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
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing 3 4 3 With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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
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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.
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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.
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing 3 4 6 With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
• 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
Ph.D Thesis: Competitive Advantage Strategies for Rural Mariceting With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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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
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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.
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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
Available in 5 Mtrs. / 6 Mtrs.
Light - weight with utmost care about brackages Friction Losses
are high
Marginally Low
RPVC
Rigid
Non-resistance to chemicals
Available in 5 Mtrs. / 6 Mtrs.
Heavy weight detachable only with threading Friction losses
are high
Costlier
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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
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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
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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
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing 3 5 3 With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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.
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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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 _ , ^ .—_
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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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
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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
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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:
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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(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
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing 3 6 0 With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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
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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.
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing 3 6 2 With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing 3 6 3 With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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:
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing 3 6 5 With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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.
Ph.D Thesis: Competitive Advantage Strategies for Rural Mariceting With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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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
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing 3 6 9 With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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:
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing 3 7 0 With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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
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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.
Ph.D Thesis: Competitive Advantage Strategies for Rural Marlceting With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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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
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing 3 7 3 With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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.
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing 3 7 5 With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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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
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing 3 7 7 With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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.
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing 3 7 8 With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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:
Ph.D Thesis: Competitive Advantage Strategies for Rural Marlceting With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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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
Ph.D Thesis: Competitive Advantage Strategies for Rural Marlceting With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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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
Ph.D Thesis: Competitive Advantage Strategies for Rural Marketing With reference to Agriculture Inputs - HDPE Pipes -a case study -Amravathi University-2005
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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
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