19 Agencies for Marketing Support

Monica Bansal

1. Learning Outcome:

After completing this module the students will be able to:

Understand the Meaning of Marketing Assistance
To have the knowledge about the Agencies which are giving Marketing Support
Describe the Marketing Schemes given by the Agencies
Understand the Institutional Setup for Marketing Assistance and Export Promotion
Understanding the Role of Agencies for Marketing Support to Enterprises

2. Introduction of Marketing Assistance

Agencies play a very important role for providing various kinds of marketing as well as financial assistance to the entrepreneurs for marketing their products and services in the national as well as in the international market. It gives different services and launches various schemes to the entrepreneurs to make their business successful. Without the support of these agencies the small enterprises cannot survive in this competitive environment. Marketing is an important key for Small and Medium Enterprises to make them successful in the current competitive business environment. The big business entities have very organized retail sector and the small sector is characterized by the absence of strong market base and also largely unorganized marketing network. Because of the resource limitation, the access to international market is not commensurate to their potentials. The Government is implementing various schemes, with the objective to give a better competitive environment to the products of Micro, Small and Medium Enterprises (MSME) sector in the market. The marketing assistance involves the help provided by the government to Small Scale Enterprises (SSEs) to market their products manufactured by them. Some of the schemes implemented by the government are as follows:

Government Purchase and Price Preference Policy: Assists the small-scale sector to get the fair price of its products. The small-scale sector generally faces the problem of marketing its products at remunerative prices. Therefore, the government has introduced the purchase and price preference policy scheme to ensure that the small-scale sector gets fair share of the total purchases made by the government and its departments. In 1989, under the stores purchase program of the government, 409 items were reserved for exclusive purchase from the small-scale sector. In February, 2004, the government revised the list and approved 358 items. The revised list included eight handicraft items for purchase from the handicraft sector. The government purchase and price preference policy is one of the major mechanisms introduced by the government to provide marketing support to the small-scale sector.

This policy includes the following facilities:

Providing price preference of up to 15 per cent in case of selected items.
Comprising no registration fee.
Channelizing and identifying markets through a consortium for the products of the small-scale sector both in India and abroad.

The benefits of the government purchase and price preference policy can be availed by the small-scale units that are registered under the Single Point Registration Scheme of NSIC. Following are the facilities provided by NSIC to the units registered with it:

Providing tender sets free of cost.
Exempting from the payment of earnest money.
Waiving off the security up to the monetary limit for which at the unit is registered.
Providing price preference of up to 15 per cent over quotation of large-scale units (on merits).
Providing a registration certificate.

The government purchase and price preference policy aims to compensate the small-scale sector on account of non-availability of economies of scale, weak resource base, and poor access to raw-material as compared to the large scale sector.

Market Development Assistance (MDA) Scheme: Refers to the scheme that provides assistance in market development to small-scale units involved in manufacturing and exports. The scheme provides funding for the following purposes:

Participating in international trade fairs and exhibitions under MSME India stall.
Conducting sector-specific market studies (by Industry Associations/Export Promotion Councils/ Federation of Indian Export Organization).
Initiating/contesting anti-dumping practices.
Providing reimbursement of 75 per cent of one time registration fee (w.e.f. January 1, 2002) and 75 per cent of annual fees (recurring) (w.e.f. June 1, 2007) paid to GS1 India (Formerly EAN India) by small-scale sector for the first three years for bar code.

The objectives of the MDA scheme are as follows:

Encouraging small-scale exporters in their efforts at tapping and developing overseas markets.
Increasing the participation of representatives of small-scale manufacturing enterprises under MSME India stall at international trade fairs/exhibitions.
Increasing export activities of small-scale manufacturing enterprises.
Popularizing the adoption of bar coding on a large scale.

Vendor Development Programs (VDPs): Refers to the programs organized by MSME Development Institutes (MSME-DIs) for the small-scale sector. Under these programs, MSME-DIs facilitates interaction among selling enterprises for business and identifying the demands and preferences of buyers. Apart from this, VDPs help in promoting the talents of small-scale entrepreneurs and their industrial ventures. In addition, these programs help buyers in locating appropriate sellers. MSME-DIs organizes VDPs both at the national and state levels.

3. Agencies for Marketing Support

There are various agencies which are giving marketing assistance to the entrepreneurs which are discussed in detail as follows:

(A) Assistance by National Small Industries Corporation (NSIC)

NSIC is associated with the exports and marketing of Small Scale Industries products to other countries. The broad categories of products marketed by NSIC are:

Builders Hardware
Garden Tools & Accessories
Handicrafts
Electrical Products & Accessories
Sports Goods
Sanitary Fittings
Textile and Textile Products
Leather Products
Auto Components
Architectural Iron Mongery
Light Engineering Goods
Hand Tools
Castings & Forgings

NSIC assists small scale industries to market their products in the international market and has adopted a single window assistance approach for export of small industries products abroad. NSIC’s services to its export associates comprises of the following:

Exhibitions / Trade Fairs & Buyer Seller Meets: The products of the small scale sector are displayed in specified Trade Fairs / Exhibitions at concessional charges. Enquiries, specifications & samples received directly or through its specified indenting agents are passed on to the concerned small scale units for development and final offer. NSIC assists units to do costing and pricing for international markets and also assists them by providing technical information.
Absorption of Marketing Overheads & Export Promotion: NSIC also assists the small scale sector by providing assistance in negotiations with the overseas buyers by sending samples and for subsequent correspondence for procuring export orders at our cost.
Raw Material Assistance Program: The export orders received by the corporation are passed over to the concerned associate units for shipment. For such order NSIC also provides raw material assistance at concessional rates of interest as notified by RBI within specified norms & conditions of the corporation.
Assistance under Leasing for Technology Upgradation: Small scale units which require technology upgradation for executing export orders are considered on priority by NSIC for providing necessary machines etc. under our leasing scheme.
Assistance for Shipping: Assists the small scale units in making shipments and assists them to prepare all related / shipping documents.
Export Incentives: All exports benefits are claimed and passed onto the export units without any deduction or else NSIC gives the option to units to claim the benefits themselves.
Export Documentation: All exports documentation with respect to shipping, claiming incentives, negotiations of documents and post shipment activities are done entirely by NSIC and the units need not register itself with other export related agencies.
Assistance for Project Export: Also exports Small Industrial Projects with emphasis on relevant technology to developing countries. Project formulation is carried out in-house by NSIC and plant & machinery is supplied from quality manufacturers after due inspection.
Service Charges: 3 per cent service charges on Free on Board (FOB) value is levied.

(B) Institutional Setup for Marketing Assistance and Export Promotion

There are various institutes set by the government of India for promoting exports and helping organizations in export process and documentation. In addition, the government provides assistance to the Indian entrepreneurs through export subsidies and export credit. Ministry of Commerce helps in the formulation of trade policies and programs. It has set up various institutes for export promotion. Some of them are discussed as follows:

Trade Fair Authority of India: Fulfills the following objectives:

Helps in the development of new products for expanding exports
Sets up showrooms in India as well as abroad to sell exported products
Organizes trade fairs and exhibitions to promote exported products

Trade Fair Authority of India provides information to exporters through its journals known as Udyog Vyapar Patrika, Journal of Industry and Trade, Indian Export Service

Indian Institute of Foreign Trade (IIFT): Refers to an organization set by the government of India to help increase exports. It performs the following activities:

Conducts the surveys, such as area survey, commodity survey, and market survey
Organizes and undertakes research related to international trade
Arranges the training programs for giving training on modern techniques of international trade
Undertakes research on exploring raw materials for the packaging industry
Keeps the Indian organizations abreast with ongoing changes in international field

Export Promotion Councils: Refer to non-profit organizations that examine different aspects of export promotion, such as price, marketing, transportation, packaging, and labeling. These councils help in the following:

Developing trade contracts
Participating in trade fairs and exhibitions
Publishing information related to foreign trade
Sponsoring the foreign tours
Conducting market surveys

In India, there are around 10 export promotion councils under the administrative control of Department of Commerce and 9 export promotion councils related to the textile sector under the administrative control of Ministry of Textiles.

Export promotion council for Small and Medium Enterprises (SME) of India helps in assisting SMEs to export their products, establish contact in foreign markets, and provide financial assistance for their growth. This council provides the following assistance, guidance, and support to Indian SMEs:

Helps in providing marketing assistance
Identifies overseas buyers / importers / suppliers
Identifies investors and partners for joint ventures
Appoints marketing representatives / agents
Helps in market research and market survey
Provides due diligence reports about overseas buyers /suppliers
Sources raw materials and quality products at competitive cost
Involves permanent display centers in various countries
Helps in buyer-seller meets
Provides exclusive platform to Indian SMEs in Indian and overseas exhibitions and trade fairs
Organizes trade fairs / exhibitions, conclaves, conferences, and seminars
Assists in taking appointment of foreign representatives

Export Credit Guarantee Corporation (ECGC): Plays an important role in promoting exports. ECGC was established in 1964 and owned by government of India. Located in Mumbai, Maharashtra, it covers the risk of exporters who export on credit. Its main functions are as follows:

Helps in providing information on credit worthiness of importers
Guides exporters when they face any difficulty
Provides insurance protection to exporters against credit risks
Helps in obtaining the finance from financial institutions

Export Houses: Refer to trading houses that specialize in export of products. Any exporter can become a member of the export house by fulfilling certain criteria. The eligibility criteria to become a member of an export house is that turnover of an exporter of three preceding years should be at least Rs 15 crores. Export houses can act as:

International traders who export and import for their own account
Export agents who are paid commission for acting on behalf of another party
Export management organizations that handle exports and indulge in countertrade, which involves exchanging goods with goods rather than cash

4. Export Promotion Measures by Government of India for SSEs

Micro & Small Manufacturing Enterprises (MSMEs) products share about 34% in national exports. MSMEs play a crucial role in the total export of the country. Therefore, the Indian government has taken several measures, to promote exports activities of MSMEs. Some of the measures are as follows:

Marketing Assistance and Export Promotion Scheme

Participation in the International Exhibitions/Fairs.
Training Programmes on Packaging for Exports
Marketing Development Assistance Scheme for MSME exporters (MSME-MDA)
National Award for Quality Products

1. Participation in the International Exhibitions/ Fairs

Office of the Development Commissioner (MSME) is participating in some of the selected International Exhibitions/ Fairs since 1985. It is purely promotional scheme to give exposure to the products of micro, small enterprises which otherwise are not in a position to participate in the exhibitions/ fairs at their own cost. Under the scheme, exhibits of the selected export-worthy units are displayed in the exhibition that provides an opportunity to MSEs in demonstrating their capabilities before the international community. On an average, this Office has been participating in 8-10 number of International Exhibitions/ Fairs abroad every year and 200 MSEs have been benefited. For confirm participation, the unit has to send 50% of space hiring charges of their booked space (min. 6 sq.mtr.) through MSME-Development Institutions (Formerly SISIs) by a DD favouring PAO (MSME), New Delhi at least 45 days advance of the commencement of the event or till space is available.100% subsidy on space rent is available to sc/st women entrepreneur and entrepreneur of NE region. The participating units will also carry/ manage their exhibits (to and fro) including custom clearance etc. If anybody wants more space, they can book in multiple of 1×3 sq.mtr. on pro-rata base and would be required to pay on pro-rata basis. 75% Subsidy on air fair of economy class to general category of entrepreneur (100% to sc/st women entrepreneur and entrepreneur of NE region)

II. Training Programmes on Packaging for Exports

India faces formidable hurdle in meeting and matching the packaging requirements of her exportable products in the markets abroad. The main objective of scheme is to generate much needed consciousness in the industry about the packaging problems of MSME exporters and to educate the entrepreneurs about the latest packaging techniques and designs of the packaging. These programmes on Packaging for Exports are conducted since 1979 by all the field institutes in collaboration with Indian Institute of Packaging and GS1 India (formerely EAN India) ( A Bar Code solution provider ). The programme is of One, Two & Three days duration and 20 to 35 existing and potential entrepreneurs have been participating in each of the programmes. As per instruction of IF Wing, only 50-60 percent (20 percent in NE region and J&K) of the total cost of the programme are recovered from the participants as participation fee. 20-25 programmes are being conducted every year throughout the country.

III. Market Development Assistance Scheme for MSME exporters (MSME-MDA)

As part of the comprehensive policy package for MSMEs, MSME-MDA scheme has been announced in August 2000 and came into operation w.e.f. 30 th August, 2001. With a view to increase participation of representatives of participating units, the provision of MSME-MDA Scheme has been modified recently. The major changes in the earlier scheme are as under:

1. The Govt. of India will reimburse the 75% of air fare by economy class and 50% subsidy on space rent. to general category of Micro manufacturing enterprises.(ii)100% to sc/st women entrepreneur and entrepreneur of NE region (iii) The total subsidy on air fare, space rent & shipping cost of exhibits will be restricted to Rs.1.25 lakhs per unit for manufacturing enterprises or actual, whichever is less. (iv) Any unit can avail of this facility only once a year and (v) Only one person of the participating unit would be eligible for subsidy on air fare. (vi) The booking of minimum 6 Sq. Mtrs. is allowed.

2. The amount of 50% of space hiring charges shall be sent by a DD favouring PAO (MSME), New Delhi through MSME-Dis (Formerly SISIs)along with passport particulars plus first and last two pages of valid passport of their visiting representatives.

3. The circulars are issued to Director, all MSME-DIs (formerly SISIs) for selection of Small/ Micro manufacturing enterprises whose products conforming to the International Standards & Quality.

4. One SIDO officer will be deputed to each fair for coordination of MSME-India stall.

In addition, the scheme also provide for financial assistance upto Rs. 2.00 lakhs for commissioning specific market studies and assistance for initiating/ contesting anti-dumping cases is available to MSME Association limited to 50% of the total cost of Rs. 1.00 lakh whichever is less. Provision for reimbursement of 75% of one-time registration fee paid to GS1 India by MSME unit for adoption of Bar Coding (w.e.f. Ist January, 2002).75% of Annual recurring fee of bar code is also available (w.e.f. 1st June 2007) for the 1st three years periodTo avail financial assistance under the scheme, application may be sent alongwith requisite documents etc.

IV. National Award for Quality Products

The objectives of the scheme are as follows:

a. To encourage small scale industries to produce quality products conforming to national and international standards.

b. To propagate a culture of quality consciousness amongst a vast section of Small Scale manufacturing units.

c. To instill a sense of confidence of small industry products in the minds of the domestic consumers and to enhance the image of Indian products in export market.

These awards are given on the basis of recommendation by the State/ UT Level Selection Committee and the final selection by the National level Selection Committee for every calendar year.

V. Packaging for Exports

Role of packaging for exports has gained much significance in view of trends in the world markets. The need for better and scientific packaging for exports from small sector was recognised long back. With a view to acquaint MSME Exporters of the latest Packaging standards, techniques etc. training programmes on packaging for exports are organised in various parts of the country. These programmes are organised in association with Indian Institute of Packaging which has requisite expertise on the subject. Basic objective of these programmes is to generate the much needed consciousness in the industry and to educate the entrepreneurs about the scientific techniques of Packaging. With the assistance of EAN India to sensitize Indian exporters about barcoding. 7 training sessions were conducted in 2000-01 at different locations across the country. However, bar code topic is added in the said programme.

VI. Technical & Managerial Consultancy Services

Technical & Managerial Consultancy Services to the MSME manufacturers/exporters is provided through a network of field offices of this office so as to ensure higher level of production and generation of higher exports.

VII. National Awards for Quality Products: With a view to encourage the small scale units for producing Quality goods, National Awards for Quality Products are given to the outstanding small scale units, who have made significant contribution for improving quality of their products. The scheme is being operated since 1986. Winners of National Awards get a Trophy, a Certificate and a Cash Prize of Rs.25,000/-($559.6) National Awards encourage Small Scale Industries units to produce quality goods which further enables them to enter into export market.

5. Summary

The module has mentioned differences among micro, small, and medium enterprises on the basis of investment ceilings. It has explained the characteristics and significance of SSEs. In addition, the module has discussed the marketing assistance given to the SSEs by Indian government in detail. Further, it has detailed upon various political, economic, technological, and socio-cultural factors that influence schemes provided to the SSEs. The module has explained industrial policies and strategies related to SSEs at length. Apart from this, it has detailed upon on establishing entrepreneurial system and the schemes for the development of small scale sector. The module has also discussed linkage between small and large-scale enterprises. Further, it has described organizational structure of an SSE. In the end, the module has elaborated on the export potential of SSEs and their participation in the total exports of the country.

Learn More

Few important sources to learn more about Financing of Enterprise: Role of Agencies for Financial Support

are as follows:

Trehan, Aplana (2012). Entrepreneurship. New Delhi-110002: Dreamtech Press.
Vaish Kalpna (1993).Entrepreneurial Role of Development Banks in Backward Areas. New Delhi-110059. Concept Publishing Company.
Ahmad Khan Mukhtar (1992).Entrepreneurial Development Programmes in India. New Delhi. Kanishka Publishing House.
Janakiram B, Raveendra P.V., & Srirama V. K. (2010). Role and Challenges of Entrepreneurship Development. New Delhi-110028: Excel Books.
Prasain G. P. (2003). Entrepreneurship Development. New Delhi-110002: Jain Book Agency.
Robert D Hisrich (2007). Entrepreneurship. New Delhi. Tata McGraw-Hill Publishing Company Limited.
http://www.oecd.org/cfe/smes/
http://india.gov.in/financial-assistance-entrepreneurship-development-institutes-ministry-micro-small-and-medium
http://smallbusiness.chron.com/various-sources-finance-available-entrepreneur-2294.html
https://books.google.co.in/books?id=gbU9dfydYuoC&pg=PA138&lpg=PA138&dq=financing+of+entrepreneurship+development&source

Points to Ponder

The big business entities have very organized retail sector and the small sector is characterized by the absence of strong market base and also largely unorganized marketing network.
The marketing assistance involves the help provided by the government to Small Scale Enterprises (SSEs) to market their products manufactured by them.
Micro & Small Manufacturing Enterprises (MSMEs) products share about 34 per centin national exports.
Exhibits of the selected export-worthy units are displayed in the exhibition that provides an opportunity to MSEs in demonstrating their capabilities before the international community.
With a view to encourage the small scale units for producing Quality goods, National Awards for Quality Products are given to the outstanding small scale units, who have made significant contribution for improving quality of their products.