Evaluation of advantages and disadvantages of pre season placement of pesticides in the market; Bayer (India) Ltd.

Abstract

Hayer (India) ltd. is a part of the well diversified multinational Bayer Group. Business Group Agrochemicals contributes’ more than 60% to the total turnover of BIL. This project was undertaken to evaluate the advantages and disadvantages of pre season placement of pesticides in the market and also to determine the rational premium for any branded product. Pre season placement of pesticides is an essential sales strategy because of assured sales, ease in distribution, reduced inventory carrying costs, working capital requirements not bunching up, blocking of dealer’s capacity and better production planning. It has been observed that a company which fails to book enough orders before the start of the season generally does not perform well. This is more so as the sales are almost totally dependent on the monsoons and if the monsoons are a bit early, there is a sudden demand. Upto 70% of pesticide sales are on credit and ss such the dealer wields a lot of clout. The dealer books only those products in pre season : which are used first (systemics), where his relationship with the distributor is good, he gets more credit and co. of which he has the agency. He will prefer to sell those products where he gets a higher margin and there is a brand pull/demand so that he does not have to do a lot of convincing to the farmer.