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Contents
Current trends: Tractor Industry Replacement Market New Sales Opportunity Identification of TG Approach Touch Point Proposition
Regional trends
The western and southern parts of the country have performed above par While the eastern and central parts have reported muted growth figures in FY12 Further, the northern region, which is the largest tractor market of the country, grew at a healthy pace during the period, benefiting from sustained replacement demand The demand outlook from southern India continues to be robust over the medium term. In fact, roughly 50% of the incremental capacity expansion for the industry is expected to come up in southern India Shift in focus of OEMs towards southern states Tractor industry is in capacity augmentation phase Supply-demand dynamics of the industry are expected to change with the commissioning of large manufacturing capacity in FY13
Replacement market
States like Punjab and Haryana shall continue to generate healthy replacement demand. Replacement sales shall continue to support tractor demand in the northern region, but volumes growth is expected to remain below par. In an effort to battle sluggish demand scenario, tractor OEMs have expanded and refurbished their product portfolio to come out with more application based offerings and to cater to niche market segments. Industry players witnessed a decline in profitability metrics during FY12 struggling from a partial, or delayed pass on of increased cost of production, besides denominator effect.
Other trends
95% of tractor sales are on credit. Credit is extended by commercial banks, state land development banks and regional rural banks. Irrigation facilities reduce reliance on the monsoon and allow for quick yielding varieties of food grain .This reduces the cropping cycle to 3-4 months from the traditional 5-6 months. Reduced cropping cycle require deep tilling which translates into higher demand for tractors.
Identification of TG
Approaching them
Approach
As the study shows, festival season witnesses an increasing trend in sales. October 2011 saw the most of the sales. Therefore, the campaign is targeted during coming festive season.
Campaign Name
Touch Point
Proposition
Exchange/Replacement Offers Credit and Finance Group buying Entertainment Focused meeting