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Distribution network analysis for marketing of fertilizer in West Bengal Existing Distribution Network The company in question is having its 68 dealers and 8 C&F agents in 7 Districts namely, Uttar Dinajpur, Malda, Murshidabad, Nadia, Burbwan, Hoogli, Midnapur and Calcutta (but Calcutta is not an Agricultural districts). District-wise distribution of existing dealers and C&F agents in West Bengal shown in Map-1. The total fertiliser consumption of districts under company’s dealer network, is 690970 Mt which is 56% of West Bengal’s total Consumption. But these dealers are supposed to cater to all west Bengal although they are situated only in the 8 districts as per Map 1. From the above map it is evident that all the Distributors are clustered in a very limited area without any logic. Interestingly the selection of the dealers was made in traditionally agriculturally strong districts, on the basis of the traditional businessmen near district head quarter with strong financial capability not on the basis of covering the total market or on the basis of customer spread and covering the total market. The company’s marketing team and field stuff is covering the whole state without much supply support or material availability across the state.  Map 2 Analysis of the Distribution Network Now when we see the distribution of actual consumer i.e. the distribution of cultivators in these 8 districts more than 3.5 million cultivators are staying in these districts, which is 59% of the total cultivators of West Bengal. If we take the gross crop area, nearly 59% of the Gross Crop area comes under these districts with dealer network. That means their total network is covering nearly 56% of the total consumption, 59% of the area where the fertiliser are used and 59% of the customer are covered. Undoubtedly these are strong hold of traditional fertiliser companies present in West Bengal since last 3 Decades. A detail comparison is required to find out the effectiveness of the dealer network with the market potential. Company’s district-wise dealer network against their sales of Urea & Pesticide is shown in table-2. As far as their Urea and Pesticide sales are concerned, in both the product segments they are weak in Burdwan, Hoogli and Midnapur districts although all these three districts are strong in agriculture. Consumption of fertiliser in these three districts is more than 30% of the total West Bengal consumption (refer map-2 and table –1). It is also interesting to note that number of dealers chosen in all these districts are not related to the size of the districts (refer Map-1) or potential of the districts. Moreover, we are assuming that the existing dealers are covering one entire district, but in reality the scenario is different from district to district. In many districts dealers locations are closely clustered. In Map-2 the Distribution Network is present on actual fertiliser consumption thematic map, which shows market gaps as well as over crowding nature of the Network on district level consumption.
The net result is in one hand large area is uncovered and on the other hand competition among company’s own dealers. From 1992 onwards the company is facing severe competition for DAP and MOP and other plant nutrient products apart from their Pesticide products, matching Urea target is also becoming challenging. Breaking the district market in to subdivision level gives better understanding of the market and helps to identify the best-suited dealer location. There are 48 Subdivisions out of which only in 18 subdivisions the company’s dealers are present. Again in these 18 subdivisions, few subdivision like Burdwan Sadar and Malda sadar have as high as five locations covered by their dealers. The main problem is the absence of fertiliser consumption data in subdivision level or block level. But with other subdivision level data like cropping pattern, irrigation and demography helped us to by pass this problem. If we calculate the subdivision level fertiliser consumption as proportional to their area of respective district’s consumption against area, the total consumption in these 18 subdivisions works out to 540,233 MT, which is 44% of the total consumption of West Bengal. |