PROJECT For Printing

CUSTOMER PREFERENCE WITH REFERENCE TO THE QUALITY OF THE
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1.1 GENERAL INTRODUCTION
For all business man engaged in marketing knowledge about the customer is the pre-
requisite for the designing the promotional activities of a product. A strong understanding of
buyer behavior will help to shed light on what is important to the customer and also suggest the
important influences on customer preference. Possibly the most challenging concept in
marketing deals with understanding why buyers do and what they do. Using this information
marketers can create marketing programmes that they believe will be of interest to customers.
Factors affecting how customers make decisions are extremely complex and it varies
from customer to customer. Buyer behavior is deeply rooted in Psychology with dashes of
sociology thrown in just to make things more interesting. Since every person in the world is
different, it is impossible to have simple rules that explain how buying decision are made. But
those who have spent many years analyzing customer activity have presented us with useful
“guidelines” in how someone decides whether or not to make a purchase.
Customers normally vary in their purchasing pattern from one shop to another depends
upon product to product. Possibly the most challenging concept in marketing is the
understanding about why customers buy and what they buy. But such knowledge is critical for
marketers since having a strong understanding of buyer behavior will help shed light on what is
important to the customer and also suggest the important influences on customer preference.
Using this information, marketers can create marketing programmes that they believe will be of
interest to customers. Consumers evaluate the efforts to make a particular choice and then choose
a strategy best suited to the level of efforts. The purchasing behavior of a person depends upon
the product features, the service quality, and many attributes they get from the seller. Consumers
KMCT School of Business 1

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use a similar approach that takes into account both how well a product appears to meet their
needs and how important they feel those needs to be.
In some ways, consumer decision-making behavior is much more complex than the
corporate decision-making process. Marketers have researched consumer behavior for many
years, and many articles have been published in marketing journals explaining how consumers
make purchasing decisions. We now understand that consumers move through a well-defined
process to make a decision. That process includes the following steps:

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1.2 SCOPE OF THE STUDY
This study will help to find out the factors which are influencing the customer
preference for khadi product. And also gives buying trends and also clearly explains the present
scenario of the market.
This study will also reveals the opinion and views of its customers that will ultimately
help in designing the company’s policies and find out the areas of contingencies which will
eventually enable it to have a better foot hold in the market by active optimum customer’s
satisfaction.

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1.3 OBJECTIVES OF THE STUDY
PRIMARY OBJECTIVE
To determine the factors influencing the consumer decision while buying the
product.
SECONDARY OBJECTIVE
 To determine the product attributes influencing purchase decision
ofkhadi product.
 To determine the reasons for consuming various khadi products.
 To determine the most preferred product in CannanoreSarvodayaSangh.

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1.4 RESEARCH METHODOLOGY
It is a way to systematically solve the research problem. It may be understood as a

science of studying how research is done scientifically. It is necessary for the researcher to know
not only the research methods or techniques but also the methodology.
TYPES OF RESEARCH
In this research study followed descriptive research. Descriptive research including

surveys and fact finding enquiries of different kinds. The major purpose of descriptive research
is description of the state of affairs as it exists at present. The main characteristic of this method
is that the researcher has no control over the variables; he can only report what has happened or
what is happening. The methods of research utilized in descriptive research are survey methods
of all kinds, including comparative and correlational methods.
RESEARCH DESIGN
It is a structure that gives an outline of the overall research work. Research design as the
blue print for collection, measurement and analysis of data. The research problem having been
formulated in clear cut terms, the researcher will be required to prepare a research design, which
is he will have to state the conceptual structure within which research would be conducted. The
preparation of such a design facilitates research to be as efficient as possible yielding maximal
information. In other words, the function of research design is to provide for the collection of
relevant evidence with minimal expenditure of effort, time and money. The research design

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followed for this research study is descriptive research design, a structured questionnaire was
given.
SAMPLE DESIGN
A sample design is definite plan for obtaining a sample from a given population. It refers
to the technique or the procedure the researcher would adopt in selecting items for the sample.
Sample design may as well lay down the number of items to be included in the sample. Sample
design is determined before data are collected.
UNIVERSE
All the items under consideration in any field of enquiry constitute a Universe or Population.
The group of individuals under study is known as population or universe. Therefore, universe
is the aggregate of all the units to be studied in any field of enquiry. In this study the
population is infinite.
SAMPLE SIZE
Sample size refers to the number of items to be selected from the universe to constitute a
sample. Here the sample size taken for the study is 73 customers.
SAMPLING TECHNIQUE
In this study mixed sampling has been used to collect sample from the universe.
To calculate the sample size using the formula.
N=¿)2 (p*q)

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Here we use the convenient sampling and the sampling size is taken as 77
SOURCES OF DATA COLLECTION
Collection of data is an important aspect in conducting researcher used both primary and
secondary data. The primary data are those which are collected fresh and for the first time.
Secondary data are already collected by someone else. Here primary data was obtained through
questionnaires and interviews. Secondary data was collected from brouchers, magazines, etc…
PRIMARY DATA
The Primary data are collected through interviews and with the help of questionnaire and
schedule. This facilitated to respondents to fill up with questionnaire is an easy and fast manner.
SECONDARY DATA
The Secondary data were collected from circular notices, resolutions annual Reports,
publications Websites documents etc.
DATA PROCESSING
The questionnaire filled up and returned by the represents were first of all carefully
checked up to see whether the responses complete, whether all questions are answered by the
respondents, and whether the responses are consistent. Then, the individual items of responses

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are converted into suitable charts. Excel Spread sheet is used to prepare both the tables and
charts, as also for other statistical analysis.
HYPOTHESIS
Hypothesis may be defined as a proposition or a set of some specified group of

phenomena either asserted merely as a provisional conjecture to guide some investigation or
accepted as highly probable in the light of established facts. A research hypothesis is a predictive
statement, capable of being tested by scientific methods, that relates an independent variable to
some dependent variable.
I) Null Hypothesis (H0):
Null hypothesis is state that no difference between a population parameter and sample
statistic.
ii) Alternative Hypothesis (H1):
When the null hypothesis is rejected then we are accepting the alternative hypothesis. The
alternative hypothesis is the logical opposite of the null hypothesis.
In this study,
NULL HYPOTHESIS
H0: Customer preference is independent to the quality of the product.
ALTERNATE HYPOTHESIS

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H1: Customer preference is dependent to the quality of the product.
STATISTICAL TOOLS
. Statistical Tools for Analysis
The following tools were employed to analyze the date with reference to the selected
objectives of the study.
 Simple percentage
 Chi-square Analysis
Simple Percentage
Simple percentages are used in making compassion between two or more series
of data. It becomes very easy to find the relative difference between the two data.
Percentage =No. of respondent x 100
Total no. of respondents
CHI SQUARE TEST
Chi-Square is statistics to list the goodness of fit verify the distribution of observed data
with assured the theoretical distribution. It is developed within an initial hypothesis. The chi-
square test is an important test amongst the several tests of significance developed by
statisticians. The chi-square value is often used to judge the significance of population variance.
As a non parametric test, it “can be used to determine if categorical data shows dependency or
the two classifications are independent. It can also be used to make comparisons between
theoretical population and actual data when categories are used.” Thus, the chi-square test is
applicable in large number of problems. Chi-square test is used for the study. Chi-square test is
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one of the important tests developed to test hypothesis. It is a non parametric test. It is frequently
used for testing hypothesis concerning the difference between a set of observed frequencies of a
sample and corresponding set of expected or theoretical frequencies.
(O−E)2
χ 2=∑
E
Where O = observed frequencies,
E = expected frequencies,
Degree of freedom (v) = n-k
n = number of frequency classes
k = number of independent constraints.
For a contingency table with ‘r’ number of rows and ‘c’ number of columns the degree of
freedom is
V= (r-1) (c-1)
STEPS INVOLVED IN APPLYING CHI-SQUQRE TEST
The following steps are required to determine the value of the chi-square test.
1. Calculate the expected frequencies

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2. Take the difference between observed and expected frequencies.
3. Obtain the square of the difference.
4. Divide (O- E) 2 with the expected frequency.
5. Obtain ∑ (O– E) 2 / E
The calculated value of x2 is compared with the table value of x 2 for a given degree of
freedom at a certain specified level of significance. If the calculated value is more than table
value, null hypothesis is rejected and accept the alternative hypothesis. If the calculated value is
less than table value, null hypothesis is accepted and alternative hypothesis is rejected.
The important applications of chi-square test are given below.
 To test the variance of a normal population.
 To test the goodness of fit.
 To test the independence of attributes.

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1.5 LIMITATIONS OF THE STUDY
1. Most of the respondents co-operate with researcher by answering the questions with
sincerely, but some of them are not aware of this study.
2. Because of the time limitation the research could be conducted among the limited
number of respondents.
3. Collection of primary data is very expensive and time consuming.
4. The report is strictly based on the opinion of the respondents

5. Information collected and analyzed are limited which may not fully represent the
image of study
6. Time was a major constraint to conduct a detailed study, which limited area of
research within Calicut.
7. The study was based on the customers opinion so there may be more chance of bias.

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2.1 INDUSTRY PROFILE
Khadi is an Indian fabric. Khadi is also known by another name ‘Khaddar’. It is

made by spinning the threads on an instrument known as ‘Charkha’. During pre-independence
era the movement of khadi manufacturing gained momentum under the guidance of father of
nation Mahatma Gandhiji. This movement of khadi manufacturing and wearing started as to
discourage the Indians from wearing of foreign clothes.
Khadi before independence was considered as the fabric for the political leaders
and the rural people. But now it has found its way into the wardrobe of fashion conscious people.
The current situation is that the demand is more than the supply. Earlier the type of khadi
available was khaddar cotton which had very coarse texture and feel. However many varieties of
khadi like khaddar silk, khaddar wool and khaddar cotton are available now, which makes it a
fashionable fabric and likeable by the massage.
Its concept was developed by Mahatma Gandhi. It was a symbol for political
agendas during the fight for independence in India against the British rule. It was primarily a
means to provide employment to the unemployed rural population of India at that time. The
Indian flag has to be also made from khadi material. Thus it holds national importance, we could
even call it the national fabric of India.
Khadi is a versatile fabric. It has the unique property of keeping the wearer warm
in winter as well as cool in summer season. This fabric has coarse texture and gets easily
crumpled, therefore in order to keep it firm and stiff, starch is to be added. This fabric on
washing is more enhanced thus the more you wash it, better the look. Khadi is not easily worn
out for years together, at least for 4-5 years. Very attractive anddesigner apparel are made by

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doing handwork on them garments made from it. Khadi spinning is generally done by girls and
women and weaving mostly by men. During spinning of khadi the threads are interwoven in such
a manner that it provides passage of air circulation in the fabric. Apart from this unique property,
it also provides warmth in winter season which is quite surprising factor.
Khadi cotton is required to be starched so that it does not get easily crumpled. It
comes in many colors and is not harmful to the skin as synthetic fabrics. This cotton is very
soothing in summer season as ample amount of air ventilation is there, it has the capacity to
absorb moisture therefore it easily soaks the sweat and keeps the wearer cool and dry. Khadi
cotton comes in plain as well as in printed fabrics. The most common outfit of made from khadi
cotton is the ’Kurta’. Many types of apparel are manufactured from khadi cotton like saris,
salwar suits, fabric yarns, western tops, shirts, trousers, skirts, handkerchief, etc. It is a very
durable fabric.
In khadi silk, the ratio of khadi and silk fabric is 50:50. This fabric requires dry
cleaning. It shrinks about 3% after the first wash. It is quite an expensive fabric. Khadi silk
provides a royal and rich look. The various types of apparels made from khadi silk are salwar
kameez, kurta pajama, saris, dupattas, shirts, vest and jackets. Apparels like kurta, jacket, sari
blouses requires lining to be given to ensure its longetivity. Previously khadi was dyed in earthy
color tones and was used to make traditional garments but now designers are experimenting by
dyeing khadi with striking colors like lime green, violet, baby pink, turquoise blue, etc. Stylish
garments like miniskirts, halter neck tops, racer tops, tunics, etc are made from khadi.
Khadi is hand woven and hand spun fabric which takes time to be made. It is
mainly manufactured in rural areas of India. In previous times it was considered as the fabric for
the poor rural workers & farmers. But wearing khadi is no more for the poor, many high profile
personalities and economically sound people prefer to wear it. It is considered as one of the most
beautiful Indian fabric. The khadi wearer gets a royal and distinguishable look due to its fall and
style. It symbolizes luxury and uniqueness.
Khadi has always been a fabric with attitude. If in the past its claim to fame was its
status as a symbol of resistance against British rule, it has now become a fashion statement. Its

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journey from its eventful birth as the fabric favoured by revolutionaries, to designer boutiques
and elite consciousness has been an exciting one.
At one time coarse and dull, khadi’s latest avatar is brightly coloured and gossamer
fine. While designers sing hosannas to the versatility of the fabric, wearers swear by its
practicality and comfort. It is not only the perfect answer to India’s hot and humid summers but
also provides adequate protection against winter chill. Leading designers like Rohit Bal, Jatin
Kochchar, Malini Ramani, and Bhavna Thareja and upmarket clothes brands like Fabindia and
Anokhi have given to the traditional handspun fabric a modern and contemporary look. With its
stylish cuts and innovative colours, khadi has come to define the trendy ethnic look. Its easy
adaptability to a range of designs makes it amenable to both formal and informal look, as well as
Indian and western styles. Stores stack a range of dresses in khadi – jackets, skirts, kurtas,
dupattas, sarees, cropped tops, capris, trousers, wrap-arounds, spaghetti tops, trousers, you name
it. Little wonder that khadi is a hot favourite with not only the make-a-fashion-statement college
crowd but also the with-it and cool not-so-young.
From the coarse, plain kapda that was eons ago a statement of patriotism and later
a must- have for netas, khadi as a designer’s raw material for runway apparels is a bellwether of
its changing status. The government, having done its bit by roping in designers to give the plain
old Khadi Gram Udhyog a makeover, has attracted the attention of even the elite.
While designers agree that khadi can lend itself to almost any look and cut, they
rue the fact that it has been unable to find popular acceptance. “The biggest problem is that of
mindset. For some inexplicable reason, people find it difficult to accept khadi as a formal outfit.
This is actually not true. Almost all formal outfits can be made out of khadi – including western
tops, shirts, pants sarees, lehengas and blouses”, says Bhavana Thareja, a fashion designer
involved in designing clothes for KVIC.
It is very unfortunate, Thareja says, that people, especially the youth, would prefer
to buy a Levis or any other denim brand for Rs 700 to Rs 800 but would consider the same price
as expensive if the outfit happened to be made out of khadi. “The rigidity of the mindset has to

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change and something should be quickly done to bring about awareness, both domestically and
internationally”, she says.
Fashion designers are however, confident that khadi has a huge potential.
“Internationally, people are fond of linen. And khadi is the purest form of linen”, says Thareja.
And with more khadi dresses going off the shelf in markets overseas, it has persuaded the
domestic market to give the textile more than a second glance. “It is a slow process, khadi will
have more takers in the domestic market and like in the West, it will be cherished for what it is.
Buying khadi can easily become a habit,” says designer Vijay Lakshmi Dogra.
According to Dogra, the popularity of khadi has increased in recent times, “The
ever-increasing penchant for khadi has some reasons. There are two kinds of buyers. The first
kind of people buy khadi for a reason. A look at the past reveals the way khadi was promoted by
Gandhiji. This was to promote village economy, to stop the exodus from villages to cities. Khadi
was promoted extensively to make them economically more self-sufficient. One reason why
some people wear khadi is the feeling that by designing clothes in khadi and by wearing khadi
they are supporting the 80 per cent of the population that lives in villages,” says Dogra.
She says that the marketability of khadi will only increase “once people start
wearing khadi because then they become addicted to it. From masses to the elite, khadi is making
a place for itself in wardrobes. The cost that ranges from Rs 30 a metre to Rs. 1000 a metre
makes it really accessible and one of the most comfortable, convenient as well as stylish fabrics,”
Dogra says.
Its appeal to fashion sensibilities apart, designers feel that khadi’s role in helping
impoverished farmers should also be highlighted, “It is important to underline how khadi helps
in sustaining villages and the lives of poor farmers who grow cotton. Buyers, especially in
foreign markets, would acknowledge such details. Like it happened when the market reacted
strongly to the fact that the carpet industry was using child labour, it had such an adverse impact

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on business. In the case of khadi, it might actually augment the product’s appeal,” points out
Dogra.
Apart from being the king of the wardrobe, khadi is also a lifestyle product. It is
used to make durries, gaddas, upholstery, cushions, bags, mats, bed-sheets, and curtains. Its
inherent toughness ensures that it doesn’t wear down easily.
The first true Indian designer was Mahatma Gandhi when he urged the people of
India to wear khadi garments. It was not only a call to create self reliance but a call to create self
reliance but a call to wear something that could prove the unity of India. Khadi was given a more
important status by Gandhi after his return from South Africa. While in search of the charkha
Gandhi felt that for a nation to turn self-reliant, it had to return to indigenous manufactured
goods.
Gandhi wrote. Swaraj (self-rule) without swadeshi (country made goods) is a

lifeless corpse and if Swadeshi is the soul of Swaraj, khadi is the essence of swedeshi. Therefore
khadi became not only a symbol of revolution and resistance but part of an Indian identity.
Gandhi confessed though, When I first discovered the spinning wheel it was purely through
intuition. It was not backed by knowledge so much so that I confused charkha with kargha
(handloom).
The term khādī or khaddar means cotton. khādī is Indian handspun and hand-woven
cloth. The raw materials may be cotton, silk, or wool, which are spun into threads on a spinning
wheel called a charkha. It is a versatile fabric, cool in the summer and warm in the winter.
However, being a cruder form of material, it wrinkles much faster than other preparations of
cotton. In order to improve the look, khādī is often starched to have a stiffer shape. It is widely
accepted in fashion circles.
Mahatma Gandhi began promoting the spinning of khādī for rural self-employment
and self-reliance in 1920s India thus making khadi an integral part and icon of the Swadeshi
movement. The freedom struggle revolved around the use of khādī fabrics and the dumping of
foreign-made clothes. Thus it symbolized the political ideas and independence itself, and to this

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day most politicians in India are seen only in khādī clothing. The flag of India is only allowed to
be made from this material, although in practice many flag manufacturers, especially those
outside of India, ignore this rule. Khādī was used, and dyed random colors, in some of the
costumes for the Star Wars prequels, such as Mace Windu’s (Samuel L. Jackson) attire.
Khadi commands a sentimental value for Indians. It is often associated with

Mahatma Gandhi. Someone said, the first true Indian designer was Mahatma because of his
appeal to Indians to wear khadi garments. That appeal was necessitated because of the need of
creating self reliance and proving unity of India to English. Khadi also symbolized the need and
importance of indigenous manufactured goods. Khadi represented India’s resistance and
revolution. Khadi was also the face of Indian identity. Many people get confused between
charkha with kargha (handloom). The basic difference between the two is while khadi is
handmade; handloom yarn is processed at the mills.
The actual meaning of khadi is any cloth that is hand spun and hand woven (while
it is now used to refer to any handmade item of mass consumption like handmade soap and
paper). India has long history of textiles. In the Vedic period, Aryans used to produce their own
cloth. Khadi had an important role in marriage functions. Khadi charakhas were presented to
brides in their wedding trousseau to encourage spinning of the yarn.
The handspun cotton, known as Khadi is of special significance to Indians. Gandhi

elevated the fragile thread of cotton to a symbol of strength and self-sufficiency, and to provide
employment for the millions during India’s freedom struggle, and that symbolism of wearing
cloth made by human hands has continued till this day. These two forms of fabrics have always
confused people. While khadi is handmade, handloom yarn is processed at the mills.
Roman gold, says history, paid for the import of Indian textiles, while Alexander
the Great, when he invaded the country in 327 BC, was dazzled by the art of fabric making and
printing as also was Marco Polo the Venetian traveler. It was in 1921 that Gandhi launched the
movement of spin your own cloth and buy hand spun cloth which gained momentum making
khadi the fabric of the freedom struggle.

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Around that time Gandhi used khadi as the uniform for the first Non Cooperation
movement and the Gandhi cap had strong symbolic overtones- that of the Indo-British battle over
the looms of Manchester and a bid for a modern Indian identity. So deep rooted was the
sentiment attached to this fabric that Pandit Nehru wove for his daughter Indira a wedding sari in
salmon pink khadi while he was in jail. This sari is still worn by women of the Nehru-Gandhi
family on their wedding day.
In 1953 when the Khadi and Village Industries Board was established it had only
156 registered institutions. Today every village however remote or small has its own khadi
institutions. Initially the weaving of khadi was rather difficult as it was impossible two eave a
full length of cotton with the uneven khadi thread and at one time Gandhi is believed to have
threatened to wear a sack if he was not provided with a khadi dhoti. Today the range of khadi
products is unlimited from garments to household linen to furnishings, etc.
The weaving of khadi is preceded by the spinning of the thread on the charkha
after which it goes to the bobbin winder, warper, sizer and finally the weaver. While spinning is
organized by the khadi Board, weaving is done by the weaver at his home in an individual
capacity. Spinning is mostly done by the girls and women in the villages, while weaving is
dominated by men. Because of the work involved, the price of the khadi cloth when it reaches
the shops is more than that of the mill or handloom cloth.
Khadi over the decades has moved from a freedom fighter’s identity fabric to a
fashion garment. At one time it was scorned as fabric for the farmer and the rural wearer. Today
there is such an increasing demand for khadi is such an increasing demand for khadi cloth that
despite the million workers all over the country involved in spinning it they are unable to meet
the demands of the market.
Eight collections were presented of which khadi was a very significant one. Since
then the Tree of Life show has been presented several times for charity and caused a stir with its
creations. There are times when the price and coarseness of the fabric deterred the fashion
conscious from wearing it. But today khadi has many faces which are not just restricted to
cotton. There is Khadi is quite competitive now and depending on the style of the garment it

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could range between Rs.400-2500. There is a quaint story of how Gandhi while visiting a poor
village spoke to an old woman huddled in her dark dingy hut asking if there was anything she
needed. The woman said she had everything pointing to an old charkha in the corner.
The rediscovery of the charkha has brought in a new economic thinking for Indians. It
has given new life to the individual made him more resourceful and self dependent. Making
khadi a true start of democracy in the true sense. Khadi, however, can no longer be sold on an
emotional level. A new approach has to be adopted for the new generation who are unaware of
its original implications. It will be worthwhile for the young and trendy generations of the 90s to
discover the beauty of khadi and support is as a fabric of our tradition.
Kerala Khadi and Village Industries BoardThiruvananthapura
Kerala Khadi and Village Industries Board is a statutory body constituted by the Act IX of
1957 of Kerala Legislative Assembly. The Board is vested with the responsibility of organising,
promoting and developing Khadi and Village Industries in the State. It is the duty of the Board.
 To start, encourage, assist and run Khadi and Village Industries,
 To conduct training centres to arrange for training, arrange for publicity and
popularizing of goods.
 To arrange for the supply of raw materials to Khadi and village Industries and for the
sale of their finished products.
 To carry on trading activities to grant loans and other assistances for the development of
Khadi and Village Industries.

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‘Khadi’ means any cloth woven on handloom in India from cotton, silk or woolen yarn, hand
spun in India or from a mixture of any two or all of such yarns.
‘Village Industry’ means any industry located in rural area which produces any good or
renders any service with or without use of power and which the fixed capital investment (in plant
and machinery, land and building) per head of an artisan does not exceed Rs.1,00,000/-.
In order to perform the above duties, the Board receives funds from the State Government
as grant under plan and from the KVIC as loan and grant. Financial assistance is also being
recommended through other financial institutions. The schemes of the Board were implemented
through Co-operative Societies, registered institutions, individuals and departmental units of the
Board.
The headquarters of the Board is at Thiruvananthapuram. There are project offices in all the
14 districts and a major Khadi production Centre viz. Payyannur Khadi Centre in Kannur district.
The departmental activities in the 12 districts except Kannur and Kasaragod are implemented by
the concerned Project Officer and those in the Kannur and Kasaragod districts by the Director,
Payyannur Khadi Centre. The Board has its own office – cum - shopping complexes in Kollam,
Pathanamthitta, Alappuzha, Ernakulam, Thrissur, Palakkad, Kozhikode, Kannur Districts and for
the sub office, Payyannur Khadi Centre.
Now there are 691 employees (as on 31/03/2008) in the Board including Executives for
implementing the KVIC Schemes and State Plan Schemes. The following schemes were
implemented by the Board.
1. Pattern Scheme Khadi & Village Industries Commission

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The primary scheme for employment generation launched by the KVIC was known as the
Pattern Scheme. Financial assistance in the form of grant and loan was extended to the
beneficiaries as per the fixed pattern of KVIC for establishing Khadi or Village Industries units
and provide employments to the rural people. As per the pattern scheme Capital expenditure per
head fixed was Rs.15,000/-. The rate of assistance for Village Industries was 4% and Khadi loan
was interest free. The scheme was implemented from 1957 to 1994-95.
As per the pattern scheme 132 Co-operative societies and 47 Registered institutions were
financed by the Board for undertaking Khadi industry. Among these, 17 Co-operative Societies
and 10 Registered institutions are only working at present. 13 directly aided institutions of KVIC
are also engaged in Khadi industry in the State. During the period of implementation of the
pattern scheme, Co-operative societies exclusively for scheduled castes and scheduled tribes and
also general categories were registered and availed financial assistance for establishing KVI
units. 81% of the total co-operative societies were registered during this period.
1873 Co-operative societies, 2079 registered institutions and 14212 individuals were
financed by the Board for undertaking Village Industries.
One attracting factor for the Pattern Scheme is that it had special consideration for
traditional artisans, weaker section categories and Ex-servicemen etc. Even if it be so, there were
some drawbacks also for this scheme. The quantum of assistance prescribed during the inception
of the scheme was continued till 1994. As the cost of production was increasing day by day the
rate of assistance was very meager to run the unit successfully. But still there are units working
successfully.
2. Consortium Bank Credit Scheme of Khadi & Village Industries Commission

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The Scheme was introduced by the KVIC during 1995-96, as per the recommendations of
the High Power Committee appointed by the Government of India with Chairman as the Hon’ble
Prime Minister to study the problems on Khadi and Village Industries Sector.
Funds for assistance was extended to the Board as loan from the 1000 Crores of
consortium fund of the Nationalized banks on guarantee of the State Government. The Board had
disbursed the funds as loan directly to the beneficiaries based on the projects submitted by them.
Margin Money @25% is granted to the beneficiaries for their loan up to Rs.10 Lakhs. For
projects above Rs.10 Lakhs, but below Rs.25 Lakhs, 25% for Rs.10 Lakhs and 10% for the
amount exceeding Rs.10 Lakhs. This margin money amount was initially treated as loan and on
successful implementation of the unit and prompt repayment of loan it will be treated as grant.
The rate of interest was based on P.L.R for Village Industries and 4.5% for Khadi industry.
Consortium Bank Credit scheme was implemented with the aim of getting adequate
financial assistance for establishing the units. But the high rate of interest affected the repayment
and working of the units. Moreover, due to lack of publicity, Khadi and Village Industries Sector
faced a lot of problems in marketing also. Hence there was a downward trend in employment
generation. It is seen that only 33.5% of the co-operative societies were working during 1994-95,
which became 32% in 2000-01 and now it is only 10%. Registered institutions and individuals
also had downward trend but now it is little better.The low performance had also various other
reasons.
1.Mismanagement of the committee of Co-operative societies / Institutions.

2. Lack of adequate technical knowledge of the beneficiaries about the industry undertaken.
3.Lack of sufficient working capital in the case of Pattern scheme.

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4.Defaulted repayment by the beneficiary.

5. Delay in getting power connection.
The board has disbursed an amount of Rs.45.04 Crores to the beneficiaries under this
scheme to establish 1544 units creating employment opportunities to about 12473 persons. Out
of this, Rs.345.73 Lakhs was for Khadi Industry.
3. Interest Subsidy Scheme of Kerala Government
The interest subsidy scheme was intended to provide assistance to entrepreneurs /

institutions taking up the projects under Village industries with financial assistance from banks
and other financial institutions.
The Co-operative Societies / Institutions/ Individuals engaged in Village Industries

activities were not able to avail loans from financial institutions, as the rate of interest was very
high. In order to bring down the burden of the borrowers, the Government had agreed to bear a
portion of the interest (8.5%) by way of subsidy. The scheme was introduced during 1990-91
with the Budgetary support of State Government. The units were given interest subsidy 8.5% for
their loan availed of from various financial institutions for establishing village industries units.
The Government had sanctioned and released a sum of Rs.90 Lakh during the 7th plan,
Rs.200 Lakh during the 8th Plan, a sum of Rs.248.52 Lakh during the 9th Plan and a sum of
Rs.130 Lakh during the 10th plan for the scheme interest subsidy to Village Industries. The
Board had disbursed the entire amount of Rs.668.52 Lakh and created 29734 number of
employment opportunities. The scheme was commenced in 1990-91 and it is closed in the year
2006-07.

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4. Rural Employment Generation Programme of Khadi & Village Industries Commission
This scheme was launched by the KVIC during 1996-97 with a view to generate
employment opportunities among unemployed rural people under the Khadi and Village
industries Sector. The scheme which is also known as Margin Money scheme.
Under this programme, the beneficiaries are entitled to get Margin Money assistance as
grant for the loans availed of from various financial institutions and banks, for establishing V.I..
Units in rural areas as approved by the KVIC. The beneficiaries have to submit project proposals
recommended by the concerned project officer of the Board to the banks for getting finance. On
receipt of the orders of the bank sanctioning loan and release of first installment of loan, the
Board will release the Margin Money grant to the joint account of the beneficiary and the project
Officer concerned.
Margin Money is sanctioned by the Board for beneficiaries belonging to SC/ST, Women,
minority community and their institutions, Ex-servicemen, physically handicapped, Margin
Money will be 30% and others will be 25%.
KVIC has allotted a sum of Rs.62.30 Crore to the Board as Margin Money Grant to the
beneficiaries. The Board has disbursed the whole amount to 4949 units with a Project cost of
Rs.241.91 Crore creating 70,777 number of employment opportunities to rural people under the
V.I. Sector for the period from 1997-98 to 2007-08. The scheme was discontinued with effect
from 01/04/2008. A new scheme namely PMEGP will be launched by the Government of India
for the year 2008-09.

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State Government Plan Schemes.
The Kerala Khadi and Village Industries Board is implementing departmental schemes
mainly under the State plan Schemes. The Board runs departmental units for Khadi and certain
Village Industries. These units were started with a view to provide regular employment to rural
artisans within their local premises. There are 371 departmental Khadi production centres and 20
departmental Village Industries production centres are working under the Board as on 31-03-
2008. Project Officers in the districts are the implementing officers. The units in Kannur and
Kasaragod districts are under the direct control of the Director, Payyannur Khadi Centre, which
is one of the major Khadi production Centres under the Board. Training in Khadi spinning and
Weaving are imparted in these production centeres. Financial assistance received under Plan
from the State Government and Local Self Government are utilized for this purpose.
So far the Board has financed 2011 Co-operative Societies, 2161 registered institutions
and 15813 individuals. In addition to this 424 departmental units were also started.
Out of these, 320 Co-operative Societies, 712 registered institutions 9180 individual units
and 371 (234 spinning units and 137 weaving units) departmental units are working under the
Board as on 31-03-2008.
As on 31-03-2008, there were 4,250 (Spinners 2670, Weavers 1320 and others 260) artisans
working under Khadi Sector and 1,50,049/- persons under Village Industries Sector.
Marketing

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The Board also runs sales outlets in all districts departmentally and on agency basis. The
Board has 40 Grama Soubhagya units (directly managed by the Board) 46 Khadi soubhagya
(agency outlets), 131 Grama Silpas (G.S. Depots attached to Departmental Khadi Production
Centres) and 1 mobile sales van as on 31-03-2008. The Board conducts exhibitions, special
melas etc. to help the units to sale their products. The Board is regularly participating in the India
International Trade Fair at New Delhi, organised in connection with the Nehru Jayanthi
GOVERNMENT POLICIES
Khadi and village industries commission’ is the Indian government body which
promotes the usage of khadi. Khadi production and selling comes under the small scale industry
sector. This government body was created by an act which was passed by the Parliament. This
gave a boost to the khadi manufacturing sector of India, as a result many new outlets of khadi
gramodyog opened all over the country. These shops sell stitched as well as unstitched khadi
fabrics. Every year starting from the date- 3rd October to January 29th all khadi gramodyog
bhavans provide discount to the public on various khadi products. It comes under the category of
Indian handloom. This sector also generates employment for the rural population of India. Indian
government conducts various exhibitions and trade fairs in India and abroad to promote this
fabric.
The small scale industries engaged in manufacturing of khadi gets economic

redemption for the raw materials and production costs by Indian government. According to a
recent survey done it provides employment to 14.97 lakhs of people, the total annual production
of khadi is 111.49 million sq. mtrs.
Khadi over the decades has moved from a freedom fighter’s identity fabric to a
fashiongarment. Today there is such an increasing demand for khadi that despite of the

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thousands of workers involved in spinning and producing khadi fabric, the demand of the
market does not gets fulfilled.
Khadi has gained worldwide appreciation as it is handmade, durable, long lasting

and organic in nature. The fabric is produced by the masses for the masses. It is associated with
Gandhian philosophy as well as makes a fashion statement. Through the medium of khadi
weaving, the weaver expresses art and designing by the spindle and loom. It is widely accepted
in the Indian fashion circle. Leadingfashion designers now include it in their collection by
designing clothes with khadi material. There is huge demand of it in international market,
especially in western countries
A committee on strengthening of the Khadi and Village Industries sector was set up
under the chairmanship of Shri.K.C.Pant, Deputy Chairman of Planning Commission. The
report of the Pant Committee, submitted in November 2001, recommended a special package for
the development of the sector. The Ministry of Agro and Rural Industries, which is the nodal
ministry for the Khadi an d Village Industry sector, is implementing this package. The package
includes: (i) providing the option of Market Development Assistance (MDA) or Rebate for khadi
cloth ; (ii) continuity of rebate/MDA for 5 years; (iii) creation of a data base for the sector; (iv)
intensive marketing support so that the sector may fulfill the objectives of generating rural
employment and improving the quality of life of the rural people.
Some of the technologies developed by the R & D institutions under the KVIC are: High
productive 6,8 and 12 spindle all steel New Model Chrkha (NMC). Development of mine spindle
charkhas for muslin khadi.
 Production system for 500 & 600 counts muslin khadi.

 New shades of herbal dyes.

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 Suitable and modern jacquard looms for weaving.

 Improvement in loom for northeastern state.
 Production of portable Ghani for vegetable oil extraction.
 Isolation & naturalizing of bitter aspect from neem.
 Development of LYMPO bricks from ash of rice husk & broken brick lumps.
 Formulation of new herbal formulations & herbal soaps.
 Use of non-edible oils in soap formulations.
 Use of cashew nut liquid in rubber manufacturing.
 Use of different fibers in handmade paper.
 Decorticators for oil seeds and pulses.
 Development of paddy de-huskers and rice polishers.
 Improvement of the potter wheel.
 New technology for tile making.
 Neera preservation.
 Value added products of honey, bakery and fruit products.
 Curing of bee diseases and artificial insemination of bees.
Over the years, the production of khadi cloth has been on the decline. Hence
employment in this era also falling. The main reasons for the poor performance in khadi
production were (a) uncertainity over the continuation of the rebate policy for khadi,which upset
the production schedule and output of khdi products; (b) high stock of unsold khadi and
mismatch in khadi production; (c) the project finance approach adopted in place of existing
pattern approach for village industries units took the rural entrepreneurs some time to get used
to; & (d) there was a shortfall in availing funds from banks and budgetary resources.
Marketing is the key success of any product. KVIC is providing the necessary
marketing inputs to the Khadi and Village Industry sector for both domestic as well as export
marketing. Its main focus, however, is on domestic marketing. Financial assistance is provided to

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directly aided institution, State/Union territory Khadi and Village Industries Board and their
aided organizations for setting up sales outlets, purchase of mobile vans and organizing
exhibition to create awareness about Khadi and Village Industry products. For village industries
afforts would be made to provide adequate finance, tax excemption, particularly in sales tax,
octroy, purchase tax, etc. awareness would be generated in village industries about the Margin
Money Scheme of the KVIC and to prepare economically viable and bankable projects by village
industries and enable the artisans to produce items round the year. Special quality assurance and
product development programme would need to be taken up for village industries to increase
their marketability.
MAIN STRATEGIES OF THE KHADI AND VILLAGE INDUSTRIES

SECTOR FOR THE TENTH PLAN
i. Provide employment to rural people in villages.

ii. Produce saleable/marketable products.
iii. More emphasis on “No Loss” instead of “No Profit” by Khadi and Village
Industries.

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2.2 COMPANY PROFILE
Cannanore Sarvodhaya Sangh, recognized by the Khadi and village Industries

Commission, Govt of India has to its credit a great tradition of half a century of glorious
existence. The sangh, headquartered at Thalassery, within Kannur District has a network of
operation spread over four neighbouring districts.We have Khadi village industries sale centers
of khadi weaving, spinning centers of Khadi. Apart from above, the Sangh has been actively
engaged in the production of soap, agarbathi, furniture, leather products, fibre products and in the
collection and purification of honey. It produces bakery items too.
OBJECTIVES OF THE SANGH.
1. To improve the economic and moral and social standards of villagers in the area of
operation of the Institution.

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2. To alleviate poverty and bring about better living conditions, mutual co-operation and
unity among the villagers and in general rural development by implementing KVI Programmes.
3. To develop a spirit of community life and community ownership among the people and
to establish a sarvodhaya social order based on truth and non violence.
Khadi
It is a symbol of purity, self reliance and freedom. Set in the serene rural life and its
culture, the Khadi is the product of human hand alone. Every thread and every yarn of its is
handmade, where your witness a total integration of man and nature. We have a vast collection
of Khadi products not merely of our make but also of similar institutions of other states. Have a
look at our unique Kuppadam dhothies, saris, and bed spreads, furnishing materials; muslin
clothes. The enticing and quality assured readymade wares. The charming north Indian
readymade products. And also seasonable dresses suitable to any climate. Khadi Silk the
colourful, pleasing and exciting Khadi silk saris with a superb Kerala touch. The traditionally
woven silk saris dhotis wedding dresses. Pretty woolen products Kashmir shawls blankets.
Furniture
Keralites always had love and adoration for wooden furniture. We offer various items
of elegant furniture designed to fully satisfy the tastes of Malayalees. Call it wooden poems
carved out of rosewood and World renowned Nilambur teak, at once Beautiful and purpose
serving. Cots, Divans, dining sets, computer-study table different types of shelves, steel furniture
for both home and offices and cane furniture with a aristocracy.
Spices
Kerala has been known for its spices through centuries. We offer a section in our sales
centre giving prominence to various spices. We offer also bakery products.... Different stationery
items for home requirements.
Earthenware Section

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We don't leave out earthen ware, for it was one of the oldest cottage industries of the
state. A special counter is offered for baked clay products.
Handicraft
What give fullness to the artistic concepts of Kerala are handicrafts. Here is a rich
collection of eye filling handicrafts products of wood, brass and white metal. Other artistic works
the stamp of Kerala.......unadulterated sandal wood oil...Herbal cosmetics.
BOARD STRUCTURE OF CANNANORE SARVODAYA SANGH

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Chart no:2.2.a
CURRENT BOARD MEMBERS
SL NO NAME DESIGNATION

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1 Mr. A. Surendran Secretary
2 Mr. K. Ashokan President
3 Mr. A.S.Sreedharan Vice President
4 Mrs. Mini Member
5 Mr. C.P. Sivadasasn ”
6 Mr. Prabhakaran ”
7 Mr. Mohanan ”
8 Mr. Rathhesan ”
Mrs. Meenakumari
9 ”

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KHADI VASTHRALAYA QUILANDY
The Quilandy branch of the Cannanore Sarvodaya Sangh is situated near the Police
Station Road in Quilandy Municipality. The sub units of the Quilandy unit (Khadi Vasthralaya)
are situated at Cheliya and Oorallur about 8 kms far away from Quilandy. 4 Administrative staff
and 73 labourers are taking work 57 looms in the unit including sub units. The labourers called
artisans. Most of the artisans are female and poor people. They earning the livelihood from the
job. The Sangham is start the functioning at 8:30 AM to 5 PM on every day. The weekly off is
on Sundays. All category of the employees getting equal payment on the basis of their service.
ITEM PRODUCED BY THE SANGHAM
TEXTILE ITEMS(COTTON,SILK,POLYSTER)
AGARBATHI
GINGER OIL
HONEY
SOAP
FURNITURE
Table no:2.2.b

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MANAGEMENT
Every organization a requires a good management for running the business effectively
and in a profitable manner. The basic features of management can be organized activities,
existence of objectives, relationship among resources, working with and through people, decision
making. Mc Farland defined the management as “ Management is defined for conceptual,
theoretical, and analytical purposes as that process by which managers create, direct, maintain,
and operate purposive organizations through systematic, co-ordinated, co-operative human
efforts.” So the Sangham having a good management for running the business.

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ORGANISATION STRUCTURE OF KHADI VASTHRALAYA
(KOYILANDY UNIT)
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Chart no: 2.2.b

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FUNCTIONAL DEPARTMENTS
PRODUCTION DEPARTMENT
Production is the main function of any business organization product is result of

transforming the resources in to finished goods. There are 73 employees working in the Sangham
out of total workers 58 are weaving remaining are engaged in the other department. Thus the
Sangham has 57 looms in which 17 looms are variety looms. The working of time of the shift is
8:30 A.M weavers working in the Sangham under the supervision of Weaving guide.
Production process of the Sangham included Spinning, Boiling, Bleaching, Dying,

Winding, Warping, Weaving and Finishing. The purchased sliver is converting into the yarn by
using of ‘Charkha’ is called Spinning. The production process being with boiling and bleaching
of yarn. This is done to increase the quality of yarn. The natural colour of the yarn is removed by
the bleaching. After boiling and bleaching of the yarn , dying is done in the dye house. This is
the process of winding the yarn in small rolls. In the warping the yarned different colors are
wound according to colour combinations required for weaving cloth. Weaving is done by with
the help of weaving machine. Finishing last process in the production process.
SALES AND MARKETING DEPARTMENT
Now a day there has been a radical change in the thinking of business organization. They
cannot survive if they conduct their business according to the selling concept. All business
concerns while doing business pursue economic social objective according to the certain
principlesand practices prevalent in the industry marketing concept is the man guiding force of

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pribciple which governs every business to the words of Philip Kotler, “Marketing is the business
activity directed at satisfying needs and works through an exchange process”.
Cotton, Polyster and Silk textiles, Oils, Honey, Furniture, and Leather items, etc are the
important product produced by Sangham. The Sangham has a showroom tosell the products to its
customers. The sale section is headed by a manager. There is good demand or products of the
Sangham locally. The Urban Societies, Hantex, helps to sell the products of the sangham. The
Sangham also makes its through exhibition conducted by the Kerala Government.
30% rebate is giving to the khadi products during festival period like Onam,
Bakrid,Christmas, Sarvodaya paksham.
MARKETING PROCEDURE OF SANGHAM
PROMOTION
PLACE TARGET MARKET PRODUCT
PRICE
LENGTH OF THE CHANNELS MARKETING IN THE SANGHAM
MANUFACTURE BUYER
MANUFACTURE AGENT BUYER

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MANUFACTURE WHOLESALES RETAILER BUYERS
HUMAN RESOURCE DEPARTMENT
Human resource management is a philosophy of people management based on the belief

that human resources are extremely important for sustained business success. An organization
acquires competitive advantage by using its people effectively and utilizing the expertise to
meet clearly defined objectives. HRM is any capable, flexible, and committed people, managing
rewarding the performance and developing key comprehensives. In the Sangham 73 workers
and employees are entering in different section of the work. So the management of these
workers to very important for the smooth functioning of the Sangham.
FINANCE DEPARTMENT
Finance is the life blood of business. The main source of the funds and loans for the e
Kerala Khdi Board is from government. The Sangham has also various investments. A well
managed accounting section is very important is in every concern.
Every transaction is recorded in the book. These books are kept in the office. The various
accounts are kept by the Sangham are given below.
 CASH BOOK
 PURCHASE BOOK
 SALES DAY BOOK
 GENERAL LEDGER
 CREDITORS LEDGER
 DEBTORS LEDGER

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 STOCK REGISTER OF FINISHED GOODS

 SALING OF ACCOUNT AND PERSONAL LEDGERS OF WORKERS
 POSTAGE ACCOUNT.
DEPLOYMENT OF LABOURERS IN THE UNIT AND SUB UNITS
SL No: Name of Unit/ No:of Looms Each Artisans Total No: of

for Looms Weavers
Sub Unit
1 Quilandy 15 1 15
2 Cheliya 17 2 34
3 Oorallur 10 1 10
4 Quilandy 15(Spinners)
Total 57 73
Table no: 2.2.c

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3.1 THEORETICAL REVIEW
Consumer behavior is the study of when why how and where people do or do not buy
product. It blends elements from psychology sociology social anthropology and economics. It
attempts to understand the buyer decision making process both individually and in groups. It
studies characteristics of individual consumers such as demographics and behavioral variables
in an attempt to understand people's wants. It also tries to assess influences on the consumer
from groups such as family friends, reference groups and society in general. Customer behavior
study is based on consumer buying behavior with the customer playing the three distinct roles
of user payer and buyer. Relationship marketing is an influential asset for customer behavior
analysis as it has a keen interest in the re-discovery of the true meaning of marketing through
the re-affirmation of the importance of the customer or buyer. A greater importance is also
placed on consumer retention customer relationship management personalization customization
and one-to-one marketing.
Social functions can be categorized into social choice and welfare functions. Each
method for vote counting is assumed as a social function but if Arrows possibility theorem is
used for a social function social welfare function is achieved. Some specifications of the social
functions are decisiveness neutrality anonymity monotonicity unanimity homogeneity and weak
and strong Pareto optimality. No social choice function meets these requirements in an ordinal
scale simultaneously. The most important characteristic of a social function is identification of
the interactive effect of alternatives and creating a logical relation with the ranks.
Marketing provides services in order to satisfy customers. With that in mind the
productive system is considered from its beginning at the production level to the end of the
cycle the consumer (Kioumarsi et al. 2009).The black box model shows the interaction of
stimuli consumer characteristics decision process and consumer responses. It can be
distinguished between interpersonal stimuli (between people) or intrapersonal stimuli (within

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people).The black box model is related to the black box theory of behaviorism where the focus
is not set on the processes inside a consumer but the relation between the stimuli and the
response of the consumer. The marketing stimuli are planned and processed by the economical
political and cultural circumstances of a society. The buyers black box contains the buyer
characteristics and the decision process which determines the buyers response.
CONSUMER PURCHASING BEHAVIOUR
A consumer’s decision to purchase or not to purchase a product or service is an

important moment for the most marketers. It can signify whether marketing strategy has been
wise. The buying behavior of final consumers – individuals and households who buy goods and
services for personal consumption.
MODEL OF CONSUMER BHAVIOR
Consumers make many buying decisions every day. Most large companies research
consumer buying decision in great detail to answer questions about what consumers buy, where
they buy, how and how much they buy, when they buy and why they buy. Marketers can study
actual consumer purchases to find out what they buy, where and how much.but learning about
the whys of consumer behavior is not so easy-the answers are often locked deep within the
consumers head.
Penetrating the dark recesses of the consumer’s mind is no easy task. Often consumers
themselves don’t know exactly what influences their purchases. “Ninety-five percent of the
thought, emotion, and learning occur in the unconscious mind, which is without our awareness.”
The marketer wants to understand how the stimuli are changed into responses inside the
consumer’s black box, which has two parts. First, the buyer’s characteristics influence how he

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or she perceives and reacts to the stimuli. Second the buyer’s decision process itself affects the
buyer’s behavior.
BASIC MODEL OF CONSUMER DECISION MAKING
STAGE BRIEF DESCRIPTION
Problem Recognition The consumer perceives a Motivation

need becomes motivated to
solve a problem.
Information Search The consumer searches for Perception

information required to
make a purchase decision.
Information Evaluation The consumer compares Attitude Formation

various brands and
products.
Decision The consumer decides Integration

which brand to purchase.
Post-purchase Evaluation The consumer evaluates Learning

their purchase decision.
Table no:3.1.a

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n CUSTOMER PREFERENCE WITH REFERENCE TO THE QUALITY OF THE
BUYER DECISION PROCESS

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The buyer decision process consists of five stages: need recognition, information search,
evaluation of alternatives, purchase decision, and post purchase behavior. Clearly, the buying
process starts long before actual purchase and continues long after. Marketers need to focus on
the entire buying process rather than on just the purchase decision. The buyer decision process
can be shown in the below figure.
Chart no:3.1.a
The figure suggests that consumers pass through all five stages with every purchase.
But in more routine purchases, consumers often skip or reverse some of these stages. The five
stages of the purchasing decision can explained below.
NEED RECOGNITION

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The buying process starts with need recognition-the buyer recognizes a problem or need.
The need can be triggered by internal stimuli when one of the person’s normal needs- hunger,
thirst, sex-rises to a level high enough to become a drive. A need can also be triggered by
external stimuli. At this stage, the marketer should research consumers to find out what kind of
needs or problems arises, what brought them about, and how thwy led the consumer to this
particular product.
INFORRMATION RESEARCH
An interested consumer may or may not search for more information. If the consumer’s
drive is strong and a satisfying product is near at hand, the consumer is likely to buy it then. If
not, the consume may store the need in memory or undertake an information search related to
the need. The amount of searching you do will depend on the strength of your drive, the amount
of information, the value you placed an additional information and the satisfaction you get
searching.
Consumers are obtained information from any of several sources. These include
personal sources, commercial sources, public sources and experiential sources. The relative
influence of these information sources varies with the product and the buyer. Generally, the
consumer receives the most information about a product from commercial sources those
controlled by the marketer. The most effective sources, however tend to be personal.
EVALUATION OF ALTERNATIVES
The marketer needs to know about alternative evaluation which is how the processes
information to arrive at brand choices. Unfortunately, consumers do not use a single evaluation
process in all buying situations. Instead several evaluation processes are at work.

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How consumers go about evaluating purchase alternatives depends on the individual

consumer and the specific buying situation. In some cases consumers use careful calculations
and logical thinking. At other times the same consumers do little or no evaluating; instead they
buy on impulse and rely on intuition.
PURCHASE DECISION
In the evaluation stage, the consumer ranks brands and form purchase intention.
Generally the consumer’s decision will be to buy the most preferred brand, but two factors can
come between the purchase intention and the purchase decision. The first factor is the
The second factor is unexpected situational factors. The consumer may form a purchase
intention based on factors such as expected income, expected price, and expected product
benefits. However unexpected event may change the purchase intention. Thus preferences and
even purchase intentions do not always result in actual purchase choice.
POSTPURCHASE BEHAVIOR
The marketer’s job does not end when the product is bought. After purchasing the
product, the consumer will be satisfied or dissatisfied and will engage in post purchase behavior
of interest to the market. What determines whether the buyer is satisfied with a purchase? The
answer lies in the relationship between the consumers’ expectations and the product’s perceived
performance. I the product falls short of expectations, the consumer is satisfied; if it exceeds
expectations, the consumer is delighted.
Almost all major purchases result in cognitive dissonance, or discomfort caused by post
purchase conflict. After the purchase, consumers are satisfied with the benefits of the chosen
product and are glad to avoid the drawbacks of the product not bought.

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INTERNAL INFLUENCES
Consumer behavior is influenced by demographics, motivation, knowledge, attitudes,

beliefs and feelings.
EXTERNAL INFLUENCES
Consumer behavior is influenced by culture, ethnicity, family, social class, reference

group and market mix factors.
WHAT INFLUENCES PURCHASING?
As we discussed the decision-making process for consumers is anything but straight

forward. There are many factors that can affect this process as a person works through the
purchase decision. The number of potential influences on consumer behavior is limitless.
However, marketers are well served to understand the key influences. By doing so they may be
in a position to tailor their marketing efforts to take advantage of these influences in a way that
will satisfy the consumer and the marketer.

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MAJOR FACTORS INFLUENCING CONSUMER BEHAVIOR
Consumers buying behavior is influenced by cultural, social, personal and psychological

factors.
CULTURAL FACTORS
Cultural factors exert the broadest and deepest influence on consumer behavior. The roles
played by the buyers culture, subculture and social class are particularly important.
 Culture
Culture refers to that complex whole which includes in it knowledge, beliefs, art or
anything man acquires as a member of society. From the perspective of consumer behavior,
culture can be defined as ‘the sum total of learned beliefs, values and customs may influence
behavior in a general way, in so far as they provide standards which direct lifestyle. They can
sometimes by very specific by encouraging or discouraging consumption of certain products.
 Subculture
Each culture consists of smaller subcultures that provide more specific

identification and socialization for their members. Sub cultures include nationalities, religions,
racial groups and geographic regions. Some consumers’ buying habits are still dominated by
religious consideration. In India, diversity of culture and subculture makes consumer behavior a
complex study for marketing people.

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 Social Class
Virtually all-human societies exhibit social stratification. Stratification sometimes

takes the form of a caste system where the members of different castes are reared for certain
roles and cannot change their caste membership more frequently; stratification takes the form of
social class.
SOCIAL FACTORS
 Reference Groups
One of the most pervasive of group influences is termed the reference group. A
persons reference groups consists of all the groups that have a direct or indirect influence on the
person’s attitudes or behavior. Reference group can be of three types. Primary groups of face to
face groups such as family, close friends, neighbors, office or professional colleagues, and
secondary groups such as fraternal organizations, professional bodies, etc. Thirdly people are
also influenced by groups to which they do not belong to called aspirational groups.
 Family
The family is the most important consumer buying organization in the society and it
constitutes the most influential primary reference group. Family is clearly relevant in
consumers’. It is also relevant in a more direct fashion, in that many consumer decision may be
an outcome of a family decision process.
 Roles and statuses
A person participates in many groups, family, clubs, organizations etc. The

PRODUCT
person’s position in each group can be defined in terms of role and status. A role consists of the
activities that a person is expected to perform. Each role carries a status.
PERSONAL FACTORS
 Age and stage in the life cycle
People buy different goods and services over their lifetime. Taste in clothes,
furniture and recreation is all age related. Consumption is shaped by the family life cycle.
Marketers often choose life-cycle groups as their target market. Consumer needs and goals
naturally reflect their circumstances. A major variable in these circumstances is the stages in the
life cycle from birth to death and they change in an orderly coherent problem. The values of
stages in life cycle as a predictor of purchasing behavior has been criticized in some specific
applications.
 Occupation and economic circumstances
Occupation also influences a person’s consumption pattern. Product choice is

greatly affected by economic circumstances; spendable income, savings and assets, debts,
borrowing power and attitude toward spending versus saving. The occupation of the consumer
will have direct influence on his buying motive and power to satisfy that motive. The salaried
people will have certain norms whereas the self employed, businessmen industrialists,and
politicians will have different norms. The consumer’s economic conditions and disposable
income will influence the pattern of buying activity and type of goods and servicesthey seek in
the market.
 Lifestyle
People from the same subculture, social class, and occupation may lead quite

PRODUCT
different lifestyles. A lifestyle is the person’s pattern of living in the world expressed in
activities, interests and opinions. Lifestyle portrays the world person interacting with his or her
environment. Lifestyle analysis assumes that a marketer can plan more effective strategies to
reach target market if he knows more about them.
 Personality and self concept
This is an important characteristic of a person’s buying behavior and his decision

making mindset. Each person has a distinct personality that influences buying behavior. It is
that distinguishing psychological characteristics that lead to relatively consistent and enduring
responses to environment. Related to personality is self-concept or self image. Marketers try to
develop brand images that match target markets self image. Personality is a set of distinct
character traits, attitudes, beliefs, habits and outlook. It is complex psychological concept. Its
primary features are self concept, roles and levels of consciousness. Personality traits such as
dominance creativity, aggressiveness, timid, responsible, erratic, weak, pleasant, friendless,
active, impulsive, suave, matured, cool, introvert, extrovert, can determine how a person would
behave.
PSYCHOLOGICAL FACTORS
 Motivation
A person has many needs at a given time. A need becomes a motive when it is aroused
to a sufficient level of intensity. A motive is a need that is sufficiently pressing to drive the

PRODUCT
person to act. Motivation refers to a state of need-arousal-a condition exerting push on the
individual to engage in those activities which he anticipates will have the highest probability of
bringing him gratification of a particular need pattern.
 Perception
Perception is the process by which an individual selects, organizes and interprets

information inputs to create a meaningful picture of the world. How a, motivated person
actually acts is influenced by his or her perceptions of the situation. A motive is a drive or a
force which activates behavior in order to satisfy a need. Motivation provides a basic influence
upon buyer behavior, while perception is operationally critical. A motive creates a disposition to
act. Perception influences or shapes this behavior. Perception is the direction for the kind of
behavior we would expect. It is the sensing of stimuli external to the individual exists.
 Learning
When people act they learn. Learning involves changes in an individual’s behavior
arising from experience. Most behavior is learned except the behavior based on instinctive
responses, growth or temporary physiological states of the organism such as hunger or fatgue.
Learning is a product of thinking, reasoning, information processing and of course perception.
Buying behavior is substantially affected by the learning experiences of buyers. Learning
process involves three steps. Firstly, a drive is a strong internal stimulus which impels action.
Secondly, cues are weak stimuli. Cues determine when the buyer will respond. Third the
individual has to choose some specific responses in order to fulfill the driver or the need which
was acting as a strong stimulus.

PRODUCT
 Beliefs and attitudes
Through doing and learning, people acquire beliefs and attitudes. These in turn
influence buying behavior. A belief is a descriptive thought that a person holds about
something. The beliefs make up product and brand images and people act on these images.
An attitude is a person enduring favorable or unfavorable evaluations, emotion

feelings and action tendencies toward some object or idea. Thus a company would be well
advised to fit product into existing attitudes rather than try and change people’s attitudes.
Attitude research is helpful investigation into predicting and explaining the buying
behavior of consumers in in a particular situation. Consumers resist change in attitude so easily.
Therefore, advertising campaigns and promotional strategies are used to change consumer
attitude and consumer buying decisions. A major change in attitude in a short time is difficult to
achieve.
 The Ego
The ego is the ‘executive’, determining how the individual shall seek satisfaction of his
needs. Through perception, memory, judging and thinking, the ego attempts to integrate the
needs, on the one hand and the conditions of the external world on the other, in each a manner
that needs can be satisfied without danger or harm to the individual. Often this means that
gratification must be postponed until a situation has developed, or has been encountered which
does not contain harm or danger. The turnpike driver who does not exceed the speed limit
because he sees that police check is under the influence of the ego. So is the driver who sees no
cars on a straight stretch and takes the opportunity to drive at excessive speed. So is the driver
who sees no cars on a straight stretch and takes the opportunity to drive at excessive speed.
 The Superego

PRODUCT
The superego involves the ego-ideal and represents the positive standards of ethical and
moral conduct the ‘judge’, evaluating the ethics and morality of behavior and, through guilt
feelings, administering punishment when these are violated. If a driver obeys the speed limit
because he would feel guilty, the first driver above is under the influence of the superego.
The purchasing of specific consumer goods can be considered from the point of view of
these two influences. Certain goods carry little superego influence, and the individual is
psychologically free to try maximize the probability of encountering harm, in so doing. Certain
goods carry little superego influence, and the individual is psychologically free to try maximize
the probability of encountering harm, in so doing. Other goods, however, tap the superego.
When a product represents an aspect of the ego-ideal, there is a strong positive force to posess it
 . Cognitive Dissonance
According to Festinger(1957) it is a psychological tension having motivational

characteristics. The theory of cognitive dissonance concerns itself with the conditions that
arouse dissonance in an individual and with the ways in which ndissonance can be reduced.
 Maslow’s Hierarchy Needs
Abraham Maslow, in this treatise Motivation and Personality, suggested that human
needs can be considered and placed in order of their importance and they are five levels of
hierarchy which are given below in the figure

PRODUCT
N NE
SNAEEEE DD S
O N
TEI D SS
S E C U R IT Y
AOCG TMU
A INCDA L LI
P
E HS
S E
YT L
S F
I
E
S A FE T Y OE L
Chart no:3.1.b
1. Psychological needs:- The primary needs for survival like food, water, air shelter, etc.
2. Safety & security needs:- these needs are parts of secondary needs which are essentially
required for physical survival like social security and physical protection.
3. Social needs:- These needs strive to gain social acceptance, fiendship, belonging and
affection in the family and society.
4. Ego needs:- Striving to achieve a high social standing, success, status, in relation to other
members in the society.
5. Self actualization needs:- An urge or drive to self fulfillment.

PRODUCT
3.2 EMPIRICAL REVIEW
THE NEED TO UNDERSTAND CUSTOMER PREFERENCE
Have you ever wondered why your company often loses relatively satisfied customers?
Why is it that customers will often indicate they are satisfied with how they have been treated
but then leave for a competitor at the first opportunity? Why is customer defection often
unrelated to price? The answers to these and other related questions are found in coming to an
understanding of customer preference.

PRODUCT
The idea that customers prefer one product or one service over another is not new. The
ability to identify and measure the elements of such preference decisions with any accuracy and
reliability has only recently become available.
Research into this area of consumer behavior has brought understanding to some of the
major issues with standard customer satisfaction research. Most importantly, we have come to
realize that high customer satisfaction does not assure continued customer preference.
Satisfaction research over the past fifteen years demonstrates that high satisfaction scores, while
a measure of corporate performance on a set of important criteria, satisfaction does not assure
continued customer preference. Satisfaction research over the past fifteen years demonstrates
that high satisfaction scores, while a measure of corporate performance on a set of important
criteria do not adequately explain the composition of preference formation and therefore often
serve as insufficient predictors of sustained preference or what is normally referred to as
customer loyalty.
Loyalty as a concept has also shown itself to be difficult to define. Like beauty, loyalty
is truly in the eye of the beholder. We understand there are different types and degrees of
loyalty and some of these are not appropriate in describing the relationship between a consumer
and a company. However, preference (defined as The power or ability to choose one thing over
another with the anticipation that the choice will result in greater satisfaction, greater capability
or improved performance) has demonstrated the ability to be effectively measured and to
provide meaningful insight into the choices consumers make when selecting one provider over
another and when determining to continue a relationship over time.
THE APPLICATION OF THE THEORY OF REASONED ACTION

MODEL

PRODUCT
The theory of reasoned action represents a comprehensive integration of the attitude

components that ultimately are the building blocks of preference. The model is designed to
provide a better understanding of how consumer preference is formed and, correspondingly, to
provide the means to accurately predict consumer preference behavior. Figure one provides an
overview of customer preference formation from the theory of reasoned action point of view
In order to understand preference we need to determine the functional or performance

demands involved in the purchase, the desired emotive outcomes, and the subjective norms
consumers use to determine their desire for one product or service over another. The primary
assumption of the model is that individuals make considered purchases. In some cases the
consideration may be minimal and the purchase behavior almost habitual (as when deciding to
buy a new comb while standing in line at Target). In another the period of consideration
(incubation) may be extensive and each element of the consideration process carefully
examined (as when deciding to purchases a new home).
The important contribution of the reasoned action model is the realization that
consumers utilize the model in all purchase experiences to a lesser or greater extent. Of equal
importance is the realization that the components used to make a preference decision are also
the ones employed by a consumer to evaluate the performance success of the product or service
purchased and the company responsible for them. Therefore, as the components of preference
change, the elements influencing satisfaction change accordingly. The relationship is dynamic
and fluid therefore static or predetermined satisfaction analytic packages often miss the most
important elements of preference and can create a false sense of security on the part of
companies who think that since their customer satisfaction scores are high they must in turn
have relatively loyal customers.
Let’s look at the last part of our definition of preference.
The power or ability to choose one thing over another with the anticipation that the
choice will result in greater satisfaction, greater capability or improved performance.

PRODUCT
The theory of reasoned action assumes a consequence for the action taken. We prefer
some product, someone, or some service because we determined the object was best aligned
with our performance and emotive requirements as judged through our comparative norms. We
evaluate the performance in light of how well the product, person or service meets our
preference expectations. Here is the problem with most “preordained” customer satisfaction
programs. Companies tend to ask their customers about corporate performance on a
predetermined set of behavioral topics which may or may not align to the preference
expectations of those customers. Companies tend to ask their customers about corporate
performance on a predetermined set of behavioral topics which may or may not align to the
preference expectations of those customers. This mistake is amplified when companies treat
their customers monolithically and assume that the preference drivers for one group of
customers are the same as that for another. It is essential, especially for companies attempting
to serve highly competitive markets with many product/service offerings, to differentiate
preference formation components and preference expectations within “naturally forming” or
emergent customer segments.
WITH-IN SEGMENT DEPLOYMENT OF CUSTOMER PREFERENCE
Customer preference analysis is really a call to action. By understanding the preference

formation components and the preference expectation evaluations by group or segment of
customers, companies can design response strategies that are truly responsive to vital customer
expectations and that differentiate in the marketplace.
Within the framework customer satisfaction can begin to play a very important role as a
measure of a company’s ability to deliver and execute against preference evaluation elements of
a given customer segment. These expectations can now be differentiated into expectants -

PRODUCT
basic, cost-of-entry preference expectations, satisfiers - preference expectations that help to

constrain abandonment or churn and attractors - preference enhancements (often focused on the
emotive components) that attract new customers.
R.L. Oliver (1994) observed that customer satisfaction results from a process of internal
evaluation that actively compares expectations before purchase of a product/service with
perceived performance during and at the conclusion of a purchase experience. The deployment
of the theory of reasoned action as a model for preference formation explains why such
evaluation takes place. Satisfaction is a product of the alignment between prescribed
functional and emotive performance elements and the ability of the company to meet the
performance expectations. Sustained preference is a product of meeting these
requirements over time.
What we have referred to as functional and emotive performance elements Oliver

defines as “evaluative elements” (expectants, satisfiers and attractors) that, in turn, comprise a
single product/service evaluative experience. Sustained preference can be thought of as a series
of experience interactions that are continuously being modified as the components of preference
are modified over time.
Let’s consider an individual considering the purchase of a new automobile. This is, for
most people, a highly considered purchase. The potential automobile customer may have a
preference profile like the one below with a number of emotive and functional components that
must be met for preference to form.
Notice that the evaluation experience, to use Oliver’s words, is not simply focused on
the performance and reliability issues of the automobile; but also on how the customer is treated
and that the emotive elements of customer treatment can be as clearly defined and measured as
the functional components of the automobile. However, just as different individuals want
different types of automobiles with different functional capabilities; different people have

PRODUCT
different emotive demands as well. The key to understanding customer preference is to

understand how many evaluation experiences exist within a single market, what the mix of
emotive and functional attributes are with each experience, and which of the attributes provide
the greatest return on investment, that is, comprise a preference demand that is a requirement
within several of the identified customer segments. Such understanding requires both
qualitative and quantitative rigor.
HOW ICR ACCOMPLISHES THE ANALYSIS
If we overlay the theory of reason action with the stages of the purchase experience we are able
to interpret the evaluation experiences in light of a given purchase journey.
Each stage in the purchase journey contains emotive and performance preference
components. The resulting deliverables for an ICR client provide insight into which
components of the preference formation for an individual customer, segment of customers or
consumers in a specific marketplace are essential to a positive preference decision. The
determined relationships between the prominent constructs comprise the issues of increased
customer satisfaction and the required relationships necessary for developing sustained
customer preference.
ICR guides a client through the entire preference formation model development process.
Our research design formalizes the complicated decision making process consumers employ and
what is required of our clients to influence that decision-making process to result in consumer
preference for their product or service. The ICR methodology requires the development of a
research plan that includes the development of a formal customer preference formation theory
for either the entire marketplace of determined customer segments depending upon the needs of
our client. The client-specific preference formation models have different analytical
requirements depending upon their organization and complexity. There is no such thing as one
design or a single statistical model that meets the needs of every client or every market
environment. The ICR methodology results in detailed customer requirement information

PRODUCT
focused on our client’s market position and unique to the client’s customer demands and
expectations.
ICR’S PREFERENCE FORMATION MODEL (PFM)
Preference is formed when the customer is bonded to your company through the
establishment of a mutual benefit. Successful companies therefore go beyond delivery of a
commodity or service; they pursue the development of a relationship with their customers. This
bonded relationship will be more likely to survive competitive attacks than the mere purveying
of goods or services or an over reliance on aggressive pricing models.
One of the components of the Preference Formation Process is the development of a Preference
Formation Profile. This profile breaks out the required attributes of each stage of preference
formation.
The profile further differentiates the required attributes of preference into emotive or
functional attributes and defines EACH as attractor, satisfier or expectant. The PFM results in a
likelihood of preference formation index (PFI) which represents the strength of preference for a
given product/service. We have found that the preference formation index (a standardized score
ranging from one to one hundred) can range dramatically given the market and population under
consideration. When the index is weak (seventy-five or below) it means that while the elements
of preference are “in play” there is a reasonable amount of indifference toward the preference
target. For example, the preference drivers for breakfast cereals may not drive to a prominent
index due to the fact that many consumers are relatively indifferent to many of the considered
preference drivers and focus on price and availability almost exclusively. A strong index (one
hundred and fifteen or above) indicates there is a prominent panoply of formation drivers that,
in combination and often in some sequence, are required for a declared preference to be formed.
An excellent example is a preference for a financial provider. Price and availability may still be
considerations but now many other attributes are required. These attributes will be both
functional and emotive because of the complex nature of preference development for a financial
advisor.

PRODUCT
The PFI and the overall PFM model represent both a global assessment and a diagnostic
examination of the developmental requirements of customer preference for a particular product
or service. When used in concert with a brand audit for a particular company or organization
the end result is a strategic roadmap of how to develop loyal customers (defined operationally as
those who identify that organization with their preference), attract new customers (determine
market or segment specific PFM models), and retard customer departure (by focusing on
preference attributes where corporate performance is weak).
CONCLUSION
John McKean, in an excellent book, Customers are People – The Human Touch thinks
of the organization-customer interaction as a series of cascading touch points. Those touch
points comprise the customer environment and it is through interacting with that environment
that customer preference is formed. The ICR PFM process is an excellent analytical tool for
discovering the nature of these touch points, their essentiality for preference formation and the
combination and sequence of such touch points that result in a customer environment that
maximizes corporate ability to construct sustained customer preference.
4.1.DATA ANALYSIS AND INTERPRETATION
This chapter includes the analysis and Interpretation of the collected data. Statistical
tools or techniques like percentages were used for classifying the respondents. Interpretations
were made on the basis of the results of the analysis.
NEED FOR INTERPRETATION:

PRODUCT
Interpretation is essential for the simple reason that the usefulness and vitality of the
research finding lies in proper interpretation. It is being considered as a basic component of
research process because researcher can better appreciate only through interpretation. Why his
findings are? What they are? And can make others understand the real significance of their
research findings. Through interpretation only the researcher can understand the abstract
principle that works beneath his findings.

PRODUCT
Table No 4.1.1.
QUALITY
RESPONSE NO.OF RESPONDENTS % OF RESPONDENTS

EXCELLENT 39 51
GOOD 14 18
AVERAGE 8 10
BELOW AVERAGE 13 17
POOR 3 4
TOTAL 77 100
Chart No 4.1.1.
QUALITY
60%
51%
50%
40%
% of respondents
30%
18% 17%
20%
10%
10% 4%
0%
excellent good average below average poor
INTERPRETATION
From the above mentioned table and graph it s clear that the70% respondents stated
that khadi offers the customers the best quality products .On the other hand 11%of the

PRODUCT
customers are neutral with the quality of the products. Hence it can be inferred that majority of
the customers are satisfied with the quality of the products in khadi.
Table No 4.1.2.
COMFORTABILITY
RESPONSE
NO.OF RESPONDENTS % OF RESPONDENTS
EXCELLENT 13 17
GOOD 34 44
AVERAGE 16 21
BELOW AVERAGE 11 14
POOR 3 4
TOTAL 77 100
Chart No 4.1.2.
COMFORTABILITTY
44%
45%
40%
35%
30%
21%
25% 17%
20% 14% % OF RESPONDENTS
15%
10% 4%
5%
0%
ENT OD AGE AGE OR

L O PO
EL
G ER ER
C AV AV
EX
LOW
BE
INTERPRETATION:
From the above table it s clear that 60% of the respondents are satisfied with the
comfort ability of the products bought from the khadi.22% of the respondents have a neutral

PRODUCT
opinion in the regard where as remaining 18% of the respondents have a view the comfort
ability of product is not good. Hence it can be inferred that the majority of the respondents are
satisfied with the comfortability of the product.

PRODUCT
Table No 4.1.3.
PRICE
RESPONSE NO. OF RESPONDENTS % OF RESPONDENTS

EXCELLENT 10 13
GOOD 32 42
AVERAGE 8 10
BELOW AVERAGE 15 19
POOR 12 16
TOTAL 77 100
Chart No 4.1.3.
PRICE
42%
45%
40%
35%
30%
25% 19%
16%
15% 10%
10%
5%
0%
ENT OD AGE AGE OR

L GO ER ER PO
EL
C AV AV
EX
LOW
BE
INTERPRETATION:
The above table and chart indicate that out of the 73 samples collected, 16% of the
respondents rate the price of the products as very high. 44% respondents rated them as high.
18respondents had rated them as can’t say. 16% respondents have rated as low price and only
6% respondents rated as very low price of the products in Khadi. Hence it can be inferred that
most of the consumers are respond that the price is high.

PRODUCT
Table No 4.1.4.
DURABILITY

EXCELLENT 15 19
GOOD 30 39
AVERAGE 14 18
BELOW AVERAGE 13 17
POOR 5 7
TOTAL 77 100
Chart No 4.1.4.
DURABILITY
39%
40%
35%
30%
25% 19% 18% 17%
20%
15% % OF RESPONDENTS
7%
10%
5%
0%
T GE GE
EN OOD A A OOR
L P
L G ER ER
XCE AV AV
E W
ELO
B
INTERPRETATION:
The above table and chart indicate that out of the 73 samples collected,59% are
satisfied with the durability of the khadi product. 18% respondents are neutral. Remaining are
dissatisfied with the product in khadi. From this it can be inferred that majority of the
respondents are satisfied with the durability of the product.

PRODUCT
Table No 4.1.5.
PRODUCT PERFORMANCE

EXCELLENT 11 14
GOOD 32 41
AVERAGE 12 16
BELOW AVERAGE 14 18
POOR 8 11
TOTAL 77 100
Chart No 4.1.5.
PRODUCT PERFORMANCE
41%
45%
40%
35%
30%
25% 18%
16%
11%
15%
10%
5%
0%
T GE GE
EN OD A A OR
L GO
ER ER PO
EL
C AV AV
EX W
ELO
B
INTERPRETATION:
satisfied with the product performance in khadi. 16% respondents are neutral.18% are
dissatisfied with the product performance Remaining are strongly dissatisfied with the product

PRODUCT
in khadi. Hence it can be inferred that majority of the respondents are rated the product
performance is good.
Table No 4.1.7.
PRODUCT ASSURANCE

EXCELLENT 6 8
GOOD 38 49
AVERAGE 12 16
BELOW AVERAGE 17 22
POOR 4 5
TOTAL 77 100
Chart No 4.1.7.
PRODUCT ASSURANCE
49%
50%
45%
40%
35%
30% 22%
25% 16%
20% % OF RESPONDENTS
15% 8%
10% 5%
5%
0%
T E E
EN OD AG AG OR
L GO R R PO
EL E E
C AV AV
EX W
ELO
B
INTERPRETATION:
satisfied with the product assurance in khadi. 15% respondents are neutral.22% are dissatisfied

PRODUCT
with the product assurance Remaining are strongly dissatisfied with the product in khadi. Hence
it can be inferred that the rating of the customers about the product assurance is good.
Table no.4.1.8
STITCHING QUALITY OF READYMADE PRODUCTS

EXCELLENT 12 15
GOOD 24 31
AVERAGE 22 29
BELOW AVERAGE 9 12
POOR 10 13
TOTAL 77 100
Chart No 4.1.8.
QUALITY OF READYMADE PRODUCTS

35% 31%
29%
30%
25%
% of respondents
20%
15%
12% 13%
15%
10%
5%
0%
INTERPRETATION

PRODUCT
The above table and chart indicate that out of the 73 samples collected,46 % are
satisfied with the stitching quality of the readymade products in khadi. 29% respondents are
neutral.25% are dissatisfied with the stitching quality of the readymade product in khadi. Hence
it can be inferred that most of the consumers are satisfied with the stitching quality of the
readymade products.
Table No 4.1.9.
COLOUR PERFECTION

EXCELLENT 9 12
GOOD 33 43
AVERAGE 10 13
BELOW AVERAGE 13 17
POOR 12 15
TOTAL 77 100
Chart No 4.1.9.
COLOUR PERFCTION
43%
45%
40%
35%
30%
% of respondents
25%
17%
20% 15%
12% 13%
15%
10%
5%
0%

PRODUCT
INTERPRETATION
The above table and chart indicate that out of the 73 samples collected,55 % rates as
satisfied with the colour perfection of the products in khadi. 13% respondents rates as
neutral.32% rates as dissatisfied with the colour perfection product in khadi. From this it can be
inferred that majority of the respondents are satisfied with the colour perfection of the product.
Table No 4.1.10.
RELIABILITY

VERY GOOD 50 65
GOOD 21 27
NO OPINION 1 1
SUFFICIENT 1 1
NOT SUFFICIENT 4 6
TOTAL 77 100
Chart No 4.1.10.
RELIABILITY
70% 65%
60%
50%
40% % of respondents
27%
30%
20%
10% 6%
1% 1%
0%
very good good no opinion sufficient not sufficient
INTERPRETATION

PRODUCT
The above table and chart indicate that out of the 73 samples collected, 65% rates
excellent with the reliability of the products in khadi.27% respondents rates good.7% rates low
with reliability of the product in khadi. Hence it can be referred that the reliability of the khadi
product is very good based on the customer’s opinion.

PRODUCT
Table No 4.1.11.
SEASONAL DISCOUNT

STRONGLY SATISFIED 40 52
SATISFIED 25 32
NEUTRAL 6 8
NOT SATISFIED 4 5
NOT AT ALL SATISFIED 2 3
TOTAL 77 100
Chart No 4.1.11.
SEASONAL DISCOUNT
60% 52%
50%
40% 32%
30%
% of respondents
20%
8%
5% 3%
10%
0%
d d l d d
fie fie t ra ei ie
tis t is n eu t isf t isf
sa sa iss
a a
y iss
n gl d
l y
d
o ng
str o
str
INTERPRETATION
From the above mentioned table and graph it s clear that the89% respondents stated
that khadi offers the customers the offers for products .On the other hand 7%of the customers
are neutral with the offers for the products. From this it can be inferred that majority of the
customers are satisfied with the offers for the products in khadi. Hence it can be inferred that
majority of the respondents are happy with the offers given by the khadi for their product.

PRODUCT
Table No 4.1.12.
AVAILABILITY OF TRENDY PRODUCTS

STRONGLY SATISFIED 10 13
SATISFIED 18 23
NEUTRAL 16 21
NOT SATISFIED 20 26
NOT AT ALL SATISFIED 13 17
TOTAL 77 100
Chart No 4.1.12.
AVAILABILITY OF TRENDY PRODUCTS

30% 26%
23%
25% 21%
17%
20%
13%
15%
10%
% OF RESPONDENTS
5%
0%
ED ED L ED ED
SFI SFI TRA FI SFI
D
TI TI U I
AT
I
SA SA NE SAT S
S S
GLY DI DI
N Y
RO N GL
T
S RO
ST
INTERPRETATION
From the above mentioned table and graph it s clear that the39% of respondents rates
satisfied with the availability of the trendy products .On the other hand 16% of the customers
rates neutral with the availability of the trendy products for the products.43% rates as
dissatisfied with the availability of the trendy products.Most of the respondents are dissatisfied
with availability of the trendy products.

PRODUCT
Table No 4.1.13.
VARIETY OF THE PRODUCT

EXCELLENT 9 12
GOOD 33 43
AVERAGE 8 10
BELOW AVERAGE 20 25
POOR 7 10
TOTAL 77 100
Chart No 4.1.13.
VARIETY OF THE PRODUCT

43%
45%
40%
35%
30% 25%
25%
% OF RESPONDENTS
20%
12%
15% 10% 10%
10%
5%
0%
INTERPRETATION
From the above mentioned table and graph it s clear that the 55% of respondents rates
satisfied with the availability of the variety of the product .On the other hand 35%of the
customers rates dissatisfied with the availability of the variety of products in khadi. Hence it can
be inferred that majority of the customers are satisfied with the availability of the variety of the
product.

PRODUCT

PRODUCT
4.2 TESTING OF HYPOTHESIS:
4.2.1 CHI-SQUARE TEST:
Chi-square test is one of the important tests developed to test hypothesis. It is a non
parametric test. This test is first used by Karl Pearson in the year 1900. We want to ascertain the
frequency of events falling in specified categories in a number of business problems. Chi-square
test is a test statistic which measures the discrepancy between observed or actual frequencies
and their corresponding expected frequencies is called the chi-square test (χ2). Here the test is
used to test whether there is any significant relationship between retailer satisfaction and
promotional activity provided by the company.
Null Hypothesis (Ho): The retailer’s satisfaction is independent of promotional

activity.
Alternative Hypothesis (H1): The retailer’s satisfaction is dependent of promotional

activity.
2 (O−E)2
χ =∑
E
Where,
O = Observed frequency,
E = Expected frequency,

PRODUCT
TABLE 4.2.a. OBSERVED FREQUENCY TABLE:
C QUALITY
CUS
TO
ME HIGH MODERATE LOW TOTAL
R
PRE
HIGH 36 7 0 43
FER
NCE
MODERATE 16 18 0 34
LOW 0 0 0 0
TOTAL 52 25 0 77
Expected frequency is calculated by using the formula;
Rawtotal ×Columntotal
Grandtotal

PRODUCT
TABLE 4.2.b EXPECTED FREQUENCY TABLE:
HIGH MODERATE LOW
HIGH 29.04 13.96 0
MODERATE 22.96 11.04 0
LOW 0 0 0
Since some of the cell frequencies are less than five, Yates correction needs to be
done. This correction is done to avoid incorrect inference from Chi-square hypothesis tests.
Here regrouping is done combining the frequencies of adjoining groups so that the new cell
frequencies become greater than five.
Formula for Yates’ correction,
2
[|O−E|−0.5]
χ 2 ( corrected ) =∑
E
In this case the 3*3 table is converted to 2*2
Table 4.2.c. OBSERVED FREQUENCY TABLE

PRODUCT
RESPONSE HIGH AVERAGE TOTAL
HIGH 36 7 43
AVERAGE 16 18 34
TOTAL 52 25 77
Table4.2.d. EXPECTED FREQUENCY TABLE
RESPONSE HIGH AVERAGE TOTAL
HIGH 29.04 13.96 43
AVERAGE 22.96 11.04 34
TOTAL 52 25 77
OBSERVED EXPECTED
FREQUENCY FREQUENCY (E)
(O) (O-E) │O-E│²- 0.5 [│O-E│- 0.5]2 [│O-E│-

PRODUCT
0.5]2/E
36 29.04 6.96 6.46 41.732 1.437
7 13.96 -6.96 6.46 41.732 2.989
16 22.96 -6.96 6.46 41.732 1.818
18 11.04 6.96 6.46 41.732 3.780
TABLE 4.2.e CHI-SQUARE TABLE 2
∑[(O-E) 2/ E] = 10.024
Calculated value of chi square is 10.024.
Degrees of freedom= (row-1)*(column-1)
= (3-1)*(3-1)
=2*2=4
Level of significance is 5%
The table value of chi square for 4 degrees of freedom at 5% level of significance is
9.488.

PRODUCT
INTERPRETATION
In order to test the dependence of two attributes, customer preference and quality of
the product, chi square test was conducted. The result of the chi square test is presented above.
It can be seen that the calculated value (10.024) is more than the table value (9.4888).Therefore
the null hypothesis is rejected and the alternative hypothesis is accepted. It can be inferred that
customer preference is dependent on the quality of the product.

PRODUCT
5.1 FINDINGS
 The store has been providing the best quality of products to its customers as
most of them are strongly agree with the product quality.
 Majority of customers find that the product efficiency is good at this shop.
 Most of the customers feel that the price of the product in this shop is high.
 Most of the respondents are satisfied with the availability of the product in the
shop.
 Majority of the customers strongly agree positively about the durability of the
product.
 Majority of the customers are satisfied with the product in the shop.
 Considerable amount of respondents feel that product assurance in this shop.
 Present building structure is to be modernized to meet needs of the Sangham.
 The Sangham faces high competition to both domestic and foreign products.
 There is no direct exporting of the Sangham.

PRODUCT
5.2SUGGESTIONS
 The store must use communication that support and boosts up its image
positioning.
 The shop must use a wide range of promotional tools generate more purchases.
They can introduce new image building advertisements, offers and coupons.
 Prices are major factor and must be decided in relation to the target market.
 Billing system should be made in computerized.
 Immediate delivery of goods to the customers.
 The shop must inform the customers about the arrival of new products.
 The firm should recruit more employees for more production and sale.

PRODUCT
5.3 CONCLUSION
Khadi Vasthralaya provides good quality product and services to the customers. This will
help in creating customer satisfaction. The shop also undertakes special packages and
promotional activities to increase the sale of the product. The main aim of the marketing is the
creation of goodwill, price discrimination, demand and profit through customer satisfaction.
Continuous up gradation of technology innovation and diversification is the main key to the
success of the shop.

PRODUCT
BIBLIOGRAPHY
 “Principles of Marketing”, Kotler Philip and Amstrong Gray,11 th Edition, Pearson

Prentice Hall, New Delhi, 2006
 “Research Methodology Methods and Techniques”, Kothari.C.R New Age
International Publishers.
 “Marketing Management”, Kotler and Keller, 12th edition
 “Consumer Behavior and Marketing Research”, Suja.R.Nair, Himalaya Publishing
House.
 “Marketing Management”, Biplab.S.Bose, Himalaya Publishing House.
WEBSITES
 http://www.google.com
 http://www.scribd.com
 http://www.wikipedia.com
 http://www.khadi.com

PRODUCT
QUESTIONNAIRE
Dear Sir,
I am the student of KMCT School of Business, Kallanthode, conducting a

survey on customer preference for Khadi Products with reference to Quality at
Cannanore Sarvodaya Sangh, Tellichery. I assure that information are given by you will
confidential.
Part-1
1. Name :
2. Gender : Male Female
3. Age Group : Below 20 20-35 35-45
45-55 55 and above
4. Income group : Below 15000 15000-25000 25000-35000
35000-45000 45000and above
Part-2
1. How would you rate the product quality?
Excellent Good Average
Below average Poor

PRODUCT
2. How would you rate the comfortability of the product?
Below average Poor
3. How would you rate the price of the product?
Very high High can’t say
Low Very low
4. How would you rate the product durability?
Below average Poor
5. How would you rate the product performance?
Below average Poor
6. What do you think about the products respect to the similar ones available
in the market?
Very good Good Sufficient
Not sufficient No opinion
7. How would you rate the product assurance?

PRODUCT
Below average Poor
8. How would you rate the stitching quality of the readymade products?
Below average Poor
9. How would you rate the colour perfection of the product?
Below average Poor
10. How would you rate the reliability of the product?
Below average Poor
11. How would you rate the seasonal discount for this product?
Strongly satisfied Satisfied Neutral
Not satisfied Not at all satisfied
12. How would you rate the availability of trendy products?
Strongly satisfied Satisfied Neutral
Not satisfied Not at all satisfied
13. How would you rate the wide range of choice of the product?
Very good Good Sufficient

PRODUCT
Not sufficient No opinion
14. How important are the following factors for purchasing a khadi product?
Factors Very Important No Less Very less

important influence important important
Availability
Comfortability
Price
Discounts
Traditional
Value
Look
Durability
15. Any suggestions you would like to give:
THANK YOU

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CUSTOMER PREFERENCE WITH REFERENCE TO THE QUALITY OF THE

1.1 GENERAL INTRODUCTION

KMCT School of Business 1

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1.2 SCOPE OF THE STUDY

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1.3 OBJECTIVES OF THE STUDY

 To determine the product attributes influencing purchase decision

 To determine the reasons for consuming various khadi products.

 To determine the most preferred product in CannanoreSarvodayaSangh.

KMCT School of Business 4

1.4 RESEARCH METHODOLOGY

It is a way to systematically solve the research problem. It may be understood as a

In this research study followed descriptive research. Descriptive research including

KMCT School of Business 5

To calculate the sample size using the formula.

KMCT School of Business 6

SOURCES OF DATA COLLECTION

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Hypothesis may be defined as a proposition or a set of some specified group of

I) Null Hypothesis (H0):

ii) Alternative Hypothesis (H1):

H0: Customer preference is independent to the quality of the product.

KMCT School of Business 8

H1: Customer preference is dependent to the quality of the product.

. Statistical Tools for Analysis

Percentage =No. of respondent x 100

Total no. of respondents

CHI SQUARE TEST

Where O = observed frequencies,

E = expected frequencies,

Degree of freedom (v) = n-k

n = number of frequency classes

k = number of independent constraints.

V= (r-1) (c-1)

STEPS INVOLVED IN APPLYING CHI-SQUQRE TEST

1. Calculate the expected frequencies

KMCT School of Business 10

2. Take the difference between observed and expected frequencies.

3. Obtain the square of the difference.

4. Divide (O- E) 2 with the expected frequency.

The important applications of chi-square test are given below.

 To test the variance of a normal population.

 To test the goodness of fit.

 To test the independence of attributes.

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1.5 LIMITATIONS OF THE STUDY

3. Collection of primary data is very expensive and time consuming.

4. The report is strictly based on the opinion of the respondents

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2.1 INDUSTRY PROFILE

Khadi is an Indian fabric. Khadi is also known by another name ‘Khaddar’. It is

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