A STUDY ON INTERNATIONAL AND DOMESTIC MARKETING OF CASHEW KERNELS BY KERALA STATE CASHEW DEVELOPMENT CORPORATION, KOLLAM, KERALA

JAYAKRISHNAN.S Second year MBA

CHAPTER I INTRODUCTION

1.1 INTRODUCTION
The study was done with data base from The Kerala State Cashew Development Corporation, the largest exporter of Cashew nut in India. Cashew has emerged as a major commodity of international trade. More than 20 countries of the world have taken up Cashew cultivation, and more than 10 countries have started processing and exporting of Cashew kernels. Now more than 60 countries import Cashew kernels. In India Cashew is attaining more and more social economic significance. The cashew industry employs more than five lakhs workers of which more than three lakhs are in processing and exporting sectors over 95% of women from the lowest strata of society, mainly scheduled casts and troches, perhaps, there is no other organized industry. In India which employs more than 95% of women from rural areas. The Kerala State Cashew Development Corporation (KSCDC) a comparatively new entrant under public sector ages was formed in 1970. The birth of the unit was a compulsive one, it aimed at in fusing new life and vigor into a highly labor intensive industry in the private sector employing lakhs of workers, men and women. The industry, vitally important to Kerala on account of its employment potential and its significant role as a foreign exchange earner was in bad shape, coming up against one crisis after another primary for want of raw nuts which have to be imported mainly from Africa and at best the work available to the workers was seasonal and they were not in a position to bear the impact of the period description the industry had face. KSCDC was setup to combat the ills of the industry and put it back on its to the innumerable private sector units saddled with their problem which had repercussions on the hapless workers who have least mobility of labour. The organization study conducted at KSCDC provides an overview of the functioning of various departments of the organization. The study also helps to have an insight about the company.

1.2 INDUSTRY PROFILE

The cashew nut is the rich mans food and poor mans lively hood. The Cashew industry is a traditional industry and is usually highly labour intensive technique. Cashew processing is a female dominant industry. The world demand for Cashew kernels has been rising steadily for several years. The processing of Cashew remains still a highly profitable industry. Cashew nut is one of the important commercial crops of India. Its important derives mainly from the valuable Foreign Exchange it earns for the national economy. Thus the Foreign Exchange increases from513.80 crores in 1997-98 to 605.73 crores in 1998-99. The cashew industry occupies a prominent place in the industrial map of Kerala. At present there are about 288 Cashew processing units in Kerala distributed under the private, public and Co-operative sector. Till 1969 the industry was monopolized by the public sector. But in the corporative sector CAPEX Ltd. was registered in 1984, stated its commercial processing in 1989. The main object of CAPEX society is to rendering assistance to the affiliated societies is members of CAPEX with more than 6,000 labors. The Cashew plantations are spread across almost 32 countries of the world. The

average yield of Cashew crop accords the Globe is 916 kg per hector of land. Countries like India, Brazil, Vietnam and Nigeria boast of more than 90% of the Cashew crops collectively. India itself produces around 4,000 Tones of Cashews per annum. India, once the cashew king of the world, is seen to be at a crucial juncture in the development of the cashew industry in the face of increased international competition from countries like Vietnam, but all may not be lost yet. The largely untapped area of organic cashew farming could open up a new flank for Indian cashew sector to be the global leader it once. This, along with a focus on enhancing domestic production and productivity through a phased replanting programme can nurse the sector back to strength, "Certified organic cashew and fair trade marketing in India are relatively small, but are slowly catching up. These cashew nuts command a price premium of about 30% in the UK. India's export of cashew kernels increased

from 97,550 tons in 2001 to 1, 14,000 tons in 2005-06, but the fall in international price of cashew and the recent rise in rupee value are bound to affect export adversely, they point out. Indias processing capacity of cashew far exceeds its production of raw nuts, with only half of the cashews processed in the country being produced domestically.

1.3 COMPANY PROFILE

The Kerala State Cashew Development Corporation Ltd was incorporated in July 1969 and started Commercial activities in the year 1971 as a company fully owned by the Government of Kerala. From the modest beginning in 1969 Corporation has now grown into a large organization playing a pivotal role in cashew industry in the world. Corporation has now more than a turnover of Rs. 100 cores. KSCDC is a public sector undertaking owned by Kerala Government. Now KSCDC is running 30 cashew factories all over the Kerala State. In these factories more than 20000 workers and 1500 staff members are working. Corporation is a model employer in the field of cashew industry mainly to protect the interest of workers and to provide maximum employment to its workers and to give statutory benefits like minimum wages, bonus, etc. prevailing in the cashew industry. The main function of the company is the processing of raw nuts and there by production of cashew kernels and its bye-products. The 80% of processed kernels are exported and 20%of the kernels are sold in the Indian market. For the local sale of processed nuts the company is following various techniques like advertisement, sales, promotion, publicity etc. In order to capture the local market now KSCDC has started a value addition unit for producing processed nuts in different flavors. The promotional activity for capturing the market is in progress. To increase the production of indigenous raw nuts Cashew Corporation has started cashew plantation in the state.

Location
The head office of KSCDC Ltd situated in mundakkal, 1km away from Kollam town and it has 30 cashew factories and 2 tin factories in Kollam. It has three branches in Alapuzha, one one branch at Trivandrum, one at Trissur.

Objectives of the company

Main objects to be pursued by the company on its incorporation are:1. To procure raw nuts from India and outside and sell processed cashew nuts, cashew shell liquid and other by-products of cashew within and outside India. 2. To establish, maintain and operate factories in any part of the state of Kerala for processing cashew nuts and extraction of oil from the kernels. 3. To distribute cashew nuts and cashew apples to processing factories established in Kerala and purchase cashew kernels, cashew shell liquid and other products and by products from processing factories in Kerala. 4. To purchase and process cashew apple and shell the products and by products of cashew apple. 5. To extract and process cashew shell liquid and sell the products and by products within and outside India.

CHAPTER II REVIEW OF LITERATURE

DEFINITION OF MARKETING Marketing has been variously defined by different practioners and thinkers over the time. In simple words, marketing is referred to activities that are undertaken in relation to market. (1) According to American marketing association marketing is the performance of business activities that direct the flow of goods and services from the producers to the customer or user. (2) According to William J Station marketing is defined as it is the total system of interacting business activities designed to plan, price, promote and distribute wants satisfying products and services to present and potential customers. (3) Philip kotler defines marketing as working with markets to actualize potential exchanges for the purpose of satisfying human wants and needs. (4) EG, Mc carthy defines marketing as the performance of business activities that divert the flow of goods and services from the producer to the customer or user in order to satisfy the customers needs and wants. INTERNATIONAL MARKETING With the advancement in liberalization, privatization and globalization, the major competition with many Indian firms encounter in the home market is from the foreign firm. International marketing is perhaps best regarded as a short hand expression for the special international aspects of marketing. Walsh defines international marketing as (a) The marketing of goods and services across national frontiers, and (b) The marketing operation of an organization that sells and / or produces within a given country when: (1)That organization is part of, or associated with an enterprise which operates in other countries (2)There is some degree of influences of control or the organizations marketing activities from outside the country in which itself and / or producers.

Another view is that international marketing is simply and attitude of mind, the approach of the company with a truly global output seeking its profits impartially around the world, home market included on a planned and systematic basis.

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CHAPTER III RESEARCH METHODOLOGY

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3.1 OBJECTIVES OF THE STUDY

i. ii. iii. iv. v. vi.

To understand the marketing structure, division, practices, procedures policies of KSCDC with regard to international and domestic marketing. To analyze ,assess and identify the problems faced by KSCDC in international and domestic marketing. To explorate the strength, weakness, opportunities and threats of marketing cashew kernels by KSCDC. To examine and find out why KSCDC cannot compete with private sector and make profit as done by private sector. To suggest ideas and recommendations to improve the marketing supply chain and overall performance of KSCDC. To get first-hand knowledge and familiarize with preparing a project for international and domestic market.

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3.2 SCOPE OF STUDY The study is intended to attain the first-hand experience of the overall functioning of marketing department of KSCDC. It also provides a chance to see the practical constrains faced by the top executives and managers while putting the theory into practice. Being a loss making unit there is wider scope for ideas, suggestions and project works than a continuously profit running organizations. There will be great mental satisfaction if my findings conclusions and suggestions will help to improve the functioning of the department at least to certain extent.

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3.3 LIMITATIONS OF THE STUDY 1. Method used mainly provides qualitative data, so may lack precision. 2. The personal interview may be affected by personal bias. 3. The personal resource of the corporation is limited, so it is a challenge to collect data without interfering the normal operation of the corporation. 4. There are about 30 factories of KSCDC spread over the entire Kerala and it is expensive and time consuming to visit all the factories to collect the matriculate data. 5. Hesitation to disclose confidential, trade secretes with a non member of the corporation.

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3.4 METHOD OF DATA COLLECTION It is proposed that the required data for the study are to be collected from both primary and secondary sources. The primary sources include members of the director board, officers and employees of KSCDC. It is intended to develop interview schedule/questionnaire by incorporating questions related to all the variable to the identified through exhaustive literature survey and discussions with different levels of employees and expects in the area. Secondary data for the study are propose to be collected from the office records and published statement of units and various research centers and institutions located in the various parts of the various parts of the state. Primary data a. Direct interview and use of questionnaire to managers, employees, staff and labourers etc of KSCDC head office and various factories. b. Interview and questionnaire to dealers, traders, retailers and wholesalers etc. c. Direct observation of marketing department. d. Interaction with pioneers in the field of cashew experts in private sector. Secondary data a. Various annual reports of KSCDC. b. Various annual reports of CEPC. c. Export/ import directory. d. Cashew bulletin e. FICCI news journal f. Indian trade weekly g. News papers like business line, business standard, economic times and financial times etc.

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SAMPLE FRAME There are 36 factories under KSCDC. The sample for study on international marketing is taken from 8 factories i.e. 20% the total, selected as stratified random sample basis from the 36 factories. It also includes managers, staff and employees of head office and various factories of KSCDC and CEPC making the total number of respondents to100. For domestic marketing 50 respondents selected from whole sales, retailers, dealers, traders, agents and stockiest of KSCDC were taken as sample frame.

TOOLS USED FOR THE STUDY

Percentage analysis. Bar Diagram Pie Chart Chi-square Test

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CHAPTER IV DATA ANALYSIS AND INTERPRETATION

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ANALYSIS The data collected from the study are to be tabulated and analyzed by employing quantitative techniques such as percentages, and chi-square tests.

DOMESTIC & INTERNATIONAL MARKETING A THEORETICAL OVERVIEW HUMAN WANTS Human wants are unlimited and repetitive in nature. Business activities aim at acquiring wealth, converting it into designed forms and marketing final products available for exchange, for the satisfaction of human wants. This important and powerful function of exchanging final products for the satisfaction of human wants is called marketing. Marketing is the management function which organizes and directs all those business activities involved in assessing and converting customers purchasing power into effective demand for a specific product or service. It is art of creating and satisfying customers at a profit.

Various concepts of marketing philosophy The five distinct concept of business philosophy under which marketing activities are carried out are (1) The production concept (2) The product concept (3) The selling concept (4) The marketing concept (5) The societical marketing concept

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(1) The production concept (Marketing Oriented Philosophy) Consumers usually buy those products that are widely available and have low cost. This concept is usually followed in under developed countries where demand for a product exceeds its supply. (2) The product concept According to this concept, the consumers are more interested in the quality and performance of the product or the service rather than its volume of production or price. (3) The selling concept There must be strenuous and aggressive measures to persuade customers to buy adequate quantity of products. (4) The marketing concept This concept aims to achieve the objectives by determining and knowing the needs and wants of customers. ie. the target market, then designs and develops products to satisfy those needs, make them available to consumers at reasonable price (5) The societical marketing concept. This approach postulates that the management should take into consideration of social implication of their decisions and ensure that they contribute to the welfare of the society at large. This concept maintains a balanced between individual, organizational and societical objectives.

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THE MARKETING MIX It is a term used to describe the effective combination of the four inputs/elements viz product, price, promotional activities and physical distribution system popularly known as Four Ps by the management to formulate plans, take decisions, increase market share and profits etc. 1. Product The management should first decide the product by knowing the needs and wants of customers, and then its quality, shape, size, design, style, brand, package etc should be decided. 2. Price The marked or announced amount of money asked from the buyer is known as price. 3. Promotion Advertisement, personal selling and other promotional programmers to inform the customer about the product and persuade them to buy is called promotional activities. 4. Place (physical distribution) The delivery of the product at the right time and at the right time and at the right place is called distribution.

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ANALYSIS OF DATA AND INTERPRIATION Data on international marketing The Data analysis on international marketing and its problems has been collected by interviewing and getting answer to questionnaire put up to 100 respondents, based on the following composition selected on proportionate stratified random basis a. KSCDC head office 1. 2. 3. 4. 5. 6. Marketing Dept head Commercial Dept head Administrative officer Staff representative Labour /employee representative 1 1 1 2 3

Trade union representative of head office(CITU, INTUC, 4 AITUC and UTUC Total 12

b. 8 various factories out of 36 factories owned by KSCDC selected on satisfied random basis 1. 2. 3. Factory manager Administrative officer(office head) Labour /employee representative since 1X8=8 1X8=8 female 4X8=32

employees represent 80% of the strength, representative selected from shelling; peeling and packing departments are females and one male representative either from supervisory staff(masory) or roasting Dept. 4. Union representing(one represented the ruling front: and 2X8=16 another from opposition front) 5. Office staff
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1X8=8

Total

72

c. CEPC

1. 2. 3. 4.

Deputy Director Researchers Research Assistants Staff and employees Total

1 1 2 2 6

d. PVT processing unit 1. 2. 3. Managers of privet processing units Exporting Agents of KSCDC Global Communication Total 5 3 2 10

Data on domestic marketing The data on domestic marketing has been collected by interviewing and setting questionnaire to 50 respondents selected at random from wholesalers, and retailers, dealers, agents, traders and commissioners etc.

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4.1 MARKETING CONCEPT OF KSCDC. The marketing concept of KSCDC gives us an abstract idea about the marketing goals of the KSCDC. The table shows what the marketing concept of KSCDC is. Table 4.1: Marketing concept of KSCDC. RESPONDENTS VIEW Satisfy customer needs Global achievements Social requirement Systematic approach All of the above NO. OF RESPONDENCE 20 5 15 10 50 PERCENTAGE 20% 5% 15% 10% 50%

Figure 4.1

NO. OF RESPONDENCE
60 50 40 30 20 10 0

NO. OF RESPONDENCE

More than 50% of the respondents are of the view that to satisfy customer needs, global achievement, social requirement, systematic approach are the main marketing concept of KSCDC

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4.2 TARGET CUSTOMERS OF KSCDC. Customers are the king of the market. There are various customers for KSCDC kernels such as international clients, domestic clients, retailers, domestic hotels. Table 4.2: Target customers of KSCDC. RESPONDENTS VIEW
International clients Domestic clients Retailers Domestic bar hotels, restaurants etc All of the above

NO. OF RESPONDENCE 40 20 5 5 30

PERCENTAGE 40% 20% 5% 5% 30%

Figure 4.2

NO. OF RESPONDENCE
45 40 35 30 25 20 15 10 5 0

NO. OF RESPONDENCE

Table depict that 40% are of the view that the target customers of the KSCDC are international clients.

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4.3 MARKETING MIX OF KSCDC The marketing mix of KSCDC include all the 4 ps, as evident from the opinion of majority of respondents. Table 4.3: Market mix RESPONDENTS VIEW Product mix alone Place mix alone Promotion mix alone Price mix alone All of the above alone NO. OF RESPONDENCE 10 10 10 10 60 PERCENTAGE 10% 10% 10% 10% 60%

Figure 4.3

NO. OF RESPONDENCE
70 60 50 40 30 20 10 0

NO. OF RESPONDENCE

More than 60% of the respondents are of the view that all the 4 ps, are the marketing mix of KSCDC.

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4.4 FUNCTIONS OF COMMERCIAL WING OF KSCDC. The commercial (marketing) wing of all organizations takes key decisions to the marketing activities. Table 4.4: Functions of commercial wing of KSCDC. RESPONDENTS VIEW NO. OF RESPONDENTS
Systematic collection of marketing information Analysis of interpretation of marketing information Marketing planning and control All of the above

PERCENTAGE

10 15 15 60

10% 15% 15% 60%

Figure 4.4
70 60 50 40 30 20 10 0 Systematic collection of marketing information Analysis of Marketing interpretation planning and of marketing control information All of the above Series1

More than 60% of the respondents are of the view that systematic collection of marketing information, analysis of interpretation of marketing information, marketing planning and control etc are the functions of commercial(marketing) wing of KSCDC.

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4.5 PROCESSING UNITS IN AFRICAN COUNTRIES In this time there is large number of processing units in African countries. Table 4.5: Has the emergence of processing units in African countries affected the international marketing prospectus of KSCDC?

RESPONDENTS VIEW YES NO

NO. OF RESPONDENCE 30 70

PERCENTAGE 30% 70%

Figure 4.5

NO. OF RESPONDENCE
80 70 60 50 40 30 20 10 0 YES NO NO. OF RESPONDENCE

The 70% of the respondents view that the emergence of processing units in African countries
not affected the international marketing prospectus of KSCDC.

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4.6 OVER CROWDEDNESS OF INTERNATIONAL KERNELS MARKET The international kernel market is highly over crowded due to the emergence of 7 to 10% of new entrants in private sector every year. This has been confirmed by the opinion of majority of respondents as depicted in table. Table 4.6: Over crowdedness of international market.

RESPONDENTS VIEW YES NO

NO. OF RESPONDENCE 85 15

PERCENTAGE 85% 15%

Figure 4.6

NO. OF RESPONDENCE
90 80 70 60 50 40 30 20 10 0 YES NO NO. OF RESPONDENCE

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Table 4.7: How over crowdedness affected the international marketing potential of KSCDC RESPONDENTS VIEW NO. OF RESPONDENTS PERCENTAGE

Very badly Badly Medium Not at all Will affect in future 10

50 20 15 5 10%

50% 20% 15% 5%

Figure 4.7

NO. OF RESPONDENTS
60 50 40 30 20 10 0 Very badly BadlyMedium Not Will at affect all in future 10 10% NO. OF RESPONDENTS

Table depict that 50% are of the view that the over crowdedness seriously affected, the marketing potential of KSCDC. 35% opined that the over crowdedness affects moderately to badly.

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4.7 WITHDROWAL OF RUSSIA FROM INDIAN MARKET Withdrawal of Russia from Indian kernel market, has seriously affected the international marketing of kernels from India as per report of cashew bulletin 2007-2008. This has also affected KSCDC as opined by them and depicted in table Table 4.8: Extent of effect due to withdrawal of Russia RESPONDENTS VIEW NO. OF RESPONDENTS PERCENTAGE

Very badly Badly Medium Not at all Will affect in future 10

50 20 15 5 10%

50% 20% 15% 5%

Figure 4.8

NO. OF RESPONDENTS
60 50 40 30 20 10 0 Very badly Badly Medium Not at Will all affect in future 10 10% NO. OF RESPONDENTS

Table depict that 50% are of the view that withdrawal of Russia has seriously affected the international marketing potential KSCDC.
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4.8 EMERGENCE OF SUBSTITUTE PRODUCTS LIKE ALMONDS, WALNUTS ETC. As the report oh KSCDC, the emergence of new substitute products is threat to export of Indian cashew kernels. The respondents view is depicted in table. Table 4.9: Emergence of substitute product RESPONDENTS VIEW YES NO NO. OF RESPONDENCE 60 40 PERCENTAGE 60% 40%

Figure 4.9

NO. OF RESPONDENCE
70 60 50 40 30 20 10 0 YES NO NO. OF RESPONDENCE

Table depicts that 50 to 60% of respondents are of the opinion that the substitute products is affecting the export potential of KSCDC very badly

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4.9 RECENT ECONOMIC RECESSION On verifying the records of KSCDC it seen that 80% of the sales up to the financial year 2007-2008, where through international exports. However due to the economic recession the exports gradually declined to 30% as per annual report of CEPC and KSCDC. A questionnaire to the staff and management of KSCDC also confirmed this fact as shown table Table 4.10: Economic recession: how it affected international marketing prospects of KSCDC RESPONDENTS VIEW NO. OF RESPONDENTS PERCENTAGE

Very badly Badly Medium Not at all

60 20 10 10

60% 20% 10% 10%

Figure 4.10

NO. OF RESPONDENTS
70 60 50 40 30 20 10 0 VERY BADLY BADLY MEDIUM NOT AT ALL NO. OF RESPONDENTS

About 60% of the respondents have remarked that the recent economic recession has very badly affected the international marketing prospects of KSCDC.

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4.10 SALES OF PROCESSED KERNELS The processed kernels of KSCDC enjoy a high demand. There is so many ways to sell the kernels they are directly to customers, directly to retailers, directly to wholesalers, through agents of
international and domestic market, through dealers/agents. The table shows how is the processed kernels sold in domestic and international markets.

Table 4.11: sale of processed kernels RESPONDENTS VIEW NO.OF RESPONDENTS PERCENTAGE

Directly to customers Through dealers/agents Directly to retailers Directly to wholesalers Through agents of international and domestic market

5 25 10 20 40

5% 25% 10% 20% 40%

Figure 4.11

NO.OF RESPONDENTS
45 40 35 30 25 20 15 10 5 0

NO.OF RESPONDENTS

About 40% of the respondents have remarked that the processed kernels sold through agents of international and domestic market.
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4.11 ECONOMIC REFORMS (LPG) As per annual report of the chamber of industries and commerce 2007-2008 the 1991 economic recession has badly affected the international and domestic marketing potential of kernel industry, due to the liberalized policy of import /export. The following opinion also supports the above report that KSCDC is under high pressure and competition from private sector due to the liberalized policy. Table 4.12: Effect of economic reforms RESPONDENTS VIEW NO. OF RESPONDENTS PERCENTAGE

Very badly Badly Medium Not at all Will affect in future Figure 4.12 5

65 15 10 5 5%

65% 15% 10% 5%

NO. OF RESPONDENTS
70 60 50 40 30 20 10 0 VERY BADLY BADLY MEDIUM NOT AT WILL ALL AFFECT IN FUTURE

NO. OF RESPONDENTS

Table depicts that 65% of the respondents are of the view that the economic reforms has very badly affected the export potentials of KSCDC.
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4.12 PUBLIC AWARENESS OF KSCDC PRODUCTS Public awareness of KSCDC products is on the average as per respondents view. Table 4.13: Public awareness RESPONDENTS VIEW Good Above average Average Below average Poor NO. OF RESPONDENTS 10 5 25 5 5 PERCENTAGE 20% 10% 50% 10% 10%

Figure 4.13

NO. OF RESPONDENTS
30 25 20 15 10 5 0 Good Above Average Below average average Poor NO. OF RESPONDENTS

More than 50% of the respondents are of the view that KSCDC products have average public awareness.

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4.13 AWARENESS OF VARIOUS GRADE / SPECIFICATION OF CASHEW KERNELS. Many of the dealers and retailers are not aware of the various grades/specification of cashew kernels processed by KSCDC. Table 4.14: Awareness of various grade/ specification RESPONDENTS VIEW YES NO NO. OF RESPONDENCE 15 35 PERCENTAGE 30% 70%

Figure 4.14

NO. OF RESPONDENCE
40 35 30 25 20 15 10 5 0 YES NO NO. OF RESPONDENCE

70% of the traders / dealers/ retailers are not aware of the various grades and specifications of cashew kernels processed by KSCDC

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4.14 GRADES/ SPECIFICATIONS SOLD BY RETAILERS All grades / specifications of cashew kernels processed by KSCDC are not sold by various dealers/ retailers as is evident from the response to questionnaire put to dealers and traders as is shown in table. Table 4.15: Table showing whether all grades/ specification are sold. RESPONDENTS VIEW YES NO NO. OF RESPONDENCE 20 40 PERCENTAGE 40% 60%

Figure 4.15

NO. OF RESPONDENCE
45 40 35 30 25 20 15 10 5 0 YES NO NO. OF RESPONDENCE

60% of traders/ retailers are not selling all specifications/ grades of cashew kernels.

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4.15 REASON FOR SELLING AII GRADES/ SPECIFICATION Various grades / specifications are intended for specific target marketing. eg. The high costly, low count, export quality kernels are intended for international market, and the lowest quality bits seconds etc are in very high demand in domestic market, hence usually sold at local market itself. Table 4.16: Non selling of all brands- reasons RESPONDENTS VIEW Non availability of cheap variety High cost of expert quality NO. OF RESPONDENCE 25 25 PERCENTAGE 50% 50%

Figure 4.16

NO. OF RESPONDENCE
30 25 20 15 10 5 0 Non availability of cheap variety High cost of expert quality NO. OF RESPONDENCE

50% each of the dealers have started that non availability of cheap variety and high cost of export quality kernels are the reasons for not selling all grades of kernels.

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4.16 QUALITY OF KSCDC KERNELS KSCDC being the only public sector undertaking in this field maintains strict quality and hygienic principles. Table 4.17: Quality RESPONDENTS VIEW Good Above average Average Below average Poor NO. OF RESPONDENTS 30 10 5 3 2 PERCENTAGE 60% 20% 10% 6% 4%

Figure 4.17

NO. OF RESPONDENTS
35 30 25 20 15 10 5 0 Good Above Average Below average average poor NO. OF RESPONDENTS

More than 60% of respondents are of the view that quality of KSCDC kernels are good, and 20% feel that it is above average.

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4.17 PRICE OF KSCDC NUTS Based on the quality of nuts, the price appears to be average, but KSCDC is selling kernels at a rate lower than the total cost of procurement and processing, to complete with private sector leading to loss. Table 4.18: Price of KSCDC RESPONDENTS VIEW Very high High Average Low Same to private NO. OF RESPONDENTS 10 10 25 3 2 PERCENTAGE 20% 20% 50% 6% 4%

Figure 4.18

NO. OF RESPONDENTS
30 25 20 15 10 5 0 Very high High Average Low Same to private NO. OF RESPONDENTS

More than 50% opines that the price of KSCDC nuts is in tune with its quality and average.

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4.18 PACKAGE OF KSCDC NUTS For international exports the nuts are packed in corrugated cardboard cartons, bound by nylon rope/twine. For domestic trade kernels are packed in vita pack method. Table 4.19: Packing RESPONDENTS VIEW Good Above average Average Below average Poor NO. OF RESPONDENTS 20 20 4 5 1 PERCENTAGE 40% 40% 8% 10% 2%

Figure 4.19

NO. OF RESPONDENTS
25 20 15 10 5 0 Good Above Average Below average average poor NO. OF RESPONDENTS

40% expresses the view that packing of KSCDC nuts is good and another 40% for above average and average respectively.

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4.19 BRAND IMAGE OF KSCDC NUTS The brand image of KSCDC nuts is called CDC nuts and the picture of child eating kernels is the emblem. This is very popular, both internationally and nationality, due to the long period of existence in this field. Table 4.20: Brand image RESPONDENTS VIEW Good Above average Average Below average Poor NO. OF RESPONDENTS 25 15 6 3 1 PERCENTAGE 50% 30% 12% 6% 2%

Figure 4.20

NO. OF RESPONDENTS
30 25 20 15 10 5 0 Good Above Average Below average average Poor NO. OF RESPONDENTS

50% of respondents state that the brand image of KSCDC is good and popular.

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4.20 TASTES AND FLAVOUR OF KSCDC NUTS The various grades and specifications like wholes, scorched, salted etc have excellent taste and flavor. Table 4.21: Taste and flavor RESPONDENTS VIEW Very tasty Above average Average Below average Poor NO. OF RESPONDENTS 30 15 3 1 1 PERCENTAGE 60% 30% 6% 2% 2%

Figure 4.21

NO. OF RESPONDENTS
35 30 25 20 15 10 5 0 Very tasty Above Average Below average average Poor NO. OF RESPONDENTS

More than 60% are of the view that CDC nuts are very tasty.

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4.21 SEVERE COMPETITIONS AND THREAT FROM UNAUTHORIZED PROCSSING UNIT The authorized processing unit functioning during season time alone as kudils is really a threat to international market due to the poor quality, low processing change etc as opined by majority. Table 4.22: Threat from unauthorized processing unit RESPONDENTS VIEW YES NO NO. OF RESPONDENCE 80 20 PERCENTAGE 80% 20%

Figure 4.22

NO. OF RESPONDENCE
90 80 70 60 50 40 30 20 10 0 YES NO NO. OF RESPONDENCE

About 80% held the view that the authorized processing units is a threat to marketing potential of KSCDC

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4.22 COMPETITIONS FROM THE PRIVATE SECTOR FOR COLLECTION OF RAW NUTS. An interview with various managers, staff and employees of KSCDC revealed that competition from private sector is constrains in collection of raw nuts. This is also confirmed from the respondents answer to question number 22 of questionnaire. Table 4.23: competition from the private sector for collection of raw nuts. RESPONDENTS VIEW YES NO NO. OF RESPONDENCE 65 35 PERCENTAGE 65% 35%

Figure 4.23

NO. OF RESPONDENCE
70 60 50 40 30 20 10 0 YES NO NO. OF RESPONDENCE

65% of respondents accepted the view that there is a competition from the private sector for collection of raw nuts.

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4.23 IF THE COMPARATIVELY HIGH WAGES OF THE EMPLOYEES AFFECTS THE PROFITS OF KSCDC The employees of the KSCDC enjoy comparatively high wages than the private sector. If that high wages of the employees affects the profits of KSCDC. Table 4.24: If the comparatively high wages of the employees affects the profits of KSCDC. RESPONDENTS VIEW YES NO NO. OF RESPONDENCE 30 70 PERCENTAGE 30% 70%

Figure 4.24

NO. OF RESPONDENCE
80 70 60 50 40 30 20 10 0 YES NO NO. OF RESPONDENCE

The 70% of the respondents are of the opinion is that the comparatively high wages of the employees is not affected the profit of KSCDC.

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4.24 IF THE SELLING PRICE OF PRODUCTS AFFECTS THE PROFITS OF KSCDC. The profits of KSCDC is comparatively low than the private sector. The selling price of KSCDC is high than the private sector. Table 4.25: If the selling price of products affects the profit of KSCDC . RESPONDENTS VIEW YES NO NO. OF RESPONDENCE 60 40 PERCENTAGE 60% 40%

Figure 4.25

NO. OF RESPONDENCE
70 60 50 40 30 20 10 0 YES NO NO. OF RESPONDENCE

The 60% of the respondents are of the view that the selling price of products affects the profit of KSCDC.

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4.25 IF THE STRIKES HAPPEN IN THE FACTORIES AFFECTS THE PROFITS OF KSCDC? The strikes are always happened in KSCDC. Due to this strikes total working days are reduced. The strikes are always for the wages. The strike rate in KSCDC is comparatively higher than the private sector. Table 4.26: If the strikes happen in the factories affects the profits of KSCDC? RESPONDENTS VIEW YES NO NO. OF RESPONDENCE 85 15 PERCENTAGE 85% 15%

Figure 4.26

NO. OF RESPONDENCE
90 80 70 60 50 40 30 20 10 0 YES NO NO. OF RESPONDENCE

The 85% of the respondents are of the view that If the strikes happen in the factories affects the profits of KSCDC.

48

Chi-square Test 1 The null hypothesis is that there is no difference in the opinion of respondent. The Chi-square Test is done in the first question as below.

Table 4.1: Marketing concept of KSCDC. RESPONDENTS VIEW Satisfy customer needs Global achievements Social requirement Systematic approach All of the above NO. OF RESPONDENCE 20 5 15 10 50 PERCENTAGE 20% 5% 15% 10% 50%

Here the expressed frequency

O = -------n

100 = ----5

20

49

Here the table will be as follows

RESPONDENTS VIEW Satisfy customer needs Global achievements Social requirement Systematic approach All of the above

NO. OF RESPONDENCE 20 5 15 10 50

PERCENTAGE 20 20 20 20 20

Then using the 2 test: (O - E)2 2 = ------------E

(20 20)2
= ------------------------+

(5 20)2
------------------+

(15 20)2
-------------------+

(10 20)2
------------------------+

(50 20)2
------------------------

20

20

20

20

20

(0)2
= ---------------------+

(-15)2
------------------+

(-5)2
-------------------+

(-10)2
------------------+

(30)2
--------------------

20

20

20

20

20

50

0
= ---------------+

225
------------+

25
-------------+

100
--------------+

900
----------------

20

20

20

20

20

= 0 + 11.25

+ 1.25

45

= 62.5

If we assume the level of significance = 0.05 and having the difference as (k-1) where k is the number of categories, in this case (5-1) = 4, then we can compare it with the critical value of x2 from the table. The critical value of x2 = 5.991. The expected value of x2 is more than the critical value we reject the null hypothesis.

51

Chi-square Test 2

Table 4.7: How over crowdedness affected the international marketing potential of KSCDC

RESPONDENTS VIEW

NO. OF RESPONDENTS PERCENTAGE

Very badly Badly Medium Not at all Will affect in future 10

50 20 15 5 10%

50% 20% 15% 5%

Here the expressed frequency

O = -------n

100 = ----5

20

52

Here the table will be as follows

RESPONDENTS VIEW

NO. OF RESPONDENTS PERCENTAGE

Very badly Badly Medium Not at all Will affect in future

Then using the 2 test : (O - E)2 2 = ------------E

50 20 15 5 10 20

20 20 20 20

(50 20)2
= ------------------------+

(20 20)2
------------------+

(15 20)2
-------------------+

(5 20)2
------------------------+

(10 20)2
------------------------

20

20

20

20

20

(30)2
= ---------------------+

(0)2
------------------+

(-5)2
-------------------+

(-15)2
------------------+

(-10)2
--------------------

20

20

20

20

20

53

900
= ---------------+

0
------------+

25
-------------+

225
--------------+

100
----------------

20

20

20

20

20

= 45 + 0

+ 1.25

11.25

= 62.5

If we assume the level of significance = 0.05 and having the difference as (k-1) where k is the number of categories, in this case (5-1) = 4, then we can compare it with the critical value of x2 from the table. The critical value of x2 = 5.991. The expected value of x2 is more than the critical value we reject the null hypothesis.

54

Table 4.17: Quality

RESPONDENTS VIEW Good Above average Average Below average Poor

NO. OF RESPONDENTS 30 10 5 3 2

PERCENTAGE 60% 20% 10% 6% 4%

Here the expressed frequency

O = -------n

50 = ----5

10

55

Here the table will be as follows

RESPONDENTS VIEW Good Above average Average Below average Poor

NO. OF RESPONDENTS 30 10 5 3 2

PERCENTAGE 10 10 10 10 10

Then using the 2 test : (O - E)2 2 = ------------E

(30 10)2
= ------------------------+

(10 10)2
------------------+

(5 10)2
-------------------+

(3 10)2
------------------------+

(2 10)2
------------------------

10

10

10

10

10

(20)2
= ---------------------+

(0)2
------------------+

(-5)2
-------------------+

(-7)2
------------------+

(-8)2
--------------------

10

10

10

10

10

56

400
= ---------------+

0
------------+

25
-------------+

49
--------------+

64
----------------

10

10

10

10

10

= 40 + 0

+ 2.5

4.9

6.4

= 53.8

If we assume the level of significance = 0.05 and having the difference as (k-1) where k is the number of categories, in this case (5-1) = 4, then we can compare it with the critical value of x2 from the table. The critical value of x2 = 5.991. The expected value of x2 is more than the critical value we reject the null hypothesis.

57

CHAPTER V FINDINGS SUGESSIONS CONCLUTIONS

58

FINDINGS The present study is undertaken to evaluate the international and domestic marketing of cashew kernels by KSCDC. The study is based on primary data and secondary data collected from various sources. FINDINGS ABOUT GENERAL INDUSTRY 1. Cashew industry is one of the most important traditional industry in India. 2. India exports cashew kernels to many foreign countries. 3. Cashew industry plays an important role in the development of Kerala. 4. It provides employment opportunity to more than two lakh people in Kerala most women. 5. KSCDC has made valuable service for the development of the industry for the last forty years and earned a huge return in the form f foreign exchange. 6. KSCDC is now in a declining stage of its life cycle. FINDING ON PROBLEMS OF INTERNATIONAL MARKETING 1. The recent economic recession has affected the international marketing prospectus of KSCDC very badly. Exports have declined to 30% of the total production from 80% during 3 years back. 2. The presence of middleman, commission agents etc in procuring raw nuts from international markets such as Tanzania, and other African countries have escalated the procurement cost due to commission, thereby reducing the profits on exports. 3. The 1991 economic reforms through liberalization, has affected the international marketing prospects due to increase to competition from existing and new entrants in private sector. 4. The unauthorized operation of cashew industry as kudils manufacturing poor quality nuts, at low cost is really a threat to international market since all Indian brands may be regarded as poor quality.

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5. Withdrawal of Russia from Indian kernels market has seriously affected the international prospects of KSCDC since Russia and its Allies were the major long term purchasers/consumers of KSCDC kernels. 6. Emergence of substitute products like Almonds, Walnuts, pea nuts etc have also seriously affected the European markets of KSCDC. 7. The over crowdedness in cashew industry and ever increasing private sector at the rate of 10% per year has made the industry too over crowded leading to unhealthy competition and loss in public sector undertaking. 8. Non availability of raw nuts Insufficient supply of raw nuts is the major problem faced by units under KSCDC. The country produces only a very limited quality of raw nuts as compared to requirements of the industry. The availability is also declining every year. 9. Constrains in collection of raw nuts The various problems connects with the procurement of raw nuts are a. Non availability of raw nuts throughout the year, or in time, due to the seasonal nature of industry. b. Insufficient working capital to collect raw nuts during season. c. Insufficient godown facility to store raw nuts for off season use. d. Competition from private sector in collecting the scarce available raw nuts. e. Increase in number of processing units. 10. High cost of importing raw nuts Due to non availability of domestic nuts, KSCDC has to import nuts from African countries to provide employment and keep factories running throughout the year. 11. Target customers of KSCDC The target customers of KSCDC include international clients, domestic clients, domestic clients, retailers, wholesalers etc. 12. Marketing mix of KSCDC Marketing mix of KSCDC includes all the 4ps viz product mix, place mix, promotion mix, place mix.
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13. Stiff competition from African countries One important problem faced the KSCDC and all other processing units in India is the stiff competition from African countries. 14. The social obligations like providing employment throughout the year(on off season times also), ESI, PF, DA, maternity benefits, bonus, pensionary benefits, etc increase the procuring cost of KSCDC and hence cannot compete with the private sector.

61

FINDINGS ON DOMESTIC MARKET 1. The domestic traders, dealers, retailers etc sell CDC nuts along with various other brands like VLC, Urbans, western India, Delnit nuts etc. 2. The awareness of KSCDCs and its products by the general public and traders are not through any media such as TV, Radio, or news paper, it is due to the reputation of Kollam being the Cashew Capital of the Globe 3. Many of the domestic traders and dealers prefer to sell KSCDC nuts due to its quality, brand image, taste, higher sales etc. 4. Most of the retailers, stockiest, dealers and traders of KSCDC nuts are not aware of the various grades and specifications of KSCDC kernels. 5. Due to unawareness and non availability of all grades and specification, majority of traders are selling only the general medium grade kernels of KSCDC. 6. The high cost export quality grades, and the low cost pieces seconds etc are not available or sold by all domestic dealers since the export quality are intended for international market and the low cost seconds and pieces, seconds and pieces are sold in local market itself. 7. The quality of KSCDC nuts is opined to be good by majority of traders and dealers. 8. The price of KSCDC nuts appears to be average and worthy to the quality of nuts. 9. Vita pack for domestic clients is generally appreciated by all domestic traders. 10. KSCDC nuts have a good brand image and are popular domestically. 11. The taste and flavor of KSCDC nuts is also satisfactory. 12. The advertisement of KSCDC products is just sufficient since it aims at international market rather than domestic market. 13. The margin of profit to the dealers and traders, through low, is satisfactory due to the higher volume or sales than private sector. 14. There is very high domestic demand for KSCDC products. 15. The reason for high domestic demand of KSCDC products than private branch is due to the quality of products and confidences of consumers.

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GENERAL SUGGESTIONS 1. A cashew board in the line of rubber board, coffee board, spice board etc is to be set up for overall improvement of cashew cultivation. It can function as a catalyst of the industry by providing hybrid cashew saplings, manure, pesticides and also extend necessary guidance in scientific farming. 2. The cashew industry must be declared as awomens industry, to get various grants and aids for KSCDC from Government of India. 3. The waste and purampokku lands should be used for cultivating cashew trees under social forestry scheme. 4. Long term financial assistance is to be provided from land development banks or SIDBI for cultivation of cashew. 5. A financial institution should be set up exclusively to cater to the needs of traditional industries like cashew, coconuts, tiles, bricks etc. 6. The procurement of raw nuts has to be done in advance in order to ensure quality of commodity and reasonable quality. 7. Government should fix ground price and declare monopoly procurement of raw nuts produced I Kerala. 8. Various officers of CEPC functioning at Kochi and Kollam should be board together and a Cashew Bhavan should be establishing at Kollam. 9. Sustainable cashew nut production under National Horticulture Mission(NHM) should be implemented through Kerala state Agency for expansion of Cashew

Cultivation(KACC) in associated with Kerala Agricultural University.

63

MARKETING SUGGESTIONS 1. To avoid the presence of middleman, commission agents etc Government of India should have a direct tie up with African countries like Tanzania etc to procure raw nuts directly avoiding commission. 2. To compensate the loss of foreign export market due to economic recessions, value added products should be launched to conquer domestic market. There is large scale potential for domestic sales of cashew kernels. 3. Government should bar the kudils and unauthorized processing units. 4. Minimum wages act and other benefits should be declared statutory and mandatory for private sector also it reduces competition. 5. There should be some control on new private entrants in the cashew field as it is already saturated an overcrowded. 6. There must be segmentation of market consumers, the various products should be differentiated and price fixed accordingly. 7. Step should be taken to utilize the installed capacity at the maximum level. 8. The profit margin of KSCDC should be increased by reducing cost elements, procurement cost of raw nuts trading expenses etc and also by securing maximum price for the kernels sold. 9. Until recently KSCDC has depending on export market and only 20% domestic sales without realizing that there is ample scope for domestic market. KSCDC can surely conquer domestic market due to its good brand image, demand and confidence of customers. 10. KSCDC can explore the emerging trends in food habits of consumers. There is great potential for significant growth in export of organically produced cashew nuts. The market for all organic food products are booming, especially in developed countries. It is widely accepted fact that Indian cashew is predominantly organic and cashew trees are owned by small farmers who sell them use synthetic fertilizers. 11. Various other products of cashew can also be manufactured by KSCDC.

64

a. The cashew apple which is at present mostly wasted, can be used for many preparations like jams, juices, candies, pickles, chutneys and alcoholic beverages like Feni. b. Cashew nuts shell liquid can be used in polymer based industries such as friction dust, brake linings, paints varnishes, laminating resins, cashew cements, foundary chemicals. c. The cashew shell can be used for manufacturing of particle boards for package industry, besides as fuel. It can also used for removing pollutants like cadmium. d. Tannin can be used extracted from the brown skin (testa), of the kernels and applied in leather industry. 12. There is great domestic marketing potential for KSCDC kernels through the approximate 20,000 petrol pumps under IOC, HPC, BPC, IBP etc. which has snack bars on having a marketing tie up with these public sector undertaking.

65

CONCLUSION The following marketing strategies can be applied for developing international and domestic marketing of cashew kernels of KSCDC. 1. Advertisement 2. Personal selling 3. Sales promotion 4. Public relation

1. advertisement a. promotion cashew as a health nuts, use nutrition as a tool, say that cashew is cholesterol free, reduces risks of heart attacks, stabilities nervous symptoms etc. b. Promote cashew in different segments, ie, old people, school children pregnant women, convalescing patients, who need extra nutrients with minimum food intake. c. Promote cashew as a premium life style nut sought after by the super rich. d. Generate eye catching logo for promotion participates in food fairs, specialized events.

2. Personal selling a. Delivery van sales- door to door selling. b. Engage sales representatives on commission bases to maintain inter personal communication with dealers, stockiest etc. c. Reduce the cost physical distribution by reducing the cost of transportation, warehousing, storage inventory control etc. d. Personal selling must be aimed at target consumers rather than consumers at a large.

66

3. Sales promotion a. Selection of distribution channel such as wholesalers, retailers, C&F agent other dealers and traders. b. Persuasive communication to make awareness of various grades and specifications of kernels. c. Social campaigning. d. Utilize displays, demonstration, contest, premiums etc to supplement advertisement and personal selling.

4. Public relation a. Maintain high visibility in professional and social organizations. b. Get involved in community affairs. c. Use publicity and public relations as simulative supportive items for the marketing of KSCDC products. Thus conclude that there is great unexplored market potential for KSCDC kernels in domestic market, especially through the approximate 20000 retail petrol pump outlets controlled by public sector undertaking companies like IOC, HPC, BPC, IBP etc. only a very small investment and space area is required to sell this as a snack.

67

BIBLIOGRAPHY
1. BERI. G.C Marketing Research Tata Mc Graw Hill Publishers Company Ltd. 3rd Edition-2000

2. GALLAGHER .J.WILLIAM

Report Writing for Management Addition Wesley Publications 4th edition-2005

3. KOTHARI.C.R

Research Methodology Vishwa prakashan publishers 2nd Edition-2003

4. PHILIP KOTLER

Marketing Management Personal Education Pvt Ltd 11th edition-2004

5. Cashew Bulletin, Seminars on cashew industry, Research papers on cashew etc published by CEPC, FICCI, India Trade Journal.

6. Annual Reports of KSCDC, CDPC etc.

68