Gurpreet Guru

7/30/2019 Gurpreet Guru

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TO STUDY THE IMPACT OF TRACTOR DEALER INFRASTRUCTURE AND

ITS EFFECTS ON SALES

Submitted in

partial fulfilment for the award of the degree of

Master of Business Administration

Punjabi University Patiala

(2011-13)

Submitted to: Submitted by:

Dr.SIMRANJIT KAUR GURPREET SINGH

ROLL NO.

______________________________________________________________________

CORDIA INSTITUTE OF BUSIESS MANAGEMENT SANGHOL


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ACKNOWLEDGEMENT

Success comes to those who strive for it. To achieve ones goal, one puts in lot of

hard work and efficiency. Unless you venture into real world you never know how lame

and in fecund your efforts could without help of various and how tough the real world

environment is. And even tougher work is enumerating and enlisting all the individuals

whose contribution went into the making of this project.

I take this opportunity to express my profound sense of gratitude to the support

given to me by Mahindra & Mahindra ltd ( Swaraj Division ), Mohali. At the outset I

would like to thankMr Varinder Gupta ( Deputy Manager IB ) for his guidance

throughout the project with his suggestions.

I owe my regards to the entire faculty of CORDIA INSTITUTE OF

BUSINESS MANAGEMENT SANGHOL from where I have learnt the basics of

Management

Date : Signature

Mohali

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PREFACE

Learning lessons and sitting in the classroom is not a difficult thing to do.

The difficulty comes in when it is time to put into practice all that a person has learnt inyears of education. When all the individuals leave the college to go out and face the

world, it is the most difficult & challenging phase of his life. It becomes easier for him if

he gets a little taste of what, he expects before he is actually in that situation. The six

week summer internship intends to do exactly that.A student is made to work in the exact environment that he would be required to work in

when he actually starts working. This is an excellent experience for the students. It also

help in the overall personality development of an individual.

Mahindra & Mahindra LTD (Swaraj Division) has provided me with very comfortable

working environment and an excellent project to work on. . It has bee taken care that thisdocument elicits the infrastructure effect in a lucid and an understandable manner. The

contents have been divided into segments called chapters, all of which has been explained

in detail in the following pages. This report presents before you a brief description of mywork during my training at Swaraj division over last six weeks. It is the summary of

project being developed by me at Swaraj Tractor Division.

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CONTENTS

Chapter 1. Overview of the Tractor Industry 5

Chapter 2. Company Profile 12

Chapter3. Objectives of the Study 29

Chapter 4. Research Methodology 31

Chapter 5. Data Analysis & Interpretation 39

Chapter 6. Findings of the Study

Chapter7. Limitations of the Study

Chapter 8. Conclusion & Recommendations

Chapter 9. Future Research

Chapter 10. References

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CHAPTER ONE

OVERVIEW OF INDIAN TRACTOR INDUSTRY

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INTRODUCTION

India being a predominately agriculture country, where agriculture is the life and blood of

the economy, has been a traditional manufacturer of different type of farm machinery and

implements. However, the use of advanced agricultural techniques in india stared only in

early 60s. Modernization and tractorization in Indian agricultural is only a post

independence phenomenon. One of the achievements of green revolution has been that

the farmers increasingly realised the advantage of tractorization. This would happen only

because of awareness of new farm technology among the farmers, rise in the level of their

income an education.

The biological source of energy especially bullocks, could not cope

with the requirements of the changed situation therefore, introduction of tractors got

accelerated in several agriculturally advanced states of country like Punjab, Harayana,

Maharashtra, etc. tractors were introduce to Indian agriculture in early 20s. The demand

of tractors rose sharply in last two decades. However, the rate of adaptation of tractors in

diff. Part of country Punjab occupies no.1 rank in this regard. Punjab possess only 1.5 %

of the geographical area of the country; the density of 85 tractors per hectare in Punjab is

the highest as compared to national average of 10.5 tractors per hectare.

India is primarily an agrarian nation , with more than 50% of our

GDP being contributed directly or indirectly by agriculture. No wonder India is

considered the largest tractor market in the world. But in terns of total tractor in use in

the country , we are ranked 8th. In terms of penetration , India has 10.5 tractors per

thousand hectare of gross cropped area(GCA)as compared to the international average

close to 30 tractors per thousand hectare of GCA

Figuratively speaking, Indias largest GCA is next only to the big two USA and Russia.

That and the highly fragmented land holding in india have helped our country to become

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the largest tractor market in the world. Thus the indian tractor market has to be only after

considering its position in the world

Description Units World total India Indias rank

Arable land Million hectare 1,444 170 2

Irrigated area Million hectare 249.6 45.8 2

Tractors in use Tractor/1000

hectare

28 10.5 8

Despite a phenomenal increase in tractors population in the country, the tractor density is

very low at about 10.5 tractor per thousand hectare of GCA in comparison to the

international of about 28 tractors . also , the small size of land holding in India have led

to low average of tractor at 35 horse power , which is far low then the global average of

above 80 HP

Easy availability of bank finance coupled with the

declining interest rate has propelled the demand for tractors. Furthermore, a good

monsoon a strong growth in agricultural production and an increase in the irrigated area

rate expected to lead to a long term growth of 7 to 8 % .

There has been a boom in the tractor industry since

1997. The sales of tractors are not evenly distributed. they are mainly concentrated in the

north and north west were Punjab, Harayana and UP account for mainly 50% of the

tractor sales. Punjab alone accounts for 26%.the main reason is comparatively larger land

holdings and the affluence farmers in these states .new market like MP, Tamil Naidu,

Andhra Pradesh, Maharastra and Gujarat are also growing at fast pac

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CRITICAL PARAMETERS FOR GROWTH OF TRACTOR INDUSTRY

AGRICULTURAL CREDIT

Nearly 90-95% tractors are purchased with the help of bank credit. It plays an

important role in determining the demand for tractors.

PRICING OF TRACTORS.

The financial inability of the Indian farmers makes the pricing a critical parameter.

Companies that managed to keep their costs low are the ones that managed to

survive during the reversionary period.

MONSOONS AND CROP PRICES.

The farmers have to pay say 15% of the total price of the tractor, in cash, at the

booking stage; Consequently, if the farmer is faced with bad monsoons and low crop

prices, he will not be able to make the initial down payments.

GOVERNMENT POLICIES

To enable a farmer to purchase a tractor against these odds, the government

introduced subsidies in this sector. During the union budget of 1994-95 the

government exempted excise on small HP tractor I. e. below 1800 cc. In the budget

of 2004 all the tractors were exempted from excise duty.

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IMPORTS

The industry has managed to reduce its dependence on imports, as many players

have indigenised their inputs, which were earlier Imported.

PRIORITY TO RESEARDCH & DEVELOPMENT

Even though all tractor-manufacturing units, except the Swaraj, were initially set up

with foreign collaboration, tractor industry has been on its own for the last decade.

Al tractors have been nearly 100% indigenous and almost all product improvement

and new products have come through indigenous Research and Development

(R&D). Capital R & D investment by industry today exceeds Rs. 22 crores and the

recurring annual expenditure is at the level of Rs. 7 crores. Emphasis on R & D is in

the steady increase in the number and price range of competing models available to

customers to choose from.

Reflection of emphasis on R & .D in the line with national priorities is the steady

improvement in the Fuel efficiency ensured on the basis of the average of fuel

efficiency figures of tractors in different power ranges during mandatory tests at

Government of Indias Testing Station at Bundi in Madhya Pradesh.

WIDENING RANGE FOR CUSTOMER CHOICE

Intense competition in tractor industry all through the last 44 years, has naturally ledto a steady increase in the variety of models for farmers to choose from. Industry

today offers 43 models, and special variants to suit regional needs and special usage

are often available in many models. Tractors offered cover a horsepower range from

15-60 and prices cover the entire spectrum from Rs. 1,00,000 to Rs. 4.5 lacs per

tractors.

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EMERGING MARKETS

In the total mature markets, which include Punjab, Haryana and U.P., sales

proportion has fallen from 55.4% in FY 93 to 37.8% in FY 97. With sales in these

markets plateauing, tractor manufacturers are now zeroing in on the central and

Southern markets in the country. These are the areas with enormous potential and

are called emerging markets. The share of these emerging markets like Madhya

Pradesh, Maharashtra, Gujarat, Tamil Nadu, Karnataka, Andhra Pradesh and

Rajasthan has increased from 41% in 1992-93 to 55.9% in 1996-97. Among these

markets, states like Madhya Pradesh, Andhra Pradesh and Maharashtra have the

highest growth. Some of the tractor manufacturers have entered the exports area; M

& M has increased exports from 132 tractors in 1993-94 to 1853 in 2002-03.

Emerging export markets potential are America, Nepal, Sri Lanka, Malaysia and

Bangladesh.

In order to be competitive, the players in Indian Tractor Industry will have to reset to

manufacturing after cutting out many of the frills in their lower HP tractors.

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CHAPTER TWO

COMPANY PROFILE

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HISTORY OF THE COMPANY

In 1965, Government of India research institute Central

Mechanical Engineering Research Institute, Durgapur, WB initiated design and

development of Swaraj Tractor based on indigenous know how. In 1970, PunjabGovernment acquired the Swaraj tractor's design and established Punjab Tractors Limited

(PTL). It was India's first large-scale totally indigenous project. The company exports

Tractors to various countries including USA. It manufacturers nine models of tractor and

several models of combine harvesters. The manufacturing units are located at SAS Nagar,Asron Village of Nawanshahar District and Nabha of Patiala District, Punjab.

Actis, a private equity firm acquired 29 per cent of Punjab Tractors in mid-2003 from the

Punjab Government. In March 2007, and currently subject to the receipt of requisiteapprovals, M&M bought a controlling 43 per cent stake in Punjab Tractors Ltd. that will

reportedly increase M&M's share in the domestic tractor market from just over 30 percent to nearly 40 per cent. The 43 per cent stake in Punjab Tractors includes the 29 per

cent owned by Actis and 14.2 per cent by the Delhi-based Burman family. In July 2007,

Mahindra upped its share in Punjab to 64.6%.

COMPANY

Punjab tractor limited was established in the year 1970 between 1971-73PTL setup Swaraj project for 5000 tractor per annum at a capital outlay of Rs.37.0

million . The equity base was Rs.11.0 million . In 1974 Swaraj 724 (26.5 hp) tractor was

commercially introduced. Its second tractor model , SWARAJ 735(39 hp) was developedits own R & D .

Today PTL has four operating division with 2202 employees. It has 443 dealers

networks and 281 ancillary base. In the year 2002 the cumulative tractor sales of thecompany crossed 5,00,000 mark.

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BOARD OF DIRECTORS

The Company's current Board of Directors is as follows:

NAME DESIGNATION

1. Mr. Keshub Mahindra Chairman

2. Mr. Anand G. Mahindra Vice Chairman and Managing

Director

3. Deepak Shantilal Parekh Director

4. Nadir Burjorji Godrej Director

5. M. M. Murugappan Director

6. Bharat Narotam Doshi Executive Director & Group Chief

Financial Officer (Group CFO)

7. Arun Kumar Nanda Executive Director & Secretary

8. Narayanan Vaghul Director

9. Dr. Ashok Sekhar Ganguly Director

10. R. K. Kulkarni Director

11. Anupam Pradip Puri Director

12. Thomas Mathew T. Nominee of LIC

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http://www.mahindra.com/OurGroup/management_bod.html#kushubmahindrahttp://www.mahindra.com/OurGroup/management_bod.html#anandmahindrahttp://www.mahindra.com/OurGroup/management_bod.html#deepakparekhhttp://www.mahindra.com/OurGroup/management_bod.html#nadirgodrejhttp://www.mahindra.com/OurGroup/management_bod.html#mmmurugappanhttp://www.mahindra.com/OurGroup/management_bod.html#bharatdoshihttp://www.mahindra.com/OurGroup/management_bod.html#arunnandahttp://www.mahindra.com/OurGroup/management_bod.html#narayanvaghulhttp://www.mahindra.com/OurGroup/management_bod.html#asgangulyhttp://www.mahindra.com/OurGroup/management_bod.html#rkkulkarnihttp://www.mahindra.com/OurGroup/management_bod.html#anupampurihttp://www.mahindra.com/OurGroup/management_bod.html#thomosmathewhttp://www.mahindra.com/OurGroup/management_bod.html#anandmahindrahttp://www.mahindra.com/OurGroup/management_bod.html#deepakparekhhttp://www.mahindra.com/OurGroup/management_bod.html#nadirgodrejhttp://www.mahindra.com/OurGroup/management_bod.html#mmmurugappanhttp://www.mahindra.com/OurGroup/management_bod.html#bharatdoshihttp://www.mahindra.com/OurGroup/management_bod.html#arunnandahttp://www.mahindra.com/OurGroup/management_bod.html#narayanvaghulhttp://www.mahindra.com/OurGroup/management_bod.html#asgangulyhttp://www.mahindra.com/OurGroup/management_bod.html#rkkulkarnihttp://www.mahindra.com/OurGroup/management_bod.html#anupampurihttp://www.mahindra.com/OurGroup/management_bod.html#thomosmathewhttp://www.mahindra.com/OurGroup/management_bod.html#kushubmahindra


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PUNJAB TRACTORS LTD EQUITY SHAREHOLDING PATTERN AS ON 31st

Dec,2012

1 Mahindra Group 64.64%

2 LIC/GIC/IFCI/BANKS 22.75%

3 Mutual Funds / Banks 2.37%

4 Other FIIs 0.44%

5 Public 9.80%

PRODUCT LINE

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TRACTOR RANGING FROM 24 h.p TO 75 h.p

FORKLIFTS

HARVESTING COMBINES

AUTOMOTIVE CASTINGS

DIESEL ENGINES

AUTOMOTIVE SEATING AND COMPONENTS

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LOCATION

The plant of Punjab Tractors Limited is located in Mohali Focal Point Estate near

Chandigarh on Chandigarh-Ludhiana Highway (Phase IV, Sahibzada Ajit Singh Nagar,

(Mohali) Punjab State) on a campus of 17 hectares. Punjab Govt. in the developing

Mohali to add to the vigorous effects to make it a progressive Industrial Centre allotted

the land. The location of plant is very suitable because it is quite near to the capital of

Punjab. This fact has been advantageous to the company in its initial stage of growth.

However, the inadequacy of railway facilities is a serious drawback to the location of the

plant.

BRAND NAME SWARAJ

The word SWARAJ in Indian language means freedom from bondage. Since PTL was

the first large-scale project in India based totally on Indian know how and technology,

Swaraj was appropriately chosen as its brand name. With more than 5 Lac tractors and

harvest combines operating in Indian farms, now Swaraj is also an internationally

recognized name in the developing world Viz. East Africa, West Africa, Middle East and

South East Asia, etc.

ASSOCIATE UNITS OF PTL

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SWARAJ FOUNDARY DIVISION.

It was established in 1980 at a capital outlay of Rs. 1.80 crores to provide gray iron

castings to PTL. Initial production was 5000 MT/year. It is situated in village Majari in

Mohali district. In FY 2007-08 production of castings was 10600 MTS, representing a

value of nearly Rs. 52 crores.

SWARAJ COMBINE DIVISION (SCD).

Recognizing the pioneering role of PTL, Punjab government requested PTL for the

development and manufacture of self-propelled. Harvester combines to curtail the

harvesting season and save the crops from natural calamities. As a result Swaraj Combine

Division was set up in 1980 at Chappercheri to produce 250 combines per annum at an

initial investment of Rs. 2.65 crores. In 1981, first SWARAJ 8100 rolled out. In 1985,

production of diesel forklift also started in collaboration with KOMATSU Fork- Lift

Company of Japan. Over last 26 years, the company has sold nearly 5000 combines

including 353 in 2010-11.

SWARAJ AUTOMOTIVES LTD.

Earlier it was Punjab Scooters Ltd. But now it has become Swaraj Automotives Ltd. In

1979, PTL took up the rehabilitation of this terminally sick unit and adopted a radically

new technology for it. It is situated in Nabha district Patiala.

OVERVIEW OF VARIOUS FRONTS OF PTL

I. MANUFACTURING. Today the product range of PTL consists of

1. Tractors. Swaraj 722 Swaraj 834

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Swaraj 733 Swaraj 939




2. Forklifts: Swaraj Komatsu Electrical Forklifts. (FB-15, FB-20, FB-255)

Swaraj Diesel Forklifts.(FD-15, FD-20, FD-25)

Swaraj Rough Terrain Diesel Forklifts.(FS-15, RT, FD-20, RT, Fd-

25 RT)

3. Harvester/ Combine: Swaraj 8100

4. Diesel Engines.

5. Automotive Castings.

II. TECHNOLOGY

PTL is the first manufacturer of tractors in the country. To have a conveyerised assembly

line, PTL has totally indigenous technology unlike other manufacturers who have

technical collaborations with foreign manufacturers.

The relative advantages of PTL over the other manufacturers are:

All the models can be made on single assembly where the others like M & M like

different lines for different models.

The assembly line is conveyerised.

Capacity addition will let it tap the current upsurge for the tractors. PTL has been

operating close to 100% utilization levels for the past 6 years. The added capacity will

improve its production capacity to meet the strong demand.Against the high market

share in the 30-40 HP segment capacity constraints have restricted PTLs share in 40 HP segment, PTL is expected to gain market share in these segments once

the added capacity is in the place.

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III. RESEARCH AND DEVELOPMENT

Ever since the beginning R & D has been the basic strength of PTL. The long list of new

products, which have been introduced and established in the short time span of 28 years

of PTLs existence, proves the emphasis that is placed in PTL on Research and

Development.

The expenditure on R & D has increased over the years. It was .47% of total turnover in

2000, .64% in 2001 and 1.46% in 2004. Computer Aided DesignsFacilities for design

and development of products as well technology and tool design have also been

strengthened.

IV. QUALITY OF PRODUCTS

Quality in the vital area where the company refuses to compromise. By putting Dr.

Jurans total quality management techniques into practice, the company has not only

managed to give the customer value for money but Quality in the vital area where the

company refuses to compromise. By putting Dr. Jurans total quality management

techniques into practice, the company has not only managed to give the customer value

for money but

Has managed to reduce wastage as well. To double upon, the company has also been

building long-term relationship with its vendors and dealers.

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1965 Govt. of India's research institute(CMERI) at Durgapur initiates design

and development ofSWARAJ tractor based on indigenous know-how.

1966 Punjab Govt. through PSIDC acquires SWARAJ tractor's design from

CMERI and establishes Punjab Tractors Ltd. (PTL) for its

commercialization.

1971.73 PTL sets up SWARAJ Project for 5,000 tractors per annum at a capital

outlay of Rs. 37.0 million with an equity base of Rs 11.0 million

1974 Swaraj 724 (26.5 HP) tractor commercially introduced.

1975 2nd tractor model SWARAJ 735(39 HP) developed by own R&D,

commercially introduced.

1978 3rd Tractor model SWARAJ 720 (19.5 HP) developed by own

R&D, commercially introduced.

1980 Guided by social concerns and responsibility, PTL takes over

PSIDC's sick scooters unit - Punjab Scooters Ltd. (subsequently

renamed as SWARAJ Automotives Ltd.)

India's first Self propelled Harvester Combine - SWARAJ 8100

developed by own R&D, commercially introduced.

SWARAJ Foundry Division set up in Backward area

1983 4th Tractor Model - SWARAJ 855 (55 HP) developed by own R&D,


Expansion of annual capacity to 12,000 tractors per annum at Plant 1.

1984 SWARAJ MAZDA Ltd.promoted in technical and financial

collaboration with Mazda Motor Corpn. & Sumitomo Corpn. Japan for

manufacture of Light Commercial Vehicles. PTL's equity participation

is Rs. 30.4 million (29%) and that of Mazda and Sumitomo's Rs. 27.0

million (26%).

1985 SWARAJ Industrial Forklift Trucks developed by own R&D,


1986 SWARAJ ENGINES Ltd. promoted in technical and financial

collaboration with Kirloskar Oil Engines Ltd.(KOEL) for manufacture

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of diesel engines. PTL's equity participation is Rs. 6.9 million (33%)

and that of KOEL's Rs 3.6 million (17%).

1993 Annual tractor capacity expanded to 24,000 per annum at Plant 1.

1994 Setup of tractor Plant II at Village Chappercheri with annual capacity

of 12,000 per annum.

1998 Commencement of expansion to 60,000 tractors(30,000 at each plant).

1999 5th and 6th tractor models - SWARAJ 733 (34 HP) & SWARAJ 744 (48

HP) developed by own R&D, commercially introduced.

2001 PTL won National Championship trophy in competition organized by

All India Management Association (AIMA) for young managers.

Economic times and Boston Consulting Group selects PTL as one of

the India's finest 10 companies out of Economic times top 500

Companies.

2002 Cumulative tractor sales crosses 5,00,000.

2004 PSIDC's disinvestment of its entire Equity holding (23.49%) in PTL in

favour of CDC Financial Services (Mauritius) Ltd. With this, total

holding of CDC & its associates in PTL stands at 28.48%.

2006 7th & 8th tractor models - Swaraj 939 (41 HP) & Swarj 834 (34 HP)

developed by own R&D, commercially introduced.

2008 PTL disinvested 15,73,000 euity shares of Rs. 10/- each of Swaraj

Mazda Ltd. (constituting approx. 15% of SML's paid up capital) in

favour of Sumitomo Corporation, Japan, a joint venture partner in

Swaraj Mazda Ltd. at a total consideration of Rs. 629.2 million

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2010 CDC/Actis Group and Burman Family's disinvestment of their

Equity holding in PTL (43.3%) in favour of Mahindra Group

(M&M).

M&M made open offer to shareholders for another 20% equity of the

Company.

Mahindra Group's equity holding in the Company stands at 64.6%

Cumulative Tractor Sales cross 600,000.

Swaraj Track Type Combine designed and developed by in-house

R&D, commercially launched

2012 Swaraj 3 Tonne Battery forklift, designed and developed by in-house

R&D, commercially launched

QUICK FACTS

Year of establishment 1970

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Business Group Swaraj tractor

Registered Office Phase 4 , industrial area S.A.S Nagar

(MOHALI) Punjab

Listing & its codes NSE: PUNJABTRAC

BSE: 500344Corporate Office Sector 34 A, Chandigarh

Tele- +(91)-172-2647700

FAX : +(91)-172-2615111

Website WWW.SWARAJENTERPRISE.COM

CORPORATE MISSION STATEMENT

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1. To produce and sell quality products with distinctive features at reasonable

prices and with better than the best sales services to ensure durable

satisfaction to customers.

2. To create a culture where each employees, vendor and dealer feels he is an

owner and part of the family.

3. To provide consistently superior return to shareholders and financial stock

holders.

4. To conduct business with highest standard of corporate behaviour, integrity

and social ethics.

SWOT ANALYSIS OF PUNJAB TRACTORS LIMITED

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Strengths

PTL has four constituencies to create wealth:

(a) Farmers

In an era where tractors were manufactured by players with foreign

collaboration (without adapting to Indian conditions), PTL introduced its rugged,

simple-to-maintain tractor, keeping in mind the Indian farmer and the environment,

he operates in. This market, the beginning of treating customers as the extension of

the company.

This is the only company that donot treat spares as profit center. It supplies all

the parts at cost to the dealer, and keeps the cheque that the same is passed on to the

farmer. In contrast, all other tractor makers make more margins on spares than

tractors.

(b) Dealers

Swaraj dealers are more charge, loyal and consequently affluent, PTL has left the

dealership neither has the company as terminated any services. Top managementcarried out direct talk with the dealers, listen to their problems and provide the

solution.

(c) Share Holders

1. Unlike others, PTL does not succumb to the temptation of drifting away into other

business or putting with borrowed funds. It prefers to pay the dividend to the

shareholders which has been increased from 250% last year to 260% this year.

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2. PTL has highest operating margins. This can be attributed to its R & D efforts and

efficient manufacturing system. These coupled with efficient vendor managed

could be termed as the tangible side of the business.

3. PTL boasts of Indias first totally indigenous tractor industry with 98% of the

products developed internally.

4. Another strength of PTL is its efficient vendorisation. It has now transferred even

tricky component such as hydraulic control valves, gears (transmission and

differential), shafts, crown wheels and tail pinions to its vendors. This has enabled

the company to expand efficiently at low capital costs.

(d) Human Resource Strengths

The current manpower costs less than 4 % of sales. This is attractive as

against the industry average of 10.3%.

There is an essence of commitment among the employees. PTL has best of

top management talents in the form of Mr. Chander Mohan and Mr. Yash

Mahajan. Mr. Yash Mahajan (the current Managing Director of PTL) has the

credit of building a strong management team and a formidable middle

management.

WEAKNESSES.

1. Production Capacity

The production capacity does not match the sales potential. Continuous

efforts are being made to increase the capacity. Success has been achieved and

this year it has achieved the target of 50,700 tractors.

2. Lack of Good Market Share in East and South

PTL share has good market share in northern belt. PTL still has to

establish itself in east and south. PTL covers east and south through its 33 and 49

dealers respectively.

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OPPORTUNITIES

1. Potential is the domestic market is large because India is a agricultural country

and 70% of its population is in rural areas out of which 63% of the population

derive their livelihood from agriculture.

Thus the opportunities for Swaraj Tractors is large in the domestic sectors.

THREATS

1. The major threat to PTL is from the new tractor manufacturers especially the

foreign players like New Holland. They are likely to up their in the upper segment

that is in the higher H.P. tractors. People tend to buy the higher H.P. tractors just

to maintain their standard of living.

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CHAPTER THREE

OBJECTIVES OF THE STUDY

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OBJECTIVES OF THE STUDY

1. To see the impact of infrastructure of the tractor dealer on the sales.

2. Level of importance of different aspects of infrastructure.

3. What is the nature and degree of correlation between the infrastructure of

tractor dealer and sales of tractors.

4. Should there be prescribed infrastructure for the tractor dealer.

5. To know the investment done in spare parts by the company.

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CHAPTER FOUR

RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY

Every project works requires research . The successful of any project and

getting the result from that depends upon the research methodology used by the research

the researcher.

RESEARCH DESIGN

According to Ghauri and Gronhaug (2005), depending on the nature of the problem the

research could be exploratory, descriptive or casual.

Exploratory research: it is used to identify and explain the nature of the problem.

It enables manager to better understand the problem. According to Zinkmund

(2000), the purpose of exploratory research include, diagnosing a situation,

screening alternatives and discovering new ideas. Ghauri and Gronhaug (2005)

stated thatexploratory research is mostly used when the research problem is

unstructured i.e. Badly understood, not well know or the other knowledge is not

absolute. According to Yin (1994), interview is the best method when gathering

information in an exploratory research.

Descriptive research: according to Ghauri and Gronhaug (2005), descriptive

research is used when the problem is structured i.e. it gives answers to who,

where, what, how and when questions. It is used to make clear the distinctiveness

of a population or an observed fact. According to Zinkmund (2000), descriptive

research studies are based on some previous understating of the nature of the

research problem.

Casual research: according to Ghauri and Gronhaug (2005), in casual research,

the problems are also structured. Causal research has to do with cause and effect

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relations. The main purpose in such research is to isolate cause(s) and tell whether

and to what extent cause(s) result (s) in effect (s).

In this research, descriptive research was used i.e. explaining the distinctiveness of the

observed facts.

RESEARCH APPROACH

According to Saunder et al (2003), when deciding the research approach to use in a

survey, a selection can be made between deductive and inductive approach.

Deductive approach has to do with the building up of theory and hypothesis after

reading literatures i.e. testing theory.

Inductive approach has to do with development of theory from analysis of

collected data i.e. building theory.

In this we deal with the detail of research methodology employed in this

project.Since the project was to study the infrastructure of tractor dealers, so it was

necessary to meet the dealers and know about the customer perception. Now a days the

customer have become more conscious. The customer sitting in the remote village has the

access to newspaper, Radio and Television. Hence we can say that the information

provided by the media leaves a exuberant effect on the customer taste.

All these above reasons prompted me to go for the primary data

collection.

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DATA COLLECTION METHOD

According to Hussey and Hussey (1997), all research has a primary stage which they

must pass through and this include;

Defining the research problem

Determining the concept of the research

Collecting the necessary data for the research

Analyzing and interpreting the research data

Stating the findings and recommendations

To test the hypothesis developed in this report, a quantitative research method was

used.

The objective of quantitative research is to develop and employ mathematical model,

theories and /or hypotheses pertaining to natural phenomena. It can also be used to

correct and incorporate previous knowledge.

A quantitative research method uses a large number of subject and anything measurable.

It enables one to establish conceptual models and frameworks and also to know some

vital variables and analyse the connection between them. When using a quantitative

research method, a literature review helps to get a better understanding of the research

topic.

Using of past data, that is reviewing the literature on the topic of interest is important

when conducting a research i.e. the researcher present past theory into his/her own area of

concern as presented in the chapter two of this project report. In other words, a clear

description of the research data gathering processes will be presented in this chapter.

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Basically there are two method of data collection

1. Primary data collection method

2. Secondary data collection

Secondary Data. According to Ghauri and Gronhaug (2005, 91), this can be

referred to as information collected by others for certain purposes that can be

different from that of a researcher who intends to use the same information. These

types of data can also be called second hand data due to the fact that they were not

collected for a particular purpose but can be of importance to several researchers

at different time. The external sources include the collection of data from

published articles, books, research reports etc. as well as commercial, panel

research, reports etc. This type of data can also be gathered from online sources

which may include web pages of government organizations, companies,

symposium, seminar etc., Secondary data therefore saves time as well as money,

it helps to better understand and explain our research problem, broaden the base

from which scientific conclusion can be drawn etc. All these are because it is analready existing data that can be used almost at any time it is needed. For this

study, secondary data were gathered from books, journal and articles using the

university library as well as the through internet e.g. Google scholar.

Primary Data. This can be referred to as first hand data because it is collected

mainly for the set research purpose. This type of data often helps to give

appropriate answers to research questions.

According to Ghauri and Gronhaug (2005), peoples behaviours can hardly be

learnt about without asking questions directly of the people involved.

Primary data is generated where a particular problem at hand is investigated bu

researcher employing the questionnaires, telephone surveys, interviews, etc. But in

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secondary data collection method, data which is collected for some earlier research work

and is applicable in present research.

In our research no secondary data is available so we using primary source

of data collection. The method of data collection is through structure undisguised

questionnaires and the copy of such questionnaire is in the appendix. In structure

undisguised questionnaire the responses as well as questions are standardised because of

the subjects are limited to the fixed alternatives. This type of questionnaire is very helpful

in securing factual information. In our study we have to obtain the information about

infrastructure and sales of the tractor dealers which is factual information.

SAMPLING PLAN

1. Sampling Unit: The sample chosen for the study was the tractor dealers at

Patiala

2. Sampling Procedure : The sampling procedure for this project was convenience

sampling.

RESEARCH INSTRUMENT

The research tool used for collecting the data was a questionnaire. The

questionnaire mainly consisting of dichotomous and multiple choice questions.

Although to get exact information it is available to interview the whole of the

population. But due to time and other constraints this is not possible. So it become

necessary to choose a sample.

3. DATA ANALYSIS: Once the data was collected the next step was the proper

tabulation of the data for its analysis. The data collected was properly tabulated

and fed into computers in different packages. Then the data was analysed, aided

by different tables formulated and inferences were drawn out.

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RELIABILITY AND VALIDITY

Reliability and validity is used to reduce the risk of bias responses when applying a

theory to empirical findings. According to Saunder et al (2003), reliability differs from

validity in the sense that reliability has to do with generalisation of the result and validity

has to do with whether the observation shows reality.

validity has to do with the reality of our finding Validity can also be defined as the extent

to which a study correctly shows the particular theory that the researcher is trying to

measure. External and internal validity was a major concern for the researcher.

External validity has to do with generalization of the result. There are several

ways of assessing external validity, for example taking of random sampling as it

is done in politics.

Internal validity has to do with the design of the study, care taken to carry out the

measurement, decision take as to what should be measured and what should not

be measured and the extent to which the researcher have taken into consideration

their explanation for other casual relationship the noticed.

In order to increase the validity of this research, the research is based on past literatures

and theories which have concrete and convincing conclusion and also validated by

experts.

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QUESTIONNAIRE CONSTRUCTS

A structured questionnaire was constructed to indicate the impact of tractor Dealer

Infrastructure and its effect on sales

RESEARCH BOUNDARY

1. Only dealer survey is done, no consumer survey is done.

2. Area of research is restricted to Patiala district.

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CHAPTER FIVE

DATA ANALYSIS AND INERPRETATION

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Table 1. Status of the Showroom

Number Percentage

Self Owned 5 62

Rented 3 38

Sample Size = 8

Showroom

62%

38%

Self Owened

Rented

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Table 2. Size of Showroom

Tractor Dealer Showroom Size

(in sq. Feet)

Mahindra & Mahindra 500

Swaraj 250Tafe 225

Eicher 1200

John Deer 1000Farmtrac 1500

Same Greaves 180

Sonalia 200

Average size of the showroom in Patiala district is 632 sq. Ft

Sample Size = 8

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500

250 225

1200

1000

1500

180 200

0

200

400

600

800

1000

1200

1400

1600

Showroomsize(insqft)

M & M Swaraj Tafe Eicher John

Deer

Farmtrac Same

Greaves

Sonalika

Tractor Dealer

Size of the showroom

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Table 3. Tractor display Area

Tractor Dealer Area ( in sq ft )

Mahindra & Mahindra 250Swaraj 250

Tafe 750

Eicher 100John Deer 500

Farmtrac 500

Same Greaves 50

Sonalika 225

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Tractor Display Area

0

100

200

300

400

500

600

700

800

Mahi

ndra

Swaraj

Tafe

Eich

er

John

Deer

Farmtra

c

SameG

reav

es

Sonalik

a

insq.

ft

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Table 4. Size of the Workshop

Tractor Dealer Workshop Size

(in sq. Ft)

Mahindra & Mahindra 400

Swaraj 550Tafe 300

Eicher 1000

John Deer 600

Farmtrac 1000Same Greaves 100

Sonalika 200

Sample Size = 8

Average size of the workshop in Patiala district is 520 sq. Ft

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Size of the Workshop

400

550

300

1000

600

1000

100

200

0

200

400

600

800

1000

1200

Mahindra

&

Mahindra

Swaraj Tafe Eicher John Deer Farmtrac Same

Greaves

Sonalika

Tractor Dealer

WorkshopSize(insqft)

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Table 5. Investment in Tractors

Tractor Dealer Investment(in lac)

Mahindra & Mahindra 25Swaraj 65

Tafe 15

Eicher 25John Deer 60

Farmtrac 57

Same Greaves 15Sonalika 45

Average investment in tractor in Patiala district is 38.3 lac

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Investment in Tractors

25

65

15

25

60

5715

45


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Investment in Spare Parts

6

5

2

45

10

1 2

Mahindra & Mahindra Swaraj Tafe

Eicher John Deer Farmtrac

Same Greaves Sonalika


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Table 7. No of Manager and salesman each tractor dealer have

Tractor Dealer No of

Managers

No of salesman Total

Swaraj 2 6 8

Tafe 2 3 5

Eichor 2 3 5Johndeer 2 1 3

Farmtrac 2 8 10

Same Greaves 1 1 2Sonalika 2 2 4

Mahindra & Mahindra 2 5 7

Average number of Manager each dealer has to

Average number of employees each dealer has 4


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Staff

0 2 4 6 8 10

Mahindra

Swaraj

Tafe

Eicher

Jhon Deer

Farmtrac

Same Greaves

Sonalika

Manager Salesman


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Table 8. Market share of each tractor dealer for the year april 2011 to march 2012

Tractor dealor Sales(in numbers) Market share in

Patiala dist.

Mahindra & Mahindra 259 17.08Swaraj 359 27.82

Tafe 70 3.22

Eicher 120 5.26John Deer 185 14.50

Farmtrac 343 27.18

Sonalica 56 2.69

Same Greaves 48 2.26

Total number of tractors sold in Patiala district for the year 2011-12 was 1440

Average number of tractor sold by each dealer was 240


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Sales of each tractor dealer in Patiala for the year

2011-12

259

359

70

120

185

343

56 48

0

50

100

150

200

250

300

350

400

Mahindra &

Mahindra

Swaraj Tafe Eicher John Deer Farmtrac Sonalika Same

Greaves

Tractor Dealer

Sales(inNo.)


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To see the correlation between the showroom size and sales

Tractor Dealer Sales(Avg.)

R1 Showroom sizein sq ft

R2 D2

= (R1-R2)

Mahindra &

Mahindra

150 6 500 5 1

Swaraj 235 7 250 4 9

Eicher 44 4 1200 7 9

Tafe 26 2 225 3 1

John Deer 128 5 1000 6 1

Farmtrac 255 8 1500 8 0

Same Greaves 15 1 180 1 0

Sonalika 33 3 200 2 1

22


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Rank Correlation

r = 1- 6 D2

N3 - N

= 1 - 622

83 8

= 1 - 132

504

= 1 - 0.26

= 0.74


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To check the correlation between sales and showroom

condition

Tractor Dealer Sales

(Avg.)

R1 Showroom

condition

R2 D2 = (R1-R2)

Mahindra &

Mahindra

150 6 Good 3 9

Swaraj 235 7 Very Good 5.5 1.25

Eicher 44 4 Average 1.5 6.25

Tafe 26 2 Very Good 5.5 12.25

John Deer 128 5 Average 1.5 12.25

Farmtrac 255 8 Excellent 8 0

Same Greaves 15 1 Very Good 5.5 20.25

Sonalika 33 3 Very Good 5.5 6.2567.50


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Rank correlation

r = 1 6 [ D2 + 1/12 (m3 m) + 1/12 (m3 m) ]

N3 N

= 1 -6 [ 67.5 + 1/12 (23 2) + 1/12 (43 4) ]

83 8

= 1 6 (67.5 + 0.5 + 0.5)

521 8

= 1 6 68.5

504

= 1 - 0.81

= 0.19


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To check the correlation between sales and workshop size


(Avg.)

R1 Workshop size in

sq ft

R2 D2 = (R1-R2)

Mahindra &

Mahindra

150 6 400 4 4

Swaraj 235 7 550 5 4

Eicher 44 4 1000 7.5 12.25

Tafe 26 2 300 3 1

John Deer 128 5 600 6 1

Farmtrac 255 8 1000 7.5 0.25


Sonalika 33 3 200 2 123.50

r = 1 6 [ D2 + 1/12 (m3 m) ]

N3 N

= 1 6 [ 23.5 + 1/12 (2 3 2) ]

83 8


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= 1 6 [23.5 + 0.5]

512 8

= 1- 6 24

504

= 1 0.28

= 0.72

To see the correlation between the sales and the investment in

tractor and spares


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(Avg.)

R1 Investment in

tractor & spares

R2 D2 = (R1-R2))

Mahindra &

Mahindra

150 6 25 + 6 = 31 4 4

Swaraj 235 7 65 + 5 = 70 8 1

Eicher 44 4 25 + 4 = 29 3 1

Tafe 26 2 15 + 2 = 17 2 0

John Deer 128 5 60 + 5 = 65 6 1

Farmtrac 255 8 57 + 10 =67 7 1

Same Greaves15 1 15 + 1 =16 1 0

Sonalika 33 3 45 + 2 = 47 5 4

11

r = 1 6 D2

N3 N

= 1 6 11

83 8

= 1 66

512 8

= 1 0.13


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= 0.87

To see the correlation between the sales and Tractor display

area


(Avg.)

R1 Tractor display

Area (in sq ft.)

R2 D2 = (R1-R2)

Mahindra &

Mahindra

150 6 250 4.5 2.25


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Swaraj 235 7 250 4.5 6.25

Eicher 44 4 100 2 4

Tafe 26 2 750 8 36

John Deer 128 5 500 6.5 2.25

Farmtrac 255 8 500 6.5 2.25


Sonalika 33 3 225 3 0

53

Rank correlation

r = 1 6 [ D2 + 1/12 (m3 m) + 1/12 (m3 m) ]

N3

N

= 1 6 [53 + 1/12 (23 2) + 1/12 (23 2)]

83 8

= 1 6 [53 + 0.5 + 0.5]

512 8

= 1 6 54

504

= 1 0.64

= 0.36


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To see the correlation between the Sales and Sale Staff


(Avg.)

R1 Sale Staff R 2 D2 = (R1-R2)

Mahindra &

Mahindra

150 6 6 6 0

Swaraj 235 7 7 7 0

Eicher 44 4 4 5 1

Tafe 26 2 3 4 4


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John Deer 128 5 2 3 4

Farmtrac 255 8 9 8 0

Same Greaves 15 1 1 1.5 0.25

Sonalika 33 3 1 1.5 2.25

11.50

Rank correlation

r = 1 6 [ D2 + 1/12 (m3 m) ]

N3 N

= 1 6 [11.5 + 1/12 (23 2) ]

83 8

= 1 6 [ 11.5 + 0.5 ]

512 8

= 1 6 12

504

= 1 0.14

= 0.86


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To check the correlation between the sales Managerial Staff


(Avg.)

R1 Managerial Staff R2 D2 = (R1-R2)

Mahindra & Mahindra 150 6 2 7 1

Swaraj 235 7 1 3 16

Eicher 44 4 1 3 1

Tafe 26 2 1 3 1

John Deer 128 5 1 3 4

Farmtrac 255 8 2 7 1


Sonalika 33 3 2 7 16

44


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Rank correlation

r = 1 6 [ D2 + 1/12 (m3 m) + 1/12 (m3 m) ]

N3 N

= 1 6 [44 + 1/12 (53 5) + 1/12 (53 5)]

83 8

= 1 6 [ 44 + 10 + 2 ]

512 8

= 1 6 56

504

= 1 0.66

= 0.33


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CHAPTER SIX

FINDINGS OF THE STUDY


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FINDINGS OF THE STUDY

Analysis the outcome of the survey conducted . The first and foremost thing that become

clear is that Mahindra & Mahindra and Swaraj are enjoying the top position in the tractor

industry . They are having the market share of 34.3% and 18.3% respectively. So , it is

clear that Swaraj is at the second position .

Regarding the dealers infrastructure it is clear that infrastructure do effect the sales .

The effect of the different area has been analysed using rank correlation method .

The highest is the correlation , it has the more relationship with the sales , i.e. it effects

the sales .

The least is the correlation , it has no effect on sales .

It is found that the highest impact on sales is the investment in tractor and spares by

tractor dealer . It has the correlation of 0.87

After the investment the second comes sale staff with the correlation of 0.86

After that sales depand upon the showroom size with the correlation of 0.74

After that sales depands upon the size of workshop with the correlation of 0.72

After sales is effected by tractor display area with the correlation of 0.36

After sales is effected by managerial staff with the correlation of 0.33


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After that the least factor which effects the sales is condition of showroom with the

correlation of 0.19


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CHAPTER SEVEN

LIMITATIONS OF THE STUDY


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LIMITATIONS OF THE STUDY

Although sincere efforts were made to collect authentic and reliable information

from the respondents even then this report is subjected to certain limitations.

1. As all the results and conclusions have drawn on basis of information

supplied by dealers, so it may lead authentic results.

2. The study was limited only to the area of district Patiala.

3. Information provided by dealers, it cannot be denied that there was

always a danger of individual biased.

4. Though the Questionnaire was prepared with great care and keeping all

aspects in mind but then we might have missed some points from which

we can get further information.

5. Since no T.A. is given as per company norms therefore it was difficult to

cover up wider area. The sample was collected using convenience

sampling techniques6. The qualitative nature of the research also makes it difficult to analysed

and interpret records.

7. Another noticeable limitation is the factor of time and financial

constraints; much of secondary data has been used in this present study.

If there had been enough time available, more fast food restaurants would

have been surveyed to gather more primary data.

8. Time of day for which survey was conducted too was morning hours to

lunch hours. evening hours were not considered.

9. Sample size too was limited as only dealers viewpoint is discussed here.


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CHAPTER EIGHT

CONCLUSION

&

RECOMMENDATIONS


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CONCLUSION & RECOMMENDATIONS

The factor which are considered important for good infrastructure are given below :-

1. Investment in tractor and spares .

2. Availability of sales staff .

3. Size of showroom .

4. Size of the workshop .

5. Availability of service staff .

The above factors are in the ordered of preference . So , the dealer should develop the

infrastructure in the above order to give a boost to their sales .


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CHAPTER NINE

FUTURE RESEARCH


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FUTURE RESEARCH

I think it will be of interest for researcher to map the impact of the showroom

infrastructure on the sales of the tractors.

future can also be done by making an exploratory study with interviews of managers at

the sites.

I dealt equally with all the items in my survey. Some may have weighed more than others

which may provide me with misleading results. In other words, a future research can be

done by keeping some other parameters of sales and showrooms.


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CHAPTER TEN

REFERENCES


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REFERENCES

1. Kolter, ,philip marketing management

2. S.P, ,gupta statical methods

3. C.R, kothari research methodology

4. http://www.swarajenterprise.com/

5. http://www.ruf.rice.edu/~bioslabs/tools/report/reportform.html

6. http://www.tractordata.com/farm-tractors/tractor-

brands/swaraj/swaraj-traPage 80 of 84ctors.html

7. http://wwwautomobiles.indiabizclub.com/info/automobile_types/tract

ors

8. http://www.en.wikipedia.org/wiki/Tractors_in_India

9. http://www.tractordata.com

10. http://www.business.mapsof India.com


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ANNEXURE

1. NAME OF DEALER

___________________________________________

2. COMPANY NAME TO WHICH SHOWROOM BELONGS

_________________________________________

_

3. STATUS OF SHOWROOM (TICK APPROPREATE)

SELF OWNED

RENTED

4. APPROXIMATE SIZE OF THE SHOWROOM

--------------------------- Square Feets

5. WHETHER YOU HAVE A SEPRATE

(a) TRACTOR DISPLAY AREA

YES NO

(b) CABIN FOR MANAGER

YES NO

(c) CABIN FOR PROPERIETOR

YES NO

6. WHAT IS THE SIZE OF WORKSHOP

------------------------------- Square Feet
http://www.swarajenterprise.com/http://www.ruf.rice.edu/~bioslabs/tools/report/reportform.htmlhttp://www.tractordata.com/farm-tractors/tractor-brands/swaraj/swaraj-tractors.htmlhttp://wwwautomobiles.indiabizclub.com/info/automobile_types/tractorshttp://wwwautomobiles.indiabizclub.com/info/automobile_types/tractorshttp://www.en.wikipedia.org/wiki/Tractors_in_Indiahttp://www.swarajenterprise.com/http://www.ruf.rice.edu/~bioslabs/tools/report/reportform.htmlhttp://www.tractordata.com/farm-tractors/tractor-brands/swaraj/swaraj-tractors.htmlhttp://www.tractordata.com/farm-tractors/tractor-brands/swaraj/swaraj-tractors.htmlhttp://wwwautomobiles.indiabizclub.com/info/automobile_types/tractorshttp://wwwautomobiles.indiabizclub.com/info/automobile_types/tractorshttp://www.en.wikipedia.org/wiki/Tractors_in_India


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7. WHETHER YOUR WORKSHOP HAS

(a) WASHING ARRANGEMENTS

YES NO

(b) PAINTING FACILITY

YES NO

8. WHAT IS YOUR INVESTMENT IN TRACTORS

Rs ----------------- lacs

9. WHAT IS YOUR INVESTMENT IN SPARES

Rs----------------- lacs

10. NUMBER OF EMPLOYEES IN SHOWROOM

MANAGERS : ------------SALESMAN : ------------

11. SALES OF TRACTORS

PERIOD NUMBER

2010-11 -----------

2011-12 -----------

____________________________________________________________________

_


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THANKS FOR YOUR KIND CO-OPERATION


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