INTRODUCTION TO THE SPICE INDUSTRY

The story of Indian Spices dates back to 7000 years into the past. It is a chequered history of lands, discovered or destroyed, kingdoms built or brought down, wars won or lost, treaties signed or flouted, favors sought or offered. India has been the home of many important spices like pepper, ginger, turmeric, chilies and cardamom since ancient times. hen added in preparation of vegetables, pickles, chutney and sauces, the species enhances the appetite and palatability of the food products. Spices are called the nature!s special gift to the humankind. The species e"tracts #oils and oleoresins$ are also very useful as medicinal ingredients in %harmaceutical industry.

In ancient times, spices were used as preservatives, perfumes and medicines. Today, spices are an indispensable part of every household. They play a significant role in our cooking. &vailable in different forms, spices are used to flavor food and to make foods tastier. &bove all, spices play a significant role in the economies of many countries. India is one such country where different types of spices are available. 'rom ancient times India has been a ma(or trade center in spice map of the world. This was a point etched in the history when )asco d *ama landed in +alicut on the the est +oast of India in the year ,-./, and set of the transaction of spices between India and estern countries. 0ature has always been bounteous over India terrain, and its rich spice tradition. The 1nited States is the largest importer of spice in the world followed by leads e"port league of spices. est *ermany. India

India has been the world!s largest producer 2 e"porter of spices, meeting one third of the global demand Spices of India retain their natural aroma 2 flavor for a long time, so one can have them fresh even though they are thousands of miles away from India. The e"port market of this commodity has been taking giant leaps. ithin the past one decade the international trade in spices has grown by leaps and bounds. &n estimated 300,000 tones of spices and herbs valued at ,300 million 1S dollars are now imported globally every year. &n impressive -45 of this supply comes from India. India6s e"ports of spice e"tracts have shown spectacular growth attaining over 30 percent of the global market within a short span. 7ver the past decade, the Indian Spices industry has made quality the cutting edge of its global game plan.

In recent years, e"port of Indian Spices has been taking giant leaps. The Indian e"port of spices has crossed the -30 million 1S dollar mark during ,...8 9000 and has reached -4/ million 1S dollar. This remarkable achievement is born of a sea change in the industry scenario. 'rom traditional commodity e"ports, Indian Spices have evolved into a state8of8 the8art industry. &bsorbing technology, broad basing its products range, developing value added products, identifying niche markets, forging strategic alliances clinching global collaborations and (oint ventures. Spices constitute an important group of agricultural commodities, which are virtually indispensable in the culinary art. They can be primarily defined as farm products used in various forms like fresh, ripe, dried, broken, powdered etc. which contributes taste, flavour, colour to food.

INTRODUCTION TO COMPANY :amdev ;asala is a very old and reputed name in the market of spices in *u(arat. Shri :ambhai %atel, pioneer of the company started a floor mill at Saraspur in ,.4< where chilly, turmeric and coriander were branded. =ater in ,.79 at small scale they started selling their own grinded spices in loose packing as per the demand of the consumers. *radually their business grew and on 4th >anuary ,./. ?:amdev 'ood %roducts =td.@ was incorporated and loose packet were sold under the ?:amdev ;asala@ brand. 'or marketing retail counters setup at ;adhupura, Aapunagar, Saraspur, ;anek +howk, 0aroda, Bhokhara, Balol and ;ehsana. In ,.., company launched different types of Instant ;i".

:amdev is mainly a food product company, engaged in grinding, packing and marketing the spices, instant mi" and asafetida. :amdev changed the trend of buying to &gmark quality products. It!s the first company in India to get Trade ;ark for food products in spices. In ,../ company divided into three companies i.e. :amdev 'ood %roducts =td. :amdev ;asala. :amdev C"ports.

In which :amdev ;asala and :amdev C"ports is being handled by ;r. &rvind %atel and :amdev 'ood %roducts =td. Ay ;r. Dasmukh %atel and ;r. %ravin %atel. In year ,... ;r. &rvind %atel started poly pouch spices and instant mi" under the brand SWAD which has covered almost all the parts of *u(arat. Hierarchy Of Company

Mr. Arvind Patel

Mr. Chirag Patel Marketing Factory Handling E !ort Division

Mr. Rakesh Patel Finance

Prod"ction

Factory Handling

#"ality

P"rchase

$egal

Marketing Hierarchy Sales personnel serve as the company!s personal link to the customers. The sales representative is the company to many of its customer. It is the sales representative who brings back much needed information to about the customers. The company has 7 sales supervisors and 9/ sales representatives for selling and marketing tasks. The company!s marketing hierarchy is as follow,

Marketing Manager

Sales E ec"tive

Sales S"!ervisors

Sales Re!resentatives

Distribution Channel The company has two types of the distribution channel that is, Eero =evel, where the company does selling directly to the final customers. The company has established its own retail stores in many cities for direct selling to the final customers of its products.
Man"&act"rers

C"sto%ers

Two level channel, where there are two intermediaries between the company and the final customers. The company follows this distribution channel to i.e.

Man"&act"rers

Distri'"tors

Retailers

C"sto%ers

MARKETING MIX Prod"ct

The first step in company!s pursuit for qualitative e"cellence is in the procurement stage where in company focus on getting only the best of produce,

free from e"traneous plant and animal matter. This material is then kept in a godown, away from the processing unit. Tests are conducted on the material before sending it for re8cleaning and processing. ;aterial that does not conform to the prescribed norms is not used and the same is disposed. The material is cleaned using both mechaniFed and handheld sieves of different grades for varying product siFes and requirement. Gue care is taken to retain the natural flavour and aroma in the various steps of production. & host of machines like automatic sieves, grinding machines, automatic packing machines, etc are used in con(unction with age8old methods of processing to heighten the e"isting aroma and flavour besides lending taste to foodstuffs. The unit boasts of a well8equipped laboratory for maintaining strict quality control. It conducts regular tests to ascertain the presence of pests,

microorganisms, pesticide residues in spices and other food products. ;easures to control incidence of rodent pests are carried out regularly both inside 2 outside the unit. %re8fumigation 2 post fumigation tests are done on samples, nutrition facts are determined and a host of other tests are conducted to maintain strict quality control.

;anufacturing process for these products is batch type. Aatches can be identified both on the basis of time span and quality of production on time basis a single batch for chili powder produces ,3,000 to 90,000 kg whereas, in a single batch, 7,000 to /,000 kg, turmeric powder is produced. Aatches for coriander powder produces <000 to 3000 kg. & batch for instant mi" produces 400 to /00 kg. In all spices powders, 95 by weight of caster oil is added as a preservative.

&ccording to government requirements the e"piry date is to be after ten to twelve months of production. Dence, e"piry dates for spices8powders are after eight months of production and in case of &safetida and *aram ;asala, it is after twelve months of production.

Packaging

&ll the products are neatly packed in attractively designed packing, be it spices or instant mi"es. +ompany specialiFes in private labeling. &ll the packing, labeling, bar coding, printing of ingredients, etc., are done by company, here, on behalf of the buyers in accordance with their specifications. & strict check is maintained in all the departments so that only the best product reaches to buyers, reducing unnecessary hassles faced by them with regard to

product quality. +ompany has been supplying quality products in this form since ,..9 and has earned the appreciation of esteemed clientele over the years.

Place

The traditional Indian women believed that loose masala prepared by grinding and crushing can only give the desired taste and purity. Aut with the increase in the number of nuclear families in Indian society and also due to increase in the number of workingwoman, the company strategy was built to focus its products as of better quality than loose products because loose products may be adulterated than branded one. They also claim that poly packs will keep the product fresh and tasty. The Instant mi"es are targeted mainly on the workingwomen segment that finds little time for cooking.

Pro%otion

Initially, only posters and hoarding were used as materials for advertisement. %resently the products are also been advertised through newspapers and magaFines. 0early 3 5 of the turnover!s proportion is spent on advertising. The promotion schemes include free sample

distribution to attract the customers. The company had also launched promotion schemes for both consumers and retailers who will be receiving specified gifts. Cvery year, the company introduces such promotional schemes to promote the products.

MARKETING FLOW Product Flow +ompany +ustomers +ompany Title Flow +ompany +ustomers Payment Flow +ompany Aanks Gistributors :etailers Gistributors :etailers +ustomers Gistributors :etailers

+ustomers

Information Flow +ompany Sales :ep.H Gistributors :etailers

+ustomers Promotional Flow +ompany &d &gency Gistributors :etailers +ustomers

SALES & DISTRIBUTION MANAGEMENT OF RAMDEV MASALA Ob ecti!es The followings are the ob(ectives of the pro(ect

 To study about the effectiveness of the distribution channel of :amdev ;asala. The appointment and distribution policies for the distributors. To study about the logistics management at :amdev ;asala. To study about I :ecruitment and selection of the sales force, I ;arketing flow, 2 I ;arket Segmentation 2 Gemand

'orecasting. Information "e#uired About di t!ibuto! To collect information about the present distribution channel of :amdev ;asala.

 The terms and conditions of appointment of distributors and the distribution policies. To collect information about logistics

management at :amdev ;asala.

S"#$ %o!&$ To understand the recruitment and selection procedures. Information about market segmentation and demand forecasting. 'unctions of the sales force. "esearch Design & descriptive research was done to understand the sales and distribution management at :amdev ;asala. Data Collection Method In8depth interview method was selected to conduct the research at :amdev ;asala.

Distribution Channel The company has two types of the distribution channel that is, Eero =evel, where the company does selling directly to the final customers. The company has established its own retail stores in many cities for direct selling to the final customers of its products.
Man"&act"rers

C"sto%ers

Two level channel, where there are two intermediaries between the company and the final customers. The company follows this distribution channel to i.e.

Man"&act"rers

Distri'"tors

Retailers

C"sto%ers

$ppointment Of Distributors Gistributors are the main role players in this channel because better distribution is a boon for the company. 'or this reason the members of this channel are selected carefully.

The company has framed a definite policy for the appointment of distributors The distributor is not appointed purely on the basis of geographical regions, i.e. a local businessman of a particular area is selected for that particular town or city. henever the company wishes to appoint a distributor, it advertises in newspapers and invites businessmen of that particular area to make an application. In case of vacancy of distributorship, company. &fter receiving the application the company scrutiniFes them and if the qualification met the requirement then the meting with the company official is arranged with the applicant. other businessmen of that particular area may send their applications to the

 &t the meeting he is informed, e"plained and guided about the company strategies about selling and distribution. &t that time the interest of the distributor is checked. Gistributor is selected only if he assents to work according to the guidelines of the company.

The company!s supervisors perform a personal check on his shop, godown selling and distribution arrangement, and e"perience of distribution, personnel, financial condition, goodwill and business with other agencies. &fter giving due considerations to all above points the company!s senior officials meet and select the distributor.

 &fter taking the final decision regarding the appointment, the selected distributor is asked to meet in person. & written assurance with the firm!s stamp is taken on an agreement paper. The company official specifically discusses the below mentioned points with the distributor. ,. ho will be responsible for distribution

of the productsJ 9. 7n which days the distribution will be doneJ <. Dow will he do his distributionJ &fter appointment, if necessary the company gives training in the distribution process. The distributor has to contact each and every retail outlet in his region and prepare their list, which is to be filed with the company.

 Initially, after appointment the company deals on advance basis for the first ten dealings with the distributor.

%uidelines to Distributors The following points are to be specifically noted and practiced while doing distribution and selling of :amdev products. The distributor should make a list of all the outlets selling the product and remit it to the company. Cach distributor must sell the products in person in the market on fi"ed days once in a week.

 De must do the work of selling and distribution according to the company!s policy. De must get the permissionHmake aware, of the company if he wants to start any other business. &ll the distributors must prepare stock statement for each and every product specifically stating opening stock, ordered stock, total stock, sales and closing stock. The distributor must keep the stock of seven days. +onsidering the average sales of the week he must fill up the company!s order form stating closing stock on a fi"ed day of the week. The company issues hundred order forms to the distributors. Cvery retailer should be given stock after considering his average sales. 0o one is allowed to keep the stock of more than two weeks.

 Cvery distributor must adhere to the payment policy framed by the company.

7nce in a week the sales representative goes and checks the distributorship according to the convenience of the company. The ob(ective behind the visit is see that the policies are being practiced properly and to see whether the %7% material is being properly used. De also checks the sales promotion schemes and the record keeping. Guring his call the sales representative should check the stock and see that the old stock is sold first. De must find out avenge sales and supply accordingly. This measure will prevent over piling of stock and the consumers will get fresh products.

 Cach distributor must fill up the retail card and maintain a card for each retailer to whom he supplies. In the card he must write the particulars of purchase made by the respective retailer of the products. 'rom such cards information of retail purchase and sales can be estimated. The distributors are also allowed to do retailing provided they sell the product on the printed price.

Policy "egarding Deposits

The amount of deposit is finaliFed after considering the potential sales of that particular region. The ma"imum amount of the deposit in case of good urban center is :s. 93,000. The amount of deposit stays with the company till the party remains the distributor of the company. Interest at the rate of ,95 is paid to the distributor at the end of every financial year. The amount of the interest is sent to the distributor at the end of every financial year. hen the distributor wants to stop working for the company, his deposit is returned on the same day with the interest till that day. There is no penalty of ceasing to be the distributor even

though it harms the business till the new distributor is appointed

Margins to Channel Members %roducts Gistributors ,0 ,3 ,0 :etailers <0 <0 <0

;asala 2 &safetida Instant ;i" hole Spice

Table showing margins to channel members in 5 to sales.

&chemes

'or distributors schemes are as follows ,. In case if sales are 935 more than last year sales then 0.35 more commission is given. 9. &nd if sales are 305 more than last year sales then ,.35 more commission is given. 'or retailers, #free pouches are given to them as follows$ 8 , for ,0 at introduction stage. 8 , for 90 at later stage. 8 7n %.s. ,000 sales , free :amdev bag is given. 8 &lso regular incentive schemes #seasonal$ are given to retailers for additional margin 'or customers

,. 'ree samples, lucky draw coupons, gifts and other schemes have been introduced for the customers.

Policy "egarding &upply ' its Payment

The payment should be made within 7 days of the date of supply through GG If the distributor does not make payment in time then the company may ask him to pay advance draft with the order in the future. 1sually for a new distributor the first ,0 dealings are done on advance basis. The commission on GG and the postal e"penses are to be borne by the distributor. & credit period of 7 days is given for each supply and the new supply will be made only after the payment of the prior is made. If the payment is made after 7 days, the company issues a debit note having interest charged at the rate of 9-5 per annum.

 If a distributor is unable to maintain appropriate stock of the necessary product then his area operation will be reduced and other arrangements for distribution will be made. In case of late payment, check bouncing, ready retailing, stock out etc. the company generally gives a warning to the distributor and it takes action if repeated.

Policy "egarding (oading )ehicle

The distributor should take the company!s permission before distribution with the loading vehicle owned by the company. It should be painted according to the company!s specification and should be in a good condition for efficient supply. If the distributor takes into consideration the above8mentioned points then the monthly allowance for the loading vehicle is negotiated. "eplacement Policy %roducts of :amdev ;asala remain fresh in the pack for a long period so problem of replacement generally does not arise. Then also in case if replacement is to be made then following points must be consideredK

 If the pack is torn #possibility of it is minimal$ then the distributor can replace the pack after checking it. C"piry date is printed on every packet. So every distributor before supplying a new stock must check old stock at retail out let and see that it is sold first. This would reduce the chances of bad products reaching the consumers. If such old products are found with some retailers then the distributor should replace it. Then after negotiating the genuineness of the case the company will decide that the replacement should be given to the distributors or not. +ompany!s policy for retailers and consumers is to replace packet for packet. %ouches damaged by rats at retail out lets or the distributors will not be replaced because it is not the fault of the company.

 Cach month the replacement should be done at the end of the month If the goods are not sold then the company is ready to take the unsold goods back but only before e"piry date. There is no replacement to be done after e"piry date. &nd the company is very strict on this issue. So the distributor himself is responsible on this front. Policy "egarding Complaints The company keeps stringent quality control so complaints are not likely to come. Aut if some complaint does arise then the distributor should follow the following instructions. Take the name and address of the complainer. Take the name and address of the retail outlet from where the customer had purchased the product.

 Take the details regarding the product category, its manufacturing date, batch no., etc. The distributor should store such packets separately and show them to the company sales representative when he visits them. Such packets are replaced according to the company!s policy.

 The company checks the defective product and replaces it and thus satisfies the customer, further this is informed to the concerned distributors and the retailers. The same is the case if the product is an instant mi". Thus the company is quite co8operative, it reduces the complaints through customer satisfaction and guidance to its customers and the distributors.

Price Change Mechanism The price of the product fluctuates on the basis of prices of the raw materials in the market. If the price of the raw material increases the price of the product increases simultaneously and vice versa hen the price is increased, no prior information is given to the distributor, but the products will be

supplied to the distributor at the prevailing price. The distributor is supposed to follow the following steps in case of price increaseK The distributor and the retailer must sell their stock at the price that they have got or at the printed price of the product. The distributor should inform the retailer that he would supply the stock at the price at which the company gives him. hen prices are to be reduced, The distributor will be informed seven days in advance so that he can sell off his stocks. De must ask the retailers to sell off their stock as soon as possible to avoid possible losses. De must see that the old stock is sold first and do not make a fresh supply till then, this will avoid the packets with two different prices.

 The company will not give price reduction on old stock.

"eimbursement of *+penses It will be refunded on presentation of the real bill with the receipt. The distributor must send such a receipt to the company within ,3 days of ta" payment along with the following particulars I Aill no. I &mount of bill. I Ta" :ate. I &mount paid as ta". The company will refund this amount every < months by a credit note. It will deduct this credit note amount from the new stock payment.

Policy "egarding &ale of Other Company,s %oods If a distributor wishes to sell the products of other company other than the product of :amdev ;asala, then he must write to the company and clarify the following points ,. 0ame and products of the company with which the distributor wishes to work. 9. The persons responsible for the new assignment. <. The information regarding a separate

godown and delivery vehicle. The company will then call him and negotiate the situation with him and give the final decision. De will be allowed to take the new assignment only if the company assents him in writing.

Policy "egarding Change of -ame of the Distributor

Gistributor must give reasons for changing the name of the firm. Gistributor must give details about the changes in the firm due to change in name, if any. Gistributor must give details about the changes in partners or ownership, if any. Gistributor must give a written application for the change in name andHor form of the firm should be given to the company at least one month prior to the change. Gistributor should also give a copy of the documents of the new firm, new application for the distribution by the new firm with the new name, address, sales ta" no., and the firm!s registration no.

+onsidering the above points the company will allow him to distribute the products or change the name. Cancellation of Distributorship The cancellation of distributorship may take place in the following waysK If the company observes that a distributor is not adhering to the company policy then the company has the right to cancel the distributorship. The distributor is free to leave the

distributorship. 7n the cancellation of the distributorship the deposit is paid back to the distributor without any disputes. (ogistics The process starts when the company receives order from any distributor. 7n the basis of this order from,

a bill and transport copy is prepared at Dead 7ffice. < copies of invoice are prepared of which one is sent to factory, one to distributor and one are kept at D7. The distributor sends the copy of invoice duly signed by him, which is filed, in the respective file of distributor. The vehicles used for transportation may be owned by company or may be hired from outside. &t D.7. along with copy of invoice, the copy of =orry :eceipt and octroi is also filed in the respective files of distributor.

Demand Forecasting 'orecasting of the demand is always important in order to device production schedule, marketing strategies, setting targets to distribution, etc. The following is the demand forecasting method adopted by the company, Sales of a particular distributor of the last year are taken as the base and the growth rate decided by the management is added and the target for that distributor is set for the ne"t year.

 The area sales manager!s target is given as the sum total of targets of the distributors of that territory. In the same way addition is made as in the hierarchy and the company!s target is arrived at. Target is set in terms of quality owing to the fluctuations in the price of the product.

RECRUITMENT & SELECTION OF SALES PERSONAL :ecruitment and selection is one of the important processes by which company can be able to get desired prospective for the required post. :amdev ;asala follows simple procedure for the recruitment. The company publishes advertisement regarding the requirement in the local newspapers. The company gives all the details regarding (ob designation, required educational qualification, and e"perience and brief (ob description. &fter scrutiniFing the applications that receive in the given stipulated time from the applicants, the D: people of the company send call letters to the short listed applicants. 7n the specified date the first round of the interview is been conducted in which some of the applicants are eliminated on the basis of their communication skills, knowledge about the their

specialiFed sub(ect etc. The remaining applicants are called on some other day and the second round of the interview is been conducted. &fter this round finally the required applicants are selected as the employee of the company for the desired post. ;ostly the candidates having the relevant e"perience on the specified post are preferred

Training Training for the newly recruited and selected employee depends on the amount of e"perience that the employee is having previously in other organiFation. *enerally the employees are given ,3 to 90 days training in which they are given the information regarding the company background, different strategies of the company and then the employee is given the information regarding the sales department. :amdev ;asala adopts mainly two types of training methods, 7n the >ob Training %ractical (ob training in the market.

Functions of the sales force S"#$ E'$&uti($ &s the company is operating in *u(arat only and the brand is new one as compare to others all the tasks of :egional and &rea sales manager are been handled by Sales C"ecutive, which includes allocating the sales budget for the sales force, fi"ing the sales target for the distributors and to see that they try to achieve the desired target and to provide service according to the companies policies to the distributors 2appointing new distributors for a particular region.

S"#$ Su)$!(i o! & S"#$ R$)!$ $*t"ti($ The main function of the sales supervisor is to supervise the work of sales representatives and to guide them in their work for that particular region. The main function of the sales supervisor is to visit dealersHretailer to find out the inventory level at that

particular point of time, look after point of purchase display and to collect information about the market and any suggestions from the dealersHretailers if any.

,. 9. <. -. 3. 4.

APPENDIX +u$ tio* A ,$d i* I*t$!(i$Distribution Dow many channels do you have for Sales 2 GistributionJ Dow do you arrive at type 2 number of channelsJ Dow do you select your distribution channelJ hat are the procedures of appointment of distributorsJ The companies *uidelines to Gistributors. The company!s policies regarding Geposits, supply 2 payments, loading vehicle, :eplacement policy, complaints 2 other distribution policies of the company. +ancellation of distributorship. :eimbursement of e"penses. %rice change ;echanism.

&ales ,. hat type of 7rganisation Structure do you haveJ 9. hat is the strength of your Sales 'orceJ

<.

hat is the >ob profile of your Sales C"ecutive 2 Gefine :elationship ith Top management 2 other managersJ -. hat is the ;a(or functionsH:esponsibilities of your sales e"ecutiveJ 3. hat kind of training ;ethodology have you adoptedJ 4. Dow the selection has been made usually as far as final selection of a candidate is concernJ 7. Information :egarding the reporting system e"ists in the organiFation. /. Dow do you motivate your sales forceJ .. hat kinds of compensation scheme do you used for your sales staffJ