Ethnographic Study of the Informal Sector

Ethnographic Study of the Informal SectorINTRODUCTIONThe folksy field will be understood by dint of an exercise of selling of wall composing clips as thoroughf be vendors for a period of s eve daylights. Paper clips argon a stationery item used for binding papers in concert and atomic number 18 used by students, offices, lawyers, and g all overnment officials amongst others. However today, the availability of substitutes kindred staplers (a creation of technology) has challenged the utility of the commodity. The informal sector is that part of the economy which is non taxed, monitored by any form of government or included in any gross national product (GNP), un alike(p) the formal economy. In 1997-98, the informal economy generated nearly 76% of employment and nearly 46% of the income in Mumbai. Despite their physical existence and the millions involved in it, for slide survival, their official invisibility makes them ineligible for near statutorily ordained benefits and bearances. preparative STAGEA pre-gross tax revenue use was conducted to escort the potential target group. The interactions revealed that most consumers dont have a requirement for this product, as staplers be a more(prenominal) reliable paper binding solution. The pre- sales research revealed that paper clips are exchange in quantities of 100 clips a box. Based on the findings, a sales seat was developed w presentin the the great unwashed of 100 clips would be resold 10-12 clips in plastic pouches. This would allow commonwealth to purchase small quantities and too convenient selling.The directionl adopt is equivalent to wholesaler-retailer supply chain model wherein the retailer makes bulk purchases from a wholesaler and sells smaller quantities to the customer. A similar model is used by path vendors who buy in bulk and retail smaller quantities. A cost-plus pricing strategy was adopted and a profit margin of 200-300% was agreed upon, which would be reduced thro ugh the course of the exercise until enough ceiling was accumulated. In addition to repacking, a packaging strategy was adopted. push lock plastics would be used to portion the paper clips, thereby adding value to the commodity.Purchases of both the paper and the packaging physical were do from the wholesale market in Abdul Rahman Street, Crawford Market where stationery is dealt with in wholesale quantities. Due to capital constraints, declivity could non be purchased in bulk, limiting our bargaining power. It was decided that any profits incurred on the graduation day, would be ploughed-back to maintain a better inventory status. holes selected for selling activity consisted of areas frequented by office goers, students and children. The objective set for the selling exercise was to scotch cost and make profits by adopting a sales maximation approach through the use of strategies like customization, expense discrimination, bundling, advertising, and market segmentation . executing STAGEDue to dearth of capital on the initiatory day of our study, a sufficient stock of paper clips was purchased solely did not allow for purchase of packaging materials. Waste packaging materials from the channels of Crawford Market was used as a substitute for the zip lock pouches. A huge profit margin was targeted on the first day that would generate capital to bloodline better quality packaging for the remaining days.The entire experience over the 7-day period is illustrated in the table below (refer Appendix I).DayLocationRationale for LocationExperienceDay 1Fort, immaterial Bombay spicy flirtPotential Buyers lawyers and office goers.Problem arose because people returning dwelling house from work and lunch did not stop to indulgePrices were very towering so sales were slow.Selling on the wrong side of the channel and changed position to target people going towards the station.Day 2HR, Jai hind(prenominal) and KCCollege.Potential Buyers Students, who have utility for stationery, especially females using customization and improve packaging material.Customization and product bundling proved to be very effective.-The obscure and fancy paper clips were sold divulge, despite higher bellZip locks used resulted in quick salesRight time for sales (1pm onwards) when most students were done with their lectures.Day 3Street Vendor Fair, Outside St. Michaels Church, MahimTo study the variation in the sales of the commodity on a normal day in comparison to special doRelatively easier to sell during a fair or during special makePeople are more willing to buy when exposed to triplex commodities within a given space.Day 4 naval drawTo understand variation sales in a tourist and inexpert spotThe expense was lowered as a larger stock was procured due to profits from the previous dayConcentrated on sales promotion strategies by giving off free units to girls who purchased packetsStrategy was made (word-of-mouth marketing played a significant role)Day 5Trains, interchange Line CST to Dadar (Return)To understand the variation sales in a mode of transportThe female partner made large sales in the ladies compartment of the while the other partner was unsuccessful in the general.Women are more approachable on trains which can be attributed to the large number of sellers in the womens compartments on trainsBuying behavior exhibited by women is primarily an event of novelty value of the products existence soldDay 6Marine Lines StationTo sell amongst other avenue vendors and understand the dynamics of course vending.Holding up a banner to advertise the product did not work in the informal sectorOther experienced vendors came and interacted with us, passed comments and in like manner ridiculed us. They crusaded away after they didnt see a brat to their businessfundamental interaction with vendors On asking about the hafta to be paid, they refused to chat to and turned away An unsuccessful sale as it was a Saturday.Inte raction with authorities A BMC truck came to evict the vendors, confiscating their supplies, politely asked us to moveDay 7Republic Day Parade, Marine DriveTo understand how national holidays have an impact on sales in the informal sectorStood beside a flag vendor considering people might take clips to put on the flags.No sales took engineer as people were engaged in watching the ParadeEVALUATION STAGEpossibility versus realityOn engaging with the market on a first hand basis, we came across the following economic concepts while studying unhomogeneous sales strategies to maximize our sales in order to keep earning a profit. -Monopoly firm Since we were the only sellers of this product on the streets, we had the liberty to use bell discrimination a abundant with product distinctiation. We gauged our targets and according to their outlooks and then decided the price to charge them.Price discrimination-the same products were sold at diametric prices in diffe engross spaces to di fferent consumers. First horizontal surface and third degree price discrimination was adopted. Under this the firm charged different prices to different set of consumers. For example while selling in the High Court premises we sold the small quantity at Rs. 20 a packet to lawyers while we sold the packet to women in trains at Rs.5. In the former case, the entire consumer surplus was converted into the firms revenue and profits. The concept of third degree price discrimination was used here where groups having inelastic get hold of (lawyers/office goers) were charged a higher price compared to the women in trains who had elastic demand for whom the price was comparatively lower. The theory of price discrimination did not work for us as instead of compete with consumer surplus to make profits, we ended up entirely covering costs per day, neither did it minimize our costs nor did it increase output. Moreover the experiment of just 7 days was too short to judge this concept. However , the law of demand was justified wherein there is more demand when there is reduction in price. The elasticity was 1.0195 which is relatively elastic. However, from the interaction in the market we put out that it is inconsequential and hence, nullified. (Refer Appendix II)Product Bundling The firm offered several products for sale as one combined product. It is a common feature in many imperfectly competitive product markets. The firm used the proficiency of bundling to create more demand and capture the market. For example- instead of selling big metallic binders, metal U- clips, colored U-clips and fancy clips separately we bundled them unneurotic and sold them as a packaged deal at Rs. 20 targeting the college students. This concept worked for us.Sales maximization was set as possible refinement which occurs when the firm sells as much as possible without making a loss. We implied this strategy wherein we after a point where we had covered all our costs, we punishing on s elling as much as we can even if it is at a low profit margin as long as there was no loss. This helped us in earning our revenue and capital for next days. Thus, the application of this theory was successful. We also came to the conclusion that paper clips as such(prenominal) are not a commodity that a street vendor would sell. It is more likely to be found in stationery shops as they serve a market which requires all these goods.Lessons LearntOperating in the informal economy showed us that there existsno perfect knowledgewith respect to commodities being sold (in terms of availability and price).Venturing further into the streets of Crawford Market revealed that the commodity sold is much cheaper when compared to the peripheral shops. The procurement exercise highlighted the prevalence ofinformation asymmetry.The presence of street vendors is a menace for commuters but a boon for the working unretentive by providing goods (sometimes necessities) at a substantially cheaper price. The survey revealed that most street vendors require credit in order to start an enterprise but were often denied access due to lack of collateral but they seaportt applied for any loans due to a variety of reasons. They are not well aware of the government policies and are subjected to constant evictions by the municipal corporations as we observed when the street vendors were made to flee the purview when the BMC truck arrived at Marine Lines station during the course of our study. An important perspective is the self-employment, which is an important component of the informal sector that allows this section of the urban unworthy to earn income but is also classified into different types of employment like employees, middlemen, and unpaid family members or self-employed. Thus, the informal sector acts a livelihood-sustaining platform.Interactions with street vendors, it was found out that they suffer from problems like hypertension, hyperacidity migraine attacks and severe bac kaches. Another feel revealed was the participation of women. Women form a significant proportion of the informal application force. (Refer Appendix III for Survey Questionnaire and Appendix IV for results/findings).Policies in placeThe National Policy for Urban Street Vendors, 2004 was the first policy that called hawkers as vendors in designated areas called hawker zones and non-hawker zones and to ensure absence of congestion and maintain hygienics in public spaces and streets.Policy of Housing and Urban Poverty Alleviation, 2009 By the National Commission on enterprises in the unorganized sector, this bill has not been introduced so far. It does not focus on natural markets like railroad track stations, depots, taxi stands, etc. Heavy fines are levied on unregistered sellers and their goods are confiscated. Non perishables are left off with heavy fines however, fruit and vegetable vendors meet everything. The Panchnama of confiscated goods is not issues by policemen and reco rds are not maintained.National Policy on Urban Street Vendors, 2009 It reports the conditions of work and promotion of livelihoods in the unorganized sector. It provides a constitutional angle to practice any occupation. For example Right to able means of livelihood, Article 14, 19 (1) (g), 38(2), 39(a) and 41.Suggestions-Registration must be made compulsory for street vendors by issuing licenses to prevent immoral rent stressing activities in the form of haftas from officials and thus, providing them with recognition. Incentive to register can be provided to street vendors by providing subsidized healthcare to registered vendors. Cheap housing and adaptation or slum rehabilitation can be provided to register street vendors as most of them are migrants from all over the country. A instrument to file a PIL must be established for the street vendors to seek redressal for confiscated goods. Alternate spaces should be allotted for their activities if the area has to be cleared of such activities. For example, the shift of Agra Market during the 2010 Commonwealth Games. Stricter laws and there enforcement is necessary so that illegal hawking is avoided and they do not seem a nuisance to the commuters. In this way, both parts of the society can live in harmony.