge and extensive experience in the insurance company.
insurance sector and are quite conversant
with the contingent risks of life, non-life Hence, interaction with the
and their possible risk-management. They insurance brokers would give the company
actually broker the insurance deal between a sneak peek into various prospects
the insurance company and the consumer mentioned above and would provide
and in lieu for this, extract a commission. information and leads for the company to
improve upon their coverage offerings and
Insurance Broker remains in service quality.
constant touch with the clients and cater to
their problems by gathering proper RESEARCH PROBLEM
information and assessing the risk profile
and requirements. They are abreast with Tata AIG General Insurance
the new policies and schemes of the Company has been a pioneer in offering
insurance companies so that they can Marine Cargo Insurance solutions to its
choose and refer the right kind of clients amongst the private general
insurance product for their client’s insurance companies. The company has
requirement. been catering to various needs of its clients
related to insurance of their cargo and
This makes the Insurance brokers a goods in transit. But the company has
one stop information centre to know how never made a conscious effort to study the
the insurance products of various reputation of its marine insurance policies
companies are faring in the market in in the market in comparison with the
comparison with the competitor products. policies provided by other general
They can also provide a wide variety of insurance companies. The Company would
other information like the market stand of be immensely be benefitted if it has access
a company, the fame of its products, the to information like relative ratings of the
customer satisfaction levels, perceptions company in relation to such processes like
‐ 118 ‐


the competitive rates to coverage offered, The primary data was collected with the
features in the policy mainly preferred by help of a questionnaire designed to derive
the clients, claim settlement, promptness at information from Insurance Brokers.
issuing the policy, underwriter
promptness, technical expertise of the SECONDARY DATA
marine underwriters, online portal etc in
Through books, magazines, journals,
comparison to other general insurance
published and unpublished literature and
companies in the market.
in-house data of the firm.
These details can be efficiently
SAMPLE SIZE AND AREA OF THE
obtained from the Insurance Broking
STUDY
Agencies who deal both with multiple
insurance companies and clients on a day A sample of 30 insurance brokers selected
to day basis. The information thus base upon the convenience sampling
obtained would help the company in operating in the city of Hyderabad
improving upon its services and product
offerings in the future. PERIOD OF STUDY
Hence, an attempt has also been Due to financial constraints and lack of
made to take the views of the insurance time the period of study is restricted to
brokers on various features that are period of eight weeks
preferred in a marine insurance policy by
the clients and customers. LIMITATIONS OF THE STUDY
OBJECTIVES OF THE STUDY 1. Due to lack of time and resources

the study is restricted to eight
The main objective of this present weeks and the sample selected is
research work is to study only 30 which does not represents
the universe , hence the inferences
1. The relative performance of select drawn may be biased
general marine insurance
companies in the market based on 2. The study deals with only the non –
few criteria which are regarded as life insurance i,e marine insurance
key for customer and client brokers and it does not deals with
satisfaction the life insurances
2. Comparative analysis of the ANALYSIS AND INTERPRETATION

general insurance companies in the
market with regards to their marine The Company would be immensely
insurance products, service quality be benefitted if it has access to information
and value offered would be drawn like relative ratings of the company in
out. relation to such processes like the
competitive rates to coverage offered,
METHODOLOGY features in the policy mainly preferred by
the clients, claim settlement, promptness at
For the purpose of the study both primary issuing the policy, underwriter
and secondary data was collected. promptness, technical expertise of the
marine underwriters, online portal etc in
PRIMARY DATA
comparison to other general insurance
companies in the market hence the data
‐ 119 ‐


collected is analysed in the following Broking.Again there were brokers who
tables didn’t have much or no expertise in marine
and hence they have been counted under
PROPORTION OF MARINE the ‘No’ response as the business they did
INSURANCE BROKERS through Marine Broking was very
negligeable. It can be understood that
It is observed that a sizeable
Marine Insurance Broking is a profitable
proportion the Insurance Brokers met were
business for most of these Brokers and
providing Marine Insurance Broking
hence the company can make use of the
Services to their clients.As per their inputs,
network of these brokers in improving and
out of their total revenues, 20-30% was
expanding their marine insurance clientele.
contributed through Marine Insurance
TABLE 1
Particulars Number of Brokers (Out of Percentage

30)
Marine Insurance Brokers 19 65 %
Non Marine Brokers 11 35%
Source: Primary data
MARINE INSURANCE BROKING wide experience and network and hence
EXPERIENCE know the blood and vein of the Marine
insurance business. 35% of the brokers had
Most of the big insurance brokers an experience ranging between 3-4 years
in the city had an experience of greater while 8% and 2% of the brokers with 2-
than five years in Marine Insurance 3years and 1-2 years of experience
Broking services which accounted for 55% respectively. Hence, the inputs got from
and have a vast experience in Marine these brokers are very valuable for any
insurance advisory. Most of the high insurance company. The smaller brokers
officials in these broking firms are ex- around the city are relatively new to this
officials of the nationalized general field and constitute the younger generation
insurance companies and ventured into who joined the field recently and are a
insurance broking services based on their minority in number.
TABLE-2
Particulars Number of Brokers Percentage
1-2 Years 1 2%
2-3 years 2 8%
3-4 Years 10 35%
Above 5 years 17 55%
‐ 120 ‐


NATURE OF CLIENTS FOR MARINE pharmaceuticals and Chemical
INSURANCE manufacturers. A sizeable business comes
from the Exporters and Importers at 30%,
Manufacturers, Exporter/Importers, Contractors and Individuals being other
Contractors and Individuals are the major minor contributors at 7% and 3%
clients of Marine Insurance for any respectively. Hence, Manufacturers and
insurance company. As per the brokers Export/Import agents are the most
views a major chunk (60%) of the Marine favourable clients to be targeted to expand
Insurance business comes from the marine insurance clientele.
Manufacturers of various kinds especially
TABLE-3
Client Composition
Particulars Percentage
Individuals 3%
Contractors 7%
Exporters/Importers 30%
Manufacturers 60%

CONTRIBUTION FROM EACH Brokers.Export and Imports follow with
TRANSIT TYPE 34% and 10% of the total marine business
being contributed by the two categories.
Among the various types of transit, Hence there is a need for the insurance
marine insurance policy is mostly taken companies to peg on the Export and
for domestic transit of various types of Import sector clients and bring their
goods which constitutes 56% of the marine proportion on the same lines with the
insurance business as per the domestic transit
‐ 121 ‐


TABLE-4
Marine Transit Type Contribution
Transit Type Percentage
Domestic 56%
Import 10%
Export 34%

CONTRIBUTION FROM EACH contributes 55% of the business while
MODE OF TRANSIT transit of goods through Sea contributes
40% of the business to Marine Insurance
Transit of goods through Road and Rail Companies. Courier though subscribes for
and Sea are the major modes of transit for marine insurance does not contribute any
which Marine insurance is taken mostly as business as per the brokers of the city.
per the brokers. Road/Rail transit of goods
TABLE-5
Marine Transit Mode Contribution
Mode of Transit Percentage
Courier 0%
Road/Rail 55%
Sea 40%
Air 5%
PREFERENCE OF THE CLIENTS hazards. Hence, they would mostly prefer

a wider cover in a policy coupled with an
The Brokers were asked about the features affordable premium. The service level and
of a Marine Insurance Policy that the value are secondary and is looked at by the
Clients would normally prefer. The clients only if the marine policy satisfies
options that were provided were Premium, them with the first two features. Hence, it
Coverage, Value and Service. The Brokers is important for the insurance underwriters
mostly responded by saying that the clients to design marine cargo products which
wanted their cargo to be covered 24/7 offer wider cover along with an affordable
during transit and be covered against premium to conquer the market
losses caused by a wide range of perils and
‐ 122 ‐


TABLE-6
Features of a Marine policy preferred by clients
Preference Number of Brokers Percentage
Coverage 18 60%
Premium 9 30%
Value-Service 3 10%

WHO DECIDES ON THE the various options of policies of different
COVERAGE TO BE OFFERED insurance companies and advice them with
UNDER THE POLICY the best suited one. While 30% of the
brokers said that it was the insurer who
While asked who would normally decide decided the extent of coverage based on
over the coverage specification to be the risk exposure of the insured, 10% of
included in a marine cargo policy, 60% of the brokers responded by saying that they
the brokers responded by saying that themselves chose the coverage based on
normally it was insured who decided the the client’s needs. Hence, as per the above
coverage and would approach the brokers table, it is observed that insured were the
with the specifications regarding the people who mostly decided on the
coverage. The brokers would then look at coverage as per most of the brokers.
TABLE 7
Decision Regarding Coverage
Particulars Number of Brokers Percentage
Insurer 9 30%
Insured 18 60%
Broker 3 10%

MARINE INSURANCE POLICIES Marine specific policies are the second
CONTRIBUTION TO MARINE best contributor with 40% contribution to
INSURANCE BUSINESS the marine insurance premium mainly
opted by the clients having shipments once
As per the inputs of the brokers, 50% of in a while.
the total Marine premium generated was
from selling the various Marine Open Hence, majority of the clients in Marine
policies as this policy offered more insurance market opt for Marine Open
convenience to the Manufacturers and Policies over Marine Specific Policy and
Exporters who had regular shipments. Marine Open cover.
‐ 123 ‐


TABLE-8
Policy Type Percentage Contribution
Marine Specific Policy 40%
Marine Open policy 50%
Marine Open Cover 10%

COMMODITY WISE BREAKUP OF basis. The same is the case with the
THE MARINE INSURANCE chemical industry. Since there is a regular
BUSINESS shipment of these products from these
companies, they are regular clients of
As per the Brokers, a majority of the brokers and insurance companies for
marine insurance premium comes from the transit insurance. Transit of Machinery
pharmaceuticals and chemical industry (20%) is the next big contributor to marine
that is 50%.The pharmaceutical products premium followed by Granite (15%),
manufactured in the country is routinely Tyres and tubes (10%) and Power sector
exported to other countries on a regular (5%).
TABLE-9
Commodity Percentage Contribution
Pharmaceuticals/Chemicals 50%
Machinery 20%
Granite 15%
Power Sector 10%
Tyres and Tubes 5%

PERFORMANCE RATING OF followed by the public sector companies
SELECT GENERAL MARINE New India Assurance company and
INSURERS Oriental Insurance Company.Other private
insurance companies like the Reliance,
As per the responses received from all the IFFCO Tokio, ICICI Lombard and Bajaj
brokers around the city, Tata AIG General Allianz have got mixed responses from all
Insurance Company is the front runner in the brokers.As per the Brokers, Tata AIG
the race amongst all the other general Marine’s web based portal called
insurance companies with respect to its ‘eMarine’ is the best online portal for
Marine Insurance practice. Tata AIG is
‐ 124 ‐


issuance of marine insurance policies and adds a lot of value to its Marine policies.
TABLE-10
Company Premium Claim Prompt Underwriter Technical Online

Rate to Settlement issue of promptness Expertise issue of
Coverage policy policy
offered
Tata AIG General
Insurance 1 2 1 1 1 1
Company Ltd
Bajaj Allianz 3 3 3 4 4 5
Reliance 3 3 3 4 4 5
IFFCO Tokio 2 3 3 3 3 5
ICICI Lombard 3 4 4 5 4 5
ew India Insurance 2 2 3 2 2 5
Oriental Insurance 2 2 3 2 2 5

1- Excellent 2- Very Good 3-Good 4-Average 5- Poor
RATING OF GENERAL INSURANCE related to Marine Insurance. Tata AIG is
COMPANIES BASED ON THEIR followed by Bajaj Allianz and the public
ABILITY TO ACCEPT VARIOUS sector giants New India Assurance and
KINDS OF RISKS Oriental Insurance Company in rating. ICICI
Lombard has got poor remarks in this regard
As per the Broker’s experience as it has not established a favourable
Tata AIG is again the market leader when it impression amongst most of the brokers in
comes to accepting various kinds of risks the city with respect to assuming risks.
‐ 125 ‐


TABLE-11
Company Rating (1-5)

Tata AIG General Insurance 1
Bajaj Allianz 1
ICICI Lombard 5
Reliance 3
IFFCO Tokio 3
New India Assurance 2
Oriental Insurance 2
1- Excellent 2- Very Good 3-Good 4-Average 5- Poor
FINDINGS 4. As per the Brokers, the claim
settlement process of the marine
1. Through the interaction with the department is not on par with the high
various brokers in the city it was found standards that it has set with respect to
that Tata AIG Marine has over the the above mentioned processes. As per
years earned a good reputation with the brokers, the claim settlement takes
them and the clients and customers. a bit longer time than it is expected
from Tata AIG General Insurance
2. The Broker’s are impressed with the
Company.
quality of service offered by Tata AIG
thanks to its dedicated team of marine DISCUSSIONS
underwriters and staff stationed in
every branch of the company Interaction with the Insurance
throughout the country. Brokers was value add to gain hands on
inputs in Marine Insurance Business and
3. As per the responses received from all Market. One thing that came to light was
the brokers around the city, Tata AIG the dearth of experts in the Marine
General Insurance Company is the Insurance underwriting. This reflects the
front runner in the race amongst all the various avenues that can open up for
other general insurance companies individuals trained and versed in Marine
with respect to its Marine Insurance Insurance.
practice. It leads all the other general
insurance companies in such features SUGESSIONS
like premium rates to coverage offered,
prompt issue of the policy, underwriter 1. The introduction of eMarine
promptness, Technical expertise of the web based insurance certificate
underwriters, and online issue of the issuing facility for the marine
policy. clients has added a lot of value
to them for the premium they
‐ 126 ‐


contribute for the policy. It has coming from them in addition
eased the process of issue of to Manufacturers and
Certificate of Insurance to the Export/Import agents.
clients for their shipments. The
idea that the clients can issue 3. A lot of importance is given to
the certificate of insurance coverage while the client or
themselves by logging in to the customer looks into a Marine
website with their own unique policy. Premium and service
User id and password is one of levels are given secondary
its kind in the market and is not priority by the customers. As
seen elsewhere with respect to per the brokers, a customer is
marine insurance. Again a coaxed into taking the marine
thumbs-up to Tata AIG for this insurance policy when he feels
innovative initiative. that his needs are given due
importance by the insurer and
2. A majority of the business is when most of his needs are
observed to be coming from the covered by the policy terms
Manufacturers and Exporters decided by the underwriter.
/Importers and not much from Hence, it would be a great
the Contractors and prospect if the underwriting
Individuals. Though the specialists at every branch of
contribution is negligible and Tata AIG General Insurance
the scale of business with such Company look at every
individuals would be limited, it proposal in a unique way and
is advisable and a good try to custom design the policy
business proposition to terms as per the needs of the
concentrate the company’s client keeping the interests of
sales forces over pegging the the underwriting principals and
Contractors and the Individuals the company at the same time.
into taking the marine This would elevate the
insurance policy for their company’s reputation as a
projects. In majority of the specialist in offering marine
cases, the contractors and insurance solutions.
individuals hesitate from taking
a policy as they would be CONCLUSION
having their own arrangements
The insurance business is
or might not be well aware of
developing in india with respect to life and
the benefits of taking a marine
non life insurance , but we see only few
policy for their transits. Hence,
palyers are providing the marine insurance
a strategy of meeting the
in india. For the development of marine
Contractors and Individuals in
insurance business we require the skilled
particular and educating them
trained persons to sell the marine
about the benefits of Marine
insuramcne products , the insurance
insurance policy and the
brokers paly a vital role in development of
convenience offered by the
marine insurance products , they are to be
eMarine facility of Tata AIG
trained according to norms and
General Insurance Company
regulations and are aware of the marine
would positively in all means
insurance products and schemes that are
result in a sizeable business
‐ 127 ‐


offered by the companies so as to sell the supervision of my work and his efforts to
products to the customers who require help me bring up this report.
marine insuramce . Insurance field will
generate to the employment for the contry
youth either directly or indirectly in the
REFERENCES
marine insurance brokering which in turn
incresae the marine insurance business for 1. Ernst and Young Report on
the companies and develop the economy Insurance Trends and Perspectives
of the coutry . hence there is need for the
insurance brokers and training for them in 2. Ernst and Young Report on
the country like india and would be useful Insurance Industry June 2009
for the company in assessing its
performance and also in designing better 3. Howard Bennet, “The Law of
policies in future. Marine Insurance” Clarendon
Press, 1996
ACKNOWLEDGEMENTS
4. Insurance Institute of India,
I would like to take this “Marine Insurance IC-67”
opportunity to thank Mr. Prasad Vattimilli
, City Agency Manager and Mr. Santosh 5. William D.Winter, “Marine
David, Manager Marine, Tata AIG Insurance: Its Principles and
General Insurance Company Limited, Practice” Mc-Graw-Hill Book
Hyderabad Branch for having given their Company
most valued inputs for my research. I 6. Winsby’s Publishing 2006-07,
would like to thank my project guide and “Reference book of Marine
faculty advisor Dr. Byram Anand, Insurance Clauses”, 76th edition.
Assistant Professor, Department of
Management Studies for his constant
‐ 128 ‐


ANNEXURE
E -1
TABLE
Proporrtion of Brokers provviding Marrine Brokin
ng Servicess
65%
35%
Yes N
No

TA
ABLE -2
Marine Brokking Exp
perience
1‐2 years 2‐3 years 3‐4 years Above 5 yyears
2%
8%
55%
% 35%
Sri Kriishna Intern
ducational C
Consortium
‐ 129 ‐

TA
ABLE -3
C
Clients
s for M
Marine IInsurance
Manufacturers
60%
Exporrters/Imporrters 30%
Contrac tors 7%
Individuals 3%
TA
ABLE-4
C
Contribu
ution from each Transit ttype
60%
50%
40%
Percentage
g
30%
20%
10%
0%
Domesttic Import EExport
Percentage 56% 10% 34%

Sri Kriishna Intern
ducational C
Consortium
‐ 130 ‐

TA
ABLE-5
Con
ntributio
on from each mode of ttransit
C
Courier 0%
%
Roaad/Rail 55%
Sea 40%
%
Air 5%
TA
ABLE-6
Client P
Preferen
nce
0% Premium
30%
Coverage
C
60%
Value ‐Service Level
10%
Sri Kriishna Intern
ducational C
Consortium
‐ 131 ‐

TA
ABLE -7
Decission Regaarding C
Coverage
e
Insurer
30%
Insu
ured
Broker 60
0%
10%
TA
ABLE-8
Contributions from various M
Marine policies
60%
50%
50%
40%
4
40%
30%
20%
10%
10%
0%
Marine sp
pecific policy Marrine Open Policcy Marine Open Cover

TAB
BLE – 9
Sri Kriishna Intern
ducational C
Consortium
‐ 132 ‐

Com
mmodityy wise brreakup
50%
20%
15%
10%
5%
Sri Kriishna Intern
ducational C
Consortium
‐ 133 ‐

MARKETING AND
MANAGEMENT RESEARCH
AN EVALUATION OF PROFITABILITY
PERFORMANCE OF ESOP INDIAN BANKS
DR. RAMESH KUMAR DHIMAN*; VIRENDRA SINGH CHAUDHARY**

*Department of Commerce S.U.S Govt. College Matak Majri – Indri
**MDLR Airlines Gurgaon
ABSTRACT
An ESOP provides a way for employer and their employees to achieve the apex
tail of profitability in chaos and growth of the business. The study under
consideration is based on evaluation of profitability performance of Indian ESOP
banks. The study surveyed the public sector banks in relation to ESOP. The
sample size for the analysis is nine (9) Indian banks those implemented the
restructuring technique known as employee stock option plan (ESOP) since 2000
to 2005 as study period. The period under consideration is divided into two parts
pre-adoption and post-adoption period for which different financial ratios have
been calculated and compared pre output to post output. The expenditure
performance of the ESOP banks is not gained following adoption ESOP. Thus it
can be concluded that profitability performance of India banking sector did not
improve significantly after adoption of ESOP.
The remarkable effect of ESOP is positive

INTRODUCTION in terms of productivity on thousands of
enterprises as observed. It is thought that
The profitability is red blood of financial participation schemes provide
organization which leads to development employees with incentives to work more
and prosperity in modern fierce and better, communicate information to
competitive world. The organizations try management and colleagues and co-
to get standard level of profitability by operate with each other. Evidence suggests
employed modern profitability tools in that profit-sharing probably has a slightly
business operation. An ESOP provides a stronger effect than employee share
way for employer and their employees to ownership on total factor of productivity.
achieve the apex tail of profitability in Schemes that offer a larger financial
chaos and growth of the business. In some involvement have higher productivity
cases, employees can use an ESOP to effects. Cash profit-sharing schemes seem
acquire the whole of a business. This is to have a short-term effect, whereas share
technique of restructuring of the business schemes, which are more long-term
unit with the involvement of employees. oriented, probably have a more sustained
effect. A growing body of evidence
‐ 133 ‐


suggests that both main forms of financial to non-participatory ESOP companies and
participation have greater productivity non-ESOP companies at micro level of
effects when employees are well informed data set. Kruse (1984) ESOPs are
of the affairs of the firm, there is good associated with higher motivation; studies
communication with management, and generally found that higher motivation in
employees participate in governance and employee-owned firms as a consequent of
decisions. employee stock option plan. Kruse and
Blasi (1997) are able to conclude that on
Most research on employee ownership average in all the performance categories,
shows positive effects. These studies show ESOP companies do better per year than
that employee owned firms are more non-ESOP companies and that companies
productive and profitable, survive longer, do better post-adoption than pre-adoption.
and result in better shareholder returns. They estimate the average effect on the
Adoption of ESOPs result in better post- performance of the firm was
adoption performance compared to pre- approximately 4% annually. Rosen and
adoption performance and also compared Quarrey (1987) found that a sample of
to matched firms. Studies indicate nearly ESOP firms outperformed a non-ESOP
two-and-a-half percentage greater annual control group in terms of sales and
sales and employment growth among employment growth and that the sales
ESOPs as compared to conventional growth of the sample of ESOP firms
counterpart firms. Therefore the evaluation significantly improved after ESOP
would be done of this restructuring activity adoption. Quarrey and Rosen (1993)
in connection of Indian banks which have compared companies before and after the
already followed the employee stock adoption of ESOPs, and found faster
option plan for raising their productivity employment growth after ESOP adoption.
performance through employee’s These six studies indicate nearly two-and-
involvement in the decision. a-half percentage points greater annual
sales and employment growth among
LITERATURE REVIEW
ESOPs as compared to conventional
The following section of the study would counterpart firms. Quarrey and Rosen
like to review the previous studies have (1992) found significantly higher post
organized on the topic under adoption growth for ESOP companies that
consideration. Blasi and Kruse (1997) had participation groups and for ESOP
summarized eleven studies evaluating companies in which management
comparison of (a) performance before and perceived higher worker influence, study
after adoption of the ESOP, (b) ESOP to found significant increases in productivity
non-ESOP firms, and (c) post- adoption where the companies reported high levels
performance to matched non-ESOP firms. of worker influence.
Most of the studies find positive and
RESEARCH METHODOLOGY
statistically significant effects on post-
adoption performance. Blasi and Kruse The study tried to maintain reasonably
(2003) analyzing the relationship between level of accuracy in data collection and
employee ownership and satisfaction. The used widely acknowledged statistical
studies indicate that satisfaction and approaches for measuring ESOP effects
motivation as derived leads to participation across the industry groupings to achieve
in decision making. Kardas (1994) found the study objectives. The study under
higher sales and employment growth in consideration used nine banks which
participatory ESOP companies compared already implemented ESOP for the
‐ 134 ‐


benefits of its workforce or to enhance its performance of Indian banking
profitability before 2005. The whole study sector.
period divided into two parts pre-adoption
period and pos-adoption period of 3 years HYPOTHESES OF THE RESEARCH
each. Further different ratios of Assets,
In order to achieve the above said
Net Assets, Income, Other Income,
objectives and to evaluate the effect of the
Expenditure, Operating Expenses, Gross
ESOP on the Indian banking profitability,
Profit and Net Profit on per employees
the study will endeavor to test the
basis for pre-adoption period and post-
following hypotheses.
adoption period for all the nine banks are
calculated. The pre-adoption period have H01: ESOP does not affect the
taken 3 years before the ESOP established profitability of banking sector in India.
whereas the 3 years being decided for the
post-ESOP adoption. H02: ESOP does not increase the
remuneration costs in Indian banking
OBJECTIVES OF THE STUDY sector.
Indian banking sector is one of the largest SAMPLE SIZE AND DATA
profit making and employment provider COLLECTION
organization of the country. The study
would like to achieve the following To measure the effect of ESOP on
objectives. profitability performance of banking sector
in India, the study under consideration will
1. To make available a benchmark on used nine banks which already
the trends and practice of ESOPs in implemented ESOP for the benefits of its
India. workforce or to enhance its profitability.
The detail of all such Indian bank is given
2. To examines the effect of ESOP
here under, who have adopted ESOP for
adoption on the profitability
their employees before 2005.
Sr. No. Name of the Bank Public/Private Year
1 HDFC Bank Limited Private 2000

2 IDBI Bank Public 2001
3 AXIS Bank Private 2001
4 The United Western Bank Limited Private 2001
5 ING Vysya bank Private 2001
6 ICICI Bank Private 2003
7 Kotak Mahindra Bank Private 2003
8 The Development Credit Bank Ltd, Public 2005
9 The ABN AMRO Bank, Private 2005
To find the relevance of ESOP on Indian calculate different ratios which state the
banking sector, the secondary information significance of the plan with two time
are used in order to get the empirical window i.e. pre-adoption period and post-
results. For measuring the profitability the adoption period. The pre-adoption period
statistics so collected further analysis to have taken 3 years before the ESOT
‐ 135 ‐


established whereas the 3 years being following financial rations for presenting
decided for the post-ESOP adoption. the output in summary way.
However, the others information requires
in the study shall be collected from MEASUREMENT THROUGH
research journals, Business Standard, The FINANCIAL TOOLS
Economic Times, The Financial Express,
The following financial ratios are
periodicals will be employed. In order to
employed to measure the profitability
get the results the study has been used the
performance of the ESOP Indian banks.
Total Assets
1- Assets per Employee =
Total No. of Employee
Where Total Assets = cash balance with RBI & other banks+
Investments+ Advances+ Net Assets + other Assets.
Net Assets
2- Net Assets per Employee =
Where Net Assets= Total Assets - Depreciation
Total Income
3- Income per Employee =
Where the Total Income = Interest + other Income
Other Income
4- Other Income per Employee =
Expenditure
5- Expenditure per Employee =
Where Expenditure= Total of Interest expended + operating

expenses
Operating Expenses
6- Operating Expenses per Employee =
Gross Profit
7- Gross Profit per Employee =
‐ 136 ‐


Where Gross Profit=Total income - Expenditure.
Net Profit
8- Net Profit per Employee =
Where Net Profit= Gross profit – Tax provisions &

Contingencies
The present study has used the statistical tools for getting the empirical results which are
average, median and standard deviation. The value of average can be got by using the
following formula:
Average=Sum of observation/No. of observation
PROFITABILITY PERFORMANCE Following results have been received
OF ESOP INDIAN BANK while examining the 7 years data of all the
9 Indian banks who have adopted ESOP to
Indian banking sector is a set of all the examine the effect on assets per employee.
Indian banks includes all the Public Sector The data shows that in almost all the banks
Banks, Private Sector Banks and Foreign the total assets per employee (TAE) is
banks operating in India, Among all these increasing in post adoption periods of the
Indian banks the study considered the ESOP, the overall average of the all the
banks who have adopted ESOP for their bank data is also indicating the increasing
employee at least four years ago, i.e. prior trends in post ESOP adoption period. This
to the year 2005 for analyzing the effect of means that the level (investment) of assets
ESOP properly. has increased in post-adoption period due
to the employee involvement in investment
TOTAL ASSETS PER EMPLOYEE
decision making process through
(TAE) OF ALL THE INDIAN ESOP
employee stock option plan in almost all
BANKS
the banks.
Name of HDFC IDBI AXIS UWB ING ICICI KMB DCB The Overall
the Bank Bank Bank Ltd Vysya Bank Ltd Ltd ABN Average
Bank Ltd ESOP ESOP ESOP bank ESOP ESOP ESOP AMRO
ESOP -2001 2001 -2001 ESOP -2003 -2003 -2005 Bank,
-2000 -2001 ESOP-
2005
Pre – 2.975 1.161 4.080 1.508 1.168 7.107 3.206 3.459 0.858 2.84
ESOP
adoptio
n Period
Post- 6.125 2.474 7.917 1.853 2.201 10.933 5.375 3.074 0.894 4.53
ESOP
adoptio
n Period
NET ASSETS PER EMPLOYEE (NAE) examine the effect on the Net assets per
OF ALL THE INDIAN ESOP BANKS employee under mentioned result have
been received:
Going through the data of all the 9 banks
who have adopted ESOP in India to
‐ 137 ‐


Bank Ltd ESOP- ESOP ESOP bank ESOP ESOP ESOP AMRO
ESOP 2001 2001 -2001 ESOP -2003 -2003 -2005 Bank,
-2000 -2001 ESOP-
2005
Pre – 0.058 0.071 0.054 0.055 0.038 0.168 0.084 0.049 0.202 0.087
ESOP
adoptio
n
Period
Post- 0.105 0.114 0.092 0.078 0.040 0.411 0.068 0.058 0.127 0.121
ESOP
adoptio
n
Period
The above result shows that in all the banks the Net asset per employee has been
banks positive trend has been observed in increased.
post adoption period of ESOP. In overall
average column the amount for post ESOP INCOME PER EMPLOYEE (IE) OF
adoption period is registered as Rs. 0.121 ALL THE INDIAN ESOP BANKS
crore is showing which is higher in
The effect of ESOP on the Income of all
comparison to the amount shows in pre
the banks (9) who have adopted ESOP can
adoption overall average column i.e. Rs.
be seen as per under mentioned table:
0.087 crore. This indicates that after
adoption of ESOP in almost all the Indian
Name HDFC IDBI AXIS UWB ING ICICI KMB DCB The Overall
of the Bank Ltd Bank Bank Ltd Vysya Bank Ltd Ltd ABN Average
Bank ESOP2000 ESOP ESOP ESOP bank ESOP ESOP ESO AMRO
-2001 2001 -2001 ESOP -2003 -2003 P- Bank,
-2001 2005 ESOP-
2005
Pre – 0.350 0.115 0.354 0.108 0.131 0.670 0.572 0.283 0.123 0.301
ESOP
adopti
on
Period
Post- 0.368 0.215 0.740 0.145 0.237 0.788 0.765 0.290 0.204 0.417
ESOP
adopti
on
Period
The data of the above table indicating the income per employee (IE) is higher in post
increasing trend in the income per adoption period. Thus in post-adoption
employee of the entire Indian bank who period the income performance of the bank
have adopted ESOP in the post adoption positively improved due to plan
years. In overall average column also the implementation.
‐ 138 ‐


OTHER INCOME PER EMPLOYEE The effects of ESOP on other income per
(OIE) OF ALL THE INDIAN ESOP employee of the Indian banks who have
BANKS adopted it can describe from the data of
the following table:
the Bank Bank Bank Bank Ltd Vysya Bank Ltd Ltd ABN Average
Ltd ESOP ESOP ESOP bank ESOP ESOP ESOP AMR
ESOP- 2001 -2001 -2001 ESOP -2003 -2003 -2005 O
2000 -2001 Bank,
ESOP-
2005
Pre – 0.061 0.012 0.060 0.016 0.020 0.114 0.234 0.060 0.045 0.069
ESOP
adoption
Period
Post- 0.087 0.048 0.191 0.045 0.063 0.213 0.410 0.110 0.077 0.165
ESOP
adoption
Period
The above table shows that other income comparison of pre-adoption period in the
per employee (OIE) is increased after Indian Banking Sector.
adoption of ESOP by the Indian banks and
overall average amount of post adoption EXPENDITURE PER EMPLOYEE
year is registered as Rs.0.165 crore which (EE) OF ALL THE INDIAN ESOP
is high in comparison to Rs.0.069 crore the BANKS
amount of other income registered for pre
The effect of ESOP on the Indian Banking
adoption year for ESOP. Thus the other
Sector on expenditure per employee (EE)
income performance of the Indian bank is
can be shown by the table mentioned
improved in post-adoption period in
hereunder:
Name of HDFC IDBI AXIS UWB ING ICICI KMB Ltd DCB Ltd The Overall
the Bank Bank Bank Ltd Vysya Bank ESOP2003 ESOP2005 ABN Average
Bank Ltd ESOP ESOP ESOP bank ESOP2003 AMRO
ESOP 2001 2001 2001 ESOP- Bank,
2000 2001 ESOP-
2005
Pre – 0.243 0.099 0.280 0.051 0.114 0.597 0.234 0.240 0.071 0.214
ESOP
adoption
Period
Post- 0.449 0.162 0.540 0.111 0.192 0.756 0.410 0.260 0.156 0.337
ESOP
adoption
Period
As per the data of above table the Indian expenditure in post adoption period of
banks who have adopted ESOP have ESOP. This means the expenditure
shown rise in their expenditure per performance of the bank is not improved
employee in the post adoption period of after the implementation of ESOP.
ESOP. The overall average table also
following the similar trend of increases in
‐ 139 ‐


OPERATING EXPENSES PER The effects of ESOP adoption on the
EMPLOYEE (OEE) OF ALL THE operating expenses per employee (OEE) of
INDIAN ESOP BANKS the Indian banks can be analysis as per
under mentioned table’s data:
Name of HDFC IDBI AXIS UWB Ltd ING ICICI KMB DCB Ltd The Overall
the Bank Ltd Bank Bank ESOP2001 Vysya Bank Ltd ESOP2005 ABN Average
Bank ESOP2000 ESOP- ESOP2001 bank ESOP- ESOP- AMRO
2001 ESOP- 2003 2003 Bank,
2001 ESOP-
2005
Pre – 0.073 0.017 0.050 0.015 0.023 0.092 0.240 0.090 0.067 0.074
ESOP
adoption
Period
Post- 0.116 0.058 0.113 0.035 0.059 0.163 0.434 0.110 0.144 0.139
ESOP
adoption
Period
The data from the above table and from GROSS PROFIT PER EMPLOYEE
the overall average column clearly (GPE) OF ALL THE INDIAN ESOP
indicating that the operating expenses has BANKS
been increased in the post adoption period
of ESOP. Thus the performance of The effect on gross profit per employee
operating expenses per employee for post (GPE) of adopting ESOP on the Indian
adoption period in Indian banking sector banks can be shown through the following
cannot be considered good. table:
the Bank Bank Bank Bank Ltd Vysya Bank Ltd Ltd ABN Average
Ltd ESOP ESOP ESOP bank ESOP ESOP- ESOP- AMRO
ESOP 2001 2001 2001 ESOP- 2003 2003 2005 Bank,
2000 2001 ESOP-
2005
Pre – 0.100 0.017 0.073 0.058 0.018 0.163 0.136 0.050 0.052 0.074
ESOP
adoption
Period
Post- 0.116 0.052 0.202 0.043 0.045 0.172 0.182 0.022 0.048 0.098
ESOP
adoption
Period
The data from the above table shown that ESOP in the Indian Banking Sector the
the gross profit is increasing during post gross profit shows increasing tends.
adoption period of almost all the banks the
overall average column also shows that This states that the gross profit
Rs.0.098 crore in post adoption period in performance of the Indian Banks is
comparison to Rs. 0,074 crore in the pre improved after implementation of ESOP.
adoption period, Thus after adoption of
NET PROFIT PER EMPLOYEE (NPE)
OF ALL THE INDIAN ESOP BANK
‐ 140 ‐


The effects of adoption of ESOP on the net and continuous improvement was
profit performance of the Indian banks can registered thereafter.
be analysis here by the below mentioned
table. The data shows that except in 1 or 2 In the overall column we can see that in
banks in all the banks the net profit has post adoption period of ESOP per
increased after adoption of ESOP. In those employee net profit was registered more
one or two banks also where profit was (Rs.0.048 crore) in comparison to the pre
less, if we look at their balance sheet huge adoption period (Rs.0.035 crore). Thus
loss was observed during previous year ESOP has played significant role in
(ESOP adoption year) and after adoption enhancing the net profit
of ESOP profit performance was improved performance in post adoption period.
Bank Ltd ESOP ESOP ESOP- bank ESOP ESOP ESOP- AMRO
ESOP 2001 2001 2001 ESOP- 2003 2003 2005 Bank,
2000 2001 ESOP-
2005
Pre – 0.070 0.013 0.033 0.012 0.008 0.075 0.070 0.020 0.011 0.035
ESOP
adoption
Period
Post- 0.079 0.023 0.080 0.009 0.013 0.097 0.117 -0.020 0.014 0.048
ESOP
adoption
Period
‐ 141 ‐


CONSOLIDATED AVERAGE PROFITABILITY PERFORMANCE OF ESOP
INDIAN BANKS
Pre – ESOP adoption Period Post- ESOP adoption Period
4.08 AXIS Bank

UWB Ltd
The ABN,
7 AXIS Bank
UWB Ltd
The ABN,
IDBI Bank
IDBI Bank
7.10 ICICI Bank
KMB Ltd
30 ICICI Bank
KMB Ltd
Average
Average
DCB Ltd
DCB Ltd
1.16 ING Vysya
1 ING Vysya
HDFC
HDFC
Variables
TAE
6.12
2.47
7.91
1.85
2.20
10.9
5.37
3.07
0.89
4.53
2.97
1.16
1.50
3.20
3.45
0.85
2.84
5
4
5
4
4
NAE
0.05
0.07
0.05
0.05
0.03
0.16
0.08
0.04
0.20
0.08
0.10
0.11
0.09
0.07
0.04
0.41
0.06
0.05
0.12
0.12
IE
0.3
0.1
0.3
0.1
0.1
0.6
0.5
0.2
0.1
0.3
0.3
0.2
0.7
0.1
0.2
0.7
0.7
0.2
0.2
0.4
OIE
0.1
0.0
0.0
0.0
0.0
0.0
0.2
0.0
0.0
0.0
0.0
0.0
0.1
0.0
0.0
0.2
0.4
0.1
0.0
0.1
EE
0.59
0.0 0.24
0.0 0.09
0.0 0.28
0.0 0.05
0.0 0.11
0.2 0.23
0.0 0.24
0.0 0.07
0.0 0.21
0.1 0.44
0.0 0.16
0.1 0.54
0.0 0.11
0.0 0.19
0.1 0.75
0.4 0.41
0.1 0.26
0.1 0.15
0.1 0.33
OEE
0.0
GPE
0.1
0.0 0.1
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.1
0.0 0.0
0.0 0.0
0.0 0.0
0.0 0.1
0.0 0.0
0.0 0.2
0.0 0.0
0.0 0.0
0.0 0.1
0.1 0.1
0.0
0.0 0.0
0.0 0.0
NPE
0.0
-
-1.133
-1.294
-1.321
-1.503
-1.336
-1.445
-1.525
-1.328
t- values calculated through paired-
1.219
0.871
T- value samples t – test and testing at α = 0.05
level
No any value significant at α = 0.05
The consolidation average profitability hypothesis is accepted that profitability
performance shows by above table. The t- performance of India banking sector did
value is calculated using paired-samples t- not improve significantly after adoption of
test which comparing the pre and post ESOP.
profitability performance of the nine banks
under consideration for the study. The t – CONCLUSION
value for the HDFC bank is -1.133
The study under consideration surveyed
whereas -1.294 for IDBI bank which is not
the public sector banks in relation to ESOP
statistically significant at α = 0.05 level if
implementation since 2000 in Indian
risk. Moreover the t – value for ICICI bank
economy. After the micro analysis of nine
is 1.219 whereas -1.328 for average
bank’s data on different parts of
profitability performance of nine banks of
profitability performance i.e. per
the study which are not significant at five
employees based on total Assets, Net
percent (α = 0.05) level of risk. Thus null
‐ 142 ‐


Assets, Income, Other Income, Kochan and Margaret Blair, Eds.,
Expenditure, Operating Expenses, Gross Corporation and Human Capital.
Profit and Net Profit for both pre-adoption Washington, DC: The Brookings
period and post-adoption period, the Institution
research concluded that the total assets are
increased after the adoption of ESOP in • Conte M & A.S. Tannenbaum.
their business. ESOT play prominent role 1978. Employee-owned
to raise the profitability performance as companies: is the difference
well as productivity performance of the measurable? Monthly Labor
firm in long run as observed in India Review: 97-102
whereas the upward trend for the both • Kardas, Peter; Adria L. Scharf &
variable was observed in short run in Jim Keogh (1998), “Wealth and
abroad due proper implementation of the income consequences of ESOPs
scheme but the scheme adopted by Indian and employee ownership: a
industry since 2000 when Indian industry comparative study from
was suffering from shortage of talent of Washington State”, Journal of
their workforce. The study under Employee Ownership Law and
consideration has observed that income of Finance. Vol. no. 10(4), pp. 35-43.
the sample size increased during the study
period. The other income performance of • Kruse, Douglas & Joseph Blasi.
the nine Indian banks has improved 1997. Employee ownership,
whereas the expenditure performance has employee attitudes, and firm
not improved as found by the study. Thus performance: a review of the
it can be concluded that profitability evidence, In Daniel J.B. Mitchell,
performance of India banking sector did David Lewin, and Mahmood Zaidi,
not improve significantly after adoption of eds., Handbook of Human
ESOP. Resource Management.
Greenwich, CT: JAI Press, 1997,
REFERENCE
pp. 113-151
• Blasi and Kruse (1997), “Employee
stock ownership and corporate • Kumbhakar, SC & AE Dunbar
performance among public 1993. “The elusive ESOP-
companies”, Industrial and Labor productivity link,” Journal of
Relations Review, Vol.No.50 (1), Public Economics, 52: 273-283
pp. 134-136. Lamberg, Juha-Antti, Grant T.
Savage & Kalle Pajunen 2003.
• Blasi, Joseph, Michael Conte & Strategic stakeholder perspective to
Douglas Kruse. (1996), “Employee ESOP negotiations: The case of
stock ownership and corporate United Airlines, Management
performance among public 41:383-394.
companies”, Industrial and Labor
Relations Review, Vol.No.50 (1), • Quarrey, M. & Rosen, C. 1993.
pp. 60-79. Employee ownership and corporate
performance, Oakland, CA:
• Blair, Margaret, Douglas Kruse & National Center for Employee
Joseph Blasi. 2000. Is employee Ownership
ownership an unstable form? Or a
stabilizing force? In Thomas
‐ 143 ‐


• Rhodes, S.R. & R.M. Steers. 1981.
Conventional vs. worker-owned
organizations, Human Relations,
24: 1013-1035
• Rodrick, S. S. (2005) Leveraged

ESOPs and Employee Buyouts
(Fifth Edition), Oakland, CA: The
National Center for Employee
Ownership.
• Rosen, C. & M. Quarrey. 1987.

How well is employee ownership
working? Harvard Business
Review
65(September/October):126–28,
132
‐ 144 ‐


MARKETING AND
MANAGEMENT RESEARCH
PILGRIMAGE AT MATA VAISHNO DEVI:

PROBLEMS AND REMEDIES

PADMINI TOMER*; DR. R.S. ARORA**

*Continental College of Higher Studies
Jalvehra Fathegarh Sahib Punjab – 147001
**Department of Commerce
Punjabi University Patiala Punjab - 147001
ABSTRACT
Mata Vaishno Devi Shrine is one of the most popular destinations for religious
tourism in India. A large number of people visit this place all over the year
especially during Sawan and Navratras. It is the duty of government and the
authorities to provide basic tourism infrastructure facilities to the tourists. In
spite of huge tourism infrastructure facilities, visitors face several problems while
visiting the Shrine. The study is based on a sample of 100 pilgrims. The data so
obtained has been tabulated and analysed education-wise and type of pilgrim-
wise. The major findings reveal some problems faced by the pilgrims at Katra,
Enroute & Bhawan and suggest remedies to resolve them.
KEYWORDS: Mata Vaishno Devi Shrine, Problems, Tourism, Tourist’s

Behaviour.
labour known as pithu is available to help

INTRODUCTION the pilgrims to carry their belongings up to
the shrine and back. A large number of
The holy shrine of Mata Vaishno Devi is people within and outside the country visit
situated at Trikuta Hills, about 13 Kms. this shrine throughout the year. However,
from Katra town in Jammu and Kashmir during savan (rainy months) and navratras,
State. The deity is situated here in the form there is immense increase in number of
of three pindies of Devi Mahalakshmi, pilgrims. It is worth mentioning that more
Mahakali and Mahasaraswati. The journey than 82 lakh pilgrims visited the shrine in
to this destination starts mainly from the year 2009.Mata Vaishno Devi Shrine
Jammu. People can approach the Katra Board provides civic amenities to the
from here by road. The journey ahead is pilgrims and tourists visiting holy cave of
carried on the uphill mainly on foot or Mata Vaishno Devi. It is also concerned
through horse (mule). Weight lifting with up keeping and maintenance of the
places situated Enroute and at Bhawan. It
has been observed that tourists face several
‐ 145 ‐


problems relating to accommodation, food, group (family head or group leader) has
sanitation, drinking water, medical facility been taken in the sample. Further, research
etc. while visiting this place. Hence, an paper has been divided into three sections.
attempt has been made in this paper to Secton-1 highlights the problems faced by
highlight the problems faced by them in tourists in Katra. Section-2 and Section-3
this pilgrimage centre. The paper also deal with the problems faced by them En-
suggests remedies to resolve such route and at Vaishno Devi (Bhawan)
problems. respectively.
RESEARCH METHODOLOGY The data so obtained has been
tabulated and analysed education-wise and
The present study is based on a type of pilgrim-wise. Education wise, the
survey of 100 pilgrims conducted during respondents have been divided into five
2008 and 2009. In the absence of ready categories, viz. below matriculation (E1),
availability of any sampling framework, matriculates and under graduates (E2),
we have resorted to judgment sampling. graduates (E3), postgraduates (E4), and
The data has been collected with the help professionals (E5). Similarly, type of
of a pre-designed questionnaire pilgrim-wise the respondents have been
specifically prepared for this purpose by divided into four categories, viz.
personally visiting Mata Vaishno Devi individuals (T1), family group (T2),
Shrine 5 times (covering Navratra also) package tour group (T3), and friends group
with a gap of at least 3 months. While (T4). Category-wise profile of the
covering the group visitors (family or respondents is as under:-
otherwise), only one respondent from the
TABLE-1.1
EDUCATION-WISE/TYPE OF PILGRIM-WISE DISTRIBUTION OF THE
RESPONDENTS
Pilgrim Categories Educational Categories Total
E1 E2 E3 E4 E5
T1 1 5 4 3 3 16
(1) (5) (4) (3) (3) (16)
T2 8 9 11 5 8 41
(8) (9) (11) (5) (8) (41)
T3 5 2 2 2 9 20
(5) (2) (2) (2) (9) (20)
T4 - 3 6 6 8 23
(3) (6) (6) (8) (23)
N* 14 19 23 16 28 100
Note: 1. N represents total number of the respondents surveyed in this table and tables to
follow.
2. Figures in parenthesis in this table and tables to follow represent percentages.
‐ 146 ‐


returning from the Shrine. People also like
to purchase dry-fruits and antiques from
SECTION- I here for their friends and relatives. People
who come through taxi or by their own car
PROBLEMS FACED BY PILGRIMS
are also required to park their vehicles at
IN KATRA
Katra. During Savan and Navratras, when
Vaishno Devi Shrine is situated at Trikuta a large number of people come for
Hills situated at a distance of 12 Kms. pilgrimage, sometimes authorities stop the
from Katra. Registration of pilgrims at people for onward journey for a day or
Katra is the pre-requisite for onward two. Thus Katra, though a small town,
journey to the Shrine where a slip is issued generally remains a crowded destination
to each group at one of the designated due to the pilgrims. Following paragraphs
offices here. The journey to the Shrine is highlight the analysis of responses
carried generally on foot which motivates obtained from the respondents regarding
the pilgrims to stay at Katra either before basic facilities at Katra.
undertaking the onward journey or after
TABLE 1.2
PROBLEMS FACED BY THE RESPONDENTS IN KATRA
(EDUCATION-WISE/PILGRIM-WISE DISTRIBUTION)
Problems Educational Categories Pilgrims Categories Total
E1 E2 E3 E4 E5 T1 T2 T3 T4
Accommodation
Non availability 9 13 10 8 14 14 21 9 10 54
(64.28) (68.42) (47.61) (53.33) (51.85) (87.5) (52.5) (45) (50) (56.25)
High tariff 13 14 17 13 19 14 30 17 15 76
(92.85) (73.68) (80.95) (86.66) (70.37) (87.5) (75) (85) (75) (79.16)
Lack of cleanliness 12 13 17 10 15 11 36 8 12 67
(85.71) (68.42) (80.95) (66.66) (55.55) (68.75) (90) (40) (60) (69.79)
Problem of room 2 3 2 2 4 3 5 1 4 13
reservation (14.28) (15.78) (9.52) (13.33) (14.81) (18.75) (12.5) (5) (20) (13.54)
N 14 19 21 15 27 16 40 20 20 96
Food
High rate 11 15 22 15 23 13 37 15 21 86
‐ 147 ‐


(78.57) (78.94)(95.65)(93.75)(85.18)(86.66)(90.24)(75) (91.30)(86.86)
Oily and spicy 8 6 10 9 13 8 15 12 11 46

(57.14) (31.57) (43.47) (56.25) (48.14) (53.33) (36.58) (60) (47.82) (46.46)
Lack of freshness 7 5 12 9 13 5 18 10 13 46
(50) (26.31) (52.17) (56.25) (48.14) (33.33) (43.90) (50) (56.52) (46.46)
Lack of sitting 5 5 10 13 12 9 18 7 11 45
facilities (35.71) (26.31) (43.47) (81.25) (44.44) (60) (43.90) (35) (47.82) (45.45)
N 14 19 23 16 27 15 41 20 23 99
Parking
Lack of space 2 - - 1 4 - 3 4 - 7
(100) (100) (100) (100) (100) (100)
Lack of security 1 - - - 4 - 1 4 - 5
(50) (100) (33.33) (100) (71.42)
Misbehaviour by 1 - - - 2 - 1 2 - 3
concerned people (50) (50) (33.33) (50) (42.85)
N 2 - - 1 4 - 3 4 - 7
Transportation
Overcrowding in 9 12 16 12 20 9 26 13 21 69
buses
(64.28) (63.15) (69.56) (75) (71.42) (56.25) (63.41) (65) (91.30) (69)
Misbehaviour by 2 3 5 4 6 1 5 8 6 20
bus conductor (14.28) (15.78) (21.73) (25) (21.42) (6.25) (12.19) (40) (26.08) (20)
Inadequate bus 4 10 12 10 11 7 17 8 15 47
service
(28.57) (52.63) (52.17) (62.5) (39.28) (43.75) (41.46) (40) (65.21) (47)
To shivkhori
High tariff of taxi 1 7 9 7 17 7 11 10 13 41

(7.14) (36.84) (39.13) (43.75) (60.71) (43.75) (26.82) (50) (56.52) (41)
High tariff of local 11 16 22 13 13 11 35 13 16 75

auto
(78.57) (84.21) (95.65) (81.25) (46.42) (68.75) (85.36) (65) (69.56) (75)
‐ 148 ‐


N 14 19 23 16 28 16 41 20 23 100
Sanitation
Less number of 8 8 9 11 24 8 24 15 13 60
toilets
(57.14) (42.10) (39.13) (68.75) (85.71) (50) (58.53) (75) (56.52) (60)
(78.57) (84.21) (91.30) (81.25) (85.71) (100) (87.80) (75) (78.26) (85)
Lack of water in 3 5 5 7 16 5 12 9 10 36
toilets
(21.42) (26.31) (21.73) (43.75) (57.14) (31.25) (29.26) (45) (43.47) (36)
Overcrowding 9 18 20 13 14 14 31 12 17 74
(64.28) (94.73) (86.95) (81.25) (50) (87.5) (75.60) (60) (73.91) (74)
Overcharging by 3 2 3 4 7 1 8 1 9 19
sweeper
(21.42) (10.52) (13.04) (25) (25) (6.25) (19.51) (5) (39.13) (19)
Congested bathroom 7 12 15 12 11 10 26 7 14 57
(50) (63.15) (65.21) (75) (39.28) (62.5) (63.41) (35) (60.86) (57)
Less ladies bathroom 4 3 8 9 10 2 16 6 10 34

(28.57) (15.78) (34.78) (56.25) (35.71) (12.5) (39.02) (30) (43.47) (34)
Improper lighting 4 6 10 8 10 6 18 4 10 38
(28.57) (31.57) (43.47) (50) (35.71) (37.5) (43.90) (20) (43.47) (38)
N 14 19 23 16 28 16 41 20 23 100
Drinking Water
Less number of taps 14 18 21 15 24 16 36 17 23 92

(100) (94.73) (91.30) (93.75) (85.71) (100) (87.80) (85) (100) (92)
(35.71) (57.89) (47.82) (75) (67.85) (68.75) (46.34) (45) (82.60) (58)
Non-availability of 3 3 6 7 7 7 10 5 4 26
fresh water
(21.42) (15.78) (26.08) (43.75) (25) (43.75) (24.39) (25) (17.39) (26)
Non working taps 5 2 4 8 3 7 7 3 5 22
‐ 149 ‐


(35.71) (10.52)(17.39)(50) (10.71)(43.75)(17.07)(15) (21.73)(22)
N 14 19 23 16 28 16 41 20 23 100
Shopping
High rate 14 17 21 14 24 12 40 16 22 90
(100) (89.47) (91.30) (87.5) (85.71) (75) (97.56) (80) (95.65) (90)
Lack of quality 8 7 8 7 19 8 9 15 17 49
product
(57.14) (36.84) (34.78) (43.75) (67.85) (50) (21.95) (75) (73.91) (49)
Misbehaviour by 6 7 9 8 10 8 14 10 8 40
shopkeeper
(42.85) (36.84) (39.13) (50) (35.71) (50) (34.14) (50) (34.78) (40)
Lack of variety 7 6 6 12 9 10 12 8 10 40
(50) (31.57) (26.08) (75) (32.14) (62.5) (29.26) (40) (43.47) (40)
N 14 19 23 16 28 16 41 20 23 100
Medical Facility
Information not 6 7 8 8 11 5 19 5 11 40
available
(42.85) (36.84) (34.78) (50) (39.28) (31.25) (46.34) (25) (47.82) (40)
Less number of 3 2 6 3 8 - 14 2 6 22
doctors
(21.42) (10.52) (26.08) (18.75) (28.57) (34.14) (10) (26.08) (22)
Less number of 4 3 5 4 7 2 11 2 8 23
medical shops
(28.57) (15.78) (21.73) (25) (25) (12.5) (26.82) (10) (34.78) (23)
Less qualified 2 2 4 1 4 - 6 3 4 13
doctors
(14.28) (10.52) (17.39) (6.25) (14.28) (14.63) (15) (17.39) (13)
Indifferent attitude of 2 2 4 1 2 - 7 1 3 11
medical staff
(14.28) (10.52) (17.39) (6.25) (7.14) (17.07) (5) (13.04) (11)
Scarcity of medicines 1 2 1 1 2 - 4 1 2 7
(7.14) (10.52) (4.34) (6.25) (7.14) (9.75) (5) (8.69) (7)
N 14 19 23 16 28 16 41 20 23 100
Shelter
‐ 150 ‐


Less number of 14 18 22 15 21 15 38 18 19 90
shelters
(100) (94.73) (95.65) (93.75) (75) (93.75) (92.68) (90) (82.60) (90)
(14.28) (21.05) (30.43) (31.25) (42.85) (25) (24.39) (30) (43.47) (30)
(14.28) (15.78) (17.39) (25) (21.42) (12.5) (17.07) (15) (30.43) (19)
N 14 19 23 16 28 16 41 20 23 100
the respondents from category T4 have

reported the problem in room reservation.
ACCOMMODATION
FOOD
Accommodation is the basic
requirement of every tourist and its choice Food is a basic requirement of every
depends upon many factors like tariff, tourist and its choice depends upon many
safety, capacity to pay and comfort level factors like hygiene, rate, eating space,
etc. 96 respondents who have stayed in nature and variety of food etc. In response
Katra have highlighted some problems to a query, 99 respondents who have taken
regarding accommodation as shown in food in Katra have highlighted some food
Table 1.2. The table reveals that 79.16 per related problems. Table 1.2 depicts that a
cent of the respondents have faced the large number of the respondents (86.86%)
problem of high tariff followed by lack of have complained regarding high rate of
cleanliness (69.79%), non availability food and almost 46 per cent of the
(56.25%) and problem in reservation respondents have highlighted the problems
(13.54%). Education-wise a vast majority of oily and spicy food, lack of freshness
of the respondents irrespective of their and lack of sitting facility. Education-wise,
educational categories have faced the a vast majority of the respondents
problems of high tariff, lack of cleanliness irrespective of their categories have
and non availability (except category E3). highlighted the problems of high rate.
Further, 10-15 per cent of the respondents Further, 40-60 per cent of the respondents
have faced the problem regarding (except category E2) have faced the
reservation of accommodation. Pilgrim- problems of oily & spicy food and lack of
wise the table shows that a vast majority of freshness in food. However, 81.25 per cent
the respondents irrespective of their of the respondents from category E4 have
pilgrim categories have faced problems of reported the problem of lack of sitting
high tariff and lack of cleanliness (except facilities. Pilgrim-wise the table reveals
category T3). Further, 87.5 per cent of the that vast majority of the respondents
respondents from category T1 and 50-55 irrespective of their category have
highlighted the problem of high rate.
Further, 60 per cent of the respondents
from category T3 followed by category T1
per cent of the respondents from categories
(53.33%) have reported the problem of
T2, T3 and T4 have faced the problem
oily and spicy nature of food. However, 60
regarding non availability of
per cent of the respondents from category
accommodation. However, 20 per cent of
T1 have highlighted the problem of lack of
‐ 151 ‐


sitting facility while 56.52 per cent of the taxi (41%) and misbehaviour by the
respondents from category T4 followed by conductors (20%). Education-wise, the
category T3 (50%) have faced the problem table indicates that a vast majority of the
of lack of freshness in food. respondents have highlighted the problems
of over crowdedness in buses, high tariff
PARKING charged by local auto rikshaws (except
category E5) and inadequate bus services
Parking place is the basic
to Shivkhori (except category E1 and E5).
requirement for those who use own vehicle
Similarly, 60.71 per cent of the
for travelling and its choice depends on
respondents from category E5 and 35-45
availability of space, parking charges, and
per cent of the respondents(except
security etc. 7 respondents who have used
category E1) have complained regarding
their own vehicle to visit Katra have
high tariff charged by taxi. However, 25
highlighted some problems regarding
parking as shown in Table 1.2. The table
E4 have complained regarding
shows that a vast majority of the
misbehaviour by bus conductor. Pilgrim-
respondents have complained regarding
wise, the table shows that a vast majority
lack of parking space (100%) and lack of
of the respondents have faced the problem
security (71.42%) followed by
of over crowdedness in buses, high tariff
misbehaviour by security persons
by local auto, high tariff by taxi (except
(42.85%). Education-wise, a vast majority
category T1 & T2) and inadequate bus
of the respondents from categories E1 and
services to Shivkhori (except category
E5 have pointed regarding lack of parking
T1,T2 & T3). Further, 40 per cent of the
space and lack of security. Further, an
equal number of the respondents from
misbehaviour by bus conductor and
categories E1 and E5 have complained
problem in train reservation.
regarding misbehaviour by security
persons. Pilgrim-wise, the table shows that SANITATION
a vast majority of the respondents have
highlighted the problem of lack of parking Sanitation is a basic requirement of
space and lack of security(except category tourists. All the respondents who have
T2) and misbehaviour by the security visited Katra have highlighted some
persons(except category T2). problems regarding sanitation as shown in
Table 1.2. The table reveals that 85 per
TRANSPORTATION cent of the respondents have reported
regarding lack of cleanliness in toilets
Public transportation is the most
followed by overcrowding (74%), less
popular way when people travel from one
number of toilets (60%) and congested
place to another but its choice depends
bathrooms (57%). Further, 38 per cent of
upon many factors like tariff, availability
the respondents have complained
and reservation facility etc. All the
regarding improper lighting followed by
respondents have highlighted some
lack of water (36%), less number of ladies
problems regarding transportation as
bathrooms (34%) and overcharging by
shown in Table 1.2. The table shows that
sweepers (19%). Education-wise, majority
75 per cent of the respondents have
of the respondents irrespective of their
complained regarding high tariff charged
educational categories have complained
by local auto rikshaws followed by over
regarding lack of cleanliness,
crowdedness in buses (69%), inadequate
overcrowding, congested bathrooms
buses to Shivkhori (47%), high tariff by
(except category E5) and less number of
‐ 152 ‐


toilets (except category E2, E3 & E4). educational categories have faced the
Further, 57.14 per cent of the respondents problems regarding less number of taps
from category E5 have complained and lack of cleanliness near taps (except
regarding lack of water in toilets whereas categories E1 and E3). Further, 50 per cent
an equal number of the respondents (25%) of the respondents from category E4 have
from categories E4 and E5 have reported highlighted the problem of non working
the problem of overcharging by sweeper. taps whereas 43.75 per cent of the
However, 30-60 per cent of the respondents from same category have
respondents have highlighted the problem reported the problem of non availability of
of less number of ladies bathroom (except fresh water. Pilgrim-wise the table reveals
categories E1 & E2) and improper lighting that a vast majority of the respondents (85-
(except category E1). Pilgrim-wise, the 100%) have complained regarding less
table reveals that a majority of the number of taps. Further, 82.60 per cent of
respondents irrespective of their category the respondents from category T4 followed
have reported regarding lack of cleanliness by category T1 (68.75%) have complained
in toilets, overcrowding, less number of regarding lack of cleanliness near taps. An
toilets and congested bathrooms (except equal number of the respondents from
category T3). 45 per cent of the category T1 (43.75%) have highlighted the
respondents from category T3 have problem of lack of fresh water and non
highlighted the problem of lack of water working taps.
while 39.13 per cent of the respondents
from category T4 have reported the SHOPPING
problem of overcharging by sweepers.
People like to purchase goods at
Further, almost an equal number of the
religious places because of sanctity
respondents from category T4 (43.47%)
attached with that place. Thus, many
have complained regarding lack of water
tourist centre are big business centres and
and less number of ladies bathrooms.
provide good opportunities to sell for the
However, almost 44 per cent of the
marketers. However, choice of shopping
respondents from categories T2 and T4
place depends upon many factors like
have complained regarding improper
price charged for products, quality of
lighting in toilets.
products and behaviour of shopkeepers. In
DRINKING WATER PROBLEM a response to a query, all the respondents
who visited Katra have highlighted some
problems regarding shopping as shown in
Table 1.2. The table depicts that 90 per
Providing drinking water to tourists cent of the respondents have faced the
remains a big challenge for the managers problem of high rate. Further, 49 per cent
of a pilgrimage site. All the respondents respondents have communicated regarding
who have visited Katra have highlighted lack of quality products. An equal number
some problems regarding drinking water of the respondents (40%) have highlighted
as shown in Table 1.2. The table shows the problems of misbehaviour by
that majority of the respondents have shopkeepers and lack of variety.
pointed out the problems of less number of Education-wise the table shows that a vast
taps (92%) and lack of cleanliness near majority of the respondents irrespective of
taps (58%) followed by non availability of their educational categories have pointed
fresh water (26%) and non working taps out regarding high rates, lack of quality
(22%). Education-wise most of the products (except categories E2, E3 and E4)
respondents irrespective of their and lack of variety (except categories E2,
‐ 153 ‐


E3 and E5) at Katra. Further, 35-50 per regarding non- availability of information.
cent of the respondents have reported Further, 25-35 per cent of the respondents
regarding misbehavior by the shopkeepers. from categories T2 and T4 have reported
Pilgrim-wise the table shows that majority the problems of less number of doctors and
of the respondents have highlighted less number of medical shops. Similarly,
regarding problems of high rate and lack almost 17 per cent of the respondents from
of quality products (except category T2). categories T2 and T4 have highlighted the
Further, 62.5 per cent of the respondents problems of less qualified doctors and
from category T1 followed by categories indifferent attitude of medical staff.
T4 (43.47%) and T3 (40%) have However, the percentage share of the
complained regarding lack of variety in respondents who have complained
goods. Similarly, an equal number of the regarding scarcity of medicines is
respondents from categories T1 and T3 and negligible.
almost 34 per cent of the respondents from
categories T2 and T4 have reported SHELTERS
regarding misbehavior by shopkeepers.
Shelters are the basic requirement of
MEDICAL FACILITY pilgrims. All the respondents who have
visited Katra have highlighted some
To provide proper medical problems regarding shelters as shown in
facilities to the tourist is the responsibility Table 1.2. The table reveals that majority
of state government. All the respondents of the respondents (90%) have pointed out
who have visited Katra have highlighted the problems of less number of shelters
some problems regarding medical facilities followed by lack of cleanliness (30%) and
as shown in Table 1.2. The respondents improper lighting (19%). Education-wise a
have pointed out the problems of non vast majority of the respondents
availability of information (40%), less irrespective of their educational categories
number of medical shops (23%), less have reported the problem of less number
number of doctors (22%), less qualified of shelters. Further, 42.85 per cent of the
doctors (13%), indifferent attitude of respondents from category E5 and almost
medical staff (11%) and scarcity of 31 per cent of the respondents from
medicines (7%). Education-wise, the table categories E3 and E4 have complained
reveals that 50 per cent of the respondents regarding lack of cleanliness. However,
from category E4 followed by categories 15-25 per cent of the respondents (except
E1 (42.85%), and 30-40 per cent of the category E1) have quoted the problem of
respondents from other categories have improper lighting. Pilgrim-wise the table
reported the problem of non availability shows that a vast majority of the
of information. Further, 10-30 per cent of respondents irrespective of their categories
the respondents have highlighted the have reported the problem of less number
problems of less number of doctors, less of shelters. Further, 43.47 per cent of the
number of medical shops, less qualified respondents from category T4 and 25-30
doctors (except category E4) and per cent of the respondents from other
indifferent attitude by medical staff categories have complained regarding lack
(except categories E4 & E5). The of cleanliness. 30.43 per cent of the
percentage share of the respondents who respondents from category T4 have faced
have complained regarding scarcity of the problem of improper lighting.
medicines is negligible. Pilgrim-wise
almost 47 per cent of the respondents from SECTION-II
categories T2 and T4 have complained
‐ 154 ‐


PROBLEMS FACED BY PILGRIMS Shrine has wide arrangement for shelter,
EN-ROUTE drinking water, toilets and cleanliness of
path. Multiple shops having eatables are
From Katra pilgrims move to Vaishno run by local people. To know the problems
Devi Shrine (12 Kms.) on foot. The terrain of pilgrims en-route (between Banganga
is hilly and pilgrims can move ahead via and Vaishno Devi Shrine), they were
road (used for mule) or by stairs which asked few questions. Their responses have
starts from Banganga (a sacred place been given in Table 1.3 and paragraphs to
where people generally take dip). The follow.
journey is tiring however Vaishno Devi
TABLE 1.3
PROBLEMS FACED BY THE RESPONDENTS EN-ROUTE
E1 E2 E3 E4 E5 T1 T2 T3 T4
Food
High rate 11 18 21 14 23 14 38 15 20 87
(84.61) (100) (100) (87.5) (88.46) (93.33) (97.43) (83.33) (90.90) (92.55)
Oily and spicy 8 6 8 10 15 9 17 10 11 47

(61.53) (33.33) (38.09) (62.5) (57.69) (60) (43.58) (55.55) (50) (50)
(30.76) (38.88) (28.57) (43.75) (69.23) (53.33) (43.58) (44.44) (40.90) (44.68)
Lack of sitting 6 9 6 9 8 8 14 7 9 38
facilities
(46.15) (50) (28.57) (56.25) (30.76) (53.33) (35.89) (38.88) (40.90) (40.42)
N 13 18 21 16 26 15 39 18 22 94
Sanitation
Less number of 8 8 9 9 23 9 20 13 15 57
toilets
(57.14) (42.10) (39.13) (56.25) (82.14) (56.25) (48.78) (65) (65.21) (57)
Lack of 11 17 18 14 15 14 32 12 17 75
cleanliness
(78.57) (89.47) (78.26) (87.5) (53.57) (87.5) (78.04) (60) (73.91) (75)
Lack of water 6 9 7 7 6 9 11 6 9 35
(42.85) (47.36) (30.43) (43.75) (21.42) (56.25) (26.82) (30) (39.13) (35)
‐ 155 ‐


Overcrowding 8 11 15 6 9 6 25 6 12 49
(57.14) (57.89) (65.21) (37.5) (32.14) (37.5) (60.97) (30) (52.17) (49)
Overcharged by 4 7 6 4 5 6 10 3 7 26
sweeper
(28.57) (36.84) (26.08) (25) (17.85) (37.5) (24.39) (15) (30.43) (26)
Congested 9 10 11 7 13 10 19 8 13 50
bathrooms
(64.28) (52.63) (47.82) (43.75) (46.42) (62.5) (46.34) (40) (56.52) (50)
Less ladies 5 7 8 3 8 6 11 5 9 31
bathrooms
(35.71) (36.84) (34.78) (18.75) (28.57) (37.5) (26.82) (25) (39.13) (31)
(35.71) (21.05) (34.78) (25) (35.71) (25) (26.82) (30) (43.47) (31)
N 14 19 23 16 28 16 41 20 23 100
Drinking Water
Less number of 11 19 21 16 24 16 35 19 21 91
taps (85.36)
(78.57) (100) (91.30) (100) (85.71) (100) (95) (91.30) (91)
Lack of 11 12 16 12 17 11 29 12 16 68
cleanliness
(78.57) (63.15) (69.56) (75) (60.71) (68.75) (70.73) (60) (69.56) (68)
Non availability 5 7 9 8 12 10 14 5 12 41
of fresh water
(35.71) (36.84) (39.13) (50) (42.85) (62.5) (34.14) (25) (52.17) (41)
Non working taps 4 10 9 9 10 9 15 5 13 42

(28.57) (52.63) (39.13) (56.25) (35.71) (56.25) (36.58) (25) (56.52) (42)
N 14 19 23 16 28 16 41 20 23 100
Medical Facility
Information not 9 4 3 4 12 5 13 5 9 32
available
(64.28) (21.05) (13.04) (25) (42.85) (31.25) (31.701) (25) (39.13) (32)
Less number of 4 2 1 1 2 - 7 - 3 10
doctor
(28.57) (10.52) (4.34) (6.25) (7.14) (17.07) (13.04) (10)
Less number of 8 7 11 9 10 2 21 7 15 45
medical shop
‐ 156 ‐


(57.14) (36.84)(47.82)(56.25)(35.71)(12.5) (51.21) (35) (65.21)(45)
Less qualified 1 2 - 3 1 - 5 - 2 7
doctors
(7.14) (10.52) (18.75) (3.57) (12.19) (8.69) (7)
Indifferent attitude1 2 1 3 2 - 6 - 3 9
by medical staff
(7.14) (10.52) (4.34) (18.75) (7.14) (14.63) (13.04) (9)
Scarcity of 1 1 1 3 1 - 6 - 1 7
medicines
(7.14) (5.26) (4.34) (18.75) (3.57) (14.63) (4.34) (7)
N 14 19 23 16 28 16 41 20 23 100
Shelter
Less number of 11 12 17 16 21 13 27 18 19 77
shelters
(78.57) (63.15) (73.91) (100) (75) (81.25) (65.85) (90) (82.60) (77)
Lack of 14 17 22 13 17 13 35 16 19 83
cleanliness
(100) (89.47) (95.65) (81.25) (60.71) (81.25) (85.36) (80) (82.60) (83)
(64.28) (52.63) (52.17) (62.5) (64.28) (50) (60.97) (65) (56.52) (59)
N 14 19 23 16 28 16 41 20 23 100
cent of the respondents (except category

E2 and E3) have faced the problems of oily
FOOD & spicy nature of food. However, 69.23
In response to a query, 94
E5 have reported the problem of lack of
respondents who have taken food en-route
freshness in food. Similarly, 40-60 per
have highlighted some food related
cent of the respondents from categories E1,
problems. Table 1.3 indicates that a large
E2 and E4 have reported lack of sitting
number of the respondents (92.55%) have
facilities. Pilgrim-wise the table reveals
complained regarding high price of food
that a vast majority of the respondents
followed by oily and spicy nature of food
irrespective of their categories have
(50%) and around 44 per cent of the
highlighted the problems of high rate and
respondents have highlighted the problems
oily and spicy nature of food (except
of lack of freshness and lack of sitting
category T2). Further, 35-55 per cent of the
respondents have faced the problem of
lack of freshness in food and lack of sitting
facility. Education-wise, a vast majority of facilities.
the respondents irrespective of their
educational categories have complained SANITATION
regarding high rate. Further, 55-65 per
‐ 157 ‐


Regarding sanitation, Table 1.3 problems regarding drinking water en-
depicts that 75 per cent of the respondents route as shown in Table 1.3. The table
have complained regarding lack of depicts that majority of the respondents
cleanliness in toilets followed by less have complained regarding less number of
number of toilets (57%), congested taps (91%) and lack of cleanliness near
bathrooms (50%). Further, 49 per cent of taps (68%). Around 40 per cent of the
the respondents have highlighted the respondents have complained regarding
problem of overcrowding followed by non-availability of fresh water (41%) and
scarcity of medicines (35%), less number non working taps (42%). Education-wise
of ladies bathrooms & improper lighting most of the respondents irrespective of
(31% each) and overcharging by sweepers their educational categories have faced the
(26%). Education-wise, a large number of problems regarding less number of taps
the respondents irrespective of their and lack of cleanliness near taps. Further,
educational categories have reported 30-60 per cent of the respondents have
regarding lack of cleanliness, complained regarding problem of non
overcrowding (except categories E4 & E5), working taps and non-availability of fresh
less number of toilets (except category E2 water. Pilgrim-wise the table reveals that a
& E3) and congested bathrooms (except vast majority of the respondents have
category E3, E4 & E5). Further, 40-50 per complained regarding less number of taps,
cent of the respondents (except category lack of cleanliness near taps, non-
E3 and E5) have complained regarding lack availability of fresh water and non
of water in toilets whereas 36.84 per cent working taps (except categories T2 & T3).
of the respondents from category E2 and
around 25 per cent of the respondents MEDICAL FACILITY
from categories E1, E3 and E4 have
All the respondents who have visited
reported the problem of overcharging by
Mata Vaishno Devi have highlighted some
sweeper. However, 30-40 per cent of the
problems regarding medical facilities en-
respondents have highlighted the problem
route as shown in Table 1.3. The table
of less number of ladies bathrooms (except
reveals that the respondents have
categories E4 & E5) and improper lighting
highlighted the problems of non
(except category E2 and E4). Pilgrim-wise,
availability of information (32%) and less
the table reveals that a majority of the
number of medical shops (45%). Further,
respondents irrespective of their category
around 10 per cent of the respondents have
have highlighted the problem of lack of
pointed out the problems of less number of
cleanliness in toilets, less number of toilets
doctors, less qualified doctors, indifferent
(except category T2), overcrowding
attitude of medical staff and scarcity of
(except categories T1 and T3), congested
medicines. Education-wise, 35-65 per cent
bathrooms (except category T2 & T3) and
of the respondents have reported the
scarcity of water (except categories T2, T3
problems of non availability of
and T4). Further, 25-45 per cent of the
information and less number of medical
respondents have faced the problem of less
shops. Further almost 19 per cent of the
number of ladies bathrooms, improper
respondents from category E4 have faced
lighting and overcharging by sweepers
the problems of less qualified doctors,
(except categories T2 & T3),
indifferent attitude of medical staff and
DRINKING WATER PROBLEM scarcity of medicines whereas 28.57 per
cent of the respondents have highlighted
All the respondents who have visited the problem of less number of doctors.
Mata Vaishno Devi have highlighted some Pilgrim-wise, the table reveals that 65.21
‐ 158 ‐


per cent of the respondents from categories educational categories have reported the
T4 followed by category T2 (51.21%) have problem of lack of cleanliness, less
complained regarding less number of number of shelters and improper lighting.
medical shops. Further, 30-40 per cent of Pilgrim-wise the table shows that a vast
the respondents (except categories T3) majority of the respondents irrespective of
have reported the problems of non their categories have faced the problem of
availability of information. However, 10- lack of cleanliness, less number of shelters
20 per cent of the respondents have and improper lighting.
highlighted the problems of less number of
doctors, indifferent attitude of medical SECTION-III
staff, scarcity of medicines and less
After having bath in ice-cold water at
qualified doctors (except categories T4).
Vaishno Devi people queue for the
SHELTERS darshan at the cave site. Arrangements
have been made here for stay of around
Respondents visiting Mata Vaishno 10000 pilgrims by the Shrine Board. Many
Devi have highlighted some problems people like to stay at night at these
regarding shelter en-route as shown in accommodations. They can have blankets
Table 1.3. The table reveals that majority (free of cost) from places meant for the
of the respondents have pointed out the purpose against some refundable
problems of lack of cleanliness (83%), less securities. Food shops are around 1 Km.
number of shelters (77%) and improper away from the shrine to keep the place
lighting (59%). Education-wise the table clean. Due to high altitude some pilgrims
indicates that a vast majority of the face breathing problems here.
respondents irrespective of their
TABLE 1.4
PROBLEMS FACED BY THE RESPONDENTS IN BHAWAN

Accommodation E1 E2 E3 E4 E5 T1 T2 T3 T4
Non availability 6 9 6 6 11 510 13 10 38

(100)
(100) (100) (100) (100) (100) (100) (100) (100) (100)
(100) (44.44) (83.33) (66.67) (63.63) (70) (100) (61.54) (60) (68.42)
Problem in room 3 3 3 6 11 5 4 8 9 26
reservation
(50) (33.33) (50) (100) (100) (50) (80) (61.54) (90) (68.42)
N 6 9 6 6 11 10 5 13 10 38
‐ 159 ‐


Food
High rate 13 15 22 15 19 13 37 13 21 84
(100) (100) (100) (100) (67.85) (92.85) (100) (65) (95.45) (90.32)
Oily and spicy 5 3 4 5 9 4 12 7 3 26

(38.46) (20) (18.18) (33.33) (32.14) (28.57) (32.43) (35) (13.63) (27.95)
(23.07) (40) (13.63) (26.66) (14.28) (14.28) (21.62) (30) (18.18) (21.50)
Lack of sitting 9 13 17 14 10 11 31 5 16 63
facilities
(69.23) (86.66) (77.27) (93.33) (35.71) (78.57) (83.78) (25) (72.72) (67.74)
N 13 15 22 15 28 14 37 20 22 93
Sanitation
Less number of 8 10 10 9 20 11 17 16 13 57
toilets
(57.14) (52.63) (43.47) (56.25) (71.42) (68.75) (41.46) (80) (56.52) (57)
(57.14) (63.15) (86.95) (62.5) (67.85) (81.25) (75.60) (35) (78.26) (69)
Overcharged by 1 3 4 4 8 1 9 1 9 20
sweeper
(7.14) (15.78) (17.39) (25) (28.57) (6.25) (21.95) (5) (39.13) (20)
Congested 8 13 18 9 10 13 24 8 13 58
bathrooms
(57.14) (68.42) (78.26) (56.25) (35.71) (81.25) (58.53) (40) (56.52) (58)
Less ladies 2 10 6 6 9 5 14 4 10 33
bathrooms
(14.28) (52.63) (26.08) (37.5) (32.14) (31.25) (34.14) (20) (43.47) (33)
(21.42) (36.84) (34.78) (37.5) (25) (31.25) (36.58) (10) (39.13) (31)
N 14 19 23 16 28 16 41 20 23 100
Drinking Water
Less number of 13 15 19 15 24 13 34 17 22 86
taps
(92.85) (78.94) (82.60) (93.75) (85.71) (81.25) (82.92) (85) (95.65) (86)
‐ 160 ‐


(35.71) (57.89) (43.47) (68.75) (39.28) (62.5) (41.46) (30) (65.21) (48)
Non-availability of 2 2 1 5 3 - 7 3 3 13
fresh water
(14.28) (10.52) (4.34) (31.25) (10.71) (17.07) (15) (13.04) (13)
Non working taps 2 1 1 6 5 2 6 2 5 15

(14.28) (5.26) (4.34) (37.5) (17.85) (12.5) (14.63) (10) (21.73) (15)
N 14 19 23 16 28 16 41 20 23 100
Shopping
High rate 14 17 21 14 24 12 40 16 22 90
(100) (89.47) (91.30) (87.5) (85.71) (75) (97.56) (80) (95.65) (90)
Lack of quality 8 7 8 7 19 8 9 15 17 49
products
(57.14) (36.84) (34.78) (43.75) (67.85) (50) (21.95) (75) (73.91) (49)
Misbehaviour by 6 7 9 8 10 8 14 10 8 40
shopkeepers
(42.85) (36.84) (39.13) (50) (35.71) (50) (34.14) (50) (34.78) (40)
Lack of variety 7 6 6 12 9 10 12 8 10 40
(50) (31.57) (26.08) (75) (32.14) (62.5) (29.26) (40) (43.47) (40)
N 14 19 23 16 28 16 41 20 23 100
Medical Facility
Information not 6 6 9 10 11 7 18 3 14 42
available
(42.85) (31.57) (39.13) (62.5) (39.28) (43.75) (43.90) (15) (60.86) (42)
Less number of 1 1 1 2 2 - 5 - 2 7
doctors
(7.14) (5.26) (4.34) (12.5) (7.14) (12.19) (8.69) (7)
Less number of 2 3 5 6 3 1 9 - 9 19
medical shops
(14.28) (15.78) (21.73) (37.5) (10.71) (6.25) (21.95) (39.13) (19)
Less qualified 1 1 - 4 3 - 5 1 3 9
doctors
(7.14) (5.26) (25) (10.71) (12.19) (5) (13.04) (9)
Indifferent attitude 1 1 1 3 2 - 6 - 2 8
of medical staff
‐ 161 ‐


(7.14) (5.26) (4.34) (18.75)(7.14) (14.63) (8.69) (8)
Scarcity of 1 1 1 3 1 - 6 - 1 7
medicines
(7.14) (5.26) (4.34) (18.75) (3.57) (14.63) (4.34) (7)
N 14 19 23 16 28 16 41 20 23 100
food followed by lack of sitting facility

(67.74%), oily and spicy nature of food
ACCOMMODATION (27.95%) and lack of freshness (21.50%).
Education-wise, a vast majority of the
After a tiring journey many pilgrims
respondents irrespective of their categories
like to rest at places of Shrine Board at
have highlighted the problems of high rate
Mata Vaishno Devi. Though there is
and lack of sitting facilities (except
arrangement of stay for around 10000
category E5). Further, 20-40 per cent of the
pilgrims here but sometimes people are
seeing lying on roadside due to
oily & spicy nature of food (except
overcrowding. 38 respondents who have
category E3) and lack of freshness in
stayed at Bhawan have mentioned some
food(except categories E3 and E5).
problems regarding accommodation as
Similarly, the table reveals that a vast
shown in Table 1.4. The table reveals that
majority of the respondents irrespective of
all the respondents have faced the
their categories have quoted the problems
problems of non availability. Further an
of high rate and lack of sitting facilities
equal number of the respondents (68.42%)
(except category T3). Further, 25-35 per
have highlighted the problems of lack of
cent of the respondents have complained
cleanliness and problem in reservation.
regarding the problems of oily and spicy
Education-wise a vast majority of the
nature of food (except category T4) and
lack of freshness in food (except
educational categories have faced the
categories T1, T2 and T4).
problems of non availability, lack of
cleanliness (except category E2) and SANITATION
problems in room reservation (except
category E2). Pilgrim-wise the table All the respondents who have visited
indicates that a vast majority of the Katra have highlighted some problems
respondents irrespective of their pilgrim regarding sanitation as shown in Table 1.4.
categories have faced the problems of non The table depicts that majority of the
availability, lack of cleanliness and respondents have pointed out the problem
problem in room reservation. of overcrowding (73%), lack of cleanliness
(69%), congested bathrooms (58%) and
FOOD less number of toilets (57%). Further, 35
per cent of the respondents have
In response to a query, 93
complained regarding less number of
respondents who have taken food at
ladies bathrooms (33%), improper lighting
Bhawan have highlighted some food
(31%) and overcharging by sweepers
(20%). Education-wise, majority of the
related problems. Table 1.4 indicates that a educational categories have highlighted
large number of the respondents (90.32%) the problem of lack of cleanliness,
have faced the problem of high rate of congested bathrooms (except category E5)
‐ 162 ‐


and less number of toilets (except category MEDICAL FACILITY
E3). Further, 25-55 per cent of the
respondents have complained regarding The table shows that the respondents
less number of ladies bathrooms, improper have complained regarding the problems
lighting, (except category E1) and of non availability of Information (42%),
overcharging by sweeper (except less number of medical shops (19%), less
categories E1, E2 and E3). Pilgrim-wise, the qualified doctors (9%), indifferent attitude
table reveals that majority of the of medical staff (8%), less number of
respondents irrespective of their category doctors (7%), and scarcity of medicines
have complained regarding less number of (7%). Education-wise, the table shows that
toilets (except category T2), lack of 62.5 per cent of the respondents from
cleanliness in toilets (except category T3), category E4 and 35-45 per cent of the
and congested bathrooms (except category respondents from categories E1, E3 and E5
T3). 25-45 per cent of the respondents have reported the problem of non
highlighted the problem of less number of availability of information. Further, 20-40
ladies bathrooms (except category T3), per cent of the respondents from categories
improper lighting (except category T3) and E3 and E4 have highlighted the problems of
overcharging by sweepers (except less number of medical shops and less
categories T1, T2 and T3). qualified doctors. Further an equal number
of the respondents from category E4 have
DRINKING WATER PROBLEM pointed out the problems of indifferent
attitude of medical staff and scarcity of
Regarding drinking water, the table medicines. The percentage share of the
shows that 86 per cent of the respondents respondents irrespective of their
have pointed out the problems of less educational categories have complained
number of taps followed by lack of regarding less number of doctors is
cleanliness near taps (48%), non working negligible. Pilgrim-wise, the table
taps (15%) and lack of fresh water (13%). highlights that 60.86 per cent of the
Education-wise 75-95 per cent of the respondents from category T4 and almost
respondents irrespective of their 44 per cent of the respondents from
educational categories have faced the categories T1 and T2 have complained
problem of less number of taps. Further, regarding problem of non availability of
68.75 per cent of the respondents from information. Further, 39.13 per cent of the
category E4 followed by category E2 respondents from categories T4 have
(57.89%) have highlighted the problem of reported the problem regarding less
lack of cleanliness near taps. However, 30- number of medical shops. Similarly, 10-15
40 per cent of the respondents from per cent of the respondents from categories
category E4 have reported the problem of T2 have highlighted the problems of less
lack of fresh water and non working taps. number of doctors, less qualified doctors,
Pilgrim-wise the table depicts that a vast indifferent attitude of medical staff and
majority of the respondents have scarcity of medicines.
complained regarding less number of taps
and lack of cleanliness near taps (except SUGGESTIONS
categories T2 and T3). Further, 21.73 per
cent of the respondents from category T4 In the light of above discussions the
and 17.07 per cent of the respondents from following is recommended:-
category T2 have complained regarding
• More accommodation must be
non working taps and lack of fresh water.
constructed both at Katra and
‐ 163 ‐


Bhawan and facilities must be • More parking facilities with proper
provided to the tourists for on-line security arrangements must be
reservation. Further, there is need provided at Katra.
for a well managed system for the
cleanliness of such places at On the basis of some
Bhawan. At Katra also discussions with respondents it is
administration should issue felt that arrangements of hot water
guidelines on accommodation tariff for bath at Bhawan and a trolley
and cleanliness of accommodation. path for Bhawan to Bhaironath will
be a big relief to the pilgrims
• Prices for food (at Katra, en-route visiting the shrine.
and Bhawan), transportation (at
Katra) and goods (at Katra and REFERENCES
Bhawan) must be fixed. Further,
some low price shops with good • Ministry of Tourism, Govt. of
quality of food and goods must be Jammu and Kashmir.
opened by the tourism department
or Vaishno Devi Shrine Board at • www.jammukashmir.nic.in
Katra, en-Route and Bhawan.
• www.maavaishnodevi.org
Number of shelters must be
increased at Katra and enrute.
Further, proper arrangements must
be made for cleanliness and
lighting in shelters. A separate path
for mules must be constructed from
Katra to Bhawan. Further, more
facilities must be provided to
mules, pitthu and palki owners.
• To avoid overcrowding in buses,

there is need for increasing number
of buses plying between Katra and
Jammu.
• More toilets must be constructed at

Katra, en-route and Bhawan and
proper arrangements must be
ensured at such places by
employing more workers. This will
automatically solve the problem of
overcrowding as well.
• There is need for more taps of

drinking water at Katra, en-Route
and Bhawan. Further, proper
arrangements for cleanliness near
taps must be ensured.
‐ 164 ‐


MARKETING AND
MANAGEMENT RESEARCH
ECONOMICS OF LIVESTOCK
MARKETING IN ORISSA
ANIRUDHA BISWAL*; SANJAY KUMAR**
*Division of Livestock Economics Statistics and Information Technology

Indian Veterinary Research Institute
Izatnagar UP-243122
**Division of Livestock Economics Statistics and Information Technology
Indian Veterinary Research Institute
Izatnagar UP-243122
ABSTRACT
The marketing of livestock has been studied in Orissa. Data have been collected
from ninety six farmers and thirty six market functionaries, selected randomly
from the randomly selected markets of the six sample districts. Four marketing
channels have been found in cattle and buffalo marketing. Farmer-Farmer
marketing channel was found to be the most popular marketing channel for both
male and female animal transaction. The major marketing cost components have
been found as labour, market fee, misllaneous, expenditure for feed and fodder
and transportation cost. Labour cost was found to be the major marketing cost
for both cattle and buffalo marketing in all the four channels. The marketing cost
was highest in Farmer-Middleman-Wholesaler-Farmer channel and lowest in
Farmer-Farmer channel for both male and female animals. The market margin
as a percentage in ultimate buyer’s rupee has been found increasing in order
from Farmer-Farmer, Farmer-Middleman-Farmer, Farmer-Wholesaler-Farmer
channel to Farmer-Middleman-Wholesaler-Farmer Channel. As a result, the
producer’s share in ultimate buyer’s rupee was decreasing. Therefore Farmer-
Farmer channel was found to be the most efficient marketing channel for both
male and female animals and Farmer-Middleman-Wholesaler-Farmer channel
was the least efficient one.
buffaloes (17th livestock census,

INTRODUCTION department of AHD&F, GOI) and
hundreds of thousands of animals are
In rural economy of Orissa, animal transacted every year through livestock
husbandry is closely associated with markets. However, very little is known
agriculture. Crop and livestock enterprise about economic aspects of animal
form two functional components of mixed marketing. The marketing of large
farming in rural Orissa. Orissa possesses ruminants in Orissa is mainly done
13.9 million cattle and 1.39 million
‐ 165 ‐


through the weekly markets which are not For collection of primary data from
systematic. Therefore, there are various sample respondents, an interview schedule
important issues in the area of livestock was specially structured and pretested and
markets in Orissa that require investigation the data were collected through personal
on marketing channels, marketing margin, survey method during the period from
marketing efficiency, price spread January to April, 2009. The data included
etc.Hence, present study was undertaken about the disposal pattern of cattle and
with the objective to analyze the market buffalo through various marketing
structure, marketing channels, marketing channels, market structure, price received
margin, marketing efficiency, price spread by the farmers, marketing cost incurred by
of large ruminant marketing in Orissa. farmers and market functionaries
etc.Tabular analysis was done for disposal
METHODOLOGY AND DATA pattern, marketing cost, margin and price
COLLECTION spread of cattle and buffalo.
The multistage stratified random sampling RESULT AND DISCUSSION
scheme was followed in the present study.
Orissa was classified into three agro- MARKET STRUCTURE
climatic regions viz. Coastal,
Southern/KBK (Koraput, Balangir and Out of the twelve sample markets in the
Kalahandi) and Northern regions. study area, eight (66.66 per cent) are
Considering each agro-climatic region as a regulated and operated by different market
stratum, two districts from each stratum committees. Twenty five per cent of the
were selected randomly. So Dhenkanal markets are operated by gram panchayats
and Ganjam districts from coastal region, and rest by urban local bodies. It was
Koraput and Kalahandi district from found that there was wide difference in
Southern/KBK region and Keonjhar and market fees across different markets which
Mayurbhanj from Northern region were ranges from 1per cent to 3 pre cent of sell
selected randomly. From each selected price. In the respect of product
district two livestock markets were differentiation, majority of cattle and
selected randomly.The last stages of buffalo transacted were local non-
sampling involved selection of the descriptive breeds. There was free entry
respondents from the selected markets. and exit in all the markets without any
Present study constituted two types of restriction which satisfies the condition of
respondents viz. farmer/ livestock perfect competition market.
producer and market functionaries. Eight
II) DISPOSAL PATTERN
livestock producer who had come to the
market for selling of cattle and buffalo Four main marketing channels were
along with three market functionaries identified for disposal of large ruminants
(middle men, itinerate traders, commission in the study area and those are: Channel-I:
agents etc.) from the selected market were Farmer-Farmer, Channel-II: Farmer-
selected randomly, which constituted Middleman-Farmer, Channel –III: Farmer-
ninety-six sample of livestock producer Middleman-Wholesaler-Farmer, Channel-
and thirty-six market functionaries. IV: Farmer-Wholesaler–Farmer
‐ 166 ‐


TABLE 1 DISPOSAL PATTERN OF ANIMALS IN DIFFERENT CHANNELS
Sl.No. Marketing channels Female cattle & Male cattle & Total no. of
buffalo buffalo animals
1 Farmer-Farmer 17(30.35) 33(40.74) 50(36.49)*
2 Farmer-Middleman- 22(39.29) 26(32.09) 48(35.04)*

Farmer
3 Farmer-Middleman- 9(16.07) 12(14.82) 21(15.33)*

Wholesaler -Farmer
4 Farmer- Wholesaler - 8(14.29) 10(12.35) 18(13.13)*

Farmer
Note: Figures in parentheses are percentage to the total male and female animals
transacted.
As a perusal of the above figures in table regarded as most popular channel. Kumar
1, it is revealed that the majority (36.49%) et al. (2004) found in Rohilakhand region
of the animals were transacted through the in Uttar Pradesh that farmer- farmer
channel-I (farmer-farmer). Channel-II channel was most important channel
(farmer-middleman-farmer) was emerged except in Rithura market where farmer-
as the second important channel as 35.04% butcher channel was popular.
of the animals were transacted through it
followed by 15.33% in channel-III MARKETING COST
(farmer-middleman Wholesaler -farmer)
Average marketing cost by farmer and
and 13.13% in channel-IV (farmer-
middleman in Farmer-Farmer channel and
Wholesaler -farmer). Again 39.29% of the
Farmer-Middleman-Farmer channel was
female animals were transacted through
worked out separately for both the male
channel-II and emerged as most important
and female cattle and buffalo and
channel where as, 40.74% of male animals
presented in Table 2 and Table 3
were transected through channel-I and
TABLE 2 AVERAGE COST INCURRED BY FARMER AND MIDDLEMAN IN
MARKETING FOR MALE CATTLE AND BUFFALO IN DIFFERENT CHANNELS
Sl Items CHANNEL-I CHANNEL -II
Farmer Farmer Middleman
1 Labour 100.32(58.86) 92.6(55.71) 189.0(35.18)
2 Marketing fee 18.86(11.07) 23.83(14.34) 33.94(6.32)
3 Transportation 0 0 100.0(18.61)
4 Others/miscellaneous 51.25(30.07) 49.78(29.95) 70.45(13.12)
5 Feed and fodder 0 0 143.8(26.77)
Total 170.43(100) 166.21(100) 537.19(100)
‐ 167 ‐


Figures in parentheses are percentage of total marketing cost
TABLE 3 AVERAGE COST INCURRED BY FARMER AND MIDDLEMAN IN
MARKETING FEMALE CATTLE AND BUFFALO IN DIFFERENT CHANNELS
Sl.No. Items CHANNEL-I CHANNEL-II
Farmer Farmer Middleman
1 Labour 100.9(64.63) 91.53(57.33) 228.0(42.71)
2 Marketing fee 16.12(10.32) 26.6(16.66) 78.75(14.75)
3 Transportation 0 0 0
4 Others/miscellaneous 39.09(25.05) 41.53(26.01) 90.0(16.87)
5 Feed and fodder 0 0 137.0(25.67)
Total 156.10(100) 159.66(100) 533.75(100)

It was observed from the table 2 and table It was found that the farmer had to incur
3 that the farmer had to incur Rs.170.43 Rs. 166.21 for selling one male cattle or
for selling one male cattle or buffalo and buffalo and Rs.159.66 for one female
Rs.156.10 for selling one female cattle and cattle or buffalo. Middle man had to incur
buffalo. The cost on labour in the total cost Rs.537.18 and Rs.533.75 for selling male
was 58.86 percent for male and 64.63 cattle or buffalo and female cattle or
percent for female animals. Other major buffalo respectively. Like channel-I,
items of expenditure were miscellaneous labour cost was found to be the major
cost (30.07% for male and 25.05% for component (55.71% for male and 57.33%
female) which included expenditure for for female animal) in case of farmer.
self, preparation of animals, feeding straw Similarly labour cost was 35.18% for male
at market etc. and market fee (about 11% cattle and buffalo and 42.71% for female
for both male and female animals). A wide cattle and buffalo in case of middleman.
difference in market fee structure was Miscellaneous cost was found to be the 2nd
observed across different markets. At the major cost for farmer where as cost
time of negotiation between the buyer and incurred for feed and fodder was second
seller, it was decided who had to pay the most important expenditure for
market fee. Some times it was shared by middleman.
both.
‐ 168 ‐


TABLE 4 AVERAGE COST INCURRED BY FARMER, MIDDLEMAN AND
WHOLESALER IN MARKETING MALE CATTLE AND BUFFALO IN
DIFFERENT CHANNELS
Sl. Items CHANNEL-III CHANNEL-IV
Farmer(Rs) Middleman Wholesaler Farmer(Rs) Wholesaler

(Rs) (Rs)
(Rs)
1 Labour 146.66 245.0 198.33 70.0 60.0

(73.82) (64.47) (52.21) (41.17) (26.08)
2 Marketing fee 1.0 15.0 29.17 50.0 30.0

(.50) (3.95) (7.68) (29.41) (13.04)
3 Others/ 51.0 50.0 48.33 50.0 40.0

miscellaneous (25.68) (13.16) (12.72) (29.41) (17.39)
4 Feed and 0 70.0 104 0 100.0

fodder
(18.42) (27.38) (43.47)
Total 198.66 380.0 379.83 170.0 230.0

(100) (100) (100) (100) (100)

In Farmer-Middleman-Wholesaler-Farmer and by Wholesaler (27.38% for cattle and
channel, on an average the cost incurred buffalo and 16.34% for female cattle and
by farmer, middleman and whole saler was buffalo) was the major cost next to labour.
Rs.198.66, Rs.380.0 and Rs.379.83 for In Farmer-Wholesaler channel farmer and
male and Rs.116.46, Rs.337.5 and wholesaler had to spend Rs.170.0 and Rs
Rs.379.5 for female cattle and buffalo 230.00 respectively to sell one male cattle
respectively. From the Table 4 and Table or buffalo and Rs.126.25 and Rs.215.0 to
5, it is observed that labour cost was the sell one female cattle or buffalo. The cost
major cost for farmer (73.83% for male on labour was major for farmer (41.17%
and 61.53% for female animals), for for male cattle and buffalo and 55.44% for
middleman (64.47% for male cattle and female cattle and buffalo) where as cost on
buffalo and 44.45% for female cattle and feed and fodder was major for wholesaler
buffalo) and for wholesaler (52.21% for (43.47% for male cattle and buffalo and
male and 46.51% for female animals). The 23.26% for female cattle and buffalo) as
cost incurred for feed and fodder by Wholesaler had to keep the animals at
middleman (18.42% for cattle and buffalo home for longer period before selling.
and 17.78% for female cattle and buffalo)
‐ 169 ‐


TABLE 5 AVERAGE COST INCURRED BY FARMER, MIDDLEMAN AND
WHOLESALER IN MARKETING FEMALE CATTLE AND BUFFALO IN
DIFFERENT CHANNELS
Sl,No Items CHANNEL -III CHANNEL-IV

.
Farmer(Rs Middleman(Rs Wholesale Farmer(Rs Wholesale
) ) r (Rs) ) r (Rs)
1 Labour 71.66 150.0 260.0 70.00 100.0

(61.53) (44.45) (68.51) (55.44) (46.51)
2 Marketing 1.8 77.5 22.5 12.5 30.0

fee
(1.54) (22.96) (5.92) (9.90) (13.95)
3 Others/ 43.0 50.0 35.0 43.75 35.0

miscellaneou (36.92) (14.8) (9.22) (34.65) (16.28)
s
4 Feed and 0 60.0 62.0 0 50.0

fodder
(17.78) (16.34) (23.26)
Total 116.46 337.5 379.5 126.25 215.0

(100) (100) (100) (100) (100)

Similar study conducted by Khan labor cost is the major cost in the present
and Gopalrao (1997) in Karnataka and study as animals were taken by the
revealed that overall average marketing laborers for grazing
cost of the seller was Rs. 297.38 and
Rs.334.69 for marketing local and up MARKETING MARGIN AND
graded buffaloes. Of the five items of the EFFICIENCY
cost, the cost of preparation was found to
Marketing margin and efficiency analysis
be the highest i.e. 59.40% and 58.42% for
was carried out for each channel separately
local and upgraded respectively followed
for both the male and female animals and
by brokerage 20.97% and 22.16% for local
presented in Table 6 and Table 7
and upgraded buffaloes, respectively but
‐ 170 ‐


TABLE 6 MARKETING MARGINS AND EFFICIENCY OF MALE CATTLE AND
BUFFALO IN DIFFERENT CHANNELS
Channels Marketing cost Marketing Price Price paid Marketing

(Rs) margin(Rs) received by by ultimate efficiency
the buyer (Rs)
producer(Rs)
Channel-I 170.43(2.90) 0 5865.63 5865.63 34.41
Channel-II 703.38(9.98) 644.92(9.15) 5864.58 7046.69 4.34
Channel-III 958.49(11.87) 1333.65(16.52) 5953.53 8069.01 2.59
Channel-IV 400.00(5.56) 812.91(11.30) 6150.42 7193.33 5.07
Note: figures in parentheses indicate share in ultimate buyer rupee in percentage
TABLE 7 MARKETING MARGINS AND EFFICIENCY OF FEMALE CATTLE

AND BUFFALO IN DIFFERENT CHANNELS
Channels Marketing Marketing Price Price paid Marketing

cost (Rs) margin(Rs) received by by ultimate efficiency
the buyer (Rs)
producer(Rs)
Channel-I 156.10 (2.17) 0 7180.0 7180.0 45.99
Channel-II 693.41 (8.87) 732.08 (9.96) 6548.46 7814.29 4.59
Channel-III 833.46 (11.07) 1428.00 (18.96) 5383.33 7528.33 2.38
Channel-IV 341.25 (5.50) 872.5 (14.07) 5112.5 6200.0 4.21
Note: figures in parentheses indicate share in ultimate buyer rupee in percentage

In Farmer-Farmer channel, the share of cost in buyer’s rupee was 9.98 per cent for
marketing cost in buyer’s rupee was 2.90 male and 8.87 per cent for female cattle
per cent for marketing male cattle and and buffalo. The share of marketing
buffalo and 2.17 per cent for female cattle margin in ultimate buyer’s rupee was 9.15
and buffalo. The marketing efficiency was per cent in marketing male cattle and
34.41 for male cattle and buffalo and 45.99 buffalo and that for female cattle and
for female cattle and buffalo and buffalo was 9.96 percent. The marketing
considered as most efficient marketing efficiency was 4.34 and 4.59 in marketing
channel. It was noted that the prices of male cattle and buffalo and female cattle
animal were fixed through negotiation and buffalo respectively.
between seller and buyer.
In Farmer-Middleman-Wholesaler-
Through Farmer-Middleman- Farmer channel, the share of marketing
Farmer channel, the share of marketing cost in buyer’s rupee was highest among
‐ 171 ‐


the four channels found in the study area. The marketing efficiency was 5.03 and
The share of marketing cost in ultimate found to be the second most efficient
buyer’s rupee was 11.87 per cent and marketing channel in marketing male
11.07 per cent in marketing male and cattle and buffalo. The marketing
female animals respectively. The share of efficiency for female cattle and buffalo
marketing margin in ultimate buyer’s was 4.21 and ranked third in the term of
rupee was 16.52 per cent in marketing efficiency.
male cattle and buffalo and that for female
cattle and buffalo was 18.96 per cent. Due Similar study conducted by Khan
to the higher marketing margin and cost, and Gopalrao (1997) in Karnataka
the marketing efficiency was as low as revealed that marketing efficiency was
2.59 and 2.38 for male cattle and buffalo 8.44 and 9.04 for local and upgraded
and female cattle and buffalo and found to buffaloes respectively in farmer-farmer
be the least efficient channel among the marketing channel and considered to be
four channels. the most efficient marketing channel
which agrees with the findings of the
The share of marketing cost in present study.
ultimate buyer’s rupee in Farmer-
Wholesaler-Farmer channel was 5.56 per III) PRICE SPREAD ANALYSIS
cent and 5.5 per cent for male and female
Price spread analysis was carried out for
cattle and buffalo, respectively. The
each channel separately for both the male
marketing margin was observed to be
and female animals and presented in Table
11.30 and 14.07 per cent for male cattle
9 and Table 10
and buffalo and female cattle and buffalo.
TABLE 8 PRICE SPREAD IN DIFFERENT CHANNELS FOR MALE CATTLE AND
BUFFALO IN DIFFERENT CHANNELS
Particulars Marketing channels
Channel-I Channel-II Channel-III Channel- IV
Net price received 5695.20(97.09) 5698.37 (80.86) 5776.87 5980.42

by producers (71.59) (83.14)
Marketing cost 170.43(2.90) 703.38(9.98) 958.49(11.88) 400.00(5.56)
Marketing margin 0 644.92(9.15) 1333.65(16.53) 812.91(11.30)
Price paid by 5865.63(100) 7046.69(100) 8069.01(100) 7193.33(100)

ultimate buyer
Price spread 0 1348.32 2292.14 1212.91
Note: Figures in the parentheses share in ultimate buyer’s rupee in percentage
‐ 172 ‐


TABLE 9 PRICE SPREAD IN DIFFERENT CHANNELS FOR FEMALE CATTLE
AND BUFFALO IN DIFFERENT CHANNELS
Particulars Marketing channels
Channel-I Channel-II Channel-III Channel- IV
Net price received 7023.89 6388.8 (81.75) 5266.87 (69.96) 4986.25(80.42)

by producers (97.82)
Marketing cost 156.10 (2.17) 693.41(8.87) 833.46 (11.07) 341.25 (5.50)
Marketing margin 0 732.08(9.96) 1428.00 (18.96) 872.5 (14.07)
Price paid by 7180.0 7814.29 7528.33 6200.0

ultimate buyer
Price spread 0 1425.49 2261.46 1213.75
Note: Figures in the parentheses share in ultimate buyer’s rupee in percentage

Through Farmer-Farmer channel, the price spread for both male and female
producer got a higher share of about 97 per cattle and buffalo was about Rs.1200.00.
cent in the ultimate buyer’s rupee for both
male and female cattle and buffalo. In Patil et al. (1979) revealed that the
Farmer-Middleman-Farmer channel, about owner of cow received a share of 67.52
81 per cent of buyer’s rupee was shared by percent in the consumer’s rupee which is
producer for both male and female cattle less than the present finding. The lower
and buffalo. The price spread was share in consumer rupee may be due to the
Rs.1348.32 and Rs.1425.32 for male and higher marketing cost and margin by the
female cattle and buffalo respectively intermediaries.
which is higher than that of Farmer-
CONCLUSIONS
Farmer channel as middleman was
involved in channel-II. Through channel- Farmer-Farmer marketing channel was
III (Farmer-middleman-Wholesaler- emerged as the most popular marketing
Farmer), the least efficient channel in channel as maximum numbers of animals
marketing both male and female cattle and were transacted through this channel.
buffalo. On a whole, the producer farmer Marketing cost in Farmer-Farmer channel
received a lower share of 71.59 per cent was very less compared to other channels
and 69.96 per cent in ultimate buyer’s followed in the study area as no
rupee for male cattle and buffalo and intermediary was involved in this channel.
female cattle and buffalo, respectively. The labour cost, market fee, expenditure
Price spread was as high as Rs. 2292.14 on feed and fodder and miscellaneous
and Rs.2261.46 for male and female cattle expenditure were observed to be the major
and buffalo respectively. It was observed items of marketing costs. The marketing
from channel-IV(Farmer-Wholesaler- cost was highest in Farmer-Middleman-
Farmer) that farmer producer received Wholesaler-Farmer Channel and lowest in
83.14 per cent and 80.42 per cent for male Farmer-Farmer Channel for both male and
cattle and buffalo and female cattle and female cattle and buffalo marketing. The
buffalo from ultimate buyer’s rupee and market margin as a percentage in ultimate
‐ 173 ‐


buyer’s rupee has been found increasing in Buffaloes in Karnataka. Bihar Journal of
order from Farmer-Farmer channel, Agril. Marketing, 4(465-473)
Farmer-Middleman-Farmer channel,
Farmer -Wholesaler-Farmer Channel to Kumar, D., Singha, M., Suman, C.L.and
Farmer-Middleman-Wholesaler-Farmer Singh, R.2004. Economic investigation of
channel. As a result, the producer’s share marketing aspects of livestock enterprises
in ultimate buyer’s rupee was decreasing. in Rohilakhand regions of Uttar Pradesh.
Hence, it could be concluded that the IVRI Annual Report, (2004-2005)
Farmer-Farmer channel was the most
Kumar, S. and Singh, S., 1999. Marketing
efficient marketing channel for both male
of goat and goat meat in tribal areas of
and female cattle and buffalo marketing
Chotanagpur plateu, India. The Bihar
and Farmer-Middleman-Wholesaler-
journal of Agricultural marketing, 9(4:434-
Farmer channel was the least efficient one.
439)
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‐ 175 ‐


MARKETING AND
MANAGEMENT RESEARCH
IN-STORES DISPLAY: ONE OF THE

EFFECTIVE ELEMENTS TO INCREASE SALES IN RETAIL
DR. GEETA NEMA*; MS. DHANASHREE NAGAR**
*International Institute of Professional Studies
DAVV Indore-452001 (MP) India
**Shri Vaishnav Institute of Management
Sch. No. 71 Gumasta Nagar Indore - 452009 (M.P.)
ABSTRACT
Indian retail industry is passing through drastic changes. To compete with the
local retailers, a number of players like Reliance, Future Group with Big Bazaar,
Pantaloons and Central, Tatas and Bharti are in the game with few more
competitors to enter in. An attractive product arrangement displayed for
customers and passers bye is an effective tool to entice the customers to retail
outlet. Various studies carried out to measure the effectiveness of retail sales,
have proved that maximum shopping decisions are taken at a point of purchase.
Window display, one of the attributes of in-stores displays, play an important role
with this respect. In-stores arrangements and display of products can also be one
of the reasons to select a retail outlet for shopping along with advertising and
promotion. Whether a store is in a shopping mall or on the street, the customer
has only few seconds to view the merchandize and be attracted by stores displays.
Thus, it is very essential for a retailer to display his products in a convenient way
for his customers. The present study has been carried out to measure the role of
the in-stores arrangements and display to increase footfalls and retail sales. The
data has been measured with Factor Analysis and the findings suggest that the
factors like overall product display and arrangements, window display, shelf
space etc. contribute significantly to increase footfalls resulting into increased
sales of a retail outlet.
KEYWORDS: Retailing, In-stores display, Footfalls, Retail Sales.
final consumer for personal or non-

INTRODUCTION business use. Indian retail industry is the
fastest growing industry of the economy.
Retailing involves sale of goods and The retailers have tapped the opportunity
services to the end user for personal use. in growing Indian market. The results can
According to Philip Kotler, (2010) be seen with the emergence of huge super
retailing includes all the activities involved markets and shopping malls like Big
in selling goods or services directly to the Bazaar, Central, Pantaloons, Shopper’s
‐ 175 ‐


Stop, Nilgiris, Pyramid, Reliance, More feet of space a year. From 2001 onwards,
and many more. With the changing the pace quickened dramatically and 2003
lifestyle of Indian customers and their alone saw an addition of 10 million square
favour for one stop shopping and feet retail space. As per the Business
entertainment, many more super and hyper World, The Marketing White book 2010-
markets are soon planning to expand 2011, Indian retail market is estimated at
themselves in India. Changing purchasing US$ 280 billion but organized retail is
power of the consumers, increased double estimated at only US$ 14 billion. The
income families and changing economic sector accounts for over 10% of the
policies of Government of India are few country's GDP and 8% of total
more reasons for growth of retail industry employment of the nation's workforce.
in India. Retailers in the present era have Growth in the retail sector had fuelled a
glamorized the entire activities undertaken rapid mall building scenario across the
by them. From use of modern technology country, with the total number of malls
for improving the customer service to expected to increase to 600 by 2010 from
providing baby care and entertainment for an estimated 300 by end of 2007. Several
making shopping a memorable experience retailers, including Indian corporate
to the customers, retailing has been houses, are foraying into the retail sector
revolutionized. through different formats, unlike foreign
retailers who usually maintain three to four
INDIAN RETAIL INDUSTRY formats.
The Indian retail sector is categorized Success of retail outlet lies not only in
into various types of retail outlets like good promotions and services but also
kirana stores, super markets, hyper organizing special events and displays for
markets, departmental stores and shopping customers, proper co-ordination of
malls. The unorganized retail sector, also activities as well as good merchandizing.
known as ‘Kirana Stores’ still comprises A retail display is a merchandising display
large share in total retail pie. These are the that attractively showcase shop inventory
typical nearby grocery stores generally or featured products. An immense number
owned by a family, catering to the needs of of products in the retail market are
consumers. According to CII- AT Kearney competing for attention. And the offer of
Report 2006, Most of the organized new brands seems to increase day by day.
retailing in India has been started recently According to statistics provided by POPAI
and have concentrated mainly in (Point of Purchase Association
metropolitan cities. Within a short span of International), at least 60% of purchases
five years retail sector in India has are decided right in the store. The way
witnessed great changes on account of a products are displayed in show windows
gradual increase in the disposable incomes also has a lot to do with enticing the guests
of the middle and upper-middle class into the store. Whether a store is in the
consumers. Indian retail industry stands mall or on the street, the customer has only
second in terms of employment generation a few seconds to view and be attracted to
after agriculture and is characterized by displays. Getting customers inside your
the widely dispersed retail outlets situated store is only part way to making a sale.
at each corner whether its urban India or Thus, in-store displays promote individual
rural. Organized retail in India constitutes products and lines which results into
a very little share of around 7.8% of the increase footfalls, as well as sales.
total retail market. Through the 1990s
organized retail added just 1million square
‐ 176 ‐


IN-STORES DISPLAY AND RETAIL Retailers are facing a keen competitive
SALES market place and as a consequence of that
they find many difficulties to differentiate
Stores display or presentation is also their stores on the basis of product, place,
known as Visual Merchandizing or people, price and promotion. Retail store
Product Merchandizing. It is an art, elements such as colour, lighting and
science and business of presenting visual merchandising have always been
merchandise in a retail outlet. It is a considered as having immediate effects on
powerful tool that can be effectively used the buying decision making process. The
to programme, channel, and lure customer emphasis has moved away from in-store
into impulse buying in the world of cut- product displays, towards elements that
throat competition. Visual merchandising - excite the senses of shoppers such as flat
also known as window dressing - has been screen videos or graphics, music, smells,
a familiar feature on the high street for lighting and flooring that tend to capture
over 100 years and is an influential factor the brand image or personality and help to
that not only allows potential customers to create an unique environment and
view the retail stock but can also be used shopping experience (McGoldrick, 1990).
to encourage them to make all important
purchase. Merchandising varies from According to Wanninayake and
sector to sector so it's important to apply Randiwela (2007) most of supermarkets
techniques dependent on the kind of item use visual merchandising as point of sales
you are selling. In other words, stores promotions within their supermarket
display acts as a silent salesman of the premises. And also the major supermarket
retail store. A retails format presentation chains are highly concerned about
can also be one of the reasons to increase background music and in store fragrance.
footfalls and sales in Retail. A good According to their research, all major
window display will motivate the customer supermarket chains spend more than 40%
to enter into stores and visual merchandize of their promotional budget on in store
or in-stores merchandize display will bring promotions. The major reason behind this
a customer into a shopping mood. is that many of the marketers today
reasonably assume that a considerable
An important element in any store influence can be made on buying decisions
design is the look of the storefront, product of consumers through visual
and space arrangement, cleanliness and merchandising.
hygiene and proper lighting system. The
way merchandise is displayed in show According to Rawal (2009) product
windows and racks also has a lot to do merchandizing or in-stores displays have
with attracting the guests into the store. been found to have a significant influence
Whether you have a store in the mall or on on consumer shopping behavior. Due to
the street, the customer has only a few the availability of range of merchandise
seconds to view and be attracted by your being offered across different formats, the
displays. (Sinha et al. 2000), and thus, competition has become intense and
effective display is the need of retail outlet unpredictable. It has been established in
to increase footfalls and sales. the research that there is a direct
correlation between product purchase and
product visibility. In reality most of the
consumers do not research before making
REVIEW OF LITERATURE
a final choice of a product purchase. Most
of them hardly take five to ten seconds in
‐ 177 ‐


taking a decision. Therefore, product to differentiate from other stores and
display on the shelves of the retail store persuade shoppers to come in, stay longer
needs to be highly eye catching. While and come back. (Rawal 2009)
many shoppers have brand preference for
numerous products, they are not brand According to Tendai and Crispen
insistent or even brand loyal for a large (2009) each retailer’s ability to sustainably
majority of products that they purchase. sell its merchandise, largely depends on
For example, individuals who have a brand the strategic strength of its marketing mix
preference may decide to try a new brand activities. In-store marketing activities
if there are sufficient in-stores such as point-of-purchase displays and
advertisements inducing them to switch. promotions, through background music
Stores displays that help to reinforce and supportive store personnel are all
consumers' decisions in a positive instrumental in both winning consumers
direction are extremely valuable to the and encouraging them to spend more. In-
retailer. In fact, as much as 75 percent of store promotions are usually aimed at
buying decisions are made in-store. (Sinha digging deeper into the consumers’ purses
et al. 2000) at the point of purchase through
encouraging impulsive (unplanned)
Similarly, merchandising and purchases. Given the power of impulsive
promotion around the point of purchase buying in pushing revenue and profits up,
area is particularly important because it most marketers have since tried to
represents the final opportunity to entice influence the in-store decisions of their
them to buy products and if planned potential consumers through creating
correctly, it can be one of a store's most enjoyable, attractive and modern state-of
profitable areas – however only about five the- art environments ranging from
percent of marketing spend goes on in- background music, favorable ventilation,
store advertising and promotions. freshened scent, attractive store layout.
(Catherine, 2007) Point of purchase is
where the marketers can highlight their OBJECTIVES OF THE STUDY
products, and thereby draw the customer
1. Analyze various elements of stores
attention. Such in-store advertising is
display and presentation used by
strategically designed to draw the attention
super market.
of the consumers and entice them to try
and buy the product. A good merchandize
2. Analyze those elements which lead
of product can boost the sales and enhance
to increase footfalls in
the brand visibility at the most crucial
supermarkets.
point of consumer buying. (Cobb and
Hoyer 1986),
3. Measure the effectiveness of these
As most of buying decisions are made elements to increase retail sales.
at the point of sale/purchase so the most
important factors are location, store and METHODOLOGY
display design which will decide whether
• Desired sample size: 100. Out of
or not your products get noticed. If well
which selected respondents were 77. 23
designed and optimally placed in the retail
questionnaires were rejected due to
space, custom retail displays show
incomplete data.
improved results on your bottom line
profits. Right choice of retail display and • Sampling Method: Random
retail space design will help store owners Sampling
‐ 178 ‐


• Sources of data collection: ranked as 5 and dissatisfaction as 1. On the
basis of rating given by the respondents
i) Primary- Structured questionnaire to average ranking has been calculated.
be filled by customers.
• Data Analysis tool: Factor Analysis
ii) Secondary: Internet, journals, Books
etc.
ANALYSIS AND FINDINGS
For the purpose of measuring their
preference, five parameter Likert Scale has After collecting the data, they are
been used. The highest satisfaction level is analyzed by using factor analysis. The
detailed analysis is as under:
TABLE 1
DESCRIPTIVE FACTOR ANALYSIS
Factor Name of Factor Eigen Value Statements Factor

Loading
Total % of
variance
1. Product information Variety of .771

products
available
1.302 8.138
(Stores
merchandize
)
Signboards .399
and displays
1.107 6.916
about
product
Convenienc .613
.963 6.016 e to locate
the product
Spacious to .619
move
.740 4.622
shopping
cart
Updates and .656

information
.534 3.335
about new
stuff
2. In Stores atmospheres 3.658 22.860 Space .627

between the
‐ 179 ‐


products
displayed on
shelf.
Attractive .608
.909 5.681 window
display
Stores .784
.501 3.131
ambiance
Stores .485
.439 2.742
cleanliness
3. Staff support in shopping Product .621

decision .843 5.272 demonstrati
ons by staff
Staff co- .804

.658 4.114
operation
Food court .536

.220 1.375
facility
4. Lighting and preservation Lighting .780

.324 2.023
arrangement
Preservation .745
system for
.314 1.965
food and
perishables
5. Product arrangement and Logical .714

food court 3.658 22.860 arrangement
of products
Ambiance .786
1.790 11.187 of food
court
For the purpose of measuring effectiveness displayed on shelf, Attractive window

of stores display and presentation, sixteen display, Stores ambiance, Stores
variables have been formulated. They are, cleanliness, Product demonstrations by
Variety of products available (Stores staff, Staff co-operation, Food court
merchandize), Signboards and displays facility available, Ambiance of food court,
about product, Convenience to locate the Lighting arrangement, Preservation system
product, Space to move shopping cart, for food and perishable products and
Updates and information about new stuffs Logical arrangement of products.
and arrivals, Space between the products
‐ 180 ‐


To measure the parameters, factor can be concluded that out of the total 16
analysis has been used. From the available variables taken in the study, it is the
data total five factor groups have been product information and the store
extracted named as Product information, atmosphere that helps a customer to visit a
In-Store Ambiance, Staff support in particular retail outlet. This can be done by
shopping decision, Lighting and the marketer by using proper signboards
Preservation and Product Arrangement and and displays about the products so that the
Food Court. customer can have the proper information
and ease to locate the product which will
The study shows that when a customer ultimately help in making the decision
selects a retail outlet for shopping, he not faster from the customers point of view.
only considers the availability of
information about what and where of the A retailer can effectively inform the
products, but also the stores ambiance and customers about changes and availability
staff co-operation in buying as the in promotional schemes and availability of
important factors for buying decision. The various brands through attractive and eye
various elements of stores presentations catching in-stores displays. Effective use
were analyzed. The factor group Product of in-stores and window displays will help
Information has highest number of the customers to pick up right product that
variables. So the present study shows that satisfies their need and value for money.
customer gives highest weightage to the On the other hand right choice of retail
availability of product related information display and retail space design will help
i.e stores display and presentation. To store owners to differentiate from other
increase sales in a retail stores, this stores and persuade shoppers to come in,
information can be made available to the stay longer and come back.
customers through attractive and colorful
signboards and displays. Even these tools REFERENCES
can be used to communicate the customers
1. Agarwal, Vaishali (2007), “The
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Era of Retail Revolution:
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what makes them locate or buy the product
Management and Technolgy,
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the retail outlets should make use of
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‐ 181 ‐


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‐ 182 ‐


MARKETING AND
MANAGEMENT RESEARCH

WORK-LIFE BALANCE PRACTICES, OPPORTUNITIES &
CHALLENGES - ITS IMPACT ON ORGANISATIONAL PERFORMANCE
IN INDIAN CONTEXT
DR. KIRTI AGARWAL*; YOGESH BHARDWAJ**
*GNIT Greater Noida

**JJT University Rajasthan
ABSTRACT
This paper examines the key issues associated with Work-Life Balance (WLB) with a
particular focus on practices within the in Indian organisations. Findings suggest
that Indian organisations have started realizing that WLBPs are crucial for
organisational performance. The paper provides an overview of the general
literature and then the research that relates specifically to WLB in the Indian
organisations. It builds on previous research in this area to present an adapted
framework for addressing the key variables of WLB. The paper recognizes
challenges for success of WLBPs and discusses its prospects. Recommendations are
placed to facilitate employers to see employees’ work-life balance as a core strategic
issue in corporate arena and obtain productive steps to have a robust framework of
WLB.
have impacted on perceptions of leisure time,

INTRODUCTION travel, study and careers. For many Indian
organisation employees, working in frontline
Work-Life Balance (WLB) is an important positions of 24/7 operations, it is difficult to
area of Human Resource Management that is maintain a healthy lifestyle, travel or study.
receiving increasing attention from Contemporary demographic changes such as
Government, Researchers, Management & increasing number of women in the
Employee Representatives and the popular workforce, dual career and nuclear families
media (Pocock, Van Wanrooy, Stazzari & have generated an urgent need of employees
Bridge, 2001; Russell & Bowman, 2000). to balance work and non-work life. Changes
Changes in the way we work, driven by the in the markets, ways of working, and labour
globalisation of commodities and services, market conditions have put tremendous
pressure on all organisations to stay
‐ 183 ‐


competitive and consequently, organisations benefits and discretionary policies are flexi-
have put increasing pressure on their time, telecommuting and job sharing.
employees to deliver the best. Well motivated Employee assistance programmes like
people are more productive and the same has counseling and stress management also fall
also been acknowledged. A healthy balance under WLBPs (Perry-Smith and Blum, 2000).
between professional and personal life keeps All these can be classified under policies,
an individual motivated, committed and benefits and services. Policies cover the
engaged. Hence, maintaining a balance formal and informal ways that employees’
between professional and personal life is work and leave schedules are handled,
crucial and matter of strategic concern to the including part-time work, job-sharing, flexi-
corporate stakeholders. time, and parental/family leave. Benefits cover
forms of compensation that protect against
WORK-LIFE BALANCE PRACTICES loss of earnings, payment of medical expenses
and vacation or all of these. Services include
The world of work has changed. There is new on-site or near-site childcare centers,
technology, new opportunities, skills counseling and eldercare programs. Today,
shortages and an aging population. Many WLBPs have become an integral part of high
companies are also facing new demands commitment work systems (Osterman, 1995)
presented by the increasingly global 24/7 and not merely a response to address
economy with customers expecting service at increasing problems including stress,
times that suit them. To be competitive, absenteeism and turnover which have emerged
organisations must meet these challenges to due to increased percentage of women in the
achieve the best results from their most workforce (Lambert, 2000). The trend shows
valuable asset - their workforce. Work-life growing recognition for the need to support
balance is about good management practice not only those with visible family needs and
and sound business sense. Organisations who responsibilities (working mothers) but all
adopt initiatives that help their employees employees at different stages of life, who
achieve a better balance between work and the experience work-life stress regardless of their
rest of their lives focus on achievement. They family status.
build more resilient organisations - better able
to adapt and be successful. They attract better ADVANTAGE OF WORK-LIFE
talent as a best practice employer, a benefit BALANCE PRACTICES
that impacts directly on their business's
bottom line, with improved recruitment and Finding a ‘perfect’ balance between work and
retention of a more diverse workforce. Work- life is rare. The nature of that balance is
life balance initiatives can result in benefits to different for every person, and changes over
business as well as to the employees - the time for each person. So we shouldn’t strive
classic 'win-win'. for perfection, but to constantly be aware of
making choices that will benefit all aspects of
WLBPs are those institutionalised, structural our lives. Achieving work/life balance is an
and procedural arrangements as well as formal investment – it does take time and effort to
and informal practices that enable individuals implement the changes necessary. But it’s
to easily manage the conflicting worlds of worth the effort! Work/life balance offers
work and family lives (Osterman, 1995). some major rewards. Here are some of the
Some common statutory policies are maternity potential benefits:
‐ 184 ‐


and Information Systems on the Activities of
AT WORK Good Leadership and Strategic Human
Resource Management” (An Empirical
Feeling more rested and energized Study), Dr. Kirti Agarwal & Yogesh
Bhardwaj conducted a qualitative study to
Working more productively and examine the scope and coverage of work-life
getting more accomplished, leading to balance practices in some of the leading
greater career success organisations in India.
More fulfillment from work Based on review of literature, empirical study

and analyses of reports of news paper articles,
IN LIFE as compared to present scenario, it was
observed that organisations in India have lot
Improving relationships with family of range to cover in future to treat WLBPs as
and friends strategic aspect of organisational performance.
Organisations do present many benefits and
Better physical and mental health policies from flexible work arrangements to
stress management programs in the name of
Making choices about your priorities, work-life balance activities. However, these
rather than sacrifices among them policies and practices many a times are not
integral parts of their policy handbooks and
More leisure time to spend with loved vary extensively in terms of their scope. At
ones, or time for yourself. IBM, the focus is on- Values, Equal
Opportunity, Mobile Working, Healthcare,
Availability of WLBPs reduces employee
Rewards, Diversity, Flexibility, Culture,
absenteeism and enhances organisation’s
Compensation & Benefits. In knowledge
productivity. These practices are increasingly
centric organisations like IT and ITES sectors,
being considered as strategic, innovative,
where women workforce participation is
crucial and progressive (Perry-Smith and
relatively higher, statutory policies such as
Blum, 2000) worldwide. However, there is
maternity leave and benefits are common,
lesser evidence of the status and impact of
while practices such as flexi-time, work from
these practices in Indian organisations (Poster,
home and part-time work are still sporadic,
2005; Wang, Lawler, Shi, Walumbwa & Piao,
since these practices are discretionary in
2008). Research findings show that WLBPs
nature. Commonly offered statutory benefits
help employees manage their work and family
across most organisations are leave plans such
better (Thomas and Ganster, 1995) and
as maternity and paternity leaves with/without
enhance their attitudes and behaviors such as
pay. Flexible work arrangements such as flexi-
organisational attachment, job satisfaction and
time, part-time
intention to stay
work and telecommuting are yet to become
strategic interventions in organisations, though
WORK-LIFE BALANCE PRACTICES IN
these practices are prevalent in IT
INDIAN
organisations to some extent. Health and Life
ORGANISATIONS
Insurance coverage and reimbursement of
As a part of an ongoing project on “Evaluate
medical expenses for employees and their
the impact of Human Resource Development
families although are included as a part of
‐ 185 ‐


compensation package, their scope and extent ¾ Miss less time at work
vary significantly from organisation to
organisation. Stress management workshops ¾ Are less likely to be thinking of leaving
and training programs on work-life balance the company
are being conducted by organisations as a part
of welfare provisions but are not regular These things will all impact a company’s
practices in most of the organisations. recruitment costs, absenteeism, presenteeism,
Comparative analysis of the responses of top benefits cost, productivity, and ultimately the
officials and employees of each organisation bottom line.
on the availability of WLBPs showed notable
disparity in their responses. In spite of having WLB has emerged as a strategic issue for
an existence of WLBPs in organisations the HRM and a key element of an organization’s
employees does not perceive them. It may be employee retention strategies (Cappelli, 2000;
due to lack of proper communication and Lewis & Cooper, 1995). It has been argued
implementation. It was found that WLBPs that organizations need to be aware of the
have not been implemented in the changing needs of employees and provide
organisations appropriately and much needs to flexible WLB strategies1 in order to retain
be done by Managers to create a visibility of their employees. Organizations that seek to
the same. increase employee morale, commitment and
satisfaction, and reduce sources of stress and
A STRATEGIC CONCERN problems at work, will improve their ability to
recruit and retain talented and valued
WLB is an issue increasingly recognized as of employees (Cappelli, 2000). Whether the
strategic importance to organisations and of introduction of WLB strategies is effective in
significance to employees. An organisation reducing work/family conflict is uncertain; it
need to attract and retain valued employees in may simply improve employee attitudes
a highly competitive labour market is a strong towards the organization (Lambert 2000). In
motivating factor for increased organisational the context of a ‘war’ for skilled talent (Way,
awareness and action with regards to 2000), such outcomes may be significant.
implementation and management of WLB In response to the market changes, talent
strategies. Many researches on work-life attrition and changing needs and demands of
balance family conflict shows that this is an employees, organisations are applying
issue that employers must pay attention to as a employee-friendly strategies for attaining
significant strategic business issue. Employees superior performance. Today, organisations
who perceive that their employer is supportive are forced to look beyond routine human
of their personal work-life balance: resources (HR) interventions and execute
initiatives such as flexible working hours,
¾ Are more committed to the company alternative work arrangements, leave policies
in lieu of family care responsibilities and
¾ Have higher job satisfaction employee assistance programs. These
initiatives are referred to as ‘family-friendly
¾ Have better physical and mental health policies’ or ‘work-life balance practices’
(WLBPs) in literature (Grover and Crooker,
¾ Experience less job stress 1995; Kopelman, Prottas, Thompson and
Jahn, 2006).
‐ 186 ‐


Comparing with the past, today, one can see a
OPPORTUNITIES FOR INDIAN noticeable difference in Indian organisation’s
ORGANISATIONS vision, philosophy, leadership styles and
people oriented HR interventions.
It is time to acknowledge and realise that Consequently, Indian Organisation’s have
WLBPs are of value to all, which attract started getting respect globally. HR
prospective employees and are tools for practitioners are striving to experiment the
employee retention and motivation (Galinsky, existing policies and exploring other
Friedman and Hernandez, 1991). One should innovative policies, schemes and interventions
also keep in mind that new generation to motivate and involve large number of
employees evaluate their career progress not employees.
only in terms of lucrative job assignments but
also in terms of their ability to maintain However, managing employee work-life
healthy balance between their work and non- balance has still not become a core strategic
work life. In a research study (Baral, 2009) on facet of people management practices in
730 managerial employees from various Indian organisations, which have the
organisations in India; it is clearly found that competitive advantage in terms of young
family significantly contributes to work in talents in comparison to the West. This
terms of enhancing performance and positive demands attention of policy makers to tap
emotions at the workplace. available talent for superior performance.
The findings indicate that one of the important Contemporary challenges emerging from
determinants of work-life balance is services organisations. It has also put
availability of WLBPs. When an organisation tremendous pressure on HR professionals to
offers its employees policies, practices, rethink their approach for utilising the talent
benefits and services to help them integrate of such people without compromising on their
their work and family responsibilities, they non-work related commitments. Increasing
feel committed to the organisation and indulge number of women in the workforce and
themselves in organisational citizenship increase in dual career couples have put
behaviors. A careful scrutiny of the literature immense pressure on working couples to
on compensation and reward management juggle between work and family
clearly shows that our salary structure and responsibilities while being productive at
reward system are at par with other high work. Such trends have made work-life
performing organisations across the globe. balance a pertinent strategic issue to be
But, most of the incentives, schemes, rewards, seriously and urgently considered by
and facilities are crafted around jobs and employers in India to attract and retain talent.
organisations. This is because of the Considering organisation as an open system,
assumption that people can and will be one has to consider external influences on the
motivated if their performance is recognised system’s functioning and therefore,
and they looked after by organisations. There assumption of employers that work and family
is evidence that work and family are no longer are two separate spheres needs correction.
two separate role domains rather are
interdependent and have positive influence on CHALLENGES TO SUCCESS OF
each other (Greenhaus and Powell, 2006). WLBPS
‐ 187 ‐


The world of work has changed. There is new compelling benefits, most organizations
technology, new opportunities, skills struggle to successfully design and deliver a
shortages and an aging population. Many valuable one. The three most common root
companies are also facing new demands causes of why organizations fail are:
presented by the increasingly global 24/7
economy with customers expecting service at 1. Few employees are aware of the work-
times that suit them. To be competitive, life practices offered by their
organisations must meet these challenges to employer.
achieve the best results from their most
valuable asset - their workforce. 2. Most work-life practices are not
Work-life balance is about good management targeted at the most important drivers
practice and sound business sense. of work-life balance.
Organisations who adopt initiatives that help
their employees achieve a better balance 3. Even fewer employees actually
between work and the rest of their lives focus participate in the work-life practices
on achievement. They build more resilient offered by their employer.
organisations - better able to adapt and be
successful. They attract better talent as a best
practice employer, a benefit that impacts While these challenges seem difficult to
directly on their business's bottom line, with overcome, there is a series of cost-effective
improved recruitment and retention of a more strategies that the most innovative
diverse workforce. organizations are using to effectively improve
the work-life balance of their employees.
Work-life balance initiatives can result in
benefits to business as well as to the Organisations and policy makers need to
employees - the classic 'win-win'. understand the key challenges before
introducing new WLBPs or implementing
While it is clear that improving employee existing ones. (Bhargava & Baral 2009)
work-life balance has real value to
organizations, defining and improving the 9 Interviews with HR executives further
work-life balance of employees can be revealed that the nature of job and
challenging. To better understand how difficulty in cost benefit analysis of such
organizations can most effectively deliver and practices are the major reasons behind
maximize ROI in this area, CEB analyzed the limited implementation of WLBPs such as
most essential elements of employee work-life flexible work arrangements. Preventing
balance and determined the key lies in employees to misuse the provisions such
creating the right work-life proposition as flexi-time is also one of the concerns
(WLP). The WLP is a set of work-life raised by them.
practices that employees perceive as the value
they gain through employment in the 9 Many work-life balance programs
organization. This includes six categories: frequently glitter without substance.
work time, work location, family, Efforts must be taken to understand the
development, services and health. The needs of employees and design the
challenge for employers, however, is that programs accordingly. In India, people
while an effective WLP demonstrates consider work as a source of earning and
‐ 188 ‐


social status and they put considerable The Lack of well intended evaluative studies
hours at work and efforts to succeed in on WLBPs in Indian context and insertion of
their career as well as to prove themselves only few organisations in our research
at the workplace. Simultaneously, they unquestionably limit us to present a concrete
consider family as the social institution state of WLBPs in India.
that provides not only emotional support
but stands with them in crisis. Most CONCLUSIONS AND SUGGESTIONS
Indians value family ties and work hard to
provide better living to their family Work/life programs have the potential to
members. The meaning of family is not significantly improve employee morale,
confined to spouse, parents and children. reduce absenteeism, and retain organizational
People still feel that they are part of knowledge, particularly during difficult
extended families. Hence, ignorance to economic times. In today’s global
employee specific needs may hinder the marketplace, as companies aim to reduce
effectiveness of WLBPs. costs, it falls to the human resource
professional to understand the critical issues
9 Unsupportive organisational culture is the of work/life balance and champion
major impediment for the effectiveness of work/life programs. Be it employees whose
WLBPs (Thompson, Beauvais and Lyness, family members and/or friends are called to
199). Managerial or supervisory support is serve their country, single mothers who are
one of the major components of trying to raise their children and make a
organisational culture that facilitates living, Generation X and Y employees who
integration of employee work-life balance. value their personal time, couples struggling
Employees will avail WLBPs when they to manage dual-career marriages, or
perceive their supervisor as supportive of companies losing critical knowledge when
their work-family integration efforts. employees leave for other opportunities,
Employers, co-workers or colleagues may work/life programs offer a win-win situation
perceive that those who avail WLBPs such for employers and employees.
as flexi-time or leave for family reasons
are not committed to their work and this Organisations have to broaden their policies
perception may significantly influence and practices to support employees’
their career progression. Implicit or participation in many life roles and even
explicit time demands at the work place or personal developments to make work-life
norms concerning the number of hours, balance a reality in Indian corporate
which employees are supposed to devote landscape. Recent developments in the
to work or work-related activities, are also strategic HR practices across organisations in
impediments to utilisation of WLBPs. India suggest some developments towards
Hence, offering of WLBPs should be work-life integration. Balancing work and
supported by supportive organisational non-work life is going to remain as one of the
culture that values integration of work and employee needs in the foreseeable future.
family. (Bhargava & Baral 2009) Hence, organisations should continue to look
for innovative ways to cater to this need in
LIMITATION OF STUDY order to retain the key employees. Work-
family integration should not be seen as a
parenting or dependent care issue only. To
‐ 189 ‐


make WLBPs successful, utmost care should effectively apply WLBPs. Work-life balance
be taken from their introduction to must be supported by top management and
implementation. Effort to understand the encouraged at all levels of the organisation.
status and scope of WLBPs in India is in a Organisational culture must be developed in
position to provide some directions to HR such a way that employees making efforts to
professionals in India to review their present have healthy work-life balance will not be
policies and practices towards work-life looked down upon. Only then in true sense
balance and redesign them accordingly. It can will work-life balance gain strategic
be concluded that techno-economic and socio- recognition in India. The growth of WLBPs in
demographic changes have made it crucial to India has not been commendable, Top HR
consider work-life balance as a strategic fraternity in our study were found to be
concern for HR managers to recruit, engage extremely positive about its future. They avow
and retain talented employees. that WLBPs are gaining value day by day and
will be a vital part of organisation’s HR policy
Organisations should note that they will and corporate strategy which will enable a
benefit only when they will advocate positive enrichment on business performance.
employees’ needs for work-life balance and
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Harrison, R. (1982). The mechanisms of job
Galinsky, E., Friedman, D.E and Hernandez, stress and strain. New York: Wiley.
C. 1991. The Corporate Reference Guide to
Work-Family Programmes. Families and Wang, P. Lawler, J.J, Shi. K., Walumbwa.F.
Work Institute: New York. & Piao, M. 2008. Family-friendly
employment practices: Importance and
Greenhaus, J.H. and Powell, G.N. 2006. effects in India, Kenya, and China Advances
When work and family are allies: A theory in International Management, 21, 235-265.
of work-family enrichment, Academy of
Management Review, 31(1), 72-92. Kopelman, R.E.; Prottas, D.J.; Thompson,
C.A. and Jahn, E.W. 2006. A multilevel
Grover, S.L. and Crooker, K.J. 1995. Who examination of work-life practices, Is more
appreciates family-responsive human always better? Journal of Managerial Issues,
resource policies, The impact of family– 18, 232-253.
friendly policies on the organisational
attachment of parents and non-parents, Baral, R. 2009. Examining Antecedents of
Personnel Psychology, 48, 271-288. Work-Family Enrichment and its Effect on
Individual, Family and Organisational
Fineman, M. (1999). Why diversity Outcomes. Unpublished Doctoral
professionals should care about work/life Dissertation, IIT Bombay.
balance. Mosaics, 5, 6, 6-7.
Bhargava, S. and Baral, R. 2009. Work-life
Fingerman, J. (2003). Tip of the Month for Balance Practices in India. IIT Bombay.
February 2003. Work & Family Connection.
Retrieved February 4, 2003,from
tips@golist.net
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Dex, S. and Scheibl, F. 1999. Business
Performance and Family-Friendly Policies, Perry-Smith, J.E. and Blum, T.C. 2000.
Journal of General Management, 24, 22-37. Work-family human resource bundles and
perceived organisational performance,
Kossek, E.E. and Ozeki, C. 1998. Work- Academy of Management Journal 43, 1107-
family conflict, policies, and the job-life 1117.
satisfaction relationship, A review and
directions for organisational behavior-
human resources research, Journal of
Applied psychology, 83, 139-149.
Lambert, S.J. 2000. Added Benefits, the

Link between Work-Life Benefits and
Organisational Citizenship Behavior,
Academy of Management Journal, 43, 801-
815.
Poster, W.R. 2005. Three reasons for a

transnational approach to work-life policy.
In E.E. Kossek & S.J. Lambert (Eds.).Work
and Life
Integration: Organisational, Cultural, and

Individual Perspectives: 375-400. London:
Lawrence Erlbaum Associates.
Sands, J. and Harper, T.L. 2007. Family-

Friendly Benefits and Organisational
Performance, Business Renaissance
Quarterly, 2, 107-126.
Thomas, L.T. and Ganster, D.C. 1995.

Impact of family-supportive work variables
on work-family conflict and strain: A
control perspective, Journal of Applied
Psychology, 80, 6-15.
Human resource strategies for transforming

the workplace (pp. 221–243), Blackwell,
Cambridge, MA.
Osterman, P. 1995. Work/family

programmes and the employment
relationship, Administrative Science
Quarterly, 40, 681-700.
‐ 191 ‐


MARKETING AND
MANAGEMENT RESEARCH

CONSUMER PREFERENCES AND COMPARATIVE ANALYSIS OF
SELECT PRIVATE LIFE INSURANCE COMPANIES -
AN EMPIRICAL STUDY
T. SOBHA RANI*
*AITS Rajampet
ABSTRACT
With a huge population base and large untapped market, insurance industry is a big
opportunity area in India for national as well as foreign investors. India is the fifth
largest life insurance market in the emerging insurance economies globally and is
growing at 32-34% annually. This impressive growth in the market has been driven
by liberalization, with new players’ significantly enhancing product awareness and
promoting consumer education and information. The strong growth potential of the
country has also made international players to look at the Indian insurance
market.Since 2000 as Government allowed Private players and FDI (Foreign Direct
Investment) up to 26%, Private players both domestic and international are offering
greater choice in terms of products and services. This paper analyzes and rates
selected private life insurance companies by analyzing certain variables and
measuring the customer perception, purchase behavior and consumer awareness.
From this study, it was found that the purchasing decision of the consumer depends
on quality, accessibility and promptness of services, which may lead a company to
get the maximum share in the insurance market.
KEYWORDS: Consumer awareness, consumer perception, purchase behavior, and

promptness of services.
INTRODUCTION
nationalized and then back to a liberalized
The Indian insurance market in spite of having market again, the insurance sector has
a history covering almost two centuries took a witnessed all aspects of contest. The Indian
turn after the establishment of the Life insurance market conventionally focused
insurance Corporation in India in 1956. From around life insurance until recently, a various
being an open competitive market to being range of other insurance policies covering
‐ 192 ‐


sectors like medical, automobile, health and • Shriram Life Insurance
other classes falling under general insurance
came up, generally provided by the private • Tata AIG Life Insurance
companies. The life insurance of India added
4.1% to the GDP of the economy in 2009, an Aviva Life Insurance Company India
immense growth since 1999, when the gates Ltd ranking dropped to 10th in 2007-08 from
were opened for the private company in the 9th last year. It has presence in more than
market. The Insurance Regulatory 3,000 locations across India via 221 branches
Development Act, 1999 (IRDA Act) allowed and close to 40 bancassurance partnerships.
the entry of private companies in the insurance Aviva Life Insurance plans to increase its
sector, which was so far the sole prerogative capital base by Rs 344 crore. With the fresh
of the public sector insurance companies. The investment, total paid-up capital of the insurer
act was passed to protect the concerns of would go up to Rs 1,348.8 crore.
holders of insurance policy and also to govern
and check the growth of the insurance sector. Bajaj Allianz Life Insurance Co Ltd
has reported a growth of 52% and its market
MAJOR PRIVATE LIFE INSURANCE share went up to 6.98% in 2007-08 form
COMPANIES IN INDIA ARE 5.66% in 2006-07. The company ranked
second (after LIC) in number of policies sold
• Aviva Life Insurance in 2007-08, with total market share of 7.36%.
• Bajaj Allianz Birla Sun Life Insurance Co Ltd

market share of the company increased from
• Bharati AXA Life Insurance 1.22% to 2.11% in 2007-08. The company
moved to the 7th position in 2007-08 from 8th
• Birla Sun Life Insurance a year before, pushing down Max New York
Life insurance company.
• HDFC Standard Life Insurance
HDFC Standard Life Insurance Co Ltd
• ICICI Prudential with an income of Rs 2,680 crore in FY2007-
08, registering a year-on-year growth of 64%.
• ING Vysya Its market share is 2.88% and it ranks 6th
among the insurance companies and 5th
• Kotak Mahindra amongst the private players.
• Max New York Life Insurance ICICI Prudential Life Insurance Co

Ltd is the biggest private life insurance
• MetLife India Insurance company in India. It experienced growth of
58% in new business premium, accounting for
• Reliance Life Insurance increase in market share to 8.93% in 2007-08
from 6.97% in 2006-07.
• SBI Life Insurance
Kotak Mahindra Old Mutual Life
Insurance Ltd the fiscal 2007-08, the company
reported growth of 80%, moving from the
‐ 193 ‐


11th position to 9th. It captured a market share respondents (32%) are professionals, and 56%
of 1.19% in 2007-08. Last year the company of the respondents are married. It was also
doubled its branch network to 150 from 74. found that most of the respondents (52%) had
taken a policy to cover the risk, 44% to avoid
Max New York Life Insurance Co Ltd tax, and the remaining to invest the surplus
has reported growth of 73% in 2007-08. Total amount. The study suggests that
new business generated was Rs 641.83 crore understanding the customer better will enable
as against Rs 387.51 crore. The company was insurance companies to design appropriate
pushed down to the 8th position from 7th in products, determine price correctly and to
2007-08. increase profitability. Jagendra Kumar (2005),
in his study, revealed that the life insurance
Reliance Life Insurance Co Ltd Total penetration in India is just about 2% of the
collected was Rs 2,792.76 crore and its market GDP, while the life insurance premium per
share went up to 2.96% from 1.23% a year capita is just Rs. 550. LIC is the largest player
back. It now ranks 5th in new business with over 2,000 officers. After liberalization,
premium and 4th in number of new policies it has improved efficiency and customer
sold in 2007-08. services among the private life insurance
companies. ICICI prudential life Insurance
SBI Life Insurance Co Ltd in terms of and Birla Sun Life are the first and second
new number of policies sold, the company largest players. Other prominent companies in
ranked 6th in 2007-08. New premium competition are Bajaj Allianz, HDFC
collection for the company was Rs 4,792.66 Standard Life, Kotak Mahindra, ING Vysya
crore in 2007-08, an increase of 87% over last Aviva Life, MetLife, etc. Namasivayam et al.
year. (2006) analyzed the socioeconomic factors
that are responsible for taking life insurance
REVIEW OF LITERATURE policies and examined the preferences of the
policyholders towards various types of
A study conducted by Patil Kallinath S policies of LIC. From the analysis, it was
(2003) aimed at critically evaluating the found that factors such as age, educational
performance of existing insurance products. It level and sex of the policyholders are
revealed that the insurance coverage of insignificant. However, income level,
agricultural groups and agricultural labor is occupation and family size are significant
very low. The performance of children-related while deciding on an insurance policy. From
policies like Jeevan Kishore, Jeevan Balya, the analysis, it is inferred that respondents
etc., is very poor, except the children money belonging to the age group of 31 to 40 years
back policy, which also has not been are much interested in taking a life insurance
contributing significantly. The demonstration policy.
of product features, by the agents, is
unsatisfactory. Raman and Gayatri (2004) OBJECTIVES OF THE STUDY
observed customers’ awareness towards new
insurance companies. It was found that 53% The main objective of the study is to
of the respondents belong to the age group up measure the customer perception, purchase
to 30, 24% between 31 to 40, 20% between 41 behavior, and consumer awareness regarding
to 50, and the remaining above 50. They also the life insurance industry and rate the
observed that a large percentage of the insured selected private life insurance companies by
‐ 194 ‐


analyzing certain variables. PRODUCT PORTFOLIO
METHODOLOGY Based on the objective, plans offered by insurers
can be classified under three categories
RESEARCH DESIGN: Explorative Research
(1) Insurance products (term plans);
SAMPLING TECHNIQUE: Stratified
Random sampling (2) Pure investment products (pension plans)
and
SAMPLE SIZE: 500
(3) Investment cum Insurance products
SOURCE OF DATA: Primary as well as (endowment, money back, whole life and unit-
Secondary data, Chennai. linked insurance plans).
STATISTICAL TOOLS: Mean Correlation
and Rank Correlation.
ANALYSIS
TABLE 1: PURPOSE OF PURCHASING A POLICY
Purpose of Purchase Percentage
(i) Tax saving 5.6
(ii) Investment to get return 1.2
(iii) As a risk cover of death 5.6
Both (i) and (ii) 23.0
Both (ii) and (iii) 19.6
Both (i) and (iii) 10.6
(i), (ii) and (iii) 34.4
Total 100.0
Out of the 500 respondents, the plans, as it now works as a good saving
purpose to purchase of insurance products, instrument and also it shows source of tax
1.2% purchase policy as an investment to get concessions. Hence, companies should plan and
return, 5.6% as a risk cover of death—as a tax offer products which can assist their customers
saving scheme (Table1).From this, we can in building complete financial plan. Hence
clearly know that consumers expect more insurance companies must move from selling
benefits than the single benefit offering because insurance to marketing as essential financial
customers are now beginning to incorporate products.
insurance plan while drawing up their financial
‐ 195 ‐


TABLE 2: COMPANY AWARENESS OF CUSTOMERS
Company Percentage
ICICI Prudential 71.2
HDFC Standard 62.4
Allianz Bajaj 61.6
Birla Sun Life 57.4
Max New York Life 56.2
Om Kotak Mahindra 54.8
AMP Sanmar 53.2
Tata AIG 51.8
SBI Life 50.8
ING Vysya 47.8
Aviva Life 46.8
MetLife 45.6
Table2 clearly explains about Bajaj, Birla Sun Life, etc. is immense because
insurance companies' awareness among across the globe Information Technology has
Chennai city respondents and we observed that become increasingly popular with consumer
out of 500 respondents private insurance policy these days .The private players feel that
holders, 71.20% of the respondents are aware of convenience, time savings and money saving
ICICI Prudential. This shows that awareness and schemes is the key factor to the success of
growth prospects good for the private players; business and now they clearly tapped consumers
competition among ICICI, HDFC, Allianz expectation.
TABLE 3: CONSUMER PREFERENCE RATE OF PRIVATE COMPANIES FOR NEW
POLICY PURCHASE

Company Percentage
ICICI Prudential 32.20
HDFC Standard 22.50
Allianz Bajaj 10.90
Birla Sun Life 06.90
Max New York Life 02.40
Om Kotak Mahindra 02.10
AMP Sanmar 01.30
Tata AIG 7.20
SBI Life 02.50
ING Vysya 2.30
Aviva Life 01.50
‐ 196 ‐


MetLife 01.30
Total 100.00
Specifically, we analyzed consumers for policy preference because our study is limited
policy preferability among Chennai based 500 to Chennai city and it may vary in
respondents (Table 3). 32.2% prefer ICICI another place, depending on the
Prudential, 22.5% preferred HDFC, 10.9% awareness, promotional activities and
preferred Allinaz Bajaj and rest, i.e., Tata AIG, channels of distribution of private players.
Om Kotak, AMP Sanmar, SBI Life were Here, we orally analyzed about the
preferred by few consumers ranging preference to the distribution of new policy.
between7.2% to 1.3%. From this table, we They clearly reflected that degree of
observed that Aviva Life and MetLife new preference given to the agent channels than
policy are not preferred by respondents but it the Internet and other channels of
cannot be said that there is no chance of a new distribution.
TABLE 4: REASON BEHIND THE PREFERABILITY OF A PARTICULAR

COMPANY
Variables 1st 2nd 3th 4th 5th 6th 7th Mean Value Rank
More Awareness 35 101 195 74 57 38 0 4.73 3
Less Premium 213 136 95 31 25 0 0 5.06 2
Variety of Policy 20 69 83 189 91 35 13 4.16 4
More Benefits 0 7 32 109 204 84 64 2.96 5
Coverage Network 0 0 0 40 44 105 311 1.63 7
More Returns 236 182 82 0 0 0 0 6.31 1

Advertisement 0 3 11 57 79 238 112 2.25 6
Table 4 presents the most preferable

factors behind the consumer preferring a
particular company. Here, consumer
response goes to more returns from policy,
less premium, more awareness created by
companies, variety of policy and
advertisement and these are ranked as 1st,
2nd, 3rd, 4th, 5th and 6th, respectively, by using
mean value calculation.
‐ 197 ‐


TABLE 5: RATING OF THE LIFE INSURANCE COMPANIES BASED ON THE
PURCHASE OF 500 POLICY HOLDERS.
Company Percentage Ranking
ICICI Prudential 3.6 1
HDFC Standard 2.8 2
Allianz Bajaj 2.4 3
Birla Sun Life 2.2 4
Tata AIG 2.2 4
Max New York Life 1.8 5
Om Kotak Mahindra 1.4 6
AMP Sanmar 1.4 7
SBI Life 1.2 8
Aviva Life 1.2 8
ING Vysya 1.0 9
MetLife 0.8 10
Total 100.0
Table 5 presents that the well and ICICI Prudential, HDFC Standard and
established LIC is dominating with78.2%, Allianz Bajaj hold the 2nd, 3rd, 4th ranks,
ICICI Prudential with 3.6%, HDFC Standard respectively, and Birla Sun Life, Tata AIG
with 2.8%, Allinaz Bajaj with 2.4% of policy ranked 5th Max New York Life as 6th, Om Kotak
holders. And out of the 500 respondents, only Mahindra and AMP Sanmar as 7th, and SBI Life
0.8% respondents with MetLife. There are too and Aviva Life insurance companies as 8th
many factors contributing to the successful among other private players.
purchase of a policy, and in that, the important
factor is brand awareness and time of Correlation has been calculated between
establishment of business. We can judge that the ranks of primary and secondary data by
LIC has maximum policy holders and considering the variables of consumed
ranked as 1st among other insurance companies, policies and consumer preferences (Table 6).
TABLE 6: CORRELATION ANALYSIS

Company X Y
ICICI Prudential 2 1
HDFC Standard 5 2
Allainz Bajaj 4 3
TataAIG 3 4
AMP Sanmar 12 4
‐ 198 ‐


Max New York Life 6 5
Birla Sun Life 7 6
Om Kotak Mahindra 11 7
Aviva Life 8 8
SBI Life 10 8
ING Vysya 9 9
MetLife 13 10
Correlation ( R ) 0.75
Note: X: the ranks based on the market share on consumed policies (secondary variable);
Y: the ranks based on consumer ratings and mean values (primary variable).
Correlation has been calculated between ", The Icfai University Press, Vol. II,
the ranks of primary and secondary data by No. 4, pp.07-18.
considering the variables of consumed 2. Jagendra Kumar (2005), “Innovative
policies and consumer preferences and found Environment in Renovated Insurance
that R=0.75, that means there is a strong and Industry”, The Insurance Times, Vol. 25,
positive relationship between the ranks given by No.4.
the consumers and ranks attained by the 3. Namasivayam N, Ganesan S and
companies through the market. Rajendran S (2006), “Socioeconomic
Factors Influencing the Decision in
CONCLUSION
Taking Life Insurance Policies”,
In many ways the entry of private Insurance Chronicle, August, The Icfai
players has marked a second coming for the University Press, pp. 65-70.
sector. Within three years, the sector has 4. Patil Kallinath S (2003) “Life Insurance
undergone a makeover offering the market more Corporation Of India, Its Products and
choice, better service, quicker settlement, tighter Their Performance Evaluation: A Special
regulations, and greater awareness. Furthermore, Reference to Gulbarga District”, Finance
from this study, it was strongly believes that the India, Vol. 17, No. 3, pp. 1037-1040.
purchasing decision of the consumer depends on
quality, accessibility and promptness of services,
which may lead a company aquire the top rank Raman N and Gayatri C (2004), “A Study on
with a huge market share. Customer Awareness towards New Insurance
Companies”, Indian Journal of Marketing,
REFERENCES Vol. 34, July, pp. 9-15.
1. T.Devasenathipathi, P T Saleendran and A

Shanmugasundaram (2007), "A study on
consumer preference and Comparative
Analysis of All Life Insurance Companies
‐ 199 ‐


MARKETING AND
MANAGEMENT RESEARCH

SUPPLY CHAIN MANAGEMENT IN FRESH FRUITS AND
VEGETABLES SEGMENT: UNORGANIZED V/S ORGANIZED SECTOR
LOKESH VIJAYVARGY*; PRERNA JAIN**
*Jaipuria Institute of Management Jaipur
**Jaipuria Institute of Management Jaipur
ABSTRACT
With the increasing need to assure consumers that the food they intend to consume is
safe and nutritious, the food industry is moving away from the traditional means of
buying towards a more direct and reliable means of procurement where buyers exert
greater control over prices, quality and production methods and unable to respond
to the demands of the institutional buyers, most smallholder farmers will become
increasingly marginalized. The lack of incentives, the added costs, the lack of
knowledge and the inability to make appropriate investments will inevitably result in
a dualistic food distribution system where smallholder farmers will face diminishing
returns. The present study compares the traditional mandi system with organized
retail system along with various parameters like mark-up at each stage, gains of
farmer v/s price paid by end consumer, wastage, lead time, and use of IT. The paper
suggests that to break away from the commodity trap and to enter higher value
markets, smallholder farmers need to consolidate and differentiate to add value to
their product offer. A range of support mechanisms will be required to overcome
many of the impediments and to facilitate this transition. Comparing unorganized
food chain Vs organized food chain the paper shows how supply chain minimizes the
cost of vegetables and fruits.
INTRODUCTION
While the concept of supply chain
A supply chain describes the full range of management is not new, its application to the
activities that are required to bring a product fresh produce industry is more recent. Agri-
or service from conception through the supply chain includes growers, pickers,
different stages of production and processing packers, processors, storage and transport
to deliver superior value to the customer at facilitators, marketers, exporters, importers,
least cost to the supply chain as a whole. distributors, wholesalers and retailers.
‐ 200 ‐


As the Indian population is increasing, the Despite producing 11 per cent of the world’s
demand for fresh fruits and vegetables is also vegetables and 15 per cent of fruits at very
increasing. Owing to the perishable nature and competitive costs of about 53 per cent and 63
very short shelf life, these items require proper per cent of average global prices, India’s share
storage and transportation facilities in order to in global fruits and vegetables trade has
reach to the customer in fresh state. This remained at only 1.7 per cent and 0.5 per cent,
requires a considerable amount of effort from respectively, the report points out.
the involved parties. The entire chain is
fraught with issues like lack of transparency in Even international transport costs are 20-30
pricing (at the farmers' end), dominance of per cent higher than in other countries. For
traders, weak links in supply chain, etc. This instance, it costs $790 to transport one tonne
leads to loss of revenue to the farmer and of grapes from India to the Netherlands, which
increased additional costs to the other supply is two and a half times higher than what the
chain partners, which ultimately enforces the Chileans are paying, although it is twice as far
final consumer to bear extra burden on his from the Netherlands as India.
pocket. Since organized retail has started
showing interest in fresh fruit and vegetable ISSUES
markets and has already entered into the
market with huge investments, the issues Though India is the second largest fruit and
involved in the supply chain have changed vegetable producer in the world (134.5 million
dramatically and are influencing not only the tones), cold storage facilities are available
supply chain partners but also the whole only for 10% of the produce. In spite of
agriculture sector in India. abundant agricultural produce, India ranks
below 10 in the export of food products with
According to FICCI report of October 2004, processing levels in fruit and vegetable sectors
India is the second largest fruit and vegetable at around 2% only.
producer in the world (approx 135 million
tonnes), second largest producer of milk, fifth The food supply chain is complex with
largest producer of eggs, and sixth largest perishable goods and numerous small
producer of fish with volumes of 5.2 million stakeholders. In India, infrastructure
tonnes. connecting numerous small stakeholders like
farmers, wholesalers, food manufacturers,
With such a vast store of natural resources at retailers is very weak. Farmers bring whatever
its disposal it is a pity that India plays a very they produce to the market without any
meager role in world food trade. High delivery knowledge about the demand in the market.
costs, caused primarily by a fragmented Inadequate usage/improper management of
supply chain, bad logistics, together with poor cold chains are leading to loss in quality of the
standards are hurting India’s horticulture vegetables and fruits which in turn is leading
exports much more than trade barriers, to loss of profits and business opportunity. Lot
according to a World Bank report. of investments need to be made in cold chains
in India.
‐ 201 ‐


FIG 1
Weak alignment of supply chain strategy with agriculture among producers, consumers, and
business strategy is also another major traders. The mandi is central to the
problem with the Indian vegetable and fruit functioning of the marketing channel, and acts
sector. Rapid entry of corporates into this as delivery point where farmers bring produce
sector is helping farmers as many corporates for sale to traders.
are going for direct tie-ups with farmers
eliminating the middle men. The current MANDIS or market yards probably came into
challenge is to adopt best practices in supply existence to regularize the flow of agri-
chain like collaborative forecasting, data produce and to protect the interest of the
integration, increased usage of IT, demand farmer.
based production, incorporating a pull system
for fruit and vegetable production rather than a Today, the market yard system of transacting
push system sharing risk and rewards by the agricultural produce has come to represent the
supply chain partners, etc. main problem of Indian agriculture – like too
many intermediaries, wastage, farmer not
Another issue is to keep abreast of getting the right remuneration and the overall
globalization by constantly upgrading quality of produce etc.
competencies which will ultimately lead to
better supply chain practices in Indian food Though the mandi system is not being done
industry. When compared to China or away with, the Union Government had
Philippines, India lags far behind in terms of recently announced that private companies
exporting food items. Similarly, many Asian will be allowed to directly procure foodgrains
countries like China have better storage from farmers instead of going through mandis.
capacities and well coordinated supply chain Disintermediation will definitely lead to
in the food sector. savings as buyers as well as farmers will not
incur transaction costs. The mandi system
THE TRADITIONAL MODEL makes it mandatory for the farmer to sell his
produce through the market yards resulting in
The Agricultural Products Marketing Act double handling and transportation costs.
of India legislated the creation of physical
market places, called mandis, to enable a more The operation of the mandi consists of a
equitable distribution of the gains from number of different stages, from the logistics
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of transporting grain to the market to quality agent's office to collect a cash payment. The
inspection, auction, bagging and weighing, agent pays a mandi fee (1 % of purchase value
and payment. Based upon local information in Madhya Pradesh) to the mandi. The bagged
within the village, farmers decide in which of produce is then loaded on to the buyer's trucks
the nearby mandis to sell. They transport their and transported to the processing plant.
crops to the mandis in carts drawn by animals
or tractors. Very often, to avoid peak-time LIMITATIONS
crowds, farmers will arrive at the mandi the
night before they intend to sell. When the • The mandi does not serve the farmer
mandi opens in the morning, farmers bring well, and is burdened by inefficiency.
their carts to display areas within the mandi. Because the farmer does not have the
resources to analyze or exploit price
The inspection by buyers is by sight. There is trends, the timing of the sale may not
no formal method of grading the produce and result in the optimal price for the crop.
the only instrument used is the moisture
meter; the crop is not tested for oil content. • In addition, farmers find the auction
process demeaning. Agents belong to a
Once potential buyers have inspected the close-knit community that is socially
produce, a mandi employee conducts the and economically distinct from the
auction, where commission agents place bids. farmers' community. While they may
The auctions are typically open oral auctions not collude in pricing, they do collude
with incremental bidding. The auction in establishing the practices of the
represents a stark contrast from the buyer’s trade that uniformly favor agents and
and seller’s perspectives. For the farmer, the exploit the farmers' situation.
moment is pivotal: a scant 30 seconds assesses
the results of six months of investment and • Farmers feel that the weighers
hard work and establishes the value of one of consistently under-weigh their produce
only two or three paydays he will have in the by applying practiced and timely
year. For the commission agent, on the nudge to the scale.
other hand, the moment is routing; he has
many more carts of produce to buy and his • The multiple points of handling in the
margin is assured irrespective of the price. supply-chain require the produce to be
bagged, which takes four to five times
Once the price has been established by the longer to be unloaded at the processing
auction, the farmers move the cart to the plant than unbagged produce. Traders
weighing area run by the buying commission generally do not have the capacity to
agent. In most cases, the weighing area is in store and manage different qualities
the mandi complex. In some cases, especially and grades of produce, inhibiting
if the mandi is small, the weighing area may efforts to produce better crop grades.
be at the commission agent’s home near the
mandi. Here, the produce is transferred from • From the company's point of view, the
the cart into individual sacks. The sacks are key problem is the agent's control of
then weighed, one at a time, on a manual the market and the resulting distortions
scale. After weighing, the full value of the of price and quality. Agents purchase
grain is calculated. The farmer goes to the grain on a trading company's behalf.
‐ 203 ‐


Some of the produce they buy is of Several factors influence the supply chain of
good quality and therefore command a fresh food in India. A few of them are:
premium price, while other crops are
of poor quality and therefore sell at a 1. GOVERNMENT
discount. In any given day, an agent
The government of India is aware of the
purchases produce with a range of crop
importance of the sector and has taken several
quality at a range of prices. The agent
steps to boost the sector. In the light of high
often mixes the different quality crops
perishability of products in the sector, the
together and charges the trading
government allows import of cold storage
company a single price near the higher
equipment or establishing cold storages in
end of the price spectrum.
India without any restrictions. Foreign
THE MODERN ORGANISED MODEL companies are allowed to have a share of upto
51% in cold chain projects. There are several
Food companies are using increased delivery arrangements to provide subsidies in the
frequencies, smaller orders and faster order sector, for example, National Horticulture
cycle times to keep costs low while meeting Board (NHB) drives a subsidy scheme which
their customers' and consumers' increasing provides 25% (max Rs. 50 lakhs) subsidies to
demand for fresh food. the promoter in overall capital investments.
There are about 60 Agri-Export Zones (AEZ)
Some of the latest trends in the fresh fruit in India promoted by Agricultural and
supply chain are Processed food products Export Development
Authority (APEDA). These zones not only
INCREASED FOCUS ON FRESHNESS channel proper exports but also tend to reduce
This requires that fruits, vegetables and semi inefficiency in the value chains of the agro
processed (ready to eat) salads must be products.
presented to consumers in immaculate 2. INTEGRATION IN AGRO SECTOR
condition while maximizing shelf life to avoid
costly waste. Agro food sectors in many developing
countries are undergoing changes leading to
PROLIFERATION IN FRUIT AND closer vertical coordination. One of the
VEGETABLE PRODUCT VARIETY reasons that can be cited is the transaction cost
Along with meeting increased demand for economics. Transaction costs are higher in
organic and imported specialty fruits and open market where there are a large number of
vegetables, retailers must be able to secure small players. However, these costs tend to be
high quality local and imported products all lower in an environment of strategic alliance
year round. This requires wholesalers to act as through contracting, or within a vertically
both local agent and a value added sourcing integrated firm. In India, setup of retail chains
specialists. like Reliance Fresh of Food World has low
overall transaction costs for a given volume of
INCREASED ATTENTION TO transactions when compared to the same
MAINTAINING THE "COLD CHAIN" volume traded by a large number of small
players.
FACTORS INFLUENCING FOOD AND
VEGETABLE SUPPLY CHAIN IN INDIA
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3. EMERGENCE OF ORGANIZED The study was based on in-depth interviews
RETAIL with commission agent-Muhana mandi,
Sanganer, Jaipur (Raj.) wholesalers and
The emergence of organized retail, which retailers in Jawahar Nagar area, Jaipur and
presents superstore as the primary outlet, goes organized retailers like Reliance Fresh, Jaipur.
together with new retail strategies demanding
emphasis on establishing the retail brand as a THE STUDY EXAMINED THE
source of competitive advantage. From a FOLLOWING AREAS
supply chain point of view, the more
important aspects of emergence of organized • Mark-up at each stage of fresh food
retail have resulted in a close focus on supply chain
identification and exploitation of hidden
supply chain costs and efficiencies. • Gains of farmer v/s price paid by end
Emergence of organized retail is leading to consumer
direct benefits to the framer, and low cost and
better quality to the end consumer. • Wastage
METHODOLOGY • Lead Time
The present study aims at finding out • Use of IT and modern storage systems
quantitative differences between traditional
mandi system and modern organized retail A thorough literature review was also done to
chains. The field study was undertaken reveal factors influencing fruits and vegetable
covering tomato, potato, onion and banana supply chain in India, trends in fresh food
because of their major percentage in national supply chain, the APMC act, its limitations
vegetable produce and universal consumption. and also perceived benefits of prevalent
organized retail chain.
TABLE 1: TRADITIONAL DISTRIBUTION SYSTEM: PRICES AND MARKUP
Price per kg of Produce Tomato Potato Onion Banana
Price paid by end consumer (INR) 16 8 16 14
Price received by farmer (INR) 10.5 3.75 9.75 2.5
Markup (%) (price paid by 52 113 64 460

end consumer to the price
received by farmer)
The given table states the difference in price varies from 52% (for tomato) to 460% (for
received by farmer for his harvest compared to banana). The level of markup clearly describes
price paid by the end consumer. The markup that there are a large number of intermediaries
‐ 205 ‐


in given supply chain that raises the cost for end consumers.
TABLE 2: TRADITIONAL DISTRIBUTION SYSTEM: WASTAGE, TRANSPORTATION

AND HANDLING COSTS, LEAD TIME AND SOURCE
Tomato Potato Onion Banana
Wastage (%) (per kg) 13.33 15.00 15.00 12.50
Transportation and labour cost (per kg) Rs 2 Rs 2 Rs 2 Rs 2

Lead Time (hrs) 30-32 12 12 21
Gujarat, MP,
Source Nasik UP UP Maharashtra
This table shows that wastage in the supply A. MARK-UP AT EACH STAGE OF
chain can vary from 12.5% (for banana) to FRESH FOOD SUPPLY CHAIN
(15% for onion and potato). This is the
wastage incurred at retailer’s end only. The traditional supply chain has a
However previous studies reveal that wastage markup of 52% for tomato to 460% for
at farmer’s end during transportation can be as onion. It is important to note that
high as 20%. This means that cumulative retailers have highest margins whereas
wastage throughout the supply chain can be the risk borne by them is the lowest.
30%-35%. As the number of intermediaries in the
supply chain increases, so does the
KEY FINDINGS markup paid by end consumer. Part of
the markup by commission agent is
The data collected are pertaining to price
paid as fixed tax (7.6%) under the
mark-ups, gross margins, lead time and
APMC act.
wastage for traditional and modern fresh food
supply chain. The keys findings of the study
are:
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TABLE 3: TRADITIONAL DISTRIBUTION SYSTEM: MARK-UP AT EACH LEVEL OF
SUPPLY CHAIN
INR Tomato Potato Onion Banana
End consumer 16 8 16 14
Reseller 12.30 5.04 11.49 5.84
Commission agent 10.50 3.75 9.75 4.50
Farmer 8.50 1.75 7.75 2.50
(B) GAINS OF FARMER V/S PRICE he cultivates the produce for months and this
PAID BY END CONSUMER is his only source of income. On the other
hand, risk undertaken by retailer is low as
Gross margin for farmer is as low as--- most of his goods are sold within 1-2 days and
whereas for retailer it is highest at ---. This is he gets daily earnings with higher gross
inequitable as risk taken by farmer is higher as margins.
TABLE 4: TRADITIONAL DISTRIBUTION SYSTEM: GROSS MARGIN AT EACH

LEVEL
(%) Tomato Potato Onion Banana
Commission agent 9.52 26.67 10.26 22.22
Reseller 30.10 58.89 39.24 139.64
(C) WASTAGE Main reasons for wastage are

The traditional supply chain is wrought with 1. Shortages of Cold Storage facilities
wastage. The wastage can be as high as 15% and Refrigerated transport lead to
per kg for onion and potato at retailer’s end inefficiency in handling perishables
and 30-30% for complete supply chain. which manifest itself into wastage.
This wastage is being estimated at 25% of 2. Wastage borne by farmers is highest as
total produce or approx Rs. 50000 crores or retailers buy a smaller lot of produce
US $ 10 billion. on daily basis and are able to sell even
‐ 207 ‐


spoiled food to lower income group most of their fresh food from nearby
people at cheaper rates. mandis. This highlights the need for
large scale integration of information
3. It has been noted that even organized and installation of infrastructure.
retailers are facing problem of lack of
established cold chain. The agro- (D) LEAD TIME
produce collected at distribution centre
is stale by the time it reaches retail Lead time for order fulfillment varies from 12
outlets. To overcome this problem, hrs for onion and potato to 32 hrs for tomato
organized retailers started sourcing depending on the source of supply.
TABLE 5: BENEFITS TO END CONSUMER: TRADITIONAL DISTRIBUTION SYSTEM
V/S MODERN DISTRIBUTION SYSTEM
Price per kg of Produce Tomato Potato Onion Banana
Traditional Distribution system (INR) 16 8 16 14
Modern Distribution system (INR) 12.5 5.44 8.57 8.31
Improvement (%) 21.88 32.00 46.44 40.64
‐ 208 ‐


FIG. 2
(E) USE OF IT AND MODERN demand. This provides retailers an opportunity to
STORAGE SYSTEMS develop a seamless information flow, from the
checkout to retail stock control and replenishment
IT, like EPOS and RFID, is being used by functions. EPOS and Enterprise Resource
organized retailers. However it is notable Planning are the technologies popular with Indian
that IT can be availed to the fullest only if food retailers like Reliance Fresh and Spencer’s.
farmers start processing and packaging at
their end. IT is also be used by farmers but From the economies of scale point of view, the
mainly for the food grains market which is costs associated with these technologies are
more organized. However perishability justified only in case of large organized and
rate in this segment is much lower. integrated players.
No accurate maintenance of records about Sachin and Kuttayan (2003) conducted a
prices, demand and supply was found with descriptive study on ITC’s E-choupal initiative.
the commission agent i.e. at mandi. The study clearly delineated effect of emerging
technologies on Indian food supply chain. The
Cold storage systems are installed at shops authors found that farmers get the benefits like
of large retailers and wholesalers however faster processing time, prompt payment and
markup by them is also higher. Moreover, access to a wide range of information, including
main wastage that is incurred during accurate market information, and market trends,
transportation from farmer to consolidator which help them to make efficient selling
is uncontrolled due to lack of refrigerated decisions. Also, farmers selling directly to ITC
storage at framer’s end itself. through an e-choupal receive a higher price for
their crops than they would receive through the
RECOMMENDATIONS
mandi (traditional) system, on an average 2.5%
It can be inferred from the present study that higher.
modern fresh food supply chain is much better
The overall benefits to farmers include lower
as compared to traditional supply chain. There
price for inputs and other goods, higher yields and
is an enormous scope of improvement in the
a sense of empowerment. E-choupal saves farmers
current mandi system. Accordingly a few
from the dreaded agents, time wasting mandi
recommendations are suggested:
system and transportation costs. At the same
USE OF IT time, ITC also gets the benefits of lowering
procurement costs (it saves the commission fee
One of the major benefits of Electronic Point and part of the transportation cost it would
of Sale (EPOS) technology is that, in otherwise pay to traders who serve as its buying
concurrence with delivery information and agents at the mandi).
frequent stock counts, the sales data collected
presents a very clear picture of market demand ITC recovers its equipment cost from an e-
patterns. choupal in the first year of operation and venture
as a whole becomes profitable. The system also
Along with EPOS, sales based ordering system is provides direct access to information about
becoming popular which enables orders to be conditions on the ground and weather which helps
generated automatically in response to customer farmers in planning for the next crop.
‐ 209 ‐


ITC’s IT initiative is also paving ways to educate – Sourcing for processing and
and update the Indian farmers with the latest exports,
happenings in the commodities world and other
agricultural products. – Other services such as banking
etc.
IMPROVED SUPPLY CHAIN
SUGGESTED INFRASTRUCTURE AT VARIOUS
STAGES
As aggregation will reduce cost of the supply
chain, development of terminal markets is • AT TERMINAL MARKET
suggested. These are professionally managed
competitive structure developed to provide Electronic auction facility, Packhouse,
market services to farmers at their door step Quality testing facility, Palletisation,
and a comprehensive solution to stakeholders Material handling equipment, Cold
in the supply chain. A terminal market is storage, temperature controlled
developed to benefit from aggregation through warehouse, ripening chamber etc.
following format:
• AT COLLECTION CENTRE
• HUB-AND-SPOKE FORMAT
Terminal Market (the hub) to be
Washing, grading & sorting facility for
linked to number of collection
produce, Weighing, and Plastic Crates
centres (the spokes).
• COLLECTION CENTRES SERVICES
to be conveniently located at key • AT TERMINAL MARKET

production centres to allow easy Transport (including cool chain),
access to farmers Warehousing and commodity
exchange, Transactional Banking
• PROVIDE STATE OF ART services, Dissemination of Market
FACILITIES FOR information, and Settlement of
payment
– Transparent price discovery
(electronic auction), • AT COLLECTION CENTRE
– Primary value addition( Collection & Aggregation of produce,

washing, grading, packing etc), Spot payment to farmer at CC,
Advisory on inputs, prices, quality,
Multi-modal transport to TM
‐ 210 ‐


FIG. 3 FORMAT OF A TERMINAL MARKET

As can be seen, this structure resembles the to transportation. Incorporation of banks into
cooperative system developed for dairy the system would allow farmers to benefit
produce. Implementation of this structure from financing from safe avenues instead of
would result in added value not only for the falling into the clutches of local money
farmers but also for consumers. Collection lenders extracting exorbitant interests.
centres would ensure that regular payments
are made to the farmers to their produce. Also The greatest benefit ensues from removal of
proximity of these centres to the site of several layers of intermediaries from the
production would reduce losses incurred due supply chain as this reduces the markup
greatly.
‐ 211 ‐


FIG. 4
Encouraging processing and value addition at packaging material, lower capacity utilisation,
farmer’s level which will also enhances export non-adoption of cost effective technology,
quality of the produce high cost of finance, infrastructural
constraints, inadequate farmers-processors
The fruit and vegetable processing industry in linkage leading to dependence upon
India is highly decentralized. A large number intermediaries. The inability for market
of units are in the cottage/home scale and promotion is an important reason for
small scale sector, having small capacities inadequate expansion of the domestic market.
upto 250 tonnes/annum though big Indian and
multinational companies have capacities in the Proper development of processing industry
range of 30 tonnes per hour or so. The will not only result in greater employment
processing level in India is estimated to be opportunities but also enormous reduction in
around 2%, as compared to about 80% in losses incurred in fresh food supply chain.
Malaysia, 30% in Thailand, and 60-70% in the
UK and USA. • Disintermediation or delayering of
supply chain which will result in better
The domestic consumption of value added realization by farmers and lower
fruit and vegetable products is however, very markup for consumers.
low compared to the primary processed food
in general and fresh fruits and vegetables in • Development of cold chains.
particular which is attributed to higher
incidence of tax and duties including that on
‐ 212 ‐


CONCLUSION its highway system, but thanks to a swelling
middle class and booming car sales, the roads
As India’s population increases, demand for are filling up faster than they can be built. For
fresh food will increase. Building shiny new now, Reliance plans to buy mostly from
stores to meet that demand is easy. The hard farmers located within a couple of hours of
part will be supplying them with fresh, clean major cities to shorten transport times. The
and safe vegetables and fruit through a company will build up its own fleet of trucks,
sophisticated supply chain that links farms and but will also outsource some of its transport
consumers, country and cities. It's here that needs. Eventually, trucks will be fitted with
the real revolution lies. At the moment, India radio or satellite transmitters that will allow a
has one of the most fragmented produce- central control room to track locations and
supply chains on the planet. Industry experts cargo—a far cry from the bullock carts and
estimate more than 30% of all fresh produce is rusty trucks that currently link producers and
lost or spoils before it reaches the market. On customers. Still, even the fanciest trucks must
average, goods pass through six or seven slow for bureaucracy. The country's 35 states
middlemen before a consumer can buy it, and territories run separate tax and duty
resulting in tortuous journeys, big markups systems. To get from Bangalore to Hyderabad,
and poor quality. Replacing that system about 550 km away, for example, the driving
requires not just building a modern, efficient time is about 16 hours, but stops at border and
network but adapting it to Indian conditions. tax-inspection checkpoints add two to three
hours to the trip.
In India, need of the hour is to invest in
systems that retailers take for granted in other Thus organized retailing and public-private
countries. To ensure refrigeration units keep partnership accommodated with a willing
humming during the country's frequent power government is the answer to challenges faced
outages, Reliance is installing diesel in fresh food supply chain.
generators not only in all its shops but also at
its rural collection hubs, where farmers bring
their produce, and at its processing centers,
which usually sit on the outskirts of a city. A
reliable supply of safe water in which to wash
fruits and vegetables is also a basic necessity.
Because city water often runs dry and can
carry dangerous bacteria, Reliance has
installed reverse-osmosis machines at its
processing centers to clean the local water
supply. Reliance says it will invest $6 billion
in retail over the next few years, with some
60-70% of that going to its distribution
network. "It's the cost of providing clean, safe
food to consumers," says Gunender Kapur,
head of Reliance's foods business.
Transport is also a challenge. India's

government is pouring billions of dollars into
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MARKETING AND
MANAGEMENT RESEARCH

YOUNGSTERS PERCEPTION REGARDING
READYMADE GARMENTS IN HARYANA
DR. MAITHILI R.P. SINGH*
*Department of Management
Central University of Rajasthan Kishangarh Ajmer
ABSTRACT
Readymade garment segment is the main key drives of growth for Indian textile
industry. The Indian readymade garment industry has been the largest foreign
exchange earner for the country and accounts for almost 14 per cent of the total
foreign exchange earned by the country. ‘Consumerism’ is the part of our daily life.
For marketers, it is important for us to decide to whom to direct the promotional
efforts by recognizing why and how individuals make their consumption decision.
Consumer preferences are changing and becoming highly diversified. Readymade
garments as the name itself implies the garments ready for wearing. Ready to wear
garments have been finding more and more acceptance in the indigenous as well as
export markets mainly due to low cost fabrication. The trend for using readymade
garments is increasing day by day. Readymade garments may be classified like
formal wear, fashion wear and casual wear. Because of the acceptance of
readymade garment by the youngsters, readymade garment companies manufacture
different types of readymade garments. The readymade garment segment will be the
principal drivers of growth even in the domestic industry. The changing preference
of Indian consumer from buying clothes to readymade garments has promoted
several companies to move up the value chain into the finished product segment. The
present study highlights the youngsters’ perception about readymade garments in
India.
KEYWORDS: Readymade Garment, Textile, Formal Wear, Casual Wear, Fashion

Wear.
‐ 214 ‐


INTRODUCTION segmentation which called of the division of
their total potential markets into smaller,
In India readymade garment market is rising at homogeneous segment for which they cough
a significant rate of growth. Indian readymade design specific type of garments.
garment markets are having a tough time in
pushing up sales in the United States with the Readymade garments as the name itself
large retail chain, there slashing the volume of implies the garments ready for wearing. Ready
sales in the face of serious financial crunch. In to wear garments have been finding more and
the early era, there is no scope of readymade more acceptance in the indigenous as well as
garments but now-a-days, trend of readymade export markets mainly due to low cost
garments is increasing day by day at a very fabrication. The trend for using readymade
rapid pace. Each nook and corner has its own garments is increasing day by day.
tale to tell. Readymade garment segment is the Manufacturing of Jeans and Shirt is one of the
main key drives of growth for Indian textile important products of readymade garments.
industry. The Indian readymade garment Readymade garments may be classified like
industry has been the largest foreign exchange formal wear, fashion wear and casual wear.
earner for the country and accounts for almost Whatever you wear, your clothes tell other
14 per cent of the total foreign exchange people a lot about you. People started wearing
earned by the country. Readymade garments clothes many thousands of years ago, mainly
exporters were worth US $ 8 bn in FY 2006 to protect themselves against the climate. Over
and will cross US $ 16 bn by the end of 2010 the centuries clothes have come to mean much
assuming a conservative growth of 15 per cent more than that. They can hide or show off the
per annum. According to estimates, parts of the body, according to what is
investment textiles are expected to touch US $ considered attractive or even decent at a time.
31 bn by 2010. They can indicate someone belongs to a
particular religion.
‘Consumerism’ is the part of our daily life.
For marketers, it is important for us to decide In many parts of the world, people still wear
to whom to direct the promotional efforts by the traditional styles of clothes that their
recognizing why and how individuals make ancestors wore hundreds of years ago. In
their consumption decision. The initial thrust India, for example, many women wear a sari,
of consumer research was from a managerial a dress made by winding a long length of
respective. Marketing manager wanted to fabric around the body. But now the time has
know the specific causes for consumer been changed. Fashion market is continuously
behaviour. The size of the consumer market in evolving. Fashion is never stagnant, it is never
this country was vast and constantly stable. The fact is that buyers are becoming
expanding. Consumer preferences are preference savvy and smarter in order to what
changing and becoming highly diversified. they shop. They acquainted that a throwaway
Consumer preferences are changing and piece of fast fashion from a retail chain store
becoming highly diversified. Even in will complete their outfit choices. People
industrial markets buyers are exhibiting wanted to wear the branded readymade
diversified preferences and less predictable garments. Today youngsters are extremely
purchase behaviours. To better meet and needs aware of the various brands in the market and
of specific groups of consumers, most very conscious about the products. They pick
marketers adopted a policy of market and choose very carefully according to their
‐ 215 ‐


needs, style, preferences etc. They also readymade garments. The monthly data on
exercise a lot of independence in decision- readymade garments export for the period
making and influence the family buying April 1991 to December 2000 is used to build
behaviour. the model. The forecast are obtained for the
period January 2001 to December 2001 by
Because of the acceptance of readymade using the ARINA model. The accuracy of ex-
garment by the youngsters, readymade post forecast is also tested. The forecasts
garment companies manufacture different indicate a slowdown in growth of exports in
types of readymade garments. The readymade January to March 2001 as compared to the
garment segment will be the principal drivers same month in year 2001. He suggests a
of growth even in the domestic industry. The review of government policy towards the
changing preference of Indian consumer from industry.
buying clothes to readymade garments has
promoted several companies to move up the Ahluwalia (1996) surveyed that the
value chain into the finished product segment. readymade garment segment has vertical
Several companies that are engaged in fibre growth. This industry is growing at the rate of
manufacturing are now keen to enter the 20 per cent with massive viability and
readymade garments space. A recent entrant is considerations margins. The largest segment
Siyaram which launched its readymade for the readymade garment segments includes
garment range in November, 2006 following the age group of 16-35 that is very brand
suit with other majors line Century Textile and conscious and gives priority to high quality.
Raymonds. With the help of Kewalkiran Branded readymade garments account over
Clothes, we can see the growth of readymade 21per cent of the readymade garment industry.
garments. Net sales of the business is 26.12 Despite substantial growth, company to the
crore in 2004-05 which increase to 302.98 international readymade garment market of
crore in 2006-07 and profits after tax in 2004- nearly 183 mm USD. The Indian readymade
05 is 3.72 crore, 11.93 crore in 2005-06 and garment market is still in a budding phase.
15.44 crores in 2006-07. The main obstacle in the organised players is
The growing phenomenon observed among the huge unorganised scenario of the market
Indian Textile companies is the setting up of like Siyaram’s venturing into the readymade
manufacturing facilities in the strategic garment to grip the continuously changing
regions outside India where they can avail of fashion trends. It is becoming a prominent
duty concessions and reduce exports lead design of men’s readymade garments.
time. Zodiac and Ambattur clothing have set
Kathuria and Bhardwaj (1998) surveyed on
up facilities in the Gulf region to cut down on
import quotas on textiles and clothing which
export delivery schedules to the European and
impose a non-transparent burden on both the
US markets. Raymonds has set up unit in
importing and exporting countries. The
Bangladesh to avail of the zero duty access to
agreement on textiles and clothing promises
the EU.
abolition of all quota restrictions in
international trade by the end of year 2005.
REVIEW OF LITERATURE They provide comprehensive estimates of the
magnitude of the implicit export taxes
Chawla (1991) has made an attempt to build resulting from the labyrinth of quotas imposed
an ARIMA model to forecast export of Indian under the WTO agreement on textiles and
‐ 216 ‐


clothing. Over the period 1993 to 1997, export the later contributed Rs. 248.3 billion (50.9%)
tax equivalent for garment exports to the USA to the foreign exchange earnings.
were found to be about twice the EU. In both
the garment and textiles sectors, India’s Padhi (2004) in his study found that India’s
strength lie basically in natural resources and apparel-export industry is facing a moment of
low cotton. truth. The removal of world trade quota
restrictions in January 2005 could bring a
Sharma (2000) has explained that export huge increase in India’s annual exports and
growth in India has been much faster than make it the big winner in the global market,
GDP growth over the past few decades. after China. This breakthrough will occur,
Several factors appear to have contributed to however, only if the government accelerates
this phenomenon including foreign direct the pace of reform and local manufacturers
investment (FDI). However, despite adopt measures to improve their
increasing inflows of FDI especially in recent competitiveness, a study shows productivity,
years there has not been any attempt to assess labour costs and quality, at least for higher-
its contribution to India’s export performance. end goods, will determine which country win
or lose once the arrangement on textiles and
Mahmuda (2000) explains that in the last clothing quota restrictions on apparel exports
decade of the twentieth century the readymade expire. China is likely to capture almost all of
garment sector of Bangladesh gave the the resulting growth in global exports.
country and its women an image boost, both in Regardless of whether the United States and
South Asia and rest of the world. Bangladesh the European Union allow brand owners and
exports 35 types of garment products to about retailers to buy freely or impose transitional
31 centuries around the world. The readymade safeguard mechanisms and increase duties,
garment sector is a 100 per cent export Asian countries that want to increase exports
oriented industry. Bangladesh maintained its will have to take market share from one
position as the sixth largest exporter of apparel another and from countries outside Asia.
to the United States in 1994-95; it was the
largest exporters of T-shirts and shirts to the Ananthakrishnan and Jain Chandra (2005) in
European Union in 1992-93. their study analyse the impact of the
elimination of textile and clothing (T & C)
Hashim (2004) portrays that textile industry quotas in India. Their simulations suggest that
contributes heavily to GDP, industrial output, while Indian exports of T & C will continue to
foreign exchange earnings and employment. expand in the presence of the safeguards on
In 2000-01, it contributed around 4 per cent to China, they will be affected once these
GDP, 14 per cent to industrial production, 27 safeguards’ are lifted. They argue that India
per cent to the country’s export earnings and could emerge much stronger and expand its
18 per cent to the employment of the trade in T & C at a much faster pace, if some
industrial sector. India’s share in the global of the key domestic structural weaknesses are
textile industry is 4 per cent and the same in overcome. They analyse the impact of the
the global garment industry is 3.4 per cent. quota elimination on India using GTAP. The
During 1991-92 to 2001-02 India’s textile and results of the simulations do not present an
garment exports grew at an annual growth rate optimistic scenario for India in terms of export
of 8.5 per cent. During 1999-2000 while the growth of T & C in a quota free world. They
former contributed Rs. 239.8 billion (49.1%), also show that Indian exports of T & C will
‐ 217 ‐


continue to expand in the presence of the preferences and the factors influencing
safeguards on China but will be adversely purchase decision regarding readymade
affected once these are lifted, essentially garments.
providing India’s T & C industry some respite
until 2008, when all safeguard on China will RESEARCH METHODOLOGY
be lifted.
The study is exploratory in nature and based
Saggi (2006) in his study has established that on primary data collected with the help of
garment industry is one of the biggest sources structured questionnaire. Sample units are the
of export with the considerable and rapid youngsters working and non-working in the
increase in growth (much of it over the last age group of eighteen to twenty five years.
four decades), there has been a corresponding Sample size for the study is 200. The
race to the bottom insofar as labour standards population consists of districts of Hisar,
and wages are concerned. Figures estimate Rohtak and Ambala in the state of Haryana.
that India’s readymade garments industry The sample technique used for this study is
contributes around 16 per cent of total export convenience sampling. Secondary data is
earnings and is the largest net foreign collected from published information in
exchange earner for the country. Garment various journals, magazines and websites. The
exports have been raised from a mere $ 2 data collected through structured
million in 1960-61 to $ 696 million in 1980- questionnaire have been duly tabulated and
81 and further to $ 2236 million in 1990-91 classified. Then the data have been analyzed
and almost doubled to $ 4765 in 1990-2000. by using average, percentage, and ranking
with the help of statistical package for Social
It is evident from the review of literature that Sciences (SPSS).
majority of the work undertaken in this area is
related to the conceptual issues of garment ANALYSIS AND FINDINGS
industry, its contribution towards GDP,
garment exports etc. Even researchers have 1. CONSUMER PROFILE
not given much attention to understand the
consumer’s perception and why, what, how, The field of consumer behaviour studies
when and where of their consumption
individual, groups and organisation select by
behaviour. Therefore, the present research has
been endeavoured to fill up these gaps and use and dispose of goods, services, ideas or
strived to deal with youngsters’ perception experiences to satisfy their needs and desires.
about readymade garments. In consumer profile we have to study some
demographic characteristics of consumers
OBJECTIVE OF THE STUDY such as age, sex and income so that we can
make better strategic marketing decisions. It is
To examine the consumer perception towards important for us to recognize why and how
the readymade garment, brand awareness & individuals make their consumption decisions.
‐ 218 ‐


TABLE 1: RESPONDENT’S GENDER
Gender Frequency Percentage

Male 160 80
Female 40 20
Total 200 100
Source: As per survey.
Table 1 indicates that the male respondents are

80 % and female respondents are 20%.
TABLE 2: RESPONDENT’S AGE GROUP
Age (Years) Frequency Percentage

18-21 120 60
21-25 80 40
Total 200 100
Table 2 shows that 60% respondents are from

the age group of 18-21 years and 40% from
age group of 21-25 years.
TABLE 3: RESPONDENT’S FAMILY MONTHLY INCOME
Income (Rs.) Frequency Percentage

Up to 10,000 25 12.5
10,000-15,000 75 37.5
15,000-20,000 60 30
Above 20,000 40 20
Total 200 100
Table 3 shows that 12.5% respondent’s family respondent’s family monthly income is Rs.
monthly income is below 10,000 while 37.5% 15,000-20,000 and 20% respondent’s family
respondents are those whose monthly income monthly income is above Rs. 20,000.
of the family is Rs. 10,000-15,000, 30%
‐ 219 ‐


2. CHANGE WITH CHANGE IN NEW FASHION
Youngsters are found to be innovative and explains their response towards change
change with change in fashion, the table 4 according to changing fashion.
TABLE 4: TIME PERIOD OF RESPONDENT TO CHANGE HIM WITH A NEW FASHION
Time Frequency Percentage

Very easily 95 47.5
By the passing time 76 38.0
Very late 29 14.5
Total 200 100
Table 4 indicates that around 48 % youngsters respondents change by the passing time and
change with new fashion easily, 38% approximately 14 % change very late.
3. FACTORS INFLUENCING The table 5 explains the various factors being
PURCHASE OF READYMADE considered by youngsters while purchasing
GARMENTS readymade garments.
TABLE 5: VARIOUS FACTORS WHILE PURCHASING READYMADE GARMENTS
Factors Frequency Percentage

Brand 30 15
Availability 10 5
Price 28 14
Quality 68 34
Personality 64 32
Total 200 100
It is evident from the Table 5 that quality and 4. READYMADE GARMENTS AND
personality both are the most effecting factor SELF CONFIDENCE
on the buying decisions of youngster and the
least influencing factor is product quality. There may be different views of respondent’s
about readymade garments like whether they
‐ 220 ‐


can improve the self confidence or not, indicated by table 6.
TABLE 6: BRANDED READYMADE GARMENTS VERSUS SELF-CONFIDENCE
Decision Frequency Percentage
Yes 169 84.5
No 31 15.5
Total 200 100

5. READYMADE GARMENTS AND
Table 6 indicates that approximately 85% PRICE
respondents think that wearing branded
readymade garments increase their self- There may be different views of respondent’s
confidence. about readymade garments like the brand
which they buy are overpriced, appropriate
priced or under priced, which is indicated by
table 7.
TABLE 7: BRANDED READYMADE GARMENTS VERSUS PRICE
Frequency Percentage
Over priced 43 21.5
Appropriate priced 126 63
Under priced 31 15.5
Total 200 100
6. RESPONDENT’S PREFERENCES FOR
It is evident from Table 7 that 63 % BRANDED GARMENTS
respondents think that brand they buy have
appropriate price and around 21 % say that it Table 8 shows respondent’s preference for
is overpriced. local and branded readymade garments.
‐ 221 ‐


TABLE 8: RESPONDENT'S PREFERENCE REGARDING READYMADE GARMENT

TYPE
Type Frequency Percentage

Local 20 10
Branded 70 35
Both 110 55
Total 200 100
It is evident from Table 8 that 55% of the 7. SINGLE BRAND BEING USED IN A
respondents prefer both type of garments FAMILY
whether local or branded, followed by 35 %
prefer branded and 10 % prefer local Youngsters are found to be innovative and
readymade garments. they may not follow the use of similar brands
used by their family, the table 9 explains they
use the same brand of family or not.
TABLE 9: SINGLE BRAND USED IN A FAMILY
Frequency Percentage
Yes 30 15
No 170 85
Total 200 100
Table 10 shows respondent’s time frame of
Table 9 shows that 85% of the youngsters brand switching behaviour for readymade
never use the same brand used in a family. garments.
8. BRAND SWITCHING
TABLE 10: RESPONDENT'S FREQUENCY OF CHANGE THE BRAND OF

READYMADE GARMENTS
Time period Frequency Percentage

Never 10 5
‐ 222 ‐


In a month 40 20
In a year 40 20
More than one year 15 7.5
Can’t say 95 47.5
Total 200 100
9. REASONS OF PURCHASE LOCAL
VERSES BRANDED READYMADE
It is evident from the Table 10 that around 48 GARMENTS
% of the respondents can’t state the time
period to change the brand of readymade There are a lot of factors which affect the
garments, and as low as 5 % respondents buying decision of youngsters. Youngsters
never change their brand of readymade buy readymade garments because of many
garments. reasons. Table 11 and 12 explain the various
factors under consideration for purchase of
local and branded readymade garments.
TABLE 11: VARIOUS FACTORS CONSIDERATION WHILE PURCHASING LOCAL

READYMADE GARMENTS
Low price 120 60
Shop near to your residence 20 10
Good quality 50 25
Ignorance about branded readymade garments 10 05
Total 200 100
It is evident from Table 11 that low price has

emerged as most important factor for
purchasing local readymade garments.
‐ 223 ‐


TABLE 12: VARIOUS FACTORS CONSIDERATION WHILE PURCHASING BRANDED
READYMADE GARMENTS

Suitable price 10 05
Good quality 80 40
Stylish 80 40
Comfortable fit 30 15
Total 200 100

It is evident from Table 12 that good quality There are a number of brands present in
and stylish have emerged as two important readymade garments. Table 10 shows
factors for purchasing branded readymade respondent’s preference for various brands of
garments. readymade garments.
10. BRAND PREFERENCE FOR

READYMADE GARMENTS
TABLE 13: RESPONDENT’S PREFERENCE ABOUT THE BRAND OF

READYMADE GARMENTS
Factors Frequency
Koutons 157
Lee 145
Adidas 95
Allen Cooper 43
Charlie Outlaw 57
Cotton County 78
Black 15
Nike 25
Capture 5
It is evident from the Table 13 that most
preferred brand is Koutons, followed by Lee,
‐ 224 ‐


Adidas, Cotton County, Charlie Outlaw and plan their advertisement carefully to make
Allen Cooper. Brands like Nike, Black and sure that the stimulus they want noted is seen
Capture are less preferred brands. as figure and not as ground. Table 14, 15 and
16 explain sources of information, effect of
11. ADVERTISEMENT AND ITS advertisement on purchase decision, and
IMPACT
features of advertisement which attracts the
Advertisement have a great impact on buying youngsters the most.
decisions of youngsters so advertisers have to
TABLE 14: RESPONDENT’S SOURCES TO GET INFORMATION ABOUT
READYMADE GARMENTS
Sources Frequency Percentage

Newspaper 42 21
Radio 3 1.5
Television 67 33.5
Friends & Relatives 63 31.5
Others 25 12.5
Total 200 100
It is evident from Table 14 that television and sources for gathering information regarding
friend & relatives are found to be important readymade garments.
TABLE 15: EFFECT OF ADVERTISEMENT ON PURCHASE DECISION
Effect Frequency Percentage

Yes 147 73.5
No 53 26.5
Total 200 100
It is evident from the table 15 that watching the advertisement has a great impact
approximately 74 % respondents agree that on buying decision of customers.
‐ 225 ‐


TABLE 16: FACTORS WHICH ATTRACT THE MOST TO THE RESPONDENT

Jingle 15 7.5
Actor 35 17.5
Music 25 12.5
Theme/idea 120 60
Others 5 2.5
Total 200 100
It is evident from the Table 16 that theme/idea of the advertisement is the most attracting factor to
the youngsters, followed by actor, music and jingle.
12. AFTER PURCHASE/USE EFFECTS this case they can switch the brand, switch the
category or may continue to be loyal to the
Sometimes consumers do not get satisfaction brand. Table 17 shows the decision they take
after purchase/use of readymade garments. In after dissatisfaction of readymade garments.
TABLE 17: DECISIONS AFTER DISSATISFACTION OF READYMADE GARMENTS
Decision Frequency Percentage

Brand switching 90 45
Category switching 50 25
Brand loyal 60 30
Total 200 100
It is evident from Table 17 that 45 % of the It may be concluded from the study that
respondents, after dissatisfaction in readymade majority of youngsters change with change in
garments switch the brand, 25 % respondents fashion in readymade garments. Quality,
switch the category and 30 % respondents are personality and brand have emerged as
loyal to the brand. important criterion for purchase of readymade
garments. A large majority of youngsters
CONCLUSION believe that wearing readymade garments
enhances self-confidence. Branded readymade
garments are preferred more by them and
‐ 226 ‐


perceived as reasonably priced. Majority of 4. Sagi, Naiyyaa (2006). A Critical
respondents do not follow the brand patronage Analysis of Adherence of Labour
of their family rather they prefer newer and Standards and Solutions. Summer
Research Internship Program 2006,
other brands as well as they switch over
Centre for Civil Society, Journal of
brands of readymade garments frequently. Garment Indsutry, Bangalore
Low price and good quality are main reasons (Working paper No. 150).
for the purchase of local readymade garments.
Good quality, stylish and comfortable fit have 5. Hashim, Danish A. (2004). Post MFA
emerged as main reasons of purchase of implications, cost and productivity in
Indian textiles. Nov. 2004.
branded garments. Most preferred brand by
the youngsters is Koutons, followed by Lee, 6. Lee, Cheryl L. (2002). Appalachian
Adidas, Cotton County, Charlie Outlaw and State University, Journal of Family
Allen Cooper. Brands like Nike, Black and and Consumer Sciences, education
Capture are less preferred brands. Television vol. 20, No. 1, Competencies in
and friends & relatives are the main source of clothing and textiles needed by
beginning family and consumer
information used by youngsters about
science teachers.
readymade garments. They appreciate the
impact of advertisement on their purchase 7. Murphy and Steward (1990). Journal
decision. If youngsters are dissatisfied with of Family and Consumer Sciences,
the garments after use, it may lead to brand education vol. 20, No. 1,
and category switching. Competencies in clothing and textiles
needed by beginning family and
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1. Das, Keshabananda (1996). Surviving Consumer Sciences, education vol. 20,
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2. Hossain, Mohammad A. Trade
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(1998). Export quotas and policy
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‐ 228 ‐


MARKETING AND
MANAGEMENT RESEARCH

LEVEL OF AWARENESS IN RURAL INVESTORS TOWARDS
INSTITUTIONAL INVESTMENTS -
A CASE STUDY OF BIJAPUR DISTRICT
DR. A. S. SHIRALASHETTI*
*P. G. Dept. of Commerce
Karnatak University Dharwad-3
ABSTRACT
The process of economic growth of a country depends on the amount of capital

formation in various sectors of economy. The savings and investments are not only
essential to meet the present and future expected requirements but also essential to
meet the unexpected requirements. The savings, in many times, act as shock absorber
in the day-to-day life of investors. The savings and investments pattern by the people
vary from person to person and even with same person during two periods of time
due to differ in motives. The main motives of savings and investments are to earn
present income to meet present requirements and future requirements.
The main objectives of the study are to examine the relation between the level of
awareness and demographic factors of respondents and the sources of awareness
and reasons for investments.The present study has based on both primary as well as
secondary data. The primary data are collected through pre-tested questionnaires
from 450 respondents from rural area of Bijapur district. The respondents are
selected randomly as sample from villages of different Talukas of Bijapur district.
The collected data are analyzed by using statistical tools to draw inferences. The
study suggested that the Government and non government agencies should take care
in bringing awareness and educating the rural population to save a portion of their
earnings and invest judiciously.
INTRODUCTION usually save and invest to earn income and

meet the future expenses and contingencies.
The economic growth of a country depends on The savings act as shock absorber in the day
the level of investment made by the citizens in today life of investors. The amount of savings
various sectors of economy. The people of investors and their judicious investments
‐ 229 ‐


depend on the size of income, nature of of investments in share, mutual funds and
occupation, size of the family, number of debenture, etc.
earning members, commitments towards
family, consumption pattern, attitudes towards The majority people prefer to invest in
investments, perceptions towards risk and physical and financial savings. They consider
return and investment environment, etc. these investments are safer. The people of
India are investing voluntarily more in various
The savings and investments pattern schemes of postal savings as compared to
by the people vary from individual to other modes of investments. “The postal
individual and even with same individual savings in India during April-July 2010 was
during two periods of time due to differ in Rs.83130 crores as against Rs.60987 crores
motives and perceptions. There are many during April-July 2009 whereas the deposits
motives behind savings and investments. in banks were Rs.146770 crores as against
However, capital appreciation, regular Rs.236348 crores during the same period”1.
income, tax planning, diversification and This indicates that the rate of return on postal
minimization of risks, health and education of savings is higher than the bank deposits and
family members, performance of ceremonial people can access services of post offices
activities like marriage, birth and death, easily due to spread of postal network
purchase of fixed and current assets, throughout the country. The investors are
construction of houses, etc, are some investing in insurance to cover the risk against
important motives behind savings and life and property even though return on
investments in people. Further, the savings investment may be lower. Recently, urban
and investments are also essential to meet the investors prefer for capital and commodity
requirements during old age due to lack of market to take the advantage of market
social security measures in India. The majority determined income. However, rural investors
of Indians depends on their children during prefer either for bank deposits or postal
old age. Of late, the support from the family savings or both due to low awareness towards
members to old age people has been declining investment in capital market. Recently, the
due to westernization of Indian culture. insurance sector has entered some part of rural
Hence, people must save and invest not only India to increase its business and to meet the
for present requirements but also for future needs of rural people. In this background, an
requirements during old age. attempt has made to analyze the level of
awareness in rural investors towards
The household savings and institutional investments.
investments consist of physical savings,
financial savings and marketable savings. The REVIEW OF EARLIER LITERATURES
physical savings comprise of investment in
fixed and current assets like land and MADHUSHDHAN KARMAKAR (2001)2
buildings and their improvements, gold and
The author made an attempt to analyze
jewels, durables and non-durables,
the investment behaviour of house hold sector.
automobiles like two wheelers and four
50 respondents were selected randomly as
wheelers, domestic animals, etc. The financial
sample for the purpose of the study and data
savings consists of bank deposits, post office
were collected through questionnaire from
savings, life insurance, provident and pension
these sample respondents. The study found
funds, etc. The marketable savings comprise
that people in general are risk averse and they
‐ 230 ‐


want to invest in safe assets and they other savings schemes and investment
considered stock market as risky. avenues.
C KRISNAMOORTHY (2007)3 SAFIA JOSMEENA (2009)6
The author made an attempt to study The researcher made an attempt to
the investment pattern and awareness of examine the investment choice of individual
salaried class investors in Niligiris District. investors. The researcher employed SPSS
The study used the primary data, collected package to calculate chi-square to examine the
from 600 salaried investors through association between demographic factors and
questionnaire. The study revealed that 81 per the risk. The study revealed that over 50 per
cent of respondents have preferred for bank cent respondents have made low risk
deposits and insurance investments. investment. The study concluded that there
has no significant association between
FULBAGH SINGH AND SANIA demographic factor and the risk.
CHAWLA (2007)4
SARAVANA KUMAR (2010)7
They made an attempt to analyze the
consumer preference for life insurance in The researcher made an attempt to
Northern India. They had selected sample of examine the investors’ preference towards
300 policy holders from Northern States like equity and future market. The researcher
Haryana, Punjab, J&K, Himachal Pradesh and selected a sample of 100 investors of JRG
New Delhi. Likert Scale has used to collect Securities Ltd. The data were collected
the information. Anova and Post hoc test has through questionnaire. The study revealed that
applied to test the consumer preference the investors were satisfied with the service
towards investment. The study concluded that provided by the JRG Securities Ltd. The study
consumers of post-liberalization period have suggested to have through knowledge before
given higher weightage to rate of return, making investment decision.
surrender value, extra coverage, tax benefits,
maturity amount and risk coverage as OBJECTIVES OF THE STUDY
compared to consumers of pre-liberalization
The main objectives of the study are;
period.
• To know the sources of awareness of
N.YASODHA DEVI, V.S.KANCHANA,
different investment avenues.
AND S SUJATA (2008)5
The researchers made an attempt to • To examine the reasons for
analyze investment behaviour of salaried investments.
persons in Coimbatore City. They examined
the attitudes of respondents towards savings • To examine the causes of low interest
and investment pattern by collecting in investments in capital market.
information from 200 sample respondents
from study area. The study revealed that the • To assess the relationship between the
investors’ main intention to save is to save tax. level of awareness and demographic
Therefore, the study suggested to take steps to factors of respondents.
create awareness among the investors about
‐ 231 ‐


HYPOTHESIS OF THE STUDY The present study confines itself to
examine the relation between the level of
The present study has based on awareness towards investments and
following hypothesis. demographic factors of rural household
investors of Bijapur district. Further, the study
Ho; There has no relation between the level of
also concentrates on the reasons for
awareness and demographic factors.
investments, reasons for low interest in
Ha; There has relation between the level of investments in capital market and priority of
awareness and demographic factors. investments by the investors.
METHODOLOGY OF THE STUDY ANALYSIS OF LEVEL OF AWARENESS

IN INVESTORS TOWARDS
The present study is based on both INVESTMENTS
primary as well as secondary data. The
primary data are collected through pre-tested The Chi-square test is used to analyze
questionnaires from 450 respondents from the relationship between demographic factors
rural area of Bijapur district. The respondents like age, sex, education, level of income,
are selected randomly as sample from villages caste, family system, occupation and marital
of different Talukas of Bijapur district. The status, etc, and the level of awareness of
collected data are analyzed by using statistical investors towards institutional investments
tools like percentage, average and chi-square like investments in bank deposits, post office
test to draw inferences. The investors are savings, insurance and stock market. In
classified into low and high awareness addition, the other aspects like sources of
investors based on the level of awareness awareness, awareness towards various
towards institutional investments like bank avenues of investments and the pattern of
deposits, post office savings, insurance, investments are also analyzed.
mutual funds and shares of companies. The
The quality of decision depends on the
average is calculated from the data collected
quality and quantity of information and their
to classify investors into high awareness and
sources. Friends, relatives, agents, family
low awareness investors. The investors
members and media like press and audio-
whose awareness is above the average are
video, etc are the main sources of awareness
classified as high awareness investors and the
for rural investors. It is clear from Table 1 that
investors whose average is below the average
the main sources of awareness in rural
are classified as low awareness investors.
investors towards institutional investments are
Further, secondary data are collected from
family members and friends. But the role of
journals, books and daily newspapers to
media is least in creating awareness. This
support the study.
shows that informal sources have played key
SCOPE OF THE STUDY role in modeling the rural people.
‐ 232 ‐


TABLE -1: SOURCES OF AWARENESS AMONG RURAL INVESTORS TOWARDS
INVESTMENTS
Sources of Awareness Number of Response Percentage
Family Members 225 50.00
Friends 206 45.78
Relatives 125 27.78
Agents 99 22.00
Media 91 20.22
Total 450 100.00
Source; Field Survey.

Note: Multiple Responses.
TABLE-2: AWARENESS OF RURAL INVESTORS TOWARDS INVESTMENT
AVENUES
Investment Sources Number of Response Percentage
Banks 450 100.00
Insurance 230 51.11
Post Office 450 100.00
Mutual Funds 98 21.78
Shares 75 16.67
Pension Funds 77 17.11
Total 450 100.00

Generally, the rural people are both 51.11 per cent respondents aware towards
illiterate and low educated as compared to urban insurance sector. Out of total, only 21.78 per
and as a result they have less knowledge of cent aware mutual funds, 16.67 per cent aware
investments in shares, mutual funds and pension shares and 17.11 per cent aware pension funds.
funds. Table 2 clears that all respondents aware This shows that majority of investors lack
of investment in banks and postal savings and awareness towards mutual funds, shares and
‐ 233 ‐


pension funds. This signifies the need of bank deposits and postal savings due to quality
creating awareness in rural investors towards of return on their investments. But the investors
investments in capital markets as more than 60 invest in insurance sector to cover against the
per cent of Indian population belongs to rural risk but not to earn income. It is revealed from
India. Table 3 that rural investors have given top
priority for postal savings as compared to banks,
The pattern of investments and their insurance and capital market. Out of total
priorities depend on the perceptions and response, 77.78 per cent invested in post office,
attitudes of investors towards risk and return 46.67 per cent invested in banks and 34.44 per
and their knowledge. The rural investors usually cent invested in insurance, 10 per cent invested
prefer for investing in domestic animals, gold in mutual funds, 7.11 per cent invested in shares
and silver as compared to institutional and only 6.44 per cent invested in pension
investments due to low awareness and low funds. This indicates the need of highlighting to
literacy. They consider investments in capital the rural investors the significance of
market are unsafe. They prefer to invest more in investments in capital market.
TABLE-3: PATTERN OF INVESTMENTS BY RURAL INVESTORS
Investments Number of Response Percentage
Banks 210 46.67
Insurance 155 34.44
Post Office 350 77.78
Mutual Funds 45 10.00
Shares 32 07.11
Pension Funds 29 6.44
Total 450 100.00

‐ 234 ‐


TABLE -4: REASONS FOR INVESTMENTS BY RURAL INVESTORS
Reasons for Investments Number of Response Percentage
Accretion of Income 411 91.33
Regular Income 325 72.22
Performance of Ceremonial Functions 350 77.78
Education and Health of Family Members 225 50.00
Old age Requirements 90 20.00
Unexpected Contingencies 75 16.67
Total 450 100.00

There are many reasons for per cent and performance of ceremonial
investments in various avenues of functions is the reason for 77.78 per cent,
investments. The investments may be for education and health of family members is the
current income or future income or both. It is reason for 50 per cent, the old age requirement
revealed from Table 4 that accretion of is the reason for 20 per cent and the
income has been the top reason and unexpected contingency is the reason for only
unexpected contingency is the least reason for 16.67 per cent. This clears that the investors
investments. Out of total responses of rural have given high importance for current
investors towards investment of their savings, income and low importance for old age
accretion of income is the reason for 91.33 per requirements and unexpected contingencies.
cent, regular income is the reason for 72.22
TABLE -5: REASONS FOR LOW INTEREST IN INVESTMENTS IN CAPITAL
MARKET
Reasons Number of Response Percentage
Uncertain Income 232 51.56
Procedural Problem 233 51.77
Lack of Expertise 275 61.11
Lack of Information 263 58.44
Lack of Confidence 272 60.44
Total 450 100.00
‐ 235 ‐


Today, many investors are hesitating low interest in investing capital market, the
to invest in institutional investments like uncertain income is the reason for 51.56 per
mutual funds and shares due to uncertain cent, procedural problem is the reason for
earnings on the one side and high risk on the 51.77 per cent, lack of expertise is the reason
other side. Further, they have less confidence for 61.11 per cent, lack of information is the
in return of principle and income their on. It is reason for 58.44 per cent and lack of
revealed from Table 5 that out of total number confidence is the reason for 60.44 per cent of
of respondents having different reasons for respondents.
TABLE-6: AGE AND LEVEL OF AWARENESS OF RESPONDENTS
Level of Age Group

Awareness
21-30 31-40 41-50 Total
High 97(44.09) 72(32.73) 51(23.18) 220(100.00)

(52.43) (47.37) (45.13) (48.89)
Low 88(38.26) 80(34.78) 62(26.96) 230(100.00)

(47.57) (52.63) (54.87) (51.11)
Total 185(41.11) 152(33.78) 113(25.11) 450(100.00)

(100.00) (100.00) (100.00) (100.00)

Figures in parentheses to the right and below the figures indicate percentages to the respective row
and column totals.
Table 6 shows the relationship the calculated is higher than the table value of
between age of respondents and level of X2, it is inferred that there has direct
awareness towards institutional investments. relationship between age and level of
The table value of X2 at 5 per cent level of awareness of respondents towards various
significance for 2 degree of freedom is 5.991 investments.
and the calculated value of X2 is 6.286. Since
‐ 236 ‐


TABLE-7: SEX AND LEVEL OF AWARENESS OF RESPONDENTS
Level of Awareness Sex of Respondents
Male Female Total
High 175(79.55) 45(20.45) 220(100.00)

(59.32) (66.67) (48.89)
Low 120(52.17) 90(47.83) 230(100.00)

(40.68) (66.67) (51.11)
Total 295(65.56) 135(34.44) 450(100.00)

(100.00) (100.00) (100.00)

and column totals.
Table 7 analyzes the relationship X2 is 25.747. Since the calculated is higher
between level of awareness and sex of than the table value of X2, it is inferred that
respondents. The table value of X2 at 5 per that there has direct relationship between sex
cent level of significance for 1 degree of and level of awareness of respondents towards
freedom is 3.841 and the calculated value of various investment avenues.
TABLE-8: ANNUAL INCOME AND LEVEL OF AWARENESS OF RESPONDENTS.
Level of Annual Income of Respondents

Awareness
Less than Rs1Lakh to Above Rs2Lakh Total
Rs1Lakh Rs2Lakh
High 52(23.64) 73(33.18) 95(43.18) 220(100.00)

(36.88) (48.34) (60.13) (48.89)
Low 89(38.70) 78(33.91) 63(27.39) 230(100.00)

(63.12) (51.66) (39.87) (51.11)
Total 141(31.33) 151(33.56) 158(35.11) 450(100.00)

(100.00) (100.00) (100.00) (100.00)
‐ 237 ‐


and column totals.
Table 8 indicates level of income and and the calculated value of X2 is 16.436. As
level of awareness towards institutional the calculated value is higher than the table
investments among sample respondents. The value of X2, it is inferred that there has direct
table value of X2 at 5 per cent level of relationship between income and their level of
significance for 2 degree of freedom is 5.991 awareness of respondents.
TABLE-9: TYPE OF OCCUPATION AND LEVEL OF AWARENESS OF RESPONDENTS
Level of Type of Occupation

Awareness
Landless Farmers Businessmen Employees Total
labours
High 42(19.09) 65(29.55) 62(28.18) 51(23.18) 220(100.00)

(33.60) (43.62) (57.94) (73.91) (48.89)
Low 83(36.09) 84(36.52) 45(19.57) 18(07.82) 230(100.00)

(66.40) (56.38) (42.06) (26.09) (51.11)
Total 125(27.78) 149(33.11) 107(23.78) 69(15.33) 450(100.00)

(100.00) (100.00) (100.00) (100.00) (100.00)

and column totals.
Table 9 shows information relating Since the calculated value is higher than the
level of awareness and type of occupation of table value of X2, there has direct relationship
respondents in the study area. It is revealed between level of awareness towards
that the calculated value of X2 is 33.774 and institutional investments and type of
the table value of X2 at 5 per cent level of occupation of sample investors.
significance for 3 degree of freedom is 7.815.
‐ 238 ‐


TABLE-10: FAMILY SYSTEM AND LEVEL OF AWARENESS OF RESPONDENTS
Level of Awareness Family System
Individual Joint Total
High 118(53.64) 102(46.36) 220(100.00)

(47.20) (51.00) (48.89)
Low 132(57.39) 98(42.61) 230(100.00)

(52.80) (49.00) (51.11)
Total 250(55.56) 200(44.44) 450(100.00)

(100.00) (100.00) (100.00)

and column totals.
Table 10 highlights information calculated value of X2is less than the table
relating to level of awareness and type of value at 5 per cent level of significance (i.e.
family system of sample respondents. It is X2 is 0.5761 and the table value of X2 at 5 per
revealed from the calculation of X2 that there cent level of significance for 1 degree of
has no relationship between the type of family freedom is 3.841). Therefore, the null
and the level of awareness towards hypothesis is accepted and the alternative
institutional investments because the hypothesis is rejected.
TABLE-11: MARITAL STATUS AND LEVEL OF AWARENESS OF

RESPONDENTS
Level of Awareness Marital Status
Married Single Total
High 185(84.09) 35(15.91) 220(100.00)
(51.10) (39.77) (48.89)
Low 177(76.96) 53(23.04) 230(100.00)
(48.90) (60.23) (51.11)
Total 362(80.44) 88(19.56) 450(100.00)
(100.00) (100.00) (100.00)

‐ 239 ‐


and column totals.
Table 11 clears the relationship X2 is 3.617. As the calculated value is less
between level of awareness towards than the table value of X2, accept the null
institutional investments and marital status of hypothesis and reject the alternative
sample respondents. The table value of X2 at 5 hypothesis. This clears that marital status has
per cent level of significance for 1 degree of no direct relationship with level of awareness
freedom is 3.841 and the calculated value of towards institutional investments.
TABLE-12: CASTE AND LEVEL OF AWARENESS OF RESPONDENTS
Level of Caste of Investors

Awareness
SC ST Others Total
High 42(19.09) 18(08.18) 160(73.73) 220(100.00)

(53.16) (46.15) (48.20) (48.89)
Low 37(16.09) 21(09.13) 172(74.78) 230(100.00)

(46.84) (53.85) (51.80) (51.11)
Total 79(17.55) 39(08.67) 332(73.78) 450(100.00)

(100.00) (100.00) (100.00) (100.00)

and column totals.
Table 12 shows the relation between higher than the calculated value of X2, accept
the awareness level towards investments and the null hypothesis and reject the alternative
caste of sample respondents. The calculated hypothesis. This clears that there has no direct
value of X2 is 1.286 and the table value of X2 relationship between the level of awareness
at 5 per cent level of significance for 2 degree and caste of respondents in the study area.
of freedom is 5.991. Since the table value is
‐ 240 ‐


TABLE-13: LEVEL OF EDUCATION AND LEVEL OF AWARENESS OF RESPONDENTS
Level of Level of Education

Awareness
1-7th 8-10th PUC Degree Total
High 89(40.45) 67(30.45) 43(19.55) 21(09.55) 220(100.00)

(45.41) (47.18) (54.43) (63.64) (48.89)
Low 107(46.52) 75(32.62) 36(15.64) 12(05.22) 230(100.00)

(54.59) (52.82) (45.57) (36.36) (51.11)
Total 196(43.56) 142(31.56) 79(17.55) 33(07.33) 450(100.00)

(100.00) (100.00) (100.00) (100.00) (100.00)

and column totals.
Table 13 provides the information official sources in bringing awareness
relating level of awareness towards regarding institutional investments.
institutional investments and level of
education of sample respondents. It is clear • Investors have given least importance
from the calculation of X2 that there has no for their old age requirements and
direct relation between the level of awareness unexpected contingencies.
and level of education in respondents. The
calculated value of X2 is 4.958 and the table • Lack of confidence and lack of
value of X2 at 5 per cent level of significance expertise are the main reasons for low
for 3 degree of freedom is 7.815. Since the interest in investors towards
table value is higher than the calculated value institutional investments.
of X2, accept the null hypothesis and reject the
alternative hypothesis. • There has direct relation between age
of respondents and level of awareness
MAJOR FINDINGS towards various investments.
Following are the major findings of the • There has direct relationship between
study: sex of respondents and level of
awareness towards various investment
• Postal savings till hold higher priority
avenues.
among institutional investments in
rural area. • There has direct relation between
income of respondents and their level
• Personal sources of information have
of awareness.
played greater role as compared to
‐ 241 ‐


• There has direct relationship between urban and no spread to rural areas.
level of awareness towards Therefore, it is essential to open their
institutional investments and type of offices in rural area as around 70 per cent
occupation of sample investors. population are residing.
• There has no direct relationship • IMPROVEMENT IN ADULT

between type of family and level of EDUCATION
awareness towards institutional
investments. The Government has been investing in
reducing illiteracy through adult education
• Marital status, caste and level of programme. However, the implementation
education have no direct relation with of adult education programme is not only
the level of awareness towards poor but also the contents of education are
institutional investments. low. Therefore, it is essential to add
investment education in of adult
SUGGESTIONS education.
• AWARENESS PROGRAMMES
• INVOLVEMENT OF NGOS AND
GOVERNMENT AGENCIES
The percentage of literacy in India among
rural population is low as compared to
The NGOs and Government agencies may
urban. Therefore, majority of rural people
try to educate the rural population
have insufficient knowledge towards the
regarding the benefits of institutional
benefits of institutional investments.
investments.
Therefore, it is necessary to bring
awareness in rural people through various
rural means of promotions. • ENTRY OF INSURANCE
COMPANIES
• INVEST FOR OLD AGE AND
The insurance companies of public and
UNEXPECTED CONTINGENCIES
private sectors have concentrated more on
urban and semi-urban areas and they
The culture of India has moving towards
thought less to cover the rural population
western due to the advancement in
which accounts for around 70 per cent of
information technology and the joint
total population. Therefore, insurance
family system has been loosing its
companies spread their branch network to
significance. It is very difficult for old age
rural India to provide risk coverage to the
people to lead their life without sufficient
life and assets.
savings. Hence, they should invest for old
age and unexpected requirements.
CONCLUSION
• OPENING OF STOCK BROKING The savings and investments are the
OFFICES part and parcel of every citizen’s day to day
life and it is very difficult for one to meet
The stock brokers have concentrated on expected and unexpected expenditures without
urban area and they rarely spread to semi- proper amount of savings and their judicious
‐ 242 ‐


investments. No doubt, there are many Coimbatore City, SMART, Journal of
avenues of investments for investors to invest Business Management, 4(1):47-58.
their savings in the present scenario but these
avenues have concentrated more on urban • Sofia Jasmeen. 2009. Investment
areas. In view of this, the rural investors are Choice of Individual Investors, The
not coming forward to invest their savings Indian Journal of Commerce,
capital market due to lack of knowledge to 62(4):58-63.
manage their investment portfolio to
maximize their return and to minimize risk. • Saravana Kumar. 2010. An Analysis of
Education through various awareness schemes Investors Preference towards Equity
and entry of institutional agencies to rural area and Derivatives, The Indian Journal of
can help the rural folk to improve their Commerce, 63(3):71-78.
financial health and standard of livings.
Therefore, the Government and non • Sharnma,Vivek. Hur,Jungshik and
government agencies may take care in Lee,Hawai. 2008. Glamour versus
bringing awareness and educating the rural Value: Trading Behaviour of
population to save some portion of their Institutional and Individual Investors,
earnings and invest judiciously. The Journal of Financial Research,
31(1):65-84.
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• Hiryappa, B. 2008. Investment
• Business Line, Daily, 11-12-2010. Management, New Age International
Publishers, Bangalore.
• Madusudhan Karnakaran. 2001.
Investment Behavior of Household
Sector A Study of A Rural Block of
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Commerce, 54(12):58-65.
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Investment Pattern of Investment
Pattern and Awareness of Salaried
Class Investors in Niligiris District,
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IJMMR Volume 2, Issue 4 (April, 2011) ISSN 2229-6883

DR. KIRTI AGARWAL, YOGESH BHARDWAJ

Sri Krishna International Research & Educational Consortium

Sri Krishna International Research & Educational Consortium

This research proposed a framework of strategic alliance analysis for evaluating

KEYWORDS: Business Performance; Resources-Based Strategic Alliances,

INTRODUCTION (IDB), significant growth is expected in

Financial performance= f (financial FIGURE 4 HERE

z INDEPENDENT VARIABLES: Table 6 shows the standardized regression

4. Results It is evident that the higher levels of

FIGURE 1 THE CONCEPT MODEL

FIGURE 2. FINANCIAL PERFORMANCE

ε1 Liabilities/assets ratio

FIGURE 3 THE SEM RESULTS FOR FINANCIAL PERFORMANCE

0.148 Motivation Financial

TABLE 1. CHALLENGES AND CONCEPTUALIZATIONS OF MARKETING

Marketing Based Strategic Alliances

TABLE 2. ADVANTAGES OF LEARNING BASED STRATEGIC ALLIANCES

Learning Based Strategic Alliances

Industry Samples of Companies

Total Samples 152

TABLE 4. MEASURES OF BUSINESS PERFORMANCE

variables Indicator Measures Scale

Business Financial (1) financial structure. Financial

(3) operating capability

(4) profitability capability

(5) cash flow

TABLE 5. MEASURES OF STRATEGIC ALLIANCE MOTIVATION

variables Indicator Measures Scale

Motivation of Marketing based (1)share market operation risk 7 point

Resource based (1)build economic scale

Learning based (1)reduce R&D cost

TABLE 6. STANDARDIZED REGRESSION WEIGHTS AND P-VALUE OF THE

Path Standardized Regression Weight p

Marketing-Based Alliance Motivation 0.319** 0.007

Resource-Based Alliance Motivation 0.148** 0.005

Learning-Based Alliance Motivation 0.507** 0.003

Alliance Motivation 0.226** 0.002

* p < 0.05 ; ** p < 0.01 ; *** p < 0.001

CUSTOMER AWARENESS ANALYSIS OF

*Sathyabama University Chennai India

KEYWORDS: liberalization, life insurance companies, processing.

INTRODUCTION a deep influence in the insurance market

An Article by Sanjay Chakraborthy Insurance Regulatory and

DISTINGUISHED AND REMARKABLE EVENTS IN THE INDIAN INSURANCE

TABLE NO: 3 HISTORY OF INDIAN INSURANCE MARKET (1850-2007)

Source: India 2010 A Lloyd’s View (2007)

TABLE NO: 4 PAIRED SAMPLES STATISTICS

Mean N Std. Deviation Std. Error Mean

TABLE NO: 6 PAIRED SAMPLES TEST

TABLE NO: 7 PAIRED SAMPLES STATISTICS

Mean N Std. Deviation Std. Error Mean

TABLE NO: 8 PAIRED SAMPLES CORRELATIONS

TABLE NO: 9 PAIRED SAMPLES TEST

The above table shows the paired sample t BEHAVIOURAL COMPARISON OF

Mean N Std. Deviation Std. Error Mean

TABLE NO: 11 PAIRED SAMPLES CORRELATIONS

TABLE NO: 12 PAIRED SAMPLES TEST

The above table shows the paired sample t AWARENESS ON PRIVATE

N Mean Std. Deviation Std. Error Mean

TABLE NO: 14 ONE-SAMPLE TEST

N Mean Std. Deviation Minimum Maximum

* p < 0.05 ; p < 0.01 ; * p < 0.001