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Crafts Development and Marketing Manual. Appropriate Technologies for Development

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Crafts Development and Marketing Manual. Appropriate Technologies for Development DOCUMENT RESUME ED 289 003 CE 048 999 AUTHOR Ramsay, Caroline C.; And Others TITLE Crafts Development and Marketing Manual. Appropriate Technologies for Development. Peace Corps Information Collection & Exchange Manual Series No. M-24. INSTITUTION Williams (Walker A.) and Company, Inc., Washington, DC. SPONS AGENCY Peace Corps, Washington, DC. Information Collection and Exchange Div. PUB DATE May 86 CONTRACT PC-885-1647 NOTE 256p.; Portions of appendixes contain small/marginally legible print. PUB TYPE Guides Classroom Use - Guides (For Teachers) (052) EDRS PRICE MF01/PC11 Plus Postage. DESCRIPTORS Adults; Business Administration; Craft Workers; *Developing Nations; Economic Opportunities; *Entrepreneurship; Foreign Countries; *Handicrafts; *Marketing; *Program Development; Program Implementation; Risk; *Small Businesses; Transportation; Volunteers; Volunteer Training IDENTIFIERS Botswana; Ecuador; *Peace Corps ABSTRACT This manual was developed to help Peace Corps 7olunteers assist local craftspeople in developing nations in initiating and operating small businesses to produce and market their products. The manual is organized in eight chapters that cover the following topics: the crafts environment, common problems and solutions for a crafts business, organizing and managing the crafts project, production, marketing, distribution, case studies of two crafts industries, and resource groups and marketing channels. Extensive appendixes provide information on the loan or grant application process, international trade terms and conditions, international shipping conversions, international shipping procedures, shipping and collection, documentation, methods of receiving payment, and packing requirements. A risk matrix for international terms of payment, several sample documents, a list of Peace Corps resources, and an annotated bibliography are also included. (KC) *********************************************************************** Reproductions supplied by EDRS are the best that can be made from the original document. *********************************************************************** = INFORMATICti 001,17C1E10N & EOCCHAICE Peace Corps' Information Collection & Exchange (ICE)vas established so that the strategies and-technologies devel- oped by Peace Corps Volunteers, their co-workers, and their counterparts could be made available to the widerange of developuent organizations and individual ,:orkers who might find- that useful. Training guides, curricula, lesson plans, project reports, mantels and other Peace Corps-generated materials developed in the field are collected and reviewed. Same are reprinted "as is"; others provide a source of field based information for the production of manualsor for re- search in particular program areas. Materials that you sub- mit to the Information Collectibn & Exchange thus become part of the Peace Corps' larger contribution to develcsuent. Information about ICE publications and services is available through: Peace Corps Information Collection & Exchange Office of Training and. Program Support 806 Connecticut Avenue, N.W. Washington, D.C. 20526 Add your expt,*.>..nce to the ICE Resource Center. Send ma- terials that yc prepared so that wv can share them with othersworki,_ the develogtent field.Your tech- nical insights serve as the basis for the generation of ICE manuals, reprints and resource packets, and also ensure that ICE is providing the most updated, innovative problem-solving techniques and information acAlable to you and your fellcw&velcsuerd: workers. Peace Corps 3 CRAFTS DEVELOPMENT AND MARKETING MANUAL Caroline C. Ramsay Project Manager J. Philip Eason Edited by Cathy Smith Illustrated by Kim Winnard Prepared for Peace Cor9s by Walker A. Williams and Company, Inc. Washington, D.C. Under Contract Number PC-885-1647 Peace Corps Informati'n Collection and Exchange Manual M 24 May 1986 4 Prepared for the Peace Corps by Walker A. Williams and Company, Inc. Under Contract PC-885-1647, 1986 This manual may be reproduced and/or translated in part or in full without payment of royalty. Please give standard acknowledgement. 5 ACKNOWLEDGEMENTS The author wishes to thank Donna Frelick, Bill Gschwend, Maureen Delaney and Gary Ladig for their extensive and helpful editing. Appreciation is offered to J. Philip Eason, Project Manager, who was most helpful with the business sections and:charts as well as with overall guidance and encouragement. I wish to express my thanks to Kim Winnard fo his original and pertinent illustrations. Other thanks go to Cathy Smith for excellent'edOng, Pat Murray for valuable research, Hilary Richardson for sharingilier retailing expertise, and both Gail Reardon and Carolyn Taylor for getti4-each draft into final form. Caroline C.,Ramsay TABLE 0! CONTENTS About This Manual 1 Introduction 3 CHAPTER 1 The Crafts Environment 7 2 To Craft or Not to Craft: That is the Question 13 Common Problems and Solutions 19 Analyzing Markets: The Backbone of Success 25 Summary 30 3 Organizing and Managing the Crafts Project 35 Participation Is Crucial to Success 36 Formal Structures 37 Management for Fun and Profit 39 Summary 46 4 Production 55 Materials and Technology 55 Product Development 57 Quality Control 59 Training 61 Where to Produce: Home or Shop 62 Product Pricing 64 Summary 65 5 Marketing 69 Mapping Out a Marketing Strategy 69 Marketing Locally First 71 Marketing Regionally or Nationally 73 Marketing Internationally 74 Connecting with Markets 77 Methods of Selling 80 Packaging 82 Advertising 83 Summary 85 6 Distribution 91 Channels of Distribution 91 Other Distribution Considerations 95 Costs of Distribution 98 Import Restrictions and Agreements 99 Summary 102 7 Two Case Studies 107 A Sweater Industry Grows in Ecuador 107 The Development of Botswanacraft 112 Summary 115 8 Resource Groups and Marketing Channels 117 Appendices 199 7 EXHIBITS AT END OF CHAPTERS CHAPTER 2 Tool to Determine Six Months of Working Capital The Word Maze 3 Explanations of Profit and Loss Statement, Balance Sheet, Cash Flow Statement, Break-even Point Break-even Chart 4 Cost/Price Relationship The Right Price 5 Marketing A Step by Step Process 6 Complete Cycle of Distribution Chain of Distribution Costs of Distribution ABOUT THIS MANUAL Peace Corps Volunteers and other development workers often find them- selves in a town, village, or rural outpost where a great need exists for income-generating projects. Sometimes the resources available for such activities are slim: raw materials are hard to come by; the labor pool often lacks technical, business or literacy skills; even the local markets may be unreachable because of impassable roads or a lack of vehicles. But even in these circumstances, people are anxlous to supplement their income and hope to find a product that can be made for sale. Often they look to a community worker for assistance. Then, too, many Peace Corps Volunteers, struck by the beauty of local crafts, cannot help but imagine how excited the folks back home would be to have authentic crafts. But the perceptive Volunteer realizes that one must walk before one runs. Exporting to the Western nations is possible only after achieving success in local and regional marketplaces. Exporting will take the kind of planning and execution described in this manual. 1 The challenge the development worker faces is to helpa group of trained or trainable people choose a product, produce it, and market it successfully. Local artisans who have never before operated as business people must be introduced to a new way of thinking about their work. They must come to understand what is meant by "marketable". They must organize themselves to produce the amount, quality and type of crafts neededto make the business profitable. They must learn to strike a balance between quantity and qualitycon- trol. Billing, packing, shipping, accounting-- all the details of commerce which Western business takes for granted -- will be new concepts to the uninitiated. Getting a grasp on them will present a challenge to local craftspeople. In many cases, the traditional crafts -- especially decorative ones-- will not be the best choice of product for a profitable venture. A new, more utilitarian product may more likely be needed by the local populace. Making the new product may require adapting traditional skills and/or training for the artisans. Launching a small business anywhere requires a big commitment of time, thought and energy; doing so in a developing country is a monumental undertaking. It can be done, however, provided that a logical plan of action is followed. This handbook is intended to provide just that. 10 INTRODUCTION In ancient times,everything produce4 for use,for ritual,or for decoration was crafted, since everything was made by hand. As time passed, individuals, villages, and even countries began to specialize in certain products, which were then traded for others. Trade has evolved into tha complex system we have today, in which parts of products may be made in one country, assembled in another nation, and sold in a third country. In this context, handcrafted items are a very small pavt of the world- wide economy. Yet, they represent a significant part of the export market because, in underdeveloped countries, even the small amount of income generated by these products makes a big difference to the families involved. The Allure of Third World Handcrafts in theWest The definition of crafts includes boththe traditional definition of crafts as works of folk art, and trades, which includes any
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