International Journal of Science and Research (IJSR)

ISSN (Online): 2319-7064

Index Copernicus Value (2015): 78.96 | Impact Factor (2015): 6.391

Review of Marketing Strategies of KVIC

Rachna Yadav
EAFM Department, Rajasthan University, Jaipur

Abstract: The purpose of the current study conducted was to find out the new evolving strategies taken by the government to revamp
the Khadi stores .The paper reviews and understand the marketing strategy adopted by one of the major organizations in the
decentralized sector. The paper tries to bring forth the journey taken by the name Khadi since its inception for till its evolution.

Keywords: KVIC, Sales and Marketing strategy, Branding, Initiatives

1. Introduction  1953: All India Khadi& village Board (AIKVIB) was

established in January of 1953.
Mahatma Gandhi said “The spinning wheel is like swaraj  1956: Khadi and Village Industries Commission Act 1956
(self-rule), “Khadi is our birthright, and it is our lifelong was passed 1957: Khadi and Village Industries
duty to use that only. Anyone who does not fulfill that duty is Commission came into being.
totally ignorant of what swarajis to me it represents the
hopes for the masses “ KVIC functions under the administrative control of the
Ministry of Micro, Small and Medium Enterprises (MSME),
The Quit India movement in the year 1942 was the begul Government of India.
against the Britishers and was the movement through which
Mahatma Gandhi introduced the use of Swadeshi items and 2. Objectives of Setting up KVIC
thus the spirit of Khadi was born. It was institutionalized by
Mahatma Gandhi as a fight against foreign goods and the KVIC was set with specific objectives in mind , the main
indirect target being the Britishers and their product .The aims are depicted in the figure below:
vision was to take rural India into the folds of Indian
Economy and create a brand that will be worn by the masses
and make India self-reliant. In 1920 during the session held
at Nagpur Congress decided to introduce Khadiand thus the
journey of KVIC began. The first Production unit was
established at Katiawad, Gujrat. Mahatma Gandhi used to
refer to Khadi as “the livery of freedom .Khadi movement
gained popularity and in the year 1948, new India
Government recognized the role of Rural Cottage Industry.
It was made a part of the 5 year plan and KVIC was
recognized as a cottage industry. The Khadi and Village
Industries Commission (KVIC) is a statutory body Social Objectives: The main aim of the government was to
established by an Act of Parliament (No. 61 of 1956, as set up an organization which will facilitate employment
amended by act no. 12 of 1987 and Act No.10 of 2006. In generation for the youth . India‟s 70 % of the population and
April 1957, it took over the work of former All India the economy depended on agriculture when we got freedom
Khadi and Village Industries Board. and agriculture being depended on the monsoon which was
unpredictable the government thus encouraged alternative
The KVIC act was amended in the year 1987 and Rural area ways of earning so that there is work and earning all the year
and Village Industries were defined under this Act. A wide round . KVIC main objective was to open new avenues of
range of scope was created for Village and service earning.
industries. The industries was to be set up in the Rural area
where people can have dual source of income one Economic Objectives: India has mixed economy and is
agriculture produce and the other by producing products for basically dependent on Agriculture but is also blessed with a
Cottage industry which also use agriculture produce. rich heritage of Art & Craft .Every region of each state has a
different culture which can be nurtured and made
Chronological order of Khadi and its journey economically viable to be sold. The government realized the
 1920 Khadi introduced as a National tool for Swadeshi potential and decided to strengthen the community and thus
Movement ,in the Nagpur session of All India National massive initiatives started with government intervention
Congress meeting
 1923: Development of All India Board India National Self-Reliant Community: KVIC was also charged with
Congress by Ghandhiji building a strong force of artisans by training and funding
 1925: Setting up of All India Spinners Association ( them. The aim of the government was to work for the people
AISA) / Akhil Bharat Charkha Sangh by the people so they strengthen the communities made
them self-reliant thus strengthen the economy .
 1935: All India Village Industries Association (AIVIA)
was formed.
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Paper ID: ART20163450 568
 International Journal of Science and Research (IJSR)
ISSN (Online): 2319-7064
Index Copernicus Value (2015): 78.96 | Impact Factor (2015): 6.391
To achieve the Objectives, KVIC undertakes Background to the Marketing strategies
Khadi is the base of Indian struggle for freedom and still it
a) Financing of eligible agencies like small scale cottage constitutes 1% of textile market. The textile industry has
industries, artisans and individual ventures in rural area grown at a tremendous speed with bring in new technology
that helps in promoting village industries. and fabrics on the other hand Khadi has not done well and
b) To plan, organize, promote development of khadi and the main reason for it are
village industries in various arenas, specially rural areas.
It also coordinates with small scale industries for the Infrastructure & Process
promotion of rural artisans  Old dilapidated retail outlets
c) To encourage and promote research in the methods of  Outdated equipment
production techniques of the various products of item  Lack of infrastructure
sold at the outlets so as to facilitate better growth of the  Fragmented Institution
products.  Labour intensive
d) training of persons employed or desirous of seeking  Legislative interference
employment in khadi and village industries, supervisors
and other functionaries; Product
e) Building the reserves of the materials which help and
 Limited product range
facilitate the rural artisans and industries ;
 Emphasis on product development rather customer
f) Promotion of sale and marketing of khadi and village
preferences
industries products;
g) It also sets standards of quality of products.  No understanding for customer preference and profiling
h) Promotion and encouragement of cooperative efforts  Poor product packaging
among the persons engaged in khadi and village  No quality check of products.
industries, etc.  Not properly stocked

3. KVIC New Initiatives Marketing & Sale Strategies

 Poor customer service and experience
1) Prime Minister's Employment Generation Programme  Lack of apperception from the customer
(PMEGP) PMEGP is a credit-linked subsidy Programme  Most sale and promotional activities are done around
launched by Ministry of MSME in 2008-09 for creation Gandhi Jayanti
of employment in both rural and urban area of the  Lack of training in business methodology
country.  Lack of awareness among the buyers
2) SFURTI is a Scheme of Fund for Regeneration of  Very less Marketing strategies
Traditional Industries Ministry of MSME has launched  Not recognizing the competitors and the fashion trends
this scheme in the year 2005 with the view to promote  Emphasis on product development rather customer
Cluster development. KVIC is the nodal Agency for preferences
promotion of Cluster development for Khadi as well as  No Branding of the product
for V.I. Products.  No internet presence of the products
3) MDA is promotion assistance for development of Khadi.
MDA is paid at 20% on Production. Out of the MDA, Marketing strategies adopted recently by KVIC:
paid to the institution 25% goes to Artisans as direct Marketing strategy includes all basic, short-term, and long-
incentive, 30% to institution for production and 45% for term activities in the field of marketing that deal with the
marketing. analysis of the strategic initial situation of a company and
4) Interest Subsidy Eligibility Certificate Scheme is the formulation, evaluation and selection of market-oriented
applicable for all registered institutions of KVIC or strategies and therefore contribute to the goals of the
KVIB for strengthening of production of Khadi & V.I. company and its marketing objectives.
Under this scheme, bank loan at concessional rate of 4%
interest p.a. can be availed by institutions. The Marketing initiatives taken by Khadi to increase sales
5) KRDP: The Government of India and the Asian are as below:
Development Bank (ADB) signed the loan agreement for 1) Product Development: New products have been
the $150 million for Khadi Reform and Development launched after a lot of thought and research so as to
Program (KRDP) on 22nd December 2009 in New Delhi. promote the products of Khadi that are based on the
6) Digital KVIC: has been launched by Directorate of IT, concept of sustainable development. As the World is
wherein every Directorate/Field Offices have been given moving towards a more sustainable and eco-friendly
access by providing user name and password to all environment it has become imperative to promote more
concerned Officers. of Khadi Products as they are all natural and hand made
7) KVIC training:is imparting Skilled Development products. The products offered by KVIC range from
training to youths. Creating entrepreneurs and creation of Khadi, fiber leather, cane bamboo, agarbatti, processed
self-employment opportunities are the central objectives food products, honey and handmade paper. The sale is
of skill development training. looking up in the last few years cause of the change in
ideology.
2) Increase in number of Sale Outlets: Most of the sale
happens from the Khadi outlets or franchise shops. KVIC
Volume 5 Issue 12, December 2016
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Licensed Under Creative Commons Attribution CC BY
Paper ID: ART20163450 569
 International Journal of Science and Research (IJSR)
ISSN (Online): 2319-7064
Index Copernicus Value (2015): 78.96 | Impact Factor (2015): 6.391
has 7051 own stores and 2230 NGOs referred to as 6) Modernization of stores and upkeep of stock: In a
Khadi Institutions (KIs) across the country through globalized world it where technology and modernity are
which it sells its products. It also sells through the the key for success, it is important that KVIC also
franchise stores. The franchise stores can be partly improve its stores. In the new millennium the
owned by KVIC at times and some are completely government is renovating the stores and is giving them
independent. One of the new options which has recently the look of a modern showroom. Stock is what pulls the
been introduced is to have small counters in a shop customer to the store so the journey from the artisan to
which has Khadi products. A pictorial representation in the store has been improvised and is faster.
given below 7) Fashion trends and branding: Few years ago, KVIC
has engaged ace fashion designers from the industry to
give a new avatar to its product , which has bought about
a huge difference in the sales of Khadi items In order to
improve the quality of handcrafted Khadi, KVIC has tied
up with the National Institute of Design (NID),
Ahmedabad; „Dastakar‟, Andhra Pradesh; IIT, Delhi; and
Textiles Committee, Mumbai
8) Logo and trademark: In the month of November of
2014 the MSME moved to register the logo of Khadi and
Village Industries Commission (KVIC) 'Khadi' as a
'word mark'. It has also sought legal opinion to seek
geographical indication. The logo speaks of the brand
and its identity and it also forms a direct link with the
customer. The trust that people have on Khadi product
1) Exhibitions: As a part of the marketing and promotional strengths once the Logo and trademark are there on the
activities the government sanction funds for conducting products.
exhibition activities either through KVIC or its allied 9) Tie up with Local brands: Khadi being the National
sister concerns . Since 1990 the government has put cloth has decided to integrate and tie up with the local
various exhibitions at district level, zonal, state and Indian market key notch players in Textile, craft and
national level . This helps in selling products and also hand made products. The main players in the market
spreading awareness about genuine Khadi products. being FABINDA and RAYMONDS .They have already
These exhibitions also help the artisan to display their agreed to devote a section to Khaki outfits in about 600
products thus resulting in employment and also of their outlets. These designs would have a khadi mark
liquidating the products of Khadi. on them and sold under a new label name, like for
2) Bulk Sales: KVIC‟s one more innovating way isto make example, Fabindia will be selling these products as Khadi
Bulk Sales to companies who can use the products for marketed by Fabindia.
CSR activities. 10)Training of KVIC personal : In the competitive world
3) Promoting Khadi brand in government offices: The good customer relation are important , training doesn‟t
government has taken initiatives to increase the sale of mean training the front desk staff but an overall training
Khadi by enforcing government employees in certain to be imparted to each department including IT , Finance,
ministries to compulsory wear Khadi clothes. The HR etc. Training should touch all the employees and
government is thinking to make Khadi compulsory to update tem with latest tools and technology and the
wear on Friday in government offices. The present required skills to handle the products and the customers.
government in its campaign of Make in India is making a 11)Technological intervention: The failure of an
lot of attempt to make Khadi the brand of India. In its organization also depends on its inability to maintain the
new endeavor KVIC is also promoting Khadi clothes in inventory / stock, raw material, production and sales
schools and colleges. statistics. The government has recently taken out a tender
4) Up gradation of exports performance : To promote to invite technology companies for the Design,
KVIC products globally the government encourages Development, Installation, Implementation and Support
artisans and KVIC personal to visit abroad for for Integrated Financial Management System (IFMS).
participating in international trade fairs/exhibitions and Delay in approvals and process in the government
sales cum-study tour etc. department has led to the digitalized of all the process
5) Increase of credit flow: The Union Government through from stock inventory to payment. It will also help in
the Ministry of Micro, Small and Medium Enterprises, connecting all the outlets, production house across the
provides funds to KVIC for undertaking its various country through one payment process.
activities under Plan and Non-Plan heads. These funds 12)Categorization system modified in 2014 under KRDP to
are provided primarily by way of grants and loans, which strength the KI‟s ability to perform. Categorization is
the Commission in turn re-allocates them to its now based on Performance based ability which is judged
implementing agencies, namely the State KVIBs, by Financial Capability, Artisans, operationally,
institutions registered under the Societies Registration Governance and Compliance and empowerment. We
Act, 1860 and cooperative societies registered under the understand that categorization also helps KVIC in
Cooperative Acts of the State Governments, assessing KI‟s eligibility for new schemes.
implementing banks, etc 13)Accreditation of KVIC Products: KVIC has also taken
out tenders to engage agency for the accreditation of its
Volume 5 Issue 12, December 2016
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Licensed Under Creative Commons Attribution CC BY
Paper ID: ART20163450 570
 International Journal of Science and Research (IJSR)
ISSN (Online): 2319-7064
Index Copernicus Value (2015): 78.96 | Impact Factor (2015): 6.391
product and to provide certification to the agencies and  Promotional material needs to more creative and
industries involved in the production of its products. This professional. The pamphlets to bags to hoarding and flexs
will help in bringing parity in its products and all the need to be more appealing in terms of design and
producers and manufactures will come under its ambit. creativity
 Professional packaging and product development needs to
4. Conclusion improve as the packaging makes a lot of impact on the
overall impression of a product.
Marketing is the most important function of all production  Research and development of products and market can be
industries. When Khadi was launched it made a place in developed in various Incubation centers in collaboration
people‟s heart as they believed in the ideology and that is with biggest textiles industries, Design colleges and
what it has as its customers till recent time, it was not a handicraft houses
brand but the ideology which made it survive but with  Professional approach by all employees of Khadi toward
change in customer preferences and availability of similar the artisans and customers
products in the market it was dying a natural death until the  New business models wherein KVIC can partner with
central government realized the setback. With the new stores for sales of its products
revival policies , new departments and new marketing  Consumer preferences need to be kept in mind along with
strategies it is slowly but steady gaining the same place in the fashion forecast to decide the product range .the
the Indian heart as it had during the freedom struggle . Still planning of all the cloth based product ahs to start one
there is a long way to go and many new initiatives and year in advance so that the consumers are in sync with the
strategies need to be introduced like trend of the season .
 Establishing the Brand identity not only nationally but  Involving more local brands in developing the artisans
globally too. The brand represents independence, skills and product range
sustainability and eco friendliness and that is what the  Improving and strengthen export potentials
world is talking today and me need to spread awareness  Maximum utilization of local resources and adaptable
about the qualities of Khadi . techniques
 Advertisement through all wire medium. The more we  Tie up with international government for exhibitions
propagate the more the awareness will spread about the during various fashion weeks .
brand. Advertisement needs to be on television on various  Initiatives more in craft and skilled based sector so that
channels, radio/ FM , newspapers and the internet . The more employment is generated.
creative of the advertisements need to be modern and
 Operational freedom needs to be given to each state and
appealing.
each bhandar so that creativity of selling and buying can
 Online presence needs to be enhanced by online marketing be enhanced.
and online sale outlets. Online in today‟s times is the  Market research cell should also be set up to find new
biggest marketing platform which reaches millions at one
innovative ways to expand the customer base.
given time.
[8] Prabakar, M.V.R, relevance of Khadi and Village
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