A STUDY ON CUSTOMER PERCEPTION AND MARKETING ISSUES OF COTTAGE INDUSTRY PRODUCTS IN MADURAI DISTRICT

DR.S.SEKAR,

Asst. Prof, Dept. of Business Administration, Govt Arts College, Dharmapuri.

J.PARWIN,

Research Scholar, PERIYAR University, Salem

R.VIGNESH (corresponding author)

Asst Prof, Dept of Business Administration, PVP College, Singarakottai

email:

Abstract:

The purpose of this paper is to discover the customer perception and marketing problems faced by cottage industry products in Madurai District. A survey was conducted through structured questionnaire and data were collected from 141 female and 112 male customers about the cottage industry products with a response rate of 84 percent. The data is analyzed using non parametric variance analysis and t-tests. The findings are listed and suitable recommendations were pointed out.

Key words: Cottage industry products, Mann Whitney test, Kruskal Wallis test

Introduction:

A cottage industrybusiness is the creation of products and services that are home-based rather than being manufactured in a factory. The appeal of buying from a cottage industry manufacturer is that the consumer can receive a unique, one-of-a-kind, hand-made product that isn't mass produced. Many consumers also appreciate the human-aspect to home-based created products and services and feel that the majority of these cottage industry services produce a higher quality product than one that is mass produced.

The main attractiona home-based business brings to the creator is the ability to dictate working hours, develop an item or service of interest, and sell the product or service for a higher profit margin.The downside of cottage industry produced goods for both the consumer and manufacturer is a slower production of product and less opportunity to compete with larger brands.

According to Ahmed, S. F. (1989) Market is the ultimate destination of all industrial concerns whether small or big where the produced are being bought and sold (S.S.Khanka, 1994). Marketing is a broad process of linking the gap between the producer and consumer. The vital role of marketing in accelerating industrial development lies in selling the goods and services produced by these units. The goods have no value for the manufacturing units unless these are sold. Stanton found that Marketing is a tricky technique involving detection of what the consumers wants, then planning and developing a product or service which satisfies those demands and ultimately determining the best way to price, promote and distribute that product. The expertise of entrepreneurs in marketing their product plays a vital role in the success and growth of his enterprise.

Marketing has been identified as an important aspect affecting the performance of small scale industrial sector and which is the key element, if not practically assessed leads to sickness and ultimately closure of the units. But Market analysis is almost absent in small scale sector which leads to failure in marketing the products. Many problems which the SSI units face in marketing their products related to lack of demand, poor quality and design, poor bargaining power, poor service to customers, brand preferences and ignorance of potential market areas, etc.

Review of literature:

Products are assessed on various attributes in relation to what consumers consider most important. The cottage industry product attributes are identified under three titles as price, quality and value respectively. But, different product attributes are included in product evaluation by different researchers. Traditional products are cheap at the place of production but it becomes costlier in the hands of middlemen, which ultimately affect the market demand of these products. Moreover due to high transportation cost and high wages etc. the cost of production is higher as compared to the male areas than female areas. It is observed during the field survey that majority of the entrepreneurs are not aware of the market survey of their products. According to Desai.V. Weak financial base and poor bargaining power small scale industrial units required to utilize the services of middlemen to get raw materials on credit. Such an arrangement results in higher costs due to the high margins of the middlemen.

The availability of raw materials has been a major problem in our country. Some of them are very scarce at times and abundant at others causing great price variations. There are often artificial shortages created by dishonest manufacturers and suppliers to rig the prices up. This is particularly true for small scale and cottage industries. Bad conditions of road networks and communication system especially during rainy season leads to uncertainties in the procurement of essential raw materials and construction materials from outside which creates artificial shortages. Due to their limited resources, the owners of cottage industries cannot afford to purchase raw-material in bulk. That is why they get low quality materials at high rates.

Industrial production requires not only machinery and equipment but also skilled manpower, management, energy, banking and insurance facilities, marketing facilities, transport services which include railways, roads and waterways, communication facilities, etc. All these facilities and services which facilitate industrial and agricultural production and accelerate the overall economic development of a country constitute collectively the infrastructure or economic and social overheads of the economy. Efficient, cheap and quick means of transport of wide varieties is essential for the expansion of trade and commerce.

According to Aziz, A. & Babu, M.D. (1997), Power and electricity is the basic infrastructure around which all economic activities moves. The degree of economic growth is highly related with the generation and consumption of electric power. Growth of industry in a particular region depends upon adequate and uninterrupted power supply. Power shortage, power shutdown and power cuts could paralyze industrial activity, throw thousands of workers out of job and cause inconvenience to consumers. Issue like the geographical location, land distribution, climate, social setup etc stands as a combination of obstacles towards industrial development. Capital, technical knowledge and entrepreneurial spirit, which are the backbone of successful cottage industry.

3. Methodology

The present study is descriptive in nature. The product attributes related with the quality dimensions for cottage industries are selected as lack of demand, poor quality and design, poor bargaining power, poor service to customers, brand preferences and ignorance of potential market areas. The socio demographic factors included in the survey are gender, age, education and income. A questionnaire is prepared and data were collected through convenient sampling method from female and male areas of Madurai District. Questionnaires were given to 300 respondents and 274 filled questionnaires were collected later. After excluding 21 inappropriate questionnaires, 253 were used(Female-141; female 112) for the analysis; this yielded an effective response rate of 84%.The results are subjected to the reliability analysis and the Cronbach’s alpha is found to be 0.872. The favorable quality attributes are discovered using the mean and the standard deviation. The relationship between the socio, demographic factors and the product attributes are found out using the Kruskal Willis and Mann Whitney test.

4. Results and Discussion

The age stretches out between 21 to 45 among the respondents, 37% of whom are female. The largest group (36-45) is composed of 79 people in female and 51 in male followed by (26-35) including 38 people in female and 23 people in male areas. 22% of the respondents belong to the lowest income class where only 13 % of the respondents are in the highest income earners. Regarding the education level, 22% of the respondents state that they are graduate. 51.6 percent of the respondents are married. 39 percent of the respondents are having joint family and the family members are working in their own cottage industry.

Table 1- Attitudes of the consumers towards cottage product’s attributes

Male / Female
Constructs / Mean / Standard
Deviation / Mean / Standard
Deviation
Product suitable to latest trend / 3.720 / 0.9826 / 3.970 / 1.0160
Brand name & Image of the product / 4.214 / 1.3602 / 4.253 / 1.3848
Quality of the product / 4.656 / 1.3509 / 4.405 / 1.2806
Price of the product / 3.630 / 0.9042 / 3.728 / 0.9268
Expectation- fulfillment / 4.128 / 1.0953 / 4.323 / 1.4512
Product performance / 4.476 / 1.5805 / 4.175 / 1.5520

From the Table 1, the important cottage product attributes considered by the respondents are Brand name & Image of the product, Quality of the product, Customer expectation- fulfillment and Product performance. Quality of the product is the most favored attribute with a mean of 4.656(male) and 4.405(female) customers. Price is the least bothered factor by the customer respondents.

Table 2 - Mann –Whiney test results for Male –female factor:

Constructs / Mann –Whitney test ‘U’ / Wilcoxon
test / z / Asymp.sig
(2-tailed)
Product suitable to latest trend / 23.500 / 51.500 / -2.788 / 0.027
Brand name & Image of the product / 40.000 / 145.000 / -3.004 / 0.001
Quality of the product / 46.500 / 74.500 / -2.516 / 0.043
Price of the product / 42.500 / 127.000 / -2.737 / 0.036
Expectation- fulfillment / 47.500 / 152.500 / -0.442 / 0.909
Product performance / 38.500 / 143.500 / -1.12 / 0.067
Durability / 37.420 / 117.790 / -2.378 / 0.045

The relation between customer location (male or female area) and product attributes is evaluated using Mann-Whitney test. A significant relation is found between location factor and the attributes of cottage products. Specifically, female participants are more alert than male respondents. More female (39%) respondents state that they prefer quality products. 47% of the female respondents said that they knew the price of the product and 60% of them said that performance of the product is high. More male 42% than female 27% state that product suitable to latest trend was one of the important factors in making purchasing decision.

Regarding the expectation -fulfillment, both female and male respondents confirm that it is one of the important concern for them. Nonetheless, female respondents found to be more careful about the durability (47%), availability (38.7%). 56.9% of the male respondents are brand conscious.

The age factor

According to Table 3, a significant relation is observed between age factor and the attributes of cottage industry products with a significance level p =<0.05 in the Kruskal Wallis test.

Table 3: The Kruskal Wallis test results for age factor

Constructs / Chi-Square / df / Asymp. Sig.
Product suitable to latest trend / 18.634 / 2 / 0.009
Brand name & Image of the product / 17.844 / 2 / 0.087
Quality of the product / 21.458 / 2 / 0.001
Price of the product / 19.036 / 2 / 0.093
Expectation- fulfillment / 2.57 / 2 / 0.909
Product performance / 1.27 / 2 / 0.260
Durability

a. Kruskal Wallis Test b. Grouping Variable: age group

The age group of (36-45) is found to be loving of purchasing known brands followed by the age group (26-35) with the percentages of 36% and 47%. The selection of branded products by the age group is influenced by the TV advertisements and sales promotions. On the other hand, 21% of the age group of (18-25) prefers the brands for brand name and image. Although the age group of (26-35) is more interested in quality, only 21% of this group answers positively to the question of “I would like to buy only the quality product”. Nonetheless, 27% of the age group of (36-45) said, they were interested in looking product performance.

The education factor:

Table 4: The Kruskal Wallis test results for education factor

Constructs / Chi-Square / df / Asymp. Sig.
Product suitable to latest trend / 13.63 / 3 / 0.029
Brand name & Image of the product / 15.844 / 3 / 0.017
Quality of the product / 25.458 / 3 / 0.001
Price of the product / 9.036 / 3 / 0.079
Expectation- fulfillment / 12.575 / 3 / 0.059
Product performance / 7.273 / 3 / 0.001
Durability / 12.503 / 3 / 0.062

a. Kruskal Wallis Test b. Grouping Variable: Education level

The relation between the education level and the product attributes, latest trend, Brand name & Image and Quality are statistically significant as seen in Table 4. Less than SSLC qualified participants matched with the Expectation- fulfillment (37%) and price of the product (51%). On the other hand, the performance and quality factors related with the workmanship are favored by the Post graduate levels. For instance, 44% of the PG and 29% of the Graduate respondents take care of quality while purchasing. Regarding the relation between the brand and education level, the respondents with lower education level prefer buying unbranded. Higher educated people prefer to buy the products in the products with brand name & image.

The income factor:

The income factor is in a statistically significant relation with the product attributes.

Table 5: The Kruskal Wallis test results for income factor

Constructs / Chi-Square / df / Asymp. Sig.
Product suitable to latest trend / 10.207 / 3 / 0.051
Brand name & Image of the product / 12.620 / 3 / 0.025
Quality of the product / 19.190 / 3 / 0.001
Price of the product / 8.996 / 3 / .0.089
Expectation- fulfillment / 9.204 / 3 / 0.071
Product performance / 22.020 / 3 / 0.001
Durability / 11.390 / 3 / 0.039

a. Kruskal Wallis Test b. Grouping Variable: income level