MARKETING OF

AGRICULTURAL INPUTS
India is number one in terms of irrigated land
area BUT productivity is too low.

There is need to modernize the agricultural

inputs and mechanization in order to compete
with other countries.
What are agricultural inputs?

CONSUMABLES DURABLES
Seeds Tractors
Oil and lubricants Harvesters
Fertilizers Thrashers
Agrochemicals Tools : levers ,
cultivators etc
How agricultural inputs are
INDIAN TRACTOR INDUSTRY

10 tractors / 1000 hectares (INDIA)

compared to 60 tractors /1000 hectares.

Growth of 30% in 04-05 due to ensured

availability of economic finance by the govt.
 PENETRATION LEVELS
• Penetration is significantly higher in states like
Haryana and Punjab i.e 90/1000 hectare.
•
• BUT the average average tractor density is 10/1000
hec in INDIA.
•
• Huge potential for increase in sales.
CLASSIFICATION OF TRACTOR
INDUSTRY
SMALL Less than 30 hp

MEDIUM Between 31-40hp (51-55%)

LARGE More than 40hp

 POST LIBERLIZATION SCENARIO

1991-97 Growth by 14% per annum

1988-02 Fall by 10%

REASONS FOR THE FALL ARE THE
•Farmer’s income badly hit by monsoons.
F OLOWING:
•Increase in cost of petroleum.
•Govt. not making sufficient purchases.
•Less arable land.
•Increase in installed capacity.
•Cyclic nature of the industry.
2003 Onwards •Tractor industry grew by 43% in
2004
REASONS:
•Easy availability of finance.
•Good cash flow to the farmers.

•Good inventory of tractors.

 MARKET SHARE ANALYSIS

COMPANY SHARE(appro
M$M x.)
30%
JOHN DEERE 24%
EICHER 24%
ESCORTS 14%
PUNJAB TRACTORS 11%
 CHALLENGES OF
INDIAN TRACTOR INDUSTRY

• Low levels of mechanization. • Fragmented nature of land holdings.

• Lack of infrastructure. •Cautious and Price sensitive buying

behaviour of farmers
• Lack of access to easy credit. •Low literacy level

• Low productivity Good food stock position with

•

government.
FACTORS SUGGESTING BETTER FUTURE PROSPECTS
FOR TRACTOR INDUSTRY

•Increase in corporate farming

•Increase in literacy level

•Low level of farm mechanization

•Government thrust on increasing irrigation

•Emphasis on agriculture financing

•Emphasis on rural infrastructure development

•Clearing of piled up inventory

 MARKETING STRATEGIES

(a)For domestic tractor industry

INORGANIC STRATEGY

Eg:
Joint venture of John Deere and L$ T.

Yanmar (Japan) – 12% stake in Sonalika.

TAFE acquired the tractor business of Eicher group.

(b) Exporting
• Due to low cost of manufacturing India is
being used as export base.
• Accounting approx. 25% of profit.
(c ) Manufacturing in alignment with demand
Phenomenon of overstock has to be controlled
•
(d) Other strategies

•Addition of new features

•Setting up satellite plants
FERTILIZER INDUSTRY IN INDIA

• Transformed agriculture sector.

• Green revolution gave positive boost (60’s).
• Third largest producer in world.
• 57 large plants in the country.
•
 MARKETING FOR FERTILIZER
INDUSTRY
qConstitutes the backbone of Indian agriculture industry.
qMajor and active role of government.
qMarketing mix for fertilizers is determined by government
not by organization especially for Urea.

q
 CLASSIFICATION OF
FERTILIZER INDUSTRY
VARIATIONS IN CONSUMPTION

• Variation across states.

• Variation across districts.
• Variation across product
categories.
 POLICIES FOR MARKETING OF
FERTILIZERS
Retention •Introduced in 1997 , to keep the prices low.
Pricing scheme •Cost plus subsidy paid to urea manufacturers to

Distribution compensate.
•Earlier only determined by Government but now there

Policy are many private selling points also.

•There are 2,72,000 fertilizers sales point presently.

Import policy • Import of fertilizer i.e UREA which is used at very

large scale is on restricted list.
•Prices are fixed in such a way that there is no difference

in price of fertilizers either imported or bought from

18 Referencedomestic market
: RURAL MARKETING - BY Balram Dogra, Karminder , Tata Mc Graw05/14/10
Hill
 CHALLENGES FOR MARKETING
FERTILIZERS

19 Reference : RURAL MARKETING - BY Balram Dogra, Karminder , Tata Mc Graw05/14/10

Hill
 MARKETING STRATEGIES OF
FERTILIZER INDUSTRY
•Area wise constraint analysis
•Development marketing

•Tie –ups with cooperatives

•Organize direct contact programs

•Macro environment management (critics)

•Developing optimum product mix

•Distribution channel management

•Preparation for decontrolled scenario

20 Reference : RURAL MARKETING - BY Balram Dogra, Karminder , Tata Mc Graw05/14/10

Hill
 MARKETING STRATEGIES OF FERTILIZER INDUSTRY

• Promoting balanced and efficient use of fertilizers

•Demonstration

•Below line promotion activities (exhibitions,

•fair,competitions
Training programsetc)for dealers
•Provision of value added services

•Use of information technology networks (kisan call

centres)
 INDIAN AGROCHEMICAL
INDUSTRY
• Constitutes those chemical compounds that prevent crops from attack of
pests , weeds , fungus , insects and other related diseases.
•
• Classification is on the basis of the purpose for which it is used i.e
insecticides , fungicides etc
•
• India is second largest producer of agrochemicals in world after Japan.

22 Reference : RURAL MARKETING - BY Balram Dogra, Karminder , Tata Mc Graw05/14/10

Hill
 MARKETING ENVIRONMENT FOR
AGROCHEMICALS IN INDIA

CROPPING PATTERNS GOVERNMENT POLICIES

AND REGULATIONS
Farmersdependent monsoons , Economic liberalization had
limits possibilities of high major impact.
investment on agrochemicals.
Reduction in import tariffs.
Agrochemical market is
different for different crops and Delicensing in pesticide
different states . industry.

Eg: for cotton in south 12-15 Opportunity for exports

 FACTORS EFFECTING AGROCHEMICAL'S
MARKET GROWTH

• Farmers incomes are rising

•Aggressive promotion

•Backward integration

•Usage of agrochemicals is increasing

•New and effective products are reaching

•Indian markets
Irrigated area is rising because of corporate
irrigation

24 Reference : RURAL MARKETING - BY Balram Dogra, Karminder , Tata Mc Graw05/14/10

Hill
 CHALLENGES FACED BY INDIAN
AGROCHEMICAL INDUSTRY

• Low capacity utilization : less land is used due to less facilities

•Seasonality of demand

•Expensive finance for industries

•High inventory cost

•Price cutting ( when season is about to off, dealers rush to clear

•stock)
Huge working capital required
•Lack of indigenous research and development

•Undisciplined marketing (requirement is not properly estimated)

25 Reference : RURAL MARKETING - BY Balram Dogra, Karminder , Tata Mc Graw05/14/10

Hill
 CHALLENGES FACED BY INDIAN
AGROCHEMICAL INDUSTRY
•Low profit margins
•Crop imbalance ( optimum consumption is difficult to realize ,

crops need less or more chemicals)

•Regional imbalance

•Low selling price of agricultural products

•Natural calamities

•Environmental pressures (critics)

26 Reference : RURAL MARKETING - BY Balram Dogra, Karminder , Tata Mc Graw05/14/10

Hill
 MARKETING STRATEGIES FOR
AGROCHEMICALS
PRODUCT STRATEGY
Backward integration (low cost, improve quality,
better margins)
Branding (more profitability)
Cost effective manufacturing process

PLACE STRATEGY
Aggressive distribution strategy by dealing directly
with retailer.
27 Reference : RURAL MARKETING - BY Balram Dogra, Karminder , Tata Mc Graw05/14/10
Hill
 PRICE STRATEGY
High MRP and low selling price
Good working capital management (limited
credit)
PROMOTION STRATEGY
Promotional efforts to change attitude
(exhibitions
Farmer , melas)
education

28 Reference : RURAL MARKETING - BY Balram Dogra, Karminder , Tata Mc Graw05/14/10

Hill
EXPORT STRATEGY
In order to safegaurd industry from unpredictable
losses from domestic market Indian firms should
consider whole world as its market.(already
considering too)
 Thanks…

30 Reference : RURAL MARKETING - BY Balram Dogra, Karminder , Tata Mc Graw05/14/10

Hill