Based on the case study Raman Tractors, please write your personal well-considered answer to the question given below. Ensure that you justify the answer (quantitatively and qualitatively) with supporting analysis based only on information available specifically in the case document or established conceptual understanding.

What should be Raman Tractors sales and marketing strategy to achieve the sales targets in a sustainable manner? What type of support could he reasonably expect from Farmland and what would he have to manage for himself?

(25 marks)

Notes:

1. The approach to the answer is very critical in evaluation. Hence, please think carefully before you start answering.
2. Please adhere to the word limit of 750 words, for answering the question. If you answer using more than the prescribed limit, only first 750 words would be evaluated.
3. Any quantitative analysis like tables would not be counted as words.

Case: Raman Tractors Introduction On August 1, 2020, Raman Limbachia inaugurated Raman Tractors (Raman and Raman Tractors are both fictitious) as an authorized dealership of Farmland Tractors Ltd. (hereafter Farmland) in the Lalitpur town of Sambalpur district, Odisha state, east-central India. The dealership was located in a new building, with modern sales and service facilities as required by Farmland. Staff-members - two in sales, one in service and one in the office - were picked up from the erstwhile Farmland dealer of Lalitpur. Since the staff was experienced, the dealership was operational immediately from the first day. Harun, sales executive of Farmland, was quite satisfied with the transition from the previous Farmland dealership to Raman Tractors, looked forward to working with Raman, and expected the sales results to improve dramatically. The first day had two deliveries, based on customers the salespeople had cultivated earlier. Raman enjoyed working in his brand new office. Unlike many other owners, he arrived punctually at the dealership every morning and reviewed daily staff reports. This practice ensured that the staff was also punctual and worked under his direct supervision. The sales team made regular field visits in their allocated territories to generate demand for Farmland Tractors and, as a result, brought in eight potential customers to the dealership during the first month. However, these customers expected much higher discounts or a longer credit period (on the necessary loan for the purchase of a tractor) than Raman was ready to offer. Another three customers could not have tractors delivered, as financers were not ready to advance the required loan amounts to these customers, who could not furnish all the documents necessary for extending the loans. Consequently, at the end of the month, the sales achievement was only five against a target of ten tractors. Even the five tractors sold were also on extra discounts over and above the normal discounts that the Farmland manager had given as exceptional sales support. Raman realized that his sales team could not cultivate the customer base required to achieve the monthly sales targets regularly. He therefore decided to make field visits to meet the potential customers in the territory assigned to him by Farmland. Guided by his salespeople, Raman visited various villages where potential customers lived. While meeting customers, he often began the conversation by referring to his father's name - who was a well-known shopkeeper in the Lalitpur market - to generate discussion, this strategy was always as a good rapport-building exercise. Raman's approach to the business discussions a with potential customers was forthright, informing the people he met that he had started a tractor dealership. He was there to support all their needs related to the buying, servicing and disposal of tractors. Most of the farmers responded by saying that they would visit his shop when they considering buying a tractor. Several potential customers told his salespeople that the competition gave excellent discounts and credit. Some farmers came to the Raman Tractor dealership on their own. All these farmers, however, expected high discounts and generous credit. Many sales leads generated by Raman's team involved farmers who did not have the necessary funds to buy the tractors, and financiers were not willing to finance them as their creditworthiness was suspect. Some of these customers expected Raman to deliver the tractor and extend substantial credit. Raman's salespeople also argued with Raman to close these deals. Such customers often said that Raman's father Amit and cousin Mahadev knew them, and if required, Raman could check their records with Amit and Mahadev. Raman realized that the reputation of his father's business was not helping him in this respect. In September 2020, Raman Tractors sold only three tractors, while the monthly target was again ten sales. In the review meeting held on October 5, 2020 with Harun, the sales executive of Farmland, it was evident that the salespeople of Raman Tractors had visited all the customers in the villages they were assigned to visit. The salespeople of Raman Tractors had distributed promotional leaflets to all the potential customers and hung banners in prominent places in targeted villages. The service department had also received many calls about tractor spare parts and repair work. However, the service mechanic of Raman Tractors, who was responsible for conducting the repairs, instructed these customers to bring their tractor to the workshop. Previously, customers such as these had not had to come to the dealership for such work as the other tractor dealers would send mechanics to farms to undertake repair work. Overall, Harun concluded that the dealership was not performing satisfactorily, despite Raman's best efforts. Raman had invested heavily in building the dealership that met all the specifications of Farmland in terms of physical infrastructure for his dealership, up-to-date technology and requisite manpower with relevant work experience. However, the results were not as expected. Raman was unsure how potential customers did or even should perceive his dealership. He wondered if he needed to undertake some activities that he was not doing so far, or remain patient and wait longer for sales to improve. There was tremendous pressure on Raman to deliver results in the last quarter of 2020. Raman knew that his business and reputation depended on his sales performance. He also knew that it took time for marketing initiatives to materialize into sales in the tractor business; hence he needed to immediately initiate action in the market to achieve the results in the near future. The Lalitpur Market for Tractors Lalitpur was the headquarter town of the Sambalpur district. Tractor dealerships in Lalitpur served the entire Sambalpur district. It was an agricultural belt with most farmers having small landholdings of 3-4 acres (1 acre is equal to 0.40 hectares). The farmers grew staples such as rice and some seasonal vegetables. Tractors were used as the primary means of hauling a loaded carriage. The use of tractors for haulage work was slowly growing, and it was almost 20% of tractor use. However, all the tractor purchases in Lalitpur market were primarily for agricultural use, some of which were rented for haulage work during off season. The farmers in the area were generally prosperous. Most farmers had family members who were also gainfully employed in jobs in faraway towns and cities or had some other additional sources of income. The district's prosperity had improved in the last three years after the canal providing a regular water supply was constructed in 2017, enhancing agricultural productivity. The tractor population of the area had doubled in the last three years, which had encouraged tractor companies to develop the demand for tractors in the entire Sambalpur district by conducting aggressive sales and marketing activities. It was expected that the tractor population of the district would further double in the next three years. There were approximately 800 villages in Sambalpur district, each with a population of 200 or more people. Most of these villages had one to four tractors, which indicated that many more tractors could be sold in each village. The average life of a tractor was seven to eight years; hence, there was potential for replacement buyers of tractors in each of these villages. The 2019 total tractor sales of all the tractor companies put together were 450 units in the district The Competitive Landscape Traditionally, Mercer was the most popular tractor brand in the Sambalpur district. Their 30-35 horsepower tractors were priced affordably and performed well in the field. However, their fuel consumption and maintenance costs were higher than those of competitors when the tractors' lifetime of five to ten years was considered. The resale value of Mercer tractors was also good, as there was a steady stream of customers ready to buy second-hand tractors. In the last three years, Judoka, a new brand of tractor, captured a large share of the tractor sales of the Lalitpur market. Judoka products were costlier than Mercer tractors, but had higher engine power, ranging from 35-60 horsepower, and better technology, were longer-lasting and operated with negligible maintenance costs. Farmland Tractors enjoyed the reputation of being a premium product, priced almost 5- 10% more than all competing products available in the market and requiring very low maintenance costs. However, Farmland was traditionally not aggressively marketed by its dealers; thus, they had been less successful than Judoka in the last few years. During the last two years, customer sales, financing and service-related experiences with the Farmland dealer were not satisfactory; hence, the company's reputation had taken a beating among the customers in Sambalpur district, who were buying from the Lalitpur market. Consequently, even the resale value of Farmland tractors had fallen considerably during the last few years in Lalitpur. There were two more tractor brands in the Lalitpur market; both were new to the customers in the Sambalpur district. Hence, these two tractor brands had very few tractors in the field, and the dealers of these brands were trying to generate demand by using aggressive sales techniques, including the fieldwork of visiting villages and farmers. There were approximately 2,000 tractors used by farmers in the Sambalpur district. In terms of specific brands, more than 1,000 were Mercer tractors, approximately 300 were Judoka and only 130-150 were Farmland tractors. The identity of the balance of the tractors was unknown The Customers In 2020, tractor buyers in Sambalpur could be classified in different ways. Although most purchases were for farming needs, about 10% of tractor sales was for haulage, where the more powerful horsepower capacities were required. Only Judoka tractors met this criterion. First-time buyers were cautious about their purchase. They trusted those who had experience using or owning tractors, mechanics who worked on tractors or other vehicles, or even their relatives who compared the products on the internet. However, for evaluating finance options, they depended on the village elders. Buyers who had previous experience buying tractors were more experimental with new brands. They required a detailed understanding of the technical and commercial aspects of the product, whereas their dependence on other people was less than for first-time buyers. These experienced customers were more knowledgeable and insisted on better prices. The exchange value of their old tractor was a key element in their purchase of a new tractor. Commonly, the exchange value was the key point of their purchase decision. In most villages, only one tractor brand was present; at most, a village had two brands of tractors. This peculiar trend was because farmers lent their tractors to their friends and neighbors. So, farmers of the same village had first-hand experience with a specific brand. Also, being a high-priced item, farmers gathered information on tractors from available sources before arriving at their purchase decision. Most farmers relied on other tractor owners for collecting information on tractors. In most cases, farmers bought the same brand - and even the same model of tractor - as their neighbors owned. Being a premium brand, Farmland had the advantage that its customers were relatively wealthy, had social clout in the villages and, as a consequence, many people listened to them. Tractor Marketing Tractor marketing included regular village visits by the dealer salesman, convincing potential customers to consider the marketer's company and demonstrating tractor functionality if need be. One crucial element was checking the financial needs of the potential customers, assessing their creditworthiness and arranging for the same through a financier. Apart from salespeople in the dealership, most tractor dealers relied on developing a network of influencers, to whom they gave some commission against sales generated by them. These influencers could be existing tractor owners, the village headman, the local tractor mechanic, or anyone who could influence a farmer's new tractor purchase. If a dealer did not have influencer support, generating targeted sales was difficult. A tractor cost around INR 0.5 to 0.6 million (note that USD 1 is approximately equal to INR 75). That is, tractors are expensive and purchases of these critical pieces of equipment entail much involvement for the majority of farmers in Sambalpur. The demonstration of a tractor was quite helpful in convincing the farmers about the effectiveness of the particular brand of tractor. Some tractor manufacturers even attempted competitive demonstration when they wanted to demonstrate specific advantages of their tractors compared to the popular brand in a specific market. However, the tractor demonstration was itself not adequate to drive sales. Most of the customers needed additional assurance before buying an expensive product such as a tractor, for which they depended on village elders, friends and tractor mechanics. Some customers had a weak financial position, so they neither had the money nor access to credit from financiers as they were not considered creditworthy. Such customers were ready to buy tractors of any make, provided they could get financing from the dealership. As a result, they were the most accessible customers for the dealerships and possibly also the riskiest. Selling on credit to these financially risky customers could block capital and eventually lead to financial loss for the dealership, apart from the associated bad customer relationship and publicity. Background of Raman Tractors Amit, son of a farmer, had set up a fertilizer and fodder shop in the Lalitpur market in 1997. By hard work and good behavior, he built a reputation as one of the best fertilizer and fodder shops among the farmers of Sambalpur district. Amit had used one tactic to develop his business, which was giving credit to the tune of INR 20,000 to 50,000 to farmers at the beginning of the sowing season and recovering it during the harvesting season. By early 2000, his customer base had spread across the entire district, and his business was known to offer excellent prices and a long credit period. Amit used one of his trusted nephews, Mahadev, to do the field visits and collection from creditors. Amit himself focused on attending to the farmers visiting the shop and procuring the fertilizers and fodder at the best commercial terms. Amit was knowledgeable about fertilizers, was an authorized dealer of all the notable brands selling in the Lalitpur market and kept adequate stocks to meet customer demand. Amit's 22-year-old son Raman graduated from a college located in a metropolitan city of India in March 2020. Though Raman had completed his schooling in the village, he was a studious person, and Amit had never involved him in business. Amit was confident that he had a good business and a strong reputation in the market. He would be able to settle his only son in any business which was related to farming. Now, Amit was considering opening a new line of business for Raman. Farmland Tractors had an old dealership in the Lalitpur market. The dealership had not generated the desired sales for Farmland since 2017, when the competition intensified in the Lalitpur market. The after-sales service provided by the dealer was also not good, which made many old Farmland customers unhappy due to the unavailability of spare parts and unsatisfactory repair work. Thus, Farmland customers were spreading unfavorable word of mouth about the dealer. Overall, the Farmland brand was not doing well in the Lalitpur market in 2020. Although there were no complaints about tractor performance, the brand had significantly lost its customer base. Harun, sales executive of Farmland Tractors, approached Amit in June 2020 about taking on the Farmland dealership for the entire Sambalpur district. He explained that the old dealership was closed for business during the previous month for lack of sales performance and because of customer complaints. Harun promised Amit all marketing support such as competitive prices for the tractors for the entire first year and technical help setting up a modem sales and service facility. In return, Harun expected Amit to invest INR 2.5 million in the business, provide an appropriate sales showroom and service workshop, employ an adequate workforce for the dealership, train employees and devote adequate time to building the tractor business. Harun expressed confidence that Amit had the required goodwill among the district's farmers to revive Farmland tractor sales in Sambalpur. Amit discussed the proposal with Raman, and Raman was eager to start the new business. Raman Tractors was designated as the authorized dealer of Farmland Tractors in the Lalitpur market, catering to the entire Sambalpur district. History of Farmland Tractors in Lalitpur On October 6, 2020, Raman asked his father for his advice on how Raman Tractors could overcome the shortfall in sales and meet the targets set by Farmland for the year 2020. Amit and Raman decided to meet Chander, the old Farmland dealer of Lalitpur, to get his perspective and elicit suggestions on the tractor business. In the interaction with Amit and Raman, Chander shared that he had started the dealership in April 2010, and Farmland was initially very supportive. Its staff visited the dealership and the field regularly and trained the dealership workforce. However, within several years, Farmland gradually reduced support for exchanging old tractors, promotions and advertising. Farmland sales executives, including Harun, had good behavior when sales were happening, but they dumped tractors without orders when sales did not happen. When confronted by Chander, the Farmland sales executives always gave the same answer, that they were under tremendous pressure from the company to achieve sales targets, which they were compelled to pass on to dealers. The salespeople pressured Chander to sell on credit, which led to excess stock and credit with customers, which blocked his investments. Within a few years, the Farmland business was no longer profitable; hence, Chander left the company. He further elaborated: W The company had introduced Dealer Information Systems in the last year, which occupied the dealership workforce in filling up data rather than working in the field. They also wanted me to drive the mobile technology-based digital interface they had introduced to manage customers and the sales force. I had to appoint a part-time computer person. I was a small dealer, but they were only after systems and processes as if I was running a business empire like Tata and Birla [large business houses in India) Chander further added: Exchanging old tractors was essential for selling new tractors and it was a very tricky business. Almost 30% of my sales were dependent on the exchange of old tractors, and the company had an online web portal for supporting such sales. However, I never got good prices from the portal. Customers demand too much value for their old tractors, and I could not sell them at such exchange prices. Initially, the company gave price support on the exchange, but they discontinued this over time. Eventually, I had to develop my system for disposing of old tractors, and it was not profitable. While commenting on credit sales, Chander noted: I suffered greatly in the process of financing tractors. The company had agreements with all the leading finance companies, to take up the cases of Farmland customers at favourable terms. As luck would have it, many early customers did not get the expected financing. Consequently, margin money became much higher and difficult to recover, blocking the investments. Some nonstarter financing even ruined my credibility in the market, and no financers were ready to lend to my customers. Note that margin money is the price of a tractor, less the amount financed. In essence, margin money represents the money that the dealership had to recover from the buyer. Spare parts were a major pain point for the dealers. Chander explained: The company wanted dealerships to have a complete spares inventory so that all tractors of Farmland, new or old, could be serviced. We could not sell these spares as , the local market had similar products at much lower prices. I have now sold the inventory at a considerable loss. The company officials always talked about processes and data, even for spares. Chander was very cross at Farmland. He continued: Even when they asked me to do sales promotion activities like customer meets and service meets, while settling bills they wanted lots of proof about utilization of funds, citing audit requirements. If I calculate properly, I must have had to pay from my pocket for all these company initiatives. Yes, they did a van-based rural market promotion in my area and covered the entire potential market at their own cost, but the company never got any customers for me. I had to earn each one of them. It was too much: I spent time developing a large business system while my sales were not happening. My workforce was not getting any incentive as sales were low. They could not meet their basic needs, and I had to give them a loan; otherwise, they would have left. Now that money is also blocked. Hence, I gave Harun three months' notice and stopped dealing after exactly 10 years of business. At the end of the meeting with Chander, Raman was quite jittery. He could easily identify with Chander as Farmland was persistent on their demand to maintain and furnish data for everything. In his short stint with Farmland, Raman also faced challenges of consumer financing, lack of price support on exchange tractors, and excessive spares inventory. Amit realized that Raman was stressed, so he calmed him down and said it was essential to understand the situation from the market conditions and customer point of view. He shared that he was not well versed in the tractor business, but he was familiar with the business landscape of the Lalitpur market. Amit promised to investigate and determine the problems in the market and give him feedback. After a week, Amit gave the following feedback to Raman: The previous Farmland dealer had not served the market well, and their salespeople were not visiting the market regularly. Hence the customers did not find the salespeople to be credible. Unfortunately, the credibility issue continued to persist. During field visits, all those customers Raman met were had been contacted by the salespeople of Raman Tractors - just a few days before Raman's visit. The salespeople were not good at handling customer questions and objections. When faced with customer queries, these salespersons had shared that they would be getting the principal dealer to visit, and that he would solve all the customer problems. The potential customers whom Raman met in the last two months considered Raman to be a good person. However, the commercial deal, especially for exchange tractors, was not as good as the competition. Hence many went to the competition to make their tractor purchase. In the minds of the farmers from the entire district, Farmland had a poor image for after-sales service and a lack of spare parts. Many finance companies had commercial agreements with competitors' dealers and were ready to serve most of their customers. However, these finance companies were not willing to extend credit to many Farmland customers. The finance companies attributed this to many nonstarter loans (loans that experience default on the first instalment) on Farmland tractors in the past, which made them impose more stringent rules and obligations. The Way Forward Raman started realizing that starting a business was easy but sustaining a profitable business was the real challenge. Based on the discount structure of Farmland, market conditions and his current cost base, he needed a monthly sale of at least eight tractors to break even. He was determined to find his way forward. What should be his sales and marketing strategy? What type of support could he reasonably expect from Farmland and what would he have to manage for himself? Case: Raman Tractors Introduction On August 1, 2020, Raman Limbachia inaugurated Raman Tractors (Raman and Raman Tractors are both fictitious) as an authorized dealership of Farmland Tractors Ltd. (hereafter Farmland) in the Lalitpur town of Sambalpur district, Odisha state, east-central India. The dealership was located in a new building, with modern sales and service facilities as required by Farmland. Staff-members - two in sales, one in service and one in the office - were picked up from the erstwhile Farmland dealer of Lalitpur. Since the staff was experienced, the dealership was operational immediately from the first day. Harun, sales executive of Farmland, was quite satisfied with the transition from the previous Farmland dealership to Raman Tractors, looked forward to working with Raman, and expected the sales results to improve dramatically. The first day had two deliveries, based on customers the salespeople had cultivated earlier. Raman enjoyed working in his brand new office. Unlike many other owners, he arrived punctually at the dealership every morning and reviewed daily staff reports. This practice ensured that the staff was also punctual and worked under his direct supervision. The sales team made regular field visits in their allocated territories to generate demand for Farmland Tractors and, as a result, brought in eight potential customers to the dealership during the first month. However, these customers expected much higher discounts or a longer credit period (on the necessary loan for the purchase of a tractor) than Raman was ready to offer. Another three customers could not have tractors delivered, as financers were not ready to advance the required loan amounts to these customers, who could not furnish all the documents necessary for extending the loans. Consequently, at the end of the month, the sales achievement was only five against a target of ten tractors. Even the five tractors sold were also on extra discounts over and above the normal discounts that the Farmland manager had given as exceptional sales support. Raman realized that his sales team could not cultivate the customer base required to achieve the monthly sales targets regularly. He therefore decided to make field visits to meet the potential customers in the territory assigned to him by Farmland. Guided by his salespeople, Raman visited various villages where potential customers lived. While meeting customers, he often began the conversation by referring to his father's name - who was a well-known shopkeeper in the Lalitpur market - to generate discussion, this strategy was always as a good rapport-building exercise. Raman's approach to the business discussions a with potential customers was forthright, informing the people he met that he had started a tractor dealership. He was there to support all their needs related to the buying, servicing and disposal of tractors. Most of the farmers responded by saying that they would visit his shop when they considering buying a tractor. Several potential customers told his salespeople that the competition gave excellent discounts and credit. Some farmers came to the Raman Tractor dealership on their own. All these farmers, however, expected high discounts and generous credit. Many sales leads generated by Raman's team involved farmers who did not have the necessary funds to buy the tractors, and financiers were not willing to finance them as their creditworthiness was suspect. Some of these customers expected Raman to deliver the tractor and extend substantial credit. Raman's salespeople also argued with Raman to close these deals. Such customers often said that Raman's father Amit and cousin Mahadev knew them, and if required, Raman could check their records with Amit and Mahadev. Raman realized that the reputation of his father's business was not helping him in this respect. In September 2020, Raman Tractors sold only three tractors, while the monthly target was again ten sales. In the review meeting held on October 5, 2020 with Harun, the sales executive of Farmland, it was evident that the salespeople of Raman Tractors had visited all the customers in the villages they were assigned to visit. The salespeople of Raman Tractors had distributed promotional leaflets to all the potential customers and hung banners in prominent places in targeted villages. The service department had also received many calls about tractor spare parts and repair work. However, the service mechanic of Raman Tractors, who was responsible for conducting the repairs, instructed these customers to bring their tractor to the workshop. Previously, customers such as these had not had to come to the dealership for such work as the other tractor dealers would send mechanics to farms to undertake repair work. Overall, Harun concluded that the dealership was not performing satisfactorily, despite Raman's best efforts. Raman had invested heavily in building the dealership that met all the specifications of Farmland in terms of physical infrastructure for his dealership, up-to-date technology and requisite manpower with relevant work experience. However, the results were not as expected. Raman was unsure how potential customers did or even should perceive his dealership. He wondered if he needed to undertake some activities that he was not doing so far, or remain patient and wait longer for sales to improve. There was tremendous pressure on Raman to deliver results in the last quarter of 2020. Raman knew that his business and reputation depended on his sales performance. He also knew that it took time for marketing initiatives to materialize into sales in the tractor business; hence he needed to immediately initiate action in the market to achieve the results in the near future. The Lalitpur Market for Tractors Lalitpur was the headquarter town of the Sambalpur district. Tractor dealerships in Lalitpur served the entire Sambalpur district. It was an agricultural belt with most farmers having small landholdings of 3-4 acres (1 acre is equal to 0.40 hectares). The farmers grew staples such as rice and some seasonal vegetables. Tractors were used as the primary means of hauling a loaded carriage. The use of tractors for haulage work was slowly growing, and it was almost 20% of tractor use. However, all the tractor purchases in Lalitpur market were primarily for agricultural use, some of which were rented for haulage work during off season. The farmers in the area were generally prosperous. Most farmers had family members who were also gainfully employed in jobs in faraway towns and cities or had some other additional sources of income. The district's prosperity had improved in the last three years after the canal providing a regular water supply was constructed in 2017, enhancing agricultural productivity. The tractor population of the area had doubled in the last three years, which had encouraged tractor companies to develop the demand for tractors in the entire Sambalpur district by conducting aggressive sales and marketing activities. It was expected that the tractor population of the district would further double in the next three years. There were approximately 800 villages in Sambalpur district, each with a population of 200 or more people. Most of these villages had one to four tractors, which indicated that many more tractors could be sold in each village. The average life of a tractor was seven to eight years; hence, there was potential for replacement buyers of tractors in each of these villages. The 2019 total tractor sales of all the tractor companies put together were 450 units in the district The Competitive Landscape Traditionally, Mercer was the most popular tractor brand in the Sambalpur district. Their 30-35 horsepower tractors were priced affordably and performed well in the field. However, their fuel consumption and maintenance costs were higher than those of competitors when the tractors' lifetime of five to ten years was considered. The resale value of Mercer tractors was also good, as there was a steady stream of customers ready to buy second-hand tractors. In the last three years, Judoka, a new brand of tractor, captured a large share of the tractor sales of the Lalitpur market. Judoka products were costlier than Mercer tractors, but had higher engine power, ranging from 35-60 horsepower, and better technology, were longer-lasting and operated with negligible maintenance costs. Farmland Tractors enjoyed the reputation of being a premium product, priced almost 5- 10% more than all competing products available in the market and requiring very low maintenance costs. However, Farmland was traditionally not aggressively marketed by its dealers; thus, they had been less successful than Judoka in the last few years. During the last two years, customer sales, financing and service-related experiences with the Farmland dealer were not satisfactory; hence, the company's reputation had taken a beating among the customers in Sambalpur district, who were buying from the Lalitpur market. Consequently, even the resale value of Farmland tractors had fallen considerably during the last few years in Lalitpur. There were two more tractor brands in the Lalitpur market; both were new to the customers in the Sambalpur district. Hence, these two tractor brands had very few tractors in the field, and the dealers of these brands were trying to generate demand by using aggressive sales techniques, including the fieldwork of visiting villages and farmers. There were approximately 2,000 tractors used by farmers in the Sambalpur district. In terms of specific brands, more than 1,000 were Mercer tractors, approximately 300 were Judoka and only 130-150 were Farmland tractors. The identity of the balance of the tractors was unknown The Customers In 2020, tractor buyers in Sambalpur could be classified in different ways. Although most purchases were for farming needs, about 10% of tractor sales was for haulage, where the more powerful horsepower capacities were required. Only Judoka tractors met this criterion. First-time buyers were cautious about their purchase. They trusted those who had experience using or owning tractors, mechanics who worked on tractors or other vehicles, or even their relatives who compared the products on the internet. However, for evaluating finance options, they depended on the village elders. Buyers who had previous experience buying tractors were more experimental with new brands. They required a detailed understanding of the technical and commercial aspects of the product, whereas their dependence on other people was less than for first-time buyers. These experienced customers were more knowledgeable and insisted on better prices. The exchange value of their old tractor was a key element in their purchase of a new tractor. Commonly, the exchange value was the key point of their purchase decision. In most villages, only one tractor brand was present; at most, a village had two brands of tractors. This peculiar trend was because farmers lent their tractors to their friends and neighbors. So, farmers of the same village had first-hand experience with a specific brand. Also, being a high-priced item, farmers gathered information on tractors from available sources before arriving at their purchase decision. Most farmers relied on other tractor owners for collecting information on tractors. In most cases, farmers bought the same brand - and even the same model of tractor - as their neighbors owned. Being a premium brand, Farmland had the advantage that its customers were relatively wealthy, had social clout in the villages and, as a consequence, many people listened to them. Tractor Marketing Tractor marketing included regular village visits by the dealer salesman, convincing potential customers to consider the marketer's company and demonstrating tractor functionality if need be. One crucial element was checking the financial needs of the potential customers, assessing their creditworthiness and arranging for the same through a financier. Apart from salespeople in the dealership, most tractor dealers relied on developing a network of influencers, to whom they gave some commission against sales generated by them. These influencers could be existing tractor owners, the village headman, the local tractor mechanic, or anyone who could influence a farmer's new tractor purchase. If a dealer did not have influencer support, generating targeted sales was difficult. A tractor cost around INR 0.5 to 0.6 million (note that USD 1 is approximately equal to INR 75). That is, tractors are expensive and purchases of these critical pieces of equipment entail much involvement for the majority of farmers in Sambalpur. The demonstration of a tractor was quite helpful in convincing the farmers about the effectiveness of the particular brand of tractor. Some tractor manufacturers even attempted competitive demonstration when they wanted to demonstrate specific advantages of their tractors compared to the popular brand in a specific market. However, the tractor demonstration was itself not adequate to drive sales. Most of the customers needed additional assurance before buying an expensive product such as a tractor, for which they depended on village elders, friends and tractor mechanics. Some customers had a weak financial position, so they neither had the money nor access to credit from financiers as they were not considered creditworthy. Such customers were ready to buy tractors of any make, provided they could get financing from the dealership. As a result, they were the most accessible customers for the dealerships and possibly also the riskiest. Selling on credit to these financially risky customers could block capital and eventually lead to financial loss for the dealership, apart from the associated bad customer relationship and publicity. Background of Raman Tractors Amit, son of a farmer, had set up a fertilizer and fodder shop in the Lalitpur market in 1997. By hard work and good behavior, he built a reputation as one of the best fertilizer and fodder shops among the farmers of Sambalpur district. Amit had used one tactic to develop his business, which was giving credit to the tune of INR 20,000 to 50,000 to farmers at the beginning of the sowing season and recovering it during the harvesting season. By early 2000, his customer base had spread across the entire district, and his business was known to offer excellent prices and a long credit period. Amit used one of his trusted nephews, Mahadev, to do the field visits and collection from creditors. Amit himself focused on attending to the farmers visiting the shop and procuring the fertilizers and fodder at the best commercial terms. Amit was knowledgeable about fertilizers, was an authorized dealer of all the notable brands selling in the Lalitpur market and kept adequate stocks to meet customer demand. Amit's 22-year-old son Raman graduated from a college located in a metropolitan city of India in March 2020. Though Raman had completed his schooling in the village, he was a studious person, and Amit had never involved him in business. Amit was confident that he had a good business and a strong reputation in the market. He would be able to settle his only son in any business which was related to farming. Now, Amit was considering opening a new line of business for Raman. Farmland Tractors had an old dealership in the Lalitpur market. The dealership had not generated the desired sales for Farmland since 2017, when the competition intensified in the Lalitpur market. The after-sales service provided by the dealer was also not good, which made many old Farmland customers unhappy due to the unavailability of spare parts and unsatisfactory repair work. Thus, Farmland customers were spreading unfavorable word of mouth about the dealer. Overall, the Farmland brand was not doing well in the Lalitpur market in 2020. Although there were no complaints about tractor performance, the brand had significantly lost its customer base. Harun, sales executive of Farmland Tractors, approached Amit in June 2020 about taking on the Farmland dealership for the entire Sambalpur district. He explained that the old dealership was closed for business during the previous month for lack of sales performance and because of customer complaints. Harun promised Amit all marketing support such as competitive prices for the tractors for the entire first year and technical help setting up a modem sales and service facility. In return, Harun expected Amit to invest INR 2.5 million in the business, provide an appropriate sales showroom and service workshop, employ an adequate workforce for the dealership, train employees and devote adequate time to building the tractor business. Harun expressed confidence that Amit had the required goodwill among the district's farmers to revive Farmland tractor sales in Sambalpur. Amit discussed the proposal with Raman, and Raman was eager to start the new business. Raman Tractors was designated as the authorized dealer of Farmland Tractors in the Lalitpur market, catering to the entire Sambalpur district. History of Farmland Tractors in Lalitpur On October 6, 2020, Raman asked his father for his advice on how Raman Tractors could overcome the shortfall in sales and meet the targets set by Farmland for the year 2020. Amit and Raman decided to meet Chander, the old Farmland dealer of Lalitpur, to get his perspective and elicit suggestions on the tractor business. In the interaction with Amit and Raman, Chander shared that he had started the dealership in April 2010, and Farmland was initially very supportive. Its staff visited the dealership and the field regularly and trained the dealership workforce. However, within several years, Farmland gradually reduced support for exchanging old tractors, promotions and advertising. Farmland sales executives, including Harun, had good behavior when sales were happening, but they dumped tractors without orders when sales did not happen. When confronted by Chander, the Farmland sales executives always gave the same answer, that they were under tremendous pressure from the company to achieve sales targets, which they were compelled to pass on to dealers. The salespeople pressured Chander to sell on credit, which led to excess stock and credit with customers, which blocked his investments. Within a few years, the Farmland business was no longer profitable; hence, Chander left the company. He further elaborated: W The company had introduced Dealer Information Systems in the last year, which occupied the dealership workforce in filling up data rather than working in the field. They also wanted me to drive the mobile technology-based digital interface they had introduced to manage customers and the sales force. I had to appoint a part-time computer person. I was a small dealer, but they were only after systems and processes as if I was running a business empire like Tata and Birla [large business houses in India) Chander further added: Exchanging old tractors was essential for selling new tractors and it was a very tricky business. Almost 30% of my sales were dependent on the exchange of old tractors, and the company had an online web portal for supporting such sales. However, I never got good prices from the portal. Customers demand too much value for their old tractors, and I could not sell them at such exchange prices. Initially, the company gave price support on the exchange, but they discontinued this over time. Eventually, I had to develop my system for disposing of old tractors, and it was not profitable. While commenting on credit sales, Chander noted: I suffered greatly in the process of financing tractors. The company had agreements with all the leading finance companies, to take up the cases of Farmland customers at favourable terms. As luck would have it, many early customers did not get the expected financing. Consequently, margin money became much higher and difficult to recover, blocking the investments. Some nonstarter financing even ruined my credibility in the market, and no financers were ready to lend to my customers. Note that margin money is the price of a tractor, less the amount financed. In essence, margin money represents the money that the dealership had to recover from the buyer. Spare parts were a major pain point for the dealers. Chander explained: The company wanted dealerships to have a complete spares inventory so that all tractors of Farmland, new or old, could be serviced. We could not sell these spares as , the local market had similar products at much lower prices. I have now sold the inventory at a considerable loss. The company officials always talked about processes and data, even for spares. Chander was very cross at Farmland. He continued: Even when they asked me to do sales promotion activities like customer meets and service meets, while settling bills they wanted lots of proof about utilization of funds, citing audit requirements. If I calculate properly, I must have had to pay from my pocket for all these company initiatives. Yes, they did a van-based rural market promotion in my area and covered the entire potential market at their own cost, but the company never got any customers for me. I had to earn each one of them. It was too much: I spent time developing a large business system while my sales were not happening. My workforce was not getting any incentive as sales were low. They could not meet their basic needs, and I had to give them a loan; otherwise, they would have left. Now that money is also blocked. Hence, I gave Harun three months' notice and stopped dealing after exactly 10 years of business. At the end of the meeting with Chander, Raman was quite jittery. He could easily identify with Chander as Farmland was persistent on their demand to maintain and furnish data for everything. In his short stint with Farmland, Raman also faced challenges of consumer financing, lack of price support on exchange tractors, and excessive spares inventory. Amit realized that Raman was stressed, so he calmed him down and said it was essential to understand the situation from the market conditions and customer point of view. He shared that he was not well versed in the tractor business, but he was familiar with the business landscape of the Lalitpur market. Amit promised to investigate and determine the problems in the market and give him feedback. After a week, Amit gave the following feedback to Raman: The previous Farmland dealer had not served the market well, and their salespeople were not visiting the market regularly. Hence the customers did not find the salespeople to be credible. Unfortunately, the credibility issue continued to persist. During field visits, all those customers Raman met were had been contacted by the salespeople of Raman Tractors - just a few days before Raman's visit. The salespeople were not good at handling customer questions and objections. When faced with customer queries, these salespersons had shared that they would be getting the principal dealer to visit, and that he would solve all the customer problems. The potential customers whom Raman met in the last two months considered Raman to be a good person. However, the commercial deal, especially for exchange tractors, was not as good as the competition. Hence many went to the competition to make their tractor purchase. In the minds of the farmers from the entire district, Farmland had a poor image for after-sales service and a lack of spare parts. Many finance companies had commercial agreements with competitors' dealers and were ready to serve most of their customers. However, these finance companies were not willing to extend credit to many Farmland customers. The finance companies attributed this to many nonstarter loans (loans that experience default on the first instalment) on Farmland tractors in the past, which made them impose more stringent rules and obligations. The Way Forward Raman started realizing that starting a business was easy but sustaining a profitable business was the real challenge. Based on the discount structure of Farmland, market conditions and his current cost base, he needed a monthly sale of at least eight tractors to break even. He was determined to find his way forward. What should be his sales and marketing strategy? What type of support could he reasonably expect from Farmland and what would he have to manage for himself