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Distribution network analysis for marketing of fertilizer in West Bengal


The company is selling average 13% of the total urea consumption of West Bengal and for other products their market share is less than 10%. When their main goal is market expansion then interestingly their own dealers are competing with each other in the limited market area of 7 districts /18 subdivisions.


Map 3


The recommended Network
In reality any district or subdivision does not restrict dealer’s domain of sales. Inter district sales are common phenomena here. At the same time their locations nearer to the consumers i.e. cultivators are essential to enhance the total sales. Therefore, identification of the proper sales-points across the state covering more than 90% of the cultivators and the gross crop area in more cost-effective way is most important.

To cover the total present and future market identification of the potential subdivision is necessary. With the help of subdivision wise data of cultivators number, total khariff (sown in monsoon) paddy and jute area as representative of kharif crop area, Total area of Potato and winter paddy as representative of Rabi(sown in autumn/winter) Crop area and total irrigated area subdivision wise are used in this study. Separate weighted averages have been given to these factors on the basis of their respective importance.

On the basis of above factors and their weighted averages a fertiliser sales potential index has been created, thematic map has been created (refer map-3). This has helped the market potential segmentation to be viewed on geography to make market segmentation more meaningful to the company.

On the basis of this potential map the location of New Dealer network has been established.

In the above Thematic Map-3 the ranges was created on the standard deviation method on the potential index data. Apparently Purulia and Malda seem to be very potential although the people associated with West Bengal Agriculture know they are not. But it has been done on the basis that these districts potential is judged alongside the Subdivisions of other districts. That means, for Purulia and Malda the Cumulative figures of above factors were taken unlike other districts.

The ideal location for a dealer in subdivision will be the centroid of that subdivision polygon, ideally the same is the center of gravity of that market. But there may not be any locality on the centroid. Therefore, the location has been chosen on the basis that the nearest town to centroid which is well connected by road and/or rail and a market place for that area. But in certain subdivisions, considering other factors like forests or closeness of the existing network area, the selection cannot be near the centroid at all. In this process 18 new locations have been recommended where immediate dealers are required to cover the potential fertiliser market of that subdivision. These locations are shown on the backdrop of their potential market (refer map-3). The subdivisions with less than 23-index point are not considered.

In this new dealer network the reorganisation of the C&F Agent has become essential. Considering the potential and the recommended dealer network the C&F agent location has to be changed for logistic support to the new network. In this scenario we recommended to change C&F agent at Islampur and select a new C&F agent at Siliguri.

After the detailed study the marketing professional of various companies have been consulted to find out from their field experience in West Bengal about the suitableness of these locations. The response is highly encouraging. When we are looking at their present network in the backdrop of this study, it is realized that restructuring of the present network is also essential. Instead of fighting on a limited market created by traditional mindset, the market opportunity can be exploited more effectively not only for present market but also for the future which are to be done slowly.

In rural marketing the use of Business Geographics will provide a very important tool to the marketers in India.

Bibliography
  • Rural Marketing, Enviorenment, Problems and strategies by T P Gopalaswamy
  • Statistical Abstract by Bureau of Applied Economics & Statistics Government of West Bengal
  • Annual Review of Fertiliser Production and consumption by Fertiliser Association of India.
  • District Statistical Handbooks by Bureau of Applied Economics & Statistics Government of West Bengal
  • Fertiliser and Agriculture Statistics, Eastern Region by the Fertiliser Association of India.
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