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Mrktng of Agrcltrl Inputs

Mrktng of Agrcltrl Inputs

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MARKETING OF AGRICULTURAL INPUTS

India is number one in terms of irrigated land area BUT productivity /hectre is too low. There is need to modernize the agricultural inputs 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.

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 independence but in the last few years it has decreased. This in its turn has declined the Growth Rate of the Agricultural Sector in India GDP. The total production of food grain was 212 million tonnes in 2001- 2002 and the next year it declined to 174.2 million tonnes. Agriculture Growth Rate in India GDP declined by 5.2% in 2002- 2003. The Growth Rate of the Agriculture Sector in India GDP grew at the rate of 1.7% each year between 2001- 2002 and 2003- 2004. This shows that Agriculture Growth Rate in India GDP has grown very slowly in the last few years. Green revolution took place in India and this gave a major boost to the agricultural sector for irrigation facilities, provision of agriculture subsidies and credits, and improved technology. This in turn helped to increase the Agriculture Growth Rate in India GDP.

y y

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, has not adopted modern technology and agricultural practices , insufficient irrigation facilities- depends on unpredictable rainfall.
y
2 10/1/2010

What are agricultural inputs?
CONSUMABLES
Seeds Oil and lubricants Fertilizers Agrochemicals (pesticides, insecticides, fungisides)

DURABLES
Tractors(MnM, john dhere, eicher, escort) Harvesters (sugarcane H, Wheat H) Thrashers (4 wheat, rice- to take cover outside of d wheat,rice) Tools : levers , cultivators etc Use- ploughing, tillage operations

AGROCHEMICALS y REASONS.y Our presentation is majorly cover the TRACTORS.more openings & gr8 future ahead 4 10/1/2010 . FERTILISERS.

.INDIAN TRACTOR INDUSTRY 10 tractors / 1000 hectares (INDIA) compared to 60 tractors /1000 hectares in developed agricultural ecionomies Growth of 30% in 08-09 due to ensured availability of economic finance by the govt.

.PENETRATION LEVELS ‡ Penetration is significantly higher in states like Haryana and Punjab i. ‡Huge potential for increase in sales. Land under irrigation in these 2 states is really higher ‡BUT the average average tractor density is 10/1000 hec in INDIA.e 90/1000 hectare.

ploughing n other tillage operations 4 carrying agricultural PRODUCE farm farm 2 market LARGE More than 40hp .CLASSIFICATION OF TRACTOR INDUSTRY SMALL Less than 30 hp Used in fruit orchards MEDIUM Between 31-40hp (51-55%) Used in harrowing.

We need to grow more crops .POST LIBERLIZATION SCENARIO 1991-97 Growth by 14% per annum 1998-02 Fall by 10% R E A S O N S F O R T H E FA L L A R E T H E F O L O W I N G :  Farmer¶s income badly hit by monsoons. not a farm frndly govt  Less arable land.NDA govt.  Increase in cost of petroleum. not making sufficient purchases.  Govt.

2003 Onwards ‡ Tractor industry grew by 23% since then YOY. . ‡Good inventory of tractors. REASONS: ‡ Easy availability of finance. ‡Good cash flow to the farmers.

MARKET SHARE ANALYSIS COMPANY M&M JOHN DEERE EICHER ESCORTS PUNJAB TRACTORS SHARE(approx.) 30% 24% 24% 14% 11% .

 Lack of infrastructure. nature of land  Cautious and Price sensitive buying behavior of farmers  Low literacy level  Good food stock position with government.CHALLENGES OF INDIAN TRACTOR INDUSTRY  Low levels of mechanization. .  Low productivity  Fragmented holdings.  Lack of access to easy credit.

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 .

TAFE acquired the tractor business of Eicher group. Yanmar (Japan) ± 12% stake in Sonalika.MARKETING STRATEGIES (a) For domestic tractor industry: - INORGANIC STRATEGY Eg: Joint venture of John Deere and L& T. .

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

(d) Other strategies: Addition of new features Setting up satellite plants ‡ ‡ .

. ‡ Third largest producer in world. ‡ Green revolution gave positive boost (60¶s).FERTILIZER INDUSTRY IN INDIA ‡ Transformed agriculture sector. ‡ 57 large plants in the country.

Marketing mix for fertilizers is determined by government not by organization especially for Urea. .MARKETING FOR FERTILIZER INDUSTRY Constitutes the backbone of Indian agriculture industry. Major and active role of government.

F.MAJOR PLAYERS IN FERTILIZER INDUSTRY R. NATIONAL FERTILIZERS COROMANDAL FERTILIZERS DEEPAK FERTILIZERS CHAMBAL FERTILIZERS .C.

CLASSIFICATION OF FERTILIZER INDUSTRY NITROGENOUS PHOSPHATIC and POTASHIC COMPLEX .

‡ Variation across districts.VARIATIONS IN CONSUMPTION ‡ Variation across states. ‡ Variation across product categories. .

restricted list. ‡ Earlier only determined by Government but now there are many private selling points also.POLICIES FOR MARKETING OF FERTILIZERS Retention Pricing scheme Distribution Policy ‡Introduced in 1997 . ‡ There are 2.e UREA which is used at very large scale is on . ‡Cost plus subsidy paid to urea manufacturers to compensate.72. ‡ Prices are fixed in such a way that there is no difference in price of fertilizers either imported or bought from domestic market 21 Import policy ‡ Import of fertilizer i. to keep the prices low.000 fertilizers sales point presently.

CHALLENGES FOR MARKETING FERTILIZERS WTO GUIDELINES LACK OF IRRIGATION LACK OF AVAILABILITY OF EASY CREDIT 22 .

MARKETING STRATEGIES OF FERTILIZER INDUSTRY Area wise constraint analysis Tie ²ups with cooperatives Organize direct contact programs Developing optimum product mix Distribution channel management Preparation for decontrolled scenario 23 .

fair.MARKETING STRATEGIES OF FERTILIZER INDUSTRY Promoting balanced and efficient use of fertilizers Demonstration Below line promotion activities (exhibitions. competitions etc) Training programs for dealers Use of information technology networks (kisan call centres) .

e insecticides . fungicides. ‡India is second largest producer of agrochemicals in world after Japan. weeds . insects and other related diseases.INDIAN AGROCHEMICAL INDUSTRY ‡ Constitutes those chemical compounds that prevent crops from attack of pests . 25 . ‡Classification is on the basis of the purpose for which it is used i. pesticides etc. fungus .

MAJOR PLAYERS IN AGROCHEMICAL INDUSTRY ‡ BASF ‡ DOW ‡ TATA-RALLIS ‡ BAYER ‡ INDOFIL ‡ EXCEL ‡ SYENGENTA 26 .

GOVERNMENT POLICIES AND REGULATIONS Economic liberalization had major impact. Delicensing in pesticide industry. Reduction in import tariffs. limits possibilities of high investment on agrochemicals. Agrochemical market is different for different crops and different states .MARKETING ENVIRONMENT FOR AGROCHEMICALS IN INDIA CROPPING PATTERNS Farmers dependent monsoons . Eg: for cotton in south 12-15 sprays are required whereas in north only 6-10. 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 28 .

dealers rush to clear stock) Huge working capital required Lack of indigenous research and development Undisciplined marketing (requirement is not properly estimated) 29 .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.

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) 30 .

31 .MARKETING STRATEGIES FOR AGROCHEMICALS PRODUCT STRATEGY Backward integration (low cost. better margins) Branding (more profitability) Cost effective manufacturing process PLACE STRATEGY Aggressive distribution strategy by dealing directly with retailer. improve quality.

melas) Farmer education 32 .PRICE STRATEGY High MRP and low selling price Good working capital management (limited credit) PROMOTION STRATEGY Promotional efforts to change attitude (exhibitions .

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

Thank Youº AMIT KULKARNI 02 CHINTAN DEDHIA 11 KIRAN VYAS 34 24 42 PRAVIN KOKATE .

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