Marketing strategies of the state level organisation in public distribution: A study of civil supplies corporations

Abstract

In recent decades, governments have organized state owned enterprises to undertake trading and distribution of important commodities and products. Despite the social and economic importance of such organizations, research on their critical activities and mode of functioning has been scantly, particularly so with regard to the state owned enterprises operating in domestic market. The present research focuses on Civil Supplies Corporations which are the State Government Enterprises trading in essential commodities. There are 13 such corporations in India established with the purpose of strengthening the public distribution system in their respective states. The study aims to discern the marketing strategies of Civil Supplies Corporations and highlight the conditions that create and sustain their strategies. The methodology used includes a mailed questionnaire survey of Civil Supplies Corporations and in depth case studies of the Corporations in four states in India – Tamil Nadu, Kerala, Himachal Pradesh and Andhra Pradesh. A limited interaction with senior officials of 12 Civil Supplies Corporations who participated in a training programme held at IIMA in 1986 helped to test the major findings and sharpen inference on various related issues. The study indicates that these organizations emphasis trading in commodities which accord them certain privileges and protections as a trader. For such commodities which are taken up for trading as per government directives, aspects such as sources of supply, quantities allotted, procurement and consumer issue commodities through owned and/or mediaries are governed more by statutory obligations rather than symbiotic benefits. Prices of most of by statutory obligations rather than symbiotic benefits. Prices of most of the commodities they sell contain an element of subsidy and promotional techniques are seldom used by these organizations. On an overall perspective, marketing strategies of these organizations emphasize trading in stable product market situations that provide stability of operations and differential advantages. However, variations with respect to such emphasis is observed; such tendencies are stronger in three out of the four corporation studied. The study further indicates that the nature of state’s food economy and the extent to which PDS in the state is developed create conditions which specify the marketing tasks that need to be carried out by these organizations. Translation of such environmental conditions into specific marketing tasks to some extent depends on the political sensitivity of PDS and food related issues. Although the marketing tasks under such conditions require greater flexibility in operations, due to certain organizational characteristics, they tend to concentrate on stable product markets. Frequency of changes in top management and their tenure was found to be one of the factors which influenced product market orientations and strategies of these organizations. When the tenure is shorter, tendencies to depend on stable product markets are seen to be stronger. Organizational structure also appears to influence their product market orientations; when the degree of centralization is higher, tendencies to concentrate on stable product markets are stronger. In addition, the staffing policy followed by these organizations through the use of deputationists influence product market emphasis by specifying a core set of marketing activities and organizational variables such as frequency of changes in top management, organization structure and staffing policy act as partial determinants of product-market orientations through its influence on the decision making processes used to determine the marketing strategies.