Primax International Journal of

Primax International Journal ofCommerce And Management Research

(PIJCMR)

Primax International Journal of Commerce and Management ResearchNo.25/A, Nagadevanahalli, Boothappa Temple Road, 80 Feet Ring Road, Jnanabharathi Post,

Bangalore -56, Karnataka, India. Ph: 08971725451Email: [email protected], [email protected]

www.primaxijcmr.com

• Research Papers • Articles • Case studies

Online ISSN: 2321-3612Primax International Journal of Commerce and Management Research

Page IISeptember 2016Special Issue

Managing Editor:Prof. T. Rajeswari., M.Sc.,M.A(Eng).,M.B.A.,M.A.(Soc)., (Ph.D)

Co-ordinator:Dr. K. V. RamanathanProfessor of Finance,Padmashree Institute of Management Studies. Bangalore.

Dr. V. Selvaraj,Head & Associate Professor,Nehru Memorial College (Autonomous),Tiruchirappalli.

Dr. M. Muthu GopalakrishnanAssociate Professor,Acharya Bangalore B School, Bangalore.

Publisher:Primax Commerce and Management Research Academy, Bangalore-56(Karnataka Reg.: 48/159/CE/0103/2013)

Issue:Special Issue – September - 2016

COPYRIGHT:1. All rights reserved. And Copyright © 2013, Primax Commerce and Management Research

Academy.2. Reproduction of any part of this Journal in the whole or in part without written permission from the

publisher is prohibited .3. All rights reserved ISSN: 2348-0475

Contact:T. Rajeswari., M.B.A.,M.A(Eng.).,M.Sc.,M.A(Soc).,(Ph.D)

Founder and Managing Editor,No.25/A, Nagadevanahalli, Boothappa Temple Road80 Feet Ring Road, Jnanabharathi Post,Bangalore -56, Karnataka, India. Ph: +91 8971725451Email: [email protected], [email protected]

Primax International Journal of Commerce and Management Research Print ISSN: 2321 – 3604

Page IIISeptember 2016Special Issue

Editor Desk

Greetings to ALL….

I believe this is the phase, we can foresee the emerging face of innovative management practices.The present day executive is eager to rewrite rules to sail on the tides of success.

I consider today is very humbling for me to request, all of you to bestow your invaluable guidance tobuild to heralded new management direction, which can be achieved by inspiriting imaginative andinnovative articles. Let the articles of us, so the seed in young executive mind which brings the bestin them.

The lasting effects of this organization past accomplishments stand as testaments to the belief thata small group of committed individuals can make a difference. As we move forward, our emphasiswill continue on creating young, vibrant and dedicated Managers and Leaders, intellectually andemotionally competent to meet the challenges of organizational nuances both at national andinternational level.

Entering its second year, the academy remains deeply rooted to its commitment on building a legacyof impacting quality of life in this region.

All these experiences in strategy formulation, marketing, HR , financing in various segments of serviceindustry would be something that PRIMAX IJCMR values immensely. We would like to showcase thestate of art research with lot of rigour and freshness in its approach. We value your support immenselyand invite you to be a part of this research movement.

Finally, I truly believe in the African proverb - "If you want to go fast, go alone. But if you want to go far,go together." Indeed, we want to work together with all of you to proceed as far as our vision, mission,talents, resources, and dreams lead us. With your support, the only direction we can go is onwardand upward.

With Regards

Prof. T. Rajeswari., M.Sc.,M.A(Eng.).,M.B.A.,M.A(Soc)

Managing Editor- PIJCMR.

Prof. T. Rajeswari., M.Sc.,M.A.,(Eng).,M.B.A.,M.A.(SOC)CEO & Founder of Primax Foundation,Primax Commerce and Management Research Academy,Primax Publication,Bangalore, Karnataka. Ph: 08971725451Email: [email protected]


Page IVSeptember 2016Special Issue

ContentsSl.No.

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Title of the Articles Page No.

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5 - 8

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33 - 36

37 - 41

42 - 49

50 - 53

54 - 58

59 - 63

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66 - 70

71 - 76

77 - 82

Role of Knowledge Management in Organizational Success - M. Josephin Remitha & Dr. J. Arthi

Risk and Return Analysis: A Study on Selected FMCG Companies with SpecialReference to NSE - S. Nagarajan

Logistics - Mobi Rajendran

Green Marketing – Consumer Buying Behaviour Towards Green Products- Dr. C. Dhanalakshmi, U. Sanjana & U. Uma Maheswari

The Effects of Inflation and Economic Growth on Foreign Direct Investmentof India - Dr. Padmasani & K. Kasthuri

Assessment of Quality of Work Life and Motivation on Employee EngagementTowards Enhancing Employee Retention among Nurses in Private Hospitals,Coimbatore - B. Sugirtha & Dr. J. Arthi

Anempirical Study on Share Traders Behaviour Towards Security Analysisand Portfolio Management with Special Reference to Coimbatore City

- Syamsundar. P & Sabariga. E

Performance Management - M. Muthumani, P. Jenis & R. Shanmathi

Influence of Internet Banking Services and ATMs, on the Selection of PublicSector Banks with Special Reference to Coimbatore

- Dr. S. A. Mohamed Ali & C. Subha

Financial Performance of Selected Indian Pharmaceutical Industries - Dr. Sadika Sulthan & A. Rajamani

A Study on Occupational Stress and Coping with Reference to NursingProfessionals - J. Indumathy & Dr. M. Ravichandran

A Study on Investor Awareness on Mutual Fund with Special Reference RetailRetail Investors in Coimbatore - E. Mohanraj

Investors Awareness in Equity Shares - R. Geetha

A Study of Attitude and Work Commitment of Teachers Towards TeachingProfession - Dr. Ganga Durga Devi

A Study on HR Practices and Employees Satisfaction in Private Banks (withspecial reference to Puducherry)

- Dr. A. Shanmugasundaram & S. Sharmila Devi

Status of Microfinance in India - A Review - Shiva. G

Influence of Supply Chain Management on the Performances of KnitwearExport Units in Tirupur - K. V. Yuvaneswari & Dr. B. Thangaraj


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Rentention Strategy - R. Udhaya Rekha

Performance Management In A Matrix Oranisation Structure - Rahul Sajeev Krishnan & Dr. J. Juliet Gladies

Value Creation Role of Knowledge Management: A Developing CountryPerspective - Dr. M. P. Poongulale

Innovation Strategies and Advertising under Matrix Management - Annijasmin. J

Human Retention under Matrix Management - Mayura. B & Bavya. K

Evolution and Scope of Micro Finance in India - Venkatasubramanian. V & Sriram. T

Role and Impact of Foreign Direct Investment in India - N. Chitra & S.S. Uma

Role of Foreign Direct Investment in India - Narendra Kumar Jha

Rural Marketing: The Real Markets of India - Prashant Mishra

E- HR: The Emerging Concepts of HRM Function - Harshita Patil & Saumyabrata Nath

Policy Reforms and Recent Developments in FDI in India - Dr. K. VijayaVenkateswari

Performance Evaluation of Public and Private Sector Mutual Funds- N. Vijayalakshmi

Evaluation of Catering Services Provided by Indian Railway Catering andTourism Corporation Limited - Dr. V. Manohar & S. Selvanathan

A Study on Consumer Attitude Towards Teleshopping Network (With SpecialReference to Coimbatore City) - Dr. B. Sivakumar & Lissy. N. S

A Study on the Emerging Trends of Digital Marketing Concepts and its Benefitsin India - Preeti Kumari & Saumyabrata Nath

Branding - Divyansh Bhati. J & Diksha. D. Bhosale

Customer Relationship Management - Anila Das. H & Mercy Priscilla. J

A Study on Marketing Strategy of Reliance - Karthikeyan. B & Gokulsanth. K

A Study on Consumer Satisfaction Towards Cafe Coffee Day - Vignesh. C

Branding - M. Kreethika, S. Iswarya & M. Meena

A Study Consumer Behavior Towards Online Shopping with Reference toCoimbatore City - Dinesh Kumar. E & Arun Kumar. S

Modern-Day Branding in Mainstream Businesses- Priyanka. G, Sreemathy. R & Swathi. H

New Productdesign & Development - Kaviya. P. S & Thahsin. A

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Presentation on Advertisement - Anjana Das. M, Anagha. S. Kumar & Shimshitha. S

Advertisement - Hima. C.S & Akhila P. Thomas

Shift in Focus of Microfinance Institutions and its Impact on Rural Customers - S. Periyasamy

Challenges Faced by Ecopreneurs - A. Catherine Diana

Marketing - Dr. K. Sarulatha & G. Santhiya

A Study on Impact of Loyalty Programs on Consumer Purchase Behavior:with Special Reference to Organized Retail Stores in Coimbatore

- K. Sasi Kumar & Dr. M. SadikaSultana

Branding - J. Dhivya, A. Lalithakumari, M. K. Soundharaya & V. Suganya

Human Resource-Time Management - S. Mahalakshmi & Aishwarya. R

Reen Banking in India - Dr. Abirami & MarySaranya. J

Customer Preference Towards Organic Food Products - B. Subadradevi & Dr. R. Chitra

Marketing Challenges for the Newly Emerging Industries- K. Abiraami, S. K. Swarnika & Ashwathi Govindan Kutty

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Page 1September 2016Special Issue


ROLE OF KNOWLEDGE MANAGEMENT IN ORGANIZATIONALSUCCESS

1. Research Scholar, Avinashilingam School of Management Technology, Avinashilingam Institute for Home Scienceand Higher Education for Women, Coimbatore.

2. Assistant Professor (SG), Avinashilingam School of Management Technology, Avinashilingam Institute for HomeScience and Higher Education for Women, Coimbatore.

Abstract

Knowledge management deals with an organizational ability to collect, store, share and apply knowledge in order toenhance its survival and success. Knowledge management is a process that transforms individual knowledge intoorganizational knowledge towards achieving organizational success. Many conceptual research frameworks havebeen proposed. Knowledge Management (KM) and organizational success are believed to be essential for business.The various reviews in literature have declared that Knowledge Management (KM) plays an important role inorganizational success positively. However, knowledge management and organizational success affects one another.Based on the reviews of existing literature in this area, this article presents the role of knowledge management inorganizational success. Knowledge management aims to create sustainable competitive advantage for the successof an organization. It is a core business process that permeates every aspect of an organizational success. Theconceptual analysis of knowledge management as organizational structure provides greater insight on to, howknowledge management is related to organizational success and how knowledge practices influence organizationalsuccess. This paper helps to set a research framework.

Keywords: Knowledge Management, Role of Knowledge Management, Organizational Success.

M. Josephin Remitha1 Dr. J. Arthi2

IntroductionKnowledge management (KM) is the process ofcapturing, developing, sharing and effectively usingorganizational knowledge. It refers to a multi-disciplinaryapproach to achieving organizational objectives bymaking the best use of knowledge. The role of KM is todeliver the right knowledge to the right members at theright time, which can help the members to take the rightactions and further improve the performance of circulationprocesses in an organization (O’Dell and Grayson, 1999;Milton et al., 1999).Drucker (1993) states that KnowledgeManagement is different from general managementactivities since it Focuses on the perspective ofknowledge, and is eventually aimed at applying thisKnowledge in a systematic and organized manner tofurther create knowledge.

Knowledge Management is a key concept in today’sbusiness world. Thomas H Davenport; David W De Long;Michael C Beers (1998) says, The most common typeof success in knowledge management involvesoperational improvement to a particular process orfunction. Success isn’t just about what they accomplishin the organization; it’s about what they inspire othersto do. It is a sum of small efforts repeated on the day inand day out. The organization must pay attention, notonly on the processes and technology, but on knowledgeand the role to achieve the organization to its success.Knowledge management alone will not have much value

for the organization in building its competitive advantages,but having the relevant knowledge and the ability to shareand manage knowledge is the role of knowledgemanagement in the organizational success. As Mayo(1998) note, many organizations have been managingknowledge management for decades but few of themuse Knowledge management on a regular basis toimplement a Knowledge Management strategy successfully.

Literature ReviewThe various knowledge management models andpractices presented by researchers and practitioners arereviewed. Based on that, the key success rolesinfluencing the implementation of knowledgemanagement in organizations are discussed. Theconceptual framework is also designed based on themajor contribution of the three researches which istabulated below.

Table - 1: Literature Review

Shiaw-Tong Ha, May-ChiunLo, Yin-Chai Wang (2015)

Ron Young (2007)

Stan Garfield, Alan Frost(2014)

Authors Contribution

Knowledge management practices inorganizations.

Role of knowledge management contributingto the organizational success.

Benefits and failure of Knowledgemanagement practices in organizations.



Conceptual Framework:

Role of knowledgeManagement

Chief knowledgeofficer

KnowledgeAcquisition

KnowledgeRetention

KnowledgeManagement

KnowledgeConversion

KnowledgeBase owner

KnowledgeApplication

KnowledgeWorker

OrganizationalSuccess

KnowledgeManager

KMConsultant

Fig. 1 : Conceptual Framework

Role of Knowledge ManagementKnowledge management typically focus on organizational Knowledge and its success such as• Knowledge Acquisition: It is expected to have a significant influence on organizational success. It involves the

process of acquiring knowledge from either inside or outside of the organizations (Cho & Korte, 2014). Appropriateacquisition of knowledge increases the stocks of knowledge available to the organization, thereby providingorganizations better capability to make timely decisions that are essential for the organizational success (Chen,2004).

• Knowledge Conversion: Knowledge that is acquired has to be organized, integrated and presented in a moreeffective way in order to be useful (Reisi, Hoseini, Talebpour, & Nazari, 2013). Knowledge conversion enablesorganizations to improve their expertise and efficiency by converting acquired knowledge into applicableorganizational knowledge, and distributing the knowledge to where it is needed (Bhatt, 2001; Gold et al., 2001;Daud & Yusoff, 2010; Mills &Smith, 2011).

• Knowledge Application: Knowledge application is the process involving the actual use of knowledge for decisionmaking and problem solving (Gold et al., 2001). Besides, knowledge application can help to transform knowledgefrom being a potential power tool into actual innovations or inventions which can enhance overall performance oforganizations (Madhoushi, Sadati, Delavari, Mehdivand, & Mihandost, 2011; Matin, Nakchian, & Kashani, 2013).

• Knowledge Retention: (Liebowitz 2009 & 2011): Knowledge retention consists of a wide range of tools, someeasy and some hard to implement. Liebowitz identifies four categories which encompass all the initiatives withinknowledge retention. These include Recognition and reward structure, Bidirectional knowledge flow, Personalizationand codification, Bringing back important retirees in various capacities. Since knowledge is considered as animportant source of sustainable competitive advantage for modern business, increasing attention should be paidon protection of knowledge in order to prevent imitation by competitors.

Role of KM in Organizational Success:The role of knowledge management brings positive and successful organizational results such as,• Chief Knowledge Officer: It places KM within a theoretical and historical context which critically appraises

KM solutions and to manage organizational knowledge effectively, as a strategic asset, to further the organizations



objectives. It also helps to manipulate organizationalknowledge effectively.

• Knowledge Base Owner: It is responsible forconducting the best Knowledge Management processwhich consist of creation, sharing, store, and use onthe basis of their comparative study. Lai and Chu,divided knowledge management processes intoinitiation, generation, modeling, repository, distributionand transfer, use, and retrospect. Most studies onknowledge management involve knowledge creationprocess and organizational capability.

• Knowledge Manager: They understands theunderlying principles, processes, enabling tools,technologies and aware of the critical successfactors. Organization are able to manage knowledgeeffectively and critically assess the value of knowledgein the organization. However the newcommunications, collaboration and informationtechnologies effectively support the KM processes,within and between organizations.

• Knowledge Worker: They able to manageknowledge effectively at an individual and team level.It helps to manipulate information, time, tasks/processes and goals for better access, filter, analyze,synthesize, accumulate, store, communicate andapply knowledge. They collaborate in a dynamic,virtual team environment use communication,collaboration and information managementtechnologies effectively to navigate the informationand knowledge environment.

• KM Consultant: They conduct change readiness andknowledge sharing risk assessments to auditexisting KM processes and intellectual capital whichdevelop KM objectives and strategy to support inter-organizational and international organization KMprocesses. It educates and coach management andfacilitates the change to a knowledge basedorganization to understand the creativity andinnovation process in terms of team collaboration andorganizational Knowledge Management.

Pros and Cons of Knowledge Management:Knowledge management not only focus on the success,it’s also faces some failure which are listed as the prosand con of knowledge management in organizationalsuccess.

Pros of Knowledge Management:• Enabling better and faster decision making• Making it easy to find relevant information and resources• Reusing ideas, documents, and expertise• Communicating important information widely and

quickly• Making scarce expertise widely available

• Making the organization’s best problem-solvingexperiences reusable

• Stimulating innovation and growth.Cons of Knowledge Management:• Lack of performance indicators and measurable

benefits• Inadequate management support• Improper planning, design, coordination, and

evaluation• Inadequate skill of knowledge managers and workers• Problems with organizational culture• Improper organizational structure.

ConclusionKnowledge management is emerging as a significant oforganizational success and management challenge. Thispaper proposes the conceptual framework of successfulknowledge management implementation inorganizations. The good knowledge managementpractices will make the effort successful. Apart from that,from the academic point of view, it is also hoped thatadditional research will be undertaken to build upon thiswork, and to further develop and enhance knowledge onthe role proposed above that contribute to effectiveknowledge management implementationin organizations. This aids to better understanding of pre-requisite to succeed in businesses, especially in today’scompetitive business environment.

Reference• Nonaka, I. et al (1994); Organizational Knowledge

Creation Theory: A First Comprehensive Test.International BusinessReview. Vol.3. No. 4

• Akhavan, P., Jafari, M., and Fathian, M. May (2005),‘Exploring Failure-Factors of ImplementingKnowledge Management Systems inOrganizations’, jkmp vol. 6.

• Baloh, P., Desouza, K. C. and Paquette, S. (2011).The concept of knowledge. In: K. C. Desouza and S.Paquette (Eds.), Knowledge Management: AnIntroduction (pp. 35-71). New York: NY: Neal-Schuman Publishers, Inc.

• Choo, C. W. (2002). Knowledge management. In: J.R. Schement (Ed.) Encyclopedia of Communicationand Information (pp. 501-506). New York, NY:Macmillan Reference.

• Chua, A.Y. K. (2009). The dark side of successfulknowledge management initiatives. Journal ofKnowledge Management, 13(4), 32-40.

• Davenport, T. H., De Long, D. W. and Beers, M.C.(1998). Successful knowledge management projects.Sloan Management Review, 39(2), 43-57.



• Du Plessis, M. (2007). Knowledge management and what makes complex implementation successful? Journalof Knowledge Management, 11(2), 91-101.

• Park, H., Ribière, V., & Schulte Jr, W. D. (2004). Critical attributes of organizational culture that promote knowledgemanagement technology implementation success. Journal of Knowledge Management, 8(3), 106-117.

• Choy, C. S., & Suk, C. Y. (2005). Critical factors in the successful implementation of knowledgemanagement. Journal of Knowledge Management Practice, 6(1), 234-258.



RISK AND RETURN ANALYSIS: A STUDY ON SELECTED FMCGCOMPANIES WITH SPECIAL REFERENCE TO NSE

1. Assistant Professor, Department of Management [UG], Karpagam University, Coimbatore.

S. Nagarajan1

IntroductionThe Indian economy experienced an economic slowdownwith high inflation in fiscal year 2012. However, India’sFMCG Industry was resilient in face of slowdown withgrowth in both sales and profitability. The ever increasingmiddle class backed by rising per capita income isdriving the growth of the FMCG sector in the country.Moreover the wide distribution network built by erstwhilemajor players ensures the high penetration of the FMCGproducts in rural India as well, which is home to morethan 65% of Indian population. Hence, FMCG is one ofthe sectors in the country which has successfullymitigated the rural-urban divide.

The performance of leading players in FMCG sector wasabove par in the second half with almost all of themexperiencing double digit growths. Their stock pricesalso saw a significant appreciation during the course ofthe year. The outlook for Indian FMCG is positive becauseof growing sales, strong financials of leading players andever increasing urbanization. Reforms announced insecond half of the year like opening of retail sector toforeign companies will add further to the growth of thesector.

Review of LiteratureBennet, James A.et.al (2001) have conducted a studyon “Can money flow predict is defined as thedifference between up stick and down stick dollartrading volume”. The study says that despite littlepublished research regarding its usefulness, the measurehas become an increasingly popular technical indicatorbecause of its own means. The study summarizes itsmost important finding that money flow appears to predictacross- sectional variation in future returns.

Micko Tanaka Yamawaki et. Al., (2007) 7 have conducteda study on “Adaptive use of Technical Indicators forpredicting the Intra-Day price movements.

In this paper, the researcher has shown that this systemgives good predictions on the directors of motion withthe hitting rate at 10 ticks ahead of the decision pointas high as 70% for foreign exchange rates (FX) in fiveyears from kl1996 to 2000 and 8 different stock prices

in NYSE market in 1993 The study concludes that thetick-wise price time series carry a long memory of theorder of at least a few minutes, which is equivalent to 10ticks.

Statement of the ProblemThe food and drinks industry in India has gained inpopularity over the last 3-4 years, mainly because ofchanging lifestyles and eating habits of people. Blockmost of the increase in revenues from 2005 to 2009, thesection of the top wines being recorded. 7.5 percentgrowth rate between 2009 and 2013, it expects $ 330billion industry by 2013. The present study focus onrelationship between selected FMCG companies shareprice and Nifty Index. The risk associated with thosecompanies share price were measured with relevanttools. We have many no of studies in this perspectivebut they are in different periods and different sectors.The present study is only considering top five FMCGcompanies based on their market capitalisation.

Objectives of the Study• To identify the share price fluctuations of FMCG

corporations in NSE.• To analyze the risk involved in the selected FMCG

companies share price.• To suggest better ways and means for the investors

to enhance the knowledge about stock investmentin the secondary market.

Hypothesis of the StudyTo accomplish the above mentioned objectives, thefollowing null and alternative hypothesis was framed fortesting:

Null Hypothesis (H0)There is no significant difference between FMCGcompanies share price and Nifty index during the periodunder the study.

Alternative Hypothesis (H1)There is significant difference between FMCG companiesshare price and Nifty index during the period under thestudy. The null and hypothesis was tested at 5%.



Scope of the StudyThe study was mainly limited to the Equity Analysis ofITC, HUL, Nestle India Ltd, Dabur India Ltd and GCPLwith the help of apt tools and risk and relationship involvedin share price of those companies mentioned above weretested.

Research MethodologyThe present study is an analytical one.

Sample SizeThe ten major FMCG companies are available in India.They are ITC, HUL, Nestle India Ltd, Dabur India Ltd,GCPL, P & G, Colgate-Palmolive (India) Limited, GSK,Marico and Emami Limited. The researcher has selectedfive FMCG companies. They are ITC, HUL, Nestle IndiaLtd, Dabur India Ltd and GCPL. These five companieswere enjoyed maximum market share in FMCG sectorand the researcher has selected the following companiesbased on market capitalization like ITC with Rs 1,51,078crores, HUL with Rs 67,858 crores, Nestle India Ltd39,819 crores, Dabur India Ltd with Rs 18,632 croresand GCPL with Rs 13,335 crores.

Data Sourcesa) Data Collection:

The entire secondary data were collected from officialwebsite of National Stock Exchange (NSE). The dataconsist of daily closing share price of selected FMCGcompanies and daily closing of Nifty Index.

Period of the StudyThe study covers five FMCG companies share pricemovement for a period of 60 months from January 2012to December 2016.

Tools Used for AnalysisCorrelation:The correlation is one of the most common and mostuseful statistics. A correlation is a single number thatdescribes the degree of relationship between twovariables. If r is positive, it means that as one variablegets positive correlation with the other variable. If r isnegative it means that as one variable gets negativerelationship with the other variable and it is otherwisecalled as “inverse” correlation.

r =n(Σxy) - (Σx)(Σy)

[nΣx2 - (Σx)2] [nΣy2 - (Σy)2]

Standard deviation:According to Drummond & Jones (2006), a standarddeviation “is the numerical value that describes the spreadof scores away from the mean and is expressed in the

same units as the original scores. The wider the spreadof scores, the larger the standard deviation”.Where, S = Standard Deviation, x = Sample Mean, X =Observations and N is the total no of observations or thesample size.

S =Σ(x - x–)2

n - 1

Co-efficient of variation:Coefficient of Variation is the percentage variation inmean, standard deviation being considered as the totalvariation in the mean. If we wish to compare the variabilityof two or more series, we can use the coefficient ofvariation. The series of data for which the coefficient ofvariation is large indicates that the group is more variableand it is less stable or less uniform. If a coefficient ofvariation is small it indicates that the group is less variableand it is more stable or more uniform. Co-efficient ofvariation = (σσσσσ *100) / x

Beta:Beta coefficient is a measure of sensitivity of a shareprice to movement in the market price. It measuressystematic risk which is the risk inherent in the wholefinancial system. Beta coefficient is an important inputin capital asset pricing model to calculate required rateof return on a stock. It is the slope of the security marketline.

Analysis and DiscussionIdentify the Relationship between Nifty Index andFMCG Companies Share Price

Table - 1: Share Price Fluctuation of FMCGCompanies in Nifty

1 ITC (Indian Tobacco Company) 0.71

2 HUL (Hindustan Unilever Ltd) 0.70

3 Nestle India Ltd 0.53

4 Dabur India Ltd 0.76

5 GCPL (Godrej Consumer Products Ltd) 0.69

S.No FMCG Corporations Correlation

Table -1 given the relationship between relationshipbetween nifty index and FMCG Companies share in thestock market by computing Karl Pearson’s correlationcoefficients. The FMCG corporations daily closing shareprice and daily nifty index closing value were used asthe two variables. The correlation co-efficient betweenITC, HUL, Dabur India Ltd, GCPL share prices and niftyindex were (+) 0.71, (+) 0.70, (+) 0.76, (+) 0.69respectively. It implies that there was a high degree of



positive association between the ITC, HUL, Dabur India Ltd, GCPL share prices and Nifty Index and it was found tobe significance during the 60 months study period from January 2012 to December 2016. The correlation co-efficientbetween Nestle India Ltd share price and nifty index was (+0.53).

It implies that there was a moderate degree of positive association between the Nestle India Ltd share price andNifty Index and it was found significance during the 60months study period from January 2012 to December 2016.

The Risk involved in the FMCG Companies Share PriceRisk denotes the deviation of actual return from the estimated return. To analyze the risk involved in the SelectedFMCG companies share, Researcher used the following tools like Standard Deviation, Co-efficient of Variation andBeta.

Table - 2 : Risk Analysis of FMCG Companies in Nifty

S.No FMCG Companies

1 ITC (Indian Tobacco Company) 1.90 0.76 0.19

2 HUL (Hindustan Unilever Ltd) 3.90 0.84 0.18

3 Nestle India Ltd 13.51 0.29 0.19

4 Dabur India Ltd 0.72 0.63 0.19

5 GCPL (Godrej Consumer Products Ltd) 6.7 1.16 0.07

Standard Deviation Co-efficient Variation Beta

Table – 2 clearly explains the variance of HUL (Hindustan Unilever Ltd) is 0.76 and ITC (Indian Tobacco Company)is 0.84, which were much higher than other companies. It indicates share prices of these two companies were morevolatile compare with other companies taken for the study. Nestle India Ltd was less volatile because it was scored0.26 as co-efficient of variation.

The table clearly denotes the standard deviation of five companies. Dabur India Ltd was scored low standarddeviation (0.72) and moderate variance (0.63). Hence it is concluded that Dabur India Ltd share experienced higherrange of probable return because of higher standard deviation and variation is much higher which indicates, DaburIndia Ltd share prices was variable. On the other hand, Nestle India Ltd was less variable or more consistent thanother FMCG companies during the 60 months study period.

The table further displays that the risk of FMCG companies with the help of beta. It indicates that, beta of all theFMCG companies taken for the study was less than 1, and share price was defensive. In short, all the five companiesshare prices moved in the positive direction in connection with Nifty Index.

CONCLUSIONThe investor may invest in Dabur India Ltd shares in order to reduce the risk compared to other companies. Alsoinvestor should consider the Nifty Movement. Investor should analyze qualitatively the existing financial mix andassess the benefits and costs of debt and also know the quality of the firm’s current projects and managers abilitiesbefore investing in equity.

The government policy, foreign exchange fluctuations, particularly dollar rate and interest rate between countriesshould also be taken into consideration before investing in equity share of FMCG companies. Hence investorsshould look at the trend of FMCG companies’ price movements before investing in equity shares.

Equity analysis is the most important measurement technique used to measure the movement of share market,which helps the investor to take decision either to buy or sell. Form this analysis, it is found that Dabur India Ltdshare investment was less risky compared with other FMCG companies taken for the study. In short selectedFMCG companies share recorded moderate risk and a moderate gain / loss to the investors during the study period.

References• Grinold Richard C., and Kahn, Ronald N. Active Portfolio Management, 2nd Edition, New Delhi: Tata McGraw-Hill

Pub. Co., 2004.• Prasanna Chandra (2010) “Investment Analysis and Portfolio Management” (Third Edition), Tata McGraw-Hill

Education (p) ltd, Newdelhi.• Punithavathy Pandian,” Security Analysis and Portfolio Management”Vikas Publishing House,Newdelhi.



Online Sources:http://www.journalcra.com/article/analysis-risk-and-return-equity-investment-banking-sectorhttp://www.internationaljournalssrg.org/IJEMS/2016/Volume3-Issue2/IJEMS-V3I2P101.pdfhttp://www.ijoart.org/docs/ANALYSIS-OF-THE-RISK-AND-RETURN-RELATIONSHIP-OF-EQUITY-BASED-MUTUAL-FUND-IN-INDIA.pdfwww.springerlink.com



LOGISTICS“Behind every great leader there is an even greater logistician.” – M. Cox

1. Associate Professor, Dept of Commerce, CSI Bishop Appasamy College of Arts and Science, Coimbatore.

AbstractLogistics involves the delivery of products or services for the client with assured quality and quantity. The logisticsindustry also depends on the timeliness in which products are delivered to a destination. Promptness is of utmostimportance, as delayed delivery can result in significant losses to the recipient of the consignment in most cases.

Mobi Rajendran1

IntroductionLogistics is the backbone of our country’s economicgrowth. Manufacturers and suppliers in India currentlyenjoy the comfort of late-night pick-ups. Logistic helphas thus evolved from a primarily document centric serviceto a critical supply chain support for many industries inIndia. In an increasingly competitive environment, wherethe focus is on pruning the inventory costs, logisticssupport provides speed and reliability to the businesshouses. Rather than setting up their own infrastructurefacilities and related operations, many companies inIndia are now looking at end-to-end solutions providedby reputed logistic companies.

Logistics management is comprised of materialsmanagement, channel management, physicaldistribution, and supply chain management. It alsoincludes the warehouse management system whichtakes control of stocks, and streamlines the movementof goods in the storage units. The major customer groupsor key market segments served by the logistics industryare:1. Parcel/documents express delivery services,2. Freight by air, ocean, road or rail,3. Warehousing and distribution and4. Supply chain solutions.

Research Design and MethodologyObjectives of the studyThe main objective of this research is to understand theservices rendered by Indian logistic industry and thefuture trend of logistics in India.

Research MethodologyThis study is purely based on secondary data anddescriptive methods were employed.

Tools of data collectionThe required data used in the study are compiled fromvarious published and unpublished resources.

Aim of logisticsThe main aim of logistics services is to improve theperformance of a company’s warehousing, inventorymanagement and distribution network. Logisticssolutions enable the centralisation, management anddistribution of high-impact, high-value products. Globally,centralised points of distribution enable quicker time tomarket, resulting in reduced costs and increased marketshare.

Benefits of logisticsThe purpose of logistics industry is to enable an effectivetransportation or timely movement of goods from oneplace to another. The major benefits of efficient andeffective logistics operations are:1. Cost savings by centralizing inventory management

by reducing the number of inventory holding locations,as well as the size and value of the inventory held,

2. Faster order fulfillment by relying on a globaltransportation network and logistics inventorymanagement system, giving them the ability toaccess and dispatch inventory 24 hours a day, 365days a year,

3. Improved cash flow by using bonded warehouses fortesting and storage, providing the option to defercustoms duties and taxes and

4. Flexibility to efficiently change distribution patternsfor new products, based on ever changing customerdemands.

Logistics servicesLogistics services can be defined as, “The process ofplanning, implementing and controlling the efficient flowand storage of goods, services and related information



from point of origin to point of consumption for the purposeof conforming to customer requirements.” (Source –Council of Logistics Management).

The Five Rights of LogisticsRight Items, needed for consumption or production,Right Place of collection and deliveryRight TimeRight ConditionRight Cost

Different mediums of Logistics servicesAir freight – this is a modern and the safest mode toensure a fast delivery of goods. A chosen one by manybecause of the swiftness of the system there are manycompanies that are now even providing super fastdeliveries by airways even on the same day.

Land transport – this is a means of logistics supportthat has withstood the test of time through the extensivenetwork of roads in India. It is the popularly used methodand used especially in the shipments of heavy articles.

Railways – Though most used in case of domesticservices this is very effective in the availability of costeffective logistics support in India.

Waterways – Shipments and transportation of goodsis done on an international basis through this way. It isapt in case of shipments of oil, highly sensitive or volatilearticles.

Logistics in Indian marketIndian logistics sector is estimated to have grown at ahealthy 15% in the last five years. However, growth insub-sectors varies, with the lowest being in basic truckingoperations and highest in supply chain and e-tailinglogistics. Some studies estimate the share of India’slogistics spend in GDP at 13% (versus 7-8% indeveloped countries), implying overall size of $180-220billion (direct costs +wastages from inefficiencies).

General Characteristics of Indian Logistics MarketThere is a huge demand for logistic services in Indiaespecially with the growth of the Indian economy alongwith the influx of new companies in sectors that wasotherwise unknown. Today, the logistics sector is thefifth best thriving industry in India. In developing marketslike India, based on product type, market developmentand awareness, different e-commerce logistics patternsare in place. As these patterns grow, and are accepted,it will definitely bring about marked changes in the actualphysical supply and delivery networks. This is giving riseto new forms of logistics models that incorporates e-fulfillment centres, delivery and package hubs, localizeddepots that cater to order fulfillment and also process

the returns. The logistics industry depended previouslyon transportation more than anything. Nowadays,however, good infrastructure and record-keeping havebeen improved by advancements in technology,integration, globalization, legislation, and confederations.

The immense growth witnessed by the retail andmanufacturing industries has brought warehousing andlogistics facilities closer to towns and cities. The logisticsindustry in India has grown fast, overriding major sectorslike metals and mining. Strategically located cities likeMumbai were earmarked for setting up logistics parks.Export processing zones housing several companiesranging from garment to electronics have necessitatedthe need for a good logistics backbone to support thedomestic market as well as international trade. The Indianlogistics industry is poised to grow annually at the rateof 15-20 percent, reaching a revenue outcome of US$385billion by 2015. The market share of the organized sectorin logistics will also grow to 12 percent by 2016, opinemarket analysts.

Major Drivers of Logistics Industry in IndiaThe concept of logistics is continuing to gain strength inIndia. There are several major drivers fuelling the growthof the industry.1. Organizations are realizing the huge potential savings

that efficient logistics can offer, and its impact onrevenue growth and improved profitability. Theincreasing complexity of supply networks,globalization of businesses, proliferation of productvariety, and shortening of product lifecycles forcingthem to realize that it is better to allow the expertsto manage their logistics, and this results inacceptance of outsourcing as a business practice.

2. The increasingly demanding customers, coupled withthe increasing cost pressure and competition, thereis an urge for companies to differentiate themselvesfrom their competitors through value added servicesand competitive prices. As such, price and timefactors, for example on-time delivery, shorter leadtime, improved service and better inventorymanagement become important criteria in selectionof suppliers.

3. The globalization trend in the complex businessenvironment worldwide also poses great opportunitiesfor the logistics industry in India. Worldwidecompanies have started adopting global sourcingand distribution strategies and have given higherpriorities on efficient management of supply chainand logistics. Such global strategy has significantimplication on the growth of Indian logistics industry.

4. Another major driver of the logistics industry is theinternet. With the emerging ecommerce, there is aneed for e-companies to offer an efficient distribution



system that ensures fulfilment and timely delivery ofgoods ordered through the internet. Companies areon lookout for the strategic logistics players who canstreamline the movement of their goods and ensurefaster delivery. In addition, with EDI, bar coding andtracking of goods in transit used widely, manycompanies are depending on the logistics providersto provide the IT integration.

5. The Indian government’s initiative in improving theinfrastructure is a positive factor for boosting thelogistics industry. The simplification of trade rulesand regulations, allowing private sector participationin roads, seaports and airports, and the increase ofpublic funding in upgrading the infrastructure willfurther support the growth the logistics industry inIndia.

Logistics Players in India and their StrategiesIn response to the growing demand in the logisticsindustry worldwide, the Indian players have setglobalization as their long-term vision. Thus anotherstrategy adopted by them is to expand and establishthemselves on an international level through alliancesand partnering agreements, and through joint ventures.The recent developments in organic growth and tie-upsthat have taken place in India includes the following:

UPS (United Parcel Service) Logistics Group formed ajoint venture with Jetair Ltd. The UPS-Jetair Logistics, a60:40 joint venture provides international express deliveryservices in India.

GATI Ltd, an express logistics company tied up withBhutan Post as part of its strategy to make a foray intoall South Asian Association for Regional Cooperation(SAARC) countries.

Elbee Services has entered into several strategicalliances with large players in the global express industry.It has entered into a strategic partnership with Bax GlobalIndia, part of the US-based conglomerate PittstonCompany to jointly provide logistics services to Indianfirms. Other Elbee’s international service associatesinclude TNT India Ltd.

Blue Dart, a leading player in the domestic market,has entered into a sales alliance with DHL India to provideBlue Dart customers the DHL advantages of size, reach,flexibility and infrastructure. Blue Dart will now be awholesaler for DHL India.3PL start-up companies like Dynamic Logistics Pvt.Ltd are also growing rapidly in India.

Challenges faced by Indian Logistics MarketLogistics management firms nowadays face severalchallenges also, which may be local or global in scope.While the need for integration of logistics activities and

lack of qualified human resources are the primarychallenges faced at the local level, the global challengesinclude those arising due to greater distances, modesof transport, documentation, coordination ofintermediaries, cultural and political differences,globalization, need for flexibility and speed (at the sametime), need to integrate supply chain activities, andchallenges due to emphasis of companies on greenlogistics. The road sector is fraught with inadequate andlow-quality highway availability, thereby limiting thetrucks’ size and impacting economies of operation.Another key constraint is administrative delays. Despitebeing a relatively low-cost country, logistics cost in Indiais higher due to administrative delays led by paperwork—leading to huge inventory investments and wastage—and a complex tax structure.

Some Suggestions to Approach the Logistics MarketAs India’s logistics industry is in the infancy stage,setting up a nationwide distribution capabilities at thestart-up stage would be difficult. Instead logistics playersshould consider comprehensive coverage of one part ofIndia or one vertical before spreading out to the rest.This is because a successful business just in one partof the country can easily become dominant and attractiveto cater both ends of supply and demand. On the otherhand, the quality standards and service levels currentlyoffered by Indian logistics players could be belowexpectations. With the emerging globalization andintegration of Indian market with the global market, Indiancompanies are increasingly demanding services on parwith global standards. As such, local logistics providershave to focus on offering world-class services andsolutions to enhance the satisfaction level of theircustomers.• Focus on information and coordination in developing

logistics solutions rather than asset ownership• Be industry specific and provide customized solution• Pursue alliances aggressively• Focus on organization building as much as strategy

or operations• Provide technological solutions

Emerging Trends in Logistics Market in India• Globalization and development in the IT arena,

coupled with the need for supply chain optimizationare reshaping the physical trade flow. There isincreasing government’s involvement in supporting thelogistics business and their players. In India, we seethe government’s initiates in upgrading infrastructure,corporatization of major ports and allowing moreprivate sector participation in improving infrastructurein the country.



• The second trend is the changing identities andservice portfolios of many logistics players.Companies serving the express logistics, e.g. GATIand Blue Dart are now becoming full-fledged 3PLservice providers and some even growing to theextension of logistics solution providers.

• Thirdly, consolidation is being adapted widely in theindustry as an expansion strategy to gain the strengthof size and reach of operations and synergies in termsof offerings. Technology is another keyword whencomes to the emerging trend in the industry. RFIDtechnology uses tags or transponders (attached tothe objects, including items, cartons, pallets andcontainers) to transmit Electronic Product Code(EPCs) and communicate wirelessly to readers overradio frequency waves. The benefit to customersinclude improved accuracy and distributionefficiencies, shorter order cycle times, elimination ofunnecessary handling and expenses and enhancedcustomer satisfaction, for an overall competitiveadvantage. Sooner or later, the RFID enabled supplychain execution solutions will be used extensively inIndia.

The Future Trends in Logistics Market in IndiaThe growing technologies worldwide are expected tochange the Indian logistics industry in future. Theconcept of e-commerce and open buying on the internet(OBI) are still in nascent stage in India due to thetraditional mindset of the corporate and people. Howeverin the future, the growth of e-commerce and its logisticsneeds will become inevitable and India will overcomethese barriers. The increasing online sales will force e-companies to forge strategic alliance with logisticsservice providers that can provide cost effective andseamless distribution solutions. India can expect a shiftin the retail logistics, B2B procurement practices andthe way the distributions are handled. The adoption ofnew technologies such as GPS and RFID will take placerapidly in the future. The defense logistics will alsoemerge as an important area for new technologies inIndia. Changes will also take place among the logisticsplayers. It is expected that the market for 3PL servicesis likely to grow at a Compound Annual Growth Rate(CAGR) of 20.4% during the next five years, with thegrowth being fuelled by the entry of MNCs and the export

focus of Indian companies. The industry consolidationwill eventually result in a few large players. In the longterm, Indian service providers will develop restructuringstrategies and some will become strong players.However, it is the global service providers that will dominatethe industry. They will play a larger role, strengtheningtheir domestic capabilities to leverage global clientresources. Both local and multinational service providerswill become more specialized in industries served andprovide more customized services. The existingcustomers, on the other hand will reduce the number ofproviders used and will begin to demand higher standardsof reliability and quality which includes state-of-arttechnology. The logistics solution available in future willalso be highly technology driven. As India’s logisticsoutsourcing and investments to improve logisticsefficiencies are still at a nascent stage, these futuretrends will take place, but it will take longer time tomaterialize. The resources needed for wholesaledevelopment will also take enormous amounts of timeand resources. India should recognize the extraordinaryrole logistics plays in economic development and inenhancing the competitiveness of all sectors of theeconomy. As such, India should move forward for anintegrated strategy towards developing a world-classlogistics industry.

Indian logistics market is expected to grow at a CAGRof 12.17% by 2020 driven by the growth in themanufacturing, retail, FMCG and e-commercesectors. 3PL logistics market in India is expected to beworth US$ 301.89 billion by 2020.

Web references:http://business.mapsofindia.com/india-industry/logistics-industry.html#sthash.t2gyd0tu.dpufhttp://www.pianc.org/http://www.marketresearchreports.com/http://jang.com.pk/http://www.poms.org/http://ieeexplore.ieee.org/http://indiainsure.com/https://www.dhl-discoverlogistics.comhttp://www.financialexpress.com/www.blog.gati.com



GREEN MARKETING – CONSUMER BUYING BEHAVIOUR TOWARDSGREEN PRODUCTS

1. Professor,Kit-Kalaignarkarunanidhi Institute Of Technology,Coimbatore.2. Final Mba,Kit-Kalaignarkarunanidhi Institute Of Technology,Coimbatore.3. Final Mba,Kit-Kalaignarkarunanidhi Institute Of Technology,Coimbatore.

Abstract"Green Marketing" refers to holistic marketing concept wherein the production, marketing consumption and disposalof products and services happen in a manner that is less detrimental to the environment with growing awarenessabout the implications of global warming, non-biodegradable solid waste, harmful impact of pollutantsetc.Polonsky(1994) "Green Marketing consists of all activities designed to generate and facilitate any exchangesintended to satisfy human needs or wants, such that the satisfaction of these needs and wants occurs, with minimaldetrimental impact on the natural environment”. A consumer buying behavior is influenced by cultural, social, personaland psychological factors. Green has become a conventional issue driving millions of consumers to find out how theycan live a more eco-friendly existence. In short “green” may be expensive but in long it will prove to be advantageouscost too. So green marketing is inevitable. Promotion and adoption of green products & technologies is necessary forconservation of natural resources and sustainable development. As a result, companies are increasingly usingstrategies for the promotion of adoption of green products and services. This paper focuses on the changing consumerbehavior towards the usage of green products

Keywords: Green Marketing, Detrimental, Green Consumers, Consumer Behavior.

U. Uma Maheswari3Dr. C. Dhanalakshmi1

IntroductionBusinesses and consumers today confront one of thebiggest challenges – to protect and preserve the earth’sresources and the environment. Green marketing refersto ecological products such as healthy food, phosphatefree, recyclable, refillable ozone friendly, and environmentfriendly. There are some of the things consumers mostoften associate with green marketing. In addition, thegreat majority of our environmental problems – excessgarbage, pollution, waste of energy and material, etc.are the result of consumers’ consumptive behaviors. Thedesire of consumers to purchase green products andservices is rising. Many are more aware of environmentalissues and consequently choose products that do notdamage the environment over less environmentallyfriendly products, even if they cost more.

In the past production has been the focus withoutadequate focus on the awareness about adverseenvironmental effects. Respectively, people haveproduced many different types of technology andproducts. They still are exploring new technologies toproduce new tools and products to make life easy forhuman. People always buy the products best satisfythem with a high quality as well as value to themselves;however they seldom think to buy products withminimum side effect for protecting the nature andenvironment.

Firms today are faced with consumers who areenvironmentally conscious when making a purchase.According to Hallin (1995) and McCarty and Shrum(2001), people engage in environmental behavior as aresult of their desire to solve environmental problem, tobecome role models and a belief that they can help topreserve the environment. It has become very essentialto know the factors that create the desire of consumersto purchase a product. The companies try to producethe eco-friendly products to serve customers’ needs andsatisfaction. Therefore it is necessary for the organizationto understand customer attitude and be vary of theirbehavior which include motivation that the consumer inbuying green product. Hence, the present studycontributes to the field by investigating and exploringthe extent of the impact of consumers’ buying behaviortowards the green products.

Literature ReviewGreen purchasing refers to the purchase ofenvironmentally friendly products and avoiding productsthat harm the environment (Chan, 2001).

Green purchasing is most often measured as greenpurchase intention and behaviour. Green purchaseintention refers to consumers’ willingness to purchasegreen products. Intentions capture the motivationalfactors that influence green purchase behaviour ofconsumers (Ramayah, Lee, and Mohamad, 2010).

U.Sanjana2



Green purchase behaviour represents a complex formof ethical decision-making behaviour and is considereda type of socially responsible behaviour. As a sociallyresponsible consumer, the green consumer “takesintoaccount the public consequences of his or her privateconsumption and attempts to use his or her purchasingpower to bring about social change” (Moisander, 2007).

Scope This study presents a review of empirical articles onconsumer green purchase behaviour published in reputedacademic journals from 2000 to 2014. This period (2000– 2014) was chosen because major previous studies(before 2000) related to green purchase behaviour hadbeen included in a literature review on ecologicalconsciousness behaviour carried out by Irene Tilikidouin1999. Also, a review of studies falling in the periodmentioned above will give an account of recent empiricalliterature. This paper focuses only on studies that soughtto identify the green purchase behavior. Studies reportingthe effect of demographic variables were beyond thescope of the paper. Studies were collected by performingan electronic search of the Scopus database. Scopusdatabase was chosen to ensure the inclusion of onlyhigh quality studies.

The 4 P’s Green MarketingGreen Product: Attributes such as energy saving, organicetc. that leads to reduction in resource consumptionand pollution.Green Price: Most consumers will pay additional valueif there is a perception of extra product value.Green Place: Aiming to reduce carbon footprint by wayof managing logistics to cut down transport emanations.Green Promotion: To address the relationship betweena product and the environmental, to promote green life style,and to present a corporate image of environmental responsibility.

Why Green Marketing

Fig. 1

SocialResponsibilty

Opportunity

Compititivepressure

Governmentalpressure

Cost issue

Challenges of Green MarketingImplementing green marketing is not going to be an easyjob. The firm has to face many problems while tradingproducts of green marketing. Challenges which have tobe faced are listed under• Green marketing encourages green products /

services, green technology, green power /energy. Thefirm ensures that they convince the customer abouttheir green product, by implementing Eco labelingschemes.

• Eco labeling schemes offer its “approval” to“Environmentally harmless” products and they arevery popular in Japan and Europe.

• Convincing the Indian customer’s is a great challenge.The profits will be very low since renewable andrecyclable products and green technologies are moreexpensive.

• Green marketing will be successful only in long run.• Many customers may not be willing to pay higher

price for green products which may affect the salesof the company.

Types of Green ConsumersThe study divided consumers into four groups based ontheir level of eco-consciousness. By observing consumerbuying behaviors, the study identified key buyingmotivations for each group, as well as major purchasingdrivers.According to the study, each group is distinctive, bothin its interest in green and its key values.

True blue greensThis group is characterized by business consumers whoare• Highly committed to environmental products• Buying environmental products whether it leads high

cost• Avoid products that are not made on environmental

concern• Highly involved in pro-environmental activities• Make monetary contributions to environmental issues

Greenback GreensThis group is similar to the True blues. However,greenbacks are• Willing to pay premium for environmentally sound

products• Sometimes they switch to another products if the

environmental products are not available or cope withthe lifestyle



SproutsThis group doesn’t usually purchase green products but• Capable of doing so, if they are marketed to them in

an appropriate way• Tend to believe in environmental causes only in

theory, not in practice• They rank well above companies overall on when it

comes to environmental requirements and standards.This makes the group a key swing group

Grousers• Not committed to environmental products• Not believe that they are capable of effecting change• Tend to claim that they have many reasons for not

doing more for the environment

Basic brownsThese business consumers• Do not think about the environmental issues• Expose that it is not necessary to do many things

for the environment• Emphasize the profit only• May harm the environment

Buying Behaviour

Fig. 2

Consumer greenbehaviour

Green Marketing

Gender

Functins of Product/quality

PriceWell-known brand name

The survey found that eco labels, certifications andsustainability guides influenced consumers’ purchases.According to the study, about seven in 10 shoppers usedpackage labels or in-store signage to learn about thebrands they were buying.This percentage of green purchasers varied across retailformat and by category. The Grocery format had thehighest number of green product purchasers followedby the Value Discount format and Specialty retail format.The difference in purchase rate is likely attributable tothe prevalence of green product categories and the effectsof the market basket size in each of the retail formats.

Fig. 3

We defined green to represent a broad set of productattributes that are more environmentally and sociallysustainable. These characteristics included:• Low water usage,• Reduced packaging, organic,• Locally grown, fair trade,• Energy efficient,• Biodegradable,• Non-toxic and low volatility organic compounds, and• Recyclable materials or content.

While green is not the dominant purchasing driver forthe majority of green shoppers, green is emerging as animportant brand differentiator. It adds recognized socialbenefits to the value proposition for many shoppers. Italso acts as a frequent tie breaker that tips the balancewhen other purchase drivers are in parity.

ConclusionEnvironmental concern could emerge as one of thepowerful drivers that influence the green productpurchase. It has not resulted in the ability to commanda sustainable premium consumer is willing to buy greenproducts but not to pay higher price. It may be importantto examine in future studies the effect of disposableincome on willingness to pay premium. The study onthe “consumer buying behaviour towards green products”throws light on the consumer’s attitude.

The factors influencing their purchase are benefit forhealth, quality and reliability, Variety and quantity,environment and ambience, customer services andfriendship advice etc Consumers are ready to pay moreprices for the products which are causing lessenvironmental pollution. They also prefer promotionalcampaign which protects the environment, anddistribution channels which are not causingenvironmental pollution. But they are not ready tocompromise the quality of the product for the sake ofthe environment. The marketers should includeconsumer’s attitude measurement program me in their



marketing plan and adopt all aspects of green marketing, then only they can achieve their goal and fulfill the socialresponsibility of a business concern.

Increased consumer demand will help to reduce cost in production of green products. Awareness among consumerthat their buying behavior can make a difference to the environment. There is a scope for green products marketersto capture this market as it has long term and scope.

Refernces• Chen, T.B., & Chai L.T. (2010). Attitude towards environment and green products: Consumers

perspective.Management Science and Engineering, 4 (2), 27-39• Chitra, K. (2007). In Search of the green consumers: A perceptual study. Joumal of Services Research, 7(1),173-

191.• D Souza C, Taghian M and Lamb P (2006), “An Empirical Study on the Influence of Environmental Labels on

Consumers”, Corporate Communications: An International Journal, Vol. 11, No. 2, pp. 162-173. 5. Mostafa M M(2006), “Antecedents of Egyptian Consumers Green Purchase Intentions”, Journal of International ConsumerMarketing, Vol. 19, No. 2, pp. 97- 126.

• www.google.com



THE EFFECTS OF INFLATION AND ECONOMIC GROWTH ON FOREIGNDIRECT INVESTMENT OF INDIA

1. Assistant Professor, School of Commerce, Bharathiar University, Coimbatore.2. Research Scholar, School of Commerce, Bharathiar University, Coimbatore.

AbstractForeign Direct Investment (FDI) refers to net inflows of investment in an economy of a country. It is the sum of equitycapital, reinvestment of earnings, long term and short term capital. FDI is considered to be one of the importantfactors, which leads to the globalization of the economy. It is important for countries to take measures to maximizetheir growth through more and more FDI inflows. The FDI promotes economic growth of the country through itsinfluence on the GDP and other macroeconomic variables such as inflation rate, exchange rate, oil price etc. Inflationrate measures the rate of change of the price level and the purchasing power of the host country currency. Highinflation rate has negative and significant impact on economic growth and FDI. This paper investigates the impact onforeign direct investment due to growth and inflation of a country. Secondary data has been gathered for the period of15 years from 2000 – 2015. In this study, FDI is taken as dependent variable whereas GDP and inflation rate are takenas independent variables. This relationship is tested by applying multiple regression models.

Keywords: Foreign Direct Investment (FDI), Gross Domestic Product (GDP), Inflation, Economic Growth, Globalization

K. Kasthuri2Dr. Padmasani1

IntroductionForeign Direct Investment (FDI) is long term participationbetween two countries. Over the past two decades, FDIhas been sought by the most, if not all, developingcountries as means of completing the level of domesticinvestment as well as securing economy-wide efficiencygains through the transfer of appropriate technology,management knowledge, access to foreign markets,increasing employment opportunities, and improvingstandard of living. To this end, policy makers haveconsidered various incentives and policies to attract FDI,and to ensure its consistency with the domesticeconomic development objectives. FDI has not beenadequately conceptualized in terms of a theory ofeconomic development, despite the theoreticalconsensus on its crucial role as a catalyst of structuralupgrading and economic growth in the host developingcountries. Growth is generally measured by the changein the real gross domestic product. GDP is the totalmarket value of all final goods and services produced inan economy in a one-year period. Low inflation and highlong term growth improves the efficient allocation ofresources and increases employment in the economy.However, the existence and nature of inflation-economicgrowth nexus is one of the macroeconomiccontroversies. Inflation is a continual rise in the pricelevel. The price level is an index of all prices in theeconomy. When inflation is high, it creates uncertaintyand distortions in the economy thereby impedingsustainable growth through spending and investment.

The available literature reveals that there are studies onvarious aspects of the FDI especially on its effects oneconomic growth. This study has been expanded toinclude other variables such as inflation and GDP.

Literature ReviewQaiser Abbas et al (2011)1 explained the impact of foreigndirect investment on growth (GDP) of SAARC countries.Multiple regression method is adopted and the resultrevealed that there is a positive and significantrelationship between GDP and FDI while an insignificantrelationship between inflation and GDP.

Alex Ehimare Omankhanlen (2011)2 the main objectiveof this paper is to find the effect of inflation and exchangerate and the bidirectional influences between FDI andeconomic growth in Nigeria. The result revealed that FDIfollow economic growth occasioned by trade opennessof companies especially the telecommunicationcompanies.

Patrick Enu et al (2013)3 examined the majormacroeconomic determinants of FDI in Ghana between1980 and 2012. The vector autoregression model wasestimated and the result showed that the first year ofFDI, the last two years of exchange rate and tradeopenness were statistically significant.

Thinomuonga Moyo (2013)4 described the impact offoreign direct investment on GDP in Zimbabwe. Thevariables are Gross Domestic Product, GovernmentExpenditure and Private Investment. The factors that are



found to affect GDP negatively are increases in inflationand interest rates. The impact of two factors on economicgrowth, which is external debt and net exports, wasinconclusive.

Dea Vibby Irsania and Ana Noveria (2014)5 examined therelationship among foreign direct investment, inflationrate, unemployment rate, and exchange rate to economicgrowth in Indonesia. The result represented that FDI,inflation rate, unemployment rate and exchange rate hasa significant influence towards the economic growth.

Statement of the ProblemForeign Direct Investment (FDI) consists of externalresources including technology, managerial andmarketing expertise. All these generate a considerableimpact on the host nation’s productive capabilities. Thesuccess of government policies depends largely oncontrolling adequate amount of FDI comprising ofmanagerial, capital and technological resources to boastthe existing production capacity. Although the governmenthas being trying to provide conducive investment climatefor foreign investment into the country have beenencouraging.An analysis of foreign flow into the countryhas revealed that only a limited number of multinationalsor their subsidiaries have made Foreign Direct Investment(FDI) in the country, added to this problem insufficientinflow of FDI is the inability to retain the foreign directinvestment which has already come into the country andalso what effect does FDI have on Gross DomesticProduct (GDP), Inflation rate, Exchange rate, Balanceof Payments (BOP), etc. However the focus of this paperis on the effect of inflation and GDP on FDI in India isanalyzed and the following hypotheses are framed.H01 = There is no significant difference between GDP

and FDIH02 = There is no significant difference between

Inflation and FDI

Methodology of the StudyThis study is purely based on secondary data. The datawere collected from the websites of World BankIndicators, Money Control, etc for the time period of 2000– 2015. A Multiple Linear Regression model is used tocheck the significant impact of inflation and GDP onFDI. The model is as follows.ΔFDI = α+ β1 GDP + β2 INF+ •Where,ΔFDI = Change in FDIGDP = Gross domestic ProductINF = Inflation RateIn this model FDI is considered as dependent variablewhereas GDP and Inflation rate are taken as independentvariables.

Data Analysis and Result PresentationThe regression analysis and tests of hypotheses areconducted at 5% significance level. After running therelevant regression model, the following results wereobtained and are presented below.

Table - 1 : Regression Statistics

R Square 0.586

Standard Error 0.548

F Statistics 8.507

P value 0.005Source: Computed

Table l explains the regression statistics and it suggeststhat the overall model is significant at 1 per cent level ofsignificance because its P value is 0.005(<0.01). Further,the R square result shows that 58.6 per cent of variationin FDI is explained. F statistic is used to determine thesignificance of overall model in regression analysis. Thevalue of F statistics is 8.507.

Table - 2 : Independent Variables CoefficientStatistics

Intercept (0.058) 0.622 (0.098) 0.928

GDP 0.025 0.076 0.331 0.746

Inflation 0.208 0.052 4.009 0.002

Coefficients StandardError T Statistics P-value

Source: Computed

Table 2 reveals the regression statistics of theindependent variables coefficient. The results indicatethat the GDP coefficient has a positive but insignificantrelationship with change in foreign direct investment. Onthe other hand, inflation coefficient has a positive andsignificant relationship with FDI. Therefore, H01isaccepted while H02is rejected.

ConclusionThe impression which is very normal among theeconomist and practitioners that if the country’s grossdomestic product increases then it will give a positivesignal to the foreign direct investment of the country.This study also comes to the same conclusion and theresults are evident that the change in foreign directinvestment is due to the country’s GDP and inflation.FDI has direct relation with inflation and also positiverelation with GDP, which means that with every increasein GDP rate, FDI will increase and with every increasein inflation rate, FDI will increase. The increase flow ofFDI in a country has given a major boost to the country’seconomy which will help to increase GDP rate. Hence,



suitable measures must be taken in order to ensure thatthe flow of FDI in the country continues to grow.

Reference• Qaiser Abbas, Salman Akbar, Ali Shan Nasir, Hafiz

Aman Ullah, Muhammad Akram Naseen (2011), “Impact of Foreign Direct Investment on EconomicGrowth”, Global Journal of Management and BusinessResearch, Volume 11 issue 8 version 1.0, August2011.

• Alex Ehimare Omankhanlen (2011), “The Effect ofExchange Rate and Inflation on Foreign DirectInvestment and its Relationship with EconomicGrowth in Nigeria”,https://www.researchgate.net/publication/241755642.

• Patrick Enu, Emmanuel Dodzi k. Havi, PrudenceAttabobeng (2013), “Impact of MacroeconomicFactors on Foreign Direct Investment in Ghana”,European Scientific Journal, Vol.9, No. 28, ISSN:1857-7881.

• Thinomuonga Moyo (2013), “The Impact of ForeignDirect Investment on Economic Growth: The caseof Zimbabwe (2009-2012)”, International Journal ofEconomics, Finance and Management Sciences, Vol.1, n o. 6, 2013, PP. 323-329.

• Dea Vibby Irsania and Ana Noveria (2014), “TheRelationship among Foreign Direct Investment,Inflation Rate, Unemployment Rate and ExchangeRate to Economic Growth in Indonesia”, Journal ofBusiness and Management, Vol.3, No. 5, 2014: 499-510.



ASSESSMENT OF QUALITY OF WORK LIFE AND MOTIVATION ONEMPLOYEE ENGAGEMENT TOWARDS ENHANCING EMPLOYEE

RETENTION AMONG NURSES IN PRIVATE HOSPITALS, COIMBATORE

1. Research Scholar, Avinashilingam School of Management Technology, Avinashilingam Institute for Home Science andHigher Education for Women, Coimbatore.

2. Asst. Professor (SG), Avinashilingam School of Management Technology, Avinashilingam Institute for Home Science andHigher Education for Women, Coimbatore.

AbstractThe paper focuses on nurses who are the nucleus of health care delivery system. It is intended to understand theQuality of Work Life (QWL) of nursing community and Employee Motivation at hospitals. Based on the Quality of WorkLife and Employee Motivation (EM), Employee Engagement (EE) is studied. Further, the impact of EmployeeEngagement on Employee Retention (ER) is explored. In almost all countries, nurses constitute the largest healthcare provider group which delivers the highest percentage of patient care, both preventive and curative. People areconsidered as the key resource in each and every area. HRM is particularly concerned with the people dimension inmanagement of an organization. People are the backbone to an organization. Nurses are the largest and importanthuman resources in Health Care Delivery System. They have a pivotal role in providing comprehensive health careand medical services at all levels.

Keywords: Quality of Work Life, Employee Engagement, Employee Motivation, Employee Retention, Health CareSystem.

Dr. J. Arthi2B. Sugirtha 1

Determinants considered in the study based on overall Mean Score Value. It is known that μ is the mean of the population. ó is theStandard deviation of the population set. The absolutevalue of Z represents the distance between the raw scoreand the population mean in units of the standard deviation.Z is negative when the raw score is below the mean,positive when above. Here in this table the Mean ScoreValue of each and every dimension is stated.Quality of Work life is a very broad concept with manydifferent perceptions about it and therefore difficult toidentify. QWL is the quality of relationship betweenemployees and the total work environment. QWL need tobalance between organization objective and employee needs.A cheerful and healthy employee will give better yield,craft good decisions and positively contribute to theorganizational goal. An assured good quality of work lifenot only attracts young and new talent but also retainthe existing experienced talent.

Table no - 1 : Overall Mean Score Value

Quality of Work Life 2.69

Employee Engagement 2.43

Employee Retention 2.43

Employee Motivation 2.14

Determinants Mean Score Value

Based on MSV, it is understood that QWL (2.14), followedby Employee Engagement (2.43) has scored a lessmean value, Employee Retention (2.43) and EmployeeMotivation (2.14).

Quality of Work Life, Employee Motivation,Employee Engagement and Employee Retentionacross GenderThe Mean values, explore the overall perception aboutall factors as well as the difference that exists withinand among the samples considered for the study in QWL,Employee Motivation, Employee Engagement andEmployee Retention across different demographicvariables like Gender, Age, Education, Income.The Mean and Standard Deviation helps to vividlyunderstand the factor with maximum Means Score ineach category of QWL, Employee Motivation, EmployeeEngagement and Employee Retention.

Sengin (2003) supported Hinshaw and Atwood (1984),who are in a comprehensive literature review identifiedvariables that influence nurse job satisfaction. Thesefactors included: demographic variables: age, education,experience, income, family type. Recent researchidentified new variables that influence nurse jobsatisfaction such as environment and job settings (Shaver& Lacey 2003). Non- supportive work environmentsincrease nurses’ stress and job dissatisfaction (Sims2003), which negatively influence nurse retention.



In gender wise classification, majority of the respondents are female (164) than male (50). In Health Care sector,female nurses play a dominant role.

Table No - 2 : Gender with Quality of Work Life, Employee Motivation, Employee Engagement andEmployee Retention- Mean Score Value

Determinants

QWL Working Condition 2.23 .284 2.27 .463

Skill utilisation 2.36 .370 2.09 .429

Compensation 2.30 .445 2.51 .505

Opportunities at Work 2.38 .441 2.40 .450

Social Integration 2.73 .210 2.66 .259

Constitutionalism 2.52 .722 2.78 .722

Total life space 3.02 .745 2.91 .689

Employee Engagement Compensation and Benefits 2.08 .284 2.29 .433

Job Characteristics 2.16 .190 2.29 .378

Perceived Organisation Support 2.12 .277 2.21 .344

Learning and development 2.32 .028 2.43 .201

Communication 2.06 .269 2.02 .407

Organisation Fit 2.16 .502 2.33 .463

Intention to Quit 3.04 .709 3.64 .688

Employee Motivation Basic Needs 2.72 .546 2.54 .583

Safety 2.03 .252 2.00 .462

Esteem 2.00 .303 1.89 .462

Self actualization 1.91 .445 2.09 .472

Employee Retention Health and safety 2.41 .367 2.33 .444

Family Welfare 2.64 .408 2.62 .496

Rewards and recognition 2.50 .516 2.26 .491

Employee Job Satisfaction 2.28 .453 2.46 .447

N 50 164

Male Female

Mean SD Mean SD

Quality of Work Life, Employee Engagement, Employee Motivation and Employee retention across AgeAge is one of the important demographic details for this study. Age of the Respondents is classified into below 20years, 21 – 30 years, 31 – 40 years, 41 – 50 years, and above 50 years.



Table No - 3 : Quality of Work Life, Employee Engagement, and Employee Motivation and Employeeretention across Age- Mean Score Value

Factors

Quality of Work Life

Working conditions 2.12 .331 2.32 .512 2.20 .384 2.30 .444 2.41 .366

Skill utilization 2.06 .478 2.09 .426 2.22 .391 2.35 .380 1.98 .434

Compensation 2.23 .436 2.54 .481 2.40 .481 2.58 .559 2.58 .483

Opportunities at work 2.29 .501 2.49 .493 2.37 .411 2.43 .414 2.34 .381

Social integration 2.68 .143 2.63 .297 2.75 .223 2.67 .237 2.63 .301

Constitutionalism 2.66 .749 2.53 .723 2.77 .733 2.99 .577 2.75 .804

Total life space 2.97 .785 2.98 .590 3.09 .747 2.79 .539 2.56 .764

Employee Engagement

Compensation Benefits 1.98 .324 2.15 .519 2.28 .347 2.28 .248 2.58 .320

Job Characteristics 2.25 .275 2.36 .357 2.24 .366 2.22 .260 2.19 .434

Perceived Org Support 2.00 .310 2.25 .379 2.18 .284 2.32 .323 2.19 .279

Learning & development 2.32 .042 2.42 .232 2.38 .102 2.37 .161 2.59 .234

Communication 1.85 .242 2.08 .470 2.07 .384 2.08 .262 1.96 .365

Person Org Fit 2.12 .549 2.33 .444 2.28 .491 2.40 .552 2.30 .189

Intent Quit 3.21 .676 3.58 .824 3.57 .668 3.10 .689 4.02 .364

Employee Motivation

Basic needs 2.43 .468 2.51 .573 2.87 .490 2.72 .553 2.03 .488

Safety 2.03 .300 2.05 .495 1.90 .403 2.09 .409 2.02 .426

Esteem 1.83 .408 1.87 .282 1.95 .511 2.00 .405 1.97 .530

Self Actualization 1.90 .291 2.15 .564 2.03 .460 2.19 .486 1.87 .340

Employee Retention

Health and Safety 2.22 .489 2.39 .332 2.44 .393 2.46 .378 2.07 .527

Family welfare measures 2.43 .343 2.68 .545 2.61 .470 2.75 .484 2.66 .411

Rewards and recognitions 2.23 .551 2.39 .526 2.22 .495 2.50 .457 2.26 .429

Employee job satisfaction 2.20 .518 2.45 .443 2.40 .446 2.54 .499 2.53 .211

Below 20 yrs

Mean SD

21-30 yrs 31-40 yrs 41-50 yrs Above 50 yrs

Mean SD Mean SD Mean SD Mean SD

Nurses under 20 years feel that Total Life Space as important contributor for Quality of Work Life, basic needs underMotivation, Family welfare as a retention factor. In case of 21-30 years, the same feelings are the same as theprevious age group.

Irrespective of age group, under motivation it is Basic needs, under Employee Engagement it is Intention to quithave been projected as results. The hospital to realize engagement as a continuous process and it involves theemotion of the nurses. Intention to Quit is associated Employee Engagement as it helps to understood actualturnover behaviours. Nurses feel to quit from the hospitals when they are not satisfied.

QWL, Employee Engagement, Employee Motivation and Employee retention across IncomeIncome of an individual determines the life style of the family. If the employees are given adequate compensationonly than they can lead better and happy life. Income plays a vital role in everybody’s life. The research considersincome as a major base factor to understand the emotion of the samples. It is to be noted that employees feelsatisfied in an organization if they are given fair and adequate compensation.



Table No - 4 : QWL, Employee Engagement, Employee Motivation and Employee Retention acrossIncome

Factors




Compensation 2.47 .514 2.56 .435 2.38 .484 2.53 .586 2.47 .391




Total life space 2.86 .679 2.68 .723 3.09 .778 2.78 .519 3.23 .496

Employee engagement





Communication 1.86 .284 2.01 .310 1.99 .367 2.14 .284 2.42 .597

Person Org Fit 2.18 .508 2.16 .388 2.33 .455 2.36 .538 2.44 .409

Intent Quit 3.36 .815 3.59 .717 3.48 .699 3.39 .777 4.03 .285

Employee Motivation

Basic needs 2.36 .501 2.53 .798 2.75 .451 2.64 .612 2.33 .483

Safety 1.96 .387 2.20 .378 2.04 .378 1.99 .465 1.69 .496

Esteem 1.83 .380 2.13 .353 1.87 .475 1.94 .405 1.92 .457


Employee Retention





5000-7000

Mean SD

8000-10000 11000-13000 14000- 16000 17000-20000


The Mean Score analysis states that Total Life Space under QWL, Intent to Quit under Employee Engagement,Basic needs under Motivation and Family welfare under Employee Engagement to have maximum scoring.

Quality of Work Life, Employee Engagement, Employee Motivation and Employee Retention acrossEducationNurses undergo certificate, diploma, UG, PG, and professional degree. These nurses are to be registered withIndian Nursing Council to practice nursing as a career.It is to be understood that educational background showconstitutionalism, Total Life Space under Quality of Work Life, Intent to quit based on maximum Mean Score Value.



Table No - 5 : Quality of Work Life, Employee Engagement, Employee Motivation and EmployeeRetention across Education

Factors




Compensation 2.74 .446 2.36 .464 2.42 .506 2.61 .359 2.54 .735




Total life space 2.46 .465 3.04 .765 2.89 .712 3.20 .561 2.76 .460

Employee engagement





Communication 1.98 .339 1.97 .374 1.97 .288 2.08 .446 2.58 .348

Person Org Fit 2.49 .355 2.18 .412 2.19 .511 2.65 .430 2.38 .432

Intent Quit 3.66 .666 3.09 .608 3.55 .661 3.84 .813 4.38 .342

Employee Motivation

Basic needs 2.77 .558 2.62 .575 2.58 .596 2.43 .567 2.44 .520

Safety 2.10 .399 2.04 .363 2.09 .405 1.79 .347 1.69 .673

Esteem 1.78 .427 1.97 .452 1.93 .417 1.94 .463 1.69 .223


Employee Retention





Diploma

Mean SD

UG PG ProfessionalDegree Others


Demographic ProfileThe classification of respondents based on gender include male (50), female (164). It is found that in this category,female respondents are more.The classification of respondents based on age include below 20 years, 21 to 30 years, 31 to 40 years, above 50years. It is found that in this category, at the age of 31 to 41 years, there are more respondents.The classification of respondents based on education includes Diploma, UG, PG, Professional Degree and OtherCategory. It is found that in this category, PG qualified is more.Percentage of respondents based on their demographic profile is given in the below table.



Table No - 6 : Demographic Profile

Descriptions

Gender

Male 23.4

Female 76.6

Age

Below 20 years 15.4

21- 30 years 26.2

31- 40 years 30.8

41- 50 years 15.4

Above 50 years 12.2

Education

Diploma 9.8

UG 34.6

PG 36

Professional Degree 13.1

Others 6.5

Income (in Rs)

5000-7000 21

8000-10000 15

11000-13000 36.9

14000-16000 19.2

17000-20000 7.9

Percentage of Respondents

The classification of respondents based on incomeincludes 5000 to 7000, 8000 to 10000, 11000 to 13000,14000 to 16000, and 17000 to 20000. It is found that inthis category, female respondents are more.

ConclusionQuality of work life concept has gained momentumrecently and researches are going on worldwide to findout inputs for framing effective QWL strategies. A happyworker can concentrate on work and give moreproductivity. It ensures greater participation andinvolvement of workers makes work easier and improvesquality and efficiency. An assured good QWL not onlyattracts young and new talent but also retain the existingexperienced talent. There are many nurses who spenttheir life to serve the public and safeguard the lives ofthe patients without expecting any benefit.

India witnesses skilled nurses migrating to othercountries, even though we have shortage nurses.Physical, Working conditions, promotional areas haveto be improved.

Nurses can be retained through empowerment programs,self leadership, increasing job satisfaction, PersonOrganization Fit, Perceived Organizational Support,better QWL. It may be understood that such positiveenvironment is associated with a number of positiveorganizational outcomes.

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Methodology Methods and Techniques New AgeInternational Printers 4 (31)

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• Cascio, Wayne F (2010), “Managing HumanResources: productivity, Quality of work life, Profits,MCG raw Hill/Irwin, New York pp 210-232.

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• Lambert, E. G., & Paoline, E. A. (2008). The Influence of Individual, Job, and Organizational Characteristics onCorrectional Staff Job Stress, Job Satisfaction, and Organizational Commitment. Criminal Justice Review.



ANEMPIRICAL STUDY ON SHARE TRADERS BEHAVIOUR TOWARDSSECURITY ANALYSIS AND PORTFOLIO MANAGEMENTWITH SPECIAL

REFERENCE TO COIMBATORE CITY

1. Assistant Professor (Sr. Gr.), Department of Management, Sri Ramakrishna Institute of Technology, Coimbatore.2. Second Year MBA, Department of Management, Sri Ramakrishna Institute of Technology, Coimbatore,

AbstractIn the Indian financial market, the stock market creates huge opportunities for the wealth creation of the share tradersinclusive of retail traders. In addition to this, Online Share Trading was introduced to bring the transparency, speed,accuracy and convenience to them to make use of this facility and create more profit. However the share traders musthave to understand the basics of share trading to maintain and increase their money in the share market. This articleattempts to examine the characteristics of the share traders and capture whether or not they follow Security Analysisand Portfolio Management (SAPM) in their trading. A tool was used to assess the characteristics of the individual sharetraders and their knowledge on SAPM. Data were collected from 120 individual share traders using a self-administratedquestionnaire. Analyses such as descriptive statistical analysis, Frequency statistical analysis and cross tabulationtests were conducted. The results of these quantitative assessments about the characteristics of individual sharetraders provide great insights into how the individual share traders carry out the trading. Thus, the findings of this studyprovides suggestions for stock brokerage firms to understand the trading behavior of the individual investors andimprove them by conducting various awareness programmers on Share Trading and SAPM to enhance the wealth ofshare traders.

Keywords: Indian Stock Market, Stock Brokerage Firms ,Retail Investors, Share Trading, Security Analysis, PortfolioManagement, Share traders Characteristics.

Sabariga E2Syamsundar P1

IntroductionThe advent of online share trading is one of the mostnotable recent changes in the Indian stock market after2000. As per SEBI Bulletin report, 2016, more than 96.40lakhs of online brokerage accounts in the year 2015-16shooting up from just 1.23 lakhs in 2000-01. Online sharetrading was introduced to bring the transparency, speedand convenience in transacting to every share trader tocreate wealthy transactions in Indian share market. InIndia investing money in the share market is increasing.However the investors are not in the long run. In suchinvestments both rational and emotional responses areinvolved. In India, after 2000 the growth of the marketcapitalization, brokers and sub brokers and share tradershave increased in the Indian financial market. The retailinvestors play a major role in the financial market andthe financial economy of the country. However theregulating body of the Stock Market has the responsibilityto protect the retail investors ‘investment from huge loss.In India, SEBI doing this activity continuously and keenlymonitoring the activities of the Stock Exchanges.However SEBI needs more information in this regard.For this purpose this article attempts to measure thecharacteristics and awareness about the tools availablefor the share traders to make profit.

In normal phenomena characteristics reveal what typeof investors are they? In addition, this article attemptsto identify the share traders ‘usage and awareness ofSAPM. However in India, research in SAPM is very few.In India SEBI takes many initiatives to educate theinvestors to protect them from fraudulent trade practicesand the safest trading practices by conducting variousworkshops and also SEBI spend huge amount in thisregard. We attempt to induce the fact that if the sharetraders maintain proper SAPM in their trading practicesdefinitely it leads to making profit but only thing is theyhave to wait and understand the concept of SAPM. Retailinvestors need skills to carry out extensive evaluationand analysis before trading. In practice they just tradeand make profit but not in a continuous manner.

The theory of Security Analysis and PortfolioManagement (SAPM), states that the share traders whopractices SAPM before buying and selling of securitiescan have the chance to make profit and avoid hugelosses. This will lead to an increased scope in examiningthe share traders’behaviour on SAPM.

As per the SEBI bulletin record, the number of sto70ckbrokers and the number of sub brokers in stock marketsare increasing enormously on one side whereas on the



other side, the increase in the number of investors isnot up to the mark. Table 1 shows the registered clientsfor stock trading and Table 2 represents registeredbrokers and sub brokers in SEBI. To bring more numberof share traders into the stock market the brokers andsub brokers have to strongly create awareness aboutthe importance of SAPM to the investors. This paperwill contribute to the healthy functioning of the Indianstock market which in turn leads to development in theIndian economy.

Table - 1 : Registered Clients For Stock Trading

Source: NSE Fact Book – 2016

Table - 2 : SEBI Registered Brokers And SubBrokers

2000 - 01 9,782 9,957

2001 - 02 9,687 12,208

2002 - 03 9,519 13,291

2003 - 04 9,493 13,416

2004 - 05 9,128 13,684

2005 - 06 9,335 23,479

2006 - 07 9,443 27,541

2007 - 08 9,487 44,074

2008 - 09 9,628 62,471

Year Registered Brokers Registered SubBrokers

SOURCE: SEBI Bulletin July - 2016

Theoretical Background - Security Analysis andPortfolio Management Security AnalysisIt is the method of examining the risk-returncharacteristics of individual securities. The logic ininvestment is to buy underpriced securities and selloverpriced securities, but the problem lies in identifyingunderpriced and overpriced securities. Fundamental andtechnical analyses are two approaches for securityanalysis. Fundamental analysis focuses on the factorsaffecting the company such as earnings per share,dividend pay-out ratio, competitors, market share etc.This analysis also includes the factors affecting theindustry in which the company belongs. This approachhelps in identifying the companies which arefundamentally strong in the industry and whose sharesare worthy to be included in the investors’ portfolio. Onthe other hand, Technical analysis portrays that the shareprice movements are systematic and exhibit consistentpatterns. The process involves studying the pastmovements in the share prices to identify trends andpatterns and then predicting the future price movements.This analyses concentration on price movements thanfundamentals of shares.

Portfolio ManagementPortfolio is a group of securities, held together for aninvestment. Investors choose a group of securities ratherthan in a single security to avoid heavy losses and tominimize the risk. Security analysis provides informationabout the various securities desirable for investment.From this set of securities many portfolios can beconstructed, also by varying the proportion of investmentin each security. Portfolio management consists ofportfolio selection, revision and evaluation. The goal ofselection is to create a portfolio that gives high returnsat a given level of risk. In revision, the portfolio has to bemonitored constantly to ensure optimal returns.Evaluation is to revise the portfolio periodically to earnmaximum returns at minimum risks.

The advent of technology has made the whole processof security analysis and portfolio management quiteeasy. A technology device can take in huge volumes ofdata and perform the computations accurately. Thus the

2009 - 10 9,772 75,378

2010 - 11 10,203 83,808

2011 - 12 10,268 77,141

2012 - 13 10,128 70,242

2013 - 14 9,411 51,885

2014 - 15 6,147 42,351

2015 - 16 3,199 34,942

2000 - 01 1,23,578 7,287.81

2001 - 02 2,31,899 8,138.81

2002 - 03 3,46,420 15,360.71

2003 - 04 4,63,560 37,945.08

2004 - 05 8,49,696 81,033.81

2005 - 06 14,43,291 1,83,428.52

2006 - 07 22,79,098 3,37,524.00

2007 - 08 44,05,134 6,68,399.00

2008 - 09 56,27,789 6,92,789.00

2009 - 10 51,43,705 9,21,380.00

2010 - 11 56,40,513 7,65,271.00

2011 - 12 61,48,447 5,97,430.00

2012 - 13 62,68,798 5,83,073.00

2013 - 14 68,74,574 6,27,478.00

2014 - 15 63,59,312 10,05,984.00

2015 - 16 94,61,175 10,25,706.00

Year Registered Clients Trading Volume(Rs. Crore)



results can be obtained in the desired time and form.However it becomes mandatory that the investors mustgain knowledge about security analysis and PortfolioManagement to Perform Trading in a Wealthy andHealthy Manner.

Literature ReviewVarious studies have been conducted in the foreigncountries to examine the characteristics of the sharetraders and Security Analysis and Portfolio Management.In U.S, Barber and Odean [2001 &2002],discuss in theirstudy how the internet, with its abundance of information,is affecting online investors decisions because of anillusion of knowledge and an illusion of control and in2002, one more study was undertaken and the findingswere that investors make more frequent trades, morerisky trades and make less profit than they did prior toswitching to online trading. Globermn, Roehl, andStandifird [2001]- state how e-commerce has addedadvantage to the retail brokerage business. Brokers arenow online and thus can provide lower costs to theircustomers along with a larger variety of investmentinformation. Vakil and Lu [2005] in their study evaluatedhow the internet has affected the capacity and volatilityof the stock market. Konari Uchida[2006] in Japan,Shiller (2000) and Shefrin (2000)strongly advocate thatstock market is governed by the market informationwhich directly affects the behavior of the investors. Malesare more risk tolerant than females (Hartog, Ferrer-I-Carbonell and Jonker (2002). Investors are classified onthe basis if their investment size, Rajarajan (2000 and2003). Investment Decisions are based on personalanalysis than brokers advice, also current market priceis a better investment indicator for investors thananalysts’ recommendations. Aman Srivastava(2006),Studied the size effect in Indian Stock Market. SanjaySehgal and Vanita Tripathi (2005), stated that Investmentproblem of Individual Investors is more complex than thatof Institutions. Nicolo G. Torre and Andrew Rudd(2004).Investment in securities Market requires the study ofthe relationship between risks and returns. Manjunathaand Mallikarjunappa(2006). The Sample respondentsbelieved that technical analysis cold generate superiorprofits. Sanjay Sehgal and Meenakshi Gupta (2006).Investigates the dynamics of individual portfolios in aunique data set containing the disaggregated wealth ofall households in sweden. The evolution of Indian onlineshare trading is used as a technological tool for creatingwealthfor Individual Investors. Syamsundar, andRajendran.(2012).Stock Brokerage Financial ServiceQuality measured by Syamsundar, and Rajendran.(2012)using Servqual Model.

Research MethodologyRetail Investors characteristics and their SAPM weremeasured with a self-administered questionnaire. Thequestionnaire was developed on the basis of

Questionnaire used by Konari Uchida[2006]. As afoundation for questionnaire development, the samequestionnaire was used. The original items were slightlymodified to suit the Indian stock market investors. Inaddition with this two questions were added regardingthe security analysis and portfolio management. Thequestionnaire consisted of three parts. The first part wasdesigned to capture respondents’ demographic profile,which included age, gender, income, occupation andeducation. The second part was designed to know theexperience and method of trading and the final part wasmeasured the trading characteristics and their SAPM.The target population of the survey was the members ofthe Coimbatore Investors Association. Questionnaireswere distributed to 146 share traders after eliminatingambiguous responses, data of 120respondents were usedfor the study.

ResultsFor data analysis various new statistical tools andtechniques are available, even though we cannot eliminatethe basic data analysis such as of Descriptive Analysis,Frequency Analysis, Chi square, and Cross Tabulation willprovides highly meaningful and important results. Wedid the data analysis such as of Descriptive Analysis,Frequency Analysis, and Cross Tabulation for this study.

Table - 3 : Demographic Profile of TheRespondents

AgeBelow 20 8% 8%21-30 52% 60%31-40 21% 81%Above 41 19% 100%

GenderFemale 80% 80%Male 20% 100%

IncomeBelow 10,000 28% 28%10,001-20,000 43% 71%20,001-30,000 22% 93%30,001-40,000 7% 99%Above 40,000 1% 100%

OccupationService 35% 35%Entrepreneur 14% 49%Professional 17% 66%Student 2% 68%Others 32% 100%

EducationSSLC 5% 5%HSC 19% 24%Graduation 46% 70%Post Graduate 27% 97%Others 3% 100%

Items Percentage Cumulative Percentage



Table - 4 : Trading Methods & Experiences of The Respondents

The demographic profiles and the trading methods and experience of the respondents are presented in Table 3 andTable 4. In the sample, 52% of the respondents fall between the age group of 21-30 Years, this figure suggests thator sample consists mainly of investors with relatively long investment careers. 80 % are male respondents and 20%are female respondents. More than 71 % of respondents comes under the income level up to Rs.20,000. About35% of the respondents belong to the service category of occupation and 17 % are professionals. Major portion of therespondents (73%) have completed their graduation.The results shows that the majority of the respondents have less than two years of trading experience, about 62%of respondents use the trading software for trade in online method and 64% of the respondents prefer the brokeroffice as the appropriate place for trading.

Table - 5 : Share Trading Characteristics of The Respondent

Trading ExperienceBelow One Year 19% 19%1-2 Years 34% 53%2-3 Years 12% 65%3-4 Years 9% 74%Above 4 Years 26% 100%

Online Trading ExperienceBelow One Year 50% 50%1-2 Years 28% 78%2-3 Years 9% 87%3-4 Years 4% 91%Above 4 Years 9% 100%

Online Trading MethodSoftware 62% 62%Website (Portal) 37% 99%Others 1% 100%

Place of TradingBroker Office 64% 64%Home 23% 87%Workplace 13% 100%Others - -

Items Percentage Cumulative Percentage

Internet for InvestmentsFrequently useSometimes useNever

Return PreferenceDividendsCapital GainsIndifferent

Provide Expected ReturnHigh Volatility StockLow Volatility StockIndifferent

Refer ChartsRefer Very MuchRefer Very LittleNot at all

Items Percentage CumulativePercentage

Items Percentage CumulativePercentage

32%47%21%

15%66%19%

53%35%12%

39%51%10%

32%79%100%

15%81%100%

53%88%100%

39%90%100%

Picking StocksBy MyselfBroking OfficeFriends

Past Return SatisfactionSatisfiedNeutralUnsatisfied

Security AnalysisFrequently useSometimes useNever

Portfolio Management Frequently useSometimes useNever

68%30%2%

36%52%12%

28%54%18%

19%51%30%

68%98%100%

36%88%100%

28%82%100%

19%70%100%



The results of respondents share trading characteristicsare shown in the Table 5. Regarding Internet usage, abouthalf the respondents frequently or sometimes use onlinetrading. In return preferences, 66% of the respondentsprefer capital gains over dividends, indicates they rushto increase their investment and no time for waiting toget dividend. 53 % of the respondents chose high volatilitystock and 35% of the respondents chose low volatilitystock. This result shows that respondents are highlyrisk-averse.

Refer charts for their trading, 51% refer charts very littleand 10% of the respondents come under the categoryof not at all. This clearly indicates the majority of therespondents have low concern about the indicatorsavailable for trading and the same is useful for to makeprofit. 68% of the respondents doing trading by themthemselves, this results that the respondents rely ontheir own abilities to gather information regarding theshare trading and 30% of the respondents are rely onthe brokers.

For the past return satisfaction 52% of the respondentsare answered neutral category which shows that thetrading done by them-self was not in good manner and12 % are not satisfied in past returns. This means theyneed more knowledge about the share market to do thetrading well and good. Regarding the security analysisconcept in their trading, 18% are not using this conceptand 54% of the respondents are indicated in the categoryof some times use and 28% of the respondents are usingfrequently. 51 % of the respondents are comes underthe category of some times use of portfolio managementand 30% of the respondents are not using the portfoliomanagement. This indicates clearly that they lot ofchance to lose their money in the share market becauseof improper security analysis and portfolio management.

Managerial ImplicationsThis study results clearly proves that the awareness andknowledge about the security analysis and portfoliomanagement is low among the share traders. Eventhough educated people are also not using proper SAPMin their share trading. It’s the high time for the SEBI andthe Stock Brokerage Firms to create the awareness andeducate the investors in SAPM and practice them indoing SAPM by giving proper guidance. SEBI can alsoinclude SAPM as a separate module in the workshopsorganized for the investors. It’s the responsibility of thestock brokerage firms to understand their clients forincreasing their profit and minimizing their loss in sharetrading. In the highly competitive market, the number ofbrokers and the sub brokers are increasing enormously.Hence the stock brokerage firms have to improve thequality of service to improve their business performanceby increasing their client’s performance by profit making.

ConclusionUsing the survey data, we studied the characteristics ofshare traders and their security analysis and portfoliomanagement in share trading. We summarize the mainfindings as follows. Table 1 and 2 indicates the growthrate about the registered clients and brokers for stocktrading in the Indian stock market. The theoretical partalso strongly recommends and proves the importanceof security analysis and portfolio management in sharetrading to maximize the profit. Literature reviews are alsoindicating that there are enormous opportunities for theresearchers to carry out an empirical research in orderto bring out the major challenges and opportunities inthis research area. The basic statistical tools were usedand found meaningful results for this study. And theresults indicates that there is a need of many workshopsand seminars for creating and providing training relatedto security analysis and portfolio management for sharetraders / investors in order to make positive return inIndian securities market. This will help the stock brokersand sub-brokers to retain their existing clients and tobuild confidence among general public for theirinvestment in Indian securities market. Hence, it is ahigh time to organize programmes related to SAPM bythe stock brokerage firms, SEBI and Ministry of Financeof India to bring more investors in securities market.

References• Aman Srivastava (2006), “An Analysis and

Measurement of Confidence of Stock Investors inIndia” International Journal of Theoretical and AppliedFinance. Vol.9, No.5.pp747-775

• Barber, B.M., and T.Odean,(2001a), “Boys Will BeBoys: Gender, Overconfidence, and Common StockInvestment” Quarterly Journal ofEconomics,116pp.261-292.

• Barber, B.M., and T.Odean (2001b), “The Internet andthe Investor” Journal of Economic Perspectives.5pp.41-54.

• Gupta,L.C (2000), “Return on Indian Equity Shares”reviewed in ICFAI Journal of Applied Finance, Vol.6,No.4

• Hartog, J, Ferrer-I_Carbonell, A., & Jonker, N. (2002),“Linking Measured Risk Aversion to IndividualCharacteristics. Kykolos,55(1)pp.3-26

• Konari chida (2006), “The Characteristics of OnlineInvestors” The Journal of Behavioral Finance, Vol.7,No.3, pp-168-177.

• Laurent E. Calvet, John Y. Campbell and Paolo Sodini(2009), “Fight or Flight? Portfolio Rebalancing ByIndividual Investors” The Quarterly Journal ofEconomics, February, pp,301-348.



• Manjunatha and Mallikarjunappa(2006), “AnEmpirical Testing of Risk Factors in the Returns onIndian Capital Market” Decision, Vol.33, No.2,pp.95-108.

• Markowitz, Harry (1991), “Foundations of PortfolioTheory” Les Prix Nobel 1990, 292 (Nobel Foundation,Stockholm)

• Nicolo G. Torre and Andrew Rudd(2004), “The PortfolioManagement Problem of Individual Investors: AQuantitative Perspective” The Journal of WealthManagement, Summer,pp.56-63.

• Rajarajan.V (2000), “Investors’ Lifestyle andInvestment Characteristics”, Finance India, Vol.XIV,No.2, June 2000,pp.465-478.

• Rajarajan.V (2003), “Investors’ Demographics andRisk Bearing Capacity”, Finance India, Vol.XVII, No.2,June 2003,pp.565-576.

• Sanjay Sehgal and Meenakshmi Gupta (2005),“Technical Analysis in the Indian Capital Market. . .A Survey” Decision, Vol.32, No.1,pp.91-122.

• Sanjay Sehgal and Vanita Tripathi (2005), “Size Effectin Indian Stock Market: Some Empirical Evidence”VISION- The Journal of Business Perspective, Vol.9,No.4,pp-27-42

• Sharpe, William F., (1963), “A Simplifier Model forPortfolio Analysis” Management SciencesVol.9.pp.277-293.

• Sherfin, Hersh, (2000), “Beyond Greed and Fear”Harvard Business School Press, Boston.

• Shiller, Robert J., (2000), “Irrational Exuberance”Princeton University Press, Princeton.

• Syamsundar, and Rajendran. (2012), “InvestigatingStock Brokerage Financial Service Quality UsingServqual Model: Special Reference To Hedge Equities,Kochi”International Conference Proceedingsorganized by National Institute of Technology, Trichy.

• Syamsundar, and Rajendran. (2012), “The History andEvolution of Indian Online Share Trading as aTechnological Tool for Sustainable Wealth Creationfor Individual Investors” International ConferenceProceedings organized by Bannari Amman Instituteof Technology.

• Syed Tabassum Sultana (2010), “An Empirical Studyof Indian Individual Investors’’ Behavior” Global Journalof Finance and Management, Vol.2, No.1pp.19-33.



PERFORMANCE MANAGEMENT

1. Assistant Professor, Department of Management Studies, Kalaigar Karunanidhi Institute of Technology, Coimbatore.2. II year MBA, Department of Management Studies, Kalaigar Karunanidhi Institute of Technology, Coimbatore.3. II year MBA, Department of Management Studies, Kalaigar Karunanidhi Institute of Technology, Coimbatore.

AbstractPerformance management (PM) is the method of managing the execution of an organization’s policy. It is how policiesare translated into results. Think of PM as an umbrella concept that integrates familiar business developmentmethodologies. E-reward’s survey of performance management provides a clear picture of the changes thatorganizations are making to support the shift towards a performance management approach, but also to addressproblems such as over complexity and bureaucracy. By establishing clear performance prospect which includesresults, actions and behaviors, it helps the employees in understanding what exactly is expected out of their jobs andsetting of standards help in eliminating those jobs which are of no use any longer. From regular feedback andcoaching, it provides an advantage of diagnosing the problems at an early stage and taking corrective actions.Performance management can be regarded as a upbeat system of managing employee performance for driving theindividuals and the organizations towards desired performance and results. It’s about striking a harmonious alignmentbetween individual and organizational objectives for accomplishment of excellence in performance.

Key words: Performance, bureaucracy, harmonious

R. Shanmathi3M. Muthumani1

IntroductionIn the current day and age, the role of HR has evolvedand developed to new levels. The focus of HR now islargely on the growth of functional strategies to help incorporate strategy implementation. HR works in tandemwith corporate strategies for optimum results, to improveemployee performance, to create harmonious worksurroundings and to involve employees in decisionmaking and planning for the corporate. It is the role ofHR to provide these opportunities and hence it hasclimbed a notch higher from being just a passiveparticipant to an enabler and facilitator. Performancemanagement system in HR is a key component toincrease employee motivation and drive high performance

A performance management process sets theplatform for rewarding excellence by aligning individualemployee accomplishments with the organization’smission and objectives and making the employee andthe organization understand the importance of a specificjob in realizing outcomes. By establishing clearperformance expectations which includes results,actions and behaviors, it helps the employees inunderstanding what exactly is expected out of their jobsand setting of standards help in eliminating those jobswhich are of no use any longer. Through regular feedbackand coaching, it provides an advantage of diagnosingthe problems at an early stage and taking correctiveactions.

Objectives of performance management systemIt is through this process that organizations are able tocreate and sustain a workplaceEnvironment that:• Values improvement• Adapts well to revolutionize• Strives to attain ambitious goals• Encourages thoughts• Promotes learning and professional growth• Engaging and rewarding for workers

Literature reviewBaron (2004) claims that the focus of performancemanagement is on elements such as recognition,constructive feedback, personal development and careeropportunities. However, there will always be an inevitabletension within career management which has to satisfyboth the interests of the organization and those Institutesfor Employment Studies of the employee. Individuals maydemand a career where there is scope for developmentand progression, ‘whilst organizations will need to ensurethey have the right people in the right jobs and are buildinga talent pool for the future’ (CIPD, 2003).

E-reward’s survey (2005) of performance managementprovides a clear picture of the changes that organizationsare making to support the shift towards a performancemanagement approach, but also to address problemssuch as over complexity and bureaucracy. More thantwo-thirds of organizations in the Ereward research had

P. Jenis2



either changed their systems in the past three years orwere planning to make changes in the future.

Finn (2007, cited in Wikina, 2008) also state thatdefining and understanding the performancemanagement process as well as establishing thefoundations of performance management are key stepsin the foundations for successful performancemanagement.

Murphy (2004) equally recognizes that in manyorganizations appraisals are expected to fulfill numerousfunctions including: feedback, coaching, goal setting,skill development, pay determination, legaldocumentation, employee comparison and layoffselection and ‘no performance appraisal system canmeet all these ends’(Murphy, 2004).

In the IRS study (Wolff, 2005) Virgin Mobile reportedgood training of appraisers and appraisees was key tomaking its appraisal system succeed, along with positivecommunication to ‘pitch it as a benefit’. The StudentLoans Company also commented that ‘training ofmanagers in carrying out appraisals is essential to thesuccess of appraisal systems’.

Werner Erhard, Michael C. Jensen, and theircolleagues have developed a new approach to improvingperformance in organizations. Their model stresses howthe constraints imposed by one’s own worldview canimpede cognitive abilities that would otherwise beavailable. Their work delves into the source ofperformance, which is not accessible by mere linearcause-and-effect analysis. They assert that the level ofperformance that people achieve correlates with howwork situations occur to them and that language

Fig. 1

(including what is said and unsaid in conversations) playsa major role in how situations occur to the performer.They assert that substantial gains in performance aremore likely to be achieved by managementunderstanding how employees perceive the world andthen encouraging and implementing changes that makesense to employees’ worldview.

Objectives of Performance ManagementThe overall objective of Performance Management is toenhance the capacity and competence of individuals sothat they exceed organizational expectation and workin a way that effectively and efficiently attains businessstrategic objectives. Performance Management shall notonly provide for business development but also self-development through organizational support andguidance of managers and leaders.

Here are a few of the objective of performancemanagement

• Align the objectives of the individual with those of thebusiness

• Improve Organizational Performance throughassessment of the current performance

• To create a plans for improvement• Provide adequate resources for personal growth&

development• Develop a performance culture with proper feedback• Inform contribution/performance pay decisions• To identify efficiency and effectiveness of individual

Components of an Effective PerformanceManagement System (Fig. 1)



Performance planningThis is the basis of performance evaluation and it is acrucial component of a corporate performancemanagement system. Both the appraiser and thereviewee carry out performance planning at the start ofa work session. Performance budgets are decided aftercommon agreements between the employee andreporting officer.

Performance appraisal and reviewingEmployee’s performance is reviewed usually mid-yearand annual basis. It is based on achievements andaccomplishment of his goals as well as overallperformance. The process combines both self-review aswell as a review by the reporting officer.

Performance feedback and personal counselingThis is a very important step in which the appraiser andemployee sit in discussion. The appraiser talks to theemployee about areas of development and about hislevels of contribution, expected performanceachievement, etc.

Feedback is necessary for each and every process basedon that only top level people can decide whether theemployees need training or not. The appraiser needs toadopt necessary measures to ensure that the employeemeets the company’s prospect levels and that heimproves overall performance.

Rewarding good performanceThe encouragement of an employee is determined whenhis good performance is recognized and rewarded. Itcould openly influence the self-esteem of a person. It isvery sensitive in propelling his achievement orientationtoo.

Performance improvement planningThis calls for setting of goals and deadlines foremployees and also key result areas are identified.

Potential AppraisalCompetency based skill mapping and assessmenttechniques need to be carried out for successfulappraisal. This needs to include essential points suchas job rotation and succession planning.

Key benefits of Performance Management SystemsIn short, successful implementation of businessperformance management systems can result in overallbenefit of the organization, the manager and theemployee.

Organization• It improves overall performance of the organization

and increases employee loyalty and retention.• It improves productivity of the company & It sets clear

accountabilities and overcomes communicationbarriers in the organization.

Manager• It helps to reduce conflicts within the team or

department• It increases efficiency levels of team members and

motivates better, regular high performance.

Employee• It clarifies all the expectations of an employee• It gives him an opportunity for employees to know

their capacities• It contributes to enhanced performance and better

efficiency levels.• Defined proper Career paths and it promotes job

satisfaction and a positive mindset.

The role of performance management systemsThough performance management goes hand in hand,this management strategy plays a greater role.

Articulating organizational expectationsStrategic performance management systems help toarticulate organization’s prospect from each employee.Employees’ performance management systems help toexplain the roles of individual employees, providing themthe KRA indicators in order to connect them with theobjectives and goals of the organization. It helps toidentify the surroundings of an organization.

Measuring performanceEmployee’s performance management is incompletewithout being measured. Key performance indicatormentioned by the organization should be measurable.In addition, the organization needs to create a culture ofmeasuring performance on a regular basis.

Assessing employee skillsThe role of performance management systems does notstop up with reviewing employee performance rather itbegins there. Apart from helping the employees tounderstand their roles, performance managementevaluate skills required by employees. It expressive andmonitors such skill-sets on a regular basis to addressthe gaps, if any. Based on this assessment, theorganization incorporates various learning actions to helpemployees update themselves.



Benefits of employees’ performance management

Fig. 2

Result oriented performancePerformance management focuses on end-result, ratherthan focused on activities and employee behaviors. Infact, many line managers fail to understand the differencebetween employee attitudes and activities and end-results. Often, it has been seen that employeesappearing particularly busy are hardly contributingtowards the organizational goals. Again, many believethat committed employees work very hard and worthinessto be rewarded with high performance rating. However,both the situations can be misleading.

Cultivating a system-based approachA good performance management system follows asystem-based approach. Its key focus is on outcomesand drivers; thus, creating a long-term view for theorganization. For example, in absence of a performancemanagement system, a business while facing economiccrisis is more likely to lay off people for cost cuttingpurposes. It will produce short-term profits, the companyis more likely to experience reduced productivity in nearfuture.

Meaningful measurementsPerformance management not only helps in measuringperformances, but also ensures those measurementshas practical applications. They help in benchmarkingand setting standards by comparing the organization’s

best practices with other companies. Even during internalchange efforts, performance management systems areused for assessment. They also help the organizationto measure its enhancement efforts includingmanagement development, employee training, andquality programs. Based on performance, thismanagement practice ensures equitable and fairtreatment to all the employees.

ConclusionPerformance management can be regarded as a upbeatsystem of managing employee performance for drivingthe individuals and the organizations towards desiredperformance and results. It’s about striking a harmoniousalignment between individual and organizationalobjectives for accomplishment of excellence inperformance.

References• Brown D (1998), ‘A Practical Guide to Competency-

Related Pay’, Financial Times Management, London• E-reward (2005), What is Happening in Performance

Management Today: Part 1 – Survey Findings,Research report No. 32, E-reward

• Murphy T H (2004), Performance Appraisals, ABALabor and Employment Law Section EqualEmployment Opportunity Committee, Mid-wintermeeting, March 24-27

• Murphy K R, Cleveland J N (1995), UnderstandingPerformance Appraisal, Thousand Oaks: Sage

• Mettler T, Rohner P (2009). Performancemanagement in health care: The past, the present,and the future (PDF). International ConferenceBusiness Informatics. Vienna. pp. 699–708.

• Zaffron, Logan, Steve, David (Feb 2009). PerformanceManagement: The Three Laws of Performance:Rewriting the Future of Your Organization and YourLife (1st ed.).

• Madden, Bartley J. (September 2014).Reconstructing Your Worldview. Learning WhatWorks Inc. p. 99. ISBN 0988596938.

• Nielsen, Poul A. 2013. Performance Management,Managerial Authority, and Public ServicePerformance. Journal of Public AdministrationResearch and Theory. Published electronically onJune 2. doi:10.1093/jopart/mut025.

• Swiss, James E. 2005. A framework for assessingincentives in results-based management. PublicAdministration Review 65:592–602.



INFLUENCE OF INTERNET BANKING SERVICES AND ATMs, ON THESELECTION OF PUBLIC SECTOR BANKS WITH SPECIAL REFERENCE

TO COIMBATORE.

1. Professor, CMS Institute of Management Studies, Chinnavedampatti, Coimbatore.2. Assistant Professor,Department of Business Administration with Computer Applications,Kovai Kalaimagal College of

Arts and Science,Coimbatore.

AbstractBanking is becoming more convenient thanks to the Internet, and the future of the banking industry is growingincreasingly digital. Whether discussing the future of retail banking or the future of mobile banking, technology isplaying a larger role in our everyday transactions. The Internet of Things (IoT) is part of this rapid evolution toward thebank of the future, and both consumers and financial institutions need to adapt to these retail and mobile bankingtrends. Retail banks have actually been using an early prototype of an IoT device for decades: the automated tellermachine (ATM). Since their widespread adoption, ATMs and online banking services have been one of the top IoTdevices that make banks far more efficient by removing the need for long wait times to deposit or withdraw the money.There were 2.7 million ATMs installed around the world in 2015, up from 2 million in 2010, and with this surging volumecomes more security features, teller-assist functions, and more. These "smart ATMs" should help drive down costs forbanks by reducing the number of employees needed inside traditional branches. Furthermore, a recent Chasesurvey showed that younger generations are more likely to use ATMs and online banking services than older people.As we move forward, banks are turning toward new IoT technologies to enhance the user experience and reducecosts. Some banks have started using beacons, for example, to send customized offers right to customers' smartphones as soon as they enter the branch. And some ATMs now have live stream video support that allows customersto speak to tellers if they need additional assistance.

Keywords : Retail Banking, online banking, growth of banking services.

C. Subha2Dr. S. A. Mohamed Ali1

IntroductionBanking will continue to evolve as the Internet and theIoT continue to grow in prominence. Those customersand financial institutions that do not stay ahead of theseretail and mobile banking trends will be left behind.Internet plays vital role between banks and customersto receive and deliver information, this form of banking isdescribed as Internet banking (Reserve Bank of India,2001). The process in which internet and computer deviceare used as a medium to facilitate banking services istermed as internet banking. Internet banking is a web-based service that enables the banks authorizedcustomers to access their account information. It permitsthe customers to log on to the banks website with thehelp of banks issued identification and personalidentification number (PIN).

The banking system verifies the user and provides accessto the requested services, the range of products andservice offered by each bank on the internet differs widelyin their content. Most of the banks offer internet bankingand ATM Service as a value-added service. Previouslymany researchers performed research on internet

banking in different parameters in different parts of theglobe and described about the internet banking. Variousresearchers have discussed internet banking conceptin following way: Jun and Cai (2001) defined Internetbanking as the use of Internet as a delivery channel forbanking services which include opening a depositaccount, transferring funds, electronic bill presentmentand payment. Internet banking is an integrated systemthat provides their customers a flexible, convenient andinexpensive platform with integrated services includingonline bank balance checking and savings accounts,money market accounts, certificates of deposit, creditcards, home equity loans, home mortgage, insurance,investment services, portfolio management, and otherrelated financial services (Bhattacherjee, 2001).

According to Siu and Mou (2005) the internet (electronic)banking and ATM service is prominent example ofinformation technology in the service industry; it isconvenient and time saving in comparison to traditionalbanking. In traditional retail banking, one has to visitbranch to conduct banking activity like money transfer,to issue cheque book, DD etc. but with the use of internetin banking, user can conduct these activities from any



part of the globe, it requires internet connection andcomputer only. Apart from these activities user canpurchase/sell, pay bills etc. from any convenient place.

This result in growth in the internet banking users andusage of ATMs , almost all banks i.e. private, public andforeign banks are providing this facility to their customer.Banks also advertise or may say promote this serviceamong the customers.

Review of LiteratureBalwinder Singh and Pooja Malhotra (2014) he paperpresents data, drawn from a survey of commercial bankswebsites, on the number of commercial banks that offerInternet banking and on the products and services theyoffer. It investigates the profile of commercial banks thatoffer Internet banking, using univariate statisticalanalysis, relative to other commercial banks with respectto profitability, cost efficiency, and other characteristics.By the end of first quarter, 2004, differences betweenInternet and non-Internet banks had begun to emerge infunding, in sources of income and expenditures and inmeasures of performance. It was also found that theprofitability and offering of Internet banking does not haveany significant correlation.

Jayshree Chavan (2013) paper discusses somechallenges in an emerging economy. Paper concludedthat one of the benefits that banks experience when usingebanking is increased customer satisfaction. This dueto that customers may access their accounts whenever,from anywhere, and they get involved more, this creatingrelationships with banks. Banks should provide theircustomers with convenience, meaning offering servicethrough several distribution channels (ATM, Internet,physical branches) and have more functions availableonline.

Rajpreet Kaur Jassal et. el (2013) This paper aims toexplains about the reason behind the security breachesand the participation of both customers and the banksto enable the hackers or crackers to access othersnetwork. The present study aims to find various types offlaws in the security of online banking those results inloss of money of account holders and financialinstitutions. Security breaches are not only because ofbanks faults and banks inadequate police but customersare equally responsible for it, because customer sawareness regarding security is equally important.

Roshanlal and R saluja (2012) The progress in e-bankingin Indian banking industry is measured through variousparameters such as Computerization of branches,Automated Teller Machines, Transactions through RetailElectronic Payment Methods etc. Statistical andmathematical tools such as simple growth rate,percentages and averages etc are used. The paper also

highlights the challenges faced by Indian banks inadoption of technology and recommendations are madeto tackle these challenges. The paper concludes that inyears to come e- banking will not only be acceptablemode of banking but preferred mode of banking.

Vikas Chauhan and vipin Choudhary (2015) The presentpaper attempts to understand the concept of internetbanking and ATM services, as well as study the benefitof internet banking from perspective of consumers asWell as banks. Further, this paper discusses thechallenges and opportunities associated with the internetbanking and ATM services in Indian context. Thediscussion Concludes that Concept of Internet bankingand ATM service is slowly gaining Acceptance in IndianScenario and Efforts are Being made by governmentAgencies to make it more Popular among consumers.

Statement of ProblemEven though the internet banking services and the ATMservices are extremely useful services to bankcustomers, at times they can be very frustrating to useand therefore there is a lot of room for improvement inthe interface design. The interface enablescommunication between the user and the machine.Therefore good user interface design is imperative forhigh usability levels. often there are problems orinconvenience experienced when using internet bankingservices and ATM services. Some of the problemsinclude:• Network goes offline and services become unavailable• Inability to see the required information due to

hardware failure.• Wrongly inserting the ATM card / wrong user ID or

password/ PIN numbers• Problems with the transaction of amount due to bank

policies• Difficulty in understanding the instruction to use the

internet banking \ ATM services• Waiting in queue to use the ATM services / Time

taken for the access on Internet banking services.

Objectives1. To study the general awareness of the customers

on internet banking and ATM services offered2. To find out, whether the internet banking and ATM

services influence the banking3. To find out the customer opinion about the future

improvements in internet banking and ATM services4. To ascertain the factors related to internet banking

and ATM service that influence the Customers inpreferring the particular bank



Research MethodologyThe population defined for the study is from the branch customers whose accounts are entitled to internet bankingservices and ATM services. For the study four banks of Coimbatore region has been chosen namely Indian OverseasBank, State Bank of India, State Bank of Hyderabad, and Indian Bank.Descriptive and exploratory type of research was used for the study, data was collected through structuredquestionnaire from400 bank customers. The data was collected based on convenience sampling. The statisticaltools that were used in this study for analysis are• Simple percentage analysis• Chi – square test

HypothesisAwareness about the ATM and Internet banking services shall impact selection of Banks.

Data Analysis and Findings

Fig. 2 : Occupation of respondents

237

163

0

50

100

150

200

250

Male Female

Num

ber o

f res

pond

ents

Gender

Gender of respondents

42%

21%3%

34%

Occupation of respondents

Professionals

Business

Daily wage workers

Students

Fig. 1 : Gender of respondents

Table - 1 : Information about the usage and awareness of ATM service

Information about the usuage and awareness of ATM and Internet banking service

Usuage and awareness about ATM service Yes No

Usage of ATM for withdrawal of cash 100% 0%

To check and print mini statement of accounts 69.2% 30.8%

To check account balance 94% 6%

Does ATM have daily cash withdrawal limit? 21% 79%

Is ATMs operating 24 X7? 94.6% 5.4%

Usage of ATM for cash and Cheque deposit 8.3% 91.7%

Is ATMs works without an error? 86.8% 13.2%

Availability of required Cash 52% 48%

Is there any limitations in cash withdrawal 73.23% 26.77%

Percentage / Frequency

Table - 2 : Information about the usage and awareness of Internet banking service

Information about the usuage and awareness of ATM and Internet banking service

Usuage and awareness about Internet banking service Yes No

Usage of internet banking for transfer of funds 68.2% 31.8%

To check account balance 69.2% 30.8%

Would you use internet banking to pay of bills? 29.3% 70.7%

Percentage / Frequency



Do you use a secured browser? 56% 44%

Would you use virtual keyboards while internet banking? 76.6% 23.4%

Have you ever encountered problems with networks while internet banking? 92.5% 7.5%

Did you find the customer interface is good? 23.2% 76.8

Did you get the support for internet banking related queries from banking personnel? 18.6% 81.4%

Is the Procedure for registering complaints about internet banking is satisfactory? 24.9% 75.1%

From the above table it is inferred that the usage of the ATM service and Internet banking services is quite satisfactory,even though the awareness about the additional facilities offered by ATMs and Internet banking services is not in ansatisfactory level.

CHI Square AnalysisComparison between awareness of ATM and Internet Banking and Selection of Banks by the respondentsNull Hypothesis (H0): There is no significance difference between the awareness of ATM and Internet services andselection of Banks by the respondentsAlternative Hypothesis (H1):There is a significance difference between the awareness of ATM and Internet servicesand selection of Banks by the respondents

Case Processing Summary

Cases

Awareness aboutATM and Internet Banking service * 35 100.0% 0 .0% 35 100.0%

Valid Missing Total

N Percent N Percent N Percent

Awareness about ATM and Internet banking service and selection of banks by the respondents

Chi-Square Tests

Pearson Chi-Square .556a 3 .906

Likelihood Ratio .570 3 .903

N of Valid Cases 32

Value df Asymp. Sig. (2-sided)

Usage of IoT and selection of banks

Awareness about IoT Yes 10 8 4 4 26

No 1 4 2 2 9

Total 11 12 6 6 35

Usage of ATMservice

Usage of InternetBanking Service

TotalUsage of Mobilebanking

Selection of the bankbased on the service

Count

a. 6 cells (75.0%) have expected count less than 5. The minimum expected count is 1.56.

Since the calculated value (0.556) is lesser than the table value (0.9060) at 5% level of significance we accept thenull hypothesis. Hence there is no significance between awareness of ATM and Internet Banking and Selection ofBanks by the respondentsFrom the analysis it is evident that the customers strength is increasing in a regular phase, and as of now thecustomers are not aware of the internet banking and ATM services provided by the banks and its not considered asa significant factor for selecting a bank. Although with passage of time the internet banking and ATM services willbecome the major factors for selection of the banks if proper awareness camps or information are provided for thecustomers.



SuggestionsUntapped Rural Markets:Contributing to 70% of thetotal population is a largely untapped market for bankingsector. In all urban areas banking services entered butonly few big villages have the banks enter, So that thebanks must reach in remaining all villages becausemajority of population still living in rural areas.

Awareness about the Multiple Channels: Banks canoffer awareness programs about the various channelsto access their banking and other services such asATM,Local branches, Telephone/mobile banking, videobanking etc. to increase the banking business.

Internet Banking: It is clear that online finance willpickup and there will be increasing convergence in termsof product offerings banking services, share trading,insurance, loans, based on the data warehousing anddata mining technologies. Anytime anywhere bankingwill become common and will have to upscale, such upscaling could include banks launching separate internetbanking services apart from traditional banking services.

Developing user friendly customer interface with multiplelanguage facility in internet banking will also improvethe satisfaction of banking.Challenges:a) Coping with regulatory reformsb) Development of skill of bank personnelc) Customer awareness and satisfactiond) Changing needs of customerse) Keeping space with technology up gradationf) Lack of common technology standards for mobile

banking

ConclusionIn the past few years, the Indian banking sector hascompletely transformed. The banks are facing manychallenges and many opportunities are available withthe banks. Many financial innovations like ATMs, creditcards, RTGS, debit cards, mobile banking etc. havecompletely changed the face of Indian banking. But stillthere is a need to have more innovative solutions so thatthe challenges can be solved and opportunities can beavailed efficiently by the banks.

References1. Balwinder Singh and Pooja Malhotra (2014) “Adoption

of Internet Banking: An Empirical Investigation ofIndian Banking Sector”, The Journal of InternetBanking and Commerce, ISSN: 1204-5357 [6]

2. Jayshree Chavan (2013), “Internet Banking- Benefitsand Challenges In An Emerging Economy”,International Journal of Research in BusinessManagement (IJRBM)”, Vol. 1, Issue 1, June 2013,19-26 [7]

3. Roshan Lal and Rajni Saluja (2012), “E-Banking: TheIndian Scenario”, Asia Pacific Journal of Marketing &Management Review, ISSN 2319 – 2836 Vol.1 (4),

4. Chauhan & Choudhary (2015), “Internet BankingChallenges and Opportunities in Indian Context”.Apeejay Journal of Management Sciences andTechnology, (ISSN-2347-5005 )

5. Jun, M., & Cai, S. (2001). The key determinants ofinternet banking service quality: a content analysis.International Journal of Bank Marketing, 19(7), 276-291.

6. Siu, N. Y. M ., & Mou, J. C. W. (2005). “Measuringservice quality in internet banking: the case of HongKong”. Journal of International Consumer Marketing,17(4), 99-116.

7. Daniel, E. (1999). Provision of electronic banking inthe UK and the Republic of Ireland. InternationalJournal of Bank Marketing, 17(2), 72-83

8. http://www.businessinsider.com/internet-of-things-banking-retail-mobile-trends-2016-9



FINANCIAL PERFORMANCE OF SELECTED INDIANPHARMACEUTICAL INDUSTRIES

1. Associate Professor –Department of Management, Park’s college, Tirupur.2. Research Scholar- Department of Management, Park’s college, Tirupur.

AbstractThe Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units. It has expendeddrastically in the last two decades. The pharmaceutical and chemical industry in India is an extremely fragmentedmarket with severe price competition and government price control. The Pharmaceutical Industry in India meetsaround 705 of the country?s demand for bulk drugs, drug intermediates, pharmaceutical formulation, chemicals,tablets, orals and injectibles. There are approximately 250 large units and about 8000 small-scale units, which formthe core of the Pharmaceutical Industry in India (including 5 central public sector units) Looking ahead, the worldwidepharma market is estimated to more than double to $1.3 billion by the year 2020.The Indian Pharmaceutical Industryis developing drastically every year. Henceforth, considering the growth and prosperity of pharmaceutical market, thestudy aims to analyze the financial performance of selected pharmaceutical companies, by establishing a closerelationship between the variables in terms of liquidity and profitability. The study use ratios and indicators to measurethe performance along with the help of various statistical tools such as Mean, Standard Deviation, Coefficient ofVariance, Compound Annual Growth Rate, Average Annual Growth Rate,Two Way Anova, and Trend Analysis hasbeen accomplished through EXCEL and SPSS software. and identify the financial health status of the companiesoperating under one of the most dynamic sector in Indian economy. The increase in profitability will not only yieldgreater efficiency but also improve financial performance in future.

A. Rajamani2Dr. Sadika Sulthan1

IntroductionThe Indian pharmaceutical Industry is the world’s third-largest in terms of volume. India has achieved an eminentglobal position in pharma sector. The IndianPharmaceutical Industry has been the front runner in awide range of specialties involving complex drugmanufacture, development, and technology. From simpleheadache pills to sophisticated antibiotics and complexcardiac compounds, almost every type of medicine isnow made indigenously playing a key role in promotingand sustaining development in the vital field of medicines.The pharmaceutical industry in India meets around 70%of the country’s demand for bulk drugs, drugintermediates, pharmaceutical formulation, chemicals,tablets, capsules, orals and injectable.The Indian pharmamarket size is expected to grow to US $85 billion by2020.

Financial performance analysis is the process ofdetermining the operation and financial characteristicsof a firm from accounting and financial statements. Theability of an organization to analyze its financial positionis essential for improving its competitive position inthe market place. Through a careful analysis of itsfinancial performance, the organization can identifyopportunities to improve performance of the department,unit or at the organizational level. Interpretations offinancial statements and their review by business

executives compel them to think ahead and provide forfuture.

Liquidity or Solvency position of a company may beanalyzed on the basis of short term and long termsolvency or liquidity. Liquidity or short term solvencymeans the ability of the enterprise to meet short-termobligations as and when they become due. While longterm solvency means the ability of the enterprise to meetlong-term obligations on the due date. Long term solvencyimplies the capacity of the company to pay off the claimsof debenture holders, preference shareholders and otherlong term creditors. The study concentrates on toascertain the debt repayment capacity of the selectedPharmaceutical companies of India.

From the above point of view the researcher hasundertaken an analysis of financial performance ofselected Indian pharmaceutical companies tounderstand how management of finance plays crucialrole in the growth.

Introduction to Financial Ratio AnalysisThe ratio is a simple arithmetical expression of therelationship of one number to another. The ratio analysisis one of the most powerful tools of financial analysis. Itis the process of establishing and interpreting variousratios. With the help of ratio analysis financial executivescan measure whether the firms at present are financially



healthy or not. They highlight the liquidity, solvency andprofitability of the firm. The researchers divide the financialratios into following groups:

Liquidity Ratio: It is a financial metrics that is used todetermine a company’s ability to pay off its short-termsdebts obligations. Generally, the higher the value of theratio, the larger the margin of safety that the companypossesses to cover short-term debts. The following arethe types of liquidity ratios:• Current ratio• Quick ratio• Absolute liquid ratios• Cash conversion cycle

Solvency Ratio: It is a key metric used to measure anenterprise’s ability to meet its debt and other obligations.The solvency ratio indicates whether a company’s cashflow is sufficient to meet its short-term and long-termliabilities.. The following are the types of solvency ratios:• Debt asset ratio• Capital gearing ratio• Debt equity ratio• Financial leverage ratio• Proprietory ratio• Fixed assets to networth ratios

Activity Ratio: The ratios are used to measure the relativeefficiency of a firm based on its use of itsassets, leverage or other balance sheet items. Thefollowing are the types of activity ratios:• Inventory turnover ratio• Inventory turnover period• Debtors turnover ratios• Average collection period• Creditors turnover ratios• Average payment period• Working capital turnover ratios• Fixed assets turnover ratios• Total assets turnover ratio• Capital turnover ratio

Profitability Ratio: It is a measure of profitability, whichis a way to measure a company’s performance. Thefollowing are the types of profitability ratios:• Gross profit ratio• Operating ratio• Operating profit ratio• Net profit ratio• Return on net worth• Return on capital employed• Earnings per share• Expensesratio

Meaning Of Coefficient of Variance (CV)The coefficient of variation represents the ratio of thestandard deviation to the mean, and it is a useful statisticfor comparing the degree of variation from one data seriesto another, even if the means are drastically differentfrom each other.CV=S.D(σσσσσ)/MEAN(μ)

Meaning Of Compound Annual Growth Rate (CAGR)The compound annual growth rate (CAGR) is the meanannual growth rate of an investment over a specifiedperiod of time longer than one year. It will becalculate compound annual growth rate, divide the valueof an investment at the end of the period in question byits value at the beginning of that period

CAGR =Beginning value

1

- 1# of yearsEnding value

Meaning Of Average Annual Growth Rate (AAGR)The average annual growth rate (AAGR) is the averageincrease in the value of an individual investmentor portfolio over the period of a year. It is calculated bytaking the arithmetic mean of the growth rate over twoannual period.

AAGR = (Growth Rate in Period A + Growth Rate inPeriod B + Growth Rate in Period C + ...GrowthRate in Period X) / Number of Period

Statement of the ProblemThe number of purely Indian pharmaceutical companiesfairly low. Indian pharma industry is mainly operatedas well as controlled by dominant foreign companieshaving subsidiaries in India due to availability of cheaplabor in India at low cost. In india , over 20,000registered drugs manufactures in India sold $9 billionworth of formulations and bulk drugs. 85% of theseformulations were sold in India while over 60% of thebulk drugs were exported.

Over the past decade, pharmaceutical companieshave entered a difficult period where shareholders,the market and regulators have created significantpressures for changes within the industry. Current globalfinancial conditions and the threat of a broadrecession accelerated the timetable for implementingtransformational changes in global organizations, thelargest global pharmaceutical companies recognizethe need for transformational change in theirorganizations, but will need to move swiftly to ensuresustained growth.



The Indian pharmaceutical industry would have to contendwith several challenges particularly• Effects of new product patent• Drug price control• Regulatory reforms• Infrastructure development• Quality management and• Conformance to global standards

For all these challenges financial performance is playinga vital role and a sound financial strength is meet allthese challenges and it is necessary to find out theoverall financial status of the pharmaceutical industry.Indian pharmaceutical companies to understand howmanagement of finance plays crucial role in the growth.

Objectives of the Study1. To evaluate the financial performance of the selected

units of Pharmaceutical industry2. To know the liquidity position of selected

Pharmaceutical companies3. To know the profitability position of selected

Pharmaceutical companies4. To give suggestion for best financing method and

efficient utilization of finance.

Hypotheses of the StudyThe following are the hypotheses examined:1) There is no significant difference in the mean values

of financial ratios between the selectedpharmaceutical companies and the years.

2) There is no significant relationship between the actualvalues and trend values for the net sales, cost ofgoods sold, net profit and earnings per share of theselected pharmaceutical companies.

Scope of the StudyThe study focuses about the financial performance ofselected pharmaceutical companies in India. Thisresearch is based on cross sectional analysis whichmeans comparing of one firm with another firm in thesame industry at the same point in time. Moreover, thefindings of the study provide some guiding principle forminimizing problems associated with the liquidity andsolvency management. The study has taken financial,accounting and quantitative data covering a period offifteen years from the financial year 2000-01 to 2014-15.

Research DesignThe type of research methodology used in this study isdescriptive as well as analytical in nature.

Sample for the study: The universe of Indianpharmaceutical companies consists of Presently there

are 10,500 manufacturing units and over 3,000 pharmacompanies in India, growing at an exceptional rate. Outof top 15 listed companies in BSE, irrespective of theirsize to see to what extent they are profitable, financiallystrength, and liquidable. The selected top mostcompanies is followed by the financial year (i.e.) startingfrom 1stApril to 31st March. The companies are1. Lupin ltd2. Dr.Reddy’s Labs3. Aurobindo pharma4. Sun pharmaceutical industries ltd5. Cardila health care6. Glenmark7. Torrent pharma8. Gsk(glaxo smith kline)9. Ipca labs10. Abbott India ltd11. Biocon12. Sanofi India ltd13. Pfizer14. Novartis India15. Ajantapharma

Period of study:The study covers a period of 15 years covering a periodfrom 2000-01 to 2014-15. The universe of IndianPharmaceutical Companies consists of top 15companies based on net sales (BSE). It is also decidedby taking into consideration of the availability of data

Source of data and Framework of analysis:This study is based mainly on secondary data. The datarelating to the study is obtained from CMIE (Centre forMonitoring Indian Economy) date base, namelyPROWESS. In addition, the annual reports of the samplecompanies, Magazines, Journals were also referred forfinalizing the methodology for the study.

Statistical tools are applied to analyze the financialperformance with help of ratios which are grouped underabove mentioned categories.

Data AnalysisThe financial and statistical analysis approach plays avital role in the financial environment. For the purpose ofthis study, the ratios namely, liquidity ratios, turnoverratios, solvency ratios, profitability ratios and valuationratios has used. The role of statistical tools is importantin analyzing the data and drawing inferences there from.In order to derive the results from the information collectedthrough secondary data, various statistical tools suchas Mean, Standard Deviation, Coefficient ofVariance, Compound Annual Growth Rate, AverageAnnual Growth Rate,Two Way Anova, and TrendAnalysis has been accomplished through EXCEL andSPSS software.



Limitations of the StudyThe analysis and interpretation are based only on the past performance, since there are no standards establishedin the company with which the actual performance could be compared.1. The study covers the period of 15 years between 2000-01 and 2014-15 only. It does not consider the changes

that have been taken place before and after the period2. Only a few factors determining the liquidity, solvency and profitability were considered for the purpose of study3. The results of analysis are subject to some constraints as they are applicable to statistical tool4. The present study is largely based on ratios, which have been its own limitations5. The study covers only selected companies in the industry, therefore it implies that the conclusion drawn are

tentative in nature and firm generalization should be avoided .

Analysis & IntrepretationTable - 1 : ANOVA for Net Sales of Selected Pharmaceutical Companies

S.No Name of the company R2 F-value p-value S/NS

1 Lupin Ltd 0.87 84.15 0.00 S

2 Dr.Reddy's Labs Ltd 0.92 154.09 0.00 S

3 Aurobindo Pharmaltd 0.86 82.17 0.00 S

4 Sun Pharmaceuticals Industries 0.56 16.32 0.00 S

5 Cardila Health Care Ltd 0.88 96.53 0.00 S

6 Glenmark Ltd 0.65 23.88 0.00 S

7 Torrent Pharma Ltd 0.88 91.52 0.00 S

8 Glaxo Smithkline Ltd 0.93 180.51 0.00 S

9 Ipca Labs Ltd 0.92 145.91 0.00 S

10 Abbott India Ltd 0.80 51.49 0.00 S

11 Biocon Ltd 0.96 321.04 0.00 S

12 Sanofi India Ltd 0.90 114.13 0.00 S

13 Pfizer Ltd 0.77 43.61 0.00 S

14 Novartis India Ltd 0.91 129.15 0.00 S

15 Ajanta Pharma Ltd 0.81 54.23 0.00 S

P<0.05 S-Significant NS-Not Significant

The Table implies the ANOVA for net sales of the selected pharmaceutical companies. It is clear from the table thatthere is a significant relationship between the actual and trend values at five percent level of significance .Finally, itis concluded that the null hypothesis is rejected while the alternative hypothesis is accepted .

Table - 2 : ANOVA for Net Profit of Selected Pharmaceutical companies

S.No Name of the company R2 F-value p-value S/NS

1 Lupin Ltd 0.75 38.58 0.00 S

2 Dr.Reddy's Labs Ltd 0.71 31.22 0.00 S

3 Aurobindo Pharmaltd 0.53 14.94 0.00 S

4 Sun Pharmaceuticals Industries 0.06 0.81 0.38 NS

5 Cardila Health Care Ltd 0.80 52.90 0.00 S

6 Glenmark Ltd 0.62 21.24 0.00 S

7 Torrent Pharma Ltd 0.78 47.29 0.00 S



8 Glaxo Smithkline Ltd 0.61 20.58 0.00 S

9 Ipca Labs Ltd 0.79 49.89 0.00 S

10 Abbott India Ltd 0.55 15.94 0.00 S

11 Biocon Ltd 0.61 20.06 0.00 S

12 Sanofi India Ltd 0.86 82.18 0.00 S

13 Pfizer Ltd 0.36 7.31 0.02 S

14 Novartis India Ltd 0.37 7.54 0.02 S

15 Ajanta Pharma Ltd 0.59 18.47 0.00 S

P<0.05 S-Significant NS-Not Significant

The Table implies the ANOVA for net profit of the selected pharmaceutical companies. It is clear from the table thatthere is a significant relationship between the actual and trend values of all the companies except Sun PharmaceuticalsIndustries Ltd at five percent level of significance. Finally, it is concluded that the null hypothesis is rejected whilethe alternative hypothesis is accepted for of all the companies except Sun Pharmaceuticals Industries Ltd at fivepercent level of significance.

Findings• In current ratio, the highest average found is 5.18 in Sun Pharmaceutical Industries Ltd. The lowest consistency

in current ratio is seen in IPCA Ltd since its CV is 0.12. The highest CAGR value is found in Abboth india ltd is10.46 .The highest AAGR value is found in Novartis India Ltd is 26.64. The difference in current ratio is insignificancebetween the years and significance between the companies.

• In quick ratio, the highest average found is 3.74 in Sun Pharmaceutical Industries Ltd. The lowest consistencyis seen in Sun Pharmaceutical Industry Ltd since its CV is 0.11. The highest CAGR value is found in AbbothIndia Ltd is 17.45.The highest AAGR value is found in Novartis India Ltd is 60.65.. The difference in quick ratio isinsignificance between the years and significance between the companies.

• In debt asset ratio, the highest average found is 0.55 in Aurobindo Ltd. The lowest consistency is seen inAurobindo Pharma Ltd since its CV is 0.11. The highest CAGR value is found in Sun Pharmaceutical IndustriesLtd is 3.19.The highest AAGR value is found in Sun Pharmaceutical Industries Ltd is 29.14. The difference indebt asset ratio is significance between the years and significance between the companies.

• In capital gearing ratio, the highest average found is 0.82 in Lupin Ltd. The lowest consistency is seen in IPCALtd since its CV is 0.90. The highest CAGR value is found in Cardila Health Care Ltd is 7.66. The highest AAGRvalue is found in Torrent Pharma Ltd is 67878.04. The difference in capital gearing ratio is significance betweenthe years and significance between the companies.

• In debt equity ratio, the highest average found is 1.43 in Aurobindo Pharma Ltd. The lowest consistency isseen in IPCA Ltd since its CV is 0.25. The highest CAGR value is found in Sun Pharmaceutical Industry Ltd is5.33. The highest AAGR value is found in Sun Pharmaceutical Industry Ltd is 60.87. The difference in debt equityratio is significance between the years and significance between the companies.

• In financial leverage ratio, the highest average found is 2.47 in Glaxo Smith Kline Ltd. The lowest consistencyis seen in Sanofi India Ltd since its CV is 0.11. The highest CAGR value is found in Biocon Ltd is 16.56. Thehighest AAGR value is found in in Torrent Pharma Ltd is 2.86. The difference in financial leverage ratio issignificance between the years and significance between the companies.

• In proprietory ratio, the highest average found is 4.07 in Biocon Ltd. The lowest consistency is seen inDr.Reddy’s Ltd since its CV is 0.15. The highest CAGR value is found in in Sanofi India Ltd is 2.61. The highestAAGR value is found in Sanofi India Ltd is 4.09. The difference in proprietory ratio is significance between theyears and significance between the companies .

• In fixed assets to networth ratio, the highest average found is 0.60 in Ajanta Pharma Ltd. The lowest consistencyis seen in Cardila Health Care Ltd since its CV is 0.18. The highest CAGR value is found in in Pfizer Ltd is 18.75.The highest AAGR value is found in Pfizer Ltd is 209.04. The difference in fixed assets to networth ratio isinsignificance between the years and significance between the companies.



• In inventory turnover ratio, the highest averagefound is 3.95 in Abbott India Ltd. The lowestconsistency is seen in Cardila Health Care Ltd sinceits CV is 0.09. The highest CAGR value is found in inGlenmark Ltd is 4.72. The highest AAGR value isfound in Sun Pharmaceutical Industry Ltd is 9.06.The difference in inventory turnover ratio isinsignificance between the years and significancebetween the companies.

• In debtors turnover ratio, the highest average foundis 10.55 in Glaxo Smith Kline Ltd. The lowestconsistency is seen in IPCA Ltd since its CV is 0.11.The highest CAGR value is found in Ajanta PharmaLtd is 11.17. The highest AAGR value is found inAjanta Pharma Ltd is 13.02. The difference in debtorsturnover ratio is insignificance between the years andsignificance between the companies.

• In creditors turnover ratio, the highest averagefound is 2.55 in Sanofi India Ltd. The lowestconsistency is seen in Torrent Pharma Ltd since itsCV is 0.17. The highest CAGR value is found inAbbott Pharma Ltd is 7.14. The highest AAGR valueis found in Glaxo Smith Kline Ltd is 5.62. Thedifference in creditors turnover ratio is significancebetween the years and significance between thecompanies..

• In working capital turnover ratio, the highestaverage found is 12.18 in Abbott India Ltd. The lowestconsistency is seen in IPCA Ltd since its CV is0.10.. The highest CAGR value is found in AjantaPharma Ltd is 7.74. The highest AAGR value is foundin no one have higher value. The difference in workingcapital turnover ratio is insignificance between theyears and significance between the companies.

• In fixed assets turnover ratio, the highest averagefound is 58.62 in Novartis India Ltd. The lowestconsistency is seen in Cardila Health Care Ltd sinceits CV is 0.16. The highest CAGR value is found inNovartis India Ltd is 24.58. The highest AAGR valueis found in Novartis India Ltd is 40.91. The differencein fixed assets turnover ratio is significance betweenthe years and significance between the companies.

• In total assets turnover ratio, the highest averagefound is 1.42 in Aurobindo Pharma Ltd. The lowestconsistency is seen in IPCA Ltd since its CV is 0.10.The highest CAGR value is found in Ajanta PharmaLtd is 8.79. The highest AAGR value is found inAjanta Pharma Ltd is 11.87. The difference in totalassets turnover ratio is significance between theyears and significance between the companies.

• In capital turnover ratio, the highest average foundis 55 in Glaxo Smith Kline Ltd. The lowestconsistency is seen in Dr.Reddy’s Ltd since its CVis 0.25. The highest CAGR value is found in Biocon

Ltd is 15.87. The highest AAGR value is found inBiocon Ltd is 18.84. The difference in capital turnoverratio is insignificance between the years andsignificance between the companies.

• In gross profit ratio, the highest average found is46.41 in Pfizer Ltd. The lowest consistency is seenin IPCA Ltd since its CV is 0.05. The highest CAGRvalue is found in Glenmark Ltd is 26.80. The highestAAGR value is found in Glenmark Ltd is 33.04. Thedifference in capital turnover ratio is significancebetween the years and significance between thecompanies.

• In operating ratio, the highest average found is442.30 in Novartis India Ltd. The lowest consistencyis seen in IPCA Ltd and Abbott India Ltd since its CVis 0.04. The highest CAGR value is found in GlenmarkLtd is 3.19. The highest AAGR value is found in SunPharmaceutical Industry Ltd is 4.24. The differencein operating ratio is insignificance between the yearsand significance between the companies.

• In net profit ratio, the highest average found is 25.68in Sun Pharmaceutical Industry Ltd. The lowestconsistency is seen in IPCA Ltd and Novartis IndiaLtd since its CV is 0.25. The highest CAGR value isfound Lupin Ltd is 9.32 . The highest AAGR value isfound in Ajanta Pharma Ltd is 96.21. The differencein net profit ratio is insignificance between the yearsand significance between the companies.

• In Return on fixed assets ratio, the highest averagefound is 23.80 in Abbott India Ltd. The lowestconsistency is seen in Cardila Health Care Ltd sinceits CV is 0.25. The highest CAGR value is foundAjanta Pharma Ltd is 18.98. The highest AAGR valueis found in Aurobindo Pharma Ltd is 39.99. Thedifference in Return on fixed assets ratio isinsignificance between the years and significancebetween the companies.

• In return on assets ratio, the highest average foundis 15.34 in Sanofi India Ltd. The lowest consistencyis seen in Cardila Health Care Ltd since its CV is0.29. The highest CAGR value is found AjantaPharma Ltd is 14.81. The highest AAGR value is foundin Ajanta Pharma Ltd is 190.53. The difference inreturn on assets ratio is insignificance between theyears and significance between the companies.

• In return on networth, the highest average found is29.38 in Glaxo Smith Kline Ltd. The lowestconsistency is seen in Torrent Pharma Ltd since itsCV is 0.22. The highest CAGR value is found AjantaPharma Ltd is 15.20. The highest AAGR value is foundin Ajanta Pharma Ltd is 250.66.. The difference inreturn on networth ratio is insignificance between theyears and significance between the companies.



• In return on capital employed, the highest averagefound is 13.99 in Glaxo Smith Kline Ltd. The lowestconsistency is seen in Pfizer Ltd since its CV is0.18. The highest CAGR value is found AjantaPharma Ltd is 17.23. The highest AAGR value is foundin Dr.Reddy’s Ltd is 15.15. The difference in returnon capital employed is significance between theyears and significance between the companies..

• In earnings per share ratio, the highest averagefound 135.98 in Biocon Ltd. The lowest consistencyis seen in Novartis India Ltd since its CV is 0.32.The highest CAGR value is found Sanofi India Ltd is17.36. The highest AAGR value is found in GlenmarkLtd is 22.08. The difference in earnings per shareratio is insignificance between the years andsignificance between the companies

• In expenses ratio, the highest average found 12.51in Ajanta Pharma Ltd. The lowest consistency isseen in Glaxo Smith Kline Ltd since its CV is 0.08.The highest CAGR value is found Novartis India Ltdis 4.52. The highest AAGR value is found in SunPharmaceutical Industry Ltd is 19.96. The differencein expenses ratio is significance between the yearsand significance between the companies

• In price earnings ratio, the highest average found3091.17 in Glaxo Smith Kline Ltd .The lowestconsistency is seen in Novartis India Ltd since itsCV is 0.30. The highest CAGR value is found LupinLtd is 51.57. The highest AAGR value is found inLupin Ltd is 655.79. The difference in price earningsratio is insignificance between the years andsignificance between the companies

• The regression analysis revels that the Liquidity andsolvency ratios has an impact on Profitability(RONW). Therefore, the framed null hypothesis hasbeen rejected. Hence the selected dependentvariables have impacts the profitability of the selectedpharmaceutical companies.

• Regarding net sales, there is a significantrelationship between all the actual and trend valuesin Lupin Ltd, Dr.Reddy’s Ltd, Aurobindo Pharma Ltd,Sun Pharmaceutical Industries Ltd, Cardila HealthCare Ltd, Glenmark Ltd, Torrent Pharma Ltd, GlaxoSmith Kline Ltd, IPCA Ltd, Abbott India Ltd, BioconLtd,Sanofi India Ltd, Pfizer Ltd, Novartis India Ltd,and Ajanta Pharma Ltd .

• Regarding cost of goods sold, there is a significantrelationship between all the actual and trend valuesin Lupin Ltd, Dr.Reddy’s Ltd, Aurobindo Pharma Ltd,Sun Pharmaceutical Industries Ltd, Cardila HealthCare Ltd, Glenmark Ltd, Torrent Pharma Ltd, GlaxoSmith Kline Ltd, IPCA Ltd, Abbott India Ltd, BioconLtd, Sanofi India Ltd, Pfizer Ltd, Novartis India Ltd,and Ajanta Pharma Ltd.

• Regardingnet profit, there is a significant relationshipbetween the actual and trend values in Lupin Ltd,Dr.Reddy’s Ltd, Aurobindo Pharma Ltd, CardilaHealth Care Ltd, Glenmark Ltd, Torrent Pharma Ltd,Glaxo Smith Kline Ltd, IPCA Ltd, Abbott India Ltd,Biocon Ltd, Sanofi India Ltd, Pfizer Ltd, Novartis IndiaLtd, and Ajanta Pharma Ltd while in the case of SunPharmaceutical Industries Ltd there is no significantrelationship between actual and trend values of netprofit.

• Regardingearnings per share, there is a significantrelationship between the actual and trend values inDr.Reddy’s Labs Ltd, Cardila Health Care Ltd, TorrentPharma Ltd, Glaxo Smithkline Ltd, Abbott India Ltd,Sanofi India Ltd, Pfizer Ltd, Novartis India LtdandAjanta Pharma Ltdwhile in the case of Lupin Ltd,Aurobindo Pharma ltd, Sun PharmaceuticalsIndustries ,Glenmark Ltd,Ipca Labs Ltd,Biocon Ltdthere is no significant relationship between actualand trend values of earnings per share.

SuggestionsLiquidity Ratios• The average of current ratio of Cardila Health Care

Ltd, Torrent Pharma Ltd , IPCA Ltd, Abbott India Ltd,Biocon Ltd, Novartis India Ltd which is below the ruleof thumb 2:1 and all the companies have very higherthan the rule of thumb and all other companies aresatisfactorily maintaining their current assets. Henceit is suggested all the Companies such as maintainingmore current asset it’s a sign of maintaining moreinventories in hand, it reveals they too cannot able tomeet their short term obligations properly.To solvethe inventory problem, it is suggested that they haveto improve their inventory control system by using allthe modern sophisticated techniques.

• The average of quick ratio of Lupin Ltd, AurobindoPharma Ltd, Cardila Health Care Ltd, Glenmark Ltd,Torrent Pharma Ltd , IPCA Ltd, Biocon Ltd, NovartisIndia Ltd, Ajanta Pharma Ltd which is below the ruleof thumb 1:1 and all other companies aresatisfactorily maintaining their quick assets. Henceit is suggested that have to focus on maintaining morecash balances to meet their short term obligations.

Solvency Ratios• The average of debt asset ratio of the companies are

lesser than one (i.e.) they are financed by equityinstead of debt. It is suggested that if the companywants to enjoy more leverage they can use debtfinancing.

• The average of capital gearing ratio of Pfizer Ltd ismore comparable to other companies. So it mustuse less proportion of debt and preferred stock as it



bears regular payments, then only it will attract theinvestors because they prefer more dividends.

• The average of debt equity ratio of Glaxo Smith KlineLtd is less than one which means they are financedby debt at very low level hence it is suggested thatthey can increase their debt proportion to attract theinvestors.

Profitability Ratios• Thegross profit ratios of companies like Dr.Reddy’s

Labs Ltd, Glenmark Ltd, Glaxo Smith Kline Ltd showsnegative growth in study period. Hence it is suggestedthat they have to concentrate on profit takingmeasures by increasing the selling price withoutchanges in cost of goods sold to survive in futurewith more efficiency.

• Theoperating profit ratios of companies like Lupin Ltdand Novartis India Ltd shows negative growth in studyperiod hence it is suggested they have to reducelabor and operation costs and must initiate properauditing of company’s activities to reduce wastages.This will help them to increase their operating profit.

• The return on capital employed ratios of companieslike Lupin Ltd and Novartis India shows negativegrowth in study period it is suggested that thecompanies have to reduce their outstanding liabilitiesand also have to reduce their spending habits.

ConclusionsOn the basis of critical evaluation of financial performanceof sample companies, it is observed that the liquidityand solvency position of Lupin Ltd, Aurobindo PharmaLtd, Cardila Health Care Ltd, Glenmark Ltd, TorrentPharma Ltd , IPCA Ltd, Biocon Ltd, Novartis India Ltd,Ajanta Pharma Ltd are not good. In case of profitabilityperformance of Lupin Ltd ,Dr.Reddy’s Labs Ltd, GlenmarkLtd, Glaxo Smith Kline Ltd, Novartis India Ltd are notgood. This is due to inefficient in liquidity managementand high cost of production, higher labor cost andinefficient auditing of company’s business activities.However, in spite of high competition, the pharmaceuticalindustry is one of the most profitable industries. To sumup, the adoption of above said suggestive measures willcertainly help the selected units to improve their financialperformances. It is concluded that the overall performanceof pharmaceutical industry is at satisfactory level. Thus,the growth and all round development of this industryhas a direct bearing on the improvement of India’seconomy.

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• Pratapsinh Chauhan, Vijay K Patel(2013)’A studyof shareholder value creation and measurement inIndian Pharmaceutical Industry’International Journalof Conceptions on Management and Social SciencesVol. 1, Issue. 1, Dec’ 2013; ISSN: 2357 – 2787

• Sakshi Varshney (2014)TECHNICAL ANALYSIS OFINDIAN PHARMACEUTICAL COMPANIESIRACST-International Journal of Research in Management &Technology (IJRMT), ISSN: 2249-9563 Vol. 4, No.2,April 2014

• Nikhil Kaushik Dr. Madhur Raj Jain (2012)’TECHNICAL ANALYSIS OF SELECTEDPHARMACEUTICAL COMPANIES OF INDIA’Volume4, Number 3, July – September’ 2015 ISSN(Print):2279-0896, (Online):2279-090X PEZZOTTAITEJOURNALS SJIF (2012): 2.844, SJIF (2013): 5.049,SJIF (2014): 5.81

• Mr. Jayesh K. Pandya(2003)FINANCIALAPPRAISAL OF SELECTED MEDIUM AND LARGESIZE MULTINATIONAL DRUGS ANDPHARMACEUTICAL COMPANIES IN MUMBAIhttp://shodhganga. inflibnet.ac.in/bitstream/10603/57905/21/21_abstract%20of%20the%20thesis.pd

• B. Chandrasekhar,(2010)Financial Pe- Of Small AndMedium Enterprises (Smes) - A Study With ParticularReference To Pharmaceutical Units In AndhraPradesh. http://shodhganga.inflibnet.ac.in/bitstream/10603/74565/9/09_chapter%201.pdf

• Mohmad Mushtaq Khan , Dr. Syed KhajaSafiuddin(2016)”Liquidity And ProfitabilityPerformance Analysis Of Select PharmaceuticalCompanies International journal of sciencetechnology & management vol no 5,issue no 1,jan2016



A STUDY ON OCCUPATIONAL STRESS AND COPING WITH REFERENCETO NURSING PROFESSIONALS.

1. Research Scholar, Bharathiar University, Coimbatore.2. Assistant Professor, Department of Management studies, Anna University, Tiruchirappalli.

AbstractThe paper aims to investigate time management as a strategy in stress coping among the nursing professionals andalso assess the demographic profile of the respondents. The study sample was 47 nurses who were working in variousmulti specialty hospitals in Malappuram district in Kerala. The respondents were chosen through simple randomsampling method. The research reveals that age of the nurses have a significant association with their prioritization oftime between work and family, and number of working hours per week has an association with their time managementability.Key Words: Time Management, Stress, Nurses, Stress Coping, Multi Specialty, Hospitals.

Dr.M.Ravichandran2J.Indumathy1

IntroductionNursing is a challenging job and it can often feel asthough there is not enough time in the day to finish all oftasks required. Contrasting to other jobs, priorities canchange rapidly when a patient is in vital need for attention.The current study investigates the influence andrelationship of work experience and age in relation totheir ability to manage time and setting their prioritiesrespectively so as to reduce their stress.

Objectives of the Study1. To know the socio economic profile of the nurses in

Malappuram district.2. To study about the relationship between the age and

prioritization of family and work, work experience withtime management.

Review of LiteratureNitasha Sharma, Amandeep Kaur,(2011) “Factorsassociated with stress among nursing students” Theobjective of the study was to identify the factorscontributing to stress among nursing students. A totalof 37 students participated in the study. The factorscontributing to stress were identified using in subjectswith moderate and severe stress. The findings of thestudy suggested for a proper stress managementprogram for nursing students which includes, conflictmanagement training, time management and social skilltraining.

Fielden & Peckar (1999) in their study they identifiedthat the number of hours worked is directly related tothe level of stress experienced by workers. They furtherasserted that the number of hours workers chose to do

is positively related to the quality of social supportavailable to them. And found that the extended hourswe put to work, the higher the level of stress weexperience. This is due to the fact that energy is requiredand is expended doing both physical and mental works.

Tayebeh Mirzaei, Fatemeh Oskouie (2012),Thisstudy investigates how Iranian nursing students managetheir time according tothe circumstances and obstaclesof their academic field.21 nursing students werepurposefully chosen as participants and the data wascollected through semi-structured interviews. It was foundthat students spent most of their time to academic tasksin an attempt to overcome their stress. The result of thisstudy indicates the need for these students to have propertime management so that they could assign time for theextra-curricular activities and responsibilities that areappropriate to their age.

Hypothesis:There is a significant association between the age andtheir level of agreement onproper time management andprioritizing time for work and family helps in reducingstress.

There is a significant association between the workinghours per week and their time management ability inreducing stress.

Research MethodologyResearch design:Descriptive research design is used.Sampling Method:Simple random sampling method was used to obtainthe information.



Sample Size:The Sample Size is 47 nurses from various multi specialty hospitals in malappuram district.Data Collection:1. Primary data: Structured questionnaire was used to gather data.2. Secondary data: Secondary data was collected through the Books, Magazine, Journals, Newspaper, Websites

and etc.

Tools used for Data collection:1. Simple percentage2. Chi square

Table - 1: Demographic Profile of the Respondents

Age Group

18-28 13 28%

29-38 25 53%

>38 9 19%

Total 47 100%

Gender

Male 20 43%

Female 27 57%

Total 47 100%

Marital Status

Married 30 64%

Single 17 36%

Total 47 100%

Working hours per week

More than 48 hours 20 43%%

Less than 48 hours 27 57%

Total 47 100%

Educational Qualification

BSc 15 32%

MSc 0 0%

GNM 26 55%

ANM 6 13%

Total 47 100%

Demographic Profile No. of Respondents Percent

InterpretationThe demographic profile of the respondents show that majority 53% of nurses belong to the age group of 28-38, 57%of them are female, 64% of them are married ,and majority57% of them work less than 48 hrs per week and 55%of them are having the qualification of GNM.



Table - 2 : Chi-square test showing the relationship between the Age and their level of agreement forthe proper time management and prioritizing time for work and family reduces stress.

1 Strongly Agree 6 14 4 24(51%)

2 Agree 3 6 1 10

3 Neutral 1 2 1 4

4 Disagree 2 2 1 4

5 Strongly Disagree 1 1 2 4

Total 13 25 9 47

Sl.No Age / level of agreement 18 – 28 Total29 – 38 >39

Chi-square:Calculated value X2=3.928, Degrees of freedom =8, Levelof significance 5%, Table value=15.507. Thetable value is more than the calculated value so the null hypothesis is accepted. There is a significant associationbetween nurse’s age and their view onprioritization of time in reducing stress.

Simple percentage: Majority 51% of the nurses strongly agree that prioritizing time reduces stress.

Table - 3 : Chi-square test showing the relationship between working hours per week and the level ofagreement for the time management strategy used by nurses for coping stress.

1 Strongly Agree 8 12 20(42%)

2 Agree 6 10 16

3 Neutral 2 2 4

4 Disagree 3 2 5

5 Strongly Disagree 1 1 2

Total 20 27 47

Sl.No Working hours per week / level of agreement More than 48Hrs TotalLess than 48Hrs

Chi square:Calculate value X2= 0.811,Degrees of freedom=4,Level of significance 5%,Table value=9.488. The tablevalue is more than X2 so the null hypothesis is accepted. Result shows that there is an association between workinghours per week and the time management ability of nurses for coping stress.

Simple percentage: Here majority 42% of the nurses strongly agree that their time management ability reducestheir stress.

Finding1. The demographic profile of the respondents show that majority 53% of nurses belong to the age group of 28-38,

57% of them are female,64% of them are married , and 55% of them are having the qualification of GNM.2. There is a significant association between nurse’s age and their ability to manage time better by prioritizing the

time between family and work.3. The study shows that there is a significant association between working hours per week and time management

ability among nursing professionals

SuggestionThe nursing professionals could manage stress with the help of following these simple time management strategiessuch as, Trashing perfectionism, Setting priorities, Working backwards, Keep a time log , Learn to say no ,Usetime saving techniques ,Find creative solutions.

Conclusion:From the findings of the study we can conclude that, through proper time management nurses can cope their stressto a great extent. And study also exhibits the relationship between the age of the nurses, and their ability to managetime better by prioritizing the time between family and work, working hours per week and time management abilityamong nursing professionals.



References• Obiora E. Iyi , “Stress Management And Coping Strategies Among Nurses -A Literature Review” 2015. • Anna Ebers, “Stress and Time Management”,Fulbright PhD candidate [email protected] .studylib.net• Tayebeh Mirzaei , Fatemeh Oskouie, “Nursing students’ time management, reducing stress and gaining

satisfaction: a grounded theory study”.Nursing and Health Sciences (2012), doi: 10.1111/j.1442-2018.2011.00661.x

• Nizar Belal ,Said, “Time Management in Nursing Work” International Journal Of Caring Work.sep-dec2014,vol.7.issue 3,p746-749.4p



A STUDY ON INVESTOR AWARENESS ON MUTUAL FUND WITHSPECIAL REFERENCE RETAIL RETAIL INVESTORS IN COIMBATORE

1. Assistant Professor, Rathnavel Subramanian College of Arts & Science,Coimbatore.

Abstract

In this paper, structure of mutual fund, operations of mutual fund, it is discussed about the mutual fund knowledge andawareness among the retail investors with a special reference to Coimbatore city. It is difficult to selective group theretail investors in a sample as such the population of Coimbatore city is large in number. Compared to earlier days theinvestment options are changing from risk free to riskier investments. The analyses also shows that compared toearlier days the growth of investments in the stock market increased to significant level compared to other conventionalinvestments which are of lesser risks and lower returns. The ignorance of retail investors about mutual fund coupledwith aggressive selling by promising higher returns to the retail investors have resulted into loss of retail investors ’confidence due to inability to provide higher return. This necessitates the Asset Management Companies (AMCs) tounderstand the fund/scheme selection/switching behaviour of the retail investors to design suitable products to meetthe changing financial needs of the retail investors. With this background a survey was conducted among 75 MutualFund Retail investors in Coimbatore to study the factors influencing the fund/scheme selection by the Retail investors.Hence, this study is made to evaluate the knowledge, general and variable effects about the retail investor’s perceptionand performance of investment avenues.

Key Words: Mutual Fund, Retail Investors, Awareness, Knowledge, Perception, Investors Behaviour, Challenges,Returns & Risk.

E. Mohanraj1

IntroductionA Mutual Fund pools the money of people with certaininvestment goals. The money invested in varioussecurities depending on the objectives of the mutual fundscheme and the profits (or loss) are shared among retailinvestors in proportion to their investment. Investmentsin securities are spread across a wide cross-section ofindustries and sectors. Diversification reduces the riskbecause all stocks may not move in the same directionin the same proportion at the same time. Mutual fundissues units to the retail investors in accordance withquantum of money invested by them. Retail investors ofmutual funds are known as unit holders. The profits orlosses are shared by the retail investors in proportion totheir investment. The mutual funds normally come outwith a number of schemes with different investmentobjectives which are launched from time to time. A mutualfund is required to be registered with Securities andExchange Board of India (SEBI) which regulatessecurities markets before it can collect funds from thepublic. A Mutual fund is a trust that pools the savings ofa number of retail investors who share a common financialgoal. The money collected from retail investors isinvested in capital market instrument such as shares,debentures and other securities. The income earnedthrough these investments and the capital appreciationsrealized are shared by its unit’s holder in proportion to

the number of units owned by them. Thus a Mutual Fundis the most suitable investment to the common man asit offers an opportunity, to invest in a diversified,professionally managed basket of securities at relativelylow cost.

Mutual funds can be invested in many different kinds ofsecurities. The most common are cash, stock, andbonds, but there are hundreds of sub-categories. Stockfunds invest primarily in the shares of a particularindustry, such as technology or utilities. These are knownas sector funds.

Bond funds can vary according to risk (e.g., high-yieldor junk bonds, investment-grade corporate bonds), typeof issuers (e.g., government agencies, corporations, ormunicipalities), or maturity of the bonds (short- or long-term). Both stock and bond funds can invest in primarilyU.S. securities (domestic funds), both U.S. and foreignsecurities (global funds), or primarily foreign securities(international funds).Most mutual funds’ investmentportfolios are continually adjusted under the supervisionof a professional manager, who forecasts the futureperformance of investments appropriate for the fund andchooses those which he or she believes will most closelymatch the fund’s stated investment objective. A mutualfund is administered through a parent managementcompany, which may hire or fire fund managers. Mutual



funds are liable to a special set of regulatory, accounting,and tax rules. Unlike most other types of businessentities, they are not taxed on their income as long asthey distribute substantially all of it to their shareholders.Also, the type of income they earn is often unchangedas it passes through to the shareholders. Mutual funddistributions of tax-free municipal bond income are alsotax-free to the shareholder. Taxable distributions can beeither ordinary income or capital gains, depending onhow the fund earned those distributions.

A mutual is a set up in the form of trust, which hassponsor, trustee, assets management company (AMC)and custodian. Sponsor is the person who acts alone orin combination with another body corporate andestablishes a mutual fund. Sponsor must contribute atleast 40% of the net worth of the investment managedand meet the eligibility criteria prescribed under theSecurities and Exchange Board of India (Mutual Funds)regulations, 1996. The sponsor is not responsible orliable for any loss or shortfall resulting from the operationof the schemes beyond the initial contribution made byit towards setting up of Mutual Fund. The MutualInternational Journal of Research in Management ISSN2249-5908 Issue2, Vol. 2 (March-2012) Page 63

Fund is constituted as a trust in accordance with theprovisions of the Indian Trusts Act, 1882 by the Sponsor.Trustee is usually a company (corporate body) or a boardof trustees (body of individuals). The main responsibilityof the trustee is to safeguard the interest of the unitholders and also ensure that AMC functions in theinterest of retail investors ’ and in accordance with theSecurities and Exchange Board of India (Mutual Fund)Regulations 1996 the provisions of the Trust deed andthe offer Document of the respective schemes. The AMCis appointed by the Trustees as the investment Managerof the Mutual Fund. The AMC is required to be approvedby SEBI to act as an asset management company ofthe Mutual Fund. The AMC if so authorized by the TrustDeed appoints the Registrar and Transfer Agent to agentthe mutual fund. The registrar processes the applicationform, redemption requests and dispatches accountstatements to the unit holders.

Objectives of the Study1. To evaluate the knowledge level of retail investors

about mutual fund and its terms;2. To evaluate the awareness level among retail

investors;3. To find out how the retail investor is influenced to

make investment in Mutual Fund;

Review of LiteratureSingh and Jha (2009) conducted a study on awareness& acceptability of mutual funds and found that consumers

basically prefer mutual fund due to return potential,liquidity and safety and they were not totally aware aboutthe systematic investment plan. The invertors’ will alsoconsider various factors before investing in mutual fund.International Journal of Research in Management ISSN2249-5908 Issue2, Vol. 2 (March-2012) Page 65

Desigan et al (2006) conducted a study on women retailinvestors’ perception towards investment and found thatwomen retail investors ’ ’ basically are indecisive ininvesting in mutual funds due to various reasons likelack of knowledge about the investment protection andtheir various investment procedures, market fluctuations,various risks associated with investment, assessmentof investment and redressal of grievances regarding theirvarious investment related problems. Savings is a habitspecially embodied into women. Even in the past, whenwomen mainly depended on their spouses’ income, theyused to save to meet emergencies as well as for futureactivities. In those days, women did not have anyawareness about various investment outlets. But as timepassed, the scenario has totally changed. Ramamurthyand Reddy (2005) conducted a study to analyze recenttrends in the mutual fund industry and draw a conclusionthat the main benefits for small retail investors ’ due toefficient management, diversification of investment, easyadministration, nice return potential, l iquidity,transparency, flexibility, affordability, wide range ofchoices and a proper regulation governed by SEBI. Thestudy also analyzed about recent trends in mutual fundindustry like various exit and entry policies of mutualfund companies, various schemes related to real estate,commodity, bullion and precious metals, entering ofbanking sector in mutual fund, buying and selling ofmutual funds through online.

Anand and Murugaiah (2004) had studied variousstrategic issues related to the marketing of financialservices. They found that recently this type of industryrequires new strategies to survive and for operation. Forsurviving they have to adopt new marketing strategiesand tactics that enable them to capture maximumopportunities with the lowest risks in order to enablethem to survive and meet the competition from variousmarket players globally.

Research Methodologya. Sample Design:-

The survey was conducted during the three monthsamong 75 respondents as per simple randomsampling.

b. Data Collection Method:-The Primary data was collected by the researcherthrough Questionnaire. The secondary data was fromJournals, Books, Magazines and few other websites.



Analysis & InterpretationsTable No- 1:Demographic Factor of Investors (All respondents are tabulated on percentage basis)

No. of Respondents

Age Group:-a. Below 30 yearsb. 31 years - 40 yearsc. 41 years - 50 yearsd. Above 51 years

Education Level : -a. Under Graduateb. Post Graduatec. Professional

Annual Income Level :-a. Below INR 1,50,000b. INR 1.5 Lakhs -INR 3 Lakhsc. Above INR 3 Lakhs

Employment Sector:-a. Private Sectorb Public Sectorc. Self Employed

Demographic Factor Male Female Total (%)

52

18148

12

351012

192112

33109

23

5558

1562

797

1463

75

23191320

501614

263019

471612

100

31251726

662118

344025

632116

Inference:-The above table depicts the demographic factors where in the information is collected from male respondents on amajority basis on the perception that they would be more aware about mutual funds. Among the respondents,people having basic graduation who are interested to respond to the questionnaire are more in number. The incomeof respondents are scattered among the various income levels and 40% of respondents are found to be in theincome level between INR 1.5 Lakhs to INR 3 Lakhs. Private sector employees are showing more interest to investin mutual funds.Test of Hypotheses:Hypothesis No.1:-Ho – There is no significant difference between the investors’ age and the knowledge level about mutual fund.H1 – There is significant difference between the investors’ age and the knowledge level about mutual fund.

Table No - 2 : Statement Of Association Between The Investors’ Age And The Knowledge Level AboutMutual Fund.

Between Groups 1.025 3 0.352

Within Groups 238.962 296 0.807 0.423

Total 239.987 299

SIGNIFICANT VALUE: 0.737

ONE-WAY ANOVA TEST SUM OF SQUARES DEGREE OF FREEDOM MEAN SQUARE F

Inference:-The above table communicates the result with regarding to the calculated value of “F” test. The calculated “F” valueis less than the tabulated value at 5% level of significance for v1 = 3, and V2 = 296 degrees of freedom. Hence, thenull hypothesis is accepted and alternative hypothesis is rejected. It is proved that there is no significant differencebetween the investors’ age and the knowledge level about mutual fund. Therefore, it can be understood that theknowledge level of the investors associated with the respondent age.Hypothesis No.2:-Ho – There is no significant difference between the investors’ age and the awareness about mutual fund.H1 – There is significant difference between the investors’ age and the awareness about mutual fund.



Table No - 3 : Statement Of Association Between The Investors’ Age And Awareness About MutualFund.

Between Groups 0.985 3.00 0.328

Within Groups 73.895 296.00 0.250 1.316

Total 74.880 299



Inference:-The above table communicates the result with regarding to the calculated value of “F” test. The calculated “F” valueis less than the tabulated value at 5% level of significance for v1 = 3, and V2 = 296 degrees of freedom. Hence, thenull hypothesis is rejected and alternative hypothesis is accepted. It is proven from the analysis that there is asignificant difference between the gender of the respondents and awareness about mutual fund.Ho – There is no significant difference between the investors’ income group and the knowledge level about mutual

fund.H1 – There is significant difference between the investors’ income group and the knowledge level about mutual

fund.

Table No - 4 : Statement of Association between the Investors’ income group and the knowledge levelabout mutual fund.

Between Groups 0.54 3.00 0.181

Within Groups 74.34 296.00 0.251 0.72

Total 74.88 299



InferenceThe above table communicates the result with regarding to the calculated value of “F” test. The calculated “F” valueis less than the tabulated value at 5% level of significance for v1 = 3, and V2 = 296 degrees of freedom. Hence, thenull hypothesis is accepted and alternative hypothesis is rejected. There is a least significant difference betweenthe means of the income group of investors and the knowledge level.

Hypothesis No.3:-Ho – There is no significant difference between the investors’ income group and the awareness about mutual fund.H1 – There is significant difference between the investors’ income group and the awareness about mutual fund.

Table No - 5 : Statement of Association between the Investors’ income group and the awareness aboutmutual fund.

Between Groups 1.40 3.00 0.465 1.8

Within Groups 73.49 296.00 0.248 74

Total 74.89 299



Findings of the Study:-a. In majority of the respondents the knowledge level is confined to good knowledge. Approximately 10% of the

respondents do not have proper knowledge about Mutual funds.b. The respondents are well acquainted with mutual fund terms and many respondents do not know technical

terms like ENTRY LOAD, EXIT LOAD, OPEN-ENDED & CLOSE-ENDED.



c. Table 4 shows that more than 50% of respondentsare educated about mutual funds throughadvertisements, friends and relatives.

d. The respondents’ awareness level shows that manypeople have knowledge about Growth and IncomeSchemes rather than Balanced and DividendSchemes.

e. Many Respondents have clear knowledge about thepotential advantages of investing in mutual funds.

f. Bankers play the vital role in influencing therespondents to invest in mutual funds and they makethe investor to invest in their banks mutual fundschemes.

Suggestionsa. Mutual fund companies may try to educate the

investors to invest in mutual funds through regularawareness programs.

b. Fund Managers should try to give clear informationabout the mutual fund terms and various schemes.

c. Fund Agents may take steps to shrink the termsand conditions and can make them easilyunderstandable to the prospective investors;

d. Mutual Fund Agencies may spread the informationabout all the aspects of investing in mutual funds.

e. Various schemes may be introduced to attract femalerespondents as the economy is leaning towardswomen’s financial empowerment.

ConclusionIn this survey, graduate respondents are chosen as theyhave approachable knowledge about mutual fund. Thegeneral knowledge & awareness level among theindividual investors are so good. Mutual funds arecornering the maximum attention of the investors intoday’s scenario be it individual or corporate investors.This is because of the reason that there is a perceptionamongst these investors that mutual funds give quickand more returns as compared to other avenues andinstruments of investments. This is the most prominentfactor for the acceptance and growth of mutual fundsamongst the populace of India in recent times.

References• Arnold L. Redman, N. S. Gullett, Herman Manakyan;

“The Performance of Global And International MutualFunds”; Journal of Financial and Strategic Decisions;Volume 13, No.1; 2000.

• Chang, E.C. and W.C. Lewellen, “Market Timing andMutual Fund Performance,” Journal of Business 57,1984, pp. 57-72.



INVESTORS AWARENESS IN EQUITY SHARES

1. Assistant Professor, School of Business Management, RVS College of arts and Science, Sulur, Coimbatore.

R. Geetha1

AbstractSuccess of equity issues totally depends on the confidence of the investors. If the investors perceive high profitabilityprospects, they will invest in equity. There are two types of investors, namely, institutional investors and retail investors(households). Institutional investors are huge investors who operate through Portfolio Managers. Portfolio Managersonly shuffle around the holdings in the existing scrip’s in their basket, based on their subjective evaluation of variousscrip’s but they do not inject the much needed risk capital to upcoming enterprises to undertake new industrialactivities. Even Foreign Institutional Investors (FII’s) generally bring capital into the country only to acquire shares inthe existing highly profitable companies but do not provide risk capital to the corporate world. It is the Retail Investori.e. the household sector, who is the only source of providing risk capital. The Retail Investor provides this risk capital,either directly by investing in equity market or through collective schemes popularly called as Mutual Funds. There are39 Mutual Funds offering about 600 schemes to the households, managing assets to the tune of Rs. 3,10,171 crores(US $ 68 billion) at the end of October 2006.Indian retail investors have been directly participating in equity marketsand taking price fluctuations for decades. The household sector generates more than $ 30 billion of savings everyyear, which is available to the Indian financial system. It is the only source of providing risk capital within the country.

IntroductionEquity share is a main source of finance for any companygiving investors rights to vote, share profits and claim onassets. Various types of equity capital are authorized,issued, subscribed, paid up, rights, bonus, sweat equityetc. The value of equity shares are expressed in termsof face value or par value, issue price, book value, marketvalue etc.

In the world of financial and investment management,‘equity share’ is a big word frequently used in every nextdiscussion. We call it stock, ordinary share, or shares,all are one and the same. Explaining equity shares in apage or a bunch of pages is very difficult. Let us still tryto define it in as summarized manner as possible.

Equity share is one of the main sources of finance forany company. Normally, a company is started with equityshares as its first source of capital from the owners orpromoters of that company. After a certain level of growth,more capital is required for further growth.The companythen finds an investor in the form of friends, relatives,venture capitalists, mutual funds, or any such smallgroup of investors and issue fresh equity shares to theseinvestors.

A point comes where the company reaches a very biglevel and requires huge capital investment for businessgrowth. It then offers its equity share to the generalpublic. This is called Initial Public Offer (IPO). More suchissues in future are called Follow-on Public Offer (FPO).

Objectives of the Study1. To examine the investment information seeking

behavior of equity investors,2. To ascertain the investment behavior and problems

faced by them.3. To find out the factors associated with the level of

awareness and

Types of Equity Shares:Authorized Share Capital: It is the maximum amountof capital which can be issued by a company. It can beincreased from time to time. Some fee is required to bepaid to legal bodies accompanied with some formalities.

Issued Share Capital: It is that part of authorized capitalwhich is offered to investors.

Subscribed Share Capital: It is that part of Issuedcapital which is accepted and agreed by the investor.

Paid Up Capital: It is the part of subscribed capital,the amount of which is paid by the investor. Normally,all companies accept complete money in one shot andtherefore issued, subscribed and paid capital becomesone and the same. Conceptually, paid up capital is theamount of money which is actually invested in the business.

There are other types of equity shares discussedbelow:Rights Share: These are the shares issued to theexisting shareholders of a company. Such kind of sharesis issued to protect the ownership rights of the investors.



Bonus Share: These are the type of shares given bythe company to its shareholders as a dividend.

Sweat Equity Share: These shares are issued toexceptional employees or directors of the company fortheir exceptional job in terms of providing know-how orintellectual property rights to the company.

Safeguards’ for Investors’Selecting a Broker/ Sub - BrokerDeal only with a SEBI registered Broker / Sub - brokerafter due diligence. Details of the BSE Brokers can beobtained from the Member’s List published by BSE andfrom the website :

Entering into an AgreementFill in a Client registration form with the Broker / Sub -broker Enter into Broker / Sub - broker - ClientAgreement. This agreement is mandatory for all investorsfor registering as a client of a BSE Trading Member.Ensure the following before entering into an agreement:Carefully read and understand the terms and conditionsof the agreement before executing the same on a validstamp paper of the requisite value Agreement to besigned on all the pages by the Client and the Member ortheir representative who has the authority to sign theagreement. Agreement has also to be signed by thewitnesses by giving their names and addresses. Pleasenote that Regulatory Authorities have not stipulated forexecution of any document other than Broker/ Sub -Broker / Client Agreement.

TransactingSpecify to the Broker / Sub - broker, the exchangethrough which your trade is to be executed and maintainseparate account for each exchange.

Obtain a valid Contract Note from the Broker / Sub-brokerwithin 24 hours of the execution of the trade. Contractnote is a confirmation of trade(s) done on a particularday for and on behalf of a client in a format prescribedby BSE. It establishes a legally enforceable relationshipbetween the Trading Member and his Client in respectof settlement of trades executed on BSE as stated inthe Contract Note. Contract Notes are made in duplicate,and the Trading Member and Client, both keep one copyeach. The Client is expected to sign on the duplicatecopy of the Contract Note, confirming receipt of theoriginal.

Contract Note - Form ‘A’ - Contract Note issued whereMember is acting for constituents as brokers/ agents.

Contract Note - Form ‘B’ - Contract Note issued byMembers dealing with constituents as principals.Ensure that the Contract Note contains: SEBIregistration number of the Trading Member/ Sub – broker

Details of trade such as, Order no, trade no., trade time,quantity, price, brokerage, settlement number, detailsof other levies.

Trade price should be shown separately from thebrokerage charged. The maximum brokerage that canbe charged is Rs.0.25 per share/debenture or 2.5% ofthe contract price per share / debenture whichever ishigher. This maximum brokerage is inclusive of thebrokerage charged by the sub-broker (Sub-brokeragecannot exceed 1.5% of the contract price.) Any additionalcharges that a Trading Member can charge are ServiceTax on the brokerage, any penalties arising on behalf ofclient and Securities Transaction Tax (STT). Thebrokerage, service tax and STT are required to beindicated separately in the Contract Note.

SettlementEnsure delivery of securities /payment of money to thebroker immediately upon getting the Contract Note forsale / purchase but in any case, before the prescribedpay-in-day. Member should pay the money or securitiesto the investor within 24 hours of the payout. Open ademand account. Opt for buying and selling shares indemand form.

For delivery of shares from demand account, give theDepository Participant (D P) ‘Delivery out’ instructionsto transfer the same from the beneficiary account to thepool account of broker through whom shares andsecurities have been sold. The following details to begiven to the DP: details of the pool a/c of broker to whichthe shares are to be transferred, details of Security,quantity etc. As per the requirement of depositories the‘Delivery out’ Instruction should be given at least 48 hoursprior to the cut-off time for the prescribed securities pay-in.

For receiving shares in your demand account, give theDepository Participant (D P) ‘Delivery in’ instructions toaccept shares in beneficiary account from the poolaccount of broker through whom shares have beenpurchased.If physical deliveries are received check the deliveriesreceived as per Good/Bad delivery guidelines issued bySEBI.Bad delivery cases should be sorted out through BSEmechanism immediately.Ensure that all registration of physical shares forownership by transfer should be executed by a valid,duly completed and st amped transfer deed.

Rights of Investors• To receive all benefits/ material information declared

for the investors by the Company.



• Prompt services from the Company such as transfers, Sub-divisions and consolidation of holdings in the Company.• As an equity holder have a right to subscribe to further issue of capital by the Company.• Shares and /or Debentures of Joint 0.25 per stock companies share/ debenture or 2.5% of the contract price per

share/ Debenture whichever is higher.• Receipt of the Contract Note from the broker in the specified format showing transaction price, brokerage,

Service Tax and STT, separately• Expect delivery of shares purchased/value of shares sold within 24 hours from pay-out.• Approach nearest Regional Investor Service Centres of BSE.• The Complaint against trading members of the Exchange or Applications for Arbitration should be filed at the

nearest Regional Investor Service Centre referred, within which the most recent address / registered officeaddress of the constituent, as duly communicated in writing to the trading member in accordance with law, islocated. The hearings shall be held in the concerned Regional Investor Service Centre in which the Applicant hadduly filed the Complaints / Application for Arbitration.The Complaint against trading members of the Exchange or Applications for Arbitration should be filed at thenearest Regional Investor Service Centre referred, within which the most recent address / registered officeaddress of the constituent, as duly communicated in writing to the trading member in accordance with law, islocated. The hearings shall be held in the concerned Regional Investor Service Centre in which the Applicant hadduly filed the Complaints / Application for Arbitration.

Difference Between Preference Share And Equity ShareA Company can issue two types of shares viz. Equity Shares and Preference Shares. Equity shares are also knownas Ordinary Shares. While Preference shareholders enjoy the benefit of receiving their dividend distribution first; theequity shareholders enjoy voting rights in major company decisions, including mergers or acquisitions. Preferenceshares have the right to receive dividend at a fixed rate before any dividend is paid on the equity shares. Further,when the company is wound up, they have a right to return of the capital before that of equity shares.The key differences between preference shares and equity shares are listed in the following table:

Rate of Dividend

Arrears of Dividend

Preferential Rights

Winding up

Voting Rights

Right to participate inManagement

Basis of Distinction Preference Shares Equity Shares

Paid at fixed rate

Get accumulated for cumulative preference shares

Before Equity shares

Have a right to return of capital before equity shares .This means they are safer

No voting rights

Have NO right

May vary , depending upon the profits

No accumulation

After

Only paid when preference sharecapital is paid fully

Voting rights

Have right

Apart from the above, the preference shares may carry some more rights such as the right to participate in excessprofits, which a specified dividend has been paid on the equity shares or the right to receive a premium at the timeof redemption. The preference shares are safer investments than the equity shares. In case the company is woundup and its assets (land, buildings, offices, machinery, furniture, etc) are being sold, the money that comes from thissale is given to the shareholders. After all, shareholders invest in a business and own a portion of it. Please notethat usually, the preference shares are most commonly issued by companies to institutions. That means, it is outof the reach of the retail investor. For example, banks and financial institutions may want to invest in a company butdo not want to bother with the hassles of fluctuating share prices. In that case, they would prefer to invest in acompany’s preference shares. Companies, on the other hand, may need money but are unwilling to take a loan. Sothey will issue preference shares. The banks and financial institutions will buy the shares and the company gets themoney it needs. This will appear in the company’s balance sheet as ‘capital’ and not as debt (which is what wouldhave happened if they had taken a loan). Preference Shares are NOT traded in stock exchange. This also meansthey are not ‘liquid’ assets; there’s little scope for the price of these shares to move up or down. On the other hand,ordinary or equity shares are traded in the markets and their prices go up and down depending on supply and



demand for the stock. But, that does not mean the investor is stuck with his shares. After a fixed period, apreference shareholder can sell his/ her preference shares back to the company. This cannot be done with theordinary shares. Ordinary shares can be only sold to another buyer in stock market.

AnalysisInvestment information behavior

23% 21% 22% 13% 21%

News Paper Magazine Internet Television Company Report

Inference:• 23% of the people are gathering information through NEWS paper.• 21% of the people are gathering information through MAGAZINE.• 22% of the people are gathering information through INTERNET.• 13% of the people are gathering information through TELEVISION.• 21% of the people are gathering information through COMPNAY REPORT

Problems Faced By Investors

15% 24% 20% 25% 16%

Payment Share Trasfer Commission Yes No

Inference• 15% of the investors are faced the payment problems• 24% of the investors are faced share transfer problems• 20% of the investors are faced commission problems• 25% of the investors are faced general problems.• 16% of the investors are says there is no problems

Awareness Level of Investors

UPTO 30 29%

31 – 45 42%

AFTER 45 29%

Age Percentage

• Up to 30 age limit of the investors are having 29% Awareness level in equity• 31 -45 age limit of the investors are having 45% Awareness level in equity• After 45 of the age group investors are having 29 % Awareness level in equity

ConclusionThe investors of to-day are more rapidly informed than their predecessors of yesterday. So they are better informedand better treated. They want to be secure when they aspire to become rich, wanted to save while they are temptedto spend, want to feel the joy of pride and avoid the pain of regret. However every agency in the capital marketshould plan their strategies for profit to investors on a long term basis. The potential investor must be properlyeducated and guided in a manner that more idle resources or invested in other avenues will be diverted to capitalmarket. Increase in GDP (9%) raising of sensex around 20,000 more participation of MNCS with their FDI results inthe progress of Indian economy and awareness of the prudent Indian investors. If and when all financial reforms areinflated, the Indian capital market will not only be on par with developed capital markets of the world, but also willbecome the paradise for investors. Conclusively the quantum of retail investment increased rapidly as well asenormously, liberalization continues to blow retail market investment by adapting itself to new procedures practicesand patterns with the entry of various players in the market; it is poised to achieve unprecedented levels of growthin the near future.



References• Agarwal, A.N., (2000), Indian Economy, (26th ed.), New Delhi, New Age International (P) Ltd.• Avadhani, V.A, (1992), Investment and Securities Market in India, Investment Management, Bombay, Himalaya

Publishing Home. (1997), Capital Management, Bombay, Himalaya Publishing House.www.bseindia.comshodhganga.inflibnet.ac.inwww.finmin.nic.in



A STUDY OF ATTITUDE AND WORK COMMITMENT OF TEACHERSTOWARDS TEACHING PROFESSION

1. Professor – School of Business Management. Rathnavel Subramaniam College of Arts and Science, Coimbatore.

Abstract

The variables under the present study i.e. attitude and work commitment of the teachers towards the teaching professionare very important in the field of education. These two variables are like an engine driver for the vehicle education.They directly affect the classroom processes. How best the teacher is going to serve the students will depend on theattitude of the teachers towards the teaching profession. Whether they will leave lasting impression on the minds of thestudents depend on the attitude and work commitment of teachers towards the teaching profession. The variableattitude and work commitment is not static but dynamic. So various factors affect teacher’s attitude and work commitmentof the teachers towards their teaching professions. With so many reforms in the education system we are unable toachieve the national goals and objectives. The present study is striving to analyze the different factors like pay scale,qualification, experience or gender and how they are making any kind of impact on the attitude and work commitmentof the teachers towards their teaching profession.

Dr. Ganga Durga Devi1

Introduction“Education is a process, a social function carriedon and by the society for its own sake”.Man is a social animal and the education plays animportant role throughout his life. No civilized society isbelieved possible for an individual to be fit for adult life ifhe does not have some degree of formal education. Ithas universally been accepted that prosperity of a nationis also reflected in its educational system. Quality of anation depends upon quality of its people and economicgrowth but both depend upon quality of education, thefact remains same that the most important factor in theeducation process is the teacher. The teacher is thekey of any educational reconstruction.

“If a student is to be prepared for evolving world,then an essential attribute of a competent teacheris awareness of the world”.The teacher should be an integrated individual, skilledin the art and science of human relations and consciousof the wide variety of behaviour patterns in the world towhich he may have to adjust. Adjustment is not a simpleterm like adaption is accommodation. It is actually acondition or a state of mind and behaviour in which onefeels that one’s need have are will be gratified those ofwho can adopt are adjust to all needs of changingconditions can live happily and successfully. Thedevelopment of a nation depends upon their studentsand the all over development of a student depends uponhis teacher. Only a teacher develops the capacity amongthe children for adjusting in home, school and society.

Concept of Teacher AttitudeAttitude has been described as “of attitudeemotionally tend predisposition towards objectsand ideas”. C.V. Good,” Attitude is a readiness to reacttowards or against some situations, person or thing in aparticular manner to a particular degree of intensity”.Thrustone L.L., “An attitude is the degree of positive effectassociated with some psychological object”. Jung,“Attitude is a readiness of the psyche to act or react ina certain way”.Britt, “An attitude is a mental and natural state ofreadiness, exerting directive or dynamic influences uponthe individual’s response to all objects and situationswith which is related”.

Teacher’s Attitude on TeachingTeacher’s attitude towards teaching profession shouldbe good as to perform. Their responsibilities over thecourses of last two years, Ellen director of Santa CruzConsortium. New teacher’s project has been taken areport from new teachers to find their attitudes towardsteaching and it has been divided into four differentphases.

Need and Significance of the Study:The main aim of the study was find out teachers attitudetowards teaching profession from amongst the generalteachers population. An attempt was also to be examinerelationship of teacher attitude towards teaching professionwith adjustment of the teachers. Thus the problem isstated attitude towards teaching profession in relationto adjustment of senior secondary school teachers.



Objective of the Study1. To compare the attitude of senior secondary schools

teachers towards teaching profession in relation togender.

2. To compare the attitude of senior secondary schoolsteachers towards teaching profession in relation tostream.

3. To compare the attitude of senior secondary schoolsteachers towards teaching profession in relation totype of schools

4. To study the relationship between attitude towardsteaching profession and adjustment of seniorsecondary schools teachers.

Hypotheses of the Study 1. There is no significant difference between attitudes

towards teaching profession of senior secondaryschools teachers in relation to gender.

2. There is no significant difference between attitudestowards teaching profession of senior secondaryschools teachers in relation to stream.

3. There is no significant difference between attitudestowards teaching profession of senior secondaryschools teachers in relation to type of schools.

4. There is no significant relationship between attitudetowards teaching profession and adjustment of seniorsecondary schools teachers.

Review of Related LiteratureHuman knowledge has three phases: 1. Presentation 2.Transmission3. AdvancementsBy building upon the accumulated any recorded knowledgepast, man constantly adds to the vast store of knowledge,which makes possible progress in all areas of humanendeavour. Before taking up any specific research projectin the development of a discipline, the researcher mustbe familiar with previous theory and research.Operational Definitions of the Terms UsedGovernment Schools: the schools, which are run andgoverned by the state government under certain rules.Private Schools: the schools, which are run andgoverned by certain private bodies or agencies etc.Stream: refers to arts and science group.Sex: refers to male and female group.

Teaching attitude: an attitude is a personal dispositioncommon to individuals but is possessed by differentindividual in different degree. It implies them to react toobjects, situations or proposition in the way that can becalled favorable or unfavourable. This basic motivationis responsible for molding the nature of attitude in eachindividual. Continuous motivation manifests it in termsof appetites and aversions and through experience we

develop favourable and unfavourable indicates towardsvarious objects class of objects.Teacher Adjustment: adjustment of teachers relatedwith four different aspects i.e. home Teacher adjustment,social adjustment, emotional adjustment and educationaladjustment MethodThe present study was mainly aimed at studying theattitude and adjustment of senior secondary schoolteachers in relation to sex, stream and type of school.

Findings/ ConclusionsIn the light of analysis and interpretation of the presentstudy, following findings may be laid down.1. There is no significant difference between attitude of

senior secondary schools teachers towards teachingprofession in relation to gender but mean score showsslightly difference between two

2. There is no significant difference between attitude ofsenior secondary schools teachers towards teachingprofession in relation to stream but mean scoreshows slightly difference between two.

3. There is no significant difference between attitude ofsenior secondary schools teachers towards teachingprofession in relation to type of schools but meanscore shows slightly difference between two.

4. There is a significant relationship between attitudetowards teaching profession and adjustment of seniorsecondary schools teachers.

Suggestions for Further StudyThe study may be extended to a large and vast sampleand for different schools. The study may be undertakento the attitude of senior secondary schools teachers ofgovt. and pvt. Institutions. The study can be further donewith the higher educational institutions with othervariables. The study may be conducted to study theteacher adjustment and teacher attitude of non–tribalteachers serving in non-tribal and tribal areas.

Bibliography• Aggarwal, J.C.(2004): Psychology of Learning and

Development. New Delhi :Shipra Publication Pvt. Ltd.• Anamalai, A.R. (2000) :Attitude of Teachers Towards

Teaching. Experiments in Education, Vol., No 4,PP-69-71.

• Atwater, Mary M. and other (1991): Beliefs andAttitude of Urban Primary Teachers Towards PhysicalScience and Teaching Physical Science. Journal ofElementary Science Education, Vol.3 No.1 ,PP. 3-12.

• Bakari, Rosenna (2002): Development and Validationof An Instrument to Measure Pre service TeachersAttitude Towards Teaching of African AmericanStudents. Dissertation Abstracts International (1993-2000). Vol.1. New Delhi :NCERT. P.24. Bhasin,Chanchal (1998) :



A STUDY ON HR PRACTICES AND EMPLOYEES SATISFACTIONIN PRIVATE BANKS (With special reference to Puducherry)

Dr.A.Shanmugasundaram1 S.Sharmila Devi2

Abstract

The turmoil throughout the world has witnessed the growing importance of Human Resources Management (HRM) inboth business and public life. The turbulent business climate brought in the wake of liberalization, globalization,changing technologies, growth in knowledge and advances in information technology is offering managers a complexand challenging role. The Indian business scenario is characterized by the historical rigidities arising largely out ofcentralized planning. The uniqueness of the Human Resources (HR) approach requires a totally different type ofattention from managers not only in profit making organisation,but also in the nonprofit making organizations. Thepractices and philosophy of HRM are perpetuated by managers who are encouraged to follow the role model of theirseniors. Dealing with people from different age, gender, race, ethnicity, educational background, location, income,parental status, religious beliefs, marital status and ancestry and work experience can be a challenging task for HRmanagers for all industries... The focus of the study is to gain an insight into the current hr practices and its impact onemployees satisfaction in private sector banks. For the purpose of conducting the study 100 employees were selectedfrom those who are working in various private banks in puducherry.From the selected sample, only 85 of them wereable to respond properly. The data was collected using both by primary and secondary data. In this study, certainstatistical tool were applied and the results inferred that the practices in private banks of puducherry are not satisfyingall the employees equally. Most of the employees are dissatisfied with the selection process, job security, package ofsalary, followed by motivational aspects. so in future private banks should try to improve all HRM practices in order toachieve sustainability of success of all banks with the upcoming challenges like retention, health and wealthbenefits, learning and development ,succession planning and etc.,

Key Words : HRM, HR Practices ,Private Banks, Employees Satisfaction.

1. Assistant Professor, Department Of Commerce, Vi-Ka Arts College, Thiruvarur.2. Research Scholar & Assistant Professor, Department of Commerce, Saradha Gangadharan College, Puducherry

IntroductionThe banking sector in India has been growing at a veryfast pace along with the growth in other sectors. In thismodern era, banks have started reaching not only allcorners of urban areas but also to corners of all ruralareas also by connecting all customers under one roofof banks. Classification of banks itself explains thegrowth in the size of banks in all the sectors of public,private, cooperative and foreign banks. When number ofbanks are increasing on one side, the other issuesrelating to it is efficiency of cost, updating technologyand credit matters on the other side. The main tasksbefore the bankers are to match HR with thedevelopments in the society in the field of any relatedunit. At this junction it is very important to maintain itproperly in any industry as loosing an HR will cost heavilyfor an organization. In HR more emphasis must be givento the areas like recruitment, selection ,training anddevelopment career planning, compensation package andetc., HRM is an distinctive approach to the managementof employees which tries to achieve competitiveadvantage. Lack of efficient HR practices reducesemployees satisfaction and ultimately affect theorganizational growth.

Objectives of the Study• To provide an overview of HRM practices• To exhibit the models of HRM for measuring the

employees satisfaction by HRM process• To examine the weak points of HRM practices which

affects employees satisfaction• To provide suggestions for improving the HR practices

and employees satisfaction

Review of LiteratureThis chapter reviews previous works done by researchersin the field of HRM. The literature review in research doesnot only provide knowledge on what has been done onan area of study but the strengths and weaknesses thatcould propound a meaningful and insightful study.

Anil Kumar Singh Carried out a study titled “A Study ofHRM Practices and organizational culture in selectedprivate sector organisation” with the objectives toinvestigate the various HRM practices at the manageriallevels in private sector organizations and to study andexamine the relationships between various aspects ofHRM practices and organizational culture using the



statistical tools Mean, Standard deviation andCorrelations. in his study he founded there is relationshipand no relationship between some variables.

Subhash C. Kundu, Divya Malhan Carried a study titled“A Study of HRM Practices in Insurance Companies:.Job analysis is the process of obtaining information aboutjobs i.e. information about the task to be done on thejob, as well as personal characteristics (Education,experience, specialized training) necessary to do thetasks. To assess practices regarding human resourceplanning and recruitment. The primary data wereanalyzed to assess HR practices being implementedby insurance companies. Statistical tools used were,Percentage, Correlations, Standard Deviations, Analysisof variance (ANOVA),Mean, Grand mean. importance ofhr is founded in this study.

RuchiGoyal, Dr.Madhu Shrivastava Carried a study titled“A Study of HR Practices and Their Impact on EmployeesJob Satisfaction and Organizational Commitment inPharmaceuticals. In their view, today’s businessmenhave understood the value of hiring professionals withworking experience in HR. The companies have learntthe importance of good relations with their workforce.

On the basis of above literature review, this studyconsiders the following dimensions of HRM practiceshaving an impact on employees satisfaction towards theorganization such as• Recruitment & selection system• Compensation package• Career planning• Job security• Motivation of employees• Training and development• Performance appraisal

While conducting the present study certain aspectscould not be dealt with, due to constraints of time andcost.

Research MethodologyTypes of DataThe present study is based on the both the primary dataand secondary data.

Primary DataThe primary data was collected through a questionnairefrom bank employees personally and also collected byobservations and interview .

Secondary DataThe secondary data related to the topic was collectedfrom various books, websites, journals and newspapers.

Statistical Tools :For this study of HR practices, the researcher used thefollowing statistical tools: Percentage, Mean , standarddeviation and correlation

Sample Design:This study is based on a sample of employees selectedusing convenient sampling technique The data wascollected with an assurance that information obtainedwould be kept confidential. The target population of thestudy was employees from puducherry union territorywho are serving as employees of different privatebanks..The sample was obtained from all the levels,but respondents were selected only from 10 private banksof puducherry. The sample included 100 employees fromselected banks and only 85 of them responded properly.the questionnaire consists of 8 HRM dimensions .thequestionnaire was developed using likert’s scale. Thesole purpose of this sampling was to get an honestpicture of HRM practices of the sector selected.

Ten “C” Model of HRMHRM experts have proposed many models to interpretexplain and also advocate HR policies and practices intune with specific ideology and philosophy. There areten essential principles- and they are:1. Comprehensiveness -The HRM strategy of an

organization must include all the aspects of peoplemanagement, typically starting from recruitment topost separation programmes.

2. Credibility -The HRM practices must build trustbetween staff and top management and encourageemployees’ belief in HRM strategies.

3. Communication -The objectives of organization andthat of HRM must be understood and accepted byall the employees.

4. Cost effectiveness -The reward and promotion systemmust be fair.

5. Creativity-The competitive advantage of the companymust stem from its unique HR Strategies.

6. Coherence -HRM activates and initiatives must forma meaningful whole.

7. Competence -HRM strategy will be crafted in sucha way that organization becomes competent toachieve its objectives with the support of individualcompetencies.

8. Control -HRM policies and practices must ensurethat performance of HR is consistent with businessobjectives.

9. Change -The basic premise of HRM strategy mustbe that continuous improvement and developmentis essential for survival.



10.Commitment -The last C stresses upon that employeeare to be motivated to achieve organizational goals.

Fifteen Key Roles of HRM Practitioners1. Evaluator : The role of assessing the impact and

utility of a programme and, service to the employeesand organization.

2. Group facilitator: The role of managing groupdiscussions and group process, so that individualslearn and group members feel the positiveexperience.

3. Individual development counsellor: The role of helpingan individual to assess personal competencies,values, goals and identify and plan development andcareer actions.

4. Instructional writer: The role of preparing writtenlearning and instructional material.

5. Instructor: The role of presenting information anddirecting structured learning experiences so thatindividuals learn.

6. Manager of training and development: The role ofplanning, organizing, staffing, controlling, and oflinking training and development operations with otherorganization units.

7. Marketer: The role of selling, training and developmentviewpoints, learning packages, programmes andservices to target audiences outside one’s own workunits.

8. Media specialist: The role of producing software andusing audio, visual, computer, and other hardwarebased technologies for training and development.

9. Needs analyst: The role of defining gaps betweenideal and actual performance and specify the causeof gaps.

10. Programme administrator: The role of ensuring thatthe facilities, equipment, materials, participants, andother components of a learning event are presentand the programmes logistics run smoothly.

11. Programme designer: The role of preparing objectives,defining content, and selecting and sequencingactivities for a specific programme.

12. Strategist: The role of developing long range plansfor what the training and development structure,organization, direction, policies, programmes,services and practices will be in order to accomplishthe training and development mission.

13. Task analyst: The role of identifying activities, tasks,sub-tasks, human resource, and supportrequirements necessary to accomplish specificresults in a job or organization.

14. Theoretician: The role of developing and testingtheories of learning, training and development.

15. Transfer agent: The role of helping individuals to applylearning after their learning experience.

Hypothesis of the StudyH1 : There Is Significant Relationship Between

Education And Training And DevelopmentH2 : There Is Significant Relationship Between Marital

Status And Promotional Interest

Analysis and Findings : (Table -1)

Table -1

Descriptive Statistics

N Range Mean Std.

Deviation

Variance MEAN

RANK

Statistic Statistic Statistic Std. Error Statistic Statistic

RSS 85 4 3.21 .11 .97 .96 8

CP 85 4 3.26 .12 1.17 1.2 6

TD 85 4 3.79 .10 .95 .93 3

JS 85 4 3.47 .13 1.2 1.43 4

PA 85 4 3.82 .11 .972 .95 2

EIN 85 4 3.88 .14 1.23 1.58 1

CARPL 85 4 3.25 .13 1.16 1.237 7

MOT 85 4 3.43 .13 1.12 1.37 5



RECRUITMENT AND SELECTION-RSSCOMPENSATION PACKAGE-CPCAREER PLANNING-CARPLTRAINING AND DEVELOPMENT-TDPERFORMANCE APPRAISAL-PAJOB SECURITY-JSMOTIVATION-MOTEMPLOYEES INVOLVEMENT-EIN

From the above table , it is interpreted that employees involvement are playing an important role in the developmentof private sector banks with the rank of 1 followed by the concept that the employees performance are alwaysappraised for the development of banks. the last ranking goes to recruitment and selection process with theinterpretation that in banks recruitment is not based on qualification , efficiency and experience in the same field buton the basis of other things.the other dimensions like career planning, compensation, training are looking better forprivate banks as finance is not a problem for their development in the respective sector. Therefore, it is clear that alldimensions are not satisfying the employees equally.

education training

education Pearson Correlation 1 -.022Sig. (2-tailed) .843N 85 85

training Pearson Correlation -.022 1Sig. (2-tailed) .843N 85 85

Correlations -1

InterpretationH1 : There Is Significant Relationship Between Education And Training And DevelopmentThis hypothesis indicates that there is significant relationship between education level of the employees and theirtraining programme framed by the organization. The above table shows that negative correlation saying that norelation exists between education and the training provided by the private banks.

Correlations - 2

Marital Test Promotion Possibilities

marital test Pearson Correlation 1 .033Sig. (2-tailed) .766N 85 85

promotion possibilities Pearson Correlation .033 1Sig. (2-tailed) .766

H2 : There Is Significant Relationship Between Marital Status And Promotional Interest

This hypothesis indicates that there is significant relationship between marital status of the employees and theirpromotional interest in the organization. The above table shows small positive correlation saying that there isrelation between status of employees and the promotional interest to develop in the same company with no evidence.

ConclusionThis paper has shown meaningful and significant relationship between HRM practices ( recruitment, selection,performance-evaluation, training and development, career management and rewards) which was positively and



significantly related to managerial effectiveness. Thepresent study was conceived around the framework t ofeight HRM practices which shapes the pattern ofinteractions between and among employees of privatebanks. The study revealed that all the dimensions framedare not satisfying all employees working in private banksin same proportion in Puducherry. So that organizationcreates job according to work requirement and right kindof managerial people are appointed.. So, organizationsshould evaluate, train and reward employees for theirability and for their effectiveness. Most of the employeesare dissatisfied with the selection process, job security,package of salary followed by motivational aspects. Soin future private banks should try to improve all HRMpractices in order to achieve sustainability of successof all banks with the upcoming challenges like retention,health and wealth benefits, learning and development,succession planning and etc.,

RecommendationsOn the basis of the results found from the study someof the following suggestions are given with account ofthe improving the standard of the banks:.• equality in gender can be given in the future• can employ young and energetic persons under the

control hr professionals.• by improving training, the workforce of the private

banks will have all sorts of skills, knowledge and attitude.• the management should show clear career

development path.• almost a majority chunk of employees are very much

satisfied with the job security and a fruitfulcompensation package must be implement for alllevel of employees in private banks.

References• Armstrong, M. (2004), " A Handbook of Human

Resource Management Practice", 9th Edition, SouthAsian Published.

• Srivastava Ekta & Agarwal Nisha, (2012), "TheEmerging Challenges in HRM", International JournalOf Scientific & Technology Research Volume 1, Issue6.

• Drucker, P. (1998). Peter Drucker on the Professionof Management. Cambridge, MA: Harvard BusinessSchool Press..

• Rao.T.V. (1999), HRD Audit: Evaluating the HumanResource Function for Business Improvement. NewDelhi: Response Books.

• Rao.T.V. (2010), Managers Who Make a Difference:Sharpening Your Management Skills. New Delhi:Random House India.

• Agarwala, Tanuja (2002), "Innovative HumanResource Practices and HRD Climate: A Comparisonof Automobile and IT Industries", in Pareek, Osman-Gani,

• Ramnarayan & Rao T.V (Eds.), Human ResourceDevelopment in Asia, New Delhi: Oxford &IBH:3-10.

• Rao, T.V. (1985), "Integrated Human ResourceDevelopment System", in Goodstein D.

• Rao, T.V. & E. Abraham (1986), "Human ResourceDevelopment Climate in Indian organisation", in RaoT.V. & Pereira D.F. (Eds.), Recent Experiences inHuman Resources Development, New Delhi, Oxford& IBH: 70-98.



STATUS OF MICROFINANCE IN INDIA - A REVIEW

Shiva.G1

1. Assistant Professor Department of commerce Maharaja arts and science college,coimbatore.

IntroductionThe poverty has been described as a situation of“pronounced deprivation in well-being” and being pooras “to be hungry, to lack shelter and clothing, to beilliterate and not schooled” (World Bank, 2000-2001).Mehta and Shah(2001-02)defines poverty as „the sumtotal of a multiplicity of factors that include not just incomeand calorie intake but also access to land and credit,nutrition, health and longevity, literacy and educationand safe drinking water, sanitation and otherinfrastructural facilities. Poor people are particularlyvulnerable to adverse events beyond their control. It isalso seen that poor doesn?t have much voice in theinstitutions of the state and society. World Bank definespoverty as survival of an individual on less than $1.25per day. The poverty line in India measures only the mostbasic calories intake. It records not nutrition but thesatiation of hunger. At present the poverty line stands atRs 28/- and Rs 32/- per person per day for rural andurban areas respectively. The official line of governmentof India delivers a poverty rate of around 32% of thepopulation as opposed to 42% according to World Bank.India still accounts for one-third of the world?s 1.4 billionpoor people. It is evident from this statistics that, it is allabout the line one is drawing, one can slacken it toexclude people or tighten the line to include people.According to same world Bank report,(2008) 43% ofIndian children are malnourished, over 35% of Indiansare illiterates and more than 20 million children are outof school. The extremely poor people in India are largelyinvolved in subsistence type of activities. Their earningsare so meager that their expenditure and survival- needexceeds income. Anyhow, they manage their dailyrequirement with their meager earnings. But at the timeof exigency, they are forced to borrow from local moneylenders. This often results in borrowing small amount ofmoney at exorbitant rate of interest of as much as 120%per annum to meet urgent needs like treatment of ill andsick family members or repayment of previous loans etc.Thus the need for an institutional mechanism is felt.Some individuals tried to address the problem in anorganized way in the form of micro-credit. In fact theconcept of micro-credit is not new. Credit has beenavailable to poor for centuries in one form or other. Butthey are not organized and institutionalized. Moneylenders and chettiars (local money lenders of China) have

existed for a long time in Chinese and Indian communitiesto provide credit at high interest rate. Money lenderswere providing credit mortgaging land records and othervaluable assets like gold and silver ornaments and otherdomestic asset base like domestic animals. In case ofnon-recovery of loans, these mortgage items were beingimpounded throwing the borrowers to destitution. Povertyin rural area is a combination of factors like lack of microcredit, social stigma from failed attempt atentrepreneurship, institutional constraints on lending andinability to recover quickly from setback such as naturaldisasters and death of earning members. This realizationhas led to modern microcredit practices to address thesocial and political impediments to entrepreneurship asmuch as they try to solve the problem of creditavailability, adverse selection and moral hazard (Hollisand Sweetman, 1998). Robinson(2001) gives a veryplausible definition of microfinance. According to him,“Microfinance refers to small scale financial services forboth credit and deposit-that are provided to people whofarm or fish or herd; operate small or microenterpriseswhere goods are produced, recycled, repaired or traded;provide services; work for wages or commissions; gainincome from renting out small amount of land, vehicle,draft animals, or machinery and tools; and to otherindividuals and local groups in developing countries inboth rural and urban areas”.

Concept of MicrofinanceIn India, the history of microfinance dates back toestablishment of Syndicate Bank in 1921 in privatesector. During the early years, Syndicate Bankconcentrated on raising micro deposits in the form ofdaily/weekly basis and sanctioned micro loans to itsclients for shorter period of time. But microfinance cameto limelight only when Dr Yunus gave it a massmovement in Grameen Bank experiment. Microfinancecan be called a novel approach to provide saving andinvestment facility to the poor around world. Improvedaccess and efficient provision of savings, credit, andinsurance facilities in particular can enable the poor tosmoothen their consumption, manage their risks better,gradually build their asset base, develop their business,enhance their income earning capacity, and enjoy animproved quality of life. In India, microfinance mainlyoperates through Self Help Group (SHGs), Non



Government Organizations(NGOs), and Credit Agencies.It provides poor people with the means to find their ownway out of poverty. It put the power squarely in theirhands, giving them a larger stake in their own successthan one –time donation of food, goods, or cash. Theinitiatives of Government for poverty alleviation could notsucceed to the desired level, may be due to the factthat they do not take cognizance of power of the poor todeal with their own problems. Government tries to helpthem by way of subsidies and other help but theseinitiatives hardly reduce their poverty levels and are nota long term solution. This section of society if given withguidance, power of capital and productive assets canemerge as the successful entrepreneur. This can easilybe achieved by empowering them with power ofmicrocredit. The poor do not have any worthy asset base.Hence they have to be provided with mortgage free loan(Akula,2008). It has been proved beyond doubt fromGrameen Bank experiment. The system of microfinancewas introduced about 28 years back with an organizationof Grameen Bank in Bangladesh by a famous economistProf. Mohammed Yunus. He observed that most villagerswere unable to obtain credit at reasonable rates. So hebegan to lend them money from his own pocket, allowingthe villagers to buy materials for projects like weavingbamboo tools and making pots (New York Times, 1997).Ten years later, Dr Yunus had set up Grameen Bank asa project in one of the village in Bangladesh in 1976 toassist poor families by providing credit to them. Todaymicro-finance has been widely spread all over the worldas an effective tool to poverty eradication. It is foundthat microfinance has reached about 80 millionhouseholds and about, 20000 micro-finance Institutionare operating in developing countries of Asia, Africa,Europe and Latin America (Pillai, 2011).

Growth of Microfinance in IndiaPoverty alleviation has been one of the guiding principlesof the planning process in India. Government hasconsiderably enhanced allocation for the provision ofeducation, health, sanitation and other facilities whichpromote capacity building and well being of the poor.The Indian government puts emphasis on providingfinancial services to the poor and underprivileged sinceindependence. The commercial banks were nationalizedin 1969 and were directed to lend 40% of their loan atconcessional rate to priority sector. The priority sectorincluded agriculture and other rural activities and weakersection of society in general. The aim was to provideresources to help the poor to start their micro enterpriseto attain self sufficiency. The government of India hadalso launched various poverty alleviation programs likeSmall Farmers Development Scheme (SFDS) 1974-75,Twenty Point Programme(TPP) 1975, National Rural

Development Programme (NRDP)1980, Integrated RuralDevelopment Programme(IRDP)1980,Rural LandlessEmployment Guarantee Programme(RLEGP)1983,Jawhar Rozgar Yojna(JRY)1989, Swarna Jayanti GramSwarojgar Yojana(SGSY)1999 and many other programs.But none of these programs achieved their desired goaldue to poor execution and mal -practices on the part ofgovernment officials. Public funds meant for povertyalleviation are being misappropriated or diverted throughmanipulation by the locally powerful or corrupt(Mehta,1996). To supplement the efforts of micro creditgovernment of India had started a very good schemeviz. Integrated Rural Development Programme (IRDP) in1980. But these supply side program (ignoring demandside of economy) achieved little. It involved thecommercial banks in giving loan of less than Rs 15000/- to socially weaker section. In a period of nearly 20years the total investment was around Rs 250 billion toroughly 55 million families. But it was far from realizingits desired goal. The problem with IRDP was that itsdesign incorporated a substantial element of subsidies(25-50% of each family?s project cost) and this resultedin extensive malpractice and mis-utilisation of funds. Thissituation led bankers to view the IRDP loan as motivatedhandout and they largely failed to follow up withborrowers. The net result is that estimates of repaymentrates in IRDP ranged from 25-33%.The two decades ofIRDP experience in the 1980s and 1990s affected thecredibility of micro borrowers in the view of bankers andultimately, hindered access of the less literate poor tobanking services. This act of government had a seriouslong term impact on development of microentrepreneurship among the underprivileged of thesociety. Thus a very good and potential program whichonce claimed to be “the world’s largest microfinanceprogramme” failed due to poor execution and politicalinterference. The mid- term appraisal of the ninth planhad indicated that these programmes presented a matrixof multiple programmes without desired linkages. Theprogrammes suffered from critical investments, lack ofbank credit, over-crowding in certain projects and lackof market linkages. The programmes were basicallysubsidy driven and ignored the process of socialintermediation necessary for success of self-employmentprogrammes. A one-time provision of credit without followup action and lack of a continuing relationship betweenborrowers and lenders also contributed to the failure ofthe programmes. The planning commission constituteda committee in 1997 to review the effectiveness of self-employment and wage employment programmes. Thecommittee recommended the merger of all selfemployment programmes. It also recommended a shiftof importance from individual beneficiary approach to agroup based approach. It emphasized the identification



of activity clusters in specific areas and strong trainingand marketing linkages. The government of Indiaaccepted the recommendations of the committee. On1st April 1999 a new programme called SwarnajayantiGram Swarojgar Yojana(SGSY) was launched byamalgamating programmes like IRDP(Integrated RuralDevelopment Programme) and a number of alliedprogrammes such as TRYSEM(Training of Rural Youthfor Self Employment), DWCRA(Development of Womenand Children in Rural Areas),SITRA(Supply of ImprovedToolkits to Rural Artisans), GKY(Ganga Kalyan Yojana)and MWS(Million Wells Schemes). This is a holisticprogramme covering all aspects of self-employment suchas formation of Self Help Groups(SHGs),training, credit,technology, infrastructure and marketing. The programmeaims at establishing a large number of microenterprisesin rural areas. SGSY is a credit-cum- subsidyprogramme. It lays emphasis on activity clusters. Thisprogramme has got tremendous response from thebeneficiaries. The number of SHGs under this programis about 2.25million with an investment of Rs 14,403crore, profiting over 6,697million people (Wikipedia).Similarly, the entire network of primary cooperatives andRRBs, established to meet the need of the rural sectorin general and poor in particular, has proved a colossalfailure. Saddled with burden of directed credit and arestrictive interest regime, the position of the RRBsdeteriorated quickly while cooperatives suffered from themalaise of mismanagement, privileged leadership andcorruption born of excessive state patronage (Sinha,2003). The microfinance initiative in the private sector inIndia can be traced back to initiative undertaken by ShriMahila SEWA (Self Employed Women?s Association)Sahakari Bank in 1974 for providing banking services tothe poor women employed in the unorganized sector inAhmadabad in Gujarat. This Bank was established atthe initiative of 4000 self employed women workers whocontributed a share of Rs10 each with a specific objectiveof providing credit to these women so as to empowerthem and free them from vicious circle of debt. CurrentlySEWA Bank has over 318,594 account holders with totalworking capital of Rs 1291.89 million(Mar?09).MYRADA(Mysore Rehabilitation and DevelopmentAgency ) of Karnataka was another NGO to start in 1968to foster a process of ongoing change in favour of therural poor. While the objective is to help the poor helpthemselves, MYRADA achieves this by forming Self HelpAffinity Groups (SHGs) and through partnership withNGOs and other organization in 1984-85. At present itis managing 18 projects in 20 backward districts ofKarnataka, Tamil Nadu and Andhra Pradesh. These initialinitiatives had a much localized operation and werelimited to their members only. Hence it failed to take theshape of a mass movement. In India, initially many NGO

microfinance institutions (MFIs) were funded by donorsupport in the form of revolving funds and operatinggrants. But it is only after intervention of National Bankfor Agriculture and Rural Development (NABARD) in 1992in the field of microcredit, the movement of microfinancegot a boost in India. In India around 70% of landless andmarginal farmers did not have a bank account and 87%of poor had no access to credit from a formal source(NCAER Rural Financial Access Survey 2003).The shareof formal financial sector in total rural credit was 56.6%compared to informal finance at 39.6% and unspecifiedsource at 3.8%(RBI Report 1992). There is a hugepotential of microcredit in rural India. The Reserve Bankof India has advocated for financial inclusion of majorityof population for economic development of our country.Access to affordable financial services specially creditand insurance enlarges livelihood opportunities of poor.Apart from social and political empowerment, financialinclusion imparts formal identity and provides access tothe payment system and to saving safety net like depositinsurance. Hence financial inclusion is considered tobe critical for achieving inclusive growth (U Thorat, 2007).The RBI Governor, Y.V.Reddy(2007) gave a simpledefinition of financial inclusion as “Ensuring bank accountto all families that want it”. He said it would be the firststep towards reaching the goal of bank credit as a humanright as advocated by Nobel laureate ProfessorMohammed Yunus. Now the microfinance serviceproviders include apex institutions like National Bankfor Agriculture and Rural Development (NABARD), SmallIndustries Development Bank of India (SIDBI) andRashtriya MahilaKosh (RMK). At the lower level we havecommercial Banks, Regional Rural Banks andcooperatives to provide microfinance services. The privateinstitutions that undertake microfinance services as theirmain activity are generally referred to as Micro FinanceInstitutions (MFIs) in Indian context. There are also someNGOs which lend credit to SELF HELP GROUP (SHGs).The NGOs that support the SHGs include MYRADA inBangalore, Self Help Women?s Association (SEWA) inAhmadabad, PRADAN IN Tamilnadu and Bihar, ADITHIin Patna, SPARC in Mumbai. The NGOs that are directlyproviding credit to the borrowers include SHARE inHyderabad, ASA in Trichy, RDO LOYALAM Bank inManipur (Tiwari, 2004).

Modes of Delivery of MicrofinanceMicro Finance Institutions (MFIs) around the world followa variety of different methodologies. The focus of suchservice is women rather than men for the reason womenare more judicious and economical to men. The followingare major methodologies employed by MFIs for deliveryof financial services to low income families.



Self Help Groups(SHGS)The Self Help Groups( SHGs) is the dominant microfinancemethodology in India. In this case the members of SelfHelp Group pool their small savings regularly at a prefixedamount on daily or weekly basis and SHGs provide loanto members for a period fixed. SHGs are essentiallyformal and voluntary association of 15 to 20 peopleformed to attain common objectives. People fromhomogenous groups and common social back groundand occupation voluntarily form the group and pool theirsavings for the benefit of all of members of the groups.External financial assistance by MFIs or banksaugments the resources available to the group operatedrevolving fund. Saving thus precede borrowing by themembers. NABARD has facilitated and extensivelysupported a program which entails commercial bankslending directly to SHGs rather than via bulk loan toMFIs. If SHGs are observed to be successful for at leasta period of six months, the bank gives credit usuallyamounting 4 times more than their savings

Individual Banking Programmes (IBPS)In Individual Banking Programmes(IBPs) there isprovision by Microfinance institutions for lending toindividual clients though they may sometimes beorganized into joint liability groups, credit and savingcooperatives. This model is increasingly popular throughcooperatives. In cooperatives, all borrowers are membersof organization directly or indirectly by being member ofcooperative society. Credit worthiness and loan securingare a function of cooperative membership in whichmember?s savings and peer pressure are assumed tobe key factors. BAXIS a MFI based in Ahemadabad,offers both the joint liability group and individual lendingloans in addition to loans to intermediaries. Bank ofRakyat at Indonesia, arguably the world?s biggest andprofitable microfinance institution is following this model.

Grameen ModelGrameen Model was pioneered by DR MohammedYunus of Grameen Bank of Bangladesh. It is perhapsthe most well known and widely practiced model in theworld. In Grameen Model the groups are formedvoluntarily consisting of five borrowers each. The lendingis made first to two, then to the next two and then to thefifth. These groups of five meet together weekly, withseven other groups, so that bank staff meets with fortyclients at a time. While the loans are made to theindividuals, all in the group are held responsible for loanrepayment. According to the rules, if one member everdefaults, all in the group are denied subsequent loans.

Mixed Mode : l Some MFIs started with the Grameenmodel but converted to the SHG model at a later stage.

However they did not completely do away with Grameentype lending and smaller groups. They are a mix of SHGand Grameen model. The main difference between theseprograms is rather marginal. Grameen programmes havetraditionally not given much importance to savings as asource of funds where as SHGs place considerableemphasis on the source of funds. The SHG programshave compulsory deposit schemes in which the membersthemselves determine the amount. The SHGs model iswidely used in India. According to Vijay Mahajan (2003),Managing Director of BASIX, the SHGs and Grameenmodels offer economies of transaction cost to MFIs, butat the cost of members time because the unit of dealingis “group” rather than individual. In contrast, MFIs offeringindividual loans incur higher transaction costs for servingtheir borrowers. Among all methodologies, Self HelpGroups (SHGs) model is more popular in India. Thereare three models of SHGs. The salient features are givenbelow:- i) SHGs-Bank Linkage model:-This modelinvolves the SHGs financed directly by the Banks viz.CBs(Public Sector and Private Sector), RRBs, andCooperative Banks. MFI-Bank Linkage model:-Thismodel covers financing of micro Finance Institutions(MFIs) by banking agencies for on ward lending to SHGsand other small borrowers. iii) NGOs-Bank LinkageModel:-Under this model NGOs promote the linkagebetween banks and SHGs for savings and credit.

Present Status of Microfinance in IndiaMicrofinance sector has traversed a long journey frommicro savings to microcredit and then to microenterprisesand now entered the field of micro insurance, micropension. Financial institutions in the country continueto play a leading role in the microfinance program fornearly two decades now. They have joined handsproactively with informal delivery channels to givemicrofinance sector the necessary momentum.

Impact of MicrofinanceA number of field researches have been conducted byvarious agencies to study the impact of microfinance onsocio-economic aspects of the clients. These fieldstudies include study commissioned by NABARD in2002 with financial assistance from SDC where GTZwhich covered 60 SHGs in eastern India. The World BankPolicy Paper details in the findings of Rural FinanceAccess Survey (RFAS) done by World Bank inassociation with NCAER. The RFAS covered 736 SHGsin the state of Andhra Pradesh and Uttar Pradesh. Thesefield studies reveal divergent research findings. But thecommon findings are of the opinion that there is someincrease in income levels and household assets in realterms among the clients. These studies also brought



out the fact that major occupation of group memberswas agriculture along with other activities like farm labourand poultry. Being rain fed area, lack of irrigation facility;declining agricultural outputs and fragmentation of landhave accentuated their vulnerabilities over a period oftime. The group members lack any sort of specifichandicraft skills and do not receive any skill developmenttraining for undertaking any other non- farm activities. Inmost of the cases, loans from financial organizationsare used by them for meeting their consumptions andemergency requirement. It also shows that groupmembers do not have confidence to use credit forproductive purposes in view of lack of opportunities andskills. Irrigation and depressed commodity prices actas deterrent in farm sector investments, while lack ofskills and invasion of rural market by big consumer goodscompanies reduce the scope for rural micro enterprises.In this scenario it seems rather naïve to visualizeflourishing of micro enterprises through provision ofmicrocredit (DEVRAJA, 2011). The growth ofmicrofinance organizations in India has also to be seenin the light of financial sector reforms in India. Under thenew approach, institutional viability is of prime concernand instruments of directed credit and interest ratedirectives have been totally diluted or done away with.As a consequence, banks are increasingly shying awayfrom rural lending as well as rationalizing their branchnet work in rural area. Burgess and Pandey (2004) havebrought out this fact in their study by stating that whilebetween 1977 and 1990 (Pre reform period) more bankbranches were opened in financially less developedstates, but the pattern was reversed in post reform period.Thus the access of the rural poor to credit throughtraditional bank lending has been reduced in post reformera. The policy recommendation is to fill up this gapthrough microfinance. As per the new design NABARDis aggressively lending rural poor through Self HelpGroups and Microfinance Institutions. High recovery rateunder the program is used to justify the dictum that poorneed timely and adequate credit rather than cheap credit.Robinson(2001) is probably right in observing thatcommercial microfinance is not meant for core poor ordestitute but is rather aimed at economically active poor.He opines that providing credit to people who are toopoor to use it effectively helps neither borrower nor lenderand would only lead to increasing debt burden. Hesuggests that this segment should not be the targetmarket for financial sector but of state poverty and welfareprograms.

Discussion and Conclusion Microfinance is multifaceted and works in an integratedsystem. There are many stake holders and each onehas a definite role to play. In the core there is client.

There is a second level called micro level where MFIs,NGOs, SHGs and Grameen work to provide financialsupport to individual client. Apex institutions likeNABARD, SIDBI and other nationalized Banks operatein Meso-Level to provide infrastructure, information andtechnical support to micro level players. Around all theselevels, there are financial environment, Regulations,legislations and regulators called Macro level. Withpassage of time new opportunities and new challengesare being felt in the field of microfinance. In recent yearsmicrofinance is in news for bad reasons. There are anumber of suicide cases of micro credit clients all overIndia for excess interest charges and high handednessof recovery agents in recovery of loans. So, governmentof India has brought out a legislation to check the highinterest rate on micro credit and protect the poor fromclutches of greedy MFIs. Government of India introducedMicro Finance Institutions (Development and Regulation)Bill 2012 on May 22, 2012 to establish a regulator underRBI to regulate and supervise the activities of NGOsand MFIs. The main features of the Bill are as follows:the Bill allows the central government to create aMicrofinance Development Council with officers fromdifferent ministries and Departments. The Bill requiresall MFIs to obtain a certificate of registration from RBI.The RBI has the authority to set maximum annualpercentage rate charged by MFIs and sets a maximumlimit on the margin MFIs can make. Margin is definedas the difference between the lending rate and the costof funds. It is also responsible for redressal of grievancesfor beneficiaries of microfinance services. These initiativesmay go long way in strengthening the micro financestatus in India. Lending to the poor through microcreditis not the end of the problem but beginning of a new era.If effectively handled, it can create miracle in the field ofpoverty alleviation. But it must be bundled with capacitybuilding programs. Government cannot abdicate itsresponsibility of social and economic development ofpoor and down trodden. In absence of any special skillswith the clients of microcredit, the fund is being used inconsumption and procurement of non-productive assets.Hence it is very important to provide skills developmenttraining program like handicraft, weaving, carpentry,poultry, goat rearing, masonry, bees farming, vegetablefarming and many other agricultural and non agriculturaltraining. Government has to play proactive role in thiscase. People with some special skills have to be givenpriority in lending microcredit. These clients should alsobe provided with post loan technical and professionalaid for success of their microenterprises. If governmentand MFIs act together then microcredit can play a greatrole in poverty alleviation.



Bibilography1. Astha, A(2009), “ADVANCED TECHONOLOGIES FOR MICROFINANCE” Business Science Reference,Newyork.

Bhattacharyya, A., Sahay,P. and Lovell,C.A.K(1997)2. “The impact of liberalization on the productive efficiency of Indian commercial banks”, European Journal of

Operation Research 98(332-345. Qayyum, A. and Ahmad, M. “Efficiency and sustainability of microfinanceInstitutions in South Asia” Pakistan Institute of Development Economics, Pakistan. Edward, P. and Olsen,(2006)W. “

3. Paradigms and reality in Microfinance: The Indian case” Perspective on Global Development andTechnology,Leiden,vol.5,issue 1-2. Littlebetth, E.,Morduch, J.and Hashmi, Syed(2003)

4. “Is microfinance an effective strategy to reach the millennium development goals?” Focus Note No 24,January2003,CGAP 1818 H Street,NW Washington DC



INFLUENCE OF SUPPLY CHAIN MANAGEMENT ONTHE PERFORMANCES OF KNITWEAR EXPORT UNITS

IN TIRUPUR

K.V.Yuvaneswari1 Dr. B.Thangaraj2

1. Assistant Professor, Department of Commerce, Maharaja Arts and Science College, Coimbatore.2. Assistant Professor, Department of Commerce with Computer Application, Government Arts College, Ooty.

Introduction and Research DesignIndia’s textiles sector is one of the oldest industries inIndian economy dating back several centuries. The Indiantextiles industry, currently estimated at around US$ 108billion as on March 2016, is expected to reach US$ 223billion by 2021. The industry is the second largestemployer after agriculture, providing employment to over45 million people directly and 60 million people indirectly.The Indian Textile Industry contributes approximately 5per cent to India’s gross domestic product (GDP), and14 per cent to overall Index of Industrial Production (IIP).Textiles sector is one of the largest contributors to India’sexports with approximately 11 per cent of total exports.The textiles industry is also labour intensive and is oneof the largest employers. The industry realized exportearnings worth US$ 41.4 billion in 2014-15, a growth of5.4 per cent, as per The Cotton Textiles Export PromotionCouncil (Texprocil). The textile industry has two broadsegments. First, the unorganized sector consists ofhandloom, handicrafts and sericulture, which areoperated on a small scale and through traditional toolsand methods. The second is the organized sectorconsisting of spinning, apparel and garments segmentwhich apply modern machinery and techniques such aseconomies of scale .

Tirupur, employs around five lakh workers directly, hasabout 800 garment manufacturing and exporting firmsand 1,200 merchant exporters. Of them, 300 garmentmanufacturing firms are producing garment for domesticmarket. Tirupur is also home to about 1,800 job-workinggarment manufacturing units, 425 dyeing units and about3,085 supporting units including for finishing,embellishment, compacting and raising units . Knitweargarment factories operating across Tirupur cluster aretaking utmost care in producing quality garments andmaintaining delivery schedule, the retail stores prefer tosource from Tirupur. The area provides the best qualityand variety in T-shirts, jerseys, pullovers, cardigans,ladies blouses, dresses, children wear, sportswear, nightdress, swim wear .

Significance of the StudyIndia is one of the few countries that own the completesupply chain in close proximity from diverse fibers to alarge market. It is capable of delivering packagedproducts to customers comprising a variety of fibers,diverse count sizes, cloths of different weight and weave,and panoply of finishes. This permits the supply chainto mix and match variety in different segments to delivernew products and applications. This advantage is furtheraccentuated by cost based advantages and diversetraditions in textiles .While, it is a undeniable fact thatthough knitwear exports from are growing, they couldbe better. Industrial experts general opinion that sincemost Indian garment making companies operate on aCut, Make, Trim model (CMT), with only a few havingtheir own design setups, a general lack of design andproduct development along with supply delays aredeterring in term of foreign buyers souring garmentsfrom India.

Statement of ProblemIn the fast changing global business scenario, tomaintain the global market share, the Indian apparelexport industry should on one hand consolidate theirproduction facilities to handle large orders and improvetheir productivity and on the other end they have to focuson improving their supply chain process and its effectivemanagement. Since, Tirupurisone of the India’s largestapparel export hubs and it has various supply chainmanagement model. In Tirupur, garment production isorganized in a number of stages: The major stages areknitting, dyeing and stitching, while the minor stagesinclude calendaring(shrinkage control), printing andcuring. Tirupur’s success as an industrial clusternevertheless owes a lot to the presence of these job-workers and indigenous production units. Co-ordinationbetween the job – order processing units cannot beachieved without adoption of effective supply chainmanagement process. Realization of this fact hasprovided a prelude for conduct of this research work.This study aims to analyse the perception of exportersoperating in Tirupur cluster on the influence of supply



chain management on the performances of knitwearexport units in Tirupur.

Scope of the StudyThe study will be useful to the manufacturing, merchantand third party exporters, industrial agencies, tradeassociation and researchers in understanding theimportance of SCM for the growth and prospects ofTirupur knitwear sector and required measures to beadopted for their sustainability export operation andbusiness by adoption of effective SCM practices.

Objectives of the StudyFollowing objectives are framed for the effective conductof this study.• To study the business profile status of the garment

manufacturers and exporters operating in Tirupur.• To analyse the knitwear exporters level of awareness

towards SCM and their knowledge towards the factorsthat impact their business’s SCM operations.

• To understand the primary criterion focused by theknitwear exporters while implementation of SCMpractices and nature of benefits they have realiseddue to effective implementation of SCM practices.

• To assess the nature of problems faced by the knitwearmanufacturers and exporters in implementation ofSCM practices.

• To evaluate nature of changes except to make in thecurrent SCM practices for the future businesssuccess and sustainment and to offer valuablesuggestion for enhancement of SCM practices acrossTirupur knitwear cluster.

Hypotheses of the StudyResearch MethodologyThe research methodology of the study consists of twostages.Stage I : First stage of the research was exploratory

in nature. This was done in two phases.The initial phase was to undertake detailedsecondary data search knitwear exportsfrom India and SCM practices adhered bythe Indian knitwear manufacturers.

Stage II : A descriptive research was carried out atthe second stage by applying a surveymethod. Data for the study were collectedvarious knitwear manufacturers andexporters in Tirupurdistrict. The tool usedfor data collection was questioner. A well-structured closed ended questionnairewas prepared by the researcher for theeffective data collection.

Area of the StudyThe Tirupur cluster has grown as a highly linked (althoughinformal) cluster of units which together convert cottonto knitwear products. Individual units are highlyspecialized at the manufacturing of fabric, dyeing,processing, knitting and export marketing.

Sampling FrameworkTEA (Tirupur Exporters Association has a membershipof 927 Life members and 155 Associate Members). Ofwhich 70 per cent of the exporters generally merchandisetheir services from the indigenous support serviceproviders i.e., the merchant exporters and themanufacturing exporters. Thus, the sample populationwas restricted to merchant exporters only.

Data SourceBoth primary and secondary data were used for theeffective conduct of this study. The primary data requiredfor the study were collected with help of structuredquestioner. The secondary data needed for the studywere sourced from various magazines, journals, internetand thesis works.

Statistical Tools AppliedAccording to the nature of the data and interpretationsrequired, appropriate statistical tools have been applied.The following tools have been applied in the study:Frequency distribution, Weighted Average Likert’sScaling, ANOVA Test, Independent ‘t’ test and correlationmatrix.

Limitations of the StudySome of the limitations of the study are:• The study was confined to knitwear firms located at

Tirupur cluster only, thus the study suffers fromregional limitations.

• Some of the respondents refuse to cooperate anddeny information, or they supply partial informationthat may not be usable, or they deliberately providefalse information.

• Time and resources were also considered as thelimiting factors.

Review of LiteratureIntroductionReview of literature helps a researcher to get acquaintedwith his/her selected research problem and also mayprovide some guidelines in selecting proper researchmethodology. It is also helpful in finding out the researchgaps in the existing literature. This will help theresearcher in fine-tuning his/her research problem andmethodology. Another advantage of reviewing in theexisting literature is that in cases where the research



problems are similar, the conclusions and findings maybe easily compared. This will help the researcher indetermining whether his/her findings are practicallyviable. The literature under review may be of two types:(i) concerning the conceptual and theoretical framework.(ii) The empirical literature dealing with the studies madein the past which are similar to the one that theresearcher intended to undertake. The basic outcomesof such review will be the knowledge as to what data areavailable for analytical purposes, which will help theresearcher to specify his/her own research problem in amore meaningful way. This chapter contains review onthe importance of textile and clothing sector for economicgrowth of India and its performances, definitions of SCM(Supply Chain Management) and supply chainmanagement practices of textile and clothingmanufacturers and exporters.

Importance of Textile and Clothing Sector forEconomic Growth of India and its PerformancesTextile and Clothing sector is one of the most importantsectors in the Indian economy. Apart from providing oneof the basic necessities of life the textile industry alsoplays a pivotal role through its contribution to industrialoutput, employment generation and the export earningsof the country. “Currently it contributes about 14per centto industrial production, 4 per cent to GDP and 17percent to the country’s export earnings. It provides directemployment to over 35 million people. The textile sectoris the second largest provider of employment afteragriculture.”(Annual Report, 2010-11, Ministry of Textiles).

Aggarwal(2001) study aimed to analyse the nature ofimprovement in India’s exports of textile and garmentindustry. The study pointed out that India’s garment andtextile exports were likely to face fresh challenges withphasing out of Multi-fiber agreement by 2005, as well asseveral regional tradetreaties, such as NAFTA(NorthAmerican Free Trade Agreement).

BalajiSaravanan (2002) focused that export performanceof Indian garment sector analyzed the exportperformance of Indian garments. The study concludedthat the seasonal nature of demand for Indian garmentshas proved to be very cost effective mode of production.The study also highlights that fact that various policychanges are needed to enable in post quota regimeespecially, focusing on the problems of garmentexporters located in Ludhiana and Delhi: for the futureexpansion of this industry, for substantiality in fashionand growth of Indian garment exports.

Jaikumar. R (2003) research paper highlighted that inthe post GATT period, textile reforms will becomeinevitable creating a number opportunities for Indiantextile exporters. This paper discussed various

advantages like large areas under cotton cultivation, lowlabour cost, liberal import policy and a wide variety ofskills advantage in woolen and blended fabrics. It alsothrows light on various constraints faced by Indianexporters due to over dependence on cotton, fabric,souring labour productivity and competition from globalplayers like china. India’s ambition to realize a biggershare of the cake will remain unrealized unless stepsare taken to overcome the constraints faced by theexporters.The study observed a sharp difference betweenthe two groups i.e., Chain and India. The studypinpointedthat Indian knitwear had the distinctadvantages on delivery and price whereas; the USimporters felt the advantage lay in design and qualityproduct. On the other hand, the Japanese importers feltthat the Indian knitwear had advantage in price andservice. The study suggested about the strategies forthe competitive advantage. That is, the qualifyingelements for the exporter were identified as costadvantage, product quality advantage, reliabilityadvantage, delivery advantage and fabric advantage. Theorder winning elements were time/speed advantage,design/product development advantage, productivityadvantage, service advantage and image advantage.

Brain Carver et. al (2004) research study gave an overview of the Indian Textile industry, starting from its ancientand established roots more than 5000 years ago untilpresent time. The researchers had revealed prevailingsituation and present the country's business structuremajor competitors, as well as current changed andchallenges.

MeenuTewari (2005) study focused to analyse implicationof World Trade organisation for Indian Textile Industry,Textile Committee.The author strongly comments thatIndia, quota removal lead integrator in the global marketfor clothing, has followed a path to integration that isquite different from the experience of some of its majorcompetitors of India. Unlike China, Mexico, EasternEurope and other South Asian countries, India's recentsurge in clothing exports has occurred despite the lackof major FDI in textileandapparel, or entry into preferentialregional trade agreements with buyer countries, or anysignificant direct role of global buyers. The changes indomestic policy and in the structure of domestic demandthroughout the 1980s and 1990s played an importantrole in triggering new growth in India's textiles andapparelexports, and reshaping the capabilities of localfirms. The study has analyzed three features of India'srecent integration into global clothing markets.Thestriking emergence of design as a source of comparativeadvantage in Indian apparel, the growing importance ofoutward-bound investment by Indian clothing firms inrecent years, and the powerful new role that retail isplaying in organizing the Indian domestic market, driven



in part by surging consumer demand from entirely newmid-market youth segments associated with thecountry's IT-BPO boom.

Contribution of TirupurTirupur being one of the three important clusters in India,focus on knitwear garments production (the other twoare Ludhiana and Kolkata) is largely focused on cottonknitwear exporting. The major product that are exportedfrom Tirupur textile exporters are T-shirts. The T-shirtsare mainly produced and exported to the low-end retailoutlets in Europe and the United States. Tirupur is nowa leading exporting center of knitted garments andundergarments. It is a well-integrated cluster withmaximum number of units in to garment making followedby knitting, dyeing and bleaching, fabric printing, otherancillary units and compacting and calendaring units.Tirupur is now a leading exporting center of knittedgarments and undergarments. Few reviews thatdiscussed about the contribution of Tirupur knitwearcluster to the growth of Indian economy is discussed inthis section.

Sharad Mathur (2001) study aimed to draw an overviewabout the evolution of Tirupur Knitwear circle. The studypoints out that Tirupur have become one of the hubs inthe areas of knitted products and fabrics. The authorstressed that in recent times, it has emerged as theknit capital of India for the export market. Mylsamy(2002) conducted a study on the performance of knitwearexport units in Tirupur. He focused that the investmentpattern of the knitwear units and the production ofknitwear units. His study revealed that the majority ofthe units have employed capital below 2500 thousandsand capital was borrowed from banks and concentratingon the production of all knitwear items. Around 10 percent and job orders of knitting, processing andcalendaring are done on credit.

Importance of Supply Chain Management forKnitwear SectorIntroductionThe apparel industry stands out as one of the mostglobalized industries in the world and it is a supply drivencommodity chain led by a combination of retailers,contractors, subcontractors, merchandisers, buyers, andsuppliers; each plays an important role in a network ofsupply chains which spans from fibers to yarn, to fabrics,to accessories, to garments, to trading and to marketing.The peculiar characteristics of apparel supply chain areshort product life cycle, high volatility, low predictabilityand high impulsive purchasing. These factors bring highpressure to apparel retailers to manage their supplychains. Moreover in today’s competitive environment,

markets are becoming more international, dynamic, andcustomer-driven and customers are demanding morevariety, better quality and service, including both reliabilityand faster delivery.

Exhibit Evolution of the Indian Textile Sector

Fig. 1

1854-1900

1901-1950

1951-2000

2000-14

2014-Onwards

Source : Union Budget 2015-16, Make in Indiahttp://www.ibef.org/download/Textiles-and-Apparel-August-2015.pdf”

In the apparel sector, garment firms operating in Tirupurare subcontractor and producing at the low end of themarket. Basically they are performing cutting, makingand trimming (CMT) activities. The RMG industry is highlydependent on imported raw material. About 90per centof woven fabrics and 60per cent of knit fabrics areimported to make garments for export That’s why thissector needs to maintain a long supply chain (backwardand forward). Besides rudimentary application of ICT andinefficient port management limits its ability to respondquickly to market change, which is very essential in thefashion market Therefore this industry takes maximumlead time to process an order. In India’s the lead time forapparel export varies between 50-70 days, whereas thetime for Sri Lanka is about 19-45 days, China 40-50days and for Bangladesh 90-120 days for similar products.

Knitwear Production ProcessIn knitted garment industry, two types of fabric are used.They are cotton and woolen knit fabrics. These fabricsare made from cotton and woolen yarn. The knitted fabricis knitted in a knitting machine. The yarn knitted throughloops formed during the knitting process and the resultantfabric is in tubular form. There are a few machines thatmanufacture knitted fabric in flat form like the color ribknitted machine. The fabric so manufactured is thenprocessed (bleached, dyed, Mercerized and compacted),according to the kind of end product, before it is sent forgarment manufacturing. As many as 82 differentmachines are used to make knitted garments. Thereare different kinds of knitting machines, single jersey,



double jersey inter lock, rib, auto striper; fleece, mini jacquard and jacquards. Each machine manufactures differentkinds of fabric. These machines are either manufactured domestically or imported. Single jersey fabric is the mostwidely used material in T-shirts manufacturing. The fabric is also used in the manufacture of vests, briefs, panties,and ladies dresses. The double jersey is a heavier fabric and is used as ‘winter wear’. The fabric would have a higherGSM (Grams per Square Meter) compared to the single jersey. The rib machine manufactures fabrics with ribs.This machine manufactures fabrics with strips of various sizes. Dyed yarns of different colors are used in themanufacture of the fabric. Fleece fabric is normally used in the manufacture of winter garments and they give avelvet finish to the fabric. The cotton garment production process flow chart is given in.

SCM in Knitwear SectorToday, manufacturing organizations in their domestic /export operations, increasingly find that, to successfullycompete in the globalised domestic and international markets and the networked economy, they must rely oneffective supply chains. Knitwear manufacturing and exporting units are of no exception.

The Asian knitting industry, with the predominance of small and medium enterprises, engaged in direct and indirectexports, is one of the major contributors of national income. While knitwear manufacturing and exporting firms inEurope and North America compete in the competitive global market place, using their supply chain as the weapon,their counterparts, in Asia, find it difficult to practice. They are increasingly becoming unable, to meet competitionand utilize the market opportunities, opened up by the removal of quota system, especially in the developedcountries.

Tirupur Industrial Cluster Development and CharacteristicsA cluster can be defined as sectorial and geographical concentration of enterprises facing common opportunitiesand threats. The presence of MSMEs (Medium and Small Manufacturing Enterprises) in a cluster give rise toexternal economies like emergence and growth of specialized supplier of raw material, component and machinery,sector specific skills etc. It favour the emergence of technical, administrative and financial services, creates aconducive ground for development of inter-firm cooperation and also cooperation among public and private institutesto promote local production, innovation and collective learning1. India has 388documented industrial clusters,around 400 handloom clusters, about 3,000 handicraft cluster sand 6500 micro-enterprise clusters that contributesignificantly to its economy, and provide employment to more than 35 million people

Table - 3.1 : Spread of Units in The Textile Value Chain In Tirupur Cluster

Source : Tirupur Exporter Association (TEA)

Value Chain Activities Number of Units

Garment Making 2500

Knitting Units 1500

Dyeing and Bleaching 700

Fabric Printing 500

Other Ancillary Units 500

Compacting and Calendaring 300

Embroidery 250

Total 6250

Tirupur cluster development programme focused on strengthening individualunits throughout the production chainby providing linkages for technology, funding and trainingof personnel.



Exhibit - 3.5 : Organizational Structure of A Firm

Flow Chart - 1

Purchase

Fabric

CEO

Admn&Finance Manager Marketing

Raw Material Operation Merchandising Production Quality Control

Planning Process Control

Sewing Sampling

Elec. Data Process

Accounts Export Documents

Acc - Stores

ConclusionThe economic significance of knitwear exports for Indian economic growth, its contribution to the Indian GDP(Gross Domestic Products) and also based on the primary understanding gained about Tirupur Knitwear cluster.



RENTENTION STRATEGY

R.Udhaya Rekha1

AbstractEffective employee retention is a systematic effort by employers to create and foster an environment that encouragescurrent employees to remain employed, by having policies and practices in place that address their diverse needs. Astrong retention strategy, therefore, becomes a powerful recruitment tool.

Retention of key employees is critical to the long-term health and success of any organization. It is known fact thatretaining the best employees ensures customer satisfaction, increased product sales, satisfied colleagues and reportingstaff, effective succession planning, and deeply embedded organizational knowledge and learning. The paperfocuses on mainly 3 R’’s of employee retention, 5 ways to retain employees, employee retention strategies andconclusion.

1. Asst.Professor, Dr.MGR Janaki College Of Arts And Science For Women, Chennai.

IntroductionThe challenge of keeping employees, its changing facehas stumped managers and business owners alike. Howdo you manage this challenge? How do you build aworkplace that employees want to remain with andoutsiders want to be hired into? Successful managersand business owners ask themselves these and otherquestions because, simply put, employee retentionmatters.

High turnover often leaves customers and employees inthe lurch; departing employees take a great deal ofknowledge with them. This lack of continuity makes ithard for the organizations to meet their goals and servecustomers well.

Replacing employee costs money. The cost of replacingan employee is estimated at up to twice the individual’sannual salary (higher for positions based on their levelwithin the inter-organizational hierarchy, such as middlemanagement) and this does not even include the cost oflost knowledge.

The 3 R’s of Employees RetentionTo keep employees and keep their satisfaction levelshigh, any organization needs to implement each of thethree R’s of employee retention: respect, recognition,and rewards.

Respect : Respect is esteem, special regard, orparticular consideration given to people. As the pyramidshows, respect is the foundation of keeping youremployees. Recognition and rewards will have littleeffect if you do not respect employees.

Recognition : Recognition is defined as special noticeor attention and the act of perceiving clearly. Manyproblems with retention and morale occur because

management is not paying attention to people’s needsand reactions.

Rewards : Rewards are the extra perks you offer beyondthe basis of respect and recognition that make it worthpeople’s while to work hard, to care, to go beyond thecall of duty. While rewards represent the smallest portionof the retention equation, they are still and importantone.

5 ways to retain employees:

• Treat employees like our most valuable clients.• Get our employees to fall in love with our organization.• Strong retention strategies become strong recruiting

advantages.• Leadership must deeply invest in retention.• Trends in benefits package must be known and best

offers should be provided according to the employeesneed.

Employee retention strategies :Strategies on how to minimize employee attrition,confronted with problems of employee attrition,management has several policy options viz changingpolicies towards recruitment, selection, induction,training, job design and wage payment.

The following are the employee retention strategies:Employee Engagement:The organizations capacity to engage, retain andoptimize the value of its employees hinges on how welljobs are designed, how employees time is used and thecommitment and support that is shown to employeesby the management would motivate employees to stayin the organization.



Knowledge accessibility:The extent of organizations collaborative approach andits capacity for making knowledge and ideas widelyavailable to the employees would make employees tostay in the organization. Sharing of information shouldbe made at all levels of management.

Job involvement:Involvement in terms of internalizing values aboutgoodness are the importance of work made employeesnot to quit their jobs and these involvements are relatedto task characteristics. Workers who have a greatervariety of tasks tend stay in the job. Task characteristicshave been found to be potential determinants of attritionamong employees.

Organizational commitment:Is an effective response to the whole organization andthe degree of attachment are loyalty employees feeltowards the organization. Job involvement representsthe extent to which employees are absorbed in orpreoccupied with their jobs and the extent to which anindividual identifies with his/her job.

Empowerment of employees:Empowerment of employees could help to enhance thecontinuity of employees in organizations. Empoweredemployees where managers supervise more people thanin a traditional hierarchy and delicate more decisions totheir subordinates. Managers act like coaches and helpemployees solve problems.

Conclusion:Employee retention is an especially best one for anemployers and employees in the organizations. Itrequires understanding their needs which can drivesatisfaction and high performance in them, and then usehis knowledge to create an intrinsically motivating workexperience, by doing this organization can become whatwe say in true words, Retention worthy.

References:• www.wikipedia.com• www.humanresource.about.com• www.hrindia.com

Books :• Human Resource Management C.B.Memoria• Human Resource Management L.M.Prasad



PERFORMANCE MANAGEMENT IN A MATRIX ORANISATIONSTRUCTURE

Rahul Sajeev Krishnan1 Dr. J. Juliet Gladies2

AbstractThis article examines the need and how the matrix organizational structure is successful in the competitive businessworld. The paper explains through the reviews of researchers that the most effective method by which to evaluateemployees in matrix management structure is by means of a multi-rate system. Though the matrix structure isadvantageous for flexible application of human resources, organizations face challenges due to misaligned goals,unclear roles and responsibilities, ambiguous authority and lack of a matrix guardian in evaluating the performanceof their employees. The authors have suggested strategies to enhance the performance of the employees working ina matrix organizational structure.

Keywords : Performance Evaluation, Matrix Organization Structure, Challenges, Strategies.

1. IBBA – IB, Nehru Arts and Science College, Coimbatore.2. Professor & Head, Department of Business Administration, Nehru Arts and Science College, Coimbatore.

IntroductionMatrix management began in the 1960’s as anorganizational means to meet the needs of the aerospaceindustries (Larson & Gobeli, 1987). The matrixorganizational structure is also found in project-basedcompanies, such as infrastructure, construction, andtechnology services companies. Matrix Organizationalstructure is generally a blend of a formal long termhierarchical structure and temporary functional workteams comprising of employees with respectivespecializations from different departments. The focusnormally would be on a specific project, with the scope,objectives and time frame that continually form to workon the project and disband upon its completion. Theemployees would then return their home group which islong term. This overlay present in matrix creates twochains of command -one along the functional lines, theother along project lines(Knight, 1977).

Performance Evaluations in a Matrix OrganizationIn a matrix structure employees have a functionalmanager to whom they formally report to. The functionalmanager is responsible for performance reviews,handling human resources and operations. The sameemployees may also be assigned to work with teamsoutside this department for a specific project. Thesespecific project teams comprises of employees withdiverse expertise from different departments, butreporting to both the functional manager and specificproject manager.

Researchers have found that, the most effective methodby which to evaluate project personnel in matrixmanagement structure is by means of a multi-rate

system. By combining data from different sources, anintegrated and complete assessment of the individual’sstrengths, weaknesses, and areas for improvement couldbe found. This provides an overview of an employee froman organizational paradigm and avoids the weaknessesassociated with an individual viewpoint. This proves thata multi-rate system would be most effective in evaluatingan employee in a matrix management structure.

Matrix management has become a standard withincertain industries. As employees become cross-functional, it is necessary, in the name of competition,to take advantage of these resources whenever andwherever their value is maximized. As such, we need torealize that there is a need to effectively evaluate thecontribution that an individual can make throughout the?rm. According to (Stanleigh, 2006), there are somealarming statistics with respect toperformance appraisalswithin a matrix organization. For example, 750organizations around the globe participated in theresearch, and found that ‘‘68 percent of respondentorganizations had no process in place for employeeperformance evaluation of team members. Only36percent had any reward or recognition for the projectmanager and 44percent said they provide reward andrecognition for project team members’’ .Based on theresearch, the most effective method by which to evaluateproject personnel in a matrix organization is by meansof a multi-rate system. In combining data from severalsources, an effective, integrated and completeassessment of the individual’s strengths, weaknesses,and areas for improvement could be generated. Thiswould provide a complete overview of an individual froman organizational standpoint, and avoid the weaknesses



associated with an individual viewpoint (Farh, Werbel, &Bedeain, 1988). This would support the notion that amulti rater system would be most effective in evaluatingan employee in a matrix organization.

A multi-rate system will allow the organization and themanagers, to understand employees’ strengths andweaknesses as they are analyzed by data from multiplesources. This provides insight on employee taskassignment in a complex matrix structure and understandclearly their areas for improvement, as well as their valuewithin the organization as it is perceived by not onlytheir superiors, but by their colleagues as well.Employees need to be properly trained on therequirement of the organization. This holds truth for amatrix organization, as such practices create constantconflicts with its multiple bosses to report to, andsimultaneously pursue multiple objectives.

ChallengesEven though we agree that the matrix structure isadvantageous for flexible application of humanresources, there are challenges that need to beaddressed. (Sy & D'Annunzio, 2005) Identi?ed four mainproblems as well as challenges of a matrix organization:misaligned goals; unclear roles and responsibilities;ambiguous authority and lack of a matrix guardian. Dueto dual reporting, such organizations face challenges inevaluating the performance of their employees. Someof the problems they face are:• Periodical change of roles and responsibilities

creates confusion• Lack of single point feedback from the employee

performing dual reporting• Insufficient availability of employee performance data• Difficulty in identifying employees’ career development

plans

Periodical Change of Roles and ResponsibilitiesConstant change in roles and responsibilities in a matrixorganization creates confusion among the departmentheads and functional managers on assessing the personand to identify the ability of the person (Lawrence,Kolodny, & Davis, 1977). This also creates a sharedloyalty of the employee towards departments which willfurther create challenges in human resourcemanagement.

Lack of Single Point FeedbackIt would become difficult for the management to get asingle point feedback from such moving employees.Such feedbacks are important for the smooth running ofthe organization (Richard & Robert, 1986).

Non availability of employee performance dataFunctional Managers will find it difficult to getperformance data from project managers on multipleprojects if there is no effective system in place to gathersuch data(Bhatia, 2014).

Employees’ career development plansNormally companies would upgrade the employeestrength by promotion & training. But in a matrixorganization, if proper input is not received by functionalmanagers and HR, it would be difficult for them to identifythe strength and weaknesses of the employee.Implementing career paths may also have a direct impacton the entire organization by improving morale, careersatisfaction, motivation, productivity, and responsivenessin meeting departmental and organizationalobjectives(Wendy, 2013).

Strategies to enhance employees’ performance ina matrix organizationTo enhance the performance of the employees in matrixorganization, a few elements should be put in place. Itis advised to invest in an automated performancemanagement system and to follow a policy of clearcommunication. This will help to overcome lot ofchallenges in a matrix system(VanBruaene, 2016) .Some of the strategies that could improve a matrixmanagement structure are as follows;• Proper top management support• Well defined goals, objectives, and mission• Cooperation and communication between managers• Structured HR information system• Structured Project Management support information

system• Documented roles and responsibilities• Regular status meetings with managers• Training and Development of employees• Minimal conflicts between departments• Multiple appraisals• Annual performance reviews• Access to employee profile

Support from top management:Organization’s top management must ensure thatorganisation as a whole shall support managers andemployees in their project and functions, and that allmanagers shall cooperate with and support each other.

Well defined goals, objectives, and mission:It’s important to keep everyone focused on the bigpicture, rather than self-interests that may hamper thegrowth of an organization. This is particularly important



for a matrix structure that requires a lot of cooperationand communication among executives, managers andemployees.

Clear, measurable, and achievable goals will be definedfor the employees on each project. The goals should beset with collaboration with the employees, functional andthe project managers. The goals also be updatedperiodically and must be tracked in real time.

Communication regarding work and project status,forming and disbanding of teams, work activities shouldbe transparent, other than those related to confidentialHR matters.The top management is also expected tocommunicate properly regarding the organization goals,objectives and mission.

Cooperation and communication betweenmanagers:There must be formal mechanisms in place so that bothfunctional and project managers can access employeeperformance information, regarding performanceevaluations, promotion, compensation, continuingeducation and projects. There must also be cooperationand flexibility among the managers to make matrixstructure work properly.

Structured HR Information System:Implementing an HR information system that provideswith proper employee documentation regarding theirwork, relations within an organisation, attitude, workethics is required. For e.g. specific projects or workteams, anticipated availability, and skill sets should behandy by implementing the system. This informationsystem should track the employee participation inprojects. This information also supports opportunity foradvancement, recognition, regular compensation andbonuses.

Structured Project Management SupportInformation System:Projects has to be fully effective, efficient and requires aproject management support system that provide projectmanagers with accurate and current information suchas hours worked, cost to the team and the company,efficiency ratio, status verses milestones, and budget.This information should be available to all managers andteam members.

Project and functional managers should be very effectiveat managing projects. They should employ systemspecified project methodologies appropriate. Thisexpertise significantly contributes in effective and efficientproject implementation. Being on successful projectsand having a meaningful role will contribute to employeeretention and a positive work environment.

Documented roles and responsibilities:It is important that employees have job descriptions thatstate their responsibilities and roles. Care should betaken so that these descriptions are very broadand theydo not limit opportunity to provide meaningfulparticipation on projects. The documentation shouldinclude typical and fundamental employee tasks or workassignments as part of the job description. Generaldescriptions of roles and responsibilities results in a levelof ambiguity that is normal in matrix organizations. Inadditional to technical education your employees shouldhave the skills to work in matrix work environments.

Regular status meetings with managers:Employees should have regularly meetings, to reviewtheir current projects, status, resources issues and anychallenges they may be facing. These meetings can bevery important when employees are fully engaged on arelatively long term project. This may be an opportunityfor the managers and employees to meet in betweenprojects.

Training and Development of Employees:Normally employees in a matrix organization have fluidwork assignments and responsibilities, relativelyambiguous roles. Training and Development ofemployees to improve their respective technicalexpertise develop different approaches to analyzing andresolving problems and project requirements need to beput in place. It is important that employees know how tonavigate this environment and have education on how toadjust to, and master, fluid environments and workingwith employees with differing perspectives andpersonalities. This ability and relevant education alsoapplies to managers in their respective roles.

Minimal conflicts between departments:Top level management should make sure that no conflictoccurs between departments and managers. It isimportant to manage any conflicts that may arise, sothat it is not a hindrance to the projects. Too much andvisible conflict can cause employee uncertainty andcompel them to take sides in these conflicts which willruin a matrix structure.

Multiple appraisals:The management should make sure that the functionalmanagers and project managers are included in theappraisal process to get proper employee feedback onskills, competencies and performance. Project basedappraisals are recommended rather than end of the yearappraisals. So the employee gets multiple appraisalsfor each project which ensures fairness and accuracy.



The employees or their project managers should be ableto initiate the appraisal and finally the report is passedon the functional manager.

Annual performance reviews :Annual, or semi-annual, performance reviews areimportant regardless of the organization structure. Theyare particularly important in fluid matrix structures inwhich there may not be substantial contact betweenemployees and their functional manager. Thesemeetings should also compel the functional manager toobtain all relevant information on the employee’s role,experience and performance on work teams. A finalappraisal can be done for employees once a year by thefunctional manager based on the multiple projectappraisals. This allows the management to gauge theemployee’s performance across the year.

Access to Employee profile:The functional manager should have access toemployee’s career data, as the functional manager maynot be working with the employee on a day-to-day basis.This gives an idea of the strengths, rewards, recognitions,publications, nominations and weaknesses ofemployees. Additional data of the employee, such asskills, development, training, projects involved andadditional responsibilities will help the functionalmanager to rate the employee better.

ConclusionMatrix structure has become a reality in the businessworld, where most businesses are trying to plug intoglobal markets. Quick exchange of information, rapidresponse time, flexibility and cost savings are some ofthe advantages of a matrix organizational structure. Themost effective method by which to measure anemployee’s performance within a matrix managementstructure would be by employing a multi-rate system asit provides a matrix organization with reliable andconsistent metrics to measure its employees.. Matrixorganizations can make best use of their experts,equipment, and other resources by sharing them acrossprojects. While matrix organizations offer the employeesunparalleled opportunities to grow and developthemselves, measuring and managing performance ofemployees can be quite a challenge.

References:• Bhatia, T. (2014, January 17). empxtrack Tracking

Employee Excellence. Retrieved from ManagingCross-Functional Teams? Here’s how to measuretheir performance: https://empxtrack.com/blog/performance-management-in-matrix-organizations/

• Farh, J. L., Werbel, J. D., & Bedeain, A. G. (1988).An empirical investigation of self-appraisal basedperformance evaluation. Personnel Psychology, 41,141-156.

• Knight, K. (1977). Matrix management. Aldershot,UK: Gower Press, Teakfield Limited.

• Larson, E. W., & Gobeli, D. H. (1987). Matrixmanagement: Contradictions and Insights. CaliforniaManagement Review, 29(4), 126-138.

• Lawrence, P. R., Kolodny, H. F., & Davis, S. M.(1977). The Human Side of the Matrix. OrganizationalDynamics, 43-61.

• Richard, L. D., & Robert, H. L. (1986). OrganizationalInformation Requirements, Media Richness andStructural Design. Management Science, 32(5).

• Stanleigh, S. (2006). Business improvementarchitects shows matrix management is failing withcurrent employee performance evaluation. CCNMatthews Business Wire.

• Sy, T., & D'Annunzio, L. S. (2005). Challenges andstrategies of matrix organizations: top-level and mid-level managers’ perspectives. Human ResourcesPlanning, 28(1), 39-48.

• VanBruaene, M. (2016). Pragmatic Approaches tomove you and your organization forward. RetrievedSeptember 15, 2016, from Guidelines for managingemployees in a matrix organisation structure: http://www.advancingyourorganization.com/?p=1824

• Wendy, B. J. (2013, July 23). Society for HumanResource Management. Retrieved from DevelopingEmployee Career Paths and Ladders : https://www.shrm.org/resourcesandtools/tools-and-samples/t o o l k i t s / p a g e s / d e v e l o p i n gemployeecareerpathsandladders.aspx



VALUE CREATION ROLE OF KNOWLEDGE MANAGEMENT: ADEVELOPING COUNTRY PERSPECTIVE

Dr.M.P.Poongulale1

Abstract

Knowledge is seen as a driver for the definition and development of an organizational strategy and a key determinantof sustainable organizational competitiveness. The shift to knowledge as the primary source of value means thatknowledge plays a key role in the organizational effectiveness. This paper highlights the importance of developingand managing the intangible assets and intellectual capital of organizations to create distinctive and sustainablevalue. It sets forth the concept of Knowledge Circles to enhance activities along the Knowledge Value Chain. Some ofthe factors that will impact knowledge management initiatives in Pakistani organizations have also been identified.

Keywords : knowledge circles, knowledge management, Pakistani, intellectual capital

1. Assistant Professor, Department of management studies,NIFT – TEA College of Knitwear Fashion, Mudalipalayam,Tirupur.

IntroductionThe present milieu of business is characterized by fast,volatile, high-value competition. To survive, organizationsmust be agile, responsive and flexible. The new economyis characterized by the shift to knowledge as the maindeterminant of economic growth and success .The shiftto knowledge as the primary source of value means thatknowledge plays a key role in the definition, functioning,and performance of firms. This paper highlights theimportance of developing and managing the intellectualcapital of organizations to create distinctive andsustainable value (Kaplan et al, 2004:30). Drawing uponthe knowledge-based view of organizations, it seeks tofurther the discussions on capturing tacit, sociallyembedded knowledge, its externalization (Nonaka et al,1995:19) and codification and, the knowledge creationpathways that exist within organizations. It sets forththe concept of Knowledge Circles to enhance the sharingand transfer of knowledge among employees toultimately create strategic advantage for theorganization. The authors have provided a perspectiveon knowledge management initiatives within Pakistaniorganizations. Learning is always situated in the sphereof social interaction; knowledge and knowing capacitymay remain relatively hidden from individual actors butsocial interactions increase the degree of accessibilityand sustainability of this knowledge Organizations providean enabling environment for learning by virtue of being asocial collectivity: since knowledge by nature is collectiveand it is through a process of communal developmentthat a body of knowledge develops. From anorganizational standpoint, knowledge is available bothwithin and outside an entity, thus ‘what’ and ‘why’ becomeimportant questions in the quest for organizational

knowledge. Organizations strive to capture knowledgeas well as employ knowledge management initiativesfor quality improvement, innovation, efficiency, improveddecision-making, change management, alignment withcustomer needs, and the like. Increasingly, organizationsare cognizant of the fact that espoused practices(canonical practices) blind an organization to the actual,valuable practices of its members (no canonicalpractices) which are often tacit. To avoid developing ‘blindspots’ as a result of this conceptual outlook, organizationsare looking to increase employee communications sothat the transfer of valuable experiences and theaccompanying knowledge can be transferred.

Redefining corporate valueThe new economy has introduced a new lexicon in whichknowledge capital, intellectual capital, learningorganizations, intangible assets, and human capitaldescribe new forms of economic value . For decades,the trend has been shifting away from a product-driveneconomy based on tangible assets to a knowledgeeconomy based on intangible assets (Kaplan & Norton,2004).

This shift means that the knowledge component ofproducts and services becomes an important strategicresource (Quinn, 1992) and the dominant component ofcustomer value. Thus, it can be said that the only sourceof competitive advantage which can be leveraged (D isthe ability to create, find, and combine knowledge intonew products and services faster than the competition.We now recognize knowledge as a key source ofcompetitive advantage in the business world, but we stillhave little understanding of how to create and leverage itin practice. Traditional knowledge management



approaches attempt to capture existing knowledge withinformal systems, such as databases. Whether tacit orexplicit, knowledge needs to be updated constantly; thisrequires social structures which can assumeresponsibility for fostering knowledge, developingcompetencies and managing knowledge.

Intangible assets and corporate strategyChanging markets, growing stakeholder expectations,and defining success by using non-traditional measuresof success clearly showed that in the era of globalizationthe rules of the game had changed. Organizationsrealized that those intangible assets which support theorganization’s value proposition had to be mobilized andaligned with corporate strategy in order to maintain andrefresh core competencies for continuous process andproduct innovation. It is when those core competencieswhich are the underpinnings of the customer valueproposition, are developed can value creation besustainable. In order to allow core competencies tocontinuously develop, knowledge assets that supportthe organization’s key capabilities must be aligned withcorporate strategy, managed, and measured.

Innovative knowledge is what firms require to dominatean industry by changing the basis for competition.Organizations need to innovate to create new processesand products in order to sustain competitive advantagefor without innovation, a company’s value proposition willeventually be imitated, eroding competitive advantage.In order to innovate and create new value, employeesmust be equipped with the right learning and given theright information about their organization. Therefore, itis critical for organizations to identify their knowledgeassets and have the ability to leverage them. Competitiveadvantage emanates from the ownership of knowledgeassets, the underpinnings of organizationalcompetencies, which in turn pave the way for processimprovement and product innovation. increasingly,companies are transforming themselves into ‘learningorganizations ‘so that their knowledge assets can becontinually developed and performance capacity can beenhanced. 4. Knowledge creation pathwaysOrganizations are better positioned to accumulate anddisseminate knowledge because they can mobilize thesocial capital embedded in human relations to createintellectual capital.

Organizational advantage is obtained through thenetworks of relationships within firms that combine toform the firm’s “social capital” that is in turn harnessedto produce the firm’s “intellectual capital”. Knowledgecreation begins with socialization . It is throughinteraction between individual perspectives that socialcapital is created and accumulated. Learning ofindividuals has to be transferred to groups and from

groups to organization to harvest knowledge managementbenefits. Organizations learn as a result of the individualslearning within them and a healthy organization ischaracterized by a robust culture of formal and informallearning, and by abundant internal communication in allmedia. Organizations provide the “bathat fosters humaninteraction, forges a shared identity and supportsindividual learning through human interaction, ultimatelyincreasing its wealth creating capacity. Organizationsprovide institutional settings for human interactions, aprecursor to the formation of social capital.

These institutional settings encourage the horizontaland vertical diffusion of knowledge across theorganizational structure, since knowledge of anorganization’s products and processes is not found inany one individual but is distributed across its membersand hierarchies. The diffusion and transfer of knowledgeacross hierarchies takes place largely through informalrelationships that exist outside formal organizationalstructures. These relationships are initiated as a resultof employees with a common goal, ‘shared identity’,gravitating towards fellow employees who are perceivedto be experts on issues which may arise during theproduction process. The catalysts for forging theserelationships are therefore, ‘know who’, ‘know what’,‘know why’ and ‘know how’. Unfortunately, tacitknowledge is frequently overlooked. Most companieshave elaborate systems to capture and share theirexplicit knowledge but much less attention is paid toimplicit knowledge.

Knowledge circlesFor an organization to enhance performance, it must beable to create new knowledge by combining knowledgewith knowledge and knowledge with resources, as wellas change internal processes and structures. KnowledgeCircles seek to engage employees for creating andsharing knowledge. This concept envisages establishingtighter links between groups with a common objective;to achieve group intelligence where people reason andthink collectively, to empower employees by creatingcross-disciplinary teams and to create an enablingenvironment typified by a high degree of collaboration.Because knowledge is spread across hierarchies, thesecircles traverse horizontally to connect individuals andgroups in functional areas and vertically to connectproduction activities along the value added chain.

This high degree of inter-connectivity ensures thatemployees are fully engaged within their environment,have an intimate understanding of the organization’s corecompetencies and the contribution they make to thedevelopment of these core competencies. As notedabove, knowledge networks tend to form naturally aroundcommon problems or where there is shared identity.



Knowledge Circles focus on the informal relationshipsthat exist within functional areas, on how these networksoverlap between functional areas to stretch acrossorganizational hierarchies. These overlaps are the pointsat which diverse knowledge intersects and help to buildsocial capital. Networks within any functional area willhave a group moderator, a position determined by aperson’s degree of centrality on the network map.

The ‘stickiness’ of tacit knowledge makes it besttransferred over shorter paths within the network; thegroup moderator will manage the diffusion of tacitknowledge within the network, ensure the conversion oftacit knowledge to explicit knowledge, its subsequentcodification and transfer to other networks in the form ofshared artefacts and methodologies, resulting inincreased network benefits. Group moderators will alsoensure that inertial forces interfering with innovation suchas routines, behavior patterns or beliefs are minimizedby eliminating redundant knowledge, encouraging theadoption of more effective methods and maintaining ahigh degree of interconnectivity with other intra-organizational networks.

A cultural perspective on knowledge managementIt has been highlighted continually that lack of supportiveorganizational culture and structure may hamper KMinitiatives in any organization. Therefore, it is imperativeto also study the cultural aspect as a key dimension ofKM and to link KM initiatives or their lacking with culturalfactors and issues. To do that, a basic understanding ofPakistani national culture is essential since this will serveas a rationale for the attitudes, behaviour and valuesexhibited by the people who eventually becomeemployees of local organizations. The Pakistani culture,with specific reference to KM is analyzed in the light ofa cultural model as follows.

High and low context cultures Hall has defined the concept of high and low contextcultures (Morden, 1999). Individuals from high contextculture become well informed about the facts associatedwith a matter before they make a decision. Informationis sought and spread usually through discussion withfriends, co-workers, relatives and rumors at times. Onthe contrary, those from low context cultures will preferconsulting a research base before making a decision,and will emphasize on the use of reports, databasesand other electronic forms of information. Based uponthis definition, the Pakistani culture is a high contextculture. The Indians, Japanese, and the Chinese alsohave a high context culture. On the contrary, most ofthe European and North American regions have a lowcontext culture. Since high context cultures are morerelationship oriented and have less explicit communicationand formal information and knowledge, they are bound

to hinder transformation of tacit knowledge to explicitknowledge for use in organizational KM systems. Thatexplains why knowledge of certain disciplines of artsand sciences in the Chinese, Japanese, and Indiansocieties has only been carried forward by teachers tostudents or family members only by word of mouth andnot through formal educational systems. There isrelatively a low understanding of KM concept in Pakistaniorganizations and even if the KM concept develops andis well understood and practised, the lack of requiredcultural transformation and support will be a majorobstacle to its success in these organizations for yearsto come. Problems in implementations of KM in a surveyof Indian manufacturing industry have been highlighted(Singh, 2006). Since the culture of the two countries issimilar as both being high context, the problems identifiedare alike in Pakistani organizations too.

The two main obstacles identified in this survey areunwillingness of people to disclose and share knowledge,and people’s consideration that knowledge sharing willhave an adverse affect on their jobs. It can be said withcertainty that amongst many others, these two factorsform the root cause of non-implementation of KMsystems in their true spirit in the Pakistani organizations.A culture of fear can hamper success since employeesmay feel they may no longer be required since they willshare everything and keeping knowledge will no morebe a source of job security. In this case, it is importantto establish a rewarding culture where trust amongteams and business units is the highest. The employeesshould be rewarded for knowledge sharing, collaborativeproblem solving, and knowledge development. It is theleadership which inspires employees and which canchange the culture to that of knowledge sharing byempowering employees and making them members ofan interconnected business system.

This must not be slogan based but action based. Theemployees must be shown that sharing knowledge willreward them. Often mistakes are hidden and ideas forimprovement are lost when these mistakes could havehelped learn and improve the system. Similarly, nottaking action or maintaining status quo should bediscouraged and even penalized since it goes againstthe spirit of continuous improvement particularly when itis characterized with issues related to the business valueand the customers. KM System success factors availablein literature have been identified (Murray, 2006). Twofactors among them relate to the obstacles identifiedabove. These success factors include motivation anddedication of users including incentives and training, andan organizational culture that supports learning andsharing of knowledge. However, with the inherent restrainexhibited by high context cultures toward knowledgesharing through formal KM systems, it will be a



challenge to gain maximum benefits out of a KM systemeven if an enterprise-wide knowledge strategy andprocesses exist along with the required technicalinfrastructure.

ConclusionThe agility and competitiveness of organizations isdependent upon their ability to leverage their intangibleassets. Knowledge is a key determinant of corporatevalue therefore, organizations must be able to identify,manage, and measure it. To maintain their competitiveedge, organizations need to build their intellectual capitaland mushroom their knowledge management initiatives.These initiatives require an enabling environment thatencourages employee involvement in social processesof knowledge creation. Pakistani organizations should:ƒ Construct KM structures/models ƒ Create culture ofemployee involvement ƒ Communicate companystrategy clearly ƒ Align knowledge networks within theorganization with corporate strategy ƒ Align HRMprocesses – starting with recruitment and selectionprocesses - with knowledge management philosophy ƒBuild an inclusive culture that encourages employeeparticipation across all hierarchies (e.g. TQM, BPR, IT,process-centric structures) ƒ Provide appropriate IT/ISinfrastructure and other media to facilitate the codification,diffusion and transfer of knowledge Though the authorsdo not preach the creation of Chief Knowledge Officerole in most Pakistani organizations they do recommendhaving someone oversee the knowledge managementfunction. Knowledge Circles encourage knowledgecreation through employee interaction and overcomeorganizational silos to provide opportunities for the crossfertilization of knowledge within the organization.Knowledge Circles cut across horizontal, vertical, andorganizational boundaries to facilitate continuous processimprovement and innovation. Since this tool builds uponinformal relationships which are strong in high contextcultures, it has the potential to build the critical massrequired for continual improvisation and innovationthereby, launching the organization on a prolonged growth

trajectory. Knowledge Circles will not work in isolationand would need the critical elements of right leadershipand supportive culture. Each implementation ofKnowledge Circles and knowledge managementinitiatives has to be organization specific because ofsocio-cultural differences that are experienced betweenvarious organizations.

References• Bontis, N (2001) Assessing Knowledge Assets: A

Review of the Models Used to Measure IntellectualCapital. International Journal of Management Review,Vol. 3, No. 1, March, pp 41-60.

• Cook, S.D.N., & Yarrow, D. (1996) Culture andOrganizational Learning. In Cohen, M.D., & Sproull,L.S. (eds.), Organizational Learning. London : SagePublications.

• Davenport, T. H. & Prusak, L. (2000) WorkingKnowledge: How Organizations Manage What TheyKnow, Cambridge: Harvard University Press.

• Hamel, G. & Prahalad, C.K. (1994). Competing forthe Future, Cambridge: Harvard University Press.Kaplan, R.S. & Norton, D.P (2004) Strategy Maps,Cambridge: Harvard University Press. Kaplan, S,Schenkel, A., von Krogh, G., Weber, C (2001).

• Knowledge Based Theories of the Firm in StrategicManagement: A Review and Extension. MIT SloanWorking Paper 4216-01. MIT, Massachusetts March,

• J.G., Sproull, L.S., & Tamuz, M. (1996). LearningFrom Samples of One or Fewer.

• In Cohen, M.D., & Sproull, L.S. (eds.), OrganizationalLearning. London : Sage Publications. Morden T.(1999).

• Models of National Culture-A Management Review,Cross Cultural Management, Volume 6, No. 1, pp19-44. Murray E. Jennex, (2006).

• Knowledge Management System Success Factors,The Encyclopaedia of Knowledge Management, IdeaGroup, USA. Nahapiet, J., & Ghoshal, S. (1998)‘Social Capital,



INNOVATION STRATEGIES AND ADVERTISING UNDER MATRIXMANAGEMENT

Annijasmin.J1

AbstractDespite being dynamic in nature, advertising and innovation strategies decide order and control through matrixmanagement. Matrix management is the bound structure of several reporting lines which involve dual bosses, dualresponsibility and colleagues with similar skills. The paper gives a clear cut explanation on the undertakings of themanagement that lay as a corner stone to a company’s success, by putting forward the basic innovation strategies andadvertising means. The study gives a briefing about the successful companies and suggests strategies in accordancewith their listed class. Effective matrix management, by handling the pros and cons of innovation strategies andadvertisement thereby acts as a stimulator to the company and gives a positive perspective on reaching its foreseensuccess.

1. II year B.com with professional accounting, PSG College of Arts and Science, Coimbatore.

IntroductionMatrix management is the management of the inclusionof several bosses in relation to subordinates onperforming the given portion of work. It is the multiplecommand and effective control where the employeeshave to report their day to day operationally productiveactivities to one boss and the responsibilities are to bereported to another boss respectively. With competitionbeing global and economy being weak, all that isdemanded is growth which is challenging.

New strategies and advertisements make the day for allsuccessful companies. A strategy is required to increasea product’s market value and the profits earned fromthat product. An effective strategy bridges the gapsbetween the unmet need and jobs to be done. A plancommenced after investing a huge sum in research anddevelopment which shows the advancement in scienceand technology at the best of its price is an innovativestrategy worked by an organisation. Advertisement is ashort impersonal message to the customers to promoteor sell products, services or ideas better. Advertising isalways present in this challenging market, just that thepublic isn’t aware of it.

Working out such effective strategies and advertisingmeans the following results are drawn in relation tomatrix management. Innovative strategies andadvertisements is the collateral work of individuals frommore than one department in an organisation. The belowlisted innovative strategies and advertising techniquesare explained and suitable conclusions are derived fromthe discussion.

Innovation strategy- a trigger:Types of innovation strategies:Four strategies were given to the students of economiesand statistics to match them with four successfulcompanies based on their markets and productsproduced. The basic types of innovation strategies areas follows:

• Trend setter a breakthrough :Break through is the common thought of innovationas its ‘something new and bold’. Break through isthe combination of the previous innovations all in oneproduct. This types stands as the very basic typeused to increase the market value and profits earnedthereof.

Table-1 : The favourability of the breakthroughstrategy in the case of four successful companies

• Survivor a sustaining factor :Sustaining is the improvement of a product byproducing the advancements in the current modellike A1, A2, A3, etc. This strategy gives the futurelook of the success of the company. Most companiesopt for such strategy ‘cause the resources and timeinvolved are less and efficient.

Company’s name Votes in favour (%)

Apple 60

Sony 18

Micro max 10

Samsung 12



Table-2 : The favourability of the sustainingstrategy in the case of four successful companies


Apple 22

Sony 66

Micro max 5

Samsung 7

• Creator of a new market:New market strategy isn’t the geographical extension.It’s about creating a new line for the production ofrelated products. This strategy is applying a currentproduct to a new segment for consumer’s efficientusage which is extremely expensive.

Table-3 : The favourability of the new marketstrategy in the case of four successful

companies


Apple 18

Sony 22

Micro max 52

Samsung 8

• Adaptor a disruptive:Disruptive innovation is prescribed mostly by theprofessionals. It is the simplification of a product’suser and availing it at the least affordable price. Withthis strategy, the company increases its market valueby increasing its sales.

Table- 4 : The favourability of the disruptivestrategy in the case of four successful

companies

In these strategies, the companies come up with newideologies, advancements in the existing product,creating a new market relating to the available productand creating a consumer favourable product. With theseas the cases, the strategies take into consideration theR&D department, production department, marketingdepartment, sales department and finance department.This involvement of an individual with the five departmentsand their managers results in Matrix Management.

Flow Chart - 1 : Shows the relationship between anindividual with 5 departments and their managers

Individual

Sales R&D Marketing Finance Production

Manager Manager Manager Manager Manager

Matrix management is present in all organisations atsome level of management. In the above mentioned case,matrix management takes places among five differentdepartments in order to attain their predetermined goals.Matrix management is difficult to understand and followand thereby results in lot of inconveniences. Since theneed of matrix management is very much significant,the following steps are taken into consideration :• Diversities ensure the enrichment of diversity

competence among the subordinates and results inhelping each other and to listen to differentviewpoints.

• Opportunities to the young leaders to work with thetop executive managers and acquire multiple skillsrequired to perform in a complex organisation.

• Implementation of rotational assignments leads tospecialization of individuals in different functions bynot leaving them ideal in one specific function.

Advertising- a stimulator :Advertisements are the only means of communicationof the business with its consumers. The more innovativethe advertisement is, the more credit points are addedto the product and its market. Some of basic innovativeadvertisements are as follows:• Usage of the surrounding is the ideal idea left aside

by most of the successful companies. The mostimpressive advertisement can be made by using thesurrounding rather than using a medium. Examples:flex, banners, posters, wall paintings, floor paintings,etc.

• Conduction of events is the idea used by successfulcompanies for publicity. Most of the medium scaleand small scale companies don’t opt for suchadvertisements because it is expensive and timeconsuming. Examples: contests, exhibitions, sportsevents, etc.

• Usage of popups is the most reached means ofcommunication as all people use internet these days.The reach is immense and all companies can adaptthis idea as it’s profitable. Example: full page pop upfor every 10 minutes, an end popup, etc.


Apple 8

Sony 12

Micro max 16

Samsung 64



• Creative advertisement has no substitute than itself.Every house owns a television these days therebythe fastest means of advertising is through media bythe creation of a creative ad. Example: verbal ads,pictorial ads, standing ads, etc.

Flow Chart - 2 : Shows the relationship between the marketing departments with 4 other departments

and their managers

Marketing

Sales R & D Finance Production

Manager Manager Manager Manager

Matrix management is found in the above cases as well.In the case of advertising the marketing departmentcomes into contact with the sales department, productiondepartment and finance department. The difficulties ofmatrix management are met by using the followingregulators:• Clear explanation about the roles and responsibilities

of the subordinates leads to proper understandingamong themselves and quicker achievements of goals.

• Authority lies with one but communication is doneinformally. The better understanding of authority ofpower the easier it gets to manage the matrix.

• Resisting the urge to escalate problems to seniormanagement and ultimately aligning them with theinterests of the subordinates is feasible.

Conclusion :Matrix management is the best possible way ofmanaging individuals with more than one reporting line.The implementation of innovation strategies and

Company’s name Strategy favourable

Apple Trend setter

Sony Survivor

Micro max Creator

Samsung Adaptor

In the case of advertisements, they are based on thesituation rather than on their production type. Matrixstructure is unavoidable but it is manageable with theabove prescribed solutions. By using these solutionsmanagement gets to be easier and more adaptablemaking work smoother in a rough situation.Accordingto Jake Neilson,” Giving a guidance to your ideation/new product development efforts and some insight intohow those ideas might fit into the overall plans of thebusiness for the future.”

References:• Managing the matrix by DAWN METCALFE.• Organizational behaviour by JOHN B. MINER.• The realities of management by ROYCE L.

CALLAWAY.• www.hbr.org• www.mindtools.com• www.jeroen-de-flander.com

advertisements causes a matrix structure at some levelof the organisation. As per the information received fromthe students of economics and statistics and by takingthe production type into consideration strategies havebeen aligned with the companies.

Table - 5 : The strategies favourable to eachcompany after considering their matrix

management



HUMAN RETENTION UNDER MATRIX MANAGEMENT

Mayura.B1 Bavya.K2

AbstractMatrix management is the management of the concisely differentiated operational lines towards achieving organizationalsuccess. Human Retention is the ability of the organization to retain its employees. The purpose of this paper is toshed light upon the inconvenience caused to the employees who work under matrix management. This paper suggeststhe strategies to be used by the management in-order to retain the employees. Our study is based on the problemsfaced by the college faculties and suggests solutions to be taken by the management to retain them.

Keywords : Matrix management, problems faced by the college faculties, retention strategies.

1. II BBA, PSGR Krishnammal College For Women,Coimbatore.2. II BBA, PSGR Krishnammal College For Women,Coimbatore.

DemographicFactors

Classifications No. o f Respondents Percentage

Gender

Male 8 37.8

Female 12 62.2

TOTAL 20 100

IntroductionLong term health and success of any organization depends upon the key employees. Our study says that most ofthe employees leave an organization out of frustration and constant friction with their superiors or peers. In designingmatrix organization that actually works, Jay R .Galbraith says,” organization structures don’t fail but the managementfails in implementing it successfully”. Matrix management is a practice of managing individuals with more than onereporting line. The employees working under matrix management face a lot of problem which should be consideredby the management. Our study is about the strategies implemented by the management to retain the employeesworking under matrix management in educational institutions. Giving employees responsible tasks and freedom towork in their style motivates them to stay.

Matrix Management -General Meaning:Matrix management is an organization structure that facilitates the horizontal flow of skill and information. It is usedmainly in the management of large projects or product development processes, drawing employees from differentfunctional disciplines for assignment to a team without removing them from their respective positions. The employeesreport to more than one head.

Human Retention –General Meaning :An effort taken by a business to maintain a working environmental which supports the current working staff inremaining with the company. Many employee retention policies are aimed at addressing the various needs ofemployees to enhance their job satisfaction and reduce the substantial costs involved in hiring and training newstaffs.

Human Retention In Matrix Management:Owing to the complex structure of matrix management, human resource in a matrix organization is a very challengingaspect. The presence of more than one command line mostly puts the employees in frustrating situations.Accountability of such employees is at a stake and hence the attrition rate among them is generally high.

Statistical Data:These are the data collected by the faculties of different institution who work under matrix form of management(English, Mathematics department etc...)

Table - 1



Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

How many levels of hierarchy are there in your institution

20 1.00 2.00 1.1000 .30779

How does the communication work in this hierarchy

20 1.00 2.00 1.1000 .30779

Is there coordination from your peers 20 1.00 2.00 1.2000 .41039

Age Below 30 8 40

30 -40 8 40

40 -50 4 20

Above 50 NIL NIL

TOTAL 20 100

Experience Below 5years 4 20

5 -10 years 8 40

10 -15 years 4 20

Above 15years 4 20

20 100Source: Primary data

GenderThe above table shows that among 20 staffs, 8 are Male and 12 are Female.

AgeThe above table states that there are 8 respondents below 30 years, 8 respondents between 30-40, 4 respondentsbetween 40-50 and nil for above 50 years.

ExperienceThe Above Table Shows That 4 Respondents Below 5years, 8 Respondents Between 5- 10years, 4 RespondentsBetween 10-15 And 4 Respondents Above 15 Years Of Experience.

ConclusionMajorities are Female, 16 members belonging to age group of 40 and below and 8 members have 5-10 yearsexperience.

Descriptive StatisticsDescriptive statistics are applied for the following areas• Communication and Coordination• Decision Making / Empowerment• Nature /Focus• Rewards /compensation/incentives/performance appraisal• Leadership style

Table - 2



Is the vision shared by seniors with everyone within your unit

20 1.00 3.00 1.4000 .68056

Do you feel that your role is confusing 20 1.00 3.00 2.4500 .88704

How does the decision-making within department take place

20 1.00 2.00 1.5000 .51299

Is there any restriction in handling your subjects

20 1.00 2.00 1.8500 .36635

Is your work tiring 20 1.00 5.00 3.3000 1.41793

Any specific organizational goals 20 1.00 2.00 1.3000 .47016

Is the performance of employees are apprised

20 1.00 3.00 2.6500 .58714

On what basis is your performance apprised

20 1.00 3.00 2.1000 .71818

Is your performance correctly apprised 20 1.00 2.00 1.1500 .36635

How does your institution rewards any employees for the best performance

20 1.00 4.00 2.7000 1.12858

Is there support from the top management

20 1.00 4.00 1.5000 .88852

Is your work efficiently monitored 20 1.00 2.00 1.2000 .41039

Interpretation :The above table shows that respondents’ level of agreeability is high about his/her tiring work and low level ofagreeability for non appraisal of the performance.

Table - 3



Findings of Correlation:• There is correlation between communication and decision making of the respondents (.781)• There is correlation between decision making and communication of the respondents (.781),• There is correlation between decision making and reward of the respondents (.747).• There is positive correlation between focus and rewards (.842)• There is correlation between focus and leadership (.758).• There is correlation between reward and decision making (.747)• There is positive correlation between reward and focus (.842)• There is highly significant correlation between reward and leadership• There is correlation between focus and reward (.758)• There is highly significant correlation between leadership and reward

Human Retention Strategies Used In Matrix Management• Support from top management: All the work efforts and the cooperation from managers should be ensured from

top management.• Communication that is transparent to managers and employees: Communication regarding the role and work of

the employees should be communicated openly.• Freedom of choice: Allowing individuals to choose their job which is preferable to them.• Conduct exit interviews: When the organizations conduct exit interviews, problems of the employees shall be

found and steps can be taken to reduce the problems.• Cooperation: There should be cooperation from the managers.• Rewards and recognition: employees should be recognized and rewarded for their hard work and innovations.• Promotion and opportunities: the juniors staffs should be selected for new works and promotion should be based

on performance.



• Participating in decision making: The employeesshould be allowed to share their views when importantdecisions are taken in the organization.

• A path of greater pay, recognition and responsibilityfor employees: The manager should recognize theskills of the employees and give him the right job.This will give the employee a feel of accomplishment.

• Training and development: The employees should bewell trained for that particular job and training shouldbe given by the organization. Frequently seminars,lectures and conferences should be conducted, sothat the employees will develop their knowledge.

• Focus on talent management best practices:Ensuring that all the managers are familiar with talentmanagement best practices is of the best ways toretain the employees. It also helps to ensure thatyou hire the right person for the right job and givingfeedback, direction and recognition to the employees.

• Security: Job security leads to high commitment,job satisfaction and also job retention of theemployees in an organization.

• Work-life balance: It is an important factor foremployee retention. The job timings should besuitable for the employees.

• Hire the best and fire the rest: The right employeeshould be recruited for the right job so, that therewon’t be any issues for the employee to work on thatfield. This is one of the best ways to retain theemployees.

Conclusion :This paper has briefly discussed the problems of thecollege faculties working under matrix management andit provides the necessary human retention strategieswhich can be used by the management to retain thefaculty. The paper begins by giving a general meaning ofmatrix management and further gives brief descriptionof human retention. The result obtained from the studyhelps the management to take appropriate measures toretain the employees.



EVOLUTION AND SCOPE OF MICRO FINANCE IN INDIA

Venkatasubramanian.V1 Sriram.T2

1. II year, B.Com. Accounting and Finance, Ramakrishna Mission Vivekananda (Evening) College, Chennai.2. II year, B.Com. Accounting and Finance, Ramakrishna Mission Vivekananda (Evening) College, Chennai.

IntroductionMicro Finance is the type of business which is focusedon facilitating the weaker sections of the economy, whodoesn’t have much access to formal bankingopportunities, with tiny loans, minimal deposits for savingmoney and insurance. It is a miniature model of bankingservice that emphasizes on providing financial servicesto the unemployed or low-income individuals or groupswho are remarkable reservoirs of energy and knowledge.It looks to ignite the untapped opportunity to createmarkets, bring people in from the margins and give themthe tools to help themselves. We shall further reviewabout this scheme in this research paper.

Objectives of the study:1. To know about the emergence of Micro Finance in

the Indian Economy2. To ascertain the importance of micro finance in India3. To evaluate the evolution of Micro Finance services

in the Indian Economic outset4. To adjudge the trends and challenges the Micro

Finance institutions confront5. To ascertain the scope for Micro Financing in India

Importance of the study:• Traditionally, banks and lending institutions do not

lend money to low income individuals. But, MicroFinance has come out extending arms as theappropriate solution.

• Micro Finance has emerged in need of meeting aspecial goal – to empower the under- privilegedclasses of society.

• India being the second largest country in the world interms of population has 70% of its people dwelling inrural areas and is classed as a low-income countryby World Bank.

• Indian economy directly leaned over to the servicesectors from the primary sector, without giving muchimportance to the secondary sector. Industrialproductivity needs to be emphasised by providingadequate financial facilities to the MSMEs in orderto re-rail economic growth on the right channels.

• Micro Finance is apparently the best possible answerfor the chronic unemployment and under-employment

prevailing in India. Yet, very less study has been madeon this subject with undue preference given to FDIs.

Review of LiteratureAlternative Models of Micro-Finance: Experiences ofIndian Commercial Banks / Modèles Alternatifs De Micro-Finance: L'expérience Des Banques CommercialesIndiennes by N.B. Shete,.The author in this paper revealsthat the Indian Micro Finance scene is dominated bySelf-Help Groups (SHGs) and their linkage to banks.The Indian Micro Finance is unique, as it uses the formalfinancial institutions in providing finance to SHGs insteadof creating parallel non-formal channels of routing financeto the poor. It is an indigenously developed model suitedto local conditions for accelerating the pace of self-employment.

Developing Rural Poor through Micro Finance : Problemsand Prospects by Mohinder Singh and Monika Dara,The Indian Journal of Political Science, Vol. 68, No. 1(JAN. - MAR., 2007), pp. 57-63

This paper has been devoted to discuss the problemsand prospects of developing the rural poor through MicroFinance. The authors observe that political interferenceand bureaucratic procedure are the key problems in theworking of MFIs. For improving Micro Finance, thesuggestions include generation of awareness, expeditingservices and provisions for social audit.

Alleviating Poverty through Micro-Finance: SGSYExperience in Orissa by Sthitapragyan Ray, SociologicalBulletin, Vol. 57, No. 2 (May-August 2008), pp. 211-239

The author feels that the realisation of SGSY(Swarnajayanti Gram Swarozgar Yojana) programmeoutcomes were circumscribed by the weak links in thelong implementation chain involving several intermediatestages and complementary resources, but moreimportantly by the failure to tackle the powerlessnessof the poor through social mobilisation.

Operational Guidelines for Sustainable Housing Micro-Finance in India byT.S. Anand Kumar, V. Praseeda Sanuand Jeyanth K. Newport (2008)

Micro Finance is emerging globally as an importantfinancial activity to help alleviate the housing needs ofeconomically vulnerable people.Micro-finance institutions



(MFIs) planning to include housing product must carefullyassess whether they have the management and technicalcapacity to do so. The paper finds that MFIs shouldalso ensure that housing micro-finance suits theirstrategy from institutional and financial perspectives.

Neural Network Credit Scoring Model for Micro EnterpriseFinancing in India bySanjeev Mittal, Pankaj Gupta andK. Jain. (2011)

Quantitative methods known as scoring models havebeen traditionally developed for credit granting decisionsusing statistical procedures. The authors feel that thedevelopment of a neural network model for microenterprises facilitates bankers and financial institutionsin credit granting decisions in an automatic manner inthe Indian context.

The Dawn of Indian Micro FinanceThe concept of providing financial services to the low-income class of people is age-old in India as renderedby informal institutions by way of chit funds and RotatingSavings and Credit Associations (ROSCAs). It has beenthe same case in countries like Nigeria, Ghana,Indonesia, Philippines and West Africa, as well. Suchtypes of institutions were formally established only at alater stage in European countries during the eighteenthcentury. It was only in the year of 1720 that the first loanfund targeting the poor was provided for. The scenariowas pretty much the same until credit co-operatives werecreated in Germany in 1847, which went on to serveabout 1.4 million by 1910.In 1880s the British controlledgovernment of Madras in South India tried to use theGerman experiment to address poverty in India. Theevolution of Indian Micro Finance can be broadly dividedinto four distinct phases :Phase 1 : The cooperative movement(1900-1960)

During this phase, credit cooperatives werevehicles to extend subsidized credit tovillages under government sponsorship.This effort resulted in membership of morethan nine million poor to credit co-operatives by 1946. But the co-operativemovement failed to stay on course afterIndian Independence as it did not showadequate sustainable progress.

Phase 2 : Subsidized social banking(1960s – 1990)With the failure of cooperatives, Governmentfocused on measures such as nationaliza-tion of Banks, expansion of rural branchnetworks, establishment of Regional RuralBanks (RRBs) and the setting up of apexinstitutions such as the National Bank forAgriculture and Rural Development(NABARD) and the Small Scale Industries

Development Bank of India (SIDBI),including initiation of a governmentsponsored Integrated Rural DevelopmentProgramme (IRDP). While these steps ledto reaching a large population, improvingfinancial services, the period wascharacterized by large-scale misuse ofcredit, creating a negative perception aboutthe credibility of micro borrowers amongbankers, thus further hindering access tobanking services for low-income people.

Phase 3 : SHG-Bank linkage program and growthof NGO-MFIs(1990 – 2000)The failure of subsidized social bankingtriggered a paradigm shift in delivery of ruralcredit with NABARD initiating the Self HelpGroup (SHG) Bank Linkage Programme(SBLP), aimed at linking informal women’sgroups to formal banks. The programhelped increase banking system outreachto otherwise isolated people and initiate achange in the bank’s outlook towards low-income families from ‘beneficiaries’ to‘customers’. This period was thus markedby the extension of credit at market rates.The model generated a lot of interest amongnewly emerging Microfinance Institutions(MFIs), largely of non-profit origin, tocollaborate with NABARD under thisprogram. The macroeconomic crisis in theearly 1990s that led to the introduction ofthe Economic Reforms of 1991 resulted ingreater autonomy to the financial sector.This also led to emergence of newgeneration private sector banks that wouldbecome important players in themicrofinance sector a decade later.

Phase 4 : Commercialization of Microfinance(2000 – Present)Post reforms, rural markets emerged asthe new growth drivers for MFIs and banks,the latter taking interest in the sector notonly as part of their corporate socialresponsibility but also as a new businessline. On the demand side, NGO-MFIsincreasingly began transformingthemselves into more regulated legalentities such as NBFCs to attractcommercial investment. MFIs set up after2000 saw themselves less in thedevelopmental mould and more asbusinesses in the financial services space,catering to an untapped market segment



while creating value for their shareholders. This overriding shift brought about changes in institutions’legal forms, capital structures, sources of funds, growth strategies and strategic alliances.

The Drifting Trends in Micro Finance IndustryThe ever-growing heights of modern technologies are believed to be the table turners of major service industries inthe country and micro finance is no exception to it. According to most experts,“Technology has the power torevolutionise how the micro finance market operates”. From allowing MFIs to access micro-entrepreneurs in hard-to-reach areas to enabling the implementation of more robust ICT and risk assessment tools, technology representsa huge opportunity for micro finance institutions.From a market development perspective, technological breakthroughssuch as mobile money and online banking enable the micro finance industry to leap over phases that it would haveotherwise had to go through. In addition, they allow MFIs to adapt their products to the unique environments andbusiness cycles of their clients.

The importance of technology in the micro finance sector:

Source : Experts interviewed

SALES

Very important

71 %

Limited

importance 29 %

After mobile money and online banking, experts named “a broader spectrum of services offered” as the secondmost important trend within the micro finance sector. Clients’ needs are evolving rapidly and, with them, the servicesthat MFIs need to offer. In addition to access to credit, MFI clients want to be able to place deposits, to obtaininsurance or to take out a lease. New technologies will allow MFIs to design products that provide this broaderspectrum of servicesefficiently and sustainably.

Which trends will transform the micro finance market?

Source : Experts interviewed

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Online / Mobile Banking

Broader Range of Services

Credit Scoring Upscaling of traditional MFIs

Downstreaming of Banks



Scope for Micro Finance:Over the last few years, India’s micro finance sector hasexperienced a roller-coaster ride with remarkable results.In 2010, a promising growth story was abruptlyinterrupted by one of the biggest crises micro financehas experienced to date. The government of AndhraPradesh, then governing a population of the size ofGermany, shut down the local micro finance sector, withdrastic consequences. The state government’s move ledto a complete halt of micro finance across the state,triggering an identity crisis and serious funding shortagesthroughout India’s micro finance sector. Since thenregulators, politicians and practitioners have gone overtheir books and transformed the financial sector in India.

Today, financial inclusion ranks high on the priority listof Government and Reserve Bank of India, RBI. In August2014, Prime Minister Modi formally launched his financialinclusion programme, which envisages nothing less thana bank account for every Indian. The uptake has beenimpressive and 15 million bank accounts were added onthe first day alone, across the country. According to theWorld Bank, only 35 % of India’s adult population hadan account at a financial institution in 2011. By 2014,this proportion had increased to 53 %. However, manyof these were zero balance accounts. While the politicalbacking has clearly raised awareness, the financialsector now has to translate this push into a sustainableresult and activate the dormant accounts.

The increased attention is reflected by the fact thatBandhan, a micro finance institution focused on the ruralpopulation, was awarded one of just two general bankinglicenses which the RBI issued in 2014. This is especiallyremarkable as these were the first general bankinglicenses issued within a decade. Bandhan Bank,inaugurated in 2015 after successfully completing itsprobation period, caters specifically to Micro, Small andMedium Enterprises (MSME) and is now also authorizedto offer deposit solutions to its clients.

However, the general banking license for Bandhan hasnot remained an isolated event in the RBI’s aspiration toexpand the range of financial services. Later in2015,India’s central bank also granted specific bankinglicenses to 11 payment banks and 10 small financebanks. Thisput the micro finance sector into the spotlightagain as eight of the 10 newly licensed small financebanks are MFIs.

On the other hand, a comprehensive set of differentservice providers have to be included to achieve thefinancial inclusion targets set for the sector as privatelyrun institutions can offer an attractive alternative to themostly state-dominated banking sector. The RBIimplemented these lessons learned by issuing newgeneral banking licenses as well as creating new

licenses to cater specifically to the more than 400 millionadults who are still unbanked.

However, the recipients of the in-principle licenses nowhave less than 8 months’ time to prove their ability tocomply with the increased requirements for bankingoperations. They have to further professionalize theirprocesses, set up a deposit-taking unit and adapt theirunderwriting techniques away from simple group lendingtowards individual credit solutions. In parallel, the wholesector is estimated to experience a strong end-consumerdemand over the same period, which the transformingindustry has to handle in a sustainable manner.

ConclusionThe Micro Finance markets from across the globe areexpected to grow at 10% - 15% in the next two years.While this represents a relative deceleration comparedto last year, the growth fundamentals in the major microfinance markets in Asia Pacific are relatively solid andare estimated to progress at 30%. Micro Financemarkets, particularly in India are expected to grow atthe current pace. In fact, this could just be a prudentprediction as it could even benefit from higher growthpotential as well as a more favourable regulatoryenvironment.

In the near future, the scope of Microfinance businessis expected to be sound and positive in the Indian sub-continent. Microfinance has its solid roots in south Indiaand West Bengal. Even though rest of India have MFIs,those states are largely under-penetrated and needdedicated set of players. Currently, microfinance industryhas an astonishing repayment rate of 99.4%, making ita natural choice for potential investors.

The present government’s initiative to set up MUDRAbank and be the beneficiary of banking clientele createdunder PMJDY clearly indicates that the government hasan eye on NBFC-MFIs too, as they are the mostdominant players of the industry. This initiative isexpected to bring a comprehensive legal frameworkacknowledging the growing clout of the sector and resultin mitigation of uncertainties. Therefore, the story ofmicro finance in India is neither finished nor free fromchallenges and uncertainties going forward. But the long-awaited political and regulatory backing has providedthe sector a brighter avenue to showcase growth.

References :• Alternative Models of Micro-Finance: Experiences of

Indian Commercial Banks / Modèles Alternatifs DeMicro-Finance: L'expérience Des BanquesCommerciales Indiennes by N.B. Shete, Savings andDevelopment, Vol. 23, No. 4 (1999), pp. 475-487



• Developing Rural Poor through Micro Finance :Problems and Prospects by Mohinder Singh andMonika Dara, The Indian Journal of Political Science,Vol. 68, No. 1 (JAN. - MAR., 2007), pp. 57-63

• Alleviating Poverty through Micro-Finance: SGSYExperience in Orissa by Sthitapragyan Ray,Sociological Bulletin, Vol. 57, No. 2 (May-August2008), pp. 211-239

• Operational Guidelines for Sustainable HousingMicro-Finance in India byT.S. Anand Kumar,V.Praseeda Sanu, and Jeyanth K. Newport, IndianAssociation for Savings and Credit..

• Neural Network Credit Scoring Model for MicroEnterprise Financing in India bySanjeev Mittal, PankajGupta and K. Jain. (2011)

• Micro Finance in India: Scopes and Limitations• Microfinance in India: Contemporary Issues and

Challenges by Sibghatullah Nasir

• Indian Microfinance Institutions have just busted aMythby Tamal Bandyopadhya

• Employee retention: A Review of Literature, BidishaLah Das, Dr. Mukulesh Buruah, 10srjournals.org

• Greatest employee retention strategy, ChadHalvorson, wheniwork

• SHRM Foundation’s effective practice guidelineseries, David G. Allen, shrm.org businessdictionary.com

• Human retention strategies at Ontario Colleges.• labourmarketframeworkyukon.com

www.isorjournal .orgwww.roberthalf .com

• Halogen software, Strategic talent management.managementstudyguide.cohttp://www.advancingyourorganizatio.comhttp://en.wikipedia.org/wiki/Matrix management



ROLE AND IMPACT OF FOREIGN DIRECT INVESTMENT IN INDIA

N.Chitra1 S.S.Uma2

AbstractForeign Direct Investment plays an extraordinary and growing role in global business. It can provide a firm with newmarkets and marketing channels, cheaper production facilities, access to new technology, products, skills and financingfor a host country, which receives the investment. Foreign Direct Investment plays an important role in the long-termdevelopment of a country not only as a source of capital but also for enhancing competitiveness of the domesticeconomy through transfer of technology, strengthening infrastructure, raising productivity and generating newemployment opportunities. In India, FDI is considered as a developmental tool, which helps in achieving self-reliancein various sectors and in overall development of the economy. An Indian company may receive Foreign DirectInvestment either through automatic route or government route. This paper examines the role and impact of ForeignDirect Investment in India. And also explains the need, reasons for low FDI and determinants of FDI in India.

Key Words : Foreign Direct Investment, economic development, India, Investors.

1. Assistant professor, School of Business Management,R.V.S.College of Arts & Science, Sulur.2. Assistant professor, School of Business Management,R.V.S.College of Arts & Science, Sulur.

IntroductionForeign Direct Investment is a direct investment intoproduction in a country by a company located in anothercountry, either by buying a company in the target countryor by expanding operation of an existing business inthat country. Thus, putting the money of one country ina company which in functioning in some other countryis Foreign Direct Investment.

Foreign Direct Investment plays an important role in thelong-term development of a country not only as a sourceof capital but also for enhancing competitiveness of thedomestic economy through transfer of technology,strengthening infrastructure, raising productivity andgenerating new employment opportunities. In India, FDIis considered as a developmental tool, which helps inachieving self-reliance in various sectors and in overalldevelopment of the economy. India after liberalizing andglobalizing the economy to the outside world in 1991,there was a massive increase in the flow of foreign directinvestment.

Foreign Direct Investment plays an extraordinary andgrowing role in global business. It can provide a firmwith new markets and marketing channels, cheaperproduction facilities, access to new technology,products, skills and financing for a host country, whichreceives the investment. It can provide a source of newtechnologies, capital, processes, products, organizationaltechnologies and management skills, and as such canprovide a strong impetus to economic development.

Foreign Direct Investment in IndiaThe fast and steadily growing economy of India with themajority of its sectors has made India one of the most

famous and popular destinations in the whole world forforeign direct investment. According to a recent surveyby the UNCTAD India has conspicuously immerged outas the second most popular and preferable destinationin the entire world, after china for highly profitable directinvestment. In recent years, the bulk of the foreign directinvestment sectors of infrastructure, telecommunication,IT, computer hardware and software and hospitalityservices; have been made by investors of countries likeUS, Mauritius, Singapore and many others.

Role of Foreign Direct Investment in India :Foreign Direct investment plays a very important role inthe development of the nation. Sometimes domesticallyavailable capital is inadequate for the purpose of overalldevelopment of the country. Foreign capital is seen as away of filling in gaps between domestic savings andinvestment. India can attract much larger foreigninvestments than it has done in the past.

Foreign Direct Investment (FDI) is a type of investmentin to an enterprises in a country by another enterpriseslocated in another country by buying a company in thetarget country or by expanding operations of an existingbusiness in that country. In the era of globalization FDItakes vital part in the development of both developingand developed countries.

FDI has been associated with improved economic growthand development in the host countries which has led tothe emergence of global competition to attract FDI. FDIoffers number of benefits like overture of new technology,innovative products, and extension of new markets,opportunities of employment and introduction of new skillsetc., which reflect in the growth of income of any nation.



Foreign direct investment is one of the measures ofgrowing economic globalization. Investment has alwaysbeen an issue for the developing economies such asIndia. The world has been globalizing and all the countriesare liberalizing their policies for welcoming investmentfrom countries which are abundant in capital resources.The countries which are developed are focusing on newmarkets where there is availability of abundant labours,scope for products, and high profits are achieved.Therefore Foreign Direct Investment (FDI) has becomea battle ground in the emerging markets.

Foreign investment plays a significant role in developmentof any economy as like India. Many countries providemany incentives for attracting the foreign directinvestment (FDI). Need of FDI depends on saving andinvestment rate in any country. Foreign Direct investmentacts as a bridge to fulfill the gap between investmentand saving. In the process of economic developmentforeign capital helps to cover the domestic savingconstraint and provide access to the superior technologythat promote efficiency and productivity of the existingproduction capacity and generate new productionopportunity.

India’s recorded GDP growth throughout the last decadehas lifted millions out of poverty & made the country afavoured destination for foreign direct investment. A recentUNCTAD survey projected India as the second mostimportant FDI destination after China for transnationalcorporations during 2010-2015. Services,telecommunication, construction activities, computersoftware & hardware and automobile are major sectorswhich attracted higher inflows of FDI in India. Countrieslike Mauritius, Singapore, US & UK were among theleading sources of FDI in India.

FDI inflow routes: An Indian company may receive ForeignDirect Investment under the two routes as given under:1. Automatic Route: FDI in sectors /activities to theextent permitted under the automatic route does notrequire any prior approval either of the Government orthe Reserve Bank of India. 2. Government Route: FDI inactivities not covered under the automatic route requiresprior approval of the Government which are consideredby the Foreign Investment Promotion Board (FIPB),Department of Economic Affairs, and Ministry of Finance.

FDI is not permitted in the following industrialsectors: Arms and ammunition.• Atomic Energy,• Railway Transport.• Coal and lignite.• Mining of iron, manganese, chrome, gypsum, sulphur,• gold, diamonds, copper, zinc. Lottery Business

• Gambling and Betting• Business of Chit Fund• Agricultural (excluding Floriculture, Horticulture,• Development of seeds, Animal Husbandry, Pisciculture

and cultivation of vegetables, mushrooms, etc. undercontrolled conditions and services related to agro andallied sectors) and Plantations activities (other thanTea Plantations). Housing and Real Estate business.

• Trading in Transferable Development Rights (TDRs).• Manufacture of cigars, cheroots, cigarillos and• Cigarettes, of tobacco or of tobacco substitutes.

Need For FDI in India :As India is a developing country, capital has been oneof the scare resources that are usually required foreconomic development. Capital is limited and there aremany issues such as Health, poverty, employment,education, research and development, technologyobsolesce, global competition.

The flow of FDI in India from across the world will help inacquiring the funds at cheaper cost, better technology,employment generation, and upgraded technologytransfer, scope for more trade, linkages and spilloversto domestic firms. The following arguments are advancedin favour of foreign capital.• Sustaining a high level of investment• Technological gap• Exploitation of natural resources• Understanding the initial risk• Development of basic economic infrastructure• Improvement in the balance of payments position• Foreign firm’s helps in increasing the competition

Determinants of Foreign Direct Investment in India :The determinant varies from one country to another duetheir unique characteristics and opportunities for thepotential investors. In specific the determinants of FDIin India are:1) Stable policies : India stable economic and socio

policies have attracted investors across border.Investors prefer countries which stable economicpolicies. If the government makes changes in policieswhich will have effect on the business. The businessrequires a lot of funds to be deployed and any changein policy against the investor will have a negativeeffect.

2) Economic factors: Different economic factorsencourage inward FDI. These include interest loans,tax breaks, grants, subsidies and the removal ofrestrictions and limitation. The government of India



has given many tax exemption and subsidies to the foreign investors who would help in developing the economy.3) Cheap and labour : There is abundant labour available in India in terms of skilled and unskilled human resources.

Foreign investors will to take advantage of the difference in the cost of labour as we have cheap and skilledlabours. Example: Foreign firms have invested in BPO’s in India which require skilled labour and we have beenproviding the same.

4) Basic infrastructure: India though is a developing country, it has developed special economic zone where therehave focused to build required infrastructure such as roads, effective transportation and registered carrier departureworldwide, Information and communication network/technology, powers, financial institutions, and legal systemand other basic amenities which are must for the success of the business. A sound legal system and moderninfrastructure supporting an efficient distribution of goods and services in the host country.

5) Unexplored markets: In India there is large scope for the investors because there is a large section of marketshave not explored or unutilized. In India there is enormous potential customer market with large middle classincome group who would be target group for new markets. Example: BPO was one sector where the investorshad large scope exploring the markets where the service was provided with just a call, with almost customersatisfaction.

6) Availability of natural resources: As we that India has large volume of natural resources such as coal, ironore, Natural gas etc. If natural resources are available they can be used in production process or for extractionof mines by the foreign investors.

FLOW OF FDI (From July 2015 to April 2016)

Fig. 1

Problems for Low FDI Flow to India:India, the largest democratic country with the second largest population in the world, with rule of law and a highlyeducated English speaking work force, the country is considered as a safe haven for foreign investors.Yet, India seems to be suffering from a host of self-imposed restrictions and problems regarding opening its marketscompletely too global investors by implementing full scale economic reforms. Some of the major impediments forIndia’s poor performance in the area of FDI are: political instability, poor infrastructure, confusing tax and tariffpolicies, well entrenched corruption and governmental regulations.1. Lack of adequate infrastructure: It is cited as a major hurdle for FDI inflows into India. This bottleneck in the

form of poor infrastructure discourages foreign investors in investing in India. India’s age old and biggest



infrastructure problem is the supply of electricity.Power cuts are considered as a common problemand many industries are forced to close their business.

2. Stringent labour laws: Large firms in India are notallowed to retrench or layoff any workers, or closedown the unit without the permission of the stategovernment. These laws protect the workers andthwart legitimate attempts to restructure business.To retrench unnecessary workers, firms requireapproval from both employees and state governments-approval that is rarely given. Further, Trade Unionsextort huge sums from companies through over-generous voluntary retirement schemes.

3. Corruption: Corruption is found in nearly every publicservice, from defense to distribution of subsidizedfood to the poor people, to the generation andtransmission of electric power. The combination oflegal hurdles, lack of institutional reforms,bureaucratic decision-making and the allegations ofcorruption at the top have turned foreign investorsaway from India.

4. Lack of decision making authority with the stategovernments: The reform process of liberalizing theeconomy is concentrated mainly in the Centre andthe State Governments are not given much power. Inmost key infrastructure areas, the central governmentremains in control. Brazil, China, and Russia areexamples where regional governments take the leadin pushing reforms and prompting further actions bythe central government.

5. Limited scale of export processing zones: India’sexport processing zones have lacked dynamismbecause of several reasons, such as their relativelylimited scale; the Government’s general ambivalenceabout attracting FDI; the unclear and changingincentive packages attached to the zones; and thepower of the central government in the regulation ofthe zones. India which established its first ExportProcessing Zone (EPZ) in 1965 has failed to developthe zones when compared to China which tookinitiative for establishment only in 1980.

6. High corporate tax rates: Corporate tax rates inEast Asia are generally in the range of 15 to 30percent, compared with a rate of 48 percent for foreigncompanies in India. High corporate tax rate isdefinitely a major disincentive to foreign corporateinvestment in India.

7. Indecisive government and political instability:There were too many anomalies on the governmentside during past two decades and they are stillaffecting the direct inflow of FDI in India such asmismanagement and oppression by the differentcompany, which affect the image of the country and

also deject the prospective investor, who is very muchconscious about safety and constant return on theirinvestment.

Suggestions for Increased Flow of FDI into theCountry1) Flexible labour laws needed: China gets maximum

FDI in the manufacturing sector, which has helpedthe country become the manufacturing hub of theworld. In India the manufacturing sector can grow ifinfrastructure facilities are improved and labourreforms take place. The country should take initiativesto adopt more flexible labour laws.

2) Re look at sectoral caps : Though the Governmenthas hiked the sectoral cap for FDI over the years, itis time to revisit issues pertaining to limits in suchsectors as coal mining, insurance, real estate, andretail trade, apart from the small-scale sector.Government should allow more investment into thecountry under automatic route. Reforms like bringingmore sectors under the automatic route, increasingthe FDI cap and simplifying the procedural delayshas to be initiated. There is need to improve SEZs interms of their size, road and port connectivity, assuredpower supply and decentralized decision-making.

3) Geographical disparities of FDI should beremoved: The issues of geographical disparities ofFDI in India need to address on priority. Many statesare making serious efforts to simplify regulations forsetting up and operating the industrial units. However,efforts by many state governments are still notencouraging. Even the state like West Bengal whichwas once called Manchester of India attracts only1% of FDI inflow in the country. West Bengal, Bihar,Jharkhand, Chhattisgarh are endowed with richminerals but due to lack of proper initiatives bygovernments of these states, they fail to attract FDI.

4) Promote Greenfield projects: India’s volume of FDIhas increased largely due to Merger and Acquisitions(M&As) rather than large Greenfields projects. M&A’snot necessarily imply infusion of new capital into acountry if it is through reinvested earnings and intracompany loans. Business friendly environment mustbe created on priority to attract large Greenfieldsprojects. Regulations should be simplified so thatrealization ratio is improved (Percentage of FDIapprovals to actual flows). To maximize the benefitsof FDI persistently, India should also focus ondeveloping human capital and technology.

5) Develop debt market : India has a well developedequity market but does not have a well developeddebt market. Steps should be taken to improve thedepth and liquidity of debt market as manycompanies may prefer leveraged investment rather



than investing their own cash. Therefore it is saidthat countries with well-developed financial marketstend to benefits significantly from FDI inflows.

6) Education sector should be opened to FDI : Indiahas a huge pool of working population. However, dueto poor quality primary education and highereducation, there is still an acute shortage of talent.FDI in Education Sector is lesser than one percent.By giving the status of primary and higher educationin the country, FDI in this sector must be encouraged.However, appropriate measure must be taken toensure quality education. The issues ofcommercialization of education, regional gap andstructural gap have to be addressed on priority.

7) Strengthen research and development in thecountry: India should consciously work towardsattracting greater FDI into R&D as a means ofstrengthening the country’s technological prowessand competitiveness.

ConclusionFDI plays an important role in the long-term developmentof a country not only as a source of capital but also forenhancing competitiveness of the domestic economythrough transfer of technology, strengtheninginfrastructure, raising productivity and generating newemployment opportunities. India emerges as the fifthlargest recipient of foreign direct investment across theglobe and second largest among all other developingcountries (World Investment Report 2010).

The huge market size, availability of highly skilled humanresources, sound economic policy, abundant anddiversified natural resources all these factors enable Indiato attract FDI. Further, it was found that even thoughthere has been increased flow of FDI into the country

during the post liberalization period, the global share ofFDI in India is very less when it is compared to otherdeveloping countries.

Lack of proper infrastructure, instable government andpolitical environment, high corporate tax rates andlimited export processing zones are considered to bethe major problems for low FDI into the country. Toovercome this situation, the Government should revisethe sectoral cap and bring more sectors under theautomatic route. Therefore, there is an urgent need toadopt innovative policies and good corporate governancepractices on par with international standards, by theGovernment of India, to attract more and more foreigncapital in various sectors of the economy to make Indiaa developed economy.

References :• http://en.wikipedia.org/wiki/foreign_direct_investment

access on 5th October, 2012.• Aggarwal, S., Singla, A., Aggarwal, R. (2012). Foreign

direct investment in India. International Journal ofComputational Engineering & Management, 15 (5),93-105.

• Devajit, M. (2012). Impact of foreign direct investmenton Indian economy. Research Journal of managementSciences, 1(2), 29-31.

• Kumar, P. (2011). FDI in India and its impact- “A criticalevaluation”. VRSD International Journal of Business& Management Research, 1(3), 185-196.

• 1. Www.fdi.gov.in 2. Www.Sebi.gov.in3. www.Rbi.org.in

• Basu P., Nayak N.C, Archana (2007): “Foreign DirectInvestment in India: Emerging Horizon”, IndianEconomic Review, Vol. XXXXII. No.2.



ROLE OF FOREIGN DIRECT INVESTMENT IN INDIA

Narendra Kumar Jha1

AbstractForeign Direct Investment is the backbone of modern India. FDI in the engine of transferring financial resources,technology and innovative and improved management techniques along with raising productivity. Initially, India hasfollowed an extremely cautious approach but after Liberalization, globalization and privatization and series of measuresto attract FDI. As per UN report, India is an investment hub after China and USA for major global companies.An Indiancompany may receive Foreign Direct Investment either through automatic route or government route. Foreign DirectInvestment is the major instrument of attracting International Economic Integration in any economy. It serves as a linkbetween investment and saving. Many developing countries like India are facing the deficit of savings. This problemcan be solved with the help of Foreign Direct Investment. The paper tries to study the need of FDI in India, to exhibitthe sector-wise & year-wise analysis of FDI’s in India, to rank the sectors based upon highest FDI inflows. The resultsshow that Singapore is the country that has invested highly in India followed by Mauritius, Netherland and USA and soon. It is a descriptive research work carried out by the researcher. Secondary data is the source for this study.

Keyword : FDI, Economic Integration, Globalization, Modern India, Saving

1. Professor, S.A.V. Acharya Institute of Management Studies, Mumbai.

IntroductionIndia is the largest youth populated, second mostpopulous and the seventh largest country in the worldwith a history that spans thousands of years. Theeconomic landscape of India underwent a paradigmchange when the economy was liberalized in 1991. Italso laid the foundation for a strong regulatory network.Indian economy has been one of the stars of globaleconomy in recent years, growing at around 8%consistently. India, today, has a vibrant economy and isrecognized as a leader among the emergent countrieswith a huge potential for growth. The history of foreigninvestment in India can be traced back with theestablishment of East India Company of Britain. Britishcapital came into India during the colonial era of Britainin India. Before independence, major amount of foreigninvestment came from the British companies. ForeignDirect investment acts as a bridge to fulfill the gapbetween investment and saving. In the process ofeconomic development India is a rising nation andeconomy with large space for consumer and capitalgoods too. India has plentiful and diversified naturalwealth (recourses), its sound economic policy, bettermarket conditions and highly skilled human resourcesmake it a proper target for foreign direct investments.India’s economy policy framework is the combination ofsocialist and capitalistic Foreign Direct Investment (FDI)is a type of investment in to an enterprises in a countryby another enterprises located in another country bybuying a company in the target country or by expandingoperations of an existing business in that country. Inthe era of globalization FDI takes vital part in thedevelopment of both developing and developed countries.

Literature ReviewBhavya Malhotra (2014), “Foreign Direct Investment:Impact on Indian Economy”, The study found that India’sForeign Direct Investment (FDI) policy has beengradually liberalized to make the market more investorfriendly. The results have been encouraging. These days,the Country is consistently ranked among the top threeglobal investment destinations by all international bodies,including the World Bank, according to a United Nations(UN) report R. Anitha ,(2012),” Foreign Direct Investmentand Economic Growth In India “, The study states thatFDI inflows into the country over a period of 30 years itis observed that the compounded annual growth rate(CAGR) is 25.46 percent during 1980-81 to 1990-91i.e.,during the pre-liberalization periods.

Balasubramanyam and Saps ford , “Does India need alot more FDI” compared the levels of FDI inflows in Indiaand China, This articles found that FDI in India is onetenth of that of china. The paper also concluded thatIndia may not require increased FDI because of thestructure and composition of India’s manufacturing,service sectors and her endowments of human capitaland the country is in a position to unbundle the FDIpackage effectively and rely on sources other than FDIfor its capital requirements

Dr. Jasbir Singh,Ms. Sumita Chadha,3Dr. AnupamaSharma,(2012),” Role of Foreign Direct Investment inIndia”, The study reveals that maximum global foreigninvestment’s flows are attracted by the developedcountries rather than developing and under developingcountries. Foreign investment flows are supplementingthe scare domestic investments in developing countries



particularly in India. But foreign investor never adoptsenvironment friendly technique to maximize their profit

Objectives of the Study :• To study the trends and pattern of flow of FDI.• To assess the determinants of FDI inflows.• To evaluate the impact of FDI on the Indian economy• To know the flow of investment in India

Research MethodologyThis research is a descriptive study in nature. Thesecondary data was collected from various journals,magazines, and websites particularly from theDepartment of Industrial Policy & Promotion, Ministryof Commerce and Industry etc. The study is based onthe time period from 1995-2015. Graphs and tables havealso been used where ever required to depict statisticaldata of FDI during the study period.

Foreign Direct Investment (FDI)It refers to foreign direct investment. Economic growthhas a profound effect on the domestic market ascountries with expanding domestic markets shouldattract higher levels of FDI inflows. Foreign DirectInvestment is that investment, which is made to servethe business interest of the investor in a company, whichis in different national (host country) distinct from theinvestor‘s country of origin (home country).

According to the international monetary fund, FDIis defined as “ Investment that is made to acquirelasting interest in an enterprise operating in an economyother than that of investor. The investor purpose is beingto have an effective voice in the management ofenterprise.”

An Indian company may receive Foreign DirectInvestment under the two routes as given under :1. Automatic Route : FDI in sectors /activities to the

extent permitted under the automatic route does notrequire any prior approval either of the Governmentor the Reserve Bank of India.

2. Government Route : FDI in activities not coveredunder the automatic route requires prior approval ofthe Government which are considered by the ForeignInvestment Promotion Board (FIPB), Department ofEconomic Affairs and Ministry of Finance.

FDI in India is currently not permitted in thefollowing sectors:

• Lottery Business including Government /privatelottery, online lotteries, etc;

• Gambling and Betting including casinos etc.;• Chit funds;• Nidhi company (borrowing from members and lending

to members only);• Trading in Transferable Development Rights (TDRs);• Real Estate Business or Construction of Farm Houses;• Manufacturing of Cigars, cheroots, cigarillos and

cigarettes or tobacco substitutes;• Activities / sectors not open to private sector

investment e.g. Atomic Energy.• Legal, accounting and architecture services• B2C e-commerce

Data AnalysisThe Table Below Summaries FDI Limits in KeyIndian Sectors (Table -1)

Table -1

Sector Limit Sector Limit

Credit rating – 74% Agriculture – 100%

FM radio – 26% Civil aviation – 100%

Insurance – 49% Courier service – 100%

Multi brand – 51% Defense – 100%

Pension – 49% Education – 100%

Power – 49% Pharma – 100%

Print media – 26% Railway infrastructure – 100%

PSBs – 20% Single brand – 100%

PVT bank – 74% Telecom – 100%

Stock exch ange – 49% Tourism – 100%

Private Security – 49% Food products – 100%



InterpretationAbove table shows that agriculture, civil aviation, telecom etc. are the sector where 100 % FDI is allowed. Stockexchange and private security are the department where 49 % FDI is allowed

FDI Inflows Country Rankings

Fig. 1InterpretationAbove table shows that agriculture, civil aviation, telecom etc. are the sector where 100 % FDI is allowed. Stockexchange and private security are the department where 49 % FDI is allowed.

Share of Top Investing Countries FDI Equity Inflows (F. Y.2015):Amount Rupees in crores (US $ in million)

Table -2



InterpretationAbove table shows that Mauritius, Singapore, UK, Japan and Netherlands are the top five country who investedmore in Indians economy in terms of FDI.

India Foreign Direct Investment 1995-2016

Fig. 2

InterpretationForeign Direct Investment in India increased by 1547 USD Million in May of 2016. Foreign Direct Investment in Indiaaveraged 1153.89 USD Million from 1995 until 2016, reaching an all-time high of 5670 USD Million in February of2008 and a record low of -60 USD Million in February of 2014. Foreign Direct Investment in India is reported by theReserve Bank of India.



Findings• FDI is an important stimulus for the economic growth

of India• From Automatic route & Government route FDI can

be done• Lottery, Gambling, chit fund , etc. are the few sectors

where FDI is not permitted• Agriculture, Education, Civil aviation etc. are the

sector where 100 % FDI is allowed,• U.S top , China 3rd and India 10th rank in FDI Inflow• Tremendous increase in FDI Inflow in India after

F.Y.2006• Mauritius and Singapore is the top most FDI Investor

country in India

ConclusionFDI in India has a significant role in the economic growthand development of India. FDI has helped to raise theoutput, productivity and Industrial activity. In 20th centuryIndia is the biggest market in the world. So that in Indiathere is tremendous increase in FDI in recent timeReforms in FDI policy attracts lot of investor towardsIndian market so we can conclude that FDI is alwayshelps to create employment in the country and alsosupport the agriculture & small scale industries and helpscountry to become the world leader.

References• Dr. M. Shaul Hammedu,(2014), Foreign Direct

Investment the Indian scenario, International Journalof Scientific and Research publications, volume 4

• Shalini Aggarwal, Ankush Singla and RituAggarwal,(2012) FDI in India, IJCEM Volume 15

• Dr. Jasbir singh,(2012), Role of FDI in India, Ananalytical study, Research invent

• Balasubramanyam VN, Sapsford David (2007) DoesIndia need a lot more FDI, Economic and PoliticalWeekly, pp.1549-55.

• Sharma RK (2006) FDI in Higher Education: OfficialVision Needs Corrections, Economic and PoliticalWeekly, pp. 5036.

• Devajit Mahanta, (2012) Impact of foreign directinvestments on indian economy, Research J.Management Sciences, 1(2):29-31.

• Singh, S (2009) foreign direct investment (fdi) andgrowth of states of india. VISION 2020 - ManagerialStrategies and Challenge, Wisdom Publications,Delhi.

• Kumar Gajendran Lenin, Karthika S (2010) Sectoralperformance through inflows of foreign directinvestment (FDI)

• Srivastava S (2003)What is the true level of FDI flowsto India?, Economic and Political Weekly, 1201-1209

• Nayak DN (1999) Canadian foreign direct investmentin India: Some observations, Political Economy J.India, 8:51-56

• Sahoo D, Mathiyazhagan MK, Parida P(2002) Isforeign direct investment an engine of growth?Evidence from the Chinese economy, Savings andDevelopment, 419-439

• Weisskof TE (1972) The impact of foreign capitalinflow on domestic savings in underdevelopedcountries, J. Int. Economics, 25-38.

• Ministry of Finance(2003-04) Report of the economicsurvey, Government of India, NewDelhi www.imf.org,www.rbi.org..www.dipp.gov.in.www.google.comEconomics times,The Times of India



RURAL MARKETING: THE REAL MARKETS OF INDIA

Prashant Mishra1

AbstractRural markets are gaining importance in emerging economies. A large number of businesses are involved in themarketing of various products in the rural areas of India and elsewhere.2/3 of Indian population live in rural areas andalmost half of the national income is generated from there. The Indian rural market has a huge demand base & offersgreat opportunities to marketers. Rural Market is growth engine of Indian Economy According to many market researchagencies. Indian rural market is witnessing fast change in its consumption pattern, due to number of factors. Aseveryone know that Indian Rural Marketing is a very complex and unique thing to be forecast. It has been observedthat in rural market many companies have entered and proved themselves with proper understanding of the marketan innovative marketing idea. It is very difficult for the companies to overlook the opportunities they could from ruralmarkets. The companies have to overcome the challenges. The present paper consists of the importance of ruralmarket for companies in modern time, challenges that have to be faced by companies, opportunities, communications& other strategies to overcome challenges in rural market.

Keywords : Rural Marketing, Strategies, Opportunities, Challenges, Growth Engine, Forecast.

1. Professor, S.A.V. Acharya Institute of Management Studies, Shelu, Raigad.

IntroductionRural Marketing is defined as a function that managesall activities involved in assessing, stimulating andconverting the purchasing power of rural consumers intoan effective demand for specific products & services andmoving these products & services to the people in ruralareas to create satisfaction and a better standard of livingand thereby achieving organizational goals.Now a dayrural marketing consider to be nerve centre of ruraldevelopment activities. In recent years, rural marketshave acquired significance, as the overall growth of theeconomy has resulted into substantial increase in thepurchasing power of the rural communities. On accountof green revolution, the rural areas are consuming a largequantity of industrial and urban manufactured products.In the past, rural marketing was reckoned only asmarketing of agricultural produce. Because of specialinterest taken by the Government, many regulatedmarkets have been established in our country tofacilitate proper marketing of farm produce. Adoption ofscientific and commercial farming popularized the useof inputs like chemical fertilizers, pesticides, cattle andpoultry feeds, high yielding varieties of seeds, and alsotractors, tillers, other farm equipments etc. Because ofall these, the scope of rural marketing started widening.The penetration of television also gave an impetus toprovide accessibility to marketers into rural India, forpromoting consumer products.

Few Features of Rural IndiaSome common features that do exist amongst most ofthe rural markets in India are as follows.

Population : 83.3 per cent of the villageshave a population of lessthan 2000

Literacy Rate : Although the percentage ofliterates has increased from36 in 1981 to 67 in 2011.

Occupational Pattern : Almost 72 per cent of therural population dependson cultivation or wages fortheir living.

Diverse socio-economicbackground : This is different in different

parts of the country andbrings diversity in ruralmarkets.

Changing demand pattern : Demand pattern of ruralcustomer is fast changingdue to increasing inincomeand credit facilities offeredby banks like ‘Kisan creditcard‘.

Traditional outlook : Rural customer values oldcustoms and traditions.

Low standard of living : Rural consumer have lowstandard of living becauseof low literacy, low percapita income and socialbackwardness.



Literature ReviewThe focus of literature, mainly written in the postliberalization period, is on highlighting potential of vastrural market and providing description of a few cases ofcommercial organization of rural areas. The literaturehas uncritically borrowed theories, framework andconcept from the main stream marketing discipline,which has shifted the growth of the subject as anindependent field of academic investigation. There is anurgent need to build a distinctive perspective and a soundtheoretical base for rural marketing, which would createits own concepts, frameworks, theories and body ofknowledge. Rural India also accounts for sales of $ 1.7billion for cars, scooters and bikes and over one billiondollars of durables. In total, that represents a marketworth a whopping $27 billion. It is no wonder that evenMNCs have cottoned on to the idea of a resurgent ruralIndia waiting to happen. Mahindra Krishi Vihar, has beeninstrumental in increasing the groundnut yield inRajasthan through a new seed sourced from the state ofMaharashtra and it has also introduced a new variety ofgrapes in Maharashtra. Rural India accounts for a marketworth $27 billion.

Research MethodologyThe study is a descriptive method. The Secondary datawere collected from different sources, such as, textbooks, magazines, articles and online.

Objectives of the studyi. To understand important of rural market in current

scenario.ii. To study what challenges face in rural marketing.iii. To understand opportunities in rural marketing.iv. Understanding different strategies by companies for

rural marketing.

Important of rural marketRural market is getting importance because of thesaturation of urban market. So the marketers are lookingfor extending their product categories to an unexploredmarket .With the presence of 12.2% of the worldpopulation in the villages of India, the Indian rural FMCGmarket is something no one can overlook. Developmentin infrastructure facilities has improve their supply chain.Different sector is also likely to benefit from growingdemand in the market. Because of the low per capitaconsumption for almost all the products in the country,FMCG companies have immense possibilities for growth.And if the companies are able to change the mindset ofthe consumers, i.e. if they are able to take the consumersto branded prod¬ucts and offer new generation products,they would be able to generate higher growth in the nearfuture.

For Example :In India HLL derives more than half of its Rs. 12,000crore revenues from the rural markets. The rural mar¬ketis an enigma for the companies. Due to the lack ofdeeper insights into the psyche of the rural consumers,companies are hesitant to explore this territory. But localbrands, like “Ghadi” detergent in Kanpur, have been ableto successfully tap the opportunities presented by ruralmarket.

The market scenario in the rural areas today is changingvery rapidly. Rural consumers demand branded productsmainly because of increase in disposable income andliteracy level. Rural families do not like to cut theirexpenditure on weddings, pilgrimages, constructions andconsumptions. Rural consumers have more aspirations,today this segment of buyers consumes large variety ofproducts, both durable and non-durables and willing topay right price for right products. Pardeep Kashyap,CEO, MART, says “The rural India has cash in hand andis not bound by EMIs or loans, with the majority of ourpopulation based in tier III, tier IV cities and villages. It isright time to penetrate into rural market.”

Challenges in Rural Marketingi. Traditional pattern : Rural society is found by

tradition, old customs, practices etc. The impact ofmodern science and technology have made very lessimpact of the old beliefs which are still continuing.

ii. Undeveloped markets : Rural markets are notdeveloping because of inadequate banking and creditfacilities. Rural market needs banks to enableremittance, to transact on credit basis and to obtaincredit support from the bank.

iii. Communication problems : Stillmost villages eventoday largely depend on telegrams and phones fortheir communication needs. Print media and visualmedia (Television cinema) etc. reaches only about20% of rural Indians.

iv. Multi languages : India is a country of manylanguages. Language becomes a barrier in effectivecommunication in the marketing efforts. Thelanguages vary from state to state, place to place,and district to district.

v. Poor infrastructure facilities : Infrastructurefacilities like roads, warehouses, power etc. areinadequate in rural areas. Infrastructural costs arevery high and impact adversely in the rural marketactivities.

vi. Seasonal demand : Rural economic is seasonal,Rural people have two seasonal demands namely,khariff and rabi. Villages have money mostly in thisseasons. As village incomes are seasonal, demandsare also.



vii. Barter system : This system is practiced In thedeveloping country like India, even today the bartersystem i.e., exchange of goods for goods exists.This is a major obstacle in the way of develop¬mentof rural marketing.

viii. Buying Decisions : Rural consumers are cautiousin buying and decisions are slow and delayed. Theylike to give a trial and only after satisfyingpersonally, they buy the product.

ix. Transportation : Many rural areas are notconnected by rail transport. Kacha roads becomeunserviceable during the monsoon and interiorvillages get isolated.

4 A’s of Rural MarketingAwareness : Events like fairs, festivals, hats etc. areto be used for brand communication. Ideas like puttingsticker on the hand pumps, walls of the wells, tin palateson trees surrounding the ponds etc. are some of theinnovative media used by soap companies like Lux,Lifeboy, Rin and Wheel. The idea is to advertise at thetime of consumption.

Availability: The first challenge is to ensure availabilityof products and services. India‘s 627,000 villages spreadover 3.2 million sq. km, given the poor state road; it isnot easy to reach 700 million rural Indians.

Acceptability : The third challenge is to gainacceptability for the products and services.

Therefore there is a need to offer products that suitesthe rural consumer needs and customs. E.g LGdeveloped a customized TV for the rural market andpromoted ‘Sampoorna’

Affordability : The second challenge is to ensureaffordability of the products and services. With lowdisposable income products need to be affordable tothe rural consumers. Some companies consider it byintroducing small unit packs, e.g. Godrej introducedFair glow in 50 gm packs.

Opportunities in Rural Marketingi. Increase in Literacy Rate :Literacy rate is increasing

in rural areas. According to census 2011 it stood at68.9% (2001 census 58.7%).

ii. IT Penetration in Rural India:Today’s rural childrenand youth will grow up in an environment where theyhave „information access? to education opportunities,job opportunities, government schemes, worldwidenews and mandi prices. Rural areas offer a greatpotential for growth in internet usage with the numberof claimed internet users in these spaces to bereached at 70 million by Dec. 2016. As the electronicethos and IT culture moves into rural India, thepossibility of change are becoming visible.

iii. Infrastructure improving rapidly:In 50 years only, 40%villages have been connected by roads, in next 10years another 30% would be connected. Ruraltelephone density has gone up by 300% in the last10 years. Government of India is planning its mostambitious national program in Jan.2013 to facilitateelectricity through decentralized renewable energysources. The government aims to provide LED lightsto around 400million homes that do not have anelectricity connection by 2017. Rapid developmentof rural infrastructure is also major attraction formarketers

iv. Increase Population and hence Increase in Demand:The rural market in India is vast and scattered andoffers a plethora of opportunities in comparison tothe urban sector. It covers the maximum populationand regions and thereby, the maximum number ofconsumers. More than eighty percent of ruralmarkets in India still do not have access to any sortof organized marketing and distribution.

v. Increasing exposure to western world: Due to TV,Internet, mobile revolution the village folk are alsoexpose to western world, due to which the demandfor consumer durable has been increase. The greaterawareness in rural market creates new demandsand discriminating buyers. This is observed inyounger generation. In village today this segment ofbuyers consumes a larger variety of products bothdurable and nondurable.

Strategies to overcome rural marketing challenges:The rural market has changed drastically in the pastone decade. A decade ago, the rural market was moreunstructured and was not a prioritized target location forcorporate. Very few companies, mainly the agro-basedones, were concentrating in these markets. There is noinnovative strategies and promotional campaigns. Adistribution system did exist, but was feeble. Illiteracyand lack of technology were the other factors leading tothe poor reach of products and lower level of awarenessamongst villagers. Gradually, corporate realized that therewas saturation, stiff competition and clutter in the urbanmarket, and a demand was building up in rural areas.

For Example.Companies came up with special rural products, likeChic Shampoo sachets @ Re. 1, Parle-G Tikki packs@ Rs.2, customized TVs by LG, Shanti Amla oil byMarico. All these brought positive results for them.

The following are some of the strategies adopted byCompanies for Rural Markets for their Products andServices:i. Communication Media for consumer durables/

services : The companies have realized the



importance of proper communication in locallanguage for promoting their products especially inrural market. They have started selling the conceptof quality with proper communication and easilyunderstandable way of communications.

ii. Patriotism with Products and Services: Companiesare associating themselves with India by talkingabout India, by saying that they are Indian and theyare more patriotic. Using Indian Tricolor while doingadvertisement during Independence day and Republicday like Nokia has designed a new cellular phone5110, with the India tricolor and a ringing tone of“Sare Jahan se achcha”

iii. Focus on Customer Requirement: All customerswant value for their money. They do not see anyvalue associated with the products. They aim forthe basic functionality. However, if the sellers providefrills free of cost they are happy with that. They arehappy with such a high technology that can fulfilltheir needs. For example Nokia and Reliance havelaunched a simple product, which has captured themarket.

iv. Developing Specific Products: Many companies aredeveloping rural-specific products. Keeping intoconsideration the requirements, a firm develops theseproducts. Electrolux is working on a made-for Indiafridge designed to serve basic purposes: chill drinkingwater, keep cooked food fresh, and to withstand longpower cuts. In Service sector like Insurance theyare focusing on micro insurance products for ruralsegments.

v. Media modes of communication: Traditional mediaor the modern, media used for rural marketing isbeing used by companies. The traditional mediainclude melas, puppetry, folk theatre etc. while themodern media includes T.V, Radio and E-Chaupal.LIC uses puppets to educate rural masses about itsinsurance policies. Govt. of India uses puppetry inits campaigns to press ahead social issues.

vi. Below the line activities: The important of BTLactivities in any rural marketing effort can never beunderestimated. It include following activities.A) Folk Media, B) Magic showsC) Sports /Contest D) Special Event

ConclusionThe study concluded that rural India offers hugeopportunities which companies can tap for their growthand development. However, Companies face manychallenges in tackling the rural markets. Thus, lookingat the challenges and the opportunities, which ruralmarkets offer to the marketers and the manufacturers,it can be said that the future is very promising for those

who can understand the dynamics of rural markets andmake use of them to their best advantage. There is nodoubt that the rural India offers tremendous op¬portunityfor any company to tap. However, companies face manychallenges in tackling the rural markets. Some of theimportant factors being an understanding of the ruralcus¬tomers’ needs, a reliable distribution channel, andan effec¬tive marketing communication strategy to puttheir message across to the rural consumer. Now trendhas gone to change literacy rate in rural area isincreasing. Number of middle and higher incomehousehold in rural India is expected to grow. There israpid development in infrastructure all these opportunitiesattract companies to target rural market. With sometechnologies breakthrough in distribution and marketingof products in rural India, companies in rural market canearn more profits, market share, etc. The Rural marketis a greater future prospect for the marketers and thereare many opportunities available for them in ruralmarkets.

References• Bedi, R. V., and Badi, N. V. (1999). Rural Marketing.

Himalya Publishing house, New Delhi.• Del Castello, Ricardo, Maul Braun (2006), “Framework

for effective rural communication for development”• Goswami, Rahul (2009) “Making sense of the rural

rush”, http://www.indiatogether.org/2009/apr/eco-ruraleco.htm

• Iyer, Vidya (2009-2010), “Rural Marketing”, SIESJournal of Management, Vol. 6, Iss. 2; pg. 110, 4 pgs

• Jha, M., (April 1999) „Rural Marketing: SomeConceptual issue? Rural Scan, vol. I no.2

• Kashyap, Predeep and Raut, Siddhartha (2010 ed.),The Rural Marketing Book

• Lane, Bernard, Kenji Yoshinaga (1994), “Nichemarkets for the rural world”, The OECD Observer.Paris: Oct/Nov 1994. , Issue no. 190; pp.14Vishwanathan, Gomathi, “Challenges in RuralMarketing”,

• Wright, Kimberly Anne (2001), “Consuming identities:Global advertising, marketing and cultural identity inIndia”, issue no. AAT 3041323, pp 256

• Ravindranath V. Badi and Naranyansa V. Badi, RuralMarketing, Himalaya Publishing,2004. T.P.GopalSwamy , Rural Marketing, Published byWheeler Publishings (New Delhi)1998.

• Raj kumar Singh, Agricultural Price Policy in India,Published by Print well Publishers (Jaipur), 1990.http:/ /knowledge.wharton.upenn.edu/india/article.cfm?articleid=4386



www.trai.gov.inhttp://www.rbi.org.inhttp://news.in.msn.com

• Mannappa, O. (2003). Rural marketing challenges in the new millennium. Delhi Business Review, 4(1).• Rafiuddin, M.D., Ahmed B. (2011). Understanding the potential of rural marketing in India- an analytical study.

ZENITH International Journal of Business Economics and management research, 1(2), 126-139.• Shukla, S., Tandon, N. (2011). Rural marketing exploring new possibilities in the rural India. Gurukul Business

Review, 7, 125-130.



E- HR: THE EMERGING CONCEPTS OF HRM FUNCTION

Harshita Patil1 Saumyabrata Nath2

1. MMS – 2nd Year student, S.A.V. Acharya Institute of Management Studies, Mumbai.2. Professor, S.A.V. Acharya Institute of Management Studies, Mumbai.

IntroductionThe HR functioning is changing with time and with thischange, the relationship between the training functionand other management activity is also changing. Thetraining and development activities are now equallyimportant with that of other HR functions. Gone are thedays, when training was considered to be futile, wasteof time, resources, and money. Now days, training arean investment because the departments such as,marketing & sales, HR, production, finance, etc dependson training for its survival. If training is not considered asa priority or not seen as a vital part in the organization,then it is difficult to accept that such a company haseffectively carried out HRM. Training actually providesthe opportunity to raise the profile development activitiesin the organization. To increase the commitment level ofemployees and growth in quality movement (conceptsof HRM), senior management team is now increasingthe role of training. Such concepts of HRM require carefulplanning as well as greater emphasis on employeedevelopment and long term education. Training is nowthe important tool of Human Resource Management tocontrol the attrition rate because it helps in motivatingemployees, achieving their professional and personalgoals, increasing the level of job satisfaction, etc. As aresult training is given on a variety of skill developmentand covers a multitude of courses.It is concerned withthe structure and delivery of acquisition of knowledge toimproves the efficiency and effectiveness of organization.It is concerned with improving the existing skills andexploring the potential skills of the individual i.e. upgradingthe employees’ skills and extending their knowledge.Therefore, training is a key to optimizing utilizationhuman intellectual technological and entrepreneurialskills. Management development is all those activitiesand programmed when recognized and controlled havesubstantial influence in changing the capacity of theindividual to perform his assignment better and in goingso all likely to increase his potential for futureassignments. Thus, management development is acombination of various training programmed, thoughsome kind of training is necessary, it is the overalldevelopment of the competency of managerial personalin the light of the present requirement as well as thefuture requirement. Development an activity designed toimprove the performance of existing managers and to

provide for a planned growth of managers to meet futureorganizational requirements is management development.

Background of Human Resource Management andInformation Technology : The history of HRM is saidto have started in England in early 1800s during thecraftsmen and apprenticeship era, and then furtherdeveloped with the arrival of the Industrial Revolution inthe late 1800s. In the 19th century, Frederick W. Taylorsuggested that a combination of scientific managementand industrial psychology of workers should beintroduced. In this case, it was proposed that workersshould be managed not only for the job and itsefficiencies but also for the psychology and maximumwell-being of the workers. Moreover, with the drasticchanges in technology, the growth of organizations, therise of unions and government’s concern andinterventions resulted in the development of personneldepartments in the 1920s. HRM is said to have startedfrom the term ‘Personnel Management’ (PM). The term‘PM’ emerges after the Second World War in 1945 asan approach by personnel practitioners to separate anddistinguish themselves from other managerial functionsand make the personnel function into a professionalmanagerial positions. Traditionally, the function of PMis claimed to ‘hire and fire’ employees in organizationsother than salary payments and training. But there weremany criticisms and concerns of ambiguity expressedabout the purpose and role of PM to HRM. Therefore,the term HRM gradually tended to replace the term PM.However, writers argue that the term HRM has noappreciable difference from PM as they are bothconcerned with the functions of obtaining, organizing,and motivating human resources required byorganizations. The rebranding of the term from PM toHRM was done due to the evolvement and changes inthe world of management and therefore, a contemporaryterm would seem appropriate that can encompass newideas, concepts and philosophies of human resources.

Review of LiteratureIT in the past decade drastically changed the humanresources function. Providing support for mainlyadministrative activities such as payroll and attendancemanagement in the beginning, information technologytoday enhances many of the recruitment function’s sub



processes such as long and short-term candidateattraction, the generation, pre-screening, and processingof applications or the contracting and on boarding of newhires. Online job advertisements on corporate web sitesand internet job boards, online CV databases, differentforms of electronic applications, applicant managementsystems, corporate skill databases, and IS supportedworkflows for the contracting phase are only fewexamples of the various ways by which informationsystems today support recruitment processes (Keim &Weitzel, 2009). In HR planning process it is easier tofollow workforce gaps, the quantity and quality of thelabor force and to plan future workforce requirementswith the help of HR knowledge systems (Dessler, 2005).HRIS can support long range planning with informationfor labor force planning and supply and demand forecast;staffing with information on equal employment,separations and applicant qualifications; anddevelopment with information on training programs, salaryforecasts, pay budgets and labor/employee relations withinformation on contract negotiations and employeeassistance needs (Shibly, 2011). Risk and securitymanagement is another crucial function which can bederived by HRIS by following private and highly sensitiveindividual data and multiplatform security aspects whichare perhaps the most serious factors that need to betaken into consideration (Karakanian, 2000). HRIS isdefined as an “integrated system used to gather, storeand analyze information regarding an organization’shuman resources’ comprising of databases, computerapplications, hardware and software necessary to collect,record, store, manage, deliver, present and manipulatedata for human resources function” (Hendrickson, 2003).An HRIS can perform a number of functions from thesimple storage and communication of information, tomore complex transactions. As technology advances,the range of functions that an HRIS can undertakeincreases. Actually HRIS is directed towards the HRdepartment itself (Ruël, Bondarouk & Looise, 2004), butthe use of HRIS can provide a number of benefits notonly to the HR function, but also line managers, and thewider organization (Parry, 2009). The use of HRIS hasbeen advocated as an opportunity for human resourceprofessionals to become strategic partners with topmanagement. HRIS allow HR function to become moreefficient and to provide better information for decisionmaking (Beadles,Lowery & Johns, 2005). The increaseduse of web technology to deliver HR will leave HRspecialists more time for strategic decision making andthat outsourcing of people-management activities willliberate HR specialists to perform more strategic activities(Kulik & Perry, 2008). According to Ulrich (2007; 2009)as one of the strategic partners, the HR manager derivesbenefit from IHRS, to disseminate and execute thestrategy within the organization. These systems enable

employees to manage much of their own HRadministrative work. They can take care of many routinetransactions whenever they wish, because automatedsystems don’t keep office hours. In addition to theirformer operational role, HR professionals can also actas a competency manager by arranging the right peopleto the right positions in the right time with their newstrategic architecture role (Gürol, Wolff & Ertemsir, 2010).HRIS is thought to contribute to overall businessperformance by fulfilling or at least supporting the tasksof data storage and retrieval, of serving as primaryadministrative support tools, of reporting and statisticsas well as of program monitoring (Ostermann, Staudinger& Staudinger, 2009). HRIS plays an important role forany organisation to effectively manage its human assets.Many organizations have adopted HRIS to assist theirdaily human resources operations. HRIS must align andsatisfy the needs of the organization and its users inorder to be successful (Noor & Razali,2011). However,HR departments need to recognize some of the currentlimitations of web technology and its integration to theHRIS backbone. Similar to most e-business ventures,security of private HR information is a top priority.Organizations looking seriously into internet enabling oftheir HR businesses should evaluate the authentication,security, access rules, and audit trails related to serviceproviders' networks, servers, and applications(Karakanian, 2000). On the other hand there can beundesired and unexpected consequences of HRIS.Undesired consequences refer, for instance, to anincrease of quantity but a decrease of quality of applicantsin e-recruiting (Strohmeier, 2009). Another importantaspect of using information systems is user satisfaction.It is often suggested as an indicator of InformationSystem (IS) success. Many IS empirical researchershave regarded user satisfaction as important proxy of ISsuccess and it is the most employed measure of ISsuccess due to its applicability and ease of use. Withinthis literature, system and information characteristicshave been core elements on user satisfaction which isdefined as the attitude that a user has toward aninformation system (Shibly, 2011)

HRM generally uses IT as HRIS. HRIS is an integratedsystem acquiring and storing data used to make analysis,make decisions in the field of HR. A contemporary HRISis a dynamic data base about employees’ performanceand demographic information. HRIS provides informationabout employees’ data, employment, applicationrequirement, job characteristics, selection and staffing,procedures of employment, corporate structure,professional and individual improvement, educationcosts, performance appraisal, personnel planning,organizing etc. And these data are used for manypurposes simple or complex (Lippert and Swiercz, 2005,



340–353; Bernik et al. 2007:130-133). Again, e-HRM isan IT application for supporting or connecting at leasttwo people or collective actors in participating HRactivities (Strohmeier, 2007, 19–37). In recent years,HRIS is accessible (distance access applications,system intervention, upgrading) for users trough internet.In other word, eHRM is a HRIS which HR personnel,managers and other employees access via internet orintranet. To increase the effectiveness of HRM,organizations are becoming more and more dependenton HRIS (Ball, 2001; Lippert and Swiercz, 2005;Troshani, et al., 2011). For example, an HRIS can beconsidered as a tool that provides strategic plannerswith the needed information enabling them to forecastfuture workforce demand and supply requirements.Moreover, it can be considered as a tool that helpsemployers in retaining the right employees. This can bedone by paying them competitive salaries compared tothe market, and training them to develop their skills andabilities to carry out their existing and future jobs.

Training and development And InformationTechnology:Some suitable technological developments are requiredto implement the idea of employee self- service we havementioned in 5 the previous paragraph. Among themstand out Intranets. The Intranet is a powerful tool whichcan, if correctly used, encourage communication andcollaboration in the firm, tidy up procedures and provideits staff with permanently updated information, even ifthe staff are scattered all over the world. The reasonsthat have led large firms to install Intranets in their HRdepartments are not only linked with the transfer of HRdata management to employees and functional managersthemselves. A review of the specialised literature givesus reasons like the following:• Collecting, communicating and sharing information

with employees.• Automating access and administration to databases.• Simplifying the distribution of complex information,

presenting it much more thoroughly and graphically.• Building an infrastructure which increases people’s

effectiveness in the accomplishment of their aims.• Helping managers to identify experts on the basis of

such criteria as skills, knowledge, experience andplace of residence.

• Installing best practice files, which spares people whoconsult them from having to start each project fromscratch and makes it possible to locate experts inone particular field within the firm.

• Creating on-line forums which allow an employee thatis assigned to a project in a specific sector to connectwith one forum and seek advice from the firm’s experts.

The same as reasons are diverse, it is also easy to findarguments in the specialized literature about thenumerous advantages derived from the building of anIntranet from the point of view of HR management. Amonghard benefits, we can highlight the following: paper andedition savings; updating easiness; reductions in thenumber of answers to employees’ repetitive questions;the possibility of consulting, at any given place and time,a wide range of reference materials. Soft benefits are,due to their own nature, intangible and therefore, difficultto quantify. They generally have to do with theimprovement of the service offered by the HR functionand with the fact that more time can be dedicated to themost important activities, which, in turn, improves theperception that both management and employees haveof this function. Furthermore, other advantages can behighlighted such as the promotion of innovation, theflexibility of structures and the possibility ofindividualizinglabor relations.

Objectives of the Study :• To identify the importance of Information Technology

in different HRM activities.• To find out the Benefits of Information Technology for

HRM functions.

Limitations of Study :The study is limited to secondary data and mainly basedon observation methods.

Benefits of Information Technology:The implementation of Information System varies betweenorganizations. Some use it to reduce costs, others tofacilitate better communication, and some use it to re-orient HR operations to increase the department’sstrategic contribution. Information Technology providesmanagement with strategic data not only in recruitmentand retention strategies, but also in merging HRIS datainto large-scale corporate strategy. The data collectedby IT, provides management with decision-making tool.An HRIS can have a wide range of usage from simplespread sheets to complex calculations. Through properHR management, firms are able to perform calculationsthat have effects on the business as a whole. Suchcalculations include health-care costs per employee,pay benefits as a percentage of operating expense, costper hire, return on training, turnover rates and costs,time required to fill certain jobs, return on human capitalinvested, and human value added. It must be noted thatnone of these calculations results in cost reduction inthe HR functions.

Technology affects organizations and work relations inorganizations by enabling to access information and tojoin people electronically. With new processes and



providing some benefits HRIS changes traditional HRprocesses and it is expected that HRIS will providefunctionality for realization of units’ objectives and goals.The following are the few benefits of using InformationTechnology in HRM functions.

Cost Reduction : Effects of IT on HR costs appear inseveral ways. First, IT reduces costs of processes andworks. For example, transforming from traditional HR toe-HR reduces costs of some HR applications, such as,postal cost, announcement cost and data processingcost. Using self service technology reduces theprocessing costs of HR up to 75%. E-selections and e-recruiting decrease costs of staffing and selections dueto reduced employee turnover, reduced staffing costs,and increased hiring efficiency. Second, using self serviceHR allows employees to perform their own workthemselves directly. Thus, HR professionals spend lesstime on routine tasks.

Time Saving : IT allows HR professionals to spent lesstime on routine tasks and make easier to acquire andanalyze information. For example, researches show thatrecruiting process shortens twelve days.

Increase in Efficiency : Intense use of IT aromatizesand standardizes routines. HR professionals may focusless on administrative activities and more on interpretinginformation. HR professionals may spend more time onother aspects of their jobs. Thus, HR professional canaccess more information, respond the problems in atimely major from managers and employees and evaluatethe complex information more effectively. Comparing withmanual processes, reducing data errors, simplifying andfastening processes of HR practices make HRIS moreadvantageous.

Enabling communication and collaboration : IT is atool for effective communication and collaboration. E-mail, messaging, discussion lists, videoconferencing,virtual teams, electronic workgroups, and tele workinghave changed the nature of workplace communicationand collaboration. These make workplace interactionspossible for employees even they are not physicallypresent in the workplace. IT improves the skills of workersfor collaborating, accessing information and decisionmaking. Participative decision making becomes anorganization-wide activity. Internet and web basedtechnologies facilitate sharing of decision makingresponsibility through the organization hierarchy andstructure. HRIS as an integrated system also increasesthe capacity of reporting in the organization.

Competency Management : IT tools enable HRprofessionals both to reach larger candidate pool andmake decision making more objective and effective toemploy more relevant and competent candidates by

means of decision making techniques in the selectionand recruiting process. Improving and shortening therecruiting process increases competencies ofincumbents and as a result quality of works. At the sametime, because of distance access e-HR can be used todevelop human capital of the organization effectively.

Knowledge Management : Knowledge managementis a systematic process of acquiring, creating, capturing,synthesizing, learning, and using information, insights,and experiences to enhance decision making. Knowledgemanagement system is a natural extension of HRIS andHR development activities. HR professionals shouldintegrate traditional HR functions into knowledgemanagement. Because organizations should acquire andmanage organizational knowledge to prevent knowledgelooses when employees leave the job. Using IT toolssuch as intranet, virtual collaborations, data storage anddata mining can improve skills for knowledge acquisitionand distributions. Knowledge Management tools alsofacilitate knowledge participation and empower thespecific task areas. IT assists HR professionals to accessand disseminate information more efficiently.

Structuring Strategic HR : Strategic role of HR focuseson aligning HR activities with HR strategies. So, HRshould work with managers and line managers incollaborations. IT is accepted as an important impetusfor strategic HR. IT builds stronger HR units and allowsHR to engage in more significant strategic roles. ITsolutions free HR from the burden of routineadministrative tasks. If HR professionals rely on IT, theyhold a more strategic role. Because they will have timeto interpret information, develop strategies and thinkabout corporal transformation.

Findings :Beside IT is an important instrument for realizations ofHR functions, widely use of IT in the HR functions affectsHR management in many aspects. Few are listed below-a. Traditional HR functions : Use of IT within the HR

functions increases effectiveness and efficiency ofHR practices, decreases time and costs. Moreover,IT facilitates distributions of information along theorganizational hierarchy, it empowers organizationaldecision making and knowledge management.

b. New HR process : Self service HR, e-learning and e-recruiting are new processes. These are possible onlywith IT tools. These new processes regardingeffectiveness, efficiency and cost create more valuethan traditional HR processes do for the organization.

c. New types of working: Widely use of IT in the businesscreates new types of works such as tele-working andweb based project contracts.



d. Strategic impact : IT is a very important force for thetransformation of HR functions. IT decreasetransactional burden on the HR functions. So HRprofessionals devote more time for the strategic issuesto be a strategic partner.

e. New Competencies : Transforming HR managementfrom administrative functions to strategic focusdefines new competencies of successful HRprofessionals. These competencies are businessknowledge, change management and technologicalcompetencies. HR professionals can be unsuccessfulin adaptation of IT in business although they knowabout technology. In order to be an important playerin an organization and to create value for theorganization HR professionals need to know aboutbusiness and its environment.

f. Adaptation of IT also changes the routines, businessprocesses and work habits. So HR professionals needto have the competencies of change management.HR mangers need also new competencies on IT andmore knowledge on facilities of IT before they had inthe past.

g. The main IT tools used in HRM functions includesApplication software (such as DBMS, used toaccomplish HR spreadsheets, data mining/datafunctions, warehousing), information system software(such as decision support systems, executiveinformation systems, expert systems), informationand communication technologies (ICT) (such as LAN/WAN/neural network, internet/intranet, web portals)

ConclusionAt the end of this report, with the objective to presentthe information technology and to study the impact ofthese new technologies to the society, it is clear thatthe computer age is here; this cannot be debated. Inmany aspect of our society, we found IT efficient in solvingcomplex problems at a very small type. It can performenormous number of functions and operations that humancannot do. As result of the use of IT we can have costeffectiveness, globalization, communication and newjobs creation. Despite all these advantages, the IT worldfaces some remarkable disadvantages; privacy ofinformation is an issue but the most important drawbackis unemployment because many task initially done byhuman, are now done by computer. Nonetheless, it issaid that in some scopes like education, technologycan enhance traditional methods of learning but cannotreplace the human touch. Information Technology isconsidered to be one of the most important elementsthat affect the activity of human resource department.This was supported by the main objective of this studyof having a relationship between information systemsand human resources functionalities. As a consequence

of the advancement of information technologies andevolvement of e-HR organizations have become morecompetitive by reducing costs and improving productivity,quality and profitability in HRM area. Modern businessesand industries are taking suitable steps for theimplementation of IT in the key area of the managementof human resources by enabling the employees to maketheir optimum contribution to the gaining of a competitiveadvantage. This study investigates the extent andcomparative impact of IT use on HRM functions inorganizations from different sectors. It has also takeninto account the usage pattern of different IT tools toperform different HRM functions in organizations. Basedon the survey data, the results firstly indicated that IThas significant impact on all sectors in terms ofmanagement and planning tasks and, secondly, that typeof IT used varies significantly for the tasks of recruitment,and maintenance and development functions. Thefindings also support the conclusion that the use of IT ispervasive in the organizations for their HRM activities.However, there is no standardization in the integrationof computer software into main HRM activities. This maybe explained by the gap between job requirements andthe ability of employees to perform HRM tasks. Ingeneral, organizations do not have portals exclusivelyfor HR functions and use different computer software forsimilar HRM functions. This also means that thesetechnologies are not systematically and maturely usedfor HRM functions. It was found that strategic integration,forecasting and planning, human resources analysis, andcommunication and integration have no relationship withhuman resource functionalities. Whereas, it was foundthat performance development, knowledge management,and records and compliance as dimensions of humanresources information systems have a relationship withhuman resources functionalities, accordingly, an effectover them. HRIS is mostly being employed as anadministrative tool more than a strategic one. The holisticview of the role that HRIS can play in improving theefficiency and integration of HR department into a morestrategic role was missing. The respondents could notestablish a direct link between HRIS and its impact ontheir routine work. There was a lack of clarity as to theexact value the HIRS system would add to theorganization. So even though HRIS appears to havetremendous promise it has not been fully utilizedaccording to its potential. However, more researchshould be done in other sectors to see whether thesefinding are similar in different industries. Also, it is foundthose employees’ perceptions of HRIS show differenceaccording totheir position and satisfaction of employeesfrom HRIS shows difference according to their position.The results of the research reveal that HR employeesperceive HRIS useful and they are satisfied with thesystem. It was found that both HRIS perception and HRIS



satisfaction of employees show difference according toposition variable. This finding may have its source fromthe limited access of HRIS functions depending on thepositions of employees. Thus future studies should alsoconsider the relationships between the access limitationsto information content and functions of HRIS and usersatisfaction. Overall present research provides valuableinsights into the study of utilization of IT in different HRMfunctions.

References :1. Esplin, K. (1998). 8 The International Association

for Human Resource Information Management2. Geoffrey, J. (1997). IT helps HR become strategic.

Datamation, 43(4), 110-1153. Mamoria CB, Personnel Management, Himalaya

Publishing House, New Delhi4. Chhabra TN (2004) Human Resource Management:

Concepts and Issues, Dhanpat Rai & Co., New Delhi5. Geoffrey, J. (1997). IT helps HR become strategic.

Datamation, 43(4), 110-115.6. Ammenheuser, M. (2000). ABN AMRO profiting from

self-service HR system. Bank Systems andTechnology, 37(12), 31-32.

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8. Townsend, A. M. & Hendrickson. A. R. (1996).Recasting HRIS as an information resource, HRMagazine, 41(2), 91-94.

9. Morrison, J. E. (1991). Training for performance.Chichester: John Wiley and Sons Ltd.

10. Patrick, J. (1992). Training Research and Practice.London: Academic Press. Warr, P. B. (2002).16.Learning and training. In P.B. Warr, (ed)Psychology at Work. London: Penguin Books.

11. Warr, P. B. (2002). Learning and training. In P.B.Warr, (ed) Psychology at Work. London: PenguinBooks.

12. Kirstie S. Ball, (2001),"The use of human resourceinformation systems: a survey", Personnel Review,Vol. 30 Issue 6, pp. 677 – 693.

13. Brian E. Becker, Mark A. Huselid and Dave Ulrich(2001), “The HR Scorecard: Linking People,Strategy and Performance”, Harvard BusinessSchool Press, pp. 108.

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20. Carole Tansley, Sue Newell, Hazel Williams,(2001),"Effecting HRM-style practices through anintegrated human resource information system: Ane-Greenfield site?” Personnel Review, Vol. 30 Issn:3 pp. 351 – 371.

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POLICY REFORMS AND RECENT DEVELOPMENTS IN FDI IN INDIA

Dr.K.VijayaVenkateswari1

1. Associate Professor, Department of Commerce, Sri Ramakrishna College of Arts & Science for Women, Coimbatore.

IntroductionApart from being a critical driver of economic growth,foreign direct investment (FDI) is a major source of non-debt financial resource for the economic development ofIndia. Foreign companies invest in India to take advantageof relatively lower wages, special investment privilegessuch as tax exemptions, etc. For a country where foreigninvestments are being made, it also means achievingtechnical know-how and generating employment. TheIndian government’s favorable policy regime and robustbusiness environment have ensured that foreign capitalkeeps flowing into the country. The government has takenmany initiatives in recent years such as relaxing FDInorms across sectors such as defence, PSU oilrefineries, telecom, power exchanges, and stockexchanges, among others.

Objectives of the StudyThe main objective of this paper is to study the policyreforms made by government to attract more FDI anddevelopments in FDI in India. According to Departmentof Industrial Policy and Promotion (DIPP), the total FDIinvestments India received in FY 2015-16 (April 2015-March 2016) was US$ 40 billion, indicating thatgovernment's effort to improve ease of doing businessand relaxation in FDI norms is yielding results.Data forFY 2015-16 indicates that the services sector attractedthe highest FDI equity inflow of US$ 6.9 billion, followedby the computer hardware and software sector (US$ 5.9billion). Most recently, the total FDI equity inflows forthe month of March 2016 touched US$ 2.47 billion ascompared to US$ 2.12 billion in the same period last year.

During FY 2015-16, India received the maximum FDIequity inflows from Singapore at US$ 13.69 billion,followed by Mauritius (US$ 8.35 billion), USA (US$ 4.19billion), Netherlands (US$ 2.64 billion) and Japan (US$2.61 billion). Healthy inflow of foreign investments intothe country helped India’s balance of payments (BoP)situation and stabilised the value of rupee.FDI in Indiawitnessed an increase of 29 per cent and reached US$40 billion during April 2015-March, 2016 as compared toUS$ 30.93 billion in the same period last year.Accordingto the data released by Grant Thornton India, the totalmerger and acquisitions (M&A) and private equity (PE)deals in the month of April 2016 were valued at US$ 5.5

billion (100 deals), which is 2.2 times higher as comparedto April 2015.

India has also overtaken China as world's top foreigndirect investment (FDI) destination with US$ 63 billionof FDI announced in 2015 including high-value projectannouncements across the coal, oil and natural gas,and renewable energy sectors.

Government Initiatives/ FDI Policy Reforms duringthe Year 2016• Government has decided to relax local sourcing

norms up to three years for single brand retail outlets.The NDA government announced, what it termed, a“radical liberalisation” of the Foreign Direct Investment(FDI) regime by easing norms for a host of importantsectors including defense, civil aviation andpharmaceuticals, opening them up for completeforeign ownership.

• The decision on FDI reforms, taken at a high-levelmeeting chaired by Prime Minister NarendraModi,also included paving the way for companies such asApple Inc to immediately set shop in India.

• The government has tightened rules for suchcompanies producing items with cutting-edge andstate-of-art technology -- by giving them only a three-year blanket exemption from the 30 per cent localsourcing norm over and above the five years wherethe 30 per cent procurement requirement would haveto be met as an average of five years’ total value ofthe goods purchased. This is to ensure that theymanufacture in India rather than making profitsthrough just trading activities.

• In defence, foreign investment beyond 49 per cent(and upto 100 per cent) has been permitted throughthe government approval route, in cases resulting inaccess to modern technology in the country. Thecondition of access to ‘state-of-art’ technology in thecountry has been done away with, as many foreigninvestors had complained about the ambiguityregarding that term.

• The decisions included permitting 100 per cent FDIunder government approval route for trading, includingthrough e-commerce, in respect of food productsmanufactured or produced in India, bringing into effectthe proposal made in the Budget 2016-17.



• To promote the development of pharmaceutical sector, the government has permitted up to 74 per cent FDI underautomatic route in existing pharmaceutical ventures. It added that the government approval route will continuebeyond 74 per cent FDI and upto 100 per cent in such brown-field pharma.

• The government has permitted 100 per cent FDI in India-based airlines. However, a foreign carrier can only ownupto 49 per cent stake in the venture, and the rest can come from a private investors including those basedoverseas. This is expected to bring in more funds into domestic airlines. To boost airport development andmodernization, 100 per cent FDI in existing airport projects has been allowed without government permission,from 74 per cent permitted so far. The move comes close on the heels of the new civil aviation policy that relaxednorms for domestic carriers to fly abroad.

THE BIG BANG EFFECT

In sweeping reforms to FDI norms, the Centre has opened up defence, civil aviation,single - brand retail and pharma sectors to more investments

Defence• Earlier, FDI beyond49 per cent waspermitted through ap-proval route in casesof access to modernand ‘state-of-the-art’technology

• Now, the govt.has done away with‘State-of-the-art’technology clause

• Earlier, it was74 per cent for thiscategory

• Single brand retail:Local sourcing normseased for three yearsand a relaxed sourcingregime introduced forfive years

• It has been decidedto permit up to 74 percent FDI under automaticroute in brownfieldprojects; approval routebeyond 74%

Lottery, gambling, atomic energy, RealEstate Investments Trusts and railwayoperations

FDI continues to be prohibited in

Aviation Retail

Pharma

• 100 per cent FDIunder automaticroute in brownfieldairports (wherefunds are pumpedinto an existingairport) has been permitted

http://www.thehindu.com/news/national/modi-reviews-fdi-policy

Developments in FDISome of the recent significant FDI announcements are as follows:• Honeywell International Inc, the US-based technology and manufacturing solutions provider, has unveiled a new

refining technology in Gurgaon, which will be dedicated to helping Indian refiners get more clean transportationfuel, reduce imports of crude oil and produce environmentally preferable diesel fuels.

• Apple Inc has started its first development centre outside the US in Hyderabad, which will employ over 4,000people and focus on Apple Maps, the company’s digital maps and navigation service.

• Panasonic Corporation plans to set up a new manufacturing plant for refrigerators in India with an investment ofRs 250 crore (US$ 37.28 million), and also invest around Rs 20 crore (US$ 3 million) on an assembly unit forlithium ion batteries at its existing facility in Jhajjar in the next 8-10 months.

• Vital Paper Products, one of the major supply chain players in the paper and paper products industry, plans toset up a packaging product unit in the special economic zone (SEZ) of Sri City, Andhra Pradesh, at an investmentof Rs 60 crore (US$ 8.95 million), which will be operational from April 2017.

• Vistra Group Ltd, a Hong Kong-based professional services provider, has acquired IL&FS Trust Company Ltd,India’s largest independent corporate trust services provider, which will enable Vistra to expand the platform toprovide a broader suite of corporate and fiduciary services and thereby gain a foothold in the Indian corporateservices market.



• Banana Republic, an American fashion brand ownedby GAP, plans to open its first store in India by earlynext year by entering into a partnership with ArvindRetail.

• Silver Spring Capital Management, a Hong Kong-based equity hedge fund, plans to invest over 2,000crore (US$ 298 million) in Hyderabad-basedinfrastructure developer Transstroy India Ltd, forconstruction of highways in the country.

• E-commerce giant Amazon plans to set up its secondlargest global delivery centre outside the UnitedStates, in Hyderabad, which will be 2.9 million squarefeet in size and employ 13,500 people, compared to1,000 Amazon employees across different officescurrently.

• Global beverage company Pepsi plans to invest Rs500 crore (US$ 74.56 million) to set up another unitin Maharashtra to make mango, pomegranate andorange-based citrus juices, while biotechnology giantMonsanto plans to set up a seed plant in Buldhanadistrict of Maharashtra.

• Apple will build its first technology developmentcentre outside the US in Hyderabad with aninvestment of US$25 million, likely employing about4,500 people, a senior Telangana state governmentofficial said.

• Japan has won the right to construct India’s first bullettrain, while offering a loan of US$ 8.11 billion to Indiafor the same

• Chinese mobile handset maker Coolpad GroupLimited has committed US$ 300 million for settingup a Research and Development (R&D) centre andits own assembly line in India by 2017.

• Indian Railways has issued a Letter of Award (LoA)to US-based General Electric (GE) for a Rs 14,656crore (US$ 2.19 billion) diesel locomotive factoryproject at Marhowra, and to French transport majorAlstom for Rs 20,000 crore (US$ 2.98 billion) electriclocomotive project in Madhepura, Bihar.

• Foxconn has signed a Memorandum of Understanding(MoU) with Maharashtra state government to investUS$ 5 billion over the next three years for setting upa manufacturing unit between Mumbai and Pune.

Germany-based ThyssenKrupp group is aiming to doubleits revenue from India to US$ 1 billion in next three-fouryears while the group’s elevator unit, ThyssenKruppElevator, plans to invest EUR 44 million (US$ 50.5 million)to set up a manufacturing plant in Chakan, Pune.

ConclusionIndia is now the most open economy in the world forFDI. Today’s FDI reforms will give a boost toemployment, job creation and benefit the economy. Thisis second major (FDI) reform after the last radical changesannounced in November 2015. In November last year,the government announced FDI reforms across severalsectors. These are good measures that will help increating headroom for foreign capital to come in,especially in sectors such as defence and civil aviationthat are capital intensive. According to United NationsConference on Trade and Development (UNCTAD) WorldInvestment Report 2015, India acquired ninth slot in thetop 10 countries attracting highest FDI in 2014 ascompared to 15th position last year. The report alsomentioned that the FDI inflows to India are likely to exhibitan upward trend in 2015 on account of economicrecovery. India also jumped 16 notches to 55 among140 countries in the World Economic Forum’s GlobalCompetitiveness Index that ranks countries on the basisof parameters such as institutions, macroeconomicenvironment, education, market size and infrastructureamong others. Government should also take manydecisions for removing unnecessary processbottlenecks, thereby making it easy for investors toinvest in India. The country has more potential to attractfar more foreign investment. This can be achieved byfurther liberalizing and simplifying the FDI Regime.

References1. Dr.Jasbir Singh, Ms.Sumitha Chadha & Dr.Anupama

-Sharma(2012), “Foreign Direct Investment in India:An Analysis”, International Journal of Engineering &Science,Vol1. Issue5,pp.34-42

2. BhavyaMalhptra(2014), “FDI: Impact of IndiaEconomy” Global Journal of Business Management& Information Technology, Vol.4,No.1,pp.17-23

3. www.ibef.org4. http://www.rediff.com/business/worldbank 2013

estimates5. http://articles.economictimes.indiatimes



PERFORMANCE EVALUATION OF PUBLIC AND PRIVATE SECTORMUTUAL FUNDS

N. Vijayalakshmi1

Abstract

Mutual fund industry has become extremely popular in Indian financial system. A mutual fund works on the principleof collective investment and is expected to provide the benefits of diversification and professional management.Mutual fund is an investment avenue designed primarily for the investors having small and infrequent savings andlacking requisite skills for investment management. Thus, the mutual funds are significant financial intermediarycollecting funds mainly from small investors and investing them in financial market securities. The paper tries toestablish the performance evaluation of public and private sector mutual funds. The study is based on the secondarydata which has been collected from the fact books and published annual reports of both types of mutual funds. Thepaper found that the Private Sector Mutual Funds have recorded much better performance as compared to the Publicsector Mutual Funds mainly due to better Funds allocation, better Management and efficient performance of PortfolioManager. This result was arrived at after calculating and comparing the Sharpe, Treynor, beta and Jensen ratio.

1. Assistant Professor of Commerce (SF), V.H.N.S.N. College, Virudhunagar.

IntroductionMutual fund industry today is one of the most attractiveinvestment avenues in India. Mutual fund is a goodinvestment option for the medium and small investorswho have limited resources and do not have professionalknowledge about stock market and other investmentopportunities. Mutual funds are the significant financialintermediary collecting funds mainly from small investorsand investing them in financial market securities. A mutualfund is an investment company or trust that pools theresources of thousands of its shareholders or unitholders and invest it on behalf of these diversifiedsecurities and a cross section of companies to attainthe objectives of the investors, which in turn achieveincome or growth or both i.e. steady return or capitalappreciation or both along with low risk. Thus, mutualfunds offer several benefits to the investors likediversification, professional management, tax benefits,transparency, liquidity, flexibility, choice of schemes andlow cost etc.

History of Mutual Funds in IndiaThe mutual fund industry in India started in 1963 withthe formation of Unit Trust of India (UTI), under the initiativeof Government of India (GOI) and Reserve Bank of India(RBI). The history of mutual funds in India can be broadlydivided into four distinct phases

Phase I - 1964-87UTI was established on 1963 by an Act of Parliament. Itwas set up by the Reserve Bank of India and functionedunder the regulatory and administrative control of the

Reserve Bank of India. In 1978 UTI was de-linked fromthe RBI and the Industrial Development Bank of India(IDBI) took over the regulatory and administrative controlfrom RBI. The first scheme launched by UTI was UnitScheme 1964. At the end of 1988 UTI had Rs.6,700crores of assets under management.

Phase II – 1987-1993 (Entry of Public Sector Funds)Since 1987 non- UTI, public sector mutual funds set upby public sector banks and Life Insurance Corporationof India (LIC) and General Insurance Corporation of India(GIC) came into existence. SBI Mutual Fund was thefirst non- UTI Mutual Fund established in June 1987followed by Canbank Mutual Fund (Dec 87), PunjabNational Bank Mutual Fund (Aug 89), Indian Bank MutualFund (Nov 89), Bank of India (Jun 90), Bank of BarodaMutual Fund (Oct 92). LIC established its mutual fundin June 1989 while GIC set up its mutual fund inDecember 1990. By the end of 1993, the mutual fundindustry had assets under management of Rs.47,004crores.

Phase III – 1993-2003 (Entry of Private Sector Funds)In 1993 the Indian mutual fund industry went through amajor change with the entry of private sector mutualfunds. This gave the Indian investors a wider choice offunds. i.e. the first Mutual Fund Regulations wereintroduced in 1993. All mutual funds except UTI were tobe registered and governed. Kothari Pioneer (now mergedwith Franklin Templeton) was the first private sectormutual fund registered in July 1993. The 1993 SEBI(Mutual Fund) Regulations were substituted by a more



comprehensive and revised Mutual Fund Regulations in 1996. The industry now functions under the SEBI (MutualFund) Regulations 1996.

The number of mutual fund houses went on increasing, with many foreign mutual funds setting up funds in India. Theindustry witnessed several mergers and acquisitions. At the end of January 2003, there were 33 mutual funds withtotal assets of Rs. 1,21,805 crores. The Unit Trust of India with Rs.44,541 crores of assets under management wasway ahead of other mutual funds.

Phase IV – since February 2003In February 2003, the Unit Trust of India Act, 1963 was repealed. UTI was bifurcated into two separate entities. Oneis the Specified Undertaking of the Unit Trust of India with assets under management of Rs.29,835 crores as at theend of January 2003, representing broadly, the assets of US 64 scheme, assured return and certain other schemes.The Specified Undertaking of Unit Trust of India, functioning under an administrator and under the rules framed byGovernment of India does not come under the purview of the Mutual Fund Regulations.

Different types of mutual Funds schemes:

Particulars Mutual Fund Scheme Definition

Based on Maturity Open Ended Fund It is available for subscription throughout the year and can bePeriod redeemed on a continuous basis.

Close Ended Fund It has a definite maturity period for 3-6 years

Interval Fund Combines the feature of both open ended and close endedmutual funds.

Based on Equity/Growth Fund Invests into long term growth fundsInvestment Debt/income Fund Invests in short term liquid funds.Objective Balanced Fund Invests in both equities and fixed income instruments.

Money Market/Liquid Fund Invests in short term instruments like T-bills, Certificate ofDeposits and Commercial Paper for a period of less than 91days.

Gift Fund Invests exclusively in Government securities.

Other Schemes Tax Saving(Equity Linked Growth oriented schemes invests mainly in equities and provideSavings Schemes) Funds tax rebate to the investors under income tax provisions, 1961.

Index Funds Invests in specific indices like BSE Sensex, S&P CNX Nifty

Sector specific Fund Invests in specific sector or industries like FMCG, IT, Pharma,automobile etc.

Objectives of the study• To evaluate fund performance sponsored by Public Sector entities and Private Sector entities for any significant

style differences.• To evaluate fund performance for event wise style differences between funds sponsored by public sector and

private sector.• To evaluate for persistence in mutual fund performance.

Review of Literature1. Kumar Vikas [2010] evaluated the performance of 20 mutual funds schemes managed by five mutual funds using

monthly NAV for period between 1st Jan 2000 to 31st Dec 2009 for 10 year2. Annapoorna and Gupta (2013) in their study examined the performance of mutual fund schemes ranked 1 by

CRISIL and compare these returns with SBI domestic term deposit rates and found that the most of the mutualfund schemes have failed to provide SBI domestic term deposit.



Research MethodologyData Collection: The present research is a study of examining and analyzing selected mutual fund schemes byusing different financial and statistical tools. The schemes taken for this purpose are Equity-Diversified MutualFund Schemes. This study compares 6 equity-diversified funds launched by public sector and private sector suchas SBI Blue Chip Fund, UTI Equity Fund, BNP Paribas Equity Fund, Franklin India opportunities fund, Birla Sun LifeTop 100 Fund, Kotak Opportunities.

The study is exclusively based on secondary data, which has been collected from various websites, journals andfact sheets of various mutual fund schemes published by them time to time.

Tools & Techniques: For the performance of the mutual fund schemes various measurement of the portfolio are usedas beta, Sharpe Index, Treynor Index and Jensen Index.

a) Sharpe ratio : It is also known as sharpe index, reward to variability ratio, shapre measure. It measures theperformance of an investment by adjusting the risk (standard deviation). It is calculated as follows :Sharpe ratio = (ARP - RF)/ σP

ARP = Average Return on PortfolioRF = Risk Free RateσP = Standard deviation of Portfolio

b) Treynor ratio : It is also known as treynor measure or reward to volatility ratio. It measures the performance ofan investment by adjusting it for systematic risk. Beta is used as a measure of volatility. It is calculated asfollows:Treynor ratio = (ARP - RF) / βP

ARP = Average Return on PortfolioRF = Risk Free RateβP = Portfolio Beta

c) Jensen Measure : This ratio is also known as Jensen alpha. Jensen measure is risk adjusted measure thatrepresents average return on a portfolio that is predicted over and above the Capital Assets Pricing Model(CAPM) which is indicated by portfolio Alpha .It is calculated as follows:Jensen ratio = ARP – (RF+ βP(ARM - RF)ARP = Average Return on PortfolioRF = Risk Free RateβP = Portfolio BetaARM = Average return on MarketA positive alpha indicates good performance whereas negative alpha indicates poor performance.

Table - 1 : Return, Risk of Mutual Fund

SBI Blue Chip Fund 0.209 0.803 3.849 0.943

UTI Equity Fund 0.223 0.828 3.706 0.978

BNP Paribas Equity Fund 0.195 0.830 4.253 0.949

Birla Sun Life Top 100 Fund 0.195 0.848 4.362 1.001

Franklin India Opportunities Fund 0.278 0.896 3.224 1.012

Kotak Opportunities 0.257 0.876 3.403 1.007

Schemes Average(%)

Standarddeviation (%)

Co-efficient ofvariation Beta



Table - 2 : Sharp Ratios, Treynor Ratio, Jensen Alpha

Schemes Sharpe Ratio Treynor Ratio Jensen Alpha

SBI Blue Chip Fund 0.231 0.196 0.057

UTI Equity Fund 0.241 0.204 0.067

BNP Paribas Equity Fund 0.207 0.181 0.042

Birla Sun Life Top 100 Fund 0.202 0.171 0.035

Franklin India Opportunities Fund 0.284 0.251 0.116

Kotak Opportunities 0.267 0.232 0.096

Empirical Results :Table 1 shows the descriptive statistics like return, risk, coefficient of variation and beta of Top 6 equity diversifiedmutual funds in India for the month March2016.It also indicate the average portfolio return and risk in comparison tothe benchmark i.e. S&P CNX Nifty. The result of Table 1 shows that all the mutual fund schemes under study areproviding higher returns as compare to the market though standard deviation is little higher than the market in all theschemes. SBI Blue chip is having lower standard deviation after market index. Since coefficient of variation islowest in case of Franklin India Opportunities Fund, which is good for the investors who wants to reap higher returnat a lower risk.

The results of relative measures of return are represented in Table 2. Sharpe measure, Treynor measure and Jensenalpha are higher in case of all the mutual funds schemes as compare to the market. Among the Top 6 mutual fundFranklin India Opportunities Fund is the best for the investors giving higher returns. Jensen alpha is also higher ofFranklin India Opportunities Fund indicating that it gives higher abnormal return.

ConclusionThe favorite sector for Equity Diversified Mutual Fund schemes is Energy followed by banking, technologies,communication and engineering. Private sector mutual fund schemes are performing better than Public sectormutual fund schemes. It shows that investment for longer period would get absolute higher return than the risk freerate of return. The study found that amongst all the top 6 mutual fund Franklin India opportunity fund is the besthaving lower coefficient of variation and higher sharp ratio, Treynor ratio and Jensen alpha. Currently if any investorswant to reap higher return at a lower risk then Franklin India Opportunities fund is the best.

References :[1] Annapoorna, M., & Gupta, P. K. (2013). Comparative Analysis Of Returns Of Mutual Fund Schemes Ranked

1 By Crisil. Tactful Management Research Journal.[2] RBI (Reserve Bank of India) Website, http://www.rbi.org.in/home.aspx[3] NSE (National Stock Exchange) India website, http://www.nseindia.com/[4] Investments, Bodie, Kane, Marcus, Mohanty, Tata McGraw Hill, 6th edition[5] Indian Mutual Fund Industry-The Future in a Dynamic Environment, Outlook for 2015, published by KPMG &

CII, June 2009 .



EVALUATION OF CATERING SERVICES PROVIDED BY INDIANRAILWAY CATERING AND TOURISM CORPORATION LIMITED

Dr.V.Manohar1 S.Selvanathan2

1. Associate Professor, Department of Commerce, VHNSN College (Autonomous), Virudhunagar.2. Assistant Professor, Department of Commerce SF, VHNSN College (Autonomous), Virudhunagar.

IntroductionIndia is a country of numerous festivals and ceremonies,held in the form of important events, due to which scopeof catering business in the past, was limited to socialevents like marriages etc. the catering industry in Indiais finally extending its reach beyond marriages and theIndian catering services providers are enjoying the goodtimes. Indian Railways is one of the largest systems inthe world. It is also one of the very few railway systemsin the world generating operating surpluses. With amodest beginning in India on April 16, 1853, when thefirst wheels rolled on rails from Bombay to Thane, theIndian Railways has emerged today as the main vehiclefor socio-economic development of the country. “Fromthe mountain terrains to the long stretches through theRajasthan desert, Indian Railways cover the huge areaof the country from north to south, east to west, andconnects the entire nation”. The railway network of Indiahas brought together the whole of country hence creatinga feeling of unity among Indians. The Indian Railwayshave been a great integrating force for more than 160years. It has helped the economic life of the countryand helped in accelerating the development of industryand agriculture.

Future growth Strategy-over the years, IRCTC hasdeveloped extensive capability in the field of hospitality,catering, tourism, package drinking water and e-commerce, with the expertise in hand and support ofthe ministry of Railway, IRCTC is site to take newinitiatives in various field as it is to grow many fold incoming years. as for the corporation is poised to capturenew opportunities in railway and Non Railway segmentto sustain its high level of performance and at the sametime shall continue to lay added emphasis on developingexisting business lines.

Objectives of IRCTC Catering and Hospitality1. To provide high quality catering services directly as

well as through network of professionally competitivelicensees and franchisees.

2. To be a significant player in the hospitality business.3. To produce bulk food manufacturing facilities like food

factories etc.

Packaged Drinking Water (Railneer)To provide high quality package drinking water (Railneer).

Travel and TourismTo promote tourism across the country especially for allsegments of Rail Passengers.To provide single window solution to its customersincluding train travel, road travel, air travel, hospitality,hotel accommodation and catering etc.To develop and operate Executive Lounges, Multi-functional complexes, budget hotels etc. throughparticipation by professionals.

Internet TicketingTo maintain leading position in internet ticketing, e-commerce and technology for customers interface forrailway passengers/ customers.

Research MethodologyObjective of the StudyThe objective of our study is to evaluate the level ofsatisfaction among the customer of the Indian railwaycatering and Tourism Corporation Limited’s cateringservices.

Period of the StudyPeriod of the study for the Secondary data is taken forten years, from the year 2005-2006 to 2014-2015.

Significance of the studyIndian Railway plays vital role in Indian economy. IRCTCplays a vital role in success of Indian Railway. IRCTC isa largest e-commerce player in India. The result of ourstudy will show the view and perception of general(Common man) customer toward IRCTC?s services whoare well aware about its services, including foods providedby on board and its varies subsidiary. It will also help toknow policy maker especially IRCTC’s expert about muchcustomer’s are satisfied or dissatisfied with theIRCTC’scatering services and to locate various areas ofimprovement for increasing the satisfaction level ordecrease the dissatisfaction level so that policy can beframed accordingly and customer can be careful andalert about its threat created by IRCTC product & serviceson the travel and off the travel.



Table - 1: Profitability of IRCTC(Rs.in Lakhs)

Years Catering RailneerInternet

TicketingDepartmental

CateringTourism Income Total

Income

2005 -0611,961.38

(84.67%)

4.45

(0.03%)

1,275.95

(9.03%)

258.74

(1.83%)

625.80

(4.43%)

14,126.32

(100%)

2006 -0722,318.73

(84.33%)

0.81

(0%)

2,602.53

(9.83%)

407.59

(1.54%)

1,136.48

(4.29%)

26,466.14

(100%)

2007 -0826,409.31

(83.37%)

2.85

(0.01%)

4,355.25

(13.75%)

0

(0%)

908.24

(2.87%)

31,675.65

(100%)

2008 -0932,078.19

(74.18%)

6.71

(0.02%)

8,261.19

(19.10%)

217.11

(0.5%)

2681.99

(6.20%)

43,245.19

(100% )

2009 -1035,163.33

(67.61%)

16.3

(0.03%)

12289.26

(23.63%)

201.12

(0.39%)

4338.07

(8.34%)

52,008.08

(100%)

2010 -1130390.90

(59.50%)

16.49

(0.03%)

14292.46

(27.98%)

145.12

(0.28%)

6,228.19

(12.19%)

51,073.16

(100%)

2011 -122806.57

(9.81%)

11.34

(0.04%)

16064.43

(56.15%)

138.54

(0.48%)

9588.65

(33.52%)

28,609.53

(100%)

2012 -132026.33

(5.08%)

101.53

(0.25%)

18794.15

(47.09%)

350.24

(0.88%)

18636.78

(46.7%)

39,909.03

(100%)

2013 -142,688.52

(4.65%)

69.99

(0.12%)

22,848.93

(39.49%)

48.66

(0.08%)

32,210.14

(55.66%)

57,866.24

(100%)

2014 -156,979.35

(9.44%)

76.97

(0.10%)

30,812.47

(41.7%)

85.46

(0.12%)

35,942.52

(48.64%)

73,896.77

(100%)

CAGR -5.24% 32.98% 37.50% -10.49% 49.94% 17.99%

Source : IRCTC Annual Reports

The above table indicates the total income of IRCTC from 2005-2006 to 2014-2015. The income of IRCTC has afluctuating trend. The highest income of Rs.73,896.77 lakhs is registered in the year 2014-2015. The lowest incomeof Rs.14,126.32 lakhsis registered in the 2005-2006. The compound growth annual return values shows that 17.99percent.

Catering ServicesRailways shall progressively take over management of all mobile catering services including base kitchens andmobile catering through departmental catering in a phased manner Railway Board shall determine the menu andtariff for the standard meals, breakfast, tea, coffee and catering charges for meals, etc., which are included in thefare. Zonal Railways will determine the menu and tariff for all other items including a-la-carte items and Jan Aharoutlets.



22,318.7326,409.31

32,078.1935,163.33

30390.9

2806.57 2026.33 2,688.526,979.35

0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

35,000.00

40,000.00

Catering

Fig. 1

Chart - 1 : Income of Catering Services Division

It is clear from above the chart exhibits the License Catering Income of IRCTC during the study period from 2005-06to 2014-15. The License catering income of IRCTC shows a fluctuating trend during the period. Highest value ofRs.35,163.33 lakhs is registered during the year 2009-10, followed by Rs.32,078.19 lakhs in the year 2008-09. Theyear 2012-13 has the lowest income of Rs.2026.33 lakhs. It implies that the Indian Railways is not in a goodLicense catering income. Comparatively total Compound Annual Growth Rate (17.99 percent) with Catering servicesCompound Annual Growth Rate showed by negative value of 5.24 percent. IRCTC is most refurbishment of Cateringservices. The catering services growth is every year by sluggish development. IRCTC more concentrate to developcatering service introduced a suitable new scheme.

Problems faced in Railway CateringInfrastructure DevelopmentThe Base Kitchens have not been renovated from a long time. Most of them were constructed during the colonialtimes and in the early years after independence. There is a need for developing these kitchens according to modernstandards – ISO 22000.

The storage measures adopted in the base kitchen is an area of concern. Separate storage and cooking of vegetarianand non-vegetarian raw food items should be followed. Storage of water used for cooking is another issue that isimportant as contaminated water is an easy source of spreading diseases.

Food Quality and HygieneThis is by far the most important issue to be looked into. A lot of complaints concern with the quality of the foodprovided. In addition, there are many complaints regarding the food hygiene. Some of the components that constitutein the food quality and hygiene services are:a. Quantity of food: Many passengers complain that the quantity of food was insufficient to their expectation.b. Variety of food: Passengers, mostly who travel in long distance trains often complain about the same menu

being served during all travels. They expect the variety in the food provided to them.c. Hygiene level: This is one aspect which attracts most number of complaints. There are a lot of questions raised

by the passengers on the food not adhering to the proper standards.d. Packaging: Improper packaging often attracts a lot of criticism.e. Timing of meal: Often, when the train runs late, the timing of meal gets delayed and hence, it causes a negative

impression of the Railway catering services.



f. Temperature of Meal: Meals served cold often leadto criticism of the catering facilities on-board and off-board cater

g. Speed of delivery: The time frame from placing of theorder and delivery of the services is crucial.

Staff MisbehaviorThe railway staff, particularly servicing and cleaning staffhas the same responsibility as any other staff in themultinational food chains and are expected to be politeand answerable to all the queries raised by thepassengers. But often, it is found that the staffs abusethe person instead of clarifying his doubts/queries.

OverpricingSelling of food items at higher price than their MarketRetail Price (MRP) is very prevalent in the trains. Due tolack of alternatives, the passenger hasno otheralternative but to buy the food items at overpriced rates.

Vending Stalls selling more items than they areassignedThe vending stalls have a license of selling an item of aparticular brand. The brand is being decided by thetender system. But there have been instances wherethe shopkeeper keeps goods of other brands too in orderto increase their sales.

No Provision of Mid-Career Training/ ProfessionalEthicsOnce an employee is recruited into the service, there isno program for inculcating the professional ethics in themafter a few years of service. This is one of the reasonsfor slow pace of work and staff misbehavior.

Feedback Management SystemA very crystal clear feedback registry system wasdeveloped by the IRCTC. Feedback facility is availablethrough telephone, SMS and web. There is also aregister that is maintained by the authorities working atthe pantry car.

But the procedure for addressing a complaint is not verycertain. In addition, actions on the service providers incase of repeated complaints against them have to bedone.

Waste Management SystemLeftovers and other catering waste have to be properlydisposed of. In general, waste is being thrown out of thetrains. This causes degradation in the quality of thetracks. It is also harmful for the families residing nearthe railway tracks. Railways suffer a lot of losses due todegradation in the quality of the tracks. In railwaystations, catering waste is being thrown on the tracks

which cause perception of the cleanliness of the stationto decline. Also, a mechanism for proper waste disposalaccording to the type of waste- biodegradable, non-biodegradable and recyclable has to be formed.

Effective Pest ControlTechniques to prevent pests have to be implementeduniformly over all the base kitchens, Pantry Cars andother Vending Stalls.

FindingRegarding the increase in the number of complaints thatpeople has against catering services of IRCTC; an officialwhen contacted said that the Railways did not raisecatering charges since 1999. The prices of eatables werenot in synchronization with the market dynamics. Thisimpacted the quantity and the service, In the course ofsubsidization, the catering business was losing itsfinancial viability and customers were at the receivingend.

Infrastructure : The base kitchen is not fully functionalas of now. So, the orders are very few and the food isprepared according to the orders placed.

Raw Materials: Vegetables are bought on that very day.Regarding rice and pulses and wheat, a tender is passedand the stock of a month is bought.

Storage: Veg and Non Veg items are stored and cookedseparately. Water is stored in a tank which is cleanedand checked monthly.

Officials Checking : There are officials from threedepartments - Accounts, Commercial and Medical whoare responsible for checking. The medical officials takesamples (of stored materials and cooked materials) andsend it to the labs to evaluate the performance.

Cooks: A master cook is there who is mainly responsiblefor preparing quality and tasty food.

Staff : Earlier most of the staff was from the contractors.Now, a proper railway staff is there that is expected tobe polite and hence serve better.

Hygiene: Proper uniforms(adhering to rail ministry guildlines) i.e. hair net, aprons, gloves are worn. Spitting,tobacco, cigarettes are banned inside base kitchen.

Leftovers: Thrown out because passenger safety is thepriority of the railways.

Gap analysisThere have been a lot of efforts on the part of the ministryof railways to improve the catering services time to time.A subsidiary of the Indian Railways, Indian RailwayCatering and Tourism Corporation (IRCTC) was formedto facilitate the promise of the government. The



corporation brought the domain in which the railway wasalways suffering losses to a profit making area. However,in the railway budget of the year 2010, catering serviceswere taken back from IRCTC and given to Zonal Railways.The reason cited by the rail ministry was an increase incomplaints over last few years against the cateringservices. The IRCTC had developed a very crystal clearmechanism for the passengers to provide feedback. Thiswas an important and a prominent reason for the increasein the passenger complaints.

Use of quality tools and techniques for improvementin the servicesThe maintenance of food quality in supply chain is ofprime importance in catering services. The distributionof the food products for the railway catering servicesconsists of the following processesa. Primary Food Production : The food is being

produced by the farmers in their farms.b. Purchasing and Storage : The produced food is

then purchased by the retailers and the stock isstored in their storage facilities.

c. Processing in the base kitchen : The stored rawmaterials are being used as cooking ingredients inthe base kitchen.

d. Packaging : The food items are then packaged andsent to the distribution units.

e. Distribution units : These consist of vending stalls,onboard catering and other stalls that provide servicesto the customers.

SuggestionsThere is a large scope for research in the field of „Qualityand Safety in Supply chain?. Maintaining the quality andsafety during the journey of the goods from the supplierto the consumer is of very high importance in presenttimes.

Transportation sector plays a great role in maintainingquality in retail. This is a very important but a very weaklink in the entire chain.

Important factors in transportation include• Protection from potential sources of contamination –

physical, chemical, microbial.• Protection from damage• Maintaining environmental conditions – eg cold chain.

ConclusionAt present passengers are well aware and moreconvenient about the online reservation system of IRCTC,this system is being used by the educated populationfor their travel plan and ticket booking.

The changes that would change the face of the cateringservices should be encouraged. As IRCTC is the onlyrailway service provider in a country it enjoys 100%monopoly in the railway travel market and to this reasonthe quality of the catering services are not up to theappropriate standard, which need to make tremendousimprovement not only in its customer service but also inthe quality of food it provides to its travellers. Moreover ithas developed and follows good quality check systemto maintain the same and also train its staff memberproperly. As we know that today more than 10 millionpassenger travels by train everyday and almost all ofthem are from middle class and lower class family whocannot afford to travel by the AC coach. So the food andbeverages as well as other services offered in the normaltrain also need to be improved.

References1. Priyanka Gite and Kumar Navodit Manav 2012,

International Journal in Multidisciplinary andAcademic Research (SSIJMAR), Vol. 3 (3), Evaluationof Services provided by Indian Railway Catering andTourism Corporation Limited.

2. Pranay Patil 2012, Rakesh Foundation, How toimprove catering services in Indian Railways pp. 1 -72.

3. Rajeshwari.G and Dr.Tamilchelvi.N 2014, InternationalJournal of Innovative Research and Studies,Passengers Attitude towards Retention StrategiesAdopted By the Indian Railways: A Study in SalemDivision of Southern Railways Vol. 3 (5), pp. 646 -654.

4. https://www.irctc.co.in/



A STUDY ON CONSUMER ATTITUDE TOWARDS TELESHOPPINGNETWORK

(With Special Reference to Coimbatore City)

Dr.B.Sivakumar1 Lissy.N.S2

Abstract

Consumer is the king of modern marketing. All company activities rotate around the prime goal of satisfying consumerneeds and to retain them as customers for long run. Only the expectation, need, urge and the desire makes acustomer to purchase a product. Today telephone has become an indispensable means of communication in business.There are many big business houses where all transactions take place through telephone. They advertise theirproduct on television or other media where a clear demonstration of the products like the price and code number of theproduct, price design, its usage, various models and colour, discount or offer if any, the contact number of the sellers,mode of payment and delivery are displayed on screen. The customer can dial the telephone number and get therequired product at the desired place and make payment on receipt. This mode of purchase is termed as teleshoppingor Home Shopping, Asian sky shop, Lifestyle Electronics Pvt. Ltd., Amway India, Femina, Retail Biz., Dee’s homeshoping (Dee’s) Biz., Teleshopping Network (TSN), United Televisions (UTS), Oriflame, Amazon, Teja enterprise, TVShopping, QVC Shopping, Sakthi Shopping and telebrands are the examples of the companies doing teleshoppingbusiness in our country. This study deals with few selected companies such as Asian sky shop, Tata sky shop, Tejaenterprise, Telebrands, TV Shopping, QVC Shopping and sakthi teleshopping.

1. Assistant Professor, HOD, Department of Commece CA,VLB Janakiammal College of Arts & Science Coimbatore.2. Assistant Professor, Department of Commece CA,VLB Janakiammal College of Arts & Science, Coimbatore.

IntroductionDirect marketing through television is faster growingbusiness in the world today. Telemarketing in India haslaunched recently within a short span of time and hasbecome the craze of entrepreneurs. With the growingproliferation of credit cards and various electronicallydevices, the trend of “shopping from home” has slowlychanged the society.

Tele shopping is a pioneering concept and it seems tobe a modern and converted medium and its scope wouldhighlight the future. If it proved to be infotainment,convenience and conductive to impulsive purchase andinstant feedback it will be the best medium for launchingnew and unique products.

Teleshopping is the recent trend in marketing whichdisplays the product in the television. Information isconcerned to be the most valuable resource in thepresent economy and society. All the query of theproduct is screened such as product design, its usage;contact numbers, distribution centers, mode of payment,mode of delivery of the product give the buyer a clearidea. It creates an urge for every person who usestelevision. So that it makes the consumer to buy theproduct according to the taste and preference.

TeleshoppingTeleshopping means shopping through the internet. Thebuyer places the purchase order through telephone or

website of the seller, by mail or the sales representatives.Goods are delivered at the door of the buyer by theseller’s staff. Teleshopping is popular for fast movingconsumer goods like toothpaste, cosmetics, detergents,groceries,etc., for which the consumer does not want togo to the market. Convenience, price and assurance ofquality are the prime considerations in buying theseproducts. Teleshopping is likely to become more populardue to increasing number of couples both husband andwife working, desire for more leisure, improvements inthe means of transport and communications, increasingeducation levels and other such developments.

Statement of ProblemIn this fast moving world, consumers do not have timeto go for shopping outside because of their busy life.Today’s people want everything to happen with a clickof finger or a call made. The information revolution in thetelecommunications and institutional innovations hadinitially promised to change the nature of the market alltogether. Today’s market is a place where there are nointermediaries between a seller of a good and its ultimatecustomer. The Teleshopping and its technologies haveenabled people to saves the time and costs. Thusteleshopping has strong economic implications at bothmicro and macro level. So a study on consumer attitudetowards Tele shopping states the attitude of the peopletowards Tele shopping. Further, the study also aims toknow the preferred product of the consumers inTeleshopping.



Objectives of the StudyTo study the consumer attitude about Tele shoppingTo know the problems faced by Tele shopping customer

Scope of the StudyOne of the major objectives of the profit-orientedorganization is to earn profit and expand its businessactivity. Expansion is made possible only with newinnovations. The traditional method of shopping is popularin a country like India where people go to the shopdirectly and buy the products required to them. ButTeleshopping method of shopping is popular in foreigncountries. The trend of Tele shopping is new to Indianmarket but it is rapidly capturing many Indian customers.To stay in business for long years it has to bring manynew innovations based on the needs and expectationsof its customers. So the survey conducted to analyzethe attitude of Teleshopping, helps the concern to knowabout the requirements and attitude of the customerstowards this field. This study conducted helps to answerthe question “Are my customers really satisfied and whatto do they expect anymore”

Methodology of the StudyPeriod of the study:The survey to know the customer attitude of Teleshoppingin Coimbatore lasted for a period of 3 months

Study AreaThe study is undertaken in Coimbatore city. It is popularlyknown as Manchester of south India, situated in thewestern part of Tamil Nadu which is well known foreducational institutions, textile industry, upcoming ITSectors. Thus Coimbatore city is chosen for the study.

Data sourceBoth primary data and secondary data is used for thestudy. Primary data are collected through questionnaireand the required secondary data are collected fromInternet and dailies.

Size of the sample :The sample size selected for the study is 150 respondentswho follow Tele shopping method of purchasing theproduct.

Sampling TechniqueConvience sampling technique was used in selectingthe sample

Hypothesis :The suitable hypothesis were framed and tested in therelevant places

Tools used:The following statistical tools were used to analysis andinterpret the data• Simple Percentage Analysis• Chi-Square Analysis

Limitation of the Study• The study is confined to Coimbatore city with limited

sample size and time period of 3 months• The consumer behavior may change accordingly to

time, fashion and technology development• Conclusions were made based on the opinion given

by the respondents

Review of LiteratureCanadian Bankers (2007), in their study on “CanadianShoppers” had reported that Canadian shoppers arebecoming more comfortable on purchasing by way ofteleshopping. They examined the percentage of Canadianteleshoppers who made purchases in 2006 andpercentage of Canadian non-buyers who plan to purchasevia telephone and internet and average amount spent byCanadian teleshoppers in 2006.

Noel Yee-Man Siu and May Mei-Shan Cheng (2009) theirstudy on “Attitude and Behaviors of Consumers inTeleshopping” had discussed the developing focuses onan examination of the personal characteristics of thepotential earlier adopters and an identification of crucialpercervied innovations attributes for online shopping,using Hong Kong as a case study. Results indicate thatthe economic gains, availability, comparability,securityrisk, monthly income, opinion leadership on technologiesproduct, attitudes towards technological development aswell as venturesome are the key factors in classifyingpotential adopters. Managerial implications arediscussed and recommendations are offered that helpmarketers in segmentation, promotion and productdesign.

John T.Marker Jr and Konstadinos Goulias (2010) in theirstudy on “Household replenishment and developing formsof teleshopping” has discussed different householdreplenishment and consumer direct-two closely relatedand developing forms of teleshopping that are emergingas strategies within border realm of supply chainmanagement could have an impact on behavior relatedto grocery shopping trips, as well as on commercialdevelopment.

Davis, Robert, – Oliver, Margo (2014) in their study on “Relationship marketing in electronic environments”discussed the setting of an interactive home shoppingin supermarket to examine the changing role of theretailers in electronic commerce environments. They



build on their previous and conceptual enquiry, which proposed a conceptual model, which posts that retailers in anECE apply a trust based approach to consumer marketing relationships.

Simple Percentage AnalysisSimple percentage analysis is carried out for all personal factors, given in the questionnaire. This analysis describesthe classifications of the respondents falling under each category. This analysis is used mainly for standardizationand comparison.

Analysis Frequency Percent

Age Below 20 years 19 12.7

20-30 years 78 52.0

30-40years 48 32.0

Above 40 5 3.3

Sex Male 72 48.0

Female 78 52.0

Marital Status Married 87 58.0

Unmarried 63 42.0

Educational Qualification School level 13 8.7

Degree/diploma 69 46.0

Post graduate 68 45.3

Occupation Employed 36 24.0

Professional 21 14.0

Business 40 26.7

Agriculture 1 0.7

Others 52 34.7

Monthly Income Upto 10,000 48 32.0

10,000-20,000 41 27.3

20,000-30,000 49 32.7

Above 30,000 12 8.0

Family size Upto 2 members 3 2.0

2-4 86 57.3

4-6 59 39.3

Above 6 2 1.3

Total 150 100

Table - 1

CHI-Square AnalysisThe chi-square analysis is mainly used to test the independence of the attribute factors. In other words chi-squaretest used to test whether one factor has significant influence over the other.

Attitude regarding products which are available through Teleshopping Network :Hypothesis : There is no significant relationship between the demographic variables of the respondents and theirattitude regarding the products, which are available through teleshopping network.



Demographic Variables Value df Assymp.sig (2 sided)

Age 30.660(a) 12 002*

Sex 29.192(a) 4 000*

Marital Status 32.461(a) 4 000*

Education 12.078(a) 8 148**

Occupation 41.806(a) 16 000*

Income 20.100(a) 12 065**

Family members 14.802(a) 12 252**

Table - 2

*Significant ** Non-significant

From the above table it is clear that, the demographic variables like age, sex, marital status and occupation havesignificant relationship with the attitude regarding products availability through teleshopping network. Hence thehypothesis is rejected. There is no significant relationship in case of education, income and family members hencethe hypothesis is accepted.

Attitude regarding mode of order through Teleshopping:Hypothesis: There is no significant relationship between the demographic variables of the respondents and theirattitude towards mode of order through teleshopping network.


Age 21.965(a) 9 009*

Sex 30.401(a) 3 000*


Education 7.162(a) 6 306**

Occupation 28.468(a) 12 005**

Income 48.042(a) 9 000*


Table - 3

From the above table it is clear that, the demographic variables like age, sex, marital status and income havesignificant relationship with the attitude regarding mode of order through teleshopping network. Hence the hypothesisis rejected. There is no significant relationship in case of education, income and family members hence the hypothesisis accepted.

Attitude regarding mode of getting the product through Teleshopping:Hypothesis: There is no significant relationship between the demographic variables of the respondents and theirattitude towards mode of getting the product through teleshopping network.


Age 34.733(a) 9 000*

Sex 9.499(a) 3 023*


Education 3.296(a) 6 771**

Table - 4



Occupation 9.886(a) 12 626*

Income 11.607(a) 9 236**


From the below table it is clear that, the demographic variables like age, sex, and family members have significantrelationship with the attitude regarding mode of getting the product through teleshopping network. Hence the hypothesisis rejected. There is no significant relationship in case of marital status, education, income and occupation hencethe hypothesis is accepted.

Findings from Simple Percentage :• Majority of the respondents are in the age group of 20-30 years who were female respondents and married.• Majority of the respondents who prefer teleshopping are Degree/Diploma graduates and belongs to other category

of occupation• Majority of the respondents earn monthly income between Rs.20,000 to Rs.30,000 with the family size between

2-4 members.

Findings from CHI-Square Test:• At 5% level of significance demographic variables like age, sex, marital status and occupation have significant

relationship with the attitude regarding products availability through teleshopping network. There is no significantrelationship in demographic variables like education, income and family members.

• At 5% level of significance demographic variables like age, sex, marital status and occupation have significantrelationship with the attitude regarding mode of order through teleshopping network. There is no significantrelationship in case of education, income and family members.

• At 5% level of significance demographic variables like age, sex, marital status and occupation have significantrelationship with the attitude regarding mode of getting the product through teleshopping network. There is nosignificant relationship in case of marital status, education, income and occupation.

Suggestions• Despite the high growth potential of teleshopping in India, there is still lack of understanding concerning the

characteristics of tele shoppers in India and impact on marketing. In the light of the current research findings andconclusions, the study recommends that companies need to have a better understanding of behavior of thepeople who purchasing through teleshopping.

• In addition, future research efforts may give special attention to the issue of reliability and trust in teleshopping• Respondents are of opinion that the prices of the product can be reduced.• Some of the respondents have stated that the quality of the product has to be improved and standardized and

delay made in delivery of the products should also be reduced.• Major problem is that many people do not have faith in the teleshopping wherein they hesitate to come forward,

even if it seems to be comfortable and less time consuming.

Comments:• The study reveals that women who were engaged in teleshopping business prefer house hold products like home

appliances, beauty care products, fashion wear, cookery items.• The men who buy products through teleshopping prefer spot wear, car accessories• People who prefer teleshopping are more comfortable with 24 hours access.

ConclusionToday television has become part and parcel in life. It is not only considered to be medium of entertainment, but itis one of the valuable things that provide variety of information that happens throughout the world. This advancementin television allows the people even to purchase any product from any part of the world. Distance is not at all abarrier. Teleshopping is a different experience, which allows every consumer to make the shopping over the television,telephone and internet in a convenient way, it becomes more enjoyable and easier than the real world shopping, and



brings benefit not only to the purchaser by promoting the sales but also the teleshop per is able to sell its productwith limited expenses.

In future, teleshopping will touch its peak due to globalization, privatization, competition, increased cost of labour.Regarding the teleshopping network and the product availability in teleshopping network, still more awareness canbe created among the people staying other than metropolitan cities. The future generations are highly aware aboutthe uses of the television, telephone and Internet, so the teleshopping will certainly prove to be fruitful in the handsof the future customers.

References• Davis, Robert, Buchanan – Oliver, Margo; “ Relationship marketing in electronic environments” Journal of Information

Technology, Dec.2014, vol.14 Issue 4, Pg.319-331.• Canadian Banker. “Teleshopping gains popularity amoung Canadians” 2007 first Quarter, vol 107 Issue Pg.5• David L.Loudan, S.J.Delia Bitta, “Consumer behavior” (2005), 6th edition, Tata McGraw Hill Publisher• Philip Kotler, “Marketing Management” 9th edition, Prentice Hall of India Publisher



A STUDY ON THE EMERGING TRENDS OF DIGITAL MARKETINGCONCEPTS AND ITS BENEFITS IN INDIA

Preeti Kumari 1 Saumyabrata Nath2

1. MMS – 2nd Year student , S.A.V. Acharya Institute of Management Studies, Mumbai.2. Professor, S.A.V. Acharya Institute of Management Studies, Mumbai

IntroductionCurrent era is the stage for digital marketing and socialnetworking. Digital Marketing is booming career optiontoday in India. The various striking features like cost-effectiveness, instant response, flexibility, convenience,effectiveness, it is making strong impact on Marketing,Sales and Advertising. Digital Marketing Industry is worth$68 billion. In the year 2015 advertising via mobile phonesand tablets rose 200 percent to $6 billion. This marketis estimated to touch $7.8 billion. This rise is leading forhigh demand for professionals skilled in Digital Marketing.On the other hand other industries are struggling with agrowth rate of 5 to 10%, digital media industry is boominghigh with 40% growth rate. But the most remarkablepoint is that this growth rate is not going to be stagnantin coming years. In simplistic terms, digital marketingis the promotion of products or brands via one or moreforms of electronic media. Digital marketing differs fromtraditional marketing in that it involves the use ofchannels and methods that enable an organization toanalyze marketing campaigns and understand what isworking and what isn’t – typically in real time. Digitalmarketing is also known as Internet marketing or OnlineMarketing, but their actual processes differ, as digitalmarketing is considered more targeted, measurable andinteractive. Digital media is so pervasive that consumershave access to information any time and any place theywant it. Gone are the days when the messages peoplegot about your products or services came from you andconsisted of only what you wanted them to know. Digitalmedia is an ever-growing source of entertainment, news,shopping and social interaction, and consumers are nowexposed not just to what your company says about yourbrand, but what the media, friends, relatives, peers, etc.,are saying as well. And they are more likely to believethem than you. People want brands they can trust,companies that know them, communications that arepersonalized and relevant, and offers tailored to theirneeds and preferences. Digital marketing and itsassociated channels are important – but not to theexclusion of all else. It’s not enough to just knowcustomers. Digital marketing helps the customers toknow them better. To do that, marketer need aconsolidated view of customer preferences and

expectations across all channels – Web, social media,mobile, direct mail, point of sale, etc. Marketers canuse this information to create and anticipate consistent,coordinated customer experiences that will movecustomers along in the buying cycle. The deeper theyinsight into customer behavior and preferences, the morelikely you are to engage them in lucrative interactions.

Literature ReviewMohan Nair (2011) takes social media as a complexmarriage of sociology and technology that cannot beunderestimated in its impact to an organizationmarketing communication, choice as to when toengage, how to manage and measure, and whetherto lead or to follow is complex but not an impossibletask. These cannot be answered simply by oneformula because the context and the market dynamicsare strong variables in these decisions. Even thoughthe interest for social media is huge, few companiesunderstand what the term ?social media can mean totheir businesses. But how much it has been givenimportance, as an IMC tool, varies from region toregion (PricewaterhouseCoopers (PwC), 2009; BuddeComm & Chiltern Magazine Services Ltd. (BCMSL),2009). According to research conducted by Nielsen,we know that 92% of consumers report that “word-of-mouth and recommendations from people know” arethe leading influence on their purchase behavior.Only 37% trust search engine ads, and just 24%trust online banner ads. They trust their friends andfamily the most when looking for brand recommenda-tions. But what types of recommendations carry the mostweight? Brands are eager to tap into the power ofrecommendations, and many companies measure an“NPS,” or Net Promoter Score, which illustrates howlikely someone is to recommend a specific brandor company. According to a U.K. study by Fred Reichheld, “a 7% increase in word-of-mouth advocacy unlocks1% additional company growth.” His research also showsthat “a 12% increase in brand advocacy, on average,generates a 2x increase in revenue growth rate plusboosts market share” and, conversely, “a 2% reductionin negative word-of-mouth boosts sales growth by 1%.”It is important to understand the relationship between



digital communication and traditional communicationin the old media; for example, TV, radio, newspapers,magazines and billboard ads, the communicationmodel was and is one-to-many compared to one-to-one or many-to-many communication model in digitalmedia like blogs, social networks, wikis and other socialmedia (Chaffey, 2003). The increased fragmentation ofmedia and customers, as well as the revolution inmass communication by the new communicationchannels – internet and mobile communicationtechnologies – has created the need for a newapproach to marketing communication that can ensurecentralized management and a consistency ofcommunication messages sent towards variousaudiences (McArthur and Griffin, 1997; Semenik, 2002;Smith, 2002). Foux (2006) suggests Social mediais perceived by customers as a more trustworthysource of information regarding products and servicesthan communication generated by organizationstransmitted via the traditional elements of the promotionmix. Johnson and Greco (2003) explain that desiresand different hopes from different clients can sometimerequire certain unique information and contactstrategies. Communication channels and strategies nowdiffer broadly from the ones in former times or offlinetimes. Online marketing is today seen by manypractitioners as the new arena for market communicationand on top of the list of users of the differentmediums is Facebook, Blogs, Twitter, YouTube andLinkedIn (Steltzner, 2009). Kaplan and Haenlein (2010)define social media as ? a group of Internet-basedapplications that build on the ideological andtechnological foundations of Web 2.0, which facilitatesthe creation and exchange of user-generated content.It consists of different Internet applications such asblogs, social networking sites, content communities,collaborative projects, virtual game worlds and socialworlds. Russell S. Winer (2009) affirms that manycompanies today are using some or all of the newmedia to develop targeted campaigns that reachspecific segments and engage their customers to amuch greater extent than traditional media. Mangold& Faulds (2009) argue that marketing managersshould comprise social media in the communicationmix when developing and executing their IntegratedMarketing Communication strategies and they presentedthe social media as a new hybrid element of promotionmix. Even as organizations realize the need to engagecustomers at as many touch points as possible, thereis still a need to stay ahead of the rapidly shiftingmarketing and communication landscape by integratingsocial media into traditional strategies to reach out toB2B and B2C audiences. Online opportunities and theirfuture impact on traditional marketing are as expensiveas your imagination can provide. (Pownall, 2011). The

role of exigencies in marketing : a rhetorical analysisof Three online social networks, thesis presented tothe graduate school of Clemson university, By GregBrian Martin, May 2007, pg no. 99. Traditional marketingefforts have focused on determining exactly what channelto advertise through, in order to properly segment thepotential audience, but users of online social networkshave often times segmented themselves. Users of Joga,for instance, are soccer fans, users of the Communitiesare interested in Adobe, and users of MySpacehave the option to supply whatever informationabout themselves that they wish. Marketers can spendmore effort focusing on the messages that they will use,and less time on proper audience segmentation. In 1994,spending for internet marketing totaled nearly nothing,but increased to over $300 million in 1995. Now, littlemore than a decade later, marketing spending andinternet marketing business has exploded to nearly $200billion. Quiroga & Kamila (2010) in their researchMarketing and Facebook, describe how fashioncompanies promote themselves on social mediaplatforms such as Facebook. This study took 34Swedish companies into consideration.

Objective of the study• To identify the various reasons for the growth of Digital

Marketing in India.• To know the various benefits of Digital marketing for

customers & Marketers.• To identify the various Digital Marketing methods in

India.

Research MethodologyThe study is mainly based on the observation methodand the available secondary data. The aim was toanalyze the current trends of Digital Marketing and itsbenefits in India. The secondary data was collected fromvarious Publications in Books, companies’ catalogues,Magazines, Journals, E-Journals, Periodicals businessreviews.

Digital Marketing & its BenefitsDigital Marketing provides various benefits to bothconsumers and also the marketers by way of marketingmore efficiently and effectively along with greater savings.It brings with it many benefits that are not available withtraditional and offline marketing. Digital Marketing is abooming industry. Companies have to work with theanalytical part of a website. They need to implementthe latest SEO,PPC and CRO strategy according to theneed of the project. There is also direct client handlingand reporting scenario which makes it more dynamic.This will open a new door for Digital Marketers to notonly run display ads online, but also offline which the



consumers will be able to interact with using their mobilephones. Digital is the communication technology usedto market a message. It includes computers, smartphones, cell phones, tables, game consoles. And it usedplatforms like websites, emails, apps, and socialnetworks. The ultimate goal of marketing is tocommunicate the value of a product or service to peopleto such a level that the people want to purchase theproduct or service – or at least, are interested in learningmore about product or service. The basics of marketingwill never change because it involves telling the story ofa brand of people. Culture, society, gender,demographics are all environmental and should be a vitalpart of all marketing efforts- but still boils down to gettinga message in front of people. The message must appearwhere the target market/ideal customer is alreadylooking.

Digital Marketing and its scope in IndiaFrom buying clothes from myntra.com to buying otherhouseholds from amazon.co.in or flipkart.com or it besnapdeal.com,ebay.com are these online purchases aregrowing in faster rate. Apart from one of drastic changewas seen through bigbasket.com, which has made theIndian house to buy groceries also only. Hence all theseprove the great growth of Digital marketing in India.

The major shifts in Digital Marketing Scopes are• From Anonymity to identity: Now people are on web

with full identity, this is enabling business to interactwith more data, better targeting.

• From information to entertainment: Digital marketinghas touched all the aspect of current day customer.

• Rankings ->Traffic -> Conversions -> Revenue

Various marketing methods covered under digitalmarketing are :••••• SEO : Search Engine Optimization is an organic

(unpaid) method of improving the ranking of web pagesand their visibility on various search engines such asGoogle ,Yahoo, Bing, etc. optimizing web pages is avery vital aspect of Digital Marketing.

• SEM : Another method of increasing the visibility ofweb pages is through sponsored placements andadvertising.SEM specialists should know how to runPPC campaigns, how to purchase traffic through paidsearch listing to maximize visibility of web pages onsearch engines.

• SMM : Social Media Marketing is gaining a lot ofpopularity with social media sites like Facebook,Twitter, Linkedin , Pinterest and others .A good digitalmarketer should know how to harness the strengthof social media to market the brand image of thecompany.

• Email Marketing : As it is important to engagecustomers and leads with brand, many organizationssend periodic newsletters, email campaigns,autoresponders to its subscribers in order to keepthem updated with new products/services added oranything worth sharing.

• Mobile Marketing : More and more people are goingmobile. Smart phones have become very trendyamong all age groups. Mobile marketing providesinstant updates, promo offers and information ofcustomers’ interests. A person needs to be a mobilefreak to get into mobile marketing.

• Web Analytics : Web Analytics is a very interestingaspect of Digital marketing which involves trafficanalysis, business and market research andenhancing the website traffic. For instance, GoogleAnalytics gives a great insight into how website isworking.

Market Scenario of Digital MarketingThe world of marketing has been seen a great revolutionin past few years whether it is advertising, promotion orsales. Even those who were unsure of the potential ofdigital marketing in the last decade have now dividedinto this ocean of opportunities offered by the internet.Unlike, television marketing where target audiences werereached only during the prime time, digital marketingallows to connect with customer almost anytime andthe entire credit goes to the internet and mobile devices.The way people are getting smart phones and tabletsfor anything and everything, it is apparent that demandfor digital marketers will only increase in the coming time.

Scope of Digital Marketing in IndiaDigital marketing is still at its initial phase is in India.Most of the companies are still thinking to adopt themedium while many top brands have already rolled theirdigital marketing campaign. More than 40% of totalpopulation of India, around 460 millions youth is there,inwhich 333 millions are literate and the rising technologyare interacting with digital marketing techniques. Thusthere will be a Big change in coming future.There is ahuge scope for digital marketing in India. Internet andsmart phone penetration in India is still at a nascentstage, which gives it a huge to turf to play on, goingahead. With the new government's focus on building adigital ecosystem to drive growth, India’s IT industry isexpecting several tax rebates to boost domesticmanufacturing and incentives for SMEs to promote R&D.Some of the major effects of Digital marketing are inIndia market are:Digital marketing is the fastest growing industry today• Provides various career opportunities for marketing

professionals



• Helps to manage and uplift the business and thelaunch

• Cost effective and easy to measure the ROI• Helps to build greater brand development by targeting

large audience

Benefits to Customers••••• Convenience : Customers can shop 24 hours a day

from anywhere without going to store physically.• Interactive and Immediate: Consumers can

interact with the seller’s site to find the information,products, or services they desire, then order ordownload them on the spot

• Customers Stay Updated : The internet keepscustomers updated through websites, emails, onlineadverts and social networking sites. Many customerscan access the internet on the move through portabledevices such as smart phones and tablets.Manufacturers and retailers can instantly update theircustomers through the internet.

• Customers Can Compare Online : One of thegreatest advantages for the customer is that theycan compare products or services they wish topurchase from the comfort of their own homes. Insteadof having to visit a number of different retail outlets,the user simply has to open different internet windowtabs to compare prices or features of the product/service they wish to purchase. Many retailingwebsites offer the facility where different products theysell can now be easily compared. There is also pricecomparison websites that customers can use to getthe best possible price for their products.

• Clear Product Information for the Customer :Websites offer clear and consistent productinformation to all internet users. There is little chanceof misinterpretation or mishearing what the salesperson said as in a retail store. The internet hascomprehensive product information whereas in a shopthe customer is reliant in the knowledge of their salesadvisor.

• Transparent Pricing : Pricing: online is very clearand transparent for the customer; customers canaccess pricing information from a range of sellerswith a few internet clicks. Customers can takeadvantages of pricing that may change regularly ortake advantages of special offers that last for a limitedperiod as they can access pricing information 24 hoursa day/7 days a week. Whereas prices for productsoffered for sale in retail premises can only be accessedwhilst the store (or store telephone lines are) open.

• Track Purchase and Choose Delivery Dates: Manywebsites allow consumers to track their purchasefrom when it is ordered through to when they are

dispatched and delivered to them. This reassures theconsumer and makes them feel that they are obtaininga good service online. Some sellers also allow theconsumer to choose the delivery address for eachpurchase and select their own delivery date and time.

••••• Reduction in Personal Carbon Footprint : Lookingafter the environment and the world we live in isimportant for many customers. When consumersshop online they use their cars less and their personalcarbon footprint is reduced. Retailers can supportcarbon reduction by sorting deliveries so thatpurchases by customers living close to each othercan be delivered on the same day. Also, digitalproducts such as e-books, digital reports and onlinetraining programmes are downloadable or deliveredonline on real time eliminating the need of a physicaldelivery system. This saves a lot of time and resources.

Benefits to Marketers• Customer Relationship Building : Companies can

interact with customers to learn more about theirneeds and to build customer databases.

• Reduce Costs and Increase Efficiency: It avoidsthe expense of maintaining a physical store, costsof rent, insurance, and utilities. Digital cataloguescost less to produce than printing and mailing papercatalogues.

• Greater Flexibility-Make changes on the fly:Unlike offline marketing such as placing traditionaladvertisements in magazines, newspapers,television, or a paper catalogues whose products andprices are fixed until the next printing, an onlinecatalogue can be adjusted daily or even hourly,adapting product availability, prices, and promotionsto match changing market conditions by changing agraphic or wording and do it without any problems.

••••• Access to Global Markets : The Internet is a globalmedium, which allows buyers and sellers to clickfrom one country to another in seconds.

• Track Real-Time Results : It allows tracking real-time results using online analytics to determine howmarketing campaign is performing. There are waysto track traditional marketing efforts, but most thetime it cannot be done in real-time.

• Target Specific Demographics in Advertising: Itallows in targeting specific demographics such asgender, age, location, specific income levels,education levels and occupation.

• Variety of Methods: There are various methods inonline marketing such as audio, video, blogging,email, social media and on-going newsletters.

• Instant Conversion Ability: Through onlinemarketing marketers can get the ability to convert a



customer instantaneously. This is not the case whenevaluating marketing options in traditional media suchas magazine ads, newspapers or television. Throughonline marketing not only potential customer’sinformation can be captured, but also capture a saleinstantaneously by a few clicks of a mouse, when itcomes to offline marketing it takes more time toconvert a customer into a sale not to mention theperson power it often requires.

Analysis & InterpretationMarket Size and growth of Online Marketing in IndiaIndia has an internet user base of about 375 million (30%of population) as of Q2 of 2015. Despite being the secondlargest user base in world, only behind China (650million, 48% of population), the penetration of e-commerce is low compared to markets like the UnitedStates (266 M, 84%), or France (54 M, 81%), but isgrowing at an unprecedented rate, adding around 6million new entrants every month. In India, cash ondelivery is the most preferred payment method,accumulating 75% of the e-retail activities. Demand forinternational consumer products is growing much fasterthan in-country supply from authorised distributors ande-commerce offerings. As of Q1 2015, six Indian e-commerce companies have managed to achieve billion-dollar valuations namely, Flipkart, Snapdeal, InMobi,Quikr, OlaCabs and Paytm.India's e-commerce marketwas worth about $3.8 billion in 2009, it went up to $12.6billion in 2013. In 2013, the e-retail segment was worthUS$2.3 billion. About 70% of India's e-commerce marketis travel related. According to Google India, there were35 million online shoppers in India in 2014 Q1 and isexpected to cross 100 million mark by end of year 2016.Electronics and Apparel are the biggest categories interms of sales.

Key drivers in Indian e-commerce are :• Large percentage of population subscribed to

broadband Internet, burgeoning 3G internet users,and a recent introduction of 4G across the country.

• Explosive growth of Smartphone users, soon to beworld's second largest smartphone userbase. Risingstandards of living as result of fast decline in povertyrate.

• Availability of much wider product range comparedto what is available at brick and mortar retailers.

• Competitive prices compared to brick and mortar retaildriven by disintermediation and reduced inventory andreal estate costs.

• Increased usage of online classified sites, with moreconsumer buying and selling second-hand goods

• Evolution of Million-Dollar start-ups like Jabong.com,Saavn, MakeMyTrip, BookMyShow, Zomato Etc.

India's retail market is estimated at $470 billion in 2011and is expected to grow to $675 Billion by 2016 and$850 Billion by 2020.According to Forrester, the e-commerce market in India is set to grow the fastestwithin the Asia-Pacific Region at a CAGR of over 57% in2012-16.As per "India Goes Digital”, a report by AvendusCapital, a leading Indian Investment Bank specializingin digital media and technology sector, the Indian e-commerce market is estimated at Rs 28,500 Crore ($6.3billion) for the year 2011. Online travel constitutes asizable portion (87%) of this market today. Online travelmarket in India is expected to grow at a rate of 22% overthe next 4 years and reach Rs 54,800 Crore ($12.2 billion)in size by 2015. Indian e-tailing industry is estimated atRs 3,600 crore (US$800 million) in 2011 and estimatedto grow to Rs 53,000 Crore ($11.8 billion) in 2015.

Overall e-commerce market is expected to reach Rs 1,07,800crores (US$24 billion) by the year 2015 with bothonline travel and e-tailing contributing equally. Anotherbig segment in e-commerce is mobile/DTH recharge withnearly 1 million transactions daily by operator websites.

There are nine pillars of Digital India Programme.1. Broadband Highways2. Universal Access to Mobile Connectivity3. Public Internet Access Programme4. e-Governance – Reforming Government through

Technology5. e-Kranti - Electronic delivery of services6. Information for All7. Electronics Manufacturing8. IT for Jobs9. Early Harvest Programs

Conclusion :In the digital marketplace, content and its presentationare the most important factors that decide the fate ofany online business. Easily accessibility and qualitycontent can catapult the website within the top rankings.By creating and implementing a balanced marketingstrategy, using both short-term and long-term strategies,one can drive a steady stream of targeted traffic to theirweb site. This simple strategy of any business canguarantee the success of online marketing. Companieswould however have to be on the lookout for changingtrends in the marketplace and use it to their advantage.Forexample, marketing through Facebook is a conceptwhich is highly used nowadays especially by onlineshopping and airline bookings.



References :1. Philip Kotler & Kevin Lane Keller, Marketing

Management, New Delhi, Pearson Education, 2006.2. Warren J. Keeyan, Global Marketing Management,

USA, Prentice- Hall of India Pvt. Ltd., 2002, pg. no.33.

3. Belch, G. E. and Belch, M. A., 2004.Advertising andPromotion–An Integrated Marketing CommunicationsPerspective. 6th ed. New York: Tata McGraw-Hill.

4. Abed Abedniya, Sahar Sabbaghi Mahmouei, TheImpact of Social Networking Websites to Facilitatethe Effectiveness of Viral Marketing, December 2010,International Journal of Advanced Computer Scienceand Applications, Vol. 1, No.6

5. Andrea C. Wojnicki, Word-of-Mouth and Word-of-Web: Talking About Products, Talking About Me,2006, Advances in Consumer Research, Volume 33.

6. Chaffey, D., Ellis-Chadwick, Johnston, K.F. andMayer, R., 2003. Internet Marketing: Strategy,Implementation and Practice. 2nd ed. Edinburgh:Pearson Education.

7. Chittenden, L & Rettie, R., 2003. An evaluation of e-mail marketing and factors affecting response.Journal of Targeting, Measurement and Analysis forMarketing, Volume 11.

8. Durkin, M. and Lawlo, 2001. The implications of theinternet on the advertising agency - clientrelationship. The Services Industries Journal, pg. no.90-175.

9. Diamond, S. 2008, “Web Marketing for SmallBusinesses: 7 Steps to Explosive Business Growth”,Sourcebooks Inc., Illinois.

10. Smith, P.R. and Chaffey, D. 2005, E-marketingExcellence: at the Heart of E-business. Secondedition, Butterworth-Heinemann.

11. Barnes, N., & Mattson, E., (2008), Social media inthe Inc. 500: The first longitudinal study [Electronicversion]. University of Massachusetts DartmouthCenter for Marketing Research.

12. Kerr, G., Schultz, D., Patti, C. & Kim, I., 2008. AnInside-Out Approach to Integrated MarketingCommunication: An international analysis.International Journal of Advertising. [Online], 27(4),pg. no. 511–548.

13. www.wikipedia.com14. www.techopedia.com15. www.webopedia.com



Fig. 2

Fig. 1

Audience perception

Brand Identity

Sum total of all characteristics of a brand

BRANDING

Divyansh Bhati.J1 Diksha.D.Bhosale2

1. II - B.COM CM, Sri Krishna College of Arts and Science, Coimbatore2. II - B.COM CM, Sri Krishna College of Arts and Science, Coimbatore

What is a Branding ?Very basically, a branding is a proprietary name for aproduct, service, or group. (In this book, the term “group”is used to denote a company, organization, corporation,social cause, issue, or political group. For the sake ofbrevity, all branded entities-whether a product, service,or group that has benefited from any type of branding-will be referred to as a brand.) On a more multifacetedlevel, a brand is the sum total of all functional andemotional assets of the product, service, or group thatdifferentiate it among the competition.

The three integrated meanings of branding.

The term branding could be thought of as havingthree integrated meanings :• The sum total of all characteristics of the product,

service, or group, including its physical features, itsemotional assets, and its cultural and emotionalassociations;

• The brand identity as applied to a single product orservice, an extended family of products or services,or a group; and

• The ongoing perception by the audience (consumeror public) of the brand.

• Let’s break down these three integrated meanings ofa brand.

All Characteristics of the BrandingEach product, service, or group has functionalities,features, or capabilities, which may or may not be uniqueto the product or service category. Also, each product,service, or group-due to its heritage, parent company,logo, visual identity, advertising, and audienceperception-carries or assumes emotional assets.

Emotional (as well as cultural) associations arise inresponse to the spirit of the brand identity, the emotionalcontent or spirit of the advertising, and thecommunitiesand celebrities who adopt the brand or support the groupas part of their lives. Hence, a brand is the sum total ofall functional and emotional assets that differentiate it amongthe competition and distinguish it in the audience’s mind.

The Brand Identity The brand identity is the visual and verbal articulation ofa brand, including all pertinent design applications, suchas logo, business card, letterhead, or packaging. It alsousually includes a tagline and web site. Brand identitycan also be called corporate identity or visual identity. Abrand identity is a program that integrates every visualand verbal element of a company’s graphic design,including typography, color, imagery, and its applicationto print, digital media, environmental graphics, and anyother conventional or unconventional media. It is a masterplan that coordinates every aspect of graphic designmaterial in order to attain and sustain an identifiableimage and status in a multinational marketplace of brands.

Every hugely successful brand has maintained a loyalindividual base due, in large part, to its clearly definedbrand identity and the brand experiences it builds.Through a very carefully planned strategic brand identitythat is memorable, consistent, distinctive, companiessuch as

The Coca-Cola Company , Sony, The Walt DisneyCompany, 3M, Honda, and FedEx have been able tomaintain consumer loyalty and positive consumerperception. A consistent brand identity presents amemorable public face, such as the identity for UnitedAirlines SM



A brand identity usually consists of the following integratedcomponents :• Brand name• Packaging• Logo• Letterhead• Business card• Web sites• Any other application pertinent to a particular brand.

The brand identity is applied to a single product, service,or group carrying the name brand. Brand extension isapplied to a new product, service, or group with a differentbenefit or feature that is related to the existing brand(and extends the range of the existing brand); the targetaudience may be different.

What is a Brand Experience?When brands were first introduced, it was the brandname, brand promise, and logo and packaging thatestablished the brand identity. Now, branding has grownto include the entire development process of creating abrand, brand name, brand identity, and, in some cases,brand advertising. A brand experience is an individualaudience member’s experience as he or she interactswith a brand-every time he or she interacts with thatbrand. Every interaction a person has with a brandcontributes to his or her overall perception of the brand.It is either a positive, negative, or neutral experience. Ina consumer society, where we all come into contactwith advertising (in print, on radio and television, andonline), with visual identity applications (such as logos,packaging design, and corporate communications), andwith branded environments (in stores, malls, zoos,museums, and in public spaces), each visualcommunication application builds our perception of abrand and is an individual experience that contributes tothe overall brand experience. A program ofcomprehensive, consonant, strategic, unified, integrated,and imaginative solutions for a brand, including everygraphic design and advertising application for that brand,results in consonant brand experiences for the audience.Focus must be on how individuals experience the brand(of the product, service, or group) as each interacts withit. It entails understanding how to weave a common threador voice-seeming like one voice, across all of anindividual’s experiences with that brand-to integrate thecommon language into all experiences with the brand.It includes brand harmonization-the coordination orharmonization of all the elements of a brand identitythroughout all experiences. Designing integrated brandexperiences entails coordinating the entire brandingprogram, from logo to advertising, with the consideration

that each and every application is an experience for aconsumer or individual; for example, the comprehensivebrand experience including logo, advertising, web site,brochures, and promotional applications .Eachexperience an individual has with a brand impacts howthat individual perceives the brand and its parentcompany. The main goal of the brand experience is togain an individual’s interest and trust in and loyalty tothe brand.

What are the Types of Branding?Visual communication professionals solve different typesof branding problems. These problems can be sortedinto types: consumer, corporate, digital, organizations,cause-related marketing, global branding, and brandedenvironments.• Consumer : Brand applications aimed directly at

consumers. Consumer product and service categoriesinclude household goods, home electronics,

Fig. 3



automobiles, automotive services, computer hardwareand software, food and beverages, beer, wine andspirits, apparel, beauty aids and services, healthproducts and services, over-the counter andprescription medications, pet products, and sportsteam products, among many others. With any trip toa supermarket, one can realize just how glutted themarket is with competing brands. If a product doesn’thave a relevant and strong brand experience (asshown in Figure), it is almost sure to be lost to theconsumer.Mass market packaging Product: a newVirginSM personal electronics brand called VirginPulse™. Design firm: Design Guys, Minneapolis,MN. Client : Virgin. In this competitive market niche,surprisingly no one has been making a consistentbrand statement. We wanted to do that, first andforemost. Next, we wanted packaging to speak verydirectly to the consumer in plain talk as much aspossible. Personal electronics typically are sold bythe technology and esoteric features. Even productnames are in code. We wanted the technology to beassumed by the high quality and care of thepresentation and speak directly about the attributesof the products themselves. Just as we wanted tochange the conversation away from tech terminology,we flipped the script on the packaging. The standardfor mass electronics packaging is a plastic clamshellwith a printed card sealed inside. While this type ofpackage is protective and functional, it looks cheap.Our clams have an outer paper wrap. This affordsextra branding space and allows the opportunity tocreate multiple gloss and dull textures, as opposedto the shiny plastic clamshell. In addition, wedesigned the Virgin Pulse packaging strategy toharmonize with the form factors of the productsthemselves, creating a continuity of brand. Thelanguage that is used on the packaging is thebeginning of a conversation that continues throughthe quick start instructions, manual, and style guideand is written in a distinctive, personal, and wittyvoice throughout. All the internal paper enclosuresare carefully concealed by being wrapped in a whitefolder that hides them from view and presents themin the correct sequence. Icons give visual cues tothe features and benefits to simplify and clarify eachpoint. (Fig. 4)

Fig. 4

• Corporate : Branding created for corporations orcorporate groups, rather than for products andservices. Brand identities and experiences arecreated for new companies, company mergers, andcompanies that go through name changes or wantto be revitalized. When companies or nonprofit groups(organizations, issues, and causes) merge, often theold visual identities of both entities are discarded in

favor of a new one to reflect the merger. To stay relevantin the marketplace, corporations revitalize or redefinetheir identities. Certainly, the identity must beappropriate for the new entity, convey the brand spirit,and differentiate it; for example, Sibley PeteetDesign’s “straightforward and conservative logotype”for the 401(k) Company .

Identity : The 401(k) Company. Design studio: SibleyPeteet Design, Austin, TX. Art director: Rex Peteet.Designers: Rex Peteet, Carrie Eko, and KristianneKossler. Illustrators: Rex Peteet and Wilson McClain.The 401(k) Company is a full-service retirement plan



company- hence its name. We created acomprehensive identity for them, beginning with astraightforward and conservative logotype. Weextended the ID into a corporate paper system andmodular presentation pieces that introduced the firstin a series of character icons (e.g., Sower, Mariner),underscoring “self-reliance” - a message that is ofutmost importance to the CEO. Other applicationsinclude their “Request For Proposal” binder andmonarch stationery system. We extended the brandlook into a comprehensive collateral system and tradeadvertising campaign, as well as a “self-reliant”positioning that has successfully served them for overfive years.

• Digital : Digital branding utilizes digital media- thatis, on-screen-to form, launch, and strengthenrelationships between a brand and the users. It isweb-based and also can include any digital oronscreen format for CD-ROMs, kiosks and otherelectronic exhibit systems, interactive posters,intranets, extranets, rich-media banners, andsoftware interfaces for mobile devices and networkedappliances. Almost every major brand employs websites, either corporate, brochure-ware, and/orspecialty web sites.Digital branding should be inharmony with all other brand applications; forexample, the branding for Enlace by IdeogramaBranding.

Design firm: Ideograma, Mexico. Client: Enlace.Digital branding is crucial, and web sites serve avariety of functions for different clients; however, all

Fig. 5

functions must be consonant with all other brandapplications, in terms of voice, graphics, tone, andbrand personality. Ideograma ensured integratedcommunications in all the applications-logo,corporate folder, web page, and reception areaenvironmental graphic-for Enlace.

• Organizations : Branding and advertising fororganizations, both national and international, caninclude medical research, humanitarian, social orenvironmental issues, political, and nonprofitorganizations-anything that is in the public interest;for example, the identity for “Move Our MoneySM

• Cause-related marketing and advertising: Funding fornonprofit organizations can be sponsored by brandsand corporations; for example, Ford Motor Companyraising funds for breast cancer research through thesale of Lilly Pulitzer® silk scarves.

• Global : Branding can also be designed for aninternational audience. A monolithic brand strategyis one that presents the brand the same way in allmarkets. A diversified (or customized) brand strategyadjusts and tailors the brand experience for culturaldifferences among its various global target audiences.

• Branded environment: A branded environment is avisual identity that is formulated, tailored, constructed,and applied to a three-dimensional physical spacefor a variety of environments and for a variety ofpurposes, including educating, entertaining,endearing, inspiring, or promoting. Applicationsinclude retail design, sign and way finding systems.

Who Creates Brand Experiences?Sometimes one design firm creates the whole brandexperience; just as often, different firms create differentparts of the brand experience. A branding firm might setthe brand strategy. A design firm might design the identity.A packaging firm might design the packaging. An adagency might design the advertising, and an interactivefirm might design the digital applications. Sometimesthere is a lead firm that sets the strategy, and controlsand shepherds the brand applications. (The lead firm isalso called the firm or agency of record.) At other times,there is no lead firm, and the client’s team is in chargeof ensuring brand consonance across all applications.

The fact that there are many visual communicationprofessionals who are qualified to create brandapplications is part of what confuses everyone, fromstudents to marketing executives. Creative professionalsare needed to design successful brand experiences. Inthe mix of visual communication businesses, there areindividual graphic designers, art directors, graphic designstudios (small, medium, and large sized), branding firms,communications firms, interactive studios, marketing



firms, and advertising agencies. Some of theseprofessionals are capable of creating every possiblevisual communication application; some are not.

Branding is a focused business for graphic design studiosor companies that specialize in various creativefunctions-brand strategy, branding programs or brandidentity systems, and brand experience design-and foradvertising agencies who are able to perform the samefunction of the graphic design specialists in addition tocreating advertising. Most graphic design studios havethe ability to design brand applications, and some providebrand consulting, as well as creative services. Manyadvertising agencies have special branding units orgroups.

Brand identities are designed by creative’s-graphicdesigners, interactive designers, design directors, artdirectors, writers, creative directors-who work in brandingdesign firms, advertising agencies, interactive studios,or graphic design studios in conjunction with the brandcompany’s marketing professionals.

The Brand TeamThe brand company’s marketing directors can contributeenormously to the creative process; successfulmarketing directors have vision and insight and realizethe importance of creative professionals to their mission.Many advertising agency heads create integratedideation teams that include a brand’s marketingexecutives. There are other ways that agencies anddesign studios form unconventional creative teams..Therefore, you may see the unconventional collection ofdesigner(s), art director, copywriter, media expert,strategic expert, and, perhaps, the client comprisingwhat is often called a brand team.

Certainly, it is in the best interest of the brand to have aconsistent voice across all applications, to createconsonance. A brand is a huge company asset—it hasvalue and means profits. In order to maintain its brand,a company should have a brand asset management teamor hire a branding specialist to :• Shepherd the brand• Make a company commitment (dedicated funds,

research, development, creative work) to the brand• Foster brand harmonization• Deliver on the brand promise and provide the value

indicated by the brand experience• Coordinate marketing initiatives and create a focused

effort• Focus on distinction

• Ensure relevance• Monitor the brand in private (as it is produced or

manufactured)• Monitor the brand in public (how it is expressed in a

brand identity, advertised, and perceived by the public)• Earn standing in the marketplace or in the audience

mind• Utilize sustainable design (eco-conscious design)A company or group, or the firm it hires, is responsiblefor brand stewardship—for shepherding the brand, forbrand management. Brand stewards must be responsiveto market trends, economic climates, public opinion,and every slight change in consumer behavior, and beable to anticipate trends, and reinvent or revitalize a brandaccordingly.

What are the advantages and disadvantages ofbranding?Advantages :• Gives identity to the product• Makes it distinguishable from the other products.• Creates customer loyalty.• Creates and maintains organization goodwill.

Disadvantages :• High investment required.• May create negative image, if the brand fails in the

market.• Unwillingness on part of the customers to pay extra

amount for branded goods.

Advantages to Producers• Brand name helps in advertising in an easier way.• Brand name establishes the permanent identity of

the product.• Brand name promotes repurchasing.• Competition becomes easier with the help of brand

loyalty.

Advantages to Consumers• Shopping consumes lesser time as branded products

can be easily identified.• The quality of branded product undoubtedly is better.• Prices of branded products are fixed by the

companies themselves and there are no frequentchanges.

• The branded products own the responsibility for itsusefulness.



CUSTOMER RELATIONSHIP MANAGEMENT

Anila Das.H1 Mercy Priscilla.J2

Abstract( “Successful CRM is about competing in the relationship dimension. Not as an alternative to having a competitiveproduct or reasonable price, but as a differentiator. If your competitors are doing the same thing as you are (as theygenerally are), product and price won’t give you a long-term, sustainable competitive advantage. But if you can get anedge based on how customers feel about your company, it’s a much stickier–sustainable–relationship over the longhaul.”

– Bob Thompson, CustomerThink Corporation

1. II - B.COM IT, Sri Krishna College of Arts and Science, Coimbatore2. II - B.COM IT, Sri Krishna College of Arts and Science, Coimbatore

IntroductionBusiness people started using the term Customer Relationship Management (CRM) since the early 1990s whenthe concept of business started to change from being transactional to relational. CRM directly contributes towardscustomer benefits and the growth of businesses.

Information Technology plays a very critical role in identifying, acquiring, and retaining the customers, and therebymanaging a healthy relationship with them.

The primary goal of CRM is to increase customer loyalty and in turn improve business profitability.

What is CRM ?There can be multiple definitions of CRM from different perspectives:• From the viewpoint of the Management, CRM can be defined as an organized approach of developing, managing,

and maintaining a profitable relationship with customers.• By equating the term with technology, the IT organizations define CRM as a software that assists marketing,

merchandising, selling, and smooth service operations of a business.• As per FranicsButtle, World’s first professor of CRM, it is the core business strategy that integrates internal

processes and functions, and external networks, to create and deliver value to a target customer at profit. It isgrounded on high quality customer data and information technology.

Ingredients of CRM

Fig. 1

CustomerCare

CustomerCare

Analytics

CRMSystem

WorkflowAutomation

MarketingSales ForceAutomation

LeadManagement

HRManagement



Objectives of CRMImprove Customer Satisfaction – CRM helps in customersatisfaction as the satisfied customers remain loyal tothe business and spread good word-of-mouth. This canbe accomplished by fostering customer engagement viasocial networking sites, surveys, interactive blogs, andvarious mobile platforms.

Expand the Customer Base – CRM not only managesthe existing customers but also creates knowledge forprospective customers who are yet to convert. It helpscreating and managing a huge customer base thatfosters profits continuity, even for a seasonal business.

Enhance Business Sales – CRM methods can be usedto close more deals, increase sales, improve forecastaccuracy, and suggestion selling. CRM helps to createnew sales opportunities and thus helps in increasingbusiness revenue.

Improve Workforce Productivity – A CRM system cancreate organized manners of working for sales and salesmanagement staff of a business. The sales staff canview customer’s contact information, follow up via emailor social media, manage tasks, and track thesalesperson’s performance. The salespersons canaddress the customer inquiries speedily and resolve theirproblems.

Types of CRMIn the past twenty years, the focus of global marketshas shifted from sellers to customers. Today, customersare more powerful than sellers, if we consider the drivingfactors of market. We have different types of CRMaccording to the changes in customer portfolios, speedof business operations, requirement of handling largedata, and the need of sharing information, resources,and efforts jointly.

CRM systems are divided based on their prominentcharacteristics. There are four basic types of CRMsystems:• Strategic CRM• Operational CRM• Analytical CRM• Collaborative CRM

Customer Management StrategiesThere are seven core customer management strategies:Start a relationship – When a customer is identified ashaving a high potential to bring profits, start a relationship.Protect the relationship – When the customer issignificant for the business and when there is a possibility

of the competitor’s attraction, then the managers needto protect the relationship.Relationship re-engineering – This is necessary whenthe managers find that the customer is not profitable asdesired at the current stage. In such a case, serve thecustomer by low-cost automated channels.

Enhance the relationship – The managers identify up-selling and cross-selling opportunities and try to boostthe customer on the scale of value.

Why a Business Wants Relationship with itsCustomers?Every business regards its customers as a lifetimestream of revenue; losing a single customer can costthe business very high. Lifetime Value (LTV) for acustomer is considered to analyze the effectiveness ofa particular marketing channel.

For example, if the Churn Rate of a business X is 5%and that of business Y is 10%, then in the long-term,business X would have a larger customer base thanbusiness Y, which places business X at the position ofcompetitive advantage and directly influences profit ofboth the businesses.

A business can generate greater sales volume and inturn greater revenue if it knows its customers well andhave good relationship with them. Thus, solely for theeconomic purpose, every business wants to have healthyrelationships with their customers.

The New CustomersThe customers can be new from two perspectives:Customer New to the Business Organization – Theyare the customers who are likely to divert from thecompetitor to a business if a business offers variety inproduct or service or better deal. These customers canbe very expensive to acquire if they are loyal to theirexisting supplier.

Customer New to the Product or Service – Theseare the customers who find new solution for their new orexisting needs. In such case, they can avail a differentproduct altogether. For example, a parent buys diapersfor their baby irrespective of the baby’s gender. But whentheir baby grows into a toddler, they buy either doll or atoy car, depending upon the toddler’s gender.

The customers also goes for another product of the sameproduct category. For example, on increasing family’sstrength, the customers prefers to go for bigger car.

Strategies for Customer RetentionAs the existing customers drive current businessprofitability, retaining them is vital for any business.



Customer retention is the process of maintainingcontinuous trading relationship in long term. It can beachieved by the following strategies:

Negative StrategiesThe clauses of penalty, switching costs, and high exitcosts make the customers feel trapped with thebusiness. If the business enforces such strategies, itrisks the reputation by customers’ negative word-of-mouth.

Positive StrategiesThey help increasing customer delight by understandingcustomer requirements, meeting them, and providinglittle more beyond their expectation. Customers aredelighted to do business with you when their perceptionis more than their expectation.D = P > EWhere, P = Perception, E = Expectation1. Adding perceived value, ideally without increasing

product or service prices.2. Conducting loyalty schemes by rewarding the high

spending customers.3. Organizing sales promotion where a business offers

discounts on future purchases, cash back onspending above a specific amount, gifts, scratchcoupons, etc.

Which Customers a Business Should Retain?The cost of retaining highly committed customers is lesserthan one required for retaining non-committed significantcustomers. The recently acquired customers are likelyto deflect when a business fails to provide good serviceor product.

A business should retain the following customers:• The ones satisfied with the product or service.• The ones who can suggest product innovation.• The ones who are value to the business and are

capable of contributing to business profit.

Service AutomationService automation is the process that works as asupporting system for the service staff and managers toachieve their work related objectives. Infrastructure, Data,Devices, and Software are the key components of serviceautomation.

There are five major domains of service automation:Contact centers: They are the main basis of customerrelationship. They address customer queries via Email,

telephone, instant messaging, SMS, or fax. They havedatabases, Automatic Call Diversion (ACD) system, andvoice recording system. The staff responds to Emailsand chats with customers regarding problem andsolution.

Call centers : They are a part of contact centers whichmajorly handle inbound and outbound calls. Theyperform typically more generic duties, deal with peopleand calls which are outside the business, and at timescan make outgoing calls. The staff needs to have excellentpatience, and reading and listening skills.

Help desks : They are internal to the business. Theyare oriented towards supporting the business staff.Helpdesks generally provides diagnostic andtroubleshooting help.

Field service : The service engineers or techniciansvisit customer’s workplace or home to install, repair, ormaintain the products. They visit factories, workshops,warehouses, and offices to provide service. They alsohelp the customer to specify the product, test, anddemonstrate it after installation.

They need to access and update the data from theircomputing devices. Technology businesses such asAesta, Corrigo, Oracle, Ventyx, etc. provide powerfulsoftware applications to cater the need of service force.

Web-based Self Service: Some businesses offersolutions to the customers’ problems on the web itself.The customers can buy products online, track installationand service issues, and conduct online diagnostics.

Emerging Trends in CRMWhat is ECRM?This is a new trend in CRM which exploits the power ofinternet. Electronic Customer Relationship Management(ECRM) aims at developing and establishing all CRMfunctions with the use of digital communication toolssuch as EMail, chatrooms, instant messaging, forums,etc.

ECRM is motivated by the ease of internet access fromvarious computing devices such as desktops, laptops,tablets, and smartphones.

Features of ECRM• It enables the businesses to interact with their

customers and employers using internet.• ECRM offers seamless integration of CRM processes.• ECRM is speedy and reliable.• It is highly secured from threats.



Conventional CRM uses telephone, fax, and retail ECRM uses internet with Personal Digital Assistant (PDA)store for contacting customers. devices.

It takes care of the customers via Internet. The customer is able to take care of himself using internet.

It needs the user to download supporting Apps to In ECRM environment, there is no such requirement.access web-enabled applications.

CRM system design is products and ECRM system is customer oriented.functions oriented.

Cost of maintenance is high. Cost of maintenance is lesser.

Time taken for maintenance is long. Maintenance time is lesser.

CRM ECRM

What is Customer-Related Database ?It is the collection of customer-related information focusing on historic sales, current opportunities, and futureopportunities. These databases are maintained by a number of different functions such as sales managers, channelmanagers, product managers, etc. It can store information such as:• Customer’s personal information containing fields for name, address, contact details, contact preferences, age,

marital status, birthdate, anniversary, professional and social status, etc.• Sales managers can record past transactions, product preferences, opportunities, campaigns, enquiries, billing,

etc.• Channel managers can record business-owned retail outlets, online retail information.• Product managers may record product preference, price band, product categories explored, etc.

Developing and Maintaining Customer-Related Database

Identify required information

Identify information sources

Design and write database functions

Populate the database

Maintain the databaseUpdate / Delete / Add records

Fig. 2

Select database technology and hardwareplatform



ConclusionBeing social animals, we are naturally inclined towards interaction. The bonding that takes place when wecommunicate in a healthy manner paves smooth ways for many difficult challenges. In the role of customers, weinteract with salespersons, dealers, wholesalers, and suppliers.

Customers in the last decade only used to be concerned about quantity, quality, and price. In today’s information-driven world, the customers have not remained merely as people buying goods or services from a business. Marketingprofessionals more often than not tend to be a little unorganized when it comes to planning, designing, andimplementing their marketing strategies. It may be due to approaching deadlines or near-to-impossible targets.With the help of marketing automation software, they can become more organized.

Thus we must consider customer before taking any decision. Customers decide whether we must sustain in themarket or not.



A STUDY ON MARKETING STRATEGY OF RELIANCE

Karthikeyan.B1 Gokulsanth.K2

AbstractReliance Communications (formerly Reliance Communications Ventures) is one of India 's largest providers ofintegrated communications services. The company has more than 20 million customers and serves individualconsumers, enterprises, and carriers, providing wireless, wireline, long distance, voice, data, and internetcommunications services through a number of operating subsidiaries. The company sells communications anddigital entertainment products and services through its chain of Reliance Web World retail outlets. The company'sReliance Infocomm subsidiary provides wireless communications services throughout India .Reliance Communicationsis part of the Reliance - Anil Dhirubhai Ambani Group.The current network expansion undertaken by Reliance is thelargest wireless network expansion undertaken by any operator across the world.It was with this belief in mind thatReliance Communications (formerly Reliance Infocomm) started laying 60,000 route kilometres of a pan-India fibreoptic backbone. This backbone was commissioned on 28 December 2002, the auspicious occasion of Dhirubhai's70th birthday, though sadly after his unexpected demise on 6 July 2002.Today, Reliance Communications isrevolutionizing the way India communicates and networks, truly bringing about a new way of life.

1. III BBA CA, Department of BBA CA,Sri Krishna Arts and Science College, Coimbatore2. III BBA CA, Department of BBA CA,Sri Krishna Arts and Science College, Coimbatore

IntroductionReliance Group, an offshoot of the Group founded byShri Dhirubhai H Ambani (1932-2002), ranks amongIndia's top private sector business houses in terms ofnet worth. The group has business interests that rangefrom telecommunications (Reliance CommunicationsLimited) to financial services (Reliance Capital Ltd) andthe generation and distribution of power (Reliance PowerLimited and Reliance Infrastructure Limited).RelianceGroup's flagship company, Reliance Communicationsis India's foremost and truly integrated telecommunica-tions service provider. The Company has a customerbase of above 118 million including over 2.6 millionindividual overseas retail customers. RelianceCommunications corporate clientele includes over 39,000Indian and multinational corporations including small andmedium enterprises and over 290 global, regional anddomestic carriers.

Objectives of the Study• To know the demand of Rcom bundle offer along with

LGRD 3000 and 6100 as Ill as the demand of RcomBachat pack Sim in the market

• To help in development and introduction of newproduct

• To identify the company position among competitors• To determine those factors which persuade retailers

for sale of RCOM sims/product• To find out which type of schemes retailers prefer

and why?

• To study the effect of irregular supply on the sale ofthe product.

Significance of the Study• To compare the Airtel and Tata indicom Bundle offer

with RDLG 3000, 3500 & 6100 for analyzing thestatus of RCOM Bundle Offer

• To identify the Market share of RCOM• To find out the basic problems of retailers• To find out the performance of Distributor• To find out the basic problems of Channel of Distributor• To find out the Claims pending of Retailers.

SWOT AnalysisThe SWOT Analysis template is normally presented asa grid, comprising four sections, one for each of theSWOT headings: Strengths, Weaknesses,Opportunities, and Threats. The free SWOT templatebelow includes sample questions, whose answers areinserted into the relevant section of the SWOT grid. Thequestions are examples, or discussion points, andobviously can be altered depending on the subject ofthe SWOT analysis. Note that many of the SWOTquestions are also talking points for other headings -use them as you find most helpful, and make up yourown to suit the issue being analyzed. It is important toclearly identify the subject of a SWOT analysis, becausea SWOT analysis is a perspective of one thing, be it acompany, a product, a proposition, and idea, a method,or option, etc.



Strength• Low Entry Cost• Commission Structure• Fast Activation Process• Network• Connectivity• Data GPRS

Weakness• Branding Image• Distribution problem• Limited product portfolio- Only Mobile• Lack of Competitive Strength• Limited Budget

Opportunity• Preference of GSM over CDMA• New Specialist Application• Rural Telephony• New Market, Vertical, Horizontal• Competitors` Vulnerabilities

Threat• Political destabilization.• New Entrants• IT Development• Market Demand• Seasonality, Weather Effects

FindingsServices provided by Retailers :-All the retailers are dealing in all services i.e. providingRecharge Voucher, SIM, and Tariff Voucher of all thecellular service companies present in Bangalore zone.Also most of them provide only pre-paid connection.

Satisfaction :-Most of the retailers i.e. around 74% of respondents aresatisfied with RCOMM brand, 10% of them pushRCOMM brand to the customer and rest 16% retailersare not satisfied with RCOMM brand due to claimpending and the distributor. The retailers don't getschemes communicated in time by distributor anddistributor does not provide RCV & e-Top properly .

Problems :-Around 15% of the respondents that there is networkproblem with RCOMM, on the other hand they found itscompetitors viz. Airtel, BSNL, TATA indicom networkconnectivity of very good to good level.Around 16%retailers which are under puja enterprises distributorprojected problem with distributors. They don't getschemes communicated in time by distributor anddistributor does not provide RCV & e-Top.

Support from company :-Most of the retailers ensnared that they are supportedby the companies' personnel & companies' helpline.Allcompanies provide POP (Point of presence) at right timeand in adequate number.

Claim process :-In case of RCOMM process is be claimed very belatedlyi.e. almost 77% of the cases take 60-90 days, where asin case of Airtel most of the i.e. 88% is being finalized intime limit 0-30 days.The claim process services of othercompetitors viz. AirCel, Smart, & Tata Indicom are almostat par with the IDEA cellular ltd.Market access andgrowth is alright but the improvement of quality on theabove counts is necessity of the time.

ConclusionReliance communication is a very big brand name and Iam very thankful to the Reliance people to help me incompleting my project in Reliance communication.Reliance communication provides me the goodopportunities to make my skills stronger in marketing. Iam also very thankful to my project guide Mr. Rajiv Taneja for giving me his useful guidelines and important time.While doing this project I have talked with many peopleand came to know about the market and I learnt thathow the companies works and what they have to do forretaining their position in the market. RelianceCommunications has trained me to face the challengeswhatever in the market.

Reference• Business Today• Advertising & Management• www.COAI .in• www.AUSPI .in• Economic Times• Hindustan Times• www.wikipedia.org• www.seminarsonly.com



A STUDY ON CONSUMER SATISFACTION TOWARDSCAFÉ COFFEE DAY

Vignesh.C1

1. 3rd Year B.Com,Sri Krishna Arts and Science College,Kuniamuthur, Coimbatore.

IntroductionIt is a Parent Company of Café Coffee Day (CCD), CaféCoffee day Slogan is “A lot can happen over coffee”.Café Coffee day is most recognizable and affordablebrand in India. The Company mostly targets youngstersin the middle and higher income groups. Now Companyis positioning as India's favourite coffee corner, for theyoungsters. In today’s trend coffee corner has beenincreasing in various places

Company profileCafé Coffee Day, A division of Amalgamated Bean CoffeeTrading Company Ltd. (ABCTCL), having itsheadquarters in Chikkamagaluru, Karnataka it is an ISO9001 certified company has over 5000 acres of coffeestates which is second largest in Asia registered as asocial service provider to people. Large numbers of coffeeday cafes are located in Bangalore. It opened its firstcafe in 1996 on Brigade Road in Bangalore, and todayhas the largest cafe retail chain in India – with over 1000Café’s in 141 cities. The cafe chain has had muchsuccess riding, and to some extent creating, the cafeculture wave that swept across metropolitan Indiafollowing strong economic growth resulting in an increasein youth spending power. It has even tied up with WorldSpace and Micro sense to enable its cafes with satelliteradio and Wi-Fi, respectively. Its first Wi-Fi cafe wasopened on Lavelle Road, Bangalore. Its different divisionsinclude :• Coffee Day Fresh n Ground (354 Coffee bean and

powder retail outlets)• Coffee Day Xpress (341 Coffee Day Kiosk)• Coffee Day Take away (7000 Vending Machines)• Coffee Day Exports• Café Coffee Day• Coffee Day Perfect (FMCG Packaged Coffee) division

ObjectiveThe objective is to start trading in the overseas markets.Having set up a subsidiary in Vienna and a franchiseoperation in Pakistan, the café coffee day expects tovend its brand through departmental stores.

Vision“To be the best café chain in the country by offeringworld class coffee experience at affordable prices”

Mission• To provide the best quality services to customers at

affordable prices.• CCD is aiming to create its own niche merchandising

like Indian coffee powder, cookies, coffee mugs andcurry paste

Nature of BusinessCafé Coffee Day is a division of India's largest coffeeconglomerate, Amalgamated Bean Coffee TradingCompany Ltd. It was the first to roll out the coffee barconcept in India with its first Café in Bangalore. CaféCoffee Day serves the coffee its grows on 6000 acres ofits own estates and another 2500 acres of managedestates and is India only vertically integrated coffeecompany.

First café was opened in Bangalore. It ranges from hotand cold coffees giving a pinch of international flavours.

It has a well-equipped roasting unit catering to thespecific requirement of the consumers. The process iscarried out under the control of experienced personnelto meet the highest quality standards.

Marketing MixCafé Coffee Day has a well-equipped roasting unitcatering to the specific requirement of the consumers.The process is carried out under the control ofexperienced personnel to meet highest qualitystandards. The most modern technology available isused to maintain consistency and roast the coffee beansto the demanding specifications of the discerning coffeeconsumers.

Essentially a youth oriented brand with majority of itscustomers falling in the 15- 29 year age bracket. Eachcafé, depending upon its size attracts between 400 and800 customers daily.



PRODUCTCafé Coffee Day product mix constitutes a wide rangeof products like samosa, biryani, masala sandwich, tikkasandwich etc. The bestselling item in summer is frappe,which is coffee and ice cream blended together. Theyoung people favour it. In winter it is cappuccino. Theirmerchandising includes funky stuff like t-shirts, capsetc.

Serving Size :The serving size of a product is a measure, not only ofquantity, but also of value for money.

Product Serving Size• Hot Coffee 210 ml• Cold Coffee 350 ml• Smoothies 350 ml• Granitas 350 ml

PriceConsidering that Café Coffee Day knows its majorcustomer lies in the bracket of 15- 29,it has tried toderive a policy whereby it can satisfy all its customers.The price for a cup of coffee ranges from Rs.45 to Rs80. From the time it first started its operations, therehas been only minor changes in the pricing policy ofCafé Coffee Day. The changes have been more due tothe government taxes than anything else

PlaceThe strategy CCD has adapted is to place a cafe inevery possible location where some business can begenerated. This is a prime factor in determining thesuccess of a retail chain. Café Coffee Day looks to caterto their target market with strategically located outlets.Their outlets are generally located in High Street/ FamilyEntertainment Centers, gas stations, near Colleges etc.

PromotionCafé Coffee Day involved in all the areas of seriousconsumer passion like: Television: Café Coffee Day helda contest around a very popular programme on ZeeEnglish called Friends. All the six lead characters areshown often visiting a coffee shop. They have tied upwith Channel [V]‘s Get Gorgeous contest. Tie-ups:Besides that Café Coffee Day also tie up lot of the youthbrands. So they have a contest going on with Levis,another one with Scooty, Liril, latest one with AirtelFriends. Association with movies: CCD can be seen inmovies like Khakhee and Mai Hoon Na Sales Promotion:Café Coffee Day uses special ‘Café Citizen Card’ forrewarding Café Coffee Day’s customers. It is a loyaltyprogram to gain new customers and retain the existingones.

PeopleMotivation and personal skill are laid emphasize upon.Their employees are like friend to the customer but atthe same time they know about the international standardsof hygiene and cleanliness and personal grooming.

Competitors• Barista• Café mocha• Local tea joints and coffee shops like café Nescafe• local coffee houses like Indian coffee house etc are

also a major threat to the company as far asaffordability is concern

Strategies of Care Coffee dayLow Cost Service To Their CustomersThe coffee at Café Coffee day is priced at minimum ratefor Rs. 40 for the starters and it increases with the menu.

Opening Their Outlets in the Reach of The CustomersCustomers can easily access the Café Coffee Day neartheir homes and do not have to go a far off place in orderto get a cup a coffee.

Mergers and Acquisitions With Various CompaniesTie ups with different companies like Deccan Airlines,Retail Chains.

Customer Retention PolicyCafé Coffee Day aims at retaining their customer whovisit on everyday basis or weekly basis.

Promotional StrategiesCafé Coffee day has invested in promotion through variousfilms like MujhseshaadiKaroge, Mughal-e-azam,Kyunhogayana etc.

Distribution Strategies• Supply chain strategy• Decentralized distribution strategy ( for expansion

plans)• Follow continuous replenishment policy by integrating

vendors upstream

Marketing Strategies• Meeting place for 15 – 29 years old• Want their customers to grow with them• Market associations with youth oriented brands (levis,

TVS, Airtel, AOL)

Competitive Intelligence Strategy• Discover unexplored market segment• Hygienic eating place



• Opening 100% veg outlet• Wi-Fi – service

Branding managementCafe Coffee Day (CCD) has an established brand imagein India and ranks No 2 in the Brand Equity’s MostTrusted Brands 2008 survey – in the food servicescategory. Rival Barista is at No 5. CCD has been able tomake a connection with the Indian consumers,predominantly among the youth. CCD is the marketleader in India and was awarded the ‘Exclusive BrandRetailer of the Year’ by ICICI Bank in its Retail ExcellenceAwards 2005 for the organized retail sector.CCD hasbeen able to make its brand presence felt through thesheer number of stores. CCD has 620 cafes at presentand it has ambitious plans to launch more than 900 cafesby the end of the current financial year. This meanslaunching one store every other day which is notsurprising from a company which launched a cafe (in2005) in Vienna, the coffee capital of the world. CCDalso has three cafes in Vienna, and two in Karachi,Pakistan. Lagging behind CCD in the Indian market,Barista has about 200 cafés, Java Green (around 75cafés) and Mocha (around 25 cafés). The Indianorganized sector has potential for around 5,000 cafésbut fewer than 1,000 cafés exist currently. Cafe CoffeeDay has around 821 outlets in 115 cities in India. CCDplans to take the total number of cafes to 1,000 by March2010 and double it to 2,000 by 2014. (Update: By Jan2012, CCD had approx 1,200 cafes and 900 Expressoutlets) In October 2009, CCD announced that it willincrease its international presence from the current sixoutlets in Vienna and Pakistan to a total of 50 storesacross Europe and Middle East in two years’ time.

Operating Formats : Café Coffee Day operates in bothregular (Coffee Day Square) and premium formats(Lounge).

Highway Cafes : In 2004, CCD began cafes onhighways. By 2009, the total number of Café Coffee Dayhighway cafes rose to 30 owing to the overwhelmingresponse it received from travellers.

CCD’s new brand identity : In October 2009, CCDunveiled a new brand logo, a Dialogue Box, to weavethe concept of ‘Power of Dialogue’. In accordance withthis new brand identity, CCD planned to give all itsexisting outlets a new look by the end of 2009. Caféswould be redesigned to suit different environments suchas book, music garden and cyber cafes suitable forcorporate offices, university campus or neighborhood.The change plan included new smart menu, furnituredesign, among others

Café Coffee day provides opportunity to convert a typicalmass media campaign to a 360 degree communication

endeavor, Uncluttered and consistent presence in ahighly innovative manner

The Café Coffee Day out-of-box ideas are• Infinite possibilities of inside-the-café, innovative

activation and customer engagement ideas• Extension possibilities of a brand campaign only

limited by your imagination• Gives partnering brands a creative advantage unlike

other media vehicles

Branding techniques of café coffee day• Wall branding• Coasters• Danglers• Pillow branding• Posters• Saucer tag• Standee• Table mat• Tent card• Cup sleeves• Drop boxThese arebranding techniques of company.

Whistle Blower Policy & Vigil Mechanism1. Purpose : As a part of the Company’s integrity, the

Company follows the outlined whistleblower policywhich is designed to allow the complainant /Whistleblower to give voice to his / her concernswithout any fear of reprisal / victimisation from thesuperiors / management.

2. Scope : The whistleblower can be any stakeholder,whether employee, dealer, vendor, customer,shareholder, contractors and their personnel and otherconnected persons, Provided, that such personneldo not have ongoing or anticipated claims or legalproceedings or any other litigation on the company.Further, all such complainants whose associates,relations, direct or indirect family members who haveany such arbitration with the company are not eligibleto complain under this policy.

3. Coverage of the Policy : The whistleblower maycomplain on the following areas only within thepremises of the company:1. Incorrect financial reporting.2. Moral standards not being maintained.3. Not in line with Company policy.4. Illegal in nature and substance.5. Improper conduct and conduct not becoming our

company.



4. Procedure:1. The Whistle Blower Policy (‘the Policy’) shall be

administered by the Audit Committee.2. The employee can send a written complaint to the

Chairman of the Audit Committee of the Company.3. The Whistle blowing procedure is extended to be

used for serious and sensitive issues and thecompliant should be specific in nature containingsufficient details to permit investigation without needfor direct contact.The complaint shall include:• Nature and facts of the complaint• People involved• The impact, Monetary or otherwise on the Company• Name, address/ work location of the Complainant.• Supporting documents and any other evidence

4. Consistent with the Company’s philosophy, theCompany would expect the complainants to put theirnames for investigation purposes. Anonymousapplications will not be covered by the policy.

5. The process of investigation may take the help of theHead of Internal Audit or any other person. Theinvestigation will be completed within 60 days of thereceipt of the complaint. Within 60 days the decisionon the complaint will be communicated to the WhistleBlower by either the Chairman of Audit Committee orany member of the audit committee.

6. For any complaint, the audit committee mayconstitute a small Committee to assist them withthe investigation.

7. Based on their findings as recommended to the AuditCommittee, appropriate course of action will be taken.

8. Only in exceptional cases, where the complaint itselfis against the members of audit committee when thecomplainant is not satisfied with the outcome of theinvestigation carried out by the audit committee hecan directly appeal to the Chairman of the AuditCommittee. The Chairman of the Audit Committeewill inform the Complainant the date, time and placewhere he/ she can meet. This will be communicatedat least eight days in advance.

9. The Committee deliberations shall be incorporatedin the minutes and documented as part of the finalreport.

10.Every quarter, a summary of all the complaintsreceived will be put forward to the Chairman of theAudit Committee.

5. Confidentiality : The Proceedings shall be carriedout in strict confidentiality, in an unbiased mannerand shall ensure thorough fact finding. The Whistle

Blower-Complainant, Chairman of Audit Committeeand every internal and external stakeholder involvedin the process shall:a. Maintain complete confidentiality / secrecy of the

matterb. Not discuss the matter in any informal / social

gatherings / meetingsc. Not to keep papers unattended anywhere at any

timed. Keep the electronic mails / files under password

6. Safeguarding the Interest of the Whistle Blower:The Company will not tolerate harassment orvictimization and will take action to protect thewhistle blower (Complainant). The Company assuresevery Whistle Blower, protection against unfairtermination or any other disciplinary action or unlawfuldiscrimination or retaliation in any manner for blowingthe whistle under this policy. The Company will doits best to protect whistle blower’s identity when he/she makes a complaint. It must be appreciated,however, that the investigation process may requirea statement by the whistle blower as part of theevidence.

7. Malicious Allegations : The intent of the policy isto bring genuine and serious issues to the core.Allegations based not on reality but due to maliciousintent will result in serious consequences and strongdisciplinary action against the complainantconcerned.

8. Amendments : This Policy may be amended fromtime to time by the Board based on therecommendation of the Audit Committee.

Corporate Social Responsibility (CSR) PolicyAt Coffee Day Global Limited, we have integratedactivities geared towards corporate social responsibilityinto our operations, thereby achieving commercialsuccess in ways that honor ethical values and respectpeople, communities, and the environment. Our footprintacross economic, social and environmental initiativesis a reflection of its overall objective. We strive to preservethe natural beauty and history, along with the natives ofthe land – the people, wildlife and the forest cover.

Purpose :This policy sets out the Company’s commitment &approach towards Corporate Social Responsibility. TheCompany endeavors to facilitate livelihood opportunities,sociocultural development and environmentalsustainability in areas of its operations.



Focus Areas :In accordance with the requirements of the CompaniesAct, 2013 (“the Act”), the Company’s CSR programsshall mainly focus on the following areas:• Support technical / vocational Institutions for their

self-development.• Employment enhancing vocational skills among

women & the differently-abled people.• Partnerships to preserve & promote indigenous

heritage, culture, arts and handicrafts.• Ensuring environmental sustainability, ecological

balance, protection of flora & fauna, agro forestry,conservation of natural resources and maintainingquality of soil, air and water by facilitating capacitybuilding & promoting sustainable agriculturalpractices to our major coffee supplier's.

• Disaster relief and rehabilitation programsHowever, the Company may choose to undertakeadditional CSR Activities falling within the purview ofSchedule VII of the Companies Act, as may beamended from time to time, based on therecommendations of the CSR Committee.

CSR Committee :• The CSR Committee shall comprise three or more

directors of which, at least one will be an independentdirector.

• The CSR Committee of the Company shall beresponsible for:a. Formulating and recommending to the Board the

CSR Policy which shall indicate activities to beundertaken in line with Section 135 read withSchedule VII of the Companies Act.

b. Recommending to the Board the CSR expenditureto be incurred.

c. Monitor the implementation of the CSR Policy fromtime to time

Responsibility of the Board of Directors:The Board shall be responsible for –• Approving the CSR policy of the Company as may

be recommended by the CSR Committee, subjectto necessary changes/modifications as the Boardmay deem fit.

• Ensuring that in each financial year the Companyspends such amounts for CSR activities as may bestipulated in the Act, as amended from time to time.(presently 2% of the average net profits of the

Company made during the three immediate precedingfinancial years)

• Ensuring that the activities as are included in theCSR Policy are undertaken by the Company

Implementation & Monitoring Structure :The CSR activities will be driven by a dedicated teamfrom the CSR Committee, forming the Core MonitoringGroup under the guidance and support of the CSRCommittee members and the Board.

The CSR Committee will be responsible for monitoringapproved projects and fund disbursals for such projects.

The Core monitoring group reviews the periodic reportsfrom the designated Cluster CSR Committee. Whererequired, Core monitoring group may carry out anindependent assessment to assess the adequacy ofimplementation. Further, core monitoring group shallprovide any assistance that may be required at clusterlevel. Such monitoring mechanisms will include visits,meetings and progress/status reporting by the projectteams.

Core monitoring group shall provide periodic reports toCSR Committee and update the status of achievement.CSR committee at Board level provides broad directionfor CSR planning and conducts periodical reviews toensure desired impact.

CSR Budget :The amounts to be spent by the Company shall be asstipulated under the Act, as amended from time to time(presently 2% of the average net profits of the Companyfor the preceding three financial years) and as approvedby the Board.

Any surplus arising out of the CSR projects or programsor activities will not form part of business profits of theCompany.

ConclusionCoffee Day Global Limited is largest coffee conglomerate,pioneer of the café culture and the first to launch the‘coffee bar’ concept in India has over 1530 cafés in 200cities/towns across India and growing average footfallsof 200 per café per day. Café Coffee Day has doneextremely well so far to project itself as an affordableyouth- oriented brand. But there are still certain areaswhere their brand needs to be much stronger with regardto the physical evidence associated with the brand; CaféCoffee Day needs to do a lot of work if they hope tocatch up with Barista.



BRANDING

M.Kreethika1 S. Iswarya2 M.Meena3

1. II – B.COM CA ‘A’, Sri Krishna College of Arts and Science College, Kuniyamuthur, Coimbatore.2. II – B.COM CA ‘A’, Sri Krishna College of Arts and Science College, Kuniyamuthur, Coimbatore.3. II – B.COM CA ‘A’, Sri Krishna College of Arts and Science College, Kuniyamuthur, Coimbatore

IntroductionThere are millions of products and services all over theworld, each claims to be the best among their category.But, every product is not equally popular. Consumerdoesn't remember every product, only few products areremembered by their name, logo, or slogan. Suchproducts generate desired emotions in the mind ofconsumer. It is branding that makes product popular andknown in the market; branding is not an activity that canbe done overnight, it might takes months and even yearsto create a loyal and reputed brand

BrandingBranding gives personality to a product; packaging andlabelling put a face on the product. Effective packagingand labelling work as selling tools that help marketersell the product.

Definition of BrandingAccording to American Marketing Association - Brandis “A name, term, design, symbol, or any other featurethat identifies one seller’s good or service as distinctfrom those of other sellers. The legal term for brand istrademark. A brand may identify one item, a family ofitems, or all items of that seller. If used for the firm as awhole, the preferred term is trade name.”

Meaning of BrandingBranding is a process of creating a unique name andimage for product in the mind of consumer, mainlythrough advertising campaigns. A brand is a name, term,symbol, design or combination of these elements, usedto identify a product, a family of products, or all productsof an organisation. Branding is an important componentof product planning process and an important andpowerful tool for marketing and selling products

Elements of BrandingBrand includes various elements like - brand names,trade names, brand marks, trade marks, and tradecharacters. The combination of these elements form afirm's corporate symbol or name.• Brand Name - It is also called Product Brand. It can

be a word, a group of words, letters, or numbers torepresent a product or service. For example - Pepsi,iPhone 5, and etc.

• Trade Name - It is also called Corporate Brand. Itidentifies and promotes a company or a division of aparticular corporation. For example - Dell, Nike,Google, and etc.

• Brand Mark - It is a unique symbol, colouring,lettering, or other design element. It is visuallyrecognisable, not necessary to be pronounced. Forexample - Apple's apple, or Coca-cola's cursivetypeface.

• Trade Mark - It is a word, name, symbol, orcombination of these elements. Trade mark is legallyprotected by government. For example - NBCcolourful peacock, or McDonald's golden arches. Noother organisation can use these symbols.

• Trade Characters - Animal, people, animatedcharacters, objects, and the like that are used toadvertise a product or service, that come to beassociated with that product or service. For example- Keebler Elves for Keebler cookies

Branding StrategiesThere are various branding strategies on which marketingorganisations rely to meet sales and marketingobjectives. Some of these strategies are as following :-• Brand Extension - According to this strategy, an

existing brand name is used to promote a new or animproved product in an organisation's product line.Marketing organisations uses this strategy tominimise the cost of launching a new product andthe risk of failure of new product. There is risk ofbrand diluting if a product line is over extended.

• Brand Licensing - According to this strategy, someorganisations allow other organisations to use theirbrand name, trade name, or trade character. Suchauthorisation is a legal licensing agreement for whichthe licensing organisation receives royalty in returnfor the authorisation. Organisations follow thisstrategy to increase revenue sources, enhanceorganisation image, and sell more of their coreproducts

• Mixed Branding - This strategy is used by somemanufacturers and retailers to sell products. Amanufacturer of a national brand can make a product



for sale under another company's brand. Like this a business can maintain brand loyalty through its nationalbrand and increase its product mix through private brands. It can increase its profits by selling private brandswithout affecting the reputation and sales of its national brand.

• Co-Branding - According to this strategy one or more brands are combined in the manufacture of a product or inthe delivery of a service to capitalise on other companies' products and services to reach new customers andincrease sales for both companies' brands.



A STUDY CONSUMER BEHAVIOR TOWARDS ONLINE SHOPPING WITHREFERENCE TO COIMBATORE CITY

Dinesh Kumar.E1 Arun Kumar.S2

AbstractWith the advent of internet, the popularity of online shopping has caught the attention of many. Many studies have beendone in developed nations to know the attitude and behavior of consumers towards online shopping. For instance,previous studies on online shopping behavior found that ease of use, usefulness, perceived risk and product attributeshave significant influence on intention to buy. However the study of these attributes and its influence on intention tobuy is not clear as only limited attention is paid in India encompassing these variables and its influence on intentionto buy. Through this study, we investigate how these variables interact with one another and influence buyer’s intentionto buy. Using structural equation modeling, we uncover the influence of these variables on intention to buy. Researchand managerial implications are provided

Keywords : Online shopping, perceived risk, ease of use, usefulness and product attributes.

1. III BBA CA, Department of BBA CA,Sri Krishna Arts and Science College, Coimbatore.2. III BBA CA, Department of BBA CA,Sri Krishna Arts and Science College, Coimbatore.

IntroductionOnline shopping refers to the process of purchasingproducts or services via the Internet (Na Li and PingZhang, 2002). The process consists of five steps similarto those associated with traditional shopping behavior.In the typical online shopping process, when potentialconsumers recognize a need for some merchandise orservice, they go to the Internet and search for need-related information. However, rather than searchingactively, at times potential consumers are attracted byinformation about products or services associated withthe felt need. They evaluate alternatives and choose theone that best fits their criteria for meeting the felt need.Finally, a transaction is conducted and post-salesservices provided. Online shopping attitude refers toconsumer’s psychological state in terms of makingpurchases on the Internet (Li and Zhang, 2002). Thepenetration rate of Internet users in Asia was just higherthan Africa, as at 30 June 2010, according to the InternetWorld Statistics (2010). No doubt that the Internet hasbeen influencing our lives deeply in which it plays animportant, indispensable and irreplaceable role (Guo andNoor, 2011)

Online shopping has become a popular and easy wayfor customers. This new innovative type of shoppingbrings a great number and also wide range ofmerchandise to consumers; it also offers a huge marketand numerous business opportunities (Guo June andNoor, 2011).

Online consumer behavior became a contemporaryresearch area with an increasing number of researches.

The research articles which are available in variousjournals and conference proceedings in the fields ofmanagement information system and marketingmanagement identifies that researchers bring theoriesfrom classical consumer behaviour research, suchasbehavioral learning (Skinner, 1938), personalityresearch (Folkes 1988), information processing (Bettman1979), and attitude models (Fishbein 1967).

Rationale for the StudyWith online shopping grabbing the eyeballs of many,understanding variables that influence the intention tobuy through online needs more attention. This will helpcompanies in identifying variables that play a major rolein influencing customer’s intention to buy there by helpingthem in crafting strategies which drives consumers toprefer online shopping. For instance, if an online retailerunderstands that perceived risks are high in certaincategories that influence consumer’s intention to buy,retailers can craft strategies to minimize perceived risksand drive consumers to buy through online.

Earlier studies paid much attention to this topic indeveloped nations where internet penetration is high andconsumers are highly evolved. For instance, Vellido etal. (2000) extracted nine factors associated with user’sperception of online shopping. Among these factors therisk perception of users was demonstrated to be themain discriminator between people buying online andpeople not buying online. Other discriminating factorswere: control over and convenience of the shoppingprocess affordability of merchandise, customer serviceand ease of use of the shopping site. Jarvenpaa and



Todd (1997) proposed a model of attitudes and shoppingintention towards Internet shopping in general. The modelincluded several indicators, belonging to four majorcategories; the value of the product, the shoppingexperience, the quality of service offered by the websiteand the risk perceptions of Internet retail shopping.Consumer’s attitude towards online shopping affects theirbuying decisions. McKechnie et.al (2006) proposed thatthe application of the TAM model is useful but somemore links to be added to the existing TAM Model.

However little attention is paid in India where internetpenetration is significantly low and consumers are notso evolved in this space. Hence a need for such as studyis identified by the researcher to see how far thesevariables are relevant in India and how much theyinfluence consumer’s intention to buy.

Objectives1. Study the attributes that influence customers’

intention to buy online2. Study the highest influencing attributes on intention

to buy online3. Identify the relationship of demographical factors that

influence online shopping4. Understand the customer satisfaction level of online

purchase

Review of LiteratureLuarn and Lin (2003), the explosive growth of the Internetusage provides a great number of potential consumersto E-marketers. Whether the marketers can convert theirpotential customers into real ones and retain themdepends to a very large extent on the service they offerand the perceived customer satisfaction of consumers.

Childers et al. (2001) analysis found that convenienceand navigations were reliable predictors of ease of use,and shopping enjoyment. Besides enjoyment is a strongand consistent predictor of attitude in terms of interactiveshopping.

Davis (1986) defined perceived usefulness as, the degreeto which a person believes that buying a particularproduct or service will enhance his satisfaction. Pavlou(2003) proved in his research that perceived usefulnessis positively related to the intention to purchase online.Davis (1989) defined perceived ease of use as, the degreeto which a person believes that particular medium wouldreduce his effort.

Consistent with this goal-orientation perspective,consumers more likely to buy on the Internet are likelyto be time-starved (Bellman, Lohse and Johnson 1999).Pavlou (2003) online purchase intention can be definedas a situation where a consumer is willing and intends

to make online transactions. Purchase intention canalso be defined as a consumer’s intention to build anonline relationship and have transactions with a Webretailer (Zwass, 1998).

Novak et al. (1999), proved in the research factors likeproduct varieties, mismatch between actual anddelivered, sense of intangibility making impact intentionto purchase online. Sherry et al. (2007), stated thatdelivery time and search time are the prime factors thataffect intention to buy online, besides negotiation is theanother factor which make greater impact on onlineshopping. Bellman et al. (1999) revealed in their researchthe demographical factors are influencing positivelytowards purchase intention. Gender impact on Internetusage has also been analyzed from different perspectivesby different researchers.

Gefen et al. (2003) revealed that build online trust in anenvironment that lacks the typical human interaction thatoften leads to trust in other circumstances advancesour understanding of these constructs and their linkagesto behavior. Dowling and Stalin (1994), identified thatperceived risk for a specific product is a combination ofa fixed component, the product category risk (PCR),and a variable component, the product specific risk(PSR).

Kim et al. (2008), consumers’ perceived risk can alsobe defined as a consumer’s belief about potentialuncertain negative outcomes from the E-transaction.Rice (1997) adds that enjoyment of the online shoppingexperience is an important determinant of retaining theonline shoppers trust and perceived risks.

The earlier studies revealed that certain attributes makingimpact on intention to purchase through online. But thereis no research to consider those factors with the focusof specific demographical area. So after identifying thosefactors the researcher created the theoretical frameworkby considering all 20 attributes for the research.

Theoretical FrameworkBased on the literatures it is proved that the followingvariables are influencing online purchase intention. Suchas Time saving, Travel is not much required, Customers’interest on e-shopping, Product delivery takes longertime, High searching time, Impact of Internet speed,Preference of e-shopping in future, Possibility of shoppingexperience by 24x7, Easy payment assistance,Attractive offers, Online shopping may not have muchcost benefits, Product can be customized, Negotiationis not possible, Purchase is possible from anywhere,Access to Global brands, Lack of physical evidence,More brand choices, Actual product varies than delivered,Less varieties available to view on website, Productintangibility makes customer difficult to choose.



Figure -1 : Theoretical Framework : Attributes influencing on Online Shopping

Fig. 1

Mismatch betweenactual & delivered

product

Travel Likee-shopping

Delivery time Search time

Difficulty dueto intangibility

Intention toPurchase

Online

Varieties

More brandchoices

Physicalevidence

Access toglobal brandsAnywhere

PurchaseNegotiation

ProductCustomization

Costsaving

Attractiveoffers

Easypayment

Shopping24 x 7

Prefer e-shopin future

InternetSpeed

TimeSaving

The consumers facing attributes are taken as a base to study the influence of these attributes on online shopping.Using factor analysis, the researcher grouped these attributes under various dimensions. Then using SEM, theresearcher proposes to identify the dimensions that have the highest influence on intention to buy. Finally, theimplication of the study on retailer is proposed based on the outcome of the study.

Profile of the RespondentsDemographical data of the respondentsThe study has been conducted in Coimbatore City among 200 respondents based on G3 software and valid respondentswere 186. Demographical data of respondents obtained including the following: gender, age, occupation and income.Only the respondents those who purchased for at least two times through online considered.

The majority of the respondents are between the age group of 20 and 25 (81.7%) which can be used to predict thatmost of the online shoppers belong to this age group. While taking gender into consideration, 53.2 % of respondentsare male while 46.8% belongs to female category. As this study was conducted to focus on the corporate andcollege people, the percentage of respondents are more in these groups, i.e., 47% and 41% respectively. Most ofthe respondents fall under income group of less than Rs.10, 000 per month (45%).

Satisfactory level in online purchaseAbout 59.7% of respondents have agreed that they are satisfied with the online purchase as they have experienced.More than 30% of respondents say that they are highly satisfied towards online shopping. Only a very few numberof respondents have voted neutral. This satisfactory analysis depicts the level of ease and satisfaction that isenjoyed in online services.



Frequency of online purchaseThe majority of the online purchases happen once in amonth. More than 51% of users do online shopping oncein a month. Over 33% users say that they purchasemore than once in a month. It evidences that customersare comfortable and aware of online purchase, whichwill increase in future over the traditional shop purchases.5% of customers buy products through online everyweek. 10% of customers say that they are interested inpurchasing more than once in a week due to ease ofonline purchase.

Amount spent for online purchase in a yearMoney spent for the online purchase is been calculatedfor a period of one year. More than 76% of respondentsspend less than Rs.10, 000 in a year for online purchase.This is due to the risk involved in every transaction throughonline. Though risk persists, 2.7% people spend morethan Rs.30, 000 in a year for online purchases.

Products group purchased through online shoppingOnline buying is carried over for many product typesvarying from books, music to tickets. The analysisshows that consumers prefer buying the products onlinewhich is more intangible. Travel & vacations and booksare most preferred product/service by most of the onlineconsumers.

Computer peripherals are also preferred by most of thepeople because of the reduction in transportation costof those products. Most of those products are homedelivered by the e-tailers. Entertainment industry alsogrows with the help of internet. Booking tickets formovies, parties and shows happens over online which inturn give steady growth for the internet based companies.

Research MethodologyThe research design is exploratory in nature and datahas been collected through structured questionnaire. Therespondents were selected from various educationalinstitutions and corporate around Coimbatore City. Thesample size 198 was determined by using G3 softwareand valid respondents were 186. A pilot study wasconducted from 21 respondents and necessarymodification had taken place based on the feedback frompilot study. Convenience sampling followed asunavailability of list of Online Shoppers. Visual PLSS isa software used for doing structural equation modellingto test cause and effect relationship between the latentvariables (constructs), intra construct relationship(between indicator variables) using partial least square(PLS) algorithm.

Based on the literature the following four researchhypothesis were framed• H1 : Ease of use leads to online purchase intention• H2 : Usefulness leads to online purchase intention• H3 : Product Attribute to online purchase intention• H4 : Perceived Risk to online purchase intention

The authors have employed Jackknife re-samplingalgorithm (non-parametric method of estimating thestandard error creating a pseudo population with the helpof samples of sample), and Factor Analysis techniquesto analyze the collected data. The reliability and validityof the models have also been explored. The preliminaryresults show convergent validity and discriminant validityof the model.

Preliminary Findings And DiscussionIt has been found that factors like perceived risk, easeof use and product attributes are positively correlatedwith online purchase intention. Among these variables,product attributes is the major factor that leads to highpurchase intention for online shopping.• Ease of use construct is positively correlated with

the intention towards online purchase, i.e., when theease of use increases the intention to purchase onlinealso increases.Usefulness is negatively correlated with intention topurchase.

• Product attributes which consist of factors like timesaving, less or no travelling, product customization,and access to global brands is positively correlatedto intention to purchase.

• Perceived risk is positively correlated with intentionto buy.It has been identified that most of respondents aresatisfied with online shopping. Only few ofrespondents are not satisfied with the onlineshopping. The reason being, the delivery delay anddefective products shipped etc. The online retailersshould make sure that they deliver products withquality at the promised time, which will ultimatelyincrease the customer satisfaction.Gender influence has very little impact on aconsumer’s intention to purchase online. Almostequal percentage of male and female prefer onlineshopping. Other factors like income, age does notplay a significant role.

Managerial Implications of The StudyThe present study confirms that perceived risk, ease ofuse and product attributes of online shopping has a majorinfluence on consumer’s intention to buy. Hence onlineretailers should try and reduce perceived risks amongconsumers. This can be achieved through giving money-



back-guarantee, offering quality merchandise, securedonline transactions and improved customer service.Online retailers can also use Cash on Delivery as amechanism to reduce perceived merchandise deliveryrisks and perceived merchandise quality risks. Ratingof merchandise by consumers, credentials fromconsumers would also reduce perceived riskssignificantly. The retailer should also focus on betterpackaging that can reduce product tampering.

Retailers should also focus on aspects like delivery ofright products at customer’s doorsteps to preventmismatch of merchandise ordered and merchandisedelivered. Consistent delivery on these aspects willsurely improve the image of online retailer and alsoreduces perceived risks of consumers significantly.Using mass media, retailers can convey or highlight fewaspects such as safety of transactions, reliability ofproducts, ease of delivery, merchandise quality and cashback guarantee which in turn will improve web traffic toan online retail store.

It is also critical for online retailer to make the web moreuser-friendly. Online consumers should find the web easyto navigate. Retailers should provide adequateinformation about merchandise, facility to compare themerchandise on various dimensions such as price,features, likes, etc., would help consumers in making abetter choice. A well-organized web layout, neatarrangements of merchandise under different categories,more choices at various price points, better visuals wouldenhance the chances of conversion rates and alsoimprove web footfalls. Encouraging consumers to opt-infor receiving product related e-mails, offers would alsodrive traffic to the portal. This also helps in up-sellingand cross-selling of products.

Better customer service in terms of quick response tocustomer queries, better handling of customercomplaints would improve the image of online retailer.

ConclusionThrough this study, the researcher has attempted tostudy different consumer variables that influenceconsumer’s intention to buy online. However theresearcher did not attempt to study the moderating,intervening and extraneous variables that may influenceconsumer’s intention to buy. There is a scope to studyvariables which moderate consumer’s intention to buy.The analysis is based on the data collected only from aparticular city. It would be valuable to further test thesevariables across other cities. The researcher has madeno attempt to study specific high involvement productcategories in this study. It would be interesting to extendthis study across low and high involvement productcategories and measure the effect of these variables onintention to buy.

In this research, an attempt has been made only tostudy consumer variables. There is a scope forresearchers to study retailer’s attributes and its influenceon intention to buy. Hence the scope is huge. It is usefulto incorporate other perspectives of analysis that allowa depth understanding of various relationships amongdifferent variables and its influence on intention to buy.

Reference• Bellmen, S. Lohse, G.L. & Johnson, E.J. (1999),

“Predictors of online buying behavior”, Communicationof the ACM, Vol. 42, No. 12, pp. 32-38.

• Bettman, J.R. (1979), “An information ProcessingTheory of Consumer Choice, Reading, Mass.”Addison-Wesley.

• Childers, T.L. Carr, C.L. Peck, J. & Carson, S. (2001),“Hedonic and utilitarian motivations for online retailshopping behaviour”, Journal of Retailing, Vol. No.77(4), pp. 511-535.

• Davis, F. D. (1986), “A Technology Acceptance Modelfor Empirically Testing New End User InformationSystems: Theory and Results”, Doctoral DissertationThesis- MIT.

• Davis, F. D. (1989), “Perceived Usefulness, PerceivedEase of Use, and User Acceptance of InformationTechnology”, MIS Quarterly. Vol. 13(3), pp. 319-340.

• Dowling & Stalin, R. (1994), “A model of perceivedrisk and intended risk-handling activity”, Journal ofConsumer Research, Vol. No. 21, pp. 119–134.

• Fishbein, M. (1967), Attitude and Prediction ofBehavior: Readings in Attitude Theory andMeasurement, John Wiley, New York.

• Folkes, V.S. (1988), “Recent Attribution Research inConsumer Behavior: A Review and

• New Directions”, Journal of Consumer Research,Vol.No.14, pp. 548-565. Gefen, D. Karahanna, E. &Straub, D. W. (2003), “Trust and TAM in onlineshopping: An integrated model”, MIS Quarterly,Vol.27, No.1, pp. 51-90.

• Guo, J. & Noor, I.J. (2011), “A study on Consumers’Attitude towards Online Shopping in hina”,International Journal of Business and Social SciencesVol. 2, No.22.

• Hoffman, D. L. & Novak, T. P. (1996), “Marketing inHypermedia Computer-Mediated Environments:Conceptual Foundations”, Journal of Marketing, Vol.No.60, pp. 50-68.

• Jarvenpaa, S.L. & Todd, P.A. (1997), “ConsumerReactions to Electronic Shopping on the World WideWeb”, Journal of Electronic Commerce, Vol. 1, No.2,pp. 59-88.



• Kim, D.J., Donald L.F. and Raghav (2008), “A trust based consumer decision making model in electroniccommerce: A role of trust, perceived risk, and their antecedents”, Decision Support System, Vol.44, No.22,pp.544-564.

• Luarn, P., & Lin, H.H. (2003), “Customer loyalty model for e-service context”, Journal of Electronic Commerce,Vol. 4, No. 4, pp. 156-167.

• Mauldin, E. &Arunachalam, V. (2002), “An Experimental Examination of Alternative Forms of Web Assurancefor Business-To-Consumer E-Commerce”, Journal of Information Systems, Vol. 16, No. 1, pp. 33-55.

• McKechnie, S., Winklhofer, H. &Ennew, C. (2006), “Applying the technology acceptance model to the onlineretailing of financial services”, International Journal of Retail & Distribution Management, Vol.34, No.4/5, pp.388-410.



MODERN-DAY BRANDING IN MAINSTREAM BUSINESSES

Priyanka G1 Sreemathy R2 Swathi H3

AbstractBranding is a process of creating a unique name and image for a product in the mind of consumer, which is mainlydone through advertising campaigns. A brand can be a name, term, symbol, design or even a combination of one ormore of these elements, used to identify a product, a family of products, or all products of an organisation. Brandinghas evolved into an important component of product planning process and a powerful tool for marketing and sellingproducts. Branding gives a personality to a product as it includes various elements like - brand names, trade names,brand marks, trademarks, and trade characters among others. The combination of these elements forms a firm'scorporate symbol or name.

Further, as a result of increasing global competitions, branding has become an integral part of business promotion inthis challenging world of commerce as well. It is essential for every business to emphasis on investing in the brandingof its products and services to survive and sustain in the globalised market. This article is an attempt to examine thevarious dimensions of modern-day branding that exists among the wide landscape of commercial business. In thisarticle, we aim to arrive at the most prominent and sought after styles of branding that drive the various businessdomains worldwide, towards growth and expansion.

1. II B.COM (IT), Sri Krishna College of Arts and Science, Coimbatore.2. II B.COM (IT), Sri Krishna College of Arts and Science, Coimbatore.3. II B.COM (IT), Sri Krishna College of Arts and Science, Coimbatore.

Components and Prospects of Branding inMainstream BusinessesIntroductionBranding is a process of creating a unique name andimage for a product in the minds of the consumers,mainly through advertising campaigns. A brand can be aname, term, symbol, design or combination of two ormore of these elements, used to identify a product, afamily of products, or all products of an organisation.Brand is the way in which a consumer perceives thebusiness of an institution. In the current world ofpromises, branding is the promise of a firm to theconsumer, expressing what the firm is, what the firmbelieves in and what unique value is provided.

Objectives• To know the components of branding that exists

among the modern-day firms• To ascertain the benefits of branding• To know the issues and challenges in branding• To overcome the issues and challenges of branding

Importance• A study on organisational index showed that over a

period of 30 years, between 1975 and 2003, theoverall corporate value of intangible assets increasedfrom 17% to 80%. The magazine Business week hasconcluded that brands account for more than one-third of shareholder value. Brands provide economicvalue to firms.

• Brands are the most sustainable asset of anyorganization, and when aligned with the overallstrategy of the organization they can function as thecentral organizing principle for the organization’sdecision making.

• In today’s global market, it is critical to stand apartfrom the crowd. Competition is no longer on a localstage; organizations now compete in the globaleconomy. People tend to do business with companiesthey are familiar with. If branding is consistent andeasy to recognize, it can help people feel more atease purchasing your products or services.

• It is essential to study the components of modern-day branding and their impacts on mainstreambusinesses to make use of this substantial asset.

Review of LiteratureA Cultural Approach to Branding in the GlobalMarketplace by JulienCaylaand Eric J. Arnould, Journalof International Marketing, Vol. 16, No. 4, Branding inthe Global Marketplace (2008), pp. 86-112

The authors argue that to meet theoretical andmethodological challenges of global branding,international marketing scholars will need to revise somekey premises and foundations. Branding research in thefuture needs to be contextually and historically grounded,polycentric in orientation, and acutely attuned to thesymbolic significant of brands of all types. The authorsoffer conceptual foundations for a culturally relative,



contextually sensitive approach to international brandingin which the construct of brand mythology is central.

Co-branding: brand equity and trial effects byJudith H.Washburn, Brian D. Till and Randi Priluck, Journal ofConsumer Marketing, Vol. 17 Iss: 7, pp.591 – 604

Co-branding is an increasingly popular techniquemarketers use in attempting to transfer the positiveassociations of partner brands (constituent brands) to anewly formed co-brand or composite brand. The authorsexamine the effects of co-branding on the brand equityof both the co-branded product and the constituentbrands that comprise it, both before and after producttrial. It appears that co-branding is a win/win strategyfor both co-branding partners regardless of whether theoriginal brands are perceived by consumers as havinghigh or low brand equity.

Corporate branding, emotional attachment andbrand loyalty: the case of luxury fashion branding byJing Theng So, Andrew Grant Parsons and Sheau-FenYap, Journal of Fashion Marketing and Management:An International Journal (2013), Vol. 17 Iss: 4, pp.403 -423

The authors of this study emphasized on developing andempirically testing a theoretical framework that capturesthe impact of corporate branding on customer emotionalattachment and brand loyalty in the luxury fashionmarket. The authors found limited effect of corporatebranding on customer emotional attachment and brandloyalty. Among the six corporate branding dimensionsexamined, only corporate association, functionalbenefits, and symbolic benefits were found to have asignificant impact on emotional attachment. Further, theimpact of corporate branding on brand loyalty was onlyevident through functional benefits and corporateassociations.

Exploring branding strategies of FMCG, servicesand durables brands: evidence from India by BikramJitSingh Mann and MandeepKaur, Journal of Product &Brand Management (2013), Vol. 22 Iss: 1, pp.6 – 17

The authors aim to analyze and compare the brandingstrategies used in the three sectors namely FMCG,services and durables. The results reveal that thebranding strategies vary across the three sectors. Singlecorporate brand strategy is predominantly used fordurables and credence services. On the other hand, incase of FMCG and experience services, individual brandtype endorsed by the corporate brand type is the mostfrequently used branding strategy.

Untangling the brand name from the branded entity: Theconceptualisation and value of the established brandname by Griff Round and Stuart Roper, European Journalof Marketing (2015), Vol. 49 Iss: 11/12, pp.1941 - 1960

The authors investigate the value to consumers of thebrand name element for established brands, given thatthe focus in the literature has been on new brands. Themean value obtained for the importance of the brand nameelement for established products appeared to showsubstantial importance to consumers. However, furtheranalysis identified a position where the majority ofparticipants placed little value on the brand nameelement and a smaller but material group perceived itsvalue as of overwhelming importance.

Components of brandingBrand includes various elements like - brand names,trade names, brand marks, trademarks, and tradecharacters. The combination of these elements forms afirm's corporate symbol or name.

Brand NameIt is also called Product Brand. It can be a word, a groupof words, letters, or numbers to represent a product orservice.

Trade NameIt is also called Corporate Brand. It identifies andpromotes a company or a division of a particularcorporation. Some of the examplesinclude Dell, Nike,Google, etc.

Brand MarkIt is a unique symbol, colouring, lettering, or other designelement. It is visually recognisable, not necessary to bepronounced.

Trademark:Trademark is a title on a word, name, symbol, orcombination of these elements. Trade mark is legallyprotected by government.

Trade CharactersAnimals, people, animated characters, objects, and thelike that are used to advertise a product or service, thatcome to be associated with that product or service.

Branding StrategiesThere are various branding strategies on which marketingorganisations rely to meet sales and marketingobjectives. They are:

Brand ExtensionAccording to this strategy, an existing brand name isused to promote a new or an improved product in anorganisation's product line. Marketing organisations usesthis strategy to minimise the cost of launching a newproduct and the risk of failure of new product. There isrisk of brand diluting if a product line is over extended.



Brand LicensingAccording to this strategy, some organisations allowother organisations to use their brand name, trade name,or trade character. Such authorisation is a legal licensingagreement for which the licensing organisation receivesroyalty in return for the authorisation. Organisationsfollow this strategy to increase revenue sources, enhanceorganisation image, and sell more of their core products.

Mixed BrandingThis strategy is used by some manufacturers andretailers to sell products. A manufacturer of a nationalbrand can make a product for sale under anothercompany's brand. Like this a business can maintainbrand loyalty through its national brand and increase itsproduct mix through private brands. It can increase itsprofits by selling private brands without affecting thereputation and sales of its national brand.

Co-BrandingAccording to this strategy one or more brands arecombined in the manufacture of a product or in thedelivery of a service to capitalise on other companies'products and services to reach new customers andincrease sales for both companies' brands.

Benefits of brandingBenefits to producers1. Brand name helps in advertising in an easier way2. Brand name establishes the permanent identity of

the product3. Brand name promotes repurchasing4. Competition becomes easier with the help of brand

loyalty5. Creates and maintains organisational goodwill

Benefits to customers1. Shopping consumes lesser time as branded products

can be easily identified.2. The quality of branded product undoubtedly is better.3. Prices of branded products are fixed by the

companies themselves and there are no frequentchanges.

4. The branded products own the responsibility for itsusefulness.

Issues and challenges in branding1. High investment required2. May create negative image, if the brand fails in the

market3. Unwillingness on part of the customers to pay extra

amount for branded goods

ConclusionCustomers encounter brand promises on a daily basis.The simple act of getting a soda out of a vending machineis an exercise in brand promise. The vending machineoffers many options to choose from, but more than likelyour drink selection will be based on prior experienceswith a specific product. We have an expectation of anexperience when we make our selection, much of whichhas been established through the decision-making stepsof awareness, interest, desire, and satisfaction.

Interestingly, the things that influence our decision-making process have little to do with the product orservice. Much of our experience with a product or serviceis created through the associations made with theproduct through advertising, brand identity and theenvironment in which the product is experienced.Branding is growing to be inevitable for mainstreambusinesses to survive in the market and sustain theirprogress. Yet, much more innovations are awaited inthis ‘Graphics Era’ promoting brand identities andcapitalising on brand equities.

References• A Cultural Approach to Branding in the Global

Marketplace by JulienCayla and Eric J. Arnould,Journal of International Marketing, Vol. 16, No. 4,Branding in the Global Marketplace (2008), pp. 86-112

• Kids and branding in a digital world by Barrie Gunter,published by Manchester University Press, Pages:208, Stable URL: http://www.jstor.org/stable/j.ctt18dzrjq

• Co-branding: brand equity and trial effects byJudithH. Washburn,Brian D. Till andRandi Priluck, Journalof Consumer Marketing, Vol. 17 Iss: 7, pp.591 – 604

• Corporate branding, emotional attachment and brandloyalty: the case of luxury fashion branding byJingTheng So, Andrew Grant Parsons and Sheau-Fen Yap, Journal of Fashion Marketing andManagement: An International Journal (2013), Vol.17 Iss: 4, pp.403 - 423

• Brands and Branding by Andy Hao, Journal of Product& Brand Management (2010), Vol. 19 Iss: 7, pp.519– 520

• Exploring branding strategies of FMCG, services anddurables brands: evidence from India by BikramJitSingh Mann and MandeepKaur, Journal of Product &Brand Management (2013), Vol. 22 Iss: 1, pp.6 – 17



NEW PRODUCTDESIGN & DEVELOPMENT

1. II B.COM CM, Sri Krishna College of Arts and Science, Coimbatore.2. II B.COM CM, Sri Krishna College of Arts and Science, Coimbatore.

Kaviya. P. S1 Thahsin. A2

IntroductionIn general a product is defined as a thing produced bylabor or effort or result of a process.The word “product”has referred to produce any product in marketing. Aproduct is thing that can be offered to a market that mightsatisfy a want or need. In retail, products are calledmerchandise. In manufacturing, products are purchasedas raw material and sold as finished goods.Commodities are usually raw materials such as metalsand agricultural products, but the term can also refer toanything widely available in the open market. In projectmanagement, products are the formal definition of theproject deliverables that form the objectives of the project.

Goods are a physical product capable of being deliveredto a purchaser and involve the transfer of ownership fromseller to customer A service is a non-material actionresulting in a measurable change of state for thepurchaser caused by the provider. Ideas (intellectualproperty) are any creation of the intellect that hascommercial values but is sold or traded only as an idea,and not as a resulting service or good.

TangibleA tangible product is a physical object that can beperceived by touch such as buying a vehicle, or gadget.Most goods are tangible products which are sold in aopen markets. For example, a soccer ball is a tangibleproduct.

IntangibleAn intangible product is a product that can only beperceived indirectly such as an insurance policy.Intangible data products can further be classified intovirtual digital goods. which are virtually located on acomputer OS and accessible to users as conventionalfile types, such as mp3 (songs)

All products which are produced and sold in open marketand etc.., will come under this two levels .in some casethe product which is produced will cause a decline stageat that time the company should do any different ideasto make the company live in market for that purposesthe company take a new idea of product developing ornew product producing . More information about productdevelopment and new product design are given below.

Product Life CycleThe product life cycle is an important concept inmarketing. It describes the stages a product goesthrough from when it was first thought of until it finally isremoved from the market. Not all products reach thisfinal stage. Some continue to grow and others rise andfall.

This is the base for the creation of the new product .ifthe product reach the decline line then the companycan’t survive in the market and so before decline stageit new product will be developed.

Sal

es

Intro

duct

ion

Gro

wth

Mat

urity

Dec

line

Time

Product life cycle curve

Fig. 1 : Product life cycle

The product life cycle has 4 very clearly defined stages,each with its own characteristics that mean differentthings for business that are trying to manage the lifecycle of their particular products.

Introduction StageThis stage of the cycle could be the most expensive fora company launching a new product. The size of themarket for the product is small, which means sales arelow, although they will be increasing. On the other hand,the cost of things like research and development,consumer testing, and the marketing needed to launchthe product can be very high, especially if it’s a competitivesector.



Growth Stage The growth stage is typically characterized by a stronggrowth in sales and profits, and because the companycan start to benefit from economies of scale inproduction, the profit margins, as well as the overallamount of profit, will increase. This makes it possiblefor businesses to invest more money in the promotionalactivity to maximize the potential of this growth stage.

Maturity Stage During the maturity stage, the product is establishedand the aim for the manufacturer is now to maintain themarket share they have built up. This is probably themost competitive time for most products and businessesneed to invest wisely in any marketing they undertake.They also need to consider any product modificationsor improvements to the production process which mightgive them a competitive advantage.

Decline Stage Eventually, the market for a product will start to shrink,and this is what’s known as the decline stage. Thisshrinkage could be due to the market becomingsaturated (i.e. all the customers who will buy the producthave already purchased it), or because the consumersare switching to a different type of product. While thisdecline may be inevitable, it may still be possible forcompanies to make some profit by switching to less-expensive production methods and cheaper markets.

New Product DesignIt is a set of technical activity within a productdevelopment process that works to meet marketing &business case vision. New product design is the thingwhich is created something innovatively it is essentialfor the generation and development of the idea thoughtthe process that leads to a new product.

Product design processThe set of strategic and tactical activities, from ideageneration to commercialization, used to create aproduct design. In a systematic approach, productdesigners conceptualize and valuate ideas, turning theminto tangible inventions and products. The productdesigner’s role is to combine art, science, and technologyto create new products that people can use. Their evolvingrole has been facilitated by digital tools that now allowdesigners to communicate visualize, analyze andactually produce tangible ideas in a way that would havetaken greater man power in the past. Product design issometimes confused with (and certainly overlapswith)industrial design and has recently become a broadterm inclusive of service, software, and physical productdesign. Industrial design is concerned with bringingartistic form and usability, usually associated with craft

design and ergonomics together in order to mass-produce goods. Other aspects of product design includeengineering design particularly when matters offunctionality or utility (e.g. problem-solving) are at issue,though such boundaries are not always clear. Producedesign is the conceptulation of the idea about a productor a transformation of idea into reality.

The designprocess

Definethe problem

Collectinformation

Brainstormand analyze

ideas

Developsolutions/

build a testa model

Present yourideas to others

for feedback

Improveon your design

Fig. 2 : Product design process

Product design as the part of the product innovationprocessThe product design process is often presented as partof the product innovation process. this product innovationprocess describes the activities starting with a strategicanalysis, the interaction between the various activitiesof the product innovation process is followed below

Product design described in phase modelsThe product design process is described as a phasemodel: a process with various distinct phases (forexample, a problem analysis phase and an ideageneration phase). The phases correspond to differentlevels of abstraction of the product idea. These levelscorrespond to various forms in which a design in the makingcan be represented, such as the function struc-ture, theprincipal solution and the preliminary design.

Product design model as problem solving:In the third model, the product design process isdescribed as a way of thinking. The design process is



seen as a problem-solving model: distinct steps can bedistinguished, which together form a cycle. This is calledthe basic design cycle. The basic design cycle is themost fundamental model of the design process.

Models of the product design processThe literature on product design contains a variety ofmodels of describing and prescribing the design process.A model of design is a theoretical description of theactivity of designing. There are three types of models,portraying different viewpoints on the process ofdesigning. The three types of models do not oppose,but they supplement one another in explaining the productdesign process

Product design as part of the innovation process us whataspects should be taken into account when designingnew products. The phase models of product designindicate what kinds of problems the product designerhas to solve and what the best se-quence is therein.The basic design cycle gives the logical sequence ofsteps in the problem-solving process within each phraseof product designing.

Product design: a multi-disciplinary approachProduct designer have to deal with a variety of interestand stake holders in the design process. This require amulti-disciplinary to product design, the role of anindustry trial designer during the design process is tobring together different aspects

Many factors have to be considered when designing aproduct. Consumers look upon a product as somethingto be bought and used. To the design engineer it is atechnical-physical system that has to function efficientlyand reliably. Production engineers have to manufactureit, often in large numbers, preferably fast, cheaply,accurately and with the lowest possible number of faults.A market considers it a commodity with added value,something that people are prepared to buy.Entrepreneurs invest in new products and count on anattractive return. People that are not directly involvedmay see above all the reverse side of the coin: theundesirable and often even harmful side-effects ofproduction and use. To every point of view there arecorresponding requirements that must be taken intoaccount. Product design, therefore, demands amultidisciplinary approach.

Product design: concentric developmentProduct innovation comprises the design of a product,plus the development of the plans for manufacturing,distribution, and the market approach. All these planshave to be properly attuned to one another. This alsodemands a phased approach. In product design thereare always alternatives. To find the best one, at leastsome of them have to work out.

New Product DevelopmentProduct development is the process of creating a newproduct to be sold by a business or enterprise to itscustomers. In the document title, design refers to thoseactivities involved in creating the styling, look and feel ofthe product, deciding on the product’s mechanicalarchitecture, selecting materials and processes, andengineering the various components necessary to makethe product work. Development refers collectively to theentire process of identifying a market opportunity,creating a product to appeal to the identified market,and finally, testing, modifying and refining the productuntil it is ready for production. A product can be anyitem from a book, musical composition, or informationservice, to an engineered product such as a computer,hair dryer, or washing machine. This document is focusedon the process of developing discrete engineeredproducts, rather than works of art or informationalproducts. The world is characterized by macro-andmicro-environmental influences. These influencesinclude the rapid evolution of socio-cultural patterns andlife styles, self-awareness and decisional autonomy ofconsumers, a rising significance of mass production anddistribution systems, an incessant introduction oftechnological and managerial innovations, increasinglevels of competition and globalization dynamics. Theseinfluences are impacting the textile and apparel industry,creating diverse marketplace opportunities andchallenges New product development is a process ofdesigning to develop ,test and consider the value of theproduct which are new to the market in orders to ensurethe growth or survival of the organization . The task ofdeveloping outstanding new products is difficult, time-consuming, and costly. People who have never beeninvolved in a development effort are astounded by theamount of time and money that goes into a new product.Great products are not simply designed, but instead theyevolve over time through countless hours of research,analysis, design studies, engineering and prototypingefforts, and finally, testing, modifying, and re-testing untilthe design has been perfected.

Few products are developed by a single individual workingalone. It is unlikely that one individual will have thenecessary skills in marketing, industrial design,mechanical and electronic engineering, manufacturingprocesses and materials, tool-making, packagingdesign, graphic art, and project management, just toname the primary areas of expertise. Development isnormally done by a project team, and the team leaderdraws on talent in a variety of disciplines, often fromboth outside and inside the company. As a general rule,the cost of a development effort is a factor of the numberof people involved and the time required to nurture theinitial concept into a fully-refined product. Rarely can a



production-ready product be developed in less than oneyear, and some projects can take three to five years tocomplete. Developing a new product shouldn’t feel likeyou’re fighting in the dark. There’s an easier way. Whatyou need is a structured road-map that gives yourbusiness a clear path to follow.

Idea generation

Idea screening

Concept development and testing

Marketing strategy development

Commercialisation

Test marketing

Product development

Business analysis

Actually developing the tangible product or service isonly a small part of the new product developmentprocess, which includes the complete journey fromgenerating the initial idea to bringing the product tomarket. By setting out the steps involved, and stickingto them, your product development will become a morefocused and flexible approach that can be adapted forall different types of products and services.

Idea GenerationThe development of a product will start with the concept.The rest of the process will ensure that ideas are testedfor their viability, so in the beginning all ideas are goodideas (To a certain extent!)

Ideas can, and will come, from many different directions.The best place to start is with a SWOT analysis,(Strengths, Weaknesses, Opportunities and Threats),which incorporates current market trends. This can beused to analyse your company’s position and find adirection that is in line with your business strategy.

In addition to this business-centred activity, are methodsthat focus on the customer’s needs and wants. Thiscould be:• Under-taking market research• Listening to suggestions from your target audience

– including feedback on your current products’strengths and weaknesses.

• Encouraging suggestions from employees andpartners

• Looking at your competitor’s successes and failures

Idea ScreeningThis step is crucial to ensure that unsuitable ideas, forwhatever reason, are rejected as soon as possible. Ideasneed to be considered objectively, ideally by a group orcommittee.

Specific screening criteria need to be set for this stage,looking at ROI, affordability and market potential. Thesequestions need to be considered carefully, to avoidproduct failure after considerable investment down theline.

Concept Development & TestingYou have an idea and it’s passed the screening stage.However, internal opinion isn’t the most important. Youneed to ask the people that matter – your customers.Using a small group of your true customer base – thosethat convert – the idea need to be tested to see theirreaction. The idea should now be a concept, with enoughin-depth information that the consumer can visualize it.This stage gives you a chance to develop the conceptfurther, considering their feedback, but also to startthinking about what your marketing message will be.

Business AnalysisOnce the concept has been tested and finalized, abusiness case needs to be put together to assesswhether the new product/service will be profitable.This should include a detailed marketing strategy,highlighting the target market, product positioning andthe marketing mix that will be used.This analysis needs to include: whether there is ademand for the product, a full appraisal of the costs,competition and identification of a break-even point.

Product DevelopmentIf the new product is approved, it will be passed to thetechnical and marketing development stage. This is whena prototype or a limited production model will be created.This means you can investigate exact design &specifications and any manufacturing methods, but alsogives something tangible for consumer testing, forfeedback on specifics like look, feel and packaging forexample.

Test MarketingTest marketing (or market testing) is different to conceptor consumer testing, in that it introduces the prototypeproduct following the proposed marketing plan as wholerather than individual elements. Concept testing presentthe consumer with a proposed product and measureattitude and intention at their early stage of developmentconcept testing of prototypes can help avoid costlymistakes. Test marketing involves placing for sale in one



or more sales in one or more selected areas andobserving its actual performance under the proposedmarketing plan this process is required to validate thewhole concept and is used for further refinement of all

CommercializationWhen the concept has been developed and tested, finaldecisions need to be made to move the product to itslaunch into the market. Pricing and marketing plans needto be finalised and the sales teams and distributionbriefed, so that the product and company is ready forthe final stage.

LaunchA detailed launch plan is needed for this stage to runsmoothly and to have maximum impact. It should includedecisions surrounding when and where to launch to targetyour primary consumer group. Finally in order to learnfrom any mistakes made, a review of the marketperformance is needed to access the success of theproject.

New product development can be made much simplerand focused, with a higher likelihood of

Uses Of New Product Development• Increases / define market share by offering more

choices or updating the oldest product• Appeal to new segments• Diversity into new market• Improve relationship with distributors• Maintain the firm reputation as a leading edge

company• Even out peaks are in demand• Make better use of organization resources

Why to Produce a New Product• To replace decline product• To take advantage of new technology• To defeat rivals• To maintain or to increase market share• To maintain competitive advantage• To fill gap in the market

New Product Development PlanningThis is a strategic stage so all step must be doneperfectly because it affect the life of the company .twomain things that should be taken isi. Current product portfolioii. Opportunity& threadsThe firm then determines the type of product which wouldbe the best fit in the corporate strategy.To create the next product in a company’s product linea design team goes through product development process

steps. Starting with a product idea, the team movesthrough several stages to generate all the details anddocuments needed to get the product built. A NEWproduct development (NPD) process goes through thesame steps, however as this product has not beendeveloped by the team before, new risks anduncertainties are introduced and often additionalinformation is documented and shared withmanufacturing.

Concept :The concept step sets basic direction andboundaries for the entire development process byclarifying the type of product, the problem the productsolves and the financial and technical goals to beachieved by the product.

Ideation: During the ideation step the team brainstormsto discover some of the many ways a product can solvethe problem and meet internal goals. Ideas are evaluatedand the most promising are selected for furtherinvestigation.

Design :It’s in this step that the execution of the “best”way to create and construct the product happens.Engineering details are generated to flesh out the highlevel concepts from the ideation stage.

Test: Testing verifies if the product meets the originalgoals or if additional refinement is needed.

Release: Once testing has confirmed that the productsolves the problem and will meet the company goals; itis ready to start the new product introduction (NPI)process and get the product built.

The basic steps of the new product development processare listed above as stages that follow each other, but inreality the process is cyclical, not linear. Ideation, Designand Test steps are repeated over and over again, atvarying depths of detail and on different subsystems,until the product design is complete.

IdeateNPI

Concept Release

New product development stages

Design

Test

The pace at which NPD cycles move can be fast withlots and lots of changes to parts, assemblies and BOMs.During design, companies often do not follow the form-fit-function (FFF) rulesthat get followed in production,but they will use revisions to take snap shots of a designat a moment in time. Teams typically establish newrevisions when they want to create prototypes. At thispoint the design is temporarily frozen as models,drawings, specifications and BOMs get updated to thenext revision.



Keeping track of all the different changes made duringthese cycles can be difficult even if the design team islocated within the same building. And if multiple peoplehave access to editable documents (e.g. MS Wordspecs, MS Excel BOMs) changes made that were notagreed to by all necessary parties will causemisunderstandings. Read-only PDFs can help thismatter, but this fix is just a temporary solution for alarger problem. If a company doesn’t have a commonunderstanding around when revisions are created andby whom, and where they are stored, this lack of controlcan lead to confusion and chaos.

ConclusionProduct is the thing which satisfies the wants and needsof the consumer. That product may be tangible which iscommonly available on the open market or intangibleproducts which are not available in open market processof producing this product is called as production process,from the raw material which converted into finished goodsand reach the consumer hand all the consumers all theprocess which is done in between is explained wholemarketing in some cases a product which reaches allconsumers and at a stage the company will face thedecline stage at that time new product is much moreimportant to make the company to live in the marketthis process is called new product development thisprocess is inter depended with the product design



PRESENTATION ON ADVERTISEMENT

1. II B.COM CM, Sri Krishna College of Arts and Science, Coimbatore.2. II B.COM CM, Sri Krishna College of Arts and Science, Coimbatore.3. II B.COM CM, Sri Krishna College of Arts and Science, Coimbatore.

AnjanaDas. M1 Anagha .S. Kumar2

IntroductionAdvertising is an audio or visual form of marketingcommunication that employs an openly sponsored,nonpersonal message to promote or sell a product,service or idea. Sponsors of advertising are oftenbusinesses who wish to promote their products orservices. Advertising is differentiated from public relationsin that an advertiser usually pays for and has controlover the message. It is differentiated from personal sellingin that the message is nonpersonal, i.e., not directed toa particular individual.

Advertising is communicated through various massmedia, including old media such as newspapers,magazines, Television, Radio, outdoor advertising ordirect mail; or new media such as search results, blogs,websites or text messages. The actual presentation ofthe message in a medium is referred to as anadvertisement or "ad".

Advertising is communicated through various massmedia, including old media such as newspapers,magazines, Television, Radio, outdoor advertising ordirect mail; or new media such as search results, blogs,websites or text messages. The actual presentation ofthe message in a medium is referred to as anadvertisement or "ad". Commercial ads often seek togenerate increased consumption of their products orservices through "branding," which associates a productname or image with certain qualities in the minds ofconsumers. On the other hand, ads that intend to elicitan immediate sale are known as direct responseadvertising. Non-commercial advertisers who spendmoney to advertise items other than a consumer productor service include political parties, interest groups,religious organizations and governmental agencies. Non-profit organizations may use free modes of persuasion,such as a public service announcement. Advertising mayalso be used to reassure employees or shareholdersthat a company is viable or successful.

Modern advertising was created with the techniquesintroduced with tobacco advertising in the 1920s, mostsignificantly with the campaigns of Edward Bernays,considered the founder of modern, "Madison Avenue"advertising. There have been increasing efforts to protectthe public interest by regulating the content and the

influence of advertising. Some examples includerestrictions for advertising alcohol, tobacco or gamblingimposed in many countries, as well as the bans aroundadvertising to children, which exist in parts of Europe.

Functions of Advertisement• Identifying brands• Information• Persuasion• Previewing new trends• Demand• Customer base• Pricing

Objectives of Advertisement• Preparing ground for new product• Creation of demand• Facing the competition• Creating or enhancing goodwill• Informing changes to customers• Barring new entrants

Modes of AdvertisingTV AdvertisingA television advertisement is a span of televisionprogramming produced and paid for by an organization,which conveys a message, typically to market a productor service. Advertising revenue provides a significantportion of the funding for most privately owned televisionnetworks.

The vast majority of television advertisements todayconsist of brief advertising spots, ranging in length froma few seconds to several minutes. Advertisements ofthis sort have been used to promote a wide variety ofgoods, services and ideas since the beginning oftelevision.

Newspaper AdvertisingNewspaper display advertising is a form of newspaperadvertisement - where the advertisement appearsalongside regular editorial content. Display ads aregenerally used by businesses and corporations towardspromotion of their goods and services and are generallyfor larger budget clients.

Shimshitha. S3



Newspaper display ads are different from the regular“display ads” terminology, which is commonly referredto as advertisements placed on the internet in bannerand other rich media format. These ads can span acrossmultiple columns - and can even cover full page, halfpage, quarter page or other custom sizes. They aredesigned in high resolution colored and black/whiteformats providing higher visibility for the mass audiencesof newspapers. For many major newspapers in developingmarkets, display ads play a significant role in subsidizingthe cost of the published newspaper.

Display ads appear in all sections of the newspaperexcept the editorial page, obituary page, and classifiedsection.

Magazine AdvertisingWhen it comes to magazine advertising, most peoplethink of the large, glossy, national publications full of bigbrand advertisers. And it may seem like your ownbusiness doesn’t belong alongside the “big guys,”especially if you don’t sell your product outside a one-hundred-mile radius—or even outside of your own state.But that’s just not the case.

No matter what magazine you choose to advertise in,your message will need to be strong and eye-catching.You only have a few seconds to grab the readers’ attentionand pull them in to read the rest of the advertising. Abold graphic and an interesting headline will help youmake a connection with readers right off the bat. Thegraphic and the headline must come together to pinpointa problem and offer a solution to the reader.

Radio AdvertisingRadio advertisements or “spots” are available when abusiness or service provides valuable consideration,usually cash, in exchange for the station airing their spotor mentioning them on air.

In the US, commercial radio stations make most of theirrevenue selling “airtime” to advertisers. The United StatesFederal Communications Commission (FCC),established under the Communications Act of 1934,regulates commercial broadcasting, and the lawsregarding radio advertisements remain relativelyunchanged from the original Radio Act of 1927, enactedto deal with increasing problems of signal interferenceas more and more stations sprung up around thecountry.

Internet AdvertisingOnline advertising, also called online marketing or Internetadvertising or web advertising, is a form of marketingand advertising which uses the Internet to deliverpromotional marketing messages to consumers. Itincludes email marketing, search engine marketing(SEM), social media marketing, many types of displayadvertising (including web banner advertising), and mobileadvertising.

Like other advertising media, online advertising frequentlyinvolves both a publisher, who integrates advertisementsinto its online content, and an advertiser, who providesthe advertisements to be displayed on the publisher’scontent.

Other potential participants include advertising agencieswho help to generate and place the ad copy, an ad serverwhich technologically delivers the ad and tracksstatistics, and advertising affiliates who do independentpromotional work for the advertiser. Online advertising iswidely used across virtually all industry sectors. Manycommon online advertising practices are controversialand increasingly subject to regulation.



ADVERTISEMENT

1. II B.COM CM, Sri Krishna Arts and Science College, Coimbatore.2. II B.COM CM, Sri Krishna Arts and Science College, Coimbatore

Akhila P. Thomas2Hima C. S1

IntroductionAdvertising is an audio or visual form of marketingcommunication that employs an openly sponsored, nonpersonal message to promote or sell a product, serviceor idea. Sponsors of advertising are often businesseswho wish to promote their products or services.Advertising is differentiated from public relations in thatan advertiser usually pays for and has control over themessage. It is differentiated from personal selling in thatthe message is non personal, i.e., not directed to aparticular individual. Advertising is communicatedthrough various mass media, including old media suchas newspapers, magazines, Television, Radio, outdooradvertising or direct mail; or new media such as searchresults, blogs, websites or text messages. The actualpresentation of the message in a medium is referred toas an advertisement or “ad”.

Commercial ads often seek to generate increasedconsumption of their products or services through“branding,” which associates a product name or imagewith certain qualities in the minds of consumers. On theother hand, ads that intend to elicit an immediate saleare known as direct response advertising. Non-commercial advertisers who spend money to advertiseitems other than a consumer product or service includepolitical parties, interest groups, religious organizationsand governmental agencies. Non-profit organisationsmay use free modes of persuasion, such as a publicservice announcement. Advertising may also be used toreassure employees or shareholders that a company isviable or successful.

Modern advertising was created with the techniquesintroduced with tobacco advertising in the 1920s, mostsignificantly with the campaigns of Edward Bernays,considered the founder of modern, “Madison Avenue”advertising

Advertisers influence our emotions by techniques thatinclude stereotyping and targeting the audienceaccording to who we are. Emotions are influenced bythings such as this our occupation, beliefs, personality,self esteem, lifestyle, relationships, friends, how we lookand what we wear. Advertisers use methods that attractattention

In 2015, the world spent an estimate of US$592.43 billionon advertising. Internationally, the largest (“big four”)advertising conglomerates are Interpublic, Omnicom,Publics, and WPP. For example, to make a burger looktasty in advertising, it may be painted with brown foodcolours, sprayed with waterproofing to prevent it fromgoing soggy and sesame seeds may be super-glued inplace. Advertising can bring new customers and moresales for the business. It can be expensive but can helpmake a business make more money.

Geo magazine

Fig. 1 : Hot air balloon displays advertising for GEO magazine

Advertising may be categorized in a variety of ways,including by style, target audience, geographic scope,medium, or purpose. For example, in print advertising,classification by style can include display advertising(ads with design elements sold by size) vs. classifiedadvertising (ads without design elements sold by theword or line). Advertising may be local, national or global.An ad campaign may be directed toward consumers orto businesses. The purpose of an ad may be to raiseawareness (brand advertising), or to elicit an immediatesale (direct response advertising).

Types of mediaVirtually any medium can be used for advertising.Commercial advertising media can include wall paintings,billboards, street furniture components, printed flyers andrack cards, radio, cinema and television adverts, web



banners, mobile telephone screens, shopping carts, webpop ups, skywriting, bus stop benches, human billboardsand forehead advertising, magazines, newspapers, towncriers, sides of buses, banners attached to or sides ofairplanes (“logo jets”), in-flight advertisements on seatback tray tables or overhead storage bins, taxicab doors,roof mounts and passenger screens, musical stageshows, subway platforms and trains, elastic bands ondisposable diapers, doors of bathroom stalls, stickerson apples in supermarkets, shopping cart handles, theopening section of streaming audio and video, posters,and the backs of event tickets and supermarket receipts.Any place an “identified” sponsor pays to deliver theirmessage through a medium is advertising.

Types of advertisementAdvertising happens in many different ways. Manyproducts are advertised on television, although not allchannels permit advertising. The advertisements usuallyappear during breaks between a television show. Theyare usually for products, other television shows or moviesand are not normally much longer than 30 seconds.Some radio stations have audio advertisements that playbetween programs.An advertisement for a movie is called a trailer. It showsa short collection of clips from the movie, and showsthe date it will be released in cinemas.Advertising also takes place on websites. These mayappear as “banner ads” or “popups”. They are often stillimages or flash animations. The owner of the websitewill get money when a user clicks on the advertisement.Sometimes they will get a percentage of the money ifthey buy a product.

Billboards advertise products on highways and citystreets. These may simply be freestanding billboards ormay be part of street furniture such as a bus shelter.Buses and taxis are often covered in adverts, while budgetairlines sometimes allow advertising inside their planes.Adverts also appear in newspapers, magazines andsports programs. Many stadiums have adverts set aroundthem. Sports teams, tournaments, television programsand public events may have a sponsor who is the mainor sometimes only advertiser.

Types• Out-door Advertisement• In- door Advertisement• TV Advertisement• Radio Advertisement• National Advertisement• International Advertisement• Retail Advertisement• Wholesale Advertisement

TelevisionTelevision advertising is one of the most expensive typesof advertising; networks charge large amounts forcommercial airtime during popular events. The annualSuper Bowl football game in the United States is knownas the most prominent advertising event on television -with an audience of over 108 million and studies showingthat 50% of those only tuned in to see theadvertisements. The average cost of a single thirty-second television spot during this game reached US$4million & a 60-second spot double that figure in 2014.Virtual advertisements may be inserted into regularprogramming through computer graphics. It is typicallyinserted into otherwise blank backdrops or used toreplace local billboards that are not relevant to the remotebroadcast audience. More controversially, virtualbillboards may be inserted into the background wherenone exist in real-life. This technique is especially usedin televised sporting events. Virtual product placementis also possible. An infomercial is a long-formattelevision commercial, typically five minutes or longer.The word “infomercial” is ateau of the words “information”and “commercial”. The main objective in an infomercialis to create an impulse purchase, so that the target seesthe presentation and then immediately buys the productthrough the advertised toll-free telephone number orwebsite. Infomercials describe, display, and oftendemonstrate products and their features, and commonlyhave testimonials from customers and industryprofessionals.

RadioRadio advertisements are broadcast as radio waves tothe air from a transmitter to an antenna and a thus to areceiving device. Airtime is purchased from a station ornetwork in exchange for airing the commercials. Whileradio has the limitation of being restricted to sound,proponents of radio advertising often cite this as anadvantage. Radio is an expanding medium that can befound on air, and also online. According to Arbitral, radiohas approximately 241.6 million weekly listeners, or morethan 93 percent of the U.S. population.

Fig. 2



OnlineOnline advertising is a form of promotion that uses theInternet and World Wide Web for the expressed purposeof delivering marketing messages to attract customers.Online ads are delivered by an ad server. Examples ofonline advertising include contextual ads that appear onsearch engine results pages, banner ads, in pay perclick text ads, rich media ads, Social network advertising,online classified advertising, advertising networks ande-mail marketing, including e-mail spam. A newer formof online advertising is Native Ads; they go in a website’snews feed and are supposed to improve user experienceby being less intrusive. However, some people arguethis practice is deceptive.

Fig. 3

Domain namesDomain name advertising is most commonly donethrough pay per click web search engines, however,advertisers often lease space directly on domain namesthat generically describe their products. When an Internetuser visits a website by typing a domain name directlyinto their web browser, this is known as “direct navigation”,or “type in” web traffic. Although many Internet userssearch for ideas and products using search engines andmobile phones, a large number of users around the worldstill use the address bar. They will type a keyword intothe address bar such as “geraniums” and add “.com” tothe end of it. Sometimes they will do the same with“.org” or a country-code Top Level Domain (TLD such as“.co.uk” for the United Kingdom or “.ca” for Canada).When Internet users type in a generic keyword and add.com or another top-level domain (TLD) ending, itproduces a targeted sales lead. Domain name advertisingwas originally developed by Jingo (later known as AppliedSemantics), one of Google’s early acquisitions.

Product placementsCovert advertising is when a product or brand is embeddedin entertainment and media. For example, in a film, themain character can use an item or other of a definite

brand, as in the movie Minority Report, where TomCruise’s character John Anderton owns a phone withthe Nokia logo clearly written in the top corner, or hiswatch engraved with the Bulgari logo. Another exampleof advertising in film is in I, Robot, where main characterplayed by Will Smith mentions his Converse shoesseveral times, calling them “classics”, because the filmis set far in the future. I, Robot and Space balls alsoshowcase futuristic cars with the Audi and Mercedes-Benz logos clearly displayed on the front of the vehicles.Cadillac chose to advertise in the movie The MatrixReloaded, which as a result contained many scenes inwhich Cadillac cars were used. Similarly, productplacement for Omega Watches, Ford, VAIO, BMW andAston Martin cars are featured in recent James Bondfilms, most notably Casino Royale. In “Fantastic Four:Rise of the Silver Surfer”, the main transport vehicleshows a large Dodge logo on the front. Blade Runnerincludes some of the most obvious product placement;the whole film stops to show a Coca-Cola billboard.

PrintPrint advertising describes advertising in a printedmedium such as a newspaper, magazine, or tradejournal. This encompasses everything from media witha very broad readership base, such as a major nationalnewspaper or magazine, to more narrowly targeted mediasuch as local newspapers and trade journals on veryspecialized topics. One form of print advertising isclassified advertising, which allows private individuals orcompanies to purchase a small, narrowly targeted adpaid by the word or line. Another form of print advertisingis the display ad, which is generally a larger ad withdesign elements that typically run in an article sectionof a newspaper.

OutdoorBillboards are large structures located in public placeswhich display advertisements to passing pedestrians andmotorists. Most often, they are located on main roadswith a large amount of passing motor and pedestriantraffic; however, they can be placed in any location withlarge amounts of viewers, such as on mass transitvehicles and in stations, in shopping malls or officebuildings, and in stadiums. The form known as streetadvertising first came to prominence in the UK by StreetAdvertising Services to create outdoor advertising onstreet furniture and pavements. Working with productssuch as Reverse Graffiti, air dancers and 3D pavementadvertising, for getting brand messages out into publicspaces. Sheltered outdoor advertising combines outdoorwith indoor advertisement by placing large mobile,structures (tents) in public places on temporary bases.The large outer advertising space aims to exert a strongpull on the observer; the product is promoted indoors,



where the creative decor can intensify the impression.Mobile billboards are generally vehicle mountedbillboards or digital screens. These can be on dedicatedvehicles built solely for carrying advertisements alongroutes preselected by clients, they can also be speciallyequipped cargo trucks or, in some cases, large bannersstrewn from planes. The billboards are often lighted; somebeing backlit, and others employing spotlights. Somebillboard displays are static, while others change; forexample, continuously or periodically rotating among aset of advertisements. Mobile displays are used forvarious situations in metropolitan areas throughout theworld, including: target advertising, one-day and long-term campaigns, conventions, sporting events, storeopenings and similar promotional events, and bigadvertisements from smaller companies.

Point-of-saleIn-store advertising is any advertisement placed in a retailstore. It includes placement of a product in visiblelocations in a store, such as at eye level, at the ends ofaisles and near checkout counters (a.k.a. POP – pointof purchase display), eye-catching displays promotinga specific product, and advertisements in such placesas shopping carts and in-store video displays.

NoveltiesAdvertising printed on small tangible items such as coffeemugs, T-shirts, pens, bags, and such is known as noveltyadvertising. Some printers specialize in printing noveltyitems, which can then be distributed directly by theadvertiser, or items may be distributed as part of a crosspromotion, such as ads on fast food containers.

Celebrity brandingThis type of advertising focuses upon using celebritypower, fame, money, popularity to gain recognition fortheir products and promote specific stores or products.Advertisers often advertise their products, for example,when celebrities share their favorite products or wearclothes by specific brands or designers. Celebrities areoften involved in advertising campaigns such as televisionor print adverts to advertise specific or general products.The use of celebrities to endorse a brand can have itsdownsides, however; one mistake by a celebrity can bedetrimental to the public relations of a brand. Forexample, following his performance of eight gold medalsat the 2008 Olympic Games in Beijing, China, swimmerMichael Phelps’ contract with Kellogg’s was terminated,as Kellogg’s did not want to associate with him after hewas photographed smoking marijuana. Celebrities suchas Britney Spears have advertised for multiple productsincluding Pepsi, Candies from Kohl’s, Twister, NASCAR,and Toyota.

Fig. 4

Aerial

Fig. 5

Aerial plane sing aircraft, balloons or airships to createor display advertising media. Skywriting is a notableexample.An Allegiant Air aircraft in the special Blue Man Grouplivery.

PurposesAdvertising is at the front of delivering the propermessage to customers and prospective customers. Thepurpose of advertising is to convince customers that acompany’s services or products are the best, enhancethe image of the company, point out and create a needfor products or services, demonstrate new uses forestablished products, announce new products andprograms, reinforce the salespeople’s individualmessages, draw customers to the business, and to holdexisting customers.

Sales promotions and brand loyaltySales promotions are another way to advertise. Salespromotions are double purposed because they are usedto gather information about what type of customers onedraws in and where they are, and to jump start sales.Sales promotions include things like contests andgames, sweepstakes, product giveaways, samplescoupons, loyalty programs, and discounts. The ultimategoal of sales promotions is to stimulate potentialcustomers to action.

One way to create brand loyalty is to reward consumersfor spending time interacting with the brand. This methodmay come in many forms like rewards card, rewardsprograms and sampling.



TheoryHierarchy-of-effects modelsVarious competing models of hierarchies of effects attempt to provide a theoretical underpinning to advertisingpractice.

ConclusionGood advertising yields positive shift demands for products and services and advertising elasticity of demand. In ourargument, we defined what should be considered new advertising and advertisement; we determined that technologyis the driving force behind an arms race between consumers and advertisers. We determined that the prevalence ofconsumer-generated advertising and fan culture, which are forms of advertisement, have impacts on both consumersand companies. We determined that consumers are gaining more control over advertisers, which forces companiesto change their advertising strategies.



SHIFT IN FOCUS OF MICROFINANCE INSTITUTIONS AND ITS IMPACTON RURAL CUSTOMERS

1. Asst Professor, School of Management – Sri Krishna College of Technology,Coimbatore.

AbstractBanks and Financial Institutions disperse a variety of loans to its customers according to their requirements. Traditionalbanking companies show interest towards long term loan rather than the short term loans to its small customers. MicroFinancial institutions are immense due to its presence across the country side as their business objective is to serveunemployed and people with less income to cater their financial needs. The microfinance institutions offer unsecuredloans to poor people for their livelihood and entrepreneurial opportunities, but the cost to administer such small loansincrease the operating cost, i.e., accounting, tax filing, salary and time to process, need to employ more people to dotheir routine activities, the inherent risk in providing unsecured loans leads to increase in Non-Performance Assets(NPA) and the people’s expectation of less regulations for their financial activities paves way to micro financial institutionsto focus on customers to their preference. The shift in their focus towards the big customers is evident from themigration of the investor base in urban from rural in the recent past and it had made dents in the expectations of therural population.

S. Periyasamy1

IntroductionThe origin of the microfinance concept with the name “Grameen Bank” introduced by a Noble Prize winner MuhammadYunus of Bangladesh. The National Bank for Agriculture and Rural Development (NABARD) gave birth to themicrofinance business in India.Micro-finance institutions in India offer tiny loans to the needy, those who do nothave access to conventional banking system. This is similar to banking service provided to cater the unemployed orindividuals with low income or group of people who have no means of access to financial services in their region. Thewidespread presence of banks, commercial banks from Public and Private across urban India crossed over 90,000branches as on March 2015 from 49000 branches in March 2005. Among these banks, Public Sector Banks alonehad made their presence over 60% of its growth during the past decade.

The irony is that people living below the poverty line in India had very less access to banking services such asSavings Account, Loans and Insurance. Though the Indian financial system is robust, the lack of infrastructure tofacilitate services to poor, the country still need to look at 233 million (more than 19% of the Indian population) whoare yet to financial included into the system. As per the Census Report 2011 of India nearly 75% of rural householdshave no access to banking services, whereas 25% of the urban population is yet to receive basic banking services.The table shows the difference between the conventional banking system and the Microfinance institution and itsoperations in line with the objective of its formation.

Table - 1 : Difference between Banking and Microfinance Institutions operating in India

Focus

CustomerAcquisition

Products

Area Commercial bank Microfinance Institution

Profitability, Market Share, All segments ofcustomer

Banks mostly enroll customer through thebranches.

Banks have a basket of retail product that coversavings, credit remittance, etc. Credit from banksfor BPL-like families is predominantly of INR25,000 and above; other features are varied rateof interest and varied repayment period.

A sustainable credit system for economicallydisadvantaged people.

MFIs have stage-wise strategy-village meetings,formal groups, training of groups of members onfinancial management and then providing credit-line.

MFIs specialize in credit. The product is predominantlya graduated credit line with recovery by 50 WeeksEMI.MFI credit is predominantly an average of INR15,000 minimum of INR 3,000 to a maximum of INR50,000 (housing loan up to INR 1.25 lacks.)



Procedures

CustomerService Mode

Source ofFunds

Cost of Capital

Location ofOperation

Cost ofOperation

RiskManagement

Mutual Interest

Ownership

Nature ofInstitution

Financial Goal

Banks have universally identical procedures aswell as for internal management. Theprocedures are primarily multi-tired, record-oriented and resultantly, lengthy at times.

Customer access branches.

Combination of owning and Borrowed Capital

Average cost of Capital for Bank is 8 percent

Banks has a formula to determine viability of abranch. This determines the availability of thebank in geographical location.

Banks have mechanism that cross subsidiesoperating cost of several sets of services andproducts. Branch viability and business per staffis the strategic area of focus. The cost-incomeratio of Banks is about 42 %.

Banks have advanced risk managementsystems that are imposed as well as self-deserved. The risk management system isbased on data.

Banks are interested in MFIs because suchcredit lines enable banks to achieve the ‘prioritysector’ obligation.

Banks in India ‘owned’ by government (asshareholder and policy maker), regulator andprivate investor.

Financial Institution

Profit maximization

MFIs have a universally identical procedure for theircustomer for internal management. Features of theprocedure are that these are short and simple forcustomer and for internal recording, but are elaborateon verbal processes with customers.

MFIs access customer at the location of theirinhabitation.

MFIs operated on Borrowed funds

Average cost of capital for MFIs is 14 %

MFIs operate with families that do not have steadyand small credit lines from banks. They do notoperate on the basis of geographical location.

MFIs incur high costs on manpower. Business perstaff cannot grow beyond a point because the qualityof customer contact is the key to higher repaymentrate in micro-credit. MFI operations on customerservicing mechanisms are reflected in cost-incomeratio of MFIs that is around 62%

MFIs have completely different approaches to riskmanagement. This is through continuous contactswith the customer and by periodically re-training ofcustomer and off-field staff. Performance incentivesto customers and to field staff are another set of toolsfor risk management.

Ownership of MFIs lies with the developmentprofessionals and social investor who invest withsocial objectives.

Ownership of MFIs lies with the developmentprofessionals and social investors who invest insocial objectives.

Service Institution

Surplus to sustain

Source: Article “The Fourth Milestone” written by a banker Mr R.K.Mukherjee published in http://pratapavineet.blogspot.in/

Objective of Micro Finance InstitutionsThe Government of India and Reserve Bank of India’s recent initiative to bring all poor people into the financial netsuch as PradhanMantri Jan DhanYojana, Mudra Bank and launch of specialized banks such as licensing 11 PaymentBanks on August 2015 and 10 Small Finance Banks licensed in Sep 2015 out of which 8 are Microfinance institutions.The origin of Microfinance in India dated back to the 1970’s with the emergence of Self-Help Groups (SHG’s) whichsaw exponential growth during 1990’s where the private sector organizations started funding microfinance companiesafter opening up of the economy to the world. The growth of Microfinance companies touched highest rate between2005-2010. The objective of the formation of microfinance companies in India is to provide an opportunity to becomeself-sufficient by means of small business units, small and marginal farmers, micro and small industries, andentities in the unorganized sector. These companies may only can lend small loans and insurance to the needy butnot to collect deposits. The types of loans offered and its specifications are given below. The interest charged by themicrofinance companies is a slightly higher side comparing traditional banking companies, which serves as a breadand butter for them. This article reveals the administration procedures adopted by micro-financial institutions tosustain and their contribution to the society, helping rural households and entrepreneurs with low income and lowasset base.



Growth of Microfinance Institutions in IndiaThe growth of Microfinance institutions in India is exponential. As on March 31, 2016 there are 67 MicrofinanceInstitutions having 9669 branches, employed 85888 persons serving 99% woman clients across India. Most of theMicrofinance market to the extent of 88% is in the hands of NBFC Microfinance Institutions with the aggregate ofRs.532.3 billion, which is a48% Annual Growth Rate when it is Compounded (CAGR). This growth is realized whenthe Loans provided to its customers surge from Rs.289.05 billion to Rs.532.3 billion in the year 2015 alone. TheMicrofinance institutions consolidated their operations due to regulations put in place, the institutions operated inthe industry came down from 70 in the year 2010 to 56 at the end of 2015 and early 2016. The growth in terms ofbranch network and employees was slower during the FY 2011 to FY 2013 and started surging upside in the FY 14and attained 16% growth in branch expansion and 27% in employee base across the industry.

Shift in Microfinance Institutions Customer FocusThere can be several reasons why Microfinance institutions started focusing on urban population such as Theoperational cost and efficiency to administer the loans is higher comparing long term loans, the growth of demandfrom urban population due to interest charged by Microfinance institutions are comparatively lower than the PrivateBanking Institutions, the risk involved in distributing unsecured loans which amounts to increase in Non-PerformanceAssets stands at 7.4% as on March 2015 and the impact ofAndhra Pradesh Microfinance Crisis, 2010 and increasein Loan cap to Rs.1,00,000 from Rs.50,000 from April 2015.

Source: Report of Bharat Microfinance, 2015 Fig. 1

Introduction of Microfinance Institutions (Development and Regulation) Bill 2012The Microfinance institutions are governed by lesser regulations comparing conventional banking institutions beforethe bust of Andhra Pradesh Microfinance Crisis 2010 that most of the rural people availed loans from multipleMicrofinance institutions which lead to burden on repayment and more than 60 persons committed suicide due toindebtedness. Soon after the issue The Andhra Pradesh Government came out with Microfinance Institutions (Regulationof Money Lending) Act, 2010 to stop putting pressure on loan borrowers. The new regulation banned the weeklycollection of monthly and stringent policies in issuance of loans such as Government approval for loans for thesecond loan for the customer. This paved way for a downward surge in repayment from 99% to 20% and mostMicrofinance institutions either moved towards urban or closed their businesses.

The outcome of this crisis paved way for formation of new regulation Microfinance Institutions (Development andRegulation) Bill 2012 under the governance of RBI, which suggested that the non-corporate MFIs should be regulatedby individual state governments.



Fig. 2

Efficiency in OperationsMicrofinance institutions are in the need to generate their profits out of operational efficiency as the regulationrestricts microfinance institutions having loan portfolios exceed Rs.100 crores to the tune of not to charge morethan 10% and rest to charge a maximum of 12% over the cost of loans taken from the banks for their lendingpurposes while fixing the loan price for their small borrower. The vital components for unsecured loan i.e., ProcessingFees not exceeding 1% of the gross loan amount is miniscule and takes more operational cost comparing longterm loan provided by the banking institutions.

Fig. 3Source: MFIN Micrometre, May 2016

Change in Loan PortfolioThe loans are offered to urban borrower, if the income is not exceeding Rs.1,60,000 whereas for a rural borrower itis Rs.1,00,000. However, the loan amount remains constant for both the borrowers i.e., Rs. 60,000 on the first cycleand Rs.1,00,000 during the consecutive cycles. The impact of the same is evident from the growth of loans offeredto Trade and Services, which is the base for urban people. The Microfinance institutions started small businesspopulation in urban areas who look for short term unsecured loan for their day to day business transactions.



ConclusionThe role of Microfinance institutions in India isimmeasurable. The initiatives of the Government of Indiato make financial inclusion across the nation irrespectiveof the region, gender, wealth and other demographicalfactors helped move the economy towards the growth.There are initiatives faced changes due to technologicaladvancement and growth of hybrid products and changein customer’s financial preference, still serving itspurpose. The increase in operating costs, stringentregulations, socio-economic factors, competition andoperational efficiency of these institutions are to be takeninto consideration while assaying their performance. Itis evident from the above factors that the microfinanceinstitutions are forced to look at borrowers who can fulfilthe objective of the institution i.e., reduction inadministration cost, higher interest, faster repayment,less risk in loan disbursement and out performingcompetition to have a steady growth in the industry. Thisdiversion also indicates that every institution will focuson their growth then the service to society which forcesthe apex body to bring out regulations time to time andfollow-up to keep the economy in the growing phase.“Change is inevitable”, is the universal truth applicableto any entity in this industrial world. Upon realisation,the government can manage the economy withprosperity.

REFERENCE• www.microfinanceinfo.com, article “Microfinance

Products”• www.livemint.com, article “Indian microfinance

institutions have just busted a myth” dated Oct 192015.

• www.indiamicrofinance.com, article “Top 10 MFI’s inIndia 2015-16 List released” dated Oct 09, 2015

• www.wikipedia.com, sub topic “Micro Finance on theIndian Subcontinent” under Microfinance. TaraS.Nair& Ajay Tankha” in their report “Inclusive FinanceIndia Report 2014”, published by Oxford UniversityPress.

• A report on “Evolving Landscape of MicrofinanceInstitutions in India”, jointly published by Ernst &Young LLP in association with ASSOCHAM, Indiadated July 2016.

• www.quora.com, article title “What is the differencebetween microfinance and commercial banks?”, byVishwasVirani, Institute of Rural Management,Anand, Gujarat - India dated Aug 24, 2016.

• www.answers.yahoo.com/question/index?qid =1006031904963 CRISIL, Press Release“Microfinance pools makes a big splash, grow 125%”dated May 18, 2016.

• www.thewire.in, article “Why microfinance isbecoming a bad word all over again”, byShri.ChanderSutaDogra, dated January 15, 2016

• ICRA Limited, Financial Sector Reporting“Microfinance Institutions: Industry Outlook andPerformance of Microfinance Institutions”, datedJanuary 2016.

• Annual Report 2015-16, Microfinance InstitutionsNetwork Annual Report 2015-16, Bharat Microfinance



CHALLENGES FACED BY ECOPRENEURS

1. Assistant Professor, P.K.R. Arts College for Women, Gobi,Tamilnadu.

AbstractIn this growing environment problems faced by the world we realize it is time to pay attention to the role of entrepreneurscan play in solving our environmental problems. Scholars agree that entrepreneurs can help preserve the ecosystems,counteract on the climate change, improve water supply, maintain biodiversity, and reduce environmental degradationand deforestation (Cohen and Winn, 2007; Dean and McMullen, 2007). Ecopreneurship is characterized by somefundamental aspects of entrepreneurial activities that are oriented less towards management systems or technicalprocedures and focused more on the personal initiative and skills of the entrepreneurial person or team to realizemarket success with environmental innovations. This paper focuses on how to harness the innovative potential ofenvironmentally conscious entrepreneurs, called ecopreneurs, to encourage more startups that would create theenvironmental technologies needed to address our environmental problems. The term 'Ecopreneurship' is acombination of two words, 'ecological' ('eco') and 'entrepreneurship'. Ecopreneurship can be roughly defined as'entrepreneurship through an environmental lens'.. There are various challenges faced by these eco-friendlyentrepreneurs. Some of the challenges are highlighted in this paper.

Key words: Entrepreneurs, Ecopreneurship, ecopreneurs

A.Catherine Diana1

Introduction“Social entrepreneurship, we believe, is as vital to theprogress of societies as isentrepreneurship to theprogress of economies, and it merits more rigorous,serious attention than it has attracted so far.”

- Roger L. Martin and Sally Osberg,The Stanford Social Innovation Review

Ecopreneurship deals with “value creation throughenvironmental innovations and products, exceeding thestart-up phase of a company”, to which he adds theattributes of “market-oriented” and “personality-driven”.

Entrepreneurs are individuals who are responsible for allthe risks and rewards of the business service or productwhich they have offered to the market. In the last fewyears as issues of climate change, energy andsustainability have started to impact the planet adverselyand the market failures of capitalism were blamed fortheir role in the global warming, a new class ofentrepreneurship has sprung up to address the challenge– Social entrepreneurship.

EcopreneurshipThe word ‘entrepreneur’ was derived from French andhas taken to mean ‘taking the initiative to bridge’. Anentrepreneur is a catalyst who brings together money,people, ideas and resources. Whereas all entrepreneursdeal with bridging activities between suppliers andcustomers to create and change markets, ecopreneursdiffer from conventional entrepreneurs in that they also

build bridges between environmental progress and marketsuccess.

Ecopreneurship can be seen as one of several ways ofdoing business in a more environmentally friendly way.It is conceptualized as the intersection ofentrepreneurship theory and sustainability studies.

Definitions of EcopreneurshipFor the purposes of this paper, ecopreneurship meansentrepreneurial action that contributes to preserving thenatural environment (Pastakia, 1998a; Schaper, 2005).Ecopreneurs are therefore entrepreneurs who found theirbusinesses based on the principle of sustainability(Kirkwood and Walton, 2010). They are a new breed ofeco-conscious change agents who are redefining theway business is conducted and are introducing eco-friendly ideas and innovations in the marketplace(Pastakia, 1998b). Ecopreneurship is distinguished fromsocial entrepreneurship which focuses on enhancing thesocial wellbeing of the society (Zahra, Gedajlovic,Neubaum, Shulman, 2009).

Ecopreneurship can be described as an innovative,market-oriented and personality-driven form of valuecreation through environmental innovations and productsexceeding the start-up phase of a company. This widedefinition of ecopreneurship takes entrepreneurs as animportant subgroup of ecopreneurs, into account asentrepreneurs represent actors inside an organizationwho substantially change and shape the environmentaland business growth development of an existing



company. Ecopreneurship is thus distinguished fromother forms of corporate environmental development bythe company’s vivid commitment to environmentalprogress and its strong desire for business growth.

Social

Economic Environment

Social Entrepreneurs

Environment Entrepreneurs

Entrepreneur

Ecopreneurs

Fig. 1

The above picture tries to classify the types of entrepre-neurs in general. For this purpose we have consideredSocial, Economic and environment as three aspects.One who focus on the challenges and issues from Soci-ety and establishes his own business is said to be asocial or societial entrepreneur. The one who focuseson the constraints in the environment is EnvironmentEntrepreneur

Cleaner production andindustrial ecology

Water management Resources andwaste

management

Development and application of tools

and instruments

Internationalcooperation

Sustainable resourcesmanagement

Fig. 2

Ecopreneurship emerges from Environment challenges.Waste management, Water management, Internationalcooperation, Industrial Ecology and many morechallenges are the opportunities for ecopreneurs.Resource management is an area where everybusinessmen and every other human being has ample

opportunities. Thus the picture below shows theenvironmental impact from which ecopreneurs canemerge their business ideas.

Ecopreneurship offers services and products that do nothave an adverse effect on the environment. They generatevalue through their offerings and contribute tosustainability. A green entrepreneur is an individual whostarts a for-profit business that does not harm theenvironment either by the nature of the product or byadopting environment friendly policies and practices inhis business. (Isaak, 2002).

Principles of EcopreneurshipThere are some basic principles and measurements thatcan help guide the practice of Ecopreneurship and providesome basic standards of principle to this emerging group.1. Energy and Resource Use Efficiency and

Maximization2. Ecosystem services3. Natural Step Principles4. Eco-Efficiency and Eco-Effectiveness

Challenges facedEco-dedicated entrepreneurs differed from the othergroup of Entrepreneurs in the significance they attachedto ecological issues. Their high level of environmentalconsciousness was reflected in expressed opinions andattitudes. They consistently alluded to their responsibilityto the environment and its conservation for followinggenerations

Ecology is absolutely importantAll persons in this group pointed out that theirenvironmental awareness had been developed sincechildhood from within their families. Their interest inecological topics led to an active gathering of informationparticularly related to their area of business operations.As a result, their knowledge about how to act in the newventure in order to improve their environmentalperformance was much greater than was the case inthe other group of Entrepreneurs.

Ecological considerations played an important role fromthe very beginning and remained an integral part of eachof their businesses, but, despite their environmentallyfriendly attitudes, these entrepreneurs were still awareof the limits of ecological issues as a business start-uptool, they repeatedly pointed to the necessity to focuson business essentials within the start-up process:

Starting a new business venture with an extensiveecological orientation is not easy and often is even moredifficult than starting a conventional business enterprise.Only the firm conviction of the entrepreneurial individualleads to this kind of endeavor. As the individual is the



most important factor in creating a sustainable newventure, starting points for intervention are limited. Inturn, it might be promising to encourage and supportthose ecologically minded individuals to convert theirconvictions into sustainable start-ups. Eco-dedicatedstart-ups take higher risks and face more marketresistance than do conventional start-ups; therefore, theyare in need of special advisory and financial support.

Eco-open start-upsIn eco-open start-ups, goods, services and operationalprocedures are not designed according to environmentalneeds. Entrepreneurs in this group deal only with selectedenvironmental issues. They either enlarge their range ofproducts or services with environmentally acceptablefeatures in order to target an additional customersegment or solve ecological problems through specialmeasures. However, eco-open start-up entrepreneursoften reject the adoption of more eco-friendly measuresbecause of the assumed higher costs.

Entrepreneurs expect that additional measures do notfit easily with existing operating procedures. In general,they assess the feasibility of environmentalimprovements to business practices as being limited.Moreover, they tend not to anticipate market opportunitiesthat would encourage them to opt for moreenvironmentally sound business practices. For example,a wholesale electrical appliance trader offered a so-called‘eco-line’ in its range of white goods in addition toconventional goods. These eco-line products save energyand water. The disposal of used products was securedby contracts with waste disposal companies that wererequired to take and dispose of these appliances.However, further eco-friendly measures did not seem tobe practical to the entrepreneur.

As with the eco-dedicated entrepreneurs, eco-openentrepreneurs attached importance to environmentalissues. Some start-up entrepreneurs even indicated thattheir environmental awareness was high. They talkedabout responsibility to the environment and the necessityto maintain resources for future generations. Althoughthey knew something about environmental topics, theydid not communicate these issues as strongly as didthe entrepreneurs of eco- friendly nature; their ecologicalknowledge seemed to be restricted to their immediatefield of work. Analysis of the start-up processes showsno consistent importance is attached to ecologicalconsiderations.According to these entrepreneurs, the implementationof environmentally sound business practices in the start-up process depends primarily on the industry in whichthe new venture is to operate. As a consequence,ecological measures appear only selectively during start-up.

Eco-reluctant start-upsStart-ups that deal with environmental issues only whenexternal requirements force them to do so. Theseentrepreneurs deal with questions of ecologicalconservation when they realize they have a problem,such as when they come into conflict with environmentalauthorities.

In contrast eco-reluctant start-up entrepreneurs madehardly any statements on the importance of ecologicalissues. Environmental requirements and the problemsthey presented through the authorities were simplyharassment. For these entrepreneurs, other problemssuch as job creation, the order book and cost savingswere much more important than environmental issues.

Ecological considerations only occur arbitrarily at isolatedpoints in time, when there is contact with authoritiesthat force the entrepreneurs to act .The eco-reluctantentrepreneurs do not completely object to eco-friendlybusiness practices. Like their fellow entrepreneurs inthe eco-open group, some of them reported that theywould have done more had they thought of it. Since eco-reluctant start-up entrepreneurs do not believe that it isnecessary to operate in a more sustainable manner, itis probably difficult to find starting points for sustainableintervention. Information about possible measures andfinancial support for specific environmental conservationmeasures might help them to reach at least a minimalstandard of performance. Overall, legal requirementsappear to be the major means of forcing these entrepreneursto adopt more ecologically sound business practices.

Strategies to be a Successful Ecopreneurs1. Comply with Environmental Regulations Step2. Develop an Environmental Management Plan3. Build Green4. Buy Green Products5. Adopt Energy Efficient Practices6. Reduce, Reuse, Recycle Wastes7. Conserve Water8. Prevent Pollution9. Create a Green Marketing Strategy

ConclusionOur world is rapidly heading towards its ownobsolescence. The Malthusian nightmare of diminishingresources might well turn out to be a reality if we do notadopt sustainable practices. It was assumed that allstart-ups were fundamentally open to adoptingsustainable business practices. However, the resultsshow that it is not so straightforward. There are stillseveral barriers to sustainability in the start-up process.Some of the key issues facing new Eco- entrepreneursare as follows:



• Several entrepreneurs in the eco-open as well as inthe eco-reluctant start-up groups complained abouta lack of information. Clearly, the provision of moreinformation directly to business founders could helpin the adoption of more sustainable businesspractices.

• The level of knowledge that business advisers haveabout ecological issues, and their willingness todiscuss this with their clients, is also important increating sustainable new ventures. In particular, thereis a need to focus on business advisers that comeinto contact with entrepreneurs at an early stage ofthe start-up process.

• Many start-up entrepreneurs are not fully aware ofthe potential market opportunities that might existfor environmentally friendly businesses. Therefore, itis necessary to draw their attention to successfulbest-practice examples in their respective industries.The willingness to follow successful examples mightbe more promising with start-ups than withestablished business enterprises.

• The role of public funding in promoting sustainableenterprises is often overlooked. It could be said thatfinance was an ongoing problem for startups,especially for green firms that encountered extra

costs as a result of their commitment to sustainablebusiness practices. It seems reasonable thatgovernment funding schemes for new-firm venturesshould make extra allowance for such projects,especially since (on the other side of the ledger) theyhelp reduce the overall cost of public environmentalprotection and clean-up.

References:• Bennett, S. (1991). Ecopreneurship: The complete

guide to small business opportunities from theenvironmental revolution. New York: Wiley.

• Berle, G. (1991). The Green entrepreneur: businessopportunities that can save the earth and make youmoney. Blue Ridge Summit, PA: Liberty Hall Press.

• IPCC (2007). Climate change 2007: Synthesis report,Geneva: Switzerland, IPCC. Retrieved from http://www.ipcc.ch/pdf/assessment-report/ar4/syr/ar4_syr.pdf

• Isaak, R. (1998). Green Logic: Ecopreneurship,Theory and Ethics. Sheffield, UK: GreenleafPublishing

• Isaak, R. 2002. The making of the ecopreneur.Greener Management International no. 38: 81-91.



MARKETING

1. Assistant Professor, Department of BBA, Sri Krishna Arts and Science College, Coimbatore.2. I BBA, Sri Krishna Arts and Science College, Coimbatore.

G. Santhiya2Dr. K. Sarulatha1

IntroductionMarketing is the activity, set of institutions, andprocesses for creating, communicating, delivering, andexchanging offerings that have value for customers,clients, partners, and society at large. The managementprocess through which goods and services move fromconcept to the customer.It includes the coordination of four elements called the 4P’s of marketing:1. Identification, selection and development of a product,2. Determination of its price,3. Selection of a distribution channel to reach the

customer’s place, and4. Development and implementation of a promotional

strategy.

Types of Marketing ChannelsThere are basically four types of marketingchannels:• Direct selling;• Selling through intermediaries;• Dual distribution; and.• Reverse channels.

Direct Selling:

Fig. 1

Direct Marketing Channels

Direct Marketing

Direct selling

Couponing Broadcastfaxing

EmailMarketing

TelemarketingDirectAdvertising

Direct mail

Direct selling is the marketing and selling of productsdirectly to consumers away from a fixed retail location.Peddling is the oldest form of direct selling.

Modern direct selling includes sales made through theparty plan, one-on-one demonstrations, personal contactarrangements as well as internet sales. It defines as“The direct personal presentation, demonstration, andsale of products and services to consumers, usually intheir homes or at their jobs. “Direct selling is differentfrom direct marketing in that it is about individual salesagents reaching and dealing directly with clients whiledirect marketing is about business organizations seekinga relationship with their customers without going throughan agent/consultant or retail outlet. Direct selling often,but not always, uses multi-level marketing (asalesperson is paid for selling and for sales made bypeople they recruit or sponsor) rather than single-levelmarketing (salesperson is paid only for the sales theymake themselves).

Selling Through IntermediariesA marketing channel where intermediaries such aswholesalers and retailers are utilized to make a productavailable to the customer is called an indirectchannel.The most indirect channel you can use(Producer/manufacturer —> agent —> wholesaler —>retailer —> consumer) is used when there are manysmall manufacturers and many small retailers and anagent is used to help coordinate a large supply of theproduct.

Dual DistributionDual distribution describes a wide variety of marketingarrangements by which the manufacturer or wholesalersuses more than one channel simultaneously to reachthe end user. They may sell directly to the end users aswell as sell to other companies for resale. Using two ormore channels to attract the same target market cansometimes lead to channel conflict. An example of dualdistribution is business format franchising, where thefranchisors, license the operation of some of its units tofranchisees while simultaneously owning and operatingsome units themselves.

Reverse ChannelsEach one flows from producer to intermediary (if there isone) to consumer. Technology, however, has madeanother flow possible. This one goes in the reversedirection and may go — from consumer to intermediary



to beneficiary. Think of making money from the resale ofa product or recycling.

Marketing StrategyMarketing strategy has the fundamental goal ofincreasing sales and achieving a sustainable advantage.Marketing strategy includes all basic, short-term, andlong-term activities in the field of marketing that deal withthe analysis of the strategic initial situation of a companyand the formulation, evaluation and selection of market-oriented strategies and therefore contribute to the goalsof the company and its marketing objectives

Strategies based on market dominanceIn this scheme, firms are classified based ontheir market share or dominance of an industry.Typically there are four types of market dominancestrategies• Leader• Challenger• Follower• Nicher

Marketing Strategic modelsThe 3C’sThe 3C’s stand for: Customer, Corporation andCompetitor, is a strategic model that uses these threekey factors which lead to a sustainable competitivemarket. This strategy was developed by a Japanesestrategy guru called Kenichi Ohmae. Each factor is keyto the success of this strategy; The corporation factormainly focuses on maximizing the strengths of thebusiness from this the business can influence the relevantareas of the competition to achieve success within theindustry. The customers are the basis to any business.Without customers you have no business. The mostimportant factors of customers and the wants, needsand requirements that the business needs to fulfill inorder to attract buyers. The competition can be lookedat in various different ways such as; purchasing, design,image and maintenance. The more unique steps abusiness takes the less competition a business will facein that field.

The Ansoff MatrixThe Ansoff Matrix model was invented by H. Igor Ansoffand is a model that focuses on four main areas, whichare; Market penetration, Product development, Marketdevelopment and Product/ Market Diversification. Theseare then split into a further two areas known as the ‘New’and ‘Present’. From this strategy, businesses are ableto determine the product and market growth. This is doneby focusing on whether the market is a new market oralready existing and whether the products are new or

already existing. Market penetration covers products thatare already on the market and are familiar to theconsumers; this creates a low risk as the product isalready on the established market. Product developmentis the introduction of a new product into an existingmarket, this can include modifications to an alreadyexisting market which can create a product that hasmore appeal in the market. Market development alsoknown as market extension, is when an already existingproduct is introduced to a new market in order to identifyand build a new clientele base. This can include newgeological markets new distribution channels anddifferent pricing policies. The last area is Diversificationand is the riskiest area for a business. This is where anew product is sold to a new market at the same time.There are two type of Diversification; Related whichmeans the business remains in the same industry thatthey are familiar with. The other is Unrelated which iswhen there are no previous relations or marketexperiences for the business.

Marketing Mix Model (4P’s)The 4P’s also known as Price, Product, Place andPromotion is a strategy that originated from the singleP meaning Price. This strategy was designed as an easyway to turn marketing planning into practice. Thisstrategy is used to find and meet the consumers needsand can be used for long term or short term purposes.The proportions of the marketing mix can be altered tomeet different requirements for each product produced,similar to altering ingredients when baking a cake. Theproduct is a physical object that is put on a market tobe sold with a set of benefits that will meet customerneeds. This includes policies and procedures relatingto the product lines including the quality and design ofthe product. As well as product research anddevelopment for any new products being introduced. Theprice policies and procedures relate to the price level ofthe product and the specific prices that need to be appliedwhether it is one price or a varying price. This alsoincludes price maintenance and promotional deals,specials, credit and repayment terms. The promotion isall advertising, personal selling, promotions and directmarketing as well as any other promotional work thebusiness does for the product. This includes the selectionof trademarks and branding of the product whether it’s afamily brand, individual brand or sale under a privatelabel. The last P is Place which includes distributionchannels, market coverage, product inventory,transportation and distribution sites. This also includesthe degree of selectivity among the wholesalers andretailers and the channels between the factory and theconsumer



Real Life Marketing:Real-life marketing primarily revolves around theapplication of a great deal of common-sense; dealingwith a limited number of factors, in an environment ofimperfect information and limited resources complicatedby uncertainty and tight timescales. Use of classicalmarketing techniques, in these circumstances, isinevitably partial and uneven.

Thus, for example, many new products will emerge fromirrational processes and the rational developmentprocess may be used (if at all) to screen out the worstnon-runners. The design of the advertising, and thepackaging, will be the output of the creative mindsemployed; which management will then screen, oftenby ‘gut-reaction’, to ensure that it is reasonable.

For most of their time, marketing managers use intuitionand experience to analyze and handle the complex, andunique, situations being faced; without easy referenceto theory. This will often be ‘flying by the seat of thepants’, or ‘gut-reaction’; where the overall strategy,coupled with the knowledge of the customer which hasbeen absorbed almost by a process of osmosis, willdetermine the quality of the marketing employed. This,almost instinctive management, is what is sometimescalled ‘coarse marketing’; to distinguish it from therefined, aesthetically pleasing, form favored by thetheorists.

An organization’s strategy combines all of its marketinggoals into one comprehensive plan. A good marketingstrategy should be drawn from market research and focuson the product mix in order to achieve themaximum profit and sustain the business. The marketingstrategy is the foundation of a marketing plan.

Marketing Research: Marketing research is the function that links theconsumer, customer, and public to the marketer throughinformation—information used to identify and definemarketing opportunities and problems; generate, refine,and evaluate marketing actions; monitor marketingperformance; and improve understanding of marketingas a process. Marketing research specifies theinformation required to address these issues, designsthe method for collecting information, manages andimplements the data collection process, analyzes theresults, and communicates the findings and theirimplications.

Conclusion:Thus the marketer has to understand how variousenvironmental forces impact organizations decisions. Asuccessful marketer and organization are the one whoanticipate, plan and execute strategies to meet thoseenvironmental change.



A STUDY ON IMPACT OF LOYALTY PROGRAMS ON CONSUMERPURCHASE BEHAVIOR: WITH SPECIAL REFERENCETO ORGANIZED RETAIL STORES IN COIMBATORE

1. Assistant Professor, Department of Management Studies, K. S. Rangasamy College of Arts & Science, Tiruchengode,2. Associate Professor & Research Supervisor, PG & Research Department of Management Science, Park’s College,

Tirupur

Abstract

The paper aims to identify the impact of shopping experience towards consumer loyalty in organized retail outlets. Theloyalty programs are important elements in firms like retail, apparels, airlines, and hotels, which act as incentiveschemes which benefits consumers when they making repeated purchases. The impact of loyalty programs on theconsumer purchase behavior can be measured by identifying the benefits to the customers and also to the company.In recent trend customer loyalty and customer satisfaction has become very important for retailers. The retailers mustfocus on satisfying the needs and wants of existing customers since generating a new customer costs more thansatisfying an existing customer. The retailer must satisfy the expectations of the customers to generate profit and tosurvive in the market. The paper tries to identify the level of satisfaction and customer’s loyalty towards the store. Theretailers must develop loyalty programs to promote retention of their existing customers considering the emergenceof online retail. Indian retailers are offer wide range of attractive tangible and intangible rewards to their customers inorder to retain them and enhance the retail performance. The loyalty programs generated huge proportion of salesand profits from the customers.

Key Words: Retail, Loyalty Programs, Consumer purchase behavior, Rewards, Customer satisfaction, Customerloyalty

Dr. M. Sadika Sultana2K. Sasi Kumar1

IntroductionIndian Retail sector has witnessed corporate attentionthat big players like Tata, Birla, Reliance, Pantaloongroups etc., are entering into it. The entry of these bigplayers in retailing has caused a major revolution inretailing formats and infrastructural front. Indianorganized retail market is growing at a fast pace due tothe boom in the India retail industry. This intensive growthin the organized retail market is due to the change inthe behavior of the consumers. This change has arisenwith the consumer due to increased income, changinglifestyles and patterns of demography and many otherfactors.

Businesses have now realized that their success lies incustomer retention and building customer loyalty.Research findings have also supported this realizationthat it costs up to five times more to acquire a newcustomer than to retain an existing customer. Themembers receive a combination of attractive tangiblerewards (gifts, discounts, reward points etc.) andintangible rewards (invitation to special events like fashionshows, exclusive preview of new items etc.) to raisecustomer loyalty. Customer satisfaction and customerloyalty are the most important elements of customerretention. Various activities are done by the retailers tohave a sufficient retention of loyal customers.

Concept Of Loyalty ProgramsLoyalty Programs allows consumers to accumulate freerewards when they make repeated purchases with a firmand therefore encourages the consumers to be loyal tothe firm. Loyalty card is a plastic or paper card, identifiesthe card holder as a member in a loyalty program. LoyaltyCards typically have a barcode or magnet stripe thatcan be easily scanned when it is swapped at theparticular stores. Loyalty programs are generally offeredby retailers and in the service industry. The goal is togain knowledge of the customer and to increasecustomer retention and purchase frequency.

Loyalty cards are the easiest and cheapest way ofrunning the loyalty programs. This type of loyaltyprograms is more applicable in organized retail sector.A loyalty card is a mechanism for identifying andrewarding the loyal customers in a way to make themfeel special and rewarded. The various types of cardsare Point cards, multi retailer cards, co-branded cards,store cards etc. The customers are awarded with pointsaccording to their purchase on each transaction underloyalty card scheme. The points collected can be furtherused as rewards which can used at future purchases asdiscounts, gifts etc.



The retailer or group of retail shop may issue a loyaltycard to a consumer which can be used as identificationto the retailer. By presenting the card, the consumerorpurchaser is typically entitled to either a discount onthe current purchase, or an allotment of points that canbe used for future purchases.

Customer Loyalty Programs:Use of technology and database equipment have madepossible for retailers to make attempts at customerretention through database marketing programs.Establishing a detailed client database may help retailersto keep track of personal information and individualpreferences of their customers. This enables them toprovide better service and value. With effectiveimplementation of customer databases, retailers mayreestablish contact with customers, and worksuccessfully towards increasing customer retention,repeat sales, and customer referrals.

Types of Loyalty Programs1. Rewards: Award points for purchases. Points can be

exchanged for rewards.2. Rebate: Award a gift coupon saving for the next

purchase, whenever the consumer reaches a certainspending or shopping level.

3. Appreciation: Offer a rebate, not the cash then theresult will be incremental visits and sales. In this type,consumers are offered with the appreciation rewardof the same company.

4. Partnership: Reward the consumer’s accumulatedpurchases with a partner’s products or services.

5. Affinity: An affinity program offers specialcommunications, value added benefits and bonus andrecognition as a valued consumer.

Objectives of the Study:1. To identify the various loyalty programs that influences

the customer buying decision.2. To study the impact of various loyalty programs

towards customers buying behavior.3. To identify the most effective loyalty program that

influences the customers purchase decision.

Review of LiteratureKumar and Purkayastha (2013)examined themechanism in which retail loyalty schemes influenceconsumers buying behaviour. They study concluded thatloyalty programs and loyalty cards were a regular featurein contemporary retailing. Retailers across the industryhad been widely using this tool in their effort to developlong term customer loyalty.

Alipur and Feizi (2013) found out a positive relationbetween relationship marketing and customer loyalty.Their study also resulted into strong positive relationbetween trust, commitment, relationship marketing andcustomer loyalty. A significant relationship betweenquality of communication, conflict management,competence and customer loyalty was also found in theresearch.

Lajevardi and Fakharmanesh (2013) examined theimpact of competency, ability to establishcommunication, commitment, ability to solve customer’sproblems, trust and quality of relationship on customerloyalty. The results of the research revealed thatcompetency, ability to establish communication had asignificant positive effect on customer loyalty. Further,commitment, ability to solve customers’ problems andtrust also had a significant positive effect on customerloyalty. In addition results also showed that ability tosolve customers’ problems was the best predictor of theirloyalty.

Ramasamy (2013) in his research focused ondetermining customer satisfaction in consumer durablewhite goods in Chennai. He found that overall quality;usage experience pre sales, after sales service, salesperson’s behavior, repair, reliability, customer service andproduct compatibility were independent variables hadpositive impact on customer satisfaction and worthiness,responsiveness, warranty, loyalty programs; competitiveprices were the factors that had negative impact oncustomer satisfaction.

Manjunath and Aluregowda (2013) in their study triedto find out the factors that affect brand loyalty. Theresearch concluded that brand trust had a relationshipwith brand loyalty and it affect brand loyalty in services.Further, brand effect had no association with brand loyaltythat increased the loyalty of an individual towards a brand.

Hobson and Mia (2012) examined the effect of retailservice quality dimensions on customer satisfaction andloyalty. The research uncovered the aspects of servicewere most desired by consumers in an emerging marketcontext as well as their effect on generating repeatbusiness. The results concluded that physical aspectsand personal interaction had a direct relationship withcustomer satisfaction. Customer satisfaction was alsoconfirmed to be positively linked to store loyalty.

Dehghan and Shahin (2011), in their research paperentitled “Customer Loyalty Assessment - A case studyin MADDIRAN, the distributor of LG electronics in Iran”attempted to find out how customer loyalty could beassessed. The results of this studied implied the needfor a service firm to strategically influence on the keyexperiences of customer loyalty in its pursuit of customerretention and long-term profitability.



Ramaseshan and Vinden (2009)aimed to identify thedeterminants of retail store loyalty for Australian retailers.They concluded that store satisfaction and store trusthad significant influence on consumer’s loyalty to retailstore, perceived value and store affect did not havenoteworthy influence on retail store loyalty.

Vyas and Sinha (2008 ) had concluded that sinceacquiring new customers is getting costlier day by day,business organizations have offered continuity/loyaltyprograms to retain/reward existing customers andmaintain relationships. Consumers find it beneficial tojoin loyalty programs to earn rewards for staying loyal.Through loyalty programs, firms can potentially gainmore repeat business, get opportunity to cross-sell andobtain rich customer data for future CRM efforts.

Yuping Lu (2007) has concluded that despite theprevalent use of loyalty programs, there is limitedevidence on the long-term effects of such programs, andtheir effectiveness is not well established. Usinglongitudinal data, the study shows that consumers whowere heavy buyers at the beginning of a loyalty programwere most likely to claim their qualified rewards, but theprogram did not prompt them to change their purchasebehavior. In contrast, consumers whose initial purchaselevels were low or moderate gradually purchased moreand became more loyal to the firm. For light buyers, theloyalty program broadened their relationship with the firminto other business areas.

Research MethodologyResearch DesignDescriptive researched been employed to study theimpact of loyalty programs of customer purchasebehavior. Data were collected from the potentialcustomers visiting various organized retail outlets inCoimbatore, Tamilnadu.

Data CollectionThe study includes both primary & secondary data. Astructured questionnaire was issued to collect the primarydata from the customers visiting various organized retailoutlets in Coimbatore. Secondary data was collectedfrom the reports, brouchers, magazines and website.

Population & Sampling FrameA convenience sampling method was used to obtain thedata from the customers.

Sample DesignA Sample of 235 respondents was chosen for datacollection. It was observed at the end of the survey (datacollected) nearly 35 questionnaires were incomplete.They were deleted which gave a samples of 200respondents in total.

It is inferred from table 1 that 39% of respondents are inthe age group 26-35 followed by 21% of respondentsbelong to age group of less than 25 years.

Table - 2 : Showing the monthly income ofrespondents

Data analysis & InterpretationTable - 1 : Showing the age of the respondents

1 Below 25 42 21

2 26-35 78 39

3 36-45 36 18

4 46-55 30 15

5 56 & above 14 7

S.No Age No. ofrespondents Percentage

1 Below 10000 58 29

2 10001-20000 28 14

3 20001-30000 44 22

4 30001-40000 30 15

5 40001 & above 40 20

S.No Monthly income No. ofrespondents Percentage

It is revealed from table2 that 29 % of respondent’smonthly income is below Rs.10000 followed by 22% ofrespondents having monthly income between 20001 to30000.

Table - 3 : Showing awareness of loyalty cards.

1 Yes 152 76

2 No 48 24

S.No Awareness No. ofrespondents Percentage

It is revealed from table 3 that majority (76%) ofrespondents are aware about loyalty cards and 24 % ofrespondents are not aware about loyalty cards.

Table - 4 : The mode of awareness about loyaltyprograms.

1 Advertisement 98 49

2 Friends 36 18

3 Retailer 38 19

4 Others 28 14

S.No Mode ofawareness

No. ofrespondents Percentage



It is observed from table 4 that 49 % of respondentsstated that advertisement will be the better mode ofawareness for loyalty programs.

Table - 5 : Frequency of purchase per month

1 Less than 3 times 76 38

2 4-6 time 58 29

3 7-9 time 28 14

4 More than 10 times 38 19

S.No Frequency ofpurchase


It is inferred from table 5 that most of the respondents(38%) make purchase less than 3 times per monthfollowed by 29% of respondents make 4-6 purchasesper month.

Table - 6: Relation with loyalty schemes andamount of purchase.

1 Yes 166 83

2 No 34 17

S.No Amount ofpurchase


Majority (83%) of respondents stated that there is arelation between loyalty schemes and amount ofpurchase.

Table - 7 : Benefits of loyalty cards

1 Offers 94 47

2 Discounts 38 19

3 Status 22 11

4 Quality 10 5

5 Others 36 18

S.No Benefits of loyaltycards


It is observed from table 7 that 47% of customers statedoffers are the benefits of using loyalty cards, 19% ofrespondents stated discounts are the benefits of usingloyalty cards.

Table - 8 : Promotion of loyalty of customers byloyalty cards.

1 Yes 126 63

2 No 74 37

S.No Promotion ofloyalty


From the table 8 it is inferred that majority (63%) ofcustomers feel that loyalty cards promote loyalty ofcustomers.

Table - 9 : Number of loyalty cards owned bycustomer

1 1 82 41

2 2 36 18

3 3 48 24

4 4 & above 34 17

S.No Number of loyaltycards


It is inferred from table 9 that 41% of respondents ownone loyalty card, followed by 24%of respondents ownthree loyalty cards.

Table - 10 : Type of Loyalty program utilized.

1 Membership 78 39

2 Policy 46 23

3 Rewards 48 24

4 All 28 14

S.No Type of Loyaltyprogram utilized


It is inferred from table 10 that membership type of loyaltyprogram is utilized by the 39% of the respondentsfollowed by rewards utilized by 24% of respondents.

Table - 11: Opinion about loyalty cards

1 Quick access to promotional 12 6information

2 Benefits in terms of offers, gifts etc., 30 15

3 Sharing of personal information 40 20

4 Inconvenience in carrying cards 22 11

5 Promotes stores image 34 17

6 Increases sales 46 23

7 No use 16 8

S.No Opinion about loyalty cards No. ofrespondents Percentage

It is observed from table 11 that 23% of respondentsreported that loyalty cards will increase the sales andonly few (6%) percent of respondents stated loyalty cardsmake quick access to promotional information.



Table - 12 : Rank the level of satisfaction towardsloyalty programs at retail outlets

1 Big Bazzar 28 IV

2 Megamart 18 VI

3 Kannan Department 44 I

4 Reliance 22 V

5 Nilgiris 16 VII

6 Kamala stores 38 II

7 Others 34 III

S.No Opinion No. ofrespondents Percentage

It is inferred from table 12 that most of the respondents(44%) ranked no I forKannan Department store forsatisfaction towards loyalty programs.

Analysis and DiscussionLoyalty Programs are a unique business model, as theyprovide significant benefits for all three stakeholders atthe same time; customers, program owner and programpartner. Customers can use points that were accumulatedfor everyday spending and will therefore experience adiscount. The program owner will either secure existingbusiness or will experience new and incrementalbusiness. The same benefit goes to the partner of aprogram. They will take advantage from a larger customerbase, making incremental business as well.

Limitations• Some of the respondents were reluctant in answering

the questions.• The study was done at Coimbatore district, may

obtain different consumer behavior at other places.

SuggestionsRetailers need to focus on delivering (selling) experiencealong with products. Customers find it difficult to carrydifferent loyalty cards every time they go for shopping.Hence any of the following methods can be employed.1. Providing “one card for all” would reduce the burden

of carrying many cards at the same time.2. Code based usageis the option to remove the card

system and allot the customers special codes. Thiswould just require the customers to remember thecode every time they go for shopping.

3. Integration with the debit/credit card is the bestpossible option is to integrate the loyalty card withthe credit card. Customers always carry their

respective credit card for shopping this will ensurethat customer is not required making any additionaleffort to avail the benefits of a loyalty card.

4. Integration with mobile number will make easy accessto loyalty program.

5. Retailers can send SMS or E-mail to customers aboutincentives, offers and promotion schemes to loyalcustomers.

ConclusionRetailers are exploring how to influence technology suchas predictive software to uncover delicate buying patternsand identify customers who may be likely to buy incategories they have never bought in before. Many aremaking greater use of the internet to promote their loyaltyprogram through accessible and informative websitesand targeted e-mail. As customer loyalty being one ofthe most important factors for the business today, loyaltyprograms, loyalty card and other value added service, ifwell designed and implemented, can help the businessgain competitive edge and can hence increaseprofitability. The focus of customer loyalty programsacross the retail chains has been to implement pointbased loyalty systems making it more of a monetaryincentive rather than a positive emotion-producing event.A retailer may indulge into identifying such factors thatincrease the feel good factor and satisfaction to providea unified experience from loyalty programs. This involvesadapting retailer’s approach to suit specific customersegments.

Executives at each level should be given suitable trainingto understand the information to adapt the responsesbased on the customer data. Retailers should havesufficient information and reports from the analyticaldatabase to target promotions towards individual needsfor example birthdays, festivals, occupation, gender etc.The customer care should be integrated suitably withother systems to display information like expendituretrends, consumption patterns, profile and preferencesof each customer.

Loyalty programs impact the consumer purchasebehavior in positive manner as it influences theconsumers to make repeated purchases as consumersfind the different benefits i.e. direct and indirect orimmediate and delayed attached with the brand. Loyaltyprograms helps in increasing customer retention whichsignificantly improves a company’s profitability and thusmeans the positive impact of loyalty programs. Differentconsumer shows different behavior towards the sameloyalty program scheme due their psychological,demographical and emotional factors.



References1. Jyothi Kumar, MalabikaPurkayastha (2013), “Study

on the impact of retail loyalty programs onconsumers’ buying behavior”, IJRIM, Vol. 3, Issue1, pp. 59-68

2. SeyyedehMohaddesehSeyyednejad, HosseinAlipurand Mohammad Feizi (2013), Surveying theRelationship Between Relationship Marketing andCustomer Loyalty Case Study: Pasargad Bank inMazandaran province, International Journal ofManagement and Social Sciences Research(IJMSSR, Volume 2, No. 3, pp. 71-75

3. JavadEmami, MasoudLajevardi and SinaFakharmanesh (2013), “An Integrated Model inCustomer Loyalty Context: Relationship Quality andRelationship Marketing ViewAustralian Journal ofBasic and Applied Sciences, Vol. 7, Issue 2, pp.399-407

4. Krishnan Ramasamy (2013) ,”A Study on CustomerSatisfaction of Consumer Durable White Goods –Regression Model”, IJRFM, Vol. 2, Issue 2, pp. 379-396

5. Dr.S.J.Manjunath and Aluregowda (2013), “Impactof Brand Trust and Brand Affect on Brand Loyalty”,International Journal of Engineering and ManagementResearch, Vol.-3, Issue-1, pp. 8-12

6. Justin Beneke, Claire Hayworth, Robyn Hobson andZeenat Mia (2012), “Examining the effect of retailservice quality dimensions on customer satisfactionand loyalty: The case of the supermarket shopper”,ActaCommercii 2012, pp. 27-43

7. Byron Sharp and Anne Sharp, Loyalty Programs andtheir Impact on Repeat-Purchase Loyalty Patterns:a replication and extension”

8. Yupinglu, journal of marketing, 2007, “The Long-TermImpact of Loyalty Programs on Consumer PurchaseBehavior and Loyalty”

9. Anoop Kumar, 2007, “Impact of Loyalty programson Consumer Purchase behavior anddesign for aneffective loyalty card”

10. Consumer Behavior, by Wayne D. Hoyer, DeborahJ. MacInnis and PinakiDasgupta.Customerrelationship management, Emergingconcepts, toolsand applications, by JagdishN.Sheth, AtulParvatiyarand G. Shainesh.

11. Louise O’Brien and Charles Jones, “Do RewardsReally Create Loyalty?”Harvard Business Review,May-June 1995, 75-82.

12. www.crmtrends.com/loyalty.html13. www.crmlandmark.com/library/loyaltyprograms.pdf14. www.iocl.com/Services/Marketing Loyalty Programs.

aspx15. www.loyaltycardsindia.com16. http://www.businessknowhow.com/marketing/

loyaltyprog.htm17. http://www.com/five-types-of-loyalty-programs/18. http://www.moneybar.net/productsservices/ sbe-

loyalty-types.aspx



BRANDING

1. Assistant Professor, Sri Krishna arts and science college Kuniamuthur, Coimbatore.2. II B.COM IT, Sri Krishna Arts and Science College, Coimbatore.3. II B.COM IT, Sri Krishna Arts and Science College, Coimbatore.4. II B.COM IT, Sri Krishna Arts and Science College, Coimbatore.

AbstractBranding has emerged as a top management priority in the last decade due to the growing realization that brands areone of the most valuable intangible assets that firms have. Driven in part by this intense industry interest, academicresearchers haveexplored a number of different brand related topics in recent years, generating scores of papers,articles, research reports, and books. This paper identifies some of the influential work in the branding area, highlightingwhat has been learned from an academic perspective on important topics such as brand positioning, brand integration,brand equity measurement, brand growth, and brand management. The paper also outlines some gaps that exist inthe research of branding and brand equity and formulates a series of related research questions. Choice modelingimplications of the branding concept and the challenges of incorporating main and interaction effects of branding aswell as the impact of competition are discussed. Branding has traditionally been associated with commercial productsand services; however, health communication practitioners are beginning to realize that branding principles are alsorelevant to people, places, ideas, and messages surrounding health issues (Keller, 1993). A number of healthcommunication practitioners have adopted branding concepts and strategies typically used for marketing commercialproducts, and have applied them to the marketing of health issues in order to ask them more “visible” to the public.

Keywords: Branding, Intangible, Academic, Concepts.

A. Lalithakumari2J. Dhivya1 M. K. Soundharaya3 V. Suganya4

IntroductionThere are millions of products and services all over theworld, each claims to be the best among their category.But, every product is not equally popular. Consumerdoesn’t remember every product, only few products areremembered by their name, logo, or slogan. Suchproducts generate desired emotions in the mind ofconsumer. It is branding that makes product popularand known in the market; branding is not an activity thatcan be done overnight, it might takes months and evenyears to create a loyal and reputed brand.

Branding gives personality to a product; packaging andlabeling put a face on the product. Effective packagingand labeling work as selling tools that help marketersell the product.

Definition of Branding:According to American Marketing Association -Brand is ”A name, term, design, symbol, or any otherfeature that identifies one seller’s good or service asdistinct from those of other sellers. The legal term forbrand is trademark. A brand may identify one item, afamily of items, or all items of that seller. If used for thefirm as a whole, the preferred term is trade name.”

Meaning of Branding: Branding is a process ofcreating a unique name and image for a product in themind of consumer, mainly through advertisingcampaigns. A brand is a name, term, symbol, design or

combination of these elements, used to identify aproduct, a family of products, or all products of anorganization.

Elements of BrandingBrand includes various elements like - brand names,trade names, brand marks, trade marks, and tradecharacters. The combination of these elements form afirm’s corporate symbol or name.• Brand Name:

It is also called Product Brand. It can be a word, agroup of words, letters, or numbers to represent aproduct or service. For example - Pepsi, iPhone 5,and etc.

• Trade Name:It is also called Corporate Brand. It identifies andpromotes a company or a division of a particularcorporation. For example - Dell, Nike, Google, andetc.

• Brand Mark:It is a unique symbol, coloring, lettering, or otherdesign element. It is visually recognizable, notnecessary to be pronounced. For example - Apple’sapple, or Coca-colas cursive typeface.

• Trade Mark:It is a word, name, symbol, or combination of theseelements. Trade mark is legally protected by



government. For example - NBC colorful peacock,or McDonald’s golden arches. No other organizationcan use these symbols.

• Trade Characters:Animal, people, animated characters, objects, andthe like that are used to advertise a product or service,that come to be associated with that product orservice. For example - Keebler Elves for Keeblercookies

Branding Strategies:There are various branding strategies on which marketingorganizations rely to meet sales and marketingobjectives. Some of these strategies are as following:-

Brand Extension:According to this strategy, an existing brand name isused to promote a new or an improved product in anorganization’s product line. Marketing organizations usesthis strategy to minimize the cost of launching a newproduct and the risk of failure of new product. There isrisk of brand diluting if a product line is over extended.• Brand Licensing:

According to this strategy, some organizations allowother organizations to use their brand name, tradename, or trade character. Such authorization is alegal licensing agreement for which the licensingorganization receives royalty in return for theauthorization. Organizations follow this strategy toincrease revenue sources, enhance organizationimage, and sell more of their core products.

• Mixed Branding:This strategy is used by some manufacturers andretailers to sell products. A manufacturer of a nationalbrand can make a product for sale under anothercompany’s brand. Like this a business can maintainbrand loyalty through its national brand and increaseits product mix through private brands. It can increaseits profits by selling private brands without affectingthe reputation and sales of its national brand.

• Co-Branding :According to this strategy one or more brands arecombined in the manufacture of a product or in thedelivery of a service to capitalize on other companies’products and services to reach new customers andincrease sales for both companies’ brands.

Important of branding:• Deliver Your Message Clearly

Branding acts as a way of communicating with yourcustomers. Without expensive advertising, you candeliver a message through your well-designed brand.Because of this, the importance of branding in

marketing is clear if you want to connect with yourcustomers without going broke in the process. If youcan customize your brand according to the needs ofyour customer base, you will be well on your way tothe success you crave for your business.

• Create Business CredibilityIf you can continually associate your brand withquality products and services, soon they will be oneand the same in the minds of your customers. Thiscredibility is not built overnight. You must prove thatyour business can continually innovate to provide top-notch customer service as well as products andservices that are dependable.

• Connect the Customer to the ProductYou probably feel a connection with—and even aloyalty to—your favorite brands. They have helpedyou be successful in various aspects of your life.Products are the backbone of humankind’s success,and every successful product is backed by arecognizable brand and a trustworthy company, whichare the traits you need to create for your ownbusiness.

• Motivate the BuyerWhen the connection between the customer and theproduct is strong, the brand becomes a motivator forthe customer to continue buying products, even ifthey have never used that exact product before. Yourcustomer places trust in your brand and its qualityso they know buying another product from the samebrand is likely to deliver similar satisfaction. The mostclear-cut way to be successful in a business endeavoris to recognize the importance of branding inmarketing and use it to your advantage. To work witha promotional marketing company that can transformthe success of your business, please visit ImaginationBranding.

The functions of a brand for consumers:• Brands play a role in terms of communication and

identification. They offer guidance, convey anexpectation of quality and so offer help and supportto those making purchase decisions. Brands makeit easier for consumers to interpret and digestinformation on products.

• The perceived purchasing risk is thus minimized,which in turn helps cultivate a trust-based relationship.

• A brand can also serve as a social business card,expressing membership in a certain group. Premiumbrands, for instance, can even engender a sense ofdistinction and prestige.

• Consuming certain brands is also a means ofcommunicating certain values. By opting for particularbrands, a consumer demonstrates that he or she



embraces particular values; the brand becomes atool of identity formation.

The functions of brands from a company’sperspective:• A brand fosters brand and customer loyalty.

Particularly strong brands can establish theprevalence of premium prices on the market andsoften consumer reactions to price changes.Specifically brand-oriented buyers – who are moreconcerned with brands than prices – are more resilientwhen it comes to changes in the competitivescenario. This decreased sensitivity to price changesmakes them more valuable as customers.

• The reduction in perceived purchasing risk lays thegroundwork for a relationship of trust, giving brandsa role to play in lashing customers to a company.

• Brands can counter the swelling ranks of tradebecause dealers stock their shelves and fill their orderlists with products explicitly requested by consumers.Strong brands in particular keep sales levels andmarket share constant and considerably lessendependence on short-term special promotions.

• A brand unlocks great potential in terms of licensingopportunities as well, helping companies achieveplans for international expansion.

• Finally, brands also offer companies potential forhoning a clear profile and overshadowing thecompetition. Strong brands in particular can reducethe risk that new product launches will flop and canbe used as platforms for successful brand stretching(also in terms of launches in completely new productsegments and sectors)

Conclusion:In conclusion, it should be noted that certification andbranding only represent aspects of a wider range ofpossible product promotion initiatives as far as Asia–Pacific producers and exporters/marketers areconcerned. It is almost certainly more important to complywith the basic mandatory requirements of food safetyand hygiene (i.e. in terms of HACCP compliance), andcertainly many countries in Asia and the Pacific stillhave plenty of room for improvement in this regard. Butthere are also many other ways (e.g. qualityimprovements, pricing strategies, new product rangesand packaging and improvements in logistics to meetclient requirements) that may be at least as effective ascertification or branding in helping producers andexporters to improve the net value-added of their businessoperations. Improving traceability of fish products isexpected to become increasingly important in this regard.



HUMAN RESOURCE-TIME MANAGEMENT

1. Assistant professor,Sri Krishna College of Arts and Science College,Coimbatore.2. II BBA, Sri Krishna College of Arts and Science College,Coimbatore.

Aishwarya. R2S. Mahalakshmi1

IntroductionTime management strategies are usually associated withthe recommendation to set goals. These goals are oftenwritten down and broken down into a project, an actionplan or a simple to-do-list. Deadlines are set and prioritiesare assigned to the individual items on the to-do-list.This process results in a daily plan with a to-do-list. Aweekly perspective rather than a daily perspective canbe considered.‘Time equals life, it is irreversible and irreplaceable. Towaste your time is to waste your life, but to master yourtime is to master your life and make the most of it!’So, to be effective and successful, the sales person mustlearn to manage time to advantage. Learn to work smarternot harder. It is about what and how things are done.

MeaningThe modern concept of time management - the act ofplanning the amount of time you spend on whichactivities - really began with Frederick Taylor’s scientificmanagement techniques. His goal was to increaseworker productivity. To do this, he conducted time andmotion studies and began to focus on the best ways forjobs to be performed to maximize the work completedin a given amount of time. So, modern managers in theseareas look for ways to monitor worker productivity interms of time use.

Definition“Don’t say you don’t have enough time. You have exactlythe same number of hours per day that were given toHelen Keller, Pasteur, Michelangelo, Mother Teresa,Leonardo da Vinci, Thomas Jefferson and AlbertEinstein.” Said by Jackson Brown.

Importance Of Time Management In HumanResourceAn organization cannot build a good team of workingprofessionals without good Human Resources. The keyfunctions of the Human Resources Management (HRM)team include recruiting people, training them,performance appraisals, motivating employees as wellas workplace communication, workplace safety, andmuch more. The beneficial effects of these functions arediscussed here:

Recruitment and TrainingThis is one of the major responsibilities of the humanresource team. The HR managers come up with plansand strategies for hiring the right kind of people. Theydesign the criteria which is best suited for a specific jobdescription. Their other tasks related to recruitmentinclude formulating the obligations of an employee andthe scope of tasks assigned to him or her. Based onthese two factors, the contract of an employee with thecompany is prepared. When needed, they also providetraining to the employees according to the requirementsof the organization. Thus, the staff members get theopportunity to sharpen their existing skills or developspecialized skills which in turn, will help them to takeup some new roles.

Performance AppraisalsHRM encourages the people working in an organization,to work according to their potential and gives themsuggestions that can help them to bring aboutimprovement in it. The team communicates with the staffindividually from time to time and provides all thenecessary information regarding their performances andalso defines their respective roles. This is beneficial asit enables them to form an outline of their anticipatedgoals in much clearer terms and thereby, helps themexecute the goals with best possible efforts.Performance appraisals, when taken on a regular basis,motivate the employees.

Maintaining Work AtmosphereThis is a vital aspect of HRM because the performanceof an individual in an organization is largely driven by thework atmosphere or work culture that prevails at theworkplace. A good working condition is one of thebenefits that the employees can expect from an efficienthuman resource team. A safe, clean and healthyenvironment can bring out the best in an employee. Afriendly atmosphere gives the staff member’s jobsatisfaction as well.

ManagingDisputesIn an organization, there are several issues on whichdisputes may arise between the employees and theemployers. You can say conflicts are almost inevitable.In such a scenario, it is the human resource department



which acts as a consultant and mediator to sort outthose issues in an effective manner. They first hear thegrievances of the employees. Then they come up withsuitable solutions to sort them out. In other words, theytake timely action and prevent things from going out ofhands.

Developing Public RelationsThe responsibility of establishing good public relationslies with the HRM to a great extent. They organizebusiness meetings, seminars and various officialgatherings on behalf of the company in order to build uprelationships with other business sectors. Sometimes,the HR department plays an active role in preparing thebusiness and marketing plans for the organization too.

Any organization, without a proper setup for HRM isbound to suffer from serious problems while managingits regular activities. For this reason, today, companiesmust put a lot of effort and energy into setting up a strongand effective HRM.

Objectives Of Time Management• Recognize the myths and reality of time management• Understand the principles of developing sustainable

behaviors• Define their values, goals, targets and priorities• Develop a workable balance between being reactive

and proactive• Plan workloads and take a positive approach to decisions• Develop an effective time management system• Recognize and avoid various “time traps” and “pie

nibblers”• Utilize a variety of time management methods• Develop an Action Plan to apply in the workplace.

Time Management SkillsOrganizationHR management requires an orderly approach. Organizedfiles, strong time management skills, and personalefficiency are key to HR effectiveness. You’re dealingwith people’s lives and careers here, and when a managerrequests help with a termination or a compensationrecommendation or recognition program, it won’t do tosay, “I’ll try to get to that if I have time.”

MultitaskingOn a typical HR day, an HR professional will deal withan employee’s personal issue one minute, an intermittentleave question the next, and a recruiting strategy for ahard-to-fill job the minute after. And that’s to say nothingof social media, wage/hour, engagement, retention, anda whole host of other things, every one critical tosomeone.

In HR, if it’s not one thing, it’s another. Priorities andbusiness needs move fast and change fast, and managerA who needs someone hired doesn’t much care if you’realready helping manager B who needs someone fired.You need to be able to handle it all, all at once.

Dealing with GreyA surprisingly large percentage of the issues HRmanagers face are in “the grey area.”HR managers haveto be able to act with incomplete and “best available”information, and they have to know when to seek theprofessional help of colleagues, attorneys, and otherexperts.

NegotiationAlong with grey comes the need to negotiate—there areoften two or more opposing views, and the successfulHR pro can find an acceptable middle ground. Remember,the goal of negotiation is to end up with two parties thatare satisfied with the outcome, and that’s not often easyto achieve.

CommunicationHR professionals have to communicate up tomanagement, over to managers, out to potentialemployees, and down to all levels of current employees.And they have to do it in writing, while speaking to largeand small groups and, increasingly, through social media.They have to be convincing, caring, and believable.

Discrete and EthicalHR professionals are the conscience of the company,as well as the keepers of confidential information. Asyou serve the needs of top management, you alsomonitor their actions toward employees to be sure thatpolicies and regulations are followed. You need to beable to push back when they aren’t in order to keep thefirm on the straight and narrow. Not an easyresponsibility!

Dual FocusEmployees expect human resources professionals toadvocate for their concerns, yet you must also enforcetop management’s policies. The HR professional whocan pull off this delicate balancing act wins trust from allconcerned.

There are times you must make decisions to protectthe individual and other times when you protect theorganization, its culture, and values. These decisionsmay be misunderstood by some, and you may catchflak because of it, but you know that explaining yourchoices might compromise confidential information.That’s something you would never do.



Conflict Management and Problem SolvingNews flash! Everyone doesn’t always get along witheveryone else. High productivity demands that peoplework together at least civilly. HR has to find ways toallow that to happen. And that’s to say nothing of themyriad other problems that hit HR’s in-box—you can’tbe effective without problem-solving ability.

Change ManagementMost companies today are in a constant state of flux.Task forces, matrices, and teams spring into being, dotheir jobs, and disband as others form. Hierarchies havebeen squashed, and companies have four or fivegenerations working side by side. A lot of people arefreaked out by what’s going on. HR has to help everyonecope with the constant changes.

Tips for Time Management• Realize that time management is a myth• Find out where you’re wasting time.• Create time management goals.• Implement a time management plan.• Use time management tools.• Prioritize ruthlessly.• Learn to delegate and/or outsource.• Establish routines and stick to them as much as

possible.• Get in the habit of setting time limits for tasks.• Be sure your systems are organized.• Don’t waste time waiting.

Advantages of Time Management In HumanResource• Reduction in stress level• Provides focus on the task• Gain self-confidence• Challenge your productivity• Have an instinct for achievement• Time to relax and do recreational activities• Financial Soundness• Become Healthy

Disadvantages of Time Management• Non-clear Objectives• Mismanagement• Obstacles• Inactivity: • Load of different works at one time• Fatigue and stress become part of life• No time for recreation

ConclusionTime management is an essential skill that needs to bemastered for academic and work purposes. Analysis andself-reflection on the existing time managementpractices are a good start in coming up with more effectiveand efficient ones. Identifying the strengths andweaknesses will lead someone to come up with a moreworkable plan / schedule.The activities have been sointeractive and comprehensive designed to guide youdevelop your own time management strategies. Timemanagement starts with the right attitude and mindset.Once you have developed these, you will become morepunctual, more well-organized, and flexible with your time.In other words, you will be having a smooth-sailing,stress-free, and happy life.



REEN BANKING IN INDIA

1. Associate Professor, Dr.N.G.P Arts and Science College, Coimbatore.2. Research Scholar, Bharathiyar University, Coimbatore .

Dr. Abirami1

IntroductionSustainable development has emerged as a newparadigm of development in response to the currentdiscourse of development that over-exploits naturalenvironment for economic prosperity. The sustainabledevelopment can best be achieved by allowing marketsto work within an appropriate framework of cost efficientregulations and economic instruments. One of the majoreconomic agents influencing overall industrial activityand economic growth is the financial institutions suchas banking sector. Banking sector is generallyconsidered as environmental friendly in terms ofemissions and pollutions. Internal environmental impactof the banking sector such as use of energy, paper andwater are relatively low and clean.

What is Green Banking?Green banking is like a normal bank, which considersall the social and environmental/ecological factors withan aim to protect the environment and conserve naturalresources. It is also called as an ethical bank or asustainable bank. They are controlled by the sameauthorities but with an additional agenda toward takingcare of the Earth’s environment/habitats/resources.

Some banks adopted to “go green” concept• Indus ind bank• State bank of India• ICICI bank• IDBI bank

What are the Green Banking Coverage’s?Green banking coverage includes:• Sustainable banking• Ethical banking• Green mortgage• Green loan• Green credit cards• Green saving accounts• Green checking• Green money market• Green cds• Online banking• Mobile banking• Remote deposit(RDC)

Benefits of Green Banking• Basically Ethical (Green) banking avoids as much

paper work as possible and rely on online/electronictransactions for processing so that you get greencredit cards and green mortgages. Less paperworkmeans less cutting of trees.

• Creating awareness to business people aboutenvironmental and social responsibility enabling themto do an environmental friendly business practice.

• Green (Ethical) banks adopt and implementenvironmental standards for lending, which is reallya proactive idea that would enable eco-friendlybusiness practices which would benefit our futuregenerations.

Imperatives of Green BankingGreen banking is very important in mitigating the followingrisks involving the banking sector:i. Credit Risk: Due to climate change and global

warming, there have been direct as well as indirectcosts to banks. It has been observed that due toglobal warming, there have been extreme weatherconditions which affect the economic assets financedby the banks, thus leading to high incidence of creditdefault. Credit risk can also arise indirectly whenbanks lead to companies whose businesses areadversely affected due to changes in environmentalregulation.

ii. Legal risk: Banks, like other business entities, facelegal risk if they do not comply with relevantenvironmental regulation. They may also face risk ofdirect lender liability for cleanup costs or claims fordamages in case they actually take possession ofpollution causing assets.

iii. Reputation Risk: Due to increasing environmentalawareness , banks are more prone to reputation risk,if their direct or indirect actions are viewed as sociallyand environmentally damaging. Reputation risksemerge from the financing of environmentallyobjectionable projects.

Green Banking: International InitiativesThe financial sector’s growing adherence to environmentalmanagement system is attributed to the direct and

Mary Saranya .J2



indirect pressures from international and local NonGovernmental Organisations (NGOs), multilateralagencies and in some cases the market throughconsumers. In the early 1990s, the United NationsEnvironment Programme (UNEP) launched what is nowknown as the UNEP Finance Initiative (UNEPFI).

All the international initiatives towards integratingenvironmental concerns into business operation of banksare voluntary in nature and are meant to promote acommon good of a better ecosystem. So demand forgreen money is a precondition of green banking if it willbe voluntary. A Government legislation that makes banksaccountable for the misdeeds of their clients will helppromotes green banking.

Green Banking in IndiaIndian industry faces the challenges of controllingenvironmental impact of their business i.e. reducingpollution and emission of their clients. Thoughgovernment has been trying to address the issue byframing environmental legislations and encouragingindustry to follow environmental technologies andpractices, public awareness and inability to derivecompetitive advantage by producing eco-friendlyproducts.

India’s is the world’s sixth largest and second fastestgrowing country in terms of producing green housegases. Delhi, Mumbai and Chennai are the three of theworld s ten most polluted cities. The major pollutingindustries in India are-a. Primary metal industries namely zinc, copper, steel

etc.b. Paper & pulpc. Pesticides/insecticidesd. Refinese. Fertilizersf. Tanneriesg. Sugarh. Textilesi. Chemicals/pharmaceuticals etc.

The banking operation and investment by financialinstitutions should take care of environmentalManagement of these polluting industries by improvingthe overall environment, the quality and Conversation oflife, level of efficiency in using materials and energy,quality of services and Products. In this context, therole of banking sector, which is on major financingsources to the Industries, assumes high importance.

The environmental regulations in India can be broadlyclassified into two broad categories i.e. command andcontrol regulations and liability law. The command andcontrol regulations are ex ante regulations that are

designed to dissuade environmentally damagingprojects. The liability laws are ex post in nature and areimplemented by enforcing authorities through imposingfines, closing down the defaulting industries etc.Thus inthe present context, it is equally important for banks toguard themselves against the conversion of the nowperforming assets into non-performing one in the future.Realization of these facts by banks will certainty makethem fast adopt the concept of Green Banking.

Banks need to be more careful in India about theenvironmental aspects of their clients and productsbecause1. Future of exports and product market are going to go

through stringent environmental rules and eco-friendlyproduct will have better market.

2. Increased demand for pollution controls equipmentswill require more financial assistance from banks.

3. Reserve Bank of India (RBI) may follow environmentalguidelines for the banks in the lines of IFC and AsianDevelopment Bank etc

4. Recent announcement of the government to useeconomic instruments for environmental control mayinclude Banks in future

5. Big investment projects supported by internationalorganizations like the World Bank and ADB requireEnvironmental Impact Assessment (EIA).

Therefore the banks should begin implementingprocedures like1. Assessment of risk due to environment2. Environmental audit management3. Assessment of credit requirement and loan follow

up before investing on different projects.

Green Banking StrategiesIndian Banks can adopt green banking as a businessmodel for sustainable banking by launching some of thefollowing strategies:1. Carbon credit business: Under the Kyoto protocol,

Clean Development Mechanism (DM) provides forco-operation between annexure –1 and nonannexure-1 (developing) countries. The operationalmechanism of CDM’s involves an investment by alegal entity from an annexure-1 country into a projectin non-annexure-1 country, which results in emissionreduction. These emission reductions have to becertified by an appropriate authority and thesecertified Emission Reductions (CERs) which arecommonly known as carbon credits can be used tomeet the commitments of annexure-1 countries underthe Kyoto protocol. These carbon credits are tradedin the markets.



2. Green Banking Financial Products: Indian banksshould develop innovative green banking financialproducts which can directly or indirectly help in thereduction of carbon emissions. These banks canintroduce a ‘Green Fund’ to provide climate consciouscustomers the option of investing in environmentalfriendly projects. Banks can also introduce green bankloans with financial concessions for environmentalfriendly products and projects. Besides introducingspecific green banking products, banks canincorporate an Environmental Impact Assessment(EIA) in their project appraisal while financing anyproject to measure the nature and magnitude ofenvironmental impact as well as suggestenvironmental risk mitigation measures.

3. Green Mortgages: Banks such as Citigroup Inc.,Bank of America, and JP Morgan Chase &Companyare just a few of the mortgage lenders offering specialdiscounts on mortgages used to build or updatebuildings and homes to be more green. One of thereasons for the push for green mortgages is that greenbuilding and rebuilding tends to incorporate moreenergy-efficient materials and building plans. Thereare two types of green mortgages: the EnergyImprovement Mortgage – it’s like a second mortgagethat is to be used to upgrade a home or building toenergy efficient by installing energy saving items suchas solar panels and improved insulation - and theEnergy Efficient Mortgages for the construction ofnew energy efficient homes and buildings.

4. Carbon Footprint Reduction: Carbon foot-print isa measure of the impact of our activities on theenvironment. It relates to the amount of GHG we areproducing in day-to-day business while burning fossilfuels for electricity, heating, transportation, etc.Banks can reduce their carbon footprints by adoptingthe following measures:a. Paper-less Banking: As banks have

computerized their branches, there is ample scopefor doing paperless or less-paper banking. MostlyPSBs use huge quantities of paper for officecorrespondence, audit reporting, recording publictransactions,etc. These banks can switch over toelectronic correspondence and reporting. Banksshould encourage their customers also to switchover to electronic transactions and popularize e-statements.

b. Energy Consciousness: Developing energy-consciousness, adopting effective office timemanagement and automation solutions and usingcompact fluorescent lighting ( CFL) can helpbanks save energy consumption considerably.Banks can conduct energy audits in all their officesfor effective energy management. They can also

switch over to renewable energy ( solar, wind, etc.)to manage their offices and ATMs

c. Using Mass Transportation System: PSBs canbecome fuel efficient organization by providingcommon transport for group of officials posted atone office.

d. Green Buildings: The Indian banking industryuses more than one lakh premises for their officesand residential houses throughout the country.These banks should develop and use greenbuildings for their office and employeeaccommodation.

These measures will not only help banks reduce theircarbon footprint but also save the operational costsconsiderably.

5. Social Responsibility Services: As part of the greenbanking strategies, Indian banks can initiate varioussocial responsibility services such as tree plantationcamps, maintenance of parks, pollution check-upcamps, etc.

Future Trends in Green bankingThere is a new green bank that may (or may not) belaunching sometime soon. The bank is called e3bankand has been reported to be moving through the FDICapproval process. What does e3 mean? It representativeof the mission of the bank as outlined below:• Build prosperous and sustainable enterprise through

sound investments in people and our planet.• Protect the health of our planet’s environment,

which supports life and our economy.• Increase social equity by being fair to all people

affected by our decisions and by improving the qualityof life in the communities we serve.

Now this sounds like a green bank worth supporting. Inaddition to openly supporting the environment, e3bankplans to have an online banking platform and greenbanking features to attract eco-friendly customers.Features that are planned include:• Bank when and where you want to online or with

your smart phone• Automatically track your expenses on your secure

personalized banking site• Connect to e3bankers through webcast, chat and text• Deposit checks from your home scanner• Process and sign loan documents in a fully

paperless, secure environment

Green Bank Report is dedicated to reporting onenvironment-friendly banks and online banking serviceslike those planned by e3bank. The fact is we need morebanks dedicated to corporate sustainability.



Suggestions for Eco-Friendly Banking:• Green Credit Cards:

A green credit card allows cardholders to earn rewardsor points which can be redeemed for contributions toeco-friendly charitable organizations.

• Online banking:Converting to an online savings account and mobilebanking is the easiest way that you can do your partto bank green and help the environment.

• Paper-less banking:Green banking includes setting up direct deposit toreceive your paychecks, receiving electronicstatements from your bank and by paying bills online.All of these steps can drastically reduce the amountof paper produced by your bank. Online banking andmobile banking are also highly effective ways to keeptrack of your finances and to avoid late payment fees.

ConclusionIn a rapidly changing market economy whereglobalization of markets has intensified the competition,the industries and firms are vulnerable to stringent publicpolicies, severe law suits or consumer boycotts. Thiswould affect the banks and financial institutions torecover their return from investment. Thus, the banksshould play a pro-active role to take environmental andecological aspects as part of their lending principle whichwould force industries to go for mandated investment forenvironmental management, use of appropriatetechnologies and management systems.

Indian Banks can transform green banking for marketingof other products and services or launch green bankingbased products and services. In-spite of a lot ofopportunity in green banking, RBI notifications, Indianbanks are far behind in the implementation of greenbanking .only some of banks have initiated towards greenbanking. There is more scope for all banks and theycan not only save our earth but can transform the wholeworld towards energy conscious. Banks must literatetheir customers about green banking and adopt allstrategies to save earth and build banks image. .Notonly “Green Banking” will ensure the greening of theindustries but it will also facilitate in improving the assetquality of the banks in future.

References• Jan Willem van Gelder, (2006), “Sustainable Banking

in Practice: A closer look at the nominees for the2006 Financial Times Sustainable Banking Awards”,Banktrack., Profundo.

• Jeucken, M (2001) “Sustainable Finance andBanking, The finance Sector and The Future of thePlanet”. London, Earthscan.

• .Starogiannis, D (2006) “What is EnvironmentalResponsibility of Banks” UNEP FI Conference, June.

• Thompson,-Hilary-J, (1995) “The Role of FinancialInstitutions in Encouraging Improved

• Environmental Performance” in Rogers,-Michael-D.,ed. Business and the environment.

• New York: St. Martin’s Press; London: MacmillanPress; 271-81



CUSTOMER PREFERENCE TOWARDS ORGANIC FOOD PRODUCTS

1. Research Scholar, Bharathiyar University, Coimbatore.2. Associate Professor, SNR SONS College, Coimbatore.

B. Subadradevi1

IntroductionOrganic food products strongly believe that food has aprofound impact on one’s health. Unfortunately, in themodern world, quality of food is severely compromisedto meet the ever-growing demand. Organic foodssymbolize the adage ‘Prevention is better than cure’.Organic farming, in simple terms, means cultivationwithout using chemical-based pesticides and fertilizers.Age-old and time-tested farming techniques likemulching, crop rotation, etc., are implemented. Moreover,only natural manures and pesticides, namely, cow dungand cow’s urine, goat manure, chicken manure, varietiesof composts, leaf extracts, neem-based products, etc.,to cite a few, are used. Organic farming ensures thatthe natural goodness of the produce vitamins, minerals,nutrients and taste are not lost. This in turn providespriceless health benefits to the consumer. Nonuse ofchemical-based pesticides and fertilizers protects thefarmer from the ill effects of the same and has a positiveimpact on our ecosystem. For the vast majority of itshistory, agriculture can be described as having beenorganic; only during the 20th century was a large supplyof new products, generally deemed not organic,introduced into food production. The organic farmingmovement arose in the 1940s in response to theindustrialization of agriculture.

In the rush to grow more and more crops, to satisfygrowing demand of food, farmers use more chemicalmanures to grow faster. It has been known that Farmersuse more than 400 artificial fertilizer & pesticides duringfarming in different ways. These chemicals will beincorporated in the food which is very harmful for thehealth.

If the nutritive value of the Organic Products is takeninto consideration, then the prices marked are definitelyworth paying. Comparing Organic Products to Chemicallygrown farm products, the Organic Products are healthierand more nutritive. Several diabetic, Hypertension (highBP), cardiac, skin, cancer and gastric patients are ourclients who have shown good improvement in health byconsuming Organic food.

Public perceptionThere is widespread public belief that organic food issafer, more nutritious, and better tasting than

conventional food. Consumers purchase organic foodsfor different reasons, including concerns about the effectsof conventional farming practices on the environment,human health, and animal welfare.

The most important reason for purchasing organic foodsseems to be beliefs about the products’ health-givingproperties and higher nutritional value. These beliefs arepromoted by the organic food industry, and have fueledincreased demand for organic food despite higher pricesand difficulty in confirming these claimed benefitsscientifically. Organic labels also stimulate the consumerto view the product as having more positive nutritionalvalue.

Psychological effects such as the “halo” effect, whichare related to the choice and consumption of organicfood, are also important motivating factors in the purchaseof organic food. The perception that organic food is low-calorie food or health food appears to be common.

Great TasteOrganic food tastes delicious and it makes sense whyit does- healthy soil and plants make food that tastesthe best. In a number of studies people who have donetaste tests almost always choose the wonderful tasteof organic food over processed and food tainted bychemicals. Fruits and vegetables taste much morevibrant and strong if they are grown organically which isjust another added benefit of the healthy powers of healthyorganic foods.

High StandardsOrganic foods have to meet extremely high standardsto qualify to be called organic. This is why most foodsare not organic, because companies don’t want to gothrough the strict processes required of them to bedeclared organic. The certification process that foodshave to go through is designed to make sure the publicis clear that the food was grown in the proper way aswell as processed and handled in the ways in which thecertification standards recommend.

Soil ErosionSoil erosion is a huge problem currently, and we as aplanet are looking at the biggest erosion problem in thehistory of the world because of the way that most farmers

Dr. R. Chitra2



do their business. Nowadays, with no regards for theland they are farming. Organic farmers focus a lot oftheir time and energy in farming in the way that bestrespects the land. They understand that the soil isbasically the foundation of farming and without it we wouldbe unable to farm. So they focus a great deal onprotecting the soil through organic farming and areinvolved in programs to conserve and restore the soilthat they find so valuable. This not only earns them agreat deal of respect from fans of organic food, but italso is a feel good example for farmers all around theworld on how they can be successful and do the rightthing at the same time.

Chemical compositionWith respect to chemical differences in the compositionof organically grown food compared with conventionallygrown food, studies have examined differences innutrients, anti-nutrients, and pesticide residues. Thesestudies generally suffer from confounding variables, andare difficult to generalize due to differences in the teststhat were done, the methods of testing, and becausethe vagaries of agriculture affect the chemicalcomposition of food; these variables include variationsin weather (season to season as well as place to place);crop treatments (fertilizer, pesticide, etc.); soilcomposition; the cultivar used, and in the case of meatand dairy products, the parallel variables in animalproduction. Treatment of the foodstuffs after initialgathering (whether milk is pasteurized or raw), the lengthof time between harvest and analysis, as well asconditions of transport and storage, also affect thechemical composition of a given item of food. Additionally,there is evidence that organic produce is drier thanconventionally grown produce; a higher content in anychemical category may be explained by higherconcentration rather than in absolute amounts.

NutrientsMany people believe that organic foods have highercontent of nutrients and thus are healthier thanconventionally produced foods. However, scientists havenot been equally convinced that this is the case as theresearch conducted in the field has not shown consistentresults.

Organically produced foodstuffs are not richer in vitaminsand minerals than conventionally produced foodstuffs.The results of the systematic review only showed a lowernitrogen and higher phosphorus content in organicproduced compared to conventionally grown foodstuffs.Content of vitamin C, calcium, potassium, total solublesolids, copper, iron, nitrates, manganese, and sodiumdid not differ between the two categories.

A 2016 systematic review and meta-analysis found thatorganic meat had comparable or slightly lower levels ofsaturated fat and monounsaturated fat as conventionalmeat, but higher levels of both overall and n-3polyunsaturated fatty acids. Another meta-analysispublished the same year found no significant differencesin levels of saturated and monounsaturated fat betweenorganic and conventional milk, but significantly higherlevels of overall and n-3 polyunsaturated fatty acids inorganic milk than in conventional milk.

Anti-nutrientsThe amount of nitrogen content in certain vegetables,especially green leafy vegetables and tubers, has beenfound to be lower when grown organically as comparedto conventionally. When evaluating environmental toxinssuch as heavy metals, the USDA has noted thatorganically raised chicken may have lower arsenic levels.Early literature reviews found no significant evidence thatlevels of arsenic, cadmium or other heavy metals differedsignificantly between organic and conventional foodproducts.

Pesticide residuesThe amount of pesticides that remain in or on food iscalled pesticides residue. In the United States, before apesticide can be used on a food crop, the U.S.Environmental Protection Agency must determinewhether that pesticide can be used without posing arisk to human health.

The American Cancer Society has stated that noevidence exists that the small amount of pesticideresidue found on conventional foods will increase therisk of cancer, though it recommends thoroughlywashing fruits and vegetables. They have also statedthat there is no research to show that organic foodreduces cancer risk compared to foods grown withconventional farming methods.

The Environmental Protection Agency maintains strictguidelines on the regulation of pesticides by setting atolerance on the amount of pesticide residue allowed tobe in or on any particular food.Although some residuemay remain at the time of harvest, residue tend to declineas the pesticide breaks down over time. In addition, asthe commodities are washed and processed prior to sale,the residues often diminish further.

Bacterial contaminationPrevalence of E. coli contamination was not statisticallysignificant (7% in organic produce and 6% in conventionalproduce). While bacterial contamination is commonamong both organic and conventional animal products,differences in the prevalence of bacterial contaminationbetween organic and conventional animal products werealso statistically insignificant. Organic meat productionrequirements



Health and safetyThere is little scientific evidence of benefit or harm tohuman health from a diet high in organic food, andconducting any sort of rigorous experiment on thesubject is very difficult. In ten of the included studies(83%), a primary outcome was the change in antioxidantactivity. Antioxidant status and activity are usefulbiomarkers but do not directly equate to a healthoutcome. Of the remaining two articles, one recordedproxy-reported measures of atopic manifestations as itsprimary health outcome, whereas the other articleexamined the fatty acid composition of breast milk andimplied possible health benefits for infants from theconsumption of different amounts of conjugated linoleicacids from breast milk.”In addition, as discussed above,difficulties in accurately and meaningfully measuringchemical differences between organic and conventionalfood make it difficult to extrapolate healthrecommendations based solely on chemical analysis.With regard to the possibility that some organic foodmay have higher levels of certain anti-oxidants, evidenceregarding whether increased anti-oxidant consumptionimproves health is conflicting. There is no support in the scientific literature that thelower levels of nitrogen in certain organic vegetablestranslate to improved health risk.

Pesticide exposureThe main difference between organic and conventionalfood products are the chemicals involved duringproduction and processing. The residues of thosechemicals in food products have dubious effects on thehuman health. All food products on the market includingthose that contain residues of pesticides, antibiotics,growth hormones and other types of chemicals that areused during production and processing are said to besafe.

Claims of improved safety of organic food have largelyfocused on pesticide residues. These concerns aredriven by the facts that “1) acute, massive exposure topesticides can cause significant adverse health effects;2) food products have occasionally been contaminatedwith pesticides, which can result in acute toxicity; and3) most, if not all, commercially purchased food containstrace amounts of agricultural pesticides.” However, asis frequently noted in the scientific literature: “What doesnot follow from this, however, is that chronic exposureto the trace amounts of pesticides found in food resultsin demonstrable toxicity. This possibility is practicallyimpossible to study and quantify;” therefore firmconclusions about the relative safety of organic foodshave been hampered by the difficulty in proper study

design and relatively small number of studies directlycomparing organic food to conventional food.

ConclusionThis is probably the most obvious but there are twodifferent aspects of your health that are impacted byyour choosing organic food: what you’re NOT gettingand what you ARE.The biggest advantages of organic food include:• Nutrient-Dense Food• Stronger, More Energetic Body

No pesticides, chemicals, or a processed additivebogging down your system means a smaller risk ofdisease, illness, and disorders in yourself. Nothingleaves you feeling tired and gross like unhealthy junkfood.

• It Tastes BetterTrue, it may not taste as good if you’re accustomedto the addictive qualities of junk food additives, suchas processed sugar and MSG. But after just a shorttime of your body experiencing truly healthy food,you’ll be craving it. No, really, you will. And all thecrap will start having a bad after-taste.

• It’s CheaperAlthough some organic food and products are moreexpensive, you actually WILL save money in severalways:1. Whole foods help to prevent major and minor

diseases and illnesses, meaning lower health carecosts and less likelihood of missing work. One ofthe hidden advantages of organic food.

2. Your brain tells your body to eat partially basedon the nutrients it receives. Now that we knoweating organic means more nutrients, it meansyour brain won’t tell your body to keep eating likeit does with junk food.

3. Buying organic food from the farmer’s market isincredibly inexpensive. You also have the optionof bartering with farmers for good or services.

4. Growing your own can become free when you getyour organic vegetable garden in place!

5. And this might not be one of the advantages oforganic FOOD, but when it comes to non-foodproducts, organic merchandise are generally ahigher quality, so you don’t need to buy a newcotton shirt every year when the old one falls apart.

6. Want some practical tips on making organic foodcheaper? Read more about how to make organicfood affordable here.



• Safe from Dangerous Pesticides• Peace of Mind• Safe from Scary Chemicals

Herbicides and fertilizers have been connected with various cancers, immune disorders, infertility, cardiac disease,hypertension, and numerous other diseases.Things like genetically engineered foods (Franken foods, such a tomatoes spliced with fish genes for coldweather tolerance), food fertilized with sewer sludge, appetite enhancers given to animals and synthetic hormonesare just a few more advantages of organic food.



MARKETING CHALLENGES FOR THE NEWLY EMERGING INDUSTRIES

1. II B.COM CM, Sri Krishna Arts and Science College, Coimbatore.2. II B.COM CM, Sri Krishna Arts and Science College, Coimbatore.3. II B.COM CM, Sri Krishna Arts and Science College, Coimbatore.

K. Abiraami1 Ashwathi GovindanKutty3S. K. Swarnika2

AbstractThis paper discussed about the marketing challenges for the newly emerging industries in the market. Emergingindustries and services are broadly understood as entirely new industrial sectors driven by applications of newtechnologies or other radical innovations or existing economic activities that undergo renewal and transformation,evolving and upgrading and/or merging into new industries.”A group of companies in a line of business formedaround a new product or idea that is in the early stages of development. An emerging industry typically consists of justa few companies and is often centered on a new technology. Barriers to entry in emerging industries can be lowbecause of limited competition, but it may be difficult to secure financing to grow the company.

Introduction:New industries and services emerge not only as a resultof new technologies and entrepreneurial savvy, but alsoas a result of the renewal, transformation or intersectionof existing economic activities. The evolution of economicactivities occurs to take advantage of new opportunities(e.g. technological advances) and address new needs(related to e.g. climate change, energy and publicwelfare). Emerging industries can thus be grouped intothree different types:Existing knowledge applied in new ways to existingneeds;Existing knowledge applied to new needs; andNew knowledge applied to existing or new needs.

These industries are not captured by statistics, theymay be conducted by firms operating in differenttraditional industries but they are unified by benefitingfrom the global demand developing around the needsrelated to the above challenges. They are emergingbecause in many cases they have not yet significantlyperformed; they are only being formed / early in theindustry lifecycle

Entering new markets: Porter’s five forces ofcompetitionBusiness economist Michael Porter identified thefollowing five forces of competition, which can be usedto analyze an industry or market and formulate acompetitive strategy:• The threat of new entrants or barriers to entry.• Intensity of rivalry among existing competitors in the market• The threat posed by substitute products.• The bargaining power of buyers.• The bargaining power of suppliers.

A starting point to analyzing the industry is to look atcompetitive rivalry. This term describes the intensity ofcompetition between existing players (companies) in anindustry. If entry to an industry is easy then competitiverivalry will likely to be high. If it is easy for customers tomove to substitute products for example from coke towater then again rivalry will be high.

Challenges in Service MarketingManaging, growing, and profiting with both product andservice businesses are challenging tasks. But thechallenges are different from one to the other. Listedbelow are some of the most common and difficultchallenges of growing and managing consulting,professional, or technology service businesses that don’tnecessary apply to product businesses.• Marketing Intangibles:This makes services difficult

to conceptualize and evaluate from the clientperspective, creating increased uncertainty andperception of risk. From the firm’s perspective, serviceintangibility can make services difficult to promote,control quality, and set price.

• Services are often produced and consumedsimultaneously. This creates special challenges inservice quality management that product companiesdo not even consider. Products are tested before theygo out the door. If a product has quality problemswhile in production, the company can fix them andcustomers are none the wiser. Service productionhappens with the customer present, creating a verydifferent and challenging dynamic.

• Trust is necessary: Some level of trust in the serviceorganization and its people must be establishedbefore clients will engage services. This is asimportant, sometimes more important, than theservice offerings and their value proposition.



Marketing Challenges in the Service BusinessService firms face different challenges than companiesthat market physical products. Service firms aremarketing something intangible that the customer cannotexperience until the firm has delivered it. While someaspects of service marketing are similar to those ofproduct marketing, the service sector needs to placespecial emphasis on adding value, differentiation andspecialization.

ValueA service firm must demonstrate value to customers andprospects. Services such as accountancy, computermaintenance and insurance are essential to the efficientday-to-day operations of a business. However, servicessuch as marketing, training or consultancy are moreperipheral. Service firms have to demonstrate that thoseservices can add value to the customer’s business.Training, for example, can improve the productivity andperformance of the workforce. A firm may also need toshow that marketing services can improve a company’scompetitive advantage. Or that consultancy can help acompany improve its operations and profitability.

Service DevelopmentDevelopment costs for service firms are high comparedto those of a product company. Service firms cannotkeep standard services in stock or take advantage ofeconomies of scale. They must create a new version ofa service for each assignment, customized to the needsof individual customers. To create a service, arepresentative discusses the customer’s requirements,prepares a service specification for the customer’sapproval and brings together the elements needed todeliver the service.

CompetitionCompetition for service firms is both direct and indirect.Direct competitors include other service businessesoffering similar services and manufacturers who provideservices that support their products. A firm offeringcomputer maintenance services, for example, facescompetition from other maintenance firms as well asthe service divisions of computer manufacturers. Servicefirms also face a form of indirect competition fromcustomers who provide services from their own internalresources. To persuade customers to outsource theiroperations, service firms must demonstrate that theiroffering is both superior and cost effective.

DifferentiationCustomers can only judge the quality of a service whenthey have used it. They cannot inspect the service inthe same way they can examine a product on a shelf.Service firms must therefore find ways to differentiate

themselves from competitors. Accreditation with arecognized body is one way of demonstratingprofessionalism. Firms aim to build their reputation bypublishing authoritative articles or speaking at industryseminars. Specialization can also create a point ofdifference. A firm offering training service, for example,can differentiate itself by focusing on tailored training fora specific sector, such as financial services.

Product vs. Service Marketing ChallengesCompanies that are marketing a product face differentchallenges compared with those that are promoting aservice. If you’re transitioning from marketing productsto services or vice versa, you have to know andunderstand these differences to effectively promote andsell. Understanding the different challenges in productand service marketing can help you establish the rightapproach.

TangibilityA product is tangible, which means the customer cantouch and see the product before deciding to make apurchase. Items such as packaging and presentationmay compel a customer to purchase a product. Services,on the other hand, are not tangible, which can makethem more difficult to promote and sell than a product.

Relationship and ValueProducts tend to fill a customer’s need or want, socompanies can use this to sell a product. A service ismore about selling a relationship and the value of therelationship between the buyer and seller of the service.For example, a car is something a buyer can touch andsee as well as use. A service, such as lifestyle coaching,for example, is not tangible. A lifestyle coach may beable to assist clients in creating a life plan andimplementing steps to transform his life into one thatthe client wants to live, but it is not something tangiblethat the client can place in his home and look at everyday. Therefore, the client needs to perceive the value ofthe service, which can be harder to get across.

One versus ManyMarketing products tends to involve multiple productsthat make up the line. For example, cleaning productmanufacturers tend to market not just one cleaningproduct. Instead, they have a line of cleaning productsto serve the various needs of their customers. Services,on the other hand, typically have a single option. It canbe harder to promote and sell the reputation of one singleservice over the benefits of many different products.

Comparing QualityMeasuring the quality of a product is easier thanmeasuring that of a service. If a customer buys a cleaning



product to clean the kitchen sink and it doesn’t do thejob, the customer knows the value of the product is zero.On the other hand, it is harder to measure the quality ofa service.

Return FactorIf a customer purchases a product and it doesn’t workas it is supposed to, the customer can return the productfor her money back or at least to receive a store credit.A service is consumed as it is offered, so it lacks thereturn factor that a product has. Some service providersovercome this by offering money-back guarantees.

Marketing Strategies for New and Growing Markets• Pioneer Strategy• Follower Strategy• Mass-Market Penetration• Niche Penetration• Skimming and Early Withdrawal• Marketing Components: Mass-Market Strategy• Marketing Components: Niche Strategy• Marketing Components: Skimming Strategy• Marketing for Share Leaders• Marketing for Share-Maintenance• Fortress or Defense Strategy• Flanker Strategy• Confrontation Strategy• Market Expansion• Contraction or Withdrawal Strategy• Marketing for Followers• Marketing for Share Growth• Frontal Attack Strategy• Leapfrog Strategy• Flanking and Encirclement

Pioneer StrategyAn effective marketing program begins with a solid plan. If you choose to work with Pioneer Strategies, our firststep will be to develop a well-thought-out strategy thatclearly defines what you want to accomplish, why youwant to accomplish those things, and how we canachieve your goals. Next, we will work hand-in-handwith you to execute your marketing campaign. We willserve as both a strategic advisor and contract marketingdepartment to help you realize your vision for yourbusiness or organization.

Follower Strategy‘Market Follower strategy’ is a strategy of productimitation. The innovator bears the expense of developingthe new product, bringing in the technology, breaking entrybarriers and educating the market. However, another firmcan come along and copy or improve on the new product.

Although it probably will not overtake the leader, thefollower can achieve high profits because it did not bearany of the innovation expense. Many companies preferto follow rather than challenge the market leader. Manyrunner-up companies do not challenge the market leader.The four follower strategies are as given below:1. Counterfeiter: Copies the leader’s product and

packages and sells it on the black market. E.g.piratedmusic/ movie CDs

2. Cloner: Copies the leader’s products as it is as wellas name, packaging with slight variations.

3. Imitator: Copies some of the things from leader’sproduct but maintains difference in packaging, andother factors.

4. Adaptor: Launches improved products over that ofthe innovator’s.

Mass-Market PenetrationThe ultimate objective of a mass-market penetrationstrategy is to capture and maintain a commanding shareof the total market for the new product. Thus, the criticalmarketing task is to convince as many potentialcustomers as possible to adopt the pioneer’s productquickly to drive down unit costs and build a largecontingent of loyal customers before competitors enterthe market.

Niche PenetrationEven when a new product-market expands quickly,however, it may still be possible for a small firm withlimited resources to be a successful pioneer. In suchcases, though, the firm must define success in a morelimited way. Instead of pursuing the objective of capturingand sustaining a leading share of the entire market, itmay make more sense for such firms to focus their effortson a single market segment. This kind of nichepenetration strategy can help the smaller pioneer gainthe biggest bang for its limited bucks and avoid directconfrontations with bigger competitors.

A niche penetration strategy is most appropriate whenthe new market is expected to grow quickly and thereare a number of different benefit or applications segmentsto appeal to. It is particularly attractive when there arefew barriers to the entry of major competitors and whenthe pioneer has only limited resources and competenciesto defend any advantage it gains through early entry.

Skimming and Early WithdrawalA firm has the resources to sustain a leading position ina new product-market, it may choose not to. Competitionis usually inevitable, and prices and margins tend todrop dramatically after followers enter the market.Therefore, some pioneers opt to pursue a skimming



strategy while planning an early withdrawal from themarket. This involves setting a high price and engagingin only limited advertising and promotion to maximizeper-unit profits and recover the product’s developmentcosts as quickly as possible. At the same time, the firmmay work to develop new applications for its technologyor the next generation of more advanced technology.Then when competitors enter the market and marginsfall, the firm is ready to cannibalize its own product withone based on new technology or to move into newsegments of the market.

Marketing Components: Mass-Market StrategyThe crucial marketing task in a mass-market penetrationstrategy is to maximize the number of customersadopting the firm’s new product as quickly as possible.This requires a marketing program focused on (1)aggressively building product awareness and motivationto buy among a broad cross-section of potentialcustomers and (2) making it as easy as possible forthose customers to try the new product, on theassumption that they will try it, like it, develop loyalty,and make repeat purchases.

Marketing Components: Niche StrategyThe objectives of a niche penetration strategy are similarto but more narrowly focused than those of a mass-market strategy, the marketing program elements arealso likely to be similar under the two strategies.Obviously, however, the niche penetrator should keepits marketing efforts clearly focused on the targetsegment to gain as much impact as possible from itslimited resources. For example, while a niche strategycalls for the same advertising, sales promotion, personalselling, and trade promotion activities as a mass- marketprogram, the former should use more selective media,call schedules, and channel designs to precisely directthose activities toward the target segment.

Marketing Components: Skimming StrategyOne major difference between a skimming strategy anda mass- market penetration strategy involves PricingPolicies. A relatively high price is appropriate for askimming strategy to increase margins and revenues,even though some price-sensitive customers may bereluctant to adopt the product at that price. This alsosuggests that introductory promotional programs mightbest focus on customer groups who are least sensitiveto price and most likely to be early adopters of the newproduct. This can help hold down promotion costs andavoid wasting marketing efforts on less profitable marketsegments. Thus, in many consumer goods businesses,skimming strategies focus on relatively upscalecustomers, since they are often more likely to be earlyadopters and less sensitive to price.

Marketing for Share LeadersShare maintenance for a market leader involves twoimportant marketing objectives. First, the firm must retainits current customers, ensuring that those customersremain brand loyal when making repeat or replacementpurchases. This is particularly critical for firms inconsumer nondurable, service, and industrial materialsand components industries where a substantial portionof total sales volume consists of repeat purchases.Second, the firm must stimulate selective demand amonglater adopters to ensure that it captures a large share ofthe continuing growth in industry sales. In some casesthe market leader might pursue a third objective:stimulating primary demand to help speed up overallmarket growth. This can be particularly important inproduct- markets where the adoption process isprotracted because of the technical sophistication of thenew product, high switching costs for potentialcustomers, or positive network effects.

Marketing for Share-MaintenanceA business might take a variety of marketing actions tomaintain a leading share position in a growing market.Because share maintenance involves multiple objectives,and different marketing actions may be needed to achieveeach one, a strategic marketing program usuallyintegrates a mix of the actions outlined in the exhibit.

Fortress or Defense StrategyThe most basic defensive strategy is to continuallystrengthen a strongly held current position to build animpregnable fortress capable of repelling attacks bycurrent or future competitors. This strategy is nearlyalways part of a leader’s share-maintenance efforts. Byshoring up an already strong position, the firm canimprove the satisfaction of current customers whileincreasing the attractiveness of its offering to newcustomers with needs and characteristics similar tothose of earlier adopters.

Strengthening the firm’s position makes particularly goodsense when current and potential customers haverelatively homogeneous needs and desires and the firm’soffering already enjoys a high level of awareness andpreference in the mass market. In some homogeneousmarkets, a well-implemented position defense strategymay be all that is needed for share maintenance.

Flanker StrategyOne shortcoming of a fortress strategy is that a challengermight simply choose to bypass the leader’s fortress andtry to capture territory where the leader has not yetestablished a strong presence. This can represent aparticular threat when the market is fragmented intomajor segments with different needs and preferences



and the leader’s current brand does not meet the needsof one or more of those segments. A competitor withsufficient resources and competencies can develop adifferentiated product offering to appeal to the segmentwhere the leader is weak and thereby capture asubstantial share of the overall market.

Confrontation StrategySuppose a competitor chooses to attack the leader headto head and attempts to steal customers in the leader’smain target market. If the leader has established a strongposition and attained a high level of preference and loyaltyamong customers and the trade, it may be able to sitback and wait for the competitor to fail. In many cases,though, the leader’s brand is not strong enough towithstand a frontal assault from a well-funded, competentcompetitor. Even mighty IBM, for instance, lost 20market-share points in the commercial PC market duringthe mid-1980s to competitors like Compaq, whosemachines cost about the same but offered features orperformance levels that were better, and to the cloneswho offered IBM-compatible machines at much lowerprices. Later, the firm’s share of the PC market erodedfurther as companies such as Dell and Gatewayintroduced more convenient and efficient Internet orderingand direct distribution systems and cut prices even more.In such situations, the leader may have no choice but toconfront the competitive threat directly. If the leader’scompetitive intelligence is good, it may decide to moveproactively and change its marketing program before asuspected competitive challenge occurs. Aconfrontational strategy, though, is more commonlyreactive. The leader usually decides to meet or beat theattractive features of a competitor’s offering by makingproduct improvements, increasing promotional efforts,or lowering prices only after the challenger’s successhas become obvious.

Market ExpansionA market expansion strategy is a more aggressive andproactive version of the flanker strategy. Here the leaderdefends its relative market share by expanding into anumber of market segments. This strategy’s primaryobjective is to capture a large share of new customergroups who may prefer something different from the firm’sinitial offering, protecting the firm from future competitivethreats from a number of directions. Such a strategy isparticularly appropriate in fragmented markets if theleader has the resources to undertake multiple productdevelopment and marketing efforts.

Contraction or Withdrawal StrategyIn some highly fragmented markets, a leader may beunable to defend itself adequately in all segments. Thisis particularly likely when newly emerging competitors

have more resources than the leader. The firm may thenhave to reduce or abandon its efforts in some segmentsto focus on areas where it enjoys the greatest relativeadvantages or that have the greatest potential for futuregrowth. Even some very large firms may decide thatcertain segments are not profitable enough to continuepursuing. For instance, Samsung has withdrawn fromthe most price-sensitive consumer electronics segmentsto concentrate on higher-margin products emphasizingcutting-edge technology and hip design.

Marketing for FollowersNot all late entrants to a growing product-market haveillusions about eventually surpassing the leader andcapturing a dominant market share. Some competitors,particularly those with limited resources andcompetencies, may simply seek to build a small butprofitable business within a specialized segment of thelarger market that earlier entrants have overlooked. Aswe have seen, this kind of niche strategy is one of thefew entry options that small, late entrants can pursuewith a reasonable degree of success. If a firm cansuccessfully build a profitable business in a smallsegment while avoiding direct competition with largercompetitors, it can often survive the shakeout period nearthe end of the growth stage and remain profitablethroughout the maturity stage.

Marketing for Share GrowthA challenger with visions of taking over the leading shareposition in an industry has two basic strategic options,each involving somewhat different marketing objectivesand actions. Where the share leader and perhaps someother early followers have already penetrated a largeportion of the potential market, a challenger may haveno choice but to steal away some of the repeat purchaseor replacement demand from the competitors’ currentcustomers.

Frontal Attack StrategyWhere the market for a product category is relativelyhomogeneous, with few untapped segments and at leastone well-established competitor, a follower wanting tocapture an increased market share may have littlechoice but to tackle a major competitor head-on. Suchan approach is most likely to succeed when mostexisting customers do not have strong brand preferencesor loyalties, the target competitor’s product does notbenefit from positive network effects, and when thechallenger’s resources and competencies—particularlyin marketing—are greater than the target competitor’s.But even superior resources are no guarantee of successif the challenger’s assault merely imitates the targetcompetitor’s offering.



Leapfrog StrategyA challenger stands the best chance of attracting repeator replacement purchases from a competitor’s currentcustomers when it can offer a product that is attractivelydifferentiated from the competitor’s offerings. The oddsof success might be even greater if the challenger canoffer a far superior product based on advancedtechnology or a more sophisticated design. This is theessence of a leapfrog strategy. It is an attempt to gain asignificant advantage over the existing competition byintroducing a new generation of products that significantlyoutperform or offer more desirable customer benefits thando existing brands.

Flanking and EncirclementThe military historian B. H. Liddell-Hart, after analyzingbattles ranging from the Greek Wars to World War I,determined that only 6 out of 280 victories were the resultof a frontal attack. He concluded that it is usually wiserto avoid attacking an established adversary’s point ofstrength and to focus instead on an area of weakness inhis defenses. This is the basic premise behind flankingand encirclement strategies. They both seek to avoiddirect confrontations by focusing on market segmentswhose needs are not being satisfied by existing brandsand where no current competitor has a strongly heldposition.

Flank Attack: A flank attack is appropriate when themarket can be broken into two or more large segments,when the leader and/or other major competitors hold astrong position in the primary segment, and when noexisting brand fully satisfies the needs of customers inat least one other segment. A challenger may be able tocapture a significant share of the total market byconcentrating primarily on one large untapped segment.This usually involves developing product features orservices tailored to the needs and preferences of thetargeted customers, together with appropriatepromotional and pricing policies to quickly build selectivedemand.

Encirclement: An encirclement strategy involvestargeting several smaller untapped or underdevelopedsegments in the market simultaneously. The idea is tosurround the leader’s brand with a variety of offeringsaimed at several peripheral segments. This strategymakes most sense when the market is fragmented intomany different applications segments or geographicalregions with somewhat unique needs or tastes.

Emerging Markets Business Strategy that WorksThe principals of New Markets Advisors have anoutstanding track record in emerging markets, includingholding executive positions in industries ranging fromtelecom to banking.

We know that emerging markets are a graveyard ofcorporate ambitions. For every powerhouse in developingcountries, such as Coca-Cola or GE Healthcare, thereare innumerable businesses that struggle to generatedemand or beat savvy local competitors. Ford, Vodafone,and many other well-managed companies have largelyfailed to make money in key emerging markets.

In our view, a big problem is that many firms follow thesame strategy in market after market — target affluentconsumers or businesses in Tier 1 cities, and then tryto have demand trickle down due to brand prestige andthe influence of lead users. Whereas this approach mighthave once worked in major countries, it is increasinglyoutdated except for a handful of luxury brands. Localcompetitors copy winning formulas too quickly,customers insist on offerings that fit their context, anddistribution is hard to secure.

Another culprit is having too great a focus on achievinglow prices. Price is absolutely a factor in these markets— at all tiers of customers — but oftentimes the realemphasis should be on lowering upfront costs, reducingworking capital requirements, and creating new businessmodels.As detailed in the Capturing New Markets the followingapproaches such as:• Creating offerings and business models from a blank

slate, working backwards from the jobs customersare trying to get done

• Targeting middle tiers of household income orbusiness customer revenue

• Attacking competitors asymmetrically• Plotting sales channel strategy, which frequently can

make or break businesses in emerging markets• Building new financial formulas for creating profit• Selecting which countries to target for winning, which

to experiment in, and which to postpone• Creating leverage among widely varying emerging

markets to enhance global capabilitiesOur approaches, while rooted in extensive research,are not theoretical. We have fought and woncompetitive battles in emerging markets, and weknow how to drive from high-level strategy to actionon the ground.

• Determine Strategies• Explore Opportunity Areas• Prioritize Concepts and Create Business Plans • Commercialize Entrepreneurially

Determine StrategiesIndustry transformation often creates as many viewpointsabout growth options as there are employees in a



company. When old business models decay, there canbe a bewildering set of choices about how to stretch acompany into new areas. Frequently firms approach thischallenge by assessing what they do best and findingnew businesses that exploit those competencies. Webelieve this method is like driving by looking only intothe rearview mirror.Instead, companies need to think broadly about the areaswhere they can play.

Explore Opportunity AreasExploration requires structure.A company seeking new growth platforms first needs todetermine a target market. Too often, we have seencompanies pursue instead a hodge-podge ofopportunities driven by personal interests and seniormanagement’s pre-existing pet projects. The resultingset of initiatives can often comprise one-off opportunitiesthat lack the coherence of a sustainable platform.

Create Business PlansFrequently, we find that firms have no lack of good ideas.The challenge is to prioritize them into a handful of well-articulated concepts that underlie realistic business

plans. New Markets is expert at creating objectivemechanisms for assessing concepts and establishinga balanced portfolio of ideas to carry forward.• Idea evaluation cannot be formulaic• A good personal investment portfolio will have a mix

of asset classes• We help to develop business plans behind the leading

ideas

Commercialize EntrepreneuriallyGood entrepreneurs understand that when a venture isattacking new markets, the most powerful assets arelearning. As they find out more from the marketplaceabout key assumptions and risks, entrepreneurs canquickly iterate business plans, stop investing in thingsthat will never work, and double down on bets that looklike winners. If entrepreneurs can structure a series oflearning initiatives, they can enable their businesses toevolve rapidly and beat competitors.

Reference:yourbusiness.azcentral.comsmallbusiness.chron.com



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