The competitors in this segment are Chinese made tractors and locally assembled tractors; however those are no match for Vandal even if those are cheaper as Vandal is geared towards hostile Indian conditions. The tractors in other segments have higher horse power- at least twice as costly as Vandal and half as fuel efficient. Vandal can also be used for other farming purposes like spraying pesticides, POT, Intercultural operation etc. And other non farming purposes Like transportation also. Average landholding in India being 1.
7 hectares and with 82% of farmers belonging o this category- this segments looked quite lucrative for a product like Vandal. Problem Definition The manufacturers were In dilemma whether to target Just the small and marginal farmer segment of the tractor market. Analysis Summary Advantages for a farmer in favor of buying a small tractor- Initial purchasing cost – half of that of a big tractor, fuel consumption cost halved as well. Better than bullocks In cost and maintenance terms. Tractors are financed up to 90% through banks and at cheap rates even for marginal farmer.
Government gives subsidy of ASK for mini tractor market segment. Its smaller wheel base and turning radius offers better invulnerability, accessible to all corners of the land. – It can also De us technologically EAI Tort non-Tarring purposes Walt I Title or no molestations Against buying a small tractor- Tractors are not only used for agricultural purposes but also for rural transportation and hauling of agricultural produce to market. They also have a social significance in rural India- they are a symbol of power and masculinity.
Custom work like renting out for generating some extra cash can be done only with larger tractors. Market Outlook The small and marginal farmer market segment has little competition with a huge potential demand. Market can be created given that credit availability is not a problem -banks are ready to finance up to 90% of the tractor cost to a farmer with as less as 3 acres of land. Government also has favorable policy for this sector- ASK of subsidy is given from Government side to farmer per tractor. Another sector that can be looked at is horticulturalist market. Our Recommendation We recommend forming one marketing strategy to target small and marginal farmer segment and another marketing strategy for the other market segments.
Small and marginal farmer market segment is price sensitive market segment- we have to market Vandal as cost effective product. We suggest launching Vandal in one geographical area and after getting the feedback expanding the operation in other geographical areas in phased manner. Support for our Recommendation Small and marginal farmers have different requirements than the larger farmer, they eve small landholding than the larger ones and keeping a big tractor is out of question for them.
The small and marginal farmer segment is cost sensitive market and hence dealing Walt tins market segment we nave to KICK Tort long term galas Instead AT near term benefits- break even can happen only in 12th year, refer the break even calculation below. We are entering a new market segment and we don’t have established distribution channel- we need to launch the product in one geographical area first and after getting the feedback from that customer group – based on this feedback we have to improve on product, pricing, distribution and marketing etc and then launch in other geographical areas in phased manner.