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Handicraft Industry : Modern marketing methods


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Handicraft Industry : Modern marketing methods

  1. 1. Application Of Contemporary Marketing Techniques: Handicraft Industry A Dissertation Presented to The Faculty of the Department of Commerce, Delhi School of Economics, University of Delhi In Partial Fulfillment Of the Requirements for the Degree of Master of International Business (MIB) Submitted by: Akshat Srivastava Roll Number 8 MIB 2011-2013 1
  2. 2. Table of ContentsUndertaking 3Certificate 4Acknowledgement 5Executive Summary 6Chapter IIntroduction to Indian Handicraft Industry 7 Common types of handicrafts 12 Designing in handicrafts 14 Craft Concentration Areas 15 SWOT Analysis 16 Institutions Involved In Promotion Of Handicrafts 18 Major Distribution Channels Of Indian Handicrafts 25Indian Handicrafts Industry: Opportunities and Challenges 29Chapter IIIntroduction to some contemporary marketing trends 32Social Media & SM Based Marketing 33Literature review in general 35Research methodology: Scope & Design 37Study: Application-based Cases in Social Media and E-Marketing 38Scope of such applications in the handicraft industry 44Chapter IIIRecommendations, Conclusions & Insights 49References 56Bibliography 58 2
  3. 3. UndertakingI hereby give a formal undertaking, in writing that the report I have preparedhere, is in pursuance of an academic study. It is solely for academic purpose,for partial fulfillment purposes of the degree of Master of InternationalBusiness, under Paper 547: Project Report. I also undertake to certify, to the best of my knowledge, the genuineness of thesources mentioned in the report design. The statements made and conclusionsdrawn are an outcome of the project work.(Signature of the Candidate)Akshat Srivastava(Signature of the Mentor)Ms. Seep Sethi 3
  4. 4. CertificateThis is to certify that Mr. Akshat Srivastava, Roll No. 8, MIB 2011-2013 hascompleted the dissertation titled “Application of Contemporary MarketingTechniques: Handicraft Industry”, Paper: 547, under my supervision inpartial fulfillment of the Master Of International Business (MIB) degree ofDepartment of Commerce, Delhi School of Economics, University of Delhi.(Signature of the mentor)Ms. Seep Sethi 4
  5. 5. AcknowledgementI am grateful with a deep sense of gratitude to all those who have helped me tocomplete the project.I express gratitude to my mentor, Ms. Seep Sethi for her valuable insights andrecommendations regarding the formulation, arrangement and documentationof this report.I also express sincere thanks to Dr. J. P. Sharma, HoD, Department ofCommerce & Dr. Kavita Sharma, Course Coordinator, MIB, for sparing theirvaluable time and for most inspiring cooperation towards the realizationof the project, which could have not been a success without their ableguidance. I also take this opportunity to thank the marketing faculties at myInstitute, who trained me to not only understand the business environmentbetter but also adapt to the demanding needs of the business community.I also especially thank my colleagues & friends for their valuable suggestions,comments and criticism. They have been patient, responsive & welcomingenough to provide me with all the required help that has enabled me to makethis project a success.(Signature of the Candidate)Akshat Srivastava 5
  6. 6. Executive SummaryIndia is one of the important suppliers of handicrafts to the world market. TheIndian handicrafts industry is highly labour intensive and is a cottage basedindustry. It is largely decentralized, being spread all over the country in ruraland urban areas. Artisans not only work on full time, but there are numerousartisans who are engaged in crafts work on part-time basis. This industryprovides employment to over seven million artisans who include a largenumber of women and people belonging to the weaker sections of the society.Increased globalization is causing the products to be more commoditized,because of which, artisans are facing stiff competition from other artisans fromall over the world. Implementing modern marketing techniques and relatedapplications in the handicrafts sector would go a long way in solving thecommunication problems of the artisans. It will also give Indian artisans anedge over those of other developing nations by developing an efficientcommunication channel.The report aims at providing an overview of the Indian handicraft industry, themarkets and nuances behind the process of the products reaching the endconsumer, and an insight into the possibilities of applications of morecontemporary marketing techniques such as social marketing, mobiletechnology, etc. 6
  7. 7. Chapter I: Introduction to Indian Handicraft IndustryHandicrafts are unique expressions representing a particular culture orcommunity through artisans and materials. Handicrafts are part of a muchlarger home accessory market, which includes handcrafted, semi handcrafted,and machine- made goods.According to buyers, handicrafts are significant to the country in which theyare produced due to culture, tradition, and skill and local materials used.Other definitions include - “Handicrafts are mostly defined as "Items made byhand, often with the use of simple tools, and are generally artistic and/ortraditional in nature. They are also objects of utility and objects of decoration”Though handicrafts industry constitutes a very small portion of India‟s exports,it still plays a major role in contributing to India‟s economy and is a major formof employment for a considerable portion of India‟s population. This sectorconstitutes the largest decentralized and unorganized sector in India, only afteragriculture. 7
  8. 8. India is one of the important countries supplying handicrafts to the worldmarket. The Indian handicrafts industry is characterized by being highlylabour intensive cottage based, and decentralized, being spread all over thecountry in rural and urban areas. Artisans not only work on full time basis,but numerous artisans are engaged in crafts work on part-time basis as well.The industry provides employment to over six million artisans, of which includea large number of women and people belonging to the weaker sections of thesociety.In addition to the high potential for employment, the sector is economicallyimportant from the point of low capital investment, high ratio of value addition,and high potential for export and foreign exchange earnings for the country. Inyear 2011-12, the export earnings from Indian handicrafts industry amountedto 12975.25 Crores, where USA contributed to the highest share of imports at26.20%. 8
  9. 9. In recent years, as the demand for Indian handicrafts ha s risen considerablyin the past few years, the status of this sector has also upgraded. 9
  10. 10. The handicraft sector assumes significance due to various reasons such as lowcapital investment, high ratio of value addition, robust potential for export andalso foreign exchange earnings.Handicrafts are mostly defined as "Items made by hand, often with the use ofsimple tools, and are generally artistic and/or traditional in nature. They canalso be termed as objects of utility and objects of decoration.”Handicrafts can be broadly classified in three categories:Consumer goods: Consumer goods are the goods that artisans prepare eitherfor self consumption or for exchange. Examples include baskets for keepingdomestic articles, hunting arrows, combs, smoking pipes, footwear, storing,wooden and stone plates, textile items like shawls, coats, jackets, etcProcessing industries: The include handicrafts for self consumption and forexchange at weekly haat on barter age system. These goods are also sold formoney to purchase other items for self consumption. For example minor forestproductsDecorative items: These handicrafts are made for commercial purposes. Theseinclude items used for decoration and are most popular. These include jewels, 10
  11. 11. ornaments, earrings, ankle bells, necklaces, head gears, head dresses, etc. Inaddition there are other decorative items such as wall paintings, deities eitherwood or stone, artifacts, etc.The craftsmen use different media to express their originality. The diversity ofthe handicrafts is expressed on textiles, metals – precious and semi-precious,wood, precious and semi- precious stones, ceramic and glass. 11
  12. 12. Common types of handicrafts:Textile based handicrafts:Popular textile handicrafts of India include hand printed textiles includingblock and screen printing, batik, kalamkari (hand printing by pen) andbandhani (tie and die). These prints are used in products ranging from bed-covers to sheets, dress material to upholstery and tapestry. The famousembroidered articles of silk and cotton, often embellished with mirrors, shells,beads, and metallic pieces are also found in India. Embroidery is done too onleather, felt and velvet etc. This segment of the industry accounts for almosthalf a million strong employment in addition to a large number of designers,block makers, weavers and packers involved in the trade.Clay, Metal and Jewelry:Brass, copper, bronze, bell metals are used for a variety of wares and in avariety of finishes. Metal craft contains diverse range of objects such as metaljewelry, metal utensils, silver ware, brassware, metal statues. Scintillatingornaments are available in a wide range of patterns, styles and compositions. 12
  13. 13. Made from precious metals, base metals, precious and semi-precious stones;these ornaments have traditional as well as modern styles.Woodwork:Woodcraft covers broad range of techniques such as woodcarving,woodworking, wood burning etc. Woodcraft refers to the skill in carving orfashioning objects from wood. Wooden articles in India range from the ornatelycarved to the absolutely simple. One can find toys, furniture, decorativearticles, etc, bearing the art and individuality of the craftsman. India is knownparticularly for its lacquered wood articles.Stone Craft:It is an art or skill of manufacturing objects by combining together pieces ofrough natural stones. The intricately carved stoneware made of marble,alabaster or soapstone, etc., inlaid with semiprecious stones carry on theheritage of Indian stone crafts. 13
  14. 14. Glass and Ceramic:Glass and ceramic products are a fast upcoming segment in the handicraftsfrom India. Ceramics is an art of making different kind of objects such asearthenware, porcelain, tiles, cookware, dinnerware etc with the help of firedclay. Glass crafts include includes assorted range of crafts such as glass-blowing, glass bead making, stained glass paintings, hand paintedglassware, glass pearls etc. The age-old production process of mouth-blowingthe glass instills a nostalgic feeling. The varied shapes of ceramic and glass in anumber of colors, would appeal to Western aesthetics while retaining theIndian touch.Designing in handicraftsDesigning is a very vast subject and has different meanings for item to item,source to source and product for academic and practical purposes separately.The designing can be categorized in five types viz.: Natural design, Decorative &Stylish Design, Structural Design, Geometrical Design, Abstract Design; In Natural design the ideas and motives are taken from nature flora and fauna. Natural design is generally used in children room to acquaint them with nature and surrounding. These designs should not be tinkered to preserve the esthetic beauty and essence of the design. The source of decorative and stylish designs is also nature and its elements, which are produced with simplification and imagination and are meant for general customers. In structural design the structure is the main theme of the design. 14
  15. 15. In geometrical design the motive are incorporated from the geometrical patterns. In abstract design the theme is hidden in the design itself and the creator is the only person to express its theme, meaning and beauty.Craft Concentration Areas:A wide range of handicrafts are produced all over Indian art metal ware/EPNSware, wood carvings and other wooden art wares, imitation jewellery, handprinted textiles, shawls as art wares, embroidered goods, lace and lace goods,toys, dolls, crafts made of leather, lacquer ware, marble crafts etc. Although itis difficult to limit a specific place for the particular craft, the following placesare listed for their particular crafts.Handicraft clusters: India houses about 7200 clusters in the traditionalhandloom, handicrafts and modern small and medium enterprise (SME)industry sectors. Reports suggest that out of these clusters, 2500 estimated areunmapped rural industry clusters. 15
  16. 16. SWOT AnalysisAlthough exports of handicrafts appear to be sizeable, India‟s share in worldimports is miniscule. It is a sector that is still not completely explored from thepoint of view of hidden potential areas. India, a country with 26 states and 18languages and more than 1500 dialects offers an enormous range ofhandicrafts from each of the states. 16
  17. 17. Major centres in Uttar Pradesh are Moradabad also known as the"Peetalnagari" (City of Brass), Saharanpur for its wooden articles, andFerozabad for Glass. The North Western state of Rajasthan has to offer thefamous Jaipuri quilts, Bagru and Sanganer printed textiles and wooden andwrought iron furniture from Jodhpur.The coastal state of Gujarat comes with embroidered articles from Kutch.Narsapur in Andhra Pradesh is famous for its Lace and Lace goods. But this isonly a small part of the total product range. India offers much more. 17
  18. 18. Institutions Involved In Promotion Of Handicrafts:In order to provide and protect the artisans‟ skills inherited govt. both at thecentre and states have set up Handicrafts emporium at important cities and atdistrict level. These artisans are also encouraged by various governmentinstitutions to participate in national and International exhibition to show theirskills.Development Commissioner (Handicrafts)The Office of the Development Commissioner (Handicrafts) is an attached officeof Ministry of Textiles, Government of India. It is a central nodal office to workfor Socio-economic upliftment of the artisans and Supplement the efforts of theState Governments for promotion and development of handicrafts within thecountry and abroad.It has 6 Regional Offices at New Delhi, Kolkata, Lucknow, Chennai, Mumbaiand Guwahati, and 5 Regional Design & Technical Development Centres atNew Delhi, Mumbai, Kolkata, Banglore and Guwahati. There are 52Handicrafts marketing and Service Extension CentersIn addition to above, there are Field Administrative CellsThe various Institutions (like Indian Institute of Carpet Technology, Bhadohi(UP), National Center for Design Product Development (Society), New Delhi andMoradabad, Metal Handicrafts Service Center (Society), Moradabad) are alsoworking for the Development of Handicrafts in association with this office.Tribal Cooperative Marketing Development Federation (TRIFED)For the socio and economic welfare of tribal population Government of Indiaestablished an independent corporation called TRIFED. Until recently TRIF EDactivities were confined to purchase of forest products and sell them at theirretail counters. Since 1999 TRIFED expanded their activities by encouragingtribal artisans in the production of arts and crafts which they have inherited 18
  19. 19. from their forefathers. TRIBES shop are set up to show case tribal arts andcrafts by procuring the crafts from tribal artisans at remunerative prices andsell the same at these shop and organizing periodic exhibitions at differentplaces all over India and abroad.The ultimate objective of TRIFED is socio-economic development of tribalpeople in the country by way of marketing development of the tribal productson which the lives of tribals depends heavily as they spend most of their timeand derive major portion of their income from collection/ cultivation of Nontimber Forest Produce (NTFP). As a cooperative, TRIFED‟s primary objective isto serve the interest of its members therefore in order to serve their interest inthe field of marketing development of tribal products, some of the serviceswhich TRIFED offers are: To facilitate, coordinate and promote the marketing of the tribal products by its members; To undertake/promote on behalf of its members/institutions or the Govt. or Govt. organizations, inter-State, intra-State and international marketing of tribal products; To act as an agency for canalization of export and import and facilitate, wherever necessary, inter-State trade of tribal products under any Scheme formulated by Govt. of India or any other State agencies. To develop market intelligence related to supply, demand, price trends, supply/market chain, value addition and processing facilities, product quality specifications, product applications, market trends, buyers for the tribal products and disseminate the information to the members as well as planners, researchers and associate organizations and business circles etc.; To assist in capability & capacity building of the members relating to the marketing development of the tribal products; To provide consultancy and advisory services to the members relating to the activities in furtherance of their objectives; To act as advisors, consultants and project managers to Govt. projects relating to marketing development of Tribal products in the form of capacity building, infrastructure development, special programs To expand and extend the markets for Tribal Products through marketing development and promotion programs; 19
  20. 20. To assist in the development of new products through product development, product innovation, product designs, new product applications and special R&D drives for tribal products; To collaborate, network, associate with similar and allied international bodies in Fair Trade, Tribal product marketing development, Tribal Research, Tribal Funding Agencies to further the interests of Tribal Product marketing; To collaborate, network, associate with similar and allied international bodies/agencies, societies (NGOs, Co-operatives, Foundations, and Trusts, organizations (Private and Government), institutions to further the development of Tribal Products marketingStates Handicrafts and Handlooms Development Corporation LtdVarious states Handicrafts and Handlooms Development Corporation, aGovernment of India undertaking has endeavored to carry forward rich heritageof all the respective states by reaching out the products developed by theartisan residing in these states and abroad through its network of emporia anda large number of exhibitions, expositions and crafts fairs.National Centre for Design and Product Development, New DelhiNational Centre for Product Design & Development (NCDP D), nonprofitorganization, set up by Export Promotion Council for Handicrafts (EPCH) andthe office of the Development Commissioner (Handicrafts). NCDPD has beeninvolved in inviting prominent designers from oversees and working incoordination with leading design institutes and helping the Indian artisansespecially tribal, to hone their skills. NCDPD aims to provide cutting edgeassistance to the Indian handicrafts industry through international standarddesign and technical inputs. 20
  21. 21. Rural Non Farm Development Agency (RUDA)Rural Non Farm Development Agency (RUDA) established in November 1995,by the Government of Rajasthan as an independent agency to promote therural non-farm sector (RNFS) in the state. RUDA follows a sub-sectoral,integrated and cluster based approach for promoting rural micro enterprises asviable avenues of sustainable employment. Effective use and abundantavailability of local resources prompted the initial choice of three sub sectors,viz. Wool, Leather and Minor Minerals. The interventions, based on marketdemands, aim at filling in the missing links in the value addition chain byOrganizing the artisans; Skill Augmentation; Technological Development &Dissemination and Credit and Market FacilitationTo achieve these objectives, RUDA has collaborated with RNFS promotionalNGOs; Technical and Research Institutes; Design Institutes / Consultants;Private Entrepreneurs including exporters and Domestic and Internationalpromotional trade agencies RUDAs pragmatic approach towards microenterprise development has been recognized by organizations like UNDP,UNFPA, UNIDO, World Bank, KVIC, Department of R.D., etc. who have availedthe expertise o f RUDA for strategy formulation and implementation.Export Promotion Council for Handicrafts, DelhiExport Promotion Council for Handicrafts (EPCH) has been established underthe Exim-Policy of Govt. of India in 1986-87 and is a non-profit earningorganization. EPCH is an apex organization of trade, industry and governmentsponsored by Ministry of Textile, government of India for promotion ofhandicraft from country and projected Indias image abroad as a reliablesupplier of high quality of handicraft goods & services and ensured variousmeasures keeping in view of observance of international standards andspecifications 21
  22. 22. Council of Handicrafts Development Corporation, DelhiCouncil of Handicrafts Development Corporation (COHAN DS) represents 28state government corporations of India and functions under the aegis of theoffice of Development Commissioner (Handicrafts), Ministry of Textile.COHANDS acts as facilitator for undertaking the integrated design andtechnical development workshops, interior design and participating in domesticand international fairs, cultural programmes, organising seminars andsymposiums.Khadi and Village Industry (KVIC)KVIC works under the administrative control of the Ministry of Industry,Government O f India under the department of S mall-Scale Industries andAgro and Rural Industries. KVIC has a 10 member commission at the policymaking level. The Commission consists of six zonal members (one of whom isChairman), two expert members and two official members (the Chief Executiveofficer and the Financial Advisor to the Commission). The Chairman, CEO andF A are full time members. The headquarters of KVIC is in Bombay and it hasits State and Regional Offices in all the States. It has training, production andSales centers throughout the country. KVIC is having 30 State khadi andvillage industries board, over 3500 institutions and over 29000 cooperativesocieties. There are around 14200 sales outlets in t he country in KVI Sector. Itis having 46% women participation in its activities. 30% beneficiaries belong toSC/S T. KVI Boards assist over 5 lakh artisans. It has reached 2.35 lakhsvillages. Some of the major functions of KVIC are the planning, promotion,organisation and implementation of programs for the development of Khadi andother village industries in the rural areas in coordination with other agenciesengaged in rural development wherever necessary.Its functions also comprise building up of a reserve of raw materials andimplements for supply to producers, creation of common service facilities forprocessing of raw materials as semi- finished goods and provisions of facilitiesfor marketing of KVI products apart from organization of training of artisansengaged in these industries and encouragement of co- operative effortsamongst them. To promote the sale and marketing of khadi and/or products of 22
  23. 23. village industries or handicrafts, the KVIC may forge linkages with establishedmarketing agencies wherever feasible and necessary.The KVIC is also charged with the responsibility of encouraging and promotingresearch in the production techniques and equipment employed in the K hadiand Village Industries sector and providing facilities for the study of theproblems relating to it, including the use of non- conventional energy andelectric power with a view to increasing productivity, eliminating drudgery andotherwise enhancing their competitive capacity and arranging fordissemination of salient results obtained from such research.Further, the KVIC is entrusted with the task of providing financial assistance toinstitutions and individuals for development and operation of Khadi and villageindustries and guiding them through supply of designs, prototypes and othertechnical information.In implementing KVI activities, the KVIC may take such steps as to ensuregenuineness of the products and to set standards of quality and ensure thatthe products of Khadi and village industries do conform to the standards.The KVIC may also undertake directly or through ot her agencies studiesconcerning the problems of Khadi and/or village industries besides research orestablishing pilot projects for the development of Khadi and village industries.The KVIC is authorized to establish and maintain separate organisations forthe purpose of carrying out any or all of the above matters besides carrying outany other matters incidental to its activities.Non Government OrganizationsVarious non- government organizations organize capacity building cumtraining programme at their respective clusters in their states. During the fieldvisits, it has been observed that non government organisations are gettingsupport from Development Commissioner (Handicrafts), NEDFI andvariuos other government departments for promotion of tribal handicraft. 23
  24. 24. HHEC India Ltd.The Handicrafts and Handlooms exports corporation of India was establishedas Indian Handicrafts Development Corporation Ltd (IHDC) in 1958. It wasincorporated as a Private Ltd. Co. in June 1962 as a subsidiary of STC, thende-linked from STC in May 1991 and made an independent PSU under theMinistry of Textiles as a Schedule C Company. It was upgraded to Schedule BCompany from Schedule C Company in December, 2001.HHEC generates tremendous demand, response and confidence of foreignbuyers through exhibitions that will provide a synergetic platform to variousproduction houses to showcase their masterpieces and is regularlyparticipating in the International Fairs & Buyer-Seller Meets to provideguidance to these master-craftsmen for development of demand centricproducts. It also provides technical guidance to craftsmen enabling them tounderstand the finer details of Quality production, tools and technologicalinfrastructure which helps them in designing and processing of their productsIn addition to the participation in international trade fairs, buyer-seller meets,HHEC also organizes stand alone exhibitions such as Studded Gold JewelleryExhibition and handicraft shows worldwide. The focus of the corporation istowards maintaining a harmonious blending of its developmental role withcommercial activities. As in the past, the corporation continues to play a vitalrole in the promotion of Indian handmade textiles and crafts including textilesbased crafts like fashion accessories, home furnishings and decorative items.HHEC operates showrooms, exhibition halls and online shopping portals ofhandicraft items as well. 24
  25. 25. Major Distribution Channels Of Indian HandicraftsWholesalers:Besides offering wide range of goods to retailers for direct sales, this channelalso supplies large quantities of individual articles. They are very particular inmaintaining consistency in the kind of products and their quality. One of thedistinguishing features of wholesalers is to provide distribution and storagefacilities. Specialized wholesalers deal in sales to retailers as well as to finalconsumers. They maintain high quality standards and but have a narrowerand in-depth range of arts and crafts. 25
  26. 26. Importers/distributors:Most Indian giftware and handicrafts companies use importers/distributors tomarket and sell their giftware and handicrafts lines. They buy and sell on theirown account. Thus, the companies take advantage of the distributorsexpertise, his sales force and his existing distribution channels. Distributorscall on giftware and handicrafts retailers, purchasing groups andsupermarkets. The distributors mark- up varies depending on the giftware andhandicrafts item, but at least 50 percent. While the mark-ups vary according tothe distributor; they usually also depend on the exclusivity of a product and onits competitiveness in the overall giftware and handicrafts marketCommission agents:Commission agents provide Indian companies with direct access to the world-wide market and direct control. Independent commercial agents are normallyworking on a 15 percent commission and operate on a regional basis. Theyconcentrate on specialist retailers, purchasing groups and department stores.Commission agent contracts are based on stringent EU and Germanregulations. An Indian firm wishing to appoint an agent should make sure thatsuch standard contracts meet its expectations. In order to facilitate marketentry efforts by the agents their initial commission is often a few percent higherthan the "usual" commission. These additional payments are to reimburse theagent for substantial advertising and any special efforts facilitating the newproducts market entry.Department Stores:Indian companies interested in establishing business contacts with majordepartment stores, mail-order houses and retailers may also choose the directapproach. Department stores in particular, prefer to deal directly withmanufacturers. Their buyers are very specialized and only handle a limitedrange of products. At some occasions department stores also buy through 26
  27. 27. independent commercial agents. Quite often they have their own buyers as wellas a few agents that usually work with them and who know their assortments.If a department store decides to import a particular giftware and handicraftsitem, it places bulk rather than small orders.Mail Order:This kind of a distribution system has been gaining popularity from the pastfew years. Orders are being placed and mail- order delivery is becoming apopular way of reaching out to customers. Several mail order companies arebeing setup in order to specially cater the needs of customers.Internet Sales:Internet has changed the entire world. Handicrafts industry was not left behindin this transition. Internet marketing ties together the creative and technicalaspects of the Internet, including design, development, advertising and sales.Thus, internet sales are a very popular and a growing medium for thehandicrafts industry.Teleshopping:The distribution of your products via television gives a lot of advantages. One ofthe greatest advantages is: Professional presenters have enough time to explainany feature of the product. The presenters have about 12 - 15 minutes to makesure, that the customer will get any information that he needs to decide to buythe product. Hence, it is being seen as a lucrative medium by many handicraftssellers to reach out to the customers. Both, national and international, theteleshopping market is growing expansively. The products are selling very fastvia these channels. 27
  28. 28. E-Commerce:Internet has emerged as a one of the promising distribution channel for sellingthe handicrafts products. It is estimated that internet will be one of the majorchannel for the distribution of handicrafts products through E-Commerce.Easily availability on global basis and cost effective way has made Internet agood marketplace to buy, sell, and promote the products.E-commerce is the single most booming way of product purchase in India andit is here the most opportunities reside in the field of product promotion,marketing etc. 28
  29. 29. Indian Handicrafts Industry: Opportunities and ChallengesOpportunities available in Indian handicraft sector are:Reports suggest that every Indian state comes with their own style ofhandicrafts that displays distinctiveness. There are ample opportunities forgrowth present in the Indian handicraft sector such as: Strong international presence/ interest. Huge trained and skilled manpower base. Rising export market for quality products across Europe, Latin America and US. Social interventions and structures. Traditional knowledge base. Rising flow of tourists in India. Growing disposable income along with the desire to own multi- faceted artifacts.With the onset of globalization in 1991, India has undergone many changes indifferent spheres. The worth of Indian handicrafts in the international marketwas realized when exports successfully crossed Rs 1220 crores in 1990-91from Rs 10 crore in the mid fifties. It is believed that the forces of globalizationhave positively impacted the growth prospects of the Indian handicraft sector.The handicrafts sector has made considerable contribution to the Indianeconomy via export and its importance can be judged with the increase inemployment potential.Challenges in handicraft sector:Although, many domestic companies are positively responding to the globalconditions, but the international-domestic combination also comes withconsiderable multiplicity. Despite the strong growth momentum, the sector alsofaces various challenges: 29
  30. 30. Originality faces threat: In any market, emphasis is laid on the consumptionpattern. When the demand for any product is high, it should be made availableeven if the social costs are high. This is leading to the development ofcontemporary artefacts that address the demands of the people. In manyrespects, contemporary artisans maintain the traditionalism and alsosimultaneously meet the demands of the international consumers or localtourist market. The real problem comes up when originality is threatened inthe very process of innovation.Changing patron-client network: It is believed that in the present marketsystem, the craft industry has seen much vulnerability. With the developmentof the modern market economy, the old patron-client business network is fastdeclining. The artisans are dependent on middle men and trader entrepreneursto sell their products.Changing occupation: Reports suggest that majority of the artisans in India isilliterate as they usually do not have formal education. This is forcing manyartisans to shift to other professions rather than just sticking to theirhereditary occupation.Handmade v/s Machine made: Since mass production and risingmechanization are becoming the norms of the day, handmade products are fastdisappearing.Present government interventions to step up growthDespite the adaption of the liberalization of policies, the handicrafts sector seesintervention from government to strengthen productivity. In the Indianconstitution, handicraft has been defined as state subject and it is stated thatthe responsibility of development and promotion of crafts lies with stategovernments. The central government via developmental schemes plays the roleof supplementing their efforts. To strengthen holistic growth of the sector, quitea few generic schemes have been implemented.Marketing Support and Service Scheme: Aims to create awareness about theIndian craft products among the people via marketing events, providingservices in the form of entrepreneurship and providing financial assistance tostate handicrafts corporations for setting up new shops. 30
  31. 31. Baba Saheb Ambedkar Hastshilp Vikas Yojana: Government hopes to developthe handicrafts sector via the participation of craftspersons. It is implementedthrough social, marketing and financial interventions.Design and Technology Upgradation Scheme: It hopes to supply modern tools,upgrade the skills of artisans, revival of rare crafts by offering training alongwith outsourcing.Export Promotion Scheme: It works for the promotion of export of handicraftswith special emphasis on hand-knotted carpets and floor covering. The maincomponents of this scheme are product development, marketing and alsowelfare measures.Research and Development Scheme: It aims to get feedback on economic,social, aesthetic and promotional aspects of various craft goods.Training and Extension Scheme: It works in the direction of capacity building.Bima Yojana for Handicrafts Artisans: The Yojana provides life insuranceprotection to the artisans, either male or female who are in the age group of 18-60 years. It is being implemented in association with the Life InsuranceCorporation of India ltd (LIC).Special Handicrafts Training Projects: Under this programme, steps are takento upgrade the skills of existing and also new craftpersons, enhanceemployment opportunities in the handicrafts sector.Apart from the above mentioned schemes, Centre has been taking special stepsfor strengthening the crafts by popularizing the products.Recently, the Export Promotion Council for Handicrafts (EPCH) inked anagreement with Kazakhstan-based Almaty Chamber of Commerce and Industryto raise the Indian handicrafts exports in the Commonwealth of IndependentStates (CIS) region. 31
  32. 32. Chapter II: Introduction to some contemporary marketing trends:E-marketingThe purpose of e-marketing is to exploit the internet and other forms ofelectronic communication to communicate with target markets in the mostcost-effective ways, and to enable joint working with partner organizations withwhich there is a common interest. The internet and interactivity is alsopermeating the traditional methods of communicating with customers.Benefits of E marketing:The benefits of e-marketing are wide-ranging: Delivery of massive amounts of information in a user-friendly way. Brand-building is a more recent benefit, made possible by the rapid spread of broadband connections, allowing users to experience dramatic imagery and animation, as well as enhanced communication and interaction. Two-way interaction between the suppliers and customers, and between customers and other like-minded customers. These interactions apply at all stages of the „customer journey‟, a cycle of thoughts, decisions, and actions by the visitor before, during and after their visit. Joining promotional activity seamlessly with online purchasing. Cost-effectiveness in conveying information and products on sale directly, cheaply and at short notice to prime prospects, through the web, e-mail and mobiles. The ability for firms to engage with customers on a one-to-one basis, but also to use „one-to-many‟ activities. 32
  33. 33. Social Media & SM Based MarketingSocial media refers to the means of interactions among people in which theycreate, share, and exchange information and ideas in virtual communities andnetworks. Social media depends on mobile and web-based technologies tocreate highly interactive platforms through which individuals and communitiesshare, co-create, discuss, and modify user-generated content. It introducessubstantial and pervasive changes to communication between organizations,communities and individuals.Social media differentiates from traditional/industrial media in many aspectssuch as quality, reach, frequency, usability, immediacy and permanence. Thereare many effects that stem from internet usage. According to Nielsen, internetusers continue to spend more time with social media sites than any other typeof site. At the same time, the total time spent on social media in the U.S. acrossPC and mobile devices increased by 37 percent to 121 billion minutes in July2012 compared to 88 billion minutes in July 2011.Social media technologies take on many different forms including magazines,Internet forums, weblogs, social blogs, micro-blogging, wikis, social networks,podcasts, photographs or pictures, video, rating and social bookmarking.Social networks are online communities of people who share common interestsand activities. They provide a user with a collection of various interactionpossibilities, ranging from a simple chat, to multiple video conferences, andfrom the exchange of plain email messages to the participation in blogs anddiscussion groups. The website is no longer just a static page, but a dynamicplatform which allows users the autonomous generation of content and thepossibility of telling their own experiences.With millions of customers on tap, firms are coming up with new andinnovative methodologies to promote their brands and products online in a bigway.The following infographic (courtesy: digital surgeons) explains the nuances ofthe two most popular media right now, Facebook & Twitter. 33
  34. 34. 34
  35. 35. Literature Review in generalSearch Marketing is a term applied to marketing techniques implemented atSearch Engines such as Google, Yahoo! or in order to drive andincrease website traffic (Moran and Hunt 2005). Search Engines have becomethe central access gate to booking a holiday or purchasing tourism productsand services. In order to achieve favorable positions two different SearchMarketing techniques are used by marketers. The first is Search EngineOptimization (SEO) at which the focus lies with altering the websites contentand structure in such a way that the website is ranked naturally high forcertain keyword phrases.The second technique is paid advertisement or placements also known asSponsored Listings, which plays a more active part in advertising than SEO.Sponsored listings are part of Search Marketing and are situated above theorganic results on Search Engines. They are a form of online advertisement andare mostly shown separated from other search results.Social media have been defined as “a group of Internet-based applications thatbuild on the ideological and technological foundations of Web 2.0, and thatallow the creation and exchange of User Generated Content” (Kaplan &Haenlein, 2010, p. 61). In their definition, Safko and Brake (2009) give abroader role to social media by including not only the media but also the“activities, practices and behaviours among communities of people who gatheronline to share information, knowledge, and opinions using conversationalmedia” (p. 6).Social media as a term should not be associated exclusively with socialnetworking sites. The latter describes only a subset of social media and refersto online systems enabling users to become members, create a profile, build apersonal network connecting them to other users with whom they exchange ona frequent basis skills, talents, knowledge, preferences and other information(Boyd & Ellison, 2007; McKinsey, 2007; Lenhart & Madden, 2007). 35
  36. 36. Social media influence several components of consumer behaviour such asawareness, in- formation acquisition, opinions, attitudes, but also purchasebehaviour and post-purchase communications and evaluation (Mangold &Faulds, 2009). It is claimed for example that virtual communities, a term usedto describe a subset of social media, serve as reference groups with their powerderived from the heterogeneity of its members, while their influence differsacross the various phases of the consumer decision process (De Valck et al.,2009).However in a similar study, Jepsen (2006) found somewhat contradic- toryresults: Virtual communities dramatically increase consumer access to non-commercial individualized information and replace to some extent commercialsources of information, but replace primary reference groups to a very limitedextent. 36
  37. 37. Research Methodology: Scope & DesignApplication based cases regarding social media based marketing andpromotion have been studied.Of the vast majority of cases found online, only examples with Indiancontext are taken as to remain relevant to current scope of study.The research is mostly focused on secondary data and desk-researchdata obtained through published reports, info-graphics and articles.For primary data collection regarding the industry, functioning anddecision making processes, conversations with select people inresponsible positions in the companies were organized. The respondentsare experienced in their domains and in a position to offer insights intothe workings and nuances of the industry.Inferences were then drawn from those conversations and thus emergeda platform for comparison, suggestion and recommendation.Data and opinions regarding artisans, cluster studies regardinghandicraft production are taken directly from representatives ofrespective organizations, people more or less directly involved in theindustry. The suggestions are verbatim based on their insights &perceptions. 37
  38. 38. Study: Application-based Cases in Social Media and E-MarketingVolkswagen IndiaAs a relatively recent entry into the Indian automotive market, VW needed toraise brand awareness. To address this challenge, Volkswagen‟s marketingteam focused one of its key brand pillars, innovation, to make a strong impactthroughout the roll-out in India. Innovation was showcased not only inVolkswagen‟s product introductions, but also in its communications andadvertising.Volkswagen next turned to digital media to extend its success and create newopportunities for customers to connect with the brand.LinkedIn approached Volkswagen India with an opportunity to be the rst automajor to establish a presence on LinkedIn Company Pages. „Company Pages‟provide a branded home base within the LinkedIn community wherebusinesses can showcase their company, products, and services in a trusted,professional environment.Volkswagen India participated in the worldwide launch of Company Pages inNovember 2010, and soon thereafter opened up their pages to allow LinkedInmembers to post reviews and recommendations of their car line in Indiaincluding the New Beetle, Vento, and Polo. 38
  39. 39. LinkedIn member-generated recommendations of VW car models increaseddramatically with the launch the recommendation ad campaign. Over 2,700Volkswagen fans recommended their favorite car models to their professionalnetwork in just four weeks.Asian Paints: Tag a Friend HoliAsian Paints were certain about strengthening their relationship with theonline audience and hence required a social marketing campaign that wouldconvey the core message of the Asian Paints brand, that of safe vibrant colours,and had the capacity to go viral. Their objective lay in creating a campaign thatwas self sustainable, viral and true to their brand persona of Asian Paints.Thus, Tag-A-Friend-Holi application was conceptualized.The application allowed users to play holi with other users across the globewith a chance to win an iPod nano and also conveyed an eco friendly messagepertaining to water conservation. The application successfully linked AsianPaints with safe colourful fun and engaged users with the brand „Asian Paints‟at every level. This creative strategy met the needs of creating a curiosity,engaging users in social interaction and maintaining an active buzz during thefestive period of Holi.The fun factor of the app was its biggest selling point. For 8 days from 26thFebruary to 5th March, 2010 the application added 16,755 monthly active Facebook users 924 Facebook fans 334-the highest number of victims by 1 person 23,819 times the app was successfully played 1,59,914 page views 67,434 unique page viewsThe application met the need of users separated by distance to play holi withfamily and friends across the globe via the social network forum, & conveyedthe message of the Asian Paints brand message of safe and vibrant colours. Italso brought to light the eco friendly message involving water conservation. 39
  40. 40. HDFC Bank: India’s most SM Friendly BankHDFC Bank has presence across 8 social media channels out of which theprominent presence is on Facebook, LinkedIn, Twitter, Youtube & their officialblog. Important aspect is the engagement which they do on all these channels.HDFC‟s page on facebook generates admirable feedback from users whichserves as a ground for them to understand their fans as well as promote theirbanking products. 40
  41. 41. They have a money matters section where they provide interesting recentfinancial news of interest to their fans. Also they keep on engaging the userswith interesting puzzles/jigsaws based upon financial terms.HDFC‟s twitter approach is build upon again like their facebook approach onsharing interesting & relevant information with their followers, asking theminteresting puzzles, sharing new products & deals from their stable and so on.They have a healthy follower count of 1300+ which is growing on the dailybasis.Anna Hazare: From Social Activist to SM ActivistIn 2012, the country saw a wave of anti-corruption aandolans and protestsacross the country. It was widely seen among the media as a large scalemovement which brought together masses from different strata of society.What was interesting was how SM was used to push news, views and updatesregarding the protests and bring people on board. 41
  42. 42. 500,000 fans within a matter of time joined the FB page.This campaign was a brilliant example of marketing and promotion where noproduct is involved, just an ideology and a movement. It goes on to strengthenthe belief that SM is powerful and engaging. 42
  43. 43. Grameen Microfinance BankSince 2001, Grameen Foundation has recognized the unique role mobilephones can play in the fight against global poverty. Starting with the businessopportunities created by the Village Phone program, Grameen Foundationcontinues to develop innovative mobile pho ne- based solutions that addressthe critical needs of the most remote, most economically disenfranchisedpopulations.Few things are as important to a family‟s dignity as managing their health,making a decent income, and safely and effectively managing that income tomaximize financial opportunities. Grameen Foundation develops and deliversproducts, tools and services delivered over mobile phones that focus on health,agriculture, financial services, and livelihood creation. From poor, ruralfarmers helping their peers access information about their crops, to a“business in a box” for people to sell mobile airtime in Indonesia, to nurseshelping expectant mothers and their babies with health services in ruralGhana, our solutions empower the poor to fight “information poverty” withimportant information and services that improve their lives. 43
  44. 44. Scope of such applications in the handicraft industryThe Indian Handicraft industry has been a laggard when it comes to adoptionof social media marketing methods and aggressive e-marketing.As discussed in aforementioned topics, the sales and marketing of productshas mostly been concentrated to state-run emporiums, festivals such asLokrang, Mrignayani etc, and these efforts are mostly scattered, andunwelcoming to the new handicraft buyer. 44
  45. 45. Some sites and portals which are currently engaged in online sale andexhibition of handicrafts are as follows: (Private) 45
  46. 46. HHEC Ltd. It also operates showrooms and exhibition houses in Noida,Chennai etc. However, on visiting, general atmosphere was gloomy and notmuch enthusiasm was felt regarding sales. It is also categorized as a sick unitwhen it comes to profitability.Being a PSU, they enjoy a good network of artisans and suppliers, with accessto items that sell for lakhs in the international market. 46
  47. 47. CCIE also sells items online though marketing and strategies are more on thereluctant side. Again, being a PSU unit, their sourcing and supply chainactivities have huge potential, being government funded. 47
  48. 48. (Private)Sourcing, unprofessional supply chain and general neglect of the industry bythe government is what has kept handicrafts largely absent from the boominge-commerce scene in India. Major players like Flipkart, Tradus, eBay andothers focus on electronics, apparel and even when it comes to home décor andnovelty items, largely stay away from Indian handicraft products.This is an opportunity in disguise for state run corporations to bring intolimelight the handicraft products and market them effectively. 48
  49. 49. Chapter III: Recommendations, Conclusions & InsightsAs we have seen in the numerous examples cited, e-commerce & SM marketingmake for a potent mix to revive this industry. What is needed is a genuine,sincere approach towards embracing the newer, contemporary methods ofmarketing and product communication.Among government agencies, a brilliant example is of Madhya PradeshTourism, which has regularly been winning best state-run tourism corporationawards, and recognition for its advertisements and social media efforts.Having over 92,000 fans, the Facebook page of MP Tourism is veryprofessional, regularly updated and follows a fresh approach. Though notdirectly involved in many products they promote, their main aim of educatingthe consumer and satisfying the curiosity is served properly. 49
  50. 50. A similar approach can be adopted by state run organizations like HHEC orCCIE towards vibrantly portaying their products and kindling interest of thecustomers. A proactive approach towards the “Indianness” of the artefacts canhelp build social buzz and gradually boost customer confidence. 50
  51. 51. Simple steps like these can generate a positive impact towards the products.Such initiatives have already been taken by other handicraft producing nationslike Pakistan.Being a new field of marketing for traditionally run units, the concepts ofTechnology Acceptance Model (TAM) can be implemented to gauge how userswould accept the inculcation of technology. The model suggests that whenusers are presented with a new technology, a number of factors influence theirdecision about how and when they will use it.This study can be helpful in assessing the reluctance of management to adoptsuch methods and help instill a sense of benefit and enthusiasm. 51
  52. 52. 52
  53. 53. Social media marketing is very cost-effective compared to mainstream media.All it takes is a creative mind and commitment to the cause. These initiativescan be started by the existing staff of the company itself, someone withpenchant for marketing, interaction with customers, and knowledge abouthistory, origin, and stories behind the products.However, this being a good start, it is still only part of the story, as manyproblems plague the Indian handicraft industry. It is facing the stiff challengefrom machine-made goods and efforts should be made for the revival andsurvival of handicraft items. It has been observed that emphasis should begiven on modification and development to improve tools and equipments, whichare acceptable and comfortable to the craftsmen for products of high qualityproducts as well as are economically viable. These products will then be in aposition to surpass the machine-made items and will be the prized attractionand possession of the customers.The quality of the products should have to be of International standard. Marketintelligence, taste, trends and preferences of the customers are also required tobe identified and design diversification shall have to be undertakenaccordingly. The price of the products should be competitive and economicaltoo. 53
  54. 54. Data already collected by handloom promotion councils and departments,shows various problems plague the industry when looking at the source of thegoods and where the whole chain starts.According to the responses, various constraints caning in the way of productdevelopment were pointed out by the artisans: Unorganized market: due to dispersal of their product at distant and remote locations with or without proper communications problems. Lack of working capital Drudgery: the work on handicrafts as long drawn process bringing drudgery or tiresomeness in the work. Lack of market intelligenceDuring the surveys, their following problems of marketing were ascertained. Growing competition. Low returns for handicraft products without realizing the amount labour involved in bring out these carved handicrafts. Scarcity of raw materials. Competition from machine made products: Machine made products or substitutes by plastics encroached the hitherto preserve of the tribal. Marketing of finished products is a matter of vital importance. The elimination of middle man, who grabs the fruits of hapless craftsman‟s labor, can be achieved only through organizing of markets.The weaknesses of handicrafts industry rest upon being unorganized withdispersed production bases, lack of working capital at producer‟s end, diversityof input needs making co-operation difficult, market intelligence andperception and the attitude that craft is mainly decorative and non-essential.The challenges and threats to the craft and craftsmen are from growingcompetition in export market in view of WTO, continued low return weaningcraftsman away from their traditional occupation, scarcity of raw material dueto depletion and non-presentation of natural mediums and competition frommachine made goods. 54
  55. 55. Analyzing the status position of craftsperson in the present scenario, acraftsperson represents the profile of a person with great skill, creativity andcapability for self employment, but lacking in finance, and unsure of themarket and constantly at the mercy of intermediaries who have access to bothfinance and market.Therefore from the planning point of view, it shows that handicrafts sector isfull of possibilities for employment and export, but highly de-organized anddifficult to service. The approach to planning must be aimed at sustaining thestrength and rising to opportunities, and removing the weakness may beconverting them to strength and coping with the threats. 55
  56. 56. References growth-prospects-168982.html hones%20for%20Improving%20Market%20Access.pdf, 56
  57. 57. /business-reports/indian-handicraft-industry/handicraft- introduction.htm /business-reports/indian-textile-industry/handicraft-textile- industry.htm /business-reports/indian-handicraft-industry/handicraft-exports.html 57
  58. 58. BibliographyMukherji, T. N., Art Manufacutures of India.Powell, Baden, Handbook on The Manufactures and Arts of The P unjab.Singh, Gurucharan, Pottery In India.Postel, Michel and Cooper, Zarine. Bastar Folk Art: Shrines, Figurines andMemorials. Franco-Indian Research Pvt. Ltd., Mumbai, 1999.Reeves, Ruth. Folk Metals of India. Handicrafts and Handlooms ExportationCorp. of India, New Delhi.Barker, Alfred F., A report on the cottage textile industries of Kashmir andtheir prospective development.Chitra, V. R. and Viswanathan, Takumalla Cottage industries of India,guidebook and symposium.Walker, Daniel., Pride of the princes: Indian art of the Mughal era 58