Project Report Agriculture Input Marketing

Company: Bayer

19th August 2010

Submitted To Prof. Sanjeev Kapoor

Submitted By Ravi Kumar (ABM06004) Sornam A.R (ABM06005) Manoj Kumar (ABM06008) Ankita Yadav (ABM06016) Ashok Kumar (ABM06018) Roly Dhanuka (ABM06023)

.........................................................................................................................................................................................................................................................................................................................................................14 Organizational structure: ....................................................................3 Product offerings.................5 Insecticides.....................................................................................................................12 Criteria for selection of dealers:.......................................................................................................................................................................................................................................10 Policy change affecting business ..............................................14 New Changes in the business: .....13 Structure of MIS implemented in the Company ...............................................8 Marketing and promotional events..................7 Bayer Bioscience: Seed division ........................Contents INTRODUCTION ...........................................................................................................................................................6 Table: Portfolio of crop protection products......................................................................6 Plant growth regulators......................................................................................................................................................................................................................3 Bayer in India : History ..................................................................................................5 Herbicides: ...............................................................................................................................................4 Fungicides .......................................................................................13 Future markets............................................................................................................................................................................................15 ........................................12 Distribution channel: ..........................................7 Pesticides Industry in India: A Glance .......................................................................................

Bayer Cropscience was formed by the merger between Bayer Crop Protection Group with Aventis Cropscience. The Bayer Group markets some 5. Economy. nutrition and high-tech materials. Bayer healthcare 2. Bayer Cropscience India now offers services under one roof from April 2003. India. 108400 employees worldwide and had sales of €31. Bayer crop science 3.2 billion. Germany. Bayers is Included in nearly all the major share indices in world The Group is committed to the principles of sustainable development and to its role as a socially and ethically responsible corporate citizen. Initially Bayer entered in India in partnership with BASF but later on it separated to become Bayer Crop protection.7 billion. The company will offer a complete crop protection package from seed dressing agents to a wide range of well-known research-based insecticides. Bayer is a global enterprise with core competencies in the fields of health care. Now India figures as the fourth largest individual market for Bayer in Asia. . ecology and social responsibility are corporate policy objectives of equal rank. Earlier only Cropscience division was active but after acquiring Aventis worldwide.7 billion. R&D expenses to €2. SA. With above-average growth potential of the Indian market. it has become one of Bayer's most promising locations in the Asia-Pacific region. Set up in Mumbai. it was the first wholly-owned Bayer subsidiary in Asia. represented around the world by 302 companies.. Bayer business services Bayer in India : History Originally. In 2003. Its Global headquarters are in Leverkusen. They have following divisions: 1.INTRODUCTION Bayer group of companies It was founded in Barmen Germany in 1863 by Friedrich Bayer and his partner Friedrich Weskott. Bayer material science 4. Ltd”. weedicides etc. which has been operational since June 2003. Bayer came to India in 1896 under the name “Farbfabriken Bayer and Co. herbicides.000 products. Bayer formed bayer bioscience and merged Proagro with it to be a major player in seed business. Proagro being a part of Aventis and active in seed production. The company’s products and services are designed to benefit people and improve their quality of life. Capital expenditures amounted to €1.

BioScience and Environmental Science . Crop protection Bayer Cropscience Bioscience Environmen tal science Product offerings Bayer crop science has created eight integrated crop platforms to tackle crop protection in a more efficient manner. Their main function is to undertake production and marketing of pesticides and marketing of crop seeds. sustainable agriculture as well as for non-agricultural applications. .Bayer crop science is divided into three business groups: Crop Protection. They have a well diversified portfolio of products that cater to a wide range of market.offering an outstanding range of products and extensive service backup for modern.

Major fungicide markets are cereals.herbicides insecticides fungicides product protfolio plant growth regulators Fungicides They avoid or abolish fungal plant diseases. rice and industrial crops e. fruits. vine. Products of the company were known for their state of the art application methods and long term efficacy. canola and soybean. which could affect severely harvest outcome and quality. They were the first to produce systemic insecticide. Major brands of insecticides include:      Confidor/ Admire Calypso Decis Temik Oberon . Major brands of fungicides include:     Antracol Baycor Folicur Monceren Insecticides Bayer is leader in the insecticide division.They try to develop products targeting local needs.g. vegetables.

regions and market segments. These can include:         preconditioning of cotton crops for effective boll opening even and accelerated boll opening in cotton crops defoliation and re-growth control in cotton crops to facilitate mechanical harvesting lodging control in cereal crops by shortening and stabilizing the plant inducing even and accelerated blossom in fruit. while they hold a joint number 1 position in conventional herbicides. Their highly selective herbicides target different crops. Atlantis) and foramsulfuron (Option. sugar beet and rice markets.Herbicides: Bayer CropScience ranks number three in the global herbicides market including Plant Growth Regulators (PGR). corn. Major brands of herbicides include:     Atlantis Basta Topstar Whip Super Plant growth regulators Bayer CropScience is one of the leading companies in the plant growth regulator (PGR) market. They recently launched two new active ingredients – mesosulfuron (Mesomaxx. Maister) which are expected to reinforce good position in cereal herbicides and expanding position in the corn segment. cereals and fruits are the main areas of application for their plant growth regulators.and vegetable crops inducing thinning in top fruit for quality enhancement purposes improving setting and increasing size in fruit . They provide highly effective solutions to many aspects of crop management.and vegetable crops inducing even maturation in fruit. Cotton. They are one of the leading companies in the cereals.

Pesticides can be manufactured and sold mainly in two forms: technical and formulations. Groundnut Grapes. Chilli Cotton. Sugarcane. Mango. Citrus. Nearly 67 percent of pesticides manufactured in India are used for two crops. Chilli. Rice. Mango. However.000 tonnes. Tomato. Chilli. Thus average capacity utilization stands at 65 percent. Brinjal. Groundnut. namely rice and cotton. Andhra Pradesh and Punjab alone consume 47 per cent of pesticides produced in the country. Apple. Soybean. This is then processed with other materials to create formulations. The installed capacity of the Indian pesticide industry is about 124. Wheat. Tea. owing to India's hot and humid climate results in higher consumption of insecticides. demand is seasonal . sunflower Paddy paddy Pesticides Industry in India: A Glance  Higher incidence of insects. Okra. tomato. Pesticide consumption is also skewed geographically. rice Cotton. Coffee Groundnut. The technical grade segment is dominated by the organized sector while the unorganized sector mainly operates in the formulation segment. potato . Cabbage. Chilies’. Pomegranate.the maximum being consumed in the months from July to November. Pea. Potato. Paddy Crops wheat. Chillies Apple.   . which are grown during July to November. Wheat. The area over 600 formulators of which around 20 per cent are associated with the technical grade manufacturer.Table: Portfolio of crop protection products INSECTICIDE Fame Reagent granule Larvin Admire Confidor FUNGICIDE Antracol Baycor Bialaton Folicur HERBICIDE Sancor Topstar Adora Crops Rice Rice & sugarcane Cotton. Sunflower Crops Grapes. Technical is the first stage of manufacture where the chemical is concentrated and unsuitable for direct use. Pigeonpea. limited to Green Revolution areas.

To cater for the specific needs of farmers. Grain Sorghum as well as OP research varieties of Mustard. Market status of pesticides: The total market for the pesticides for Bayer combindly stands to about Rs. Working capital accounts for nearly 45-50 percent of the total capital employed. Pearl Millet. The current demand for technical grade pesticides stands at about 85.P which contribute to pesticide business are 1) Weedicides 2) Insecticides 3) Fungicides Bayer Bioscience: Seed division Bayer Bio Science is one of the top players in the country with four state-of-the-art seed processing plants.P including Uttaranchal 2) Central U.000 tpa and has been growing at 5-10 percent annually. Cotton. the country's dependence on better quality seeds and irrigation will have to increase.P which contribute to pesticide business are 1) Western U. Corn. Bayer Bioscience hybrid seeds offer a wide product range covering Hybrid Rice.   India loses Rs 100 bn annually due to crop losses. With the current emphasis on increasing production (for exports and domestic consumption). The industry is working capital intensive. . This in turn will translate into a higher demand for pesticides. development.P 3) Eastern U. It is engaged in research. 43crore in Uttar Pradesh. production of high quality hybrid seeds of field crops.P As per value areas in U. and coupled with improve the quality of agricultural products. Thus. As per revenue the areas in U. TNCs with their strong financial clout dominate the Indian industry.

P nearly equals 6500 tonnes out of which approximately 5000 tonnes belongs to Arize. Central. U. Bihar Yield advantage Seed quality Grain quality Variety 6111 6129 All over India 6201 6444 6516 Tez XL Dhani West. good eating quality. Kanchan etc.P and covers more than 80% of the market. Benefits Arize hybrid rice yields above the best performing inbred varieties and at least on par with the high-yielding competing hybrids Arize seeds present high purity and germination ratio Arize grain cooking and taste quality match the target market standards ARIZE Varieties and Features Characteristics States grain with slight aroma. Tolerate standing water Punjab. It is market leader through out U. excellent eating quality Resistant to BLB. central India All over India U. The major competitors include Pioneer. highest yield in mid-early duration segment 20-25% higher yield. Highest yielding variety in india widely adaptable.Seeds Marketed:  Hybrid Paddy: The hybrid paddy of Bayer is sold with the brand name of Arize. Bayer is the market leader in the hybrid paddy market in not only in Uttar Pradesh but also in India.P. Haryana. higher yield than other widely adaptable. The total hybrid paddy seed market in U. Haryana. more grain per pinnacle Biggest pinnacle length. Punjab .P. Advanta. Haryana. tolerant to blast. excellent cooking and eating quality More tiller than other variety. Notified hybrid Notified hybrid. Eastern India All over India southern states Punjab.

P Haryana.P (Barabanki. Lodging tolerant Highest oil content 45%. . W. 4212 (Research variety). The major competitors in mustard includes Nath. M. This strategy has shown excellent reach and created huge ripple effect among farmers.g. Advanta. Gujarat. of seeds/ siliqua Variety 4001 State Rajasthan.B Apart from these three crop seed bayer is also active in supply of see ds of Sunflower. Maize: Maize is marketed in the brand name of Sampann (Hybrid). It covers mainly areas of eastern U. Dewaria).P. Ferozabad) . Haryana. The company has a market share of approx 10 % in Uttar Pradesh. U. Central U. Peela sona. Invitation was given to large number of villagers and attended by 50000 villagers but the word of mouth promotion was excellent after the event. U. The mega show consisted of celebrity performance e. Assam. Krishna.P (Agra. Gazipur. Marketing and promotional events 1) Mega shows in pre season: This was the unique marketing strategy adopted by Bayer In this particular region. The total quantity supplied to market is approximately 400 tonnes. Manoj Tewari and Ravi Kisen(who has great influence in these areas and mass appeal) did shows in remote areas. Bihar. Maize hybrid and features Advantage old seed.P ( Balia. 4001. U.P. Western U.B Keshari Peela Sona Bihar. It was done for the first time. Bayer has a market share of 15%. Godda).  Mustard: The seeds of mustard are marketed in the brand name of Keshari 100.P. The event costed approx 80 lacs to the company but proved to be excellent promotional effort for the company. wide adaptability Ideal for early and late sown. cotton. Millet but these area are not so prominent as far as bayer is concerned. W. High no.

7) Magic and Puppet show: These type of promotional activities are carried out to draw attention of target consumer (farmers). 6) Management and agronomical enlignment of farmers: It again has a basic goal to make farmers aware of the good farming practices. 3) Extensive demonstration in pre and post season: Demonstration of crop seed in identified and chosen field is done by field assistant extensively. Farmers were given the knowledge that more nitrogenous fertilizer means more vegetative growth that is more pinnacle length and les grain. It is very effective and used by all the companies as promotion medium but number of such meeting is less due to constraint of time and availability.g. A Road show with theme Arize Ek Toofan. It contains farmers contact addresses and number such that any one can justify the claim. e. 5) Nursery training programme: It is conducted to raise the awareness of farmers toward the crop especially for rice. The basic idea is to undertake the promotion so that the villagers get very much affected positively.g. 4) Groups meeting: Farmer group meetings are conducted by field staffs supervised by assistant marketing managers to bring more impact on the farmers. but this type of promotion are costly and time taking. In post season they show the yield comparison among their product and competitor by cutting an approx area of 10 sq mt and comparing the yield there only with other varieties in the same area. It bring authenticity to the company claims of excellent products. It help in brand building and building trust amongst farmer for the company. . It is considered to be best promotion as it evokes confidence amongst farmers.P the amount of nitrogenous fertilizer administered was much more than required which eventually was hampering the productivity of the crop (Paddy). The reach is less because it can be done only in certain identified field. in summers due to extreme heat or adverse climatic condition the farmers don’t turn up for the meets and hence some of the meets are not very successful. It is very effective method of brand building. in which a large number of vehicles (approx 30 in number) move around in such a way that they created a wave with full throttle. The recent trend thus observed is decrease in nitrogenous fertilizer and increase in other fertilizer in balance amount to increase the yield. 8) Testimonials of farmers: The testimonials of farmers are recorded about his/her experience of using bayer product and in a form of leaflet are distributed to other farmers in other villages. For e.2) Road shows: It consists of large number of vehicles in a queue with banner wrapped around it which goes from village to village and create awareness among farmers about the products. in eastern U. These activities apart from acting recreational medium also enlighten farmers and disseminate product information. It teaches good farming practices and know how about facts to raise the crop properly to gain maximum produce.

the dealer charges approximately 15% margin on the invoice price. Distribution channel: company company's cnf distributor dealer farmer The distributor charges approximately 3-5% margin on invoice price. 2) Earlier government certificate of registration was only given to company with good brand names but then government eased the policy as a result certification of registration was given to lot of company and local manufacturer also came out and increased the competition in the seed market especially. Quantity and cash discount are given to dealers as applicable.Policy change affecting business 1) Subsidy given by government to notified hybrid seed manufacturer: In this due to subsidy the effective rate for the farmer decreased. This has eased the pressure on farmers and the overall market has increased considerably and as result bayer has been able to capture maximum market because of its excellent product and good brand name amongst farmers. The rate per kg. Quantity . of hybrid seed was a major detrimental factor in the increase in market for the hybrid seeds.

The company ascertains the present transactions of the dealer as well. Number of companies one is dealing with: The present status of the dealer also makes a huge impact on the selection of the dealer. Land reforms: The land reforms such as land consolidation have improved the farmer condition and they are now adopting hybrid seeds on increased scale.discount refer to if a particular dealer sells a requisite amount of products within a stipulated time and demands for more and cash discount refers to if certain amount of cash is paid back to Bayer by the dealers within a stipulated time. This also makes sure that the company gets its payment back even if the dealer runs in losses. etc. The company also determines the total assets of the dealer which adds to the credibility of the deale r. his past transactions with other companies. It makes sure of the past history of the consumer.  . Criteria for selection of dealers: The company follows a very strict procedure for the selection of dealers. Some of the criteria are mentioned as follows: Past history/ Experience: The Company does run the background check of the dealer before even considering him apt for the job. Capital rotation: the capital rotation between the consumer and the company also forms a vital capability of the dealer. The only solution is to increase the productivity of current land which is possible through hybrid seeds and crop protection method and in which bayer is a major market force. The current and constant population not only in India but also in world has started to exert a lot of pressure to lands. Hence the company has come up with certain stringent rules for the selection of the dealers. area covered by him. The company believes that the dealer who can rotate the cash effectively between the end consumer and the company irrespective of seasonal fluctuation is capable enough to scale up the company’s profits Future markets The future market is very bright for the crop protection and the seed division owing to following reasons  Population explosion. Capital management and total assets: The capital management skills of the dealer are also quite vital as this also determines the credit period and the payback capability of the dealer. This also ascertains that the dealer doesn’t sell similar competing brands from his outlet. The company believes that the dealers are the pillars of any company’s success. the company also mandates a work experience of minimum of 4 years of prior work experience in the similar domain before handing him the reins of dealership. So market is expanding rapidly.

Rapid hybridization: There has been rapid hybridization for all the crops and new hybrid varieties are coming to market giving more options to farmers for seed.G. Regional manager (Sales) Field marketing manager (Marketing) Territory manager Business Development Manager Market Field Demonstrator . so the market is going to be competitive. However the sensitive Information processing is done by the core company officials and maintained in their data library Organizational structure: G. process and present the data. and Mustard etc in recent times and the market is showing excellent potential.M A.M. The marketing information that are to be collected are generally outsourced to other firms which then collect. Breeding improvement: The constant and effective research and development carried by many companies in this area has increased the presence of more improved varieties having mo re productive germplasm. Paddy.  Structure of MIS implemented in the Company The company has a proper channel to carry out the management information from one level to other. There has been rapid hybridization in Cotton.

Each territory is managed by a territory manager who looks in to promotional activities. Primary works include monitoring the Market Field Demonstrators.looks after all the activities of the company in the region.one for a state each.2 to 3 per district depending upon the work in the area. Central 6 and Eastern in 5 territories.General Manager and assistant general manager . Market Field Demonstrators. on the basis of their feedback specific marketing strategies are made to increase the awareness levels regarding the products and provide the farmers with suitable products for increasing productivity on fields. Regional manager (Sales) & (marketing) . All the territory managers report to the concerned regional managers. They work as the face of the company and represent it at the ground level. managing sales force. some big districts can also have more than one bdm depending upon the sales potential and area. Primary functions include. central and eastern UP. present them sales re ports and other key inputs from their respective areas. In India the consumption trend declines from weedicide to insecticide to fungicide but at the global level the trend is just reverse. ensuring proper supply and resolving any organizational issues which come up in their respective territories. interacting with the farmers at the ground level. increasing the awareness levels about the products and the sales in the area.western.increasing awareness about the products. Western UP is divided in 8. Most of them are on company payrolls but at peak season some part time workers can also be engaged. manages all the affairs of the company in the state concerned. Business development managers (bdm) take care of all the activities in allotted districts. organizing field demonstrations. for sales and marketing purposes UP is divided in to three regions. This trend has been attributed due to two main factors: . understanding their problems and conveying it to the company. New Changes in the business:  The interesting fact about Indian agriculture as opposed to world overall agriculture is that in world consumption of fungicide is on the higher side but in India weedicide consumption is on the higher side.

Bayer promotes this trend among farmers.  However in the recent years the trend is showing a change as the consumption level has shown change as per the world trend  In the recent years farmers have become more conscious of organic farming and they are shifting to addition of less chemical additive to the crop. which they associate directly with the lower level of weeds as weed take the maximum amount of nutrition from soil causing low production. Quality consciousness is low in India as compared to world. The farmers want high productivity in their fields. So they apply large amount of weedicide in the field. Use of fungicide help in maintaining the quality of the crop which is not much prevalent in India. . The company already has bio pesticides in its portfolio of products at global level and intends to promote the same in Indian conditions as the trend moves towards quality consciousness.

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