STRATEGIC MANAGEMENT Reviving Khadi in India: Khadi Loses its Sheen Khadi, which symbolized self reliance and

emancipation during the freedom struggle in India2 has lost its sheen over the years. And there are several reasons for the same. Post 1947, India opted for state led large scale industrialization. With many Indian industrialists setting up huge textile mills, the mass production of fine cloth led to the availability of cloth at lower prices. People began to buy machine made textiles and thus Khadi began losing out to the mill fabric. In January 1953, the All India Khadi and Village Industries Board was set up to provide employment to thousands of spinners all over India. In 1957, the Khadi and Village Industries Commission (KVIC) was established to take over the work of the board. KVIC was formed as a nodal agency to promote Khadi all over India through its exclusive outlets known as Khadi Bhandars. The Government of India (GoI) has ever since continued its support to Khadi. However, there were a few problems. According to designers, the production of Khadi was inconsistent and the cloth was prone to shrinkage and fabric stretch. Besides, fabric colours in khadi were also limited. Red tapism and bureaucracy prevalent in the Indian system, further hampered the growth of the Khadi sector. Inspite of having a wide distribution network, there were problems, especially middleman. Corruption was rampant. There were many bogus Khadi units operating in the country, which made it extremely difficult to claim rebates from the Government of India (GoI). KVIC received huge financial assistance from the GoI in the form of subsidies and rebates. In May 2000, the Ministry of Small Scale Industries, announced a special package of Rs.12.16 billion to the industry. In order to face the challenges of globalization and strengthen its position in the market, KVIC launched two separate brands, Sarvodaya and Khadi in August 2001.

1. If you are appointed as a president of KVIC what steps you will take to promote Khadi in India? Answer: Khadi, is a special type of hand woven cloth in India. The raw material may be cotton, silk, or wool. The spinning of khadi was Mahatma Gandhi's main means of providing self employment to the rural population of India. The freedom struggle revolved around the use of Khadi fabrics and the dumping of foreign made clothes. Thus, for India Khadi symbolised the political ideas and independence and it has lost its shine over the years. The Indian industrialists set up huge textile mills which produced fine cloth at cheap rates, thus people began to buy machine made clothes. To promote the use of Khadi the Khadi and Village Industries Commission (KVIC) was set up. As a president of KVIC I will plan out the following steps to promote Khadi in India: 1) Promoting Khadi It is important to establish identity of khadi through a khadi mark. It is important to create a niche as a handspun and hand woven fabric produced through fair trade practices is the most likely way for khadi to become commercially viable in a highly competitive textiles market. I will ensure that KVIC will undertake steps to develop a khadi mark and link the artisan's base earnings to the use of the khadi mark in the khadi reform package. The khadi mark will ensure that legal protection and regulations for granting the use of the khadi mark will be developed. All khadi institutions affiliated with KVIC and the KVI board will adopt the khadi mark. In addition to khadi institutions, institutions external to the KVIC khadi program will also be allowed to use the khadi mark. Further, basic testing infrastructure for the khadi mark will be created and KVIC will conduct random spot audits on the adherence to licensing requirements for the khadi mark. To promote Khadi Advertising through various means using Brochures, booklets, Billboards, Internet advertising and Mobile advertising will be used for Khadi products. For Sales Promotion various Trade Promotion schemes, Premiums and Gifts and Tie-Ins scheme would be introduced. Another way to promote Khadi would be through Personal selling in the form Fairs and Trade shows and through various incentive programs. For Direct Marketing use of Internet and Tele Marketing will be used.

2) Participation in exhibitions I would ensure that KVIC participates in domestic exhibitions to introduce the exclusive KVI items in domestic markets. When there are certain events like the recently held Common Wealth Games in India KVIC will participate in such events. 3) Product Diversification The Khadi clothes are generally inconsistent and the cloth is prone to shrinkage and fabric stretch. The availability of fabric colours is limited too. In the era of globalization, the watchword for any industry to survive is to diversify. Khadi was earlier sold only in the fabric form. As the president of KVIC, I would take steps to design and develop Khadi clothes as per consumer demand. Designing can be done by students from various institutions, professional designers. This is intended to diversify the product line with the objective of increasing marketability, conversion of existing stock to make suitable products acceptable to the market and also improving the marketability of the product by better tailoring, packaging, design input etc. The sales volume and value have to be increased to ready to use khadi products. In the changing market scenario there is a need to update and innovate existing technology. With this aim I would implement various R&D programmes through national level institutes like IIT, NIFT etc. I would try to introduce new brands for KVI products and Export these products. This along with Khadi clothes will include Herbal products, Natural food ranges. 4) Khadi and Charkha Khadi and charkha are inseparable. The spinning of the thread on charkha precedes the weaving of khadi. The charkha became a weapon towards achieving Independence during Non-cooperation Movement. KVIC has been working relentlessly to promote khadi and charkha since its inception. I will introduce a number of steps to modernize charkha and other implements. I will introduce Charkha which works on electricity/ battery. 5) New Schemes Apart from the transformation of charkha to e-charkha, a number of other schemes to enhance Productivity and Competitiveness of Khadi will be introduced by me. I would make monetary arrangements to provide assistance to institutions for replacement of charkhas and looms, conversion of fabric to readymade garment and for making the khadi industry more competitive and profitable. Also, I will make arrangements to provide assistance towards renovation, computerization, marketing infrastructure, quality improvement of products, better packaging, and better promotion of khadi products.

6) Remove Corruption I will make sure that in the wide distribution network, there would be no scope for corruption. All the bogus Khadi units operating in the country that make it extremely difficult to claim rebates from the Government will be shut down. This will help in promoting the genuine Khadi units in India.

7) The Cluster Approach in Khadi A cluster is primarily an agglomeration of enterprises producing same/similar products/services or engaged in the same line of manufacturing activities or services, located within an identifiable and, as far as practicable, contiguous area. I will lay special emphasis on development of cluster for Khadi workers and launch a scheme for Technology Upgradation and Management Programme. This will be based by adopting holistic pattern of development of the cluster encompassing marketing, exports, skill development, setting up of common facility centres, including technology upgradation of the enterprises, etc. 8) Workshed Scheme I would make arrangements for the Government to approve schemes for Khadi Artisans through KVIC in an attempt to facilitate the development of khadi spinners and weavers essentially belonging to BPL category by providing them financial assistance for construction of worksheds. The additional requirements of funds over and above the financial assistance provided by the Government of India, to meet the cost of Workshed could be contributed by Khadi Institutions without insisting on any contribution from the beneficiaries. In case of individual Worksheds, the khadi institutions can also release the additional funds assessed for construction of workshed out of the accumulations in Artisans Welfare Fund lying to the credit of the beneficiary with State Level Artisan Welfare Fund Trust. The financial assistance to be provided by the Government will go to the institutions which will be responsible for the construction of worksheds (either directly or under their supervision) and KVIC will supervise the activities.

2. Being a private player launch a brand in Khadi with proper explanation of 4 Ps and Target Market, Segmentation and positioning? Answer:- The 4 Ps is the combination of the elements of marketing and what roles each element plays in promoting the product and delivering the product to your customer. Following are the 4 Ps :1) Product- The product or the service that is offered to the customer. Here it is Khadi. My firm would have a variety of products for Khadi which would cater to needs of kids, youth, men, women. The variety would include innovative designs, features for Khadi products. To make the brand more appealing Packaging designed will be such that it suits the product being sold. My firm would ensure that the retail outlets will always be stocked with the all sizes of the Khadi product in store for sale. Depending on the product, after sales services, warranties and returns will be offered to the customer. There are various features that make Khadi unique like it is an eco-fabric and thus we can help save the environment by purchasing Khadi. Khadi is harmless to ones skin. It ties the whole nation with one thread. Khadi became a means to unite people of different religions and class. There is 0% harm to eco-system by the production of Khadi. 70 % of the artisans involved in the process of Khadi production are women. Khadi production is a labour-intensive industry, with a scope of providing more employment with an investment of a very little capital especially in the rural areas. All these above factors will help the firm create a brand name for itself. 2) Price- The product will be priced reasonably and the price will be same across all the outlets selling my firms Khadi products. The firm sales team will decide on the Discounts during various festive seasons like Gandhi Jayanti, Diwali, Id, Christmas, New Year. The firms Purchase department will decide on the Allowances, Payment Terms, and Credit terms for the suppliers. The price negotiations will be such that the maximum benefits are passed on to the artisans involved in the creation of Khadi products. Prices will have to be based such that it provides maximization of profits for the entire product line. At the same time Prices are also important from the consumer point of view. Thus the price of the product is a major determinant. The firm will decide the prices by analysing the firms costs through different pricing methods like full-cost, target-return and marginal cost.

3) Promotional Strategy - We would market Khadi by participating in trade exhibitions, International Trade promotion Offers. We would market Khadi by giving sales and export incentives.

Advertising would be done through mass media. Internet and Mobile advertising would be another way to promote the firms Khadis product. Other ways of advertising would be through Print and Broadcast, Motion and in-film advertising, Brochures and booklets, Posters and Leaflets, Billboards, and Display-signs. For the promotion of Khadi various Fashion shows, trade shows, ad campaigns and so on for sustaining the identity for the Khadi brand will be held. Sales promotion will involve various Trade Promotion schemes, Contests, Games, Coupons, Premiums and Gifts, Low Interest financing, Trade in allowances, Continuity and Loyalty Programs, Tie-ins. Another way to promote Khadi Personal selling through Samples, Sales meeting, Fairs and Trade shows and Sales presentations will be conducted. Direct Marketing through Mailers, Catalogs, Tele Marketing, Internet Marketing, E-mail and Voice-calls will also be conducted in the long run.

4) Place- The process of distribution is called Place in marketing. This involves processes to place the finished goods from a manufacturer to a customer for final consumption and usage. The firm would make sure that the Khadi products are available at customer points not only in good numbers but also at the right time. I would also try to implement the direct marketing model wherein the intermediaries will be removed completely and recruit my own sales force for serving customers as this will allow the firm to have a greater control over the network. The distribution channel would be designed in such a way that it starts with understanding the customers service expectations. The channel would be managed by evaluating product, market and producer related factors. All the three channel participants- the firm, wholesaler and retailer need to address their conflicts in an amicable manner.

Selection of Target Markets The target market would target the set of buyers sharing common needs. To identify the target market the segment size and worthiness, segment measurability, segment attractiveness, and accessibility of the segment will be considered. The firm would collect and analyse data on the size of the current segment, growth rates in the past and will estimate the likely rate of growth by analysing various market indicators for short and long term. My firm would identify the target market in such a way that it would be accessible to the marketer so that the distribution network can be developed and will use available media to reach potential customers. For large-scale exports, suitable foreign markets must be discovered and selected. Foreign markets are many but not all are suitable or equally promising for exporting. It is also not possible to export goods to many foreign markets at one time. Naturally, detailed study of potential foreign markets is necessary for the selection of most promising and profitable foreign

markets. The foreign market selected will be treated as target market for initial entry which prepares a base for large-scale exports over a long period.

Market Segmentation Market segmentation is the process of dividing the market into distinct homogeneous subgroups of consumers with similar needs that will lead them to respond in similar ways to particular marketing programmes. This is needed for Khadi products in order to create a differentiation among the customers of Khadi so that the firm can understand the homogeneous customer needs and their evolution better. This will help in increasing and regulating the companys performance in each of the segments. In Demographic segmentation the product Khadi is segmented into various products, classes, according to age gender and income. It caters to all the age groups and there are cheaper as well as costlier products targeting various income groups. Other demographic variables that can also be included are factors gender, family size, family life cycle, income, occupation, education, martial status, religion, race, generation, nationality, language and social class. In Geographical segmentation the segmentation of the Khadi as a product is according to the specifications of the particular state, nation and regions and to cater their demands. Another method of market segmentation is based on psychography. Psychographic segmentation is on the basis of lifestyle of individuals. Depending on the customers actions, interests and opinions the Khadi products would be designed. Positioning The firm will have to occupy a distinct place in the minds of the customers- Positioning is a consumer driven strategy in which the objective is to occupy a unique place in the customers mind and maximize its potential benefit for the firm. The Khadi products made by the firm can be REPOSITIONED and introduced in the market as a new fashion trend. Also, the firm will target the unoccupied market. International Target markets the USA, European countries like London and Italy can also be targeted for sale of Khadi products. The Positioning strategy would be a distinct value proposition, a reason for which the customer would buy the product.