Alice Project

CONTENTS
Sl. no Topic Page number

1 Research methodology 1-3
2 Introduction to cashew 4-22
3 Company profile 23-45
4 Marketing management 46-61
5 Marketing management in 62-89
Kalbavi cashew
6 Findings, suggestion & conclusion 90-94
7 Bibliography 95
CHAPTER-1
RESEARCH METHODOLOGY
RESEARCH DESIGN
Export of cashew is the profitable business. Now days it is growing rapidly. The
Government is giving more importance to this industry and in present condition
of the business it is getting more importance. So this project, “A BRIEF STUDY OF
MARKETING AND EXPORT OF CASHEWS WITH SPECIAL REFERENCE TO KALBAVI
CASHEW” is undertaken.
OBJECTIVES OF THE STUDY

 To know about the export position of cashew industries in India.
 To know about the market for cashew in the world market.
 To know the production.
 To know about the incentives and subsidies available to the cashew
export.
 To identify the problems faced by the industry in general and evaluate
the strength and weakness of industry.
 This project is also aimed at analyzing the management of a concern and
there by to draw up a descriptive profit of the company.
 It is also undertaken with the aim of knowing the present position of the
company and suggesting remedial measure for improved performance
through interpretation of the marketing management.
METHODOLOGY
The data required for the study of Kalbavi Cashews were secured from 2
sources. The data includes primary data and secondary data.
Primary data
The primary data was collected by visiting the unit and collecting the
various information about the firm through interaction with the managing
partner, supervisors, and manager of the firm as well as the staff members.
Secondary data
The secondary data was obtained through office records, books and
management books like marketing, sales, and export and through Web sites and
Google search etc.
The relevant data and information are properly integrated, analyzed,

interpreted and presented in the form of table throughout this project report.
LIMITATIONS OF THE STUDY
1. The main limitation of this study was time limit. We had to do this project
work in between the college hours. Because of immense work schedule
factory’s officials could not interact with us properly.
2. The firm was not prepared to disclose their trade secrets.
3. Difficulty was also faced in collecting the detailed information from the staff
due to their busy schedule.
4. Authorities have no time to provide and give adequate and accurate data
information.
5. The firm is situated in Baikampaddy, so traveling was bit inconvenient, as
the distance is 20kms from Mangalore.
6. Since the methodology of study or collecting information was primarily
direct personal interview, there may be chances that certain information
may not be provided which they consider as their business secrets.
7. The coverage in this report is restricted to the curricular prescribed for VI
semester BBM of Mangalore University.
8. The study included on the information provided by the management.
In spite of these limitations, I have tried successfully to gain information

that has helped me in bringing out this project report.
CHAPTER-2
INTRODUCTION TO CASHEW
“CASHEW IS A POOR MAN’S CROP AND A RICH MAN’S FOOD”.
Cashew is one of the leading tropical tree crops in the world, which has
originated from Brazil, where it flourished as a wild growth in the jungles. Cashew
as bought to East Africa & India just as other commercial crops like rubber, coffee,
tea etc. by the Portuguese nearly five centuries ago. The first introduction of
cashew in India was made in Goa from where it spread to other parts of the
country. In the beginning it was mainly considered as a crop for afforestation and
soil binding to check erosions.
The important cashew growing countries are Tanzania, Mozambique, Kenya,

Brazil, Madagascar, Thailand, Malaysia, Indonesia, Nigeria, Senegal and Angola
etc.
The nuts, apple and other by products of this crop are of commercial
importance. For several centuries cashew was merely regarded as a sturdy
perennial tree, yielding good soft wood and producing a rather delicious juicy
apple fruit. The cashew apple juice was astringent through sweet and delicious.
Unlike other fruits, the cashew apple has its nuts outside. After the apple was
eaten the nut was invariably thrown away. This was because nut has a hard shell
in the form of a honey cants structure, which contains a corrosive liquid known as
Cashew Nut Shell Liquid.
As years rolled by, interest in the nut slowly developed and man’s curiosity
resulted in the extraction of the kernel from the nuts, after burning off the liquid.
The delicious taste of the kernel was discovered and tree crops of India were soon
established itself all along the West Coast and later in East Coast as well. It has a
tremendous industrial and commercial value. Though the commercial importance
of cashew’s exploitation began from the early 60’s, marginal lands and denuded
forests were the areas set apart for the plantation development. Due to the
absence of high yielding variety and multiplication techniques, indiscreet seeds
and seedlings were used for planting purposes. Because of its adaptive ability in
wide range of agro climatic conditions it has become a crop of high economy and
attained the status of an export oriented commodity bringing considerable
foreign exchange to the country.
India has a creditable record of attaining good amount of foreign exchange

by way of export of cashew kernels. Among the Agri-Horticulture commodities
getting exported from India, cashew ranks the 2 nd position. During the years 2001-
2002, India could export 97550 MT of cashew kernels valued at Rs1776.80crores.
USA, Netherland, UK, Japan, UAE, France, Canada, Saudi Arabia, Singapore, Italy,
German Fed republic, Austria, Israel, and Spain are the major international buyers
of Indian cashews.
India is the largest area holder of their crop. Cultivation of cashew in India
confines mainly to the peninsular areas. It is grown in India in an area of 7.7lakh
hectares with a productivity of 835kg per hectare. Of these, 2.00lakh hectares of
the plantation developed from the beginning of 8th plan alone have been with
superior clones of high yielding varieties.
The intensive research efforts made in the past few decades resulted in the
development of about 36 high yielding technologies capable of increasing the
current level of productivity by 2 to 3 fold. Cashew industry generates
employment in the processing and agrarian sector employing over 3lakh persons
with 95% of them being women. Till 1994, India had total monopoly in cashew
production that accumulated for 95% of the worlds export for kernels. But the
India’s market share has come down to 45% in the recent years. However, the
total export value has gone up due to the higher prices. Indian cashew kernels are
very tasty. They are exported to many foreign countries. The cashew helps to
maximize the national income and foreign exchange in a small but valuable way.
Cashew cultivation is concentrated mainly in South Indian states namely

Kerala, Andhra Pradesh, Karnataka, Tamil Nadu, Maharashtra, and Orissa. To a
limited extent, it is being cultivated in Chhattisgarh, North Eastern States (Assam,
Manipur, Tripura, Meghalaya and Nagaland) and Andaman and Nicobar
islands.Cashew is called in different names in different places. ‘Acaju’ is the name
given to cashew by the native Tapi Indians of Brazil and the French name Acajon is
the nearest equivalent of the original. The Portuguese dropped letter ‘A’ and
‘Acaju’ became ‘Caju’ in the Portuguese. The Kashmiri, Punjabi, Hindi, Marathi
and Gujarati lexicons in India also refer to cashew as ‘Caju’. In Kerala it is called
“Parangi-Andi” meaning “Portuguese Nuts”. In Tamil it is called Mundiri, Orissa as
“Lanka Beeja” (reached from Lanka by Sea to Orissa) and so on. Most of the
names thus used in India are so on. Most of the names thus used in India are
derived from Portuguese ‘Caju’ for cashew.
NATURE OF INDUSTRY
In India many agro-based industries are considered as small-scale industry.

Cashew is also one of the agro-based industries. The cashew industry is small-
scale industry because it consumes very low capital and it provides maximum
employment to the local people. Availability of raw material to cashew industry is
comparatively cheap. It does not require modern and heavy machines. Local skills
are enough to establish the industry limited technical appliances are needed by
these industries. It is not a power-consuming unit. To conclude the above reason
a cashew industry is worth to be started as small industry.
CALENDAR OF OPERATIONS
Following Calendar of operations has been very common in all the year.
December - January
The flowering of Cashew starts during this period. In the East Coast it starts
lately. In January spray is essential to fight against the bees and other insects to
protect the flower.
February – April
Harvesting starts in coastal regions in February. The collection of fallen nuts is

done periodically. It is in this season that the buyers are being prepared for
production that lasts from June to December.
April - May
Most of the growers complete half the fertilizing process before the one set of
monsoon. That is by the end of May.
June – July
Sowing of seeds and planting of seeds are done during June – July.
August - September
The second half of crop fertilizers are applied after the monsoon rain manure
or green manure will be applied.
October - November
Since the early flowering trees start flowering in this season, there will be
possibility that mosquito may affect flowers and hence it may be necessary to
spray the pesticides.
The Cashew Tree
Cashew is the tree of the tropics. It can be grown in almost all types of soils
from the sandy seacoast to laterite hill slope elevation of 100 meters above the
sea level. It requires a minimum of 50cm rainfall per annum, but can withstand
extreme rainfall of 300 to 400cm. The major factor limiting the distribution of
cashew is its inability to tolerate pest and extreme cold for a very long time. The
best soil for cashew is the drop well drained variety with PH value ranging value
ranging Between 6.3 to 7.31. Red sandy loamy and light coastal sands are also
well suited for cashew tree.
The cashew tree is a low spreading evergreen tree with a number of

primary and secondary branches. The root system consist of a very prominent tap
root that penetrate the deeper layers of soil and well developed extensive lateral
roots which enables its cultivation under different soil conditions and water table
at different depths. The pattern of its growth in mostly in flushes, though
continuous growth is also observed. Two type of branching, viz. extensive and
intensive are observed in cashew. The intensive shoot grows to a length of 20-30
cm. and rests. High yielding has less than 25%. 15% of the shoots of the intensive
types produce flower as against 12% in extensive types.
FLOWERING
The cashew tree normally starts flowering in 3 to 5 years. General period of
flowering is from the end of November and extends up to end of January,
depending on the climate condition of different tracks. Flowering covers two or
three distinct phases. The first is predominantly a male phase. The second is the
mixed phase when male and hermaphrodite flowers occur and the third is the
second male phase with male flowers. In India, the flowers open between 9am to
2 pm Flowers are either bisexual or male and both occur intermixed in the same
inflorescence. The cashew tree produces innumerable flowers of which only less
than 10% are perfect and 4% to 6% reach maturity, the remaining being shed at
various stages of development. Pollination is reported to be carried out by flies,
bees, and ants as well as by wind. After fertilization, the ovary grows faster and
the nut reaches its maximum size in 30 days. From the 5 th week on wards when
the growth of the nuts ceases completely, the peduncle starts growing rapidly
forming the fruit called ‘Apple’. The fruit ripens fully after 60 days. What
distinguishes the cashew from all other fruits is the formation of the nut, which
grows as an appendage at the bottom of the apple. The unusual location of the
nut gives the fruit an interesting and unique appearance.
CASHEW APPLE
The fleshy peduncle of the cashew apple is juicy and sweet when ripe. Wide
variations can be notice din color, shape, juice content and taste. Two main
groups among cashew apples are red and yellow. Usually the apple is 8 to 10
times heavier than the nut. The apple is a rich source of vitamin ‘C’ and sugar.
The cashew is highly perishable and required prompt handling. Main

constraints coming in the way of proper utilization of the fruit are that the high
perish ability and presence of astringent and acrid principles that cause throat
irritation. Studies have shown the possibility of using chemical preservations in
controlling the spoilage in cashew apple during harvesting, transportation and
storage. Astringent principles can be removed by steaming and fruit can be
utilized for converting into several processed products like cashew apple juice,
beverages, blended beverage, cashew apple candy, cashew apple jam, chutney
etc.
Alcoholic beverages are obtained by fermentation of cashew apple juice. In

Goa, fermenting the apple juice makes a sort of brandy called “Fenny”.
RAW CASHEWNUT
Cashew nut varies vary in size, shape and shelling percentage. A single nut is
3 to 5cm in length and 2 to 3.5cm in width. The weight of the nut usually varies
from 5 to 10gm. The crop is gathering from the ground and is sun-dried for 2 to 3
days before storing.
The cashew nut shell has a heavy shell. The heavy concealed structure and
its cells contain a natural phenolic compound known as Cashew nut shell liquid.
The liquid is a valuable raw material for a number of polymer-based industries like
paints, varnishes, and resins, industrial and decorative laminated broke linings
and rubber compounding resins etc.
INFRASTRUCTURE FOR CASHEW CROPS
CLIMATE
The optimum condition or its vegetative growth is found in a tropical
climate with annual rainfall and a pronounced dry season. Cashew is a tropical
plant and thrives at high temperature. It is sensitive to the cold and hence too
high altitude, since this involves a drop in temperature. Consequently it finds it
normal habituate in the coastal belt of tropical regions.
SOILS
Cashew is grown on a wide variety of soils. Cashew requires a well-drained
soil. The best for cashew are deep friable, well-drained, sandy loam soil with out a
hard plan with phreatic water level at a depth of 5 to 10 meters. Cashew also
thrives on poor sandy soils. Cashew can’t withstand bad drainage stagnating
water and flooding.
In India cashew is grown mainly on laterite, red and coastal sands in states
of Kerala, Karnataka, Goa, Maharashtra, Tamilnadu, A.P, Orissa and W.Bengal. To
a limited extant it is also grown in black soil in Tamilnadu and A.P. the fertile
among cashew soils in the forest soils on the western slopes of the western
Ghates in Kerala. They are often virgin soil, rich in organic matter which cashew
was planted with minimum tillage and little land clearing. The coastal sands on
which cashew is often grown is very poor in fertility and yields are low unless
fertility are used again. However, it comes up even on waste lands of low fertility.
Cashew is often considered a crop up even on waste lands of low fertility. Cashew
is often considered a crop of the marginal lands and it very modest on its soil
requirements and can adopt itself to varying soil conditions without productivity.
As a result the worst soils have always been selected for cashew cultivation. In
fact cashew performs much better on good soil than on poor soil. Cashew is
suitable for fairy steep with shallow top soils because it large canopy and surface
root system protect the soil very well from run off and erosion during the heavy
monsoon rains.
RAINFALL
It is stated that cashew can be grown under conditions of very low rainfall
ranging from 300mm to higher rainfall of over 400mm. cashew is a very resistant
to drought but only under conditions where its roots can penetrate deeply in to
the soil and draw from water reserves that are not available to other crops. In
brief, it can be assumed that a climate with about to 6 dry months and a rainfall
ranging from 1000 to 2000mm will be suitable for commercial cultivation.
ALTITUDES
The maximum altitudes at which Cashew can be grown vary from sea level
to 170 meters above sea level.
PESTS AND DISEASES

In India, cashew is now known to be infested by more than 60 specious of
insects during different stages of its growth and development.
Important among them are tea mosquito, tea stem and root borers, the
leaf minor and the leaf and blossom Weber. Tea mosquito accounts for more than
30% of the crop loss. Control measures against these serious pests and other
major parts of cashew have been evolved. Filed control trials reveal that
Endosulfan 0.05% applied as high volume spray of 0.1% as low volume spray at
the time of emergence of new fleshes, inflorescence and fruit set are quite
effective in controlling ten mosquito populations.
CASHEW GROWING AREAS IN INDIA
STATE DISTRICT HECTORS TOTAL

(approx)
Kerala Trivandrum 2500
Quilon 8500
Alleppey 3000
Kottayam 1000
Idukki 2200
Ernakulam 4000
Trichur 6500
Palaghat 9000
Kozhikode 6000
Malapuram 14000
Cannanore 20000
10250
Kasaragod 23500 0

Tamilnadu Chingelpet 11600
South Arcot 25000
North Arcot 250
Selam 100
Dhermapuri 250
Trichy 30000
Tanjavur 7500
Madurai 100
Ramnad 11500
Tirunelvali 2500
Kanya kumari 3000 91800

Karnataka South Canara 63000
North canara 24000
Kolar 2500
Belgaum 1000
Chikmaglur 850
Mandy 800
Coorg 500
Bangalore 250
Tumkur 200
Mysore 150
Dharvad 100 94850

Goa 29500

Maharashtra Sindudurg
Ratnagiri
Kplhapur 58500

Andra Pradesh 40000

Orrisa 14500
Nutritive value of cashew kernels
Cashew nuts are one of the most nutritious of foods. They are seeds from
which trees will grow if they remain in the ground, until they generate. They are
therefore high in all useful elements that are essential for germinating and
growing process. Nuts in general are high protein, fat and carbohydrates foods.
They are also rich in many minerals and vitamins essential for the well being of
human body.
Proteins
Cashew kernels contain 21% of vegetable proteins of a very high biological

order. Quantitatively they are equivalent to soybeans and groundnuts, while
quantitatively they were equivalent to milk, eggs, and meat. A mere presence of
all the aminocides in a food is not enough for nutrition.
Nutritive values of Cashew Kernels
Particulars requirements
for daily diet of a normal Contribution by 100 gm
adult kernels

Calories 3000 - 3500 600g

Proteins 60 - 75g 21g
Carbohydrates 375g 22g
Calcium 0.68g 0.05mg
Iron 0.015g 5mg
Fats 0.68g 47g
Phosphorous 1.44g 0.45g
Vitamin A 4001 u 3221.u
Vitamin B 4001 u 111.u
Vitamin C 46 mg 0
Amino-acid composition of cashew kernels gobbling
Arginine 10.3
Histidine 1.8
Lysine 3.3
Tyrosine 3.2
Phenylalanine 4.4
Cystine 1.0
Methiononine 1.3
Treonine 2.8
Valine 4.5
Chemical composition of Cashew Kernels
Constituents Percentage (%)

Proteins 20.8

Fat 46.8

Moisture 5.7

Carbohydrates 21.8

Phosphorus 0.35

Calcium 0.05

Iron 4.5
Pie chart of Chemical composition of Cashew Kernels
Proteins
Fat
Moisture
Carbohydrates
Phosphorus
Calcium
Iron
Physical characteristics of Cashew Kernels
Particulars Percentage
Aleic acid 59.6
Saturated acid 18
Unsaturated acid 83
Linololic acid 19.62
Palmitic acid 11.14
Stearic acid 8.75
Palmilia acid 0.89
MINERALS
Cashew kernels are a rich source for minerals like calcium, calcium,
phosphorous, and iron. Shore minerals in their organically form protect our
physical health and nervous system.
CARBOHYDRATES
Cashew kernels have a very low content of Carbohydrates, as little as 1% of
soluble sugar. Such a quantity is sufficient to give a pleasant taste without
creating excess energy. Cashew is therefore non flattering and can be safely
consumed by those suffering from obesity and diabetes.
CASHEW INDUSTRIES IN INDIA

Cashew is a drought resistant species, and requires warm, humid climate and
well-drained soil to bear plentiful fruit. It is known to grow on literati slopes, red
soil, coastal sands, and in the area where the annual rainfall ranges from 800mm
to 3000mm. this type of climate is wholly present in India.
The cashew industry has grown in number in recent years, due to following
reasons.
1. Many private industrialists have come forward to start cashew industries.

2. The Government under its plan gave importance the production of raw
cashews.
3. Cashew tree can be grown in any inferior soil.
Thus it is called as ‘Waste Land Crop’
In India most of the factories are situated in Kerala and Tamilnadu and
accounts for 90% of the total export from India. Other than Kerala and
Tamilnadu, cashew-processing units are situated in Goa, Karnataka and
Andrapradesh. In India there are about 450 big units which process more than
250 bags per day.
CASHEW INDUSTRIES IN DAKSHINA KANNADA

In Karnataka, most of the industries are located in Dakshina Kannada. Here,
the industry has grown in small-scale sector. This is in line with the new
industry that favors the small-scale industries and believes in distribution of
profits with many rather than concentrating wit few. The young entrepreneurs
have utilized facilities given by District industrial Center for small scale sector
to work efficiency and come up with industries of their own.
In 1994-1995, there were about 130 cashew industries in Dakshina Kannada

district. The major of the cashew factories are partnership firms. This is not
because of the requirements of huge investment, but the industries ownership
being transferred through lineage.
In recent years, a lot of people who are involved in other industries try their
entrepreneurial skills in the cashew industry. Cashew nuts industry needs a
strict supervision and constant vigilance.
The people, especially the whether in the district and the neighboring
places, and they have to forecast the production of raw nuts and approximate
raw nut prices.
CASHEW INDUSTRY IS DIRECTLY PROFITABLE BECAUSE
1. Cashew plantation does not require fertile soil.

2. Cashew cultivation does not require any irrigation and it can yield well even
under conditions of acute shortage of water.
3. Cashew gives highest return among all plantation crops.
4. Cashew processing does not require highly skilled labourers and any person
can manage it.
5. Cashew is most easily marketable commodity.
6. The price of cashew generally increases from years to year which assures a
minimum amount of profits.
7. Cashew industry can be started with minimum investment on machinery.
REASON FOR THE LOW YIELD OF CASHEW:
1. Cashew nuts plantations in India were predomiliontly raised from seeds of

poor genetic stock
2. If the cashew is plucked by holding at tendernal or with a stick, the result
may be that the nuts and flowers get damaged.
3. The unfavorable weather conditions, especially the rains during flowering
and fruiting period have adversely affected the cashew crops.
4. The tender nut, weight much less than a matured nut, soothe yield will be
low.
5. Some nuts crocked at the time of growth.
6. The infection of pests is another major reason for low yield. They demolish
the whole tree.
CHAPTER-3
COMPANY PROFILE
HISTORY OF FIRM
Kalbavi Cashew is a leading manufacturing and exporter of cashew kernels
in South India. It was established on 1 st May 1987. They are registered partnership
concern with the experience of over 5 decades in commodities like cardamom,
pepper, areca nuts, copra, food grains, pulses and other forest products.
As their initial investment, they had invested capital of rs.24lakhs out of

which 12lakhs was used as working capital by the firm.
If they had to establish a similar firm now, they had to invest Rs.1.25crore
for plant and machinery and building and same amount had to be kept as working
capital requirement.
Kalbavi cashew industry is mainly a partnership concern. Mr. Ramachandra
rao, Mr. K. Prakash rao and Mrs. Gowri.p.rao own it. They are sharing their profit
in the ratio of 4:4:2, i.e.
Mr. Ramachandra rao 40%
Mr. K. Prakash rao 40%
Mrs. Gowri P rao 20%
Profit Sharing ratio
20%
Mr. Ramachandra rao

Mr. K. Prakash rao
40% Mrs. Gowri P rao
40%
They have about 225 employees of whom 90% are dedicated women. Who
are highly skilled for this work, the unit has managed to get an annual overall
growth of over 15% during last 5years and unit has to also strive to meet all the
regulatory requirements of state Government and has also contributed to the
economy by generating employment opportunities.
They manufacture premium quality from very selective raw nuts in a very
hygienic environment. The employee efficiency is one of the best in the industry
as they are well trained and motivated to meet the stringent standard set by
them.
PLANT
The plant is established in the industrial area, Baikampady, New Mangalore
on a sprawling one-acre land has a processing facility of over 10,000 square feet
and 5,000 square feet of warehouse. It is ideally located at just 3km from the New
Mangalore Port and 15km from the Mangalore airport. It is well connected to the
National highway No17 is just 15mins by road from the city.
The plant is established on 1acre land, 9000 square feet of processing
facility and 4000 square feet warehousing. The land was allotted for purpose of
Industrial Development by KIADB (Karnataka Industrial Area Development Board).
They have their registered office at the heart of the trading center-Bunder, which
infact is on the banks of the old seaport.
Systematic plant layout adopted by the Kalbavi Cashew gives them certain
advantages like
 Economies in handlings.
 Effective use of available area.
 Minimization of production delays.
 Improved quality control.
 Avoidance of bottlenecks.
 Better supervision.
 Improved utilization of labour.
 Improved employee morale.
BANKERS OF THE UNIT

Kalbavi cashew has been banking with Canara bank, Bunder branch, port
road, Mangalore from its establishment to date. The bank has been lending
financial support to the unit in the form of project assistance and working capital
requirements on a sustained basis throughout the period.
INSURANCE COMPANIES
Kalbavi cashew is associated with oriental insurance company. This
company has offered several types of policies. One among this is declaring
Policy, as per this policy, the unit is allowed to declare the stock of raw materials
and finished goods every month and the insurance company only on the amount
so declared by unit will charge the premium.
ORGANIZATION STRUCTURE
Organization requires the creation of structure relationship among different
departments and the individuals working there for the accomplishments of
desired goals. The establishments of formal relationship among the individuals
working in the organization is very important to make clear the lines of authority
in the organization and to co-ordinate the efforts of different individual in an
efficient manner.
ORGANIZATION CHART
An organization chart is a diagrammatized form that shows important
aspects of an organization including the major functions and their respective
relationship. In other words, it is a graphical portrayal of positions in the
enterprises and of the formal lines of communication among them.
It provides a bird’s eye view of the relationship between different

departments or divisions of an enterprise as well as the relationship between the
executives and subordinates at various levels.
The following is the organizational structure of Kalbavi cashews.
Managing Partner
Manager Account Godown

Manager
Supervisor Supervisor Supervisor

(Peeling) (Packing & (Shelting) PEON
Grading)
FIXED ASSETS STRUCTURE OF KALBAVI CASHEWS

(As per Balance sheet)
2005- 2006- 2007-

PARTICULAR'S 2006 2007 2008
FURNITURE: -

As per last balance sheet 41749 37574 71062

Add: - Additional Nil 39337 14000

41749 76911 85062
Less: - Depreciation 4175 5849 7806
37574 71062 77256

WEIGHING SCALE: -



49679 63577 65317


42227 54817 55519

MACHINERY: -


Add: - Additional 85365 342894 398220

Less: - Subsidy record 143674 15310 15310

76885 101925 162028

471617 697276 918158

MOTOR CAR: -


Add: - Additional Nil Nil 748500

1056650 937777 797110

Less: - Sale Nil Nil 298400


937777 797110 1116265

MOTOR CYCLE: -



36188 30760 26146

CYCLE: -


Add: - Additional 2366 Nil 5516

3666 3116 8165


Less: - Sale 1225

3116 2649 5715
COMPUTERS: -


Add: - Additional 35464 Nil 39778

65937 37014 54584


37014 14806 21834

GENERATOR, REFRIDGERATOR AND

INVERTOR: -



22770 27724 48465


19354 23565 43062

BUILDING: -


Add: - Additional 226310 829650 Nil

1899652 2561968 2312048

Less: - Subsidy record 51690 51690


19354 23565 43062

BOREWELL: -


LAND: -


INVENTORY MANAGEMENT
Good inventory management is important for successful operation of most of
the organizations. Unfortunately, the top management does not always
appreciate its importance. This may be due to a failure to recognize the link
between inventories and achievement of organizational goals or due to ignorance
of the impact that inventories can have on cost and profits.
An inventory is a stock of goods that is held for future use. Then, naturally,
many of the items a firm carries in inventory relate to the items a firm carries in
inventory relate to the kind of business it engages in. thus, manufacturing firms
carry supplies of raw materials, purchased parts, partially completed items and
finished goods as well as spare parts tools and other supplies.
Thus, Kalbavi cashews also maintain inventory for storing Raw Cashews for
future production. It has an area of 10,000sq.ft each. There are 10,000 bags of
75kgs of raw cashews, which are imported from different places and are stored in
these 2 godowns.
HUMAN RESOUCE
The laborer’s stand as the backbone of any industry. When it comes to
cashew industry while it cannot be undertaken without labourers taking part
activity.
Labourer’s are totally connected and also involved in making of cashew

kernels. From the raw cashew nut till final kernels, labourer’s full attention,
concentration and devotion to their work should be the level best to get the
maximum output. So every superior in the organization motive his subordinate
for the right type of behaviour.
The industry has good service conditions, the company could gain a better
employee and employer relationship if concern is providing better relationship if
concern is providing better conditions of service and has undertaken many
welfare measure which is rarely found in other cashew industries. Here things are
motivating the employees.
There are around 236 workers out of which
1- Staff 5
2- Helper 7
3- Female employees 224.
Most of the employees have good experience for more than 5years. The
employees are satisfied with their job, welfare schemes, safety and working
condition or environment. Good recognition is given to motivate them.
Employees are well committed to their work by co-operation each other.
There exists good relationship and co-ordination among management and
workers. In case of grievances, employees directly contact the management
and there will be good response from management.
SOURCES OF LABOUR
As the unit is located in Baikampady, there is ample available of labours. The

people searching for work will mostly be from poor class family. They need not be
highly qualified, a full knowledge of the work is enough for them to be employed;
the managing partner Mr.Prakash rao himself takes their interview and employs
them.
WORKING CONDITION
Employees working condition play a very important role in every industry

because of which industry has good working condition. Their workers can be
happy and production will improve. Working condition in factories is regulated by
Factories Act 1958. Which provide for health, safety and welfare of workers and
precautions to be taken in case of hazardous process, minimum standards of
lighting ventilation.
And accordingly the workers have to work for 8 hours a day, i.e. from
8:30a.m to 12:30p.m and again 1:00p.m to 5:30p.m. Sundays are holidays. Apart
from this they have festival holidays with wages and also one day leave for every
20 days of work. These can be accumulated and encashed at the end of the year.
WAGE STRUCTURE
Here, wages are paid on piece rate system and thus it motivates
employees. P.F contribution is at 12% by both employees and employer. For ESI
employer contributes 4.75% where employee contributes 1.75% wages paid as on
[5-1-2009 to 11-1-2009]. Bonus given to employees will be fluctuating and last
year it was 13% of basic and D.A. the workers are paid weekly.
SHELLING DEPARTMENT [73 workers]
Basic 35,853.60

D.A 7,275.60

43,129.20

(-) P.F 5,172

(-) E.S.I 756.65

(-) Others 869.00

Net Wage 36,331.55
PEELING DEPARTMENT [102 workers]
Basic 39265.2

D.A 10955.7

Over time 1803

52023

Less: - P.F 6243

E.S.I 913

Others 722.55

44145.3

GRADING DEPARTMENT [31 workers]
Basic 11992.2

D.A 3341.85

15334.1

Less: - P.F 1841

E.S.I 268.6

Others 118

13106.5

STAFF as on [31-12-08]
Basic 53042

Less: - P.F 6365

E.S.I 928.4

Profession tax 240

45509.55

PRODUCTION PROCESS IN KALBAVI
Technical process
The nuts are fed to the cashew cooker and cooked by steam generated in
the boiler for around 45 min. these nuts are cut into 2 halves with the help of
cutting machine. The sheller then shells the cashew kernels. The kernels are kept
in the tray in the drying chamber called Borma. They are then pooled, graded and
filled in the tin containers, each weighing 11.34kgs. The carbon di oxide gas is
pumped in the container to flush out the air. The total working process takes
8days.
PLANT AND MACHINERY USED FOR MANUFACTURING IN KALBAVI

CASHEWS
Partners have modernized the present unit at total cost of rs15.15lakhs. The
details of machinery are as under.
A- Modernized hot air bowing type heat exchange: (Rs4.40lakhs)
The existing borma to dry the kernels was old, conventional resulting in higher
heating time uneven heating, large percentage of heating kernels and high fuel
cost. The new machine is a modern hot air blowing type. Heat exchanger at a cost
of Rs.440lakhs. The hot air will be directly blown over the kernels ensuring faster
and uniform heating resulting in a lower percentage of rejected (scorched)
kernels. The capacity of the machine is to dry 1000kgs of kernels in 18hrs. (60bags
x 1day RCN capacity)
B- Cashew cutting machine: (Rs.0.30lakhs): -
Additional 8 number of cashew cutting machines are installed to increase the

cashew cutter, Strength from existing 40 to 48 numbers. It is also proposed to
replace existing old cutter. Thus a total of 16 cutters, thus currently it has 48
cutting machines.
C- Moisture fans for humidifier: (0.26lakhs)
To avoid the breaking of kernels in the tin during transportation, a small

amount of moisture is important to the kernels before it is packed in the tin
containers. The trays filled with the kernels are kept in a room called moisture
room. A fan is blown over a surface of water to route a thin must to moisture the
process takes around 24hrs to bring the moisture content to around 2%.
D- Packing machine: (Rs.1.75lakhs)
Which is modern packing machine and it is used for removing the dust from the
cashew nut packet. Modern packing machine is called Vital packing machine.
MANUFACTURING PROCESS OF CASHEW NUTS

The processing of raw cashew nut takes 9days, which can be explained as
below.
1. Drying nuts in the hot sun 2days

2. Roasting and cooling 1day
3. Cutting 1day
4. Hot chamber 1day
5. Cooling 1day
6. Peeling 1day
7. Grading 1day
8. Moisturizing and Packing 1day
PRODUCTION PROCESS
1. ROASTING
The process of production starts with drying the cooked raw cashew nuts in
sunlight for 2days. Then the dried cashews are transferred to the steam roaster
where the roasting of cashews will take place. The steam roaster consists of big
drum with many cross section pies. The steam passes through all these pipes,
making the nuts half roasted. This process takes about 30-35 min at a 5kg
pressure or 100c to 110c. /after the raw nuts are roasted, they are removed from
boiler and allowed to cool for 24hrs.
When the nuts are roasted, the kernel that is closely held by shell gets
loosened. As the result the kernels can be extracted as wholes from the shells.
Since the oil remains in the shell, the workers are assured of safety to some
extent.
In Kalbavi cashews, there are 3 boilers for roasting. Capacity of each boiler is
300kgs i.e. 4 bags of 75kgs. So, the capacity of 3 boilers together is 75kgs x 4bags
x 3boilers. Male employees carry on this process, as it requires lots of energy.
2. SHELLING
Shelling is a process where Cashew kernels are separated from its shell,
cutting machines is used for this purpose.
The cutting machine consists of 2 blades which, when brought close with
the help of pedal, comes to the depth of the shell and the hand lever is pressed to
open the shell into 2 halves.
The pressure exerted by both the foot and the hand should be regulated so as to
cut only the shell but not the Kernels.
In Kalbavi cashews there are 48 cutting machines, each operated by 2

workers, one to the shell and other to separate the kernel from the shell. So in
total 96 workers are employed in cutting section of Kalbavi cashews.
The supervisors look after the workers so to see that most of the kernels
are shelled as wholes and that no kernel is thrown off with the shells. The main
defects of cutting machines are
A. The oil coming out will react on hand in spite of using castor oil.
B. This requires skilled workers; there are chances of the worker getting injured
because of uneven size of nuts.
3. DRYING
The Kernels after they are removed from the shells, has to be dried in order
to loosen for peeling the red skin adhering to the kernels. A tray drier called “
BORMA” is used for this purpose. There are chambers indirectly heated on three
sides by means of fuel. Each tray can hold 35kgs of nuts. A temperature of 75c-
80c is maintained in the chamber.
The kernels are kept in for 8hrs. After the kernels are heated they are
removed and kept for cooling for 24hrs, then they are sent for peeling.
4. PEELING
Peeling is the process of removing the skin from the kernel. The skins so
removed are known as the husk. This work is usually done with the help of female
workers. These workers are provided with small knife and some vessels to put the
wholes, bits and butts separately.
In Kalbavi cashews there are about 105 peelers, each worker peels about
10-12kgs of kernels a day. The husk obtained is used for the manufacture of
soaps.
5. GRADES
After peeling the kernels, they are sorted out into wholes, splits, and butts
pieces etc. depending on the size of the kernels according to the specifications.
Grades are based on the shape, size and color of the kernel, they are graded
into white or scotched wholes, pieces, splits, butts etc. the government of India
act prescribes 33 different grades of cashew kernels of which only 26 grades are
commercially available and exported.
Grade Trade Color/Characteristic Count/454grams, size,
Designation name s description

White White/ pale ivory/ light ash

W- 180 wholes characteristic shape. 170 - 180

Kernels shall be completely free

infestation, insect damage mould,
W- 210 Do rancidity 200- 210

Adhering test and objectionable

W- 240 Do extraneous matter 220- 240

W- 320 Do - 300- 320

Kernels free from black or brown

W- 400 Do spots 350- 400

Kernels may be scorched or

slightly darkened due to over
Scorched heating while roasting or drying in
SW wholes drier. Not applicable

SW- 180 Do - 170- 180

SW- 210 Do - 200- 210

SW- 240 Do - 220- 240

SW Scorched Kernels may be scorched, Not applicable

wholes immature, shriveled (perival)
speckled (karaniram), discolored
seconds red & light blue.

Kernels may be deep scorched,

Desserted deep brown, deep blue speckled,
DW wholes discolored & black spotted Not applicable

White/pale ivory or light ash

kernels broken cross-wise (evenly
B Butts or unevenly) naturally attached Not applicable

White/pale ivory or light ash

S Splits kernels split naturally length wise. Not applicable

Large Kernels broken into more

white than 2 pieces & 16SWG
LWP pieces White/pale ivory or light ash sieve/1.75mm T.S sieve.

Smaller than SWP, but not

passing through a 10 mesh
24swg sieve 1.70mm i.s
BB Baby bits White/pale ivory or light ash sieve

Broken kernels smaller

then those described on
Small Kernels broken crosswise Lwp but not passing
white (unevenly or evenly) & naturally through 6 mesh 20swg
SWP pieces attached sieve/2.80mm i.s sieve

Kernels may be scorched/ slightly

darkened due to overheating while
roasting or drying in drier/ Borma.

SS Scorched Kernels splite naturally lengthwise. Not applicable

Kernels may be scorched/slightly
darkened due to overheating while
splits roasting or drying in drier/ Borma.

Kernels may be scorched/ slightly Pieces not passing through

Scorched darkened due to overheating while a 4 mesh SWG sieve/
SP piece roasting or in drier/ Borma. 4.75mm 16 I.s sieve

Pieces smaller than SP but

Scorched not passing through a 6
Small mesh 20SWG
SSP pieces Do sieve/2.80mm I.S sieve

Kernels may be over scorched Kernels broken into pieces

Scorched immature shriveled (perival) but not passing through a
pieces speckled (karanivam) discolored & 4mesh 16 SWG sieve/
SPS seconds. light blue. 4.7mm sieve

Kernels broken into pieces

Kernels maybe deep scorched, but not passing through a
Dessert deep brown, deep blue, speckled, 4mesh 16 SWG sieve/
DP Pieces discolored & black spotted. 4.7mm i.s sieve

Desert
DS splits Kernels split naturally lengthwise -

Kernels broken crosswise &

Scorched naturally attached & are called
SB Butts Butts. -

Desert Kernels broken crosswise &

DB Butts naturally attached. -

6. CONDITIONING
During the summer months, the kernels become very dry during processing.
If such kernels are packed, they may break during transit. To avoid this, it is
necessary to recondition the nuts to uniform optimum moisture before they are
packed.
This is alone through imparting a small amount of moisture to the kernels,

before it is packed in the containers. The trays filled with the kernel are kept in a
room called moisture room. A fan is blown over the surface of water to route thin
moisture. The process of bringing around 1-2% of moisture will take 24 hours.
7. PACKING
After the necessary moisture is given to the kernels, they are packed in
tins. As soon as the order comes, they pack cashew in necessary flexi pouch of
11.34kgs or consumer pouch of 100gm, 250gm, 500gm & 1kg.
BY PRODUCT
The outer shell that is separated from the kernel in shelling process is a by-
product. This shell is used to manufacturing Cashew Nut Shell Liquid (CNSL). CNSL
is a versatile industry raw material, which has application in polymer based
industrial goods such as friction linings, paints and varnishes, laminating resins,
cashew cements, polyurethane based polymers, surfactants, epoxy resins,
foundry chemicals and intermediates for chemical in India and abroad.
The cashew shell price is highly fluctuating. The market fixes the price. The
current price of these shells on an average is Rs.5.50per kg.
The outer shell after removed of kernel and extraction of CNSL can be used
as fuel. The cashew industry buys these shell cakes and uses it for the heating of
borma by burning them.
This shell can be used for the manufacture of particleboards for the
packaging. Presence of residual CNSL in the shells makes this board’s moth and
heat resistant.
From the brown skin (testa of the kernel) Tannin can also be extracted. It
can be used in leather industry.
The price of husk is also fixed by market; the current price is Rs.6.50 per kg.
Thus, there is nothing called as waste in a cashew industry. The shell can be
sold for extraction of CNSL and after the extraction; they can be used as fuel for
heating the Borma. The husk can be used for manufacturing of soaps and poultry
feed.
PROCESS FLOW OF MANUFACTURING OF CASHEW KERNELS
DRYING YARD GODOWN ROASTING
COOLING
SHELLS CUTTING
HOT CHAMBER
(Borma)
HUSK REJECTS
PEELING
REJECTS GRADING
MOISTURING
PACKING
POUCH PACKING
TIN PACKING
Consumer Pouch FLEXI POUCH

100gm/250gm/500gm 25/50 Lbs 25lbs
(11.34/22.68kgs) (11.34kgs)
CHAPTER 4
MARKETING MANAGEMENT
MARKETING
Marketing is as old as human civilization. History of mankind is full of
developments resulting from a gradual process of evolution and modern
marketing is no exception to this rule. Now marketing has developed into a full-
fledged discipline. Many managers consider marketing as the most important of
all management functions in business, industry or service undertakings. Managers
have now realized that the success of any enterprise depends on how efficiency
they handle marketing.
Marketing is the core of the economy, surrounded by finance, production,

logistics and other functions. On a sound marketing system depends our growth.
A health marketing system is always responsive to the consumer and the society
for goods and services, efficiency and low cost.
CONCEPTS OF MARKETING
The meaning of the term “Marketing” can be studied under two heads.
(1) Traditional or old marketing concept.
(2) Modern marketing concept.

TRADITIONAL OR OLD MARKETING CONCEPT
At the very outset, it must be understood that even according to the old or
traditional marketing concept, the term “Marketing” does not refer to mere
selling (exchange of goods for money between the seller and the buyer) or mere
distribution of goods. The term includes not only the process of distribution, but
also the process before distribution, but also the process before distribution. In
other words, it consists of all those activities or operations, which help the flow of
goods from the producers or manufacturers to the ultimate consumers or users.
In short, it is the sum total of all those activities which are related to the flow of
goods from the point of consumption or use.
Goods have to be transported or moved from the centers of production to

the centers of consumption or use, in other words, place utility has to be created.
Secondly, goods have to be made available to the ultimate consumers or users at
the time when they are needed. That means time ultimate has to be created.
Storing the goods in warehouses until they are needed and supplying them from
the warehouses when the consumers or users demand them can create time
utility. Lastly the ownership and the possession of goods are to be transferred
from the producers to the consumers. I.e. there should be the creation of
possession or ownership utility.
The various activities that help in the creation of place, time and possession
utilities and direct the flow of goods from the centres of production to the centres
of consumption or use constitute the subject matters of marketing. This is the
meaning of the traditional concept of marketing. This is also the meaning of
marketing in the economic sense.
In the words of Tousley, Clark and Clark, “Marketing consists of those efforts
transfer in ownership of goods and care for their physical distribution. “According
to Ralph S. Alexander and others, “Marketing is the performance of business
activities that direct the flow of goods and services from producer to consumer or
user”.
From the above discussion, it is clear that, according to the traditional

marketing concept, marketing is a mere physical process or set of activities
connected with the exchange of goods or selling. In short, according to the
traditional marketing concepts, marketing is “Sales oriented”.
MODERN MARKETING CONCEPT
Marketing is not considered as a mere physical process or set of activities

connected with the exchange of goods. It is considered as a philosophy of business.
It is concerned with the creation of customers, i.e. identifying the needs of the
consumers and then organising the business accordingly to meet the needs of the
consumers. In short, modern marketing is “consumer oriented”.
The change in the concept of marketing is mainly due to three reasons.
They are:
(a) First, there is an element of innovation involved in modern business.
(b) Secondly, there has been a change in the objective or purpose of business in
recent years. The changes in the purpose of business have contributed to the
change in the purpose or objective of marketing.
(c) Thirdly, there has been a change in the attitude of consumers in recent years.
Today consumers are not prepared to buy any thing and every thing that is thrust
on them by the sellers. They are willing to buy only those things, which satisfy
their wants.
For successful marketing, first the needs of the ultimate consumer have to
be ascertained and then, steps must be taken to secure the distribution of only
those goods which the consumers want, in the quantities they want, at the time
they want through the channel that is convenient to them and at the price they
are willing to pay. So, modern marketing refers to all those activities involved in
identifying the present and potential requirements of the distribution of those
goods and services and in securing the distribution of those goods and services
from the centres of production to places where they are wanted, and in effecting
the transfer of ownership and delivery to those who want them.
The meaning of modern marketing concept has been clearly brought out by
the following definitions. In the words of C.C Knight, “Marketing embraces all
efforts made in the discovery of consumers’ actual and potential requirement for
commodities and services and the steps taken for securing their actual
distribution,”
“According to Cundiff and Still, “Marketing is the business process by which

products are matched with the market and through which transfers of ownership
are affected.”
FEATURES OF MODERN MARKETING

Modern marketing has certain characteristic features. The main features are
1. Modern marketing is consumer oriented or consumer is the king under modern

marketing.
2. Modern marketing begins and ends with the consumers.
3. Modern marketing precedes and succeeds production.
4. Modern marketing is the guiding elements of business.
OBJECTIVES OF MARKETING
1. The most important objective of modern marketing is the satisfaction of
customers want and needs.
2. Profit maximization is another important objective of marketing. This objective

is important for a firm, because, without earning a decent profit, no form can
exist in the market.
3. Effective distribution of goods is yet another objective of modern marketing.

IMPORTANCE OF MARKETING
As stated earlier, production of goods and services with is meaningless,
unless the goods and services produced are moved from the places of production
to the places where they are required, at a time when they are needed and are
transferred to those who want them. The movement of goods from the producers
to the consumers can be done only through the process of marketing. So,
marketing plays an important part in the economic system of a country. It plays a
significant role not only in capitalist countries, but also in the socialist or
communist countries. The significant of 50% of the price paid by the ultimate
consumers for a product goes to those participating in the various marketing
activities.
1. Marketing makes goods and services more useful to the society by creating
place, time and possession utilities, i.e., by moving them to places where they are
wanted, when they are wanted and by transferring them to those who want
them.
2. Real marketing implies the identification of the requirements of the consumers

and the supply of only those goods and services which the consumers to get what
they want.
3. Efficient marketing reduces the cost of distribution. The reduction in the cost of
distribution results in lower prices for the consumers.
4. Efficient marketing ensures full and complete flow of goods and services
continuously from the centres of production to the centres of consumption. It
contributes to the maintenance of high level of economic activity.
5. Efficient marketing is the strongest bridge between production and

consumption. That means, marketing contributes to a healthy balance between
production and consumption. This balance between production and consumption
contributes to the avoidance of cyclical fluctuations like boom and depression and
the promotion of economic stability.
6. By providing employment to millions of people, marketing contributes to

increase in the incomes of the people.
7. Efficient marketing contributes to the fuller utilization of the available resource,

and thereby ensures maximum output and supply to the society.
8. It mobilizes potential and untapped economic energy for economic

development.
9. It can inspire innovators or entrepreneurs to take up new activities. For
instance better marketing facilities for handloom goods, handicrafts and farm
products have inspired and encouraged a large number of people of India to
engage in these lines in recent years.
10. Marketing helps to raise the standard of living of the community.
BENEFITS OF MARKETING
1. Marketing helps the business firms to earn more profit. It provides many
opportunities to the business firms to earn profit in the process of buying and
selling of goods by creating place, time, and possession utilities.
2. Marketing is the ‘Eye and Ears of a business’. That is, it gives to the firm
continuous market information. i.e. Information about the changes in the
fashions, styles, habits, likes, dislikes, preferences, etc, of the consumers, and
thereby, helps the firm to adjust its production according to the changing
conditions in the market.
3. It serves as the basis for decision-making. Through the mechanism of

marketing, a business firm will be able to collect information as regards the needs
of the consumers and take proper decisions as to what to produce, how much to
produce, when to produce and where to produce.
4. Marketing converts latent demand into effective demand.
5. It helps to expand the market for a product.
6. The process and the volume of production depend upon the successful
performance of the marketing operations.
7. Marketing, with its specialized functions performed by specialists, reduces the

time involved in the task of exchange.
8. Marketing provides the working capital required by a firm, in the sense that it is
the sale proceeds of goods that serve as the working capital of a concern.
MARKETING FUNCTIONS
Meaning of marketing functions
Marketing involves a number of major specialized functions.
The major specialized functions involved in marketing are known as marketing

functions. Tousley, Clark and Clark have defined marketing function as “a major
specialized activity performed in marketing”.
VARIOUS MARKETING FUNCTIONS:
1. BUYING AND ASSEMBLING:
Buying in marketing implies buying of goods by manufacturers for use in

production, or middlemen for resale, and not buying of goods by consumers for
final consumption. Buying refers to the purchase of the right type of goods, in
right quantity, at the right price.
Buying function is one of the fundamental functions of marketing. Every

manufacturer is required to buy raw material of the required quality in sufficient
quantity for use in production. Every wholesaler is required of buy the right type
of goods in sufficient quantities for resale to retailers. Every retailer is required to
buy a variety of goods in sufficient quantities for resale to the ultimate
consumers.
Assembling is a function separate from buying. It starts only after the

buying is over. When goods are purchased by a manufacturer or a dealer from a
number of suppliers spread out in different places, naturally, the goods purchased
at different places have to be collected at one central point or price under the
control of the buyer. Collection of or bringing together of the same type of goods
bought from different places at one single or central point is known as
assembling.
Assembling of goods facilitates transportation of goods in bulk, and

thereby, contributes to economy in transport cost. Further, it ensures adequate
and continuous supply of the goods required/
2. SELLING
Selling is the sum total of all those marketing activities that help in the
disposing or transferring of goods by sale from the seller to the buyer at a
profitable price. It is concerned with the creation, maintenance or expansion of
market for a product.
Selling is the end function of marketing. It is a very important function of

marketing, as sales are the lifeblood of a business.
3. TRANSPORTATION
Transportation refers to the physical movements of goods from places of

production to places of consumption.
Transportation is an integral part of marketing. It creates place as well as

time utility and adds value to the goods. Infact, it accounts for much of the value
added to the goods by marketing. It is responsible for geographically
specialization of division of labour, large-scale production and mass selling.
The transport function of marketing involves the selection of particular

mode of transportation, depending upon the speed and cost.
4. STORAGE AND WAREHOUSING

Storage refers to the holding and preserving of goods between the time of
their production and the time of their sale. The storage function is facilited by
warehouses.
5. STANDARDISATION AND GRADING
Standardization refers to the establishment of certain standard for a

commodity on the basis of its intrinsic physical properties or qualities, such as its
size, shape, colour, strength, weight, taste, ripeness, chemical content, etc. a
standard conveys the idea of uniformity, i.e., uniform quality.
Grading is the process of sorting out or classifying the goods into different
grades or class on the basis of the established standards.
6. FINANCING
Financing functions of marketing refers to the provision of finance for

meeting requirements of the various agencies engaged in the various marketing
activities. In the words of Stephenson, “The service of proving the credit and
money needed to meet the costs of getting merchandise into the hands of the
final user is commonly referred to as the financing function of marketing”.
7. RISK-BEARING
Marketing involves a number of risks owing to unforeseen contingencies or
happenings. There may be decay or deterioration of goods in warehousing; there
may be loss of goods due to fire, flood, cyclone, earthquake, etc. Goods may be
lost due to pilferage or theft goods may become unsaleable due to change of
fashion and competition. There may be losses due to fluctuations in prices. Debts
may become irrecoverable. There may be loss of potential profits.
Some of the risks in marketing can be avoided or minimized through proper

planning. Some of the risks can be shifted to others through insurance and
hedging. But certain risks like loss of potentially profit cannot be shifted to others.
They have to be shouldered or borne by the entrepreneurs themselves. So, risk
bearing is one of the important functions of marketing.
8. MARKETING INFORMATION
Marketing information refer to information about the marketing

conditions, i.e. information about the number of consumer, their location, their
requirements, purchasing power, preferences, buying motives, etc.
The function of marketing information refers to the collection, analysis and

interpretation and dissemination or communication of marketing information to
the concerned people for efficient marketing.
INTERNATIONAL MARKETING
International marketing can be defined as “Marketing carried on across

national boundaries”. According to Hess and Cateora, international marketing is
“The performance of business activity that directs the flow of goods and services
to consumers or users in more than one nation”.
NATURE AND SCOPE OF INTERNATIONAL MARKET

1. Political and legal Differences:
The political and legal environment of foreign markets is different from that
of the domestic. The complexity generally increases. However, attempts are being
made to bring about uniformity in international trade laws.
2. Differences in marketing infrastructure
The availability and nature of the marketing facilities available in different

countries may vary widely, for example, an advertising medium very effective in
one market may not be available or may be underdeveloped in another market.
3. Trade restrictions
Tariffs, quotas and exchange controls are important problems, which an
international market faces.
4. Difference in procedures and documentation
Each country has its own procedure and documentary requirements and
traders have to comply with these regulations if they want to export or import
goods from foreign countries.
5. Different monetary systems
Each country has its own monetary system and the exchange value of each
country’s currency is different from that of the other. For some time, the
exchange rates were more or less fixed. Since 1973, the exchange rates are
fluctuating and are being determined by forces of supply and demand. Some
countries also operate what are known as multiple exchange rates, each exchange
rate applying to certain set of transactions.
6. Greater degree of risk
There is greater degree of risk involved in international marketing than in

domestic marketing due to (1) larger volume of transactions and higher value of
these transactions, (2) longer time period involved in those transactions due to
longer time in transit and the longer credit period involved, and (3) comparatively
less knowledge about the parties’ reputation and creditability. There is also the
exchange fluctuation risk.
7. Lower mobility of factors of production
Factors of production are less mobile as between nations than in a country

itself. However due to the advent of air transport, mobility of labour is now
increasing. Due to the development of international banking, capital is also
becoming more mobile. However, in spite of these, the fact remains that mobility
of labour and capital is much less between different nations than it are within the
country itself.
8. Cultural dimensions of international marketing
Exporting means operating in a cross-cultural environment. This makes the

task of marketing more complex because the marketer must appreciate how
different is the foreign culture from his own and how this difference has to be
reflected in shaping his behavior pattern as well as his export marketing strategy.
SCOPE OF INTERNATIONAL MARKETING

Through international marketing is in essence export marketing broader
connotation in marketing literature. It also means into international market by.
(a) Opening a branch/subsidiary for processing, packing, assembling or even

complete manufacturing through direct investment.
(b) Negotiating licensing/franchise arrangements whereby foreign enterprises are

granted the right to use the exporting companies know how patents, processing
or trade marks, with or without financial investment.
(c) Establishing joint ventures in foreign countries for manufacturing marketing.
(d) Offering consultancy services and undertaking turnkey projects abroad.
DIRECT EXPORTING
In direct exporting, the exports are undertaken directly by the
manufacturing firm. The manufacturing firms make its own arrangements to
export its products either within the existing sales network or by creating a
separate export department or division. These types of exporters are known as
Manufacturer Exporters.
INDIRECT EXPORTING
In this case, the manufacturers do not directly export to foreign buyers. The
manufacturer exports through intermediaries such as;
 Merchant exporters
 Export houses
 Trading houses
 Star trading houses
 Super star trading houses
 Export Consortia or Cooperative group
 Government Agencies such as STC, MMTC, and so on,
These intermediaries are known as indirect exporters.
TERMS OF SALES or DIFFERENT TYPES OF QUOTATIONS
There are a number of trade terms used in international trade to express

the sale price and the corresponding rights and responsibilities of the seller and
the buyer. International Chamber of Commerce calls these terms “Inco terms” or
International commercial terms.
TYPES OF PRICING
1. LOCO price
2. On the Spot Price
3. At station Price
4. Free on Rail (FOR) price.
5. Free Along Ship (FAS) price:
6. Free on Board (FOB) price

7. Cost and Freight (C & F)
8. Cost, Insurance and Freight (CIF) price
9. Ex-ship price
10. Franco price.
TERMS AND MODES OF PAYMENT OF LAYMENT IN EXPORT
 Cash with order

 Document against payment
 Document against acceptance
 Consignment sale
 Open a/c sale
 Bills of exchange
 Letter of credit
CHAPTER 5
MARKETING MANAGEMENT IN KALBAVI

CASHEWS
IMPORTANCE OF MARKETING IN KALBAVI CASHEWS

Though the Cashew industry indeed is of recent origin, the demand for the
consumption is increasing day by day. In such an atmosphere of stiff competition,
marketing has to play a very important role in creating and maintaining demand
for Kalbavi cashews. Through sales promotion and other marketing strategies,
many untapped and unexploited areas in country and also abroad are conveyed
about the features of its products that can be made available to them.
BENEFITS OF MARKETING IN KALBAVI CASHEW

Cashew products endeavor to create as many customs for its products and
are fulfilled to large extent. By adopting a suitable and effective marketing
strategy.
1. A good marketing system has enabled to respectable profit and excellence.
2. Perhaps the biggest gain to Kalbavi cashews by marketing is that, it enables the
firm to hold itself prosperously in that and enables the firm to hold it
prosperously in today’s competitive situation.
3. Marketing has indeed been helpful to Kalbavi cashew to adjust their production
pattern to suit the current demand.
4. Marketing has also helped Kalbavi cashews in cutting through geographical

boundaries and making its products available in many corners of the world.
MARKETING MANAGEMENT OF KALBAVI CASHEWS

The marketing programmes of kalbavi Cashews are designed to accomplish
the goals and objectives of the factory. The firm has adopted marketing with a
view to successfully sell its product in the market. Its marketing mix has always
focused attention on attaining the best possible results for its products, so as to
enable the company to realize and fulfill goals set by its partner such as profit,
return on investment, sales volume, creditable market share and many more.
Kalbavi cashew’s approaches towards its marketing operations are based on

mainly 3 functions, which is planning, implementing and control of marketing
programme and campaigns.
These functions are briefed below:
1. PLANNING THE STRATEGY FOR MARKETING PROGRAMMES
Planning provides the basis for an integrate co-ordinate marketing strategy.

The idea behind planning to survive grow and proper in the competitive cashew
market.
At Kalbavi cashews, planning consists of assessment of future which reveals

opportunities that are available to find as well as the possible threats or risk
surmounted. Once the opportunities are assessed and most favorable once are
selected, Plan of action is drawn to tackle the opportunities in the most orderly
manner so as to accomplish the desired results to the fullest.
Thus planning place a vital role in Kalbavi cashews by chalking out the
chosen best way in which objectives can be achieved in the best possible manner.
Even in the face of anticipated competitions or against infavourable environment.
2. IMPLEMENTATION OF MARKETING PROGRAMME
After planning the next step involved in the marketing operation of Kalbavi
cashews has to implement the pre planned programmes and campaigns.
The stage involves, putting into practice what was till now on paper, in the
form of a plan. Here necessary steps are taken to implement the programme
effectively and as are pre planned. This function covers every aspect of the
product right from its inspection, design, pricing, distribution, selling and
promotion until it finally reaches the consumers.
Thus by systematic implementation of the marketing programme, Kalbavi

cashews facilitates the flow of cashew Kernels to the satisfaction of its consumers.
3. CONTROL OF MARKETING PROGRAMME
The third function of marketing operation at Kalbavi cashews is marketing

operation at Kalbavi cashews is marketing programme and campaigns. It
undertakes control over marketing programme and campaigns. It undertakes
control over marketing programmes, which has crucial role to play in their
marketing management from the point of view of effectiveness of the
programmes and campaigns.
This function involves the continuous evaluation of the effectiveness of each

part of the marketing mix. At removal of discrepancies and deficiencies
discovered in the actual execution of all marketing plans, policies and procedure.
Allocation or modifications are introduced wherever found necessary.
IMPLICATION OR USE OF ELEMENTS OF MARKETINGMIX IN KALBAVI CASHEWS:
PRODUCT DISTRIBUTION
Product range Channels
Product Service Transport
Brand Inventory control
Package Storage
CUSTOMER
Price Sales Promotion
Discount Advertising
Credit Publicity
Allowance Personal selling
PRICE PROMOTION
Marketing mix represents blending decisions in 4 areas. Product, Pricing,
Promotion and Physical distribution. These elements are interrelated because
decisions in one area, usually affect actions in the others.
Kalbavi cashews has adopted 4 elements of marketing mix to determine

how to satisfy the needs of the customers which led to the growth and
development of the cashew market at the local, national and also international
level.
1. PRODUCT
Kalbavi cashews must decide the products to be produced. Knowing the

needs of customers can do it. In addition to converting the raw cashew into
cashew kernels, the marketing authority has to take a number of decisions
product modifications on the basis of cashew kernels. It combines the physical
product, product decisions, and product modifications on the basis of cashew
kernels. It combines the physical product, product service, brand and package.
The marketing authority of Kalbavi cashew has to decide the quality, types of
goods and service, which are to be offered for sale. Kalbavi cashews offers only a
single product i.e. cashew nut products or multi product. They have to keep their
attention not only towards production right goods but also their shapes, design;
style, brand package etc are of at most importance.
2. PRICING POLICY OF CALBAVI CASHEWS

Pricing is the important and challenging element in marketing function. Here,
pricing acts as signals by which potential buyers and sellers of cashew products
can rationally decide how to allocate their scarce resource. Price denotes the
value of production expressed in terms of money. It regulates business profit,
allocates the economic resources for maximum production and distribution. Thus
it is the prime regulator for production, distribution and hence price is a powerful
marketing function.
3. PHYSICAL DISTRIBUTION (place)
Kalbavi cashews has adopted has adopted the physical the physical
distribution policy, which means the delivery of the cashew nut products at the
right time and at the right place. The distribution mix is the combination of
decision relating to marketing channels, storage facilities, inventory control,
location, transportation, warehousing etc regarding cashew nut products of
Kalbavi cashew.
4. PROMOTION
Kalbavi cashews have adopted promotion policy, which is the persuasive

communication about the cashew products, by the manufacturers for the public.
Kalbavi cashew has undertaken the promotion work in the form of advertising,
publicity, personal selling etc which are the major activities, which may make
cashew kernel products known to consumers and thus the public, may be
informed of the cashew products and it may be persuaded by the customers.
MARKETING STRATEGIES ADOPTED BY KALBAVI CASHEWS
In Kalbavi cashews, importance is given to domestic market and hence most

of their products are sold in domestic market and they even export their products
to other countries.
The partner, Mr.Prakash Rao, sets the marketing strategy in Kalbavi cashew.
The managing partner itself does the buying and selling in both domestic and
international markets. The domestic sales are done by the managing partners
itself.
The domestic sales are done through super market claim stores like Aditya
Birla retail chain, food bazaar retail chain, Reliance retail chain etc.
The products are produced in their brand name and it will be acting as the
identification for consumers.
Wholesale buying and selling is mostly done through administration office. It

does not adopt any “Consignment sale” mode for selling its products in domestic
market. Through the above mentioned retail chain stores, enough demand is
created for their products.
As enough demand for products is already created, they don’t need to give
advertisement for their products through any media. But in rare cases they may
go for advertising.
The cashew nut is sold in domestic market in consumer packs of 100gms,
250gms, and 500gms. For local and domestic markets, they mostly go on for
consumer packs. For bulk orders, flexi pouch are used, so usually in domestic
markets, tin package is not required.
The main and only raw material for all the cashew industry would be raw
cashew nuts. Without the raw cashew nuts, the production process can never
cashew nuts, the production process can never start in any cashew industry. The
firms can get the raw materials from 2 markets. i.e. local and international
market. Due to the seasonal production, there will be fluctuation in supply of raw
cashew nuts in local markets. Hence, the firms will have to go for international
markets when there is no sufficient supply in local markets.
LOCAL MARKET:
The local nuts start arriving in the month of journey or early febraury. The
local people bring the cashews directly to the factory or indirectly i.e. through the
purchase counters.
The local people collect the fallen nut from their tree and store it to get a
sufficient amount for selling. The nuts can be saved up to 2yrs or else they may
pool all their raw cashew nut and sell it. This will be a good source of raw
materials for cashew industry. But it is not always reliable.
However, in coastal Karnataka, many short-time business men do the

cashew business; i.e. they collect the raw cashew nuts from the villagers and sell
it to the processors.
The major sources of raw cashew nuts are situated in Dakshina Kannada
district and Coorg district and outside Karnataka like Goa, Ratnagiri district of
Maharashtra are famous for raw cashew nuts.
The cashew processors or cashew manufacturers choose the right place for
purchase based on their processing capacity, selling capacity, quality of the
product desired and prices of raw cashew nuts. The price of raw cashew nuts is
highly fluctuating. The price of raw cashew nuts will be decided in the market
based on demand and supply.
The local purchases are done through purchase bills and cash memos and
both seller and buyer contact each other and determine the price orally. There
won’t be any sort of formal transaction taking place between the sort of formal
transaction taking place between the buyer and seller. The transportation cost
may be borne by either seller or buyer; depending on their communication. But
usually, buyers will have to incur the transportation cost.
In Kalbavi cashews, the cashews are purchased mostly from Goa,

Maharashtra and Kerala and there are done through purchase memos and as
stated earlier, transportation cost is included in price.
IMPORTS
India is a major producer of raw cashew nuts. But in India, the cashew
industry has grown to such a heights that, to cater the installed capacity, the raw
cashew nut has to be imported from other countries.
The major cashew growing countries are situated in South Africa. While
importing the raw cashew nuts, they buy in bulk quantities and import in Kalbavi
cashews are done through reliable international brokers in India and outside
India.
The price may be Cost Insurance Freight [CIF], Cost and Freight [C&F], or Free
On Board [FOB], but in most of the cases, it will be Cost and Freight or Cost
Insurance Freight [CIF]. Ocean insurance is charged per cubic meter (volume
basis). Freight for full container load (FCL) is fixed. It is more economical than part
container load.
For buyers who prefer safety and low risk there is cash on delivery (COD)
type or high sea sales. In cash on delivery sales, the contract is done first and
buyer is entitled to sales only after checking the quantity of nuts. In high sea sales,
the raw nuts are sailed first and the goods are sold in the dock itself. In both the
above types the goods are sold in dock itself and for the safety of seller, there is
100% advance. Here, the buyer has to make 100% advance payment before the
receipt of goods. Payments are made by Demand Draft (DD) of the bank. These 3
kinds of sales not only keep the buyer and seller at the safer side but also prevent
the outflow of previous foreign exchange. The mode of buying at Kalbavi cashews
will mostly be 100% advance payment.
Kalbavi cashews give importance to domestic market itself. But, as there
won’t be sufficient supply, they import raw cashew nuts from various countries
like east Africa, Indonesia, Brazil and Tanjenia.
This year Kalbavi cashew has imported 2000mt of raw cashew nuts of which
a part is used for processing and a part of it is used for reselling it to others.
PACKING FOR LOCAL MARKETS
Packing of cashews in Kalbavi cashews is done under the brand Kalbavi

cashews in nitrogen-flushed packs. They have for the first time introduced an
attractive 500g pouch, which is reversed metalzed on polyester-poly with a
window provision. India’s leading packaging people – paper products Ltd. Thana,
Maharashtra, first introduced this technique on this pouch.
While metallization improves shelf life and discourages imilation packs,

window provides the visibility of cashews to consumers.
In Kalbavi cashews there are 26 grades of cashew commercially available

and these graded kernels meant for local sales are packed in 500gms, 250gm, and
100gm consumer pouch. Those, which are meant for bulk sales, are packed in
gallons (25lbs) tins. Before the kernels are filled in tins they allowed to absorb
moisture for avoiding risk of loss of weight and breakage of transportation.
Each tin is tested for any leak and then weighted prior filing to ascertain the
actual weight.
VITA PACKING
Considering the permissibility of product the vita pack method is adopted. Under
this method, after filling and weighing the tins are vaccuumised and filled with
carbon dioxide Gas. The lid is then soldered, this method prevents infections of
the Kernels, thus increase the shelf life of the kernels.
LABELLING
To indicate the grade and brand name stencils and stickers are used. The label on
the ½ kg packs also indicates the nutritive value of the kernels, net
Weight, Batch Number, Date of Package, grade, Expiry date and Maximum Retail
Price (MRP).
PACKING FOR EXPORT
The focus of Kalbavi Cashews is on Customer needs and currently is

catering the niche market for prime qualities.
They have been successful in meeting the stringent quality requirements of

a few premium buyers in Europe & Japan. They are marketing these qualities as
‘Mangalore specials’. Exports to Europe and Japan will particularly be Mangalore
special quality nuts.
Packing and standard weight cashew kernels for export are packed in four
gallon prime tins with a net weight of 11.34kg (or 25lbs) in each tin is then cleared
of air and filled with carbon dioxide gas and sealed. Two such tins of the same
grade are packed in a carton for export. The net weight of each carbon will thus
be 22.68kg (50lbs). As an exception, some manufacturers also pack in tins of
10kgs net, to cater to the requirements of buyers in certain markets. Some
exporters have started using flexible packs also, instead of tins as many buyers
are opting for new generation flexible packs.
At present, new forms of packing have been introduced. Multi-layer plastic

bags of a capacity of 22.68kg each or 2x11.34kg each are also available as a
choice. While packing the product, an exporter must use the right type of packing
material so as to send the goods to overseas buyers in the best possible
conditions. In India the packing material available consist of mild steel plate, tin
plate, paperboard, plastics; ply wood, aluminum foil etc.
Kalbavi cashews packs 22.68kgs (50lbs) of cashew in flexi bag which is

packed in corrugated box for most of the exports. But for Japan, they need to
pack in 20kg packs, 1kg packs, 10kg packs or even 11.34 & 22.68kg packs.
Hence, the packing for export is made as per the requirements of the
importers. So, when they get the order only they need to get a clear detail of the
packing required.
A Kalbavi cashew, which is a brand for quality goods, always gives importance
to quality control, that’s why they attend a large market share in the recent years.
SALES OF KALBAVI CASHEWS

The sale of cashew shell and husk is done in local market. But, as there is
insufficient market for cashew kernel in India, they are exported to other
countries. There is huge demand for cashew in international market. This helps to
gain more foreign exchange for India.
LOCAL SALES
Sales of cashew kernels in Kalbavi cashew is done through super market

chain stores like Aditya Birla retail stores, Food bazaar retail chain, Reliance retail
chain etc.
Most of their sales are in domestic market, so they will be concentrating

more on domestic market.
The local sales are done directly. But, if the local quantity is more, they opt
for brokers. The local sales are generally done through sales bill or VAT invoice.
For sales outside Karnataka, sales are made through sales bill against C form
with 2% of VAT. But if sales are in Karnataka, sales are made through VAT invoice,
which has 4% of VAT.
There may be 2 types of sales which are general sales and consignment
sales.
Consignment sales means the manufacturer sends the goods to his agent
and after the agent affects the sales he sends the money to the company. His
commission ranges from 3% to 5% of the sales amount.
General sales may be cash sales or credit sales. Cash sale is selling cashew for
cash.
In Kalbavi cashews, 90% of sale is on credit basis. The credit given to its
customers is 15 days.
The cashew by products. i.e. Shells and husks are sold to the local
extracting industries.
Major markets for cashew in India are Gujarat, Delhi, Bangalore, Dharwad
etc. the people in the colder parts of the country are the major customers of
cashew.
Volume of sale of cashew kernels in domestic market for previous 5years
YEARS SALE
2003-2004 45331355
2004-2005 67268719
2005-2006 62679561
2006-2007 108287590
2007-2008 178750366
EXPORT
As there is more demand for cashew In international market, they are

exported to other countries but, before exporting, the firm has to keeping mind
certain specifications. Slandered specifications for Indian cashew kernels for
export have been laid down by the government of India under the export act
(quality control and inspection) Act 1963.
QUALITY CONTROL AND PRE-SHIPMENT INSPECTION
Export of cashew kernels from India are subject to quality control and pre-
shipment inspection. Quality control and pre-shipment inspection exports of
cashew kernels from India are normally subject to voluntary quality control and
pre shipment inspection. Consignment wise inspection of cashews is being
conducted to ensure that the shipments adhere to the prescribed standards of
quality samples from the finished products are drawn and inspected to ensure
that the product is processed and packed as per the standards prescribed. Export
of roasted and salted cashew kernels are also normally subjected to voluntary
quality control.
Export consignments from kalbavi cashew undergo strict inspection by

accredited agencies and any consignments found to be not keeping with the
prescribed standards are rejected. This measure thus ensures that only the best
are exported.
Quality checks are carried out not only on the end product, but also on the
raw nuts used and equipment used for their processing. This ensures the quality
of the product at all stages of this making in terms of taste, nutritional value etc.
and ensures the user that the product is of the best quality.
EXPORT REQUIREMENTS
A unit has to fulfill certain conditions in order to export the cashew kernels.
They are as follows:
a) It has to obtain the license from the cashew export promotion council of India.
b) R.B.I code has to be obtained from the Reserve Bank of India. RBI in Bangalore
issues this.
c) Joint council of import of export, i.e. I.E.C has to issue a certificate.
d) The tins to be exported are subject to 11.34kgs i.e. 25lbs.
e) To obtain export license, minimum 680 boxes or tins should be exported.
EXPORT SALES
India is the largest producer and manufacturer of cashew kernels and it

supply cashew to the world market is about 55% so the government of India has
sanctioned Rs.48crores in the VIII the five years plan for the development of
cashew production in the country and Rs.8.22crore has been utilized during 2007-
2008.
Due to liberalization, the Government is trying to promote export in a big
way, which will yield a good foreign exchange inflow.
The export sale takes in takes in two types.
a. Sales against letter of credit.
b. Sales on consignment basis.
SALES AGAINST LETTER OF CREDIT

The letter of credit is an instrument is an instrument, which is similar to
demand draft. The seller can cash the letter of credit only after producing the
shipping bills and other relevant document required by the buyer. This type of
sale keeps the seller in a safer side by getting the payment as soon as the
shipment is made.
Cashew shipment from India is mainly in containers of size 20feet that will
carry about 700cartons. Offer for less than container load may also be accepted.
Ocean freight is charged per cubic meter (volume basis).
Freight for full container load (FCL) is fixed. It is more economical then freight for
part container load (LCL).
Contracts are normally made on Free On board (FOB) or cost and Freight
(C&F) basis. Pricing in international trade in cashews is in U.S dollars per lb
(0.454gms). Quotation in other currencies will be available on request. Business in
cashew is done on an offer and acceptance basis by telephone, Fax or E-mail since
the prices are subject to frequent fluctuations. Insurance is on account of the
buyer. At the time of contract, the shipment month, grade and prices are to be
clearly indicated. Sometimes shippers offer for shipments up to 6 months in
advance payment is usually made by 100% irrevocable letter of credit in favor of
the shipper through his bank. The letter of credit is opened immediately on
execution of contract or one month prior to shipment. Slandered documents like
commercial invoice, certificate of origin, quality and weight certificate issued by
the export inspection agency are provided. Any other specific requirements have
to be informed in advance by the buyer.
CONSIGNMENT SALES
This sale is similar to that of consignment sale in domestic market, but the
Reserve Bank of India (RBI) and the customers monitor it. The goods are shipped
in the delivery period and the payments are done as and when the sale takes
place. The main advantages of this method of sale are that the seller may get
higher price, however there is risk of getting the payments especially when goods
are consigned to gulf countries.
The export of Kalbavi cashews is on letter on credit basis. They stopped

consignment sales few years back.
Volume of sales in international market for previous 5 years
YEARS SALE
2003-2004 30,25,126
2004-2005 70,67,124
2005-2006 1,52,69,412
2006-2007 86,07,297
2007-2008 2,02,34,516
Kalbavi Cashews has large storage godowns to store both the raw cashews nuts
and finished product which is cashew kernel.
SALES MANAGEMENT AND PROMOTION OF KALBAVI

CASHEWS
SALES MANAGEMENT
Selling is the dynamo of the economy. Every thing that is produced, from a
huge paper making machine to a paperclip, is intended to be sold. If a product is
not sold, it is waste. Waste makes for unemployment, low productivity, and less
overall national wealth.
Sale means transfer of ownership for a consideration. When a firm sells it

converts its stock of finished goods into cash or receivables. Obviously a sale is
the main source of reserve to all trading or manufacturing business firms. Hence a
possible sale is the prime mover of all other activities of the business. By the same
reason, it is a limiting as well. If a firm wants to maxmise profit, it must reach the
optimum levels of production, which must be absorbed in the market through
distribution and ultimate sale.
The volume of sales and consequent margin of profit ultimately govern the
size of a business, its pattern of organisation and the financial and personal
problem.
According to the American Marketing association,
“Sales management is the planning, direction and control of the personal selling
activities of the business unit, including recruiting, selecting, training, equipment,
assigning, rating, supervising, paying and motivating as these tasks apply to the
personal sales force”.
Sales management covers selling, advertising, sales promotion, transportation,

handling, financing and risk taking.
THE OBJECTIVES OF SALES MANAGEMENT ARE
1. To enable the top executives to devote more time to planning policy matters.
2. To divide and fix authority among the subordinates.
3. To avoid repetitive duties.
4. To locate responsibility.
5. To establish sales routine.
6. To stimulate the efforts of those concerned with selling.

7. To enforce proper supervision of sales force.
Sales management represents one of the most important functional areas

of management in Kalbavi cashews. The firm has successfully coordinates activity
such as planning, organising, directing, motivating and controlling and applied
these to its sales management for securing better business performance like
reasonable profit through service.
SALES PLANNING
Sales planning are deciding in advance the course of action for selling a
product or products. It decides what is to be sold, how, when and by whom it is to
be sold. It gives us a full- fledged sales programme of sales campaign and
procedures included in the sales programme shall be depicted in the sales
programme shall be depicted in a vivid manner.
In Kalbavi cashews, sales planning are initiated by laying down the

objectives desired to achieve. The various alternatives are evaluated and from
among them the most appropriation course of action is selected, which may fulfill
predetermined goals. Finally the selected plan of action is chartered out and
implemented.
SALES PROMOTION
Sales promotion is an important element in the promotional programme of
an enterprise. The other elements are advertising, publicity and personal selling.
By the way of advertisements and publicity, public are informed of the availability
of the product. Certain percentage of customers will buy it. More and more
people must be induced to buy so as to earn a profit. This can be partly achieved
by personal selling. But for the achievement of targeted sales or profit, one has to
undertake sales promotion. Hence, sales promotion can be treated as a booster
to other elements of promotion so as to persuade majority of the intending
customers to buy the product immediately. Thus, sales promotion offers an
incentive to buy.
Sales promotion in the domestic market from the point of view of Kalbavi
cashew is given primary importance since primary stress is laid on domestic
markets. This is because cashew nuts has been considered more as a luxury item
and as such, domestic market has been very encouraging as far as the producers
prospects are concerned and now, even the middle class people have began
accepting cashew nuts as a part their diets. The nutritive value of cashew nuts and
also its ability to add richness to many recipes and increased its marketing
position. However price is still the biggest constraint for the product of Kalbavi
cashews.
Thus on effective sales promotional strategy will have to lay much stress on
the cutting down of prices of cashew nuts in domestic market, by using cost
control measures right from the stage of buying raw cashew nuts.
Sales promotion in international market is different from that of sales

promotion in domestic market. The IT centre established at the request of the
developing countries to aid them in the promotion of their export trade is jointly
operated by UNCTAD and GATT. It provides the firm with information and export
markets and marketing helps them to develop their export promotion service and
training the personnel required for them.
PRICING OF CASHEW NUTS IN KALBAVI CASHEWS
One of the most important and critical areas in marketing management is

the pricing of products. Decisions on pricing have considerable effect in
marketing. It is the second “P” in marketing mix. A wrong pricing decision can
nullify the effect of all right decisions relating to product, physical distributions
and promotion. Decisions relating to price reflect many things; how consumers
perceive the products, who are the buyers, the profitability of the firm, the
marketer’s competitive position and considerable effect on the marketer’s
revenue and profit.
Price is the only element in the marketing mix that produces revenue all
other elements represent costs. Hence companies will have to give utmost
importance to pricing and handle it carefully.
Decision concerning price to be followed for a period of time may be called

as price policies. Kalbavi cashews try to activate their long run converse pricing
objectives through both price policies and price strategies. Management utilizes
price policies to guide itself generally in marketing pricing decisions over long
periods.
Decision on pricing are taken on the basis of various factors influencing

price such as demand for the product, acceptance of the product, competition
and other existing market conditions. The price charged must enable to recover
the cost of production and also earn a reasonable margin of profit.
FACTORS WHICH DETERMINE PRICE ARE
1. COST OF RAW MATERIAL
The cost of production and consequently the price of cashew kernels

are influenced to the extent on the availability and cost of raw cashew nuts.
The international kernel market determines the pricing of cashew kernels.

So the best alternative available for manufacturer to take delivery of the raw nut
is when the kernel market is favorable.
2. CLIMATE
Climate condition also plays a very important role in setting pricing

strategy. The raining condition, geographical condition will effect on crop and also
pricing of kernels.
3. GRADES OF CASHEW KARNELS
Pricing differs considerably from one grade to another grade of

kernels. There is difference between the prices for wholes and those for scorched,
butts and pieces.
4. PRICES OF OTHER IDIBLE NUTS
Cashew pricing is also affected by the link that seems to be established

between the prices of other edible nuts and their demand are the cashew kernels
closest competitor. A substitution relationship exists in the field of mixed nuts and
demand seems to be a price grade for the cashew kernels.
5. PRICE CHARGED BY THE COMPETITORS
Now days, the competition is such that the prices charged by the
manufacturers of the same products play an important role in the determination
of the products price. Brazil and East African countries always give tough
competition to Indian cashew kernels.
Leading markets for cashew kernels quote prices for kernels. USA is the
larges market for cashew. The price quoted over there is one of the major
determinants for price level in other countries.
6. MARKET
Market also plays a vital role in fixation of prices. The more the demand,
the high will be the prices. The lesser the demand for cashew, the less will be the
prices. Thus market plays a vital role in price fixation.
The pricing policy at Kalbavi cashew will purely depend upon the price of
raw cashew nut and market. They keep in mind even the other factors, but stress
is laid upon price of raw cashew nut and market for cashew.
One kilogram of raw cashew nut when processed yields the following percentage
of products.
Shells 72%
Kernels 24%
Husk 2%
Rejection 2%
TOTAL 100%
The percentage yield of kernels, husk and rejection change according to the
quality of the raw nuts.
The parity chart obtained from Kalbavi cashews is as follows.
Average market price of Raw cashew nuts Rs.40.00/kg

Add: VAT@ 4% 1.6
APMC M.fill @1.5% 0.6
Transportation 0.75
Brokerage 0.25
43.2
Add: Driage @ 6% 2.6
Empty gunny 0.3
Total cost 46.1
Therefore, Cost of raw cashew nuts/bag of 75kgs
=75x46.10
=3457.50
Say Rs3450.00
Average yield/bag of 75kgs:-
Wholes : 14.4kgs
Pieces : 3.6kgs
Shells : 55.0kgs
Realization/Bag
Wholes 14.4kgs@ 270/kg 3888
Pieces 3.6kgs @ 225/kg 810
Shells 55.0kgs @ 5.50/kg 302
5000
Cost of Production:-
Average cost/bag of 75kgs 3450
Average processing cost/Bag 1025
Interest and other overhead 250
Selling Exp and Packing material 175
4900
Profit= Realization/Bag-Cost of production
=5000-4900
=Rs.100/Bag
The pricing policies for export as well as domestic market are more or less sale. It
mainly differs at the end point (Realization) i.e. for export, the pricing depend on
the foreign exchange market where as for domestic market, and rates depend
upon the rates of tax, duties, and government regulations.
Often the pricing for exports is done keeping a level of margin allowing the
rupee to appreciation, which makes sure of break even or profit most of the
times.
THE CURRENT PRICES OF CASHEW KERNELS ARE
Quantity per Selling price per

TYPE Tin (in kgs) Tin (11.34kgs)
1 W-180 11.34 5200
2 S-180 11.34 4500
3 W-210 11.34 4200
4 S-210 11.34 3700
5 W-240 11.34 3800
6 S-240 11.34 3500
7 W-320 11.34 3500
8 P-320 11.34 3350
9 S.W 11.34 3250
10 S.S.W 11.34 3050
11 D.W 11.34 2250
12 F.W 11.34 2600
13 P.W 11.34 2100
14 K.W 11.34 1950
15 J.H.pieces 11.34 3100
16 S 11.34 2900
17 H 11.34 2900
18 L.W.P 11.34 2700
19 S.W.P 11.34 2500
20 B.B 11.34 1650
DISTRIBUTION CHANNEL IN KALBAVI CASHEWS
The channel of distribution or marketing channel may be defined as “A

channel is the pipeline through which a product flows on its way to the consumer.
The manufacturer puts his product into the pipeline or marketing channel and
various marketing people move it along to the consumer at the other end of the
channel”.
A channel usually includes 3 parties- the producer, final consumer and the
middlemen who are engaged in the transfer of title. The distribution channel
begins with the producer and ends with the ultimate consumer of the product. In
between the producer and the final consumer come, various middlemen or
intermediaries like merchant middle men (Wholesalers, retailers); agent
middlemen (commission agents, brokers, etc).
A distribution channel may have a member of stays and a number of

intermediaries. Distribution channels vary among different industries. Each type
of channel plays a significant role in distribution. It has its own advantages and
distribution channel is as follows:
Manufacturer Commission agent Stockiest
Retailer Consumers
The functioning of this distribution channel in domestic and international market

is as follows.
DOMESTIC MARKET
In domestic market, there are dealers then deliver goods to stores. The
commission paid to them is Rs.20 per tin.
INTERNATIONAL MARKET
The main importers of cashew kernels are USA, Japan, Europe and other
countries.
The agents transmit the offers made by these importers to their principals
in India. If the deal materializes, the agent is entitled to a commission of ½ % to $
contract and 1 to 1.5% to rupee contract on the FOB value.
CHAPTER 6
FINDING, SUGGESTION AND CONCLUSION
FINDINGS
It is not easy to run a business concern, especially a cashew firm. Promoters
are finding lots of problems in day-to-day life. As soon as problem is solved,
another one arises which is common in almost all types of business. To achieve
success, lots of problems have to be solved which requires special care and
attention of the owners. A cashew firm has lots of fluctuation in price. There is
loss in every five years operation. The following problems were observed while
making study of kalbavi cashews.
1. SHORTAGE OF RAW MATERIALS
Cashew is a seasonal crop, and hence the supply of raw cashew nut in local
market is not through out the year. To overcome this problem, a large quantity
purchase has to be made during the supply time and it requires a huge storage
area, which may be expensive.
2. LABOUR PROBLEM
The main problem faced by cashew firm is absenteeism. It is mainly because;

the cashew firm employs women who become absent frequently. This directly
effects the production cycle and thereby causes delay in delivery.
3. FINANCE
Kalbavi cashew is a partnership firm and because of this, there is no
sufficient finance available supply. Due to seasonal supply, the raw nuts have to
be purchased between the months of February to May. So it requires lots of
finance for purchase, which may be insufficient in partnership firm.
4. INTERMEDIARIES
Middlemen or intermediaries tend to take a huge share of the total profits

and by make the purchasing of raw cashew nuts.
5. TAX BURDEN
The tax levied on cashew processors is very high which indirectly make the
goods uncompetitive.
6. PRICING
Pricing of cashew is a cumbersome process. Many factors such as market

demand, price of raw cashew nuts, price charged by competitors, price of other
nuts etc has to be kept in mind. Thus, the price of cashew nuts is highly
fluctuating.
7. COMPETITION
The major problem of any firm will obviously be its competitors. There are
nearly 40 exporters from state who are the competitors and there are
competitors even from Vietnam, Brazil, and Africa.
8. INTEREST RATE
The exporting of goods, the borrowed funds will have a high rate of interest.
9. LONG EXPORT PROCEDURE
The export procedure is very lengthy. It requires a list of paper works such as
long process activity of the firm.
SUGGESTIONS
1. In order to solve labour problems such as absenteeism, there should be co-
ordination among the employees and management. The employees should be
provided with basic facilities and firm should encourage workers, motivate them
to work better.
2. To avoid middlemen problem; the firm can contact buyers directly and
purchase directly from growers of cashew tree.
3. Importance should be given to raise the supply of raw cashew nuts by resorting
to intensive and extensive cultivation of cashew plantation in order to avoid the
problems of shortage of raw cashew nuts in the country.
4. Farmers and owners of land should be efficiently educated to undertake the

cashew farming by supplying hybrid plants etc. financial and technical assistance
has to be given to them.
5. Government should use the major problem of shortage of power supply. The
plant should make the use of solar power etc to avoid power problem.
6. The export procedure should be made simple so that the exporters can earn
precious foreign exchange of India.
7. Government should make arrangements to store cashew nuts, this purpose,

and public warehouse can be opened so that firm can make storage of nuts
(preservation).
8. Government should see to it that the subsidies are sanctioned quickly.
9. The commodity boards like coffee boards, tea boards, rubber boards etc. are
available to cashew industry should also have organization set up to coordinate all
the efforts of production, processing by product develops etc.
10. The research institutions have to be set up and should test the varieties of
trees and supply high yielding and qualitative raw cashew nuts.
CONCLUSION
The cashew kernel is now ever well known meat, occupying a very high and
prestigious hierarchy of denied fruits and nuts meats in the world market.
Cashew nut manufacture is an important economic activity of south udupi

district. It is a major foreign exchange earning industry and it does not generate
any sort of waste. It is a labour intention industry. It requires much of working
place and machinery. The skill of Indian workers especially women for the
extracting of whole kernels promoted the birth and growth of this industry in
India. India has earned maximum goodwill, customer patronage and lot of
reputation in its short period. The promoters have gained vast and high
experience in the field of cashew industry. In fact, the present efficiency of the
industry is interlay the result of the enterprise and managerial skill of the
managing partner. Though there were problems in the initial stages of the
industry, the partners have efficiently solved them and the industry marched
towards success.
Small-scale industry unit is one of the fast growing industries. The

managerial efficiency of the unit has facilitated the growth of this firm into one of
the leading cashew nut manufacturers of the district.
The Indian cashew industry earns a lot of foreign exchange for the country.
Therefore, very efforts should be made to grow more cashew nuts that will help
for growth of the industry as well as the economic condition of the country.
BIBILIOGRAPHY
MARKETING MANAGEMENT: B. S. RAMAN
FIFTH EDITION JAN2005
MODERN MARKETING MANAGEMENT: K.C. NAIR, JOSE PAUL,
C J GEORGE, J. JOHN
SECOND EDITION- 1999
EXPORT MANAGEMENT: T N RAMA KRISHNA

EDITION -2006
BUSINESS STUDIES: B S RAMAN
EDITION -2003
WEB SITE: www.kalbavicashew.com
www.google.com
OFFICE LEDGER AND RECORDS
MAGAZINES AND JOURNALS

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CONTENTS

Sl. no Topic Page number

OBJECTIVES OF THE STUDY

The relevant data and information are properly integrated, analyzed,

LIMITATIONS OF THE STUDY

In spite of these limitations, I have tried successfully to gain information

The important cashew growing countries are Tanzania, Mozambique, Kenya,

India has a creditable record of attaining good amount of foreign exchange

Cashew cultivation is concentrated mainly in South Indian states namely

In India many agro-based industries are considered as small-scale industry.

Harvesting starts in coastal regions in February. The collection of fallen nuts is

The Cashew Tree

The cashew tree is a low spreading evergreen tree with a number of

The cashew is highly perishable and required prompt handling. Main

Alcoholic beverages are obtained by fermentation of cashew apple juice. In

INFRASTRUCTURE FOR CASHEW CROPS

PESTS AND DISEASES

CASHEW GROWING AREAS IN INDIA

STATE DISTRICT HECTORS TOTAL

Nutritive value of cashew kernels

Cashew kernels contain 21% of vegetable proteins of a very high biological

Nutritive values of Cashew Kernels

Calories 3000 - 3500 600g

Chemical composition of Cashew Kernels

Constituents Percentage (%)

Pie chart of Chemical composition of Cashew Kernels

Physical characteristics of Cashew Kernels

Palmitic acid 11.14

Stearic acid 8.75

Palmilia acid 0.89

CASHEW INDUSTRIES IN INDIA

1. Many private industrialists have come forward to start cashew industries.

CASHEW INDUSTRIES IN DAKSHINA KANNADA

In 1994-1995, there were about 130 cashew industries in Dakshina Kannada

CASHEW INDUSTRY IS DIRECTLY PROFITABLE BECAUSE

1. Cashew plantation does not require fertile soil.

REASON FOR THE LOW YIELD OF CASHEW:

1. Cashew nuts plantations in India were predomiliontly raised from seeds of

As their initial investment, they had invested capital of rs.24lakhs out of

Mr. Ramachandra rao 40%

Mr. K. Prakash rao 40%

Mrs. Gowri P rao 20%

Profit Sharing ratio

Mr. Ramachandra rao

BANKERS OF THE UNIT

It provides a bird’s eye view of the relationship between different

Manager Account Godown

Supervisor Supervisor Supervisor

FIXED ASSETS STRUCTURE OF KALBAVI CASHEWS

2005- 2006- 2007-

As per last balance sheet 41749 37574 71062

Add: - Additional Nil 39337 14000

41749 76911 85062

Less: - Depreciation 4175 5849 7806

37574 71062 77256

As per last balance sheet 49679 42227 54817

Add: - Additional Nil 8760 9798

49679 63577 65317

Less: - Depreciation 7452 8760 9798

42227 54817 55519

As per last balance sheet 606811 471617 697276

Add: - Additional 85365 342894 398220