Buyer-Seller Relationship: An Export Marketing Challenge Faced by Handicrafts and Handlooms Export Corporation

Topics: India, Government of India, East India Company Pages: 21 (6743 words) Published: January 13, 2013
Buyer-seller relationship – challenge in export marketing for The Handicrafts and Handlooms Export Corporation (HHEC) Anuj Sharma, A.K. Dey and Prerna Karwa

Anuj Sharma is an Associate Professor and A.K. Dey is a Professor, both at the Centre for International Business & Policy, BIMTECH, Greater Noida, India. Prerna Karwa is a Marketing Executive at The Handicrafts & Handlooms Exports Corporation of Indian Ltd, Noida, India. The development of this teaching case has been facilitated by Bimtech Center for Management Case Development, set up in partnership with Emerald Group Publishing House, at Birla Institute of Management Technology, Greater Noida (India). Disclaimer: The case has been developed solely as the basis for class discussion and for education purposes and is not intended to illustrate either effective or ineffective handling of an administrative situation or decision making or represent the views of management about the topic of the case. The authors may have disguised/camouflaged some of the names, events, information and/or conversations among the organization’s officials to protect the identity of individuals and to protect confidentiality. Disclaimer. This case is written solely for educational purposes and is not intended to represent successful or unsuccessful managerial decision making. The author/s may have disguised names; financial and other recognizable information to protect confidentiality.

Arun Vir Singh (Arun) is a provincial civil service officer in the state of Uttar Pradesh, one of the largest states of India in terms of area and population but one of the lowest in terms of per capita income. Arun is known in the civil services as a person who would like to be associated with initiatives which can bring cheer to the poverty stricken people. One fine morning in June 2008, he gets a surprise letter of his transfer to Handicrafts and Handlooms Exports Corporation of India Ltd (HHEC). He considers this as an opportunity to fulfil his dreams and cutting down his normal permissible joining date, joins hurriedly in his new position as General Manager – Marketing, HHEC. The acceptance of an officer at a new posting in India’s Government-oriented bureaucratic set-up is not problematic. The authority is governed by the designation and the employees ‘‘Worship the rising Sun’’. Arun was, therefore, able to establish himself sooner than could be expected. However, there were surprises in stock. Financial results of HHEC had just been finalized and a copy of the same was before him. It was a gloomy and sad picture that emerged. HHEC for the second consecutive year had performed very badly. Total revenue had come down from Rs 10,651.322 million in 2005-2006 to Rs 7,033.975 million in 2007-2008, a fall of 34 per cent. In exports the corporation had done even worse. The export turnover had plunged from Rs 586.270 million in 2005-2006 to Rs 260.058 million in 2007-2008, a fall of almost 56 per cent. Arun went into introspection and tried to find answers to questions like: Who purchases the products from HHEC? What were the reasons for sharp decline? What motivates a person to purchase HHEC products? Who could be competitors to HHEC?

Buyer-seller relationship
On going through the records Arun was very surprised to find that large number of overseas buyers that the corporation had in 2006 had discontinued the purchases from HHEC. To understand the reason, Arun called a meeting of officials of corporation who were responsible for dealing with buyers and opened the discussion. Ravi Kumar an executive in marketing department with an experience of four years in HHEC opened up: Master Looms used to import a lot of carpets from HHEC. Keeping in mind the huge buying, HHEC decided to open a franchisee shop at Las Vegas. HHEC was doing good business with this buyer, but due to the recession in the US, the Master Looms lost all the business and went bankrupt. This forced the buyer to close business as well.

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