mrktng of agrcltrl inputs

8/8/2019 Mrktng of Agrcltrl Inputs

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India is number one in terms of irrigated land

area BUTproductivity /hectre is too low.

There is need to modernize the agriculturalinputs and mechanization in order to compete

with other countries. Like israel,china, brazil.INDIA is the 1st producer of- banana,onion, wheat, rice

2nd- veg & fruits. Explain GDP.

MARKETING OF

AGRICULTURAL INPUTS


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10/1/20102

y Agriculture -GDP of India

y 2006 17.5

y 2005 18.3

y 2004 18.8

y 2005 20.9

y

y The agricultural yield increased in India after independencebut in the last few years it has decreased.This in its turn has declined the Growth Rate of theAgricultural Sector in India GDP.The total production of food grain was 212 million tonnesin 2001- 2002 and the next year it declined to 174.2 million tonnes. Agriculture Growth Rate inIndia GDP declined by 5.2% in 2002- 2003.The Growth Rate of the Agriculture Sector in IndiaGDP grew at the rate of1.7% each year between 2001- 2002 and 2003- 2004.This shows thatAgriculture Growth Rate in India GDP has grown very slowly in the last few years.

y

y Green revolution took place in India and this gave a major boost tothe agricultural sector for irrigation facilities, provision of agriculture subsidies andcredits, and improved technology.This in turn helped to increase the Agriculture Growth Rate inIndia GDP.

y

y The agricultural sector has had low production due to a number of factors such as illiteracy,insufficient finance, and inadequate marketing of agricultural products. average size of the farms, hasnot adopted modern technology and agricultural practices , insufficient irrigation facilities- depends onunpredictable rainfall.

y


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What are agricultural inputs?

CONSUMABLES DURABLES

Seeds Tractors(MnM, john dhere, eicher,

escort)

Oil and lubricants Harvesters (sugarcane H, WheatH)

Fertilizers Thrashers (4 wheat, rice- to take

cover outside of d wheat,rice)

Agrochemicals (pesticides,

insecticides, fungisides)

Tools : levers , cultivators etc

Use- ploughing, tillage operations


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10/1/20104

y Our presentation is majorly cover the TRACTORS,

FERTILISERS, AGROCHEMICALS

yREASONS- more openings & gr8 future ahead


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10 tractors / 1000 hectares (INDIA)

compared to 60 tractors /1000 hectares indeveloped agricultural ecionomies

Growth of 30% in 08-09 due to ensured

availability of economic finance by the

govt.

INDIAN TRACTOR INDUSTRY


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Penetration is significantly higher in states like Haryanaand Punjab i.e 90/1000 hectare. Land under irrigation in these 2 statesis really higher

BUT the average average tractor density is 10/1000 hec inINDIA.

Huge potential for increase in sales.

PENETRATION LEVELS


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CLASSIFICATION OF TRACTOR

INDUSTRY

SMALL Less than 30 hp

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

LARGE More than 40hp

Used in fruit orchards

Used in harrowing, ploughing n

other tillage operations

4 carrying agricultural

PRODUCE farm farm 2

market


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POST LIBERLIZATION SCENARIO

1991-97 Growth by 14% per annum

1998-02 Fall by 10%

R E A S ON S F O R T H E FA L L A R E T H E F O L OW I N G :

Farmers income badly hit by monsoons.

Increase in cost of petroleum.

Govt. not making sufficientpurchases.NDA govt. not a farm frndly

govt

Less arable land.We need to grow more crops


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2003 Onwards Tractor industry grew by 23% since

then YOY.

REASONS:

Easy availability of finance.Good cash flow to the farmers.

Good inventory of tractors.


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MARKET SHARE ANALYSIS

COMPANY SHARE(approx.)

M&M 30%

JOHN DEERE 24%

EICHER 24%

ESCORTS 14%

PUNJAB TRACTORS 11%


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CHALLENGES OF

INDIAN TRACTOR INDUSTRY

Low levels of mechanization. Fragmented nature of land

holdings.

Lack of infrastructure. Cautious and Price sensitive

buying behavior of farmers

Lack of access to easy credit. Low literacy level

Low productivity Good food stock position with

government.


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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


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(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.

MARKETING STRATEGIES


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(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


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(d)Other strategies: -

Addition of new features

Setting up satellite plants


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Transformed agriculture sector.

Green revolution gave positive boost (60s).

Third largest producer in world.

57 large plants in the country.

FERTILIZER INDUSTRY IN INDIA


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Constitutes the backbone of Indian agriculture industry.

Major and active role of government.

Marketing mix for fertilizers is determined by government

not by organization especially for Urea.

MARKETING FOR FERTILIZER

INDUSTRY


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R.C.F.

NATIONAL FERTILIZERS

COROMANDAL FERTILIZERS

DEEPAKFERTILIZERS CHAMBAL FERTILIZERS

MAJOR PLAYERS IN

FERTILIZER INDUSTRY


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CLASSIFICATION OF

FERTILIZER INDUSTRY

NITROGENOUS

PHOSPHATIC and POTASHIC

COMPLEX


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Variation across states.

Variation across districts.

Variation across product categories.

VARIATIONS IN CONSUMPTION


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POLICIES FOR MARKETING OF

FERTILIZERS

Retention

Pricing

scheme

Introduced in 1997 , to keep the prices low.

Cost plus subsidy paid to urea manufacturers to compensate.

Distribution

Policy

Earlier only determined by Government but now there 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 onrestricted list.

Prices are fixed in such a way that there is no difference in price of

fertilizers either imported or bought from domestic market


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22

CHALLENGES FOR

MARKETING FERTILIZERS

WTO

GUIDELINES

LACKOF

IRRIGATION

LACKOFAVAILABILITY

OF EASYCREDIT


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MARKETING STRATEGIES OF

FERTILIZER INDUSTRY

Area wise constraint analysis

Tie ups with cooperatives

Organize direct contact programs

Developing optimum product mix

Distribution channel management

Preparation for decontrolled scenario


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MARKETING STRATEGIES OF FERTILIZER INDUSTRY

Promoting balanced and efficient use of fertilizers

Demonstration

Below line promotion activities (exhibitions, fair, competitions etc)

Training programs for dealers

Use of information technology networks (kisan call centres)


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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, pesticides etc.

India is second largest producer of agrochemicals in world after Japan.

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INDIAN AGROCHEMICAL

INDUSTRY


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BASF

DOW

TATA-RALLIS

BAYER

INDOFIL

EXCEL

SYENGENTA

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MAJOR PLAYERS IN

AGROCHEMICAL INDUSTRY


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MARKETING ENVIRONMENT FOR

AGROCHEMICALS IN INDIA

CROPPING PATTERNS GOVERNMENT POLICIESAND

REGULATIONS

Farmers dependent monsoons , limits

possibilities of high investment on

agrochemicals.

Agrochemical market is different for

different crops and different states .

Eg: for cotton in south 12-15 sprays are

required whereas in north only 6-10.

Economic liberalization had major

impact.

Reduction in import tariffs.

Delicensing in pesticide industry.

Opportunity for exports


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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


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CHALLENGES FACED BY INDIAN


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)


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CHALLENGES FACED BY INDIAN


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)


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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.


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PRICE STRATEGY

High MRP and low selling price

Good working capital management (limited credit)

PROMOTIONSTRATEGY

Promotional efforts to change attitude (exhibitions , melas)

Farmer education


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EXPORT STRATEGY

In order to safeguard industry from unpredictable losses from domestic

market Indian firms should consider whole world as its market.(already

considering too)


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AMIT KULKARNI 02

CHINTAN DEDHIA 11

KIRAN VYAS 24

PRAVIN KOKATE 4234

Thank You

mrktng of agrcltrl inputs

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