DEVELOPMENT OF MARKETING STRATEGIES FOR PESTICIDES Document subtitle SUBMITTED TO: Dr. SHUBHANGI SALOKHE SUBMITTED BY: NAVNEET KAMBOJ PRN: 16020242026 MBA-AB Sr. No. Contents Pg.
No. 1. Title 1 2. Preface 1 3. Acknowledgement 2 4. Introduction 3 6.
Methodology and data 9 7. Major Findings 9 TITLE: DEVELOPMENT OF MARKETING STRATEGIES FOR PESTICIDES PREFACE: The increase in demand for food, the advent of newtechnologies, shrinking land under agriculture and uneven weather conditionsare all creating a need to improve the yields of the crop and thus increase theproductivity. Even the use of hybrid or high yielding varieties of crops cannotaddress this problem alone as they can be affected by diseases, weeds or peststhus damaging them and decreasing the productivity. These diseases, weeds andpests thus are very critical to the productivity of the crops and thus need tobe destroyed for enhancing the yield and productivity.Crop protection includes managing the various cropdiseases, pests and weeds that mightcause damage to the agricultural crops. They are diluted in the recommendeddosage and then applied to the crops to minimizethe damage and thus, increase the yield. Due to the above discussed factors,Crop Protection is increasingly gaining importance and more and more farmersare trying to resort to these to get better yields from their farms.SinceAsia is one of the largest food producing regions of the world, the CropProtection Industry of the Asia Pacific Region is expected to growsignificantly in the coming years.
Thismeans that crop protection today is more sustainable than at any point inhistory.The crop protection chemicals marketwas valued at USD 51.2 billion in 2015 and is estimated to reach USD 77.50billion by 2020 at a CAGR of 8.6%. Latin America leads the crop protectionchemicals market, especially Brazil, which was the biggest single countrymarket in 2015. Besides Brazil, Argentina was estimated to have a market shareof around USD 2.5 billion.
Asia Paci?c was the second largest market followedby Europe. Asia Paci?c is expectedto be the fastest-growing market during the forecasted period. This report focuses on developing newmarketing strategies for pesticides in order to survive in the toughcompetition faced by the major market players.
ACKNOWLEDGMENT: Thedissertation report was a great learning experience where in I got to learn alot about the marketing strategies for pesticides. I take this as a greatlearning opportunity where I got to learn a lot. I am thankful to Dr. Shubhangi Salokhe,Professor, Symbiosis Institute ofInternational Business, Pune for guiding me throughout the report and helpingme learn about the course and the topic. Navneet Kamboj INTRODUCTION: Crop protection is thecollection of tools, products and practices farmers use to protect their cropsfrom weeds, pests and disease. Farmers across the world are concerned with cropprotection.
In response, modern agriculture has provided them with a variety ofsolutions. “Crop Protection Productsplay a major role in protection of the crop from pests, weeds and diseases.They are diluted in recommended doses and applied on the crop during the seasonto prevent damage” FUNDAMENTAL GROWTHDRIVERS:· Growing populationleading to higher need for agri output · Reduction in arable landdue to increasing urbanization – focus on yield/ productivity· Changing dietarypreferences driving higher demand for protein and nutrients · Food security is a keyfocus area for all countries · Intensification ofagriculture in emerging markets CHALLENGES: CLASSIFICATION OF CROP PROTECTION INDUSTRY The crop protectionindustry can be divided into the two classes: · Synthetic Pesticides– include various chemically synthesized classes of pesticide likeOrganophosphates, Carbamates, Organochlorines,Phenoxys, Triazines etc · Biological Pesticides – include Microbial Pesticides, Plant-incorporatedprotectants, biochemical pesticides CLASSIFICATIONOF PESTICIDES The global market for pesticides is expected toregister a CAGR of 4.5% between 2016 and 2021. By 2022, Asia-Pacific isprojected to grow at the fastest pace, followed by South America.
The demandand growth of synthetic pesticides in Europe and North America are likely to bethe slowest, due to market saturation and pesticides ban in the regions asshown in the graph below. VALUECHAIN ACROSS CROP PROTECTION INDUSTRY There are 4 key components in the Agrochemicals ValueChain – · Research and development– The development of any new cropprotection chemical involves a lot ofresearch and effort in terms of time, infrastructure and investment. For anynew chemical to come up in the market, a lot of research has to be done toinvent a new Molecule also known as Active Ingredient. Most of the top playerslike Bayer, Syngenta, DuPont spend a hugepart of their revenue in research of an active ingredient and molecule.
· Technical grade manufacturing– this part of the value chain deals with the manufacturing of the activeingredient found out. These chemicals are highlytoxic and concentrated in nature. A lot of companies have their own plants tomanufacture the active ingredient developed. · FormulationManufacturing – in this part ofthe value chain, the final formulation of the agrochemicals takes place.Usually the companies that have sales and distribution network of their own,also manufacture the end product themselves and sell under their own brandname. · Marketingand distribution – this part dealswith the distribution of the end product i.e the agrochemicals to the end usersie farmers with the help of the various distributors and retailers present atvarious levels across the different regions.
Co-Distribution and marketing arealso prevalent where a brand markets and sells products of another brand usingit’s wide distribution network. INDUSTRYSTRUCTURE The Companies areclassified into Tier 1, 2 and 3 based upon their presence in value chain. Themajor leading global players are present all across the value chain while theothers are either Formulation Manufacturers or Distributors.
Their role can be brieflydescribed as follows:Integrated global Players:They are present allacross the value chain and are strongly involved in research and development ofnew AI or molecule, the registration process and then formulation anddistribution of the same.Tier II: They are involved informulation and it’s registration and distribution or research of newformulations usually following Reverse engineering.Tier III:They are involved inpackaging and distribution of the Crop Protection Chemicals LITERATURE REVIEWPast studies pave way for futureresearch endeavours.
An acquaintance with earlier studies is necessary todevelop better understanding of the present study and to formulate anappropriate research methodology. Keeping in view the objectives of the study,an attempt has been made to review the past studies related to the subject. A detailed review on various concepts andmethodologies are presented under the fallowing headings· Market share of differentbrands of pesticides. · Factors influencing the brandpreference of pesticides.
· Promotional strategies employedby the pesticide companies. METHODOLOGY AND DATACOLLECTION: This report is based onprimary and secondary data collected from various sources.The report is basedon qualitative data collected from various sources like internet and variousagri input companies. The secondary data collected from these sources will thenbe analysed and thus a marketing strategy will be developed for pesticides inAsia Pacific region. PRIMARY DATA COLLECTION: The studywas conducted for grape growers in Maharashtra, with the sample being concentratedaround patches of grape growers in and around Baramati and Sangli.A clustersampling technique was used and within these clusters, a stratified sampling techniquewas undertaken based on the size of holding and caste demographics. A total of100 farmers and 30 dealers/retailers were chosen as the sample size.
Aschedule was prepared that was administered to the farmers and distributors;the questionnaire as a toolto gather data, seemed inappropriate, first, because of the literacy rate ofthe farmers; Second,due to the product complexity and the technical complexity involved. The use ofpersonal Interviewswhile administering the schedule could help (i) Insimplifying aspects of the questionnaire; (ii) Watchingcustomer’s reactions and personal observations; (iii) Gettinga deeper understanding of the underlying reasons and effects. Findings: FarmerProfile: The farmerprofile indicated that almost all farmers have large holdings with an averageland holding of 25 acres and are well off comparatively. Croppingand Spraying Pattern: Thecropping pattern revealed that the farmers prefer to grow grapes in comparisonto other Crops andabout 80% of the cultivated area was under grapes. The average yield in quintalper acre for the grapes grown was also high. The number of sprays per cropseason amounted to 10-12 sprays, with the spraying frequency being 8–10 days.
Thisvaried across the months. IrrigationFacilities: Baramatiis well drained and irrigated, so as to facilitate 2-3 crops in 10-11 months ofcultivation.It was found that 86 % of the total grapes acreage had boring facility; about60% of thetotal grape acreage had drip irrigation. CashCredit ratio: For thesmaller farmers with land holding of less than 25 acres, the credit ratio is 30%; these farmers actually felt the need to avail a cash discount benefit andmainly bought on cash. As far as the farmers with land holdings of more than 25acres was concerned, the credit ratio is 80%; this was primarily due torelationships that they could build with their lenders and suppliers. The netcredit ratio is 60%.
Innovativenessand product loyalty: The studyrevealed that the bigger farmers are more brand conscious, and show a lowproduct loyalty. While the farmers were satisfied with their current products,about 70 % of the farmers were keen in trying out new agrochemical products andtechniques to prevent resistance formation. The rest of them waited for theperformance to reduce before changing their products/ brands. CustomerBuying Behaviour: Criticalsuccess factors in determining the choice of the product was identified, viz.
,company name, farmers’ recommendation, dealers’ recommendation, launch of newchemicals and trial pack result. The figure depicts the parameters which wererated in order of importance by the customers’ choice. It wasobserved that 84% of the farmers were knowledgeable and actually purchase thepesticide based on the technical compounds rather than on the company name andimage.
As far assource of information is concerned, 40 % of the farmers took advice from thedealers, 95% filedthe product literature for future reference, and 15 % of the farmers watchedthe agri-programmes, like Krishi Darshan on Doordarshan on TV. The farmers alsorely on local newspapers and agricultural trade journals for information. Whileco-farmer recommendations and experiences play a major role as a determinant ofproduct quality, the company officials and the qualified field staff acted asmajor educators, influencers and persons who were consulted in the purchasedecision in fact, the results from the study reveal that the farmers alsodesired such help from the company; this could take place through meetings,contacts, demonstrations etc. The field staffs and field assistants not onlycampaigned for the products but also educated and guided the farmers. Villagefairs and stage shows are used to display product offerings; video vans are usedto screen pictures and documentary films to attract farmers, and educate themon the product and brand offerings and the usage techniques. Thefarmers were also educated on pests and diseases and the corrective measuresthat were required to be undertaken. This highlighted the need for appropriatecontact strategies between the company and the farmers.
The study indicated theimportance of farmer meetings and face-to-face contact with company officialsas a major educator and influencer for the adoption and usage of chemicalproducts. While 62 % of the farmers came to the dealers’ outlet with a productdecision already decided based on preconceptions, the push was required as itled to greater confidence and satisfaction in the minds of the farmer. Customer Expenditure: With theseed expenditure/acre and the pesticide expenditure/acre being correlated toeach other, I also studied the seed expenditure vs. the pesticide expenditure.This could help in segmentation on basis of usage rate so as to target theappropriate farmers.
It was seen that the increased popularity of the highyielding hybrid seeds is affecting the pesticide industry, with a seedexpenditure/acre of Rs. 3000 and a pesticide expenditure/acre of Rs. 10000. Thecost of cultivation was calculated; the pesticide expenditure amounts to thesecond highest component of the total expenditure. Distribution network Analysis: i) Dealer: The mainreason for farmers’ adoption of agrochemicals amongst the farmers of Maharashtra,is protection of crops. The dealers provide information about the variousproduct offerings, their constituents and benefits; the usage; the accessories;and, the side effects and results of using such chemicals.
They also educate themon issues of safe usage and disposal. Apartfrom this, the major role played by the dealer was facilities of credit anddevelopment of long term relationships. The dealers provide credit facilities,often through mutually agreed upon terms and conditions whereby the farmers areallowed to pay in instalments or sometimes even after harvest. The long termrelationship that developed between the two, on basis of trust was an importantfactor affecting both product and store loyalty. ii Dealer Feedback: The study on the dealers revealed thatthere was a high degree of discontentmentamongst the dealers, issues being:ii Dealer Feedback: The study on the dealers revealed thatthere was a high degree of discontentmentamongst the dealers, issues being:ii)Dealer Feedbacki)Pricing: The pricing methodology of the company is vague, incomprehensible andnon-transparent.; the pricing for each month is announced as late as two weeksevery month and that made implementation difficult.
ii)Product packages and sizes: smallerpacks are always short in supply; this is true even for newer product offeringswhere trial is an important issue for farmers and farmers like to buy small packfor trial basis.iii)Company representative visits: The frequency of visits made by the companyofficials was found to be satisfactory at the dealer level but at the retailerlevel it is weak. It wasalso observed that the dealers prefer to stock, established brands in themarket, even if it gave them lower margins which they could offset by sales, asbrand image in the minds of the farmers is an important parameter. However whenthe product was not an established brand, then the dealers are more interested inhigher margins and returns. MAJOR FINDINGS:The most commonstrategies observed in the crop protection industry are: The various strategiesfor pesticide companies developed are : Strategy 1: Promotion of the foundation – and matching the economicvalue of agricultural pesticide product positioning. Do not waste crops inlow-income energy and time.
Practice has proved that: the low value-addedcrops, farmers less medication, and after treatment with low frequency may increasethe financial burden of farmers. High-value crops, high positioning; lowvalue-added crops, low position. Registration with the object and crops, tofind a bright spot for the product, refining a resounding slogan. Strategy 2: Promotion of the premise – to find the most suitable numberof the characteristics of their own business distributor. Concentrate onlooking for the right object, looking good sweetheart – dealers. Greatmarketing is not necessarily good, not necessarily small dealers cannot, do notclimb up is not low to the key is to the right eye got the idea.
Good productsneed the right dealer. In the subjective, good faith cooperation in the first,sales of confidence in the second, the credibility of the third; the objectiveto promote the ability of the fourth, the network channels fifth, sixth fund. Strategy 3: Promotion of the key- find a suitable operation of the enterprise product marketing model.
“Model” can be copied and can be reused in the standard marketingmethods, marketing staff can save “touch stones” to explore the time,to overcome the “money lessons, eventually turning back” the strangephenomenon. No model, of course, can be resourceful marketing elite, butordinary people like marketing their way in the dark as wild guesses. Marketingmodel is not very much, and no marketing manuals do not fine. Strategy 4: Promoting the fundamental – on enterprise products andcustomers “love” or even “crazy.” Eye of the beholder, themarketing people in the eye of gold. Love the product and give this love to thecustomer, ask some questions, we must love our customers. “Falling in lovewith the product first – love products, discover the charm of products” tohelp the product to speak, to make up for limitations of the product;”after falling in love with the dealer – love customers, and tap theresources of customers and sales potential” to help customers rapid growthand progress. If the products and customers as a “lover” to love,marketing representatives are not the perfect eyes, there is no place in theless excuse for marketing, more passion.
Strategy 5: Promote the internal – love themselves, their fullconfidence, and establish a new image of the concept of marketing staff. Whoself-love, love everyone, do first a representative of the amiable business.Marketers must establish such a concept: “I am the God of Wealth clients,I have come to help customers get rich characters, and I trusted the customersales consultants and technical staff, I was the wealth of missionaries’ plantprotection technology. I is plant protection technology for the prevention andtreatment programs rather than the product comes. ” Strategy 6: Promotion of direction – for the customer to design asuitable crop insect pest prevention and control of local marketing programs,sales ideas and marketing plans, sales guidance to customers ahead direction.To the front of the customer, but also walk in front of customers, determinednot to allow customers to fall behind in terms of ideology. Allow customers tounderstand: if you work hard, our products here in the earnings outlook is verygood.
To the customer to design a profitable operation of programs, channelsand customers to solve cash flow problems. First, a salesman with a sense ofdirection, and then only customers with a sense of direction. Clerk of themarket theory of operation, guiding customer marketing action.
Way forward isvery important to customers, then marketing should be a representative ofdealers sell pesticide products guide. Strategy 7: To promote thepractice – often went to the edge of the field to corner, and often return tothe fields to see, personally feel the effects of pesticides in the field. Doerof deeds – for small farmers to solve a pest problem, do not do short oftheorists – even the bugs do not know what kind of grow into, but also talk atlength about control methods. To the farm to go to the grass roots to go to therural retail stores to go to witness the growth of farmers and agriculturaldevelopment. The hands of grass-roots farmers a variety of primary materials,understanding of the product rose to an objective from the subjective, rosefrom the practice in theory, negative information from a variety of dealer’sinterference. No practice field, there is no right to speak on plant protectionissues. Strategy 8: Promotion of the external factors – attention and plantprotection station of agricultural technology exchanges and visits, product andcorporate culture, “reputation” communicator.
“Let other peopleto influence others”: plant protection technicians as missionaries; pestforecasting personnel as copiers; pest information as planter; plant protectionstaff is word of mouth marketing communicators and technology influencers;model report leaflets to like a manifesto. National Plant Protection Technologyto borrow the power of extension systems (technology, promote the advantages,the authority of superiority, information superiority), and agriculturalworkers union, plant protection experts, How to borrow soft paper handwriting,the use of plant protection experts in marketing their skills ChrysostomPrevention program. Strategy 9: To promote the objective – to customers and farmers,pesticide input-output ratio calculated, calculate the yield after the rate ofpesticide use and increasing production, conversion and increase the economicvalue of additional income. Products can not speak, but the yield figures willspeak, speak the test report, demonstration results will speak. Numbers areobjective, there is no bias. In the face of farmers and customers, use lessadjectives, the use of quantifiers. Strategy 10: Promoting the subjective – of rival manufacturers of peerinfluence and infiltration of the side, so that other manufacturers recommendand introduce their products and companies. As competitors to hone their ownframe of reference, allow competitors to catch up with themselves, when theyhad to bring in imitation – there is a wound, but the threshold, a benchmarkfor others in line, and not busy with someone else after.