UNIT IV

MANAGEMENT
OF
SMALL BUSINESS
 WHAT IS A SMALL SCALE INDUSTRY?

The Small Scale Industries Board(1955) – “A unit

employing less than 50 persons if using power and less
than 100 persons without the use of power and with
capital assets not exceeding Rs. five lakhs.”
. Government of India (2000)- “Small scale undertakings
are those which are engaged in manufacturing,
processing or preservation of goods and in which
investment in plant and machinery (original cost) does
not exceed Rs. 1 crore.”
 Characteristics of Small-Scale Industries:

  Ownership:
Ownership of small scale unit is with one individual in sole-
proprietorship or it can be with a few individuals in partnership.
 Management and control:
A small-scale unit is normally a one man show and even in case of
partnership the activities are mainly carried out by the active partner
and the rest are generally sleeping partners. These units are managed
in a personalised fashion. The owner is activity involved in all the
decisions concerning business.
 Area of operation
The area of operation of small units is generally localised catering to
the local or regional demand. The overall resources at the disposal of
small scale units are limited and as a result of this, it is forced to
confine its activities to the local level.
 Technology
Small industries are fairly labour intensive with comparatively
smaller capital investment than the larger units. Therefore, these
units are more suited for economics where capital is scarce and
there is abundant supply of labour.
  Gestation period
Gestation period is that period after which teething problems are
over and return on investment starts. Gestation period of small
scale unit is less as compared to large scale unit.
  Flexibility
Small scale units as compared to large scale units are more change
susceptible and highly reactive and responsive to socio-economic
conditions.They are more flexible to adopt changes like new
method of production, introduction of new products etc.
Resources
Small scale units use local or indigenous resources and as such
can be located anywhere subject to the availability of these
resources like labour and raw materials.
Dispersal of units
Small scale units use local resources and can be dispersed over
a wide territory. The development of small scale units in rural
and backward areas promotes more balanced regional
development and can prevent the influx of job seekers from
rural areas to cities
 Objectives of Small Scale Industries

1. To create more employment opportunities with less investment.

2. To remove economic backwardness of rural and less developed regions
of the economy.
3. To reduce regional imbalances.
4. To mobilise and ensure optimum utilisation of unexploited resources of
the country.
5. To improve standard of living of people.
6. To ensure equitable distribution of income and wealth.
7. To solve unemployment problem.
8. To attain self-reliance.
9. To adopt latest technology aimed at producing better quality products at
lower costs.
FINANCIAL MANAGEMENT ISSUES
1.Problem of working capital
 Many Small Scale Industries face the problem of inadequate working
capital. Due to lack of market knowledge their production exceeds
demand, and capital gets locked in unsold stock. They do not have
enough funds to meet operational expenses and run the business.
2.DELAYED PAYMENT
 Small Scale Industries buy raw materials on cash but due to the
intense competition have to sell their products on credit. Buying on
cash and selling on credit itself places a great strain on finances. The
greater problem is payments are delayed, sometimes even by 6
months to one year. It is not only the private sector but even
government departments are equally guilty. Delayed payments
severely impact the survival of many Small Scale Industries.
3.Strain on government finances
 Marketing of products manufactured by Small Scale
Industries is a problem area. The government has to
provide high subsidies to promote sales of products
produced by Khadi and Village Industries. This places a
great strain on government finances.
4. Government interference
 Small Scale Industries have to maintain a number of
records and there are endless government inspections. A
lot of time, money and effort is wasted in complying with
various inspections and records verification. This prevents
Small Scale Industries from fully concentrating on their
business activities.
5. Inadequate Finance
 Many Small Scale Industries face the problem of scarcity of funds. They are not
able to access the domestic capital market to raise resources. They are also not
able to tap foreign markets by issuing ADR’s (American Depository Receipts)
GDR’s (Global Depository Receipts) etc because of their small capital base.
Banks and financial institutions require various procedures and formalities to be
completed. Even after a long delay, the funds allocated are inadequate.
6.Incompetent management
 Many Small Scale Industries are run in an incompetent manner by poorly
qualified entrepreneurs without much skill or experience. Very little thought has
gone into matters such as demand, production level and techniques, financial
availability, plant location, future prospects etc. According to one official study,
the major reason for SSI sickness is deficiency in project Management i.e.,
inexperience of promoters in the basic processes of production, cash flow etc
 PRODUCTION MANAGEMENT ISSUES

1. Poor capacity utilization

In many of the Small Scale Industries, the capacity utilization is
not even 50% of the installed capacity. Nearly half of the
machinery remains idle. Capital is unnecessarily locked up and idle
machinery also occupies space and needs to be serviced resulting
in increased costs.
2. Raw material shortages
Raw materials are not available at the required quantity and
quality. Since demand for raw materials is more than the supply,
the prices of raw materials are quite high which pushes up the
cost. Scarcity of raw materials results in idle capacity, low
production, inability to meet demand and loss of customers.
 3. Lack of technology up-gradation
Many Small Scale Industries still use primitive, outdated
technology leading to poor quality and low productivity. They do
not have adequate funds, skills or resources to engage in research
and development to develop new technologies. Acquiring
technology from other firms is costly. Therefore Small Scale
Industries are left with no choice but to continue with their old
techniques
4. Lack of skilled labour
SSI find difficult to retain qualified staff as they cannot spend a
good deal of money on labour cost or salaries. SSIs are mostly
located in backward regions which also pose a problem of
recruiting qualified professionals
HUMAN RESOURCE MANAGEMENT ISSUE
SME (Small-Medium Enterprise) sector has been playing a
significant role in strengthening country’s economic progress
and international standing.
The sector has been instrumental in generating millions of jobs,
promoting industrial development in rural areas, production of
diverse range of products with the limited capital investment.
According to the estimates of the Ministry of SMEs, the sector
contributes around 40% of the manufacturing output, accounts
for over 8% of the national GDP, and creates more job
opportunities both in rural and urban parts of the country.
Going forward, SMEs will need constant support from
the government to achieve its full potential. At the
same time, SMEs will also need to work on their
internal structure, processes and practices to continue
their journey of growth. Not underscoring their
incredible growth so far, SMEs are still grappling with
some of the inherent challenges related to people and
culture which must be essentially addressed by the HR
leaders.
Enlisting some such
challenges here:
 1) Absence or Lack of HR Department in SMEs

There can be many reasons for the absence or lack of HR departments in

SMEs.
 The first and foremost being budget constraints- SMEs mostly work on a
tight budget and focus more on the growth and scale aspects vis a vis
people and culture-related issues. Having a fully functioning HR
department can be perceived as a costly activity to be carried out for a
small enterprise.
 Secondly, many SME founders feel that their teams are currently too
small for an elaborate HR system and most of the HR activities can be
managed like that.
 However, it is advisable to build an HR system right from the start so that
various people related practices like talent management, engagement,
policies related to compensation and benefits can be laid out.
 2) Managing Talent
Managing talent in SMEs is another big challenge facing HR, mainly for the following reasons
in different categories:
 Recruitment: Recruiting the ‘right’ talent has emerged as one of the top challenges which
HR has to face in their daily operations. Fierce competition, limited pool of qualified
candidates and at times inability to offer a competitive salary are some of the top
recruitment constraints.
 Training and Development: SMEs rely on external vendors is not always feasible mainly
owing to budget constraints. Therefore, they are mostly conducting on-the-job or in-house
training programs which might or might not be that effective. So despite realizing the need
to roll-out specific skill based programs, HR at times, feels constrained to take that up. 
 Performance Appraisals: Since SMEs are mostly focused towards growth and scale, the
process of appraisal somehow gets sidelined. This comes as a big challenge and frustration
for HR managers who are considered as the process owners of such systems yet don’t have
requisite resources and means to roll that out.   
 Retention: In SMEs, retaining employees at the junior level is a challenge. The junior levels
mostly comprise of employees with functional skills such as electricians, or field sales
people. On the other hand, at senior and middle levels, where attrition is relatively low, HR
needs to mainly focus on keeping employees engaged.
 3) Raising the Profile of HR
SME founders often overlook the strategic side of the HR and
mostly view it as another ‘administrative function’ bearing no
direct impact on the business.
In such scenarios, it becomes increasingly challenging for the
HR to propose or initiate any organization-wide change.
 It has become imperative for the HR managers to break this
mould and raise their profile to become more of a strategic
partner who is able to demonstrate the direct worth of HR
initiatives on the business.
In this era of technological disruption, there are plenty of
opportunities available to the HR managers, for an instance,
they can leverage on rich people-related data which the
business can use to observe various trends (ex. tracking
attrition, increasing engagement etc). 
4) Maintaining the spirit of entrepreneurial
culture
 Bursting with aspirations, hopes and immense potential, SMEs in their
initial days usually carry a culture which is fun, energetic, fast-moving and
‘entrepreneurial’ in nature.
 It is mostly comprised of young team members who work very closely
with each other and interact with seniors and founders more frequently.
 However, once the business starts growing and becomes mature, it tends
to lose its original entrepreneurial spirit –teams become big and frequent
interactions with seniors/founders turn into monthly meetings.
 HR can play a significant role here and maintain the culture by keeping
everyone informed, involved and engaged.
 HR can leverage on social platform to communicate about the critical
developments in the organization, share success stories, and even listen
to employees’ grievances.
 5) Aligning Values
Another important challenge which HR managers face in SMEs
is to ensure that the values of the founders are aligned with
that of larger employee group.
Misalignment often happens when people from outside bring
different set of values which stand in direct conflict with that
of founders and both the parties are rigid enough to unlearn
and embrace what is best for the enterprise.
In such challenging situation, HR needs to play a critical role by
creating awareness amongst decision makers about the need
for change.
Two-way and transparent communication between both the
parties can bridge the gap.
 MARKETING MANAGEMENT ISSUE
In today’s competitive market, starting a small business is hard
enough, let alone growing it. Small business owners have to
juggle historical information, current priorities, future
planning, and all of the unexpected interruptions each day
brings.
Finding time to market your business, or merely to figure out
how to market it, is not easy.
Common marketing challenges
business owners face today are:
 1. Funding
 Whether your small business has just been born, or you’re still getting over
the first few years’ hurdles, making enough money to sustain your business
—let alone market it—can be a challenge. Between the endless overhead
that seems to continue piling up, clients stalling and running behind on
payments, and the ever pressuring need to stay relevant in your field,
making consistent money as a small business isn’t easy.
 While you might have trouble with the amount of money coming into your
business, you can always work on managing the amount of money you do
have. You can:
 Get more organized
 Reduce the amount of money you spend on marketing
 Perform low-cost marketing activities
 Stretch every penny you do spend on marketing
 2. Standing Out
 There are so many options available to consumers today, as well
as resources for researching and comparing businesses side by
side.
 With so much noise and competition, business owners are
constantly challenged with creating a name for themselves.
 To get your business to become the choice of your target
audience, try these approaches:
 Develop your reputation to stand out to customers
 Distinguish your business from competitors
 3. Finding Customers
 You may think that targeting a broad group of people would
make it easier to find customers, but this is not the case. The
more people you try to appeal to, the more diluted your content
and your value proposition become. Customers are out there, it’s
just a matter of taking the righta pproach to find them.
 To help overcome the challenge of finding customers, start here:
 Identify your target audience
 Use multiple channels to build your audience
 Look into any industry-specific tactics for finding customers
 4. Getting Found By Customers
While it’s up to you to identify your target audience and
find customers, it’s not entirely up to you to proactively
reach out to every customer.
Getting found by customers is a challenge many business
owners face.
With so many people using online channels to find what
they are looking for today, it’s crucial to make sure your
business is discoverable to people searching for it.
 Get on the first page of Google
 Get listed in directories
 Make your business attractive
 5. Retaining Valuable Customers
Part of the benefit of finding the right customers is that
they will stick with you long after the first purchase.
However, this doesn’t mean that once you’ve found the
right customer you can just kick back and watch them
return. Keep in mind also that there are new businesses
and apps popping up every day, which have the potential
to take away even your most loyal customers in a
heartbeat. So how do you keep your best customers?
  Come up with a customer retention plan
 Stay in touch with customers
 6. Expansion
Business growth is the goal, but scaling with that growth
means keeping up with the increase of tasks to complete,
relationships to manage, and expenses to track.
Expansion is both an indicator and result of business
growth, but knowing when and how to do it is a
challenge.
When faced with expansion challenges, be sure to:
 Carefully consider all of the factors involved
 Identify the best way for your business to expand
 7. Your To-Do List
We all have more to do than time to do it, but for business
owners especially, it can be really hard to release yourself
from the tangle of personal and business-related
responsibilities, current and future priorities.
The very things that have made you successful can turn
into the those which paralyze you with stress and
overwhelm.
To tackle this challenge, take these steps:
 Work on your time management
 Use free tools for time-consuming creative tasks
 Automate as much as you can
 8. Burnout
You’re only human, and running a small business is a surefire
way to burn yourself out.
The biggest challenge that comes with burnout is not so much
the exhaustion, but the inability to detect burnout due to that
exhaustion. Continuing on when your performance is declining
is counterproductive for both you and your business.
One of the best things you can do for yourself is to put habits
into place to prevent burnout, and to have a set of remedies in
place to help you when you do reach that point.
Arm yourself for burnout by:
 Learning to detect and manage stressors
 Draw from social sources of motivation
 Create a healthy work environment
 WHAT IS EXPORT MARKETING

• Export marketing means exporting goods to other countries

of the world. It involves lengthy procedures and formalities.
• In export marketing, goods are sent abroad as per the
procedures framed by the exporting country as well as by
the importing country.
• Export marketing is more complicated to domestic
marketing due to international restrictions, global
competition, lengthy procedures and formalities and so on.
Moreover, when a business crosses the borders of a nation,
it becomes infinitely more complex.
FEATURES OF EXPORT MARKETING
 Systematic Process –
Export marketing is a systematic process of developing and distributing
goods and services in overseas markets. The export marketing manager
needs to undertake various marketing activities, such as marketing
research, product design, branding, packaging, pricing, promotion etc. To
undertake the various marketing activities, the export marketing
manager should collect the right information from the right source;
analyze it properly and then take systematic export marketing decisions.
 Three – faced competition –
In export markets, exporters have to face three-faced competition, i.e.,
competition from the three angles – from the other suppliers of the
exporter’s country, from the local producers of importing country and
from the exporters of competing nations.
 Large Scale Operations –
Normally, export marketing is undertaken on a large scale. Emphasis is
placed on large orders in order to obtain economies in large scale
production and distribution of goods. The economies of large scale
help the exporter to quote competitive prices in the overseas markets.
Exporting goods in small quantities is costly due to heavy transport
cost and other formalities.
 Dominance of Multinational Corporations –
Export marketing is dominated by MNCs, from USA, Europe and Japan.
They are in a position to develop world wide contacts through their
network and conduct business operations efficiently and economically.
They produce quality goods at low cost and also on massive scale.
 Customer Focus –
The focus of export marketing is on the customer. The exporter needs
to identify customers‟ needs and wants and accordingly design and
develop products to generate and enhance customer satisfaction. The
focus on customer will not only bring in higher sales in the overseas
markets, but it will also improve and enhance goodwill of the firm.
 Trade barriers –
Export marketing is not free like internal marketing. There are various
trade barriers because of the protective policies of different
countries. Tariff and non-tariff barriers are used by countries for
restricting import. The export marketing manager must have a good
knowledge of trade barriers imposed by importing countries.
Documentation –
Export marketing is subject to various documentation
formalities. Exporters require various documents to submit
them to 4 various authorities such as customs, port trust etc.
The documents include – Shipping Bill, Consular Invoice,
Certificate of Origin etc
Foreign exchange regulations –
Export trade is subject to foreign exchange regulations imposed
by different countries. These regulations relate to payments
and collection of export proceeds. Such restrictions affect free
movement of goods among the countries of the world.
 Marketing Mix –
Mix Export marketing requires the right marketing mix for the target
markets, i.e. exporting the right product, at the right price, at the right
place and with the right promotion. The exporter can adopt different
marketing – mixes for different export markets, so as to maximize
exports and earn higher returns.
 International marketing Research –
Export marketing requires the support of marketing research in the
form of market survey, product survey, product research and
development as it is highly competitive. Various challenges,
identification of needs and wants of foreign buyer in export marketing
can be dealt with through international marketing research.
Spreading of Risks –
Export marketing helps to spread risks of business.
Normally export firms sell in a number of overseas markets.
If they are affected by risks (losses) in one market, they may
be able to spread business risks due to good return from
some other markets.

Reputation –
Export marketing brings name and goodwill to the export
firm. Also, the country of its origin the gets reputation. The
reputation enables the export firm to command good sales
in the domestic market as well as export market.
 Importance of Export Marketing at
the National Level
 Earning foreign exchange-Exports bring valuable foreign
exchange to the exporting country, which is mainly
required to pay for import of capital goods, 5 raw
materials, spares and components as well as importing
advance technical knowledge.
 International Relations – Almost all countries of the
world want to prosper in a peaceful environment. One
way to maintain political and cultural ties with other
countries is through international trade.
 Balance of payment – Large scale exports solve balance
of payments problem and enable countries to have
favorable balance of payment position. The deficit in the
balance of trade and balance of payments can be
removed through large-scale exports.
Reputation in the world – A country which is foremost
in the field of exports, commands a lot of respect,
goodwill and reputation from other countries. For
example, Japan commands international reputation due
to its high quality products in the export markets.
Employment Opportunities – Export trade calls for more
production. More production opens the doors for more
employment. Opportunities, not only in export sector
but also in allied sector like banking, insurance etc.
Promoting economic development – Exports are
needed for promoting economic and industrial
development. The business grows rapidly if it has
access to international markets. Large-sole exports
bring rapid economic development of a nation.
Optimum Utilization of Resources – There can be
optimum use of resources. For example, the supply of
oil and petroleum products in Gulf countries is in excess
of home demand. So the excess production is exported,
thereby making optimum use of available resources.
 IMPORTANCE OF EXPORT
MARKETING AT FIRM LEVEL

 Reputation – An organization which undertakes exports

can bring fame to its name not only in the export
markets, but also in the home market. For example,
firms like Phillips, HLL, Glaxo, Sony, coca cola, Pepsi,
enjoy international reputation.
 Optimum Production – A company can export its excess
production after meeting domestic demand. Thus, the
production can be carried on up to the optimum
production capacity. This will result in economies of
large scale production.
 Spreading of Risk – A firm engaged in domestic as well as export
marketing can spread its marketing risk in two parts. The loss is one
part (i.e. in one area of marketing) can be compensated by the
profit earned in the other part / area.
 Export obligation – Some export organization are given certain
concessions and facilities only when they accept certain export
obligations Large scale exports are needed to honor such export
obligations in India, units operating in the SEZs / FTZs are expected
to honor such export obligations against special concessions offered
to them.
 Improvement in organizational efficiency Research-training and
the experience in dealing with foreign markets, enable the
exporters to improve the overall organizational efficiency.
Improvement in product standards- An export firm has
to maintain and improve standards in quality in order to
meet international standards. As a result, the
consumers in the home market as well as in the
international market can enjoy better quality of goods.
Liberal Imports -Organizations exporting on a large-
scale collect more foreign exchange which can be
utilized for liberal import of new technology, machinery
and components. This raises the competitive capacity
of export organizations.
Financial and non-Financial benefits - In India, exporters
can avail of a number of facilities from the government.
For example, exporters can get DBK, tax exemption 7 etc.
They also can get assistance from export promotion
organizations such as EPCs IIP, etc.
 Higher profits – Exports enable a business enterprise to
earn higher prices for goods. If the exporters offer quality
products, they can charge higher prices than those
charged in the home market and thereby raise the profit
margin.
 MOTIVATIONS FOR EXPORT
MARKETING
• Rate of profits
• Inadequate domestic demand
• Economic growth
• Sales and production stability
• Reducing risks
• Information and media revolution
• Strategic vision
• Government policies
• Benefits of bulk selling
PROBLEMS FACED BY EXPORTERS
 Recession in world market- The world market, faced recession
in 2008 and in the first half of 2009. The recession was triggered
due to sub-prime crisis of USA in September 2007. Due to
recession, the demand for several Indian items such as Gems
and Jewellery, Textiles and Clothing and other items were badly
hit. During recession, exporters get low orders from overseas
markets, and they have to quote lower prices. Therefore,
exporter gets law profits or suffers from losses.
 Technological differences -The developed countries are
equipped with sophisticated technologies capable of
transforming raw materials into finished goods on a large scale.
Less developed countries, on the other hand, lack technical
knowledge and latest equipments. And therefore they have to
use their old and outdated technologies. It leads to the lopsided
development in the international market.
 Reduction in export Incentives – Over the years, the Govt. of
India has reduced export incentives such as reduction in DBK
rates, withdrawal of income tax benefits for majority of
exporters, etc. The reduction in export incentives demotivates
exporters to export in the overseas markets.
 Several competitions in global marketing – Export marketing is
highly competitive. This competition relates to price, quality,
production cost and sales promotion techniques used. Indian
exporters face three-faced competition while exporting. This
includes competition from domestic exporters, local producers
where the goods are being exported and finally from producers
of competing countries at global level. Such competition is one
special problem to the exporters.
Problem of product standards – Developed countries insist on
high product standards from developing countries like India. The
products from developing countries like India are subject to
product tests in the importing countries. At times, the importing
countries do not allow imports of certain items like fruits, textiles
and other items on the grounds of excessive toxic content.
Therefore Indian exporters lose markets especially in developed
countries.
Fluctuations in Exchange Rate – Every country has its own
currency which is different from international currencies. The
dominant international currencies are US dollar or Sterling
Pound. From the point of view of Indian exporters we are
interested to realize the payment in international currency.
Foreign exchange earned by the operators is converted into
Indian rupees and paid to the exporters in Indian currency; this
exposes the exporters to the dangers of fluctuation in foreign
exchange rates.
Problems of Sea Pirates Attacks – A major risk faced
by international trade is attack by pirates in the Gulf of
Aden. More than half of India‟s merchandise trade passes
through the piracy infested Gulf of Aden. New exporters and
importers are facing problem, because of increased pirate
attacks as they find it difficult to get insurance cover.
Government restrictions and foreign exchange
regulations – The Government restrictions compel the
exporters to follow certain rules and regulations in the form
of licenses, quotas, and customs formalities. Due to such
restrictions, new problems develop before the exporters.
Even trade restrictions in foreign countries create problems
before exporters. Indian exporters face this difficulty of
government restrictions and foreign exchange regulations
even when trade policy is now made substantially liberal.
 Problem of subsidies by Developed countries – The
developed countries like USA provide huge subsidies to their
exporters. For example, in case of agriculture exporters,
USA, UK and other provide huge subsidies to their exporters.
Therefore, the exporters of developing countries like India
find it difficult to face competition in the world markets.
Problem in preparing Documents – Export involves a large
number of documents. The exporter will have to arrange
export documents required in his country and also all the
documents as mentioned in the documentary letter of
credit. In India, there are as many as 25 documents (16
commercial and a regulatory documents) to be filled in.
 High risk and Uncertainties – Export marketing is subject to
high risks and uncertainties. The risks may be both political
and commercial. Political risks involve government
instability, war, civil disturbances, etc. The commercial risks
involve insolvency of the buyer, protracted default on the
part of the buyer dispute on quality and so on.
 Competition from China- India is facing stiff competition
from China in the world markets, especially in the OECD
markets. As a result, India’s share of export of OECD markets
has declined from 53% of total exports in 2000-01 to about
38% in 2007-08. Some of the Indian exporters have lost
their overseas contracts due to cheap Chinese goods and
supplies. This is the major problem of exporters.
FACTORS AFFECTING PROMOTION
MIX
Funds availability
Promotion costs
Degree of competition
Mode of entry
Type of product and market type
Non monetary resources
Market type and size
Media availability
DIFFERENCES IN DOMESTIC AND
EXPORT MARKETING
 Domestic / Home Export / International
marketing marketing
• Meaning – Domestic marketing  It involves buying and selling
is restricted to political activities at the global level.
boundaries of a country. It  International marketing is
involves buying and selling difficult and complicated due to
activities within one country only reasons such as use of different
International marketing covers all currencies, trade restrictions
countries for marketing purpose long distances and absence of
• Nature – Domestic marketing is uniform trade practices.
easy and simple due to several  Trading blocs and tariff and
reasons such as uniform currency nontariff barriers exist in
system, limited trade restrictions, international marketing and they
uniform trade practices and short restrict free trade among the
distances for transport of goods. countries of the world.
• Trading Blocs – Absence of
trading blocs and tariff and non-
tariff barriers provide ample
scope for expansion in domestic
marketing activities.
•  It involves licensing, permissions and
Licensing and procedures- It is free
from licensing and lengthy procedures lengthy procedures. This makes
and formalities. This brings simple in marketing operations complicated,
trading operations. time-consuming and difficult.
• Environmental changes- Changes in the  Changes in the economic, political or
economic, political or social social environment create far-reaching
environment create limited effects on effects on international marketing
domestic marketing scenario
• Risk in trade- The risk involves is
 The risk involves is heavy due to vast
limited due to limited area of
area of operations, highly sensitive
operations, political stability and
uniform rules and laws nature of markets and political factors.
• Competition – It is not highly
 It is highly competitive as different
competitive. The scope for competition countries involved are in different
is restricted due to uniform business stages of economic and industrial
environment growth.
 Government Interference –  Maximum interference is
Least interference in the observed in international
domestic marketing activities. marketing activities.
 Division – It has no division as it  It has two broad divisions.
is one integrated marketing Foreign marketing and
activity. multinational marketing.
 Quantities involved – Domestic  International marketing activities
marketing activities are are always in large quantities
conducted in small quantities and profit potentials are also
with limited profit potentials. more.
 Incentives- In home marketing,  In export marketing, special
special concessions, facilities and incentives, facilities and
incentives are normally not concessions are offered to
offered to traders and manufacturers of export
manufacturers. oriented goods and exporters.
Agencies Involved – Agencies in export
Agencies involved in home marketing include
marketing include manufacturer exporters,
wholesalers, retailers and merchant exporters, export
other trading organizations. houses and trading houses.
Payment in international
Method of payment – In marketing is through letter
domestic marketing of credit and documentary
payment is through cash or bills of exchange.
cheque.
 CASE STUDY

Nova Fashion Garments Pvt.

Ltd.
 BRIEF HISTORY

Nova Fashion Garments was a well known

manufacturer of ready made garments in India.
Established in 1970, the company manufactured
a wide line of products including shirts, trousers,
jackets etc.
Mr. Jain, the owner of the company was of the
opinion that the market potential for ready
made garments in India is quite substantial.
 THE BIG ISSUE

The company faced several problems in

increasing its market share.
Firstly because of the high taxes, the price of the
garments needed to be kept high.
Secondly, the company also faced problems on
account of fashion changes.
Added to the above was the intensified
competition in the market.
 SOLVING

Before he could call the meeting of the executives to

discuss the matter, he thought it would be better to
collect strategy examples on the basis of the experience
of other successful companies both in India and
abroad. For this purpose, he took the help of a young
management trainee who went through several
marketing books and took examples of the following.
 EXAMPLES
 Rolls Roycee: Among automakers Rolls Royce not only has the most
distinctive automobiles but also the most unusual product offering.
They make very few cars but amazng ones.
 Nirma: Taking advantage of its low cost, Nirma adopted a market
penetration strategy according to which the price of its washing
powder was approximately 40% lower than the highest price product
in the market.
 Rasna: It is reported that Rasna manufactured by Pioma Industries
commands over 80% of 15 crores soft drinks concentrate market.
The success has been attributed to its very effective advertising
campaign and distribution system.
 Santro- 50,000 santros were sold within 350 days of launch. This was
because they redefined product stratergy in the small car segment,
in addition to its personality campaign
Motivated by the above examples, Nova Fashion
Garments Pvt. Ltd. Changed their marketing
strategy , increased advertising budgets and
pulled up their sock to once again fight for their
position.
THANK YOU

EFFORTS BY:
ANJALI
BHUMIKA
LATIKA
LOVISHA