Professional Documents
Culture Documents
Alice Project
Alice Project
Alice Project
CHAPTER-1
RESEARCH METHODOLOGY
RESEARCH DESIGN
Export of cashew is the profitable business. Now days it is growing rapidly. The
Government is giving more importance to this industry and in present condition
of the business it is getting more importance. So this project, “A BRIEF STUDY OF
MARKETING AND EXPORT OF CASHEWS WITH SPECIAL REFERENCE TO KALBAVI
CASHEW” is undertaken.
Primary data
The primary data was collected by visiting the unit and collecting the
various information about the firm through interaction with the managing
partner, supervisors, and manager of the firm as well as the staff members.
Secondary data
The secondary data was obtained through office records, books and
management books like marketing, sales, and export and through Web sites and
Google search etc.
1. The main limitation of this study was time limit. We had to do this project
work in between the college hours. Because of immense work schedule
factory’s officials could not interact with us properly.
2. The firm was not prepared to disclose their trade secrets.
3. Difficulty was also faced in collecting the detailed information from the staff
due to their busy schedule.
4. Authorities have no time to provide and give adequate and accurate data
information.
5. The firm is situated in Baikampaddy, so traveling was bit inconvenient, as
the distance is 20kms from Mangalore.
6. Since the methodology of study or collecting information was primarily
direct personal interview, there may be chances that certain information
may not be provided which they consider as their business secrets.
7. The coverage in this report is restricted to the curricular prescribed for VI
semester BBM of Mangalore University.
8. The study included on the information provided by the management.
CHAPTER-2
INTRODUCTION TO CASHEW
“CASHEW IS A POOR MAN’S CROP AND A RICH MAN’S FOOD”.
Cashew is one of the leading tropical tree crops in the world, which has
originated from Brazil, where it flourished as a wild growth in the jungles. Cashew
as bought to East Africa & India just as other commercial crops like rubber, coffee,
tea etc. by the Portuguese nearly five centuries ago. The first introduction of
cashew in India was made in Goa from where it spread to other parts of the
country. In the beginning it was mainly considered as a crop for afforestation and
soil binding to check erosions.
The nuts, apple and other by products of this crop are of commercial
importance. For several centuries cashew was merely regarded as a sturdy
perennial tree, yielding good soft wood and producing a rather delicious juicy
apple fruit. The cashew apple juice was astringent through sweet and delicious.
Unlike other fruits, the cashew apple has its nuts outside. After the apple was
eaten the nut was invariably thrown away. This was because nut has a hard shell
in the form of a honey cants structure, which contains a corrosive liquid known as
Cashew Nut Shell Liquid.
As years rolled by, interest in the nut slowly developed and man’s curiosity
resulted in the extraction of the kernel from the nuts, after burning off the liquid.
The delicious taste of the kernel was discovered and tree crops of India were soon
established itself all along the West Coast and later in East Coast as well. It has a
tremendous industrial and commercial value. Though the commercial importance
of cashew’s exploitation began from the early 60’s, marginal lands and denuded
forests were the areas set apart for the plantation development. Due to the
absence of high yielding variety and multiplication techniques, indiscreet seeds
and seedlings were used for planting purposes. Because of its adaptive ability in
wide range of agro climatic conditions it has become a crop of high economy and
attained the status of an export oriented commodity bringing considerable
foreign exchange to the country.
India is the largest area holder of their crop. Cultivation of cashew in India
confines mainly to the peninsular areas. It is grown in India in an area of 7.7lakh
hectares with a productivity of 835kg per hectare. Of these, 2.00lakh hectares of
the plantation developed from the beginning of 8th plan alone have been with
superior clones of high yielding varieties.
The intensive research efforts made in the past few decades resulted in the
development of about 36 high yielding technologies capable of increasing the
current level of productivity by 2 to 3 fold. Cashew industry generates
employment in the processing and agrarian sector employing over 3lakh persons
with 95% of them being women. Till 1994, India had total monopoly in cashew
production that accumulated for 95% of the worlds export for kernels. But the
India’s market share has come down to 45% in the recent years. However, the
total export value has gone up due to the higher prices. Indian cashew kernels are
very tasty. They are exported to many foreign countries. The cashew helps to
maximize the national income and foreign exchange in a small but valuable way.
NATURE OF INDUSTRY
CALENDAR OF OPERATIONS
Following Calendar of operations has been very common in all the year.
December - January
The flowering of Cashew starts during this period. In the East Coast it starts
lately. In January spray is essential to fight against the bees and other insects to
protect the flower.
February – April
April - May
Most of the growers complete half the fertilizing process before the one set of
monsoon. That is by the end of May.
June – July
Sowing of seeds and planting of seeds are done during June – July.
August - September
The second half of crop fertilizers are applied after the monsoon rain manure
or green manure will be applied.
October - November
Since the early flowering trees start flowering in this season, there will be
possibility that mosquito may affect flowers and hence it may be necessary to
spray the pesticides.
Cashew is the tree of the tropics. It can be grown in almost all types of soils
from the sandy seacoast to laterite hill slope elevation of 100 meters above the
sea level. It requires a minimum of 50cm rainfall per annum, but can withstand
extreme rainfall of 300 to 400cm. The major factor limiting the distribution of
cashew is its inability to tolerate pest and extreme cold for a very long time. The
best soil for cashew is the drop well drained variety with PH value ranging value
ranging Between 6.3 to 7.31. Red sandy loamy and light coastal sands are also
well suited for cashew tree.
FLOWERING
The cashew tree normally starts flowering in 3 to 5 years. General period of
flowering is from the end of November and extends up to end of January,
depending on the climate condition of different tracks. Flowering covers two or
three distinct phases. The first is predominantly a male phase. The second is the
mixed phase when male and hermaphrodite flowers occur and the third is the
second male phase with male flowers. In India, the flowers open between 9am to
2 pm Flowers are either bisexual or male and both occur intermixed in the same
inflorescence. The cashew tree produces innumerable flowers of which only less
than 10% are perfect and 4% to 6% reach maturity, the remaining being shed at
various stages of development. Pollination is reported to be carried out by flies,
bees, and ants as well as by wind. After fertilization, the ovary grows faster and
the nut reaches its maximum size in 30 days. From the 5 th week on wards when
the growth of the nuts ceases completely, the peduncle starts growing rapidly
forming the fruit called ‘Apple’. The fruit ripens fully after 60 days. What
distinguishes the cashew from all other fruits is the formation of the nut, which
grows as an appendage at the bottom of the apple. The unusual location of the
nut gives the fruit an interesting and unique appearance.
CASHEW APPLE
The fleshy peduncle of the cashew apple is juicy and sweet when ripe. Wide
variations can be notice din color, shape, juice content and taste. Two main
groups among cashew apples are red and yellow. Usually the apple is 8 to 10
times heavier than the nut. The apple is a rich source of vitamin ‘C’ and sugar.
RAW CASHEWNUT
Cashew nut varies vary in size, shape and shelling percentage. A single nut is
3 to 5cm in length and 2 to 3.5cm in width. The weight of the nut usually varies
from 5 to 10gm. The crop is gathering from the ground and is sun-dried for 2 to 3
days before storing.
The cashew nut shell has a heavy shell. The heavy concealed structure and
its cells contain a natural phenolic compound known as Cashew nut shell liquid.
The liquid is a valuable raw material for a number of polymer-based industries like
paints, varnishes, and resins, industrial and decorative laminated broke linings
and rubber compounding resins etc.
CLIMATE
The optimum condition or its vegetative growth is found in a tropical
climate with annual rainfall and a pronounced dry season. Cashew is a tropical
plant and thrives at high temperature. It is sensitive to the cold and hence too
high altitude, since this involves a drop in temperature. Consequently it finds it
normal habituate in the coastal belt of tropical regions.
SOILS
Cashew is grown on a wide variety of soils. Cashew requires a well-drained
soil. The best for cashew are deep friable, well-drained, sandy loam soil with out a
hard plan with phreatic water level at a depth of 5 to 10 meters. Cashew also
thrives on poor sandy soils. Cashew can’t withstand bad drainage stagnating
water and flooding.
In India cashew is grown mainly on laterite, red and coastal sands in states
of Kerala, Karnataka, Goa, Maharashtra, Tamilnadu, A.P, Orissa and W.Bengal. To
a limited extant it is also grown in black soil in Tamilnadu and A.P. the fertile
among cashew soils in the forest soils on the western slopes of the western
Ghates in Kerala. They are often virgin soil, rich in organic matter which cashew
was planted with minimum tillage and little land clearing. The coastal sands on
which cashew is often grown is very poor in fertility and yields are low unless
fertility are used again. However, it comes up even on waste lands of low fertility.
Cashew is often considered a crop up even on waste lands of low fertility. Cashew
is often considered a crop of the marginal lands and it very modest on its soil
requirements and can adopt itself to varying soil conditions without productivity.
As a result the worst soils have always been selected for cashew cultivation. In
fact cashew performs much better on good soil than on poor soil. Cashew is
suitable for fairy steep with shallow top soils because it large canopy and surface
root system protect the soil very well from run off and erosion during the heavy
monsoon rains.
RAINFALL
It is stated that cashew can be grown under conditions of very low rainfall
ranging from 300mm to higher rainfall of over 400mm. cashew is a very resistant
to drought but only under conditions where its roots can penetrate deeply in to
the soil and draw from water reserves that are not available to other crops. In
brief, it can be assumed that a climate with about to 6 dry months and a rainfall
ranging from 1000 to 2000mm will be suitable for commercial cultivation.
ALTITUDES
The maximum altitudes at which Cashew can be grown vary from sea level
to 170 meters above sea level.
Important among them are tea mosquito, tea stem and root borers, the
leaf minor and the leaf and blossom Weber. Tea mosquito accounts for more than
30% of the crop loss. Control measures against these serious pests and other
major parts of cashew have been evolved. Filed control trials reveal that
Endosulfan 0.05% applied as high volume spray of 0.1% as low volume spray at
the time of emergence of new fleshes, inflorescence and fruit set are quite
effective in controlling ten mosquito populations.
Cashew nuts are one of the most nutritious of foods. They are seeds from
which trees will grow if they remain in the ground, until they generate. They are
therefore high in all useful elements that are essential for germinating and
growing process. Nuts in general are high protein, fat and carbohydrates foods.
They are also rich in many minerals and vitamins essential for the well being of
human body.
Proteins
Particulars requirements
for daily diet of a normal Contribution by 100 gm
adult kernels
Arginine 10.3
Histidine 1.8
Lysine 3.3
Tyrosine 3.2
Phenylalanine 4.4
Cystine 1.0
Methiononine 1.3
Treonine 2.8
Valine 4.5
Proteins 20.8
Fat 46.8
Moisture 5.7
Carbohydrates 21.8
Phosphorus 0.35
Calcium 0.05
Iron 4.5
Proteins
Fat
Moisture
Carbohydrates
Phosphorus
Calcium
Iron
Particulars Percentage
Aleic acid 59.6
Saturated acid 18
Unsaturated acid 83
Linololic acid 19.62
MINERALS
Cashew kernels are a rich source for minerals like calcium, calcium,
phosphorous, and iron. Shore minerals in their organically form protect our
physical health and nervous system.
CARBOHYDRATES
Cashew kernels have a very low content of Carbohydrates, as little as 1% of
soluble sugar. Such a quantity is sufficient to give a pleasant taste without
creating excess energy. Cashew is therefore non flattering and can be safely
consumed by those suffering from obesity and diabetes.
The cashew industry has grown in number in recent years, due to following
reasons.
In India most of the factories are situated in Kerala and Tamilnadu and
accounts for 90% of the total export from India. Other than Kerala and
Tamilnadu, cashew-processing units are situated in Goa, Karnataka and
Andrapradesh. In India there are about 450 big units which process more than
250 bags per day.
In recent years, a lot of people who are involved in other industries try their
entrepreneurial skills in the cashew industry. Cashew nuts industry needs a
strict supervision and constant vigilance.
The people, especially the whether in the district and the neighboring
places, and they have to forecast the production of raw nuts and approximate
raw nut prices.
COMPANY PROFILE
HISTORY OF FIRM
Kalbavi Cashew is a leading manufacturing and exporter of cashew kernels
in South India. It was established on 1 st May 1987. They are registered partnership
concern with the experience of over 5 decades in commodities like cardamom,
pepper, areca nuts, copra, food grains, pulses and other forest products.
If they had to establish a similar firm now, they had to invest Rs.1.25crore
for plant and machinery and building and same amount had to be kept as working
capital requirement.
Kalbavi cashew industry is mainly a partnership concern. Mr. Ramachandra
rao, Mr. K. Prakash rao and Mrs. Gowri.p.rao own it. They are sharing their profit
in the ratio of 4:4:2, i.e.
20%
40%
They have about 225 employees of whom 90% are dedicated women. Who
are highly skilled for this work, the unit has managed to get an annual overall
growth of over 15% during last 5years and unit has to also strive to meet all the
regulatory requirements of state Government and has also contributed to the
economy by generating employment opportunities.
They manufacture premium quality from very selective raw nuts in a very
hygienic environment. The employee efficiency is one of the best in the industry
as they are well trained and motivated to meet the stringent standard set by
them.
PLANT
The plant is established in the industrial area, Baikampady, New Mangalore
on a sprawling one-acre land has a processing facility of over 10,000 square feet
and 5,000 square feet of warehouse. It is ideally located at just 3km from the New
Mangalore Port and 15km from the Mangalore airport. It is well connected to the
National highway No17 is just 15mins by road from the city.
The plant is established on 1acre land, 9000 square feet of processing
facility and 4000 square feet warehousing. The land was allotted for purpose of
Industrial Development by KIADB (Karnataka Industrial Area Development Board).
They have their registered office at the heart of the trading center-Bunder, which
infact is on the banks of the old seaport.
Systematic plant layout adopted by the Kalbavi Cashew gives them certain
advantages like
Economies in handlings.
Effective use of available area.
Minimization of production delays.
Improved quality control.
Avoidance of bottlenecks.
Better supervision.
Improved utilization of labour.
Improved employee morale.
Policy, as per this policy, the unit is allowed to declare the stock of raw materials
and finished goods every month and the insurance company only on the amount
so declared by unit will charge the premium.
ORGANIZATION STRUCTURE
Organization requires the creation of structure relationship among different
departments and the individuals working there for the accomplishments of
desired goals. The establishments of formal relationship among the individuals
working in the organization is very important to make clear the lines of authority
in the organization and to co-ordinate the efforts of different individual in an
efficient manner.
ORGANIZATION CHART
An organization chart is a diagrammatized form that shows important
aspects of an organization including the major functions and their respective
relationship. In other words, it is a graphical portrayal of positions in the
enterprises and of the formal lines of communication among them.
Managing Partner
WEIGHING SCALE: -
MACHINERY: -
Less: - Subsidy record 143674 15310 15310
MOTOR CAR: -
MOTOR CYCLE: -
CYCLE: -
COMPUTERS: -
BUILDING: -
BOREWELL: -
LAND: -
INVENTORY MANAGEMENT
Good inventory management is important for successful operation of most of
the organizations. Unfortunately, the top management does not always
appreciate its importance. This may be due to a failure to recognize the link
between inventories and achievement of organizational goals or due to ignorance
of the impact that inventories can have on cost and profits.
An inventory is a stock of goods that is held for future use. Then, naturally,
many of the items a firm carries in inventory relate to the items a firm carries in
inventory relate to the kind of business it engages in. thus, manufacturing firms
carry supplies of raw materials, purchased parts, partially completed items and
finished goods as well as spare parts tools and other supplies.
Thus, Kalbavi cashews also maintain inventory for storing Raw Cashews for
future production. It has an area of 10,000sq.ft each. There are 10,000 bags of
75kgs of raw cashews, which are imported from different places and are stored in
these 2 godowns.
HUMAN RESOUCE
The laborer’s stand as the backbone of any industry. When it comes to
cashew industry while it cannot be undertaken without labourers taking part
activity.
The industry has good service conditions, the company could gain a better
employee and employer relationship if concern is providing better relationship if
concern is providing better conditions of service and has undertaken many
welfare measure which is rarely found in other cashew industries. Here things are
motivating the employees.
1- Staff 5
2- Helper 7
3- Female employees 224.
Most of the employees have good experience for more than 5years. The
employees are satisfied with their job, welfare schemes, safety and working
condition or environment. Good recognition is given to motivate them.
Employees are well committed to their work by co-operation each other.
There exists good relationship and co-ordination among management and
workers. In case of grievances, employees directly contact the management
and there will be good response from management.
SOURCES OF LABOUR
WORKING CONDITION
And accordingly the workers have to work for 8 hours a day, i.e. from
8:30a.m to 12:30p.m and again 1:00p.m to 5:30p.m. Sundays are holidays. Apart
from this they have festival holidays with wages and also one day leave for every
20 days of work. These can be accumulated and encashed at the end of the year.
WAGE STRUCTURE
Here, wages are paid on piece rate system and thus it motivates
employees. P.F contribution is at 12% by both employees and employer. For ESI
employer contributes 4.75% where employee contributes 1.75% wages paid as on
[5-1-2009 to 11-1-2009]. Bonus given to employees will be fluctuating and last
year it was 13% of basic and D.A. the workers are paid weekly.
Basic 35,853.60
D.A 7,275.60
43,129.20
(-) P.F 5,172
(-) E.S.I 756.65
(-) Others 869.00
Net Wage 36,331.55
Basic 39265.2
D.A 10955.7
Over time 1803
52023
Basic 11992.2
D.A 3341.85
15334.1
Basic 53042
Technical process
The nuts are fed to the cashew cooker and cooked by steam generated in
the boiler for around 45 min. these nuts are cut into 2 halves with the help of
cutting machine. The sheller then shells the cashew kernels. The kernels are kept
in the tray in the drying chamber called Borma. They are then pooled, graded and
filled in the tin containers, each weighing 11.34kgs. The carbon di oxide gas is
pumped in the container to flush out the air. The total working process takes
8days.
The existing borma to dry the kernels was old, conventional resulting in higher
heating time uneven heating, large percentage of heating kernels and high fuel
cost. The new machine is a modern hot air blowing type. Heat exchanger at a cost
of Rs.440lakhs. The hot air will be directly blown over the kernels ensuring faster
and uniform heating resulting in a lower percentage of rejected (scorched)
kernels. The capacity of the machine is to dry 1000kgs of kernels in 18hrs. (60bags
x 1day RCN capacity)
Which is modern packing machine and it is used for removing the dust from the
cashew nut packet. Modern packing machine is called Vital packing machine.
The process of production starts with drying the cooked raw cashew nuts in
sunlight for 2days. Then the dried cashews are transferred to the steam roaster
where the roasting of cashews will take place. The steam roaster consists of big
drum with many cross section pies. The steam passes through all these pipes,
making the nuts half roasted. This process takes about 30-35 min at a 5kg
pressure or 100c to 110c. /after the raw nuts are roasted, they are removed from
boiler and allowed to cool for 24hrs.
When the nuts are roasted, the kernel that is closely held by shell gets
loosened. As the result the kernels can be extracted as wholes from the shells.
Since the oil remains in the shell, the workers are assured of safety to some
extent.
In Kalbavi cashews, there are 3 boilers for roasting. Capacity of each boiler is
300kgs i.e. 4 bags of 75kgs. So, the capacity of 3 boilers together is 75kgs x 4bags
x 3boilers. Male employees carry on this process, as it requires lots of energy.
2. SHELLING
Shelling is a process where Cashew kernels are separated from its shell,
cutting machines is used for this purpose.
The cutting machine consists of 2 blades which, when brought close with
the help of pedal, comes to the depth of the shell and the hand lever is pressed to
open the shell into 2 halves.
The pressure exerted by both the foot and the hand should be regulated so as to
cut only the shell but not the Kernels.
The supervisors look after the workers so to see that most of the kernels
are shelled as wholes and that no kernel is thrown off with the shells. The main
defects of cutting machines are
A. The oil coming out will react on hand in spite of using castor oil.
B. This requires skilled workers; there are chances of the worker getting injured
because of uneven size of nuts.
3. DRYING
The Kernels after they are removed from the shells, has to be dried in order
to loosen for peeling the red skin adhering to the kernels. A tray drier called “
BORMA” is used for this purpose. There are chambers indirectly heated on three
sides by means of fuel. Each tray can hold 35kgs of nuts. A temperature of 75c-
80c is maintained in the chamber.
The kernels are kept in for 8hrs. After the kernels are heated they are
removed and kept for cooling for 24hrs, then they are sent for peeling.
4. PEELING
Peeling is the process of removing the skin from the kernel. The skins so
removed are known as the husk. This work is usually done with the help of female
workers. These workers are provided with small knife and some vessels to put the
wholes, bits and butts separately.
In Kalbavi cashews there are about 105 peelers, each worker peels about
10-12kgs of kernels a day. The husk obtained is used for the manufacture of
soaps.
5. GRADES
After peeling the kernels, they are sorted out into wholes, splits, and butts
pieces etc. depending on the size of the kernels according to the specifications.
Grades are based on the shape, size and color of the kernel, they are graded
into white or scotched wholes, pieces, splits, butts etc. the government of India
act prescribes 33 different grades of cashew kernels of which only 26 grades are
commercially available and exported.
Grade Trade Color/Characteristic Count/454grams, size,
Designation name s description
Desert
DS splits Kernels split naturally lengthwise -
6. CONDITIONING
During the summer months, the kernels become very dry during processing.
If such kernels are packed, they may break during transit. To avoid this, it is
necessary to recondition the nuts to uniform optimum moisture before they are
packed.
7. PACKING
After the necessary moisture is given to the kernels, they are packed in
tins. As soon as the order comes, they pack cashew in necessary flexi pouch of
11.34kgs or consumer pouch of 100gm, 250gm, 500gm & 1kg.
BY PRODUCT
The outer shell that is separated from the kernel in shelling process is a by-
product. This shell is used to manufacturing Cashew Nut Shell Liquid (CNSL). CNSL
is a versatile industry raw material, which has application in polymer based
industrial goods such as friction linings, paints and varnishes, laminating resins,
cashew cements, polyurethane based polymers, surfactants, epoxy resins,
foundry chemicals and intermediates for chemical in India and abroad.
The cashew shell price is highly fluctuating. The market fixes the price. The
current price of these shells on an average is Rs.5.50per kg.
The outer shell after removed of kernel and extraction of CNSL can be used
as fuel. The cashew industry buys these shell cakes and uses it for the heating of
borma by burning them.
This shell can be used for the manufacture of particleboards for the
packaging. Presence of residual CNSL in the shells makes this board’s moth and
heat resistant.
From the brown skin (testa of the kernel) Tannin can also be extracted. It
can be used in leather industry.
The price of husk is also fixed by market; the current price is Rs.6.50 per kg.
Thus, there is nothing called as waste in a cashew industry. The shell can be
sold for extraction of CNSL and after the extraction; they can be used as fuel for
heating the Borma. The husk can be used for manufacturing of soaps and poultry
feed.
PROCESS FLOW OF MANUFACTURING OF CASHEW KERNELS
DRYING YARD GODOWN ROASTING
COOLING
SHELLS CUTTING
HOT CHAMBER
(Borma)
HUSK REJECTS
PEELING
REJECTS GRADING
MOISTURING
PACKING
POUCH PACKING
TIN PACKING
MARKETING MANAGEMENT
MARKETING
Marketing is as old as human civilization. History of mankind is full of
developments resulting from a gradual process of evolution and modern
marketing is no exception to this rule. Now marketing has developed into a full-
fledged discipline. Many managers consider marketing as the most important of
all management functions in business, industry or service undertakings. Managers
have now realized that the success of any enterprise depends on how efficiency
they handle marketing.
CONCEPTS OF MARKETING
The meaning of the term “Marketing” can be studied under two heads.
At the very outset, it must be understood that even according to the old or
traditional marketing concept, the term “Marketing” does not refer to mere
selling (exchange of goods for money between the seller and the buyer) or mere
distribution of goods. The term includes not only the process of distribution, but
also the process before distribution, but also the process before distribution. In
other words, it consists of all those activities or operations, which help the flow of
goods from the producers or manufacturers to the ultimate consumers or users.
In short, it is the sum total of all those activities which are related to the flow of
goods from the point of consumption or use.
In the words of Tousley, Clark and Clark, “Marketing consists of those efforts
transfer in ownership of goods and care for their physical distribution. “According
to Ralph S. Alexander and others, “Marketing is the performance of business
activities that direct the flow of goods and services from producer to consumer or
user”.
(b) Secondly, there has been a change in the objective or purpose of business in
recent years. The changes in the purpose of business have contributed to the
change in the purpose or objective of marketing.
(c) Thirdly, there has been a change in the attitude of consumers in recent years.
Today consumers are not prepared to buy any thing and every thing that is thrust
on them by the sellers. They are willing to buy only those things, which satisfy
their wants.
For successful marketing, first the needs of the ultimate consumer have to
be ascertained and then, steps must be taken to secure the distribution of only
those goods which the consumers want, in the quantities they want, at the time
they want through the channel that is convenient to them and at the price they
are willing to pay. So, modern marketing refers to all those activities involved in
identifying the present and potential requirements of the distribution of those
goods and services and in securing the distribution of those goods and services
from the centres of production to places where they are wanted, and in effecting
the transfer of ownership and delivery to those who want them.
The meaning of modern marketing concept has been clearly brought out by
the following definitions. In the words of C.C Knight, “Marketing embraces all
efforts made in the discovery of consumers’ actual and potential requirement for
commodities and services and the steps taken for securing their actual
distribution,”
OBJECTIVES OF MARKETING
1. The most important objective of modern marketing is the satisfaction of
customers want and needs.
1. Marketing makes goods and services more useful to the society by creating
place, time and possession utilities, i.e., by moving them to places where they are
wanted, when they are wanted and by transferring them to those who want
them.
3. Efficient marketing reduces the cost of distribution. The reduction in the cost of
distribution results in lower prices for the consumers.
4. Efficient marketing ensures full and complete flow of goods and services
continuously from the centres of production to the centres of consumption. It
contributes to the maintenance of high level of economic activity.
BENEFITS OF MARKETING
1. Marketing helps the business firms to earn more profit. It provides many
opportunities to the business firms to earn profit in the process of buying and
selling of goods by creating place, time, and possession utilities.
2. Marketing is the ‘Eye and Ears of a business’. That is, it gives to the firm
continuous market information. i.e. Information about the changes in the
fashions, styles, habits, likes, dislikes, preferences, etc, of the consumers, and
thereby, helps the firm to adjust its production according to the changing
conditions in the market.
6. The process and the volume of production depend upon the successful
performance of the marketing operations.
8. Marketing provides the working capital required by a firm, in the sense that it is
the sale proceeds of goods that serve as the working capital of a concern.
MARKETING FUNCTIONS
Meaning of marketing functions
Marketing involves a number of major specialized functions.
Selling is the sum total of all those marketing activities that help in the
disposing or transferring of goods by sale from the seller to the buyer at a
profitable price. It is concerned with the creation, maintenance or expansion of
market for a product.
3. TRANSPORTATION
Grading is the process of sorting out or classifying the goods into different
grades or class on the basis of the established standards.
6. FINANCING
7. RISK-BEARING
Marketing involves a number of risks owing to unforeseen contingencies or
happenings. There may be decay or deterioration of goods in warehousing; there
may be loss of goods due to fire, flood, cyclone, earthquake, etc. Goods may be
lost due to pilferage or theft goods may become unsaleable due to change of
fashion and competition. There may be losses due to fluctuations in prices. Debts
may become irrecoverable. There may be loss of potential profits.
8. MARKETING INFORMATION
The political and legal environment of foreign markets is different from that
of the domestic. The complexity generally increases. However, attempts are being
made to bring about uniformity in international trade laws.
3. Trade restrictions
Tariffs, quotas and exchange controls are important problems, which an
international market faces.
Each country has its own procedure and documentary requirements and
traders have to comply with these regulations if they want to export or import
goods from foreign countries.
Each country has its own monetary system and the exchange value of each
country’s currency is different from that of the other. For some time, the
exchange rates were more or less fixed. Since 1973, the exchange rates are
fluctuating and are being determined by forces of supply and demand. Some
countries also operate what are known as multiple exchange rates, each exchange
rate applying to certain set of transactions.
DIRECT EXPORTING
In direct exporting, the exports are undertaken directly by the
manufacturing firm. The manufacturing firms make its own arrangements to
export its products either within the existing sales network or by creating a
separate export department or division. These types of exporters are known as
Manufacturer Exporters.
INDIRECT EXPORTING
In this case, the manufacturers do not directly export to foreign buyers. The
manufacturer exports through intermediaries such as;
Merchant exporters
Export houses
Trading houses
Star trading houses
Super star trading houses
Export Consortia or Cooperative group
Government Agencies such as STC, MMTC, and so on,
These intermediaries are known as indirect exporters.
TYPES OF PRICING
1. LOCO price
3. At station Price
9. Ex-ship price
2. Perhaps the biggest gain to Kalbavi cashews by marketing is that, it enables the
firm to hold itself prosperously in that and enables the firm to hold it
prosperously in today’s competitive situation.
3. Marketing has indeed been helpful to Kalbavi cashew to adjust their production
pattern to suit the current demand.
Thus planning place a vital role in Kalbavi cashews by chalking out the
chosen best way in which objectives can be achieved in the best possible manner.
Even in the face of anticipated competitions or against infavourable environment.
2. IMPLEMENTATION OF MARKETING PROGRAMME
After planning the next step involved in the marketing operation of Kalbavi
cashews has to implement the pre planned programmes and campaigns.
The stage involves, putting into practice what was till now on paper, in the
form of a plan. Here necessary steps are taken to implement the programme
effectively and as are pre planned. This function covers every aspect of the
product right from its inspection, design, pricing, distribution, selling and
promotion until it finally reaches the consumers.
PRODUCT DISTRIBUTION
Package Storage
CUSTOMER
Discount Advertising
Credit Publicity
PRICE PROMOTION
Marketing mix represents blending decisions in 4 areas. Product, Pricing,
Promotion and Physical distribution. These elements are interrelated because
decisions in one area, usually affect actions in the others.
1. PRODUCT
Kalbavi cashews has adopted has adopted the physical the physical
distribution policy, which means the delivery of the cashew nut products at the
right time and at the right place. The distribution mix is the combination of
decision relating to marketing channels, storage facilities, inventory control,
location, transportation, warehousing etc regarding cashew nut products of
Kalbavi cashew.
4. PROMOTION
The partner, Mr.Prakash Rao, sets the marketing strategy in Kalbavi cashew.
The managing partner itself does the buying and selling in both domestic and
international markets. The domestic sales are done by the managing partners
itself.
The domestic sales are done through super market claim stores like Aditya
Birla retail chain, food bazaar retail chain, Reliance retail chain etc.
The products are produced in their brand name and it will be acting as the
identification for consumers.
As enough demand for products is already created, they don’t need to give
advertisement for their products through any media. But in rare cases they may
go for advertising.
The cashew nut is sold in domestic market in consumer packs of 100gms,
250gms, and 500gms. For local and domestic markets, they mostly go on for
consumer packs. For bulk orders, flexi pouch are used, so usually in domestic
markets, tin package is not required.
The main and only raw material for all the cashew industry would be raw
cashew nuts. Without the raw cashew nuts, the production process can never
cashew nuts, the production process can never start in any cashew industry. The
firms can get the raw materials from 2 markets. i.e. local and international
market. Due to the seasonal production, there will be fluctuation in supply of raw
cashew nuts in local markets. Hence, the firms will have to go for international
markets when there is no sufficient supply in local markets.
LOCAL MARKET:
The local nuts start arriving in the month of journey or early febraury. The
local people bring the cashews directly to the factory or indirectly i.e. through the
purchase counters.
The local people collect the fallen nut from their tree and store it to get a
sufficient amount for selling. The nuts can be saved up to 2yrs or else they may
pool all their raw cashew nut and sell it. This will be a good source of raw
materials for cashew industry. But it is not always reliable.
The major sources of raw cashew nuts are situated in Dakshina Kannada
district and Coorg district and outside Karnataka like Goa, Ratnagiri district of
Maharashtra are famous for raw cashew nuts.
The cashew processors or cashew manufacturers choose the right place for
purchase based on their processing capacity, selling capacity, quality of the
product desired and prices of raw cashew nuts. The price of raw cashew nuts is
highly fluctuating. The price of raw cashew nuts will be decided in the market
based on demand and supply.
The local purchases are done through purchase bills and cash memos and
both seller and buyer contact each other and determine the price orally. There
won’t be any sort of formal transaction taking place between the sort of formal
transaction taking place between the buyer and seller. The transportation cost
may be borne by either seller or buyer; depending on their communication. But
usually, buyers will have to incur the transportation cost.
India is a major producer of raw cashew nuts. But in India, the cashew
industry has grown to such a heights that, to cater the installed capacity, the raw
cashew nut has to be imported from other countries.
The major cashew growing countries are situated in South Africa. While
importing the raw cashew nuts, they buy in bulk quantities and import in Kalbavi
cashews are done through reliable international brokers in India and outside
India.
The price may be Cost Insurance Freight [CIF], Cost and Freight [C&F], or Free
On Board [FOB], but in most of the cases, it will be Cost and Freight or Cost
Insurance Freight [CIF]. Ocean insurance is charged per cubic meter (volume
basis). Freight for full container load (FCL) is fixed. It is more economical than part
container load.
For buyers who prefer safety and low risk there is cash on delivery (COD)
type or high sea sales. In cash on delivery sales, the contract is done first and
buyer is entitled to sales only after checking the quantity of nuts. In high sea sales,
the raw nuts are sailed first and the goods are sold in the dock itself. In both the
above types the goods are sold in dock itself and for the safety of seller, there is
100% advance. Here, the buyer has to make 100% advance payment before the
receipt of goods. Payments are made by Demand Draft (DD) of the bank. These 3
kinds of sales not only keep the buyer and seller at the safer side but also prevent
the outflow of previous foreign exchange. The mode of buying at Kalbavi cashews
will mostly be 100% advance payment.
Kalbavi cashews give importance to domestic market itself. But, as there
won’t be sufficient supply, they import raw cashew nuts from various countries
like east Africa, Indonesia, Brazil and Tanjenia.
This year Kalbavi cashew has imported 2000mt of raw cashew nuts of which
a part is used for processing and a part of it is used for reselling it to others.
Each tin is tested for any leak and then weighted prior filing to ascertain the
actual weight.
VITA PACKING
Considering the permissibility of product the vita pack method is adopted. Under
this method, after filling and weighing the tins are vaccuumised and filled with
carbon dioxide Gas. The lid is then soldered, this method prevents infections of
the Kernels, thus increase the shelf life of the kernels.
LABELLING
To indicate the grade and brand name stencils and stickers are used. The label on
the ½ kg packs also indicates the nutritive value of the kernels, net
Weight, Batch Number, Date of Package, grade, Expiry date and Maximum Retail
Price (MRP).
Packing and standard weight cashew kernels for export are packed in four
gallon prime tins with a net weight of 11.34kg (or 25lbs) in each tin is then cleared
of air and filled with carbon dioxide gas and sealed. Two such tins of the same
grade are packed in a carton for export. The net weight of each carbon will thus
be 22.68kg (50lbs). As an exception, some manufacturers also pack in tins of
10kgs net, to cater to the requirements of buyers in certain markets. Some
exporters have started using flexible packs also, instead of tins as many buyers
are opting for new generation flexible packs.
Hence, the packing for export is made as per the requirements of the
importers. So, when they get the order only they need to get a clear detail of the
packing required.
A Kalbavi cashew, which is a brand for quality goods, always gives importance
to quality control, that’s why they attend a large market share in the recent years.
LOCAL SALES
The local sales are done directly. But, if the local quantity is more, they opt
for brokers. The local sales are generally done through sales bill or VAT invoice.
For sales outside Karnataka, sales are made through sales bill against C form
with 2% of VAT. But if sales are in Karnataka, sales are made through VAT invoice,
which has 4% of VAT.
There may be 2 types of sales which are general sales and consignment
sales.
Consignment sales means the manufacturer sends the goods to his agent
and after the agent affects the sales he sends the money to the company. His
commission ranges from 3% to 5% of the sales amount.
General sales may be cash sales or credit sales. Cash sale is selling cashew for
cash.
In Kalbavi cashews, 90% of sale is on credit basis. The credit given to its
customers is 15 days.
The cashew by products. i.e. Shells and husks are sold to the local
extracting industries.
Major markets for cashew in India are Gujarat, Delhi, Bangalore, Dharwad
etc. the people in the colder parts of the country are the major customers of
cashew.
YEARS SALE
2003-2004 45331355
2004-2005 67268719
2005-2006 62679561
2006-2007 108287590
2007-2008 178750366
EXPORT
Export of cashew kernels from India are subject to quality control and pre-
shipment inspection. Quality control and pre-shipment inspection exports of
cashew kernels from India are normally subject to voluntary quality control and
pre shipment inspection. Consignment wise inspection of cashews is being
conducted to ensure that the shipments adhere to the prescribed standards of
quality samples from the finished products are drawn and inspected to ensure
that the product is processed and packed as per the standards prescribed. Export
of roasted and salted cashew kernels are also normally subjected to voluntary
quality control.
EXPORT REQUIREMENTS
A unit has to fulfill certain conditions in order to export the cashew kernels.
They are as follows:
a) It has to obtain the license from the cashew export promotion council of India.
b) R.B.I code has to be obtained from the Reserve Bank of India. RBI in Bangalore
issues this.
EXPORT SALES
Cashew shipment from India is mainly in containers of size 20feet that will
carry about 700cartons. Offer for less than container load may also be accepted.
Ocean freight is charged per cubic meter (volume basis).
Freight for full container load (FCL) is fixed. It is more economical then freight for
part container load (LCL).
Contracts are normally made on Free On board (FOB) or cost and Freight
(C&F) basis. Pricing in international trade in cashews is in U.S dollars per lb
(0.454gms). Quotation in other currencies will be available on request. Business in
cashew is done on an offer and acceptance basis by telephone, Fax or E-mail since
the prices are subject to frequent fluctuations. Insurance is on account of the
buyer. At the time of contract, the shipment month, grade and prices are to be
clearly indicated. Sometimes shippers offer for shipments up to 6 months in
advance payment is usually made by 100% irrevocable letter of credit in favor of
the shipper through his bank. The letter of credit is opened immediately on
execution of contract or one month prior to shipment. Slandered documents like
commercial invoice, certificate of origin, quality and weight certificate issued by
the export inspection agency are provided. Any other specific requirements have
to be informed in advance by the buyer.
CONSIGNMENT SALES
This sale is similar to that of consignment sale in domestic market, but the
Reserve Bank of India (RBI) and the customers monitor it. The goods are shipped
in the delivery period and the payments are done as and when the sale takes
place. The main advantages of this method of sale are that the seller may get
higher price, however there is risk of getting the payments especially when goods
are consigned to gulf countries.
YEARS SALE
2003-2004 30,25,126
2004-2005 70,67,124
2005-2006 1,52,69,412
2006-2007 86,07,297
2007-2008 2,02,34,516
Kalbavi Cashews has large storage godowns to store both the raw cashews nuts
and finished product which is cashew kernel.
SALES MANAGEMENT
Selling is the dynamo of the economy. Every thing that is produced, from a
huge paper making machine to a paperclip, is intended to be sold. If a product is
not sold, it is waste. Waste makes for unemployment, low productivity, and less
overall national wealth.
The volume of sales and consequent margin of profit ultimately govern the
size of a business, its pattern of organisation and the financial and personal
problem.
“Sales management is the planning, direction and control of the personal selling
activities of the business unit, including recruiting, selecting, training, equipment,
assigning, rating, supervising, paying and motivating as these tasks apply to the
personal sales force”.
1. To enable the top executives to devote more time to planning policy matters.
4. To locate responsibility.
SALES PLANNING
Sales planning are deciding in advance the course of action for selling a
product or products. It decides what is to be sold, how, when and by whom it is to
be sold. It gives us a full- fledged sales programme of sales campaign and
procedures included in the sales programme shall be depicted in the sales
programme shall be depicted in a vivid manner.
SALES PROMOTION
Sales promotion is an important element in the promotional programme of
an enterprise. The other elements are advertising, publicity and personal selling.
By the way of advertisements and publicity, public are informed of the availability
of the product. Certain percentage of customers will buy it. More and more
people must be induced to buy so as to earn a profit. This can be partly achieved
by personal selling. But for the achievement of targeted sales or profit, one has to
undertake sales promotion. Hence, sales promotion can be treated as a booster
to other elements of promotion so as to persuade majority of the intending
customers to buy the product immediately. Thus, sales promotion offers an
incentive to buy.
Sales promotion in the domestic market from the point of view of Kalbavi
cashew is given primary importance since primary stress is laid on domestic
markets. This is because cashew nuts has been considered more as a luxury item
and as such, domestic market has been very encouraging as far as the producers
prospects are concerned and now, even the middle class people have began
accepting cashew nuts as a part their diets. The nutritive value of cashew nuts and
also its ability to add richness to many recipes and increased its marketing
position. However price is still the biggest constraint for the product of Kalbavi
cashews.
Thus on effective sales promotional strategy will have to lay much stress on
the cutting down of prices of cashew nuts in domestic market, by using cost
control measures right from the stage of buying raw cashew nuts.
marketing. It is the second “P” in marketing mix. A wrong pricing decision can
nullify the effect of all right decisions relating to product, physical distributions
and promotion. Decisions relating to price reflect many things; how consumers
perceive the products, who are the buyers, the profitability of the firm, the
marketer’s competitive position and considerable effect on the marketer’s
revenue and profit.
Price is the only element in the marketing mix that produces revenue all
other elements represent costs. Hence companies will have to give utmost
importance to pricing and handle it carefully.
2. CLIMATE
Now days, the competition is such that the prices charged by the
manufacturers of the same products play an important role in the determination
of the products price. Brazil and East African countries always give tough
competition to Indian cashew kernels.
Leading markets for cashew kernels quote prices for kernels. USA is the
larges market for cashew. The price quoted over there is one of the major
determinants for price level in other countries.
6. MARKET
Market also plays a vital role in fixation of prices. The more the demand,
the high will be the prices. The lesser the demand for cashew, the less will be the
prices. Thus market plays a vital role in price fixation.
The pricing policy at Kalbavi cashew will purely depend upon the price of
raw cashew nut and market. They keep in mind even the other factors, but stress
is laid upon price of raw cashew nut and market for cashew.
One kilogram of raw cashew nut when processed yields the following percentage
of products.
Shells 72%
Kernels 24%
Husk 2%
Rejection 2%
TOTAL 100%
The percentage yield of kernels, husk and rejection change according to the
quality of the raw nuts.
The parity chart obtained from Kalbavi cashews is as follows.
=75x46.10
=3457.50
Say Rs3450.00
Wholes : 14.4kgs
Pieces : 3.6kgs
Shells : 55.0kgs
Realization/Bag
5000
Cost of Production:-
Average cost/bag of 75kgs 3450
Average processing cost/Bag 1025
Interest and other overhead 250
Selling Exp and Packing material 175
4900
=5000-4900
=Rs.100/Bag
The pricing policies for export as well as domestic market are more or less sale. It
mainly differs at the end point (Realization) i.e. for export, the pricing depend on
the foreign exchange market where as for domestic market, and rates depend
upon the rates of tax, duties, and government regulations.
Often the pricing for exports is done keeping a level of margin allowing the
rupee to appreciation, which makes sure of break even or profit most of the
times.
DOMESTIC MARKET
In domestic market, there are dealers then deliver goods to stores. The
commission paid to them is Rs.20 per tin.
INTERNATIONAL MARKET
The main importers of cashew kernels are USA, Japan, Europe and other
countries.
The agents transmit the offers made by these importers to their principals
in India. If the deal materializes, the agent is entitled to a commission of ½ % to $
contract and 1 to 1.5% to rupee contract on the FOB value.
CHAPTER 6
FINDING, SUGGESTION AND CONCLUSION
FINDINGS
It is not easy to run a business concern, especially a cashew firm. Promoters
are finding lots of problems in day-to-day life. As soon as problem is solved,
another one arises which is common in almost all types of business. To achieve
success, lots of problems have to be solved which requires special care and
attention of the owners. A cashew firm has lots of fluctuation in price. There is
loss in every five years operation. The following problems were observed while
making study of kalbavi cashews.
Cashew is a seasonal crop, and hence the supply of raw cashew nut in local
market is not through out the year. To overcome this problem, a large quantity
purchase has to be made during the supply time and it requires a huge storage
area, which may be expensive.
2. LABOUR PROBLEM
3. FINANCE
Kalbavi cashew is a partnership firm and because of this, there is no
sufficient finance available supply. Due to seasonal supply, the raw nuts have to
be purchased between the months of February to May. So it requires lots of
finance for purchase, which may be insufficient in partnership firm.
4. INTERMEDIARIES
5. TAX BURDEN
The tax levied on cashew processors is very high which indirectly make the
goods uncompetitive.
6. PRICING
7. COMPETITION
The major problem of any firm will obviously be its competitors. There are
nearly 40 exporters from state who are the competitors and there are
competitors even from Vietnam, Brazil, and Africa.
8. INTEREST RATE
The exporting of goods, the borrowed funds will have a high rate of interest.
The export procedure is very lengthy. It requires a list of paper works such as
long process activity of the firm.
SUGGESTIONS
1. In order to solve labour problems such as absenteeism, there should be co-
ordination among the employees and management. The employees should be
provided with basic facilities and firm should encourage workers, motivate them
to work better.
2. To avoid middlemen problem; the firm can contact buyers directly and
purchase directly from growers of cashew tree.
3. Importance should be given to raise the supply of raw cashew nuts by resorting
to intensive and extensive cultivation of cashew plantation in order to avoid the
problems of shortage of raw cashew nuts in the country.
5. Government should use the major problem of shortage of power supply. The
plant should make the use of solar power etc to avoid power problem.
6. The export procedure should be made simple so that the exporters can earn
precious foreign exchange of India.
9. The commodity boards like coffee boards, tea boards, rubber boards etc. are
available to cashew industry should also have organization set up to coordinate all
the efforts of production, processing by product develops etc.
10. The research institutions have to be set up and should test the varieties of
trees and supply high yielding and qualitative raw cashew nuts.
CONCLUSION
The cashew kernel is now ever well known meat, occupying a very high and
prestigious hierarchy of denied fruits and nuts meats in the world market.
The Indian cashew industry earns a lot of foreign exchange for the country.
Therefore, very efforts should be made to grow more cashew nuts that will help
for growth of the industry as well as the economic condition of the country.
BIBILIOGRAPHY
C J GEORGE, J. JOHN
EDITION -2003
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