Summer Project On Jwellers

D.
KHUSHALBHAI JEWELLERS
CHAPTER: 1
INTRODUCTION
NAVNIRMAN INSTITUTE OF MANAGEMENT
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D. KHUSHALBHAI JEWELLERS
1.1 OVERVIEW OF JEWELLERY INDUSTRY
1.1.1: EVOLUTION OF JWELLERY INDUSTRY IN INDIA

The Indian subcontinent has the longest continuous legacy of jewellery making anywhere since Ramayana and
Mahabharat times. While Western traditions were heavily influenced by waxing and waning empires, India
enjoyed a continuous development of art forms for some 5000 years.One of the first to start jewellery making
were the peoples of the Indus Valley Civilization. By1,500 BC the peoples of the Indus Valley were creating gold
earrings and necklaces, bead-necklaces and metallic-bangles. Before 2,100 BC, prior to the period when metals
were widely used, the largest jewellery trade in the Indus Valley region was the bead trade. Beads in the Indus
Valley were made using simple techniques. First, a bead maker would need a rough stone, which would be
bought from an eastern stone trader. The stone would then be placed into a hot oven where it would be heated
until it turned deep red, a color highly prized by people of the Indus Valley.
The red stone would then be chipped to the right size and a hole drilled through it with primitive drills. The
beads were then polished. Some beads were also painted with designs. This art form was often passed down
through family; children of bead makers often learnt how to work beads from a young age.
1.1.2: INTRODUCTION TO INDIAN JEWELLERY INDUSTRY

India is a leading player in the global gems and jewellery market. The gems and jewellery industry occupies
an important position in the Indian economy. It is a leading foreign exchange earner, as well as one of the fastest
growing industries in the country. The two major segments of the sector in India are gold jewellery and
diamonds. Gold jewellery forms around 80 per cent of the Indian jewellery market, with the balance comprising
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fabricated studded jewellery that includes diamond studded as well as gemstone studded jewellery. The Indian
gems and jewellery industry is competitive in the world market due to its low cost of production and the
availability of skilled labor. In addition, the industry has set up a worldwide distribution network, of more than
3,000 offices for the promotion and marketing of Indian diamonds.
YESTERDAY
TODAY
Unbranded
Branded
Silver & Gold jewellery
Gold & Diamond jewellery
Investment
Investment + Fashion
Traditional design
Fashionable & Innovative design
The gems and jewellery industry has an important role in the Indian economy. Traditionally, India has been the
world's largest consumer and importer of gold. Gold dominates the Indian jewellery market and formulates
almost 80 per cent of the market share, which is followed by fabricated studded jewellery including diamond and
gemstone studded jewellery. Further, India has emerged as the largest cutting and polishing industry for
diamonds in the world.
The two major segments of the gems and jewellery business in India are gold and diamond jewellery, as
per an Exim Bank report.
India and China are driving global demand for platinum jewellery, according to Dr Jonathan Butler, an
expert on the precious white metal.
Kolkata, the cultural capital of the east, witnessed its first-ever Gem & Jewellery Regional Leadership
Summit at ITC Sonar Bangles. The event was jointly hosted by Gemological Institute of America (GIA)
and the All India Gem & Jewellery Federation (GJF).
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1.2: INDUSTRY STRUCTURE
Indian gems and jewellery sector is expected to grow at a compound annual growth rate (CAGR) of around 13
per cent during 2011-2013, as per a RNCOS report titled 'Indian Gems and Jewellery Market Forecast to 2013'.
Shipments of gems and jewellery constitute 14 per cent of India's total exports, and employ 3.4 million workers,
with the Middle East taking most of the market.
1.2.1: GOLD
Gold is a dense, soft, shiny, malleable, and ductile metal. It has a bright yellow color and luster traditionally
considered attractive, which it maintains without oxidizing in air or water. This metal has been a valuable and
highly sought-after precious metal for coinage, jewelry, and other arts since long before the beginning of recorded
history. Gold standards have sometimes been monetary policies, but were widely supplanted by fiat
currency starting in the 1930s. The last gold certificate and gold coin currencies were issued in the U.S. in 1932.
In Europe, most countries left the gold standard with the start of World War I in 1914 and, with huge war debts,
did not return to gold as a medium of exchange.
1.2.2: Diamonds
Diamonds have always enjoyed a special place among precious gemstones. India has the distinction of being one
of the first countries to introduce diamonds to the world. Earlier, diamond jewellery was limited to a very small
elite segment of the population but now it has found way in various segments of consumers. Besides, India has
emerged as one of the world's leading diamond cutting and polishing centers.
1.2.3: Colored Gemstones

The colored gemstones segment includes remaining forms of jewellery which includes precious gemstones like
emeralds, sapphires, rubies and tanzanite; and semi-precious gemstones like silver, pearls, etc. Traditional Indian
gemologists identified around 84 precious and semi-precious stones, amongst them nine stones form the
'Nirvanas or the nine gems'. Most gemstones are hard, but some soft minerals are used in jewelry because of
their luster or other physical properties that have aesthetic value. Rarity is another characteristic that lends value
to a gemstone.
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1.3 OVERVIEW OF D. KHUSHALBHAI JEWELLERS
Dating back from 1950 when Khushalbhai Chokshi started the jewellery business in Junagadh, Gujarat, India.
With an opportunity for a better life, Khushalbhai, the founder of D.KHUSHALBHAI JEWELLERS,
made it to Surat (Diamond City) in 1990 and within few years became the renowned reputed jewelers in the entire
Gujarat State of India. D. KHUSHALBHAI JEWELLERS has been a family owned and operated business for
over 57 years. With an innate sense of design and style, together with his sons Deepak and Viren, Khushalbhai
built the foundation for a designer jewellery company known as D. KHUSHALBHAI JEWELLERS.
D. KHUSHALBHAI Jewelers is one company that offers us the part of rich Indian tradition in Jewellery.
D. KHUSHALBHAI Jewelers is one of the prestigious exclusive designer Jewellery showrooms in entire
southern Gujarat. Over the last many years D. KHUSHALBHAI Jewelers has earned a reputation for quality,
selection, value and service that has been the foundation for long-standing relationships with customers.
D. KHUSHALBHAI Jewelers, a complete jewelry mall located in the DIAMOND CITY Surat, Gujarat, India has
maintained its reputation as an epitome of TRUST, QUALITY and DIVERSITY since its very inception. The
company is run by a family who believe that with every jewellery they sell, they buy a share of trust. The
company has always given the highest priority to quality and to provide a great customer experience by providing
an Exhaustive Range of Products, Innovations in Designs, and Quick Delivery and last but not the least,
a Very Competitive Pricing Policy that fits everyones budget.
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D. KHUSHALBHAI JEWELLERS is not just a company that makes jewellery. We are a family of over 1200
individuals who work alongside each other to achieve a common goal: to make the perfect jewellery for that
special occasion. KHUSHALBHAI JEWELLERS has its own sense of style and wants to reflect the same in
every piece of jewellery. Therefore we at D. KHUSHALBHAI JEWELLERS strive to design truly unique
jewellery using the highest quality of resources in Diamonds, Gold, Platinum, and Silver. Each jewellery is made
with great efforts, making each piece truly one of a kind.
Now D. KHUSHALBHAI JEWELLERS count the entire team as part of their extended family. Each individual is
an integral part of the company, and the team as a whole is what sets them apart from the rest. Within the last 15
years son Dipak and Viren has taken the company at the heights, since last five years they have been awarded
from the Southern Gujarat Chamber of Commerce for their best performance in the export of Gold and
Diamond jewellery
1.3.1: MILESTONE OF D. KHUSHALBHAI JEWELLERS

1950
In 1950, Mr. Khushalbhai Chokshi started the jewellery business in Junagadh, a small town in Gujarat.
1995
In 1995, D. KHUSHALBHAI Jewellers started their jewellery business with a showroom in Surat, Gujarat, India.
They started the business with a product line of Gold Jewellery, Diamond Jewellery and Silver Items and Silver
Jewellery.
2000
In the year of 2000, D. KHUSHALBHAI Jewelers slightly expanded their product line by adding the Platinum
Jewellery and the Platinum Diamond Jewellery in their line of products. Their addition in products helped them in
growing their business and also caters a larger domain of requirements.
2001
After successfully catering the local market, D. KHUSHALBHAI Jewelers took an initiative towards the
Jewellery export and started exporting Gold Jewellery from the year 2001.
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2005
D. KHUSHALBHAI Jewelers started exporting Diamond Jewellery, Silver Items and Silver Jewellery from the
year 2005.
2011
2011 has been a remarkable year not only in the history of D. KHUSHALBHAI Jewelers, but in the history of
entire Gujarat State, when D. KHUSHALBHAI JEWELLERS turned a Jewellery showroom into a complete
Jewellery mall which is one of its kinds in the entire country. The new Jewellery Mall was inaugurated by
Honorable Chief Minister of Gujarat, Shri Narendra Modi.
2012
2012 has again been an exceptional year for D. KHUSHALBHAI Jewellers. This year they have started with
online selling of their exclusive designs and patterns and have extended their vision with a motto of providing
extra-ordinary customer experience and state of art designs to the clients residing not only in India but in any and
every part of the globe.
1.3.2: PROFILE
Name of the firm
D. khushalbhai jewellers
Registered showroom
D. khushalbhai jewellers
Near Sharon Plaza,
Parle point, Athwalines,
surat 395007
Contact details
Tel : +91-261-221-1196
Fax : +91-261-221-1074
Cell : +91-982-413-0007
Year of establishment
1950 in Junagadh and 1995 in surat
Name of owner
Viren Chokshi & Deepak Chokshi
Type of firm
Jewellery maker & seller
Type of job
Give public satisfactory jewellery
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No. of employees
57
Competitors
Tbz jewellers,
Kalyan Jewellers, etc.
Nature of business
Partnership firm
HEAD OF HUMAN RESOURCE DEPARTMENT : Bhadrish Gandhi
MARKETING DEPARTMENT : Deepak k. Chokshi
FINANCE DEPARTMENT : Viren k. Chokshi
PRODUCTION DEPARTMENT : Deepak Chokshi and Viren Chokshi
1.4: OVERVIEW OF COMPETITORS
Pacchighar jewelers
Tribhuvandas jewelers (tbz)
Kantilal jewelers
Tanishq jewelers
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Page 9
CHAPTER
2:
MARKETING
AND
SALES
DEPARTMENT
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2.1 INTRODUCTION OF MARKETIN DEPARTMENT:
2.1.1: MEANING OF MARKETING AND SALES

2.1.1.1: MARKETING
According to Phillip kotler Marketing is a social and management process by which individuals and groups
obtain what they need through creating and exchanging products and value with others.
2.1.1.2: SALES
Selling is a narrowly defined concept concerned with exchange of goods against the payment of price.
2.1.1.3: MARKETING ACCORDING TO FIRM

Marketing department is handled by Mr. Deepak Choksi. All the decision regarding it is taken by him only. Here
the basic function of the firm is to do marketing; all the activities are based on that only. The selling and
distribution is according on the customer response.
Although emphasis is made to people to purchase the product based on the income they have with them. As we
all know that people purchases based on the budget they have been prepared and as this is a jewellery showroom,
they have products with different price categories.
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Starting from Rs 4000 5000, to lacs of rupees. Also here jewellery is made by taking orders from customers
base on their choice. There are so many competitors in jewellery industry so the basic step to promote the product
in the market is given more importance.
[B] DETAILED ORGANISATION STRUCTURE OF MARKETING DEPARTMENT
2.2: STRUCTURE OF MARKETING DEPARTMENT

The organizational structure of the marketing department of a company can vary according to the individual
company. Small companies may consist of one or two marketing employees, and larger organizations may have
dozens of marketing employees on staff. Overall, putting an organizational structure in place helps marketing
employees and other employees of the company to understand what the role of each person is in the marketing
department.
2.2.1: MARKET RESEARCH

Marketing managers need to have a good knowledge of the customer. This means building up an accurate picture
using the resources that are available. It is important to take personal opinion out of as many decisions as possible
you probably don't think in the same way as a typical customer. Information can be gathered from questionnaires,
focus groups, the internet, interviews, buying habits and many more sources, but it's important that the
information is examined in a scientific way using proper statistical.
2.2.2: BUSINESS OPPORTUNITIES

Marketing managers need to constantly keep track of market trends in order to identify future business
opportunities. They consult with buying personnel to understand what is currently in demand and use sales
forecasting
to
estimate
future
profitability
of
products
and
services.
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2.2.3: MARKETING PLANNING
Based on overall company goals and direction, marketing managers develop new marketing strategies to promote
the companys products, services or image. They also evaluate and analyze the effectiveness of these strategies by
looking at the impact they had on market share and consumer perception. They also establish pricing strategies,
create and evaluate budgets as well as make projections on return on investment. Marketing managers identify the
different distribution channels they will use to make a product available to consumers.
2.2.4: MANAGING PERSONNEL

Marketing managers supervise the projects and daily activities of the marketing staff, such as marketing
coordinators, and oversee the hiring, training and performance evaluation of their team. They ensure that the team
functions well
2.2.5: ADVERTISING AND PROMOTION

Depending on the type of organization, the marketing manager will either manage the advertising and
promotional efforts of the company themselves; work with an internal advertising team or with an external
advertising agency. These efforts include print and online advertising, event planning and direct marketing.
2.2.6: COLLABRATION
While marketing managers work with managers from other departments, they also deal with senior executives
within the company, customers and suppliers. For this reason, part of their job includes traveling when they need
to meet with employees or customers who work in a different location.
2.5 PRODUCT MIX

A product mix is the set of all products and items a particular seller offers for sale. A product mix consists of
various product lines. A firms product mix has a certain width, length, depth and consistency.
The width of a product mix refers to how many different product lines the firm carries.
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The length of a product mix refers to the total number of item in the mix.
The depth of a product mix refers to how many variants are offered of each product in the line.
The consistency of a product mix refers to how closely relate the various product lines are in end use,
production requirement, distribution channels or some other way.
2.4.1: Types and classification of products and services offered by organization. (Product mix)
Gold
Silver
&
Platinum
Silver
Earrings
Rings
Gold
&
Platinum
Gold
&
Silver
Bracelets
Necklace
Payal
Watches
Bangles
PlatinumDiamond
Platinum
SilverDiamond
GoldDiamond
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2.5: PACKAGING AND LABELLING

2.5.1: PACKAGING
Packaging is meant for the protection and maintenance of the quality of the product. Therefore, in D.
Khushalbhai they provide a velvet box to keep the jewellery. It serves the purpose of container and wrapper;
however it is the powerful tool of promotion at point of purchase. Attractive packaging increases the sales
without spending much on advertisement.
2.5.1.1: OBJECTIVES
It provides protection to the jewellery against dust and moisture.
It facilitates safe transport of jewellery from showroom to home or from place to place.
Packaging has consumer oriented communication value. On packaging brand logo is printed this
communicate brand name to those customer who see it in hands of other people.
To serve as a promotional tool at the point of purchase.
To serve the purpose of effective communication to influence consumer behaviour at the point of
purchase.
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2.5.2: LABELING
Labeling is connected with brand and packaging. Label is a strip on the container on which certain information
regarding the product is mention. This information serves the purpose of communication and promotion. This
increase the satisfaction of the customer.
2.5.2.1: A complete label gives following information:
Brand name
Address of the producer
Gross and net quantity of the product
Ingredients in the product
Metal use in the jewellery to make it hard
Price
2.5.2.2: OBJECTIVES
To communicate the brand name of the product.
To give detail about the ingredients of the product.
2.6 PRODUCT LIFE CYCLE AND MARKETING STRATEGIES USED FOR

PRODUCT:
Every product has a life cycle. Some live short while others live long. Ultimately whether product passes through
different stages which are known as a life cycle of a product. If we study the life history of any branded product
we come to know that the lifetime sales of many branded products reveal a typical pattern of development which
is known as product life cycle.
Most product life cycle curves are portrayed as bell shaped typically divided into four stages.
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2.6.1: INTRODUCTION
This stage is characterized by a low growth rate of sales as the product is newly launched and consumers may not
know much about it. Traditionally, a company usually incurs losses rather than profits during this phase.
Especially if the product is new on the market, users may not be aware of its true potential, necessitating
widespread information and advertising campaigns through various media.
The Introduction stage is probably the most important stage in the PLC. In fact, most products that fail do so in
the Introduction stage. This is the stage in which the product is initially promoted. Public awareness is very
important to the success of a product. If people don't know about the product they won't go out and buy it.
2.6.1.1: CHARACTERISTICS OF THE INTRODUCTION STAGE ARE:

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High costs due to initial marketing, advertising, distribution and so on.
Sales volumes are low, increasing slowly.
There may be little to no competition.
Demand must be created through promotion and awareness campaigns.
Customers must be prompted to try the product.
Little or no profit is made owing to high costs and low sales volumes.
2.6.1.2: MARKETING STRATEGIES
There are different strategies we are using to introduce our product to consumers.
We use either a penetration strategy or a skimming strategy.
Profits are high with this strategy but there is also a great deal of risk. If people don't want to pay high
prices you may lose out.
Profits are not a concern under this strategy. The most important thing is to get you product known and
worry about making money at a later time.
High price and higher level of promotional expenditures.
High price and low promotional expenditure budget.
Lower price and higher level of promotional expenditures budget.
Lower price and low promotional expenditure budget.
2.6.2: GROWTH
As the introduction stage of product life cycle ends, the product has spent considerably moderate time into the
market where customers / consumers get familiar to the product and start buying the product (or consuming it).
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As the product is now into the market it becomes more strengthened and faces more intense competition. This
competition now offers greater choice to the customer in the form of different product type, packaging and price.
The market base expands as more customers by the product. More trade channels are now willing to keep the
product and one generally observes softening of prices.
2.6.2.1 CHARACTERISTICS OF THE GROWTH STAGE:
In this stage, sales typically grow at an increasing rate, many competitors enter the market, and large
companies may start to acquire small pioneering firms.
Profits rise rapidly in the growth stage, reach their peak, and begin declining as competition intensifies.
Emphasis switches from primary demand promotion.
Distribution becomes a major key to success during the growth stage, as well as in later stages.
Manufacturers scramble to sign up dealers and distributors and to build long-term relationships. Without
adequate distribution, it is impossible to establish a strong market position.
2.6.2.2 MARKETING STRATEGIES:

During the growth stage the company can take following steps to maintain high growth rate for a prolonged
period of time.
To increase the quality of the product or add new features to the product.
To start a campaign to search out new areas of market.
To intensify the advertisement and find out new channels of distribution for wide spread sales.
To increase the expenditures enhancing the trust of the people in the product
In order to attract price sensitive customers to decrease the price at appropriate time.
2.6.3 MATURITY:
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In this stage sales growth continues but at a declining rate because of the diminishing number of potential
customers who remain unaware of the product. When sales growth rate reaching to the highest level begins to
decline maturity stage begins. This stage last longer than earlier stages.
2.6.3.1 CHARACTERISTICS OF MATURITY STAGE:
In the beginning the sales increases but at declining rate.
Then the sales remain stable.
After that sales begins to decline.
During the maturity stage market becomes highly competitive, competitors resort to price cut.
The company has also to decrease the price to survive competition.
As a result profit and sales growth rate either case to increase or increase at decreasing rate.
2.6.3.2 MARKETING STRATEGIES:

Efforts are made to enter into new markets.
Steps are taken to increase the utility of the product.
Product is made familiar with other classes of customers.
Product is improved.
Alterations are made in the marketing mix to suit the changing conditions.
2.6.4 DECLINE:
In this stage sales begin to diminish absolutely as the product is gradually replaced by better products or
substitutes. No doubt, the producer continues to make efforts to increase the sales but the efforts do not bear the
fruits.
2.6.4.1 CHARACTERISTICS OF DECLINE STAGE:

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Sales get stagnated for some time and thereafter begin to decline.
Profit also starts declining and number of customers also decline.
Generally because of changing preferences of customers or losing utility by product sales reach this stage
of decline.
2.6.4.2 MARKETING STRATEGY:
They find out the weak product and make efforts to improve the quality by introducing new features or
new product development.
If they want to keep the same product for sales then they change the marketing strategy like concentrating
only on few channels of distribution and reducing advertising expenditure.
2.7 SEGMENTATION, TARGETING AND POSITIONING:

Segmentation, targeting and positioning together comprise a three stage process. We first (1) determine which
kinds of customers exist, then (2) select which ones we are best off trying to serve and, finally, (3) implement our
segmentation by optimizing our products/services for that segment and communicating that we have made the
choice to distinguish ourselves that way.
2.7.1 SEGMENTATION:
Segmentation involves finding out what kinds of consumers with different needs exist. In general, it holds true
that You cant be all things to all people, and experience has demonstrated that firms that specialize in meeting
the needs of one group of consumers over another tend to be more profitable.
Generically, there are three approaches to marketing. In the undifferentiated strategy, all consumers are treated
as the same, with firms not making any specific efforts to satisfy particular groups. This may work when the
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product is a standard one where one competitor really cant offer much that another one cant. Usually, this is the
case only for commodities. In the concentrated strategy, one firm chooses to focus on one of several segments
that exist while leaving other segments to competitors. The differentiated strategy: They offer high priced to
those who are inflexible in that they cannot tell in advance when they need to purchase. A market segment is a
classification of potential private or corporate customers by one or more characteristics, in order to identify
groups of customers, which have similar needs and demand similar products and services concerning the
recognized qualities of these products, e.g. functionality, price, design, etc.
The term segmentation is also used when customers with identical product or service needs are divided up into
groups so they can be charged different amounts for the services.
A customer is allocated to one market segment by the customers individual characteristics. Often cluster analysis
and other statistical methods are used to figure out those characteristics, which lead to internally homogeneous
and externally heterogeneous market segments.
Examples of characteristics used for segmentation:
GENDER
PRICE
INTEREST
LOCATION
RELIGION
INCOME
AGE
Demographic
variables
essentially
refer
to
personal
statistics
such
as
income,
gender,
education, location (rural vs. urban, East vs. West), ethnicity, and family size, it is also possible to segment on
lifestyle and values.
Some consumers want to be seen as similar to others, while a different segment wants to stand apart from
the crowd.
Another basis for segmentation is behavior. Some consumers are brand loyali.e., they tend to stick
With their preferred brands even when a competing one is on sale. Some consumers are heavy users.
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While these are some characteristic which on the bases of which market segments are decided by the company on
the bases of their product. The firm then undergoes the studies of customer requirement and create different
segment for their product.
In D. khushalbhai also customer are classified according to their purchasing capacity, the one who want diamonds
are serve separately and have a separate department or say a part of a showroom. Those who want to purchase
gold or silver are treated separately with separate employees.
So the customer budget and requirement decide the segmentation in D. khushalbhai. Also some times the
customer taste and wish to purchase some uniqueness make them separate with others.
Note that segmentation calls for some tough choices. There may be a large number of variables that can be used
to differentiate consumers of a given product category; yet, in practice, it becomes impossibly cumbersome to
work with more than a few at a time. Thus, we need to determine which variables will be most useful in
distinguishing different groups of consumers.
Criteria used in defining segments:
Profitability
Similarity of needs of potential buyers within a segment.
Differences of needs and buyers across segments.
Potential of a marketing action to reach a segment.
Simplicity and cost of assigning potential to segments.
2.7.1.1 TYPES OF SAGMENTATION:

2.7.1.1.1 GE0GRAPHIC SEGMENTATION:
Geographic segmentation tries to divide markets into different geographical units:
Eg, Countries: perhaps categorized by size, development or membership of geographic region
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Rajasthani jewellery
Punjabi jewellery
Gujarati jewellery
2.7.1.1.2 DEMOGRAPHIC SEGMENTATION:

Demographic segmentation consists of dividing the market into groups based on variables such as age,
gender family size, income, occupation, education, religion, race and nationality.
- Age
Child jewellery
Old age jewellery
- Income
Low range
High range
- Lifestyle
2.7.1.1.3 PSYCHOGRAPHIC SEGMENTATION:
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It considers a number of potential influences on buying behavior, including the attitudes,
expectations and activities of consumers. If these are known, then products and marketing
campaigns can be customized so that they appeal more specifically to customer motivations.
- OCCASION
Marriage jewellery
Diwali
On akshaya tritiya
- USAGE
Daily usage jewellery
On special occasions
2.7.2 TARGETING:
Targeting is the actual selection of the segment you want to serve the target market.
The group of people or organizations whose needs a product is specifically designed to satisfy.
In the next step, we decide to target one or more segments. Our choice should generally depend on several
factors. First, how well are existing segments served by other manufacturers? It will be more difficult to
appeal to a segment that is already well served than to one whose needs are not currently being served well.
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Secondly, how large is the segment, and how can we expect it to grow? (Note that a downside to a large,
rapidly growing segment is that it tends to attract competition). Thirdly, do we have strengths as a company
that will help us appeal particularly to one group of consumers?
Criteria for selecting target segments:

1. Market size substantiality
2. Expected growth future potential
3. Competitive position attractiveness.
4. Cost of reaching the segment accessibility
5. Compatibility with the organizations objectives and resource
2.7.3 POSITIONING:
Positioning is the use of marketing to enable people to form a mental image of your product in their mind.
It is very important to maintain the position in market to survive. If it fails then firm goes to decline. The
D.khushalbhai jeweler is very reputed jewellery shop for purchase gold, silver and other.
As we can see the position has 4 effects on product, price, promotion and distribution. Lets we discuss about
product- the firm can hold its position in the market if they have good product i.e. premium for upper level
people, then basic for middle and lower level people and lastly durable.
Similarly, for price high price or say expensive jewellery. Then low price jewellery and lastly the basic value
jewellery.
The positioning effect promotion also. In the above figure we can see that there are 3 types of promotion which
can be undertake i.e. prestige, fun and powerful. In prestige high expensive promotion take place taking in mind
about the position and reputation of the firm. In fun type some comic promotion with the understanding the
whole scenario of the jewellery and firm. Lastly in powerful promotion the best and expensive mode of
promotion take place this also sometimes occur in D. khushalbhai at the time of inflation or mare competition
exist in the market.
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In distribution also there are 3 types intensive, exclusive and selective. If this 3 are handled properly then the
distribution goes on
2.8 PRICE:
Pricing is a very crucial matter for the marketing manager because it affects the demand, sales promotion,
competitive strength of the business unit, ego satisfaction of the customers and ultimately the profit. Sometimes,
it happens that efficiency of the other functional areas are attached by the faulty price decisions. Therefore, extra
ordinary care should be taken at the time of making pricing decisions.
MEANING
The sum or amount of money at which a thing is valued, or the value which a seller sets on his
goods in market;that for which something is bought or sold, or offered for sale; equivalent in
money or other means of exchange; current value or rate paid or demanded in market or in barter; cost.
2.8.1 PRICING POLICIES ADOPTED BY D. KHUSHALBHAI JEWELLERS:

We can define price as a amount charged for the product including any warranties or guarantees, delivery,
discounts etc that are a part of the condition of sale and notpaid separately.
2.8.1.1 REASONABLE RATE OF RETURN ON INVESTMENT:
As we all know in jewellery business the owner have to invest money on a huge scale. They purchase raw gold n
other things and give it a beautiful shape and size which attract the people to purchase it. So they mostly purchase
when the price of this material is comparatively low. And sell it when the market is in inflation this gives tem
good profit and inspire them to earn more and serve more.
2.8.1.2 PRICE STABILITY
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This does not relate with the price of gold silver platinum etc. It is relate with the amount paid to the
ornaments maker (majuri) they give them a satisfactory wages for their work which give them and the
customer satisfaction.
2.8.1.3 TO MAINTAIN OR IMPROVE MARKET SHARE
There are so many jewellery shops in the market. To sustain this and protect the customer from shifting it they
have to give a proper price of the jewellery. Also to improve their market share they should provide suitable
price with appropriate product information.
2.8.1.4 TO COPE UP WITH COMPETITION
There is huge competition in jewellery business from small traders to big one. Also jewellery price is based
on the price of gold silver etc. Then too its produce large competition. In order to survive in the completion
one has to follow the foot step of competitors and change the pricing policy according to changing situation.
2.8.1.5 MARKET PENETRATION
Generally, new entrant in the market keeps this objective. Keeping in mind the objective of
market penetration, new entrants set a relatively low price in order to stimulate the growth of the market by
attracting more and more customers.
But this may succeed only when the product is price sensitive and unit cost of production and distribution
falls with increased output. Some firms set a price that will enhance the sales of the entire product line rather
than sales of single product. Here instead of individual product sale the sale of the entire product line is
emphasized.
2.8.1.6 MARKET SKIMMING
In the market there are certain customers who are prepared to pay higher price for a certain
product for one
reason or another. The product enjoys a very high value for a certain class of customers. Naturally in such
conditions the producers may set the price very high so that they can take the advantage of the premium from
such buyers before the product becomes the product of mass consumption. But the producer gradually will
have down to bring down the price as the product is becoming the product of a common man.
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Market skimming may succeed only when (1) there is a sufficiently large number of buyers whose demand is
relatively inelastic (2) the unit production and distribution costs are not very high and (3) there is little danger
of stimulating emergence of new rival firms.
2.8.1.7 PROFIT MAXIMISATION OBJECTIVE
Some business firm set the price to achieve maximum rate of return o capital employed. In reality, not some
but most of the private sector firms aim at achieving maximum rate of return by keeping the prices as much
high as possible. But they do not accept this reality. In monopolistic situation such an objective may squeeze
the consumers but in a competitive market it is helpful to both, the company and the people.
In the long run only the efficient companies will survive and inefficient firm will get eliminated from the
competition. It will induce everyone to be more and more efficient which is in public interest as well in the
interest of business firm.
HOW D. KHUSHALBHAI JWELLERS DECIDE PRICE:

Price of gold/silver/platinum/diamonds
+ Labour per gram wages
+ Rhodium/ polishing
+ VAT (value added tax)
+ 1.5% extra in case of billing with credit card = Net price of any jewellery
2.9 PROMOTION:
PROMOTION means a set of efforts made by the company for stimulating the demand for its product without
making any alteration in product mix, price and channel of distribution.
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2.9.1 ELEMENTS OF PROMOTION MIX
2.9.1.1 ADVERTISEMENT
Presentation and promotion of ideas, goods, or services by an identified sponsor.
Examples: Print ads, radio, television, direct mail, brochures and catalogues, in-store displays, posters, motion
pictures, Web pages, banner ads, and emails.
2.9.1.2 SALES PROMOTION

Media and non-media marketing communication are employed for a pre-determined, limited time to increase
consumer demand, stimulate market demand or improve product availability.
Examples: Coupons, contests, product samples and exhibitions.
2.9.1.2 PERSONAL SELLING

Direct selling the product to the customer with personal interest. Customer can give the personal touch in their
purchase.
2.9.1.3 DIRECT MARKETING

Direct marketing is a channel-agnostic form of advertising that allows businesses and non-profits to communicate
straight to the customer, with advertising techniques.
Example: mobile messaging, email, interactive consumer websites, online display ads, fliers, promotional letters,
and outdoor advertising.
2.9.1.4 PUBLICITY
Paid intimate stimulation of supply for a product, service, or business unit by planting significant news about it or
a favorable presentation of it in the media.
Examples: Newspaper and magazine articles/reports, TVs and radio presentations, charitable contributions,
speeches, issue advertising, and seminars.
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2.10 CHANNEL OF DISTRIBUTION FOR ALL PRODUCT LINES:
2.10.1 ZERO LEVEL CHANNEL
MANUFACTURER
CUSTOMER
There can be a number of different levels to each distribution channel. There is the zero level channel, which
involves distribution with no intermediaries whatsoever. For smaller markets, using a zero or one level scheme
can be quite practical and effective.
In D. Khushalbhai there is ZERO LEVEL CHANNEL.
The production department purchase raw gold/silver/diamond form wholesaler in their standard form set
by government.
e.g. :( 24 carat in gold) and sell to the direct customer in form of jewellery of different size and shape.
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2.10.2 ONE LEVEL CHANNEL:
MANUFACTURER
RETAILER
CUSTOMER
A marketing channel in which there is only intermediary ( for example, a retailer ) between manufacturer and
end-user.
In D. Khushalbhai there is also ONE LEVEL CHANNEL.
The production department purchase raw gold/silver/diamond form wholesaler in their standard form set
by government and export it to the US, UK, RUSSIA, who is work as a retailer and sale
e.g.: Export their products to the other countries in form of different type of jewelry of different size and shape.
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CHAPTER: 3
PRODUCTION
Page 33
DEPARTMENT
3.1 Types of Plant Layout
In D. Khushalbhai they do not have any fixed production unit. Here the jewellery is made on labour basis
(carigar). The jewellery ordered by the customer is made by different labour at different workstation.
3.2 Production Scheduling:

3.2.1 Priority Control Techniques Used For Scheduling Jobs:
3.2.1.1 First Come First Served (FCFS) Rule
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Jobs are scheduled for work in the same sequence as they arrive at the facility or work center.
3.2.1.2 Shortest Process Time (SPT) Job

The job which has the shortest processing or operation time on the machine or at the work center is given the
highest priority to be loaded as the next job for processing
3.2.1.3 Longest Processing Time (LPT) Job

The job with the longest processing time is scheduled as the first job to be loaded on the machine among the jobs
waiting in the queue.
3.2.1.4 Least Slack (LS) Job First

In this rule, the highest priority is given to the job which has the least slack, slack is the difference between
available time and the duration of processing the job.
Slack = Available Time Processing Time
3.2.1.5 Critical Ratio (CR) Rule

This critical ratio rule is designed to give priority to jobs that have the most urgently needed work to meet the
shipping schedule.
Critical Ratio =
Due Date-Date Now

Days required completing the job
3.2.1.6 Earliest Due Date (EDD) Job

This rule sequences the job waiting in the queue at the work center or machine according to their due dates and
the jobs are processed according to their due dates.
3.2.1.7 Preferred Customer Ordered (PCO) Rule

Jobs belonging to a preferred customer are given a higher priority than other jobs
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In D.Khushalbhai they follow 2 techniques:
1) First come first serve technique
2) Preferred customer order technique
3.3 INVENTORY CONTROL

Economic
order
quantity
Inventory
Control
ABC
Analysis
VED
Analysis
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3.3.1 INVENTORY OBJECTIVES
The most important objective of the inventory control is to determine and maintain an optimum level of
investment in the inventory. The inventory control models range from very simple methods to highly
sophisticated mathematical inventory models.
In D.Khushalbhai, their main motive behind inventory maintenance is to get more and more profit .As the price of
gold silver and other are regularly increasing so their motive is to purchase the raw materials in depression period
or when the rates goes down and sell it in inflation with the increase in price. Also one objective of keeping
inventory is that the customers can see the ready jewellery and they dont have to wait for jewellery to be made
after order is given. So the wide range of jewellery can be kept.
3.3.2 INVENTORY MODELS
In D.Khushalbhai there is no such models followed by them but yes whenever they require raw material know
from their records they purchase raw materials and make finest jewellery from them and earn profit.
Also they do not observe interest cost because we all know that the price of gold silver and other metals and
stones are increased day by day so it is a type of investment we can say.
Similarly they store finished jewellery and also raw material but the storage cost does not exist because the
finished jewellery are kept in showroom so it includes in other expenses and shown in profit and loss account in
the heading of expenses.
Likewise we can also say that here in D.khushalbhai they carry out EOQ model because whenever they require
like through last year data and their experience they can assume that this much of jewellery are been selling in
certain period of time according to it they purchase the raw materials and make finest jewellery out of it.
3.3.2.1 EOQ (Economic Order Quantity)

EOQ is the order quantity that minimizes total inventory holding costs and ordering costs. EOQ applies only
when inventory reaches zero. There is fixed cost for each unit held in storage, sometimes expressed as a
percentage of the purchase cost of the item.
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The required parameters to the solution are the total demand for the year, the purchase cost of each item, the fixed
cost to place the order and the storage cost for each item per year. Note that the number of times an order is
placed will also affect the total cost, though this number can be determined from the other parameters.
EOQ =
EOQ with interest and storage cost:

According to two production management authorities, the EOQ model remains the most popular model in use for
managing inventories. Over the years, a number of refinements hav been proposed in the EOQ model to deal with
the various special circumstances.
Modifications in the EOQ model are to deal with a special class of items namely bulky, inexpensive, low risk
(BIL) items. The traditional EOQ model does not deal effectively with this category of items, resulting in sub
optimization of the total costs. The traditional model assumes a uniform storage cost for all items that is
proportional to the unit price of the item.
The traditional economic order quantity model assumes that the storage space cost is proportional to the unit price
of each item. Therefore the storage cost is included in the inventory carrying charges.
Under these circumstances the total inventory cost (TC) is:

TC= A/Q x K + Q/2 x H x P
Where:
TC = annual inventory cost
A = annual consumption
K = cost of placing and receiving an order
H = holding cost for a dollar of inventory for one year
P = price per unit quantity
Q = quantity ordered
3.3.3 SAFTEY STOCK

Inventory held as buffer against mismatch between forecasted and actual consumption or demand, between
expected and actual delivery time and unforeseen emergencies. Also called reserve inventory.
D.Khushalbhai they have a stock of that type of jewellery which is very common in purchase.
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E.g. Mangal sutra seer (it is made up of black pearl and gold) then some rings in gold, silver, platinum which
have very common design and looks cool and are liked by people etc. they keep jewellery in their showcase
which can be said as safety stock as the customers are first interact with that jewellery only and if they like, they
purchase it on the other hand they have same piece of that jewellery which is then put on that showcase again by
the salesman.
3.3.4 INVENTORY CLASSIFICATION
3.3.4.1 ABC
In D.Khushalbhai they follow ABC method for inventory classification.
The ABC analysis is a business term to define an inventory categorization technique often used in materials
management. It is also known as Selective Inventory Control.
A items: very tight control and accurate records
B items: less tightly controlled and good records
C items: simplest controls possible and minimum records
The ABC analysis provides a mechanism for identifying items that will have a significant impact on overall
inventory cost, while also providing a mechanism for identifying different categories of stock that will require
different management and controls.
The ABC analysis suggests that inventories of an organization are not of equal value. Thus, the inventory is
grouped into three categories (A, B&C) in order to their estimated importance.
A items are very important for an organization.
Because of the high value of these A items, frequent value analysis is required.
In addition to that, an organization needs to choose an appropriate order pattern to avoid excess capacity
B items are important, but of course less important, than A items and more important than C items.
Therefore B items are intergroup items.
Example of ABC class is:
A items - 20% of the items for 70% of the annual consumption value of the items.
B items - 30% of the items for 25% of the annual consumption value of the items.
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C items - 50% of the items for 5% of the annual consumption value of the items.
In D.Khushalbhai the inventory is classified through ABC method and the whole scenario of their showroom is
made in that way only
For e.g. Jewellery from small amount is kept nearer to door and then jewellery with high cost is seated next to it.
The jewellery which contains very high cost is just next to partners cabin i.e.Mr Viren Chokshi & Mr. Deepak
Chokshi.
CABIN
HEAVY JEWELLERY
CHAINS,PENDENT SETS, BRACELETS,ECT.
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SILVER & GOLD LIGHT WEIGHT JEWELS
RINGS AND OTHERS
ENTRANCE
The salesman working in gold and silver department handle different showcase n they have to count every
jewellery after entering the firm in the morning and before going out in the evening. If any deviation is found out
then it is their responsibility to fulfill the lost. Also there is continuous watch on them by the owner Mr. Deepak
chokshi through hidden cameras.
While on the 2nd floor were diamond and platinum jewellery are kept, there the salesman are responsible for every
jewellery. No single salesman has priority for their individual showcase they have to count jewellery before and
after coming in the firm. This is managing by mr.viren chokshi.
3.3.4.2 VED:
While in ABC, classification inventories are classified basis on their consumption value and in HML analysis the
unit value is the basis, and criticality of inventories is the basis of VED classification.
The VED analysis is to determine the criticality of an item and its effect on production and other services. it
specially used for classification of spare parts.
VED CLASSIFICATION---V is for vital, E is essential and D is desirable.
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If a part is vital, its given V classification, if it is essential then given E classification, and if its not so essential,
then the part is given D classification.
For V items a large stock of inventory is generally maintained, where as for D items minimum stock is enough.
So stock control is a critical aspect of successful management of all the inventory control systems ABC and VED
matrix is most suitable for medical stores.
VED classification classifies parts as vital, essential, or desirable based on the functionality aspect and efficiency
aspect of each part. VED classification can also be used for other aspects of decision making such as talking into
consideration the due dates and manufacturing setups if desired. This is the subjective decision made by the users
and varies from part to part. An item is classified as vital in any of the following circumstances:
If the non- availability item shut down the process completely and there is no standby unit as a spare.
If the non-availability of the item is completely reduces the efficiency of the manufacturing process.
If the item is unique and/or the company involved is a world class manufacturer of the item.
An item is classified as essential in any of the following circumstances :
If the non-availability of the item shut down the process but a stand by unit exist.
If the non-availability of the item reduces the efficiency of the process.
An item is classified as desirable in any of the following circumstances:
If non-availability of the item does not affect the functioning of the manufacturing process
If non-availability of the item does not significantly affect the efficiency of the process.
Once the three classifications are performed independently, a method for combined them need to be developed.
The different methods of combining the classifications along with their analysis are discussed in the next section.
3.4 QUALITY CONTROL:

Quality control is the process that is used to ensure a certain level of quality in a product or it might include
whatever actions a business deems necessary to provide for the control and verification of certain characteristics
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of a product. Most often, it involves the thoroughly examining and testing the quality of products. The basic goal
of this process is to ensure that the products that are provided meets specific requirements and characteristics,
such as being dependable, satisfactory, safe and fiscally sound.
3.4.1 OBJECTIVES OF QUALITY CONTROL

3.4.1.1 Reduction in costTo reduce the cost per unit so that the firm can have enough profit and the customer are satisfied that the labour
cost is lower so they doesnt feel cheated.
3.4.1.2 Utilization of raw materialsTo achieve better utilization of raw materials, machines is it very necessary to maintain quality. For that they
have to watch that how much material is given to labour and exactly that much is received or not.
3.4.1.3 Maintain qualityTo take necessary corrective steps to maintain the quality of product. If the labour is lazy he will not maintain the
quality and add some other material in it so that he gets something extra. In the gold business the hall mark 916 is
very important for selling the gold jewellery. Now a day people are also aware about it so if any mistake is done
by labour it is necessary to correct so that it doesnt affect the goodwill of the company.
3.4.1.4Reduces customer complaintsTo achieve greater customer satisfaction by reducing customer complaints. Many a time customer are not
satisfied by the quality for e.g. the diamond rings are made with 20 carat to 18 carat gold because it requires
hardness to hold the diamond for a long time but it the labour made it in 16 carat then the customer will complaint
that the proportion of gold carat is wrong. To avoid such minor complains it is necessary to maintain the quality.
3.4.1.5 Identify faultsTo locate and identify the manufacturing processes faults in order to control and minimize scrap and waste. Again
when the labour are ordered to make jewellery he doesnt make it the final outcome, he go step by steps he can
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come to know his mistake and if the jewellery is of more weight and heavy then continuous observation has been
done so that any faults does not occur. If faults occur then they have to again make it which increases time and
energy.
3.4.2TECHNIQUE USED FOR QUALITY CONTROL:

In manufacturing the quality control aspect of the business is there to ensure that the end product meets the
requirement of the customer. If the product is not acceptable to the customers standards, they will not purchase
the product. This means the manufacturer will not receive any compensation for the product, but that he must
absorb the costs of materials, labour and equipment use that it took to create that faulty or
defective product. As with many steps and employee roles in manufacturing and business as a
whole, quality assurance is a natural step that is needed to ensure that the product or service being
produced will be accepted and paid for by the consumer. After all, it there is no pay there is no
reason to produce in the first place.
In D. khushalbhai jewelers they go for total quality control. They give 24 carat gold to labour and
the labour give them back 22 carat as some other material is mixed with gold to make it stronger.
Thus more care is taken on the quality i.e. carat.
4.4.3 GUIDELINES FOLLOWED FOR QUALITY CONTROL

All the materials are checked by the owner first.
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the labour should take care about the material from which jewellery is to be made.
for quality control the jewellery is first design on computer by the jewellery designer.
In D. khushalbhai all the item contain the respective mark for its purity and if it not there on
some jewellery then they give certificate for that which says it that which says it that the
jewellery is real.
make coating if necessary.
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CHAPTER:
HUMAN
RESOURCE
Page 46
MANAGEMENT
DEPARTMENT
4.1. INTRODUCTION
4.1.1 BASIC INTRODUCTION ABOUT HR DEPARTMENT:
The human resources of an organization consist of all people who perform its activities. Human resource
management (HRM) is concerned with the personnel policies and managerial practices and systems that influence
the workforce. In broader terms, all decisions that affect the workforce of the organization concern the HRM
function.
The activities involved in HRM function are pervasive throughout the organization. Line managers, typically
spend more than 50 per cent of their time for human resource activities such hiring, evaluating, disciplining, and
scheduling employees. Human resource management specialists in the HRM department help organizations with
all activities related to staffing and maintaining an effective workforce. Major HRM responsibilities include work
design and job analysis, training and development, recruiting, compensation, team-building, performance
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management and appraisal, worker health and safety issues, as well as identifying or developing valid methods
for selecting staff. HRM department provides the tools, data and processes that are used by line managers in their
human resource management component of their job.
4.1.2 TOTAL NUMBER OF EMPLOYEES AND BRANCH:
There is only one branch of khushalbhai jewellers in Surat. In 1995, D. KHUSHALBHAI Jewellers
started their jewellery business with a showroom in Surat.
There are 57 employees working under D. khushalbhai jewellers.
The HR manager in D. Khushalbhai is Bhadrish Gandhi.
Resources for humans are within the workplace! Its main objective is to meet the organizational needs of the firm
it represents and the needs of the people hired by that firm. In short, it is the hub of the organization serving as a
liaison between all concerned. Depending on the size of the firm, the HR Department might be called Personnel
with a manageable workforce that can be handled by a personnel manager and a small staff. Some firms have
more than one HR Department - Corporate and Union. But in D. khushalbhai there is only one department
serving the need of the firm.
4.2.3 ORGANIZATIONAL STRUCTURE

An organizational structure consists of activities such as task allocation, coordination and supervision, which
are directed towards the achievement of organizational aims. It can also be considered as the viewing glass or
perspective through which individuals see their organization and its environment.
Organizations are a variant of clustered entities.
An organization can be structured in many different ways, depending on their objectives. The structure of an
organization will determine the modes in which it operates and performs.
Organizational structure allows the expressed allocation of responsibilities for different functions and processes to
different entities such as the branch, department, workgroup and individual. Organizational structure affects
organizational action in two big ways. First, it provides the foundation on which standard operating procedures
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and routines rest. Second, it determines which individuals get to participate in which decision-making processes,
and thus to what extent their views shape the organizations actions
To ensure its success, a firm must establish a hierarchal reporting system. The funnel of responsibility is critical
to the efficiency of a smoothly operating business entity in which there is a clearly defined understanding of who
is responsible for what. They provide consultation to a firm's management team to identify what the firm core
business and culture is about, and proceeds to plan and map the firm's organizational infrastructure to support
those needs.
The HR organizational structure establishes specialist groups to work together within their speciality to manage
tasks within the HR organization. Each division may have a manager or team leader depending on the size of the
organization to coordinate efforts and perform reporting tasks.
Major HR projects and activities may require significant overlap and cooperation between HR functions and the
ability to temporarily adopt the function to operate on a cross functional team basis in smaller companies.
4.1.4 AUTHORITY AND RESPONSIBILITY OF HR MANAGER

HR Manager is one of the most important key to open a lock hanging on the door of success in an organisation. If
an HR Manager is efficient enough to handle and to take out best from his team members organisation can
achieve more from his target goals.
Responsibilities:
1. To maintain and develop HR policies, ensuring compliance and to contribute the development of corporate HR
policies.
2. To develop the HR team, to ensure the provision of a professional HR service to the organization.
3. To ensure recruitment of required level / quality of Management staff.
4. Develop, refine and fine-tune effective methods or tools for selection / or provide external consultants to ensure
the right people with the desired level of competence are brought into the organization or are promoted.
5. Prepare input for the salary budgets and see to it that each one get satisfying compensation for their work.
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6. To develop the HR business plan.
7. Ensure appropriate communication at all staff levels.
8. To maintain and develop leading edge HR systems and processes to address the effective management of
people in relation to the following in order to maintain competitive advantage.
9. To see to it that employees are working properly and their relation with customer are good or bad.
4.1.5 TO STUDY THE ACTIVITIES OF HR DEPARTMENT

1. To control the employees.
2. Bring harmonious relationship between them.
3. Control the policies of the firm.
4. Carry out recruitment whenever require.
5. Take corrective action against the miss behavior of any employee with the customer.
Note: in D. khushalbhai they hire security on contact bases
4.2 HUMAN RESOURCE PLANNING

Human resource planning refers to the process by which organizations determine their current and future
requirements of human resources in terms of number of people as well as the kind of people needed, and
determine the ways and means of meeting these requirements. It is a process which enables the organization to
have the right people at right time and right place. It involves determining the manpower requirements of the
organization in light of its operations, plans and strategies and organization structure.
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Specific steps of human resource planning process:
1. Establishing the total manpower requirements for different planning horizons.
2. Taking inventory of current manpower availability.
3. Anticipating changes in current manpower availability due to normal process such as improvement in abilities
through skill, promotion, retirement and resignations.
4. Establishing net shortage anticipated in case no specific action is taken to influence the availability of
manpower.
5. Determine the nature of actions such as recruitment, and training to be taken to meet the total manpower
requirement.
6. These actions also cover changes in policies and practices of conditions of employment to attract and retain the
right number of employees in the company.
7. Human resource planning is influenced by many factors both within and outside the organization.
4.2.1 INTERNAL FACTOR

1. Organizational plans which determine the overall level of operations or activities of the organization.
2. Organizational strategy and structure.
3. Current manpower availability in the organization.
4. Human resource policies and practices of the organization. Among others this includes the policies and
practices relating to remuneration and other conditions of employment.
4.2.2 EXTERNAL FACTORS

1. Government legislation
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Law with regard to working conditions, working hours , worker section , women and child labour ,
casual and contract labour , etc. does not permit management to hire and fire at free will.
2. job mobility factors

Investment in human resources belongs to the employee who takes his skills wherever he goes. With
increasing mobility , organizations find it difficult to retain talented personnel.
3. Employement situation
On the one hand , the number of educated unemployed is increasing, on the other hand , there is acute
shortage for a variety of skills.
4. Technological changes
The widespread and rapid changes in production technology , marketing methods and management
techniques are having profound effects on the contents and contexts of jobs.
5. Lead time
Longer lead time is required for selection and training of employees to handle new jobs and technology
successfully, this requires long-term human resource planning.
6. Demographic changes
The profile of the work force in terms of age , sex , education , technical skills and social background is
changing. Such changes have significant implications for human resource planning.
7. Shortage of skills
Organization have become increasingly complex and require a wide-range of specialized skills. These
skills are scarce and problems arise when employees with these skills leave an organization.
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4.2.2 TO STUDY THE JOB DESCRIPTION AND JOB SPECIFICATION OF THE VARIOUS
POSITIONS IN THE ORGANIZATION:
4.2.2.1 JOB DESCRIPTION

JOB DESCRIPTION is an organized factual statement of job contents in the form of duties and responsibilities of
a specific job. The preparation of job description is very important before a vacancy is advertised. It tells in brief
the nature and type of job. This type of document is descriptive in nature and it constitutes all those facts which
are related to a job.
The job description for salesman is that they must know how to convince the people, have enough knowledge
about the jewellery they are selling.
For floor manager- they have leadership quality, he know how to control customer when the rush increase in
showroom, he have to think about each salesman, have to assign work properly to this subordinates without any
priority and lastly have to give very much importance to his work.
4.2.2.2 JOB SPECIFICATION

A job specification describes the knowledge, skills, education, experience, and abilities you believe are essential
to performing a particular job. The job specification is developed from the job analysis. Ideally, also developed
from a detailed job description, the job specification describes the person you want to hire for a particular job.
JOB SPECIFICATION FOR SALESMAN
JOB DESCRIPTION FOR MANAGER
HSC Pass
B.COM Graduate
2 years experience
2 years experience
Communication Skill
Good strength to handle customer
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4.3. RECRUITMENT AND SELECTION

The organisation should recruit the most suitable and competent persons on the basis of the needs and nature of
the job. In other words, right men should be recruited taking into consideration the long term needs of the
organisation and they should be placed on jobs for which they are the most suitable. After the manpower
requirements are determined in terms of numbers through manpower planning and quality of employees through
job analysis the process of recruitment begins. In this way recruitment is an activity of establishing contact
between employer and applicant.
"Recruitment is the process of searching for prospective employers and stimulating them to apply
for jobs in the organization.
4.3.1 TO STUDY THE SOURCES OF RECRUITMENT USED BY THE ORGANIZATION:
Employees contacts
Advertisement
Waiting list
These 3 sources are used in D. khushalbhai whenever they find the need manpower in their firm. They firstly
asked their employees for any recommendation if they know. Secondly go for advertisement in daily newspaper.
And lastly they check or go through the waiting list i.e. those person who apply earlier for the job and are
rejected.
4.3.2 TO STUDY THE FACTORS AFFECTING RECRUITMENT:

The recruitment function of the organisations is affected and governed by a mix of various internal and external
factors. The internal factors are the factors that can be controlled by the organisation. And the external factors are
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those factors which cannot be controlled by the organisation. The internal and external forces affecting
recruitment function of an organisation are:
4.3.2.1 INTERNAL FACTORS:

1. RECRUITMENT POLICY
Recruitment policy of an organization specifies the objectives of recruitment and provides a framework for
implementation of recruitment programme.
2. HRP
Effective HRP helps in determining the gapes present in the existing manpower of the organization.
3. SIZE OF THE FIRM

The size of the firm is an important factor in recruitment process. If the organization is planning to increase
its operations and expand its business, it will think of hiring more personnel which will handle its operations.
4. COST OF RECRUITMENT
Recruitment incur cost to the employer , therefore , organization try to employ that sources of recruitment
which will bear a lower cost of recruitment to the organization for each candidates .
5. GROWTH AND EXPANSION

Organization will employ or think of employing more personnel if it is expanding its operations .
4.3.2.2 EXTERNAL FACTORS:

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1. SUPPLY AND DEMAND
Availability of manpower both within and outside the organization is an important determinant in the
recruitment process.
2. LABOUR MARKET
Employment conditions in the community where the organization is located will influence the recruiting
efforts of the organization.
3. IMAGE/GOODWILL
Organization with positive image and goodwill as an employer finds it easier to attract and retain employees
than an organization with negative image. Image of the company is based on what organization does and
affected by industry .
4. POLITICAL-SOCIAL-LEGAL ENVIRONMENT
Government regulations prohibiting discrimination in hiring and employment have direct impact on
recruitment practices.
5. UNEMPLOYMENT RATE
Of the factors that influence the availability of applicants is the growth of the economy. When the company is
not creating new jobs, there is often over supply of qualified labour which in turn leads to unemployment.
6. COMPETITORS
Recruitment policies of the competitors also effect the recruitment function of the organization. To face the
competition, many a times the organizations have to change their recruitment policies according to the
policies being followed by the competitors.
4.3.3 TO STUDY IN DETAIL THE PROCESS OF SELECTION FOR VARIOUS LEVELS OF

EMPLOYEES:
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Selection is the process of conducting interviews, tests, simulations, etc. and then choosing the proper candidate
for the position.
In D. khushalbhai the selection of salesperson is done only. The head persons are with the firm from very long
period of time.
Generally the process takes place in following manner:
1. Pre Interview Screening & Preliminary Interview
2. Application Form
3. Personal Interview
4. Checking References
5. Credit Checks
6. Tests
7. Physical Examination
8. Job Offer
But in D. khushalbhai it takes place in following manner:
1. Preliminary interview for all candidates
2. Personal interview
3. Checking references, qualification and experience
4. Lastly those who have the best are selected for the job
4.4 TRAINING AND DEVELOPMENT

The method use in firm is on the job training. This method of training uses more knowledgeable, experienced and
skilled employees, such as mangers, supervisors to give training to less knowledgeable, skilled, and experienced
employees. This type of training often takes place at the work place in informal manner.
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4.4.1 TO STUDY DIFFERENT TYPES OF TRANING GIVEN BY ORGANIZATION FOR
DIFFERENT LEVELS OF EMPLOYEES:
4.4.1.1 Some key points for on the job Training
It is done on ad-hoc manner with no formal procedure, or content
At the start of training or during the training, no specific goals or objectives are developed
Trainers usually have no training experience for training
Training is not carefully planned or prepared
The trainers are selected on the basis of technical expertise or area of knowledge
Formal OJT programs are quite different from informal OJT. These programs are carried out by identifying the
employees who are having superior technical knowledge and can effectively use one-to-one interaction technique.
4.1.1.2 The procedure of formal on the job training program is:
1. The participant observes a more experienced, knowledgeable, and skilled trainer (employee).
2. The method, process and techniques are well discussed before, during and after trainer has explained
about performing the tasks.
3. When the trainee is prepared, the trainee starts performing on the work place.
4. The trainer provides continuing direction of work and feedback.
5. The trainee is given more and more work so that he accomplishes the job flawlessly.
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4.4.2 TO STUDY IN DETAIL MANAGEMENT DEVELOPMENT PROGRAM OFFERED BY
COMPANY:
1. Demonstration / instruction - showing the trainee how to do the job.
2. Coaching - a more intensive method of training that involves a close working relationship between an
experienced employee and the trainee.
3. Job rotation - where the trainee is given several jobs in succession, to gain experience of a wide range of
activities (e.g. a graduate management trainee might spend periods in several different departments)
4. Projects - employees join a project team - which gives them exposure to other parts of the business and
allow them to take part in new activities. Most successful project teams are multi-disciplinary.
In D. khushalbhai they provide informal on-the-job training. For 15 20 days the new salesman or any head
persons (not happened till) have to observe and learn the work from their corresponding seniors.
4.5 PERFORMANCE APPRAISAL SYSTEM

4.5.1 TO STUDY THE PERFORMANCE APPRAISAL SYSYTEM FOR DIFFERENT
LEVELS OF EMPLOYEES:
What happened in D. khushalbhai for performance appraisal let us know the over view of it.
Keeping in mind the growing attrition rates and the employee dissatisfaction among the employees, the HR
professionals are approaching and using the performance appraisal as a fuel to motivate employees. The latest
trend being followed by the HR professionals is to use the performance appraisal and review process as a
motivating mechanism. Various surveys and studies have testified the relationship between performance review,
pay and motivation.
Other than the traditional goal of accessing the performance of the employees, Performance appraisals and
reviews can be used as a tool to reinforce the desired behaviour and competent performance of the employees.
One of the most motivating factors for the employees, in the Performance appraisal processes is to receive a fair
an accurate assessment of their performance. Inaccurate evaluation is one reason because of which most
employees dread going through performance appraisals. An employee always expects his appraiser to recognize
and appreciate his achievements, support him to overcome the problems and failures.
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The discrepancies and the inaccuracies in the performance review can demotivate the employees, even if there
has been an increase in the salary. Such inaccuracies can kill the innovating and risk taking enthusiasm and spirit
in the employees. Similarly, inaccurate reviews with no hike in compensation can increase the attrition rate in the
organization, forcing the employees to look out for other options.
Employees, who receive both accuracy and a pay increase during their performance review, are likely to be the
most motivated. Therefore, performance appraisal has the potential of motivating employees and increasing their
job satisfaction.
In D. khushalbhai the performance appraisal take place on merit base system. All the employees working in any
department on any position are appraised on the merit base performance system. In merit base performance
appraisal the work done by them are taking under consideration and not the seniority or the time pass by them
with the firm.
All the employees are appraised after (6months 1 year) joining the firm. Their work is given priority and no
other factor. Here in D. khushalbhai the employees have their focuses on their work only and they are been
observed by the owner or GM.
4.5.2 TO STUDY THE OBJECTIVES BEHIND THE APPRAISAL PROCESS:

Performance Appraisal can be done with following objectives in mind:
To maintain records in order to determine compensation packages, wage structure, salaries raises, etc.
To identify the strengths and weaknesses of employees to place right men on right job.
To maintain and assess the potential present in a person for further growth and development.
To provide a feedback to employees regarding their performance and related status.
It serves as a basis for influencing working habits of the employees.
To review and retain the promotional and other programmes.
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4.6 PROMOTION AND TRANSFER POLICIES

4.6.1 TO STUDY PROMOTION, TRANSFER AND DEMOTION POLICIES OF D.
KHUSALBHAI JWELLERS:
4.6.1.1
PROMOTION
The permanent movement of a staff member from a position in one job class to a position in another job
class of increased responsibility or complexity of duties and in a higher salary range.
In D. khushalbhai the promotion of the employees take place on the basis of the work done by them. The
permanent movement of a staff member from a position in one job class to a position in another job class
of increased responsibility or complexity of duties and in a higher salary range.
In D. khushalbhai the promotion of the employees take place on the basis of the work done by them. They
get promotion in terms of both 1- in their post and 2- in their salary But for salesman they generally get
promotion in terms of salary first and then if their work is so much appreciated then they become floor
manager.
4.6.1.2 ADVANTAGE OF PROMOTION
Promotion recognized employees performance and commitment and motivated him towards better
performance.
Promotions retain skilled and talented employees.
Promotions develop competitive separate for acquiring knowledge required to move to higher level job.
Promotions develop a competent internal source of employeement for a higher level of job.
4.6.2 TRANSFER
A transfer refers to horizontal movement of an employee for one job to another in the same organization
without any change it status or salary
As there is no other branch of D. khushalbhai the transfer does not take place in firm.
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4.6.3 DEMOTION
The permanent movement of a staff member from one position in one job class to a position in another job
class of decreased responsibility or complexity of duties and in a lower salary range.
It is not yet happen that the promoted employees are again demoted in D. khushalbhai.
But their policy says that if any customers complain then related action are taken against that employee,
they first discuss with them and though the employee does not behave properly then only demoted or
fired.
4.6.2 TO STUDY THE FACTORS WHICH ARE CONSIDERED BEFORE GIVING

PROMOTION, TRANSFER AND DEMOTION:
Job experience as part of their development and to fill vacancies as they occur.
Their work performance.
Their convincing power.
4.7. WAGES AND SALARY ADMINISTRATION

4.7.1 TO STUDY THE DETAIL WAGE/SALARY STRUCTURE FOR DIFFERENT LEVELS
OF EMPLOYEES IN THE ORGANIZATION
The salary structure in D. khushalbhai is as follows:
Marketing department:
Salesman are paid 8000-9000 Rs and then increase with their performance
Floor manager- 14000-16000 Rs again increase with their performance
Accounts/finance department:
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Juniors paid 9000- 11500 Rs
Seniors paid 15000-20000 Rs
Human resource department:
In HR department there are only few employees working and they are paid 7000 Rs.
4.7.2 TO STUDY INCENTIVE PLAN

In D. khushalbhai the salary of the employees is bifurcated in different segment i.e. in their total salary there is
70% base salary for their work done in the firm, then 6% allowance for senior employee in the salary only, 15%
health /insurances benefit and 3% for other benefit like if they purchase any jewellery then they get certain
discount on it more than which is offer to customer.
4.8 EMPLOYEE WELFARE ACTIVITIES:

Employee welfare means the efforts to make life worth living for workmen. employee welfare means anything
done for the comfort and improvement, intellectual or social, of the employees over and above the wages paid
which is not a necessity of the industry.
4.8.1 TO STUDY DIFFERENT WELFARE ACTIVITIES DONE BY THE ORGANIZATION

The features of employee welfare are:
Employee welfare is a comprehensive term including various services, facilities and amenities provided
to employees for their betterment.
The basic purpose in to improve the lot of the working class. Employee welfare is a dynamic concept.
Employee welfare measures are also known as fringe benefits and services.
Welfare measures may be both voluntary and statutory
Employee welfare is in the interest of the employee, the employer and the society as a whole.
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The objectives of welfares of employees are:
It helps to improve.
It improves the loyalty and morale of the employees.
It reduces labor turnover and absenteeism .
Welfare measures help to improve the goodwill and public image of the enterprise.
It helps to improve industrial relations and industrial peace.
It help to improve employee productivity. Types of welfare services
Intramural: - These are provided within the organization like:

1.
Canteen,
2.
Rest
rooms,
3.
Crches,
4. Uniform etc.
Extramural: - These are provided outside the organization, like:

1.
Housing,
2.
Education,
3.
4.
5.
6.
Child
Leave
Interest
Workers
welfare,
travel
free
cooperative
facilities,
loans,
stores,
7. Vocational guidance etc.
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CHAPTER: 5
FINANCE
DEPARTMENT
Page 65
5.1 ORGANIZATIONAL STRUCTURE
Viren Choksi
Amit Sir
(accountant)
Mahendra joshi
(cashier)
5.2 WORKING CAPITAL MANAGEMENT

5.2.1 CASH MANAGEMENT
Cash management means planning of optimum level of cash balance and cash flows and monitoring
the optimum level of cash balance and cash flows with an objective of minimizing the cost and
maximizing the profitability.
5.2.1.1
NEED FOR CASH:
5.2.1.1.1
Transaction Motive
Business unit has to carry on a large number of day to day cash transactions. Cash is needed for
payment of such transactions. Moreover, cash balance is needed for the payment of wage,
electricity bills, telephone bills, stationary charges, etc. if there is synchronization between cash
receipt and cash payment. Therefore maintenance of cash balance is highly essential.
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E.g. D. Khushalbhai also require cash for their day to day transaction so that their work is carried
out easily without any problems.
5.2.1.2 Precautionary motive
Sometimes contingency needs for cash also arise. Exploision in the factory, breakdown of machines, fire flood,
earthquake etc. create the need for cash. Ofcourse such events do not happen daily, they happen very rarely,
however as a precaution the company has to maintain sufficeient cash balance to meet contingency expenditures.
E.g. In D. Khushalbhai they keep certain amount of cash with them which can help them to sustain in the critical
situation.
5.2.1.3 Speculative motive
Speculative motive is the motive of earning profit from price fluctuation. When the company purchase raw
material at current low price in anticipation of rise in price in the nearer future it is speculative purchasing. Such
opportunities of speculative gain do come in the life of the company. But its advantage can be repeated only when
the company has enough cash balance tomake speculative buying. Speculative motive is strengthened when there
is a step fall in prices.
E.g. The Khushalbhai jewelers deal with materials which are very precious or costly so they have to keep cash to
achieve this benefit. If they dont keep cash to buy materials in low prices then they have disadvantages of it and
their competitors will get benefited and achieve more profit in business which harm them in future.
5.2.1.4 Compensatory motive
Commercial banks provide certain services to their customer free of charge. In order to compensate the cost of
free service they desire that every customer should maintain the minimum cash balance with the bank. Generally,
minimum bank balance is prescribed by the bank for saving and current accounts. If that minimum balance is not
maintained then the bank levis certain charges.
In D. Khushalbhai there is no such motive of cash management.
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5.2.2 MANAGEMENT OF RECIEVABLES
5.2.2.1 Introduction
Receivables include debtors and bills receivables. Both of these particular originate from credit sales account.
The following three features of receivables increase the importance of its management.
Firstly, in credit sales there is risk of losing money.
Secondly, the possession of the goods is given to present customers, but price is paid in future. Sellers capital
remains blocked up till payment is made by the customer.
Thirdly, there is a risk of reduction in the real value of money due to inflation.
5.2.2.2 Objectives of maintain receivables
To increase the sales
It is quite natural that the policy of credit sales attracts more customers for purchasing. Those who do not
have money at present for purchasing are also induced to purchase with the expectation of making payment
from its sales proceed. In, short credit sales increases sales volume.
Competition
In order to survive in the competition every enterprise has to adopt the strategy of following the footsteps of
competitors. If a company ignoring the liberal credit policy. Here credit sale is accepted as a marketing tool to
boost up sales and profit.
Increase in profit
The ultimate aim of credit sales is to increase profit by increasing sales volume through proper credit policy.
Profit can be optimized by adopting optimum credit policy. Here credit sale is accepted as a marketing tool to
boost up sales and profit.
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5.2.2.3 Need for receivable management

5.2.2.3.1 To minimize the costs of receivable
Receivable is not the costless assets of the company. It has the cost of different types. Poor management of
receivables increase the costs associated with receivables and an efficient management with receivables.
Opportunity cost:
Because of credit sales a part of the working capital remains invested in receivables. Such investments in
receivables may be equal to the cost of raw material used in the sold goods, wages paid for processing and the
other indirect expenses. If such an account is not invested in the receivables it could have been put to
alternative uses for earning income. Opportunity cost is considered equal to expected rate of return in the
business.
E.g. expected rate of return from the business is 20% then the opportunity cost of receivables will be 20% of
receivables.
Administration cost:
Administration cost of receivables include the cost of processing the order, postage cost, stationary cost,
collection cost, litigation cost, book keeping cost, filing cost etc.
Collection cost:
If the customer doesnt pay in time we have to write letter, reminders, send telegram or fax message and
sometimes we have to send a personal also. Collection costs up to a certain debtors do not make payment. At
last we have to write off the amount as debt. Bad debt increases with liberalization of credit.
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5.2.2.3.2 To maximize volume of sales and profit
Management of receivables is needed for maximization of sales volume and profit. Liberalization of credit
terms may increase sales and profit up to a certain extent, but beyond that point liberalization of credit terms
may increase the sales but the cost may exceed the gain from the incremental sales. As a result cost may
increase and profit may decline. What is needed is trade between the cost and benefit by optimizing credit
terms like credit period cash discount and collection policy. For maximizing sales volumes and profit by
adopting optimum credit terms management of receivable is needed.
5.2.3 INVENTORY MANAGEMENT

5.2.3.1
Types of Inventory
Raw Material
This is the goods which have not been so far committed to production in a manufacturing business firm. They
include unprocessed basic raw materials, finished components or spare parts or intermediate goods to be used
as raw materials.
Work In Progress
This refers to those materials which have been committed to production process but not yet been committed.
In other work the semi-finished products which is half completed and half left to be completed are in this
category.
Finished Goods
These are processed and completed products waiting for sale. They are the final product or output of the
production process in a manufacturing firm. They are merchandise inventory for wholesalers and retailers.
5.2.3.2
Need For Maintaining Inventory
For maintaining the continuity of different types of business processes

For maintaining the continuity of different types of business processes stock of raw material, semi-finished
goods and consumable stores are needed. But there is a time gap between the time of need and the time of
acquisition. If stock in insufficient quantity is not maintained, production process is interrupted and stock out
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cost increase. Therefore, in order to maintain the continuity of production process and reduce the stock out
cost it is necessary to maintain the inventory of the materials, semi-finished goods and consumable stores.
For maintaining the continuity of sales
Delivery in time is an important point for consumer satisfaction and delight. But it is not possible to
manufacture as soon as order is received. For delivery in time it is essential to maintain the stock of finished
for maintaining the continuity of production and sales is also known as TRANSACTIONS MOTIVE.
E.g. in any firm they get profit only after the sales has been done. But sales can be done only when there is a
certain stock level of finished goods. In D. khushalbhai they provide certain level of finished goods because in
the showroom the customer comes and wants to see the readymade jewellery, instead of to give order for
them. For continuity in sales it is necessary to maintain inventory.
Precautionary motives
The position of supply of raw material and demand for finished goods are always changing. It may happen
that shortage of raw material may interrupt the production. In order to meet such uncertainty a certain level of
stock of raw material should be maintain. On the other hand demand for finished goods and its prices are
rising, but because of non availability of stock of finished goods the opportunity cannot be availed of. For
taking the advantage of such opportunity it is needed to maintain a certain level of finished goods. Here, the
stock is maintained with precautionary motive of taking advantage of increase in demand.
E.g. sometimes in different festivals and occasion a sudden increase in purchase of jewellery notice. Also in
marriage season people use to bye jewellery more compare to normal days. Also very often some people think
to invest money in jewellery is beneficial so they purchase jewellery in big amount. To get gain of all this
positive changes it is necessary to maintain inventory at that point of time.
Speculative motives
Motive of taking advantage of favourable price changes is known as a speculative motive. It aims at making
profit from price fluctuation. According to changing situation of price the stock level is also changed.
Suppose there is possibility of prise rise of raw material in near future, a higher level of stock may be
maintained to take advantage of rise in price.
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E.g. The khushalbhai jewelers keep the safety stock which can be used for sale purpose when the price of
material is very high. They purchase such stock in low rate and after the jewellery is made it is sold out on
higher rate. These lead profit to the firm. So to earn a good amount of profit it is necessary to maintain the
inventory. To maintain the production processes.
To maintain the production processes
Raw materials have to undergo several processes before it turns out as finished product. In each process a
certain quantity of raw material or semi-finished goods remain blocked up which is known as gods in process.
It is needed for maintaining the continuity of production processes.
E.g. The jewellery take 7-9 days for its manufacturing so when the jewellery is produced by labour on one
side, on the other side it is very important to show jewellery to customer visiting in the firm. The customer
doesnt wait for jewellery to be produced and they go to the substitute firm for their requirement. So to make
production process continues it is very important to maintain inventory with the firm.
5.2.4 Objective of inventory management
To ensure supply of raw materials for maintaining the continuity of production.
To keep sufficient quantity of raw material during scarcity.
To maintain the continuity of sales by keeping sufficient stock of finished goods.
To store the different items scientifically i.e. to classify and give code number to each item.
To reduce the costs associated with the inventory like opportunity cost, insurance cost, wastage, rent
of godown, stock out cost etc.
To make effective use of available capital.
To see that optimum level of investment is made in inventory.
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5.4 MANUFACTURING SECTOR / SERVICE SECTOR

5.4.1 REVENUE STATEMENT RATIO
5.4.1.1 GROSS PROFIT RATIO
Gross profit ratio is the ratio of gross profit to net sales i.e. sales less sales returns. The ratio thus reflects the
margin of profit that a concern is able to earn on its trading and manufacturing activity. It is the most commonly
calculated ratio.
Particulars
Gross profit ratio (Net
2010
2011
2012
15.29 %
15.729 %
17.54 %
sales-cost of goods sold)
Interpretation:
The selling price of the goods has gone up without corresponding increase in the cost of goods sold. The cost of
goods sold has gone down without corresponding decrease in the selling price of the goods.
5.4.1.2 NET PROFIT RATIOS

Net profit ratio (NP ratio) expresses the relationship between net profit after taxes and sales. This ratio is a
measure of the overall profitability net profit is arrived at after taking into accounts both the operating and nonoperating items of incomes and expenses. The ratio indicates what portion of the net sales is left for the owners
after all expenses have been met.
Particulars
2010
Net Profit ratio (Net 2.48 %

profit
after
2011
2012
3.30 %
4.13 %
tax/Net
sales) x100
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Interpretation:
Due to increase in price of gold ornaments and more purchase of it take place leads to increase in income greater
than the expense. The NP ratio increases every year because the income increase day by day but the expenses i.e.
operating, selling and distribution and other doesnt increase more than income.
5.4.1.3 OPERATING RATIO

The operating ratio is determined by comparing the cost of the goods sold and other operating expenses with net
sales. This ratio is a test of the efficiency of the management in their business operation. It is a means of operating
efficiency. In normal conditions, the operating ratio should be low enough so as to leave portion of the sales
sufficient to give a fair return to the investors.
Particulars
Operation
2010
ratio 65.63 %
2011
2012
67.96 %
60.99 %
(COGS+OP/Net sales) x
100
Interpretation:
The decrease in operating ratio indicates that there will be increase in the profitability of the firm. The expenses
decrease which leads the profit of the firm to increase. Operating ratio plus operating profit ratio is 100. The two
ratios are obviously interrelated. For example, if the operating profit ratio is 20%, it means that the operating ratio
is 80%. A rise in the operating ratio indicates a decline in the efficiency.
5.4.1.4 Expense ratio

Expense ratios are calculated to ascertain the relationship that exists between operating expenses and volume of
sales. Expense ratios are calculated by dividing each item of expense or group of expenses with the net sales so
analysis the cause of variation of the operating ratio. It indicates the portion of sales which is consumed by
various operating expenses. These ratios are expressed in terms of percentage. The total of the above ratios will
be equal to the operating ratio.
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Particulars
2010
2011
2012
Expense ratio
3.765 %
3.39 %
3.30 %
Interpretation:
The expense or cost on employees welfare increases which leads to decrease the ratio. Firstly there was less
welfare activity for employees but now a new restaurant in the firm was made for them. Also other things are
given to them which increase the expense and decrease the ratio.
5.4.1.4.1 ADMINISTRATIVE EXPENSE RATIO

The sales to administrative expenses ratio measures how well the company is keeping its administrative costs
under control for its current sales level. Some companies include their sales and marketing expenses in with
administrative expenses, but others will keep these figures separate.
Particulars
2010
2011
2012
Administrative
0.30 %
0.33 %
0.379 %
expense
ratio
(overhead
expense/net sales) X
100
Interpretation:
The depreciation increases because of purchase of new assets in the show room. Due to which the dept. cost
increases. This can be observed by its increasing ratio.
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5.4.1.4.2 Finance expense ratio:

Particulars
2010
Finance
expense 1.87 %
2011
2012
1.91 %
2.27 %
ratio
Interpretation:
In the same way the finance cost increases which leads to increase the ratio. Firstly there were no expenses done
on maintaining financial records but now the cost increase as people are appointed for maintains finance.
5.4.1.5 Stock turnover ratios

Inventory turnover ratio or Stock turnover ratio indicates the velocity with which stock of finished goods is sold.
Generally it is expressed as number of times the average stock has been turned over or rotates of during the
year. High turnover suggests efficient inventory control, sound sales policies, trading in quality goods, reputation
in the market, better competitive capacity and so on. Low turnover suggests the possibility of stock comprising of
obsolete items, slow moving products, poor selling policy, over investment in stock etc.
Particulars
2010
Stock
turnover 149:1
2011
2012
1.57:1
1.43:1
(opening stock + net

purchase
expenses
direct
closing
stock)
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Interpretation:
There is a decrease in stock turnover ratio because now days the price of material of gold and silver is very costly
so the purchase of such items decreases on a slow scale. As we now the firm have increase in stock turnover is
cannot be said as good enough. Thus this ratio interprets that a reason behind decrease in ratio is due to increase
in price of jewellery.
5.4.2 BALANCE SHEET RATIO:

5.4.2.1 CURRENT RATIO
Current ratio is also known as working capital ratio or 2: 1 ratio. It is the ratio of total current assets to total
current liabilities. Current assets are those which are usually converted into cash or consumed with in short
period. Current liabilities are required to be paid in short period.
Particulars
Current
2010
ratio 1.28:1
2011
2012
1.14:1
1.26:1
(current
assets/current
liabilities)
Interpretation:
The increase in current ratio says there is enough of a current asset with the firm to pay its current liability. The
firm has more inventories in current assets which increase its ratio. On the other side the cash and receivables are
not equal to inventories. The current liability is low in 2010 but it increases in 2011 and again its increases in.
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5.4.2.2 LIQUID RATIOS
A class of financial metrics that are used to determine a company's ability to pay off its short-terms debts
obligations. Generally, the higher the value of the ratio indicates the larger the margin of safety that the company
possesses to cover short-term debts.
Formula:
Liquid ratio = liquid assets (current assets- stock prepaid expenses) / liquid liability (current liability bank
O/D)
Particulars
Liquid
2010
ratio
(LA 0.22:1
2011
2012
0.23:1
0.11:1
(CA-stock-prepaid
exp.)/LL
(CL-bank
O/D)
Analysis:
There is a decrease in the ratio because the cash, receivables and short term loan decreases. The reason behind
this is the deficiency of cash in the business.
5.4.2.3 Acid test ratio

Quick ratio is also known as acid test ratio. Current ratio provides a rough idea of the liquidity of a firm so
subsequently a second testing device was developed named as acid test ratio or quick ratio. It establishes
relationship between liquid assets and current liabilities. In many businesses a significant proportion of current
assets may comprise of inventory. Inventory, by nature, cannot be converted into ready cash abruptly. The term
liquid assets does not include inventory.
Page 78
Particulars
Acid
test
2010
(liquid 0.08:1
2011
2012
0.06:1
0.04:1
assets/current
liability)
Interpretation:
The liquid assets are decreasing but the current liability increases this cause adverse effect to the firm. The firms
have less liquidity to pay its current liability at the time of liquidation.
5.4.2.4 PROPRIETARY RATIOS

Proprietary ratio is also known as Equity Ratio or Net worth to total assets or shareholder equity to total equity.
Establishes relationship between proprietor's funds to total resources of the unit. Where proprietor's funds refer to
Equity share capital and Reserves, surpluses and Tot resources refer to total assets.
Particulars
Proprietary
2010
ratio 18.67 %
2011
2012
20.80 %
28.41 %
(proprietors
fund/total assets) x
100
Interpretation:
Here instead of shareholders fund partners fund is taken into consideration. The ratio is inclining in nature. The
assets are more than the partners fund. There is increase in the ratio because the partners fund is increasing.
Page 79
5.4.2.5 DEBT- EQUITY RATIOS
The relationship between borrowed funds and internal owner's funds is measured by Debt-Equity ratio. This ratio
is also known as debt to net worth ratio.
Particulars
Debt
equity
(total
long
2010
ratio 67.65%
2011
2012
9.12%
1.74%
term
debts/partners fund)
Interpretation:
The firms other long term liability was big in 2010 which result into high ratio of debt.-equity ratio. This liability
was paid and thus in the next 2 years the companys have very less long term borrowing which in turns give low
debt.-equity ratio.
5.4.2.6 LONG TERM FUNDS TO FIXED ASSETS RATIO

This ratio establishes the relationship between long term funds (equity plus long-term loans) and fixed assets.
Since financial management advocates that fixed assets should be purchased out of long term funds only.
Particulars
2010
Long term funds to 0.82:1
2011
2012
8.21:1
17.61:1
fixed assets ratio (net

fixed
assets/long
term funds)
Page 80
Interpretation:
Again the same condition the firm have a liability more in 2010 and less fixed assets to pay if the liquidation
accurse. But these situations not arise and the firm now have enough of fixed assets which can be seen in the
table. So the ratio is increases double from 2011 to 2012.
5.4.3 COMPOSITE RATIOS

5.4.3.1 RETURN ON CAPITAL EMPLOYED
Return on capital employed is an accounting ratio used in finance, valuation, and accounting.
Particulars
2010
Return on capital employed 40.57%
2011
2012
38.01%
67.58%
(NOPAT/capital employed)
Interpretation:
Return on capital employed ratio measures the efficiency with which the investment made by shareholders and
creditors is used in the business. Managers use this ratio for various financial decisions. It is a ratio of overall
profitability and a higher ratio is, therefore, better. So as compared to year 2011 both 2010 and 2012 shows good
profitability in the firm.
5.4.3.2 RETURN ON SHAREHOLDERS FUND

The return on shareholders fund ratio is a measure of the profit for the period which is available to the ordinary
shareholders with the ordinary shareholders stake in a business.
Particulars
2010
Return on shareholders fund 28.92 %
2011
2012
19.04 %
34.50 %
((PAT&pref.
Dividend)/(ordinary
share
capital+reserves)) x 100
Page 81
Interpretation:
Return on equity (ROE) is widely used to measure the overall profitability of the company from preference and
common stockholders view point. The ratio also indicates the efficiency of the management in using the
resources of the business. Higher ratio means high return on shareholders investment. Investors always search
for the highest return on their investment and a company that has higher ROE ratio than others in the industry
attracts more investors.
5.4.3.3 DEBTORS AND DEBTORS TURNOVER RATIO

The debtors days ratio measures how quickly cash is being collected from debtors. The longer it takes for a
company to collect, the greater the number of days of debtors. Debtor days can also be referred to as debtor
collection period.
Debtors turnover ratio exhibits the speed of collection process of firm in collecting the over dues amount from the
debtors and against bills receivables.
NOTE:
As the firm is jewellery manufacturing unit it has no debtors from whom they collect cash, so it is not possible to
calculate debtors ratio and debtors turnover ratio.
5.4.3.4 CREDITORS VELOCITY AND CREDITORS TURNOVER RATIO

The creditors velocity ratio measures how quickly cash is being paid to creditors. The longer it takes for a
company to pay, the greater the number of days of creditors. Creditors days can also be referred to as creditor
collection period.
Creditors turnover ratio signifies the credit period enjoyed by the firm in paying creditors. Accounts payable
include both sundry creditors and bills payable.
5.4.3.5 TOTAL ASSETS TURNOVER RATIO

A ratio is determined by dividing net sales by average total assets for the period. This ratios shows how
efficiently a company uses its assets to generate sales.
Page 82
Particulars
2010
Total assets turnover 2.17:1
2011
2012
2.33:1
2.37:1
ratio (net sales/total

assets)
Interpretation:
The firms total assets were more in 2012. The ratio increases every year which suggest that there is more
turnover of assets take place. Sales of the firm increase along with the total assets.
5.5 BANKING SECTOR

5.5.1 CREDIT AND RISK MANAGEMENT OF REPRESENTATIVE BANK
5.5.1.1
Types of risks faced:
The term risk and the types associated to it would refer to financial risk or uncertainty of financial loss. The RBI
guidelines issued in Oct.1999 has identified and categorized assumed to be encountered by banks. This belongs to
the clusters:
Credit risk, market risk, and operational risk.
The type of risk can be fundamentally subdivided in primarily of two types that is financial and non-financial
risks. Financial risk would involve all those aspect which deal mainly with financial aspect of the bank. These can
be further sub-divided into credit risk and market risk. Both credit and market risk may be further subdivided.
Non-financial risk would entail all the risk faced by the bank in its regular working, i.e. operational risk, strategic
risk, funding risk, political risk, and legal risk.
5.5.1.2
Risk involved in various types of loan:
Banking Risks
When a banker makes a loan, he is taking a risk that the borrower will pay the loan back, and also taking the risk that
the funds loaned out won't be needed to pay out withdrawals or to take care of regular bank business, thereby
Page 83
preventing bank runs. Further, the banker is undertaking "interest rate risk," which is more subtle but still present.
Interest rate risk represents the possibility that the bank has somehow priced its loan and deposit interest rates
incorrectly, be it the bank's fault or the fault of an ever-changing marketplace. If it turns out that the loan payments
aren't high enough to cover deposit costs, the bank will fail to be profitable.
Depositor's Risks
Depositors to banks have their own sets of risks. Most significantly, the depositor is worried about credit risk--if the
bank fails, the depositor wonders if he will be able to get back the money he put in. However, depositors don't really
have a comparable number of risks as bankers, because safeguards are in place. Most banks are unlikely to refuse to
give depositors back their deposits, and the FDIC insures bank deposits up to a set amount, so this risk is relatively
low. Other risks that depositors worry about, are incidental compared to getting back their deposits.
Borrower's Risks
Risks are relative to each person, so it is hardly surprising that the borrower has his own sets of risks that he cares
about. Firstly, the borrower got a loan for a reason, and if she borrowed logically, she borrowed such that the returns
on the investment that she is going to use the loan for are higher than the loan costs, putting her ahead in the long run.
This means that the borrower has risk: risk that the return on the investment will be too low and the costs of the loan
too high, making his endeavor a financial failure. This is a form of interest risk. The borrower faces other risks but
these other forms of risk reflect on the investment, not on the loan. The biggest risk for a borrower, then, is that
something will go wrong with the investment and he won't be able to pay back the loan.
5.5.2.3 LOAN APPRAISAL PROCESS (CREDIT PROCESS)

PEOCEDURE FOR LOAN APPRAISAL:
STEP-1 SUBMISSION OF LOAN APPLICATION:
The financial institutions require that an entrepreneur seeking financing assistance should furnish detail
information about the project in a prescribed form the borrower submits an application form that seeks
comprehensive about the project.
STEP-2 INITIAL PROCESSING OF LOAN APPLICATION:
When the application is received, an officer of the financial institution reviews it to ascertain whether it is
complete for processing. If it is incomplete borrower is asked to provide the required additional information.
When the application is considered complete, the financial institution prepares a Flash report which is
Page 84
essentially a summarization of the loan application. On the basis of the Flash report, it is decided whether the
project justifies a detailed appraisal or not.
STEP-3 APPRAISAL OF THE PROPOSED PROJECT:
The detailed appraisal of the project covers the marketing, technical, financial, managerial, and economic aspects.
The appraisal memorandum is normally prepared within two months after site inspection. Based on that decision
is taken whether the project will be accepted or not.
STEP-4 ISSUE OF THE TERMS & CONDITIONS BY BORROWING UNIT:
If the project is accepted, a financial letter of sanction is issued to the borrower. This communicates to the
borrower the assistant sanctioned and the terms and conditions relating theory.
STEP-5 ACCEPTANCE OF THE TERMS & CONDITIONS BY BORROWING UNIT:
On receiving the letter of sanction from the financial institution, the borrowing unit convenes its board meeting at
which the terms and conditions associated with the letter of sanction are accepted and an appropriate resolution is
passed to that effect. The acceptance of the terms and conditions has to be employed to the financial institution
within stipulated period.
STEP-6 EXECUTION OF LOAN AGREEMENT:
The financial institution, after receiving the letter of acceptance from the borrower, sends the draft of the
agreement to the borrower to be executed by the authorized persons and properly stamped as per the Indian stamp
Act, 1899. The agreement, properly executed and stamped, along with other documents as required by the
financial institution must be returned to it. Once the financial institution also signs the agreement, it becomes
effective.
STEP-7 DISBURSEMENT OF LOAN:
Periodically, the borrower is required to submit information on the physical progress of the projects, financial
status of the project, arrangements made for financing the project, contribution made by the promoters, projected
funds flow statement, compliance with various statutory requirements, and fulfillment of the pre-disbursement
conditions. Based on the information provided by the borrower, the financial institution will determine the
amount of the term loan to be disbursed from time to time. Before the entire term loan is disbursed, the borrower
must fully comply with all the terms and conditions of the loan agreement.
Page 85
STEP-8 CREATION OF SECURITY:
The term loans and the deferred payment guarantee assistance provided by the financial institutions are secured
through the first mortgage, by way of deposit of title deeds, of immovable properties and hypothecation of
movable properties. As the creation of mortgage, particularly in the case of land, tends to be a time consuming
process, the institutions permit interim disbursements against alternate security. The mortgage, however, has to be
created within a year from the date of the first disbursement. Otherwise, the borrower has to pay an additional
charge of 1 per interest.
STEP-9 MONITORING:
Monitoring of the project is done at the implementation stage and operational stage.
During the implementation stage project is mentioned through:
1) Periodic site visits
2) Progress reports submitted by the nominee directors
3) Audited accounts of the company
During the operational stage, the project is monitored with the help of:
1) Quarterly progress report on the project
2) Site inspection
3) Report of nominee directors
5.5.2.4 LOAN RECOVERY PROCESS:

For small business, cashflow is very important. So its important to stay on top of chasing outstanding payments
from customers. Debt recovery process:
1) Friendly reminder
2) Overdue reminder
3) Final notice
4) Direct contact
5) Formal letter of demand
Page 86
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D.

NAVNIRMAN INSTITUTE OF MANAGEMENT

1.1 OVERVIEW OF JEWELLERY INDUSTRY

1.1.1: EVOLUTION OF JWELLERY INDUSTRY IN INDIA

1.1.2: INTRODUCTION TO INDIAN JEWELLERY INDUSTRY

Silver & Gold jewellery

Gold & Diamond jewellery

Fashionable & Innovative design

NAVNIRMAN INSTITUTE OF MANAGEMENT

1.2.3: Colored Gemstones

NAVNIRMAN INSTITUTE OF MANAGEMENT

1.3.1: MILESTONE OF D. KHUSHALBHAI JEWELLERS

NAVNIRMAN INSTITUTE OF MANAGEMENT

1950 in Junagadh and 1995 in surat

Viren Chokshi & Deepak Chokshi

Jewellery maker & seller

Give public satisfactory jewellery

NAVNIRMAN INSTITUTE OF MANAGEMENT

HEAD OF HUMAN RESOURCE DEPARTMENT : Bhadrish Gandhi

MARKETING DEPARTMENT : Deepak k. Chokshi

FINANCE DEPARTMENT : Viren k. Chokshi

PRODUCTION DEPARTMENT : Deepak Chokshi and Viren Chokshi

1.4: OVERVIEW OF COMPETITORS

Tribhuvandas jewelers (tbz)

NAVNIRMAN INSTITUTE OF MANAGEMENT

NAVNIRMAN INSTITUTE OF MANAGEMENT

NAVNIRMAN INSTITUTE OF MANAGEMENT

2.1 INTRODUCTION OF MARKETIN DEPARTMENT:

2.1.1: MEANING OF MARKETING AND SALES

2.1.1.3: MARKETING ACCORDING TO FIRM

[B] DETAILED ORGANISATION STRUCTURE OF MARKETING DEPARTMENT

2.2: STRUCTURE OF MARKETING DEPARTMENT

2.2.1: MARKET RESEARCH

2.2.2: BUSINESS OPPORTUNITIES

NAVNIRMAN INSTITUTE OF MANAGEMENT

2.2.4: MANAGING PERSONNEL

2.2.5: ADVERTISING AND PROMOTION

2.5 PRODUCT MIX

NAVNIRMAN INSTITUTE OF MANAGEMENT

NAVNIRMAN INSTITUTE OF MANAGEMENT

2.5: PACKAGING AND LABELLING

It provides protection to the jewellery against dust and moisture.

To serve as a promotional tool at the point of purchase.

NAVNIRMAN INSTITUTE OF MANAGEMENT

2.5.2.1: A complete label gives following information:

Address of the producer

Gross and net quantity of the product

Ingredients in the product

Metal use in the jewellery to make it hard

To communicate the brand name of the product.

To give detail about the ingredients of the product.

2.6 PRODUCT LIFE CYCLE AND MARKETING STRATEGIES USED FOR

NAVNIRMAN INSTITUTE OF MANAGEMENT

2.6.1.1: CHARACTERISTICS OF THE INTRODUCTION STAGE ARE:

High costs due to initial marketing, advertising, distribution and so on.

Sales volumes are low, increasing slowly.

There may be little to no competition.

Demand must be created through promotion and awareness campaigns.

Customers must be prompted to try the product.

2.6.1.2: MARKETING STRATEGIES

We use either a penetration strategy or a skimming strategy.

High price and higher level of promotional expenditures.

High price and low promotional expenditure budget.