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Sonalika Rotavator– The Road Ahead*

CASE STUDY, MARKETING MANAGEMENT
ET Cases - GSMC, 9 Pages
AUTHOR(S) : Mithilesh Pandey (Assistant Professor), Dr. Rajesh Verma (Professor), and Kangna Chhabra (Research Scholar) - Lovely Professional University, Punjab

Case Preview

Sonalika Rotavator– The Road Ahead

 

In the post-green revolution period, farm mechanization has been regarded as one the major reasons that helped reduce the human labor and enhance the agricultural productivity. The impact of farm mechanization in general and Tractor-mounted rotavators in specific for agricultural productivity has been well-recognized in India. The  level of mechanization in agriculture in India is low as compared to other agriculture-based countries which provides an opportunity to many companies to enter this industry.

Agriculture Scenario

Agriculture is the base of Indian economy and Punjab being prominent in this field has contributed to the Indian agricultural produce more than any other state. The infrastructural developments and residential requirements of the ever growing population in India have decreased the cultivated land over the recent years. Punjab is no different, as in the recent time per hectare of cultivated land is decreasing and due to this there is increase in demand of agriculture equipment which can increase the agriculture productivity so that the level of agricultural output is maintained. The net area sown had decreased from 4187 hectares in year 2007-08 to 4158 hectares in year 2010-11. The gross cropped area was 7882hectares in year 2010-11 (Exhibit I).In 2007-08 the gross area was 7870000 hectares while irrigated area was 7689300 hectares which was 97.7% and it had shown minor increase of 0.3% till 2010-11 making it 98% (Exhibit II).......................

Government Support

To promote agriculture, Government provides major support to the agro industries for the new technology products. The government provides support by granting subsidies to the farmers growing products on which there is less awareness.

“The subsidies are provided on the basis of width or size of the product (size of Rotavator). The current subsidy flat 50% (INR 30000 per machinery, irrespective of the size of the Rotavator. In 2002 subsidy scheme was launched which was not adopted by the farmers instantly...........

Agro Industry

The agriculture machinery and implements in Punjab have been growing at large scale in the past few years.

Agriculture Equipment

The agricultural machinery and implements that are made use at large scale in Punjab and most common is tractor, known to everyone. The data states that tractor machinery had considerable rise in number from 420000 in year 2007-08 to 434000 in year 2010-11...............

Rotavator

Rotavator, is an alternative name for a rotary tiller, a machine for digging earth. A rotavator is used in the fields. The purpose of a Rotavator is to break up the soil so that planting (either of crops or plants, mostly seeds) can take place. They do not dig deep into the soil, but turn the soil up to about 9" in depth, although the depth will depend largely on the size of the machine..............

Major Players

There are many players in the agro industry market and also in rotavators segment:

Shaktiman: The company Tirth Agro technology Pvt. Ltd., based at Rajkot, Gujarat in western part of India from last 10 yrs, is an ISO 9001:2008 recognized company incepted in 1997. They manufacture CE certified agricultural implements and genuine parts for such implements under the brand....................

Sonalika Group Profile

Sonalika group is one of the top automobiles & agricultural machinery manufacturer in India. Apart from tractors its product line includes multi-utility, vehicles, engines and various farm equipments and implements. Established in 1969, Sonalika group since its inception has tried to understand customers need to be able to facilitate them with its value for money products............

Company History and Background

The word “Sonalika” derived from combination of Sona&Lika which “Gold lines’ as it bring prosperity to its user.

The Sonalika agro industries corporation was started in 1969. The company started with agriculture implements and later on after succeeding in this, Sonalika came up with..........

CSR Activities of Sonalika

Sonalika Group not only produces world class tractors and farm equipment, it is also committed to promote best environment protection practices as part of Corporate Social Responsibility (CSR).The endeavors of Sonalika are not limited to any industrial brackets but being a social identity it is also concerned for the welfare of the society it operates in. The company implies all the CSR regulations. The major CSR activities of Sonalika are.........

Sonalika Rotavator – The Inception

The Sonalika is an established brand in itself and the journey begun with agro equipment in 1969 and it later on lead to manufacturing Rotavator under the brand name ‘Sonalika’ Rotavator in year 2008. The start of Rotavator was due to increase in demand of reliable...........

Business Environment

Business environment refers to different forces or surroundings that affect business operations. Such forces include customers, competitors, suppliers, distributors, industry trends, substitutes, regulations, government activities, the economy, demographics and social and cultural factors.........

Quality Control

The Sonalika Rotavator complies itself with quality control measures. It is certified by ISO 9000:2008; ISO 14001:2004 and ISO TS: 16946 and RWD compliance. All the models are tested and approved by.............

Work Culture

The company has employees who joined it since the start of the unit, which is a n excellent example of good work culture. Happy employees are the productive employees and the Rotavator Company emphasizes its employees’ happiness and satisfaction. The HR management of the company holds grievance handling sessions and listens to the problems of the employees.............

Expansion Plans

The Sonalika Rotavator unit aimed at manufacturing 50,000 Rotavator in the financial year 2013-2014 & achieved the assigned target. In the new plant, the modern technology has been used. The agro equipment of Sonalika is also used internationally and the company is planning for robotic building too. The unit will
be fully equipped with robotics technology in near future............

Exhibits

Exhibit I: Land Use Pattern in Punjab

Exhibit II: Gross Cropped Area

Exhibit III: Land use (Per ha) for Major Crops in Punjab

Exhibit IV (A): Demand of Agricultural Labor (2007-2011)

Exhibit IV (B): Agricultural Index Numbers in Punjab

Exhibit V: Area, Production and Yield of Major Crops

Exhibit VI: Activities Performed for Awareness

Exhibit VII: Agricultural Machinery and Implements in Punjab

Exhibit VIII: Rotavator Growth in Punjab

Exhibit IX: Specifications of Rotavator of different models are popular in India

Teaching Note Preview

Sonalika Rotavator– The Road Ahead

 

Synopsis

Sonalika Rotavator, a division of Sonalika Agro Industries Corporation in Punjab was established in year 2000.The company is situated in Dashmesh Nagar,  Hoshiarpur city, Punjab. The company division covers approx. 10 acres area of land. Rotavator is a machine with rotating blades for breaking up or tilling the soil. It is the equipment used by the farmers in sowing the crops. The Sonalika Rotavator Company has typical organizational structure with different departments like sales department, production department, marketing department, accounts department, human resource department and research and development department and all the departments are under the supervision of Business head Mr. Rajesh Thakur. Adjoining to the departments, the production unit gets operated in a very systematic way. The company owns huge production unit, which is in operation since year 2008. The company has set up its new plant in Nasrala village, 6 kms from Hoshiarpur with the expenditure of approx.50 crore rupees. The company is currently in process of shifting the departments from its old unit to its new unit in Nasrala. The reason of new plant set up is mainly business growth and expansion plan. The company gets its raw material of Rotavator through the local  companies in India. It does not import any kind of raw material or spare parts from outside.

Pedagogical Objectives

The case study can be effectively taught to Post Graduate courses or executives at levels such as Introductory Marketing, Rural Marketing and Strategic Marketing.

Specific objectives include:

  • • To make students understand the 4A’s of rural marketing.
  • • To illustrate the importance of promotional strategies in rural markets.
  • • To make students understand the product development specified to rural areas.
  • • To make students understand the importance of diversified products.
  • • To make students understand the importance of brand extension.

 

Assignment Questions

  • I. What can Sonalika do for further penetration into rotavator market?
  • II. Why Sonalika started Rotavator, and why they started so late?
  • III. What kind of expansion strategy should Sonalika keep in future?
  • IV..............................................

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Abstract

Agriculture continues to be the backbone of the economy of the Punjab State also known as ‘Food Basket’ of the country. The future growth of the sector and state will largely depend upon public policies supported by the developments and use of technology including farm machinery. To facilitate persistence of green revolution and support the Indian farmers with mechanization technology, Sonalika Group (Sonalika) a renowned name and one of the top three tractor selling companies in India, established Sonalika Agro Industries Corporation to diversify into farm equipment manufacturing.

In year 2008, Sonalika extended the brand name to rotavators and today has a wide range of products in terms of price and sizes of the rotavators. The sale of rotavator depends heavily on external environment factors such as season, government subsidies, agricultural scenario, migrant labors, etc.

As a part of Sonalika’s expansion plan and also due to intense competition from other established players recently the company decided to extend its capacity of rotavator production and is in the process of setting up of a new plant. The case study focuses on the expansion and diversification strategies of Sonalika and will also highlight the challenges of rural Marketing in terms of 4A’s (Awareness, Availability, Acceptability & Affordability).

The case study has been prepared with the help of extensive interviewing and observation of officials of Sonalika, Agricultural department officials, Rotavator dealers and Farmers.



Pedagogical Objectives

  • To assess the effective use of 4A’s of rural marketing to penetrate in rural market
  • To discuss Sonalika’s product diversification strategy for competitive advantage in agricultural equipment market
  • To discuss the new product development and brand extension strategies adopted by Sonalika

Case Positioning and Setting
The case study can be effectively taught to Post Graduate courses or executives at levels such as Introductory Marketing, Rural Marketing and Strategic Marketing.

* GSMC 2014, IIM Raipur

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