CHAPTER Il l

BACKGROUND PROFILE OF THE SAMPLE

3.1 INTRODUCTION :

In this Chapter, the descriptive results on the background profile of

the firms are presented. The chapter is organized mainly Into three

parts. Part - 1 presents a detailed descr~ption of a few characteristics

of the sample firms as well as the respondent entrepreneurs under

the head "Profile of the Sample".

The second part of the chapter is a discuss~on on the ex~sting practices

in sharing andlor exchanging the marketing resources In the sector.

This Information helps in assessing the differences in the theoret~cal

propositions and the practical applicat~ons of the concept of Symbiotic

Marketing. It further aids in des~gn~ng the methodologies for lmprovlng

the efficiency of these resource sharlng activities.

A detalled note on the contemporary Market~ng Practices is presented

In Part - 3. Here, the information collected on various aspects like

the importance assigned to the Marketing functlon and to the different

marketing activities, their perceived marketing strengths and weaknesses,

general marketing problems, and thelr marketing expenditures are

analyzed and discussed. The information aidsin conceiv~ng the marketing

knowledge and the practices of the respondents, who have provided

the primary information for the Present study on Symbiotic Marketing.

The preliminary analysis of the data revealed that there is no difference

in the perceptions of respondents from the states of Tamil Nadu and

Andhra Pradesh. This is concluded by calculating the Chi-square

values for the frequencies of the answers. The chi-square results in

respect of a few issues like importance assigned to the marketing

activit~es, perceived marketing problems and scope of cooperation

among complementary, competitive and unrelated product manufacturers,

are presented in Appendices J1 to J5. Consequently, the results in

this chapter and the following chapters are presented combinedly,

without differentiating between the samples from Andhra Pradesh and

Tamil Nadu.

3.2 PROFILE OF THE SAMPLE :

The characteristics of the sample surveyed are presented and analysed.

in the study. It is given mainly in two parts viz. Characteristics of

the firms selected as the sample and of the respondents who have

Provided the answers to the survey questionnaire.

3.2.1 CHARACTERlSnCS OF THE FIRMS :

The characteristics of the sample firms are discussed specifically on

on four aspects viz., Management Style, Industry Sector, Number

of Products and Employee Strength. A brief note on each of these

five characteristics is followed.

3.2.1.1 MANAGEMENTSTME :

The results on the Management styles of the sample flrms are exh~bited

In Flgure 3.2.1 a. Of the one hundred and eleven sample firms surveyed,

approximately fifty one per cent flrms have Sole Proprietorship style

of Management. Anotherforty one per cent of thefirmsare Partnership

flrms. Only six per cent of the firms are Private Lirnlted companies.

One of the respondents, an employed manager, refused to provlde

thls information. The remaining one unit IS a Publlc L~mited company.

3.2.1.2 INDUSTRY SECTOR :

Consequent upon the characterlstrcs of Symbiotic Marketing, ldentlfied

based on the concept, all the sample f~rms are selected only from

the manufactur~ng sector. The study surveys a total of One hundred

and flve firms wh~ch are actlve and operating and SIX un~ts which

are slck. The results In percentage, are p~ctorlally presented In

F~gure 3.2.lb. The efforts to survey more sick unlts are thwarted

by the difficult~es involved in tracing the present residentla1 addresses

and/or motlvat~ng the~dent~fled owners to partlclpate In the study. The

inadequate number of sick units in the study will ne~ther have any

102 CHARACTERISTICS OFTHE SAMPLE FIRMS

MANAGEMENT STYLE ( 3 ) ( 4 ) ( 5 )

1% 6% 1%

Fig. 3.2 . la

OPERATING STATUS • Opratlng ( 1)

5% ( 2 ) Slck

9576 (1)

Fig. 3 .2 . lb

NUMBER OF PRODUCTS

( 3 )

(2

Fig. 3.2.lC

undue effect on the study results, nor provide scope for separately

analyzing the study results. Thus, the study results may only reveal

the perceptions of the active and operating firms in the manufacturing

sector of the Small Scale Industry in the locations of study in India.

3.2.1.3 NUMBER OF PRODUCTS MANUFACTURED :

For the study, a "product category" is considered as a product. In

other words, even when the product is offered in more than one flavour,

fragrance, size, shape andlor quality, it is accounted as only ONE

product. For example, Jams and Squashes are considered as two

products. Jams is considered as only one product even though it

1s offered in different flavours like Mixed, Fruit, P~neapple etc. S~milarly,

bathing soaps are considered as one product even though ~t is offered

in different fragrances like cologne, lime, Jasmine etc., The One

hundred and eleven firms surveyed includes eighty two firms which

are manufacturing only one product, seventeen firms dealtng in two

products and Twelve f ~ r m s wh~ch are producing and marketing more

than two products. Figure 3 . 2 . 1 ~ presents the results in this regard.

The list of products include breads, biscuits, confectionary, suaces,

ice creams, soft drinks, jams, squashes, nut powder, vermicelli, noodles,

papads, asafoetoda, and ready masalas from Processed Foods industry

and bathing soaps, whashing soaps, talcum poweder, tooth brushes,

agarbathi, bindis, nail polish, herballshikakai powder, snow/vaseline,

jellys, perfumes, and shampoos in Cosmet i~s & Toiletries industry.

3.2.1.4 EMPLOYEE STRENGTH OF THE FIRMS :

The employee strength of the Sample firm is recorded in regard to

two major groups ciz., Manufacturing Sector and Administrative sector.

The manufacturing sector is further classified into Skilled, Semi-skilled

and Unskilled groups of employees. The Administrative sector is also

feather classified into two groups vlz., managerial and clerical. The

responses are obtained separately for each of these five categories.

The results for all these groups are presented in Tables 3.2.la and

3.2.lb. It can be observed for from the Table 3.2.la that employing

less than 5 skilled employees is more popular in the Small Scale Sector.

But, in regard to Semi-skilled and Unskilled groups of employed, more

employees are engaged by thesarnplefirms. In regard tothe administrative

sector, engaging 2 to 3 managerial personnel (including Registered

Functronaries, their relatives in managerial positions) is the most popular

mode. But, employing more than 10 managerial personnel is very rare

in thts group, which is the case with only 3 firm. But, on the clerical

slde, employing any number less than 10, is almost equally popular.

3.2.2. CHARACTERISTICS OF THE RESPONDENTS :

The following few paragraphs describe the Respondent Type, the

Age structure, Academic qualifrcations and Industrial Experience of

the respondents who have prov~ded the primary lnformatlon for the

study. The results on the first three charaeteristics are presented

through sedarate pie diagrams in Figures 3.2.2a, 3.2.2b and 3.2.2~.

Employee Strength In the Manufacturing Sector of the Sample Firms

Number Less than 5 6 to 10 1 1 to 2 5 26 and above T O T A L

N o 1 % N o . 1 % N o 1 % N o 1 K I N O I %

Table 3 . 2 . l a

Strength of the Managerial Personnel in the Sample Firms

Table 3 . 2 . 1 . b

Source : Primary Data

@ : Total includes only those firms which have responded to the particular category

106

3.2.2.1 RESPONDENT TYPE :

The one hundred and eleven questionnaires for the study are filled

by sixty five, Managing DirectorsIManager Partnerstsole proprietors

and other Registered Functionaries, and forty six Managers who are

given overall charge of all the activities of the firms. Though, it is

intended to collect information only from the Registered Functionaries,

a few operational difficulties have restricted the approach to the

promoters. Primarily, some of the entrepreneurs, though register the

flrms under their names, employ a manager who is given the overall

charge of the f~ rm, empowering him to look after all the operations

Including monitoring Production, organizing personnel, controlling

f~nances and planning Marketing activities. In few more cases, the

entrepreneurs have refdsed to personally take part in the survey, as

they have employed Marketing Managers.

3.2.2.2 AGE PATTERN OF THE RESPONDENTS :

The age of the respondents is not available in three cases. The average

age of the remain~nig one hundred and e~gh t respondents is

41.49 years. Similarly, the median of the data on the Age factor is

found to be 41 years. The Age structure of the respondents In more

detail IS presented In Figure 3.2.2b. It may be observed from the

table that a strong majority of the respondents are in the more dynamic

age group of 30-49 years. The fact aids in assessing the valid~ty

of the study results. The perceptions of the above specified age group

107 CHARACTERISTICS OF THE RESPONDENTS

' RESPONDENT TYPE

Functionaries

Fig. 3.2.2a I AGE STRUCTURE ww29 YTP

(5) (6) (1) Om-38Yro. 4% 3% 11% H40-48Yrs

050-9)Ym

( 2 ) 29%

I 39% ( 3 ) . Fig. 3.2.2b

ACADEMIC QUWFICATlONS

16' '( 4

I Fig. 3.2.2~ I

are more relevant and valid for the present study. The entrepreneurs

in this age group will not have completely lost their dynamism and

simultaneously will have an inclination towards innovative business

practices. Further, the inherent responsibilities of their social and

organizational roles require them to weigh these innovative practices

agalnst the rlsks involved in the light of their experience and practicality.

3.2.2.3 ACADEMIC BACKGROUND OF THE RESPONDENTS:

The results on this facet provide further support to the pertinence of

the sources of primary information to the study. The data on the

educational qualifications is not available for only three respondents

in the total sample. The remaining sample includes ten respondents

wlth under matriculatlon education, twenty seven respondents with

college Graduation or below and twenty nine respondents who possess

Master's degree in disciplines like Economics, Commerce, English,

Natural and Physlcal sciences. The remaining forty two respondents

have professional degrees. Out of them, eighteen respondents possess

either a Master's degree or a Postgraduate Certificate in Management.

The remaining twenty four respondents possess either a Bachelor's

or Master's degree in Engineering, Med~cine, Industrial Tralning etc.

Thus, approximately seventy seven per cent of the respondents have

Graduation or higher education,' whlch enables them to comprehend

the issues with clarity.

1 I1 is assumed that half of the respondents In the Category 'Gradualton or below" as having done Graduation programs

3.2.2.4 INDUSTRlAL EXPERIENCE OF THE

RESPONDENTS:

The experience of the respondents is collected mainly fortwo aspects.

First, the cadre in which they have gamed the experience, i.e. as an

entrepreneur and as an employee. Second, the organization in

which they have obtained that experience, i.e. In all the previous

organizations and in the present organization. Table 3.2.2 presents

the average values on each of these four measures. The values

presented, endorse the pertinence of the sample units in efficiently

meetlng the objectives of the study.

The above stated four character~stics of the firms and the four

characterlsttcs of the respondents, develop a ciear plcture of the

nature of the sample surveyed. An examinat~on of the interrelationships

among a few demographic characterist~cs and the perceptions of the

respondents, succeeds this d~scussion.

3.2.3. INTERREIATIONSI-IIP WITH PERCEPTIONS OF

THE RESPONDENTS :

The demographlc characterist~cs of the respondents are also subjected

to analysis. It is attempted to verlfy whether the responses rendered

by the sample Small Scale entrepreneurs are Influenced by a few

demographlc characterist~cs. For the purpose, the data for four

such characteristics, viz. Respondent's Designation, his age, Academ~c

Qualifications and his Aggregate Experience', are cross tabulated . with the responses to three specific questions. These three questions

collect nominally scaled information about their current involvement

in the interorganizational cooperative arrangement, their preference

for Symbiotic Marketing strategies and their initiative to lead the talks

for Symbiotic Marketing agreements. Table 3.2.3. presents the cross

tabulated data for the seven dimensions considered. The flgures

are shown as percentages of the total sample of 111 units. The

following paragraphs describe the salient features of the table.

It may be observed from the table that a total of 46 per cent of the

respondents prefer to practice Symbiotic Marketing. This constitutes

31 per cent of the Registered Functionaries l ~ k e Managing Directors,

Managing Partners and Sole Proprietors, and 15 per cent of the employed

Managers, who are given the overall charge of the unit. This points

out that there exists a signlflcant difference In the numbers of Registered

Functionaries and employed Managers, who prefer Symbiotic Marketing.

But, the Chl-square statistic, calculated forthe concerned contingency

table, is found not to be statistically significant, as presented in

Table 3.2.4. The result is comprehended through a close observation

of the data. More precisely, out of the 65 Registered Functionaries

1. The term Includes the experience as en employee and an entrepreneur, In the present orgenlzatlon as wel l as all t l ie previous ogranlzatlons, il any

responded to the question, about 52 per cent gave the 'yes' answer,

whereas out of the 45 employed Managers, about 38 per cent gave

the 'yes' answer. Thus, the difference of 14 per cent may not have

been sufficient to establish any significant association between the

Designation of the respondents and their preference for Symbiotic

Marketing strategies. Akin to this, it outwardly appears that more

number of Registered Functionaries lack the initiative to lead the talks

for Marketing Symbiosis. But, the Chi-square statistic calculated for

the respective contingency table is not statistically significant, as shown

in Table 3.2.4. This again, is due to the fact that the difference in

percentages of negative answers to the question over the total their

respective sub-groups, is not signif~cant enough toassociate the Designation

of the respondent and their lack of initiative for promoting Symbiotic

Marketing Practices. In regard to Age characteristic, it appears from

the table that ther IS no association between the Age of the respondents

and thelr preference for Symbiotic Marketing. The Chi-square statistic

for the concerned contingency table, also supports this. The values

is not statlstically significant, as shown In Table 3.2.4. But, when

the flgures are distributed among three Agre groups1, instead of the

present 5 groups, the Chi-square statistic IS found to be statlstically

significant2. This establishes that the age of the respondents influences

their preference for Symbiotic Marketing strategies. More precisely,

1 Considered Age Groups are (8) Below 29 yeras,

(b) 30 - 49 years (c) Above 50 yrs.

2 Calculaled xZ value = 9 5805 for three Age groups

Table value = 9 488 (dl = 4 , a = - 0 5 )

the Small Scale entrepreneurs in the age group 30-49 years, are

more prone to accept this innovatwe marketing service system. In

regard to Age and taklng initiative for Symblotlc practices, the Chi-

square values for both the contingency tables, i.e. with flve Age

groups1 and wlth three groupsZ are not statistically signifcant. Thls

proves that the Small Scale entrepreneurs of all age groups lack the

lnltlatrve for promoting Symbiotic Marketing practices. Further, the

study results do not establish any relationsh~p between Academic

Qualifications of the respondents and their preference for Symbiotic

Marketing (Chi-square value IS shown In Table 3.2.4.). Similarly,

the study results prove that irrespective of their Academlc Qualifications,

majorlty of the Small S'cale entrepreneurs lack the requ~red lnltiatlve

wh~le inltlatlng talks for Symbiotic Marketing agreements. The respective

Chi-square statistic which 1s not significant, 1s shown In Table 3.2.4.

Rut, i t IS observbed from the study results presented In Tables 3.2.3.

and 3.2.4., that the Agggregate Ejxper~ence of the respondents Influences

thew preferences for Symbiot~c practices. The statistically slgnlflcant

Chi-square value disproves the independence of each of these two

dimensions, proposing an associatrve relatlonshlp between them. Thus,

It can be ~nfered that more the experience of the SmallScale entrepreneurs,

1 The x2. Value IS shown on Table 4 13

2 Calculated x 2 = 9 0351

Table Value = 9 488 (dl = 4, u = 0 5 )

I RESULTS OF CHI-SQUARE TESTS FOR THE FOUR I I DEMOGRAPHIC CHARACTERISTICS I

Table No. 3.2.4 Source : Primary Data ( ) : Respective table chi-squre value

SI. No,

Dimension Chi-square Value

Degrees of freedom

Significance at 0.5 here

the more 'they tend to prefer these Symbiotic Marketing strategies.

But, the initiative of the respondents to lead the talks is found to be

rndependent of their Aggregate Experience. More precisely, irrespective

of therr experience, majority of the Small Scale entrepreneurs lack

the rnitiatlveforstarting thenegotiationsfor SymbioticMarketing agreements.

3.3. Part 2 - PROFILE OF PAST ALLIANCES :

This section of the chapterdrscusses the nature of the drfferent cooperative

agreements that arelwere being practised in the Small Scale Sector,

trll the date of the present survey. Various features of the past alliances

llke practice, marketplace relationships, extent of relationship, reasons

for opting resource exchanges, partner-firm selectron and other related

features are d~scussed in the following paragraphs.

3.2.3 PRACTICE / EXERCISE :

The results of the study rndicate that organizational cooperat~on is

not properly exploited by the lndran Small Scale entrepreneurs. The

results are presented In Frgure 3.3.1. Of the one hundred and eleven

Sample firms surveyed, only seventeen firms (approximately fifteen

Per cent) have operationalisedthe concept of rnterorganizational cooperation.

Among these seventeen agreements, ten agreements are for marketing

the focus frrms' products by the other frrms, five agreements are for

marketing of otherfrrms' products by the focus firms and the remalnlng

two agreements Involve productton facilities1 for the resource exchange.

Flgure 3.3.2 presents the results on the type of the agreement. Though,

it is encouraging for the two industries considered that most of these

sharing agreements encompass Marketing resources or faclllties, the

reallty that considerably small number of Small Scale entrepreneurs

are practising Symbiotic activities, is highly alarming.

3.3.2 NUMBER OF PARTICIPANTS :

Symbiotic Marketing 1s a resource exchange relatlonshlp that facilitates

the needs and necessities of mainly the lndlvldual participants. The

objectrve wrll be effectively fulfilled when the number of partlclpating

symblonts 1s mlnimal. As the number Increases, the potential for

Interpersonal and interorgar~izattonal conflicts also increases, which

can negatively affect the success of the Symbiotic agreements. Further,

ensuring compatibility In the~r object~ves and operational styles is rather

dlfflcult when the number of particlpatlng flrms is more. The study

results are mostly In line wlth this propos~tion. In flfteen out of the

seventeen sharlng agreements, there are only two particlpants. In

the remaining two casesalso, the number does not exceed five. Though,

the study does not attempt to establish the reasons for the limlted

partlclpation of the entrepreneurs In these sharing agreements, the

1 Through the pilot study, it Is observed that productton shar~rlg agreements are more popular In the Pharmaceut~cals ~ndusty, whereas In hlgh-tech ~ndustr~es, cooperatton IS mostly pract~ced In Research & Development actlvltles T h ~ s establishes that the nature o l shar~ng a c t ~ v ~ l ~ e s generally d~ f l e r s lrom tndustry to Industry

11 8 PRACTICE OF INTER-ORGANISATIONAL COOPERATION

TYPE OF AGREEMENT

. F.8 n.rb.tlnQ by the locu.

( 3 ) . * o ~ .k.,l"Q p.oducllon 1.cllnl..

Flg. 3.3.2

earlier proposition may forrrl a rrlore lucid explanatiori to t l ~ e issue.

But, other reasons like not being approached by others and

contentedness in sharing with one firm may not be completely denied.

3.3.3 SATISFACTION OF THE PARTICIPATING FIRMS :

The study identifies two sources of satisfaction, viz. the symbiotic

agreement and the symbiotic partner. It attempts to assess the

satisfaction levels of the respondents In these two regards through

two separate questions. The first question asks for the degree of

satisfaction from the agreement and the second question asks for

the degree of satisfaction from the partner. The level of satisfaction

is measured on a flve-point Likert - type scale. The five points on

adopted Liket-type scale are defined as Very much dissatisf ied,

dissatisfied, Neither satisf ied nor dissatisfied, Satisf ied and Very

much satisf ied. But, a few respondents are unable to bifurcate their

satisfaction onto the two aspects. They are asked to relate the

problems they confronted, either to the agreement or to the partner,

by asking questions llke if the partner IS changed, would the problem

still be encountered. If the answer is "Yes' to thrs question, the

problem IS agreement related, otherwise it is partner related. This

c lass~f~cat~on enabled them tospecify their satisfaction levelsseparately

for the agreement and the partner.

Theoretically, the participating firms will be highly sat is f ied when they

get more benefits than they have expected from the agreement, they

will be just sat is f ied when they get what they have expected and

will be h igh ly d issat is f ied when the accrued benefits are very much

lower than their expectations. The Pie-diagram in Figure 3.3.3a

is drawn using the frequenc~es on the five scale points. The average

score of 4.2 for the "agreement" denotes that majority of the respondents

are satlsfied with the practice of sharing. This 1s further augmented

by the Mode and Median Values, both of which are '5 ' for the data.

Thls also indicates the 'very much satisfied state of the respondents.

The results, thus, prove that the Small Scale entrepreneurs are successful

In achlevlng the expected beneflts from the cooperative agreements.

Thus, ~t may be concluded that in majority of the cases, the resource

sharlng agreements benefit the participating firms and thls provldes

the requlred proof for professing Marketing Symbiosis to the Small

Scale entrepreneurs.

But,in regard to the satisfaction from the partner-firm, the results are

not so clear as in the earher case, with few of the respondents

expressing lower levels of satisfaction about the partner-flrms. The

results of the question are presented in Flgure 3.3.3b. The Arithmetic

Mean, Mode and Medlan values for the results are 3.76, 5 and 4

respectively. T h ~ s shows that the respondents are less than "satlsfied".

SATISFACTION LEVELS

Fig. 3.3.3a

ABOUT THE PARTNER nor Dissatisfied

Dissatisfied ( 5 ) 5% t

(1) 42%

( 3 24%

18% Fig. 3.3.3b ( 2 )

The results provide scope to predict that the Small Scale entrepreneurs

face more problems with the partner-firms, than through the execution

of the agreement. The data indrrectly rmplies that failures In marketrng

cooperation are more due to partner incompatrbilrty. The incompatibrlrty

among the partner-firms, may marnly be attributed to the adopted

selectron procedures with inherent socral oblrgatlons and inhibrtrons.

Moreover, the problems arislng out of such incompatibility overshadow

the native advantages of the sharing activities, there by discouraging

other prospects for Symbiotic practices.

3.3.4 MARKETPLACE RELATIONSHIPS :

Resource exchange IS practised among firms wrth all the three marketplace

relatronshrps, viz. competitive, complementary and unrelated product

manufacturers. Thrs relationship IS not known for one of the respondrng

firms. Out of the remarning, seven agreements each are between

complementary and unrelated product manufacturers, respectrvely.

Only twoagreements are between competitors. The results are prctor~ally

presented through a pre-drgram in Frgure 3.3.4. The data of the study

shows that cooperatrve agreements between complementary and unrelated

product manufacturers are equally popular in the sector. Of the two

agreements between the competrtors, one IS to provrde excess production

capaclty to their blgger rivals for production of therr brands. The second

agreement has been inrtiated by an offrclal of Natronal Small Industries

Corporation, for joint procurement of orders for industrial detergents

MARKETPLACE RELATIONSHIPS AMONG THE PRACTICING FIRMS

Complementary

Unrelated No Answer

among four manufacturers based at Madras. The effort was unproductive

due to opportunistic behavior exhibited by the member frrms. Though,

shar~ng between competitors is not so popular and is limited rilainly

to production faclllties or jolnt order procurement activities, such

practices develop a posrtive attitude towards their co-manufacturers.

This positwe attltude enables them to extend their cooperatlve practices

atleast to a few market~ng activities like demand estlmatron programs,

market development programs, and marketing research activlt~es in

the near future.

3.3.5 lNlTlATlVE TO APPROACH OTHER FIRMS :

The study results show that the sharing agreements are initiated by

the respondents themselves In eleven cases out of the seventeen

agreements. In another five agreements, the other partner-f~rms have

taken the initiative in effecting the alliance. For one agreement, the

lnformatlon is not available. In another questron, the respondents are

asked to specify the mode they have utlllzed in approachlng other

firms. Only two respondent entrepreneurs have shown the real inltlative

by approachlng completely unknown firms wlthout the assistance of

a mediator. Whereas in eleven cases, e~ther the particlpatrng flrms

are known to each other prior to the agreement or a mutually known

mediator is taken help of in approaching each other. The results enable

to conclude that most of the Small Scale entrepreneurs hes~tate to

take Initial steps In negotiat~ns when the other flrms are completely

new to them.

3.3.6 TIME CONSIDERATIONS :

In the present study, information on the time aspect of agreement

IS not available for flve cases. Out of the remain~ng, two agreements

are extended over a period of more than one year but less than three

years,Four agreements are for a period of more than three years

but w ~ t h a fixed time period, and for six agreements the tlme limit

IS not determined when the alliance is made. This shows that long-

term cooperative arrangements are more popular in the Small Scale

Sector. The phenomenon can be attributed to one of the basic facts.

It is observed that in majority of the cases, the agreements are made

between personally known entrepreneurs or through mutually known

med~ators. Such prior int~macy among the participants may brlng-~n

a degree of ob l~gat~on, and may not allow them to determine the terms

of the agreement w ~ t h hlarity and determinat~on. They ascertain the

operat~onal~ties of d~fferent issues as and when they arise. Sirnllarly,

the t ~ m e d~mension is also not discussed to keep themselves off from

speciflc commitments towards the agreements. To be more coherent,

majorlty of the firms practicing resource exchange, are unable to develop

these shared resources on their own and thus need these resources

throughout the operative-l~fe of the firms. Consequently, they prefer

sharing of these resources either until they develop the abilities to

promote these resources on the~ r own or till they do not encounter

any major problem/s with the partner-firm. Thls 1s furthered by their

unwillingness to commit themselves for any specific length of time

to keep themselves free to withdraw from the agreement wrth l~mited

retreating costs for either of the parties. But, the absence of any

blndrng factor may nourlsh the notion of non-committed afflliatlon among

the participants, whrch llmits their abilities to jorntly exploit the future

opportunrties. Further, this non-committed attitude also disables them

to adopt effectrve conflict resolutron methodologies, by making the

retracting process more attractive and rnexpensive for them.

3.3.7 EXTENT OF RELATIONSHIP :

The number of marketing activities or facrl~ties shared by the respondent

firms is not available for three agreements. Of the remainrng fourteen

agreements, elght arrangements are Unrd~mensional, i.e. rnvolve only

one marketing actrvity in sharing activitres. But, it is rnformally observed

that most of these Unrdimensronal agreements encompass only Physical

D~stributionfacil~ties or Distribut~on Channels. But, thesrx Multrd~mensional

agreements, 1.e. extending more than one actlvrty forshanng, observed

In the study surround two or more actlvrties lrke Physical Dlstrlbution,

Sales Promotion Programs, Sales Force, and Marketing Knowledge

and Expert~se. But, Functional Symb~osis, 1.e. cooperatrng in the

entrre marketing functron through a single marketing strategy for all

the participating firms, IS consprcuously absent in the study results.

3.3.8 AXIS OF RELATIONSHIP :

As Identifled in the theoretical propositions, resource exchanges are s

practised in the existing resources and also by jointly promoting new

resources for the combined utilization of the partic~pating firms. For

only one agreement, this information on the axls of the relationship

is not available. In two cases, the shared resources are jointly

promoted by both the participating firms. But, in both the cases, the

contribution of the other partner-firm is less than fifty per cent of the

total cost. This implies that the focus firms maintain more stake in

the newly promoted resources, perhaps to have more control over

the resource. But, in all the remain~ng cases the shared resources

are exlsting with either of the participating flrms. More speclflcally,

In seven agreements, the resources shared are exlsting w ~ t h the

focus firm and in another seven cases the resources possessed by

the other partner-firms are uti l~zedfor sharrng. Thus sharing of exlsting

resources is more popular, than jo~ntly prornotrng new resources with

the other f~rms. The tendency may be understood as a result of

the~r marketing practices. Primar~ly, majority of the Small Scale entrepreneurs

have developedsimllar resources l~ke Dealer Networks, Physical D~str~bution

facllitles etc.. The other marketing act~vltles like marketing research

programs, regular sales promot~on programs, demand il~lprovenlent

programs etc, have not been pract~sed by many of the Small Scale

entrepreneurs, as they assign secondary importance to these actlvitles.

For these two reasons, the Small Scale entrepreneurs might not have

cons~dered joint sharing of marketing resources as a valid strategy.

3.3.9 REASONS FOR OPTING RESOURCE EXCHANGES :

The respondents are asked through a questlon to identify the reasons

for their sharing the market~ng activities. Six answers are prov~ded

along with the question and the respondents are allowed to ~den t~ fy

the reasons applicable in t he~ r respective cases. Major~ty of the

respondents have expressed their "inability to promote the resources

on their own and underutilization of the existing resources" as

the most important factors that motivated them to lnvolve in resource

sharing relationsh~ps. Both these reasons can be placed at the First

and Second ranks based on both frequencies on the prrmary ranks

asslgned by the respon'dents, as well as the average rank scores

(1.7 and 2.1 5 respectively). These flndlngs confirm resource Inadequacy

and underu t~ l~zat~on of the resources as the two major forces for the

prevailing sharing activities. Further, "reducing the operatronal

expendrture of the facrlity (average rank score 2.55) and shortage

of funds (average rank score 3)", are the other two major reasons

Identifled by the respondents. Thus, the Small Scale entrepreneurs

do not cons~der the Inadequacy of flnanclal resources as the only

important reasons for their sharlng actlvltles. A comparislon of the

flrst and the fourth reasons supports that their inabilities to develop

resources on their own may have been largely influenced by other

elements like time, risk and utility dimensions. This highlights the

need for further research into non-financial reasons that demotlvate

the Small Scale entrepreneurs in surmounting the difficulties in possessing

the marketrng resources. But, reasons like " the optimism that the

agreement willimprove the firm's name (average rank score 3.1 25)

and the difficulties in managing the facility (average rank score

4.43)" are not considered as important reasons for thelr cooperative

practices by majority of the respondents.

3.3.10. IDENTIFYING ALTERNATIVE FIRMS :

It 1s ldentlfled In the study that ten out of the seventeen respondents

have identlfled a few alternative flrms and selected a more amcable

and profitable partner-firm from among them. But, the fact that a

considerable thirty flve per cent of the respondents do not cons~der

alternatlve flrms, is to be vlewed wlth care and requisite steps are

to be taken to make the Small Scale entrepreneurs understand the

importance of the actrvity.

3.3.1 1. SOURCES OF INFORMATION :

The respondents are asked to ldentlfy the d~fferent sources from which

they have collected the ihformat~on about thew respectlve partner-firms.

The respondents are fac~litated w ~ t h SIX alternatrve responses through

the questron and are also allowed to identlfy other sources employed

In the~r Individual Cases. But, none of the respondents has identified

any additional source of information. The two most popular sources

are 'Friends, who are in the commercialactivity' and 'The Government

departments l ike National Small lndustries Corporation Limited and

Small lndustries Development Corporation. This reveals the pos~tlve

attltude of the Small Scale entrepreneurs towards these Government

organizations and requires them to be more actlve and receptive to

the problems of these entrepreneurs. Simultaneously, "organizing

an individual survey in the market" is another popular method of

collecting information about the alternative partner f!rms. Further,

"Management Consultants and the retail outlet owners" have been

considered as provid~ng only moderate lnformat~on In this regard. Another

source moderately responded by the entrepreneurs IS ' raw material

and machinery suppliers'. Though this source has been Identifled

by Only two respondents, the rnformat~on obtained through the source

may be considerably useful, for they can provlde informat~on about

the business practices of the other firms. But, from the chi-square

statistic calculated on the frequenc~es,' ~t may be concluded that all

these are equally useful In collecting the requ~red ~nformatlon. The

knowledge of these d~fferentsources of lnformat~on helps in systematically

correlating the information needs with sources and thus reduclng the

tlme for collecting the lnformatlon.

1 Calculated Chi-square Value = 1 96. , Table Value = 11 070 (dl = 5 , and a = . 0 5 , )

3.3 .12 FUTURE INTENTIONS ON SHARING :

Another important aspect considered In thls part of the study IS the

respondents' future intentlonsand plans about the cooperative practlces.

The results seem to be very encouraging with seven out of the seventeen

respondents willing to extend their cooperatlve activities to other

resources also. Another five respondents would like to maintaln the

exlsting level of cooperation In the activ~ties presently shared. Only

one respondent expressed an opinion that he might reduce the number

of activltles where cooperation is practiced. All thls shows that the

resource sharing agreementsare acceptable tothe Small Scale entreprerleurs

and that the advantages Inherent with these sharrng actlvitres are being

properly aipralsed. But, as the pace of discernment IS very low, the

benefactors llke Government sponsored organizations and other Industry

associations should take inltlatlve in aggress~vely propagating these

practices through various orlentatlon and accl~rnat~zat~on programs.

3.3 .13 REASONS FOR TERMINATING THE ALLIANCES :

The flnal aspect studied in thls part is to rdentlfy the reasons for

terminating the shar ing arrangements in the sector. The question,

In thls respect, ~ncludes elght reasons as speclflc alternatrve responses

and provldes scope, for identifying any other reason w h ~ c h is

responslble In thelr respective cases. It is observed that only SIX,

out of the seventeen agreements studled, are terminated. Thls Information

on the present status 1s not available for another two flrms and the

remaining nlneflrms are stillcontlnuing with theircooperat~ve relat~onships.

The efforts to brlng out the reasons for t he~ r terrninat~ng the alllances

were not productive. None of the six respondents who have terminated

thelr respective agreements, are willlng to clearly speclfy the reasons.

Only one respondent has said that he IS not willing to continue the

agreement, but he also has denied to d~sclose the reasons for his

unw~llingness. It IS observed through informal discussions with the

respondents that these reasons are mostly interpersonal In nature and

so would not be disclosed for various reasons. Thus, ~t may only

be concluded that most of the sharing agreements are term~nated due

to the stra~ned interpersonal relationsh~ps among the partlclpant

entrepreneurs rather than due to the negatlve synergies and other

operational dlfflcultles. The preced~ng discuss~on has deta~led the varlous

aspects of the inter-ftrm cooperattve practices prevail~ng in the Sector.

But, a revlew of the current Market~ng pract~ces of the sample flrms

IS conducted In the fol low~ng dlscussron.

3.4 Part 3 - CONTEMPORARY MARKETING PRACTICES

The present sect~on attempts to assess the extent of success of tlia

Small Scale entrepreneurs In engrossing the recent sh~f ts in nature

Of the "marketing" concept. The objecttve is ach~eved through a few

qUeStlons posed to the respondents In regard to their market~ng act~vlties

like the Importance assigned to varlous busrnessfunctlons and marketing

activities, thelr market~ng problems, perceived rnarketlng strengths

and weaknesses, and their marketing expend~tures. The fol low~ng

paragraphs present the results of the study and a b r~e f discussion

on each of these aspects.

3.4.1. I N P O R T ~ C E OF BUSINESS FUNCTIONS :

The maxlmum importance asssigned to specific bus~ness llke f~nance,

production or marketing, generally determine the orientation of the

business operatlons. A Finance Orientedenterpreneur ass~gns maximum

lmportance to Finance function and assesses the pros and cons of

various busmess practices In financral terms. S~m~lar ly, Marketing

Orientedfirms concentrate more on Market~ng function and Production

Orientedfirms on product~on function. The study attempts to ~den t~ fy

the relative levels of rmportance assigned by the Small Scale entrepreneurs

to the flve buslness functions Vlz. F~nance, Product~on, Marketing,

Personnel and Research & Development. The responses are noted

on a five point semantic scale with end polnts deflned as Lowest

lmportance (1) and H~ghest Importance (5). Thef~guresin the parentheses

denote the score po~nts given to the respective scale polnts for the

purpose of analys~s. The results of the study s~gnal a s h ~ f t in the

Orlentation of the Small Scale entrepreneurs from Product~on and

F~nance to Market~ng in their bus~ness operations. The average score

for the Marketing funct~on (4.36) is relatively higher than the average

scores for Finance (4.257) and Product~on (4.139). But, the number

of respondents who have ass~gned Hlghest lmportance to Flnance

Function (approximately fifty four per cent) are higher than those who

have assigned the same status to Marketing Funct~on (approxilnately

f ~ f t y per cent). Consequently, a chl-square test is conducted on the

cumulat~ve frequencies of the scale points 4 and 5 , to ident~fy whether

the differences in the levels of importance asslgned to the three functlons,

viz., Flnance, Production and Marketing is really existing. The calculated

Chl-square value (1.73) is wlthin the statistically approved limit (Table

Value = 5.991) at two degrees of freedom and ninety five per cent

confidence level. Thus, the differences in the number of respondents

glving hrgher levels of importance among these three funct~ons are

just ~ncrdental In the present study and establishes that the Small Scale

entrepreneurs perceive these functlons as equally Important. Though,

the respondents have not assigned undue importance to the marketing

function, it can be said, basing on the average scores, that the shift

in thelr orientation has been initiated. But, ~f the lndlan Small Scale

entrepreneurs do not achieve greater pace In understanding and

practlclng the orientation shift, they may eventually have to taste the

bitterness of the rnarketlng failures.

The importance assigned to the Personnel and Research & Developmeni

functions IS rather alarming, as majorlty of the respondents do not

ascribe the due Importance to these funct~ons. The average score

for the Personnel function is 3.01, denoting moderate importance

and for Research & Development function, the average score is 2.53

denoting less than moderate importance. The Small Scale entrepreneurs

should be made to understand the importance of these funct~ons in

maintaining and enhancing their respective competrtive advantages.

3.4.2 KEY MARKETING FACTORS :

The respondents are also asked to spec~fy the level of Importance they

assign to each of the different marketing assets and operating resources.

The responses are noted on a seven point semantlc scale with end

polnts defined as Lowest lmportance ( I ) and H~ghest Importance (7).

The figures in the parentheses are the score polnts given to the respective

Scale pOlntS In the flnal analysis of the data. Table 3 4.1 presents the

responses to the question in frequency dlstrlbutlons and the respective

average scores for each of the market~ng resources. Depending on

the average scores, the first four places In the list are occupled by

Physical Distribution faci l~t~es, Dlstr~bution Channels, Brand Namellmage

and Market~ng Knowledge and Expertlse. Among these four marketing

resources, when the cumulative frequenc~es of the last two scale points

6 and 7 are cons~dered, Physical D~stributlon facrl~ties IS st111 at the

top and Market~ng Knowledge and Expert~se 1s at the bottorrl of the

1st. But,. Brand Namellmage has risen to the second posltlon by

d~splacing Dlstr~butlon channels to the th~ rd position. A Chi-square

test 1s conducted on these cumulat~ve frequenc~esforthese four marketing

resources, to ~dentlfy whetherthe d~fferences In the levels of Importance

assigned to these marketing resources are apparent. The calculated

Chi-square value (5.917) is not statistically s~gniflcant at three degrees

offreedom and .05 significance level (Table value =7.81). Th~sestablishes

that the differences in the respondents' perceptions are rncidental to

the study and are not really existing. Thus, these four marketing

resources may be distinguished as the Key Marketing Factors for the

Small Scale Sector of Cosmetics & To~letries and Processed Foods

industries. Key marketing factors are those activities which have

high influence on the marketing success of an organization. In

other words, these activltres are to be performed to their best In order

to out compete the competltorsl The other marketing resources are

not included in the category as the average scores and the cumulative

frequencies on scale polnts 6 and 7 are relat~vely very low for all the

other marketing resources. A brief d~scuss~on of the results on these

marketlng resources IS followed.

3-43 IMPORTANCE OF OTHER MARKETING RESOURCES:

The other marketrng activities l ~ k e Sales Promotion Programs, Advert~s~ng

and Sales Force are considered to be relat~vely unimportant, by majority

of the respondents. This stature requires ~mmed~ate attentlon from the

Small Scale entrepreneurs and they should understand the changiny

role of these marketing activltles In the dynam~c competitive environment.

The role of Advertising is no more only to inform the custorners about

the avallabllity of the product, but also to tell the custonler as to why

he should buy only the specifled brand. S~mllarly, the sales representatlves

1 Jorge Vasconcellos e Sa. 1988. OP ell . Pg 55

are perceived as boundary persons between the organrzatron and the

customers, with effrcie,nt skills to nurture long term relationshrps between

them. Further, otheractivrtres like Marketrng Research Programs, Order

Booklng agents, and Personal Sellrng facilities are cons~dered to be

least important by majority of the respondents. Thls again IS an alarming

situation. Small Scale manufacturers with Iimrted scope fortherr operations,

cannot aspire for leadersh~p In the nation-wide markets, but they may

always endeavor to attain and marntain thelr leadershrp In the local

markets or nrche markets. This can only be achieved when the flrms

update themselves about the changing needs of the custorners, tlierr

buying behavror, and also develop a personal relatronstirp wrth the

customers. These in turn can be achreved through varred marketrng

research programs, establishrng personal selling networks and so on.

Thus, these actlvrtres cannot be consrdered as less rmportant than the

other marketing activit~es. The Small Scale entrepreneurs are to be

Infused with the long term benefrts of these marketing actrvrtres.

3.4.4 MODE OF MARKETING :

The most popular mode of marketrng that has been adopted by almost

srxty frve per cent of the respondent frrms IS "to establish a dealer

network throughout the marketplace for physically distributing

the product, and to undertake the advertising and other sales

promotionalactivities by the firm itself". The fact only emphasizes

the extent of the entrepreneurs' dependence on the dealers for physrcal

distr~bution facilities, which has been identrf~edasthefirst Key Marketing

Resource. The dealers draw thelr strengths from the fact that a greal

ma~or~ty of the Small Scale entrepreneurs are unable to develop optlrr~ally

ut~l iz the Physlcal Distribution facilities individually on therr own. If

majority of the Small Scale entrepreneurs can prove the~ r vigor in t h ~ s

regard, as done by about nlneteen per cent of the study respondents,

who "perform all the marketing activities, including Physical Distribution,

on their own ", then they can achieve higherefflcienc~es In both profrts

as well as customer satisfact~on. A third mode of marketrng adopted

by the Small Scale entrepreneurs is to give out "Propaganda-cum-

Distribution" agreements to the local agentsldealers. Here, these

local agentsldealers, ~nd~rec t ly buy the product from the rr~anufacturers

and the f ~ n a l market price is also determ~ned by them. Thus, the proflt

margins largely depend on the negotlatlng sk~l ls of the manufacturers.

3.4.5 MARKETING STRENGTHS AND WEAKNESSES :

The questionnaire Includes a question asklng the respondents to Identify

how strong or weak they are, In the nlne spec~f~ed marketrng resources

when compared to t he~ r respective competitors. The responses are

noted on a flve point semantic scale wlth end polnts deflried as Very

Weak (1) and Very Strong ( 5 ) . The m ~ d point (3) of the scale IS

defined as At Par with those of the competitors. The results are

Presented accordingly In Table 3.4.2. Though a five polnt scale is

adopted in noting the answers, the cumulative frequencies on scale

points 1 and 2 , and similarly those of scale points 4 and 5, are considered,

keeplng the mid polnt unaltered, for ease of explanation. Thus, the

followrng explanatlon 1s based on a three point scale w ~ t h Weak, At

Par and Strong as parameters.

Majority of the respo?dents (approximately fifty four per cent and fifty

per cent) perceive themselves to be stronger in Physlcal Distribution

Fac i l~ t~es and D~stribution Channels facillt~es, respectively. But, the

number of respondents who perceive themselves to be At Par with

thelr competitors In these activlt~es is also considerable (approximately

twenty three per cent and twenty seven per cent respectively). This

perception contradicts the fact that approximately s~x ty flve per cent

of the respondents do not own any physical distribution faclllttes and

rather depend on the Dealers for physically distrlbutlng the product.

But, the high response may be due to the perceptual afflnlty and

unlty between the manufacturers and thelr dealers. Whtle comparing

themselves with t he~ r competitors, the respondentsview the drstrlbutlon

facr l~t~es ava~lable w ~ t h the dealers employed by them to be more

efflclent and stronger than those ava~lable wrth the dealers errlployed

by t h e ~ r competitors.

In regard to Marketing Knowledge and Expertise, approximately

thirty two per cent of the respondents perceive themselves to be

stronger and another thirty eight per cent of the respondents perceive

themselves to be At Par with the competitors. It may be recalled

that only eighteen out of the one hundred and eleven respondents

possess a degree or certlflcate In Management Education. Further,

this asset 1s placed at the fourth position in the list of Important marketing

activities. Thus, when most of respondent entrepreneurs neither

conslder ~t as the first necessity nor have any addrtlonal qualification

In buslness management, the prevalent perception of equality In Marketing

Knowledge and Expertise may be presenting a true picture. But, the

apparent amplitude and proficiency of these Small Scale entrepreneurs

In the Marketing Knowledge and Expertise needs to be assessed by

further lntenslve research. Such research should be able to measure

the theoretical knowledge of the Small Scale entrepreneurs about the

concept of marketing and thelr ab~lltles to interpret the theory wlth

requlslte pragmatism while conducting thelr buslness actrvrtles. Excepting

in the above mentioned three rnarketlng resources, majority of the

respondents percelve themselves to be Weak In most of the other

marketing resources, specifled in the quest~on. Personal Selling and

Marketing Research are the two activit~es In whlch largest n u m b ~ r

(approximately f ~ f t y five per cent and fifty one Per cent respectlvely)

of the respondents are Weak. Otheractivitles where more entrepreneurs

perceive themselvesgs Weak are Sales Force, Advertising and Sales

Promotion programs. The results provide scope to say that most of

the Small Scale entrepreneurs perceive the concept of Marketing as

concerned with only Physical Distr~bution and Dealer-network marntenance.

The statement can draw further support from the relat~va iqoortprlces

gtven to the various Marketing activ~tres.

It may be recollected that only Physical Distr~bution and Distr~bution

Channels are the two operating resources which have been identrfied

as most Important by rnajorlty of the respondents. The other Market~ng

actlvltres have been identifled as unimportant and thus have not been

concentrated by majority of the Small Scale entrepreneurs. Advert~s~ng,

Sales Promotion and otheractiv~ties are concervedassometh~ng addrtronal

to Marketrng function, rather than as an integral part of the function.

But, in the present competrtrve Market~ng env~ronment, the product

augmentations, l ~ k e After Sales Serv~ce, Sales Promotion Programs,

Market~ng Research and Personal Selling and so on, play major

influence on the success of the product.

Moreover, the orientatron w ~ t h wh~ch most of these actrv~t~es are

Performed, IS also changing. Thus, the Small Scale entrepreneurs

may have to be appraised of these changing roles and relatlve importances

of various Marketing Activrties In the success of a product. T h ~ s enables

them to endure the shift in the or~entat~on of the concept from customer

need identification to maintaining long-term relationships' with

them.

1 Chr~st~an Gronroos, 1990. OP

1 44

3.4.6. GENERAL MARKETING PROBLEMS :

The marketlng problems of the Small Scale entrepreneurs have been

a focus area in many of the studies on the sector. Some of the

studles have even addressed the speclflc marketlng problems of selective

Industries, products, firms or geographical markets'. Though, study~ng

the marketing problems of the sector is not a major objective, the

study attempts to identlfy the major market~ng problems for which

Symb~otrc Marketlng strategy may be a potentla1 answer. A total of

e~ght problemsare presented to the respondents through thequestionnarre.

These are presented In eight separate statements, describ~ng the

problems and Inadequacy of funds as the cause for the problems.

For example, the problem relatrng to advertrsrng IS stated as "Advert is~ng

has becomeso expensive that we (focus firm) cannot undertake aggressive

advertising a t par wlth the compet~tors". S~milarly, the other problems

relating to Dealers, Sales Representat~ves, Marketing Research, Sales

Promotion and Resource Development areas are presented in the other

statements with cost element highl~ghted as the source of the problem.

The responses to each of the problem statements are noted on a three

Point nomlnal scale defrned as : Not a problem ( I ) , Minor problem

1 R R N A t a r ~ ~ R l l . (3 Kr1~11r la M l ~ r l l i y n ~ ~ d K V . ln~i : r~c l l~n~rn nno 1985, ' Hehabilflation of Sfck urtlts 111 SSI Sector through Market~ng Strategy - A case Study", lnd~an Journal of Marketlng, XV, 7, pp13 - 16 & 20

b S K Pant, and Arvlnd Kurnar Slngh, 1985. Marketfng problem of perishables in the hf l l Regions of U P A Case study of

cham011 D is t r~c r , lnd~an Journal of Market~ng, XV, 5 pp, 27.30

(2) and Major problem (3). The results of the study are presented

through descriptive Statistics followed by a brief discuss~on.

Basically, four of the e~gh t stated Problem have been ldentlfled as

Major Prob lem by considerable majorlty of the respondents. For

example, the problem siatement explarning the cost h ~ k e s lnvolved

in advertislng has recelved h~ghest positive response (approximately

f~f ty SIX per cent) as a Major Problem. Another twenty three per

cent of the respondents stated this as Minor Problem. But, only

about nineteen per cent of the respondents cons~der the Increasing

costs of advert~sing as Not a Problem in t he~ r business operations.

Thus, the potentla1 for advertislng 1s largely l~mited by the cost hikes

and scarc~ty In the operat~ng resources in finances. So, Advertlsrng

may be identified as a realizable source for developing Symbiosis.

It can be generated by jo~ntly advert~sing the product through space-

shar~ng or time-sharing, so that both the products can be exposed

to the targets simultaneously. An Ideal example for Advert~s~ng Symblosls

1s the televis~on advertisement given by Procter & Gamble lndla L~mlted

In promoting their product ARlEL as the most preferred detergent for

washlng MAFATLAL Fabrlcs. A k ~ n to thls, Hindustan Lever L~rnited

has promoted its Surf Ultra as the suggested detergent for use with

Vldeocon Washing Machines. Here, thetarget ~~StoInerSare simultaneously

exposed to both the products. S~m~lar ly, the Small Scale entrepreneurs

also can practice Advertlslng Symbiosis by sharlng the space in print

media or time In viewing media, which can reduce their financial

commitments for their advertising activltles.

The problem statement "Develop~ng a Marketing fac111ty on our (focus

firm's) own is becomlng d~ff icult for the financial constraints", has been

stated as the Major Problem by approximately forty SIX per cent of

the respondents. But, approximately twenty six per cent of the

surveyed entrepreneurs perceive this as a Minor Problem, whereas

another twenty flve per cent of the respondents do N o t consider thls

as a Problem The reason has already been duly explained wh~le

discussing the reasons for cooperative practices in the earlier section.

The third Major Problem as Identifled by approxlmately forty four per

cent of the respondents is stated as "Promotional programs requrre

huge amounts of money wh~ch we (focus firm) are unable to mobrl~ze':

At the same tlme, thirty two per cent of the respondents conslder thls

as only a Minor Problem and another approxlmately twenty one per

cent do N o t state this as a Problem. As mentioned earlier, the above

statement also explains the reasons, speclflcally non-avallab~lity of

funds, for therr not conduct~ng the promot~onal prograrrls. Tllus, at

least for cons~derable number of Small Scale entrepreneurs, Pronlotlonal

programs form a conceivable source of Symblosls generatton. Here,

the flrms can pian forjoint promot~onal programs by sharing the Involved

expenditure. This allows the entrepreneurs to promote more sales

programs within the budgeted flnanclal resources.

The problems relating to the Sales Force llke h igh rate o f employee

turnover due t o l ow salaries and the high costs involved i n impart ing

training t o t he sales force have not been properly responded and

those who responded, have also identifled these as e~ther only a minor

problem or not a problem. Thrs stature may be due to the earher

denti if led facts that majority of the respondents are Weak and do not

give adequate importance to Sales Force, which In other words mean

that they are not fully equlpped in thisfacllity. Thus, until they develop

an adequate Sales force, these problems may not hold any valldlty

for them. Yet another Issue considered as Not a Problem or Minor

Problem by a major~ty of the respondents is "the h igh rates of

commission demanded by the Dealers". The perception contradicts

the popular argument that the Small Scale entrepreneurs are squeezed

by the Dealers. In fact, the Small Scale entrepreneurs do not feel

any 'exploitation' by the dealers through high rates of commission.

They may perceive that the services prov~ded by the dealers may

compensate the h ~ g h rates they are demanding. Or that the rates

are accepted as p reva~ l~ng In the markets, i.e. when all the dealers

are charging almost s lm~lar rates, fluctuat~ons to the extent of +I- 1

or 2 percent, may not be cons~dered as an effort to explolt them. Apart

from th~s , the respondents expressed a m ~ x e d opin~on on the problem

relating to the "exorbitantly high charges of professional Managerial

consultants for conducting Marketing Research programs. This

shows that atleast some of the Small Scale entrepreneurs have ldentlf~ed

the need for p r ~ f e ~ ~ l ~ n a l marketing researchers, but unable to employ

them for high financial requirements. Symbiosis helpsthese entrepreneurs

to comblnedly hlre professional management consultants for rmproving

the efficiency of thew bus~ness operations.

3.4.7 MARKETING EXPENDITURE :

The study further collects the prellmlnary information about the marketing

expenditures of the respondent flrms. The expend~ture 1s mainly

collected under six major heads. The collected expend~tures are as

percentage to the total sales turnover of the respective organlzat~on

Init~ally, the total approx~rnated market~ng expend~ture is noted on

a SIX point scale, each scale point denotlng a spec~ f~ed range of

expenditure, In another quest~on, the respondents are asked to provlde

a break-up of such expend~ture Into six major heads of marketing

expend~ture l ~ k e Dealers' Comrnlss~on, Advert~sing and Sales Promotion,

Product Improvement Research, Marketing Research Programs, Sales

Force and Physlcal Dlstrlbution Only approximate figuresare collected

to escape the distrustful feelings of the respondents that force them

to provlde erroneous information.

The annual marketing expenditurefora great majority of the respondent

flrms range from sixteen per cent to forty per cent of thew respective

annual sales revenues. Only about thirteen per cent of the flrms spend

less than ten per cent of their sales turnover on market~ng activities

and another eight per cent flrms budget more than forty one per cent

of their sales volume for marketing the~ r products. Of the total sample,

approxlmately fifty one per cent of the respondents have prov~ded the

break-up of this marketing expenditure into the SIX specifled marketing

heads. The other forty nlne per cent of the respondents refused to

dlsclose this lnformatlon, for basically two reasons. Firstly, they feel

that this Information is confidential and so cannot be disclosed, especially

the commisslon given to t he~ r dealers and the expend~ture on the Sales

Promotlon activities. Secondly, some of the respondents have never

thought of this expend~ture break-up, and are unable toeven approxlrnately

quote these figures. They spend money on d~fferent sales promotion

and other related activities when they feel the need, through subjective

judgment. In otherwords, they are reactive to theirccmpetltors' actions

or to the deter~orat~ng sales of their product for a long time. The

average values (in percentages) are presented in Table 3.4.3.

The validlty of the results is not fully assured, because only approximated

flgures are collected. But, the pattern of marketing expendlture exhlblted

In the table is exactly in accordance with earl~er results of the study.

More specifically, the respondent entrepreneurs expend more budgets

on the key marketing activities, i.e. Physlcal Distr~butlon Facilities and

Distribut~on Channels. Whereas Advertising, Sales Promotlon programs

and Sales Force have obta~ned moderate scores on both importance

and expendi ture Scales. Similarly, Product Improvement Research

programs and Marketing Research activities have not been considered

as important on both the dlmensions. Thus, though the volume of

marketing expenditure may not be completely reliable, the results

on importance and expenditure measures cross validate each other.

From the above discuss~on on varlous Issues of the marketing of

function, it can be concluded by saying that the Small Scale entrepreneurs

have not accorded the shlfts in the current competitive marketing

env~ronment. Unless, they comprehend these shifts, and adopt lnnovatlve

marketing practices, they will have to be conta~ned w~th regularly shrinking

markets for t h e ~ r products.

3.5 CONCLUSION :

The chapter has presented the results on profile of the sample, thelr

Past alllances in ~nter- f~rm cooperat~on and their contemporary market~ng

PraCtlCeS. The characteristics, l ~ k e Management Style, Industry Sector,

Number of Products manufactured, the employees strength of in the

firms Respondent Type, Age Structure, Academ~c Background and

Practical Exper~ence of the respondents, enable to assess the pertinence

of the sources of the prlmary data. The analysis on the past alllances

of the firms is also presented In the chapter. Wh~le dlscusslng the

Contemporary market~ng pract~ces, it IS concluded that major~ty of the

Small Scale entrepreneurs still belleve In "qual~ty/product" concept and

perceive "market~ng" to be synonymous w~th physlcal distrlbut~on actlvitles.

This develops the basis for proceed~ng to the discussion on the results

relating to the focal objectives of the study.