CHAPTER 9

MARKETING OF KHADI PRODUCTS

9.1 Introduction
Marketing is one of the very crucial elements when it comes to products like
Khadi. Further it is observed that Khadi has a limited market catering to few
consumers who either believes in Khadi ideology or in the good qualities of wearing
cotton clothes. It is therefore interesting to look at the marketing strategies adopted by
the KVIC (marketing wing) and Institutions in promoting Khadi. The data source for
most of the tables in this chapter is derived from the questionnaire of cutomers (75 in
number) surveyed in the Khadi Bhanders. Though the number is small it is due to lack
of availability of customers during the visits to the Khadi bhandars through out India.
However one can still draw some broad conclusions from this thin sample which can
be found true for majority of the states. In fact thi s is the one of the limitation of this
chapter. In section 9.2, aspects like marketing strategies of Khadi, investment in up
gradation of designs and products to suit the changing market needs and training of
personnel in marketing. Section 9.3 looks at the marketing linkages of Khadi. A brief
analysis of the customer perception of Khadi is undertaken by analyzing the
questionnaire of customers in section 9.4. Section 9.5 looks at the quality of Khadi
right from the time of its initial process till the final product to get an understanding of
the way quality is viewed by the institutions. It is further substantiated with our field
observations on the attributes of Khadi. Finally in section 9.6 we look at the emerging
textile marketing strategies in the Globalising era and its implication for Khadi
marketing to enhance its status. Summary and conclusions are presented in section 9.7

9.2 Marketing Strategies Of Khadi Institutions

It is found that the common Marketing strategy adopted by institutions are
opening up of new sales bhandars, putting up advertisements and banners and
distributing pamphlets during the rebate period. The primary survey data of the
institutions revealed quite a dismal picture about the naïve marketing practices
adopted by the institutions compared to today’s hi-tech marketing strategies. Table
9.1 shows that 69 percent of the institutions believed marketing as only opening new

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sales bhandars and exhibitions and very few (2%) believed in improving the quality
and design pattern of the Khadi.
Table 9.1: Sales Strategies Adopted by Institutions to Sell Khadi.

Type of strategies adopted Percentage

Sales bhandars, exhibitions and

68.80
pamphlets
High quality production 2.10

New variety / designs 2.10

Opening new bhandards/sales
2.10
outlets
Combination of above four
24.90
strategies

Source: Institutions questionnaire

Further, the sales bhandars of the institutions are not professionally managed,
their timings are also not suitable to the customers, to quote one of the KVIB
Directors ‘Why stock is increasing because at every place Khadi shop is there, but it
will be shut for3-4 hours in a day. If any farmer is coming from far off place then he
will have to go back. Khadi shop opens at 9 0'clock in the morning and shuts by 1
0'clock. Then it again opens at 3 p.m. and shuts by 6 p.m. It works on government
timing. For this 'central vastragar' should be made and rebate should be given on that
products. Whoever produces anything should send it to 'central vastragar' and then
can be sent to sales outlets’.

Table 9.2: Opinion About Share of Market Assistance in the Cost-Chart.

Is percentage of market assistance in cost-chart sufficient Percentage

Yes 37.5

No 47.9

No response 14.6

Total 100.0

Source: Institutions questionnaire

Marketing promotion of Khadi is essentially done by the institutions. They have just
meagre 0.5% of the total cost of the product to be spent on marketing the product.

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Most institutions find it quite insufficient (Table 9.2). Further if we compare the
marketing assistance given in the cost-chart to any other product we can easily guess
that it is largely insufficient and requires to be rectified.

Table 9.3: Share of Inputs/Wages/Margins in Cloth Prices in Handloom and

Khadi sector.

Organisations Inputs Wages Margins Total

Cooperatives (A.P) 44 44 12 100

Central govt. scheme 40 40 20 100
Yemmiganur Society 27.5 27.5 45 100
Master weaver 25 25 50 100
(Gadwal) (Private)
Khadi Cost-Chart 27.34 48.43# 24.83* 100
Source: Mukund (2001), Table 6.2.for Hand Loom Sector and KVIC Cost-Chart for institutions.
#Note: spinners wages are around (15.17 %, and welfare fund +incentive(2.77%), wavers wages
(16.78% and welfare fund +incentive(3.38%)
*Note: Total margin includes: Trade margin (2.26%), publicity (0.37%), insurance (0.76%) Bank
interest (4.16 %), Establishment margin (16.67 %)

Comparing the cost structures in handloom sector of Andhra Pradesh and that
of Khadi we find that though wages account for the major component in Khadi sector
but it is split into spinners and weavers wages. If we compare just the weavers wages
across the categories we find that Khadi (16.78%) falls far below even the private
wage standards (25%) (Table 9.3). Trade margin is quite low in Khadi (2.26 %)
compared to others but the establishment margin accounts for around 16.67 percent,
which is higher than even cooperatives. Overall the cost includes many other
components like, insurance (0.76%), bank interest (4.16 %), incentives and welfare
fund. Thus the customer bears all the cost of production including the bank loans
taken by the institutions. More over institutions get further rebate on selling these
products, which is also a subsidy. Thus overall institutions are subsidized in many
ways. And if we see the employment and wage generation it is quite low and
comparatively lesser than existing handloom sector.
The question of Khadi being costly because of wage component is something,
which needs to be taken with a pinch of salt. Another concern is, what have
institutions done with the establishment cost around (20 %) when they are supposed

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to be working on no-profit and no loss basis? In the field we found that institutions
have built up vast infrastructures, which needs to be critically examined by the
Commission. Ideally the establishment cost of Khadi should have been around 10-12
percent only like the cooperatives of AP handloom weaving which charges around 12
percent as establishment cost while working on the similar principles as Khadi sector.
Thus cost-chart in Khadi needs to be re-looked very closely and changed according to
current market scenario. The cost-chart currently in vogue was developed by mahatma
Gandhi to maintain good wage and product quality standards across the country. But
looking at today’s changing scenario it may not be that relevant. Except keeping the
raw material cost to maintain product quality and wages to maintain wage parity
across the regions the other components like marketing assistance, institution’s
establishment costs etc. needs to be done away with.
KVIC has a directorate of marketing and export at the central office in
Mumbai, but so far, it has essentially acted only as a support organisation with the
Institutions doing most of the marketing.

The problem we have seen is that due to the decentralisation policy, each
institution has marketing linkages mostly in rural or semi-urban centres. Also,
institutions only market their own products and in the best possible way given their
experience, understanding of the market, and the funds allocated to them for
marketing the products. The marketing strategy is fragmented, by fragmentation, we
mean that even if there are two institutions in an area, sharing the market, they do not
even try to come together to market their product, in spite of the fact that it would be
mutually beneficial and cost effective for them to work together.

Further, sale of Khadi has mostly relied on the rebate and the hope that people will
buy Khadi on Gandhian ideology or on the fact that rural employment will be
generated by buying Khadi but this is found to be fictional in today's context. For
example to quote a State Director, KVIB ----

- ‘Because Gandhiji has raised in the context of socio-political-economic.....which

may or may not be fully relevant in today's time. Just because Gandhiji found
something relevant in 20's, does not mean that Gandhiji would have found it
relevant today. He himself would have fallen in trouble today. So yes, that need is
very much there to address Khadi as a business, as a business to enhance to
sustain rural employment....’.

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 Thus, it is found to be today's need to make Khadi competitive and look at it
from business angel. That doesn't seem to be happening anymore. The market in this
generation is more oriented to price and quality of the product.

We have also observed that selling of Khadi has up to now been supply
oriented which means that institutions first produce the goods and then try to sell it.
Hence, their stocks have been piling up, because their products are not being
produced according to the demand. We do understand that in achieving the objective
of rural employment the production process cannot be controlled by mere linking it to
the demand factor, however, one cannot ignore the competitive market economy and
the relevance of understanding the demand side aspect of the products.

Also, there has not been much change in the design, colour or type of Khadi
readymade produced by the institution since the inception of the Khadi programme.
Institutions which are understanding the current market scenario are now making
some attempts to make products that are more `in’ with the consumer, but these
attempts are few and without any admired support.

There has also been no attempt to find out who buys Khadi, who is going to be
the target consumer, what is the requirement and preferences of the target consumer
etc. This is because the product range is so vast that it covers products from dusters to
3 piece suits. In fact, the total product range of Khadi comes to about 5000 products.
It is imperative for Khadi to rationalize its product range from 5000 to a manageable
number so that the objective of Khadi i.e. production of salable products is achieved.

The decline in sales and increase in stock is also attributed to the fact that
government agencies have stopped placing orders with the institutions, which earlier
used to rely heavily on government buying to dispose of its product. This shift in
government buying could be due to the fact that they are getting better quality at
cheaper prices from elsewhere. During our interviews with the various institutions, we
wanted to know what they think about the competitiveness of the programme, vis-à-
vis other products in the current market situation and this is what they had to say
(Table 9.4).

Positively, 64 percent of the institutions felt that Khadi could compete with
other textiles in the market. The above Table 9.4 indicates that majority of the
institutions seem to think that Khadi can be competitive in the market, but they seem

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to think that this will happen with more subsidy. Institutions think that the stock
problems would be solved if KVIC could manage to sell their products to government
agencies, again in the name of employment generation.

Table 9.4: Competitiveness of Khadi.

Can Khadi become
Percentage
competitive
Yes 63.8

No 25.5

Can’t say 10.6

Total 100.0

Source: Institutions questionnaire

Also, after having visited some of the sales bhandars, we felt that better
maintenance and presentation of the shops would help in selling Khadi. And better-
trained sales people with incentive based salaries would only help the cause. Further it
was observed that the wages paid to the sales persons was very low and further they
had quite low levels of motivations to sell Khadi.

The recommendation in Union budget in 2000 to set up a central marketing

agency which looks into all the aspects of Khadi marketing from demand oriented
designs to selling it through a centralised process is welcome and we are glad that this
step was taken.

Marketing not only means selling to the customer, what the consumer wants, it
also requires making a consumer buy products which are sold under brand name. In
other words it is creating demand for your own products rather than create what is just
demanded by the consumer. If the selling has to be market oriented instead of product
oriented, then there is a lot of homework to be done by the KVIC. In fact these are
preciously the strategies in vogue in today’s market scenario. Thus if Khadi can be
branded and then heavily marketed at the central level through Television and
Newspapers which have mass reach, and at the institution levels if a mass defined
marketing strategy is used, then it will go a long way in making Khadi a competitive
product in the market.

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 In terms of export of Khadi, the problem faced is that due to lack of evenness
and quality, it is very difficult to export Khadi. But we feel that powerisation would
take care of that. Through talking to various experts and foreign customers, we feel
that there is a huge market for Khadi in foreign countries, and it is the job of the
KVIC export directorate to help export Khadi. A lot of institutions feel that they can
export cloth, and are also aware of various markets abroad. But they do not know the
strategies and procedures to export. Further, institutions did not try to capture even
local market, to quote one of the expert in Khadi industry ----

‘There should be a market survey done in order to understand the needs of

local market. Local requirements of the market should be understood first, then comes
the international market needs. There should be linkage between production and
sales. I issued a questionnarie to all institutions wherever bhandars were there, I
asked them to write down those products which does not have ready market and how
much quantity is sold? Is there people coming and demanding and going back without
that? Based on this date we can guide producers’.

If KVIC is to shift focus to the urban and niche markets in India and abroad,
then quality is going to be very important to them. Moreover as Scouller John (1999)
has pointed out, ‘growth therefore is not just a matter of increasing a country’s
capacity to produce goods by building more factories and machinery. It is about the
altogether more difficult task of increasing the countries capacity to generate value by
responding appropriately to information and signals about what potential consumers
value’.

Following of norms set by Ahmedabad Textile Research Association (ATIRA)

or any other agency would be a good step forward in this regard. Also, improvement
in the implements like putting a jack-up-motion on the frame-loom which increases
the evenness and quality of cloth etc. would also be very helpful in improving quality.

Also, at the raw material stage, if the input is of high quality, it will definitely
be carried forward to the final product. This will also save wastage, money and raw
material.

An analysis of the ‘Life cycle of the product’ for Khadi was attempted. But as
the product range in the Khadi sector is high around 5000, we found a limitation that
it was very difficult to separate which products are in demand and not. Therefore

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KVIC should conduct a product survey and rationalize the products range depending
on the demand and high value addition of the products and this will also benefit the
artisan’s, as they will produce the products that are in demand.

9.3 Marketing Linkages

Institutions provide all the raw material to spinners and weavers and there are
no intermediaries. The weaver supplies the finished clothe to the institution. In effect
the waver is totally isolated from the market. Information on the changing tastes and
market preferences never comes to him through the institutions. Thus weaver is
essentially being paid only a wage for his work depending on his output. One of the
most visible facts about weaver’s earnings is that the wage rates are extremely low.
One explanation that is offered for low wages is that the market for Khadi is limited
and declining and consequently the wages are low. Further, the technology of
weaving is still rudimentary i.e most of the weaving is done on the pit-looms by home
based weavers who are in majority, frame-looms are used though to a limited extent
in the shed based weaving by some institutions and for specialised products like
Kanchivaram or Patola jack-looms with traditional designs are used. Productivity is
therefore low, and the only reason why these products are surviving is because of
state support.

There are around 16 Departmental Bhavans, 15,441 Sales outlets, 11 Bhavans

in hill and border areas, which does the entire marketing of Khadi products
(Government of India, 2000). Most of these are situated in the major metro cities,
small and medium towns. Thus the linkages between the sales outlets, institution and
artisans are quite straight forward or linear. Further, there are no feed-back from the
market outlets to the institutions and artisans about the changing market patterns. Due
to paucity of funds and bureaucratic tendencies many of the institutions felt that the
marketing assistance provided by the marketing wing of the Khadi sector is quite poor
and insufficient. Thus every linkage looks more like a compartmentalized task
fulfilling rather than any round about linkages which feeds back into enriching the
each other.

Contrary to this in a case study of Andhra Pradesh it was found that handloom
weaving (which can be comparable with the Khadi weaving sector) was in a state of
crises in Telangana region, the only districts where weaving activites have ceased to

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exist are the Nalgonda, Mahbubnagar and, to a lesser extent, Warangal. In all this
districts, highly marketable, value-added fabrics are being produced and this has been
the major factor in the survival of handloom weaving here (Mukund, 2001). Similarly,
within Khadi also we find some institutions, which are able to compete in the market
and sell Khadi on par with any other foreign branded products in Ahmadabad and
New Delhi. If within the given structure some institutions are able to survive then we
can believe that marketing good Khadi products is not a chronic problem. It can be
tackled, only the mind-set of the institutions needs to be changed to the current
environment.

9.4 Customer Survey Data Analysis

Here we present the data analysis of a questionnaire capturing the customer
views regarding Khadi marketing, their preferences for variety of products, their
opinion regarding customer care by the salespersons and the major reasons which
make them prefer Khadi products over others. Due to lack of customers while
conducting the survey, the sample size is very limited and gives a brief insight into the
utility of Khadi as viewed by its customers. Around 80% of Khadi products are sold
in urban areas, that too during the rebate season. A brief profile of the customers
shows that most of the buyers are educated i.e., above secondary education and
belong to business or service sector and have monthly income ranging from
Rs.5,000/- to 20,000/- above and most of the customers were regular and started
wearing Khadi from a long time (see Annexure 9.1 to 9.3 & 9.10).
The most sited advantages of wearing Khadi are comfort/ texture, soaks sweat
and looks unique and has a status of its own (Annexure 9.4). When questioned about
the disadvantages of wearing Khadi there was no unique or significant reason given
except that it needs higher maintenance cost, its not durable, and it does not have any
good range/pattern of clothes (see Annexure 9.5). Many of the customers (57.3%) felt
that the price of Khadi was high (Annexure 9.7). Around half of the customers felt
that the quality of Khadi was Ok where as 38.9 percent felt that there is a need to
improve the quality (Annexure 9.8). Surprisingly rebate was the least (1.3%) way of
making Khadi Popular according to customers (quite opposite to the view of
Institutions, around 66.7 percent felt that Khadi can’t be sold without rebate. Most of
customers felt that steps like more range/variety of Khadi, advertising, reduction of
prices, marketing and a combination of all above are necessary for making Khadi
popular (Annexure 9.9). As regarding frequency of wearing Khadi by the customers

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data revealed that for most of the respondents Khadi is an occasional wear (46.4%)
and very few (8.7%) of them responded that they wear Khadi regularly (Annexure
9.12). Around 43.5 percent customers buy Khadi during the rebate period, which
gives an indication that a large number of customers have some preference for buying
during rebate period (Annexure 9.13). Male customers have preference for formal and
traditional wears whereas females have sarees and salwar kameez and the
combination of the two as their preference. Annexure 9.18 reveals that cotton & silk
are the favorite products of customers. Comfort and handmade nature of Khadi seems
to be the perceived difference between Khadi and other clothes (Annexure 9.19). The
major reasons identified for customers wearing Khadi were fashion, Gandhian
ideology and comfort/liking for the cloth respectively (Annexure 9.20). The frequency
of the visitors to the Bhandars reveals quite a dismal picture (Annexure 9.21). It also
highlights the poor marketing & promotional strategies adopted by the Institutions.
Although Khadi is a Monopoly seller market for its hand-made products, which is
Eco-friendly and Green. But customer survey reveals that these reasons hardly
qualifies to impress or woo a common customer to purchase it, therefore Khadi has a
limited market catering to few consumers who either believes in Khadi ideology or in
the good qualities of wearing cotton clothes. Therefore it is necessary to undertake
further detailed surveys of the consumers to understand their needs to make it a
popular product even if it is to cater to only niche markets.

9.5 Quality Of Khadi

Quality is another very important area of concern with changing consumer

tastes and fashions and rising competition. It is an important fulcrum to leverage the
sales of Khadi. Here we look at the quality of Khadi as observed during our field
visits along the various production stages involved. The real quality aspect of the
products needs a detailed analysis to be undertaken by the quality measurement
professionals in the textile field. However a description of the production process will
give some insights to explore what stages of Khadi production needs some immediate
attention to improve its quality.

9.5.1 Step I : Purchase Of Raw Material.

Obviously, quality starts from here. Better the quality of the raw material,
better is the quality of the finished good. Each state has a regional cotton purchasing

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committee (RCPC), which includes KVIC officials and representatives of institutions
that purchase cotton for the entire state. But institutions are free to buy raw material
from the local markets too. Thus each state does its own purchasing of raw material
at different costs and quality following the cost-chart norms. It was also found that
RCPC cotton was in most cases more expensive than local market prices, but the
quality was marginally better. It was found that due to bureaucratic processes
involved in the purchase, by the time the RCPC takes a decision to buy the raw
material, prices would have gone up in the local markets. Therefore suggestion is to
buy it at the right time so that there is no compromise on the price as well as quality.

9.5.2 Step II : Pre-Processing

This involves processing of the raw material up to the level where it can then
be spun into yarn. It was found that institutions would either do the pre-processing
themselves on the second-hand vintage machines purchased from the erstwhile mills
or get it done from private sliver plants, or directly buy the pre-processed raw material
from the Central sliver plants (CSP) set up by the KVIC.

We found that quality was best at the sliver plants set up by KVIC as
compared to other sliver plants because the CSP machines are brand new machines
giving quality output as compared to the other machines. But most institutions
continue to buy from outside due to monetary or other reasons which needs to be
rectified.

9.5.3 Step III : Spinning And Weaving

Lets take the case of a spinner who starts spinning at 9 a.m. after a good
night’s sleep. She is fresh in the morning and is able to spin very well and hard, so
the yarn produced then is of good quality. But as the day passes, and it gets hot by
noon, the spinner gets tired, and there is a reduction in strength and evenness with
which the charkha is spun, here there is deterioration in the quality of yarn. This same
example is applicable to the weaver who through the course of the day will produce
cloth of different quality. In fact this is the unique feature of the Khadi industry due to
the hand spinning and hand weaving nature of the cloth. However introduction of
power can solve the problems of evenness of the clothe in the spinning stage. Further,
innovation and improvement in the implements of weaving like putting a jack-up-

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motion on the frame-loom, which increases the evenness and quality of cloth etc.,
would also be very helpful in improving quality.

9.5.4 Step IV : Post Processing Of The Fabric

This step involves making of the finished-goods, which will finally be sold..
Designing, dyeing, stitching and finishing of the products is important because the
finished good is what the customer sees. How much ever the quality of yarn and
cloth, if the colour fades away faster from the cloth or if the stitching is poor, then the
product is not going to be sold. So finishing quality of the product is also very
important, we found that post- processing is usually left to the institutions, who
according to their understanding of the market decide on what to produce and
accordingly process it. Most large institutions had their own dyeing units, and those
who did not, would give it to certified institutions. Further, Institutions hired their
own tailors to make the finished readymade garments. However no good quality
market surveys are undertaken to understand the needs of the consumers.

It was found that most of the institutions were not aware of any R & D activity
undertaken by the KVIC indicating that there exists information dissemination
bottleneck between KVIC and the institutions. Many institutions have never
introduced any innovation in quality, design or pattern, as there is no pressure to
innovate. Some institutions did introduce, improved design/pattern along with
opening of bhandars and sales outlets. But there is a lot of time lag between
innovation and actual implementation and that too mostly irregular. Therefore KVIC
needs to be a facilitator in providing improved design/pattern, but its role will be
qualitatively enhanced if institutions also take up some more initiative in this process.
KVIC also needs to tie up with external agencies involved in this area like NID etc.,
so that there is an exchange of ideas and flow of information about changing market
scenario.

An elaborate discussion with the NID experts, associated with the Khadi
designing work, revealed that Khadi has an international market, as it is the sole
producer of cloth below 20 count (existence of Capacity). Export of such clothe could
be made possible with proper designing and dyeing to suit the international standards.
They also feel that the uniqueness of Khadi is its hand spun and hand woven

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characteristics. NID, on request of KVIC, has prepared appropriate designs and dying
to clear the stock from past 10 years. But there seems to be no utilisation of the work
undertaken either due to lack of funds or commitment from both institutions and the
KVIC.

The cloth quality checking and standardization norms followed by the KVIC
units are quite rudimentary and poor. If KVIC is to shift focus to the urban and niche
markets in India and abroad, then quality is going to be very important to them.
Following the quality standard or norms set by ATIRA or any other agency would be
a good step forward in this regard. Most of the institutions produce commodities
according to their understanding of the market and expect it to be sold in the name of
rebate or Gandhiji. Over the years continues piling-up of stock speaks volumes about
the poor understanding of the market situation by the institutions. In fact the post
processing stage needs a total face-lift if Khadi has to develop in future.

9.6 Emerging Textile Marketing Strategies In The Globalising Era And Its
Implication For Khadi Marketing
Recent changes in Global geographical trends in the production of textiles and
garments show a clear pattern of the continuing relative (and, in some cases, absolute)
decline of developed country producers and a geographical shift of production to
certain to certain developing countries, notably in East Asia and, to a lesser extent, in
Mexico, the Caribbean, Eastern Europe and some parts of the Mediterranean rim.
World textiles exports are dominated by Asia (primarily East Asia) and Western
Europe. Together these account for more than 80 per cent of the total and garment
exports around 75 percent (Dicken, 2003).

9.6.1 Changing Patterns Of Demand For Textile Products

Demand is a fundamental influence on the size, organization and location of
the textiles and garments industries in different parts of the world. Some 50 per cent
of all textiles production goes to the garments industry, the major influence on the
demand for textiles is the demand for garments. It is the affluent parts of the world
that largely determine the level and the nature of the demand for garments. The
generally low incomes in developing countries clearly restrict the size of their
domestic garments markets. The conventional economic wisdom says that, beyond
the level of basic necessities, demand for garments increases less rapidly than the

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growth of incomes. This poses a major problem for garments manufacturers and
retailers: they need to stimulate demand through fashion change. Enormous
expenditure has gone into promoting fashion products and creating ‘designer’ labels.
Such a practice covers a very broad spectrum of consumer income levels from the
exceptionally expensive to the relatively cheap. Designer labeling is basically a
device to differentiate what are often relatively similar products and to cater to – and
to encourage – the segmentation of market demand for garments (Dicken, 2003).

The Textile Industry in India has gone through significant changes in

anticipation of increased international competition. The industry has been forced to
tailor products to both the domestic and the international market which have
traditionally been quite different. The domestic market has huge potential but is also
very price sensitive whereas the international market tends to favor mass production
while also emphasizing quality service and price of production. India has the ability to
compete on the global scale but it is losing market share to Asian countries that have
cheaper labor, better investment in machinery and capital, and better ocean
transportation options for export to the U.S. While its market share has certainly
increased over the last decade, India still lags behind countries like China that have
seen phenomenal growth in recent years. However, India enjoys a similar comparative
advantage for serving demand in the European Union (Carver Brian, He Christy,
Hister Jonah, 2004).

In today’s fast changing environment the current engines of market growth for
textiles in India are, rising share of working population, higher disposable incomes
with the growing Indian middle class, increase in private consumption, credit
availability, fast changing consumer lifestyles and brand aspirations (Kaul
Vijay,2004). Further there is a rise of disposable income as the average GDP growth
rate is around six percent and people with the higher disposable incomes prefer the
good variety of the clothe and are ready to pay for the high priced products (Mukund
2001, Nagaraj 1998).

9.6.2 Rising Importance Of Cotton Products: Green Is In

There has been tremendous growth in membership of green groups in the
world such as Green peace, Friends of the Earth etc. These people are concerned
about the environment and are willing to pay a premium for goods and services that

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they believe have a reduced environmental impact compared to conventional
products. Today in the corporate world, Triple Bottom Line is used to describe
company accountability not only in financial terms to shareholders and investors but
also in social terms e.g. acceptance by the communities in which the firm operates,
and in environmental terms by assessing the impact on the environment of the firm’s
own activities or the activities of the manufacturing chain which supplies the products
that the firm sells (Easton, R John., 2004).
Consumer expectations of company behavior have increased and not only in
the rich G8 countries but also in many other parts of the world. In a Millennium Poll
in 23 countries 60% of 25,000 consumers said they expected businesses to tackle the
issues of fair labour practices, business ethics and environmental degradation in
addition to delivering profits and jobs. Over the last 10 years the development of
various eco-labelling schemes, designed to assure consumers of the safety and
environmental acceptability of a particular product, has raised the profile of
environmental issues within the textile chain. Recently there has been a rapid uptake
of ISO14001 by manufacturers in Asia as a means of assuring European and
N.American procurement managers of the environmental probity of their operations
(Easton, R John., 2004).
Importance of Cotton and demand for organic products is on a rise and India
being one of the global players needs to look beyond the horizons and expand the
market (Lienert, 2004). The global buyers would not prefer to put their sourcing from
one large country like China. The global buyers would also balance their risk of
sourcing from one country only, therefore demand for Indian textiles will not
diminish so as expected in the post liberalization era (Joshi, 2004). Therefore looking
at the current trends in the market scenario it is quite evident that the Khadi has a lot
of chance as the future market lies in the eco friendly cotton products. Further, Crill
Rosemary (2002) A senior curator in-charge of the textiles collection in the Indian
and South-East Asian Department says: ‘Handlooms can be revived and sustained in
India by the government aggressively creating markets for it within the country and
providing design inputs for weavers’.

9.6.3 Emerging Technologies In Modern Textile Products

As against synthetics fibers which cause environmental degradation, fibers
with renewable raw materials is a futuristic outlook of fiber Industry. Examples of
such clothes are already in vogue like textile fiber from sugarcane rind, soja protein

284
fibers of China, maize fiber, corn fiber including silk from bamboo etc. (Brueckmann,
Ralf., 2004). Further with technological advance clothes prepared to be anti-grease,
wrinkle free, U.V. protected, anti-bacterial, skin-caring substances vitamins like (E,
C) etc. are going to be ‘in thing’ in future.

9.6.4 Importance Of Fashion Designing

Consumers want clothes that mix and match and easy to wear for everyday
work. Fashion has spread to reasonable number of customers, cost is no more a
constraint. Indian designers like the counterparts elsewhere are trying to adapt to
customer’s social and economical realities and have evolved to offer better quality
products at reasonable rates. Further Increased participation of Indian Fashion
Designers in International Fashion Shows is expected to increase Indian Exports too
(Nikam, Sharada., 2004).

9.6.5 The Growing Power Of The Retailing Chains

Within the garments industry, in particular, demand is becoming increasingly
dominated by the purchasing policies of the major multiple retailing chains. In the
United States, big companies such as Wal-Mart, Sears, J.C. Penney, Dayton Hudson
and K. Mart, account for a very large proportion of garments sales, as do Daiei,
Mitsukoshi, Daimaru and Ito Yakado in Japan, in Germany, the leading garments
retailers include Karstadt, Kaufhof, Schickendanz (Badhe, 2004).

Product proliferation and shorter product cycles, reflected in ever-changing

styles and product differentiation, contribute to general demand uncertainty for both
retailers and manufacturers, thereby making demand forecasting and production
planning harder every day. In a world where manufacturers must supply an
increasing number of products with fashion elements, speed and flexibility are crucial
capabilities for firms wrestling with product proliferation, whether they are retailers
trying to offer a wide range of choices to consumers or manufacturers responding to
retail demands for shipments. Further, from the late 1980’s onwards, companies such
as Quello, Otto, Steilmann and Karstadt & Neckarmann, UK retailer Marks &
Spencer etc. developed standards or environmental code of practice encompassing the
whole of its textiles business (Badhe, 2004).

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9.6.6 Changing Textiles Scenario And Implications For Khadi

What are the Implications for Khadi Industry in the changing textile scenario?
Scouller John (1999) feels that, growth of a country involves improving production
efficiency, organizational effectiveness, developing improved products, finding new
markets, finding a new source of supply, or a combination of these things.

Perennial Potential was the phrase used by Martand singh, a well known
scholar involved with crafts and culture in India, these two phrases aptly describe the
handicrafts development in India, and capture the frustrations of those who work in
the related areas. The potential is always and has been, enormous. In the 1990s, for
example handicrafts emerged as a major exportable from India. In eight years, 1993-
2000, the scale of handicraft and handloom exports increased from about Rs.30 billion
to Rs.100 billion (Liebl and Tirthankar Roy, 2003). Khadi also faces similar situation
as other traditional industries though it does not export much.
Marketing strategies adopted by Institutions are quite naïve. The poor
customer turn over in the Khadi bhandars during non-rebate period clearly shows that
Khadi is quite poorly marketed. With growing demand for Green Products, fashion
designing and rise in importance for cotton, Khadi needs to look at these positive
signals and take necessary steps to adapt to the changing market situations. In this
regard steps towards Brand building and creating niche markets for specialised
products of Khadi are components, which cannot be left out. Another step is to
promote Khadi through retail chains. It has two advantages first it saves the burden
and cost of institutions in marketing Khadi. Secondly institutions can now focus on
the production of marketable products.
As there is no pressure on Institutions to innovate and change the product
design. Therefore KVIC needs to be a facilitator in providing improved
design/pattern. Further, KVIC role will be enhanced if large institutions also
undertake initiatives in this product and process innovations. KVIC also needs to tie
up with external agencies involved in this area like NID etc., so that there is an
exchange of ideas and flow of information about changing market scenario.

9.7 Summary And Conclusions

Marketing strategies adopted by Institutions are quite naïve. The amount

allocated to market the product in cost-chart is also meager compared to other

286
handloom textiles. Cost-chart needs to be made more flexible for the institutions to
have the freedom to go beyond the existing limitations to improve the quality and the
salability of Khadi. The only component that requires to be retained is the wage
component to provide decent wages to the artisans. Therefore there is a greater need
for taking up marketing strategies quite seriously and collaboration among
institutions, KVIC Marketing department and state KVIBs is a must for surviving the
onslaught of competition.

Customer survey data revealed that rebate was least important for a regular
buyer of Khadi. What is required is the improving quality and design pattern to suit
the changing customer needs. The sales persons in Marketing Bhandars need to be
trained more professionally to boost the sale of Khadi. Further, regular in-depth
surveys of customers to upgrade the sale of Khadi is the need of the hour.

Marketing linkages are found to be poor among the artisans, institutions and
KVIC as the information flow regarding changing consumer tastes, designs and
competition is almost absent. This aspect needs further strengthening. It is imperative
for Khadi to rationalize its product range from 5000 to a manageable number so that
the objective of Khadi i.e. production of ‘salable products’ is achieved.

The cloth quality checking and standardization norms followed by the KVIC
units are quite rudimentary and poor. If KVIC is to shift focus to the urban and niche
markets in India and abroad, then quality is going to be very important to them.
Following the quality standard or norms set by ATIRA or any other agency would be
a good step forward in this regard. Introduction of power can solve the problems of
evenness of clothe in the spinning stage. Further, innovation and improvement in the
implements of weaving like putting a jack-up-motion on the frame-loom, which
increases the evenness and quality of cloth etc., would also be very helpful in
improving quality.

It was found that most of the institutions were not aware of any R & D activity
undertaken by the KVIC indicating that there exists information dissemination
bottleneck between KVIC and the institutions. Many institutions have never
introduced any innovation in quality, design or pattern, as there is no pressure to
innovate. But there is a lot of time lag between innovation and actual implementation
and that too mostly irregular. Therefore KVIC needs to be a facilitator in providing
improved design/pattern. Further, KVIC role will be enhanced if large institutions

287
also undertake initiatives in product and process innovations. KVIC also needs to tie
up with external agencies involved in this area like NID etc., so that there is an
exchange of ideas and flow of information about changing market scenario.

With growing importance of Green Products, fashion designing and rise in

importance for cotton, Khadi needs to look at these positive signals and take
necessary steps to boost its quality and salability of the product. In this regard steps
towards ‘Brand building’ and creating niche markets for specialised products of
Khadi are components, which cannot be left out. Another step is to promote Khadi
through ‘retail chains’. It has two advantages first it saves the burden and cost of
institutions in marketing Khadi. Secondly institutions can now focus on the
production of ‘marketable products’.

288
 Annexure 9 - Marketing

Annexure 9.1: Education wise Distribution of Customers.

Sr.
Education Level Percent
No.
1. Primary 40

2. Middle 6.7

3. Secondary 13.3

4. H.S.C. 16.0

5. Graduate 38.7

6. Post Graduate 17.3

7. Any other 4.0

Total 100.0

Source: For the following Tables is Customer’s questionnaire.

Annexure 9.2: Occupation wise Distribution of Customers.

Sr.
Occupation list Percent
No.
1. Service 46.7

2. Business 18.7

3. House-wife 16

4. Unemployed 1.3

5. Any other 12

6. Student 5.3

Total 100.0

Annexure 9.3: Monthly Income wise Distribution of Customer.

Sr.
Income Range Percent
No.
1. Less than 2000 2.9

2. 2000-5000 22.1

289
 3. 5001-10000 33.8

4. 10001-15000 13.2

5. 15001-20000 5.9

6. 20001 & above 20.6

7. No reply 1.5

Total 100.0

Annexure 9.4: Advantages of Wearing Khadi.

Sr.
Reasons Expressed Percent
No.
1. Comfort/texture 22.7

2. Looks unique/status 6.7

3. Soaks sweat 25.3

4. Easy washing 1.3

5. Gandhi principles 5.3

6. No reply 5.3

7. For comfort and status 10.7

8. Looks unique and durable 2.7

9. For comfort and easy washing 2.7

10. Durable and giving justice to artisans art 1.3

11. Soaks sweat and for helping artisans 1.3

12. Good to wear and soaks sweat 2.7

13. Looks unique and Handmade 2.7

Good to wear, looks unique and
14. 1.3
handmade
15. For comfort, soaks sweat and durable 1.3

16. Comfortable and durable 2.7

17. Good to wear and handmade 1.3

18. Silk quality 1.3

19. Silk quality is good, its available on 1.3

290
 credit

Total 100.0

Annexure 9.5: Disadvantages in Wearing Khadi.

Sr.
Reasons expressed Percent
No.
1. Nothing 28.0

2. Bad/rough finish 5.3

3. Need maintenance 14.7

4. No range/patterns 6.7

5. Not durable 10.7

6. Expensive 9.3

7. No reply 8.0
No variety in colour and no good quality of
8. 2.7
material
9. Costly maintenance and non durable 2.7

10. Uneven cloth, weak structure 1.3

11. Uneven cloth and not good colours 2.7

12. Not easy accessible 2.7

13. Sometimes defective and expensive 1.3

14. Needs maintenance and expensive 1.3

15. Expensive and material quality not good 1.3

No variation in pattern/design and
16. 1.3
expensive
Total 100.0

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Annexure 9.6: Will the Customers Visit the Bhandars if it is Located Conveniently?

Sr.
Reasons Percent
No.
1. Yes 44.0

2. No 20.0

3. No reply 13.3

4. NA 22.7

Total 100.0

Annexure 9.7: Are the Customers Satisfied with Price of Khadi?

Sr.
Percent
No.
Price is Very high/Should be
1. 57.3
less priced
2. No reply 9.4

3. Yes/Ok 33.3

Total 100.0

Annexure 9.8: Are the Customers Satisfied with Quality of Khadi?

Sr.
Reasons expressed Percent
No.
1. Poor/can be improved 38.7

2. Maintenance of clothe high 1.3

1+2 (Quality can be improved and
3. 1.3
maintainance not affordable)
4. No reply 6.7

5. Yes/Ok 52.0

Total 100.0

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Annexure 9.9: Suggestions for Making Khadi Popular?

Sr.
Reasons Expressed Percent
No.
1. Advertisement 6.7

2. Reduce price 9.3

3. Marketing 2.7

4. More range/variety 20.0

5. Mix tericot 1.3

6. A combination of all the above five 58.7

7. More rebate 1.3

Total 100.0

Annexure 9.10: Percentage Distribution of Khadi Users from Different Years.

Sr. When did you start wearing Khadi (in

Percentage
No. Years)
1. 1-5 14.9

2. 6-10 22.4

3. 11-15 13.4

4. 16-20 6.0

5. 21-25 4.5

6. 26-50 3.0

7. Sometimes ago 3.0

8. Many years ago 9.0

9. Since childhood 20.9

10. Actual no. of customers 69.0

11. Percentage 100%

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Annexure 9.11: Frequency of Visits to Khadi Bhandars Among Different
Income Groups of Customers. (percentage)

How often do Monthly Income of Customers in Rupees

you visit 2000 10,001 20,001- Actual no. of
>200 5001- 15001-
Khadi 1- - & customers
0 10,000 20,000
Bhandar 5000 15,000 above and % within
21
Once in a year -- 14.3 47.6 14.3 14.3 9.5
(30.4)
Twice in a 15
6.7 20.0 33.3 6.7 - 26.7
year (21.7)
Thrice in a 2
- - 50.0 50.0 - -
year (2.9)
27
Four & above 3.7 37.0 22.2 7.4 7.4 22.2
(39.10)
When I visit
2
India (foreign - - - - - 100
(2.9)
customers)
Actual no. of
2 16 23 8 5 14 69
customers
Percentage
(2.9) (23.2) (33.3) (11.6) (7.2) (20.3) (100%)
within

294
Annexure 9.12: Frequency of Khadi Use Among different Income Groups of
Customers.
(percentage)

Monthly Income of Customers in Rupees

How often do
you wear 2000 10,001 20,001- Actual no. of
>200 5001- 15001-
Khadi 1- - & customers and
0 10,000 20,000
5000 15,000 above % within
32
Occasionally - 15.6 34.4 12.5 9.4 25.0
(46.40)
6
Regularly 16.7 33.3 16.7 16.7 - 16.7
(8.7)
18
Often 5.6 44.4 11.1 5.6 5.6 27.8
(26.1)
5
Sometimes - - 60.0 20.0 20.0 -
(7.2)
Gifting to 1
- - - 100 - -
Someone (1.4)
For first time 1
- 100 - - - -
wearing Khadi (1.4)
Only in 2
- - 100 - - -
Summer (2.9)
Actual no. of
2 16 23 8 5 14 (69)
customers
Total
2.9 23.2 33.3 11.6 7.2 20.3 100%
percentage

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Annexure 9.13: Income wise Distribution of Customers Buying Khadi During
Rebate Period. (figures in percentage)

Monthly Income of Customers in Rupees

When do you
2000 10,001 20,001- Actual no. of
buy Khadi >200 5001- 15001-
1- - & customers and
0 10,000 20,000
5000 15,000 above % within
30
Rebate period 3.3 30.0 43.3 10.0 3.3 6.7
(43.5)
Non-Rebate
- - - - - 100 1(14)
period
All times/12 36
2.8 19.4 27.8 8.3 11.1 30.6
Months (52.2)
Rebate + Non- 1
- - - 100 - -
rebate period (1.4)
Actual no. of
2 16 23 8 5 14 69
customers
Percentage
2.9 23.2 33.3 11.6 7.2 20.3 100
within

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Annexure 9.14: Type of Cloths Customers Prefer to Wear. (Percent)
Type of cloths Male Female

Jeans/T-shirts 14.3 --

Formal 31.0 3.0

Sarees 4.8 36.4

Salwar kameez -- 33.3

Kurta paijama 2.4 --

Traditional 11.9 --

Saree and salwar kameez - 18.2

Formal and kurta paijama 9.5 --

Jeans and salwar kameez -- 6.1

Formal, salwar kameez, sarees -- 3.0

Jeans, Formal 4.8 --

Formal, Traditional 9.6 --

Kurta, Traditional 2.4 --

Jeans, Kurta, Traditional 2.4 --

Formal, Shorts 4.8 --

Sarees, Traditional -- 10.0

Annexure 9.15: Opinion About Why Khadi Cannot Substitute Normal Clothe.
(Percent)
Reasons Male Female

No range, variety in Khadi 19.0 12.1

Very expensive 4.8 18.2

Not durable/poor quality 4.8 --

No range/poor quality -- 3.0

Needs maintenance 4.8 15.2

No range, needs maintenance 2.4 --

No response/Not applicable 64.2 51.5

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Annexure 9.16: Opinion About Why Khadi Can Substitute Normal Cloths.
(Percent)
Reasons Male Female

Comfort/good texture 9.5 12.1

Soaks sweat 4.8 3.0

Durable, quality 2.4 9.1

Comfort and durable 2.4 3.0

Good colour -- 6.1

Gandhian philosophy behind Khadi 4.8 --

Comfort, good colour -- 3.0

Comfort and soaks sweat -- 3.0

No response/Not applicable 76.2 60.6

Annexure 9.17: Customer’s Tendency of Wearing Khadi.

(percent)
Tendency of wearing Khadi Male Female

Occasionally 33.3 66.7

Regularly 11.9 6.1

Often 33.3 12.1

Sometimes 10.9 15.1

First time wearing 4.8 --

Only in summer 4.8 --

Annexure 9.18: Type of Khadi Preferred by Customers.

(percent)
Kind of Khadi Male Female

Cotton 47.6 24.2

Silk 9.6 9.4

Polyvastra 9.5 --

Cotton and silk 21.4 62.6

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 Cotton and polyvastra 9.5 --

Wool and cotton 2.4 --

Wool, cotton and silk -- 3.8

Annexure 9.19: Difference Between Khadi and Other Fabric as Perceived by

Customers. (Percent)
Particulars Male Female

Other fabric cheap 2.4 18.2

No range 4.8 6.1

Costly, more variety in other fabric 4.8 6.1

Khadi not durable 4.8 3.0

Khadi is more comfortable 23.8 12.1

Handmade, good gesture 26.2 27.3

Khadi not durable and expensive 19.0 27.3

Khadi silk good 2.4 --

Khadi has great feel 4.8 --

Cannot compare 2.4 --

Annexure 9.20: Reasons Mentioned by Customers for Wearing Khadi. (Percent)

Reasons Male Female

As a fashion 16.7 23.8

Gandhian ideology 16.7 --

Like Khadi 4.2 19.0

More comfortable 12.5 14.3

Durable 4.2 --

Looks unique and durable 4.2 --

To help artisans 8.3 --

During political events 4.2 9.5

Good to wear, looks unique -- 4.8

Easy washing 8.3 --

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 Traditional 4.2 --

Other reasons 16.5 28.6

Total 100.0 100.0

Annexure 9.21: Customer's Tendency of Visiting Khadi Bhandars. (Percent)

Time Male Female

Once in a year 28.6 33.3

Twice in a year 14.3 30.3

Thrice in a year 4.8 --

Four times in a year 45.2 30.3

Whenever visit India 4.8 3.0

Rarely 2.4 3.0

300