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FACTOR IMPACT ON SIX SIGMA SUCCESSP.Sujendra Swami & V.M .Prasad Abstract For any new initiation for every organization there exist some success factors. Apart from all factors some are the positive influencing factors and some are negatively influenced factors. Sixsigma is a success mantra for all corporate companies to assure and provide quality products to their customers in the market. Nowadays all the companies are focusing on quality implementation with the help of strong s/w and R&D departments they have with them. One of the most critical and costly adapting process, but all major corporate of software and manufacturing companies are adapting to improve product quality and improve customer satisfaction to retain more world class companies as their clients, especially in the field of banking, services and production. Depending on the nature of the organization, products and services the companies adapting new quality change process where they must need to identify the key success factors for easy implementation of six sigma. In this paper we discuss about six sigma definitions, various success factors and there mode of impact (Positive or negative) on success departments wise, function wise etc. Keywords: Leadership, Strategic plan, Belt holders, competitor. Introduction These are the most frequent questions being asked by the potential Six Sigma followers. But, there is no easy answer to each one of them. Simply because driving a business toward Six Sigma is not a one-time effort; it is about producing products and services that continue to meet customer and market requirements. This requires organizational agility and constant vigilance to changes in the market place. Thus, the real challenge with Six Sigma is getting to the point where one can meaningfully measure a business' current performance against dynamic customer requirements while developing the internal organizational abilities to response to changing marketplace conditions. Doing this well means aligning organizational components inside the company (leadership, strategy, people, and technology) to give Six Sigma efforts the momentum and staying power they need to succeed. Objectives of the study - To know the most critical success factor for six-sigma implementation. Find out the importance of various factors in quality implementation. To know the contribution of various departments for six sigma implementation. To know the mode of factors impact for six sigma success. ISSN 0975 – 7953 July - CAMS Journal of Business Studies and Research September 7 Research Methodology Data collection made through electronically (Through E-mails) by a short questionnaire. After collecting the primary data, the interpretation done by using SPSS 17.0, relevant statistical tools are used to check the efficiency of the results. Period of the study The study conducted in November- January 2010 at six sigma completed/ implemented organizations in Hyderabad city. Sample &Sample size Sample Respondents are the belt holders (black belt, Green belt, Yellow belt) in six sigma form various industries in Hyderabad & Secunderabad city. Questionnaires distributed 60(52 received) for above said respondents with in time period of 60 days. The Study This paper is an outcome of an analysis of responses received from 52 respondents who include 24 black belts, 10 green belts and 18 yellow belt working in different industries in Hyderabad & Secunderabad. They express their views about concept of six sigma, success factors such as the leadership of the top management, commitment to high quality, well-developed strategic planning system, training systems, voice of the customer and overall customer satisfaction etc in six sigma department-wise and function-wise of an organization. Among the issues that have been focused include how these are contributing to the success rate of quality and the interrelationships among these factors. At last we check the correlation and Regression of some success factors like Literature Review of Six Sigma Motorola’s Bill Smith initiated Six Sigma almost two and a half decades ago building on the philosophy, Principles, and methods of Deming’s Total Quality Management (TQM). Since then, thousands of organizations have become ‘Six Sigma companies’ by adopting specific training and project management practices. With Six Sigma’s industry-based origins, it becomes important to assess the state of the related academic contributions now that the associated field of study is maturing. Definition ‘Six Sigma is an organized and systematic method for strategic process improvement and new Product and service development that relies on statistical methods and the scientific method to make dramatic reductions in customer defined defect rates.’ OR CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 8 Those authors further described that ‘the name Six Sigma suggests a goal’ of less than 3.4 defects per million opportunities (DPMO) for every process. However, they did not include this principle in the definition because, ‘Six Sigma advocates establishing goals based on customer requirements’. Methodology Six Sigma has two key methodologies: DMAIC and DMADV both inspired by Deming's2 Plan-Do-Check-Act Cycle. DMAIC is used to improve an existing business process; DMADV is used to create new product or process designs. DMAIC Define process improvement goals that are consistent with customer demands and the enterprise strategy. Measure key aspects of the current process and collect relevant data. Analyze the data to verify cause-and-effect relationships. Determine what the relationships are, and attempt to ensure that all factors have been considered. Improve or optimize the process based upon data analysis using techniques like Experiments. Control to ensure that any deviations from target are corrected before they result in defects. Set up pilot runs to establish process capability, move on to production, set up control mechanisms and continuously monitor the process. Executive Leadership includes the CEO and other members of top management. They are responsible for setting up a vision for Six Sigma implementation. They also empower the other role holders with the freedom and resources to explore new ideas for breakthrough improvements. Champions are responsible for Six Sigma implementation across the organization in an integrated manner. The Executive Leadership draws them from upper management. Champions also act as mentors to Black Belts. Green Belts are the employees who take up Six Sigma implementation along with their other job responsibilities. They operate under the guidance of Black Belts. Black Belts operate under Master Black Belts to apply Six Sigma methodology to specific projects. They devote 100% of their time to Six Sigma. They primarily focus on Six Sigma project execution, whereas Champions and Master Black Belts focus on identifying projects/functions for Six Sigma. Master Black Belts, identified by champions, act as in-house coaches on Six Sigma. They devote 100% of their time to Six Sigma. They assist champions and guide Black Belts and Green Belts. Apart from statistical tasks, their time is spent on ensuring consistent application of Six Sigma across various functions and departments. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 9 Tsung-Ling Chang. Based on Chang’s research findings.314 1 5 Chi-Square Test CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 10 .. Descriptive Statistics N 52 Mean 3. The above figure indicate that performance improvement starts with internal quality process which includes production quality. Process Quality Associates has developed a Six Sigma implementation framework by Gravin. one doctoral candidate. performed a research survey which identifies ten Critical Success Factors for implementing a Six Sigma quality system.13 Std. Deviation Minimum Maximum 1. However. Statistical Analysis of the study 1) Leadership & work culture of top Management. which all these leads organization performance improvement. HPO: High Performance organizations Figure 1: Six sigma High performance factors adapted from Garvin in 2003 There is limited literature to reveal the success factors for Six Sigma implementation.LSS: Lean Six sigma. process quality etc. 19 Value df Asymp. the significance value is less than 0.43 at 4 degrees of freedom.03 Inference: The obtain chi-square value is equals 12.Sig (2. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 11 .002 Inference: The obtain chi-square value is equals 11.sided) .Sig (2.603 df 4 Asymp. 2) Implementation of Effective process management system Test Statistics Effective process Management.750 4 0. the significance value is less than 0.Sig (2.05suggest that there is significant importance for Effective process management system is one of the success factor for six sigma.750 at 4 degrees of freedom. the significance value is less than 0.438 df 4 Asymp. 4) Importance of statistical tools Training of Employees.05suggest that there is significant important for strategic planning system is one of the success factor for six sigma.sided) Inference: The obtain chi-square value is equals 11.sided) 0.05suggest that there is significant importance for Leadership & work culture of top Management while implementing six sigma. 3) Well-developed strategic planning system Chi-Square Test strategic planning Pearson Chi-square Value 11.Leadership Value commitment Pearson Chi-square 12. Pearson Chi-square 11.063 at 4 degrees of freedom. 05suggest that there is no significant important for statistical training to employees and six sigma success rate. 5) Overall customer Satisfaction Descriptive Statistics Std. N 52 Test Statistics Stats training Pearson Chi-square Value 7.sided) .405 Minimum Maximum 1 5 Inference: The obtain chi-square value is equals 7.375 df 4 Asymp.37 at 4 degrees of freedom.sided) CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 12 . the significance value is greater than 0.244 Minimum Maximum 1 5 Test Statistics.000 customer Value df Asymp. N 52 Mean 3.062 4 .Sig (2.Sig (2.117 Mean 3. Overall satisfaction Pearson Chi-square 27.Descriptive Statistics Std.25 Deviation 1.34 Deviation 1. Sig (2.06 at 4 degrees of freedom.Sig (2.179 Component 3 .05suggest that there is a significant relation that implementation of correct VOC is an absolute success factor for six sigma.Inference: The obtain chi-square value is equals27. the significance value is greater than 0.679 2 .003 Inference: The obtain chi-square value is equals 14.05suggest that there is a significant relation that HR department is must fully integrate with six sigma process is one major success factor. the significance value is less than 0.063 df 4 Asymp.250 df 3 Asymp. the significance value is greater than 0.sided) . Factor Analysis Rotated Component Matrix Factor 1 Leadership . 6) Implementation of correct VOC Test Statistics. Correct VoC Pearson Chi-square Value 37. 7) Fully integrated with HR department where HR directly/indirectly related with Six sigma.000 Inference: The obtain chi-square value is equals37.06 at 4 degrees of freedom. Chi-Square Test Integration with HR Pearson Chi-square Value 14.05suggest that there is a significant relation that customer satisfaction is one of the major success factor for six sigma.179 .sided) .179 July 4 CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 13 .250 at 3 degrees of freedom. 183 -.435 .635 .476 .358 -.-287 -.521 .-487 -.147 Inference: Analysis by factor wise factor analysis the observation indicate that most successful factors for six sigma implementation is Strategic planning before quality implementation.411 .111 .467 -. Dependent Variable Y= Belt Holders History (BHH) Independent Variable X1 = BH Experience in Years (Emp.711 .586 .Effective process Strategic plan Statistical Tools Customer Satisfaction Correct VOC HR Integration .576 .258 -.519 .348 .Exp) X2 = Number of customers demands for quality by every 10 clients (CuDq) CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 14 . Effective process are most important factors from among 7 tested factors in the study Gap Analysis Various Factors Dependency for Six Sigma Success.651 -.571 .478 -. Implementation of correct VoC ( Voice of the Customer) .143 .115 . Leadership Commitment and work culture.596 . 101 .187 -.335 .150 .095 -.045 Comptr -.187 .059 .048 Emp.002 0.213 1 . Regression: Model Summary Model R R Square Adjusted R Square Std.Error CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 15 . (ImplTime) X6 = Number of Belt Holders Correlation BHH BHH Emp.045 1 -.Time 0.026 -0.230 -.Exp -0.026 Impl.020 1 -.048 -.045 0.335 -.Time Comptr.020 .095 -.230 .045 1 Inference: First let us check the correlation of all variables with each other. Impl.213 .002 EmpEdu .059 0. 1 -0. 5=High level of activity) X 4 = BH Education (EmpEdu) ( 1=Technical and 2=Non Technical) X5 =Time of project implementation for Maximum 5 years period.Exp CuWSs EmpEdu.X3 =Competitor Activities on 5 point scale (Comptr.150 -.151 .101 1 -. The above correlation table is indicate that the values from 0 to 1( -ve and +ve).) (1=Low.151 CuDq . By observing all columns the columns like Employee experience and competitor activity are negatively correlated and all other are positively correlated with each other which indicate the all elements are correlated with each other some are highly and some are nearly correlated. 076 -.421 Std.723 14.779 .668 .003a Unstandardized Coefficients Square Coefficients Squares Model Regression 1 (Constant) Residual B 95.919 . CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 16 . Time. The R2 value is 0.433 -. Error 5 11.835 3.540 -. . a.37.145 t 1.1 .269 . Comptr.465 .156 -.Edu.589 a. ANOVAb Model Sum of df Mean Standardized F .054 .283 .010 1. the ANOVA table last column indicate that 93% significance level. CuDq.Edu Time Comptr.385 .171 2608.241 Sig..487 .Exp CuDq.259 Sig. Emp.720 2513. Dependent Variable: No of BH Before we use the equation we need look at the statistical significance of the model and R2 Value.105 8.Exp.735 -1.748 Beta 19.10 (confidence level 90%). Only employee education and experience are statistically significant in this model.880 -. . Emp.089 .041 TotalEmp.246 1.975 . Emp.192a .811 73.252 . we also note that then t-teats for significance of individual independent variable indicate that the significance level 0.630 .598 34 . Predictors: (Constant).213 .604 39 .037 -. But.41+0.54(Time)-0. By strictly speaking only two variables employee experience and time of implementation have above 90% confidence. and to resolve customer concerns. Study Analysis These are the most frequent questions being asked by the potential Six Sigma followers. the real challenge with Six Sigma is getting to the point where one can meaningfully measure a business' current performance against dynamic customer requirements while developing the internal organizational abilities to response to changing marketplace conditions Top management should act as key driver in continuous improvements. The necessary human & financial resources must be allocated to support the implementation of business action plans. it is about producing products and services that continue to meet customer and market requirements.4( Employee education)+0.However for the time being we shall use the model as it is and try to apply it for decision making. Effective human resource management system has a positive impact on Six Sigma QMS success.421(Competitor Activity). and establish an environment for supporting organizational & employee learning.735(Customer demand for quality)-1. Simply because driving a business toward Six Sigma is not a one-time effort. to receive customer feedback. The education and training system should provide continuous courses to employees for equipping them with quality-related knowledge and problem-solving skills. Thus.171(Belt holder Experience)+0. Belt holder History= 4. communicate to employees about organizational goals. Processes need to be established in order to monitor customer satisfaction levels. Various methods are developed to facilitate the communication between the CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 17 . A job advancement system is important to human resource development. The real use of the regression model would be to try and predict weather belt holder back ground history will effect on six sigma success rate or not. A well-developed strategic planning system must translate into executable action plans with related performance measurements. The equation we use have obtained means in effect that the success rate of six sigma will depend on employee education and customer demand for quality and the time of six sigma implementation and also negative relationship between employee education and competitor activity. there is no easy answer to each one of them. At the same time by observing of ‘t’ values coefficients of variables employee education & competitor activity are negative which lead wrong conclusion. This requires organizational agility and constant vigilance to changes in the marketplace. organization and its employees. employees need to receive their performance feedback from their supervisors. operations process. Supplier improvement via SPC application workshops. To promptly improve performance. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 18 . - Conclusion The entire study conclude that the success factors for six sigma is like all general management success factors excluding some important areas like metrics and tools for training because of the Implementation of six sigma is somewhat tough process to achieve desired results in time.Most important factor for six sigma success which is identified by factor analysis is strategic planning of the process which is in the form of well developed and strategically balanced the results of any tough process obviously success. Customer satisfaction in the view of six sigma success play a vital role where feedback for new quality change leads success side or not and in\implementation of correct VoC (voice of the customer) which leads high customer satisfaction rate. Another success factor is effective process management system in all aspects like. The department wise performance should measured independently where we consider the epicenter for all departments HR which is played a major role to integrate all these sub factors into one major success factor by contributing intellectual assets for any success in the organization. 6(2):178–183. IEEE Transactions on Semiconductor Manufacturing. . customer feedback collection process. Ackermann C(1997). In the part of Statistical tool training to the employees for successful implementation of six sigma is not necessary for all. References: 1. Discussion of Results Leadership and work culture is one of the success factor for six sigma until the organization not follow better leadership tactics and not inviting changes in work culture every new initiation goes into vain. the study revealed that the training will be depend on the educational background and analytical skills of various employee Where if they are form technical background they need little bit of guidance where people from social sciences background need full fledged training about statistical tools. employee suggestion regarding new system pros & cons should consider for success of any process in the organizations. The evolution of Six Sigma.2. Organizations are turning to knowledge management initiatives and technologies to leverage their knowledge resources.Syed Aktharsha Abstract Knowledge is an important organizational resource. Hoerl R.(2003) Linking Six Sigma with QS-9000. Fabia J(1998). 4. knowledge can be articulated. it can also be combined and recombined to generate new knowledge. and communicating knowledge of employees so that other employees may make use of it to be more effective and productive in their work (Kankanhalli. 2005). 9. 10. Free Press: New 3. Hahn G. Behara R. Motorola. & Wei. 2005). Quality and Reliability Engineering International Vol(14):301–311. Doganaksoy N. The strategic management of organizational knowledge is a key factor that can help organizations to sustain competitive advantage in volatile environments. Knowledge management can be defined as a systemic and organizationally specified process for acquiring. For all of these reasons. and re-contextualized to yield options for the future. Tan. 8. 7. This article attempts to explain the theoretical framework of knowledge and knowledge management in terms of knowledge characteristics. Fontenot G. stored. Hydrocarbon Processing :15-17. Quality Progress : 73–76. Munro R. Pande P. Monitoring supplier quality at ppm levels. McGraw-Hill: New York. 12(3):317–326. 5. York. Does R. Tacit and Explicit Knowledge. 6. Quality Engineering 2003. Six Sigma in customer satisfaction. Cavanaugh R(2002) The Six Sigma Way: How GE. De Mast J. IEEE Transactions on Semiconductor Manufacturing Pg:189–195. shared. Ackermann C. organizing. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 19 . Why should statisticians pay attention to Six Sigma? Quality Progress . Quality Progress Vol(5):47–53. Not only can knowledge be replenished in use. Snee R(1999). 32(9):100–103. and Other Top Companies are Honing Their Performance. Unlike other inert organizational resources. knowledge has the potential to be applied across time and space to yield increasing returns (Garud & Kumaraswamy. Gresham A(1998). the application of existing knowledge has the potential to generate new knowledge. Kane L(1998). Knowledge Management. Knowledge categories.. The quest for Six Sigma. Key words: Knowledge. van den Heuvel E(2000). Garvin DA(1988) Managing Quality: The Strategic and Competitive Edge. Knowledge management is also important in inter organizational relationships. Knowledge Management U. Schippers W. Knowledge value level and Knowledge Needs identification. Neuman R. Once created. Steps and strategies in process improvement. This knowledge then becomes information again once it is articulated or communicated to others in the form of text. reusable. knowledge is seldom complete outside of an individual. knowledge is the residue of thinking. Gosain. and privileged) information sharing. and networks. interpretation. or other means. & El Sawy. routines. market knowledge creation. and new knowledge is created at the boundaries of old. and sometimes in document repositories. Although knowledge cannot originate outside the heads of individuals. Knowledge management is also important in inter organizational relationships. This definition and CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 20 . knowledge circulates through communities in many ways. Inter organizational relationships have been recognized to provide two distinct potential benefits: short term operational efficiency and longer-term new knowledge creation. and accumulating resource of value to the organization when applied in the production of products and services. Knowledge is what a knower knows. ultimately. Supply chain partners are engaging in interlinked processes that enable rich (broad-ranging. intuition. 2005). Knowledge Characteristics Six characteristics of knowledge can distinguish it from information: knowledge is a human act. spoken or written words. reflection. For example. computer output. as such. and creativity. highquality. and building information technology infrastructures that allow them to process information obtained from their partners to create new knowledge (Malhotra. it can be argued that knowledge can be represented in and often embedded in organizational processes. However. Information becomes knowledge once it is processed in the mind of an individual. context. The need for a knower in knowledge existence raises the question as to how knowledge can exist outside the heads of individuals. knowledge is created in the present moment. Knowledge is defined as information combined with experience. the need for continual value innovation is driving supply chains to evolve from a pure transactional focus to leveraging inter organizational partnerships for sharing information and. be stored in computers: it can only be stored in the human brain. knowledge belongs to communities. there is no knowledge without someone knowing it. Knowledge cannot.Introduction Knowledge is a renewable. Davenport and Prusak (1998) define CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 21 . Wasko & Faraj. and form utility to the data. structures. expertise. the information serves to inform or reduce uncertainty within the problem domain. Today. unless adaptability of people and processes (higher order learning) is built into the institutional mechanisms themselves. It is also the most difficult of content types to manage. 2001). Ryu. 2005. but also have the ability to integrate and frame the information within the context of their experience. Sambamurthy & Subramani. although for most practical purposes these differences are of no interest at all. time. summarized. 2005. any discussion of knowledge quickly leads to the issue of how knowledge is defined.these characteristics of knowledge are based on current research (e. A pragmatic definition defines the topic as the most valuable form of content in a continuum starting at data.. In doing so. & Rao. and judgment. and technology. Poston & Speier. Chaudhury. and the greatest dependence on a specific situation or context. Real differences between information and knowledge do exist. institutionalized knowledge often inhibits competition in a dynamic context. Kim. Some knowledge is incorporated in organizational artifacts like processes. Business systems are loaded with information. or corrected in order to add value. data is classified. the greatest relevance to decisions and actions. but without knowledge. 2005. and in turn allows for further interaction with experience. the most human contribution. that is. Typically. 2005. This conversion is relatively mechanical and has long been facilitated by storage. because it originates and is applied in the minds of human beings. Therefore. Therefore. in an organizational context. People who are knowledgeable not only have information. and communication technologies. In doing so. and become information within a certain context. expertise. These technologies add place. information is united with the context. However. not electronic knowledge.g. transferred. processing. Information technology implications are concerned with the argument that computers can only manipulate electronic information. and ending at knowledge. Knowledge has the highest value. it only has utility within the context (Grover & Davenport. encompassing information. Our concern with distinctions between information and knowledge is based on real differences as well as technology implications. all new knowledge stems from people. and judgment. they can create new information that expands the state of possibilities. 2005). Tanriverdi. isolated measurements. and expert insights that provides a framework for evaluating and incorporating new experiences and information. or technical context. or customers. Knowledge is used to receive information by analyzing. dollars. judgments and expectations. implementing. interpretation. People turn data into information by organizing it into some unit of analysis. that is quite serious. knowledge. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 22 . Knowledge is information combined with experience. If an angle is 40 degrees. Information is an explicit representation of knowledge. contextual information. and that accumulates in an organization through use and combination with employees’ experience. practices. perspectives and concepts. understanding. and evaluating.knowledge as a fluid mix of framed experience. prioritizing. dates. values. In organizations. Humans have knowledge. it often becomes embedded not only in documents or repositories. Information becomes knowledge when it enters the human brain. Knowledge can both be truths and lies. Distinctions are often made between data. numerical characters. knowledge cannot exist outside the heads of individuals in the company. Information is data that are included in a context that makes sense. If a person has 40 degrees Celsius in fever. and by planning. by combining. for example. This knowledge transforms into information again when it is articulated and communicated to others. and symbols. Information is data that make sense. and decision making. Knowledge is a renewable resource that can be used over and over. Information is data endowed with relevance and purpose. and controlling. If a city is located 40 degrees north. Data are independent. information. geographical. and norms. processes. 40 degrees can have different meaning depending on the context. it is in itself no knowledge. we know that it is far south of Norway. because it can be understood correctly. For example. There can be a medical. characters. we know what it looks like. It originates and is applied in the minds of knowers. and reflection. but also in organizational routines. context. and wisdom: Data are letters and numbers without meaning. encompassing information. the greatest relevance to decisions and actions. and it cannot be shared with others like knowledge. is a closed system of unchanging and codifiable rules. the most human contribution. and the greatest dependence on a specific situation or context. starting from data. but also the processes of introspection. While knowledge is mainly sufficiently generalized solutions. the rules are unambiguous. and judgmental abilities. and incompatible with the minds of others without extensive transaction.- Wisdom is knowledge combined with learning. the learning organization has become a term frequently used. Knowledge has the highest value. Therefore. Wisdom is more difficult to explain than knowledge since the levels of context become even more personal and thus. This transaction requires not only a base of knowledge and opportunities for experiences that help create wisdom. wisdom is best thought of as sufficiently generalized approaches and values that can be applied in numerous and varied situations. It is also the most difficult of content types to manage. but we can only create it ourselves. interpretation. The learning organization is similar to knowledge CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 23 . The chess-playing computer called Deep Blue by IBM is frequently cited as an example. the computer only performs a series of computations at extremely high speed. the moves of the pieces are clearly defined. it becomes almost exclusive to our own minds. organizations learn. We can value wisdom in others. because it originates and is applied in the minds of human beings. though complex. the higher-level nature of wisdom renders it more obscure than knowledge. and contemplation. and there is absolute agreement about what it means to win or lose (Davenport & Prusak. retrospection. Wisdom cannot be created like data and information. insights. Deep Blue can compete with the best human players because chess. Deep Blue is no knowledge worker. as a continuum is used. Because the context is so personal. The most valuable form of content in the continuum is knowledge. 1998). While knowledge workers develop knowledge. The size of the board never varies. and ending at knowledge in this book. Grover and Davenport (2001) calls these definitions pragmatic. It has been argued that expert systems using artificial intelligence are able to do knowledge work. organizational learning is taking place at the firm level. Knowledge is thus the result of cognitive processing triggered by the inflow of new stimuli. or other symbolic forms. they must share a certain knowledge base. verbalized. and how they can change the present. Consistent with this view. 2001. As such. 109): Critical to this argument is the fact that knowledge does not exist outside an agent (a knower): it is indelibly shaped by one’s needs as well as one’s initial stock of knowledge. they claim that knowledge can be the basis for information. Learning is a continuous. and structured. Another important implication of this definition of knowledge is CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 24 . words. A learning organization is a place where people are constantly driven to discover what has caused the current situation. becomes data (Alavi & Leidner. While knowledge development is taking place at the individual level. Organizational learning also occurs when the collective memory —including local language. we posit that information is converted to knowledge once it is processed in the mind of individuals and the knowledge becomes information once it is articulated and presented in the form of text. Organizational learning occurs when the firm is able to exploit individual competence in new and innovative ways. A significant implication of this view of knowledge is that for individuals to arrive at the same understanding of data or information. raw data do not exist: the thought or knowledge processes that led to its identification and collection have already influenced even the most elementary piece of data. common history and routines—expands. Knowledge must exist before information can be formulated and before data can be measured to form information.development. To maintain competitive advantage. It is argued that knowledge exists that when articulated. p. Alavi and Leidner (2001) make the case that the hierarchy of data-information-knowledge can be of a different nature. never-ending process of knowledge creation. 2005). rather than information the basis for knowledge. Organizational learning causes growth in the intellectual capital. Specifically. becomes information that when assigned a fixed representation and standard interpretation. an organization’s investment decisions related to knowledge creation are likely to be strategic in nature (Chen & Edgington. graphics. The figure illustrates that it is less the knowledge existing at any given time.that systems designed to support knowledge in organizations may not appear radically different from other forms of information systems. than the organization’s ability to effectively apply the existing knowledge to develop new knowledge. expanding. One of the reasons that knowledge is such a difficult concept is because this process is recursive. and knowledge transfer/realization. Knowledge Value Level It is not difficult to agree with this reasoning. In fact. and often discontinuous. knowledge codification. Figure 1. Knowledge transfer includes the movement of knowledge from its point of generation or codified form to the point of use. Knowledge generation includes all processes involved in the acquisition and development of knowledge. our hierarchy from data via information to Knowledge is not so much a road or direction as it is a way of suggesting resource value levels. Knowledge is a more valuable resource to the organization than information. and to take action that forms the basis for achieving long-term competitive advantage from knowledge-based assets. and information is a more valuable resource than data. According to Grover and Davenport (2001). This process can be generically represented in three sub processes: knowledge generation. This is illustrated in Figure 1. but will be geared toward enabling users to assign meaning to information and to capture some of their knowledge in information and/or data. Value Level of Resources in an organization Strategic Value Knowledge Resources Non-strategic Value Data Resources Knowledge Development Information Resources CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 25 . Knowledge codification involves the conversion of knowledge into accessible and applicable formats. knowledge processes lie somewhere between information and the organization’s source of revenue: its products and services. per se. and the knowledge becomes information once it is articulated and presented to Figure 1. many cycles of generation. In our resource-based perspective of knowledge. When information is assigned a fixed representation and standard interpretation. and structured. This knowledge development causes an increase in knowledge resources. There are alternatives to our perspective of knowledge as a resource in the organization. and that knowledge is applied and develops into new knowledge. where new needs and their fulfillment mechanism could be created. We can also imagine the opposite route. it becomes data and causes an increase in data resources. Knowledge is the result of cognitive processing triggered by the inflow of new stimuli. it becomes information and causes an increase in information resources. These cycles feed on each other. In Figure 1. we can imagine that data are assigned meaning and become information. The knowledge process acts on information to create new information that allows for greater possibilities to fulfill old or possibly new organizational needs. and provide new information that can then facilitate generation of new knowledge. This process is often discontinuous. verbalized. and transfer are concurrently occurring in businesses. Knowledge interacts with information to increase the state space of possibilities. Information is converted to knowledge once it is processed in the mind of individuals. Identification of Knowledge Needs CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 26 . When the new knowledge is articulated. that information is understood and interpreted by individuals and becomes knowledge. codification. they must share the same knowledge framework. data is raw numbers and facts. information is processed data. . Knowledge develops in the minds of individuals. and knowledge is information combined with human thoughts. A significant implication of this view of knowledge is that for individuals to arrive at the same understanding of information.Short term value Long term value According to Grover and Davenport (2001). Value levels of resources in the organization Strategic value Non-strategic value Shortterm value Long-term value others. Knowledge needs associated with means include historical records and analysis of legal client practice. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 27 . For a lawyer. as illustrated in Figure 2: Problem decision analysis. such as client documents and client funds. Hence. the problem can be an insurance claim by a client. or individual case level.To classify knowledge as a resource. - Critical success factors. Success can be at firm level. critical success factors at the individual case level can be quality of legal advice and service level of advice delivery. Knowledge needs associated with winning a case includes legal. For a lawyer. the client expectation might be that she or he wins the case. Critical knowledge in this case includes legal knowledge as well as procedural knowledge. procedural. This method aims at identifying and specifying problems that knowledge workers have. the decision can be how to approach the insurance company. This method aims at identifying and specifying external demands and expectations to goods and services from the firm. The end is winning the case. identification of knowledge needs in an organization is important. decisions they have to make. there has to be a need for that knowledge. and the knowledge need can be outcomes of similar cases handled by the law firm. - Ends means analysis. This method aims at identifying and specifying what factors cause success. individual level. and analytical knowledge of successful cases in the past. solutions they can find. Three supplementary methods exist to identify needs for knowledge. For a lawyer. and what knowledge they need to solve problems and make decisions. The means for winning a case might be access to resources of various kinds. scientific formulae. Figure 2. both formally and systematically. Tacit knowledge is. 2001). while explicit knowledge can be easily codified. making it difficult to communicate or share with others. but Western firms have focused largely on managing explicit knowledge (Grover & Davenport. values. intuitions. Both types of knowledge are important. Explicit knowledge can be expressed in words and numbers and shared in the form of data. or emotions he or she embraces. on the other hand. specifications. manuals. Tacit knowledge is embedded in the human brain and cannot be expressed easily. and the like. Subjective insights. This kind of knowledge can be readily transmitted between individuals. Methods to identify knowledge needs Problem Decision Analysis Problem Decision Solution Knowledge Knowledge Success factor Critical Success Factors Knowledge CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 28 . A common distinction is made between explicit and tacit knowledge. and hunches fall into this category of knowledge.Knowledge categories Many researchers have tried to define categories and dimensions of knowledge. highly personal and hard to formalize. Tacit knowledge is deeply rooted in an individual’s actions and experience as well as in the ideals. is between practical. experience-based knowledge and the theoretical knowledge derived from reflection and abstraction from that experience. Shumizu. Tacit knowledge is not articulable. explicit concept. as we will see later in this chapter. The complexity of knowledge increases with lower levels of codification. although some knowledge always will remain tacit. Knowledge may dynamically shift between tacit and explicit over time. & Konno. This distinction is related to the tacit vs. combination. which scholars frequently make. externalization. Both are necessary in most organizations. and thus can be written and easily transferred. (Nonaka. 2001). Nonaka et al. Tacit knowledge is often embedded in uncodified routines and in a firm’s CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 29 . Toyama. 2001). Explicit knowledge is sometimes called articulable knowledge (Hitt. Personalization approaches imply that the primary mode of knowledge transfer is direct interaction among people. It involves an organization’s approach to knowledge transfer. and therefore cannot be easily transferred. Articulable knowledge can be codified. 2000) have suggested that knowledge creation is a spiraling process of interactions between explicit and tacit knowledge. Codification is the degree to which knowledge is fully documented or expressed in writing at the time of transfer between two persons. and internalization. & Kochhar. A distinction is sometimes made between codification and personalization. Bierman. but an increased focus on one approach or the other at any given time within a specific organization may be appropriate (Grover & Davenport. with the degree of tacitness being a function of the extent to which the knowledge is or can be codified and abstracted. This spiraling process consists of socialization. Companies using codification approaches rely primarily on repositories of explicit knowledge.End Mean Analysis End Means Result Process Knowledge Knowledge Tacitness may be considered as a variable. The concept of tacit knowledge corresponds closely to the concept of knowledge with a low level of codification. A similar distinction. you must have it. but does present a basic industry knowledge barrier to entry. 1999). It has a higher probability of creating strategic value than articulable knowledge. as new competitors are not up to speed in basic business processes. Distinctions can be made between core. knowledge of the courts. even though it will provide the firm with no advantage that distinguishes it from its competitors. For a student in the business school. even though it will provide your company with no advantage that distinguishes it from its CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 30 . According to Tiwana (2002). More specifically. This is the type of knowledge that can create efficiency barriers for entry of new companies.social context. Since core knowledge is present at all existing competitors the firm must have this knowledge. Having that level of knowledge and capability will not assure the long-term competitive viability of the firm. Core knowledge is that minimum scope and level of knowledge required just to play the game. provides little advantage other than over nonmembers (Zack. Core knowledge is that minimum scope and level of knowledge required for daily operations. Core knowledge tends to be commonly held by members of an industry and therefore. while advanced knowledge enables a firm to be competitively viable. In a law firm. core knowledge is the basic level of knowledge required just to play the game. tacit knowledge is often unique. This is the type of knowledge that creates a barrier for entry of new companies. and innovative knowledge. advanced. knowledge of clients. and knowledge of procedures. and innovative knowledge is the knowledge that enables the firm to lead its industry and competitors: - Core knowledge is the basic knowledge required to stay in business. These knowledge categories indicate different levels of knowledge sophistication. difficult to imitate. Since this level of knowledge is expected of all competitors. As a result. it is partially embedded in individual skills and partially embedded in collaborative working relationships within the firm. core knowledge includes knowledge of what subjects to study this term and where the lectures take place. Tacit knowledge is integral to professional skills. and uncertain. examples of core knowledge include knowledge of the law. To enter the modem manufacturing market. In a law firm. and knowledge of successful procedural case handling. knowledge of important court rulings. florists. Let us take two examples: One from the consumer electronics (hard product) business and one from Internet programming (soft product). say. Advanced knowledge enables a firm to be competitively viable. hoping to know more than a competitor. They instead may choose to compete for that position by differentiating their knowledge (Zack. therefore. and necessary software. enabling knowledge differentiation. or quality of knowledge as its competitors. such essential knowledge. clearly identified target markets. graphic design skills. all electronic parts that go into a modem. Such knowledge allows the firm to compete head on with its competitors in the same market and for the same set of customers. 1999). just about any competitor in those businesses is assumed to have this knowledge in order to compete in their respective markets. Internet programming skills. although the specific knowledge content will often vary among competitors. Firms may choose to compete on knowledge head-on in the same strategic position. a company developing Web sites for. needs server hosting capabilities. The firm may have generally the same level. how to write operating system drivers for modems. scope. a new company must have extensive knowledge of these aspects: a suitable circuit design. According to Tiwana (2002). In either case.competitors. Such CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 31 . examples of advanced knowledge include knowledge of law applications. Similarly. Such knowledge allows the firm to differentiate its products and services from that of a competitor through the application of superior knowledge in certain areas. fabricating surface mount (SMD) chip boards. provides no advantage over other market players. advanced knowledge is what makes your company competitively viable. For a student in the business school. - Advanced knowledge is what makes the firm competitively visible and active. and familiarity with computer telephony standards. advanced knowledge includes knowledge of important articles and books that are compulsory literature in subjects this term. knowledge allows your company to differentiate its product from that of a competitor, arguably, through the application of superior knowledge in certain areas. Such knowledge allows your company to compete head on with its competitors in the same market and for the same set of customers. In the case of a company trying to compete in modem manufacturing markets, superior or userfriendly software or an additional capability in modems (such as warning online users of incoming telephone calls) represents such knowledge. In case of a Web site development firm, such knowledge might be about international flower markets and collaborative relationships in Dutch flower auctions that the company can use to improve Web sites delivered to its customers. - Innovative knowledge allows a firm to lead its entire industry to an extent that clearly differentiates it from competition. Such knowledge allows a firm to change the rules of the game by introducing new business practices. Such knowledge enables a firm to expand its market share by winning new customers, and by increasing service levels to existing customers. Innovative knowledge is that knowledge that enables a firm to lead its industry and competitors, and to significantly differentiate itself from its competitors. Innovative knowledge often enables a firm to change the rules of the game itself (Zack, 1999). In a law firm, examples of innovative knowledge include knowledge of standardizing repetitive legal cases, knowledge of successful settlements, and knowledge of modern information technology to track and store vast amounts of information from various sources. For a student in the business school, innovative knowledge includes knowledge of important topics within subjects, links between subjects, typical exam questions, and knowledge of business cases where theory can be applied. According to Tiwana (2002), innovative knowledge allows a company to lead its entire industry to an extent that clearly differentiates it from competition. Innovative knowledge allows a company to change the rules of the game. Patented technology is an applicable example of changing the rules. Innovative knowledge cannot always be protected by patents, as the lawsuit between CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 32 Microsoft and Apple in the 1980s should serve to remind us. Apple sued Microsoft for copying the look and feel of its graphical user interface (GUI). The Supreme Court ruled that things like look and feel cannot be patented; they can only be copyrighted. Microsoft won the case since it copied the look and feel, but used entirely different code to create it in the first place. Many more categories and dimensions of knowledge have been suggested by researchers. The problem with most of these classifications is that they do not seem to satisfy three important criteria for classification. The first requirement is that a classification should always be complete, there should be no category missing. The second requirement is that each category should be different from all other categories, that is, there should be no overlap between categories. The final requirement is that each category should be at the same level, there should be no category including another category. Consider the following categories suggested by researchers: formal knowledge, instrumental knowledge, informal knowledge, tacit knowledge, Meta knowledge, and context-independent knowledge. These categories seem to violate some of the classification rules. For example, there seems to be an overlap between informal knowledge and tacit knowledge. Maybe Long and Fahey’s (2000) classification into human knowledge, social knowledge, and structured knowledge satisfy our requirements: - Human knowledge. This constitutes know-what, know-how, and know-why of individuals. Human knowledge is manifested in individual skills (e.g., how to interview law firm clients) or expertise (e.g., why this case is similar to a previous case). Individual knowledge usually combines explicit and tacit knowledge. This type of knowledge may be located in the body, such as knowing how to type touch on a PC or how to ride a bicycle. This type of knowledge may be cognitive, that is, largely conceptual and abstract. - Social knowledge. This kind of knowledge exists only in relationships between individuals or within groups. For example, high-performing teams of tax lawyers share certain collective knowledge that is more than the sum of the individual CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 33 knowledge of the team’s members. Social or collective knowledge is mainly tacit knowledge, shared by team members, and develops only as a result of team members working together. Its presence is reflected by an ability to collaborate effectively. - Structured knowledge. This is embedded in an organization’s systems, processes, tools, routines, and practices. Knowledge in this form is explicit and often rule based. A key distinction between structured knowledge and the first two types of knowledge is that structured knowledge is assumed to exist independently of individual knowers. It is, instead, an organizational resource. However, to be complete, this knowledge has to be in the heads of individuals. Two dimensions have been introduced to classify knowledge. The first dimension is concerned with whether an individual knows. The second dimension is concerned with whether an individual knows whether he or she knows. This is illustrated in Figure 3. I can either have the knowledge (I do know) or not have the knowledge (I do not know). I can either be aware of it (I know it) or not be aware of it (I do not know it). Some researchers have argued that the real tacit knowledge is found in the right upper quadrant. In this dimension, I do know, but I do not know that I know. Tacit knowledge in this sense is also called hidden knowledge or non accessible knowledge. In his book, we do not use this extremely limited definition of tacit knowledge. Figure 3. Dimensions of individual knowledge I do know I know that I know I don’t know that I know I know that I don’t I don’t know know I don’t know that I don’t know ISSN 0975 – 7953 July - CAMS Journal of Business Studies and Research September 34 marketing. independently of industry. declarative. that include knowledge of development. marketing knowledge. production department. Classification of knowledge into categories and dimensions may depend on industry. If you classify knowledge into technology knowledge. and finance. which involves knowledge of the mechanisms of complying with the law’s requirements in a particular situation: how documents CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 35 . production knowledge. A law firm is organized according to legal disciplines. there are likely to be different knowledge categories in a bank compared to a law firm. court opinions. and client invoice data. The types of knowledge involved in the practice of law can be categorized as administrative. and financial department. there will be certain generic knowledge categories such as market intelligence and technology understanding in most companies. and other sources of primary legal authority. and financial knowledge. while others work in the department for mergers and acquisitions. according to the organization chart. solutions for improved knowledge flows in the organization will emerge. procedural. it may be because the firm. When classifying knowledge in a firm. which includes all the nuts and bolts information about firm operations. but not impossible to communicate. such as hourly billing rates for lawyers. the legal principles contained in statutes. law students spend most of their law school time acquiring this kind of knowledge. - Declarative knowledge. it is important to do the analysis without the organization chart. At the same time. - Procedural knowledge. production. By identifying cross-sectional knowledge categories and dimensions. staff payroll data. For example.We define tacit knowledge as personal and difficult. consists of a development department. 1997): - Administrative knowledge. Some lawyers work in the tax department. marketing department. A law firm is a good example. and analytical knowledge (Edwards & Mahling. such as product knowledge. It might be more useful to introduce new knowledge categories. which is knowledge of the law. client names and matters. and explicit knowledge to become tacit over time. substantive law principles) as it applies to a particular fact setting. and they influence each other. but mutually dependent and reinforcing qualities of knowledge: tacit knowledge forms the background necessary for assigning the structure to develop and interpret explicit knowledge. They suggest the existence of a share knowledge space that is required in order for individual A to understand individual B’s knowledge. Classification of knowledge into categories and dimensions has important limitations. which pertains to the conclusions reached about the course of action a particular client.. the higher the value of explicit knowledge. or how forms must be filed where to create a new corporation. should follow in a particular situation. while procedural knowledge is labeled knowhow. and these dynamic processes cause tacit knowledge to become explicit. Analytical knowledge results. According to Alavi and Leidner (2001).e. Alavi and CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 36 . Declarative knowledge is sometimes labeled know-that and know-what. hence. The two knowledge categories are not dichotomous states of knowledge. Tacit and explicit knowledge depend on each other. For example. lawyers in the maritime law department may have a large knowledge space so that even a very limited piece of explicit knowledge can be of great value to the lawyers. However. Alavi and Leidner (2001) argue that whether tacit or explicit knowledge is the more valuable may indeed miss the point. knowledge development and sharing are dynamic processes. In this perspective. It may be argued that the greater the shared knowledge space. in essence. For example in a law firm. This overlap is typically tacit knowledge. the classification into explicit and tacit knowledge may create static views of knowledge. The knowledge space is the underlying overlap in knowledge base of A and B. - Analytical knowledge. from analyzing declarative knowledge (i. the linkage of tacit and explicit knowledge suggests that only individuals with a requisite level of shared knowledge are able to exchange knowledge. the less the context needed for individuals to share knowledge within the group and.are used to transfer an asset from Company A to Company B. but mutually dependent and reinforcing qualities of knowledge: tacit knowledge forms the background necessary for assigning the structure to develop and interpret explicit knowledge. the very essence of the knowledge management challenge is to amalgamate knowledge across groups for which IT can play a major role. it is precisely in applying technology to increase ‘weak ties’ in organizations. Yet. The two are not dichotomous states of knowledge. the higher the value of explicit knowledge and the greater the value of IT applied to knowledge management. Employees gain this knowledge from doing the organization’s tasks. absent a shared knowledge space. the less relevant will be explicit knowledge. On the other hand. To add to the paradox. However. while others are interested in individual knowledge. Some researchers are interested in the total knowledge within a company. hence. This CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 37 . What is most at issue is the amount of contextual information necessary for one person or group’s knowledge to be readily understood by another It may be argued that the greater the shared knowledge space. that IT holds promise. Dixon (2000) was interested in the knowledge that knowledge workers develop together in the organization. and thereby increase the breadth of knowledge sharing. the real impact of IT on knowledge exchange is questionable. 112) discuss knowledge space in the following way: Whether tacit or explicit knowledge is the more valuable may indeed miss the point. and hence the less applicable will be IT to knowledge management. there must be some overlap in their underlying knowledge bases (a shared knowledge space). The inextricable linkage of tacit and explicit knowledge suggests that only individuals with a requisite level of shared knowledge can truly exchange knowledge: if tacit knowledge is necessary to the understanding of explicit knowledge. then in order for Individual B to understand Individual A’s knowledge. p. the greater the need for contextual information. the less the context needed for individuals to share knowledge within the group and.Leidner (2001. and that organizational researchers have used to question the application of IT to knowledge management. the smaller the existing shared knowledge space in a group. This is a paradox that IT researchers have somewhat eschewed. M. 9-33. & Mahling. References: 1. MIS Quarterly. A. 279-309. it is know-how that is unique to a specific company.. In order to organize the performance skills of employees working in the organization. N. Toward knowledge management systems in the legal domain. Dixon. N. Need for developing Information and Knowledge structure is becoming increasingly important in order to achieve sustained growth in today’s competitive environment. T. & Prusak. Knowledge management and knowledge management systems: Conceptual foundations and research issues. 4. D. and how to control the amount of analysis in maritime law cases. it is important to coordinate their skills and energies in meaningful way. & Edgington. E. D. R. Boston: Harvard Business School Press. (2005).Assessing value in organizational knowledge creation: Considerations for knowledge workers. M. These examples all include the how-to rather than the know-what of school learning. to differentiate it from book knowledge or lists of regulations or databases of customer information.. procedural knowledge was classified as know-how. 2. 29(2). Vicious and virtuous circles in the management of knowledge: The case of Infosys technologies. (1998). D. K. 29(1). 5. Organizations face number of complex challenges. MIS Quarterly. H. (1997). In Proceedings of the International ACM SIGGROUP Conference on Supporting Group Work Group (pp. Chen. (2005). Moreover.. Garud. Some examples of common knowledge are what medical doctors in a hospital have learned about how to carry out certain kinds of surgery. Boston: Harvard Business School Press. (2001).knowledge is called common knowledge. E. So there is an urgent need for organizations to study the prevailing KM Practices and Process and evolve suitable parameters relating to it. Growth and competitive advantage has become strategic perquisites for any organization. Common knowledge. & Leidner. A. The Association of Computing Machinery ACM. (2000). M. T. Alavi. 107-136. how to reduce cost on consulting projects. In the law firm example. Edwards. 3.. 25(1). 6. Working knowledge. L. 158166). Conclusions To conclude. L. what an organization has learned about how to introduce a new drug into the diabetes market.. Davenport. MIS Quarterly. & Kumaraswamy. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 38 . Y. MIS Quarterly. General perspectives on knowledge management: Fostering a research agenda. Absorptive capacity configurations in supply chains: Gearing for partner-enabled market knowledge creation. (2001). (2001). while the same is increasing in India and Brazil... (2000).MIS Quarterly. Long Range Planning. D. Toyama. Tan. and performance of multibusiness firms. 10. Implications of Right to Education Act 2009 on Future Technical Education D. Grover. Y. SECI. Chaudhury. 13-28. (2005). (2005). The working age population in US. S. Poston. A. 29(1). Kim. India is projected to stay the youngest with its working-age population estimated to rise to 70% of the total demographic by 2030 .Mavoothu Abstract India’s demographic and economic conditions appear remarkably conducive to future technical educational development. Contributing knowledge to electronic knowledge repositories: An empirical investigation. knowledge management capability. 14(4).7. H. Academy of Management Journal 44(1). A. 311-334.. 15. 12. K. MIS Quarterly. This will lead to shifts in jobs. K.245-278. Shumizu. Hitt. Long. 33(1). 9. Special issue on information technologies and knowledge management.. & Speier. 29(2). 11. M. Bierman. R. & Konno. Knowledge acquisition via three learning processes in enterprise information portals: Learning-by-investment. L. Ryu.. A report by PricewaterhouseCoopers says that mature economies are increasingly aware that they will be unable to withstand the pressure from emerging economies by competing head on with their human capital potential9. (2000). 13. 8.the largest in the CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 39 . & Wei. T. C. MIS Quarterly. R. M. 145-187. Of the BRIC countries. A. & Subramani. 18(1). Japan and some Western European countries are decreasing.. (2005). 16. Gosain. & Davenport. 113-143. J.. MIS Quarterly. 29(2). I. O. A. 1-7. R. 5-34. Sambamurthy. V. A. L.. Nonaka. W. C. V. 29(1). 29(1). Journal of Management Information Systems.. R.. and learning-from-others. & El Sawy. Ba and leadership: A unified model of dynamic knowledge creation.. Tanriverdi. Information technology relatedness. H. B..(2005). & Fahey. H. UK. MIS Quarterly. 14. 221-244.. C. Effective use of knowledge management systems: A process model of content ratings and credibility indicators. Diagnosing cultural barriers to knowledge management. N. 5-21.. (2005). & Kochhar. 193-195. K. Malhotra. Academy of Management Executive.. S. India has a lot of opportunities in human capital development.. 29(2). skills and talent globally. Kankanhalli. & Rao. 113-127. Direct and moderating effects of human capital on strategy and performance in professional service firms: A resource-based perspective. and 29(2). learning-by-doing. (2005). China produces much more engineers. After the introduction of the RTE. scientists. and Setting up a high-power National Commission for Higher Education and Research (NCHER). Mathematically. To tap this opportunity India must go for a strategic investment in human capital. It gives free access to secondary vocational education since 2009. . In 2008. .No child shall be held back. They are Setting up of 2500 Kendriya Vidyalayas. expelled.A child who completes elementary education shall be awarded a certificate. Opening the door for foreign universities. or required to pass a board examination until completion of elementary education. BCI. the Union HRD Minister Kapil Sibal announced three major initiatives. it is pertinent to analyse what are the implications of that on future technical education in India. AICTE. and other professionals than India. Introduction The Right to Education Act 2009(RTE) is the gateway to India’s development. It reinforces the justification for further investments and policy changes in technical education. China gives very much importance to vocational and technical education. which will subsume all the national level higher education bodies like UGC. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 40 . etc.5 decades ahead of India in education.Calls for a fixed student-teacher ratio. doctors.Free and compulsory education to all children of India in the 6 to 14 age group. It makes the education the fundamental rights of the children in the age group of 6-14 years and from class 1 to 8.Will apply to all of India except Jammu and Kashmir. . the next breakthrough act was RTE.world10. China introduced the Compulsory Education Act in 1986 which is similar to India’s RTE 2009. China is at least 2. the enrollment in primary schools and middle schools across the China reached 98%. today china started reaping the benefits. In the light of the above developments. . Because of that act. The Main features of Right to Education Act 2009 The following are the salient features of the Right to Education Act 2009: . They have many world-class universities. MCI. After the enactment of Right to Information Act 2005. thereby affecting their wages and eventually dampening returns on investment4. Compulsory Education and Technical Education: China’s Experience China introduced the Compulsory Education Act in 1986. (2) humanities. the quality of human resources was considered as an important determinant of the country’s competitiveness. else recognition cancelled. and (4) formal knowledge. Mandates improvement in quality of education. (3) technologies. The formal knowledge domain consists of language. 1964)1 and is not portable across one’s life and from job to job. What is Technical Education? Technical education creates ‘specific human capital’ (Becker. The technologies domain likewise contains all recorded knowledge related to the types of technology. there is very narrow access to higher education. and logic3.- Provides for 25 percent reservation for economically disadvantaged communities in admission to Class One in all private schools. However. Technology education draws its content from four universal domains: (1) sciences. Technology is commonly defined as a discipline or body of knowledge and the application of this knowledge combined with resources to produce outcomes in response to human desires and needs. The sciences and humanities domains contain all recorded knowledge of the sciences and humanities. Technical education is to imbibe specific jobrelevant skills that can make the employee more readily suitable for a given job and would make him/her thus more productive2. A comparison between India CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 41 . particularly among the poor. and Financial burden will be shared between state and central government. The students who exit from education system create an oversupply of labour with senior secondary schooling. School infrastructure (where there is problem) to be improved in three years. As China consolidated the momentum of its rapid economic gains and drives more openly into the market environment. linguistics. School teachers will need adequate professional degree within five years or else will lose job. mathematics. and China in promoting high quality technical education shows that China has developed the technical education sector much more rapidly than India. Overall.2009)5. China has produced more than 5. holders per year compared to India's 1.D.000 Ph. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 42 . China has encashed its Compulsory Education Act 1986 to promote its vocational and technical education.000. China has also successfully implemented the concept of scalability(Pai. By contrast.000 Master's degree students.D. and 40 percent at the Ph.000 Ph.D. and 1. which had good faculty and facilities and the Indian Institute of Science (IISc) which had a good three-year Bachelor of Science diploma/degree programme in engineering. et al. technical education developed a distorted image.000 applicants. in terms of both scalability and accountability. no IIT or IISc was again put in place until 1995. India's technical education landscape was initially dominated by the Indian Institutes of Technology (IIT). These colleges now number approximately 1. In fact. degree students in 2006.The Current Status of Technical Education in India Since 1947.100 compared to the seven IITs and one IISc. the growth of IITs and IISc. when independence was achieved. to deem only about 20 percent of first degree holders employable.30.00. India has been one of the few developing countries to invest extensively in both Science and Technical education. The fact that a large number of non-IIT students turn out to be equally competent and innovative was largely ignored until about a decade ago6. according to a December 2008 report from the Indian Institute of Technology in Bombay. which clearly indicates a failure on the part of the Indian government. constituting nearly 75 percent of the total intake of engineering students. Experience has shown that at least 10-15 percent of those applicants are of IIT quality and comparable to the students at major public universities in the U. level. For a mere 3. 4 percent at the Master's level. Thus. causing the IT industries.000 Bachelor's degree students. India’s first IIT was started in 1950 at Kharagpur. 20. A direct consequence of this was an enormous. IITs and IISc graduate only 1 percent of this number at the Bachelor's level. Table: 1 India’s Higher Education Institutions [Branch-wise share (in %)] CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 43 . but unfortunate growth of coaching institutes where many students enrolled for two years prior to taking the IIT entrance exam.S. graduating over 2. A large number of private engineering colleges with poor facilities and unqualified faculty thus came about after 1970. However.000 seats in IITs there are close to 3. seemed to have gradually declined beginning in the late 1960's. Branch Arts..Technical&Architecture Teacher Training Polytechnics Others 07 08 06 13 Total 100% CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 44 . Science&Commerce Medical Percentage 56 10 Engg. The vocational and technical educations are given a backseat driving. If the Harvards. there may even be an influx of foreign students seeking seats. It is said that in the Twenty First Century. Opportunities for Faculty Positions: There will be a lot of opportunities for faculty positions in technical institutes. 'a nation's ability to convert knowledge into wealth and social good through the process of innovation is going to determine its future’7. which will help commercial expansion of our technical education. - - - CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 45 . For that a strong foundation of technical education is a must. the strength and quality of the institutions may get validated or competition may force them to improve their quality. there will be growth in the supply of quality professional higher education (Kumaraswamy. Competition: The quality of the IITs and IIMs remain largely untested currently since there is no meaningful competition. Kellogs.Source: The Financial Express (Online).8 Internal Efficiency: Availability of more aspirants and seats leads to generating maximum output at minimum cost. The following are the implications of RTE on opportunities in future technical education: - Quality Technical Education: As there will more aspirants every year. Dec 26. 2008). MITs and the Stanfords are freely allowed to set up shop in India. In that case. 2009 The above table shows that the Indian higher education is dominated by the general education. then there will be a lot of opportunities in India in the field of technical education in future. Implications of RTE on Opportunities in Future Technical Education If the RTE is delivered effectively. efficiently and equitably. - - Implications of RTE on Challenges in Future Technical Education The following are the implications of RTE on challenges in future technical education: CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 46 . Knowledge Universe Education. Chief Academic Officer. Investment in learning English language as such a great business opportunity13. Japan and some Western European countries are decreasing. A report by PricewaterhouseCoopers says that mature economies are increasingly aware that they will be unable to withstand the pressure from emerging economies by competing head on with their human capital potential9. as a subject. India has a lot of opportunities in human capital development. estimates that India needs 2 million new teachers today and will be short 18 million teachers by 201512. Jeremy Williams. is taught up to under graduation in India. The working age population in US. The entire technical education is in English.- Demographic Dividend: India’s demographic and economic conditions appear remarkably conducive to future technical educational development.the largest in the world10. To tap this opportunity India must go for a strategic investment in human capital. while the same is increasing in India and Brazil. Business Opportunity: Educating and training India will be a huge business and social opportunity11. It reinforces the justification for further investments and policy changes in technical education. India is projected to stay the youngest with its working-age population estimated to rise to 70% of the total demographic by 2030 . skills and talent globally. UK. English is the language of business in India and the large English-speaking workforce is a benefit to investors and employers. says that the deregulation of higher education will result in creation of annual revenues of close to $100-billion and generate job opportunities for 20 million people in the field of education alone. This will lead to shifts in jobs. Of the BRIC countries. Gauri Kartini Shastry demonstrated that Indian districts where it is easier to learn English benefited more from globalization: they experienced greater growth in information technology jobs14. The English Advantage: English. Venugopal Dhoot. the Chairman of Videocon Group. Exorbitant Fee: There will be hectic fee even in the government-run technical institutes to augment the revenue and to grow on their own. These colleges now number approximately 1.e. the social rate of return to technical CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 47 . the government retains art subjects. will become still more commercial as there will be more aspirants for each seat and every one will try to increase the chances of getting the admission.S) was never addressed. The IISc(Bengaluru) discontinued the diploma/degree courses in the engineering disciplines between the 1960's and 1980's and the concept of scalability (i. So. That is why private universities have come up17. NIFTs. IIMs. NIDs. those set up by the church and other such organisations. of course. Shortage of Faculty: Whether the technical institutes can attract the young scholars to come to teaching at the frugal rate at which they pay the faculty? Private Actors: Technical education in the private sphere is largely a mediocre commercial activity that needs radical reforms16. Intermediation: The coaching classes for the entrance tests to get admissions in premier technical institutes like IITs. and the private encash on the engineering and technological courses18. Supply would follow demand and here in India the public universities do not have the resources or the seats to meet the public demand. Low Rate of Return: The future output from the technical institutes may be far more than the labour market demands. to deem only about 20 percent of first degree holders employable15.100 compared to the seven IITs and one IISc. But then India does not have a tradition of not-for-profit organisations setting up universities or colleges. etc. having a large student intake and a higher student to faculty ratio as is obtainable in reputed pubic universities in the U. causing the IT industries. Except. More resources will go to the intermediary product (coaching classes) than to the final products (technical programmes). The IITs and IIMs are so selective and there are a large number of people wanting to get educated. In India there is an artificial shortage of good institutions. constituting nearly 75 percent of the total intake of engineering students. IIFTs. et al. Today. A large number of private engineering colleges with poor facilities and unqualified faculty thus came about after 1970.Scalability in Public Institutions: The government-run technical institutes are always lagging in scalability.. Imperfect Information: There is a problem of imperfect information. given the present experience with these types of alternate financing is not encouraging. Professor Sheila Slaughter discusses the ascendance of a corporate regime in higher education. While replicating these models. 2009)23. This may cast doubt whether further public expenditures in this sub-sector are justifiable. So. Suggestions The following are the suggestions/strategies to mitigate and reckon with the potential challenges in future technical education in the light f RTE: The IIT Model: The IIT model of success needs to be replicated on a far larger scale (Narayana Murthy. both within America and across the globe. which has focussed on using universities and knowledge as instruments of power and control. That will increase the personal cost of technical education. Technical Education to the Disadvantaged: Providing quality technical education and training to the disadvantaged children is going to be the big challenge21. People may not know which skills to invest in. class. It is already happening in India. Human capital investment in all countries is focusing on significant labour-market gains for the individuals. In fact. Personal Cost of Education: In her book entitled Academic Capitalism. Racial. The increasing number of aspirants will lead to self-financing technical institutes. Several reports regarding technical education or the AICTE guide lines state a figure of 15:1 as the desired student to faculty ratio. which clearly indicates a failure on the part of the Indian government24. the issue of scalability must be addressed. But. no IIT or IISc was again put in place until 1995. higher participation in the labour market and improved employment probability20. While this CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 48 . Personal cost of education has risen with the decline of state support for universities. such as higher post-tax earnings. It is already evident in India. gender and regional inequalities have deepened19. Alternate Financing: Scholarships and student loans that eventually would help reduce the differences in rates of return. the students and the parents will have the ‘herd mentality’22.education investments may be below the returns to investment in alternative forms of capital. or who provides the best education and other instruction. The PPP can be opened only to public limited companies. One can make efficient use of classroom space during the daytime. where at least 70% of workers between 15-29 years have formal vocational skills. As compared to industrially mature economies such as Korea.000 quality IIT undergraduate students can be generated in a four year time frame while some of the Tier II institutions can be upgraded to IIT status with no difference in undergraduate quality25. societies and private companies. In terms of hostel space. Japan and the UK. Germany. run labs during both mornings and afternoons. We need entities that are subject to adequate disclosure requirements and internal governance processes.figure is perhaps the norm in Ivy League schools in the U.S. These are primarily research universities with huge undergraduate enrollments where postgraduate students are involved in various aspects of faculty assistance. and admit students in both semesters. the corresponding proportion for India is a dismal 2%27. scholars. Public-Private Partnership (PPP): Utilise the private sector’s efficiency in running technical institutes and raise resources by unlocking the government’s brand value. So. 2008)26. which have greater financial reporting requirements than other entities like trust. It is believed that CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 49 . more than 20. Enrollment into the existing IITs can be doubled within a year or so if incremental investments in infrastructure are made. room sharing should be considered except for Ph.. as is common in non-IIT schools and was the prevalent model before 1947 as well. it is not so in reputed public universities such as Berkeley. Illinois where the ratio is more than 20:1. Tier I institutions in India must adapt this model and concentrate more on research. Thus.D. Avoid Intermediation: It is necessary to channelise the huge amounts spent by society on intermediary coaching classes for financing the actual endeducation (Kumaraswamy. Balancing Between General and Technical Educations: Both general and technical educations contribute to economic growth. There are listed public limited companies like NIIT in the education sector. Increase the ‘Available Seats to Aspirant’ Ratio: The ‘available seats to aspirant’ ratio will have to go up for bringing down the coaching class fees and the tension level of the aspirants and the parents. a balance has to be struck between size of general education and technical education. Socialistic Programmes: Provide incentives for socialistic programmes such as reservations. And the general education dominated over the technical education in England. Resource Prioritisation: It would be prudent to target governmental resources to those fields of study where the demand in labour market is high30. creating facilities in remote centres and so on to meet the demand of technical institutions. in China. Short-cycle Courses: Universities and Colleges must give equal importance to both short-cycle courses and 4 or 5-year academic programmes. For example. Though the industrial revolution was initiated in England. Decentralisation: Involve local bodies in setting up and running the technical institutes. military. That’s a great lesson for India now. the future of technical education in India can be bright if certain decisions can boldly be taken for India to emerge as a leader in research and development as similar route taken by China several years ago 32. or any aspect of society to strive for global excellence (Narayana Murthy. 2009)31. Conclusion India needs the best intellect available for government. France and USA due to the fact that it did not focus on the vocational and technical education. In India the PPP model has proved to be successful in sectors like telecom. business. and so let us see that India does not do the same mistake that of England. Looking ahead. Nationalisation of Admission Tests: Nationalise the admission tests to technical courses as a National Testing Service on the lines of GMAT and mandate all the technical institutes to partner this initiative. subsquently England lost the economic power to German. roads and ports28. the municipal governments-supported universities became more popular than the provincial universities for the vocational programmes.government is very serious about PPP in educational sector. and this can be achieved only by making use of the opportunities thrown out by the RTE in the field of technical education in future. Reference: CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 50 . power. especially in short-cycle courses29. 1. Becker, G.S. (1964), ‘Human Capital’, National Bureau of Economic Research, New York. 2. 3. 4. Tilak, J.G.B. (2002), ‘Vocational Education and Training in Asia’. In Keeves, J.P. and Watanabe, R., ‘The Handbook on Educational Research in the Asia Pacific Region’, Kluwer Academic Publishers. http://education.stateuniversity.com/pages/2536/Vocational-TechnicalEducation.html">Vocational and Technical Education - Current Trends, Preparation Of Teachers, International Context - HISTORY OF</a> [Accessed on 12 March 2010] Hossain, S.I., ‘Making an Equitable and Efficient Education: The Chinese Experience’. Available at: http://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2000/02/24/000009265_39711 04185041/additional/116516322_20041117170042.pdf [Accessed on 12 March 2010] Ethnocentrism in Consumer Behaviour for White Goods Ms.Anagha Shukre & Vigyan Mishra Abstract Indian White Goods market is growing at a fast pace because of change in work life of consumers. More and more foreign companies are jumping in this developing segment of the consumer durables. As the need for "anytime anywhere" access to information is increasing, the sales of White Goods are also increasing. Other factors that are responsible for the hike in sales figure are reduction in prices and affordability. White Goods are now sold at approximately half the price at which they were sold two years ago. The third most important factor is duty free import of White Goods as a personal baggage that has helped a lot in increasing the penetration level of the product among the consumer population. Awareness about White Goods has also increased over the years. The paper primarily focuses on the ethnocentrism and positioning of White Goods of different companies in the market. The study has been done on the respondents of NCR to get an overview of the ethnocentric factors which influence their purchase decision in terms of White Goods. The tool used here is MDS. Keywords: Ethnocentrism, Domestic Economy. Introduction and Need of Study Consumer ethnocentrism is defined as "the beliefs held by consumers about the appropriateness, indeed morality, of purchasing foreign-made products." Consumers who are ethnocentric believe that purchasing imported products is unpatriotic, causes loss of jobs, and hurts the domestic economy. Consumers who are non-ethnocentric judge foreign products on their merits without consideration of where these products are made. The study of consumer ethnocentrism would be appropriate in a market where fierce competition exists between domestic and foreign-made products. The emerging markets CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 51 like India in South Asia fit that description today. In a marketing and consumer behavior sense, ethnocentrism refers to consumers' preference for domestic products and prejudice against imports. Consumer ethnocentrism results first from the love and concern for one's own country and the fear of losing control of one's economic interests from the harmful effects of imports. Consumers who are highly ethnocentric are unwilling to purchase foreign products and tend to look at the issue of buying foreign goods as a moral rather than just an economic problem. There was no proper study done to understand the Ethnocentrism of Consumer Behaviour especially with respect to White Goods. Today, big companies are encasing this concept by hitting the right nerves of the Indian Consumers. It’s very easy to sell products in India if they are related to Indian culture, beliefs and values. So, it becomes very important to understand conditions and attributes of the Ethnocentrism Behaviour of the consumers. This would give an insight of the Indian Consumers and Indian White Goods Industry. The most well-known scale that measures consumers' ethnocentric tendencies is the CETSCALE, developed by Shimp and Sharma. The 17-item scale was rigorously formulated, refined, and validated in the United States. Although originally developed as a measure of American consumers' ethnocentric tendencies, the CETSCALE was subsequently applied and its psychometric properties validated internationally, in Japan, France, and Germany, Korea, Russia, and China. Consumers with ethnocentric tendencies have a proclivity to evaluate domestic products favorably, often unreasonably so, compared to imported products. This indicates a definite positive association between ethnocentrism and evaluation of domestically-made products, and a negative association between ethnocentrism and evaluation of imported products. Study of ethnocentric tendencies among consumers in a country, therefore, has clear implications for marketers. If the level of consumer ethnocentrism in a market is high, foreign manufacturers looking forward to expand in that market as well as domestic marketers distributing imported products will face a tough challenge. Review of literature Ethnocentrism study began last century with social psychologists such as Sumner (1906), who defines ethnocentrism as the tendency to view one’s own group as the center of everything. Highly ethnocentric individuals tend to accept things culturally similar and reject things culturally dissimilar (Samovar and Porter, 1995). Since the 1980s, consumer researchers have adopted the construct of ethnocentrism. Shimp and Sharma (1987, p280) define consumer ethnocentrism (CE) as consumer beliefs “about the appropriateness, or morality of purchasing foreign-made products”. Individuals vary in CE and their levels of CE influence attitudes and intentions towards buying foreign goods (Klein, 2002; Orth CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 52 and Girbasova, 2003). Highly ethnocentric consumers believe that buying foreign products or brands is unpatriotic and tend to favor local products or brands. Even online, CE may relate to consumer reactions to global and local appeals on websites (Singh, Furrier, and Ostinelli, 2004). Some researchers, however, question the broad capability of CE to explain consumer favoritism towards local brands and against foreign brands. Baugh and Yaphank (1993) posit that a foreign brand’s COO2 strongly influences local consumers’ attitude towards a particular foreign brand. CE may moderate COE, but the research is inconclusive. Batra et al (2002) found that Indians prefer non-local brands to brands seen as local but CE had no significant impact on their evaluations of foreign brands. In a study on the US and Korean consumers, however, Steenkamp, Batra, and Alden (2003) found that the level of CE moderated COE on perceived product quality. The Federation of Indian Chambers of Commerce and Industry (FICCI) have carried out a comprehensive Survey of industries in the consumer durable goods sector. The FICCI Survey, based on feedback and interaction with representatives of consumer durables industry, allied industry organizations, associations, Government agencies and public sector undertakings, reveals that sector is poised for a quantum leap due to technological improvements, falling prices due to competition, aggressive marketing and declining import tariffs. The Survey reflects the changing dynamics of consumer behavior – luxury goods are now being perceived as necessities with higher disposable incomes being spent on lifestyle products. There is a discernible shift in the consumers’ preference in favour of higher-end, technologically superior branded products, the demand being spurred by increasing consumer awareness and preference for new models. This shift is also explained by the growing trend of products being manufactured in the organized sector of the economy and the narrowing down of the price differential between branded and nonbranded goods. Competition has forced companies to offer efficient after sales service and support and this, in turn, has swayed customer preference for branded products. The Survey highlights the positive growth trends in consumer durable segments – white goods and consumer electronics during April-March 2004-05 and points to sustained growth during 2005-06 because of emerging opportunities and strong fundamentals of the economy. The FICCI Survey offers insights into the dynamics of growth in a competitive market environment. The Survey has identified that quality products with superior technology and technology up gradation has helped the industry to achieve higher growth in terms of volume and also in higher realization in value terms. Though CTV segment faced a de-growth in April- June 2005 sales of colour televisions declining by 5.3 per cent and in value terms by 14.1 per cent due to the Value Added Tax (VAT) regime introduced in April 2005, the flat CTV category achieved a volume growth of 36.2 per cent and value growth of 25.8 per cent in the first quarter of 2005-06. The refrigerator CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 53 Besides. The rising rate of growth of GDP. offers plenty of scope and opportunities for the white goods industry. thus resulting in consumers’ preferences to buy branded products. The use of internet by the market functionaries has led to intelligent sales of the products. an extensive distribution network and an insight into local market conditions. festive and wedding seasons — April to June and October to November in North India and October to February in the South. Purchase necessarily is done only during the harvest. It helps to sustain the demand boom witnessed recently in this sector.segment also has shown a similar trend with frost-free segment having about 54 per cent growth rate with about 15 per cent de-growth indirect cool refrigerators. Penetration of consumer durables CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 54 . Rural India. The branded players provide good after sales services and support. Demand is high during festive season and is generally dependent on good monsoons. The urban consumer durable market for products including TV is growing annually by 7 to 10 % whereas the rural market is zooming ahead at around 25 % annually. which accounts for nearly 70% of the total number of households. Attractive consumer loan schemes with reduced interest rates over the years by the financial institutions and commercial banks and the hire-purchase schemes have added to the surge in demand. The domestic companies compete on the basis of their wellacknowledged brands. There has been qualitative change in consumers’ preference –going for higher end products. Demand is cyclical and seasonal. Increasing consumer awareness and preference for new models have added to the demand. Products like air conditioners are no longer perceived as luxury products but are treated as necessities in the changed socio-economic environment with changed life styles. The consumer durables industry appears to have two clearly differentiated segments. Rate of growth in production has been more in terms of quantity or in volume growth rather than the growth in value terms for a number of products. The phenomenal growth of media in India and the flurry of television channels and the rising penetration of cinemas have spread awareness of products in the remote markets. The multinational corporations have an edge over their Indian counterparts in terms of technology combined with a steady flow of capital. the consumer goods companies are themselves coming out with attractive financing schemes to consumers through their extensive dealer network. The price difference between branded and unbranded goods has narrowed down. This has happened because of constantly falling prices over the years due to competition among the major players. declining import tariffs. Competitive strategies revolve around strong brand differentiation and prices. Bargaining power of customers is high due to availability of many brands. rising purchasing power of people with higher propensity to consume with preference for sophisticated brands would provide constant impetus to growth of white goods industry segment. aggressive marketing strategies. However. has a 2% penetration in case of refrigerators and 0. offers plenty of scope and opportunities for the white goods industry. Reduction in import duties may significantly lower prices of products such as microwave ovens.5% for washing machines. While the consumer durables market is facing a slowdown due to saturation in the urban market. local manufacturing will continue to stay competitive. leading to increased expenses due to transportation. the rural market is growing faster than the urban India now. the effective duty protection is still quite high at about 35-40 per cent. whose market size is quite small in India. (Table 1) The Indian White Goods Industry Earlier in India it was perceived that a foreign brand means good quality and better product i.e. voltage etc. The attractive schemes of financial institutions and commercial banks are increasingly becoming suitable for the consumer. festive and wedding seasons — April to June and October to November in North India and October to February in the South. power availability. The flurry of television channels and the rising penetration of cinemas will continue to spread awareness of products in the remotest of markets. value for money. Washing machines and refrigerators will also benefit from lower input costs. And the reason for this is the CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 55 . Consumer goods companies are themselves coming out with attractive financing schemes to consumers through their extensive dealer network. growth in disposable income. The urban consumer durable market for products including TV is growing annually by 7 to 10 % whereas the rural market is zooming ahead at around 25 % annually. Otherwise. rural consumers purchase their durables from the nearest towns. improving lifestyles. At the same time. The urban market is a replacement and up gradation market now. low running cost. The increasing popularity of easily available consumer loans and the expansion of hire purchase schemes will give a moral boost to the price-sensitive consumers. should be converted to routine regular feature from the seasonal character. The vigorous marketing efforts being made by the domestic majors will help the industry. But now the things are changing rapidly. Currently. and rise in temperatures. According to survey made by industry. Indians have started relying more on Indian brands of products. rural consumers should be provided with easily payable consumer finance schemes and basic services. believed to be months `good for buying’. Rural India that accounts for nearly 70% of the total number of households. So.would be deeper in rural India if banks and financial institutions come out with liberal incentive schemes for the white goods industry segment. Purchase necessarily done only during the harvest. This has a direct bearing on future demand. there will be some positive benefits in the form of reduction in input costs. a flood of imports is unlikely and would be rather need based. The other factor for surging demand for consumer goods is the phenomenal growth of media in India. after sales services to suit the infrastructure and the existing amenities like electricity. quite useful in a country still plagued by power cuts.Having reached high penetration in urban markets. there is an increased tendency among consumers to go for style and ergonomic ease. lifestyle aspirations became a central theme for Indian consumers who continued their enthusiastic purchase of home appliances and driving strong growth in 2007 for the domestic electrical appliances market.ethnocentric connect they feel with the Indian brands. since 2002. pricing. Leading brands have invested in research to understand the consumer better and have subsequently met the specific needs of Indian consumers – be it in terms of features. That is why the Indian players are doing well in the market. In view of the special consumer needs and lower affordability of rural markets (mainly power. rural/semi-urban demand was thanks to low household penetration of domestic electrical appliances in these regions. providing not just strong cooling but also superior air quality (antibacterial filters) and are also aesthetically appealing (match wall colour. rural sales contributed about 25% of the total sales of refrigerators and washing machines five years ago. According to industry sources and articles in leading newspapers such as Hindu business line. most appliances manufacturers are now looking to focus on addressing the low household penetration of household appliances in rural markets that are seeing growing incomes and increasing awareness due to the rapid rise of TV and other media. key players have started customizing products for rural areas. Urban India goes premium Consumers’ purchase decisions are no longer limited to basic appliances.Riding on the back of robust economic growth and soaring incomes. but rose to around 40% in 2007-2008. For example. large chain retailers have contributed to a larger share of sales of domestic electrical appliances – (as much as 8% of the total domestic electrical appliances market in India). while Electrolux launched a battery-backed 170-litre refrigerator. art/décor finish panels). Godrej rolled out a frost-free refrigerator under its sub-brand Champion. bottom mounted freezers as these are used less than the main compartments and thus reduce frequent bending. per industry data. promotions and extending routes to market to a larger group of consumers in rural India. which offers 12-hour power backup. More consumers are opting for high-end appliances that save on time and effort on housework. Their bargaining power with appliance manufacturers grew sufficiently that CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 56 . Air conditioners are also becoming premium. Rising influence of modern retail -As per industry sources. Bijli.(Graph 1: Penetration of Consumer Durables) Another year of impressive growth . Some examples of premium products launched in 2007 were 4-door individual compartment cooling refrigerators which provide better food preservation. Other notable premium products included LG’s DIOS refrigerator with a 15-inch TV in the door. While urban demand was mainly derived from consumers seeking better features that tend to be premium priced. Also. Rural Markets – the “durable” dream . Companies have started using ethnocentric approach for not only advertising and promoting their product but also for creating a positive Indian perception in the minds of the Indian customers. water shortage). As long as the Indian customer is convinced of the value he gets for his investment. This includes their pricing strategy. The Indian brands have gained their shares quickly thanks to their extensive rural reach. This Ethnocentric appeal helps in creating a sense of reliability in the minds of the customers. Indian manufacturers like Videocon and Godrej have stepped up competition by launching their own products laden with features for the Indian consumers. In our study we are going to consider different brands of White Goods available in India and their Indian way of promotion in the market. their price and user-friendly features.” But now the modern age Indian customers also see whether or not the brand has an Indian appeal or not. Whether they are buying a TV or LCD they ensure that they derive the maximum benefit from the purchase. In response. One way of doing so is using ethnocentric approach to capture mind of consumers and Indian firms are doing it very effectively.” “Price sensitivity means that the Indian consumer looks for ‘value for money’ in every purchase. White Goods have more liability in their promotions through their technical features. We have many Indian and Foreign Brands of White Goods in Indian market. However. Videocon was the first to cash this concept. But now one more aspect is being included and that is Ethnocentrism. has paid rich dividends. sold on the strength of aggressive promotions and a vast distribution network. Its strategy of offering products suited for Indian consumers at affordable prices. but competition from Indian players intensifies. “India is more of a value conscious market. some manufacturers like Videocon are forward integrating into retailing.LG’s dominance continues. the availability of models. Positioning is done in the mind of the customer’s.LG continued its lead of domestic electrical appliances in India. These developments are expected to further extend distribution networks so that appliances can reach more consumers and may appeal to international retailers which may seek to enter the market over the forecast period. While the Indian consumer may be price sensitive this doesn’t necessarily translate into the fact that we only buy cheap products. Promotion of White Goods is mainly through its features and technology. Korean manufacturers including Samsung have focused on fulfilling the demands of urban markets with premium appliances. The foreign multi-nationals are also now following their footsteps to have a proper positioning and perception of being and Indian brand. As soon as an Indian appeal CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 57 . Every player wants their share from the market and hence tries to position themselves in the customers mind for longer period of time. There are more factors to be considered during the marketing of White Goods. price is not an issue. longstanding trade relationships and their established brand recognition in India. Too often India has been denigrated as an extremely price sensitive market. while serving rural customers who have yet to purchase an appliance or are making tentative steps to feature laden appliances.they can compete aggressively in the distribution of appliances. as it is the psychological affect which induces the customer to arrive at certain decision. Before that time. 1996). India is a highly diversified country of many religions. like other Asian consumers. Most human beings have a tendency to crave for goods and services that they cannot get. 1997). This Indian connection plays a vital role in creating a good perception about a brand. At the same time. Another media that is quite rapidly gaining acceptance as a valuable marketing type is the Internet. In the past five years. The slow but steady increase in the number of Indian consumers being exposed to the Internet will also increase. The Indian consumer is also much more knowledgeable now regarding different products and services. became more sophisticated and demanding (Hou. Often it has been stated that some marketers lose business in the international market because of the ethnocentric beliefs of the society in which they are trying to market their product (s). At the same time. the Indian consumer. the Indian government started operating several hundred new television relay transmitters. This is likely the reason that there was a craving for foreign made goods by the Indian consumer as well (Johansson. had a television station or a relay transmitter. languages. primarily the state capitals. cultural values and beliefs. only a handful of large metropolitan cities in India. This is primarily due to the liberalization policy that was adopted by the Indian government. advances in telecommunications (like direct television broadcasts from satellites) provided the Indian consumer some exposure to foreign products via advertisements (Lamont. And as it has happened in almost all countries.comes for a brand automatically the consumer feels a connection with the brand. 1997). Over the past 20 years its political environment changed several times. Cultural and social background of the person plays a big role in this aspect of their lack of need for such foreign made products. available to them. The political environment of that country is quite different from that of the United States and the governing power has changed hands several times in the past two decades. with a generation gap. most Indian consumers were exposed to at least some kind of advertisements via the television media. coexist in the Indian market as well. After the expansion trend of the early 80s. India has seen an influx of major foreign industries and products. Beginning April CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 58 . television advertisements played a significant role in making the Indian consumer an informed consumer. despite its foreign made status. In the early 1980s. India as an Ethnocentric Market India is a country of many cultural values and beliefs. consumers of different generations. One of these culturally and socially determined factors affecting the attitude of potential customers toward the country-oforigin of the brand or company marketing or associated with the brand is consumer ethnocentrism. However. Like any other country. This in turn will likely increase the level of exposure of foreign product advertisements by the Indian consumer. It has the largest democracy in the world. than they were only fifteen years ago. there are some foreign brands that are not as popular in some developing countries as one would imagine. 2. A highly structured nondistinguished questionnaire has been used for the study. 7. Not only pre-sale attribute like Brand awareness but also post sale attributes like customer satisfaction were taken in to account. Brands Considered For the Study 1. 4. 4. 9. 3. 5. the Indian government removed quantitative restrictions on most foreign products. The sample size taken is 200. 9. As far as attributes are concerned. Brand Awareness Indian Connect Price Impact on Indian Families Quality Design After Sales Service Customer Satisfaction Availability of service centers Analysis & Findings CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 59 . 8. 3. India has the world's largest middle class. 6. Research Methodology We use descriptive research design in our studies. The potential buyers of the products were interrogated. Brands & Attributes Considered For the Study Based on a pilot survey following brands and attributes were selected for the study. 2. And it was also made sure that a proper mix of Indian and foreign brands were taken. 5. The sampling technique is multistage sampling and the survey was conducted in Delhi and NCR region. they were chosen keeping in mind both Ethnocentrism attributes and standard attributes that an Electronic Good must posses. 7. The pilot survey for brands was based on taking the players which have national presence and maximum reach in India. 6. SONY SAMSUNG HAIER PANASONIC LG VIDEOCON BPL PHILIPS SANSUI ONIDA Attributes Considered For the Study 1. 8.2001. estimated at 400 million. 10. 68 4.46 2.58 3. which would be input to SPSS for final MDS output.75 3. seven per cent answered in favor of Philips.69 3.29 3.18% people fall under the age group of 20-25.50 2. SONY Indian Connect.50 3.55 4.58 3. 9% answered in favour of Sansui.79 2.09 2.87 4. 41% are businessman and 14% are housewife.63 4.11 2.11 4. PARAMETERS / BRANDS HAIER SAMS UNG VIDE OCO N 3.31 3.54 3.69 4.70 3. HAIER customer satisfaction etc) and finally we get the 9*10 matrix form of our weighted mean MDS data. 32% of the respondents are from the age group of 3035 & rest i.e.76 2.22 2.54 3. Out of 200 respondent about 20% prefer LG ( which is a Foreign brand). 12% respondents prefer Sony. 27% are service class respondents. 6 per cent favored Onida and Hair each while only 3 per cent responded for BPL. SAMSUNG brand awareness. We calculate the weighted mean of every column (like SONY Price.82 2.39 3.49 4. we get a table of 200 responses about the perception of the 10 brands and their 9 attributes taken for the study.35 4.20 3.82 2.17 3.22 2. 17% preferred Samsung.76 2.64 2.83 SONY SANSU I PHILL IPS 3.10 4. Out of 200 respondents.43 2.83 3.05 2.84 2. whereas 36% are from age group of 25-30. 68% are males & 32% are females.44 3.43 4.61 2.80 3.97 2. by using multi dimensional scaling technique.Out of a total of 200 respondents.98 2.28 2.90 2. After filling up the 90 column and 200 rows of SPSS data.84 2. 18% are college going students.87 BRAND AWARENESS PRICE AFTER SALES SERVICE DESIGN QUALITY INDIAN CONNECT BRIGHTNESS 4.84 2.68 CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 60 . SAMSUNG Design.62 3.57 3.05 2.30 3.33 2. 16% prefer Videocon.87 2.75 4.43 3.58 LG PANAS ONIC TOSHIB A 2..12 3.84 2.02 3. 14% lie in age group 35-40 years. HAIER Price.48 4.37 3.35 4.17 2. The 9*10 matrix is given below followed by the Euclidean Distance Model ( graph 3).33 4. From the total number of 200 respondents.75 4.30 ONID A 3. 563 .826 2.IMPACT INDIAN FAMILIES ON 3.92 2.394 1.269 .269 3.53 3.70 3.934 3.732 1.005 2.20 2.061 .611 1.061 1.13 2.62 2.937 1.46 1.563 2.951 1.428 2.370 1.05 3.404 1.42 2.530 1.000 1.38 2.85 3.458 .005 1.937 3.000 1.563 2.938 .000 .27 3.252 .61 2.62 3.000 3.000 .99 2.43 2.79 The Lower Triangular matrix Optimally scaled data (disparities) for subject 1 1 2 3 4 5 1 2 3 4 5 6 7 8 9 10 .028 2.553 3.50 CUSTOMER SATISFACTION 3.77 2.563 1.97 2.005 2.028 2.389 .656 .732 CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 61 .934 1.005 1.910 1. 01551 .000 Thus R-square indicates goodness of fit.000 1.504 2.000 .02104 . So for any research higher value of R-square and lower value of Stress is expected.028 1.00080 Iterations stopped because S-stress improvement is less than . In our case.01417 RSQ = .01708 .01171 .000 3.392 .00157 .03274 .428 .000 3.285 .001000 Configuration derived in 2 dimensions Stimulus Coordinates Dimension Stimulus Stimulus Number Name ISSN 0975 – 7953 July - 1 2 CAMS Journal of Business Studies and Research September 62 . Stress = . Iteration S-stress 1 2 3 4 5 Improvement . The high R-square value represents MDS model is well fitted with the given problem. whether stress value represents badness of fit.99912 The iteration is given below: Young's S-stress formula 1 is used.370 2.530 .269 .00395 .6 7 8 9 10 6 7 8 9 10 .01471 .937 3.732 . The third Indian brand Videocon has no competition from the other Indian brands.5498 .5 H IE A R Dimension 2 1 .2264 . If we take price as a dimension then from this matrix we see that consumers’ perceptions about the brands CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 63 .0 -3 -2 -1 0 1 2 D e s n1 im n io Through the Euclidean distance model.5997 -.6946 1.5 S N OY O ID N A -1 .0 S MU G A SN 0 .5 SNU ASI 0 . It can be inferred that it has a relative more positive perception.7866 PANASONIC 1.1263 VIDEOCON -.1 2 3 4 5 6 7 8 9 10 HAIER 1.0667 . we can see that the two Indian brands ONIDA and BPL have a similar perception in consumers’ minds on various parameters.1600 1.5004 SAMSUNG -2.2858 -.2113 D r e S u sC n u a n e iv d tim lu o fig r tio E c e nd ta c m d l u lid a is n e o e 1 .4829 -2. There is a close competition between these brands. As far as the ethnocentric brands are concerned.1815 SANSUI LG PHILIPS BPL SONY ONIDA -.3104 -.3419 -.2776 .4756 .2333 1.0 P IL S H IP L G V E CN ID O O PNS N A A O IC BL P -0 . we come to know about the competition between the brands in the perception of customers or how the different brands of White Goods positioned in the minds of consumers.1330 -.0469 -. None has an Indian connection with the consumers. NJ. Similar is the case with SAMSUNG and HAIER. The three brands have stayed in three different places in different quadrants.”A study of the Buying Willingness Impact of Product Cues for 64 .jsp%3Fid %3D093DYU01321023&ei=PaBRST0A9GGkAXZvPmxCg&sa=X&oi=translate&ct=result&resnum=1&ved=0CAgQ7gEwAA&prev =/search%3Fq%3DBaugh%2Band%2BYaphank%2B(1993)%252Bconsumer%2Bethnocentrism %26hl%3Den CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 2. on the ethnocentric grounds. This may be due to lack of visibility and emergence of other players like Videocon. It has been en cashing this perception since it entered into our markets. Sony could try to relate themselves with India.tw/theabs/site/sh/detail_result. HAIER & LG have no competition with the other brands. So. So. Upper Saddle River. there is a neck to neck competition between ONIDA & BPL. Prentice Hall.G.google. Armstrong. Marketing: An Introduction.edu. Durables. References: 1.ncl. SAMSUNG & SONY as far as Ethnocentrism is concerned. VIDEOCON & LG are also the competitors. Similarly Samsung has its own share in market and has its own sets of customers. L.G. Gary and Kotler. In India L. Due to its vast presence and clear visibility.. W. which is a Korean brand is giving tough competition to Indian brands like Videocon on the Ethnocentrism scale. Hitting the consumer chords with some ethnocentric approach can work very well with these two companies. as there is no brand placed near them. Further Sony has its own space in the market but they have no Indian base. Philip. all three brands share the same place. There is no competition between HAIER.. Surprisingly L. and Nes. BPL which was once considered as a face of Indian white goods. PANASONIC is also a competitor. SONY has its own space in consumers’ minds and has nowhere near Indian brands. Baugh and Yaphank (1993).co. Conclusion The paper gives an insight into the ethnocentric studies with respect to the white goods industry. Bilkey. in the minds of consumers.in/translate?hl=en&sl=zhTW&u=http://etds. These three brands have no competition with other brands also. & Samsung. Country-of-Origin Effects on Product Evaluations. is perceived to be an Indian brand and continues doing so. It can be thus inferred that it has almost no ethnocentric approach in creating its perception. BPL requires promoting itself on the ‘Indian ness of its brand.G. 2000. 5th ed.SONY & VIDEOCON is negative. It gives certain ideas and views which the industry players can en cash upon. many respondents initially thought of LG to be an Indian brand and thus it lies very close to VIDEOCON. from http://translate. today shows no connection with ethnocentric factors affecting the Indians. There is tough competition between SANSUI & PHILIPS. As is visible from the graph. Journal of International Business Studies (Spring/ Summer 1982) : 89-99. Johann. That is both are considered to be a high priced brands by consumers. location of business away from the markets problems. Journal of International Business Studies.com/Insight/ViewContentServlet? Filename=Published/EmeraldFullTextArticle/Articles/0770210603. etc.vuw. Klein. & Global Management. Global Marketing: Foreign Entry. It has mainly examined and analysed the aspects of rural market profile consumer behaviour in rural markets product and relating to product problems. 7. India has the second largest population in the world and therefore can easily be interpreted that it has the second largest market in the world. Johansson. 5. or us versus everyone?-Delineating consumer aversion to foreign goods. Cheng Lu Wang. Wee Chow( 1997). 345-363. P.pdf 4. 33(2). Introduction The market place is one of the few areas in modern society where people can participate directly in public life. 1998): A I and A8. ensuring business periods problems. The role of a strategic approach also can not be ignored. The works has delved into both secondary and primary data to present a comprehensive view of rural marketing the study is both diagnostic and suggestive in nature. Batra et al (2002).html. From the study it has been observed that the rural markets of Dhemaji District at large has suffered from various problems of marketing mix like Product.emeraldinsight. 2002. Marketing Problems of Rural weekly market A Case study of Dhemaji District. Marketing may aptly be described as the process of defining. 369. Zhen Xiong Chen. The present study is aimed at bringing out a focused analysis of marketing in rural areas. Price. Reports Show Chinese Military Used American-Made Satellites: White House Says It Can't Control Such Leases. Johnny K(1997). With about 70 percent of India’s population living in rural India.ac. Gerth. 1997. An integrated approach is needed to overcome such problems.. New York. Jeff.” from 8. p. Irwin/McGraw-Hill. Promotion and also Place. Practical Marketing: An Asian Perspective. Based on a sample survey of Three major bocks of the Dhemaji District of Assam an attempt has been made to see the present marketing strategies for rural markets. 1997. G. Us versus them. Local Marketing. 11.nz:8081/www/anzmac2005/cdsite/pdfs/9-Marketing-Int-C-Cultural-Env/9-Liu. Assam Chimun Kumar Nath Abstract Rural Marketing is an attractive term as compared to what it was in the mid and late 80s. Addison Wesley Publishing Company. IL. Rural Market.” Consumer Ethnocentrism And Chinese Attitudes Towards Store Signs In Foreign And Local Brand Names” from http://smib. marketers con not ignore the vast potential of this segment. “Consumer ethnocentrism and willingness to buy domestic products in a developing country setting: testing moderating effects” from http://www.3. The New York Times (June 13. Keywords: Price promotion. J. 6. Chicago. NY. anticipating and creating customer needs and organizing all CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 65 . Hou. competition. The 70s and 80s witnessed its steady development. we mean the performance of business activities that direct the flow of goods from urban to rural areas (For manufactured goods) and vice versa (for agricultural produce) and products manufactured by rural non-agricultural workers. Marketing is the activity undertaken by the companies to make and exchange transaction. Marketing in rural areas has a varied conceptual dimension as the events occurring in markets are necessarily taking place in a set of conditions affecting the rural dwellers and institutions hinterlands. Marketing in its most general definition “is the dissecting of the flow of goods ad services from the producer to consumer or users.” The definition of rural as given by the census of India is not urban. these are sociological and behavioural factors which affect the economy of rural market. Rural Market The term ‘marketing’ connotes different meanings to different people. Therefore. The potential of rural markets is said to be like that of a “WOKEN UP SLEEPING GIANT”. Being a new market it could be easily manipulated provided the manufactures develop an insight in to the behavioural patterns of rural consumes. The rural market of India started showing its potential in 1960s. to others it is selling and still others understand it as purchasing as well as selling. provided his marketing plans are attended to the specialities of rural markets. The rural markets are green pastures for any markets. there are clear indications that the 90s are going to see its full blossoming.the resources of the company to satisfy them. by rural market. The rural market is estimated to be growing faster compared to urban market. Problems of Rural Marketing in Dhemaji District CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 66 . In fact satisfaction of customers’ needs and wants provides the rationale for the firm’s existences. There could be several approaches to understand the rural market. a consummate and adding one bring out greater output at a minimum cost. to some it is shopping. and The market for investment goods including agricultural inputs. In fact. Rural market is not an independent entity by itself. rural marketing has two major areas Marketing of agricultural products and Marketing of manufactured products in rural areas. And. The rural market consists of two segments as like The market for consumption goods including consumer durables. In fact. For a business organisation. The process of rural marketing poses many problems due to the vastness of the country and a high potentially for providing an effective marketing system. The rural markets in Dhemaji have some peculiar problems compared to urban markets. rural marketing is beset with a number of problems. the uniqueness of the structure of the rural market and the peculiarities of the distributional infrastructure in the rural areas. by introducing appropriate innovation. However. attempted to verify the relationship between the marketing strategies and profitability of small businesses in rural market. Kyle. In the South African context. The rural weekly market is a case for the introduction of traditional marketing activities of promotion. rural marketing is a complex subject.2005. a few other problems stem from the underdeveloped markets and illiterate and gullible people constitute the major segments of the markets. Market development in rural areas will receive tremendous fillip if infrastructure. It is against this background that the study has been undertaken. Besides. O’Neill et al. Research on rural market is very less and reliable quantitative data about the total size of the market for specific durable and non-durable products is not available. and to transport products to the rural hinterland. It is necessary to build more circuit houses or small motels in the interior villages. distribution. These problems arise basically but of the peculiar dynamics of rural market Dhemaji District: the uniqueness of the rural farmers/Beparee. Cant and Brink (1999) studied the marketing perceptions of grocery shop owners whilst Martins (2000) studied grocery retail strategies based on the income and expenditure patterns of consumers. 2004). CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 67 . selection and adaptation. Neither of the studies has. The majority of these studies have been based on the Profit Impact of Marketing Strategy and have focused on company performance in the United States of America (Faria and Wellington. (2002) and Patterson and Smith (2001) have suggested that overall business performance is influenced by the marketing strategy. Various studies by Shim et al.(2004). Travelling in the hinterland is extremely tedious and stay is a big problem. It is hardly under-stressed that the development of rural markets depends on a difficult network of roads to connect the village to towns. the results of the aforementioned studies are inconclusive. Review of Literatures Empirical support for the relationship between the marketing strategy and financial performance of a business has been provided by a number of studies. facilities for communications are strengthened. however. sales and servicing. the marketer finds it difficult to evolve strategies and specific plans for rural markets.In the Dhemaji District context. In the absence of adequate data and information about rural market. therefore. Price variation and price promotion CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 68 . The following aspects are important when a personal service is delivered to the customer. vi. product differentiation. however. The tailoring of business hours according to the needs of customers. decisionmakers will finally be in a position to relate marketing expenses to shareholder value and to understand how to tie marketing initiatives back into the value created for the company. Research has. Site and supply points are very important in this regard. namely price variation and price promotion. namely (Brink and Berndt. v. 1999): i. 2006).) Know the names of your customers. packaging and place will yield in-creased returns for the firms.) Train employees to render superior service to customers. along with a mechanism through which to analyse the interaction between those parts. indicated that the following factors also play an important role in customer decision making and could provide a competitive advantage to the firm. a business has to break down its marketing function into constituent parts. In this way. The manipulation of the following marketing variables. an advantage over competitors is created.) Good service is to listen to the comments of customers. quality. iv. Firms may assume that a competitive advantage centres primarily on price and that the customer focuses on price and will.In order to measure the problems of marketing and its strategy effectiveness. By doing this.) Select people orientated employees to serve customers.) Care for the needs of the customer and prove it by the owner’s presence in the business. advertising. The punctual fulfillment of promises. iii. only buy the product that is the cheapest. namely (Gummeson. Each of the variables are discussed in more detail below Customer service The importance of service to the customer is often overlooked from the perspective of the firm.) Try to make the availability of the products to your target market as convenient as possible. 2004): The availability of a backup service to the customers. Decision-makers will be able to understand the internal motives that propel the marketing value of the business (Anonymous. ii. research. internet or a variety of other means. one that can range from stable pricing. Investment is needed on research into consumer factors affecting the production. public relations. Price variation and price promotion is a set of pricing and promotional decisions designed to communicate a price position to consumers and influence short term sales response and overall market performance (Lal and Rao. Research Consumers vote with their purchases in the grocery store everyday.2005). as opposed to publicity. Advertising allows a company to tell the benefits of a product to a potential customer. new technologies and new products in the grocery shop market as this affects the product offering by a particular retailer (Food Marketing Institute. Price promotion advertising volume is the volume of advertising dedicated to communicating a price position. 1999). 1997). which is usually free.Price variation policy represents the firm’s price position. dissemination and adoption of new ideas. 2006). It has been observed that many retailers who operate in South Africa’s informal settlements have been accused of charging exorbitant prices (Cant and Brink. a billboard. It is against this background that consumers can and do “drive” research programs that can ultimately improve on a retailer’s profitability. Marketers see advertising as part of an overall promotional strategy. personal selling and sales promotion (Anonymous. on radio or TV. featuring consistent. Product differentiation Product differentiation is the modification of a product to make it more attractive to the target market. The interest in cost and taste by discerning consumers has led to a greater demand for quality and higher principles towards production standards (Food Marketing Institute. Other components of the promotional mix include publicity. The key to understanding how consumers would “drive profitability” is to understand issues around research and development. featuring frequent price discounts. 2005). The pricing policy that is favoured by customers will stimulate repeat purchases and eventually profitability. to highly promotional pricing. services. Advertising can be in a newspaper or magazine. This involves differentiating it from competitors' products as well as the CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 69 . This dimension is independent of price variation policy in that retailers can elect to advertise everyday prices that promote a stable price position or sale events that emphasize discounted prices. Advertising is generally paid for. companies and ideas by an identified sponsor. everyday prices and few price discounts. Advertising Advertising is the paid promotion of goods. distribution or intermediary. If the target market of a business views the product as different from the competitors'. Grocery retail stores sell all kinds of pro-ducts. 1997). Arnauld et al. (2002) defined perceived quality “whether in reference to a product or service” as “the consumer’s evaluative judgment about an entity’s overall excellence or superiority in providing the desired benefits”. the firm will have more flexibility in developing its marketing mix. Most retail firms buy their products from wholesalers or other distributors in the form which they will sell to the consumer. that is.. They also want access to a wide range of goods at competitive prices and a convenient time. The objective of a product differentiation strategy is to develop a position that potential customers will see as unique. It is the mechanism through which goods and/or services are moved from the manufacturer/service provider to the user or consumer (Meggison et al. choice and convenience offered by major supermarkets. and provide services needed to sell those pro-ducts.2006). Place (Distribution) Place is also known as channel. The changes are usually minor. Blem (1995) stipulates that customers expect their goods and services to be packaged and presented conveniently. regardless of whether they live in a major city or suburban. Packaging plays a central role in promoting the appeal of products to first time users. Packaging Packaging is a crucial component of the "marketing mix" for a product. The function of the retailers is to give products utility. as the package is the manufacturer's last chance to convince the customer to purchase the product (Anonymous. consistently. distribution strategy or promotional variables. they can be merely a change in packaging or may include change in the advertising theme. regional or rural centres. is an aid to selling. determined that consumers value highly the quality. The customer needs packaging that is suitable for transporting and storage and that is easy to remove. The package serves as a strong image identifier among residents of townships. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 70 . after purchasing a product. to add value by making them available to the consumer at a convenient location.firms own product mix (Bennet. 2002). the packaging becomes an aspect of service. before purchase. It is the "least expensive form of advertising" and is of particular importance at the point of sale. However. Attractive packaging. Quality improvements Research by Gilmore (1999) and Koskinen (1999) has. A successful product differentiation strategy will move the product from competing primarily on price to competing on non-price factors such as product characteristics. the following objectives have been self forth. Understand the pricing pattern in rural weekly markets. for products. The branded and/or other products produced by any company or big firm have been kept out of the scope of this study. but also increasingly. But before offering a suitable marketing mix. the marketers must understand the village marketing environment in rural Dhemaji.Rationale Many studies on rural markets in India have dealt with certain agricultural products which are traded in the rural market. The study has been further confined to only three blocks namely Dhemaji Development Block. Source of the Data and Methodology The data for the study are drawn from both primary and secondary sources. There have been less focused studies analysing the rural market in the context of changing the rural market in the context of changing scenario of rural markets. les explored and less exploited in Dhemaji district. Machkhuwa Development Block and Bordholoni Development Block. Objectives The main objective of the study is to analyse the present marketing pattern of consumer products in rural weekly market. A recent macro economic survey indicates that there is a great opportunity not only for further growth and distribution of consumer goods. They are to: Examine the product penetration in rural weekly markets. The results of various surveys by state level organisation have been used to sketch the CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 71 . Study the competition level in rural weekly market. The study has been confined to the Dhemaji Division of Dhemaji District. Only the Rural weekly markets have been considered as the subject matter of this study. farm yields. The present study is an attempt to fill up this grey area on rural weekly market. Rural Dhemaji has been reviewed so much that now there is and increasing stalls of rural marketing and separate set of marketing techniques exclusively for the rural markets is required. which improve. To set direction for the study. The rural markets are by and large. For this study only those local vendors who are basically producer of the products sold in these weekly markets has been considered. Rural sector is now poised for offering a vast potential to marketers which promises to be an opportunity for which are to be grabbed by surmounting the challenges and threats. Review the publicity aspects in rural weekly market. information has also been gathered from books. 3. price. Shreepani weekly market. Gogamuch weekly markets.e. 2. The data are analysed and tabulated for the interpretation. Care has been exercised to see that the selected markets are not near to towns (exhibit I). the study was taken up in 10 selected markets from Dhemaji district. 3. three market selected from Bordholoni Development Block out of 6 markets. the study taken mainly four aspects for analysis i. For the specific analysis.. It is a questionnaire cum direct interview method adopted for information collection. Sissikal garh weekly market. Dhemaji Machkhuwa development block Machkh uwa weekly market. Three development blocks have been selected on convenience basis. 3. Exhibit I: Sample structure: District Development block names Dhemaji development block 1. As regards methodology. Sample of the Study According to the census of India the rural means not being urban. Market name 1. Lakhipatuer CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 72 . 4. Apart from the primary data. Bishnupur weekly markets. The study also gathered information on the basis of personal presentation of the researcher from the retail outlets. Bhutiku r weekly Bordoloni development block 1. Beparee (Vendor in Assamese) respondents have been selected from different village of the three blocks Dhemaji Development Blocks. From Dhemaji development blocks four market were selected in total out of seven weekly market. product. To carry the data. reports and articles. Machkhuwa Development Blocks and Bordholoni Development Blocks of the Dhemaji District.profile of rural weekly market. three market were selected from Machiskuwa development block in total out of 5 markets. Based on this concept. Jiabhol weekly market. 2. ten marketers (baparees) are selected on convenience basis. promotion and place (they are questions mainly arise from rural Market-mix) from each market. Moridol weekly market. questionnaire is administered to rural Beparees. Bordholoni weekly market. 2. and personal visit with interviews. While 37 (37%) respondents did not feel in the same line and 21 (21%) respondents were found neutral in this aspect. their preferences.weekly markets. Analysis The appropriate method of data analysis depends to a large extent on the nature of responses made by the respondents. The made and media used for collection of primary data have been distribution of questionnaires. the present researcher had tried to figure out the various marketing problems of different respondents. For this study is order to compile and analyse the data. questionnaire and personal interviews has been used. While 16 (16%) respondents did not feel that it is a problem and 10 (10%) respondents were found neutral. annual reports. Descriptive tables have been used to understand the information conveniently. and more importantly the problems involving marketing mix. From each markets a sample of 10 regular Vendors have been drown. In this study. secondary data source like journals. The percentage tool was extensively adopted to evaluate the questionnaires. The questionnaire was translated into Assamese (Local Language) so as to enable the respondents to understand the questions by an expert. Thus sample Vendors from each market workout to 10 and the total number of sampled Vendors for the study comes to 100. text books. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 73 . market. For this purpose. From the table 1 it has been observed that out of the selected samples 74 (74%) respondents have responded that they face the problems in gathering information relating to products. The present researcher mainly depended on the primary data as a source of information. The data has been collected through Questionnaire/ direct interview method to collect information from Vendors. also helped to the present researcher for further analysis of data. From the table 2. websites etc. simple mathematical calculation like percentage has been used. it is found that out of the selected samples 42 (42%) respondents have responded that they fetches lower price for their product. Apart from the primary source of information. From the table 8. While 28 (28%) respondents did not face the problem and 25 (25%) respondents were found neutral (Refer table 9). From the table 5. it is found that 36 (36%) respondents have responded that they face the problems relating to frequently changing market conditions. While 33 (33%) respondents have opined that they did not face the problem and 29 (29%) respondents were found neutral. it was observed that out of the selected sample respondents 30 (30%) respondents have responded that they face problems in promoting their product. While 5 (5%) respondents did not respond it as a problems and 9 (9%) respondents were found neutral. Further it has been observed from the table 4. While 30 (30%) respondents did not consider it as a problem and 25 (25%) respondents were found neutral on this aspect. From the table 6. it is found that out of the selected sample respondents 86 (86%) respondents have responded that they feel that the location of their manufacturing set up is far from the market. Interpretation Based on the analysis. While 42 (42%) respondents reveals that they did not face such problems and 28 (28%) respondents were found neutral. it can be witnessed that out of the total selected samples 45 (45%) respondents have responded that they face problems in estimating the demand of their products.From the table 3. that out of the total selected samples 38 (38%) respondents have responded that they face problems in getting customers regularly. From the table 10. it was revealed that out of the total selected samples 46 (46%) respondents have responded that they face the problems of competition from the big players for their product. While 24 (24%) respondents did not feel it to be a problem and 30 (30%) respondents were found neutral. While 23 (23%) respondents did not responded it as problem and 41 (41%) respondents were found neutral. While 34 (34%) respondents did not feel in the same line and 22 (22%) respondents were neutral on this aspect (refer Table 7). 47 (47%) respondents have responded that they face the problems of getting information relating to prices of product in similar other markets. 44 (44%) respondents have responded that there is a decline of profit margin in their products sold in these weekly markets. the following Interpretation and Major Finding has been CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 74 . Rural people and demand depends upon income and consumer behaviour. While 16 (16%) samples did not respond the problems and 10 (10%) samples were neutral. as rural marketers depend mostly on the rural people income. which is the basic asset. Packaging is the first important step of product processing. So. they have to sale their crops immediately at low price. two-thirds of rural population cannot get the benefits of various media. T. So. The study found that the rural people fell product services is a problems. The demand for consumer goods will be high securing the peals. the demand for fertilisers is always high during the start of Kharif and Rabi crops. From the table (Table-2) it has been observed that out of 100 (100%) selected samples 42 (42%) samples have responded that they face the problems getting information relating to product is a problem.crop-harvesting period. because they have no knowledge about the promotion. since the land holding pattern. sets. because this is the time at which the rural people have substantial high cash inflows. Because. there are no facilities for public warehousing as well as private warehousing.V. packaging etc. From the table (Table-1) it has been observed that out of 100 (100%) selected samples 74 (74%) samples have responded that they face the problems getting information relating to product is a problem. Scheme. itself is skewed thus the rural population presents a highly heterogeneous spread in the villages. If the packaging cost is high. study found problems are more than prospects. it will increase the total cost of products. training centre. the distribution of rural income is highly skewed. loan. The main problem of rural marketing is seasonal demand in rural areas and since 98 per cent of rural income is seasonal. But due to non-availability of power. Per capita incomes are lower in rural areas compared to those of urban areas.furnished: Information relating to product is major problem for rural marketers like Govt. But unfortunately study has revealed that the publicity is one of the problems of their particular areas. It is suggested that the marketer should use cheaper materials in packaging for the rural market. it is major problems for rural marketers. Again. Media have lots of problems in rural areas. Rural farmers face the problem of storage of their crops. As they cannot hold their crops for some time. as well as T. ISSN 0975 – 7953 July - - - - CAMS Journal of Business Studies and Research September 75 . While 37 (37%) samples did not respond the problems and 21 (21%) samples were neutral. So.V. rural marketers have been facing the problem of estimation of demand for their own products. in the rural areas. is a good medium to communicate a message to the rural people. But a discernible development has taken place in the area under study. Due to poor transportation facilities. Now rural Dhemaji district is stepping into other occupations such as business. So.- Transportation infrastructure is major problems in Dhemaji District. and the rural market was slow moving. etc. The Dhemaji rural sector remained backward till recently. As we know. competition. The Government had started a plan to connect every village with big towns under “JAWAHAR ROJGAR YOJNA”. location of business away from the markets problems. The present study is aimed at bringing out a focused analysis of marketing in rural areas. While 5% did not respondent to that problems and 9% were found neutral to this aspect. marketing activities require transportation facilities. poor consumption habit etc. This was due to several reasons such as excessive dependence on agriculture lack of education. bicycle etc. Agriculture and other employments. 95 percent of villages are roads do not connect the district. An attempt is also made in the study present marketing strategies for rural markets. farmers faces the problem of reaching city markets and find it difficult to get fair prices for their crops. The rural market may broadly be categorised into the two following sub-markets viz. The present study is an attempt to fill this void in research on rural weekly markets. as from the analysis (table-6) it has been observed that out of 100 (86%) of selected sample have responded that they faces this problem. The various surveys of National Sample Survey (NSS) showed that rural market has a vast potential. leading to increased income. As a result a consumption revaluation is CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 76 . Their main transportation tools for the local entrepreneurs is limited such as thella. ensuring business periods problems. The study of the structure and characteristics features of rural marketing will be highly beneficial to marketers of consumer and industrial/Farmers goods in rural areas. It has mainly examined and analysed the aspects of rural market profile consumer behaviour in rural markets product and relating to product problems. Rural Marketing is an attractive term as compared to what it was in the mid and late 80s. location of business away from the market is a major problem. Conclusion The study has manifold implications. There have been less focused studies analysing the rural market in the context of changing scenario of rural markets. The works has delved into both secondary and primary data to present a comprehensive view of rural marketing the study is both diagnostic and suggestive in nature. the market for consumption goods and the market for agricultural and other investment goods. since 98% people living in rural areas and 60% people are depend on the agricultural sectors. According to them. For that a proper methodology has to be adopted in order to implement the government projects properly. etc. product knowledge. The market structure and product responsibilities should be defined in the marketing plan. In some cases. rural markets offer growth opportunities for firms not being caught up in intensive. inter-firm rivalry as highlighted in urban and metro markets.taking place in rural areas. The plan should be easy to understand for all level of rural marketers/buyers. the role of NGOs can be denied in this aspect. to rural farmers. The communication transportation should be developed. Therefore more opportunities of doing business in future exist in Dhemaji District. Market zones to be specified as strong areas and week areas to put suitable efforts and improve market conditions. References: CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 77 . From the case studies it was found that the Dhemaji District rural weekly market structure is discernible in terms of lack of knowledge about promotion. The local MLAs and MP should be made answerable to this effect. So some suggestions has been provided as it should be of most importance: There must be a marketing plan. In Dhemaji district. On the other hand. Urban markets are becoming increasingly competitive for many products. etc. It has more opportunities doing business of in future. marketers will have to understand the rural customers before they can make inroads in rural markets. they are even saturated. - Future Study The district-side is where the markets of the future are likely to be. Warehousing should be provided by the govt. However. Marketing gurus describe rural markets as the market of the new millennium. For that a movement of awareness creation among the rural youths should be campaigned by the NGOs. about 98% of the total population are living in the rural areas. clubs. So a comprehensive study about the causes and effects should be made regarding the rural market problems. However. communication and promotions help customers make purchase decision easily. Business Guide Internet Edition.africa-business.[On. Consumerism Introduction CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 78 . 4. Keywords: Retailer. Price. Retail's Marketing Management Challenge [On-line]. retail scenario global. Raval & Pinakin R. A definition of marketing strategy on the Web.com/products/minitab/14/default.com [On-line]. Anonymous (2006d).2009]. Sheth Abstract Indian retail marketing gears up for global heights. Promotion. Available: 7. Indian.aspx [Accessed:1 Mar. http://www.html [Accessed: 4 April 2009].. In retailing direct marketing and advertising through mass media are useful factors for personal contact with consumers. Available: 3. Anonymous (2006a). Country Analysis Briefs.Available: 5. Anonymous (2006c). Retailing is the booming sectors of India in the current scenario.html [Accessed: 2June. http://support. e. Available: http://www. 11.2009]. Anonymous (2006b). The world is now looking at India as the nation of the future. Afuah A (1998).minitab.2009]. . New York: Oxford University Press.sas. Anonymous (2005b).line]. MINITAB Release14 Statistical Software for Windows [On-line]. [On-line]. Retailing in India has a long haul ahead. so that the retail industry should emphasis on innovative advertising.cfee. 2.marketingprofs. How to succeed in the African market: Want to do successful business with Africa? Here are some tips to help you do just that.com/rnd/app/da.html [Accessed: 2 April 2009].html [Accessed: 1Mar. The retail marketing scenario in India is unique. ROLE OF MARKETING IN CURRENT SCENARIO WITH SPECIAL REFERENCE TO RETAIL SECTOR Chirag V.asp [Accessed: 2 June.com/6/bhandari1.Do 12. 6.eia.2009]. Innovation Management: Strategies. Definition of Causality. Available: 10. Implementation and Profits. Growth of malls etc. Place refers to the distribution and availability of products in various locations. [On-line]. http://www. 8. Retailing forms an integral part of the marketing mix and includes elements like product.org/en/glossary. Characteristics of retail trade.gov/emeu/cabs/safrica. Answers. The Indian retail players have made their presence felt in the market and are increasing their operations through adding more outlets across the country. Available: mvp.1. Place. dynamic retail-marketing scenario. The promotion is an additional method to generate sales and is used n combination with other methods. http://www.com/features/succeed. The paper deals with Introduction of retail marketing. Anonymous (2005). 9. The word ‘Retail’ is derived from a French ford with the prefix ‘re’ and the verb ‘trailer’ meaning “to cut again”. They purchase products in bulk from wholesalers or manufacturers. sales promotion etc. Not only do producers and consumers meet through retailing actions.The word retail is derived from the French word ‘retailer’. Thus. retail trade is one that cuts off smaller portions from large lumps of goods. risk bearing. Retailing involves a direct interface with the customer and the coordination of business activities from end to end right from the concept or design stage of a product or offering. The manufacturers perform all the important functions of marketing for example: buying. packing. It consists of the all activities involved in selling. assembling. warehousing. They usually purchase products / goods / services on credit / cash from. it implies a firsthand transaction with the customer. They deal in different types / variety of products / services. to its delivery and post delivery service to the customer. renting and providing goods and services to ultimate customers for personal. financing and advertising. They operate both of sMall scale & large scale basis. Characteristics of Retail Trade (Essential requisites for an effective retailer are as follows) - A retailer is the link between the wholesaler & the customer. Retailing Scenario-Global CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 79 . Retailing is an important marketing activity. selling. family and household use. The industry has contributed to the economic growth of many countries and is undoubtedly one of the fastest changing and dynamic industries in the world today. grading. They sell goods in sMall quantities to the buyers demand. meaning to cut a piece of or to break bulk. In simple terms. The retailers pay more attention on proper set up and decoration of the business premises in order to attract buyers. They can start business with sMall / lesser capital or large capital. They provide maximum service to the buyers. It is a process through which goods are transported to final consumers. but retailing also creates customer value & has a significant impact on the economy. with over 12 million retail outlets of various sizes and formats. 40% in Brazil and Argentina. Organized retailing however remains poorly developed.ft. WalMart is the largest retailer in the world with annual sales of US $ 284 billion. India’s per capita retailing space is thus the lowest in the world. 70% while it is 50% in Malaysia and Thailand. The corresponding figure for Western Europe is 70% while it is 50% in Malaysia and Thailand. In the developed world. compared to the US figure of 16 sq. According to a report published by McKinsey and Co. Much of it is in the unorganized sector.Retailing in more developed countries is big business and better organized that what it is in India. in size the per capita retail space in India being 2 sq. 40% in Brazil and Argentina. along with the confederation of the Indian Industry the global retail business is worth a staggering US$ 6. Retailing Scenario in India The retail scenario in India is unique. In short.ft. Almost 96% of these retail outlets are less than 500 sq. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 80 . For instance the organized sector has an up to 80% share of retail sales in the United States. accounting for a paltry 10% in China. the customer is king! Retailing is the second largest industry in US in terms of number of people employed. Globally retailing is customer centric with an emphasis on innovation in products.6 trillion. most of it is accounted for by the organized retail sector. 35% in Philippines. 25% in Indonesia and 15% in South Korea. processes and services. ft. According to experts. 800000 core by the year 2005. 400000 crore and is estimated to go to Rs. 20000 crore and is likely to increase to Rs.With more than 9 outlets per 10000 people. allowing retailers to offer more benefits offered to the customer. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 81 . 160000 crore by 2005. India has the largest number in the world. Most of them are independent and contribute as much as 96% to total retail sales. economics of scale drive down the cost of the supply chain. The retail business in India in the year 2000 was Rs. Investment in word class infrastructure is expected to be close to USD 150 bn. Growth of Malls in India The Indian Government is taking major initiatives to aid growth in the retail sector. The growth and development of organized retailing in India is driven by two main factors lower prices and benefits the consumers can’t resist. The contribution of the organized retail industry in the year 2000 was Rs. an annual increase of 20%. (: Number of Malls in Major Cities of India) Cities Name Other Cities Hyderabad Bangalore Pune Kolkata Chennai Mumbai. There are about 300 new Malls. A Carefully Conceived Design and A Good Management CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 82 . 1. This followed from the saturation in western retail markets and we find big western retailers like Walmart and Tesco entering in to India market. Thane Noida and Ghaziabad Gurgon Delhi 2005 34 8 8 11 10 2 36 15 13 21 2007 86 16 20 23 20 6 71 29 34 51 Source: Crisil According to this year’s Global Retail Development Index India is positioned as the leading destination for retail investment. Malls Innovation by: Efficient Management requires: Integration of the Owner and The Mall Management Team. India’s retail industry accounts for 10% of its GDP and 8% of the employment to reach $17 billion by 2010.500 supermarkets and 325 departmental stores being built in the cities very soon. Navi Mumbai. December 16. First Edition. Tata McGraw-Hill Publishing Co. Consumers will emerge as the emperors of retailing in India with their discerning buying attitudes and their ever increasing purchasing power. 4PS Business and Marketing. Himalaya Publishing House. Image Building in Cooperatives H. Therefore it will be the power of the consumer as well as that of the retailer in the marketing channel that will spearhead the growth of retailing in India. issue 11. 2003. Many manufacturers and marketers may hence take to retailing themselves to be closer to the consumers. These growth opportunities have even attracted global majors who are setting up shop in India. Consumerism will empower them significantly. Mumbai.S. Mumbai. 2007. Retail Management functional Principles & Practices. No. Meenal. Nair Suja. 7. January. Vedmani Gibson G. Mumbai. Channel Management and Retail Marketing.A. No. Retail Vol. Conclusion Retailing in India is becoming increasingly important. 3. First Edition. 2006. Convenient.-6. Well . Contours of Retailing Management. Fifth Edition. Himalaya Publishing House. The growth of the retail sector will make retailers powerful intermediaries in the marketing channel. Jaico Publishing House. Ltd. With consumers now enjoying a wide variety of products and services to choose from. 7. Business India. managing the functioning of the Mall. 4. September. Volume -37. Michad and Weitz A barton.1. Vol.. November 18. 2007. 8. Dhotre. bridging the gap between manufacturers and consumers. Business Today. Retail Management. October-2007.. Vol. 2006. 6.. New Delhi. 9. Indian Journal of Marketing. 5. Chunawalla S. 2. 2007. 10. 10. Mumbai. and organized retailing is posed to grow at an exponential rate. First Edition. Levy. Retailing Management. 6 July-19 July.Team.-2. Technologically Well-Equipped. Himalaya Publishing House.Tangirala CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 83 . No. 2007. Fortnightly Magazine.K. References: 1. Revised & Enlarged. Modern. retailers who provide genuine value will be able to establish themselves in the long run. 2004. Retail.Maintained / Managed and Promoted – Today’s Malls. 2005. 2008.9. Second Edition. . if it is a tool to win over competing organizations. many a times have become a laughing talk as it was made as a centre for corruption. quality and quantity of the product. All these strategies are very common and temporary in dynamic market environment. A customer always wants returns to his every paisa that he spends for the goods he buy. Then … what … ? According to author. it is the image of an organization which makes to remain for a longer period in the market. poor quality of products or services. Many brands participate with different features. government. how the organization is behaving in the market. retailers. it has to have sustainable strategy forever. Regulatory Bodies Government ISSN 0975 – 7953 July - CAMS Journal of Business Studies and Research September 84 . launching vehicle for politicians. To increase the image of the organization. The features might be quality of the product. gifts etc. then. i. it is not only the price. regulatory bodies. prompt in supply. It was evident from the past history that some people have sacrificed for the development of the cooperatives and some people have insulted the cooperatives for their selfish and vested interest. The people involved in the cooperatives have to reckon these facts. outside the market with social responsibility towards customer and how the customer made delighted by the services provided by the organization. If a Cooperative is a garden then there are people who acted as weeds which have to be removed. Keywords: Stakeholders. but also how the organization care the customer. price. The image of the cooperative society depends on the actions which have affect on the above stakeholders. Hence. non-members and society as a whole which is illustrated below with the help of diagrammatic representation.e. distributors. too much of advertisement.Abstract The Cooperative system is a strong vehicle which carries economically weaker section of people to the destination of prosperity and growth. We have seen different stakeholders of a cooperative and sometimes one action have common affect and most of the times different impact depends on the stake of the holder towards the cooperative. the cooperative have to have analytical approach towards each and every stakeholder. These will last no long. Stakeholders. The customer observes. Retailers Introduction In the competitive market every thing is like a war. shareholders. inefficiency. Image of an organization. bankers. Some of the Cooperatives. offers. in this paper an attempt has been has been made to list out the reasons to increase image CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 85 . But there are many such cooperatives and its leaders who have played tremendous role in the economic development of the members and general public as a whole in the form of service. physical infrastructure. The people involved in the cooperatives have to reckon these facts. Taking this environment as backdrop. inefficiency. many a times have become a laughing talk as it was made as a centre for corruption. employment generation. Some of the Cooperatives. launching vehicle for politicians. poor quality of products or services. If a Cooperative is a garden then there are people who acted as weeds which have to be removed.Customer Bankers/Financi ng agencies Shareholders Image of a cooperative Employees Potential Members Other Cooperative Institutions General Public Distributors/ Retailers = towards Activities/Actions stakeholders of = Perceptions of stakeholders and impact on cooperative Cooperative The Cooperative system is a strong vehicle which carries economically weaker section of people to the destination of prosperity and growth. It was evident from the past history that some people have sacrificed for the development of the cooperatives and some people have insulted the cooperatives for their selfish and vested interest. economic participation for the development of the country. - participating in social activities. capability. to shape the behaviour of staff. earth quakes.of the cooperatives and to suggest the methods to build the image of cooperatives to sustain in the cut-throat competition. Methods to increase image of cooperatives Following are the methods slated to increase image of the cooperatives: - - increase the awareness of cooperative system through members education. . providing and maintaining quality services/products to the members timely. skills. plans. tsunami. perception of the members and non-members on the objectives. ISSN 0975 – 7953 July - CAMS Journal of Business Studies and Research September 86 . clients and others.. during floods.. taking right decisions without any political bias. quality of services/products of the cooperative society which have direct reflections on the economic performance in the business and market.to make the public more familiar with its activities. technology and so on to offset negative attitudes. treating employees as assets of the cooperative society. management/leadership style. According to me. activities. .to express that the cooperative society is more innovative and dynamic. conducting timely board meetings and general body meetings. keeping political shoes outside the board room. to grow as a leader in the concerned sector of business. stakeholders and general public.to bring facelift of the organization and to change the misperception and misunderstanding about the cooperative society.e. . . policies. In other words.to avoid of taking a low profile in the market. to increase goodwill in the market. to increase sales and market share. high inflation etc. image of cooperatives is an intangible item i.build a favourable opinion about cooperative addressing its expertise. help people in crisis i. Why cooperatives have to increase its image The cooperative have to increase its image in the public and among its stakeholders for the following reasons: to develop trust among customers. launching cost effective products with quality. cost effective promotional and advertisement to the target group. for the benefit of the cooperative institution. . having concern among other cooperatives.e. farmers. developing public relation activities community involvement. or any other related persons to educate on specific issues. training programmes to the consumers. strictly following the set objectives. professional approach to its leadership to meet the needs of the members. loans etc. following cooperative principles. paying taxes if any to the governments. introducing technology in its operation. by proper house-keeping by consistent profit performance by continuous improvement of services/products by change management in the required areas timely Conclusion The cooperative societies even though do business in small scale when compared to corporate organizations. values. maintaining all books of records. plans. developing mission statement and vision statements. The image building exercise is indispensable for the cooperatives not only to run professionally but also to sustain in the competitive environment. participation in quality improvement schemes not getting involved in controversial issues by the secretary or president of the cooperative society. adapting modern methods of addressing public by way of logo. adopting good governance practices and adhering the rules provisions of State cooperative societies act. developing infrastructure. The above all stated methods to increase the image of the cooperatives are not similar to all sectors of CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 87 . accounts and getting it audited as per rules paying good returns to its members. going for certification of ISO 9000.- - conducting seminars. ethics and values to reach the needy. principles. cooperative slogans. activities. identity as suggested by International Cooperative Alliance(ICA). bringing out in-house journal. repaying the debts. developing and following citizen charter. value additions to the produce of the members. getting timely feedback from the members/customers about the activities and positively acting towards feedback from the various corners. it has its own identity. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 88 .' "Smart Reseller. 7.1999. ask lots of questions. enroll in classes that will build your knowledge base. They have to see which method suits to which sector of cooperative and also local conditions. "Reputation Keeps Business Buoyant. Olins. 6. Ind. To conclude that the image building exercises not only change the facelift of the Cooperative society but also helps lot to enhance and diversify business activities. make the effort to study and learn all you can about your industry and profession.(1991) "Building Societies: Change. May 27. Business Today 25th March 2007. and apply yourself diligently to mastering your duties. Harvard Business School Press. Balmer. Your preparation and diligence will surely pay off in promotions and increased job satisfaction. John M." Marketing. Resources: 1. Strategy and Corporate Identity" Journal 2. 5. Malaysian Business. Nicholas(1992) Corporate Image. Wally(1990) Corporate Identity: Making Business Strategy Visible through Design. Taking any available training. and take the time to develop the necessary work skills. January 10. 8. Glean valuable wisdom from experienced coworkers and solicit input about what has helped them in their career development. Are you working to improve your knowledge and skills? If you want to ensure the success of your business and enhance your own career. take good notes during training. and read business and trade magazines to broaden your perspective.Cooperatives and should not be used as a straight jacket method. If you’re new on the job. 4.T. Esther(2000) "Define 'Reputation. (2002) Leadership 21 C Great Britain Prentice Hall Datuk Michael Yeoh " Enhancing corporate image”. India Chowdary S. 3. Winter. Schindler. of General Management. Make no excuses for not building your skill and knowledge at work. Kogan Page. e. i. Among nine oilseed crops. 25 each rapeseed – mustard growers have been selected randomly from each category of rapeseed – mustard growers. Q100. Key words: Marketing Efficiency.mustard sold has been observed higher in Channel III in comparison to other Channels (I and II) but analysis exhibits that the most efficient marketing channel was Channel II (Producer-Retailer-Consumer). marginal (having up to 1. Marketing Channels. First of all two districts and from each district two blocks have been selected by random sampling method. due to severe market distortions.25 acre land). It ranks second among oilseeds both in respect of area and production in Uttar Pradesh. Q130 Introduction The oilseeds show their own importance after the food grains.So far as marketing efficiency is concerned. Thus the objectives of the present study are (i) to identify market channels for rapeseed – mustard and (ii) to study the price spreads and marketing efficiency under different marketing channels.. Undoubtedly. Percentage Margin JEL Classification: M300.Mustard Crop in Jhansi Division of Uttar Pradesh Ram Kumar Jha Abstract Oilseeds are the important contributor in agriculture after the food grains. Among nine oilseed crops.mustard occupies a prominent place. Thus from each district 150 rapeseed – mustard growers have been selected and total 300 rapeseed – mustard growers and 20 wholesalers and 20 retailers were undertaken for comprehensive study. the area under Rabi food grains was around 44643 thousand hectare and area under rapeseed – mustard crop was 4524 thousand hectares during 2002-03 at all India level. rapeseed . earning foreign exchange and establishing inter-sectoral linkages. it may be inferred that the second channel is the most efficient followed by third and first channel in that order. the quantity of rapeseed. From each block. In spite of this important position. In the same year the total area under Rabi food grains and the area under CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 89 . Q120.25acre land and up to 5 acre land) and large (having > 5 acre land) under the proper irrigation facilities. Out of the total area. Retention Rate. The price of rapeseedmustard oil was erratic. small (having > 1. rapeseed . 75 rapeseed – mustard growers have been selected by stratified sampling method.mustard occupies a prominent place. earning foreign exchange and establishing inter sectoral linkages. It is a chief edible oilseed crop of Rabi Season. both production and yield of rapeseed-mustard was almost stagnant during the last decade.Marketing Efficiency of Rapeseed . It contains rich nutrients to human diet. A multistage stratified sampling method has been adopted to make comprehensive study. It contains rich nutrients to human diet. 17 per quintal. Bhardwaj (1995) and Sahu and Shriwastawa (2000) have done studies on marketing channels.rapeseed . Lalitpur district and Jalaun district. the arrivals and average market price of rapeseed . Jhansi division.03 thousand hectares. margins and price spreads at all India and state levels.25 thousand hectares and 10. Thus.81 thousand hectares and 7.1664. Singh and Ali (1985). Lalitpur district and Jalaun district. 793. The state has the better marketing facilities. it would be imperative to minimize the variance as much as possible. 291.mustard were 4882000 quintals and Rs. Bhardwaj et al. they were not getting the actual price for their products. In fact. and thus explains the variance between the prices received by the producers and those paid by the consumers. Lack of marketing information also affects the marketing system as a whole.33 thousand hectares and 314.mustard oilseed crop were 11538. the production and marketing of rapeseed-mustard is beset with specific problems in addition to the basic problems of proper marketing channels and infrastructural facilities. Singh and Kaur (1990).08 per quintal. Kaur and Singh (1989). The relationship between the producers and consumers price is manifested by what is known as the price spread. 94415 quintals and Rs.19 thousand hectares. 187. But the farmers sold their agro products at village level. which discloses the proportion of various components of the marketing cost of the production.21 thousand hectares and 2. It contains 243 Mandi Samities to arrange the real value of farm products.33 per quintal respectively in Uttar Pradesh. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 90 . Kainth (1982). However. In the year 2002-03.86 thousand hectares and 0. Lack of storage facilities and sudden requirement of money create another hurdle.25 per quintal and 75595 quintals and Rs.33 per quintal.1831.37 thousand hectares. Jhansi district.. 22444 quintals and Rs. costs. 192454 quintals and Rs.1713.1736. Jhansi district. the marketing channels play an important role to get better price for the products. Verma and Nigam (1979). Nandlal (1985). In order to secure a sizable share to the producer. (1996). Therefore. Singh and Sidhu (1973). Narappanavan and Bardwaj (1983).33 thousand hectare respectively in Uttar Pradesh.95 thousand hectares and 560.1465. the price spread is a broad spectrum. Jhansi division. The efficiency of marketing of rapeseed-mustard produce is assessed by the size of the share that the producer obtains in the ultimate price paid by the consumers. The lack of proper marketing infrastructure and transport facilities aggravate the problem. Farm size is really an index of retention power.37 percent for small. medium and large sized holdings respectively. They found in their study that “the maximum percentage of the produce of the cultivators forms the marketable surplus and out of it very small percentage is kept for home requirements. They observed that variations in arrivals of groundnut were from 88 to 98 percent in the post harvest period and from 1. Percentage margin over producer price tends to rise from 10 percent when there is no actor between the producer and the purchaser to 24 percent when the wholesaler and / or the village merchant enter between the producer and the miller. its price reached its peak in the month of November and its lowest level in the month of March.55 and 81. The reviews of earlier studies are as below: Singh and Sidhu (1973) have made study on groundnut crop in Punjab regarding the assessment of the level of marketable surplus. The economy of Jhansi division is mainly based on agriculture and service sector. seed and family consumption was about 4 percent. the findings of the studies have been undertaken and review so that the study becomes to proceed. Therefore. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 91 .06%) holdings. According to him “Marketable surplus was about 96% in Amritsar district and the retention for feed. The marketable surplus was high on large holdings (86. Kainth (1982a) has also made study in Punjab regarding rapeseed – mustard crop. According to her the purchase price tends to increase over the producer price with the number of market actors. The marketable surplus was observed 78. 87. when some of these actors add value to the commodity in the marketing channel. Gupta (1996) has observed in her study that in the case of rapeseed – mustard. Therefore. agriculture is the main source of income of majority of people and its proper marketing enhance the volume of income.17%) as compared to small (79%) and medium (71. - - - The studies are helpful to make an effort to complete a study on rapeseed-mustard marketing at Jhansi division of Uttar Pradesh.27 to 4.Thus the objectives of the present study are (i) to identify market channels for rapeseed – mustard and (ii) to study the price spreads and marketing efficiency under different marketing channels. Kaur and Singh (1989) have made a study at Khanna and Sahnewal market. Review of Literature Many research scholars have put their effort to make study in the field of marketing of rapeseed-mustard produce.95. particularly so.96 percent in the lean period. loading and unloading. costs or price spreads were calculated during the peak marketing period (April to May) for the year 2002-03. From each block. gunny bags. Price Spread of Rapeseed . brokerage. Percentage Margins at Producer’s Prices CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 92 . expenses incurred such as transportation charge. market fee.. First of all two districts and from each district two blocks have been selected by random sampling method. marginal (having up to 1. To work out the farmer’s share in the consumer’s rupee the total marketing costs incurred by the farmers were deducted from the price they received. To know the marketing behaviour the information on prices received for the produce. 75 rapeseed – mustard growers have been selected by stratified random sampling method. average of marketing costs and prices of the selected market for the post harvesting period was considered.25acre land and up to 5 acre land) and large (having > 5 acre land) under the proper irrigation facilities. small (having > 1. Therefore. which comprises three districts: Jhansi. The marketing costs and margins have been calculated on a per quintal basis. weighing and purchase tax have collected from the selected regions.e. The sale prices of the wholesalers and retailers were calculated as the simple average of the sale prices reported by the selected traders during the peak period. filling and sewing. i. Lalitpur and Jalaun. 25 each rapeseed – mustard growers have been selected randomly from each category of rapeseed – mustard growers.Mustard Crop The marketing margins.Research Methodology Area of the Study The universe of the study is Jhansi Division. Thus from each district 150 rapeseed – mustard growers have been selected and total 300 rapeseed – mustard growers and 20 wholesalers and 20 retailers were undertaken for comprehensive study. The marketing costs such as transportation costs varied from individual to individual and the prices also varied from farmer to farmer because prices mainly depend upon demand and quality of the product.25 acre land). A multistage stratified random sampling method has been adopted to make comprehensive study. The reference period was 2004-05 agricultural year. the producers directly take their rapeseed.mustard produce directly from the producers at the village level and they save marketing expenses on it.57) 1915 (29.The percentage margins for a product at producer’s prices were computed as the ratio of the difference of purchaser’s and producer’s prices to producer’s prices multiplied by hundred (Gupta. Farm Size Group Total Productio n of RapeseedMustard Markete d Quantity Retentio n Total No. = Pcr − Pps Mc ×100 Where. of Farmers I (P-C) No. of Farmer s 22 (22.00 CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 93 .43) 100 (100.70 ) No. Sometimes. But at the time when supply increases consumers pay a significantly lesser amount to the producers for their produce. M.69 ) 29 29. Some consumer’s purchase rapeseed . Pps Pcr MC = = = = Marketing Efficiency Producer’s Selling Price Consumer’s Retail Price Marketing Cost Results and Discussion Marketing Channels and Sale The existing marketing agencies of rapeseed-mustard crop to which the sampled farmers disposed of their surplus produce was found to be wholesalers and retailers. Marketing Efficiency The marketing efficiency of different channels has been worked out through the following formula: M .mustard produce to sell to the consumers. 1996 and Prakash et al.61 ) No. 10-15/quintal more than the market price but in turn save all other marketing expenses. of Farmers 1.) Sr.E. 2007). They pay Rs.. Table: 1. No . Marketing of Rapeseed – Mustard in Different Channels (Kgs. of Farmer s 49 (49.00 ) 950 (20.E.00) III (P-WR-C) 1865 (40. Margina l Farmers 6507 4592 (70.00) Marketing Channels II (P-RC) 1777 (38. 05% (12550 kg) for the respective categories of farmers. With the help of this channel marginal.71 ) 60 (60.90 ) 1155 (2.W. (II): (P. 3. Channel II: Producer – Retailer – Consumer The retailers who purchased rapeseed-mustard on their own account from different villages earned profit by purchasing the produce at a lower rate. sold their produce during the peek period with the help of this channel.60) 24 (24.00) 4 (4.95% (44375 kg) rapeseed-mustard were sold in the market by marginal.R.00 ) 955 (11.C): Producer –Wholesaler – Retailer – Consumer Table 1 shows that 70.00) Source: Primary Survey Percentages are given in the parenthesis.22 ) 40695 (91. Small Farmers Large Farmers 11340 56925 8040 (70.C): Producer – Retailer – Consumer (III): (P. Channels: (I): (P.00) 1600 (19. In the study.69) 15 (15.60% produce to the retailers respectively (table 1).C): Producer – Retailer– Consumer (III): (P.C): Producer –Wholesaler – Retailer – Consumer Channel I: Producer – Consumer It is observed that producers directly sold their rapeseed-mustard produce to consumers (expellers.00) 21 (21.R.90) 44375 (77.90% (8040 kg) and 77.2.C): Producer – Consumer (II): (P. 19. who were in need of money at certain times to fulfill their daily wants.43% (1915 kg). 70.00) 5485 (68.00 ) 100 (100.10) 12550 (22.R.95) 3300 (29. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 94 . The retention rate was recorded 29.10% (3300 kg) and 22. 29. This implies that the farmers.00) 75 (75. Table 1 shows that channe I is more preferred by marginal farmers (22%) and by large farmers (21%) and followed by small farmers (15%). the following channels have been identified:(I): (P.W.C): Producer – Consumer.57% (4592 kg).70%.R.88 ) 2525 (5. small and large farmers sold 38.90% and 2. shopkeepers and home consumers) in urban areas.05) 100 (100. small and large farmers respectively. cleaning. filling. In this channel the producer sells to retailers and retailers sell to consumers. Channel III: Producer – Wholesaler – Retailer – Consumer A majority of farmers of all farm size groups preferred to sell their produce to wholesalers. cloth and other daily need goods to the farmers and thus earn a good profit.mustard at a higher price. sieving. 68. This channel was observed more preferable in all groups of rapeseed . Many commission agents sell pesticides. fertilizers. Mostly they provide free tea and night stay facilities to the farmers. dressing and weighing of the produce. The producer’s share in the price paid by the consumer has been observed reduced. tealeaves.This implies that a few rapeseed-mustard growers use this channel.22% and 91.71% rapeseed . 60% and 75% marginal. They offer services such as space for unloading. commission and market fee are paid by the wholesalers.mustard produce (table 1) respectively.mustard growers because producers felt assured of a regular cash inflow. The price of rapeseed.61%.mustard rose due to the entry of the retailer. In the channel producers sold their produce to wholesalers and wholesalers sold to retailers and retailers sold to consumers. This implies that the profit share of producer reduced while the consumers got the rapeseed. This channel is very common for all categories of farmers. weighing. With the help of this channel 29%. The commission agents act on behalf of the wholesalers. The charges for services like. Price Spreads of Rapeseed-Mustard CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 95 . They generally charge commission from the buyers for their services to the farmers. small and large farmers sold their 40. The end price of the produce is quite high and the producer’s share in the price paid by the consumer has been observed quite low. Wholesalers are mostly the financiers of commission agents. 44 1884.74 (11.43 (9.79) Large Farmers (I) P-C 1884.93) (III) P.50 (76.66 253.94 (II) P-R-C 1698.78 (76.38 (69.14 69.50 (71.44 (II) P-R-C 1639.25) 1698.04 2167.84) 70.Price spreads or market margins are often used to work out the efficiency of marketing system and traders.67 (4. /Quintal) Marginal Farmers Sr. No.82 (76.85 251.24 1970.02) 112.00 (3.92) 4.17 (79.88) (c) Retailers margin 280. Particulars (I) P-C 1.18) 112.44 240.12) 280. Net price received by producer 2(a) Producer’s whole sale/ sealers 1867.94 (70.00 (3.67 (5.04 (II) P-R-C 1650.05 (12. Producer’s share 100. (i) explicit costs paid for the performance of various marketing functions and (ii) profit of the market intermediaries.80 (10.14) 213.74) purchase price wholesalers cost (b) consumer 5.43 (9.26) 213.36) 1552. Table: 2.03) 1722. Market margin comprises of two elements.05 (12. Price Spread of Rapeseed Mustard in different marketing channels (Unit: Rs.W-R-C 1662.50 (71.13) Wholesalers (c) 3(a) margin Producer’s/ wholesaler’s sale/retailer’s purchase price (b) Retailer’s cost 235.94 (70.71 (10.38 (69.95 100.22) 2314.78 (76. Price paid by 1867.94 239.51) 213.84 in consumer rupee CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 96 . Efforts to increase production may require an efficient marketing system to carry the product from the producer to the consumer.77 (75.36) 70.50 (76.32 257.43 (9.66) 2212.93 70.97) 1639.93) Small Farmers (I) P-C 1970.00 76.79 71.W-RC 1561.14) 112.00 75. The details of price spreads for rapeseed mustard of Jhansi division is worked out and presented in table 2.11 (11.99 (11.88 (75.54) 2238.00 76.W-R-C 1552.05 (12.84) 1662.84) 280.95) 1561.79) (III) P.36 100.12) 1744.70) 2201.14) (III) P.67 (5.87) 1845.97) 2159.54 (79.36 (11.11 1650.00 (3.95) 70. i. Out of the three channels in the marketing of rapeseedmustard the farmers received the highest share in channel I.mustard to wholesalers.Consumer through which a major portion 40. unloading. 5.13%.22% by small farmers and 91. So. sales tax.93% and 70. The total expenses incurred by wholesalers include expenses on loading. 68. commission. the most common marketing channel is channel III. 75. The commission agents sell rapeseed . it has been found that the commission agents who were not shown in the marketing records also made some purchase. The price spreads varied from cent percent to 76.36% for marginal farmers.mustard at very high price.71% by large farmers (table 1). Wholesaler’s Margin Wholesalers play an important role in the marketing of rapeseed mustard.03%. consumers got rapeseed.14% and 69. the percentage share of the wholesaler in consumer rupee works out to 5.61% by marginal farmers. The total marketing and incidental charges of the wholesalers were found to be 3. However. small and large farmers respectively in channel III. The producer’s share in the consumer rupee for all category of farm size is cent percent (channel I).87% with marginal.. Retailer’s share The retailers mostly purchased the product from wholesalers.Wholesaler .e. etc. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 97 . 3.84% for large farmers in channel II and channel III respectively (table 2). However.79% and 71.12% and 4.(%) Source: Computed Producer’s Share The price spreads varied from channel to channel. sieving and filling charges.95% for small farmers and 76.18% and 3. market fee. small and large farmers respectively (table 2). Producers . This variation in the percentage share may be due to the difference in the number of agencies working in a channel.Retailer . After deducting all the costs. As per market records cent percent purchase is done by the wholesalers.02% in the case of marginal. The retailers paid high price to the wholesalers for the product. W-RC 1552.00 76. Marketing (Rs. Marketing Efficiency of Rapeseed.Mustard in Different Channels (In Rs. particularly so when one or more of these functionaries add value to the commodity in the marketing channel the producer’s share in the consumer’s rupee falls.71 40.01 00. small and large farmers respectively.71 370.51% and 11.78 (III) P.00 75.92%.00 31.The total marketing cost on retailers worked out at 10. When the retailers and wholesalers are involved in the channel the margin tends to increase in all the selected three regions.22% in channel III with marginal./Quintal) 4. 11. Particulars (I) P-C 1. This difference will magnify if some of these intermediaries process and add value to the product.88%.85 2238. 9.04 (II) P-R-C 1650.54%.93 70. Table: 3. Percentage margin at producers price 6. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 98 .79 71.35 44.12% and 10.11 cost 235.23 39.88 WLarge Farmers (I) P-C 1884.18 00. After deducting all the costs the percentage share of the retailers in consumer’s rupee works out to 12.52 197. 12. The larger the number of intermediaries involved in a marketing channel.95 100.00 30.00 214.44 1884.04 2167. The above analysis on marketing costs.84 1867.14 69.32 2314. / Quintal) 2. margins and on price spreads reveals that as the number of market functionaries tends to increase.99 240.26%./ Quintal) 5. In the smallest market channel (channel I) the percentage margin at producers’ level is zero.77 (III) PR-C 1561. each intermediary tends to gain. Consumer’s (Rs.36 239.24 1970.44 2159.00 216.66 2201.66% in channel II and 9.00 76. in the case of marginal.40 213.80 321. Producer’s price (Rs.W-RC 1662.79 00.92 00.00 31. Percentage Margins at Producer’s Price In the marketing channel. Producer’s share in consumer rupee (%) 3.94 2212.70% and 9.00 219.38 Small Farmers (I) P-C 1970.11 323.36 100. No. Marketing efficiency 00.97% and 12.23 175.50 (III) P.84% in channel II and 11. 11.14% in channel III. small and large farmers respectively (table 2).95 00. These facts are well supported by table 3.41 100. /Quintal) Marginal Farmers Sr.94 (II) P-R-C 1698.50 Source: Computed. the more shall be is the differential between purchaser’s price and producer’s price.44 (II) P-R-C 1639.19 price 1867. The producer’s share in consumer’s price has been CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 99 .19% in channel II and channel III respectively (table 3). it may be inferred that the second channel is the most efficient followed by third and first channel in that order. In fact the price spread is a broad spectrum. The marketing cost has been observed to be quite high in the channels where a number of market intermediaries have entered into the marketing system. The relationship between the producer and consumer’s price is manifested by what is known as price spread.35% and 44. which the producer receives from the price paid by the consumer. Marketing Efficiency Marketing Efficiency of any product is worked out by the size of share.95% and for large farmers 30. In nutshell. the price of rapeseed-mustard has inflated 76. price spread refers to the difference between the price paid by the consumer and price received by the producer. Depending upon their constraints they tend to make the maximum use of the market information.23% and 39. while producers share may be said to be slightly better in consumer’s price in channel II.71% and 40. for small farmers 31. In Jhansi Division. Conclusion From the analysis of the study the following facts can be drawn. wholesalers and retailers. The producer did not receive same price in the regions. which ultimately reflect the overall effectiveness of the marketing system.. It varied due to involvement of market intermediaries’ viz. which becomes available to them. So far as marketing efficiency is concerned.The percentage margins at producer’s price for marginal farmers are 31.e.. This implies that rapeseed-mustard producers of all the three regions are rational farmers. it explains the variance between the price received by the producer and that paid by the consumer. Table 3 depicts that producer’s share in consumer’s price is highest (100%) in channel I (Where there is no market player i. which consists of various components of the marketing cost and margins of intermediaries.18%.14% in channel II to 69. the producer’s share in consumer’s price has reduced in channel III. In other words. intermediary) in the selected region.36% in channel III in case of marginal farmers (table 3) and followed by small and large farmers. In other words. Why does the consumer’s price increase? The consumer’s price increases over and above the marketing cost indicating value addition through various channels. 10 p. KPS. The efficiency of channel II has been 216. 3. Further in nutshell.. Anmol Publications Pvt. This encourages the farmers to increase the area under particular crop and they will be assured to get appropriate price for the crop. Spl.P. p. 118. Pandey. 72-73. It is also suggested that the cultivators should form their own marketing cooperatives to sell and process their produce of oilseeds. it is recommended that in order to secure a sizable share to the producer. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 100 .52%. “Study of Marketing of Broiler in Haryana”. The sale of rapeseed. Indian Journal of Agricultural Marketing. the marketing cost spreads while the producer’s share in consumer’s price decreases. The price of rapeseed-mustard increased over and above the marketing cost due to value addition in Channel III. It is well known that when market intermediaries are involved. New Delhi. This may increase the income of the farmers as well as prevent speculative hoarding in edible oils. but for Channel III it has observed 197. References: 1. 'Marketing of Agricultural Products'. Mirman. Gupta. Ltd. MS Kaushik (1996)..recorded cent percent in Channel I because there was no market intermediary player. S. There is also a need of a suitable price policy which will be helpful to control fluctuation of price.mustard in comparison to Channel III (Producers-Wholesaler-RetailerConsumer).mustard sold has been observed higher in Channel III in comparison to other Channels (I and II) but analysis exhibits that the most efficient marketing channel was Channel II (Producer-Retailer-Consumer). The producer directly sold his produce to the consumer but producer faced a problem of regular cash inflow. Undoubtedly. In view of the findings of the study.79%. 2. Vol. S. “Study of Cost Behavior and Marketing Margin in Poultry Products: A Case Study of Broiler”. Bhardwaj. (1995). it can be concluded that on the basis of observations.P. (1996). S. KPS. it would be imperative to minimize the variance as much as possible. The government agency should also come forward to help them. on an average the producer’s share has been found moderate where as the wholesalers and retailers along with marketing cost contribute to price spreads. Indian Journal of Marketing. 86. Conf. the quantity of rapeseed. Bhardwaj.mustard recorded quite low in Channel I in comparison to other marketing channels. This channel not only paid higher profits to producers but also provided to consumers at cheaper rate the rapeseed. pp. Shakti Prakash.. IV. "Estimating Marketing Efficiency of Chicken (Fowl) Farms: An Empirical Analysis”. G. 1(January) Hyderabad. K.4. Akanksha Singhi. ICFAI Journal of Agricultural Economics. Sapre. 36-42. Prakash. No. Ram Kumar Jha. Vol. pp. CAMS Journal of Business Studies and Research September ISSN 0975 – 7953 July - 101 . A. (2007).