PROJECT REPORT

In the partial fulfillment for the award of Bachelor of Technology Degree In MECHANICAL ENGINEERING From Kurukshetra University, Kurukshetra

SUBMITTED TO:Er. Gaurav Mehta AP-ME Deptt. June-2012

SUBMITTED BYABCDZ (2708200) Mech. 8Th Sem.

DEPARTMENT OF MECHANICAL ENGINEERING JAN NAYAK CHAUDHARY DEVI LAL COLLEGE OF ENGINEERING SIRSA

ACKNOWLEDGEMENT It gives us a great pleasure to present this SSI project report on XYZ Pvt. Ltd. I would like to express our sincere thanks, with a deep sense of gratitude to our Guide Er. Gaurav Mehta, AP-ME Department for his keen interest, valuable guidance and constant motivation which is primarily responsible for completion of this Project report. I am thankful to all the Mechanical Engineering Department for their valuable guidance, suggestions and timely help. The well experienced and skilled staff of Mechanical Department imparted us technical knowledge to a great extent by preparing this Project Report under the guidance of our guide and Mechanical department.

ABCZ (2708200) B. Tech. (Mechanical Engg.)

CERTIFICATE This is to certify that me the students of B.Tech. VIIIth Semester (Mechanical Engineering) have successfully completed the SSI project report entitled Concrete pipe in the partial fulfillment for the award of Bachelor of Technology Degree in Mechanical Engineering from Kurukshetra University, Kurukshetra during the academic year 2011. I wish him a prosperous & bright future with all the great silvery success in their career.

ABCZ (2708200)

Er. Gaurav Mehta AP-ME Deptt.

Er. Rajdeep Singh HOD -ME Deptt.

PROJECT REPORT Under Small Scale Industries Schemes 1. Firm Name:- XYZ Pvt. Ltd. .2. Address:- Plot no 41, Phase-II, Industrial Area, Sirsa (Haryana)-125055 3. Nature of Business: -Manufacturing of XYZ Products. 4. Target: - 500 Units per month.

CONTENTS

Description Introduction to Small Scale Industry MSME How to Start a Small Scale Industry Financial Requirements Small Industrial Development Organization Important schemes of Financial SFC Concept of Marketing Steps In Marketing Management Product Classification Organization Structure of SSI Organization Under SSI SWOT analysis Market Potential Basis and Presumption Raw Material Conclusion

Page No. 7 8 9 31 32 34 36 40 41 47 48 50 73 74 87 89

INTRODUCTION TO SMALL SCALE INDUSTRY The SSI (SMALL SCALE INDUSTRY) today is immense for the growth of the country. Small scale industries are the industries which are run with the help of hired labors and which also use some simple machine and power. The investment scale in this industry from 5 lakh to 1crore for fixed assets. Irrespective number of worker engaged is small scale industry unit. In India these type of industries are permuted to meet with the problem of excess population & unemployment so the government of India praise entrepreneur to step up small scale industries by aiding him by giving loans, land, guidance etc. The strategy adopted by the government is:1. Public entrepreneurship should remain confined only to those industries & sector where private enterprise, individual or corporate, is generally not attracted. Existing public

entrepreneurship be improved through better management & by

putting relative greatly emphasis on research &development. There is need to streamline the R&D wing of public sector enterprise. 2. All possible efforts are made very seriously (not casually) for the development of an industrial culture. It should be realize that the central core of entrepreneurship is the motive force since by its nature; entrepreneurship implies positive action and individual with the right kind of combination of ability can pursue their goal with unremitted courage and enthusiasms. 3. There is need to development management education and industrial training. 4. The development of backward region / area constitutes a new challenge. Program for their development be drawn up and should be effective implemented. 5. Adequate measure is a must for mobilizing & casting the entrepreneurs talent in the country. In this context, it should be realized that entrepreneurs are not the grief of a particular classes.

6. Economic administration by the state should be improved and made more effective so that economic policy may be fully achieving their objective in the overall interest of economy. 7. Financial institute should provide adequate and timely credit and timely create and technical assistance, especially to the small and medium sized enterprise. They may also impart knowledge about the need of economy and they should file their massive data in term of growth of new entrants or entrepreneurs in the field of industry. Definitions of Micro, Small & Medium Enterprises In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes: (a) Manufacturing Enterprises- The enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation Act,1951). The Manufacturing Enterprise are defined in terms of investment in Plant & Machinery.
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(b) Service Enterprises: The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment. In India, the Micro and Small Enterprises (MSEs) sector plays a pivotal role in the overall industrial economy of the country. It is estimated that in terms of value, the sector accounts for about 39% of the manufacturing output and around 33% of the total export of the country. Further, in recent years the MSE sector has consistently registered higher growth rate compared to the overall industrial sector. The major advantage of the sector is its employment potential at low capital cost. As per available statistics, this sector employs an estimated 31 million persons spread over 12.8 million enterprises and the labour intensity in the MSE sector is estimated to be almost 4 times higher than the large enterprises.

Enterprises Investment in plant & machinery Micro Enterprises Does not exceed twenty five lakh rupees Small More than twenty five lakh rupees but Enterprises does not exceed five crore rupees Medium More than five crore rupees but does not Enterprises exceed ten crore rupees Service Sector Enterprises Investment in equipments Micro Does not exceed ten lakh rupees: Enterprises Small More than ten lakh rupees but does not Enterprises exceed two crore rupees Medium More than two crore rupees but does not Enterprises exceed five core rupees MINISTRY OF ENTERPRISES MICRO, SMALL AND MEDIUM

The President under Notification dated 9th May 2007 has amended the Government of India (Allocation of Business) Rules, 1961. Pursuant to this amendment, Ministry of Agro and Rural

Industries (Krishi Evam Gramin Udyog Mantralaya) and Ministry of Small Scale Industries (Laghu Udyog Mantralaya) have been merged into a single Ministry, namely, MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES ( SUKSHMA LAGHU
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AUR MADHYAM UDYAM MANTRALAYA) Worldwide, the micro small and medium enterprises (MSME) have been accepted as the engine of economic growth and for promoting equitable development. The major advantage of the sector is its employment potential at low capital cost. The labour Intensity of the MSME sector is much higher than MSME constitute that of the large enterprises. The

over 90% of total enterprises in most of the with generating the highest rates of

economies and are credited

employment growth and account for a major share of industrial production and exports. In India too, the MSME play a pivotal role in the overall industrial economy of the country. In recent years the MSME sector has consistently registered higher growth rate compared to the overall industrial sector. With its agility and dynamism, the sector has shown admirable innovativeness and adaptability to recession. As per available statistics (4th Census of MSME Sector), this sector employs an estimated 59.7 million persons spread over 26.1 survive the recent economic downturn and

million enterprises. It is estimated that in terms of value, MSME sector accounts for about 45% of the manufacturing output and
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around 40% of the total export of the country. TRAINING INSTITUTES National Entrepreneurship Development Institutes

National Institute for Entrepreneurship and Small Business Development (NIESBUD), NOIDA National Institute of Micro, Small and Medium Enterprises (NIMSME) (Formerly National Institute of Small Industry Extension Training (NISIET)) Indian Institute of Entrepreneurship (IIE), Guwahati

Others

MSME Development Institutes Tool Rooms Central Footwear Training Centres, Agra & Chennai Fragrance and Flavour Development Centre, Kannauj Process-cum-Product Development Centre, Agra Electronics Service & Training Centre, Ram Nagar Institute for Design of Electrical Measuring Instruments, Mumbai

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ECOMOMIC PERFORMANCE Production The small-scale industries sector plays a vital role in the growth of the country. It contributes almost 40% of the gross industrial value added in the Indian economy. It has been estimated that a million Rs. of investment in fixed assets in the small scale sector produces 4.62 million worth of goods or services with an approximate value addition of ten percentage points. The small-scale sector has grown rapidly over the years. The growth rates during the various plan

periods have been very impressive. The number of small - scale units has increased from an estimated 0.87 million units in the year 1980-81 to over 3 million in the year 2000. When the performance of this sector is viewed against the growth in the manufacturing and the industry sector as a whole, it instills confidence in the resilience of the small-scale sector. Employment SSI Sector in India creates largest employment opportunities for the Indian populace, next only to Agriculture. It has been estimated
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that 100,000 rupees of investment in fixed assets in the small-scale sector generates employment for four persons Generation of Employment - Industry Group-wise Food products industry has ranked first in generating employment, providing employment to 0.48 million persons (13.1%). The next two industry groups were Non - metallic mineral products with employment of 0.45 million persons (12.2%) and Metal products with 0.37 million persons (10.2%). In Chemicals & chemical products, Machinery parts except Electrical parts, Wood products, Basic Metal Industries, Paper products & printing, Hosiery & garments, Repair services and Rubber & plastic products, the contribution ranged from 9% to 5%, the total contribution by these eight industry groups being 49%. In all other industries contribution was less than 5%. Per unit employment Per unit employment was the highest (20) in units engaged in beverages , tobacco & tobacco products mainly due to the high employment potential of this industry particularly in Maharashtra, Andhra Pradesh, Rajasthan, Assam and Tamil Nadu. Next came the

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Cotton textile products, Non- metallic mineral products, Basic metal industries and Electrical machinery and parts. Per unit employment was the highest in metropolitan areas and lowest in rural areas. However, in Chemicals & chemical products, Non-metallic mineral products and Basic metal industries per unit employment was higher in rural areas as compared to metropolitan areas/urban areas. In urban areas highest employment per unit was in Beverages, tobacco products (31 persons) followed by Cotton textile products , Basic metal industries and Non-metallic mineral products. Location-wise Employment Distribution Rural Non-metallic products contributed 22.7% to employment

generated in rural areas. Food Products accounted for 21.1%, wood products and chemical products shared between them 17.5%. Urban As for urban areas, Food Products and Metal Products almost Equally shared 22.8% of employment. Machinery parts except Electrical , Non-metallic mineral products, and Chemicals & Chemical products between them accounted for 26.2% of Employment. In metropolitan areas the leading industries were Metal products, Machinery and parts except electrical and Paper
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products & printing . Export SSI Sector plays a major role in India's present export performance .45%-50% of the Indian Exports is contributed by SSI sector . Direct exports from the SSI Sector account for nearly 35% of total exports. Besides direct exports, it is estimated that smallscale industrial units contribute around 15% to exports indirectly. This takes place through merchant exporters, trading houses and export houses. They may also be in the form of export orders from large units or the production of parts and components for use for finished exportable goods. It would surprise many to know that non-traditional products account for more than 95% of the SSI exports. The exports from SSI sector have been clocking excellent growth rates in this decade. It has been mostly fuelled by the performance of garments, leather and gems and jewellery units from this sector. The product groups where the SSI sector dominates in exports, are sports goods, readymade garments, woolen garments and knitwear, plastic products, processed food and leather products. The SSI sector is reorienting its export
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strategy towards the new trade regime being ushered in by the WTO. Opportunity The opportunities in the small-scale sector are enormous due to the following factors: :-Extensive Promotion & Support by Government :-Less Capital Intensive :-Reservation for Exclusive Manufacture by small scale sector :-Project Profiles :-Funding - Finance & Subsidies :-Machinery Procurement :-Raw Material Procurement :-Manpower Training :-Technical & Managerial skills :-Tooling & Testing support :-Reservation for Exclusive Purchase by Government :-Export Promotion :-Growth in demand in the domestic market size due to overall
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:-economic growth :-Increasing Export Potential for Indian products :-Growth in Requirements for ancillary units due to the increase in number of green field units coming up in the large scale sector. :-Small industry sector has performed exceedingly well and enabled :-our country to achieve a wide measure of industrial growth and diversification. By its less capital intensive and high labour absorption nature, SSI Sector has made significant contributions to employment Generation and also to rural industrialisation. Thissector is ideally suited to build on the strengths of our traditional skills and knowledge, by infusion of technologies, capital and innovative marketing practices. This is the opportune time to set up projects in the small-scale sector. It may be said that the outlook is positive, indeed promising, given some safeguards. Thisexpectation is based on an essential feature of the Indian industry and the demand structures. The diversity in production systems and demand

structures will ensure long term co-existence of many layers of

demand for consumer products / technologies / processes. There will be flourishing and well grounded markets for the same product / process, differentiated by quality, value added and sophistication. This characteristic of the Indian economy will allow complementary existence for various diverse types of units. The promotional and protective policies of the Govt. have ensured the presence of this sector in an astonishing range of products , particularly in consumer goods. However, the bugbear of the sector has been the inadequacies in capital, technology and marketing. The process of liberalization coupled with Government support will therefore , attract the infusion of just these things in the sector. Small industry sector has performed exceedingly well and enabled our country to achieve a wide measure of industrial growth and diversification. By its less capital intensive and high labour absorption nature, SSI sector has made significant contributions to employment generation and also to rural industrialization. This sector is ideally suited to build on the strengths of our traditional skills and knowledge, by infusion of technologies, capital and innovative marketing practices. So this is the opportune time to set up projects in the small scale sector. It may be said that the outlook is positive, indeed promising, given some safeguards . This
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expectation is based on an essential feature of the Indian industry and the demand structures. The diversity in production systems and demand structures will ensure long term co-existence of many layers of demand for consumer products / technologies / processes. There will be flourishing and well grounded markets for the same Product / process, differentiated by quality , value added and sophistication. This characteristic of the Indian economy will allow complementary existence for various diverse types of units. The promotional and protective policies of the Govt. have ensured the presence of this sector in an astonishing range of products, particularly in consumer goods . However, the bug bear of the sector has been the inadequacies in capital , technology and

marketing . The process ofliberalization will therefore, attract the infusion of just these things in the sector. MSME and their role in socio economic development The importance of Micro, small and medium enterprises (MSME) for its contribution in the Indian economy growth is a matter of record and needs no further elaboration. However with the changing focus from economic growth to inclusive growth, MSME sector role in the socio economic development of India needs to be
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understood, explored and facilitated. What is so significant about MSME that makes them special in their economic development of the country? Here are few facts which may give answer to this question. Wide spread reach: There are around 12.34 million (1) MSMEs, including 1.9 million registered one which are spread out across the length and breadth of India. They may be touching the lives of 123.4million directly or indirectly which is roughly 10% of Indias population. Major share in GDP: MSMEs combined output is roughly 7% of countrys Gross Domestic Production (GDP). Big employment generator; MSME sector is the second largest manpower employer in the country next only to agriculture sector. It provides employment to more than 20 million people which is roughly 2 % of countrys population. Looked from social angle, it helps in solving the unemployment and under-employment relation to socio

problem in the society. Facilitates balanced regional development: Dispersion of

MSMEs in all parts of the country helps in removing regional imbalances by promoting decentralized development of industries. MSME can be found everywhere, which may be rural, urban, coastal, desert, mountains, forest, backward/ forward areas. This decentralized concept also helps in reducing the other problems like pollution, congestion, housing, sanitations etc. Helps in equitable distribution of wealth/ income: When the entrepreneurial talent is allowed to grow in different regions and areas, the income is also distributed instead of being concentrated in the hands of few. This help in solving a big social issue of bridging the gap between rich and poor. Act as nursery for entrepreneurship: MSMEs provide a natural habitat for entrepreneurs. Through this platform, the latent/ raw talent available locally can hone their skills and talents, to experiments, to innovate and transform their ideas into goods and services needed by the society.

HOW TO START A SMALL SCALE INDUSTRY The steps involved in starting a small scale industry are:22

 Product Identification: Conduct market survey and study the product as regard their demand in the market. Check whether it is a seasonal product or it has demanded throughout the year. Study similar product available in the market that can be probable competitor. Analyze them as regards their utility, quality and cost. Find whether can be exported. Decide the product that you are going to manufacture, on the basis of:a) Market Survey b) Financial implication involved c) Technical knowhow available d) Experience in the line, etc. Preparation of preliminary project report to get rough idea on machinery, raw material and financial requirement. Select a proper site for locating the unit.

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1. Take a building for factory on hire or construct your own factory building. 2. Get yourself conversant with the rules and other information available from small-scale industries, Ministry of Industry, New Delhi. 3. Prepare a scheme in detail to manufacture the selected product such a scheme should include the requirement of and the approximate cost of:i. Land and building ii. Machinery, tools and other equipment iii. Direct labour iv. Indirect labour v. Direct material cost vi. Indirect material cost vii. Selling and distribution overheads viii. Working Capital for a unit time ix. Depreciation x. Total production cost per unit time
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xi. Percentage of profit. Make a detailed project report Apply for registration. The scheme after it has been prepared is sent for approval to the Directorate of Industries of the particular state. A small scale unit has to get itself registered with the Directorate of industries in order to avail various facilities provided by the government, such as:I. II. III. IV. V. Financial assistance Raw materials water and power Import license Factory accommodation Government order If required apply for loan. Apply for income tax and sales tax numbers. Recruit personnel.

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REGISTRATION REQUIREMENT

OF

SMALL

SCALE

INDUSTRIES

Even if State Directorate of Industries does not demand for licensing under development of SSIs but we should go for its registration for our profit. Some special things are there which are necessary to be licensed. The incentive scheme provided by the government is also provided to those firms which are registered so for this reason registration is beneficial.

The registration of SSI is of two types:1) Provisional registration. 2) Permanent registration. The provisional registration is provided to the unit for starting two years. This is provided before production. If still the firm could not run in actual production it can also be renewed by state directorate of industries. INCENTIVE FACILITIES
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In every state various incentive schemes are provided for development of these SSIs. The methods and amounts are depending on the industrial policy and financial state of that area. Various facilities are: Capital subsidy Diesel generator subsidy Electricity subsidy Project report subsidy Technical know how subsidy Interest subsidy Sales tax subsidy Interest free loan against commercial taxes Seed money assistance

TYPES OF CONSTITUTIONS The criteria of classification may be depend on limits of statutory norms, capital investment, quantum of loan, annual income etc.

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Basic names of constitutions are: Proprietorship: as its name implies only one person is the owner of the company. All the machinery setup, all facilities, workers, money investment is in the hand of a single body. He is the only responsible person for all types of profits and losses. The only problem in this case is that all losses and accidents happened are only suffered by the owner only. Partnership: in this type two or more person shared the firm. According to INDIAN PARTNERSHIP ACT 1932 a partnership deed is prepared in which all the terms and conditions are included. The firm is drive according to these terms. In case of any problem all the partners will suffer equally. Private limited company: in private limited company there is minimum two and maximum fifty promoter director. The registration is done under the company act 1956 under REGISTRAR OF COMPANIES. Company
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made its MEMORANDUM & ARTICLES OF ASSOCIATION and all the scope of work is regulate under these. Public limited company: private limited and public limited are almost of same configuration with the only difference that public limited company can sale its shares in general public but private limited company is not authorized to do so. Co-operative society: under co-operative society act the firms are registered by state co-operative department. The group can be minimum of ten members. These are also work under the norms and conditions made by its own memorandum and articles of association.

FINANCIAL REQUIREMENT Since independence, government of India has been giving all possible encouragement of SSI. A number of organizations have been step up by the government of India to provide assistance and
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incentive to small scale industry. These packet ages of assistance are providing to SSI by a large number of organization operative at national &state level. Development program are being carried out at two level 1. National Level 2. State Level AGENCIES WHICH WORK AT NATIONAL LEVEL ARE:a) Small Scale Industrial Board (SSIB) b) Small Scale Industries Development Organization (SIDO) c) National Small Scale Industrial Corporation (NSIC). AGENCIES WHICH WORK AT STATE LEVEL ARE:a) State Directorate of Industries (SDI) b) District Industrial Centre (DIC) c) State Small Industrial Corporation (SSIC) d) State Financial Corporations (SFCs) e) Commercial Banks f) Small Industries Development Bank of India (SIDBI). NATIONAL LEVEL SSIB
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It is all advisory body and comprises state government ministry office and representative of several institution & association. Its functioning is to plan, advice &coordinate the activities of center and state government. As such it does not render direct help to entrepreneur. However, it helps to government in involving new polices and program for small scale sector. SMALL INDUSTRIAL DEVELOPMENT ORGANIZATION (SIDO) Its headquarter at Nirman Bhavan, new Delhi headed by the development commissioner (SSI) has a network of small industries Service Institute (SISIs) one in each state which help In economical, technical, industrial information services,

management casualty services, training & marketing. NSIC Its headquarter at New Delhi & regional office at Kolkata, Mumbai, Chennai, Guwahati etc. Facilities provided:31

Supply of machine and equipment on hire purchase 1.) Distribution of scare raw material imported components. 2.) Marketing assistance 3.) Assistance to SSI in securing order for railway and defense. 4.) Operating a credit guarantee scheme for those units which are registered within. STATE FINANCIAL CORPORATION Almost every state has its own financial cooperation to provide machine and long term loans small and medium sale industries. Amount of loan varies from Rs. 5000 to Rs. 6 Lakh and these are repayable in equal installments spread over a period of 10-12 years.

Important schemes of financing SFC are 1) A loan scheme for financing of village and cottage industries. Under this scheme they are financed to the extent of Rs. 25,000 and the interest rate is very low.

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2) Assistance to tiny units these grant assistance up to Rs. 2.00 lakh. 3) Scheme for technical entrepreneur in order to encourage self employment these corporation provide financial assistance up to Rs.2.00 lakh at very low interest rate to such technical entrepreneurs who have acquired a diploma or degree in any discipline of engineering . 4) Loans to hotel industry 5) Scheme for SC/ST Grant financial assistance to SC/ST entrepreneurs at a nominal margin rates are charged at the rate of 10%. 6) Scheme for physically handicapped these provide financial assistance up to Rs. 3.00 lakh at a rate of 10%.

COMMERCIAL BANKS SBI and its subsidiary banks and other nationalized banks provide liberal term loans and working capital to small scale entrepreneurs and these loans are advanced for purchase of machine and material
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and to the technical entrepreneurs to encourage self employment. Specialized institute like, Central Institute of Tool Design, Hyderabad, Central Tool Room, Ludhiana and Kolkata, Central Institute of Hand Tool Jalandhar, Institute for Design of Electrical Measuring Instruments (IDEMI) Mumbai, Integrated Trading centre, Nilokhedi, National institute of small Industry Exton, Hydrabad and National Institute for Entrepreneurship and Small Business Development. They conduct special courses,

programmers, Workshops, training programmers for the benefits of small scale industries. Credit Support Credit is the prime input for sustained growth of small scale sector and its availability continued to be a matter of concern. To provide credit support to the various SSI units various policies have been formulates by the GOI. Various institutes like SFC, SIDC,

NISC, and SIDBI are providing financial supports to various SSI units CONCEPT OF MARKETING
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Studies reveal that different organizations have different perception of marketing and these different perceptions have led to the promotion of different concept of marketing. It is found that at least 5 distinct concept of marketing have guided and are still guided business terms. They are: 1. Exchange concept. 2. Production concept. 3. Product concept. 4. Sales concept. 5. Marketing concept. 1. Exchange concept:- the exchange concept of marketing as the name indicates hold that the exchange of a product b/w the seller a buyer is a central idea of marketing. But a proper scrutiny of the marketing would readily reveal that marketing is very much broader than exchange. The other important aspect of marketing such as concern for the customer, the generation of the venue satisfaction, the creative selling and integrated action for service

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the customer get completely overshadowed in this concept of marketing. 2. Production concept: - According to the production concept marketing is a merely related to production .They believe that marketing can be managed by managing production. The concept hold that consumer would as a rule supported these product that are product in a great volume and allow unit cost organization voting for this concept are influenced by a drive to produce all that they can .They do achieve high production efficiency and a substantial reduction in the unit cost of production. Yet they often do not get customer as they expected. Customers after all are motivated by a verity consideration in their purchases. Easy availability and low cost are not only parameters governing the costumers buying action and the production concept thus fails to drive as the right marketing polices for the enterprise. 3. Product concept: - The product concept is somewhat stiff from the production concept where as the production concept seeks to

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win markets & profits via high volume of production and low unit cost of production. The product concept to seek to archive the same results via product excellence, improved product, new products and ideally design and engendered products. It also places emphasis on quality assurance. Origination that subscribes to the product concept of marketing believes that customer goods automatically vote for products of high quality they spent considerable energy. Time and money own research and development brings in a verity of new product. They do not bother to study the market and consumer in depth. They get totally embraced with the product and almost forget the customer for whom the product is actually meant. They fail to find what the customers actually needs and what they would gladly aspect. 4. Sale concept: - the sale concept maintains that a company cannot expect its product to get pick up automatically by the costumer. the company has to consciously promote and push its heavy advertisement, high power personal selling, large scale sale promotion, heavy price discount and strong publicity and public
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relation are the normal tool used by the origination that relay on the concept. Evidently the sale concepts too generate marketing myopia just as a exchange concept, production concept and product concept. Its lead to wrong or inadequate understanding of the market and consequently a total failure in the market place. 5. Marketing concept Importance of marketing to the society:a) Marketing helps to achieve maintain and rise the standard of living marketing bring new variety of good to the consumer and better and rigorous marketing gives soon for mass production. Under mass production the cost of product is low people can more goods for their money, which results in high standard of living. b) Marketing increases employment opportunity. c) Marketing helps to increases national income. d) Marketing is a connecting link between consumer and producer.
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e) Marketing helps to maintain stability:-economic stability is the sine of any efficient and dynamic economy and economy stability is maintained only when there is balance in supply and demand. If production is more then demand the access goods cannot be sold at acceptable prices then stokes of goods would be picked up and there would be glut all the market in fall in price. Similarly, if production is less then demand price is shooting up resulting in higher price. In such a situation marketing maintains the economic stability by balancing production and consumption. STEPS IN MARKETING MANAGEMENT 1. Product planning 2. Sale Forecasting 3. Pricing Policy 4. Distribution Strategy 5. Role of Advertising (personal selling)
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6. Quality 1. Product planning:-product planning may be defined as the act of marketing out and supervising the search, screening, development and commercialization of new product, modification of existing line. Product planning involves three important considerations a) The development and Induction of new ideas. b) The modification of exiting lines as may be required in term of changing costumers need and performance. c) The discontinuance of elimination of marginal or unprofitable product. Product can be classified as:1. Customer products 2. Industrial products 3. Defense products

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1. Costumer products:-goods design for use ultimately by the costumer or household and in such from they can be used without commercial processing. 2. Industrial products:-goods which are designed to be sold primarily for use in producing goods destined to be sold primarily to the ultimate consumers. 3. Sale Forecast Defined: - a sales forecast is an estimate for the amount or unit sale for a specified future period under a purposed marketing plan or program. As define by American marketing association it is an estimate of sales in dollars or physical units for a specified future period under a purposed marketing plan or program and under an assumed set of economic and other forces outside the unit for which forecast is made. Marketing of proper sale forecast require an assessment of:1 The outside uncontrollable forces likely to influences the company sales.

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2. The internal proposed changes in the marketing strategies and tactics of the company which are likely to affect the sale. Sales forecast can be for a specified product line or can be for a market as a whole or for any portion of it. According to the time period, the sales forecast can be divided under three types1. Short Run Forecasts: - which generally extends from a few weeks to about six months or at most one year in future. Companies mostly do this as day-to-day forecasts for their production control needs and to plan for long term financial needs. 2. Medium Range Forecasts: - which extends from one year to about four years into future. This type of forecasting is important for a) Estimating profits, budgeting expenses etc. b) Determining dividing policy c) Deciding rate of maintenance expenditure d) Determining schedule of operation.
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It is use full for the following purposes:a) Estimating inventory requirement b) Providing adequate shipping facilities c) Assessing production worker requirements. d) Estimating working capital needs e) Setting production runs for each product f) Fining sales quotes 3. Long Range Forecast: - Extending to least five years into futures and in case of really large organization extending over a longer period up to ten years or even more. It is useful in following ways:1. Anticipating the magnitude and timing of capital expenditures required for new facilities in the future. 2. Determining probable trends and range of cash inflow from sales. 3. Estimating companies long range personnel needs. 4. Highlighting futures problems.

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3. Pricing polices: - Pricing is a very critical decision. Pricing decision is not easy to make. Hence sound pricing policies must be adopted to ensure that the originations secure satisfactory profit. For pricing decision a marketing manager has to be familiar with economic concept useful in pricing decision. He has to consider various pricing factor which infusing price a part from cost such as costumer characteristics, the economical product characteristics, competitive environment and government control whenever applicable. The pricing of the product materially affected the demand for it as well as the origination competitive ability for expenditure if the quality of the product is to be improved this may be possible only if the costumer are willing to pay higher price for it. Besides, if the product is not properly priced there might be reluctance from the channels of distribution. 4. Distribution Strategy: - distribution may be defined as an operation or a series of operation, which physically bring goods manufactured or produced by only particular manufactured into the hands of the final consumers to the users. Distribution strategies
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consist of distribution or sub-dividing the total products of a manufacturer on a geographical basis to various specific markets. There may be a state market, a National Market or even a worldwide market for the production while defining a strategy we have to deal with two aspects. First, is the organizational aspects, it is concerned with how and through what channels we should distribute. For this general marketing policy is responsible for deciding the various channels for distribution. Secondly, is the operational aspect of distribution or the physical distribution, it is concerned with moving of goods from one place to other, including the warehousing storage and transportation costs as well includes. These aspects are sometimes described as logistics of

distribution Advertising: To counter the market at National and

International level the GOI set up various institutes like:- 1) Export Credit Guarantee Corporation Ltd. (ECGC) 2) State Trading Corporation. (STC) 3) Trade Development Authority.
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4) National Small Industries Corporation. (NSIC) Organizational Structure of SSI: - There are 28 SISIs set up in State Capital and other industrial cities all over the country. The main activities of these institutions are as follows: -Assistance/Consultancy of prospective entrepreneurs. - Project profiles. -Entrepreneurship development programmes. - Motivational campaigns. -Production index. - Management development programmes. -Energy conservation. -Quality control and up gradation. -Export promotion. -Market surveys. -Intensive technical assistance.

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Organizations under SSI:1) Regional Testing Centers (RTCs) 2) Field Testing Stations (FTSs) 3) Tool Rooms / Tool Design Industries (TRs/TDs) 4) Trading institutes: - National Institute of Small Industry Extension Training (NISIET) -National Institute for Entrepreneurship and small business development (NIESBUD), New Delhi. -Integrated Training Centre (Industries), Nilokhedi (Haryana). 5) Product-cum- Process Development Centre (PPDICs) Six centers are in existence. There are:- Firozabad for Glass Industry. - Kannauj for Essential Oils. - Meerut for Sports Goods and Leisure Time Equipment. - Agra for foundry and forgings. - Ramnagar for Electronic Industries. -Mumbai for Electrical Measuring Instruments.
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The main motive of these centers is to upgrade the technology of the manufacturer and help in energy conservation. Training Institutes:- All the three training institutes mentioned above are an autonomous body and are under the administrative control of the office of DC (SSI).Their objectives is to identify and motivate traditional /nontraditional entrepreneurs and to provide training at National and International level .These institutes provide training by imparting seminars and workshops on topical issues . The integrated Training Centre (Industry), Nilokhedi is the only institute that imparts training to the junior field staff i.e. Investigators / SIPOs to expose to and educate them in the programmes and policies of development and promotion of small industries. At present its training consists of courses like 1) Rewinding of electric motors and house wiring. 2) Repair to diesel engine and agricultural water pumps. 3) Servicing and repair to automobiles (cars and scooters).

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SWOT Analysis Introduction Environmental opportunities are only potential opportunities unless the organization can utilize resources to take advantage of them and until the strategic leader decides that it is appropriate to pursue the opportunity. It is therefore important to evaluate environment opportunities in relation to the strengths and weaknesses of the organizations resources, and in relation to the organizations resources, and in relation to the organizational culture. Real opportunities exist when there is a close fit between environment, values and resources. An evaluation of an organizations strengths and weaknesses in relation to environmental opportunities and threats is generally referred to as a SWOT analysis. The following report will look closely into the SWOTs concept, its main aspects, and criteria for successful and effective SWOT analysis. SWOT is an acronym for Strengths, Weaknesses, Opportunities, Threats. Occasionally, it may also be found as a WOTS up analysis or the TOWS analysis. A SWOT analysis is a planning tool used to understand the Strengths, Weaknesses, Opportunities,

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and Threats involved in a project or in a business. It involves stating the objective of the business or project and identifying the internal and external factors that are either supportive or unfavourable to achieving that objective. SWOT is often used as part of a strategic or business planning process, but can be useful in understanding an organisation or situation and decision-making for all sorts of situations. The concept Any organisation undertaking strategic planning will at some point assess its own strengths and weaknesses. When combined with an inventory of opportunities and threats in the organisations external environment, the organisation is effectively making a SWOT analysis, that is it is establishing its current position in light of its Strengths, Weaknesses, Opportunities and Threats. There are several ways of graphically representing the SWOT analysis matrix or grid. Examples are shown later in this factsheet.

While at first glance the SWOT looks like a simple model and easy to apply, experience shows that to do a SWOT analysis that is both effective and meaningful, requires time and a significant resource. It requires a team effort and cannot be done effectively by only one
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person. The SWOT methodology has the advantage of being used as a 'quick and dirty' tool or a comprehensive management tool, and that one (the quick) can lead to the other (the comprehensive). This flexibility is one of the factors that has contributed to its success. The term SWOT analysis is in itself a curious term, for a SWOT is not an analysis in itself, but a number of elements when used together form a valuable framework for analysis. It is essentially a summary of a set of previous analyses even if those were just 15 minutes of mini-brainstorming with yourself in front of your computer although this approach is not recommended! The analysis, or more correctly interpretation, comes after the SWOT summary has been produced. History The SWOT analysis technique is credited to Albert Humphrey who led a research project at Stanford University in the 1960s and 1970s using data from leading companies involved in long range planning processes. The original goal was to identify why corporate planning failed. Humphrey created a team method for planning originally called SOFT analysis (Satisfactory,

Opportunity, Fault, Threat) which was used by organisations like

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WH Smith who made it part of their long range planning programme for almost 20 years.

The thinking behind the tool was:

What is good in the present is Satisfactory. What is good in the future is an Opportunity. What is bad in the present is a Fault. What is bad in the future is a Threat.

Humphreys work has developed the implementation to use the SOFT in the context of six categories which provide a framework by which issues can be developed into actions and managed using teams:

Product: what are we selling? Process: how are we selling it? Customer: to whom are we selling it? Distribution: how does it reach them? Finance: what are the prices, costs and investments? Administration: how do we manage all this?

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SWOT / TOWS ANALYSIS: - These can be defined as follows and can of below type for industry or organization:-

STRENGTH:- Determine an organisations strong points. This should be from both internal and external customers. Strength is a resource advantage relative to competitors and the needs of the markets a firm serves or expects to serve. It is a distinctive competence when it gives the firm a comparative advantage in the marketplace. WEAKNESS:- Determine an organisations weaknesses, not only from its point of view, but also more importantly, from customers. Although it may be difficult for an organisation to acknowledge its weaknesses it is best to handle the bitter reality without procrastination. A weakness is a limitation or deficiency in one or more resources or competencies relative to competitors that impedes a firms effective performance OPPORTUNITIES:- Another major factor is to determine how organisations can continue to grow within the marketplace. After all, opportunities are everywhere, such as the changes in technology, government policy, social patterns, and so on. An opportunity is a major situation in a firms environment. Key

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trends are one source of opportunities. Identification of a previously overlooked market segment, changes in competitive or regulatory circumstances, technological changes, and improved buyer or supplier relationships could represent opportunities for the firm.

THREATS:- No one likes to think about threats, but we still have to face them, despite the fact that they are external factors that are out of our control, for example, the recent economic slump in Asia. It is vital to be prepared and face threats even during turbulent times. A threat is a major unfavourable situation in a firms environment. Threats are key impediments to the firms current or desired position. The entrance of new competitors, slow market growth, increased bargaining power of key buyers or suppliers, technological changes, and new or revised regulations could represent there threats to a industrials firms success.

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TABLES & DIAGRAM:-

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How to Write a Good SWOT Analysis

In order to write a good SWOT the following criteria must be taken

Make your points long enough, and include enough detail, to make it plain why a particular factor is important, and why it can be considered as a strength, weakness, opportunity or threat. Include precise evidence, and cite figures, where possible; Be a specific as you can about the precise nature of a firms strength and weakness. Do not be content with general factors like economies of scale; Avoid vague, general opportunities and threats that could be put forward for just about any organisation under any circumstances; Do not mistake the outcomes of strength (such as profits and market share) for strengths in their won right; Improvements is not the same as strength do not confuse the two.

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 Avoid contradicting yourself in the course of the analysis, by having strengths and weaknesses that are essentially different aspects of the same strategy of resource. Come to a reasoned conclusion about whether the good points outweigh the bad ones.

Situational analysis SWOT ANALYSIS Translating SWOT issues into actions under the six categories 1. Product (what are we selling?) 2. Process (how are we selling it?) 3. Customer (to whom are we selling it?) 4. Distribution (how does it reach them?) 5. Finance (what are the prices, costs and investments?) 6. Administration (and how do we manage all this?)

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SWOT ANALYSIS DIAGRAM

Quadrant 1 is the most desirable position. The firm faces a lot of opportunities and with complimentary internal strengths to execute those opportunities. That situation supports growth oriented strategies to exploit or capitalize on the match. Microsoft and American Online companies follow this intensive development strategy. The least favourable situation would be quadrant 4. The firm faces many environmental threats and it is in a weak position. This situation will call for strategies that reduce or redirect involvement in the products or markets examined by SWOT

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analysis. A lot of companies in an insolvent situation may fall into this segment.

A firm in quadrant 2 with key strengths would face an unfavorable environment. The strategies here is to use current strengths to build long term opportunities in better product markets. Transportation firms such as Greyhound bus company when faced with long term threats such as increased competition from rail and airlines and rising costs diversified into non passenger services such as freight and financial services. A firm in quadrant 3 encounters impressive and favourable market opportunity but is constrained by internal weaknesses. The strategy for this firm is to focus on eliminating the internal weaknesses so that market opportunities can be pursued more effectively. SWOT analysis provides an excellent means through which managers can examine their firms current positions. However it does not detail or show how firms try to identify or spot internal strengths and weaknesses. A Functional Analysis whereby departments such as Marketing, Finance Information Systems and Operations are thoroughly examined to detect past trends of sales, costs, profitability and productivity. These results are compared with industry standards. This further reduces the analysis to Value
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Chain Analysis - dividing the firm into sets of separate activities that add value. SWOT analysis is a simple framework for generating strategic alternatives from a situation analysis. The SWOT framework was described in the late 1960's by Edmund P. Learned, C. Roland Christiansen, Kenneth Andrews, and William D. Guth in Business Policy, Text and Cases (Homewood, IL: Irwin, 1969). The following diagram shows how a SWOT analysis fits into a strategic situation analysis. Situation Analysis / Internal Analysis / \ \ External Analysis / Opportunities \ Threats

Strengths Weaknesses | SWOT Profile

The internal and external situation analysis can produce a large amount of information, much of which may not be highly relevant. The SWOT analysis classifies the internal aspects of the company as strengths or weaknesses and the external situational factors as opportunities or threats. By understanding these four aspects of its situation, a firm can better leverage its strengths, correct its
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weaknesses, capitalize on golden opportunities, and deter potentially devastating threats. Internal Analysis The internal analysis is a comprehensive evaluation of the internal environment's potential strengths and weaknesses. Factors should be evaluated across the organization in areas such as:

Company culture Company image Organizational structure Key staff Access to natural resources Position on the experience curve Operational efficiency Operational capacity Brand awareness Market share Financial resources Exclusive contracts Patents and trade secrets

The SWOT analysis summarizes the internal factors of the firm as a list of strengths and weaknesses.
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External Analysis An opportunity is the chance to introduce a new product or service that can generate superior returns. Opportunities can arise when changes occur in the external environment. Many of these changes can be perceived as threats to the market position of existing products and may necessitate a change in product specifications or the development of new products in order for the firm to remain competitive. Changes in the external environment may be related to:

Customers Competitors Market trends Suppliers Partners Social changes New technology Economic environment Political and regulatory environment Markets (customers) Competition Technology Supplier markets
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Labour markets The economy The regulatory environment The last four items in the above list are macro-environmental variables, and are addressed in a PEST analysis.

The SWOT analysis summarizes the external environmental factors as a list of opportunities and threats. SWOT Profile When the analysis has been completed, a SWOT profile can be generated and used as the basis of goal setting, strategy formulation, and implementation. The completed SWOT profile sometimes is arranged as follows: Strengths 1. 2. 3. Weaknesses 1. 2. 3.

Opportunities

Threats

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1. 2. 3.

1. 2. 3.

Applications and when to use it A SWOT analysis can be used for:

Workshop sessions Brainstorm meetings Problem solving Planning Strategic planning Product evaluation Competitor evaluation Personal development planning decision making

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Subject of SWOT analysis: (define the subject of the analysis here) Strengths Weaknesses

Advantages proposition

of

Disadvantages proposition

of

Capabilities Competitive advantages USP's points) (unique selling

Gaps in capabilities Lack strength of competitive

Resources, People

Assets,

Reputation, presence and reach

Experience, knowledge, data

Financials Own vulnerabilities known

Financial reserves, likely returns

Timescales, and pressures

deadlines

Marketing

reach,

distribution, awareness

Cash flow, start-up cashdrain

Innovative aspects Location and

Continuity, supply chain

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geographical

robustness

Price, value, quality Accreditations, qualifications, certifications

Effects on core activities, distraction

Reliability of data, plan predictability

Processes, systems, IT, communications

Morale, leadership

commitment,

Cultural, behavioural

attitudinal,

Accreditations, etc Processes and systems, etc

Management succession

cover,

Management succession

cover,

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Opportunities

Threats

Market developments Competitors' vulnerabilities?

Political effects Legislative effects Environmental effects IT developments Competitor intentions various

Industry trends

or

lifestyle

Technology development innovation and

Market demand New technologies,

Global influences New markets, vertical, horizontal

services, ideas Vital partners

contracts

and

Niche target markets Geographical, import export,

Sustaining capabilities

internal

Obstacles faced Insurmountable weaknesses

New USP's Tactics - surprise, major contracts, etc

Loss of key staff Sustainable financial

Business and product

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development

backing and

Information research

Economy - home, abroad Seasonality, effects weather

Partnerships, distribution?

agencies,

Volumes, economies

production,

Seasonal,

weather,

fashion influences

Advantages and disadvantages of using SWOT analysis Advantages

Simple four box framework. Facilitates an understanding of the strengths and weaknesses of the organisation.

Encourages the development of strategic thinking. Enables a management team to focus on strengths and build opportunities.

Can enable an organisation to anticipate future business threats and take action to avoid or minimise their impact.

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Can enable an organisation to spot business opportunities and exploit them fully.

Flexible.

Disadvantages

Some users over simplify the amount of data used for decisions it is easy to use scant data.

To be effective this process needs to be undertaken on a regular basis.

The best reviews require different people being involved each having a different perspective.

Access to quality internal data sources, this can be time consuming and politically difficult (especially in more complex organisations parent company etc).

The pace of change makes it increasingly difficult to anticipate developments that may affect an organisation in the future.

The risk of capturing too much data is that it may make it difficult to see the wood for the trees and lead to paralysis by analysis.

The data used in the analysis may be based on assumptions that subsequently prove to be unfounded (good and bad). Lacks detailed structure so easy to miss key elements.
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SWOT analysis dos and donts

DO get other people involved. DO exploit any expertise and resources that are already available within the organisation.

DO use SWOT analysis in conjunction with other techniques, such as PESTLE analysis, PRIMO-F analysis, Porter's five forces, competitor analysis or scenario planning etc.

DO incorporate your analysis within an ongoing process for monitoring changes in the business environment.

DONT try to do this on your own. DONT jump to conclusions about the future based on the past or the present.

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