Final Project Vikas Verma Fi

Final Project Report “Market Research on Commodities Futures Trading”

By Vikas Verma

Distribution List Corporate Guide: - Mr. Santosh Kumar Rout (Branch Manager) Faculty Guide: - Mr. M.Gurumurthy (ICFAI School of Marketing Studies)

Vikas Verma ICFAI School of Marketing Studies Hyderabad (A.P)

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ACKNOWLEGDEMENT First of all I would like to thank Religare Commodities Ltd, which is a leading organization in commodity trading, for giving us an opportunity to work with them and to do Market Research, Location Mapping, Cross selling to gain practical knowledge of how a Commodities company works. Our special obligations to our corporate guide Mr. Santosh Kumar Rout who has directed us all the way. He has shared his experience which has helped us to approach right consumer and generate leads for the company as we are doing cross selling too and through his guidance only I am able to attempt this research project. I like to thank Mr. M.Gurumurthy, our faculty guide, who guided us accordingly where ever needed and was always ready to clear all our doubts & queries. I also like to thank our Director Dr. T. R. K Rao, who promoted us to do our Summer Internship Program with Religare Commodities Ltd. I also like to thank all our faculties who have taught us and have shared their experience with us which has helped us in doing our project.

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Table of Contents Acknowledgments Abstract Back ground Introduction 1. Problem statement 2. Research Objective (i)

Main purpose

(ii)

Purpose of conducting survey

(iii) Scope of study (iv) Research Design of Study (v) Source of Data (vi) Sampling Plan (vii) Data collection instrument (viii) Collection of data through questionnaires (ix) Organization of field work (x) Limitation of Study 9. Main Text i) Cross selling (A/C opening) ii) Location Mapping 10. Data Analysis and Interpretation 11. Findings & Conclusion 12. References 13. Glossary Vikas Verma ICFAI School of Marketing Studies Hyderabad (A.P)

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Abstract

●

This Summer Internship Project is a part of our MS (Marketing) course. We have done a market research on “Commodities Futures Trading”. This Market Research has been done on behalf of Religare Commodities Ltd. The main focus of this research is to know the consumer awareness about commodities trading. My project profile was divided into three parts. First one was Market Research and second one was Location mapping (find out potential market in Kolkata) & third part was cross selling (Account opening). This project report will be helpful for one who is looking for potential market in Kolkata for commodities business. It will also give information about consumers’ awareness level about commodity futures trading. This information will be helpful for one who is thinking of opening a new branch or franchise in Kolkata. The following topics have been covered in this market research: Market research on awareness level of Commodities trading and major player in commodities business.

●

Identification of target consumers for its Commodities future trading.

●

Identify new market places.

• Cross selling of Commodities trading A/C.

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Background: •

The researches were Basic and carried out to fulfill the dual requirements of awareness and to gain a practical exposure of the market.

•

All the research was based on Primary data collected via interviews from respondents through questionnaire and also depth interviews. The market research undertaken by us can be

classified as basic research because basic research is the research aimed at both gaining knowledge and solving a pragmatic problem. The underlying motive is to increase knowledge about particular phenomena by testing, elaborating theory without concern for practical application. Similarly our study was done just to gain an insight into the awareness level of people for RCL; identify target audience for RCL and get the customer. The research applied was both for finding the solution of an existing problem and to understand the behavior of people.

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Introduction The rapidly advancing technology, particularly the Internet, has drastically changed the social and economic landscapes and every aspect of our daily lives. In the Securities Industry & Futures Commodities, the Internet has facilitated on-line trading, changing the way the market works, as well as the way the investors access the market. Having taken advantage of information technology at an opportune time, India has emerged as a front-running country of on-line trading in the global securities & commodities markets. “On-line trading” is broadly defined as a trading mechanism where investors place orders and confirm trading results via electronic communication channels, such as the Internet, mobile phones, In India, the whole process of securities & commodities transactions, from order placement and routing, order execution, to trade confirmation, is fully automated, thus enabling the investors who have placed orders to confirm their trading results within few seconds.

1. STATEMENT OF THE PROBLEM Online future commodities trading involve personal factors, technical factors, business factors and economic factors. The interplay of these factors on commodities market requires a deep study about the pattern process and procedures and performance. This study is intended to identify the various concepts about online commodities trading and its way of functioning. 1. To identify the level of awareness of commodities online trading. 2. To identify the target consumer for online trading of commodities. Vikas Verma ICFAI School of Marketing Studies Hyderabad (A.P)

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3. Identify new potential market places in Kolkata. • Create awareness among people in commodities markets & convince them to open A/C.

2. OBJECTIVES OF THE STUDY My project work programmed was also directed to some particular targets and the main objectives of the study are as bellow; • To clearly state the awareness level about Religare commodities. • To gain an Idea of the perception of people about Religare commodities. • To devise an approach by making people aware of Religare commodities & convince them to open A/C.

The Main purpose of conducting the Survey for RCL • To identify the target consumer for commodities business. • To get a feel of the Customers perception about Religare commodities services products. • To find an appropriate communication message for attracting the people to Religare commodities Ltd.

3. SCOPE OF THE STUDY: Globalization of the financial market has led to a manifold increase in investment. New markets have been opened; new instruments have been developed; and new services have been launched. Besides, a Vikas Verma ICFAI School of Marketing Studies Hyderabad (A.P)

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number of opportunities and challenges have also been thrown open. Online Commodities trading is new as compared to Equity market in India. Mainly three exchanges are involved in online commodities trading MCX, NCDEX & NMCE.

4. RESEARCH DESIGN OF THE STUDY The study is based on survey technique. The study consists of analysis about customer’s awareness and satisfaction of Religare commodities Ltd. For the purpose of the study 100 customers were picked up at random and their views solicited on different parameters. The methodology adopted includes  Questionnaire  Random sample survey of customers  Discussions with the concerned Personal interviews and informal discussions were held when I was doing market research with new customers to ascertain the awareness and existing consumers’ satisfaction level. Further applying simple statistical techniques has processed the data collected.

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5.SOURCES OF DATA :  Primary data: Questionnaire 

Secondary data: Published materials of Religare such as periodicals, journals, news papers, and website.

6.SAMPLING PLAN:  Sampling: Since Religare enterprises Ltd have many segments I

selected commodities segment as per my profile to do market research. 100% coverage was difficult within the limited period of time. Hence sampling survey method was adopted for the purpose of the study.

 Population: (universe) customers & non consumers of religare

commodities Ltd.

 Sampling size: A sample of hundred was chosen for the purpose

of the study. Sample consisted of small investors, large investors and traders of RCL.



Sampling Methods: Probability sampling requires complete

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knowledge about all sampling units in the universe. Due to time constraint non-probability sampling was chosen for the study.

 Sampling procedure: From large number of customers & non

consumers sample lot were randomly picked up by me.

 Field Study: Directly approached respondents (businessmen,

small shopkeepers, physical commodities traders and service class people).

7. DATA COLLECTION INSTRUMENT 7.1 COLLECTION QUESTIONNAIRES:

OF

DATA

THROUGH

The data collected for the study purpose is through questionnaires. One hundred customers and non consumer were selected randomly for the study purpose and then the information revealed from the customers is analyzed and interpreted in the study.

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7.2 ORGANISATION OF FIELD WORK Initial field work was done for pre testing tools for data collection. The data was collected through the direct interaction with the RCL customers & non consumers through questionnaires answered by them. One hundred customers of RCL were randomly chosen for the purpose of the study in Kolkata posta mandi branch. .

8. LIMITATION OF STUDY  Since sample size is only 100, this is not a true representation of

the population as a whole.

 Since segment wise investors is not available in RCL this means

consumers are not only

investing in commodities they also

investing in equity ,insurance, mutual funds, wealth management & investment Banking . Hence overall concept is taken for the study.  Information is partly based on secondary data and hence the

authenticity of the study can be visualized and is measurable.

 Level of accuracy of the results of research is restricted to the accuracy Vikas Verma ICFAI School of Marketing Studies Hyderabad (A.P)

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level with which the customers have given their answers and the accuracy level of the answers cannot be predicted.

MAIN TEXT Cross selling (Account opening) Account opening was also an important task of my SIP Profile. Before account opening I had to make clients fully aware & totally convinced as to how commodities market works for their investment plan & earning. After that they were ready for fulfilling total criteria for account opening like… 1. PAN card is must 2. Address proof ( Voter ID, DL, telephone Bill, electricity Bill) 3. Bank statement or cancelled cheque. 4. Two photographs 5. Individual Account 6. HUF A/c After this the next step was consumer got trading ID number & through this ID based on the amount of margin money they can trade in futures commodities market (Metals, Agro-product & energy). If the investment is appropriate to get the exposure then client can get two or more times exposures on different commodities. If the market Vikas Verma ICFAI School of Marketing Studies Hyderabad (A.P)

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condition is favorable then to get exposure is very profitable for the traders.

Location Mapping It is also a very important phenomenon which involves finding out potential market in Kolkata region whether it is nearby or far off. As far as my location mapping was concerned I focused mainly on Mandi Market. During this activity I found out …. 1) Posta Area:This is known mainly for agro- commodities market. It is not only biggest market of India but also the biggest commodity market of the whole South East Asia. That’s why there is a huge potential in this market. The main commodities which are being traded are. Spices1. Jeera 2. Cumin (dhania) 3. Garlic 4. Turmeric 5. Chilly 6. Black pepper Vikas Verma ICFAI School of Marketing Studies Hyderabad (A.P)

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Food grains – 1. Rice 2. Wheat 3. Maize 4. Gram 5. Lentil 6. Urad Edible things 1. Mustard oil 2. Guar 3. Soya oil 4. Sugar This indicates that this market is capturing 1/3 share of the total Kolkata mandi market. 2) Burra bazaar We can see everything from a needle to the part of aero plane. But the area like … Sona Patti ( jewellery maket) – in this market there are nearly about 150 jewellery shops. But they are not interested to do direct commodities trading. They do the commodity trading but from the back side, ‘‘it means they invest money through others’ a/c’’. Their perceptions are negative & they consider it as “Gambling” or Vikas Verma ICFAI School of Marketing Studies Hyderabad (A.P)

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“Fataka”or “Dibba business”.The main reason behind this is in the earlier time when they did this trading through local brokers they incurred a huge loss and right now they are feared off.

3)M.D.Road - this area also seems to be productive. 4)Kalakar Street – this is a place of mixed market but the jewelers & garments sellers have some interest in commodity trading. 5)Old China market- this market is basically known for Wholesale market of Stationery Products. Here response level is very positive. 6)Beadon Street – this is mainly for leather & plastic goods . customers’

profile are not big and they are small traders & the

interest level is normal . 7)Shobha Bazzar – In this market there are some electronic & electrical shops . We can say that it is a mixed market for all things. Interest level is very low in commodities. 8)Dalhauji – here corporate clients are in majority , they are mostly doing trading in equity . 9)Ultadanga – it is located at central part of Kolkata city .But the response is average. 10)VIP Road- This is an official area. Many securities companies are having their offices. So the big equity investors are there but they are not doing well in commodities. Vikas Verma ICFAI School of Marketing Studies Hyderabad (A.P)

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11) Loha patti –there are near about 3000 shops in this market. Businessmen are doing well in iron & steel products. Here response level is good.

DATA ANALYSIS AND INTERPRETATION 9.1 Customers’ preference over other depository services in Religare commodities Ltd. Attributes

No. of Persons

Percentage

Quality Service

50

50

Safety

20

20

Reach

12

12

Vast variety of Service

4

4

Nothing in Particular

14

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Chart no.9.1) Percentage of customers’ preference over other depository services in RCL.

14% 4% 12% 50% 20%

Quality Service

Safety

Reach

Vast variety of Service Nothing in Particular Vikas Verma ICFAI School of Marketing Studies Hyderabad (A.P)

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From the above statistics it is observed that in the survey 50% customers justify that RCL is providing quality services as compared to other depository services

9.2) Different types of investors with RCL.

Small Investors 58

Long term investors 32

Traders 10

Chart no.9.2 ) Percentage of investors with RCL.

10%

32%

58%

Small Investors Long term investors Trades The above table shows that out of 100 customers, 58 customers are small investors and 32 customers are long term investors. Vikas Verma ICFAI School of Marketing Studies Hyderabad (A.P)

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9.3) Customer’s’ awareness of the new services offered by RCL. Through RCL

News Paper/ Broker Magazines

Agents

Others

50

10

8

32

0

50%

10%

8%

32%

0

According to the survey 50% customers know the services through RCL and 32% through RCL agents. 9.4) Customer’s’ first source of awareness Through RCL

News paper Magazines

34 34%

/

Broker

Agents

Others

12

14

34

6

12%

14%

34%

6%

According to the survey the first source of information is RCL itself and the agents. 9.5) Customers’ satisfaction of the services of Religare commodities Ltd.

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Satisfied

Mostly Satisfied

Neither Satisfied Unsatisfied

64

24

64%

24%

Mostly Unsatisfied

Unsatisfied

10

2

0

10%

2%

0

/

Chart no.9.5) Percentage of customers’ satisfaction of the services of RCL.

2% 10%

0%

24%

64%

Satisfied Mostly Satisfied

Newither Satisfied/ Unsatisfied Mostly Unsatisfied Unsatisfied

According to survey 64% of customers are satisfied with the services of Religare commodities Ltd and 24% are mostly satisfied. Then we can say that RCL offers quality service that touches customers’ satisfaction level.

9.6) Customers’ satisfaction with the trading provided by the RCL .

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Satisfied

Mostly Satisfied

Neither Satisfied/ Unsatisfied

Mostly Unsatisfied

Unsatisfied

52

24

20

4

0

52%

24%

20%

4%

0

Chart no.9.6) Percentage of customers’ satisfaction with the trading provided by RCL.

20%

4%

0% 52%

24% Satisfied

Mostly Satisfied

Neither Satisfied/ Unsatisfied

Mostly Unsatisfiede

Unsatisfied

According to the survey 52% of the customers are satisfied with the Trading that are conducted by the RCL. 24% are mostly satisfied. So we can say that RCL customers are getting benefit of trading provided by the RCL and employees can able to solve the queries of the customers. 9.8) Customers’ satisfaction when dealing with the problems through RCL. Schemes / Services Vikas Verma ICFAI School of Marketing Studies Hyderabad (A.P)

No of Persons

Percentage 20

Frequent reminders are given to RCL for update of the information Irregular receipt of Holding / Transaction statements Improper format of Holding / Transaction statements Improper attention given to the enquiries

24

24%

22

22%

16

16%

14

14%

Margin Money Problem

10

10%

Inadequate information

14

14%

According to the survey, 24 persons are not satisfied with the frequent reminders which are given to the RCL for update the information, 22 persons are not satisfied with the irregular receipt of holding or transaction statement, 16 persons are not satisfied with the format of holding or transaction statements, 14 persons are not satisfied attention given to the enquiries, 10 persons are not satisfied with the margin money system and 14 persons are not satisfied with the information provided by the RCL. So, we can say that these systems demand immediate attention for improvement

9.9) Customers’ preference for RCL over its competitors Quality Service

Rates charged

Nothing Particular

52

10

52%

10%

in

Safety

Reach

24

8

6

24%

8%

6%

Chart No. 9.9) Percentage of customers’ preference for RCL over its competitors

8% 6% 24%

52% 10%

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ICFAI School of Marketing Studies Hyderabad (A.P) Quality Service

Rates charged Nothing in Particular

Safety Reach

According to the survey 52% of customers justify their preferences for RCL for quality services, 10% for rates charged and 8% for safety. So, we can say that RCL provides better quality services than its competitors.

10) FINDINGS & CONCLUSION 10.1 FINDINGS  Religare commodities Ltd customers are more satisfied with the

quality services. Holding securities in electronic form gives some far-reaching advantages to the investors.  Religare enterprises Ltd offers a wide choice of products for

investing in the stock market & commodities market. It allows investing in shares, mutual funds and other financial products. With RCL one can manage own de-mat & trading account independently.  The depository participant will allow an investor to trade through

any broker of his choice registered with the commodities exchanges connected with NCDEX, MCX & NMCE.  Investor can do online trading himself only. Vikas Verma ICFAI School of Marketing Studies Hyderabad (A.P)

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 Transaction details for the traders would be available online.

.

10.2) SUGGESTIONS  Some customers feel that they should be trained by RCL for giving

demo of on line commodities trading.  Survey reveals that most of the customers are not aware of the

services of RCL. I found the normal tendency of the customer was to prefer Equity as compared to commodities. So Religare commodities Ltd should create an awareness of what exactly is meant by Commodities and explain all other services of Religare enterprises Ltd.  After getting the printouts of the contract note, dispatch of the

same should be taken place with no delay and this can be cross verified with the sender (dispatch section).  Customers are facing over crowding, non-availability of telephone lines, so proper measures should be taken to overcome these problems.  The RCL official should conduct regular seminars on commodities

trading. Vikas Verma ICFAI School of Marketing Studies Hyderabad (A.P)

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 World of mouth is very negative because most of the securities

companies mainly focus on equity market and they misguide consumers because of, lack of knowledge in commodities or lack of Dealership.

References: - For web support 2)

www.mcxindia.com

3)

www.religare.in

4)

www.answers.com

5) 6)

www.ncdex.com www.businessstandard.com

Books , Magazines & News-papers references 1)

Naresh Malhotra ( market research management)

2) Philip Kotler ( marketing management) Vikas Verma ICFAI School of Marketing Studies Hyderabad (A.P)

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3) Business World 4) Business Economy 5) The economic times 6) Business standard 7)

Business Line

8) Daily market commentary, daily research reports on Metals & Agro-product of Religare commodities Ltd.

Glossary

MCX – Multi Commodity Exchange NCDEX – National Commodity and Derivative Exchange NMCE – National Multi commodity Exchange CRN – Customer Relationship Number RCL - Religare Commodities Ltd. PAN – Personal Account Number REL – Religare Enterprises Ltd.

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