Handicraft Industry : Modern marketing methods
- 1. Application Of Contemporary Marketing Techniques: Handicraft Industry A Dissertation Presented to The Faculty of the Department of Commerce, Delhi School of Economics, University of Delhi In Partial Fulfillment Of the Requirements for the Degree of Master of International Business (MIB) Submitted by: Akshat Srivastava Roll Number 8 MIB 2011-2013 1
- 2. Table of Contents Undertaking 3 Certificate 4 Acknowledgement 5 Executive Summary 6 Chapter I Introduction to Indian Handicraft Industry 7 Common types of handicrafts 12 Designing in handicrafts 14 Craft Concentration Areas 15 SWOT Analysis 16 Institutions Involved In Promotion Of Handicrafts 18 Major Distribution Channels Of Indian Handicrafts 25 Indian Handicrafts Industry: Opportunities and Challenges 29 Chapter II Introduction to some contemporary marketing trends 32 Social Media & SM Based Marketing 33 Literature review in general 35 Research methodology: Scope & Design 37 Study: Application-based Cases in Social Media and E-Marketing 38 Scope of such applications in the handicraft industry 44 Chapter III Recommendations, Conclusions & Insights 49 References 56 Bibliography 58 2
- 3. Undertaking I hereby give a formal undertaking, in writing that the report I have prepared here, is in pursuance of an academic study. It is solely for academic purpose, for partial fulfillment purposes of the degree of Master of International Business, under Paper 547: Project Report. I also undertake to certify, to the best of my knowledge, the genuineness of the sources mentioned in the report design. The statements made and conclusions drawn are an outcome of the project work. (Signature of the Candidate) Akshat Srivastava (Signature of the Mentor) Ms. Seep Sethi 3
- 4. Certificate This is to certify that Mr. Akshat Srivastava, Roll No. 8, MIB 2011-2013 has completed the dissertation titled “Application of Contemporary Marketing Techniques: Handicraft Industry”, Paper: 547, under my supervision in partial fulfillment of the Master Of International Business (MIB) degree of Department of Commerce, Delhi School of Economics, University of Delhi. (Signature of the mentor) Ms. Seep Sethi 4
- 5. Acknowledgement I am grateful with a deep sense of gratitude to all those who have helped me to complete the project. I express gratitude to my mentor, Ms. Seep Sethi for her valuable insights and recommendations regarding the formulation, arrangement and documentation of this report. I also express sincere thanks to Dr. J. P. Sharma, HoD, Department of Commerce & Dr. Kavita Sharma, Course Coordinator, MIB, for sparing their valuable time and for most inspiring cooperation towards the realization of the project, which could have not been a success without their able guidance. I also take this opportunity to thank the marketing faculties at my Institute, who trained me to not only understand the business environment better but also adapt to the demanding needs of the business community. I also especially thank my colleagues & friends for their valuable suggestions, comments and criticism. They have been patient, responsive & welcoming enough to provide me with all the required help that has enabled me to make this project a success. (Signature of the Candidate) Akshat Srivastava 5
- 6. Executive Summary India is one of the important suppliers of handicrafts to the world market. The Indian handicrafts industry is highly labour intensive and is a cottage based industry. It is largely decentralized, being spread all over the country in rural and urban areas. Artisans not only work on full time, but there are numerous artisans who are engaged in crafts work on part-time basis. This industry provides employment to over seven million artisans who include a large number of women and people belonging to the weaker sections of the society. Increased globalization is causing the products to be more commoditized, because of which, artisans are facing stiff competition from other artisans from all over the world. Implementing modern marketing techniques and related applications in the handicrafts sector would go a long way in solving the communication problems of the artisans. It will also give Indian artisans an edge over those of other developing nations by developing an efficient communication channel. The report aims at providing an overview of the Indian handicraft industry, the markets and nuances behind the process of the products reaching the end consumer, and an insight into the possibilities of applications of more contemporary marketing techniques such as social marketing, mobile technology, etc. 6
- 7. Chapter I: Introduction to Indian Handicraft Industry Handicrafts are unique expressions representing a particular culture or community through artisans and materials. Handicrafts are part of a much larger home accessory market, which includes handcrafted, semi handcrafted, and machine- made goods. According to buyers, handicrafts are significant to the country in which they are produced due to culture, tradition, and skill and local materials used. Other definitions include - “Handicrafts are mostly defined as "Items made by hand, often with the use of simple tools, and are generally artistic and/or traditional in nature. They are also objects of utility and objects of decoration” Though handicrafts industry constitutes a very small portion of India‟s exports, it still plays a major role in contributing to India‟s economy and is a major form of employment for a considerable portion of India‟s population. This sector constitutes the largest decentralized and unorganized sector in India, only after agriculture. 7
- 8. India is one of the important countries supplying handicrafts to the world market. The Indian handicrafts industry is characterized by being highly labour intensive cottage based, and decentralized, being spread all over the country in rural and urban areas. Artisans not only work on full time basis, but numerous artisans are engaged in crafts work on part-time basis as well. The industry provides employment to over six million artisans, of which include a large number of women and people belonging to the weaker sections of the society. In addition to the high potential for employment, the sector is economically important from the point of low capital investment, high ratio of value addition, and high potential for export and foreign exchange earnings for the country. In year 2011-12, the export earnings from Indian handicrafts industry amounted to 12975.25 Crores, where USA contributed to the highest share of imports at 26.20%. 8
- 9. In recent years, as the demand for Indian handicrafts ha s risen considerably in the past few years, the status of this sector has also upgraded. 9
- 10. The handicraft sector assumes significance due to various reasons such as low capital investment, high ratio of value addition, robust potential for export and also foreign exchange earnings. Handicrafts are mostly defined as "Items made by hand, often with the use of simple tools, and are generally artistic and/or traditional in nature. They can also be termed as objects of utility and objects of decoration.” Handicrafts can be broadly classified in three categories: Consumer goods: Consumer goods are the goods that artisans prepare either for self consumption or for exchange. Examples include baskets for keeping domestic articles, hunting arrows, combs, smoking pipes, footwear, storing, wooden and stone plates, textile items like shawls, coats, jackets, etc Processing industries: The include handicrafts for self consumption and for exchange at weekly haat on barter age system. These goods are also sold for money to purchase other items for self consumption. For example minor forest products Decorative items: These handicrafts are made for commercial purposes. These include items used for decoration and are most popular. These include jewels, 10
- 11. ornaments, earrings, ankle bells, necklaces, head gears, head dresses, etc. In addition there are other decorative items such as wall paintings, deities either wood or stone, artifacts, etc. The craftsmen use different media to express their originality. The diversity of the handicrafts is expressed on textiles, metals – precious and semi-precious, wood, precious and semi- precious stones, ceramic and glass. 11
- 12. Common types of handicrafts: Textile based handicrafts: Popular textile handicrafts of India include hand printed textiles including block and screen printing, batik, kalamkari (hand printing by pen) and bandhani (tie and die). These prints are used in products ranging from bed- covers to sheets, dress material to upholstery and tapestry. The famous embroidered articles of silk and cotton, often embellished with mirrors, shells, beads, and metallic pieces are also found in India. Embroidery is done too on leather, felt and velvet etc. This segment of the industry accounts for almost half a million strong employment in addition to a large number of designers, block makers, weavers and packers involved in the trade. Clay, Metal and Jewelry: Brass, copper, bronze, bell metals are used for a variety of wares and in a variety of finishes. Metal craft contains diverse range of objects such as metal jewelry, metal utensils, silver ware, brassware, metal statues. Scintillating ornaments are available in a wide range of patterns, styles and compositions. 12
- 13. Made from precious metals, base metals, precious and semi-precious stones; these ornaments have traditional as well as modern styles. Woodwork: Woodcraft covers broad range of techniques such as woodcarving, woodworking, wood burning etc. Woodcraft refers to the skill in carving or fashioning objects from wood. Wooden articles in India range from the ornately carved to the absolutely simple. One can find toys, furniture, decorative articles, etc, bearing the art and individuality of the craftsman. India is known particularly for its lacquered wood articles. Stone Craft: It is an art or skill of manufacturing objects by combining together pieces of rough natural stones. The intricately carved stoneware made of marble, alabaster or soapstone, etc., inlaid with semiprecious stones carry on the heritage of Indian stone crafts. 13
- 14. Glass and Ceramic: Glass and ceramic products are a fast upcoming segment in the handicrafts from India. Ceramics is an art of making different kind of objects such as earthenware, porcelain, tiles, cookware, dinnerware etc with the help of fired clay. Glass crafts include includes assorted range of crafts such as glass- blowing, glass bead making, stained glass paintings, hand painted glassware, glass pearls etc. The age-old production process of mouth-blowing the glass instills a nostalgic feeling. The varied shapes of ceramic and glass in a number of colors, would appeal to Western aesthetics while retaining the Indian touch. Designing in handicrafts Designing is a very vast subject and has different meanings for item to item, source to source and product for academic and practical purposes separately. The designing can be categorized in five types viz.: Natural design, Decorative & Stylish Design, Structural Design, Geometrical Design, Abstract Design; In Natural design the ideas and motives are taken from nature flora and fauna. Natural design is generally used in children room to acquaint them with nature and surrounding. These designs should not be tinkered to preserve the esthetic beauty and essence of the design. The source of decorative and stylish designs is also nature and its elements, which are produced with simplification and imagination and are meant for general customers. In structural design the structure is the main theme of the design. 14
- 15. In geometrical design the motive are incorporated from the geometrical patterns. In abstract design the theme is hidden in the design itself and the creator is the only person to express its theme, meaning and beauty. Craft Concentration Areas: A wide range of handicrafts are produced all over Indian art metal ware/EPNS ware, wood carvings and other wooden art wares, imitation jewellery, hand printed textiles, shawls as art wares, embroidered goods, lace and lace goods, toys, dolls, crafts made of leather, lacquer ware, marble crafts etc. Although it is difficult to limit a specific place for the particular craft, the following places are listed for their particular crafts. Handicraft clusters: India houses about 7200 clusters in the traditional handloom, handicrafts and modern small and medium enterprise (SME) industry sectors. Reports suggest that out of these clusters, 2500 estimated are unmapped rural industry clusters. 15
- 16. SWOT Analysis Although exports of handicrafts appear to be sizeable, India‟s share in world imports is miniscule. It is a sector that is still not completely explored from the point of view of hidden potential areas. India, a country with 26 states and 18 languages and more than 1500 dialects offers an enormous range of handicrafts from each of the states. 16
- 17. Major centres in Uttar Pradesh are Moradabad also known as the "Peetalnagari" (City of Brass), Saharanpur for its wooden articles, and Ferozabad for Glass. The North Western state of Rajasthan has to offer the famous Jaipuri quilts, Bagru and Sanganer printed textiles and wooden and wrought iron furniture from Jodhpur. The coastal state of Gujarat comes with embroidered articles from Kutch. Narsapur in Andhra Pradesh is famous for its Lace and Lace goods. But this is only a small part of the total product range. India offers much more. 17
- 18. Institutions Involved In Promotion Of Handicrafts: In order to provide and protect the artisans‟ skills inherited govt. both at the centre and states have set up Handicrafts emporium at important cities and at district level. These artisans are also encouraged by various government institutions to participate in national and International exhibition to show their skills. Development Commissioner (Handicrafts) The Office of the Development Commissioner (Handicrafts) is an attached office of Ministry of Textiles, Government of India. It is a central nodal office to work for Socio-economic upliftment of the artisans and Supplement the efforts of the State Governments for promotion and development of handicrafts within the country and abroad. It has 6 Regional Offices at New Delhi, Kolkata, Lucknow, Chennai, Mumbai and Guwahati, and 5 Regional Design & Technical Development Centres at New Delhi, Mumbai, Kolkata, Banglore and Guwahati. There are 52 Handicrafts marketing and Service Extension Centers In addition to above, there are Field Administrative Cells The various Institutions (like Indian Institute of Carpet Technology, Bhadohi (UP), National Center for Design Product Development (Society), New Delhi and Moradabad, Metal Handicrafts Service Center (Society), Moradabad) are also working for the Development of Handicrafts in association with this office. Tribal Cooperative Marketing Development Federation (TRIFED) For the socio and economic welfare of tribal population Government of India established an independent corporation called TRIFED. Until recently TRIF ED activities were confined to purchase of forest products and sell them at their retail counters. Since 1999 TRIFED expanded their activities by encouraging tribal artisans in the production of arts and crafts which they have inherited 18
- 19. from their forefathers. TRIBES shop are set up to show case tribal arts and crafts by procuring the crafts from tribal artisans at remunerative prices and sell the same at these shop and organizing periodic exhibitions at different places all over India and abroad. The ultimate objective of TRIFED is socio-economic development of tribal people in the country by way of marketing development of the tribal products on which the lives of tribals depends heavily as they spend most of their time and derive major portion of their income from collection/ cultivation of Non timber Forest Produce (NTFP). As a cooperative, TRIFED‟s primary objective is to serve the interest of its members therefore in order to serve their interest in the field of marketing development of tribal products, some of the services which TRIFED offers are: To facilitate, coordinate and promote the marketing of the tribal products by its members; To undertake/promote on behalf of its members/institutions or the Govt. or Govt. organizations, inter-State, intra-State and international marketing of tribal products; To act as an agency for canalization of export and import and facilitate, wherever necessary, inter-State trade of tribal products under any Scheme formulated by Govt. of India or any other State agencies. To develop market intelligence related to supply, demand, price trends, supply/market chain, value addition and processing facilities, product quality specifications, product applications, market trends, buyers for the tribal products and disseminate the information to the members as well as planners, researchers and associate organizations and business circles etc.; To assist in capability & capacity building of the members relating to the marketing development of the tribal products; To provide consultancy and advisory services to the members relating to the activities in furtherance of their objectives; To act as advisors, consultants and project managers to Govt. projects relating to marketing development of Tribal products in the form of capacity building, infrastructure development, special programs To expand and extend the markets for Tribal Products through marketing development and promotion programs; 19
- 20. To assist in the development of new products through product development, product innovation, product designs, new product applications and special R&D drives for tribal products; To collaborate, network, associate with similar and allied international bodies in Fair Trade, Tribal product marketing development, Tribal Research, Tribal Funding Agencies to further the interests of Tribal Product marketing; To collaborate, network, associate with similar and allied international bodies/agencies, societies (NGOs, Co-operatives, Foundations, and Trusts, organizations (Private and Government), institutions to further the development of Tribal Products marketing States Handicrafts and Handlooms Development Corporation Ltd Various states Handicrafts and Handlooms Development Corporation, a Government of India undertaking has endeavored to carry forward rich heritage of all the respective states by reaching out the products developed by the artisan residing in these states and abroad through its network of emporia and a large number of exhibitions, expositions and crafts fairs. National Centre for Design and Product Development, New Delhi National Centre for Product Design & Development (NCDP D), nonprofit organization, set up by Export Promotion Council for Handicrafts (EPCH) and the office of the Development Commissioner (Handicrafts). NCDPD has been involved in inviting prominent designers from oversees and working in coordination with leading design institutes and helping the Indian artisans especially tribal, to hone their skills. NCDPD aims to provide cutting edge assistance to the Indian handicrafts industry through international standard design and technical inputs. 20
- 21. Rural Non Farm Development Agency (RUDA) Rural Non Farm Development Agency (RUDA) established in November 1995, by the Government of Rajasthan as an independent agency to promote the rural non-farm sector (RNFS) in the state. RUDA follows a sub-sectoral, integrated and cluster based approach for promoting rural micro enterprises as viable avenues of sustainable employment. Effective use and abundant availability of local resources prompted the initial choice of three sub sectors, viz. Wool, Leather and Minor Minerals. The interventions, based on market demands, aim at filling in the missing links in the value addition chain by Organizing the artisans; Skill Augmentation; Technological Development & Dissemination and Credit and Market Facilitation To achieve these objectives, RUDA has collaborated with RNFS promotional NGOs; Technical and Research Institutes; Design Institutes / Consultants; Private Entrepreneurs including exporters and Domestic and International promotional trade agencies RUDA's pragmatic approach towards micro enterprise development has been recognized by organizations like UNDP, UNFPA, UNIDO, World Bank, KVIC, Department of R.D., etc. who have availed the expertise o f RUDA for strategy formulation and implementation. Export Promotion Council for Handicrafts, Delhi Export Promotion Council for Handicrafts (EPCH) has been established under the Exim-Policy of Govt. of India in 1986-87 and is a non-profit earning organization. EPCH is an apex organization of trade, industry and government sponsored by Ministry of Textile, government of India for promotion of handicraft from country and projected India's image abroad as a reliable supplier of high quality of handicraft goods & services and ensured various measures keeping in view of observance of international standards and specifications 21
- 22. Council of Handicrafts Development Corporation, Delhi Council of Handicrafts Development Corporation (COHAN DS) represents 28 state government corporations of India and functions under the aegis of the office of Development Commissioner (Handicrafts), Ministry of Textile. COHANDS acts as facilitator for undertaking the integrated design and technical development workshops, interior design and participating in domestic and international fairs, cultural programmes, organising seminars and symposiums. Khadi and Village Industry (KVIC) KVIC works under the administrative control of the Ministry of Industry, Government O f India under the department of S mall-Scale Industries and Agro and Rural Industries. KVIC has a 10 member commission at the policy making level. The Commission consists of six zonal members (one of whom is Chairman), two expert members and two official members (the Chief Executive officer and the Financial Advisor to the Commission). The Chairman, CEO and F A are full time members. The headquarters of KVIC is in Bombay and it has its State and Regional Offices in all the States. It has training, production and Sales centers throughout the country. KVIC is having 30 State khadi and village industries board, over 3500 institutions and over 29000 cooperative societies. There are around 14200 sales outlets in t he country in KVI Sector. It is having 46% women participation in its activities. 30% beneficiaries belong to SC/S T. KVI Boards assist over 5 lakh artisans. It has reached 2.35 lakhs villages. Some of the major functions of KVIC are the planning, promotion, organisation and implementation of programs for the development of Khadi and other village industries in the rural areas in coordination with other agencies engaged in rural development wherever necessary. Its functions also comprise building up of a reserve of raw materials and implements for supply to producers, creation of common service facilities for processing of raw materials as semi- finished goods and provisions of facilities for marketing of KVI products apart from organization of training of artisans engaged in these industries and encouragement of co- operative efforts amongst them. To promote the sale and marketing of khadi and/or products of 22
- 23. village industries or handicrafts, the KVIC may forge linkages with established marketing agencies wherever feasible and necessary. The KVIC is also charged with the responsibility of encouraging and promoting research in the production techniques and equipment employed in the K hadi and Village Industries sector and providing facilities for the study of the problems relating to it, including the use of non- conventional energy and electric power with a view to increasing productivity, eliminating drudgery and otherwise enhancing their competitive capacity and arranging for dissemination of salient results obtained from such research. Further, the KVIC is entrusted with the task of providing financial assistance to institutions and individuals for development and operation of Khadi and village industries and guiding them through supply of designs, prototypes and other technical information. In implementing KVI activities, the KVIC may take such steps as to ensure genuineness of the products and to set standards of quality and ensure that the products of Khadi and village industries do conform to the standards. The KVIC may also undertake directly or through ot her agencies studies concerning the problems of Khadi and/or village industries besides research or establishing pilot projects for the development of Khadi and village industries. The KVIC is authorized to establish and maintain separate organisations for the purpose of carrying out any or all of the above matters besides carrying out any other matters incidental to its activities. Non Government Organizations Various non- government organizations organize capacity building cum training programme at their respective clusters in their states. During the field visits, it has been observed that non government organisations are getting support from Development Commissioner (Handicrafts), NEDFI and variuos other government departments for promotion of tribal handicraft. 23
- 24. HHEC India Ltd. The Handicrafts and Handlooms exports corporation of India was established as Indian Handicrafts Development Corporation Ltd (IHDC) in 1958. It was incorporated as a Private Ltd. Co. in June 1962 as a subsidiary of STC, then de-linked from STC in May 1991 and made an independent PSU under the Ministry of Textiles as a Schedule 'C' Company. It was upgraded to Schedule 'B' Company from Schedule 'C' Company in December, 2001. HHEC generates tremendous demand, response and confidence of foreign buyers through exhibitions that will provide a synergetic platform to various production houses to showcase their masterpieces and is regularly participating in the International Fairs & Buyer-Seller Meets to provide guidance to these master-craftsmen for development of demand centric products. It also provides technical guidance to craftsmen enabling them to understand the finer details of Quality production, tools and technological infrastructure which helps them in designing and processing of their products In addition to the participation in international trade fairs, buyer-seller meets, HHEC also organizes stand alone exhibitions such as Studded Gold Jewellery Exhibition and handicraft shows worldwide. The focus of the corporation is towards maintaining a harmonious blending of its developmental role with commercial activities. As in the past, the corporation continues to play a vital role in the promotion of Indian handmade textiles and crafts including textiles based crafts like fashion accessories, home furnishings and decorative items. HHEC operates showrooms, exhibition halls and online shopping portals of handicraft items as well. 24
- 25. Major Distribution Channels Of Indian Handicrafts Wholesalers: Besides offering wide range of goods to retailers for direct sales, this channel also supplies large quantities of individual articles. They are very particular in maintaining consistency in the kind of products and their quality. One of the distinguishing features of wholesalers is to provide distribution and storage facilities. Specialized wholesalers deal in sales to retailers as well as to final consumers. They maintain high quality standards and but have a narrower and in-depth range of arts and crafts. 25
- 26. Importers/distributors: Most Indian giftware and handicrafts companies use importers/distributors to market and sell their giftware and handicrafts lines. They buy and sell on their own account. Thus, the companies take advantage of the distributor's expertise, his sales force and his existing distribution channels. Distributors call on giftware and handicrafts retailers, purchasing groups and supermarkets. The distributors' mark- up varies depending on the giftware and handicrafts item, but at least 50 percent. While the mark-ups vary according to the distributor; they usually also depend on the exclusivity of a product and on its competitiveness in the overall giftware and handicrafts market Commission agents: Commission agents provide Indian companies with direct access to the world- wide market and direct control. Independent commercial agents are normally working on a 15 percent commission and operate on a regional basis. They concentrate on specialist retailers, purchasing groups and department stores. Commission agent contracts are based on stringent EU and German regulations. An Indian firm wishing to appoint an agent should make sure that such standard contracts meet its expectations. In order to facilitate market entry efforts by the agents their initial commission is often a few percent higher than the "usual" commission. These additional payments are to reimburse the agent for substantial advertising and any special efforts facilitating the new product's market entry. Department Stores: Indian companies interested in establishing business contacts with major department stores, mail-order houses and retailers may also choose the direct approach. Department stores in particular, prefer to deal directly with manufacturers. Their buyers are very specialized and only handle a limited range of products. At some occasions department stores also buy through 26
- 27. independent commercial agents. Quite often they have their own buyers as well as a few agents that usually work with them and who know their assortments. If a department store decides to import a particular giftware and handicrafts item, it places bulk rather than small orders. Mail Order: This kind of a distribution system has been gaining popularity from the past few years. Orders are being placed and mail- order delivery is becoming a popular way of reaching out to customers. Several mail order companies are being setup in order to specially cater the needs of customers. Internet Sales: Internet has changed the entire world. Handicrafts industry was not left behind in this transition. Internet marketing ties together the creative and technical aspects of the Internet, including design, development, advertising and sales. Thus, internet sales are a very popular and a growing medium for the handicrafts industry. Teleshopping: The distribution of your products via television gives a lot of advantages. One of the greatest advantages is: Professional presenters have enough time to explain any feature of the product. The presenters have about 12 - 15 minutes to make sure, that the customer will get any information that he needs to decide to buy the product. Hence, it is being seen as a lucrative medium by many handicrafts sellers to reach out to the customers. Both, national and international, the teleshopping market is growing expansively. The products are selling very fast via these channels. 27
- 28. E-Commerce: Internet has emerged as a one of the promising distribution channel for selling the handicrafts products. It is estimated that internet will be one of the major channel for the distribution of handicrafts products through E-Commerce. Easily availability on global basis and cost effective way has made Internet a good marketplace to buy, sell, and promote the products. E-commerce is the single most booming way of product purchase in India and it is here the most opportunities reside in the field of product promotion, marketing etc. 28
- 29. Indian Handicrafts Industry: Opportunities and Challenges Opportunities available in Indian handicraft sector are: Reports suggest that every Indian state comes with their own style of handicrafts that displays distinctiveness. There are ample opportunities for growth present in the Indian handicraft sector such as: Strong international presence/ interest. Huge trained and skilled manpower base. Rising export market for quality products across Europe, Latin America and US. Social interventions and structures. Traditional knowledge base. Rising flow of tourists in India. Growing disposable income along with the desire to own multi- faceted artifacts. With the onset of globalization in 1991, India has undergone many changes in different spheres. The worth of Indian handicrafts in the international market was realized when exports successfully crossed Rs 1220 crores in 1990-91 from Rs 10 crore in the mid fifties. It is believed that the forces of globalization have positively impacted the growth prospects of the Indian handicraft sector. The handicrafts sector has made considerable contribution to the Indian economy via export and its importance can be judged with the increase in employment potential. Challenges in handicraft sector: Although, many domestic companies are positively responding to the global conditions, but the international-domestic combination also comes with considerable multiplicity. Despite the strong growth momentum, the sector also faces various challenges: 29
- 30. Originality faces threat: In any market, emphasis is laid on the consumption pattern. When the demand for any product is high, it should be made available even if the social costs are high. This is leading to the development of contemporary artefacts that address the demands of the people. In many respects, contemporary artisans maintain the traditionalism and also simultaneously meet the demands of the international consumers or local tourist market. The real problem comes up when originality is threatened in the very process of innovation. Changing patron-client network: It is believed that in the present market system, the craft industry has seen much vulnerability. With the development of the modern market economy, the old patron-client business network is fast declining. The artisans are dependent on middle men and trader entrepreneurs to sell their products. Changing occupation: Reports suggest that majority of the artisans in India is illiterate as they usually do not have formal education. This is forcing many artisans to shift to other professions rather than just sticking to their hereditary occupation. Handmade v/s Machine made: Since mass production and rising mechanization are becoming the norms of the day, handmade products are fast disappearing. Present government interventions to step up growth Despite the adaption of the liberalization of policies, the handicrafts sector sees intervention from government to strengthen productivity. In the Indian constitution, handicraft has been defined as state subject and it is stated that the responsibility of development and promotion of crafts lies with state governments. The central government via developmental schemes plays the role of supplementing their efforts. To strengthen holistic growth of the sector, quite a few generic schemes have been implemented. Marketing Support and Service Scheme: Aims to create awareness about the Indian craft products among the people via marketing events, providing services in the form of entrepreneurship and providing financial assistance to state handicrafts corporations for setting up new shops. 30
- 31. Baba Saheb Ambedkar Hastshilp Vikas Yojana: Government hopes to develop the handicrafts sector via the participation of craftspersons. It is implemented through social, marketing and financial interventions. Design and Technology Upgradation Scheme: It hopes to supply modern tools, upgrade the skills of artisans, revival of rare crafts by offering training along with outsourcing. Export Promotion Scheme: It works for the promotion of export of handicrafts with special emphasis on hand-knotted carpets and floor covering. The main components of this scheme are product development, marketing and also welfare measures. Research and Development Scheme: It aims to get feedback on economic, social, aesthetic and promotional aspects of various craft goods. Training and Extension Scheme: It works in the direction of capacity building. Bima Yojana for Handicrafts Artisans: The Yojana provides life insurance protection to the artisans, either male or female who are in the age group of 18 -60 years. It is being implemented in association with the Life Insurance Corporation of India ltd (LIC). Special Handicrafts Training Projects: Under this programme, steps are taken to upgrade the skills of existing and also new craftpersons, enhance employment opportunities in the handicrafts sector. Apart from the above mentioned schemes, Centre has been taking special steps for strengthening the crafts by popularizing the products. Recently, the Export Promotion Council for Handicrafts (EPCH) inked an agreement with Kazakhstan-based Almaty Chamber of Commerce and Industry to raise the Indian handicrafts exports in the Commonwealth of Independent States (CIS) region. 31
- 32. Chapter II: Introduction to some contemporary marketing trends: E-marketing The purpose of e-marketing is to exploit the internet and other forms of electronic communication to communicate with target markets in the most cost-effective ways, and to enable joint working with partner organizations with which there is a common interest. The internet and interactivity is also permeating the traditional methods of communicating with customers. Benefits of E marketing: The benefits of e-marketing are wide-ranging: Delivery of massive amounts of information in a user-friendly way. Brand-building is a more recent benefit, made possible by the rapid spread of broadband connections, allowing users to experience dramatic imagery and animation, as well as enhanced communication and interaction. Two-way interaction between the suppliers and customers, and between customers and other like-minded customers. These interactions apply at all stages of the „customer journey‟, a cycle of thoughts, decisions, and actions by the visitor before, during and after their visit. Joining promotional activity seamlessly with online purchasing. Cost-effectiveness in conveying information and products on sale directly, cheaply and at short notice to prime prospects, through the web, e-mail and mobiles. The ability for firms to engage with customers on a one-to-one basis, but also to use „one-to-many‟ activities. 32
- 33. Social Media & SM Based Marketing Social media refers to the means of interactions among people in which they create, share, and exchange information and ideas in virtual communities and networks. Social media depends on mobile and web-based technologies to create highly interactive platforms through which individuals and communities share, co-create, discuss, and modify user-generated content. It introduces substantial and pervasive changes to communication between organizations, communities and individuals. Social media differentiates from traditional/industrial media in many aspects such as quality, reach, frequency, usability, immediacy and permanence. There are many effects that stem from internet usage. According to Nielsen, internet users continue to spend more time with social media sites than any other type of site. At the same time, the total time spent on social media in the U.S. across PC and mobile devices increased by 37 percent to 121 billion minutes in July 2012 compared to 88 billion minutes in July 2011. Social media technologies take on many different forms including magazines, Internet forums, weblogs, social blogs, micro-blogging, wikis, social networks, podcasts, photographs or pictures, video, rating and social bookmarking. Social networks are online communities of people who share common interests and activities. They provide a user with a collection of various interaction possibilities, ranging from a simple chat, to multiple video conferences, and from the exchange of plain email messages to the participation in blogs and discussion groups. The website is no longer just a static page, but a dynamic platform which allows users the autonomous generation of content and the possibility of telling their own experiences. With millions of customers on tap, firms are coming up with new and innovative methodologies to promote their brands and products online in a big way. The following infographic (courtesy: digital surgeons) explains the nuances of the two most popular media right now, Facebook & Twitter. 33
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- 35. Literature Review in general Search Marketing is a term applied to marketing techniques implemented at Search Engines such as Google, Yahoo! or Ask.com in order to drive and increase website traffic (Moran and Hunt 2005). Search Engines have become the central access gate to booking a holiday or purchasing tourism products and services. In order to achieve favorable positions two different Search Marketing techniques are used by marketers. The first is Search Engine Optimization (SEO) at which the focus lies with altering the websites content and structure in such a way that the website is ranked naturally high for certain keyword phrases. The second technique is paid advertisement or placements also known as Sponsored Listings, which plays a more active part in advertising than SEO. Sponsored listings are part of Search Marketing and are situated above the organic results on Search Engines. They are a form of online advertisement and are mostly shown separated from other search results. Social media have been defined as “a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of User Generated Content” (Kaplan & Haenlein, 2010, p. 61). In their definition, Safko and Brake (2009) give a broader role to social media by including not only the media but also the “activities, practices and behaviours among communities of people who gather online to share information, knowledge, and opinions using conversational media” (p. 6). Social media as a term should not be associated exclusively with social networking sites. The latter describes only a subset of social media and refers to online systems enabling users to become members, create a profile, build a personal network connecting them to other users with whom they exchange on a frequent basis skills, talents, knowledge, preferences and other information (Boyd & Ellison, 2007; McKinsey, 2007; Lenhart & Madden, 2007). 35
- 36. Social media influence several components of consumer behaviour such as awareness, in- formation acquisition, opinions, attitudes, but also purchase behaviour and post-purchase communications and evaluation (Mangold & Faulds, 2009). It is claimed for example that virtual communities, a term used to describe a subset of social media, serve as reference groups with their power derived from the heterogeneity of its members, while their influence differs across the various phases of the consumer decision process (De Valck et al., 2009). However in a similar study, Jepsen (2006) found somewhat contradic- tory results: Virtual communities dramatically increase consumer access to non- commercial individualized information and replace to some extent commercial sources of information, but replace primary reference groups to a very limited extent. 36
- 37. Research Methodology: Scope & Design Application based cases regarding social media based marketing and promotion have been studied. Of the vast majority of cases found online, only examples with Indian context are taken as to remain relevant to current scope of study. The research is mostly focused on secondary data and desk-research data obtained through published reports, info-graphics and articles. For primary data collection regarding the industry, functioning and decision making processes, conversations with select people in responsible positions in the companies were organized. The respondents are experienced in their domains and in a position to offer insights into the workings and nuances of the industry. Inferences were then drawn from those conversations and thus emerged a platform for comparison, suggestion and recommendation. Data and opinions regarding artisans, cluster studies regarding handicraft production are taken directly from representatives of respective organizations, people more or less directly involved in the industry. The suggestions are verbatim based on their insights & perceptions. 37
- 38. Study: Application-based Cases in Social Media and E-Marketing Volkswagen India As a relatively recent entry into the Indian automotive market, VW needed to raise brand awareness. To address this challenge, Volkswagen‟s marketing team focused one of its key brand pillars, innovation, to make a strong impact throughout the roll-out in India. Innovation was showcased not only in Volkswagen‟s product introductions, but also in its communications and advertising. Volkswagen next turned to digital media to extend its success and create new opportunities for customers to connect with the brand. LinkedIn approached Volkswagen India with an opportunity to be the rst auto major to establish a presence on LinkedIn Company Pages. „Company Pages‟ provide a branded home base within the LinkedIn community where businesses can showcase their company, products, and services in a trusted, professional environment. Volkswagen India participated in the worldwide launch of Company Pages in November 2010, and soon thereafter opened up their pages to allow LinkedIn members to post reviews and recommendations of their car line in India including the New Beetle, Vento, and Polo. 38
- 39. LinkedIn member-generated recommendations of VW car models increased dramatically with the launch the recommendation ad campaign. Over 2,700 Volkswagen fans recommended their favorite car models to their professional network in just four weeks. Asian Paints: Tag a Friend Holi Asian Paints were certain about strengthening their relationship with the online audience and hence required a social marketing campaign that would convey the core message of the Asian Paints brand, that of safe vibrant colours, and had the capacity to go viral. Their objective lay in creating a campaign that was self sustainable, viral and true to their brand persona of Asian Paints. Thus, Tag-A-Friend-Holi application was conceptualized. The application allowed users to play holi with other users across the globe with a chance to win an iPod nano and also conveyed an eco friendly message pertaining to water conservation. The application successfully linked Asian Paints with safe colourful fun and engaged users with the brand „Asian Paints‟ at every level. This creative strategy met the needs of creating a curiosity, engaging users in social interaction and maintaining an active buzz during the festive period of Holi. The fun factor of the app was its biggest selling point. For 8 days from 26th February to 5th March, 2010 the application added 16,755 monthly active Facebook users 924 Facebook fans 334-the highest number of victims by 1 person 23,819 times the app was successfully played 1,59,914 page views 67,434 unique page views The application met the need of users separated by distance to play holi with family and friends across the globe via the social network forum, & conveyed the message of the Asian Paints brand message of safe and vibrant colours. It also brought to light the eco friendly message involving water conservation. 39
- 40. HDFC Bank: India’s most SM Friendly Bank HDFC Bank has presence across 8 social media channels out of which the prominent presence is on Facebook, LinkedIn, Twitter, Youtube & their official blog. Important aspect is the engagement which they do on all these channels. HDFC‟s page on facebook generates admirable feedback from users which serves as a ground for them to understand their fans as well as promote their banking products. 40
- 41. They have a money matters section where they provide interesting recent financial news of interest to their fans. Also they keep on engaging the users with interesting puzzles/jigsaws based upon financial terms. HDFC‟s twitter approach is build upon again like their facebook approach on sharing interesting & relevant information with their followers, asking them interesting puzzles, sharing new products & deals from their stable and so on. They have a healthy follower count of 1300+ which is growing on the daily basis. Anna Hazare: From Social Activist to SM Activist In 2012, the country saw a wave of anti-corruption aandolans and protests across the country. It was widely seen among the media as a large scale movement which brought together masses from different strata of society. What was interesting was how SM was used to push news, views and updates regarding the protests and bring people on board. 41
- 42. 500,000 fans within a matter of time joined the FB page. This campaign was a brilliant example of marketing and promotion where no product is involved, just an ideology and a movement. It goes on to strengthen the belief that SM is powerful and engaging. 42
- 43. Grameen Microfinance Bank Since 2001, Grameen Foundation has recognized the unique role mobile phones can play in the fight against global poverty. Starting with the business opportunities created by the Village Phone program, Grameen Foundation continues to develop innovative mobile pho ne- based solutions that address the critical needs of the most remote, most economically disenfranchised populations. Few things are as important to a family‟s dignity as managing their health, making a decent income, and safely and effectively managing that income to maximize financial opportunities. Grameen Foundation develops and delivers products, tools and services delivered over mobile phones that focus on health, agriculture, financial services, and livelihood creation. From poor, rural farmers helping their peers access information about their crops, to a “business in a box” for people to sell mobile airtime in Indonesia, to nurses helping expectant mothers and their babies with health services in rural Ghana, our solutions empower the poor to fight “information poverty” with important information and services that improve their lives. 43
- 44. Scope of such applications in the handicraft industry The Indian Handicraft industry has been a laggard when it comes to adoption of social media marketing methods and aggressive e-marketing. As discussed in aforementioned topics, the sales and marketing of products has mostly been concentrated to state-run emporiums, festivals such as Lokrang, Mrignayani etc, and these efforts are mostly scattered, and unwelcoming to the new handicraft buyer. 44
- 45. Some sites and portals which are currently engaged in online sale and exhibition of handicrafts are as follows: http://handicraftsindia.com (Private) 45
- 46. HHEC Ltd. It also operates showrooms and exhibition houses in Noida, Chennai etc. However, on visiting, general atmosphere was gloomy and not much enthusiasm was felt regarding sales. It is also categorized as a sick unit when it comes to profitability. Being a PSU, they enjoy a good network of artisans and suppliers, with access to items that sell for lakhs in the international market. 46
- 47. CCIE also sells items online though marketing and strategies are more on the reluctant side. Again, being a PSU unit, their sourcing and supply chain activities have huge potential, being government funded. 47
- 48. http://handicraftofindia.org (Private) Sourcing, unprofessional supply chain and general neglect of the industry by the government is what has kept handicrafts largely absent from the booming e-commerce scene in India. Major players like Flipkart, Tradus, eBay and others focus on electronics, apparel and even when it comes to home décor and novelty items, largely stay away from Indian handicraft products. This is an opportunity in disguise for state run corporations to bring into limelight the handicraft products and market them effectively. 48
- 49. Chapter III: Recommendations, Conclusions & Insights As we have seen in the numerous examples cited, e-commerce & SM marketing make for a potent mix to revive this industry. What is needed is a genuine, sincere approach towards embracing the newer, contemporary methods of marketing and product communication. Among government agencies, a brilliant example is of Madhya Pradesh Tourism, which has regularly been winning best state-run tourism corporation awards, and recognition for its advertisements and social media efforts. Having over 92,000 fans, the Facebook page of MP Tourism is very professional, regularly updated and follows a fresh approach. Though not directly involved in many products they promote, their main aim of educating the consumer and satisfying the curiosity is served properly. 49
- 50. A similar approach can be adopted by state run organizations like HHEC or CCIE towards vibrantly portaying their products and kindling interest of the customers. A proactive approach towards the “Indianness” of the artefacts can help build social buzz and gradually boost customer confidence. 50
- 51. Simple steps like these can generate a positive impact towards the products. Such initiatives have already been taken by other handicraft producing nations like Pakistan. Being a new field of marketing for traditionally run units, the concepts of Technology Acceptance Model (TAM) can be implemented to gauge how users would accept the inculcation of technology. The model suggests that when users are presented with a new technology, a number of factors influence their decision about how and when they will use it. This study can be helpful in assessing the reluctance of management to adopt such methods and help instill a sense of benefit and enthusiasm. 51
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- 53. Social media marketing is very cost-effective compared to mainstream media. All it takes is a creative mind and commitment to the cause. These initiatives can be started by the existing staff of the company itself, someone with penchant for marketing, interaction with customers, and knowledge about history, origin, and stories behind the products. However, this being a good start, it is still only part of the story, as many problems plague the Indian handicraft industry. It is facing the stiff challenge from machine-made goods and efforts should be made for the revival and survival of handicraft items. It has been observed that emphasis should be given on modification and development to improve tools and equipments, which are acceptable and comfortable to the craftsmen for products of high quality products as well as are economically viable. These products will then be in a position to surpass the machine-made items and will be the prized attraction and possession of the customers. The quality of the products should have to be of International standard. Market intelligence, taste, trends and preferences of the customers are also required to be identified and design diversification shall have to be undertaken accordingly. The price of the products should be competitive and economical too. 53
- 54. Data already collected by handloom promotion councils and departments, shows various problems plague the industry when looking at the source of the goods and where the whole chain starts. According to the responses, various constraints caning in the way of product development were pointed out by the artisans: Unorganized market: due to dispersal of their product at distant and remote locations with or without proper communications problems. Lack of working capital Drudgery: the work on handicrafts as long drawn process bringing drudgery or tiresomeness in the work. Lack of market intelligence During the surveys, their following problems of marketing were ascertained. Growing competition. Low returns for handicraft products without realizing the amount labour involved in bring out these carved handicrafts. Scarcity of raw materials. Competition from machine made products: Machine made products or substitutes by plastics encroached the hitherto preserve of the tribal. Marketing of finished products is a matter of vital importance. The elimination of middle man, who grabs the fruits of hapless craftsman‟s labor, can be achieved only through organizing of markets. The weaknesses of handicrafts industry rest upon being unorganized with dispersed production bases, lack of working capital at producer‟s end, diversity of input needs making co-operation difficult, market intelligence and perception and the attitude that craft is mainly decorative and non-essential. The challenges and threats to the craft and craftsmen are from growing competition in export market in view of WTO, continued low return weaning craftsman away from their traditional occupation, scarcity of raw material due to depletion and non-presentation of natural mediums and competition from machine made goods. 54
- 55. Analyzing the status position of craftsperson in the present scenario, a craftsperson represents the profile of a person with great skill, creativity and capability for self employment, but lacking in finance, and unsure of the market and constantly at the mercy of intermediaries who have access to both finance and market. Therefore from the planning point of view, it shows that handicrafts sector is full of possibilities for employment and export, but highly de-organized and difficult to service. The approach to planning must be aimed at sustaining the strength and rising to opportunities, and removing the weakness may be converting them to strength and coping with the threats. 55
- 57. http://www.smeworld.org/story/special-reports-109/iprs-and-branding-for- indian-handicrafts-a-need-of-the-moment-164.php http://www.india-crafts.com/business-reports/indian-handicraft- industry/handicraft-policies.html /business-reports/indian-handicraft-industry/handicraft- introduction.htm /business-reports/indian-textile-industry/handicraft-textile- industry.htm /business-reports/indian-handicraft-industry/handicraft-exports.html http://business.mapsofindia.com/india-industry/spinning.html 57
- 58. Bibliography Mukherji, T. N., Art Manufacutures of India. Powell, Baden, Handbook on The Manufactures and Arts of The P unjab. Singh, Gurucharan, Pottery In India. Postel, Michel and Cooper, Zarine. Bastar Folk Art: Shrines, Figurines and Memorials. Franco-Indian Research Pvt. Ltd., Mumbai, 1999. Reeves, Ruth. Folk Metals of India. Handicrafts and Handlooms Exportation Corp. of India, New Delhi. Barker, Alfred F., A report on the cottage textile industries of Kashmir and their prospective development. Chitra, V. R. and Viswanathan, Takumalla Cottage industries of India, guidebook and symposium. Walker, Daniel., Pride of the princes: Indian art of the Mughal era 58