CHAPTER - VI OBSERVATIONS AND CONCLUSIONSshodhganga.inflibnet.ac.in/bitstream/10603/71959/13/13_chapter 6.p… · OBSERVATIONS AND CONCLUSIONS The present study is an in-depth and

CHAPTER - VI

OBSERVATIONS AND CONCLUSIONS

OBSERVATIONS AND CONCLUSIONS

The present study is an in-depth and defined inquiry to l<now the marketing

strategies adopted by manufacturers of HDPE pipes in the new and emerging

markets of rural India. It has many distinctive features that make the

exploration as different as it is challenging.

The study deals with a new, innovative and competitive product that is in the

process of establishing itself in the market, and gaining acceptance among rural

consumers. There are, however, skeptics who question its utility, and cast

doubts about its success.

The nature of the Indian rural market is peculiar due to varied reasons. It is a

non-homogeneous market unlike its urban counterpart, and is charaterised by

differences and diversities. It is essential to analyse the nature of the market, the

product, and the user-classes, to be able to draw inferences.

MAJOR FEATURES OF THE STUDY

1. This Pilot Study has been conducted in seven states in the country.

2. The study has a multi-level sample, and three categories of respondents,

3. The researcher has focused on collection of first-hand primary data

4. The nature of data is diverse and multi-leveled.

5. The respondents have distinctly different characteristics.

6. This is a purposive research with an objective to identify the criteria merit

aspects of market of manufacturers

Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing 3 4 2 With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005

7. Similarly, the study has an objective of making a competitive analysis of

responses of dealers concerning the local market situation, and the overall

strategies of manufacturers to market HDPE pipe products.

8. This is a pilot inquiry, whose conclusions are based on a large size sample

taken from different parts of the country. The sample is purposive, and

representative in nature.

FEATURES OF THE SAMPLE & RESPONDENTS

The study is taken on three different levels. Its samples have following

peculiarities:

Selection process. The selection process of sample is undertaken at

different levels. The levels of samples are as follows:

National Level

1. Of the 25 states and 7 union territories, 7 states are selected to draw

the sample. ( Maps enclosed in Appendix II)

2. Factors that influence the selection of states for inclusion in the sample

are-

- The level of agriculture

- Nature of farming

- Pattern of cropping

- Extent to which farmers are familiar with HDPE pipes

- Extent of networking and popularity of HDPE pipes

- Availability of irrigation facilities

- Assistance from state / central agencies


state Level

From each state, 2-6 districts are selected

Tiie table below lists the districts that were considered, and the state they

were located in.

Table 6.1

SAMPLE STATES AND DISTRICTS

States considered

Maharastra

Andhra Pradesh

Tamil Nadu

Karnataka

Rajasthan

Punjab

Haryana

Districts considered

Yavatmal, Kolhapur, Nashik

West Godavari, Krishna, Chittoor,

Warangal, Karimnagar, Kadappa

Madurai, Tanjore, Trichy

Bhagalkot, Bijapur

Kota, Sanchor, Pali

Ludhiyana, Firozpur

Ambala, Sonepat SIrsa

The selection of the districts was done on the following parameters

a) The availability of cultivable land.

b) Cropping pattern

c) Facilities for irrigation

d) Having a dealer network

e) Availability of a variety of competitive products

f) Good transport and communication network

District Level

In each district, 2-6 villages are selected for the study. The criteria for

selection of sample villages are:

Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005

344

a) Total size of cultivable land

b) Rainfall, irrigation facility

c) Types of crops cultivated

d) Cropping pattern

e) Communication and transportation facilities

f) Availability of information sources

g) Availability of HDPE pipes

h) Access to dealer network

Considering these factors, a three-tier sample is selected. The nature

of sample is as follows:

Table 6.2

SAMPLE CATEGORY

SI.

No.

1

2

3

Sample category

Farmers

Dealers

Manufacturers

Proposed

420

376

58

Contacted

420

376

58

Responses

367

332

47

%

87%

88%

81%

SELECT FEATURES OF PRODUCT

The HDPE pipe has many specific features and it has a competitive, agricultural

as well as industrial application of varied types.

PHYSICAL FEATURES OF HDPE PIPES

HDPE pipes have distinctive many physical features that are detailed here.

Ph.D Thesis: Competitive Advantage Strategies for Rural Mariceting With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005

345

Abrasion resistant

The pipes are abrasion-resistant, and have a lifespan 1.8 to 2.0

times greater than that of metal pipes.

Very low co-efficient of friction

This quality in HDPE pipes results in -

• Energy savings of up to 33 per cent

• Increase in pump efficiencies

• Reduction in scale formation

• Hazen Williams Constant C Value = 150

• Low rate of scaling due to smooth inner surface

Flexibility

• Bending radius 20 times dia. for pipes > 6 bar, bending radius 25

times dia for pipes <4 bar.

• Available in single lengths up to 500 mtrs. for diameters < DN

100mm.

• Reduce number of joints, thus reducing maintenance hassles.

• Does not require bends for laying in turnings / rough terrains and

having minimum radius.

• Sustains water hammers to the extent of 2.3 times the rated

pressure.

Corrosion-resistant

• Does not need any protective paints and oxides

• Zero maintenance for anti- corrosion during its lifetime.

• Hygienic, finding use even in foot industries to pipe water.

• Increases life of process equipment such as pumps,

compressors, filters, regulators, etc.


• Since HDPE is inert to most organic / inorganic cliemicals, tiie life

of pipes is increased.

Unbreakable

. Does not need additional protection or safety for external laying

. Does not need additional sand-cushion / bedding while being laid

underground.

. Excellent for cable protection when laid overground or

underground.

TECHNICAL FEATURES OF HDPE PIPE

Mechanical

Tensile strength at yield

Elongation at yield

Ultimate elongation

Impact resistance

Shore hardness D

Heat conductivity

Thermal expansion

Coefficient

Electrical

• Resistively

Thermal

• Coefficient of liner expansion OC

• Thermal conductivity

200-380 kg/Sq.cm

16%

>600%

2.5 - 100 kg cm/cm

60-65

0.37 k cal / mh oc

1.5-2.4x10-4

cm/cm oC

10 8 ohm /cm

13 X 10 4 cm/cm

11-12.4x10 4


347

Cal/sec/sq.cm/oc.cmTemperature limits

-50 + 80 oC

• Specific heat :

Physical

• Density

• Water Absorption :

0.55 cal/oC/gr

0.941 - 0.965 l<g/cum

< 0.01%

CORE FEATURES OF HOPE PIPE

Long durability with expected life of 100 years

UV stabilised, due to presence of carbon content

Can be stored in open sunlight for years together

Zero maintenance

Available in lengths of 40 ft

Permanent butt-fusion jointing makes pipes 100% leak proof

Non-toxic and non-biodegradable.

Simple installation methodology

Has the ability to withstand pressure surges (water hammer)

up to 2.3 times without the surge damping devices.

• Natural calamities like earthquakes will not affect pipe joints

COMMERCIAL FEATURES OF HOPE PIPES

As a product, HDPE pipes have many competitive product features. No product

can succeed in the market unless it has competitive and user-friendly features

that enthuse customers to opt for the product. From this point of view, HDPE

pipe qualities that make the product competitive and also commercially viable.

Ph.D Thesis: Competitive Advantage Strategies for Rural Marlceting With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005

348

A B C

D Dl D2 D3 D4

Table 6.3 COMMERCIAL FEATURES OF HOPE PIPES

Description

Nature Usage Area Consumer Segments

Market strength Cost Utility Facility

Availability

Very High

V

V

High

V V

V

Satisfactory

V V

V

Poor Very Poor

COMPETITIVE FEATURES OF HOPE PIPES

A product unless it is only of its kind has to face competition from different

courses and competitive zones. If a product can stand to the test of time and

market amidst competitive environment it can achieve desired level of success.

Table 6.4 COMPETITIVE FEATURES OF HOPE PIPES

SL No. 1 2 3 4 5 6 7 8

Parameters USP Price Comparative advantage Strengths Quality Special usage Need satisfaction capacity Alternative usages

Rating 2 3 4 5 1 7 8 6

COMPARATIVE ANALYSIS OF HOPE PIPES

HOPE pipes are an innovative product with unique features, which have

tremendous potential for use in agricultural operations as well as the industrial

equipment & accessories market A comparative analysis of pipe materials

currently in use indicates their merits and limitations.


349

A COMPARATIVE ANALYSIS Product Feature

Flexibility

Corrosion resistance

Jointing

Maneuverability

Frictional Losses

Cost Effective

HDPE

Flexibility which makes laying easy even in

uneven surfaces Inert to most organic and

inorganic chemicals. The

only recommended

pipes for chemicals,

effluent and gas HDPE pipes

comes in coil shape, available in single lengths upto 500 mtrs for diameter <

DN 100mm Light weight

handling easy and convenient Smooth internal surface ensures friction losses are very low. Resulting in

Energy Savings upto 33%

Economical by almost 40%,

when compared with GI Pipes, 20% by UPVC and marginally costilier than

PVC

Table 6.5 OF VARIED DEVICES OF IRRIGATION

GI

Rigid - unclear surface, has to connected with additional joints Not resistant to

corrosion

Available in 5 Mtrs. / 6 Mtrs.

Heavy weight -handling is difficulty

Friction losses are very high

Costlier

PVC

Rigid

Not recommended

due to its reactivity with

many chemicals


Light - weight with utmost care about brackages Friction Losses

are high

Marginally Low

RPVC

Rigid

Non-resistance to chemicals


Heavy weight detachable only with threading Friction losses

are high

Costlier


350

This comparative picture leads to tiie following conclusions.

MARKET ANALYSIS

The concept of market analysis has a great relevance in the context of the

present study.

The total size of HDPE market

The HDPE pipe market is a one of the major components of agricultural &

industrial equipment industry. The industry has come into existence as a result of

development of HDPE pipes and is currently estimated at Rs. 2000 crore.

The product is a multiple-use accessory and can be put to use in various ways.

The existing market size and growth structure is as follows:

Table 6.6

MARKET SIZE AND GROWTH STRUCTURE

SI. No.

1

2

3

Year

Before 1990

1995-2000

2000-2005

Market size

100 crores

350 crores

2000 crores

Capitalisation

Value

10 crores

25 crores

150 crores


351

Table 6.7 THE MAJOR PLAYERS AND THEIR MARKET SHARE

IN THE AGRICULTURE & DOMESTIC SEGMENT

SI. No.

1 2

3

4

5 6 7 8 9

10

11

Players

NOCIL Relience Industries

Ltd. Godavari Polymers

Pvt. Ltd Manlkya Plastics

Ltd. Rishi Plastics Flow Technics Rolex Industry

Oriplast Industries l^aruthl Pipes Pvt.

Ltd Sanjeevani Pipes

Others

Product Range

20mm to 630mm 20mm to 110mm

20mm to 500 mm

20mm to 630mm

20mm to UOmm 20mm to 110mm 20mm to 110 mm 20mm to 630 mm 20mm to 500 mm

20 mm to 200 mm

20mm to 315 mm

Market Share (Rs).

20 Crore 20 Crore

35 Crore

5 Crore

10 Crpre 5 Crore 3 Crore 3 Crore 10 Crore

6 Crore

233 Crore

%

6% 6%

10%

1%

3% 1% 1% 1% 3%

2%

66%

Rank

3 2

1

10

5 6 7 8 4

9

Table 6.8

MARKET FEATURES OF THE HDPE PIPE INDUSTRY

SI.

No.

1

2

3

Type of

Agri segment / domestic

Industrial

Applications/ducting for

cables

Rural drinking

water projects

Market size

500 crore

250 crore

1000 crore

Capitalisation

Value

^ 150 cr

Ph.D Thesis: Competitive Advantage Strategies for Rural Mari<eting With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005

352

RESPONSES OF FARMERS

Conclusions regarding product perception

The perception of the user or consumer regarding product is a nnajor indication,

as to how the product is understood, perceived, and accepted in the market. For

the purpose of this tudy, the user class is farmers, and it is the agricultural utility

of the product that has been taken into account. Hence, the study mainly

analyses the agricultural farm utility of HDPE pipes, and how it is perceived by

farmers.

For the purpose of the study, farmers are studied as users and consumers. Their

opinion and views are analysed and conclusions drawn.

PROFILE OF USERS

The researchers have made a careful analysis of the respondent farmers and

have collected information about their socio-economic background. This

information reflects on the personality of a representative farmer who uses HDPE

pipes, or is likely to switchover from use of non-HDPE pipe.

The characteristics of respondent farmers have been elaborated in some length

earlier in this study. The representative farmer is one who will help gives a clear

idea as to where the product is positioned in the markets of rural India. It shall

also throws light on how they perceive the product, and its chances of success


The representative user: A profile

*

*

*

*

*

*

Young farmers in the age group of 30-45

A new breed of educated and literate farmers

The average size of the holding is 13.44 acres

Growing crops on irrigate lands

Average number of crops per years : 2 - 3.

Crops grown: Paddy, wheat, cotton, groundnut, sunflower,

soyabean, sugarcane, pulses, palm oil, maize, bajra etc.

The data in the box helps to conclude that a middle-aged moderately educated

farmers, and those who are barely literate, are the potential buyers of HOPE

pipes. They are the new generation of farmers who have the following

characteristics.

CHARACTERISTICS OF POTENTIAL USERS

A Awakened Farmer - Due to poor knowledge and education Alternative - Due to availability of information Agile - Due to quick accessibility to information source Adaptive - Due to considerations of commercial

utility of farming. Acquiring - Limitations and constraints of irrigation and water Agricultural market - growing competition

Thus, the profile of potential users clearly indicates that farmers are no longer

illiterate and ill-informed as to the current trends in agriculture; they are and on

interested in making farming a profession, not merely as a means of livelihood.


354

PERCEPTION OF PRODUCT

Product perception is a major criterion to evaluate tine approach and attitude of

users towards a particular product. It allows us to understand why a user or

potential user chooses to opt for a product, or reject it. To gauge their

perception of the product, the researcher has asked farmers certain questions.

The major conclusions drawn with the help of the data are as follows

Product perceptions: Generic features

*

*

*

*

*

HDPE is a new and innovative product

It is a light- weight product

It is easy to handle, or transfer

It is very useful for freeflow of water

It is rust-free

Product perceptions: Comparative features

*

*

*

*

*

*

*

*

It is a flexible, portable, and light weight

It is of high quality

It is a product with multiple uses

It is a unbreakable

It is non-corrosive

It is durable

It has long life

It is available in single lengths _ , ^ .—_


355

Product perceptions: Limitations

The limitations of tine product as visualised and perceived by tlie users are worth

considering. That will indicate what features of the product could do with

improvement.

Weaknesses: Perceptions of buyers

>l< High-priced

>j< Limited utility in certain cases

i^ Non-availability of quality pipes, jointings & fittings

>|< Not properly understood by the users

>!< It struck up in bore well, lifting the pipe poses a problem

Decision-mal<ing: Switchover to HDPE pipes

Whether a farmer shall prefer to buy a HDPE pipe if other alternatives are

present is a matter of immense importance to dealers and manufacturers. The

responses of the farmers are crystalised.

THE POTENTIAL BUYERS

The potential buyers of HDPE pipes are farmers -

*

*

*

*

*

Having larger than average land holding

Harvesting two or more crops for year

Having bore-well or other irrigation facility

Having a s commercial approach to farming

Having sufficient yield and income from farming

Having access to information about the product

Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing Witii reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005

356

The data in the box clearly Indicates that the new rich elite, educated farmers

with fairly large farm holdings are the potential buyers for HDPE pipes.

Buying considerations

The reasons for buying HDPE pipes vary to a great degree. There are a large

number of visible and invisible factor affecting buying decisions. The major

considerations noticed in the study are:

BUYING CONSIDERATION OF FARMERS

• Low / reduced price

• Grant of government subsidy

• Competitive advantage of the product

• Total effect on yield, output and profit

1

BUYING PARAMETERS

The buying parameters are vital elements that a dealer or manufacturer has to

take cognizance of. This will help him to understand how the purchase decision

to buy HDPE pipe is taken by the buyer. The parameters against which the

farmer evaluates HDPE pipes, and the advantages that will accrue to him

consequent to the purchase are listed.

• Price

• Quality

• Durability

• Profitability

• Service Quality

- Competitive Advantage

- Comparative Advantage

- Expectantly Advantage

- Utility Advantage

- Satisfaction Advantage

Ph.D Thesis; Competitive Advantage Strategies for Rural Marketing With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005

357

BUYING PERFORMANCE

The criteria of selection of the product by the respondent, determines the

pattern of buying behaviour. The factors thqt motivate a buy decision are listed

here, and give a general idea of the buying preference of farmers.

BUYING PREFERENCE FOR HOPE PIPES

SI.No. 1

2

3

4

Attribute Quality of the product

Price

Brand image

Promotional effect

Variables Light, durable, non-corrosive Quoted price, discount, installation cost Known product, standing, Logo Advertising & dealer promotional efforts

INFORMATION SOURCES AND EFFECTS

The buying pattern is often decided the information inputs available to potential

buyers. The information inputs as they influence buying of HDPE pipes are

provided by

BUYING PREFERNCE & INFORMATION INPUTS

Dealers

Mechanics

Friends

Pre-users

Advertising

Opinion Makers

Advisors

Counselors

Experience Shares

Interpersonal inputs

DEALERS, AND MARKETING OF HDPE PIPES

The dealers play a vital role in promotion and purchase of HDPE pipes. The

multi-fqceded role of the dealers in promotion of HDPE pipes is explained in the

diagram:


358

(i

MOTIVATOR

- Rebate / Discount

- After Sales Service

- Distribution / Installation

•III! 11 III 1 1 1 1 1 ^ ^

OPINION MAKER

DEALER'S

ROLE

Advice to why HDPE Pipes

Advice as to suitability and Conveniecne

Advice regarding technical detsils and cost effectiveness

V

ADVISOR

Advice as to quality

Advice as to price quality

Brand Preference

i i i i i i i i i i i i i i i g

PROMOTER

Promoter of Product

Comparative Analyst

Sales of Specific Brand

Ph.D Thesis: Competitive Advantage Strategies for Rural (Marketing With reference to Agriculture Inputs-HDPE Pipes - A Case Study Amravathi University-2005 359

The importance of dealer in promotion of HDPE pipes as observed in tliis survey

can be explained as follows:

IMPORTANCE OF DEALER IN PROMOTION OF HDPE PIPES

- The Catalyst's Role

- The Stabilizer Role

- The Promoter Role

- The Developer Role

- The Ambassador

- The Activator Role

: Expedite Sales Volume

: Maintaining Pace of Competition

Promotes a brand

: Creates a favourable image

: Creates favourable opinion about brand

: Creates and desired user image

Dealers' perception of product

The perception of dealers regarding the product HDPE Pipe is a very important

factor responsible for promotion, projection, & positioning of HDPE Pipes. How

the dealers look at overall HDPE pipes and the irrigation industry, as well as agri

equipment business is a matter of great interest from the researcher's point of

view. The approach of dealers towards HDPE pipes is presented in the box.

Dealers' perception of agri-equipment industry

rr • The market is in the growth stage

• The consumer base is enlarging

Agri equipment and mechanised farming is getting a boost

• Commercial farming is taking root

• Competition is in the infant stage


Dealers' perception of HDPE pipes as a product

Durability

Qualitative superiority

Utility

Flexibility

Competitive strength

Price criteria

DEALER AS PROMOTER

The dealer has to play the role of product promoter. He has to look at the

product from different perspectives and dimensions. He has to weigh and

consider the needs and requirements of users, and match them with the

products of the manufacturers for whom he is the seller. As a promoter the

dealer plays following roles to promote HDPE pipes

Promoter

Advisor

Expert

Advocate

Guide

Negotiator

ROLE MODEL

Promote a particular brand of HDPE

Justifying superiority of HDPE

Explaining Technical Competence of the product

Proving competitive worth

Helping in selection

Differentiate and provide sales related facilities

Ph.D Thesis; Competitive Advantage Strategies for Rural Marketing With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005

361

DEALER AS INFORMATION PROVIDER

The dealer is a intermediary as also a mediator. He is the glue that bonds

buyers and sellers. He creates a common platform and makes negotiation

possible. He is the key to make the market a level playing field. Unless and until

be provides the required information to users, the desired element for a healthy

development of the HOPE pipe industry is not possible. The roles that dealers

need to play as information disseminators and opinion leaders, is shown in the

box.

1.

2.

3.

4.

5.

Opinion maimer.

Analyst

Teciinicai Guide

Product expert:

Decision-mal<er.

: Justifies buying at HDPE

: Proves merits of HDPE

: Explains superiority of HDPE

: Justifies why one brand over another

: Deciding Price - Quality - Exception - grid

MARKET PERCEPTION OF HDPE PIPE BY DEALER

The perception of dealer towards marketing of HDPE pipes is a major & critical

factor that will determine their success. It helps to understand how and in what

direction the market is being established and developed. A dealer is the person

who operates at the grass-root level but can also influence strategies of

manufacturers and influence policy-making as the field representative who offers

insights into the market and has a fee for the market pulse. Hence the dealer's

perception regarding market has a significant impact on policy formulation at the

corporate level.


DEALERS PERCEPTION OF MARKET: STATUS & GROWTH PROSPECT

The HDPE pipes market is growing in a stable and steady rate

> The market has sufficient growth potential

> The market is steadily organized

> The market is yet product oriented.

THE DEALERS' MARKET PERCEPTION

Product strengths & weaknesses

The HDPE Pipes has certain strengths and superior features over other

competitive products. However, it has certain limitations and drawbacks too. It

Is quite obvious that, the dealer who promotes and positions the product has

better understandings of the product than others. The researcher has drawn the

conclusions regarding strengths and weaknesses of the products, follows:

Strengths + Opportunities lie in vertical growth + Opportunities lie in horizontal growth + Opportunities lie in new market + Potentials are due to growing problems of water Inst + Awarnesss has provided new opportunities + Govt agencies have provided opportunities to expand

Weaknesses - Price is a major weakness - Unorganised nature of market - Lack of aggressive and planned policy - Perception of quality - Barriers in after sales service - Limitations of lack of communication policy - Limitations of network


INFORMATION INPUTS & PROMOTIONAL CAMPAIGN

The dealers' views regarding selection of a right medium for information and

promotion has its own impact. What media of promotion can attract the

potential and present buyers as perceived by the dealers is a major information

input for the manufacturer. He can rightly position the product, and evaluate the

strategies for its promotion. The conclusion as to selecting the promotional

media in to formalizatioe for decision making is explained in the box.

INFORMTION INPUTS: MAJOR DETERMINANTS

• Reliable

• Technically correct

• Convincing

• Need satisfying

• Purposive

• Motivating

• Well-defined

Encouraging MEDIA

Formal 1) Cable and T.V. II) Newpapers & publications Non-formal A) Hoardings / Kiosk/Wall painting B) Formal / Informal meeetings C) Melas and Haats

RANKING

2 1

2 1 3

THE STRATEGISTS^ APPROACH

THE MANUFACTURERS' VIEW

The researcher has made a careful and succient inquiry as to the issues involved

in the promotion, positioning and pricing of HDPE Pipes. These inputs are of

high utility to understand the core issues related with overall marketing of HDPE


364

Pipes. It has also helped to look into the policy makers mind, know about the

mechanism of formulation of strategy that is being adopted by HOPE Pipe

manufacturers.

SALIENT FEATURES OF PLAYERS IN THE HOPE PIPE INDUSTRY

The nature of the players and the size of their operations is a key indicator of the

health of the industry. This helps us to know the composition of the industry and

its key determinants. The salient features of the existing players of HOPE pipe

industry are summarised.

* Unorganised : Majority of business is in the unorganised sector

* The turnover of small and medium players is moderate

* The average age of unit is 15 years

* The primary forms of business are: Pvt. Ltd./ Partnership firms

* Turnover ranges upto Rs. 5 crore

* Area of activity : Regional

* Territorial features. : Interior Villages, farmers with low

level of education, and poor logistics

CORE COMPETENCE AS AN INDUSTRY FEATURE

The concept of core competence is relatively new, and has emerged due to

growing corporate competitive spirit among companies, and the need for a

professional approach in managing them. It is no longer a valid proposition that

a specific set of consumers always remain loyal to brand or corporate entity.

The rapid changes in technology, product features, marketing and distribution

policies as well as pricing strategies have made the concept of core competence

more valid and important. The core competence as visualised by players is as

follows:


CORE COMPETENCE

FACTOR OF HOPE PIPES

Quality

Brand equity

Distribution network

Relationship with

customers

1 Marketing excellence

JUSTIFICATION

Quality- and utility-wise, HDPE pipes

are better than conventional pipes. Producing quality

goods is an important long-term

strategy for any company; in rural

marketing, any message regarding

quality spreads like wildfire.

For HDPE pipes sold in rural markets, creation of a

brand image is very important. Marketers of HDPE

pipe must have the ability to create, maintain, protect

and enhance their brand equity.

HDPE pipes are not sold directly to farmers in the agri-

sector. Selling of these pipes involves many factors

like providing pre-sales and after- sales service to the

farmers in rural areas.

Relationship with the farmers is very important, because

HDPE pipes are a durable product. Farmers are generally

skeptical about information provided by companies; in

such cases, pre-use farmers will play major role in

convincing buyers through one-to-one interactions.

Modern marketing calls for more than developing of

quality products, pricing them attractively, and making

them accessible to target customers. HDPE pipe

companies must create excellence in marketing

activities thorough their interface

with present and potential farmers, dealers, mechanics,

etc.


366

VISUALISATION OF FUTURE OF HDPE PIPE INDUSTRY

No one but the manufacturer knows more about the prospects of the industry in

which he operates. An analysis of past trends and the present scenario helps

him to understand the industry and assess its prospects for the future. These

are some points that enable a critical assessment of the industry to

manufacturers and give them an understanding into the emerging trends in the

market.

MANUFACTURERS' PERCEPTION OF HDPE PIPE INDUSTRY

1 * The past growth is positive

* Growth trends are healthy

* Market is expanding

* Market shows upward trend in all segments

* Competitive spirit is on rise

* Market is becoming more formal and organised

* Consumers are inclined to purchase HDPE pipes

* HDPE pipes has emerging as a product alternative

* Cost is the ONLY inhibiting factor to increasing sales

From this visualization, it is clearly that HDPE manufacturers are positive that the

prospects for the industry are good, and they are expecting an upward trend in

growth prospects for all segments of the market. The only threat they perceive

to the industry is the entry into the sector of large companies - national or MNC

- who have technology and market strengths to dent the market.

Ph.D Thesis: Competitive Advantage Strategies for Rural IVIarketing 3 6 7 With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005

MARKET ORIENTATION & PLANNING

The strategist as an industry player lias a major role to perform in the area of

planning. Planning - whether long term or short term - has its own impact on

the success of a firm. A firm cannot face competition unless it gears up to meet

it. This can only be achieved by appropriate market planning. The researcher has

studied how the HDPE pipe industry plans and organises its marketing systems,

and the parameters of market orientation. The salient features of market

orientation as noted by the researcher are illustrated here.

MARKET ORIENTATION OF HDPE INDUSTRY

MARKET ORIENTATION • Top-level planning • Pragmatic approach • Segment-oriented • Organised • SWOT analysis • MRP approach • Focus on core competence

CRITERIA & PREMISES OF PLANNING

The planners take into account many aspects of the planning process, and make

it a reliable as well as profitable document. The methodology of the planning

system as adopted by the planners is depicted in the box.

STRATEGY AND PLANNING PREMISES

• Written document

• Consideration for marketing mix

• Evaluation mechanism

• Control system

• Decision-making process

Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing 3 6 8 Witii reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005

PRICING POLICIES AND CONSIDERATION

Pricing is a critical component of marketing strategies. It reflects the realisation

of an opportunity or a threat, and what the manufacturer wants to achieve. From

this point of view, pricing is a prime criteria of the marketing plan and a tool

that helps to evaluate the success of a particular market strategy.

The researcher has tried to identify the pricing parameters that dominate the

formation of marketing strategy.

PRICING AS A ELEMENT OF MARKETING STRATEGY

* Market-can-bear approach. The targeted market segment is farmers

within shaky buyer power.

* Dominant external factors. The major impact is of government policies,

and the pricing of substitutes.

* ROIas base. The major objective is to earn minimum required revenue.

* Cultivating a cult of buyers. Creating affinity and loyalty towards HDPE

pipe as the most suitable option.

* Competitive considerations. The availability different comparative

products, and substitutes that may affect chances of success.

* Promotional Inputs : Using suitable type of communication and

comparision


PROMOTING HDPE PIPES: CORE STRATEGY

The researcher has tried to identify as to how the strategy of promoting HDPE

pipes can be properly projected and positioned in a competitive marl<et. The

product is relatively new, is not properly established, and faces competition

from the market leaders as well as niche players. The projective strategist has

to make special efforts to promote HDPE pipes. The box indicates the main

features of a promotional strategy that existing players can adopt to their

advantage.

FEATURES OF PROMOTIONAL STRATEGY

Less aggressive approach

Formal mode of information

Emphasis on user-friendly approach

Creating quality-consciousness

Cultivating a suitable network

Projection of steady growth

GENERAL CONCLUSIONS

The general conclusions regarding marketing of HDPE pipes by consumers by the

dealers a manufacturers as noticed in the study are as follows:


MATRIX OF CONSUMER UNDERSTANDING

PARAMETER

Segment

Income class

Crop profile

Irrigation facility

Social background

Product need

DEALER

Rural - dominant

Middle & Upper middle

Multiple crops

Wet Land / with

bore- well

Educated - semi

educated

Cost-effective moderate

quality

MANUFACTURER

Rural - dominant

Middle & Upper middle

Multiple crops

Wet land or large-size

dry land farming

Educated - semi

educated

Low cost, high -quality

There a good number of potential buyers in the areas surveyed whom dealers

and manufacturers can reach with new or improved products. With the

government coming up with policies explicitly designed to promote agriculture

and rural development, the HOPE pipe industry is poised to get a big boost.

The concept of agriculture as a way of living is slowly but definitely being

replaced by the idea that agriculture be taken up as a commercial and profit-

making adventure. The socio-economic milieu and the cultural as well as

educational situation in rural India is changing rapidly. These changes are

reflected in the increasing access rural consumers have to new products and

improved agricultural method, technologies, and inputs.

Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing With reference to Agricukure Inputs - HOPE Pipes -a case study -Amravathi University-2005

371

UNDERSTANDING OF MARKETS

The HDPE pipe market has to be considered and analysed from three different

dimensions Viz. Consumers (farmers), promoters (dealers), and producers (

HDPE manufacturers). These three dimensions of HDPE markets as perceived by

the researcher are projected here.

Environment Environment

PERCEPTION OF HDPE PIPE MARKET

The HDPE pipe market clearly is in its growth stage. It is a progressive market

with opportunity for both vertical and horizontal expansion. The key factors that

may influence the success in the market are upgrading technology, improving

quality improvement, and continuous efforts to reduce the cost of the product to

make it affordable as well as competitive.


372

SUGGESTIONS

In order to improve the chances of a stand success in the HDPE IMarl<et it is

essential that certain improvements and modifications be made in the exising

marl<eting & promotional policies.

Some of the useful suggestions that the researcher has come up with, are:

Proper targeting

Targeting the farmer to use HDPE pipes is easy because he is accustomed to use

GI pipes, where he perceives as being stronger. Mechanics can play a vital role

to convince farmers about the utility and durability of HDPE pipes, and the ease

with which they can be installed, in comparison to GI pipes.

SUGGESTED MODEL FOR HOPE PIPES

Based on the study the researcher has proposed a model for a

hypothetical or ideas producer of HDPE Pipe. The researcher has

considered following three as major elements in the HDPE pipe Marketing.

• Manufacturers

• Dealers

• Consumers


Customer FoGussed sales mode for HOPE pipes External Environment

Transportation problem

Resolution

Competitive strategy

Language barrier

Barriers in reaching pre-user

Absence of suitable ad media

Resisitance from industry

Competitive challenges

Consumers resistance

Substitutes challenge

Substitute products features

Improper perception of consumer

Reservation in the market

The market for HDPE pipes is dynamic, flexible and continuously changing.

The market has been identified with following major features.

4 P's of basic marketing mix

1. Product

2. Pricing

3. Physical distribution

4. Promotion

Enlargement of 4 P's to 6 P's for HDPE pipe mariceting

In India marketing and selling are seen on two sides of the same coin. The coin

being "THE BUSINESS", this leads to the design and development of a rural

integrated marketing mix enlargement of 4 Ps to 6 Ps i.e., besides PRODUCT,

PRICE, PLACE AND PROMOTION, two more P's viz., PEOPLE AND PROFIT and

comparing 3C's COMPANY, COMPETITOR and CUSTOMER are to be

included. In this context PEOPLE include marketing sales team, dealer, farmer

and these 5 Ps leads to PROFIT. The marketing mix strategy essentially has to

flow from through understanding of the farmer.


Table 6.9

Enlarged 4 P's to 6 P's comparing with 3 C's

\^ 3"C"c

6'P"s \ ^

Product

Price

Place

Promotion

People

Profit

Company

High quality

Cost effective

Feeder villages &

interior villages

Aggressive

Strategy

Hardcore Team

ROI

Competitor

At par

Competitive

Early Reach

Product

Demonstrations

Loyal team

Value for money

Customer

Durability

Affordable

Easy availability

Awareness

Creation

Relationship

Satisfaction

PRODUCT MANAGEMENT

Product strategy is pivotal to any efforts to market a product. A producer's

mission is to manufacture a quality product that will not only satisfy a need but

also win customer loyalty. To ensure that HDPE pipes deliver on the promises

that manufacturers - and their dealers - make of them, they should be only

made with 100% virgin material; use of reprocessed materials results in poor

quality of pipe which in turn, reduces its longevity and increases maintenance

costs.

PRICE MANAGEMENT

Pricing is a crucial element in the marketing of HDPE pipes. The price of a

product should be reasonable and should be affordable to the farming


376

community. The manufactures should adopt a cost-effective pricing policy so

that potential consumers do not turn to buying pipes made of materials of poor

quality, or those made with alternate pipe materials.

MANAGING DISTRIBUTION

Distribution is an integral part of marketing and selling. Its function is to

distribute a manufacturer's products to specific markets in a geographically

defined area. There are three problems pertaining to channel management for

HDPE pipes: transportation, warehousing and communication. HOPE pipes

comes in coils; transportation is on volume basis rather than weight basis.

Manufacturers and the distribution network should direct efforts to reach the

product to feeder towns as also interior villages, so that it is more easily

accessible and available than pipe manufactured by competitors, as well as

substitutes.

PROMOTION MANAGEMENT

As the farmer is price sensitive, the impact of sales promotion may be highly

significant. Innovative sales promotion measures would surely induce a farmer

to try a brand. Product promotions should ideally be conducted in rural areas

during the post-harvest period when the farmers are flush with funds from the

sales proceeds of their crops. HDPE pipes are more durable than the

conventional pipes; the product demonstration will create confidence among the

farmers. Special awareness camps should conduct in melas, Jhatrss etc.

PEOPLE MANAGEMENT

In this context, 'people' include the marketing and sales teams, dealers, and

farmers. The hardcore sales force plays an important role in achieving success in


competitive situations. Systematic working with potential customers will enable

the sales person to achieve the planned sales volume. During the season,

organised campaigns with special emphasis on farmer contacts and HDPE pipe

demonstrations have the potential to increase demand and improve sales.

The dealer is the predominant conduit to reach farmers, and create confidence in

the farming community about a product. He has to play the role of a catalyst and

intermediary to win loyalty to the products he promotes for manufacturers.

Nurturing of this relationship by HDPE pipe dealers is critical to the growth of

the industry even as it meets the needs of the farming community.

PROFIT MANAGEMENT

The marketing concept does not imply the customer satisfaction in the only

objective of an organisation. It is not a philanthropic activity aimed at helping

the farmers at the expense of the business institution. Rather, it recognises that

to reach profit objectives there must be a balance between delivering farmer

satisfaction, and profitability.

Profit is essential for growth of the HDPE pipe industry. Managing turnover and

finances in this industry is a difficult task, given the crucial role rainfall plays in

the prosperity of the agricultural sector, and the seasonal incomes that farmers

have to contend with. The combination of attractive margins, credit and

discount schemes to motivate dealers can cut into profits. The more profit

dealers make, the more loyal they will be to the company/manufacturer.


OUTCOMES OF THE STRATEGY

*

*

*

* 1 ll

Outcome strategy

Outcome differentiation

Outcome relationship

Outcome value exchanged

CUSTOMER FOCUSSED SALES MODE FOR HOPE PIPES

EXTERNAL ENVIRONMENT

Transportation problem resolution

Competition strategy

Physical

Desired

Close to Dealers' request

Prompt

Effective

Language barrier

Barriers in reaching farmers

Absence of suitable adv. media

Promotions

Mix of formal information

Easy to understand

Impressive

OUTCOME STRATEGY

The outcome strategy for a HDPE pipe producer and dealer should concentrate

as the following aspects:


379

1 * *

*

*

*

*

Look into customer needs

Offer a quality product

Control costs

Attract customers with low prices

Effective promotion offers a fair chance

Right distribution is a deciding factor

OUTCOME DIFFERENTIATION

The outcome differentiation between a product that is a sure-fire winner, and its

competitors can be identified by taking into account the following factors.

*

*

*

*

*

*

Price advantage

Quality-based product appeal

Developing appropriate brand image

Superior distribution

Higher returns to dealer

More tangible gains to users

OUTCOME RELATIONSHIP

*

*

*

*

*

*

*

Customer focused promotion

User needs as a sales proposition

Highly purposive

Effective distribution

Extraordinary after-sales service

Attending to post-purchase needs

Attracting potential buyers


380

OUTCOME VALUE EXCHANGED

The ultimate aim of the marketing thrust is to establish the identify of a product,

and build an image for the company. This is achieved by a acquiring highly

justified, profitable and mutually satisfying outcome of value exchanged.

Final outcome for hypothetical manufacturers/ dealers/ customers

For manufacturers

*

*

*

*

*

*

For dealers

*

*

*

*

*

Brand Image

Croporate entity

Higher market share

Largest customer base

Optimise corporate profitability

Achieve wealth maximisation

Establishing a justifiable position

Transfer client base

Appropriate positioning in a market

Effective distribution network

Profit maximisation


381

For customers

*

*

*

*

*

*

Value addition

Need satisfying product

Desired usability

Price advantage

Quality product

Effective after sales service

Ph.D Thesis: Competitive Advantage Strategies for Rural Marlceting Witli reference to Agriculture Inputs - HOPE Pipes -a case study -Amravathi University-2005

382

Documents

CHAPTER - VI OBSERVATIONS AND CONCLUSIONSshodhganga.inflibnet.ac.in/bitstream/10603/71959/13/13_chapter 6.p… · OBSERVATIONS AND CONCLUSIONS The present study is an in-depth and