Advertising Strategy of Small Scale Industrial Sector in Virudhunagar District

Abstract:
The small-scale industry sector occupies a position of prominence in the Indian economy, contributing to more than 40% of the industrial production. There are nearly 13 million small-scale units in the country and a large number of such units exist as clusters, many of which are in urban and semiurban areas. There are nearly 400 small scale industry clusters in India. The small scale industry sector thus assumes an important role in the economy, as it is the backbone of the Indian manufacturing sector. Advertising is probably the most important expenditure for any business. Without it, target market may never know about the company and products. The product or service goes unnoticed and unpurchased. So advertisement for the small-scale businesses has its challenges which must be overcome their business to succeed. A sales promotion strategy is an activity that is designed to help boost the sales of a product or service. predicting The primary objective of a sales and modifying target customers promotion is to improve a companys sales by purchasing behavior and patterns. Sales promotion is very important as it not only helps to boost sales but it also helps a business to draw new customers while at the same time retaining older ones. There are a variety of sales promotional strategies that a business can use to increase their sales. The present study focuses on advertising strategies to be followed by small scale industrial sector in Virudhunagar district.

Introduction:
The small scale industry (SSI) today has registered an immense growth in the country. Small scale industries are the industries which are run with the help of hired labour and which also use some simple machine and power. The investment scale in this industry varies from 5 lakhs to 1 crore for the fixed assets, irrespective of the workers engaged. Small scale industries may sound small but actually play a very important part in the overall growth of an economy. Small scale industries can be characterized by the unique feature of labor intensiveness. The total number of people employed in this industry has been calculated to be near about one crore and ninety lakhs in India. The importance of this industry increases manifold due to the immense employment generating potential. The countries which are characterized by number of

acute unemployment problem especially

put

effectiveness of advertisement strategy adopted by the SSI units.

emphasis on the model of small scale industries. It has been observed that India along with the countries in the Indian continent have gone long strides in this field. Small scale industries enjoy a lot of help and encouragement from the government through protecting these industries from the direct competition of the large scale ones, provision of subsidies in the form of capital, lenient tax structure for this industry and many more. The authors made an attempt to analyze the advertisement strategy of the small scale industries in Virudhunagar district.

Objectives of the Study

The following are the objectives of the study. 1. To examine the kind of advertisement strategy adopted by the SSI units in Virudhunager district. 2. To ascertain the factors influencing the adoption of advertisement strategy of the SSI units. 3. To offer suggestions on the basis of the findings of the study.

Hypothesis of the Study

The following hypotheses were framed for the purpose of analysis of the present study. HO1-There is no significant difference between sources of finance of fixed capital and reasons for not advertising their product. HO2-There is no significant difference between sources of finance of fixed capital and reasons for not advertising their product.

Review of literature:
Varinder Kumar in his study entitled as Marketing practices in small scale industries A study of Engineering Industry of Punjab, has studied the importance of product, pricing, promotion, & distribution aspects of marketing. He found out the small scale industries faced difficulty in performing their marketing functions even with the government assistance.

Research design:
The research design is descriptive design of the conclusive one.

Statement of the problem:

Due to manufacturers international follow competition, various advertisement

Collection of data:
The study mainly depended on primary data. The primary data were collected by using well Secondary data structured interview schedule. websites.

strategies to market their product. The SSI units do not conduct survey to find the efficiency of the advertisement strategy they follow. They do not have the facilities and resources to find out the effectiveness of the advertisement methods. The present study is undertaken to find out the

were collected from standard books, journal and

Sampling Technique:
Convenience sampling method has been used to select the required samples of 100 small scale industrial units in Virudhunagar district

buildings have been the primary criteria to differentiate the small scale industries from the large and medium scale industries. An industrial unit can be categorized as a small scale unit if it fulfils the capital investment limit fixed by the government of India for the small-scale sector. Table 1 provides the data regarding the number of total investment of SSI study units investment wise. TABLE 1 INVESTMENT WISE INVESTMENT (RS. IN LAKHS) Less than 5 5-10 11-20 21-40 41-80 81-160 Total Source: Primary Data It is clear that a sizeable number of the SSI units 32% have total investment of less than Rs. 5 lakhs and only 3% of them are having the investment of Rs.81 Rs.160 lakhs. FREQUENCY 32 27 22 9 7 3 100 % TO TOTAL 32 27 22 9 7 3 100

Framework of Analysis
One-way ANOVA and percentage analysis were used to analyze the data.

Limitations of the study:

The study pertains toVirudhunagar district only. The results may not be applicable to other regions.

Results and discussion:

The results obtained by the present authors from the analysis of survey data are presented in the following passages.

1. Profile of SSI units:

As per the latest definition which is effective since December 21, 1999 for any industrial unit to be regarded as small scale industrial unit, the following condition is to be satisfied. Investment in fixed assets like plant and equipment either held on ownership, or on lease or on hire purchase should not be more than Rs.10 million. The other details of sample SSI units are shown below

2. Investment
The definition for small scale industrial undertakings has changed over time. Initially, they were classified into 2 categories those using power with less than 50 employees and those not using power with the employee strength being more than 50 but less than 100. However, the capital resources invested on plant & machinery,

3. Form of organization
A business owned by one person, who is entitled to all of its profits & responsible for all of its debts, is considered a sole proprietorship. A business owned by two or more people, who agree to share its profits, is considered a partnership. Private limited companies are small to medium

sized businesses that are often run by a family or small group of owners. Ownership pattern of SSI units is presented in Table 2. TABLE 2 FORM OF ORGANIZATION Source: Primary data FORM OF ORGANIZATION FREQ UENC Y Sole proprietorship/family business 47 Partnership Private limited company Total 22 31 100 % TO TOTA L 47 22 31 100

Source: Primary data CATEGORY OF INDUSTRY Food products Textiles Wood, paper and leather Rubber products Chemical products Non-metal mineral products Engineering products

FREQUE NCY 29 15 21 10 8 8 9

% TO TOTAL 29 15 21 10 8 8 9

Total 100 100 It is evident that out of 100 respondents, sizeable number of them (29%) belongs to the category of food industry, and only 8% of them belong to the category of chemical and non-metal mineral products industry.

From the above table, it is understood that, out of 100 respondents, a maximum number of them start their enterprise (47%) as a proprietorship business, and only 22% of them start their enterprise as a partnership firm.

5. Location of the Enterprise

A product consists of a bundle of utilities involving various product features and accompanying services. These utilities are

4. Category of Industry
The SSI unit need not be manufacturing same type of product. Each enterprise is involved in producing different types of product. sample enterprises. Table 3

created by a set of tangible, physical and chemical attributes assembled in an easily identifiable form is a plant located in a particular place. Table 4 shows the location of the sample enterprises.

shows the particulars of the industrial category of

TABLE 3 CATEGORY OF INDUSTRY LOCATION

TABLE 4 LOCATION FREQUE

% TO

Town Sub urban Rural Industrial estate Backward area

NCY 25 20 26 11 18

TOTAL 25 20 26 11 18 100

It is clear from the above table that a majority of the 61% of respondents have local markets, and only 1% have market at national level.

7. Advertising activity of SSI units

As mentioned by Brassington and Pettitt (1997, p. 604), advertising is one of promotional tools and there are three more which are sales promotion, personal selling and public relation. Moreover, Morgan and Pritchard (2000, p. 11) indicated that there are other promotion activities such as pointof-purchase displays, direct marketing, product packaging, sponsorship and sales management. Table 6 shows the advertising activities of sample SSI units. the

Total 100 Source: Primary data

It is clear that 26% of the enterprises have been located in the towns, and only 1% of them have their enterprise in industrial estate area.

6. Market Spread
Table 5 shows the details regarding the market spread of the respondents. TABLE 5 Market Spread MARKET SPREAD Local Regional State wide National Total FREQUE NCY 61 26 12 1 100 % TOTAL 61 26 12 1 100 TO

Advertising
Advertisement helps to increase the production and distribution. It spreads information speedily about new products. An advertising medium is any publication, poster, sign, radio, TV or any other various forms of advertisement service designated to convey the message which the advertiser expects to reach his buying public, with the ultimate aim of inducing them to purchase his goods or services. The survey brings to light how many of the SSI units advertised their products. TABLE 6 WHETHER ADVERTISED OR NOT RESPONSE FREQUEN CY 31 69 100 % TO TOTAL 31 69 100

Source: Primary

Advertised Not advertised Total

Source: Primary data

often It is clear that a majority of SSI units (69%) do not sometimes Rarely resort to advertising as their sales promotional Very Rarely strategy. Total Source: Primary data

2 9 6 9 32

6.25 28.12 18.75 28.12 100

From the above analysis it is understood while

Reasons for Not Advertising

Further probe into the matter reveals the respondents citation of reasons for not advertising their products. Table 7 shows the reasons for not undertaking advertisement by the sample SSI units. TABLE 7 REASONS FOR NOT ADVERTISING REASON FOR NOT FREQUEN % TO ADVERTISING CY TOTAL High cost 48 69 Delayed impact on sales 2 2.9 Limited market area 18 26 Competition from large 1 1.4 firms Total Source: Primary data It is of clear manifestation that 69% of them do not advertise due to high cost and 1.4% do not advertise their product due to competition from large firms. 69 100

28% of the respondents advertise their products sometime and very rarely and 6.25% often advertise their products.

Media of advertising:
During the survey an attempt was made to find out the media of advertisement of the respondents for their enterprise. Table 9 bears an evidence of this fact.

Table 9 Media of advertising

MEDIA ADVERTISING Newspaper Technical Press Poster Sites Display Cards Magazines Commercial TV Cinema theatres Total Source: Primary data OF FREQUE NCY 1 4 8 13 2 3 1 32 % TO

TOTAL 3.2 12.5 25 40.7 6.3 9.4 3.2

Frequency of advertising
TABLE - 8 FREQUENCY OF ADVERTISING FREQUENT ADVERTISING All the time OF FREQUE NCY 6 % TO TOTAL 18.75

It is evident from the above table that a maximum number of the units representing 40.7% advertised their products through display cards, and 3.2%

advertised their products through newspaper and cinema theatres.

s f i e d 1 0 1 0 9 1 0 1 3 1 2

Satisfaction Level with Advertising

5

2 6 6 5 4

9 5

TABLE 10 Respondents Satisfaction Level with Advertising

Factor Highly Satisfied S a t i Improvement in company image Improvement in product image Neither satisfied nor Dissatisfied dissatisfied in product awareness Increase

13 8 9 6 9

4 3 3 3

Source: Primary data

From the above analysis it is clear that, 13 respondents are highly satisfied with reaching more people, 13 respondents are satisfied with improvement in product image, 6 respondents are normal about increase in sales and

Analysis
deviation
1.65 .635 .000 .000 .820

Reasons for Mean Standard not advertising

High cost Delayed impact 3.00 on sales Limited market 3.00 area Competition by 3.00 large firms

of

Reasons for Mean Standard not advertising

High cost 1.58 .710 .000 669 Delayed impact 4.00 on sales Limited market 2.72 area Competition by 3.00

deviation

Variance
ANOVA test was used to find out the significant difference between sources of finance of fixed capital and the reasons for not advertising their products. Ho - Null hypothesis. There is no significant difference between sources of finance of fixed

large firms improvement in company image, 9 respondents are dissatisfied with cost effectiveness, and 6 respondents are highly dissatisfied with cost effectiveness of the advertisement.

capital and reasons for not advertising their product. H1 - Alternative hypothesis. There is significant difference between source of finance of fixed capital and reasons for not advertising their product.

The following suggestions are offered for evolving a suitable advertising strategy of the SSI units that would enhance the competitiveness of the units. 1. The joint advertising with government will reduce the cost burden of the small scale industry significantly. 2. Creating awareness about advertisement activities will enhance the small scale industry to face competition effectively. 3. The SSI units have to innovate new advertisement strategy to increase the usage of their products which will benefit both the users and service providers.

F value 18.471 and P value is .000. As the P value is less than .01 the null hypothesis is rejected and alternative hypothesis has been accepted. Hence there is a significant difference between source of finance of fixed capital and reasons for not advertising the products. Ho- Null hypothesis. There is no significant difference between sources of finance about working capital and reasons for not advertising their product. H1: Alternative hypothesis. There is significant difference between sources of finance of working capital and reasons for not advertising their product. F value 30.582 and P value is .000. As the P value is less than .01 the null hypothesis is rejected and alternative hypothesis has been accepted. So, there is significant difference between sources of finance of working capital and reasons for not advertising their product.

Conclusion
The SSI sector has been recognized as engine of growth all over the world. In India too, the SSI plays a pivotal role in the overall industrial economy of the country. In recent years, the SSI sector has consistently registered higher growth rate compared to the overall industrial sector. With its agility and dynamism, the sector has shown admirable innovativeness and adaptability to survive the recent economic downturn and recession. As per 4th Census of SSI sector, this sector employs an estimated 59.7 million persons spread over 26.1 million enterprises. It is estimated that in terms of value, SSI sector accounts for about 45% of the manufacturing output and around 40% of the total export of the country. Concentration on suitable advertisement strategy would enhance their competitiveness and

Suggestions

make them to move towards the economic growth of the country. A final problem facing small-scale units marketing efforts is the cost of advertising. Running a full-page Sunday newspaper ad or Super Bowl TV commercial is no financial hardship for certain large businesses. However, such costs are obviously prohibitive for small-scale businesses. Thus, many SSI units will circumvent this dilemma through forming co-ops to split advertising costs or using local advertising and word-of-mouth.

References:
1. Annual Reports, Ministry of Small Scale industries, Government of India. 2. WWW.Scribd.com 3. WWW.sbi.co.in