Understanding the Growth Strategy of Mahindra Tractors

The agriculture sector in India is on edge of transformation; in the last decade, it had endlessly moved towards farm mechanization where agricultural equipment such as tractors has played a critical and vital role in ensuring the stability and efficiency of the Agricultural economy. At the present age of competition, the firm has to focus on the interest of the farmers and the satisfaction of customers by providing consistent effective service as per their requirements. To do so customer-oriented strategies play important role in any organization for achieving desirable results and growth. Let’s take a deep dive into the growth strategy of tractor market leader company Mahindra & Mahindra Ltd.’s, Farm Equipment Sector (FES), a part of the US $ 23 billion Mahindra group. 

Overview of Mahindra company:
The US $ 23 billion Mahindra Group is among the top industrial group in India. In the passenger car segment, Mahindra is the market leader and the top tractor brand in the world. The Mahindra group has a leading presence in the key sector of the Indian economy, including the financial services, trade, retail, and logistic and automotive components.

Mahindra & Mahindra Limited is the leading company among Mahindra Group; its farm equipment sector is well known for its Japan Quality Medal and only tractor company that won the Deming Prize. At present date, the market share of Mahindra in the domestic tractor market across India is 41 percent in the third quarter of the fiscal year 2021 and it is worth mentioning that M&M has been consistently maintaining the Market Share.

M & M Tractors’ Distribution Network:
M & M tractors providing a large number of the tractor to the Indian farmers along with proper facilities and after-sale service of tractors; with the help of its large network of sales, service, first aid centers and spare parts dealers available across India. The domestic distribution network of Mahindra is a major contributing factor in the consistent success of Mahindra Tractors as a widespread network reduces downtime of delivery. Also, it has 913 dealers across India, who are well equipped with special tools, equipment, and field service motorcycle to provide service at the doorstep of the farmers.

Increasing Demand of M & M Tractors:
There is consistent growth in the sales of Mahindra tractor, possible reasons for the same could be,

1. It has good specifications when compared to other tractors.
2. Its wide distribution network of dealers ensures fast sale after service to customers.
3. Customers experience superior quality raw material used during production.
4. Mahindra is providing the best technology as compared to other tractors.

SWOT analysis of M & M Tractors:
This SWOT Analysis will help to identify areas in which M & M Tractors are performing well. Also, this will provide understanding about critical factors and competitive advantages, which are contributing to the success of Mahindra.

M & M Brand Awareness:
The influence of brand name is always noticed in the buying process; thus, brand awareness is an important way to put a product or service in front of customers. In the case of M & M Ltd., it focuses on important brand-building tools such as broadcast media, online advertisement, event marketing, exhibitions, and press releases to ensure brand recall and recognition among customers. This will help customers to know about different products sold under the same umbrella of the brand.

Domestic market Competitor Analysis:
The purpose of a domestic market competitor analysis is to understand Mahindra Tractors competitors’ market share, growth, and product innovation they are offering in comparison to Mahindra and to find a gap in the market.

Marketing Strategies of Mahindra Tractors:

 Recommendation:

1. To attract customers, M & M Tractors can provide special reductions in price at the time of festivals.
2. There will be more effective sales service and after-sale service which will help to build strong brand awareness in the market.
3. The additional sales promotional activity should be there to increase awareness among farmers.
4. Register the customer review to track the customer satisfaction rate.

Conclusions:
The Indian tractor industry has always been an indicator of the state of the rural economy as it has a direct presence in the rural and domestic markets. At present, the Indian tractors industry is expected to witness a CAGR of 4.5% over the forecast period (2021 - 2026). This will indicate the scope for penetration of tractors into domestic markets of India as there are low levels of tractor penetration in the Indian market. For the market leader like Mahindra Tractors, there is abundant opportunity for the future as the increase in the adoption of farm mechanization practices, will increase demand for tractors. Also, more government schemes will support strengthening export for tractors in near future.