Product life cycle: Understanding and strategy implementation in saturated market of MACHETI and growing market of FAST-MIX in Uttar

Pradesh
Submitted in partial fulfillment of the requirements for the Post Graduate Diploma in Management (PGDM)

Agri -Business and Plantation Management (ABPM)

SUBMITTED BY

Prathamesh Hanmant Ghorpade

(Roll No.10PGDM-42)

Under the Guidance of:

Mr. Krishana Kumar

(Regional Coordinator)SICPL Uttar Pradesh

Submitted to: Dr. John Mano Raj Assistant Professor (Marketing)

INDIAN INSTITUTE OF PLANTATION MANAGEMENT, BANGALORE (An Autonomous Organization Promoted by the Ministry of Commerce and Industry Govt. of India) Jnana Bharati Campus Post Malathalli Bangalore 560056 August 2011

DECLARATION

I hereby declare that the CTS report entitled Product life cycle:

Understanding and strategy implementation in saturated market of MACHETI and growing market of FAST-MIX in Uttar Pradesh
submitted for the partial fulfillment of the requirements of Post Graduate Diploma in Management (Agri-Business and Plantation Management) of Indian Institute of Plantation Management (IIPM), Bangalore is my original work and not submitted in partial or full for award of any other degree, diploma, fellowship or similar titles.

Date

(PRATHAMESH HANMANT GHORPADE) Enrollment No.10PGDM42

Place : Bangalore

Acknowledgement First and for most, I wish to thank Sinochem India company Pvt. Ltd. for giving me this opportunity to study and present the report on Product life cycle: Understanding and strategy implementation in saturated market of MACHETI and growing market of FAST-MIX in Uttar Pradesh. It has been my first exposure to practical work life and the experience which I have got here while working on this project in Sinochem will indeed be one of my most cherished ones. Professional accomplishments are always Team oriented and as we all know that Together everyone achieves more, so I take this opportunity to thank all those who have guided me in the successful completion of this project. I would like to thank my project guides Mr. Krishana Kumar (Regional Coordinator, Uttar Pradesh) for all the pains he has taken to guide me in my project work. I also take this opportunity to mention the names of Mr. Manoj Bhanadari (Reginal Business Manager, U.P. & Uttarakhand), who were always guided and help me out during my project work. I also take this opportunity to mention the names of Mr. Jitendar Gangawar (Market Development Officer) who were always present to help me out during my field data collection. I would like to express my gratitude and thanks to Dr. S.John Mano Raj (Assistant Professor) for his support and kind blessings. He has been an everlasting source of inspiration and guidance. I would also like to forward special thanks to K. Narenderan (lecturer) for his excellent cooperation and encouragement. This acknowledgement would be incomplete if I dont mention a special regard to my family members, friends, and all those who have motivated me to perform better than the best.

CONTENTS
CHAPTER TITLE
EXECUTIVE SUMMERY 1. 2. INTRODUCTION A BIRD EYE VIEW TO SINOCHEM CROP CARE INDIA LIMITED REVIEW OF LITERATURE DATA PRESENTATION AND ANALYSIS FINDINGS AND CONCLUSION

PAGE NO

3.

4. 5.

6.

APPENDICES

7.

REFERENCES

Executive Summery
Indias agricultural production has shown a growth of 2.7% p.a. in last 40 years, contributing today to a one fifth of its GDP. Food grain production in 2010-11 has increased to 232.07 million tonnes. Agrochemical industry played an important role in the overall agricultural growth and productivity in India. Weeds are responsible for almost 33% loss in final production. Globally, herbicides represent the largest group within agrochemicals. Chemical weed control is slowly becoming one of the more important and reliable measures in weed management systems in India. Machete (Butachlor 50%EC) was pioneer chemical herbicide in paddy introduced by Monsanto India and today also holds good position in the market. To plan effective marketing policy understanding of product life cycle stage is an important factor and hence this project entitled Product life cycle: Understanding and strategy implementation in saturated market of MACHETI and growing market of FAST-MIX in Uttar Pradesh was conducted. Understanding buying behaviour of the farmers w.r.t. different brands and products was important phase as it will give the market trends and positions of major competitors in the market. Some of the important findings were to understand market leaders like PR113 (Seeds), Machete (Pre emergence herbicide), Nomini Gold (Post Emergence herbicide), IFFCO (Fertilisers) and Bayer Crop Sciences (Insecticide and Fungicide) which were preferred by farmers. Important reasons for shifting their preferences from one brand to another were impure quality and unsatisfactory results with existing brands. Most of the paddy growing farmers were considering weeds as one of the major contributor to the loss in field. Almost 71% farmers were considering weeds as a major problem in paddy production. Application of chemicals and manual weeding were most preferred practices by farmers. Degree of chemical usage was increased as increase in land holding of the farmers. Machete was most popular brand in paddy herbicide and now its generic name for Butachlor 50% EC. Rifit was reported to be a tough competitor for Machete in pre emergence segment. Dealers and fellow farmers i.e. word of mouth were reported to be important sources of information about brands to farmers.

Sinochem Crop Care is very particular about fieldwork and gives maximum attention on highlighting product in minds of farmers. Different awareness programmes were judged for their effectiveness in field. Most of the Dera Farmers were aware about different programmes conducted by company. Awareness levels were decreased as decrease in land holding of the farmers. Farm meetings, field demonstrations and jeep campaigning were most effective methods. Degree of usefulness was recorded to be higher in farm meetings and field visits. Effort from the company to identify the original product Machete i.e. embossed seal on packaging was appreciated by the farmers by open heart. Machete is one of the oldest herbicide in paddy market and eventually it is attending the maturity phase in life cycle and hence it is very important to look for the proper alternative to the existing product. Fast Mix was creating good impressions among the farmers due to its ability to work in low water areas and uplands. It can be very good alternative for Machete and have good bright future as paddy herbicide.

LIST OF TABLES
Table No
1 2 3

Title
Fertiliser consumption Pattern in Uttar Pradesh Pesticide Consumption Pattern in Uttar Pradesh Understanding buying behaviour of the farmers w.r.t. different brands and products in rice seeds Understanding buying behaviour of the farmers w.r.t. different brands

Page No

4 5 6 7 8 9 10 11 12 13 14 15 16

and products in Herbicide Understanding buying behaviour of the farmers w.r.t. different brands and products in Fertilisers Understanding buying behaviour of the farmers w.r.t. different brands and products in Insecticide Understanding buying behaviour of the farmers w.r.t. different brands and products in Fungicide Understanding reasons for dissatisfaction in different agri-input sectors Major Issues Affecting Paddy Production in Beesalpur Intensity of Weeds as an Important Problem in Paddy Production Important Methods of Weed control in Paddy Usage Behaviour of Herbicide in Paddy Awareness about Different Programmes and Relative Participation Rating of Different Awareness Programmes by Farmers Sales of Machete Important Players & New Entries in Butachlor Business

LIST OF FIGURES
Figure No
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Title
Losses in production caused by different factors (%) Global Market Size of Pesticide Industry (US $) Global Geographical Share in Pesticide Consumption 2009 Global Market Share by Revenue 2008 (%) Market distribution by Product Category, 2009 (%) Market distribution by crops, 2008 (%) Per capita consumption: Fy09 (kg/ ha) Market distribution by product category (% of total) Crop wise pesticides consumption (% of total) State-wise pesticides consumption Fy09 (% of total value) Understanding buying behaviour of the farmers w.r.t. different brands and products in rice seeds Understanding buying behaviour of the farmers w.r.t. different brands and products in Herbicide Understanding buying behaviour of the farmers w.r.t. different brands and products in Fertilisers Understanding buying behaviour of the farmers w.r.t. different brands and products in Insecticide Understanding buying behaviour of the farmers w.r.t. different brands and products in Fungicide Understanding reasons for dissatisfaction in different agriinput sectors Major Issues Affecting Paddy Production in Beesalpur Intensity of Weeds as an Important Problem in Paddy Production Important Methods of Weed control in Paddy Usage Behaviour of Herbicide in Paddy Evaluation of all brand promotional activities undertaken by Sinochem India Product Life Cycle of Machete and Fast Mix

Between Pages

LIST OF PLATES
Between pages

Plate No
1 2 3 India POP Displays for Machete POP Displays for Fast Mix

Title
Brand Promotional Activities Undertaken by Sinochem

1. INTRODUCTION 1.1 Back ground of Study Indias agricultural production has shown a growth of 2.7% p.a. in last 40 years, contributing today to a one fifth of its GDP. From a mere 52 tonnes in 1951-52, the food grain production in 2010-11 has increased to 232.07 million tonnes. However, differences in soil fertility and corresponding agricultural growth as well as unreliable agricultural produce. This has been further worsened by farmer illiteracy, backwardness and poverty. Notwithstanding, an important role in the overall agricultural growth and productivity in India has been due to the agrochemical industry. The agrochemical market in India has been grown over the decades, with the farmers having been inclined towards adoption of agrochemicals to protect their crops (Sahney, S. and Shrivastava, A., 2008). Weeds are major obstacle for Indian agriculture, as elsewhere in the world. Weeds compete with crops for moisture and nutrients and counts for around 33% of all losses in a crop (Fig 1). Loss of yield due to weed infestation is variable and is more pronounced in crops grown under rain fed conditions. Some parasitic weeds draw water and nutrients from crop plants and can inflict severe damage. Further, weeds serve as alternate hosts to pathogens and also harbour pests. Control of weeds during early stages of crop growth, when the young seedlings of crop plants are unable to compete with hardy weeds, is crucial for capturing yield potential. For this reason, labour demand for weeding operation is high during early phase of crop cycle and manual weed control over large areas is not feasible from the point of labour supply and monetary costs. Some weeds that are wild relatives of crop plants are difficult to distinguish from crop plants at early stages and pose challenge for manual weeding. Under these situations, chemical weed control is relevant for realizing higher productivity and production. Globally, herbicides represent the largest group within agrochemicals. In India this is still not the case. Chemical weed control is slowly becoming one of the more important and reliable measures in weed management systems in India. In India, about 6000 tons of herbicides are currently used for weed control, mainly in irrigated crops (about 77% on wheat and rice) and on plantations (about 10%). However, herbicides form only 12% of the pesticides used on crops in India.

Fig. 1 Losses in production caused by different factors (%)

Weeds 15% 33% Insects Disease 26% Rodents and others

26%

1.2 Need of Study Butachlor, one of the famous names in the family of herbicides and it is a very familiar name among the farmers whenever there is infestation of weeds in their paddy field. Butachlor was firstly brought by Monsanto as a solution for the weeds in paddy fields under the trade name Machete. Machete has become a boom for the paddy growing farmers but in the recent few years many companies have come up with their products containing Butachlor salt and diluting the market. As Sinochem Crop Care (earlier Sinochem India Company Pvt. Ltd.) has taken over Monsanto company's Butachlor and Alachlor businesses in India, Philippines, Thailand, Vietnam, Pakistan and Taiwan (China) on March 1, 2008 and Up to September 1, Sinochem India has completely taken over Monsantos Butachlor and Alachlor businesses in India and started to try to introducing new types of agricultural chemicals from China to India. As now Machete is being marketed by Sinochem Crop Care and the company is new in India so to retain the existing customers of machete, to catch switchers and to increase the market share, brand promotion is needed. Beside this as Machete is in the market for last thirty five years it has reached to its maturity stage and now farmers are slowly switching to other new salts. So to retain the customers and to attract new customers the company have positioned themselves with their new innovative product Fast-Mix with same chemical constituent i.e. Butachlor, which requires less water to work effectively on the weeds. Actually it is a water based herbicide unlike Machete, oil based and which requires more water in the paddy field to work properly. Now Fast-Mix has got its own credibility among farmers and they are satisfied with this product and its results in their field. Since it has been introduced in the market before five years, so it is very important to know the status of this product in the market i.e. Product Life Cycle and stage in which it lies, because by knowing this we can be able to formulate new marketing strategy i.e. introduction of new promotional tools for increasing brand awareness and for brand building. Along with this by introducing all new tools we can educate farmers about the product, its identification and quality. Because many progressive farmers know about Fast-Mix but they cant identify it and they get cheated by the dealers and the distributors and they give them some spurious

brand on which they are getting good margins. These low quality products do not give desired results in the field and farmers have to face great degree of loss due to weeds. So for increasing brand awareness among farmers, for brand building and for determining particular stage of product life cycle it is very important to conduct some promotional activities and, to formulate these strategies we should know the stage (introduction, Growth ,Maturity and Decline), in which product Fast-Mix lies. 1.3 Objectives To study the Buying behaviour of farmers of Beesalpur Tahsil for Agri-inputs. To study usage pattern of herbicide by farmers. To evaluate of all the brand promotional activities. To determine particular stage in Product Life Cycle of the brand Machete and Fast-Mix. 1.4 Research Methodology 1.4.1 Type of research To fulfil the objectives of the study descriptive research was conducted. The basic emphasis of this study was on knowing farmers views for the brands Machete and FastMix, their opinion, perception, attitude and other motivational factors which drive farmers to purchase this product. This study is also emphasizing the effectiveness of brand promotional tools which will be helpful for determining the stages of product life cycle. Different sales promotional tool applied by the company in the market. It also described the awareness level of farmers and dealers opinions for the product and reason for which the farmers was opting for one brand of herbicide as compared to other brands. 1.4.2 Tools for data collection Questionnaire containing both open ended and closed ended questions was used as main tools for data collection from the farmers, distributor and dealers. Sources of Primary Data Primary data regarding the study were collected from the farmers by using questionnaire. Sources of Secondary Data

Secondary data regarding area under cultivation and cropping pattern was obtained from Department of Agriculture of State Government (KVK, agriculture development officer) and Companys previous years data. 1.4.3 Population Population for study selected was all paddy growers of Beesalpur District Peelibheet (U.P.).

1.4.4 Sample Design Sample Size: - 450 Farmers from 81 villages Sample Unit: - Farmers Sampling Technique: - Stratified random sampling (strata based on the land holding size)

1.4.5 Period The research work was carried for 58 days from 2nd May to 30th June.

1.4.6 Tools For analysis Questionnaire Industry analysis

1.4.7 Limitations Time constrains was one of the limitations in carrying out study. A large area for study has to cover. Heavy workload. Reluctance of farmers in answering questions. This project titled Product life cycle: Understanding and strategy implementation in saturated market of MACHETI and growing market of FAST-MIX in Uttar Pradesh was conducted in the Beesalpur tehsil under Bareilly territory of U.P. The study was conducted in the villages of Beesalpur. The list of villages in different districts where promotional activities like farmer meeting, group discussion, individual farmer contact,

1.5 Location

mandi contact, van campaign, tele-campaign, postering were carried out by me were as follow. Villages in Beesalpur

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61 64 67 70 73 76 79

Muralikheda Tandol Sundarpur Bilandpur Saradarpur Badara Udaipur Mandanpur Bansalia Haripur Mohapur Marrori Badepura Lilhar Churaha Phirsa Mudgoan Charkhuta Khajuria Nauwa Azampur Luhich Nath Methia Chaham Sikandarapur Ughanapur Vihar Maniya Bhatpura Meerpur Dhakariya

2 5 8 11 14 17 20 23 26 29 32 35 38 41 44 47 50 53 56 59 62 65 68 71 74 77 80

Gularia Pokharapur Pipariya Indalpur Saidapur Dimalpur Khumaria Rampur Mahaliaya Chapori Ghanshampur Meerpur Hempura Navadiya Dhakariya Dhangoan Gahunia Kanparia Ghonguchaiya Akbarabad Baribara Dhaka Ghansham Bhawarkheda Dharmanalpur Lidhpura Banda Manpur Saidapur Tajpur

3 6 9 12 15 18 21 24 27 30 33 36 39 42 45 48 51 54 57 60 63 66 69 72 75 78 81

Mudha Shirkhana Sundarpur Daluria Duriyatwala Bansalia Bhopatpur Himmatpur Kannapur Karailli Pagar Bamrolli Rampur Amrut Rampur Amra Teda Shriram Firshaha Harunagar Karnayaa Kamalpur Aktiyarpur Padari Kishanpur Pawan Nagara Charkhidevipur Aamkheda Jalalpur Jaipalpur Hartheli Neerath

AREA OF WORK

2. A BIRD EYE VIEW TO SINOCHEM CROP CARE INDIA LIMITED 2.1 Company profile On Sep 3, Sinochem India Co. was established in New Delhi, marking a huge step forward achieved by Sinochem's overseas agricultural chemical project and laying a sound basis for the company to fully carry out its agricultural chemical strategy outside China. Agricultural chemical is a core business sector of Sinochem International. After taking over Monsanto Company's Butachlor and Alachlor businesses in India, Philippines, Thailand, Vietnam, Pakistan and Taiwan (China) on March 1, 2008, the preparation for the construction of Sinochem India Co. was officially initiated. Up to September 1, Sinochem India has completely taken over Monsantos Butachlor and Alachlor businesses in India and started to try to introducing new types of agricultural chemicals from China to India. China at the end of 2003 and in three years has successfully increased the product on ground of Machete, Harness and Machete Plus by 13%, 40% and 300% respectively, and total sales of the four products by 20%." In 2006, the total sales revenue of the major operations of Sinochem International reached RMB 15.4 billion and its total assets over RMB 7.9 billion. It is the company with customers from more than 100 countries and regions worldwide. Sinochem International, Sinochem Corporation (Sinochem) (formerly known as China National Chemicals Import & Export Co) was founded in 1950. It is the earliest Chinese company to rank among Fortune 500 and has remained on the list for 16 times consecutively. Companys outstanding performance of 30% net profit compound growth rate and been recognized as one of China's Top 100 listed companies by Fortune for 7 consecutive years. It ranks first among the "100 Best Managed Chinese Listed Companies" by the Institute of World Economy & Politics, the Chinese Academy of Social Sciences, and also tops "China's Best Board of Directors" by Directors & Boards magazine and Chinadirectors.com. The company's stock has been selected as constituent stock for both the Shanghai Stock Exchange 180 index and Shenzhen 300 index. SINOCHEM yielded a total of US14.993 billion which was an increase of 13.1% over that of the previous year. Its export volume totaled US3.456 billion, with US 2.341 billion worth of crude oil and petroleum products; chemicals, US741 million. Its total import volume was US3.668 billion. Its importing and exporting also developed fast, reaching US7.857 billion,

which was an increase of 36.4% over that of the previous year. SINOCHEM set up regional groups in America, Hong Kong, Oceania, as well as 6 business centres dealing in the business of petroleum and chemical fertilizers abroad. Sinochem has established 85 organizations and agencies in more than 20 countries and regions all over the world. As a result, and international operating network has-begun to take form. On April 12, 2007, Sinochem merged with Shenyang Research Institute of Chemical Industry (hereinafter referred to as Shenyang Institute) upon the approval of the State Council, and Shenyang Institute became an affiliate fully owned by Sinochem. On June 13, Sinochem merged with China National Seed Group Corporation (hereinafter referred to as China Seed Corporation) upon the approval of the State Council, and China Seed Corporation became an enterprise fully owned by Sinochem. This year the company has changed its name and repositions it as Sinochem Crop Care. 2.2 Competitors Sinochem Crop Care Company has both national & multinational competitors like Monsanto, Syngenta, DuPont, Bayer, Dhanuka, Nagarjuna, Tata Rallis, UPL, and Pesticides India. These all companies are the major competitors for the company. These companies have large customer base because they entered in the market very early, and they have a good market share. This year (2011) some other companies have entered (eg. Punjab Pesticides) in the market and they may be the good competitor in coming years. The major companies whose Herbicides are available in the market and which are having close competition with Machete and Fast-Mix are as follows. Syngenta Bayer Nagarjuna Pesticides India Doupont Excel Excel Dhanuka UPL

3. REVIEW OF LITERATURE

The socio-economic scenario in the agricultural sector in many of the developing countries warrants the substitution of labour with machines and chemicals, at a faster pace (Huang and Rozelle 1996). The emerging agricultural scenario in favour of agribusiness is likely to increase the use of pesticides further and the resultant environmental and human health problems thereof. Research findings already reported by various workers in the related fields are reviewed under the following headings. 3.1 Agrochemical Industry in Globally The global crop protection industry has registered a growth of 6% p.a. from 2005 to reach USD 43.2 Bn in 2009. This market is expected to grow further owing to the increasing food and fuel needs and is expected to grow at 4% p.a. to reach ~USD 54 Bn in 2015 (Fig. 2). The crop protection chemicals market is mainly concentrated in the major developed countries such as United States and Western European nations. Europe has the largest share in the agrochemical market followed by Asia, Latin America and North America. There is an increased usage of products in Europe due to high commodity prices and in order to boost yield and quality. Increased demand for palm oil has led to increasing usage of herbicides in Japan, Malaysia and Indonesia. Strong rice prices and other food grains are driving the agrochemical consumption in India. In Latin America, increased production of soybean and sugarcane for animal feed as well as for bio-fuels is the driving the growth of agrochemical consumption (Fig. 3). It is believed that the crop protection chemicals market has reached its saturation in developed regions such as North America and Western Europe whereas regions such as Asia Pacific, Middle East and Latin America will offer high growth opportunities in the future. The global crop protection market is fairly consolidated with top nine companies accounting for over 80% of the market. Syngenta, Bayer and BASF are the market leaders in the global crop protection market (Fig. 4). Global crop protection market is characterized by large number of mergers and acquisitions in the recent years. Several large companies have consolidated their presence in the existing geographies or

Fig. 2 Global Market Size of Pesticide Industry (US $)

50 45 40 35 30 25 20 15 10 5 0 43.2 33.2 25.8

6%

2001

2005

2009

Fig.3 Global Geographical Share in Pesticide Consumption 2009

4% 29%

23%

Europe Asia Latin America North America ROW

19% 25%

(Govt. Taskforce on chemicals)

Fig. 4 Global Market Share by Revunue 2008 (%)

13% 3% 5% 6% 17% 6% 9% 11% 11% Syngenta AG 19% Bayer BASF SE Monsanto Daw Nufarm Ltd. Dupont Makhteshim Agan Group Sumitomo Chemicals Others

ventured into newer areas through acquisitions of local companies. Some of the recent acquisitions include Arysta LifeScience's acquisition of Volcano Agroscience Limited in 2005, Nufarm's acquisition of Agripec (Brazil) in 2007. In 2010, Cheminova acquired insecticide business from Isagro (Italy) to strengthen its presence in emerging markets of India and Italy. Herbicides are the most widely used agrochemical products globally, followed by insecticides and fungicides. Fungicides is the highest growing segments as it helps increasing yield, improving quality and in seed treatment. Individual sales of various categories however depend on climatic conditions and crop variance. Herbicides are used in most of the regions of the world. However, major markets for herbicides are North America and Europe due to the favourable climatic conditions in these regions. Insecticides are more prevalent in Asian countries. This is due to higher growth of cotton, cereal, fruits and vegetables in these regions which have higher incidence of insect attacks. Increased usage of genetically modified crops in North America has reduced the usage of insecticides. Fungicides are used in almost all agriculture markets of the world due to favourable climatic conditions for the fungal growth (Fig. 5). Globally, fruits and vegetables and cereals account for the largest share of the crop protection industry (Fig.6). 3.2 Agrochemical Industry in India The use of pesticides in India has increased steadily from 1950- 51 onwards, and currently, covers about 30% of the cropped area. The cropped area under the chemical pest control has increased from 2.4, million hectares (1950) to 137 million hectares. Total consumption was the highest during the 1980s, may be due to post-green revolution spiralling effects (Devi, 2010). The crop protection industry in India is generic in nature with ~80% of the molecules being non-patented. Hence, strong distribution network and brand image act as competitive factors. Crop protection chemicals are manufactured as technical grades and converted into formulations for agricultural use. The crop protection industry consists of technical grade manufacturers, formulators producing the end products, distributors and end use customers. According to Pesticide Monitoring Unit, GOI, there were about 125 technical grade manufacturers, including about 10 multinationals, more than 800

Fig. 5 Market distribution by Product Category, 2009 (%)

3%

26% Herbicide 45% Fungicide Insecticide Other

26%

Fig. 6 Market distribution by crops, 2008 (%)

18% 26% 6% 9% 10% 13% 18%

Fruit & Vegetable Cereals Maize Soyabean Rice Cotton Other

formulators and over 145,000 distributors in India in 2007. Over 60 technical grade pesticides are being manufactured indigenously. Technical grade manufacturers sell high purity chemicals in bulk (generally in drums of 200-250 kgs.) to formulators. Formulators, in turn, prepare formulations by adding inert carriers, solvents, surface active agents, deodorants etc. These formulations are packed for retail sale and bought by the farmers. India due to its inherent strength of low-cost manufacturing and qualified lowcost manpower is a net exporter of pesticides to countries such as USA and some European and African countries. Exports formed ~47% of total industry turnover in Fy10. The industry suffers from high inventory (owing to seasonal and irregular demand on account of monsoons) and long credit periods to farmers, thus making operations 'working capital' intensive. Consumption of crop protection products in India is among the lowest in the world. Per capita consumption of crop protection products in India is 0.6 kg/ ha compared to 13 kg/ ha in China and 7 kg/ ha in USA. Some of the reasons for low consumption in India are low purchasing power of farmers, lack of awareness among farmers, limited reach and lower accessibility of products. This presents an immense opportunity for the crop protection industry to grow in India (Fig. 7). Insecticides form the largest segment of the domestic crop protection chemicals market accounting for 55% of the total market. It is mostly dependent on rice and cotton crops. Herbicides are the largest growing segment and currently account for 20% of the total crop protection chemicals market. Sales are seasonal, owing to the fact that weeds flourish in damp, warm weather and die in cold spells. Rice and wheat crops consume the major share of herbicides. Increasing cost of farm labour will drive sales of herbicides going forward. Fungicides, accounting for 20% of the total crop protection market, are used for fruits and vegetables and rice Farmers moving from cash crops to fruits and vegetables and government support for exports are increasing the fungicides usage. Biopestiocides include all biological materials organisms, which can be used to control pests. Currently a small segment, bio-pesticides market is expected to grow in the future owing to government support and increasing awareness about use of non-toxic, environment friendly pesticides. With increasing penetration of BT cotton, usage of

Fig. 7 Per capita consumption: Fy09 (kg/ ha)

18 16 14 12 10 8 6 4 2 0 Taiwan China Japan USA Korea France UK India 0.6 7 7 5 5 13 12 Scope for growth 17

Fig. 8 Market distribution by product category (% of total)

80 70 60 50 40 30 20 10 1 0 Insecticide Herbicide Fungicide Biopesticide & others 17 20 13 5 20 2004 2009 69 55

insecticides has witnessed a decline in the recent past. Its share in the total crop protection chemicals has reduced from 69% in 2004 to 55% in 2009 (Fig. 8). On the other hand, share of herbicides and fungicides has increased from 17% and 13% respectively in 2004 to 20% each in 2009. This is due to increased focus on fruits and vegetables and higher awareness levels among end users. Paddy and cotton are the major consumers of crop protection chemicals accounting for 28% and 20% respectively of the total domestic crop protection chemicals market. Fruits and vegetables also account for a significant share of the crop protection chemicals market (Fig. 9). In recent years, consumption of insecticides has decreased due to the introduction of BT cotton, which has lower risk of pest attacks. As a result, pesticides usage on cotton as % of total has decreased from 33% in 2005 to 20% in 2009. On the contrary, pesticides usage in paddy has been increasing mostly due to increased popularity of hybrid varieties of rice, which require higher amount of pesticides. Share of paddy in the total crop protection chemicals has increased from 24% in 2005 to 28% in 2009. Consumption of pesticides by fruits and vegetables has been relatively stable in the recent years (Fig. 9). The top three states Andhra Pradesh, Maharashtra and Punjab account for ~50% of the total pesticide consumption in India. Andhra Pradesh is the largest consumer of pesticides with a share of 24% (Fig. 10). The Indian crop protection chemicals market is highly fragmented in nature with over 800 formulators. The competition is fierce with large number of organized sector players and significant share of spurious pesticides. The market has been witnessing mergers and acquisitions with large players buying out small manufacturers. Key market participants include United Phosphorus Ltd, Bayer Cropscience Ltd, Rallis India Ltd, Gharda Chemicals Ltd, Syngenta India Ltd, BASF India Ltd, etc. Top ten companies control almost 80% of the market share. The market share of large players depends primarily on product portfolio and introduction of new molecules. Strategic alliances with competitors are common to reduce risks and serve a wider customer base. 3.3 Agriculture in Uttar Pradesh at Glance Uttar Pradesh is the most populous and fifth largest state in the Union of India. Uttar Pradesh covers a large part of the densely populated Gangetic plain. The western

Fig. 9 Crop wise pesticides consumption (% of total)

35 30 25 20 15 10 5 0 Cotton Paddy Fruits & Vegetables Wheat Pulses & Oilseeds Others 8 6 8 10 6 10 24 20 21 20 2005 2009 33 28

Fig. 10 State-wise pesticides consumption Fy09 (% of total value)

AP Maharashtra 23 24 Panjab Karnataka Gujarat 5 5 5 8 7 7 11 13 MP & Chattisgarh Tamilnadu Haryana West Bengal Others

region of the state is more advanced in terms of agriculture. Majority of the population depends upon farming as its main occupation. Wheat, rice, sugar cane, pulses, oil seeds and potatoes are its main products. Sugar cane is an important cash crop almost throughout the state and sugar mills and other cane crushers who produce gur and Khandsari are common throughout the state. Uttar Pradesh is an important state in so far as horticulture is concerned. Apples and mangoes are produced in the state. Uttar Pradesh is leading producer of food grains (418.65 MT) which contributes 19% food grain production of country. State is leading producer of wheat (260.27 MT) which represents 33% production while third largest producer of rice (108.76 MT) in the country (12% share). Fertiliser consumption of state is 80.77 MT while consumption per hector was 158 Kg while NPK ratio was 11:4:1. Emphasis was given on the use of NPK complex (Table 1). Pesticide consumption of sate was 6888 MT during 2008-09 where 39.72% was contributed by insecticides, 18.03% share by fungicides, 24.74% share by herbicides and 15.62% bio-pesticides (Table 2). 3.4 Product Life Cycle Analysis in Agrochemical Product Product life cycle management (or PLCM) is the succession of strategies used by business management as a product goes through its life cycle. The condition in which a product is sold (advertising, saturation) changes over time and must be managed as it moves through its succession of stages. The understanding of a products life cycle, can help a company to understand and realize when it is time to introduce and withdraw a product from a market, its position in the market compared to competitors, and the products success or failure (Komninos, 2002). In his famous study forward A review of agricultural pesticide pricing and availability in Canada Michael Rothschild (1990) put theory of costs could be described as a product life cycle model. Early production of a good takes place in a high cost environment. As the cumulative volume of production increases, learning and process innovation takes place and costs decline. Phillips McDougall (2005) reported relative allocation of industry R&D cost split between these various product life cycle stages. Allocations of funds were reported to be higher during initial phase of product life cycle.

Table 1. Fertiliser consumption Pattern in Uttar Pradesh

Fertilizer Distribution Sl. No. Fertilizer 2006-07 1 2 3 4 Total Consumption (Kg/ha.) NPK Ratio Urea DAP NPK MOP 51.68 13.21 6.93 1.23 73.05 153 17:5:1 2007-08 52.24 14.77 8.88 2.36 78.25 155 11:4:1 2008-09 54.86 16.40 7.03 2.48 80.77 158 11:4:1

Table 2. Pesticide Consumption Pattern in Uttar Pradesh Achievements( MT) S No Group of Pesticide 2006-07 1 2 3 Insecticide Fungicide Herbicide Rodenticids / Fumigants Bio- pesticide Total 3025 1387 1804 2007-08 3043 1307 1782 2008-09 2736 1242 1704

205

138

130

1048 7469

1055 7325

1076 6888

4. DATA PRESENTATION AND ANALYSIS The results of the study on Product life cycle: Understanding and strategy implementation in saturated market of MACHETE and the growing market of FASTMIX in Uttar Pradesh are presented under the following major headings in this chapter. 4.1 To understand the buying behaviour of the farmers w.r.t. different brands and products Sinochem international is one of the leading Agri-input companies in the world. As per the long term strategy of an organisation they are looking at India as a long term strategy partner for all the agri-input categories like seeds, fertilizers, agrochemicals and other operations in India. Hence understanding the buying behaviour of the farmers is an important part of this strategy. Questionnaire was prepared w.r.t. rice crop which is the important staple food in the region and the results are presented below. 4.1.1.1 Seeds Major seed company varieties were selected based on their sales and farmers responses. Varieties like PR 113 from different local companies and governmental institutions; Prima, 6111, 6420, 6129 and 6444 (Ariz Series) from Bayer crop sciences; Silky series from Advanta (UPL group) and others were grouped for the questionnaire. PR 113 was found to be the successful variety widely accepted by the farmers. Overall 43% farmers preferred this variety over other varieties. PR 113 was widely adopted by the Dera farmers (51 %) due to its high demand by the rice mills and higher production capacity (Table 3). Arize series was preferred by almost 28 % farmers in the region where Arize 6444 was leading the front with more than 10 % share in the demand of the hybrid rice by Bayer Crop Sciences. Silky series from Krishidhan Seeds was demanded by the marginal farmers (27%) with early crop and higher market price. Awareness about Silky was increasing in region due to its performance and good returns. Advanta seeds another important player in this industry was showing their presence with PAC 835 which was quite popular with among the Dera farmers. But it was lacking in other areas due to improper distribution network and lack of awareness. Other varieties were not in such demand by the farmers due to the production capacity

Table 3. Understanding buying behaviour of the farmers w.r.t. different brands and products in rice seeds

Varieties PR 113 PR 113 Prima 6111 Bayer 6420 6129 6444 Krishidhan Advanta Other Silky Pac 835 Others

Dera Farmer 51 5 2 3 3 8 19 9 0

Large Farmer 42 6 1 3 6 15 25 0 1

Marginal Farmer 35 3 11 7 5 7 27 4 1

Overall 43 4 5 4 5 10 24 4 1

Table 4. Understanding buying behaviour of the farmers w.r.t. different brands and products in Herbicide

Brands Macheri Fast mix Top star Pre Emergence Refit Trap Thunder other Post Emergence Non user Nomini Gold Tata Tarak

Dera Farmer 41 21 12 14 7 2 2 0 85 15

Large Farmer 48 18 6 5 13 7 3 4 71 25

Marginal Farmer 35 12 5 5 15 8 21 33 45 23

Overall 41 17 8 8 12 6 9 12 67 21

Fig. 11 Understanding buying behaviour of the farmers w.r.t. different brands and products in rice seeds

Seeds
60 50 40 30 20 10 0 PR 113 PR 113 Dera Farmer Prima 6111 6420 Bayer Large Farmer 6129 6444 Silky Pac 835 Others Other Krishidhan Advanta Marginal Farmer

Fig. 12.1 Understanding buying behaviour of the farmers w.r.t. different brands and products in Herbicide

Pre Emergence
60 50 40 30 20 10 0 Macheri Fast mix Top star Regent Pre Emergence Dera Farmer Large Farmer Marginal Farmer Trap Thunder other

Fig. 12.2 Understanding buying behaviour of the farmers w.r.t. different brands and products in Herbicide

Post Emergence
90 80 70 60 50 40 30 20 10 0 Dera Farmer Post emergence Nomini Gold Large Farmer Post emergence Tata Tarak Marginal Farmer Non user

and performance of the major players, even though players like Chambal seeds (Uttamveer) and other local players like Pantnagar seeds and others were showing their demand. 4.1.1.2 Herbicides Herbicide is one of the important inputs in paddy as it affects yield up to 33%. Machete was found to be the market leader in pre emergence herbicide segment with leading market share up to 41% overall (Table 4), where it was more popular among the Dera farmers and large farmers. Fast mix (Sinochem India Pvt. Ltd.) is one of the fastest growing brands in the market due to its ability to work in less water and its good impact on modern weeds. Refit (Syngenta Ltd.) and Trap (Isagro Ltd.) had a shared presence in the pre emergence herbicide segment. Lack of awareness and credit issues were the major reasons affecting the major pre emergence herbicide brands associated with marginal farmers. The post emergence segment was dominated by Nomini gold (Pesticide India Ltd.) with more than 67% market share. Tata Tarak had a significant mark in the market with 21% market share in post emergence herbicide market. Share of nonuser was higher in marginal farmers due to their low land holding and higher cost associated with it. 4.1.1.3 Fertilisers Green revolution during sixties and seventies created awareness among the farmers for utilisation of fertiliser in field. Initially user behaviour was limited to the urea and DAP but with changing time usage behaviour was changed radically and now farmers are aware about customised fertilisers and micronutrients. Hence it was an important agri-input segment to have huge impact on production and productivity. Some of the important results of buying behaviour w.r.t. different brands are given below. IFFCO was leading organisation when it comes to fertiliser sector. It was leading almost all the categories as it was leading brand with overall 52% market share in urea, 49% share in phosphorus, 53% share in potash and 48% share in DAP. The market share was highest due to the wide distribution network collaborating with village societies and credit facility for the farmers. Share of marginal farmers was highest due to credit facility given by societies (Table 5).

Table 5. Understanding buying behaviour of the farmers w.r.t. different brands and products in Fertilisers
Company IFFCO Tata Chemicals (Paras) Chambal Fertilisers (Uttamveer) NCF RCF Zuari Others IFFCO Tata Chemicals (Paras) Chambal Fertilisers (Uttamveer) NCF RCF Zuari Others IFFCO Tata Chemicals (Paras) Potash Chambal Fertilisers (Uttamveer) NCF RCF Zuari Others Dayal (Talwar) Others IFFCO Tata Chemicals (Paras) Chambal Fertilisers (Uttamveer) NCF RCF Zuari Others IFFCO Tata Chemicals (Paras) Chambal Fertilisers (Uttamveer) Tata Chemicals (Paras) Others Dera Farmer 46 15 31 5 1 1 0 41 11 27 9 3 5 4 47 13 26 4 5 3 2 71 29 36 15 25 10 6 3 5 15 64 21 69 31 Large Farmer 50 13 24 7 3 2 1 51 13 26 6 2 1 0 53 12 21 9 1 2 2 65 35 48 14 25 6 4 2 1 21 69 9 76 24 Marginal Farmer 59 8 19 5 5 3 1 54 9 21 3 5 5 3 59 10 18 7 2 3 1 55 45 61 11 21 3 3 1 0 49 37 15 52 48

Urea

Phosphorus

Zink

DAP

Customised Fertilisers Micronutrients

Fig. 13 Understanding buying behaviour of the farmers w.r.t. different brands and products in Fertilisers

Urea
80 60 40 20 0 60 40 20 0

Phosphorus

Dera Farmer Dera Farmer Large Farmer Marginal Farmer Marginal Farmer

Large Farmer

Potash
80 60 40 20 0 300 200 100 0 71 65

Zink
55 29 35 45

Dayal (Talwar) Dera Farmer Dera Farmer Large Farmer Marginal Farmer Marginal Farmer

Others Large Farmer

DAP
100 50 0

Custamized Fertilisers
Chambal Fertilisers Tata Chemicals IFFCO 0 20 40 60 80

Dera Farmer Marginal Farmer

Large Farmer

Marginal Farmer Dera Farmer

Large Farmer

Micro nutrient
150 100 50 0 Dera Farmer Large Farmer Marginal Farmer 31 69 24 76

48 52

Others Tata Chemicals

Chambal fertilisers and Tata chemicals were preferred brands followed by IFFCO respectively. Chambal fertilisers were dominant in traditional products like urea, phosphorus, potash and DAP which is well known by its brand name Uttamveer. Tata chemicals which introduced its fertiliser segment under brand name Paras Formula which was leading new trends of fertiliser industry i.e. customised fertilisers and micronutrient market (Table 5). Zink is an important micronutrient for paddy cultivation in the region due to deficiency in soil. Dayal Industries was market leader in this segment with its products Talwar which contributes about 71% of total supply of zink in the area. Other brands like Uttam (Chambal Fertiliser), Soniya (Crystal Pvt. Ltd.) were sharing remaining market. Talwar was enjoying the market leadership due to its quality standards, awareness programmes and strong distribution due to its innovative distribution channel like Dayalbandhu Kendra. 4.1.1.4 Plant Protection Material Plant protection products are an important segment in agri-input sector. It includes both insecticides and fungicide products. Paddy is largest consumer of plant protection material and hence huge potential to different companies with great attraction to this segment. Study was conducted to understand insecticide and pesticide usage pattern, results are presented below. 4.1.1.4.1 Insecticide Important players in insecticide sector were identified based on pilot study. Most preferred brand in the market was Bayer Crop Sciences. 21% Dera farmers preferred this brand over other companies. Some of the important brands in Bayer basket were Regent, Bayruril (Quinalphos 25% EC), Gole (Acephate 75% SP), Rogar (Dimethoate 30% EC), Metacid 50 (Methyl parathion 50% EC), Confidor 200 S.L (Imidachloprid 17.8% SL), Bilfen (Fenvelerate 20% EC & 0.4 % dust). These were most preferred by large farmers (19%) as well as marginal farmers (13%). Tata Rallis was second most popular brand in insecticide market. Preference for Tata Rallis was varied from 18% (Dera farmers) to 12% in marginal farmers. Some of important brands were Furadan 36 (Carbofuran 3%GR, 50% SP),

Table 6. Understanding buying behaviour of the farmers w.r.t. different brands and products in Insecticide
Bayer Tata Rallis Syngenta Nagarjuna UPL Excel Crop Care Sinochem Sumitomo Chormandal Chemchura DSCL Dhanuka BASF Daw Agro PI Uttam other Dera farmer 21 18 17 8 7 4 3 5 2 3 2 5 1 2 1 1 2 Large Farmer 19 15 14 9 11 7 2 3 2 3 3 4 1 1 3 2 1 Marginal Farmer 13 12 11 10 11 8 1 4 3 5 3 5 2 1 4 2 5

Table 6. Understanding buying behaviour of the farmers w.r.t. different brands and products in Insecticide
Bayer Tata Rallis Syngenta Nagarjuna UPL Excel crop care Sinochem Sumitomo Chormandal Chemchura DSCL Dhanuka BASF Daw Agro PI Uttam other Dera farmer 17 14 13 11 8 3 4 3 2 3 5 6 1 4 1 1 4 Large Farmer 15 13 12 9 11 4 3 4 3 5 6 7 2 1 1 1 3 Marginal Farmer 12 11 9 10 9 6 5 3 3 5 6 9 2 2 1 3 5

Fig. 14 Understanding buying behaviour of the farmers w.r.t. different brands and products in Insecticide
25 20 15 10 5 0 Dera farmer Large Farmer Marginal Farmer

Fig. 15 Understanding buying behaviour of the farmers w.r.t. different brands and products in Fungicide
50 45 40 35 30 25 20 15 10 5 0

Marginal Farmer Large Farmer Dera farmer

Balwan (Monocrotophos 36% SL), Marshal (Carbosulfan 25% SD), Tafgor (Dimethoate 30% EC), Contaf, Contaf plus, Asataf (Buprobenzine). Insecticide market was one of the most competitive markets and even multinational companies were facing problems to increase their market share and same was reflected in the results. Syngenta was holing fare market share 17% among Dera farmers, 14% among large farmers and 11% among small farmers. Among other farmers other brands like UPL, Excel crop care; Nagarjuna etc. were popular (Table 6). Usage of marginal brands was high among marginal farmers (8%) due to higher cost of branded insecticide and pressure from dealers due to credit. 4.1.1.4.2 Fungicide Trends in fungicide market were almost similar to that of insecticide market. There was change in market share where small brands were one of the major challengers to big brands in the market. Bayer was most dominant player in fungicide market as well due to its big product range and wide distribution system (Table 7). Market was dominated by Tata Rallis, Syngenta, Nagarjuna, Dhanuka and DSCL respectively. Dominance of major brands was challenged due to low price of domestic and lower brands and higher margins to dealers. 4.1.2 Understanding reasons for dissatisfaction in different agri-input sectors Farmers were very aware about the new developments in market. They were adopting the best products in the category which they find reliable to improve their production. Important reasons were identified and survey was conducted. Some of the important reasons from the farmers point of view for brand shifting are given below. The poor quality and unsatisfactory results of a particular seed variety is one important reason for the shift as seen among the Dera farmers (Table 8). They are quite willing to shell out more from their pockets so long as quality is assured and are quite familiar with the fake brands in the market. A significant change in the farmer category pattern is seen as more and more farmers are bothered about quality and yield. Marginal farmers on the contrary were looking for value for money and were bothered about the high prices.

Table 8. Understanding reasons for dissatisfaction in different agri-input sectors

Dera Farmers Unavailability of material in market Impure quality Impure quality Unsatisfactory results Higher price

Large Farmers Unavailability of material in market Impure quality Unsatisfactory results Higher price

Marginal Farmers Unavailability of material in market 4.67 19.33 26.67 8.00 11.33 Unsatisfactory results Higher price

Fake brands

Fake brands

Seeds Herbicide Fertilisers Insecticide Fungicide

41.33 28.67 14.67 7.33 8.00

8.67 1.33 48.67 10.00 11.33

37.33 40.67 8.00 54.00 52.67

10.67 1.33 27.33 8.67 10.67

2.00 28.00 1.33 20.00 17.33

34.67 20.67 12.00 10.67 6.67

18.00 6.67 52.67 5.33 4.67

28.67 34.00 4.00 49.33 46.00

8.00 12.67 27.33 12.67 16.00

10.67 26.00 4.00 22.00 26.67

18.00 8.00 11.33 4.67 5.33

44.67 41.33 54.00 45.33 47.33

18.00 7.33 2.00 8.67 7.33

14.67 24.00 6.00 33.33 28.67

Fake brands

Fig. 16 Understanding reasons for dissatisfaction in different agri-input sectors

50.00 45.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 Dera Farmer

Seeds
45.00 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 Large Farmer Marginal Farmers

Herbicide

Dera Farmer

Large Farmer

Marginal Farmers

Fertilisers
60.00 Marginal Farmers 50.00 40.00 Large Farmer 30.00 20.00 Dera Farmer 10.00 0.00 0.00 10.0020.0030.0040.0050.0060.00

Insecticide

Dera Farmer

Large Farmer

Marginal Farmers

Fungicide
60.00 50.00 40.00 30.00 20.00 10.00 0.00 Dera Farmer Large Farmer Marginal Farmers

In the herbicide segment, shifting pattern w.r.t. Dera farmers was due to unsatisfactory results (40.67%), poor quality (28.67%) and fake brands (28%) respectively. Unsatisfactory results (34%) and fake brands (26%) were the important reasons for shifting in case of large farmers. Higher price (41.33%) and fake brands (24%) were the main reasons for the shifting in marginal farmers. Most of the farmers were happy with the supply of material in the market as it was not a major reason for shifting usage behaviour (Table 8). Major reasons for the shifting in fertiliser category were unviability of material and higher prices (Table 8). Extent of shifting varied from different group of farmers. Fake brands and unsatisfactory results were not the major reasons for shifting the purchase designs. Strong distribution network of some of major fertiliser companies (IFFCO, NCF, RCF, Chambal Fertilisers, DSCL, Tata Chemicals) were the important reasons. The plant protection segment, which included insecticide and fungicide, a major shift in purchase pattern was observed due to the unsatisfactory results and fake brands (Table 8). Shift due to fake brands (33.33%) was higher among marginal farmers where purchase designs were influenced by the retailer. Dera farmers and large farmers were more bothered about results of the chemicals in the field and hence shift in the brand depends entirely upon the field results during the previous year. Growth regulators are emerging as a new potential area in agrochemicals for increasing production. The awareness among the farmers was least about this product.

4.2 Understanding Herbicide Usage Pattern To understand herbicide usage pattern in Bareilly region it was important to understand urgency of the situation and followed by the usage behaviour. 4.2.1 Major Issues Affecting Paddy Production Few important problems in the paddy cultivation were thrown to farmers to understand important issues in paddy cultivation. According to farmers major problems were identified i.e. weeds, pest, diseases, water and labour problem. Responses were recorded from the farmers and results were presented below.

Weed was found to be the major problem in paddy cultivation. About 30% farmers irrespective of their land holding were recognising weeds as one of the major problem which affect the yield of paddy. Dera farmers (35%) were more worried about the weed due to large farm holding and higher cost of intercultural operations. In case of large farmers (28%) and marginal farmers (25%) they were considering weeds as an important problem but extend of the problem was small. According to 25% farmers irrespective of their land holding water was second important problem in paddy cultivation. Large farmers and marginal farmers were more concern about the water supply and its availability. According to marginal farmers scarcity of water was creating the huge production losses in paddy. Pest (19%), diseases (13%) and labour issues (13%) were ranked respectively as important problems in paddy cultivation. Extend of pest attack was considered as a major problem by large farmers (21%) while 18% marginal farmers were bother about it. According to the marginal farmers labour (17%) was one of the rising challenges for them. Higher wage structure was one of the restricting factors for marginal farmers to hire labour for different intercultural operations (Table 9). According to the perception of overall farming community 71% farmers were considering weeds as an important problem. Extend of agreement was higher with Dera farmers (85%). Less difference was among the marginal farmers where 58% farmers think weed as major issue others were thinking otherwise for weeds (Table 10). 4.2.2 Weed Control Methods, Awareness and Usage Pattern of Herbicide Weed was major problem in paddy cultivation. After understanding major problems faced by farmers the picture was even clearer about its intensity. For understanding herbicide usage pattern it was important to understand different methods mainly adopted by the farmers to control this problem. Results of study are presented below. Manual weeding was mainly practiced by marginal farmers (53%) mainly due to smaller land holdings. The intensity of manual weeing was reduced with increasing land holding (Table 11). Pattern of chemical control was totally opposite, Dera farmers (28%) giving more importance on it. Major chemicals used were Machete as pre emergence herbicide and Nomini gold as post emergence herbicide for large land holdings. Based on

Table 9. Major Issues Affecting Paddy Production in Beesalpur

Dera Farmer
Weeds Pest Diseases Water Other (labour) V.LOW 1 0 3 2 0 LOW 3 5 4 5 1 MOD 9 3 2 7 4 HIGH 8 6 1 9 3 V.HIGH 15 3 1 3 2

Large Farmer
Weeds Pest Diseases Water Other (labour) V.LOW 1 2 1 1 1 LOW 3 5 3 11 3 MOD 9 6 3 8 3 HIGH 12 7 5 3 5 V.HIGH 4 2 1 3 1

Marginal Farmers
Weeds Pest Diseases Water Other (labour) V.LOW 8 2 1 4 3 LOW 6 3 3 7 6 MOD 5 7 4 6 4 HIGH 4 3 3 3 4 V.HIGH 3 3 5 3 1

Table 10. Intensity of Weeds as an Important Problem in Paddy Production Dera Farmer Yes No 85 15 Large Farmer 69 31 Marginal Farmer 58 42 Overall 71 29

Fig. 17 Major Issues Affecting Paddy Production in Beesalpur

Ratting Important Problems in Rice Cultivation

40 35 30 25 20 15 10 5 0 Dera Farmer Large Farmers Marginal Farmers

WEEDS 35 28 25

PEST 17 21 18

DISEASES 11 12 16

WATER 26 27 23

Other (Labour) 11 12 17

Fig. 18 Intensity of Weeds as an Important Problem in Paddy Production

120 100 15 80 60 40 20 0 Dera Farmer Large Farmer Yes Marginal Farmer No Overall 85 69 58 71 31 42 29

the availability of resources use combination for chemical and manual methods was varied from 65% to 29% in Dera farmers to marginal famers (Table 11). Understanding weed control method provided platform to understand usage behaviour of herbicide. Major brands were selected based on the pilot study. Study was divided in to two stages, in first stage was to understanding about product awareness and usage pattern among farmers and second stage was to understand major sources of information about brand. All the farmers were aware about two major products i.e. Machete and Nomini gold. Machete was popular due to its presence from long time in market since 1978 and enjoying market leadership with huge trust and brand loyalty among farmers. Nomini gold was more popular due to its performance as post emergence herbicide and enjoys market leadership due to first entry advantage (Table 12). Ratings were given for understanding usefulness of Machete to the farmers. 41% Dera farmers gave high importance for use of Machete. Moderate importance was given by the large farmers (38%) and marginal farmers (37%) for its use in paddy. According to most of the farmers there is an emerging need to modify the technical of Machete as it was losing its penetration power and was unable to check growth of modern weeds. Among other brands Refit (92%) was more popular while it was being used by 93% farmers who have heard about it. Fast mix was heard by 73% of farmers while 74% farmers were adopted this in there practice. Top star (70%) and Tarak (51%) were ranked fifth and sixth respectively where 79% and 47% farmers have used these products among them. Major sources of information were dealers who influence the purchase decisions. A newspaper was one of the major sources of advertising used by some of the organisations. Word of mouth from fellow farmers was identified as important source of information. While other activities like extension work form organisation, posters, POP displays etc. were categorised under other category. Among dealers Refit (62%) was most popular and was recommended to farmers followed by Fast mix (57%). Top star (31%), Tarak (39%) and Machete (46%) was least promoted by dealers. Newspaper advertises was one of the major advertising strategies adopted by Bayer crop sciences for Top Star (23%).

Table 11. Important Methods of Weed control in Paddy

Dera Farmer Manual Chemical Manual Chemical If both, Mostly manuallittle chem. Mostly Chem Little manual Equal 7 28

Large Farmer 18 23

Marginal Farmer 53 18

Both

13

17

29 29

39 7

5 7

Table 12. Usage Behaviour of Herbicide in Paddy

Where from heard ( dealer/paper/other farmer/ others ( specify) Dealer Machette Nomini Gold Taarak Top Star Rifit Fast mix 100 100 51 70 92 73 100 68 47 79 93 74 46 50 39 31 62 57 News Paper 0 12 9 23 20 0 other farmers 43 36 17 26 7 28 other 11 2 35 20 11 16

Name of Chemicals/brand

Heard

Used

Fig. 19 Important Methods of Weed control in Paddy

70 60 50 40 30 20 10 0 Dera Farmer Manual Large Farmer Chemical Both Marginal Farmer 7 28 23 18 18 29 65 59 53

Fig. 20.1 Usage Behaviour of Herbicide in Paddy

120 100 100 80 68 60 40 20 0 Machette Nomini Gold Taarak Top Star Rifit Fast mix 24 51 55 54 100 100 92 85 70 73 Heard Used

Fig. 20.2 Source of Information about Different Brands

70 60 50 40 30 20 10 0 Machette Nomini Gold Taarak Top Star Rifit Fast mix Dealer News Paper other farmers other

Fig. 20.3 Usefulness of Machete for Weed Control in Paddy

45 40 35 30 25 20 15 10 5 0 Dera Farmer Large Farmers Marginal Farmer V.LOW LOW MOD HIGH V.HIGH

Word of mouth is one of the major reliable sources of information to farmer and they give more importance to such recommendations. The recommendations in form of word of mouth were highest for Machete (43%) followed by Nomini gold (36%) and Fast mix (28%). Road act was one of the advertising strategies adopted by Tata Rallis for their product Tarak and it helped them to create awareness among the farmers for their product.

4.3 Evaluation of all brand promotional activities undertaken by Sinochem India Sinochem India gives more importance to the reach out to farmers in fields (Plate 1). It has created a very good impression in the minds of farmers. It not only helped them to improve the sales but also their products are establishing themselves as important brands in the market. This objective was introduced in the study to judge impact and effects of different extension activates by sales force of an organisation. Frist stage was to understand the awareness about different activities undertaken by sales team. Overall 69% farmers were aware about different promotion activates undertaken by company for popularising Machete and Fast mix. Degree of awareness was highest among Dera farmers (85%) while marginal farmers (52%) were relatively less aware about these initiatives. Due to large farm holdings company was giving more importance to the Dera farmers in promoting product as the rate of purchase was also reported to high. Based on the awareness level of different programmes participation of different programmes were determined. Dera farmers (86%) were heard about farm meetings while 65% farmers were participated in farmer meeting conducted by the sales team for promoting Machete and Fast mix. Participation was highest for jeep campaigning where 91% farmers were aware about it while 81% farmers were actually benefited by this programme (Table 13). Maximum effective method was observed to be jeep campaigning due to its coverage in short time. Farm meeting was reported to be second most important contact programme which helps to create good awareness about products and purchase decision.

Farmer Meeting

Postering Plate 1.1 Brand Promotional Activities Undertaken by Sinochem India

Jeep Campaign

POP DisplayPlate 1.2 Brand Promotional Activities Undertaken by Sinochem India

Table 13. Awareness about Different Programmes and Relative Participation

Dera Farmer Programme Farmers meet Demos Field Visit Jeep campaign Heard 86 45 69 92 Participa ted 65 15 59 81 Not heard 15 55 31 8 Large Farmer Heard 63 33 57 89 Participa ted 36 21 42 64 Not heard 37 67 43 11 Marginal Farmer Heard 45 11 56 95 Participa ted 31 4 29 54 Not heard 55 89 44 5

Table 14. Rating of Different Awareness Programmes by Farmers

Dera Farmer Dont care Delightful Painful Painful

Large Farmer Dont care Delightful Painful

Marginal Farmer Dont care Delightful 25 13 17 22

Very useful

Very useful

Farmers meet Demos Field Visit Jeep campaign

0 0 0 14

0 0 15 21

31 22 35 53

57 50 29 13

11 28 21 0

0 0 0 0

0 0 0 7

27 32 21 34

59 51 61 47

14 17 18 12

0 0 0 0

0 0 0 0

15 58 19 9

Very useful 59 29 64 69

Ok

Ok

Ok

Fig. 21 Evaluation of all brand promotional activities undertaken by Sinochem India Fig. 21.1 Awareness among Farmers about Different Awareness Programmes

120 100 80 60 40 20 0 Dera Farmers Large Farmers Marginal Farmers 85 69 15

31

48 No Yes 52

Fig. 21.2 Awareness about Different Programmes and Relative Participation

100 90 80 70 60 50 40 30 20 10 0 Farmers meet Demos Field Visit Jeep campaign 63 45 45 33 11 57 86 69 56 89 92 95

Awareness

90 80 70 60 50 40 30 20 10 0

Participation

Dera Farmers Large Farmers Marginal Farmers

Fig. 21.3 Rating of Different Awareness Programmes by Farmers

80 70 60 50 40 30 20 10 0 Ok Ok Dont care Dont care Dont care Delightful Delightful Ok Very useful Very useful Very useful Delightful

Dera Farmer Farmers meet

Large Farmer Demos Field Visit

Painful

Painful

Painful

Marginal Farmer Jeep campaign

Plate 2 POP Displays for Machete

Plate 3 POP Displays for Fast Mix

According farmers irrespective of their land holding they were ratting farm meetings very useful for them (Table 14). Large farmers (51%) were very delighted with demonstrations conducted by sales persons while marginal farmers (58%) were feels ok about these activities there were happy but not excited about it. Response for farm visit was neutral while large farmers (61%) and marginal farmers (69%) were excited about it and were rating this programme with very useful rating. Jeep campaigning was ratted high by marginal farmers (69%) due to its timing. Sinochem India has developed special packaging indicators to identify original Machete and Fast mix as to create awareness. 95% Dera farmers identified seal embossed is a good initiative to identify Machete. 100% marginal farmers were happy about this initiative and were happy due to proper identification sign which will even help illiterates to identify the original product and help to avoid fake brands. 4.4 Evaluation of product life cycle w.r.t. brands Machete and Fast mix Product life cycle management (PLC) is the succession of strategies used by business management as a product goes through its life cycle. The condition in which a product is sold (advertising, saturation) changes over time and must be managed as it moves through its succession of stages. 4.4.1 Machete Machete is pioneer brand in paddy herbicide segment. After acquiring particular brand from Monsanto India Sinochem India have given immense importance to this product. Following points were considered to determine PLC of Machete. Sales volume was increased considerably according to the available data Machete brand was market leader in paddy herbicide business. Continuous growth was observed in the sales as well as awareness of particular brand (Table 15). Growth in the sales was 18.92 % and 18.18% over 2008-09 and 2009-10 respectively. Sales volumes were almost touching to the peaks and growth in the sales reduced over previous year. Machete was launched in Indian market in 1975 and since it has served the purpose. Over the years attractiveness of this segment attracted many major players in industry. Some of the important competitors launched their product with same technical and new entries are increasing day by day. Some of the important entrants are mentioned

Table 15. Sales of Machete

Year

Sales (000 Lit.)

Growth

2008-09 2009-10 2010-11

185 220 260 18.91 18.18

Table 16. Important Players & New Entries in Butachlor Business

Company Isagro DSCL Chambal Fertilisers Tropical Agro Zuari Dhanuka Lupin

Brand Trap Shaktiman Uttamveer Thunder Butasaan Dhanuchlor Nirmool

in the Table 16. Today Butachlor provides stage for more than 20-25 brands of different companies in market and also attracting new players even today. Retail price of Machete has fallen considerably due to high market competition and proliferation of competing products. Reductions in margins to the dealers have made competition even difficult as they prefer to sell the brands with more margins and monitory benefits. Sinochem India have launched new embossed symbol on packaging for proper identification of brand Machete (Plate 2). Machete is promoted as original Butachlor in different publication and meetings and emphasis is given on promoting same image among the farmers. Awareness programmers were more concentrated towards creating market pull (demand) rather than push. Based on available information Machete can be placed in mature phase in product lifecycle (Fig. 22). Current status of product will help to increase the sales for 4-5 years but growth rate will be lower. Due to current situation in market, increasing competitors and introduction of new molecule will create new challenges to the product. 4.4.1 Fast Mix Fast mix (Butachlor 50% EW) was introduced in the market to satisfy demand for herbicide which can work in water scarcity conditions. Water was one of the major problems in paddy cultivation. Brand was acquired from Monsanto as a part of Butachlor business acquisition. Following points were considered for understanding the PLC of Fast mix. Sales volume was low as compare to the other brands. Due to low awareness levels farmers did not prefer to buy the product. Sales of the product were increased as compare to the previous year but with repetitive buying from the farmers who have tried earlier. Competition for the market is very low as most of the competitors in the Butachlor segment didnt have the same product. Due to low awareness levels of this product demand has to create in the market as it is an advance version of Machete for drought conditions and uplands (Plate 3). Every time sales team visited the farmers we have to be prompted to try the product.

Based on available information Fast Mix can be placed in introduction phase in product lifecycle (Fig. 22).this product is future of Butachlor business in India. Due to current situation in market, there is every chance of increasing competitors for Fast Mix. Promotion of this product will help to establish this brand with trust and brand loyalty for the product in the minds of farmers.

Fast Mix

Machete

Growth

Maturity

Introduction

Product Development

Decline

Sales

V a l u e Profit

Time

Fig. 22 Product Life Cycle of Machete and Fast Mix

5. FINDINGS AND CONCLUSION Product life cycle: Understanding and strategy implementation in saturated market of MACHETI and growing market of FAST-MIX in Uttar Pradesh study was conducted with four objectives. Some of the important findings of the study were presented below. Buying behaviour of farmers were studied w.r.t. different segments in agri-input industry. Buying behaviour was mainly depending on some of the crucial factors like brand awareness, credit policies of dealer, dealers opinion, availability of product and its price. Even though farmers are depend upon many factors for making purchase decision but they give prime importance to the quality and results of particular product. Impure quality and unsatisfactory results are important reasons for change in buying behaviour of farmers along with fake brands penetration in market. Irrespective of their land holding major paddy producing farmers were considering weeds as a major problem in cultivation of paddy in their field. Majority of the farmers were using combination of manual and chemical methods for controlling weeds in fields. Combination of manual and chemical method was found to be dominant use of chemical was dominant in Dera farmers whereas degree of manual operations were increased with decreasing land holding of the farmers. Dealers were reported to be important source of information to the farmers and they were having huge impact on their decision making. Almost for all the brands sealers were playing important role to disseminate information. Word of mouth from fellow farmers was reported to be the important source of information to the farmers. They were more comfortable with is information source due to the confidence from the farmers of its earlier results. Dera farmers were more aware about different awareness activities taken by the company to promote the product. Company was also concentrating this segment due to higher consumption rate and brand loyalty to the quality brands. Degree of awareness was decreased with decreased land holding. Farm meeting was found to be the most effective source of awareness as it has very good conversion rate in final purchase.

Field visits were also rated higher by the farmers irrespective of their land holding and it helped to build the good brand image in the minds of farmers due to proper feedback mechanism by the company compare to the other competitors. Farm meeting followed by jeep campaigning was most effective method as it act as a reminder to the farmers. Product life cycle is important tool for formulating marketing strategy of product in the market. Product life cycle of Machete and Fast mix was determined based on the primary and secondary data. Machete was reported to be in the maturity phase where sales were increasing but at reducing rate while entry of new brands and molecule was creating challenges to the brand. High level of duplicity and fake brands were harming the image of brand. On the other hand Fast mix is in introduction to growth phase where product stared to create good awareness due to its results and good awareness campaign conducted by sales team. 1. 1.

6. SUGGESTIONS Product life cycle: Understanding and strategy implementation in saturated market of MACHETI and growing market of FAST-MIX in Uttar Pradesh study was conducted with four objectives. Some of the important findings of the study were presented below. Machete is one of the major brands in the paddy herbicide market. Machete is now became generic name for the Butachlor. Fake brands are also promoted as Machete and huge duplicity harming the product in big way. It is necessary to bring some new unique identification as of new embossed symbol on packaging already existed on package. Machete is most trusted brand in the paddy herbicide market and it will help the other products of company to create its own image with the help of Machete. Uniform symbol on every product will promote the quality and trust to the farmer which is created by Machete in their minds. With the changing needs and demands of the market it is very difficult to compete in the market with same oil based technical formulation in market. Hence it is need of the hour to promote Fast Mix on larger basis in Uttar Pradesh otherwise series of failures due to certain uncontrolled reasons like rain and water supply it will affect the brand image of Machete and Sinochem overall. As a premium brand in herbicide margins for dealers are very low and hence they are avoiding the sales of the product on large scale. They are diverting the farmers to other brands like Trap and Thunder where they have more margins per lit. Introduction of loyalty scheme to the dealers which will include the bonus points on the sales of given targets based on the different products will help to induce loyalty as well as it will promote the sales of other products which are offered by the company. Machete is surrounded by many look alike and spell alike products in the market where dealers take full advantage of illiterate farmers and hence more marketing force needed to be add in the current team of people as work load is much higher and it affect via neglecting some of the areas due to lack of time in the season.

Fast Mix is prominent product for the future and considering the fact about small and marginal land holders in the Uttar Pradesh need of new half litter package which will allow the small farmers to purchase the product. Post emergence herbicide is creating a good challenge to the pre emergence products like Machete and Fast Mix and hence proper marketing strategy have to be formed and implement to protect the damage by these segments to market share of Machete and Fast Mix. Farmer meeting and field visits are important aspects of the awareness programme by the company and are working well for the company and the Machete brand, but if it is promoted on the larger stage like series of farmer camps and training at taluka place and important market places will help to promote brand on larger ground. Newspapers are the cheapest mode of advertisement and also most effective one. So company should think on giving advertisement in local newspapers. It will helpful in creating brand value of company among farmers and promotion Machete and other product.

Name: Village: Average Land Holding Tahasil: District: Large Land Holding (More than 3 Ha) Rabbi Season : Marginal Farmer (Less than 3 Ha) Summer Season :

Dera Farmer

Crops Kharip Season :

(This module is designed to understand buying behavior of different brands in rice) Q.1. Which company products you are using for last 3 years? (Tick appropriate)

Product Seeds Herbicide Pre emergence Post emergence Urea Phosphorus Potash Fertilisers Zink DAP Customised fertilisers Micronutrients Insecticide Fungicide Growth Regulator Others Sucking pest Other pests

Company

Brand

Satisfaction/ Dissatisfaction

Q.2. If no what are the important reasons for dissatisfaction?

Product Seeds Herbicide Fertilisers Insecticide Fungicide Growth Regulator Others Ranks

Ranks 1 Impure quality 2 Higher price 3 Unsatisfactory results 4 Unavailability of material in market 5 Fake brands Q.3. How do you rate the following problems?
Pest: Diseases: Weeds: Water: Others:

Rating V.Low-1 Low-2 Moderate-3 High-4 Very High- 5 Q.4. Do you think weed is the major problem in Rice?
Yes No

Q.5. How do you control weeds in your rice crop? (Multiple ticks)

Manual Chemical Both If both, Mostly manual- little chem. Mostly Chem Little manual Equal Other:

Q.6. What chemicals are you using in weed control.

Type Pre emergent Post Emergent

Names of chemicals/Brands

Q.7. What are the different chemicals/brands you have heard or have used?

Name of Chemicals/brand Machette Nomin Gold Taarak Top Star Rifit Fast mix

Heard

Used

Where from heard ( dealer/paper/other farmer/ others ( specify)

Q.8. How does you rate usefulness of Machette? Rating - V.Low-1 Low-2 Moderate-3 High-4 Very High- 5

Q.9. Can you tell me why do you think so?

Q.10. What are the advantages and disadvantages of using Machette?

No. 1 2 3 4 Advantages Disadvantages

Q.11. What are the important improvement in product and service do you feel?

Machete

Fastmix

Q.12. What do you feel about new seal embossed by the company on the packaging material?

Q.13. Do you think it will help farmers to identify the brand? Why?
Yes No Reason

Q.14. Are you aware about the different initiatives taken by Sinochen India for popularising Machette or Fastmix?
Yes No

Q.15. What company contact programmes are you aware of or participated in?
Programme Farmers meet Demos Field Visit Jeep campaign Y/No Heard of (Name cos) Participated in (Name cos)

Q.16. Rate the current farmer programmes being conducted by Sinochem India that you are aware of: (First list all and then Rate them)
Programme Rating Remarks

1- Painful

2- Dont care 3- OK 4- Very useful

5- Delightful

BIBLIOGRAPHY / REFERENCES

IndiaChem2010 Handbook on Indian Chemical Industry, Tata Strategic & Roland Berger Crop Protection market in India 2008, Frost & Sullivan Global crop protection chemicals markets 2009, Frost & Sullivan Phillips McDougall report on agrochemicals Crop protection Business in the New Decade, 2010 presentation, Cheminova KRC Research weekender on Agrochemicals 2009 Thirty-seventh report of Standing Committee on Petroleum & chemicals on "Production and availability of pesticides", 2002 Croplife India report on agrochemicals Company websites and Annual Reports FY10: Bayer Crop Science, Rallis India, United Phosphorous Limited, Syngenta India Limited, Gharda Chemicals Limited Primary interactions with industry leaders and Govt. of India Business Press Chemical Weekly Yara Fertilizer handbook National Horticulture Mission