How to market agricultural machinery in India?

Marketing agricultural machinery requires a clean, transparent and simple marketing strategy. This helps both the companies and farmers buying the products. It is important to realize the full potential of rural markets by speaking with dealers and end-customers to know about the condition of soil, which products will be effective in a region and modifying products to local needs. In India, the state of Punjab may have very different agricultural machinery requirement than say a state like West Bengal. A lot depends on the farm sizes, the crops cultivated and the overall financial condition of the farmers. Other factors such as Government subsidies and transportation facilities to the location also play a key role in the procurement process of agricultural machinery.

The actual marketing of the products starts with identifying the right dealers for a product. It is a difficult process as existing dealers are already working with other companies and the marketing person on the field is unaware of anyone one interested because they are not found in online searches. Therefore, it is important to develop a good field network as you can get important leads from the field.  Bigger companies give advertisements in print and social media to find dealers. They have large capital requirements and want dealers who can invest in infrastructure, uplift larger quantity of products and invest in marketing. However in India a large majority of companies are SMB’s that have limited resources and are unable to invest in marketing at the corporate level and deploy adequate manpower in the field. They try and reach prospective dealers by cold calling, making occasional visits to potential regions and also employ commission agents who market their products for an agreed commission. They are also using online marketing and social media to market their products.

The third aspect is to decide on the fair price for the product. With rising prices of industrial goods, manufacturers have no option to increase the price of products and pass on the burden to the dealers. However, there is one interesting observation that I noticed during this ongoing monsoon season in India that customers are not realizing the genuine price increase that has taken place in product manufacturing. They still want the products to be sold at previous price points and this is putting pressure on the dealer. There is some pricing clarity that is expected in the next couple of months.

Another important aspect agricultural marketing is to continually improve the quality of products by giving farmer feedback to the company. The feedback should be taken seriously by the company and improvements as suggested should be taken into the product development roadmap and developed accordingly. The company should make a reasonable amount of investments in sales and marketing. The marketing costs are for doing roadshows and product demonstrations for the farmers to help them know the products.

The adoption of agricultural machinery is greatly influenced by the quality and after sales available to the farmers. Since manufacture of agricultural machinery is reserved for small-scale industries, the quality is affected by the manufacturing technology adopted by them. Testing and evaluation helps in up-gradation and quality production of machinery. R&D institutions and quality certification agencies conduct the Testing and & Evaluation. Only products that are certified by 6 Regional Testing Centres are eligible for Government subsidy. The testing of the products ensures quality, reliability, durability, functional ease, comfort in operation and cost of operation.

The dealers who are working should be aware of the Government subsidy schemes as this provides the farmers with the opportunity to buy their own implements at a much subsidized rate than the market price. There are different subsidy schemes of the Government and farmers should take opportunity of these schemes. While on one hand it helps the farmers to buy their own implements it helps small and medium enterprises to expand their market and make their brands visible to the farmers. However there are several challenges that are faced while adopting farm machinery by farmers. The constraints experienced in the growth of farm mechanization so far need to be dealt with so that the farmers are enabled to adopt new methods to produce more, to earn more through gains in productivity, quality of produce, higher prices, etc, for raising their standards of living and better life styles. The critical constraint factors are:

·         Reliability and quality of agricultural machinery

·         Availability of products, spare parts and after sales-services in close proximity

·         Availability of Bank credit on terms where currently the farmers have to mortgage both the equipment purchased and his land

·         Lack of effective consumer protection in rural areas for redressel of cases of product problems, and poor after-sales- services, etc.

Overall the agricultural implements machinery market in India has reached market value of US$ 10.4 Billion in 2020. This is expected to grow significantly and companies should prepare themselves to launch better quality products and bring them to the farmer’s doorsteps. 

If you are interested to launch agricultural machinery in India connect with us at info@intelligentq.co.in.