No.

16/334,

Bajal Street, Manipal – 576 104

Ph: (0820) 257025

Fax: (0820) 2575381

Submitted to: Dr. T N Ramakrishna

Submitted by: Group No. 12

Pramod S 071202024

Sandesh S Shivapuram 071202066

Pavan G P 071202004

Namitha Kamath G 071202045

Indrani Mitra 071202032

Contents of the project:

1. Nature of the firm, location, product, Employees and

organizational structure.
2. Investment details
3. Production process – inputs, cost of inputs details of
production and production capacity break even analysis
4. Marketing – sales performance future sales trend line
5. Nature of competition
6. Pricing the product
7. Conclusion – Economic position , future plans
Hari Prasad Stores

Hari Prasad Stores is situated in Udupi, Karnataka. This is a Grocery Shop

with atotal area of 250sq. Ft.

The Store employs 2 male employees who are expert in their work.

The Store sells household items which are needed in day to day life like
rice, grains, edible oil, oil, sugar, jiggery, tea, coffee powder, etc. The
shop came into existence on May 1 1994.

The Employees attendance is maintained in books. They have a separate

book for monthly wager. They provide Sunday as a full day holiday to the
employees.

Investment Details

Hari Prasad Stores started with an initial investment of Rs. 20000 which
includes land rent and materials.

Fixed Cost:

Factory rent
Variable Cost:

Salaries, wages, materials, telephone charges, electricity charges,

transportation charges and other operating expenses.

Details of the store

1. Stores:

In the store the items for sales are arranged on the shelves for display.
The display makes it easier to select, also it attracts the customer for
purchasing. The nature of competition among provisional stores has
become tuff these days. Like wise this store also faces a strong
competition from its rival shops like Laxmi, RTC, AVT Nayak. These are all
situated in Udupi.

2 Pricing of Product

The stores does its pricing to all the items keeping three factors in mind

1 Quality of the product

2 Nature of the product

3 Availabilty of the product

After considering the above three factors, cost price of the product is
determined then profit margin is added to the cost price and finally the
selling price of the product is decided.

3Customer buying the product(The Buying-Selling process):

A customer comes to the shop, selects the item of his need that are kept
on display and then asks for the other alternatives of the item available in
the market. He also enquires about the offers available, if any and then
places the orders for purchase. The seller in turn gives the required item
to the customer.

Types of Customer

The store has basically divided its customer into two groups

1. Regular customer
 The number of regular customer visiting the store varies from 80-90
per day

2. One time customer

The number of this type of customer is not fixed rather it varies
depending upon many factors. Some of them are like marriage
ceremony around the store, any festival etc.

Break – Even Analysis

Formula to find Break-even Analysis (BEP):

BEP=TFC / P-AVC

Where,

TFC=Total Fixed Cost

P= Price per unit

AVC= Average Variable Cost

Total Fixed Cost:

Rs. 50, 00, 000/- (which includes salary of workers, factory rent, etc…)

Average Variable cost (per garment):

Rs. 410 (which included the cost of fabrics, buttons, elastic, threads,
etc…)

Price per Unit

Rs 500 / garment

Hence BEP=TFC / (P-AVC)

=50, 00, 000/ (500 - 410)

=55, 555 units of apparels

Hence to obtain the Break Even point, that is the point of no profit no loss
the firm has to sell 55, 555 units of apparels in a month.

Whereas they actually produce 1, 30,000 units of apparels on an average

in a month.

Market:

The store has a strong market in and around Udupi. It also acts as a
wholesale dealer and delivers grocery items to several shops situated at
Manipal, Gundibail, Udupi City and some of its rural customers.

Marketing Strategies:

Best Sellers Apparel Ltd is satisfied with their current market position with
existing clients both overseas and in India.

They have not given any stress on promoting the product on a large
scale.

There is no Push or Pull strategy which any production firm normally uses
for marketing.

Channel Of Distribution:

Best Sellers Apparel Ltd uses a one level Channel for distribution that is
they market directly to the client.

They do not have direct touch with the retailer or the ultimate consumers.

Sales Performance for last 6 years (1st April – Year ended 31st March)

YEAR Sales(Rs in Crores)

 2002 10.08

2003 17.02

2004 21.87

2005 18.42

2006 19.78

2007 15.98

SALES PERFORMANCE FOR PAST 6 YEARS

25

20

S
A
L
E 15
S
(

c
R
O 10
R
E
S
)

0
2002 2003 2004 2005 2006 2007
YEAR
The sales of Best Sellers Apparels Pvt Ltd Have been on the increasing
trend from the last few years.

The firm recorded highest sales in the year 2004 where it saw sales of
around 22 Crores.

The year over year sales in the year 2005 has been considerably low as
compared to the year 2004.

The sales in the year 2007 have been substantial.

Sales Trend Line:

25
SALES TREND LINE

20
S
A
L
E 15
S
(

C
R
sales
O 10
R
E
S
)

0
2002 2003 2004 2005 2006 2007 2008

Based on the past sales data using regression the sales for the year 2008 is

Estimated at Rs 20.62 Crores.

SWOT Analysis:

Strengths:

 Wide range of merchandise.

 Competitive pricing.
 Uninterrupted supply to meet the market demands.
 Quality assured.
 Brand loyal customers.
 Global market.
 Easy shipment access.
 Custom made merchandise.

Weakness:

 No direct relation with Retailers.

 Zero promotional activities.

Opportunities:

 High volume of staff.

 Establishment of new plant in Karkala.
  Increase number of clients globally.

Threats:

 Decrease in orders due to competition.

 Lack of sales
 Tailoring defects leading to rejection of orders.

Nature of Competition

The Best Seller Apparels Pvt Ltd is highly fragmented, with few organised
players and a large number of unorganised players. Price competition is
intense among unorganised players in the domestic market. The
organised segment is relatively less competitive and buyers are less
sensitive to prices, as purchase decisions are based on brand preferences.

Price competition is also severe in the garments exports business, as

Indian exporters compete intensely with each other and with exporters
from other countries. Competition is particularly fierce from china,
Pakistan, Bangladesh. While india retains a niche market for small and
medium sized orders or orders for short run products (typically garments
that frequently undergo fashion changes).

Pricing the product:

The company has adopted the pricing policy of Cost Plus pricing which is
explained as the cost of the product and the profit percentage is added to
the total cost of the product.

Bankers:

 Corporation Bank
 Syndicate Bank

Suggestions:

 Increase the scale of production

  Apply for ISO 9000:2000 certification.
 Approach new clients

Conclusion

In the union budget 2006- 07, the government has been allocated 1.9
billion $ to promote integrated textile parks which will provide better
infrastructural facilities like power, water, roads and drainage systems.
This is a positive step towards making India a hub for textile products.
Further the enhancement of the budget allocation from Rs. 4.35 billion to
Rs. 5.35 billion under the technology up gradation fund scheme (TUFS)
will benefit company’s planning expansions.

The economic position of the firm is very stable since it has achieved
reasonably well over the years.

Due to appreciating value of the rupee the textile and apparel

manufacturers engaged in exports have suffered decline in total revenue,
operating income and net profit margin. So firm is planning to expand its
clients within India.

The firm is planning a new unit in karkala in coming years to increase its
production capacity and to meet the growing demand.