SUMMER TRAINING PROJECT REPORT

ON

MARKETING CHANNEL AT IFFCO

BAREILLY
SESSION :( 2016-2018)
Submitted in partial fulfillment of the degree of

MASTER OF BUSINESS ADMINISTRATION

Dr A.P.J. ABDUL KALAM UNIVERSITY, LUCKNOW

UNDER THE GUIDANCE: SUBMITTED BY:

MR.SHARAD SAXENA PRASHANT SETHI
ASSISTANT PROFESSOR MBA: III SEM

LOTUS GROUP INSTITUTION OF

MANAGEMENT, BAREILLY
1
 ACKNOWLEDGEMENT

The successful completion of that task would not be completed without the
expression of gratitude to the people who made it possible. I take this
opportunity to acknowledge all those who guided, encouraged and helped me
in winding up this Summer training project report .

I feel greatly honored for having done my Summer training project report. I
thank them with full zeal and enthusiasm that they gave this big opportunity to
me.

Last but not the least; I would like to extend my deep sense of gratitude and
thanks to my Parents, Friends and God in successful completion of this
Summer training project report,.

PRASHANT SETHI

M.B.A.III SEM

2
 DECLARATION

I, PRASHANT SETHI, a student of LOTUS GROUP INSTITUTION OF

MANAGEMENT, BAREILLY hereby declare that this Summer training project
report is the record of authentic work carried out by me during the academic year
2017 and has not been submitted to any other university or institute towards the
awards of any degree .An attempt has been made by me to provide all relevant and
important details regarding the topic to support the theoretical advice with concrete
research evidence. This will be helpful to clean the fog surrounding the various
aspect of the topic. I hope that this project will be beneficial.

PRASHANT SETHI

M.B.A.III SEM

3
 PREFACE
A project research is a systematic & scientific in investigation for
identifying a specific problem or study in a particular area in the organization &
thereby analyzing the same to give the best solution.

For the fulfillment of any organizational goal it is necessary that the

training and development should be well planned & conveyed to the
employees in order to have transport & steady flow of the different
mechanisms of the organization.

This project is also an attempt to study the functions of personnel

department specifically with the training & development policies & procedures
in reliance communication.

The objective of doing the project is to collect all the necessary

information with respect to the working procedures specifically with the
recruitment, selection training & development procedures of the personnel
department & thereby to get the maximum exposure in the related field. The
different information about the organization in different fields has given me a
wider exposure.

I have applied the concepts & gained knowledge learned during the
course at IME in the practical business situations & thus have understood
these concepts in a better way. The research work really has poured of
immense learning for me.

I would like to whole heartedly thank iffco & IME for giving this
exposure.

4
 TABLE OF CONTENTS

RATIONALE FOR THE STUDY 2-4

OBJECTIVE OF STUDY 5-6
PROFILE OF THE COMPAN 7-8
APPROACH 9
COMMITMENT 10
IFFCO BAREILLY UNIT: AWARDS 18
MARKETING CHANNEL AT IFFCO BAREILLY UNIT 20-23
DISTRIBUTION CHANNELS 24
DISTRIBUTION & WAREHOUSHING 25
REVIEW OF LITERATURE 26-27
RESEARCH METHODOLOGY 30-31
DATA ANALYSIS 32-42
FINDINGS 44-46
LIMITATIONS 47-48

RECOMMENDATIONS 47-48
SUGGESTIONS 48
BIBLIOGRAPHY 52
QUESTIONNAIRE 53-59

5
 CHAPTER - 1
RATIONALE FOR THE STUDY

6
 RATIONALE FOR THE STUDY
The project report on the Distribution Channel of IFFCO, Bareilly is just an attempt
to find out the overall distribution and marketing activities of the organization. For a
better understanding, the distribution strategy has been studied by me. Studying the
distribution channel strategy gave me a clear understanding of the specific functions
of each section of the distribution channel of IFFCO.

In the recent years, we have seen that the importance of studying any
subject matter in an analytical way has developed conceptually with the
changing scenario. In a professional course like M.B.A., it is very essential for
a student to get sufficient exposure to the real business situation where one
can have some practical knowledge as how to the organisation functions and
works.

Fertilizer has been a major contributing factor to the growth of Indian agriculture over
the last five decades. The overall fertilizer consumption in the country has recorded
phenomenal growth in last few years. The marketing department controls the day to
day supply as per the fixed norms of government so that the farmers are benefited
with good quality Urea at a cheaper rate and at cooperative societies nearer to them.

With a view to find out the policy of distribution and movement of companys product
i.e UREA and DAP in the states like Uttar Pradesh. I have undertaken the study on
the distribution channel of the Indian Farmer Fertilizer Cooperative Limited, Bareilly .
This project also discusses about the role of farmer service centres (FSC) and the
role of dealer in the distribution channel. Since fertilizer distribution and movement
are regulated by Govt. of India under Essential Commodities Act (ECA), the
company is expanding its marketing of their product as per extent rule and
regulations of the Government.

7
Urea at present being the only controlled fertilizer and having a major share
of the entire states and also a market leader in many countries, therefore ,
market potential of companys product is very high.

In conclusion, this project will give a comprehensive idea about effective

utilization of the channel of the distribution and recommendations
offered would definitely help in increasing the sale of urea and dap etc.

8
 CHAPTER - 2

OBJECTIVE OF STUDY

9
(2.1)Objective of the study:

A Study of distribution channels of Indian Farmer Fertilizer Cooperative Ltd.

(IFFCO), Bareilly , Uttar Pradesh.

(2.2)Scope:

1. The project will act as a broad straightforward guide to the management

for further expansion and improvement of distribution channels.

2. The study will encourage the marketing officials and the dealers to take
sufficient measures to overcome the limitation of the channel of distribution.

(2.3)Objectives :

1. To study the existing distribution channel of the organisation.

2. To find out the satisfaction level of farmers of Allahabad district regarding

IFFCO fertilizer.
3. To study the sales promotion activities being undertaken by IFFCO
Bareilly Unit.

10
 CHAPTER - 3

PROFILE OF THE COMPANY

11
 (3.1)INDIAN FARMERS FERTILIZER COOPERATIVE LIMITED
(IFFCO)

MISSION

"To enable Indian farmers to prosper through

Timely supply of reliable, high quality agricultural inputs and services in an

environmentally sustainable manner and to undertake other activities to improve
their welfare"

12
 APPROACH

To achieve their mission, IFFCO as a cooperative society, undertakes several

activities covering a broad spectrum of areas to promote welfare of member
cooperatives and farmers. The activities envisaged to be covered are exhaustively
defined in IFFCOS Bye-laws.

13
 COMMITMENT

Their thirst for ever improving the services to farmers and member co-operatives is
insatiable, commitment to quality is insurmountable and harnessing of mother earths'
bounty to drive hunger away from India in an ecologically sustainable manner is the
prime mission.

14
 (3.2)IFFCO VISION 2015

Successfully implemented its earlier Corporate Plans namely VISION 2000,

MISSION 2005 and VISION 2010 which resulted into becoming one of the largest
producer and marketer of Chemical Fertilisers by expansion of IFFCOs existing
units, setting up joint venture companies overseas and diversification into new
sectors.

IFFCO has now visualised a comprehensive Plan entitled VISION-2015

having objectives of :-

Production of fertilisers through expansion of existing units .

Setting up of additional fertiliser production facilities in India and Abroad

through joint ventures.

Diversification into other profitable sectors.

Strengthening raw material sourcing through Strategic joint ventures.

Formulation of Strategic Alliances through IFFCO consortium.

Become Global Leader in Fertilisers Production to cater to Food Security

needs of the Nation.

Enhance presence in International markets through strategic joint ventures

andSynergisticAcquisitions.

Promote Integrated Nutrient Management to improve efficiency of fertiliser

use and to promote location specific research an efficient fertiliser practices.

15
During mid- sixties the Co-operative sector in India was responsible for distribution of
70 per cent of fertilizers consumed in the country. This Sector had adequate
infrastructure to distribute fertilizers but had no production facilities of its own and
hence dependent on public/private Sectors for supplies. To overcome this lacuna
and to bridge the demand supply gap in the country, a new cooperative society was
conceived to specifically cater to the requirements of farmers. It was an unique
venture in which the farmers of the country through their own Co-operative Societies
created this new institution to safeguard their interests. The number of co-operative
societies associated with IFFCO has risen from 57 in 1967, 39862 on 31st march
2010.

39564 39862
37381
35072
30200
26960 28134
25528

57

1968-69 1975-76 1981-82 1987-88 1993-94 1999-00 2006-07 2008-09 2009-10

16
Indian Farmers Fertilizer Co-operative Limited (IFFCO) was registered on November
3, 1967 as a Multi-unit Co-operative Society. On the enactment of the Multistage
Cooperative Societies act 1984 & 2002, the Society is deemed to be registered as a
Multistate Cooperative Society. The Society is primarily engaged in production and
distribution of fertilizers. The byelaws of the Society provide a broad frame work for
the activities of IFFCO as a Cooperative Society.

IFFCO commissioned an ammonia - urea complex at Kalol and the NPK/DAP plant
at Kandla both in the state of Gujarat in 1975. Ammonia - urea complex was set up
at Bareilly in the state of Uttar Pradesh in 1981. The ammonia - urea unit at Aonla
was commissioned in 1988.

In 1993, IFFCO had drawn up a major expansion programme of all the four plants
under overall support of IFFCO VISION 2000 . The expansion projects at Aonla,
Kalol, Bareilly and Kandla have been completed on schedule. Thus all the projects
conceived as part of Vision 2000 have been realized without time or cost overruns.
All the production units of IFFCO have established a reputation for excellence and
quality. A new growth path has been chalked out to realize newer dreams and
greater heights through 2015 which is presently under implementation.

17
 (3.3)IFFCO BAREILLY

IFFCO Bareilly an ISO 9001 & ISO 14001 certified company, was started in 1967. In
order to cater the fertilizer need of farmers. The plant is located 34km away from
holy Ganga Yamuna Sangam on the Allahabad Gorakhpur highway. IFFCO Bareilly
consists of two plants. Old plant is known as Bareilly -I while new plant is known as
Bareilly -II. Construction cost of Bareilly -I & Bareilly II has been Rs.205 cores &
Rs.1186.8 cores respectively. Total area of the plant is 1070 acres which covers
Plant area 320 acres, Township 480 acres, Cordet 150 acres and Ash pond 120
acres. Urea production capacity of Bareilly -I and Bareilly -II plants are 1670 MT and
2620 MT respectively. Capacity for Ammonia production capacity of Bareilly -I and
Bareilly -II are 977 MT and 1520 MT respectively. Consultant for Ammonia plant and
Urea plant of Bareilly -I are M/s Pullman Kellogg, USA and M/s Snam Progetti, Italy
respectively and for Ammonia plant and Urea plant of Bareilly -II are M/s Haldar
Topasoe and M/s Snam Progetti respectively. Naphtha consumption of entire
complex is around 2000 MT/day. Captive Power plant-I having three coal fired
boilers of 125 MT/hr steam generation capacity and one 12.5 MW Turbo generator
set has been installed for Bareilly -I while another Captive Power plant-II, having one
oil fired boiler of 200 MT/hr steam generation capacity and one 18 MW electric turbo
generator set has been installed for Bareilly -II.

18
A full fledge Human Resource Management Centre with technically competent staff
meets all the requirement of employees and trainees in order for their overall
development.

IFFCO Bareilly has a Computer Centre equipped with all the modern facilities. All
the business work like Purchase, Store, Finance and Accounts, production,
Maintenance, Dispatch and Communication are performed through the computer.
IFFCO Bareilly also undertakes the IRDP work (hand pump installation,
constructions of brick roads, construction of school building, aid of books and
equipments to the school) of nearby village.

License Number : Cil 93 (Dated 5th March 1976)

Registration Number : ALD-314
Factory Code Number : 2356
Industry Code Number : 3112

IFFCO Bareilly Unit comprises some specific directly/ indirectly contributes in Mass
Production.
1. Production Department
2. Technical Department
3. Research and Development Department
4. Fire and Safety Department
5. Moti Lal Nehru Farmers Training Center
6. Administrative Block

IFFCO BAREILLY I

Conceived in 1974, the Fertilizer Complex located 34 km. away from Allahabad at
Bareilly , has been built at a cost of Rs.205 cores. IFFCO Bareilly unit is a modern
Fertilizer Complex having a 900 TPD Ammonia Plant and 1500 TPD Urea Plant,
ream and Power Plant, Water Treatment Plant, Cooling Towers, Inert Gas

19
Generation Instrument and Plant Air System, Naptha and Fuel Oil Handling System,
Ammonia Storage and Handling, Urea Storage and Bagging, Coal and Ash
Handling. Effluents Plants are provided auxiliary facility to the Complex. Apart from
that a Technical Division including well established R&D section always provides the
technical services to Complex.

PRODUCTION CAPACITY:

PLANT CAPACITY CONSULTANT/SUPPLIER

Ammonia 977 MT/Day M/S Pullman Kellogs, USA

Urea 1670 MT/Day M/S Snam Progetti, Italy

Power Boilers 3x125 MT/HR M/S Bhel

Turbo Generator 1x125 MW M/S Bhel

MAIN FEATURES:

Starting Date May 26, 1980

Commercial Production March 28, 1981

Project Cost Rs.205 Cores

Total Area 1670 Acres

Plant 320 Acres

Township 480 Acres

Cordet 150 Acres

Ash Pond 120 Acres

20
IFFCO BAREILLY - II

To bridge the demand supply gap of Fertilizer in the country and as a part of
Vision 2000, to make IFFCO, one of the largest Fertilizer producing company in the
world it was decided to expand the Bareilly unit by putting new Ammonia and Urea
Plant. The project consists of Ammonia Plant o capacity 1100 MT/Day, 200 MT/HR
Oil Fired Boiler and 18 MW Turbo Generator with other related offsite facilities. The
zero date of the project was April 20, 1995 and commercial production declared on
December 22, 1997. The total cost for the entire expansion project was Rs.1190
corers.

PRODUCTION CAPACITY:

PLANT CAPACITY CONSULTANT/SUPPLIER

Ammonia 2000 MT/Day M/S Htas, Denmark

Urea 3500 MT/Day M/S Snam Progetti, Italy

Power Boilers 1x1200 MT/HR M/S Bhel

Turbo Generator 1x18 MW M/S Bhel

MAIN FEATURE:

Zero Date April 20, 1995

Commercial Production December 22, 1997

Project Cost Rs.1186.8 Cores

Indian Currency Rs.859.8 Crore

Foreign Currency Rs.327 Crore

21
 (3.4)IFFCO BAREILLY UNIT: AWARDS

1. NATIONAL ENERGY CONSERVATION AWARD 2003:

2. In recognition of its outstanding performance in Environment Management,

Bareilly Unit has won the "BEST ENVIRONMENTAL AWARD" three times
from Fertilizers Association of India, i.e., for the Year 1993-94, 1996-97 and
1997-98

3. 2nd Jawaharlal Nehru Memorial National Award for best organization in

implementing "POLLUTION CONTROL MEASURES" from International
Green Land Society, Hyderabad.

4. IFFCO Bareilly has bagged "ENVIRONMENT AWARDS" for its excellent

work in the field of Environment Management, by Rotary Club of Allahabad
Midtown, for the year 1993-94.

5. The Regional Director, Ganga Project Directorate, Ministry of Environment

& Forests, New Delhi has issued appreciation letters for the good
Environment control at IFFCO Bareilly .

6. "First Position in Fertilizer Sector of Indo German Genentech Environment

Excellence Award" New Delhi in Year 2002.

7. "TERI Corporate Environmental Award" from Tata Energy Research

Institute, New Delhi in Year 2000-01 (in the category of companies having
turnover more than Rs.500 crore per annum).

8. IFFCO Bareilly unit has received prestigious FAI award for the best overall
performance of an operating Fertilizer Unit for Nitrogen (Ammonia and Urea
Plants) for the year 2001 02. The award was presented by Honorable
Union Fertilizer Minister Mr. S.S. Dhindsa, in the FAI annual seminar held in
New Delhi on December 16, 2002.

22
 9. IFFCO BAREILLY UNIT BAGS CSI YITP AWARD 2001

10. IFFCO Bareilly unit lifted runners-up trophy for the northern Region in
Young IT professional Awards 2001, organized by Computer Society of
India, held at New Delhi.

11. IFFCO Phoolpur unit has been awarded ISO 14001 certificate from British
Standards Institution UK (certificate number EMs 57450), in January 19,
2001 for the Environmental Management System Associated with the
manufacture and supply of fertilizer grade Urea inclusive corded, Hospital
and Township.
12. IFFCO Bareilly unit was awarded ISO 9001 certificate from British
Standards Institution UK in July 12, 2000.

(3.5)Nutrient-based subsidy policy (NBS): Under the new nutrient-based subsidy

policy (NBS),April 2010 the government provides subsidy on decontrolled (whose
MRP is not decided by the government) nutrients such as Phosphorus (K) and
Potash (S). A budget estimate of US$ 11.9 billion has been set for fertiliser subsidy
during the 2010-11.

New policy scheme are as following for per bag:

N : Rs. 23.07

P : Rs. 26.27

K : Rs. 24.48

S : Rs. 1 .76

23
 (3.6)Marketing Division

Marketing Territories of IFFCO:

Marketing Central Office

nNorth North South West East

Centre Centre (Bangalore) (Bhopal) (Calcutta)
(Lucknow) (Chandigarh)

A.P., Karnataka, Assam, Orissa,

Tamilnadu, W.B.
Kerala

Bihar,U.P., Gujarat, M.P,

Punjab, Haryana,
Jharkhand, Maharashtra,
Rajasthan, J&K,
Uttaranchal Chhattisgarh
.Himanchal Pradesh

There are 5 Zonal Offices, 20 State Curve Area Office, 63 Area Offices.

24
 Marketing Channel at IFFCO Bareilly Unit

APEX Marketing District/Block level PACS ( FSC )

Farmers Mktg. Societies
Federation Centre

District/Block level PACS Farmers Farmers

Mktg. Societies

PACS Farmers

Farmers

25
 DISTRIBUTION CHANNELS

1. Distribution of fertilisers mainly through the Cooperative

System:

2. State level Apex Cooperative Marketing Federation acts as wholesaler.

3. Direct supplies to Societies in some States.

4. IFFCO-NCDC Cooperative Societies.

5. Small quantities to institutional agencies like Agro.

6. Industries Corporation etc.

7. 158 IFFCO Farmers Service Centres

26
 CUSTOMER SATISFACTION

Customer satisfaction is the individuals perception of the performance of the

products or service in relation to his or her exceptions. Customers usually will

have drastically different expectations.

The concept of customer satisfaction is the function of customer expectations.

A customer whose experience falls below expectations will be dissatisfied and

customer whose expectations are exceeded will be highly satisfied or

delighted.

The research indicates that there are rewards for having satisfied customers

which is depicted as below:

27
 SATISFIED CUSTOMERS

CUSTOMERS TO PURCHASE FROM YOU

(As long as nothing better comes along)

ARE LIKELY TO PROVIDE YOU WITH 3 TO 5 REFERRALS OVER THEIR LIFETIME OR

PURCHASING

28
UNDERSTANDING THE CONSUMER BASED ON VARIOUS PERSONALITY TYPE :

Marketers are interested in understanding how a difference in personality

influences consumption behaviour because such knowledge enables them to

understand consumer and to segment and target those consumers who are

likely to respond positively to their product or service communications.

29
ATTRACTING CUSTOMERS

Todays customers are becoming harder to please. They are smarter, more

price conscious, more demanding, less forgiving and they are approached by

many more competitors with equal or better offers. The challenge, according

to is not to produce satisfied customers but to produce delighted and loyal

customers.

Companies seeking to expand their profits and sales have to spend

considerable time and resources searching for new customers. To generate

leads, the company develops ads and places them in media that will reach new

prospects; it sends direct mails and makes phone calls to possible new

prospects; its sales person participate in trade choice where they might find

new leads; and so on. All this activity products a list of suspect. The next task is

to identify which suspects are really good prospects.

CUSTOMER RETENTION :

The over objective of providing value to customers continuously and more

effectively is because the competitors also to try to acquire highly satisfied (

Even delighted) customers ; the organizations strategy of customer retention

makes in the best interest of customer to stay with the company rather than

switch to another firm. In almost all business situations it is more expensive to

30
win new customers than to keep the existing ones. Studies have shown that

small reductions in customer defections produce significant in profits because

of the following reasons.

1. Loyal customers buy more products

2. Loyal customer are less price sensitive and pay less attention to

competitors advertising

3. Servicing existing customers, who are familiar with the firms offering and

processes, is cheaper.

4. Loyal customers spread positive word or mouth and refer other

customer.

Further, more, marketing efforts involved in attracting new customers is

expensive, rather in saturated markets, it may be impossible to find new

customers.

RELEVANCE OF POST PURCHASE BEHAVIOR

After purchasing the product, the consumer will experience some level

of satisfaction or dissatisfaction. The marketers job does not once the produce

is sole. Marketers need to constantly monitory post purchase satisfaction, post

purchase actins an post purchase produce uses.

31
POST PURCHASE SATISFACTION:

What determines whether the buyer will be highly satisfied, somewhat

satisfied, or dissatisfied with the purchase? The answer to this question can be

given as: buyer satisfaction is the function of the closeness between the

buyers expectation and the products perceived performance.

Consumers from their expectation on the basis of messages received from

sellers, friends and other source that give information for instance even a sales

promotion offer. As the gap between the expectations and performance

becomes larger and larger the greater is the consumer dissatisfaction. This is

where the consumers coping style comes in to play. Some consumers magnify

the gap when the produce is not perfect, and they are highly dissatisfied,

others minimize the gap and are less dissatisfied.

The importance of studying the post purchase satisfaction suggests that the

product names must truthfully represent the products likely performance.

Some sellers might even understate performance levels, so that consumers

experience higher than expected satisfaction with their product.

Customers Satisfaction is the critical strategic for any enterprise as we move

towards the 21st century. The message is simple:

32
Every company must regard each of its customers as a valuable, irreplaceable

asset and treat him or her as they themselves would wish to be treated. The

customers are the organizations natural resources. The organization will be

doomed as a civilization in spite of all the material accomplishment if its

squanders its natural resources. The organization will face an equally bleak

future if it let its customer resources depart without any conscious efforts to

retain them.

Customer Satisfaction is so powerful that it can be quantified. Customer

satisfaction deals with data, nor theory, and there is a beauty of data:

If we can define it we can measure it

If we can measure it we can analyze it

If we can analyze it we can control it

If we can control it we can improve it

33
Data in Lakh Mt as on 31st march 2010.

140
118.27
120 112.58

100 93.24
86.1
81.95
80

60

40

20

0
2005-06 2006-07 2007-08 2008-09 2009-10

Sale in lakh

34
 (3.8)DISTRIBUTION & WAREHOUSHING

Distribution of Urea and inter-state movement is under government controlled

and is regulated under the Essential Commodities Act ( ECA) 1956. Under
ECA , supply plan for urea is formulated by the government in consultation
with the State Deptt. of Agriculture and Fertilizer industry. IFFCO urea is moved
from factory to field warehouse by both road and rail. Movement through rail is
resorted to on a need basis to distant locations at the shortest time.
Consumption of urea is seasonal thereby rendering transportation, storage and
distribution is very important .

Urea Distribution Channel Process:-

IFFCO Production Area Office Sub Area Office Ware-

Housing Societies Farmer

Fertilizer distribution Both by Rail (90%) and Road (10%).

300 Km. Distance by Road.

For warehousing following services are used:

Federations & Cooperative Godowns.
Central Warehousing Corporation (CWC)
State Warehousing Corporation (SWC)

(3.9)HUMAN RESOURCE STATUS:

Manpower strength of the company as on 31.04.2010 is as under :

Executive : 450

Non-executive : 1150

35
 (3.10)Board of Directors of the Company is following

Mr. Surinder Kumar Jakhar, (Chairperson)

Mr. N. P. Patel, (Vice Chairperson)

Shri. Rakesh Kapur (Jt. Managing Director)

Shri. K.L. Singh (Director Technical)

Dr. G.N. Saxena (Director (Coop. Development)

Shri. R.P.Singh (Director (HRD)

Shri. Arabinda Roy (Marketing Director)

36
 CHAPTER - 4

REVIEW OF LITERATURE

37
 REVIEW OF LITERATURE

Most producers do not sell their goods directly to the final user , between
them a stand a set of intermediaries performing variety of functions. The
intermediaries are a chain each passing the product down to the chain to the
next organization, before it finally reach the consumer or end user. This
process is known as the distribution chain or the distribution channel. Each
of the element in this chain will have their own specific needs which the
producer must take into account along with those of all the important end-
user. A distribution channel includes several inter-connected intermediaries such
as - farmer service center, cooperative societies, distributors, whole seller etc.
Each intermediary receives the goods at one pricing point and moves it to the
next higher pricing point until it reaches the final buyer.

A channel of distribution is a bridge to cover the gap between a

manufacturer and consumer. So, it is very important for the company to have an
effective channel of distribution. Distribution channel often require the assistance
of others in orders to enable the market to reach its target market. A
company can he handle its own distribution functions in a better position to
exercise the control over product sale and potentially earn higher profit. At
present, internet has made it much easier to distribute products thus lessening
the need for others to be involved in selling a companys product .

Distribution channels may not be restricted to physical product alone. They may be
just as important for moving a service from producer to consumer in certain
sectors, since both direct and indirect channels may be used Hostels , for
example may sell their service (typically rooms) directly or through travel agent,
tour operators, airlines, tourist boards, centralized railway system etc.

A well designed distribution channel strategy takes into account the linkage
between both the sales peoples activities with channel partners and the
marketing managers efforts to better reach and serve end-users. The distribution

38
channels management programmers builds a logical framework uniting
marketing and sales efforts in a collaborative learning environment.

This project discusses the existing distribution channels of IFFCO and the
role of the farmer service centers in the distribution of the product. This project
is also attempts to find out the distribution policy as well as the performance
of the distribution channel on the sale of the product of the company. The
project also bring out the various factors influencing the distribution of the
company.

For this purpose, data has been collected by one to one interaction with the
officials of the Marketing Department of IFFCO. Also personally visited the
dealers of the nearest area and collected the information required for the
project.

This project has been prepared with a view to give a comprehensive idea
about effective utilization of distribution channel through which the company
has been successfully expanding the sales of the product and also to fulfill
the academic requirement of MBA offered by Institute of Business Studies &
Research (IBSAR) under the TMV University, Pune.

39
 CHAPTER - 5

RESEARCH METHODOLOGY

40
 RESEARCH METHODOLOGY

In the research I have found new ideas by which I can explain the views of
respondents on whom I have conducted research on the topic and on that basis I
have found their views and can suggest some decision problems and opinions by
analyzing and interpreting the facts I have found.

Exploratory research: - Is a type of research conducted because a problem has

not been clearly defined. Exploratory research helps determine the best research
design, data collection method and selection of subjects. Exploratory research often
relies on secondary research such as reviewing available literature and/or data, or
qualitative approaches such as informal discussions with consumers, employees,
management or competitors, and more formal approaches through in-depth
interviews, focus groups, projective methods, case studies or pilot studies.

(5.1) Research Design: It is the frame work by which we can conduct study on
any topic and can collect data and can analyze that. In this study the information was
collected by using:
Exploratory Research design in the form of well structured Questionnaire.
Personal Interview method.
Simple Convenient Sampling.
For the study two types of data was used.
Primary Data
Secondary Data

(5.2) Data Collection Method / Sources:

The primary Data was collected through personal interviewes conducted with the
help of a strucatred questionnaire. The questioonaire was designed with closed
ended question, which was used to collect data from the distributors, Retailers and
Customers in that particular area.

The secondary data was collected by the researcher with the help of various
publications and internet, listited in the bibliography.

41
Primary Data:
In Primary Data the information was collected from Manufacturers of fertilizers,
Distributors, Retailers (Cooperatives, FSC, IFDC etc.) and customers i.e. Farmers of
the Allahabad district using Questionnaire and personal interview.
Secondary Data:
For the study and analysis of Marketing Divisions Secondary Data from the
Company, Area Office, VikashBhawan (A.D.O.),C.D.O. and Deputy Director
Agriculture records were used.

(5.3) Sampling Unit:

Farmers of the Allahabad District.
Employees of Cooperative Societies of IFFCO, BAREILLY .

(5.4) Sample Size (200)

In this study 130 Farmers, 40 Dealers, 20 Cooperative Societies,and 10 IFDC were
taken into consideration.

(5.5) Sampling Method:

The method used for sampling is Convenient Sampling depending upon the
information provided by the company.Geographically the areas of Research were
different Markets of Allahabad Distt. Consisting of Rural as well as Urban Areas.
They were Bareilly , BabuGanj, RahimaPur, BahadurPur, Jhunsi, Phaphamau,
Teliarganj, Gaddopur, Soraon, Hathigaha, Sahanso, Sikandra, Gara pur, Tharwai,
Padeela ground, 40 numbers Gomati, Mahewa, Arail, Sekhpur, Sulemsarai, Chakiya
etc. from 15 June to 31st July 2010.

(5.6) Tools of data analysis:

Tabular analysis was used and same is presented in the Graphs.

42
 CHAPTER - 6

DATA ANALYSIS

43
Table No. 6.1- To determines the type of fertilizer presently used by the farmers.

Types of Fertilizer Number of

Respondents

Only Chemical Fertilizer 60

Only Compost Fertilizer 40

Both 30

Figure 6.1 Pie chart showing response of farmers who used different types of
fertilizer.

Typ. Of Fer.

Both
23%
Chem. Ferti.
46%

Comp. Ferti.
31%

Data Interpretation

The above data clearly indicates that chemical fertilizers are most widely used and
preferred fertilizer among the respondents.

44
Table No. 6.2- The following table indicates the presence of category of fertilizer
prominently used by the farmers in the fields are.

Category of Fertilizer Number of

Respondents

Urea 60

DAP 40

NPK 30

Figure 6.2 Chart showing response of farmers who used different category of
fertilizer.

Respondents using fertilizer

70

60

50

40
UREA
DAP
30
NPK

20

10

0
UREA DAP NPK

Data Interpretation

It is very clear from the above data that Urea is used by majority of the farmers in the
field followed by DAP and NPK.

45
Table No. 6.3- When I inquired about the specific brand of fertilizers which the
Farmers were using following were the responses.

Fertilizer Number of
Brand Name Responses

Oswal/ 40
Indogulf

IFFCO 60

National 10
Fertilizer

Others 20

Total 130

Figure 6.3 Pie chart showing that IFFCO fertiizer used promiently.

Farmers using fertilizer

oswal IFFCO Nat. Fert. Others

15%
31%
8%

46%

Data Interpretation:

By the above table we can draw the inference that the fertilizer of IFFCO-Urea is
mostly used at largest scale and after it similarly Oswal/Indogulf and National
fertilizers is being used second and third place.

46
Table No. 6.4- When I asked to the farmers about the preference of various factors
in purchase of fertilizer following were the obtained Data.

Factors Responses Percentage

Availability 20 15%
Brand Name 10 8%
Price 35 27%
Solubility 15 11%
Advertisement 10 8%
Quality 40 31%

Figure 6.4 Chart showing that farmers bought IFFCO fertilizer due to his quailty.

45
40
40
35
35

30

25
20
20
15
15
10 10
10

0
Availibility Brand Name Price Solubility Adverts. Quailty

Availibility Brand Name Price Solubility Adverts. Quailty

Data Interpretation:-

It is evident from the above data that quality plays an important role in purchasing a
particular brand of fertilizer i.e. IFFCO.

47
Table No. 6.5- The table given below shows role of sources on providing a particular
brand of fertilizer to the farmers 160 dealers and 40 cooperative socities taken for
answer.

Source Number of
Respondents Percentage

Dealers 160 80%

Cooperative 40 20%
Societies

Total 200 100%

Figure 6.5 Pie chart showing the role of dealers in IFFCO fertilizer

Coo. Socities, 46

Dealers, 160

Data Interpretation:- The above data reveals that most of the users are getting the
fertilizers from Dealers Shop. IFFCO should adopt such strategy but it cant be
possible due to cooperative laws.

48
Table No. 6.6- Following data give the number of respondent who attended
awareness program.

Yes 45

No 85

Figure 6.6 Pie chart showing the response of farmers who attendad the
awarness program.

Farmers
YES NO

YES, 45

NO, 85

Data Interpretation:- The above data revels that the awareness program has not
been up to the mark. Farmers are not aware to these types of awareness program.

49
Table No. 6.7- The above Table shows that awareness program from the above 45
Farmers (Who attended awareness program) are as following.

Good 10

Satisfactory 5

Poor 30

Figure 6.7 - Pie chart showing the response of farmers after the awarness program.

Good, 10

Satisfactory
,5
Poor, 30

Data Interpretation:

The above data reveal that the awareness program has not been up to the
expectations.

50
Figure 6.8 Opinion of officials on the existing distribution channels for
the distribution of the product (IFFCO) Urea :

According to 85% of the marketing officials, the existing distribution channels

are sufficient for the distribution of the product. However 15% of the marketing
officials think that the existing distribution channel are not sufficient for the
product.

15%

85%

Yes (Existing distribution channel are sufficient).

No (Existing distribution channel are not sufficient).

51
Figure 6.9 - Opinion of dealers on the delay faced in product
transportation :
Generally transportation cost by road is more than the rail transport. The
company, therefore, prefers to transport major part by rail. In such situation private
dealers have to wait for their requirement and as a result delay occurs. In
this respect, 60% of dealers agree to the above limitations and 40% are of
the opinion that there are no limitations in supplying the product according to
consumers requirement.

40%

60%

Yes (limitation faced in supply of product).

No (limitations not faced in supply of product).

52
 ROLE OF DEALERS

Figure 6.10 - Factors which dealers consider while taking dealership of

Company:

Dealers before taking the dealership analyze various factors such as price,
quality, brand, image, hassle free agreement etc. The bar chart below depicts
the various factors the dealer look for while taking up dealership of
Company.

Percentage showing various factors dealers looks for while taking up

dealership of company :

70

60

50

40

30

20

10

0
65% Quality 35% Brand

Analysis of data revels that 65% of dealer give importance to quality and 35%
look for brand image while taking up the dealership of the company. Dealers
do not prefer price because price is fixed by government. As IFFCO is the only
company of its kind in this region, so there are no competitors. For this,
dealers have to accept the term and conditions of the agreement and abide
by all rules and regulations as stipulated by the company.

53
CHAPTER - 7

FINDINGS

54
 FINDINGS

1. Despite of various government regulations, other limitations, most of the

marketing officials are satisfied with the present distribution channel as it
makes the process of distribution easy.

2. From the survey, it was found that there is a strong distribution channel of
IFFCO in the Uttar Pradesh. It has emerged that present distribution channels
increase the sale of product and it does not affect the quality of the product.

3. In the beginning IFFCO was supplying fertilizer to state level APEX

cooperative marketing federation only.

4. During the survey on dealers, it was found that majority of them have taken up
dealership of product because of its quality and brand image.

5. APEX federation acted as wholesaler in the cooperative sector and they

catered to the requirement of the lower societys i.e.PACS etc.

6. Over the passage of time some federation walked out of fertilizer business
due to financial management and other organizations problem.

7. In some states where cooperatives are not in position to absorb the quantity
offered by IFFCO, others channel viz. state agro Development Corporation as
well as other institutional agency are also utilize.

8. IFFCO is collaboration with National Cooperative Development Corporation

(NCDC) adopt 1450 village level societies on the line of IFFCO Farmer
Service Centre (FSC) in phase manner.

55
9. Under the NCDC scheme its provide a loan of Rs. 424194 laks to IFFCO
which was distributing as margin money loan @30,000 per societies.

10. IFFCO also provides subsidy of Rs 12,000 to each for procuring agricultural
implements.

11. 20% farmers say that maize are grown in selected area of Allahabad district
and near about 80% farmers are using IFFCO Urea.

12. Major farmers (50%) using only IFFCO Urea and 60% farmers are satisfied
with IFFCO fertilizer specially IFFCO Urea.

13. 70% farmers are not satisfied with the price of IFFCO urea i.e. Rs 258.00 per
bag of 50 Kg Urea. But farmers want Urea in between Rs 230-240 per bag of
50 Kg.

14. IFFCO provides many sales promotional schemes and farmers are generally
satisfied by this scheme.

15. The competitive brands of IFFCO Urea are in the market are generally
Indogulf (Shaktiman) ,TATA, National, KRIBHCO and Oswal mainly, amongst
these competitive brand of IFFCO is Shaktiman (Indogulf).

16. Now a days packaging attracts farmers instead of the quality.

17. Road and Rail are the main mode of transportation of companys product. It
was found that companys transportation facility are best because 90% are by
train and 10% by road so his transportation cost is very cheap, fast and safe.

56
18. One thing is very much attracting Farmers towards purchase of IFFCO Urea
is KHAD TO KHAD BEEMA BHI SAATH. This is a insurance offered by
IFFCO for farmers.

19. Now a days IFFCO marketing officer are made concentration on Customer
Delight rather than Customer Satisfaction.

57
CHAPTER - 8

LIMITATIONS

58
 LIMITATIONS

While undertaking the project work in IFFCO there are some limitations
experienced in compiling information for the purpose, which are briefly stated
as below :

1. Due to time constraints the sample size was to be kept limited.

2. Area limitations i.e. only some parts of the Rural and urban market were taken
into consideration.

3. Due to scarcity of transportation facility at villages it was very difficult to visit all
the farmers individually.

4. It is very difficult to gather 100% information through respondent because they

are not confident about the purpose of the survey and Questionnaire. The
Questionnaire were filed by the respondents. Generally it depends upon validity
of these responses what they have given, we can only reach to conclusion based
on that and responses cant taken to 100% true.

5. Non responding error might have occurred because some of the

respondents contacted provided an incomplete or no response to some
questions mentioned in the questionnaire. Respondents did not respond to
those questions because they were unwilling to disclose the related data
of information .

59
 CHAPTER - 9

RECOMMENDATIONS
&
SUGGESTIONS

60
 RECOMMENDATION & SUGGESTIONS:
The following recommendation/ suggestion are given below for improvement of
the distribution channel of the IFFCO Fertilizer :

1. Selecting weak Cooperative Societies and provide their Financial, Managemental

and Technical support like MIS facilities in Marketing Division as well as all
delivery centers.

2. Launch the program like constructing storage community center in the area of
direct need. The company should organize availability promoting the fertilizer and
also serve the technical need.

3. IFFCO should also help in forming new cooperative societies so as to increase

sales of IFFCO fertilizer.

4. IFFCO should also adopt direct supply system to provide fertilizer to farmer.

5. In Direct Supply system IFFCO should give the facilities of credit for selling the
fertilizer.

6. Price of urea should be reasonable, and easy mode of payment should design.

7. To promote research and training on the application of present management

system, technology and global experience for cooperative development.

61
8. To Promote, assist and encourage development of cooperatives with special
power on suitable agricultural and social economic and cultural development of
the members through cooperative bodies, voluntary institutions and other entities.

62
 BIBLIOGRAPHY

1. Marketing Management by Dr. Philip Kotler, The Prentice hall, India.

2. Uttar Pradesh Government Statistical Book.

3. Allahabad Distt. Fertilizer Sales Report Book from Project Manager

Agricultural Services.

4. IFFCO web site: www.iffco.nic.in,www.Google.com.

5. Web site: www.wikipedia.com, www.answer.com.

6. Others relevant sources like Agriculture magazine Yojana.

7. Times of India Agriculture Survey Report 2009.

8. Other websites: www.dogpile.com,www.icar.ac.in,www.google.com.

9. IFFCO Booklet.

63
 (9.1)Questionnaire for Farmers
Name:

Age:

Address:

Signature:

Date:

1. Do you know IFFCO fertilizer firstly from following?

(a).Through News Paper, Radio, Television (b). Through our farmer

brother.

(c). through field officer of the IFFCO. (d). through wall

Hording\Banner and some others
sources.

2. There are some fertilizers companies name select one which you know very
well?

(a).IFFCO (b).National Fertilizers

(c). Shri Ram fertilizers (d). Tata Fertilizers

3. Which company fertilizer you use mostly?

(a). Shri Ram Fertilizers (b). National Fertilizers

(c).KRIBHCO (d).IFFCO

4. You are using IFFCO Urea, How many years?

(a).5 Years (b).10 Years

(c). 20 Years (d). 40 Years

5. Which company fertilizer (Urea) you find good in quality and easily soluble in
water?

(a). Oswal fertilizer (b). National fertilizer

64
(c).Tata fertilizer (d). IFFCO fertilizer

6. Which company fertilizer available you very easily?

(a). KRIBHCO fertilizer (b). Narmada fertilizer

(c). Oswal fertilizer (d).IFFCO fertilizer

7. Do IFFCO fertilizer available you at right time as per your demand?

(a).Before time (b). At right time

(c). No time availability (d). Never available

8. Why you like most IFFCO fertilizer?

(a). Quality of fertilizer is very good (b).Bagging quality is very good

(c). There is proposal of Insurance with the fertilizers. (d).All of above are truth.

9. In IFFCO fertilizer which type of changes do you like?

(a).Not any change in IFFCO fertilizer (b). Packaging and Quality

(c). Availability and price (d). Change in distribution channel.

10. How much you are satisfied with IFFCO fertilizers?

(a). Only 50% (b). Fully satisfied

(c). Worthless (d). Unhappy

11. In which area of following do you want change?

(a). Cooperative society (b). FSC

(c). IFDC (d). Private channel.

12. Do you feel IFFCO is best in fertilizer and chemicals because

(a). IFFCO supplies fertilizers, seeds, NPK, DAP, Pesticides, Insecticides and others
product.

(b). Quality and solubility of fertilizer is very good in each types of soil.

65
(c). IFFCO provide farmers training, Insurance, Timely availability and many more.

(d). All of them are true.

13. Finally amongst all of Fertilizers Company at which position would you like to
place IFFCO?

(a). First (b). Second

(c). Third (d). None

66
 (9.2)Questionnaire for Co-Operative Society

Name:

Age: .

Designation: ...

Department: Cooperative Society

Address:

Signature: .

(Hindi) (English)

Date:

1. What do you mean by Co-operative Society?

(a). Cooperative means group of people.

(b). Cooperative is group of farmers.

(c). this is group of farmers and register under cooperative act.

(d). this is a society made by farmers.

2. How cans a person become a member of cooperative society of IFFCO?

(a). By getting registration at IFFCO office only.

(b).Firstly organizing society and registration in Govt. office.

(c). anybody can be the member of IFFCO society.

(d). simply by following cooperative laws.

3. To whom IFFCO supply fertilizer?

(a). Cooperative society only.

(b). Private organizations only.

67
 (c). Non-Government Organizations and Trust.

(d). Mainly IFFCO sales license holders.

4. What is the mode of payment of sale of fertilizer to IFFCO?

(a). By Cheque (b).By Cash (c).By cash-by credit (d).By Credit method.

5. What is the method of providing subsidy rate o IFFCO fertilizer?

(a).By calculating real input (labour, raw material) and Sale output (profit)

(b). By following Govt. subsidy rate norms.

(c). by following instruction of Managing Director.

(d). none of them.

6. What is current condition of cooperative society in IFFCO?

(a). They are running very smoothly. (b). All most societies are dead in
their locality

(c). they need infrastructural changes (d). All are correct.

7. Cooperative society are controlled by-

(a). Central govt. (b).State govt.

(c). Ministry of Cooperative society (d). IFFCOS Managing Director

8. What are the basic principle of cooperative society?

(a). Spirit of cooperation between State

(b). Spirit of cooperation between farmers & state govt.

(c). Spirit of cooperative for the farmers only.

(d). none of them.

68
9. Is cooperative society commencing any type of training program for farmers?

(a). Two or three times in every block level.

(b). Five times at Distt. Level.

(c). Two times in every village.

(d). Never commence training program.

10. How you face marketing competition with private channel?

(a). We have famous brand IFFCO hence no competitor exist in market.

(b). Our delivery system are so strong hence no problem of competition in

market.

(c). Private companies has no quality and popularity hence we have monopoly in
market.

(d). Till today I have no competitor in market.

11. In the peak season how can you satisfy the farmers?

(a) No one farmer is being satisfied.

(b) All the farmers being satisfied.
(c) Only potential and old farmers are being satisfied.
(d) Only new farmers are being satisfied.

12. What is sales promotion level at Cooperative society?

(a). State level sales advertisement through print and electronic media.

(b). Field officer are responsible for sales promotional activities.

(c). It is the duty of Marketing division to promote sales.

(d). No need of sales promotion with IFFCO brand.

69
13. Which types of complain do you face with the IFFCO fertilizer sales?

(a). IFFCO brand has famous and good in quality hence no need of complaints.

(b). Late delivery of fertilizers causes dispute in the farmers.

(c). Farmer are very happy with our system.

(d). All of them are correct.

14. Which one of them is correct?

(a). There are need to change the Cooperative channel so that fast delivery may
applicable.

(b). No need of change in cooperative society system.

(c). There is need of privatization in delivery of fertilizers.

(d). There should be involvement of non government organizations.

16. What is the Distribution channel of fertilizers & other agricultural products in
IFFCO?

(a). Through Cooperative and Private channel both. (b). Through cooperative
society only.
(c). Through Government counters. (d). Through IFFCO counters .

70