CH 5 Old Tractor Market

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5.1 SCENARIO OF RURAL MARKET

The Indian rural market with its vast size and demand base offers great

opportunities to marketers. Two-thirds of countrys consumers live in rural areas

and almost half of the national income is generated here. It is only natural that

rural markets form an important part of the total market of India. Our nation is

classified in around 450 districts, and approximately 630000 villages which can

be sorted in different parameters such as literacy levels, accessibility, income

levels, penetration, distances from nearest towns (proximity to cities), etc.

Rural market is characterized by low per capita income, low literacy,

average agriculture productivity and low level of industrialization. Rural India

accounts for over 70 per cent of the countrys population. 50% of the rural

population cultivate their land, 27% work as labourers for cultivators, 10% are

petty shopkeepers and businessmen, 9% are non agriculture labourers, 2% are

salary earners and 2% are not well employed

Income generation in rural areas entirely depend on how land is used,

what crops are cultivated, how much is marketed, how much is consumed and

marketing arrangements for production. . ( Gopalaswami T. P. Rural Marketing

environment, problems and strategies 1st edition, Wheeler Publishers.)

the market bristles with variety of problems. The main challenges in rural

marketing are:

Physical Distribution

Channel Management

Promotion and Marketing Communication

Poor Infrastructure

(http://www.ficci.com/ficci/media-room/speeches-

presentations/2004/oct/pradeep _%20kashyap.ppt#24)

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The problems of physical distribution and channel management adversely

affect the service as well as the cost aspect. The existent market structure

consists of primary rural market and retail sales outlet. The structure involves

stock points in feeder towns to service these retail outlets at the village levels.

But it becomes difficult maintaining the required service level in the delivery of

the product at retail level.

Deterrents of rural marketing are:

Rural population is not concentrated i.e it is scattered in a very large area

Location of population

Location of village

Size of population in each village

( Gopalaswami T. P. Rural Marketing environment, problems and strategies 1st

edition, Wheeler Publishers.)

5.2RURAL MARKET SEGMENTSSince income is the deciding factor of the level of consumption, an

income-based segmentation will be appropriate for rural market also. Where

nearly 75 per cent of the income generation is from land in rural areas, the

landholding pattern or size of holdings can be used as a basis for segmentation

as a proxy. ( Gopalaswami T. P. Rural Marketing environment, problems and

strategies pg 105 1

st

edition, Wheeler Publishers.)

On sociological basis, rural market is segmented into six parts. These are:

1) Proprietors of land -which includes feudal tribute gatherers like zamindars, rich

money lenders and traders, who acquired large tracts of land and companies, or

persons who own large plantations.

2) Rich farmers who belong to the dominant caste of the area.

3) Small peasants or marginal farmers owning uneconomic land holding.

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4) Tenant farmers operating on rented lands belonging to the large land holders

and working on small uneconomic land holdings.

5) Agricultural labourers who work on the lands of landlords and rich farmers.

6) Artisans and others including unemployed as well.

The proprietors of land have no real roots in the village. They are rich and

lease out their land to other farmers in the village and have connections with

nearby cities and towns. Their consumption behaviour closely resemble that of

the urban upper class.

Rich farmers mostly belong to the dominant castes in the region, live in

villages and have strong roots therein. Their wield is considerable. They are big

and influencial farmers. They are much above the general rural population in

terms of economic, social and education status. They adopt mechanised and

progressive cultivation practices on their farms and always aspire for better living

conditions and have greater interaction with urban centres. Their consumption

behaviour much resembles urbanites.

Others include small and marginal farmers, agricultural labourers and

artisans. They constitute almost two-third of the rural population and their

monthly expenditure is very low and limited. Most of them are generally poor and

live below subsistence level. Their needs are for the very basic essentials like

food and clothing. This group forms the largest segment in rural market.

(Gaikwad V.R. 'A Search for the Rural Consumer' in New Opportunities in Indian

Agriculture, Indian Institute of Management, Ahmedabad, January 1973, pp 159-

172.)

The sociological basis of segmentation of rural market may be appropriate

for marketing of consumable and durable items. The first two segments,

proprietors of land and rich farmers are affluent and close to the urban style of

living. They constitute about one third of the rural market. Others, who constitute

two thirds of the total rural population, the preference will be for low value items.40


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The Rural Market Index developed by Hindustan Thompson Associates can

also be used for segmentation. But this index adopts an area approach and

presents the potential district-wise. This index can profitably be used for evolving

strategies for marketing agricultural inputs and consumable and durable items.

5.2.1 SEGMENTATION AND MARKETING STRATEGIES

An appropriate segmentation of the highly heterogeneous rural market

and identification of the needs and wants of different segments will form the very

basis for rural marketing strategies. For the rural market, it will be ideal to think of

strategies from the marketing mix point of view i.e. Product, Price, Place and

Promotion.

Social marketing

In addition to the strategies of marketing mix element wise, the recent

concept of social marketing is also very appropriate for the Indian rural market,

since the standard of living is very low and any effort to educate the rural

consumers would result in the expansion and growth of the rural market in a

generic sense.

Due to the low level of literacy, a buying decision in rural areas not only

takes a longer time, but also involves outside influences. Word of mouth is an

important message carrier in rural areas and 'Opinion leaders' do play a

significant role in influencing the prospective rural consumers about accepting or

rejecting a product or a brand.

Social marketing also plays an important role in promoting the image of a

company.

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5.3 OLD TRACTOR MARKET AND INDIAN FARMER:

India is the farmers dominated country in the World. Mostly population of India is

doing farming to fulfill their daily requirements and as a business. Near by 75%

peoples doing farming in India. Agriculture aspect in India comes through

different types of resources. Tractor is the main resource to fulfill the different

requirements of agriculture and others works. In earlier period poor farmers fulfill

farming requirements through their pet animals But these animals have taken

more time to complete any type of work at definite time Period and doesnt work

properly because they were not machine and have human nature. but tractor

doing all these work properly without any type of mistake and never tried to work.

At this time a large part of economically weak farmers have interest to buy old

tractor for their farming work. Mostly farmers buy and sale old tractor according

the seasons. The sugar cane Season is most important season of the farmers in

the area because sugar cane business has an important place in west U.P. So,

before and after the sugar cane season they have sale and buy old tractor

according their requirements.

Segmentation of old tractor Customers:

In Western Uttar Pradesh and mostly people Of Greater Noida are involving in

farming like sugar cane, gain and rice are main essential parts agriculture. There

are different types of farmers live here like Upper class, Middle class and Lower

class.

UPPER CLASS FARMERS:

Upper class farmers who have the agriculture land about 200 500 Bigha and

more. They have money to bear the agriculture expenses easily without any

problem and upper class customers have taken less interest to buy old tractor for

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their agriculture work because they have sufficient money to buy a new tractor

easily without any difficulty.

MIDDLE CLASS FARMERS:

On other hand the middle class farmers who have agriculture land about 100-50

Bigha. They have bear the agriculture expenses through own money and loan

money and fulfill thier requirement. Middle class farmer have taken more interest

to buy a old tractor in comparison of upper class farmers because they have not

sufficient money to buy a new tractor easily.

LOWER CLASS FARMERS:

Lower class farmer who have only 20-15 Bigh agriculture land. They have not

sufficient money to bear the agriculture expenses. Lower Class farmers have

much more interest to buy an old tractor for their agriculture work in comparison

of upper class and middle class farmers because they have not sufficient money

to buy a new tractor. So, the old tractor market mostly depends on middle class

and lower class farmers in the district Greater Noida because mostly middle

class and lower class farmers majority live in the area.

In Western Uttar Pradesh there are different Companies old tractor running but

customer of old tractors choose it through with the combination of their

economical condition and tractor condition.

Old Tractors Sequential list on the Basis of Customer Preference in thearea:

1: Mahindra

2: Tafe

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3: Ford

4: Swaraj

5: Escort

6: Eicher

7: Hmt

Customer Prefer These Old Tractors Through Different Reasons :

1: Availability of there spare parts easily.

2: Local Mechanic easily repairs.

3: Low Maintenance

4: Resale easily with reasonable price value.

After the buying the old tractor farmer used it for different types of work according

to their requirements and working power of old tractor. Mostly owner of old tractor

Prefer following Companies old tractors for different types of work .

1: Loading Mahindra,Swaraj, Ford and Sonalika.

2: Harvesting Mahindra , Swaraj,Ford,Sonalika, Eicher ,Tafe and Escort.

3: Irrigation - Mahindra,Swaraj,Ford,Sonalika,Eicher,Tafe and Escort.

4: Generate Electricity Eicher44


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There are Different reasons behind the Sale of Tractors:

To Buy a New Tractor

A Farmers Sale his tractor to buy a new tractor because they have seem that his

tractors does not work according to their requirements.

Bad Condition of Tractor

Some times farmer of tractor sale his tractor because he seems that his tractors

works in bad condition and want more money for maintenance for proper working

condition. Then he has decided to sale or changes his tractors and buys new

tractors.

Family Dispute on Tractor:

When a new tractor buy on two names of a family and after some time one of

family member whose name taken on buying time of tractor create dispute on

tractor and finally decide to sale that tractor.

Poor Economical Condition of Tractor Owner:

Sometimes owner of the tractor his tractor because he feel that he cant able to

bear the different types of expenses of tractor likes fuel and maintenance. So, he

finally decides to sale his tractor.

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5.4 Contribution of Different Tractors Companies in Old

Tractor Market:

There are various companies tractors models running in the western uttar

pradesh for agricultures works and others. Every company would like to

increase their tractors sales but tractors sales can be increases according

the customers needs and wants .who first fulfill the customer needs and

wants according to their requirement get benefit and brand goodwill in the

tractor market. Through brand goodwill an old tractor also preferred by the

customers.

Sequential List of Old Tractors on the Basis of their Contribution in the

market:

1: Mahindra

2: Tafe

3: Swaraj

4: Ford

5: Eicher

6: Sonalika

7: Escort

8: Hmt

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Mahindras Policy About Mahindra Vishwas Old Tractor Outlet:

Farm equipment maker Mahindra & Mahindra (M&M) is going full throttle with its

expansion plan for the tractor segment. The company is expecting to double its

used-tractor outlets, Mahindra Vishwas from the current 150 by March 2005.

Bouyed by the recovery in the domestic tractor market that set in post-October

2003, M&M sees a big opportunity in the pre-used tractor segment too.

Mahindra Vishwas which is a Rs 30-45 crore unit in itself sold around 3,000tractors last year.

We will double our Mahindra Vishwas business to 300 outlets by the end of this

fiscal. Mahindras farm equipment sector has been working on a number of

things like lowering our outstandings, reducing dealer stocks, product

developemnt etc. It is now lean and fit ready for great growth in future, said

Gautam Nagvekar, executive vice president, farm equipment sector.

Mahindra Vishwas started with nine outlets in 2002, then went up to 45 in 2003

and ended the 2004 fiscal with 150 outlets.

(http://www.magindia.com/manarch/news/man20651.html)

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5.5 OLD TRACTOR DEALERSHIP POTENTIAL FOR NEW

TRACTOR SALE:

If a Old Tractors Dealership is created by tractors companies then it will be

specially favorable for the existing new tractors sale because a new or fresh

market get through This scheme and new tractors dealers works for new tractors

business without any tension about old tractors .So, this Scheme is mostly

favorable for the new tractors dealers. Sellers of old tractors also have facilities to

get the true value of his tractors in a proper manner without any cheating and

fraud. Customers also have get a reliable and permanent point of old tractors

Sale, Service and Spare like new tractors. Old tractors dealers should works as

a new tractors dealers and get response like new tractors dealers .Old tractors

dealers can get profit through repair and refurbishing the old tractors and sale it

at margin able price.

Old Tractors Dealership Effect on New Tractors Sale:

At Present Tractors Market there are many competitors use different types of

strategies to increase their sales. So, the old tractors dealership should be

essential part of those strategies that are uses for increase the new tractors sale

with old tractors exchange scheme. Through old tractors dealership, new tractors

dealership can get full concentration over new tractors market and also get more

time to dedicate their self for new tractors market without old tractors business

worries. The new tractors dealers have not worry about how would exchange old

tractor with new tractor? How would estimate the value of old tractor? And how

would resale the old tractors without taken lose. The salesmans of the new

tractors dealers also get convinces about old tractors exchange because this

scheme reduce their burden and tension about old tractors market. So, the old

tractors dealership increases the new tractors sales without any types of problem.

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its essential for make the relationship between existing new tractor dealer and

old tractor dealer remain happier forever for the prosperity of both side business.

Old Tractor Dealership Raises Through:

Old tractors business would be raises through company proper Support to old

tractor dealers and mutually understanding between both dealers new and old

tractors dealers. There are three important pillars for successful old tractors

business running are

Company

Existing New Tractor Dealer

Old Tractor Dealer

The equal understanding between these three pillars is essentially for increase the

old tractors market.

Availability of facilities from Company Side to Old Tractor Dealers:

Company should provide facilities to the old tractors dealers like new

tractors dealers and make concentration on old tractors business.

Company cant provide commission to the old tractor dealers but offers

some incentive and reward according their work.

Company should permit the old tractor dealers to keep spare-part of other

company models.

Old tractor dealer dont have old tractor according to the customer

requirement. So, at that time Company should manage immediate delivery of that

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old tractor from other old tractor dealer who have and distribute the profit between

both dealers.

Company should appoint a separate sales-manager for old tractor business

that works like new tractor business.

Company should also provide the training to the old tractor dealers

mechanics.

Company should make a pact with government and private bank for old

tractors loan at reasonable interest rate to increase the old tractor Business.The

People whose interested to buy a old tractor are mostly economically weak and

have not sufficient money to buy easily without any problem. So, the loan facility on

old tractors increases the old tractors business and people have taken more

interest to buy old tractors.

Rules and Regulation for Old Tractor Dealership:

Some rules and regulations necessary for maintain the old tractor dealership are

If an old tractor dealer sale his tractor at other old tractor dealer territory

then, he is bond to give some part of profit to that dealer.

If an old tractor dealer buy an old tractor directly then he is bond to sale a

new tractor of existing new tractor dealer.

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5.6 Company Separate Market Strategies for Old Tractor

Business:

To Influence the old tractor Business Company creates separate market

strategies for old tractor business as well as new tractor market strategies to

increase the new tractors business.

MARKETING STRATEGIES:

Separate marketing strategies necessary for old tractors business like new

tractor business because marketing starts with the discovery of customer needs

and it ends with the satisfaction of these needs.

SALES AND PROMOTION STRATIGIES:

Sales and Promotion is a key ingredient in marketing campaigns. To use

effective tool of sales and promotion for increasing the old tractors business like

new tractor business.

Uses of Sales Promotion:

Introduction of old tractor dealership

Retrieving lost account

To overcoming a unique competitive situation

Support and supplement to the advertising effort

To overcome Seasonal slumps

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ADVERTISING STRATEGIES:

To Inform the People of the area about old tractor dealership through proper

advertising. Advertisement is necessary because its turn the attention of the

people through various Medium like newspapers, pamphlets, brochure and

banners.

Old Tractor Dealers run their Business through:Old Tractor Dealers can frequently sale his tractors through different medium that

increase their sale and reduce burden about engage money in the Old Tractor

Business through-

Effective direct sale of Old Tractors by himself through different types of

sales strategies.

Brokers have most important part in old tractors business. When a dealer

sale his tractor through the broker decide to take his commission on the

basis of percentage in the tractor sales price. Mostly professional broker

of the tractors have take 2% of the tractor sale. Some time non-

professional broker like local village middleman also works as a broker at

a reasonable commission about Rs.500Rs.1000 on a old tractor sale.

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5.7 Understanding Between Existing New Tractor Dealers

And Old Tractor Dealers: -

To establish the old tractor business perfectly in the market, its necessary that

both tractors dealers mutually understand themselves .If one of them have not

take part truly Or honestly then old tractor business not run long .So, these

following point are necessary for old tractor business

Understanding between both dealers on old tractor exchange with new

tractor.

Understanding between both dealers on old tractor transactions.

Understanding between both dealers on old tractors market.

When a new tractor customer come to the existing new tractor dealer to

exchange his old tractor with old tractor then existing new tractor dealer

should inform the old tractor dealer about it. Then old tractor dealer come to

the new tractor dealer and estimate the true of old tractor and take it on self

responsibility and give the tractor price to the new tractor dealer.

If old tractor dealer directly takes an old tractor then he should try about that

seller of old tractor buy new tractor from the existing new tractor dealer.

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Relationship between Old Tractor Dealer and Tractors Broker:

Its necessary for Old Tractor Dealer to make Healthy relation with tractors

brokers to maintain the old tractors sale because old tractors doesnt sale easily.

In this situation dealers money engages in these old tractors that they have

through exchange with new tractors. To get the solution of this problems through

make healthy relationships with tractors brokers because they have spend their

time mostly with the different types of old tractors users and keep full information

about the old tractors and their customers. So, Its necessary for tractor dealersto make prosperous relationship with tractor brokers. Old tractors Dealers should

also maintain the relationship with local tractors mechanics for old tractor

business because mostly customers of old tractors buy it through the local

mechanics suggestion that which old tractor is right or wrong for you. Thinking of

old tractors customers is that a mechanics know well about old tractors condition

and price in comparison of self. Its true that a mechanics known well about old

tractors condition and estimate true price with any type of mistakes that create

problem in future for customers of old tractors.

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Documents

CH 5 Old Tractor Market