XAVIER INSTITUTE OF SOCIAL SERVICE

A PROJECT REPORT ON
“A STUDY OF THE MARKETING PRACTICES OF
JHARCRAFT”

UNDER THE GUIDANCE OF PROF. A. R. BODRA

[H.O.D, Department of Marketing Management, XISS Ranchi]

SUBMITTED
BY;
AAKASH BARA (04)
DEEPAK TOPPO (05)
AMAN MANISH LAKRA (07)
AMLAANCHATTERJEE (08)
 ABHIJEET JOHN TOPPO (11)
NAVNEET TIWARY (48)

ACKNOWLEDGEMENT
It gives us immense gratification to place on records our gratitude and
sincere appreciation to each and every one of those who helped us in this
endeavor. We extend our deep gratitude to the management of “Jharcraft”,
who allowed us to carry on this study on their organization. We would like
to extend our special thanks to Miss. Archana Shephali Kongari
(Marketing Manager) and other support staff at the various retail outlets of
Jharcraft, who answered our queries sparing some time from their busy
schedule.

We would also like to extend our sincere thanks to our esteemed faculty &
guide, Prof. A. R. Bodra for his continuous guidance, magnificent support
& cooperation to initiate & carry out the study & illuminated us through
his knowledge. I humbly acknowledge his affectionate guidance & constant
encouragement. He guided & mentored us throughout and helped us to
the best of his knowledge in carrying out this study.

Last but not the least, we would again like to thank all the people who
helped us in carrying this study in some way or the other & any omission in
this brief acknowledgement does not mean lack of gratitude.

Date: 10th March, 2013

GROUP MEMBERS
AAKASH BARA (04)
DEEPAK TOPPO (05)
AMAN MANISH LAKRA (07)
AMLAANCHATTERJEE (08)
ABHIJEET JOHN TOPPO (11)
NAVNEET TIWARY (48)

PLACE: RANCHI
 EXECUTIVE SUMMARY
The project of MARKETING IN PRACTICE “A study of the Marketing
practices of Jharcraft” was initiated to study the marketing & various
distribution and Taxes system made by Jharcraft along with the market
potential of their products market.
The project delves deeper and is illustrated with flowcharts and
diagrams, how the overall process is accomplished i.e. from the sourcing of
raw materials till the final delivery of the product. The information collected
is ascertained with the financial implications to get a holistic view of the
organization and its various functions.

The project was carried out with the objective of trying to learn how a retail
format, such as Jharcraft under a government works along with its core
competencies. Their business model, their logistics and supply chain, their
methods of procurement of raw materials and their profit sharing and value
delivery process along with the tax system.

On conducting the project, many interesting inferences were brought into

light. The project report consists of many such observations and enquired
approached to the various facets of rural marketing.

There were several learning about the intricacies about the store layout,
their business model, their competitors, their target consumers, their
customer and brand loyalty building activities and most of all their profit
sharing objectives.
 INTRODUCTION
Jharkhand Silk Textile and Handicraft Development Corporation Ltd.
(JHARCRAFT) is a govt. of Jharkhand undertaking under Industry
Department and is registered under section 26 under Companies Act. 1956.
It was incorporated in the year 23rd August 2006. It was established to
develop and support sericulture farmers, weavers and artisans living in
remote areas of Jharkhand. The organization is entrusted with the role of
implementation of the Government funded schemes to promote Tasar
Silk, Handloom and Handicraft of the state.

Jharkhand is well known for Tasar Silk production. The process of making
Tasar silk is similar to the production of the mulberry silk. Tasar Silk is
produced in the districts of West Singhbhum, East Singhbhum, Seraikela,
Dumka, Deoghar, Pakur, Godda, Dhanbad, Sahebganj, Palamau, Garhwa
and Simdega.

Sensing the potential of silk government of Jharkhand, took many steps for
the development of this sector. The first step was to organize Tasar silk
production. Now the state is the leading producer of Tasar silk in the
country.
 TREND IN GROWTH INDEX OF NON-MULBERRY SILK IN
INDIA
 FACTORS INFLUENCING PURCHASING DECISION OF HANDLOOM
AND HANDICRAFT ITEMS:
100%
99%

90%
70%
50%

40%
q u al i t y d esi gn av ai l ab i l i t y price v ar i et y b r an d

 PRODUCTS GENERALLY DEMANDED IN DIFFERENT OUTLETS

70%
61%
60% 56%
52%
50% 45%
43%
40%
30% 28%

20%
10%
0%
sarees suit pieces cotton apparels material kurta ethinc wear
  PREFERENCE OF CUSTOMERS FOR PURCHASING HANDLOOM
AND HANDICRAFT PRODUCTS

state handlooms other

6% 4%
haats
10%

malls
80%

ABOUT JHARCRAFT

The state government of Jharkhand with its department of industry took a

very keen interest in providing a platform to all the traditional rural artisans
of the state. To promote the richest ethnic traditions of the state in our
country and abroad and act as a facilitator for the rural artisans, the state
government formed- Jharkhand Silk Textile & Handicraft Development
Corporation Limited (JHARCRAFT). Jharcraft was started, in the year 2006,
as an organization to create new opportunities in the rural areas and
promote the cotton textiles, silk textiles, jute products, woolen textiles,
readymade garments, hand- crafted textiles, cane and bamboo products,
etc. and to revive the unique culture expressions of the state and its people.

MISSION OF JHARCRAFT - 'CREATING OPPORTUNITIES & CHANGING LIVES'.

The main objective of Jharcraft is to provide a marketing place for the

merchandise manufactured by the local artisans, SHG’s, & NGO’s. The
organization also provides all types of support in terms of finance, raw
materials, design assistance, marketing, etc. The organization pays major
attention that the local artisans and unprivileged section of the state get
maximum benefit through Jharcraft.
VISION OF JHARCRAFT - JHARCRAFT: A STRONG BACKBONE OF THE
JHARKHAND STATE'
EXISTING COMPETITORS

 FABINDIA: Its primary competitor and have a national presence along

with an established brand name.
 TRIFED: The Tribal Cooperative Marketing Development Federation
of India Limited (TRIFED) is one its kind like Jharcraft (at times in
collaboration with Jharcraft) has is predominantly dominant in a few
pockets of India.
 SMALL NGO’S AND SHG’S: They are an existent threat in the
penetration of Jharcraft albeit on a smaller scale.

PRODUCT LINE OFFERED AT STORES

 TASAR SILK
 DHOKRA ART
 WOOD CRAFT
 LEATHER CRAFT (VEGETARIAN LEATHER)
 BAMBOO FURNITURE
 CANE FURNITURE
 SILVER JEWELLERY
 PAPER CRAFTS
 HAND EMBROIDERIES (KANTHA, ZARDOSI, SATIN STITCH)
 PAINTINGS(SOHRAI,KONBER,JADPATIA)

BUSINESS MODEL

The model practised in Jharcraft is an end to end model without the

involvement of intermediaries. Jharcraft primarily functions in four domains,
i.e. Sericulture, Handicrafts, Handlooms and Rural Marts. The entire
business of Jharcraft is based on the working of:

1. SELF HELP GROUPS

2. NGO’S
3. ARTISANS AND WEAVERS
 Everything from raw materials procurement till the final delivery to the
consumer is watched over by Jharcraft. The raw materials are procured
either from the in house farms (for silk) or is sourced cheaply from
respective suppliers or government organizations and passed on to the
clusters (a group of villages in a particular and well defined area).They
ensure that they get the raw materials of the finest quality. The price of
raw materials are paid by the clusters (overseeing by a project manager)
to Jharcraft and henceforth the manufacturing process (in accordance
with the skill sets and training provided by Jharcraft) takes place They
are then handcrafted and the products are bought from these self-help
groups allowing a profit to the workers. The final/finished products are
again bought in by paying a price {i.e. Cost price of raw materials +
labor charges + price premium (if any)} adequate for the rural people.
This is where the role of these artisans and weavers end. The procured
finished products are then transferred to the corporate office where they
undergo quality checks and are finally transferred to the various retail
outlets located across the country and world-wide. The retail outlets are
company ones with the standards and the shop outlook set by the
designers from the company.
OWN SHOWROOMS

TRIFED

SHOPPERS STOP

EXIM BANK

EXHIBITIONS

VILLAGE PROJECT
CLUSTERS MANAGE
JHARCRAF
R T

SELF RELIANT

GOVT.
AGENCIES

NGO’S/ SHG’S
 ARROW DEMOTION

PROCUREMENT OF RAW
FLOW OF FINISHED PRODUCTS

The sericulture forms a very important part of their operations and they
particularly specialize in Tasar silk form. They are involved in every step of
silk manufacture and make sure that the silk of highest quality is obtained
each time. The raw silk obtained is then sent to reeling, spinning and
threading unit where silk is finally made.

If a product is being made for Rs 15 a middle man or other competitors

would buy that product for Rs 16 and sell it for Rs 20. However Jharcraft is
a Jharkhand government initiative and they buy the same product for Rs 17
from the artisans and weavers and sell it for Rs. 18. Hence operating at a
very low margin.

Retail marts are set up in various villages to make rural consumers aware
about the product and about various brands available in the urban markets.
It is an attempt to generate brand awareness among the rural consumers
and make them brand conscious. The marts are generally situated in the
interior areas of the village and cater to a particular village. However they
also supply to a few local retailers that open their shops on highways to
make accessibility for other villages nearby easier.

LOGISTIC MODEL

Their training units are located in Kharsawa, Bhagaiya and Godda. The
manufacturing units are located in zones all over Jharkhand include
Hazaribagh, Jasidih, etc. from these zones products come to Ranchi to
their corporate office to undergo quality checks and as per the order the
products are then sent to the various retail outlets and then to the end
consumers.
Since, raw material procurement is done by Jharcraft itself, so the flow of
goods takes place in the following way.

MOVEMENT OF HANDICRAFT PRODUCTS

RAW MATERIALS HEAD OFFICE

(BAKSAR, RAW MATERIALS (RANCHI)
KHARSAWA ETC.)

F
I
R
N
A I
W S
M E
A D
TE G
RI O
O
A
LS HANDICRAFT D
S
A
CLUSTERS

EMPORIUM
, FAIRS,
ETC

OBSERVATIONAL ANALYSIS & INFERENCES FROM OUTLETS

The following information was collected through observations at the
Jharcraft retail outlet located at Main road, opposite Big Bazaar.
STORE LAYOUT CONSISTS OF FOUR FLOORS
 FIRST FLOOR CONSISTS OF MALE SHIRTS AND KURTAS.
 SECOND FLOOR OF FURNITURE AND HOME DECORS.
 THIRD FLOOR OF HANDICRAFT AND PAINTINGS
 FOURTH FLOOR OF APPARELS MALE AND FEMALE.

SAMPLE OUTLAY FORMAT

SILK SAREES LINEN SHIRTS COTTON RECEPTIO

(TASAR) SHIRTS N

D TIES WALLETS D
O O
O O
R R

SILK KURTAS & LINEN KURTAS COTTON KURTAS

SHIRTS

INTERPRETATION OF THE LAYOUT

 The door was situated on the right of the showroom. As the
consumer enters the shop his first line of view would hence be
towards the left hand side.
 The first thing hence which falls on the sight of consumer would be
the silk shirts & sarees. This tells us two things. Silk shirts & sarees are
 probably the most costly apparels that are available in the shop
hence they want the attention of the consumer to first fall on the
highest cost and finest quality products. Hence increase their
probability of sale.
 On the right hand side are the kurtas. This shows that the store is in
line with modern trend but also has deep rooted culture calling.
 The reception is towards the inside which is probably a very good
thing as far as telling the consumer that we are more interested in
providing quality products to the consumer and not in earning
profits.

MARKETING CHANNELS

DISTRIBUTE EXCISE DUTY COMPANY WAREHOUSE

Manufacturing by COTTON, SILK &

the NGO&LOCAL WOOLEN TEXTILES,
ARTISIANS HANDICRAFTS, SOAP,
AGARBATTI, FURNITURE,
MUSIC INSTRUMENTS,
ETC

CENTRAL
SALES
TAX
Manufacturing BY THE
SHG

COMPANY OWNED COMPANY OWNED COMPANY

OUTLET (MUMBAI) OUT LET (RANCHI) OWNED OUTLET
(DELHI)
 VAT@ 14%

Customer
Customer
Customer Customer

DISTRIBUTION CHANNEL
 Jharcraft uses forward as well as backward integration strategies in
their distribution channel to reach their customers
 Reducing the intermediaries has one of the major objectives of this
organization to increase their profit margin
 Barring out the wholesalers from the system creates an effective and
efficient distribution channel
 Now to increase their reach create a brand awareness into the minds
of the customer Jharcraft has its own exclusive outlets in all the major
cities
 This short distribution channel prevents from shortening the gap
between the supply and demand gap
 Backward integration gives it a leverages from procurement of raw
material to the finished products with less lead time
 Forward integration benefits to create the right positioning into the
minds of the end customers with help of met market & met space
 This company owned outlets does work as a below the line
advertisement equipment
 The company uses a selective distribution strategy

SELECTIVE STRATEGY
NO OF OUTLETS MANY
OUTLETS FEW
PRICE MEDIUM
 TYPE OF PRODUCT SPECIALITY
PURCHASE FREQUENCY OCCASSIONALLY
PLANNING REQD OF BUYER MEDIUM