CONSUMER BEHAVIOR

Mahindra & Mahindra: Marketing A Low-

Priced Mini-Tractor

Submitted by: GROUP - 7

Kolishetty Hemanth (PGPJ03024)
Saurabh Pal (PGPJ03046)
Sonal Jain (PGPJ03049)
Versha Kaushik (PGPJ03060)
Vivek Kumar (PGPJ03061)
 1. Benefits of a tractor in rural areas

Agricultural operations and commercial purposes:

▰ Plowing, tilling and landing fields, in addition to regular lawn care, landscape maintenance,
transfer or spreading fertilizers, and shrub clean-up.

▰ Transporting crops from farms to warehouses and agriculture markets.

▰ Tractors used as a robust transportation vehicle: transporting luggage in airports and hotels,
driving on rural roads and used in infrastructure construction.

▰ Yuvraj 215 can be used Sugar cane, Cotton, Soya, Grapes, pomegranates fields for inter
cultivation operations.

▰ Tractors are also used as Cultivator, Rotavator, Boom spray, Blow sprayer, water pump, Trolley,
Special attachment for Garbage handling across the state.

2. Stereotypes of a tractor owner:

▰ Low income

▰ Area below 2 hectares

▰ Aspiration buyers

▰ Network opinion preference

3. Stereotypes that farmers have:

▰ It should cater both the farming(agriculture) and non-farming needs (commercial use)

▰ Finance support

▰ Reliable

▰ Guarantee of quality

▰ High durability and ease of use farming)

4. Potential customer of the Yuvraj 215 NXT

▰ It is ideal for farmers with 2 to 5 acres of land, who have conventionally ploughed with bullocks
or power tillers but aspire to own a tractor.

▰ It is also apt for farmers who require an additional tractor for specific applications like inter-
culture, power generation or water pumping.

▰ Further, vegetable farmers, as well as those who own orchards, or cultivate crops such as
soyabean or cotton can also benefit from the Yuvraj"s strong value proposition of productivity,
 power and performance. In cotton crops the Yuvraj 215"s small size allows it to move between
the standing cotton crop for key operations such as inter-culture.

▰ There is low penetration of tractors amongst farmers at the bottom of the pyramid and thus this
tractor can cater distinct need of farmers with small landholdings.

5. Social factors affecting the purchase

▰ Limited financial resource

▰ Low awareness

▰ Lack of structured credit facilities

▰ Not ready to change their typical life style (traditional farming) Low income

6. Stages in consumer buying decision

▰ Identify need (farming and non-farming application)

▰ Information gathering (networking, opinion leader, non-government organization, distributor,

dealer etc)

▰ Evaluation of alternative (influencing criteria- Samriddhi center, Mahindra Shubhlabh service,

M&M financing facilities)

▰ Purchase decision

▰ Post purchase decision (usefulness, service support, spare parts availability ex-Mahindra logistic
limited)

7. Important factors for decision- making for a tractor purchase

▰ Mahindra's Samridhhi centres guides the farmers for productivity related issues. They could
introduce the benefits of Yuvraj 215 NXT to the people visiting these centers.

▰ Mahindra ShubhLabh Services Ltd. provided technical assistance to farmers, in the form of
agronomy, grading, packaging etc. They could influence about the robustness of the tractor.

▰ M&M Financial Services Limited, a leading non- banking financial company provided financing
for the purchase of tractors. It has 3 million customer base.

▰ Mahindra Logistics Limited focused on after-sales services like availability of spare parts in India.

8. Promotional strategy for Yuvraj tractors

ADVERTISEMENT TOOLS:-

▰ Banners and Posters.

▰ Printing and calendars.

 ▰ Catalogue advertising.

▰ Window display.

▰ Pomplents advertising.

▰ Construction of circles.

▰ Gift bags/ carry bags.

▰ Anniversary functions.

▰ News Papers.

▰ Wall Paintings.

Sales Promotion:-

▰ Good communication system and customer relations service.

▰ Gifts to loyal customers.

▰ Offering gift with the product (LIVE).

▰ Free service coupon warranty.

▰ Fuel checkup camp.

Formal Media

▰ Reach of formal media is low in rural households (Print- 14 per cent, TV- 36 per cent, Cinema- 16
per cent, and Radio- 18 per cent).

Informal/Rural Specific Media

▰ Effective reach and personalized communication will help in realizing the promotional
objectives. Examples: Farm-to-Farm, Group Meeting of Rural, Customers, Rural entertainment
programmers, Opinion Leader, Product Demonstration etc.

9. Would purchasing a Yuvraj 215 NXT be a good decision for a small farmer with one hectare of
land?

Problem statement-To check whether it is economically viable or not to buy M&M, Yuvraj 215

Quantitative analysis of costing

for bull cart case:

Costing of bullock Cart= (70,000 to 115,000) per month +monthly expenses (1500 to 2000) +food +medical
charge
Now let us calculate on yearly chare= (70000 to 115000) +12*(1500 to 2000)
=range (88000 to 137000)
Taking the average cost = (88000+137000)/2=113000 approx.
Assumption the average bull cart age is 5 years; it means the farmer has to replace them in next 5 years
with zero scrape value.
Hence per year average bull cart fixed cost =113000/5=23000 approx.

For tractor case:

Fixed price below the 200000, now taking the maximum value for calculation
Average time period= (6 to 8 years) but farmer use it till 15 years as per case
Now for the calculation let’s take pessimistic approach average life =10 years
Per year fixed cost=200000/10=20000
Hence from the above calculation it is clear that average fixed cost of tractor 20000 is less than average
per year fixed cost of bull cart 23000.

Note- In case there is not sufficient data is given for cost benefits analysis so there are some
assumptions are required.
a) Taking operating cost for both the cases is same but as per qualitative approach we think that bull cart
operating cost is much higher because if it is in operation or not farmer must have to feed the bulls daily
and they also more susceptible to disease.
b) The scrape value of tractor is higher comparable to unproductive bulls but still we assume zero scrape
value.

Case discussion analysis: One of the major problems still needed to discussed which is, as per the case
they are launching 15Hp compact tractor below the 200000 rupees, which is useful for farming and non-
farming application. Non farming application plays a significant role for buying decision making because
average farming application is only 35 to 40 days per year but as per the Exhibit 4 up to 30 hp it is only
suitable for soft soil but not for other Indian soil or non-agriculture purpose like transportation,
construction etc. This conflicting data further open the case discussion but there is not sufficient extensive
data is given regard soil categories, their cultivation land area, major non farming application breakup as
per HP etc.