MARKETING PLAN: HAND-WOVEN DHOTI

By, (Group V1) Ashwini J Rao-11512 M. Krishna Kranth-11531 Pranaynehru T-11545 Romit Jain-11548 Vijay Kumar Pandey-11557

Executive Summary
The goal of our plan is to market the handloom dhoti product, which is at decaying stage. Dhoti is a traditional Indian dressing worn by men. Our plan is for Udupi Cooperative Society for Handloom Weavers. The cooperative society hires weavers on the basis of requirements, supplies them with the raw materials and then markets and sells the product. Weavers make Dhotis from raw material and get paid for each dhoti they make. Our plan is to first understand the various reasons as to why the product is facing a decline in the demand. We then try to curb the defects present in now, and try to improve the situation. Our plan is based on following objectives 1. To stabilize the supply. 2. To ensure sustainability of demand and means for increasing it There are a few opportunities which provide us with a window for growth. We intend to make use of the opportunities for immediate short term recovery of the market and we propose a few alternatives that can be implemented to improve the present situation. However, we should also wary that handloom dhoti demand cant be increased beyond a limit, as there is very less unique features that differentiates the product from the immediate competitors. Hence we will keep our focus to reach a existing demand for Handloom Dhotis and try to pull the customers of our direct competitors (power loom).
Hence our plan as mentioned earlier focuses primarily to provide a strong foundation for growth and we expect to earn profits only after the marketing strategies shoe effect which takes some time and cannot be realized immediately.

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Table of Contents
About the Product .....3 Situational Analysis ..3 a. Present Scenario of Udupi Cooperative Society for Handloom Weavers............3 Situational Analysis of Dhoti Market in Udupi..3 a. b. c. d. Customers ..4 Competitor Analysis......4 Company .4 Context .5

Issues causing the decline of Handloom Dhoti Market ..5 a. b. c. d. e. f. Increasing Influence of Western Dressing ...,.5 Declining number of Weavers ...5 Cost of Production of handloom Dhotis ......6 Setup time required is much more for handloom products ...6 Poor Marketing Of the Products ...7 Long Lasting nature of Hand loom dhotis ..7

Opportunities for the Cooperative Society ....7 a. Existing Demand for the product ....7 b. Good Support from the Government & no other competition in this segment....8 c. High Income of the People of Udupi District ....8 Steps to be taken to improve the Situation ....8 a. Stabilizing the supply of units ....8 b. Maintaining a Steady Number of Weavers .....9 Targeting and Positioning .............................................................................................................................9 Marketing Mix (suggested improvisations to present mix) ....9 a. b. c. d. Product ....9 Price.10 Place11 Promotion11

Financial and Marketing Goals.12 Financial Estimations.13 Evaluation of Plan14

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About the Product:

Dhotis are traditional Indian cloths which are used by men to cover the lower half of the body by tying it around their waist. It is made by different types of fabric. All the dhotis consist of Warpes and Wefts which are the vertical and horizontal threading. They also consist of a colour border called Jhari.

Situational Analysis:
Dhotis which have been the prime clothing for most of the generations have seen a steady and fast decline in demand. This is attributed to the changing trends of fashion which influence people towards the western style. The impact is directly felt by the handloom industry and the weavers whose important means of income is through weaving of traditional Indian clothes. With the mechanization of the weaving process, the cost of producing dhotis has been drastically reduced. As a result of which, a high percentage of target customers are inclined to purchase the power loom dhotis. There are many other reasons for the rapid decline of dhoti market. We analyze each of these factors and their impacts considering the information gathered from the various sources in Udupi district and propose a plan to revive the market for the handloom dhotis. The plan of action is based for the Udupi Cooperative Society for Handloom Weavers. Present Scenario of Udupi Cooperative Society for Handloom Weavers: The society presently is the primary supplier of Handloom dhotis and other clothes in the Udupi markets. The society comprises of 12 weavers who weave various kinds of handloom clothes. The raw material for the weavers is provided by the society and the weavers are paid a wage rate of Rs 32/meter of the cloth weaved. The marketing and selling of the products as well as securing supplies are handled by the Co-operative Society.

Situational Analysis of Dhoti Market in Udupi:

As mentioned this society consists of 12 weavers. The district of Udupi is fairly traditional in its dressing especially in saris and other clothes. Thus the weavers seem to have a steady demand if one observes on the surface. But, when one does a deeper analysis of the market, we observe that the demand is only there for certain products like medium to high cost saris only. The demand for products like dhoti has become almost negligible when compared to the same situation 5 years ago. Added to the fact is that most of the weavers are of the age of above 60 and none of their children are ready to enter this field. As a result the number of weavers is reduced to 12 from 60 in a span of ten years. Another disturbing
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fact is that none of the weavers are ready to weave dhoti due to their low commercial value and instead are concentrating on producing saris which give a comparatively higher return. Analyzing the situation of the market using 4C approach: Customers: The customers for dhotis used to range from all age groups in the past. But recent developments have narrowed down the customers to the age group of 30 and above. Even among that age group, the percentage of sales is higher among the customers aging 50 years and above. The customer base for handloom dhotis is predominantly in the rural market and in the higher earning class of the urban markets. For the cooperative society, the customers are the cloth stores which store the stock and sell it to customers.

Competitor Analysis: The major threat to dhotis is from the changing culture and trend. Younger generation is now moving towards western culture dress, and thus the popularity of dhoti is decreasing day by day. Trousers, jeans, Boxers and pajamas are more popular and have eaten away the market of dhotis. Thus the major threat lies from the changing culture and trend. The present situation can be described as Presently, Trousers and Pants are not substitute for dhoti; dhoti has to become a substitute of them. This competition restricts us to a particular target segment and doesnt allow us to expand in other market segment. Thus, in starting our focus will be on a particular segment. Even though the target segment is very small, we face stiff competion in the products. Lungi and power loom dhotis are the biggest hurdle in our path. The quality of dhoti is superior, but power loom dhotis are cheap and are in trend. A power loom dhoti costs Rs 120 and 25 pieces can be made during an hour, as compared to handloom one which costs nearly Rs 320 and only 7-8 pieces can be made during a week.

Company: Presently all the weavers in Udupi district are part of Udupi Cooperative Society for Handloom Weavers. The cooperative society gets the orders from different parties and in some cases gets the raw material also from the customer itself. The cooperative society passes on this raw material to the weavers and asks them to weave according to customer requirement. When we spoke with the manager of the society, he cited an example of customers from Kerela placing an order for 300 dhotis even providing with raw material like weft, warpe, jhari. The made dhotis are sold back to the same customer at preset price of

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Rs.260/- making no profit. As a part of governments initiate to save handloom industry, government pays the society an amount 20% of total sales did by the society.

Context: The present weekly production comes out to be 4 hand loom dhotis (max 7-8). One important point is that dhoti is made along with other handloom product like sarees and lungi. Thus our competition will start from weavers point only. In order to motivate them to manufacture more dhotis as compared to other substitutes, we will offer them more incentives i.e. more income. Presently, weavers are given Rs 125 per dhoti.

Issues Causing the decline of Handloom Dhoti Market:

Increasing Influence of Western Dressing: With the increasing exposure to various dressing styles, people of India, in general, have increasingly preferred the western approach of dressing which includes wearing trousers and shirts instead of traditional kurtas and dhotis. This phenomenon which has been understandably very high in urban areas of the country has slowly penetrated into deeper parts and even places like Udupi which have been traditional and cultural hubs have also started to follow this trend. The youth of the region have formed a perception about dhotis as unattractive and old fashioned. This resulted in a huge fall in the demand for dhotis among the youth. Not only the youth but also the elder generations have started to try out the emerging trends which further dragged the demand down.

Declining number of Weavers: The number of weavers in the co-operative society has been reducing at alarming rate. This trend is due to the low returns for the amount of time they invest on weaving the cloth. As an example consider the Udupi Cooperative Society for weavers which comprised of about 60 weavers 10 years ago, at present there are about 12 weavers all above the age of 60. This fact shows the lack of interest in this field in the younger generations. A weaver questioned by our group regarding the same has opined that he does not wish his son to take up his job and instead wanted him to pursue other fields. As a result of this, whatever little demand is leftover for dhotis is being ignored and the cloth stores and the customers are moving towards

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the powerloom dhotis because of lack of supply. This gives us the picture of a vicious cycle which keeps on degrading the condition.

Cost of Production of handloom Dhotis: Handloom Dhotis are made by hand, without any use of machine. However power loom dhotis are easy to make, as weaving is done automatically. This results into increase in efficiency and reduced cost of production. Quantitatively, only 5-7 handloom dhotis can be made in a week, However twenty five power loom dhotis can be made in an hour. Thus the efficiency of power loom production is much more as compared to handloom dhotis. Also from the cost analysis, average cost of power loom dhotis cost approx. Rs 120, while Handloom dhotis cost nearly Rs 260. Thus both inefficiency and high costs paralyses Handloom dhotis as compared to power loom Dhotis.

Setup time required is much more for handloom products: As sales and demand of Dhotis is not very high, weavers weave dhotis along with other products such as saris, shawls and lungi. However in case of handloom production the time required to change from one product setup to another, is very high (nearly 2hours), as compared to Power loom products as low as thirty minutes.

Costs Incurred per week for power loom Dhotis No of power loom dhotis made 25 No of hours 9 Total power loom dhotis made 1575 Cost per dhotis(INR) 120 Setup Time (2*7) 3.5 No of working Hours (9*7) 63 Costs Incurred (INR) 189000 Costs incurred for time inefficiency (INR) % of cost wasted 10500 5

Costs incurred per week No of handloom dhotis made Cost per dhotis(INR) Setup Time (2*7) No of working Hours (9*7) Costs Incurred(INR) Costs incurred for time inefficiency(INR) % of cost wastage Income per dhoti Total Income per week

7 260 14 63 1820 404 22 125 875

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 Poor Marketing Of the Products:

The district people of Udupi district are relatively traditional in their dressing. Due to lack of motivation and other issues, the marketing of the products has been very poor by the society. The society has been trying to improve this situation but did not result in any significant improvement. As a result of which many private power loom companies have taken the advantage of the demand with constant supply and low prices.

Long Lasting nature of Hand loom dhotis: Handloom dhotis are agreed to be far more superior quality and hence long lasting. But this interestingly backfires for the handloom dhotis. This fact was realized when we interacted with weavers and the cooperative society. The people who wear dhotis for daily use consist of daily workers who wear it during their work. But the heavy stains cause the dhoti to be dirty and added to its long lasting nature makes that it is very difficult of get rid of stains and the cost of it makes it even difficult for buying new ones. Hence they prefer the low cost power loom dhotis which costs about Rs 100 -150. These can be disposed and new ones v=can be bought without huge spending.

Opportunities for the Cooperative Society:

Existing Demand for the product: When we interacted with the various shop owners in Udupi and the surrounding laces, we got the information that there is a steady demand for the handloom dhotis which is about 30-40 per month. During the time of festivals the demand peaks to about 60 per month. But due to the lack of supply they are forced to go for the higher variations of the powerloom dhotis. Thus this provides us an opportunity to tap the demand for our product. Added the fact is that the number of sales in Udupi for power loom dhotis is about 200 permonth throughout the entire district. Out of this there are a sizeable people who opt for higher priced power loom dhotis. These potential customers can be wooed towards handloom dhotis.

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Good Support from the Government and no other competition in this segment: As mentioned earlier, the government of Karnataka incentivizes the handloom industry by paying a commission for every sale of product they make. Hence this can be converted to the advantage as the contribution per sale of dhoti can be improved. Increasing the sales will have a multiplying positive effect on the profits. Also, even though there are other organizations which market the product, they donot have the backing of the weavers and hence the cooperative enjoys a potential monopoly ( if taps the demand).

High Income of the People of Udupi District: An interesting fact is that the per capita income of the people of Udupi district is highest amongst the entire of the state. Plus, the people of Udupi are more traditional than most of the other parts. This presents us with an opportunity as the high cost issue of the product is negated to an extent by this fact.

Steps to be taken to improve the Situation:

We can observe that the product of handloom dhotis is facing a steady and accelerating death. As mentioned earlier, it is not just the declining demand that is causing the problem but also the lack of steady and reliable supply of the products. Hence the first and foremost step to improve the situation is not to lose the existing market.

Stabilizing the supply of units: The supply of the product is very low and unreliable because the production of dhotis is not as profitable as other products are for the weavers. This is because the production of a single unit of dhoti takes one full day for the weaver and also price paid by the society is much higher for sari (which takes comparatively more time, but the net amount earned to time spent is very high for a sari) compared to a dhoti. Hence it is imperative that the weavers are paid higher and incentivized more than that being done right now. At present, the weavers are being paid about Rs. 32/meter woven. It means that a typical dhoti of 4 meters will earn the weaver an amount of Rs 128/- This amount is not enough to make the weaver produce dhotis. Hence we suggest a higher wage rate for the weavers i.e., Rs 50 per meter of dhoti woven. This will attract the weavers to weave dhotis again.

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Maintaining a Steady Number of Weavers: As discussed earlier, another major problem for the handloom dhoti market is the aversion that the younger generation of the families have developed towards weaving. As a result, there is no one to take up the job of the elder weavers and hence due to their age the productivity and creativity decreases. This results in poor quality of products. Hence it is quite essential that this art needs to be taken forward by the younger generation. To make this happen certain amount of investment is needed to first attract young weavers and then to train them. To attract young weavers, the policy followed by various self help groups ( as in textile industry using sewing machines etc.,) must be implemented. Accordingly, a younger generation of weavers must be trained in an institutional manner and be trained to be ready. The setup and the payment will cost around 1 Lakh rupees.

Targeting and Positioning

As mentioned earlier the handloom products are being favoured less and less by the lower income groups. The reasons for this are all mentioned above. We also observed that among the among the high income groups of the society there has been an increasing demand for natural products including in clothing. For such customers the priority is quality and not the price. Hence we need to target such kind of customers. Also the usage of dhotis among urban office going people is almost negligible. Hence we need to concentrate on rural markets at the same time the high income groups. The product of handloom dhotis should be positioned as a high quality, value for money product. This is because the product is relatively costlier than that of its substitutes at the same time of better quality. Hence we should never get into the process of reducing prices for certain amount of time as it would only degrade the situation.

Marketing Mix (suggested improvisations to present mix):

Product: From our information gathered from the Cooperative society, there are only two kinds of dhotis that are being made: one with a golden jhari and the other with jhari of simple colours like green, red. The design for all the types of dhotis is the same. Hence an improvisation of the product is suggested.

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Suggestions: We suggest the introductions of new kinds of products with improvisations to the exsting ones. They are: The regular dhoti which the cooperative makes. They should be produced in numbers of 30-35.This is because there is a constant demand for these dhotis. Apart from the regular dhotis, the cooperative must also produce dhotis according to season varying the jhari design. For example: the design during any or important occasion can make to depict it. The number of such dhotis should be increased during the festival period. Imitating the model followed by Kanchivaram in saris i.e., producing a limited number of dhotis which are of relatively higher quality. This is used to attract the customers who are willing to pay a little more for variation. The last variation should be an ultra-premium kind of dhotis. This can be achieved by increasing the number of weft and warpe rows and columns in the cloth from 90&70 to 120&100 respectively. These should me made not more than one or two. The reason for making such variations is to attract a certain section of the society (ex: politicians).Even though the numbers are small, the serve us as good means of publicity and also as a constant market as the number of repeated buys they make is very high. A combination of these dhotis (ex: Premium + Designer) can also be possible.

Price:

As there are no variations of the product at present, the cooperative incurs a constant cost for raw materials and pays a price of Rs 32/meter of dhoti weaved to the weavers. As a result all of the products are of the similar price with slight variations. The cost price of each dhoti is about Rs 260/- while in the retail market it is sold at a price of Rs 400-500/- which is directly affecting our sales. Suggestions: As we suggest maintaining a portfolio of products, a different price must be quoted for each of the product variations. Also the price of the products that are sold must be reduced to increase the volume of sales. Regular Dhotis : A price range of Rs 320-340 Seasonal Dhotis : A price range of Rs 350-370 Designer Dhotis: A price range of Rs 380-400 Premium Dhotis : A price range of Rs 400-450 A combination of these dhotis(ex: Premium + Designer) can also be possible which costs higher than the rest.

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Place: This initial target will be Udupi market in Karnataka. Our focus will be to target the rich people of Udupi district, and hence increase the market (which is dying) for dhotis. Our target segment is Rich classes or elite classes of Udupi district, who are old traditional. In the present scenario, dhotis are sold only by retail channels in India. Thus, rural people who are interested in buying dhotis have to come all the way to city to buy dhotis. This creates a trouble for them. Also since the retailers enjoy the monopoly, hence most of the sales as well as profit is eaten away, as society is left with no other alternatives Suggestions We will market our product in Udupi district. The distribution channel will consist of retailers and direct selling. Through Retailers, we will target the urban and rich section of society. As our target segment is urban rich society, who will pay any price for handloom dhotis. As already discussed, our target segment will be rich people of Udupi district, hence we will concentrate more on the big retailers (show rooms). However, we will keep an eye on other segments of society by reaching through mid level retailers and small ones. As the labourers wear lungi and power loom dhoti, hence we will try to seek their attention also by stocking and selling through mid level and small level retailers. By direct selling, we will target the rural population of the district. This will help us to concentrate on the other potential sections of the society. Generally Rural segment of society lives in a joint family and also group of workers live together, hence by selling to one person will attract the attention of others and hence influence their buying decision. This will help us to increase our sales.

Promotion: Presently dhotis are being sold through retailers at Rs.350/- and without any incentives. The margin they are getting on power looms when compared to handlooms is high. Also the response from people for power looms is high because of its lower price. Because of these reasons, the shelf space provided for handloom products started to decline.

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Suggestions: Pushing the product through retailers: Dhotis being a low involved and less brand awareness product, its important to adopt push strategy instead of a pull strategy. The strategy is to promote the product aggressively through our channel partners by lowering the selling price to Rs.320/when compared to earlier price of Rs.350/-. It requires a spending of about Rs.50, 000/- per year selecting potential retailers for larger shelf space. Even this is not sustainable strategy for long term, its important to do it initially for penetration of the product into market. Once theres a sustainable market share its important to look forward in changing the strategy so that channels wont have greater bargaining power. Promotion during festive seasons: Udupi being a temple town, theres always a buzz of festivals going in the town. As dhoti is considered to be a traditional dress, theres a great opportunity to promote the handloom dhotis in those season. Setting up stalls outside prominent temples during the festive seasons promotes the product aggressively. This strategy costs us around Rs 5000/- considering the present rates.

Financial and Marketing Goals:

The financial goal of the marketing plan is to invest an amount of Rs 5lakh in multiple phases. This investment is made in order to sustain the supply side of our product and hence to meet the existing demand of the product. However, the break even cannot be achieved in a span of 3 years. This is because the product at present is at dying stage and huge marketing investments are required, which is made in the form of incentives to retail stores and implementation of direct selling strategy. Presently, it is observed that handloom dhotis are available in Udupi and few other Tier-3 cities only. We realised that there is an untapped potential markets existing in other parts of the district. Hence our marketing goal is to make our product reach to each and every market. It is also important that our product quality is rightly portrayed and its value offering is known to people.

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Financial Estimations:
The cycle of financial estimates is three months. We know that there is a festival for every three months, and udupi being a temple town, the demand peaks up during such festivals. Hence we have made our demand estimates based on quarterly basis (1 festival month + 2 normal months). However, the estimates of salary and other fixed costs are based on yearly basis. We estimate that there will be an increase of 5 dhotis each in retail and direct selling owing to our marketing efforts. We predict that the increasing phenomenon is going to continue for about 5 years and then the sales are going to be stagnant. By then we still cant hit the breakeven point. But we estimate that there wont be fixed costs involved. An assumption made is that any change in raw material costs will be absorbed in selling price and hence there will be no change in contribution. We have estimated the selling prices based on the regular dhotis. This is because, the increase in selling price of premium and other variants though yields a higher contribution there is an increase in cost prices of raw materials. This is not accounted in our estimates. Also we have amortized the fuel charges because the direct selling men wouldnt just carry dhotis but also sell other products.

We intend to invest a total of Rs 5 lakh as follows: Rs 1 lakh for buying mopeds for direct selling in the first year Rs 1 lakh for establishing a small training facility in the second year Rs 90,000( 70,000+20,000) for promotional purposes through a span of 3 years After the capital is exhausted we need to change our marketing strategy as we cannot keep incentivizing the retailers. We predict that there will be a sustainable demand by the end of three years and with the money saved we can carry forward our plan minus the incentivizing of retailers for shelf space. Click on below icon for financial estimates for 3 years.

Financial Estimates.xlsx

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Evaluation of Plan:
The main objective of our plan is to make sure that there is a sustainable market for dhoti and that there are enough weavers for the product to live. Hence expecting profit in the first 4-5 years of implementation is too optimistic. Hence we estimate to make losses for the first 5 years of operation. But the amount of losses we make is predicted to be decreasing over the years. We estimate that the push strategy both with the retailers and at the temple will be able to pull the high end customers of power loom dhotis. We estimate that our direct selling will be successful to an extent. But we do not expect to bring in great improvements because a phenomenon observed is that the people in other parts of the district prefer to come and shop in the city even though the product is available in the local markets. Hence we restricted the number of persons selling direct to only two. It is to be understood that the product is at a stage where no matter what we do it is almost impossible to revive the market back to the numbers of high demand period. All our efforts are to hold on to the existing demand and try to pull a part of power looms demand to hand loom.

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