Abc Pumps

ABC Limited: Agricultural and Domestic Pumps Division

Case Brief:
ABC Ltd is a part of Pariwala Group of Companies. Initially, Pariwala Group was a foundry for manufacturing agriculture ploughs. Later they diversified into various operations. The fluid handling business (mostly pumps) was christened as ABC Ltd with a turnover of Rs. 5.25 billion.
The Indian market for pumps is considerable at around Rs 19.5 billion and the Agricultural and Domestic Pumps (ADP) sector is estimated at Rs 11 billion. Within the ADP sector, the domestic and agricultural segments each contribute 40-42 per cent to sales while the industry segment contributes 12-14 per cent. One strategic issue for ABC Limited is whether to change its marketing profile, i.e., shift its attention from the agricultural sector to the growing domestic or industry sectors.
Analysis of Segments:
Agricultural:
a. Over dependence of farmers on the respective state governments.
b. Cyclical over production caused by higher rates of produce in the previous year followed by unremunerative prices caused by over production in the subsequent year
c. Average growth is close to only 3%
Domestic:
a. Increase in demand due to increase in urbanization and high rise buildings
b. Decreasing water table level in parts of India
c. Increase usage of fancy bathroom gadgets requiring usage of special purpose pumps

Industrial:
a. Demand affected by economic conditions and industrial growth
b. Chance for privatization of the water and sewage handling currently handled by the municipality
Consumer buying patterns and Dealer Credit:
Agricultural sector:
• Decision regarding which product/brand should the farmer buy was taken by the nearby mechanic.
• Sta ...
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