PROJECT REPORT ON ´A STUDY ON SALES AND DISTRIBUTION SYSTEM OF MAHAK·S CHAINI-KHAINI IN MUMBAI REGION (WHOLLSALLER AND RETAILER

)µ UNDER THE GUIDANCE OF Mr. Kailash Gupta AREA SALES MANAGER, MUMBAI Submitted to

In Partial Fulfillment Of MASTER OF MARKETING MANAGEMENT Submitted by ROHIT JAISWAL
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Table of Contents
CHAPTER DESCRIPTION PAGE NOS.

1. 2. 3.

ACKNOWLEGMENT EXECUTIVE SUMMARY COMPANY PROFILE

3 4 6

4. 5. 6.

INDUSTRY PROFILE SCOPE & OBJECTIVE OF PROJECT WORK RESARCH METHODOLOGY

8 54 55

7. 8. 9. 10. 11. 12.

DATA ANALYSIS & INTERPRETATION FINDINGS COMPLAINT, LIMITATION RECOMMENDATION CONCLUSIONS BIBLIYOGRAPHY

61 73 74 75 76 77

13.

QUESTIONNAIRE

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ACKNOWLEGEMENT

Determination, co-operation and guidance are essential ingredients to make any project successful. I was very lucky enough to all of the above in RAYMOND PREMIUM APPAREL. In my endeavour to learn basic of management, I would like to thank RAYMOND for providing me an opportunity to work with their sales division, VARANASI. The synergetic effort of the department and the people working in an organisation, results in an exponential success of the organization. The project that I did is also an outcome of the efforts of department and the people working in RAYMOND. The guidance of marketing department helped me to understand the actual position of READYMADE GARMENT market and segment. It has been a sheer pleasure and honour to work for such a great organisation. I would like to thank the management for providing me this opportunity. It was a matter of privilege to work under the guidance of Mr. DHAVAL PRAKASH (store manager), my project guide. I would like to thank him for without his constant guidance, co operation and help, this project would not have been such a huge success. He was always there to provide me with necessary inputs and keeping me motivated during the project despite his busy schedules. I am very thankful to my project guide Mr.Nirmal Kant Verma, who helped me to relate the theoretical aspects of the subjects with the practical field.

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EXECUTIVE SUMMARY

The fast moving consumer goods (FMCG) industry is one of the core industries in Indian economy, whose prospect is reflective of the economy. With the liberalization of the economy, India has become the playground of major global tobacco manufacturers. This report provides extensive information¶s on the khaini segment in general and the potential market for tobacco under this segment in particular. The survey is carried out in the Mumbai region. Tobacco is grown in more than 100 countries. China is the world¶s leading producer. Other principal suppliers are the United States, India, Brazil, Turkey, Zimbabwe and Malawi. Tobacco products are consumed all over the world. Most tobacco is used for smoking. Tobacco is the essential ingredient for cigarettes, pipes, cigars, roll-yourown, bidis, and kretek cigarettes. Tobacco is also used for smokeless tobacco such as snuff and chewing tobacco. Over 80 per cent of world tobacco is used for cigarettes The FMCG industry in India is gradually evolving to replicate those of developed countries. The report focuses on the trends that are emerging in the industry. It is primarily dealing with the tobacco (Khaini ,snus) segment. The qualitative analysis of various trends reveals that the industry offers immense scope and there is great prospect of its growth in the near future. Mahak is already a market leader in khaini segment. There are a lot of scope for growth. As a background, a brief prospective of the various government policies is also given that helped the tobacco sector. The factors that drive the demand across segment have been pictured. The report also includes a brief history of Mahak. The total quality management and the human resource aspect of the company is also taken into account to better understand the company. The research methodology adapted for this project is questionnaire method. A survey was carried out covering the retailer and wholesaler , for the product. Analysis obtained from the information of the survey helped to understand customer behaviour and the various problem faces by them. A marketing plan was formulated to promote the product. The marketing plan outlined the various steps to be taken to create awareness among the respondent.
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Sanjay gupta who was there for helping me day in and day out. Sales of the product is also very good. INTRODUCTON TO THE TOPIC Exploring to the new topic seem to be the latest mantra in the tobacco industry. Distribution system played very important role. One who gives that service batter they will going to that product. They want the product very frequently. Mr. Mumbai. Distribution system played important role to increase the sale and this will also give satisfaction of their customer. Kailash gupta. Specially Mr. Customer prefer that company¶s product who give better service. The peroduct chaini-khaini was coming before eight years and market share of the product is vey high in comparison of competitor. Vinay and Mr. During my project I got full support from them and enjoyed working with them. 5 . Promotion of the tobacco product is very hard because how you will promote the product of tobacco every person know that tobacco is injurious for health. The work culture is quite pleasant here and people are hard working and co-operative. I am also very thankful to each and e very individual at Mahak Chaini-Khaini.Short term and long term action plans were also suggested to help the company in creating the awareness of the product as well as the company. If service of the company is good customer will happy and they take interest in product with the help this product capture the market very easily .

LatestTechnology Our factories are equipped with the latest machines from German.we guarantee that every product has passed through strict quality control standards 6 . Harsh International operates primarily in the India. and distributing. Finest ingredient At Harsh International we belive that the product begin with the finest ingredients the best local and important ingredients are used on all our products to meet our customer¶sdiscriminatingtaste. utili ing the latest technological processed to ensure you get only products of world ±class quality. which manufacture and markets a range of tobacco product and snus.Company profil Harsh i t rnati nal a company under Mahak Group of companies is leading tobacco manufacturing company located in New Delhi ndia. storing. The company is manufacturer of tobacco products. shipping. The Company is also involved in the distribution of tobacco and other products in certain markets in Asia and South Africa.The Company's business involves processing. as well as importing and exporting a number of tobacco products.

Water Menthol. Lime. Spices Contains Added Flavour.  Only the choicest Indian tobacco is encased in the filter pouches of chaini khaini.6 g When packed Best Before : 6 Months Packing : 10 FILTER TOBACCO POUCH READY TO USE  Available in two convenient sizes (big & small) and six exciting flavours: Mint Green Apple Cinnamon Lemon Cardamom Strawberry 7 .  In addition to the finest Indian tobacco. Oil.Product profile  To augment and achieve benchmark safety the filter pouches of chaini -khaini are manufactured with German Technology.  For additional freshness and authentic flovour . the pouches are laminated by a special processing technique. Net Weight : 3. chaini -khaini contains menthol. spices and selected and selected natural herbs which give a unique flavor to its formulation INGREDIENTS Tobacco.

most tobacco grown in the US was fire-cured dark-leaf. or cigar. it is cured by smoke from open fires. pipe. nicotine goes into our bloodstream. This means that when we use tobacco. or sniff tobacco. Because nicotine is a stimulant. chew. and as a condiment in pipe tobacco blends. It can be chewed (called smokeless tobacco or chewing tobacco) or sniffed through the nose (called snuff). tabacum. The nicotine in tobacco makes it a drug. It also makes the heart beat faster and raises blood pressure. The leaves are cured and smoked over smoldering fires of local hardwoods and aromatic shrubs in Cyprus and Syria. Once we smoke. it is grown in northern middle Tennessee. Nicotine is one of the more than 4. central Kentucky and in Virginia. Prior to the American Civil War.Industry Profile INTRODUCTION OF TOBACCO Tobacco? The word "tobacco" is thought to derive from the Native American word "tabago. It can be smoked in a cigarette. After it is picked. Brightleaf is commonly known as ³Virginia tobacco´. Fire -cured tobacco grown in Kentucky and Tennessee are used in some chewing tobaccos. ground up. leafy plant that is grown in warm climates. it speeds up the nervous system. Another fire -cured tobacco is Latakia and is produced from oriental varieties of N. It is the chemical that makes tobacco addictive or habit forming. moist snuff. and used in different ways. it changes our body in some way. it is dried. In the United States."Tobacco is a green. Bri tleaf tobacco. so we feel like we have more energy. and our body wants more. some cigarettes. This type of tobacco was planted 8 . Types of tobacco There are a number of types of tobacco include but are not limited to: Aromatic Fire-cured. often regardless of which state they are planted.000 chemicals in cigarettes and its smoke.

. Brightleaf Burley tobacco . Greece. Virginia. It was. and Burley and is most commonly used for pipe tobacco and cigars. is a sun-cured. is an air-cured tobacco used primarily for cigarette production. Criollo tobacco is a type of tobacco. primarily used in the making of cigars. small -leafed variety (Nicotiana tabacum) that is grown in Turkey. In the U.in fertile lowlands. Oriental 9 . Most Canadian cigarettes are made from 100% pure Virginia tobacco. burley tobacco plants are started from palletized seeds placed in polystyrene trays floated on a bed of fertilized water in March or April. by most accounts. used a robust variety of leaf. Bulgaria. and herbs for smoking in a midwakh. Cavendish is more a process of curing and a method of cutting tobacco than a type of it. is a tobacco of Iranian origin mixed with leaves. Cavendish can be produced out of any tobacco type but is usually one of. Oriental tobacco . The processing and the cut are used to bring out the natural sweet taste in the tobacco.S. highly aromatic. and Macedonia. bark. Dokham. and was either fire cured or air cured. or a blend of Kentucky. one of the original Cuban tobaccos that emerged around the time of Columbus.

Shade tobacco . A farmer called Pierre Chenet is credited with first turning this local tobacco into the Perique in 1824 through the technique of pressure -fermentation. including a devastating hailstorm in 1929. g iven the value of the land to real estate speculators. the freshly moist Perique was also chewed. its main use is in blends of pipe and especially cigarette tobacco (a typic al American cigarette is a blend of bright Virginia. Many of the early brands of cigarettes were made mostly or entirely of Oriental tobacco. Considered the truffle of pipe tobaccos. but is too strong to be smoked pure. In 1865. It is typically blended with pure Virginia to lend spice. burley and Oriental).tobacco is frequently referred to as ³Turkish tobacco´. Ohio planted Red Burley seeds he had purchased. strength. and coolness to the blend. as these regions were all historically part of the Ottoman Empire. even though the Puritans referred to it as the ³evil weed´. George Webb of Brown County. Early Connecticut colonists acquired from the Native Americans the habit of smoking tobacco in pipes and began cultivating the plant commercia lly. and found that a few of the seedlings had a whitish. is cultivated in Connecticut and Massachusetts. and an epidemic of brown spot fungus in 2000. Shade tobacco White Burley. but is now in danger of disappearing altogether. it is used as a component in many blended pipe tobaccos. today. \Perique . At one time. but none is now sold for this purpose. The industry has weathered some major catastrophes. sickly look. 10 . The air-cured leaf was found to be more mild than other types of tobacco.

and parts of South America. 11 . Ohio Y1 is a strain of tobacco that was cross-bred by Brown & Williamson to obtain an unusually high nicotine content. Harvested white burley in Cincinnati. It became controversial in the 1990s when the United States Food and Drug Administration (FDA) used it as evidence that tobacco companies were intentionally manipulating the nicotine content of cigarettes. Mexico.Wild Tobacco. is native to the southwestern United States. Its botanical name is Nicotiana rustica.

Native Americans smoked tobacco through a pipe for special religious and medical purposes. grew tobacco.000 cigarettes a day. It was not until James Bonsack invented the cigarette -making machine in 1881 that cigarette smoking became widespread. Others smoked it occasionally in a pipe.S. In 1612 the settlers of the first American colony in Jamestown. cotton. and Italy to North America. Spain. They named it the American Tobacco Company. people smoked about 40 cigare ttes a year. many people had begun using small amounts of tobacco. and soya beans. The Mayan Indians of Mexico carved drawings in stone showing tobacco use. Bonsack's cigarette machine could make 120. 12 . Tobacco was grown by American Indians before the Europeans came from England. The first brand of cigarettes were packaged in a box with baseball cards and were called Duke of Durham. Buck Duke and his father started the first tobacco company in th e U. or they hand -rolled a cigarette or cigar. James "Buck" Duke.History of Tobacco Tobacco has a long history in the Americas. France. Tobacco helped pay for the American Revolution against England. Other cash crops were corn. It was their main source of money. By the 1800's. Virginia grew tobacco as a cash crop. These drawings date back to somewhere between 600 to 900 A. Tobacco was the first crop grown for money in North America. His hand-rolled cigarettes were sold to soldiers at the end of the Civil War. Also. the first President of the U. They did not smoke every day.D. North Carolina. They built a factory and made 10 million cigarettes their first year and about one billion cigarettes five years later. wheat.S. Some chewed it. He went into business with Washington Duke's son. sugar. The first commercial cigarettes were made in 1865 by Washington Duke on his 300 -acre farm in Raleigh. On the average.

They make millions of dollars selling cigarettes in the U. They were selling their cigarettes mainly to men. Brown & Williamson. More than any other war. Everything changed during World War I (1914-18) and World War II (1939-45). The wars were good for the tobacco industry. Lorillard. By 1944 cigarette production was up to 300 billion a year. Reynolds. and Liggett & Myers (now called the Brooke Group). Many of them went to work and started smoking for the first time while their husbands were away.Credit: An 1892 Duke of Durham box of machine -rolled cigarettes Tobacco Biology & Politics The American Tobacco Company was the largest and most powerful tobacco company until the early 1900's. World War II brought more independence for women. Several c ompanies were making cigarettes by the early 1900's. At home production increased and cigarettes were being marketed to women too. In 1902 Philip Morris company came out with its Marlboro brand. Service men received about 75% of all cigarettes produced. Since WW II. American Brands. 13 .S.S. Soldiers overseas were given free cigarettes every day. and all over the world. there have been six giant cigarette compani es in the U. They are Philip Morris.J. R.

S. He said that the nicotine and tar in cigarettes cause lung cancer. The early 1980's were called the "tar wars" because tobacco companies competed aggressively to make over 100 low tar and "ultra" low tar cigarettes. In 1984 Congress passed another law called the Comprehensive Smoking Education Act. passed the Cigarette Labelling and Advertising Act.S. the tobacco companies had come out with new brands of cigarettes with lower amounts of tar and nicotine a nd improved filters to keep their customers buying and to help reduce their fears. 14 . (the chief doctor for the country) wrote a report about the dangers of cigarette smoking." By the 1980's. In 1965 the Congress of the U. It said that the cigarette companies every three months had to change the warning labels on cigarette packs.In 1964 the Surgeon General of the U. It said that every cigarette pack must have a warning label on its side stating "Cigarettes may be hazardous to your health. It created four differe nt labels for the companies to rotate. Each company made and so ld many different brands of cigarettes.

Statistics such as these provide a sense of the size of the cigarette smuggling problem. In 2005 the value of China¶s export trade in cigarettes is predicted to be US$600 million. That grow tobacco. the USA is the largest exporter of manufactured cigarettes. 15 . According to government reports. the USA exports approximately the same amount of tobacco that it imports.Brazil is the largest export tobacco finished product (manufacture cigarettes). also import foreign tobacco as well as exporting their own tobacco leaves. 846 billion cigarettes were exported. such as the USA. but only 619 billion were reported to be imported. Again. of leaf. Interestingly. and tends to be more expensive than tobacco from other countries. and the Russian Federation and the USA are the largest importers. China is quietly emerging as a significant cigarette exporter. for both the raw material (tobacco leaves ) and the finished. worth about US$320 million. accounting for nearly 20 percent of the world total. the value of US tobacco leaf exports are about double that of the same quantity of imports Manufactured cigarettes are also traded globally.TOBACCO TRADE IN WORLD Tobacco trade is big business. increasing from virtually no exports in 1980 to over 20 billion cigarettes exported in 2001. Because US tobacco is popular globally. Some countries. Japan is the largest importer of cigarettes.

Top 10 leaf exporters in 1999 Country Brazil USA Zimbabwe China Turkey India Greece Italy Malawi Argentina Export(in metic tons) 343 191 164 132 129 120 101 94 93 73 400 350 300 250 200 150 100 50 0 16 .

Russian Federation USA Germany UK Netherlands Japan France Ukraine Poland Egypt 241 190 129 113 99 71 70 60 55 300 250 200 150 100 Top 10 importers 50 0 Sources: This analysis is based on latest statistics from the US Census Bureau .Foreign Trade Statistics and CIA World Factbook as of the date of article publication 17 .Top 10 leaf importers(1999) Country Export(in metic tons) 263 .

000 878.889 43.000 141. y y y Country wise Area.200 56.004 1.716 290.tonnes and productivity of 1649 kg/ha.000 45. Turkey. Production and Productivity of Tobacco during 2005 Country World Argentina Brazil Bulgaria China Greece India Indonesia Korea Malawi Pakistan Thailand Turkey USA Zimbabwe Area in Ha 3.000 190.250 m.000 124.000 Yield in Kg/Ha 1649 1787 1782 1441 1915 2196 1365 972 1421 463 1871 1750 740 2335 1625 Source: FAOstat Citation 18 .233 66.500 123.Area.565.000 145.000 438.000 140.000 65.000 492.565.402. Production and Productivity The area under tobacco in the world is 3. Brazil.500 84.651 62.100 40. India .000 150. The major tobacco growing countries in the world are China.000 598.000 Production in Mt 6. while China alone accounts for nearly 40%.400 69.000 46. Russia.233 ha with a production of 6.685. India produces 7-8% of world's tobacco.100 65.981.000 2. USA.250 118.240 40.981.400 70. Italy and Zimbabwe.

0.. China is also the world's foremost cigarette-consuming country... Russia. In addition to leading the world in tobacco consumption as shown below. Top Tobacco Consuming Nations (2005) 1.. Pakistan . 2. European Union .71 million tonnes (10... 0..2%) 3...4%) 4. 0. China . Brazil . United States . Japan .3%) 7.2%) 6. India . 0.18 million tonnes (2. Indonesia .23 million tonnes (3.66 million tonnes (38% of world total 7 million tonnes) 2.17 million tonnes (2. Turkey .. Russia ... India & China).6%) 8. 0.4%) 9. 0...44 million tonnes (6.4%) 5. 0..4%) Top Tobacco Consumers 40% Eu ean un n ¢   Ind a Russ a USA ¤ 15% 10% 5% 0% B az l Ja an nd nes a u key § ¤ ¦ ¢   £   ¡ Pak s an 19 £¢ ¡     35% 30% 25% 20% Ch na   ¥ .. particularly in the fast growing BRIC nations (Brazil.Consumption of Tobacco Even the growing awareness of health risks isn't stopping global tobacco consumption..43 million tonnes (6.52 million tonnes (7. 0.. 0...14 million tonnes (2%) 10.10 million tonnes (1.

8 Malawi 108.5 Zimbabwe 204. India (8. According to the Food and Agriculture organization of the UN. during which 4. production in developing countries actually decreased.2 million tons of leaf were produced.0%) and the United States (4.298.9 million tons of leaf were produced.4 Brazil 520. The top producers of tobacco are China (39.] During that same time period.3%). during which 5.6 Soviet Union 116. Chinese cigarettes being preferred over foreign cigarettes because of their lower cost.1 million tons by 2010. While this tariff has been reduced from 64% in 1999 to 10% in 2004. ] it still has led to local. Country or region Production in thousands of tonnes(2000) China 2. This number is a bit lower than the record high production of 1992.2 European Union 314.7 United States 408. and 1997. tobacco leaf production is expected to hit 7.6%). Every year 6. during which 7.0 20 . China¶s increase in tobacco production was the single biggest factor in the increase in world production. Brazil (7.Production of Tobacco in World Production of tobacco leaf increased by 40% between 1971. China¶s share of the world market increased from 17% in 1971 to 47% in 1997. The production growth was almost entirely due to increased productivity by developing nations. where production increased by 128%.9 Turkey 193.9 Indonesia 166.6%).5 million tons of leaf were produced.8 India 595.7 million tons of tobacco are produced throughout the world. ] This growth can be partially explained by the existence of a high import tariff on foreign tobacco entering China.

tobacco output rose from 4.1 million tonnes by 2010. 21 . although tobacco leaf production in developed nations including the U.9 million tonnes in 19982000.S.2 million tonnes in 1971 to an annual average of 6.Tobacco production will continue to expand to meet the demand of nicotine -addicted consumers responsible for tobacco industry profits. will fall . Globally. The Food and Agriculture Organization (FAO) of the United Nations projects that world tobacco leaf production will reach 7.

00% 25. 0.00% 0..00% 15. United States ...31 million tonnes (4..3%) 4.47 million tonnes (7%) 5. 2.6% of world total 6..00% 30. developing countries will account for 87% of world tobacco by 2010..00% 35.5%) 7.3%) 8.00% 5. Malawi . India .7 million tonnes) 2. Turkey .55 million tonnes (8..09 million tonnes (1. European Union ..22 million tonnes (3.Top Tobacco Leaf Producing Nations (2005) 1. Russia .. 0.8%) 10. China is projected to remain the world's largest tobacco producer.64 million tonnes (39...2%) 9. 0.4%) 40.6%) 3.64 million tonnes (9. 0...14 million tonnes (2. 0.. Indonesia ..12 million tonnes (1. 0.. 0.00% Ch na Ind a B az l ¨ ¨ © ¨ A ean un n  u ky ¨  Z Ind nes a ¨ Malaw Russ a  Developing nations generated about 79% of global tobacco leaf production in 2000... 22 ¨  Eu    babwe .0. Brazil . China ...00% 20.6%) 6. Zimbabwe . 0.00% 10.23 million tonnes (3. According to the FAO.

1% of world total 2.. 18. the domestic economies of Zimbabwe and Malawi depend most heavily on tobacco exports to the rest of the world. Turkey . Malawi .2 million by 2010.. 2.30 3. 5..10 16. 9.. 6.10 6. 3.Export of Leaf World tobacco leaf exports from 1998 -2000 averaged 1. while developed countries account for the remainder... 5. Other European countries . 5. Brazil . China . Russia ..90 2% . Top Tobacco Leaf Exporting Nations(2005) 1.9% 10. 16.90 9..6% 3.5% 6.9% 4. United States .. India ...6% 7... Today developing nations are responsible for almost 65% of global tobacco exports.60 57 Ot er Europi B countries 9..50 7 A 797 8 @ 7 65 4 i i # % $! " "# "! Europe io Br i S i ussi & ) !) ( 0 ' 5.3% 9. Of the countries below.1% 5.98 million tonnes per year which the FAO expects to grow by 1% to 2.5% 8.. Zimbabwe ...0% Leaf exporting nations !" 32 1 i e Tur e y 0 23       18.50 5..60 5. 9... European Union .

on over 4 million hectares of land. Turkey) produce 2/3 of the world¶s tobacco. The problem does not end with growing tobacco: the processes used in curing tobacco leavescause massive deforestation The greater use of fertilisers and pesticides. the bulk of production has moved from the Americas to Africa and Asia: land devoted to tobacco growing has been halved in the USA. USA. India. the bond between the tobacco industry and the tobacco farmer finally is beginning to break down. The global tobacco crop is worth approximately US$20 billion. and partnerships are developing between the farmers and the public health community. In the USA. The toba cco industry exploits them by contributing to their debt burden. The globalis in China alone. The problem does not end with growing tobacco: the processes used in curing tobacco leaves cause massive deforestation. as well as the increased mechanisation. that have produced these higher yields are environmentally damaging. The greater use of fertilisers and pesticides. There are millions of tobacco farmers worldwide. totalling nearly 7 million metric tons in 2000. a small fraction of the total amount generated from the sale ofmanufactured tobacco product . but has almost doubled in China . and on a wide variety of soils and climates. Tobacco is grown in over 125 countries. a third of which is in China alone. The production of tobacco leaves has more than doubled since the 1960s. Canada and Mexico. Tobacco is grown on less than one percent of the world¶s agricultural land . while using their economic plight to argue against efforts to control tobacco. that have produced these higher yields are environmentally damaging. Malawi and United Republic of Tanzania.Major Producers Of Tobacco 5 Countries (China . as well as the increased mechanisation. Since the 1960s. Brazil. 24 .

As noted above. It¶s a small tropical resort town touted as ³China¶s Hawaii. despite the income generated for the state by profits from state-owned tobacco companies and the taxes paid by companies and retailers. From its central headquarters in Beijing. imports and exports and contributes 12% to the nation's national income . To implement these policies. increasing incomes has enabled more people in China to smoke and to consume more cigarettes. fruits and cigarettes. Some estimate the actual number to be closer to 2 trillion if unreported production.China Sanya. each Chinese tobacco company pays the STMA taxes. to Chinese companies. Owned by the state. all major business transactions must be approved by the CNTC. she moved to the town several years ago to make money off the tourists. Around the peak of global tobacco production there were 20 million rural Chinese households producing tobacco on 2. how could I eat?´ she asks. China's government has acted to reduce tobacco use. counterfeiting and smuggling are taken into account.´ says Xu Mingzhong. ³We¶ve got 1. China founded a State Tobacco Monopoly Administration (STMA) in 1982. Needless to say. China¶s 350 million smokers consumed 1.. Agreements with the CNTC and the CNTC¶s China National Tobacco Import & Export Corporation (CNTIEC). it is lower than the natural market price . the STMA in 1984 created t he China National Tobacco Corporation (CNTC). is as far south from Beijing as you can go and still be in China. growing tobacco. While individual manufacturers and suppliers are given a degree of autonomy. China¶s population is lighting up. redrying and pac king equipment. is not as profitable as cotton or sugar cane. To further control tobacco in their borders. Either way. marketing. the STMA has its work cut out.7 trillion cigarettes last year. ³Without selling cigarettes. In exchange.deputy director of the prosperous Ningbo Cigarette Factory. but keeps its individual profits. A former farmer. While this price is guaranteed. because of the lack of market risk. FOUR MODERNIZATIONS. Ah -Jun sells betel nuts. StandardCommercial and DIMON both supply processing technology. This is because the Chinese government sets the market price. the southernmost city of Hainan Island. Wh ile it is the major crop for millions of Chinese farmers.2 billion people and they really enjoy their smoke. At the same time. the STMA makes economic policies for the entire tobacco industry . such as threshing.´ Under the shade of coconut trees.1 million hectares of land . the foreign merchants receive discounts on tobacco 25 . STMA control tobacco production.

China¶s powerhouse Yuxi Hongta Group produces several brands of American-blend cigarettes for export to Southeast Asia. 1. says that his company supplies manufacturers in Southeast Asia. In 2005. Large companies like Yizhong Tobacco Group and Yuxi Hongta Group have been incorporating smaller factories into their operations.´ She says that foreign companies that are looking for business opportunities in China will need to practice patience. By 2050. and the largest number of annual tobacco deaths. traditionally thought to lack the technical know -how of foreign companies. and does not have to spend its foreign currency reserves. Heike Kungel. As of April 1999.. According to the China National Tobacco Corporation Economic Center. factories producing better -selling brands will license their brands to other factories. China is the largest tobacco and cigarette producer in the world. a large producer of tobacco -related machinery. ratifying the FCTC. public relations manager of the German machinery maker Hauni. While some factories have undoubtedly been forced to close. 1/4. with the largest number of smokers. Sometimes. 26 . are exporting their machinery and services. the increasing illegal production and sales of counterfeit cigarettes. In these deals. others have come under the control of other companies. New challenges are coming from China¶s joining the World Trade Organization. ³The market for tobacco equipment in China will not grow in the future as steadily as it grew in the beginning of the ¶90s.7 million. China¶s year-to-date tobacco industry trade surplus was up 35. the CNTC gains access to up-to-date technology. smuggling and related crimes. At the same time. 121 are reportedly profitable. A representative of the Kunming Shipbuilding Equipment Company.6 percent to us$90. . To further improve efficiency and competitiveness. especially Vietnam and Indonesia. there are 136 cigarette factories currently operating in China.until the value of the equipment has been realized.. internationalization. consolidation is changing the playing field. STMA aims to reduce the number of factories to approximately 100 by early in the next century. 1/5 of the world totals. constituting respectively 1/3. The Chinese tobacco industry has made progress on STMA¶s second goal. states. the annual tobacco death toll will increase to 3 million.95 trillion cigarettes were smoked by 320 million Chinese smokers of whom 50 million were under -age. Even domestic suppliers. Inter national leaf merchants sell Chinese leaf abroad. promotes its tobacco abroad. compared with 180 in 1997. Of those 136.

25% of India¶s cultivated land is used for tobacco production .865 registered tobacco farmers and many more who are not registered. and Rajamundry . Brazil¶s government. Mysore. however. Rajahmundry houses the core research institute. Bihar.and sun-cured tobacco is grown. which works to increase exports of Indian tobacco. including those which grow tobacco.000 family farmers cite tobacco production as their main economic activity. Punjab. the Indian government has supported growth in the tobacco industry. provides small loans for family farms. These types of tobacco are used for cigarettes. but has not had a successful systematic anti-tobacco farming initiative. India has 96. These types of tobacco are used for cigars. Tobacco has never exceeded 0. India India's Tobacco Board is headquartered in Guntur in the state of Andhra Pradesh. 27 . Virginia and Amarelinho flue -cured tobacco as well as Burley and Galpao Comun air-cured tobacco are produced. In the northeast.7% of the country¶s total cultivated area. Andhra Pradesh. through the Programa Nacional de Fortalecimiento da Agricultura Familiar (PRONAF).Brazil In Brazil around 135. West Bengal. The government has set up a Central Tobacco Promotio n Council. Since 1947. In the southern regions of Brazil. twists and dark -cigarettes. India has seven tobacco research centers that are located in Madras. darker. Brazil¶s government has made attempts to reduce the production of tobacco. air . Around 0.

and at the end of the twentieth century U. the industry aggressively pursued expanding into markets in Asia. no one product has enjoyed deeper ties to the colonization of the New World and to the expansion of international trade between the New World and Europe. citizenry. and the professionally managed modern corporation. snuff. and factory -made cigarettes has often been called the United States¶ oldest industry.S. smoking tobacco. processing. and the Middle East over the last four centuries. Indeed. the publication of documents revealing corporate manipulation of the political and legal process and the willful distortion and suppression of scientific findings. The prospect of farming tobacco and selling it to England brought the earliest British colonists to Virginia and Maryland. and sales contributed $15 billion in wages to some 660. In response. and manufacturing of tobacco. 28 . Equally worrisome for the industry. However. tobacco growing. especially the United States. and the rise of government antitobacco measures further clouded the future of the domestic tobacco market. and Africa. U. manufacturing. For many centuries tobacco has been identified with the New World. In addition. prompting the World Health Organization to accuse tobacco manufacturers of fomenting a tobacco epidemic. Cigarette makers faced the prospect of being demoted to the status of a rogue industry in the eyes of U. U.United States Tobacco in the form of leaf. Eastern Europe. In the form of the mass -produced cigarette.S.S.S. distribution. companies such as Philip Morris and RJR Nabisco continued to dominate the international cigarette market and stood among the most profitable transnational corporations. the last half of the twentieth century saw the U.S. at century¶s end the growth of class-action lawsuits. tobacco industry come under pressure from the demonstrated health hazards of smoking and the subsequent steady decline in smoking in the United States and other highly industrialized nations. no other agricultural crop has been more thoroughly entwined with the history of the United States than the growing. cigars. Asia. students of the industry have argued that the advent of machine -made cigarettes in the 1880s helped inaugurate in the United States the modern era of mass consumer products. chew.000 American workers. mass advertising and promotion. tobacco became the virtual international symbol of American modernity. Since its introduction to Europeans by American Indians. marketing.

and advertising (newspapers. discounts and rebates to jobbers. The growth of the U. endorsements) cigarettes to an emerging national market. Ready-made cigarettes using mixtures of bright and burley tobacco allowed U. and their manufacture was fairly dispersed in cigar leaf-growing regions.S.S. Chicago. brand names). retailers.S. manufacturers to develop cheaper brands. logos. the convenience and simplicity of smoking cigarett es made from the bright variety of tobacco was discovered by Union and Confederate troops alike during the Civil War. was the exception. factories were dispersed in the tobacco-growing regions of Virginia. With this growth arose new aggressive methods of packaging (striking colors. Richmond. Manufacturing of tobacco also thrived among planters who prepared tobacco for chew. reaching 26 billion by 1916. a center of snuff production. Cincinnati. Cigar manufacturing underwent a similar evolution somewhat later. In the United States. etc. rising from 16 million cigarettes (compared to 1. New York.2 billion cigars) annually to over 533 million. Cigars first became popular in the United States after the Mexican -American War. After the Civil War. Tampa. Initially. designs. which used slave labor.). Kentucky. by 1905 the greatest centers of cigar manufacturing were Philadelphia. free samples. the introduction of steam-powered shredding and cigarette machines and pressures stemming from the rise of national markets led to the concentration of tobacco manufacturing in that sector. Tennessee. North Carolina. picture cards. and Missouri. handbills. U.Industrializing Tobacco and the Rise of the Cigarette Until 1800 tobacco manufacturing proper was largely ca rried out in Europe. Baltimore. and Key West. However. promoting (gifts. U. billboards. 29 . Boston. posters. cigarette production boomed between 1870 and 1880. population between 1880 and 1910 and the decline of chewing tobacco due to anti-spitting ordinances further expanded the market for cigarettes. New York.S.

Since the early 1990s.Top Tobacco Companies Philip Morris is the world¶s largest transnational tobacco company. the Republic of Moldova.60 1.40 D C 15. BAT sells the most cigarettes worldwide and has the largest network in the most countries. which frequently merge. whose Marlboro brandis the world leader. However. Tobacco companies. Thailand and Turkey to privatise their state tobacco industry as a condition of loans.20 S Q R .90 30 XW G W V U T PI H G FE ii rris T T e e st t is C 2. Where once the rich countries exported ³death and disease´. excluding the US domestic market.000 medium to large state-owned enterprises were privatised in the 1980s and a further 60.000 in the 1990s after the collapse of the former Soviet Union. In 1999 the company had sales of over US$47 billion. About 7. State tobacco monopolies have been in decline since the 1980s. The tobacco industry is a mixture of some of the most powerful transnational commercial companies in the world. increasingly these are manufactured locally Top Manufacturer of Tobacco 16.60 R C D 7. the cigarette companies have massively increased their manufacturing capacity in developing countries and eastern Europe. the IMF has pressurised countries such as the Republic of Korea. The remaining monopolies represent a combined consumption of 2 billion cigarettes or 40 percent of the world¶s total cigarette consumption. From the late 1990s. own other huge industries and run an intricate variety of joi nt ventures.

according to the report. but at lower rates than in the past.growth rate slowing down World tobacco demand is expected to increase until the year 2010 due to population and income growth. 31 .3 billion in 2010. FAO expects consumption per adult to decline by around 10 percent by 2010. World tobacco production is projected to reach over 7. This is an i ncrease of about 1. consumption and trade to the year 2010 ).5 million tonnes The number of smokers is expected to grow from 1.Higher world tobacco use expected by 2010 .6 kg in 2000).9 million tonnes in 1997/99.1 billion in 1998 to around 1. This is lower than the record tobacco production of 1992 of 7. in developing countries consumption will increase.4 kg per year (from around 1. according to a new study published by FAO today. up from 5. and individual consumption will probably be around 1. While in developed countries tobacco smoking is set to continue to decline.5 percent annually. the report said ( Projections of tobacco production. Despite the overall increase of tobacco use.1 million tonnes of tobacco leaf in the year 2010.

Brazil. together with the anti -smoking measures of governments including intensified anti-smoking campaigns. FAO said. Consumption per person is declining in developed. including China.Applying an aggressive anti-smoking and anti-tobacco policy. and modestly declining in developing countries. tobacco consumption per person could even drop by 20 percent. the report said. The major producers are China. This is 10 percent lower than the 2. India. the US. Tobacco demand in developed countries is declining slowly and will reach about 2. With around 320 million smokers. Turkey. This can be attributed to a slower population and income growth. China is the world's major cigarette consumer. In addition. About 100 countries produce tobacco. which together produce over 80 percent of the world's tobacco. Tobacco consumption By 2010.05 million tonnes in 2010. have had a strong negative effect on consumption of tobacco products.23 million tonnes consumed in 1998. Cigarette smoking is the most prevalent type of tobacco consumption. the share of developing countries will be 71 percentThe overall pattern of tobacco consumption is influenced by two divergent trends. 32 . the share of developed countries in world tobacco consumption is projected to be only 29 percent (1998: 34 percent). China alone a ccounts for over 35 percent of world production. manufactured and hand rolled cigarettes account for about 85 percent of all tobacco consumed worldwide. Zimbabwe and Malawi. the banning of advertising and increased taxation. in developed countries an increasing awareness of the damaging health effects of smoking.

44%).But more tobacco will be smoked in developing countries. the second most important tobacco consumer.8 percent rate observed in developing countries between 1971 and 1998.48 million tonnes. The share of China in total world tobacco demand is likely to remain around 37 percent in 2010. In the Near East. of which just over half was in Brazil. Total demand for tobacco in India is likely to continue to increase. This is an average annual growth rate of 1. 33 . tobacco use in 1998 was about 0. Growth for the period to 2010 is expected to continue at a similar rate. In Latin America.7 percent between 1998 and 2010. total tobacco demand increased in the 1990s with record growth of 3. In India. a growth rate a little lower than experienced in the 1990s (0. but more slowly than in the pre vious decades. chewing etc.2 million 1997/99). significantly lower than the 2.09 million tonnes by 2010 (from 4. Demand in the region is expected to increase modestly until 2010.5 percent per year.42%. particularly in China. the demand for tobacco is expected to grow at 0. In Africa. smoking of c onventional cigarettes accounts for only 25 percent. Most people consume tobacco in the form of non-cigarette items such as hand-rolled bidis. where tobacco consumption is expected to grow to 5. A major part of the projected increase in demand is expected to be in the Far East. and most of the increase will occur in Brazil.

we might expect to see some further shift of cigarette manufacturing. Redu cing demand will in turn imply a decline in global tobacco production. Reducing the demand It is the higher demand for tobacco in the developing countries that drives the world tobacco economy. it suggested. however. the report said. and good transportation systems and access to international markets are available." 34 . "Reducing demand in the developing countr ies would be rather difficult given projected population and income growth trends. "Production policies supporting tobacco in developed countries are under constant pressure and tobacco profitability at farm level is expected to decline further". would also be an important achievement.Tobacco production . Cigarette production in developing countries is already surpassing the production level of developed countries. Supply is expected to increase in countries where production costs are lo w. Mitigating these trends.a shift to developing countries The developing countries are expected to further increase their share in world tobacco production. Public policy to reduce tobacco use should focus on demand rather than supply. "With that in mind. there are no production restrictions. according to the report. also. the report said. towards developing countries. and reducing consumption per adult using a combination of tax and direct restriction policies." the report said.

Children were exposed to 50-cigarettes worth of nicotine through direct contact with tobacco leaves. British American Tobacco and Japan Tobacco each own or lease tobacco manufacturing facilities in at least 50 countries and buy crude tobacco leaf from at least 12 more countries. others work on large plantations. are instead used for the curing of tobacco. In late 2009 reports were released by the London-based human-rights group Plan International. Families that farm tobacco often have to make the difficult decision between havin g their children work or go to school. claiming that child labor was common on Malawi (producer of 1. China. Indonesia. Brazil. This 35 . There is widespread use of children on farms in Argentina. long hours as well as physical and sexual abuse by their supervisors. which do not make economic sense. Large amount of firewood. vomiting and dizziness. that could be used domestically for fuel and heating. Major tobacco companies have encouraged global tobacco production. The child-laborers complained of low pay. who worked full -time on farms during the 2007-2008 growing season. cannot make enough money from their crop to survive without the cheap labor that children provide. Also many countries have government subsides for tobacco farming. They also reported suffering from ³green tobacco sickness. The tobacco industry houses some of these working children. nicotine from the leaves gets absorbed in the skin and causes nausea. Philip Morris. they are taken away from food production.Problems in Tobacco Production Child Labour The International Labour Office reported that the most child -laborers work in agriculture. which is one of the most hazardous types of work. When resources are put into tobacco production. The organization interviewed 44 teens. the United States and Zimbabwe. While some of these children work with their families on small family owned farms. This level of nicotine in children can permanently alter brain structure and function. Unfortunately working often beats education because tobacco farmers. especially those that are still developing.8% of the world¶s tobacco) tobacco farms. Malawi. especially in the developing world.´ a form of nicotine poisoning. India. A large percent of the profits from tobacco production go to large tobacco companies rather than local tobacco farmers. When wet leaves are handled. Economy The cultivation of tobacco is economically detrimental to the countries that produce it.

According to the World Bank. which are devastating to small -scale tobacco farmers. These pesticides as well as fertilizers. from the soil at a rate higher than any other major crop.encouragement. decreased soil productivity and general climate change. Early exposure to pesticides may increase a child's life long cancer risk as well as harm his or her nervous and immune systems. packaging and rolling cigarettes. the waterway and the food chain. Tobacco is a crop that leeches nutrients. end of in the soil. Pesticide use has been worsened by the desire to produce bigger crops in less time because of the decreasing market value of tobacco. pesticides pos e an even greater threat. 36 . most developing countries still rely on wood in the curing process. along with government subsidies has led to a glut in the tobacco market. Tobacco companies recommend up to 16 separate applications of pesticides just in th e period between planting the seeds in greenhouses and transplanting the young plans to the field. Brazil alone uses the wood of 60 million trees per year for curing. leads to deforestation. which can be used as alternatives to wood. This leads to dependence on fertilizers. This surplus has resulted in lower prices. such as phosphorus. Furthermore. While some big tobacco producers such as China and the United States have access to petroleum. coal and natural gas. Deforestation is a factor in flooding. the wood for the curing of tobacco. nitrogen and potassium. Pesticides often harm tobacco farmers because they are unaware of the health affects and the proper safety protocol for working with pesticides. Coupled with child labor. between 1985 and 2000 the inflation adjusted price of tobacco dropped 37% Environment Tobacco production requires the use of a large amount of pesticides.

3% of the total cultivated area. Although there is nation wide anti-Tobacco campaign. Although the cultivation of Tobacco is restricted to 0. it provides employment to large nu mber of people on the one hand. Tobacco being a labour intensive crop provides employment to more than 60 lakhs people who ar e engaged in the farming curing. redrying. the commercial importance of Tobacco can never be underestimated due to the revenue earning potentiality and employment generation capacity of the crop. it makes significant contribution to National Exchequer by way of excise revenue and foreign exchange earnings. manufacturing distribution. The bidi industry which provides employment to around 44. On the other hand. packaging. Presently there is a call for substitution of Tobacco with other crops. Table showing net return from Tobacco and next best crop in some of the Tobacco growing state is detailed below: Differences in Net Returns from Tobacco and Next Best Crop (Rupees per hectare) Crop Giving Next Best Differences in Net Returns State Returns (I) Between Tobacco and (I) Andhra Pradesh (Northern Bengalgram 4405 Black Soils) Andhra Pradesh (Southern Chillies 875 Black Soils) Karnataka Cotton 4500 Gujarat Pearl millet 2306 Bihar Maize+ Potato 2729 West Bengal Potato 5134 Tamil Nadu Groundnut 2825 Source: Central Tobacco Research Institute 37 . export and retailing activities. grading.00 lakhs essentially unskilled rural folks mostly women is also arresting t he influx of rural labour to urban centres. It has been playing a prominent role in the development of Nation's Economy.TOBACCO TRADE IN INDIA Tobacco is a principal cash crop of National importance. but the research findings show that there is no economically viable alternative crop which is as remunerative as Tobacco to the farmer.

viz.Botanically. Gujarat. Karnataka. cheroot. snuff and hookah paste. the commercial cultivation of Tobacco is concentrated in States like Andhra Pradesh. Cigarette 38 . Uttar Pradesh. i. chewing. Nicotiana tabacum and Nicotiana rustica The largest area is under Nicotiana tabacum which is grown allover the country where as Nicotina rustica is confined to North and North Eastern States. bidi. the Tobacco plant belongs to the family Solanacea and genus Nicotiana. cigar. West Bengal and Assam. hookah. Eventhough the cultivation of Tobacco is spread all over the country.e. Specific types and varieties of Tobacco have been developed for use in cigarette. The genus embraces over 60species of which two alone are cultivated. About 5 to 6 per cent of the total area under Tobacco is aounted for Nicotiana rustica varieties. Bihar. Maharastra. India grows both the cultivated species. Tamilnadu and West Bengal etc. Bihar. The cultivation of Nicotiana tabacum has country -wise spread and this type also aounts for more than 80% of the exchange earnings. Rustica types are used inchewing and snuff whereas tabacum types are used for all purposes.

S. But India's cigarette consumption ranks 11th in the world. the method of marketing of Tobacco in India differs from type to type and from State to State. respectively. U. The per capita consumption of cigarette in India is one of the lowest in the world in comparision to major Tobacco consuming countries like Zimbabwe. In case of VFC Tobacco the Government of India and the Tobacco Board are announcing Minimum Support Price (MSP) from year to year with the objective of protecting the interest of the growers of VFC Tobacco. whereas bidi Tobacco is grown in Gujarat. West Bengal and U. However the consumption of Tobacco has been a matter of national debate in view of the emerging anti Tobacco drive in the country. Japan and Middle East countries. Andhra Pradesh and West Bengal and Chewing Tobacco is grown in Tamilnadu. The principal market for India Tobacco are U.8% of the international trade and ranks 5th after Brazil. Brazil. snuff. Market and marketing system play a dominant role inensuring remunerative price for commercial crop like Tobacco. Hookah Tobacco is grown in UP. India grows different variety of Tobacco under 39 . UK. Bihar. There has been significant improvement in the marketing of VFC Tobacco with establishment of Tobacco Board. U.S. despite the cumulative growth in population by nearly 35 percent during th e same period.K. Excluding VFC Tobacco.P. chewing. The total area and production of Tobacco in India f or the year 1997-98 were 463.Tobacco is mostly cultivated in Andhra and Karnataka. hookah paste etc. and 646 million kgs. Jarda. Research on Tobacco has been playing an important role in thedevelopment of Tobacco varieties in India. India ranks 4th in the total Tobacco consumption in the world.A and Pakistan. Gutkas paste.5 thousnad ha.R. Gujarat. There is need for establishment of organised marketing system for all types of Tobacco so that the Indian Tobacco can achieve significant share in the International market. and West Bengal. But the growers of other varieties of Tobacco are at the mercy of unscrupulous traders and middlemen. India is one of the leading Tobacco exporting countries in the world. Tobacco is traditional item of India's foreign trade. Out of the total production. only 19% of the total consumption of Tobacco is in the form of cigarette whereas 81% isin other forms like.S. Cigar and Cheroot Tobacco are also grown in Tamilnadu. Karnataka and Maharastra. The annual level for demand of cigarette in India remains the same at 96 billion sticks as it was 15 years ago. Turkey and Zimbabwe.A. The production and marketing of VFC Tobacco have been statutorily regulated by the Tobacco Board. bidi. India aounts for 5. U.S.

resulting in discriminatory rates of duty compared to other Tobacc o products.7% whereas India's exports of around 2. covering revenue. As such the problem of improvement of different varieties of Tobacco in India are numerous and complicated. The Tobacco industry in India mainly covers manufactu ring of cigarette. the CTRI. India's share in world cigarette production has remained at around 1. snuff and other chewing Tobacco likezarda. (i) Seed and Seedlings Scheme and (ii) Farmers Training Scheme at Gujarat Agricultural University. But the burden of Tobacco tax has increasingly shifted to cigarette with the removal of duty on raw Tobacco since 1979. Cigarette industry in India is essentially capital intensive in nature. Tobacco Industry in India contributes in a unique manner to several important facets of the Indian Economy. Raja hmundry has been presently doing research for development of alternative crops to Tobacco. cigar and cheroot. this Directorate is running the scheme for Assessing the Cost of Production of VFC Tobacco in Andhra Pradesh from 1974 -75 onwards. and GDP growth. employment. bidi. this Directorate has been regularly sending such Information to Directorate of Economics and Statistics. Raja hmundry has also been entrusted with the research for development of alternative uses of Tobacco in view of anti-smoking campaign.8 billion sticks of cigarette per year aounts for less than 1% of the world export of cigarette. There is significant opportunity for c igarette 40 . As a part of all India Comprehensive Scheme to study the cost of cultivation of the principal crops. Anand. Afterwards.different agro-climatic conditions. After collection and compilation of such field data. gutkha and other pan masala. the estimates of cost generated under this scheme are passed on to the Commission for Agricultural Cost and Prices (CACP) for its use in recommending the Minimum Support Price (MSP) on VFC Tobacco from year to year basis. hookah. The growth of cigarette industry both in domestic and inter national market represents a big revenue opportunity for the economy. Under this she me the data on cost of production are collected by cost aounting method by Field staff posted in selected clusters in Tobacco belt of Andhra Pradesh. CTRI. export. The main research work on Tobacco is being done at Central Tobacco Research Institute at Raja hmundry and its Research Stations spread throughout India. Apart from conducting research for development of different varieties of Tobacco for maximising production. Earlier the Directorate of Tobacco Development was running two Non -Plan Schemes on bidi Tobacco viz. but both these scheme have been terminated by the e nd of March 2000.

the global Tobacco industry is poised to increase at the rate of 1. Similarly the world cigarette production grew steadily up to 1997and started declining slowly during 1998 and its again shows upward trend during 1999.industry to extent and cosolidate its position in intentional market due to some recent trend like withdrawal/reduction of agricultural subsidy and escalating cost in the traditional cigarette exporting countries. Recently there has been world -wide anti Tobacco campaign which resulted in modest fall in area and production of Tobacco. From the beginning of 17th century. There is scope for development of bidi industry in view of excessive and biased tax treatment of cigarette. Bidi industry is one of the foremost cottage industries in India.The social significance of bidi industry derives from the fact that it generates more employment in the economy compared to cigarette industry. There is are cent spurt in the development of chewing Tobacco segment which uses modern packing technology to attract the consumer. With an increase in the world import requirements translating in to a rise in export potential. Cigar and Cheroot industry is one of the oldest industries in India. Around 37% of Tobacco production in India goes to bidi making as per Indian Market Research Bureau (IM RB) report 1996.A. But presently this industry is in deep dwindling condition due to un organised marketing system. Total amount of bidi Tobacco production was 150million kg and that of bidi was around 700 billion pieces during1994-95.O. Tobacco has been playing a important role in international trade. Indian Tobacco industry is presented with significant opportunities to consolidate and extent its position in the global market 41 . But consumption of Tobacco in the world has remain more or less stable. Assets such as experienced farming community confers a significant competitive advantage for India.9% annually which will result in an deficit of 2% projected global demand. As per the projection by F. During 1993 -94 the bidi industry generate daround 1310 million man days of employment. and is mainly concentrated in Tamilnadu and Andhra Pradesh.

" After China. Mr. Babu remarked that "Considering exports. the tobacco board has come up with new introductory me thods with a sole aim of increasing the height of India¶s tobacco industry in throughout the world.3 a kg. The shortfall at the international level has forced the global buyers to source indian leaf at a higher pric e. In 42 . I think prices will stay at this level in rest of the year. The increasing level of the exports have triggered the prices of tobacco which in turns has trimmed the profit of domestic cigarette makers. Japan Tob acco Inc. There is a shortfall in production globally". a Kolkata based company. India is worldwide acknowledged as the second biggest producer of tobacco and known as the fourth biggest exporter of unmanufactured tobacco.55% increase in India¶s Tobacco Export India has witnessed an unforeseen increase in its tobacco exports. Further he added that the "Last year the average price was around $2. The British American Tobacco. India exports nearly 55 per cent of the total Flue Cured Virginia (FCV) yield and the rest is available for consumption in the domestic marketplace." The leading domestic buyers of tobacco are ITC Ltd. which has escalated by 55% to reach at $169 million in first quarter of 2008/09. Mr. FCV is the top notch quality which is used for making cigarettes. During this time period export has been recorded at $169 million. Bellam Kotaiah. "Exporters are buying aggressively. in Zimbabwe it is steady". There is a shortfall in production globally. the chairman of the Tobacco Board said. Many big companies are showing their interest in purchas ing tobacco at higher quantities from india and thanks to which the country¶s 2008 -09 exports could touch the mark of $600 million. For keeping the surging rising trend of tobacco exports intact. This year it has gone up to $4. Mr. Godfrey Philips India Ltd and Vazir Sultan Tobacco. J Suresh Babu. which is 19 per cent more than from $503 million of last year. Philip Morris International and Imperial Tobacco Plc have been recognized as the country⼌s main buyers. Production in Brazil is down. The april -june figure of 2008 shows that there has been considerable increase in the export of tobacco as compare to the last year figure of the same period. The senior official quoted that "Exporters are buying aggressively. president of the Indian Tobacco Association clarified that the in ternational buyers are paying around 50 per cent-70 per cent more as compare to what they were paying last year and it is reflected in the export figure. The impact of rising exports got visible in the profit level of do mestic cigarette makers. which was $109 million in the same period a year ago.

tobacco growers are registered under the tobacco board which is regulating the sector.india. Caught up in this high worldwide demand. However. Indian tobacco prices have seen a shoot up from the range of 2-6.5 dollars/kg as compare to what was remain in between 80 cents and four dollars a kg in 2007. Tobacco board Chairman said "WSe have cautioned farmers that they should not resort to unauthorized farming.85. In amidst of the concerns related to the the growing areas under tobacco. The price of average quality tobacco has also seen an increase from last year Rs 47. otherwise. The board has clarified that any plantation done in the unauthorized field will be destroyed." Farmers in different parts of the india are more vigorously getting back to the tobacco cultivation after a massive increase in prices at domestic level followed by the major spurt in nation⼌s exports. plantation in Andhra will start in September.000 hectares against 75. greatly boosted by the shortfall of production in major overseas markets like china.47 to this year Rs 84. In 2008. 43 . But we are vigilan t. He said that "It is natural on the part of farmers to increase acreage after the tobacco prices hit through the roof this year. we will destroy such crops".000 hectares last year. in Andhra Pradesh prices of best quality tobacco has been increased from Rs 65 in 2007 to reach at Rs 141 per kg in 2008. Acreage in Karnataka has shot up to about 80. the tobacco board has issued a warning to the farmers against all types of illegal cultivation of the crop.

Zimbabwe. The other exported varieties are . Contrary to international trends. average export prices of indian tobacco FCV. Natu. USA. Top leaf and Jutty.A Glimpse of the India's Tobacco Industry India is exporting tobacco in more than 80 nations. In the unmanufactured tobacco exports. over all continents. Like low unit production cost. non cigarette tobaccos are the dominated item in the nation⼌s export. There are several advant ages which can be put forth for favoring the indian tobacco. These are used for chewing and making bidis. which are found more competitive than that of the prices of Brazil. Zimbabwean farm prices have also seen an upward trend. Rustica. Types of tobacco grown in India Types of tobacco grown in Indi 44 . All these are used for making cigarettes. HDBRG. Around 8 per cent to 10 per cent non cigarette tobacco is exported in throughout the world. DWFC. Non cigarette tobacco exported worldwide are Lalchopadia . Judi.Burley. Out of the total tobacco items exported from india. At present the industry is providing livelihood to more that 25 million people in India. The current situation in the international tobacco mark et is proved to emerge out as the favorable market for the indian tobacco export. Flue Cured Virginia tobacco accounts to the single largest item with nearly 75 per cent to 80 per cent export. unmanufactured tobacco shares around 80 pe r cent to 85 per cent of the export while the manufactured tobacco products hold around nearly 20 per cent to 25 per cent. The prices of brazilian export have almost equalized the most expensive american tobacco cost.

(iii) Oriental. A small quantity of this tobacco is also grown in Orissa (Rayagada) and Maharashtra (Gadchiroli). natu and Burley tobacco are grown in different parts of India. India produces 600 million kg (dry weight) of tobacco on an avera ge. the a verage yield of FCV tobacco was 1710 kg/hectare. Burley and Oriental types are blended with FCV in appropriate proportions to create specific qualities of tobacco for cigarettes to cater to the taste of smokers. based on th e end-use and curing methods. Karnataka and Maharashtra. (ii) Burley.35% of the total area und er tobacco cultivation and is grown in Gujarat. Bihar. Hookah tobacco : (Nicotiana rustica variety) It is used for smoking and is grown in Uttar Pradesh. It is the most remunerative crop due to the demand from domestic cigarette manufacturers and importers. Beedi tobacco : This occupies 30%. West Bengal and Orissa. FCV. snuff. Of this. Currently. respectively. The average yield varies between 1000 and 1700 kg/hectare in Karnataka and Gujarat. These are: (i) FCV. It is mainly cultivated in Andhra Pradesh and Karnataka. Cigarette (FCV). cheroot. Burley tobacco : This air-cured form of tobacco is used for cigarette blends and is grown in Andhra Pradesh. there are seven broad types of unmanufactured tobacco. Flue-cured Virginia tobacco is the primary ingredient in the manufacture of cigarettes. Tobacco used for chewing and hookah are grown in other to bacco producing states of India.s beedi tobacco is grown in India. or used as an input in the production of manufactured items such as cigarettes. cigars and beedis. (iv) dark air/sun-cured. whereas beedi tobacco is grown in Gujarat.Types Of Tobacco Grown In India Unmanufactured tobacco is either exported. (vi) dark air-cured (cigar) and (vii) dark fire-cured. cigar. Usually. beedi. (v) light aircured. Nearly 85% of the world. In 2000. burley and natu tobacco are the three main varieties of cigarette tobacco.2001. hookah. 45 . Fifty per cent of the FCV grown in India is used by the domestic cigarette industry while the remaining is exported. chewing. FCVtobacco accounts for 31% (185 million kg). FCV tobacco: It is grown in Andhra Pradesh and Karnataka. directly consumed as chewing tobacco.

DWFC: Dark western fire-cured Source: www. Bihar. Harvel De Bouxo Rio Grande. Uttar Pradesh. West Bengal and Orissa.1 1 244.indiantobacco. Table 2.1 200 65 22 60 10 357 601. Cheroot tobacco : It is grown in Tamil Nadu and Andhra Pradesh.1 FCV: flue-cured Virginia.Chewing tobacco : This is used for gutka. The production of different varieties of tobacco in India. snuff and pipe tobacco.com 46 . Natu tobacco: It is sun-cured and grown in Andhra Pradesh.4 Types of tobacco produced in India (2002)44 Type of tobacco Cigarette tobacco Quantity (million kg) FCV Dark air/sun-cured Burley HDBRG Oriental DWFC Subtotal Non-cigarette tobacco Beedi Chewing tobacco Cigar Hookah Snuff Subtotal Total 175 40 8 20 0. It is grown in Tamil Nadu. HDBRG:. Cigar tobacco : This type of tobacco is grown in West Bengal and Tamil Nadu.

000 65.500 123.000 45.6% of world area) in the country.Area.000 2.000 190.000 438.tonnes and productivity of 1649 kg/ha.565.000 46. while China alone accounts for nearly 40%.565. Andhra Pradesh cultivates both VFC and Natu tobacco varieties in 1.100 65.651 62.685. Countrywise Area.000 Production in Mt 6.100 40. India.889 43.240 40.000 878.400 70.233 66.250 118.000 124.500 84. Turkey.000 598. Tobacco is an important foreign exchange earner grown over 4.000 Yield in Kg/Ha 1649 1787 1782 1441 1915 2196 1365 972 1421 463 1871 1750 740 2335 1625 Source: FAOstat Citation y y India produces 7-8% of world's tobacco.981. USA. Brazil.3lakh ha contributing to 43% of 47 . The major tobacco growing countries in the world are China.402.981.400 69. Italy and Zimbabwe .250 m. Production and Productivity y y The area under tobacco in the world is 3.000 145.200 56.233 ha with a production of 6.000 150.000 141.3 lakh ha (9. Production and Productivity of Tobacco during 2005 Country World Argentina Brazil Bulgaria China Greece India Indonesia Korea Malawi Pakistan Thailand Turkey USA Zimbabwe Area in Ha 3.000 492.004 1.000 140. Russia.716 290.

00 0.15 0.16 0. Production in Million Tonnes Productivity (kg/ha) Andhra Pradesh Gujarat Karnataka Bihar Tamilnadu Maharashtra Others All India 0.01 0.07 0.02 0. yield rate is not worked out.02 0. Production and Yield of Tobacco in India (2002) State Area in M.Since Area / Production is low.country's area ranking 1 st among the states.03 0. Area.01 0.00 0.01 0. Source : DACP 48 .13 0.01 0.09 0.33 0.Ha.00 1304 1699 458 1095 @ 1065 @ @ @ .

Production & Productivity of Tobacco in Andhra Pradesh during 2003-04 District Srikakulam Vizianagaram Visakhapatnam East Godavari West Godavari Krishna Guntur Prakasham Nellore Chittoor Cuddapah Ananthapur Kurnool 35 Area in Ha Production in Tonnes 75 3796 3447 20151 29953 7924 7965 68824 16761 3 489 25 17318 5593 28 849 84 503 995 10632 115 195530 Yield in Kg/Ha 2130 2130 1912 3020 1401 1916 2504 1176 1507 1257 1257 1257 1257 1521 2161 2161 2161 1809 1185 2409 2161 1475 1782 1803 6672 21385 4136 3181 58542 11122 2 389 20 13777 Mahaboobnagar 3677 Medak Nizamabad Adilabad Karimnagar Warangal Khammam Nalgonda State 13 393 39 278 840 4413 53 132552 Source: Season and Crop Report. AP Govt 49 .Districtwise Area.

consumption of tobacco in all recorded forms has reduced. The use of tobacco and its various products appears to have declined in the rural and urban populations of India over the period from 1987.1999 to 488. in both urban and rural areas. After 1987.908 million sticks in 1970 to 81.tobacco alone as an indicator.360 tonnes in 1998. However.Consumption of Tobacco India is one of the biggest tobacco markets in the world. the share of domestic consumption of unmanufactured tobacco went up from 6.2004 45 Tobacco usage in India is contrary to world trends since chewing tobacco and beedi are the dominant forms of tobacco consumption. ranking third in total tobacco consumption behind only the markets of China and the United States. Over the years. the per capita consumption of cigarettes decreased from 190 sticks in 1970 to 129 sticks in 1997. Tabl 50 . more of the other forms of tobacco are consumed in India and that this trend is increasing in recent years.52 This trend in decline in consumption is faster among the urban population. a decline in the number of cigarette sticks consumed has been noted 46 On the other hand. whereas internationally. 1988 to 1999.130 tonnes in 2003. According to the National Sample Survey (NSS) data shown in Table 2.9 kg compared to the world average of 1.to the second-largest unmanufactured tobacco consuming country in the world. India.2000. This suggests that compared to cigarettes.5% in 2002. Total cigarette consumption increased from 62. 88. cigarette is the dominant form of tobacco use.43 Domestic unmanufactured tobacco consumption has increased from 483.514 million sticks in 1997.8 kg.10.s position has risen from the third .2003. However. Since gutka is a recent entrant. More recently. the per capita consumption in the country is 0. there is a declining trend in the consumption of the smoked forms.9% in 1997. the trends of oral tobacco use are not clearly documented by using paan.1998 to 7.

the Netherlands (6%) and Belgium (5%) are the major markets for Indian unmanufactured tobacco.2004. Although India is one of the major exporters of unmanufactured tobacco.4% in 2002.12).s export earnings have gone up by over 58 times from Rs 152 million i n the beginning of the 1950s to Rs 8834 million. In 1982.1983. the UK (10%). Similarly. due to the global increase in tobacco prices.From the data on tobacco exports. Currently. India.51 Nevertheless.53The rise in the popularity of cigarettes opened the market for Indian FCV tobacco in the UK. which was 84.2002. Italy. An analysis of variety-wise exports of unmanufactured tobacco show s that FCV tobacco accounted for between 60% and 82% of the total exports of unmanufactured tobacco from the country during the 1990s. Japan. Russia. India exported unmanufactured tobacco products to nearly 50 countries. However. Germany. the export value of FCV 51 . As early as in 1950.6 million kg in 1950. The declining share of tobacco exports to total exports is basically due to the sharp fall in the export share of unmanufactured tobacco.1975 to 0.Export Tobacco has been a traditional export item for India. it is evident that India is known more for its unmanufactured tobacco than for the value-added manufactured products of tobacco.2003. it has yet to make its presence felt in the export market for cigarettes.5% in 1974.1951 to 115.Russia (27%). India.2004 (Table 2. In 1985.s total exports witnessed a declining trend from 1974. India had a record production of 184 million kg of FCV tobacco. which was 6% of the world. there are 50 that export unmanufactured tobacco from India. Of the 200 exporters registered with the Tobacco Board in 2001. the USSR.Germany (8%). The share of tobacco exports to total exports declined from 2.1951.1975 to 2002.s exports of tobacco and its products in terms of volume spurted from 44. Egypt. China and Bulgaria. India has tobacco trade with 100 countries.s tobacco production. Yemen (9%). The share in disaggregated forms of unmanufactured and manufactured tobacco also dep icted a similar declining trend. Nepal and Singapore are the major importers of FCV tobacco from India. India.6% of the total tobacco exported in 2003. Belgium. the share of tobacco exports in India.2003. Even after 90 years of the existence of a domestic cigarette manufacturing industry.s tobacco exports still continue to be dominated by unmanufactured leaf. It appears that exports have determined the production of FCV tobacco in India.4 million kg in 2003. 95% of the tobacco exports consisted of unmanufactured tobacco. According to data available in 2001.

Despite 60 years of international trade. the USA. farm price and conversion cost.55 Chewing tobacco is followed by cigarettes (29. Judi and rustica (chewing tobaccos). Brazil. there is not much scope for increasing the exports of manufactured tobacco products except cigarettes. As a result.8% leads the exports of tobacco products from the country (Table 2. etc. is probably due to the limited scope for tobacco -based products from India. hookah tobacco paste (12.2004 52 .7%).14 shows that the share of cigarettes in total manufacturedexports increased both in volume and in terms of value from 1995. This is mainly due to low productivity and quality as compared to Zimbabwe. In spite of India having a comparative advantage over leading tobacco producing countries in terms of low cost of production.1996 to 2001. There have been fluctuations in tobacco expo rts from India. and beedis (11. which constitute the most widely used tobacco product in the world.2002.Though India ha explored new markets. The other varieties of tobacco exported include SCN. mostly in unmanufactured form. India ha s failed to take advantage of the worldwide increase in the demand for cigarettes.Chewing tobacco with a share of 43.Exports of tobacco products from India are low. Burley (all cigarette tobaccos) and Lalchopadia. its share in the world market has declined. it has not emerged as a leading exporter.India has an advantage over other countries in tobacco price and in the production of various varieties of tobacco from different agro-climatic regions.1951 to 2003. the likelihood of the global tobacco market shrinking due to worldwide controls on tobacco and the extremely competitive nature of the global tobacco market would suggest that India.tobacco accounted for 75% to 90% of the total exports of unmanufactured tobacco. However.s policies on tobacco agriculture and manufacture should not be guided by unrealistic expectations of potential exports India from 1950. However. Indian tobacco is cheaper in the world market than that of other major producers. The continued accent on tobacco exports.14). SCV. Table 2.7%).2%).

32 15.4 79.1996 85.6 96.13 India.8 92.6 92.13 India.1986 76.1981 86.6 94.2004 84.97 7.18 7.64 5.14 Source: Tobacco Board 2004 Values are expressed in percentages Table 2.1976 94.3 88.36 11.20 9.4 90.8 2000.86 15.0 3.6 Manufactured tobacco Value Quantity 85.s tobacco exports (in million kg)55 India¶s tobacco exports ( in million kg) Year Unmanufactured Tobacco Share(%) and rank in World tobacco trade 5% (5th) 6% (4th) 5% (5th) 5% (7th) 4% (8th) 4% (8th) 5% (6th) 4% (7th) FCV tobacco Share (%) and rank in world tobacco trade 1970 1975 1980 1985 1990 1995 2000 2001 48 77 73 64 67 68 100 83 48 71 65 58 44 45 65 54 12% (2nd) 13% (2nd) 11% (4th) 9% (4th) 7% (4th) 6% (5th) 6% (5th) 5% (5th) FCV: flue-cured Virginia 53 .17 25.9 85.1951 94.10 23.90 20.6 1990.1 74.5 1970.83 14.80 5.56 5.4 1985.1991 84.6 81.53 4.47 3.Table 2.53 18.3 67.05 32.1956 96.2001 87.1 2003.1961 96.95 13.44 4.s tobacco exports (in million kg)55 Unmanufactured Tobacco Year Quantity 1950.82 3.47 13.4 Value 14.2 1960.1966 95.7 1980.4 1975.68 14.1971 95.4 1965.6 1955.5 1995.

The idea was to find out the basic process of distribution system and promotion. Product promotion is very important for increase in sale and product reach the maximum retail shop and consumers.2002 SCOPE & OBJECTIVE OF THE PROJECT WORK The project ³ a study on sales and distribution sytems ´ is taken to find out the problem in distribution system. To know about the specific requirement s of retailer and wholesaler for helping the company in future. sales of product and promotion of product. To find out the potential market for the product so that it will help the company to concentrate on this key area. 4. 54 . To know about the problems of retailer and wholesaller which they are & solve their problems in convenient manor. 2. 4. OBJECTIVES 1. The objective of the project is to study the availabi lity of the product at variable outlets ( Wholesaller and retailer) 2. 3. To improve the quality of the product to have large market share into the market. 3. . The study is specifically carried out in the tobacco segment. To study the delivery of time and mode of delivery for giving the good service to their customer SCOPE 1. future expansion plans.Source. To obtain the information from industries & present condition of the product in the market. To study the promotional activity to help the company to reach maximum shops.Tobacco Board.

The corresponding research problem might be to assess whether the market would accept the new product. Problem Identification The decision problem faced by management must be translated into a market research problem in the form of questions that define the information that is required to make the decision and how this information can be obtained. RESEARCH METHADOLOGY Market research is the systematic and objective identification. For example. dissemination. it is useful for the researcher to outline possible scenarios of the research results and then for the decision maker to formulate plans of action under each scenario.5. For this a questionnaire was prepared keeping in mind of both individual retailer as well as wholesaler. The objective of the research should be defined clearly. Solve the distribution problem and help in giving the better service to the customers. as we know that ashok Leyland is market leader in the khaini segmen. To ensure that the true decision problem is addressed. Thus. To find out the potential market for the product so that it will help the company to concentrate on this key area. For the purpose of the project both internal and external data was collected. a decision problem may be whether to launch a new product. 55 . The methodology adopted for the project was the questionnaire method. we further need to understand the promotion activity and distribution system of the product . collection analysis. the decision problem is translated into a research problem. this would help mahak to increase the market value of the product. future expansion plans. To obtain the information from the industries and present condition of the product in the market. and use of information For the purpose of improving decision making related to the identification and solution of the problem.

focus groups.whether the data is dependable and can be verified. units of measure. Specifications and methodologies used. Exploratory research can be performed using a literature search. including definition of variables. but in other cases different phases of the same research project will fall into different categories. In some cases the research will fall into one of these categories. gaining insight. How current the data is and whether it applies to time period of interest.Research Design Marketing research can classify in one of three categories: y Exploratory research y Descriptive research y Causal research These classifications are made according to the objective of the research. Objective of the original data collection. clarifying concepts. Exploratory research has the goal of formulating problems more precisely. and forming hypotheses. Presence of bias in the data. Nature of the data. eliminating impractical ideas. gathering explanations. including data collection method. surveying certain people about their experiences. quality and analysis of the data. and questionnaire design. and case studies. and relationships examined. Whether the data is useful in the research study. sample size and sampling technique. categories used. Errors and accuracy . 56 . When surveying people. response rate. exploratory research studies would not try to acquire a representative sample.

e cool and hot.Ghotcoper. External Survey: The retailer and wholesaler in Mumbai were visited and interviewed to get the data related to the objective of the project .and other smaller areas where the retailer and wholesaler are concentrated. dealers of Mahak. Kurla. Data collected from the retailer and wholesaler .Ville parle. which can be used by Mahak in future for a better interaction to retailer and wholesaler. PRIMARY DATA: 1. 57 .Interviewed of dealer were also taken for the purpose of survey .Internal survey: The company officials were interviewed for getting the vital data.Santacruz.The areas surveyed in Mumbai consisted of Andhri.to survive in this era of cut throat competition to a company should be always updated about the competition .Jogeshwari . 2.Sion.regarding my project i was also collecting the information of competitor i. Data collected through the internal survey like employees of the company. To understand the market in a better way it is very important to understand your competitor . which was related to the project. DATABASE CREATION: An extensive database is created for the analysis.

www.wikipedia. SAMPLE UNIT: Sample unit is 215 in this 200 retailer and 15 wholesaler were visited in Mumbai region.com vi. 58 .indiantobacco.com v.com iv.com ii. www. i. SAMPLE SIZE: The survey was carried mainly in Mumbai division.com 2. which are as follows.chainikhaini.mahakgroup. SAMPLEING PLAN: UNIVERSE: All the retailer.google.com vii.com iii. Data collected from the previous record and broachers of the respective area office. www. www. www.economictimes. www.SECONDERY DATA: 1. www. We have taken the help of various websites for collecting the data.businessline. wholeseler & dealers in Mumbai Region. 200 retailer and 15 wholesaler of the city were visited and interviewed.

TOOLS OF DATA COLLECTION: Questionnaire preparation: This was the most important part of the project as the information collected on the basis of this questionnaire only was going to be analyzed. the questionnaire was made extensive. &the area was there in Mumbai is as follows. Deciding the attributes related to the objective of the project. 59 . SAMPLING TECHNIQUE: Simple random sampling technique and purposive technique was used for collecting the data. which should be included in the questionnaire. Randomly we targeted the retailer and wholesaler collected the data .SAMPLE AREA: the area of sampling was Mumbai region where i have collected the dat a. The important attributes. Andheri Ville parle Jogeshwari Kurla Sion Ghatcoper these were the place from where i have collected the data. The questions were designed in a simple way. were decided and accordingly the questionnaire was designed. Hence.

STATISTICAL TOOLS USED FOR ANALYSIS THE DATA: To better understand and analyse the data we used various types of statistical tools. STATISTICAL TOOLS: 1) Tabular form 2) Graphical form y Bar chart y Pie chart y Line graph These are some tools which were used. 60 . by the help of which we could understand the graphical condition in the best manor.RESEARCH APPROACH: Direct contacts with the retailer and wholesaler. Further personal interviews were taken of every retailer and wholesaler for collecting the important data.

of Respondent 150 65 215 Percentage 69.DATA ANAL AND DATA INTE PRETATION  Market share of product Respondent Yes No Total No.23% 100% Market hare Y Yes N 30% 70% Data Collection Type: primary Data 61 .77% 30.

77% 7% 75. of respondent 150 15 163 215 Percentage 69.In this graph we can see the market share of the product is 70% where Chaini -khaini is successful and captured 70% of market share because of the service provided by company is excellent.77% W o es er b Bot Ret i er a ` 7% Data Collection Type: primary Data 62 b a` a b Ret i er a ` W o es er Bot de d c .  Invold in Respond Retailer Wholesaler Both Total No.8% Invold in 75.80% 69.

4% 21.3% Mode Used For Order i h i i h fg Call ng f Execu ve wh lesale H wke 55.Retailers purchase the product through mainly howker and wholesaler. 63 i h h fg Call ng f Execu ve wh lesale H wke .65% 19.20% 9% Data Collection Type: primary Data In this graf taking order by calling and dealer taken by order of wholesaler through calling.If service is good it is beneficial for product and also helps in capturing the market. Mode used for order Mode used for order Calling Executive wholesaler Howker Total No. of respondent 15 32 35 83 165 Percentage 9% 19.40% 21.2% 50.

7% 100% Frequncy of placing order qr t qr qr qr qp T t y y 2 to 3 ys 7% 9% 25% 59% Data Collection Type: primary Data 64 s s o ve 5 ys .5% 6. Frequency of Placing order Taking order time That day A day 2 to 3 day Above 3 day Total No. of respondent 98 42 14 11 165 Percentage 59.5% 8.4% 25.

63% 23% 13.70% Always on time Sometimes on time Ra ely on time u Data Collection Type: primary Data 65 . Received order on time Order on time Always on time Sometimes on time Rarely on time Total No. of respondent 105 38 22 165 Percentage 63.37% 100% Received order on time u Always on time #REF! Ra ely on time 63.63% 23% 12.

00% Yes 40.6% 100% Offer provided by company 90.4% 80. customer is happy and he will take more intrest in the product and product can capture the product.Delivery of the product on time is very important because if service of the company is good.00% 50.00% Yes No Data Collection Type: primary Data Offer providing to customer is very good and salling of the product is increase.00% 70.00% No 30.00% 0. Because of this company gaining more profit.  Any offer Provided By Company Respondent Yes No Total No.00% 20. 66 .00% 10.00% 80.00% 60. of Respondent 32 133 165 Percentage 19.

of respondent 25 85 35 20 165 Percentage 15.15% 51.21% 12.00% 30.15% 12.12% 0.00% 51.51% 50.00% 15.21% 20.51% 21.00% 21.00% xw v v v 15 t 25 v v 26 t 35 15 t 25 26 t 35 v 36 t 45 36 t 45 v Ab 45 xwv 45 Ab Data Collection Type: primary Data 67 . Which Age group preferred Age group 15 to 25 26 to 35 36 to 45 Above 45 Total No.00% 40.00% 10.12% 100% 60.

The product is mainly used in younger and age group is 25 to 35 year. of Respondent 119 46 165 Percentage 72.  Satisfaction regarding service(delivery) Respondent Yes No Total No.12% 27. 68 .88% 100% Satisfaction regarding delivery of the product 72% 72% 72% 72% 72% 72% 72% 72% 72% 72% Yes 72% 28% No Yes No Data Collection Type: Primary Data The percent of satisfaction is more than unsatisfaction.Beacouse of filter paper and they used the product in every where and they saved their time.

 Time of the credit period Time A day 2 to 3 days Above 3 days Total No.95% 19. of respondent 20 17 9 46 Percentage 43.56% 100% Time of credit 50% 45% 40% 43% 37% 35% 30% 25% 20% 20% 5% 0% € y 5% 0% A day 2 to 3 days Above 3 days 69 .47% 36.

58% 100% Promotional tecnique Glow sign 38% Poste 47% Data Collection Type: Secondary Data 70  Banne 15%  .Data Collection Type: Primary Data  Promotional techni ue used by company Time Banner Poster Glow sign Total No. of respondent 25 78 62 165 Percentage 15.27% 37.15% 47.

of respondent 15 92 58 165 Percentage 9% 55. According to respondent which promotional activity is effective(POP material) Time Banner Poster Glow sign Total No.15% 100% Point of purchase material(POP material) 60% 50% 40% 56% 30% 20% 35% 10% 0% 9% ‚ ‚ Banne Poste Glow sign Data Collection Type: Primary Data 71 .76% 35.

Point of purchase(POP) material is played very important role in purchasing of the product and customer attract that material and think of product.75% of purchasing is done on shop and if this material is attracted the customer then they purchase. 

Satisfaction with profit margin

Satisfaction of respondent Yes No Total

No. of Respondent 36 129 165

Percentage 21.8% 78.2% 100%

78.20%
80.00% 70.00% 60.00% 50.00%

40.00% 30.00% 20.00%
10.00% 0.00%

21.80%

Yes

No
ƒ

Yes

Se ies 2

Data Collection Type: primary Data

Profit giving the shop owner by company is very crucial because this is attracted the shop owner and they sale the product is more.In this case profit margin of the company is increase and they capture the market very easily.
72

OBSERVATIONS AND FINDINGS

y The product is mainly used by younger generation i.e 25 to 35 year age group because of filter pouch. y Market share of the product is very high in filter khaini i.e is 90%. y Other two competitor are present in the market their name are Hot and Cool but market share of the these product is very less. y Customers want more profit and they take more interest in selling the product. y They invest more money in more profitable produc t. y Sales personnel are not in all area. y Less sales personnel. y Customer mainly purchase the product through howker because of less sales personnel. y Howker sale the product in high price and profit margin of the customer is less and customer think company is giving less profit. y Sometimes product is not available in market. y Many times in packets there is less pouch and in pouch less filter paper. y Howkers not return the empty pouches because of these reputation of company will affect. y Company will not give offer their retailer and wholesaler. If company gives the offer to retailer and wholesaler they give more effort to achieve the target and sale of the product will increase . y Sales personnel are not educated. y Retailers are not more educated.

73

CUSTOMER COMPLAINTS

Marketing representative is not come on shop. Empty packets and less filter pouch in the packets. Delivery of the product is not proper. Customers are not satisfied to profit margin giving by company.They said company increase the price but decrease the profit margin. y Product loss there quality in some days. y Company is not give any offer.
y y y y

LIMITATION

y The Main problem is there is sometimes retailers are uneducated so they do not participate in the interview & do not show any interest in it. and the communication gap is created between them. y Lack of time for the retailers and the Wholesaler of the product. y There would a possibility of getting wrong information from the respondent, if they are not able to give the right information. Because some respondent are not interested in giving their personal data. y It is the expensive study to the researchers to go everywhere in the market, especially in collecting the primary data. y These are some limitations which can be there in the study.
74

RECOMMENDATION

y y y y y y

y

The sales personnel should be trained thoroughly so that he can answer every query of the customer. Increase the sales personnel to cover all area. If sales personnel contact maximum customer because of these customers are satisfied . Increase the promotional activity because of these sales and market share of the company will increase. There are some imprument is required in delivery system if delivery system is good this will give more satisfaction to customer. Empty pouches and less pouch in the packet is main complaint of customer so manufacturing department should care in packaging of packets. Increase the profit of retailer if profit will increase retailer will more happy and they take more interest in selling the product because ret ailer is link between wholesaler and consumer. Company should give offer time to time for retailer and wholesaler. If company give the offer to retailer and wholesaler they give more effort to achieve the target and sale of the product will increase.

75

those who are preparing from the beginning. Competition is going to help by making us more alert and active. It was nice an experience to directly reach him in my first project itself and have learnt a lot from this experience. Competitors and technology are going to be the dominant factors in the time to come. you have to make your presence felt. ³Customer Delight´ seems to be the new mantra. Further a marketing plan was also formulated so as to target the Customer at the right time. With the globalization process on from a longer period the existing players in the market are going to face the tough times to come except. helped to understand what the customer wants and how we can improve on his requirements. Today merely getting noticed is not enough.CONCLUSION Today is the age of consumers and they purchase the product for consuming through retailers. 76 . Also the brand perception that the consumer has in his mind regarding Mahak¶s Chaini-Khaini and other competitors. They are certainly the king and they are not only to be satisfied but also need to be delighted. The organization need to utilize their resource keeping these two things in mind. providing more space for the organization to spread their wings. If efforts are made to minimize the gap between the customer and the service provider or the producer then both will face lesser problem then they do. From the consumer I have tr ied to find out the reason for the brand dominance and the things he c onsiders before buying a product. And technology by making the business process faster. With all things in mind I have tried to go closer to the retailer and wholesaler . Here the direct competition is between us and the other market players who has got an upper hand. To create awareness about the product certain suggestions are made. Recommendations and suggestions were also provided from whatever I get to know from the retailer and wholesaler .

BIBLIOGRAPHY www. NARESH MALHOTRA¶S MARKETING RESEARCH 77 .chainikhaini.com www.com www.com www.economictimes.rediff.com www.com www.google.com www.wikipedia.com OVERDRIVE.business.com www.com www.businessline.mahakgroup. PHILIP KOTLER¶S MARKETING MANAGEMENT 13e.indiantobacco.

.. Name of the shop «««««««««««««««««««........ Wholesaller b...Questionnaire ³A study on sales and distribution system of ahak s Chaini-Khaini in umbai area (wholesaler and retailer) . A.. Name of the respondend ««««««««««««.... Both 3. Contact no ««««««««.... Retailer c.. Address «««««««««««««««««««. Executive c.. 2 to 3 days d.. Hawker 4. Sometimes on time 78 c... C. D.......... What is the frequency of placing order? a.... Above 3 days 5. Do you stock chaini-khaini? a. 1. That day b. B... Do you receive orders on time? a.. No 2.. Rarely on time .. Calling b.. Always on time b.. ««««««««««««««««««««««««««««««.. Which mode used for order? a. Yes b... Are you involved in? a..... A day c..

Are you satisfy profit margin given by company? a. (delivery). Any kind of offer provided by company. 36 to 45 d. Yes b. No Mention«««««««««««««««««««««««««««« 7. A day b. What is average sale of Chaini-khaini?(week/ Rs) «««««««««««««««« 8. Glow sign d. What is the credit period given by the company? a. above 46 9. Poster c. More than 3 days 12. Yes b. a. 26 to 35 c. No 11. a. Banner b. What are the promotional technique used by the company?(POP material) a. Yes Any suggestion. No 10. Glowsign d. b. Any kind of credit provided by company. No 79 . According to your opinion which promotional methods are effective in this place? (POP material) a. Which age group preferred Chaini -Khaini? a. 15 to 25 b. Any other 13. Banner b. Are you satisfied regarding services. Yes b. Any other 14. a.6. 2 to 3 days c. Poster c.

«««««««««««««««««««««««««««««««««« «««««««««««««««««««««««««««««««««« ««««««««««««««««««««««««««««««« 80 .

81 .

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