MARKS: 80 COURSE: EMBA Sem-I SUBJECT: Consumer Behavior Name: Jinka Vijay Bhaskar Reference Number: KH00611-10731
Note:- 1) Kindly write question number properly 2) Attached question papers with answer sheets _____________________________________________________________________________
Case – 1 -Fashion Statement through Khadi As India’s traditional hand-spun cotton fabric, khadi feels coarse and unrefined. But the feelings it evokes in anyone with any empathy in India’s heroic struggle for emancipation from colonial rule, is anything but that. Till date the fabric bears the invisible-but-indelible imprint of the charkha (spinning wheel), the late M.K. Gandhi’s revolutionary symbol for self-reliance and emancipation (through unity, expressed in the refusal to kneel before insolent might). Instead of exporting raw cotton and importing fine Manchestermade cloth, freedom fighters wanted all Indians to spin their own clothing and boycott imports to weaken the British Raj. With the end of Colonial Rule in 1947, the congress government headed by Jawaharlal Nehru opted for state-led large-scale industrialization, instead of Gandhi’s idea of rule hut-industry development. But it also decided to provide employment to thousands of spinners by selling their output through a vast network of retails stores. Thus was formed the Khadi and Village Industries Commission (KVIC), a nodal agency to promote the fabric, with its Khadi Bhandar outlets in urban India. Over the years, KIVC set up thousand of outlets across India. Sales were good. But with the evolution of technology, perhaps it was inevitable that the sentimental dreams of village self-reliance would be disrupted. And so it was. Modern machines of Europe’s industrial revolution were soon to arrive. Indian industrialists set up capital-intensive textile mills and began the mass-production of fine cloth. As the mills gained volume, they achieved economies of scale and started lowering prices. And so, the labour-intensive homespun fabric losing out to mill fabric. Driven by its sentimental attachment to Khadi, and concern for mass-scale-sector employment, the government started subsidizing India’s traditional spinners. This was an extension of its ‘tax-the-rich’ and ‘feed-the-poor’ outlook, and was projected via the media as a good thing. In any case, KVIC was intended to be a noble organization, motivated by lofty ideals instead of profit. For decades, all was fine behind the ‘khadi’ curtain of socialism’. The reason behind the support mechanism even acquired a holiness of its own. Institutionalized, it became immune to doubt. But alas, the system was artificial and its main flaw lay in the very ‘certain’. Public information was lacking, and so it escaped proper scrutiny. In the real would, even the best-international projects can fail, or worse, degenerate into instruments for patronage. But the 1990s, the vision of clothing the masses with khadi was beginning to look absurd. Despite all policy incentives to the sector, people were buying efficiently machine-made textiles. The forces of mass production were making polyester, which had gained economies of scale at the raw materials stage
(made from petrochemicals), cheaper still. Yet KVIC continued to produce huge quantities and sell khadi clothes through its extensive retail chain. By now, khadi was more expensive than other fabrics and had acquired the image of an outdated clothing material worm chiefly by politicians and social workers. Ordinary people preferred cheaper alternatives. Was khadi a lost cause-stuck in the time wrap? Clearly, if KVIC continued the way it was; it was headed for trouble. Given India’s poor fiscal health, subsidies had become untenable. Yet, the fabric couldn’t be torn out from consciousness of caring Indian. Something needed to be done. And fast. By the start of the new century, KVIC discovered a pragmatic solution based on using modern marketing to...