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    Pricing Strategy For Tractor in Bihar

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    Manthan Kulkarni
    This document discusses pricing strategies for tractors in the state of Bihar, India. It provides background on Bihar's demographics, noting that 85% of its large population lives rurally and agriculture accounts for 35% of the economy. It then examines Bihar's tractor market, which makes up 6% of India's total and has grown 35% annually. Two potential pricing models are evaluated: value-based pricing using a TAFE tractor as an example, and price-conscious pricing comparing Mahindra and Bull tractor models. Other measures like credit, dealerships, discounts, and payment options are also suggested to encourage tractor purchases.

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    Pricing Strategy For Tractor in Bihar

    Uploaded by

    Manthan Kulkarni
    193 views20 pages
    This document discusses pricing strategies for tractors in the state of Bihar, India. It provides background on Bihar's demographics, noting that 85% of its large population lives rurally and agriculture accounts for 35% of the economy. It then examines Bihar's tractor market, which makes up 6% of India's total and has grown 35% annually. Two potential pricing models are evaluated: value-based pricing using a TAFE tractor as an example, and price-conscious pricing comparing Mahindra and Bull tractor models. Other measures like credit, dealerships, discounts, and payment options are also suggested to encourage tractor purchases.

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    pricing of tractors

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    This document discusses pricing strategies for tractors in the state of Bihar, India. It provides background on Bihar's demographics, noting that 85% of its large population lives rurally and agriculture accounts for 35% of the economy. It then examines Bihar's tractor market, which makes up 6% of India's total and has grown 35% annually. Two potential pricing models are evaluated: value-based pricing using a TAFE tractor as an example, and price-conscious pricing comparing Mahindra and Bull tractor models. Other measures like credit, dealerships, discounts, and payment options are also suggested to encourage tractor purchases.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    193 views20 pages

    Pricing Strategy For Tractor in Bihar

    Uploaded by

    Manthan Kulkarni
    This document discusses pricing strategies for tractors in the state of Bihar, India. It provides background on Bihar's demographics, noting that 85% of its large population lives rurally and agriculture accounts for 35% of the economy. It then examines Bihar's tractor market, which makes up 6% of India's total and has grown 35% annually. Two potential pricing models are evaluated: value-based pricing using a TAFE tractor as an example, and price-conscious pricing comparing Mahindra and Bull tractor models. Other measures like credit, dealerships, discounts, and payment options are also suggested to encourage tractor purchases.

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    Pricing Strategy for Tractor in Bihar

    Rural marketing for tractors in Bihar state

    Demographics of Bihar
    Population: 82,998,509 Nearly 85% live in Rural areas Literacy rate: 47% Agriculture accounts for 35% Almost 58% of Biharis are below 25 years age(highest in India)

    Geographies of Bihar
    Area: 38,202 sq mi (98,940 km2) Agriculture of Bihar: Rich and Diverse Average Rainfall: 1186 mm

    Agricultural land area: 9,360,000 hectares

    As per the National Sample Survey Organisation :


    Average revenue of farmers in Bihar = Rs. 1810 per month (2012 data)

    Segmentation :
    65 % farmers - Rs. 1210 / Mnth 25% farmers - Rs. 2240 / Mnth 10% farmers - Rs. 5130 and above / Mnth

    Size of tractor market 6% (2012 data) Highest in Eastern region (Orissa, Bihar and Bengal) Eastern region is the lowest amongst other regions Tractor sale growth of 35% Y-o-Y basis (2010 data)

    Mango Guava Lichi Pinapple Brinjal

    Cauliflow er Cabbage

    Market Share of the Tractor Market


    Others 8%

    Market Share of Tractor Companies in Bihar


    New Holland 5%

    John Deere 6% ITL 8% Escorts 10%

    M&M 40%

    TAFE 23%
    Source: Indian Tractor Market Report IIM-C June 2013

    Tractor Sales and Growth Trends in Bihar


    Year 2008 2009 2010 2011 % Contribution to National Sales* 2.6 3.3 4 5.7 YoY Growth % 20 25 27 49

    2012

    6.1

    35

    Source: Indian Tractor Market Report IIM-C June 2013

    Classification of tractors
    The Indian tractor market is broadly classified into five segments
    1. 2. 3. 4. 5.

    less-than-20 hp 21-30 hp 31-40 hp 41-50 hp 50+ hp

    42% of Indian market is in the 31-40 hp category Share of 40+hp tractors gone up to 44% in 2011

    Price
    Approximate Tractor price list
    1. 2. 3. 4. 15 hp - ~Rs162,000 30 hp - ~Rs330,000 50 hp - ~Rs485,000 60 hp - ~Rs525 000 ~Rs575000

    FACTS
    Soil Alluvial Fertile soil (Indo Gangetic plain) Income Rs. 1810 / Month(60-70%) Tractor Sales (East India) 40000 units

    Tractor Growth 6.1% (2012)


    Rainfall - 1186 mm (average yearly)

    Model 2-Pricing Strategy

    Model 1 - Value Based Pricing

    Example Value conscious pricing


    TAFE MF 1030DI
    Basic cost: Rs 1,88,000 Power: 30hp Maintenance: Rs 9000 Diesel cost: Rs 21000 Average life: 14 years

    Pricing Strategy
    Model 2 Price Conscious pricing

    Example - Price Conscious pricing


    Mahindra Yuvraj V/s the bulls

    Other measures to encourage purchases


    Credit facilities to farmers Increasing in dealerships

    Discount pricing method can be used during festive seasons


    Service and maintenance facilities Various payment options

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