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  1. 1. Academy of Management Studies, 15-Laxmanpuri, Faizabad Road, Lucknow; Tel : 0522 - 2357097, 2356715Fax : 0522 - 2357097; E-mail : amslkounit2@yahoo.co.inwww.amsindia.orgConsulting Research TrainingCustomerCustomerCustomerCustomerCustomer Satisfaction StudySatisfaction StudySatisfaction StudySatisfaction StudySatisfaction StudyforforforforforNational HandloomNational HandloomNational HandloomNational HandloomNational HandloomDevDevDevDevDevelopment Corpoelopment Corpoelopment Corpoelopment Corpoelopment Corporrrrraaaaationtiontiontiontion2006 - 07
  2. 2. Submitted to :The Managing DirectorNational Handloom Development Corporation,Vikas Deep (10th & 11th Floors),Station Road,Lucknow.Customer Satisfaction StudyCustomer Satisfaction StudyCustomer Satisfaction StudyCustomer Satisfaction StudyCustomer Satisfaction StudyforforforforforNational HandloomNational HandloomNational HandloomNational HandloomNational HandloomDevDevDevDevDevelopment Corporelopment Corporelopment Corporelopment Corporelopment CorporaaaaatititititionononononAcademy of Management Studies, 15-Laxmanpuri, Faizabad Road, Lucknow; Tel : 0522 - 2357097, 2356715Fax : 0522 - 2357097; E-mail : amslkounit2@yahoo.co.inwww.amsindia.orgConsulting Research Training
  3. 3. ContentsContentsContentsContentsContents1. IntroductionIntroductionIntroductionIntroductionIntroduction 111112. Research DesignResearch DesignResearch DesignResearch DesignResearch Design 666663. The FindingsThe FindingsThe FindingsThe FindingsThe Findings 1111111111
  4. 4. Customer Satisfaction Study for National Handloom Development Corporation 11INTRODUCTION1.1 Introduction1.1.1 Handloom is an ancient industry in India. The features of this sector vary across thecountry. In some parts of Kerala, Tamil Nadu, Assam and Orissa, it has attained the statusof a mature industry and in other parts, it is still an enterprise confined to the needs ofthe household.1.1.2 The last 100 years have seen the growth of mechanized textile productioninternationally. In part due to competition, handloom has lost much of its market and isalmost non-existent in most countries. However, handlooms are still a force to reckonwithin India and some other Asian countries such as Sri Lanka, Bangladesh, Thailand,and Cambodia.1.1.3 Today, Indias textile sector comprises four important segments -- modern textile mills,independent power-looms, handlooms and garments. Though there is a huge, informaltailoring enterprise, it has not been studied or considered worthy of public attention,leave alone policy. There are also sub-sectors like textile machinery manufacturing andspinning sectors, which form part of the textile sector.1.1.4 Though it employs the largest number of people, the handloom sector is considered asunset industry and there is an air of inevitability given the relentless march ofmechanization, modernization and sophistication. Still, there are many advocates ofhandloom for reasons including ideology, philosophy, sheer love for handloom productsand economic arguments. However, irrespective of the policies, projects and aspirationsarising out of various quarters, the handloom sector is undergoing changes that areimpacting the livelihoods of handloom weavers.
  5. 5. Handloom Sector – A Key Player in Indian Economy1.1.5 While the socio-economic condition of majority of the weavers involved with thehandloom industry in the country is nothing to write home about, yet, on the contrary,the recent past has been a witness to a large market for handloom products – bothdomestically as well as internationally. Handloom production has significantcontribution to the National GDP and export earnings. According to the Ministry ofTextiles, export earnings as late as 1998-99 was Rs.1,956 crore. Current figures are alsoestimated to be around the same figure.1.1.6 The handloom sector provides employment to an estimated 12.5 million people and isthe largest rural employment provider next to agriculture – generating jobs in semi-urbanand urban areas of India as well. According to surveys conducted by various researchinstitutions over the recent past, the country has more than 38,00,000 handlooms. Innorth-eastern States, there are more than 15,00,000 domestic handlooms. Handlooms innorth and south India are geared for commercial production for domestic market andalso exporting their products abroad.1.1.7 By some estimates, there are 32 other sectors that are benefiting from the handloomsector, including transportation, financial services, marketing services, service andmaintenance services and hotels. Many handloom centres are well known tourist spots,drawing visitors from far places of India and foreign countries as well. Thus, the tourismindustrys fortunes are in part influenced by the handloom sector and its fame.1.1.8 Handlooms have an umbilical linkage with cotton farmers and the rural farm economy.Agricultural labour gets employment in handloom sector during the non-agriculturalseason. The sector has self-sustaining mechanism, including training for young weavers,irrespective of gender. The inheritance of skills, resources and capacities has remainedbeyond the realm and reach of any modern training and educational institution. Thesustaining of the weaving skill itself has not been dependent on the government or anymodern formal institution. There is also inherent flexibility for all types of communitiesto take up handloom production as a profession.1.1.9 Handlooms are environment-friendly. A handloom is an independent and autonomoustechnology. Energy impacts are almost zero. The sector thus lends itself to sustainableCustomer Satisfaction Study for National Handloom Development Corporation 2
  6. 6. evelopment policies aimed at reduction of negative impacts on the environment andecology.1.1.10 Despite the obvious advantages associated with the handloom sector in the country, it isstill important to note that the sector in India operates within a larger textile industry thatis quite different from the one within which it operated in the first half of the 20thcentury. Today power-looms dominate textile production in India and have encroachedupon the handloom sector’s traditional market. If many handloom weavers do not haveenough raw materials, it is probably because the raw material is being diverted to power-looms. The steep rise in cotton yarn prices without a corresponding increase inhandloom product prices has meant that production in some places has had to besuspended, destroying the livelihoods of handloom weavers and laying off handloomwage workers.1.1.11 The major handloom States in India are West Bengal, Tamil Nadu, Uttar Pradesh, AndhraPradesh, Assam and Manipur. These 6 States account for three-fourth of handloomweaving in the country. Almost all handloom production in India is for domesticmarkets. According to the Directorate General of Handlooms, only 1.3 percent ofworking looms produce for export markets.Handloom Markets1.1.12 The market for handloom products in the country is four-tiered and includes –The Self-consumption Sector – where handlooms are made for householdrequirements and not for sale, as in the northeast of India.The Rural Market – where weavers do the marketing themselves.The Distant Domestic Market – largely urban, and which is beyond the reach ofweavers.Export Markets1.1.13 Master weavers and private traders market 90 percent of handloom products in thecountry. The traders either retail these products through their own outlets or act asintermediaries supplying wholesalers or retailers. The bulk of exports are handledthrough merchant exporters and manufacturer-exporters – the former getting theirsupplies from manufacturers and master weavers, while the latter having their ownproduction facilities.Customer Satisfaction Study for National Handloom Development Corporation 3
  7. 7. 1.1.14 The Indian government’s policy on handlooms till recently had an obsession withemployment generation at the expense of other objectives, such as efficiency andgrowth. The overall policy of the Indian Government on handlooms revolved essentiallyaround the following four components –Focus on forming and strengthening weavers’ co-operatives – as part of a rathercomplex organizational structure that also included “apex bodies” at the State andCentral levels and to provide inputs and credit and marketing channels to the weavers.Improving productivity and quality – through improved looms, imparting new skills,designs and technology to weavers.Provision of subsidies – including assured supply of cotton yarn and credit atsubsidized rates; and other forms of protection including reservation of certain itemsfor the handloom sector.Setting up of welfare schemes – to help weavers improve their livelihood and workingconditions.1.1.15 However, realizing the crucially important position of the handloom sector with regardto the country’s economy, the Government has in the recent past, introduced a numberof schemes – aimed both at the welfare of the weavers involved in this sector, as wellas, for strengthening the various associated components, such as – quality & prices ofraw materials, development of marketing channels, infrastructural investments,improvement & patenting of designs, and the like. Some of the major schemesintroduced by the Government for strengthening the Handloom Sector in the countryare as enumerated below –(A) Development SchemesDeen Dayal Hathkargha Protsahan Yojana (DDHYP)Integrated Handloom Training Project (IHTP)(B) Marketing SchemesHandloom Export Scheme (HES)Marketing Promotion Programme (MPP)(C) Input Related SchemesCustomer Satisfaction Study for National Handloom Development Corporation 4
  8. 8. Mill Gate Price Scheme(D) Welfare SchemesWorkshed-cum-Housing Scheme (WCH)Weavers’ Welfare Scheme, including – (a) Thrift Fund Scheme (TFS); (b) NewInsurance Scheme for Handloom Weavers.(E) Scheme for Central Assistance to State Government – for setting up ofEnforcement Machinery.(F) Other SchemesIntegrated Handloom Cluster Development ProgrammeMahatama Gandhi Bunkar Bima Yojana (MGBBY).Health Insurance Scheme (HIS)Handloom Mark Scheme1.1.16 The efficacy, effectiveness & success of any specific scheme can only be vindicated byanalyzing its actual impact on the various agencies/institutions that have availed thebenefits of the scheme in the recent past and their level of satisfaction regarding thesame.1.1.17 Further, an in-depth evaluation also helps in identifying the strengths & weaknessesand earmarking the grey areas of a particular scheme. Evaluating the ultimateachievements and the impact of the various objectives planned & implemented underthe scheme not only helps fine-tune the program but also in identifying the possibleinnovations that can be introduced into the system. In light of this fact, AMS wascommissioned to undertake a “Customer Satisfaction Study for the National HandloomDevelopment Corporation (NHDC), Limited”.Customer Satisfaction Study for National Handloom Development Corporation 5
  9. 9. Customer Satisfaction Study for National Handloom Development Corporation 62RESEARCH DESIGN2.1 Customer Satisfaction Surveys – the Importance2.1.1 Throughout the global marketplace, Customer Satisfaction Surveys are often regarded asthe most accurate barometers to predict the success of an organization. Because theydirectly ask about the critical success factors of a business, if done effectively, CustomerSatisfaction Surveys can deliver powerful incisive information and provide ways for anorganization to gain a competitive edge.2.1.2 Customer Satisfaction Surveys play a major role in assisting the programme managers ofany given organization to design and implement a successful customer relationshipmanagement strategy – by way of gathering, measuring and analyzing valuableinformation with more accuracy. Customer Satisfaction Surveys help organizations togather critical feedback from their customer groups regarding the following crucialindicators, namely –• Level of satisfaction with the purchases made• Level of satisfaction with the services received• Likelihood of placing repeat orders• Likelihood of recommending the organization to others potential customers2.1.3 Obtaining customer feedback in a timely and useable format helps ensure that anorganization is meeting and hopefully exceeding customer expectations and at the sametime also provides insight on areas where changes need to be made for increasingsatisfaction and overall success.
  10. 10. 1.2.4 Customer satisfaction surveys help an organization in identifying areas of operations thatdo not meet customer expectations. Not only are customer satisfaction surveys quick andinexpensive to produce, they are also guaranteed to yield invaluable results.Organizations can use the data to implement and revise policies and procedures.1.2.5 Customer satisfaction surveys often serve as the important first step towards achieving theultimate goals of exceptional customer satisfaction, loyalty and retention. They provide afoundation on which an organization can start building their customer relationships.Further, a customer satisfaction survey also encourages clients and customers to providevital feedback on issues that can affect customer retention, including the following –Overall satisfactionProduct-specific satisfactionBrand perceptionPricingTimeliness of deliveryCustomer service satisfactionReturns and exchange process satisfactionInterest in new products and services1.2.6 In light of the aforementioned fact, AMS was commissioned to undertake a “CustomerSatisfaction Study for the National Handloom Development Corporation (NHDC),Limited”. In doing so, specific focus was made on the various customer groups thathave been associated with the procurement of two items from NHDC, namely (i) yarn;and (ii) dyes & chemicals.Customer Satisfaction Study for National Handloom Development Corporation 7
  11. 11. 2.2 Study Objectives2.2.2 The specific objectives of the proposed study, were as mentioned below –(a) To assess the satisfaction levels of the various customer agencies/institutions thathave been procuring yarn and dyes & chemicals from NHDC over the last oneyear period.(b) To study the general perception & expectation of the customers and the extent towhich the same have been met.(c) To identify the deficiencies/weaknesses and shortcomings in schemeimplementation and to suggest methods to overcome the same.2.3 Methodology2.3.1 To begin with, we first collected the detailed list of all the customers who hadprocured raw materials (Yarn and Dyes & Chemicals) from NHDC during FY 2005-06from the Corporation. Subsequently, we made a random selection of least one-half (50percent) of the total agencies for in-depth study.2.3.2 In addition, discussions were also held with various officials, functionaries andprogramme managers involved with the implementation of the scheme – whetherdirectly or indirectly, including the National Handloom Corporation (NHDC) Limited,Lucknow and the various Regional Offices as well.2.3.3 The information with regard to the study was gathered from the followingundermentioned sources —• Agencies/institutions/organizations that had procured yarn and dyes &chemicals from NHDC during the last one year period, including the following–- Handloom Development Centres;- Handloom producers/exporters/manufacturers registered with HEPCand other institutions under the Ministry of Textiles/ Director ofIndustries/ Handloom Corporations of the States/Union Territories;- Approved export houses/trading houses/star trading houses forproduction of handloom items;Customer Satisfaction Study for National Handloom Development Corporation 8
  12. 12. - Members of recognized/approved handloom associations; and- Non-Governmental Organizations (NGOs)• Other agencies approved by the Development Commissioner (Handlooms),that had procured the aforementioned materials from NHDC during the lastone year period.2.3.4 In light of the geographical locations of the various beneficiary groups, it was initiallyproposed to collect the information pertaining to the study by soliciting their views andopinions through questionnaires/schedules mailed to them (both by post, as well as,through e-mail).2.3.5 However, despite mailing the schedules to cent-percent of the beneficiary groups andin spite of repeated reminders over telephone, the responses received were almost nextto minimal. This in turn, forced us to revisit our methodology and to make personalcalls on the identified respondents. In doing so, we were finally able to canvass thequestionnaires to a total of 502 respondents – amounting to a healthy 30 percent of theuniverse.2.4 Key Focus Issues2.4.1 Some of the key issues probed during the course of the customer satisfaction study, areas mentioned below —Customer Level InformationSource of information regarding the schemeLevel of satisfaction with the quality of material (yarn and dyes & chemicals)procuredLevel of satisfaction with the competitiveness of material (yarn and dyes &chemicals) procuredLevel of satisfaction regarding accessibility of material – including time lagbetween placing of order and actual deliveryCustomer Satisfaction Study for National Handloom Development Corporation 9
  13. 13. Opinion regarding the overall service delivery mechanism of NHDCSuggestions for better service delivery by NHDCCustomer Satisfaction Study for National Handloom Development Corporation 10
  14. 14. Customer Satisfaction Study for National Handloom Development Corporation 113THE FINDINGS3.1 Background3.1.1 As discussed in the previous chapter, it is evident that the knowledge of the level of customersatisfaction is essential to the survival of businesses for most modern-day organizations. Indoing so, one may well wonder as to how to ascertain whether our customers are satisfied?The best and probably the easiest method to find out whether our customers are satisfied issimply to ask them.3.1.2 In this chapter, we have made an effort to present the perceived opinions and level ofsatisfaction of the various customer groups of the National Handloom DevelopmentCorporation (NHDC) who have been essentially procuring yarns and dyes & chemicals fromthe Corporation. The overall satisfaction levels of the customers of NHDC have beenpresented in the form of overall scores on various attributes – both region-wise, as well as, atan all-India level.3.2 Scores on Various Attributes3.2.1 Before commencing the customer satisfaction study, we held in-depth interacts with theprogramme managers & officials at NHDC, as well as, with a select band of customers, with aview to gain an insight into the entire business transaction process. This in turn, played a keyrole in the identification of the key issues that are of importance to the various customergroups.3.2.2 The issues thus identified formed the basic premises for the designing of the customer
  15. 15. availability of officials is concerned — with Kolkota leading the way with an average meanscore of Further, as regards to the issue of giving sufficient time and understanding the specificrequirements of the customers, analysis revealed that customers were more or less satisfied onthis count across all the six zonal offices of NHDC.3.2.5 However, customers were not to be very satisfied with the amount of time taken by theNHDC to process their respective orders and felt that it would be indeed very helpful if thesame could be expedited.(B). Timeliness of Delivery3.2.6 On the issue of timely delivery of the products, a lot of variation was observed across the sixzones. As far as yarn is concerned, the regional offices of Hyderabad, Coimbatoor andPanipat had better scores (4 and above) vis-à-vis other zones (Table 3.2). As regards to thechemicals & dyes, the region of Hyderabad, alongwith Lucknow was among the top.Lucknow Panipat Kolkota Bhopal Hyderabad Coimbatoor1 Yarn 3.86 4.70 3.71 3.43 4.02 4.192 Chemicals 4.00 3.80 3.75 - 4.12 3.983 Dyes 4.00 4.00 3.60 2.50 4.11 4.02Table 3.2 : Timeliness of DeliverySI. ParticularsMean Score3.2.7 Further, regarding the issue as to whether the customers are provided adequate & timelyinformation by NHDC in case of delays in delivery of their respective orders, the responsewas a mixed one – with around one-half (across all the six zones) of them replying inaffirmative.3.2.8 When asked to rate the quality of response that they usually receive from the NHDC officialsat the time of making an enquiry about their orders, majority of the customer groupsexpressed their satisfaction with the response that they received from the officials.Customer Satisfaction Study for National Handloom Development Corporation 13
  16. 16. (C). Product Quality3.2.9 For any business venture to be a successful one, it is imperative that the quality of theproducts being supplied by them is of the best possible quality. Keeping this fact in mind, thevarious customer groups of NHDC were also asked to rate the quality of the various products(including yarn, chemicals & dyes) that they had procured from the Corporation. The scoresof the various regional offices of NHDC regarding this issue have been presented in Table 3.3given below.Lucknow Panipat Kolkota Bhopal Hyderabad Coimbatoor1 Yarn 4.21 4.61 4.29 3.57 4.11 4.042 Chemicals 4.55 4.20 4.75 - 4.46 4.183 Dyes 4.33 4.45 4.40 4.50 4.45 4.35Table 3.3 : Satisfaction with the Product QualityParticularsMean ScoreSI.3.2.10 As is evident from the table, majority of the customers across all the regions expressed theirsatisfaction with the quality of the products being supplied through NHDC. Though notdirectly involved with this aspect, it is nevertheless important that regular inspections shouldbe carried out by the officials at the mills to ensure that the quality of the products ismaintained at the desired levels.3.2.11 Further, as regards the capability of NHDC in ensuring the availability of the desired productsin accordance to the requirements of the customers, the scores were observed to be on thehigher side across all the three categories of products. The details have been presented inTable 3.4.Customer Satisfaction Study for National Handloom Development Corporation 14
  17. 17. customers included factors such as — delay in processing of order, poor yarn quality, delay3.2.21 Tad ed in Table 3.8 given below.3.2.22solution.3.2Overall Customer Satisfaction, the customers were alsoasked to give an overall rating of satisfaction with NHDC. The top box score with regard to.9 given on the next page –in reimbursement, restricted credit, non-availability of the desired product, problems relatedto transportation & delivery, changing interest rates (in case of delay in payment from thecustomer), settlement of bills and the like.hese customers were further asked to give their satisfaction on the way their problem wasdressed by NHDC. The scores have been presentLucknow Panipat Kolkota Bhopal HyderabadSI. ParticularsMean ScoreCoimbatoor1Ease of Availability of theConcerned Officials3.45 4.25 3.60 3.75 4.43 3.672Amount of Time taken to Solve theProblem2.55 3.25 3.80 3.25 4.14 3.613Satisfaction with the Solution of theProblem2.91 2.50 4.00 3.75 4.00 3.28Table 3.8 : Grievance Redressal MechanismOn the issue of time taken to resolve the problem, all the zones (except Hyderabad) scoredon the lower side. Furthermore, customers were also not satisfied with the outcomes of theOverall Customer Satisfaction & Loyalty3.2.1 Finally, considering each aspect of their association with NHDCthis parameter has been provided in Table 3Customer Satisfaction Study for National Handloom Development Corporation 17
  18. 18. 1 Lucknow 70.592 Panipat 94.123 Kolkota 64.294 Bhopal 66.675 Hyderabad 86.966 Coimbatoor 91.51* Figures are in PercentagesSI. ParticularsTop Box Score*(4 & 5)Table 3.9 : Overall Satisfaction3.2.2 As is clearly evident from the table, the customers from the regions of Panipat, Hyderabadand Coimbatoor appear to be pretty much satisfied – with more than four-fifth of thecustomers from these three regions providing a high satisfaction rating (4 or 5 out of 5) to theNHDC. However, at the same time, in the remaining three zones, the proportion of satisfiedcustomers was observed to be slightly low.3.2.3 The overall mean satisfaction score of NHDC stands at a very high of 4.12, as is indicated inthe zone-wise overall satisfaction scores presented in Chart 3.1 given below.Chart 3.1: Overall Satisfaction Score3.714.473.86 3.89 4.1 Loyalty3.2.4 On the issue of continuance of association with the NHDC in future, all the six zones had ahigh score. Majority of the customers expressed their intention to do business with NHDC inthe near future as well (Chart 3.2).Customer Satisfaction Study for National Handloom Development Corporation 18
  19. 19. Chart 3.2: Intention to do Business in Future4.684.533.934.334.204.333.403.603.804.004.204.404.604.80LucknowPanipatKolkotaBhopalHyderabadCoimbatoor3.2.5 Furthermore, regarding the issue as to whether they would recommend others to do businesswith NHDC, majority of the existing customers replied in the positive. The zone-wise scoreshave been presented in Chart 3.3.Chart 3.3: Intention to Recommend Others4.004.654.144.00 Satisfaction Scores on Key Attributes3.3.1 In this section, we have presented the attitudes and opinions of the customers regarding theservices delivered to them by the National Handloom Development Corporation (NHDC).3.3.2 In order to understand what customers perceived to be important in the delivery of this kind ofservice, customers were first asked to rate the importance of key attributes. To provide theseratings, customers were first asked to recall their previous interactions and transactions withCustomer Satisfaction Study for National Handloom Development Corporation 19
  20. 20. other similar organizations and subsequently to rate the perceived importance of thecomponents. Using the same attributes, the customers were then asked to rate their satisfactionlevels with the recent interactions & transactions they had with the NHDC in recent times.3.3.3 Further, both the importance and satisfaction ratings have been combined to develop acompositional model in order to determine those components which require mostimprovements from the point of view of improving the customer satisfaction with the servicesdelivered by NHDC.Importance Ratings3.3.4 Respondents were asked to rate the importance of a range of aspects concerning transactionsthey have had with an organization similar to the NHDC. In doing so, the scale used was a 5point scale, where 1= Not At All Important and 5 = Very Important. The scores of all the sixzones have been combined together in order to present All-India Scores, as provided in Table3.10 given below.Low Medium High1 Process of Placing an Order 4.56 20.25 75.19 4.042 Time Gap between Order and Delivery 3.04 15.19 81.17 4.243 Reliability in Timely Delivery 1.52 9.62 88.86 4.314 Price Competitiveness 1.52 16.20 82.28 4.145 Product Quality 1.27 10.38 88.35 4.336 Availability of Credit Facilities 1.01 7.85 91.14 4.367 Grievance Redressal 9.87 20.00 70.13 3.83MeanScoreTable 3.10 : Importance Ratings for Key AttributesSI. AttributesImportance Rating(%)Customer Satisfaction Study for National Handloom Development Corporation 20
  21. 21. Key Findingsrtance scores ranged from 3.83 to 4.36. The overall mean importancescore for the range of attributes measured was 4.18.ttributes into two groups in terms oftheir importance to the customers. Analysis revealed that among the customers of NHDC,SaThe mean impoAs part of the analysis, we attempted to rank the a‘availability of credit facilities’, ‘product quality’, ‘reliability in timely delivery’ wereconsidered to be the most important aspects of the delivery of service given by anorganization similar to NHDC.tisfaction Ratings3.3.5 s were also asked to recall their business transactions withNHDC and were asked to rate their level of satisfaction with the previously listed attributes.elationship between Performance and ImportanceFurthermore, the respondentThe findings of the same have been presented in Table 3.11.Low Medium High1 Process of Placing an Order 0.76 7.34 91.90 4.242 Time Gap between Order and Delivery 3.54 9.37 87.09 4.003 Reliability in Timely Delivery 5.32 5.57 89.11 4.094 Price Competitiveness 3.04 11.65 85.32 4.055 Product Quality 3.29 4.81 91.90 3.706 Availability of Credit Facilities 4.29 13.10 82.61 4.227 Grievance Redressal 3.29 13.67 83.04 3.97Table 3.11 : Satisfaction Ratings for Key AttributesSI. AttributesSatisfaction Rating(%) MeanScoreRCustomer Satisfaction Study for National Handloom Development Corporation 21