Saptakoshi Paper Udghoyg a Synopsis Report by Bivek Bhattarai, Team 12 Submitted to Jensen, Klaus Hornebo INTRODUCTION TO NEPALI KAGAJ

Nepali Kagaj is one of the mostly used papers in Nepalese governmental institution Nepalese Kagaj must be used in the documents in regard to government institutions. It is also used in Nepalese courts for legal documentation.

Not only that the demand of Nepali Kagaj is very high in European country and America. Most of the Nepali Kagaj product in Nepal is supply to these countries. The only one raw material used to make Nepali Kagaj is Lokta which is available in the mountainous area above 5000 ft... Most popular place for Lokta is Solukhumbu, Darjeeling, Bajura, Jajarkot, etc...Nepal is very much popular for this.

Selling Lokta has provided employment for the local people and also provided opportunities for the small enterprises.

Nepali Kagaj is not a new thing. In the early days of using papers only these papers used to be used place but later other papers replaced it. The business requires less equipment and high manual works. A machine called Bitter machine can be used for making papers but in village areas the works of this machine also is done by people themselves.

INTRODUCTION TO SAPTAKOSHI PAPER UDGHYOG Mr. Bishnu Shrestha, the proprietor of the business started Nepali Kagaj business 7yrs ago with the machine costing Nrs 15,00,000, nearly 20 employees and 7 ropani land taken in lease for 10 yrs. He is paying Nrs 9000 per month as lease. Business is situated in Kapan Bekh. He receives lokta from Solukhumbu and other places. There is one leader who collects lokta from local people and supplies to them. He needs 20tons lokta yearly which he gets 4-6 times a year. He has to pay after he gets raw materials. Sometimes it should be paid in advance. He supplies papers on contract basis to government institutions and to foreign countries.

Why I Motivate Handicraft has been a valuable part of Nepalese heritage. They express the great taxation and proud culture of this great culture of this great taxation and proud culture of this great Himalayan kingdom. It is also assume that this type of industry are also the great pillar for the development of Nepalese economy so that I am motivated to make popularize and promote handmade product in the world Introduction to employee

My responsibility covers a wide range of activities. I am suppose to work in every department such as account department, customer services department, sales department.

Problem Formulation Problem The main problem that nepali kagaj facing is in sales. The sales rate of Nepali kagaj is low. There is not well organizing promotion. There are strong competitors of the product in national as well as in international market. There are many other competitors in the market but our main motive is to make sales. These products, which are almost wholly exported, are facing increased competition from handmade paper products from other counties such as Thailand, the Philippines, china and India due to their superior quality and competitive prices. How can Nepal kagaj promoted and improve in products, export sales in international and also the analysis of market potential? I want to answer this question by doing the following analysis

Short description of the company Market analysis Marketing mix Analysis of micro environment

- Analysis of five force fame wok of Michael porters Solution to Problem Short descriptions of the company and product

Saptakoshi paper udyog produces the paper and its poducts which is made by the Lokta raw material and it is known by the name of Lokta paper also. This sort of paper looks

peculiar soft light, smooth excellent for its attractive texture and is the most preferred in Nepal. Nepali handmade paper is prized for its attractive texture, durable character and anti pest nature.

Market analysis

Domestic Market Although handmade paper has been widely used by the Government of Nepal for many years, its domestic use is not growing significantly. Entrepreneurs estimated that the local market for lokta paper is not more than 10 percent of the total market. Lokta paper is expensive compared to ordinary paper, thus its use by the local consumers is limited by affordability.

The rising middle class and changing tastes of urban consumers, especially in the Kathmandu means there is potentials to increase the domestic market for handmade paper product. We can do trade fairs, buyers and sellers meetings; organize different seminars to promote the sales and local market of nepali kagaj. . Export Market There is reduced demand for handmade paper product in foreign market. Nepali handmade paper products are considered poor quality. Nepali handmade paper product are mostly promoted through shops for alternatives goods. Opportunity exist to market lokta paper products through other main stream channels such as stationery shop gift shop gift shops flowers shops and through the internet. It was also founds that foreign customers were unaware of the uniqueness of lokta. The report recommended that Nepali handmade lokta paper be promoted in the foreign market to improve in sales and make consumers aware of handmade paper product through making qualitative product as well as promote the product using different marketing tools.

Marketing mix The marketing mix consists product, price, place and promotion strategies that the firms use them to reach their objectives. The marketing mix principles are controllable variables, which have to be carefully managed and must meet the needs of the defined target group.

Price Pricing is only the mix which helps to generate turnover for the organization. It cost to product and design a product, it cost to distribute a product and it cost to promote the product. The price of the product should be labeled according to the market situation and product compotator . Price of the products should be affordable and competitive. Product The products of saptakoshi paper udyog are handmade paper which is made by the raw materials lokta. The product must be in quality nature. Bits of dirt and specks are invariably found in sheets of handmade paper. White and semi white sheet such as drawing and art paper or stationery papers it speaks of low quality. The proper selection of raw materials, careful cleaning of work areas, drying of sheets in covered halls, a sense of cleanliness and good housekeeping could solve the problem to a great extent to make qualitative products.

Place There must be proper distribution of products in right place and in right time. The goods must be in the right place at the right time. Making sure that the goods arrive when and where they are wanted is an important operation.

Promotion

Promotion efforts are undertaken to make customers and clients aware of the product. Different kinds of promotional effort should have to take to promote the product such as by developing brochure which outlines the product range, by trade fairs, also though websites to increase the sales of the handmade paper products. A promotional plan can have a wide range of objectives, including: sales increases, new product acceptance, creation of brand equity, positioning, competitive retaliations, or creation of a corporate image. Promotional strategy should have to be take though advertising in newspaper, face to face communication, trade fairs, brochure. The main objective of the promotion isTo increase the demand of the products. To give the knowledge about the products. Last but not the least to increase the markets and sales

Analysis of micro environment Another analysis for promotion of handmade paper is micro environment analysis. The micro-environment consists of stakeholder groups that a firm has regular dealings with. Micro environment affect in the sales and promotion of the products as well as over all successes of the business. Issues in the micro environment include

Suppliers The regularity in supply should be mentions in the supply of the handmade paper products. The good relationship should have to maintain with firms and supplies. The firm must decide on the issue how to supply the products. In the market their should not be scarcity of the produces.

Distributors The products of handmade paper should have to distribute through different distribution channels. To maintain good selling in international as well as in local market five kind of distribution channels are used. Soap for stationary and gift items, shops for alternative goods, European specialty paper shops, flower shops and internet shop.

Customers

Customers are obviously the key to sales. The firms must have to know the customer need and the firm must have to think how the products can meet the wants desire of the customers. The firm can do by getting data about need desire of the customers. Typical customers of handmade paper in national and international market are people who are conscious of handmade products and who love collecting o giving exotic gift. According to handmade paper entrepreneurs psycho-graphical profile of a typical handmade paper buyer would be a female in her fortyes-fiftyes with fine taste for handmade products. She may be love exotic products; she would be sympathetic towards products made by poor people in developing counties.

Competitors The success and behavior of any business will depend on the degree of competition in its market. There is perfect competition market of handmade paper products in domestic as well as in foreign market. There is highly competition in price sales and in qualitative products. The compotator are local paper company as well as the foreign counties like India Thailand. To compete with foreign market as well as local market the firms must have to concern in price, quality and market condition.

Analysis of five force fame wok of Michael porters In the market, an important aspect is to look at the competitiveness of it. The five forces fame wok of Michael Porter help to identify the different sources of competition that exist in the market. These forces are important in shaping the prices that firms can charge, the costs they have to bear, and the required investments to compete in the industry. The forces look at the competitive environment.

Threat of entry Among few counties Nepal is also the one country that grows lokta pape and produces lokta paper goods. And therefore the threat of entry is not so high. Other producing counties are Thailand India Philippine. There are several regions that the threat of entry is not high. First labor costs in Nepal are amongst lowest in the world and economics scale is an important aspect with regard production cost of handmade paper. Second, producer from lokta growing have far more experience with producing lokta paper and its product than other foreign country like German, America where the product be exported. Other

point is here is in combination with the low wages, that it is impossible for European countries and America to import the lokta and produce lokta paper products that can compete in price with those that are made in Asian countries. As we know the paper product are for foreign market

Threat of substitutes On a free market, buyers have the choice if there is a viable alternative. Full substitute products are products from different manufacturers that fulfill the exact same purpose. With regard the traditional paper products like notebooks, witting sets stationery the threat of substitutes concentrates to modern paper sets. Nepali handmade kagaj products compete with substitute products like gift items from other third world countries. By differentiating the products, competitive advantage can be gained compared to other gift items.

Power of buyers The power of buyers is not high in national market but the export market for Nepali handmade paper product is currently developing. There is no much information of the handmade paper products because the products to be relatively new to the foreign customer. Although the world production and consumption of handmade paper products is decreasing, the market for Nepali handmade kagaj is increasing, which means the potential for Nepali kagaj is rising.

Power of supplies A producing industry requires raw materials labor components and other supplies. This requirement leads to buyer- supplier relationship between the industry and the firms that

provide it the raw materials used to create production. The suppliers of lokta for paper producers have relatively high power. But the producer of paper is in low quantity and their bargaining power is also lower.

The international market is not relevant with regard to power of suppliers. All of the handmade produce is produced in countries where the lokta is grown as well. Main reason for this is that the production typically takes place in developing countries. Second it is not feasible for international companies to start producing these products competitively. Raw lokta, production costs, and labour costs are lower in developing countries.

Competitive rivalry Competitive rivals are organizations with similar products and services aimed at the Same customer group. There is India, Thailand, china are the competitors in the international market of handmade paper. These are the strong competitor because these count have the largest market, also has got some more experiences. But Nepali handmade product has also got good goodwill in the market compotators.

METHODOLOGY USED FOR THE CASE STUDY

Handmade paper, being one of the most important exportable handicraft goods in our country, there is a need of extensive study for its export promotion. The main objective of this report is to carry out comparative study regarding promotion and improvement in products, export sales in international and also the analysis of market potential. The detailed methodology adopted to carry out this study on export and promotion of handicraft products is discussed under the following headings:

Research design Research design is the plan structure and strategy of investigation conceived so as to obtain answer to research question and control variance. A well settle research design is necessary to fulfill the objectives of the study. The research design used in this study is descriptive and prescriptive in nature to make the study more accurate and reliable by using the available data in the systematic manners.

Source of data

Mainly data collection is two ways they are follows.

Primary source These types of dada are first hand data. Which are not used before? To make accuracy and give strong fact on the repot I have collected primary data though different sources.

I myself one of the strong sources of the repot, so I am one of the primary sources of the repot.

Though interviews with proprietor- face to face interviews is strong and effective way to contribute the strong and genuine fact which is necessary for the report. Personally asking to the proprietor about sales, about market will be very law full to the report.

Also different king of questionnaires methods are apply to collect the information. Different set of question are prepaid which is related to promotion, sales and exported market of the product and distribute to different places and customer which contribute to take view about the products and market.

Another source for primary data collection is though interviewed with employees. It is very important to collect the information though employees to meet the objective of study.

Secondary source These types of data second hand data. Secondary data are collected from different source which are listed below. These source are the strong source for analysis of the repot.

Annual reports of Handicraft Association Nepal. Various annual report , balance sheet and financial data of saptakoshi paper company .

Various booklets and journals concerned with foreign trade, Handicraft Association of Nepal and handmade paper.

From the official URL of Handicraft Association of Nepal: www.nepalhandicraft.org

Data collection technique The information regarding to this study are mainly collected from the office of Handicraft Association of Nepal from the published annual reports relating to the Export of different Handmade paper production their market in national and international level . Also the Internet is used to find some literature and other necessary data regarding this study. A prospectus published by HAN and saptakoshi paper udyog is much more useful to collect the data regarding Introduction, market and its analysis and for its Promotion function. Also other books regarding foreign trade are also studied to collect the data regarding this Study.

LIMITATION OF THE REPORT Since only the saptakoshi paper udyog is taken in consideration, it may not review the situation of all the Nepali kagaj Udyogs. But necessary information has been collected as far as possible. Due to small area coverage, sample size taken for the study is limited. Focus on market analysis and 4ps of marketing. Try to analysis of micro environment of the industry. Focus on promotion and sales of the handmade paper company.

CONCLUSION

Basically my report is based on handcraft, i.e. handmade paper promotion and its export sales in international market and also the analysis of market potential. To increase in sales mainly these type industries are targeted in foreign market. For that different promotion tools to be used to increase sales and promotion of this handmade paper. There is high potential of market of this type of product which will be the strong source of foreign exchange.