Symbiosis Centre for Management and

Human Resource Development

Introduction to Marketing Management

Executive MBA Sem - I
Year: 2019-22
Course Project: - Study of Mahindra Tractors Marketing Strategy

Team members:

Sr. No. PNR No. Name Sign

1 19020348020 Anurag Sharma

2 Nishgandha Nayak

3 19020348017 Yadnyesh Pradhan

Faculty: Shantanu Prasad.

Index

1. Company Information and product range - Founded in 1945 as a steel trading

company, Mahindra entered automotive manufacturing in 1947 to bring the iconic Willys
Jeep onto Indian roads. Today, Mahindra Group is a multinational group having an
aggregate revenue of $20.7 billion with more than 180,000 employees in over 100
countries across the globe.Operations span 18 key industries that form the foundation of
every modern economy: aerospace, aftermarket, agribusiness, automotive, components,
construction equipment, consulting services, defense, energy, farm equipment, finance
and insurance, industrial equipment, information technology, leisure and hospitality,
logistics, real estate, retail, and two wheelers. M&M is the market leader in the Indian MUV
and tractor segments of the automotive industry. Mahindra has crossed the 30 lakh
tractors rollout milestone recently. The key business verticals of Mahindra group and their
profits are given in the table below. (profit values in crores)

Sr. No Sector FY 2019 FY 2018

1 Automotive 2141 2026

2 Farm Equipment 2382 3051

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 3 Financial Services 2703 1851

4 Hospitality 97 222

5 Real Estate 37 65

6 Others (25) 17

As it can be seen from the above table, automotive, farm equipment and financial services
are the key business units contribute to Mahindra business. The relative performance of
M&M automotive and farm equipment business units and the industry performance is
summarized in the table.

Sr. No. Sector Industry Market Benchmark Relative

growth (FY Share (FY market Market
2018-19) 2018-19) share Share

1 Automotive 5.2% 11.2% 52.5% 0.21

2 Farm Equipment 8% 40.2 18.4% 2.18

(Note: Benchmark for Farm Equipment is TAFE tractors while that for automotive is Maruti Suzuki)

The BCG diagram for the resource allocation is given below.

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As you can see from the BCG diagram above, Mahindra Farm Equipment sector
specifically tractors is a star performing business unit. The current study is focused on
Mahindra Tractors a major contributor to Mahindra Farm Equipment business. M&M
produced its first tractor in 1963, the Mahindra B-275. Mahindra Tractors is an international
farm equipment manufacturer of Mahindra & Mahindra. In 2010, Mahindra became the
world's highest-selling tractor brand by volume. Mahindra's largest consumer base is in
India, China, North America, and a growing market in Australia. The company is the largest
manufacturer in India

The key manufacturing locations of Mahindra Tractors are given in the figure below.

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 2. Review of recent happenings in Mahindra Group –

 Reinforces its leadership in the global tractor market

 Produces over 2,00,000 tractors in 2018-19, the highest by an Indian tractor
manufacturer
 Rolls out new campaign “Aapka Aabhar 30 Lakh Baar” in the domestic market around
the new milestone

 Mumbai, April 3, 2019 : Mahindra & Mahindra Ltd., part of the USD 20.7 billion
Mahindra Group, today announced that it had become the first Indian tractor brand to
rollout 3 million tractors. Mahindra is currently the world’s largest farm tractor
manufacturer by volume and India’s leading tractor manufacturer for over three decades.
The company achieved this manufacturing milestone during March 2019. This has further
cemented Mahindra’s leadership in the Indian market. It is also the first Indian tractor
manufacturer to have produced over 2,00,000 tractors in 2018-19, the highest-ever by an
Indian tractor brand in a single financial year.

 Mahindra and Mahindra incorporates MBPL as wholly-owned subsidiary

Read more at:

//economictimes.indiatimes.com/articleshow/71173179.cms?utm_source=contentofinter
est&utm_medium=text&utm_campaign=cppst

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  Mahindra's Swaraj Tractors Crosses 15 Lakh Units Production Milestone

3. Industry analysis - India is the world’s largest tractor market by volume[1]. India has a
large number of farmers with small and medium sized farms. In most areas there is very
limited mechanisation resulting in low farm productivity. However, increasing shortage of
farm labour and focus from Government of India to improve the state of agriculture in India,
is leading to growth in mechanization in the agriculture sector. Historical data of last 10
years shows that demand has grown in the range of 7-10%CAGR with cyclic fluctuations
in the tractor demand[1]. The cyclic fluctuations in demand primary arise from seasonality.
In year 2018-19, the demand was higher in the months April-August due to overall positive
economic outlook, normal monsoon, good Minimum Support Price and availability of
finance. These five months showed around 19.7% growth while remaining seven months
had very low market growth of 1.2%. This low growth can be attributed to poor distribution
of South West Monsoon, deficient North East monsoon and poor price realization. There
has been a great variation in the tractor market and growth across the different states in
India with Uttar Pradesh, Madhya Pradesh, Rajasthan, Maharashtra, Bihar, Gujrat, Andhra
Pradesh, Karnataka and Haryana contributing to 75.4% of the tractor market in India.
Indian tractor market can be segmented by horse power. The segmentation of the Indian
tractor market, by horsepower, the sale of tractors in the respective segments in the
financial year 2018-19 and growth in the respective segments is given in the table below.

Sr. No. Power Segment No. of Tractors Sold % Sale % Growth

1 < 20 Hp 29310 3.7% -3.3%

2 21 Hp - 30 Hp 45664 5.8% 0.9%

3 31 Hp - 40 Hp 281068 35.7% 9.2%

4 41 Hp - 50 Hp 361607 47.2% 9.2

5 >50 Hp 59835 7.6% 7.3%

4. Competitor Analysis - As mentioned in the previous section, tractor industry in India is

competitive with number of Indian as well as International OEM. The detailed information
about the major tractor manufacturers in India are given below.

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 Min.
Sr. Maximum Manufacturing
Company Power
No. Power (Hp) Plants
(Hp)

Jaipur,
Mohali,Rudrapur,
Vadodara,
1 Mahindra & Mahindra 15 75
Kandivali,
Nagpur,
Zaheerabad

Mandideep,
2 TAFE 18 100
Bhopal

International Tractors Ltd -

3 35 110 Hoshiarpur
Sonalika

4 Escort Tractors 25 60 Faridabad

Pune, Dewas,
5 John Deere Tractors 28 120
Patiala

6 VST Tractors 17 50

It can be seen from the table above that all the competitors have products in the range of
Mahindra tractors except Escort tractors and VST tractors that do not have products above
60 Hp and 50 Hp respectively. TAFE, International Tractors and John Deere Tractors have
tractors upto 100 Hp, 110 Hp and 120 Hp respectively. Mahindra does not have any
product in this range and based on the annual report FY 2019, there is no immediate plan
to introduce a tractor in this range. However, table in section # industry analysis indicates
that the demand is much less in the power range of greater than 50 Hp (<8%). Therefore,
having no product high horsepower range does not significantly affect the business. It can
also be seen from the comparison above that Mahindra has large number of
manufacturing plants of tractor and farm equipment distributed across India making it
much easier and cheaper to reach the rural market across India. (confirm)

The no. of tractor units sold and the market share of each of the above company is given
in the table below.

Sr. Company Total Total Market Market

No. sales - FY sales - share - FY share - FY
2019 FY 2018 2019 2018

1 Mahindra & Mahindra 316472 302082 40.2 42.9

2 TAFE 144864 138266 18.4 18.6

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 3 International Tractors Ltd - 96051 91677 12.2 11.8
Sonalika

4 Escort Tractors 92902 80405 11.8 10.7

5 John Deere Tractors 70857 67630 9.0 9

6 VST Tractors 8198 11367 1.0 1.5

However different tractor manufacturers are dominant in different product ranges. The
information regarding the same is given in the table below.

Manufacturer Min. Horsepower (Hp) Max. Horsepower (Hp)

Mahindra 15 75

TAFE 18 100

John Deere 28 120

Escort 25 60

Sonalik 35 110

It can be seen from the table above the TAFE is the only competitor with tractor below 20
Hp segment.

5. Segmentation and Target strategy - The tractor segmentation is primarily based on the
following three lines,

5.1. Demographics (primarily rural) - As tractors are primarily used in rural areas for
agriculture demographic segmentation is important. With Rural as the primary
demographic segment, socio-economic segmentation within the rural market can
be done based on SEC groups. SEC groups R1 and R2 are primarily tractor buyers
that contain farmers with farmland larger than 5 acres.

5.2. Geographic - The growth in the tractor market in different industries. Also nature
of farming is greatly different in different regions like planes of Ganges or Satlaj in
Uttar Pradesh and Haryana as against primary hilly terrain with narrow shore line
in Kerala. Uttar Pradesh, Madhya Pradesh, Rajasthan, Maharashtra, Bihar, Gujrat,
Andhra Pradesh, Karnataka and Haryana contributing to 75.4% of the tractor
market in India.

5.3. Horsepower - Segmentation based on horsepower is important. Since the majority

of the farmers are small to medium land holders, low and medium horsepower

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tractor segment is important. As given in the industry analysis, demand is primarily
high in the horse power range of 30-50 Hp (Over 80%). The segmentation based
on power and is given in the table below.

Sr. Horsepower Share in

Mahindra Tractor with flexible market offering
No. Segment industry

Mahindra Jivo 225 (20 Hp) 2 wheel drive

1 < 20 Hp 3.7%
Mahindra Yuvaraj (15 Hp)

Mahindra Jivo 245 DI (24 Hp) 4 wheel drive

Mahindra 245 Orchard (24 Hp)

2 21 Hp - 30 Hp 5.8%
Mahindra 255 DI Power Plus (25 Hp)

Mahindra 265 DI (30 Hp)

Mahindra Yuvo 275 DI (35 Hp)

Mahindra 265 DI Power Plus (35 Hp)

3 31 Hp - 40 Hp 35.7% Mahindra 275 DI Eco (35 Hp)

Mahindra Yuvo 415 DI (40 Hp)

Mahindra 415 DI (40 Hp)

Mahindra Yuvo 475 DI (42 Hp)

Mahindra Yuvo 575 DI (45 Hp)

4 41 Hp - 50 Hp 47.2%
Mahindra Yuvo 575 DI (45 Hp) 4 wheel drive

Mahindra 585 DI (50 Hp)

Arjun Novo 605 DI - PS (52 Hp)

5 51 Hp - 60 Hp 7.6%
Arjun Novo 605 DI - i (57 Hp)

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 Arjun Novo 605 DI - i (57 Hp) 4 wheel drive

Arjun Novo 605 DI - i (57 Hp) AC cabin

Mahindra Novo 755 DI

7 > 60 Hp
Mahindra Novo 655 DI

As shown in the table above, the products are targeted for the specific horsepower
segment with greater number of products targeting the high growth and high
demand segment of 31 Hp - 50 Hp. Also, discretionary options are provided by
introducing 2 wheel drive, 4 wheel drive and AC cabin options in Mahindra Jivo,
Mahindra Yuvo and Arjun Novo series tractors. Mahindra Jivo series targeting <
20 Hp and 20 Hp - 30 Hp segment, Mahindra Yuvo series targeting 31 Hp - 50 Hp
segments and Arjun Novo series targeting 51 Hp - 60 Hp segments is a very good
example of flexible market offering with discretionary options.

6. Competitive Positioning of Mahindra Tractors - The competitive positioning of

Mahindra tractors is covered in detail in Product Strategy.

7. Product Strategy - Mahindra Product strategy based on 4-Ps is given as follows,

7.1. Product - As mentioned in the segmentation, Mahindra has large number of

products in the horse power range that are most critical for customers. Mahindra
Yuvo series and Mahindra DI tractors are positioned in the 30 Hp - 50 Hp segment
that has maximum demand. There is a flexible market offering with 4 wheel drive
option available in certain products. New Novo tractors 65 Hp and 75 Hp and
MAHINDRA JIVO 245 DI 4WD 21-30 Hp tractors are introduced in the market.
New intelligent (driverless) tractors are being introduced.

7.2. Price - Mahindra offers competitive pricing of the tractor products to stay ahead of
the competition. The comparison of Mahindra tractor pricing and the competitive
pricing is given in the table below.

< 20 Hp 21-40 Hp 41- 50 Hp > 50 Hp

Mahindra ~Rs 2.0 Rs 3.9-6.0 Rs. 5 -7.0 Rs 7.15-17.0

Tractors Lacs Lacs Lacs Lacs

TAFE Not Around 5.5 Rs 6.1 -6.7

> Rs 7.3 Lacs
Tractors available Lacs Lacs

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 John Deere Not Rs 3.0-7.0 Rs. 6.1 -6.9 Rs. 8.0 - 11
Tractors available Lacs Lacs Lacs

*Source: https://commercialvehicleinfo.com/massey-ferguson-tractors-price-list/

As it can be seen from the table above, Mahindra tractors are cheaper in the same
power segment with respect to the competitor tractors giving a competitive
advantage.

7.3. Promotion - Mahindra & Mahindra arranges a variety of different schemes in rural
areas to reach current and new customers. Some of the sales promotions are as
follows,

7.3.1. Company mechanics go around to villages twice a week to provide after –

sales service, an important factor in the decision to purchase consumer
durables.

7.3.2. Samriddhi Centre:The Samriddhi Centres offer farmers a wide range of

agri-related services under one roof. These include insurance products,
sales and service of tractors and implements, productivity demo farms, soil
and water testing facilities, knowledge updates on the weather, crops,
eradication of pests and diseases, mandi prices, etc.

7.3.3. Mahindra organizes Tractor Mahotsav every year. It is a grand mela where
farmers interact with teams, test drive tractors, discuss servicing-related
issues etc.

7.4. Place -

8. Branding and Communication - Product lines are created by companies as a marketing

strategy to capture the sales of consumers who are already buying the brand. Mahindra
has established Yuva and DI series brands well established in the market. Mahindra tends
to offer higher power version or additional options in the same product line to take
advantage of the established brand. Important Mahindra brands are shown below. The
tags are designed to suit the rural customers.

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 In order to retain its top position it has launched ad campaigns using print and visual
medium via newspapers, magazines, television, radio, back and sides of Mahindra
Tractors.It is connected directly with customers on social networking platforms via
Google+, YouTube, LinkedIn, Twitter and Facebook.Brand realizes the power of celebrity
endorsement Mahindra Tractors announces Mahesh Babu as new brand ambassador.
Other branding and communication initiatives include,

8.1. Mahindra Samriddhi India Agri Awards 2019 : Mahindra Samriddhi India Agri
Awards 2019 (MSIAA) received 63,758 nominations from the farmer and non-
farmer category across the country in comparison with 62,916 which were received
last year. Till date, more than 3.8 lakh farmers have participated in the awards.

8.2. Mahindra Kisan Mitra: A site for the Indian farmers to access a wealth of
information which is updated on a daily basis.Farmers can check daily mandi
prices, read weather updates, latest crop advisories, and agri related news.
Farmers can also read and benefit from the success stories of other fellow farmers.
The site also provides information under various other sections such as crop
information, loans, insurance, mandi database, cold storages/warehouses and agri
events.

8.3. Participation to rural welfare activities like, Swasth Tractor Swasth Chalak (healthy
tractor, healthy operator) wherein Mahindra organizes medical camps across the
nation to address the health concerns of farmers. In 2009, the company conducted
2797 camps

9. Distribution Strategy - Effective distribution of products and services is achieved through

being present in almost every state and major agricultural area. The wide distribution
network helps Mahendra gain and maintain the competitive position. The detailed
information on distribution strategy is already mentioned in the section 7.4 Place.

Mahindra has been using its general trade practices by focusing on rural audience and
organizing various initiatives for them. However they are now focusing on the ecommerce part
too . Like providing tractors on rent to an e store to provide the parts needed.

 Mahindra TRRINGO touches lives of India’s farmers by crossing 1 lac hour of work in the
field

 A preferred choice for farmers, TRRINGO successfully drives farm mechanization

 Empowers the farmer to order tractor through its toll free number '1800 266 266 8' or the
website www.trringo.com
 Expands franchisee network to over 100+ hubs across 5 states, tractors made available
in more than 1,000 villages

Mumbai, January 16, 2018: TRRINGO, India's foremost organized rental services for tractors
and agricultural equipment and part of the USD 19 billion Mahindra Group, today announced the

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successful completion of 1 lac hours of farm mechanization rental, post operationalization of the
service in October 2016.

 https://www.m2all.com/ : Website to purchase spare parts online, genuine accessories

for automobiles, tractors etc.

 Mahindra and Mahindra’s Tractors: Some popular Customer Engagement

Strategies in the past .

Sales promotion decisions are crucial for engaging customer and influencing his purchase decision

Mahindra & Mahindra Ltd (M&M), the market leader in the Indian tractor industry delivered its first
premium Arjun International AC Cabin Tractor in Ludhiana. The tractor was delivered at the
customer’s residence with great fanfare. The Arjun International was innovatively delivered in a
delivery van resembling a Gift Box which was then unveiled1. The deliver was made before the
entire village who witnessed the celebration.

Sales promotion decisions involve the issue of directing sales promotions towards consumer sales
or distribution channels (trade sales). Consumer sales promotion is a ‘pull’ strategy, which tries to
attract customers to make purchase through price discounting, free gifts, money refunds, rebates,
consumer contests, trade shows etc.
Trade sales promotion is a ‘push’ strategy to encourage distribution channel members to stock the
product by providing buying allowances, buyback allowances, monetary incentives, and free
merchandize etc.

Arjun Ultra-1 DLX in 2010 in Punjab: An air craft was flown over small towns and villages carrying
the brand message on a banner to make brand owners pride of reaching into skies

Mahindra Tractor Mahotsav every year: Grand mela where farmers interact with teams, test drive
tractors, discuss servicing-related issues etc.
Mileage Se Music Tak in Uttar Pradesh in 2010: Hosting on-ground events such as taking tractors to
high footfall areas and providing farmers a first-hand experience of the tractor and also facilitating
interacting events. The villagers could also request for a song on the radio station Big FM. The on-
ground activation with interactive events and on-air amplification by airing of interactions, song
requests on Saturdays and Sundays during 6-7 pm
Alive a day in the farmer’s life: The promotion of ‘moving the tractor in a village’ went for six weeks
and covered 125 villages. The database of potential customers were collected during interactions
and provided various promotional offers such as finance offers, loan repayment duration, zero
percent interest etc. to induce customers to buy tractors.

Outcome of Promotional Efforts:

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Customers interacted during alive a day in the farmers life campaign for 45 days. 1125 inquiries
generated, 450 hot new prospects identified and 40 orders placed

Sources :

1. http://www.rmai.in/
2. . Gupte Masoom (2013), Being acknowledged before his village is a big deal for the farmer,
Business Standard, September 30, 2013.

10. Conclusions and Recommendations - Key conclusions are as follows,

10.1. Mahindra tractor holds a star position in Indian tractor market. Therefore key
requirement is to hold the position relative to other tractor manufacturers. Also to
lead the new technology innovation in Indian tractor industry primarily suitable for
Indian consumers.

10.2. As reported in Mahindra Annual report 2018-19, competition with foreign

companies with superior technology is likely to require major R&D initiatives and
that can put pressure on the tractor pricing.

10.3 How has Mahindra leveraged its tractors business for the agri business?

Our top 150 dealers in India serve today as our service centres as well. We sell our agri inputs
via these service centres. Through some of these centres we are also facilitating buybacks, that is,
buying products confirming to our set standards at a fixed price. The biggest strength we have
are the three million Mahindra and Swaraj tractor owners in India. Our ability to connect with
these farmers is very high. We use this database to connect with them for all our agri products as
well as use it for sourcing.

We also need on-ground facilities like pack houses, ripening centres, cold storage etc. In some
cases, our dealers are willing to diversify. There are several opportunities to leverage the existing
eco-system.

Source : Interview with Chief Executive, Auto & Farm Strategy, Agri and Allied Business,
Mahindra & Mahindra

11. References -
1. Mahindra and Mahindra Annual Report Year 2018-19
2. Escort Tractors Annual Report Year 2018-19
3. VST Tractors Annual Report Year 2018-19

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