An Economic Study of Marketing Cost of Coir Incurred by Manufactures in Tirunelveli District by IJEID

International Journal of Excellence Innovation and Development ||Volume 1, Issue 1, Nov. 2018||Page No. 035-037||

An Economic Study of Marketing Cost of Coir Incurred by Manufactures in Tirunelveli District K. Karuppasamy, P. Chinnathambi Assistant Professor in Economics, Tirunelveli Dakshina Mara Nadar Sangam College, Manonmanium Sundaranar University, T.Kallikulam, Tirunelveli, Tamil Nadu, India

Abstract––Marketing are activities of a company associated with buying and selling a product or service. It includes advertising, selling and delivering products to people. People who work in marketing departments of companies try to get the attention of target audiences by using slogans, packaging design, celebrity endorsements and general media exposure. Among the various marketing costs, transport cost of small units has showed an increased share of 56.48 per cent in channel III from 48.83 per cent in channel II. The rejection loss in channel II was 13.63 per cent, while it was 20.54 per cent in channel III. The share of loading and unloading cost has slightly increased from 12.32 per cent in channel II to 13 per cent in channel III. The incidental charges was 3.35 per cent in channel II and it was doubled in channel III and reached a percentage 7.13 per cent. The remaining charges like pacing cost were 1.76 per cent in channel II and 1.86 per cent in channel III and weighing charges were 0.94 per cent in channel II and 0.99 per cent in channel III. From the analysis it is known that the channel III was the most economic channel with the least marketing costs among all the channels, it is followed by channel II. Keywords––Marketing, company, channel

INTRODUCTION The purpose of all production is to sell the goods produced and make profit thereof. Thus, the next step for the manufacturer is to decide the ways and means to place the products in the hands of the consumer at a proper place, time and price. Therefore, every manufacturer would seek specialized middlemen in performing such marketing functions so as to achieve the objectives of the firm. This set of marketing intermediaries is called marketing channel. (Philip Kotler, 2003). In this section, an attempt is made to identify the cost of marketing that exist for coir fibre in the study area. Importance of Marketing 1. Marketing helps to achieve, maintain and raise the standards of living 2. Marketing Increases employment opportunities 3. Marketing increases national income - More purchasing power 4. Helps to maintain economic stability & development 5. Link between producer & consumer 6. Removes imbalance of supply & demand by transferring surpluses www.ijeid.com

Marketing Cost The marketing cost refers to the total cost associated with delivering goods to customers. The marketing cost may include expenses associated with storing goods in warehouses pending delivery, loading and unloading, bundling, weighing, transporting, broker aging, establishment and other incidental charges. The items of the cost vary with the place of marketing. The direct calculation of marketing cost is not a easy task as it involves many calculations of many elements of such cost. Hence, the total marketing costs are often estimated indirectly, via price spread or marketing margin. (Tripathi, R.S, 1998).

MATERIALS AND METHODS Collection of Data This study is an empirical research based on the survey method. The researcher adopted interview schedules for collecting primary data. Primary Data The primary data were collected from two sources. The data on organization, investments, sales, cost and return of coir units were collected from the manufacturers of coir units. Information relating to price paid, received and costs incurred in marketing of coir were also collected from market intermediaries. Separate interview schedules were prepared and used to elicit this required data from manufacturers and market intermediaries. As an initial step, the drafted interview schedules were pretested by taking into account 5 manufacturers of coir units, and 10 intermediaries. Their opinions and suggestions were sought on its construction. In the light of the experience gained in the pre-test, the originally prepared interview schedules were modified and the final draft prepared. Marketing Cost Incurred by Manufactures The marketing costs incurred by the manufactures per 100 kg of coir fibre were calculated for both micro and small coir units, and the outcomes are presented in Table 1.

RESULT AND DISCUSSION The manufacturers prefer three types of channels for marketing of coir fibre. They have to incur marketing cost when they skip the native traders in the channels of distribution. From the above table it is understood that the total marketing cost of the micro level units who follow channel II was found to be Rs.120.89 per 100 kg of coir fibre.

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An economic study of marketing cost of coir incurred by manufactures

Karuppasamy and Chinnathambi

Table 1: Marketing cost incurred by the coir units (rupees per 100 kg). Micro Units Small Units Average Items of Cost Channel II Channel II Channel III Channel II Channel III 60.13 56.84 62.32 58.49 62.32 Transport Cost (49.74) (48.83) (56.48) (49.29) (56.47) 22.97 22.31 22.64 Commission (19.00) (19.17) (19.08) 16.02 15.87 22.67 15.95 22.67 Rejection Loss (13.25) (13.63) (20.54) (13.44) (20.54) 14.34 14.34 14.34 14.34 14.34 Loading and Unloading (11.87) (12.32) (13.00) (12.08) (13.00) 4.28 3.90 7.87 4.09 7.87 Incidental Charges (3.54) (3.35) (07.13) (3.45) (7.13) 2.05 2.05 2.05 2.05 2.05 Packing Cost (1.70) (1.76) (1.86) (1.73) (1.86) 1.10 1.10 1.10 1.10 1.10 Weighing Charges (0.90) (0.94) (0.99) (0.93) (1.00) 120.89 116.41 110.35 118.66 110.35 Total (100.00) (100.00) (100.00) (100.00) (100.00) Source: Primary Data, Figures in brackets are Percentages to the total.

In which transport cost has a major share of 49.74 per cent, followed by commission charges (19 per cent), rejection loss (13.25 per cent) and loading and unloading (11.87 per cent). Incidental charges packing cost and weighing charges have shares of 3.54 per cent, 1.70 per cent and 0.90 per cent respectively. The marketing cost incurred by the small units who follow channel II was found to be Rs.116.41 per 100 kg of coir fibre. Here also the transport cost has maximum share of 48.83 per cent followed by commission charges (19.17 per cent) and rejection loss (13.63 per cent). The shares of cost of loading and unloading and incidental charges were found to be 12.32 per cent and 3.35 per cent respectively. The other two costs namely packing cost and weighing charges together have a share of 2.70 per cent. The marketing cost for small units who follow channel III was worked out to Rs. 110.35 per 100 kg coir fibre. The share of transport cost here also has a major share of 56.48 per cent. In channel III as the manufacturers skip the commission agent and sell their coir fibre directly to market traders. The rejection loss has a share of 20.54 per cent, followed by of loading and unloading with 13.00 per cent and incidental charges with 7.13 per cent. The combined cost of packing and weighing worked out to 2.85 per cent. Among the various marketing costs, transport cost of small units has showed an increased share of 56.48 per cent in channel III from 48.83 per cent in channel II. The rejection loss in channel II was 13.63 per cent, while it was 20.54 per cent in channel III. The share of loading and unloading cost has slightly increased from 12.32 per cent in channel II to 13 per cent in channel III. The incidental charges was 3.35 per cent in channel II and it was doubled in channel III and reached a percentage www.ijeid.com

7.13 per cent. The remaining charges like pacing cost were 1.76 per cent in channel II and 1.86 per cent in channel III and weighing charges were 0.94 per cent in channel II and 0.99 per cent in channel III. From the analysis it is known that the channel III was the most economic channel with the least marketing costs among all the channels, it is followed by channel II. The marketing margin is the difference between the price paid by the ultimate consumer and the price received by the producer often in the market and such difference is the share due to middlemen. . (S.K Raha and M.A. Beten,1995). Findings  The channel which has least participation of intermediaries has more marketing efficiency. The District Industries Centre and the Coir Board have vital role in the promotion of coir units, regarding providing financial facilities and training programs to the coir manufacturers. Development of improved variety of ratts and looms would help in improving the production of coir yarn spinning, coir mats, etc. It is inferred that the share of manufacturer’s price in industrial user price was higher in channel III, which was 54.90 per cent and this share was lower in channel I with 48.28 per cent.  It is found that the marketing margin of the wholesalers was higher in all the channels because they spent more money on marketing cost, they can get more marketing margins than market traders and native traders.  A low level of price spread was witnessed in channel III as there were less marketing cost and marketing margin. As a result the manufacturer’s price was higher than in other channels.  The analysis of marketing efficiency by using the Shepherd’s method, Acharya and Agarwal’s method and Composite index method disclosed the fact that

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International Journal of Excellence Innovation and Development ||Volume 1, Issue 1, Nov. 2018||Page No. 035-037||

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channel III was more efficient than channel I and channel II. It is because of lower marketing cost on account of the least participation of intermediaries. The analysis of Garrett’s ranking technique reveals that the heavy transport cost was the first and foremost marketing problem of the manufacturers with a mean score of 58.45. Because the coir manufacturers have to carry their products to Alleppey market, they incurred heavy transport cost.

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REFERENCE [1]

[2] [3]

Philip Kotler, “Marketing Management”, Pearson Education (Singapore) Private Limited, Indian Branch, New Delhi, 2003, p.504. Tripathi, R.S, (1998) “Production and Marketing of Pulses”, Mittal Publications, New Delhi, p.204 S.K Raha and M.A. Beten, “Vegetables Marketing in Bangladesh: Do Consumers Pay Higher Price”, Economic Affairs, Vol.40, No.1, 1995, p.42.

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