XAVIER INSTITUTE OF SOCIAL SERVICE

PROJECT REPORT ON

A STUDY OF THE MARKETING PRACTICES OF JHARCRAFT

UNDER THE GUIDANCE OF PROF. A. R. BODRA

[H.O.D, Department of Marketing Management, XISS Ranchi]

SUBMITTED BY;
AAKASH BARA (04) AMAN MANISH LAKRA (07) ABHIJEET JOHN TOPPO (11) NAVNEET TIWARY (48) AMLAANCHATTERJEE (08) DEEPAK TOPPO (05)

ACKNOWLEDGEMENT
It gives us immense gratification to place on records our gratitude and sincere appreciation to each and every one of those who helped us in this endeavor. We extend our deep gratitude to the management of Jharcraft, who allowed us to carry on this study on their organization. We would like to extend our special thanks to Miss. Archana Shephali Kongari (Marketing Manager) and other support staff at the various retail outlets of Jharcraft, who answered our queries sparing some time from their busy schedule. We would also like to extend our sincere thanks to our esteemed faculty & guide, Prof. A. R. Bodra for his continuous guidance, magnificent support & cooperation to initiate & carry out the study & illuminated us through his knowledge. I humbly acknowledge his affectionate guidance & constant encouragement. He guided & mentored us throughout and helped us to the best of his knowledge in carrying out this study. Last but not the least, we would again like to thank all the people who helped us in carrying this study in some way or the other & any omission in this brief acknowledgement does not mean lack of gratitude.

Date: 10th March, 2013 GROUP MEMBERS

AAKASH BARA (04)

DEEPAK TOPPO (05) AMAN MANISH LAKRA (07) AMLAANCHATTERJEE (08) ABHIJEET JOHN TOPPO (11) NAVNEET TIWARY (48) PLACE: RANCHI

EXECUTIVE SUMMARY
The project of MARKETING IN PRACTICE A study of the Marketing practices of Jharcraft was initiated to study the marketing & various distribution and Taxes system made by Jharcraft along with the market potential of their products market. The project delves deeper and is illustrated with flowcharts and diagrams, how the overall process is accomplished i.e. from the sourcing of raw materials till the final delivery of the product. The information collected is ascertained with the financial implications to get a holistic view of the organization and its various functions. The project was carried out with the objective of trying to learn how a retail format, such as Jharcraft under a government works along with its core competencies. Their business model, their logistics and supply chain, their

methods of procurement of raw materials and their profit sharing and value delivery process along with the tax system. On conducting the project, many interesting inferences were brought into light. The project report consists of many such observations and enquired approached to the various facets of rural marketing. There were several learning about the intricacies about the store layout, their business model, their competitors, their target consumers, their customer and brand loyalty building activities and most of all their profit sharing objectives.

INTRODUCTION
Jharkhand Silk Textile and Handicraft Development Corporation Ltd. (JHARCRAFT) is a govt. of Jharkhand undertaking under Industry Department and is registered under section 26 under Companies Act. 1956. It was incorporated in the year 23rd August 2006. It was established to develop and support sericulture farmers, weavers and artisans living in remote areas of Jharkhand. The organization is entrusted with the role of implementation of the Government funded schemes to promote Tasar Silk, Handloom and Handicraft of the state. Jharkhand is well known for Tasar Silk production. The process of making Tasar silk is similar to the production of the mulberry silk. Tasar Silk is produced in the districts of West Singhbhum, East Singhbhum, Seraikela, Dumka, Deoghar, Pakur, Godda, Dhanbad, Sahebganj, Palamau, Garhwa and Simdega.

Sensing the potential of silk government of Jharkhand, took many steps for the development of this sector. The first step was to organize Tasar silk production. Now the state is the leading producer of Tasar silk in the country. TREND IN GROWTH INDEX OF NON-MULBERRY SILK IN INDIA

FACTORS INFLUENCING PURCHASING DECISION OF HANDLOOM AND HANDICRAFT ITEMS:

99% 100% 90% 50% 70%

QUALITY

DESIGN

AVAILABILITY

PRICE

VARIETY

BRAND

40%

 PRODUCTS GENERALLY DEMANDED IN DIFFERENT OUTLETS

70% 60% 50% 40% 30% 20% 10% 0% sarees suit pieces cotton apparels material kurta ethinc wear 28% 43% 56% 52% 45%

61%

PREFERENCE OF CUSTOMERS FOR PURCHASING HANDLOOM AND HANDICRAFT PRODUCTS

[CATEGORY NAME] [PERCENTAGE] [CATEGORY NAME] [PERCENTAGE]

[CATEGORY NAME] [PERCENTAGE]

[CATEGORY NAME] [PERCENTAGE]

ABOUT JHARCRAFT
The state government of Jharkhand with its department of industry took a very keen interest in providing a platform to all the traditional rural artisans of the state. To promote the richest ethnic traditions of the state in our country and abroad and act as a facilitator for the rural artisans, the state government formed- Jharkhand Silk Textile & Handicraft Development Corporation Limited (JHARCRAFT). Jharcraft was started, in the year 2006, as

an organization to create new opportunities in the rural areas and promote the cotton textiles, silk textiles, jute products, woolen textiles, readymade garments, hand- crafted textiles, cane and bamboo products, etc. and to revive the unique culture expressions of the state and its people.
MISSION OF JHARCRAFT - 'CREATING OPPORTUNITIES & CHANGING

LIVES'.

The main objective of Jharcraft is to provide a marketing place for the merchandise manufactured by the local artisans, SHGs, & NGOs. The organization also provides all types of support in terms of finance, raw materials, design assistance, marketing, etc. The organization pays major attention that the local artisans and unprivileged section of the state get maximum benefit through Jharcraft.
VISION OF JHARCRAFT - JHARCRAFT: A STRONG BACKBONE OF THE

JHARKHAND STATE'
EXISTING COMPETITORS

FABINDIA: Its primary competitor and have a national presence along with an established brand name. TRIFED: The Tribal Cooperative Marketing Development Federation of India Limited (TRIFED) is one its kind like Jharcraft (at times in collaboration with Jharcraft) has is predominantly dominant in a few pockets of India. SMALL NGOS AND SHGS: They are an existent threat in the penetration of Jharcraft albeit on a smaller scale.

PRODUCT LINE OFFERED AT STORES

TASAR SILK

DHOKRA ART WOOD CRAFT LEATHER CRAFT (VEGETARIAN LEATHER) BAMBOO FURNITURE CANE FURNITURE SILVER JEWELLERY PAPER CRAFTS HAND EMBROIDERIES (KANTHA, ZARDOSI, SATIN STITCH) PAINTINGS(SOHRAI,KONBER,JADPATIA)

BUSINESS MODEL
The model practised in Jharcraft is an end to end model without the involvement of intermediaries. Jharcraft primarily functions in four domains, i.e. Sericulture, Handicrafts, Handlooms and Rural Marts. The entire business of Jharcraft is based on the working of:
1. SELF HELP GROUPS 2. NGOS 3. ARTISANS AND WEAVERS

Everything from raw materials procurement till the final delivery to the consumer is watched over by Jharcraft. The raw materials are procured either from the in house farms (for silk) or is sourced cheaply from respective suppliers or government organizations and passed on to the clusters (a group of villages in a particular and well defined area).They ensure that they get the raw materials of the finest quality. The price of raw materials are paid by the clusters (overseeing by a project manager) to Jharcraft and henceforth the manufacturing process (in accordance with the skill sets and training provided by Jharcraft) takes place They are then handcrafted and the products are bought from these self-help groups allowing a profit to the workers. The final/finished products are again bought in by paying a price {i.e. Cost price of raw materials + labor

charges + price premium (if any)} adequate for the rural people. This is where the role of these artisans and weavers end. The procured finished products are then transferred to the corporate office where they undergo quality checks and are finally transferred to the various retail outlets located across the country and world-wide. The retail outlets are company ones with the standards and the shop outlook set by the designers from the company.
OWN SHOWROOMS TRIFED SHOPPERS STOP EXIM BANK EXHIBITIONS

VILLAGE CLUSTER S

PROJEC T MANAGE

JHARCRA FT

SELF RELIANT GOVT. AGENCIES

ARROW DEMOTION

NGOS/ SHGS

PROCUREMENT OF RAW
FLOW OF FINISHED PRODUCTS

The sericulture forms a very important part of their operations and they particularly specialize in Tasar silk form. They are involved in every step of silk manufacture and make sure that the silk of highest quality is obtained

each time. The raw silk obtained is then sent to reeling, spinning and threading unit where silk is finally made. If a product is being made for Rs 15 a middle man or other competitors would buy that product for Rs 16 and sell it for Rs 20. However Jharcraft is a Jharkhand government initiative and they buy the same product for Rs 17 from the artisans and weavers and sell it for Rs. 18. Hence operating at a very low margin. Retail marts are set up in various villages to make rural consumers aware about the product and about various brands available in the urban markets. It is an attempt to generate brand awareness among the rural consumers and make them brand conscious. The marts are generally situated in the interior areas of the village and cater to a particular village. However they also supply to a few local retailers that open their shops on highways to make accessibility for other villages nearby easier.

LOGISTIC MODEL
Their training units are located in Kharsawa, Bhagaiya and Godda. The manufacturing units are located in zones all over Jharkhand include Hazaribagh, Jasidih, etc. from these zones products come to Ranchi to their corporate office to undergo quality checks and as per the order the products are then sent to the various retail outlets and then to the end consumers. Since, raw material procurement is done by Jharcraft itself, so the flow of goods takes place in the following way.

MOVEMENT OF HANDICRAFT PRODUCTS

RAW MATERIALS

(BAKSAR,
KHARSAWA ETC.)

RAW MATERIALS

HEAD

OFFICE
(RANCHI)
F I N I S E D G O O D S

R A W M A T E RI A LS A

HANDICRAFT
CLUSTERS

EMPORIU M, FAIRS, ETC

OBSERVATIONAL ANALYSIS & INFERENCES FROM OUTLETS

The following information was collected through observations at the Jharcraft retail outlet located at Main road, opposite Big Bazaar.
STORE LAYOUT CONSISTS OF FOUR FLOORS

 FIRST FLOOR CONSISTS OF MALE SHIRTS AND KURTAS. SECOND FLOOR OF FURNITURE AND HOME DECORS. THIRD FLOOR OF HANDICRAFT AND PAINTINGS FOURTH FLOOR OF APPARELS MALE AND FEMALE.

SAMPLE OUTLAY FORMAT

SILK SAREES (TASAR)

LINEN SHIRTS

COTTON SHIRTS

RECEPTI ON

D O O R

TIES

WALLETS

D O O R

SILK KURTAS & SHIRTS

LINEN KURTAS

COTTON KURTAS

INTERPRETATION OF THE LAYOUT

The door was situated on the right of the showroom. As the consumer enters the shop his first line of view would hence be towards the left hand side. The first thing hence which falls on the sight of consumer would be the silk shirts & sarees. This tells us two things. Silk shirts & sarees are probably the most costly apparels that are available in the shop

hence they want the attention of the consumer to first fall on the highest cost and finest quality products. Hence increase their probability of sale. On the right hand side are the kurtas. This shows that the store is in line with modern trend but also has deep rooted culture calling. The reception is towards the inside which is probably a very good thing as far as telling the consumer that we are more interested in providing quality products to the consumer and not in earning profits.

MARKETING CHANNELS

DISTRIBUTE WAREHOUSE Manufacturing by the NGO&LOCAL ARTISIANS

EXCISE DUTY

COMPANY
COTTON, SILK & WOOLEN TEXTILES, HANDICRAFTS, SOAP,

AGARBATTI, FURNITURE, MUSIC INSTRUMENTS, ETC

CENTRAL SALES TAX

Manufacturing BY THE SHG

COMPANY OWNED OUTLET (MUMBAI)

COMPANY OWNED OUT LET (RANCHI)

COMPANY OWNED OUTLET

(DELHI)

VAT@ 14%

Customer
Customer

Customer
Customer

DISTRIBUTION CHANNEL
Jharcraft uses forward as well as backward integration strategies in their distribution channel to reach their customers Reducing the intermediaries has one of the major objectives of this organization to increase their profit margin Barring out the wholesalers from the system creates an effective and efficient distribution channel Now to increase their reach create a brand awareness into the minds of the customer Jharcraft has its own exclusive outlets in all the major cities This short distribution channel prevents from shortening the gap between the supply and demand gap Backward integration gives it a leverages from procurement of raw material to the finished products with less lead time Forward integration benefits to create the right positioning into the minds of the end customers with help of met market & met space This company owned outlets does work as a below the line advertisement equipment The company uses a selective distribution strategy

SELECTIVE STRATEGY NO OF OUTLETS OUTLETS PRICE TYPE OF PRODUCT PURCHASE FREQUENCY PLANNING REQD OF BUYER MANY FEW MEDIUM SPECIALITY OCCASSIONALLY MEDIUM