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Mahindra Samriddhi: Achieving Growth through Rural Prosperity*

CASE STUDY, MARKETING MANAGEMENT
ET Cases - GSMC, 11 Pages

Case Preview

Mahindra Samriddhi: Achieving Growth through Rural Prosperity

 

Rural markets in India have been recognized as growth opportunities for most businesses. The Tata Strategic Management Group team reported that with 69% of Indian population living in rural areas, rural markets represent a market opportunity that organisations cannot afford to overlook, especially considering that the rural  consumption in value terms has grown at 17.2 % p.a. between 2008 and 2010 and that close to one third of FMCG and consumer durable sales come from rural  markets [1] Further, between the years, 2009 and 2012, rural India spending reached $69 billion, compared to $55 billion urban market spending [2]. The Accenture  (2013) report states that rural growth has exceeded company expectations, and if companies wish to succeed in this growth area, they need to establish effective sales and distribution in rural areas and with intensification of competition, companies would need to devise innovative strategies that shall not only fulfill the needs of the rural customers, but also build scale through mutually beneficial relationships with rural communities with collaboration being recognized as the key driver for growth in rural markets [3].

The Mahindra Group, a major Indian conglomerate, has been an integral part of the rural market space through its flagship company-Mahindra& Mahindra,  manufacturing and supplying Mahindra tractors, since the early 1960s. In recent years, Mahindra & Mahindra has been intensifying its agribusiness in rural markets, by enhancing farm productivity and revenues of farmers........................

Teaching Note Preview

Mahindra Samriddhi: Achieving Growth through Rural Prosperity

 

Synopsis

Mahindra and Mahindra recently began converting its Mahindra Tractors dealers into Samriddhi Centres: retail outlets for Mahindra’s agricultural products and  services. The Samriddhi initiative is a part of Mahindra Farm equipment division, world’s largest tractor company by sales volume and aims at promoting farm  productivity thereby promoting farmer’s prosperity, hence, the name Samriddhi, a Hindi term, meaning prosperity. At a Samriddhi centre, farmers are provided with farming solutions including soil and irrigation water testing facilities, technology interface through the internet, productivity demo farms, agri counseling facilities, finance & insurance products, sale of second hand tractors, micro-irrigation products, seeds & crop care products.

Mahindra has been into the agriculture business for many years, mainly through its well-known Mahindra tractors. The Mahindra tractor has evolved as a value for money, trust worthy brand that enjoys strong relationships with farmers, having owned by generations of the farmer. Mahindra increased its focus on agriculture business through the launch of Mahindra Shubhlabh Services Ltd. in 2000 for supply of ari-inputs, while in 2011, Mahindra acquired EPC Industries, for the supply of microirrigation tools.

MSSL is a provider of high yield seeds; crop care solutions such as insecticides, pesticides, herbicides, nutrients which were distributed through a large  network of distributors along with company sales representations. Apart from agri-inputs, MSSL also partnered with farmers through contract farming to procure and supply fresh farm produce, especially fruits, which Mahindra supplies to large domestic customers as well as exports to a number of countries. ......

Expected Learning Outcomes

The case helps in the attaining of the following learning outcomes:

  • • Appraise factors required for successful marketing of Agri inputs in rural markets which include tractors, farm mechanisation equipment and other agri-inputs such as crop care solutions, which would need an understanding of the following specifics stemming from the case:
  • • Factors affecting farmer purchase decisions: identify means of building relationship with farmers
  • • Need of guidance and advisory support services to build farmer awareness , which then aid in the purchase decision of the agri-input products: Understand the role of training and improving farmer productivity which in turn lead to building of trust and long term relationship, hence loyalty towards rural marketer.
  • • ..................................................

 

Case Positioning and Setting

The case may be discussed in a general Marketing Strategies course in Semester 2 or in an elective course in Marketing, such as Rural Marketing [both in  Semester II or Trimesters V/VI in case trimester system followed]. The case primarily strives for students of Marketing, especially in the course of Rural  Marketing to gain insights into how a company can build rural distribution strategy, especially for agri-inputs.

Assignment Questions

  • I. What factors are needed to succeed in the Agri-input business in rural markets in India?
  • II. What factors led to Mahindra starting the Samriddhi initiative? [Alternatively: Q. Do you think the decision to convert Mahindra Tractor dealers to Samriddhi centers makes sense-why/why not? Could Mahindra have begun marketing its agri-inputs through another distribution mechanism?
  • III. ...................................

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Product code: MKTG-1-0041, MKTG-1-0041A

Abstract

The case study provides details of Mahindra Samriddhi, an initiative of the Mahindra Group through which it leverages its linkages with rural India and agriculture built over six decades of providing vehicles for rural and semi-urban India.

An offshoot of Mahindra Farm Equipment Division, Mahindra Samriddhi offers a range of products and services which includes crop care solutions, high yield seeds, services such as soil testing, agri-counselling, agri-clinics, advisory services, mehanisation and irrigation solutions to raise the productivity and prosperity of the farmer. The initiative has also led Mahindra to build a market for delivering fresh product to major domestic and international retailers through a system whereby the organization works together with the farmers in ensuring high quality produce, thus benefiting its own fresh produce business and well as helping farmers achieve higher and better returns.

By building long term relationships with farmers through the provision of its expertise in agriculture built over years in the field, the case illustrates how Mahindra has enhanced its markets in and beyond rural markets. Similar to initiatives by other marketing organizations such as ITC and Tata Chemicals, the case helps reiterate, that to win in rural India, marketers need to build relationships and aim to raise the prosperity of the rural Indian: this helps in building and furthering inroads into rural India and holds promise for the future prosperity of the organization as well.



Pedagogical Objective
The case study provides details of a company’s efforts in building strong, mutually beneficial relationships with rural customers through its rural distribution strategy for marketing of agriinputs- it helps build on the understanding and development of marketing strategies through a distribution model that allows the development of long term relationship with the primary customers of agri-inputs in rural markets: the farmers.



Case Positioning and Setting
Marketing, Marketing Strategies, Rural Marketing, Distribution, Marketing of Agri Inputs

* GSMC 2014, IIM Raipur

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