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PROJECT R EP OR T O N

SUPPLY CHAIN MANAGEMENT O F CUT-FLOWERS IN I ND IAN

M AR K ET

Masters of Business A d m in ist r at ion BA TC H (2011-2013)

O F SIKKIM MANIPAL UNIVERSITY

MBA-3 TH Se m Un ive r si ty R oll No.

1305016709

Sup er vise d By: - Submitted B y: -M r . Sunny Kumar



PREF A CE

The present report pertains to research project"

S upp ly Ch a in Management Of Flowers In Indian Ma r ke t ".

A case study is primarily conducted to examine the s ign i f ic a nc e,efficiency, advantages of scheme of participative management a ndots practical validity in securing efficient supply chain in the m a r ke t

p r e va ili ng .

The management tools and management techniques are f u r t h e r

analyzed and further viewed for the study of the case, which wou ld

help in the up-liftment of the current market t r e nds .

The scope of study extends to all organizations which are e ng a g e din any kind of service. Sincere efforts have been undertaken t opresent true p ic t u r e.

But certain discrepancies might have crept in because of t i m econstraint, place constraint and certain other un a vo id a b lecircumstances, beyond my con t r o l.



AAAccck k k nnn ooowwwllleeedddgggeeemmmeeennn ttt

"No man lives on an Island journeying through life al on e."

The truth in this statement is not far to seek, man ' s interdependence isknown to exist from times immemorial behind ever y successful event of ou r

life, and we often find many hands involved. This manuscript is n oexce p tion .

This page is thus dedicated to each and ever

y one who has in some way or

other helped in the successful completion of this P r o j ect .

I would like to exp r ess my gratitude to Prof. J. B. Nadda, Director and al lfaculty members of Sikkim Manipal University who p r ovide me opportunityto work for the project " Supply Chain Management of F lower s inIndian Market". Under their guidance and also for p r ovid ing meinvaluable guidance during the cou r se of my stud y.

It is both my pleasure & duty to acknowledge with all regards to M r . K .C .Rojhe - lecturer in Marketing, My project guide for his valuable gu idance

I am grateful to p ersons such as gr owe r s, merchants, brokers, r etai ler sinvolved in the p r ocess , for their valuable support and help in collecting therequired data needed for the stud y.

No words can adequately exp r ess my debts and thanks to my friends for

encou r agi ng, helping and supporting me.



I ND E X

Se r ia l No. TOP IC

1. Pr ef ace

2. Ac kn owle dgem ent

3. Int r odu ct ion

4. Review of Liter atu r e

5. R esea r ch M ethodology

6. Major Cut F lowe r s P r eva ilin g in the Ind ian F lowe r M ar k et

7. Result and d iscussio n

8. Marketing m ana gem ent

9. Marketing cost and margin of i nter m ed ia r ies

10. Marketing p r o b lem s

11. Summary and co nclusions

12. Suggestion and r ecomm enda t ion

13. R efe r ence

14. A nn exu r e



I NT RO DU CT IO N

Floriculture is the art and knowledge of growing flowers to perfection. Being a branch of horticulture, it deals with the cultivation of flowers and ornamentalcrops from the time of planting to the time of harvesting. It also includes

production of planting materials through seeds, cuttings, budding, grafting andmarketing of flowers and flower produce.

In Meghalaya flower lovers originally practiced floriculture as a hobby. Today,the growing demand has lead to flowers also being grown for commercialreasons. Meghalaya is known for a variety of rich flora and species of orchidsthat grow wild. The government has come out with a scheme to provide thegrowers with disease free planting material, organic/inorganic fertilizers, plant

protection chemicals, garden tools and implements for a minimum area of 2000

square metres along with a package of practices for commercial production. Afew of the recommended ornamental crops are orchids, chrysanthemums,gerberras, carnations, liliums, strelitzia reginae, gladiolus, asters, marigolds,statice, gomphrenas, helichyrsums, zinnias, roses and different kind of house

plants.

In Tamil Nadu, flowers such as rose, malligai, chrysanthemum, marigold, jathimalli, marikolundu and carnations are grown. Edward Rose and Andhra RedRose are two varieties of roses grown in the plains of the State. They need well -drained sandy loam soil.

Consumption of flowers in the southern States is much higher than in thenorthern States. Flowers are used by florists, flower rentals, perfume industriesand as garlands. Centres where modern flowers are in demand are big cities likeMumbai, Pune, Bangalore, Chennai, Hyderabad, Delhi, Chandigarh, Lucknowand Calcutta.

In the Andaman and Nicobar Islands there are around 2000 species offlowering plants, of which nearly 215 are endemic to these islands. Theseflowering plants include around 110 species of orchids. Here plantation cropslike coconut are used as an intercrop for growing orchids. Coconut pla nts also

provide shade to the orchids. Other flowers, ferns, cycads, succulents, bambooand ornamental medicinal plants also grow naturally in forests.



In Orissa, floriculture involves the growing of flowers like rose, crossandra, jasmine and marigold.

In Punjab floriculture mainly includes the cultivation of different species ofgladiolus. Village Majra, near Chandigarh and village Dappar near Patiala are

main centres of gladiolus production in Punjab.

Flowers that are cultivated in Andhra Pradesh for floricultural purposes are therose, jasmine, chrysanthemum and crossandra. The main districts that producethese flowers are Hyderabad, Rangareddy, Guntur, Prakasam, Kurnool,Cuddapah, Ananthapur and Chittoor.

The cool temperate climate of Jammu and Kashmir makes it the ideal place forgrowing flowers. Some of the flowers cultivated here are wisterias, tulips,carnations, dahlias and lilies.

The pace of development of the floriculture industry in the present is very slow because it is conditioned by the poor adoption of techniqu es of production andineffective transportation of the final produce, it is also influenced by an inappropriate market place and improper handling which decreases the shelf lifeof the flowers.Effective use of the factors of production is a major concern of planning atmicro levels. Although, Directorate of Horticulture have done excellent work increating awareness among the farmers of the state about the latest technique of

production management but farmers are hesitant to adopt them as they are notaware about, how to market their product efficiently to achieve their goals of

profitability.In spite of having niche advantages and in view of increasing demand atdomestic and international markets, the state has not able to make muchheadway in this area . Keeping in view the above facts, an attempt has beenmade to understand marketing management of some flowers such as carnation,gladiolus, chrysanthemum and lilium grown in the northern region of India .inthe study an attempt has been made to study the supply chain management andmarketing of cut flowers in the Indian market :

To study the marketing ch annels, cost incurred and margin of cut flowers. To

prove into the marketing problems faced by the growers and suggest strategiesto overcome the problems related.



R E VIE W O FL ITE R AT UR E

Keeping the objective of the research in to consideration, the literature has been

reviewed for marketing channel and resource use efficiency aspects of flowers.

Raghava (1996) reported that total area under flower corps on India wasestimated to be around 34000 hectares, which included 24000 under traditionalflowers and 10000 hectares under modern flowers. The returns from floriculture

products were estimated then to be ' 205 crores, which includes ' 100 croresfrom modern flowers.

Balasubramanayam (1997) summarized information about the technical andeconomical aspects of cut flowers. He laid stress on the availability of coldchain from production poin to auction center for effective and efficient

marketing. According to his estimates a farmer can get more than ' 75 lakhs per

hectare in the domestic market. Net profit per hectare has been worked out to be' 40 lakhs, in the 2 nd year, ' 28 lakhs in the 3 rd year and ' 40 lakhs in the 4 th year.

Gill and Aullakh (1993) reported that cut flowers production can be programmed for exports from the country. He pointed out that according to theagro-climate of Mercora in Karnataka, Pune, Nasik and Maharashtra, part ofHimachal Pradesh are best suited for the cult ivation of most of popular kinds ofcut flowers.

Kaul and Dadlani (1995) reported that the total area under floriculture inHimachal Pradesh during 1993 -94 was estimated at about 50 hectares.Important flower crops being presently grown in Himachal Prades h areGladiolus, Marigold, Carnation, Chrysanthemum, Lilium, Rose and otherBulbous crops. Now withstanding the potential (agro -climate, unexploitedmarket, tourism, agricultures etc.) Existing in the state, some inherit problemslike non-availability of quality planting material high incentives of theenterprise requirement of higher level of technology for commercialfloriculture, absence of adequate research, development and training,infrastructure etc. have been instrumental for the slow pace of d evelopment ofthis important field in the state.

Oberoi (1997) stated that domestic market for floriculture in India should begiven due emphasis on the commission agents or wholesalers, a commission of



10-15% is charged. The study found that the domestic flower has seen a steadygrowth of almost 35% per annum as compared to the world flower marketgrowth of 12%. It is predicted that by the year 2000,India will be amongst the top 5 flowers exporters in the world. For achievingthe same, irregularities in the marketing and production should be removed.

Regulated auction house should be setup, loans or special schemes for thedomestic growers should be drafted, producers should have an access toappropriate chemicals, etc. to combat various diseases and pes ts. Back up in theform of crop insurance will go a long way in instilling confidence in thegrowers to invest in this trade.

Preeti Sharma (1996) reported that in Himachal Pradesh floriculture farmersallocated 11.81% of their total operational holdings under flower cultivation.The share of flowers towards total family income was estimated more than50%. In 2007-09 the National Horticulture Board has reported that area under

floriculture in the country was 88000 hectares.



R E SE ARCH M ET HO DO L OG Y

SAMPLING DESIGN

This study deals with the economics of production and marketing ofcommercial flowers grown in Solan district of Himachal Pradesh. Solan districtwas selected purposively because more than 45% of the total area undercarnation and 30% area under Gladioli fall under the district. Multi stagerandom sampling technique was adopted in order to select the respondents. Inthe first stage, a list of flowers growing pockets of the district was producedfrom the office of the Joint Director Horticulture, Solan .

In the second stage, a list of flower growers was obtained from the office of thedepartment of the Joint Director of Horticulture Solan, from each selected

pockets. Finally, the ultimate sample of 30 (15 of each flower) flower growerswas drawn by adopting simple random sampling procedure.

To study the Marketing management aspect the Delhi market was selected purposively to study the supply chain aspects of the selected flowers. During thecourse of navigation it was found that, the wholesale and retail market structurein Delhi, 5 wholesalers/commission agents and 10 retailers were selected

randomly for detailed stud y.

DATA COLECTION

Both primary and secondary data were used for this study. The reference periodof the study was 2009 -2010 the primary data were collected on the welldesigned and pre-tested schedules through personal interview method from theselected farm household in the producing areas and wholesalers/commissionagents and retailers in local Chandigarh market, detailed information on the costof cultivation of Marigold, Carnation and Gladioli, their yield rates and pric es,marketing function, chann els, costs and problems faced by farmers wereobtained from wholesalers and retailers respectively, from Chandigarh market.The second information was collected from various reports and publications ofIndia and Director of Horticulture Shimla.



Analytical F r am ew or k

MARKETING:

To estimate the marketing cost and margins of intermediaries ' mode method '

was used. To study the marketing pattern the following concept of marketingcost and margins have been used for different agencies in different c hannels:

a) Absolute Margin (am) = ms - (mb + me)

Where,

ms = Selling price of middleman

mb = Buying price of middleman

me = cost incurred by the middleman

b) Product Price (pf) = ps - pc

Where,

ps = Producers selling price

pc = Cost incurred by the producer in marketing of the product

c) Producers share in the consumer ' s rupee (ps) : pp/pc*100

Where,

pp = Producers price



pc = price paid by the consumerd) Total cost of marketing (tc) : pc + mci

Where,

pc = Cost incurred by the producer in the marketing of produce

mci = Cost incurred by the middleman

Tabular Analysis

Tabular method was used to study the marketing costs, price spread etc.

the results were interpreted by working out averages and percentages.

L IM IT AT IO N O F THE S T UDY

The study was based on the data collected for one year (2009 -10), whichmay not necessarily hold true for other periods as well.

The data collected by the survey method may have included memory, bias of a limited type of the respondents.



M AJ O R C UT FL OWE R S PE R VA IL I N G I N T H EI ND IAN FL OWE R M AR K ET :

C ar na t ions

Carnations belong to the Dianthus genus, and are sometimes referred to asDianthus in seed and plant catalogs.

The word Dianthus comes from the Greek, and literally means the "Flowers ofGod". The meanings of the various colours of carnation flower often have to dowith affection or love. The blossom's sweet fragrance probably has something todo with that.

Three Basic Types Of Carnation - Carnations come in three basic types of plants:

� Those having a single large flower on a single stem

� Plants having a number of smaller blossoms on each stem

� Dwarf varieties, also having several blossoms on one stem

The carnation flower you are most apt to get if ordered from a florist, will be thelarge blossom on a single stem. These can also be the most difficult to grow,

being truly specimen plants in many instances, and a great deal of work goesinto growing a carnation that can truly be a show piece.

By and large, however, carnations are easy to grow in t he home garden, and the blooms, whether single or many per stem, will not disappoint. The easiest wayto grow carnations is from cuttings, which can be taken in late fall or winter andsimply rooted in sand and placed in pots.



R O SE

Roses are flowering perennials of the genus Rosa. You can find more than 100species of roses, and there are countless subspecies and cultivars. Rose flower isundeniably fragrant and beautiful, and its fragrance is also among the most

popular flowers in the world. Their fragrance and the beauty that they arefamous for is what makes these flowers so highly sought after in all parts of theworld. Most of the rose species are native to Asia, with a few native to Europe,

Northwest Africa and North America. Rose flower vary quite a bit in size. The most popular color is red as those flowers symbolize love and passion. Inancient Greece, Egypt and Rome, they were associated with goddesses of love.Red roses are a favorite gift for Valentine ' s Day and the flowers come in manydifferent shades of red. You can find roses in other colors as well, such as:

blues, whites, pinks and yellows (these flowers are often hybrid). Different cultivars have been developed to emphasize color, scent, shape, size and diseaseresistance, among many other attributes.

The edible fruits produced from this flower is called rose hips and many people believe the fruit has healing properties. An aromatic oil that is made by steam -distilling petals of rose, known as Attar of Rose, has been used by people as anelement in perfumes for centuries. Almost all cut roses that are sold by floriststoday are the hybrid tea variety. Roses can grow as vine -like climbers or as

bushes, and depending, the blossoms can set singly on its individual stems or

also in clusters of up to a dozen on a single spray.

Artificial varieties of rose are abundantly available. They are used in displays inmany homes. These favourites are often copied and then presented in a slew ofdifferent materials (often in silk material). Roses are reproduced more than anyother flower.



GL AD IO L US

Gladiolus is a very popular flower for the garden. Despite the extra care thesetender perennials require, a great many gardeners plant, plant and replant thesetall, flowering spikes every year. And who can blame them. Gladiolus makes awonderful addition to the outd oor flower garden or the indoor flower bouquet.

While gladiolus can now be found in most parts of the world, these flowers areoriginally from Africa and the Mediterranean.

Gladiolus is normally identified by their tall flower spikes that are covered withshowy funnel shaped flowers. The flowers at the bottom of the spike will openfirst and then the ones above them will open and so on until the entire spike is in

bloom. A gladiolus can bloom from spring through autumn, which is anotherreason for their popularity.

People commonly think that gladiolus come from bulbs. This is not true; theyare actually from corms, which look very similar to bulbs.

There are over 10,000 cultivars of gladioli and every year a few dozen are addedto this number. Gladiolus are very easy to cross-breed, so it is almostguaranteed that if you can ' t find one in the right colour now, just wait and onewill come on the market.

There are three groups of Gladiolus:

Grandiflorus Group: The plants in this group flower from late spring to earlyautumn. The gladioli in this group normally only produce one flower spike fromeach corm.

Nanus Group: The plants in this group bloom in early summer. These are thegladiolus that are most commonly used for things like corsages and floralarrangements. Normally, each corm will produce a few spikes.

Primulinus Group: The plants in this group will flower from early summer tolate summer. This gladiolus will produce one very thin spike per corm.

The corms of the gladiolus must be dug up and stored for t he winter in all but

the warmest regions. To store gladiolus, dig up the plants 6 -8 weeks after theirfinal bloom or before the first frost. Cut the stem off just above the corm. Dipthe corm in a fungicide and allow the corms to dry for a few weeks before

packing them away in a cool, dry place. Many people will only keep the cormsthat were produced by the plant that year and will discard any older corms.



Gladiolus is propagated from either seed or through the multiplication of theircorms. Some species wi ll grow best when grown from seed but for the most

part, gladiolus do very well when grown from their corms.

Gladioli grow best in fertile, well -drained soil in full sun to partial shade. Plantthe corms the same way you would plant bulbs.

Despite the work required to keep a garden full of gladiolus, planting some ofthese great cut flowers is well worth the work.



O RC H ID

Orchids are the second largest Natural Order in the whole world of botany, being very diverse. There are thousands of varieties of Orch id

species and over a hundred thousand hybrid Orchids. There are Orchidflowers that can be found with a very wide range of characteristics, withOrchids existing in nearly every color and shade. There are manyvariations in size and shape of Orchids.

• Some Orchids do grow on the ground, usually in marsh land, and arecalled Terrestrial Orchids. Paphiopedilums and Cymbidiums ateterrestrial Orchids.

• Epiphytic Orchids grow mainly on rocks and trees, where they hold onwith thin or thick roots and take in nutrients that fall to them, as well as

absorb sunlight that reaches them.• The last kind of Orchids are Saprophytic Orchids and there aren't many

of these. They do not have any green leaves, and live on decayedvegetation. As they aren't very beautiful us ually, beginner Orchid growersdon't normally seek these out.

There are many kinds of orchids you can choose from to grow. Here's asummary of some main orchid types:

� Phalaenopsis O r ch ids

Care is easy, flower spike blooms for about 2-3 months, shade is preferred.

� Dendrobium O r ch ids

Care can be easy to not so easy, flower spike blooms 2 -3 months. Brightlight preferred. There are many different kinds.

� Oncidium O r chids

Care is easy to intermediate to easy, flower spikes bloom 2 months, sunnywindow is preferred, with about a half day of sun.



� Cattleya O r chids

Care is intermediate in difficulty, flowers bloom 1 -4 weeks, sunnywindow is preferred.

� Miltonia O

r chids

Care is intermediate, flowers bloom about 1 -2 months, indirect sunlight is preferred.

� Paphiopedilum O r ch ids

Warm Paphiopedilum Orchids: Care is easy to intermediate, flowers bloom a 2-3 months, shade is preferred. Warmer temperature needed.

Cool paphiopedilum Orchids: Care is intermediate, flowers bloom 2months, shade ispreferred. Cooler temperature ne eded.

� Vanda O r ch ids

Care is intermediate to difficult, flowers bloom about 2 months, sun preferred. High humidity is important, often meaning these need to begrown in a greenhouse.



L IL IUM /L IL Y

Lily flowers are a very popular flower for the American gardener. Many people,even if they are not gardening types, have some species of lily growing in theiryard.

Lilies are bulbous perennials. Their bulbs differ slightly from the common bulbin that the bulbs are actually several fleshy scales that overlap to form the bulb.

The lily plant is broken up into 9 Divisions. Those Divisions are:

Division I - Asiatic hybrids are lilies that are descendants of asian species.

Division II - Martagon hybrids are lilies that are primarily species that are

descendants of the L. martagon species. These frequently have an unpleasantsmell.

Division III - Candidum hybrids are descendant of mostly the L. Candidumspecies and other European species.

Division IV - American hybrids are the descendants of American species.

Division V - Longflorum hybrids are the descendants of L. formosanum and L.longiflorum species.

Division VI - Trumpet and Aurelian hybrids are descendants of Asiatic speciessuch as L. regale, L. henryi and L. sargentiae.

Division VII - Oriental hybrids are decendants of East Asian species, includingL. autatum, L. japonicum and L. speciosum species

Division VIII - This division is for Other Hybrids. These are normallycombination species that are bred between species of two different divisions.

Division IX - This division is for All True Species and are and species that areoriginal breeds.

Lilies need a cold dormant period in order to thrive. This means that they grow best in areas that get at least a cool winter. Most lily plants grow in Zones 4-8,though some from Divisions I and II will grow in Zone 3 as well. If you live in



Zones 9 or 10 and you would like to grow lilies, you will need to dig them upand cold store them for 2 to 3 months each year.

The lily plant grows best in well -drained soil that has a good amount of humusor compost in it. Most lilies like acidic to neutral soil in full light, but as withany species with this many varieties, a few can be found that like either alkalinesoil or shade.

In general, lily flowers are in bloom from spring to autumn. Spring bloomerswill flower from mid spring to early summer. Midseason bloomers will flowerfrom early summer to midsummer. Late season bloomers will flower from latesummer until first frost.

Lilies are so easy to grow that some varieties can be found growing wild inlarge numbers. Normally, a small lily plant will mature into a full sized gardenfilling plant in just a few years. The lily is certainly a best pick for those who

are just starting out and a proven winner for those who have been gardeningsome time.



RESULTS AND DISC IO USS IO NS

DELHI WHO LE SA LE M AR K ET ST R UC TUR E:

Domestic flower trade has been totally an alien trade for the masses. In recentyears, with the expansion of floriculture industry, there has been significantgrowth in the domestic market, Delhi market has shown tremendous growth inthe past few years undoubtedly in the wholesale marketing, the number of retailoutlets, varieties of products, still remains irregular and unorganized.

Until now, no regulatory organization has come up in the flower marketingsystem to control the non -desirous activities in the market. Delhi flower marketis an open type market and has not even been granted authorized place to carryout the trade. Lack of proper storage facilities, proper packing areas, and shopsall stall rise to operational difficulties due to occasional rains, high humidity andheat. There is no system of membership or commission to any organization,flowers are dumped directly on the ground for expos ure to the scorching heatand environment, thus damaging the quality of the product. The market ischaracterized by wide price variations and poor realizations. As a result the

producers remain deprived of the real worth of their produce affecting theirincome or earning adversely.

The flower business in Delhi is held under the categories of TRADETIONALAND CUT FLOWERS. Both the flowers are sold at wholesale level in differentmarkets and have slightly different market structure.

C O NNAU GH T PLACE WHO LE SA LE M AR K ET :

This market is located near coffee home, baba kharag singh marg, nearcannaught place.There are about 50 wholesalers or commission agents who facilitate the sale of

produce of the growers. It was found that on an average, the produce of at least100 growers arrive in this market daily. The number of labourers who areoperating in the marketing in the market was estimated around 125. The



commission agents charged a commission of 15% in the sales price from thesellers. This market is operated fron 6:00 AM to 9:30 AM. The main source offlowers are from Maharashtra, Karnataka, Sikkim, Utter Pradesh, MadhyaPradesh, Himachal Pradesh, Haryana and Punjab. The product range includesGladiolus Carnation, and many othe r Exotic flowers. More verities are found to

be arriving in the winters and maximum in March. Open auction method ofsales was more prominent in the market, through mutual agreement method has

been observed.

M E H R AU L I WHO LE SA LE M AR K ET :

This market is situated near Qutab Minar. The product range here was limitedwhich mainly includes Rose, Gladioli, Tuberose and other winter seasonflowers. The main sources of flowers are from in and around Gurgaon,Chhatarpur areas. There were only 15 -20 wholesalers or commission agents inthe market. Here, most of the growers sold their produce by themselves andduring peak season their number goes between 150 -200.

WHO LE SA LE M AR K ET FOR TR AD IT IO NA LFL OWE R S:

There is only wholesale market for traditional flowers at Fatepuri - Khari Baoli,in Old Delhi area. It is a large market operated from 4:00 AM to10:00 AM.11:00 AM sale of flowers is through auction and direct sale . Direct sale of

flowers is more prominent in this market. In the auction system, one had to playa commission of 6.25% of sale price to the auctioneers. There were more than12 different types of flowers marketed all around the year in this market.



M AR K ET STR UC T UR E :

The existing marketing system consists of first assembling of flowers at thecentral places on the main road -high ways. This is followed by the dispersion offlowers to the consuming centres like Delhi, Chandigarh, Ludhiana, Jallandhar,and North Indian markets. Flower consumers, which are located far off from

producing areas, have little direct contact with producers. This gap is filled byvarious intermediaries working between producer and consumers includingforwarding agents and retailers. They interact with each ot her to providedifferent marketing channels. These agencies constitute the important part of thesystem, whose activities evolve the mechanics of establishing the prices, variousarrangements and contacts and ensure the flow of goods and services. Thechannels adopted by the sample respondents for the marketing of flowers ofdifferent regions are:

� Producer - Wh olesa ler - Retailer - C on su mer

� Producer - Forwarding Agent - Wh olesaler - Retailer - Con su mer

� Producer - DRDA - Wholesale r - Retailer - Con su mer

� Producer - C oop er at ive Society - Wh olesal er - Retailer - C on su mer


� Producer - Retailer - C on su mer

The individual grower generally uses either of these channels depending uponthe size of business, stability of the marketing agency, economic position,monetary needs and producers engagement in work on and outside the farm.



Sale through Forwarding agents:

Forwarding agents in flower marketing are the persons who have links with thegrowers, hotels, corporate offices, wholesalers/retailers, railways and bustransport employees and auto -rickshaw drivers in the market. These agentsarranged for the transport facilities, loading, unloading and clearance of goodsat various points during tran sportation. They charged 10% commission on thesale value of the produce from the grower.

Sale through Dis t r ict Rural Development A uthor ity:

District Rural Development Authority is a Government agency who takes overresponsibility of marketing of flowe rs. This agency was found common inMandi, Kullu and Kangra districts. This agency has developed variousassembling centres in different parts of these districts according to the density offlowers growers. The produce was then carried to district centre f rom where itwas transported to the consuming markets. Sometimes, agency is also involvedin grading and repacking of the flowers at the assembling points. Thetransportation cost was charged from the producers in addition to 6%commission on the sale valu e of the produce.

Sales through Coo p er at ive Socie ty:

These societies are the associations of the local flower growers responsible formarketing of flowers. There are about 31 registered societies in the state and outof which 23 were found to be functioning properly. They picked up the producefrom the assembling points and then transportation and sales were done in theirnames. Societies are charged 55 commissions in lieu of their services renderedin the marketing. Due to the vested inter ests of few members in these societiesthe quantum of the sales was relatively less through this channel as reported bythe growers.

Sale through W h oles aler s:

The growers, who had large marketable surpluses for sale, generally adopt thischannel. Wholesalers in flower trade sometimes act as forwarding agents andcommission agents too. These wholesalers either purchased directly or throughother forwarding agent s, 15% commission from the sale value of the produce



was charged from the growers. There were about 50 wholesalers found to beworking in Delhi market.

Sale through R eta ile r s:

Retailers brought produce either from auction market or directly frem the producers. In floriculture trade, some retailers have their own shops, some donot have their shops (roadside florists). About 100 such retailers were reportedin Delhi market, they usually seal flowers either as separate or as arrangementsform also. Some retailers had export business in flower trade. The cost oftransportation from wholesale market, loading, unloading, grading andarrangements cost were borne by them.

Market In fo r m at ion:

Market Information refers to all facts and their inter pretation bearing on the present on prospective market value of commodities. Flower growers remainunaware of the prices, consumer demand and movement of actual and potentialsupplies of these flowers in different markets. Major source of marketinformation to producers were reported to be wholesalers/commission agents,forwarding agents or the persons of the area visiting these markets or telephonicenquiry. Unlike other agricultural products, no systematic efforts have been inrespect of flower trade in domestic ma rkets.



SUPPLY CHAIN MANAGEMENT

Supply chain management is the integration of business processes from end user

through original suppliers that provides products, services, and information thatadd value for customers.

Retailers may be the most important link in the supply chain. They connectcustomers with the vendors who provide the merchandise. It is the retailersresponsibility to gauge customers wants and needs and work with the othermembers of the supply chain wholesalers, manufacturers, transport ationcompanies, and so on - to make sure the merchandised customer want isavailable when they want it. Retailers have increasingly taken a leadership

position in their respective supply chains. Not only does size generate power,

but knowledge about thei r customers plays a vital role as well. As a result oftheir position in the supply chain, retailers are in the unique position to collect purchase information customer by customer, transaction by transaction. Thisinformation can be shared with suppliers to plan production, promotions,deliveries, assortments, and inventory levels.

Improved Product Avai la b ility

An efficient supply chain has two benefits for customers through,

(1) Fewer stock outs

(2) Assortments of merchandise that customer ' s want, where they want it.

These benefits translate into greater sales, higher inventory turns, and lowermark downs for retailers.

Improved Return on Invest ment

One measure of retailing performance is the ability to generate a target return oninvestment (ROI)

An efficient supply chain and information system can increase net profit and netsales, while at the same time reducing total assets. Net sales can increase by

providing customers with better assortment. Net profit can increase by eitherraising gross margin or lowering expenses. Its inventory management system,which is directly linked to the vendor ' s computer, is so sophisticated that the



retailer needs to carry relatively little backup inventory to stay in stock. Thus,since inventory investment, is low, the total assets are also low, and inventoryturns are high. In sum, there ' s untapped opportunity for many retailers toimprove their performance through better supply chain management.

In the following paragraphs the various stages of marketing functions and theirmanagement is being discussed to evaluate its operational efficiencies.



STAGES INVOLVED ( CAR NA T IO N)

There are 7 Stages:

Stage 1: Harvesting

Stage 2: Pre- Cooling

Stage 3: Grading

Stage 4: Pulsing

Stage 5: Packing

Stage 6: Transportation

Stage 7: Handling

Stage 1:

Harvesting and Assembling

Many growers, although producing high -quality carnation, do not receive premium prices, because the crop has been incorrectly harvested and incorrect postharvest practices have been applied. Good grading and bunching canenhance high quality flowers and result in increased returns.

The correct stage of harvest depends on the market for which the flowers areintended. For local market, carnations should be cut when some of the flowers

are fully open and the first petals are at an angle of 90° to the calyx. For exportthey should however be picked somewhat tighter at the paint brush stage. Thevase life will be determined by the harvesting stage - if picked too tight theywill not open properly, and if picked too open they will not last very long in thevase. For optimum vase life, only 1 -2 flowers per stem should be open.

Flowers are harvested by either snapping the stem off at a node, or cutting offwith a sharp knife or small shears. Breaking at a node is generally only possible



Stage 3:

Grading

with a young crop, but can lead to increased risk of pulling the plant and morestem rots due to a larger 'breaking wound'. Harvesting is best carried out in themorning when the flowers are cool and turgid, and should never be done in theheat of the day.

Many growers still harvest by accumulating an armful of flowers as they movealong the row. A far better method is to use small carts with detachable liners.Alternatively, cut flower stems can be laid on the top wires or netting andcollected later. This minimizes handling and reduces losses from breakage.

Stage 2:

Pre-cooling

One of the most important factors affecting the postharvest life and quality ofhorticultural crops is temperature. Quality loss after harvest occurs as a result of

physiological and biological processes, the rates of which are influenced primarily by product temperature. As the maintenance of market quality is ofvital importance to the success of the horticultural industry, it is necessary notonly to cool the product but to cool it as quickly as possible after harvest. The

process of pre-cooling is the removal of field heat which arrest the deteriorativeand senescence processes so as to maintain a high level of quality that ensurescustomer satisfaction. This paper provides a critical review to portray pre -cooling as an intricate part of temperature management and to highlight theimportance of its utilisation for extending the shelf life and maintaining thequality of horticultural products with emphasis on cut flowers. Various different

pre-cooling methods are depicted with the benefits and ambiguities of eachshown. The applicability and cooling efficiency of each are also illustrated.Through this review, it is aimed to promote interest in precooling and encourageits use on a more widespread basis.



Stage 5:

Packing

Good grading and bunching can enhance high quality flowers and bring premium prices, but cannot improve a poor quality product. New Zealand hasno grade standards for carnations. Grading is primarily done on stem length butother decisions must be made with regard to the following points:

• Freedom from pests and diseases• Blemishes on flowers or foliage• Sleepiness of flowers• Bent stems• Slab sides and bullheads• Split calyces• Faded colours

Flowers with split calyces should be clipped and bunched separately: they arenot to be marketed as first grade flowers. Weak stemmed flowers should be cutdown and sold as 'shor ts'.

Carnations are sold in bunches of 5 or 10 flowers. Rather than have all theflower heads (especially standards) at the one height, which increases thelikelihood of damage, a staggered bunch is preferred in some markets. Growersneed to check with their marketing agency as to its preference for bunching.

All first grade bunches should be sleeved.

Stage 4:

Pulsing

Pulsing is an important treatment given to the flowers before shipment toincrease their storability. Silver thio-sulphate, biocides, cytokines and sucrosesolutions are recommended for enhancing the shelf life. None of ourrespondents have practiced this operation due to lack of knowledge. Thetechnical knowhow was found to be lacking, among the sample growers, henceis not a common pract ice in the study



Carnations spikes are normally packed in empty packed in empty tea boxes(20" x 18" x 12"). Each box contained about 800 pieces, weighing about 20 kg.Beside gunny bags were also used as a packing material in carnation. Majorityof the growers were found to be using gunny bags as a packing material.

Transportation

All the respondents having less than 800 stems lot were using bus as principalmeans of transpo rting flowers.

Handling ofMarketing Channels OfsCut Flowers

Forwarding agents, cooperative societies, transporters handover the produce to

commission agents/wholesalers as pointed out by producers against the receiptof the produce. In the market, commission agents sell their produce the sameday it arrives in the market. In such a cases, the commission agents/wholesalersor their men proceeds the produce from the railway station or interstate busterminals. There is no cold storage/auction centers facility available inChandigarh market. Price, in the market is determined on the arrivals, but otherfactors like trains, weather conditions, etc. also effected the price determinationof the produce.



ITEMSCHANNELS

F.A. D.R.D.A C.S. Wholesaler Retailer

1. Grower Average Sale Cost

2. (A) Labour Cost

1. Pre-cooling2. Pulsing3. Grading4. Packing5. Labelling6. Carriage

Total

(B) Material Cost

1. Pulsing2. Packing 3. Labelling

Total

(C) Transportation

(D) Cooo ission o FA/DRDA/CS

3. Total Costs

4. Growers Net Price

400.00

1.00.50 1.50 1.50 0.50 0.50

5.50

0.700.25 0.20

25.90

19.69

40.00

91.09

308.91

400.00

1.00.50 1.50 1.50 0.50 0.50

5.50

0.700.25 0.20

25.90

19.69

18.00

69.09

330.91

400.00

1.00.50 1.50 1.50 0.50 0.50

5.50

0.700.25 0.20

25.90

19.69

15.00

66.09

333.91

400.00

1.00.50 1.50 1.50 0.50 0.50

5.50

0.700.25 0.20

25.90

19.69

64.00

115.09

284.91

400.00

1.00.501.50 1.50 0.50 0.50

5.50

0.700.25 0.20

25.90

19.69

51.09

348.91



profitable with 85.35% Profit.

DE P CS CO ST AND RETURNS PER CU T FLOWER OF CA RO NAT IO N

AVERAGE COST AND RETURN PER HUNDRAD CUT FLOWERS OFCARNATION REALIZED BY PRODUCER THROUGH DIFFRENTCHANNELS OF TRADE IN DELHI MARKET.

Bar-Graph 1

Bar graph depicting the Cost and Return in marketing of carnation throughdifferent channels.

500

450

400

350

300

250

200

150

100

50

0

Total Cost

ro ers et rice

Colu o n1

Channels of Marketing: F.A. D.R.D.A C.S. Wh olesal er R etai ler

Total Cost 91.09 69.09 66.09 115.09 51.09

Growers Net Price 308.91 330.91 333.91 284.91 348.91

Through the above bar we can see that, the channels of Retailer are most



M a r k et in g Cost and M a r ginof Inter m ed ia r ies :

More than 65% of the respondents marketed their cut flowers throughwholesalers. Therefore the marketing cost of wholesalers was calculated as:

Table: 2

Marketing costs and margins of cut flowers borne by Wholesalers (per 100flowers)

ITE M S C ARNAT IO N

(Per 100 S p ik es)

A.Gross Price Received by the Producer

B. Cost component of Wholesalers

• Communication (Phone, Mail. Etc.)

• Labour

• Loading and Unloading

• Spoilage

Sub-Total

C. Selling Price of Wholesaler

D.Margin (Selling Price - (Price Paid + Cost)

400

5.10

4.75

2.10

5.10

17.15

480.75

63.60



The wholesalers were not doing any processing except for assembling of the produce coming from the producing areas and further selling it to the retailer.On an average the total cost incurred by wholesalers per 100 flowers are higherin case of other flowers.



Table 3:

Marketing costs and margins of cut flowers borne by Retailers (per 100 flowers)

ITE M S

CA R NAT IO N

(Per 100 S p ik es)

A.Buying Cost

B. Marketing Cost Components

• Rent

• Electricity

• Communication and Sales Promotion

• Depreciation

• Local Transport

• Labour

• Spoilage

• Packaging

Sub-Total Marketing Cost

Selling Price

480.75

35.75

12.00

18.00

21.00

25.00

15.00

10.25

10.00

147.00

810.00

182.25

The marketing cost borne by the retailers selling carnation was 182.25 themarketing margin earned by the retailer in carnation was 22.5%.



Bar -G r a ph :

Bar-graph depicting the comparison between selling price and marketingmargins.

900

800

700

600

500

400

300

Selli g rice

M arketi g M argi

200

100

0

By the above, we can see the difference between carnation selling price andmarketing margin, that the marketing margin is less than selling price.



M a r k et ing P r o b lem s:

The Indian floriculture industry is faced with a number of challenges mainlyrelated to trade environment, infrastructure and marketing issues such as highimport tariff vis-a-vis African countries, low availability of dedicated perishablecarriers, higher freight rates, inadequate support infrastructure, constraint inachieving economies of scale, and inadequate cold chain management.

At the production level the industry is faced with challenges mostly related toavailability of basic inputs, including q uality seeds and planting materials,quality irrigation and skilled manpower, and ageing plantations. With regard tomarketing, major challenges faced by the Indian flower exporters are related tolow level of product diversification and differentiation, v ertical integration andinnovation, and challenges associated with quality and environmental issues.With increasing involvement of supermarkets in flower trade, organizinglogistics is also becoming a critical factor for the Indian flower exporters.

A low share of produce in consumer rupee is due to poor marketing practices being adopted by growers. The farmer ' s knowledge about the right post harvesttreatment, packaging, storing and transport has not attained proper knowledgeas yet. Few farmers adopted scientific pre-cooling and pulsing practices forreason of lack of technical know how. The packaging material was reported to

be costly by the growers. Also, the procurement of packing cases invariablyfalls short of their demand.

Instance were there that the'

Arhatias'

of Delhi market devised the growereither by not reloading sale proceeds well in time or commission and othermarket charges rendered the producers to be dependent on intermediaries andthe trade continues on good faith and at the mercy of the middleman.

The growers generally remain uninformed with the latest trends in the market prices, arrivals, demands and changing consumer preferences.

Following are the major problems of MARKETING:

1. Due to the long distance, sometimes the flower spoil in the process oftransport.

2. High fright rates.

3. Sometimes, the demand is less and supply is more.



4. Lack of cold stores

5. Sometimes due to the increased demand, the price fluctuates in markets.

6. Sometimes the shapes and size of the flowers are not as being expected.

7. If the packaging materi al is low quality, then also flower can spoil.



SUMMARY AND C O N C LUS IO N

India is endowed with different agro -climatic conditions ranging from tropical,sub tropical to dry temperature zones, has premium potential for growing cutflowers.

India's floriculture exports with € 35.55 million has been ranked 20th in theworld exporting countries to the European Union. The share of India's totalfloriculture exports is only 0.42 % in the world exports to the EU. In cutflowers, it is observed that the value of Indian exports were USD 0.45 millionsand that of foliage was USD 7.28 millions. India's share is 0.07 % in the totalcut flowers imports in the country and in total floriculture products, India ranks15th with 0.79 % share. In a nutshell th e prospects and forecasts of the trade:

The above figures on worldwide consumption, market size, exports and growthrate of exports, worldwide imports and share of imports from the developingcountries indicates that with rose imports from the developing Countries being28.5 % thereby indicating an excellent demand and a growing market. The tradein Foliages indicate that India has emerged as the top most supplier among thedeveloping countries and have succeed in developing a sustainable market inthe EU. The floriculture industry in India can therefore continue to concentratein this faster growing segment and undertake an aggressive marketing toincrease the market share in US and in EU



The Im p or tan t Channels Inthe Supply Chain F ollowe d b y TheG r owe r s inthe M a r k et ing of Flowe r s:


� Producer - Forwarding Agent - Wh olesaler - Retailer - Con su mer

� Producer - DRDA - Wholesale r - Retailer - C on su mer

� Producer - C oop er at ive Society - Wh olesal er - Retailer - C on su mer


� Producer - Retailer - C on su mer

� P r od ucer - C on su mer

Forwarding agent channel was found to be the most popular, since 55.885carnation flowers reached Delhi market through this channel. The survey of themarket further revelled that the produce of at l east 100 growers arrived in thismarket daily and there were more then 150 wholesalers/commission agents andabout 155 labourers operating in the market structure was studied by analyzingthe degree of business concentration in respect of cut flower crops.



Objectives O f The Stud y:

� To understand the supply chain management involved in the process of marketing of flowers.

� To understand the problems faced by cut flower growers and suggestways and means to overcome them.

� To estimate the marketing cost and returns.

Findings of the Stud y:

� The marketing channels or retailers are profitable for cut flower growers as it yields 85.35% of profits.



Sugges t ion s

� Setting up of a common market by the government

� Setting up of a common price level

� Government policies should be modified as per farmers needs

� Provision of location specific

� Provision of cold storage

� Introduction of refrigerated transport system

� Development of regulated domestic market

� Introduction of crop insurance scheme against natural calamities

� Training in grading of flowers as international standards

� Liberal financial assi stance to the floriculture



R EFE R E NC E S

1. Raghava (1996)

2. Balasubramanayam (1997)

3. Gill and Aullakh (1993)

4. Kaul and Dadlani (1995)

5. Oberoi (1997)

6. Preeti Sharma (1996)

7. National Horticulture Board (2009)

8. htt p : //ind ia .gov.i n /cit izen /agr icu ltu r e/flo r icu ltu r e

9. htt p : //www. agr iun lim ited .com

10. htt p : //agr icu ltu r e.ind iab izclub .com

http://india.gov.in/citizen/agriculture/floriculture

































http://www.agriunlimited.com/



















http://agriculture.indiabizclub.com/



























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