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Distribution network analysis for marketing of fertilizer in West Bengal  Sujit Choudhury Direcor, PAN Network Pvt. Ltd. Calcutta minerva@cal3.vsnl.net.in Fertiliser Market in the country Fertiliser market is a typical example of exploitation of potential of rural Market. Marketing of Fertiliser was highly controlled by Govt. regulations in India. Both Essential Commodities Act (ECA) and Fertiliser Control Order (FCO) govern fertilisers. Under these acts fertilisers have to be marketed only on Generic Name and not by any trade or Brand Name. What the companies normally do is to add their company name with Generic name like Mangala Urea (Mangalore Chemicals and Fertilisers Ltd.) SPIC Urea (Southern Petrochemical Industries Corporation Ltd.). In addition they add a symbol or logo so that rural consumers can recognize the brand. Since 1991-92, the fertiliser market has undergone a phenomenal change with Govt. decision to slowly phase out the Rs.5000 Cr. subsidy given to fertiliser and decontrol it. Though nitrogen fertiliser is under total control and priced, the prices of phosphatic and potassic fertilisers have gone up substantially due to decontrol. This has pinched many manufacturers and sales have come down. From the past experience this phenomena can be interpreted as temporary and one can hope that demand will pick up in future. The prices of agricultural products have also undergone upward revision in relation to input cost of cultivation. This is expected to offset an increase in fertiliser price. Decontrol opens competition, as all the regional markets are accessible to all manufacturers. It is likely that fertiliser Industry will be decontrolled fully in near future. The manufacturers and their marketing team have to prepare themselves for such an eventuality when 4 ‘P’s namely Product, Price, Place (Distribution) & Promotion of marketing mix will be in their total control. At present not much maneuverability is possible for the marketers in Product Mix, Price and Distribution at State level but in Promotion certain flexibility exists. Slowly the scenario is changing, some of the manufacturers supply the three nutrients in a proportion that is required by certain types of soils or crops or regions like paddy mixture or sugarcane Mixture. Some of them add certain amount of trace elements like Sulfur to this mixture. In addition, some companies manufacture granulated fertilisers or fertilisers coated with neem which release the nutrients slowly for long lasting action .But in future, depending on soil type and crop requirement, the product has to be designed. Prices are slowly decontrolled by the Government including the margins for channel members and the companies may offer to their dealers volume discounts or off-season discounts at the most. In distribution again, the government policies dictate the type, quantum and the area for distribution for each manufacturer. Therefore, the manufacturers do not have much say in distribution of urea. But for other fertilisers the control is going out slowly and most fertiliser manufacturers use their distribution networks to reach the fertilisers to end-users. Traditionally, the Cooperatives and Agro-Industries Corporations played significant role but from 90s onward private trade has taken to the fertiliser distribution in a big way because of attractive margins. A few manufacturers have their own retail outlets also. Sometimes the retailers pass on fractions of their margins to the farmers. In this scenario, the manufacturers have to think and evolve innovative marketing strategies. It may not be wishful thinking once the fertiliser industry gets completely decontrolled in the near future then all the elements of marketing mix will be under the control of the manufacturers and marketing men, which would necessitate evolution of appropriate strategies. To develop an effective and meaningful marketing strategy in this vast and highly inhomogeneous market, use of GIS tools will be inevitable not only for distribution network analysis but also for total market analysis. The present analysis is based on the Dealer Network in West Bengal, the State of one of the largest fertiliser companies in India. In West Bengal their presence is relatively new and they sale nearly 10-15 % of the Urea Consumption of West Bengal. Methodology A detailed discussion with company’s marketing team coupled with spatial and attribute data enabled us to simulate the market in GIS for identification of the most suited distribution Network. District and subdivision level digitized map with various layers such as National Highway, Main Road, other road, Rail, District headquarters, Main towns and other towns with subdivision level external database of Demography and agriculture like fertiliser consumption, Net area under cultivation, area with various main crops data are used in MapInfo package. The said company’s Distribution Network location has been created on a separate layer on the basis of their location. The analysis has been made with continuous interaction with marketing personnel to cover the ground reality from their experience. At the time of final selection the location of a town preference is judged on center of gravity basis and its accessibility to the local farmers. This Center of Gravity simulation and accessibility feature matched well in the MapInfo package.
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