rural marketing through self-help groups (shgs): a case...

Proceedings of the Second Asia-Pacific Conference on Global Business, Economics, Finance

and Social Sciences (AP15Vietnam Conference) ISBN: 978-1-63415-833-6

Danang, Vietnam, 10-12 July 2015 Paper ID: V572

1 www.globalbizresearch.org

Rural Marketing through Self-Help Groups (SHGs): A Case Study

of Fatehabad District of Haryana (INDIA)

Pawan Kumar Dhiman,

Sant Longowal Institute of Engineering & Technology, Longowal,

Punjab, India.

Email: [email protected]

Amita Rani,

Sant Longowal Institute of Engineering & Technology, Longowal,

Punjab, India.

Email: [email protected]

___________________________________________________________________________________

Abstract

Any country in order to achieve high economic growth it has to mobilize and utilize all

resources available in its environment including human resources. Women represents

significant portion of the world’s population, however they were not been utilized to the fuller

in any developing economies. This women folk can act as an engine of economic development

and industrialization. So, her participation is most important in all fields to faster the

economic growth, including entrepreneurship. Women entrepreneurship in a formalized sense

is a relatively new phenomenon in India. The present paper tries to through light on economic

development through women entrepreneurship, their marketing strategies, profitability

portion and problems faced by them in order to run their micro, tiny and small enterprises

successfully. This empirical study was conducted in district Fatehabad of state Haryana. The

researcher had collected the data from two blocks comprising data of 74 sampled SHG’s

leaders of district Fatehabad (Haryana) through designed schedule by conducting interview

and observation method and it had been found that these groups were not earning good

profits due to lack of marketing knowledge, awareness and lack of appropriate marketing

strategies. ________________________________________________________________________________

Keyword: Rural Marketing, SHGs and Strategies.

mailto:[email protected]

mailto:[email protected]





1. Introduction

India, the 2nd largest country in population and 7th largest in geographic area, has achieved

a phenomenal growth over the last two decades. And this growth is multi-dimensional

covering almost all the section and activities in the economy. With the re-boost GDP and

export earning, India is enjoying a very comfortable position in world economy. Many Indian

companies and business conglomerates are considered amongst the most valuable companies

at the global platform.

Needless to say, this growth and development is the result of new economic policy which

was introduced in the year 1991. Liberalization, privatization and globalization have helped

India in becoming more competitive, efficient and innovative. Better job opportunity, higher

start up salary, change in consumption pattern, trend for a luxury life style, etc. have changed

the Indian market place. However, this is only one side of the coin. The other side is quite

dark. Still there is a deprived section of the society especially women; which have remain

excluded from the benefit of the growth of the economy.

The main reason of disparity is that women have no legal access to employment in the

same industries and occupations as their male counterparts have. In India, when a man is

working 391 minutes, a woman is working for 457 minutes per day (Biberkananda Mishra

2006). In spite of this women are considered as non-contributory towards the National

Growth only because they are assumed as unskilled and unorganized. Globally female labour

force participation stands at 51.1 percent, going up to 66.4 percent in East Asia but falling to

31.8 percent in South Asia. Whereas, in India labour force participation rate for women fell

from over 37 percent in 2004-05 to 29 percent in 2009-10. In our country, women represent

only 31 percent of the total workforce and 32 percent of the informal workforce but of the

female workforce, 96 percent are informally employed. Hence, it results in failure to allow

women to have full access of the labour market which remained as untouched and under

utilization of human resources that holds back productivity and economic growth (Steven

Kapsos). Hence, the need arose to empower the women by educating them, inculcating

entrepreneurial competencies and providing them knowledge related to health, decision

making, legal rights and technical know-how etc.

In this concern, both central and state Governments have formulated and introduced

different types of poverty alleviation programmes both for self-employment and wage-

employment as: Integrated Rural Development Programme- IRDP (1978), Training for Rural

Youth for Self Employment - TRYSEM (1979), Development of Women and Children in

Rural Areas - DWCRA (1982-83) and Supply of Improved Tool kit in Rural Artisans -

SITRA, Jawahar Rozgar Yojana - JRY (1989), Employment Assurance Scheme - EAS

(1989), Indira Awass Yojana – IAY (1989), and Million Wells Scheme (MWS), Ganga





Kalyan Yojana (GKY) and National Rural Employment Programmes (NREP) etc. Later on,

the Government of India, on the recommendations of the Hashim Committee, has restructured

all the poverty alleviation programmes less than one umbrella called Swarnajayanti Gram

Swarojgar Yojana (SGSY) started from 1st April, 1999. The focus of the scheme remained on

group formation by involving the poor women into Self- Help Groups (SHGs) and to

establish and develop large number of micro-enterprises in rural areas to uplift the socio-

economic standards of the rural poor especially women.

The SHG is the brainchild of Grameen Bank of Bangladesh which was founded by Prof.

Mohammad Yunus of Chittangong University in the year 1975 and suggested a model of

lending a small amount of money as loan to poor people especially women to make them

economically independent.( Surender, Kumari and Sehrawal, 2011). The SHG concept

services to underline the principle “for the people, by the people and of the people”. Similarly

in India, especially after 1980, many NGOs have started SHGs in saving and credit activities

among the disadvantaged sections of the society. The Reserve Bank of India issued a circular

dated July 24, 1991 to commercial banks advising them to participate actively in the pilot

project for linking Self-Help Groups (SHGs) with banks. And National Bank of Agriculture

and Rural Development (NABARD) after consultation with few banks issued a set of

guidelines on February 26, 1992. And when the pilot project was initiated by NABARD, the

Self Help Group model was adopted and was called as an Indian model and after NABARD

called it the SHG- Bank linkage model (Bansal 2010). In India, in the year 1992-93 the SHGs

groups were formed with 255 in numbers which increased 562425 during the year 2010-11. In

some of states, these groups are doing wonderful jobs whereas others are not doing as per the

expectations. The detail is shown in table number 1.

Table 1: Frequency distribution of Rural Household coverage under SHG- Bank Linkage

Programme

Sr. No Rural Household

Coverage Range

(Percent)

Number of states

within the range

States

1 0-20 9 Bihar, Haryana, J& K, Jharkhand, M.P,

Nagaland, Sikkim, Uttar Pradesh and Punjab.

2. 21-50 10 Arunachal Pradesh, Assam, Delhi, Chhattisgarh,

Gujarat, HP, Manipur, Meghalaya, Rajasthan

and Uttaranchal.

3. 51-75 5 Lakshadweep, Meghalaya, Mizoram, Tripura

and West Bengal.

4. 75-100 2 Goa and Orissa.

5. >100 7 Andaman & Nicobar Islands, A.P, Chandigarh,

Karnataka, Kerala, Pondicherry and Tamil Nadu.

Source: NABARD Status of microfinance in India 2010-11.

It is evident from the table number 2 that in 7 states, more than 100 percent of rural poor

household has been benefitted under SHG- bank linkage, 75-100 percent in 2 states, 51-75 in

5 states, 21 to 50 percent in 10 states whereas only up to 20 percent coverage has been made





in Bihar, J& K, Jharkhand, M.P, Nagaland, Sikkim, Uttar Pradesh, Haryana and Punjab

respectively. As per NABARD Report (2011), 53.4 percent of poor rural household covered

under SHG- bank linkage programme in India whereas in northern states especially Haryana

only 12.5 percent rural household has been covered and majority of the rural poor could not

avail the benefits of this programme due to illiteracy, lack of awareness and inadequate

managerial and marketing knowledge.

1.1 Review of literature

In the process of research previous studies concerning the various dimensions and

functioning of rural entrepreneurs have been studied to understand the research problem in

carrying out the formulated work in rural entrepreneurship. Hence, the various research

studies related to the working of SHGs are as following.

1.2 Purshotam (2004)

Had stated in his research,” Marketing Support to SHGs” that no market development

strategy is static and enjoys universal replicability. He stressed that appropriate market

support, strategies to be identified, appraised and evolved continuously to suit the local

market conditions especially in rural areas. And the members of SHGs could be effectively

assisted to identify and build micro-enterprises as a source of their employment; income and

return on investment for viable enterprises have to be considered with long term perspective.

1.3 Das Swarnabha, Dey Kumar Arun, Dutta Kumar Santosh (2009)

In their study,” Impact of Micro-finance programme through SHG Bank Linkage: An

empirical study towards the socio-economic empowerment of the rural people especially

Women”, has explored that to enable the poor women self dependent, microfinance had

extended small loans to those who did not have any access to normal bank loans due to less

collateral security.

1.4 Goankar, Maya S. (2011)

In their study,” Rural women Empowerment through SHGs: A way for rural

development”, had analyzed the role of SHGs in economic, social and political empowerment

of women in Karnataka. The study has covered five villages in Uttar Kaunata district of

Karnataka. A sample of 300 women members were selected, representing 10 members each

from 30 SHGs with convenient random sampling. The study revealed that after joining the

SHGs, the income, saving, investment of group members had increased and raised their

standard of living.

2. Objectives of the Study

The objectives of the study are as follows:

• To assess the marketing practices of the SHGs to promote sale of their products/services in

selected district of Haryana.





• To recapitulate the findings of the study and to offer suggestions to solve the problem of

SHGs.

3. Research Methodology

The present study was undertaken in Fatehabad district of Haryana. The total population

of the state is 2, 53, 53,081 (2011 census) out of which 34.79 percent population live in urban

areas and 65.21 percent in villages. And it comprises 21 districts namely Ambala, Panchkula,

Yumananagar, Kurukshetra, Kaithal, Karnal, Panipat, Sonipat, Rohtak, Jhajjar,

Palwal.Faridabad, Gurgaon, Rewari, Mehendragarh, Bhiwani. Jind, Hisar, Sirsa, Mewat and

Fatehabad. The Fatehabad is one of the backward districts in Haryana. The literacy rate of

district Fatehabad is 60.43 percent. This district comprises 6 blocks namely, Fatehabad,

Tohana, Ratia, Bhuna, Bhattu Kalan and Jakhal and having 245 villages. Due to wide

coverage area out of six blocks two blocks i.e. Tohana and Jakhal were selected randomly.

To analyse the working of SHGs, 100 SHGs were visited with the help of block officials.

Many visits were made and meeting was held with pradhan’s of the SHGs but only 74 SHGs

(33 from Jakhal block and 41 from Tohana block) provided the relevant information. The

information gathered from SHGs was analyzed by using percentages only. To test the validity

of data Chi square test has been used.

In Haryana, 26014 Self Help Groups have been formed since inception to 31.03.2012.

Out of total enrolled groups, 17422 (66.97 percent) were purely women SHGs. The detail is

explained in table number 2.





Table 2: District-wise position of SHGs in Haryana

Sr. No Name of

the

District

Number

of SHGs

formed

since

1.4.99

Number of

Women

SHGs formed

since 1.4.99

No .of

SHGs

that

have

defunc

t since

incepti

on

Number of

SHGs taken

up

economic

activity

after Grade

II since

1.4.99

Subsidy and credit disbursed

during 2009-10 (Rs. In lakhs)


during 2010-11(Rs. In lakhs)


during 2011-12 (Rs. In lakhs)

Loan

disbursed

Subsid

y

disburs

ed

Total Loan

disburse

d

Subsidy

disburse

d

Total Loan

disburs

ed

Subsid

y

disburs

ed

Total

1. Ambala 1390

(5.34)

779

(4.47)

274 656 194.275 67.325 261.6

446.647 135.488

582.135

361.19

3

105.40

9

466.602

2. Bhiwani 1296

(4.9)

934

(5.36)

759 761 404.938 130.51

2 535.45

610.2 610.2

1220.2

441.84 182.49

5

624.335

3. Faridab

ad

462

(1.77)

445

(2.55)

21

200 89.54 30.91

120.45

100.46 35.21

135.67

84.13 31.14 115.27

4. Fatehab

ad

1031

(3.96)

786

(4.51)

16 786 146 146

292

328 164

492

242 121 363

5. Gurgaon 423

(1.62)

299

(1.71)

34 183 41.3 22.09

63.39

151.87 62.73

214.6

121.48 45.52 167.04

6. Hissar 1568

(6.02)

972

(5.57)

0 1222 724.8 168.16

892.96

689.2 152.51 841.71 506 115.44 621.44

7. Jhajjar 511

(1.96)

326

(1.87)

107 362 156.816 39.135

195.951

275.07 54.265 327.335 191.3 42.05 233.35

8. Jind 1962

(7.54)

1153

(6.61)

323 1416 681.5 205.52 887.02 703.23 200.15

903.38

643.22 158.52 801.74

9. Kaithal 2021

(7.76)

1696

(9.73)

0 1080 218 104.41

322.41

328.4 218.697

547.097

216.13 144.09

6

360.226

10. Karnal 1883

(7.23)

1489

(8.54)

66 1552 320.67 157.05

477.72

427.4 214.8

642.2

311.3 155.5 466.8

11. Kuruksh

etra

1620

(6.22)

851

(4.88)

156 805 414.091 137.14

4 552.35

527.337 157.683

685.02

905.94

9

147.77

2

1053.721

12. Mahend

ragarh

1135

(4.36)

635

(3.64)

239 561 113.41 82.53

195.94

152.8 112.36

265.16

133.27 91.28 224.55

13. Mewat 1027

(3.94)

664

(3.81)

0 288 163.19 61.72

224.91

208.48 109.02

317.5

268.82 103.06 371.88





14. Palwal 1017

(3.90)

924

(5.30)

0 432 226.51 94.6 321.11 160.74 70.34

231.08

173.91 77.64 251.55

15. Panchku

la

641

(2.46)

479

(2.74)

0 355 82.05 33.7

115.75

111.24 35.04 146.28 96.07 29.03 125.1

16. Panipat 890

(3.42)

526

(3.01)

0 567 247.17 77.36

324.53

314.78 85.88

400.66

288.08 64.73 352.81

17. Rewari 1706

(6.55)

1630

(9.35)

813 813 466.29 112.36

4 578.654

465.47 112.013

577.483

416.9 104.42

8

521.38

18. Rohtak 1157

(4.44)

733

(4.20)

224 515 274.6 56.8

331.4

292.21 57.44

349.65

346.86 62.16 409.02

19. Sirsa 1594

(6.12)

1342

(7.70)

72 685 426.5 110.53 537.03

277.706 73.902

301.608

397.16

2

101.33

8

498.5

20. Sonipat 1211

(4.65)

323

(1.85)

0 1080 461.48 103.52 565 968.68 121.32 1090 1033.6

1

106.39 1139.91

21. Yamuna

nagar

1469

(5.64)

436

(2.50)

0 967 568.8 191.59

8

760.398 727.96 158.04 886 526.7 113.3 640

Total 26014

(100)

17422

(100)

3104 15286

(57.84)

6421.93 2132.9

78

8554.908 8267.88 2941.488 11209.36 7645.9

24

2102.2

98

9748.222

Source: Official record Joint development commissioner Haryana.





It is evident from table number- 2 that among the 21 districts in Haryana, Kaithal district secure

first place in the formation of SHGs and has formed 2021 SHGs followed by Jind(1962),

Karnal(1883), Rewari(1706), Kurukshetra(1620), Sirsa(1594), Hissar(1568), Yumunanagar(1469),

Ambala(1390), Bhiwani(1296), Sonipat(1211), Rohtak(1157), Mahendragarh(1135),

Fatehabad(1031), Mewat(1027), Palwal(1017), Panipat(890), Panchkula(641), Jhajjar(511),

Faridabad(462) and Gurgaon(423). The data also shows that in the year 2009-10 total amount to the

tune of Rs. 8554.908 lakhs was disbursed to the SHGs out of which Rs. 6421.93 lakh disbursed as

loan and Rs. 2132.97 lakhs as subsidy whereas in the year 2010-11 total amount disbursed was Rs.

11209.36 lakh out of which Rs. 8267.88 lakhs as loan and Rs. 2941.488 lakh subsidy was disbursed

which was about 31 percent more than the loan disbursed from previous year. The data also shows

that in the year 2011-12 total amount of Rs. 9748.222 lakh was disbursed out of which Rs. 7645.92 as

loan amount and 2102.298 lakh as subsidy was disbursed which was less to the tune of Rs 1461.38

lakh from the previous year. Therefore, more efforts in this direction were required to uplift the status

of rural poor in the state. As far the district Fatehabad is concerned, it is an agrarian district where

more focus lies on agricultural activities. As per 2011 census, total population of district Fatehabad is

941,522 out of which 446,688 (47.45 percent) is female. The SGSY scheme is being implemented in

Fatehabad district since 1 April 1999 to promote Self Help Groups in rural areas. Since 2000-01 to

31.03.2012, there were total 1031 SHGs formed under SGSY scheme. The total amount to the tune of

Rs.1820.531 lakhs was disbursed out of which 1101.601 lakh disbursed as loan and Rs. 718.93 lakhs

as subsidy respectively. The block wise-position of loan and subsidy disbursed is as shown below:

Table: 3 Block wise position of SHG formed and loan disbursed in Fatehabad district

Block No. of SHGs Total Loan

disbursed

Total Subsidy

disbursed

Grand total

Bhattu Kalan 80 8173200 5398000 13571200

Bhunna 121 14958900 8875000 23833900

Fatehabad 282 28174000 20800000 48974000

Jakhal 134 13425000 8290000 21715000

Ratia 294 3700000 23640000 60649000

Tohana 120 8420000 4890000 13310000

Total 1031 110160100 71893000 182053100

Source: Official record- District Rural Development Agency, Fatehabad.

Table 3 exhibits that among all the 6 blocks, maximum SHGs were formed in Ratia block i.e. 294

in number, followed by 282 in Fatehabad, 134 in jakhal, 121 in Bhunna, 120 in Tohana and 80

SHGs were formed in Battu Kalan block respectively. However, the highest amount of loan and

subsidy are disbursed to the Ratia block followed by Fatehabad and Bhunna block.

To sustain in the competitive market, these groups has to take the help of various market

strategies with special emphasis of 5 P’s of marketing mix to attract and create market for target

consumers these elements of marketing mix acts as stimulus for them to acquire more customer

satisfaction, increased market share, return on investment and to improve company image as a

response.





3.1 Product Strategy

SHG activities under taken in the district Fatehabad have been categorized into three basic

activities such as manufacturing, trade and services to run their business effectively and their relations

to average profits and sales of SHGs is shown in the table number 4 & 5.

Table 4: Type of business activity and Sales

Sr.

No

Type of business

activity

Average Sales of SHGs in district Fatehabad

(Haryana) Average Profits of SHGs in district

Fatehabad (Haryana)

Low

Sales

Up to Rs

1.5 Lac

Per

annum

Medium

Sales

1.5 lac

2.20. Lac

PA

High

Sales

More

than 2.20

lac PA

Total

SHGs

Low

Profits

Up to Rs

0. 40 Lac

Pa

Medium

profits

Rs

0. 40 Lac-

1.30 Lac

PA

High

profits

More

than

1.30 Lac

per

annum

Total

SHGs

1. Manufacturing 1

(1.35)

2

(2.70)

1

(1.35)

4

(5.41)

1

(1.3)

3

(4.1)

- 4

2. Trade 18

(24.3)

32

(43.2)

19

(25.7)

69

(93.2)

37

(50.0)

17

(22.9)

15

(20.3)

69

(93.2)

3. Services 1

(1.35)

- - 1

(1.35)

- 1

(1.3)

- 1

(1.3)

Total 20

(27.0)

34

(46.0)

20

(27.0)

74

(100)

38

(51.3)

21

(28.3)

15

(20.3)

74

(100)

Source: Field Survey.

Table 5: Type of activity with Profits and Sales: Chi- Square

Source: own calculations.

Table no. 4 & 5 depicts that out of 74 total surveyed SHG’s, 93.2 percent participants were

engaged in various trading activities such as selling milk and selling clothes door to doors etc., while

5.41 percent were involved in manufacturing activities, and 1.35 percent were in services sector. It

was also observed that majority of SHGs were earning medium sales revenue ranging between Rs.

155000 to Rs. 220000 per annum to be self-reliant. As regards profitability of selected district is

concerned 51.3 percent SHGs earned low level of profits; followed by 28.3 percent earned medium

level of profits and only 20.3 percent of the respondents were generating high level of profits

respectively. The respondents reported that due to lack of market exposure, family pressure and

conservative attitude of families they were facing a lot of difficulties in carrying out the micro-

enterprise ventures successfully and had confined their business only to local areas. The result of the

chi-square test has revealed that type of business activity had not shown much difference in the sales

and profit margins of the surveyed group.

Factor Degree of

Freedom

Calculated value Table Value Hypothesis

Type of

business activity

Sales 4 2.76 9.49 Accepted

Profits 4 7.42 9.49 Accepted





3.2 Price Strategy

The success and failure of the organization also largely depends on the pricing strategy of a

particular product. Similarly, the price of the SHGs products is decided by their group members by

keeping in mind the various factors as: Cost plus Margin, SHGs Decision, Dependent on competitive

price and according to demand of the products etc. The details of price policy are given in table 6-7.

Table 6: Price policy of the group with Sales

Sr.

No

Price policy of the

group

Average Sales of SHGs in district Fatehabad

(Haryana)

Average Profits of SHGs in Haryana

Low

Sales

Medium

Sales

High

Sales

Total

SHGs

Low

profits

Mediu

m

profits

High

profits

Total

SHGs

1. Cost Plus Margin 8

(10.8)

15

(20.2)

14

(19.0)

37

(50.0)

19

(25.7)

8

(10.8)

10

(13.5)

37

(50.0)

2. SHGs Decision 6

(8.1)

13

(17.6)

5

(6.7)

24

(32.4)

12

(16.2)

8

(10.8)

4

(5.4)

24

(32.9)

3. Dependent on

competitive price

5

(6.7)

6

(8.1)

1

(1.35)

12

(16.22)

6

(8.1)

5

(6.8)

1

(1.3)

12

(16.2)

4. According to

demand of product

1

(1.35)

-

-

1

(1.35)

1

(1.3)

- - 1

(1.3)

Total 20

(27.0)

34

(46.0)

20

(27.0)

74

(100)

38

(51.3)

21

(28.4)

15

(20.3)

74

(100)


Note: Figures in parentheses indicate percentages of SHGs.

Note: The values of Chi-square (χ2) for price policy with the average sales ad profits of groups are

8.21 and 4.34 respectively. Table value at 5 % with 6 degree of freedom is 12.6.

A perusal of the data shown in table 6 has revealed that SHGs in the district under study were not

adopting any particular pricing strategies but were fixing the price of their products in a haphazard

manner to earn their livelihood and to clear their stocks. It was observed that in district Fatehabad 50

percent group members were using cost plus margin technique followed by 32.4 percent on the basis

of joint group decision, 16.2 percent were dependent upon competitive price and only 1.35 percent

SHGs were pricing their products according to the demand of their product locally. Data also shows

that in district Fatehabad, among the total 74 surveyed group, 38 SHGs generated low profits and

majority of them used cost plus margin strategy to fix their prices. It was also observed that in the

district to promote the sales; most of the group members offered discounts to their regular consumers.

It is pertinent to mention here that sometimes their discount policy adversely affected the consumer

buying behaviour; as they felt the quality of SHG products was of sub standardized which in turn

reduced the sales volume and profit margin of their respective units. The result of chi square has also

proved that the price policy adopted by SHGs did not show much difference on their average sales

and profits.





3.3 Place Strategy

Place is an important factor that affects success of the business to a large extent both in large scale and

tiny cottage industries/ business activities operated by SHGs. A poor location leads to financial

burden whereas good location results in higher sales revenues, increased market share and higher

profits etc. Appropriate place strengthens the viability of the unit by acquiring locally raw material at

reasonable price, availability of skilled labour at lower cost and scope of good market for locally

manufactured products etc. Data in table 7 shows that in the district under study 94.5 percent SHGs

doing their business in rural,2.7 percent in semi urban and 2.7 percent in urban area only. Due to

location disadvantage and poor economic base 51.3 percent were earning low profits, 28.4 percent

medium and 20.3 percent higher profits only which show a very poor show. The discussion with

group members revealed that they developed a large number of products; many of them compete with

branded/market-established products in terms of quality. But being in rural areas they were facing

numerous problems like lack of knowledge on business management, technical knowhow, lack of

entrepreneurial spirit, non-availability of buyers, lack of marketing awareness, inadequate product

design, lack of promotional techniques etc. which causes constraints in the productivity of their

business units. The results of chi-square test show that there were no significant differences on

average sales and profits of SHGs operating at different locations.

Table 7: Location of the groups with Sales and Profits

Sr.

No

Location of the

group Average Sales of SHGs in district Fatehabad

(Haryana)

Average Profits of SHGs in district

Fatehabad (Haryana)

Low

Sales

Medium

Sales

High

Sales

Total

SHGs

Low

profits

Mediu

m

profits

High

profits

Total

SHGs

1. Rural 20

(27.0)

33

(44.6)

17

(22.9)

70

(94.5)

37

(50.0)

20

(27.0 )

13

(17.6 ) 70

(94.6)

2. Semi- Urban - 1

(1.35)

1

(1.35)

2

(2.7) - - 2

(2.7) 2

(2.7)

3. Urban - - 2

(2.7)

2

(2.7) 1

(1.4)

1

(1.4) -

2

(2.7)

Total 20

(27.0)

34

(46.0)

20

(27.0) 74

(100)

38

(51.3)

21

(28.4)

15

(20.3)

74

(100)



Note: The values of Chi-square (χ2) for place policy with the average sales and profits of groups are

6.62 and 0.55 respectively. Table value at 5 % with 4 is 9.49.

3.4 Promotion Strategy

Promotion is the coordinated self- initiated efforts to inform persuade and remind customers. It

creates strategies to make customer aware of the product and entice them to purchase a particular

product over another. The different types of sales promotional strategies adopted by the SHGs in

district Fatehabad of Haryana as shown in the following table.





Table 8: Sale Promotion strategy of groups with average sales and profits

Sr.

No

Sale Promotion

strategy of the

group

Average Sales of SHGs in Haryana Average Profits of SHGs in Haryana

Low

Sales

Medium

Sales

High

Sales

Total

SHGs

Low

profits

Mediu

m

profits

High

profits

Total

SHGs

1. Advertisement 1

(1.35)

6

(8.1)

1

(1.35) 8

(10.8)

5

(6.8)

3

(4.0) -

8

(10.8)

2. Pamphlet 3

(4.05)

3

(4.05)

- 6

(8.1) 5

(6.8)

1

(1.3) -

6

(8.1)

3. Exhibition - 8

(10.8)

5

(6.7) 13

(17.6)

10

(13.5 )

3

( 4.0) -

13

(17.6)

4. Others - - - - - - - -

5. No Channel used 16

(21.6)

17

(23.0)

14

(18.9) 47

(63.5)

18

( 24.3)

14

(18.9 )

15

(20.3) 47

(63.5)

Total 20

(27.0)

34

(46.0)

20

(27.0) 74

(100)

38

(51.3)

21

(28.4)

15

(20.3)

74

(100)



Note: The values of Chi-square (χ2) for promotion policy with the average sales and profits of groups

are 12.33 and 13.91 respectively. Table value at 5 % with 6 is 12.6.

Data in table 8 has revealed that in district Fatehabad 17.6 percent SHGs took part in exhibitions,

10.8 percent used advertisements as the media and only 8.1 percent used pamphlets and other

promotional techniques to cope up the increasing competition whereas 63.5 percent are not using any

sales promotion techniques due to lack of education, awareness, low sales volume and lack of

marketing skills among group members etc. During the survey it was also observed that some SHG

women have indulged themselves in door to door marketing activities, out-station fairs and were

selling their products to known people; relatives and other SHG members in the nearby local markets.

The results of chi- square test shows that the promotion policy of the SHGs in the district reflects a lot

on the profits of their business enterprises as the differences between the average profit and the

promotion policy of group was significant at 5 percent level of significance and there is no difference

in average sales of SHGs using different level of promotion strategy.

3.5 Personnel Strategy

The human asset is considered as one of the most important asset of an organisation. The

employee’s commitment to the organization, their willingness and skill to perform beyond

expectations has become a focal point for the management of an organisation to enhance their

productivity in the long run. Therefore, the performance of micro enterprise/SHGs depends upon the

skill and effective involvement of the group members in carrying out different business activities. In

the present study, SHGs were divided into three categories based on number of employees per group

such as group 1- comprising of up to 10 members, group 2- comprising members ranging between 10

to 12 and group 3- comprising of more than 12 members per group. The status of sampled SHGs





members per group generating various levels of sales and profits in district Fatehabad is shown in

table 9.

Table 9: Personnel Strategy with Sales

Sr.

No

Promotion

strategy of the

group

Average Sales of SHGs in district

Fatehabad (Haryana)

Average Profits of SHGs in Haryana Profit

Low

Sales

Medium

Sales

High

Sales

Total

SHGs

Low

Profits

Medium

profits

High

profits

Total

SHGs

1. Up to 10

members

13

(17.5)

25

(33.8)

10

(13.5) 48

(64.8)

22

(29.7)

15

(31.3 )

11

( 14.9)

48

(64.9 )

2. 10-12 6

(8.1)

8

(10.8)

8

(10.8) 22

(29.7)

13

( 17.6)

5

( 6.8)

4

(5.40 )

22

( 29.7)

3. Above 12 1

(1.35)

1

(1.35)

2

(2.70) 4

(5.4)

3

(4.05 )

1

(1.35 )

- 4

(5.4)

Total 20

(27.0)

34

(46.0)

20

(27.0) 74

(100)

38

(51.3)

21

(28.4)

15

(20.3)

74

(100)



The value of chi-square of SHGs regarding personnel strategies with sales and profits is 3.39 and

2.40 respectively. The table value at 5 per cent with 4 degree of freedom is 9.49.

Table 9 shows that in district Fatehabad, 64.8 percent groups had up to 10 members per group,

29.7 percent had 10-12 members per group and only 5.4 percent group had group membership above

12 members. Data also reveals that 29.7 percent SHGs with group membership up to 10 earned low

level of profits, 31.3 percent earned medium level of profits and 14.9 percent SHGs had high level of

profits, while in larger groups with group membership above 12, 4.1 percent SHGs generated low

profits, 1.4 percent generated medium profits and none of the surveyed SHGs had earned high level of

profits. It was also observed that in the district under study sales and profits of SHGs was not affected

by the number of employees per group and the sales revenues remained almost same irrespective of

number of group members enrolled. The result of Chi-square showed that there were no significant

differences in averages sales and profits of SHGs employing different number of members per group

in Haryana.

4. Suggestions

To make SHG’s a viable unit following suggestions have been incorporated.

1) SHG members felt disappointed at the initial stage of setting up their units because of

bureaucratic delay and procedural problems resulting in dampening the spirit and endeavour of

the members. The process of group formation, working out the business profile, getting loan from

banks and starting up the group activity takes a long time and by the time the market conditions

change and the entrepreneurial spirit hampers. Hence it is suggested that the government should

establish a micro-enterprises/SHGs corporation at the district level to meet the requirements of

new enterprises/SHGs.





2) With regard to marketing problem, there is a vast marketing potential for the products

manufactured by small entrepreneurs/SHGs. For this, the government should set up some

agencies to purchase the products of this sector at reasonable price. Though, the purchase by the

government departments for their own consumption from these micro-enterprises will be of great

help. If proper marketing and adequate remuneration are ensured, the micro-enterprises/SHGs

will develop both in quality and quantity.

3) It has also been observed that due to illiteracy and less exposure to the outside world in both the

states, participants could not start any non-traditional profitable activities such as mushroom

culture, bee-keeping, soap/surf making, garland, chalk and rope making etc. Discussions with the

participants provided that they prefer to produce only such products which they can easily sell in

their village itself. Therefore, it is suggested that SHGs should diversify their product lines and

marketing activities to earn more profits from their enterprises.

4) To sustain the SHGs collateral free micro-loans are to be provided to the beneficiaries through

financial institutions and banks. But it has been observed that these financial institutions charge a

very high rate of interest from the poor borrowers. This high rate of interest reduces the

borrowing capacity of the poor and it may further weaken their economic conditions. Therefore,

the poor people must be provided loans at low rate of interest in order to improve their economic

conditions, and banks should waive service charges at the time of sanctioning loans to the SHGs.

5. Conclusion

In the world of mega-competition, where the winner almost invariably wins all and the loser loses

everything, business success depends on a clear understanding of the competitive landscape where an

enterprise/ business activity operates. One can never beat a competitor until one understands how the

competitor operates. With the changing scenario of marketing, the concept of market has been

changed drastically. Buyer behaviour and competition is also changing in the fast pace with the

changes variables in the market environment. To compete with global scenario small firms have to

become aggressive and innovative. In the present study, it has been found that type of business

activity of SHGs, price policy adopted by SHGs, location of SHGs, promotion techniques adopted by

SHGs and number of members per group does not have significant influence on the sales. Whereas in

case of profits, only promotional techniques adopted by them influence the profitability of their

concerned enterprises. Therefore, our micro-enterprises especially SHGs have to understand the

concept of marketing strategies through proper marketing segmentation, channel choice and effective

mix of other marketing elements to get substantial invulnerable edge or differential advantage over

the rivals. These groups should adopt the techniques of marketing mix of 5P’s such as Product, Price,

Place, Promotion and Personnel along with customer oriented 4A’s as Affordability, Availability,

Acceptability and Awareness to attract and create market for target consumers according to their un-

met needs on price or product features and to develop new markets through unique positioning.





Acknowledgement

We would like to thank Project officer District Rural Development Agency, Fatehabad District

(Haryana) for providing secondary data. Our sincere thanks to all the respondents those have spared

time for filling the questionnaires. We are also thankful to our colleague members those helped us one

way or the other.

Pawan Kumar Dhiman ([email protected]) is a Associate Professor in the

Department of Management at Sant Longowal Institute of Engineering & Technology, Longowal. He

teaches Entrepreneurship, HRM and Business Law. He has done his Doctoral Research in the

Industrial Sickness. He has published around 20 research papers in journal of repute and attended 25

conferences in India and abroad.

Amita Rani([email protected]) is a Ph.D Research Scholar in the Department of

Management at Sant Longowal Institute of Engineering & Technology, Longowal. She is pursuing

her research on marketing strategies adopted by SHGs in Punjab & Haryana. She has published 5

research papers in various journals and attended 15 conferences at national & international level.

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