Arzoo Kamrah

Roll No. 009

Consumer Behaviour Section-1

ANSWER TO QUESTION-1

1. What are the typical benefits of tractors in rural India?

Agricultural Applications

➢ Vegetal and Orchard farming was one of the primary areas where tractors aided in
enhancing the productivity power and performance
➢ Ploughing, tilling and landing fields, in addition to regular lawn care, landscape maintenance,
transfer or spreading fertilizers, and shrub clean-up.
➢ Yuvraj 215 can be used Sugar cane, Cotton, Soya, Grapes, pomegranates fields for inter
cultivation operations.
➢ Tractors are also used as Cultivator, Rotavator, Boom spray, Blow sprayer, water pump,
Trolley, Special attachment for Garbage handling across the state.

Non-Farming Commercial Applications:

➢ Transportation of the crops from farms to warehouses and the agriculture markets.
➢ Tractors used as a robust transportation vehicle: transporting luggage in airports and hotels,
driving on rural roads and used in infrastructure construction.
➢ Non-farm uses accounted for 30-35 percent of domestic tractor demand
➢ Farmers who owned tractors often had a practice of leasing them out to others during the
period on non-use

ANSWER TO QUESTION-2

Part-a Stereotypes that farmers have:

➢ Host of uses: Farmers are of a belief that a tractor must cater both the farming (agriculture)
and non-farming needs that is the commercial use
➢ Finance support: Rural farmers had income of around 75000 per annum for over 60 percent
of the households (2007) also their earnings were seasonal hence they required sound credit
options to have an equipment like a tractor.
 ➢ Reliability: Customers believed that branded products are reliable and offered good post
purchase service and maintenance . They had an opinion that branded goods would cost
more than local brands but would reduce labour time and be more cost effective
➢ Concern for Quality: Rural consumers are quality conscious and aspirational buyers they
preferred to purchase branded products that offered durability, reliability and ease of use
along with that they needed a host of benefits
➢ High durability and ease of use farming: Along with the brand comes high durability
perception that rooted their belief, hence a product which is more durable and long lasting
appeals rural customers

Part-b Potential customer of the Yuvraj 215 NXT

➢ Farmers with bullocks: Majority of farmers who owned 2 - 5 acres of land, have
conventionally ploughed with bullocks or power tillers but they are aspirational buyers for a
product like tractor.
➢ Additional tractors: Some farmers who already have a tractor, required an additional tractor
for certain applications like inter-culture, power generation or water pumping. In such a
situation Yuvraj 215NXT was a perfect product.
➢ Vegetal or orchards: The farmers who cultivated vegetable as well as those who own
orchards, or cultivate crops such as soyabean or cotton can also benefit from the Yuvraj"s
strong value proposition of productivity
➢ power and performance: In cotton crops the Yuvraj 215"s small size allows it to move
between the standing cotton crop for key operations such as inter-culture.
➢ Small and fragmented landholdings: There is low penetration of tractors amongst farmers
who had fragmented and small land holdings and thus this tractor can cater distinct need of
farmers with such characteristics.

Part-c Social factors affecting the purchase

➢ Limited financial resource: Rural farmers had income of around 75000 per annum for over
60 percent of the households (2007) also their earnings were seasonal hence they required
sound credit options to have an equipment like a tractor.
➢ Low awareness: The farmers who had very low income coupled with fragmented
landholdings relied heavily on monsoons for their crop productivity had very minimal to no
awareness about availability of tractors that are 15-20hp and can be purchased on eased
credit terms.
 ➢ Lack of structured credit facilities: Improper structure of credit institutions and lack of
awareness about the existing credit facilities provided by Non-banking financial services and
Public sector banks, was another social factor affecting purchase
➢ life style (traditional farming): 70% percent of the farming population had 2 hectares and
lesser. Only 15% of the Indian farms were above 2 hectares and large farms above 10
hectares were very few. The farmers also believed that purchasing brand products would
decrease their costs, time and labor and be more cost effective in the long run. These small
farmers primarily depend on monsoons and uneven irrigational systems, seasonal earning
and unstructured credit services. They depend on bullocks and human labor for farming.

ANSWER TO QUESTION-3

Stages in consumer buying decision

1. Identify need (farming and non-farming application)

2. Information gathering (networking, opinion leader, non-government organization,
distributor, dealer etc)
3. Evaluation of alternative (influencing criteria- Samriddhi center, Mahindra Shubhlabh
service, M&M financing facilities)
4. Purchase decision
5. Post purchase decision (usefulness, service support, spare parts availability ex-Mahindra
logistic limited)

1 NEED REALISATION: The farmer must first realize that he has a need for a tractor. Without this
stage it cannot go any further. Farmers will consider M&M as a branded product and they will
believe that they will get their value for money and good after sales service and maintenance. More
efficiency in farming can be achieved. Earlier the small farmers had relied on bullocks and manual
labor. Due to higher costs for bullocks and scarcity of labor the farmers need a tractor. Exhibit 3 also
gives creating drives. Also, they had various benefits such as higher farm productivity, ability to grow
more crops and the fact that tractors had lower maintenance cost. Increase the productivity
although a farmer used the tractor for farming for only 35 to 40 days, they would lease them out to
others. There was also a general interest in farm automation. The Yuvraj was designed for crops such
as soybeans, cotton, maize and sugarcane. Also, it was built for various applications like rotation,
cultivation, sowing, threshing, spraying etc.

2 INFORMATION SEARCHES: After this they will search for information and discuss with the people
in the village. So, in this case there are opinion leaders and since farmers network a lot and talk
among themselves a lot, one person who bought the product will recommend to others. They will be
happy if they get first had recommendation from the ones they know.

3 EVALUATION OF ALTERNATIVES: After this one would look at the evaluation of alternatives. Here
the other options available for a farmer are Greaves Ustad , Euro Trac VST 180D , Captain DI 2600 &
120 and Mitsubishi Shakti in the case of the farmer it would be the other popular tractor brands in
India.
4 PURCHASE DECISION: Now once the farmer decides to buy the tractor after all the above stages.
Two major factors of this stage are if they get any negative feedback from anyone the decision will
be affected. Also, if any adversity strikes or some unforeseeable loss or calamity strikes the farmer.
5 POST PURCHASE BEHAVIOR: Mahindra Logistics Limited will ensure the availability of spare parts
and after the sales across India. This will prove to be of advantage for the company and the farmers
will buy the product. If the tractor meets the expectation of the customer, they will be satisfied and
recommend the product to others also. Generally, the farmers will be more brand loyal.

ANSWER TO QUESTION-4

Part-a Key Actors for decision making

Basic Physical equipment Use Factors

Agricultural Use Non-Agricultural Use
Irrigation Transportation
Monsson performance Luggage conveyance
Landholding pattern Infrastructure and construction
Availability of credit Mining
MSP of food grains
Nature of soil and cropping patterns

Key Metrics for purchase

Mileage
Field Performance
Repair and maintenance costs
Alternative Use of tractors
Service network
 Availability of spare parts
Resale price

Part-b How could Mahindra use these actors to promote its sales

▰ Mahindra's Samridhhi centres guides the farmers for productivity related issues. They could
introduce the benefits of Yuvraj 215 NXT to the people visiting these centres.

▰ Mahindra ShubhLabh Services Ltd. provided technical assistance to farmers, in the form of
agronomy, grading, packaging etc. They could influence about the robustness of the tractor.

▰ M&M Financial Services Limited, a leading non- banking financial company provided financing for
the purchase of tractors. It has 3 million customer bases.

▰ Mahindra Logistics Limited focused on after-sales services like availability of spare parts in India.

ANSWER TO QUESTION-5

Promotional strategy for Yuvraj tractors

ADVERTISEMENT TOOLS:-

➢ Banners and Posters.

➢ Printing and calendars.
➢ Catalogue advertising.
➢ Window display.
➢ Construction of circles.
➢ Gift bags/ carry bags.
➢ Anniversary functions.
➢ News Papers.
➢ Wall Paintings.

SALES PROMOTION:-

➢ Good communication system and customer relations service.

➢ Gifts to loyal customers.
➢ Offering gift with the product (LIVE).
➢ Free service coupon warranty.
 ➢ Fuel check-up camp.

Formal Media

Reach of formal media is low in rural households (Print- 14 per cent, TV- 36 per cent, Cinema- 16 per
cent, and Radio- 18 per cent).

Informal/Rural Specific Media

Effective reach and personalized communication will help in realizing the promotional objectives.
Examples: Farm-to-Farm, Group Meeting of Rural, Customers, Rural entertainment programmers,
Opinion Leader, Product Demonstration etc.

ANSWER TO QUESTION-6

FINANCIAL ANALYSIS

Costing of bullock Cart= (70,000 to 115,000) per month +monthly expenses (1500 to 2000) +food
+medical charge

yearly charges= (70000 to 115000) +12*(1500 to 2000)

=(88000 to 137000)

Taking the average cost = (88000+137000)/2=113000 approx.

**Assumption the average bull cart age is 5 years; it means the farmer must replace them in next 5
years with zero scrape value.

Hence per year average bull cart fixed cost =113000/5=23000 approx.

Tractor costing :

Fixed price below the 200000,

Average time= (6 to 8 years) (farmer use it till 15 years as per case)

Let, Average life =10 years

Per year fixed cost=200000/10=20000

➢ Hence from the above calculation average fixed cost of tractor 20000 is less than average
per year fixed cost of bull cart 23000.
 ➢ Small scale farmers were usually depended on bullock carts and manual farming. Further a
typical bullock cart with two bulls’ cost would cost around Rs.70000-115000 with monthly
maintenance cost around about Rs. 2000 per month. While M&M priced the Yuvraj 215 NXT
tractor below Rs. 200000 with various financing options available.
➢ A Tractor is typically replaced after 6-8 years of use, but the estimated useful life of a tractor
is about 15 years after which it can be considered for resale which means much higher
productivity for a longer period compared to bullocks and manual farming.
➢ The tractor is specially designed for crops such as soybeans, cottons, maize and sugarcane
which were popular among these small farmers. Also, the Yuvraj was built for multiple
applications such as rotation, cultivation, sowing, threshing, spraying etc.
➢ Further the tractor can also be used for non-farming purposes such as transporting crops
from farms to warehouses and can be given on lease which could further increase the
income of the farmers

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